The High Court today handed down judgment in a case brought by two German companies, Ordanduu and Optimus Mobile, against PhonepayPlus, the UK regulator for premium rate telephone services. Mr Justice Supperstone allowed the claim for judicial review and found that PhonepayPlus’ actions amounted to a sufficiently serious breach of EU law to justify an award of Francovich damages, transferring the claim to the Queen’s Bench Division for issues of causation and quantification to be determined.

The claim arose out of a series of “Emergency Procedure” investigations instigated by PhonepayPlus in July 2013 under paragraph 4.5 of its Code of Practice. The investigations followed identification by PhonepayPlus of a website using a form of malware to lock consumers’ internet browsers in an attempt to generate affiliate advertising revenue. The investigations resulted in financial and other sanctions being imposed on a number of companies, including the Claimants and several others located in other EU Member States. The Claimants challenged PhonepayPlus’ actions as being contrary to EU law and procedurally unfair.

The Judgment contains a number of findings of significance to PhonepayPlus’ procedures and its jurisdiction to regulate providers in other EU Member States.

On procedural fairness the Court found that there was no good reason for PhonepayPlus failing to offer the Claimants an opportunity to make representations before it implemented the Emergency Procedure and suspended the Claimants’ services. The Judge held that the PhonepayPlus Executive was subject to an obligation to give full and frank disclosure when seeking authorisation for the Emergency Procedure from its Code Compliance Panel, which it did not satisfy in this case. He also found that throughout the subsequent review process the PhonepayPlus Tribunal had wrongly placed the burden of proof on the Claimants to establish that there was no risk of harm to consumers, had applied the wrong standard of proof under EU law, and had failed to discharge the burden of showing that there was a risk of potential harm to consumers from the Claimants’ services.

On proportionality, the Judge concluded that the measures taken were disproportionate, in particular because a less restrictive method could have been adopted and the measures did not attain a fair balance of means and ends, including because the Claimants were not given an opportunity to make representations and because it was inappropriate to suspend the whole of the Claimants’ UK business and freeze their revenues in circumstances where there was no evidence of actual harm to any consumer and the malware did not affect the Claimants’ existing customers.

Of potentially wider significance is the Judge’s conclusion that it was not appropriate to accord a wide margin of discretion to the regulator’s judgment given: (i) the strict terms of the E-Commerce Directive; (ii) the fact that the Code Compliance Panel did not direct their mind to the correct legal test or proper basis on which their judgment should be exercised; and (iii) because the Panel were not experts with expertise in relation to premium rate services or affiliate marketing and its perils.

On EU law the Court found that PhonepayPlus’ actions were unlawful under Article 3 of the E-Commerce Directive, in particular because the measures were disproportionate. This was, in the Judge’s view, a sufficiently serious breach of EU law to satisfy the Francovich test for the award of damages. This was the case, in particular, because: (i) the PhonepayPlus Executive was aware of the Directive but did not inform the Panel or the Tribunal of its existence and relevance, as a result of which the Claimants were treated as if they were UK businesses; (ii) disproportionate restrictions were imposed, and (iii) PhonepayPlus’ communication with the European Commission contained material inaccuracies and omissions.

The Judge therefore allowed the claim, quashing the decisions, ordering repayment of penalties and charges with interest, awarding the Claimants’ their costs of the proceedings, and transferring the claim to the Queen’s Bench Division for issues of causation and quantification of damages to be determined. The Judge refused PhonepayPlus permission to appeal to the Court of Appeal.

A copy of the judgment is here. A more detailed case note will be prepared and uploaded here in due course.

Gerry Facenna acted for the Claimants, Ordanduu GmbH and Optimus Mobile GmbH. Tim Ward QC acted for the Defendant, PhonepayPlus.

Monckton Chambers is very pleased to announce the appointment of George Peretz and Meredith Pickford to Queen’s Counsel.

The official swearing-in ceremony will take place on 16 February 2015.

The members and staff of Chambers warmly congratulate George and Meredith on their new appointments.

Abdulrahim v Council and Commission (Case T‑127/09 RENV)

Judgment of the General Court of the Court of Justice of the European Union, 14 January 2015

 

The General Court has given its judgment in the substantive trial of Mr Abdulrahim’s application for annulment of his listing by Commission Regulation (EC) No 1330/2008 as a person associated with Al-Qaida under the Council Regulation (EC) No 881/2002. The Court has found no evidence of such association and has annulled Reg. 1330/2008 in relevant part.

Substance: This trial followed Mr Abdulrahim’s delisting by the UN Sanctions Committee (“UNSC”) and by the EU (by Regulation No 36/2011) in 2011 as well as Mr Abdulrahim establishing his right to a substantive CJEU ruling to clear his name in the landmark appeal to the Grand Chamber in Case C‑239/12 P Abdulrahim v Council and Commission in 2013 (for a link to that judgment, click here).

The General Court, applying Kadi II, has now found that that none of the allegations made against Mr Abdulrahim in the summary of reasons provided by the UNSC was such as to justify the adoption, at EU level, of restrictive measures against him.

