The new rules on time limits in judicial review are now in force. In addition, the recent decision of the Administrative Court in R (on the application of Nash) v Barnet London Borough Council (upheld on appeal) and the Court of Appeal in R (on the application of Willford) v The Financial Services Authority, set out guidance on when the limitation period for a judicial review claim starts to run and the availability of judicial review in cases where there is a statutory appeal process.

Reform of judicial review time limits

The Civil Procedure (Amendment No. 4) Rules 2013 came into force on 1 July 2013.  One of the key changes is the reduction of the time limit to bring a claim from three months to six weeks in planning cases and thirty days in procurement cases. For a more detailed analysis of the reforms please see the article in the May 2013 Public and Regulatory Law Group Newsletter here.

R (on the application of Nash) v Barnet London Borough Council [2013] EWHC 1067 (Admin)

The High Court has held that an application for judicial review was out of time. The challenge concerned the outsourcing of council services to private sector contractors. Mrs Nash's position was that grounds first arose for arose for judicial review when the Council decided to award a contract to Capita. By comparison, the Council argued that the substance of Mrs Nash's challenge was actually its decision to proceed with a procurement process to outsource the services.  That decision was taken more than 18 months before the application for judicial review was made. 

The court distinguished between decisions made in stages where:

  1. the earlier decision is "no more than a preliminary, or provisional, foreshadowing of the later decision" (in which case the grounds for a challenge first arise when the "final" decision is made); and
  2. the earlier and later decisions are distinct and each address substantially different stages in the process (in which case it is necessary to decide which decision is being challenged and if it is actually the earlier decision, then the later decision does not start time running afresh).

The court concluded that Mrs Nash's application was out of time as the application was actually a challenge to the Council's earlier decision.

The decision is available here.

On 2 August 2013, the Court of Appeal refused Mrs Nash's appeal, finding that the application was properly assessed as out of time and so correctly refused. The Court of Appeal's decision is available here.

R (on the application of Willford) v Financial Services Authority [2013] EWCA Civ 677

The Court of Appeal's judgment in this case reduces the scope for judicial review where there is a right to a statutory rehearing. The case involved a Decision Notice that was issued by the Regulatory Decisions Committee ("RDC") of the Financial Services Authority ("FSA") (now the Financial Conduct Authority) to Mr Willford, the former finance director of a bank. Mr Willford had failed to inform the board of the bank of negative financial information before a rights issue. As a result, the bank had to issue a profits warning, which meant that the rights issue had to be restructured and was largely unsuccessful. The Decision Notice found that Mr Willford had breached Principle 6 of the FSA Statements of Principle, namely that he had failed to "exercise due skill, care and diligence" in carrying out his role.

Instead of referring the matter to the Upper Tribunal ("UT"), which is the appeal procedure provided for in the Financial Services and Markets Act 2000, Mr Willford sought to challenge the RDC's decision by way of judicial review, on the basis that the RDC's reasons were inadequate. It is established law (and was common ground before the Court of Appeal) that where an applicant for judicial review has available to him an alternative remedy, the court will only allow a challenge by way of judicial review to proceed if that alternative remedy is somehow unsatisfactory.   Mr Willford's principal submission before the Court of Appeal was that, without full reasons for why his case failed before the RDC, he was unable to make an informed decision about whether to take his case to the UT.  Mr Willford was concerned that if his case went to the UT, fresh allegations could be made against him and the penalty imposed could be increased.

At first instance in the High Court, Silber J found that, as the UT's jurisdiction is to reconsider matters afresh, it had no power to require the RDC to give reasons. Accordingly, the UT would be powerless to grant the remedy sought by Mr Willford. It was common ground before the Court of Appeal that the UT has no power to quash a decision and remit it to the RDC. However, the key question was whether that meant that the opportunity to refer the decision to the UT for a fresh rehearing is an inadequate remedy. 

