Gender Reassignment – The Legal Saga Continues

The Upper Tribunal has given judgment in the latest round of litigation concerning the compatibility of the UK’s legislative scheme for gender reassignment with EU law. In Secretary of State for Work and Pensions v HY (RP) [2017] UKUT 303 (AAC), the Upper Tribunal allowed the Secretary of State’s appeals against two decisions of the First-tier Tribunal. It held that the requirement in the Gender Recognition Act 2004 to obtain a Gender Recognition Certificate as a condition for claiming a state requirement pension in one’s acquired gender was compatible with Council Directive 79/7/EEC on equal treatment in matters of social security.  This was the case notwithstanding that such Certificates had prospective effect only.

Ben Lask acted for the Secretary of State. Brendan McGurk acted for the claimants.

To read the case note please click here.

NHS England’s refusal to fund treatment for 7 year-old boy unlawful

Mrs Justice Andrews has found the decision of NHS England to refuse to fund treatment for a 7 year-old boy with an inherited metabolic disorder, Phenylketonuria (PKU), to be irrational and unlawful. PKU is a condition which inhibits the ability to digest protein and prevents the body from breaking down an amino acid called phenylalanine. High levels of phenylalanine can cause permanent brain damage. The claimant, S, was unable to control his intake of protein due to his autism and so his consultant sought funding approval for sapropterin dihydrochloride (Kuvan) from NHS England. Kuvan is not currently approved by NHS England for funding for children although it is approved by the European Medicines Agency and is widely prescribed in countries across Europe including France and Romania. Despite the evidence that S’s phenylalanine levels were above the safe level and so putting him at risk of brain damage NHS England refused his consultant’s request for funding. In a detailed judgment which is highly critical of the approach taken by NHS England, Mrs Justice Andrews found the decision to be irrational and unlawful. The decision was quashed and now has to be retaken in light of the judgment and any further clinical evidence presented by S’s consultant.

S was represented by Ian Wise QC and Steve Broach, instructed by Hodge Jones and Allen.

The full judgment can be found here.

This is covered by the BBC here and The Guardian here.

CAT allows BT’s appeal against Ofcom’s BCMR

 

The Competition Appeal Tribunal has issued a ruling declaring that Ofcom erred in its Business Connectivity Market Review (BCMR), and quashing the market definition decisions upon which Ofcom’s “dark fibre” remedy was based.

In its BCMR Statement, which was published in April 2016, Ofcom defined various markets for the provision of “business connectivity” services, used by companies to carry data between locations. Ofcom defined a single product market for contemporary interface symmetric broadband origination (“CISBO”) services of all bandwidths; and four separate relevant geographic markets: the Central London Area; the London Periphery; Hull; and the Rest of the UK. Ofcom also made determinations concerning the extent of BT’s core network. Ofcom found that BT had significant market power (“SMP”) for CISBO services outside Central London and Hull, and proposed a package of remedies including a so-called passive remedy allowing Communications Providers to lease only the fibre element of the leased lines from BT, allowing them to attach equipment of their own choosing at either end to “light” the fibre. This remedy was referred to as Dark Fibre Access (“DFA”) and was to be implemented in October 2017.

BT appealed on the grounds that Ofcom had erred in its Product Market Definition, in that Ofcom had failed to identify a separate product market for Very High Bandwidth (“VHB”) services of 1 Gbit/s and above, in which BT does not have SMP. BT also argued that Ofcom had erred in its approach to the Geographic Market Definition, and in its determination of the boundary between the (competitive) core segments of BT’s network and other terminating segments. BT further argued that the dark fibre remedy was disproportionate, including because it would undermine infrastructure based competition for VHB services from providers such as Virgin Media and CityFibre.

A hearing took place in April-May 2017 over sixteen hearing days, in which the Tribunal heard BT’s arguments in relation to market definition and the competitive core. Yesterday, the CAT issued a ruling on those issues. The CAT has unanimously decided that Ofcom erred in defining a single product market, in concluding that the UK outside London (and Hull) comprises a single geographical market, and in its determination of the boundary between core and terminating parts of BT’s network. Those decisions will be quashed and remitted to Ofcom for reconsideration. The CAT is still preparing its reasoned judgment for its conclusions, which will be handed down in due course.

The imposition of the DFA remedy was contingent on the correctness of Ofcom’s market definition analysis. A further hearing of the remedies issues raised by BT had been scheduled for September 2017, to allow those issues to be considered, if appropriate, before the implementation date of the DFA remedy. Given that Ofcom’s market definition will now need to be reconsidered, the hearing has been vacated.

Daniel Beard QC, Robert Palmer, Ligia Osepciu and David Gregory represented BT.

Josh Holmes QC represented Ofcom.

Philip Woolfe represented a group of communications providers including TalkTalk, Vodafone, Colt and Hutchison 3G.

The ruling has already been reported by the Financial Times and the Daily Telegraph.

