Open justice in the Supreme Court: principle or pragmatism?

The Supreme Court gave judgment last week in the Bank Mellat cases: Bank Mellat v HM Treasury (No 1) [2013] UKSC 38 and Bank Mellat v HM Treasury (No 2) [2013] UKSC 39. In this post, I explain why, in the former case, the court took a wrong-turning by improperly allowing a fundamental constitutional principle to be displaced by pragmatic arguments. (For an excellent overview of Bank Mellat (No 2), see this post on Paul Daly’s blog.)

The substance of the Bank Mellat litigation concerns the lawfulness of an order prohibiting “all persons operating in the financial sector” from conducting business with the claimant bank. The order was issued under provisions in the Counter-Terrorism Act 2008 concerning (among other things) terrorist financing. In Bank Mellat (No 2), the Supreme Court upheld the bank’s challenge to the legality of the order. But in doing so, it took account of a “closed judgment” which the first-instance court had issued after having adopted a “closed material procedure” (CMP). Such a procedure represents a major departure from the constitutional principle of open justice. This is clear from the following description (given by Lord Neuberger in Bank Mellat (No 1)) of a CMP:

[A CMP] involves the production of material which is so confidential and sensitive that it requires the court not only to sit in private, but to sit in a closed hearing (ie a hearing at which the court considers the material and hears submissions about it without one of the parties to the appeal seeing the material or being present), and to contemplate giving a partly closed judgment (ie a judgment part of which will not be seen by one of the parties).

That the first-instance court had been entitled to use a CMP, and that the Court of Appeal was permitted to consider the closed part of the first-instance court’s judgment, was clear from the terms of the Counter-Terrorism Act 2008. However, the Act did not make any reference to the Supreme Court being able to use a CMP (or take account of closed judgments of courts permitted to use a CMP) in these so-called financial restrictions proceedings. The question therefore arose whether it was open to the court to adopt a CMP even though the 2008 Act did not explicitly permit this. By a majority of 6 to 3, the Supreme Court held that it could adopt a CMP; and by a majority of 5 to 4, it held that a CMP should be used in the instant case.

That conclusion is surprising, given the Supreme Court’s relatively recent decision in Al Rawi v Security Service [2012] 1 AC 531. The view taken by the court in that case was summarised in the following terms by Lord Hope (dissenting) in Bank Mellat (No 1):

The right to know and effectively challenge the opposing party’s case is a fundamental feature of the judicial process. The right to a fair trial includes the right to be confronted by one’s accusers and the right to know the reasons for the outcome. It is fundamental to our system of justice that, subject to certain established and limited exceptions, trials should be conducted and judgments given in public. There may come a point where a line must be drawn when procedural choices of one kind or another have to be made. A distinction may be drawn between choices which do not raise issues of principle and choices that affect the very substance of a fair trial. There is no room for compromise where the choices are of the latter kind. The court cannot abrogate the fundamental common law right by the exercise of any inherent power. Any weakening of the law’s defences would be bound to lead to state of uncertainty and, sooner or later, to attempts to widen the breach still further. The court has for centuries been the guardian of these fundamental principles. The rule of law depends on its continuing to fulfil that role.

The majority: pragmatism

Why, then, did the majority in Bank Mellat (No 1) conclude that a CMP could be used, notwithstanding the absence of express statutory authority? The answer, it seems, is that is the justices in the majority were persuaded by a range of pragmatic arguments. In particular, Lord Neuberger (giving the sole majority judgment) identified several (alternative) possible consequences that would follow from not permitting the Supreme Court to adopt a CMP in financial restriction proceedings:

1. The Supreme Court would not be able to hear the appeal at all.  But, said the majority, this could not be right, since section 40 of the Constitutional Reform Act 2005 authorises the Supreme Court to hear “any” appeal from the Court of Appeal.
2. The Supreme Court could consider the whole of the lower court’s judgment, with the closed part considered in open court.  But this would be absurd; it would “wholly undermine” the CMP scheme.
3. The Supreme Court could refuse to consider the closed material.  But this “would be self-evidently unsatisfactory and would seriously risk injustice, and in some cases it would be absurd”.
4. The Supreme Court would have to treat itself as bound to allow the appeal or to dismiss the appeal without considering the merits of the competing arguments.  But each of those courses is “self-evidently equally unsatisfactory”.

