In its recent decision in R (Rotherham MBC) v Secretary of State for Business, Innovation & Skills [2014] EWHC 232 (Admin), the Administrative Court considered a challenge, brought by several local authorities, to decisions concerning the allocation of EU structural funding as between the four constituent countries of the UK and as between English regions. The challenge succeeded on the ground that the Secretary of State had failed to consider the Public Sector Equality Duty imposed by the Equality Act 2010. However, the claimant local authorities failed to establish the substantive unlawfulness of the decisions on reasonableness or proportionality grounds. In deciding the latter aspect of the case, Stewart J made some interesting observations concerning the relationship between the reasonableness and proportionality doctrines, and about the nature of substantive review in cases such as the present one.
Since the Secretary of State was acting within the scope of EU law, it was uncontroversial that the proportionality doctrine was applicable—which, whilst increasingly broadly deployed by English courts, is still not embedded as the default instrument for conducting substantive review of administrative decisions. However, Stewart J concluded that addressing matters through a proportionality lens would be relatively unhelpful in practical terms, and would add little, if anything, to the reasonableness doctrine in terms of the intensity of review. He observed that proportionality is useful, and liable to make a difference to the nature and potentially the outcome of the judicial analysis, only when a particular type of “framework” is in play:
That framework is that there is a specific legal standard and a decision by a public body which derogates from that standard. The court then has to address the question as to whether there is a legally justifiable basis for so derogating.
Stewart J went on to conclude that no “specific legal standard” was in play in the present case, such that the proportionality machinery—which is suited to facilitating evaluation of executive attempts to justify the infraction of such standards—was not especially helpful within the factual matrix of the case:
Although the Claimants do not accept this analysis [i.e. the analysis set out in the previous excerpt], it seems to me to be correct. If so, the question is whether the Defendant’s decisions fit that particular mould. This depends on whether there is a specific legal standard imposed on the Defendant from which the Defendant’s decisions derogate. This is in issue. The Claimants say that the specific legal standard is that the EU funding must be used so as to reduce disparities between the levels of development of various regions. What this argument fails to recognise is that, save for Article 93 TFEU, there is no legal standard imposed by EU law on the Defendant in his decisions as to how to allocate funds within the categories, including the Transition region categories. In fact TFEU provides the general aim and the 2013 Regulation, so far as material to this case, is addressed to the Commission in the decision it makes in the classification of regions. I do not accept that the Defendant is required, because of provisions in TFEU and the 2013 Regulation upon which the Claimants rely, either to follow or take into account as a material consideration the reduction of disparity between regions. For this reason the principle of proportionality does not add anything to a rationality challenge. There is nothing which requires the Defendant to use or take into account, in his allocation of funds amongst the regions in a particular classification, any overarching principle, and in particular any criterion based on EU average GDP.
I offer no comment on whether Stewart J was correct in his analysis of the EU law point concerning the presence or absence of a relevant “specific legal standard”. In more general terms, however, his analysis has much to commend it, and serves as a helpful refutation of the view—advanced by some commentators—that the proportionality doctrine should be adopted across the board. As Stewart J shows, there are circumstances to which it is well-suited, and others to which it is not.
The second point of interest in the Rotherham case, from a general administrative law perspective, is that as well as showing that the Wednesbury principle is alive and well, the judgment indicates that the same is true of the so-called super-Wednesbury variant of the test. (“Super-Wednesbury” because the threshold of unreasonableness capable of triggering judicial intervention is higher than usual.) Endorsing views advanced by Lord Bridge in R v Secretary of State for the Environment, ex parte London Borough of Hammersmith and Fulham [1991] 1 AC 521, Stewart J said:
I accept the Defendant’s submission that these decisions do involve political policy and macroeconomic judgment concerning the allocation of funding at the highest level. They were decisions that involved economic and policy judgment whereby the Government had to decide political policy and macroeconomic judgment concerning the choice between different potential methodologies of allocation. Overwhelmingly this was a political judgment for the Government and the court should be very loath to interfere with such a judgment. A wide margin of discretion is afforded to the Government in relation to such decisions; the court should only interfere if a very high threshold of unreasonableness is met.
This rightly recognizes that—particularly in cases lacking a specific human rights dimension—there may still be a constitutional case for deference to the views of democratically-accountable decision-makers. I am far from certain, however, that rigid differentiation between Wednesbury and proportionality, and between different types of Wednesbury review, are the best way of conceptualizing what is going on in cases like this. Nor I am convinced that Stewart J is right to suggest that the notion of justification has no role to play in cases that cannot be approached through a proportionality lens: after all, what can testing the reasonableness of a decision amount to if not determining whether there exist reasons capable of supporting it? My view is increasingly that the notion of justification must operate in all substantive review cases, the difference between what we traditionally think of as “Wednesbury cases” and “proportionality cases” turning not upon the relevance of irrelevance of justification as an organizing concept, upon which the concrete meaning with which the concept is invested in different contexts. (I am current exploring these issues in a paper on which I am working, and addressed them preliminarily in this post, published last year.) These points aside, however, the analysis in the Rotherham case is to be welcomed at least to the extent that it helps to demonstrate the deficiency of the argument which holds that the proportionality test can operate as a panacea.
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