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OUTER HOUSE, COURT OF SESSION [2008] CSOH 18 |
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P126/08 |
OPINION OF LORD MACPHAIL in the Petition of (FIRST) THE INFANT AND DIETETIC FOODS ASSOCIATION LTD; (SECOND) JOHN WYETH AND BROTHER LTD; (THIRD) NUTRICIA LTD; and (FOURTH) H J HEINZ LTD Petitioners; for Judicial Review of a decision by the Scottish Ministers to make and lay before the Scottish Parliament the Infant Formula and Follow-on Formula (Scotland) Regulations 2007 ________________ |
Petitioners: Howie, Q.C., M.V. Ross; Maclay Murray & Spens LLP
Respondents: J. Mure;
M. Sinclair, Solicitor to the Scottish Executive
Interested Party: Lindsay;
C. Mullen, Solicitor to the Advocate General for
Introduction
[1] This
is a motion for the interim suspension
of a Scottish statutory instrument. On
[2] The
motion is made in the course of proceedings in an application for judicial
review of a decision by the Scottish Ministers to make and lay before the
Scottish Parliament the statutory instrument in question, which is the Infant
Formula and Follow-on Formula (Scotland) Regulations 2007 (SSI 2007, No 549: "the 2007 Regulations").
The first petitioners are a trade association representing, among
others, manufacturers in the
[3] At
the first order stage on
[4] The
motion was called before me on
[5] The
2007 Regulations are intended to give effect to Commission Directive
2006/141/EC on infant formulae and follow-on formulae ("the Directive") and to
a Council Directive which is not material for present purposes. The Directive requires the Member States to
adopt rules which comply with its provisions as to the composition and
labelling of IF and FOF. In
[6] The
first petitioners have already raised proceedings in
The statutory provisions
[7] The transitional provisions in the Directive are contained in articles 17 and 18, which provide, so far as material:
"Article 17
The new
requirements set out in Article 7(1) and (2) of this Directive [which are
concerned with the compositional criteria for IF and FOF] shall not apply
mandatorily to dietary foods for special medical purposes intended specifically
for infants [ . . . ] until
Article 18
1. Member States shall adopt and publish, by 31 December 2007 at the latest, the laws, regulations and administrative provisions necessary to comply with Articles 2, 3 and 5 to 17 [which include those dealing with labelling] and Annexes I to VII. [. . . ]
They shall apply those provisions in such a way as to:
-
permit trade in products complying with this Directive
by
-
without
prejudice to Article 17, prohibit, with effect from 31 December 2009 trade in
products which do not comply with this Directive. [ . . . ]"
[8] In the enacted 2007 Regulations sections 15 to 19 deal with the following matters: 15, the naming of IF; 16, the naming of FOF; 17, the labelling of IF; 18, the labelling of FOF; and 19, the avoidance, by means of labelling, of the risk of confusion between IF and FOF.
[9] Regulation 3 prohibits the marketing of IF or FOF unless certain conditions are met. It provides:
"(1) No person shall market infant formula which contravenes or fails to comply with regulation 5, 6, 8, 10, 11, 12, 14(1), (2) or (3), 15, 17 or 19.
(2) No person shall market follow-on formula which contravenes or fails to comply with regulation 5, 7, 9, 10, 11, 12, 14(1), (2) or (3), 16, 18 or 19."
The Regulations whose numbers I have italicised did not appear in the draft Regulations in respect of which the consultation exercises took place. I have drawn attention to their subject-matter in the previous paragraph.
[10] Regulation 28 deals with offences and enforcement. It provides:
"(1) Any person who contravenes or fails to comply with any of the provisions contained in regulations 3 [and certain other regulations] is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(2) Each food authority [that is, each local authority] shall enforce and execute these Regulations in its area."
