“Unfairness” in Administrative Law: R (Gallaher Group Ltd) v Competition and Markets Authority [2018] UKSC 25

There is a very useful discussion of the relationship between the “language” of administrative law and the grounds of review of judicial review of administrative action in the recent decision of the UK Supreme Court in R (Gallaher Group Ltd) v Competition and Markets Authority [2018] UKSC 25.

At issue here was differential treatment of parties investigated for price-fixing in the tobacco market. The claimants settled with the Authority in 2008. Another party also settled, but received an “oral assurance unwisely given” from the Authority that in the event of a successful appeal (by one of the other parties), the settlement would be set aside (at para. 48, per Lord Sumption). As it happened, there was a successful appeal, which was excellent news for the other settling party.

Understandably, the claimants were not best pleased, having given up their chance to appeal (they tried to appeal but were ruled out of time) and seeing another similarly situated party exit the affair with a clean slate. In 2012, they asked the Authority to give them the benefit of the assurance foolishly provided to the other settling party, the effect of which would be to withdraw the decision against the claimants and to refund the penalties paid. But the Authority refused.

On judicial review the claimants argued that the Authority’s approach violated the principle of equal treatment and was substantively unfair. They failed at first instance but persuaded the Court of Appeal to rule in their favour. The Supreme Court was not impressed, however.

As to equal treatment, Lord Carnwath was very firm:

Whatever the position in European law or under other constitutions or jurisdictions, the domestic law of this country does not recognise equal treatment as a distinct principle of administrative law. Consistency, as Lord Bingham said in [R (O’Brien) v Independent Assessor [2007] 2 AC 312, para 30], is a “generally desirable” objective, but not an absolute rule (at para. 24).

Lord Carnwath also commented on the relevance of “fairness” in administrative law: “Fairness, like equal treatment, can readily be seen as a fundamental principle of democratic society; but not necessarily one directly translatable into a justiciable rule of law” (at para. 31). He took the opportunity to trawl through the leading cases referencing “fairness” as a ground of review in order “to show how misleading it can be to take out of context a single expression, such as “conspicuous unfairness”, and attempt to elevate it into a free-standing principle of law” (at para. 40). In all of the cases, there was some other ground of review: “unfairness”, “conspicuous unfairness” or “abuse of power” were simply descriptive labels applied after the fact (at para. 37). In summary:

In summary, procedural unfairness is well-established and well-understood. Substantive unfairness on the other hand – or, in Lord Dyson’s words at para 53, “whether there has been unfairness on the part of the authority having regard to all the circumstances” – is not a distinct legal criterion. Nor is it made so by the addition of terms such as “conspicuous” or “abuse of power”. Such language adds nothing to the ordinary principles of judicial review, notably in the present context irrationality and legitimate expectation. It is by reference to those principles that cases such as the present must be judged (at para. 41).

The difficulty for the claimants was, whatever the duties the Authority owed in the negotiations leading up to 2008, the decision under attack here was the Authority’s refusal in 2012 to extend to the claimants the terms of a settlement negotiated with another party. At that point, the Authority was faced with three “unpalatable” alternatives (at para. 60, per Lord Briggs): going back on its promise to the other settling party (which would have provoked further litigation); extending the promise to all parties (which would have been very costly); or refusing to replicate the error. As Lord Sumption put it: “To say that a decision-maker must treat persons equally unless there is a reason for treating them differently begs the question what counts as a valid reason for treating them differently” (at para. 50). Here, there was a valid reason to choose the third option:

The fact that the giving of the assurance to TMR in 2008 was a mistake, that its withdrawal in 2012 would be likely to leave TMR even better off than if the assurance was honoured, and that the respondents had neither received or relied upon any similar assurance seem to me, taken in combination, to amount to a powerful objective justification for unequal treatment, as between TMR and the respondents (at para. 63, per Lord Briggs).

Quite right, as to principles and outcome I think.

This content has been updated on May 30, 2018 at 15:25.