Muddled thinking in the Supreme Court on the “third source” of governmental authority

In R v Somerset County Council, ex p Fewings [1995] 1 All ER 513, 524, Laws J said that whereas individuals “may do anything … which the law does not prohibit”, the “opposite” rule applies to public bodies: anything that they do “must be justified by positive law”. This suggests that for a “public body” (whatever that means) to do anything, it must be able to point to legal authority if it is to act lawfully.

This view stands in opposition to the perspective offered by Professor Bruce Harris. In a series of scholarly articles (beginning with “The ‘third source’ of authority for government action” (1992) 108 LQR 626) Harris argues that alongside statute and the prerogative—the two most obvious roots of governmental authority—is a “third source” of power. Or, more accurately, Harris argues that there are certain things for which the government does not require power, because it has the same liberty as an ordinary person. (Harris gives as examples the government’s capacity to distribute information and enter into contracts.) Taken at face value, this sounds like a constitutionally dangerous blank cheque that enables the government to do things whether or not it has been legally authorized to do them.

However, the third source is circumscribed in constitutionally significant ways.  In particular, third-source action is unlawful if contravenes an existing law or interferes with extant legal rights. For example, non-consensual entry upon private property could not be lawfully accomplished under the third source: such action would contravene the law of trespass unless statutory authority could be shown. The third-source analysis is, then, no threat to the principle articulated in Entick v Carrington. It must also be the case that, just as the prerogative is placed in abeyance by legislation, so third-source authority must be displaced to the extent that a statutory scheme exists governing the area in question.

Harris’s analysis has always seemed compelling to me. The limitations that are built into it serve to neutralize what would otherwise be valid constitutional objections to acknowledging the third source.  Putting the matter another way, Laws J’s requirement that “positive law” must underpin whatever the government does is a sound injunction only to the extent that the government wishes to do that which would otherwise be unlawful or which would interfere with existing legal rights.

The New College London case

These matters arose for discussion earlier this month in the Supreme Court in R (New College London Ltd) v Secretary of State for the Home Department [2013] UKSC 51 (on which see also this post on the Free Movement Blog). The question was whether it had been lawful for the government to determine whether an educational institution could be a “sponsor” for immigration purposes by reference to the particular criteria it had applied. It was argued before the Supreme Court that the government had acted unlawfully, either because (i) the government had no legal authority to impose the criteria or (ii) the government, although legally capable of imposing the criteria, had failed to follow the legally prescribed procedure for their adoption.

Argument (ii) recalls the Supreme Court’s decisions in R (Munir) v Secretary of State for the Home Department [2012] UKSC 32 and R (Alvi) v Secretary of State for the Home Department [2012] UKSC 33. It is clear from those cases that the procedure in question—i.e. laying before Parliament under s 3(2) of the Immigration Act 1971—is triggered only by rules that relate to the practice to be followed under the Act for regulating entry into and stays in the UK, and, even then, only by rules which, if not satisfied by the migrant, will lead to his or her application for leave to enter or remain being refused. The Supreme Court in New College London held that the conditions concerning whether educational institutions could be “sponsors” for the purpose of immigration control measures did not fall into that category. As such, the fact that they had not been laid before Parliament was no obstacle to their validity.

But that point would have been irrelevant if (irrespective of the procedure followed) there had been no authority to make the rules at all. It was this aspect of the case that engaged questions about the third source of authority for official action. Lord Sumption (with whom Lords Hope, Clarke and Reed agreed) endorsed the third-source concept:

It has long been recognised that the Crown possesses some general administrative powers to carry on the ordinary business of government which are not exercises of the royal prerogative and do not require statutory authority: see B.V. Harris, “The ‘Third Source’ of Authority for Government Action Revisited” (2007) 123 LQR 225. The extent of these powers and their exact juridical basis are controversial. In R v Secretary of State for Health Ex p C [2000] 1 FLR 627 and Shrewsbury and Atcham Borough Council v Secretary of State for Communities and Local Government [2008] 3 All ER 548, the Court of Appeal held that the basis of the power was the Crown’s status as a common law corporation sole, with all the capacities and powers of a natural person subject only to such particular limitations as were imposed by law. Although in R (Hooper) v Secretary of State for Work and Pensions [2005] 1 WLR 1681, para 47 Lord Hoffmann thought that there was “a good deal of force” in this analysis, it is open to question whether the analogy with a natural person is really apt in the case of public or governmental action, as opposed to purely managerial acts of a kind that any natural person could do, such as making contracts, acquiring or disposing of property, hiring and firing staff and the like.

In contrast, Lord Carnwath (in a separate but concurring judgment) said:

I cannot accept Mr Swift’s submission (if I understood it correctly) that there is some alternative, unidentified source of such powers, derived neither from the prerogative nor from any specific provision in the Act, but from the general responsibilities of the Secretary of State in this field. No authority was cited for that proposition and to my knowledge none exists. Mr Swift did not seek to rely on a possible “third source” of powers, by reference to the “controversial” line of authority mentioned by Lord Sumption (para 28). In my view he was wise not to do so (for the reasons given in my judgment for the majority in the Shrewsbury case [2008] 3 All ER 548, 562-4). (This sensitive issue has also been the subject of recent consideration by the House of Lords Select Committee on the Constitution: The pre-emption of Parliament HL Paper 165 – 1 May 2013).