FTT rejects challenge to restitution interest provisions of the Corporation Tax Act 2010

In a decision released on 12 July 2017, the First-tier Tribunal (Tax Chamber) has dismissed the BAT group’s EU law, ECHR and common law challenges to the restitution interest tax provisions of Part 8C of the Corporation Tax Act 2010.  Part 8C, introduced in October 2015, imposes a charge to corporation tax at the rate of 45% on restitution interest (essentially, compound and other interest awarded against the Crown in claims for restitution of unlawfully levied tax or tax paid under a mistake of law) arising to a company.  The Part 8C charge is ring-fenced and not capable of being offset by reliefs, etc.

The FTT (Judge Berner) held that the provisions were compatible with (a) BAT’s directly effective EU law rights (including the principles of effectiveness, protection of legitimate expectations and proportionality, and rights derived from the EU Charter of Fundamental Rights); (b) BAT’s Convention rights under the ECHR (including under A1P1 and Article 6); and (c) BAT’s common law rights.

The decision is available here.

Andrew Macnab and Jack Williams represented HM Revenue & Customs (led by Alison Foster QC (39 Essex Chambers) and Philip Baker QC (Field Court Tax Chambers); alongside Aparna Nathan (Devereux Chambers) and Elizabeth Wilson (Pump Court Tax Chambers)).

UK Legislation on Sporting Services found to be in Breach of EU Law

This morning the Court of Justice delivered its Judgment in London Borough of Ealing v HMRC (Case C-633/15) in which the Court decided that the exclusion from the sporting exemption for which Note 3 to Group 10 of Schedule 9 provides is in breach of Directive 2006/112/EC.

This Judgment means that those public bodies who submitted repayment claims for output tax overpaid in respect of the supply of sporting services can expect to have those claims paid but those who wish to rely upon the treatment for which the domestic legislation provides can continue to do so until such time as the VAT Act is amended to remove the exclusion.

London Borough of Ealing were represented by Frank Mitchell and HMRC were represented by Raymond Hill and Peter Mantle.

A copy of the Judgment can be accessed here.

On 15 December 2016 the First-tier Tribunal in Belfast directed that the appeal in Magherafelt District Council v HMRC TC/2011/00687 be stayed until 28 days after the release of the judgment in Ealing. The District Council claims that its supplies of sports, leisure and recreational services fall outside the scope of VAT on the basis that the making of those supplies does not comprise an economic activity. It also contends that it makes the supplies as a public authority under Article 13(1) of the Principal VAT Directive. If successful, some local authorities will be better placed to claim an entitlement to recover part of the VAT costs they incur when providing sports, leisure and recreational facilities.

Melanie Hall QC and  Daisy Mackersie represent Magherafelt District Council and Raymond Hill represents HMRC.

Groundbreaking Administrative Court judgment finds that young child is entitled to damages following absence from education

In  R (E) v London Borough of Islington [2017] EWHC 1440 (Admin) the Administrative Court has held that a local authority is liable in damages to a young child (E) for breach of her human right to education under Article 2 of the First Protocol to the European Convention on Human Rights (A2P1). The Court (Ben Emmerson QC, sitting as a Deputy High Court Judge) also found that the local authority’s assessment of E’s care needs was vitiated by misguided reasoning and therefore unlawful.

The successful education claim marks the first occasion on which the English Courts have upheld a damages claim based on a breach of A2P1, after two Supreme Court judgments as a result of which such claims had failed (A v Head Teacher and Governors of Lord Grey School [2006] 2 AC 363 and A v Essex County Council (National Autistic Society intervening) [2011] AC 280; [2010] UKSC 33).  In the present case, E’s claim concerned three separate periods during which (the Court held) Islington was responsible for providing her with full-time education but – for one reason or another – failed to secure it. Notably, during one of those periods, Islington had accommodated E and her family in temporary homelessness accommodation in another London borough, and yet the Court was satisfied that Islington bore primary responsibility for the breach of E’s A2P1 rights during that period also.  The case will therefore be of interest not only because it is the first example of a successful damages claim based on A2P1 in this jurisdiction, but also because of its implications for local authority’s duties towards homeless children of compulsory school age, including those that they elect to accommodate in a different local authority district.

Following a contested hearing on consequential matters, E was also awarded 100% of her costs, and successfully opposed the local authority’s application for permission to appeal. Having found that E is entitled to damages by way of just satisfaction under section 8 of the Human Rights Act 1998, the Court has also set down a procedure for the determination of quantum.

Monckton’s Ian Wise QC and Michael Armitage acted for the successful Claimant throughout the proceedings, instructed by Rebekah Carrier of Hopkin Murray Beskine solicitors.

High Court rules that government’s “benefit cap” is unlawful

In a high-profile judgment DA and others v SSWP handed down today, the High Court (Collins J) has declared that the government’s controversial “benefit cap” policy is unlawful. An earlier version of the policy was considered by the Supreme Court in SG, in which the Supreme Court narrowly (by a 3-2 majority) ruled that the cap did not unlawfully discriminate against women, but also held (by a different 3-2 majority) that the cap contravened the UK’s obligations under Article 3 of the United Nations Convention on the Rights of the Child as a result of its drastic impact on children. In today’s judgment, the High Court has not only re-affirmed that the cap on benefits breaches the UK’s international obligations in respect of children, but that the revised version of the policy also discriminates against lone parents of children under two, as well as against such children in their own right.

