I. Introduction
General
background
[1] In
these proceedings for judicial review the petitioners are major insurance
companies. Together they challenge the lawfulness of a recent Act of the
Scottish Parliament which came into force on 17 June 2009. Both prospectively and
retrospectively the Damages (Asbestos-related Conditions) (Scotland) Act 2009 bears to make pleural
plaques and certain other asbestos-related conditions actionable for the
purposes of claims of damages for personal injuries. According to the
petitioners, this unfairly burdens them with additional liabilities under
indemnity insurance policies to the extent of hundreds of millions - perhaps
billions - of pounds, and they now seek declaratory and reductive orders from
the court in that connection. This is resisted by the compearing respondents
who are (first) the Lord Advocate as representing the Scottish Ministers, and
(third to tenth) a number of individuals with diagnosed pleural plaques who
seek, or at least intend to seek, damages on that account from their former
employers. A First Hearing on the parties' competing contentions has now taken
place before me over periods totalling 22 days.
[2] Accordingly
to current medical thinking (on which there is no dispute in this case), pleural
plaques are physical changes in the pleura, that is, two layers of tissue which
lie between the lungs, on the internal or "visceral" side, and the ribs and
chest wall on the external or "parietal" side. Lubricated by serous fluid,
these layers are capable of sliding against one another so as to facilitate
expansion and contraction of the lungs during respiration. Plaques on the
pleura may be detected radiologically as areas of fibrous tissue, and are in many
cases caused by occupational exposure to asbestos. As with other
asbestos-related conditions, pleural plaques tend to develop after a long
latency period of twenty years or more, and it is thought that they may be
present in the pleura of around fifty per cent of exposed individuals. The
precise aetiology of pleural plaques remains unknown, but they may reflect a
prolonged low-grade inflammatory response to the local presence of asbestos
fibres or other agent.
[3] In most
cases, however, pleural plaques have no discernible effect on an individual's
day-to-day physical health or wellbeing. They are asymptomatic, causing no
pain or discomfort. They produce no disability or impairment of function, nor
are they externally disfiguring. The pleural layers continue to slide against
each other as before, so that neither expansion nor contraction of the lungs is
restricted. Moreover, while pleural plaques may themselves become more
extensive over time, they do not progress into, or cause or contribute to the
development of, any other condition. Serious and potentially fatal diseases
such as lung cancer, mesothelioma (an aggressive malignancy affecting the outer
lining of the lung) and asbestosis (progressive fibrosis of the lung itself)
develop independently of any pleural plaques which may be present, and the risk
of contracting any of these conditions (including pleural plaques) is solely
attributable to an individual's past exposure to asbestos. The development of
pleural plaques has sometimes been described as merely "evidential", in the
sense of confirming an individual's exposure to asbestos in the past without
the plaques, in themselves, being causative of anything.
[4] As
against that, fibrous plaques are self-evidently abnormal and unwelcome
pathological changes in the pleura. According to an expert report recently
received by the UK Government (production 7/85), pleural plaques are usually
bilateral; they are dense, irregularly-shaped collagenous masses with a
polished or nodular surface; they tend to calcify over time; in size, each
may be more than 10cm across and up to 1cm in thickness; and they may be
capable of bridging gaps and of fusing into large sheets. Almost exclusively
they appear on the parietal pleura (i.e. on the inner surface of the rib cage),
but they may also be found in other locations such as the upper surface of the
diaphragm. Not surprisingly, individuals diagnosed with pleural plaques are
liable to become alarmed and anxious for the future, and this may severely
reduce their enjoyment and quality of life. The diagnosis confirms significant
asbestos exposure in the past, of which they may or may not previously have
been aware; it underlines the much higher risk which they now face, many
hundreds of times greater than for members of the population at large, of
contracting lung cancer, mesothelioma or asbestosis; and in some cases it may
bring to mind the suffering and perhaps death of friends, colleagues and
relatives from these serious asbestos-related diseases.
[5] According
to long-established common law principles applicable throughout the United
Kingdom, the delict or tort of negligence is not complete until an alleged
breach of duty goes on to cause "damage" to an extent recognised by the law. In
the absence of such "damage" a person has no right of action, and in
consequence statutory time-limits do not begin to run against him. Within the
last century the need for "damage" as an essential element of actionable
negligence has been repeatedly affirmed at the highest judicial level. In Lochgelly
Iron & Coal Company v McMullan 1934 AC 1, at p. 25, Lord
Wright said:
"In strict legal analysis, negligence means more than
heedless or careless conduct, whether in omission or commission; it properly
connotes the complex concept of duty, breach, and damage thereby suffered by
the person to whom the duty was owing: on all this the liability depends...."
Observations along
similar lines were made by the Lord Chancellor in Crofter Hand-woven
Harris Tweed Co Ltd v Veitch 1942 SC HL 1, at pp. 5-6. In Cartledge
v E Jopling & Sons Limited 1963 AC 758, Lord Evershed at pp.
773-4 confirmed that a cause of action arose on the occurrence of "... real
damage, as distinct from purely minimal", and at p. 779 Lord Pearce said:
"It is for a judge or jury to decide whether a man has
suffered any actionable harm and in borderline cases it is a question of
degree. ...It is a question of fact in each case whether a man has suffered material
damage by any physical changes in his body. Evidence that those changes are not
felt by him and may never be felt tells in favour of the damage coming within
the principle of de minimis non curat lex."
[6] Some
years later, in the Scottish case of Brown v North British Steel
Foundry Ltd 1968 SC 51, the issue for determination was the date at which
the pursuer's cause of action arose for statutory limitation purposes. At
pp. 64-5, the Lord President (Clyde) made the following observations:
"... To create a cause of action, injuria and damnum
are essential ingredients. In the present case there is no evidence of any
injuries to the workman's lungs in 1949. He had then merely a deposit of dust
in his lungs, which might or might not subsequently create an injury. But, in
addition, he had then sustained no damnum. He could not then have been
awarded damages for any loss, because at that stage he had sustained no loss of
wages and had suffered none of the discomforts and disabilities which, he
avers, followed upon the onset of pneumoconiosis and which in fact flowed from
the outbreak of that disease in 1955."
More recently
still, in a conjoined group of test cases on pleural plaques claims south of
the border, finally reported sub nom. Rothwell v Chemical and
Insulating Co Limited 2008 1 AC 281, the necessity for "damage" was again
positively affirmed by all members of the appellate committee of the House of
Lords. Two of their Lordships on that occasion were Scottish judges, Lord Hope
of Craighead and Lord Rodger of Earlsferry, both of whom formerly held the
high offices of Lord President of the Court of Session and Lord Justice General
of Scotland.
[7] It is
also well established that, as a matter of principle, damages are not recoverable
at common law for either (i) a perceived risk of suffering actionable
"damage" in the future, or (ii) free-standing fear, anxiety or distress.
If physical or mental harm resulting from alleged negligence is of itself
sufficient to constitute "damage", and thereby to complete an individual's
cause of action, then the quantification of his claim (under the law of
damages) may legitimately include any associated or consequential future risk
and/or anxiety. But without actionable "damage" in the first place,
free-standing risk and anxiety cannot by themselves found a claim of damages.
This latter area of the law has received intensive judicial attention in recent
years, the search being for a workable dividing line between a recognised
psychiatric illness or condition, which will in certain circumstances amount to
actionable "damage", and mere worry, upset or anxiety which will not. Important
decisions in this category, all of which were considered in Rothwell, include
Alcock v Chief Constable of South Yorkshire Police 1992 1 AC 310
(on secondary liability arising in the aftermath of the Hillsborough football stadium
disaster); Page v Smith 1996 AC 155 (where psychological consequences
followed a road accident); and Barber v Somerset County Council 2004
1 WLR 1089 (concerning the effects of stress at work).
[8] With
these considerations in mind, the decision of the House of Lords in Rothwell
can be seen as forming part of a broader structural approach to the issue of actionability
in cases of negligence. Not only did the House there confirm that
free-standing anxiety regarding the risk of contracting an asbestos-related
disease in the future was insufficient to furnish claimants with a cause of
action, but they also held (agreeing with the first instance judge, the majority
of the Court of Appeal and indeed, the claimants themselves who did not argue
otherwise at these earlier stages of the litigation) that the emergence of
asymptomatic pleural plaques giving rise to no disability, disfigurement or
future risk could not by itself constitute a valid cause of action either.
[9] For
around two decades prior to the Rothwell decision, however, insurance
companies throughout the United Kingdom had in practice conceded liability to pay damages in pleural
plaques cases. In England and Wales this concession - described in court by
the petitioners as a "commercial decision" taken while the number and value of
such claims appeared low - followed three unreported first instance decisions against
the Ministry of Defence as defendants in the early-to-mid 1980s. With one
possible exception, these decisions were based on an aggregation of symptoms
and complaints, and not on diagnosed pleural plaques alone. Church v MoD
(1984) was a case in which the judge based his award on a combination of apparent
lung damage, anxiety and other factors in addition to pleural plaques, and Patterson
v MoD (1986) similarly concerned a combination of features including
future risk and anxiety. Only in Sykes v MoD (1984) did
Otton J. arguably hold that pleural plaques were in themselves sufficient
to complete the plaintiff's cause of action. Within the same period, however,
a fourth case of Morrison, to which some reference was made in Sykes,
was decided by Rose J. in the defendants' favour on the basis that neither
pleural plaques per se, nor such plaques in combination with perceived
risks and anxiety, constituted actionable damage for the purposes of a claim in
negligence. Notwithstanding the unsatisfactory nature of these conflicting
first instance decisions, it was not until around 2005 that steps were taken to
test the true actionability of pleural plaques in what became the Rothwell
group of cases. Unfortunately, from the petitioners' perspective, all of these
test cases originated south of the border and were thus determined in
accordance with English law. Apparently the prime mover in this latter
initiative was the Department of Trade and Industry as representing former
nationalised industries, and the indemnity insurers of certain private sector
employers merely followed suit.
[10] In Scotland, by contrast, where the emergence
of pleural plaques claims seems to have been somewhat delayed, the issue of actionability
was not formally the subject of judicial determination prior to the date when
the Rothwell test cases were finally concluded. Here again insurers
took a "commercial decision" not to contest that issue, and as a result
reported cases such as Gibson v McAndrew Wormald & Co Ltd
1998 SLT 562, Nicol v Scottish
Power plc 1998 SLT 822 and Lambie
v Toffolo Jackson Ltd (in liquidation) 2003 SLT 1415 concerned other issues such as time-bar or the quantification
of damages. In the Gibson case, however, where liability was (as usual)
formally conceded by the defenders, the Lord Ordinary (Lord MacLean) had to
consider a challenge to the relevancy for jury trial of the pursuer's averments
of loss. After reviewing a number of authorities, including Sykes,
Lord MacLean (at p. 564A-B) said:
"... as I read the pleadings, I understand the pursuer
to be seeking compensation for the damage already caused to his lungs (albeit
that as is yet symptomless) by reason of his exposure to asbestos; for the
significant risk that he may develop mesothelioma in consequence of that
exposure; and for the anxious and depressed state he is in by a realisation of
the prospect that he may develop a fatal disease of his lungs. These three
consequences of the admittedly negligent exposure to asbestos are all
connected, one with the other. The averments are in my opinion clear and they
are also relevant."
Along similar lines the Lord Ordinary in Nicol (Lord Nimmo Smith) felt it appropriate to award damages, not only for
pleural plaques as such, but also for (i) the risk of contracting more serious
diseases in the future, and (ii) the pursuer's evident anxiety regarding
current symptoms although, in fact, they were due to his smoking habit.
[11] So far
as relevant for present purposes, the Damages (Asbestos-related Conditions) (Scotland) Act 2009 provides as follows:
"1. Pleural Plaques
(1) Asbestos-related pleural plaques are a
personal injury which is not negligible.
(2) Accordingly, they constitute actionable
harm for the purposes of an action of damages for personal injuries.
(3) Any rule of law the effect of which is
that asbestos-related pleural plaques do not constitute actionable harm ceases
to apply to the extent it has that effect.
(4) But nothing in this section otherwise
affects any enactment or rule of law which determines whether and in what
circumstances a person may be liable in damages in respect of personal
injuries.
2. Pleural Thickening and
Asbestosis
(1) For the
avoidance of doubt, a condition mentioned in sub-section (2) which has not
caused and is not causing impairment of a person's physical condition is a
personal injury which is not negligible.
(2) Those conditions are -
(a) asbestos-related pleural
thickening; and
(b) asbestosis.
(3) Accordingly, such a condition
constitutes actionable harm for the purposes of an action of damages for
personal injuries.
.....
3. Limitation of Actions
(1) This section applies to an action of
damages for personal injuries -
(a) in which the damages claimed consist of
or include damages in respect of -
(i) asbestos-related pleural plaques; or
(ii) a condition to which section 2 applies;
and
(b) which, in the case of an action
commenced before the date this section comes into force, has not been
determined by that date.
(2) For the purposes of sections 17 and 18
of the Prescription and Limitation (Scotland) Act 1973 ... (limitation in respect
of actions for personal injuries), the period beginning with 17 October 2007
and ending with the day on which this section comes into force is to be left
out of account.
4. Commencement and Retrospective Effect
....
(2) Sections 1 and 2 are to be treated for
all purposes as having always had effect.
(3) But those sections have no effect in
relation to -
(a) a claim which is settled before the date
on which subsection (2) comes into force (whether or not legal proceedings in
relation to the claim have been commenced); or (b) legal proceedings
which are determined before that date.
....."
[12] As
regards Scotland only,
therefore, the Act confers on pleural plaques and on two other asymptomatic
asbestos-related associated conditions the status of non-negligible and thus
actionable injury. It is true that this mirrors the position de facto
conceded in many claims over the previous twenty years or more but, given
the asymptomatic, non-disabling, non-disfiguring and non-causative nature of
these conditions, the petitioners now challenge this development as an
unwarranted contravention of the established need for real or material "damage"
in order to complete a cause of action in negligence. In this respect,
according to the petitioners, the Scottish Parliament in passing the Act has
contrived to do the opposite of many foreign legislatures which, faced with an
intolerable escalation of claims by "... the worried well", have brought in
measures to negate the actionability of pleural plaques. And, it is said, the
Parliament has done so by means of a blatant controversion of established (and
indeed agreed) medical fact.
[13] The
present challenge to the Act is advanced both at common law and under the
European Convention on Human Rights (article 6 of the Convention and article 1
of the First Protocol), and the ultimate question for determination is whether
the petitioners have made out a case sufficient to justify total or partial
reduction of the Act pursuant to the supervisory jurisdiction of the court. According
to the respondents, all branches of the petitioners' case are misconceived and
ill-founded on their respective merits; furthermore the common law challenge
is fundamentally incompetent, in respect that an Act of the Scottish Parliament
is immune from judicial review on traditional common law grounds; and in any
event the petitioners have established neither title and interest to sue at
common law, nor "victim" status entitling them to challenge the Act on
Convention grounds. A subsidiary question arises as to the entitlement of the
third to tenth respondents to appear in these proceedings.
Rothwell and
the Act
[14] Before turning to consider any of the contentious
issues which were debated before me, it will be convenient to consider in a
little detail the Rothwell decision and also the parliamentary procedure
which led up to the passing of the Act.
Rothwell
[15] At first instance (2005 EWHC 88), Holland J.
found (and the plaintiffs conceded) that asymptomatic pleural plaques could not
of themselves constitute actionable damage. However, on the view that pleural
plaques were detectable physical changes confirming the permanent penetration
of asbestos fibres into the body, and that the risk of serious disease and
associated anxiety were also caused by the defendants' alleged negligence, his
Lordship held that the aggregate of these features amounted to sufficient
damage or harm for actionability purposes.
[16] On
appeal (2006 ICR 1458), the Court of Appeal by a majority reversed that
decision, holding not only that pleural plaques could not of themselves
constitute actionable damage, but also that what had come to be known as the
"aggregation theory" could not do so either if there was no material physical
or mental injury in the first place. In dismissing the aggregation theory as
unsound, Lord Phillips of Worth Matravers CJ at paras. 61-3 of
the majority opinion held as follows:
"... We consider it plainly desirable that claimants
should not be permitted to pursue claims for trivial injuries. The fact that
negligence has produced a physiological change that is neither visible nor
symptomatic and which in no way impairs the bodily functions should not attract
legal liability...
We consider that there is obvious justification for
the policy that prevents freestanding recovery of damages for being exposed to
the risk of contracting a disease. ...
The law does not recognise a duty to take reasonable
care not to cause anxiety. ... One can readily appreciate the policy reasons for
not imposing a general duty of care not to cause anxiety. ... The difficulty of
proving anxiety, of determining the moment at which a cause of action arises
and of quantifying damages in respect of both past and future anxiety may be
reason enough for not permitting freestanding claims for this form of
prejudice. Different considerations apply in respect of psychiatric injury...".
At para. 67,
the Lord Chief Justice also observed that it would be unjust if "... the right to
recover damages should depend upon the fortuity of whether or not the
particular claimant has developed pleural plaques."
[17] The lone
dissenting voice was Smith LJ, who concluded (first) that a cause of
action should be held to arise from radiologically diagnosed pleural plaques
aggregated with the serious risks flowing from the same alleged negligence, and
(second) going beyond the judgment of Holland J., that the tissue changes
involved in pleural plaques, whether symptomatic or not, should qualify as
actionable damage on their own. In reaching this conclusion Smith LJ bore
to follow the older case of Patterson, although disagreeing with the
judge in that case as to the proper interpretation to be placed upon the views
of Otton J. in Sykes. At paras. 116-8, she explained her view that
the benign changes involved in pleural plaques should nevertheless be regarded
as an injury, or even as a disease, and at para. 135 she continued as
follows:
"In summary, I would hold that, in cases of pleural
plaques such as are found in this group of cases, the claimant's cause of
action is complete at the time when the pleural plaques have formed because, by
that time, he is already subject to appreciable risks of other serious
conditions arising from the same wrongful act. In considering whether he has suffered
material damage, it is permissible and indeed necessary to consider all the
damage that he has then suffered. The sum of the very minor physical damage
and the much more serious damage comprising the risks amounts to material,
actionable, damage."
[18] On
appeal, the House of Lords unanimously affirmed the majority decision in the
court below. In a convenient summary at para. 2 of his speech,
Lord Hoffmann said:
"Proof of damage is an essential element in a claim in
negligence and in my opinion the symptomless plaques are not compensatable
damage. Neither do the risk of future illness or anxiety about the possibility
of that risk materialising amount to damage for the purpose of creating a cause
of action, although the law allows both to be taken into account in computing
the loss suffered by someone who has actually suffered some compensatable
physical injury and therefore has a cause of action. In the absence of such compensatable
injury, however, there is no cause of action under which damages may be claimed
and therefore no computation of loss in which the risk and anxiety may be taken
into account. It follows that in my opinion the development of pleural
plaques, whether or not associated with the risk of future disease and anxiety
about the future, is not actionable injury...."
At paras. 7-8 his
Lordship went on to explain:
"... a claim in tort based on negligence is incomplete
without proof of damage. Damage in this sense is an abstract concept of being
worse off, physically or economically, so that compensation is an appropriate
remedy. It does not mean simply a physical change... consistent with ... having no
perceptible effect upon one's health or capability. ... How much worse off must
one be? An action for compensation should not be set in motion on account of a
trivial injury. De minimis non curat lex. But whether an injury is
sufficiently serious to found a claim for compensation or too trivial to
justify a remedy is a question of degree."
[19] After
describing as "unassailable" Holland J.'s finding that with pleural
plaques there was no disease, nor any impairment of physical condition,
Lord Hoffmann proceeded to dismiss the aggregation theory which had found
favour with Holland J. and with Smith LJ in the Court of Appeal. In
that connection, he concluded at para. 19 by saying:
"It seems to me, with respect, that Smith LJ
asked herself the wrong question. One is not concerned with whether the plaque
is in some sense 'injury' or (as she went on to decide) a 'disease'. The
question is whether the claimant has suffered damage. That means: is he
appreciably worse off on account of having plaques? The rare victim whose
plaques are causing symptoms is worse off on that account. Likewise, the man
with the disfiguring lesion is worse off because he is disfigured. In the
usual case, however (including those of all the claimants in these proceedings)
the plaques have no effect. They have not caused damage."
[20] Lords Scott
of Foscote, Rodger and Mance expressly allied themselves with Lord Hoffmann's
approach. At para. 68, Lord Scott in discussing the conclusion reached by
Holland J. observed:
"The judge's conclusion... that pleural plaques could
not be characterised as a disease or as an impairment of physical condition was
in part a finding of fact but also a conclusion of law. The question whether
the formation of pleural plaques suffices to complete a tortious cause of
action in negligence depends on what the law recognises as damage, not on how
medical experts may classify the condition in question. The facts, however,
lead inevitably in my opinion to the conclusion reached by the judge. Pleural
plaques are not visible or disfiguring. None of the appellants suffered from
any disability or impairment of physical condition caused by the pleural
plaques. The plaques were asymptomatic and were not the first stage of any
asbestos-related disease. The inhalation of the fibres and the formation of
the plaques involved no pain or physical discomfort. Those being the facts,
the conclusion that the presence of pleural plaques could not per se
suffice to complete a tortious cause of action in negligence is, in my opinion,
unassailable. Indeed, both before Holland J. and in the Court of Appeal
... the appellants conceded that that was so."
In his speech at
para. 87, after discussing Cartledge, Brown and other
authorities, Lord Rodger said:
"In summary, three elements must combine before there
is a cause of action for damages for personal injuries caused by a defendant's
negligence or breach of statutory duty. There must be (1) a negligent act or
breach of statutory duty by the defendant, which (2) causes an injury to the
claimant's body and (3) the claimant must suffer material damage as a result."
[21] Lord Hope,
however, came to the same overall conclusion by a slightly different route. Acknowledging
from the outset that pleural plaques were, or might be described as, an
"injury" or a "disease", his Lordship then (at paras. 38, 39 and 49) went on to
explain:
"... But the use of these descriptions does not address
the question of law, which is whether a physical change of this kind is
actionable. There must be real damage, as distinct from damage which is purely
minimal... where that element is lacking, as it plainly is in the case of pleural
plaques, the physical change which they represent is not by itself actionable.
... Pleural plaques ... are not harmful. They do not give rise to any symptoms,
nor do they lead to anything else which constitutes damage. ... In essence, they
are only indicators. They do no more than evidence exposure to asbestos."
[22] Accordingly
the approach of the majority of the appellate committee was to analyse the legal
concept of actionable damage in such a way as to exclude physiological changes
such as pleural plaques which were asymptomatic, gave rise to no disability or
disfigurement, and carried no risk of any more serious disease in the future.
Lord Hope, on the other hand, addressed the issue from the perspective of accepting
that pleural plaques might be described as "injury" or even "disease", but then
dismissing such consequences as insufficiently material to constitute
actionable damage and thereby complete a cause of action. Either way, the decision
was reached by reference to long-established legal principles, and was designed
to ensure that pleural plaques received the same treatment as other
asymptomatic, non-disabling, non-disfiguring and non-causative conditions. The
decision also proceeded on a factual basis which had been agreed between or
among the parties' respective medical experts. Yet, as the respondents pointed
out, some of their Lordships (notably Lord Hope at para. 59, Lord
Scott at para. 74 and (by implication) Lord Rodger at para. 84)
went so far as to indicate disquiet at the outcome as if, perhaps,
acknowledging that the claimants ought not to be left without a remedy. In
that context, Lords Hope and Scott both canvassed the possibility that a claim
based on breach of contract, rather than on the tort of negligence, might have
stood a greater chance of success.
The
legislative process
[23] Very shortly after the decision in Rothwell
was issued, the Lord Ordinary (Lord Uist) in Wright v Stoddard
International plc (No. 2) 2008 RepLR 37 bore to follow it even though the
test cases raised in England and Wales had been determined according to English
law. This was not altogether surprising, since the law of negligence is generally
regarded as the same both north and south of the border, but since the
pursuer's case had already been rejected on other grounds the
Lord Ordinary's remarks on Rothwell must be regarded as obiter.
[24] Less
than a fortnight later, as disclosed by production 6/54/1-4, there was
circulated the seventh draft of a Bill ".... intended to reverse" the decision of
the House of Lords in Rothwell. That draft appears to have been
prepared by Messrs Thompsons,
solicitors, who have for many years handled a large proportion of pleural
plaques claims in Scotland and
who now represent the third to tenth respondents in these proceedings. At that
stage, the approach of the draft Bill was to declare various asbestos-related
conditions to be "personal injury" for the purposes of a series of statutes.
[25] On 7 November 2007, the draft Bill was revealed
to the Scottish Parliament in connection with a motion, passionately debated,
which expressed concern regarding the House of Lords ruling. On
29 November 2007, the Cabinet Secretary for Justice (Kenny MacAskill, MSP)
wrote to Messrs Thompsons (production
6/54/22) confirming that the Scottish Government had decided to introduce a
Bill "... to reverse the Judgment and enable those negligently exposed to
asbestos who have been diagnosed with pleural plaques to continue to be able to
raise and pursue actions for damages in Scotland". The Scottish Government's
news release of that date was then the subject of a ministerial statement to
the Parliament on 13 December 2007.
[26] By this
stage, the Scottish Ministers had apparently undertaken no formal consultation
process with regard to their stated intention to legislate. The first reference
to any consultation came on 6 February 2008, but that related, not to the principle of the Bill, but to a
Partial Regulatory Impact Assessment (production 6/21) which had been
prepared. Significantly, the covering letter sent out to consultees contained
the following passage:
"The HoL Judgment ruled that asymptomatic pleural
plaques do not give rise to a cause of action under the law of damages. This
Judgment is not binding in Scotland, but is highly persuasive and has already
been cited in a Court of Session case.
The believes (sic) that people who are
negligently exposed to asbestos and who go on to develop pleural plaques should
continue to be able to raise an action for damages in Scotland. It proposes to
enable them to do so by bringing forward a Bill to this effect. It is possible
that the courts might look to the HoL Judgment in (Rothwell) as
authority in relation to claims in respect of other asymptomatic
asbestos-related conditions...
Scottish Ministers do not wish this to happen. ...".
The extensive list
of consultees comprised a number of insurance companies including the
petitioners, together with a variety of other bodies and individuals. However,
it included no company or concern against whom pleural plaques proceedings had
been raised in court, nor did it include the Scottish judiciary at any level.
[27] According
to the title page of the Partial RIA, it related to a "PROPOSED BILL TO REVERSE
HOUSE OF LORDS JUDGMENT IN (Rothwell)", and paragraph 9 confirmed the
Scottish Government's objective to ensure (i) that the judgment did not have
effect in Scotland, and (ii)
that pleural plaques remained an actionable injury in Scots law. At paragraph 22
the proposal was said to have implications
"... for defenders in pleural plaques cases, ie
employers and former employers in the relevant sectors, their insurers, the
Scottish Government, and some UK Government Departments who have responsibility
for liabilities in relation to cases arising from exposure to asbestos during
the pursuers' ... employment in former nationalised industries."
According to paragraph
23 the Bill would not create any new liability that did not exist before the Rothwell
test cases were brought before the courts, but paragraph 24 acknowledged
that there would be savings to insurers and employers if the Scottish
Government were to take no action. For the estimated 630 claims already
outstanding (described at paragraph 8 as comprising "... approximately 250
actions currently sisted by the courts and roughly 380 ... backed up with
solicitors"), the cost to insurers was estimated at around £10,080,000, with a
recurring annual cost thereafter of around £3,200,000 including expenses. The
possibility of consequential rises in insurance premiums was raised in
paragraph 28.
[28] On 23 June 2008 the promised Bill (production 6/23)
was introduced into the Parliament along with explanatory notes (production
6/24) prepared by the Scottish Government. Observing that the judgment in Rothwell
"... is not binding in Scotland,
but is highly persuasive", the notes confirmed that the purpose of the Bill was
to ensure that the judgment did not have effect in Scotland and that people with pleural plaques caused by wrongful exposure to
asbestos could raise an action for damages. As regards retrospective effect
under section 4(2), paragraph 9 explained that this was necessary "... in
order to fully address the effect of the judgment in (Rothwell), because
an authoritative statement of the law by the HoL is considered to state the law
as it has always been". The notes made no reference at any point to a desire
to engage the contractual obligations of indemnity insurers under past
policies. A financial memorandum then followed, confirming considerable
uncertainty as to the number and value of pleural plaques claims which were
likely to arise in the future, but at the same time suggesting that
conservative estimates advanced by Messrs Thompsons might be worthy of reliance. At paragraph 25 it was again confirmed
that the Bill would have implications for employers and former employers in the
relevant sectors and for their insurers. There would, it was said, be savings
to insurers and employers if no action were taken.
[29] In the
Scottish Government's subsequent Policy Memorandum (production 6/25), the
uncertain financial impact of the Bill was acknowledged. Paragraph 15 of
the Memorandum confirmed that "The HoL Judgment was concerned with asymptomatic
pleural plaques. Ensuring that this condition is actionable in Scotland is the primary intention of the
legislation." Other asymptomatic asbestos-related conditions were also to be
included, and the retrospective effect of the Bill was confirmed. Scottish
Ministers remained convinced that the Bill was required "... to ensure that the
HoL Judgment does not have effect in Scotland", and in paragraph 25 it was stated that
"... pleural plaques are irreversible scarring on the
lining of the lungs which the Scottish Government considers should be treated
as a material personal injury for which damages may be awarded. The anxiety
felt by people with pleural plaques comes from the known risks associated with
asbestos".
Annex A bore
to deal, in tabular form, with certain points raised during the consultation on
the Partial RIA. As regards medical evidence, the Government were said to be
fully aware of the asymptomatic, non-disabling and non-causative nature of
pleural plaques. Nevertheless, "... plaques are irreversible scarring to the
lining of the lungs and what they signify (ie significant exposure to asbestos)
causes great anxiety to those diagnosed and their families." The Annex went on
to state that the Bill would make the minimum incursion into the law; that it
would have no effect beyond the three specified asbestos-related conditions;
that the Bill was retrospective
"... to fully overrule the effect of (the Rothwell judgment) and in order
to maintain the coherence of the law"; and that there was no discrimination
against exposed individuals without pleural plaques, since only the latter
constituted a definite physical manifestation of exposure to focus anxiety and
to found a claim. It would be inappropriate to describe people with pleural
plaques as the "worried well", since they had a physical, permanent change in
their lungs indicating that their risk of developing serious asbestos-related
disease was "... significantly higher than the general population." As regards
jurisdiction, it was accepted that forum-shopping might be attempted, but the
Government maintained '... that established rules of jurisdiction and applicable
law will ensure that only cases with a substantial Scottish connection will be
tried in Scottish courts under Scots law'.
[30] By
comparison, the initial approach of the UK Government at Westminster was rather more cautious. As
disclosed in their consultation paper (production 6/38), they were
concerned about possible interference with fundamental principles of law;
about potential risks on the ECHR front; and about the setting of a precedent
for other cases involving no material damage. However, by the conclusion of
the hearing before me in October 2009, a private member's Bill in terms not
dissimilar to the 2009 Act was apparently pending at Westminster. The MP promoting the Bill was said to be a former partner of
Messrs Thompsons, solicitors,
and the Bill had made favourable progress beyond a third reading in the House
of Commons. A proposal for legislation along comparable lines was also said to
be under discussion in Northern Ireland.
[31] On 2 September 2008, the Justice Committee of the
Parliament held a meeting at which evidence was taken from inter alios representatives
of the insurance industry and of the medical profession. The former group
expressed concerns regarding any change that might increase costs in an
unexpected way, and described a retrospective change in the law as a "worrying
development". Questions were asked about the future level of insurance
premiums, but no-one focused on the effect of retrospective changes on past
indemnity policies. Insurers' representatives also claimed entitlement to ask
the court about their legal position in the pending cases, but the view of one
member of the committee was
"Surely if the Bill is passed, we would only be
restoring it to the condition in which you thought you were underwriting
business prior to the House of Lords Judgment. We are not proposing to change
the law under your feet."