[11] Regulation 31 provides transitional arrangements. Regulation
31(1) revokes as from
"(3) No person commits an offence under regulation 28(1) consisting of a contravention of or a failure to comply with -
(a) regulation 3(1), where -
(i) the action that would otherwise constitute the offence consists of marketing infant formula which contravenes or fails to comply with regulation 5, 6, 8, 10, 11, 12 or 14(1), (2) or (3), and
(ii) there is no offence under regulation 22(1) of the 1995 Regulations consisting of a failure to comply with regulation 2(a)(i) or (ii) of those Regulations;
(b) regulation 3(2), where -
(i) the action that would otherwise constitute the offence consists of marketing follow-on formula which contravenes or fails to comply with regulation 5, 7, 9, 10, 11, 12 or 14(1), (2) or (3), and
(ii) there is no offence under regulation 22(1) of the 1995 Regulations consisting of a failure to comply with regulation 3(a) or (b) of those Regulations; [ . . . ]"
[12] It will be observed that these provisions do not refer to any
contravention of any of regulations 15 to 19, which are among those specified
in regulation 3. Thus, a manufacturer
who contravenes any of the 2007 Regulations relative to labelling may be said
to be exposed to criminal liability with effect from
The petitioners' submissions
[13] The petitioners' senior counsel moved for suspension ad interim of the 2007 Regulations in
their entirety. He explained that at
this stage he did so at common law and did not found on section 102 of the
Scotland Act 1998. He also observed that
the 40-day period during which the Regulations were subject to annulment, which
had begun when they were laid before the Scottish Parliament on
[14] Counsel presented three arguments. First, he submitted that the Regulations were
inconsistent with the Directive. The
argument ran as follows. Article 18
permitted trade in products complying with the Directive by
[15] Secondly, counsel founded on the respondents' failure to
consult the petitioners. (Counsel
accepted that their duty to consult was imposed not by section 48(4) of the
Food Safety Act 1990, as stated in the petition, but by article 9 of Regulation
(EC) No 178/2002: see section 48(4C) of the 1990 Act.) Counsel founded in particular on the
respondents' failure to consult the petitioners on the changes in the
transitional provisions. He referred to
the partial regulatory impact assessment annexed to the Food Standards Agency's
Scottish consultation document (no 6/14 of process) and pointed to its
explanation of regulation 31 of the draft Regulations in paragraph 3.80. It was
there said that the effect of regulation 31 was, among other things, to "permit
trade in products which comply with the 1995 Regulations (the previous
Regulations) no later than
[16] Thirdly, counsel addressed me on the consequences of
differentiation between the law on the subject of the Regulations in the
different parts of the
[17] Counsel did not develop two matters which are the subject of averment in the petition: the issue of legitimate expectation, and the "gold plating" of the Directive. He submitted that on the grounds on which he had addressed me, he had established a prima facie case. That was the first test he had to satisfy: Toynar Ltd v Whitbread & Co plc 1988 SLT 433. Since he was not attacking the Directive, he did not have to meet any higher test. Counsel discussed Abna Ltd v The Scottish Ministers 2004 SLT 176; R v Secretary of State for Transport, ex parte Factortame Ltd (No 2) [1991] AC 603, Lord Goff of Chieveley at pages 661, 663, 664, 671-674; Re Eurostock Meat Marketing Ltd's Application for Judicial Review [1999] NI 13 at 21-24; and R v H M Treasury, ex p British Telecommunications plc [1994] 1 CMLR 621, Sir Thomas Bingham M R at 647.
[18] Counsel then turned to the second test, that of the balance of
convenience. He submitted that it was
difficult to define any prejudice that would be suffered by the Scottish
Ministers if the Regulations were to be suspended. On the other hand, if they were not
suspended, the petitioners would be liable to criminal sanctions if they
marketed their goods. Their alternative
course would be to withdraw from the market until they could produce goods that
were labelled in accordance with the Regulations. That would involve them in
time, trouble, expense and loss of profit.
