Policies and Publicity: Recent English, Irish and Canadian Cases *Updated*

Updated September 13 to account for a recent Canadian decision on the same theme

Much governance in the contemporary administrative state is carried on by way of or reference to policies or guidelines. Three recent cases from England, Ireland and Canada address interesting aspects relating to the promulgation of policies or guidelines. Publicity is the common theme uniting the cases.

In R (Northumbrian Water Ltd) v. Water Services Regulation Authority, [2024] EWCA Civ 842, the Court of Appeal for England and Wales rejected the proposition that there is a common law duty to publish policies or guidelines to describe how a discretionary power will be exercised. There is no doubt that policies or guidelines are valuable tools for administrative decision-makers (see Daly, Understanding Administrative Law in the Common Law World (2021), at pp. 57-60) but the question here was whether a regulator has a positive duty to promulgate policies or guidelines.

Here, the regulator of water services had discretion about how to distribute the costs of water supply interruptions (caused in this instance by a spectacular storm) between the water company and its customers. But was it under a legally binding obligation to adopt policies or guidelines about how the discretion would be exercised? There had been some suggestions in this regard in previous cases.

In R (ZLL) v Secretary of State for Housing, Communities and Local Government, [2022] EWHC 85 (Admin), at para. 45, Fordham J described a common law “duty of prescription” as arising “where there are broad discretionary powers needing a statement of criteria, in order to secure appropriate consistency, to protect against arbitrariness, to allow informed representations and to facilitate informed challenge”. Earlier, in B v Secretary of State for Work and Pensions [2005] EWCA Civ 929 [2005] 1 WLR 3796, at para. 43, Sedley LJ had commented: “It is axiomatic in modern government that a lawful policy is necessary if an executive discretion of the significance of the one now under consideration is to be exercised, as public law requires it to be exercised, consistently from case to case but adaptively to the facts of individual cases”. And, of course, the UK Supreme Court has recognized in a couple of cases involving fundamental rights “that any policy touching sufficiently important interests will have to be made available in some form to those subject to it” (Understanding Administrative Law, at p. 59, citing R (Lumba) v. Home Secretary [2011] UKSC 12, [2012] 1 AC 245, at para. 35; R (Reilly) v. Work and Pensions Secretary, [2013] UKSC 68; [2014] AC 453, at para. 65).

The Court of Appeal was not persuaded, holding that there is no general common law duty to adopt a policy or guideline in relation to the exercise of a discretionary power. First, the previous cases could all be distinguished. Ultimately, policies or guidelines might be valuable, but not legally required:

Statute may impose a statutory obligation on a public body to issue guidance. Furthermore, it may well be good practice for a public body in appropriate circumstances to adopt guidance setting out the criteria for exercising discretionary powers. That would enable those affected to know how the discretion is to be exercised, enabling them to make informed representations, and would encourage consistency and transparency in decision-making: see the observations of Baroness Hale in Nzolameso v Westminster City Council [2015] UKSC 22, [2015] PRTS 549 at paragraphs 39 to 40 that “ideally” local authorities would have a policy for allocating housing to homeless persons and identified the advantages of having such a policy. That falls short, however, of holding that there is a duty at common law to adopt such policies (at para. 63).

In addition, the alleged duty of prescription did not match up with the remedy being sought by the water company:

Secondly, the language of a common law “duty of prescription” is unhelpful and, potentially, misleading. The appellant here, and water companies generally, will not in truth be seeking a mandatory order to compel the performance of a duty to adopt a policy setting out the criteria governing the exercise of the discretion. This case, and cases more generally, will involve a challenge to a particular decision involving an exercise of discretion, here granting only a partial exception in respect of water supply interruptions when making a determination adjusting the system of price controls under the licence. The issue is whether that exercise of discretion is lawful. That is to be determined by the application of the well-established principles governing the exercise of discretionary power. The mere fact that the Authority had not adopted a policy in advance to indicate how the discretion will be exercised does not of itself determine whether the decision is lawful or unlawful (at para. 65).

The Irish case is Conway v. An Bord Pleanala, [2024] IESC 34. This was a challenge to the constitutionality of s. 28(1C) of the Planning and Development Act 2000, which permits the Minister for Housing, Local Government and Heritage to give binding directions to planning authorities and the Bord (the ultimate arbiter in planning disputes). These directions concern various matters and, most importantly, permit developers to deviate from local development plans.

The bone of contention here was the breadth of the power given to the Minister. Section 28(1) provides: “The Minister may, at any time, issue guidelines to planning authorities regarding any of their functions under this Act and planning authorities shall have regard to those guidelines in the performance of their functions”. And s. 28(1C), the specific provision whose constitutionality was in issue, provides: “Without prejudice to the generality of subsection (1), guidelines under that subsection may contain specific planning policy requirements with which planning authorities, regional assemblies and the Board shall, in the performance of their functions, comply”. This was, in the appellant’s view, a violation of the non-delegation doctrine (see e.g. here).

Giving the leading judgment, Hogan J held that s. 28(1C) was constitutional. He applied the multi-factor test set out by MacMenamin J in Náisiúnta Leictreach Contraitheroir Éireann v. Labour Court [2021] IESC 36, [2022] 3 IR 515 (known as the ‘NECI’ case):

First, an assessment of the Act in order to determine whether or not it contains sufficient principles and policies, should be based on a reasonable, but not far-reaching, examination of the provisions. Second, the purpose of the various principles and policies criteria is to ask whether the legislation sets boundaries, in the sense of defining rules of conduct, or guidelines. Third, does the legislation have defined subject matter, and contain basic conditions of fact and law? Fourth, is the legislative purpose of the provisions discernible by identification of objectives or outcomes, as well as principles? Fifth, is the power delegated sufficiently delimited? Sixth, does the exercise of the subordinate power contain sufficient safeguards? Seventh, the primary question, is there an abdication by the Oireachtas of its constitutional role?