[32] On 9 September 2008 a further meeting of the
Committee took place. When further medical witnesses did not appear, evidence
was taken from Fergus Ewing MSP, Minister for Community Safety. At page 2 of
the transcript of that meeting (production 6/27), the Minister confirmed that
there was no dispute on the medical evidence, but maintained that since "... a
right to damages" had been an established feature for the past twenty years,
the Government believed that pleural plaques were not a trivial injury and that
those who developed them as a result of negligent exposure to asbestos "... should
still be able to claim damages". At page 3, when challenged about the
lack of normal consultation procedures, he replied "... As you say, the
Government proceeded with a great deal of swiftness. We have of course
consulted insurers and stakeholders ..." and went on to mention a consultation
from February to April on the Partial RIA. He also sought to criticise as
incredible the insurance industry's recent estimates of the financial impact of
the proposed legislation running into billions of pounds. On the subject of
medical evidence, the Minister (at page 5 and subsequently) explained: "We are
not overturning (that) evidence ... We are placing a different interpretation on
the evidence. We feel that pleural plaques are not, in themselves, trivial..." At
page 6, the Bill's purpose and scope were said to be restricted. Awarding
damages for anxiety and risk alone had never been part of the law of delict,
but physical manifestation of exposure, in the form of pleural plaques, would
become a focus for such anxiety. The Bill was designed purely to restore the
right of action to those who enjoyed that right before, and the Government's
disagreement with the House of Lords related only to the perceived seriousness
of pleural plaques as an injury. Litigation costs were, however, recognised at
page 14 as a cause for concern, and at page 17, quoting from the
earlier financial memorandum (production 6/24), the Minister estimated the
annual cost of settling pleural plaques claims at £5.5-6.5 million.
[33] In the
report which followed these meetings (production 6/28) the Justice Committee at
paragraph 50 recorded that:
"... the policy behind the Bill is to make sure that
people negligently exposed to asbestos in Scotland who go on to develop an
asymptomatic asbestos-related condition can pursue an action for damages. The
means of achieving this is by ensuring that the House of Lords judgment in (Rothwell)
does not have effect in Scotland as regards these conditions."
At paragraph 69,
the Committee noted that among the many consultation responses was one from
Andrew Smith, QC to the following effect:
"... Members of the public, and commercial
organisations, should be able to know what their rights are at the time that
they assume obligations and those rights. The matter arises very sharply in
this very case. Insurers entered into contracts of insurance. They did so on
a footing that they would not be liable unless there was an injury as properly
understood. When they challenged the decision of Mr Justice Holland, they
were successful and the judgments of the House of Lords vindicated their
position. They knew where they stood. But they are now faced with the
Government effectively acting as a further court of appeal above the House of
Lords. The contracts of insurance that they entered into are being re-written
by the Government".
However, the point
thus made attracted no response or comment in the Committee's report, and it
was concluded (at paras. 86 and 112) that the Bill represented a proportionate
response to the House of Lords judgment, and that there were "... compelling
grounds" to legislate in this way.
[34] As
regards the financial impact of the Bill, the Committee at paragraphs 119-122
recognised a major discrepancy between the Government's cost estimates and
those advanced by the insurance industry. After valuing existing cases at an
overall cost of £17.125 million, the former mentioned annual figures of £5.5-6.5
million thereafter. According to the latter, however, the annual cost in Scotland would (as a proportion of UK
Government figures) be between £76 million and £607 million. The total cost in
Scotland could be as high as
£8.6 billion, and the UK Government figure for pleural plaques cases was
potentially as high as £28.64 billion. The insurance industry were also
concerned about the likelihood of significant future increases in the number
and value of pleural plaques claims. At paragraph 136, the Committee
expressed the view that the Scottish Government might have underestimated the
costs, while the insurance industry had probably done the opposite. The
Government were invited to give further consideration to the likely financial
impact of the Bill, so that a fair indication of likely costs could be given to
the Parliament.
[35] On 5 November 2008, as reported in production 6/29,
the Parliament debated and approved the general principles of the proposed
legislation. Various amendments to the Bill were then tabled, and it was while
these were pending that certain correspondence took place between Messrs Thompsons, on the one hand, and the
Scottish Government on the other. On 28 November 2008, in response to a
letter from Thompsons three
days earlier suggesting new alternative amendments which would inter alia
restrict the ambit of the Bill to the law of delict, Paul Allen, head of the
Damages and Succession Branch of the Constitution, Law and Courts Directorate,
Civil Law Division, wrote a letter (production 6/54/80) in inter alia
these terms:
"I appreciate the further consideration that you and
your colleagues have given to these matters. Regrettably, however, we still
perceive potential difficulties with what is suggested. As one example, we are
concerned that there is a risk that, if we specify on the face of the Bill that
its provisions are for the purposes of the law of delict, defenders may seek to
argue that there is no read-across to other areas of law, eg. the
interpretation of contracts. This could place a significant barrier in the way
of many potential claimants, if it were argued that it leaves pursuers with a
delictual claim against an employer that is not covered by the employer's
insurance policy. It is a pity that a meeting to discuss such issues could not
take place before amendments were lodged on 25 November, especially as the
process of disclosing our concerns to the committee may also result in those
concerns being drawn to the attention of those who may wish to utilise them in
opposing claims for compensation, contrary to our intention and yours. Of
course, we will endeavour to avoid that consequence so far as possible, but it
is not entirely in our hands."
On its face, that
letter touched on the concerns previously raised by Andrew Smith, QC and
mentioned by the Justice Committee at paragraph 69 of their report, and according
to the petitioners revealed a hidden objective of the Bill on which the
Government had sought to suppress discussion. No such objective, they said, was
disclosed at any stage of the legislative history from November 2007 onwards.
[36] On 2 December 2008, the Justice Committee debated
the proposed amendments to the Bill. At pages 7-9 of the transcript
(production 6/31), the Minister (Fergus Ewing MSP) responded to proposed
amendment 1 which would expressly limit the Bill to the law of delict. In
essence, that response was to the effect that an express reference to the law
of delict was unnecessary, and could be unhelpful. Defenders, it was said, "...
may use it to argue that the legislation's scope had been narrowed so that it
applied only to delictual matters, not to associated areas of law, and to
frustrate the claims that we all want to facilitate". Amendments 1 and 4 were
undesirable, the former "... because it would risk creating confusion and
uncertainty where we all wish there to be clarity". According to the Minister,
he had spelled out the "mischief" that was feared to arise from the current
versions of the amendments, and had indeed explained the Government's thinking
at greater length than usual. At the conclusion of the debate, amendment 1
was by agreement withdrawn, and the other amendments were not moved. That
brought to an end the consideration of the Bill at stage 2.
[37] On 25 February 2009, the Minister wrote to the
Committee with a re-assessment of the financial implications of the Bill
(production 6/32). It was conceded that the Government's annual figures
of £5.5-6.5 million related only to private sector defenders, and thus did not
represent a projection of the full annual costs associated with the Bill. New
data suggested that peak annual figures might fall within a range having a
mid-point of £13.02 million, with overall costs of up to £131.31 million. The
number of claims currently "backed up" was now estimated (in Annex F) at
between 690 and 1040 of which a proportion would fail. However, even with
actuarial assistance from a long-standing UK Government working party, it was
difficult to obtain reliable estimates of numbers or of cost, not least because
of the sensitivity of such data to the insurance industry. At paragraph 19
of Annex E, it was said that if Scotland's share of all UK claims
was reduced to 10% from the 30% previously estimated, then the insurance
industry's projection of annual costs might be reduced to between
£25 million and £202 million per annum. Such a range reflected the
degree of significant uncertainty surrounding the large number of variables
within the underlying model employed by the Ministry of Justice, and it was
thought that this range might even have been wider still. In conclusion, the Minister's
letter (at p. 4) acknowledged the inherent uncertainty in this area while
maintaining that, in all the circumstances, the Government had produced "... the
most thorough Scotland-specific projection of the financial implications of
ensuring that the civil justice system preserves rights of redress in relation
to asymptomatic asbestos-related conditions." While reassessment of costs was
no doubt justified, the "principled and just position" was "... that individuals
with pleural plaques should retain the right to pursue compensation where their
condition has arisen as a result of another's negligence exposing them to the
potentially lethal substance of asbestos."
[38] Thereafter
matters proceeded to stage 3 of the parliamentary process, and the Bill was
formally passed by the Parliament on 11 March 2009. A revised financial
memorandum at that point (production 6/34) appeared to suggest slightly
reduced Government estimates for annual and overall costs, while (at paragraph 29)
merely noting that higher costs were anticipated by the insurance industry and
might be reflected in premiums. In debate (as recorded in
production 6/36) the Minister confirmed that the intended purpose of the
Bill was "... to keep things as they have been for the past 20 years"; referred
to the earlier cost estimates in production 6/32; and repeated concerns
about the level of legal fees involved. Conservative MSPs expressed concern that
significant financial implications for both the private and the public purse had
never been resolved, and suggested that the Parliament could not be satisfied
with the financial aspects of the Bill. On that basis, the Conservatives were
unable to support the legislation. In a final response, the Minister said inter
alia:
"If perfection in future estimated costs was a sine
qua non of legislation, there would not be any negligence legislation, any
compensation for personal injury or any right of recourse to the courts. It
seems to me that, wittingly or otherwise, the Conservatives have set up an
impossibly high hurdle - a kind of 30ft fence that the high-jump team now has
to jump over in passing any legislation.
With respect, I point out to my Conservative
colleagues that, two weeks ago - on the same day that Parliament debated action
on mesothelioma day - an insurance company announced that it had made £759
million in pre-tax profits in a single year. I have nothing against profits,
but that is pretty high. Equally, an ABI statement
declared that the UK insurance industry contributed £9.7
billion in taxes in a single year. In that context, I hope that Bill Aitken
agrees that our estimates of the Bill's financial implications may not seem too
daunting."
The Minister then
concluded by expressing his delight and pride, on behalf of the Scottish
Government, to move the passage of the Bill "... and to defend and confirm the
right of access to justice for those who have been negligently exposed to
asbestos and have sustained injury as a result." When the matter was
eventually put to a division, 98 members voted in favour of the Bill, with only
the 16 Conservative members voting against it.
[39] The new
Act duly received the Royal Assent on 17 April 2009, and by virtue of the
relevant commencement order was brought into force on 17 June 2009.
II. The petitioners' locus standi
Introduction
[40] A fiercely contested preliminary issue concerns the petitioners'
entitlement to pursue any of their challenges to the 2009 Act, whether at
common law or under the European Convention on Human Rights. For domestic
purposes the relevant concepts are those of title and interest, whereas under
the Convention (and as specifically required by section 7 of the Human Rights
Act 1998 and section 100(1) of the Scotland Act 1998) it is the autonomous
concept of "victim" status under article 34 which must be addressed. The
petitioners, it is said, fall well short of qualifying on either front, and the
respondents accordingly seek dismissal of the petition without reference to the
merits of the claims advanced.
[41] As
previously noted, the petitioners' common law challenge to the 2009 Act on
irrationality grounds is also alleged to be fundamentally incompetent.
According to the respondents, an Act of the Scottish Parliament is not under
any circumstances susceptible to judicial review on traditional common law
grounds, no matter at whose instance proceedings may be brought. By contrast,
the competency of challenging an Act of the Scottish Parliament as
Convention-incompatible is not here in dispute having regard to the express
terms of section 29(1)(d) of the Scotland Act 1998. With that in mind I
propose to begin by considering the issue of "victim" status under the
Convention.
Article 34
considerations
[42] Article 34
of the European Convention on Human Rights confers title to pursue claims and
challenges before the Court upon:
".... any person, non-governmental organisation or group
of individuals claiming to be the victim of a violation by one of the High
Contracting Parties of the rights set forth in the Convention or the Protocols
thereto."
The article concludes
with an undertaking by the High Contracting Parties not to hinder in any way
the effective exercise of that entitlement.
[43] In
construing these provisions, the Strasbourg Court has approached the matter from a number of different angles. In
the first place, there is a wealth of authority affirming and re-affirming
the general rule that a person claiming to be the victim of a violation must be
"directly affected" by the particular measure, act or decision of which he
complains. For this purpose, membership of a class at risk of being directly
affected by the matter complained of will be deemed sufficient. A typical
formulation may be found in the Court's decision in Sisojeva v Latvia
2007 45 EHRR 33, at para. 92:
"... the Court reiterates that the word 'victim' in the
context of Art. 34 of the Convention denotes the person directly affected
by the act or omission in issue. In other words, the person concerned must be
directly affected by it or run the risk of being directly affected by it."
Similarly, in Burden
v United Kingdom 2008 47 EHRR 38, the Court observed (at
paras. 33-34):
"The Court recalls that, in order to be able to lodge
a petition in pursuance of Art. 34, a person, non-governmental association
or group of individuals must be able to claim 'to be the victim of a violation...
of the rights set forth in the Convention.' In order to claim to be a victim
of a violation, a person must be directly affected by the impugned measure ... It
is, however, open to a person to contend that a law violates his rights, in the
absence of an individual measure of implementation, if he is required either to
modify his conduct or risk being prosecuted or if he is a member of a class of
people who risk being directly affected by the legislation. Thus in (Marckz
v Belgium) 1979-80 2 EHRR 330 the applicants, a single mother and her
five-year-old 'illegitimate' daughter, were found to be directly affected by,
and thus victims of, legislation which would, inter alia limit the
child's right to inherit property from her mother upon the mother's eventual
death, since the law automatically applied to all children born out of
wedlock."
In the last-mentioned case, the applicants were held to be "directly
affected" by the legislation of which they complained and therefore entitled to
allege discriminatory treatment contrary to the Convention. At para. 27
of the Court's judgment, the position was explained in this way:
"Paula and Alexandra Marckz can ... 'claim' to be
victims of the breaches of which they complain. In order to ascertain whether
they are actually victims, the merits of each of their contentions have to be
examined."
[44] Second, looking to the other side of the coin, it is clear
that a person only indirectly affected by the subject matter of his complaint
does not qualify unless in exceptional circumstances, notably where it is
impossible for the party primarily affected to come to court. Claims and
challenges in abstracto are not admissible, nor does the Court recognise
anything in the nature of an actio popularis
at the instance of someone who has no greater or different interest by
comparison with any other member of the general public. As stated in Vatan
v Russia 2006 42 EHRR 7, at para. 48:
"The Court recalls that the term 'victim' used in
Art. 34 denotes the person directly affected by the act or omission which
is at issue. It further recalls that accepting an application from a 'person'
indirectly affected by the alleged violation will be justified only in
exceptional circumstances, in particular where it is clearly established that
it is impossible for the direct victim to apply to the Court ..."
Along comparable lines, in The Christian Federation of Jehovah's
Witnesses of France v France (Non-admissibility Decision, 6 November 2001), it was affirmed:
"... that Article 34 of the Convention
requires that an individual applicant should claim to have been actually
affected by the violation he alleges. That Article does not institute for
individuals a kind of actio popularis for the interpretation of the
Convention; it does not permit individuals to complain against a law in
abstracto simply because they feel that it contravenes the Convention. In
principle, it does not suffice for an individual applicant to claim that the
mere existence of a law violates his rights under the Convention; it is
necessary that the law should have been applied to his detriment..."
In the same case,
the Court went on to acknowledge that a potential victim might yet qualify, but
only on production of "... reasonable and convincing evidence of the likelihood
that a violation affecting him personally (would) occur; mere suspicion or
conjecture (being) insufficient in this respect." And in the Burden
case already cited, the Court noted:
"The Convention does not ... envisage the bringing
of an actio popularis for the interpretation of the rights set out
therein or permit individuals to complain about a provision of national law
simply because they consider, without having been directly affected by it, that
it may contravene the Convention."
[45] Third, since issues for determination in this area are
necessarily fact-specific, the criterion for admissibility "... is not to be
applied in a rigid, mechanical and inflexible way throughout the proceedings":
Gakiyev & Gakiyeva v Russia (First
Section Judgment of 23 April
2009, at para. 162). Since
the rights guaranteed by the Convention are intended to be practical and
effective, each case falls to be judged by reference to the reality and
substance of the applicant's situation. Thus in Stran Greek
Refineries & Another v Greece 1994 19 EHRR 293, where the
complaint under article 6 concerned retrospective legislation allegedly
interfering with a pending court action, the Court (at para. 47) took
particular note of the fact that the legislation in question "... was in reality
aimed at the applicant company - although the latter was not mentioned by
name". Similarly, in National & Provincial Building Society &
Others v United Kingdom 1998 25 EHRR 127 (at para. 111), the Court
laid stress on the fact that judicial review proceedings with which legislation
had allegedly interfered "... were in reality a next stage in the struggle with
the Treasury and a deliberate strategy to frustrate the original intention of
Parliament".
[46] The same approach is evident in connection with claims made under
article 1 of the First Protocol:
"In the absence of a formal expropriation, that is to
say a transfer of ownership, the Court considers that it must look behind the
appearances and investigate the realities of the situation complained of.
Since the Convention is intended to guarantee rights that are 'practical and
effective', it has to be ascertained whether that situation amounted to a de
facto expropriation, as was argued by the applicants.": Sporrong &
Lönnroth v Sweden 1982 5 EHRR 35 (at para. 63) ...
"... a first question that arises in this case is
whether the applicants ever enjoyed a right to develop the land in question
which could have been the subject of an interference. ...
Like the Commission, the Court considers that this
question must be answered in the affirmative. When Pine
Valley purchased the site, it did so in reliance
on (a grant of outline planning permission) which had been duly recorded in a
public register ... and which it was perfectly entitled to assume was valid.
That permission amounted to a favourable decision as to the principle of the
proposed development, which could not be re-opened by the planning authority.
In these circumstances it would be unduly formalistic to hold that the Supreme Court's decision (holding the permission to be null ab
initio) did not constitute an interference. Until it was rendered, the
applicants had at least a legitimate expectation of being able to carry out
their proposed development and this has to be regarded, for the purposes of
Article 1 of Protocol No. 1, as a component part of the property in
question": Pine Valley Developments Limited & Others v Ireland
1992 14 EHRR 319 (at para. 51)...
"By 'victim' Article 34 means the person directly
affected by the act or omission which is in issue, a violation being
conceivable even in the absence of any detriment... ... the applicants were
directly affected by (an Ordinance and administrative decisions prohibiting
cable transmission of broadcasts which came from outside Switzerland).
Admittedly, those were not formally directed at the applicants, who continued
to broadcast over the air freely, but their effects were fully felt by them ...
Since (the ban on cable transmission) the applicants lost an appreciable proportion
of their usual audience...". Groppera Radio AG & Others v Switzerland 1990 12 EHRR 321 (at paras. 47-8).
[47] Fourth, as the Court (Second Section) explained in Terem
Limited & Others v Ukraine (Decision notified on 18 October 2005, at para. 28):
"The concept of 'victim' in Article 34 must be
interpreted autonomously and independently of domestic law concepts, such as a
capacity to bring or take part in legal proceedings".
And fifth, from a procedural perspective, issues arising under
article 34 tend to be dealt with as preliminary questions of
"admissibility", bearing in mind that (as the Court pointed out in cases such
as Burden and Marckz, cited at paragraph [43] above) the article
confers title on a person "claiming" or "able to claim" to be the victim of a
violation. As the respondents accepted in the debate before me, this reflects
the fact that a claim deemed admissible under article 34 may yet
ultimately fail on its merits. Groppera Radio (article 10), Pine Valley and Burden (article 1 of the
First Protocol), and National & Provincial Building Society
(article 6) are examples of cases in that category. A claim to "victim"
status should not therefore be confused with success in establishing a
substantive violation in due course, since for initial admissibility purposes
it is only the requirements of article 34 that are truly in issue. Sometimes a
preliminary question of this kind may be capable of resolution in limine,
but for obvious reasons that may not always be possible and a decision may need
to await inquiry into the substantive claim or claims advanced. In this
context article 35 may have a role to play, since it enjoins inter alia
the dismissal of any application judged to be "... manifestly without reasonable
foundation".
[48] Taking all
of these considerations into account, it may be said with some confidence that,
as construed by the Strasbourg Court, article 34 focuses attention on the
real and practical effects of a challenged measure, act or decision, with the
corresponding objective of excluding claims which are remote, tenuous, academic
or theoretical. On remoteness grounds, for instance, mere shareholders or
directors cannot ordinarily pursue Convention claims or challenges in respect
of losses, or the consequences of losses, sustained by a company as the primary
victim: cf. Terem; Agrotexim v Greece 1996 21
EHRR 250; Meltex Limited & Another v Armenia, 17 June
2008. Next-of-kin cannot ordinarily assert Convention rights in place of a
living claimant, and even existing proceedings may not transmit to relatives
upon an original claimant's death: cf. Biç v Turkey 2007
44 EHRR 38; Fairfield & Others v United Kingdom 24790/04,
ECHR 2005 - VI. Purely tenuous interests are excluded: cf. Terem;
Ringeisen v Austria
(No. 1) 1979-80 1 EHRR 455; Le Compte, Van Leuven & Another v Belgium 1982 4 EHRR 1. And, along
similar lines, complaints under article 6 regarding deficiencies in court
proceedings cannot in general be maintained by anyone not directly involved as
a party: cf. Meltex (at para. 66); Zaytsev &
Others v Russia,
First Section Judgment, 25 June 2009 (at para. 36); Kugler v Austria, Decision, 27 November 2008; Øvlisen v Denmark, Decision, 30 August 2006.
[49] All of
these general rules are, however, qualified to a greater or lesser degree.
Even in "shareholder" cases, the Court has frequently acknowledged that "exceptional
circumstances" may allow a more favourable view to be taken of apparently
remote claims; cf. Agrotexim; Meltex; Vatan (at para. 48). For
example, as confirmed in Meltex (at para. 66) and other cases, a
sole shareholder may be accorded "victim" status relative to the affairs of his
company. In certain circumstances also, depending in particular on the nature
of the claim, applications by next-of-kin may be held admissible. In
"exceptional circumstances" even potential or prospective claims may qualify
for "victim" status, and the same may apply where a person is only indirectly
affected by the subject-matter of a complaint: cf. Burden; Sisojeva; Jehovah's
Witnesses; Vatan. Perhaps most significantly for present purposes, the
phrase "... directly affected" has repeatedly received a broad and pragmatic interpretation
from the Court: cf. Groppera Radio and Burden in particular. In
the latter case, the applicants complained that one or other of them might have
to pay inheritance tax on their late sister's interest in a house which they
had all shared. According to them, the relevant fiscal legislation was
discriminatory against siblings because no such liability would have arisen on
the death of a spouse or civil partner. In concluding, against strenuous
Government opposition, that the applicants were "... directly affected" and thus
had title to pursue a challenge under article 14 taken together with article 1
of the First Protocol, the Court (after making the statements of general
principle quoted in paragraphs [43] and [44] above) said:
"In the present case, the Grand Chamber agrees ... that,
given the applicants' age, the wills they have made and the value of the
property each owns, the applicants have established that there is a real risk
that, in the not too distant future, one of them will be required to pay
substantial inheritance tax on the property inherited from her sister. In
these circumstances the applicants are directly affected by the legislation and
can claim to be victims of the alleged discriminatory treatment."
[50] Self-evidently
the context in which a party claims "victim" status is a relevant and material
consideration. In Burden, the main issues for determination (on which
the surviving sisters ultimately failed) were (i) whether the legislation in
question discriminated against them for the purposes of article 14; and (ii)
whether it could be said to interfere with the peaceful enjoyment of their
"possessions" for the purposes of article 1 of the First Protocol. In
that latter connection, the concept of "possessions" has received a wide and
flexible interpretation extending to many forms of asset having economic
value. For example, article 1 may prima facie be engaged where
deprivation of a claim is threatened, that is, by the risk of legitimately
expected gain being denied:
"... The Court takes the view that where the proprietary
interest is in the nature of a claim it may be regarded as an 'asset' only
where it has a sufficient basis in national law, for example, where there is
settled case law of the domestic courts confirming it": Maurice v France
2006 42 EHRR 42 (at para. 66)...
"Thus, where a proprietary interest is in the nature
of a claim, the person in whom it is vested may be regarded as having a
'legitimate expectation' if there is a sufficient basis for the interest in
national law, for example where there is settled case law of the domestic
courts confirming its existence": Anheuser-Busch Inc v Portugal
2007 45 EHRR 36 (at para. 65)...
"... For a claim to be considered an 'asset' falling
within the scope of Article 1 of Protocol No. 1, the claimant must
establish that it has a sufficient basis in national law, for example, where
there is settled case law of the domestic courts confirming it or whether (sic)
there is a final court judgment in the claimant's favour ...": Driza v
Albania (Fourth Section, 13 November 2007, at para. 102).
Conversely, as in Burden,
Marckx, Pine Valley and
other cases, article 1 may be engaged by the risk of existing funds or
other assets being lost or sterilised. But in all such cases the qualifying criterion
for claimed "victim" status, and hence initial admissibility, is whether a
party's interest in the subject-matter of an intended complaint is sufficiently
direct and personal to take it beyond the merely remote, tenuous, academic or
theoretical.
[51] Similarly
the scope of article 6 has been widely interpreted so as to cover many
forms of threatened interference with the independent and impartial
determination of proceedings which are potentially decisive of a party's civil
rights and obligations. Once more, the threshold question is whether the effects
of alleged interference are sufficiently direct to qualify the applicant as a potential
"victim".
Common law
considerations
[52] Turning now to the common law aspects
of these proceedings, the petitioners assert title and interest to be heard on
the questions (i) whether, as a matter of competency, an Act of the Scottish
Parliament is susceptible to judicial review on traditional grounds; and (ii)
if so, whether the 2009 Act should be reduced on the ground of irrationality. From
a domestic legal standpoint it seems to me that the relevant principles are not
at all dissimilar to those which govern claims to "victim" status under the
Convention, and that this may perhaps be seen as an acceptable - even desirable
- end result where challenges to the Act are advanced on both common law and
Convention grounds.
[53] Familiar
domestic textbook authority is generally along the lines that questions of
title and interest should be approached on a broad, pragmatic basis, and I was
referred to many judicial dicta to the same effect. D & J Nicol v
Dundee Harbour Trustees 1915 SC HL 7 was a case in which the pursuers
sought to challenge a new initiative by the defenders which allegedly harmed
their local steamer excursion business. It was held that, while their status
as trade competitors could not found such a challenge, they could competently
sue as harbour ratepayers and thus as persons entitled to insist on a proper
exercise of the trustees' fiduciary duties. The speech of Lord Dunedin at
pp. 12-13 contained these much-quoted general observations:
"By the law of Scotland a litigant, and in particular a pursuer, must always qualify title and
interest. Though the phrase 'title to sue' has been a heading under which
cases have been collected from at least the time of Morison's Dictionary and
Brown's Synopsis, I am not aware that anyone of authority has risked a
definition of what constitutes title to sue. I am not disposed to do so, but I
think it may fairly be said that for a person to have such title he must be a
party (using the word in its widest sense) to some legal relation which gives
him some right which the person against whom he raises the action either
infringes or denies. ... If any persons are in such a relation as to constitute
them trustees, or if, without being technically trustees, they have a fiduciary
duty to others, those persons to whom they owe a fiduciary duty will have a
title to sue to prevent the infringement of that duty."
And with regard to
the circumstances of that particular case, his Lordship (at p. 17) went
on:
"(But) when I find that the respondents in the
capacity of harbour ratepayers are members of the constituency erected by the
Act of Parliament to elect the trustees, and as such are also persons for whose
benefit the harbour is kept up, I cannot doubt that they have a title to
prevent an ultra vires act of the appellants, which ultra vires
act directly affects the property under their care. It is not only that loss
of that property through improper acting may have the effect of imposing
heavier rates on the respondents in the future, but in the words of Lord
Johnston in the Stirling County Council case, as they have contributed
to the funds which bought the property, 'they have an interest in the
administration of a ... fund to which they have contributed', and a title flowing
from that position and interest."
[54] In Wilson
& Others v Independent Broadcasting Authority 1979 SC 351, the
issue was whether the pursuers were entitled to challenge the political balance
of certain TV broadcasts in advance of a referendum, and again on a broad
practical footing the court's decision went in their favour. There was no
reason in principle, it was held, why an individual should not sue in order to
prevent a breach by a public body of a duty owed by that public body to the public,
provided he could qualify an interest. At pp. 356-7, the Lord Justice
Clerk (Lord Ross) said:
"... I see no reason in principle why an individual
should not sue in order to prevent a breach by a public body of a duty owed by
that public body to the public. It may well be that the Lord Advocate could be
a petitioner if the interests of the public as a whole were affected..., but I
see no reason why an individual should not sue provided always that the
individual can qualify an interest.
...
Having considered the petitioners' averments, I am of
the opinion that the petitioners have averred sufficient interest.
(1) They are voters and the Referendum gives
them the choice to say 'Yes' or 'No'.
(2) They belong to an organisation or group
who apparently believe that the question should be answered 'No'.
(3) It is implicit in the name of the
organisation or group that the petitioners wish to persuade other voters to
vote 'No'.
It is plain from the petition and the answers that the
petitioners and the political parties believe that the programmes are likely to
be influential upon the electorate in Scotland, and if
that is so, the petitioners have an interest to see that the respondents do not
act in breach of any statutory duties in relation to such programmes."
[55] More
recently, in the context of a petition for judicial review, the
Lord Ordinary (Lord Clarke) in Rape Crisis Centre v SSHD
2000 SC 527 again approached the issues of title and interest to sue on a broad
and flexible basis. After referring to Lord Dunedin's dictum in Nicol,
his Lordship (at p. 534) said:
"Two things require, in my judgment, to be noted about
that dictum. In the first place (Lord Dunedin) was recognising the
difficulty and, indeed, inappropriateness of seeking to provide any fixed
definition of the concept of title to sue. Secondly, the dictum, though
it has stood the test of time, was uttered in times well before the huge
development of administrative law and judicial review that has occurred in
recent decades. The key elements, therefore, of the dictum, namely
'some legal relation which gives him some right which the person against whom
he raises the action either infringes or denies' must be given a content and a
meaning which keep them abreast with those developments. Where questions of
title to sue arise in a situation where a Minister is exercising a function,
the search is, in my opinion, to be focussed on the scope and the purpose of
the statute or other measure under which he is purporting to act to discover
who, in law, has the right to challenge an act or decision taken by the
Minister in the exercise of that function if that act or decision is not to his
liking. The fact that the act or decision is not to his liking does not per
se qualify a person with title to challenge. Some legislation and its
related measures, having regard to their purpose and function, will, no doubt,
confer a right of challenge on individual members of the public as a whole, but
it is a fallacy to suppose that because of the public interest in ministers
acting lawfully and fairly that public interest by itself confers on
every member of the public a right to challenge a Minister's act or decision.
Matters must go further, in my judgment, and the individual or body seeking to
challenge the Minister's act or decision must show that, having regard to the
scope and purpose of the legislation, or measures, under which the act is
performed, or the decision is made, he or they have had such a right conferred
upon them by law, either expressly or impliedly."
Having then made
reference to the observations of the Lord Justice Clerk in Wilson v Independent Broadcasting
Authority, his Lordship continued:
"That approach to questions of title to sue was
applied by Lord Clyde in the case of Scottish Old People's Welfare Council,
Petitioners [1987 SLT 179] where his Lordship, under reference to the
supplementary benefits legislation, with which he was concerned in that case,
said at p. 185: 'The purpose of the legislation is to make state benefit
available to any member of the public who may qualify for it and it is not
unreasonable to see the duty of the proper administration of the legislation as
a duty owed to the public. On that basis it can be concluded that any member
of the public has at least a title to sue and the only question remaining would
be whether he has an interest to do so.'"
In the event,
however, on the basis that the Immigration Rules conferred no express or
implied rights on third parties such as the petitioners, it was held that the
latter had no title to try to stop the American boxer Mike Tyson from visiting
the United Kingdom:
"In my judgment the petitioners were in no different a
position from any other member of the public in that respect. The scope and
function of the legislation, and the rules, did not provide a legal nexus
between the petitioners and the Secretary of State when he was exercising his
discretion under them."