The Court had regard to the detailed rebuttals advanced by Mr Abdulrahim in his witness statement and findings of fact made by English courts in judgments relied on by Mr Abdulrahim. The evidence advanced by the Council and Commission was found either insufficient to support the reasons relied on or lacking. This evidence included a UK Foreign Office witness statement said to be based on the fact that “officials believed that … there was a convincing case that” Mr Abdulrahim was part of a particular group and, consequently, “associated with Al-Qaida”. No information or evidence had however been adduced to support that belief.

Procedure: This judgment also concerns admissibility of applications to the CJEU and “exceptional circumstances, unforeseeable circumstances or force majeure” under Article 45 of the Statute of the Court, where the original, signed application was lost in the post. An appropriate mail delivery service had been used and the only ‘expedient’ to remedy the failure of that service was to send a version of the application bearing a second original signature, to replace the former original which was lost. This was done and the application was admissible.

 

Philip Moser QC represented Mr Abdulrahim.

The Court of Appeal today granted permission on an additional ground in the ongoing judicial review claim by the Afghan local staff who worked for the UK Government in Afghanistan.

The Claimants gave loyal, important and dangerous service as interpreters to the UK armed forces. As a result of their work for the UK, they and their families have suffered serious injuries in Taliban attacks and been subjected to threats to their life and intimidation. They argue that the protection and benefits offered to them by the UK Government remain far more limited than what was offered to Iraqi interpreters working for the UK under similarly difficult circumstances in Iraq.  

The High Court previously granted permission for the claim that the UK Government’s decision not to afford the Claimants the same benefits and protections as their Iraqi counterparts amounted to unlawful discrimination. Today the Court of Appeal extended permission for a further challenge that the Government failed to comply with its public sector equality duties when reaching the decision.

Nikolaus Grubeck appeared for the Afghan interpreters.

The case has been featured in various press, including: 

• Guardian: http://www.theguardian.com/world/2015/jan/13/afghan-interpreters-challenge-uk-resettlement-restrictions-equality-law
• Times: http://www.thetimes.co.uk/tto/news/uk/defence/article4306004.ece
• Daily Mail: http://www.dailymail.co.uk/news/article-2831077/Just-ONE-Afghan-interpreter-helped-British-forces-allowed-UK-despite-hundreds-requests-staff-threatened-Taliban.html
• Vice News: https://news.vice.com/article/the-afghan-interpreters-facing-taliban-death-threats-are-taking-britain-to-court

 

In its awaited ruling on the Eurotunnel case, the Competition Appeal Tribunal has delivered its second judgment dealing with the concept of an “enterprise”, in the context of the acquisition by Groupe Eurotunnel of certain vessels and other assets previously owned by SeaFrance.

In summary, the Tribunal upheld the Competition and Market Authority’s finding that it had jurisdiction to consider the transaction, considering that the CMA had established that notwithstanding the cessation of trading by SeaFrance during liquidation the assets acquired nevertheless constituted an “enterprise”.

Alistair Lindsay appeared for Groupe Eurotunnel S.A.

Daniel Beard QC and Rob Williams appeared for the Société Coopérative de Production Sea France S.A.

Paul Harris QC, Ben Rayment and Thomas Sebastian appeared for the CMA.

Meredith Pickford and Ligia Osepciu appeared for DFDS A/S.

This judgment has featured in various press including:

• BBC: http://www.bbc.co.uk/news/business-30750139
• Guardian: http://www.theguardian.com/uk-news/2015/jan/09/eurotunnel-myferrylink-sale-appeal-fails-buyer
• Times: http://www.thetimes.co.uk/tto/business/industries/transport/article4318651.ece
• Global Competition Review: http://globalcompetitionreview.com/news/article/37733/cat-sinks-eurotunnel-ferry-appeal/

We are pleased to announce that public law and human rights specialist Stephen Cragg QC has joined Monckton as a tenant.

Stephen is acknowledged as a leading silk in public law, where his areas of specialism include police law, community care and health law, the retention and disclosure of information by public bodies, the criminal justice system, and coroners’ inquests. Chambers UK describes him as “steeped in years and years of public law” and “formidable when handling judicial reviews”.

His recent cases have seen him acting as lead counsel in four cases in the Supreme Court, and he has appeared in over 80 full judicial review cases and appeals in the Court of Appeal and High Court.

Stephen is also a Special Advocate and has been appointed in a number of control order and SIAC cases, as well as in parole board, family division and security vetting cases.

Monckton has a long established history of excellence in public law, particularly in the commercial and regulatory context and in challenges involving EU law or human rights. In recent years Monckton has overseen a strategic expansion into other areas of Administrative & Public law, and is now seen as a leading set in areas such as Freedom of Information, Data Protection and Privacy, Environmental law and Financial Services, as well as mainstream judicial review on both the claimant and defendant sides. Stephen’s arrival further expands Monckton’s public law team and reinforces our reputation as one of the leading sets in the fields of public law and human rights law.

