Considerations for aid recipients

Legal right to state aid

Is there a legal right for businesses to obtain state aid or is the granting of aid completely within the authorities’ discretion?

Subject to any potential arguments based on legitimate expectations generated by the actions of a public body, businesses do not have any general rights to insist on receiving aid. Rather, the granting of aid in the UK falls within the discretion of the relevant authority. In addition, several aid schemes in the UK impose specific eligibility criteria that must be satisfied before a business will qualify to receive aid under the scheme.

Main award criteria

What are the main criteria the national authorities will consider before making an award?

As mentioned in question 10 above, the criteria that national authorities consider before deciding whether to grant an award will vary depending on the relevant scheme. The application of such criteria is often clarified in guidance, framework documents or on the administrating body’s website. Under the State aid SI, specific provisions are made for aid measures in urgent cases where the aid grantor can grant aid before obtaining CMA approval. This provision can be used in certain cases where aid is granted to remedy serious disturbances in the UK, preserve financial stability or prevent serious social hardship. However, before granting aid in urgent cases, the grantor must inform the CMA and must have regard to any relevant CMA statement of policy.

Strategic considerations and best practice

What are the main strategic considerations and best practices for successful applications for aid?

In order to receive aid under a general scheme, applicants must normally demonstrate that they satisfy the eligibility conditions of the particular scheme. Applicants will often address the relevant eligibility conditions in their initial application, and it is important that application forms are drafted so as to clearly identify how the relevant criteria are met. The exact process for applying for aid often varies depending on the relevant administrating body, and prospective aid recipients should therefore contact the relevant body for information on how to apply for aid.

Challenging refusal to grant aid

How may unsuccessful applicants challenge national authorities’ refusal to grant aid?

Where an applicant has been unsuccessful in applying for aid, it might be possible to challenge the public authority’s negative decision through judicial review proceedings. Such proceedings essentially involve a challenge to the manner in which a decision has been made, rather than the substance of the decision. Further, if the applicant can prove that it has suffered loss caused by the negative decision, it might, in limited circumstances, be possible to lodge an action for damages against the authority in the civil courts. Further detail is provided in questions 20, 21 and 22.

Involvement in EU investigation and notification process

To what extent is the aid recipient involved in the EU investigation and notification process?

The process for notifying state aid, as well as any potential investigations into aid, will predominantly involve the relevant member state rather than the aid recipient. However, while the aid recipient does not enjoy any formal rights to be involved in the notification or investigation process, in practice the relevant public authority is often willing to engage with the recipient. The aid recipient is particularly likely to be afforded an opportunity to engage with the notification or investigation process where it possesses information or expertise that is required to advance the notification or to address any Commission concerns.

This may well change when the CMA takes over state aid enforcement from the Commission (see question 2). However, it should be noted that, under the State aid SI, the obligation to notify aid will remain with the aid grantor rather than the recipient.