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The mistreatment of migrant domestic workers by employers who exploit their employees vulnerable situation is clearly wrong. The law recognises this in several ways. Depending on the form which the mistreatment takes, it may well amount to a breach of the workers contract of employment or other employment rights. It may also amount to a tort. It may even amount to the offence of slavery or servitude or forced or compulsory labour under section 1 of the Modern Slavery Act 2015 or of human trafficking under section 2 of that Act. If a person is convicted of such an offence and a confiscation order made against him, the court may also make a slavery and trafficking reparation order under section 8 of the Act, requiring him to pay compensation to the victim for any harm resulting from the offence. But such orders can only be made after a conviction and confiscation order; and remedies under the law of contract or tort do not provide compensation for the humiliation, fear and severe distress which such mistreatment can cause. Such a remedy could be found if the employers conduct amounts to race discrimination under the Equality Act 2010 or its predecessor the Race Relations Act 1976. This would have the added advantage that proceedings for the statutory tort of race discrimination can be brought in an employment tribunal, at the same time as proceedings for unpaid wages and other breaches of the contract of employment and for unfair dismissal. The issue in this case, therefore, is whether the conduct complained of amounts to discrimination on grounds of race. In both the 1976 and 2010 Acts, at the relevant time, the definition of race also covered nationality and ethnic or national origins. In the two cases before us, the employment tribunals both found that the reason for the employers mistreatment of their employees was their victims vulnerability owing to their precarious immigration status. The principal question for this court, therefore, is whether discrimination because of, or on grounds of, immigration status amounts to discrimination because of, or on grounds of, nationality. The subsidiary question is whether the employers conduct amounted to indirect discrimination against persons who shared that nationality. Ms Taiwos case Ms Taiwo is a Nigerian national of Yoruba and Nigerian ethnicity. She is married and has two children but was living in poverty in Nigeria. She entered the United Kingdom lawfully in February 2010 with a migrant domestic workers visa obtained for her by Mr and Mrs Olaigbe, her employers. Mr Olaigbe is also a Nigerian of Yoruba ethnicity, but comes from a wealthy and influential family. Mrs Olaigbe is a Ugandan. They have two children (and at the time were also fostering two other children). They had manufactured a history of Ms Taiwos previous employment with Mr Olaigbes parents so that she would qualify for a domestic workers visa. They had also fabricated a contract of employment, which Ms Taiwo never saw, and which provided for more favourable terms of employment than Ms Taiwo had understood. On arrival in the United Kingdom, Mr Olaigbe took her passport and kept it. The employment tribunal found that Ms Taiwo was expected to be on duty, during most of her waking hours and was not given the rest periods required by the Working Time Regulations 1998 (SI 1998/1883). She was not paid the minimum wage to which she was entitled under the National Minimum Wage Act 1998. For April, May and June 2010, she was paid the sum of 200 per month which she had been promised, and there was a further payment of 300 in August. But in October she was forced to hand over 800 to the employers. She was not given enough to eat and suffered a dramatic loss of weight. She was subjected to both physical and mental abuse by Mr and Mrs Olaigbe and Mr Olaigbes mother, who was living with them for some of the time. She was slapped and spat at; she was mocked for her tribal scars and her poverty, and called a crazy woman. She was not allowed her own personal space and shared a room with the employers two children. The Employment Appeal Tribunal characterised her situation as systematic and callous exploitation. Eventually, through a sympathetic worker at the childrens playgroup, she was put in touch with social services and other agencies. These enabled her to escape in January 2011 and supported her thereafter. In April 2011 she brought a claim in the employment tribunal. In January 2012, the tribunal upheld her claims under the National Minimum Wage Act 1998, for unlawful deduction from wages under section 13 of the Employment Rights Act 1996, for failure to provide the rest periods required by the Working Time Regulations 1998 and for failure to provide written terms of employment under section 1 of the 1996 Act. In February she was awarded 30,458.85 under the National Minimum Wage Regulations, 1,520 for failure to provide written particulars of her contract of employment, and 1,250 for failing to provide rest periods. However, the employment tribunal dismissed her claims of direct and indirect race discrimination under the Equality Act 2010 (in fact some of her employment was covered by the Race Relations Act 1976, as the relevant provisions of the Equality Act 2010 only came into force on 1 October 2010, but it makes no material difference). The tribunal found that Ms Taiwo was treated as she was because she was a vulnerable migrant worker who was reliant on the respondents for her continued employment and residence in the United Kingdom. She had not been treated as she was because she was Nigerian. Another migrant worker whose employment and residence in the United Kingdom was governed by immigration control and by the employment relationship would have been treated in the same way. Mr and Mrs Olaigbe might have chosen to employ a Ugandan and there was no reason to think that a Ugandan would have been treated any more favourably than Ms Taiwo had been. Hence there was no direct discrimination on grounds of race. The Employment Appeal Tribunal upheld the employment tribunals conclusions on direct discrimination. They found that the tribunal had not properly approached the claim of indirect discrimination, because it had not tried to identify the provision, criterion or practice (PCP) which put the group to which the claimant belonged at a comparative disadvantage; but no tenable PCP had been put forward. Hence the appeal on discrimination was dismissed. Ms Onus case The facts of Ms Onus case are similar. She too is Nigerian. She entered the United Kingdom in July 2008 on a domestic workers visa obtained for her by her employers, Mr and Mrs Akwiwu. She had previously worked for them in Nigeria, but they too had supplied false information to the United Kingdom authorities in order to obtain the visa. Mrs Akwiwus mother later drafted a contract for her in Nigeria which provided that she would neither leave nor abscond from them within a year and that if she did she would be reported to the UK police and immigration authorities. They had taken away her passport on arrival and did not tell her where it was kept. She was not provided with a written statement of her terms and conditions of employment. She was required to work, on average, for 84 hours a week, looking after the home and the couples two children, one of whom was a prematurely born baby who required special care. She was not given the required rest periods or annual leave. She was not paid the minimum wage. She was threatened and abused by her employers. She was told that she would be arrested and imprisoned if she tried to run away. She was also told that the police in the United Kingdom were not like the Nigerian police, by which was meant that she would be arrested and put in prison for minor matters. She was not registered with a general practitioner. Ms Onu fled her employers home in June 2010, walking some eight miles to the home of a Jehovahs Witness whom she had met on the doorstep of the home because she had no money. She was put in touch with a charity which assists trafficked migrant workers. In September 2010 she brought proceedings making the same claims that Ms Taiwo made, to which she later added claims for harassment and victimisation under the Equality Act 2010. The employment tribunal upheld the same claims as had the tribunal in Ms Taiwos case and also held that Ms Onu had been constructively and unfairly dismissed. They further held that her employers had directly discriminated against her and had harassed her on grounds of race. They found that the employers had treated her less favourably than they would have treated someone who was not a migrant worker. They had treated her in the way that they did because of her status as a migrant worker which was clearly linked to her race. At the later remedy hearing, she was awarded 11,166.16 for unfair dismissal, including the failure to provide a statement of terms and condition; 43,541.06 for unpaid wages; 1,266.72 for unpaid holiday; and 25,000 for injury to feelings and 5,000 aggravated damages. The Employment Appeal Tribunal allowed the employers appeal in respect of the discrimination claim. They held that no part of the employers treatment of Ms Onu was inherently bound up with her race but rather with her subordinate position and the relative economic benefits of her work in the United Kingdom compared with the poverty of her situation in Nigeria. They also rejected a claim for indirect discrimination based on a PCP of the mistreatment of migrant domestic workers, because it was not a neutral criterion which disadvantaged some of those to whom it applied disproportionately when compared with others to whom it applied. The Court of Appeal The Court of Appeal heard the appeals of Ms Taiwo and Ms Onu on the discrimination issues together: [2014] EWCA Civ 279; [2014] 1 WLR 3636; [2014] ICR 571. On the direct discrimination claim, there were two issues: the grounds issue and the nationality issue. On the grounds issue, the court held that this was not a case in which the employers had published or applied a discriminatory criterion (an example would be that women required higher qualifications for employment than did men). It was therefore necessary to examine the employers mental processes to discover whether the employees immigration status formed part of the reasons for treating them so badly. It did not have to be the sole reason as long as it played a significant part. In this case it did so. That holding is not under appeal. On the nationality issue, the court held that immigration status was not to be equated with nationality for the purpose of the Race Relations and Equality Acts. There were many non British nationals working in the United Kingdom who did not share the particular dependence and vulnerability of these migrant domestic workers. On the indirect discrimination claim, the court found that the mistreatment of migrant workers was not a PCP. This factual situation had nothing to do with the kind of mischief which indirect discrimination is intended to address. Ms Taiwo has permission to appeal to this court on the nationality issue. Ms Onus case has been heard with hers as an application for permission to appeal with appeal to follow if permission is granted. In view of the importance of the issue, permission to appeal is granted. The court is particularly grateful to counsel for appearing for Mr and Mrs Akwiwu at very short notice, following the tragic and untimely death of Mr Jake Dutton who had represented them in the Employment Appeal Tribunal and the Court of Appeal. We are also grateful to counsel and their instructing solicitors for appearing pro bono for both Mr and Mrs Olaigbe and Mr and Mrs Akwiwu. Given that the Anti Trafficking and Labour Exploitation Unit is, quite properly, supporting the claims of Ms Taiwo and Ms Onu, it was particularly important that the contrary arguments were also fully presented to the court. Direct discrimination Section 13(1) of the Equality Act 2010 provides that A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. By section 4 of the Act, race is a protected characteristic. By section 9(1) race includes (a) colour, (b) nationality, and (c) ethnic or national origins. By section 39(2), An employer (A) must not discriminate against an employee of As (B) (a) as to Bs terms of employment, (b) in the way A affords B access, or by not affording access, to opportunities for promotion, transfer or training or for receiving any other benefit, facility or service, (c) by dismissing B, (d) by subjecting B to any other detriment. The previous provisions of the Race Relations Act 1976 were to the same effect. There can be no doubt that the conduct of these employers would amount to unlawful direct discrimination if it was on racial grounds (under the 1976 Act) or because of race (under the 2010 Act), which includes nationality. These employees were treated disgracefully, in a way which employees who did not share their vulnerable immigration status would not have been treated. As the employment tribunals found, this was because of the vulnerability associated with their immigration status. The issue for us is a simple one: does discrimination on grounds of immigration status amount to discrimination on grounds of nationality under the 1976 and 2010 Acts? On the face of it, the two are different. What basis is there for saying that they are the same? Mr Robin Allen QC, who has said all that could possibly be said on behalf of the appellants, makes two basic points. First, he argues that immigration status is a function of nationality. It is indissociable from it. British nationals have a right of abode here which cannot be denied. All non British nationals are potentially subject to immigration control. They require leave to enter and leave to remain. These can be granted for limited periods and on limited terms. Even those granted indefinite leave to remain may have that status withdrawn. Secondly, he points to the flexible approach which has been adopted to the concept of nationality in other contexts. Thus, article 14 of the European Convention on Human Rights forbids discrimination in the enjoyment of the convention rights on any ground such as national or social origin or other status. In R (Morris) v Westminster City Council [2005] 1 WLR 865, it was held incompatible with article 14 of the European Convention on Human Rights, read with article 8, to deny a priority need for accommodation on the ground that a non British child was subject to immigration control while her British mother was not. By section 28 of the Crime and Disorder Act 1998, an offence is racially aggravated if the offender shows at the time, or is motivated by, hostility towards members of a racial group to which the victim belongs or is assumed to belong. By section 28(4) a racial group means a group of persons defined by reference to race, colour, nationality (including citizenship) or ethnic or national origins. In Attorney Generals Reference (No 4 of 2004) [2005] EWCA Crim 889; [2005] 1 WLR 2810, calling a doctor an immigrant doctor was enough to establish that an assault was racially motivated: the epithets Indian and immigrant were both clearly referable to his nationality and national origins. In R v Rogers [2007] 2 AC 62, it was held that calling people bloody foreigners, although without reference to a specific nationality, amounted to racially aggravated abuse. Mr Allen also points out that the United Kingdom Border and Immigration Agencys Code of Practice, Prevention of Illegal Working, Guidance for Employers on the Avoidance of Unlawful Discrimination in employment practices while seeking to prevent unlawful working (2008), gives as an example of direct discrimination on racial grounds, giving an employee with limited leave to remain more degrading forms of work in comparison with employees with unlimited leave (para 3.2). None of these examples is very helpful in deciding the issue which we have to decide. Article 14 of the ECHR contains an open ended list of characteristics which may result in unjustified discrimination in the enjoyment of the rights protected by the Convention, ending in other status. Foreign residence has been held to be a status for this purpose, so it is quite clear that immigration status also qualifies. There was no need to distinguish between this and nationality in the Morris case and so the fact that it was regarded as nationality discrimination is neither here nor there. The courts were not required to address their minds to the difference, if any, between the two, as we are here. Similarly, when deciding whether an offence is racially aggravated for the purpose of the 1998 Act, the distinction is unlikely to be relevant. Bloody foreigners is in any event a reference to nationality. Attorney Generals Reference (No 4 of 2004) is closer to this case, but it is easy to justify a liberal approach to a statute which recognises that some forms of criminal behaviour are more hurtful to the victim and more damaging to society than others. The courts had recognised this in their sentencing policies before the 1998 Act was enacted. The Equality Act 2010, and its predecessors, are very different. Generally speaking, the suppliers of employment, accommodation, goods and services are allowed to choose with whom they will do business. There is freedom to contract, or to refuse to contract, with whomever one pleases. The 2010 Act limits that freedom of contract (and also the freedom of suppliers of public services). It does so in order to protect specified groups who have historically been discriminated against by those suppliers, shut out of access to the employment, accommodation, goods and services they supply, for irrelevant reasons which they can do nothing about. In that context, the dividing line between which characteristics are protected and which are not protected is crucial. Parliament could have chosen to include immigration status in the list of protected characteristics, but it did not do so. There may or may not be good reasons for this certainly, Parliament would have had to provide specific defences to such claims, to cater for the fact that many people coming here with limited leave to remain, or entering or remaining here without any such leave at all, are not allowed to work and may be denied access to certain public services. So the only question is whether immigration status is so closely associated with nationality that they are indissociable for this purpose. Mr Allen is entirely correct to say that immigration status is a function of nationality. British nationals automatically have the right of abode here. Non British nationals (apart from Irish citizens) are subject to immigration control. But there is a wide variety of immigration statuses. Some non nationals enter illegally and have no status at all. Some are given temporary admission which does not even count as leave to enter. Some are initially given limited leave to enter but remain here without leave after that has expired. Some continue for several years with only limited leave to enter or remain. Some are allowed to work and some are not. Some are given indefinite leave to remain which brings with it most of the features associated with citizenship. In these cases, Ms Taiwo and Ms Onu had limited leave to enter on domestic workers visas. It was the terms of those visas which made them particularly vulnerable to the mistreatment which they suffered. At the relevant time, such visas were granted to workers who had already been working abroad for the employer, or the employers family, for at least a year; typically they would be granted for a year, though renewable; and the employee would have to seek the approval of the immigration authorities for any change of employer while here. In practice, therefore, such workers were usually dependent upon their current employers for their continued right to live and work in this country. The Independent Review of the Overseas Domestic Workers Visa (2015), commissioned by the Home Office, identified ten reasons for these workers particular vulnerability: their motivation and mentality is one of desperation, born of their inability to find work or earn enough to support their families in their home country (sometimes having left that country to work elsewhere before being brought to this country); they are without the safety net of friends and family and other support networks; they are often unfamiliar with the culture and language, which represents a significant barrier to wider social interaction; they often work long hours; they often do not know their legal rights; they mainly work in private homes, which are less easy to regulate; their work is often part of an informal economy, paid in cash and not declared to the tax authorities; their permission to be here depends upon their employers want or need of them; they have no recourse to public funds; and those employed by diplomats may have to combat claims of diplomatic immunity. Those, like the claimant in Hounga v Allen [2014] 1 WLR 2889, who have come here as visitors without permission to work and stayed here illegally, are even more vulnerable. Clearly, however, there are many non British nationals living and working here who do not share this vulnerability. No doubt, if these employers had employed British nationals to work for them in their homes, they would not have treated them so badly. They would probably not have been given the opportunity to do so. But equally, if they had employed non British nationals who had the right to live and work here, they would not have treated them so badly. The reason why these employees were treated so badly was their particular vulnerability arising, at least in part, from their particular immigration status. As Mr Rahman pointed out, on behalf of Mr and Mrs Akwiwu, it had nothing to do with the fact that they were Nigerians. The employers too were non nationals, but they were not vulnerable in the same way. That, in my view, is enough to dispose of the direct discrimination claim. But it is consistent with the approach of this court in the cases of Patmalniece v Secretary of State for Work and Pensions [2011] 1 WLR 783, which in turn applied the approach of the European Court of Justice in the cases of Schnorbus v Land Hessen (Case C 79/99) [2000] ECR I 10997 and Bressol v Gouvernement de la Communaut Franaise (Case C 73/08) [2010] 3 CMLR 559, and Preddy v Bull [2013] 1 WLR 3741. These were cases, not about whether a particular characteristic fell within the definition of a protected characteristic in the 2010 Act, but about whether the conduct complained of amounted to direct or indirect discrimination. There was no doubt that it was one or the other. Patmalniece was about whether a residence requirement, which all British nationals, but not all non British nationals, could meet was directly discriminatory on grounds of nationality. In Schnorbus, Advocate General Jacobs had said this (para 33): The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex of necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than of the other is in fact affected. This concept of indissociability was taken up by Advocate General Sharpston in Bressol, where the facts were very similar to those in Patmalniece, and formulated thus (at para 56): I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. In all three cases, the discrimination was held to be indirect rather than direct (the Court of Justice disagreeing with the Advocate General in Bressol). There was not an exact correspondence between the advantaged and disadvantaged groups and the protected characteristic, as some of those distinguished by their nationality were not disadvantaged, although others were. The same approach was adopted in Preddy v Bull, where Christian hotel keepers would deny a double bedded room to all unmarried couples, whether of opposite sexes or the same sex. That would undoubtedly have been indirect discrimination, as same sex couples were not then able to marry and thus fulfil the criterion, whereas opposite sex couples could do so if they chose. But the majority held that it was direct discrimination, because the hotel keepers expressly discriminated between heterosexual and non heterosexual married couples. The couple in question were in a civil partnership, which for all legal purposes is the same as marriage. Mr Allen argues that these cases can be distinguished, because they were cases in which an express criterion was being applied, be it nationality or heterosexuality, whereas these appeals are not concerned with such a criterion or test, but with the mental processes of the employers. But that makes no difference. In mental processes cases, it is still necessary to determine what criterion was in fact being adopted by the alleged discriminator whether sex, race, ethnicity or whatever and it has to be one which falls within the prohibited characteristics. The point about this case is that the criterion in fact being adopted by these employers was not nationality but, as Mr Allen freely acknowledges, being a particular kind of migrant worker, her particular status making her vulnerable to abuse. Indirect discrimination Mr Allen accepts that this is not a case of indirect discrimination. It is direct discrimination or nothing. In my view he is wise to do so, but the fact that these cases cannot be fitted into the concept of indirect discrimination is further support for the view that the mistreatment here was not because of the employees race but for other reasons. Indirect discrimination is defined in section 19 of the 2010 Act thus: (1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of Bs. (2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of Bs if (a) A applies, or would apply, it to persons with whom B does not share the characteristic, it puts, or would put, persons with whom B (b) shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) it puts, or would put, B at that disadvantage, and (d) A cannot show it to be a proportionate means of achieving a legitimate aim. The concept in the 1976 Act was differently worded, but the basic principle is the same. An employer or supplier has a rule or practice which he applies to all employees or customers, actual or would be, but which favours one group over another and cannot objectively be justified. Requiring all employees to sport a moustache is obviously indirectly discriminatory against women. The problem in this case is that no one can think of a provision, criterion or practice which these employers would have applied to all their employees, whether or not they had the particular immigration status of these employees. The only PCP which anyone can think of is the mistreatment and exploitation of workers who are vulnerable because of their immigration status. By definition, this would not be applied to workers who are not so vulnerable. Applying it to these workers cannot therefore be indirect discrimination within the meaning of section 19 of the 2010 Act. In disclaiming any reliance on indirect discrimination in these cases, Mr Allen urges the court not to rule out the possibility that, in other cases involving the exploitation of migrant workers, it may be possible to discern a PCP which has an indirectly discriminatory effect. I am happy to accept that: in this context never say never is wise advice. Conclusion It follows that these appeals must fail. This is not because these appellants do not deserve a remedy for all the grievous harms they have suffered. It is because the present law, although it can redress some of those harms, cannot redress them all. Parliament may well wish to address its mind to whether the remedy provided by section 8 of the Modern Slavery Act 2015 is too restrictive in its scope and whether an employment tribunal should have jurisdiction to grant some recompense for the ill treatment meted out to workers such as these, along with the other remedies which it does have power to grant.

The issue in these appeals is whether the mistreatment of migrant domestic workers who are vulnerable because of their precarious immigration status amounts to direct or indirect race discrimination. The appellant in the first appeal, Ms Taiwo, is a Nigerian national who entered the United Kingdom lawfully in February 2010 to work for the respondents. She had a migrant domestic workers visa obtained for her on the false basis that she had previously been employed by Mr Olaigbes parents in Nigeria. Ms Taiwos passport was taken from her and she was expected to work during most of her waking hours for minimal wages. She was starved and subject to physical and mental abuse. She escaped and brought successful claims in the employment tribunal for the failure to pay her the minimum wage, for unlawful deductions from wages, for failure to provide rest periods and to give her written terms of employment. She was awarded compensation in respect of these claims but her claim for race discrimination, which would have entitled her to damages for the fear and distress she suffered, was dismissed. The tribunal found that her mistreatment was because she was a vulnerable migrant worker who was reliant on the respondents for her continued employment and residence in the UK, not because she was Nigerian. Ms Onu, the appellant in the second appeal, suffered a similar experience. She had worked for her employers in Nigeria and came to the UK on a domestic workers visa. She worked on average for 84 hours a week, without the required rest periods, nor was she paid the minimum wage and she was threatened and abused by her employers. She brought similar claims in the employment tribunal, which all succeeded including her claim for direct race discrimination. The latter finding was reversed by the Employment Appeal Tribunal. The Court of Appeal heard Ms Taiwo and Ms Onus appeals together and upheld the dismissal of their discrimination claims on the grounds that immigration status was not to be equated with nationality for the purpose of the Equality Act 2010. Ms Taiwo appealed (and Ms Onu applied for permission to appeal) to the Supreme Court. The Supreme Court unanimously grants permission to appeal to Ms Onu but dismisses both Ms Taiwo and Ms Onus appeals. It holds that neither appellant has suffered race discrimination because the reason for their abuse by the respondents was not nationality but their vulnerability as a particular kind of migrant worker. Lady Hale gives the only substantive judgment. Under s 13(1) Equality Act 2010 (EA) a person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. Race is a protected characteristic and includes colour, nationality and ethnic origins [13]. There is no doubt in these cases that the appellants were treated disgracefully by their employers in a way which employees who did not share the appellants vulnerable immigration status would not have been treated. The question is whether discrimination on grounds of immigration status amounts to discrimination on grounds of nationality [14]. Generally speaking employers are free to choose whom to employ, subject to the limits under the EA (and earlier legislation) to protect specified groups, who have historically suffered discrimination, from being shut out of access to employment for irrelevant reasons which they can do nothing about [21]. Parliament could have chosen to include immigration status in the list of protected characteristics but it did not do so [22]. Immigration status is a function of nationality in that non British nationals (other than Irish citizens) are subject to immigration control, but there is a wide variety of immigration statuses [23]. The appellants were particularly vulnerable to the abuse they suffered because of the terms of their domestic workers visas which meant they were dependent on their current employers for their continued right to live and work in the UK [24]. But there are many non British nationals living and working in the UK who do not share this vulnerability and would not have been abused in the same way. The treatment of the appellants had nothing to do with the fact they were Nigerian and they were not the subject of direct discrimination [26]. This was not a case of indirect discrimination. There was no provision, criterion or practice as defined in s 19 EA applied by the respondents to all their employees regardless of their immigration status [32]. The present law does not therefore offer redress for all the harm suffered by the appellants. Parliament might wish to consider extending the remedy available under the Modern Slavery Act 2015 to give employment tribunals jurisdiction to grant compensation for ill treatment meted out to workers [34].

The issue in this appeal is whether the conditions of entitlement to state pension credit prescribed by regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) (the 2002 Regulations) are compatible with EU law. Regulation 2 is not easy to summarise in a few words, but its general effect is to restrict entitlement to state pension credit to those who have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland (the Common Travel Area). The question is whether this is compatible with article 3(1) of Council Regulation (EC) No 1408/71 (Regulation 1408/71). Regulation 1408/71 was replaced on 1 May 2010 by Regulation (EC) No 883/2004, which need not be examined as all the relevant events preceded that date. Article 2(1) of Regulation 1408/71 provides that the Regulation applies to employed persons or self-employed persons who are or have been subject to the social security legislation of a Member State as well as to members of their families. Article 3(1) provides, in respect of those to whom the Regulation applies, for equality of treatment in the application of social security schemes. They are to be entitled to the same benefits under the legislation of any Member State of the kind to which Regulation 1408/71 applies as the nationals of that State. The general effect of the 2002 Regulations, on the other hand, is as stated above. Entitlement to state pension credit depends on whether the person concerned has a right to reside in the United Kingdom or elsewhere in the Common Travel Area. The problem arises because regulation 2(2) of the 2002 Regulations affects nationals of different Member States in different ways. A citizen of the United Kingdom has a right to reside in the United Kingdom by virtue of his or her right of abode under section 2(1) of the Immigration Act 1971. An Irish citizen has, by virtue of his or her Irish nationality, a right to reside in the Republic of Ireland. In their case regulation 2 of the 2002 Regulations does not preclude entitlement to state pension credit. But nationals of other Member States do not qualify for the same treatment unless they have a right to reside here, which they do not have simply on the grounds of their nationality. The appellant was born in Latvia on 1 June 1938. She came to the United Kingdom on 12 June 2000 before Latvia joined the European Union. She claimed asylum on the ground that, as she is of Russian ethnic origin, she had a well founded fear of persecution if she were to return there. Her claim to asylum was finally refused in January 2004, but no steps were taken to remove her from this country. On 1 May 2004 Latvia joined the EU, so pursuant to derogations from article 39(3) of the EC Treaty the appellant became entitled to work here if she complied with the Workers Registration Scheme in the Accession (Immigration and Worker Registration) Regulations 2004: see Zalewska v Department for Social Development (Child Poverty Action Group and another intervening) [2008] UKHL 67; [2008] 1 WLR 2606. She had worked in factories and as a kitchen assistant for about 40 years in Latvia. She is in receipt of a retirement pension from the Latvian social security authorities which is worth between 50 and 170 a month, depending upon the rate of exchange for the time being. But she has not worked at any time while she has been in this country, and she has no other income. In August 2005 the appellant claimed state pension credit from the respondent, the Secretary of State for Work and Pensions. Her claim was refused on 7 September 2005 on the ground that she lacked a right to reside in the United Kingdom. She appealed against that refusal, asserting direct discrimination on grounds of her nationality contrary to article 3(1) of Regulation 1408/71. Her case was that it was her Latvian nationality that precluded the entitlement to state pension credit which she would have had if she had been a United Kingdom national. On 12 December 2005 the appeal tribunal allowed her appeal on the grounds of direct discrimination. But on 11 June 2008 Commissioner Rowland allowed the respondents appeal against that decision. He held that the imposition of the right to reside test was indirect discrimination, but that it was justified as a proportionate means of achieving the legitimate aim of protecting the public finances of the host member state. There was, in his view, no obligation on the United Kingdom under Community law to afford access to social assistance to those who have no right of residence here. On 25 June 2009 the Court of Appeal (Lord Clarke of Stone-cum-Ebony MR and Moses and Sullivan LJJ) dismissed the appellants appeal against the decision of the Commissioner: [2009] EWCA Civ 621. State pension credit: the 2002 Regulations State pension credit is a means tested non-contributory benefit. The details of how it is calculated do not matter for present purposes. But it is worth noting that it is made up of two elements, a guarantee credit and a savings credit, each of which have their own rules as to eligibility. Section 2(2)(b) of the State Pension Credit Act 2002 provides that the guarantee credit is the difference between the prescribed amount and the claimants income. Income includes retirement pension income, and an overseas arrangement such as a state pension from another Member State is retirement pension income for this purpose: sections 15(1)(c) and 16(1)(g). Section 1(2)(a) provides that a claimant is entitled to state pension credit if he is in Great Britain. Section 1(5)(a) provides that regulations may make provision as to the circumstances in which a person is to be treated as being in or not being in Great Britain for the purposes of the Act. Regulation 2 of the 2002 Regulations was amended by regulation 5 of the Social Security (Habitual Residence) Amendment Regulations 2004 (the 2004 Amendment Regulations). As so amended, it was in the form that was in force from 1 May 2004 to 29 April 2006. This is the period during which the appellant made her claim. In that form it provided as follows: (1) Subject to paragraph (2), a person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose, no person is to be treated as not habitually resident in the United Kingdom who is (a) a worker for the purposes of Council Regulation (EEC) No 1612/68 or (EEC) No 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No 68/360/EEC or No 73/148/EEC or a person who is an accession state worker requiring registration who is treated as a worker for the purpose of the definition of qualified person in regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 pursuant to regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004; or (b) a refugee within the definition in article 1 of the Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as extended by article 1(2) of the Protocol relating to the Status of Refugees done at New York on 31 January 1967; or (c) a person who has been granted exceptional leave to enter the United Kingdom by an immigration officer within the meaning of the Immigration Act 1971, or to remain in the United Kingdom by the Secretary of State; or (d) a person who is not a person subject to immigration control within the meaning of section 115(9) of the Immigration and Asylum Act 1999 and who is in the United Kingdom as a result of his deportation, expulsion or other removal by compulsion of law from another country to the United Kingdom; [or] (e) a person in Great Britain who left the territory of Montserrat after 1 November 1995 because of the effect on that territory of a volcanic eruption. (2) For the purposes of treating a person as not in Great Britain in paragraph (1), no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. The persons referred to in regulation 2(1)(a) are various categories of persons who are afforded rights of residence by EU law. Among these categories are nationals of other EU Member States who are workers (that is to say, in employment or looking for work with a genuine chance of being engaged) or who are self-employed. They have a right to reside here and they are not to be treated as not habitually resident in the United Kingdom. So if they are actually in this country too, they are in Great Britain for the purpose of entitlement to state pension credit under the statute. Other nationals of EU Member States who have a right to reside in the United Kingdom or elsewhere in the Common Travel Area and are habitually resident in the United Kingdom or elsewhere in the Common Travel Area are also eligible to claim state pension credit if they are in Great Britain. As they have a right to reside in the Common Travel Area, they are brought within the scope of the opening words of regulation 2(1) by regulation 2(2) which was inserted by regulation 5(c) of the 2004 Amendment Regulations. All Irish nationals have a right to reside in the Republic of Ireland by virtue of their nationality. As the Common Travel Area includes the Republic of Ireland they too are eligible to claim state pension credit if they are in Great Britain. The appellant does not fall within any of the provisions listed in regulation 2(1)(a) to (e). That being so, she can only qualify for entitlement to state pension credit if she is in Great Britain and habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. That is the effect of the opening words of regulation 2(1). But regulation 2(2) provides that no person shall be treated as habitually resident in the United Kingdom or elsewhere in the Common Travel Area if he does not have a right to reside in the United Kingdom or elsewhere in the Common Travel Area. As the appellant does not have that right, she is not to be treated as habitually resident in the United Kingdom (regulation 2(2)). So she is to be treated as not in Great Britain for the purposes of section 1 of the 2002 Act (regulation 2(1)). The Community law provisions At the time when the appellant made her claim the Treaty Establishing the European Community (the EC Treaty) contained the general prohibition on discrimination to which, subject to the special provisions of the Regulation, article 3(1) of Regulation 1408/71 gave effect. Article 12 (now, post-Lisbon, article 18 of the Treaty on the Functioning of the European Union) provided: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. The Council, acting in accordance with the procedure referred to in article 251, may adopt rules designed to prohibit such discrimination. Article 18 (now article 21 TFEU) provided: 1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect. 2 the Council may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1; save as otherwise provided in this Treaty, the Council shall act in accordance with the procedure referred to in article 51. The Council shall act unanimously throughout this procedure. Article 39 (now article 45 TFEU) provided for free movement of workers. It included, among other things, the following rights mentioned in article 39(3): (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in implementing regulations to be drawn up by the Commission. Article 42 (now article 48 TFEU) of the EC Treaty provided: The Council shall, acting in accordance with the procedure referred to in article 251, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for migrant workers and their dependants: (a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries; (b) payment of benefits to persons resident in the territories of Member States. The Council shall act unanimously throughout the procedure referred to in article 251. Regulation 1408/71 contains a system for the coordination of the different social security schemes of the Member States, while respecting the different characteristics of the national legislation: see the fourth recital of its preamble. It was made under article 42 EC. Its object is to ensure that social security schemes governing workers in each Member State moving within the EU are applied in accordance with uniform EU criteria. To this end it lays down a set of rules founded in particular upon the prohibition of discrimination on grounds of nationality or residence and upon the maintenance by a worker of his rights acquired by virtue of one or more social security schemes which are or have been applicable to him: Cases C-95/99, C-96/99 and C-97/99 Khalil, Chaaban and Osseili v Bundesanstalt fr Arbeit [2001] 3 CMLR 1246, para 67. Article 2 provides as to the persons covered by the Regulation (the personal scope) as follows: 1. This Regulation shall apply to employed or self-employed persons and to students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, as well as to the members of their families and their survivors. It has been conceded for the purposes of these proceedings that the appellant falls within the personal scope of Regulation 1408/71 under article 2(1). This is because she falls within the definition of employed person in article 1(a), which includes any person who is insured for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons. The effect of the meaning that is given to employed person is that the Regulation applies to persons who have retired from employment in the EU but who remain insured because of contributions paid during their working life. One of its main functions is to provide for retired workers who are living in a Member State which is different from that in which they worked. The appellant remains insured under the Latvian social security scheme by virtue of the contributions paid during her working life there. She did not come to this country to work here, but the basis of her residence in this country is irrelevant to the personal scope of Regulation 1408/71. Its application is not limited to those whose current residence arises from an exercise of the right of free movement for the purpose of employment or other economic activity conferred by EU law. Article 3 of Regulation 1408/71 addresses the issue of equality of treatment. It was amended by Regulation (EC) No 647/2005 with effect from 13 April 2005. As amended, it provides as follows: 1. Subject to the special provisions of this Regulation, persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State. The parties are agreed that article 3(1) prohibits both direct and indirect discrimination in respect of the appellants entitlement to state pension credit on grounds of nationality. They are also agreed that it does not prohibit indirect discrimination if it is objectively justified by considerations independent of the nationality of the person concerned. Article 4 sets out the matters covered by Regulation 1408/71 (the material scope). Article 4(1) provides that the Regulation shall apply to all legislation concerning the branches of social security listed in that paragraph, including old- age benefits: paragraph (1)(c). Article 4(2) provides as follows: 2. This Regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to schemes concerning the liability of an employer or shipowner in respect of the benefits referred to in paragraph 1. General social benefits of a kind not listed in article 4(1) were held not to constitute a social security benefit within the meaning of Regulation 1408/71: Case 249/83 Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 14. But article 4(2a), which was inserted by Regulation (EEC) No 1247/92 with effect from 1 June 1992, as amended by Regulation (EC) No 647/2005 with effect from 13 April 2005, now provides so far as relevant: This Article shall apply to special non-contributory cash benefits which are provided under legislation which, because of its personal scope, objectives and/or conditions for entitlement has characteristics both of the social security legislation referred to in paragraph 1 and of social assistance. Special non-contributory cash benefits means those: (a) which are intended to provide either: (i) supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1, and which guarantee the persons concerned a minimum subsistence income having regard to the economic and social situation in the Member State concerned; or (ii) , and (b) where the financing exclusively derives from compulsory taxation intended to cover general public expenditure and the conditions for providing and for calculating the benefits are not dependent on any contribution in respect of the beneficiary. and (c) which are listed in Annex IIa. Among the special non-contributory benefits listed in Annex IIa in respect of the United Kingdom is state pension credit: para Y(a). The parties are agreed that state pension credit falls within the material scope of Regulation 1408/71 as a special non-contributory benefit to which it applies. Article 4(4) of Regulation 1408/71 provides: This Regulation shall not apply to social and medical assistance, to benefit schemes for victims of war or its consequences. State pension credit is a means tested non-contributory benefit. As such, it would not previously have fallen within the definition of social security. As a non- discretionary cash benefit, it does not fall within the concept of social assistance either, unlike a discretionary cash benefit or the provision of social services. But it falls within the material scope of the Regulation because it is among the special non-contributory benefits listed in Annex IIa. For this purpose it is classified as a social security benefit. Issues The appellant contends that the refusal of state pension credit to a Latvian because she did not have a right to reside in the United Kingdom is prohibited by article 3(1) of Regulation 1408/71. Her case is that the refusal was on grounds of nationality, as the requirement to have a right to reside is met in the case of all UK nationals simply by virtue of their British nationality whereas nationals of the other Member States, other than Irish citizens (who can rely on their right to reside in Ireland), do not have that right. The Secretary of State concedes, and the Court of Appeal held in paras 25-26 of its judgment [2009] EWCA Civ 621, that regulation 2 of the 2002 Regulations is covertly, or indirectly, discriminatory between Latvian and United Kingdom nationals in that fewer nationals of EU Member States other than the United Kingdom have or will acquire a right to reside in the United Kingdom or elsewhere in the Common Travel Area. The appellants primary case, however, is that regulation 2 is overtly, or directly, discriminatory. Mr Lewis QC for the Secretary of State said that, if the requirement constituted direct discrimination, he could not seek to justify it. The following issues are therefore raised by this appeal: (1) Do the conditions of entitlement to benefit in regulation 2 of the 2002 Regulations give rise to direct discrimination for the purposes of article 3(1) of Regulation 1408/71? (2) If they give rise only to indirect discrimination, is that discrimination objectively justified on grounds independent of the appellants nationality? (3) If the indirect discrimination would otherwise be objectively justified, is that conclusion undermined by the favourable treatment that regulation 2(2) gives to Irish nationals? In the Court of Appeal Moses LJ, with whom the other members of the Court agreed, held that the conditions for entitlement to state pension credit were not overtly based on the nationality of the claimant because nationals from other Member States might satisfy the right to reside test in other words, they did not discriminate on grounds of nationality so the conditions were not directly discriminatory: paras 24-25. Addressing himself to the question whether the indirect discrimination was justified on grounds independent of the appellants nationality, he held that it was so justified: paras 52-53. State pension credit had the characteristics of social assistance, despite its inclusion within the scope of Regulation 1408/71. The prohibition on discrimination might be restricted in that context to those who were economically or socially integrated with the country whose social assistance they sought, for the purpose of protecting the finances of the country. He said that this conclusion imposed no disadvantage on the appellant in the exercise of her rights under the Treaty, as she retained her Latvian pension. He rejected the appellants argument that the justification for restricting entitlement to those economically or socially integrated within the United Kingdom was undermined by the special treatment of Irish nationals: para 54. Discrimination The fifth recital of the preamble to Regulation 1408/71 recognised that it was necessary, within the framework of the system of coordination that it laid down, to guarantee to workers living in the Member States within the Community equality of treatment under the various national legislations. Article 3(1) gives effect to this aim by requiring that persons to whom the Regulation applies are to enjoy the same benefits under the legislation of any Member State as the nationals of that State. The approach which the national court must adopt to this issue was described in Case C-124/99 Borawitz v Landesversicherungsanstalt Westfalen [2000] ECR I-7293: 23 In this respect, it must be borne in mind that the object of article 3(1) of Regulation No 1408/71 is to ensure, in accordance with [article 39 EC], equal treatment in matters of social security, without distinction based on nationality, for the persons to whom that regulation applies by abolishing all discrimination in that regard deriving from the national legislation of the Member States (Case C- 131/96 Mora Romero v Landesversicherungsanstalt Rheinprovinz [1997] ECR I-3659, paragraph 29. 24 It is settled case law that the principle of equal treatment, as laid down in that article, prohibits not only overt discrimination based on the nationality of the beneficiaries of social security schemes but also all covert forms of discrimination which, through the application of other distinguishing criteria, lead in fact to the same result (Mora Romero, paragraph 32). 25 Accordingly, conditions imposed by national law must be regarded as indirectly discriminatory where, although applicable irrespective of nationality, they affect essentially migrant workers or where the great majority of those affected are migrant workers, as well as conditions which are applicable without distinction but can more easily be satisfied by national workers than by migrant workers or where there is a risk that they may operate to the particular detriment of migrant workers (Case C-237/94 OFlynn v Adjudication Officer [1996] ECR I-2617, paragraph 18). 26 It is otherwise only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate aim pursued by the national law (OFlynn, paragraph 19). The European Court applied the adjectives overt and covert to the two forms of discrimination discussed in this passage. As Mr Cox for the appellant explained, however, they are best described as direct and indirect discrimination. Direct discrimination occurs where the discrimination is based on the nationality of the beneficiaries of social security schemes: Borawitz, para 24. Indirect discrimination occurs where, through the application of other criteria, the legislation leads to the same result: Borawitz, para 25. Advocate General Sharpston used the expressions direct and indirect when she analysed the Courts case law on discrimination in Case C-73/08 Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559, as did the Court in paras 40-41 of its judgment. In para 46 of her opinion the Advocate General said that the distinction between direct and indirect discrimination lacks precision, and in para 50 that the distinction between what is overt and covert does not necessarily always coincide with that between direct and indirect discrimination. But I think that Mr Lewis identified the issue in this case correctly when he said that the key question on the discrimination issue is whether the conditions for entitlement to state pension credit are formulated in terms of the nationality of the claimants, or in terms of criteria other than nationality. The basis of entitlement under section 1(2)(a) of the State Pension Credit Act 2002 is whether the claimant is in Great Britain. Thus far, it appears to be based solely on physical presence in this country and to have nothing to do with nationality. But the matter does not, of course, stop there. Section 1(2)(a) must be read with the 2002 Regulations which, as required by section 1(5)(a) of the 2002 Act, set out the circumstances in which a person is to be treated as being in, or not being in, Great Britain. This test appears, at a superficial level, to have nothing to do with nationality either. It is expressed in terms of whether or not the person is habitually resident in the United Kingdom or elsewhere in the Common Travel Area. But the rules as to when a person is or is not to be treated as habitually resident do introduce tests which raise issues about nationality. They are also hard, at first reading, to assimilate. They involve the use of not just one, but two double negatives. In regulation 2(1) a list is given of five circumstances in which no person is not to be treated as habitually resident. Then in regulation 2(2) a direction is given that no person shall be so treated if he does not have a right to reside there. As Lord Walker said in the course of the argument, the wording of these provisions suggests that they may be trying to hide something. It is necessary to look more closely at their effect. Read in isolation, the right to reside requirement in regulation 2(2) sets out a test which no United Kingdom national could fail to meet. And it puts nationals of other Member States at a disadvantage. As already noted, a British citizen has, by virtue of his or her United Kingdom nationality, a right to reside in the United Kingdom by virtue of his right of abode under section 2(1) of the Immigration Act 1971. Those who do not have United Kingdom nationality do not have that right automatically. Nationals of other Member States of the EU who do not fall within the provisions of regulation 2(1) must do something else to acquire it. Under EU law they must be economically active or self-sufficient, or must be a member of the family of an EU citizen who meets these requirements. The disadvantage which nationals of other Member States will encounter in trying to meet the requirements of regulation 2(2) is due entirely to their nationality. Had a right to reside in the United Kingdom or elsewhere in the Common Travel Area been the sole condition of entitlement to state pension credit, it would without doubt have been directly discriminatory on grounds of nationality. The effect of regulation 2(2) of the 2002 Regulations must, however, be looked at in the context of section 1(2)(a) of the 2002 Act and regulation 2 as a whole. The condition which all claimants must meet, if they are to be treated as in Great Britain for the purposes of section 1(2)(a) of the 2002 Act, is that they must be habitually resident in the United Kingdom or elsewhere in the Common Travel Area. Everyone, including United Kingdom nationals, must meet this requirement. But while all United Kingdom nationals have a right to reside in the United Kingdom, not all of them will be able to meet the test of habitual residence. Most are, of course, habitually resident here. Others are not. They can all meet the right to reside requirement that regulation 2(2) sets out because of their nationality. But nationality alone does not enable them to meet the requirement in regulation 2(1). Katherine Fleay, an employee of the Department of Work and Pensions involved in formulating policy relating to access by people from abroad to income-related benefits, referred in para 17 of her witness statement to the Departments memorandum to the Social Security Advisory Committee in February 1994. In that statement it was pointed out that some UK nationals returning to the UK after a long period of absence may be held not to be habitually resident in this country. EU nationals who satisfy one of the conditions listed in regulation 2(1) do not need to meet the right to reside test, as they are to be treated as habitually resident here. Mr Cox for the appellant submitted that the requirement to have a right to reside here discriminated directly between citizens of the United Kingdom on the one hand and citizens of other Member States on the other. It was a clear case of discrimination on the basis of nationality: Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 24. That being so, article 3(1) of Regulation 1408/71 required that discrimination to be eliminated by deeming the appellant to be a British citizen for the purposes of entitlement to state pension credit. I do not think that it is as simple as that when regulation 2 of the 2002 Regulations is read as a whole. The requirement which everyone must satisfy is that they are in Great Britain. The test which regulation 2 lays down is a composite one. Some United Kingdom citizens will be able to say that they are in Great Britain. Some will not. That is true also of nationals of other Member States. No doubt it will be more difficult in practice for nationals of other Member States to meet the test. But not all United Kingdom nationals will be able to meet the test either. In James v Eastleigh Borough Council [1990] 2 AC 751 a rule that those who were not of pensionable age had to pay for admission to a public swimming pool was held to directly discriminate between men and women because their pensionable ages were different. In that case there was an exact match between the difference in pensionable ages and the rule, as the right to free admission depended upon a single criterion an exact coincidence, as Lady Hale puts it: see para 91, below. The statutory pensionable age alone determined whether the person had to pay or not. As Lord Ackner put it at p 769, if you were a male you had, vis--vis a female, a five-year handicap. This was true of every male, not just some or even most of them. That is not so in the present case. There is no such exact match. The composite test is one that some UK nationals may fail to meet too because, although they have a right of residence, they are not habitually resident here. Furthermore, we are not required in this case to say whether this amounts to direct discrimination in domestic law. The question for us is whether it amounts to direct discrimination for the purposes of article 3(1) of Regulation 1408/71. The approach which EU law takes to a composite test of this kind is indicated by the decision of the European Court of Justice in Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559. The Belgian legislation that was analysed in that case was similar in structure to that of regulation 2 of the 2002 Regulations. It too involved a composite test, one element of which could be satisfied by a person who was not a national of the host Member State only if he met certain additional conditions but which every national of the host member state would automatically satisfy. A restrictive French education policy had resulted in an influx of students from France to Belgium, whose system was based on free access to education. This was thought to impose an excessive burden on public finances and to jeopardise the quality of the education provided in Belgium. So the government sought, by a decree adopted in June 2006 by the Parliament of the French Community of Belgium, to limit the number of non-resident students who were entitled to enrol in certain programmes in the first two years of undergraduate studies in each university or school of higher education. A resident student for the purposes of this decree was defined as a student who, at the time of registration in an institution of higher education, proved that his principal place of residence was in Belgium. This was the first of two cumulative conditions which a prospective student had to satisfy. He also had to fulfil one of eight other conditions, one of which was that he had the right to remain permanently in Belgium. Belgians have that right by virtue of their Belgian nationality. Citizens of other Member States have the right to remain permanently in Belgium only if they have a right to do so which is recognised by EU law. Among the questions referred to the Court by the Belgian Constitutional Court was whether this measure was precluded by articles 12 and 18 EC read with articles 149 and 150 EC. Advocate General Sharpston, in a powerful opinion, identified the issues that this question gave rise to as being whether the conditions, which had to be satisfied cumulatively, constituted direct or indirect discrimination. She said that discrimination could be considered to be direct where the difference in treatment was based on a criterion which was either explicitly that of nationality or was necessarily linked to a characteristic indissociable from nationality: para 53. She then examined each of the cumulative conditions separately. She held that the first cumulative condition that the principal place of residence was in Belgium did not constitute direct discrimination. This was because Belgians and non-Belgians alike could establish their principal place of residence in Belgium. As this, apparently neutral, condition was likely to operate mainly to the detriment of nationals of other member states, it was indirectly discriminatory: paras 60-62. It seemed to her, in contrast, that the second cumulative condition was necessarily linked to a characteristic indissociable from nationality. Belgians automatically had the right to remain permanently in Belgium. They therefore satisfied the second cumulative condition automatically. Non-Belgians, on the other hand, had to fulfil additional criteria to acquire a right permanently to remain in Belgium or to satisfy one of the seven other conditions. This discrimination was based on nationality and was therefore direct discrimination. The answer to the question was that the measures in question were precluded by the articles of the EC Treaty that had been founded upon. However the Court did not adopt the approach of the Advocate General. As Lord Walker points out, it did not explain why it thought that the Advocate General was wrong to treat the case as direct discrimination. But the contrast between her carefully reasoned approach and that of the Court is so profound that it cannot have been overlooked. One must assume that her approach, which was to find that the measures were precluded because the second condition was directly discriminatory, was rejected by the Court as too analytical. The Court looked at the conditions as a whole. It referred to its judgment in Case C-212/05 Hartmann v Freistaat Bayern [2007] ECR I-6303, para 29, where it acknowledged that the principle of non-discrimination prohibits not only direct discrimination on grounds of nationality but also all indirect forms of discrimination which lead in fact to the same result by the application of other criteria of differentiation. It said that a provision of national law was to be regarded as indirectly discriminatory if it was liable to affect nationals of other Member States more than nationals of the host State and there was a consequent risk that it would place the former at a particular disadvantage: paras 40-41. It then proceeded in para 42 to make the following analysis, by looking at the residence conditions cumulatively: In the cases in the main proceedings, the decree of June 16, 2006 provides that unrestricted access to the medical and paramedical courses covered by that decree is available only to resident students, that is those who satisfy both the requirement that their principal residence be in Belgium and one of the eight other alternative conditions listed in points 1-8 of the first paragraph of article 1 of that decree. [Emphasis added] The Court concluded that, looked at in this way, the national legislation created a difference in treatment between resident and non-resident students. A residence condition, such as that required by this legislation, was more easily satisfied by Belgian nationals, who more often than not reside in Belgium, than by nationals of other Member States, whose residence is generally in a Member State other than Belgium. It followed that the national legislation affected nationals of Member States other than Belgium more than Belgian nationals and placed them at a particular disadvantage which was indirectly discriminatory. The second cumulative condition as to the right to remain permanently in Belgium which the Advocate General said was necessarily linked to a characteristic indissociable from nationality and directly discriminatory, was subsumed into the first when the two conditions were treated cumulatively. The fact that the Court then went on to consider whether the difference in treatment was objectively justified makes it plain beyond any doubt that it considered the case to be one of indirect, rather than direct, discrimination. There is an obvious similarity between the provisions under consideration in Bressol and the circumstances in which a person is to be treated as being in Great Britain by regulation 2 of the 2002 Regulations. The tests are of the same type and they can be analysed in the same way. Just as in that case the specified courses were to be available to resident students only, here a person must be in Great Britain to be entitled to state pension credit. The European Court did not follow the Advocate Generals invitation to concentrate exclusively on the second cumulative condition. Nor did it pick up the point that she made in footnote 34 to her opinion, where she drew attention to Advocate General Jacobs opinion in Case C-79/99 Schnorbus v Land Hessen [2000] ECR I-10997, [2001] 1 CMLR 40, para 33 which has been discussed by Lord Walker (paras 66-68, below) and by Lady Hale (paras 88-91, below). Instead it looked at the conditions cumulatively and treated them overall as importing a residence test which was indirectly discriminatory. So it would be wrong in this case to concentrate exclusively on the regulation 2(2) right to reside test which is linked to nationality. Looking at the regulation as a whole, in the context of section 1(2)(a) of the 2002 Act, the test which is laid down is that the claimant must be in Great Britain. This test is constructed in a way that is more likely to be satisfied by a United Kingdom national than by a national of another Member State. The Courts reasoning in Bressol tells us that it is not directly discriminatory on grounds of nationality. But it puts nationals of other Member States at a particular disadvantage, so it is indirectly discriminatory. As such, to be lawful, it has to be justified. Justification The test that must be applied is to be found in Case C-209/03 R (Bidar) v Ealing London Borough Council [2005] QB 812, para 54. In that case the European Court held that the criteria in the Education (Student Support) Regulations 2001 for granting assistance to cover the maintenance of students risked placing primarily nationals of other Member States at a disadvantage, because the condition requiring them to have residence in the United Kingdom prior to their studies was likely to be more easily satisfied by United Kingdom nationals: para 53. In para 54 the Court said that such a difference in treatment could be justified only if it was based on objective considerations independent of the nationality of the persons concerned and was proportionate to the legitimate aim of the national provisions. Another source for this test is Case C-138/02 Collins v Secretary of State for Work and Pensions [2005] QB 145, para 66, where the same formula is set out; see also Case C-164/07 Wood v Fonds de Garantie des Victimes des Actes de Terrorisme et dAutres Infractions [2008] 3 CMLR 265, para 13. The parties are agreed that article 3(1) of Regulation 1408/71 does not prohibit indirect discrimination if it is objectively justified by considerations that are independent of the nationality of the person concerned. They are also agreed that the proportionality of the conditions for state pension credit under regulation 2 of the 2002 Regulations is not in issue. As Mr Cox put it in his reply, what the Secretary of State has to show is that the difference in treatment of nationals of other member states is based on objective considerations independent of nationality. If the Secretary of State can meet this requirement, there is no need to examine the question of proportionality. If he cannot do so, it will not help him to say that the conditions for entitlement are proportionate. There are, then, two questions that need to be addressed. First, do the Secretary of States reasons for the difference in treatment provide an objective justification for it? Secondly, if they do, is that justification based on considerations that are independent of the nationality of the persons concerned? The jurisprudence of the European Court has consistently shown that these are matters for the national court to determine: Bressol v Gouvernement de la Communaut Franaise [2010] 3 CMLR 559, para 64. The Secretary of States reasons for the introduction of the right to reside requirement in the 2002 Regulations were set out in a statement made in accordance with section 174(2) of the Social Security Administration Act 1992 in April 2004 in response to concerns raised by the Social Security Advisory Committee (Cm 6181). As Katherine Fleay explained in her witness statement, para 4, it was made at the same time as regulations introducing the right to reside test were laid before Parliament. The underlying purpose was said to be to safeguard the United Kingdoms social security system from exploitation by people who wished to come to this country not to work but to live off income- related benefits, while allowing those who come here genuinely to work to have access to them: para 4 of Cm 6181. The purpose of the habitual residence test was to prevent benefit tourism. It was believed to be not unreasonable to expect people who were not economically active, whatever their nationality, to show that they had decided to live indefinitely in the United Kingdom and had a right to reside here before being entitled to benefits funded by the UK tax-payer: paras 13-17. In para 45 he gave this further explanation: As already explained, the Government considers that it is not unreasonable to concentrate benefits on people who have a particularly close connection with the UK or to expect people to have a right to reside in the UK before they become entitled to income-related benefits funded by the UK tax-payer. The EC Directives governing the right of those who are economically inactive to reside in other member states have been in place since the early 1990s. Before the current Immigration (European Economic Area) Regulations 2000, the Immigration (EEA) Order 1994 made clear in line with those Directives that EEA nationals who were economically inactive (for example, retired people) had to have sufficient resources to avoid their becoming a burden on our social assistance system in order to be entitled to reside in the UK without having leave to remain. The Governments proposals merely seek to bring the income-related benefit rules into line with this long- standing requirement. In para 57 of the statement the Secretary of State said that the government believed that its proposals were compatible with EU law as there would be no difference in treatment as between nationals of the eight accession states and other nationals. In para 58 he added this further point: Moreover, the new requirement to have a right to reside in the UK as a condition of access to income-related benefits will apply to UK nationals as well as current EEA nationals and nationals of the acceding states. It will thus apply equally to nationals of all Member States. In para 61 he again stated that the government was concerned that some current EEA nationals had taken advantage of free movement within the European Economic Area to become an unreasonable burden on this countrys benefit system, even though this negated their right to reside in the United Kingdom. It was reasonable to expect people to have a right to reside in the United Kingdom before they could have access to its income-related benefits, particularly as support might last for many years. His proposals were expected to bring the United Kingdom into line with the broad approach of policy and practice in Europe. It should be noted, in regard to that last observation, that by letter dated 4 June 2010 the European Commission invited the United Kingdom pursuant to article 258 TFEU to submit observations on the compatibility with EU law of the imposition of a right to reside test for benefits, including state pension credit, falling within the scope of Regulation 1408/71. Under this procedure, if the Commission is not satisfied with the United Kingdoms observations, it will send a reasoned opinion to the Member State following which, if it does not remedy the alleged breach within the time-frame set by the Commission, the Commission may bring the matter before the Court of Justice of the European Union. Mr Drabble QC for the intervener, the AIRE Centre (Advice on Individual Rights in Europe), submitted that the Commissions decision to issue a letter of formal notice supported the conclusion that it was at least not acte clair that right to reside test was compatible with EU law. So far, no opinion has yet been issued by the Commission with reference to any alleged infringement of Regulation 1408/71. In these circumstances I would not draw any conclusions either one way or the other from these developments. The justification that was given in para 45 of the Secretary of States statement is repeated in the agreed Statement of Facts and Issues, para 33: The justification advanced by [the Secretary of State] for the discriminatory effect of regulation 2 of the 2002 Regulations is to protect the resources of the United Kingdom by refusing means- tested benefits to non-economic European Union migrants who cannot support themselves and that there is a principle of EU law that Member States were entitled not to grant social assistance to non-economically active nationals of other EU Member States. Mr Lewis submitted that the requirements of regulation 2 of the 2002 Regulations were objectively justifiable. He said that para 33 of the Statement of Facts and Issues was not meant to be a complete statement. A person would be eligible to receive state pension credit if he could show economic integration in the United Kingdom or a sufficient degree of social integration here. Where there was social integration, the person would be eligible. What the regulation sought to do was to prevent exploitation of welfare benefits by people who came to this country simply to live off benefits without working or having worked here. It was important to understand the nature of state pension credit. As the Court of Appeal observed in para 41, Regulation 1408/71 draws a distinction between social security benefits within article 4(1) and hybrid benefits within article 4(2a). Social security benefits, such as the appellants Latvian pension, could not be the subject of a residence condition. They must be exportable to any state within the EU. Hybrid benefits on the other hand, such as state pension credit, reflected the social and economic conditions in the country where they were paid. They did not lose their character as social assistance simply because they were treated by the article as hybrid. What mattered was the nature and function of the benefit. State pension credit was social assistance despite the hybrid status that it was given by Regulation 1408/71. It is an income-related benefit to help people in need. So it was not inconsistent with the purpose of Regulation 1408/71 for access to this benefit to be refused to people who did not have right to reside in this country. Mr Lewis submitted that this approach was supported by the judgment of the European Court in Case C-456/02 Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820 and various EU measures dealing with the right of residence in EU law and its consequences such as Council Directive 90/364 EEC, which made it a condition of the grant of a right of residence in a host Member State to nationals of other Member States that they have sufficient resources to avoid becoming a burden on its social assistance system during their period of residence. Mr Trojani was a French national. He moved to Belgium where he worked for a while without being registered. He then sought social assistance in the form of a benefit known as the minimex. One of the questions was whether he had a right of residence in Belgium, and was thus entitled to social assistance there, simply by virtue of being an EU citizen. In para 17 of his opinion in Trojani Advocate General Geelhoed said that the differential treatment of economic and non-economic migrants, viewed historically, was based on the need to remove obstacles to inter-state trade and later to provide for the free movement of persons. In para 18 he contrasted the historical position with what it is today: The difference in treatment now has a more pragmatic basis. So long as social security systems have not been harmonised in terms of the level of benefits, there remains a risk of social tourism, ie moving to a Member State with a more congenial social security environment. And that is certainly not the intention of the EC Treaty, which to a considerable extent leaves responsibility for social policy in the hands of the Member States. The Community legislature has acted on the assumption that an economic migrant will not claim any subsistence allowance in the host Member State. In para 70 he said that the basic principle of Community law is that persons who depend on social assistance will be taken care of in their own Member State. There was no doubt that Mr Trojani was applying for the minimex because he did not have sufficient resources to provide for himself. In these circumstances he could not claim a right of residence on the basis of article 18 EC. The Court endorsed the approach of the Advocate General. In paras 35-36 it said: 35 It follows from the judgment making the reference that a lack of resources was precisely the reason why Mr Trojani sought to receive a benefit such as the minimex. 36 In those circumstances, a citizen of the Union in a situation such as that of the claimant in the main proceedings does not derive from article 18 EC the right to reside in the territory of a Member State of which he is not a national, for want of sufficient resources within the meaning of Directive 90/364. Mr Coxs response to these arguments was that the purpose of regulation 2 of the 2002 Regulations was simply to exclude other EU citizens. This was plainly contrary to article 3(1) of Regulation 1408/71, whose effect was that the provisions of Regulation 1408/71 applied to all those who were within its personal scope without distinction as to whether they were lawfully resident in the host Member State. When the Secretary of State used the word people in his statement (see paras 37-38, above) it was plain that he was referring to citizens of other Member States. He was not seeking to impose additional conditions on United Kingdom nationals, as it was enough for them to prove British citizenship. For those who were not United Kingdom or Irish nationals, habitual residence was no longer to be enough. The Secretary of States purpose was not independent of nationality. So the regulation could not be justified by objective considerations independent of the nationality of the persons concerned. As for the nature of state pension credit, some benefits which had the characteristics of social assistance were properly characterised as social security. That was what article 4(2a), inserted by Regulation (EC) No 647/2005, was designed to do. There was consistent case law, starting with Case 1/72 Rita Frilli v The State (Minister for Social Security) [1973] CMLR 386, para 14, to the effect that benefits which had the dual characteristics of social assistance and social security, and which conferred upon beneficiaries a legally defined position giving them a right to benefit, are to be treated as social security. This was significant because, if the principle which the Secretary of State relied upon (see para 40, above) did exist, it was only relevant to social assistance benefits and not in respect of social security. As I understood Mr Coxs argument, he did not seriously question the proposition that the Secretary of States reasons are objectively justifiable. The purpose of regulation 2 of the 2002 Regulations is to ensure that the claimant has achieved economic integration or a sufficient degree of social integration in the United Kingdom or elsewhere in the Common Travel Area as a pre-condition of entitlement to the benefit. The effect of article 4(2a) of Regulation 1408/71 is that social assistance benefits such as state pension credit share features with social security. But I agree with the Court of Appeal that the widening of the scope of Regulation 1408/71 does not preclude a justification of indirect discrimination which is based on the nature of the benefit: para 51. The Secretary of States justification lies in his wish to prevent exploitation of welfare benefits by people who come to this country simply to live off benefits without working here. That this is a legitimate reason for imposing the right of residence test finds support in Advocate General Geelhoeds opinion in Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820, para 70 that it is a basic principle of Community law that persons who depend on social assistance will be taken care of in their own Member State. The more difficult question is whether this justification is independent of the nationality of the persons concerned. A finding that the conditions in regulation 2 are indirectly discriminatory on grounds of nationality provides the context for a consideration of this question. Inevitably the two questions are bound up together. But the fact that the difference in treatment is based indirectly on grounds of nationality cannot be permitted to lead inevitably to the conclusion that a justification for it cannot be regarded as independent of the nationality of the persons concerned. Otherwise the test for its justification which the court has laid down would be incapable of ever being met. The approach which the test invites at this stage is to examine the justification on its own merits without regard to its indirect discriminatory consequences. The justification is founded on the principle that those who are entitled to claim social assistance in the host Member State should have achieved a genuine economic tie with it or a sufficient degree of social integration as a pre-condition for entitlement to it. In Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA Civ 1310, [2009] 2 CMLR 85, para 2, Maurice Kay LJ said that if a citizen of one Member State who is lawfully present in another Member State can, without difficulty and whilst economically inactive, access the social security benefits of the host State, the implications for the more prosperous Member States with more generous social security provisions are obvious. The rules that regulation 2 of the 2002 Regulations lays down are intended to meet this problem. There are various ways in which the pre-condition for entitlement can be achieved under its provisions. They are not exclusively dependent on the nationality of the persons concerned. I think that there is force in Mr Coxs point that the persons to whom the Secretary of State was directing attention in his statement in response to concerns raised by the Social Security Advisory Committee were persons who were not nationals of the United Kingdom. The context for the Secretary of States remarks was the perception that nationals of other Member States would take advantage of the right of free movement to access income-related benefits. But even nationals of the United Kingdom must satisfy the test of habitual residence in order to be entitled to state pension credit: see para 26, above. The same is true of Commonwealth citizens who have a right of abode here under section 2 of the Immigration Act 1971 and persons with a right of residence in the United Kingdom granted pursuant to that Act. The principle on which the Secretary of States justification relies underlies the EU rules as to whether, and if so on what terms, a right of residence in the host Member State should be granted. This is the issue to which Council Directive 90/364 EEC is directed. In that context there is no prohibition on discrimination on grounds of nationality under EU law. So there is no need to be concerned with the question whether the approach that is taken there can be justified on grounds that are independent of nationality. Three questions then arise. The first is whether the Secretary of States justification can be regarded as relevant in the present context. The second is whether it is a sufficient justification given the effect of the rules that regulation 2 of the 2002 Regulations lays down. The third is whether it is independent of the nationality of the person concerned. The first and second questions can be taken together. The justification is relevant because the issues that arise with regard to the grant of a right of residence are so closely related to the issues that are raised by the appellants claim to state pension credit. They are, at heart, the same because they are both concerned with a right of access to forms of social assistance in the host Member State. It is also a sufficient justification, in view of the importance that is attached to combating the risks of what the Advocate General in Trojani v Centre Public dAide Sociale de Bruxelles [2004] 3 CMLR 820, para 18 described as social tourism. As for the third question, the answer to it depends not just on what the Secretary of State himself said in his statement (see paras 37-38, above), but also on the wording of the regulation and its effect. They show that the Secretary of States purpose was to protect the resources of the United Kingdom against resort to benefit, or social tourism by persons who are not economically or socially integrated with this country. This is not because of their nationality or because of where they have come from. It is because of the principle that only those who are economical or socially integrated with the host Member State should have access to its social assistance system. The principle, which I take from the decision in Trojani, is that it is open to Member States to say that economical or social integration is required. A persons nationality does, of course, have a bearing on whether that test can be satisfied. But the justification itself is blind to the persons nationality. The requirement that there must be a right to reside here applies to everyone, irrespective of their nationality. For these reasons I would hold that the Secretary of State has provided a sufficient justification, and that it is independent of the nationality of the person concerned. It follows that the indirect discrimination that results from regulation 2 of the 2002 Regulations was not made unlawful by article 3(1) of Regulation 1408/71. Irish nationals Citizens of the Republic of Ireland have, as Irish nationals, a right to reside in the Republic of Ireland by virtue of their Irish citizenship. So they meet the requirement of regulation 2(2) of the 2002 Regulations, even though they do not have a right to reside in the United Kingdom and are not habitually resident here. It is enough that they are habitually resident in Ireland. So, if they are in Great Britain too, they have the same right to state pension credit as United Kingdom nationals who are habitually resident in the United Kingdom and in Great Britain. The appellant submits that, as entitlement to state pension credit is extended to Irish nationals, it is discriminatory not to extend it to nationals of all other Member States. As regulation 2(2) treats Irish citizens as if they were United Kingdom citizens, Latvian citizens too should be so treated by the operation of Regulation 1408/71. This is because that Regulation abolished all discrimination based on nationality and, in consequence, the domestic measure is to be disregarded. Mr Cox summarised his point graphically in his closing submission. He said that it was not open to the United Kingdom to give Irish nationals a free pass to state pension credit simply by showing their passports, while starving out nationals of the other Member States. The provision for Irish citizens in regulation 2 is protected by article 2 of the Protocol on certain aspects of article 14 EC (now article 26 TFEU) to the United Kingdom and Ireland, commonly referred to as the Protocol on the Common Travel Area. Having first been annexed to the Treaty of Amsterdam, it is now annexed to the Treaty on the Functioning of the European Union and the Treaty on European Union as Protocol (No 20). It states that the United Kingdom and Ireland may continue to make arrangements between themselves relating to the movement of persons between their territories. It also provides that nothing in articles 26 and 77 of the Treaty on the Functioning of the European Union or in any other provision of that Treaty or of the Treaty on European Union or in any other measure adopted under them shall affect any such arrangements. Mr Lewis said that the appellants argument gave rise to four questions: (1) Does the fact that different arrangements are made for Irish nationals than for nationals of other Member States undermine the policy justification for not extending the benefit to the other Member States? (2) Is this permitted by the Protocol? (3) If not, is it unlawful because it is discriminatory and unjustified? (4) If it is unlawful, what can be done about this? He submitted that the answer to the first question was straightforward. For economic, historical and social reasons Ireland is simply different from the other Member States. Recognising these differences did not undermine the policy justification for treating the other Member States differently. I do not think that Mr Cox had any answer to that submission. Indeed he said that he did not seek in any way to affect the operation of regulation 2(2) in respect of Irish citizens. The appellants case was that, as a citizen of Latvia, she was entitled to the same treatment as they receive under the arrangements that are protected by the Protocol. The points in issue, therefore, are those focussed by the second, third and fourth questions. The key words in the Protocol are those which indicate that the arrangements between the United Kingdom and Ireland that are protected by it are those relating to the movement of persons between their territories. The principle of international law which precludes a State from denying its own nationals the right to enter its territory and reside there must be complied with in applying those arrangements: Case C-171/96 Roque v Lieutenant Governor of Jersey [1998] 3 CMLR 143, paras 38-39. Mr Cox submitted that the arrangements with which the 2002 Regulations were concerned were not related to movement of persons between Ireland and the United Kingdom. This was because an Irish citizen who had never set foot in Ireland and arrived in the United Kingdom could meet the requirement simply because he had a right to reside in Ireland. Mr Lewis said that the situation referred to was wholly exceptional. In any event, such a person would not, on arrival, satisfy the requirement as he would not be habitually resident either in the United Kingdom or in Ireland. Looking at the matter realistically, it was plain that the arrangements with which the 2002 Regulations were concerned did facilitate free movement of persons between the two countries. It did not limit the entitlement of Irish nationals to state pension credit to those who were economically active. It facilitated the free movement of persons, not just workers. Mr Cox submitted that there was no arrangement between the United Kingdom and Ireland protected by the Protocol because the provision made by each country for the others nationals was not reciprocal. Mr Lewis accepted that different rules as to entitlement to social security applied in Ireland. The Irish legislation does not provide an exemption for United Kingdom nationals or provide that residence in the United Kingdom is to be treated as residence in Ireland, as it is to be presumed unless the contrary is shown that a person is not habitually resident in the State unless he has been present in the State or any part of the Common Travel Area for a continuous period of two years: Social Welfare (Miscellaneous Provisions) Act 2004, section 17 and Schedule 1. But he submitted that absolute reciprocity was not required for an arrangement to fall within the protection of the Protocol. The arrangements could be one way only, so long as they related to the free movement of persons between the two countries. I think that some measure of reciprocity is contemplated by the Protocol. But, as these are arrangements between two sovereign States, it would be going too far to insist on a precise match between the arrangements on one side of the Irish Sea and the other. The words of article 2 do not suggest that the arrangements must meet this test to attract its protection. Mr Cox submitted that, as it derogated from fundamental Community law principles, the Protocol fell to be construed strictly. But in my opinion the rather loose word arrangements indicates that it is for the two States themselves to determine what would best suit the overall objective of promoting free movement between their territories, while taking account of each countrys different economic and social circumstances. I would hold therefore that there is sufficient reciprocity between the respective conditions for entitlement, and a sufficient connection between the social security arrangements on either side and the aim of promoting free movement between the two countries, for the arrangements in regulation 2 of the 2002 Regulations to attract the protection of article 2 of the Protocol. The third and fourth questions on Mr Lewiss list do not need to be answered. I would reject the appellants argument that she is entitled to be treated in the same way as Irish nationals. Conclusion I would hold that regulation 2 of the 2002 Regulations is indirectly discriminatory, but that the condition that it lays down is objectively justifiable on grounds independent of the appellants nationality. I would dismiss the appeal. Lord Hope has given a full and clear summary of the facts and the relevant national and EU legislation. I can proceed at once to the three issues identified in para 20 of Lord Hopes judgment. Direct or indirect discrimination? The judgment of the Court of Appeal now under appeal was, by a strange coincidence, delivered on the same day (25 June 2009) as the opinion of Advocate General Sharpston in Bressol v Gouvernement de la Communaut Franaise (Case C73/08) [2010] 3 CMLR 559. The Court of Appeal did not therefore have the opportunity of considering it. The Advocate Generals opinion and the judgment of the Grand Chamber of the Court of Justice (delivered on 13 April 2010) are discussed in paras 30-34 of Lord Hopes judgment. As he says, the difference between the Advocate Generals opinion and the Grand Chambers judgment is profound. The opinion (paras 43-58) sets out a lengthy, scholarly and closely- reasoned discussion of the difference between direct and indirect discrimination. The Grand Chamber made no reference to this discussion. It treated the case as one of indirect (and therefore potentially justifiable) discrimination without explaining why the Advocate General was wrong to treat the case as direct discrimination. Lord Hope (para 33) reads the judgment as treating the second cumulative condition (as to the right to remain permanently in Belgium) as having been subsumed into the first condition, but I confess that I cannot discern that subtlety in the judgment. The Grand Chamber seems to have regarded it (para 45) simply as a residence condition more easily satisfied by Belgian nationals. I regret that the Grand Chamber did not explain why they disagreed with the Advocate General. She has, if I may respectfully say so, grappled with the real difficulties of this issue, although I do not agree with all her conclusions. She has proposed a general definition of direct discrimination (para 56): I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. In my view this is too narrow a definition. As Lord Mance said in R (E) v Governing Body of JFS [2010] 2 AC 728, para 89, approving a submission from Miss Rose QC, an organisation which admitted all men but only women graduates would be engaged in direct discrimination on the grounds of sex. The Advocate Generals proposed test works only if in this example the categories are limited to cohorts of non-graduates (or, in the well-known case of James v Eastleigh Borough Council [1990] 2 AC 751, to cohorts of men and women over 60 years but under 65 years of age). It follows that in my opinion the Court of Appeal were wrong in adopting the reasoning in paras 22 to 24 of the judgment of Moses LJ. He said in para 22: Article 3 [of Council Regulation (EC) No 1408/71] requires the conditions for entitlement to State Pension Credit, under the legislation of the United Kingdom, to be the same for Latvian nationals as for United Kingdom nationals. Accordingly, it is necessary to focus on those conditions as a whole rather than one particular element of those conditions to the exclusion of others. The right to reside condition does not by itself entitle a claimant to the benefit. I do not see why the fact that there is more than one condition makes it necessary to focus on the conditions as a whole, if it is only one condition that produces unequal treatment. The right to reside condition is not a sufficient condition for entitlement, but it is a necessary condition, and it is one that is automatically satisfied by every British national. The fact that there is another cumulative condition (actual or deemed habitual residence) is irrelevant (Gravier v City of Lige (Case 293/83) [1985] ECR 593, para 14). It might be different if there were alternative conditions, because neither condition would then be necessary (although one would be sufficient). Returning to Bressol, I note that Advocate General Sharpston referred to the opinion of Advocate General Jacobs in Schnorbus v Land Hessen (Case C-79/99) [2000] ECR I-10997, para 33: It may be said that discrimination on grounds of sex arises where members of one sex are treated more favourably than the other. The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex or necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than the other is in fact affected. That is, to my mind, the best guidance that we have. The second category (necessarily linked to a characteristic indissociable from sex) roughly corresponds to Advocate General Sharpstons proposed general definition, but is, I think, a better way of putting it. Schnorbus was a case brought by a female law graduate whose progress to the final part of her professional training had been held up by a shortage of training places. In the allocation of places some categories of applicants were given priority, including those (all male) who had completed a years compulsory national service. This was, Advocate General Jacobs advised, potentially indirect discrimination on the ground of sex, but was justified as one in a list of cases where priority was appropriate (others were disability, adverse social or family circumstances, and being a mature student). Advocate General Sharpston (para 67) sought to distinguish this case from Dekker v Stichting Vormingscentrum voor Jong Volwassenen (VJVCentrum) Plus (Case C-177/88) [1990] ECR I-3941 (the well-known case of a female refused a job because she was pregnant) on the ground that not all men actually completed national service (some were no doubt found medically unfit). But by the same token not every woman applying for a job is capable of becoming pregnant: her age or medical history may make that impossible. The true distinction was pointed out by Advocate General Jacobs in Schnorbus, that capacity for childbearing is a natural physical characteristic of women, whereas a mans liability to do national service was imposed by legislation (para 40): No amount of legislation can render men capable of bearing children, whereas legislation might readily remove any distinction between men and women in relation to compulsory national service. The difference depended on a statutory obligation, and was not between men and women as such. Advocate General Jacobs opinion in Schnorbus has other valuable insights. He discussed whether there is some circularity in the rule that provisions potentially amounting to indirect discrimination can be justified only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, a form of words frequently used by the Court of Justice (for instance in Borawitz v Landesversicherungsanstalt Westfalen (Case C-124/99) [2000] ECR I-7293, para 26, but not, as it happens, by the Grand Chamber in Bressol, paras 47-48). In his opinion in Schnorbus Advocate General Jacobs observed (para 47): The Courts usual formulation may seem circular. To say that there is no discrimination based on sex when a difference in treatment is justified by factors unrelated to discrimination based on sex appears self-evident. In line with the definition in Directive 97/80, however, I take it to mean that (indirect) discrimination is not unlawful when the difference in treatment is justified by objective factors not in themselves (that is to say, not directly) related to sex. (This question of circularity seems to have been also in the mind of the Social Security Commissioner, Mr Rowland, in his decision in this case, para 13). As examples Advocate General Jacobs would, I think, have given those that he had already referred to: pregnancy (Dekker) is in itself related to sex, whereas liability to national service (Schnorbus) is not, although a national legislature may choose sex as a demarcation line. But this test of seeing whether the suspect ground of discrimination is directly (in the sense, as I understand it, of centrally, or intrinsically) involved is more difficult to apply to the abstract juridical concept of nationality. I agree with Lord Hope (para 33) that in Bressol the Grand Chamber must be taken to have regarded the Advocate Generals approach as too analytical. I would like to be able to agree that her approach accords well with our domestic law, but I must say that it seems to me hard to reconcile with the approach of the Court of Appeal in R (Elias) v Secretary of State for Defence [2006] 1 WLR 3213, the case of Mrs Elias who was British enough to be interned (in Hong Kong between 1941 and 1945) but not British enough to be compensated (under an official scheme introduced in 2000). In that case Mummery LJ, who gave the leading judgment, acknowledged (paras 104-113) the strength of the submissions made on behalf of Mrs Elias by Mr Rabinder Singh QC. But he felt bound to reject them (paras 113 and 114): The powerful submissions of Mr Singh raised serious doubts in my mind about the correctness of the judges ruling on this point, which, as Mr Singh pointed out, focused more on the edges of the effects of the criteria than on their central purpose or effect. In a general sense, discrimination with a discriminatory purpose, regardless of the particular form it takes, can be perceived as treating a person less favourably on racial grounds. I am, however, clear that, in the present state of the law, the particular form of discrimination matters, even if there are present in the circumstances of the case a discriminatory purpose and discriminatory effects. The 1976 Act, as amended, makes an important broad distinction between two different forms of discrimination. This distinction is consistent with the [Race Equality] Directive [2000/43/EC] and this Court must observe it. Discriminatory purpose? Mummery LJs observations about discrimination with a discriminatory purpose make it appropriate to mention a point which is not, I think, controversial, but may be worth spelling out. The dividing line between direct and indirect discrimination is emphatically not to be determined by some sort of mens rea on the part of one or more individual discriminators. A discriminatory purpose is not necessary for direct discrimination, nor (as Mummery LJ recognised) is it inconsistent with a finding of indirect discrimination. Where there is an allegation of direct discrimination of a systemic sort (embodied in legislation or rules, or in the settled practices and procedures of a public authority or an employer) it makes no difference whether or not the objectionable feature is in some way deliberately targeted at a particular group. That has been clear since the decisions of the House of Lords in R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 and James v Eastleigh Borough Council [1990] 2 AC 751. Conversely, it seems that a discriminatory purpose does not, on the present state of the law, prevent unequal treatment being regarded as no more than indirect discrimination which is capable of justification. It is hard to avoid the suspicion that legislators and government lawyers throughout the EU have become well aware of this. There is an obvious temptation for governments, in the face of understandable popular feeling (in this case, against benefit tourism) to try to draft their way out of direct into indirect discrimination, with a view to avoiding having to distribute large sums out of public funds, or having to make some other commitment of national resources, to beneficiaries whom their electors would not regard as deserving. Bressol and other cases concerned with the Belgian social security and education systems may be examples of this. In the area of fishing rights Commission of the European Communities v Ireland [1978] ECR 417 seems to be a striking example, since the Irish legislations detailed prescription for exempted vessels coincided with characteristics of vessels used by the Irish fishing fleet and was not justified by the need of conservation. In this country, Elias may be an example; and so may the amendments made in 2004 to the State Pension Credit Regulations 2002. Having said all that, I recognise that this Court must follow the judgment of the Court of Justice of the EU in Bressol, even if some of us do not fully understand its reasoning. This case must be treated as one of indirect discrimination. But the correlation between British nationality and the right to reside in Great Britain is so strong that the issue of justification must in my view be scrutinised with some rigour. Justification The justification advanced in the Secretary of States printed case (para 54, an expanded version of the summary in para 33 of the statement of facts and issues) is that the provisions of regulation 2 (as amended) are indeed objectively justified, as they legitimately seek to identify either economic integration or a sufficient degree of social integration (an objective which applies equally to UK and other EU nationals, and indeed to nationals of third countries). Reference is made to the Secretary of States formal statement under section 174(2) of the Social Security Administration Act 1992 laid before Parliament in April 2004. Reference is also made to Zalewska v Department for Social Development [2008] 1 WLR 2602, 2617. That was a split decision of the House of Lords on an issue as to the proportionality of measures taken in relation to economically active workers from A8 nations, and I find it of no assistance in this appeal. Proportionality is not an issue here. Nor are we concerned with economically active nationals of other EU States. The issue is whether the objective of a sufficient degree of social integration is something for the attainment of which the provisions of regulation 2(2) are an appropriate test, independent of the nationality of the person whose social integration is in question. This Court has had little assistance as to what social integration means in this context, as something separate from economic integration. The Court of Appeal (paras 27 to 40) seem to have addressed only economic integration. But I will assume in favour of the Secretary of State that it is a meaningful concept recognised by EU law, and that its precise content need not be defined. The Secretary of States statutory statement is very largely concerned with the habitual residence test (introduced into social security legislation in 1994). It had the legitimate purpose of discouraging benefit tourism. The statement (para 16) indicates that the decision of the House of Lords in Chief Adjudication Officer v Wolke [1997] 1 WLR 1640 was perceived as creating a major difficulty in relation to economically inactive EU nationals. That is the introduction to the explanation of the new right to reside requirement (para 17 of the statement): The Government believes that it is not unreasonable to expect that, whatever their nationality, people should show that they have a right to reside in the UK before being entitled to benefits funded by the UK taxpayer: indeed, correspondence that I and my Ministerial colleagues have received suggests that the public generally expects this. The proposed regulations are thus intended to fill a gap in measures to safeguard the public purse against exploitation by people with no right to reside here, irrespective of nationality. Their purpose is therefore different from the more limited purpose of the habitual residence test. The appellants printed case (para 93) comments that the paragraph quoted above suggests that the Secretary of State may not have understood the effect of his amendment. I have to say that I think this may be too kind: the Secretary of State and his advisers are unlikely to have misunderstood the effect of the amended regulation 2(2). The reference to people with no right to reside here, irrespective of nationality may be regarded as a disingenuous description of a test which every British national passes automatically, by virtue of section 2 of the Immigration Act 1971, but which non-nationals will not pass unless they come within the special categories in regulation 2(1) (and are not excluded by regulation 2(2): under the amendment regulation 2(2) trumps regulation 2(1) in case of conflict; this particular point was not, I think, explored in argument). The appellant, and anyone else in her position, is caught by regulation 2(2), and no amount of effort on her part to achieve social integration (whatever that means) will change the position (apart possibly from future marriage or naturalisation, which may be academic points so far as the appellant is concerned). In the Court of Appeal Moses LJ (para 25) distinguished this case from R (Bidar) v Ealing London Borough Council [2005] QB 812, where the student applicant had to be not only ordinarily resident but also settled, a status which he could not obtain as a student (since students were not given permission to remain indefinitely). But in my view the two cases are indistinguishable. Other EU nationals were in a different position, but Mr Bidar and all other students in his position were excluded. The same is true of the appellant and others in her position. The fact that other EU nationals may be in a better position is irrelevant, for reasons already noted. It is in the end a fairly short point. In my opinion the provisions of regulation 2(2) are probably aimed at discriminating against economically inactive foreign nationals on the grounds of nationality. Whether or not that was the intention of those who framed them, they have that effect. That can, I think, be simply demonstrated. If the appellant (who is now aged 72) had been a British national who had gone to Latvia 50 years ago, but was in all other respects in the same position that is, had come to England in 2000 with no family, friends or other human or financial resources here she would not be excluded, and the only reason for that difference is her nationality. That difference of treatment is something to which the appellants nationality was central, intrinsic or (in the sense in which Advocate General Jacobs used it in Schnorbus) direct. Even though classified as indirect discrimination, it is not capable of justification because the proposed justification, once examined, is founded on nationality. In my view the third issue, raising the Irish element, does not arise. But I am in full agreement with what Lord Hope says on that aspect of the matter. There was a good deal of discussion about Trojani [2004] ECR I-7573, and in particular some general remarks made in the opinion of Advocate General Geelhoed. It raises some difficult and interesting issues but I do not think it would be appropriate for me, in a dissenting judgment, to say more about them. For my part I would allow this appeal. Since I differ from the majority only on the issue of justification, which is for the domestic court, a reference to the Court of Justice would not be appropriate. This is a difficult case. It is difficult not only because of the mind-numbing complexity of the words used by the legislators but also because of the inherent complexity of the concepts developed in the pursuit of equal treatment. As Lord Walker commented in the course of the argument in this case, the wording of regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) is so obscure that it looks as if it is trying to cover something up. As Lord Walker has also commented, extra-judicially, Why does the topic of discrimination get so abstract and complicated as soon as it gets into the hands of the lawyers?. . . Why cannot the topic be left to the intuitive decency and common sense of the right- thinking citizen? The answer, he suggests, is that intuition and common sense are sufficient in clear cases, but cannot by themselves provide the answer in marginal cases (Treating like cases alike and unlike cases differently: Some problems of anti-discrimination law, Victoria University, Wellington, New Zealand, 2 September 2010, pp 2-3). Another answer, I would suggest, is that the concepts of direct and indirect discrimination, justification and proportionality, become altogether more difficult to apply the greater the number of prohibited grounds of discrimination and the wider the circumstances in which discrimination is prohibited. We are concerned with a rather different prohibition of discrimination from the more familiar domestic provisions, now contained in the Equality Act 2010, which aim to prohibit discrimination in the supply of employment, goods, services and the like on the grounds of protected characteristics such as race, sex or religion. Its foundation rests in article 12 of the EC Treaty: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. This is not a general prohibition of discrimination on grounds of nationality. Only the nationals of Member States are protected. Discrimination against third country nationals is not prohibited. Indeed it is positively expected. The underlying purpose is to promote the objects of the Union and in particular the free movement of workers between the Member States and the free establishment of businesses within them. The special provision made in Council Regulation (EEC) No 1408/71 is article 3.1. This requires that: Subject to the special provisions of this Regulation, persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State. Under article 2 of Regulation 1408/71, the persons covered by the Regulation must, among other things, be nationals of one of the Member States (or stateless persons or refugees residing within the territory of one of the Member States) or members of their families or their survivors. Once again, therefore, this is not a general requirement of equal treatment irrespective of nationality. It is there principally to protect the nationals of Member States. Moreover, on the face of it, there is no breach of article 3.1 in the United Kingdoms State Pension Credit Regulations 2002. Nationals of other Member States are subject to the same obligations and enjoy the same benefits under those Regulations as do the nationals of the United Kingdom. The question, however, is whether the rules under which they do so discriminate against them in a way which is prohibited by article 12 of the Treaty. The European jurisprudence on the interpretation of article 12 is not as clear cut as is the jurisprudence on sex discrimination. Thus, for example, it tends to talk about overt and covert discrimination rather than direct and indirect and the concepts may not be precisely equivalent. Also, there is no emphatic statement that direct discrimination can never be justified. Commissioner Rowland referred, at para 16 of his decision in this case, to Martinez Sala v Freistaat Bayern (Case C-85/96) [1998] ECR I-2691, at para 64: Since the unequal treatment in question thus comes within the scope of the Treaty, it cannot be considered to be justified: it is discrimination directly based on the appellants nationality and, in any event, nothing to justify such unequal treatment has been put before the Court. Commissioner Rowland commented that this certainly shows that the Court did not exclude the possibility that direct discrimination might in certain circumstances be justified, although he was inclined to agree that the paragraph was equivocal in that regard. I mention these considerations only to suggest that we may here be dealing with a rather more flexible concept, designed for a particular purpose within the law of the European Union, than with the more familiar concepts in our domestic anti-discrimination law, based though they are upon European Union law, but with the rather different purpose of securing equality of treatment by suppliers irrespective of personal characteristics which are deemed immaterial to the transaction. But with that small caveat, I agree that the questions are (i) whether there is here direct or indirect discrimination against nationals of other Member States; and (ii) whether any such discrimination is justified. I have nothing to add to what Lord Hope has said on the Irish question. The difference between direct and indirect discrimination assumes great importance if it controls what, if any, justification may be possible. (In this respect, European Union and domestic anti-discrimination law is different from the European Convention on Human Rights, which does not draw this sharp distinction.) Yet it is by no means a straightforward question. Lord Walker has drawn attention to the opinions of Advocate General Jacobs in Schnorbus v Land Hessen (Case C-79/99) [2001] 1 CMLR 1025 and Advocate General Sharpston in Bressol v Gouvernement de la Communaut Franaise (Case C-73/08) [2010] 3 CMLR 559, ostensibly applying the same test but doing so in a rather different way. At para AG52 of Bressol, Advocate General Sharpston quoted Advocate General Jacobs statement at para A33 of Schnorbus: The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex or necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than the other is in fact affected. The complaint in Schnorbus was that candidates who had completed their national service were given priority over other candidates in admission to the second stage of legal training but only men were eligible for national service. Advocate General Jacobs took the view that this was indirect discrimination: eligibility for national service was a legal requirement rather than one, such as pregnancy, based on a physical characteristic which is indissociable from sex. He went on to opine that the discrimination was justified. The Court agreed with him on both points. Yet this distinction between legal requirements and physical characteristics might come as something of a surprise, for example, to readers of James v Eastleigh Borough Council [1990] 2 AC 751, where the discrimination between male and female swimmers was linked to a legal requirement, the statutory retirement age, which was indissociable from sex. But at least in Schnorbus, as in James, there was an exact coincidence between the requirement and the sex of those whom it advantaged or disadvantaged as the case might be: in Schnorbus all men were advantaged and all women were disadvantaged; in James all men were disadvantaged and all women were advantaged. In Bressol Advocate General Sharpston took up the notion of a difference in treatment necessarily linked to a characteristic indisssociable from in her case nationality and formulated it thus, at para AG56: I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. But she went on to opine that this test was fulfilled when there was no exact congruence between those advantaged and those disadvantaged by the requirement in question. Thus she held it direct discrimination on grounds of nationality when both Belgians and other nationals might fulfil the requirement of a right to remain permanently in Belgium, but only Belgians could do so automatically. This may be an attractive approach: it is, of course, the exact equivalent of the situation in this case. But it is certainly a development of the principle established in Schnorbus. It suggests that there can be direct discrimination even when some members of the disadvantaged group do fulfil the requirement in question even though others do not. The equivalent in Schnorbus would have been if all men were eligible to do national service but only some women were eligible to do so. At all events, it seems clear that the Grand Chamber in Bressol did not accept the Advocate Generals opinion on this point. The Court expressly stated, at para 47, that this was indirect discrimination on the ground of nationality, which was prohibited unless it was objectively justified. The Court then went on to discuss what might amount to objective justification in that case. The Court must therefore have rejected the Advocate Generals view that this amounted to direct discrimination. It follows, in my view, that we too should regard this case as a case of indirect, rather than direct, discrimination. No-one doubts that it is indirect. There have been many subtly different formulations of the test for indirect discrimination (Monaghan, for example, Equality Law, Oxford University Press, 2007, identifies four): but in essence it is the application of a criterion which is applied equally both to nationals and to non- nationals but which in fact places non-nationals at a particular disadvantage when compared with nationals. The right to reside criterion obviously places non- nationals at a particular disadvantage when compared with nationals and has in fact placed Ms Patmalniece at that disadvantage. Justification The Grand Chamber stated the test thus in R (Bidar) v Ealing London Borough Council (Case C-209/03) [2005] QB 812, para 54: Such a difference in treatment can be justified only if it is based on objective considerations independent of the nationality of the persons concerned and is proportionate to the legitimate aim of the national provisions. This is a rather less precise way of putting the test than the way in which it is put in other contexts. The other formulations, for example in the Burden of Proof Directive (Council Directive 97/80/EC) or the Framework Directive on Equal Treatment (Council Directive 2000/78/EC), all make it clear that it is the provision, criterion or practice which has to be justified as a proportionate means of achieving a legitimate aim, ex hypothesi for reasons which are independent of the protected characteristic involved. Although the concept of justification under article 12 has not been articulated in precisely this way, perhaps because it has not in itself been the subject of a Directive, it seems unlikely that the Court of Justice would approach it any differently. The approach in the Directives mentioned is the product of its own jurisprudence. If that is so, then it is the criterion of a right to reside which has to be objectively justified by considerations other than the nationality of those involved because it is that criterion which leads to the difference of treatment complained about. There is no doubt about the broad aim which it is sought to pursue. This is to protect the public purse, or more precisely, those who pay taxes in the United Kingdom, from the burden of relieving the poverty of everyone who is here, irrespective of the reasons why they are here. When the welfare state was first established, this was not seen as a problem. Everyone who was here could claim social assistance, in the shape of health and social services and also means-tested financial benefits. But the state progressively withdrew that support. That may be an explanation for the peculiar drafting technique of granting benefits to people in Great Britain and then defining the people who are, and are not, to be treated as in Great Britain for this purpose. The general aim is to identify those who are, or rather those who are not, considered deserving of income-related, that is, means- tested benefits. The Regulations contain two separate requirements, with two rather different aims. The requirement of habitual residence has been there since 1994 to combat benefit tourism, people coming here with a view to claiming benefits, rather than with a view to working or establishing themselves in business or a profession here. Thus certain categories of people who come here for other reasons are entitled to make claims even though they are not habitually resident here: these include people from other Member States who are workers or realistically looking for work, or have been workers but for a variety of reasons are so no longer, or people who have moved here to set up in self-employment, and members of the families of each of these, as well as people who have been granted refugee status here. Other people, including UK nationals, have to show that they are habitually resident here. However, as the Government said in its response to the Report of the Social Security Advisory Committee, which preceded the introduction of the right to reside test, the habitual residence test cannot and was never intended to restrict longer-term access to the income-related benefits payable out of general taxation among people who, for various reasons, may decide to live indefinitely in the UK without being economically active (2004, Cmnd 6181, para 14). The right to reside test was introduced expressly for that purpose. It is necessary to look at these aims in the context of what Regulation 1408/71 is trying to achieve. As its recitals show, it is principally designed to co- ordinate national social security legislation in order to promote freedom of movement for employed and self-employed persons, while recognising that there are differences between the social security systems of the Member States. It caters for three different kinds of benefit in three different ways. At the top are those benefits described in article 4.1 as branches of social security. Many of these are based upon contributory social insurance schemes but some are not. Their main distinguishing feature is that they are paid as of right. They are not designed to top up the income of people whose individual means of support fall short of the nationally set subsistence level. Workers who move from one country to another must be allowed to participate in these social security schemes in the same way as workers in the host country. Further, if they have accrued certain benefits, including old age pensions, in one country, article 10 requires that they cannot be denied these simply because they have moved to live in another country. Thus Ms Patmalniece is entitled to have the Latvian authorities pay her her Latvian pension here. At the bottom are social and medical assistance [and] benefit schemes for victims of war or its consequences. Article 4.4 provides that these are excluded from the Regulation altogether. Social assistance used to encompass the kinds of income-related benefits with which we are here concerned. But now it appears to be limited to benefits in kind social and medical services along with discretionary cash benefits such as the grants and loans which are made by the United Kingdoms social fund. In the middle are the special non-contributory cash benefits, financed out of general taxation to guarantee a minimum subsistence level or to cater for disabled people, and specifically listed in Annex IIa to the Regulation. State pension credit is one of these. So too are income-based jobseekers allowance, income support, and disability living allowance (mobility component). Under article 10a, these are excluded from article 10 and are payable exclusively in the territory of the Member State in which they reside and under the legislation of that State. The question is whether it is legitimate to limit these benefits, entitlement to which under the Regulation depends upon the Member State in which the claimant resides, to people who are entitled to reside in that Member State. In answering that question, it is logical to look at the European law on the right to reside. If nationals of one Member State have the right to move to reside in another Member State under European Union law, it is logical to require that they also have the right to claim these special non-contributory cash benefits there in other words that the State in which they reside should be responsible for ensuring that they have the minimum means of subsistence to enable them to live there. But if they do not have the right under European Union law to move to reside there, then it is logical that that State should not have the responsibility for ensuring their minimum level of subsistence. That is why the Court of Appeal in this case, as in the earlier cases of Abdirahman v Secretary of State for Work and Pensions [2007] EWCA Civ 657, [2008] 1 WLR 254, and Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA 1310, [2009] PTSR 897, focussed on article 18.1 of the Treaty, coupled with Directive 90/364/EEC (since replaced by Directive 2004/38/EC), which restrict the right to reside (for people who do not have it under other provisions) to those who have sufficient resources to avoid becoming a burden on the social assistance system of the host member state during their period of residence. As the Grand Chamber held in Trojani v Centre Public dAide Sociale de Bruxelles (Case C-456/02) [2004] 3 CMLR 820, a non-national citizen of the Union, applying for a benefit because of lack of resources, did not derive a right to reside from article 18 of the Treaty, because that very lack of resources took him outside the terms of Directive 90/364/EEC. However, that is not the end of the story. The Secretary of State understandably places weight on the observation of Advocate General Geelhoed, at para AG70 of Trojani: The basic principle of Community law is that persons who depend upon social assistance will be taken care of in their own Member State. But the Court, having held that a person such as Mr Trojani did not derive a right to reside from European Union law, went on to say that a citizen of the Union who had been lawfully resident in the host Member State for a certain time or possessed a residence permit, and satisfied the conditions required of nationals of that Member State, could not be denied such benefits. He was entitled, during his lawful residence in the host Member State, to benefit from the fundamental principle of equal treatment in article 12. I take that to mean that, even where a national of another Member State does not have the right to reside in the host country under European Union law, if he has the right to reside under the national law of the host country, he is also entitled to claim these benefits on the same terms as nationals of the host country. I do not find anything in Trojani to suggest that mere presence, without any right to reside in the host country, is sufficient. All the emphasis in the relevant paragraphs 40 to 45 is on residence and not presence and moreover on formally approved residence. The Courts answer to the question posed concludes, at para 46: However, once it is ascertained that a person in a situation such as that of the claimant in the main proceedings is in possession of a residence permit, he may rely on article 12 EC in order to be granted a social assistance benefit such as the minimex. This is a fairly clear indication that it is open to Member States to make entitlement to such benefits dependent on the right to reside in the host country, even though, of necessity, such a right will be enjoyed by all nationals but only some non-nationals. The AIRE Centre intervene in support of the appellant, essentially to argue that the correct mechanism to protect the public purse against non-economically active claimants from other European Union countries is, not to deny those who are lawfully present the basic means of subsistence, but to remove those who have no right to remain here: in other words, compulsorily to expel them rather than to starve them out. The Court in Trojani pointed out at paragraph 45 that: it remains open to the host Member State to take the view that a national of another Member State who has recourse to social assistance no longer fulfils the conditions of his right of residence. In such a case the host Member State may, within the limits imposed by Community law, take a measure to remove him. However, recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure. Once again, the emphasis is on the right to reside. I do not find there any suggestion that it is not open to the host Member State to make entitlement to such benefits conditional upon that right. For that reason, and in agreement with Lord Hope, I would dismiss this appeal. For the reasons given by Lord Hope and by Lady Hale, with which I fully agree, I too would dismiss this appeal. For the reasons given by Lord Hope and by Lady Hale, with which I fully agree, I too would dismiss this appeal.