[56] Along
similar lines, in McColl v The Crofters' Commission 2007 Hous LR
46, Lord Malcolm (at para. 8) observed, with reference to
Lord Dunedin's speech in Nicol, that "... the language used was not
intended to be construed in a technical or restrictive fashion." Title, it is
often said, depends on interest: cf. Clyde and Edwards, Judicial Review, at para. 10.20. "No person", declared
Lord Ardwall in Swanson v Manson 1907 SC 426, at p. 429
(cited with approval in the Scottish Old People's Welfare case mentioned
above), "... is entitled to subject another to the trouble and expense of a
litigation unless he has some real interest to enforce or protect." And in R
v IRC, ex parte National Federation of Self-Employed and Small Businesses
Ltd 1982 AC 617 (at p. 646), Lord Fraser of Tullybelton discussed the
sufficiency of interest required for the purposes of an application for
judicial review in inter alia the following terms:-
"All are agreed that a direct financial or legal
interest is not now required... There is also general agreement that a mere
busybody does not have a sufficient interest. The difficulty is, in between
those extremes, to distinguish between the desire of the busybody to interfere
in other people's affairs and the interest of the person affected by or having
a reasonable concern with the matter to which the application relates."
Admittedly these latter
remarks were made in an English context, where relevant rules of court provide
for a test of "sufficient interest" to justify proceedings for judicial review,
but it seems to me (agreeing with Lord Morison in the Inner House in Whaley v
Lord Watson 2000 SC 340, at p. 367F/H) that they are nevertheless of
some assistance in showing where a broad, pragmatic dividing line may be drawn
between admissible and inadmissible claims in a public law context.
[57] Against
that background the domestic rules may, like article 34 of the Convention,
be seen as intended to exclude access to the courts where a pursuer's interest
in, or connection with, the subject-matter of a proposed litigation is remote,
tenuous, academic or theoretical. Mere busybodies should not be permitted to
take up court time, and cause expense to others, where the matters in issue,
and indeed the outcome of proceedings, would not practically affect them in any
relevant manner. In certain contexts, no doubt, as mentioned by
Lord Dunedin in his speech in Nicol, a pursuer must be able to
identify some specific legal status or relationship to serve as the basis for court
action. Only a contracting party, for example, can ordinarily sue on, or for
breach of, a contract; prima facie it is only trustees who have the
right to pursue claims relative to trust property; and only an injured party,
to the exclusion of relatives, employers, business associates and the like, can
claim damages for negligence. But in other cases, especially those with a
public law element, the qualifying relationship may be of a rather broader and
more general nature as illustrated by the authorities to which I have
referred. Accordingly, where a party's personal, social, political, economic
or proprietary interests are demonstrably affected by some real (as opposed to
merely academic or theoretical) public law issue or grievance, then as a
general rule he will be held to have title to raise proceedings for judicial
review in that connection.
General discussion
[58] With these considerations in mind, I
do not consider that any sound reason has been advanced for denying the
petitioners access to this court for determination of the merits of their various
grounds of complaint. The respondents' main contentions here were concise and straightforward
and can be briefly stated. According to them, the petitioners as mere insurers
enjoyed neither common law title and interest, nor "victim" status for the
purposes of article 34 of the Convention as required by section
100(1) of the Scotland Act 1998. The only parties qualified to object to the
2009 Act were the actual or prospective defenders in pleural plaques litigation,
namely former employers against whom negligence was alleged and from whom awards
of damages were sought. The petitioners' contractual indemnity obligations
would not arise unless and until decree was pronounced against their insured in
such proceedings, and they were thus too far removed quoad both time and
status to have any legitimate locus standi. They were no more "directly
affected" it was said, than the plaintiffs with contractual reimbursement and
indemnity obligations whose claims were tentatively rejected (in a domestic
context concerned with the interpretation of rules of court) in R v Liverpool
County Council, ex parte Muldoon 1996 1 WLR 1103 and In re Salmon:
Priest v Uppleby 1889 LR 42 ChD 351. In truth, the petitioners had
embarked on an illegitimate actio popularis, to which Lord
President Cooper's words in MacCormick & Another v The Lord Advocate
1953 SC 396 (at p. 413) could readily be applied:
"... I cannot see how we could admit the title and
interest of the present petitioners to raise the point in issue before the
Court of Session without conceding a similar right to almost any opponent of
almost any political action to which public opposition has arisen."
[59] In my
judgment, however, the respondents' approach here was unduly narrow and
technical and cannot be sustained. On the Convention side, moreover, there was
a tendency to confuse considerations of admissibility under article 34 with the
very different factors bearing on a substantive violation of particular rights.
As it seems to me, the broad and flexible principles enshrined in both domestic
and Convention jurisprudence are intended to permit recourse to the court by
those who can, in their own right, qualify a live, practical interest in the
subject-matter of a public law complaint and who will themselves be materially
affected by the outcome of proceedings. With that in mind, and accepting the
parties' invitation to judge the matter as a preliminary issue, I am satisfied that
the petitioners have title and interest to maintain this petition at common
law, and that their Convention claims are also admissible for the purposes of
article 34.
[60] On
purely formal grounds, legal actions by pleural plaques claimants pursuant to
the 2009 Act will, of course, be raised against allegedly negligent former
employers. Insurers such as the petitioners will not normally be called as
defenders, although it is not unknown (a) for an insurer to be sisted as a
party where, for example, the nominal defender declines to enter appearance, or
(b) for insurers to be sued directly in road traffic cases pursuant to a
European Directive. In my view, however, such technicalities fail to reflect
the underlying substance of the petitioners' position. Owing to the extended
latency period for asbestos-related conditions, it is said that some former
employers are in liquidation, and that others have gone out of business
altogether. Some have even been struck off the Register of Companies and, as
shell entities without directors, assets, accounts or trading activities, have had
to be formally restored to that register in order to facilitate the constitution
of claims. For practical purposes, especially in the case of companies in the
latter situation, it is insurers such as the petitioners who respond to claims,
negotiate settlements and at their own expense conduct or compromise any legal
proceedings. It is the petitioners, and not their respective insured, whose
solicitors are engaged to handle such matters. Under what is sometimes
referred to as the "step-in" clause routinely found in employers' liability
indemnity insurance policies (including those lodged as productions 6/65-68 in
the present case), it is insurers who ex contractu (and as dominus litis)
assert the right to take over the control and direction of legal proceedings
and, if appropriate, to compromise or settle such proceedings on whatever basis
they see fit. It is insurers who assume liability for the payment of any
damages, interest or expenses which may be found or agreed to be due. It is
insurers who, under the Third Parties (Rights against Insurers) Act 1930, may
be directly convened as defenders once legal liability has been established
against an insolvent insured, and who may then, in direct opposition to the
injured party, reopen questions on the merits and quantification of his claim:
cf. Cheltenham & Gloucester plc v Sun Alliance &
London Insurance plc 2001 SC 965, per Lord President Rodger at
paras. 16-17. It is insurers who may, on effecting policy payments, exercise
subrogation rights in the name of their insured. With such factors in mind, it
seems to me that the petitioners' claimed involvement in pleural plaques
litigation is demonstrably closer than the respondents were prepared to
acknowledge.
[61] More
broadly, the petitioners maintained that disapplication of the Rothwell
decision in Scotland had, in a
real sense, deprived them and others of the fruits of the belated test cases
which they ran to establish whether pleural plaques truly constituted
actionable harm for the purposes of delictual damages claims. Their immunity
from suit had gone. The massive financial saving which Rothwell
represented to the insurance industry (as expressly acknowledged in many of the
parliamentary papers produced) was wiped out. Under regulatory arrangements, it
was said, insurers were obliged to maintain reserves at a level sufficient to
cover current and anticipated claims, and by making pleural plaques actionable the
effect of the Act was to sterilise the petitioners' capital to a significant
degree. Failure to modify their conduct in this respect might lead to
commercial sanctions or perhaps worse. The precise level of such sterilisation
was uncertain but, if estimation were to be based on the figures advanced and
debated during the passage of the Bill, the lower limit might be somewhere in
excess of £100 million and the upper limit might approach £8.6 billion. Given
the significantly increased sums sued for in recent pleural plaques actions,
however, (nearly ten times higher than the average level of awards to date),
these potential limits might now need to be revised upwards. On all sides, of
course, such estimates proceeded on the assumption that relevant insurance
obligations would continue to be engaged.
[62] If, in
the circumstances asserted by the petitioners, insurers are not "directly
affected" by the 2009 Act and its consequences, it is my view difficult to regard
their insured as being in any better position. Insured defenders in pleural
plaques claims may have no material concern with the handling of such claims
nor with the outcome of any related court proceedings. Where activated, the
traditional "step-in" clause contractually disables them from influencing the
progress of litigation. For practical purposes the number, value and disposal
of claims do not directly affect their financial interests. Any relevant
premiums for indemnity insurance will have been paid in the past and, where
companies are insolvent, out of business or off the register altogether, there
can be no further liability for the payment of premiums in the future.
[63] Unsurprisingly,
the interest of the petitioners and other insurers has been acknowledged in
both judicial and parliamentary contexts. At para. 6 of his speech in Rothwell,
for example, Lord Hoffman expressly recorded that:
"Since (certain decisions more than 20 years earlier),
claims have regularly been settled on the basis that pleural plaques are
actionable injuries. But now the insurers have decided to challenge the
practice. Ten test cases were selected for trial before Holland J. who ...
found that the plaques were actionable... In seven cases the insurers appealed to
the Court of Appeal, which reversed the decision of the judge. Four of the
claimants now appeal to your Lordships' House..."
In many of the
parliamentary papers which followed the Rothwell decision, explicit
reference was made to the savings which Rothwell represented to the
insurance industry. In February 2008, paragraphs 13-15, 22 and 24 of the Partial
RIA consultation document (production 6/21) confirmed the Bill's likely impact
on inter alios insurers as interested parties. The appended list of
consultees included many individual insurance companies (including the
petitioners) as well as representative bodies. Paragraph 5 of the Scottish
Government's Policy Memorandum of June 2008 (production 6/25) recorded how it was
"insurers" who had brought the test cases south of the border and, in the Court
of Appeal, challenged the initial decision at first instance.
Paragraph 20 went on to assert that:
".... prior to the decision to bring forward
legislation, meetings were held with asbestos groups and their representatives
and representatives of the insurance industry."
Consistently,
production 6/26 records a special hearing at which the Justice Committee of the
Parliament took evidence from insurers' representatives. Production 6/27
further records how the Minister, when challenged by the Committee on
inadequate consultation measures, responded with the claim to have "... consulted
key stakeholders including representatives of the insurance industry".
[64] In the
same context the Scottish Government's letter of 28 November 2008 (production 6/54/80) confirms
that, from the point of view of the Scottish Government promoting the Bill, the
engagement of relevant insurance arrangements was a matter of high priority.
And it is not without significance that, in the stage 3 parliamentary debate on
11 March 2009, the
Minister's response on the issue of financial uncertainties affecting the Bill
was all about the profits and taxability of insurance companies and not at all
about the position of their insured. There does not appear to have been any
question of the promoters of the Bill, nor in turn the Parliament, being
content if the 2009 Act had left insurers financially unaffected by its
provisions. And if, as the petitioners' claim, insurers were intended targets
of this legislation, it becomes especially difficult to see how the respondents
can now maintain that they are not "directly affected" in line with that
intent. Even in their capacity as major taxpayers (to which the Minister
specifically referred in the debate of 11 March 2009), the petitioners
might have claimed title and interest to ensure that legislation burdening inter
alia the public purse to their detriment was promoted and passed on a
lawful and fair basis. But they had no need to rely on a general claim of that
kind where, on the more specific grounds already discussed, their title and
interest to maintain the present proceedings at common law, and the
admissibility of their Convention claims, are in my view indisputable.
[65] When
asked what would be the consequence in the event of my upholding the
respondents' challenge to the petitioners' locus standi, either at
common law or under the Convention, the learned Dean of Faculty informed me
that at least one solvent former employer of pleural plaques claimants was
waiting in the wings to raise proceedings for judicial review of the 2009 Act
in their own right. In my view no court could seriously contemplate such a
development having regard to the waste of expense, and of judicial time, which
would be involved in conducting the same exercise all over again. If, as I
believe, the inclusion of one or more employers as petitioners from the outset,
or the sisting of such employers as additional parties now or at any stage in
the future, would have deprived the present debate on locus standi of
much, if not all, of its practical significance, that would to my mind further
underline the artificial nature of the respondents' position. Interestingly,
no point as regards the petitioners' locus standi was taken by
the first respondent in the course of the extended interim suspension
hearing which took place before Lord Glennie in April 2009.
[66] Proceedings
at the instance of former employers would not in any event be identical to the
present, since it would not be open to them to pursue particular complaints affecting
insurers' interests alone. For instance, it is hard to see how the
petitioners' arguments based on the Scottish Government's letter of
28 November 2008 (production 6/54/80), and on the allegation that a
specific objective of the Bill to target past insurance arrangements was
intentionally concealed from the Parliament at stages 2 and 3 of the Bill's
legislative progress, could properly be advanced by an insured employer who (i)
took no part in any consultation process; (ii) might have no practical concern
whether the new Act created a worthwhile right to recover damages (through the
medium of insurance), or merely an empty claim against nominal defenders
lacking attachable funds; or (ii) if solvent, might have no real complaint
unless legitimately expected insurance cover were somehow to be denied.
Similarly it is only insurers who are in a position to complain on Convention
grounds of a "disproportionate and excessive burden" imposed on their collective
resources by the 2009 Act to an extent potentially measured in billions of
pounds.
[67] For all
of these reasons, I consider that the respondents' challenge to the
petitioners' title and interest to pursue these proceedings at common law, and
to their qualification under article 34 of the Convention as required by
section 100(1) of the Scotland Act 1998, is ill-founded and must be repelled.
On no view can the petitioners' claimed interests in this matter be described
as remote, tenuous, academic or theoretical; pending full consideration of the
merits of their various grounds of complaint, I am unable to regard any of them
as "manifestly without reasonable foundation" under article 35 of the
Convention; in my judgment, these proceedings have none of the characteristics
of an actio popularis, nor do they concern the rights and interests of
any third party; the circumstances of domestic authorities such as Muldoon,
Salmon and MacCormick strike me as so far removed from the present
as to be readily distinguishable; and I think that it would be an affront to
justice if the petitioners' locus standi here were to be denied.
The "Ullah
principle"
[68] In my judgment the foregoing
conclusion on the admissibility of the petitioners' Convention complaints is in
no way precluded by what the respondents referred to in argument as the "Ullah
principle". In the case of R (Ullah) v Special Adjudicator 2004
2 AC 323, Lord Bingham of Cornhill at para. 20 said:
"In determining the present question, the
House is required by section 2(1) of the Human Rights Act 1998 to take into
account any relevant Strasbourg case law. While such case law is not
strictly binding, it has been held that courts should, in the absence of some
special circumstances, follow any clear and constant jurisprudence of the Strasbourg court... This reflects the fact that the Convention is
an international instrument, the correct interpretation of which can be
authoritatively expounded only by the Strasbourg court.
From this it follows that a national court subject to a duty such as that
imposed by section 2 should not without strong reason dilute or weaken the
effect of the Strasbourg case law. It is indeed unlawful under
section 6 of the 1998 Act for a public authority, including a court, to
act in a way which is incompatible with a Convention right. It is of course
open to member states to provide for rights more generous than those guaranteed
by the Convention, but such provision should not be the product of
interpretation of the Convention by national courts, since the meaning of the
Convention should be uniform throughout the states party to it. The duty of
national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time; no more, but certainly no
less."
[69] Since
2004, Lord Bingham's observations have been repeatedly quoted and
re-affirmed in other cases at the highest level, and in that connection I was
referred to M v Secretary of State for Work and Pensions 2006 2
AC 91; DS v HMA 2007 SC PC 1; R (Clift) v SSHD 2007 1 AC 484; R
(Al-Skeini) v Secretary of State for Defence 2008 1 AC 153; R
(Countryside Alliance & Others) v Attorney General 2008 1 AC
718; R (Animal Defenders International) v Culture Secretary 2008
1 AC 1312; Whaley v Lord Advocate 2008 SC HL 107; R (Black)
v Justice Secretary 2009 2 WLR 282; R (Walker) v
Justice Secretary 2009 2 WLR 1149; and R (Purdy) v DPP
2009 3 WLR 403. Sometimes, as in Purdy for example, Lord Bingham's remarks
have been relied on as confirming that a national court must follow any clear
and constant jurisprudence of the Strasbourg Court. On occasion, however, they
may appear to have been interpreted in such a way as to preclude any finding by
a national court on any matter which has not yet been positively addressed and
determined in Strasbourg. It
is this apparent counsel of caution which the respondents urge upon me here,
and which some academic writers have criticised as being unduly conservative in
the past.
[70] According
to the respondents, the "Ullah principle" rendered impossible any
decision, even on "victim" status, in favour of insurers where no application
involving insurers had yet come before the Strasbourg
Court. It was not that there was any hint of Strasbourg jurisprudence adverse to
insurers: what mattered was that their particular situation had not been the
subject of express decision either way. The fact that the Strasbourg Court might have no opportunity
to address such an issue in the foreseeable future, or that obviously deserving
claims might repeatedly have to be rejected in a national context, did not seem
to trouble the respondents at all. Nor did they appear to recognise that, on
their reading, the "Ullah principle" might equally be thought to apply -
contrary to their own interests - where the Strasbourg Court had not yet upheld
a Government's challenge to the admissibility of insurers' claims under
article 34.
[71] To my
mind this is an intriguing line of authority, not least because in Ullah
- where it all began - their Lordships sought to take advantage of the most
uncertain of possibilities gleaned from Strasbourg caselaw in order to hold
that an asylum claim might properly be founded on alleged violation of
article 9 of the Convention. The Court of Appeal had rejected such a
possibility, taking the view that only article 3 could be relied on for
that purpose, but as Lord Bingham stated (at para. 21):
"... I find it hard to think that a person could
successfully resist expulsion in reliance on article 9 without being
entitled either to asylum on the ground of a well-founded fear of being
persecuted for reasons of religion or personal opinion or to resist expulsion
in reliance on article 3. But I would not rule out such a possibility in
principle unless the Strasbourg court has clearly done so, and I am not
sure it has."
[72] More importantly, perhaps, when one examines those subsequent decisions
in which the "Ullah principle" has been applied so as to preclude acceptance
of Convention claims in a national context, a striking feature is that in every
one of them relevant Strasbourg jurisprudence was currently adverse to the
claim in question. Their Lordships were thus simply declining to sanction any
departure from established Strasbourg case law, or to sanction speculation as to
whether Strasbourg's thinking might in future develop in some
different direction. This can be seen from M (Lord Nicholls at
paras. 24-30); DS (Lord Rodger at para. 59; Baroness Hale of
Richmond at para. 93); Clift (Lord Bingham at paras. 27-8;
Lord Hope at para. 45); Al-Skeini (Lord Rodger at
para. 68; Baroness Hale at para. 91); Whaley v Lord
Advocate (Lord Hope at para. 18); Black (Lord Rodger at
paras. 45-6); and Walker (Lord Hope at paras 17-19;
Lord Brown of Eaton-under-Heywood at para. 62).
[73] In areas where the Strasbourg jurisprudence accords a margin of
appreciation to national authorities, the House of Lords have sometimes
acknowledged this by declining to interfere with what Parliament had already decided
on the matter: cf. Countryside Alliance (Baroness Hale at
para. 126); Animal Defenders International (Lord Bingham at paras. 33-37). However the decision in In re G
(Adoption: Unmarried Couple) 2009 1 AC 173 went further, holding (per
Lord Hoffmann at paras 31-38, as supported by Lord Hope at para. 53
and Lord Mance at para. 125) that since Lord Bingham's remarks in Ullah
were not made in a context where (as in that case) the Strasbourg Court had
declared a question to be within the national margin of appreciation, the House
was free to reach a principled and rational interpretation of the concept of
discrimination as introduced into domestic law by the Human Rights Act 1998.
These are again cases in which, as it respectfully seems to me, their Lordships
were seeking to observe the duty of national courts to follow and give effect
to settled Strasbourg
jurisprudence.
[74] Against
that background, and with specific reference to the issue of admissibility
under article 34, I am not persuaded that the respondents' approach to
what they called the "Ullah principle" is soundly-based, or that it
should lead to dismissal of the petitioners' Convention claims in limine.
If, for the reasons already given, it is right to regard the petitioners as
"directly affected by the impugned measure" - here the 2009 Act -, it strikes
me as inconceivable that their plea to be heard on the merits of their various grounds
of complaint should have to be denied just because no insurance company has
(apparently) yet brought a comparable claim before the Strasbourg Court. This
is not a situation where current Strasbourg jurisprudence is in any way adverse to the petitioners on the
preliminary issue of admissibility. On the contrary, their entitlement to be
heard in these proceedings seems to me to derive strong support from existing Strasbourg caselaw, and to my mind it is only
a failure to follow and apply such guidance that would offend against the "Ullah
principle" as properly understood.
[75] Interestingly,
at para. 125 of her speech in the Countryside Alliance case,
Baroness Hale said:
"... When we can make a good prediction of how
Strasbourg would decide the matter, we cannot avoid
doing so on the basis that it is a matter for Parliament."
And in the case of In re G (at paras. 27 and 29), Lord Hoffmann
expressed one of his reasons for upholding the appellant's claim in these
terms:
"It ... seems to me not at all unlikely that if the
issue in this case were to go to Strasbourg, the court would hold that discrimination
against a couple who wish to adopt a child on the ground that they are not
married would violate article 14...
I therefore do not think that your Lordships should be
inhibited from declaring that article 14 of the 1987 Order is unlawful
discrimination, contrary to articles 8 and 14 of the Convention, by the
thought that you might be going further than the Strasbourg court. ..."
Especially where a
preliminary issue of admissibility is concerned, I feel confident in
approaching matters in the same way, bearing in mind that none of the cited
decisions on the "Ullah principle" bore to exclude a claimant on
admissibility grounds. In my judgment, applying the test set out in section
100(1) of the Scotland Act 1998, the petitioners would clearly qualify for the
purposes of article 34 of the Convention if proceedings in respect of the
2009 Act were brought in the European Court of Human Rights.
[76] In this
context, it is relevant to note that courts both north and south of the border
have recently felt free to reach their own decisions on admissibility
notwithstanding the absence of any express ruling by the Strasbourg Court on the point at issue.
For example, in a number of cases concerning the lawfulness of legislation
designed to prohibit foxhunting with dogs, UK courts appear to have had no
difficulty in accepting the admissibility of certain individuals' Convention
claims even though the Strasbourg Court had never addressed the question
whether (i) an organisation campaigning on rural issues or (ii) farmers,
landowners, managers of fox-hounds and a wide range of other individuals were
directly affected by the proposed legislative ban: cf. Whaley v
Lord Watson; Adams v Advocate General for Scotland and Others
2003 SC 171 and 2004 SC 665; the Countryside Alliance case; and Whaley
v Lord Advocate. The simple answer, in my view, is that Strasbourg has
laid down various broad principles to be applied in determining issues of
admissibility under article 34, and it is then for national courts to have
regard to these principles in judging the circumstances of each individual
case.
[77] In the
end, it seems to me that many of the respondents' difficulties stem from (i) a tendency
to confuse criteria for admissibility under article 34 with factors bearing on
a substantive violation of particular rights; and also (ii) their rigid
characterisation of the petitioners' interest in this matter as "indirect".
According to them, the petitioners necessarily sued in a remote, secondary and
derivative role "in place of" the true defenders (that is, allegedly negligent former
employers), and for admissibility purposes counsel were unable or unwilling to acknowledge
that the petitioners might actually have come to court in an attempt to protect
their own substantial interests against legislation of which they claimed to be
intended targets. Had I sympathised with the respondents' contentions here,
taking the view that the petitioners were not "directly affected" by the 2009 Act,
I would have followed Strasbourg guidance and dismissed their Convention claims as incompatible ratione
personae with article 34. But that, as I have sought to explain, is
not the case here at all.
Specification
[78] Another contention forcefully advanced by
the respondents was to the effect that issues of locus standi could not
be determined where the petitioners' position as insurers had not been the
subject of detailed and precise averment, submission or vouching. Deficiencies
in this area had, it was said, been flagged up months ago; calls for further
specification had been made in the respondents' Answers; yet the petitioners
had stubbornly declined to reveal their true hand. Even now only specimen
policies had been produced (productions 6/65-68); there was no way of telling
what policy terms would actually apply in any individual case; for the future,
the petitioners had sought to reserve their position on the construction and
application of policies; and, significantly, the proper law of relevant
insurance contracts could not be ascertained. If such contracts were not
subject to Scots law, so the argument ran, they might not even be engaged by
the 2009 Act which had effect only in Scotland.
[79] At this
preliminary stage, I do not think that such arguments can be sustained. This
is, after all, petition procedure in a public law context where the substance
of a party's position may properly be conveyed to the court without the
necessity for detailed pleadings or proof. In any event I am satisfied that
the petitioners' averments, fairly read, give notice of the basis of their
various complaints, and even if that were not so it seems to me that any
deficit has been sufficiently made up in argument. For admissibility purposes,
the important elements of the petitioners' claims are (i) that in passing the 2009
Act the Parliament deliberately targeted indemnity insurers through the medium
of pleural plaques litigation; and (ii) that insurers have a close and controlling
involvement in such litigation to the practical exclusion of their insured,
(especially where the latter are in liquidation, out of business or off the
register altogether).
[80] As the
learned Dean of Faculty observed, the Parliament had no need to see individual
policies, or consider choice of law clauses, in order to target the insurance
industry with their proposals or, in that context, to recognise insurers' substantial
involvement in pleural plaques litigation. By the same token, I do not regard
such details as essential here either. As it seems to me, the petitioners'
complaints rest on a broad foundation which for admissibility purposes does not
require, and would not benefit from, exploration of the minutiae of
individual cases. The respondents do not in any event dispute that "step-in"
arrangements are a standard feature of employers' liability policies in
general, nor that (as confirmed by the first respondent's "Note of References"
(production 32)) the Parliament's attention was closely focused on the
insurers' position throughout the legislative process. As regards alleged lack
of detail on choice of law clauses, the respondents did not convincingly explain
how this might be thought to affect the petitioners' locus standi, and
of course it was not in their interests to argue that the 2009 Act could have
no effect on past indemnity insurance arrangements.
Forum
[81] By reference to decisions such as NUPE
and Another, Petitioners (Lord Cameron of Lochbroom, 11 March 1993)
and R v Employment Secretary, ex parte Equal Opportunities Commission
1995 1 AC 1, the third to tenth respondents further contended that judicial
review was an entirely inappropriate forum for the petitioners' complaints, and
that these ought instead to be raised by way of defence in individual pleural
plaques actions. In the particular circumstances of this case, I do not
consider that submission to be well-founded. Both of the cited authorities
concerned claimants whose grievance could appropriately be raised (and in one
case was already pending) before an Employment Tribunal. Multiple litigations
were not in prospect, nor were major public law and constitutional issues
involved. These features, as it seems to me, stand in stark contrast to the
present case, which in its nature is eminently suited to judicial review
proceedings. The first respondent did not suggest otherwise when this petition
was first raised, and to be fair it is perhaps only the third to tenth
respondents who have sought to make anything of this matter now.
[82] In any
event, I am not persuaded that any alternative to judicial review would be suitable
here. However close their involvement in pleural plaques litigation, the
petitioners are not formally parties to any individual action, and any attempt
on their part to raise issues which (as pointed out in paragraph [66] above)
would not be open to the nominal defenders might be expected to attract strong
opposition. Even if that difficulty could be overcome, the prospect of
multiple litigations on identical issues, involving different insurers in a
range of different courts, would in my opinion be unacceptable. Law officers
such as the first respondent would require to be specially convened to
represent the public interest in such cases; interested parties such as the
third to tenth respondents could not rely on rule of court 58 in order to
be heard; the facts of individual cases would be substantially irrelevant to
the real issues arising; and in the end I do not think that there is any basis
on which the respondents' procedural alternative merits serious consideration.
Conclusion
[83] For all of these reasons, the preliminary
issue of locus standi is determined in the petitioners' favour.
III. Title and interest of the third to tenth respondents
[84] By interlocutor
of 8 May 2009, Lord Uist allowed
eleven individuals diagnosed with pleural plaques to enter the process pursuant
to the court's discretion under rule of court 58.8. That rule forms part of
the chapter dealing with applications for judicial review, and provides inter
alia as follows:
"(2) Any person not specified in the
first order made under rule 58.7 as a person on whom service requires to be
made, and who is directly affected by any issue raised, may apply by motion for
leave to enter the process; and if the motion is granted, the provisions of
this Chapter shall apply to that person as they apply to a person specified in
the first order..."
Some of the individuals concerned had already raised actions of damages
against former employers, and the remainder were prospective claimants who
intended to do likewise in the foreseeable future. As representatives of the
group who would benefit from the provisions of the 2009 Act so long as it
remained in force, they maintained that they were "directly affected" by issues
arising in these proceedings. Self-evidently they would each be financially
disadvantaged should the petitioners' attack on the validity of the Act be
successful. Valuable claims would be lost, and as Lord
Moncrieff observed in Zurich General Accident and Liability Insurance Co v
Livingston 1938 SC 582, at p. 590:
"It seems to me quite unanswerable that a
person, whose statutory right may be taken away by a process of law, should,
before his statutory right is taken away, be entitled to be heard as a proper
defender against the conflicting claim".
If the petitioners could claim title and interest to pursue these
proceedings by reference inter alia to their involvement in pleural
plaques litigation, then the same must apply with even greater force to these
respondents. In all the circumstances, the petitioners' contrary contentions
should be rejected as unsound.
[85] Despite obtaining leave to enter the process, three out of the
eleven individuals failed to take advantage of Lord Uist's interlocutor. The reason for this was never explained, and by
interlocutor of 21 May 2009 the court formally withdrew their
entitlement.
[86] Not content with resisting the respondents' challenge to his
own clients' locus standi, the learned Dean of Faculty submitted that
the third to tenth respondents' participation was unwarranted and that their
Answers should be repelled. Admittedly Lord Uist's interlocutor could
only be reversed on appeal, but there was nothing to prevent the court from
repelling the Answers on the basis that the third to tenth respondents had no
legitimate title and interest to oppose this application. According to the
petitioners, it was no accident that the rule of court had been amended on the
same day as the Human Rights Act 1998 came into force, and the phrase "directly
affected" should therefore be given the same meaning. Since the third to tenth
respondents could not (and did not) claim to be victims of any violation of the
Convention, they plainly failed to qualify under the rule. In any event, they
could not legitimately assert any claim, expectation or other entitlement based
on an Act of the Scottish Parliament which was itself invalid and should never
have been passed. Moreover, the reference in paragraph (2) of the rule to
requirements for service, and the limited scope under rule of court 58.8A for
the introduction of matters of public interest, showed that these provisions
should be narrowly construed. The Scottish Government was the only proper
contradictor here, and in the whole circumstances the continued participation
of the third to tenth respondents in these proceedings should not be
sanctioned.
[87] Since the argument was stated by the learned Dean of Faculty, I
will not describe it as unstateable. In my view, however, it has no merit.
Bearing in mind that chapter 58 of the rules of court is not limited to
applications for judicial review on Convention grounds, I do not see how any
legitimate parallel can be drawn between rule 58.8(2) and the Human Rights
Act 1998. In a Convention context, a person claiming to be the victim of a
violation must be "directly affected" by the subject matter of his complaint.
Under the rule, however, an interested party need have no claim or complaint of
his own, nor need he be "directly affected" in that connection. The court's
discretion may be exercised in favour of anyone directly affected "... by any
issue raised" in the proceedings, and to my mind that wording is plainly wide
enough to cover the position of the third to tenth respondents in this case.