The unpalatable and impractical nature of the consequences of ruling that the Supreme Court could not use a CMP drove the majority to the conclusion that it could do so. In seeking to justify that conclusion, the majority said:

At a relatively high level, in terms of constitutional principle and governmental functions, it seems to me that the following propositions apply. (i) The executive has a duty to maintain national security, which includes both stopping the financing of terrorism and nuclear proliferation and ensuring that some of the information relating to the financing of terrorism remains confidential; (ii) the rule of law requires that any steps aimed at preventing financing of terrorism which damage a person should be reviewable by the courts, and, as far as possible in open court and in accordance with natural justice; (iii) given that such reviews will often involve the executive relying on confidential material, it is for the legislature to decide and to prescribe in general how the tension between the need for natural justice and the need to maintain confidentiality is to be resolved in the national interest; (iv) in the absence of a written constitution, it is the European Convention, through Article 6, as signed up to by the executive and interpreted by the courts, which operates as a principled control mechanism on what the legislature can prescribe in this connection; (v) it is for the courts to decide, within the parameters laid down by the legislature, how the tension between the two needs of natural justice and confidentiality is to be resolved in any particular case.

Against this background, the majority concluded that section 40 of the Constitutional Reform Act 2005—which was “plainly intended to render every decision of the Court of Appeal to be capable of being appealed to the Supreme Court”—was sufficient to authorise the adoption of a CMP. But by placing emphasis on Article 6—and, implicitly, on the Strasbourg Court’s decision in Chahal v UK holding that CMP can be compatible with Article 6—the Supreme Court failed sufficiently to acknowledge that the common law may have something to say about all of this, and that it might impose requirements more demanding than those deriving from the Convention.

The minority: principle

The minority was more obviously alive to this possibility. Lord Hope, for instance, noted that CMP “erodes fundamental common law principles”. He went on to invoke the principle of legality (articulated in cases such as R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115), concluding that the Supreme Court could not adopt a CMP in the absence of clear and unambiguous statutory provision to that effect—a standard not met by section 40 of the Constitutional Reform Act 2005.

The arguments of principle justifying this strict invocation of the principle of legality can be found summarised in the passage, set out above, from Lord Hope’s judgment. But might not the minority be accused of dogmatism: of invoking principle in the face of countervailing—and overwhelming—pragmatic arguments? Not according to Lord Kerr, who defended the minority’s approach in the following terms:

For the sake of examining the claim that this court should recognise a power to examine closed material, let us assume that there is force in the argument that a court is, as a matter of principle and common experience, better placed to reach a more correct result if it receives all the material which one of the parties says is relevant to its decision, even though the other party is denied knowledge of its content. Does that circumstance warrant recognition of the power? In my view it does not. Pragmatic considerations can – and, where appropriate, should – play their part in influencing the correct interpretation to be placed on a particular statutory provision. But pragmatism has its limits in this context and we do well to recognise them.

Lord Kerr is right. Constitutional rights in the UK are, even at their highest, precarious: clearly-worded legislation will always be able to restrict or abolish such rights for as long as the notion of parliamentary sovereignty continues to apply. Common law constitutional rights therefore only exist as legal constructs in the sense, and to the extent, that courts are prepared to confer interpretative protection upon them. It is for precisely that reason that the Simms principle of legality—modest though it is—is of the utmost importance; and the Supreme Court’s willingness to dilute that principle is commensurately disappointing.

It is, of course, perfectly obvious that if the Supreme Court had concluded that it had no power to use a CMP, Parliament would likely have legislated to supply such authority for the future. But to capitulate in the face of such an argument is to allow principle to be sacrificed on the altar of pragmatism. The minority was right to refuse to do so. In a constitution characterised by an absence of absolute rights and hard-legal limits upon legislative authority, judicial vigilance through strict application of the principle of legality should not be mistaken for dogmatism.

If lawmakers wish to sanction a major departure from fundamental constitutional principles—such as the principle of open justice—then they should be required to publicly acknowledge what they are doing and pay any associated political price. And the courts’ constitutional duty is to exact that price by refusing to accept that such principles have been qualified or swept away in the absence of explicit provision to such effect. By doing so, judges can ensure that legal values are accorded at least a measure of protection, the ultimately political nature of our constitution notwithstanding.