The issue in this appeal is whether the conditions of entitlement to State Pension Credit (SPC) are compatible with a rule of EU law which prohibits discrimination between nationals of different Member States. State Pension Credit is a means tested non contributory benefit. Section 1(2)(a) of the State Pension Credit Act 2002 provides that a claimant is entitled to SPC if he or she is in Great Britain. The State Pension Credit Regulations 2002 (the Regulations) provide when someone is or is not to be treated as being in Great Britain. This is not just a matter of where the person is. In outline, a person is treated as not in Great Britain if he or she is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland (the Common Travel Area). And no person is to be treated as habitually resident in the Common Travel Area if that person does not have a right to reside in the Common Travel Area. (Cumulatively, these are the conditions.) Regulation 1408/71 (EC) (the EU Regulation) provided for the application of social security schemes to employed persons and their families moving within the European Community. (It has now been replaced by other EU legislation.) The Regulation applies to SPC. One of the categories of person to which it applies is employed person. This includes EU nationals who have retired from employment but who remain insured by the social security system of a Member State because of contributions paid during their working life. The dispute in this case relates to the effect of Regulation 3. It provides that persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as nationals of that State. This prohibits both direct discrimination (in broad terms, where people are treated differently because of their nationality) and indirect discrimination (broadly, where an apparently neutral test is applied to nationals and non nationals and places non nationals at a particular disadvantage). Mrs Patmalniece is Latvian pensioner, now 72 years of age and in receipt of a Latvian retirement pension. She came to the UK in June 2000. Her asylum claim was unsuccessful, but she was not removed from the UK. She has never worked in the UK. Latvia joined the EU on 1 May 2004. In August 2005, Mrs Patmalniece claimed SPC. But her claim was refused on the ground that she was not in Great Britain because she did not have a right to reside in the UK. She appealed against the refusal of SPC, arguing that the requirement that she have a right to reside in the UK was directly discriminatory on the grounds of her nationality, in breach of Regulation 3 of the EU Regulation. The Social Security Appeal Tribunal allowed her appeal. However, the Social Security Commissioner allowed the Secretary of States appeal and held the conditions to be indirectly discriminatory but justified. The Court of Appeal upheld that decision. Mrs Patmalniece appealed to the Supreme Court. The Supreme Court, by a majority, dismisses the appeal. It holds unanimously that the conditions are indirectly discriminatory. But the majority (Lord Walker dissenting) hold that this discrimination is justified because the Regulations are a proportionate response to the legitimate aim of protecting the UK public purse and that this justification is independent of the claimants nationality. The court also holds unanimously that the different treatment afforded to Irish nationals is protected by the Protocol on the Common Travel Area. Lord Hope gives the main judgment, with which Lord Rodger agrees. Lady Hale gives a separate judgment. Lord Brown agrees with both Lord Hopes and Lady Hales judgments. Lord Walker gives a dissenting judgment. The court considers three issues: (1) do the conditions of entitlement for SPC give rise to direct discrimination? (2) If they give rise only to indirect discrimination, is that discrimination justified? (3) Is that conclusion undermined by the favourable treatment that the Regulation gives to Irish nationals? Direct/indirect discrimination All UK nationals would automatically satisfy the right to reside element of the test, whereas nationals of other Member States would not automatically do so. However, UK nationals still had to satisfy the requirement of habitual residence. The result is that the in Great Britain test would be satisfied by some, but not all, UK nationals, and some, but not all, nationals of other Member States. It was more likely to be satisfied by UK nationals than nationals of other member states: [25] [28]. The court applies the decision of the Grand Chamber of the European Court of Justice in Bressol v Gouvernement de la Communaut Franaise (Case C 73/08). In Bressol the ECJ had considered a Belgian law which set down eligibility criteria to study in Belgium which were similarly structured to the entitlement conditions for SPC. Although Advocate General Sharpston in Bressol had proposed that the ECJ treat the provisions of the Belgian law as directly discriminatory on the grounds of nationality, the ECJ did not follow her approach. Although the reasons for the ECJs position were not fully explained in its judgment, the court has decided that it should follow its conclusion and hold that the entitlement conditions for SPC were only indirectly discriminatory: [30] [35], [73], [89] [92]. Justification A difference in treatment which amounts to indirect discrimination can be justified only if it is based on objective considerations independent of the nationality of the persons concerned and is proportionate to a legitimate aim: [36], [94]. The parties were agreed that the measures here were proportionate. The issues were whether the conditions pursued a legitimate aim and whether it was independent of the nationality of the persons affected. The majority holds that both tests are satisfied. The aim was to ensure that claimants were economically or socially integrated in the UK, or elsewhere in the Common Travel Area, thereby protecting the social security system against the risk of benefit or social tourism: [38], [46], [51] [52], [96] This justification was independent of nationality. Lady Hale notes, additionally, that the Governments aims in introducing the right to reside test were consistent with the aims of Regulation 1408/72 and that it is logical that if a person does not have a right under EU law to reside in a particular state, that state should not have the responsibility under EU law for ensuring their minimum level of subsistence: [103]. Lord Walker dissents on the issue of justification. He would have held that the provisions were probably aimed at discriminating against economically inactive foreign nationals on the grounds of their nationality: [79]. The relevance of the treatment of Irish nationals The Appellant argued that, as entitlement to SPC was extended to Irish nationals, it was discriminatory not to extend it to nationals of other Member States. The court rejects that argument. The provision for Irish nationals in the conditions is protected by Article 2 of the Protocol on the Common Travel Area, which provides that the UK and Ireland may continue to make arrangements between themselves relating to the movement of persons between their territories: [54] [60], [80].

The Leasehold Reform Act 1967 is on its face a statute about houses, not commercial buildings. The buildings with which we are concerned were originally designed and used as houses, but at the relevant date were used entirely for commercial purposes, one for offices, the other (in the judges words) as a self catering hotel. In both cases the courts below felt constrained to hold that they were houses within the meaning of the 1967 Act, with the consequence that the lessees were entitled to enfranchise, that is, to acquire the freeholds compulsorily from their lessors on the terms fixed by the Act. In the Court of Appeal [2010] EWCA Civ 748; [2010] 1 WLR 2317 Lord Neuberger of Abbotsbury MR regretted this result. He saw it as the probably unintended consequence of amendments made by the Commonhold and Leasehold Reform Act 2002, removing the previous residence requirements. However, he felt bound to apply his view of the relevant provisions as they stood after those amendments, rather than to decide what the legislature would have said if it had fully appreciated the consequences (para 57). From the material we have been shown, he was clearly right to think that his interpretation did not reflect Parliaments intentions. The thinking behind the 2002 legislation is apparent from the preceding Draft Bill and Consultation Paper Commonhold and Leasehold Reform (Cm 4843), published by the Lord Chancellor in 2000. It included proposals for the introduction of an entirely new form of tenure, known as Commonhold, and for amendment of the existing provisions relating to leases of flats (under the Leasehold Reform, Housing and Urban Development Act 1993) and of houses (under the 1967 Act). The first paragraph of the Introduction leaves no doubt that its purpose was to address perceived flaws in the residential leasehold system (p 107), not in the leasehold system more generally. In relation to flats, the governments view was that the residence tests under the 1993 Act were too restrictive, for example, in excluding someone subletting a flat, or occupying a flat as a second home. The residence requirement would therefore be abolished; but, to restrict the scope for short term speculative gains, it would be replaced by a rule requiring the qualifying tenant to have held the lease for at least two years (pp 155 6). A similar approach was proposed for leases of houses under the 1967 Act: This would bring the residence test for houses in line with the proposals for flats. It would allow long leaseholders of second homes to benefit and would also enable leaseholders who lease houses through a company to enfranchise. Furthermore, as in the case of flats, it would restrict the scope for short term speculative gains (p 189). There is no evidence then or thereafter of any ministerial or parliamentary intention to extend the scope of the Act more generally, or in particular to confer statutory rights on lessees of buildings used for purely non residential purposes. Although the 1967 Act like the 1993 Act is in a sense expropriatory, in that it confers rights on lessees to acquire rights compulsorily from their lessors, this has been held not to give rise to any interpretative presumption in favour of the latter. As Millett LJ said of the 1993 Act: It would, in my opinion, be wrong to disregard the fact that, while the Act may to some extent be regarded as expropriatory of the landlord's interest, nevertheless it was passed for the benefit of tenants. It is the duty of the court to construe the 1993 Act fairly and with a view, if possible, to making it effective to confer on tenants those advantages which Parliament must have intended them to enjoy. (Cadogan v McGirk [1996] 4 All ER 643, 648) By the same token, the court should avoid as far as possible an interpretation which has the effect of conferring rights going beyond those which Parliament intended. Statutory definition Section 2(1) defines house in the following terms: 'house' includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; and (a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate 'houses', though the building as a whole may be; and (b) where a building is divided vertically the building as a whole is not a 'house' though any of the units into which it is divided may be. In the present cases, nothing turns directly on the qualifications introduced by the word notwithstanding (which I shall refer to as the proviso). We are concerned with the main part of the definition, which raises two separate but overlapping questions: (i) is the building one designed or adapted for living in? (ii) is it a house reasonably so called? Both questions remain live in Hosebay; in Lexgorge the first has been conceded in favour of the lessees. The two parts of the definition are in a sense belt and braces: complementary and overlapping, but both needing to be satisfied. The first looks to the identity or function of the building based on its physical characteristics. The second ties the definition to the primary meaning of house as a single residence, as opposed to say a hostel or a block of flats; but that in turn is qualified by the specific provision relating to houses divided horizontally. Both parts need to be read in the context of a statute which is about houses as places to live in, not about houses as pieces of architecture, or features in a street scene, or names in an address book. The facts The first case (Hosebay) concerns three properties, 29, 31, and 39 Rosary Gardens, South Kensington, London SW7. They were originally built as separate houses as part of a late Victorian terrace forming the west side of Rosary Gardens. The current leases of Nos 29 and 39 were granted in 1966 for terms expiring in December 2020, subject to covenants for their use as 16 high class self contained private residential flatlets. The current lease for No 31 was granted in 1971 for a term expiring in December 2030, subject to a covenant restricting its use to that of a single family residence or a high class furnished property for accommodating not more than 20 persons. It was common ground that the current use, which had begun some time before 1981, was not in accordance with the covenants. It was unclear from the evidence when the premises had been converted to their present layout. The judge (para 83) proceeded on the basis that the conversions may well have been carried out substantially before the current leases were granted in 1966 and 1971. Although there was no evidence as to the actual purpose of the conversions, the Master of the Rolls on the balance of probabilities inferred (principally from the lack of documentation in the hands of the landlords to indicate otherwise) that they had been for the uses described in the leases (para 37). Hosebay Ltd acquired all three leases in 1996. On 23 April 2007 it served notices on its landlords under section 8 of the 1967 Act to acquire the freeholds of the three properties. Judge Marshall QC found that the three properties were at the relevant date being used together to provide short term accommodation for tourists and other visitors to London, or what she described as a self catering hotel (paras 8 and 19). Each of the three properties had been fully adapted to provide individual rooms for letting out (para 9), with the exception of two rooms in No 31, one of which was used for office and reception purposes, and the other for storage. The great majority of the rooms could be described as rooms with self catering facilities. Each room had between one and four beds, furniture, and limited storage space, cooking facilities, and small wet rooms with shower, basin and WC. Fresh bed linen and room cleaning, but no other services, were provided to those staying in the rooms. On these facts, the judge concluded that each of the three properties was physically adapted for living in even though the current use was itself too transient to qualify as such. The Court of Appeal agreed. I quote the Master of the Rolls: 33. My primary reason for that conclusion is that, in order to determine whether premises are adapted for living in, one looks at the most recent works of adaptation, and assesses objectively, whether they resulted in the property being adapted for living in 36. In this case, I consider that the effect of the most recent works of conversion to the three properties, if they were works of adaptation, adapted those properties for living in. Ignoring one or two rooms, each room in the three properties is a self contained unit of accommodation, with its own basic small shower room/WC, and its own even smaller and more basic cooking facilities. As Moore Bick LJ pointed out in argument, the rooms are entirely appropriate for letting to students on three year degree courses, and, as Mr Johnson rightly accepted, if they had been, all the rooms, and therefore the three buildings, would have been used for living in. Even if, as Mr Johnson argued and I am prepared to assume without deciding, the current use of the three properties is not for living in, that certainly does not mean that, viewed objectively, the three properties were not adapted for living in. The judge and the Court of Appeal held also that the properties were houses reasonably so called, as the Master of the Rolls explained: externally, each of the three properties has the appearance of being a relatively large town house; internally, each of the three properties has been converted so that almost every room can be used as a self contained unit for one or more individuals, with cooking and toilet facilities. I find it hard to see how the judge could be faulted for concluding that, even if each of the three properties might be called something else as well, they could each reasonably be called a house. (para 38) The other case (Lexgorge) relates to 48 Queen Anne Street, in Marylebone, London W1. It was built in the early 18th century as a house comprising five floors including basement, in a terrace of substantial houses. It was occupied for that purpose for many years until 1888, when it began to be used for commercial purposes. Coming to more recent times, planning permission was granted in December 1949 for conversion of the second and third floors into a self contained maisonette, and there is some evidence that it was implemented. However, from about 1961, all four upper floors were used as offices, and they were so used when the notice was served under the Act on 4 March 2005. The whole building was still in office use in June 2005. However, by the time of the trial in October 2009, when the judge inspected the property, the upper two floors were in use for residential purposes. The office use of the lower floors continued. The current lease was granted in 1951 for a term of 110 years. The lease described the property as a messuage or residential and professional premises, and restricted its use (subject to landlords' consent) to self contained flats or maisonettes on the upper two floors, professional offices on the first and ground floors, and in the basement storage and lavatory in connection with other parts of the demised premises. In 1978, the lease was acquired by Lexgorge Ltd. At the time of the notice the office use of all floors had become established, and therefore lawful for planning purposes, although in breach of the lease as respects the upper floors. The building is listed as a building of special architectural or historic interest (grade 2); English Heritages records describe it as a Terraced House. In this case, as already noted, it is conceded by the lessors that at the material date the premises, although used for offices, were still at least in part designed or adapted for living in. It was held by the judge (Judge Dight) and by the Court of Appeal that it was a house reasonably so called, and therefore within the definition. The Master of the Rolls said: 53. If the upper two floors of the property had been empty, I have little doubt but that the property could reasonably have been called a house, bearing in mind its external character and appearance (a classic town house in London's West End), its internal character and appearance at least on the upper two floors (which were, as I understand it, substantially as constructed), the description of the property in the lease as messuage or residential or professional premises, and, to the extent that it is relevant, the terms of the lease (restricting the use of the upper two floors to residential). I find it hard to see why the fact that the upper two floors had been used (even for many years) as offices (in contravention of the terms of the lease) should wreak such a change that the property could no longer reasonably be called a house. The authorities The first relevant case under the Act was Lake v Bennett [1970] 1 QB 663. However, I find it helpful to start from an authority in a different statutory context, Lord Denning MRs judgment in Ashbridge Investments Ltd v Minister of Housing and Local Government [1965] 1 WLR 1320. The case related to compulsory acquisition of two properties for the purpose of slum clearance under the Housing Acts. The level of compensation would vary significantly depending on whether the property was or was not a house. In the absence of a statutory definition of house, Lord Denning adopted the following formula: a building which is constructed or adapted for use as, or for the purposes of, a dwelling (p 1324). In Lake v Bennett he suggested that the draftsman of the 1967 Act definition had adopted these words, but added the limitation reasonably so called (p 670). Ashbridge itself concerned two adjoining buildings in the same terrace, which had been designated for compulsory purchase, the first (No 17) as an unfit house, the second (No 19) as a building other than a house. The buildings were very similar in appearance; both had been designed as shops with rear living rooms and living quarters above, but neither was in current use for living purposes. No 17, which had undergone no structural alterations, was held by the Minister to have retained its identity as a dwelling. No 19, by contrast, was held to have lost its identity as a dwelling, following structural alterations involving the extension of the shop into the rear living area (p 1325). The latter decision was described in the Court of Appeal as extraordinary (p 1327, per Harman LJ), but that did not undermine the validity of the decision in relation to No 17. Lord Dennings formula can be seen as his way of expressing the present identity (in the inspectors words), or perhaps function, of a building not currently in use, defined by reference to the purpose of its construction or subsequent adaptation. Lake v Bennett itself concerned a three storey house, the ground floor of which had been converted into a shop. There was no issue as to the first part of the definition, as it was clear that the building was at least in part adapted for use for living in. The Court of Appeal held that notwithstanding the commercial element, the building as a whole was a house reasonably so called and was therefore within the scope of the 1967 Act. The reasoning of Lake v Bennett was adopted and extended by the House of Lords in Tandon v Trustees of Spurgeons Homes [1982] AC 755, which remains the leading House of Lords authority on this part of the definition. Unfortunately the reasoning of the single majority speech of Lord Roskill, although carrying the unqualified support of Lord Scarman and Lord Bridge, is not without difficulty. Further, the case needs to be read in its factual context. As in Lake v Bennett, the main problem was to reconcile the statutory recognition (under the proviso) that the building need not be solely designed or adapted for living in, with the need for the building as a whole to be a house reasonably so called. This is not a problem in the present cases. At the end of his judgment Lord Roskill referred with approval to Lake v Bennett, which he welcomed as stating a principle and [confining] the question of fact to a narrow area , and from which he deduced the following three propositions of law : (1) as long as a building of mixed use can reasonably be called a house, it is within the statutory meaning of house, even though it may also reasonably be called something else; (2) it is a question of law whether it is reasonable to call a building a house; (3) if the building is designed or adapted for living in, by which, as is plain from section 1(1) of the Act of 1967, is meant designed or adapted for occupation as a residence, only exceptional circumstances, which I find it hard to envisage, would justify a judge in holding that it could not reasonably be called a house. They would have to be such that nobody could reasonably call the building a house. (p 767) Although expressed as propositions of law, they do not in my view offer much assistance as such, at least beyond the facts of the case. The first proposition was in terms directed to a building in mixed residential and commercial use. Such a building could plausibly be described either as a house with a shop below, or as a shop with a dwelling above. That was enough to show that it could reasonably be called a house. That proposition cannot in my view be applied more generally. The mere fact that a building may be described as a house for other purposes (for example, in the English Heritage list) is not enough to bring it within this part of the definition. The second proposition, that what is a house reasonably so called is a question of law, is not easy to extract from the judgments in Lake v Bennett. Lord Denning described the judges negative answer to that question as an inference from primary facts depending in part at least on the true interpretation of the words reasonably so called, and one with which the court could interfere if it was a conclusion to which the judge could not reasonably come ([1970] 1 QB 663, 671). Salmon LJ described it as partly a question of fact but also a question of law as to the true construction of the meaning of the word house in this Act. (p 672). Elsewhere Lord Roskill himself had accepted counsels submission that the definition of house was a mixed question of fact and law ([1982] AC 755, 765), but he saw it as one in which, in the interests of consistency, the question of fact should be confined within narrow limits: p 767. More modern authorities have leant against such conceptual debates (see, for example, Lord Hoffmann, in Moyna v Secretary of State for Work and Pensions [2003] UKHL 44, [2003] 1 WLR 1929, paras 25 27). In any event, none of these formulations throws much light on how the question should be answered in any particular case. The third proposition is again in terms hard to extract from Lake v Bennett. Lord Denning described the case before them as a typical case, but thought that difficult issues might arise in other cases: [1970] 1 QB 663, 671. He did not suggest that, in such cases, an affirmative answer to the first question would lead to any presumption in respect of the second. The examples given in the judgments (pp 671, 672) of cases that would not satisfy the second test a block of flats, the Ritz Hotel or Rowton House (a working mens hostel) can hardly be described as exceptional. Rather than a free standing proposition of law, deduced from Lake v Bennett, this proposition seems more an expression of Lord Roskills own view as to the correct policy approach to a building of the kind before him, which was adapted at least in part for occupation as a residence. It may be that the real difference between the majority and the minority in Tandon came down to one of policy. Lord Wilberforce (in the minority) thought it clear that the building could not reasonably be called a house; it was rather a mixed unit consisting in part of a shop and in part of a dwelling, and as such was not within the policy of the Act: [1982] AC 755, 760. For Lord Roskill (in the majority) Parliament had made clear that such mixed units were not in principle to be excluded. He noted that such small shops combined with living accommodation were a familiar feature of towns and villages across the country (p 766). In this he echoed the view of Salmon LJ (Lake v Bennett [1970] 1 QB 663, 672), who thought that a tenant living above a shop in the circumstances of that case was obviously the sort of person to whom the legislature intended to give security of tenure. Such policy considerations do not assist the lessees in this case. For the reasons already given, policy if anything points the other way. Of more significance for present purposes is the relative lack of weight given by the majority to the appearance of the buildings as a factor in answering the second question. Lord Fraser of Tullybelton (in the minority) had regarded appearance as the main element in the character of a building: [1982] AC 755, 762. He attached particular weight to the photograph which showed a shop in a row of shops, in contrast with the converted house in Lake v Bennett; to him it was obvious from the photograph that the building could not reasonably be called a house (p 763). That, however, was not the approach of the majority. Lord Roskill had apparently accepted that in determining the character of the building for these purposes, physical appearance could be relevant, as also its history and the terms of the lease (p 766). However, those factors played no detectable part in the final decision. The determinative points were that the proportion of residential use, even if only 25%, was substantial (p 766), and that a tenant occupying such a building as his residence was within what was perceived to be the scope of the protection intended by Parliament (p 766). Those factors were enough to bring the case within the principle established by Lake v Bennett notwithstanding the differences from that case in relation to the original design and physical appearance of the respective buildings. The only other relevant authority at the highest level is the much more recent decision in Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5; [2008] 1 WLR 289. The House of Lords held that a building previously designed or adapted for living in remained a house, even though at the material time it was not only disused but in parts stripped out to the basic structural shell (para 24). In contrast to Tandon this case was concerned solely with the first question. It was not in dispute that if that question was answered in the affirmative the building qualified as a house reasonably so called. As will be seen I do not regard the case as determinative in either of the present appeals. However, some comment is desirable, in view of the change of view of Lord Neuberger on one aspect of his leading speech. He had proposed the following grammatical analysis of the relevant words of the statutory definition: 18. In my judgment, the words designed or adapted for living in, as a matter of ordinary English, require one first to consider the property as it was initially built: for what purpose was it originally designed? That is the natural meaning of the word designed, which is a past participle. One then goes on to consider whether work has subsequently been done to the property so that the original design has been changed: has it been adapted for another purpose, and if so what purpose? When asking either question, one is ultimately concerned to decide whether the purpose for which the property has been designed or adapted, was for living in. 19. The notion that the word designed in section 2(1) is concerned with the past is reinforced by the later words in the same section was or is [not] solely designed or adapted. The use of the past tense is striking in a section which contains a number of verbs only in the present tense. In my judgment, the expression is to be construed distributively: thus, the word was governs designed, and the word is governs adapted. The present tense is appropriate for adapted because, as Lord Scott of Foscote pointed out in argument, there could have been several successive adaptations, and it is only the most recent which is relevant. The word was is in any event difficult to reconcile with Grosvenor's case (as accepted by the judge and the Court of Appeal), as it would be irrelevant whether the property could have been fit for residential occupation at any time in the past. Later in his speech, he considered the implications of this analysis for other cases, including how the definition should apply to a property which had been designed for living in, but had subsequently been adapted to another use. As a matter of literal language, he thought such a property would be within the definition. If, as appeared, designed and adapted were alternative qualifying requirements, a building which had been designed as a house would remain within the definition in spite of its adaptation to other uses. Such a conclusion, he accepted, might seem surprising, but it could have been more readily understandable when taken with the residence requirement in the original Act (para 26). It was on this latter point that, as Master of the Rolls in the present case, he has had second thoughts. It had been put directly in issue by the tenants in Hosebay, who argued (as they have in this court) that because the buildings were originally designed for living in, that was sufficient to bring them within the definition, regardless of any subsequent adaptation to other uses. On reconsideration, Lord Neuberger felt bound to reject the argument. Although the literalist meaning of designed or adapted was that either alternative would do, that was not by any means what the words naturally convey. His earlier thoughts had been based on an over literalist approach to the language used by the legislature: [2010] 1 WLR 2317, para 31. In his revised view, a building originally designed for living in, but adapted for some other purpose, was not designed or adapted for living in, unless subsequently re adapted for that purpose (para 40). I have no doubt, with respect, that Lord Neubergers second thoughts on this point were correct. Context and common sense argue strongly against a definition turning principally on historic design, if that has long since been superseded by adaptation to some other use. However, that approach may also have implications for the earlier part of his grammatical analysis in Boss Holdings (see para 31 above). The expression was or is designed or adapted is, as he says, to be read distributively: that is, as equivalent to was designed or is adapted. While that may support the view that the word designed is directed to the past, the same cannot be said of the expression is adapted. Nor (pace Lord Scott) is that grammatically the same as was most recently adapted. Logically that expression can only be taken as directed to the present state of the building. Once it is accepted that a literalist approach to the definition is inappropriate, I find myself drawn back to a reading which accords more closely to what I have suggested was in Lord Dennings mind in Ashbridge [1965] 1 WLR 1320, that is a simple way of defining the present identity or function of a building as a house, by reference to its current physical character, whether derived from its original design or from subsequent adaptation. Furthermore, I would not give any special weight in that context to the word adapted. In ordinary language it means no more than made suitable. It is true that the word is applied to the building, rather than its contents, so that a mere change of furniture is not enough. However, the word does not imply any particular degree of structural change. Where a building is in active and settled use for a particular purpose, the likelihood is that it has undergone at least some physical adaptation to make it suitable for that purpose. That in most cases can be taken as the use for which it is currently adapted, and in most cases it will be unnecessary to look further. That interpretation does not of course call into question the actual decision in Boss Holdings. The basis of the decision, as I understand it, was that the upper floors, which had been designed or last adapted for residential purposes, and had not been put to any other use, had not lost their identity as such, merely because at the material time they were disused and dilapidated. It was enough that the building was partially adapted for living in, and it was unnecessary to look beyond that: see [2008] 1 WLR 289, para 25. That reasoning cannot be extended to a building in which the residential use has not merely ceased, but has been wholly replaced by a new, non residential use. Finally I must refer to Prospect Estates Ltd v Grosvenor Estate Belgravia [2008] EWCA Civ 1281; [2009] 1 WLR 1313. The Court of Appeal held that a building which had been designed and built as a house, but which for many years had been used almost wholly as offices, was not a house within the definition. As in Tandon the case turned ultimately only on the second question, whether the building was a house reasonably so called. The facts were much closer to those of the present cases. The leading judgment was given by Mummery LJ. The building had been built in the 1850s as a house for residential occupation, but since 1958 it had been used substantially (88.5% of the floorspace) for office purposes. Under the most recent lease granted in 1972 the use was restricted to offices on all floors, except the top floor which was limited to use as a flat for a director or senior employee of a business occupying the offices below. It was accepted by the lessors that there had been insufficient works of adaptation to conclude that it had ceased to be designed for living in (Mummery LJ, para 9), but they challenged the judges conclusion that it was a house reasonably so called. That had been based, as the overwhelmingly significant factor, on the fact that the building was designed for living in and that its structure and appearance have (largely) remained unchanged (para 8). Mummery LJ held that the judge had given too much weight to those factors, and insufficient weight to the prescriptive terms of the lease, the actual uses of the building and the relative proportions of the mixed use at the relevant date (para 20). Goldring LJ, agreeing, found it impossible to accept that a building can reasonably be called a house although no one can lawfully live in virtually 90% of it (para 23). In the present case, the Master of the Rolls ([2010] 1 WLR 2317, para 43) questioned the weight placed on that case by counsel for the present appellants in Hosebay: There can be no doubt that the external and internal appearance of the properties are highly relevant factors on this issue, and it is clear from the Prospect Estates case [2009] 1 WLR 1313 that, in so far as user is significant, the permitted use under the lease is a relevant factor. In those circumstances, even assuming that actual use is also relevant, I find it hard to see how it can be sensibly said that each of the three properties cannot reasonably [be] called a house. To hold otherwise would involve concluding that the actual user, even where it involved people occupying virtually all the rooms in the building for relaxing, sleeping, cooking and washing, albeit on a short term basis, trumped all the other factors to the extent of disabling the building from being able to be a house . reasonably so called. He also doubted the decisive weight placed by Goldring LJ on the terms of the lease. He thought the thrust of the judgments in Lake v Bennett [1970] 1 QB 663 and the opinion of Lord Roskill in Tandon [1982] AC 755 was that the question was to be determined essentially by reference to [the buildings] external and internal physical character and appearance (para 46). He was not convinced that it would occur to most people, asked whether a building could reasonably be called a house, to ask about the permitted use under any lease, or that they would be influenced if told what the permitted use was (para 47). He suggested that the ratio of Prospect Estates should be treated as being limited to a case where residential use is either prohibited entirely, or restricted to a very small part of the building, and the actual use accords with that (para 49). As will be apparent from my earlier analysis of Tandon, I cannot agree that Lord Roskill regarded external and internal physical character and appearance as the determining factors. I agree with the Master of the Rolls that the terms of the lease as such should not have been treated as the major factor. However, in so far as Mummery LJ treated the use of the building, rather than its physical appearance, as determinative, his approach was in my view entirely consistent with the reasoning of the majority in Tandon as I have explained it. I consider that Prospect Estates [2009] 1 WLR 1313 was rightly decided, and that the ratio need not be limited in the way the Master of the Rolls proposed. The present cases which I can deal with briefly. I would allow the appeal in Hosebay on the grounds that a building which is wholly used as a self catering hotel is not a house reasonably so called within the meaning of this statute. As appears from para 38 of their judgment (quoted above), the contrary view of the Court of Appeal turned on two main points: (i) the external appearance of each property as a town house; (ii) the internal conversion to self contained units, with cooking and toilet facilities. I find it difficult with respect to see the relevance of the second point to this part of the definition, which only arises in relation to a building which is in some sense adapted for living in under the first part. It is not suggested that the building is divided in a way which comes within the proviso. The first point, for the reasons given in my analysis of Tandon, should not have been given determinative weight. The fact that the buildings might look like houses, and might be referred to as houses for some purposes, is not in my view sufficient to displace the fact that their use was entirely commercial. I turn to consider the application of these principles to the present appeals, In these circumstances I find it unnecessary to reach a concluded view on the application of the first part of the definition in this appeal. I agree with the appellants (and the judge) that living in means something more settled than staying in; and that the present use does not qualify as such. There is more room for debate, however, whether the premises are to be taken as adapted solely for such use, to the exclusion of longer term occupation. The Court of Appeal, as I understand it, were influenced not only by the consideration that the rooms might be used (for example) for longer term student occupation, but also that their current layout probably dates from earlier adaptation to the uses described in the leases, which could well be regarded as sufficiently settled to qualify as living in. One of the values of the two part definition is that it becomes unnecessary to resolve such narrow factual issues. In Lexgorge I would also allow the appeal on similar grounds. A building wholly used for offices, whatever its original design or current appearance, is not a house reasonably so called. The fact that it was designed as a house, and is still described as a house for many purposes, including in architectural histories, is beside the point. In this case no issue arises under the first part of the definition. It is unnecessary to consider whether the concession in that respect was rightly made, although it is possible that it was based on a wider interpretation of Boss Holdings [2008] 1 WLR 289 than my own analysis would have supported. In summary, I would allow both appeals, and hold that neither building was on the relevant date a house within the meaning of section 2 of the 1967 Act.

These two joined appeals raise the question of whether a property used wholly for commercial purposes may qualify as a house for the purposes of legislation governing the right to leasehold enfranchisement (i.e. the right of a lessee in certain circumstances compulsorily to acquire the freehold of the building from his/her landlord) [1]. In the Hosebay case, the respondents owned the leases of three buildings in central London which had originally been built as separate houses as part of a late Victorian terrace [10]. The leases restricted the use of the houses to use for residential purposes, but on the date when the respondent served notices on the appellants under s.8 of the Leasehold Reform Act 1967 (the 1967 Act) seeking compulsorily to acquire the freehold of the buildings, they were being used wholly as a self catering hotel [10,13]. In the Lexgorge case, the respondent owned the lease of a five storey building in central London also originally built as a house [16]. The terms of the lease restricted the use of the upper two floors of the building to residential flats [18]. On the date when the respondent served a notice under s.8 of the 1967 Act, the building was used wholly for office purposes [17]. The building was listed as a building of special architectural or historic interest, and English Heritages records described it as a terraced house [18]. The issue in both appeals was whether the properties constituted houses within the meaning of s.2(1) of the 1967 Act. This raised two separate but overlapping questions: (i) Were the buildings designed or adapted for living in? (ii) Were they houses reasonably so called? [8] Both elements of the definition were disputed by the appellants in the Hosebay case, but only second element of the definition was disputed by the appellant in the Lexgorge case [8]. The judge at first instance in each case concluded that the buildings were houses for the purposes the 1967 Act, and the Court of Appeal reluctantly upheld those decisions [1,2]. The Supreme Court unanimously allows both appeals. It holds that neither property constituted a house for the purposes of the 1967 Act on the date when the relevant statutory notice was served. The judgment of the Court is given by Lord Carnwath. The decision of the Court of Appeal was not the result intended by Parliament when, pursuant to the Commonhold and Leasehold Reform Act 2002, it removed the requirements of residence from the 1967 Act [3 5]. As far as possible, an interpretation of the 1967 Act which has the effect of conferring rights on lessees going beyond those which Parliament intended to confer should be avoided [6]. The first element of the definition of house in s.2(1) of the 1967 Act (i.e. designed or adapted for living in) looks to the identity or function of the building based on its physical characteristics, the second element (i.e. a house reasonably so called) ties the definition to the primary meaning of house as a single residence, as opposed to, for example, a hostel or a block of flats [9]. Both parts of the definition need to be read in the context of a statute which is about houses as places to live in, not about houses as pieces of architecture or features in a street scene [9]. As to the first part of the definition of house in s.2(1) of the 1967 Act, the words designed and adapted do not constitute alternative qualifying requirements, despite the literal meaning of the provision [34]. Context and common sense argue strongly against a definition turning principally on historic design, if that has long been superseded by adaptation to some other use [34]. The words is adapted in s.2(1) refer to the present state of the building and do not imply any particular degree of structural change [34,35]. As to the second part of the definition, the external and internal physical appearance of a building should not be treated as determinative of whether it is a house reasonably so called , nor should the terms of the lease be treated as a major factor [41]. The buildings in the Hosebay case were not houses reasonably so called [43]. The fact that they might look like houses and might be referred to as houses for some purposes was not sufficient to displace the fact that their use was entirely commercial [43]. It was unnecessary to decide whether the buildings were designed or adapted for living in [44]. The building in the Lexgorge case was also not a house reasonably so called because it was used wholly for office purposes [45]. The fact that it was designed as a house and is still described as a house for many purposes (such as architectural histories) was beside the point [45].

On 5 October 2010, the appellant, Stuart Whiston, was sentenced to 18 months in prison for robbery. He was entitled to automatic release on licence after serving half his sentence, ie on 5 July 2011. However, on 21 February 2011, he was released on licence under a so called home detention curfew pursuant to section 246 of the Criminal Justice Act 2003. On 7 April 2011, the Secretary of State decided to revoke the licence under section 255 of the 2003 Act, because the appellants whereabouts could no longer be monitored in the community, and he was recalled to prison. The decision of the Secretary of State was not subject to any statutory judicial control or review. The question raised on this appeal is whether a person released from prison on a home detention curfew, and then recalled to prison under section 255 of the 2003 Act, has rights pursuant to article 5(4) of the European Convention of Human Rights. More broadly, the appeal raises the issue of how far it is open to a person who is still serving a sentence imposed by a court to invoke article 5(4). The relevant domestic law All the statutory provisions relevant to this appeal are in the 2003 Act, but, as has been regrettably familiar in the field of criminal law, the provisions have been successively amended or added to by subsequent legislation. As these amendments and additions do not affect the analysis of the arguments or the outcome, I shall describe the provisions in their current form, namely as amended most recently by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Where a person has been convicted and given a determinate prison sentence of twelve months or more (a sentence period), section 244(1) provides that, subject to certain specified exceptions, once he has served half his sentence, it is the duty of the Secretary of State to release him on licence. Section 244(3) defines the first half of the sentence period as the requisite custodial period, at the end of which he is thus entitled to be released on licence. A prisoner may also be released on licence during the requisite custodial period under section 246(1), which, so far as is relevant, is in the following terms: Subject to subsections (2) to (4), the Secretary of State may release on licence under this section a fixed term prisoner at any time during the period of 135 days ending with the day on which the prisoner will have served the requisite custodial period. Subsection (2) limits this power in relation to short sentences, and subsection (4) excludes the operation of subsection (1) in certain other cases, including cases where (aa) the sentence is for four years or more and (g) the prisoner has been released on licence under this section at any time and has been recalled to prison under section 255(1)(a). Section 250(4) states that any licence (a) must include the standard conditions, which are stated to be such conditions as may be prescribed, and (b) may include (i) any condition authorised by certain other statutes, and (ii) such other conditions of a kind prescribed by the Secretary of State as [he] may for the time being specify in the licence. Section 250(5) provides that a licence granted under section 246 must be subject to a curfew condition in accordance with section 253, which is in the following terms: (1). [A] curfew condition is a condition which (a) requires the released person to remain, for periods for the time being specified in the condition, at a place for the time being so specified . and (b) includes requirements for securing the electronic monitoring of his whereabouts during the periods for the time being so specified. (2) The curfew condition may specify different places or different periods for different days, but may not specify periods which amount to less than 9 hours in any one day . (3) The curfew condition is to remain in force until the date when the released person would (but for his release) fall to be released on licence under section 244. Thus, a curfew condition cannot operate beyond the end of the requisite custodial period, the point at which the prisoner would in any event be entitled to be released. The place specified in a persons licence is normally his home, and for that reason a licence under section 246 is often known as home detention curfew. By virtue of section 249, a licence, whether under section 244 or 246, remains in place until the end of the sentence period, unless the licence is revoked and the person subject to the licence (the licensee) recalled. The Secretary of State has the power to revoke a licence and recall a licensee back to prison pursuant to two different statutory provisions. First, section 254(1) of the 2003 Act gives the Secretary of State a general power to revoke any licence and to recall the licensee to prison. Where the power of revocation is exercised under section 254(1), the licensee is entitled pursuant to section 254(2) to be told the reasons for his recall and to make representations to the Secretary of State, who can cancel the revocation of the licence under section 254(2A). Sections 255A 255C contain provisions which apply when a licence is revoked under section 254(1) and the revocation is not cancelled. In general terms, in such an event, the Secretary of State may release the former licensee, if satisfied that he will not present a risk of serious harm to the public, and, if she is not so satisfied, she must refer the case to the Parole Board for a binding ruling within that period if the prisoner makes representations. If there is no such release, the Secretary of State must refer the question of the former licensees release to the Parole Board within 28 days of his return to custody see sections 255B(4) and 255C(4). Secondly, section 255(1) confers a specific power on the Secretary of State to revoke a section 246 licence or home detention curfew, and it provides as follows: (1) If it appears to the Secretary of State, as regards a person released on licence under section 246 (a) that he has failed to comply with any condition included in his licence, or (b) that his whereabouts can no longer be electronically monitored at the place for the time being specified in the curfew condition included in his licence, the Secretary of State may, if the curfew condition is still in force, revoke the licence and recall the person to prison under this section. Thus, the power of recall under section 255 can only be exercised whilst the curfew condition is in force ie until the end of the requisite custodial period, when the licensee would have been entitled to be let out on licence as of right. (Thereafter, the licence can only be revoked under section 254). Further, section 255(2) provides for a licensee to be given the reasons for his recall and the opportunity to make representations to the Secretary of State, who can cancel the revocation pursuant to section 255(3). However, unlike the position in relation to the section 254 power of recall, there is no provision for review by the Parole Board of the exercise of the Secretary of States section 255 power of recall. Accordingly a prisoner can be recalled under section 255 even if he has fully complied with the conditions of the licence. The procedural safeguards are that the recalled prisoner must be given reasons for the recall and be able to make representations about them. So the statutory position in relation to determinate sentences is, in outline, as follows: a) All prisoners are entitled to release on licence after serving b) half their sentence; If recalled, a prisoner is either entitled to re release after 28 days or to referral to the Parole Board, whose decision on re release is binding; c) There may be discretionary release, sanctioned by the Secretary of State, for the limited period of up to 135 days before the prisoner becomes entitled to release at the half way mark in his sentence. d) This discretionary release is also on licence but the licence must additionally incorporate Home Detention Curfew terms. e) During the period of the discretionary release, the prisoner may be recalled not only for breach of licence or demonstrated risk to the public but also because the Home Detention Curfew system cannot be made to work in his case. He must be given the reasons and is permitted to make representations to the Secretary of State. f) Such recall within the limited period of up to 135 days is not subject to Parole Board or court review, but g) So soon as the half way stage in his sentence is reached, the automatic Home Detention Curfew terms fall away and the rules set out at (a) and (b) apply. There are quite separate rules for prisoners serving indeterminate terms, where the criteria for release on licence, recall or re release on licence are largely geared to current risk to the public; in such cases all decisions are referable to the Parole Board whose ruling is binding. Article 5(4) of the Convention The short point raised in this appeal is whether a recall to prison under section 255, without a right of review by the Parole Board or any other judicial body, is consistent with article 5(4) of the Convention. Article 5(1)(a) of the Convention provides as follows: Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (a) the lawful detention of a person after conviction by a competent court . Article 5(4) states: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. As Elias LJ observed below in para 12, there is a close relationship between these two provisions. Article 5(1)(a) recognises the right to liberty, and provides that a person should not lose his liberty save by being lawfully detained following a conviction by a tribunal which is judicial in character. Article 5(4) confers an associated right on a detained person to challenge the lawfulness of his detention before a tribunal which is judicial in character, and to have effect given to the decision of that tribunal. The parties respective cases The case for each party is simple. The appellant contends that, as a result of the licence granted on 21 February 2011, he regained his liberty, and the subsequent revocation of the licence and his consequent recall to prison on 7 April 2011 therefore constituted a deprivation of his liberty which infringed article 5(4), because, having been effected under section 255 pursuant to a decision of the Secretary of State, its lawfulness was not decided speedily, or indeed at all, by a court. The Secretary of State, on the other hand, argues that, at least where, as in this case, the sentence in question is determinate, in any case where a prisoner, who has been released on licence, is recalled to prison during the currency of his sentence period, or at any rate during the requisite custodial period, the requirements of article 5(4) are satisfied by the original sentence lawfully passed by the court by which he was originally imprisoned. Somewhat counter intuitively, the appellant relies on domestic authority, and in particular on the decision of the House of Lords in R (Smith and West) v Parole Board [2005] 1 WLR 350 (West), whereas the Secretary of State relies on the jurisprudence of the Strasbourg court. In my opinion, it is right to start by considering the Strasbourg case law, and then turn to the domestic decisions. The Strasbourg jurisprudence on article 5(4) para 76, the Strasbourg court said this: In De Wilde, Ooms and Versyp v Belgium (No 1) (1971) 1 EHRR 373, [T]he purpose of article 5(4) is to assure to persons who are arrested and detained the right to a judicial supervision of the lawfulness of the measure to which they are thereby subjected . Where the decision depriving a person of his liberty is one taken by an administrative body, there is no doubt that article 5(4) obliges the Contracting States to make available to the person detained a right of recourse to a court; but there is nothing to indicate that the same applies when the decision is made by a court at the close of judicial proceedings. In the latter case the supervision required by article 5(4) is incorporated in the decision; this is so, for example, where a sentence of imprisonment is pronounced after conviction by a competent court . It may therefore be concluded that article 5(4) is observed if the arrest or detention is ordered by a court within the meaning of [article 5(4)]. This reasoning was distinguished by the court in X v United Kingdom (1982) 4 EHRR 188, para 51 in relation to indeterminate sentences, where the court held that, while this observation applied to an ordinary, determinate, sentence, it does not purport to deal with an ensuing period of detention in which new issues affecting the lawfulness of the detention might subsequently arise. In Van Droogenbroeck v Belgium (1982) 4 EHRR 443, para 47, the court pointed out that an indeterminate sentence involved placing recidivists and habitual offenders at the Governments disposal, which required the Minister of Justice to direct his mind to the need to deprive or continue to deprive the person concerned of his liberty. In such a case, article 5(4) was engaged, and it required judicial review, at reasonable intervals, of the justification for the deprivation of liberty The effect of the reasoning in De Wilde is demonstrated by two admissibility decisions of the Strasbourg court. In Ganusauskas v Lithuania (Application No 47922/99, 7 September 1999), the applicant, who had been sentenced to six years in prison for obtaining property by deception, complained about the fact that the District Court permitted the prosecutor to appeal out of time against a decision to release him conditionally after he had served half his sentence as a model prisoner (a decision which the District Court then reversed). The Third Section rejected as inadmissible his contention that his rights under articles 5(1), 5(4) and 6 had been infringed. Relying on De Wilde, the court said that article 5(4) only applies to proceedings in which the lawfulness of detention is challenged, and added that [t]he necessary supervision of the lawfulness of the detention after conviction by a competent court, as in the present case, is incorporated at the outset in the applicants original trial and the appeal procedures against the conviction and sentence. In Brown v United Kingdom (Application No 986/04, 26 October 2004), the applicant, who had been sentenced to eight years in prison for supplying heroin, was released on licence after serving two thirds of his sentence. He was then recalled on the grounds of changing his residence without approval and posing a risk to others. His representations to the Parole Board were rejected, as was his subsequent attempt to seek judicial review. His application, based on the contention that his rights under articles 5(1), 5(4), 6 and 8 had thereby been infringed, was rejected as inadmissible by the Fourth Section, which said this so far as article 5(4) is concerned: [W]here an applicant is convicted and sentenced by a competent court to a determinate term of imprisonment for the purposes of punishment, the review of the lawfulness of detention is incorporated in the trial and appeal procedures. No new issues of lawfulness concerning the basis of the present applicants detention arose on recall and no right to a fresh review of the lawfulness of his detention arose for the purposes of article 5(4) of the Convention. Mr Southey QC, for the appellant, argued that, in each of these two cases, the applicants reliance on article 5(4) could have been rejected on the ground that he had had the opportunity to challenge his recall to prison (in opposition to the prosecutors appeal to the District Court in Ganusauskas, and to the Parole Board and, arguably, through his application for judicial review, in Brown). That may well be right, but it does not in any way undermine the fact that, in each case, the court rejected the article 5(4) complaint on the ground that the article did not apply at all in circumstances where the recall to prison occurred during the period of a determinate sentence imposed for the purposes of punishment. I would add that the reference to punishment cannot have been intended to mean solely for punishment: determinate prison sentences are imposed for a mixture of reasons, each of which should, at least normally, be treated as applicable to the whole of the sentence period. Domestic jurisprudence on article 5(4) In R (Giles) v Parole Board [2004] 1 AC 1, the House of Lords held that article 5(4) was not infringed in a case where the appellant had been sentenced (under statutory provisions which have now been superseded) to a determinate but increased term to recognise the risk to the public which he represented. He had served what would have been the unincreased period but remained in prison. Relying on the reasoning in De Wilde and Van Droogenbroeck, it was held that, because the protective period had been imposed as part of the original sentence and was not subject to any control by the executive, but could be reviewed by the parole board, a judicial body, it did not infringe article 5(4). In his opinion (with which the other members of the committee agreed), at para 40, Lord Hope described the effect of the Strasbourg jurisprudence (which he analysed in the thirteen preceding paragraphs) as being that: [A] distinction is drawn between detention for a period whose length is embodied in the sentence of the court on the one hand and the transfer of decisions about the prisoner's release or re detention to the executive. The first requirement that must be satisfied is that according to article 5(1) the detention must be lawful. That is to Lord Hope expanded on the effect of this distinction at para 51, in these say, it must be in accordance with domestic law and not arbitrary. The review under article 5(4) must then be wide enough to bear on the conditions which are essential for a determination of this issue. Where the decision about the length of the period of detention is made by a court at the close of judicial proceedings, the requirements of article 5(1) are satisfied and the supervision required by article 5(4) is incorporated in the decision itself. That is the principle which was established in De Wilde, Ooms and Versyp. But where the responsibility for decisions about the length of the period of detention is passed by the court to the executive, the lawfulness of the detention requires a process which enables the basis for it to be reviewed judicially at reasonable intervals. terms: Where the prisoner has been lawfully detained within the meaning of article 5(1)(a) following the imposition of a determinate sentence after his conviction by a competent court, the review which article 5(4) requires is incorporated in the original sentence passed by the sentencing court. Once the appeal process has been exhausted there is no right to have the lawfulness of the detention under that sentence reviewed by another court. The principle which underlies these propositions is that detention in accordance with a lawful sentence passed after conviction by a competent court cannot be described as arbitrary. The cases where the basic rule has been departed from are cases where decisions as to the length of the detention have passed from the court to the executive and there is a risk that the factors which informed the original decision will change with the passage of time. In those cases the review which article 5(4) requires cannot be said to be incorporated in the original decision by the court. A further review in judicial proceedings is needed at reasonable intervals if the detention is not to be at risk of becoming arbitrary. Lord Hutton (with whom the other members of the committee also agreed) expressed the same view after analysing the Strasbourg jurisprudence in paras 65 79. In West [2005] 1 WLR 350, the two appellants were licensees who had been recalled to prison for alleged breaches of their respective licences, which had been granted under what was effectively the statutory predecessor of section 244(1). Thus, they had each served a sufficient proportion of their respective sentences to be entitled to be released on licence. In each case, the Parole Board had decided not to recommend re release, having refused to grant an oral hearing to consider the contention that the revocation of the licence was unjustified and that the licensee should be re released. The primary decision of the House of Lords was that the Parole Board had a common law duty to act fairly, both substantively and procedurally, when considering whether the revocation of a licence was justified, and that this would normally require an oral hearing where questions of fact were in issue see per Lord Bingham at paras 28 35. However, as Mr Southey rightly says, the House of Lords did consider the applicability of article 5. In para 36, Lord Bingham held that article 5(1) did not apply as the sentence of the trial court satisfies article 5(1) not only in relation to the initial term served by the prisoner but also in relation to revocation and recall. In para 37, he turned to article 5(4), and appears simply to have assumed that it applied to the proceedings before the Parole Board, and went on to hold that the requirements of the article were satisfied by its statutory power, provided it is conducted in a manner that meets the requirement of procedural fairness already discussed. In para 37, Lord Bingham does not appear to have considered the effect of Ganusauskas or Brown, although he specifically cited and relied on them in para 36 in relation to article 5(1) and indeed in relation to article 6 in paras 40 and 42. Lord Hope agreed with Lord Bingham and while he also referred in para 81 to Ganusauskas and Brown in connection with article 6, he similarly appears to have assumed, at paras 72 75, that article 5(4) applied without considering whether that was consistent with those admissibility decisions or indeed with what he had said in Giles (which was cited in argument but not relied on in the judgments see [2005] 1 WLR 350, 351 352). Lord Walker and Lord Carswell simply agreed with Lord Bingham. Lord Slynn, who dissented in part, described his initial view as being that there are not two formal orders for detention as that recall from conditional release was itself empowered by the initial sentence of the court, but said that he had been persuaded by Mr Fitzgerald that this is too restrictive an approach paras 54 55. He justified this conclusion by reference to the decision of the Strasbourg court in Weeks v United Kingdom (1987) 10 EHRR 293, para 40. In R (Black) v Secretary of State for Justice [2009] 1 AC 949, the House of Lords considered a case where the respondent, who, after having been sentenced to 24 years in prison, had become eligible to be considered for discretionary release on licence. Under the statutory scheme then in force, he was eligible for discretionary release on licence after serving half his determinate sentence, but became entitled to it only after serving two thirds. Although the Parole Board recommended that he be released, the Secretary of State decided that the risk of re offending was too great. By a majority of four to one, the House rejected the respondents contention that his rights under article 5(4) were infringed. In the course of their reasoning, the Law Lords had to grapple with the argument that the decision in West in relation to article 5(4) was inconsistent with the reasoning of the Strasbourg court in Ganusauskas and Brown, as explained by Lord Hope in Giles. Lord Rodger, with whom Baroness Hale agreed, said that he agreed with Lord Brown, but explain[ed] shortly how [he saw] the position in the light of t[the English and Strasbourg] cases para 37. Relying on the constant jurisprudence of the European Court of Human Rights conveniently summarised by Lord Hope in Giles at para 40, he held that the answer to the question whether article 5(4) gives a long term prisoner, with a determinate sentence , the right to take legal proceedings at the halfway stage of his sentence, to determine the lawfulness of his continued detention was No paras 45 46. Lord Carswell referred to Lord Hopes observations in Giles, and then contrasted cases such as Van Droogenbroeck, where the executive authority possessed a discretion over the time when the prisoner would be released, which was not fixed at the outset by any judicial decision, with cases such as Ganusauskas and Brown, where the lawfulness of the detention was incorporated at the outset in the applicants original trial and the appeal procedures against conviction and sentence para 57. Lord Brown, with whom Baroness Hale agreed, considered the Strasbourg jurisprudence at paras 66 71, explaining at paras 66 67 that, so far as article 5 was concerned, the Strasbourg court has consistently appeared to treat determinate sentences quite differently from indeterminate sentences. He then considered the domestic decisions, including Giles and West, at paras 71 77. He next turned to his [c]onsiderations and conclusions, which he set out in paras 78 84. He stated at para 81 that [t]here is nothing intrinsically objectionable (certainly in Convention terms) in allowing the executive, subject to judicial review, to take the parole decision. He then said that the fact that, by statute, the UK had chosen to give the Parole Board a role in the process, and statutory directions as to how to approach that role, and has chosen to fix precisely the period within a determinate sentence during which the prisoner is to be considered for parole [did not] mean that article 5(4) is necessarily thereby engaged so that the boards decision must be final paras 82 83. He explained this in para 83, where he said that [t]he administrative implementation of determinate sentences does not engage article 5(4); the decision when to release a prisoner subject to an indeterminate sentence does. However, in the course of his discussion of the domestic cases, Lord Brown did refer to the apparent conflict between Ganusauskas and Brown on the one hand and West on the other, in para 74, where he said this: Inescapably it follows from West that contrary to the view expressed in the Strasbourg courts admissibility decision in Brown, a prisoners recall for breach of his licence conditions does raise, new issues affecting the lawfulness of the detention such as to engage article 5(4). And that seems to me clearly correct: it would not be lawful to recall a prisoner unless he had breached his licence conditions and there could well be an issue as to this. I wonder, indeed, if the European Court would have decided Brown as they did had it followed, rather than preceded, the House's decision in West. Be that as it may, recall cases certainly so far as domestic law goes, are to be treated as akin both to lifer cases in the post tariff period and to the Van Droogenbroeck type of case where, upon the expiry of the sentence, a prisoner is subjected to an executive power of preventive detention. Lord Phillips, who dissented, effectively relied on the reasoning in West, on the basis that: This decision is in direct conflict with the reasoning of the Strasbourg court in Brown v United Kingdom. Lord Brown considers that its effect should be confined to the decision whether to release a prisoner after recall. I can see no reason for so confining it; the reasoning is applicable to any decision whether to release a prisoner on licence. (para 28) Discussion If one limits oneself to the decisions of the Strasbourg court to which I have referred, and the reasoning in Giles quoted above, the law appears to me to be clear. Where a person is lawfully sentenced to a determinate term of imprisonment by a competent court, there is (at least in the absence of unusual circumstances) no question of his being able to challenge his loss of liberty during that term on the ground that it infringes article 5(4). This is because, for the duration of the sentence period, the lawfulness of his detention has been decided by a court, namely the court which sentenced him to the term of imprisonment. That does not appear to me to be a surprising result. Once a person has been lawfully sentenced by a competent court for a determinate term, he has been deprived of his liberty in a way permitted by article 5(1)(a) for the sentence term, and one can see how it follows that there can be no need for the lawfulness of his detention during the sentence period to be decided speedily by a court, as it has already been decided by the sentencing court. If that is the law, it would follow that Mr Whistons appeal in this case must fail. On this approach, article 5(4) could not normally be invoked in a case where domestic discretionary early release provisions are operated by the executive in relation to those serving determinative terms. I accept that, in the absence of the clear Strasbourg jurisprudence, there would be an argument for saying that article 5(4) should apply in such cases. However, as already observed, the notion that the article is not engaged because of the original sentence appears entirely principled, and the consequence that a person under such a regime has to rely on his domestic remedies, at least unless other Convention rights are engaged, seems to me to be not unreasonable in practice. However, the issue is complicated by the decision of the House of Lords that article 5(4) was engaged in West, because, if the legal analysis just summarised were correct, article 5(4) would not have been engaged in West. I am bound to say that the decision in West appears to me to be unsatisfactory in relation to article 5(4) and, it should be emphasised, only in relation to article 5(4). First, although the relevant Strasbourg cases were cited in the judgments they were not followed on this point, and, save in the opinion of Lord Slynn, there was no explanation why not. Secondly, although Giles was referred to in argument, it was not cited in any opinion, and therefore no consideration appears to have been given to the observations of Lord Hope quoted above. Thirdly, at least in the four majority judgments it was not so much decided that article 5(4) was engaged; rather, it seems to have been simply assumed. Fourthly, in the fifth judgment, Lord Slynns explanation as to why he departed from his initial view that article 5(4) was not engaged was, with respect, plainly unsatisfactory, as the Strasbourg decision he relied on, Weeks, was a case involving an indeterminate sentence. When one turns to Black, the position can be said to be yet murkier. In their opinions, Lord Rodger (although he agreed with Lord Brown) and Lord Carswell steered clear of West, and simply treated the law on article 5(4) to be as stated by Lord Hope in Giles, para 40 (and, in the case of Lord Carswell, by the Strasbourg court in Van Droogenbroeck, Ganusauskas, and Brown). Lord Brown and Lord Phillips both considered that, so far as article 5(4) was concerned, West was inconsistent the Strasbourg jurisprudence. Lord Phillips (dissenting in the result) preferred to follow West, whereas Lord Brown in an obiter observation, preferred to limit the scope of West. The question, then, is what we should do about this unsatisfactory state of affairs. Mr Southey argues that we should follow Lord Browns approach in his obiter dictum in Black at para 73, and to conclude that article 5(4) applies in this case because Mr Whiston is seeking to be released after recall. Ms Lieven QC, for the Secretary of State, argues that we should follow the Strasbourg jurisprudence, as explained and applied in Giles, and hold that Mr Whiston cannot invoke article 5(4), as, so long as his sentence period was running, it had been satisfied by the sentence which was imposed at his trial. I have reached the clear conclusion, in agreement with the Court of Appeal, that we should reach the conclusion advocated by Ms Lieven. As already explained, it clearly appears to be the conclusion which the Strasbourg court would reach. The fact that Ganusauskas and Brown were admissibility decisions strengthens their force rather than weakens it: in each case, the court considered the applicants argument on article 5(4) to be so weak, for the reasons it gave, that it was not even worth proceeding to a decision. I have some difficulty with the notion, implied by Lord Brown in para 74 of Black, that a court in this country should hold that the reach of article 5(4) is, as it were, longer than the Strasbourg court has held. Assuming (as may well be right, and will no doubt have to be considered in a future case) that a United Kingdom court could, in principle, decide that article 5(4) applied in Mr Whistons case in the face of clear Strasbourg jurisprudence that it would not, I am quite unconvinced that it would be appropriate to do so. Unless and until I am persuaded otherwise on the facts of a particular case, it seems to me that the common law should be perfectly well able to afford appropriate protection to the rights of people in the position of Mr Whiston without recourse to the Convention. The decision in West demonstrates that the common law affords protection in such circumstances, and Lord Browns actual conclusion in Black underlines the very limited nature of any exception which he had in mind in his obiter observations. It would be wrong not to confront squarely the decision in West on article 5(4) and Lord Browns obiter dictum in Black, para 74. As Elias LJ said at [2014] QB 306, para 1, there is a growing number of cases which have bedevilled the appellate courts on the question whether and when decisions affecting prison detention engage article 5(4). As he added, [p]roblems arise because of the combination of general and imprecise Strasbourg principles and the complexity of English sentencing practices. I believe that this makes it particularly important that we grasp the nettle and hold that (i) the decision in West was per incuriam so far as it involved holding (or assuming) that article 5(4) was engaged, and (ii) the obiter dictum of Lord Brown in Black, para 74 is wrong in so far as it suggests that the law of the UK in relation to article 5(4) differs from the Strasbourg jurisprudence as summarised by Lord Hope in Giles, paras 40 and 51. So far as West is concerned, I have already identified certain problems in para 41 above. Furthermore, and importantly, it is not as if the actual decision in West thereby stands in any way impugned. As the headnote records, at [2005] 1 WLR 350 351, the conclusion reached by the House of Lords was primarily based on the appellants common law rights, as is reflected in Lord Binghams opinion, which devotes nine paragraphs to the common law and one to article 5(4). I suspect that the reason that the appellants Convention rights were considered was that one of the appellants had not relied on the common law in the Court of Appeal (see para 33). Properly analysed, all five opinions in Black support the view that West was per incuriam to the extent I have suggested. Lord Phillips and Lord Brown both expressly said it is inconsistent with the Strasbourg jurisprudence, and Lord Rodger and Lady Hale agreed with Lord Brown. Lord Rodger (with whom Lady Hale also agreed) and Lord Carswell each made it clear that they regarded the law as accurately set by Lord Hope in Giles, which is inconsistent with West so far as the applicability of article 5(4) is concerned. As to Lord Browns observation in Black at para 74, apart from being no more than an obiter dictum, it is inconsistent with the analyses of Lord Rodger and Lord Carswell in the same case. I must also confess that, in agreement with Lord Phillips, it seems rather hard to reconcile the reasoning which led Lord Brown to dismissing the appeal with his observations in para 74. It is true that Lord Rodger and Baroness Hale agreed with Lord Brown, but I do not think it would be right to take such a general agreement as approving every sentence in Lord Browns opinion, at least in so far as a sentence is not part of his [c]onsiderations and conclusions. Quite apart from that, it does not appear to have been argued in Black that it was wrongly held or assumed in West that article 5(4) was engaged, and therefore it is unsurprising that, in so far as they considered West, the opinions in Black proceeded on the basis that it was rightly decided. Indeed, the inconsistencies and uncertainties on this issue engendered by the opinions in Black appear to me to support the view that West was wrong in so far as it held or assumed that article 5(4) was engaged. Having had the benefit of reading Lady Hales judgment, I would add that it may be that the Strasbourg court would want to reconsider their jurisprudence, but, at the moment, it appears to me that it has the effect discussed above. Conclusion For these reasons, which reflect the reasons expressed in the very clear judgment of Elias LJ in the Court of Appeal, I would dismiss this appeal. LADY HALE I agree that this appeal should be dismissed but I wish to sound a note of caution about some of the reasoning which has led Lord Neuberger to reach that conclusion. In my view, the present law draws a principled distinction between those determinate prisoners who have reached the point in their sentence at which they are entitled to be released on licence and those who have not. If the former are recalled from their licence, and their representations to the Secretary of State fall on deaf ears, they are entitled to have their case referred to the Parole Board. The latter, whose release on licence was discretionary, are not. In Brown v United Kingdom (unreported, Application No 986/04, 26 October 2004) the Strasbourg court pointed out that there was a crucial distinction between prisoners serving a determinate sentence of imprisonment and those serving a life sentence. Once the latter had served the punishment part of their sentences, the reason for detaining them was not to punish them for their original offence but because they posed a continuing risk to the public. Hence article 5(4) required that their continued imprisonment had be subject to periodic judicial scrutiny. A determinate sentence, on the other hand, had been imposed by a court as punishment for the offence and that justification continued for its duration. The lawfulness of his detention does not depend, in Convention law terms, on whether or not he ceases to be at risk of re offending (page 5). The court went on to say that The fact that the applicant before the end of the sentence may expect to be released on licence does not affect this analysis (page 5). However, the position in our law is rather stronger than an expectation of release on licence. The prisoner is legally entitled to be released at a certain point in his sentence. This is irrespective of the risk that those responsible for his imprisonment may consider that he poses to the public. In a very real sense, therefore, the sentence imposed by the court as punishment for the offence is half the actual term pronounced by the judge (and indeed the judge has to explain this to him when imposing it). I appreciate, of course, that the judge imposes the sentence which he or she thinks correct, without regard to the right to early release. The whole of the sentence is intended as punishment. Once released at the nine month point, the prisoner remains liable to recall for the remainder of the term. However, the reasons for his recall could then be subject to scrutiny by the Parole Board, which will focus upon whether or not he poses a risk of re offending or otherwise endangering the public. Thus it can be said that, once a prisoner has passed the point of mandatory release on licence, the basis for any later recall and detention is the risk of reoffending rather than the original order of the court, and article 5(4) applies. Drawing this distinction is in fact consistent with the results of the domestic authorities. In R (Giles) v Parole Board [2004] 1 AC 1, Mr Giles had been sentenced to term of imprisonment totalling seven years which was longer than commensurate with the offences he had committed. He was entitled to be considered for parole after he had served half of this and to be granted parole after he had served two thirds. His complaint related to the absence of automatic reviews once he had served whatever period the judge had thought commensurate with the gravity of his offending (which the judge was not required to and did not specify). The issue was whether a determinate sentence which was partly punitive and partly preventative was in the same category as an indeterminate sentence and thus incompatible with article 5(4) unless (at least after the commensurate part had been served) there was a review before a judicial body with power to order release. The issue was not whether a prisoner who had been released, still less a prisoner with the right to be released, had the same rights as an indeterminate prisoner if recalled. Furthermore, it is difficult to characterise the position after a prisoner has reached the point of mandatory release as simply the administration of the sentence which has been imposed by the court. Parliament has decided that the prisoner is entitled to release and the criteria for recall and re release are quite different from those which led the judge to impose the original sentence. In R (West) v Parole Board [2005] 1 WLR 350, Mr West and Mr Smith were recalled after their mandatory release. As with the more recent case of R (Osborn) v Parole Board [2013] UKSC 61, [2013] 3 WLR 1020, the case was concerned with the procedures to be adopted by the Parole Board when considering whether they should be re released, and specifically whether the prisoner should be given an oral hearing. Although the opinions concentrate upon the common law requirements of fairness, I do not find it at all surprising that Lord Bingham appears to have taken it for granted that article 5(4) applied. Lord Slynn required to be convinced of that, but was persuaded by the analogy with the recall of a prisoner serving an indeterminate sentence. In Weeks v United Kingdom (1988) 10 EHRR 293, the Strasbourg court had held that article 5(4) applied. While I entirely accept that there is no analogy between a determinate and an indeterminate sentence, so as to require a review while the prisoner is still in prison, the analogy between the recall of a determinate sentence prisoner who was entitled to be released and the recall of an indeterminate sentence prisoner is much closer. In R (Black) v Secretary of State for Justice [2009] UKHL 1, [2009] 1 AC 949, Mr Black had not yet reached the point in his sentence when he was entitled to be released on licence. He was arguing that article 5(4) applied once he became eligible for discretionary release, so that it was a violation of his rights for the Secretary of State to reject the Parole Boards recommendation that he be released. So his too was not a case of recall after mandatory release. Once again, I do not find it surprising that Lord Brown considered that West was correctly decided; he was well aware of the difference between discretionary and mandatory release, but did not think that the opinions in West drew any distinction between them (para 73). I now think that this was a distinction which ought to have been given greater prominence and that it is a good reason for holding that their Lordships in West were correct in taking the view that article 5(4) applied. The only case which is not consistent with this analysis is Strasbourgs admissibility decision in Brown. Lord Neuberger is, of course, correct to say that the decision was based on the fundamental distinction between determinate and indeterminate sentences; but the court appears not to have considered whether there might be a distinction between recall after mandatory and discretionary release; further, the case had been considered by the Parole Board, which had the power to order his release, although this was before West, and so there had not been an oral hearing. Ganusauskas v Lithuania (unreported, Application No 47922/99, 7 September 1999), in contrast, not only appears to be a case of a proposed discretionary early release, but also one which was considered by a court. In this case, Mr Whiston was still serving the period of imprisonment which resulted from the sentence imposed upon him by the court: it is called the requisite custodial period. He was not yet entitled to release. Discretionary release subject a home detention curfew enforced by electronic monitoring may or may not be regarded as a continued deprivation of liberty, depending upon the length of the curfew, but it is very close to it. The prisoner may be recalled for the purely practical reason that it is not possible to monitor him at his address, which is nothing to do with whether he still constitutes a risk. It is the original sentence which means that he is still a prisoner. Hence it seems to me that our domestic law, which gives the Parole Board the power to decide upon the continued detention of a prisoner recalled after mandatory release on licence, but not after release on home detention curfew, draws a principled distinction. It is a distinction which is certainly consistent with the principles contained in article 5(1) and (4) of the European Convention. It is for that reason that, although agreeing with the ratio of the decision in this case, I would prefer it not to be taken further than the situation with which this case is concerned. I comfort myself that the views to the contrary expressed in Lord Neubergers judgment are, strictly speaking, obiter dicta.