If, as actual or prospective pleural plaques claimants, they are not directly
affected by the fate of the 2009 Act as determined in these proceedings, it
would in my view be hard to regard the petitioners as directly affected in that
context either. In my view, however, the court's discretion under rule 58.8(2)
is generous rather than restrictive, and I can see no reason why the third to
tenth respondents' participation in these proceedings should be curtailed. The
petitioners' invitation to repel the Answers for these respondents is therefore
declined.
IV. Competency
of the petitioners' challenge at common law
Background considerations
[88] 1998 was
an important year for the constitution of the United
Kingdom. Not only was there enacted the Human Rights
Act, ushering in what Lord Steyn described (in R (Jackson) v
Attorney General 2006 1 AC 262, at para. 102) as "... a new legal
order", but statutes were passed to devolve from the Westminster Parliament a
measure of legislative and administrative power to Scotland, Wales and Northern
Ireland respectively. The latter steps were taken with a view to improving the
governance of these parts of the United Kingdom, and thereby of the United Kingdom itself. As regards Wales and Northern Ireland, Assemblies were created under the Government of Wales Act 1998 and
the Northern Ireland Act 1998, but for Scotland the devolution settlement went further. Under the Scotland Act
1998 (hereinafter "SA 1998"), Scotland received a Parliament with
wide-ranging powers relative to Scotland and her affairs, including power to pass
"Acts of the Scottish Parliament" of a character very similar to the primary
legislation which would previously have emanated from the sovereign Parliament
at Westminster. Although Lord Steyn, in the same passage of his speech in
Jackson, ventured the suggestion that a division of sovereignty might be
involved here, the Scottish Ministers in these proceedings accept (in line with
views expressed by the Inner House in Whaley v Lord Watson and by
the House of Lords in Somerville v Scottish Ministers 2008 SC HL
45) that no division or transfer of sovereignty in favour of the new parliament
was involved, and that sovereign status (whatever that concept may now embody) remains
with the Westminster Parliament alone.
[89] The
question which arises for determination at this stage is whether the validity
of the 2009 Act, as legislation emanating from the non-sovereign Scottish
Parliament, is or is not susceptible to challenge on traditional common law
grounds. These are conveniently summarised by the Lord Ordinary (Lord Nimmo Smith) in Adams v Advocate General for
Scotland and Others 2003 SC 171 (at para. 53) in the following terms
which I respectfully endorse:
"There are familiar grounds upon which an
application for judicial review may be brought at common law. In CCSU v
Minister for Civil Service, in a well-known passage... Lord Diplock
classified under three heads the grounds upon which administrative action is
subject to control by judicial review. He called these illegality,
irrationality and procedural impropriety. He said that by 'illegality' as a
ground of judicial review he meant that the decision-maker must understand
correctly the law that regulates his decision-making power and must give effect
to it. By 'irrationality' he meant what can now be succinctly referred to as 'Wednesbury
unreasonableness' (Associated Provincial Picture Houses Ltd v
Wednesbury Corporation). It applies to a decision which is so outrageous
in its defiance of logic or of accepted moral standards that no sensible person
who had applied his mind to the question to be decided could have arrived at
it. By 'procedural impropriety' he meant not only basic rules of natural
justice or failure to act with procedural fairness towards the person who will
be affected by the decision, but also failure by an administrative tribunal to
observe procedural rules... even where such a failure does not involve any denial
of natural justice".
In particular, the parties are in dispute as to whether (as the Lord
Ordinary held in Adams) traditional grounds of judicial review are
altogether excluded so far as Acts of the Scottish Parliament are concerned, or
whether (as the petitioners maintain) the courts retain jurisdiction to review
the exercise of all powers conferred by SA 1998, including the Parliament's
power to pass primary legislation, on inter alia the ground classified
by Lord Diplock as "irrationality".
[90] It is true that the terms "unreasonableness" and
"irrationality" may be capable of a range of different meanings, and have on
that account been criticised as "notoriously imprecise". By way of
illustration, Lord Greene's description of "unreasonableness" in Wednesbury
itself (1948 1 KB 223, at p. 229, addressing statutory discretions) included
some potentially non-extreme factors to which Lord Diplock in the CCSU
case did not refer. In some contexts, moreover, there has been a distinct
shift of emphasis away from the Wednesbury formulation towards the more
flexible (and perhaps more rigorous) doctrine of proportionality. In R
(ProLife Alliance) v BBC 2004 1 AC 185, Lord Walker of
Gestingthorpe (at para. 131) referred to the "... long trek away from Wednesbury
irrationality... as the only appropriate test where human rights are involved
...", and went on to quote from Lord Steyn in R (Daly) v SSHD 2001
2 AC 532 (at paras. 27-28):
".., there is an overlap between the traditional
grounds of review and the approach of proportionality. Most cases would be
decided in the same way whichever approach is adopted. But the intensity of
review is somewhat greater under the proportionality approach... I would mention
three concrete differences without suggesting that my statement is exhaustive.
First, the doctrine of proportionality may require the reviewing court to
assess the balance which the decision maker has struck, not merely whether it
is within the range of rational or reasonable decisions. Secondly, the
proportionality test may go further than the traditional grounds of review
inasmuch as it may require attention to be directed to the relative weight
accorded to interests and considerations. Thirdly, even the heightened
scrutiny test developed in R v Ministry of Defence, ex p Smith
1996 QB 517, 554 is not necessarily appropriate to the protection of human
rights.
The differences in approach between the traditional
grounds of review and the proportionality approach may therefore sometimes
yield different results."
But, whatever their perceived faults, the traditional common law grounds
for judicial review remain available in appropriate circumstances, and the
question is: can the petitioners competently pursue an "irrationality"
challenge here?
[91] Under settled constitutional principles dating back to the
nineteenth century and beyond, primary legislation enacted by the sovereign
Parliament at Westminster is altogether immune from judicial review
on common law grounds. In Madzimbamuto v Lardner-Burke 1969 1 AC
645, at p. 723, Lord Reid said:
"It is often said that it would be unconstitutional
for the United Kingdom Parliament to do certain things, meaning that the moral,
political and other reasons against doing them are so strong that most people
would regard it as highly improper if Parliament did these things. But that
does not mean that it is beyond the power of Parliament to do such things. If
Parliament chose to do any of them the courts could not hold the Act of
Parliament invalid".
Similarly, as explained by Lord Bingham in Jackson (at para. 27):
"The authority of Pickin v British Railways
Board 1974 AC 765 is unquestioned, and it was there very clearly decided
that 'the courts in this country have no power to declare enacted law to be
invalid' ...".
In observing this established rule the courts may, as suggested by the
Lord President (Lord Rodger) in Whaley v Lord Watson (at
p. 350A/B), be acknowledging "... a mutuality of respect between two
constitutional sovereignties", and from that perspective the decision of the
Lord Ordinary (Lord Jauncey) and of the Inner House in City of Edinburgh District Council v Secretary of State for
Scotland 1985 SLT 551 may
not be without significance. There it was held that, where even subordinate
legislation had been debated in the House of Commons before being approved
under the negative resolution procedure, it was not open to the courts to
inquire into its validity on Wednesbury unreasonableness grounds. In
Lord Jauncey's words (at p. 556):
"... how could the courts label as irrational
or unreasonable a decision which Parliament had expressly or impliedly
approved? I do not think that they could. ..
... no authority was cited to me in which Wednesbury
principles had been applied in relation to a statutory instrument... I conclude
that the courts can only hold to be ultra vires a statutory instrument
which has been laid before and considered by Parliament where that instrument
is patently defective in that it purports to do what is not authorised by the
enabling statute or where the procedure followed in making that instrument
departed from the requirements of the enabling statute".
In so holding, Lord Jauncey appears to have relied, not on the
primary or secondary nature of the legislation, but rather on the express or
implied approval of the sovereign Parliament at Westminster. Indeed he made it clear that where such approval was not required, so
that the exercise of statutory power was outwith direct parliamentary control,
"... the courts alone could intervene to protect the subject."
[92] More recently, in the speeches of several members of the
appellate committee of the House of Lords in Jackson, there was an
evident reluctance to rule out the possibility of judicial intervention if, at
any time in the future, the Westminster Parliament were to abuse its powers by
legislating in a seriously improper and intolerable manner. This echoed
judicial contributions to learned journals by Lord Woolf and others over
the previous decade or more. One such contribution by Sir Stephen Sedley,
writing in 1995, drew attention to "... the way in which modern public law has
carried forward a culture of judicial assertiveness to compensate for, and in
places repair, dysfunctions in the democratic process", and went on to issue a
pointed reminder of "...the sharpest of all the lessons of eastern Europe: that
it is when state is collapsed into party that democracy founders". Examples
given in Jackson were all of an extreme character, such as the
purported abolition of the House of Lords, or the barring of recourse to the
courts for protection against some flagrant invasion of fundamental rights. By
way of illustration, Lord Steyn at paras. 101-2 made the following
observations:
"The potential consequences of a decision in
favour of the Attorney General are far-reaching ...
... If the Attorney General is right, the 1949 Act could
... be used to introduce oppressive and undemocratic legislation. For example,
it could theoretically be used to abolish judicial review of flagrant abuse of
power by a government or even the role of the ordinary courts in standing
between the executive and citizens. This is where we may have to come back to
the point about the supremacy of parliament. We do not in the United Kingdom have an uncontrolled constitution as the Attorney
General implausibly asserts. In the European context the second Factortame
decision ... made that clear ... The classic account given by Dicey of the doctrine
of the supremacy of parliament, pure and absolute as it was, can now be seen to
be out of place in the modern United Kingdom. Nevertheless, the supremacy of
Parliament is still the general principle of our constitution. It is a
construct of the common law. The judges created this principle. If that is
so, it is not unthinkable that circumstances could arise where the courts may
have to qualify a principle established on a different hypothesis of
constitutionalism. In exceptional circumstances involving an attempt to
abolish judicial review or the ordinary role of the courts, the Appellate
Committee of the House of Lords or a new Supreme Court may have to consider whether this is constitutional
fundamental which even a sovereign parliament acting at the behest of a
complaisant House of Commons cannot abolish."
[93] Similar sentiments were expressed by other members of the
committee, notably Lord Hope, Baroness Hale and Lord Brown (at paras.
122, 159 and 194 respectively), and at paras. 104-107 Lord Hope discussed
in some detail how the once-absolute sovereignty of Parliament had over the
years suffered gradual step-by-step erosion. For the purposes of the appeal in
question, however, which invited a ruling on the construction of the Parliament
Act 1911, it was not necessary for their Lordships to go further and define the
circumstances (if any) in which it might, for today's purposes, be thought open
to the courts to review the validity of Westminster primary legislation. While
not closing the door on the possibility of intervention if the most extreme of
circumstances were, unhappily, to arise in the future, there was no need
positively to assert the existence, or the limits, of any such entitlement in
current conditions. The general rule therefore remains that Acts of the
sovereign Parliament at Westminster are not susceptible to judicial review on
common law grounds.
[94] According to the first respondent, however, it was to the
primary character of legislation, rather than the sovereign status of the
legislature, that one must look as the determining factor in this area. In Hoffman-La
Roche & Co AG v Secretary
of State for Trade and Industry 1975 AC 295, Lord Diplock (at p. 365)
highlighted the vital distinction which fell to be drawn:
"My Lords, in constitutional law a clear distinction
can be drawn between an Act of Parliament and subordinate legislation, even
though the latter is contained in an order made by statutory instrument
approved by resolutions of both Houses of Parliament.
On English authority at least, it was well settled that subordinate
legislation could always be challenged on traditional common law grounds, including
irrationality, no matter how close it came in character to primary status.
This applied even where, a fortiori of Lord Jauncey's case, a
statutory instrument was laid before Parliament, debated in both Houses and
there approved by affirmative resolution. In the absence of express provision
or necessary implication to the contrary in the enabling statute, all
subordinate legislation was potentially amenable to challenge in this way.
[95] As regards the ground of "irrationality", however, the
legislative context presented such special difficulties that the scope for
intervention by the courts was severely restricted by comparison with, for
example, the actings of statutory bodies in general or the exercise of
executive, ministerial or administrative powers and functions. In R v Secretary
of State for the Environment, ex parte Nottinghamshire County Council 1986 AC 240, at pp. 247 and 250, Lord
Scarman outlined these restrictions in the following terms:
"I cannot accept that it is constitutionally
appropriate, save in very exceptional circumstances, for the courts to
intervene on the ground of 'unreasonableness' to quash guidance framed by the
Secretary of State and by necessary implication approved by the House of
Commons ... Unless and until a statute provides otherwise, or it is established
that the Secretary of State has abused his power, these are matters of
political judgment for him and for the House of Commons. They are not for the
judges or your Lordships' House in its judicial capacity.
... examination by a court would be justified only if a prima
facie case were to be shown for holding that the Secretary of State had
acted in bad faith, or for an improper motive, or that the consequences of his
guidance were so absurd that he must have taken leave of his senses.
(Where approved by the House of Commons) ... it is not
for the judges to say that the action has such unreasonable consequences that
the guidance upon which the action is based and of which the House of Commons
had notice was perverse and must be set aside. For that is a question of policy
for the minister and the Commons, unless there has been bad faith or misconduct
by the minister ... it is no part of the judges' role to declare that the action
proposed is unfair, unless it constitutes an abuse of power in the sense which
I have explained..."
[96] These observations were subsequently considered and approved by
the House of Lords in R v Secretary of State for the Environment, ex
parte Hammersmith and Fulham London Borough Council 1991 1 AC 521.
Once again, the power of the courts to intervene on irrationality grounds was
said to arise in the most extreme circumstances only. As Lord Bridge put it (at p.
597):
"The restriction which the Nottinghamshire
case imposes on the scope of judicial review operates only when the court has
first determined that the ministerial action in question does not contravene
the requirements of the statute, whether express or implied, and only then
declares that, since the statute has conferred a power on the Secretary of
State which involves the formulation and the implementation of national
economic policy and which can only take effect with the approval of the House
of Commons, it is not open to challenge on the grounds of irrationality short
of the extremes of bad faith, improper motive or manifest absurdity. Both the
constitutional propriety and the good sense of this restriction seem to me to
be clear enough".
[97] More recently still, these matters were considered by the Court
of Appeal in R (Javed) v Secretary of State for the Home
Department 2002 QB 129. In handing down the judgment of the court (at para. 33),
Lord Phillips of Worth Matravers MR said:
"Legislation is the function of Parliament, and an Act
of Parliament is immune from scrutiny by the courts unless challenged on the
ground of conflict with European law. Subordinate legislation derives its
legality from the primary legislation under which it is made. Primary
legislation that requires subordinate legislation to be approved by each House
of Parliament does not thereby transfer from the courts to the two Houses of
Parliament the role of determining the legality of the subordinate
legislation. In Wade & Forsyth, Administrative Law, 8th Ed.
(2000) p. 854 the authors summarise the position:
'... the courts must determine the validity of delegated
legislation by applying the test of ultra vires, just as they do in
other contexts. It is axiomatic that delegated legislation no way partakes of
the immunity which Acts of Parliament enjoy from challenge in the courts, for
there is a fundamental difference between a sovereign and a subordinate law-making
power. Even where, as is often the case, a regulation is required to be
approved by resolutions of both Houses of Parliament, it still falls on the
"subordinate" side of the line, so that the court may determine its validity.
Only an Act of Queen, Lords and Commons is immune from judicial review'."
After considering inter alia the Nottinghamshire and Hammersmith
cases, his Lordship went on (at para. 50) to endorse certain comments by
Auld LJ in O'Connor v Chief Adjudication Officer 1999 ELR
209, at pp. 220-221:
"It is wrong to deduce from those dicta a
notion of 'extreme' irrationality. Good old Wednesbury irrationality is
about as extreme a form of irrationality as there is. Perhaps the thinking
prompting the notion is that in cases where the minister has acted after
reference to Parliament, usually by way of the affirmative or negative
resolution procedure, there is a heavy evidential onus on a claimant for
judicial review to establish the irrationality of a decision which may owe much
to political, social and economic considerations in the underlying enabling
legislation. Often, the claimant will not be in a position to put before the
court all the relevant material bearing on legislative and executive policy
behind an instrument which would enable it with confidence to stigmatise the
policy as irrational. Often too, the court, however well informed in a factual
way, may be reluctant to form a view on the rationality of a policy based on
political, social and/or economic considerations outside its normal competence".
[98] In what were said to be the only reported Scottish decisions in
this area since 1985 (Leech v Secretary of State for Scotland
1991 SLT 910 and 1993 SLT
365, and East Kilbride District Council v Secretary of State for
Scotland 1995 SLT 1238), Lord Caplan
and Lord Penrose in the Outer House respectively felt it appropriate to
consider the issue by reference, not only to Lord Jauncey's narrower approach
(which had not been significantly challenged on appeal), but also to the broader
view vouched by English authority. Either way the end result was the same, the
relevant challenge falling short of the exceptional character required.
Nevertheless, in my view, these decisions are instructive insofar as they bear
to reflect a recognition that the decision in the Edinburgh District Council case was perhaps too
narrowly based, and could not be reconciled with the important developments in
constitutional and administrative law which had subsequently taken place. Interestingly,
when Leech came before the Inner House on appeal, the Extra Division
appear to have accepted the competency of reviewing a statutory instrument on
grounds which, in substance, were perhaps as close to irrationality as to
anything else.
[99] Counsel for the first respondent also drew attention to a line
of decided cases involving territorial legislatures overseas which had been set
up under Imperial statutes with wide law-making powers. Stress was laid on the
plenary nature of such powers, and thereby the primary character of ensuing
legislation, notwithstanding the statutory origins of the colonial, dominion or
provincial legislature itself. The Queen v Burah 1878 LR 3 App
Cas 889 and Powell v Apollo Candle Company Limited 1885 10 App
Cas 282 were cited for the proposition that the overseas legislature was not in
any sense an agent or delegate of the Imperial Parliament but had, and was
intended to have, plenary powers of legislation as large, and of the same
nature as those of Parliament itself. The legislature was
"... restricted in the area of its powers, but within
that area unrestricted, and not acting as an agent or delegate".
Along similar lines, in Bank of Toronto and Others v Lambe
1887 12 App Cas 575, Lord Hobhouse (at p.586) observed:
"But their Lordships cannot conceive that when the
Imperial Parliament conferred wide powers of local self-government on great
countries such as Quebec, it intended to limit them on the
speculation that they would be used in an injurious manner."
And nearly sixty years later, in Singh v United Provinces 1946
AC 327, it was held that the exclusive competence of an Indian legislature was
not to be restricted by competition with prior inconsistent Crown grants. "No
court", said Lord Wright, "can annul the enactment of a legislative body acting
within the legitimate scope of its sovereign competence".
[100] It has to be said, however, that such cases were not concerned
with the question whether the validity of a legislative measure could be
judicially reviewed on the ground of irrationality. Rather they concerned the defined
scope of statutory powers conferred, in a bygone era, on overseas legislatures
enjoying exclusive or apportioned competence within territorial limits. No
issue arose as to whether legislative powers falling within that defined scope
had been exercised in a proper manner, and the decisions essentially turned on
a construction of particular Imperial and local enactments. In my view,
therefore, such cases are of no assistance on the question which I have to
determine, namely whether, in modern conditions, legislation passed by a non-sovereign
statutory parliament having non-exclusive competence over part of the United
Kingdom may be judicially reviewed on the traditional common law ground of
irrationality. Even R (Bancoult) v Foreign Secretary (No. 2)
2009 1 AC 453, where prerogative Orders in Council referable to the British
Indian Ocean Territory were held not to be immune from review on
ordinary principles of legality, rationality and procedural impropriety, does
not seem to me to be of particular assistance in that connection.
[101] By 1998 it was clear from the Nottinghamshire and Hammersmith
cases in particular that all subordinate legislation, whether formally approved
by Parliament or not, was amenable to judicial review on traditional common law
grounds including that of irrationality. Even Lord Jauncey's narrower view
recognised a wide scope for judicial review where parliamentary control of
subordinate legislation (in the form of a mandatory requirement for approval)
was absent. A fortiori the traditional common law grounds of review
extended to the acts and decisions of any public body created by Parliament and
deriving its powers from statute. Only primary legislation enacted at Westminster could be thought to enjoy complete immunity from the
courts' supervisory jurisdiction at common law. All of these matters must have
been known to Parliament at the time when SA 1998 was passed.
[102] Against
the background of the foregoing general considerations, I would now propose to
identify relevant provisions of SA 1998, to which the Scottish Parliament owes
its existence and powers; thereafter to examine the case of Adams which,
according to the respondents, was correctly decided and should be followed;
and then, against the background of the parties' competing submissions, to
discuss further considerations which appear to me to bear on the central
disputed issue.
SA 1998
[103] So far as relevant for present
purposes, sections 28 and 29, SA 1998 make provision for legislation by the
Scottish Parliament in these terms:
"28. Acts of the Scottish Parliament
(1) Subject to section 29, the
Parliament may make laws, to be known as Acts
of the Scottish Parliament.
(2) ... a Bill shall become an Act of the Scottish
Parliament when it has been passed by the Parliament and has received Royal
Assent.
...
(5) The validity of an Act of the Scottish
Parliament is not affected by any invalidity in the proceedings of the
Parliament leading to its enactment.
....
(7) This section does not affect the power
of the Parliament of the United
Kingdom to make laws for Scotland.
29. Legislative Competence
(1) An Act of the Scottish Parliament is not
law so far as any provision of the
Act is outside the legislative competence of the Parliament.
(2) A provision is outside that competence
so far as any of the following
paragraphs apply -
(a) it would form part of the law of a
country or territory other than Scotland, or confer or remove functions exercisable
otherwise than in or as regards Scotland,
(b) it relates to reserved matters,
(c) it is in breach of the restrictions in
Schedule 4,
(d) it is incompatible with any of the
Convention rights or with Community law,
(e) it would remove the Lord Advocate from
his position as head of the systems of criminal prosecution and investigation
of deaths in Scotland."
Sub-sections (3)
and (4) of section 29 make further provision relative to reserved matters,
which are themselves defined and set out in section 30(1) and Schedule 5.
The remainder of section 30 contains provisions enabling Her Majesty by Order
in Council to make necessary modifications as to reserved matters, Scottish
functions and related issues.
[104] By
section 31 it is further provided:
"31. Scrutiny of Bills before introduction
(1) A member of the Scottish Executive in
charge of a Bill shall, on or before introduction of the Bill in the Parliament
state that in his view the provisions of the Bill would be within the
legislative competence of the Parliament.
(2) The Presiding Officer shall, on or
before the introduction of a Bill in the Parliament, decide whether or not in
his view the provisions of the Bill would be within the legislative competence
of the Parliament and state his decision.
..."
Section 33 enables
the Judicial Committee of the Privy Council to consider, on a reference, the
question whether a Bill or any provision of a Bill would be within the
legislative competence of the Parliament. The possibility of a reference to
the European Court of Justice in this context is covered by section 34,
and section 35 confers power on the Secretary of State to intervene where
there are reasonable grounds for believing that a Bill would be incompatible with
any international obligations or the interests of defence or national security
or would have an adverse effect on the operation of the law as applying to
reserved matters.
[105] Sections 52
and 53 form part of a series dealing with the transfer and exercise of
functions. Devolved competence is mentioned in that connection, and section 54
makes further provision as follows:
"54. Devolved Competence
(1) References in this Act to the exercise
of a function being within or outside devolved competence are to be read in
accordance with this section.
(2) It is outside devolved competence -
(a) to
make any provision by subordinate legislation which
would be outside the legislative competence of the Parliament if it were
included in an Act of the Scottish Parliament or
(b) to
confirm or approve any subordinate legislation containing such provision.
(3) In the case of any (other) function ...,
it is outside devolved competence to exercise the function... in any way ... so far
as a provision of an Act of the Scottish Parliament conferring the function ...
would be outside the legislative competence of the Parliament."
In line with these
provisions, section 57(2) provides that, subject to the exception in
sub-section (3), a member of the Scottish Executive has no power to make any
subordinate legislation, or to do any other act, so far as .... incompatible with
any of the Convention rights or with Community law. Section 58 thereafter
confers on the Secretary of State a power of intervention similar to that
conferred under section 35.
[106] Section 98
and Schedule 6 make provision in relation to devolution issues as therein
defined. Section 100 then provides inter alia as follows:
"100. Human Rights
(1) This Act does not enable a person -
(a) to bring any proceedings in a court or
tribunal on the ground that an act is incompatible with the Convention rights,
or
(b) to rely on any of the Convention rights
in any such proceedings,
unless he would be a victim for the purposes of
Article 34 of the Convention... if proceedings in respect of the act were
brought in the European Court of Human Rights.
...
(4) In this section "act" means -
(a) making any legislation,
(b) any other act or failure to act ... of a
member of the Scottish Executive."
[107] Thereafter
section 101 provides:
"101 Interpretation of Acts of the Scottish Parliament
etc.
(1) This section applies to -
(a) any provision of an Act of the Scottish
Parliament, or of a Bill for such an Act, and
(b) any provision of subordinate legislation
...
which could be read in such a way as to be outside
competence.
(2) Such a provision is to be read as narrowly
as is required for it to be within competence, if such a reading is possible,
and is to have effect accordingly.
(3) In this section 'competence' -
(a) in relation to an Act of the Scottish
Parliament, or a Bill for such an Act, means the legislative competence of the
Parliament, and
(b) in relation to subordinate legislation,
means the powers conferred by virtue of this Act."
[108] Section
102 thereafter makes certain provisions as to the consequences of any decision
by a court or tribunal to the effect that an Act of the Scottish Parliament, or
any provision thereof, is not within the legislative competence of the
Parliament; or that a member of the Scottish Executive does not have the power
to make, confirm or approve any provision of subordinate legislation. In that
context, sub-section (2) provides:
"(2) The court or tribunal may make an order -
(a) removing or limiting any retrospective
effect of the decision or
(b) suspending the effect of the decision
for any period and on any conditions to allow the defect to be corrected."
Under sub-sections (4) and (6), intimation of such matters must be made
to the Lord Advocate and to the Advocate General for Scotland. Further remedial powers are then conferred by section 107 as follows:
"107. Legislative power to remedy ultra
vires acts
Subordinate legislation may make such provision as the
person making the legislation considers necessary or expedient in consequence
of −
(a) an Act of the Scottish Parliament or any
provision of an Act ... which is not, or may not be, within the legislative
competence of the Parliament, or
(b) any purported exercise by a member of
the Scottish Executive of his functions which is not, or may not be, an
exercise or a proper exercise of those functions."
[109] Sections
112-118 make provision for subordinate legislation and instruments. Section
126 deals with general interpretation, covering inter alia such
expressions as "enactment", "functions" and "subordinate legislation", and
under section 127 it is provided that a number of specific expressions are to
be interpreted by reference to particular provisions of the Act. Among these,
"Devolved competence (in relation to the exercise of functions)" falls to be
interpreted by reference to section 54, and "Legislative competence" by
reference to section 29.
[110] As previously noted, Schedule 4 to
the Act contains restrictions on the modification of certain enactments.
Schedule 5 concerns reserved matters. And Schedule 6 provides for
the resolution of "devolution issues" which, by paragraph 1, are defined
as comprising:
"(a) a question whether an Act of the Scottish
Parliament or any provision of an Act ... is within the legislative competence of
the Parliament,
(b) a question whether any function (being a
function which any person has purported, or is proposing, to exercise) is a
function of the Scottish Ministers, the First Minister or the Lord Advocate,
(c) a question whether the purported or
proposed exercise of a function by a member of the Scottish Executive is, or
would be, within devolved competence,
(d) a question whether a purported or
proposed exercise of a function by a member of the Scottish Executive is, or
would be, incompatible with any of the Convention rights or with Community law,
(e) a question whether a failure to act by a
member of the Scottish Executive is incompatible with any of the Convention
rights or with Community law, (and)
(f) any other question about whether a
function is exercisable within devolved competence or in or as regards Scotland and any other question arising by virtue of this Act
about reserved matters."
The decision
in Adams
[111] In Adams, the petitioners
unsuccessfully sought judicial review and consequent reduction of the Protection
of Wild Mammals (Scotland) Act 2002
by which fox-hunting with dogs was prohibited. Both common law and Convention
grounds were advanced in support of their application. Following an extended
First Hearing, however, pleas to the competency and relevancy of these grounds
were upheld by the Lord Ordinary and the petition was dismissed. In
particular, as regards the competency of the petitioners' challenge at common
law, it was held that SA 1998 provided a comprehensive framework for inter
alia the Parliament's relationship to the courts, and that on a proper
construction of its terms traditional common law grounds of judicial review
were altogether excluded.
[112] After
summarising the competing arguments on that latter issue at paras. 52-62 of
his opinion, supplemented by reference back to para. 19 where the case of Whaley
v Lord Watson was discussed in greater detail, the Lord Ordinary at para.
62 made various observations regarding the nature of the Scottish Parliament in
its legislative capacity. In his view, notwithstanding the reference in section
21 of the Human Rights Act 1998 to Acts of the Scottish Parliament being
subordinate legislation, such Acts had far more in common with public general
statutes of the United Kingdom Parliament than with subordinate legislation as
commonly understood. As a democratically-elected representative body, the
Parliament under section 28(1) enjoyed a general law-making power, except in
relation to reserved matters and the other matters specified in
section 29(2). Not only could the Parliament pass its own Acts, but it
could also amend or repeal, in their application to Scotland, pre-devolution Acts of the United Kingdom Parliament. Acts of the
Scottish Parliament, moreover, required Royal Assent to become law. They were
therefore of a character having far more in common with a public general
statute than with subordinate legislation, although they might more
appropriately be regarded as sui generis.
[113] Thereafter,
in para. 63, the Lord Ordinary went on to reach the following conclusion:
"What appears to me to be of significance is that the
Scotland Act is clearly intended to provide a comprehensive scheme, not only
for the Parliament itself, but also for the relationship between the courts and
the Parliament. I agree with the submission for the Lord Advocate that
sections 28, 29, 100, 101, 102 and Schedule 6 are definitive of the
extent of the court's jurisdiction and of the procedure to be followed when a
devolution issue is raised. It necessarily follows that traditional common law
grounds of judicial review are excluded, and that there is no room for the
implication of common law concepts in considering the legislative competence of
the Parliament. This means that it is not open to this court to find that an
Act of the Scottish Parliament (or a provision of it) is not law, unless it is
outside the legislative competence of the Parliament in one of the respects
provided by section 29, that is to say, for present purposes,
incompatibility with Convention rights".
In reaching this
conclusion, he noticed the potential complication arising from section 54 of
the Act, namely that it bears to deal with "devolved competence" quoad
subordinate legislation and the exercise of ministerial and other functions (where
an intention to exclude traditional common law grounds of review might appear
unlikely) on exactly the same basis as, and with express reference to, the
legislative competence of the Parliament itself. However, rather than treat
this complication as having a potentially important bearing on the central
issue which he had to determine, he concluded with the following observation:
"It would not be appropriate for me to express a
concluded view as to whether the effect of section 54 is to exclude
traditional grounds of judicial review in relation to subordinate legislation
within the meaning of that section, but it may be that the intention is indeed
to confine the challenge to subordinate legislation to the grounds set out in
section 29, and thus, so far as Convention grounds are concerned, to those who
can claim 'victim' status."
The parties' contentions
[114] The respondents
began by maintaining that not only the conclusion reached by the Lord Ordinary
in Adams, but also the reasoning set out in paras. 62 and 63 of
his opinion, were self-evidently correct. SA 1998 was a free-standing,
self-contained piece of legislation, and its multiple inter-connected
provisions did indeed constitute a comprehensive scheme whereby any common law
challenge to the validity of primary legislation was necessarily excluded.
[115] As the hearing progressed, however, I understood the respondents
to acknowledge that SA 1998 did not, as the Lord Ordinary had held, "...
provide a comprehensive scheme ... for the relationship between the courts and
the Parliament." External considerations were also relevant here, and all
parties' arguments ultimately proceeded on that basis. These arguments were
advanced with considerable skill, both in written submissions and in oral
debate, and were supported by an extensive citation of authority. While I have
had regard to all such arguments, and taken them fully into account, I do not
for present purposes think it necessary to do more than summarise the main
points on which emphasis was laid.
