Ryanair has suffered two legal defeats in its long running dispute with the Competition and Markets Authority over its minority stake in Aer Lingus.

Nearly two years ago the CMA published a report finding that Ryanair’s near 30% stake in its rival lead to a substantial lessening of competition, and that Ryanair should be ordered to reduce its holding to 5%. That decision was challenged, unsuccessfully, in the Competition Appeal Tribunal and Court of Appeal.Yesterday the Supreme Court refused Ryanair permission for a further appeal.

Meanwhile Ryanair had argued that IAG’s bid for Aer Lingus was a “material change of circumstances” requiring that the remedy be altered or abandoned. The CMA took a separate decision on this, finding no such change, which was the subject of a further challenge before the CAT earlier this month. Today the CAT rejected Ryanair’s challenge, finding that the CMA’s decision was not irrational, nor was it necessary for the CMA to carry out a new proportionality assessment in the absence of any material change in circumstances. The judgment is available here Ryanair Holdings plc v Competition and Markets Authority July 2015.

Also today came the news that the European Commission had cleared IAG’s bid, which Ryanair has said it will accept. Followers of this long running saga can look forward to an interesting summer.

The CMA was represented by Daniel Beard QC, Rob Williams and Alison Berridge.

 

Chambers is delighted to announce that the Competition and Markets Authority (CMA) has appointed Rob Williams as Standing Counsel. The appointment follows an open competition (the first since the CMA became the primary competition and consumer authority in the UK) and has been made with the approval of the Attorney General.

Rob has been appointed to a panel of three barristers who will work closely with the CMA to provide advice and representation across its case work. The appointment term is three years with an option to extend for a further three.

Rob follows in a long line of distinguished competition lawyers at Monckton Chambers who have performed the role of standing counsel to the UK’s Competition authority including Jon Turner QC, Daniel Beard QC, and before their appointment to the bench, Mrs Justice Rose and Lord Justice Richards.

Please click here to see the CMA press release.

In a unanimous decision today (8 July 2015), the Supreme Court has held that the rule suspending payment of Disability Living Allowance after 84 days in an NHS hospital breached a disabled child’s human rights. The Appellant was represented by Ian Wise QC and Stephen Broach, instructed by Mitchell Woolf of Scott-Moncrieff and Associates.

The child, Cameron Mathieson, was aged 3 at the time his benefit payments were suspended in accordance with the relevant regulations on the basis that he had been an NHS hospital in-patient for more than 84 days. After his appeal was lodged Cameron sadly passed away and the appeal was pursued by his father Mr Mathieson, not only on behalf of his own family but also on behalf of hundreds of other families in a similar situation.

The Secretary of State’s case throughout the proceedings was that all disabled children’s disability-related needs are met by the NHS while they are in hospital. However the Supreme Court disagreed, citing evidence from the charities Contact a Family and the Children’s Trust which showed that the vast majority of families provided the same or more care to their disabled child once they entered hospital than they had done at home.

Lord Wilson, giving the majority judgment, concluded that the decision to suspend payment of Cameron’s DLA violated his human rights under Article 14 ECHR when taken with A1P1 (the right to peaceful enjoyment of ‘possessions’, which can include state benefits). The difference in treatment between disabled children in hospital and disabled children cared for at home could not be justified by the state. There was therefore a breach of the obligation to act in accordance with Convention rights imposed by section 6 of the Human Rights Act 1998.

The judgment will have direct significance for around 500 families with severely disabled children a year who currently lose their entitlement to receive DLA when their child has been in hospital for more than 84 days. It also has wider implications, for instance the broad approach taken by the Supreme Court to the question of whether Cameron had a relevant ‘status’ for the purpose of Article 14 ECHR and the weight given to the relevant international conventions, here the UN Convention on the Rights of the Child and the UN Convention on the Rights of Persons with Disabilities.

The Judgment can be found here.

 

In a judgment released this morning, the Supreme Court dismissed Rank’s appeal against an earlier ruling by the Court of Appeal.  Estimates given to the Court were that the amount of tax at stake (as a result of Rank’s claim and parallel claims) was between £1 billion and £2 billion.

The issue on the appeal was whether certain gaming machines (“disputed machines”) were, in the period before 2005, subject to VAT.  Rank argued that they were not.

Earlier judgments in the case, including a judgment of the Court of Justice of the EU held that if the disputed machines were not taxable, then Rank had a good claim that there was a breach of the principle of fiscal neutrality, since similar machines operated by it (“Part III machines”)  were subject to VAT under the UK VAT rules as they then stood.  On that basis, it would be entitled under EU law to a refund of all the VAT paid on its Part III gaming machines during the period when the disputed machines were in operation (according to Rank, since the 1970s).