The question raised on this appeal is whether a person released from prison on a home detention curfew, and then recalled to prison under section 255 of the Criminal Justice Act 2003, has rights pursuant to article 5(4) of the European Convention of Human Rights. Article 5 protects the right to liberty, and article 5(4) confers on an individual who has been deprived of their liberty an associated right to challenge that deprivation before a judicial body. On 5 October 2010, the appellant, Stuart Whiston, was sentenced to 18 months in prison for robbery. He was entitled to automatic release on licence after serving half his sentence on 5 July 2011. However, on 21 February 2011, he was released on licence under a so called home detention curfew pursuant to section 246 of the 2003 Act. On 7 April 2011, the Secretary of State decided to revoke the licence under section 255 of the 2003 Act, because the appellants whereabouts could no longer be monitored in the community, and he was recalled to prison. The decision of the Secretary of State was not subject to any statutory judicial control or review. The appellant contends that, as a result of the licence granted on 21 February 2011, he regained his liberty, and the subsequent revocation of his licence and his consequent recall to prison on 7 April 2011 therefore constituted a deprivation of his liberty which infringed article 5(4). The Secretary of State argues that, at least where the sentence in question is determinate, in any case where a prisoner who has been released on licence is recalled to prison during the currency of his requisite custodial period, the requirements of article 5(4) are satisfied by the original sentence lawfully passed by the court by which he was originally imprisoned. The Supreme Court unanimously dismisses the appeal. Lord Neuberger, with whom Lord Kerr, Lord Carnwath and Lord Hughes agree, gives the main judgment. Lady Hale gives a concurring judgment. Under Strasbourg jurisprudence, where a person is lawfully sentenced to a determinate term of imprisonment by a competent court, he is not, at least in the absence of unusual circumstances, able to challenge his loss of liberty during that term on the ground that it infringes article 5(4). Where the Secretary of State exercises her discretion to release a prisoner before the end of the requisite custodial period of their sentence, article 5(4) is not infringed if that licence is subsequently revoked. All the statutory provisions relevant to this appeal are in the 2003 Act, as amended most recently by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Where a person has been convicted and given a determinate prison sentence of twelve months or more (a sentence period), section 244(1) provides that, subject to certain specified exceptions, once he has served half his sentence it is the duty of the Secretary of State to release him on licence. A prisoner may also be released on licence during the requisite custodial period under section 246(1). A licence, whether under section 244 or 246, remains in place until the end of the sentence period, unless the licence is revoked and the person subject to the licence (the licensee) is recalled. The Secretary of State has the power to revoke a licence and recall a licensee back to prison pursuant to two different statutory provisions [3 8]. First, section 254(1) of the 2003 Act gives the Secretary of State a general power to revoke any licence and to recall the licensee to prison. Where the power of revocation is exercised under section 254(1), the licensee is entitled to be told the reasons for his recall and to make representations to the Secretary of State, and, ultimately, to the Parole Board. Secondly, section 255(1) confers a specific power on the Secretary of State to revoke a section 246 licence. This power of recall can only be exercised until the end of the requisite custodial period, when the licensee would have been entitled to be let out on licence as of right. Unlike the position in relation to the section 254 power of recall, there is no provision for review by the Parole Board of the exercise of the Secretary of States section 255 power of recall [9 10]. Under Strasbourg jurisprudence, where a person is lawfully sentenced to a determinate term of imprisonment by a competent court, there is (at least in the absence of unusual circumstances) no question of his being able to challenge his loss of liberty during that term on the ground that it infringes article 5(4). This is because, for the duration of the sentence period, the lawfulness of his detention has been decidedby a court, namely the court which sentenced him to the term of imprisonment [38]. On this approach, article 5(4) could not normally be invoked in a case where, in relation to those serving determinate terms, domestic discretionary early release provisions are operated by the executive. The notion that article 5(4) is satisfied by the original sentence appears entirely principled, and the consequence that a person under such a regime has to rely on his domestic remedies, at least unless other Convention rights are engaged, is not unreasonable in practice [40]. The common law should be well able to afford appropriate protection to the rights of people in the position of Mr Whiston without recourse to the Convention [45]. Consequently, in so far as it held that article 5(4) was engaged by the revocation of a mandatory licence, the House of Lords in Smith and West [2005] 1 WLR 350 were incorrect and the observations of Lord Brown in R (Black) v Secretary of State for Justice [2009] 1 AC 949 are wrong in so far as they suggest that the law of the United Kingdom in relation to article 5(4) differs from the Strasbourg jurisprudence [46]. Lady Hale agrees that the revocation of a discretionary licence does not infringe article 5(4). However, Lady Hale holds that the present law draws a principled distinction between those determinate prisoners who have reached the point in their sentence at which they are entitled to be released on licence and those who have not. If the former are recalled from their licence, and their representations to the Secretary of State are unsuccessful, they are entitled to have their case referred to the Parole Board. The latter, whose release on licence are discretionary, are not [50]. Once a prisoner has passed the point of mandatory release on licence, the basis for any later recall and detention is the risk of reoffending rather than the original order of the court, and, therefore, article 5(4) applies [52].

The liability of employers for deaths caused by mesothelioma has pre occupied courts and legislators over recent years. The present appeals concern claims to pass the burden of this liability on to insurers, made either by employers or in the case of insolvent employers by the personal representatives of former employees using the mechanism of the Third Party (Rights against Insurers) Act 1930. The appeals concern employers liability insurance. This is in contrast with Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 where public liability insurance was in issue. Employers liability focuses necessarily upon the relevant employment relationships and activities. Public liability relates to any of the insureds relationships and to activities affecting the world at large. Another feature of employers liability is that, under the Employers Liability (Compulsory Insurance) Act 1969 (the ELCIA), it has since 1 January 1972 been compulsory for every employer other than local authorities carrying on any business in Great Britain to insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain The appeals arise because the relevant insurers maintain that the employers liability insurances which they issued respond (or, better, could only have responded) to mesothelioma which developed (or, possibly, manifested itself) as a disease during the relevant insurance periods all long past. In contrast, the relevant employers and personal representatives maintain that the insurances respond to mesothelioma which develops and manifests itself later; all that is required, they say, is exposure of the victim during the insurance period to asbestos in circumstances where the law attributes responsibility for the mesothelioma to such exposure. These alternative bases of response (or triggers of liability) have been loosely described as an occurrence (or manifestation) basis and an exposure (or causation) basis. It is in issue whether the ELCIA, after it came into force, mandated any particular basis of response. A secondary issue, arising if the insurances only respond on an occurrence basis, is whether the aetiology of mesothelioma justifies a conclusion that there was during the relevant insurance period an occurrence sufficient to trigger liability under the insurances. Burton J, [2008] EWHC 2692 (QB), concluded that the relevant insurances all responded on an exposure basis. The Court of Appeal, [2010] EWCA Civ 1096, by a majority (Rix and Stanley Burnton LJJ), upheld the judge in relation to some of the insurances (particularly those covering disease contracted during the relevant insurance period); but they concluded that others (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. Smith LJ would have upheld the judges judgment in its entirety. The full judgments in both courts repay study. They have been of great assistance to this court and make it possible to go directly to the heart of the issues. Mesothelioma is a hideous disease that is inevitably fatal. In most cases, indeed possibly in all cases, it is caused by the inhalation of asbestos fibres: Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, para 1, per Lord Phillips. It is a cancer of the pleura, which are thin linings around the lungs and on the inside of the rib cage. It is usually undetectable until shortly before death. Its unusual features include what Burton J in this case at para 30 described as the unknowability and indescribability of its precise pathogenesis. In particular, it is impossible to know whether any particular inhalation of asbestos (at least any occurring more than ten or so years prior to diagnosability) played any or no part in such development. Because of this unusual feature, the law has developed a special rule. The special rule was the product of judicial innovation in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and in Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572. It was modified by statutory intervention in the form of the Compensation Act 2006, section 3. Leaving aside exposures occurring within the ten or so years prior to diagnosability, the rule can now be stated as being that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a "material increase in risk" of the victim contracting the disease will be held to be jointly and severally liable in respect of the disease. Burton Js findings in the present case justify certain further propositions, mostly also corresponding with the summary in Lord Phillips judgment in Sienkiewicz (para 19): (i) A significant proportion of those who contract mesothelioma have no record of occupational exposure to asbestos. The likelihood is that (vi) in their case the disease results from inhalation of asbestos dust that is in the environment. There is, however, a possibility that some cases of mesothelioma are "idiopathic", i.e. attributable to an unknown cause other than asbestos. (ii) The more fibres that are inhaled, the greater the risk of contracting mesothelioma. (iii) There is usually a very long period between the exposure to asbestos and the development of the first malignant cell. Typically this can be at least 30 years. (iv) For a lengthy period (perhaps another five years) after the development of the first malignant cell, there remains a possibility of dormancy and reversal, but at a point (Burton J thought a further five years or so before the disease manifested itself, and was thus diagnosable) a process of angiogenesis will occur. This involves the development by malignant cells of their own independent blood supply, so assuring their continuing growth. (v) The mechanism by which asbestos fibres cause mesothelioma is still not fully understood. It is believed that a cell has to go through 6 or 7 genetic mutations before it becomes malignant, and asbestos fibres may have causative effect on each of these. It is also possible that asbestos fibres have a causative effect by inhibiting the activity of natural killer cells that would otherwise destroy a mutating cell before it reaches the stage of becoming malignant. Mesothelioma currently claims about 3000 lives a year in the United Kingdom. This speaks to the common use of asbestos materials up to the 1960s and 1970s. In Annex I to his judgment Rix LJ set out the insuring clauses of the various forms of policy wording in use from time to time. Subject to re ordering to reflect the development of the language, Annex A to this judgment includes the same and some further wording. It can be seen that the Excess policies and the first two MMI policies promise to indemnify the insured employer against liability if at any time during the period of insurance (or of any renewal) any employee shall sustain under the earlier policies personal injury by accident or disease or under the later policies [any] bodily injury or disease in the case of the first Excess policy while engaged in the service of the Employer or in other cases arising out of and in the course of [his] employment by the insured employer. In the case of the Independent policy, the insurer, under the recital, promised to indemnify the employer during the period of insurance or of any renewal. The insuring clause itself contains no express limitation to any period. It promises indemnity against all sums for which the employer shall be liable for damages for such injury or disease if any employee shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule. The third MMI policy and the BAI policies were in more developed form. The former promises indemnity in respect of legal liability for sums payable as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any employee when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The latter promised indemnity against all sums which the Insured may become liable to pay to any Employee . in respect of any claim for injury sustained or disease contracted by such Employee during the period of insurance or any renewal. The insurers party to the present appeals have at all times represented only a small part of the employers liability insurance market. By far the larger part of the market consists of companies who until the late 1960s (when competition rules intervened) operated a tariff system which bound them to adopt a specified policy form and specified rates. Until 1948 tariff insurance was focused on Workmens Compensation Act claims, but in 1948 legislative changes (in particular the abolition by the Law Reform (Personal Injuries) Act 1948 of the doctrine of common employment) made a common law claim for future accruing causes of action much more attractive. It may well have been in anticipation of these changes that the tariff companies introduced a new form of policy in May 1948, still in widespread use today, providing indemnity if any employee shall sustain any personal injury by accident or disease caused during the period of insurance. Under this tariff wording, sustain looks to the occurrence of an accident or development of a disease at any time, while caused makes clear that the trigger to cover is that the accident or disease has been caused during the insurance period. The present insurers were non tariff companies, and have always been free to set their own wordings. From dates after the insurances the subject of this appeal, three of the insurers in fact ceased to use the wordings set out in Annex A, and themselves moved expressly to causation based wordings Excess in about 1976, Independent in the mid 1980s, and BAI in 1983. As a matter of insurance practice, however, until the decision in Bolton in 2006, all these wordings, whether tariff or non tariff and whether using the language caused, sustain or sustained or contracted, paid out on long tail claims (including the mesothelioma claims which became increasingly frequent in the 1980s) by reference to the date(s) of exposure. Where successive employers with different insurers had exposed a particular employee victim to asbestos, liability was in practice apportioned between the employers, and so insurers, broadly according to the extent of exposure for which each employer was responsible. The rival cases Insurers submit that all the wordings in Annex A require the injury or disease to occur during the period of insurance or of any renewal. In the alternative, if the use of the word contracted in the third MMI policy and the BAI policies or the different formulation of the Independent policy leads to any different conclusion in any of such cases, they submit that this leaves unaffected the clear meaning of the Excess and first two MMI policy wordings. The employers and interested employees contend that all these policies are to be understood as operating on an exposure or causation basis. The implications of these alternative interpretations are clear. On insurers primary contention, the policies set out in Annex A would not respond to current mesothelioma claims. It is unlikely that most of them would have responded to many, if any, mesothelioma claims, since it was only in the 1980s that such claims began to emerge to any great extent. Policies written on a causation basis since the dates indicated in paragraph 10 above would also not respond to current mesothelioma claims. Insurers response is that any insurance must be read according to its terms. Until 1 January 1972, when the ELCIA came into force, it was not obligatory for employers to have any form of employers liability insurance. Further, viewed on an occurrence or manifestation basis, the policies would pick up long tail claims arising from exposure occurring at any time in the past. In this connection, it is to be noted that various long tail diseases were well recognised perils from the era of Workmens Compensation legislation before 1948. Instances were scrotal cancer, pneumoconiosis and more specifically (from the time of Merewether and Prices 1930 Report on Effects of Asbestos Dust on the Lungs and Dust Suppression in the Asbestos Industry) asbestosis. All these would only develop over and could manifest themselves after considerable periods of years. Following upon the 1930 report, The Asbestos Industry Regulations 1931 (SI 1931/1140) were introduced to regulate factories handling and processing raw fibre, and in 1969 The Asbestos Regulations 1969 (SI 1969/690) extended this regulation more widely it appears in the light of an appreciation that mesothelioma could result from exposure to small quantities of asbestos dust (see In re T & N Ltd (No 3) [2006] EWHC 1447 (Ch), [2007] 1 All ER 851, para 118). The Court of Appeals conclusions The force of insurers case rests in the use of the word sustain, whether in connection with the phrase personal injury by accident or disease or bodily injury or disease or in the conjunction injury or disease . sustained or contracted or injury sustained or disease contracted. Rix and Stanley Burnton LJJ concluded that the word sustain looked prima facie at the experience of the suffering employee rather than its cause (paras 232 and 343). Insurances responding to injury or disease sustained during the insurance period would not, on this basis, cover mesothelioma sustained long afterwards. Rix LJ had some compunction about the result because of what he (though not Stanley Burnton LJ) felt was a tension with the commercial purpose of employers liability insurance in the extraordinary context of mesothelioma (para 235). Rix LJ would have liked to hold that mesothelioma sufferers sustained sufficient injury on exposure to asbestos to trigger the insurances in force at the date of such exposure, but felt bound by Bolton to conclude the contrary (paras 277 289). However, Rix LJ, though not Stanley Burnton LJ, considered that the particular wording of the Independent insurances did not explicitly require the injury or disease to be sustained during the insurance period, and could be read as covering the sustaining of injury at any time arising out of and in the course of employment during the insurance period (paras 300 and 350). Rix and Stanley Burnton LJJ differed as to the significance of the ELCIA extension provisions included in the Independent wording, the third MMI wording and the second BAI wording, as quoted in Annex A. Rix LJ thought that the ELCIA required employers to insure on a causation basis (paras 184 and 186) although, since he also expressed the view that an insurance arranged and maintained on a sustained basis could comply with the ELCIA, he may perhaps only have meant required in practice. At all events, he held that the ELCIA extension provisions covered liability incurred to the personal representatives of employees on a causation basis, while enabling insurers to recoup themselves so far as possible from the relevant employers in respect of liability they would not otherwise have had to meet (paras 292, 300 and 302). Stanley Burnton LJ did not agree that the ELCIA required causation wording (para 342), but considered that it required insurance to be taken out and maintained in respect of ex employees, or at least those who were or had been employed at any time after the coming into force of ELCIA (para 342; and see Rix LJs comments at paras 305 307). Rix, Smith and Stanley Burnton LJJ were all agreed that, where provision was made for disease contracted, this could and should be construed as introducing cover on a causation basis, even if or though wording such as injury (or disease) sustained could only respond on an occurrence basis. Analysis Annex A sets out the insuring clauses. Insurers case is, as I have said, rooted most strongly in the word sustain, particularly when it is used by itself, rather than in conjunction with a more ambivalent alternative in the phrase sustained or contracted. The natural meaning of the word sustain, taken in isolation and as defined in the Shorter Oxford English Dictionary from an appropriate date (1965, 3rd ed), is, with respect to injury, undergo, experience, have to submit to, or, possibly, to have inflicted upon one, suffer the infliction of. But the insurance cover granted (and no doubt required) extended expressly beyond injury by accident to embrace disease. This was achieved by less natural conjunctions, such as sustain [any] personal injury by accident or disease or sustain [any] bodily injury or disease. Conscious perhaps that the verb sustain does not fit naturally with the concept of disease, some companies (MMI in its third wording and BAI in its first and second wordings) introduced the different verb contracted in the formulations sustained or contracted or injury sustained or disease contracted. This use of contracted with respect to disease is considerably more natural, but is clearly open to an interpretation that it looks back to the initiating or causative factor of the disease, and (whatever the answer on that point) highlights a question whether any substantial difference exists in this connection between such wordings and other wordings referring more awkwardly to the sustaining of personal injury by disease or the sustaining simply of disease. To resolve these questions it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more broadly. As Lord Mustill observed in Charter Reinsurance Co Ltd v Fagan [1977] AC 313, 384, all such words must be set in the landscape of the instrument as a whole and, at p 381, any instinctive response to their meaning must be verified by studying the other terms of the contract, placed in the context of the factual and commercial background of the transaction. The present case has given rise to considerable argument about what constitutes and is admissible as part of the commercial background to the insurances, which may shape their meaning. But in my opinion, considerable insight into the scope, purpose and proper interpretation of each of these insurances is to be gained from a study of its language, read in its entirety. So, for the moment, I concentrate on the assistance to be gained in that connection. A first point, made very clearly below by Rix LJ (para 263), is that the wordings on their face require the course of employment to be contemporaneous with the sustaining of injury. This leaves open what is meant either by sustaining or by injury. Rix LJ thought that the Independent wording could be understood differently in effect, as if it had expressly read: If any person who is under a contract of service or apprenticeship with the Insured shall at any time sustain bodily injury or disease arising out of and in the course of his employment by the Insured during the policy period in connection with the Contract specified or type of work described in the Schedule . That interpretation assumes that sustain in this context equates with the occurrence, rather than causation, of the injury or disease, and only arises for consideration if that assumption is correct. A second point is that the insurance wordings demonstrate a close link between the actual employment undertaken during each insurance period and the premium agreed to be payable for the risks undertaken by insurers in respect of that period. Premium is linked expressly to actual wages, salaries and earnings during the insurance period under the Excess policies, the first MMI wording and the BAI policies. The second and third MMI wordings contemplate that premium may be linked to wages, salaries and earnings, and, to the extent that any inference regarding the general nature and scope of cover under these standard wordings can be drawn from such a link, it must be capable of being drawn whether or not premium was actually so linked in any particular case. As to the Contractors Combined Policy issued by the Independent, it is a probable inference that the estimates which were provided and were to be updated will have included, in respect of the employers liability cover in section 1, wages, salaries and other earnings paid. Finally, the Independent cover is linked to the actual contract or work which the employer is undertaking during the insurance period. These links are in my view significant. True, premium may sometimes be calculated on a rough and ready basis. Minor discrepancies between the premium calculation and the risk may be understandable: see e.g. Ellerbeck Collieries, Ld v Cornhill Insurance Co [1932] 1 KB 401, 418, per Greer LJ (who pointed out that any such discrepancy there was more apparent than real, since workmen not earning wages because off work would not actually be at risk of any fresh accident, even though they would remain susceptible to certification for disablement). Here the position is quite different. Great care is taken in all the policies to tie premium to the actual employment undertaken during the insurance period, and in the case of the Excess, Independent and MMI policies to tie cover to a business, contract or activities described in the schedule. The natural expectation is that premium is measured by reference to actual employment or work during the insurance period because it is the risks attaching to such employment or work which are being undertaken by insurers. At the very least, the drawing of this link makes improbable the contention advanced by some of the insurers that the present insurances were apt to pick up liabilities emerging during the insurance period which could be attributable to employment and activities undertaken and negligent conduct committed at times long past. The number of employees, their employment activities and the risks involved at those times could be very different. The significance which attaches to the employment current during the insurance period is underlined by legal and practitioner texts. As long ago as 1912, MacGillivray on Insurance (1st ed), pp 966 wrote: The nature and scope of the employers business must be clearly defined in the insurance policy, and workmen employed outside the scope of the assureds business as described in the policy will not be covered In the section on Employers Liability Insurance in Stone & Coxs Accident, Fire and Marine Year Book (1957), pp 688 689, the authors stressed the importance of identifying any special hazards, such as signs of careless management or lack of control or careless workmen, and observed: The surveying of Employers Liability risks has probably become more general than formerly. Apart from the question of the possibilities of accident, there is now the serious question of disability due to disease and in particular the disease known as pneumoconiosis. In 1974 MMI produced a Guide to Insurance Officers in Local Government, which it said that it would like to see on the desk of every insurance officer for ready reference at any time; this, after noting that employers liability was almost invariably dealt with by a separate policy and that its importance had been increased by the ELCIA, went on: "7. Premiums are usually based on wages and salaries this is not only a convenient yardstick but is logical since loss of earnings usually represents a substantial part of claims. Rates of premiums vary according to the nature of the work of the labour force, and the claims experience. 8. A feature of employers liability claims is the length of time which often elapses between the date of the accident and the final settlement, and the cost of servicing claims tends to be high. Injury caused at work during the period of insurance even though it may not be diagnosed till years afterwards can be a liability under the policy." I note in parenthesis that 1974 was the year in which MMI changed from a pure sustain form of wording to a form covering bodily injury or disease suffered, when sustained or contracted during the currency of the policy. Yet there is no suggestion in the Guide of any change in substance. It is in this light improbable that the present insurances can or should be read as offering cover in respect of ancient, as opposed to current, employment and activities. But there is a third point. If insurances in the present form only address risks arising from employment during the insurance period, then, on insurers case, there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to injury or disease in another later period. If the employment relationship spans both insurance periods and the employer remains insured with the same insurers in both periods, there may be no problem. The employee is employed at all relevant times and the insurance may be viewed as a single continuing contract. The policy wordings set out in Annex A, with their references to insurance during the period of insurance or during any subsequent renewal period, would support the latter view. But, even in the days of more stable long term employment and insurance relationships, employees could and would move employment or retire, or employers would cease business, or change insurers. On the basis that the insurances only cover risks arising from employment during the insurance period, there would be no cover unless the liability arose from and in the course of and involved injury or disease during the currency of the same employment and the same insurance (including any renewal). Fourthly, on insurers case, employers would as a result be vulnerable to any decision by insurers not to renew; and such a decision might arise from the simple performance by employers of their common law duty to disclose past negligence to insurers upon any renewal. Employers who discovered or came to appreciate that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease (e.g. by exposing their employees to asbestos) would have such a duty. Insurers could then, on their own case, simply refuse any renewal or further cover. Employers could then have to disclose that refusal also to any further insurers to whom they made a proposal for cover. One response made by insurers to such problems is that they would not arise in the large bulk of cases. That is no doubt true. Most employers liability cases involve short tail claims: typically, an accident involving injury. It is not surprising if the language of the insurances fits more easily with situations in which cause and effect coincide in time. But, by the same token, this does not mean that the underlying risk being assumed was in either partys mind limited to circumstances in which a cause gave rise to an effect during one and the same insurance period. Rix LJ, in accepting that cover depended upon injury being sustained in the sense of experienced during the insurance period, was influenced by the thought that this was not an absurd or meaningless interpretation. The insurance could operate entirely successfully in some 99% of cases (para 235). In the light of this Courts recent decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 30, this, in my view, gives too little weight to the implications of the rival interpretations and to the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense. The 1% of cases in which there might be no cover could not be regarded as insignificant. Well before 1948, there was general awareness of the existence of long tail diseases which would only develop and manifest themselves after considerable periods of years (see para 12 above; and see also Cartledge v E Jopling & Sons Ltd [1963] AC 758). The connection between asbestos exposure and mesothelioma became generally known in the mid 1960s, following the publication in 1965 of Newhouse and Thompsons report on Mesothelioma of pleura and peritoneum following exposure to asbestos in the London area and a Sunday Times article. Yet on insurers case, the present insurances would not cover any situation where, after the termination of employment or the expiry of an insurance, injury or disease developed from an employers breach of duty to a relevant employee during an insurance period. A fifth point concerns the way in which the policies deal with the issue of extra territorial scope. The first Excess wording stands apart from the others in its treatment of that issue. Cover only exists in respect of any employee in the employers service who shall sustain any personal injury by accident or disease while engaged in the service of the employer in Great Britain, Northern Ireland, the Isle of Man or Channel Islands, in work forming part of the process in the employers business. As soon as one postulates a delay in time between the causation and experiencing of a disease, it becomes apparent that this wording could operate to very curious effect if sustain looks to the latter rather than the former. A disease (e.g. a cancer) experienced during employment could be covered although caused by pre employment exposure, while a disease caused by employment would not be covered if only experienced while working abroad. The natural inference to draw from the references to being engaged in the employers service and in work forming part of the employers business process is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occur during it. That points to an underlying focus on causation, even if the assumption was that in the majority of cases causation and experiencing of any injury by accident or disease would coincide. As to the other policies, at the very least, the way they deal with territorial issues throws doubt on any proposition that their wordings are so carefully or well chosen that a court should be careful to stick literally to whatever might be perceived as their natural meaning. They address territorial scope by specific exclusions, but the cover and the exclusions use different language. Thus, although the second and third Excess wordings cover liability to employees who sustain personal injury by accident or disease, the territorial exclusion is in respect only of accidents occurring outside Great Britain, etc, leaving it unclear how disease, whether caused or developing outside Great Britain, should be dealt with. The Independent wording also covers liability to employees who sustain bodily injury or disease, while the territorial exclusion is for injury, illness, loss or damage caused elsewhere than in Great Britain, etc. While the contrast in language is capable of lending some support to a view that sustain looks to experiencing, rather than to causation, an alternative possibility is that the two words were understood as having the same effect and that the cover was understood as focused on causation. The language of this exclusion thus cuts both ways, as Rix LJ recognised (para 297). A similar position applies to the contrast between injury or disease sustained and injury or disease caused outside Great Britain, etc. under the first two MMI wordings. Under the third wording, the language of the cover and the exclusion have been deliberately matched. Under the BAI wordings, however, there is an incongruity between cover for injury sustained or disease contracted and the exclusion in respect of liability for accidents . arising outside the United Kingdom. Again, this leaves the position in respect of disease unclear, and the difference between injury sustained and accidents arising can be read either as deliberate or as suggesting that no significance was attached to the difference or that the real concern was with causation. The history and Workmens Compensation Acts Much attention was, both below and before the Supreme Court, paid to the development of employees rights to compensation in respect of personal injury and disease, at common law and under the scheme of the Workmens Compensation Acts (WCAs). The WCAs were in force from 1897 until replaced in 1948 under the National Insurance (Industrial Injuries) Act 1946. The history and a number of the decisions under the WCAs were examined by Rix LJ in paras 126 to 165 of his judgment. He concluded that such an examination yields in the present context not a lot. To a considerable extent, I agree and I shall not repeat the whole exercise, but identify some potentially relevant aspects. Etymologically, some of the language presently in issue can be traced back to statutory language found in the Employers Liability Act 1880 and the WCA 1897. The 1880 Act modified the common law doctrine of common employment, by entitling employees to recover common law compensation for injury caused by specified matters for which employers were responsible, provided that they gave notice, within six weeks of sustaining the injury of its cause and the date at which it was sustained. The 1897 Act, applying to personal injury by accident arising out of and in the course of employment, also required notice to be given of the accident as soon as it occurred, stating the cause of the injury and the date at which it was sustained. These Acts therefore distinguished the causation and the sustaining of an injury, but not in any presently relevant context. Further, any reference to sustaining disappeared from the Workmens Compensation scheme in the 1906 Act, which amended the scheme to require a notice stating the cause of the injury and the date at which the accident happened. The 1906 WCA also expressly extended the scheme to cover certain diseases specified in section 8. In that context, it provided that, where a workman was certified as disabled or suspended from employment or died due to a disease and the disease is due to the nature of any employment in which the workman was employed at any time within the twelve months previous the date of the disablement or suspension, whether under one or more employers, then he or his dependants shall be entitled to compensation under this Act as if the disease or such suspension . were a personal injury by accident arising out of and in the course of that employment . Section 8(a) provided: The disablement or suspension shall be treated as the happening of the accident. Under section 8(c), the compensation was recoverable from the employer last employing the employee within the previous twelve months, providing the employee furnished that employer with particulars of all his other employers in the employment to the nature of which the disease was due. It was not necessary to prove that the disease actually arose from the last employment, merely to prove that the relevant employment gave rise to a risk of such a disease: Blatchford v Staddon and Founds [1927] AC 461. The 1906 Act may be regarded in this respect as involving an early statutory instance of the kind of liability recognised in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. However, failing such particulars, the last employer could excuse himself upon proving that the disease was not contracted whilst the workman was in his employment (section 8(c)(i)). The last employer might also join any other employer (within the last twelve months) and it was provided that upon proof that the disease was in fact contracted whilst the workman was in the employment of that other employer, that other employer shall be the employer from whom the compensation is to be recoverable (section 8(c)(ii)). Finally, section 8(c)(iii) provided that: if the disease is of such a nature as to be contracted by a gradual process, any other employer within the last twelve months was liable to make such contributions as might be agreed or determined by arbitration under the Act. Under this scheme, therefore, compensation for disease was initially based upon the nature of the employment and its potential for causing, rather than upon proof that it caused, such a disease. The paternal benevolence of the Legislature (as Visc Sumner put it in Blatchford: p 469) is well known, and if the price of that benevolence is paid by the last employer, who thus has to bear others burdens, that is nothing new in this kind of legislation. However, the last relevant employer could seek, in specified circumstances, to avoid or to pass on to another employer responsibility by proof that the disease was not actually contracted in his employment. Alternatively, in the case of a disease of such a nature as to be contracted by a gradual process, all relevant employers within the last twelve months would be liable to contribute. The scheme was, as I see it, concerned with either the risk of or actual causation, and in its use of the word contracted it appears to me to have been directing attention to the causation, rather than the mere experiencing or manifestation, of disease. The WCA scheme was the subject of further amendment by the 1925 Act. Section 43 superseded section 8 of the 1906 Act as regards scheduled diseases, while section 47 made specific provision for the introduction of a parallel scheme covering silicosis. Effect was given to this by inter alia the Metal Grinding Industries (Silicosis) Scheme which came into force in July 1927, making provision for obtaining compensation from the last employer within the previous three years, and giving such employer rights to look to other such employers within the last five years. An insurance covering employers liability in this connection was considered in Smith & Son v Eagle Star (1933) 47 Ll. L.R. 88, (1934) 48 Ll. L.R. 67. Mr Hill had been employed in processes giving rise to silicosis for some 20 years. For the last two of these years, from 31 March 1928 to 16 June 1930, he worked for Smith & Son. From 30 June 1927 to 17 June 1930, Smith & Son had an insurance against WCA liability in respect of any personal injury or disease which at any time during the continuance of this policy shall be sustained or contracted by any workmen . The policy was expressly extended to cover any liability in connection with any claim made by employees in respect of silicosis, and the decision of the Court of Appeal rested on this ground. But Scrutton LJ also examined the main policy language, and in particular what was meant by contracted. He noted that there has been a good deal of discussion in the Courts about a disease which is gradually contracted commencing at some stage and through the process going on increasing the disease until at last it results in total disablement (p 70), and concluded that the word was not to be read as first contracted, but in the sense of influenced or increased until it ultimately comes to total disablement. This, although not directly focusing on the first development of a disease from some earlier cause, suggests a flexible view of the word contracted, directed once again to the employments responsible for causing the disease. Confirmation that this was Scrutton LJs view can be found in the earlier case of Ellerbeck Collieries Ltd v Cornhill Insurance Co [1932] 1 KB 401. Two workmen who had been in the colliery companys service for many years were on respectively 11 and 12 March 1929 (dates they were actually off work) certified as suffering from miners nystagmus. The Cornhill had on 8 March 1929 issued the colliery company with a three month provisional cover note insuring in terms matching the wording of the insuring clause in the first Excess wording (i.e. against liability in respect of any employee who shall sustain any personal injury by accident or disease while engaged in the service of the employer). Failing a satisfactory survey, the cover note actually expired on 18 March 1929. The first point decided was whether the employees had sustained personal injury by accident or disease during the period of validity of the cover note (8 to 18 March 1929). It was held that they did. The judgments in the Court of Appeal are of interest for a number of reasons. First, both Scrutton LJ (p 408) and Greer LJ (p 417) approached the question of construction on the basis that the policy was intended to protect the employers against their liability to their workmen under the WCAs. Scrutton LJ added that it seems to me that the policy was intended to cover the liability of the employers for the results of industrial diseases caused by the employment (p 409). His description of the policy, covering in terms any employee sustaining personal injury by accident or disease in service, as intended to cover liability . for the results of diseases caused by the employment fits precisely with the analysis which I consider correct (paragraphs 18 28 above). Second, Scrutton LJ went on to refer to the difficulties in saying when an industrial disease, such as miners nystagmus or lead poisoning, begins, and in these circumstances the difficulty for an employee to pick the proper employer to sue. He described the way in which Parliament, by what became section 43 of the WCA 1925, had addressed such difficulties by providing a conventional and artificial means for enabling the workman to get compensation, leaving the various employers to fight out their proportion of the liability between themselves (p 409). He said that the last employer, liable under the WCA scheme, then claims on the insurance company on the ground that he is liable to make compensation for an injury by disease, and the date of the injury or disablement is by statute and certificate fixed as happening between the dates for which he is provisionally covered (p 411). On this basis, and in the light of the House of Lords decision in Blatchford, Scrutton LJ concluded that he was bound to hold that an accident has happened within the period of the provisional cover against the consequences of which the insurance company is bound to indemnify the employer (p 413). In short, the conventional and artificial provisions of the WCA defined what constituted an accident and when personal injury by accident or disease was sustained for the purposes of the insurance. Greer LJ, more shortly, adopted the same approach (p 418). Only Slesser LJ (p 421) expressed a reservation about the possibility that the artificial deeming provisions of section 43(a) of the WCA 1925 might only apply as between employee and employer, and that it might have been necessary to consider separately the date of the sustaining of injury as between the employer and the insurer, had there been any admissible evidence that the two employees had actually contracted the scheduled disease before the granting of the statutory medical certificate. Commercial purpose and practice Much general evidence was directed or elicited before Burton J in relation to the commercial purpose of the present insurances, and to practice relating to their operation in the years before the present issue arose. It was argued that there was, prior to the decision in Bolton, a universal usage of the insurance industry to pay out mesothelioma or similar claims under [employers liability] policies by reference to the date of inhalation/exposure whatever the wording, or an estoppel by convention to like effect. Burton J rejected the argument (paras 180 to 201, esp. para 201), for the reasons that, first, there was no evidence relating to years earlier than the 1980s which could be put down to any kind of arguable usage, second, any usage was not certain, not least because of the multiplicity of approaches to or bases for it and, third, it was not binding. It was not incorporated into the insurance contracts. No issue of estoppel by convention was pursued to the Court of Appeal (Rix LJ, para 24, and Stanley Burnton LJ, paras 332 and 335) and the issue of a universal custom was only pursued by Zurich Insurance Company (Rix LJ, para 24). By a multiplicity of approaches to or bases for insurers practice, Burton J was referring to evidence that insurers followed the practice they did in some cases because they believed that their contracts were to be interpreted on a causation/exposure basis, in others because they believed that the aetiology of diseases such as mesothelioma was such that injury was in fact sustained (in the sense of experienced) at the date of inhalation, while yet others may have failed to realise that their historically relevant wordings had been on a different basis to the causation wordings to which they had since switched or may have failed to address their minds to any relevant issue at all in relation to an insured who was usually a longstanding repeat client. Rix LJ (para 228) contented himself with agreeing with Burton Js reasoning on this aspect, while Stanley Burnton LJ noted and agreed in particular with Burton Js second reason, relating to the believed aetiology of mesothelioma (para 335). Smith LJ, on the other hand, treated the commonly held understanding that diseases such as mesothelioma involved injury at the date of inhalation as part of the factual matrix of all the insurance contracts (paras 322 323), and considered against that background that no difference in meaning should be held to exist between policies using sustained and causation wording, until the time when the two sides of the insurance industry should be considered to have appreciated that some diseases, including mesothelioma, do not occur until many years after exposure to the causative agent (para 327). She put that as around the time of the decision in Bolton, after which parties using a sustained wording must be taken to have meant only to cover injuries actually occurring during the policy period (para 327). The argument of a binding usage was not pursued before the Supreme Court, rightly so for the reasons given by the judge and the majority in the Court of Appeal. Equally, there has been no suggestion of estoppel by convention, along the lines recognised as possible in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 47. However, on the issues of policy interpretation, Mr Stuart Smith QC for Zurich Insurance, maintained before the Supreme Court an argument that there was a consensus based on market practice, whereby, for one reason or another, such policies would respond to long tail diseases by reference to the date of exposure, and that this could constitute relevant background to their construction. Assuming that, short of a binding usage or estoppel by convention, a practice, if known to or shared by the relevant parties, could in some circumstances be relevant background (see e.g. Reardon Smith Line Ltd v Yngvar Hansen Tangen [1976] 1 WLR 989), still, in my opinion the argument fails in the present case. It fails in particular in the light of the judges findings, even in relation to policies made in and after the 1980s. A practice based on a mistaken understanding, by only some insurers, that the policies operated on a causation basis cannot be relevant background to the interpretation of every policy; on the judges findings other insurers do not appear to have understood that the policies operated on that basis. A practice based on a mistaken understanding by others in the market as to when long tail diseases could be said to have been experienced or to involve injury is likewise an unpromising start for construing all policies; if the understanding were good, it would mean that such diseases fell within the policies, even though the policy cover was restricted to injury or disease experienced during the policy period. The understanding would not therefore carry any imperative to read a sustained wording as meaning caused. Before the Supreme Court, both employers and employees continued to rely upon the evidence given at trial regarding the general purpose of employers liability insurance as part of the background to the interpretation of the present insurances. Rix LJ (paras 223 to 235) gave it some weight as such, but Stanley Burnton LJ thought that there was little if any assistance to be gained by reference to the commercial purpose of EL insurance, as this was simply to provide the cover defined in the policy (para 333). The Supreme Court was provided with a useful summary of the considerable volume of evidence relied upon in this connection. It consisted in general of answers given by insurers, two at least of them with experience going back to the 1940s. They were asked (frequently in response to leading though not inadmissible on that score questions in cross examination) about their or others views, understandings or perceptions as to the purpose of the policies, and the way in which these would or should respond, in relation to injuries arising from exposure in the course of activities during the policy period. In my judgment, Stanley Burnton LJ was right to reject such evidence as inadmissible. The parties cannot be asked what they meant by their contract, and, failing any binding usage, it is equally inadmissible to ask other persons operating in the market to give general evidence as to what they would have understood the parties to have meant by the words used in the context in which they were used. The evidence does not seem to have amounted to more than that. However, I do not agree with Stanley Burnton LJs suggestion that no useful conclusions can be drawn about the commercial purpose of the policies, save that it was to provide the defined cover. In my opinion, relevant conclusions about the general nature and purpose of the individual policies can be drawn in this case, just as they could in the case of the different (and wordier) instrument in issue in In re Sigma Finance Corporation [2009] UKSC 2, [2012] 1 All ER 571 (see especially paras 10, 12 and 37). They can be drawn from an overall consideration of the individual insurance wordings, and particularly from the features which tie cover to the employees and activities during the relevant policy period and the five points considered in paragraphs 18 to 28 above. Further, if the policies are on any view apt to cover employers liability for long tail diseases which initiate during, but only manifest themselves years after, the original policy period, one may look with scepticism at an interpretation which distinguishes this situation from other situations where a long tail disease is caused but does not strictly begin during the policy period, and only manifests itself years later. This is particularly so if a conclusion that the latter diseases fell outside the policy cover meant that they would or might well not fall within any subsequent employers liability policy. ELCIA 1969 Section 1 of the ELCIA provides: 1. (1) Except as otherwise provided by this Act, every employer carrying on any business in Great Britain shall insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain (3) For the purposes of this Act (a) approved policy means a policy of insurance not subject to any conditions or exceptions prohibited for those purposes by regulations. 4. (1) Provision may be made by regulations for securing that certificates of insurance in such form and containing such particulars as may be prescribed by the regulations, are issued by insurers to employers entering into contracts of insurance in accordance with the requirements of this Act . (2) . the employer shall during the currency of the insurance and such further period (if any) as may be provided by regulations (a) comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees; . The only conditions or exceptions ever prohibited were certain exemptions from liability. Under section 3, the ELCIA did not however apply to local authority employers, such as most of MMIs insureds. Under section 4, provision might be made for certificates of insurance to be issued to employers, and in that event the employer was, obliged during the currency of the insurance and such further period (if any) as may be provided by regulations to comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees. In reaching his conclusions on the ELCIA (para 16 above), Rix LJ engaged in an impressive analysis, to which I would refer (paras 166 to 186). The only doubt this leaves is how, if the ELCIA requires a causation wording, an employer could properly insure on a wording which only covered injury sustained in the sense of experienced (see para 186 and paragraph 16 above). The scope of the ELCIA is, as Rix LJ indicated, open to three alternative analyses: that it requires cover in respect of (i) all future liability incurred during the insurance period, whenever the negligence or injury, or (ii) liability for all future injury or disease sustained (in the sense of experienced) by employees during the insurance period, whenever the negligence, or (iii) liability for all negligence or breach of statutory duty during the insurance period giving rise to liability as in (ii). The retrospectivity of cover involved in (i) and (ii) is unlikely to have been intended. The only one of the three possibilities not involving a degree of retrospectivity is (iii). A duty on every employer to insure, and maintain, insurance is consistent with a requirement to have the insurance in place during, though to maintain it after, the relevant insurance period. The provision, contemplated by section 4, for copies of insurance certificates to be issued by insurers and to be displayed by any employer for the information of his employees during the currency of the insurance and such further period as may be provided by regulations indicates, first, a desire to assure employees of their insurance protection during the relevant insurance period, and, secondly, an awareness that this assurance might need to remain in place after such insurance period; it is therefore suggestive of (iii), rather than (i) or (ii). As Rix LJ observed, it is only cover in accordance with (iii) that can give an employee the assurance that any injury or disease suffered as an employee and arising out of and in the course of [his] employment will be covered by insurance, the benefit of which would, if necessary, be available to him at the time under the Third Party (Rights against Insurers) Act 1930. An obligation to have a policy in force only at or by the time when injury is actually experienced would leave employees or ex employees at the mercy of compliance with the statute by their employers or ex employers at uncertain future dates. It would also leave such employees or ex employees at the mercy of employers who, for whatever reason, ceased to carry on business either in Great Britain or (for example due to insolvency) at all. Further, if injury or disease suffered or contracted bears the same meaning as insurers suggest that injury or disease sustained or contracted bears, then an employee, who had the misfortune to succumb to a disease abroad caused by his employment or previous employment in Great Britain, would not be covered (unless regulations intervened to ensure that he was). Stanley Burnton LJ thought that any issue as to the nature of the insurance required under ELCIA was resolved by its use of the word sustained, rather than caused. He went on to conclude that the ELCIA covered any injury sustained (in the sense of experienced) during a period of insurance, by anyone who was then or had at any previous time been an employee. However, that latter conclusion introduces a retrospectivity into the scope of the ELCIA, which, as already indicated, I think unlikely to have been intended. The statute could have used the tariff wording of causation instead of sustained. But in the statutory language the word sustained is not coupled with a phrase such as during the period of the insurance. Even if sustained means experienced in the context of the statute, the statute may require insurance on what is effectively a causation basis; the words sustained by his employees may well mean sustained at any future time by his current employees. The key to the meaning of the statutory language seems to me the combination of the phrases arising out of and in the course of their employment in Great Britain and not including injury or disease suffered or contracted outside Great Britain. Together, and for reasons given in the last two paragraphs, they indicate a statutory requirement to insure in respect of activities during the course of employment in Great Britain which may in the future give rise in or out of Great Britain to liability to the employees involved in such activities. In my judgment, therefore, the conclusion which gives proper effect to the protective purpose of the legislation is that the ELCIA requires insurance on a causation basis. The ELCIA extension provision to the Independent and second BAI wordings (see Annex A), as well as a similar extension provision to the MMI policy intended for insureds who were not local authorities, achieved this result expressly in relation to policies written subsequent to the coming into force of the ELCIA, at least for the purpose of ensuring that employees claims were covered by insurance. Any other subsequent insurances not containing that extension provision should, if possible, be read as providing the relevant employers cover required by statute. This is a powerful tool in the interpretation of such insurances. Bolton M.B.C. v Municipal Mutual Insurance Ltd The Court of Appeal in the present case was bound by its previous decision in Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 on public liability policies. The majority regarded that case as, in effect, determining the meaning which must be put on the word sustained in the present employers liability policies: see paras 284, per Rix LJ, and 339, per Stanley Burnton LJ, who however also found the logic of Longmore LJs judgment convincing in relation to the latter type of policies. Smith LJ on the other hand considered that public liability and employers liability insurances gave rise to different considerations (para 328). In my opinion, that is right. Employers liability policies are subject to particular terms and considerations, analysed above (particularly in paragraphs 18 28 and, in the case of policies effected after the coming into effect of the ELCIA, paragraphs 41 46). These considerations are not or certainly not necessarily applicable to public liability insurances. The present case was concerned with employers liability not public liability insurances, and it may well be that not all the relevant facts relating to the latter are before us. We certainly have not heard full argument on the proper conclusions which may be drawn regarding the basis of liability or trigger generally applicable under the latter. In these circumstances, I would proceed on the basis that we are not bound by Bolton, that this does not involve any view about the correctness or otherwise of Bolton, but only that it is unnecessary to consider what the position generally may be under public liability policies. Assuming that, in relation to public liability insurance, the position generally is as stated in Bolton, that does not alter the conclusions which I reach. It merely means, in their light, that public liability insurance generally and the present employers liability policies operate on different bases, because of their different backgrounds, terms and purposes. Contracted There is no difficulty about treating the word contracted as looking to the causation or initiation of a disease, rather than to its development or manifestation. In relation to the two BAI wordings and the third MMI wording, this interpretation obtains strong support from the general nature and purpose of the relevant policies, derived from their immediate context and terms and analysed in paragraphs 18 to 28 and 41 above. To the limited extent that the WCA background may assist to inform the meaning of later policies, it can be seen overall as a legislative scheme which was concerned with either the risk of or actual causation (para 32 above). Even if, in the phrase sustained or contracted or injury sustained or disease contracted, the word sustained is to be understood as meaning experienced, that would reflect no more than the fact that the cause and effect of an injury commonly coincide; I would still unhesitatingly conclude, as did the Court of Appeal, that the word contracted used in conjunction with disease looks to the initiating or causative factor of the disease. Sustained The majority of the Court of Appeal considered that it was impossible to view policies with pure sustained wordings as operating by reference to the initiating or causative factor of a disease. They did so primarily by reference to the wording of the insuring clauses. In my view, as indicated in paragraphs 18 19 above, a broader approach is necessary. The general nature and purpose of these policies can be derived from their immediate context and terms, analysed in paragraphs 18 to 28 and 41 above. It is true, as Rix LJ said, that phrases such as injury sustained by an employee or an employee who shall sustain injury, in either case by accident or disease, appear to address the impact of the accident or disease on the employee. But the underlying focus of the insurance cover is on the employees and activities current during the insurance period. The cover would be potentially incomplete, and employers would be potentially exposed to uninsured risks, were sustained to be understood as meaning developed or manifested. This is so, even before the ELCIA came into force. Any policies written subsequent to the coming into force of the ELCIA either afford cover consistent with the Acts requirements by virtue of an ELCIA extension provision, or, to the extent that this is not the case, should be construed, if at all possible, as meeting employers obligations under that Act. In my view, such obligations included taking out insurance in respect of negligence during the insurance period affecting an employee in a manner giving rise to bodily injury or disease then or at any subsequent time. On this basis, I consider that, although the word sustained may initially appear to refer to the development or manifestation of such an injury or disease as it impacts employees, the only approach, consistent with the nature and underlying purpose of these insurances both before and after the ELCIA, is one which looks to the initiation or causation of the accident or disease which injured the employee. The disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself subsequently. Disease sustained, read as meaning experienced or incurred Rix LJ was attracted by the submission that, even if sustaining disease meant experiencing or incurring it during the period of the insurance, long tail diseases could be said to have been sustained during the period of insurance in this sense. He asked rhetorically whether an employee who had inhaled asbestos had not sustained an injury in the form of an assault of the fibres, as a result of which he was worse off through having dangerous fibres in his lungs (para 280). He noted that, although there was at most trivial injury or damage, and nothing that could create actionable damage, nevertheless, when mesothelioma develops, it is the risk of mesothelioma created by the exposure which is the damage (see . Barker ) and it is the exposure, and the risk of mesothelioma, that is the damage (para 281). He only felt bound to reject this analysis (para 284) because of the Court of Appeals previous decision in Bolton. It may be that in the case of some long tail diseases, the victim can be said to have incurred or caught them at the same time as the initial ingestion or scratch giving rise to them. But it is clear that this is not the position with inhalation of asbestos in relation to either asbestosis or mesothelioma. No cause of action arises from exposure or inhalation alone: Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281. Further, for reasons which I develop in paragraphs 64 65 below, the exposure and risk are not by themselves damage in any sense known to the law. Damage is only incurred when mesothelioma develops. Only when it develops does the victim incur damage which is legally relevant, and even then this is not because any physical link necessarily exists or can be proved between the mesothelioma and the original exposure. The rule in Fairchild and Barker imposes liability for the mesothelioma upon persons who have exposed the victim to asbestos, and so created a risk of mesothelioma. But it is not a rule which, even as between employers and employees, deems the latter to have suffered injury or disease at the time of any exposure. And, even if it were viewed simply as a rule imposing retrospective liability on employers for exposing their employees to the risk of mesothelioma, the insurance policies do not insure risks of physical injury or disease, but only actual injury or disease. The application of the insurances in respect of mesothelioma At the outset of these appeals, the application of the insurances in respect of mesothelioma suffered by employees exposed to asbestos during their employment by an insured employer did not appear controversial. This changed after a question from Lord Phillips on day 4 of the hearing, followed by a later written note. All the same, the transcript pages containing any argument on the point numbered only 40 out of a total of some 1140. So far as Mr Edelman made any submissions on this point, in his written case or orally, they were to this effect: if the correct analysis of the Houses decision in Fairchild be that an employer who exposes an employee to asbestos is deemed to have caused that employees mesothelioma, then employers liability insurances held by the employer on a causation basis should respond; but, if the policies do not respond on a causation basis, there is no justification for treating the employee as having suffered injury or a disease during their currency, because employers cannot prove that any particular inhalation caused any injury. This led to some discussion, particularly with counsel for employers and employees, of the points which I have already addressed in paragraphs 50 52 above. The point now expressed forcefully by Lord Phillips in his judgment is that exposure to the risk of mesothelioma is the correct analysis of the Fairchild principle, at least as subsequently interpreted, and that such exposure can satisfy neither the concept of injury nor the concept of causation for the purposes of the policies. If that is right, then the present insurance claims must all fail. Indeed, the great bulk of insurance claims settled by other insurers (e.g. former tariff insurers) or by the present insurers under the causation policies they have issued in more recent years (paragraph 10 above) should presumably also have failed. The only exception may be the case of an employee exposed to asbestos in only one employment by an employer holding insurance throughout with only one insurer. In such a case it might (perhaps) be said that, whichever particular inhalation(s) may have been responsible for the employees mesothelioma, it (or they) must have been insured. Even then, the logic of the Supreme Courts reasoning in Fairchild and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229 might lead to the conclusion that causation was still unprovable in the light of the possibilities of environmental or idiopathic causation of mesothelioma. Rules regarding causation are created by the courts for the purpose of determining when liability arises in particular contexts. Normally, they reflect a common sense understanding of what is ordinarily understood when we speak of a cause in a particular context. In their leading work on Causation in the law (Clarendon Press, 2nd ed 1985) Professor H. L. A. Hart and Tony Honor examined both this understanding and its relationship to legal decision making. Generally, but not always, a cause must involve an act or omission that was at least a sine qua non of the injury in respect of which responsibility attaches (the but for test). But sometimes two separate acts or omissions may each independently have been sufficient to give rise to that injury (as when A and B simultaneously, but independently shoot C dead), and then we may as a matter of legal policy accept a weaker causal relationship for the imposition of responsibility: see p lxv in the preface to and p 123 of the 2nd edition. Other cases where causal requirements have been relaxed include Bonnington Castings Ltd v Wardlaw [1956] AC 613; there, materially contributing to part of an accumulation of dust which cumulatively led to pneumoconiosis gave rise to liability for the whole disease (although it has been suggested that some apportionment might now be possible in fact and law). Another relevant authority is McGhee v National Coal Board [1973] 1 WLR 1; there, liability for dermatitis was held to exist because the defendant had materially contributed to part of the claimants exposure to dirt, any part of which might, independently of any other, have given rise to the abrasion leading to the claimants dermatitis. It was recognised that this involved liability based on materially contributing to the risk of the injury. Lord Reid at p.4G H described the result as reached taking a broader view of causation, and Lord Wilberforce at p 5G viewed it as involving a conclusion as to the causal connection that had to exist between the default and the disease complained of. The contrary view (viz, that proof of risk was insufficient without proof that the risk caused or materially contributed to the disease) had a logic which Lord Wilberforce acknowledged, but rejected for policy and evidential reasons set out at p.6C F. In Fairchild, McGhee was seen as a precursor of the decision there reached. Putting aside the possibility of an idiopathic or environmental cause, a Fairchild type situation exists when (a) there are two separate potential causes exposing the claimant to the same risk, one involving an act or omission by the defendant, (b) either one of which causes would have been sufficient to give rise to the injury, and (c) one of which did so, but (d) neither of which can as a matter of probability be shown to have done so. Taking into account the later decisions in Barker v Corus and Sienkiewicz, the Fairchild principle extends to any case where there has been an act or omission exposing a person to asbestos, which exposure may have caused the mesothelioma, but which cannot be shown as a matter of probability to have done so. On that basis, the House held in Barker v Corus that each or any persons liability should only be proportionate to the extent that he had exposed another to the risk of mesothelioma. Parliament by the Compensation Act 2006 reversed that conclusion and made each such person liable in respect of the whole of the damage caused by the mesothelioma. Lord Phillips in his judgment addresses the basis of Fairchild in the light of Barker v Corus, the 2006 Act and Sienkiewicz. He accepts that, if Fairchild is now correctly to be understood as a special rule deeming employers who have exposed an employee to asbestos to have caused any subsequently suffered mesothelioma, then the insurance policies should apply (para 109). But he concludes that Fairchild must be understood as creating liability not for the disease, but for the creation of the risk of causing the disease. It follows in his view that employers and employees gain no assistance from the special rule in asserting that mesothelioma suffered by any person was caused or initiated in any particular policy period. On this basis, even though the insurances respond to injuries caused or initiated during their periods, the employers and employees fail for want of proof. It is not fruitful to repeat the exercise undertaken in Barker v Corus of examining in detail the significance of the speeches in Fairchild. The House was not agreed about this in Barker, but the majority speeches of Lords Hoffmann, Scott and Walker were at pains to reject any analysis of Fairchild as proceeding upon a fiction that each exposure had caused or materially contributed to the disease: see paras 31, 61 and 104; they each also referred to the liability created by Fairchild as being not for causing the disease, but for materially increasing the risk of the mesothelioma which was in fact suffered: paras 31, 36 and 40, 53, 61 and 113. Lord Rodger (dissenting) perceived the majority to be misinterpreting Fairchild by failing to acknowledge that it was based on an equation of materially increasing risk with materially contributing to causation, an equation which he thought had been accepted as sufficient causation in Bonnington Castings Ltd v Wardlaw [1956] AC 613 and McGhee v National Coal Board [1973] 1 WLR 1. It is on the apparently bright line distinction said to have been drawn by the majority in Barker between materially contributing to increasing the risk of, and causing, a disease that Lord Phillips now founds his judgment in these appeals. The Compensation Act 2006 applies where a person who has exposed someone to asbestos is liable in tort in connection with damage caused to the latter by mesothelioma whether by reason of having materially increased a risk or for any other reason (section 3(1)(d)). It makes the former person liable in respect of the whole of the damage (section 3(2)(a)). On its face, the Act assumes rather than creates the liability, and only alters the measure of recovery. That was the view expressed in Sienkiewicz by Lords Phillips, Rodger and Brown (paras 70, 131 and 183). However, on further analysis, the distinction identified in paragraphs 58 59 above proves more elusive. Even in Barker itself, Lord Walker described exposing the employee to the risk of mesothelioma as being equated with causing his injury and the result as an explicit variation of the ordinary requirement as to causation (para 104), and spoke of the rule as one by which exposure to the risk of injury is equated with legal responsibility for that injury (para 109). However, it is conceivable that he meant that the ordinary requirement of causation of the disease was entirely replaced by another liability creating rule. It is in the later authority of Sienkiewicz that the difficulty of drawing any clear cut distinction between creating a risk and causation of the disease becomes most apparent. Lord Phillips there stated that the rule in its current form was that the person responsible for the exposure and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease (para 1). Later, he said that the law was presently contained in Fairchild and Barker which had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances (para 70). That was the analysis of Fairchild advanced by Lord Rodger in Barker v Corus (paras 73 and 83) but rejected there by the majority. Lord Brown in Sienkiewicz spoke of a more relaxed approach to causation (para 178) and flexibility in the approach to causation (para 187). I referred to Fairchild and Barker as involving a special rule of causation (para 188), and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims (para 196) and to adjustments in the burden of proof (paras 198 and 200). Lord Rodger was, on the other hand, loyal to the majority view in Barker by referring to liability as based on materially increas[ing] the risk (para 113), and Lord Dyson was cautious in speaking of materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Lord Phillips has in para 123 set out a passage from an extra judicial commentary written by Lord Hoffmann in Perspectives on Causation (2011), p 8. In it, Lord Hoffmann describes the two ways in which the changes introduced by Fairchild and Barker could be characterised, one as changing the causal requirements for an action for damages for mesothelioma ; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent; the other as creat[ing], exceptionally, a cause of action for the increased risk of mesothelioma, rather than for the disease itself. Lord Hoffmann notes that the House in Barker (Lord Rodger dissenting) adopted the second explanation of what had happened in Fairchild. But in the next sentence, not quoted by Lord Phillips, Lord Hoffmann went on: Parliament almost immediately reversed this decision by a statute giving effect to the first explanation, which had been advocated by Lord Rodger in his dissenting speech. Lord Hoffmanns extra judicial (or judicial) words cannot by themselves alter the true effect of a statute, but his comments do again show that the suggested distinction is more fluid than might at first appear. It is relevant to look more closely at what Barker decides. In Barker, Lord Hoffmann spoke of Fairchild as applying an exceptional and less demanding test for the necessary causal link between the defendants conduct and the damage (para 1) and of the requirement of a sufficient causal link between the defendants conduct and the claimants injury (para 17). In his note in Perspectives on Causation, he picked up this language with references to the causal requirements of the relevant rule and to the issues in cases of mesothelioma and analogous situations as involving the causal requirements for an action for damages for mesothelioma. Lady Hale in Barker also viewed the common law rules governing the measure of recovery as closely linked to the common laws approach to causation, and said that there was no reason in principle why the former rules should not be modified as the latter approach is courageously developed to meet new situations (para 122). In paras 123 and 124, she made clear that in her view the issue in Barker could be seen as arising from the expanded perceptions or developed concept of causation which the law had accepted. These citations all suggest that it is both possible and appropriate to characterise the position achieved by the common law after Barker v Corus as one concerned with the issue of the causal requirements or causal link, as between the defendants conduct and the disease, which the common law requires in order for there to be an action for mesothelioma. But analysis of the rule arrived at after Fairchild and Barker justifies further propositions. Despite the apparent clarity of the suggested distinction between liability for a risk and for a disease, no cause of action at all exists unless and until mesothelioma actually develops. Neither the exposure to asbestos nor the risk that this may one day lead to mesothelioma or some other disease is by itself an injury giving rise to any cause of action: see Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281; the House there decided that not even the emergence of pleural plaques marking the past exposure to asbestos constituted injury for the purpose of giving a cause of action. In order to fall within the principle in Fairchild and Barker, the development of mesothelioma is a pre condition: see Barker, per Lord Hoffmann (para 48) and Lord Scott (para 53). Lady Hale went further, stressing that she in fact agreed with Lord Rodgers view that the damage which is the gist of these actions is the mesothelioma and its physical and financial consequences. It is not the risk of contracting mesothelioma (para 120). In reality, it is impossible, or at least inaccurate, to speak of the cause of action recognised in Fairchild and Barker as being simply for the risk created by exposing someone to asbestos. If it were simply for that risk, then the risk would be the injury; damages would be recoverable for every exposure, without proof by the claimant of any (other) injury at all. That is emphatically not the law: see Rothwell and the statements in Barker itself, cited above. The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to the mesothelioma, not because it did, and because mesothelioma has been suffered by the victim. As to the exposure, all that can be said (leaving aside the remote possibility that mesothelioma may develop idiopathically) is that some exposure to asbestos by someone, something or some event led to the mesothelioma. In the present state of scientific knowledge and understanding, there is nothing that enables one to know or suggest that the risk to which the defendant exposed the victim actually materialised. What materialised was at most a risk of the same kind to which someone, who may or may not have been the defendant, or something or some event had exposed the victim. The actual development of mesothelioma is an essential element of the cause of action. In ordinary language, the cause of action is for or in respect of the mesothelioma, and in ordinary language a defendant who exposes a victim of mesothelioma to asbestos is, under the rule in Fairchild and Barker, held responsible for and in respect of both that exposure and the mesothelioma. This legal responsibility may be described in various ways. For reasons already indicated, it is over simple to describe it as being for the risk. Another way is to view a defendant responsible under the rule as an insurer, but that too is hardly a natural description of a liability which is firmly based on traditional conceptions of tort liability as rooted in fault. A third way is to view it as responsibility for the mesothelioma, based on a weak or broad view of the causal requirements or causal link appropriate in the particular context to ground liability for the mesothelioma. This third way is entirely natural. It was adopted by Lords Reid and Wilberforce in McGhee, by Lord Hoffmann, Lady Hale and (possibly) Lord Walker in Barker and by Lord Hoffmann in his extra judicial commentary. It seems to have received the perhaps instinctive endorsement of a number of members of this Court, including myself, in Sienkiewicz. Ultimately, there is no magic about concepts such as causation or causal requirements, wherever they appear. They have the meanings assigned to them and understood in ordinary usage in their context. A logician might disagree with a reference to causation or a causal link in a particular context, but that is not the test of meaning: see Lord Wilberforces words in McGhee, p 6C F (cited in para 56 above). The present appeals concern the meanings we assign to the concept of causation, first in the context of considering employers liability to their employees and then in considering the scope of employers insurance cover with respect to such liability. It is instructive in this connection to look more closely at the Compensation Act 2006. Section 3(3) states that section 3(2) does not prevent (a) one responsible person from claiming a contribution from another, or (b) a finding of contributory negligence. Section 3(4) goes on to provide that [I]n determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible . Section 3(3) necessarily relates to the legal bases for claiming contribution or asserting contributory negligence, which are to be found in, respectively, the Civil Liability (Contribution) Act 1978 and the Law Reform (Contributory Negligence) Act 1945. The 1978 Act addresses the situation where two or more persons are liable in respect of the same damage (section 1(1)), while section 2(1) provides for contribution in such situations to be such as may be found by the court to be just and equitable having regard to the extent of that persons responsibility for the damage in question. Although under section 3(4) of the 2006 Act, the court must have regard to the relative lengths of the exposure for which each was responsible, the same damage which is a pre condition to the application of the 1978 Act must be the mesothelioma. It cannot be the risk created by the person by or from whom contribution is sought, because each person and exposure creates a separate risk, and no one person or exposure creates the total risk resulting from all exposures. The 2006 Act, by its reference to the 1978 Act, thus assumes that every person, who has exposed to asbestos a victim who later experiences mesothelioma, incurs responsibility for the mesothelioma. That language again fits an analysis whereby the rule in Fairchild and Barker identifies the appropriate weak or broad causal link between the exposure and the mesothelioma. A similar position applies under the 1945 Act. Under section 1(1), that Act applies [w]here any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons. In that event, the damages recoverable are to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. The application of this section, as contemplated by the 2006 Act, is only possible on the basis that a mesothelioma sufferer may be said to have suffered the mesothelioma partly as the result . of the fault of anyone who has exposed him to asbestos. In other words, the rule in Fairchild and Barker must have been viewed by the drafters in my opinion entirely understandably as establishing a causal link, between the exposure and the mesothelioma, sufficient for it to be said that the mesothelioma was the result of each (and every) exposure. A similar view is also implicit in the provisions of the Act drafted on the basis that insurers who would commonly of course be employers liability insurers would be among the persons by or for whose benefit or against whom contribution would be sought in cases of multiple responsible persons: see section 3(7)(b) and (10)(a) of the 2006 Act. Those provisions necessarily assume that employers liability insurances, written generally on a causation basis, would respond to Fairchild/Barker type liability incurred by employers. Ultimately, the present appeals raise the questions how the present employers liability insurance policies respond as a matter of construction in circumstances within the rule in Fairchild and Barker. Where two contracts are linked, the law will try to read them consistently with each other. This is so with language in a bill of lading, incorporated from a charterparty: The Njegos [1936] P 90. A similar approach applies to language in a reinsurance incorporated from the insurance: Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 and Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyds Reports 350, even though there is no guarantee that a reinsurance will in every possible circumstance that may develop pick up every liability that may be held to exist under an insurance: see Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHC 40, [2010] 1 AC 180. The intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respect of which they were insured. Thus, as Scrutton and Greer LJJ accepted in the Ellerbeck Collieries case (paragraph 34 above), an employers liability insurance could have been expected to respond to the conventional and artificial definition in the WCAs as to what constituted an accident and when personal injury by accident or disease was sustained for the purposes of employers liability to employees. Furthermore, if the common law during or even after the currency of an insurance develops in a manner which increases employers liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyds Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. But it does mean that, when judges state what the law is, their decisions do . have a retrospective effect in the sense that the law as stated will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G H, per Lord Goff. The declaratory theory is a pragmatic tool, essential when cases can only come before the court some time, perhaps some years after the relevant events occurred, and when the law [must] be applied equally to all, and yet be capable of organic change (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild. Concluding, as I have done, that the present insurances covered employers liability for injuries or diseases caused during the relevant insurance periods, the question is whether they cover employers liability for mesothelioma arising under the rule in Fairchild and Barker from having exposed employees to asbestos during such periods. It is not in dispute that, if the rule is characterised as a rule of deemed causation, then the policies must respond. A parallel example, so familiar that it is easy to overlook, is the vicarious liability to an employee, A, which rests on any employer, B, who has not himself been negligent but must answer vicariously for the negligence of another employee, C. We have no hesitation in saying that the employer B has in such a case caused the injury or disease suffered by A. But this is so in reality only because a rule of law requires us to equate the acts or omissions of C with those of B. The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers activities during their insurance periods: see paragraphs 18 28 and 41 above; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers activities will not in practice be covered at all. In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient weak or broad causal link for the disease to be regarded as caused within the insurance period. It would, I think, have been anomalous and unjust if the law by deeming there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma. For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond. Conclusion I would therefore dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. ANNEX A The policy wordings (dates are approximate) (1) Excess First Wording (late 1940s): Whereas . (hereinafter called The Employer) carrying on the business of . has made a proposal . this Policy witnesseth that in consideration of the payment of . as premium to the Company on the estimated total amount, as set forth in the Schedule hereto, of the wages, salaries, and other earnings of Employees, a description of whom is set forth in the said Schedule (which premium is subject to adjustment as hereinafter provided) the Company agrees to indemnify the Employer in the manner following, namely That if at any time during the period commencing on theday of19 , and ending on theday of19 (both days inclusive) and for such further period or periods as may be mutually agreed upon, any employee in the Employer's immediate service shall sustain any personal injury by accident or disease while engaged in the service of the Employer in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands, in work forming part of or process in the business above mentioned, and in case the Employer shall be liable to damages for such injury, either under or by virtue of the Common Law, the Fatal Accidents Acts 1846 to 1908, or the Law Reform (Miscellaneous Provisions) Act 1934, the Company will indemnify the Employer The Schedule required a description of the insured companys employees and their estimated total wages, salary and other earnings. Condition 1 of the policy further provided that: the Employer shall truly record in a wages book the name of every employee and the amount of wages, salary and other earnings paid to him. Second Wording (late 1950s to 1960s): Whereas the Employer . carrying on the business described in the . Schedule has made . a written proposal and declaration, containing particulars and statements which it is hereby agreed are the basis of this Contract . and has paid the premium mentioned in the Schedule, which premium is subject to adjustment as hereinafter provided, this Policy witnesseth that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in work forming part of the process in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease The policy provided that the Company should not be liable under it in respect of accidents occurring elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. The policy provided that premiums were to be regulated by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with a wages book being kept open to inspection for that purpose and the employer supplying the correct amounts within one month of the expiry of each insurance period. Condition 1 and the Schedule were in similar form to those in the first wording. Third Wording (1970 to 1976) After a recital in the same form as the second wording, this wording provided: that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease Under the third wording, there was the same territorial limitation as under the second wording in relation to accidents occurring elsewhere than in Great Britain, etc. Premiums were also regulated by reference to wages, salaries, etc. and condition 1 and the Schedule were in the same terms as in the second wording. (2) Independent Sole wording in Issue (1972 to 1987): This was a Contractors Combined Policy, covering Employers Liability (section 1), Public Liability (section 2) and Loss of or Damage to Contract Works (section 3). It provided: NOW THIS POLICY WITNESSETH that during the Period of Insurance or during any subsequent period for which the Company may accept payment for the continuance of this Policy and subject to the terms, exceptions and conditions contained herein and or endorsed hereon, the Company will indemnify the Insured as hereinafter specified. SECTION 1 EMPLOYERS' LIABILITY If any person who is under a contract of service or apprenticeship with the Insured shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule the Company will indemnify the Insured against all sums for which the Insured shall be liable at law for damages for such injury or disease The Policy provided that the Company was not to be liable for injury, illness, loss or damage caused elsewhere than in Great Britain, the Isle of Man or the Channel Islands. As a result of the ELCIA 1969 making insurance in respect of employers liability compulsory, the Independent wording also contained the further provision (the ELCIA extension provision): "AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY The indemnity granted by section 1 of this Policy is deemed to be in accordance with the provisions of any law relating to compulsory insurance of liability to employees in Great Britain. It is agreed the Insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the provisions of such law. " The policy Schedule contains spaces for entry of first, annual and minimum premium, as well as of the name of the Principal for whom the insured is undertaking work, the details of the contract or type of work covered by the policy and its situation. Condition 7 provides that the premium is based on estimates provided by the Insured, for record keeping, for the supply of updated information as required by the Company within one month of the expiry of each insurance period and for adjustment of the premium on that basis. (3) MMI First Wording (1949 to 1958) the Company hereby agrees that if at any time during the period of insurance specified in the schedule or thereafter during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified in the said schedule, or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any personal injury by accident or disease arising out of and in the course of his employment by the Insured in their activities described in the schedule and if the Insured shall be liable to pay damages for such injury or disease then, subject to the terms and conditions contained herein or endorsed hereon, the Company shall indemnify the Insured against all sums for which the Insured shall be so liable The policy was expressed not to apply to or include liability in respect of injury or disease caused elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. Condition 5 regulated premiums by reference to wages, salaries, etc, and made provision for a wages book and adjustment to like effect to the Excess second wording. The policy Schedule provided for the classification of staff and employees according to departments and job description, with corresponding figures for estimated total remuneration. Second Wording (1958 to 1974) the Company hereby agrees that if at any time during the First Period of Insurance specified in the said Schedule or during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified as the Renewal Premium in the said Schedule or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any bodily injury or disease arising out of and in the course of his employment by the Insured in the Insured's activities described in the said Schedule and if the Insured shall be liable to pay damages for such injury or disease or for death resulting from such injury or disease then, subject to the terms, exceptions and conditions contained herein or endorsed hereon or set out in the Schedule to this Policythe Company will indemnity the Insured against all sums for which the Insured shall be so liable. Like the first wording, this wording contained a territorial exclusion of liability in respect of injury or disease caused elsewhere than in Great Britain, etc. The policy Schedule provided for the entry of the Estimates (if any) on which the premium is calculated, including in particular any such estimate of wages, salaries, etc. paid to staff, and cross referred to condition 7, which provided that, if the premium had been based on any estimates, an accurate record should be kept (of actual amounts), the insured should provide insurers with such particulars and information as might be required within one month of the expiry of the policy period and the premium adjusted accordingly. Third Wording (1974 to 1992) The Company agrees to indemnify the Insured in respect of all sums without limit as to amount which the Insured shall be legally liable to pay as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any person under a contract of service or apprenticeship with the Insured when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The policy Schedule contemplated a premium adjustable in accordance with condition 5, which in turn provided (in like manner to condition 7 of the second wording) for the adjustment of any premium so calculated by reference to actual amounts at the end of the policy period. (4) BAI First Wording (1953 to 1974) . the Company willindemnify the Insured against all sums of money which the Insured may become liable to pay to any Employee engaged in the direct service of the insured or any dependent of such Employee in respect of any claim for injury sustained or disease contracted by such Employee betweenandboth inclusive The policy carried the note: This policy does not cover the insureds liability for accidents to workmen arising outside the United Kingdom. Conditions 1 and 2 made elaborate provision for the regulation of premiums by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with pay sheets and books of account being kept open to inspection for that purpose and the employer making a return, and the premium being adjusted, subject to a minimum, at the end of each insurance period. Second Wording (1974 to 1983) the Company willindemnify the Insured against all sums of money which the Insured may become legally liable to pay in respect of any claim for injury sustained or disease contracted by any person engaged in and upon the service of the Insured and being in the Insured's direct employment under a Contract of Service or Apprenticeship between theday ofand theday ofboth inclusive This wording also excluded insurers from liability in respect of accidents to employees arising outside the United Kingdom. Like the Independent and third MMI wordings, the BAI second wording also included the ELCIA extension provision. Conditions 1 and 2 provided for the regulation and adjustment of premiums by reference to actual wages, salaries, etc. during each insurance period, in like terms to conditions 1 and 2 in the first wording. (5) Zurich The Municipal First Select wording (1993 to 1998) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury sustained during the Period of Insurance by any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The Municipal Second Select wording (1998 ) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury caused during the Period of Insurance to any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The tariff wording (1948 ) if any person under a contract of service or apprenticeship with the Insured shall sustain any personal injury by accident or disease caused during the period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned and if the Insured shall be liable to pay damages for such injury or disease the Association shall indemnify the Insured against all sums for which the Insured shall be so liable. LORD CLARKE Like other members of the Court, I agree with Lord Mance on the construction issue. Thus I agree that, for the purposes of the EL policies, mesothelioma is sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the asbestos fibre or fibres which cause the disease. I do not wish to add to Lord Mances reasoning on the construction issue. I do however wish to add some words of my own on the causation issue which sharply divides Lord Phillips and Lord Mance. I wish to say shortly why I prefer the conclusion of Lord Mance to that of Lord Phillips. As I see it, the effect of Fairchild, Barker and Sienkiewicz may be summarised in this way. An employer who, in breach of duty, has exposed an employee to asbestos is liable in damages if the employee subsequently suffers the disease. The employees cause of action is not that he was exposed to the risk of mesothelioma. He has no claim unless he in fact suffers the disease. It is the disease which represents the damage which completes the cause of action and it is only then that his cause of action accrues and the relevant time limit begins to run. It is axiomatic that, in order to succeed in tort, the employee must show a sufficient causal link between the breach of duty, namely the exposure to asbestos, and the disease which represents the damage, namely mesothelioma. The effect of the majority opinion in Barker is that, where there are two or more employers who have exposed the claimant to the risk of mesothelioma, they are not jointly and severally liable to the claimant for the whole of the consequences of the disease but only severally liable for an aliquot part. That decision was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences. The question in this appeal is whether the employers liability insurers are liable to indemnify the employers in respect of that liability. It would in my opinion be a remarkable result if they were not. Lord Phillips notes at para 109 that Mr Edelman QC accepted that, if the correct analysis of the special rule, which (using Lord Phillips definitions) was the result of the combined effect of the special approach in Fairchild and Barker and the Compensation Act 2006, was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust, the insurers would be liable. Lord Phillips accepts that that concession was correctly made. I agree, for the reasons he gives at paras 109 to 114. The question is therefore whether the correct analysis of the special rule is indeed that the employers were deemed to have caused the mesothelioma. I accept that in such a case the employee cannot show on the balance of probabilities that the employers negligence caused the disease. The effect of Fairchild and Sienkiewicz was however that the employer is liable where the exposure contributed to the risk that the employee would suffer the disease and where the employee in fact suffers the disease. That is not in dispute. Lord Phillips says at para 124 that the majority in Barker drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease. He quotes para 2 of Lord Hoffmanns speech as follows: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Phillips further notes that at para 125 Lord Hoffmann advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. See also the passages to like effect referred to by Lord Mance at para 61. I accept that Lord Hoffmann and others did indeed advance that view of Fairchild but it is I think important to note that it was in the context of the question whether, in a case of two or more employers, each was severally liable for a proportion of the consequences of the mesothelioma or whether each was jointly and severally liable for the whole. Lord Hoffmann cannot have intended to hold, without more, that the basis of liability was the wrongful creation of the risk or chance of causing the disease because there would be no liability at all but for the subsequent existence of the mesothelioma. It seems to me that, whether the majority in Barker were correct or not, there is no escape from the conclusion that, in all these cases, where it is not possible to show that the particular employer caused the claimant to suffer mesothelioma, the underlying question is who should be held responsible for causing the mesothelioma which in fact struck down the employee. None of the cases is authority for the proposition that causation is irrelevant. On the contrary, the quest is for the employer who can fairly be held liable for the consequences of the disease and therefore for the employer who can fairly be said to have caused the disease. The courts have embarked on similar quests over the years. Lord Mance has given a number of examples. As Lord Mance shows at para 56, they include Bonnington and McGhee, where Lord Reid was prepared to take a broad view of causation and Lord Wilberforce rejected a traditional approach for policy or evidential reasons. In my opinion the reasoning in Sienkiewicz is of some significance in this context. Lord Mance has given the relevant references in para 61. Thus, as Lord Mance observes, at para 61 Lord Phillips said that Fairchild and Barker had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances. Lord Mance further refers to Lord Brown speaking of a more relaxed approach to causation and flexibility in the approach to causation at paras 178 and 187. Lord Mance had himself referred to Fairchild and Barker as involving a special rule of causation at para 188, and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims at para 196 and to adjustments in the burden of proof at paras 198 and 200. Again, as Lord Mance observes at para 61 above, Lord Dyson referred (at para 207) to materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Both Mr Beloff QC and Mr Stuart Smith QC addressed these issues in their oral submissions. They both in effect submitted that the effect of Fairchild, Barker and Sienkiewicz was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust. They both recognised that the ordinary rule of causation could not apply and that some element of policy or doctrine was required in order to explain Fairchild. Mr Stuart Smith submitted that the effect of Fairchild was that each material exposure to asbestos dust is doctrinally held responsible for the mesothelioma. Mr Beloffs submission was to much the same effect. He relied upon a dictum of Lord Walker in Barker at para 109: A rule of law by which exposure to risk of injury is equated with legal responsibility for that injury entails the possibility that an employer may be held liable for an injury which was not in fact caused by that exposure (though in the present state of medical science, that fact can be neither proved nor disproved). The injury is of course the mesothelioma, which is necessary to complete the cause of action. On that basis it seems to me that Lord Walkers statement that the risk of injury is equated with legal responsibility for the injury is in effect to say that, by creating the risk of mesothelioma in the future, the employer is deemed to have caused the mesothelioma, if it should develop in the future. It appears to me that these conclusions are supported by Lord Mances analysis of section 3 of the Compensation 2006 at paras 67 and 68, with which I agree and to which I do not wish to add anything. Given Mr Edelmans concession that, if that is correct, the employers are liable under the policies (and this Courts acceptance of it) I would hold that the causation point does not assist the insurers. I would only add this. It appears to me that, once it is held that, on these facts, the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies. Rather as in AXA, the whole purpose of the policies was to insure the employers against liability to their employees. That purpose would be frustrated if the insurers submissions on this point were accepted. I agree with Lord Mance, for the reasons he gives at paras 69 73 that these policies respond to these claims. For these reasons, I too would dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD DYSON I too agree with Lord Mance on the construction issue. As to the causation issue, I agree with the reasoning of Lord Mance and Lord Clarke. Accordingly, I would dismiss the appeals by insurers in so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD PHILLIPS Introduction So called long tail industrial diseases have raised peculiar difficulties in the field of tort. These diseases result from the effect on the body of exposure to noxious substances. The effect can be long, drawn out and mysterious, in as much as medical science has not yet identified the precise mechanism, or chain of causation, by which the noxious substance causes the disease. Mesothelioma is a long tail disease in which the problems raised have been particularly acute. The problems arise in the application of principles of law that do not ordinarily give rise to difficulty. An employer will be liable in damages if by an act or omission that is negligent or in breach of statutory duty he causes physical harm to an employee. In the vast majority of cases there will be no difficulty in identifying the moment at which the negligence or breach of duty causes the physical harm, for the harm will take the form of an obvious injury. This is not the position in respect of mesothelioma. Asbestos dust, inhaled into the lungs, is the agency that causes mesothelioma, but as long as forty or fifty years may elapse before the effects on the body of dust inhaled culminate in symptoms of mesothelioma. Once the symptoms are felt, the disease will develop swiftly to bring about an inevitable and extremely unpleasant death. Where a victim of mesothelioma was exposed to asbestos dust over a period of years it is impossible, even with hindsight, to determine on balance of probabilities whether dust inhaled in a particular year caused or contributed to the development of the mesothelioma. It follows that, where the victim worked for a series of employers, each of whom exposed him to asbestos dust, it is impossible to prove on balance of probability that any particular employer caused or contributed to the victims mesothelioma. This means that the normal principles of the law of tort provide no remedy to the employee or his dependants. The manifest injustice of this position led the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572 to create what I shall describe as a special approach to causation in respect of mesothelioma, whose effect was immediately varied by Parliament by section 3 of the Compensation Act 2006. I shall describe the composite result achieved by the House of Lords and Parliament as the special rule. I shall examine the nature of this special rule in due course. Its effect was, however, to place each employer in the same position as that employer would have been under at common law if it were proved, on balance of probability, that its negligence or breach of duty in exposing the employee to asbestos dust had contributed to causing the employees mesothelioma. These developments of the law of tort have formed the backdrop to the issue that has occupied almost all of the eight days that this Court has devoted to this appeal. I shall call this issue the construction issue. The construction issue relates to the true construction of a number of policies of insurance against employers liabilities (EL policies) with similar, but not identical, provisions as to the cover provided. The EL policies provided cover by reference to specific periods usually of a year. The central issue relates to the event or events that, on true construction of each policy, had to occur within the period of the policy in order to render the insurer liable to indemnify the employer in respect of liability for causing an employees mesothelioma. The policies provided cover in respect of diseases sustained or contracted during the period of the policy. The meaning of each of those words, in its context, lies at the heart of the construction issue. It does not seem that the construction issue initially received a great deal of consideration. Insurers treated the policies as if they covered an employer whose breach of duty within the period of the policy had contributed to causing the disease and regarded this requirement as satisfied if the employer was held liable because he had exposed the employee to asbestos dust during that period. Where more than one insurer was liable on this basis, they apportioned liability according to the period of exposure covered by each. The attitude of four of the five insurers party to this appeal changed as a result of the decision of the Court of Appeal in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50; [2006] 1 WLR 1492. Those insurers are MMI, Excess, BAI and Independent, each of which is in run off. I shall describe them collectively as the insurers. Their opponents I shall describe collectively as the employers, although they embrace solvent employers, individuals claiming under the Third Party (Rights against Insurers) Act 1930, and Zurich, which has a community of interest with these. Bolton concerned the scope of cover of a public liability policy (PL policy) in relation to liability for causing mesothelioma. The policy provided cover in respect of an injury that occurs during the currency of the policy. The argument proceeded on the premise that the chain of causation of mesothelioma, once it was diagnosed, could be traced back to the initial inhalation of asbestos dust. The issue was whether the mesothelioma could properly be said to have occurred at the time of the initial inhalation. The Court of Appeal held that it could not. The injury only occurred, at earliest, at the stage of development of the disease at which malignancy occurred. This was, on the evidence, ten years, give or take a year, from the date on which it became possible to diagnose the existence of the tumour but very many years after the initial inhalation of asbestos dust. This decision led the insurers to take the point that a similar approach should be taken to the interpretation of the cover afforded by the EL policies. Mesothelioma was not, on true construction of the policies, sustained or contracted at the time of the initial inhalation of asbestos dust. It was only sustained or contracted at the much later stage when, as a consequence of the process initiated by asbestos dust, an actionable injury in the form of malignancy, developed. Before Burton J, the Court of Appeal and this Court the construction issue has been argued at great length and in great detail. I agree, as do the other members of the Court, with the conclusions reached by Lord Mance on the construction issue. These conclusions have application not merely to mesothelioma but to employers liabilities in relation to other long tail industrial diseases such as asbestosis and pneumoconiosis. For the purpose of EL policies, these diseases are sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the noxious substance that causes, or contributes to the cause or the extent of, the disease. Throughout the hearing of this appeal there has lurked a second issue. It has not been the subject of argument below, nor does it feature in the agreed Statement of Facts and Issues. This is, perhaps, because it relates to a point that does not arise out of Bolton. It has always been there for the taking, but insurers have not hitherto chosen to raise it, perhaps because its consequences are unattractive. It arises out of a problem that is similar to that which led the House of Lords to formulate the special approach in Fairchild and Barker. It is not possible for an employer to prove that an employees mesothelioma was, in fact, caused in whole or in part by any particular period of exposure to asbestos dust. Thus the employer cannot prove, on balance of probability, that the mesothelioma for which he has been held liable under the special rule was, in fact, initiated in any particular policy year. How, then, can he prove that his liability falls within the scope of the cover, even if the policy bears the construction contended for by the employers and upheld by this Court? How can he prove that his liability arises out of disease sustained or contracted within the policy period, giving these words the same meaning as initiated? I shall call this issue the causation issue. The causation issue and the judgments below Although the causation issue was not raised in argument below, it was dealt with, at least implicitly, in the judgments of both courts. Burton J at first instance, and Rix and Stanley Burnton LJJ in the Court of Appeal proceeded on the basis that, in the case of a mesothelioma victim, exposing the victim to asbestos dust could be treated as equivalent to causing his disease. This approach was based on the special rule. Thus Burton J at paras 42 to 58 summarised, without significant comment, what he described as the special mesothelioma jurisprudence as it was at the time of his judgment. This included Fairchild, Barker and the 2006 Compensation Act. He thereafter proceeded on the basis that exposing a mesothelioma victim to asbestos dust could be treated as having been equivalent to causing the victim to contract the disease. Thus, when summarising his conclusions at para 243 he said: I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an exposure basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. Rix LJ drew a distinction between the meaning of contracted and sustained. Contracted referred to the time of the diseases causal origins para 245. He felt constrained by Bolton, however, to hold that no injury was sustained until the disease reached the malignant stage. Implicit in his judgment was the premise that exposure to asbestos dust during the period of the policy could be treated as the causal origin of the disease see for example his comments at para 244. A difficult passage in his judgment at paras 280 283, when considering the meaning of injury, suggests that this premise was founded on the special rule. Thus he was able to conclude that the disease was contracted at the time that the victim was exposed to asbestos dust albeit that injury was not sustained at that point. In a short judgment Stanley Burnton LJ adopted similar reasoning. He stated, at para 338: We are agreed that in any year in which there was substantial exposure to asbestos, mesothelioma was caused by that exposure during that year. The fact that the disease did not develop for some years does not break the chain of causation. Submissions on the causation issue The causation issue was not raised by the insurers as a discrete issue. It none the less surfaced in a passage of the written case for Excess that was addressing the employers case that personal injury by disease was sustained at the moment of inhalation of asbestos dust that triggered the process of sustaining personal injury by disease. One of the arguments advanced by Excess in answer to this submission read as follows: Medically and empirically, one cannot be said to have suffered an injury on a particular day because it cannot be known in (say) a 10 year occupational exposure period on which of the 3652 days the fatal dose was inhaled (and it may be on more than one). It is likely that any ingestion on a particular day was irrelevant to the development of the final condition. There has been a tendency on the part of the claimants to treat inhalation as a single event from which an unbroken line can be drawn to malignancy. It is not. Inhalation (and hence on this theory) injury may occur over several thousands of days. Each day does not bring injury. Any particular day cannot therefore be selected as injury day. To overcome problems of medical causation in a personal injury action against an employer, the House of Lords extended the McGhee principle to mesothelioma in Fairchild. However this was a rule of causation and not definition. There is no such rule in insurance policies which defines what amounts to an injury. The Supreme Court in Sienkiewicz stressed the limits of the Fairchild exception in no uncertain terms, and it is submitted that it would be quite wrong for it now to invade the law of contract. A liability policy responds only to indemnify against a liability (i.e. actionable injury). There is no such liability on inhalation. Injury occurs when the claimant has a personal injury by disease. Thus Excess took the point that the special rule could not properly be invoked to establish that, on true construction of the contracts of insurance, injury was sustained upon inhalation of asbestos dust. This passage appeared after a submission at para 209 that it was only possible to equate the inhalation of a culpable quantity of asbestos dust with sustaining personal injury by disease by, inter alia, creating a special rule governing the response of EL policies in respect of mesothelioma, and possibly other long tail diseases. This proved to be what counsel for the employers sought to do when invited by the Court to address the causation issue. They did so in short oral submissions that cannot, when taken together, have occupied more than half an hour of the eight day hearing. The relevant submissions made by Mr Beloff QC for Akzo and AMEC and the Local Authorities are reported at pp 120 122 of the transcript for 15 December 2011. He started by observing that we had to cut the Gordian knot. He suggested that we should do so by equating creation of a risk with causing bodily injury. This he submitted was permissible because the object of the policy was to provide cover to an employer who, in breach of duty to employees, caused them compensatable damage. Were this approach not adopted, it would be impossible to show that any of a number of insurers providing cover over a period of years was liable. The law should rebel against such a result. In support of this submission Mr Beloff cited a statement by Lord Walker of Gestingthorpe in Barker at para 109 suggesting that the special approach to mesothelioma equated the exposure to the risk of injury with legal liability for the injury. Mr Stuart Smith QC for Zurich dealt with the causation issue at rather greater length in a passage reported at pp 126 to 131 of the same transcript. He started by accepting that it was impossible to know when the metabolic changes that led to the development of mesothelioma in fact occurred. Fairchild dealt with this problem by creating a doctrinal rule under which each significant exposure to asbestos dust was held to be responsible for the mesothelioma. Thus doctrinally the process of developing mesothelioma started upon inhalation. This doctrinal framework for the application of the law of tort was that within which policies of insurance against tortious liability had to operate. Mr Stuart Smith agreed with this summary of his argument advanced by Lord Mance: If the law of tort treats someone, an employee, as having sustained a personal injury and treats the employer as liable to pay damages for such personal injury, then the policy answers. These submissions on behalf of the employers raise the following questions: i) Will the policies respond to fictional or doctrinal events that are deemed to have occurred under the special rule? If so: ii) Does the special rule deem that events have occurred to which the policies should respond? If not: iii) Can this Court properly reformulate the special rule in such a way as to require the policies to respond? Will the policies respond to fictional or doctrinal events? On the premise that he failed on the construction issue, Mr Edelman accepted that, if the correct analysis of the special rule was that the employers were deemed to have caused the mesothelioma by exposing the victims to asbestos dust, then the policies should properly respond. Because of the view that I take of the next two questions I do not need to decide whether the concession was properly made. I have, however, concluded that it was. The policies exist to provide protection against employers liability in tort. If the law of tort, whether laid down by the courts or by Parliament, resorts to legal or doctrinal fictions, it seems logical that the policies should respond as if the fictions were facts. A purposive approach to construction of the policies would lead to this result. Two examples illustrate this approach. Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 involved a policy of insurance against liability under the Workmens Compensation Act 1925. The terms of the policy entitled the employer to indemnity if at any time during the currency of the insurance any employee sustained any personal injury by accident or disease. The 1925 Act imposed a fictitious test for identifying when an industrial disease was sustained, namely the date on which a certifying surgeon issued a certificate that the employee was suffering from the disease. On the strength of a certificate issued within the currency of a policy of insurance an employer was held liable to two workmen who had, in fact, sustained the relevant disease before the period of the insurance began. The Court of Appeal held that this liability fell within the cover of the policy. The argument for applying the fictional date was a strong one because, as Greer LJ observed at p 417, the policy was intended to cover the employers liability under the Act. The parallel between Ellerbeck and the present case would have been stronger had the relevant policies been taken out after the special rule had been created. In Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281 the House of Lords held that pleural plaques caused by exposure to asbestos dust did not constitute actionable injury because they produced no adverse physical effects. The Scottish Parliament responded to this decision by introducing the Damages (Asbestos related Conditions) (Scotland) Act 2009 (the Scottish Act). That Act provides by section 1 that asbestos related pleural plaques constitute a personal injury which is not negligible and that accordingly they constitute actionable harm for the purpose of an action for damages for personal injury. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [2011] 3 WLR 871 the Supreme Court rejected a challenge by insurers to the lawfulness of this Act. The Scottish Act effected a limited alteration to the common law in decreeing that asymptomatic pleural plaques constituted non negligible personal injury and thus actionable damage. Lord Mance at para 88 suggested that the main target of the legislation was employers insurers. He went on at para 89 to consider whether the Act would, in fact, alter the meaning to be given to bodily injury under a policy of insurance: A Scottish Act will not on the face of it change the legal effect of an English insurance contract, even in Scotland. However, depending upon the particular policy language, the scope of the concept of bodily injury under a worldwide policy may respond to different conceptions of bodily injury in different parts of the world. Here, the question would be whether it would respond to a development or change, such as that introduced retrospectively by the 2009 Act, in the conception of bodily injury. I say no more about the answer, which may be elicited in another context or suit. While Lord Mance left open the effect of the Scottish Act on the construction of policies of liability insurance, Lord Brown was in no doubt that the effect of the Scottish Act was to subject insurers to liabilities to which they would not have been subject prior to that Act. He referred at para 80 to the undoubted, and deliberate, impact of the legislation upon pending claims. Earlier, at para 77, he drew an analogy with the effect of the decision in Fairchild on EL insurers liability: Had the House of Lords in Rothwell decided that asymptomatic pleural plaques of themselves constitute a non negligible personal injury and thus actionable damage decided in other words that in this particular context the common law should develop in this admittedly novel way the appellants would doubtless have deplored the decision but they could certainly not have questioned its legitimacy. No doubt they would have resented the fact that, as a consequence of the decision, they would unexpectedly have had to pay out on claims resulting from the employees exposure to asbestos upwards of 20 years (quite likely up to 40 years) previously. But they could no more have advanced an [article 1, Protocol 1] challenge to this development of the law than they could have challenged the House of Lords decision some four years earlier in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 to adopt a less stringent than the usual but for test for establishing the necessary causal connection between an employers negligence and a claimants condition in, most notably, mesothelioma cases. Employers (and their liability insurers) necessarily take the risk of the common law developing in ways which may adversely affect them with regard to personal injury claims. In this passage Lord Brown assumed that the effect of Fairchild was to bring employers liabilities in respect of mesothelioma within the scope of the cover afforded by EL policies. I am about to consider whether he was correct in this. I agree, however, with the general principle expressed in the last sentence of the extract from his judgment that I have just cited. It is for this reason that I would give an affirmative answer to the first of the three questions posed at para 108 above. I turn to the second. What is the special rule? The employers submissions on the causation issue proceed on the premise that the special rule deems exposure to asbestos dust of an employee who is subsequently diagnosed with mesothelioma to have been a cause of the mesothelioma. I have reached the conclusion that that premise is unsound. In Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 I summarised the special rule as follows at para 1: When a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease. This is certainly the effect of the special rule, but in order to discover the juridical basis of the rule it is necessary first to identify the basis of the special approach adopted by the House of Lords in Fairchild and Barker and then to consider the effect of section 3 of the Compensation Act, which adapted the special approach into the special rule. The special approach In Sienkiewicz, at para 70, I stated that Fairchild and Barker developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances, which include ignorance of how causation in fact occurs. As I shall show, this was not an accurate summary of the special approach adopted in those cases. In Fairchild the House of Lords confronted the position where a mesothelioma victim had worked consecutively for a number of employers, each of which had exposed him to asbestos dust. One or more of these had caused his mesothelioma, but because of the limits of medical knowledge it was not possible, on balance of probability, to identify which. In these circumstances their Lordships adopted a special approach that enabled them to find that each of the employers was jointly and severally liable for the mesothelioma. In doing so they purported to be following a similar approach adopted by the House of Lords in McGhee v National Coal Board [1973] 1 WLR 1. They were not, however, all agreed as to the basis of that approach. Lord Hutton, at para 109, held that it was based on the drawing of a factual or legal inference leading to the conclusion that the breach of duty [in exposing the employee to asbestos dust] was a cause of the disease. The majority of the House did not agree. Lord Bingham said, at para 35: I prefer to recognise that the ordinary approach to proof of causation is varied than to resort to the drawing of legal inferences inconsistent with the proven facts. Lord Nicholls of Birkenhead said, at para 42: So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust, and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. This is sufficient to justify requiring the employer to assume responsibility for causing or materially contributing to the onset of the mesothelioma when, in the present state of medical knowledge, no more exact causal connection is ever capable of being established." Lord Hoffmann at para 65 rejected the suggestion that the House in McGhee held that materially increasing the risk of the disease should be treated as equivalent to material contributing to the injury. He concluded: I would respectfully prefer not to resort to legal fictions and to say that the House treated a material increase in risk as sufficient in the circumstances to satisfy the causal requirements for liability. Lord Rodger of Earlsferry did not agree. His reasoning was close to that of Lord Hutton. He held, at para 168: Following the approach in McGhee I accordingly hold that, by proving that the defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the defendants materially contributed to their illness. What then happened has been summarised by Lord Hoffmann in Perspectives on Causation (2011) at p 8: There are two ways in which one could characterise this change in the substantive law of negligence. One is to say that the causal requirements for an action for damages for mesothelioma have been changed; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent. The other is to say that the House created, exceptionally, a cause of action for the increased risk of mesothelioma rather than for the disease itself. In the former case, satisfying the new causal requirement would entitle the claimant to sue for the whole injury caused by contracting the disease. In the latter case, he would be able to sue only for the loss caused by the risk of his contracting the disease having been increased. That would be a proportion of the injury caused by the disease, depending on the extent to which the risk had also been created by other causes. In Barker v Corus the House of Lords (Lord Rodger of Earlsferry dissenting) adopted the second explanation of what had happened in Fairchild. I believe that this summary of the position is essentially correct. The majority in Barker were persuaded that justice would best be served if the special approach adopted in Fairchild were applied in such a way as to render each defendant who had wrongfully exposed the claimant to asbestos dust severally liable for that proportion of the mesothelioma that represented the proportion of the wrongful exposure attributable to that defendant. This was achieved by holding that the liability of each defendant resulted from adding to the risk that the employee would contract mesothelioma. It did not result from an implication that each defendant had actually contributed to the cause of the disease. At the start of his speech at para 2 Lord Hoffmann drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Hoffmann went on to adopt the latter analysis as the basis of liability in Fairchild. At para 31 he held that the majority in Fairchild had not proceeded upon the fiction that a defendant who had created a material risk of mesothelioma was deemed to have caused or materially contributed to the contraction of the disease. The creation of a material risk of mesothelioma was sufficient for liability. At para 35 he advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. Liability for the mesothelioma that developed should be apportioned according to the contribution that each defendant made to the risk that mesothelioma would be contracted. Lord Scott of Foscote and Lord Walker of Gestingthorpe expressly agreed with both Lord Hoffmanns conclusion that liability for the mesothelioma fell to be apportioned and with his reasons for so concluding. Lord Scott held at para 53 that it was essential to keep firmly in mind that liability in Fairchild was not imposed on any of the defendant employers on the ground that the employers breach of contract had caused the mesothelioma. That causative link had not been proved against any of them. It was imposed because each, by its breach of duty, had materially contributed to the risk that the employee would contract mesothelioma. At para 61 he emphasised that the Fairchild principle was not based on the fiction that each defendant had actually caused the eventual outcome. It was based on subjecting the victim to a material risk. Lord Walker, having stated that he was in full agreement with Lord Hoffmanns reasons went on at para 104 to make a statement that was inconsistent with them, this being to the same effect as the statement relied on by Mr Beloff see para 106 above. Lord Walker stated that the decision in Fairchild equated exposing the victim to the risk of injury with causing his injury. This was the same mistake as I made in Sienkiewicz see para 117 above. Had this been the case, each defendant would have been jointly and severally liable for the injury. Lord Walker went on to say, however, that the result in Fairchild was achieved, not by some fiction, but as an explicit variation of the ordinary requirement as to causation. At para 113 he stated that Fairchild was decided by the majority, not on the fictional basis that the defendants should be treated as having caused the victims damage, but on the factual basis that they had wrongfully exposed him to the risk of damage. Lady Hale did not adopt Lord Hoffmanns thesis that the creation of risk constituted the damage for which each defendant was liable. In general, however, she agreed with the majority. She held that in Fairchild, for the first time in our legal history defendants were made liable for damage even though they might not have caused it at all. It was not said that the defendants had caused or materially contributed to the harm. All that could be said was that each had contributed to the risk of harm. In these circumstances it was sensible and fair to apportion liability for the harm in proportion to the contribution that each had made to the risk of harm. Lord Rodger of Earlsferry vigorously dissented from the reasoning of the majority and from the result in so far as it apportioned liability. He observed at para 71 that the majority were not so much reinterpreting as rewriting the key decisions in McGhee and Fairchild. At para 85 he stated that the new analysis that the House was adopting would tend to maximise the inconsistencies in the law. I have some sympathy with the observations of Lord Rodger. It would, I think, have been possible for the House in Barker to have defined the special approach in Fairchild as one that treated contribution to risk as contribution to the causation of damage. The important fact is, however, that the majority did not do so. They were at pains to emphasise that the special approach was not based on the fiction that the defendants had contributed to causing the mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that mesothelioma would be caused and reflected the possibility that a defendant might have caused or contributed to the cause of the disease. This was no obiter expression of opinion. It formed the basis of the substantive decision that liability was severable and not joint. The special rule The special approach rendered each employer who had wrongfully exposed a mesothelioma victim to asbestos dust liable for a proportion of the mesothelioma without creating any inference or legal fiction that the employer in question had actually contributed to causing the disease. Section 3 of the Compensation Act altered the position by imposing joint and several liability on those who were only severally liable under the special approach. Did the special rule that resulted involve a different basis of liability to that which formed the basis of the special approach? This question is considered by Jonathan Morgan in his interesting Chapter 4 of Perspectives on Causation headed Causation, Politics and Law: The English and Scottish Asbestos Saga. At p 79 he poses the following question: Has Parliament, by implication, therefore also reversed Lord Hoffmanns principled reinterpretation of Fairchild? Is the nature of Fairchild liability now after all for causing mesothelioma and not increasing risk? Mr Morgan gives a negative answer to this question, expressing the view that Barker has altered the jurisprudential basis of the Fairchild liability irrevocably. I agree that section 3 of the Compensation Act did not alter the jurisprudential basis of the special approach laid down by the House of Lords in Fairchild and Barker. All that it did was to alter the effect of the special approach by making each defendant jointly and severally liable for the whole of the injury sustained. Section 3(1) provides that the section applies where (c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure [for which the defendant was responsible]or another exposure which caused the victim to become ill, and (d) the responsible person is liable in tort(whether by reason of having materially increased a risk or for any other reason). It is not possible to read section 3 as imposing a different basis of liability to that identified by the majority in Barker. The consequence of the special rule Having regard to its jurisprudential basis I cannot see how the employers can found upon the special rule as identifying the policy year or years in which a victims mesothelioma is initiated. The position is that it is impossible to prove on balance of probability when mesothelioma is initiated, or contracted, or sustained, giving each of those words the same meaning. The special rule does not fill the gap for it raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. Should this Court redefine the special rule in order to engage the EL policies? The special approach of the majority in Barker had the object of ensuring that employers who had wrongfully subjected their employees to asbestos dust should bear what the majority considered to be a fair share of responsibility for their wrongdoing. It does not seem likely that the majority gave consideration to the implications for the responsibility of EL insurers of the manner in which this object was achieved. Should this Court now redefine the special rule with the object of enabling claims to be brought under the EL policies? This would, I think, involve holding that the majority in Barker erred in their analysis and that the true basis of the special approach in Fairchild was that contribution to risk should be deemed to be contribution to causation. I would give a firm No to this question. The adoption of the special approach in Fairchild has provoked considerable criticism, both judicial and academic. An example of the former is to be found in the judgment of Lord Brown in Sienkiewicz. An example of the latter is Mr Morgans closely reasoned Chapter 4 of Perspectives on Causation. But the object of the special approach in Fairchild and Barker was at least to ensure that those who had breached the duties that they owed to their employees did not escape liability because of scientific uncertainty. It would be judicial law making of a different dimension to create a legal fiction as to the policy years in which cases of mesothelioma were initiated in order to render liable insurers who could not otherwise be shown to be liable. The Secretary of State has intervened in this appeal and has submitted that, should the claims of employees or their dependants not be met by insurers, they are likely to be a burden on the public purse. It is open to question whether this is a proper consideration, even when considering whether the special rule should be redefined for what are essentially reasons of policy. In any event it seems to me that the position is somewhat more complex than the Secretary of State suggests. The burden of claims in respect of mesothelioma on a scale that was never anticipated is reducing both employers and insurers to insolvency. If this Court were to redefine the special rule so as to impose liability for mesothelioma claims on EL insurers where it could not otherwise be made out, this would in many cases be at the expense of others with claims on the same insurers founded on facts and not legal fictions. The liabilities in respect of mesothelioma will increase the overall shortfall on the part of insurers and this is also likely to have implications for the public purse. So far as I am concerned, however, these considerations have little relevance. Even if there were a compelling case for contending that a means should be found to render EL insurers liable, my reaction would be that this was a matter for Parliament not the courts. It would be wrong in principle for this Court to depart from the reasoning of the majority in Barker for the sole purpose of imposing liability on EL insurers.