[116] According to the first respondent, the key here was the primary
status of an Act of the Scottish Parliament. This was recognised by the Lord
Ordinary in Adams at para. 62, and the significant
distinction between primary legislation, on the one hand, and subordinate or
delegated legislation, on the other, was a central feature of recent cases such
as Javed and Jackson. In a legislative context, the Scottish
Parliament enjoyed plenary powers comparable to those discussed in a range of
colonial and dominion cases (to which reference is already made at paragraphs
[99] and [100] above). Along similar lines, Acts of the Scottish Parliament should
be held equivalent to primary legislation enacted by the UK Parliament at Westminster, and where such legislation was not itself subject to
common law review there was no need for Parliament to provide for any different
situation in SA 1998. By contrast sovereignty, or the lack of it, was not
determinative. Sovereignty was an elusive concept of diminishing significance,
and in the end what mattered was the primary character of the legislation
concerned.
[117] With that in mind, section 29, SA 1998 could reasonably be read
as setting out all of the intended limitations on the legislative powers of the
Scottish Parliament. The phrase "... is not law" in sub-section (1)
strongly implied the validity of legislation which did not contravene any of
the stated limitations. The vetting, certification and reference provisions of
sections 31 and 33 were all tied in to section 29, and the same applied to
the complex procedures and safeguards introduced by sections 98, 102, 107 and
schedule 6. SA 1998 was a constitutional instrument requiring a
generous and purposive construction (cf. Robinson v SSNI 2002 NI
HL 390), and in the whole circumstances it was inconceivable that Parliament
had intended to expose primary legislation in Scotland to the possibility of challenge on common law grounds.
[118] It would, moreover, be strange if Westminster legislation on non-reserved matters with the consent of the Scottish
Parliament (by virtue of section 28(7) and the "Sewel motion" procedure)
were immune from any "irrationality" challenge while, on the petitioners'
argument, that would not apply to identical legislation by the Scottish
Parliament itself. The effect of excluding common law challenges here would in
any event be insignificant, since almost all potential grievances could be
focused under the Convention by virtue of section 29(2)(d) and recourse to
the courts was specifically available in that connection. Academic writings in
this area did not support the petitioners, treating the issue as, at best,
debatable. More importantly, the case of Whaley v Lord Watson on
which the petitioners placed so much reliance was readily distinguishable. The
Inner House were not there concerned with a challenge to primary legislation on
the ground of irrationality, but with the validity of an internal Order
promulgated from Westminster. It was in that very different context
that their Lordships plainly took exception to a supposed ouster of the court's
jurisdiction. The petitioners' argument would in any event give rise to
serious practical difficulties, not least with regard to the criteria by which
"irrationality" must be judged, and the extent to which the court might be
drawn into unwarranted scrutiny of matters properly falling within the
democratic mandate of the Parliament.
[119] While formally adopting and re-asserting the foregoing
submissions, counsel for the third to tenth respondents went on to present a
bold and innovative approach along slightly different lines. This was, he
maintained, an issue of high constitutional importance where, for perhaps two
centuries, the courts had disclaimed any power to review the validity of UK primary legislation. SA 1998 was a constitutional
instrument of immense social and political significance for the whole of the United Kingdom: cf. R v HMAdvocate 2003 SC PC 21,
esp. per Lord Rodger at para. 50. It set up, not a local authority, but a
parliament competent to pass primary legislation with direct Royal Assent. As
the Lord Justice General (Lord Dunedin) had observed in Mortensen v
Peters 1906 14 SLT 227, at p. 230:
"For us an Act of Parliament duly passed by the Lords
and Commons and assented to by the King is supreme and we are bound to give effect to its terms."
This reflected a distinct Scottish constitutional tradition which had, at
least in post-Union times, set its face against any review of primary
legislation. Lord Jauncey's decision in the Edinburgh District Council case was consistent with that approach, as was the
decision of Lord Keith in the earlier case of Gibson v Lord
Advocate 1975 SC 136. The old concept of
sovereignty was no longer a satisfactory basis on which to distinguish the UK
Parliament from the Scottish Parliament. What mattered in modern conditions
was that new, coherent arrangements had been set up whereby the sovereignty of
the UK Parliament was modified by a series of constitutional statutes which
could not be repealed by implication. Under these arrangements, the supremacy
of primary legislation was challengeable only in such limited circumstances as
might be approved by Parliament itself. It would be both inappropriate and
dangerous for any court to go beyond what was specifically permitted by section
29, SA 1998. Any lack of deference to the Parliament's democratic mandate
would be a move into uncharted waters, and might potentially compromise the
independence of the judiciary. No "juristocracy" could be allowed to assert control
over parliamentary legislation and, whatever views might (surprisingly) have
been expressed in Jackson, the extent of permissible review was a
matter for Parliament and not for any court to regulate.
[120] With
these important considerations in mind, the absence of any express mandate in
SA 1998 for judicial review on traditional common law grounds was fatal to the
petitioners' position, as was the clear implication to be derived from the
terms of section 29. Where, in current conditions, the Scottish Parliament was
not dominated by any controlling party, there was even less reason to subject
its primary legislation to the supervisory jurisdiction of the courts. The
unprecedented and unconstitutional step of holding an Act of the Scottish
Parliament amenable to judicial review on traditional common law grounds must
be avoided. By contrast, as confirmed in Javed and other cases,
secondary legislation was in an entirely different position, reflecting the
reviewable will of the Executive rather than that of the Parliament.
[121] Returning
to the terms of SA 1998, the exclusion of review for "procedural
invalidity" in section 28(5) was merely a belt and braces provision akin to
article 9 of the Bill of Rights 1689. Section 40(3) and (4),
excluding certain remedies against the Scottish Parliament, had been modelled
on the Crown Proceedings Act 1947, and their effect was not necessarily
diminished by the recent case of Davidson v Scottish Ministers
2006 SC HL 41. Of real significance were the complex procedural safeguards
built into the 1998 Act. Prime examples were schedule 6, regulating the
means by which devolution issues must be determined, and section 102 regulating
the consequences of certain court decisions. Such special arrangements, it was
said, further confirmed the intended limits of review by the courts, and it
would be extraordinary if these could all be bypassed in the manner suggested
by the petitioners.
[122] For all
of these reasons, the respondents' position was that the Lord Ordinary in Adams
had reached the correct conclusion, and that the petitioners' purported
challenge to the 2009 Act on the ground of irrationality should be dismissed as
incompetent.
[123] In
response, the learned Dean of Faculty stressed that the Scottish Parliament was
not sovereign, and that a devolved power to act irrationally could not
seriously have been intended. Contrary to the submission of the third to tenth
respondents, the question was not whether an express limitation in this area
could be found in SA 1998. The true position was that, in the absence of clear
words or necessary implication to the contrary, an obligation to act rationally
must be presumed. There was, moreover, a wealth of authority at the highest
level affirming the supremacy of the rule of law over all legislation other
than primary Acts of the UK Parliament at Westminster. The respondents' contentions were in direct conflict with such
authority and also with the settled principle whereby, along similar lines,
fundamental rights of the subject, including a right of access to the courts,
could not be excluded by implication. The Lord Ordinary in Adams had been unable to point to any
express provision in SA 1998 which precluded the review of legislation on
traditional common law grounds, nor had he identified any sound basis on which
such review might be excluded by necessary implication.
[124] Importantly,
in the context of vires or competence, sections 29 and 54 of the Act assimilated
subordinate legislation to primary, leaving the respondents without any
rational explanation as to why the former was, but the latter should not be,
amenable to review on traditional common law grounds. The obvious answer,
consistent with principle and authority, was that both categories of
legislation enacted by a statutory parliament were amenable to common law
review.
Discussion
[125] With the utmost respect to the Lord
Ordinary in Adams, I
find myself unable to share his conclusion on competency in this case. To my
mind the respondents' concession was well-founded, to the effect that SA 1998
could not be regarded as embodying "... a comprehensive scheme ... for the
relationship between the courts and the Parliament", and so while section 29 of
the Act plainly does not include irrationality among the specified limits on
legislative competence I do not regard that as in any way fatal to the
petitioners' position. The issue is surely not whether a duty on the
Parliament or on Ministers to act rationally, or the availability of traditional
common law grounds of review, is expressly spelled out. It would be unusual to
find such provisions in any statute and, significantly, SA 1998 makes no such
provision with respect to subordinate legislation where ex concessu both
the duty and the remedy apply. In my judgment, the real question here is
whether the Act contains anything sufficient, whether by clear words or
necessary implication, to oust the fundamental supervisory jurisdiction of the
courts at common law and thus - in the absence of any relevant procedural
framework - make the Parliament the sole judge of the rationality of its own
legislation.
[126] A preliminary consideration worth noting is that, in its short
existence, SA 1998 has given rise to a significant volume of litigation in
which key provisions have been the subject of widely divergent judicial
interpretation. To take a recent example, the case of Somerville raised
issues as to the relationship between SA 1998 and the Human Rights Act 1998,
and in particular questioned whether, as a matter of construction,
Convention-based challenges and issues of time-bar in that connection fell to
be regulated by both Acts interchangeably or by one to the exclusion of the
other. The decision of the Inner House was to the effect that the Human Rights
Act regime (which alone contained time-bar provisions) must prevail. By a
majority of 3:2 the House of Lords reversed that ruling, with their Lordships'
opinions as to the construction of SA 1998 revealing deep divisions and
uncertainties. Lord Scott, for example, at paragraph 78 of his dissenting
speech, said:
"So, in my opinion, it comes to this. Either section
100(3) is contemplating a claim to damages pursuant to section 7(1) HRA - in
which case the sub-section achieves nothing; such an action would in any event
have been subject to section 8(3) and (4). Or the appellants are right in
contending that section 100(3) requires imputing to Parliament the intention,
in enacting the sub-section, to create a new cause of action for damages for breach
of a Convention right where the breach has had the result that an act of one of
the Scottish institutions was ultra vires and thus unlawful but when no
delict has been committed. My Lords, after much hesitation and an embarrassing
number of changes of mind, I prefer the first of these alternatives. I prefer
the alternative that assumes Parliament, like Homer, to have nodded, to the
alternative that assumes Parliament to have intended, without expressly saying
so, the creation of an entirely new and independent cause of action in
damages. I think section 100(3) was simply intended to make clear that any
action for damages brought in respect of an act alleged to be ultra vires
because incompatible with a Convention right would be subject to section 8(3)
and (4) HRA. I do not find the answer that that would have been clear anyway -
which I agree it would - sufficient to deflect that conclusion. My reason is
the unacceptability of the premise on which the alternative argument rests.
Section 100(3) does not, in my opinion, warrant the implication of the
creation by the SA of an independent cause of action in damages. It is perhaps
pertinent to note that sub-section (3) was not in the Bill when introduced in
Parliament, in January 1998. The provision came in late, on 6 October 1998, by amendment. The Bill received the Royal Assent on
19 November 1998."
[127] More pertinently, there was substantial agreement among their
Lordships that, however "self-contained, self-understanding and
self-controlled" SA 1998 might appear to be, it did not provide, within
its four walls, a fully comprehensive or definitive scheme for the regulation
of challenges to the validity of legislation or functions. Lord Hope,
with whom Lord Walker agreed, said (at paras. 17, 18 and 28):
"The Scotland Act may reasonably be expected ... to
contain everything that is needed by way of legislation for the proper working
out of the system that it lays down. It has not been suggested that it lacks
anything that is needed to give effect to the restrictions on devolved
competence in any respect other than in regard to the Convention rights. It
can be assumed that in every other respect the Act was drafted against the
background of the remedies that are available in domestic law to deal with acts
that are outside the competence of any body that is exercising powers given to
it by statute, informed by decisions of the European Court of Justice as to the
need for a domestic remedy in the case of acts that are incompatible with
Community law... It did not need to make provision for them because these
remedies were already available...
Moreover, in the case of acts or failures to act that
are incompatible with the Convention rights, the Scotland Act contains its own
system for dealing with the incompatibility in a way that gives effect to the
Convention. The system is the same as that for any other act or failure to act
that is said to be outside devolved competence. A statutory authority has no
power to do anything that is outside its competence. Issues as to whether or
not an act or a failure to act is outside devolved competence because it is
incompatible with the Convention rights are treated as devolution issues for
the purposes of section 6, in just the same way as any other act or failure
to act. The same remedies were assumed to be available as in the case of any
other ultra vires act. ...
In my opinion the inference that is to be drawn from
the way ... (sub-sections 100(1) and (3)) are expressed is that it was assumed by
Parliament that all that needed to be done to protect the Convention rights in
the case of pre-commencement enactments in the devolved system was to provide
that the exercise of functions in a way that was incompatible with the
Convention rights was outside devolved competence (section 54(3) SA). ... There
was no need to say anything about the remedies that might be obtained in
respect of an act or failure to act of a member of the Scottish Executive that
was outside competence except where this was because of an incompatibility with
Convention rights."
Along similar lines, Lord Scott (at para. 77) expressed the view
that
'... any enactment of the Scottish Parliament, any
subordinate legislation made by the Scottish Ministers or the Scottish Executive,
any act of the Scottish Executive or a member of the Scottish Executive may be
challenged on the ground that it was outside devolved competence or otherwise ultra
vires".
At para. 119, Lord Rodger recorded a concession on behalf of the
Scottish Ministers to the effect that, where appropriate, other private law
remedies would be open where Convention rights had been infringed. And at para. 180,
Lord Mance agreed with Lord Hope that since the Act must be taken to have
been drafted against the background of domestic and Community law remedies it
did not need to make provision for these.
[128] Admittedly, their Lordships in Somerville were concerned
primarily with the remedies which might be available following a successful
Convention-based challenge, but in my opinion their observations are of some
significance in weakening any notion that the scheme enacted under SA 1998
was "comprehensive". Basic common law rights and remedies would, it was held,
continue to apply notwithstanding the absence of (unnecessary) express
provision to that effect in the Act.
[129] At para. 14 of his speech in Somerville, Lord
Hope further noted that the competence of the Scottish Ministers was
limited in exactly the same way as that of the Scottish Parliament. As he put
it,
"The expression 'devolved competence' is
defined by section 54. Sub-section (2) of that section restricts the
devolved competence of the Scottish Ministers with regard to making,
confirming, or approving of subordinate legislation to what would be within the
legislative competence of the Scottish Parliament. Sub-section (3) imposes the
same restriction on the devolved competence of the Scottish Ministers in the
case of the exercise of any other function that they may exercise...".
At para. 15 his Lordship went on to describe section 57(2) as
reinforcing, in the context of provisions about the devolved competence of the
Scottish Ministers generally, the restriction which section 29(2)(d)
imposed on the legislative competence of the Scottish Parliament. Similarly,
at para. 94, Lord Rodger noted that essentially the limitations on
the powers of the Scottish Parliament and the Scottish Executive were similar.
[130] With such considerations in mind, it is appropriate to return to
the traditional grounds on which the acts or omissions of any public authority
created by statute may be subject to judicial review. These are conveniently
summarised by the Lord Ordinary in Adams in the terms quoted at paragraph [89] above, and embrace the three
key categories of "illegality", "procedural impropriety" and "irrationality". Looking
at the matter broadly, the concept of "illegality" may appear to be the
counterpart of the "devolved" or "legislative" competence for which express limits
are set in SA 1998. Section 29 defines the scope of the Parliament's
legislative powers, and there is no dispute here that an Act of the Scottish
Parliament may be judicially reviewed on grounds of illegality, or excess of
power, where the specified limits are exceeded. Similarly, "procedural
impropriety" may appear to match the "procedural invalidity" which by
section 28(5) is expressly excluded as a competent ground of review in
that context. The question then arises as to whether, expressly
or by necessary implication, SA 1998 excludes the possibility of judicial
review under Lord Diplock's third head of "irrationality".
[131] As
previously discussed, the statute was enacted against a background of (i)
primary legislation of the sovereign Parliament of the United Kingdom at
Westminister being altogether immune from review by the courts on any ground
other than an alleged violation of European Community law or of Convention
rights; (ii) subordinate legislation, whether approved by Parliament or not,
being amenable to judicial review on inter alia all of the traditional
common law grounds including irrationality; and (iii) every public body owing
its existence and powers to statute being equally amenable to the common law
supervisory jurisdiction of the courts. The new Scottish Parliament would be a
non-sovereign public body owing its existence and powers to a statute liable to
amendment or repeal. Its legislative competence extending to part of the United Kingdom would be subject to the
continuing sovereignty of the Westminster Parliament. Even in a Scottish
context, the legislative powers of the new parliament would be non-exclusive. Unlike
the Westminster Parliament, the Scottish Parliament would be disabled from
passing any enactment at variance with the European Convention on Human
Rights. And in such circumstances there would inevitably be scope for debate on
the true status of relevant legislation. If the Scottish Parliament was
intended to be the first UK statutory body for two centuries or more to be
wholly immune from judicial review on traditional common law grounds, it would (assuming
the competency of such a measure) have been easy for SA 1998 to spell that
out in clear and unambiguous terms. Had the intention been for the new devolved
legislature to enjoy all or even part of the immunity traditionally attaching
to the sovereign Parliament at Westminster, this could equally have been made the subject of explicit
provision. But that did not happen. SA 1998 contains no hint of an express
provision bearing to exempt Acts of the new statutory Parliament from the
possibility of judicial review on the ground of irrationality. And, for
reasons to which I will come in a moment, the terms of the Act do not seem to
me to support any necessary implication to that effect either.
[132] As a matter of settled principle,
fundamental rights of the subject (including appropriate recourse to the courts
for review of parliamentary, executive or administrative acts or omissions) may
not be overridden except by the express words of a statute or by necessary implication.
In Pyx Granite Co Ltd v Ministry of
Housing and Local Government 1960 AC 260, Viscount Simonds expressed
the principle succinctly in a well-known passage (at p. 286):
"... the subject's recourse to Her Majesty's courts for
the determination of his rights is not to be excluded except by clear words.
That is ... a 'fundamental rule' from which I would not for my part sanction any departure."
Later decisions affirming the existence of "constitutional", "basic" or
"fundamental" rights, including the right of access to a court, are noted in Watkins
v SSHD 2006 2 AC 395 (at paras. 24 and 58 in particular), and in R
(Anufrijeva) v SSHD 2004 1 AC 604 the principle was again applied by
the House of Lords in the context of an asylum ruling which was not communicated
to the claimant and had therefore gone unchallenged. According to the
Secretary of State, the ruling took immediate effect whether communicated or
not. At para. 26 of his speech, Lord Steyn described the right of an
individual to challenge administrative decisions in the courts as "... an
application of the right of access to justice" and as "a fundamental and
constitutional principle of our legal system". He then quoted with approval from
the speech of Lord Hoffmann in R v SSHD,
ex parte Simms 2000 2 AC 155 (at p. 131) in the following terms:
"... fundamental rights cannot be overridden by general
or ambiguous words. This is because there is too great a risk that the full
implications of their unqualified meaning may have passed unnoticed in the democratic
process. In the absence of express language or necessary implication to the
contrary, the courts therefore presume that even the most general words were
intended to be subject to the basic rights of the individual. In this way the
courts of the United Kingdom, though acknowledging the sovereignty of
Parliament, apply principles of constitutionality little different from those
which exist in countries where the power of the legislature is expressly
limited by a constitutional document."
[133] At para. 30, Lord Steyn went
on to quote from the speech of Lord Diplock in R v Commission
for Racial Equality, ex parte Hillingdon LBC 1982 AC 779 (at p. 787)
to the effect that
"... Where an Act of Parliament confers upon an
administrative body functions which involve its making decisions which affect
to their detriment the rights of other persons or curtail their liberty to do
as they please, there is a presumption that Parliament intended that the
administrative body should act fairly towards those persons who will be
affected by their decision."
Had Parliament intended to override that presumption here, and in so
doing deny or even materially restrict fundamental common law rights of access
to justice, it seems to me that SA 1998 would have had to spell that out
in clear and unambiguous terms.
[134] In Whaley v Lord Watson the general application of
the rule of law, and the jurisdiction of the courts to review the lawfulness of
parliamentary, executive and administrative action, were robustly affirmed by
the Inner House in the specific context of SA 1998. On the particular
question arising in that case, namely whether an MSP promoting a private member's
Bill was in breach of parliamentary financial interest restrictions, the
Lord Ordinary had essentially held that the Parliament was the master of
its own internal rules and procedures, and that "... this court should not even
look at it on grounds of irrationality". At the same time, however, he held
open the possibility that if there was a fundamental irrationality in the
Parliament's approach to legislation, that might be challengeable as exceeding
the limits of legislative competence.
[135] On appeal, the Inner House strongly asserted the court's
jurisdiction and powers, highlighting some of the obvious differences in
constitutional status as between the Scottish and United Kingdom parliaments.
At pp. 348-9, the Lord President (Lord Rodger) said:
"The Lord Ordinary gives insufficient weight to the
fundamental character of the Parliament as a body which - however important its
role - has been created by statute and derives its powers from statute. As
such, it is a body which, like any other statutory body, must work within the
scope of those powers. If it does not do so, then in an appropriate case the
court may be asked to intervene and will require to do so, in a manner
permitted by the legislation. In principle, therefore, the Parliament like any
other body set up by law is subject to the law and to the courts which exist to
uphold that law. ... Subject to the restrictions in section 40(3) and (4)),
... the court has the same powers over the Parliament as it would have over any
other statutory body and might, for instance, in an appropriate case grant a
decree against it for the payment of damages. ... Some of the arguments of
counsel for the first respondent appeared to suggest that it was somehow
inconsistent with the very idea of a parliament that it should be subject in
this way to the law of the land and to the jurisdiction of the courts which
uphold the law. I do not share that view. On the contrary, if anything, it is
the Westminster Parliament which is unusual in being respected as sovereign by
the courts. ... By contrast, in may democracies throughout the Commonwealth, for
example, even where the parliaments have been modelled in some respects on Westminster, they owe their existence and powers to statute and
are in various ways subject to the law and to the courts which act to uphold
the law. The Scottish Parliament has simply joined that wider family of parliaments.
Indeed I find it almost paradoxical that counsel for a member of a body which
exists to create laws and to impose them on others should contend that a
legally enforceable framework is somehow less than appropriate for that body
itself.
Members of the Scottish Parliament hold office by
virtue of the 1998 Act and, again, their rights and duties derive ultimately
from the Act. Qua members of the Parliament just as in all the other
aspects of their lives, they are in general subject to the law and to the
decisions of the courts. ... (Subject to certain restrictions in sections 40(4),
41 and 42), ... the law applies to members in the usual way.
(Subject to the restrictions previously mentioned), ...
the inference must be that ... the law applies in the usual way to both the
Parliament and to members of the Parliament. ... While all United Kingdom courts
which may have occasion to deal with proceedings involving the Scottish
Parliament can, of course, be expected to accord all due respect to the
Parliament as to any other litigant, they must equally be aware that they are
not dealing with a parliament which is sovereign: on the contrary, it is
subject to the law and hence to the courts."
A forcefully-worded opinion along similar lines was delivered by Lord Prosser
at pp. 357-8, and the dissent of Lord Morison related to a different
issue in the petitioners' favour. As Lord Morison put it at p. 370,
"The enforcement of (a person's rights) by the
courts may of course be limited by provisions excluding or restricting the
court's jurisdiction, such as those which are provided in section 40 of
the Act, but I can find nothing in the Order or in the Act which even implies,
let alone expresses, any such restriction in the present case".
[136] Drawing all these disparate threads together, I consider that the
disputed issue of competency in this case must (as anticipated in Clyde and
Edwards, Judicial Review, at para. 7.23) be resolved in the petitioners'
favour. This conclusion seems to me to accord with principle and authority,
with the legislative background to SA 1998, and with a fair and proper
reading of the statute itself. Had the provisions of SA 1998 regarding
primary legislation been framed along different lines, the respondents might
have had a stronger argument at their disposal. It might not, in theory, have
been inconceivable for the sovereign parliament at Westminster to intend the new devolved parliament in Edinburgh to enjoy the same level of immunity as it had itself always enjoyed, and
some indication of that intention might have appeared in the Act. Legislative
and devolved competence could, for example, have been treated on a distinctly
different basis in sections 29 and 54, or some adverse reference to common law
review might have been included. Certain of the points made by the
Lord Ordinary in Adams might then perhaps have carried greater
resonance, and an implied exclusion of the court's jurisdiction might have been
easier to justify.
[137] In my judgment, however, a key feature of SA 1998 for
present purposes is that it bears to assimilate legislative and devolved
competence quoad, on the one hand, primary
legislation and, on the other, subordinate legislation and the acts and
functions of individuals. In these latter respects there is no reason to think
that the Westminster Parliament intended to exclude the rule of law, the
jurisdiction of the courts and the potential for review where no such exclusion
had applied before. Judicial review is often sought against the Scottish
Ministers on inter alia common law grounds, and indeed the unlimited reviewability
of subordinate legislation and the acts and functions of individuals is a
matter of concession in these proceedings.
[138] With that
in mind, it is of particular significance that the special regime for
devolution issues under schedule 6 cannot apply to any application for review
on traditional common law grounds. The definition in paragraph 1 of the
schedule is not wide enough for that purpose. If that is the case with regard
to admittedly competent review applications directed against subordinate
legislation or the acts and functions of individuals, then in my view there ceases
to be any substance in the respondents' argument based on the inclusion of such
a regime in SA 1998. As acknowledged in the case of Somerville,
the search for appropriate procedures and remedies must necessarily extend
beyond the four corners of the Act, and against a background of inconsistent
draftsmanship I do not think that any worthwhile contrary inference can be
drawn from any of the provisions on which the respondents sought to rely.
[139] If ex
concessu the provisions of SA 1998 (including section 54) dealing
with subordinate legislation and executive acts and functions are insufficient
to oust the ordinary review jurisdiction of the courts on common law grounds,
then in my view it is hard to identify any sound basis of construction on which
such jurisdiction should be held excluded quoad the Parliament's primary
legislative function under sections 28 and 29. Indeed, as it seems to me, the inclusion
of section 28(5), expressly excluding challenge on procedural invalidity
grounds, strongly implies that other traditional grounds of judicial review were
intended to remain open and available. And even accepting that the purpose of section
29 is to define the Parliament's devolved powers quoad primary
legislation, and thereby to set the boundaries for review under the head of
"illegality", I can see no obvious reason why the language of the section (including
the phrase "... is not law") should be construed as having any wider effect than
that. It is section 28(5), and not section 29, which excludes judicial review
on the traditional ground of procedural impropriety; no equivalent exclusion
of irrationality as a ground of review appears anywhere in the Act; and I am
not persuaded that there is scope, in section 29 or elsewhere, for any necessary
implication to that effect. As
their Lordships pointed out in Somerville, the provisions of
SA 1998 go no further than was thought necessary to achieve particular
objects, and quoad ultra the Act must be taken
to have been drafted against the background of the rule of law, the supervisory
role of the courts, and the various remedies already available under ordinary
law and practice.
[140] According to the respondents, certain anomalies might (on the
petitioners' approach) be thought to arise in connection with the statutory allocation
of functions as between the United
Kingdom and Scottish
Parliaments. I do not, however, think that this contention is entitled to much
weight. For example, even if Westminster legislation on Scottish issues with
the consent of the Scottish Parliament (under section 28(7) and the "Sewel
motion" procedure) were (notwithstanding possible agency considerations) held
to be immune from review on common law grounds, that would to my mind simply
reflect the unique constitutional position which the sovereign Parliament at
Westminster has always enjoyed.
[141] A final point taken by the respondents was that the express
availability of review on Convention grounds under section 29(2)(d) must here
be deemed sufficient, the proposition being that such grounds may on their own be
thought to afford a petitioner ample protection. However, as Lord Steyn
pointedly observed in the Anufrijeva case (at paras. 27-28):
"... the Convention is not an exhaustive
statement of fundamental rights under our system of law. Lord Hoffmann's
dictum (in Simms, quoted at paragraph [132] above) applies to
fundamental rights beyond the four corners of the Convention.
... This view is reinforced by the constitutional
principle requiring the rule of law to be observed."
Similarly, in Watkins (at para. 64), Lord Rodger described
the Human Rights Act as providing "... a rough equivalent of a written code of
constitutional rights, albeit not one tailor-made for this country", and went
on to say:
"In general, at least, where the matter is
not already covered by the common law but falls within the scope of a
Convention right, a claimant can be expected to invoke his remedy under the
Human Rights Act rather than to seek to fashion a new common law right ..."
With such observations in mind, I can see no good reason why long-established
common law challenges based on illegality and/or irrationality should not
co-exist side by side with their Convention counterpart spelled out in
section 29(2)(d) of the Act.
Extent of review
[142] Having reached the conclusion that the petitioners' common law
challenge to the validity of the 2009 Act may competently be advanced, it now
remains to consider the extent of review which may be thought appropriate in
that context. While it is true that the Scottish Parliament is a non-sovereign
public body owing its existence and powers to statute, it is nonetheless a
democratically-elected parliament. The Acts which it passes are in the nature
of primary legislation for Scotland, and except as provided in SA 1998 such
Acts are not subject to supervision or control from Westminster. Their primary status is also confirmed by direct receipt of the Royal
Assent. For these reasons, among others, I am inclined to agree with the Lord Ordinary
in Adams that such legislation may appropriately be
regarded as sui generis. On that basis, the scope for common law review
of an Act of the Scottish Parliament can in my opinion be no wider, and may
even be narrower, than the review permitted in respect of United Kingdom subordinate legislation carrying direct parliamentary
approval. At best for the petitioners, therefore, and drawing strength from
the guidance of the House of Lords in the Nottinghamshire and
Hammersmith cases, I conclude that (in the words of Lord Bridge) the
2009 Act "... is not open to challenge on the grounds of irrationality short of
the extremes of bad faith, improper motive or manifest absurdity."
[143] Like Lord Bridge in Hammersmith, I am persuaded of the
constitutional propriety and good sense of the foregoing limitation, and would
be concerned if any more liberal approach were to lead the courts into
unwarranted scrutiny of the democratic legislative process. Demands for the recovery
of parliamentary materials might prove difficult to control if the scope for
"irrationality" review were to be too loosely defined, and any departure from
the clear line laid down by the House of Lords might risk leaving the courts
with no workable stopping point short of the wide review appropriate to the acts
and decisions of ministers, public bodies and administrative tribunals. To my
mind such a result would be both undesirable and constitutionally
inappropriate.
[144] Even if, in the particular circumstances of this case, I had
been persuaded to take a contrary view in the respondents' favour, I would
still not have been prepared to close the door on the possibility that, if
extreme circumstances were ever to arise in the future, the courts would
require to intervene in defence of the rule of law and the fundamental rights
and liberties of the subject. In today's climate there is of course no reason
to fear any such development, but if, hypothetically, a Scottish Parliament
were ever to legislate in a manner which could be described as a flagrant and
unconstitutional abuse of power, it is to my mind unthinkable that the courts
should have no option but to hold themselves powerless to intervene. In this
respect, as it seems to me, the sentiments expressed by a number of their
Lordships in the Jackson case relative to the United Kingdom
Parliament must apply with at least equal force to the Scottish Parliament as
established under SA 1998.
Conclusion
[145] For all
of these reasons I regard the respondents' arguments on the competency of common
law review as unsound and, to that extent, find myself in respectful disagreement
with the views of the Lord Ordinary in Adams.
V. Article 6 of the Convention
The issues
arising
[146] On this
aspect of the case, the petitioners sought to take advantage of a series of
Strasbourg decisions to the effect that a violation of article 6 might
arise where a State interfered, by means of legislation, with the judicial
determination of a current dispute. Although in some cases the State was a
party to relevant proceedings, and had unlawfully intervened to prevent its
opponents from winning, the respondents conceded that the principle could
potentially apply even where proceedings did not directly involve the State as
a party. Any partisan legislative interference favouring one party over
another, and thus undermining the equality of arms, might cause article 6
to be engaged. A leading case in this area was Zielinski &
Others v France 2001 31 EHRR 19, where legislation "... had quite
simply endorsed the State's position in the proceedings that had been brought
against it and that were still pending in the ordinary courts." At para. 57,
the Court set out the relevant principle in these terms:
"The Court reaffirms that while in principle
the legislature is not precluded in civil matters from adopting new
retrospective provisions to regulate rights arising under existing laws, the
principle of the rule of law and the notion of fair trial enshrined in
Article 6 preclude any interference by the legislature - other than on
compelling grounds of the general interest - with the administration of justice
designed to influence the judicial determination of a dispute".