Withdrawal of their goods from the market involved a risk of
reputational damage: some might think
that the goods had been withdrawn because there was something wrong with
them. It was no answer to say that they
could defend any criminal proceedings:
quite apart from the cost of doing so, there was the reputational damage
that would result from the unpleasant publicity. The fact that their conduct would be lawful
elsewhere in the
[19] Counsel also discussed whether prejudice could be avoided by an
award of damages, and submitted that it could not. The loss and reputational damage suffered as
a result of criminal proceedings would be difficult to assess. The petitioners would also have to satisfy
the tests prescribed in Dillenkofer v
[20] Moving for suspension of the Regulations in their entirety,
counsel pointed out that that was what had been ordered by the courts in
The respondents' submissions
[21] Counsel for the Scottish Ministers opposed the granting of interim suspension. The principal grounds of opposition were that the Directive required the Scottish Ministers to adopt implementing measures by 31 December 2007; that the petitioners had made out an insufficiently strong case for interim relief; that damages might in any event be a sufficient remedy for any companies who suffered pecuniary loss; that there was no real urgency; and that the balance of convenience favoured the status quo.
[22] Counsel submitted that the question for the Court was whether
article 18(1) of the Directive, properly construed, provided a transitional
period within which the implementation of the Directive's provisions did not
require the enforcement of compliance with the labelling requirements of which
the petitioners complained.
[23] Counsel accepted that the draft Regulations had not indicated
that all the labelling requirements would be enforced from January 2008. He submitted, however, that the position had
been made clear at a meeting on
[24] Counsel also addressed me on the Court's approach to interim relief requiring the suspension of domestic legislation which implemented Community law. He submitted that the petitioners required to show at this stage a strong prima facie case that the law was invalid. Counsel discussed Factortame (supra), Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe [1993] 3 CMLR 1 at [14]-[33] and Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227, Lord Goff of Chieveley at 280-281.
[25] As to the balance of convenience, counsel submitted that there
was no clear urgency. It was not clear
whether, and if so why, it was not practical for manufacturers to label their
products according to the new requirements, whether their products' composition
accorded with the Regulations of 1995 or 2007. The respondents understood
that many companies had been working on both the compositional and labelling
requirements of the Directive since its publication on
[26] Counsel said that it was not anticipated that the prosecution of manufacturers would be imminent if the Regulations were not suspended. The witness statement of Ms Clare Boville of the Food Standards Agency (no 7/1 of process) which had been prepared for the English proceedings demonstrated that food authorities were advised to take "a graduated and educative approach" to enforcement of the law and not simply to bring a prosecution if they found a breach (paragraphs 37-44). In any event it would be open to the petitioners to rely on their view of the Regulations in defending any prosecution brought against them.
[27] Counsel added that the interim
orders made in
[28] Finally, counsel addressed the question of the partial
suspension of the Regulations. He submitted that the public and Community
interests required that the Court suspend only those parts of the Regulations
in respect of which the requirements for interim
relief had been met, and that no obvious prejudice to the petitioners would
arise if partial suspension were ordered.
Counsel referred to
Discussion
[29] In my opinion, for the petitioners' motion for interim suspension to succeed they must demonstrate a prima facie case of a particular kind, and it must also appear that the balance of convenience favours the grant of an order for suspension ad interim.
[30] As to the first requirement, I do not consider that there is any rule requiring the petitioners to show a strong prima facie case that the Regulations are invalid. The petitioners do not attack the validity of the Directive, but the validity of the Regulations which purport to implement it; and there is no question of suspension ad interim pending a reference to the Court of Justice. These considerations appear to me to distinguish the present case from the cases cited in argument. I note that in any event in Factortame Lord Goff of Chieveley observed (at page 674) that he doubted whether in cases of the class his Lordship was discussing there was any rule that a party challenging the validity of a law must, to obtain an interim injunction restraining the enforcement of the law, show a strong prima facie case that the law is invalid. His Lordship concluded his discussion by saying:
"In the end, the matter is one for the discretion of the court, taking into account all the circumstances of the case. Even so, the court should not restrain a public authority by interim injunction from enforcing an apparently authentic law unless it is satisfied, having regard to all the circumstances, that the challenge to the validity of the law is, prima facie, so firmly based as to justify so exceptional a course being taken."