These appeals concern the obligations of insurance companies under various contracts of employers liability (EL) insurance. In particular, the appeals concern the scope of the insurers obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos. Mesothelioma has an unusually long gestation period, which can be in excess of 40 years between exposure to asbestos and manifestation of the disease. The insurers maintain that the EL policies only cover mesothelioma which manifested as a disease at some point during the relevant policy period. In contrast, the employers submit that the insurance policies respond to mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later. The usual rule in negligence cases is that the claimant must establish on the balance of probabilities that the defendants negligence caused his injury or disease. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 and Barker v Corus UK Ltd [2006] UKHL 20 the House of Lords developed an exception to this general principle in cases involving mesothelioma caused by exposure to asbestos. The effect of this special rule is that an employer is liable where exposure to asbestos contributed to the risk that the employee would suffer mesothelioma and where the employee in fact develops the disease. The insurers submit that the special rule in Fairchild/Barker is not applicable when deciding, for the purposes of an EL insurance policy, whether an employees mesothelioma was caused by exposure to asbestos during a particular policy year. At first instance Burton J held that the policies should all be interpreted as having a causation wording. He therefore held that the liability trigger under the EL policy was when the employee inhaled the asbestos and not the date when the malignant lesion developed. A majority of the Court of Appeal (Rix and Stanley Burnton LJJ) upheld the judge in relation to some of the EL insurance policies (particularly those covering disease contracted during the relevant insurance period); however they concluded that other policies (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. These appeals to the Supreme Court raise two issues: (i) On the correct construction of the EL policies, is mesothelioma sustained or contracted at the moment when the employee is wrongfully exposed to asbestos or at the moment when the disease subsequently manifests in the employees body? (ii) Does the special rule in Fairchild/Barker apply when determining whether, for the purposes of the EL policies, an employee sustained or contracted mesothelioma during a particular policy period? The Supreme Court dismisses the insurers appeal by a 4 1 majority; Lord Phillips dissenting on the second issue. Lord Mance gives the main judgment. To resolve the meaning of the EL policies it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more generally [19]. Several features point the way to the correct construction. First, the wordings of the policies on their face require the course of employment to be contemporaneous with the sustaining of the injury [20]. Second, the wordings demonstrate a close link between the actual employment undertaken during each period and the premium agreed by the parties for the risks undertaken by the insurers in respect of that period. Third, on the insurers case there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to disease or injury in another later period [24]. Fourth, on the insurers case employers would be vulnerable to any decision by the insurers not to renew the policy. A decision not to renew might arise from the employers complying with their duty to disclose past negligence upon any renewal. Employers who discovered that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease would have such a duty. The insurers could then simply refuse any renewal or further cover [25]. Fifth, the way most of the policies deal with extra territorial issues throws doubt on any suggestion that the wordings are so carefully chosen that a court should stick literally to whatever might be perceived as their natural meaning [28]. Section 1 of the Employers Liability Compulsory Insurance Act 1969 also points the way to the correct interpretation. This states that every employer shall insure, and maintain insuranceagainst liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment. In order to give proper effect to the protective purpose of that legislation, the Act requires insurance on a causation basis [47]. There is no difficulty in treating the word contracted as looking to the causation of a disease, rather than its development or manifestation. The word contracted used in conjunction with disease looks to the initiating or causative factor of the disease [49]. While the word sustained may initially appear to refer to the manifestation of an injury, the nature and underlying purpose of the EL insurances is one which looks to the initiation or causation of the accident or disease which injured the employee. Accordingly a disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself later [50]. In relation to the second issue, the question is whether the EL policies cover employers liability for mesothelioma arising under the special rule in Fairchild/Barker [71]. Under that rule the law accepts a weak or broad causal link between the employers negligence and the employees mesothelioma. When construing the EL policies the concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the Fairchild/Barker rule [74]. The purpose of the EL policies was to insure the employers against liability to their employees. Once it is held that the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies [88]. Accordingly, for the purposes of the EL policies, the negligent exposure of an employee to asbestos during the policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurers obligation to indemnify the employer [74]. Lord Phillips dissents on the second issue. The special approach developed in Fairchild/Barker raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. This conclusion is not affected by section 3 of the Compensation Act 2009, which did not alter the jurisprudential basis of the Fairchild/Barker approach [132] [133].

Sigma Finance Corporation (Sigma) and those who invested in it are victims of the current financial crisis. Sigma is a structured investment vehicle, whose business involved acquiring asset backed securities and other instruments, using funds raised by issuing or guaranteeing US dollar and Euro medium term notes (MTNs) as well as liquidity from other sources, such as facilities, derivatives, repurchase (or repo) contracts and capital notes (the last two categories representing its unsecured creditors). All of Sigmas assets are secured in favour of its secured creditors upon the terms of a Security Trust Deed (STD), dated 27 March 2003, made between Sigma as issuer and Deutsche Trustee Company Limited (Deutsche Trustee) as security trustee and governed by English law. The financial crisis affected the value and liquidity of Sigmas assets, as well as its ability to issue notes and raise funds to cover its obligations under previously issued notes and instruments as they matured from time to time. As a result, it began to resort to selling assets, either outright or under repo agreements. The latter involved Sigma in further potential liability to meet margin calls, if and when the value of the assets sold and agreed to be repurchased at some future date fell below a certain level. In September 2008, Sigma received margin calls which it did not honour. On 30 September 2008, its board resolved that it could no longer continue in business, and on 1 October 2008 Sigma wrote informing Deutsche Trustee as security trustee that it had resolved that there was no reasonable likelihood of Sigma avoiding an insolvent liquidation and that there had been non payment of interest due on 30 September 2008 constituting a Potential Enforcement Event for the purposes of the Security Trust Deed. On 2 October 2008 one of Sigmas liquidity providers gave notice of an event of default under its facility agreement. In consequence, an actual Enforcement Event occurred and the floating charge created under clause 4.1 of the Security Trust Deed crystallised on that date, and the liquidity facility was also cancelled. On 6 October 2008 the Security Trustee appointed Receivers under clause 14.1 of the Deed, and directed them to comply with clauses 7.6 to 7.9 of the Deed as if references in those clauses to the Security Trustee were references to the Receivers. Under the Security Trust Deed, the occurrence of an Enforcement Event started a 60 day Realisation Period, and triggered an obligation on the Trustee to use its reasonable endeavours to establish by the end of that period a Short Term Pool (for Short Term Liabilities, defined by clause 1 to cover outstanding payment obligations which are due 2 and payable or which have scheduled maturity or payment dates falling less than 365 days from the Enforcement Date), as well as a number of Long Term Pools (for any liabilities . which are not Short Term Liabilities) and a Residual Equity Pool. Following realisation of its remaining portfolio in December 2008 after the Court of Appeal had given judgment and refused a further stay, Sigmas assets consist of cash of no more than around US$450m. Sigmas unpaid secured liabilities are estimated to total around US$6.2bn. They include (a) about US$900,000, representing coupon payments on notes which fell due on 30 September and 1 October 2008, (b) about US$1.350bn, representing principal and coupon payments on notes which fell due during the Realisation Period, (c) about US$3.134bn, representing principal on notes constituting Short Term Liabilities falling due between 30 November (i.e. after the end of the Realisation Period) and 1 October 2009 and (d) about US$1.511bn, representing principal on notes constituting Long Term Liabilities falling due after 2 October 2009. As is evident, Sigmas remaining assets fall far short of the liabilities included in (a) and (b), or in (b) alone. The issue on these appeals is how Sigmas remaining assets are to be distributed. This is an issue of construction of the Security Trust Deed. Secured creditors are under the terms of their notes precluded from seeking to wind up Sigma, and the Security Trust Deed defines their contractual rights against Sigma and in respect of its assets. Four interested creditors have advanced various possibilities. Interested parties A and B submit that the assets fall to be distributed preferentially to the creditors in respect of the debts identified in (b), or in (a) and (b). Assuming that to be right, they differ between themselves as to priority. Mr Howard QC representing interested party A submits that the assets are to be distributed according to the dates when the relevant debts became due, while Mr Sheldon QC representing interested party B submits that all debts falling due in (or prior to) the Realisation Period are part of a single pool, within which Sigmas remaining assets fall to be distributed pari passu. Mr Mortimore QC representing interested party C and Miss Prevezer QC representing interested party D maintain, first, that Sigmas remaining assets fall to be allocated equitably as between Short and Long Term Liabilities, and, secondly, that, having been so allocated, its Short Term Liabilities identified in (a), (b) and (c) fall in effect to be distributed pari passu in relation to each other, and that its Long Term Liabilities identified in (d) fall to be treated likewise in relation to each other. Sales J and, by a majority, the Court of Appeal accepted the case advanced by Mr Howard for interested party A. Lord Neuberger 3 dissented, concluding that the case advanced by interested parties C and D was generally correct, but with the refinement that creditors with debts falling due in the Realisation Period were entitled to be paid within that period such amount as the Trustee was confident would ultimately be paid to them out of the Short Term Pool, with any balance due being paid later from that Pool. Against the decision of the majority, these appeals are brought by leave of the House of Lords. The Security Trust Deed The appeals turn ultimately on the meaning given to the final sentence of clause 7.6 of the Deed. But this needs to be set in its context. Clause 7 is long and detailed, and provides inter alia: 7. ENFORCEMENT 7.1 The Security Trustee shall be entitled to enforce the Security on and from the Enforcement Date only in accordance with this Clause notwithstanding any contrary instruction or direction from any Beneficiary or any other person. The Security Trustee shall not exercise any of its powers under this Clause until the Enforcement Date. 7.2 Without prejudice to any rule of law which may have a similar effect, the floating charge constituted by Clause 4.1.2 shall on the Enforcement Date automatically be converted with immediate effect into a fixed charge as regards the assets subject to such floating charge and without notice from the Security Trustee to the Issuer. 7.3 On the Enforcement Date or as soon thereafter as can practicably be arranged the Security Trustee shall (to the extent that the relevant Liquidity Facility has not been cancelled by the relevant Liquidity Provider) on behalf of, and as attorney for, the Issuer draw Advances under each Liquidity Facility up to the Available Amount and shall specify repayment dates (except in the case of Swing line Advances) for such Advances falling after the Realisation Period. If the Issuer has Committed Liquidity (as defined in the IMC) and more than one Liquidity Facility, the Security Trustee shall ensure that, as between Liquidity Facilities, any drawings are made pro rata to the aggregate available commitments under such Liquidity Facilities. Advances drawn shall be used in order (i) to discharge the Issuers obligations to pay sums due and owing to Beneficiaries in accordance with the relevant Beneficiaries Documents and (ii) to effect replaying of any Advance made 4 under a Liquidity Facility. If and to the extent that all or any part of the Advances drawn down are not immediately required by the Security Trustee for the purposes of (i) or (ii) above, the Security Trustee shall deposit the unutilised portion(s) of such Advances on a call basis with any bank or financial institution whose short term unsecured, unguaranteed and unsubordinated debt is rated A 1 by S&P, P 1 by Moodys and F1 by Fitch or shall invest such portion(s) in certificates of deposit, United States or United Kingdom government securities or commercial paper rated A 1 + by S&P and P 1 by Moodys. If the Security Trustee applies an Advance (or part 7.4 thereof) to discharge any of the Issuers Short Term Liabilities because of the default, late payment or non performance of any Asset in the Short Term Pool (a non performing asset) any monies subsequently recovered or received in respect of such non performing asset shall be applied by the Security Trustee in repayment (or part payment) of such Advance before being applied pursuant to the trust declared in Clause 7.11.2. 7.6 The Security Trustee shall use its reasonable endeavours (and in doing so may rely upon the advice of any investment or other advisers as it shall in its absolute discretion consider appropriate and shall not be responsible for any loss which results from such reliance) to establish by the end of the Realisation Period a Short Term Pool, a number of Long Term Pools (one in relation to each Series of EMTNs each Series of ADMTNs and each Series of USMTNs, and one in relation to each other group of Long Term Liabilities having the same payment and/or maturity dates), and a Residual Equity Pool. In order to establish such Pools, the Security Trustee shall during Realisation Period (but not thereafter) realise, dispose of or otherwise deal with the Assets in such manner as, in its absolute discretion, it deems appropriate. During the Realisation Period the Security Trustee shall so far as possible discharge on the due dates therefor any Short Term Liabilities falling due for payment during such period, using cash or other realisable or maturing Assets of the Issuer. 7.7 The Security Trustee shall use its reasonable endeavours (and in doing so may rely upon the advice of any investment or other advisers as it shall in its absolute discretion consider appropriate and shall not be responsible for any loss which results from such reliance) to ensure that at the time the Short Term Pool and each Long Term Pool is established (1) 5 the aggregate principal amount of the Assets allocated to each such Pool is equal to the aggregate principal amount of the liabilities to which such Pool has been allocated, (2) the Assets allocated to each such Pool have maturity and payment dates corresponding to the relevant liabilities and (3) payments, recoveries and receipts in respect of the Assets allocated to each such Pool are scheduled to be made or received in the currency in which the relevant liabilities are denominated and (4) the aggregate principal value of Assets rated AA/Aa or lower (or if the Asset has a short term rating, A 1 + or lower) issued or guaranteed by any one single body corporate or sovereign or by separate bodies corporate which are members of the same group does not exceed an amount equal to 50% of the Residual Equity Pool Stake attributable to such Short Term Pool or, as the case may be, Long Term Pool and (5) the aggregate principal value of Assets rated A (or if the Asset has a short term rating, A 1/P 1) issued or guaranteed by any one single body corporate or sovereign or by separate bodies corporate which are members of the same group does not exceed an amount equal to 50% of the Residual Equity Pool Stake attributable to the Issuers Short Term Liabilities or, as the case may be, those of its Long Term Liabilities in relation to which a Long Term Pool is established. The Security Trustee shall also use its reasonable endeavours to ensure that the credit quality by rating category and percentage of Assets comprising the Short Term Pool and each Long Term Pool is the same or better than the following: Long Term Rating Short Term Rating Percentage by Principal Value of Short Term/ Long Term Pool AAA (S&P)/Aaa Minimum 20% AA (S&P)/Aa A 1 + (S&P) Minimum 50% A A 1/P 1 Maximum 30% 7.8 Subject to Clause 7.7, it is a matter for the Security Trustees absolute discretion which Assets are allocated to 6 which Pool and no liability shall attach to the Security Trustee if its allocation of Assets between Pools proves to be unfavourable or disadvantageous to any person. Provided that the Security Trustee uses its reasonable endeavours as provided in Clause 7.7, no liability shall attach to the Security Trustee if the purpose for which such endeavours were to be made fails to be realised and the Security Trustee shall be under no liability to any Beneficiary if the Assets allocated to any Pool are insufficient to meet the liabilities of the Issuer to which such Pool related in full or in a timely manner, notwithstanding that the claim of any other Beneficiary shall have been discharged in full. For the avoidance of doubt, the Security Trustee shall not be obliged to ensure that each Pool complies with the criteria set out in the Second Schedule to the IMC. Subject to the above and to Clause 7.7, the Security Trustee (i) shall have no regard to the credit quality of each Asset when establishing the Short Term and Long Term Pools and when determining which Assets should be allocated to which Pool and (ii) shall not be concerned with the ultimate composition of each of the Short Term Pool and Long Term Pools with regard to the concentration of assets by rating category nor to the spread across the Pools of Assets of any given rating category. 7.9 If the principal amount of the Assets is less than the principal amount of the Issuers Total Indebtedness, the Security Trustee shall calculate the proportion borne by the deficit to the Issuers Total Indebtedness and shall reduce the principal amount of the Assets allocable to the Short Term Pool and each Long Term Pool accordingly. 7.11 Subject to Clause 7.4, all payments, recoveries or receipts in respect of Assets in the Short Term Pool shall be held by the Security Trustee on trust and shall be applied in accordance with the following priority of payments: 7.11.1 first, to pay the Relevant Proportion of the remuneration payable to the Security Trustee pursuant to this Deed and of any amount due in respect of costs, charges, liabilities and expenses incurred by the Security Trustee or a Receiver appointed by it (and for the purposes of this sub clause the Relevant Proportion shall be the principal amount of the Issuers Short Term Liabilities divided by the Issuers Total Indebtedness, 7 both such amounts to be determined on the last day of the Realisation Period); 7.11.2 second, to pay when due or as soon thereafter as can practicably be arranged all principal, interest or other amounts in respect of the Issuers Short Term Liabilities to Beneficiaries (pro rata to the respective amounts of the Short Term Liabilities due, owing or incurred to each Beneficiary); and third, in accordance with the provisions of 7.11.3 Clause 7.13 Provided that (in respect of 7.11.2 above): (a) if at any time after the Realisation Period the Security Trustee reasonably believes that payments, recoveries and receipts in respect of Assets allocated to the Short Term Pool will be insufficient to meet the Issuers Short Term Liabilities, the Security Trustee shall calculate the proportion of the Short Term Liabilities which, in its reasonable opinion, can be met and shall pay only that proportion of any amounts due in respect of the Issuers Short Term Liabilities to any Beneficiary; and (b) if at the time a payment is proposed to be made to a Beneficiary pursuant to this Clause such Beneficiary is in default under any of its obligations to make a payment to the Issuer pursuant to any Beneficiaries Document (the defaulted payment) the amount of the payment which shall be made to such Beneficiary shall be reduced by an amount equal to the amount of the defaulted payment. Any amount so withheld shall be paid to the relevant Beneficiary as and when (and pro rata to the extent that) the defaulted payment is duly paid by that Beneficiary. 7.12 Subject to Clause 7.5, all payments, recoveries or receipts in respect of Assets in the Long Term Pool shall be held by the Security Trustee on trust and shall be applied in accordance with the following priority of payments: [There follow provisions largely similar to those of clause 7.11, relating to the Short Term Pool] Clause 17 further provides: . 17 GENERAL PROVISIONS. SECURITY TRUSTEE 8 17.3 The Security Trustee (save as expressly provided otherwise herein) as regards all the trusts, powers, authorities and discretions vested in it by these presents or by operation of law, have absolute and uncontrolled discretion as to the exercise or non exercise thereof . 17.5 The Security Trustee as between itself and the other Beneficiaries shall have full power to determine all questions and doubts arising in relation to any of the provisions of these presents and every such determination, whether made upon a question actually raised or implied in the acts or proceedings of the Security Trustee, shall be conclusive and shall bind the Security Trustee and the other Beneficiaries. The scheme of the Security Trust Deed is thus that, upon the occurrence of an Enforcement Event, there will be a Realisation Period of up to 60 days, to enable the Security Trustee to establish the relevant Pools using Sigmas Assets. Assets are defined in clause 1 in the widest possible terms, including, in a final sub clause, all other rights, benefits, property, assets and undertaking whatsoever and wheresoever situate. The Short and Long Term Pools are under clauses 7.7 and 7.8 to be structured with a view to matching the principal amount of Sigmas short and long term liabilities with high quality rated assets in corresponding principal amounts and with corresponding maturity and payment dates. If that is not possible, because the principal amount of Sigmas Assets is less than that of its Total Indebtedness, then, under clause 7.9, the Trustee is to calculate the proportionate deficit, and reduce the principal amount of Assets allocable to each Pool accordingly. Once the Pools have been set up, then, under clauses 7.11 and 7.12, each Pool is to operate separately, but within each Pool, if it later appears that the Assets allocated to that Pool will be insufficient to meet the Pools liabilities, the Trustee is to calculate and pay to any creditor only that proportion which can, in its reasonable opinion, be met. Under clause 17.3 and 17.5, the Trustee is given the broadest discretion and powers. It is in the context of this scheme that it is necessary to read and understand the provision in the third and last sentence of clause 7.6, that During the Realisation Period the Security Trustee shall so far as possible discharge on the due dates therefor any Short Term Liabilities falling due for payment during such period, using cash or other realisable or maturing Assets of the Issuer. 9 The Law The principles upon which a court should interpret a document such as the present are not in doubt. They have been reviewed and restated by the House of Lords in a series of cases: Charter Reinsurance Co. Ltd. v Fagan [1997] AC 313, Mannai Investment Co. Ltd. v Eagle Star Life Assurance Co. Ltd. [1997] AC 749, Investors Compensation Scheme Ltd. v West Bromwich Building Society [1998] 1 WLR 896 and Chartbrook Ltd. v Persimmon Homes Ltd. [2009] UKHL 38. In Charter Reinsurance Lord Mustill underlined the danger of focusing too narrowly on a critical phrase (in that case, a phrase defining the term net loss as meaning the sum actually paid by the Reinsured in settlement of claims), saying (at p.384G H) that: This is . an occasion when a first impression and simple answer no longer seem the best, for I recognise that the focus of the argument is too narrow. The words must be set in the landscape of the instrument as a whole. Once this is done the shape of the policy and the purpose of the terms become quite clear Adopting that approach, the House concluded that the words actually paid were in context intended not to introduce a pre condition of pre payment by the insurer to the original insured, but to ensure that the reinsurers liability was measured precisely by reference to any settlement of liability as between the insurer and insured. Later (at p.387D) Lord Mustill said that the principle that the liability of a reinsurer is wholly unaffected by whether the insurer has in fact satisfied the claim under the inward insurance is one which can undoubtedly be changed by express provision, but clear words would be required; and it would to my mind be strange if a term changing so fundamentally the financial structure of the relationship were to be buried in a provision such as clause 2, concerned essentially with the measure of indemnity, rather than being given a prominent position on its In Investors Compensation Scheme at pp.912G 913F, Lord Hoffmann summarised the development of the principles of contractual interpretation in this well known passage: 10 The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of "legal" interpretation has been discarded. The principles may be summarised as follows: (1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. (2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man. (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them. (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against relevant background would reasonably have been understood to mean. The background may not merely enable the the 11 reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax. (see Mannai Investments Co. Ltd. vs Eagle Star Life Assurance Co. Ltd. [1997] AC 749). (5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Neviera S.A. vs Salen Rederierna A.B. [1985] A.C. 191, 201: . if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense. In the present case the focus is on the general nature of the business involved apparent from the document itself and upon the scheme and wording of the Security Trust Deed read as a whole. As in Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] 1 AC 676 (per Lord Diplock at p 682A F), so here the document is one which would be expected to have a consistent meaning as between all parties to whom it applied. I therefore also agree with Lord Collins supplementary remarks on the approach to interpretation. I pay tribute to the speed with which the courts below have addressed the issue, and the meticulous attention which they have given it. Ultimately, Sales J and the majority in the Court of Appeal were persuaded in favour of interested party As case by the consideration that the last sentence of clause 7.6 had a clear natural meaning, and that there was nothing in its language (particularly in the phrase so far as possible) to affect the operation of that meaning in the circumstances which arose. The Trustees obligation during the Realisation Period was to continue to discharge Sigmas debts as and when they fell due, so 12 long and so far as such payment was possible using cash or other realisable or maturing Assets; and the reference to such debts being discharged on the due dates therefor was inconsistent with party Bs argument in favour of pari passu distribution of available assets between creditors whose debts fell due during the Realisation Period. Analysis In my opinion, the conclusion reached below attaches too much weight to what the courts perceived as the natural meaning of the words of the third sentence of clause 7.6, and too little weight to the context in which that sentence appears and to the scheme of the Security Trust Deed as a whole. Lord Neuberger was right to observe that the resolution of an issue of interpretation in a case like the present is an iterative process, involving checking each of the rival meanings against other provisions of the document and investigating its commercial consequences (para. 98, and also 115 and 131). Like him, I also think that caution is appropriate about the weight capable of being placed on the consideration that this was a long and carefully drafted document, containing sentences or phrases which it can, with hindsight, be seen could have been made clearer, had the meaning now sought to be attached to them been specifically in mind (paras. 100 1). Even the most skilled drafters sometimes fail to see the wood for the trees, and the present document on any view contains certain infelicities, as those in the majority below acknowledged (Sales J, paras. 37 40, Lloyd LJ, paras. 44, 49 52 and 53, and Rimer LJ para. 90). Of much greater importance in my view, in the ascertainment of the meaning that the Deed would convey to a reasonable person with the relevant background knowledge, is an understanding of its overall scheme and a reading of its individual sentences and phrases which places them in the context of that overall scheme. Ultimately, that is where I differ from the conclusion reached by the courts below. In my opinion, their conclusion elevates a subsidiary provision for the interim discharge of debts so far as possible to a level of pre dominance which it was not designed to have in a context where, if given that pre dominance, it conflicts with the basic scheme of the Deed. The starting point is that the occurrence of an Enforcement Event is not necessarily to be equated with insolvency, still less insufficiency of assets to meet all secured liabilities. On the contrary, and this is I think a point with a relevance which does not emerge from the judgments below, clauses 7.3 to 7.8 are all drafted on the assumption of a situation in which Sigma has enough assets to cover at least its secured creditors. The detailed provisions in clause 7.3 and 7.4 for drawing down on any relevant Liquidity Facility can have little or very limited 13 application in any situation where Sigma lacked funds to cover such creditors, since in such a situation any liquidity provider would be expected to cancel any relevant facility (as happened in this case: see para. 12 above). The provisions of clauses 7.7 and 7.8 contemplate that there will be sufficient assets to create matching Pools of assets of high rating quality and liabilities. Only in clause 7.9 does the Deed turn to and address the possibility of a shortfall in the principal amount of the Assets needed to cover Sigmas liabilities. The provision by clause 7.6 for discharge of Short Term Liabilities as they fall due thus appears in a context where the underlying assumption is that all secured liabilities can be covered and no issue of priority can arise. To treat it, in the different context of insolvency, as creating effective priority for such Short Term Liabilities as may happen to fall due during the Realisation Period may, therefore, involve a similar risk to that identified by Lord Mustill in Charter Re that of giving to a sentence, buried in a provision like clause 7.6 concerned essentially with a different situation, the effect of changing fundamentally the apparent financial structure of the relationship. A second point is that the Short and Long Term Pools were under clauses 7.6, 7.9, 7.11 and 7.12 to be established to meet Sigmas total indebtedness, with the Short Term Pool covering all its Short Term Liabilities and the Long Term Pool covering all its Long Term Liabilities as defined by clause 1. Any suggestion that the final sentence of clause 7.6 was intended to extract, from the Short Term Liabilities, any which happened to fall due during the Realisation Period and to constitute them a separate pool or class with effective priority over other Short Term Liabilities is questionable on its face. Yet, the conclusion accepted in the courts below means that Realisation Period debts will not (or only in very rare circumstances) form part of the Short Term Liabilities to be met out of the Short Term Pool. Sigmas assets could normally be expected to consist of cash or other maturing or realisable Assets even if, in the case of some realisable assets, their realisation prior to maturity would come at some cost, because of the element of fire sale involved. Accordingly, on the approach taken by the courts below, Realisation Period debts will either have been paid during the Realisation Period before any Pools are established at all, or their payment will exhaust all the Assets with the result that there will never be any Pools at all. In any case where there is an overall shortfall of Assets, the priority given by the courts below to Realisation Period debts would also skew the relationship of any Short and Long Term Pools which were created. Clause 7.9 requires an overall comparison of Total 14 Indebtedness and Assets, and a pro rata reduction of the amount of Assets allocated to each Pool. Realisation Period debts fall within the definition of Short Term Liabilities. However, they would on the approach of the courts below have been paid in full. This would further reduce the amount available for payment to other Short Term Liabilities, which would accordingly receive a lesser pro rata payment than Long Term Liabilities. The only alternative, to treat Realisation Period debts as an entirely separate pool, conflicts with the definition of Short Term Liabilities in clause 1 and with the express recognition of such debts as Short Term Liabilities in the third sentence of clause 7.6 itself, and gives the third sentence a significance which seems in context improbable. There are further conceptual difficulties about drawing any clear cut distinction between Realisation Period debts and other Short Term Liabilities. Three subsidiary points arise. First, the last sentence of clause 7.6 contemplates on any view that it may not always be possible to pay Realisation Period debts on their due dates during the Realisation Period. Some might as a result not even be paid within that Period. They would then fall within the general body of Short Term Liabilities where they would have no especial priority. That raises the question why Realisation Period debts should be given priority according to the happenstance that their payment was possible within the Realisation Period. The second subsidiary point is that Pools were to be established by the end of the Realisation Period. The processes of making realisations and establishing matching Assets envisaged by clauses 7.6 and 7.7 and of calculating whether any and if so what deficit adjustment was necessary under clause 7.9 were bound to take time and to be potentially complex. In a fully solvent situation, there would be little problem about continuing to discharge Realisation Period debts as they fell due. But, in an insolvent situation, with the risk that further indebtedness might arise during that Period from margin calls or the acceleration of other debts and a shortage of Assets overall, the Trustee would, on the approach accepted by the courts below, face conflicting pressures which it would be difficult to reconcile: on the one hand, the short term duty to meet Realisation Period debts as they arose, if necessary by fire sales; on the other the long term duty to ensure balanced and equitable Pools for the benefit of Short and Long Term creditors. The third subsidiary point is that the language of clause 7.6 indicates on its face that Pools might be established before the end of the Realisation Period, as Rimer LJ accepted (para. 89), though Sales J, as I read his judgment, did not (para. 28). It is true that clauses 7.11.1, 7.11.3(a) and 7.12.1 all operate by reference to the last day of the 15 Realisation Period, in a way which might be said to assume that the Pools will not have been established until then. This may well be no more than a drafting infelicity, since it would seem strange, if it were not open, as clause 7.6 suggests it is, to the Trustee to establish the Pools on a day prior to the 60th day after the Enforcement Event. Assuming this to be so, then, in a situation where clause 7.9 came into operation, the setting up of the Pools would be expected to exhaust Sigmas assets. Yet, on the approach of the courts below, clause 7.6 would, read literally, require the Trustee to continue to discharge Realisation Period debts in full, after the setting up of the Pools, in circumstances where Sigmas assets were now held on the express trusts established by clauses 7.11 and 7.12. The only alternative would be to treat the obligation under clause 7.6 as coming to an end, despite its terms, before the end of the Realisation Period. However, this third subsidiary point is a small one. A third main point is the fortuitous effect of the interpretation placed on clause 7.6 by the courts below. Depending upon when an Enforcement Event occurred, those whose debts happened to fall due during the ensuing Realisation Period would gain priority. Creditors might be able to procure priority for themselves by making a margin call or giving notice advancing the payment date of their debts. Sales J treated this as representing a normal assumption of risk, under which every lender to Sigma took a chance . that it might be in the advantageous position in which Party A now finds itself (para. 26). Rimer LJ was also influenced by the fact that the Deed was a commercial bargain, intended to operate in insolvent and solvent situations, although he thought it improbable that the parties had foreseen the possibility of the extraordinary, probably unprecedented, market events that had actually unfolded (para. 92). Accepting what Rimer LJ says, it remains in my view improbable that commercial parties would contemplate that, after so important an occurrence as an Enforcement Event, priority would be conferred even to a modest extent and in the short term on a particular group of creditors on the basis of the chance of their indebtedness falling due, or being capable of being made to fall due, during the Realisation Period. The basic aim of clause 7.6 is to provide for the establishment of the Pools and the realisation of Assets, in such manner as the Trustee may in its absolute discretion deem appropriate, for that purpose. The Pools are under clauses 7.7 to 7.9 to contain Assets matching, or corresponding pro rata with, the payment and maturity dates of Sigmas Short and Long Term Liabilities. The third sentence of clause 7.6 has in this context the flavour of an ancillary provision designed to achieve a similar interim position during the Realisation Period. To my mind, it is unlikely that the Trustees obligation under the third sentence was 16 intended to override the absolute discretion given to it under the second sentence. This may be part of the explanation for the use of the phrase so far as possible. Whether that is so or not, the third sentence appears in a context and form which makes it, to my mind, an improbable vehicle for a duty to pay Realisation Period debts, regardless of any conclusion by the Trustee that clause 7.9 applies or will apply and that such payment will accordingly diminish the Assets capable of allocation to the Short Term Pool (or to the Short and Long Term Pools). The fourth point is that, if the final sentence of clause 7.6 is intended to operate even in circumstances where this would give Realisation Period creditors priority over other Short and Long Term creditors, it fails notably to address the position of creditors whose unpaid debts fell due for payment prior to the Realisation Period, i.e. in this case the US$900,000 of debts representing coupon payments on notes which fell due on 30 September and 1 October 2008 (para. 4 above). Sales J thought that there was no difficulty about reading the words falling due as embracing debts already due, once it was borne in mind that a debt remains due on each day until it is satisfied (para. 36). Lloyd LJ (para. 51) and Rimer LJ (para. 90) thought that no specific thought can have been given to such liabilities when clause 7 was drafted (although they fall within the definition of Short Term Liabilities and so naturally within clause 7.11.2). Both thought that it would not be a major qualification to read the final sentence of clause 7.6 as if it referred to Short Term Liabilities already due or falling due (paras. 52 and 90). Elsewhere, Lloyd LJ laid some weight upon the Deed being a commercial document prepared by skilled and specialist lawyers for use in relation to sophisticated financial transactions (para. 67), and Rimer LJ upon it being a 45 page document reflecting the considered input of (probably) a team of commercial lawyers (para. 86). But it contains, as their judgments also accept (paras. 51 52 and 90) infelicities, which indicate, at the lowest, the importance of keeping an eye on and making sense of the overall picture. I add that, on the view I take of the third sentence of clause 7.6, it is not surprising that it makes no reference to unpaid pre enforcement debts; the sentence appears, as I have said, in a context where the assumption is one of solvency, in which context one would not expect any unpaid pre enforcement debts. However, when the sentence is transposed and applied to a situation of insolvency, pre enforcement debts are more easily and naturally catered for as part of the general body of Short Term Liabilities, on the construction advanced by parties C and D, with or without Lord Neubergers refinement, for reasons pointed out by Lord Neuberger (para. 107). A fifth point relates to the provisions for payment of the fees and expenses of the Security Trustee and any Receiver. Under clauses 7.11.1 and 7.12.1, these are, as one would expect, express prior charges on the relevant Pool Assets. In a solvent situation, there would be no problem about payment of such fees and expenses out of Sigmas Assets during the Realisation Period before any Pools or Pool Assets were established. But, if the final sentence of clause 7.6 applies to require payment out in insolvent situations, although discharge in full of the Realisation Period debts might (as here) exhaust the whole of the available Assets, there is nothing in clause 7.6 to give the Security Trustee or Receiver any priority or protection. Sales J (paras. 37 40), with whom Lloyd LJ agreed on the point (para. 53), regarded this as no more than infelicity of drafting. Sales J suggested that, in practice, the Receiver could be covered if the Trustee fixed his remuneration and directed that it be paid out of the Assets under clause 14.3.4 and if the Receiver, with the Trustees permission, then, in order to cover his fees and expenses, borrowed money on the security of Sigmas Assets in priority to any secured creditor, as expressly permitted by clause 14.3.6. As to the Trustee, he thought the position slightly less clear, but that the Trustee could cover itself in one or two ways. First, it could appoint a Receiver to act on its behalf, in which case the Receivers fees and expenses would be recoverable as above. Second, clause 13.2 allowed the Trustee, out of the profits and income of the Assets and monies received by it in the exercise of any of its powers, to pay and discharge all expenses and outgoings incurred in and about the exercise of any such powers, and the word expenses could be read as including remuneration. These ingenious solutions do not overcome the basic problem, that, if the last sentence of clause 7.6 was ever envisaged as creating a continuing pay as you go regime, which would give effective priority to Realisation Period creditors, even though nothing would then remain for other creditors, it is remarkable that no special provision was made for the Trustees or Receivers fees and expenses. However remote the risk of non payment, such priority would normally be standard form. The inference is that the Trustees and Receivers prior right under clauses 7.11.1 and 7.12.1 was thought to be all that could ever be required, and that it was never contemplated that payments could or would be made under clause 7.6 in circumstances which could conceivably affect their entitlement to such fees and expenses. That argues for considerable caution before concluding that it must nevertheless be interpreted and so taken to have been intended to have that effect. Most if not all of the above points were identified by both Sales J and by the majority in the Court of Appeal and are summarised clearly and cogently, for example by Lloyd LJ (paras. 57 and 58) and Rimer LJ (para. 80). At the end of the day, other considerations persuaded them that the last sentence of clause 7.6 must be regarded as applying so as to 18 require payment in full of Realisation Period debts as they fell due, regardless of the effect on the creation of the Pools in general or on other Short Term creditors in particular. In support of this approach, Mr Howard and Mr Sheldon submit that an important key to understanding the last sentence of clause 7.6 is to see it as no more than the agreed continuation for a short period of the pay as you go regime prevailing prior to the occurrence of the Enforcement Event. While realisations were being made, they submit, it would have been thought convenient to continue this regime and to be unlikely to have much if any effect on non Realisation Period creditors. However, that in my opinion fails to give proper weight to the major significance attaching under the scheme of the Deed to an Enforcement Event. It may be (although the House understood it to be contentious) that Sigma was free to continue with a pay as you go system after it had become clear that this could affect later creditors, by realising assets and entering into repo agreements for the purpose. But the purpose of clause 7 is evidently to draw a line at a certain point. The crystallisation of powers and of the floating charge under clauses 7.1 and 7.2 and the definitions in clause 1 of Short and Long Term Liabilities and of the Pools to be established under clauses 7.6 to 7.9 strongly support a conclusion that that point was the Enforcement Date. The argument remains, nevertheless, that the third sentence of clause 7.6 is an unequivocal short term provision, and that nothing in its language or in the Deed as a whole limits, or entitles the court to limit, its application in a situation like the present. The majority in the Court of Appeal in rejecting the arguments advanced for parties C and D attached importance to the fact that the sentence used the words so far as, rather than if. Further, in rejecting Lord Neubergers refinement of the argument, they noted the absence of any definition of the state of mind which the Trustee would have to have or of what it would have to do, as well as the absence of any definition of the scope of the Trustees discretion, or judgment, if it was in whatever was the relevant state of mind as regards the prospects for payment in full, or only on account, of Sigmas various secured liabilities (paras.62 72, per Lloyd LJ). I think that a similar objection could however be made in relation to clause 7.9. Its operation must involve a substantial and time consuming process of evaluation and judgment during the Realisation Period. Whether and how it applies must be potentially complex matters for the Trustees judgment, having regard to the provisions of clause 7.7 regarding maturity and rating quality. Ultimately, in Lloyd LJs view, the position was that the sentence is on the face of it, clear and unequivocal as to the Trustee's obligation to discharge the Short Term Liabilities falling due during the 19 Realisation Period (para. 63), in a commercial document prepared by skilled and specialist lawyers, the clear and natural meaning of the words should prevail (para. 67) and, especially bearing in mind the elaborate and careful provisos to clauses 7.11 and 7.12 whereby an obligation to pay pro rata was introduced, the argument for pari passu distribution involves placing on the words so far as possible a weight and significance that they cannot bear (para. 69). Rimer LJ adopted similar reasoning, considering that, if the approaches advanced by parties C and D or adopted by Lord Neuberger had been intended, that could and would have been said (paras. 86 88). Both Lloyd and Rimer LJJ recognised that the parties would, when subscribing to notes on the terms of the Deed, not have had in contemplation the extraordinary market events which have occurred, or what, they recognised, might be regarded on their approach as leading to an unfair result (paras. 69 and 92). But they noted (paras.30 31, 85 and 92) that the Deed foresaw that an Enforcement Event might result from insolvency as from solvency. In those circumstances, and in the absence of any appropriate limitation, they saw the last sentence of clause 7.6 as equally applicable in both situations. At one point in his judgment (para. 59), Lloyd LJ also said that The sentence does not say if possible, but so far as possible; the latter phrase seems clearly to indicate that partial payment may be possible. However, if he was here suggesting that the sentence was expressly addressing a situation of insolvency in which Realisation Period debts would exhaust all Sigmas assets, the suggestion is in conflict with what was said elsewhere about the improbability of the parties foreseeing any such situation, and with the probable reality. I return to my starting point. The last sentence of clause 7.6 appears in and was drafted in contemplation of the situation where no question of insolvency arose. It is not until clause 7.9 that any such possibility is addressed. In practice, no doubt, an Enforcement Event would be more likely than not to result from some financial difficulty on Sigmas part. But that is not the situation which clauses 7.6 to 7.8 are drafted to address. The last sentence of clause 7.6 has therefore now to be interpreted in a quite different context to that in which it appears and for which it was designed. This is not an unusual phenomenon, as Sales J and the majority in the Court of Appeal recognised, when they found it necessary to expand or to qualify or read words into certain of the Deeds provisions in the light of the infelicities of drafting which on their approach emerged. In the present situation, the reasonable mans task in understanding the meaning and application of the last sentence of clause 7.6 is in my opinion greatly facilitated by the existence of a clear basic 20 scheme, from which it is improbable that the parties would have wished to depart. That basic scheme involved the creation of a Short and of Long Term Pools, each with sufficient nominal assets of sufficient rating quality to meet, or meet pro rata, the Pools liabilities as and when they matured. The basic purpose of the Realisation Period was to give time for the creation of such Pools. Realisation Period debts were to be part of the Short Term Pool. Seen in the context in which the third sentence of clause 7.6 appears, its aim was to put Realisation Period debts in the same position as other Short Term Liabilities. They were to be paid so far as possible on their maturity and payment dates. Seen in a context where the Trustee concludes that clause 7.9 applies, the approach of the courts below achieves the opposite result. It elevates Realisation Period creditors to a special status, extracts them from the Pool to which the Deed assigns them, distorts the apparent aim to achieve equity between all creditors by the creation of Short and Long Term Pools, and probably also distorts the relationship between the Short and the Long Term Pools. These considerations are sufficient to persuade me, as they persuaded Lord Neuberger, that the parties to the Deed cannot have contemplated the approach adopted by the courts below, even in a less extreme situation of insolvency than the present, such as they might have foreseen. The phrase so far as possible was used in a context where what were in mind were no doubt relatively minor discrepancies (during the Realisation Period when the Trustees main concern would be the creation of appropriate Pools) between available cash or other realisable or maturing Assets and liabilities, which could delay or prevent payment of all or some Realisation Period debts. That alone would explain why the word if was not used instead of so far as. But, when the sentence is transposed and applied to a situation in which clause 7.9 applies, those words are apposite to enable the Trustee to determine that no further payments can appropriately be made, having regard to the overall aim of achieving equitable Pools and an equitable allocation of Assets between the two (or more) main Pools. I would, in this context and so far as necessary, be prepared to read the words so far as as equating with if. I find it difficult in any event to attach as much weight as the Court of Appeal did to the difference. But it seems to me, as it did to Lord Neuberger, that it would also be open to the Trustee to make on account payments during the Realisation Period in respect of Realisation Period debts as they fell due. The calculation made or being made under clause 7.9 would indicate what proportion of such debts could safely be paid. The Trustees extensive and absolute discretions and powers under clauses 17.3 and 17.5 would avoid any argument. It is however unnecessary on the facts to reach any concluded decision on the correctness of Lord Neubergers refinement to the case advanced by 21 parties C and D. It is not, in my opinion, critical to the outcome of these appeals whether or not that refinement be accepted. Conclusion I would therefore allow the appeals of interested parties C and D and dismiss the appeal of interested party B, set aside the decisions of the courts below and declare that, on the true construction of clause 7.6 of the Security Trust Deed, and in the events that have happened, the Receivers were not obliged to use cash or other realisable or maturing assets of Sigma to pay Short Term Liabilities falling due for payment during the Realisation Period after 6 October 2008 either in the order in which they fell due or pari passu with other Short Term Liabilities due for payment during the Realisation Period. I would further declare that such Liabilities are to be treated along with all other Short Term Liabilities in respect of which payments fall to be made under clause 7.11 out of the Short Term Pool to be established under clauses 7.6 to 7.10. LORD COLLINS (with whom Lords Hope and Mance concur) I agree with Lord Mance that the appeals of interested parties C and D should be allowed for the reasons he gives, and I add only a few remarks of my own on the approach to interpretation. In complex documents of the kind in issue there are bound to be ambiguities, infelicities and inconsistencies. An over literal interpretation of one provision without regard to the whole may distort or frustrate the commercial purpose. This is one of those too frequent cases where a document has been subjected to the type of textual analysis more appropriate to the interpretation of tax legislation which has been the subject of detailed scrutiny at all committee stages than to an instrument securing commercial obligations: cf Satyam Computer Services Ltd v Upaid Systems Ltd [2008] EWCA Civ 487, [2008] 2 CLC 864, at [2]. Sigma financed its investments over a 13 year period by debt securities issued or guaranteed by it. It entered into liquidity facilities intended to hedge against market liquidity risks. It entered into financial instruments intended to hedge against currency and interest rate risk. Others provided liquidity facilities, or entered into financial hedging instruments. The Security Trust Deed secures a variety of creditors, who hold different instruments, issued at different times, and in different circumstances. Consequently this is not the type of case where the background or matrix of fact is or ought to be relevant, except in the most generalised 22 way. I do not consider, therefore, that there is much assistance to be derived from the principles of interpretation re stated by Lord Hoffmann in the familiar passage in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912 913. Where a security document secures a number of creditors who have advanced funds over a long period it would be quite wrong to take account of circumstances which are not known to all of them. In this type of case it is the wording of the instrument which is paramount. The instrument must be interpreted as a whole in the light of the commercial intention which may be inferred from the face of the instrument and from the nature of the debtors business. Detailed semantic analysis must give way to business common sense: The Antaios [1985] AC 191, 201. Once clause 7.6 of the Security Trust Deed is seen in context, the conclusion that the Receivers were not obliged to give priority to the first maturing Short Term Liabilities is consistent with the wording of the clause in the context of the Trust Deed as a whole and with the commercial purpose of the instrument. LORD WALKER (dissenting) These appeals will determine how the enormous loss incurred by Sigma Finance Corporation is to be borne as between the anonymous investment banks, hedge funds and other entities which are its secured creditors. Lord Mance refers to them as victims of the current financial crisis. An alternative view would be that they are among the authors of the crisis. But that is not an issue for the Court. Although I was one of those who gave permission for a further appeal (as it then was, to the Appellate Committee of the House of Lords) I find, on closer consideration, that the case involves no issue of general public importance. There is no doubt as to the principles of construction to be applied. They are clearly summarised (under the heading the law) in Lord Mances judgment. The only issue is as to the interpretation of the security trust deed in the light of those principles. Sales J and the majority of the Court of Appeal (Lloyd and Rimer LJJ) took one view but Lord Neuberger (sitting in the Court of Appeal) took a different view. In respectful dissent from the majority of this Court I prefer the view taken by the judge and the majority of the Court of Appeal. Since no issue of principle is involved it would be quite inappropriate to give any lengthy explanation of my reasons. I will limit myself to three fairly general points. First, I completely agree that it is necessary to construe the language of clause 7.6 of the deed in the landscape of the instrument as a whole (in the words of Lord Mustill in Charter Reinsurance Co Ltd v Fagan [1997] AC 313, 384H). One of the most striking features of the landscape of the deed, to my mind, is that clause 7 does not provide for the immediate winding up of Sigma on the occurrence of a default which amounts to an enforcement event. On the contrary, secured creditors are prohibited from taking steps to wind up the company. It is therefore necessary to repress any instinctive feeling (and it is, I acknowledge, a strong instinctive feeling) that pari passu distribution at the earliest practicable date is the most natural (one might almost say the only rational) solution. Instead, the assets were to be retained and marshalled (in accordance with the detailed provisions of clauses 7.6 to 7.10) in order to match the companys short term and long term liabilities, as defined, all of which were to be paid (under clause 7.11 or 7.12) as they fell due. The procedure envisaged was comparable to that of a funded occupational pension scheme which is closed to new entrants but not wound up. In such a case the trustees would adjust the way in which the fund was invested in order to match its predictable short term, medium term and long term liabilities. Scheme members would still have to wait for the payment of their respective pensions to fall due, and as each became entitled to a pension he or she would (in the typical case) then be entitled to preference, as against those whose pensions had not fallen due, if and when there was eventually a winding up. Second, the need to exclude any instinctive feeling about insolvent winding up is reinforced by the fact, to which Lord Mance rightly attaches importance, that the parties cannot have contemplated that Sigma would have insufficient assets to meet its liabilities even to secured creditors especially not on the scale of the extraordinary loss that has actually occurred. These skilled and sophisticated investors expected to make money, not to lose it. The fact that the effect of the deed, in a situation which the parties never contemplated, may appear fortuitous or arbitrary does not therefore carry much weight. It is not for the Court to make a new contract for experienced commercial operators advised by expert lawyers. Third, clause 7.6 (the crucial provision which has to be fitted into the landscape of the deed as a whole) is concerned with what is to happen during the 60 day realisation period. In setting up the pools the trustee was to perform what might well be a difficult exercise, but it was essentially an exercise of an administrative nature. The references to the trustees absolute discretion are to my mind explained by the trustees 24 wish to protect itself from possible criticism, rather than to any power for the trustee to prefer one secured creditor to another. The direction for payment of liabilities falling due for payment during the realisation period was no doubt expected to be more or less ancillary (as Lord Mance puts it) but it has, in the wholly unexpected events which have occurred, assumed unexpected importance. Reference was made to the direction applying so far as possible (rather than if and so far as possible) and to the fact that those words are not immediately adjacent to the words on the due dates therefore. I would not attach any importance to those details of language. The words are wide enough to cover both the possibility that a payment might for practical reasons have to be delayed by a few days, and the much more remote possibility (as it would have appeared to the parties at the time) that there would be a permanent deficiency of assets. I would therefore dismiss these appeals.

