High Court quashes regulations due to breach of duty to consult

Background

In July 2022, amid industrial action in the rail sector and anticipated industrial action in other industries, the then Secretary of State for Business, Energy and Industrial Strategy (the "Secretary of State") made the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 (the "2022 Regulations"). The 2022 Regulations revoked regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which had made it a criminal offence for an employment business to knowingly introduce or supply workers to an employer where they would carry out the work of employees taking part in industrial action. Regulations making the supply of workers in such circumstances unlawful had existed in various forms since 1976. 

The proceedings

13 trade unions brought judicial review proceedings challenging the Secretary of State's decision to make the 2022 Regulations on the following grounds:­­­

Ground 1: The Secretary of State had failed to comply with his statutory duty to consult under section 12(2) of the Employment Agencies Act 1973 (which the 2022 Regulations were made pursuant to); and

Ground 2: The Secretary of State had breached his duty under article 11 of the European Convention on Human Rights ("ECHR"), to prevent unlawful interference with the rights of trade unions and their members. 

In response to Ground 1, the Secretary of State sought to rely on a public consultation on the revocation of regulation 7 which had been conducted in 2015 (the “2015 Consultation”) and argued that the claim should be dismissed because it was “highly likely” the outcome would have been the same even if further consultation had occurred. 

On Ground 2, the Secretary of State disputed that article 11 ECHR had been breached and argued that, even if there had been a breach, it was proportionate – article 11 being a qualified right. 

The decision

On 13 July 2023, Mr Justice Linden held that the then Secretary of State had failed to fulfil his statutory duty to consult and ordered that the 2022 Regulations be quashed. Linden J upheld Ground 1 and therefore did not consider it necessary deal with Ground 2.^[1]

The duty of candour

The Court first emphasised the importance of the duty of candour, which requires the parties in judicial review to provide full and accurate explanations of all the facts relevant to the issues.^[2] The Court was particularly critical of a departmental employee’s witness statement relied on by the Secretary of State, which at times referred generally to what “the Government” thought or did where there was no evidence as to what the Secretary of State thought or did. Linden J noted that such statements were unhelpful and made it unclear what material had been seen by the Secretary of State and what had not. These remarks follow a string of recent criticisms of public bodies in relation to the duty of candour, most dramatically in HM & Ors, R. (On the Application Of) [2022] EWHC 2729 (Admin) (see our article on this here).

The statutory duty to consult

The Court found that, even if it were possible for the Secretary of State (in 2022) to rely on the 2015 Consultation to fulfil his statutory duty to consult, he had not done so on the evidence. This was because there was no evidence that the Secretary of State had used the 2015 Consultation to inform his decision to make the 2022 Regulations. Linden J noted that the Secretary of State had very little information about the responses in the 2015 Consultation before him and did not ask to see an analysis of the responses which was offered to him. The Secretary of State’s lack of interest in the 2015 Consultation or evidence on the impact of the proposal to revoke regulation 7 was also indicated by his decision to proceed with the proposal at exceptional speed.

The Court also considered whether, if the Secretary of State had adequately considered the 2015 Consultation, the decision not to request a further consultation was contrary to his statutory duty to consult. Linden J found that the failure to request a further consultation was contrary to the statutory duty and was so unfair as to be unlawful, and indeed, irrational. This was because of  the failure to request updated views and evidence despite the lapse in time since the 2015 Consultation and the developments that had occurred during the intervening period.

Relief and s 31(2A) of the Senior Courts Act 1981

The Court was also not persuaded that a rational and open-minded Secretary of State would be “highly likely” to come to the same decision had further consultation occurred and therefore declined to refuse relief under section 31(2A) of the Senior Courts Act 1981. Linden J noted it was difficult for the Secretary of State to establish this hypothetical because this was not a case where there had been substantial compliance with the statutory duty to consult and nor was the proposal to revoke regulation 7 obvious and undisputed. The judge concluded it was not possible to predict with accuracy the responses that would have been received in a further consultation, especially given the changes in circumstance which had occurred since the 2015 Consultation. While it may have been that a Secretary of State would have proceeded to revoke regulation 7 even after further consultation, it could not be said that they were “highly likely” to do so.

The Court also rejected the argument that quashing the 2022 Regulations would result in undue administrative inconvenience and/or detrimental impact on third parties, noting that if the government sought to revoke regulation 7 in the future, this would only require a public consultation and further consideration by the Secretary of State as to whether to implement the proposal. Linden J did not consider that this would cause widespread difficulties for employers affected by industrial action in the interim, noting that the evidence so far indicated employers were unlikely to source important public service cover through employment agencies.

Comment

The case highlights several important principles of judicial review: 

• Challenging the making of regulations (i.e. secondary legislation) is sometimes considered difficult, but this case is a reminder that regulations can be subject to challenge just like any other decision by a public body.
• Similarly, a breach of the duty to consult is sometimes considered less likely to lead to a meaningful remedy, with courts sometimes hesitant to “punish” a public body for a mere procedural flaw. This decision demonstrates that that is not always the case: a failure to consult properly can lead to serious consequences.
• While it is frequently pleaded by defendants, relief is unlikely to be rejected under 31(2A) of the Senior Courts Act 1981 in circumstances where it is unclear what the responses to a further consultation would have been.
• The case is also a reminder of the importance the Courts place on the duty of candour and the impact that failing to meet this standard may have on a party’s case. In particular, it is a warning that government witnesses should not give evidence speaking for what the “Government” thought or did without clarity or an ability to substantiate the evidence.

Footnotes: 

[1] Associated Society of Locomotive Engineers and Firemen & Ors, R v The Secretary of State for Business and Trade [2023] EWHC 1781 (Admin) (available here).

[2] [65] referring to Singh LJ in R (Citizens UK) v Secretary of State for the Home Department [2018] EWCA Civ 1812.