And at para. 59, the Court decided the case against the French State on the ground that the legislation
"... in reality determined the substance of the dispute
... (and) ... made it pointless to continue the proceedings."
[147] Importantly, the principle applied only to retrospective
legislation, in the sense of a measure which affected the resolution of some
pre-existing dispute, and I understood parties to agree that if a violation of
article 6 were to be established here it was only quoad pending
proceedings that the 2009 Act might be invalidated. Other cases to which I was
referred in this context (although not all of them were decided under
article 6) were Powell & Rayner v United Kingdom 1987 9
EHRR 241; Stran Greek Refineries (previously cited at paragraph [45]
above); Pressos Naviera Compania SA v Belgium 1995 21 EHRR 301;
National & Provincial Building Society & Others (also cited at
paragraph [45]); Preda & Dardari v Italy, ECHR, 23
February 1997; Smokovitis v Greece, ECHR, unreported, 11 April
2002; Agoudimos & Cefallonian Sky Shipping Co v Greece 2003 36 EHRR 131; Maurice
(already cited at paragraph [50]); Lecarpentier v France,
ECHR, unreported, 14 February 2006; Achache v France, ECHR, unreported,
3 October 2006; and A v Scottish Ministers 2001 SC 1 and
2002 SC PC 63. The cases of Achache and Lecarpentier were of
particular interest in that the principle was there applied, against strong
Government opposition, where the French State had no
direct involvement in the litigation concerned.
[148] According
to the petitioners, the Zielinski principle applied in the circumstances
of this case. By passing the 2009 Act with retrospective as well as
prospective effect, the Scottish Parliament had intentionally interfered with
the judicial determination of several hundred pleural plaques claims which had,
since about 2006, been sisted to await the outcome of the Rothwell test
cases. The Act had disabled the Scottish courts from ruling on the critical
issue as to whether pleural plaques were actionable; in a partisan manner the
Parliament had legislated in favour of the pursuers' interest in the affected
actions; and (as in Zielinski, Stran, Smokovitis, Agoudimos and
other cases) the substance of the parties' dispute had been rendered
unwinnable by defenders and their insurers. The effect of this interference
was, moreover, to "reconfigure" past indemnity insurance contracts in such a
way as to impose new liabilities for which premiums were never taken. These
features were, it was said, sufficient to engage article 6 in the present
case, and in the absence of any "... compelling grounds of the general interest" to
justify what the Parliament had done a violation of the article must
necessarily follow.
[149] In reply,
the respondents advanced three principal reasons why article 6 was not
engaged here at all. First, the Zielinski requirement for
"designed" interference with existing litigation was not met where the
retrospective element of a statute was only incidental to its primary
prospective purpose. Second, the principle did not extend beyond
legislation overriding the whole subject-matter of pending proceedings so as to
make them unwinnable by an opposing party. And perhaps most importantly, third,
it was well settled that article 6 concerned only disputes or
"contestations" to which a particular claimant was a party, and by the judicial
resolution of which that party's civil rights and obligations would be
decisively determined. Since none of these features was present in this case,
the petitioners' purported complaint under article 6 was without
foundation and should be dismissed. In any event esto, contrary to
these submissions, article 6 were thought to be engaged, the 2009 Act was
indeed justified by "... compelling grounds of the general interest" and
accordingly no violation of the article had occurred.
[150] Against
that general background, the parties were in dispute as to the true nature,
purpose and effect of the 2009 Act. The petitioners focused on the Act's
undoubted effect on several hundred sisted actions, contending that their own involvement
in these actions was sufficiently close and direct to bring article 6 into
play. The Scottish Ministers had plainly set out to overrule the decision of
the House of Lords in Rothwell, to ensure that that decision was not
applied in a Scottish context, and to disable the Scottish courts from ruling
on the actionability issue. This could be seen from many of the legislative
materials produced, notably those discussed between paragraphs [25] and [38]
above. As explained in production 6/21, for example:
"It is possible that the courts might look
to the HoL Judgment in (Rothwell) as authority in relation to claims in
respect of other asymptomatic asbestos-related conditions...
Scottish Ministers do not wish this to happen...".
[151] As an
afterthought, it was said, the respondents had sought to play down these
self-evident features, maintaining instead that the true legislative intent had
been (i) to dispel uncertainty arising from the Rothwell ruling north of
the border, and at the same time (ii) to ensure that pleural plaques claimants
in this jurisdiction would continue to receive compensation in accordance with
two decades of past practice. In the petitioners' submission the "myth of
continuity" should be rejected. Production 6/78/2 showed this to be a
conscious diversion where in truth the legislation altered the law, or medical
fact, or both. Present and future claimants could found no legitimate
expectation on the strength of past concessions to others which Rothwell
had shown to be misplaced. Where Scottish settlements and reported decisions
dated back only to the 1990s, the overall number of conceded claims cannot have
been substantial.
[152] Fairly
viewed, the 2009 Act imposed an unconscionable burden on the insurance industry
and, quoad the sisted actions in particular, represented illegitimate State
interference in pending proceedings. The effect had been to "reconfigure" past
indemnity insurance contracts so as to impose liabilities which were not
originally in contemplation. The Minister on 9 September 2008 had explicitly
identified the sisted actions as the true object of the legislation
(production 6/27/11), and
the final stage 3 debate on 11 March 2009 had closed with the same Minister's tendentious remarks about the
profits and taxation of insurance companies. The latter could well afford to
fund this exercise, he seemed to be saying, so the Parliament need not
seriously concern itself with cost considerations. There was no legitimate
justification for what the Parliament had done. "Compensation" should not go
to those who had suffered no harm. A fortiori substantial sums should
not go to the firm of solicitors by whose special pleading the legislation was
promoted. And on no view should the petitioners and others be called upon to
fund such wanton philanthropy out of private resources.
[153] The
actions to which the Zielinski principle applied had been sisted to
await the judicial outcome of Rothwell, and could not properly be
dissociated from the wider dispute of which Rothwell formed part. Since
pursuers in such actions had no legitimate expectation beyond whatever
conclusion might be reached by the House of Lords, it was unnecessary and inappropriate
for Parliament to have legislated retrospectively in their favour.
Retrospective legislation was intrinsically undesirable, and the Zielinski
principle was at once brought into play where, as here, sisted actions were not
excluded from the operation of the Act. As conceded by the first respondent in
argument, the legislation was designed, in part, to affect them. It was no
answer for the respondents to plead that such actions could not be left out in
the cold. Parliament had not properly considered whether to legislate at all,
nor whether actions still unresolved should be among the categories excluded
under section 4(3).
[154] The
respondents' approach on this aspect of the case was radically different.
According to them, a decision of the House of Lords on test cases raised under
English law was not strictly binding in Scotland. This created uncertainty as to the position under Scots law, and
a lengthy period might elapse before an authoritative judicial ruling could be
obtained. In that context, obiter remarks of the Lord Ordinary in Wright
carried no weight. The Parliament was entitled to take the view that such
uncertainty was undesirable and should be brought to an end. As confirmed in
the case of Driza (at para. 63), legal certainty was a principle
favoured by the Strasbourg Court. The Parliament was also entitled to take the view, based on
social and economic considerations, that the 20-year compensation regime interrupted
by Rothwell should be restored. Scotland had an extensive and distressing legacy of asbestos-related disease
in her communities, and it was fundamentally wrong that when so many sufferers
had received damages in the recent past the same relief should now be denied to
others in the same position. Thus as early as 29 November 2007
(production 6/54/22), the Cabinet Secretary for Justice had confirmed the
Government's decision to introduce a Bill in the Parliament "... to reverse the (Rothwell)
Judgment and enable those negligently exposed to asbestos who have been diagnosed
with pleural plaques to continue to be able to raise and pursue actions for
damages in Scotland."
[155] Significantly,
the Act was intended to benefit all those diagnosed with pleural plaques and/or
other specified asbestos-related conditions. Its main focus was prospective,
even as regards the sisted actions, and the vast majority of affected claims
would post-date the coming into force of the Act in June 2009. The
retrospective provision in section 4(2) was of universal application,
benefiting all claimants and not just those in a particular class. By
mirroring the deemed retrospective effect of the House of Lords decision in Rothwell
this would, in the Parliament's view, avoid any possibility of Rothwell
applying in unforeseen circumstances. At the same time, however,
section 4(2) would inter alia cause limitation periods to run from
dates in the past, and the relief available under section 3(2) was only
partial. Taking all such considerations into account, no rational distinction
could be drawn between the sisted actions and post-Act claims to which
article 6 had no current application. The Parliament's dilemma was
whether the benefits of the Act should be denied to the sisted claimants alone.
[156] In that
context, some two decades of practice in favour of pleural plaques sufferers
could not be left out of account. The effect of the Act was to restore clarity
and certainty to the situation in Scotland. The Parliament had acted swiftly, so that there would be no
opportunity for claimants' legitimate expectation to dissipate, nor for the
uncertainty caused by Rothwell to become more acute. The overall
purpose was to be deduced primarily from the Act itself, and this showed that
the intended benefits were universal and prospective; that beyond removing the
bar on actionability, the Act did not affect the merits of pending or future
claims; that the position of defenders and their insurers was not mentioned; and
that the effects were far less intrusive than in any of the cases on which the
petitioners had sought to rely.
[157] In any
event, cases such as Zielinski, Stran, Smokovitis and
Agoudimos concerned legislation specific to issues already focused in particular
proceedings to which the State was usually a party. It would at a stroke become
futile for the opposing party to proceed further. Such features were not
present here. The 2009 Act was not specifically directed towards any
particular action or claimant, sisted or otherwise, but instead sought to
confer universal benefit upon all those diagnosed with any of the specified
conditions. With or without the assistance of section 19A of the Prescription
and Limitation (Scotland) Act
1973, as amended, or of section 3(2) of the 2009 Act, some of the sisted
claimants would still be in a position to re-raise proceedings if the necessity
arose. This demonstrated the artificiality of the petitioners' attempt to
invalidate the Act by focusing on sisted actions as if they stood alone.
[158] While
adopting these contentions, counsel for the third to tenth respondents further stressed
that a Parliament was entitled to be partisan, and to be influenced by
lobbying. There was nothing wrong or unusual about that. Parliament had a
democratic mandate to legislate, as it saw fit, in the interests of the whole
community or of particular sectors however small. Opponents who failed in the
political arena had no general right to pursue their grievances in court. The
rule of law must not be confused with rule by lawyers.
[159] An
important feature to be borne in mind was that not all former employers facing
pleural plaques claims were in the private sector. The Ministry of Defence,
government departments, local authorities and nationalised industries were also
involved, but had not sought to challenge the 2009 Act. Moreover, not all
private sector employers were insured. The petitioners were thus seriously
mistaken in treating the 2009 Act (and seeking its reduction contra mundum)
as if only insured interests were affected. The Act had been passed by the
Parliament in good faith and on legitimate grounds. It covered inter alia
conditions to which the House of Lords decision in Rothwell did not
relate. There was no evidence as to whether actionability had been put in
issue in any of the sisted actions, nor indeed as to whether any relevant
insurance policies were engaged. In the whole circumstances, there was no reason
to exclude the sisted claimants from benefit under the Act.
[160] Moreover,
the true purpose of sections 3(2) and 4(2) was to ensure the effectiveness of
what was primarily a forward-looking measure. Without section 4(2), there
would be increased uncertainty regarding the effects of Rothwell in Scotland; sisted claimants might suffer
unjust discrimination; the engagement of past insurance arrangements might be
open to argument; and (through the postponement of limitation) stale claims
might be facilitated. In the petition it was averred that the Act fixed the
petitioners with a liability which they would not otherwise have borne. The
Act did no such thing. All actions remained live on the issues of employment,
exposure, negligence, causation, quantum and limitation. The
petitioners' civil rights and obligations were unaffected. And in the whole
circumstances the Zielinski principle had no application.
Discussion
(i) Preliminary
[161] Despite having upheld the
admissibility of the petitioners' Convention claims, I have ultimately reached
the view that their reliance on article 6 is misplaced and that no
violation of the rights guaranteed by that article has been established. There
were, however, times during the hearing when I felt a measure of sympathy for
the petitioners' position. Treating the sisted actions in isolation and as if
they stood alone, the Parliament might well be perceived as having legislated,
in some haste, in order to disable the Scottish courts from ruling on the
disputed issue of actionability and, in that context, from being influenced by
the House of Lords decision in Rothwell. This was the general tenor of
Government statements at an early stage, especially those reflected in productions
6/21 and 6/54/22, and although neither the Scottish Ministers nor any
government department were parties to any pending action it seems clear that this
legislation was actively promoted by the solicitors who acted for the majority
of claimants. By passing the Bill into law, the Parliament had arguably
endorsed the claimants' position and made it futile for defenders and their
insurers to pursue the actionability issue.
[162] As
matters progressed, however, the more I came to question the correctness of such
impressions, and I am now persuaded (in line with the respondents' submissions)
that the Zielinski principle is not engaged in this case, and that in
any event no violation of article 6 has been established.
(ii) Engagement
[163] Fundamentally, article 6 applies only to current
disputes or "contestations" which concern a party's civil rights and
obligations, and inter alia precludes any interference with court
proceedings by which such rights and obligations would be decisively
determined:
"For Article 6(1) to be applicable to a case
('contestation') it is not necessary that both parties to the proceedings
should be private persons... The wording of Article 6(1) is far wider; the
French expression 'contestations sur (des) doroits et obligations de caractère
civil' covers all proceedings the result of which is decisive for private
rights and obligations. The English text 'determination of ... civil rights and
obligations', confirms this interpretation... (The) Regional Commission's
decision was to be decisive for the relations in civil law ('de caractère
civil') between Ringeisen and the Roth couple. This is enough to
make it necessary for the Court to decide whether or not the proceedings in
this case complied with the requirements of Article 6(1) of the Convention.": Ringeisen
v Austria (No. 1) 1979-80 1 EHRR 455 (at para. 94.) ...
"... The phrase in question covers 'all proceedings the
result of which is decisive for private rights and obligations' ...
... the Court considers that a tenuous connection or
remote consequences do not suffice for Article 6(1) in either of its
official versions ('contestations sur'; 'determination of'): civil rights and
obligations must be the object - or one of the objects - of the 'contestation'
(dispute); the result of the proceedings must be directly decisive for such a
right"; Le Compte & Others v Belgium 1982 4 EHRR 1 (at
paras. 44 and 47) ...
"The Court finds that the applicants' right to develop
their property in accordance with the applicable laws and regulations was
'civil' within the meaning of Article 6(1). It is furthermore clear that there
was a 'genuine and serious' dispute (contestation) between them and the
authorities regarding the lawfulness of the impugned decisions and that the
outcome of this dispute was directly decisive for that right. Article 6
was accordingly applicable ...": Fredin v Sweden 1991 13 EHRR 784 (at para. 63).
"The Court further reiterates that a person cannot complain
about a violation of his or her rights in proceedings to which he or she was
not a party...": Meltex (at para. 66).
Thus no-one but a party to some pending dispute or "contestation" can
claim the protection of the article, and then only if the outcome of relevant
proceedings would be decisive of his civil rights and obligations.
[164] In my judgment the petitioners fall short of meeting these
qualifying requirements. For locus standi purposes under article 34, the issue was whether they could claim to
be "directly affected by the impugned measure", namely the 2009 Act, and in
that connection the closeness of their involvement in pleural plaques
litigation (through which the effects of the Act would be felt) was a relevant
consideration. They have now had the opportunity to persuade me, for substantive
article 6 purposes, (i) that the close involvement which they claimed in
pleural plaques litigation should be held equivalent to party status; (ii)
that the outcome of pleural plaques actions should be deemed decisive for their
own civil rights and obligations as indemnity insurers; and (iii) that the
2009 Act relevantly interfered with the judicial determination of such
proceedings. In all of these respects I consider that the petitioners have
been unsuccessful.
[165] However
close the involvement of insurers in pleural plaques litigation, the fact
remains that it is only former employers charged with negligence who enjoy
party status. It is only the delictual rights and obligations of such employers,
in a question with former employees, which may be decisively determined in
these proceedings. The contractual rights and obligations of the petitioners,
in a question with their insured, are not in issue. No dispute or
"contestation" is pending on such matters. Should any such dispute or
"contestation" arise in the future (which would seem highly unlikely if the
petitioners were to maintain their position on "reconfiguration" of past
policies), the assertion and enforcement of contractual indemnity obligations
would have to be pursued in separate proceedings at the instance of an insured
employer or alternatively a successful pursuer under the Third Parties (Rights
against Insurers) Act 1930. In this context I regard it as significant that
while the learned Dean of Faculty bore to concede, "...for present purposes",
that the 2009 Act had had the desired effect of "reconfiguring" past insurance
obligations, he did not seek to vouch that apparent concession with reference
to any particular policy or policies and was reticent as to what might be
argued in any different legal context. For their part, the respondents were
sceptical of an unvouched concession which did not relate to any argument
advanced by them, and in all the circumstances (and as further discussed at
paragraphs [195], [243] and [244] below) I do not feel able to reach any
conclusion as to how far, if at all, the application of particular policies may
in due course be affected by the provisions of the 2009 Act.
[166] On these
grounds alone, I am unable to hold that article 6 of the Convention is
engaged in the circumstances of this case. In my judgment the principles
affirmed in Ullah and subsequent cases (discussed in chapter II above) are
binding on me here, and serve to restrain any temptation to take the
interpretation of article 6 into uncharted waters beyond the limits of current
Strasbourg jurisprudence. On
that basis, there can be no engagement of article 6 where the petitioners
are not parties to affected proceedings, and a fortiori where the only
proceedings in existence cannot be deemed decisive of the petitioners' civil
rights and obligations.
[167] In
reaching the foregoing conclusion, I place no reliance on the absence of direct
evidence of a formal challenge to actionability in any of the sisted actions. Since
the whole point of sisting these actions (with the agreement of relevant
insurers) was to await the outcome of the Rothwell test cases, it may
reasonably be inferred that actionability was then recognised as a live issue.
Such proceedings are in any event likely to have been sisted at an early stage,
before full defences could be lodged, and in my view that is a further reason
why the respondents' argument here was unrealistic and cannot now be sustained.
[168] I am also
unwilling to rely on the fact that the impact of the 2009 Act is essentially
limited to the issue of actionability, leaving all other issues arising in
pleural plaques litigation to be determined by the court. It is true that in a
number of important cases in this area the whole substance of a particular
dispute was rendered unwinnable from the aggrieved party's point of view. Offending
legislation "... effectively excluded any meaningful examination of the case",
and made it "... pointless to carry on the litigation": (cf. Zielinski
(at para. 59); Stran (at para. 49); Smokovitis (at
para. 26); and Agoudimos (at para. 33)). However, I do not
think that the Zielinski principle can sensibly be restricted in that
way. As Lord Nicholls of Birkenhead observed in Wilson v First County Trust Ltd (No 2) 2004 1 AC 816 (at para.
35):
"Human Rights conventions are concerned with
substance, not form, with practicalities and realities, not linguistic
niceties. The crucial question in the present context is whether, as a matter
of substance, the relevant provision of national law has the effect of
preventing an issue which ought to be decided by a court from being so
decided."
In the National
& Provincial Building Society case, moreover, the Court (at
para. 112) discussed the Zielinski principle in these terms:
"... the Court is especially mindful of the dangers
inherent in the use of retrospective legislation which has the effect of
influencing the judicial determination of a dispute ..., including where the
effect is to make pending litigation unwinnable".
In my view, these
observations serve to confirm that Zielinski is wide enough to cover
legislative interference with the judicial determination of any material
issue comprised within a pending dispute. The respondents' suggestion that all
material issues would have to be affected seems to me to go too far, especially
in the context of pleural plaques litigation where actionability is clearly a
matter of exceptional importance.
[169] In the
respondents' favour, however, it seems to me that the Zielinski doctrine
is subject to an important additional limitation which compounds the petitioners'
difficulties. Given the apparent width of decisions such as Achache and
Lecarpentier, and the consequent agreement of parties, I am not here
concerned with any supposed necessity for the State to be a party to affected
proceedings. Nor am I concerned with any issue as to the retrospectivity of
legislation, because in that context Zielinski appears to require
nothing more than that a new Act should interfere with the judicial resolution
of an existing dispute. Retrospectivity in that sense is helpfully discussed
by Lord Rodger in Wilson v First County Trust Ltd (esp. at
para. 198), and for Zielinski purposes the claimed interference may
otherwise be entirely prospective in its effects. As I see it, the really important
limitation arises from the use of the word "designed" in the final sentence of
para. 57 of the Court's opinion in Zielinski. Taken together with
the word "interference", and with the Court's emphasis on "method and timing"
in para. 58 of the same decision, that seems to me to import something in
the nature of deliberate intent on the part of the legislature. The principle
is not satisfied on a simple cause and effect basis. The Court did not refer
to "legislation affecting", but to "interference ... designed to influence", and
in my view that is a distinction of great significance.
[170] It is
well settled that the Convention, and in particular article 6, does not in
general seek to restrain legislation in the public interest, even where that
may affect existing rights and obligations:
"... The Court is especially mindful of the
dangers inherent in the use of retrospective legislation which has the effect
of influencing the judicial determination of a dispute to which the State is a
party... However, Article 6(1) cannot be interpreted to prevent any
interference by the authorities with pending legal proceedings to which they
are a party." National
& Provincial Building Society (at para. 112), cited with approval by the Lord President
(Rodger) in A v Scottish Ministers 2001 SC 1 (at para. 97) ...
"The Convention sets out a series of general
principles and expresses in only a general way the rights and freedoms that it recognises.
In respecting and safeguarding those rights and freedoms, individual
legislatures have a wide margin of appreciation, or of discretion, that the Strasbourg court will respect, except where the exercise of that
discretion is manifestly unreasonable": Adams v Scottish Ministers 2004 SC 665, per the Lord Justice
Clerk (Gill) at para. 26 ...
"... the concept of 'public interest' is by its nature
broad. ... The Court, considering it normal that legislators should have a degree
of latitude in order to carry out economic and social policies, respects the
way in which the legislators conceive the requirements of 'public interest',
except in instances where their judgment is shown to be manifestly without any
reasonable basis": Lecarpentier (at para. 44); cf Maurice
(at para. 84) ...
"... national legislatures are not, in principle,
prevented by art 6 from intervening in civil cases to amend the existing legal
position by means of an immediately applicable law": OGIS-Institut
Stanislas & Others v France, ECHR 27 May 2004, noted in Lester &
Pannick, Human Rights Law and Practice, 3rd Ed., at p. 309.
[171] In Preda & Dardari, the Court had to consider the
situation of a statute which excluded earlier periods of national service for
the purposes of assessing the career structure and salary of teachers. The
claimants had already raised court proceedings to have the whole of their
national service declared relevant, and indeed these proceedings were concluded
before the legislation came into force. In rejecting, as manifestly without
reasonable foundation, the claimants' application alleging a violation of
article 6, the Court held (at p.5):
"Contrary to what occurred in (cases such as Stran
and Zielinski), the legislature in this case did not intervene until after
the proceedings brought by the applicants had ended. The legislature's
intention was not to interfere with the applicants' case but to ensure equal
treatment of all those in the same position as the applicants, whether or not
they had brought judicial proceedings to establish their entitlement. ... The
Court considers that there is nothing to indicate that the State had had the
intention of intervening, in a manner contrary to Article 6, in the
original proceedings brought by the applicants".
The legislation there had been enacted in good faith and for a legitimate
purpose affecting all teachers equally.
[172] Along similar lines, in the National & Provincial
Building Society case, the applicants' claim failed on the grounds (i) that
the legal actions at their instance had to be viewed as part of a campaign
intended to frustrate the Government's advertised legislative programme; and
(ii) that while the effect of the disputed legislation was undoubtedly to bring
these actions to an end there was, in the circumstances, no breach of article
6(1). As the Court pointed out at para. 112, the interference was of a
much less drastic nature than that which had been held to breach
article 6(1) in Stran. The applicants' judicial review proceedings
had not even reached the stage of an inter partes hearing. The
authorities, moreover, had compelling public interest motives to legislate as
they did, including a desire to dispel uncertainty as to the tax position in
and beyond the United Kingdom. The first two applicant building
societies were not, it was said (at para. 110), particular targets of the
authorities' decision.
[173] Against that background I am unable to regard the 2009 Act as a
"designed" interference falling within the proper scope of the Zielinski
principle. During the legislative process, no doubt, the Minister and others
made occasional reference to the sisted actions and other "backed-up" claims,
and obviously the Parliament did not leave them out of account when passing the
Bill. However, the best indication of legislative intent is to be found in the
terms of the 2009 Act itself (cf Wilson v First County Trust Ltd, per
Lord Nicholls at para. 67), and everything about that Act suggests
that it was designed for the universal benefit of all individuals currently or
prospectively diagnosed with any of the specified conditions. It is
essentially a forward-looking measure following the final resolution of the Rothwell test cases in the House of Lords. The great majority of beneficiaries will emerge over
the next few decades and, by comparison, it is a relatively small number (perhaps
measured in the low hundreds) whose claims actually reached court before 17 June 2009. There is nothing in the Act, or in the legislative
papers, to show that the Parliament was interested in any particular action or
actions. For legislative purposes the number and identity of existing claimants
were not material considerations, nor the grounds of action, nor the defenders'
response, nor even the stage which proceedings had reached before being
sisted. There is nothing to indicate that the Parliament perceived the
slightest difference between claims raised just before, or alternatively just
after, 17 June 2009, nor indeed between sisted court actions
and what seems to have been a larger number of claims merely "backed up" with
solicitors. The legislation would, it seems, have been in the same terms if
the sisted claims had been measured, not in hundreds, but in scores or dozens,
or even if there had been no sisted claims at all. No doubt sections 3(2) and
4(2) were intended to have retrospective effect, but again their terms apply
without restriction to all claimants, present and future, and I am unable to
read them as directed towards claimants in any restricted category.
[174] In any event, it seems to me that the Parliament was well
entitled to include the sisted actions within the scope of the legislation. Influential
throughout the legislative process was the consideration that pleural plaques
sufferers had been receiving damages over a lengthy period before the Rothwell
test cases came to court. Actions were apparently first sisted in 2006, and as
Lord Rodger mentioned in Rothwell (at para. 79) many such claims
will have been settled in the years before that. For the future, the Act was
perceived as allowing sufferers to claim damages as before, and in addition it would
dispel uncertainty as to the effect of the Rothwell decision in Scotland. With these aims in mind, there was no obvious reason why claimants who had happened to raise
proceedings in advance of the Act should have been excluded from what was plainly
intended to be universal benefit. Such proceedings having in any event been
sisted to await the outcome of the Rothwell test cases, I think that the
learned Dean of Faculty may have been correct in submitting that they could not
realistically be "decoupled" from Rothwell itself. In Preda and
Dardari (at p. 5) the Court pointed out:
"... that in civil proceedings Article 6 of the
Convention does not provide that final judgments shall not be overridden".
If, on that basis, the 2009 Act did not offend against the Zielinski
principle where Rothwell had already been finally decided, it is in my
view strongly arguable that it should not be held to offend against Zielinski
quoad the sisted actions either.
[175] In any event, standing the protection afforded by
section 3(2) of the Act, there was (with hindsight) perhaps no need for actions
to have been raised and sisted at all. Many others were merely "backed up"
with solicitors at the same time. Under the latter sub-section and/or
section 19A of the Prescription & Limitation (Scotland) Act 1973, as
amended, many sisted claimants might well be in a position to re-raise
proceedings now if that should prove necessary. A reasonable assumption,
moreover, is that these actions were all sisted early and without reaching any
form of inter partes hearing, and there is of course no evidence as to
the existence or scope of any defences. On the sists being recalled, pre-Act
and post-Act claims may be expected to proceed on precisely the same footing.
[176] When pressed on these matters, the learned Dean of Faculty said
that his complaint was not so much to do with the inclusion of sisted actions,
as opposed to claims in other categories, but with the Parliament's decision to
pass this legislation at all. For Zielinski purposes, however, the true
question is in my view whether any interference with the outcome of existing
proceedings was justified, and it is interesting to recall how, according to
the petitioners at one stage of the debate, the Parliament's proper course
would have been to widen the scope of section 4(3) of the Act and exclude the
sisted actions alone from benefit.
[177] Taking all these considerations into account, I am not persuaded
that there was anything wrong with the Parliament's decision to legislate here
for the benefit of all pleural plaques sufferers whose claims had not yet been
determined. In A v Scottish Ministers, the applicants had been
the subject of criminal proceedings in which each was found to be suffering
from some form of mental disorder warranting detention in hospital. Relying on
ill-considered legislation, two of them petitioned the sheriff for release on
the ground that they were no longer treatable. While the first of these petitions
was already pending, but had not yet been determined, the Scottish Parliament
legislated to introduce public safety as a further ground on which continued
detention might be justified. The applicants sought review of this new
legislation, contending that it unwarrantably interfered with the judicial
determination of their applications to the sheriff, and when the case came
before the Privy Council reliance was placed on article 5 of the
Convention (right to liberty) and also on the Zielinski principle. In
that latter context, holding that the new legislation was justified by
"compelling grounds of the general interest", Lord Clyde (at para. 73)
said:
"The legislation was aimed not just at the two appellants,
but at all those who, like them, had committed crimes of the most serious kind
... and had a history of mental disorder which might be held to be untreatable. ...
The risk (to public safety on their discharge) was an imminent one and
if a remedy was to be provided it was necessary to provide it speedily. ... Given
the importance of the objective it does not seem to me unreasonable or
disproportionate for the Parliament to have so designed the solution as to make
it applicable to those who had not yet obtained a ruling from the sheriff even
if they had already applied for one".
By analogy, in my view, it was not unreasonable or disproportionate for
the Parliament to have so designed the 2009 Act as to make it applicable to
those whose claims had not yet been determined even if an action had already
been raised.
(iii) Justification
[178] As it seems to
me, these considerations are amply sufficient to justify the conclusion that
the Zielinski principle is not engaged in this case. However, even if I
were mistaken on that score, I consider that the respondents would still be
entitled to succeed on the alternative basis that their election in favour of
the sisted claimants was proportionately made on "... compelling grounds of the
general interest". This was the approach favoured by the Inner House and Privy
Council in A v Scottish Ministers, and as repeatedly emphasised throughout
the Strasbourg jurisprudence a court must respect the
legislature's judgment as to what is in the general or public interest unless that
judgment be "manifestly without reasonable foundation". Even viewing the
respondents' claimed justifications with the "... greatest possible degree of
circumspection" (all as more fully discussed in chapter VI below), I am
satisfied that the relevant tests are met in the circumstances of this case. As
already indicated, there was every reason for the Parliament to legislate for
the universal benefit of all those diagnosed with a specified condition whose
claims had not yet been determined, and none at all to discriminate against a
relatively small group on whose behalf legal proceedings had barely been
commenced.
Conclusion
[179] For all of these reasons, the
petitioners' claim insofar as based on article 6 of the Convention is
dismissed.
VI. Article
1 of the First Protocol
The issues
arising
[180] Article 1
of the First Protocol to the Convention (hereinafter "A1P1") provides as
follows:
"Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No-one shall be deprived of his
possessions except in the public interest and subject to the conditions
provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any
way impair the right of a State to enforce such laws as it deems necessary to
control the use of property in accordance with the general interest or to
secure the payment of taxes or other contributions or penalties."
Over the years
there has been much debate as to what may properly constitute "possessions"
capable of attracting the protection of this article. Questions have also
arisen as to (i) how any relevant interference with protected rights may be
identified; and (ii) how State compliance with the requirements of the article
may nevertheless be achieved on public interest grounds. The parties are in
dispute on all of these issues in the present case.