Sigma Finance Corporation is a structured investment vehicle (SIV) established to invest in certain types of asset backed securities and other financial instruments. Sigma aimed to profit from the difference between the cost of funding its activities and the returns made on its investment portfolio. However, the impact on the financial markets stemming from the sub prime mortgage market in the United States has meant that Sigmas available assets now fall very far short of the amount needed to pay even the secured creditors of the SIV. All of Sigmas assets are secured under a security trust deed (STD) in favour of those of its creditors investing in and through Sigma. The dispute in this case is between various classes of creditors as to the correct application of the STD where Sigma has insufficient funds to satisfy all its creditors and had failed to meet a margin call. The STD provided that in that event there should be a 60 day realisation period during which the trustees should use Sigmas assets to create, so far as possible, two pools of funds relating to its short and long term liabilities. But clause 7.6 of the STD also provided that: During the Realisation Period the Security Trustee shall so far as possible discharge on the due dates therefor any Short Term Liabilities falling due for payment during such period, using cash or other realisable or maturing Assets of the Issuer. The Court of Appeal, by a majority, construed clause 7.6 as meaning that the remaining assets fall to be distributed preferentially to the creditors whose debts fall due during the realisation period, with distribution to be made according to the dates when payment became due. The Supreme Court by a majority of four to one allowed the appeal by other creditors whose debts fell due after the realisation period. The principal judgment was delivered by Lord Mance, with whom Lords Hope, Scott and Collins agreed. Lord Walker dissented for the reasons outlined below). The principles of contractual construction to be applied were well established and required consideration of the basic scheme of the STD. Clause 7.6 appeared in the STD in the context of an assumption that Sigma would retain sufficient assets to cover its secured creditors. It was not intended to deal with a situation requiring the application of priorities between creditors. was improbable that clause 7.6 could be read as extracting from the short term pool debts which fell due during the 60 day realisation period so as to give priority over other creditors. (Paras [9] [10], [12], [13] [17]) It was also improbable that the parties would have contemplated priorities being conferred by the fortuitous timing of debts falling due during the realisation period. Clause 7.6 was an ancillary provision which did not override the trustees absolute discretion as to the manner in which assets were to be realised. No provision would have been made for the fees of the trustee if the Court of Appeal were correct. The reasonable persons understanding of clause 7.6 was aided by a clear basic scheme that debts arising during the realisation period were to be part of the short term pool of creditors with the assets to be distributed equitably amongst all the creditors at the discretion of the trustee. (Paras [21] [22], [25], [32] [33]) Lord Collins added that textual analysis of the type used to interpret tax legislation was not appropriate to a commercial contract. Detailed semantic analysis must give way to common sense. (Paras [35] [38]) Lord Walker dissented. He found that on closer examination the case involved no issue of general public importance. The legal principles were not disputed and the Court should avoid making new contracts for experienced commercial parties. (Paras [42] [46])

This appeal concerns a tenants break clause in a lease. The lease had been granted for a term expiring on 2 February 2018, and, in the normal way, the rent was payable in advance on the usual quarter days. The tenant exercised its right under the break clause to determine the lease on 24 January 2012, after it had paid the full quarters rent due on 25 December 2011. The issue is whether it can recover from the landlords the apportioned rent in respect of the period from 24 January to 24 March 2012. The resolution of that issue turns on the interpretation of the lease, and it requires the court to consider the principles by reference to which a term is to be implied into a contract. The Contractual documentation The defendants were the landlords and the claimant was the tenant under four sub underleases of different floors in a building known as The Point (the Building) in Paddington Basin, London W2. Each sub underlease was set out in a Schedule to a deed made on 15 January 2010, which varied or restated the provisions of a previous sub underlease which had been granted to the claimant in 2006. The origin of most of the provisions of each of the four sub underleases granted in 2010 is to be found in the four sub underleases granted in 2006. In this judgment, it is only necessary to refer to one of the four deeds (the Deed), the sub underlease it granted (the Lease) and the sub underlease (the earlier Lease) it replaced, as any differences between the four Deeds, the four 2010 sub underleases and the four 2006 sub underleases are irrelevant for present purposes. The Lease demised the third floor of the Building (the Premises) together with the use of two car parking spaces to the claimant for a term of years starting on 25 January 2006 and ending on 2 February 2018. The reddendum reserved a rent consisting of (a) the Basic Rent and (b) the Car Park Licence Fee. The Basic Rent was 919,800 plus VAT per annum, which was to be reviewed in accordance with Schedule 4, which provided for reviews on certain specified review dates. The Basic Rent was to be paid yearly and proportionately for any part of a year by equal quarterly instalments in advance on the [usual] quarter days. As at 25 December 2011, the Basic Rent was 1,236,689 per annum plus VAT. The Car Park Licence Fee was 6,000 per annum, which was to be paid by equal quarterly instalments in advance on the [usual] quarter days. The Lease was validly excluded from the ambit of sections 24 28 of the Landlord and Tenant Act 1954, which meant that, if not determined before 2 February 2018, the Lease would end on that date. Clause 8.1 of the Lease entitled the claimant (so long as it remained the tenant) to determine the Lease, by giving the landlords six months prior written notice (a break notice) to take effect on the first break date, namely 24 January 2012, and clause 8.2 provided for a second break date of 24 January 2016. Clause 8.3 stipulated that a break notice would only have effect if on the break date there are no arrears of Basic Rent or VAT on Basic Rent. Clause 8.4 provided that a break notice would only take effect on the first break date if on or prior to the first break date the tenant pays to the landlord the sum of 919,800 plus VAT. Clause 8.5 was concerned with consequential conveyancing machinery. Clause 8.6 entitled the landlords to waive compliance with all or any of the conditions set out in clause 8.3. Clause 8.7 stated that if the provisions of this clause are complied with the Lease should end on the break date without prejudice to the rights of either party in respect of any previous breach by the other. A very similar clause to clause 8 was contained in the earlier Lease: hence the choice of break dates, which were on anniversaries of the date of grant of the earlier Lease. Schedule 5 to the Lease dealt with insurance. In brief, the landlords covenanted to insure the Building against specified risks, and the tenant was obliged to pay to the landlord a fair proportion [assessed by reference to the ratio of the floor area of the Premises to that of the Building] of every premium payable by the landlord for insuring the Building . These payments were reserved as rent. Schedule 7 to the Lease was concerned with the services which the landlord covenanted to provide to the occupiers of the Building, and the service charge which the tenant was to pay in return. The service charge, which was reserved as rent, was to be a fair proportion (assessed in a similar way to the insurance rent) of the cost to the landlords of providing the services. This was initially to be based on an annual estimate, which was to be paid on account in advance by equal instalments on the usual quarter days. Paragraph 4.5 of the Schedule provided for payment by the tenant of a balancing sum in ten working days if the actual expenditure was greater than the payment on account, and paragraph 4.6 entitled the tenant to be credited with any overpayment against the next payment on account, if the expenditure was less than the payment on account. As is almost invariably the case with modern commercial leases, the Lease was a very full and detailed document. It ran to some 70 pages, including 15 pages of tenants covenants and nine pages of landlords covenants, and it included, in clause 5, a right for the landlords to forfeit the Lease for non payment of rent or other breach of covenant by the tenant. The provisions for review of the Basic Rent in Schedule 4 ran to four pages, and required a periodic review of the rent to the then current market rental value of the Premises as at certain specified review dates. Paragraph 8 of Schedule 4 stated that if the reviewed rent was not determined by a review date, rent at the preceding rate is to be payable and, once the reviewed rent is determined, a balancing figure is payable by the tenant to the landlords. It is not necessary to say much about the Deed, save that clause 4 provided that, if the tenant did not exercise its right to break the Lease (and the other three sub underleases) on 24 January 2012, the landlords would pay the tenant 150,000 by crediting it against the tenants liability for the rent due on the following quarter day, 25 March 2012. The factual background On 7 July 2011, pursuant to clause 8.1, the claimant tenant served a break notice on the defendant landlords to determine the Lease on 24 January 2012. On 19 July 2011, the defendants invoiced the claimant for its share of the insurance rent premium under Schedule 5 (the insurance rent) in respect of the year from 1 July 2011, in the sum of 14,972.85 plus VAT, which the claimant paid two weeks later. Shortly before 25 December 2011, the claimant paid the defendants the rent due on that date in respect of the quarter from that date up to and including 24 March 2012, the day before the next quarter day, thereby ensuring that clause 8.3 of the Lease was satisfied. This rent consisted of the Basic Rent (as reviewed) of 309,172.25 plus VAT, and the Car Park Licence Fee of 1,500. On or about 18 January 2012, the claimant paid the defendants 919,800 plus VAT, pursuant to clause 8.4 of the Lease. As a result of these payments, the break notice served on 7 July 2011 was effective, and the Lease determined on 24 January 2012. On 3 September 2012, more than eight months after the expiry of the Lease, the defendants served on the claimant a service charge certificate in respect of the services provided in the calendar year 2011. This showed that the cost of the services had been less than the estimate, and the defendants credited the claimant with its excess payment. Although there were similar issues about the Car Park Licence Fee, the insurance rent and the service charge, the principal issue between the parties at trial was whether the claimant was entitled to be refunded a sum equal to the apportioned Basic Rent in respect of the period 24 January 2012 (when the Lease expired) and 25 March 2012, given that the claimant had paid the Basic Rent (in the sum of 309,172.25 plus VAT) on 25 December 2011 in respect of that period even though the Lease had expired on 24 January 2012. In a carefully reasoned judgment, Morgan J held that the claimant was so entitled [2013] EWHC 1279 (Ch). For reasons given by Arden LJ (with whom Jackson and Fulford LJJ agreed), the Court of Appeal allowed the defendants appeal [2014] EWCA Civ 603. The claimant now appeals to this court, contending, as it did in the courts below, that there should be implied into the Lease a term that, if the tenant exercises the right to break under clause 8 and the Lease consequently determines on 24 January, the landlords ought to pay back a proportion of the Basic Rent paid by the tenant due on the immediately preceding 25 December (the apportioned sum), being apportioned in respect of the period 24 January up to and including the ensuing 24 March 2012. A similar issue arises in relation to the Car Park Licence Fee and the insurance rent, which I shall deal with at the end of this judgment. Implied terms in contracts It is rightly accepted on behalf of the claimant that there is no provision in the Lease which expressly obliges the landlords to pay the apportioned sum to the tenant. Accordingly, it follows that in order to succeed the claimant has to establish that such an obligation must be implied into the Lease. As Lady Hale pointed out in Geys v Socit Gnrale [2013] 1 AC 523, para 55, there are two types of contractual implied term. The first, with which this case is concerned, is a term which is implied into a particular contract, in the light of the express terms, commercial common sense, and the facts known to both parties at the time the contract was made. The second type of implied terms arises because, unless such a term is expressly excluded, the law (sometimes by statute, sometimes through the common law) effectively imposes certain terms into certain classes of relationship. There have, of course, been many judicial observations as to the nature of the requirements which have to be satisfied before a term can be implied into a detailed commercial contract. They include three classic statements, which have been frequently quoted in law books and judgments. In The Moorcock (1889) 14 PD 64, 68, Bowen LJ observed that in all the cases where a term had been implied, it will be found that the law is raising an implication from the presumed intention of the parties with the object of giving the transaction such efficacy as both parties must have intended that at all events it should have. In Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592, 605, Scrutton LJ said that [a] term can only be implied if it is necessary in the business sense to give efficacy to the contract. He added that a term would only be implied if it is such a term that it can confidently be said that if at the time the contract was being negotiated the parties had been asked what would happen in a certain event, they would both have replied Of course, so and so will happen; we did not trouble to say that; it is too clear. And in Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, 227, MacKinnon LJ observed that, [p]rima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying. Reflecting what Scrutton LJ had said 20 years earlier, MacKinnon LJ also famously added that a term would only be implied if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common Oh, of course!. Support for the notion that a term will only be implied if it satisfies the test of business necessity is to be found in a number of observations made in the House of Lords. Notable examples included Lord Pearson (with whom Lord Guest and Lord Diplock agreed) in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601, 609, and Lord Wilberforce, Lord Cross, Lord Salmon and Lord Edmund Davies in Liverpool City Council v Irwin [1977] AC 239, 254, 258, 262 and 266 respectively. More recently, the test of necessary to give business efficacy to the contract in issue was mentioned by Lady Hale in Geys at para 55 and by Lord Carnwath in Arnold v Britton [2015] 2 WLR 1593, para 112. In the Privy Council case of BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 52 ALJR 20, 26, Lord Simon (speaking for the majority, which included Viscount Dilhorne and Lord Keith) said that: [F]or a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that it goes without saying; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract. In Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472, 481, Sir Thomas Bingham MR set out Lord Simons formulation, and described it as a summary which distil[led] the essence of much learning on implied terms but whose simplicity could be almost misleading. Sir Thomas then explained that it was difficult to infer with confidence what the parties must have intended when they have entered into a lengthy and carefully drafted contract but have omitted to make provision for the matter in issue, because it may well be doubtful whether the omission was the result of the parties oversight or of their deliberate decision, or indeed the parties might suspect that they are unlikely to agree on what is to happen in a certain eventuality and may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur. Sir Thomas went on to say this at p 482: The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong. [He then quoted the observations of Scrutton LJ in Reigate, and continued] [I]t is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred Sir Thomass approach in Philips was consistent with his reasoning, as Bingham LJ in the earlier case The APJ Priti [1987] 2 Lloyds Rep 37, 42, where he rejected the argument that a warranty, to the effect that the port declared was prospectively safe, could be implied into a voyage charter party. His reasons for rejecting the implication were because the omission of an express warranty may well have been deliberate, because such an implied term is not necessary for the business efficacy of the charter and because such an implied term would at best lie uneasily beside the express terms of the charter. In my judgment, the judicial observations so far considered represent a clear, consistent and principled approach. It could be dangerous to reformulate the principles, but I would add six comments on the summary given by Lord Simon in BP Refinery as extended by Sir Thomas Bingham in Philips and exemplified in The APJ Priti. First, in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459, Lord Steyn rightly observed that the implication of a term was not critically dependent on proof of an actual intention of the parties when negotiating the contract. If one approaches the question by reference to what the parties would have agreed, one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting. Secondly, a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them. Those are necessary but not sufficient grounds for including a term. However, and thirdly, it is questionable whether Lord Simons first requirement, reasonableness and equitableness, will usually, if ever, add anything: if a term satisfies the other requirements, it is hard to think that it would not be reasonable and equitable. Fourthly, as Lord Hoffmann I think suggested in Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, para 27, although Lord Simons requirements are otherwise cumulative, I would accept that business necessity and obviousness, his second and third requirements, can be alternatives in the sense that only one of them needs to be satisfied, although I suspect that in practice it would be a rare case where only one of those two requirements would be satisfied. Fifthly, if one approaches the issue by reference to the officious bystander, it is vital to formulate the question to be posed by [him] with the utmost care, to quote from Lewison, The Interpretation of Contracts 5th ed (2011), para 6.09. Sixthly, necessity for business efficacy involves a value judgment. It is rightly common ground on this appeal that the test is not one of absolute necessity, not least because the necessity is judged by reference to business efficacy. It may well be that a more helpful way of putting Lord Simons second requirement is, as suggested by Lord Sumption in argument, that a term can only be implied if, without the term, the contract would lack commercial or practical coherence. Before leaving this issue of general principle, it is appropriate to refer a little further to Belize Telecom, where Lord Hoffmann suggested that the process of implying terms into a contract was part of the exercise of the construction, or interpretation, of the contract. In summary, he said at para 21 that [t]here is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?. There are two points to be made about that observation. First, the notion that a term will be implied if a reasonable reader of the contract, knowing all its provisions and the surrounding circumstances, would understand it to be implied is quite acceptable, provided that (i) the reasonable reader is treated as reading the contract at the time it was made and (ii) he would consider the term to be so obvious as to go without saying or to be necessary for business efficacy. (The difference between what the reasonable reader would understand and what the parties, acting reasonably, would agree, appears to me to be a notional distinction without a practical difference.) The first proviso emphasises that the question whether a term is implied is to be judged at the date the contract is made. The second proviso is important because otherwise Lord Hoffmanns formulation may be interpreted as suggesting that reasonableness is a sufficient ground for implying a term. (For the same reason, it would be wrong to treat Lord Steyns statement in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459 that a term will be implied if it is essential to give effect to the reasonable expectations of the parties as diluting the test of necessity. That is clear from what Lord Steyn said earlier on the same page, namely that [t]he legal test for the implication of a term is strict necessity, which he described as a stringent test.) It is necessary to emphasise that there has been no dilution of the requirements which have to be satisfied before a term will be implied, because it is apparent that Belize Telecom has been interpreted by both academic lawyers and judges as having changed the law. Examples of academic articles include C Peters The implication of terms in fact [2009] CLJ 513, P Davies, Recent developments in the Law of Implied Terms [2010] LMCLQ 140, J McCaughran Implied terms: the journey of the man on the Clapham Omnibus [2011] CLJ 607, and JW Carter and W Courtney, Belize Telecom: a reply to Professor McLauchlan [2015] LMCLQ 245). And in Foo Jong Peng v Phua Kiah Mai [2012] 4 SLR 1267, paras 34 36, the Singapore Court of Appeal refused to follow the reasoning in Belize at least in so far as it suggest[ed] that the traditional business efficacy and officious bystander tests are not central to the implication of terms (reasoning which was followed in Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] SGCA 43). The Singapore Court of Appeal were in my view right to hold that the law governing the circumstances in which a term will be implied into a contract remains unchanged following Belize Telecom. The second point to be made about what was said in Belize Telecom concerns the suggestion that the process of implying a term is part of the exercise of interpretation. Although some support may arguably be found for such a view in Trollope at p 609, the first clear expression of that view to which we were referred was in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191, 212, where Lord Hoffmann suggested that the issue of whether to imply a term into a contract was one of construction of the agreement as a whole in its commercial setting. Lord Steyn quoted this passage with approval in Equitable Life at p 459, and, as just mentioned, Lord Hoffmann took this proposition further in Belize Telecom, paras 17 27. Thus, at para 18, he said that the implication of the term is not an addition to the instrument. It only spells out what the instrument means; and at para 23, he referred to The danger in detaching the phrase necessary to give business efficacy from the basic process of construction. Whether or not one agrees with that approach as a matter of principle must depend on what precisely one understands by the word construction. I accept that both (i) construing the words which the parties have used in their contract and (ii) implying terms into the contract, involve determining the scope and meaning of the contract. However, Lord Hoffmanns analysis in Belize Telecom could obscure the fact that construing the words used and implying additional words are different processes governed by different rules. Of course, it is fair to say that the factors to be taken into account on an issue of construction, namely the words used in the contract, the surrounding circumstances known to both parties at the time of the contract, commercial common sense, and the reasonable reader or reasonable parties, are also taken into account on an issue of implication. However, that does not mean that the exercise of implication should be properly classified as part of the exercise of interpretation, let alone that it should be carried out at the same time as interpretation. When one is implying a term or a phrase, one is not construing words, as the words to be implied are ex hypothesi not there to be construed; and to speak of construing the contract as a whole, including the implied terms, is not helpful, not least because it begs the question as to what construction actually means in this context. In most, possibly all, disputes about whether a term should be implied into a contract, it is only after the process of construing the express words is complete that the issue of an implied term falls to be considered. Until one has decided what the parties have expressly agreed, it is difficult to see how one can set about deciding whether a term should be implied and if so what term. This appeal is just such a case. Further, given that it is a cardinal rule that no term can be implied into a contract if it contradicts an express term, it would seem logically to follow that, until the express terms of a contract have been construed, it is, at least normally, not sensibly possible to decide whether a further term should be implied. Having said that, I accept Lord Carnwaths point in para 71 to the extent that in some cases it could conceivably be appropriate to reconsider the interpretation of the express terms of a contract once one has decided whether to imply a term, but, even if that is right, it does not alter the fact that the express terms of a contract must be interpreted before one can consider any question of implication. In any event, the process of implication involves a rather different exercise from that of construction. As Sir Thomas Bingham trenchantly explained in Philips at p 481: The courts usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power. It is of some interest to see how implication was dealt with in the recent case in this court of Aberdeen City Council v Stewart Milne Group Ltd 2012 SLT 205. At para 20, Lord Hope described the implication of a term into the contract in that case as the product of the way I would interpret this contract. And at para 33, Lord Clarke said that the point at issue should be resolved by holding that such a term should be implied rather than by a process of interpretation. He added that [t]he result is of course the same. It is true that Belize Telecom was a unanimous decision of the Judicial Committee of the Privy Council and that the judgment was given by Lord Hoffmann, whose contributions in so many areas of law have been outstanding. However, it is apparent that Lord Hoffmanns observations in Belize Telecom, paras 17 27 are open to more than one interpretation on the two points identified in paras 23 24 and 25 30 above, and that some of those interpretations are wrong in law. In those circumstances, the right course for us to take is to say that those observations should henceforth be treated as a characteristically inspired discussion rather than authoritative guidance on the law of implied terms. Having made those general remarks about implied terms, I turn to consider the specific issue on this appeal, namely the claimants contention that it is entitled to claim the apportioned sum from the defendants by virtue of an implied term to that effect in the Lease. I shall start by focussing on the terms of the Lease and the Deed, and then turn to the broader picture. The arguments based on the provisions of the Lease and the Deed Each quarters rent paid in advance under a modern commercial lease, such as the Lease in this case, can fairly be said to be referable to the tenants use and enjoyment of the demised premises for the forthcoming quarter. Accordingly, the sum of 309,172.25 plus VAT due on 25 December 2011, and paid shortly before that date, can fairly be said, at least in general terms, to have been envisaged as being the tenants quid pro quo for being able to occupy and enjoy the Premises up to 25 March 2012. There is therefore real force in the contention that, if the defendants can retain the apportioned sum, it would be unfairly prejudicial to the claimant and a pure windfall for the defendants. A provision that the defendant landlords should reimburse the claimant tenant the apportioned sum would thus seem to be reasonable and equitable. The claimants case is reinforced by the fact that, as explained in para 4 above, the two break dates of 24 January 2012 and 2016 owe their origin to the date of grant of the earlier Lease, and that date was dependent on the date on which the head landlord gave its consent to the grant of the earlier Lease. Thus, it can fairly be said that the parties had agreed the terms of the break clause, not knowing whether the break dates would be shortly after, shortly before or even on, a quarter day. This supports the notion that they are unlikely to have intended that the apportioned rent was intended to be retained by the landlords as part of the compensation for the tenants operation of the break clause. This point is mildly weakened by the fact that the parties could have varied the break dates, or the terms of clause 8, when they came to renegotiate in 2010 the terms originally agreed in the 2006 Lease, but it still has force. A further point on which the claimant relies arises from the fact that the Basic Rent is stipulated in the Lease to be paid yearly and proportionately for any part of a year by equal quarterly instalments in advance (emphasis added). It is common ground that the effect of the italicised words is that, if the Lease had run its full course to 2 February 2018, the tenant would only have had to pay an apportioned part of the Basic Rent due on 25 December 2017, because, as at that date, the parties would have known that the Lease would expire before the next quarter day, 25 March 2018. In the present case, it is common ground that, because the claimant had not paid the sum of 919,800 plus VAT due under clause 8.4 before 25 December 2011, it would not have been known as at that date whether the Lease would come to an end before 25 March 2012, and the tenant therefore had to pay the quarters rent in full: it only became clear that the Lease would determine on 24 January 2012 when the claimant paid the 919,800 plus VAT on 18 January. However, if the claimant had paid the 919,800 plus VAT before 25 December 2011, the claimant argues (rightly in my view) that it would have been clear on 25 December 2011 that the Lease would end on 24 January 2012, so that the claimant would only have had to pay an appropriate proportion of the Basic Rent on 25 December 2011. The claimant accordingly contends that commercial common sense mandates that it should be in the same financial position whether it pays the 919,800 plus VAT before 25 December 2011 or chooses to wait, as it is entitled to, until after 25 December 2011 to pay that sum. (I might add that this point is somewhat reinforced when one considers what would have happened if the tenant had waited till the second break date to determine the Lease: because clause 8.4 only applies to the first break date, the tenant would have been entitled to pay only an apportioned part of the quarters Basic Rent on 25 December 2015.) The claimant raised other points which, to my mind, had less force. Thus, the fact that the Basic Rent was payable yearly and proportionately for any part of a year was said of itself to support the implied term for which the claimant contends. Given that the italicised words did not justify the claimant paying only an apportioned part of the rent due on 25 December 2011 on the facts of this case, those words appear if anything to undermine the claimants case: the fact that the Lease expressly provided that only part of a quarters rent was to be paid in some circumstances could fairly be said to undermine the notion that one should imply a term which has a similar effect in other circumstances. There is considerable force in the points discussed in paras 33 35 above, and between them they help make out a powerful case for contending that it is necessary for business efficacy that the term contended for by the claimant should be implied into the Lease. However, it is necessary to consider the countervailing arguments. The defendants rely on the fact that the Lease is a very detailed document, which had been entered into between two substantial and experienced parties, and had been negotiated and drafted by expert solicitors. In particular, the Lease makes provision for a large number of contingencies. Accordingly, it is said, with obvious justification, that the observations of Sir Thomas Bingham in Philips Electronique quoted in para 19 above are particularly in point. More specifically, the defendants refer to the express provisions relating to the payment of money in connection with clause 8. First, there is the payment of 919,800 plus VAT under clause 8.4. It is said that, while it involves no logical inconsistency, it is somewhat peculiar to imply into the Lease a term requiring the landlords to pay the tenant around 200,000 plus VAT on 25 January 2012, when the Lease has an express term requiring the tenant to pay the landlords around 900,000 plus VAT by 24 January 2012: the implied term lie[s] uneasily with the express terms to use Bingham LJs expression in The APJ Priti. Secondly, there is the condition in clause 8.3 which required the tenant to have paid all rent due on 25 March 2012 if it wished to exercise the right to break. Given that the effect of that provision is that the tenant must have paid rent for the whole quarter ending on 25 March 2012, it can again be said to be somewhat peculiar to imply a term requiring the landlord to repay the tenant most of that sum. Clauses 8.3 and 8.4 of the Lease, together with clause 4 of the Deed, which provided that the tenant would be paid 150,000 if it did not exercise its right to break, show how carefully and fully the parties considered and identified their rights against each other in relation to clause 8 of the Lease. There is force in the argument that these three provisions show that the parties had directed their minds to the specific question of what payments were to be made between them in connection with clause 8, and in particular what sums were to be paid if the right to break either was implemented or was not implemented, and that this renders it inappropriate for the court to step in and fill in what is no more than an arguable lacuna. There is, in my view, less force in the defendants reliance on paragraph 8 of Schedule 4 to the Lease (discussed in para 7 above). I see the logic of the argument that the fact that the rent review provisions expressly dealt with a similar point is an indication that the parties must have intentionally excluded any reference to such a point in clause 8. However, the rent review provisions were no doubt taken from a previous precedent, and, while careful thought would have been given to their precise terms, a provision such as paragraph 8 of Schedule 4 would have been in any sophisticated modern rent review clause. Having said that, I suppose that it might be said that the defendants could make something of the fact that such a provision is not normally included in a standard break clause, but I think that is too remote from the issue in this case to be of any help, and it is, sensibly, not a point which was developed, or even raised, in argument. The general law on apportionment of rent payable in advance The arguments discussed so far have focussed on the terms of the Lease (and the Deed) and their commercial effect. However, it is also necessary to consider the established legal background against which the Lease was entered into, and in particular the general attitude of the law to the apportionability of rent payable in advance. It has long been well established that rent, whether payable in arrear or advance, is not apportionable in time in common law. Accordingly, if a lease under which the rent is payable in arrear was forfeited or came to an end prematurely for some other reason, the landlord loses the right to recover the rent due on the rent day following that determination, at least according to the common law see eg William Cluns Case (1613) 10 Co Rep 127a. Parliament sought to remedy this initially in a limited way through the now repealed section 15 of the Distress for Rent Act 1737 and the Apportionment Act 1834, and then more comprehensively through the Apportionment Act 1870, which is still in force. Section 2 of the 1870 Act prospectively provides that All rents, annuities, dividends, and other periodical payments in the nature of income should like interest on money lent, be considered as accruing from day to day, and shall be apportionable in respect of time accordingly. There is no doubt that section 2 applies to rent payable in arrear, as was held by Malins V C in Capron v Capron (1874) LR 17 Eq 288. In Ellis v Rowbotham [1900] 1 QB 740, the Court of Appeal held that the 1870 Act did not apply to rent payable in advance and, ever since then, it has been assumed that this was the law. At the invitation of the court, it was argued on behalf of the claimant that Ellis should be overruled. I am satisfied that it should be approved. In their brief reasoned judgments, both AL Smith and Romer LJJ explained that (i) the mischief that the 1870 Act was concerned to correct related solely to rent in arrear, and (ii) rent paid in advance could not be said to be accruing from day to day, unlike rent in arrear. There is no reason to doubt the first reason. As to the second reason, it has obvious force if one treats the statutory reference to a sum accruing as a liability to pay the sum accruing. The conclusion reached in Ellis is also supported by the reference to interest on money lent, because interest has virtually invariably been payable in arrear. In addition, sections 3 and 4 of the 1870 Act, which are consequential provisions expressed to apply to The apportioned part of any such rent, annuity, dividend, or other payment (emphasis added), can only apply to rent or other payments payable in arrear, and not in advance, as they deal with the date when such rent or other payments are to be treated as having become due after the relevant event (ie, in the case of rent, determination of the lease). Even if we were considering the effect of section 2 in the absence of the longstanding decision in Ellis, I would have concluded that the section did not apply to rent paid in advance, essentially for the reasons summarised in para 44 above. However, like Collins LJ who concurred in the conclusion reached in Ellis, I would not have regarded the issue as altogether free from doubt, in the light of the very wide words of the section (All rents, annuities etc). As it is, the conclusion is reinforced by the fact that Ellis has stood for well over 100 years, and has been followed and applied in a number of first instance and Court of Appeal decisions without any expressions of doubt as to its correctness see eg Hildebrand v Lewis [1941] 2 KB 135, where at p 139 the Court of Appeal, citing Ellis in support, described it as well settled that where rent is payable in advance the Apportionment Act does not apply. I find it difficult to accept that this court could properly rule that a statute had a meaning which we thought was simply wrong, however long that meaning had been assumed to be correct. Nonetheless, I consider that, in a case where we had real doubt as to the correct meaning of a statute, we should favour the meaning which has been generally assumed to be correct for a long period, especially when the basis of that assumption is a judicial decision. In this case, however, it is not necessary to go even that far, because, as just explained, I consider that the conclusion reached by the Court of Appeal 115 years ago in Ellis was correct. It follows from this conclusion that neither the common law nor statute apportions rent in advance on a time basis. And this was, correctly, generally understood to be the position when the Deed and the Lease were negotiated and executed. The claimants argument, by contrast, is that a term should be implied into the Lease that the Basic Rent payable in advance on 25 December 2011 should effectively be apportioned on a time basis. The fact that the Lease was negotiated against the background of a clear, general (and correct) understanding that rent payable in advance was not apportionable in time, raises a real problem for the argument that a term can be implied into the Lease that it should be effectively apportionable if the Lease is prematurely determined in accordance with its terms. The point can be taken a little further. It is a very well established rule that a landlord who forfeits a lease under which the rent is payable in advance is entitled to payment of the whole of the rent which fell due on the quarter day preceding the forfeiture. The rule was well described by Lord Denning MR in Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433, 442, where he addressed a case where the rent was payable in advance on the usual quarter days and the landlord forfeited the lease by serving a writ (now a claim form) for instance on 25 April. He said, citing Ellis, that, given that the rent is payable in advance, the writ should claim for the whole quarters rent due in advance on March 25 and mesne profits from June 24 to the date of delivery of possession. (It may well be that the mesne profits should run from the date of service of the writ, but nothing hangs on that for present purposes.) Lord Denning contrasted the position where the landlord forfeited a lease under which the rent was payable in arrear, where, he said, the writ should claim rent at the rate of from March 25 to the date of service of the writ and mesne profits thereafter. Lord Dennings approach was followed and applied by the Court of Appeal in Capital and City Holdings Ltd v Dean Warburg Ltd (1988) 58 P & CR 346. Thus, it is clear that, where a lease provides for payment of rent in advance on the usual quarter days, and the landlord forfeits the lease during the currency of a quarter, he is entitled to retain the whole of the rent due on the quarter day immediately before the forfeiture if it has been paid, and, if it has not been paid, he is entitled to recover and retain the whole of that rent. Conclusions If one concentrates on the factors identified in paras 33 35 above, there appears to be a strong case for the implied term for which Mr Fetherstonhaugh QC powerfully argued on behalf of the claimant. The point made in para 33 supports the contention that, not merely would an implied term be fair, but that clause 8 could be said to work rather unfairly without the implied term. The point made in para 35, supported by what is said in para 34, provides real support for the proposition that, without the implied term, clause 8 would operate in a rather capricious way. On the other hand, as Mr Dowding QC rightly said on behalf of the defendants, the factors identified in paras 38 40 above chime with the warnings given by Sir Thomas Bingham in Philips and his reasons for rejecting an implied warranty in APJ Priti. The Lease is a very full and carefully considered contract, which includes express obligations of the same nature as the proposed implied term, namely financial liabilities in connection with the tenants right to break, and that term would lie somewhat uneasily with some of those provisions. There is little point in resolving the hypothetical question whether, in the absence of the points discussed in paras 43 49 above, I would have concluded that a term should be implied as the claimant contends. Even if I would have reached that conclusion, I consider that it could not have stood once one faced up to the clear and consistent line of judicial decisions which formed the backcloth against which the terms of the Lease, and in particular the provisions of clause 8, were agreed. Save in a very clear case indeed, it would be wrong to attribute to a landlord and a tenant, particularly when they have entered into a full and professionally drafted lease, an intention that the tenant should receive an apportioned part of the rent payable and paid in advance, when the non apportionability of such rent has been so long and clearly established. Given that it is so clear that the effect of the case law is that rent payable and paid in advance can be retained by the landlord, save in very exceptional circumstances (eg where the contract could not work or would lead to an absurdity) express words would be needed before it would be right to imply a term to the contrary. I accept that refusing to accede to the proposed implied term in this case can lead to the operation of clause 8 having the somewhat curious effect discussed in para 35 above. However, while the difference in result between the tenant paying the 919,800 plus VAT before or after 25 December 2011 can fairly be said to be capricious or anomalous, it does not begin to justify a suggestion that the contract is unworkable. Indeed, the result cannot be said to be commercially or otherwise absurd, particularly as it is entirely up to the tenant as to when that sum is paid. Further, the fact that rent payable in advance is not apportionable can always lead to potential unfairness. For instance, a landlord with a right to forfeit on 23 March for a continuing breach of covenant could wait for three days to re enter, in order to be able to receive the whole of the rent due in respect of the quarter to 24 June. It is instructive to see how Morgan J, who accepted the claimants case that there was an implied term, approached the question of apportionment of rent in the event of a forfeiture. At para 38 of his judgment, after referring to Ellis, he said that he consider[ed] that the parties are to be taken to have contracted against the background of the established law, and he would not have been prepared to imply such a term in a forfeiture. However, he held that such a term could be implied where the Lease determined under clause 8, but not where it determined as a result of a forfeiture, because (i) at the date of the Lease , there was no established law to the contrary in the case of a tenants break clause, whereas there was in relation to forfeiture, and (ii) it is significant that the parties agreed that the lessee could only break the Lease if it paid a sum equivalent to one years rent to compensate the lessor for the fact that it is losing its income stream from the break date. I am unconvinced by either of those reasons. The first reason effectively ignores the point that the reasoning in Ellis, Canas and Capital and City applies equally to a case where a lease determines by forfeiture as it does to a case where it determines by exercise of a right to break. The second distinction appears rather to point the opposite way, as explained in para 39 above. The fact that the tenant has to make a payment of over 900,000 plus VAT by 24 January 2012 in order to exercise the right to break, lies uneasily with the notion that one should imply a term that the tenant should be paid around 200,000 plus VAT the following day, but no such problem exists with implying such a term on a forfeiture. Another reason was advanced before us, namely that forfeiture normally arises because of some failure on the part of the tenant. I agree that it does, but not always; more importantly, I do not see that as a justification for rejecting an implied term in relation to a forfeiture if such a term is to be implied in relation to the exercise of a break clause. Further, given that the exercise of the break clause is in the hands of the tenant, and the exercise of a right to forfeit is in the hands of the landlords, any argument for an implied term based on fairness is stronger in relation to forfeiture than in relation to clause 8. Once one discards the two reasons given by the judge for reaching a different conclusion as to an implied term on the exercise of the break clause from that which would apply on a forfeiture, it seems to me that the logic of the analysis of Morgan J, who has considerable experience in this field, is that the claimants case should fail in relation to the Basic Rent, as the Court of Appeal concluded. Finally, I turn to the Car Park Licence Fee and the insurance rent. The reasons for rejecting the appellants argument in relation to the Basic Rent apply equally to the Car Park Licence Fee: indeed, the position is a fortiori as the reservation of the Car Park Licence Fee includes no words such as and proportionately for any part of a year, and the sum involved is very small in relative terms. So far as the insurance rent is concerned, the position is less clear. It is in a sense a payment for a service, and, as Morgan J rightly concluded, the service charge should be apportioned. However, that conclusion is based on the provisions of para 4.6 of Schedule 7 to the Lease, summarised in para 6 above, which enables the service charge to be apportioned, through the medium of a payment to the tenant: the reference to a credit plainly extends to giving effect to the credit, through payment, once the landlord and tenant relationship has come to an end. I do not consider the service charge to be a good analogy, because the service charge is paid for various ongoing services rather than a one off contribution to a single payment, and because there is no such provision in Schedule 5, summarised in para 5 above, in relation to the insurance rent. The appellant argues that the reference to a fair proportion in Schedule 5 coupled with fact that there is no reference to the period for which the landlords should take out the insurance renders it easy to imply the term for which the appellant contends. In my view, however, unless it could be shown to have been unreasonable for the respondents to have insured the Building for the whole of the ensuing year when they did so, the reasons for dismissing this appeal in relation to the Basic Rent and the Car Park Licence Fee apply equally to the insurance rent. After all, the insurance rent is a single annual sum, specifically reserved as rent, with no provision for apportionment, and it became payable in full in July 2011; further, the money involved is, relatively speaking, small. It is almost invariable for a landlord, indeed for any property owner, to insure its property on an annual basis, unless there is a specific reason not to do so, and that was clearly the established practice in the present case. It may be that the landlords could not have recovered the insurance rent for a full year in a case where it would have been unreasonable for them to have expected the tenant to pay for a full years cover. However, no such argument was advanced in this case, and it was probably too late to do so in any event, as the insurance rent had been paid for the year in question. Accordingly, I would dismiss this appeal. LORD CARNWATH: I agree that the appeal should be dismissed for the reasons given by Lord Neuberger so far as addressed to the issues between the parties. I add some brief comments only on the issue of implied terms, and in particular Lord Neubergers comments on the status of the Privy Council judgment in the Belize case. Unlike him, I would have been content to take my starting point not in the 19th century cases (such as The Moorcock), but in the most modern treatment at the highest level. That is undoubtedly to be found in the judgment of the Privy Council in the Belize case (Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988). It is important to remember that this was not an expression of the views of Lord Hoffmann alone, as is implied in some commentaries, but was the considered and unanimous judgment of the Board as a whole (including Lady Hale, and Lord Rodger, Lord Carswell, Lord Brown, none of them known for lack of independent thought). In the leading textbook on the subject (Lewison, Interpretation of Contracts 5th ed (2014)), the judgment is realistically taken to represent the current state of the law of England and Wales (p 284, para 6.03). The rest of that chapter contains an illuminating discussion of the working out of the principles stated by Lord Hoffmann, as applied by the courts in different contractual contexts and different factual situations. We would need very good reasons for treating the judgment as less than authoritative, and we have not been asked by the parties to do so. In the present case, there has been no dispute as to the authority of the Belize judgment, only as to its interpretation. The appellants seek to interpret it as supporting a more liberal approach than the traditional necessity test (in the words of their printed case): those courts which purport to follow Belize, but in so doing apply the tests of business efficacy, absolute necessity and the officious bystander, are departing from the test decided by the Privy Council. The issue, therefore, is whether the type of necessity that is required for the implication of a term is what may be termed (a) absolute necessity (ie the contract simply will not operate without the term); or (b) reasonable necessity (ie the contract will not operate as it must reasonably have been intended by the parties to operate). (para 59) The respondents by contrast submit that, properly understood, the judgment should not be read as involving any watering down of the traditional tests. To my mind there is no doubt that the respondents interpretation is correct. This is so, whether one looks to the words of Lord Hoffmann alone, or to subsequent authority in the higher courts of this country. The appellants have sought to support their submission by a commendably thorough review of the many cases in which Belize has been cited, in this country and in other common law jurisdictions. In my view, with the possible exception of the Singapore case referred to by Lord Neuberger to which I will come, such support is lacking. Very soon after it was given, the Belize judgment was subject to detailed consideration by Lord Clarke MR in the Court of Appeal in Mediterranean Salvage & Towage Ltd v Seamar Trading & Commerce Inc [2009] EWCA Civ 531 (10 June 2009); [2010] 1 All ER (Comm) 1. The judgment was adopted also by Rix LJ (para 48). As the third member of the court, I was more cautious at that early stage, deciding the appeal on the narrow basis that the implied term had not been shown by the owners to be necessary, and their case was not improved by substituting any of the other formulations of the test discussed in the cases (para 63). Lord Clarke began by predicting (accurately as it has turned out) that Lord Hoffmanns analysis will soon be as much referred to as his approach to the construction of contracts in Investors Compensation Scheme [1998] 1 WLR 896, 912 913 (para 8). He observed that the implication of a term is an exercise in the construction of the contract as a whole (para 9, citing the two House of Lords authorities referred to by Lord Hoffmann). He then quoted extensively from the judgment, including its citation of Lord Simons summary of the tests for implication of a term (see Lord Neuberger para 18). He did not see the judgment as involving a loosening of the traditional tests: It is thus clear that the various formulations of the test identified by Lord Simon are to be treated as different ways of saying much the same thing. Moreover, as I read Lord Hoffmanns analysis, although he is emphasising that the process of implication is part of the process of construction of the contract, he is not in any way resiling from the often stated proposition that it must be necessary to imply the proposed term. It is never sufficient that it should be reasonable. (para 15) In support he cited also the speech of Lord Wilberforce in Liverpool City Council v Irwin [1977] AC 239, 253 254, rejecting the more flexible approach proposed in the Court of Appeal by Lord Denning MR. Lord Clarke also noted (para 17) the contrast drawn by Sir Thomas Bingham MR in Philips Electronique (a passage cited by Lord Neuberger at para 29) between the courts usual role in contractual interpretation of finding the true meaning of the words actually used by the parties, and the more ambitious undertaking involved in the interpolation of terms to deal with matters for which [they] have made no provision. Lord Clarke concluded this passage by noting the stress laid by the authorities on the importance of the test of necessity. Is the proposed implied term necessary to make the contract work? (para 18). The appellants cite a number of later cases in the Court of Appeal in which the Belize judgment has been discussed in some detail (notably Crema v Cenkos Securities plc [2011] 1 WLR 2066, para 42ff per Aikens LJ; Stena Line Ltd v Merchant Navy Ratings Pension Fund Trustees Ltd [2011] Pens LR 223, para 36ff per Arden LJ; Jackson v Dear [2014] 1 BCLC 186, para 15ff per McCombe LJ, adopting the summary of the cases by Briggs J at first instance). None of these involves any material departure from Lord Clarkes analysis. More significantly it gains direct support from the succinct observation by Lady Hale (herself a party to the Belize judgment) in Geys v Socit Gnrale [2013] 1 AC 523, para 55 (paraphrased by Lord Neuberger at para 15), where she referred to: those terms which are implied into a particular contract because, on its proper construction, the parties must have intended to include them: see Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988. Such terms are only implied where it is necessary to give business efficacy to the particular contract in question. The appellants refer also to the treatment of the Belize judgment in other common law countries, including Canada, Australia, New Zealand and Hong Kong. None of these citations raises any doubt as to the authority of the Belize judgment, nor any reason to question Lord Clarkes interpretation of it. The one exception appears to be the Singapore Court of Appeal, in which (as Lord Neuberger points out: para 24) the judgment has been subject to detailed and critical analysis in Foo Jong Peng v Phua Kiah Mai [2012] 4 SLR 1267 (followed in Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] SGCA 43). Their analysis draws, inter alia, on criticisms made by Paul Davies, Recent developments in the law of implied terms [2010] LMCLQ 140. I note that there is no criticism in that article of Lord Clarkes judgment as such. Rather it is cited as a supposed example of the less than wholly enthusiastic reception which the Belize judgment is thought to have received in later cases. That and other academic articles, as well as the judgment of the Singapore Court of Appeal, have themselves been subject to critical examination in a recent article by Professor Richard Hooley, Implied terms after Belize Telecom [2014] CLJ 315, in which he welcomes the doctrinal coherence to interpretation and implication brought by the Belize judgment. Other academic views, before and since, are cited by Lord Neuberger (para 24). I see no purpose in reviewing the respective academic contributions in any detail, given the weight of judicial authority for the proposition (with which I understand we all agree) that the judgment is not to be read as involving any relaxation of the traditional, highly restrictive approach to implication of terms. Once that point is established, then I am not convinced with respect that the other points made by the Singapore court are sufficient to justify undermining the authority of the Boards reasoning. The passage from the courts conclusion quoted by Lord Neuberger (para 24) needs to be read in its full context: In summary, although the process of the implication of terms does involve the concept of interpretation, it entails a specific form or conception of interpretation which is separate and distinct from the more general process of interpretation (in particular, interpretation of the express terms of a particular document). Indeed, the process of the implication of terms necessarily involves a situation where it is precisely because the express term(s) are missing that the court is compelled to ascertain the presumed intention of the parties via the business efficacy and the officious bystander tests (both of which are premised on the concept of necessity). In this context, terms will not be implied easily or lightly. Neither does the court imply terms based on its idea of what it thinks ought to be the contractual relationship between the contracting parties. The court is concerned only with the presumed intention of the contracting parties because it can ascertain the subjective intention of the contracting parties only through the objective evidence which is available before it in the case concerned. In our view, therefore, although the Belize test is helpful in reminding us of the importance of the general concept of interpretation (and its accompanying emphasis on the need for objective evidence), we would respectfully reject that test in so far as it suggests that the traditional business efficacy and officious bystander tests are not central to the implication of terms. On the contrary, both these tests (premised as they are on the concept of necessity) are an integral as well as indispensable part of the law relating to implied terms in Singapore. (emphasis added) This summary is useful because it draws together in short form the threads of an elaborate and carefully considered judgment. As I read it the key points come down to three: i) Although the implication of terms is one aspect of the concept of interpretation, it should be treated as separate and distinct from the more general process of interpretation; ii) The court is concerned not with what it thinks ought to be the contractual relationship between the contracting parties, but rather with their presumed intention as ascertained through objective evidence; iii) The central place of the business efficacy and officious bystander tests should be affirmed as an integral as well as indispensable part of the law of Singapore. The first point is an interesting debating point, but to my mind of little practical significance. It is not a point addressed by the parties before us understandably, if they regarded it (as I would) as settled, if not by the Belize judgment itself, then by the authorities relied on by Lord Hoffmann (noted by Lord Neuberger at para 25). Lord Neuberger (para 28) prefers a sequential approach: first interpretation, then implication. However, as he accepts (para 26) both processes are parts of the exercise of determining the scope and meaning of the contract. On this point also I see no reason to depart from what was said in Belize. While I accept that more stringent rules apply to the process of implication, it can be a useful discipline to remind oneself that the object remains to discover what the parties have agreed or (in Lady Hales words) must have intended to agree. In that respect it remains, and must be justified as, a process internal to the relationship between the parties, rather than one imposed from outside by statute or the common law (see the distinction noted by Lord Neuberger: para 15). Nor do I agree that support for such a division can be found in the judgments referred to by Lord Neuberger: that is, the judgments of the Master of the Rolls in the Philips case (already cited), and of this court in Aberdeen City Council. The passage from the former is useful as emphasising the narrow constraints on implication. But I do not read the Master of the Rolls as treating it as a notionally separate exercise from that of interpretation. (Nor did Lord Clarke MR when quoting the same passage in Mediterranean Salvage: see above.) The contrast rather is between two aspects of the courts task in respect of contractual interpretation: the usual role involving the resolution of ambiguities in the language used by the parties, and the extraordinary power involving interpolation of terms that they have not used. In the same way the passages cited from Aberdeen City Council do not appear to support a sharp distinction between interpretation and implication, still less for the necessity of a sequential approach. No one thought it necessary to refer to Belize. Lord Clarke preferred implication, but acknowledged that the two processes achieved the same result. There is no indication that he had changed his view since Mediterranean Salvage. He seems to have treated them as two sides of the same coin. Lord Hope who gave the lead speech (which also had majority support) clearly saw them as part of a single exercise: the implied term was the product of interpretation. The case seems if anything to illustrate an iterative, rather than sequential, process (see Lord Grabiner, The iterative process of contractual interpretation (2012) 128 LQR 41). The results of different interpretative techniques were considered and compared, in the light of the language used and its business context, to achieve a result which best represented the assumed intentions of the parties. On the second point, in so far as there is a difference from the Singapore court, I prefer the approach of Lord Neuberger which seems to me entirely consistent with Belize. As he says (para 21), one is concerned not with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting, or in other words of Lord Hoffmanns reasonable addressee (Belize, para 18). On the third point, there is no doubt as to the continuing significance of the traditional tests, as summarised by Lord Simon. If however the Singapore court intended thereby to prescribe a more rigid application of those tests, whether individually or cumulatively, I prefer the approach of the Board in Belize (para 27): The Board considers that this list is best regarded, not as [a] series of independent tests which must each be surmounted, but rather as a collection of different ways in which judges have tried to express the central idea that the proposed implied term must spell out what the contract actually means, or in which they have explained why they did not think that it did so. This passage is also cited, albeit with only qualified approval, by Lord Neuberger (para 21). In conclusion, while I accept that Lord Hoffmanns judgment has stimulated more than usual academic controversy, I would not myself regard that as a sufficient reason to question its continuing authority. On the contrary, properly understood, I regard it as a valuable and illuminating synthesis of the factors which should guide the court. Applying that approach to the present case leaves me in no doubt that the appeal should be dismissed. LORD CLARKE: I agree that the appeal should be dismissed for the reasons given by Lord Neuberger. I only add a few words of my own because of the debate between Lord Neuberger and Lord Carnwath on Lord Hoffmanns view on the relationship between the approach to construction and the approach to the implication of a term which he expressed on behalf of the Judicial Committee of the Privy Council in Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988. I do so in part in order to clarify what I said in the cases referred to by Lord Carnwath, especially Mediterranean Salvage & Towage Ltd v Seamar Trading & Commerce Inc [2009] EWCA Civ 531, [2010] 1 All ER (Comm) 1 and Aberdeen City Council v Stewart Milne Group Ltd [2012] SLT 240. As Lord Carnwath says at para 62, I did not doubt Lord Hoffmanns observation that the implication of a term is an exercise in the construction of the contract as a whole. I recognise, however, in the light of Lord Neubergers judgment, especially at paras 22 to 31, that Lord Hoffmanns view involves giving a wide meaning to construction because, as Lord Neuberger says at para 27, when one is implying a word or phrase, one is not construing words in the contract because the words to be implied are ex hypothesi and not there to be construed. However, like Lord Neuberger (at para 26) I accept that both (i) construing the words which the parties have used in their contract and (ii) implying terms into the contract, involve determining the scope and meaning of the contract. On that basis it can properly be said that both processes are part of construction of the contract in a broad sense. I agree with Lord Neuberger and Lord Carnwath that the critical point is that in Belize the Judicial Committee was not watering down the traditional test of necessity. I adhere to the view I expressed at para 15 of my judgment in the Mediterranean Salvage & Towage case (which is quoted by Lord Carnwath at para 62) that in Belize, although Lord Hoffmann emphasised that the process of implication was part of the process of construction of the contract, he was not resiling from the often stated proposition that it must be necessary to imply the term and that it is not sufficient that it would be reasonable to do so. Another way of putting the test of necessity is to ask whether it is necessary to do so in order to make the contract work: see the detailed discussion by Lord Wilberforce in Liverpool City Council v Irwin [1977] AC 239, 253 254.

In 2006, BNP granted to Marks & Spencer (M&S) sub underleases of four different floors in a building known as The Point in Paddington Basin, London W2 from 25 January 2006 to 2 February 2018. Any difference between the sub underleases is irrelevant for the purposes of the appeal, so it is only necessary to refer to one of them (the Lease). Under the Lease, the rent payable comprised a basic rent of 919,800 plus VAT which was payable yearly and proportionately for any part of a year by equal quarterly instalments in advance on the usual quarter days, and a car park licence fee of 6,000 per annum also payable by equal quarterly instalments in advance. The Lease also provided for the landlord to recover, by way of rent, (i) a fair proportion of the costs of insuring the building and (ii) a service charge in respect of services provided to the building. Clause 8 entitled M&S to determine the Lease on 24 January 2012 by giving BNP six months prior written notice (a break notice). A break notice would only have effect to determine the Lease on 24 January 2012 if: (i) there were no arrears of rent on that date (clause 8.3); and (ii) M&S paid BNP the sum of 919,800 plus VAT (clause 8.4). On 7 July 2011, M&S served a break notice on BNP. Shortly before 25 December 2011, M&S paid BNP the basic rent due on that date for the period from 25 December 2011 up to and including 24 March 2012. On or about 18 January 2012, M&S paid BNP 919,800 plus VAT. As a result of these payments, the break notice was effective and the lease determined on 24 January 2012. M&S subsequently brought a claim for the return of the apportioned basic rent in respect of the period from 25 January to 24 March 2012, contending that there should be implied into the Lease a term that, if the tenant exercised the right to determine the Lease on 24 January 2012, it should be entitled to a refund from the landlord of the proportion of the basic rent paid in respect of the period from the date of determination up to and including 24 March 2012. Similar claims were made by M&S in respect of the car park licence fee, the insurance rent and the service charge. The High Court held that M&S was so entitled. The Court of Appeal subsequently allowed BNPs appeal. M&S appeal to the Supreme Court. The Supreme Court unanimously dismisses M&Ss appeal. Lord Neuberger writes the leading judgment, with which Lord Sumption and Lord Hodge agree. Lord Carnwath and Lord Clarke both write concurring judgments. The test for implication of contractual terms The judicial approach to the implication of contractual terms represents a clear, consistent and principled approach [21]. A term will only be implied if it satisfies the test of business necessity or it is so obvious that it goes without saying [17 18]; it will be a rare case where only one of those two requirements are met [21]. The implication of a term is not critically dependent on proof of the actual intention of the parties. If one approaches the question by reference to what the parties would have agreed, one is concerned with the hypothetical answer of notional reasonable people in the position of the parties at the time they were contracting [21]. It is a necessary but not sufficient condition for implying a term that it appears fair or that one considers that the parties would have agreed it if it had been suggested to them [21]. The judgment of Lord Hoffmann in Attorney General of Belize v Belize Telecom [2009] 1 WLR 1988 did not dilute the test for the implication of contractual terms [24, 57 74, 75 77]. Application to the facts It is well established that rent, whether payable in arrear or advance, is not apportionable in time in common law [44]. Section 2 of the Apportionment Act 1870 provides that all rents and other periodical payments should be considered as accruing from day to day and be apportionable in respect of time accordingly [44]. There is no doubt that section 2 applies to rent payable in arrear [45]. The conclusion of the Court of Appeal in Ellis v Rowbotham [1900] 1 QB 740 that the 1870 Act did not apply to rent payable in advance, is correct [45 46]. This mirrors the position on a forfeiture, where a landlord who forfeits a lease under which the rent is payable in advance is entitled to the payment of the whole of the rent which fell due on the quarter day preceding the forfeiture [48]. Given the clear, general understanding that neither the common law nor statute apportion rent payable in advance on a time basis, it would be wrong, save in a very clear case, to attribute to a landlord and a tenant, particularly where they have entered into a full and professionally drafted lease, an intention that the tenant should receive back an apportioned part of rent payable and paid in advance [47, 51]. M&S argued that, had it paid the sum of 919,800 plus VAT due under clause 8.4 before 25 December 2011, it would have been known at that date that the lease would come to an end before 25 March 2012 and thus BNP would only have been due an appropriate portion of the basic rent on 25 December 2011, and that commercial common sense therefore mandated that it should be in the same position whether it paid the 919,800 plus VAT before or after 25 December 2011 [35 36]. This argument is rejected. Any anomaly in the working of the lease does not establish that the contract is unworkable or that the result is commercially or otherwise absurd [52]. The same conclusion applies to the car park licence fee and the insurance rent, but not to the service charge, in respect of which there is specific provision which contemplates repayment [55].

