In a decision today (17 July 2015) the Divisional Court (Bean LJ and Collins J) has held that the Data Retention and Investigatory Powers Act 2014 (‘DRIPA’) is inconsistent with EU Law. The claimants, Peter Brice and Geoffrey Lewis, were represented by a legal team including Azeem Suterwalla, instructed by Stuart Luke of Bhatia Best Solicitors Ltd. Their claims were heard together with those of David Davis and Tom Watson MPs, represented by Liberty. The Secretary of State for the Home Department was represented by a team including Daniel Beard QC.

The claimants brought their claims as they were concerned with the width of the powers to retain and gain access to their data on a number of grounds, including confidentiality of communications with solicitors and, in respect of Mr Davis and Mr Watson, concerns about the confidentiality of communications to and from constituents.

The claimants challenged the validity of section 1 of DRIPA and the Regulations made under it as being contrary to EU law, as set down in the decision of the CJEU in Digital Rights Ireland v Minister for Communications, Marine and Natural Resources and others – ‘DRI’ ([2015] QB 127). The provisions allow for the wide-scale retention of communications data (data providing information as to who was communicating; when; from where and with whom – but not including the content of a communication). S.1 DRIPA also incorporates provisions relating to access of that data as set out in s. 22 of the Regulation of Investigation Powers Act (‘RIPA’).

DRIPA had been passed in 2014, on an expedited basis, following the decision of the CJEU in DRI. The CJEU had held that Directive 2006/24/EC – on the retention of data generated or processed in connection with the provision of publicly available electronic communications services or of public communications networks – was invalid. Directive 2006/24/EC had sought to harmonise the communication data retention arrangements across the EU. In DRI the CJEU found that the Directive was contrary to Articles 7 and 8 of the Charter of Fundamental Freedoms.

Before the Divisional Court the claimants argued that the provisions of DRIPA and the secondary legislation were directly at odds with the reasoning and decision in DRI. The Secretary of State argued that the decision in DRI was not to be interpreted as setting down mandatory requirements for the retention and access regime for data in member states.

The Divisional Court rejected the Secretary of State’s arguments and also that the reasoning and effect of DRI were unclear such that a preliminary reference should be sought. The Judges held that the ratio of DRI was that legislation establishing a general retention regime for communications data infringed Articles 7 and 8 of the EU Charter unless it was accompanied by an access regime (laid down at national level) which provided adequate safeguards for those rights. As such an access regime, consistent with the reasoning in DRI, had not been put in place by DRIPA, section 1 was contrary to EU law.

The Divisional Court has granted the Secretary of State permission to appeal to the Court of Appeal.

The Judgment is available here David Davis and others -v- Secretary of State for the Home Department.

Katie Drummond, Pupil barrister, Monckton/Government Legal Department

On 16 July 2015 the Grand Chamber of the Court of Justice handed down its judgment in a request for a preliminary ruling from the Irish High Court on the Citizenship Directive (2004/38). The case concerns the circumstances in which a non-EU spouse of an EU citizen retains a right of residence in a host member state when the EU citizen dies, departs or divorces him.

The three appellants, non-EU citizens, had married EU citizens who at the time were exercising their treaty rights by living and working in Ireland. In each case, the marriage had broken down, the EU citizen had left Ireland, and a divorce was subsequently obtained.

The Irish government, supported by the UK government, argued that the appellants’ right of residence ceased when the EU citizen left Ireland, having regard to the provisions in Article 12 of the Directive on death and departure. The appellants argued that they should in fact be considered under Article 13, which concerns retention of residence after divorce, and that under that provision they retained a right to reside.

The CJEU agreed with the interpretation put forward by the Irish and UK governments that the departure of the EU citizens in the present cases had brought an end to the non-EU spouses’ right of residence, and that it could not be revived by subsequent divorce proceedings. The retained right of residence under Article 13 only applies if the divorce proceedings are commenced while both spouses are present in the host member state.

The CJEU’s judgment clarifies the position of a third country spouse in a host member state where his or her marriage to an EU citizen breaks down and the latter leaves the host state prior to divorce. In doing so, it reaffirms the important principle that the EU law rights of third country nationals are not autonomous, but are derived from the exercise of free movement rights by an EU citizen.

The full judgment is available here: Singh and Others v Minister for Justice and Equality.

Gerry Facenna and Ben Lask represented the UK Government.

On 14 July 2015, Coulson J handed down judgment in a challenge to a local authority’s scoring of the qualitative aspects of the first and second placed bids in a tender process for asbestos removal services conducted under the Public Contracts Regulations 2006. The claim involved detailed challenges to the scores that the contracting authority had awarded to each of the first and second placed bids in respect of each of the 12 published quality sub-criteria in the procurement process – a challenge to 24 scores in total. The scores were challenged on the grounds of manifest error of assessment as well as breach of the general principles of transparency and equal treatment.

Coulson J held that it was necessary first to analyse the Claimant’s scoring complaints in order to ascertain whether, regardless of its formulation, the claim was in substance one of (i) breach of transparency/equal treatment or (ii) manifest error. He noted that the contracting authority does not have any discretion in relation to (i), but enjoys a wide margin of appreciation in relation to (ii). His Lordship reaffirmed his indication in the BY Development v Covent Garden Market Authority [2012] EWHC 2546 (TCC) that the “manifest error” test derived from EU law is equivalent to the English law test of Wednesbury unreasonableness.

Coulson J found that – subject to a couple of substantive equal treatment points – the majority of the Claimant’s complaints in this case were, in substance, claims of manifest error. He went on to undertake a detailed review of each of the 24 scoring complaints and concluded that the equal treatment claims as well as a number of the manifest error claims were well founded. He considered that adjustments were required to 8 out of 24 scores, which would have the effect of moving the second placed bid into first place.

The full judgment is available here Woods Building Services Ltd v Miton Keynes Council.

Ligia Osepciu acted for the Defendant, Milton Keynes Council.

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 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.