Duty to consult – Supreme Court sets down what fairness requires

by stevebroach

The question of what fairness requires in the context of consultation by public bodies has finally been answered by the Supreme Court. I would suggest that the answer means that many consultations previously held by public bodies were not carried out lawfully – and many presently ongoing may be unlawful as well.

The Supreme Court’s judgment is in R (Moseley) v LB Haringey [2014] UKSC 116 (disclaimer – I was involved in the case at its early stages as junior counsel for Mrs Stirling, the previous claimant who sadly died before the case reached the Supreme Court). You can download the judgment and the press summary from the Supreme Court website. Summaries are also available from Irwin Mitchell (solicitors for Mrs Moseley) and Monckton Chambers (where Ian Wise QC and I are based).

Mrs Moseley challenged (by way of an application for judicial review) the consultation which led to the decision by Haringey to adopt a scheme for Council Tax support requiring even the poorest residents to pay around 20% of their Council Tax bill, unless they were disabled people or pensioners. The decision affected around 36,000 households. Over 25,000, like Mrs Moseley, would previously have had their full liability for Council Tax met under the national Council Tax Benefit scheme.

The fundamental problem with the consultation materials, as Lord Wilson makes clear in his judgment with some rigorous analysis, is that they failed to recognise that Haringey had a choice to make. The materials strongly suggested that Haringey were required to pass on the shortfall in Council Tax support funding (one of the coalition’s nastiest cuts) to the poorest residents.

In fact it was open to Haringey to meet the shortfall in a number of ways – by requiring wealthier residents to pay more, by using its reserves and so on. See Lord Wilson’s judgment at [15] for how other local authorities responded to the cut; 25% entirely absorbed the shortfall in funding, 33% required their poorest residents to pay a sum no greater than 8.5% of their Council Tax liability so qualifying the authority for a transitional grant and the remaining 42% (including Haringey) passed on the whole shortfall, some (again including Haringey) exempting particular groups like disabled people.

These alternative options had been considered by Haringey’s officers and rejected. However the existence of these options was not made known to consultees, nor were the reasons why they had been rejected made clear. To the contrary, the consultation materials stated ‘This means that the introduction of a local Council Tax Reduction Scheme in Haringey will directly affect the assistance provided to anyone below pensionable age that currently involves council tax benefit’; see judgment of Lord Wilson at [17] (emphasis added). There was no suggestion here, or in numerous other places in the materials, that Haringey were left with any choice in the matter – although around 6 in 10 local authorities ultimately did make different choices.

Before considering whether Haringey’s consultation was unfair and unlawful, Lord Wilson gave the following general guidance as to the requirements of a lawful consultation:

  • Fairness is ‘a protean concept, not susceptible of much generalised enlargement’; [24]. Apart from the being the kind of language that might be thought to give lawyers a bad name, this means that it is impossible to pin down precisely what fairness requires.
  • However importantly, what fairness requires is determined by the purposes of consultation, also [24]. Drawing on the extremely important Supreme Court judgment in R (Osborn) v Parole Board [2013] UKSC 61, Lord Wilson held that there are three purposes behind consultation. Firstly, consultation should lead to better decision-making, ‘by ensuring that the decision-maker receives all relevant information and that it is properly tested’. Secondly, it should avoid the ‘sense of injustice’ that will be created if no consultation takes place. Thirdly, consultation should reflect ‘the democratic principle at the heart of our society’ – an important theme in the judgment of Lord Reed, see below.
  • The well-known criteria put forward by Lord Justice Sedley when he was counsel in the case of R v Brent London Borough Council ex p Gunning and then adopted by the Court of Appeal in R v North and East Devon Health
    Authority ex parte Coughlan [2001] QB 213 have now been approved by the Supreme Court, see [25]. This means that generally consultation must: (i) take place at a ‘formative stage’, i.e. sufficiently early in the decision making to influence the outcome, (ii) provide ‘sufficient reasons for any proposal to permit of intelligent consideration and response’, (iii) allow ‘adequate time’ for consideration and response and (iv) ensure ‘the product of consultation’ is ‘conscientiously taken into account’ in the final decision.

The central issue in Moseley was the third of these criteria – whether Haringey had given ‘sufficient reasons’ for its proposals, and in particular whether in the circumstances they were obliged to tell consultees about the other options which had been considered and rejected. However before determining this question Lord Wilson made three further general points, see [26]-[28]:

  • Firstly, the ‘degree of specificity’ which fairness requires in relation to consultation materials varies according to the identity of the consultees. Members of the public may require more specific and detailed information than technical experts. By extension, a consultation aimed at disabled people may require a clearer and more precise explanation than a consultation which does not have a disability focus.
  • Secondly, the demands of fairness are likely to be greater ‘when an authority contemplates depriving someone of an existing benefit or advantage than when the claimant is a bare applicant for a future benefit’. In other words, if the consultation is about cuts there is an even more stringent requirement for it to be fair than if the consultation concerned proposed improvements to services or support.
  • Thirdly, and critically in Mrs Moseley’s case, fairness may require that ‘interested persons be consulted not only upon the preferred option but also upon arguable yet discarded alternative options’. This of course was not what Haringey had done.