In R v Soneji [2005] UKHL 49; [2006] AC 340, para 3 Lord Steyn feared that it might be innocent to predict that the then new Proceeds of Crime Act 2002 (POCA) had solved the problems involved in the criminal process of confiscation. He was considering in particular the question whether and when a breach of statutory procedural terms for the process of post conviction confiscation deprives the Court of jurisdiction to make such an order. The present appeal raises the same question again. More particularly, the present question is whether a procedural breach deprives the court of jurisdiction if it is combined with a breach of the rules contained in section 15(2) for the order in which sentence and confiscation order are to be approached. The principal statutory provisions in question are sections 15(2), and 14(8), (11) and (12) of POCA. The respondent, Lodvik Guraj, pleaded guilty on 11 June 2012 to offences involving the supply of heroin and money laundering. He had been caught in possession at his home of about 1.5Kg of heroin, some amphetamine and some cocaine. Hidden in the house and garage was equipment for processing the drugs, such as an hydraulic press and cutting agents, and also various substantial quantities of cash. He appeared to have been supplying drugs for some time. The offences were lifestyle offences for the purposes of POCA. On 16 July 2012 the respondent was sentenced to terms of imprisonment totalling five years and four months. At the same time, the judge made, apparently without any question arising as to the propriety of doing so, orders (a) forfeiting the drugs under section 27 of the Misuse of Drugs Act 1971, and (b) depriving the respondent of a car, a laptop, five mobile telephones, some scales, the press and a money counting machine, pursuant to section 143 of the Powers of Criminal Courts (Sentencing) Act 2000, on the basis that they had been used for the purposes of crime. Also at the same time, the judge gave directions for the progression of the confiscation aspect of the case. She set three dates in August, October and November 2012 for the respondent to provide some information he was required to give, and then for the service by first the Crown and then the respondent of the statements of case required by sections 16 and 17 of POCA. The last of the dates thus fixed was 9 November 2012. The judges order then directed that a half day hearing should follow, two weeks thereafter, with a date to be fixed. Thereafter, the timetable set by the judge for confiscation slipped badly. The respondent did give the information required, albeit in September rather than in August as directed. The CPS then lost sight of the case for a whole year and did not serve its section 16 statement. In October 2013, it woke up to what had happened, and contacted the respondent to admit the fact, and to invite agreement to a new timetable. The case was listed for 7 January 2014, but although a Crown statement was prepared in advance of this, it was not served until 15 January, and the CPS failed to get the officer in the case to court so that the hearing was abortive, save that a direction for a further Crown statement was given. The case was next listed on 31 March 2014, but this hearing was also abortive owing to the failure of the CPS to register the date and get the advocate instructed to be there to conduct it. Wasted costs orders were made against the Crown in relation to both these abortive hearings. In due course there was a properly attended hearing on 2 May 2014, but by now the respondents counsel had formulated the submission that the events which had occurred had the consequence that there was no longer any jurisdiction to proceed. The judge directed a special hearing to deal with that contention and in due course, on 7 May 2014, that took place. Whilst lamenting the repeated errors of the prosecution, the judge rejected the defence argument and on 9 June 2014 made a confiscation order in a sum which had been by then agreed, subject to the jurisdiction point, at 57,458. The Court of Appeal took the opposite view to the judge on the jurisdiction point and quashed the confiscation order. orders made at the time of sentencing, and to the matter of timetabling. Forfeiture etc POCA contains provisions which relate both to the forfeiture and deprivation Section 13 POCA provides (as amended), so far as material, as follows: 13. Effect of order on courts other powers If the court makes a confiscation order it must proceed (1) as mentioned in subsections (2) and (4) in respect of the offence or offences concerned. (2) The court must take account of the confiscation order before (a) (b) it imposes a fine on the defendant, or it makes an order falling within subsection (3). (3) These orders fall within this subsection an order involving payment by the defendant, an order under section 27 of the Misuse of Drugs an order under section 143 of the Sentencing Act (a) other than [defined exceptions] (b) Act 1971 (c 38) (forfeiture orders); (c) (deprivation orders); (d) Act 2000 (c 11) (forfeiture orders) an order under section 23 or 23A of the Terrorism (3A) (4) Subject to subsection (2), the court must leave the confiscation order out of account in deciding the appropriate sentence for the defendant. These provisions are directed at the inter relation between confiscation and sentence. They say, in effect, that confiscation has no effect on sentence except for some (but not all) aspects of the latter which are either financial or property depriving. By exceptions defined in section 13(3)(a) and 13(3A), various orders in the nature of compensation or restitution are excluded, as are mandatory orders for the payment of the surcharge; these are plainly given priority. Those apart, the reasoning plainly is that financial/property orders might be affected by removal under a confiscation order of some of the defendants assets, and so the confiscation order is to be taken into account before making them. There is obvious potential for a confiscation order to affect the ability of a defendant to meet a fine, and there might be some scope for it to affect the question whether it is right to make a deprivation order, since the financial impact of such an order on the defendant is, by section 143(5)(b) of the Powers of Criminal Courts (Sentencing) Act 2000, a consideration to which a court is required to have regard when deciding whether to make it. The same might sometimes be true of a forfeiture order under section 27 of the Misuse of Drugs Act 1971, at least when it relates to money, or to property used in the offending, rather than to any drugs recovered. These provisions have existed, essentially in similar form, ever since confiscation was introduced to English criminal law by the Drug Trafficking Offences Act 1986 and, for non drugs crime, by the Criminal Justice Act 1988. In order to understand them it is necessary to remember that, as initially conceived, the scheme was for confiscation to be dealt with before sentence. That is why the provisions are couched in terms of taking account of the confiscation order when determining the sentence. However, it was rapidly discovered that it was wholly unrealistic to expect the complex questions which frequently arise in relation to confiscation, not infrequently involving third party interests, to be ready to be determined immediately on conviction, especially after a contested trial. The result was that the sentencing of offenders was held up, often for a substantial time, when it is a cardinal principle of the criminal law that sentence ought to follow conviction either immediately or very shortly after, not least in the interests of defendants. So, with effect from the Criminal Justice Act 1993, courts were given express power to adopt what is much the more natural sequence, and to sentence first. That was done, however, by creating a power in the court to postpone the confiscation hearing until after sentence, initially as an exception to a general practice of dealing with confiscation first. Although the general practice has rapidly, and inevitably, become to sentence promptly and to deal with confiscation subsequently, the terms of some of the statutory provisions have not, in this respect, altered. The power to postpone has been continued into POCA, and indeed extended. It is no longer predicated, as initially it was, on a decision that the court needs additional information before confiscation can be dealt with, and the initial provision that confiscation must ordinarily be completed within six months has been replaced by a period of two years. But section 13, because it has substantially been modelled on the previous statutes, is still couched in terms which assume that confiscation will ordinarily come first. Timetabling: Postponement The power to postpone confiscation until after sentence is now in section 14 (as amended) which provides (omitting immaterial parts): 14. Postponement (1) The court may (a) proceed under section 6 before it sentences the defendant for the offence (or any of the offences) concerned, or (b) postpone proceedings under section 6 for a specified period. [extension of permitted period if defendant appeals his (2) A period of postponement may be extended. (3) A period of postponement (including one as extended) must not end after the permitted period ends. (4) But subsection (3) does not apply if there are exceptional circumstances. (5) The permitted period is the period of two years starting with the date of conviction. (6) conviction] (7) A postponement or extension may be made (a) on application by the defendant; (b) on application by the prosecutor; (c) by the court of its own motion. If (a) proceedings are postponed for a period, and (b) an application to extend the period is made before it ends, the application may be granted even after the period ends. (9) [definition of date of conviction] (10) [extended definition of appeals] (11) A confiscation order must not be quashed only on the ground that there was a defect or omission in the procedure (8) connected with the application for or the granting of a postponement. (12) But subsection (11) does not apply if before it made the confiscation order the court imposed a fine on the defendant; (a) (b) made an order falling within section 13(3); (c) made an order under section 130 of the Sentencing Act (compensation orders) (ca) made an order under section 161A of the Criminal Justice Act 2003 (orders requiring payment of surcharge); (d) made an order under section 4 of the Prevention of Social Housing Fraud Act 2013 (unlawful profit orders). 15. Effect of postponement (1) If the court postpones proceedings under section 6 it may proceed to sentence the defendant for the offence (or any of the offences) concerned. (2) In sentencing the defendant for the offence (or any of the offences) concerned in the postponement period the court must not (a) impose a fine on him, Section 15 (as also amended) then contains what are, in effect, consequential provisions which combine section 13 with the power to postpone in section 14. So far as material, it provides: (b) make an order falling within section 13(3), (c) make an order for the payment of compensation under section 130 of the Sentencing Act (ca) make an order for the payment of a surcharge under section 161A of the Criminal Justice Act 2003, or (d) make an unlawful profit order under section 4 of the Prevention of Social Housing Fraud Act 2013. (3) If the court sentences the defendant for the offence (or any of the offences) concerned in the postponement period, after that period ends it may vary the sentence by imposing a fine on him, (a) (b) making an order falling within section13(3), (c) making an order for the payment of compensation under section 130 of the Sentencing Act; (ca) making an order for the payment of a surcharge under section 161A of the Criminal Justice Act 2003, or (d) making an unlawful profit order under section 4 of the Prevention of Social Housing Fraud Act 2013. (4) But the court may proceed under subsection (3) only within the period of 28 days which starts with the last day of the postponement period. It will be seen that section 15(2) feeds on the underlying thinking of section 13(2) and (3), but extends it. Sections 13(2) and (3) direct the court to take account of any confiscation order before making the various financial or property orders there specified. But section 15(2) goes on to prohibit the court from dealing with these financial/property aspects of sentence until after the confiscation proceedings have been concluded, and by subparagraphs (b) to (d) it includes a prohibition also on making various financial orders (such as compensation) which are exempted from section 13(3). Curiously, a restitution order under section 148 of the Powers of Criminal Courts (Sentencing) Act 2000, although it may involve payment of money, is not included in the prohibition. As recorded above, section 13 derives from the days before there could be any question of sentence before confiscation. Section 15(2) derives from the creation of what was in 1993 a new power to deal with sentence first, and from a time when it may well have been anticipated, however unrealistically, that postponement would be relatively unusual. Section 15(2) is, however, in many cases counter intuitive, and creates a trap into which even the most experienced and skilled trial judges may fall. That is because many forfeiture orders will not be in the least controversial and are inevitable whatever the outcome of confiscation proceedings may be. A good example is the order in the present case forfeiting the fairly substantial quantity of drugs found on Guraj. But for section 15(2), it would make sense to make inevitable forfeiture orders immediately after conviction in order to avoid the risk of their being overlooked, and, equally importantly, to allow the drugs to be destroyed without delay. It is not obviously sensible to insist on sometimes industrial quantities of volatile substances being kept by the police for months. There may easily be similar practical difficulties in preserving other property which is inevitably going to be forfeited. Section 14(12) essentially follows section 15(2). Its effect is that section 14(11) does not apply if orders have been made prior to the confiscation process of the kind which section 15(2) says should not precede it. Because, when the natural order of process (sentence first) was restored from 1993, it was accomplished hedged about by detailed procedural provisions for postponement of confiscation, there ensued many instances of technical failures to observe the procedures being relied upon for the contention that the ensuing confiscation proceedings were invalid and no order could be made. Similar complaints of procedural errors unconnected with postponement were likewise frequently relied upon as invalidating confiscation orders. On a number of occasions the courts felt obliged to accept these arguments and several confiscation orders were quashed as a result, although it could not be suggested that the defendant had suffered any unfairness or that the confiscation order was other than correct if there was power to make it. Examples included R v Ross [2001] 2 Cr App R (S) 109 and the striking case of R v Palmer [2002] EWCA Crim 2202; [2003] 1 Cr App R (S) 112 at 572, where the order quashed exceeded 32m. Other courts took a different view of the legal consequences of failure to get the procedure right. In due course the resulting uncertainty was addressed both by Parliament in renewing the confiscation legislation in POCA and by the House of Lords in R v Soneji [2005] UKHL 49; [2006] 1 AC 340 and R v Knights [2005] UKHL 50; [2006] 1 AC 368. It is relevant to note that the first preceded the second in time. The legislative response was the insertion into POCA of subsections 14(11) and (12). The manifest purpose of section 14(11) is to remove any supposed rule that a procedural failure connected with postponement invalidates the confiscation procedure and prevents an order being made. Such a failure cannot thereafter be the sole ground for quashing a confiscation order. The subsection is addressed to the Court of Appeal, rather than to the court of trial and sentence, but it is a plain consequence of its provisions that a Crown Court is not disabled from making a confiscation order only on the ground that there was a defect or omission in the procedure connected with the application for or the granting of a postponement. Subsection (11) comes, however, with the qualification of subsection (12). The present case is agreed to be one to which subsection (12) applies, because the judge had inadvertently infringed section 15(2) by making the forfeiture and deprivation orders before confiscation had been considered. The issue in the present case is therefore this: what is the legal position when subsection (12) takes subsection (11) out of the picture? In Soneji and Knights the House of Lords considered the legal consequences of procedural error in the absence of both subsections 14(11) and (12) because neither was present in the (amended) Criminal Justice Act 1988 which governed the cases then before the House. In Soneji confiscation orders had been made more than 18 months after the defendants had been sentenced to imprisonment for money laundering. The statute then in force provided that postponement could not be for more than six months in total unless there were exceptional circumstances; although the postponement had been made in good faith, the question whether there were exceptional circumstances had not been addressed. In Knights, the confiscation hearing had been postponed initially without setting a precise date and in terms which would place it more than six months after the conviction of one of the defendants. The House held that statutory provisions ought no longer to be classified as either mandatory or directory, but rather that attention should focus on what Parliament intended to be the consequences of failure to comply with them. It drew attention to the fact that the court comes under a duty under the confiscation legislation to make the order if the Crown seeks it, and indeed even if it does not, if the court determines that there should be such an order. It followed that the question was whether that duty was removed by the failure to observe the procedural requirements. The House held that the plain purpose of the postponement provisions was to ensure the overall effectiveness of the sentencing process, and to enable sentence to take place promptly, at least where no financial sentence was in prospect. Accordingly it held that it was not the consequence of failure to comply with the statutory procedural provisions that a confiscation order could not be made, at least where there was no injustice to the defendant in making it. Thus both Parliament and the House of Lords as a court recognised that it would defeat the purpose of the confiscation legislation if orders were treated as bad simply because there had been a failure to comply with the procedural provisions laid down for postponement. Parliament accordingly altered the law, prospectively, by inserting section 14(11) into POCA. For its part, the House of Lords construed the existing earlier statute which had no such provision, and which provided stricter procedural requirements than POCA now does, and held that it cannot have been intended that invalidity should be the consequence of procedural breach. It follows from the decisions in Soneji and Knights that irrespective of section 14(11) the correct approach to the legal consequences of failure to observe procedural provisions is to ask whether Parliament must have intended invalidity of any confiscation order to follow, bearing in mind the underlying duty on the court to make such an order. There can be no question of sections 14(11) and (12) being designed to be a Parliamentary response to Soneji and Knights and to curtail the breadth of those decisions; these sections had been enacted before the House came to consider those two cases. Whether those sections do nevertheless curtail the breadth of the decisions in Soneji and Knights is central to the question in the present case. The two responses, by Parliament and the court, both address the problem of procedural error and its effect on the validity of a post conviction confiscation order. But it should be noted that the two responses are not identical. Sections 14(11) and (12) are confined to the case of procedural error connected with the application for or the granting of a postponement. They have no application to any other kind of procedural error. Thus confined, section 14(11), where it applies, is peremptory: an order must not be quashed only on grounds of such error. The decisions in Soneji and Knights are, first of all, not peremptory. They leave to the court the determination of when a procedural defect must have been intended to affect validity. But the decisions are also of broader ambit than sections 14(11) and (12). Although the facts of both cases did concern postponements, the reasoning is not confined to that kind of procedural defect. It proceeds on analysis of the effect of statutory conditions for the exercise of a power generally. The procedural provisions of POCA are legion and certainly not confined to postponements of the hearing. Others which might be invoked in aid of an argument that a post conviction confiscation order was invalid might, for example, include the detailed rules for affording time for payment (section 11 passim), the rules for making compliance orders (section 13A as inserted by section 7 of the Serious Crime Act 2015), a failure to make a section 13(6) order for payment out of the confiscation order of a priority order (which includes the mandatory surcharge order) or the provisions of sections 16 for the furnishing of statements of information by the Crown; those are by no means exhaustive instances. Sections 14(11) and (12) would have no application to this sort of argument, but there is no reason to suppose that the reasoning of Soneji and Knights would not apply. This case The contention of the respondent is that there have been in this case two respects in which the statutory provisions have not been complied with. The first was the making of the forfeiture and deprivation orders, in contravention of section 15(2). The second was the failure on the part of the Crown to make an application for an extension of the postponement before it expired, as is required by section 14(8); the original postponement ordered by the judge in July 2012 had expired by the end of November 2012, and nothing then happened for a year. Says the respondent, the effect of the first error is that section 14(12) takes section 14(11) out of the picture, and the result is that the second error is fatal to the courts jurisdiction. It is expressly accepted that the respondent can point to no injury, unfairness or injustice to which he has been exposed by the making of the order after the timetable recorded above. If, however, the jurisdiction to make the order has gone, that does not matter. The judge applied the Soneji approach. He directed himself that the failure of the Crown to apply before December 2012 for a further postponement was a procedural error, and a serious one, but one which was capable of remedy within the two year period, and had indeed been remedied. He approached the respondents submission as in effect an application to stay the confiscation proceedings and thus asked himself whether any injustice had been sustained by the defendant. He held that Parliament could not have intended that any failure to apply for an extension of postponement, even by, for example, making the application two days late, would lead inevitably to the confiscation proceedings becoming invalid. Delay and incompetence could, he held, be met fairly by a stay if the consequence of them was unfairness. There being no suggested prejudice or unfairness, he proceeded to make the order. The Court of Appeal reached the opposite conclusion. It accepted that there was a clear Parliamentary intention that confiscation proceedings should not be invalidated by technical errors, but held that there was also a clear intention that those proceedings should move on expeditiously, hence the timetabling provisions of section 14. It held that section 14(8) was infringed by the failure to apply for an extension before the initial period of postponement expired. At that point, at para 54, it held, the prosecution needs the balm of section 14(11) in order to retrieve its position. But that balm was unavailable, because of section 14(12). It expressed the result of the interlocking statutory provisions, and particularly of sections 15(2) and 14(12) as follows: 55. It is of course right that we must strive to give effect to the objects of POCA and the intention of Parliament, as the House of Lords stated in both Knights [2006] 1 AC 368 and R v Soneji [2006] 1 AC 340. The difficulty for the prosecution, however, is that part of Parliaments intention is now expressed in section 14(12) of POCA. That is a mandatory prohibition which, as the Lord Judge CJ stated in R v Neish [2010] 1 WLR 2395, cannot be ignored. Forfeiture orders should not be made when confiscation proceedings are under way. If forfeiture orders are made in such circumstances, then the prosecution will be held more strictly to the time limits contained in section 14. The outcome of the appeal was stated thus: we conclude that the combination of delays and breaches by the prosecution was such as to deprive the court of the power to make a confiscation order. (para 57) This approach, centred on a crucial role for section 14(12) as disapplying section 14(11), must be seen against the background that section 14(12) is triggered by any forfeiture or other order specified in section 15(2), whether or not such order could conceivably be affected by a confiscation order. So, for example, section 14(12) is triggered by an order for the forfeiture of drugs recovered, as in the present case, and would also be triggered by a deprivation order relating to a trivial item of property in the hands of a defendant who had ample assets with which to meet a confiscation order. Is this approach compelled by the statute? The Court of Appeals reasoning involves reading section 14(12) as not simply disapplying section 14(11), which plainly it does, but also as restoring those of the pre Soneji cases which regarded procedural errors as going to jurisdiction to make a confiscation order. It involves understanding section 14(12) as not simply removing the balm of section 14(11), so as to remove the peremptory bar on quashing only for postponement procedural error, but as prescribing that an order will, in its absence, be invalidated for such an error. That, however, is not a necessary reading of section 14(12) and it is to give insufficient weight to the quite separate analysis contained in Soneji and Knights. That latter analysis holds as good now as it did at the time of the House of Lords decisions. The court remains under a duty to make a confiscation order, and the question remains whether that duty is removed by procedural error which causes no injustice or unfairness to the defendant. The purpose of the postponement provisions of POCA is, just as the purpose of their predecessors in the Criminal Justice Act 1988 was, to make the sentencing process effective. If anything, the recognition that confiscation will frequently, and in reality generally, follow sentence, is clearer in POCA than it was in the predecessor legislation. The need to found postponement on the absence of necessary information has gone, and the permitted period for postponement has been increased fourfold. It should be noted that the judge and the Court of Appeal both dealt with the case on the agreed basis that the original postponement order had expired by December 2012 and that there was a breach of section 14(8) in the failure of the Crown to seek a further extension before that time. In this court, Mr Hall QC for the Crown offered an alternative analysis, namely that the original (valid) postponement order ran until two weeks after the service of both parties statements of information, and therefore survived until the Crowns was served in late 2013. On the correct view of the law, it is not necessary to resolve this issue. Subject, however, to any further argument and evidence of accepted practice, the better view would appear to be that the original postponement was valid, being for a specified period until December, but would not have been valid (because not for a specified period) if it had been open ended and dependent on the uncertain event of service of a partys statement of information. Whatever the correct technical view, it may be sensible for a court which needs to give directions such as those given initially in the present case to postpone confiscation to a fixed date somewhat beyond the hoped for date, or earlier by liaison with the parties. In any event it is clear that the listing officer needs to keep the situation under review see para 37 below. The Court of Appeals reasoning treated the breach of section 14(8) as the critical matter which, once section 14(11) was removed from consideration by the inadvertent making of the forfeiture orders, led in its view to the loss of jurisdiction to make a confiscation order. But although section 14(8) certainly contemplates that an application by a party for a further postponement will be made before the expiry of a previous postponement, it is difficult to see a failure to meet this requirement as going to so fundamental a matter as jurisdiction. If it did, it would indeed mean, as the judge held, that an extension application which is a day late would be fatal, and even if there were an acceptable excuse for it, and maybe even if it were made by the defendant or had been consented to by him. There is simply no reason at all why this should be so. It is also to be observed that a postponement or extension may, under section 14(7), be made not only on an application by a party, but also by the court of its own motion. Given the courts statutory duty under section 6 to make a confiscation order, it would plainly not be improper for the court to order an extension without any application from a party, if satisfied that no injustice or unfairness would thereby be occasioned. If it did so, section 14(8) would appear to have no application. In arriving at its conclusion the Court of Appeal described section 14(12) as containing a mandatory prohibition. That was understandably based on an obiter passage in the judgment of Lord Judge CJ in R v Neish [2010] EWCA Crim 1011; [2010] 1 WLR 2395. The initial postponements of confiscation in that case had been to a fixed date about five months after sentence. There was plainly nothing wrong with that. Before that date arrived, the judge learned that, unexpectedly, he was double booked in court that day. He immediately instructed the listing officer to vacate that date and to re list on a date convenient to both parties. The listing officer did so and, before the originally fixed date was reached, had re listed the case about three weeks later. The point taken on behalf of the defendant was that this process involved no judicial decision to postpone for a specific period, because the judge had left it to the listing officer to find a convenient date. The judge had felt obliged to accept this point, but the Court of Appeal rightly held that there was nothing at all in it. The revised date was still only six months after sentence. It had been fixed on judicial direction. The judge acted via the listing officer, exercising the judicial function of listing, and through him adjourned the hearing to the revised fixed date. There had been a perfectly legitimate postponement. The court added an analysis based upon Soneji and Knights, correctly pointing out that those cases, and in particular the latter, decided that an adjournment may be a valid postponement for a specific period without fixing a date, so long as it was not simply an adjournment generally. The court then offered this summary: 18. In short, the conclusion to which the reasoning in the House of Lords in R v Soneji [2006] 1 AC 340 and R v Knights [2006] 1 AC 368 drives us is the comforting one that unless the continuation of confiscation proceedings would contravene an unequivocal statutory provision, there is no reason why technical errors which cause no prejudice to the defendant should prevent their continuation. The position is exemplified by section 14(11) and section 14(12) of the 2002 Act. Section 14(11) states in express language that a confiscation order must not be quashed only on the ground that there was a defect or omission in the procedure connected with the application for or the granting of a postponement. That language is clear, but by section 14(12) it is not to apply if, before the confiscation order was made, the court had already, for example, imposed a fine on the defendant. That is an express statutory prohibition which it is not open to the court to ignore. However what happened here did not contravene any statutory provision. Since the court had found, correctly, that there had been a valid postponement to a fixed date, Neish was a case in which there was no procedural error at all. Neither Soneji nor section 14(11) were engaged. The observations set out above were obiter, albeit an entirely understandable reinforcement of the inevitability of the decision that the court could and should continue in that case to deal with confiscation. The court was plainly not attempting to provide a comprehensive statement of the law. The expressions unequivocal statutory provision and express statutory prohibition do not derive directly from the speeches in Soneji; indeed in that case the complaint had been that the postponement did contravene an express statutory provision which prevented adjournment beyond six months unless in exceptional circumstances. It is possible that in the penultimate sentence of the passage quoted above the expression used in the first was repeated, and that prohibition is a transcription error for provision. However that may be, section 14(11) does contain a prohibition: it says that the court must not quash a confiscation order only on the grounds of procedural defect or omission connected with postponement. Section 14(12) is less obviously to be described as a prohibition. It is certainly an express provision, and it disapplies section 14(11). It certainly cannot be ignored. But to say that it disapplies section 14(11) is the beginning of the exercise, not the end. The judgment of the Court of Appeal in the present case also considered the earlier case of R v Donohoe [2006] EWCA Crim 2200; [2007] 1 Cr App R (S) 88 at 548. There, the postponements were not criticised, but they had followed sentencing in which the judge had fallen into precisely the same trap as did the judge in the present case: he had made a forfeiture order. It was only of the drugs seized. It could not conceivably have been resisted, and it is difficult to see how its making could have been affected by the confiscation process. But to make it was, there as here, a breach of section 15(2). The decision of the Court of Appeal (Criminal Division) (Sir Igor Judge P, Gray and McCombe JJ) was that that breach did not render the confiscation order invalid. The court said this, of sections 14(11) and (12): 15. There is nothing in the remaining provisions of the Act which say that if the court makes an order in contravention of section 15(2), it may no longer proceed to hear the application for a confiscation order under section 6. What the Act does say in sections 14(11) and (12) is that a confiscation order must not be quashed on the grounds that the procedural defect or error, except if that error was the imposition of a fine, compensation order, forfeiture order or the like within section 13(3). When the Act speaks of quashing of an order it seems to propose an order has been made and an application is made to quash it, presumably on an appeal. On their face, therefore, these two subsections appear to provide that an appellate court may quash a confiscation order even on procedural grounds if, for example, an order for forfeiture has been made under section 27 of the 1971 Act, before the making of the confiscation order. The subsections do not say directly that the court at first instance cannot make a confiscation order in such circumstances. Are they however saying so indirectly? 16. It seems to us that these two subsections are allowing the appellate court, if it sees fit, to quash a compensation [sic: but McCombe J must have said confiscation] order on procedural grounds where, for example, there is a danger of double counting or double penalty because the court had made an earlier order of an expropriating nature against a defendant and it should not have done so. The subsections are not imposing a prohibition on the trial court from proceeding with the confiscation proceedings which it has validly postponed 17. We do not consider therefore that either section 15(2), or sections 14(11) and (12) had the effect of depriving the court of jurisdiction to make a confiscation order when there had been a failure to observe the prohibition in section 13(2). None of these provisions state this to be the consequence. It would, in our view, be frustrating the object of the 2002 Act to hold that the erroneous imposition of a trivial fine or, for example, the forfeiture of drug dealing paraphernalia rendered the court powerless to proceed with the substantive confiscation proceedings. A technically erroneous order for forfeiture of illegal drugs is, in our view, an a fortiori case. Such an approach is, we consider, consistent with that of the House of Lords in the recent case of Soneji [2005] UKHL 49; [2006] 1 Cr App R (S) 79 (p 430) The reasoning there set out, which was ex tempore, appears, with respect, to have overlooked the fact that in a case where the postponements were not criticised, sections 14(11) and (12) had no application. But on the direct question whether section 15(2) mandated invalidity, the application of the principle of Soneji to a non postponement procedural error was plainly correct. The court went on to consider ways in which any injustice or unfairness to a defendant arising from making a confiscation order after a premature forfeiture order might be corrected. That was the right approach. A similar result ensued in R v Paivarinta Taylor [2010] EWCA Crim 28; [2010] 2 Cr App R (S) 64, para 42, where a confiscation order was held not automatically to be invalidated by the fact that the court had imposed a fine in advance of the confiscation proceedings, contrary to section 72A(9) of the then applicable Criminal Justice Act 1988. Whatever the position might have been if the confiscation order could conceivably have impacted on the fine, in that case it could not have done so. True it is, as the Court of Appeal said in the present case, that Donohoe (and Pairvarinta Taylor) differ from this case because there was no postponement error suggested. But Donohoe was cited to the court in Neish and the latter judgment did not question it in any way. That is a further reason why it is not possible to read into the obiter passage cited above from Neish any implied suggestion that once an express statutory provision outside section 14(11) is contravened, invalidity must follow. The decision in the Court of Appeal in the present case raises the question when a postponement or other procedural error will have the effect of invalidating confiscation proceedings in the absence of the availability of section 14(11). As already demonstrated, for non postponement errors, section 14(11) is irrelevant. In the case of a postponement error, such as the infringement of section 14(8) in the present case, the Court of Appeal decision is that invalidity necessarily follows from any breach, however venial, if section 14(11) is unavailable, because jurisdiction to make an order is lost. For the respondent in this court, Mr Farrell QC realistically shrank from so absolutist a proposition. He concentrated his fire upon the fact that the Act has among its plain objectives the prompt despatch of confiscation proceedings, and on the tendency for them to drift unless firmly controlled. He submitted that if the Crowns argument were to succeed, there would be nothing to prevent confiscation proceedings being resurrected after a much longer period of inactivity than the year which disfigured the present case, and that section 14(12) would then have no effect at all. He submitted that the purpose of section 14(12) was to permit the invalidation of an order where there has been both a breach of section 15(2) by making the forfeiture order and a flagrant procedural error (the emphasis is ours). In such a case, he contended, the court has no jurisdiction to make the order. He submitted that it is necessarily a matter of degree when the breach is sufficiently flagrant for this conclusion to follow, and that there ought to be a factual enquiry in each case into what has occurred. But once that is the argument, it must follow that a procedural error does not go to jurisdiction. What, then, is the answer to the question: If section 14(11) is unavailable, when does a procedural error prevent the making of a confiscation order, or invalidate such an order if it is made? Consistently with Soneji and with the dominant purpose of POCA that confiscation is the duty of the court, to which a significant priority is to be given, the answer is not that every procedural defect does so. The correct analysis is not that a procedural defect deprives the court of jurisdiction, which would indeed mean that every defect had the same consequence. Rather, it is that a failure to honour the procedure set down by the statute raises the very real possibility that it will be unfair to make an order, although the jurisdiction to do so remains, and that unless the court is satisfied that no substantial unfairness will ensue, an order ought not to be made. This is not to deprive section 14(12) of effect; it remains effective to remove the peremptory bar of section 14(11) upon quashing confiscation orders on grounds only of procedural defect connected with postponement. Where section 14(11) applies, no such defect can alone justify quashing. Resulting unfairness, on the other hand, may, but such unfairness cannot be inferred merely from the procedural breach. Where section 14(11) does not apply, a procedural defect, not limited to postponement, will have the effect of making it wrong to make a confiscation order if unfairness to the defendant would thereby ensue. If, however, the defect gives rise to no unfairness, or to none that cannot be cured, there can be no obstacle to the making of the order, and this is what the duty of the court under POCA requires. The present case is one where no unfairness can be or is suggested; cure does not arise. If it were to arise, in another case, it is possible that there might be ways in which a potential unfairness could be cured. They might include, for example, determining in accordance with R v Waya [2012] UKSC 51; [2013] 1 AC 294, that the confiscation order must be adjusted to achieve proportionality. In a few instances, it might be possible to vary an inadvertently imposed sentence within the 56 days permitted by section 155 of the Powers of Criminal Courts (Sentencing) Act 2000. In others, the correct outcome may be that it is the forfeiture order which ought to be quashed, by way of appeal, rather than the confiscation order; priority for the latter is after all built into POCA. Each case, however, must depend on its own facts. In the event of a very long period of inactivity, the correct inference may well be that unfairness to the accused has ensued; his own affairs and, importantly, those of others may have been on hold, or may even have been conducted on the basis that the threat of confiscation had gone away, to the extent that to resume the process is unfair. The statutes intention is clearly that although confiscation may follow sentence, it is to be dealt with promptly. The duty to remove assets falling within the proceeds of crime legislation is clearly a legislative priority. The present case does not involve any exceeding of the statutory permitted period of two years, for which see sections 14(3) (5). The order was eventually made well within that time. There are inconsistent expressions of view in decisions of the Court of Appeal on the effect of exceeding the permitted period. In R v Iqbal [2010] EWCA Crim 376; [2010] 1 WLR 1985 the court held that the effect of section 14(8), read with section 14(3), is that unless an application for an extension is made before the expiry of the two year period, no further postponement is possible and no order can be made. But that decision, whilst it referred to Soneji, did not explain why the rule should be different when the permitted period (six months previously and now two years) is exceeded after an application has been made but there has been no consideration (as is required) of the existence of exceptional circumstances, as happened in Soneji. It is moreover inconsistent with R v T [2010] EWCA Crim 2703, where there were undoubtedly exceptional circumstances (the defendant several times failed to appear, at one stage having absconded abroad) but no application had been made within the two years for extension of time; the court there held that there was no obstacle to the confiscation process continuing. A similar decision was reached in R v Johal [2013] EWCA Crim 647; [2014] 1 WLR 146. There, the court had, of its own motion, adjourned anticipated confiscation proceedings on the day before the two year period expired, but had neither considered exceptional circumstances nor set any kind of period, whether by way of fixed date or otherwise. The court made the assumption in favour of the defendant that section 14(11) did not apply where the order of adjournment was not a proper postponement because of failure to specify any period, but nevertheless held that the Crown Court Recorder had been entitled subsequently to decide that there were exceptional circumstances, and that in consequence the confiscation order was valid. Since the two year period is not in question in this case, it is unnecessary to say more than that it must be especially likely that unfairness will ensue if it is exceeded without there being exceptional circumstances. Conclusion It follows that the judge applied the correct test. In this case it is not suggested that any unfairness at all has befallen the defendant in consequence of the irregularities which occurred. There was no obstacle to the making of the confiscation order, and it ought to have been made. The Crowns appeal must be allowed and the order restored. Two further matters Enough has been said to show that Lord Steyns prediction in Soneji (see para 1 above) was sadly entirely accurate. The Law Commission has expressed interest in reviewing the confiscation legislation. It may be that amongst the topics which would merit review are (1) the best way of providing realistically for the sequencing of sentencing and confiscation and (2) the status of procedural requirements in the Act. We re emphasise the message given at para 13 by this court in R v T [2010] EWCA Crim 2703. The fact that the courts will not wish to see the intention of Parliament defeated by technical points taken to stave off meritorious confiscation orders, does not mean that the obligations under the Act can be taken lightly. It is essential that listing officers, acting as they do on behalf of judges and discharging a judicial function delegated to them for day to day administration, pay close regard to the procedural steps laid down in section 14. Listing officers should be aware of the necessity to adhere to the two year limit. They should be alive to the risk that the parties may not alert them to such a problem. They should be aware of the requirement to consider whether there are exceptional circumstances before a postponement beyond two years is granted. They should be aware of the obligation not to postpone generally but to specify a date when there is to be a postponement. It would be wise for listing officers to consult the resident judge when any such problem is likely to arise. It would also be wise to keep a record of what was taken into consideration at the time, and in particular whether any exceptional circumstances arose which justified postponement. The Act must, however, be obeyed as it stands. Confiscation proceedings are particularly susceptible to drift. They must not be allowed to suffer it. They need not always be complicated, and efforts should be made by the Crown, as well as the courts, to simplify them. It will often be in the interests of defendants to delay. In overstretched police and CPS offices it may often be tempting to give priority to something other than confiscation. Courts have got to be alive to these realities. It may help to echo the useful practical guidance offered by Irwin J, giving the judgment of the Court of Appeal (Criminal Division) in Johal:

The Respondent, Lodvik Guraj, pleaded guilty to offences involving the supply of heroin and money laundering and was sentenced in July 2012 to a custodial sentence and forfeiture and deprivation orders. The judge did not make a confiscation order, but postponed the determination of that issue to take place after sentence, as he was entitled to do under s.14 Proceeds of Crime Act (POCA). The judge gave directions setting a procedural timetable for a hearing to be listed in November 2015, for the Respondent to provide certain information, and for the Crown first and then the Respondent to serve statements of case. The timetable slipped badly. The Respondent provided the required information late, the Crown did not serve its statement of case until over a year later, and two hearings were aborted due to the Crowns failure to be ready. There was eventually a properly attended hearing in May 2014, at which the Respondents counsel argued that the procedural requirements under POCA had been breached with the effect that the court no longer had jurisdiction to make a confiscation order. The Respondent argued there had been two procedural breaches. The first was that the judge had made forfeiture and deprivation orders before the confiscation proceedings, in breach of s.15(2) POCA which prohibits the court from dealing with the financial or property aspects of sentence (including deprivation and forfeiture orders) until after any confiscation proceedings have been concluded. The second breach was the Crowns failure to make an application for an extension of the postponement of the confiscation hearing, before the postponement expired by November 2012 (as required by s.14(8)). The judge accepted that there had been serious procedural error, but found that no unfairness had occurred as a result. It could not be Parliaments intention that any procedural error removed the courts jurisdiction to make an order. A confiscation order was made in a sum which had by then been agreed (subject to the jurisdiction point). The Court of Appeal took the opposite view on the jurisdiction point and quashed the confiscation order. The Crown now appeals and seeks the quashed order to be restored. The Supreme Court unanimously allows the Crowns appeal. Lord Hughes gives judgment, with which the rest of the Court agrees. The judges approach was correct. No unfairness had arisen in consequence of the irregularities which occurred, and there was no obstacle to the making of the confiscation order. S.14 allows confiscation proceedings to be postponed until after sentence, for up to two years from conviction. Postponement may be applied for by the parties or may be granted by the court of its own motion. If there is a defect in procedure relating to postponement, as there was here, s.14(11) states that this alone is not sufficient to require a confiscation order made in the defective proceedings to be quashed. However, s.14(12) dis applies s.14(11) where, before the making of a confiscation order, an order has been made which s.15(2) says should not precede a confiscation order. Therefore, where forfeiture and deprivation orders have been made prior to confiscation proceedings, the rule under s.14(11) that the court is not prevented from making confiscation orders solely because there was a defect in the procedure relating to postponement does not apply [9 14]. The issue in this case was whether the dis application of the s.14(11) bar had the consequence that a confiscation order made with a defect in postponement procedure must always be quashed [18]. Preceding the insertion of ss.14(11) and (12), there was some uncertainty as to the legal consequences of procedural errors. This was clarified in R v Soneji [2005] UKHL 49 and R v Knights [2005] UKHL 50, where the House of Lords held that the dominant purpose of POCA was to make confiscation the duty of the court. It would defeat the purpose of the confiscation legislation if orders were treated as bad simply because there had been a failure to comply with procedural provisions laid down for postponement. The correct approach was to question whether the duty to make a confiscation order was removed by procedural errors which caused injustice or unfairness to the defendant. S.14(11) was subsequently introduced with the effect of clarifying on a statutory footing that a procedural error in postponement does not on its own invalidate the confiscation procedure [15 17]. The trial judges interpretation of the operation of ss.14(11) and (12) was correct. The fact that the bar to quashing a confiscation order in certain circumstances is dis applied does not give rise to a requirement to quash in those circumstances. Where s.14(11) applies, no procedural defect relating to postponement can on its own justify quashing. Where s.14(11) does not apply, and there has been a procedural defect relating to postponement, an order may be quashed, or it may not be. Applying the principles in Soneji and Knights, the position is that a procedural defect (not limited to postponement) will have the effect of making it wrong to make a confiscation order if unfairness to the defendant would ensue. If the order would give rise to no unfairness, or to none that cannot be cured, there can be no obstacle to making the order [19 30]. The Court of Appeals interpretation of s.14(12) as prescribing that an order will be invalidated for a procedural error was wrong. This was to approach s.14(11) as if it restored the position to the pre Soneji case law which regarded procedural errors as going to the courts jurisdiction to make a confiscation order. The trial judge was correct to continue to follow the Soneji and Knights approach, whose analysis still holds good [22]. That unfairness has resulted from a procedural error may be inferred in the event of a very long period of inactivity. If the statutory permitted two year postponement period is exceeded without there being exceptional circumstances, it is likely that unfairness will ensue. The present case is one where it has been accepted that the Respondent cannot point to unfairness, injury or injustice resulting from the making of the order after the prescribed timetable. The order was eventually made within the permitted period of two years. As there is no unfairness in this case, the question of curable unfairness does not arise. If it were to arise, a potential unfairness might be cured for example by adjusting a confiscation order, or by quashing a forfeiture order. Each case must depend on its own facts [31 4].

Some time after 17.00 hrs on 20 April 2005, Melanie Rabone hanged herself from a tree in Lyme Park, Cheshire. She was 24 years of age and was the loved daughter of Mr and Mrs Rabone. At the time, she was on two days home leave from Stepping Hill Hospital, Stockport where she was undergoing treatment for a depressive disorder as an informal patient (ie one who was not detained under the Mental Health Act 1983 (the MHA)). She had been admitted to the hospital as an emergency following a suicide attempt. She was assessed by the hospital as a high risk of a further suicide attempt. Mr and Mrs Rabone have always maintained that the hospital authorities should not have allowed her home leave and that they were responsible for their daughters tragic death. They started proceedings against the Pennine Care NHS Trust (the trust) alleging negligence and breach of the right to life protected by article 2 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention). The trust eventually admitted negligence, but they have never admitted liability for breach of article 2. A number of issues were raised in the proceedings all of which are live in this appeal. The claim failed because the judge (Simon J) held that the operational duty implicit in article 2 did not apply in this case: there was no duty on the hospital authorities under article 2 to take reasonable steps to guard Melanie against the risk of suicide: [2010] EWHC 1827. He also held that, if there was such a duty, there had been no breach of it by the trust on the facts of this case. The Court of Appeal (Rix, Stanley Burnton and Jackson LJJ) dismissed Mr and Mrs Rabones appeal. The only substantive judgment was given by Jackson LJ (now reported at [2011] QB 1019). They agreed that there was no operational duty, but held that if there had been such a duty, the trust would have been in breach of it. This appeal raises a number of issues, but before I come to them, I need to set out the relevant facts. The facts Melanie Rabone was born in 1981. During 2000, she was diagnosed as suffering from depression and received medical treatment. There was some improvement in the next few years, although she had intermittent episodes of anxiety. On 4 March 2005, she tried to commit suicide by tying a pillow case round her neck. She was admitted to Stepping Hill Hospital following an emergency referral by her General Practitioner. On 7 March 2005, she was diagnosed by Dr Meagher, a consultant psychiatrist, as suffering from a severe episode of a recurrent depressive disorder. On 18 March, she was assessed as having made a sufficient recovery to be discharged. She went on holiday for a week with her family to Egypt. On 31 March, she cut both of her wrists with broken glass. Dr Meagher advised that she should be readmitted to the hospital. No beds were available on Warren Ward, which is part of Stepping Hill Hospitals Mental Health Services Unit. On 6 April, she was seen by Dr Cook, a senior house officer, as an outpatient. She was noted as having occasional thoughts of suicide and frequent thoughts of deliberate self harm. On 11 April, she tied lamp flex round her neck. She was assessed by Dr Cook who noted: Impression: severe depressive episode. ? Psychosis, High risk DSH [deliberate self harm] and suicide. Melanie agreed to an informal admission to the hospital. Dr Cook noted that, if she attempted or demanded to leave, she should be assessed for detention under the MHA. She was prescribed a course of drugs and thereafter kept under 15 minute observation. A full mental state examination was carried out on admission by Nick Tatnall, one of the ward nurses. He assessed Melanie as a moderate to high suicide risk. On 13 April, Mr Rabone expressed his grave concern to Nurse Tatnall about Melanies condition and urged that she should not be allowed home on leave or discharged too soon. There were further conversations during the week in which Melanies parents told the hospital staff that they were concerned about her impulsiveness and the risk of self harm. At 13.00 hrs on 18 April, Mr Rabone spoke to the ward to state his concern that Melanie was not improving and that she had expressed fleeting suicidal thoughts since her admission and had asked her parents to get her out of the hospital. On 19 April, Dr Meagher returned from leave. He was told that Melanie was requesting home leave. On his late afternoon ward round, he met Melanie and Mrs Rabone. He agreed to allow her to have home leave for two days and nights. Mrs Rabone said that she was concerned about Melanie coming home for the weekend, but Melanie was keen to do so. She left the ward at 19.40 hrs. She spent most of the following day with her mother. In the late afternoon, she said she was going to see a friend. Some time after 17.00 hrs, she hanged herself from a tree in Lyme Park. On 31 August 2005, Mr Rabone wrote to the trust criticising the decision to grant home leave on 19 April. On 13 September, the trust informed Mr Rabone that a thorough internal investigation was to be carried out, but that this would take some time. They said that his complaint would be put on hold until the completion of the investigation. On 15 September, they duly established a Serious Untoward Incident (SUI) investigation. On 29 September, the Coroner for the Greater Manchester South District conducted an inquest and retuned a verdict of suicide. In the summer of 2006, Mr Rabone contacted the trust on more than one occasion, expressing his concern about delays in the investigation. Its report was not sent to Mr and Mrs Rabone until 16 March 2007. The proceedings A claim form was issued on 11 August 2006. Mr Rabone claimed damages against the trust in negligence on behalf of Melanies estate under the Law Reform (Miscellaneous Provisions) Act 1934 (the 1934 Act); and he and Mrs Rabone claimed damages on their own behalf for breach of article 2 of the Convention. Although the pleaded claim for breach of article 2 was for an alleged contravention of both the positive obligation to protect life and the investigative obligation under article 2, in the event the court has only been concerned with the former. By its defence, the trust denied all allegations of breach. It also alleged that the human rights claim was time barred under section 7(5) of the Human Rights Act 1998 (the HRA), since it had been issued more than one year after Melanies death. By their reply, Mr and Mrs Rabone asked the court to extend the time limit by four months in the exercise of its discretion under section 7(5)(b) of the HRA. The 1934 Act claim was settled in May 2008 for 7,500 plus costs. It will be necessary to examine the implications of this settlement (and the admissions that were made by the trust in May 2009) for the article 2 claim later in this judgment. Article 2 in outline Before I come to the issues that arise on this appeal, I need to set the scene by making a few introductory comments about article 2 of the Convention which provides: Everyones right to life shall be protected by law. These few words have been interpreted by the European Court of Human Rights (the ECtHR) as imposing three distinct duties on the state: (i) a negative duty to refrain from taking life save in the exceptional circumstances described in article 2(2); (ii) a positive duty to conduct a proper and open investigation into deaths for which the state might be responsible; and (iii) a positive duty to protect life in certain circumstances. This latter positive duty contains two distinct elements. The first is a general duty on the state to put in place a legislative and administrative framework designed to provide effective deterrence against threats to the right to life: see Oneryildiz v Turkey (2004) 41 EHRR 20 (para 89) applying, mutatis mutandis, what the court said in Osman v United Kingdom (2000) 29 EHRR 245 (para 115). The second is what has been called the operational duty which was also articulated by the court in Osman. This was a case about the alleged failure of the police to protect the Osman family who had been subjected to threats and harassment from a third party, culminating in the murder of Mr Osman and the wounding of his son. The court said that in well defined circumstances the state should take appropriate steps to safeguard the lives of those within its jurisdiction including a positive obligation to take preventative operational measures to protect an individual whose life is at risk from the criminal acts of another (para 115). At para 116, the court went on to say that the positive obligation must be interpreted in a way which does not impose an impossible or disproportionate burden on the authorities. In a case such as Osman, therefore, there will be a breach of the positive obligation where: the authorities knew or ought to have known at the time of the existence of a real and immediate risk to the life of an identified individual or individuals from the criminal acts of a third party and that they failed to take measures within the scope of their powers which, judged reasonably, might have been expected to avoid that risk. Since the date of its decision in Osman, the court has identified other circumstances in which the operational duty may exist as I shall explain. There seems, however, to be no decision of the court which has considered whether the article 2 operational duty may exist to protect an informal (as opposed to a detained) psychiatric patient from the risk of suicide. That is the first question that arises in the present case. As I have said, the judge and the Court of Appeal held that no operational duty arose on the facts of the present case. The issues The six issues that arise in this appeal are: (i) whether the operational obligation under article 2 can in principle be owed to a hospital patient who is mentally ill, but who is not detained under the MHA; if the answer to (i) is yes, (ii) whether there was a real and immediate risk to the life of Melanie on 19 April 2005 of which the trust knew or ought to have known and which they failed to take reasonable steps to avoid; if the answer to (ii) is yes, (iii) whether Mr and Mrs Rabone were victims within the meaning of article 34 of the Convention; if the answer to (iii) is yes, (iv) whether they lost their victim status, because the trust made adequate redress and sufficiently acknowledged its breach of duty; if the answer to (iv) is no, (v) whether their claims are time barred by section 7(5) of the HRA; and if the answer to (v) is no, (vi) whether the Court of Appeal erred in holding that they would have awarded 5000 each to Mr and Mrs Rabone if their claims had been established. The first issue: can an operational duty under article 2 be owed to a hospital patient who is mentally ill, but is not detained under the MHA? As the ECtHR said at para 115 of Osman, the operational duty exists in certain well defined circumstances. The court has held that there is a duty on the state to take reasonable steps to protect prisoners from being harmed by others including fellow prisoners (Edwards v United Kingdom (2002) 36 EHRR 487) and from suicide (Keenan v United Kingdom (2001) 33 EHRR 913). The same duty exists to protect others who are detained by the state, such as immigrants who are kept in administrative detention Slimani v France (2006) 43 EHRR 49) and psychiatric patients who are detained in a public hospital (Savage v South Essex Partnership NHS Foundation Trust [2009] AC 681). The operational duty is also owed to military conscripts. Specifically, there is a duty to protect a conscript against the risk of suicide (Kilinc v Turkey (Application No 40145/98)). I have already referred to the circumstances in Osman itself, where the deceased and his family were vulnerable to attack by a third party. It would seem that the ECtHR considered that these might in principle have been sufficient to give rise to the operational duty, but the claim failed on the particular facts. More recently, the court has expanded the circumstances in which the duty is owed so as to include what may generally be described as dangers for which in some way the state is responsible. Thus in Oneryildiz, the applicant had lived with his family in a slum bordering on a municipal household refuse tip. A methane explosion at the tip resulted in a landslide which engulfed the applicants house killing his close relatives. The Grand Chamber held at para 101 that the Turkish authorities knew or ought to have known that the tip constituted a real and immediate risk to the lives of persons living close to it. They consequently: had a positive obligation under article 2 of the Convention to take such preventive operational measures as were necessary and sufficient to protect those individuals, especially as they themselves had set up the site and authorised its operation, which gave rise to the risk in question. Another example of a case in this broad category is Mammadov v Azerbaijan (Application No 4762/05) (2009) where the applicants wife set fire to herself during an attempt by police offices to evict the applicant and his family from accommodation that they were occupying. The court made it clear at para 113 that it was necessary to determine whether this specific situation triggered the states operational duty that is whether at some point during the course of the operation the state agents became aware or ought to have become aware that there was a risk of suicide. At para 115, the court continued: in a situation where an individual threatens to take his or her own life in plain view of state agents and, moreover where this threat is an emotional reaction directly induced by the state agents actions or demands, the latter should treat this threat with the utmost seriousness as constituting an imminent risk to that individuals life, regardless of how unexpected that threat might have been. In Watts v United Kingdom (2010) 51 EHRR 66, the applicant complained that her transfer from her existing care home to another care home would reduce her life expectancy. The court held at para 88 that a badly managed transfer of elderly residents of a care home could well have a negative impact on their life expectancy as a result of the general frailty and resistance to change of older people. It followed that article 2 was applicable. The operational duty was, therefore, capable of being owed in such circumstances, but for various reasons, the claim failed on the facts. These are all examples of cases where the operational duty has been held to exist. They are to be contrasted with cases involving hospital deaths resulting from what in Savage ([2009] AC 681, para 45) Lord Rodger described as casual acts of negligence. The leading Strasbourg case in this category is Powell v United Kingdom (2000) 30 EHRR CD 362. An article 2 complaint was made by parents in respect of the death of their son as a result of negligent treatment of him in hospital. Their case was that there had been a breach of the Osman operational duty. In holding that the claim was inadmissible, the court said at p 364; The court accepts that it cannot be excluded that the acts and omissions of the authorities in the field of health care policy may in certain circumstances engage their responsibility under the positive limb of article 2. However, where a contracting state had made adequate provision for securing high professional standards among health professionals and the protection of the lives of patients, it cannot accept that matters such as error of judgment on the part of a health professional or negligent coordination among health professionals in the treatment of a particular patient are sufficient of themselves to call a contracting state to account from the standpoint of its positive obligations under article 2 of the Convention to protect life. Thus to use the language of Lord Rodger in Savage, if the hospital authorities have performed their obligation to adopt appropriate general measures for the protection of the lives of patients in hospitals (for example, by ensuring that competent staff are recruited, high professional standards are maintained and suitable systems of work are put in place), casual acts of negligence by members of staff will not give rise to a breach of article 2. The question that lies at the heart of the first issue in the present case is whether the admitted casual negligence of the trust in its treatment of Melanie is to be assimilated to the Powell line of cases or whether the fact that she was a psychiatric patient (though not detained) means that this case should be assimilated to the class of cases where an operational duty arises. The judge and the Court of Appeal decided that it belongs to the Powell line of cases. Jackson LJ said: 63. On the law as it stands, I do not believe that health trusts have the article 2 operational obligation to voluntary patients in hospital, who are suffering from physical or mental illness, even where there is a real and immediate risk of death. In my view, it is not possible to separate such patients into categories and to say that the operational obligation is owed to some categories of voluntary patients, but not others. A patient undergoing major heart surgery may be at just as great a risk of death as a schizophrenic patient with suicidal ideation. 64. It is important for court users (patients, NHS trusts, legal advisers and others) that legal obligations and liabilities should be clearly defined and understood. I do not believe that it either is or should be the law that voluntary patients fall into different categories, some of whom (or some of whose families) can claim under article 2 but others of whom cannot. The remedy for clinical negligence, even where real and immediate risk of death has been disregarded, is an action in negligence. It is, therefore, necessary to attempt to discover the essential features of the cases where Strasbourg has so far recognised the existence of an operational duty. It is clear that the existence of a real and immediate risk to life is a necessary but not sufficient condition for the existence of the duty. This is because, as the Court of Appeal said, a patient undergoing major surgery may be facing a real and immediate risk of death and yet Powell shows that there is no article 2 operational duty to take reasonable steps to avoid the death of such a patient. No decision of the ECtHR has been cited to us where the court clearly articulates the criteria by which it decides whether an article 2 operational duty exists in any particular circumstances. It is therefore necessary to see whether the cases give some clue as to why the operational duty has been found to exist in some circumstances and not in others. There are certain indicia which point the way. As Miss Richards and Mr Bowen submit, the operational duty will be held to exist where there has been an assumption of responsibility by the state for the individuals welfare and safety (including by the exercise of control). The paradigm example of assumption of responsibility is where the state has detained an individual, whether in prison, in a psychiatric hospital, in an immigration detention centre or otherwise. The operational obligations apply to all detainees, but are particularly stringent in relation to those who are especially vulnerable by reason of their physical or mental condition: see, for example, Keenan (prisoner suffering from a mental disorder) and Tarariyeva v Russia (2009) 48 EHRR 609 (person detained in a prison hospital suffering from a serious physical illness). The significance of the assumption of responsibility was summarised by Lord Rodger in Mitchell v Glasgow City Council [2009] AC 874, para 66: The obligation of the United Kingdom under article 2 goes wider, however, In particular, where a state has assumed responsibility for an individual, whether by taking him into custody, by imprisoning him, detaining him under mental health legislation, or conscripting him into the armed forces, the state assumes responsibility for that individuals safety. So in these circumstances police authorities, prison authorities, health authorities and the armed forces are all subject to positive obligations to protect the lives of those in their care. When finding that the article 2 operational duty has been breached, the ECtHR has repeatedly emphasised the vulnerability of the victim as a relevant consideration. In circumstances of sufficient vulnerability, the ECtHR has been prepared to find a breach of the operational duty even where there has been no assumption of control by the state, such as where a local authority fails to exercise its powers to protect a child who to its knowledge is at risk of abuse as in Z v United Kingdom Application No 29392/95 (10 May 2001). It is not relevant for the present purposes that this was a complaint of breach of article 3 rather than article 2. A further factor is the nature of the risk. Is it an ordinary risk of the kind that individuals in the relevant category should reasonably be expected to take or is it an exceptional risk? Thus in Stoyanovi v Bulgaria (Application No 42980/04) 9 November 2010, the ECtHR rejected an application made by the family of a soldier who died during a parachute exercise. At paras 59 to 61, the court drew a distinction between risks which a soldier must expect as an incident of his ordinary military duties and dangerous situations of specific threat to life which arise exceptionally from risks posed by violent, unlawful acts of others or man made or natural hazards. An operational obligation would only arise in the latter situation. All of these factors may be relevant in determining whether the operational duty exists in any given circumstances. But they do not necessarily provide a sure guide as to whether an operational duty will be found by the ECtHR to exist in circumstances which have not yet been considered by the court. Perhaps that should not be altogether surprising. After all, the common law of negligence develops incrementally and it is not always possible to predict whether the court will hold that a duty of care is owed in a situation which has not been previously considered. Strasbourg proceeds on a case by case basis. The jurisprudence of the operational duty is young. Its boundaries are still being explored by the ECtHR as new circumstances are presented to it for consideration. But it seems to me that the court has been tending to expand the categories of circumstances in which the operational duty will be found to exist. I must now come to the central question, which is whether the lower courts were right to hold that Powell compels the conclusion that the trust owed no operational duty in the present case. The following is a summary of the submissions of Miss Carss Frisk QC. Powell and similar cases, such as Calvelli v Italy (Application No 32967/96), 17 January 2002 and Vo v France (2005) 40 EHRR 12, demonstrate the existence of a general rule that no operational duty is owed by the state in the field of medical treatment in public hospitals; but there is an exception to this general rule in the case of psychiatric patients, although only if they are detained in hospital. The existence of this exception is shown by the decision in Savage. It is true that (i) patients who are in hospital suffering from physical illnesses are often in a vulnerable state, (ii) the hospital authorities will have assumed responsibility for them and (iii) such patients may face a real and immediate risk to their lives. But the Strasbourg jurisprudence shows that these factors are not sufficient to give rise to an article 2 operational duty on the part of the state. As for psychiatric patients, there is a crucial difference between those who are informal patients voluntarily in hospital and those who are detained by the authority of the state. A psychiatric patient who is voluntarily in hospital, like a patient with a physical illness, is free to refuse treatment and leave. I accept, of course, that there are differences between detained and voluntary psychiatric patients; and there are similarities between voluntary patients who are suffering from mental illness and those who are suffering from physical illness. But the differences between the two categories of psychiatric patient should not be exaggerated. There are also important differences between informal psychiatric patients who are at real and immediate risk of suicide and patients in an ordinary healthcare setting who are at real and immediate risk of death, for example, because they are undergoing life saving surgery. As regards the differences between an informal psychiatric patient and one who is detained under the MHA, these are in many ways more apparent than real. It is true that the paradigm of a detained patient is one who is locked up in a secure hospital environment. But a detained patient may be in an open hospital with freedom to come and go. By contrast, an informal patient may be treated in a secure environment in circumstances where she is suicidal, receiving medication for her mental disorder which may compromise her ability to make an informed choice to remain in hospital and she would, in any event, be detained if she tried to leave. Informal in patients can be detained temporarily under the holding powers given by section 5 of the MHA to allow an application to be made for detention under section 2 or 3 of the MHA. The statutory powers of detention are the means by which the hospital is able to protect the psychiatric patient from the specific risk of suicide. The patients position is analogous to that of the child at risk of abuse in Z v United Kingdom, where at paras 73 74 the court placed emphasis on the availability of the statutory power to take the child into care and the statutory duty to protect children. No such powers exist, or are necessary, in the case of the capable patient in the ordinary healthcare setting. Although informal patients are not detained and are therefore, in principle free to leave hospital at any time, their consent to remaining in hospital may only be as a result of a fear that they will be detained. In Principles of Mental Health Law and Policy (2010 OUP) ed Gostin and others, the authors have written in relation to admission at para 11.03: Since the pioneering paper by Gilboy and Schmidt in 1979, it has been recognised that a significant proportion of [informal] admissions are not voluntary in any meaningful sense: something in the range of half of the people admitted voluntarily feel coerced into the admission; it is just that the coercion is situational, rather than using legal mechanisms. As regards the voluntary psychiatric patient who is at risk of suicide and the patient suffering from a life threatening physical illness who is in an ordinary hospital setting, the nature of the risk to which these two categories of patient are exposed is very different. In the case of the suicide of a psychiatric patient, the likelihood is that, given the patients mental disorder, her capacity to make a rational decision to end her life will be to some degree impaired. She needs to be protected from the risk of death by those means. The present case is a tragic illustration of this. Melanie was admitted to hospital because she was suffering from a mental disorder and had attempted to commit suicide. The very reason why she was admitted was because there was a risk that she would commit suicide from which she needed to be protected. On the other hand, the patient who undergoes surgery will have accepted the risk of death on the basis of informed consent. She may choose to avoid the risk by deciding not to go ahead with the medical treatment. In the Savage case, [2009] AC 681, it was submitted on behalf of the defendant NHS Trust that, in the light of the principle stated in Powell v United Kingdom 30 EHRR CD 362, no operational duty was owed under article 2 to take steps to protect a detained mental patient from a real and immediate risk of suicide. This submission was rejected by the House of Lords. At para 59, Lord Rodger said: The circumstances in Powells case were quite different from circumstances where a patient presents a real and immediate risk of suicide. Therefore, the decision of the European court, which I respectfully consider was correct, provides no guidance on the problem before the House. And later he said: 65. Neither Powells case. nor Dodovs case 47 EHRR 932 provides any basis whatever for the proposition that, as a matter of principle, medical staff in a mental hospital can never be subject to an operational duty under article 2 to take steps to prevent a (detained) patient from committing suicideeven if they know or ought to know that there is a real and immediate risk of her doing so. The obvious response to that proposition is: Why ever not?. As I have said, the ECtHR has not considered whether an operational duty exists to protect against the risk of suicide by informal psychiatric patients. But the Strasbourg jurisprudence shows that there is such a duty to protect persons from a real and immediate risk of suicide at least where they are under the control of the state. By contrast, the ECtHR has stated that in the generality of cases involving medical negligence, there is no operational duty under article 2. So on which side of the line does an informal psychiatric patient such as Melanie fall? I am in no doubt that the trust owed the operational duty to her to take reasonable steps to protect her from the real and immediate risk of suicide. Whether there was a real and immediate risk of suicide on 19 April 2005 (and if so whether there was a breach of duty) is the second issue that arises on this appeal. But if there was a real and immediate risk of suicide at that time of which the trust was aware or ought to have been aware, then in my view the trust was under a duty to take reasonable steps to protect Melanie from it. She had been admitted to hospital because she was a real suicide risk. By reason of her mental state, she was extremely vulnerable. The trust assumed responsibility for her. She was under its control. Although she was not a detained patient, it is clear that, if she had insisted on leaving the hospital, the authorities could and should have exercised their powers under the MHA to prevent her from doing so. In fact, however, the judge found that, if the trust had refused to allow her to leave, she would not have insisted on leaving. This demonstrates the control that the trust was exercising over Melanie. In reality, the difference between her position and that of a hypothetical detained psychiatric patient, who (apart from the fact of being detained) was in circumstances similar to those of Melanie, would have been one of form, not substance. Her position was far closer to that of such a hypothetical patient than to that of a patient undergoing treatment in a public hospital for a physical illness. These factors, taken together, lead me to conclude that the ECtHR would hold that the operational duty existed in this case. The second issue: was there a real and immediate risk to the life of Melanie on 19 April 2005 of which the trust knew or ought to have known and which they failed to take reasonable steps to avoid? In the light of their conclusions on the first issue, both the judge and the Court of Appeal understandably dealt with all the remaining issues more briefly than they might otherwise have done. In relation to the second issue, Simon J accepted the evidence of Dr Caplan (the trusts expert psychiatrist) that the risk of suicide was approximately 5% on 19 April (after Melanie left the hospital), increasing to 10% on 20 April and 20% on 21 April. The judge said that the risk was low to moderate (but nevertheless, significant). He concluded that there was a real, but not an immediate risk. In assessing what steps it was reasonable to take to avoid the risk and taking account of the need to respect Melanies personal autonomy, he would not have held that there had been a breach of article 2. The Court of Appeal agreed that the risk was real, but they also considered that it was immediate. On the question of breach, they said that there was a simple and obvious way of preventing the risk from eventuating, namely by refusing Melanies request for home leave. If that request had been refused, the judge found that she would not have insisted on going home contrary to medical advice. In these circumstances, the Court of Appeal held that, if there was an operational duty, the trust failed to comply with it. The trust has appealed against all aspects of the Court of Appeals decision in relation to this issue. They say that the risk was neither real nor immediate and in any event there was no breach of the operational duty. Miss Carss Frisk emphasises the fact that, as has often been said, the threshold for the operational duty (real and immediate risk to life) is high: see, for example, per Lord Rodger in the Savage case [2009] AC 681, para 41 and para 66, where he said that given the high threshold, a breach of the duty will be harder to establish then mere negligence. See also per Baroness Hale at para 99. I accept that it is more difficult to establish a breach of the operational duty than mere negligence. This is not least because, in order to prove negligence, it is sufficient to show that the risk of damage was reasonably foreseeable; it is not necessary to show that the risk was real and immediate. But to say that the test is a high one or more stringent than the test for negligence does not shed light on the meaning of real and immediate or on the question whether there was a real and immediate risk on the facts of any particular case. It seems to me that the courts below were clearly right to say that the risk of Melanies suicide was real in this case. On the evidence of Dr Caplan, it was a substantial or significant risk and not a remote or fanciful one. Dr Caplan and Dr Britto (the claimants expert psychiatrist) agreed that all ordinarily competent and responsible psychiatrists would have regarded Melanie as being in need of protection against the risk of suicide. The risk was real enough for them to be of that opinion. I do not accept Miss Carss Frisks submission that there had to be a likelihood or fairly high degree of risk. I have seen no support for this test in the Strasbourg jurisprudence. As for whether the risk was immediate, Miss Carss Frisk submits that the Court of Appeal failed to take into account the fact that an immediate risk must be imminent. She derives the word imminent from what Lord Hope said in Van Colle v Chief Constable of the Hertfordshire Police [2009] AC 225, para 66. In the case of In re Officer L [2007] 1 WLR 2135, para 20, Lord Carswell stated that an apt summary of the meaning of an immediate risk is one that is present and continuing. In my view, one must guard against the dangers of using other words to explain the meaning of an ordinary word like immediate. But I think that the phrase present and continuing captures the essence of its meaning. The idea is to focus on a risk which is present at the time of the alleged breach of duty and not a risk that will arise at some time in the future. I think that this approach is supported by some of the Strasbourg jurisprudence. In Opuz v Turkey (2010) 50 EHRR 695, para 134, the court concluded that there was a continuing threat to the health and safety of the victims (emphasis added) and, therefore, that there was an immediate risk. In Renolde v France (2009) 48 EHRR 969, the deceased had attempted suicide 18 days before his death and thereafter continued to show signs of worrying behaviour, but made no further attempts at self harm. The court said at para 89: Although his condition and the immediacy of the risk of a fresh suicide attempt varied, the court considers that that risk was real and that [the deceased] required careful monitoring in case of any sudden deterioration. The risk of death was sufficiently immediate for the article 2 claim to succeed. It was not necessary for the risk to be apparent just before death. In my view, the Court of Appeal were right to say that the risk of suicide in the present case was immediate when Melanie was allowed home on 19 April 2005. There was a real risk that she would take her life during the two day period of home leave. That risk existed when she left the hospital and it continued (and increased) during the two day period. That was sufficient to make the risk present and continuing and, therefore, immediate. The judge gave no reasons for reaching the opposite conclusion. Finally, there is the question of breach of the duty. There is no doubt that the trust was or ought to have been aware of the risk. Did they take all steps reasonably necessary to avoid the risk? Miss Carss Frisk submits that Dr Meagher had a margin of discretion which was wider than the law of negligence allows so that the trusts admission of negligence should not automatically lead to a finding of breach of the article 2 duty. Bearing in mind the low levels of risk found by the judge, she submits that it was within Dr Meaghers margin of discretion to consider that it was appropriate for Melanie to go home on 19 April 2005. I cannot accept this submission. The standard demanded for the performance of the operational duty is one of reasonableness. This brings in consideration of the circumstances of the case, the ease or difficulty of taking precautions and the resources available: per Lord Carswell in In re Officer L ([2007] 1 WLR 2135, para 21). In this case, it also required a consideration of respect for the personal autonomy of Melanie. But it was common ground that the decision to allow Melanie two days home leave was one that no reasonable psychiatric practitioner would have made. In these circumstances, it seems to me that recourse to the margin of appreciation is misplaced. The trust failed to do all that could reasonably have been expected to prevent the real and immediate risk of Melanies suicide. The Court of Appeal were right so to hold. The third issue: were Mr and Mrs Rabone victims within the meaning of article 34 of the Convention? Section 7(1) of the HRA provides that a claim that a public authority has acted in a way which is incompatible with a Convention right may be brought before the courts only if the person bringing the complaint is (or would be) a victim of the unlawful act. Section 7(7) provides that a person is a victim of an unlawful act only if he would be a victim for the purposes of article 34 of the Convention if proceedings were brought in the ECtHR in respect of that act. Miss Carss Frisk submits that Mr and Mrs Rabone would not be treated as victims within the meaning of article 34. She relies on the reasoning of Lord Scott in the Savage case [2009] AC 681, para 5. Lord Scott said that he could well understand how a member of a deceaseds family may be regarded as a victim for the purposes of the article 2 investigative obligation. But he could not understand how a close family member could claim to be a victim for the purpose of the article 2 substantive obligations. He said that it was not any part of the function of article 2(1) to add to the class of persons who under ordinary domestic law can seek financial compensation for a death an undefined, and perhaps undefinable, class composed of persons close to the deceased who have suffered distress and anguish on account of the death. Both the judge and the Court of Appeal rejected the trusts submissions. In my view, they were right to do so. The ECtHR has repeatedly stated that family members of the deceased can bring claims in their own right both in relation to the investigative obligation and the substantive obligations. Examples of such cases are Yasa v Turkey (1999) 28 EHRR 408, para 64; Edwards v United Kingdom at para 106; Renolde v France (2009) 48 EHRR 969, para 69; and Kats v Ukraine (2010) 51 EHRR 1066, para 94. Miss Carss Frisk realistically accepts that the Strasbourg jurisprudence is clear on this. She points out that the question of victim status was not argued in any of these cases, so that the weight to be accorded to them is diminished. But there is no basis for believing that the ECtHR would depart from this consistent line of authority if the contrary were argued. In any event, the contrary was argued in Yasa v Turkey (1998) 28 EHRR 408 where the court held that a nephew was a victim. It follows that the observations of Lord Scott in Savage (with which no other member of the House expressed agreement) are not correct. They seem to have been made without the benefit of a consideration of the Strasbourg jurisprudence on the point. The fourth issue: did Mr and Mrs Rabone lose their victim status as a result of the settlement of their negligence claim? It is common ground that a person ceases to be a victim within the meaning of article 34 of the Convention if two conditions are satisfied. These are that the domestic public authority has (i) provided adequate redress and (ii) acknowledged, either expressly or in substance, the breach of the Convention. There is ample ECtHR jurisprudence to support both propositions. It is sufficient to refer to the early case of Eckle v Germany (1982) 5 EHRR 1, para 66 and the recent case of R.R v Poland (Application No 27617/04), 26 May 2011 at para 97. Both conditions must be satisfied. On behalf of the trust, it is submitted that Mr and Mrs Rabone lost their victim status because both conditions were satisfied in the present case. But before I address this submission, I should consider whether the settlement of itself has deprived Mr and Mrs Rabone of victim status. As I have said, Mr Rabone accepted 7,500 (2,499 for funeral expenses and the balance as general damages for Melanies pain and suffering during the two months period before she died) in settlement of the 1934 Act negligence claim. The effect of the settlement Miss Carss Frisk submits that Mr and Mrs Rabone lost their victim status by reason of the settlement. She says that, in the context of a complaint of medical negligence leading to death, a claimant loses the status of a victim for the purposes of pursuing a claim for breach of article 2 if he or she settles the negligence claim. As I understand it, this is regardless of whether the settlement sum is lower than awards made by the ECtHR in similar cases. Counsel relies on a number of authorities in support of this submission, in particular Powell (see para 19 above) and Rowley v United Kingdom (Application No 31914/03), February 2005. In Powell, the parents of a 10 year old boy who died as a result of misdiagnosis by doctors brought claims including for negligence pursuant to the 1934 Act (on behalf of the boys estate) and pursuant to the Fatal Accidents Act 1976 on behalf of themselves. The Health Authority admitted negligence and paid a sum in settlement. The parents persisted with other claims relating to the falsification of medical records after their sons death. These claims were unsuccessful and the parents complained to Strasbourg. It is important to note that the parents complaint before the ECtHR was that there had been a breach of the procedural obligation under article 2 to conduct an effective investigation into their sons death. The court said at p365: Of greater significance for the court is the fact that the applicants settled their civil action in negligence against the responsible health authority and did not pursue individual claims against the doctors. In the courts opinion, the applicants by their decision closed another crucially important avenue for shedding light on the extent of the doctors responsibility for their sons death. Having regard to the above considerations the court finds that it is not open to the applicants to complain under article 2 of the Convention that there was no effective investigation into their sons death. In its opinion, where a relative of a deceased person accepts compensation in settlement of a civil claim based on medical negligence he or she is in principle no longer able to claim to be a victim in respect of the circumstances surrounding the treatment administered to the deceased person or with regard to the investigation carried out into his or her death (emphasis added). The focus of the courts reasoning seems to have been on the effect of the settlement on the parents ability to complain about the adequacy of the investigation, rather than on their ability to pursue any other claim for compensation for breach of article 2. Despite the existence of the words that I have emphasised, it is not clear what claim for compensation (if any) the parents wished to pursue. The court emphasised that, by their decision to settle their negligence claim, the parents closed another and crucially important avenue for shedding light on the extent of the doctors responsibility for their sons death. In other words, by settling their claim the parents lost the right to have an effective investigation by a civil court and they could not seek to pursue that right under the Convention. It is true that in the words that I have emphasised the court also said that settlement prevented the applicants from being able to claim to be a victim in respect of the circumstances surrounding the treatment administered to the deceased person. But there is no amplification of this statement. Since this was not the focus of the issues in the case or the discussion in the judgment, I do not think that it provides a clear basis for holding that the settlement of a claim for compensation for negligence arising from a death of itself prevents an individual from pursuing a claim for compensation for breach of article 2. In Rowley, the applicants son had drowned in the bath at a residential care home. The applicant threatened to issue proceedings against the City Council, but accepted a settlement offer of compensation of 1,750 and a formal apology. The complaint to the ECtHR included an allegation that there had been a violation of article 2. The complaint was declared inadmissible. The court noted that the applicant settled her civil claims for damages against the Council on the basis of damages and a formal apology. But the judgment does not state whether the settlement sum of 1,750 was only in respect of one claim for compensation arising from the death and, if it was, what effect this would have on the ability of the applicant to make a different claim for compensation for breach of article 2. In short, I do not consider that the decisions in Powell and Rowley clearly show that the ECtHR takes the view that acceptance of compensation in settlement of a domestic law cause of action arising from a death necessarily means that an individual can no longer be regarded as a victim for the purposes of an article 2 claim arising from the same death. There is, however, a line of cases in which the court has held that, by accepting compensation in settlement of a domestic remedy for the consequences of a death, an applicant has renounced all claims for the consequences of the death including claims for breach of article 2. Where this occurs, the applicant ceases to be a victim and cannot complain of a breach of article 2. Thus in Caraher v United Kingdom (2000) 29 EHRR CD 119, the applicant accepted a sum in settlement of all claims on her own behalf and on behalf of the estate and dependants of the deceased. It was said by the court that where a relative accepts a sum of compensation in settlement of civil claims and renounces further use of local remedies therefore, he or she will generally no longer be able to claim to be a victim in respect of those matters. It is material that the settlement was of all claims on behalf of the applicant herself, the estate and the dependants. A further example of the same reasoning is Hay v United Kingdom (Application No 41894/98), 17 October 2000. In that case, the ECtHR declared inadmissible a complaint under article 2 in respect of the shooting dead by the police of the applicants brother, where civil proceedings against the police had been settled. It made no difference that it was a term of the settlement that it was made without prejudice to the right of those representing the estate of the deceased to pursue a petition before the ECtHR. I do not find it easy to extract from the Strasbourg jurisprudence a clear statement of the effect of the settlement of a domestic law claim on the ability of an individual to pursue a corresponding Convention claim. The court does not, however, seem to adopt a strict approach to the interpretation of a settlement. It does not say that a right of action is preserved unless it has clearly been compromised or renounced. That is demonstrated by the decision in Hay. Rather, the court seems to adopt a broad approach to determining the true meaning and effect of a settlement. As they said in Caraher, if relatives settle their domestic law claims arising from a death, they will generally cease to be victims in relation to a corresponding Convention claim. The phrase corresponding Convention claim is mine. By this I mean that, if (i) the domestic law claim that is settled was made by the same person as seeks to make an article 2 claim and (ii) the head of loss embraced by the settlement broadly covers the same ground as the loss which is the subject of the article 2 claim, then I would expect the ECtHR to say that, by settling the former, the claimant is to be taken to have renounced any claim to the latter. To return to the facts of the present case, I do not accept that by settling the 1934 Act negligence claim on behalf of Melanies estate, Mr Rabone renounced an article 2 claim on behalf of himself and Mrs Rabone for damages for non pecuniary loss for their bereavement. No such claim had been made in the negligence proceedings because such a claim was not available in English law. That is because section 1A of the Fatal Accidents Act 1976 provides that a claim by parents for damages for bereavement for the loss of a child (currently fixed by section 1A(3) at 11,800) shall only be for the benefit of the parents of a minor and Melanie was more than 18 years of age at the date of her death. In these circumstances, the settlement of the 1934 Act claim did not amount to an implied renunciation of any article 2 claim. In the absence of an express renunciation, the settlement of itself had no legal effect on the status of Mr and Mrs Rabone as victims for the purpose of their article 2 claim. It remains to be considered whether (as the Court of Appeal held) the sum of 7,500 was nevertheless adequate redress. Adequate redress As I have said, the redress that the trust has made as a result of Melanies death has been limited to payment of compensation to Mr Rabone in respect of his claim on behalf of the estate. Nothing has been paid to Mr or Mrs Rabone to compensate them for their bereavement. No decision of the ECtHR has been cited to us which supports the surprising proposition that the compensation that has been paid in respect of the estates losses would be considered by the court to be adequate redress in respect of the personal losses of Mr and Mrs Rabone. Miss Richards relies on Bubbins v United Kingdom (2005) 41 EHRR 458 as indicating that the ECtHR would not accept this proposition. The applicants brother was shot dead by an armed police officer during a police operation. The court held that there had been a breach of article 13, but not of article 2. In relation to the claim under article 13, the court noted at para 172 that the applicant had no right to claim compensation for non pecuniary damage suffered by her. The most that she could claim was funeral expenses on behalf of the estate under the 1934 Act. It is true that this case was concerned with article 13 (the adequacy of domestic remedies) and not with the separate question of victim status. But it is difficult to believe that the ECtHR would hold that an applicant had received adequate redress through proceedings that would not be regarded as an adequate remedy under article 13. The importance of compensation for the non pecuniary damage flowing from a breach of article 2 was emphasised in Bubbins at para 171: compensation for non pecuniary damage flowing from the breach [of article 2] should, in principle, be available as part of the range of redress. The court concluded that the applicant had no prospect of obtaining compensation for non pecuniary damage suffered by her if she established a breach of article 2. Accordingly, there had been a breach of article 13. Although Bubbins is not precisely in point, it provides a strong indication of the view that the ECtHR would take on the question whether the settlement sum of 7,500 would be adequate redress for the article 2 claim in the present case. In my opinion, it would hold that there has been no adequate redress for the simple reason that there has been no compensation at all for the non pecuniary damage suffered by Mr and Mrs Rabone as a result of the breach of article 2. It might be said that it is appropriate to look at the matter more broadly and ask whether the sum of 7,500 was adequate redress for the claims on behalf of the estate and on behalf of Mr and Mrs Rabone themselves, when these claims are aggregated. In Gafgen v Germany (2011) 52 EHRR 1, para 116, the court said that the question whether redress is appropriate and sufficient is dependent on all the circumstances of the case, having regard in particular, to the nature of the Convention violation at stake. It might be argued that, if an award to the estate of a deceased person is generous and an award to the familys victims is low, the court would say that there has been adequate redress in all the circumstances of the case. I accept that the court might adopt this position in some circumstances. But I am sure that it would not do so in the present case. First, Mrs Rabone has been awarded no compensation at all. Neither has Mr Rabone except as personal representative. If Melanie died intestate, Mr and Mrs Rabone would take in equal shares ahead of Melanies sisters Amanda and Emma. Secondly, although the sum awarded to the estate was reasonable, it was by no means unduly generous; and (as we shall see) the Court of Appeal assessed the damages for breach of article 2 at 10,000, a sum significantly higher than the settlement figure. It is true that the correctness of that assessment is under challenge in this appeal (the sixth issue). But for reasons that I give later, there is no justification for interfering with the Court of Appeals assessment. In these circumstances, I do not see how it can reasonably be said that the settlement figure was adequate redress for the article 2 claim of Mr and Mrs Rabone. For these reasons, I would hold that the trust did not make adequate redress and therefore that Mr and Mrs Rabone did not lose their victim status by accepting the settlement figure. Acknowledgement In view of my conclusion on the issue of the adequacy of redress, it is not necessary for me to consider the further question of whether Mr and Mrs Rabone lost their victim status because the trust acknowledged expressly or in substance their breach of the article 2 operational duty. But since the matter was fully argued and it raises a point of some importance, I shall deal with it. It is common ground that there was no express acknowledgement of a breach of article 2 in this case. But it is submitted on behalf of the trust that there was such an acknowledgement in substance. It is necessary to set out a little of the relevant history. As I have said, the claims were (i) by Mr Rabone alone for negligence on behalf of Melanies estate under the 1934 Act and (ii) by Mr and Mrs Rabone on their own behalf for breach of article 2. In May 2008, the negligence claim was settled by a consent order which provided for payment of 7,500 in respect of the estates claim. There was no admission of liability in relation to either claim. The consent order explicitly recorded that Mr and Mrs Rabone were continuing with their claim under the HRA. The trust continued to deny negligence until 6 May 2009, when their solicitors wrote a letter headed letter of admission. They wrote that the trust admitted that the common law duty of care owed to Melanie was breached when she was allowed home on 19 April 2005. They went on to state expressly that they continued to deny the article 2 claims. On the following day, the trusts chief executive wrote as follows: I have seen a copy of the report provided by my Trusts independent psychiatric expert, Dr Caplan, concerning the standard of care provided to your daughter Melanie during her admission to our Trusts unit in Stepping Hill Hospital in April 2005. The Trust accepts Dr Caplans view that the decision to allow Melanie to have two days leave on 19 April fell below the standard of care which we owed to her at that time. Having learned of Dr Caplans view and in addition to the condolences I expressed to you in September 2005, I wanted to write personally to you on behalf of the Trust to say how deeply sorry I am for the error we made on 19 April 2005. I realise what deep grief Melanies death has caused to you and I know that this apology will not undo what has happened, but I wanted you to know how sorry we are for the error we have made. Miss Richards submits that nothing less than a clear and unequivocal acknowledgement of a violation of article 2 would have sufficed. She points out that the importance of the requirement that there be an acknowledgment of the breach of the Convention has been repeatedly emphasised by the ECtHR: see, for example, Jensen v Denmark (Application No 48470/99), Ludi v Switzerland (1993) 15 EHRR 173, para 34 and Gafgen v Germany 52 EHRR 1, para 120. She says that the trust have not acknowledged the consequences of their error and have not accepted responsibility for Melanies death. It follows that there has been no acknowledgement of its breach of article 2 and, without such an acknowledgement, Mr and Mrs Rabone would remain victims entitled to bring their claim. In my view, the trust have clearly accepted that their error was the cause of Melanies death. The chief executives letter of 7 May (in particular its last paragraph) contained a clear admission that the negligence for which the chief executive was apologising had caused Melanies death. But the question remains whether that admission was a sufficient acknowledgment of the breach of article 2 to result in the loss of victim status. The Strasbourg authorities shed some light on this question. In Nikolova and Velichkova v Bulgaria (2009) 48 EHRR 915, the applicants were relatives of the deceased police officer who had died as a result of an attack on him by two fellow officers. The two officers were convicted of causing the death by intentional grievous bodily harm and the applicants were awarded compensation in the criminal proceedings. The applicants were also awarded compensation in civil proceedings that they brought against the police authority. They then made a complaint to the ECtHR that there had been a breach of article 2. The court upheld the complaint. The applicants had not lost their victim status since the domestic authorities had failed to provide adequate redress. But the court also held at para 51 that the judgments convicting the police officers and awarding compensation to the applicants amounted to an acknowledgement in substance that the death of Mr Nikolov had been in breach of article 2 of the Convention (emphasis added). The importance of the words that I have emphasised is that they show that, despite the differences that there may be between the elements of a violation of the substantive article 2 obligation and the elements of criminal and/or civil liability in domestic law, an admission or a finding of criminal or civil liability will often be sufficient to amount to an acknowledgement in substance of a breach of article 2. In Rowley (see para 54 above), the court said: In the present case there have been numerous findings that the applicants son was subject to inadequate care while under the responsibility of the council. The internal complaints procedure by the Independent Investigator found defects in procedures as did the councils Senior Safety Officer. Furthermore, the council pleaded guilty to an offence under the Health and Safety at Work Act 1974 for failure so far as reasonably practicable to ensure Malcolms safety and was fined a substantial amount. The court would also note that the applicant settled her civil claims for damages against the council on the basis of damages and a formal apology to the effect that their failure in standards in care and safety had resulted in the death of her son. . Having regard to the considerations above and the fact that the applicant settled her claims in civil proceedings accepting compensation and an apology, the court finds that she may no longer, in these circumstances, claim to be a victim of a violation of the Convention. None of the domestic institutions in Rowley had dealt expressly with article 2 or made findings on whether there had been a real or immediate risk to the life of the applicants deceased son. And yet the court held that the findings that were made and the apology and payment of compensation for negligently causing the death amounted to a sufficient acknowledgment in substance of the breach of article 2. In both Nikolova and Rowley, the article 2 claim was declared to be inadmissible. These cases show that an authority may in substance acknowledge a breach of article 2 without making an explicit admission of the elements of the breach of the article 2 duty (ie that there was a real and immediate risk etc). To insist on that would be tantamount to insisting on an express acknowledgement of the breach. In the present case, the trust admitted that they had negligently caused Melanies death and they paid compensation to reflect that admission. There is a considerable degree of overlap between the claim in negligence and the article 2 claim. The essential features of the case against the trust were that: (i) Melanie was a vulnerable patient in the care of the trust at the material time; (ii) she was known to be a suicide risk; (iii) the trust acted negligently in failing to take reasonable steps to protect her; and (iv) their negligence caused her death. In substance these features formed the basis of the claim in negligence and the claim for breach of the article 2 operational duty. Had it been necessary to decide the point, I would have held that the trust in substance acknowledged their breach of the article 2 duty. The fifth issue: limitation Section 7(5) of the HRA provides that proceedings under section 7(1)(a) (a claim that a public authority has acted in a way which is incompatible with a Convention right) must be brought before the end of (a) the period of one year beginning with the date on which the act complained of took place; or (b) such longer period as the court or tribunal considers equitable having regard to all the circumstances. Melanie died on 20 April 2005. Proceedings were issued on 11 August 2006, almost four months after the expiry of the one year limitation period. The question that arises, therefore, is whether it was equitable to extend the one year period by almost four months having regard to all the circumstances. The relevant principles are not in dispute. The court has a wide discretion in determining whether it is equitable to extend time in the particular circumstances of the case. It will often be appropriate to take into account factors of the type listed in section 33(3) of the Limitation Act 1980 as being relevant when deciding whether to extend time for a domestic law action in respect of personal injury or death. These may include the length of and reasons for the delay in issuing the proceedings; the extent to which, having regard to the delay, the evidence in the case is or is likely to be less cogent than it would have been if the proceedings had been issued within the one year period; and the conduct of the public authority after the right of claim arose, including the extent (if any) to which it responded to requests reasonably made by the claimant for information for the purpose of ascertaining facts which are or might be relevant. However, I agree with what the Court of Appeal said in Dunn v Parole Board [2009] 1 WLR 728, paras 31, 43 and 48 that the words of section 7(5)(b) of the HRA mean what they say and the court should not attempt to rewrite them. There can be no question of interpreting section 7(5)(b) as if it contained the language of section 33(3) of the Limitation Act 1980. The judge expressed his final conclusion on the limitation issue at para 131: However, in my judgment, the decisive factor is that, at this stage of the trial process, I am in a position to conclude that there is no merit in the claims to which this issue is relevant. In addition, the contents of the SUI Report, the formal acknowledgement of its negligence by the Trust and its letter of apology are very substantial matters to weigh in the balance when considering whether it would be right to extend time. For these reasons, he refused to extend time. The Court of Appeal agreed that the fact that the claim was doomed to failure was the decisive factor. They said that, if the claim were otherwise well founded, they would have been inclined to extend time. In the light of my conclusions on the earlier issues in the case, I would reject the premise on which the judge and the Court of Appeal exercised the section 7(5)(b) discretion. It follows that I must exercise the discretion afresh. The extension of time that is sought is less than four months. There is no suggestion that the evidence has become less cogent as a result of the delay in issuing the proceedings or that the trust have been prejudiced in any other way by the delay. Mr and Mrs Rabone made a formal complaint within five months of Melanies death. They were advised that their complaint would be put on hold until an internal investigation had been completed. Their evidence to the judge was that they believed that the trust would produce a reasonably prompt report providing a proper explanation about the decision to allow Melanie to have home leave: see per Simon J at para 129. They said that their waiting for the report was a material factor in their decision not to issue proceedings. As the judge found, if the investigation which began in September 2005 had produced a reasonably prompt report, they might have issued proceedings sooner. The investigation report was not in fact sent to them until 16 March 2007. A number of points are made on behalf of the trust. First, a claim could have been brought at the time of the formal letter of complaint on 31 August 2005. Secondly, Mr and Mrs Rabone accepted that, in the year following the death, they were aware in general terms of the HRA and the possibility of bringing a legal claim. Even then, they did not seek legal advice, but only proceeded with a claim after a discussion with a friend in June or July 2006. Thirdly, they could not have been waiting for the trusts final investigation report, because, in the event, they issued proceedings before a copy of it was sent to them. I accept that Mr and Mrs Rabone could have issued proceedings within the one year period. But in my view they acted reasonably in not issuing proceedings, rather than waiting for the report (as they were encouraged by the trust to do). The strength of this point is not undermined by the fact that, in the end, they felt that the delay in publishing the report to them was so great that they could wait no longer and decided to issue proceedings before seeing it. In summary, the points which strongly militate in favour of granting the extension of time are that the required extension is short; the trust have suffered no prejudice by the delay in the issue of the proceedings; Mr and Mrs Rabone acted reasonably in holding off proceedings in the hope that the report might obviate the need for them; and (most important of all) they have a good claim for breach of article 2. I would, therefore, grant the necessary extension of time. The sixth issue: quantum of damages In the light of the judges decision on the main issues, the question of remedy did not arise. Nevertheless, he dealt with it briefly. He noted that the real purpose of Mr and Mrs Rabone was not to claim damages, but rather to achieve a public recognition of the serious errors that led to Melanies death. He said that a proper award of damages would have been a modest sum which recognised the breaches of their Convention rights. He would have assessed the sum at 1,500 each for Mr and Mrs Rabone. At para 112, Jackson LJ said: If the issue were to arise, I would incline to the view that the judges award of 3,000 (1,500 for each claimant) was too low. Looking at the sums awarded by the Strasbourg court in other cases, I would have proposed an award of 10,000 (5,000 for each claimant). In my view, that is a more appropriate nominal sum. It also reflects what would have been the claimants entitlement under the Fatal Accidents Act, if Melanie would have been under 18. The power to award damages for breach of a Convention right derives from section 8(3) of the HRA. No award of damages should be made unless, taking account of all the circumstances of the case, including any other relief or remedy granted, the court is satisfied that the award is necessary to afford just satisfaction: see Lester, Pannick and Herberg: Human Rights Law and Practice 3rd ed (2007), para 2.8.3. In R (Greenfield)v Secretary of State for the Home Department [2005] 1 WLR 673, para 9, Lord Bingham approved the observations of the Court of Appeal in Anufrijeva v Southwark London Borough Council [2004] QB 1124 at paras 52 53 that the remedy of damages generally plays a less prominent role in actions based on breaches of the articles of the Convention, than in actions based on breaches of private law obligations. [w]here an infringement of an individuals human rights has occurred, the concern will usually be to bring the infringement to an end and any question of compensation will be of secondary, if any, importance. It is also important to keep in mind section 8(4) of the HRA which provides that, in determining whether to award damages or the amount of an award, the court must take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under article 41 of the Convention. As Lord Bingham said in Greenfield (para 19), our courts should therefore look to Strasbourg for precedents on the levels of compensation. With those considerations in mind, Miss Carss Frisk submits that the Court of Appeal should not have interfered with the judges assessment: the decision to award 1,500 to each claimant was not an error of law or principle. There are many Strasbourg cases in which the court has awarded the victims of a breach of article 2 compensation for non pecuniary loss. No decision has been cited to us which purports to be a guideline case in which the range of compensation is specified and the relevant considerations are articulated. It is, therefore, necessary for our courts to do their best in the light of such guidance as can be gleaned from the Strasbourg decisions on the facts of individual cases. In Savage (No 2) [2010] EWHC 865 (QB), Mackay J considered a substantial number of decisions of the ECtHR in which compensation has been awarded for non pecuniary loss to victims of a breach of the substantive article 2 obligation. At para 97, he said that the range of awards for such loss was between 5,000 and 60,000. This summary of the effect of the cases had not been disputed before us. What they show is that the sums awarded are fairly modest, but nevertheless within a considerable range. This is not surprising, because Strasbourg does not award a fixed conventional figure for this head of loss. One would expect the court to have regard to the closeness of the family link between the victim and the deceased, the nature of the breach and the seriousness of the non pecuniary damage that the victim has suffered. Factors which will tend to place the amount of the award towards the upper end of the range are the existence of a particularly close family tie between the victim and the deceased; the fact that the breach is especially egregious; and the fact that the circumstances of the death and the authoritys response to it have been particularly distressing to the victims. Conversely, factors which will tend to place the award towards the lower end of the range are the weakness of the family ties, the fact that the breach is towards the lower end of the scale of gravity and the fact that the circumstances of the death have not caused the utmost distress to the victims. There is a passing reference to some of these considerations in Kallis v Turkey (2009) ECHR 1662 (27 October 2009), where the court awarded 35,000 to each of the applicants (parents of the deceased), saying that an award should be made under that head bearing in mind the family ties between the applicants and the victim of the killing and the seriousness of the damage sustained, which cannot be compensated for solely by a finding of a violation. I am in no doubt that the award of 1,500 each to Mr and Mrs Rabone was too low. It may be that the judge was strongly influenced by the fact that their main purpose in bringing these proceedings was not to obtain an award of damages. That is true, but the fact is that they did make a claim for damages and it is necessary to make a proper assessment in the light of such assistance as can be derived from the Strasbourg cases. I would emphasise the following points. First, the family ties between Mr and Mrs Rabone and Melanie were very strong. They were a close family. They had been on holiday to Egypt with Melanie for a week in March 2005. They had shown the utmost concern for her mental health and had done all they could to support her. Secondly, they had expressed their anxiety to the hospital authorities about the dangers of allowing Melanie to come home on leave for the weekend of 19 to 21 April 2005 and urged them not to allow it. Thirdly, the fact that the very risk which they feared and warned the authorities against eventuated must have made the death all the more distressing for them. This was a bad case of breach of the article 2 operational duty. In my view, it merited an award well above the lower end of the range of awards. There is real force in Miss Richards submission that 5,000 each was too low, but there is no appeal by Mr and Mrs Rabone against the decision on the Court of Appeal on this issue. I would reject the trusts argument that the Court of Appeal should not have interfered with the judges awards. Overall conclusion For all these reasons, I would allow this appeal and award Mr and Mrs Rabone 5,000 each. LORD WALKER I agree that this appeal should be allowed for the reasons set out in the judgment of Lord Dyson. I also agree with the further observations in the judgments of Lady Hale, Lord Brown and Lord Mance. LADY HALE A hospital trust, in breach of its duty of care towards its patient, allowed a young woman, who was suffering from a severe depressive episode with psychotic symptoms and had been admitted a week earlier after a serious suicide attempt, to go home on leave for two days. The only support plan was the care of her parents who were not in favour of her being allowed home. The following day she hanged herself from a tree in a well known local beauty spot, at last succeeding in the suicide which she had previously attempted and seriously threatened even more often. The hospital trust has admitted liability to her and paid a sum in compensation to her estate. So why, some might ask, are we here? We are here because the ordinary law of tort does not recognise or compensate the anguish suffered by parents who are deprived of the life of their adult child. In this day and age we all expect our children to outlive us. Losing a child prematurely is agony. No one who reads the hospitals notes of the series of telephone calls made by this patients father to the hospital on the night in question can be in any doubt of that; or that the agony may be made worse by knowing that the loss both could and should have been prevented. It is not surprising, therefore, that parents are among the recognised victims when the right to life of their child, protected under article 2 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, is violated. It is also not surprising that, as Lord Dyson has shown, they are victims, not only of the states failure properly to investigate the death, but also of the failure effectively to protect their childs life. There is no warrant, in the jurisprudence or in humanity, for the distinction between the two duties drawn by Lord Scott in Savage v South Essex Partnership NHS Foundation Trust [2009] AC 681, para 5. Article 2 begins Everyones right to life shall be protected by law. As Lord Dyson has explained, it is now clear that this simple sentence imposes three distinct obligations upon the state. The first, which does not arise here, is a negative obligation, not itself to take life except in the limited cases provided for in article 2(2). The second, which also does not arise here, is a positive obligation to conduct a proper investigation into any death for which the State might bear some degree of responsibility. And the third, with which this case is concerned, is a positive obligation to protect life. As a general rule, that positive obligation is fulfilled by having in place laws and a legal system which deter threats to life from any quarter and punishes the perpetrators or compensates the victims if deterrence fails. In the health care context, this also entails having effective administrative and regulatory systems in place, designed to protect patients from professional incompetence resulting in death. But it is not suggested that English law and the English legal system are defective in this respect. However, in certain circumstances, the states positive obligation to protect life goes further than that. It entails an obligation to take positive steps to prevent a real and immediate risk to the life of a particular individual from materialising. In Savage, the House of Lords held that this obligation arose in the case of a psychiatric patient detained in hospital under the Mental Health Act 1983. In reaching that conclusion, the House of Lords was not following any exact Strasbourg precedent. There was then, and still is, no Strasbourg decision cited to us which concerns a psychiatric hospital patient, whether informal or detained, as opposed to a mentally ill prisoner or detainee. There is a line of Strasbourg cases, beginning with Powell v United Kingdom (2000) 30 EHRR CD 362, 364 holding that: . where a contracting state had made adequate provision for securing high professional standards among health professionals and the protection of the lives of patients, it cannot accept that matters such as error of judgment on the part of a health professional or negligent co ordination among health professionals in the treatment of a particular patient are sufficient of themselves to call a contracting state to account from the standpoint of its positive obligations under article 2 of the Convention to protect life. (emphasis supplied) But it would be wrong to see the House of Lords in Savage as carving out an exception to a general rule that the State is not responsible for the deaths of hospital patients. The House was trying to deduce the principles applicable to when this so called operational duty might arise from such Strasbourg jurisprudence as there is and to decide, in the light of those principles, whether it did so in that case. This is no easy task. People suffering from mental disorders have the same human rights as everyone else and are entitled to enjoy those rights without discrimination on account of their mental status. So we must start from the proposition that they are entitled to the same freedom and autonomy as everyone else, unless there is some justification within the scheme of the Convention for interfering in this. The Convention recognises that it may be justifiable to interfere in their private and family lives, and even to deprive them of liberty in certain circumstances. If they have already been deprived of their liberty for other reasons, the Convention recognises that there may be a special duty to protect them from the risk of self harm: see, in particular, Renolde v France (2009) 48 EHRR 969. Because of the difficult and delicate issues raised, therefore, I would like to work them through for myself, although I have reached the same conclusions for essentially the same reasons as Lord Dyson has done. Strasbourg has recognised the possibility of the operational duty arising in several cases since it was first articulated (but not violated) in Osman v United Kingdom (2000) 29 EHRR 245, paras 115 116. Its tendency is to state the principle in very broad terms, without defining precisely the circumstances in which it will apply. A recent example is Watts v United Kingdom (2010) 51 EHRR 66: 82. The court observes at the outset that article 2 imposes both negative and positive obligations on the State. The negative obligation prohibits the intentional and unlawful taking of life by agents of the state. The positive obligation . requires that they take appropriate steps to safeguard the lives of those within their jurisdiction (see LCB v United Kingdom (1999) 27 EHRR 212, para 36; and Edwards v United Kingdom (2002) 35 EHRR 19, para 54). This implies, in appropriate circumstances, a positive obligation on the authorities to take preventive operational measures to protect an individual whose life is at risk. Although the court originally explained that this positive obligation arose when there was a risk to life from the criminal acts of another individual (see Osman v United Kingdom (2000) 29 EHRR 245 at para 115), it has since made it clear the positive obligations under article 2 are engaged in the context of any activity, whether public or not, in which the right to life may be at stake (see neryildiz v Turkey (2005) 41 EHRR 20, para 71). 83. For the court to find a violation of the positive obligation to protect life, it must be established that the authorities knew or ought to have known at the time of the existence of a real and immediate risk to the life of an identified individual and that they failed to take measures within the scope of their powers which, judged reasonably, might have been expected to avoid that risk. The court reiterates that the scope of any positive obligation must be interpreted in a way which does not impose an impossible or disproportionate burden on the authorities, including in respect of the operational choices which must be made in terms of priorities and resources. Accordingly, not every claimed risk to life can entail for the authorities a Convention requirement to take operational measures to prevent that risk from materialising. (emphasis supplied.) Such broad statements of principle are hard to interpret and even harder to apply. It is tempting for a common lawyer to treat them as if they were Lord Atkins statement of the neighbour principle in Donoghue v Stevenson [1932] AC 562, p 580: the duty arises in the circumstances explained in para 82 of Watts and is breached in the circumstances explained in para 83. But is the court in fact laying down a broad principle that, in the context of any public or private activity in which the right to life may be at stake, the State has a duty, if the authorities know or ought to know of a real and immediate risk to the life of a particular individual, to take such measures as might reasonably be expected of them to avoid that risk? This is certainly how the decision in Mrs Watts case reads. Mrs Watts was complaining that the local authoritys decision to close the care home in which she had lived for five years violated this duty because it put her life at risk. The court accepted that the badly managed transfer of elderly residents could have a negative impact on their life expectancy and thus that article 2 was engaged (para 88). However, what the authorities had to do about it would depend upon the extent of the risk, on which in that case the evidence was equivocal. Bearing in mind the choices which had to be made by the authorities in providing residential care for the elderly and the careful steps which had been taken to minimise any risk to this applicants life, the authorities had met their positive obligations in that case (para 92). On the other hand, is the reference to in appropriate circumstances (in Watts, para 82, among others) designed to set limits to the situations in which the operational duty can even arise? After all, in Mrs Watts case, the activity which gave rise to the risk to life moving the elderly residents out of their home was one in which the authorities were themselves engaged. In that respect, it is like the case of neryildiz v Turkey, cited by the court for the broader proposition, where the authorities were responsible for the municipal rubbish tip which endangered the lives of local residents. Another example where the duty not only arose but was violated is Branko Tomai and Others v Croatia, Application No 46598/06, 15 January 2009. Shortly after his release from prison a man shot dead his former co habitant, their child and himself. The risk to life was well known to the authorities when they released him from prison, but he had received no adequate psychiatric treatment while inside and there was no power to detain him for treatment after his sentence expired. They had not, therefore, done all that could reasonably be expected to guard against the risk. In the context of state activities constituting a risk to life, therefore, the court may have reached the point where the operational duty is engaged, but the circumstances will be carefully scrutinised to see what, reasonably, the authorities could be expected to do about it, bearing in mind the gravity of the risk and the problems they face in responding to it. We are not here concerned with that broader question, but with the more precise question of when the state has a duty to protect an individual from taking his own life. It does seem fairly clear that there is no general obligation on the State to prevent a person committing suicide, even if the authorities know or ought to know of a real and immediate risk that she will do so. I say this because, in the case of Mammadov v Azerbaijan, Application No 4762/05, 17 December 2009, decided only a few months before Watts, the court twice stated, at paras 99 and 100, that the duty to protect a person from self harm arose only in particular circumstances, citing Keenan v United Kingdom (2001) 33 EHRR 913, Renolde vs France (2009) 48 EHRR 969, and Tanribilir vs Turkey, Application No 21422/93, 16 November 2000. This is understandable. Autonomous individuals have a right to take their own lives if that is what they truly want. If a person announces her intention of travelling to Switzerland to be assisted to commit suicide there, this is not, by itself, sufficient to impose an obligation under article 2 to take steps to prevent her. What those particular circumstances are is harder to determine. All the Strasbourg cases so far have concerned prisoners (as in the three cases cited above) or conscript soldiers (as in Kilin v Turkey, Application No 40145/98, 7 June 2005; and more plainly Ataman v Turkey, Application No 46252/99, 27 April 2006). There clearly is a general obligation to take certain routine steps to try to prevent prisoners and other detainees from committing suicide, because the very fact of incarceration heightens the risk of self harm. The question then arises of whether more individualised steps are required. This will depend upon whether the authorities should have foreseen a real and immediate risk and what more they could be expected to do. Thus in Tanrilbir v Turkey, there was no violation when a young man with no apparent mental disorder calmly and silently committed suicide by hanging himself from a rope made from his unstitched shirt sleeves; he was accused of helping the Kurdish separatist organisation, the PKK, and there was a view that he might have decided to hang himself rather than reveal their secrets; but it could not reasonably have been foreseen that he would do so. In Keenan v United Kingdom, although the prisoner was known to be mentally ill and from time to time to pose a risk to his own life, his condition varied, he was regularly monitored by the doctors, and there was nothing to suggest an immediate risk of suicide on the day in question, so it was not apparent that the authorities had omitted to take any steps which ought reasonably to have been taken to prevent it. But in Renolde v France, the prisoner was known to be suffering from a psychotic disorder with delusions capable of causing him to commit acts of self harm, he had made previous attempts, but he was not transferred into psychiatric care; he was simply handed his anti psychotic medication twice a week without any monitoring of whether he was taking it; so the authorities had not done all that could reasonably be expected of them. Throughout these cases, the special vulnerability of people suffering from mental disorders, especially psychosis, is stressed. It was not, therefore, a large step in Savage for the House of Lords to conclude that a mentally ill person detained in hospital for psychiatric treatment was owed the same duty as a mentally ill prisoner. But might the obligation stretch further than this? It seems clear from cases such as Mammadov that it can do so. In Mammadov, the applicants wife poured petrol over herself and set herself alight while the police were trying to evict her and her family from the building in which they had taken up residence without permission. Although the court found that there was no violation of the substantive obligation, the matter was discussed in terms of whether the police should have realised what she was going to do and stopped her (see para 115). The court found itself unable to conclude whether they could or should have done more (para 118) and drew a contrast with the case of death in custody, where the burden would be on the State to provide a satisfactory and plausible explanation (para 119). But there is no suggestion that the operational obligation to prevent suicide is limited to prisoners and detainees. This too is not surprising. The court has more than once found a violation of the prohibition of inhuman and degrading treatment in article 3 when the authorities have failed to use their powers to take action to protect children from the risk of serious abuse or ill treatment about which the authorities knew or ought to have known. Thus in E v United Kingdom (2003) 36 EHRR 519, the court stated the general principles thus: 88. The obligation on High Contracting Parties under article 1 of the Convention to secure to everyone within their jurisdiction the rights and freedoms defined in the Convention, taken together with article 3, requires States to take measures designed to ensure that individuals within their jurisdiction are not subjected to torture or inhuman or degrading treatment, including such ill treatment administered by private individuals (A v United Kingdom (1999) 27 EHRR 611, para 22). These measures should provide effective protection, in particular, of children and other vulnerable persons, and include reasonable steps to prevent ill treatment of which the authorities had or ought to have had knowledge (mutates mutandis, Osman v United Kingdom (2000) 29 EHRR 245, para 116). Thus a failure, over four and a half years, to protect children from serious neglect and abuse of which the local authority were aware disclosed a breach of article 3 of the Convention in the case of Z v United Kingdom (2002) 34 EHRR 3. In that case, the court was satisfied that the social services in Scotland should have been aware of the risk of sexual abuse to these children from a particular individual yet they failed to take any steps to discover the extent of the problem and protect the children from further abuse. Thus, proper and effective management of their responsibilities might, judged reasonably, have been expected to avoid, or at least, minimise the risk of the damage suffered (para 100). Accordingly there was a breach of article 3. The cross reference to Osman indicates that the operational duties under both article 2 and article 3 are similar if not identical. The State does have a positive obligation to protect children and vulnerable adults from the real and immediate risk of serious abuse or threats to their lives of which the authorities are or ought to be aware and which it is within their power to prevent. Whether they are in breach of this obligation will depend upon the nature and degree of the risk and what, in the light of the many relevant considerations, the authorities might reasonably have been expected to do to prevent it. This is not only a question of not expecting too much of hard pressed authorities with many other demands upon their resources. It is also a question of proportionality and respecting the rights of others, including the rights of those who require to be protected. The court acknowledged in Keenan that restraints would inevitably be placed upon the preventive measures available in the context of police activity by the guarantees in article 5 and 8 and also that the prison authorities, similarly must discharge their duties in a manner compatible with the rights and freedoms of the individual concerned (para 91). In the light of all this, there can be little doubt that the operational duty under article 2 is engaged in the case of a patient such as Miss Rabone. She was admitted to hospital precisely because of the risk that she would take her own life. The purpose of the admission was both to prevent that happening and to bring about an improvement in her mental health such that she no longer posed a risk to herself. The experts were agreed that for patients such as Miss Rabone, one of the most risky periods for further suicide attempts is within a week or so of beginning to recover. Her mental disorder meant that she might well lack the capacity to make an autonomous decision to take her own life. Although she was an informal patient, the hospital could at any time have prevented her leaving. Section 5(4) of the Mental Health Act 1983 empowers a suitably qualified nurse to authorise the detention of an informal patient who is receiving treatment for mental disorder for up to six hours if the nurse believes that the patient is suffering from mental disorder to such a degree that it is necessary for her health or safety for her to be immediately restrained from leaving the hospital and it is not practicable to secure the immediate attendance of a doctor or approved clinician who can act under section 5(2). Section 5(2) empowers a doctor or approved clinician to authorise detention for up to 72 hours if it appears appropriate that an application be made to detain her under the 1983 Act. The experts were agreed that it would have been appropriate to detain her under the 1983 Act if she had intended to leave the hospital without medical approval. The judge in fact found that she would not have done so. The analogy with a patient detained under the Mental Health Act is much closer than the analogy with a patient admitted for treatment of a physical illness or injury. A patient receiving treatment in hospital for a physical illness or injury is in a quite different position. She has made an informed and autonomous choice to be in hospital and to receive the treatment in question. There is no power to detain her should she decide to leave. Any risk to her life stems from her physical condition. Any failure to prevent her death is likely to stem from what in Savage Lord Rodger called casual acts of medical negligence rather than from a deliberate decision. If there is a deliberate decision to take a risk, she should have given her informed consent to it. By contrast, if in fact she is known to be at risk of harm from the criminal acts of a third party (a risk which ironically it appears may recently have arisen at this very hospital) the operational duty under article 2 would indeed be engaged in her case too. However, it does not follow that because the operational duty was engaged in this case, it has necessarily been broken. There is first the question of whether the risk was sufficiently real and immediate to require consideration of what might be done to prevent it. I agree, for the reasons given by Lord Dyson, that it was. Although the doctors gave different assessments of the degree of risk, they were agreed that it was real and ever present, or in the words of Weatherup J approved in In re Officer L, [2007] 1 WLR 2135 objectively verified and present and continuing. There is next the question whether the hospital should have done more to prevent it. There is a difficult balance to be struck between the right of the individual patient to freedom and self determination and her right to be prevented from taking her own life. She wanted to go home and her doctor thought that it would be good for her to begin to take responsibility for herself. He was obviously wrong about that, but was he so wrong that the hospital is to be held in breach of her human rights for failing to protect her? It may not always be enough simply to say that the experts were agreed that the decision to give her home leave was one which no reasonable psychiatrist would have taken. But in this case it also appears that there was no proper assessment of the risks before she was given leave and no proper planning for her care during the leave. This is unlike the situation of Mark Keenan, where the question was what further preventive measures, over and above the normal precautions already being taken within the prison, should have been taken at the time. There is every indication that had she remained in hospital she would not have succeeded in killing herself. The question was whether she should have been allowed to go home for a whole weekend. Having regard to the nature and degree of the risk to her life, and the comparative ease of protecting her from it, I agree that her right to life was violated. I also agree that her parents have not ceased to be victims of this violation simply because the hospital has paid compensation to her estate. They are victims in their own right and remain so whether or not she died intestate so that, as it happens, her estate would be shared between them. I also agree that it would obviously be equitable to extend their time for bringing this action. The delay was short and readily explicable by the delay in the hospitals own inquiry. No prejudice has been suffered. The discretion is open ended but I agree with Lord Dyson that the factors set out in section 33(3) of the Limitation Act 1980 may be relevant. A claim such as this, as I said in A v Essex County Council [2010] UKSC 33, [2011] 1 AC 280, para 116, is more in the nature of a claim in tort than for judicial review. It is also important that fundamental human rights be vindicated, and never more so than when the most fundamental right of all, the right to life, is at stake. That is what Mr and Mrs Rabone have sought to do and that is what they have achieved. They are entitled to the modest compensation assessed by the Court of Appeal. For all those reasons, therefore, I agree that this appeal should be allowed. LORD BROWN I agree with the leading judgment of Lord Dyson in this appeal and also with the additional observations made by Lady Hale and Lord Mance. I too, therefore, would allow the appeal and make an award of 5,000 in favour of each appellant. It may be said that in finding in the present case a violation of the article 2 duty on a state in certain circumstances to take preventative operational measures, this court is going rather further than the evolving jurisprudence of the European Court of Human Rights has yet clearly established to be required. No Strasbourg decision has yet equated the position of voluntary patients with that of detained patients with regard to this article 2 duty. Even assuming that to be so, however, I would not regard our decision here as offending against the familiar principle first adumbrated by Lord Bingham in R (Ullah) v Special Adjudicator [2004] 2 AC 323 (at para 20) and frequently since repeated as, for example, in R(Al Skeini) v Secretary of State for Defence [2008] AC 153, by Lady Hale (at para 90) and myself (at para 106). Nobody has ever suggested that, merely because a particular question which arises under the Convention has not yet been specifically resolved by the Strasbourg jurisprudence, domestic courts cannot determine it in other words that it is necessary to await an authoritative decision of the ECtHR more or less directly in point before finding a Convention violation. That would be absurd. Rather what the Ullah principle importantly establishes is that the domestic court should not feel driven on Convention grounds unwillingly to decide a case against a public authority (which could not then seek a corrective judgment in Strasbourg) unless the existing Strasbourg case law clearly compels this. Indeed, the more reluctant the domestic court may be to recognise in the circumstances a violation of the Convention, the readier it should be to reject the complaint unless there exists (as, of course, there existed in Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269 and in R (GC) v Commissioner of Police of the Metropolis [2011] 1 WLR 1230 but did not exist in R v Horncastle [2010] 2 AC 373) an authoritative judgment of the Grand Chamber plainly decisive of the point at issue. If, however, the domestic court is content (perhaps even ready and willing) to decide a Convention challenge against a public authority and believes such a conclusion to flow naturally from existing Strasbourg case law (albeit that it could be regarded as carrying the case law a step further), then in my judgment it should take that further step. And that, indeed, is to my mind precisely the position in this very case. Just as, I may add, it was the position in R(Limbuela) v Secretary of State for the Home Department [2006] 1 AC 396, In re G (Adoption: Unmarried Couple) [2009] AC 173 and EM (Lebanon) v Secretary of State for the Home Department [2009] AC 1198. The other, less often considered, limb of the Ullah principle is that the court may in certain circumstances if it wishes decide a case against a public authority by developing the common law to provide for rights more generous than those conferred by the Convention; but that it should not grant such rights by purporting to extend the reach of the Convention beyond that recognised by, or reasonably envisaged within, existing Strasbourg jurisprudence. As Lord Bingham observed in the Ullah case at para 20 and as again later noted by Lady Hale in the Al Skeini case at para 90 it is for Strasbourg alone definitively to interpret the Convention and determine what rights are guaranteed by it and the meaning of the Convention should be uniform throughout the states party to it. Suppose, for example, that the domestic court was inclined to give a Convention right an altogether greater reach than Strasbourg showed any likelihood of giving it, but that, so interpreted, the right would plainly conflict with domestic legislation. Is it seriously to be suggested that, pursuant to section 4 of the 1998 Act, the court could and should make a declaration of incompatibility? Or indeed, suppose there to be clear Grand Chamber authority directly in point, is it to be said that the domestic court, because section 2 of the 1998 Act requires it merely to take into account such an authority, should, if it regrets the Strasbourg judgment, itself decide the point differently? I cannot suppose that Parliament so intended or, indeed that such an approach would lead to satisfactory results. In saying that the courts must take into account any judgment of the ECtHR, Parliament left it open to the courts to decide how far they should be influenced by a Strasbourg judgment in any particular circumstances. I do not believe the Ullah principle, as I have here sought to illustrate its application, in any way offends section 2. On the contrary, it operates to my mind to promote each of two frequently expressed aims: engaging in a dialogue with Strasbourg and bringing rights home. LORD MANCE I agree with the judgment prepared by Lord Dyson. One can only have the greatest sympathy for the agony of parents who suffer the immeasurable tragedy of loss of a child by suicide, made even more acute by the knowledge that this was facilitated by avoidable negligence. However, I have not found the resulting legal issues entirely easy either to identify or to resolve. As Lord Dyson explains (para 12), the European Court of Human Rights has under article 2 of the Convention developed various obligations on states. One is the general substantive obligation to establish a framework of laws, precautions and means of enforcement which will, to the greatest extent reasonably practicable, protect life: R (Middleton) v West Somerset Coroner [2004] 2 AC 182, para 2, per Lord Bingham. This includes a general duty to have an appropriate regulatory, investigatory and judicial system: R (Smith) v Oxfordshire Assistant Deputy Coroner [2010] UKSC 29; [2011] 1 AC 1, para 211. Another is a specific operational duty to take appropriate steps, by way of preventative operational measures in defined circumstances to safeguard lives within the states jurisdiction. This latter duty carries with it a specific Convention duty to provide for or ensure an effective public investigation by an independent official body of deaths or near deaths involved in breach of the specific operational duty. An extending series of cases exemplifies the specific operational duty. It starts with Osman v United Kingdom (2000) 29 EHRR 245 and continues with cases which Lord Dyson discusses at paras 15 to 18 above, and which I considered in R (Smith) v Oxfordshire Assistant Deputy Coroner [2010] UKSC 29; [2011] 1 AC 1, para 210. Although the European Court of Justice described the incidence of this duty as well defined in Osman, the subsequent case law suggests that this was over optimistic. Lady Hale has in paras 96 to 104 cogently identified the uncertainty which exists about both the extent of the duty and its existence in the particular context of suicide. But it is at least clear in that context that various factors, such as control, assumption of responsibility and the nature (as well as the reality or immediacy) of the risk, may lead to the duty arising. Taking those factors into account in the present case, I agree with Lord Dyson that, for reasons he gives in para 34, the operational duty existed in relation to Melanie. It was a duty to protect her from any real or immediate risk that she would commit suicide, of which state authorities knew or ought to have known. In that context (although the contrary was submitted to us) simple negligence in failing to identify or to guard appropriately against such a risk appears sufficient to establish breach of the duty. A line has been sought to be drawn between this series of cases and cases of casual acts of negligence by medical authorities in relation to persons submitting themselves voluntarily to medical care. Such persons are entitled to the benefit of the general substantive duty referred to in paragraph 113 above, but the state does not answer directly for ordinary acts of negligence by public health authorities, however clear it was that the particular medical emergency, procedure or treatment in the context of which the negligence occurred involved a real or immediate risk to the patients life. It follows that, in the event of a breach of the operational duty, the range of persons entitled as victims to bring claims against the state, and the nature and scale of compensation or just satisfaction which they may receive, will depend upon legal principles established by the European Court of Human Rights. In contrast, in the event of ordinary negligence by a public health authority, the range of victim and the nature and scale of compensation are defined by the domestic law of tort. In this way, the European Court of Human Rights has, under the operational duty, began to develop its own Convention rules of, in effect, tortious responsibility, when in other areas it is left to national systems (as part of their general systematic duty to establish a framework of laws, precautions and means of enforcement which will, to the greatest extent reasonably practicable, protect life) to develop an appropriate law of tort in the light of particular legal traditions and needs. The court might have left it to national systems in all areas to address any real or immediate risk to life which is or ought to be within their knowledge. It could have left it to national systems, in the event of any failure by state authorities to address such a risk, to recognise a range of victims and to provide compensation consistent with their ordinary law of tort. The court could still have reviewed the appropriateness of the protection and of the recourse available under national tort law. But that is not how the Convention has been interpreted. Hence, the difficult line to be drawn between direct Convention rights and national tort law in cases such as the present. In the event of a breach of the operational duty, we have to apply Convention jurisprudence on the question who counts as a victim. This requires us to address some particularly difficult Convention jurisprudence on the impact of settlement of a domestic claim on victim status. It requires us also to address numerous Strasbourg cases giving only limited guidance on the factors governing and the range of compensation appropriate under Convention. Lord Dyson has dealt with these issues in his paragraphs 49 to 72 and 80 to 88. In the last analysis, what he has done in each context is to identify and apply underlying principles which best make sense of the rights which have become part of domestic law under the Human Rights Act 1998. That is in my view an appropriate course. We are required to take account of the case law of the European Court of Human Rights no less but no more. That requirement makes it inescapable that we examine the courts case law. In doing so, common law habits are difficult to shake off. But it is perhaps worth remembering expressly that individual section decisions of the court are not, and may not respond well to the same close linguistic analysis that a common lawyer would give to, binding precedents. The apparently irreconcilable section decisions on the issue of loss of victim status, put before us in this case, make clear that any attempt at such an analysis can be a somewhat fruitless task. In the result, Lord Dysons examination of the Strasbourg case law persuades me that the only coherent principle regarding loss of victim status is that found in R.R v Poland (Application No 27617/04). That means that there must be both a recognition in substance of a failure to comply with the operational duty and adequate redress for all the heads of claim recognised under the Convention by the European Court of Human Rights. I agree that Mr and Mrs Rabone did not in this case lose their victim status by Mr Rabones acceptance of a settlement figure which was on behalf of Melanies estate alone, and which did not cover their bereavement. I agree that the time limit for proceedings should be extended. Finally, I agree with the Court of Appeal that the judge undervalued the claims when he said that any award of compensation should have been in the sum of 1,500 each claimant, and the sum of 5,000 each claimant would be appropriate. I would accordingly allow the appeal and award Mr and Mrs Rabone 5,000 each.