The judicial review challenge, brought by four lone parent families, concerned the reduced benefit cap introduced by the Welfare Reform and Work Act 2016. The revised benefit cap drastically reduced housing benefits, leaving lone parent families across the country unable to afford basic life necessities to care for their children. Mr Justice Collins has ruled that the application of the revised benefit cap to lone parents with children under two amounts to unlawful discrimination and that “real damage” is being caused to the Claimants and families like theirs across the country. Upon considering the impact of the benefit cap, Mr Justice Collins concluded that “real misery is being caused to no good purpose.”

The government has been granted permission to appeal.

The judgment has already attracted substantial coverage in the print and broadcast media – The Independent, BBC.

A press release summarising the judgment is available here.

Monckton’s Ian Wise QC and Michael Armitage acted (along with Caoilfhionn Gallagher QC of Doughty Street Chambers) for the successful Claimants, instructed by Rebekah Carrier of Hopkin Murray Beskine solicitors. Ian Wise QC also acted for the Claimants in the SG case.

To read the case note written by Imogen Proud, please click here.

European Court considers an audacious challenge concerning the direct selling sector

The hearing of Case C-305/16 Avon Cosmetics v HMRC took place on 31 May 2017. It is a case which the European Court was told by Avon Cosmetics is keenly awaited by the direct selling sector. Avon launched an audacious challenge to the lawfulness of a derogation granted to  the United Kingdom by the European Council in 1989, which effectively replicated a derogation granted in 1985. The derogation permits the UK to collect VAT as output tax on the open market value of goods sold to consumers through “Avon ladies” who are not VAT registered. It was argued by Avon that the UK is obliged to implement the derogation so as to allow an input tax deduction for small samples and other demonstration items and that the Council’s initial authorisation was unlawful.  Advocate General Bobek will release his opinion on 7 September 2017.

Melanie Hall QC represented the UK.

The Supreme Court refuses permission to appeal in a sector-wide challenge to the Landfill tax

On 26 May 2017 The Supreme Court refused Patersons of Greenoakhill permission to appeal in a test case pursued on behalf of the entire United Kingdom landfill sector, thus bringing to an end a 5 year battle against HMRC in which Patersons were defeated in the First-tier Tax Tribunal, the Upper Tribunal and the Court of Appeal. The sector argued that no landfill tax was payable on landfilled biodegradable waste because the methane emitted during the process of biodegradation was used to generate electricity and sold to the National Grid. Lords Neuberger, Carnwath and Hodge held that the proposed appeal against the Court of Appeal’s unanimous judgment did not raise an arguable point of law of general public importance and dismissed the application.

Melanie Hall QC represented HMRC.

 

High Court rules on Heathrow / Crossrail access dispute

Heathrow Airport Ltd v Office of Rail & Road [2017] EWHC 1290 (Admin)

The High Court (Ouseley J.) has dismissed a judicial review challenge by Heathrow Airport to the decision of the Office of Rail & Road concerning Heathrow’s ability to impose track access charges on Crossrail reflecting the costs of building the Heathrow rail spur.

Crossrail services are due to commence operations into Heathrow in 2018 and will use the Heathrow rail spur, which was funded and built privately by the airport in the 1990s for the Heathrow Express. In May 2016 the ORR determined that, when charging Crossrail access fees to use airport rail infrastructure, Heathrow could not take into account its historical long-term costs of constructing the railway. This meant that ongoing costs to Heathrow of around £40m-£60m a year could not be recovered from Crossrail users and would instead fall on airline passengers. This was a matter of concern to the Civil Aviation Authority, who made representations to the ORR and intervened in the judicial review claim.

In his judgment, handed down today, Mr Justice Ouseley has dismissed Heathrow’s challenge to the ORR’s decision. While accepting that there was force in Heathrow’s criticisms of the decision and the quality of the ORR’s reasoning, the Judge found that it was rationally open to the ORR, on the evidence before it, to conclude: (i) that the railway spur would still have been built even if fare revenues were inadequate to recover any of the long-term costs, given the railway’s importance to the development of the airport; and (ii) that the CAA would not have precluded such costs being recovered from airline passengers.

In relation to whether the Heathrow rail spur is properly exempt from the relevant EU framework as a “network intended only for the operation of urban or suburban passenger services”, the Judge found that the answer was not clear at all and that “rail services to its main airport seem an obvious part of rail services for a conurbation”. However, he ultimately declined to decide the point on the basis that a decision in Heathrow’s favour was likely to cause substantial prejudice to the Crossrail sponsors, and since the point was academic between the parties given their contractual relations.

A copy of the judgment is available here.

Heathrow Airport Limited was represented by Gerry Facenna QC and Ligia Osepciu. The Civil Aviation Authority was represented by its standing counsel, Anneli Howard.