Joined Cases C‑131/13, C‑163/13 and C‑164/13, Schoenimport and others, Court of Justice of the European Union (First Chamber), judgment 18 December 2014

These references to the CJEU concerned Articles 17(2) and (3) and 28b(A)(2) of the Sixth VAT Directive and whether Member States could refuse an exemption from or deduction or refund of VAT on the ground that a trader had participated in evasion of VAT, in circumstances where the goods were transported within the Community and the tax evasion was carried out in the Member State of arrival but that evasion was taken into account in the Member State of dispatch. Further, it was queried whether this could be done in the absence of specific provisions in national law.

The CJEU restated and reaffirmed its Kittel case law on the right to deduct in Missing Trader Intra-Community (MTIC) fraud cases in the context of exemption of intra-Community supplies and that it is for the national authorities and courts to refuse such a right if it is shown, in the light of objective evidence, that it is being relied on for fraudulent or abusive ends. Further, that this is so regardless of whether tax evasion has been carried out by the taxable person itself or whether that person merely knew, or should have known, that, by the transaction concerned, it was participating in a transaction involving evasion of VAT carried out by any other trader acting upstream or downstream in the supply chain, and whether occurring in the same Member State or not.

Furthermore, this must be the case even if national law contains no rules which may be interpreted in accordance with the requirements of EU law to refuse such rights; express authorisation is not required for the national authorities and courts to be able to refuse a benefit under the common system of VAT as that consequence must be regarded as being inherent in the system.

Both the CJEU and the Advocate General stressed that these principles apply generally in the VAT system, irrespective of the particular VAT right affected by the fraud. Further, that such a refusal is not in the nature of a penalty or a sanction within the meaning of Article 7 ECHR or Article 49 of the Charter of Fundamental Rights.

Philip Moser QC and George Peretz acted for the United Kingdom.

 

The European Commission for Democracy through Law (Venice Commission) and the OSCE Office for Democratic Institutions and Human Rights (OSCE/ODIHR) adopted Joint Guidelines on Freedom of Association at the former’s  session on 12-13 December 2014. The Guidelines are primarily, but not exclusively, intended for use by legislators tasked with drafting laws that regulate or affect associations. They are also intended to serve public authorities, the judiciary, legal practitioners and others concerned with the exercise of the right to freedom of association, including associations and their members. The Guidelines are based on existing international standards and practice but have also been informed by a review of international and domestic practice conducted during the drafting process.  Jeremy McBride acted as an expert for OSCE/ODIHR in the drafting of the Guidelines.

Please click to view the Venice Commission Guidelines on Freedom of Association

 

On 16 December 2014 the Grand Chamber Panel of the European Court of Human Rights refused the Russian Government’s request for a reference of the Yukos award of just satisfaction to the Grand Chamber. As a result the Eur Ct HR’s Yukos v Russia judgment of 31 July 2014 became final.

That judgment awards €1.87 Bn in compensation for the violation of Yukos Oil Company’s property rights. Yukos was dissolved as a result of the Russian authorities’ enforcement measures, which the Eur Ct HR held violated Article 1 Protocol No 1. As a result the judgment orders that the compensation should be payable to the former shareholders in Yukos at the time of its dissolution in 2007. The judgment also requires the Russian Government within six months to agree a scheme of distribution with the Committee of Ministers of the Council of Europe for the prompt payment of the compensation. There are more than 56,000 former shareholders in Yukos, from Russia and a variety of European and other countries.

The judgment specifies that compensation is payable in rubles, converted at the exchange rate prevailing at the date of payment. The ruble value of the award, which is by far the largest ever made by the Eur Ct HR, has increased by approximately 79% since the judgment was given on 31 July 2014.

Piers Gardner of Monckton Chambers represented Yukos Oil Company throughout the proceedings before the European Court of Human Rights.

The judgment has received the following press coverage:

• http://www.themoscowtimes.com/business/article/european-top-human-rights-court-rejects-russia-s-appeal-over-yukos/513469.html
• http://sputniknews.com/business/20141217/1015923249.html
• http://rapsinews.com/judicial_news/20141216/272791589.html

 

 

 

In a judgment released this morning (R (European Federation for Cosmetic Ingredients v Secretary of State for Business, Innovation and Skills and the Attorney General [2014] EWHC 4222 (Admin)), Mr Justice Lewis has asked the European Court of Justice to rule on the interpretation of the EU ban on animal testing of cosmetics products and ingredients used in cosmetics. That ban is contained in Article 18 of Regulation 1223/2009/EU on cosmetics products. The ban prohibits the marketing in the EEA of cosmetics products tested on animals or containing ingredients tested on animals, where such testing was done in order to meet the requirements of the Regulation.

The questions referred concern the extent to which the ban applies to cosmetics products or ingredients tested on animals for the purposes of regulatory requirements imposed by non-EEA countries.

The European Court of Justice is likely to take around 18 months to give its ruling on this issue.

George Peretz represented BIS and the Attorney General; Alan Bates represented the British Union for the Abolition of Vivisection and the European Coalition to end Animal Experiments, which intervened in the proceedings.