Melanie Rabone (Melanie) had a history of depression. On 4 March 2005, she tried to commit suicide and was admitted to Stepping Hill Hospital (the hospital) and she was diagnosed by Dr Meagher, a consultant psychiatrist, as suffering from a severe episode of a recurrent depressive disorder. By 18 March 2005, she had made a sufficient recovery to be discharged and she went on holiday for a week with her family: [2]. On 31 March, she cut both of her wrists with broken glass. Dr Meagher advised that she should be readmitted to the hospital, but no beds were available so on 6 April she was seen as an outpatient by Dr Cook, a senior house officer. On 11 April, Melanie tied a lamp flex around her neck. Melanie agreed to an informal admission to the hospital. Dr Cook noted that, if she attempted or demanded to leave, she should be assessed for detention under the Mental Health Act 1983. She was prescribed a course of drugs and kept under 15 minute observation. A full mental state examination was carried out on admission by a ward nurse, who assessed Melanie as a moderate to high suicide risk. On various occasions after 13 April, Mr Rabone, Melanies father, expressed his concerns that she was not improving and that she should not be allowed home too soon: [3] [4]. On 19 April, Dr Meagher returned from leave. He was told that Melanie was requesting home leave. On his late afternoon ward round, he met Melanie and Mrs Rabone, Melanies mother. He agreed to allow Melanie to have home leave for two days and nights. Mrs Rabone expressed concern about Melanie coming home for the weekend, but Melanie was keen to do so. On 20 April 2005, Melanie, aged 24, hanged herself from a tree: [1]. On 11 August 2006, Mr Rabone issued proceedings claiming damages in negligence on behalf of Melanies estate and under Article 2 (the right to life) of the European Convention on Human Rights (the Convention) on behalf of himself and Mrs Rabone: [9]. The estates claim was settled in May 2008 for 7,500 plus costs: [11]. In relation to the Article 2 claims, six issues arise on this appeal: (i) whether the operational obligation under Article 2 can in principle be owed to a hospital patient who is mentally ill but not detained; (ii) if so, whether the Respondent Trust breached that duty; (iii) if so, whether Mr and Mrs Rabone were victims within the meaning of the Convention; (iv) if so, whether they lost their victim status by reason of the settlement; (v) whether their claims were time barred; and, if not (vi) whether the Court of Appeal erred in holding that they would have awarded 5,000 each to Mr and Mrs Rabone if their claims had been established: [14]. The Supreme Court unanimously allows the appeal: (i) the operational obligation under Article 2 of the Convention is owed to a voluntary mentally ill hospital patient such as Melanie; (ii) the obligation was breached in this case; (iii) Mr and Mrs Rabone were victims for the purposes of Art 34 of the Convention; (iv) they had not lost this status by virtue of the settlement of the estates claim; (v) claims were not time barred; and (vi) the Court of Appeal was not wrong to interfere with the judges assessment of damages in the sum of 2,500 to Mr and Mrs Rabone. Lord Dyson gives the leading judgment, with which Lord Walker, Lady Hale, Lord Brown and Lord Mance agree. Lady Hale, Lord Brown and Lord Mance each add further comments of their own. This appeal concerns the positive duty imposed by Article 2 of the Convention on states to take preventative operational measures to safeguard an individuals life in certain circumstances: [12]. The central question in relation to the first issue is whether the admitted negligence of the Respondent in its treatment of Melanie is to be assimilated to the line of case law pertaining to negligent hospital treatment (in which case there is no duty under Article 2), or whether the fact that Melanie was a psychiatric patient (though not detained) means that this case should be assimilated to the class of cases where an operational duty arises: [20]. No European Court of Human Rights (ECtHR) decision was cited to the Court which clearly articulates the criteria by which such a duty exists in particular circumstances, but there are certain indicia which point the way: [22]. While there are differences between detained and voluntary psychiatric patients, these should not be exaggerated: [27]. Melanie was admitted to hospital because she was a real suicide risk. By reason of her mental state, she was extremely vulnerable. The Trust assumed responsibility for her; she was under its control. The difference between Melanies position and that of a hypothetical detained psychiatric patient would have been one of form not substance: [34]. The Trust owed Melanie the operational duty to take reasonable steps to protect her from the real and immediate risk of suicide. The risk of Melanies suicide was real; it was real enough for the expert psychiatrists to give evidence that all ordinarily competent and responsible psychiatrists would have regarded Melanie as being in need of protection against the risk of suicide: [38]. The risk existed when Melanie left hospital and continued during the two day period of home leave. It was therefore also an immediate risk: [40] [41]. As the decision to allow home leave was one that no reasonable psychiatric practitioner would have made, the Trust failed to do all that could reasonably have been expected to prevent the real and immediate risk of Melanies suicide and it breached its operational duty: [43]. The ECtHR has repeatedly stated that family members of the deceased can bring claims in their own right under Article 2 of the Convention: [44] [46]. A person ceases to be a victim where the domestic authority has provided adequate redress and has acknowledged, either expressly or in substance, the breach of the Convention: [49]. By settling the estates claim, Mr Rabone did not renounce their article 2 claim for damages for non pecuniary loss for their bereavement. No such claim was available in English law as damages for bereavement are only available for the loss of a child where the child is under 18: [58]. Nor was the 7,500 received by the estate adequate address: [59] [63]. Mr and Mrs Rabone are therefore victims and have not lost that status. A claim against a public authority for breach of a Convention right must be brought within a year of the act complained of or such longer period as the court considers equitable. The extension of time sought was less than four months, there is no suggestion that the evidence has become less cogent as a result of the delay, the Trust has suffered no prejudice by the delay, Mr and Mrs Rabone acted reasonably in not issuing proceedings and they have a good claim for breach of Article 2. Time should therefore be extended: [77] [79]. This was a bad case of breach of the Article 2 operational duty which merited an award well above the lower end of the range of awards. The Trusts challenge to the Court of Appeals assessment of 5,000 each therefore fails: [88].

By this appeal Mr and Mrs Hancock seek to show that the redemption of the loan notes, issued to them in connection with the sale of their shares in their company, Blubeckers Ltd, fell outside the charge to capital gains tax (CGT) by virtue of the exemption in section 115 of the Taxation of Chargeable Gains Act 1992 (TCGA) for disposals of qualifying corporate bonds (QCBs). QCBs are essentially sterling only bonds (see TCGA, section 117). The noteworthy feature for present purposes of the redemption process was that, following the reorganisation, some of the loan notes issued as consideration were converted into QCBs. TCGA confers rollover relief on the disposal of securities as part of a reorganisation, ie it brings securities issued as consideration into charge for CGT purposes but defers the tax until their subsequent realisation. This is less favourable to the taxpayer than the exemption in TCGA, section 115. The roll over provisions constitute a carve out from the exemption in TCGA, section 115. They extend to certain conversions involving QCBs. The appellants seek to fall outside that carve out (and thus within the exemption in TCGA, section 115). The Court of Appeal (Lewison, Kitchin and Floyd LJJ) rejected the appellants claim: [2017] 1 WLR 4717. They considered that, although the wording of the carve out could be read literally in favour of the taxpayers, that result would be contrary to Parliaments intention. Therefore, the appellants claim for relief failed. Instead, they were entitled to rollover relief deferring tax to redemption. The legislative and factual framework in more detail For CGT purposes, there must be a relevant disposal of a relevant asset by persons chargeable to tax resulting in a gain which is chargeable for capital gains tax purposes. In this case, the appellants undoubtedly made a gain when they exchanged their shares in Blubeckers Ltd for redeemable loan notes (with a provision for an earn out under which further loan notes would, as in the event happened, be issued, dependent on the performance of the business). This transaction was a reorganisation under TCGA, section 126. Rollover relief was available under TCGA, section 127. The appellants structured the disposal of their Blubeckers shares in three stages. Stage 1 was the exchange of Blubeckers shares for Lionheart notes, which, being convertible into foreign currency, were not QCBs. At Stage 2, the terms of some of those notes were varied so that they became QCBs. At Stage 3, both sets of notes (QCBs and non QCBs) were, together and without distinction, converted into one series of secured discounted loan notes (SLNs), which were QCBs. The SLNs were subsequently redeemed for cash. It is said to be the result of the completion of Stages 2 and 3 that the appellants are not chargeable to CGT. The exact nominal amount of loan notes converted into QCBs does not matter in that, on the appellants argument, it was sufficient if the QCB element of the conversion was the smallest denomination (say 1). Rollover relief is available for reorganisations resulting in the issue of securities such as shares. TCGA, section 132, as amended by section 88(2) of the Finance Act 1997, by extending that relief to a conversion of securities, following a reorganisation, in or out of a QCB, equates the relief for such a conversion with that available for a reorganisation of share capital: 132(1) Sections 127 to 131 shall apply with any necessary adaptations in relation to the conversion of securities as they apply in relation to a reorganisation (that is to say, a reorganisation or reduction of a companys share capital). (3) For the purposes of this section and section 133 (a) conversion of securities includes any of the following, whether effected by a transaction or occurring in consequence of the operation of the terms of any security or of any debenture which is not a security, that is to say a conversion of securities of a company (i) into shares in the company, and (ia) a conversion of a security which is not a qualifying corporate bond into a security of the same company which is such a bond, and (ib) a conversion of a qualifying corporate bond into a security which is a security of the same company but is not such a bond, and (ii) a conversion at the option of the holder of the securities converted as an alternative to the redemption of those securities for cash, and (iii) any exchange of securities effected in pursuance of any enactment (including an enactment passed after this Act) which provides for the compulsory acquisition of any shares or securities and the issue of securities or other securities instead, (b) security includes any loan stock or similar security whether of the Government of the United Kingdom or of any other government, or of any public or local authority in the United Kingdom or elsewhere, or of any company, and whether secured or unsecured. The purpose of TCGA, sections 127 to 131, referred to in the opening line of section 132, is to provide that there is no disposal of shares at the time of the reorganisation, and for further matters, such as the allocation of the consideration between different classes of security, part disposals, unpaid calls and indexation. The key points to note in these provisions, which it is not necessary to set out, are (1) that a conversion as defined is to receive the same relief as a reorganisation, ie rollover relief, even if it involves QCBs whose disposal is otherwise outside the charge to CGT; and (2) that emphasis is given to the aggregation of the securities into a single asset: section 127 provides that both the original holding, taken as a single asset, which the holder disposes of under the reorganisation, and the consideration securities, also taken as a single asset, are treated as the same asset with the same acquisition date as the original holding. We are not concerned with sections 133 or 134. To ensure that the conversion of, or into, QCBs on a reorganisation is within the charge to CGT on the same basis as the issue of other securities on a reorganisation, ie on the basis that the holder is entitled to rollover relief, section 116(1) provides that the disposal will result in rollover relief where sections 127 to 130 would apply, and (these are the critical words which this court must construe): (b) [Limb A] either the original shares would consist of or include a qualifying corporate bond and the new holding would not, or [Limb B] the original shares would not and the new holding would consist of or include such a bond; (words in square brackets added) Floyd LJ, giving the first judgment in the Court of Appeal, called the first possible scenario in section 116(1)(b), Limb A, and the alternative scenario, Limb B. I will do the same. The effect of section 116(1)(b) is that, where the new holding following conversion includes QCBs, Limb A cannot apply. The question here is whether Limb B applies: the appellants contend that Limb B also cannot apply because the (aggregate) original holding prior to conversion included QCBs. The reasoning of the Upper Tribunal and the Court of Appeal The Upper Tribunal, allowing an appeal from the First tier Tribunal, held that the conversion of securities at the third stage comprised separate transactions in relation to each share converted. As the First tier Tribunal had pointed out, the relief under section 116 for QCBs had been intended to promote the market in sterling bonds and so the interpretation favoured by the appellants would go well beyond that objective. The Upper Tribunal also noted that in TCGA, section 132 Parliament had defined conversion in relation to transactions involving QCBs separately in relation to each security (see para 4 above). The Upper Tribunal also rejected HMRCs argument based on WT Ramsay Ltd v Inland Revenue Comrs [1982] AC 300, but we are not concerned with that as HMRC has not appealed against that ruling. The appellants appealed to the Court of Appeal. They repeated their argument that Stage 3 constituted a single conversion of the loan notes (including QCBs) into QCBs, and so neither limb of TCGA, section 116(1)(b) applied. HMRC responded that Stage 3 was not one transaction but two: the first transaction (the conversion of the non QCBs into QCBs) fell within Limb A and the second (the conversion of the QCBs into SLNs, which were also QCBs) was outside section 116(1)(b), but (as appears from para 12 of Floyd LJs judgment) the appellants accepted that the variation of the terms of these loan notes at Stage 2 was a conversion which carried rollover relief so that, when those bonds were redeemed, a charge to CGT on the held over gain on these bonds was triggered. Seeking guidance as to the correct approach on statutory interpretation Floyd LJ (at para 45 of his judgment) cited, among other authorities, a passage from the judgment of Neuberger J in Jenks v Dickinson [1997] STC 853, concerning QCBs and the predecessor of TCGA. That case raised the issue whether a provision which extended the meaning of QCBs with retrospective effect relieved the taxpayer of an intervening accrued tax charge on the sale of shares into which the securities which had retrospectively become QCBs had been converted. Neuberger J held that it did not. In the passage cited by Floyd LJ, Neuberger J held that the taxpayers construction was: contradictory to the evident purpose of the relevant statutory provisions, viewed as a whole, viz that capital gains made on [QCBs] should be exempt from tax, whereas capital gains made on shares should be subject to tax. In the circumstances, principle, common sense, and authority show that the court is entitled, and indeed bound, to . adopt some other possible meaning if it exists (to quote Lord Reid: see [Luke v Inland Revenue Comrs] [1963] AC 557, 579). Floyd LJ pointed out that section 132 did not give as an example of a (single) conversion a conversion of different classes of bonds (para 65). The process of applying sections 127 to 131 as required by the opening words of section 132 allowed for necessary adaptations (para 63), and so there could be aggregation of securities for the purposes of some conversions but not others. The effect of the appellants argument would be that the non QCBs would escape the charge to CGT. This was contradictory to the evident purpose of the statutory scheme. The conversion of the two classes of loan notes could and should therefore be treated separately (para 68). The words or include (providing the option of a single conversion) did not mean that there could be such a conversion (para 69). The statutory fiction in section 127 had to be restricted to avoid an unintended result (para 70). The additional words or include were an isolated drafting anomaly: the appellants argument would produce an even greater anomaly (para 71). The wording of section 116(3) and (4) which use the word constitute was consistent with the conclusion that mixed conversions were not within section 116(1)(b) (para 73). Lewison LJ agreed. He gave additional reasons. He placed greater weight on the purposive approach holding that necessary adaptations could include adaptations necessary to give effect to the policy of the statutory scheme (para 82). He too applied Jenks (para 84) and Luke v Inland Revenue Comrs (para 88). This enabled him to disregard the words or include in section 116 in the circumstances of this case. Kitchin LJ agreed with both judgments. Submissions on this appeal Mr Michael Sherry, for the appellants, repeats the arguments on interpretation that were considered by the Court of Appeal in their judgment. He compares section 116 with section 135, which I have not mentioned above as it deals with another form of reorganisation to which Parliament has also directed that sections 127 to 131 should apply with necessary adaptations, so that the fact that it may favour the single asset approach would not be determinative in relation to section 116. A new factor on which he relies is the absence of any statutory provision for apportioning consideration where, as here, the QCBs and non QCBs have been converted together without any allocation of the price. But that is a matter of mechanics and no doubt the allocation could be established by evidence. Mr Sherry emphasises the principle against taxation without clear words (the clear words principle), which can be found in the speech of Lord Wilberforce in Ramsay [1982] AC 300, 323: A subject is only to be taxed upon clear words, not upon intendment or upon the equity of an Act. Any taxing Act of Parliament is to be construed in accordance with this principle. What are clear words is to be ascertained upon normal principles: these do not confine the courts to literal interpretation. There may, indeed should, be considered the context and scheme of the relevant Act as a whole, and its purpose may, indeed should, be regarded: see Inland Revenue Comrs v Wesleyan and General Assurance Society (1946) 30 TC 11, 16 per Lord Greene MR and: Mangin v Inland Revenue Comr [1971] AC 739, 746 per Lord Donovan. The relevant Act in these cases is the Finance Act 1965, the purpose of which is to impose a tax on gains less allowable losses, arising from disposals. So, submits Mr Sherry, it goes too far to treat the transaction in issue as two conversions. There was here a single conversion and that was the legal nature of what has happened. But the answer to his reliance on the passage set out above from the speech of Lord Wilberforce in Ramsay is that the clear words principle is not infringed if, fairly and properly construed, no doubt remains as to the meaning of section 116(1)(b). Moreover, there is no question of re characterising the parties transaction. It is simply a matter of deciding what is a conversion for the purposes of the statutory scheme. Mr Michael Gibbon QC, for HMRC, submits that the Court of Appeals interpretation is principled and uses a conventional approach. The statutory scheme as so construed is fair to taxpayers generally and coherent. Discussion It is common ground that, if the conversion at Stage 3 involved separate conversions of the QCBs and the non QCBs, the appeal must fail. The question whether there was a single conversion or two separate conversions must be a question of applying the provisions of TCGA to the facts. The answer is not mandated in the appellants favour by the fact that they utilised a single transaction. Plainly, section 116(1)(b) contemplates the possibility of a single transaction which involves a pre conversion holding of both QCBs and non QCBs, and this, coupled with the fact that the Court of Appeals interpretation renders the words or include appearing in section 116(1)(b) otiose are powerful arguments in support of the appellants construction. However, the appellants interpretation result would be inexplicable in terms of the policy expressed in these provisions, which is to enable all relevant reorganisations to benefit from the same rollover relief. Taxpayers could avoid those provisions with extreme ease if the appellants are right. There would be nothing to prevent them from using the occasion of a minimal conversion (say 1 nominal QCB) following a reorganisation and obtaining relief from CGT which was plainly contrary to and inconsistent with that which was intended to apply to a conversion connected to a reorganisation. In reality, by looking to the fiscal policy behind the scheme, both Floyd and Lewison LJJ applied a purposive approach. I need not say more about the purposive approach in general, save that Lewison LJ seemed to draw a distinction between the policy of TCGA in its entirety and that part of the Act which deals with corporate reorganisations (para 82). This is not easy to follow as the policy of the Act does not materially add to the policy of the relevant sections for present purposes. Floyd and Lewison LJJ did not give any meaning to the words or include in section 116(1)(b), but as I see it this was appropriate because in section 132(3), as the Upper Tribunal pointed out, it is clear that the intention of Parliament was that each security converted into a QCB should be viewed as a separate conversion (which amounts to the same thing as regarding the conversion in this case as consisting of two conversions, one of QCBs and one of non QCBs). Moreover, it is not an objection that section 127 contemplates a single asset (see para 5 above), because Parliament has required sections 127 to 131 to be applied with necessary adaptations. In those circumstances the clear words principle is observed in the present case. Floyd and Lewison LJJ also relied on the principle in Luke v Inland Revenue Comrs [1963] AC 557. This enables the court, when interpreting a statute, to adopt (my words) a strained interpretation in place of one which would be contrary to the clear intention of Parliament. This principle in Luke can apply even to a tax statute. The clear words principle relied on by Mr Sherry does not, as Lord Wilberforce pointed out, confine the courts to a literal interpretation. However, the circumstances in which the principle in Luke can be applied must be limited, for example, to those where there is not simply some inconsistency with evident Parliamentary intention but some clear contradiction with it. Moreover, the intention of Parliament must be clearly found on the wording of the legislation. The particular issue in Luke illustrates the nature of this principle: on the ordinary meaning of the Income Tax Act 1952, section 161, enacted to prevent tax avoidance by employers meeting expenses for their employees, a director became liable to be taxed as part of his remuneration on the cost of repairs executed by his employer on a house which he had leased from his employer at a fair rent when the repairs were those for which the landlord would normally be responsible (and had agreed to be responsible). This was clearly an unreasonable result, and the intention to produce such a result could not be imputed to Parliament. The House by a majority of 3:2 held that the expenditure was within an exemption for expenditure by a company on additions to its own assets, although this provision had to be read in a somewhat broad brush way to produce that result. At p 578, Lord Reid called it any port in a storm. The principle was used in that case to prevent the unreasonable imposition of a tax charge. In this case it is invoked in like circumstances in favour of HMRC to prevent the imputation to Parliament of an intention to produce an irrational result. It has not been argued that it can only apply in favour of the taxpayer and in Jenks (above, para 10) Neuberger J applied it to the disbenefit of the taxpayer. Nothing in this judgment detracts from the principle in Luke but in my judgment, it is unnecessary to consider its application in this case because, as explained in para 23 above, the construction of the relevant provisions is clear without resort to it. In summary, using Lewison LJs mixed but vivid metaphor ([2017] 1 WLR 4717, para 89), on the true interpretation of TCGA section 116(1)(b), the potential gain within the non QCBs was frozen on conversion and did not disappear in a puff of smoke. I would dismiss this appeal.

By this appeal Mr and Mrs Hancock, the appellants, seek to show that the redemption of the loan notes, issued to them in connection with the sale of their shares in their company, Blubeckers Ltd, fell outside the charge to capital gains tax (CGT) by virtue of the exemption in section 115 of the Taxation of Chargeable Gains Act 1992 (TCGA) for disposals of qualifying corporate bonds (QCBs). QCBs are essentially sterling only bonds. The appellants structured the disposal of their Blubeckers Ltd shares in three stages. (1) Stage 1 was the exchange of Blubeckers Ltd shares for notes, which, being convertible into foreign currency, were not QCBs. (2) At Stage 2, the terms of some of those notes were varied so that they became QCBs. (3) At Stage 3, both sets of notes (QCBs and non QCBs) were, together and without distinction, converted into one series of secured discounted loan notes (SLNs), which were QCBs. The SLNs were subsequently redeemed for cash. It is said to be the result of the completion of Stages 2 and 3 that the appellants are not chargeable to CGT. The noteworthy feature for present purposes of the redemption process was that, following the reorganisation, some of the loan notes issued as consideration were converted into QCBs. TCGA confers rollover relief on the disposal of securities as part of a reorganisation; this means it brings securities issued as consideration into charge for CGT purposes but then defers the tax until their subsequent realisation. This is less favourable to the taxpayer than the exemption in TCGA, section 115. The roll over provisions constitute a carve out from the exemption in TCGA, section 115. They extend to certain conversions involving QCBs. The appellants seek to fall outside that carve out (and thus within the exemption in TCGA, section 115). The appellants appealed to the First tier Tribunal regarding the chargeable gain arising on the redemption of the SLNs. The First tier Tribunal held that the conversions were to be treated as a single conversion for the purposes of section 116(1) of the TCGA such that the transaction avoided CGT. HMRC appealed to the Upper Tribunal and the Upper Tribunal allowed HMRCs appeal holding that the conversion of securities at the third stage comprised separate transactions in relation to each share converted. As the First tier Tribunal had pointed out, the relief under section 116 for QCBs had been intended to promote the market in sterling bonds and so the interpretation favoured by the appellants would go well beyond that objective. The appellants appealed to the Court of Appeal and the Court of Appeal dismissed their appeal. The Court of Appeal considered that, although the wording of the carve out could be read literally in favour of the taxpayers, that result would be contrary to Parliaments intention. The issue before the Supreme Court is whether section 116 of the TCGA applies where by a single transaction, both non QCBs (which are within the charge to capital gains tax on redemption) and QCBs (which fall outside the charge to capital gains tax on redemption) are converted into QCBs. The Supreme Court unanimously dismisses the appeal. Lady Arden, with whom the rest of the Court agrees, delivers the judgment. It was common ground that, if the conversion at Stage 3 involved separate conversions of the QCBs and the non QCBs, the appeal must fail. The question whether there was a single conversion, or two separate conversions, must be a question of applying the provisions of TCGA to the facts. The answer is not mandated in the appellants favour by the fact that they utilised a single transaction [19]. Plainly, section 116(1)(b) contemplates the possibility of a single transaction which involves a pre conversion holding of both QCBs and non QCBs, and this, coupled with the fact that the Court of Appeals interpretation renders the words or include appearing in section 116(1)(b) otiose are powerful arguments in support of the appellants construction [20]. However, the appellants interpretation would be inexplicable in terms of the policy expressed in these provisions, which is to enable all relevant reorganisations to benefit from the same rollover relief. Taxpayers could avoid those provisions with extreme ease if the appellants are right [21]. By looking to the fiscal policy behind the scheme, the Court of Appeal applied a purposive approach [22]. The Court of Appeal did not give any meaning to the words or include in section 116(1)(b), but this is appropriate because in section 132(3), as the Upper Tribunal pointed out, it is clear that the intention of Parliament was that each security converted into a QCB should be viewed as a separate conversion. Moreover, it is not an objection that section 127 contemplates a single asset because Parliament has required sections 127 to 131 to be applied with necessary adaptations. In those circumstances the clear words principle is observed in the present case [23]. There are cases where to achieve Parliaments obvious intention a strained interpretation may need to be taken in place of one which would be contrary to the clear intention of Parliament. This principle can apply even to a tax statute. However, the circumstances in which such an approach can be applied must be limited, for example, to those where there is not simply some inconsistency with evident Parliamentary intention but some clear contradiction with it. Moreover, the intention of Parliament must be clearly found on the wording of the legislation [24]. Nothing in Lady Ardens judgment detracts from that principle, but it is unnecessary to consider its application to this case because the construction of the relevant provisions is clear without resort to it [26]. Lady Arden concluded that, in summary, on the true interpretation of TCGA section 116(1)(b), the potential gain within the non QCBs was frozen on conversion and did not (to use Lewison LJs words) disappear in a puff of smoke [27].