However, the judicial skirmish over the third source turned out to be of largely academic interest only. Lord Sumption himself went on to acknowledge that:

the question does not need to be resolved on these appeals because the statutory power of the Secretary of State to administer the system of immigration control must necessarily extend to a range of ancillary and incidental administrative powers not expressly spelt out in the Act, including the vetting of sponsors.

Lord Carnwath agreed that the authority was to be found in the Act, although he preferred a more specific analysis that anchored the power to issue the criteria in specific provisions of the Act. Lord Sumption, in contrast, did not identify particular provisions that constituted the root of the government’s power to prescribe the criteria. Instead, he said:

If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must be also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act.

It appears, then, that Lord Sumption considered the power to consist, in some meta-sense, in the general scheme of the Act rather than in any specific provision contained therein. Lord Sumption went on to say that the implied, incidental authority being invoked was “not unlimited”:

The Secretary of State cannot adopt measures for identifying suitable sponsors which are inconsistent with the Act or the Immigration Rules. Without specific statutory authority, she cannot adopt measures which are coercive; or which infringe the legal rights of others (including their rights under the Human Rights Convention); or which are irrational or unfair or otherwise conflict with the general constraints on administrative action imposed by public law. However, she has not transgressed any of these limitations by operating a system of approved Tier 4 sponsors. It is not coercive. There are substantial advantages for sponsors in participating, but they are not obliged to do so. The rules contained in the Tier 4 Guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them.

This is very odd, and suggests some muddled thinking about the source—and therefore the nature—of the power being exercised. If the power in question derives from statute, then it is not clear, for example, why it should not be possible to adopt “measures which are coercive”. If the correct construction of the statute were that the adoption of such measures were lawful, then such measures would indeed be lawful. Equally, if the statute, corrected construed, were to authorize the taking of measures that infringed the legal rights of others, then the taking of such measures would be lawful.

It may be that Lord Sumption meant to suggest that these things are not lawful because the correct construction of the Immigration Act demonstrates no statutory authority for the adoption of such measures—although it is hard to know how he can be sure of this given that he fails to identify any specific provisions that fall to be interpreted. The limitations identified by Lord Sumption—which relate closely to the factors which circumscribe the third-source doctrine—would make more sense if he had concluded that the authority in question was of the third-source, as opposed to the incidental statutory, variety. This suggests, in turn, that Lord Sumption is (whether he means to or not) unhelpfully conflating third-source powers and the ill-defined implicit or incidental form of statutory authority upon which he ostensibly relies.

Harris’s notion of third-source authority is nothing to be afraid of in constitutional terms, provided that its limits are properly understood and applied. Neither the rule of law, nor the principle of legality nor the ultra vires concept is threatened by the third-source doctrine correctly understood. New College London’s recognition of the third-source category is therefore to be welcomed. It is unfortunate, however, that the analysis of the concept in this case is so cursory and muddled. Indeed, Lord Sumption’s invocation of the third source is a red herring in the particular circumstances of the case, and his casual suggestion that the doctrine might have been relevant risks giving it a bad name. As I noted above, the third source—like the prerogative—must be displaced to the extent that legislation occupies the field. And, for the reasons identified in Lord Carnwath’s more precisely reasoned judgment, that is exactly the situation that obtained here.

6 thoughts on “Muddled thinking in the Supreme Court on the “third source” of governmental authority

  1. Interesting post; I’ve been thinking about this “third source” issue all afternoon. The more one reads Lord Sumption’s judgment, the worse it gets. I agree that, in principle, Harris’ (and now Sumption’s) “third source” doctrine is not incompatible with our constitution, but this very much depends on the correct identification of its limits. It’s worrying that Lord Sumption feels confident in raising this as a definite source of Executive authority, but pays no attention to limiting it. As far as one can tell, Lord Sumption appears to believe that this “third source” of authority loosely overlaps the Royal Prerogative (largely irrelevant these days) and Government powers granted by statute (increasingly relevant, especially post-HRA).

  2. The argument in the US over the legality of ‘medicare’ was resolved by majority in the SCOTUS framing the issue as a federal tax permitted by the constitution. If the licensing scheme for sponsoring immigrants were framed in the UK as a revenue raising measure (its not clear the fees are ring-fenced for the use solely in immigration control) would a third source or implied authority suffice? Should the freedom not to be a sponsor suffice mean that the sponsorship licensing scheme is not to be regarded as a tax?

  3. Thank you for drawing my attention to this case – the third source has been an interest of mine for several years. My take has always been that the issues expressed in Shrewsbury and by critics come from analysing the third source through a constitutional lens predicated on a positive law framework. Once you’re willing to depart from that framework, the issues with the third source disappear. Treating the third source in such a cursory fashion, however, won’t go any way towards achieving that.

  4. The New Zealand Supreme Court is going to expressly deal with this again at a hearing next month, after the Court of Appeal found that the “red zone” created following the Christchurch earthquakes was a lawful exercise of residual freedom. Watch this space!

    CA decision:

  5. Residual authority should be kept as an implied delegated authority. Any authority must have implicit power to take subsidiary actions which are necessary to achieve the express authorised mandate. The public would see that as reasonable. Otherwise we are heading for a conflict between absolute power and limited government.

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