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A disastrous case (for the claimants) which goes back to the basics of consultation law

At times of economic crisis such as, for example, the one in which we live, one of the favourite things for journalists to do is to dredge up from the mists of the Office for National Statistics how much the prices of common household goods will increase. You’ll have seen it time and time again on the news. There’s usually some sort of graphic of a shopping basket, and out of it will pop a loaf of bread, toothpaste and a bottle of wine, each of them with a label attached. +4.5% on bread! +6% on toothpaste! +3% on wine! Outrageous, and we all watch, and feel a little bit sad as our wallets tighten.

These increases are usually drawn from one or more price indices. The two most common are the Retail Price Index (RPI), and the Consumer Price Index (CPI). It’s long been known to the UK Statistics Authority (UKSA) that RPI has significant methodological flaws which make it increasingly unreliable as a measure, and for most purposes it has been replaced by CPI. By law however, the UKSA are required to maintain RPI as a measure, flaws notwithstanding.

One of the purposes for which RPI is still used is for index linked government gilts (a form of investment often used by pension funds and other investors), and some of these gilts have clauses that allow them to be redeemed early in the event of significant changes to the RPI that would impact on stockholders. So when the UKSA proposed to correct the shortcomings of the RPI by importing the methods and data of CPI to shore it up, a question arose as to how this might impact holders of gilts. It was on this basis that a challenge was brought against the decision.

The case was long and complicated (unbelievably I’ve simplified it with only three abbreviations!) and the detail is largely irrelevant to the majority of people, but it is an interesting example of a near total collapse of consultation grounds for claimants. We’re aware that mostly when you hear from us on legal cases it’s because some public authority has been found to have acted unlawfully, which can make it feel like the legal system is set against you- but this is a good example of how it’s not.

In this case we went right back to the fundamentals of consultation law, which gave us three key reminders about how those fundamentals operate. Although the UKSA had undertaken a consultation on how methods and data sources were to be imported, they had not consulted on whether they should do this. The claimants argued three points. Firstly, that they did in fact consult, so they should have done so in line with the Gunning Principles. Secondly that they should have consulted on whether they should do this as a matter of fairness, and thirdly that to fulfil the Tameside duty of sufficient inquiry on the decision required consultation.

In the course of deciding on one of the grounds unrelated to consultation, the court had had cause to identify what the statutory purpose of the requirement to maintain the RPI was. Was it merely to ensure the quality and robustness of statistics, or was it to consider the wider implications of changes to the RPI? The court decided it was the former, as to extend it to the latter would broaden the remit of the whole organisation far beyond its stated purpose. The same issue arose in the context of the consultation questions.

Claimants were essentially arguing that to lawfully discharge their duty the UKSA had to take into account the likely effect on users of RPI by way of consultation. However, as the court had already decided that the statutory purpose of the provision was only to maintain quality statistics and not to consider wider implications, this claim fell at the first hurdle. In recent years statutory duties and context have come under increased attention after they featured heavily in the Moseley v Haringey Supreme Court judgment. This case provides a reiteration of the importance of knowing what exactly your duties are- if they’re sufficiently specific, then consultation may not be necessary.

The first of the claims, relating to the consultation the UKSA had undertaken and arguing that it hadn’t complied with the Gunning Principles, was read by the court as an attempt to broaden the scope of the consultation, something which the court asserted was not a correct use of the principles. The Gunning Principles, the court said, “apply within the ambit of the consultation being undertaken”, and no authority had been identified which might permit them to expand the scope. This chimes with the general discretion given to consultors to decide the scope of their consultation- and though we know that absent options can be challenged in courts, it is not customarily done under a Gunning header. This claim also then fell.

The final claim related to the Tameside Duty of Inquiry. We’ve written about this in a little more detail previously, but this is the general duty for decision-makers to seek out the relevant information needed to make their decision. In this case claimants tried to claim that fairly doing so required UKSA to consult, as the Treasury had said that they did not have sufficient information about the effects on those who still used the measure. It is well-established however that the Tameside duty does not give rise to a general duty to consult unless it would be irrational not to obtain the views of stakeholders via consultation. Here the claimants had argued that it was unfair, not irrational, and they had not got close to proving irrationality, previous decisions on relevance to functions notwithstanding.

The case itself doesn’t advance the law particularly but it is a good example of a case which goes disastrously for the claimants (curiously the only person who came out of this with any sort of order was the Chancellor of the Exchequer, one of the defendants, who got a declaration). Given the statutory context and the principles involved it was certainly an ambitious set of claims for any claimant to make. Whilst the principles are generally applicable, this is another example of a case against a (pseudo-)regulatory body, which we’ve been seeing more of in recent times. Whilst this was an overwhelming victory for them, it does contribute to our feeling that regulators and similar bodies might need to be paying more attention to how they’re consulting.

About the Author

Stephen serves as the Institute’s Legal and Parliamentary Officer. Before joining the Institute Stephen studied Law at Bangor University and pursued a Masters’ degree in Aviation and Space Law at McGill University in Montreal. After this, he returned to London and was called to the bar in 2016 at the Honorable Society of Gray’s Inn, before deciding not to go into practice and move towards public policy work instead. Within the Institute, Stephen provides legal, political and policy analysis of UK and global current affairs of interest to consultors and consultees.

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