The Court of Appeal allowed the FSA's appeal. Moore-Bick LJ, with whom Black LJ agreed, allowed the appeal on the basis that the judge below erred in failing to appreciate that Mr Willford had available to him an alternative and more appropriate means of challenging the Decision Notice and accordingly a claim for judicial review should not have been entertained and the decision should not have been quashed. In particular, Moore-Bick LJ noted that the ability to refer an RDC decision to the Tax and Chancery Chamber of the UT (an expert, specialist tribunal) is an integral part of the statutory scheme of FSA supervision. Moore-Bick LJ said "it would be surprising…if Parliament had intended that disputes relating to the procedure adopted by the FSA should be reviewed by the courts, save in the most exceptional circumstances". He cited R (Davies) v Financial Services Authority [2003] EWCA Civ 1128 as authority for the proposition that the court should not permit an application for judicial review where such an alternative remedy is available, even in circumstances where (as in that case) it was said that the FSA had exceeded its powers.

Moore-Bick LJ preferred a pragmatic view, accepting that whereas the UT cannot quash the Decision Notice and remit the matter to the RDC for it to provide better reasons for its decision, the UT is able to consider the matter completely afresh and therefore is able to consider the substance of the case against Mr Willford. Moore-Bick LJ considered that "the 'real issue' …is whether Mr Willford's conduct fell short of that which was to be expected of him". Quashing the Decision Notice and remitting the matter back to the RDC for a better reasoned decision "would not advance the resolution of that issue".  He went on to observe that Mr Willford would, in conjunction with this advisors, have to take into account the risk of increased penalties and additional allegations being made against him in proceedings before the UT, and noted that Mr Willford's concerns about the inability of the UT to give him the remedy he needs as "overstated". Indeed, the majority of the Court of Appeal considered that Mr Willford would not be greatly assisted by additional reasons from the RDC given that the UT would be considering the matter entirely afresh.

Having decided the case on the basis of the adequacy and appropriateness of the UT procedure, the majority judgment went on to find that the RDC's reasons were in any event adequate.

Pill LJ also allowed the appeal, but solely on the basis that he also found the RDC's reasons to be adequate. Indeed, Pill LJ, who retired from the Court of Appeal this year, observed that he does not consider that judicial review in circumstances where there exists a statutory right to a rehearing to be as limited as the majority found it to be. He observed that the court's power to quash a decision:

"…is not excluded…simply because the person subject to the decision has an alternative remedy, a right to go to the Upper Tribunal. The FSA, and its nominated RDC, do not, because that statutory alternative remedy is available, have a licence to do as they please when considering a case and issuing a decision notice. They must give reasons and the reasons must be related to the facts found, and be intelligible…A person subject to a decision notice is entitled to a reasoned decision. The availability of a reference to the Upper Tribunal does not excuse failure to comply with that requirement"

Comment

It is clear that the mischief the majority sought to guard against was instances of individuals seeking to avoid the real substance of regulatory decisions against them by making applications for judicial review to challenge such decisions on a procedural basis.  Having said that, the impact of this decision on the availability of judicial review in respect of decisions where the statutory right is to a "traditional" appeal to a supervisory tribunal (as opposed to a full rehearing on the merits) remains to be seen. In those circumstances, where the role of the appellate body would be to either vindicate or impeach the regulator's decision (as opposed to remaking it), the prejudice that would be caused by ill-reasoned decisions is clear.

However, in a financial services context at least and despite Pill LJ's robust dicta, its seems that a combination of the decision in this case and the Court of Appeal's decision in Davies would restrict the availability of judicial review of RDC decisions to the most "exceptional" circumstances, which seemingly does not include instances where the original decision was made ultra vires or where the decision was poorly reasoned. In practical terms, it is unlikely that the RDC will now consider itself to have a carte blanche to issue Decision Notices without due regard to proper public law principles and effectively delegate the duty of fair decision making to the UT. The RDC is unlikely to wish to test the limit of what the court would consider "exceptional" and the actual effect of this judgment may well be that the RDC takes more care to ensure it makes well-reasoned decisions.

The decision is available here.