So Rank’s claim for a refund turned on whether it was right to say that the disputed machines were not taxable.  In the VAT Tribunal and High Court, Rank succeeded: those courts agreed that, because the relevant test for taxability was whether the “element of chance in the game is provided by means of the machine”, and because the systems at issue involved a terminal connected by a wire to a remote electronic random number generator (“RNG”), the numbers generated by which determined the result of the game and which those courts considered not to be part of the same machine as the terminal, the test was not satisfied and the disputed machines were not taxable.

However, in November 2013 the Court of Appeal upheld HMRC’s appeal on that point.  The Court of Appeal held that the disputed machines were taxable.  That was because the definition of “machine” should be interpreted so that the RNG, and terminals connected to the RNG, all counted as one machine.

The Supreme Court has now dismissed Rank’s appeal against that judgment, though it adopted a slightly different approach to that of the Court of Appeal: it held that, as a matter of ordinary principles of statutory construction, for the purposes of the provision at issue the element of chance was provided by the exact time when the player pushed the relevant button on the terminal, since the exact time would determine which number was “read off” the RNG.  The element of chance was therefore provided by the terminal itself, so that the statutory test was satisfied.  It therefore did not need to consider HMRC’s alternative submission that, in order to avoid a breach of the principle of fiscal neutrality, the relevant provision had as a matter of EU law to be interpreted so as to bring the disputed machines into tax.

Rank’s and other operators’ claims based on an alleged difference of treatment between Part III machines and disputed machines have therefore failed.  However, a number of other claims by Rank and other operators in the gaming industry for repayment of VAT as a result of alleged breaches of the principle of fiscal neutrality remain to be litigated.

Paul Lasok QC and Valentina Sloane acted for Rank; George Peretz QC and Laura Elizabeth John acted for HMRC.

Stephen Cragg QC and Conor McCarthy acted for claimants in resisting an appeal by south Wales Police with the aim of extending immunity from suit.

South Wales Police argued that officers were entitled to immunity from suit for any actions carried out linked to judicial proceedings. The claimants, who sought to claim for misfeasance in public office due to alleged misconduct by the police exercising disclosure powers in criminal proceedings, successfully argued that the immunity applies only to witnesses in court proceedings. The full judgment can be read here The Chief Constable of South Wales Police v Daniels & Ors .

 

Chambers is delighted to announce new appointments to the Attorney General’s Panel of Crown Counsel.

Gerry Facenna and Valentina Sloane have both been elevated to the A panel, whilst Andrew Macnab and Raymond Hill have been re-appointed to the A Panel for a further 5 years.

This appointment consolidates the recent appointments of Tarlochan Lall, Eric Metcalfe and Julianne Morrison to the C Panel.

The appointments are a great honour and acknowledge our expertise in public, civil and European Community law litigation.

Edenred (Group UK) Limited v Her Majesty’s Treasury and others [2015] UKSC 45

The Supreme Court has today handed down judgment in the public procurement case of Edenred (Group UK) Limited v Her Majesty’s Treasury and others upholding the decision of Andrews J and the Court of Appeal’s decision, which had each also held in favour of the Government (read the first instance decision here and the court of Appeal decision).

This was an appeal in the expedited Edenred proceedings on whether the way in which the Government’s flagship policy of Tax-Free Childcare (TFC) is to be delivered is lawful under domestic and EU public procurement legislation. It is the first case on the question of what constitutes a “material variation” of a public contract to reach the UK Supreme Court. It is also the first UK case to be decided under the new Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015).

The operational and back office functions of NS&I, an executive agency of the Chancellor, are carried out under an outsourcing contract, currently held by Atos. That contract was procured in April 2014 and was not itself under challenge. TFC is to be delivered NS&I working with HMRC pursuant to s.16 of the Childcare Payments Act 2014 (CPA). To be able to do this NS&I has to use its outsourcing contract, modified to add the TFC services. A challenge to the Government-internal memorandum of understanding (MoU) between HMRC and NS&I (whereby it was argued that that MoU was itself a public contract) had failed below and was not pursued on appeal to the Supreme Court. The Appellants’ appeal focussed principally on their argument that the amendments required to the Atos outsourcing contract would be an impermissible material variation, being contrary to the CJEU’s pressetext case law and Regulation 72 PCR 2015.

Lord Hodge, with whom Lord Neuberger, Lord Mance, Lord Sumption and Lord Carnwath concurred, held that the amendments required to the outsourcing contract with Atos to include the TFC work will not amount to a material variation of that public contract as the modifications to the contract that enable NS&I to provide the TFC services will not “considerably extend” the scope of that contract in terms of regulation 72(8) PCR 2015 Regulations so that they do not involve “substantial” modifications under Regulation 72(1)(e) PCR 2015.