[181] According
to the petitioners, their "possessions" had been unlawfully interfered with in
two respects. First, the Rothwell decision in the House of Lords
was an asset of enormous commercial value and importance to the insurance
industry. They had fought for, and finally won, a complete immunity from
claims based on asymptomatic and non-disabling pleural plaques. Even on the
Scottish Government's estimates the overall value of such claims, if allowed to
proceed, would run into a nine-figure sum, whereas the insurance industry
feared liabilities measured in £billions. If, on the authorities, a
reasonably-based claim carrying a legitimate expectation of success could
qualify as an asset, and thus as a "possession" for A1P1 purposes, there was no
reason why an established immunity from claims should not also qualify. Although
appearing on opposite sides of a balance sheet, both would contribute to a "net
assets" position. The Strasbourg Court had never held otherwise, and in
principle an immunity judicially established without risk of further appeal
should rank even higher than a mere pending claim which might ultimately fail.
Hohfeld's jurisprudential analysis confirmed that rights, claims, and
immunities were all forms of economic interest. All might have a value to the
entitled party, and in seeking a declaratory judgment here the petitioners were
not only asserting an immunity but also advancing a claim.
[182] Second,
even if the immunity conferred by Rothwell did not qualify as a
"possession" for the purposes of A1P1, then the petitioners' capital resources
must surely do so. Not only would the 2009 Act deprive the petitioners of such
resources in the longer term as pleural plaques awards became payable, but its
immediate effect was already to sterilise massive reserves which, under
regulatory rules, the petitioners and other insurers required to maintain
against future liabilities. Where the sums involved were so substantial, and
the causal relationship so obvious, it would be extraordinary if A1P1 had no
application in this case.
[183] On no
view, it was said, could the 2009 Act be justified on public interest grounds.
There was no public interest in securing "compensation" for a limited class of
individuals who had in fact and in law sustained no harm, nor in diverting even
larger sums to the firm of solicitors whose special pleading was the driving
force behind the Act. In these respects the Act subverted the status quo
to the advantage of those whose legitimate expectation of a proper judicial
determination of the Rothwell test cases had already been realised.
Previous concessions (to others) by the insurance industry over a relatively
short period had been shown to be misplaced, and the respondents' "myth of
continuity" could not be supported any more than their claim that the effect of
Rothwell was to create rather than remove uncertainty. The Act was, in
truth, an exercise in wanton philanthropy at private rather than public
expense. Its effects were confiscatory in nature. The illegitimacy of this
approach was amply demonstrated by cases such as Roberts v Hopwood
1925 AC 578, Prescott v Birmingham Corporation 1955 Ch 10
and Bromley LBC v Greater London Council 1983 1 AC 768, where
local authority schemes at the expense of others had been set aside as ultra
vires. Alternatively, as confirmed in Burmah Oil Company (Burmah
Trading) Ltd v Lord Advocate 1964 SC HL 117, it was appropriate for
the Crown to pay compensation for confiscatory activity. The insurance
industry had been subjected to a disproportionate and excessive burden here,
and as revealed by the letter of 28 November 2008 (production 6/54/80) the
promoters of the Bill had even sought to suppress discussion of the
petitioners' rights. The democratic process, it was said, had been "subverted
by secrecy". And where the final stage 3 debate (production 6/36) had ended
with the Minister's deplorable reference to insurers' profits and tax
liabilities, it was clear that the incidence of cost under this legislation was
not a matter of genuine concern. The Parliament had not even attempted a fair
balancing of interests, and a clear violation of A1P1 had occurred.
[184] In reply,
the respondents disputed that any violation of A1P1 had been established in
this case. Since the interests asserted by the petitioners could not qualify
as "possessions", and since in any event no relevant interference with such
interests had occurred, the article was not even engaged. Failing that, it was
said, the 2009 Act was a legitimate measure passed in good faith on public
interest grounds, and it could not be said that its effects on remote third
parties such as the petitioners were unreasonable, disproportionate or unfair.
[185] Under
settled Strasbourg caselaw,
"possessions" denoted assets of a proprietary nature. Nothing short of that
would do. While acknowledging a limited extension in favour of soundly-based
claims (treating them as assets likely to be obtained), the Strasbourg Court had not treated a mere
immunity in the same way. An immunity, whatever its basis, was not an asset of
a proprietary nature, and a fortiori a defence or immunity against
future claims (which would themselves fail to qualify under A1P1: cf. In re
T & N Ltd 2006 1 WLR 1728, esp. at para. 153) fell well short of
what the article required. As the "Ullah principle" confirmed, the
settled scope of A1P1 could not be extended by a national court.
[186] Although
the petitioners' capital resources would no doubt qualify as "possessions", the
2009 Act did not interfere with them in any relevant manner. Conceived in
favour of individuals diagnosed with pleural plaques and other asbestos-related
conditions, the legislation merely sought to ensure that they had a cause of
action in a question with negligent former employers. Pleural plaques
litigation was not otherwise affected; defenders and their proprietary assets
were not even mentioned; and of course the position of insurers such as the petitioners
was even more remote. For anyone's proprietary interests to be affected a
given claimant would, in normal course, require to succeed on jurisdiction,
time-bar, liability and quantum. Employment, exposure, negligence,
causation and loss would all have to be proved or admitted, and in reality the
Act did no more than remove a perceived bar to pleural plaques litigation with
which the Parliament disagreed.
[187] For these
reasons, A1P1was not engaged on either of the petitioners' alternative
approaches. Esto it was, however, no violation had occurred. The
Parliament had passed this legislation in good faith and on legitimate public
interest grounds. It had been entitled to disagree with the House of Lords on
the perceived seriousness of pleural plaques, and was far better placed than
any court to judge the widespread social and economic evils of asbestos-related
exposure within Scotland's
communities. Such judgments were essentially matters of degree; questions of
mixed fact and law were involved; and the legitimate social and economic policy
objectives behind the Act could not be denied. In particular, pleural plaques
sufferers would now continue to be able to claim damages from negligent
employers, in line with the existing practice before Rothwell was
decided, and in addition the Act would swiftly remove any uncertainty arising
from the Rothwell ruling north of the border. An opportunity to
establish liability at this stage could also facilitate rapid compensation in
the event of some more serious condition developing in the future. It should
in any event be borne in mind that the House of Lords decision proceeded on
agreed facts and expert testimony which might not be reflected in future
cases. It was also reached under English law; it did not rule out the
possibility of contractual claims; it did not relate to the other
asbestos-related conditions for which the Act provided in section 2; and
several of their Lordships had expressed a measure of regret at the outcome.
[188] In the
whole circumstances, the court should be slow to interfere in matters which
fell within the Parliament's discretionary area of judgment. In the context of
Convention issues, Lord Hope in R v DPP, ex parte Kebilene 2000
2 AC 326 had (at p. 381) explained the matter in these terms:
"In this area difficult choices may have to
be made by the executive or the legislature between the rights of the
individual and the needs of society. In some circumstances it will be
appropriate for the courts to recognise that there is an area of judgment
within which the judiciary will defer, on democratic grounds, to the considered
opinion of the elected body or person whose act or decision is said to be
incompatible with the Convention. This point is well made at p. 74,
para. 3.21 of Human Rights Law and Practice (1999), of which Lord Lester
of Herne Hill and Mr Pannick are the general editors, where the area in
which these choices may arise is conveniently and appropriately described as
the 'discretionary area of judgment'. It will be easier for such an area of
judgment to be recognised where the Convention itself requires a balance to be
struck, much less so where the right is stated in terms which are unqualified.
It will be easier for it to be recognised where the issues involve questions of
social or economic policy, much less so where the rights are of high
constitutional importance or are of a kind where the courts are especially well
placed to assess the need for protection."
Many similar observations were to be found elsewhere, and it was in any
event well settled that judicial interference in matters of social and economic
policy would offend against constitutional principle, and would risk involving
the court in an inappropriate investigative role. As the petitioners appeared
to accept, decisions of the legislature as to what was in the general or public
interest should be respected unless "manifestly without reasonable
foundation": cf James v United Kingdom 1986 8 EHRR 213 (at
para. 46); Broniowski v Poland 2005 40 EHRR 21 (at
para. 149). Especially where matters of social and economic policy were
in issue, it was of real constitutional importance that the courts should not
seek to substitute their own judgment for that of a democratically elected
legislature.
Discussion
(i) "Possessions"
[189] Whatever the
position under article 34, I am not persuaded that any violation of A1P1
has been made out in this case. On the initial question whether the
petitioners can lay claim to "possessions" as that term has been interpreted by
the Strasbourg Court, it seems obvious that their substantial
capital resources must necessarily qualify. In my view, however, the same
cannot be said of the Rothwell decision on which they also seek to
rely. No doubt the insurance industry perceive that decision as a hard-won
victory having real economic value, but at the same time it was a decision
reached, with some indication of regret, under English law and on agreed
evidence which might not be replicated in future cases. It did not rule out
the possibility of successful recovery on contractual grounds, and in any event
two out of three asbestos-related conditions covered by the 2009 Act were not
directly considered. In these circumstances, I do not consider that the
petitioners are on strong ground in claiming more than a potential freedom from
further claims in a Scottish context, bearing in mind that claimants may now be
expected to go to some lengths to have Rothwell distinguished from their
own case. On different factual or expert evidence, or on different legal
grounds, a Scottish court might reach a different conclusion on the
actionability of pleural plaques, and of course Rothwell leaves all
courts free to reach their own view on conditions to which the test cases were
not directed. In my view, therefore, no vested or permanent immunity from
pleural plaques claims can be said to exist, nor can the petitioners even
assert a legitimate expectation in that area where the Parliament reacted so
swiftly to the Rothwell decision in late 2007.
[190] More importantly, A1P1 is framed in terms which denote some form
of proprietary interest capable of peaceful enjoyment. The opening sentence
strikes at any unjustified deprivation of "possessions", and the following
sentence conditionally permits a State to enforce laws "... necessary to control
the use of property". The need for a proprietary interest of some kind, or the
deemed equivalent of such an interest, has been repeatedly affirmed by the Strasbourg Court:
"Article 1 is in substance guaranteeing
the right of property. This is the clear impression left by the words
'possessions' and 'use of property' (in French: biens, propriété, usage des
biens); the travaux préparatoires, for their part, confirm this unequivocally:
the drafters continually spoke of 'right of property' or 'right to property' to
describe the subject-matter of the successive drafts which were the forerunners
of the present Article 1. Indeed, the right to dispose of one's property
constitutes a traditional and fundamental aspect of the right of property.": Marckx
(at para. 63) ...
"The Court recalls that the notion 'possessions' (in
French: biens) in Article 1 of Protocol No 1 has an autonomous
meaning which is certainly not limited to ownership of physical goods: certain
other rights and interests constituting assets can also be regarded as
'property rights', and thus as 'possessions', for the purposes of this
provision": Gasus Dosier etc GmbH v Netherlands 1995 20 EHRR 403
(at para. 53) ...
"Article 1 of Protocol No 1, which guarantees the
right to the protection of property, contains three distinct rules:
'The first rule ... is of a general nature and
enunciates the principle of the peaceful enjoyment of property; the second
rule ... covers deprivation of possessions ...; the third rule ... recognises that
contracting states are entitled, amongst other things, to control the use of
property in accordance with the general interest ...'
The concept of 'possessions' referred to in the first
part of Art. 1 of Protocol No 1 has an autonomous meaning which is
not limited to ownership of physical goods and is independent from the formal
classification in domestic law: certain other rights and interests
constituting assets can also be regarded as 'property rights', and thus as
'possessions' for the purposes of this provision": Anheuser-Busch Inc v
Portugal 2007 45 EHRR 36 (at paras. 62-63), following a long line of
earlier cases including Sporrong & Lönnroth (1982), James
(1986), Pressos (1995) and Maurice (2006).
[191] With such guidance in mind, I am unable to accept that an
immunity from claims is sufficient to bring A1P1 into play. Put shortly, it is
not a property right. Even as an interest having economic value, it is not
proprietary in nature. It cannot be equated with a claim. In balance sheet
terms, as the petitioners appeared to acknowledge, an immunity or freedom from
possible claims may have the effect of reducing liabilities but would not appear
on the assets side. In my view the fact that an individual claim may be held
time-barred, incompetent, irrelevant or factually unfounded merely preserves
the status quo from a potential defender's point of view. It does not
confer a proprietary right or interest of any kind. An individual's choice not
to proceed with a claim may again come as a welcome surprise, but the potential
defender does not in any legitimate sense own or possess that choice or the
corresponding relief. A freedom from claims cannot properly be sold or
disposed of, and it would seem illogical to speak of a party's "assets"
increasing in value by reference to the number of barred, withdrawn or
non-existent claims.
[192] A fortiori a potential immunity against future claims yet
to emerge would not in my opinion amount to a "possession" within the meaning
of A1P1. If such future claims would themselves fail to qualify, it is hard to
see why a perceived future defence should be thought to qualify either.
[193] Not surprisingly, counsel's researches identified no case in which
the Strasbourg Court had held an immunity to be a "possession"
for the purposes of A1P1. Soundly-based claims have been held to qualify where
ultimate success would generate "assets" in the form of proprietary rights or
interests. But mere freedom from claims, on whatever grounds, seems never to
have received the same treatment, and all of the available guidance is
positively adverse to such an approach. In my judgment this is again a
situation in which the principles affirmed in Ullah and subsequent cases (discussed in chapter II above) are binding on
this court, and serve to restrain any temptation to take the interpretation of
A1P1 into uncharted waters beyond current Strasbourg limits. It is not open to me, in other words, to controvert the
settled rule that only assets of a proprietary nature may qualify as
"possessions" for the purposes of A1P1.
(ii) Interference
[194] On the question whether the impact of the
legislation on the petitioners' capital resources should be deemed an
interference sufficient to engage A1P1, I am again conscious of the
difficulties which in my view made it impossible for the petitioners to rely on
article 6 and the Zielinski principle in this case. Where
legislative interference is in issue, Zielinski has sometimes been
applied in the context of A1P1 claims as well as claims under article 6.
The cases of Maurice, Achache and Lecarpentier are
convenient examples where, on essentially the same factual basis, a favourable
ruling under A1P1 rendered it unnecessary for the Court to reach a formal
decision under article 6. As previously discussed, the petitioners'
problems in that context are (i) that they cannot be regarded as parties
to any affected proceedings; (ii) that pleural plaques litigation cannot
be thought decisive of their own civil rights and obligations; and
(iii) that there is nothing to indicate that the Act was designed to
influence the outcome of pending pleural plaques actions anyway.
[195] On
broader grounds, I am not persuaded that the facilitation of pleural plaques
claims should be held to constitute a relevant interference with the
petitioners' capital resources. To my mind such consequences are simply too
remote from the legislation to qualify. It is not the Act which would cause
such claims to succeed, but proof of all the legal and factual requisites for a
monetary award. Such claims would in any event be directed against negligent
former employers, and not against insurers such as the petitioners, and plainly
the petitioners' resources would only be at risk if relevant contractual insurance
arrangements were held to be engaged at some future stage. This is of course
an area in which the learned Dean of Faculty bore to make an unvouched
concession "... for present purposes", and as discussed in other chapters of this
opinion (especially at paragraphs [165], [243] and [244]) I think that the
applicability of relevant insurance contracts must be regarded as unconfirmed.
If, under settled Strasbourg
jurisprudence, mere arguability is not enough to constitute a protected claim
for A1P1 purposes (cf. Kopeckư v Slovakia 2005 41 EHRR 43, at
para. 52), then in my view it should not be enough for interference
purposes either.
[196] However,
even if the engagement of all past policies were to be assumed in the
petitioners' favour, I would still decline to hold that any relevant
interference had been established in this case. Importantly, the Act does not ex
facie purport to deal with any party's proprietary rights. By removing a
medico-legal barrier, it allows affected individuals to assert a delictual
cause of action against negligent former employers. It does not otherwise bear
to affect the outcome of any claim. Defending interests are not mentioned, and
there is no question of the statute appropriating assets in any form. As the
respondents pointed out in the course of the debate, any piece of primary
legislation is liable to have opponents. Any statute is liable to be
disadvantageous or destructive towards someone's economic interests at some
remove. But in my opinion a line has to be drawn here between, on the one hand,
primary and immediate effects and, on the other, effects which are only secondary
and derivative. The ripples spreading outwards from a legislative measure
cannot be thought to confer or infringe legal rights to an infinite degree. If
the petitioners and other insurers could claim relevant interference, might the
same not have to be said of directors, employees, clients, customers or
creditors of uninsured defenders prejudiced by mounting liabilities? What
would be the position of those owing contractual indemnity or reimbursement
obligations to such defenders? What of those whose financial interests would
suffer if the profits of insurance companies were to fall? And what of insurance
customers whose assets might be depleted by rising premiums? In my opinion,
consistent with Strasbourg
guidance, consequences which are merely secondary and derivative cannot qualify
as relevant interference for A1P1 purposes.
[197] Further
considerations specific to insurers such as the petitioners are (i) that
any obligation incumbent on them is contractual and not delictual, flowing from
indemnity insurance policies written in the past; (ii) that such obligations
will have been undertaken in return for premiums referable to the anticipated
level of future risk; (iii) that during the period when insurers across
the UK were conceding the actionability of pleural plaques, annual premiums may
reasonably be assumed to have taken some account of future risk levels in that regard;
and (iv) that over the same period it seems certain that reserves directed
towards such risk will have been maintained. At page 16 of the petition,
it is said that reserves in excess of £3.5 billion have been set aside for
asbestos-related claims in recent years, and on the petitioners' own figures
pleural plaques claims may have represented some 65-70 per cent of the total by
2004. It therefore seems unlikely that future liabilities lack any counterpart
in premiums, or that the need to maintain reserves for pleural plaques claims
can be attributed to the Act alone. It also seems unlikely that pre-Rothwell
reserves will have been diverted or dissipated in the period since 2007 (and
the petitioners did not assert otherwise), and if that is right their claim to
legislative sterilisation looks even more tenuous and unconvincing.
[198] In the
absence of relevant "possessions" allied to relevant "interference" I am unable
to hold that A1P1 is engaged in the circumstances of this case. Once more the
principles affirmed in Ullah and subsequent cases are binding on this
court, and effectively preclude any finding in the petitioners' favour on the
interference issue. The position of insurers is simply too remote and
uncertain for that purpose.
(iii) Justification
[199] Introduction:
Even if I had taken a different view, concluding that some relevant
interference with the petitioners' "possessions" had occurred, I would still
have declined to hold that any violation of A1P1 had been made out. Although
conceding to the Parliament a "discretionary area of judgment" as discussed in Kebilene
and other cases, the petitioners maintained that there was here no
legitimate aim in the general interest to justify what had been done, nor had
the Parliament come close to striking a fair balance between community
interests and the private rights of insurers who would have to foot the bill. Justification
was for the respondents to establish, and they had failed to do so. Particular
stress was laid on the following factors:
(i) The
absence of any legitimate aim in the general interest;
(ii) irrational generosity in favour of a small group who
had, in fact and in
law, sustained no harm;
(iii) irrational submission to the will of a firm of solicitors
who stood to
gain more per claim than any individual claimant;
(iv) cynical
targeting of insurers to fund the exercise;
(v) concealment of a critical second objective of the Bill,
as evidenced by
the Scottish Government's letter of 28 November 2008;
(vi) massive unresolved uncertainties as to cost levels
throughout the
parliamentary process; and
(vii) unsatisfactory and inconsistent explanations advanced by
the
respondents at different stages of these proceedings.
But for the Act,
the reality was that all of the sisted actions would have been dismissed and
the door closed against future claims. Instead the petitioners and other
insurers were now subjected to a disproportionate and excessive burden. No
fair balance had been struck here, and a clear violation of A1P1 had occurred.
[200] As in the
context of article 6, I must confess to having had some sympathy for the
petitioners' position at different stages of the hearing. The points which
they make are not without substance, and it is unfortunate that at least some
of these may be thought to reflect the manner in which insurers and their
concerns were treated during the legislative process. In the end, however, I
am not convinced that the petitioners' contentions go far enough to entitle them
to succeed. On balance, agreeing with the respondents' submissions, it seems
to me that the 2009 Act did indeed pursue a legitimate aim in the general interest,
and that it cannot be regarded as inflicting any "disproportionate and
excessive burden" on the insurance industry. There is, in other words, a
reasonable relationship of proportionality between the means employed and the
aims sought to be realised. For convenience, although recognising a degree of
overlap with the discussion in chapter VII of this opinion, I propose to comment here on individual features
before returning to consider the wider picture.
[201] Rothwell:
Contrary to the petitioners' submissions, and as further discussed at
paragraphs [234] and [235] below, this was in my view a decision involving
issues of mixed fact and law. It was essentially a matter of degree whether
pleural plaques should be regarded as sufficiently serious, with or without
associated anxiety and risk, to meet the legal threshold for actionable harm in
a delictual context. Alternatively, it was a matter of degree whether that
threshold should be deemed sufficiently flexible to cover such conditions. As
Lord Pearce observed in the Cartledge case at p. 779 (already cited
at paragraph [5] above):
"It is for a judge or jury to decide whether
a man has suffered any actionable harm and in borderline cases it is a question
of degree. ... it is a question of fact in each case whether a man has suffered
material damage by any physical changes in his body. Evidence that those
changes are not felt by him and may never be felt tells in favour of the damage
coming within the principle of de minimis non curat lex".
And in Rothwell (at paras. 39 and 68) Lords Hope and Scott
respectively confirmed the position as follows:
"... But the use of these descriptions does not address
the question of law, which is whether a physical change of this kind is
actionable. There must be real damage, as distinct from damage which is purely
minimal..."; and
"The judge's conclusion ... that pleural plaques could
not be characterised as a disease or as an impairment of physical condition was
in part a finding of fact but also a conclusion of law. The question whether
the formation of pleural plaques suffices to complete a tortious cause of action
in negligence depends on what the law recognises as damage, not on how medical
experts may classify the condition in question."
With some indications of regret, their Lordships in Rothwell felt
unable to decide such issues in the claimants' favour, but if they had gone the
other way instead I do not think that this could have been regarded as either
irrational or outrageous. After all, responsible judges had taken that view in
other cases from about 1984 onwards; the UK
insurance industry had in practice conceded actionability since then; and in Rothwell
itself Holland J., followed by Smith LJ in the Court of Appeal, had
favoured the claimants' position.
[202] Had their Lordships affirmed Smith LJ's dissenting opinion,
pleural plaques would have continued to be actionable as had previously been
assumed or accepted. Allegedly negligent former employers would have been
exposed to a volume of such claims. Solicitors would have continued to earn
fees for necessary investigative and preparatory work. In most cases awards of
damages would have been met under indemnity insurance arrangements, and
relevant reserves would have had to be maintained in that context. Had this
been the situation, neither the petitioners nor their insured could have had
any cause for complaint, and the obvious question which comes to mind is: can
they now have any legitimate complaint where precisely the same consequences
may be thought to flow from the 2009 Act?
[203] The 2009 Act: With the greatest of respect to their
Lordships, there is nothing intrinsically unreasonable or outrageous about
legislation which seeks to alter or reverse the effects of a judicial ruling at
any level. Instances of such intervention are by no means uncommon, and on
occasion remedial legislation is expressly or by implication invited by the
court itself. For example, in Dorchester Studios (Glasgow) Ltd v Stone
1975 SC HL 56, the House of Lords called for a change in the law regarding
leasehold irritancies in Scotland, and a similar invitation was extended by
their Lordships in Cartledge where the Limitation Act 1939 was thought
to produce an unreasonable and unjustifiable result. In the present case,
however, the nearest their Lordships came to such an invitation was in
revealing a measure of disquiet that claimants would apparently be left without
a remedy.
[204] When the Parliament came to pass the Bill, MSPs clearly had the
speeches in Rothwell very much in mind, and in the end I think it can be
said with some confidence that they legislated on a fair understanding of the
relevant facts and of the existing state of the law. Certain wayward
observations are no doubt to be found among the parliamentary papers,
especially at an early stage, but judging by the terms of the Act itself allied
to ministerial statements as the legislation progressed, I am satisfied that
the Parliament did not ultimately legislate under any material error. The
plain intention, repeatedly declared from November 2007 onwards, was to restore
the pre-Rothwell position in Scotland, and that by taking a different
view, as a democratically elected legislature, on matters of degree and of
mixed fact and law which lay at the heart of the Rothwell decision. As
the Minister for Community Safety explained in evidence on 9 September 2008 (production 6/27, at p. 5):
"We are not overturning (the medical)
evidence ... We are placing a different interpretation on the evidence. We feel
that pleural plaques are not, in themselves, trivial... "
[205] That pleural plaques sufferers should continue to be able to
claim damages in Scotland was a constant refrain, as was a desire to clarify
the position without delay. To my mind both may be regarded as legitimate aims
in the general interest, and there is no reliable indication within the
parliamentary papers to suggest that these were not in good faith, and after
adequate consultation and consideration, brought to fruition when the Bill was
passed in March 2009. In the Parliament's view, pleural plaques did not
deserve to be treated as a trivial consequence of asbestos exposure. They had
not been so treated in the past when many awards of damages were made, and they
should not be deemed trivial or de minimis for
the future.
[206] On the
petitioners' approach there was something inherently unacceptable about
legislation which undermined a final decision of the highest court in the
land. On that matter, however, I am compelled to disagree. Based on its own
assessment of the severe social and economic consequences of asbestos exposure
in Scotland's communities, (matters eminently within its "discretionary area of
judgment"), the Parliament was in my view entitled to legislate here even if
that involved a departure from their Lordships' appraisal in Rothwell.
In section 8(6) of the Prevention of Harassment Act 1997, the United Kingdom
Parliament specifically allowed damages to be claimed for mere anxiety even
though the common law was then moving in the opposite direction, and I do not
believe that the Scottish Parliament was doing anything more radical or unusual
here. Beyond providing for pleural plaques to be actionable, the 2009 Act did
not alter the law of delict in any way.
[207] Alleged
irrational generosity in favour of a small group who had suffered no harm:
As already indicated, I consider that the Parliament was entitled to reach, and
then act on, its own judgment to whether pleural plaques should be deemed to
constitute relevant harm. In my view the contrary assertion which underpins
the petitioners' criticism is misplaced. Neither medical fact nor legal
principle was subverted by the Act. As regards the "small group" said to be
benefited, the likely numbers are far from clear. Conservatively, they would appear
to run into thousands or even tens of thousands, and I do not see how that can
sensibly be thought an inadequate basis for legislation in this case. As the Strasbourg Court observed in James
(at para. 45):
"... the taking of property effected in pursuance of
legitimate social, economic or other policies may be 'in the public interest',
even if the community at large has no direct use or enjoyment of the property
taken."
And more recently,
in the Countryside Alliance case (at para. 41), Lord Bingham made
the same point in a different way:
"I do not think that doubt can be thrown on the
rationale of the Act ... by showing that the underlying principle, if carried to
its logical extremes, would have justified a much more far-reaching measure."
Radiological diagnosis of pleural plaques is, of course, an essential
pre-requisite before section 1 of the 2009 Act can come into play, and contrary
to the petitioners' submissions it is the presence of these pathological
lesions and not mere exposure to asbestos which defines the benefited
class. To my mind that is a clear and rational distinction for the Parliament
to have drawn, - indeed one which may have avoided
setting an undesirable precedent for the future -, and the limited scope of the
Act also tends to confirm that it went no further than was necessary to achieve
the Parliament's underlying legislative purpose.
[208] If, then, the desire to legislate, on social and economic
grounds, in favour of pleural plaques sufferers was not per se
irrational or outrageous, and if the legislation went no further than was
necessary to benefit a reasonably identifiable group within the community, it
does not seem to me that "irrational generosity" of the kind criticised in
cases such as Roberts, Prescott and Bromley is involved here.
All of these cases can in my view be distinguished on the grounds more fully
set out in paragraph [240] below.
[209] Alleged irrational submission to the will of interested
solicitors: Although procedural invalidity is non-justiciable by virtue of
section 28(5), SA 1998, significant questions have been raised regarding the
role and influence which the Scottish Government, and indeed the Parliament
itself, allowed to Messrs Thompsons (and indeed other so-called
"stakeholders") in the legislative process. However, as appears from the
Minister's contributions during the stage 3 debate on 11 March 2009, the Parliament was clearly alert to the fee levels
involved in pleural plaques litigation, and to the need to reduce these
wherever practicable. The Parliament was also well aware that Messrs Thompsons represented a substantial proportion of all
asbestos-related claimants in Scotland. The true percentage may have been
exaggerated, but it cannot be suggested that the Parliament was unaware of that
firm's major personal interest in securing legislation on the pleural plaques issue.
[210] In reality, of course, all litigation has cost implications.
Professional fees are liable to be incurred in connection with the pursuit of
any claim, and for present purposes it is significant that the conceded
actionability of pleural plaques would, in the past, have kept expenses on that
particular issue to a minimum. At the levels discussed in the Government's
various financial memoranda, I would expect the bulk of fees to have been
incurred on other matters such as investigating and obtaining evidence on
employment, exposure, negligence, causation and loss. In some cases expense
might also have been incurred in connection with technical issues such as
jurisdiction or time-bar, but the point is that the solicitors' entitlement
would depend, case by case, on work necessarily undertaken on matters other
than the initial actionability of pleural plaques.
[211] On that approach, there can in my view be no question of the
Parliament having gratuitously diverted large sums into the pockets of solicitors
as the petitioners suggested. The Act merely removed a bar to the
actionability of certain claims, and legal fees would thereafter be a normal,
audited component of negotiations and, if necessary, judicial proceedings.
[212] Returning to the solicitors' prominent role in the legislative
process, it is beyond doubt that they lobbied tirelessly from the outset to
secure a legal disapplication of the Rothwell decision in Scotland. However, as the respondents forcefully asserted, lobbying
must be regarded as a legitimate part of the political process; the decision
to place a Bill before the Parliament could be taken only by the Scottish
Government; passing the Bill was in the hands of the Parliament alone; in all
of this the solicitors were advancing their many clients' interests as well as
their own; and the fees involved would relate to work necessarily arising in
individual cases. It is also relevant to note that during the progress of the
Bill the Scottish Government was plainly receiving independent advice from its
own Legal Directorate; and furthermore that all cost estimates included fees
incurred on the defenders' side as well.
[213] Cynical targeting of insurers to fund the scheme: In my
view a real difficulty for the petitioners here is that the 2009 Act was not in
terms concerned with anything more than the threshold conditions under which
individuals negligently exposed to asbestos might pursue claims of damages.
Initial actionability is only one element of a successful claim in this area,
and with the exception of section 3(2) (modifying time-bar rules) the Act deals
with no other. It does not determine the success or failure of any claim. It
does not bear to address the contractual position of third parties such as
insurers. It does not expropriate or confiscate anyone's assets, and even the
position of defenders receives no mention. In the end, the learned Dean of
Faculty laid particular stress on alleged sterilisation of reserves as a form
of control of use of the petitioners' property, while at the same time recognising
that such a consequence of the statute might more readily be justified than
outright appropriation.
[214] From the outset this legislation appears to have been calculated
to achieve the same end result as would have flowed from Rothwell if the
decision there had gone in the claimants' favour and the pre-existing status
quo had been maintained. In that event, claims would have proceeded against
allegedly negligent former employers. Both public and private sector defenders
would have been involved, with only some being solvent and some insured. Since
most damages claims had to date been met out of private insurance arrangements,
a decision of the House of Lords, deemed to state the common law as it had
always been, would have run little or no risk of disturbing the status quo in
that regard.