[31] In the argument before me the parties were at issue as to the appositeness of these dicta in the present case, but I shall assume that that passage states the test the Court must now apply. I note, accordingly, that I must take into account all the circumstances of the case, and I bear in mind that the course the petitioners urge me to follow is exceptional. Nevertheless, having examined their challenge to the validity of the Regulations, I have concluded that prima facie their case is so firmly based as to justify an order for suspension ad interim. I have not determined that the petitioners have a strong case, and I have not reached any concluded decision on the legal submissions presented at the hearing. It is a familiar rule that no such decision should be made at this stage (Toynar Ltd, supra, at 434F-H). It is therefore inappropriate that I should analyse the petitioners' various contentions in detail and assess the weight to be attached to each. It suffices that in the exercise of my discretion I consider it correct to say, bearing in mind the words quoted above from the speech of Lord Goff, that "manifestly there is a case to argue and a case to answer" (Reed Stenhouse (UK) Ltd v Brodie 1986 SLT 354 at 358B-C, cit Toynar Ltd, supra, at 434E-F).
[32] While I am satisfied that the petitioners have met the first test, I am not persuaded that they have shown that the balance of convenience favours the suspension of the Regulations, in whole or in part, ad interim. In argument they placed great emphasis upon their exposure to criminal sanctions if the Regulations were not suspended. I am unable to accept, however, that there is any realistic prospect of the second to fourth petitioners being prosecuted before the present application for judicial review is determined. In the first place, Ms Boville's witness statement (no 7/1 of process) clearly explains how food authorities enforce the law. She states that they do not simply bring a prosecution if they find a breach: they are required to have regard to a Code of Practice for their guidance as regards execution and enforcement. The Code requires enforcement action to be "reasonable, proportionate and consistent with good practice". It enjoins "a graduated and educative approach" which involves informal action including the discussion of the circumstances of the case before formal enforcement action is taken. Ms Boville states that the Code makes clear that taking a prosecution should not automatically be either the first choice or the only means of achieving compliance.
[33] Secondly, while Ms Boville's account seems to be naturally
focused on English practice, it is necessary to note that in
[34] Thirdly, the period to be considered is very short: the first hearing in this case should take place within weeks rather than months.
[35] In these circumstances there is not, in my opinion, any real risk that within that interval of time a public prosecutor would consider it to be in the public interest to bring a summary prosecution for a contravention of a regulation the validity of which was currently under challenge in all the Supreme Courts of Scotland, England and Northern Ireland, and was likely to be determined by these Courts within a matter of weeks.
[36] Certain of counsel's further submissions on the balance of convenience were based on the risk of criminal proceedings. Other submissions relative to the alleged difficulties of labelling goods did not appear to me to be sufficiently supported by precise information.
[37] There are other practical considerations which appear to me to favour the maintenance of the status quo. In my view only partial suspension of the Regulations would be appropriate, since it is not contended that the Regulations as a whole are ultra vires. On the assumption that the Court could overcome the difficulty of identifying which of the Regulations should be suspended, it would then be necessary for manufacturers and food authorities to be advised with accuracy of the precise effects of the Court's decision. However lucid the advice might be, there would obviously be room for confusion in the minds of those advised. In addition, some manufacturers might feel constrained from bringing into the Scottish market any goods that complied only with the labelling requirements of the 2007 Regulations. It does not seem sensible to invite all these difficulties for the duration of an interim period of weeks rather than months.
Result
[38] I have accordingly decided that the petitioners' motion for interim suspension of the Regulations
should be refused. In so deciding I have
not been influenced by the interim
orders made by the learned Judges in the High Court in
[39] As I have indicated, if I had concluded that interim suspension was appropriate, I would not have made an order relative to the Regulations as a whole, but I would have invited counsel for the parties to assist me in identifying which particular regulations should be suspended.