The Court distinguished Commission v Germany (C-160/08) [2010] ECR I-3713, Commission v France (C-340/02) [2004] ECR I-9845 and Commission v Spain (C-423/07) [2010] ECR I-3429 and held that the prohibition against modifying a contract to encompass services not initially covered does not prevent the extension of the contracted services beyond the level of services provided at the time of the initial contract if the advertised initial contract and related procurement documents envisaged such expansion of services, committed the economic operator to undertake them and required it to have the resources to do so.

The Supreme Court therefore held there was no breach of the Public Contracts Regulations or Article 56 TFEU.

The Court also inclined to the view that the amendments were further justified pursuant to “clear, precise and unequivocal” review clauses within the meaning of Regulation 72(1)(a) PCR 2015, but that the point was not acte clair. However, in view of the finding on Regulations 72(1)(e) and (8) (above) it was not necessary to decide the point and no reference to the CJEU was required.

An alternative argument that a separate public contract had been created between HMRC and NS&I by reason of s. 16 CPA was also dismissed by the Court.

 

Philip Moser QC, Ewan West and Anneliese Blackwood appeared on behalf of Her Majesty’s Treasury, Her Majesty’s Revenue and Customs and NS&I, instructed by the Government Legal Department.

Please click to read the full Edenred v HMTreasury Supreme Court judgment.

Conor McCarthy has been invited to serve as an independent expert on the issue of sanctions against parliamentarians in a hearing of the COE Parliamentary Assembly’s Committee on Rules of Procedure, Immunities and Institutional Affairs.

The hearing follows legal controversy regarding the imposition of sanctions on certain foreign MPs by both Russia and the European Union. These sanctions have included both travel bans and the freezing of assets.

Conor McCarthy has previously advised individuals and organizations as to the scope and effect of sanctions at under domestic, EU and international law.

On 24 June, Monckton Chambers held a highly topical, ground breaking seminar, chaired by Sir Stephen Laws, on the legal implications of UK exit from the European Union.

The seminar was attended by over 100 lawyers, drawn from City and other law firms, the UK and other Governments and many others.

At the European Council on 25 June, the Prime Minister began the process of seeking renegotiation of the terms of UK membership of the EU.

At the 24 June seminar, expert Monckton practitioners, in anticipation of the first step now taken by the Government ahead of an in-out referendum, had covered many subjects of considerable relevance.

So what lies ahead? The issues covered at the seminar included:

(A) the legal framework within which three of the Government’s key aims will be negotiated (dissociation from “ever closer union”, powers for national parliaments to “block” EU legislation and benefits tourism) and their prospects of success (Christopher Muttukumaru CB):

(B) key concerns in respect of migration and citizenship (Paul Lasok QC);

(C) the implications of enactment of a British Bill of Rights and of possible withdrawal from the ECHR (Ian Rogers QC);

(D) if the UK leaves the EU, what happens next in relation to Procurement Law, Competition Law and regulatory matters including EU cooperation in those fields (Philip Moser QC, George Peretz QC and Anneli Howard);

(E) if the UK leaves the EU, what happens next in relation to free movement of goods, including the merits and de-merits of possible successor arrangements to EU membership (Peter Oliver);

(F) the implications of treaty change and of referendums in other Member States for the overall UK timetable and the instability that will be caused in the interim (Peter Oliver & Christopher Muttukumaru CB).

A further, in-depth seminar will be run in the autumn, while we have our own ideas for the content of the autumn seminar, please do let us have your own suggestions too.

The Secretary of State for Health has instructed Ian Rogers QC and Julianne Kerr Morrison to defend four judicial review claims issued by the major tobacco manufacturers (British American Tobacco, Philip Morris, Imperial Tobacco and Japan Tobacco / Gallaher) challenging the standardised tobacco packaging laws (often described in media reports as “plain packaging”).

MPs voted in favour of the introduction of the measures by 367 to 113. The Standardised Packaging of Tobacco Products Regulations were made on 19 March 2015 and come into force on 20 May 2016.

Ian Rogers QC previously appeared for the Government in the successful defence of two earlier tobacco control measures:-

Sinclair Collis v Secretary of State for Health [2012] QB 394, CA (Lord Neuberger MR, Arden and Laws LJJ): on the proportionality test in the public health sphere, concerning the legislation banning the sale of tobacco from tobacco vending machines.

Imperial Tobacco, BAT, Philip Morris and Gallaher v Secretary of State for Health: a judicial review of the UK “Tobacco Display Ban” legislation which the claimants discontinued in 2012.

He also appeared for the United Kingdom in the EFTA Court in a case concerning the Norwegian tobacco display ban Philip Morris Norway v Norway, Case E-16/10.