I do not propose to recount Hogan J’s analysis at great length, as one of his opening observations captures the essence of what follows:

While it may be said that these words have a pithy and laconic quality, they nonetheless place significant constraints upon the Minister. The Minister is not at large in exercising the s. 28(1C) powers. The guidelines must relate exclusively to planning policy and the performance of the functions conferred on local authorities and the Board. The powers must furthermore be exercised within the four corners of the 2000 Act, and it follows by extension that any guidelines must further relate to proper planning and sustainable development: see s. 34(2)(a) of the 2000 Act (at para. 29).

Of greatest general interest is Hogan J’s approach to the seventh ‘NECI’ point. He emphasized that whether the guidelines are published is an important factor in assessing the constitutionality of s. 28(1C):

Given that the SPPR guidelines made under s. 28(1C) of the 2000 Act at issue here have a binding character of general application which affects third parties, they must be deemed to have at least some of the appurtenant qualities of secondary legislation. The democratic character of the State provided for by Article 5 of the Constitution ordains, therefore, that at least basic publication requirements must be provided for in the case of guidelines with binding normative qualities in respect of third parties such as the s. 28(1C) guidelines which are at issue in the present case (at para. 37).

In Hogan J’s view, the publication requirements were adequate in this case to meet the constitutional standards:

Section 28(5) provides that any guidelines made under this section (i.e., both “ordinary” and “binding” guidelines alike) must be laid before the Houses of the Oireachtas. Section 28(6) provides that any planning authority must make any guidelines issued to it “available for inspection by members of the public.” Finally, s. 28(7) provides that the Minister “shall publish or cause to be published, in such manner as he or she considers appropriate, guidelines issued under this section.”  This publication requirement is, in my view, clearly sufficient to meet constitutional standards pertaining to the rule of law and ordinary democratic norms.

Turning to the question of democratic accountability, it must be acknowledged that the provisions contained in s. 28 for supervision of guidelines made by the Minister under that section by the Houses of the Oireachtas simply require that the guidelines have to be “laid” before both Houses in accordance with the procedures contained in Houses of the Oireachtas (Laying of Documents) Act 1966 and Part 13 of the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013. There is, admittedly, no procedure provided for in either in s. 28(1C) itself or elsewhere in the 2000 Act whereby any guidelines made under these provisions can be the subject of a formal approval or nullification resolution in either House. Yet it must be recalled that as the guidelines will have been made by the Minister pursuant to a statutory power, he or she will also be answerable to Dail Éireann in accordance with Article 28.4.1⁰. An important element of democratic supervision is therefore present (at paras. 38-39).

Now, the guidelines at issue here were binding guidelines. In a sense, describing them as guidelines, with the connotation that they are merely ‘soft’ law, is a misnomer as these instruments have a ‘hard’ law quality. Nonetheless, the constitutional significance accorded to publication requirements is very interesting, indicating that transparency is hardwired into the Irish constitutional order (even if it is not a general requirement of the common law). As to how the publication requirement is hardwired into the Irish constitutional order, see the useful summary of the different approaches set out in the judgment of Dunne J).

Consider, lastly, the decision of the Ontario Divisional Court in Harold the Mortgage Closer Inc. v. Ontario (Financial Services Regulatory Authority, Chief Executive Officer), 2024 ONSC 4464 (note that I have a long-standing solicitor-client relationship with the Authority, including in relation to this matter).

This was a challenge to guidance (“Transparency Guidance”) issued by the Authority pursuant to which details of enforcement action are published on the Authority’s website. The applicants claimed that posting details of the the enforcement action taken against them was unreasonable and damaged their reputation.

The claim was held to be non-justiciable (as I will explain in a separate post) but Backhouse J also helpfully laid out the rationale for the Transparency Guidance and confirmed its reasonableness:

•         To protect the rights and interests of consumers

•         To regulate and generally supervise the regulated sectors

•         To promote high standards of business conduct in the financial services sectors

•         To contribute to public confidence in the regulated sector

•         To deter deceptive or fraudulent conduct, practices, and activities by the regulated sectors.

The Transparency Guidance also states that “a clear and consistent approach to transparency of Enforcement Action also ensures that non-compliant related entities and individuals are treated evenly and know in advance when and how FSRA will inform the public that it is taking action for non-compliant activity.” The Transparency Guidance sets out that FSRA ensures greater awareness of its Enforcement Action by making Enforcement Information publicly available on the enforcement section of the FSRA web site and through news releases. It states that FSRA issues a news release when Enforcement Action is taken and that the combination of a news release and public posting of the Enforcement Information (here, the NOP) on FSRA’s web site promotes public awareness and reduces risk to consumers.

…

FSRA’s publication decisions are consistent with the practice of many other regulators which also publish their enforcement actions before an adjudication of the merits by a disciplinary tribunal. FSRA indicates in the published NOP that the document contains allegations that may be subject to proof at a hearing.

The issuance of the Transparency Guidance is reasonable—as was the process by which it was developed—and it serves the public interest (at paras. 84-87).

This is a very strong judicial statement in favour of transparency. Ensuring that the public has access to information about how public power is being exercised, and about potential breaches of industry standards, is entirely reasonable and, indeed, salutary. This is standard regulatory practice (or should be) and it is very helpful that the Divisional Court both recognized and endorsed it.

This content has been updated on September 13, 2024 at 14:55.