As is now well established, public law can be used by parties in order to found claims against public bodies, or as a defence against claims brought by such public bodies. Here we consider the recent example of Bloomsbury International Limited v The Sea Fish Industry Authority [2010] EWCA Civ 263, where Bloomsbury successfully recovered levies that it had paid to the Authority by way of a private law restitution claim relying on public law principles.

Key Points

  • The availability of public law as a basis for a claim or defence depends on whether it would be an abuse of process to run such arguments, when they could have been raised in judicial review proceedings – the law in this regard is developing.
  • The options available to entities will be case-specific, but consideration of these issues along with the possibility of judicial review proceedings is an important part of litigation strategy.
  • The risk in not commencing judicial review proceedings is that this might be regarded as abusive, and the entity might be left without recourse to judicial review proceedings, which must normally be issued promptly and in any event within 3 months.
  • However, notwithstanding that this is a developing area, the courts are showing a consistent reluctance to find abuse without testing the merits of the substantive challenge, particularly where the issues are important and there is no prejudice to the public body.  

Collateral challenge

The starting point for public law challenges is that they should be made by way of a statutory challenge within the timescale prescribed in the statute or by judicial review proceedings against the public body concerned, promptly and in any event within 3 months of the grounds of challenge arising, with extensions to that time possible but not usually permitted. However, there can be other cases where public law can be invoked outside of the judicial review or statutory challenge context.

At least since Wandsworth London Borough Council v Winder [1985] AC 461, it has been accepted that public law can be used as a defence to a private law action, subject to abuse of process. It might also be used to found a claim in limited circumstances. For example, where the public body has already been enriched, a restitution claim might be available to recover the benefit granted. This is known as 'collateral challenge', since it involves using public law otherwise than in proceedings for judicial review. Examples are available from a number of contexts including in respect of commercial contracts with public bodies, directions made by regulators, and / or the recovery of or resistance to penalties or levies imposed.

Obviously, the availability of public law collaterally depends on there being an underlying public law argument. This engages consideration of public law grounds which for convenience can be grouped under the headings of unlawfulness, irrationality and procedural impropriety. The weaker the argument, the more exposed an entity is likely to be to allegations of abuse by the public body, although there might still be some mileage in the context of well-timed alternative dispute resolution.

Entities considering whether to bring judicial review proceedings, commence a private action or defend civil proceedings using public law must carefully develop their strategy with procedural considerations firmly in mind. Judicial review proceedings have a strict and short time limit. The existence of possible collateral challenge does not automatically engage the court's discretion to extend time. On the other hand, civil or commercial actions are likely to have a longer limitation period.

The Bloomsbury example

Background

Put simply, the Authority in Bloomsbury had imposed a levy pursuant to the Sea Fish Industry Authority (Levy) Regulations 1995 (the 'Regulations') in respect of sea fish and sea fish products ('fish') first brought to land elsewhere and then imported into the UK. Bloomsbury had paid the levies, but argued that they were unlawful, on two bases. First, the Regulations were unlawful because their parent Act, the Fisheries Act 1981 (the 'Act') did not empower the Authority to impose levies beyond fish landed in the UK. Second, such a levy would be contrary to Articles 28 and 30 of the Treaty on the Functioning of the European Union ('TFEU') as a charge having an effect equivalent to a customs duty. In the High Court, Hamblen J found in favour of the Authority. Bloomsbury appealed.

The appeal

The Court of Appeal disagreed with Hamblen J, deciding that the Regulations were unlawful since the power in the Act did not extend to what the Authority had done. In any event, the Regulations were contrary to the TFEU.

The Court of Appeal's reasoning turned on the interpretation of the Act and the Regulations (legal issues). The Court of Appeal reiterated the usual principles of interpretation that words should be given their plain and natural meaning in context, which in this case meant considering the word in issue – 'landed' – and its usual meaning in the fisheries context. Although it was not necessary for the Court to go on to consider the TFEU arguments, it did in order to reinforce the result achieved, which was an interpretation that conformed to EU law. Standing back, the Regulations imposed a charge equivalent to a customs duty.

Comment

Bloomsbury is an example of how unlawfulness can be used to found a collateral private law challenge against the effect of secondary legislation (here, the Regulations). Bloomsbury's only option was a private law action for restitution, since it had already paid the levies: a monetary remedy would not be available on judicial review. If there had been prejudice, the Authority might have been able to argue that the defence of change of position (relevant to restitution claims) should apply.

We note that in the High Court ([2009] EWHC 1721 (QB)), the Authority unsuccessfully ran an argument that it would be an abuse of process for Bloomsbury to raise unlawfulness collaterally, when it had not started a claim for judicial review. The Authority did not cross-appeal on the abuse argument; if it had, it almost certainly would have lost on this ground given the substantive findings of unlawfulness. That said, abuse will inevitably turn on the facts and in this developing area, strategy should be carefully developed and managed.

We note too that the High Court did not regard an adequate response to a limitation argument to be that Bloomsbury could not reasonably have been expected to read the legislation for itself; this was because the legislation was of obvious financial significance, the companies were substantial and the levies involved large monthly payments. This reinforces the point that the availability of collateral challenge does not necessarily result in an extension of a time period, where extension is possible, thereby keeping the risk of abuse at large.

As such, an entity with a public law challenge might be better off by beginning judicial review proceedings (assuming that there is no set statutory route of challenge), especially if the circumstances of its case could well run into abuse arguments in a private law action. On the other hand, if it is too late to bring judicial review proceedings or the remedy sought would not be available in judicial review proceedings, then it might not be too late to use public law principles in private law proceedings; however, caution is needed.