Applying the above principles, Lord Wilson reached the inevitable conclusion at [29]:

Those whom Haringey was primarily consulting were the most economically disadvantaged of its residents. Their income was already at a basic level and the effect of Haringey’s proposed scheme would be to reduce it even below that level and thus in all likelihood to cause real hardship, while sparing its more prosperous residents from making any contribution to the shortfall in government funding. Fairness demanded that in the consultation document brief reference should be made to other ways of absorbing the shortfall and to the reasons why (unlike 58% of local authorities in England: see para 15 above) Haringey had concluded that they were unacceptable.

Lord Wilson then gave an example at [30] from Birmingham’s consultation of how this could have been done in practice.

The next question was whether, as the Court of Appeal had concluded, it did not matter that the consultation materials failed to refer to other options because these were ‘reasonably obvious’. Lord Wilson dismissed this argument at [31] for two reasons:

  • Even if the existence of other options was reasonably obvious it was not at all obvious why Haringey had rejected them. As Lord Wilson observed, ‘I speak as one who, even after a survey of the evidence filed by Haringey in these proceedings, remains unclear why it was minded to reject the other options. Perhaps the driver of its approach was political’.
  • The Judges below had failed to give sufficient consideration to the terms of Haringey’s consultation, which ‘represented, as being an accomplished fact, that the shortfall in government funding would be met by a reduction in council tax support and that the only question was how, within that parameter, the burden should be distributed’. Because Haringey’s message to consultees was that ‘other options were irrelevant’ any assumed knowledge of them could not save the consultation ‘from a verdict that it was unfair and therefore unlawful’.

However, fairness did not specifically require that Haringey should have informed consultees about the existence of the transitional grant which was taken up by a number of other local authorities; see [32].

Lord Wilson held that it would be disproportionate for Haringey to be ordered to re-run its consultation when it was not minded to revise the scheme, see [33]. However Irwin Mitchell, solicitors for Mrs Moseley, have drawn attention to Haringey’s charter on consultations in their press release to argue that Haringey should choose to re-consult in the light of the judgment.

Lord Reed gave a short concurring judgment in which he expressed agreement with Lord Wilson’s conclusions but preferred to emphasise ‘the statutory context and purpose of the particular duty of consultation with which we are concerned’, see [34]. Lord Reed held at [38] that ‘ The purpose of public consultation in that context is in my opinion not to ensure procedural fairness in the treatment of persons whose legally protected interests may be adversely affected, as the common law seeks to do. The purpose of this particular statutory duty to consult must, in my opinion, be to ensure public participation in the local authority’s decision-making process’. At [39], Lord Reed held that ‘Meaningful public participation in this particular decision-making process, in a context with which the general public cannot be expected to be familiar, requires that the consultees should be provided not only with information about the draft scheme, but also with an outline of the realistic alternatives, and an indication of the main reasons for the authority’s adoption of the draft scheme’. Lord Reed’s conclusion at [42] was that these requirements were not met by Haringey; ‘The consultation document presented the proposed reduction in council tax support as if it were the inevitable consequence of the Government’s funding cuts, and thereby disguised the choice made by Haringey itself’.

Lord Reed’s focus on the purpose of the statutory duty to consult in this case would appear to mirror the third purpose of the common law duty to consult identified by Lord Wilson, being to promote public engagement and reflect ‘the democratic principle at the heart of our society’. As such Lady Hale and Lord Clarke felt able to agree with both Lord Wilson and Lord Reed, see [44].

So what does the Supreme Court’s judgment in Moseley mean for future cases?

  • Firstly, nowhere in the Supreme Court’s judgment is there a requirement, seen in case law from the lower courts, that for the consultation to be unlawful is must have gone ‘clearly and radically wrong’. The question in every case is simply whether what fairness requires in that particular context has been done.
  • Secondly, there is a very welcome emphasis on the need for the consultation to be accessible to the people at whom it is aimed. The courts should now be less willing to accept arguments by public authorities that issues which are not addressed properly or at all in the consultation materials should be ‘obvious’ to consultees and therefore did not need to be included.
  • Thirdly, Lord Wilson expressly held that the requirements of consultation are more strict when what is being proposed is a reduction in services or the withdrawal of a benefit. Given the extent of the cuts still to come in public services in the next few years the courts must apply rigorous scrutiny to the consultations which will proceed them to determine if they are fair.

In short then, the Supreme Court’s judgment in Moseley sets up more successful consultation challenges, both generally and specifically in the cuts context. This is yet further reason why judicial review is such an important means for disabled people and other heavy users of public services to assert their rights. Anyone who considers that a current, future or recently concluded consultation may be unlawful after Moseley should seek specialist legal advice.