[215] Against that background, it was important that the Act should
not contain any provision liable to free insurers from any liability which
would otherwise have existed. In my judgment, that is the context in which the
Scottish Government's letter of 28 November 2008
(production 6/54/80) came to be sent. On a fair reading of its terms, it
was a complaint about unwanted complications being needlessly introduced into
the Bill and thence into the minds of opponents. No doubt the letter reflected
a desire to minimise future problems in that connection, but in my view it
cannot fairly be read as an attempt to suppress some material objective or
effect of the legislation which was not already obvious and in the public
domain. From June 2008 onwards the plain terms of section 4(2) were there for
all to see, and the ultimate liability of insurers, where relevant, was all
along at the forefront of discussions. As recorded in productions 6/26 and
6/28, insurers' representatives were well aware of the situation. There could,
after all, be no other explanation for the repeated consultations which took
place with insurers' representatives, for the special evidence session of 2 September 2008, or for the incessant evaluation and discussion of
the likely extent of the insurance risk. For these reasons the letter of 28 November 2008 strikes me as something of a red herring. The
petitioners were entitled to make as much of it as they could, but in the end I
think that their suggested interpretation was one which it could not reasonably
bear.
[216] To my mind a consideration of particular significance here is
that if it was legitimate for the Parliament to allow pleural plaques sufferers
to maintain damages claims in Scotland, it would be natural for such claims to
proceed against allegedly negligent former employers as had always been the
case in the past. The 2009 Act did not seek to introduce any change in that
regard, and accordingly did not "target" such former employers in any relevant
sense. It simply assumed that the status quo would remain unchanged,
with claims being appropriately directed against those whose negligence was
allegedly responsible. In my judgment there is nothing disproportionate or
excessive about a negligent party being held liable in damages for resultant
harm. And if that is so I have great difficulty in seeing why the same
liability should suddenly become disproportionate and excessive where the party
concerned happens to be insured. No uninsured employer or public authority has
sought to challenge this legislation as unfair or inappropriate. Significantly,
no insured employer has done so either. And in my opinion the petitioners, at
one further remove, have made out no good reason why they alone should be
entitled to a far-reaching remedy on Convention or common law grounds. Awards
of damages cannot, in other words, represent a "disproportionate and excessive
burden" in a question with the petitioners if their insured would be unable to maintain
the same contention in their own right. In any event, damages awards as such
(in sharp contrast to statutory expropriation or control measures) are not
normally thought to involve questions of proportionality in a Convention context,
and I doubt whether any such question would have arisen if the Rothwell test cases had been determined
in the claimants' favour.
[217] Concealment of a critical second objective of the Bill: As
already discussed in the context of alleged "targeting" of insurers, the letter
of 28 November 2008 cannot in my view be regarded as disclosing some
hidden objective of the legislation which was not already obvious and indeed extensively
canvassed in discussions between insurers' representatives and the Scottish
Government. Nor am I able to accept that the letter evinced an intention to
suppress discussion of insurers' responsibilities in the event of negligent
employers being found liable in damages. Such responsibilities were
necessarily contractual, arising out of insurance business written in the past,
and far from innovating in this area the 2009 Act sought to replicate the claims
situation which existed before the Rothwell test cases were decided. In
that context, as it seems to me, the Scottish Government cannot be criticised for
trying to avoid provoking discord and disagreement in an area where none had
existed before.
[218] Massive unresolved uncertainties as to cost levels: In
the debate before me it was, I think, acknowledged on all sides that estimation
of the overall costs associated with this legislation was far from
straightforward. Given the long latency period for asbestos-related conditions
including pleural plaques, it was hard to estimate the number of individuals
who might have been exposed in past decades. Moreover no-one could predict
what proportion would develop asbestos-related conditions, nor what percentage
of asymptomatic conditions would actually come to light. Judging the number of
pleural plaques claims which might emerge in future years was thus an inexact
science with many uncertain variables. Even the approximate cost per claim was
hard to pin down - understandable, perhaps, now that claims are apparently
being intimated at levels several times higher than the pre-Rothwell
average. Against that background, the Scottish Government's approach was
largely based on evidence of the current situation as modified by actuarial and
demographic considerations. The insurance industry, on the other hand, sought
to rely on UK Government estimates (which were themselves uncertain) before
taking a percentage which was said to represent Scotland. The latter approach may have allowed individual insurers to withhold
commercially sensitive data which might be of value to competitors. In these
circumstances, overall estimates ranged from perhaps £100 million, on the
Government side, to the insurers' potential maximum of £8.6 billion. If
the Scottish percentage were to be reduced, the figure of £8.6 billion
would come down as well, but that would still leave an "order of magnitude"
difference between the competing estimates.
[219] Given the inherent difficulty of producing reliable figures in
this area, and the apparent sensitivity of current data from the insurers'
perspective, it would in my view be unreasonable and unrealistic to blame the
Parliament for failing to come up with estimates less uncertain than the source
materials at its disposal. As is clear from the legislative documents
summarised at paragraphs [26] to [38] above, repeated efforts were made to
"close the gap" but without notable success. Consultation responses to a
Partial RIA were considered in and after February 2008; successive
financial memoranda and exchanges of correspondence sought to take matters
forward; attempts were made to reconcile the widely divergent figures,
latterly with actuarial assistance; the Committee could only venture an
opinion along the lines that Government estimates were liable to be on the low
side whereas insurers' estimates appeared too high; and productions 6/21 (at
para. 40) and 6/36 reflect a commitment to keeping the impact of the Act under
review in the future.
[220] When passing the Bill in early March 2009, MSPs were plainly
well aware of this problem and of the likely reasons for such a wide range of
figures. After further debate it then fell to the Parliament to judge whether
the legislation should nevertheless be allowed to proceed. It is perhaps unfortunate
that in his final speech the Minister made some insensitive remarks about the
profits of insurers, and also a little surprising that the ensuing vote should
have ended up along strict party lines. In my judgment, however, such features
should not be allowed to detract from what the legislative materials clearly
disclose, namely extensive efforts from at least February 2008 onwards to
derive workable estimates of future damages claims from a mass of uncertain
variables. The outcome was by no means ideal, but I do not consider this to be
a ground on which the legislation can properly be held unjustified. To put
matters into perspective, the cost implications of actionability were not
apparently in issue at any stage of the Rothwell test cases.
[221] Unsatisfactory and inconsistent explanations: Meticulous
examination of the first respondent's Answers and notes of argument reveals a
number of apparent contradictions and inconsistencies. At different points,
for example, the 2009 Act is variously said to "change", "clarify" or
"continue" the previous "settled" law. At others, the Rothwell decision
is variously described as binding or not binding in Scotland. Elsewhere the Act is described as a response to Scotland's legacy of asbestos exposure whereas, in reality,
only individuals diagnosed with pleural plaques and other asymptomatic conditions
were provided for. In my opinion, however, written materials in a petition of
this kind cannot be treated as if they were conveyancing documents. For
respondents in particular they may be little more than an aid to the presentation
of oral submissions (which in this case I have heard at considerable length),
and where any conflict arises it is the latter that will normally be taken to
reflect a party's final position. Prior contradictions and inconsistencies may
of course serve to cast doubt on the reliability of oral submissions, but otherwise
written pleadings and arguments are liable to be of only secondary importance.
[222] Here the respondents' submissions were reasonably clear and
consistent, to the effect (i) that the 2009 Act concerned matters of degree,
and of mixed fact and law, on which the Parliament felt unable to agree with
the House of Lords in Rothwell; (ii) that it sought to continue or
restore the entitlement to claim damages which pleural plaques sufferers had
enjoyed in the past; and (iii) that at the same time it sought to dispel
uncertainty arising from the Rothwell judgment in Scotland. For my
part, I am prepared to accept these propositions as reflecting the respondents'
considered position, especially where they may be thought to derive support
from the terms of the Act and from the parliamentary papers produced. By
comparison, as it seems to me, alleged imperfections in the respondents'
written pleadings and arguments are of little importance.
[223] Overview: Taking all of these factors into account, I am
persuaded that for A1P1 purposes the Parliament was justified in passing the
2009 Act, both by reference to legitimate public interest objectives and also
by reference to considerations of proportionality and fair balance. The onus
here is of course on the respondents even though, in focusing matters, I have
sought to discuss each of the principal features on which the petitioners laid
stress in the course of their argument.
[224] As to the question whether a legitimate aim in the public
interest was being pursued, I am conscious that the Strasbourg Court has repeatedly emphasised that:
"... the notion of 'public interest' is necessarily
extensive. In particular, the decision to enact laws expropriating property
will commonly involve consideration of political, economic and social issues.
The Court, finding it natural that the margin of appreciation available to the
legislature in implementing social and economic policies should be a wide one,
will respect the legislature's judgment as to what is 'in the public interest'
unless that judgment is manifestly without reasonable foundation": Maurice (at
para. 84), following a long line of previous cases including James,
Pressos, Broniowski and Lecarpentier.
I am also conscious of Lord Hope's observations in Kebilene which
are quoted in paragraph [188] above. A "discretionary area of judgment" must
be conceded to the Parliament, especially where political, social and economic
issues are concerned, but it is also important to bear in mind that where
Convention rights are at stake the court must ensure that any deference to the
judgment of the legislature is not taken too far. As Baroness Hale put it in
the Countryside Alliance case (at para. 125):
"I do not, however, think that it is open to
us to wash our hands of ... difficult issues on the ground that this is a matter
for Parliament. For better or worse, Parliament has entrusted us with the task
of deciding whether its legislation is compatible with the Convention rights.
If it is not, it is our duty to say so."
And in A and Others v SSHD 2005 2 AC 68, Lord Nicholls
(at para. 80) observed that:
"... Parliament has charged the courts with a
particular responsibility... The duty of the courts is to check that legislation
and ministerial decisions do not overlook the human rights of persons adversely
affected. In enacting legislation and reaching decisions Parliament and
ministers must give due weight to fundamental rights and freedoms. For their part,
when carrying out their assigned task the courts will accord to Parliament and
ministers, as the primary decision-makers, an appropriate degree of latitude.
The latitude will vary according to the subject matter under consideration, the
importance of the human right in question, and the extent of the encroachment
upon that right. The courts will intervene only when it is apparent that, in
balancing the various considerations involved, the primary decision-maker must
have given insufficient weight to the human rights factor."
These observations are in my view consistent with the views expressed by
Lord Walker in the ProLife Alliance case (at paras. 131-136),
to which reference is made in paragraph [90] above, and also with the attitude
of the Strasbourg Court:
"The Court accepts that ... the national authorities
must have considerable discretion in selecting ... measures to secure respect for
property rights ... Nevertheless, the Court would reiterate that (the margin
of appreciation), however considerable, is not unlimited and that the
exercise of the state's discretion ... cannot entail consequences at variance
with Convention standards.": Broniowski (at para. 182) ...
And it is perhaps in the context of proportionality and fair balance that
the court's responsibility will be most acute.
[225] Applying these principles to the present case I am satisfied,
not only that it was within the proper competence of the legislature to
determine that the 2009 Act served a legitimate aim in the public interest, but
also that in so doing the Parliament applied no inappropriate standards and came
to a tenable view. Similarly, as regards proportionality and the duty to
strike a fair balance between community interests and private rights, it seems
to me not only that the Parliament was entitled to (and, on the evidence of the
legislative papers, did) take the view that an appropriate balance had been
struck, but also that there are no circumstances which would justify this court
in reaching a different conclusion. Even if, as the petitioners contended,
there had been no evidence of such issues being addressed, I would not have
regarded that as a material cause for concern. On the authorities, what really
matters is the objective nature and effect of legislation as enacted rather
than any actual or imputed intent or belief:
"... it is a cardinal constitutional principle that the
will of Parliament is expressed in the language used by it in its enactments.
The proportionality of legislation is to be judged on that basis... not ... by the
quality of the reasons advanced in support of it in the course of parliamentary
debate, or by the subjective state of mind of individual ministers or other
members ... The court is called upon to evaluate the proportionality of the
legislation, not the adequacy of the minister's exploration of the policy
options or of his explanations to Parliament,": Wilson v First
County Trust Ltd, per Lord Nicholls at para. 67; cf. DS v HMA, per Lord Rodger at para. 83.
With that in mind I take the view, not only that Act went no further than
was necessary to fulfil the Parliament's legitimate aim in the public interest,
but also that awards of damages against negligent employers, at appropriate
levels and under settled rules, cannot be thought to constitute an unwarranted
or disproportionate end result. If that is right, alleged regulatory sterilisation
of the petitioners' reserves can in my view be no better placed, and in any
event (for the reasons already discussed) I regard the petitioners' position
here as too remote and uncertain to qualify for protection under A1P1. Even
judging matters in accordance with the heightened scrutiny appropriate to
Convention issues, therefore, I conclude that the 2009 Act was sufficiently
justified for the purposes of A1P1.
Conclusion
[226] For all of
these reasons, the petitioners' challenge based on A1P1 is rejected.
VII. Common law irrationality
The parties' contentions
[227] In submitting
that the 2009 Act had no rational basis, that its aims and achievements were
"unreasonable, irrational and arbitrary", and that the Government and the
Parliament had failed to approach the legislative process in a rational manner,
the petitioners relied on substantially the same considerations as have already
been discussed at some length in the two preceding sections of this opinion.
Traditional Wednesbury irrationality was the appropriate test here, as
affirmed by the Court of Appeal in Javed and other cases, and in that
context the following principal contentions were advanced:
(i) In reaching a firm decision to legislate in advance of
any process of policy formulation, consultation or assessment, the Scottish
Government had abused its legislative discretion.
(ii) By declaring harmless and asymptomatic pleural plaques
to be "... a personal injury which is not negligible", the Act irrationally
controverted established fact or, alternatively, legal principle.
(iii) This was an exercise in irrational generosity, not only
in favour of a small group who had sustained no harm, but also in favour of the
firm of solicitors by whom the legislation was promoted.
(iv) Without any offer of compensation, the private funds of
insurance companies had been targeted to fund public philanthropy.
(v) Policies had retrospectively been 'reconfigured' so as to
cover liabilities which were not initially in contemplation and for which no
premiums were taken.
(vi) As evidenced by the Scottish Government's letter of 28 November 2008 (production 6/54/80), an
essential objective of this Act, namely the engagement of past insurance
arrangements, had been deliberately concealed during the legislative process.
(vii)
Massive unresolved uncertainties as to the
financial impact of this legislation had unconscionably left insurers
(including those standing in for insolvent colleagues under the Financial
Services Compensation Scheme) facing potential liabilities running into
£billions.
(viii)
Since it applied to Scotland only, the Act created a potential for forum shopping which standard
procedural safeguards were unlikely to restrain.
[228] For their part, the respondents maintained that where primary
legislation was in issue any standard of review must be very high indeed. Even
if their Lordships' dicta in Jackson were held inapposite, the test could not be lower than that affirmed by
the House of Lords in connection with secondary legislation carrying direct
parliamentary approval. Against that background, the petitioners had failed to
establish "irrationality" in this case. The 2009 Act fulfilled a legitimate
aim in the public interest; the legislative process had been approached in a
rational manner; and it could not be said that the effects of the Act were in
any way arbitrary, outrageous or absurd. In a common law context the Act was
justified on essentially the same grounds as had already been relied on for
Convention purposes, and in the whole circumstances this branch of the
petitioners' case was entirely misconceived.
Discussion
[229] Both individually and collectively, the petitioners' contentions
seem to me to fall short of what would be required to justify reduction of a
primary Act of the Scottish Parliament. Properly analysed, they do not in my
opinion come close to meeting the "... extremes of bad faith, improper motive or
manifest absurdity" discussed in the Nottinghamshire and Hammersmith
cases, nor indeed, in a legislative context, to satisfying the traditional
standard of "Wednesbury unreasonableness" as that has been judicially
explained:
"It is true to say that, if a decision on a competent
matter is so unreasonable that no reasonable authority could ever have come to
it, then the courts can interfere. ... but to prove a case of that kind would
require something overwhelming...": Wednesbury, per Lord Greene MR
at p. 230 ...
"'Wednesbury unreasonableness'... applies to a
decision which is so outrageous in its defiance of logic or of accepted moral
standards that no sensible person who had applied his mind to the question to
be decided could have arrived at it.": CCSU v Minister for the Civil
Service 1985 1 AC 374, per Lord Diplock at p.410. ...
"The test for Wednesbury unreasonableness is
hard to satisfy. The decision must be outrageous or absurd before the court
can intervene.": R v Secretary of State for the Environment, ex
parte Greater London Council, 3 April 1985, unreported, per Mustill LJ, quoted with
approval by the Court of Appeal in Javed....
"Counsel have referred to the difficult notion of
"extreme" irrationality sometimes suggested as necessary before a court can
strike down subsidiary legislation subject to parliamentary scrutiny, citing
Lord Scarman in (the Nottinghamshire case). He spoke ... of '... the
consequences ...[being] so absurd that ... [the Secretary of State] must have taken
leave of his senses ', a form of words with which the other members of the
Appellate Committee agreed. They also referred to Lord
Bridge's reference in (the Hammersmith
case) to 'manifest absurdity'. It is wrong to deduce from those dicta a
notion of 'extreme' irrationality. Good old Wednesbury irrationality is
about as extreme a form of irrationality as there is. Perhaps the thinking
prompting the notion is that in cases where the minister has acted after
reference to Parliament, usually by way of the affirmative or negative
resolution procedure, there is a heavy evidential onus on a claimant for
judicial review to establish the irrationality of a decision which may owe much
to political, social and economic considerations...": O'Connor, per
Auld LJ at pp. 220-221, again endorsed by the Court of Appeal in Javed.
[230] Allowing to the Parliament a "discretionary area of judgment",
especially where political, social and economic considerations are in play, I
consider that primary legislation would require to be tainted to a serious and
exceptional degree before an application such as the present could be upheld. Lesser
criticisms and complaints would be inadequate, and in the end I am not
satisfied that any sufficient ground for judicial intervention at common law has
been made out in this case. For convenience in this particular context,
although at some risk of repetition, I propose to comment briefly on each of
the petitioners' complaints as listed above.
[231] Premature decision to legislate: As I think the learned
Dean of Faculty acknowledged in the course of his submissions, this was more a
complaint against the Scottish Government promoting the Bill than against the
Parliament itself. By the time the Parliament finally voted to pass the Bill
in March 2009, issues of policy had been widely considered and disclosed;
interested parties, including the petitioners, had been consulted and afforded
an opportunity to comment on the proposals; evidence was taken from inter
alios insurers' representatives as the Bill progressed; and the financial
aspects were the subject of ongoing assessment from at least February 2008
onwards. While the Minister accepted that the Government had initially "...
proceeded with a great deal of swiftness", I am unable to accept that over the period
following its introduction in June 2008 the Bill received inadequate
consideration, or that the Parliament can properly be charged with abusing its
legislative discretion in this regard. Significantly, it was not until
November 2008 that the general principles of the legislation were formally debated
and approved.
[232] Furthermore, to the extent that the petitioners' complaint may
suggest a failure to follow normal parliamentary consultation and assessment
procedures, it is in my view irrelevant by reason of section 28(5), SA
1998 having excluded "procedural invalidity" as a legitimate ground of review.
[233] In my judgment, therefore, this complaint comes nowhere near
"manifest absurdity", and even the petitioners did not overtly accuse the Parliament
of bad faith or of having legislated from some improper motive. At worst, on
the petitioners' approach, the Parliament had with "... good intentions" (cf.
note of argument at para. 11.13) contrived to legislate on a basis, and with
consequences, which could not rationally be supported.
[234] Controverting established fact or legal principle: In
deciding to legislate on the actionability of pleural plaques, the Parliament plainly
took a different view on certain matters of degree lying at the heart of the
House of Lords decision in Rothwell. On one approach the question was
whether, in all the circumstances, pleural plaques should be regarded as a
trivial or negligible consequence of asbestos exposure, and thus as failing to
qualify as "damage" or "harm" for the purposes of a cause of action in delict.
That was a value judgment as to the seriousness with which pleural plaques
should be regarded, and one which the Parliament was in my view entitled to
consider from the standpoint of its own knowledge of the social and economic
evils flowing from asbestos-related conditions within Scotland's communities. Alternatively, the question might be thought to concern
the flexibility of the legal test for actionable "damage" or "harm", and the
extent to which that test and asbestos-related pleural plaques could properly be
brought together. In these respects, as discussed in chapter VI of this
opinion (especially between paragraphs [201] and [206]), it seems to me that
the Parliament was addressing questions of mixed fact and law on which courts
had come to different conclusions since at least 1984. It was not, as the
petitioners insisted, just seeking to turn established fact on its head and
declare black to be white.
[235] However one may characterise the Parliament's earlier
disagreement with Rothwell, the 2009 Act now indisputably affords to
certain individuals a statutory cause of action. But beyond this reflection of
the Parliament's view on actionability, the Act did not alter the law of delict
in any way. Consequently, in my view, sections 1 and 2 of the Act can no more
be described as distorting medical fact, or as subverting legal principle, than
section 8(6) of the Prevention of Harassment Act 1997 which, again in a limited
context, made free-standing anxiety actionable at a time when the common law
was moving in the opposite direction.
[236] Irrational generosity: On the grounds already discussed
at paragraphs [207] to [212] above, I do not regard this aspect of the
petitioners' submissions as soundly based. There are several points which weigh
with me here. First, there is in my view nothing intrinsically
irrational or outrageous about a legislature deciding to modify or overrule a
judicial decision at any level. To make and shape law is a primary function of
any legislature, especially where existing rules and principles are perceived
as unsatisfactory or unfair. Second, I do not accept that there was
anything outrageous or absurd about the value judgment which the Parliament saw
fit to reach in this case. Controversy had arisen after a period of some 20
years during which the legal actionability of pleural plaques had been
judicially affirmed and then conceded by the UK insurance
industry, and even in deciding the Rothwell test cases in the
defendants' favour several of their Lordships indicated a measure of regret
that claimants might be left without a remedy. In my opinion, a major flaw in
the petitioners' argument is their rigid insistence that pleural plaques
claimants "... have suffered no harm". The Scottish Parliament has taken a different
view on that matter of mixed fact and law, creating a statutory cause of action
for affected individuals, and I consider that this was a course which it was
entitled to take.
[237] Third, the Act did no more than was necessary to achieve
its stated objective. On one view the Parliament's "generosity" was limited
to removing a bar or hindrance in connection with the threshold requirements
for a cause of action. Otherwise the fate of pleural plaques claims, quoad
both liability and quantum, was left to be determined by the courts in
the ordinary way. The position of defenders was not mentioned, nor was any
contractual or other relationship which they might have with insurers or other
third parties. No transfer or appropriation of funds or property was provided
for. In short, the Act essentially re-affirmed the pre-Rothwell status
quo, with damages claims being allowed to proceed against those allegedly
responsible (whether solvent or insolvent, insured or uninsured, or in the
public or private sector).
[238] Fourth, so far as Messrs Thompsons, solicitors, are concerned, the Act did not actually give them
anything. No doubt it opened the door to certain claims from which fees might
be earned, but there was no guarantee that the work would remain with a
particular firm or firms in the future, nor was there any reason to doubt that
audited fees would, in the usual way, relate to necessary investigative and
preparatory work. The call for such work in individual cases, and for the
involvement of skilled solicitors to carry it out, would be a normal feature of
personal injuries litigation, and the Act seems to me to have left all that to
be regulated by market forces.
[239] Fifth, although questions have been asked regarding the prominent
role which Messrs Thompsons and others were allowed to play in the
genesis of the 2009 Act, it has to be acknowledged that lobbying is a
legitimate part of the political process. Moreover, the decision to introduce
a Bill before the Parliament could be taken only by the Scottish Government;
passing the Bill was in the hands of the Parliament alone; the solicitors were
plainly advancing their many clients' interests as well as their own; and the
fees involved would relate to work necessarily arising in individual cases. During
the progress of the Bill the Scottish Government was in any event receiving
advice from its own Legal Directorate, and furthermore all cost estimates
included fees incurred on the defenders' side as well.
[240] For all of these reasons, I am unable to accept that any
question of irrational generosity arises in this case. In that context the
petitioners' reliance on decisions such as Roberts, Prescott and Bromley
seems to me to be misplaced. All of these cases concerned fiduciary duties
owed by local authorities to ratepayers out of whose contributions an excess
minimum wage, a scheme for free bus travel benefiting certain classes and a
manifesto reduction in London Transport fares would respectively be financed.
On each occasion the defendants were held to be in breach of fiduciary duty;
their plans were deemed to fall outwith the scope of discretionary powers
conferred by statute; and in the last two cases the defendants were also
criticised for failing to conduct their transport undertaking on proper
business principles. Since the present case has none of these features I regard
these decisions as distinguishable and unhelpful. They were not concerned with
primary legislation affording a cause of action in delict. Nor were they concerned
with an Act falling within the legislative competence of a parliament. And in my
opinion the Scottish Parliament cannot be thought to owe any fiduciary duty to
protect allegedly negligent third parties against awards of damages, or for
that matter to protect insurers against implement of their own indemnity
contracts.
[241] Unconscionable burden on private insurers: The thinking
behind this part of the petitioners' argument is apparently that state
generosity should be paid for out of public funds, and conversely that victims
of state appropriation should be compensated. Reference was made in that latter
context to the Burmah Oil Company case, where it was held appropriate
for the Crown to meet war damage compensation claims. This is not, however, a
case in that category. The 2009 Act merely affords to certain individuals a
statutory cause of action, and it would seem unrealistic to talk of
compensating a negligent party found liable in damages, or of burdening the
public purse with such liability instead. If, in parallel with the discussion
at paragraph [216] above, there is nothing irrational or outrageous about
holding a negligent party liable in damages for resultant harm, it is hard to
see why the same liability should suddenly become irrational and outrageous
where the party concerned happens to be insured. In neither case is the State
appropriating funds or property from anyone. A fortiori, as it seems to me, solvent insurers standing in for insolvent colleagues
under regulatory arrangements are even further removed from the reach of the
legislation than those who actually undertook to indemnify employers against
legal liability in the first place.
[242] Accordingly,
even if the petitioners' arguments here could be thought to have a certain
superficial attraction, I am ultimately not persuaded that they take proper
account of the realities of the situation. It is only by ignoring (i) the
primary legal liability of negligent parties to pay damages for relevant harm,
(ii) the remoter (and currently unconfirmed) contractual basis for any
involvement of indemnity insurers, (iii) the even more remote regulatory basis on
which solvent insurers stand in for insolvent colleagues, and (iv) the absence
of any State appropriation of funds or property from anyone that the notion of
an unconscionable burden inflicted on insurers would appear to have arisen. Moreover,
as discussed below, the petitioners seem to me to be in some difficulty
regarding the construction and application of their own policies.
[243] Alleged
"reconfiguration" of policies: Like the respondents, I do not find this
contention easy to follow. Logically there would seem to be only two
possibilities here. One is that past insurance contracts were written in terms
wide enough to cover prospective or retrospective liability arising by virtue
of the 2009 Act, in which case the Act would not "reconfigure" anything or
create any new liability beyond what the original parties must be deemed to
have had in contemplation. Contracts commonly fall to be construed as covering
subsequent legal, and even factual, changes: cf. Debenham's Retail plc
v Sun Alliance & London Assurance Co Ltd 2005 3 EGLR 34 (per
Mance LJ at para. 27); Lymington Marina Ltd v MacNamara &
Others 2007 2 AER (Comm) 825. In the latter case, Arden LJ (at
para. 33) said:
"In my judgment there can be no necessary
implication that, where parties come to an agreement, that agreement must be
interpreted on the basis of the law as it stood when the agreement was made as
if it were in some time warp. It is part of the factual matrix known to both
parties that both statute law and the common law develop over time. ... If the
parties have been content to leave a matter to the general law, they must be
taken to have agreed that their agreement should be interpreted in the light of
the general law from time to time."
The other
possibility is that past contracts were so narrowly framed that, as a matter of
construction, liability arising by virtue of the Act must be excluded. In that
event the 2009 Act would have no effect on insurers at all. I am therefore
compelled to question the petitioners' unvouched half-way house whereby, on the
one hand, historic contracts did not contemplate liabilities of the kind now
under consideration yet, on the other, the same contracts are now suddenly
"reconfigured" so as to embody new liabilities for which premiums were never
taken. And since this is not, in any event, the kind of argument that could
have been advanced if Rothwell had been decided in the claimants'
favour, it is hard to see why it should now be deployed against legislation
having just the same practical effect.
[244] In some
future context questions may also arise as to whether the 2009 Act, properly
construed, engages particular policies written under different conditions in
the past. Given the strong presumption against retrospective legislation, for
example, it might be possible to give content to section 4(2) of the Act
without necessarily touching contractual arrangements of which the Act makes no
express mention. There might equally be scope for argument as to whether an
Act concerned with pleural plaques could properly be deemed retrospective
beyond the date when such lesions came to be recognised in a Scottish (or even
an individual) context. And furthermore, it is not clear what might be the
result of "reading down" the 2009 Act pursuant to the strong principle of Convention-compliant
construction enshrined in section 3 of the Human Rights Act 1998: cf.
Ghaidan v Godin-Mendoza 2004 2 AC 557. But here, where the
petitioners produce only specimen contracts and the effect of the Act on
particular policies cannot be tested, I do not see how they can expect the
court to be satisfied with an unvouched "concession" advanced for the purposes
of these proceedings only. I am certainly not in a position to hold that the
scope of any particular contract or contracts is unaffected by the 2009 Act,
but, by the same token, I am in no position to hold otherwise for the purposes
of the petitioners' argument.
[245] Deliberate
concealment of a key objective of the Act: As discussed in the preceding
chapter of this opinion (especially at paragraphs [215] to [217]), I am
not persuaded that any such concealment occurred. From the outset it was
obvious that past insurance arrangements were a matter of great interest to the
Scottish Government and, in turn, to the Parliament itself. The clear terms of
section 4(2) remained unchanged from the moment the Bill was introduced in June
2008, and all discussions on the financial impact of the Bill, in which
insurers' representatives played a full part, took place on the premise that
insurers would continue to pay damages for which their insured were found
liable in much the same way as they had done in the pre-Rothwell
period. What other explanation could there be for the months of consultation,
negotiations, assessments and evidential hearings which involved the insurance
industry to the exclusion of their insured?
[246] Unresolved
financial uncertainties: As previously indicated, it must remain an open
question at this stage whether past insurance arrangements are actually engaged
by the terms of the Act. But even on the assumption that the petitioners'
policies are "caught", by section 4(2) or otherwise, I do not consider that
there was anything irrational or outrageous about the Parliament's ultimate
reluctance to prolong what had proved to be a fruitless quest for precision in
the estimated number and value of future damages claims. In my view the
reasoning set out in chapter VI above (at paragraphs [218] to [220]) is
equally applicable in the present common law context.
[247] Jurisdiction
and forum shopping: Such issues may fall away if parallel legislation is,
in due course, brought in for England, Wales and Northern Ireland. But even if that does
not happen, it seems to me that the petitioners' contentions here are of little
real significance. Issues of jurisdiction would fall to be regulated by the
courts along ordinary lines, and any plea of forum non conveniens would
require to be considered on its particular merits.
Overview and
conclusion
[248] There is clearly room for
differences of opinion as to whether the Parliament was right to legislate in
the way it did, and it remains to be seen whether the 2009 Act will prove to
have adverse legal or political consequences in years to come. But for all of
the foregoing reasons I am unable to accept that the petitioners' complaints,
either individually or collectively, come anywhere near the standard of
"irrationality" which would be necessary in order to invalidate a primary Act
of the Scottish Parliament. Whether that standard is, on comparative lines, to
be derived from the Nottinghamshire and Hammersmith decisions in
the House of Lords (as suggested in chapter IV of this opinion), or simply from
traditional concepts of Wednesbury unreasonableness as judicially
explained, is to my mind immaterial for present purposes. The petitioners
plainly fail on either approach, and their common law challenge to the 2009 Act
is therefore rejected.
VIII. Final disposal
[249] In the result, the petitioners succeed on the issues of their own locus
standi (chapter II above) and the competency of their common law
challenge (chapter IV). However, they fail on all other issues, namely the locus
standi of the third to tenth respondents (chapter III) and the merits
of their various challenges to the 2009 Act based on article 6 of the
Convention (chapter V), article 1 of the First Protocol (chapter VI)
and common law "irrationality" (chapter VII). The petition must therefore be dismissed.