In about December 2005, the claimant commenced employment as a sessional music assistant at X school (the school). On 4 October 2007, the parents of M, a 15 year old boy, who was undergoing a short period of work experience at the School, went to see the head teacher. They complained that the claimant, who was 22 years of age at the time, had kissed M. They also showed the head teacher two text messages which they said the claimant had sent to M and an entry in Ms diary which appeared to indicate that some form of sexual relationship had developed between the two of them. On the same day, the head teacher summoned the claimant and informed him that he was being suspended because of an incident involving a young man. The schools child protection co ordinator later provided a statement to the school in which she said that, after he had been suspended, the claimant admitted to her that he had kissed M and that he had sent a text inviting him to his house, but was concerned that this could be misinterpreted, so he added that they could go for a drive instead. On 1 November, the head teacher wrote to the claimant formally confirming his suspension on the grounds that the allegations, if proved, could constitute gross misconduct of having formed an inappropriate relationship with a child. By a further letter of the same date, she informed the claimant that he was required to attend an investigatory interview on 15 November and that he was entitled to be represented by a trade union representative or work colleague. In fact, he was not a member of a trade union. The interview was postponed several times because the claimants solicitor had advised him that it was not in his interests to attend an interview until the police had completed their investigations. By letter dated 12 December 2007, the head teacher notified the claimant that a disciplinary hearing would be convened in the new year, that the school was required to continue with its investigations and that a report would be submitted to the governing body for its consideration. She added that since the claimant continued to refuse to attend any investigatory meetings, she would be willing to include in her report any written submissions that he wished to make about the allegations. On 18 December, the claimant repeated the legal advice that he had been given that he should not become involved in the disciplinary proceedings until the police investigation was completed. By 1 February, it was known that the Crown Prosecution Service intended to take no further action. On that date, the claimants solicitors wrote to the head teacher stating that the claimant was unable to attend a meeting on 5 February. The letter included a number of written representations to be placed before that meeting denying the allegations and stating that no improper conduct had taken place. By letter dated 6 February, the head teacher informed the claimant that the investigation was complete and an investigation report had been written. A disciplinary hearing was to take place on 21 February before a panel of governors to consider the allegations and the management case would be presented by the head teacher. A copy of the investigation report would be sent within a few days and this would be the evidence presented at the hearing. The claimant was told that he was entitled to be represented at the hearing by a trade union representative or a work colleague. The investigation report was duly provided to the claimant. Attached to it was a report from the local authoritys safeguarding officer, which stated that consideration should be given to referring the matter to the Secretary of State. The head teachers report concluded: there is strong evidence that the allegations against [the claimant] are proven. The panel should therefore fully consider his future employment . and whether a referral to the DFES is required. By letter dated 14 February, the claimants solicitors wrote to the school seeking permission for them to represent him at the hearing. They said that in view of the potential repercussions of an adverse finding, the potential impact on our client is such that it would be a breach of his human rights not to be represented. This request was refused by the school by letter dated 20 February. Prior to the hearing on 21 February, the claimant produced a document entitled Statement regarding M which disputed the allegations in some detail. The panel consisted of three of the schools governors (including the Chair). They were assisted by an HR adviser from the Schools Education Advisory Team (SEAT). The head teacher presented the management case and she was assisted by a SEAT HR adviser. The claimant, who was accompanied by his father, represented himself. Oral evidence was given by the schools child protection co ordinator and one other witness. The claimant refused to answer questions, stating that he believed the proceedings to be unfair for the reasons given in his solicitors letters. Neither the claimant nor his father asked questions of any of the witnesses. By letter dated 27 February, the chair of the governors informed the claimant of the outcome of the hearing. After reciting the evidence, he concluded: The panel gave full and careful consideration to the evidence that was made available to them. The panel are satisfied that inappropriate contact was made with the child whilst the two of you were alone in the church. Further, that you sent a text message to the child inviting him to meet with you alone, during your own time and in doing so had instigated an inappropriate relationshipIn conclusion, the panel believe that, on the balance of probabilities, it was your intention to cultivate a sexual relationship with the child. The panel are satisfied that these actions constitute an abuse of trust implicit in your position at the school and as such constitute gross misconduct. As a result, you are summarily dismissed in accordance with the schools disciplinary procedurethe panel are also concerned that you have behaved in a way which indicates you may be unsuitable for work with children and as such will be reporting your dismissal to the appropriate agencies. On 4 March 2008, the claimants solicitors gave notice of his intention to appeal against the dismissal decision. The head teacher responded that the appeal would be heard by the staff appeal committee and that the claimant had the right to be represented at the appeal by his trade union representative or work colleague. The hearing of the appeal was adjourned and it has never taken place. In the light of the decision to dismiss the claimant, the school were obliged by regulation 4 of the Education (Prohibition from Teaching or Working with Children) Regulations 2003 (SI 2003/1184) (the 2003 Regulations) to report the circumstances of the dismissal to the Secretary of State so that he could consider whether to make a direction under section 142 of the Education Act 2002 (the 2002 Act) prohibiting the claimant from carrying out certain types of work with children (including teaching). A person subject to such a direction was, at the relevant time, placed on a list known as List 99. Accordingly, by letter dated 7 May 2008, the chair of the governors notified the Childrens Safeguarding Operations Unit (POCA) of the claimants dismissal for gross misconduct. The statutory regime applicable to cases referred to the Secretary of State under regulation 4 of the 2003 Regulations ceased to apply to cases where the Secretary of State had not invited representations by 20 January 2009. The claimants case was one such case. A new regime (to which the claimants case applies) was established under the Safeguarding Vulnerable Groups Act 2006 (the 2006 Act) as subsequently amended. On 19 May 2008, the claimant issued judicial review proceedings seeking a declaration that, by reason of the denial of his right to legal representation, the disciplinary hearing before the school governors was in breach of his rights under article 6 of the European Convention on Human Rights (ECHR). He succeeded before Stephen Morris QC (sitting as a deputy High Court judge) who ordered the allegations of misconduct to be heard by a differently constituted disciplinary committee at which the claimant was to be given the right to legal representation. The schools appeal was dismissed by the Court of Appeal (Laws, Wilson, Goldring LJJ) [2010] 1 WLR 2218. The statutory scheme Section 1(1) of the 2006 Act established the Independent Barring Board. The board was renamed the Independent Safeguarding Authority (ISA) by section 81(1) of the Policing and Crime Act 2009 and I shall so refer to it. The ISA is required to establish and maintain the childrens barred list (section 2(1)(a) of the 2006 Act). As from 12 October 2009, a person is barred from a regulated activity relating to children if he is included in the childrens barred list (section 3(2)(a)). Regulated activities relating to children are defined in Schedule 4 to the 2006 Act. They include any form of teaching, training or instruction of children, unless the teaching, training or instruction is merely incidental to teaching, training or instruction of persons who are not children (para 2(1)(a)) and any form of care for or supervision of children, unless the care or supervision is merely incidental to care for or supervision of person who are not children (para 2(1)(b)). Part 1 of Schedule 3 applies for the purpose of determining whether an individual is included in the childrens barred list. It provides: 3(1) This paragraph applies to a person if (a) it appears to [ISA] that the person has (at any time) engaged in relevant conduct, and (b) [ISA] proposes to include him in the childrens barred list. (2) [ISA] must give the person the opportunity to make representations as to why he should not be included in the childrens barred list. (3) [ISA] must include the person in the childrens barred list if (a) it is satisfied that the person has engaged in relevant conduct, and (b) it appears to [ISA] that it is appropriate to include the person in the list. 4(1) For the purposes of paragraph 3 relevant conduct is conduct which endangers a child or is likely to endanger a (a) child; (b) conduct which, if repeated against or in relation to a child, would endanger that child or would be likely to endanger him; (c) (including possession of such material); (d) (e) [ISA] that the conduct is inappropriate. conduct involving sexual material relating to children conduct of a sexual nature involving a child, if it appears to Para 16 of Schedule 3 deals with representations to ISA. A person who is, by virtue of any provision of the 2006 Act, given an opportunity to make representations must have the opportunity to make representations in relation to all of the information on which ISA intends to rely in taking a decision under the Schedule (para 16(1)). The opportunity to make representations does not include the opportunity to make representations that findings of fact made by a competent body were wrongly made (para 16(3)). Findings of fact made by a competent body are findings made in proceedings before one or more of the bodies specified in para 16(4) or any of its committees. Para 19 of Schedule 3 gives ISA the power to require various specified persons to provide relevant information to it. It may require the chief officer of a relevant police force to provide any such relevant information (para 19(1)(c)). Para 19(3) provides that, for the purposes of sub paragraph (c), relevant information relating to a person is information which the chief officer thinks might be relevant in relation to the regulated activity concerned. Section 37 provides that the ISA may require various specified persons to provide any prescribed information that he or it holds in relation to a person ISA is considering whether to include in, or remove from, a barred list. Prescribed information is defined in the Schedule to The Safeguarding Vulnerable Groups Act 2006 (Prescribed Information) Regulations 2008 (SI 2008/3265). It includes information relating to the persons employment and the reasons why permission was withdrawn for him to engage in the regulated or controlled activity in question (para 4(h)); and information relating to the persons conduct and any information other than that relating to [the persons] conduct which is likely to, or may, be relevant in considering whether [the person] should be included in or removed from a barred list including information relating to any previous offences, allegations, incidents, behaviour or other acts or omissions (para 5(f)). Regulated activity providers who hold any prescribed information in relation to a person engaged in regulated activity provided by him must provide the information to the ISA in the circumstances specified in section 35 of the 2006 Act. If the person is included in the list, he has a right of appeal to the Upper Tribunal if the Tribunal gives permission (section 4(1) and (4) of the 2006 Act). An appeal may be made only on the grounds that the ISA has made a mistake (a) on any point of law or (b) in any finding of fact which it has made and on which the decision was based (section 4(2)). For the purpose of subsection (2), the decision whether or not it was appropriate for an individual to be included in a barred list is not a question of law or fact (section 4(3)). The ISA referral guidance The ISA has published referral guidance for use in connection with referrals to it. Annexed to the guidance are extensive Guidance Notes for the Barring Decision Making Process (the barring process). These are public documents. The guidance notes that were in force at the time of the Court of Appeals decision were issued in February 2009. These were superseded in August 2010 by guidance notes which made minor (and immaterial) amendments. I shall refer to the current version. It is necessary to consider these in some detail, because, for reasons that will become clear, they are central to the issues that arise on this appeal. The referral guidance has no statutory force. As is stated in the introduction to the guidance notes, they are intended to be used by case workers in the determination of decisions with regard to whether referred individuals should be barred from working with vulnerable groups. Para 2.1 states that the purpose of the barring process is to ensure that all barring decisions follow a process which affords a fair, rigorous, consistent, transparent and legitimate assessment of whether an individual should be prevented from working with children. based on the information available to the [ISA]. The guidance notes identify five stages of the barring process. The first is the Initial assessment. The ISA can consider information from any source (para 4.1.1). The second stage is Evidence evaluation. This provides: 5.1 The next stage in the process is deciding, on the balance of probabilities, whether the event (or events) happened, and whether or not relevant conduct or risk of harm occurred. It can be taken as a matter of fact that, in some circumstances such as the notification of convictions, cautions and decisions by competent bodies (Appendix C), the event happened. However, in all other circumstances, including allegations, it is the assessment of all the available evidence that will assist in the determination of whether or not, on the balance of probabilities, the event happened 5.2 Referral information 5.2.1 Referral information is received from employers who have dealt with individuals through their internal disciplinary procedures. The conclusions reached by employers are reviewed to establish, on the balance of probabilities, the facts. It is the facts of the case that determine whether the case requires further consideration and not necessarily the conclusions the employer reached. 5.3 Sources of information 5.3.3 Referrals may be received relating to allegations that, if proven, would have amounted to auto bar offences or auto bar with reps offences. Here you must still fully examine the evidence for yourself on the basis of the balance of probabilities despite the lack of a criminal conviction (see also 5.7). 5.3.5 While the ISA does not have an investigatory function, relevant information held by other organisations, agencies and bodies may be sought. 5.5 Further information 5.5.1 The acquisition of as much relevant information as is necessary and reasonably sufficient to make a fair and defensible barring decision is all that is required 5.9 General principles in relation to the assessment of evidence 5.9.1 When case workers have completed the process of receiving and gathering all the information, evidence must be assessed in terms of what reliance may be placed on it for the purposes of making a barring decision. 5.9.2 As mentioned already, in cases of cautions, convictions and findings of fact by competent bodies, case workers will be able to treat the facts as proved. [Lord Brown explains who competent bodies are at para 98 of his judgment]. 5.9.3 In relation to other evidence, case workers will first need to assess each piece of evidence and judge how reliable it is. The judgment as to how reliable a piece of evidence is will determine how much weight can be placed on it. Less reliable evidence will carry less weight in a barring decision than highly reliable evidence. Some evidence will be so unreliable, for example because it is contradicted or called into question by other reliable evidence, that no lawful reliance can be placed on it at all. Such evidence must be disregarded altogether; a failure to do this could give rise to an appeal on the grounds that the ISA had made an error in its findings of fact. 5.9.7 Case workers must always be mindful of the principles that the findings of fact that can or cannot be made in the light of the evidence may mean that case workers must re assess which powers can be relied on to bar. Stage 3 (Case assessment) contains detailed guidance as to the assessment of the gravity of the case and the level of risk of future harm presented by the individual. Para 6.11 states that there may be referral of particularly difficult cases to a specialist for an opinion. Such cases may include those where advice is required about issues of mental health or where the motivation of the applicant or referred person is unclear, for example, in the case of alleged grooming. Stage 4 is entitled Representations. Para 7.1 states that, if the ISA has decided that the evidence supports a bar for the childrens list (that is the minded to bar stage has been reached), the person must be given the opportunity to make representations as to why he or she should not be included in the list. Para 7.3 states that the request for representations that is sent to the person draws attention to findings of fact that are material to the barring decision and the areas of risk identified so that any representation made by the applicant/referred individual can address specific areas to be explored in the case assessment. Para 7.4 is important. It provides: Representations could alter a case workers original conclusions in two areas. Firstly, in relation to the evidence, findings of facts or the value or significance of other evidence being relied on may be genuinely called into question; secondly, the conclusions reached in the structured judgment procedure [ie stage 3] may need to be reviewed in the light of further evidence or things presented in the representations. Para 7.5 provides that the representations are ordinarily expected to be in writing by the individual under consideration. But they may be made by others on behalf of the individual, provided that they are authorised. The final stage of the Process is entitled Final decision. It includes: 8.1 The decision after receiving representations relates to the level of potential future risk of harm to children and/or vulnerable adults taking into consideration, where applicable, any representations that have been made and all pertinent facts and any specialist opinions. The guiding principle is that the assessment of the case is based on a structured judgment regarding an individuals risk of harm to vulnerable groups whether, based on that process, it is appropriate to include any such individual in the list(s). 8.2 The appropriateness test is based on the requirement to ensure children and vulnerable adults are safeguarded and that any barring decision is not tarnished by any desire to act as a sanction or punishment. A key issue is that decisions to include or not on the barred list(s) are only taken after the merits of each case have been fully considered following an assessment of all available, relevant facts and evidence, any specialist opinions and, where appropriate, any representations made. In addition to the published guidance notes, case workers have the benefit of Case Worker Guidance to assist them in making balanced, factually sound and defensible decisions from stages 2 to 5 of the barring process. This guidance is not published. It is intended to supplement the guidance contained in the guidance notes. The version that was provided to the court (which is redacted) is dated April 2011. There is a section headed Assessing the reliability of the evidence. It includes: 2.12 The judgment as to how reliable a piece of evidence is will determine how much weight can be placed on it. Less reliable evidence will carry less weight in a barring decision than highly reliable evidence. Some evidence will be so unreliable, for example, because it is contradicted or called into question by other reliable evidence, that no lawful reliance can be placed on it at all. Such information must be disregarded altogether and the reason for such a decision documented; as failure to disregard such information could give rise to an appeal. 2.13 Consider the credibility of the witnesses and the referred individual and in your assessment take account of any issues that relate to their motivation and their previous conduct. Is there anything in the background to the matter which affects anyones credibility? Is there history of similar problems or issues relating to their honesty? 2.14 The underlying motivation of the person giving the information or the referred individual may be very important in your assessment and the weight you allot to it; especially where you consider that it involves prejudice, financial gain or malice. 2.15 You should be careful in the way you deal with the opinions of those giving information. While it is sometimes helpful to receive an interpretation of a set of circumstances or facts from, for example, a care worker or police officer, it is also important to remember that an opinion is essentially a persons belief; it is a subjective observation of statement which may or may not be supported by evidence. Then at para 2.30, there is a section headed Professional opinions and previous findings. It includes: Can we take at face value the findings of a referring organisations disciplinary process? For the most part, such findings, if supporting evidence is on the file, will be fairly straightforward to confirm as reliable. However, there are plenty of examples where the referring organisations have either made decisions without the full facts available, or come to partial findings that have led to a dismissal We are in a unique position in that we are able to pull together relevant information from a range of agencies and it is therefore essential we make our own findings about the evidence available to us. More fundamentally, in the above example, a headmasters investigatory report to a disciplinary panel may conclude that an allegation is proven; this is not a finding of fact, so we should evaluate the evidence too. Obviously they will have a good contextual knowledge of the case (better in many cases than ourselves) but there could be any number of reasons why that finding is not defensible (they were not privy to all the information; a witness has since retracted/revisited a statement; they simply did not come to a reasoned conclusion, etc) so we should evaluate the evidence ourselves and come to our own conclusions. The only cases in which this is not relevant is when there is a finding of fact made by a competent body. The issue The issue is whether the governors decision not to allow the claimant to have legal representation at the disciplinary hearing violated his rights under article 6 of the ECHR which, so far as material, provides: 1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. It is common ground that the civil right with which we are concerned is the claimants right to practise his profession as a teaching assistant and to work with children generally. There is no doubt that this right would be directly determined by a decision of the ISA to include him in the childrens barred list. He does not, however, contend that the proceedings before the ISA would violate his article 6(1) rights. His case is that (i) the disciplinary proceedings would have such a powerful influence on the ISA proceedings as to engage article 6(1) in both of them and (ii) the consequences of being placed on the childrens barred list by the ISA would be so grave for him that the right to a fair hearing vouchsafed by article 6(1) meant that he was entitled to legal representation in both proceedings. If there is no connection at all between the disciplinary proceedings and the proceedings before the ISA, it is obvious that article 6 has no role to play in the disciplinary proceedings. Ex hypothesi, they have nothing to do with the civil right in question. The principal question raised on this appeal is what kind of connection is required between proceedings A (in which an individuals civil rights or obligations are not being explicitly determined) and proceedings B (in which his civil rights or obligations are being explicitly determined) for article 6 to apply in proceedings A as well as proceedings B. Does the connection have to be so strong that the decision in proceedings A in effect determines the outcome of proceedings B (as Mr Bowers QC submits). Or is it sufficient that the decision in proceedings A has an effect on proceedings B which is more than merely tenuous or remote (as Mr Drabble QC submits)? Or does the connection lie somewhere between these two positions? Having considered the Strasbourg jurisprudence, Laws LJ (with whom Wilson and Goldring LJJ agreed) adopted a test somewhere along the spectrum between the two extremes. He said [2010] 1 WLR 2218, para 32 that the ECtHR approach was likely to be met where the decision in the relevant proceedings has a substantial influence or effect on the later vindication or denial of the claimants Convention right. He amplified this at para 37 in these terms: In my view the effect of the learning (and I have already foreshadowed this) is that where an individual is subject to two or more sets of proceedings (or two or more phases of a single proceeding), and a civil right [or] obligation enjoyed or owed by him will be determined in one of them, he may (not necessarily will) by force of Article 6 enjoy appropriate procedural rights in relation to any of the others if the outcome of that other will have a substantial influence or effect on the determination of the civil right or obligation. I do not mean any influence or effect which is more than de minimis: it must play a major part in the civil rights determination. I do not intend a hard and fast rule. Principles developed by the Strasbourg court for the interpretation and application of the Convention tend not to have sharp edges; as I have said, the jurisprudence is generally pragmatic and fact sensitive. The nature of the right in question may make a difference. So may the relative authority of courts, tribunals or other bodies playing their respective parts in a case, such as the present, where connected processes touch a Convention right. The Strasbourg jurisprudence Mr Bowers (supported by Miss Lieven QC) submits that there is no support in the Strasbourg jurisprudence for the test propounded by Laws LJ and that we should reject it. It is, therefore, necessary to examine some of the decisions of the ECtHR. In Ringeisen v Austria (No 1) (1971) 1 EHRR 455, the Austrian District and Regional Real Property Transactions Commission refused to approve the sale of a number of plots of land. The applicant challenged the refusal alleging bias and contending that his article 6 rights were violated for that reason. The Austrian statute provided that the refusal of approval rendered the sale null and void. The ECtHR said at para 94 that the French expression contestations sur (des) droits et obligations de caractre 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. A little later in the same paragraph, the court said: In the present case, when Ringeisen purchased property from the Roth couple, he had a right to have the contract for sale which they had made with him approved if he fulfilled, as he claimed to do, the conditions laid down in the Act. Although it was applying rules of administrative law, the Regional Commissions decision was to be decisive for the relations in civil law (de caractre 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. It is clear that the refusal of approval by the Commission (a matter of administrative law) was, as a matter of fact in that case, determinative of the private contractual rights of the parties. It did not merely influence the relations in civil law between the parties. It was dispositive of them. But it is not at all clear that the court was saying that this was the test for all cases. The words covers all proceedings the result of which is decisive for private rights and obligations (emphasis added) could mean that the circumstances in which article 6(1) is engaged include, but are not limited to, such cases. It will be seen, however, that the language of para 94 of Ringeisen (proceedings the result of which is decisive for private rights and obligations) has been repeated as a mantra in other cases where the facts were materially different. The next case is Le Compte, Van Leuven and De Meyere v Belgium (1981) 4 EHRR 1. The applicants were suspended from practising medicine for three months by the Provincial Council of the Ordre des mdecins. They appealed unsuccessfully to the Appeal Council and from there (again unsuccessfully) to the Court de Cassation. Dr. Le Compte complained to the ECtHR that his article 6 rights had been violated because the proceedings before the Appeals Council had not been conducted in public. An issue arose as to whether article 6 was engaged at all. The applicants argued that what was in issue before the Provincial and Appeals Councils was their right to continue to practise in their profession (a civil right). The Government argued that the decisions of those bodies had no more than an indirect effect on that right, since they did not review the lawfulness of the earlier suspension from practice, but merely had to decide whether breaches of the rules of professional conduct of a kind justifying disciplinary sanctions had actually occurred (para 46). Following Ringeisen, the court said that it must be shown that the dispute (before the Appeals Council) related to civil rights and obligations, in other words that the result of the proceedings was decisive for such right (para 46). At para 47, the court said: As regards the question whether the dispute related to the above mentioned right, the court considers that a tenuous connection or remote consequences do not suffice for article 6(1), in either of its official versions (contestation sur, determination of): civil rights and obligations must be the objector one of the objectsof the contestation (dispute); the result of the proceedings must be directly decisive for such a right. Whilst the court agrees with the Government on this point, it does not agree that in the present case there was not this kind of direct relationship between the proceedings in question and the right to continue to exercise the medical profession. This seems to be the first case in which the ECtHR contrasted the notion that the result of the proceedings must be directly decisive with the notion of a tenuous connection or remote consequences. On the facts of Le Compte, the issue for the Appeals Council was whether the breaches of the rules of professional conduct on which the decision to suspend was based had actually occurred. But the link between the findings of breach and the decision to suspend could not have been closer. If the appeal failed, the decision to suspend would remain unimpaired. The decision of the Appeals Council was determinative of the applicants civil right to practise their profession during the period of suspension. In my view, the court was not introducing a gloss on the Ringeisen test that any connection more than tenuous or remote would suffice. On the facts of this case (as in Ringeisen itself), the result of the proceedings in question was determinative of the civil rights in issue. The next case is Fayed v United Kingdom (1994) 18 EHRR 393. This is heavily relied on by Mr Bowers as showing that decisive means determinative in the sense of dispositive. The applicants had acquired the House of Fraser (HOF). The takeover had been opposed by Lonrho Plc which pursued a hostile campaign against the applicants through the media, including The Observer, a newspaper that it owned. This led to the issue of libel proceedings by the applicants. Some time later, the Government appointed two inspectors to investigate inter alia the circumstances surrounding the acquisition of HOF. The inspectors provisional conclusions included a finding that the applicants had made material dishonest misrepresentations at the time of the takeover. The Government published the report. Following the publication of the report, the applicants abandoned their libel claims against The Observer newspaper on the grounds that, in the light of the report, it had become impossible to prosecute the claims with any prospects of success. The applicants complained that, in violation of article 6(1), the inspectors had in their report determined their civil rights to honour and reputation (protected as part of their right to respect for private life under article 8) and had denied them effective access to a court to have those rights determined. The first question that the ECtHR had to decide was whether article 6(1) was applicable to the investigation by the inspectors. It was contended by the applicants that the result of the investigation was decisive of their article 8 rights and that the inspectors report effectively determined them without respecting any of the procedural guarantees of article 6(1). The court accepted that the published findings of the inspectors undoubtedly damaged the applicants reputations, but that was not sufficient to lead to the conclusion that the inspectors had determined their civil rights. The court said: 61. However, the court is satisfied that the functions performed by the inspectors were, in practice as well as in theory, essentially investigative. The inspectors did not adjudicate, either in form or in substance. They themselves said in their report that their findings would not be dispositive of anything. They did not make a legal determination as to criminal or civil liability concerning the Fayed brothers, and in particular concerning the latters civil right to honour and reputation. The purpose of their inquiry was to ascertain and record facts which might subsequently be used as the basis for action by other competent authoritiesprosecuting, regulatory, disciplinary or even legislative. Nevertheless, whilst there was a close connection between Lonrhos grievance against the Fayed brothers and the matters investigated by the inspectors, the object of the proceedings before the inspectors was not to resolve any dispute (contestation) between Lonrho and the applicants In short, it cannot be said that the inspectors inquiry determined the applicants civil right to a good reputation, for the purposes of article 6(1), or that its result was directly decisive for that right. 62. Acceptance of the applicants argument [as to the] interpretation of article 6(1) would in practice unduly hamper the effective regulation in the public interest of complex financial and commercial activities. In the courts view, investigative proceedings of the kind in issue in the present case fall outside the ambit and intendment of article 6(1). Thus it can be seen that the court accepted that there was a close connection between the findings of the inspectors and the determination of the civil right which was to be the subject of the libel proceedings, but that was not enough. Fayed shows that in the ECtHR lexicon, decisive is not the antonym of a tenuous connection or remote consequence. The court emphasised the fact that (i) the inspectors themselves said that their findings would not be dispositive of anything, (ii) the object of the proceedings before the inspectors was not to resolve any dispute and (iii) there was an important policy reason for not applying article 6 in investigative proceedings conducted at the instance of regulatory or other authorities. In Balmer Schafroth v Switzerland (1998) 25 EHRR 598 the applicants lodged an objection with the Federal Council requesting that it refuse to extend a licence to operate a power station. The council (which was the authority of first and last instance to deal with the matter) rejected the objection and extended the licence. The applicants invoked articles 6(1) and 13, arguing that they had not had access to a tribunal and that the procedure followed by the council had not been fair. They said that there had been a violation of their civil right to the protection of their physical integrity under articles 2 and 8. The court found that article 6(1) was not engaged. At para 32, it set out the familiar test: the outcome of the proceedings must be directly decisive for the right in question. As the court has consistently held, mere tenuous connections or remote consequences are not sufficient to bring article 6(1) into play. At para 39, it said that the question in particular was whether the link between the councils decision and the applicants article 2 and 8 rights was sufficiently close to bring article 6(1) into play, and was not too tenuous or remote. At para 40, it answered this question saying that the applicants were unable to establish that the operation of the power station exposed them personally to a danger that was not only serious but also specific and, above all, imminent. Consequently neither the dangers nor the remedies were established with a degree of probability that made the outcome of the proceedings directly decisive within the meaning of the courts case law. In the result, the connection between the councils decision and the right invoked by the applicants was too tenuous and remote. This is an example of a case where there is only one set of proceedings in issue (ie the first and last instance authority adjudicating on the same right). In such a case, the question is whether the proceedings are decisive in the ordinary sense of being dispositive of the effective exercise of the applicants rights. Another example of such a case is Slovenske Telekomunikacie (Application No 47097/99) (unreported) given 28 September 2010. There is also a line of Strasbourg decisions on the question whether article 6 is engaged where an issue arising in civil proceedings is referred to a constitutional court. This question arose in particular in relation to the question whether proceedings before the constitutional court were to be taken into account in determining whether the length of the civil proceedings was reasonable within the meaning of article 6(1). Initially, the ECtHR decided that the ECHR did not apply to rights determined by a constitutional court because of their constitutional nature: see Buchholz v Germany (1981) 3 EHRR 597. This approach was, however, rejected in Deumeland v Germany (1986) 8 EHRR 448 where at para 77 the ECtHR held that, although the Constitutional Court had no jurisdiction to rule on the merits of the dispute, its decision was capable of affecting the outcome of the claim. Since then, the Deumeland approach has been followed repeatedly by the ECtHR in cases where questions are referred to a constitutional court. Thus in Poiss v Austria (1987) 10 EHRR 231, in relation to the applicability of article 6(1), the court said: Any decisionwhether favourable or unfavourableby the authorities dealing with the matter subsequently affected, affects or will in future affect their property rights. The outcome of the proceedings complained of is accordingly decisive for private rights and obligations (see Ringeisen), so that article 6(1) applies in the instant case. that Deumeland should not be followed and at para 37 said that: In Bock v Germany (1989) 12 EHRR 247, the ECtHR rejected an argument there are circumstances in which proceedings before the constitutional court must be taken into the reckoning in determining the relevant period. It has to be considered whether the constitutional courts decision was capable of affecting the outcome of the case which has been litigated before the ordinary courts. The question whether article 6(1) is applicable to constitutional complaint proceedings must accordingly be treated on the merits of each case, in the light of all the circumstances (emphasis added). Another case involving constitutional proceedings is Ruiz Mateos v Spain (1993) 16 EHRR 505. This is one of the decisions relied on by Laws LJ in support of his test of substantial influence or effect. The applicants brought a claim for the restitution of shares which had been expropriated by legislative decree of the Spanish Government. An issue arose as to the constitutionality of the decree and this was referred to the Spanish Constitutional Court. The applicants complained of breaches of article 6(1) by reason of (i) the delays occasioned by the proceedings in the Constitutional Court and (ii) the alleged failure to accord them a fair hearing before the Constitutional Court. The Government argued inter alia that article 6(1) was not applicable in the proceedings before the Constitutional Court. The ECtHR rejected this argument. The court said, in relation to the length of the proceedings, that the relevant period included the time taken in the proceedings before the Constitutional Court and was not limited to the duration of the civil proceedings. At para 35, the court said that, according to its well established case law, proceedings in a Constitutional Court are to be taken into account for calculating the relevant period where the result of such proceedings is capable of affecting the outcome of the dispute before the ordinary courts (emphasis added). The Commission explained at para 52 of its Opinion that although the purpose of these constitutional proceedings was not the same as that of the civil proceedings, the length of the constitutional proceedings inevitably contributed to the prolongation of the civil proceedings. As regards the allegation that the applicants had been denied a fair hearing before the Constitutional Court, the court observed that there was a close link between the subject matter of the proceedings before that court and the civil proceedings (para 59). The annulment of the decree by the Constitutional Court would have led the civil courts to allow the applicants claim. For this reason, the ECtHR held that article 6(1) applied to the proceedings before the Constitutional Court. The Commission put the point very clearly at para 87 of its opinion: In effect, therefore, it is as if the applicants case was dealt with in a single set of proceedings before the Spanish courts. Although these proceedings involved a civil stage, in the strict sense, and a constitutional stage, these stages were so closely bound up with each other that to dissociate them would be tantamount to crediting a legal fiction. In the specific circumstances of the case, [to interpret article 6(1) as excluding the constitutional stage of the proceedings] would be excessively formalist and likely to undermine to a considerable extent the guarantees afforded to the applicants by the Convention, whereas, according to case law, the Convention must be interpreted in such a way as to ensure its efficacy and to safeguard the individual in a real and practical way, rather than a fictitious and illusory way, as regards those areas with which it deals. In relation to the question of reasonable period, unsurprisingly the ECtHR has consistently held that, where a constitutional issue arises in civil proceedings and this can only be determined by a Constitutional Court, the time taken before that court must be taken into account in calculating the length of the civil proceedings. The position should be no different from what it would be if the civil court had jurisdiction to decide the constitutional issue for itself. It is as if the proceedings before the Constitutional Court and the civil court were all part of the same proceedings. For the same reason, the guarantee of a fair hearing afforded by article 6(1) should apply to proceedings before the Constitutional Court as it does to proceedings before the civil court. The next case referred to by Laws LJ was Lizarraga v Spain (2004) 45 EHRR 1031. This was a case similar to Ruiz Mateos. At para 47, the ECtHR said that, although the proceedings before the Constitutional Court bore the hallmarks of public law proceedings, they were decisive of the applicants proceedings in the ordinary courts to have a dam project set aside. The court found that the proceedings as a whole may be considered to concern the civil rights of the applicants. The third ECtHR case relied on by Laws LJ was the Grand Chamber decision in Ocalan v Turkey (2005) 41 EHRR 985. This is a criminal case. The applicant was detained and held in police custody where he was questioned by the security forces. He received no legal assistance during this period. Thereafter, he was remanded in custody pending trial and during this period he was allowed restricted access to his lawyers. He made several self incriminating statements which were a major contributing factor to his conviction at trial. It was held by the ECtHR that there had been a violation of article 6(1) in conjunction with article 6(3)(b) and (c). At para 131 the Grand Chamber endorsed the following statement: . in these circumstances, the court is of the view that to deny access to a lawyer for such a long period and in a situation where the rights of the defence might well be irretrievably prejudiced is detrimental to the rights of the defence to which the accused is entitled by virtue of article 6. I agree that in such a case, the requirements of article 6(1) (criminal) and 6(3) are necessarily engaged sooner than in civil cases because of the specific article 6 right to the presumption of innocence and legal representation after charge with which it is inextricably linked. That is why I do not consider that this decision sheds light on the issue that arises in the present appeal. The concept of irretrievable prejudice has, however, been used by the ECtHR in the civil context of claims for interim measures. In Markass Car Hire Ltd v Cyprus (Application No 51591/99) (unreported) given 23 October 2001, the domestic court had made an interim order without notice to the applicant for the delivery up of a fleet of vehicles. An issue arose as to whether article 6 applied to the interim order proceedings. The ECtHR (Third Section) noted that, unless the interim decision was reversed by the appeal court within a short time, it would affect the legal rights of the parties. The court could not overlook the drastic effect of the interim decision. The combined effect of the measure and its duration caused irreversible prejudice to the applicants interests and drained to a substantial extent the final outcome of the proceedings of its significance. In these circumstances, the court considered that the interim decision in effect partially determined the rights of the parties in relation to the final claim against the applicant in [the] civil action. This approach to interim measures was endorsed by the Grand Chamber in Micallef v Malta (2010) 50 EHRR 920. At para 74, the court said that the result of the interim proceedings must be directly decisive for the right in question, mere tenuous connections or remote consequences not being sufficient to bring article 6(1) into play. At para 79, they noted that a judges decision on an injunction will often be tantamount to a decision on the merits of the claim for a substantial period of time, even permanently in exceptional cases. At para 85, they said that the nature of the interim measure, its object and purpose as well as its effects on the rights in question should be scrutinised. Whenever an interim measure can be considered effectively to determine the civil right or obligation at stake, notwithstanding the length of time it is in force, article 6 will apply. Before I attempt to distil the principles that can be derived from these cases which are relevant to this appeal, I need to refer to some recent English cases. The English cases Laws LJ derived support for his test from Kulkarni v Milton Keynes Hospital NHS Trust [2009] EWCA Civ 789, [2010] ICR 101. A doctor claimed that he was entitled to legal representation in disciplinary proceedings brought by his employer. Smith LJ (with whom Wilson LJ and Sir Mark Potter P agreed) said obiter at para 67 that she would have held that article 6 is engaged where an NHS doctor faces charges which are of such gravity that, in the event they are found proved, he will be effectively barred from employment in the NHS. She explained at para 66 why article 6 was engaged on the facts of that case. The NHS is, to all intents and purposes, a single employer of doctors for the whole country. If Dr Kulkarni was found guilty of the charge, he would be unemployable as a doctor and would never complete his training. Thus, the internal disciplinary procedure was, as a matter of fact, dispositive of his right to work in his chosen field. R (Wright) v Secretary of State for Health [2009] 1 AC 739 was concerned with the procedure for provisionally listing a worker on the Protection of Vulnerable Adults (POVA) list under the 2006 Act. The House of Lords held that some interim measures have such a clear and decisive impact upon the exercise of a civil right that article 6(1) does apply (per Baroness Hale of Richmond, at para 21). Provisional listing in the POVA list was a determination of the civil right to work because it had detrimental and often irreversible and incurable effects (para 25). Thus, the procedure was, as a matter of fact, dispositive of the claimants right to work in his chosen field. Neither Kulkarni nor Wright sheds light on the meaning and boundaries of the Ringeisen test. They contain no analysis or discussion of the meaning of what I have called the mantra. They are merely examples of cases where, as a matter of fact, the proceedings determined the civil right in question. We were also shown other domestic decisions where the test has been applied such as Runa Begum v Tower Hamlets London Borough Council (First Secretary of State intervening) [2003] 2 AC 430 (paras 30 and 78); R (A) v Croydon London Borough Council (Secretary of State for the Home Department intervening) [2009] 1 WLR 2557 (paras 37, 59 and 63) and Ali v Birmingham City Council (Secretary of State for Communities and Local Government intervening) [2010] 2 AC 39 (paras 36 and 43). In each of these passages, the mantra of directly decisive is stated, but there is no analysis of precisely what it means. Conclusions on the test for the application of article 6 I have found it necessary to examine the facts of the ECtHR decisions to which I have referred in some detail because, in my view, the jurisprudence contains no clear explanation of what directly decisive means. It is, therefore, necessary to see how the court has applied the Ringeisen test in order to see what light the cases shed on its meaning. I think that the following principles can be derived from the cases. First, it is clear that it is a sufficient condition for the application of article 6(1) in proceedings A that a decision in those proceedings will be truly dispositive of a civil right which is the subject of determination in proceedings B. In Ringeisen 1 EHRR 455 and Le Compte 4 EHRR 1, proceedings A were, on the facts of those cases, dispositive of the outcome of proceedings B. The constitutional cases such as Ruiz Mateos 16 EHRR 505 and Lizarraga 45 EHRR 1031 are further examples of the application of this principle. So too in the interim measures cases of Markass 23 October 2001 and Micallef 50 EHRR 37, the decision to grant interim measures was, on the facts, directly decisive in the sense that they caused irreversible prejudice to the applicants and, in effect, were wholly or at least partly determinative of the civil right in question. Article 6(1) therefore applied in all of these cases. But none of them states in terms that it is a necessary condition for the application of article 6(1) in proceedings A that they are dispositive of proceedings B. Secondly, although the word decisive is contrasted with tenuous connection or remote consequences, no decision was shown to us which states that article 6(1) applies in any case where the connection between the two proceedings is merely more than tenuous or where the consequences of a decision in proceedings A for proceedings B is merely more than remote. There is a spectrum of effect ranging from (i) merely more than tenuous and remote to (ii) dispositive. The fact that the ECtHR contrasted the two ends of the spectrum, for example, in Le Compte does not indicate that the court was saying that article 6(1) applies in any case where the link is merely more than tenuous or the consequences are merely more than remote. Thirdly, in a number of cases the court made it clear that a link that was merely more than tenuous or consequences that were merely more than remote is not sufficient. How close does the link have to be for article 6(1) to apply? In Balmer Schafroth 25 EHRR 598, the court said that there had to be a sufficiently close link. That begs the question: does the link have to be sufficient to be dispositive of the decision or is it enough that it is likely to have some influence on it? In Ruiz Mateos 16 EHRR 505, the court said that the test was whether the decision of the constitutional court was capable of affecting the outcome of the proceedings in which the civil rights were to be determined. In most cases where a constitutional question which arises in the course of a civil dispute is referred to a constitutional court, the decision of that court is likely to be capable of being determinative of the dispute. Ruiz Mateos was one such case. Fayed 18 EHRR 393 shows that, in some cases at least, the link must be very close. That was a strong case on the facts as the findings set out in the inspectors report had a potent impact on the applicants attempt to vindicate his article 8 right to honour and reputation. Nevertheless, the court held that the proceedings before the inspectors were not decisive of his civil rights. Fourthly, the cases show that, despite the apparent simplicity of the mantra, the ECtHR adopts a pragmatic context sensitive approach to the problem. It is not possible to classify all the cases into neat hermetically sealed categories. This may be considered to be unfortunate, since it is desirable to know in advance whether article 6(1) applies to a procedure or not. Anything less gives rise to uncertainty and potential litigation. But the ECtHR has propounded an approach which is not sharp edged and I do not think it is for us to introduce a rigidity which Strasbourg has eschewed. It is pertinent to note that in Ruiz Mateos, the Commission referred at para 87 of its Opinion to the specific circumstances of the case (see para 52 above) and in Bock 12 EHRR 247, para 37, the court said that the question whether article 6(1) was applicable must be treated on the merits of each case, in the light of all the circumstances (see para 49 above). Thus, in deciding whether article 6(1) applies, the ECtHR takes into account a number of factors including (i) whether the decision in proceedings A is capable of being dispositive of the determination of civil rights in proceedings B or at least causing irreversible prejudice, in effect, by partially determining the outcome of proceedings B; (ii) how close the link is between the two sets of proceedings; (iii) whether the object of the two proceedings is the same; and (iv) whether there are any policy reasons for holding that article 6(1) should not apply in proceedings A. This last factor was taken into account by the ECtHR in Fayed 18 EHRR 393 (see para 43 above). So where does this leave the test of substantial influence or effect proposed by Laws LJ? He was careful to say that an applicant may (not necessarily will) by force of article 6 enjoy appropriate procedural rights in relation to any of the others [set of proceedings] if the outcome of that other will have a substantial influence or effect on the determination of the civil right or obligation: [2010] 1 WLR 2218, para 37 (emphasis added). In my view, this is a useful formulation. It captures the idea of the outcome of proceedings A being capable of playing a major part in the civil rights determination in proceedings B. That is what fairness requires. Anything less would be excessively formalist (see para 87 of the Commissions Opinion in Ruiz Mateos 16 EHRR 505) and would give too much weight to the fact that the two sets of proceedings are, as a matter of form, separate. The focus should be on the substance of the matter. The court should always keep in mind the importance of ensuring that the guarantees afforded by article 6(1) are not illusory. It is clearly established that, where a decision in proceedings A is dispositive of proceedings B, article 6(1) applies in proceedings A as well as in proceedings B. That is what the right to a fair hearing in proceedings B requires. Why does fairness not require the same where the decision in proceedings A, although it is not strictly determinative, is likely to have a major influence on the outcome in proceedings B? As a matter of substance, there is not much difference between (i) an outcome of proceedings A which has a major influence on the result in proceedings B and (ii) an outcome of proceedings A which is dispositive of the result in proceedings B. In each case, the civil right of the person concerned is greatly affected by what occurs in proceedings A. If there is to be a difference in the application of article 6(1) between the two cases, it needs to be justified. There may be policy reasons (such as those referred to in Fayed 18 EHRR 393) based on the nature of the body charged with proceedings A which justify a different approach. But absent such policy reasons, it is difficult to see why article 6(1) should not apply in both cases. No such policy reasons have been identified in the present case. I propose, therefore, to consider whether article 6(1) applies in the present case on the basis of the test propounded by Laws LJ. Did article 6(1) apply in the disciplinary proceedings in the present case? At para 47 of his judgment, Laws LJ said: It seems to me that there is every likelihood that the outcome of the disciplinary process in a case like this, where there has been a finding of abuse of trust by virtue of sexual misconduct, will have a profound influence on the decision making procedures relating to the barred list. The governors conclusion comprised both a finding of fact and a judgment as to where the facts lay on the scale of severity that in the particular case fell to be applied. While the ISA may bring an independent mind to bear, it is not I think suggested that it operates a procedure for oral hearings with cross examination. The force of the disciplinary decision lies not only in the governors view of the primary facts, but especially in their judgment as to how those facts should be viewed. Without a de novo hearing and the possibility of oral evidence before the ISA, at the very least the flavour and the emphasis of those conclusions will remain important and influential. I accept at once the gravity of the consequences for the claimant of being placed on the childrens barred list. For that reason, I would agree with the courts below that, if article 6 did apply in the disciplinary proceedings, then the claimant was entitled to the enhanced procedural protection (normally associated with criminal proceedings) of the right to have legal representation at the disciplinary hearing. The more serious the allegation and the graver the consequences if the allegation is proved, the greater the need for enhanced protection: see Albert and Le Compte v Belgium (1983) 5 EHRR 533, para 30, R v Securities and Futures Authority Ltd, Ex p Fleurose [2002] IRLR 297, para 14 (per Schiemann LJ) and International Transport Roth GmbH v Secretary of State for the Home Department [2003] QB 728, para 38 (per Simon Brown LJ) and para 148 (per Jonathan Parker LJ). I agree with Mr Drabble that at the heart of the schools decision to dismiss the claimant were two issues of credibility: (i) whether the claimant should be believed when he denied that he massaged and kissed M when the two of them were alone in the church (the claimants case was that he moved away when M tried to kiss him); and (ii) whether, as alleged by the schools child protection officer (but denied by the claimant), the claimant made detailed damaging admissions including that he had kissed M and massaged his back. As Mr Drabble points out, the school determined both of these issues against the claimant following his disciplinary hearing at which the child protection officer was questioned by the disciplinary panel and their head teachers advisor from the SEAT. The letter of dismissal stated: the panel also heard evidence from the schools child protection officer. who recalled information relayed to her by you about the incident in the church. the information [the officer] recalls corresponds with a diary entry made by the child. In these circumstances, Mr Drabble submits that, even if the ISA had the capacity to make a decision for itself on the balance of probabilities on the papers, it is inevitable that they would adopt the schools credibility findings which had been arrived at after the disciplinary panel had been afforded the opportunity of seeing the claimant and the child protection officer giving oral evidence. The ISA would have had no opportunity to make a similar assessment of their credibility. Laws LJ essentially accepted these submissions at para 47 of his judgment. Central to his reasoning is the conclusion that the findings of the disciplinary panel would be likely to have a profound influence on the decision reached by the ISA without a de novo hearing and the possibility of oral evidence before the ISA. I have already set out in full the principal material statutory provisions and parts of the ISA guidance notes and the case worker guidance. It is necessary to emphasise certain aspects of them. They show that the ISA is required to exercise its own independent judgment both in relation to finding facts and making an assessment of their gravity and significance. So far as findings of fact are concerned, apart from the automatic barring provisions contained in paragraphs 1 and 2 of Schedule 3, the 2006 Act requires the ISA itself to be satisfied that the person has engaged in relevant conduct. The latest version of the guidance notes (August 2010) also makes it clear that the ISA is expected to make its own findings. It can consider information from any source (para 4.1.1). Para 5.1 states that, in all cases except where there has been notification of convictions, cautions and decisions by competent bodies, it is the assessment of all the available evidence that will assist in the determination of whether or not, on the balance of probabilities, the event happened (emphasis added). Para 5.2.1 states that the conclusions reached by employers are reviewed to establish, on the balance of probability, the facts. It is the facts of the case that determine whether the case requires further consideration and not necessarily the conclusions that the employer reached. Mr Drabble emphasised the use of the word reviewed and submits that this shows that the exercise which the ISA performs in relation to the facts is akin to a judicial review, rather than a de novo consideration of the facts. I cannot accept this submission. It is clear that the ISA is expected to form its own assessment of the facts on the basis of all the available evidence: the word review means no more than assess or reconsider. This is supported by the terms of paras 5.9.3 and 5.9.7 which I have set out at para 24 above. No judge would embark on such an exercise when undertaking a judicial review of a decision. Other important provisions in the guidance notes are to be found in paras 5.3.3, 5.3.5, 5.5.1, 7.3, 8.1 and 8.2. It is worth repeating part of para 8.2: A key issue is that decisions to include or not on the barred list(s) are only taken after the merits of each case have been fully considered following an assessment of all available, relevant facts and evidence, any specialist opinions and, where appropriate, any representations made (emphasis added). Mr Drabble draws attention to the fact that para 5.3.5 states that the ISA does not have an investigatory function. But it is clear that it can obtain information held by other organisations and bodies: see the powers referred to at paras 19 and 20 above. Moreover, the referred person is entitled to legal representation before the ISA. It is to be assumed that the legal representative will seek and obtain all relevant information which might advance the referred persons cause and present it to the ISA. Also of importance is para 2.30 of the case worker guidance (see para 31 above). I would emphasise We are in a unique position in that we are able to pull together relevant information from a range of agencies and it is therefore essential we make our own findings about the evidence available to usso we should evaluate the evidence ourselves and come to our own conclusions. The only cases in which this is not relevant is when there is a finding of fact made by a competent body (emphasis added). It is clear from this material that the ISA is required to make its own findings of fact and bring its own independent judgment to bear as to their seriousness and significance before deciding whether it is appropriate to place the person on the barred list. Why did the Court of Appeal conclude that, despite these procedures and, as Miss Lieven QC says, without any evidence to show that they had not been and would not be applied properly, the employers findings and decision would still exert a profound influence on the decision making process? There are two aspects to consider. First, the ISA does not operate a procedure for oral hearings with cross examination. There is nothing in either the statute or the guidance notes to prevent the ISA from operating such a procedure, but there is nothing which sanctions it either. I do not find it necessary to decide whether the ISA could operate such a procedure. There must be very few cases where the lack of an oral hearing (with examination and cross examination of witnesses) would make it unduly difficult for the ISA to make findings of fact applying its own judgment to the material. It is only in very few cases that a decision making body is faced with a conflict of evidence which it resolves solely or even primarily on the basis of the demeanour shown by the witnesses. There is usually something else. It may be that the account given by one person is self contradictory or inconsistent with the account that he or she gave on a different occasion; or doubt may be cast on its accuracy by a document; or one account is supported by the evidence of other apparently credible and reliable witnesses, whereas the other stands on its own; or one account is incredible or at least improbable. In any event, as Lord Bingham said in The Business of Judging (2000) at p 9, the current tendency is (I think) on the whole to distrust the demeanour of a witness as a reliable pointer to his honesty. At pp 9 13, he developed this view and supported it with references to a number of statements by judges and advocates. I accept, however, that there may occasionally be a case where the critical factor which leads an employer to find that there has been gross misconduct by an employee is the demeanour shown by the employee when giving his or her account to the disciplinary panel. But Mr Drabble does not submit that article 6(1) is engaged at the disciplinary proceedings stage only in order to accommodate such cases. His submission is that the Court of Appeal was correct to hold that findings of fact made by an employers disciplinary panel are generally and in most cases likely to exercise a profound influence on the decision making process before the ISA. I do not agree. The guidance notes and case worker guidance have been drafted in meticulous detail. They repeatedly make the point that it is for the ISA to make its own findings of fact on the basis of all the available material. Any case worker who follows the guidance notes and the case worker guidance knows that he or she should not defer to the findings of the referring body. The case worker guidance contains worked examples of evidence evaluation, including examples of both good and bad practice. I see no reason to doubt that case workers do as they are instructed. The lack of an oral hearing does not prevent the ISA from making its own findings of fact. In the present case, it would have to look at all the evidence, including the investigation report and appendices, the notes of the disciplinary hearing, the notes of any appeal hearing before the governors and the representations of the claimant himself. It would also consider any other information which was made available to it. There is no reason to believe that, contrary to its statutory duty and guidance, the ISA would be unable to form its own view of the facts independently of the view formed by the school authorities and governors. The second feature identified by Laws LJ is that the ISA would be influenced especially [by the governors] judgment as to how [the primary] facts should be viewed: [2010] 1 WLR 2218, para 47. In other words, the panels decision that it is appropriate that the employee should be placed on the barred list would profoundly influence the view taken by the ISA as to the appropriateness of that course. But as Miss Lieven points out, it is difficult to see why this should be so. Save where there is a conviction for a specified offence, a person can be included in a barred list only if the ISA is satisfied that he has engaged in the relevant conduct and it appears to the ISA that it is appropriate to include the person in the list (paragraph 3(3) of Schedule 3 to the 2006 Act). Stage 3 of the barring process (the case assessment) requires case workers to apply the ISA structured judgment procedure which contains a list of detailed questions that they must ask. To assist them in the process, they can obtain specialist advice: see para 6.11 of the guidance notes. The schools disciplinary panel reaches its conclusions as part of an inquiry into a question which is different from that which is addressed by the ISA. More fundamentally, the case workers know that they are required to form their own opinion on the gravity and significance of the facts and on whether it is appropriate to include the referred person in the barred list. There is no reason to suppose that the ISA will be influenced profoundly (or at all) by the schools opinion of how the primary facts should be viewed. Conclusion For all these reasons, I would hold that article 6(1) does not apply in the disciplinary proceedings and would allow the appeal. I do not, therefore, find it necessary to decide whether, if there is a breach of article 6(1) at the disciplinary proceedings stage, it is cured by the decision making processes of ISA itself and the right of appeal to the Upper Tribunal. The curative or full jurisdiction principle is well established by authorities such as Bryan v United Kingdom (1995) 21 EHRR 342 and R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295. At paras 40 to 42 of his judgment, Laws LJ held that this line of authority does not apply here. He said that this line of authority is concerned with cases where there is an administrative or executive decision which is not article 6 compliant (because the decision maker is not independent), but it is subject to judicial review, which is article 6 compliant; and the question is whether the judicial review jurisdiction is full enough to satisfy article 6. Laws LJ said that the Bryan/Alconbury line of reasoning has no application here since the barred list procedure before the ISA does not control or correct errors of the disciplinary process and, as Laws LJ put it, it is the claimants case that the latter will drive the former. Mr Bowers submits that this is an artificially narrow view of the full jurisdiction principle. He contends that the principle extends beyond mere administrative or executive decisions by officials and recognises that procedural deficiencies may be cured by a process when viewed as a whole. These are difficult issues on which I prefer to express no opinion. I would allow this appeal for the reasons given by Lord Dyson with which I LORD HOPE am in full agreement, and for the further reasons given by Lord Brown. It is quite clear, as Lord Dysons analysis of the facts shows, that the internal proceedings before the employer and the barring proceedings before the ISA are separate and distinct from each other. Their decisions and procedures are directed to different issues. On the one hand there is the persons right to remain in employment with that employer. If the proceedings result in dismissal, as they did in this case, the decision to dismiss may be challenged in the Employment Tribunal. On the other there is a persons right to engage in activities relating to children more generally. This is the issue which must be determined by the Independent Safeguarding Authority (the ISA). The barring process that the ISA conducts under the Safeguarding Vulnerable Groups Act 2006 may be the result of a decision by the employer to dismiss. But there is no limit to the sources from which information may come that require the ISA to consider whether an individual should be included in the childrens barred list. If the ISA decides that the individual should be included in the list, he has a right of appeal to the Upper Tribunal on the grounds set out in section 4(2). Then there are the factors which may lead to an employers decision to dismiss or not to dismiss. They may range widely. They are not limited to the matters to which the ISA is required to have regard by the statute. We are therefore dealing here with a case where an individual is subject to two distinct sets of proceedings which are not inextricably linked to each other. That is not, of course, an end to the question whether the claimants article 6(1) Convention rights were engaged at the disciplinary hearing that was conducted by his employer. Taken by themselves, those proceedings did not engage the protections afforded by that article. It was not their function to determine the civil right that was in issue at that stage, which was the claimants contractual right to remain in his current employment at the school. Nor did any decision taken in those proceedings determine his civil right to practice his profession as a teaching assistant. It has not been suggested that, if the right to remain in his current employment were the only issue, article 6(1) required that the claimant be allowed the opportunity of legal representation in those proceedings. For that to be the case it would have to be shown, as Laws LJ observed in the Court of Appeal, that there was in some sense at least a close nexus between the disciplinary process and the barred list procedures to be conducted by the ISA: [2010] EWCA Civ 1; [2010] 1 WLR 2218, para 28. The decisions of the Strasbourg court have repeatedly emphasised that a remote or tenuous connection will not do. If its effect is decisive, the nexus will have been established. But clear guidance is lacking as to how a case is to be determined that lies between these extremes. This is such a case, because the connection between the disciplinary proceedings and the proceedings before the ISA cannot be dismissed as remote. Nor can it be said that the disciplinary proceedings are decisive. The ISA must make its own assessment and its own evaluation of the evidence. Like Lord Dyson, I would adopt Laws LJs test, which is that the claimant may enjoy article 6 procedural rights if the decision in the disciplinary proceedings will have a substantial influence or effect on the determination by the ISA of his civil right to practice his profession: [2010] 1 WLR 2218, paras 32, 37. For the school, Mr Bowers QC said that there was no support for that test in the Strasbourg authorities. That is, of course, true in so far as the Strasbourg court has not set it out in so many words. But I think that it is possible to detect the underlying principle to which its decisions give effect. I think that Laws LJs test captures the essence of the principle. The question, then, is whether the test is satisfied in this case. Laws LJ said that his test was satisfied because, as he saw it, there was every likelihood that the outcome of the disciplinary process would have a profound influence on the decision making processes by the ISA: para 47. As he put it, without a de novo hearing and the possibility of an oral hearing before the ISA, at the very least the flavour and the emphasis of the governors view of the facts would remain important and influential. He also said that that result could not be dislodged by the existence of the appellate jurisdiction of the Upper Tribunal, as the critical question was whether on the proved facts the quality of the persons act should be judged severe enough to put him on the barred list: para 49. I am unable to agree with that assessment. As the ISA has not yet considered the claimants case, we do not have before us a concrete set of facts on which to judge whether or not its procedures are fair. But the Guidance Notes and the Case Worker Guidance are there for us to read, and I agree with Lord Dyson that there is no reason to doubt that case workers do as they are instructed. The issues which they must consider under Part 1 of Schedule 3 to the 2006 Act extend well beyond those that were required to be considered by the governors. The guidance that case workers have been given makes it very clear that they must form their own view of the facts independently of the view formed by the governors. They must make their own assessment of the reliability of the evidence. They are not judging the case at second hand. Their concern is with the primary facts of the case, not with any conclusions that the governors may have formed about them. They must give an opportunity to the person to make representations as to why he or she should not be included in the list, which may be made by a lawyer on the persons behalf, and difficult cases may be referred to a specialist for an opinion. I think that we can be confident that the governors view of the facts will have receded far into the background when the time comes for a decision as to whether the person should be included in the childrens barred list. As for the right of appeal to the Upper Tribunal, this is available on the grounds that the ISA has made a mistake on any point of law and in any finding of fact which it has made and on which the decision was based: section 4(2) of the 2006 Act. The final decision whether or not it is appropriate for an individual to be included in a barred list is not a question of law or fact: section 4(3). But I do not see this as a reason for doubting whether, taken as a whole, the procedures that the 2006 Act sets out are compatible with article 6(1). As Miss Lieven QC for the Secretary of State pointed out, the Upper Tribunal would be in no better position to form a judgment on that issue than the expert body which is the ISA. It would be open to the Upper Tribunal to remit that matter for reconsideration if it were to hold after an oral hearing with the benefit of legal representation that the ISA had made a mistake on any finding of fact on which the decision to list was based. The principle, when the question of compliance with article 6(1) of the procedure before professional bodies is being considered, is to see whether they are subject to control by a judicial body that has full jurisdiction and does provide the guarantees of article 6(1): Albert and Le Compte v Belgium (1983) 5 EHRR 533, para 29; Tehrani v United Kingdom Central Council for Nursing, Midwifery and Health Visiting [2001] IRLR 208; R (Thompson) v Law Society [2004] 1 WLR 2522. The Upper Tribunal is such a body, and had it been necessary to do so I would have been inclined to hold that any breach of article 6(1) at the initial stage was cured by the opportunity for an oral hearing that an appeal to the Upper Tribunal provides. Working backwards, as it were, I would also have been inclined to hold that the better way to cure any breach of article 6(1) at the initial stage would have been to require the ISA to adopt procedures which complied with article 6(1) rather to require the employer to adopt these procedures to make good gaps in the regime that is operated by the ISA. Laws LJs conclusion was that article 6(1) required that the claimant should be afforded the opportunity to arrange for legal representation in the disciplinary proceedings should he so choose: [2010] 1 WLR 2218, para 53. But there is a serious risk that, if that course were to be adopted, disciplinary proceedings in the public sector would be turned into a process of litigation, with all the consequences as to expense and delay that that would involve. The burden that this would impose on employers, and its chilling effect on resort to the procedure for fear of its consequences, is not hard to imagine. A good indication that it was Parliaments wish to avoid this is to be found in section 10 of the Employment Relations Act 1999 that the employee has a right to be accompanied by an official of a trade union, not by a lawyer. To require the person to be provided with legal representation before the governors would go against that intention, and it would have been the wrong remedy. Our decision that the necessary nexus has not been established avoids these very unattractive consequences. LORD BROWN Was G entitled to be legally represented before the disciplinary committee of X School which in February 2008 was investigating an allegation of gross misconduct against him? The Court of Appeal (Laws, Wilson, Goldring LJJ) [2010] 1 WLR 2218 held that he was on the basis that the disciplinary proceedings engaged the civil limb of article 6 of the European Convention on Human Rights. In common with the majority of this court I take a contrary view and would allow the governors appeal. In the light of Lord Dysons very full judgment in the case, with which I fully agree, I can state what I want to add really quite shortly. I understand Lord Dysons essential conclusion to be (see paras 74, 82 and 83 of his judgment) that the findings of the disciplinary panel in Gs case are unlikely to have a profound influence on the decision yet to be reached by the Independent Safeguarding Authority (ISA) and it is for this reason that article 6 is not engaged. As Lord Dyson makes plain, once the disciplinary proceedings (including Gs proposed appeal which is presently stayed) have been concluded, the ISAs task will be to decide, by the process described by Lord Dyson at paras 16 31 (and further elaborated at paras 76 78), whether G should be placed on the barred list that being the decision which (subject to any appeal to the Upper Tribunal) will determine Gs relevant right here the right to work with children, not the right to continue employment with X School. As Lord Dysons judgment also makes plain, in reaching that decision initially as to whether the ISA propose to include G in the list and, if so, following whatever representations he or his advisors may then make as to why he should not be included, as to whether or not to include him the ISA are required both to make their own independent findings of fact and to decide whether in the light of those facts he should appropriately be included in the barred list. The only exceptions to such an independent approach (neither exception being applicable here) are, first, where there has been a conviction for a specified offence and, secondly, where findings of fact have been made by a competent body or one of its committees: see paragraph 16(4) of Schedule 3 to the Safeguarding Vulnerable Groups Act 2006 (the 2006 Act). It seems to me instructive to note who these bodies are: (a) the General Teaching Council for England; (b) the General Teaching Council for Wales; (c) the Council of the Pharmaceutical Society of Great Britain; (d) the General Medical Council; (e) the General Dental Council; (f) the General Optical Council; (g) the General Osteopathic Council; (h) the General Chiropractic Council; (i) the Nursing and Midwifery Council; (j) the Health Professions Council (k) the General Social Care Council; (l) the Care Council for Wales. As I need hardly observe, each of them is an independent and impartial tribunal established by law within the meaning of article 6(1) of the Convention and indisputably their proceedings engage that article. One of the more puzzling and to my mind less satisfactory features of the Court of Appeals decision in the present case is that, whereas it requires school disciplinary panels to allow legal representation, it does not require them to be (as, of course, they are not) independent and impartial, notwithstanding that ordinarily this is regarded as an altogether more fundamental requirement (part of the irreducible minimum guaranteed by article 6) than any requirement for legal representation. Why, one wonders, is it not permissible for the ISA to be influenced by findings of fact made without the person concerned having legal representation and yet permissible for them to be influenced by findings of fact made by a partial body such as the school governors? More troubling still, however, is the stark anomaly created by the decision below as between public sector and private sector authorities. X School happens to be a (small) voluntary aided school and thus a public authority. Were a similar situation to arise, however, in a private school which would require a precisely similar report to the ISA pursuant to section 35 of the 2006 Act there could be no question of article 6 applying to the initial disciplinary process. What, then, would be the consequence of a private school acting as X School have acted here ie not allowing legal representation of their disciplinary proceedings? As I see it, G must be saying either that in those circumstances the identical overall process would be fair and involve no breach of article 6 (which would surely be absurd) or that the operation of the ISA scheme must itself in those circumstances necessarily involve a breach of article 6. But this would be effectively to stigmatise and condemn the whole ISA scheme carefully devised as this has been to avoid the fatal defects in the previous scheme revealed in R (Wright) v Secretary of State for Health [2009] AC 739 without any experience whatever of its workings in practice, making assumptions as to how the ISA would treat the findings of an employers disciplinary panel which run counter to its own guidance (both published and internal), without argument being directed specifically to the compatibility of the ISA scheme with article 6 in such cases as are referred to it other than by public authority employers, and without even the Secretary of State being a party at first instance (albeit represented as an intervener before the Court of Appeal and, most helpfully, before us). To my mind it is unthinkable that the ISA scheme should be implicitly condemned in this way. Rather it seems to me that for the purposes of the present challenge we should assume that the scheme is compatible with article 6 with regard to those cases referred to the ISA by non public authority employers and, indeed, by persons acting independently of employers. If, of course, a challenge comes in due course to be made to the operation or legality of the scheme in such a case a challenge necessarily directed against the ISA (in so far as it is said that the scheme is not, but could be, operated lawfully) and/or the Secretary of State (in so far as it is said, as in Wright, that the scheme is inherently incompatible with article 6) the court will have to decide it. In doing so, it will have to consider, amongst other issues, the curative or full jurisdiction principle to which Lord Dyson refers at paras 84 and 85 of his judgment. That challenge, however, I repeat, is not presently before us. If, then, we assume, as for present purposes I suggest we should, that the overall ISA scheme is article 6 compatible in respect of references from the private sector, I fail to see how the initial disciplinary process can be incompatible in the present case. For these reasons, in addition to those given by Lord Dyson, I too would allow this appeal. LORD KERR For the reasons given by Lord Dyson, I agree that the Court of Appeal correctly identified the test to be applied on the nature of the connection that is required between various stages of a process in order to determine whether article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) is engaged at a point in the process other than that at which the final decision is taken. The premise of the appellants argument was that the decisive influence that the disciplinary hearing in this case had to have on the decision of the Independent Safeguarding Authority (ISA) must be determinative if article 6 was to apply to that disciplinary hearing. In other words, for article 6 of ECHR to be in play, the decision on whether Gs name was placed on the barred list must, the appellants suggested, be dictated by the outcome of the disciplinary proceedings. Lord Dysons authoritative survey of the Strasbourg jurisprudence has effectively demonstrated the fallacy of that argument. The centrepiece of the case made on behalf of both the appellant and the Secretary of State has therefore failed. What the majority of this court has decided, however, is that although the Court of Appeal correctly identified the test, it failed to apply it properly. In the main, this involves forming a different view on the facts (and the inferences to be drawn from them) from that reached by the Court of Appeal. As Lord Dyson has said (at para 76) ISA is expected to form its own assessment of the facts on the basis of all the available evidence and (at para 79) ISA is required to make its own findings of fact and bring its own independent judgment to bear as to their seriousness and significance before deciding whether it is appropriate to place the person on the barred list. The question that these statements raise is whether, because ISA must reach its own view as to whether the facts, as they have found them to be, are sufficient to support the conclusion that an individual should be placed on the barred list, insulates that process from substantial influence by the earlier disciplinary hearing. Supplying an answer to that question does not involve the application of principle. It is an exercise in deduction as to what is likely to happen when the case officers of ISA consider all the available information, including the report on the disciplinary proceedings. On that account alone, I have grave misgivings about the propriety of this court finding that the Court of Appeal was wrong to conclude that it was inevitable that the views of the disciplinary panel and the report of the evidence given to it were likely to have a substantial influence on the decision of ISA. It appears to be implicit in the view of the majority that it would be improper for ISA to allow itself to be heavily influenced by the findings that emerged from the disciplinary proceedings. Regretfully, I cannot subscribe to that view. It seems to me to be entirely open to ISA to pay close attention to the findings of the disciplinary tribunal and indeed to be substantially influenced by them, so long as it keeps faith with the requirement that it reach its own independent view of the facts. There is nothing in the least inconsistent with ISA arriving at its own conclusions while acknowledging, expressly or otherwise, that those conclusions have been heavily influenced by the findings of the disciplinary hearing and by what took place at that hearing. After all, details of the proceedings before the disciplinary panel will be before ISA. Indeed, of all the material considered by ISA, the notes of the hearing are likely to be of the most pivotal importance. Why should the findings of the panel and the account of the evidence given not have a substantial influence on ISAs conclusions? It seems to me to border on the perverse to suggest that they would not have such an influence. The conclusion that they would not hold substantial sway appears to be based on the requirement that ISA must reach its own independent judgment. But a judgment is not robbed of its independent quality simply because it has been heavily influenced by a particular item of evidence or by findings made by another body that considered that evidence. Lord Hope has said that the two sets of proceedings (the internal disciplinary proceedings and what he describes as the barring proceedings) are not inextricably linked and that they are directed to different issues (para 87). This is of course true in the sense that they have a different objective the first to decide what sanction, including dismissal, it is appropriate to impose and the second whether to include the respondents name on the barred list. But both are most certainly concerned with the same factual matrix and the conclusions reached on the factual dispute between the principal protagonists are surely central to the outcome of both sets of proceedings. In those circumstances it seems to me that the conclusions reached by the disciplinary panel and the evidence given to the panel not only could but should have a substantial influence on the decision of ISA. Could it seriously be suggested that ISA would be entitled, for instance, to leave the findings of the disciplinary panel out of account? Of course not. By the same token, it is open to ISA to decide what weight it should give to those findings. In the absence of any other remotely adversarial proceeding in the entire process, it seems to me inevitable that the disciplinary hearing is bound to have a substantial influence or, at least, that the Court of Appeal was perfectly entitled to come to the view that it did and that this court should not interfere with that conclusion. Lord Hope has expressed confidence that the governors view of the facts will have receded far into the background by the time that a decision is taken as to whether the respondent should be included in the barred list (para 92). I am afraid that I do not share that confidence. Of course, as Lord Hope has said, ISA is not limited in the sources of information to which it may have recourse in reaching its decision. But can it realistically be said that the record of the proceedings before the disciplinary panel will be of peripheral importance only? In this connection, it is, I think, important to understand that it is not simply the conclusions of the governors that are in issue on the question of the potential of the disciplinary hearing to have a substantial influence on the findings of ISA. All of the material from that hearing which touches on the truth of the allegations made against the respondent is relevant and, for my part, I would find it surprising, indeed reprehensible, if the case workers of ISA did not pay the closest attention to that material in reaching their conclusions on the facts. I have said that the hearing before the disciplinary panel is the only remotely adversarial stage of the entire process. Whether ISA has power to hold an oral hearing remains imponderable see para 80 of Lord Dysons judgment. What is clear is that it has not in the past held one and it may safely be assumed that it will not convene such a hearing in the present case. One must proceed on the basis, therefore, that the only occasion on which oral evidence was or will be given about the extremely serious allegations which form the case against the respondent both on the disciplinary proceedings and the barring proceedings is during the hearing before the panel. In fact, of course, this was not an adversarial proceeding in any real sense for the respondent did not put any questions to the witnesses who gave evidence against him and refused to answer any questions put to him (because he considered that the proceedings were unfair). Lord Dyson has said that there must be very few cases where the lack of an oral hearing would make it unduly difficult for ISA to make findings of fact and that only in very few cases will the resolution of a conflict of evidence depend on the demeanour of witnesses (para 80). It would be wrong, in my opinion, to assume that the value of an oral hearing in a case such as the present is confined to the opportunity to observe the demeanour of witnesses. Just as legal representation at an early stage is critical to the safeguarding of an accused persons interests, so legal representation for someone such as G is vital at the early stage. Ex post facto contributions from a legal adviser necessarily suffer from the handicap that they must seek to displace adverse findings rather than have the chance to pre emptively nullify them. Legal representation, if it is required in order to achieve an article 6 compliant process, is surely required where it can be deployed not only to best effect but also to achieve a real and effective contribution to the fairness of the proceedings. This is not confined to providing an effective challenge made to the case presented against the person who is the subject of the disciplinary proceedings. It includes advising that person on how to participate in the proceedings, as well as introducing relevant further evidence that may have a crucial impact on the forming of the first views on the factual issues. The present case exemplifies the point. The passive, not to say hostile, attitude of the respondent to the proceedings may well have played a crucial part in their outcome. The lack of an oral hearing before ISA may not, as Lord Dyson has suggested, make it unduly difficult for them to reach findings of fact but the result of the only oral hearing that has taken place in this case may well lead ISA to a different conclusion on the factual dispute from that which would have been the product of a properly conducted disciplinary hearing in which the respondent, with the benefit of legal advice, had fully and meaningfully participated. It has not been disputed that the decision of ISA involves the determination of Gs civil right. The particular species of conduct alleged against him is at least capable of amounting to criminal activity. It is therefore beyond argument that article 6 of ECHR requires that he must at some stage of the process be entitled to legal representation if he wishes to have it. A fair determination of his civil right cannot take place without that vital ingredient, given the gravity of the allegations made against him and the seriousness of the consequences for him. It is important not to concentrate unduly on the various stages of the process in isolation from each other. And it is certainly mistaken to focus exclusively on an individual stage in order to determine whether it by itself meets the requirements of article 6. The process overall must be fair. Although the actual determination takes places at the point when ISA decides whether to include the respondent on the list, the anterior stage of disciplinary proceedings cannot be left out of account in deciding whether the overall process is fair. That does not mean that one must import all the constituent rights of article 6(3)(c) into the disciplinary hearing part of the process. It does not even mean that article 6(1) requirements must be fulfilled for that part of the process considered in isolation from the rest. What it does mean is that the conduct of the disciplinary proceedings part of the process must be examined in order to assess what impact this has had, if any, on the overarching question whether the determination of the civil right, the product of the entire process, has fulfilled the requirement of fairness. It is precisely because the disciplinary proceedings provide the only occasion when the competing cases can be presented in direct opposition to each other that legal advice at that point is so crucial. That is the critical time for the testing of the evidence not merely by observing the demeanour of the witnesses (although that may play its part in the assessment of the reliability of the respective accounts) but by the probing of the allegations against the respondent and the evaluation of the plausibility of his defence to them. It is to be remembered that this young man faced extremely grave accusations. If those were found proved, quite apart from what I consider to be the virtually certain impact that they will have on the barring proceedings, they will place an irretrievable stain on his character and reputation. To recognise his right to be legally represented at that stage, although it may give rise to administrative difficulties for the conduct of disciplinary proceedings, seems to me to be entirely consonant with the proper safeguarding of his article 6 rights. Lord Brown has said that a less than satisfactory feature of the Court of Appeals decision is that while requiring school disciplinary panels to allow legal representation, it does not require them to be independent and impartial. But this is to assume that all the requirements of article 6 must be supplied at the disciplinary proceedings stage of the process. That is not so. The need for an impartial and independent tribunal can be met at the later stage of ISAs decision. At that point a wholly objective view can be formed not only of the panels conclusions but also of the evidence that the panel has heard. Of even greater concern to Lord Brown was what he perceived to be the anomaly that a public authority such as the school in the present case would be subject to the requirement to allow legal representation under article 6 whereas a private school would not be. In the latter case the appellant would have to argue (Lord Brown suggests) either that, despite its shortcomings, the overall process was fair (which, he says, would be absurd and I agree) or that the ISA scheme as a whole must stand condemned as necessarily involving a breach of article 6. Again with much regret, I find myself unable to agree with this analysis. Article 6 applies to the barring process, irrespective of whether the school is public or private. The critical question is whether, at the time the allegations against an individual are heard, he is entitled to legal representation. If he is entitled to that representation then, he must have it. Simply because a private school may assert that it is not subject to the Human Rights Act 1998 (HRA) and that it is therefore not bound to comply with a teachers article 6 rights, it cannot be right to relieve a public authority such as a publicly funded school of the obligations which it owes to a teacher under HRA and ECHR. Quite apart from that, the requirement that a teaching assistant such as the respondent is legally represented at the time that allegations are presented in evidence against him does not necessitate the condemnation of the ISA scheme for inevitable breach of article 6. That scheme does not contemplate the holding of oral hearings. But it does not forbid them. An option available to ISA is to convene an oral hearing at which the person who is the subject of the barring proceedings may be legally represented. This may require a modification of the scheme as it is currently operated but better that than its wholesale condemnation. Moreover, if it is the position that, to comply with article 6, a person subject to barring proceedings should be legally represented when allegations against him are heard, it would be open to, indeed required of, ISA to disregard evidence given and findings made at proceedings where that prerequisite had not been fulfilled. I consider, therefore, that this appeal should be dismissed and that it should be held that if evidence given and findings made at a disciplinary hearing are to be taken into account by ISA in deciding whether a person such as G should be placed on a barred list, he should be legally represented at that disciplinary hearing. For the reasons given by Laws LJ at paras 40 42 of his judgment, I do not consider that this is a case where deficiencies in compliance with article 6 at the disciplinary proceedings can be cured by the availability of a right to appeal to the Upper Tribunal. As Laws LJ said, the reasoning in the Bryan (Bryan v United Kingdom (1995) 21 EHRR 342) and Alconbury (R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295) line of cases, is concerned with the review by a judicial review court of an earlier administrative or executive decision: [2010] 1 WLR 2218, para 40. A lack of impartiality at that stage may be corrected when subject to later review by an impartial tribunal in the form of a court. Here the situation is quite different. The absence of legal representation at a critical time when vital evidence is given and crucial findings are made cannot be rescued by the type of appeal that is available to the Upper Tribunal.

The issue in this case is whether the claimants rights under article 6(1) of the European Convention on Human Rights (ECHR) were engaged in a disciplinary hearing that was conducted by X School (the School). The claimant contends that the Schools refusal to allow him legal representation violated his article 6 rights. The Safeguarding Vulnerable Groups Act 2006 (the 2006 Act) and its predecessor legislation requires, inter alia, a school to report the circumstances of dismissals involving findings of sexual misconduct to the Independent Safeguarding Authority (ISA) which maintains a childrens barred list. Those included on the childrens barred list are prohibited from undertaking certain work with children, including teaching. Part 1 of Schedule 3 of the 2006 Act applies to ISAs determinations of whether to include an individual on the childrens barred list. It provides that ISA must include an individual on the childrens barred list if a) ISA is satisfied that the person has engaged in relevant conduct and b) it is appropriate to include the person on the list (para 3(3)). Relevant conduct includes conduct of a sexual nature involving a child (para 4(1)). It also provides that ISA must give an individual facing being placed on the childrens barred list the opportunity to make representations (para 2) and it empowers ISA to require various persons, such as the police, to provide it with information (para 19). In coming to its determination, ISA must make an independent evaluation of the facts. It is not bound by the findings of any prior disciplinary hearing. This is also set out in guidance provided to case workers. If ISA determines to place an individual on the childrens barred list, that individual has a right of appeal to the Upper Tribunal (section 4(1) & (4)). The claimant was a sessional music assistant at the School. On 4 October 2007 he was suspended from his post on the basis of allegations that he had formed an inappropriate relationship with M, a 15 year old boy doing work experience at the School. Disciplinary proceedings were launched by the School. The claimant was advised by his solicitor not to participate in them until the police had completed their investigations. In early February 2008 the Crown Prosecution Service indicated that they did not intend to take any further action. By this time the School had also completed its investigation. The investigation report concluded that there was strong evidence that the allegations were proven. A disciplinary hearing was scheduled to take place on 21 February 2008. In advance of the hearing, the claimant was told that he was entitled to be represented by a trade union representative or work colleague. The claimant was not a member of a trade union and sought to be represented by his solicitors. The School refused. The claimant attended the disciplinary hearing accompanied by his father. He refused to answer questions on the basis that he believed the proceedings to be unfair. The disciplinary panel found that the claimant had formed an inappropriate relationship with M. They held that this constituted gross misconduct which warranted his summary dismissal. In May 2008, the School reported this to the Secretary of State in accordance with the legislation preceding the 2006 Act. The question of whether or not the claimant should be added to the childrens barred list remains pending before ISA. The claimant issued judicial review proceedings on 19 May 2008 seeking a declaration that by reason of the denial of his right to legal representation before the Schools disciplinary hearing, it was in breach of his rights under article 6 ECHR. He succeeded before Mr Stephen Morris QC sitting as a Deputy High Court Judge at first instance ([2009] EWHC 504 (Admin)) whose decision was upheld by the Court of Appeal (Laws, Wilson and Goldring LJJ) ([2010] EWCA Civ 1). The Supreme Court, by a majority, allows the appeal. Article 6(1) does not apply to the disciplinary proceedings in issue. The lead judgment is given by Lord Dyson, with whom Lord Walker agrees. Lords Hope and Brown give separate, but concurring, opinions. Lord Kerr gives a dissenting judgment. Article 6 ECHR applies where there is a determination of . civil rights and obligations. The meaning of determination was considered by the European Court of Human Rights (ECtHR) in Ringeisen v Austria (No 1) (1971) 1 EHRR 455. In that case the ECtHR held that it meant proceedings the result of which is decisive for private rights and obligations. In Le Compte, Van Leuven and De Meyere v Belgium (1981) 4 EHRR 1, the ECtHR contrasted proceedings which are directly decisive of the right in question, to which article 6 applies, with those which have a tenuous or remote consequence. The ECtHR has repeated this mantra in a series of further cases: [36] [59]. The mantra has been applied to circumstances in which initial proceedings do not themselves determine a civil right but are closely linked to subsequent proceedings which do. The ECtHR takes a pragmatic, context sensitive approach to the question of when such a link is established. The case law demonstrates that the factors it takes into account include: whether the first proceedings are in fact dispositive of the later proceedings; how close the link is between the two proceedings; whether the object of the two proceedings is the same; and whether there are policy reasons for holding that article 6(1) should not apply in the first proceedings. In light of this, the test of substantial influence formulated by Laws LJ in the Court of Appeal below is a useful formulation and is endorsed: [64] [69]. In application to the present facts, it is not disputed that the civil right in question is the claimants right to practise his profession as a teaching assistant and to work with children more generally. This civil right would be directly determined by a decision of ISA to include him on the childrens barred list. Accordingly, article 6(1) ECHR applies to proceedings before ISA. However, it was not the function of the Schools disciplinary proceedings to determine the civil right in issue. Rather, they were only concerned with the claimants employment at the School. Therefore, in and of themselves, the Schools disciplinary proceedings do not engage article 6(1) ECHR. As regards the establishment of a link such that article 6(1) ECHR applies to the disciplinary proceedings, they do not directly determine or exert a substantial influence over the ISA proceedings. Therefore, in combination with the ISA proceedings, the Schools disciplinary proceedings do not engage article 6(1). In particular this is because ISA is required to exercise its own independent judgment both in relation to finding facts and assessing their gravity and significance. The decision by ISA whether to include an individual on the childrens barred list is only taken following an assessment of the full merits of each case. The absence of an oral hearing does not prevent the ISA from making its own findings of fact and forming its own view independent of the view formed by the School [70] [83]; [87] [92]; [97] [101]. Lord Kerr would have dismissed the appeal. In his view, ISA could and indeed should be substantially influenced by the findings of the disciplinary tribunal. The requirement that it reach its own independent view of the facts is not inconsistent with this. The overall process involving the determination of the claimants civil right must be fair. In light of this, it is mistaken to concentrate substantially or exclusively on an individual stage in that process. In this case, the disciplinary proceedings were critical in testing the evidence against the claimant. To recognise his right to be legally represented at that stage is consonant with the proper safeguarding of his article 6 rights: [103] [119].

This appeal is about the defence of illegality: ex turpi causa non oritur actio. The first claimant Les Laboratoires Servier is a French pharmaceutical company which originated the perindopril erbumine compound, an ACE inhibitor used for treating hypertension and cardiac insufficiency. The respondents are companies of the Apotex Group, a Canadian pharmaceuticals group specialising in the manufacture and marketing of generic pharmaceutical products. The parties have agreed that for the purpose of resolving the issues on this appeal, both groups can be treated as one entity without regard to the distinct corporate personality of the companies comprising them. 4. A number of patents for the perindopril erbumine compound have been granted to Servier and its associated companies. In Europe, patent protection for the compound itself expired in June 2003. However, the corresponding Canadian patent for the compound will not expire until 2018. The present dispute relates to a United Kingdom patent not for the compound but for a specific crystalline form of the compound, which was granted to Servier. Its UK subsidiary Servier Laboratories Ltd was the exclusive licensee. In March 2006 Apotex wrote to Servier to notify them that they intended to market generic perindopril in the UK, and at the end of July 2006, upon obtaining marketing authorisation, they began to do so. On 1 August 2006, Servier began proceedings against Apotex for infringement of the UK patent. On 7 August, Mann J granted an interlocutory injunction restraining the importation and sale by the Apotex companies of generic perindopril erbumine in the United Kingdom. The injunction was obtained upon Servier giving the ordinary undertaking to comply with any order that the court might make if it should later find that the order had caused loss to Apotex for which it should be compensated. Pumfrey J gave judgment on the claim on 11 July 2007 [2007] EWHC 1538. He held that the patent had been infringed but that it was invalid, and discharged the injunction. Serviers appeal was dismissed by the Court of Appeal on 28 April 2008 [2008] EWCA Civ 445. 6. 5. Meanwhile, separate proceedings were in progress in Canada for infringement of the Canadian patent for the compound itself. An interlocutory injunction had been refused in those proceedings. But on 2 July 2008, Snider J held that the Canadian patent was valid and infringed, and granted a final injunction. The Canadian Federal Court of Appeal dismissed Apotexs appeal on 30 June 2009, and leave to appeal to the Supreme Court of Canada was refused on 25 March 2010. A separate trial of damages is expected in November 2014. It is agreed that damages under the undertaking in the English proceedings fall to be assessed on the basis that but for the injunction Apotex would have sold in the United Kingdom an additional 3.6 million packs of perindopril erbumine tablets. The active ingredient would have been manufactured by Apotex Pharmachem Inc in Canada and sold at a 30% mark up to Apotex Inc. Apotex Inc would have formulated it into tablets, also in Canada, and sold the tablets to Apotex UK Ltd which would then have sold them on the UK market. Under the terms of the sale to Apotex UK Ltd, Apotex Inc would have received 90% of the profits arising from UK sales. The assessment was heard before Norris J in June 2008, and judgment was reserved. In July 2008, after Snider J had given judgment in Canada but before Norris J had given judgment on the assessment in England, Servier applied to Norris J to re amend their defence to plead two points arising out of Snider Js judgment. The first, which I shall call the illegality point was that it was contrary to public policy for Apotex to recover damages for being prevented from selling a product whose manufacture in Canada would have been illegal there as an infringement of Serviers Canadian patent. The second, which I shall call the cost of manufacture point was that in assessing Apotexs loss of profit the damages for infringement to which they would be entitled in the Canadian proceedings should be treated as an additional cost of manufacture, thereby reducing or eliminating the profit. On 9 October 2008, Norris J gave judgment on the assessment: [2009] FSR 220. He refused permission to amend, on the ground that the application came too late and would cause undue prejudice to Apotex. He then awarded Apotex 17.5 million damages plus interest of approximately 2.1 million, to be split 90/10 between Apotex Inc and Apotex UK. However, on 12 February 2010, the Court of Appeal allowed an appeal from the refusal of the amendment, and directed that Norris Js award of damages should be treated as an interim order pending determination of the new issues: [2010] EWCA Civ 279. Subsequently, Lewison J made an order staying the second of the new issues (the cost of manufacture issue) until damages had been assessed in Canada. 8. 7. The judgments below 9. The illegality point turns in this case on three issues: (1) Does the infringement of a foreign patent rights constitute a relevant illegality (turpitude) for the purpose of the defence? If so, is Apotex seeking to found its claim on it? Is Servier entitled to take the public policy point having given an undertaking in damages? (2) (3) 10. Arnold J gave judgment on these questions on 29 March 2011: [2011] RPC 574. He decided all three points in favour of Servier. On the first point, he held that a relevant illegality was one which was sufficiently serious in all the circumstances of the case, including in particular whether the illegal act was done with knowledge or deliberately. On the second point, he held that the claim was barred because Apotex could not make good its claim for damages without affirming that it would have manufactured the product in Canada, where it was illegal to do so. On the third point, he held that it was not inconsistent with the undertaking as to damages for Servier to raise the illegality defence. In the result, Arnold J held that the whole of Apotexs claim on the undertaking was barred, and ordered the repayment of the amount which they had received in satisfaction of Norris Js judgment. 11. Apotex appealed to the Court of Appeal. Shortly before the hearing of the appeal they conceded that any damages awarded in the Canadian proceedings should be deducted from Norris Js award irrespective of the fate of the public policy point. The Court of Appeal gave judgment on 3 May 2012 allowing the appeal: [2013] Bus LR 80. The leading judgment was given by Etherton LJ, with whom Laws LJ and Kitchin LJ agreed. The essential point on which he differed from the judge was issue (1). In his view, the infringement of Serviers Canadian patent was not a relevant illegality for the purposes of the defence. This was because (para. 73) in dealing with the illegality defence, the court was entitled, to take into account a wide range of considerations in order to ensure that the defence only applies where it is a just and proportionate response to the illegality involved in the light of the policy considerations underlying it. Etherton LJ considered that this test was not satisfied because (i) Apotex honestly and reasonably believed the Canadian patent to be invalid; (ii) it was important as a matter of principle that Servier, having enjoyed a monopoly by virtue of the injunction, should have to pay when it was found not to be entitled to it; (iii) the sale of the tablets in the United Kingdom was not an infringement of the Canadian patent, whose effect was limited to Canada; (iv) the Canadian court had refused to grant an interlocutory injunction restraining the manufacture of the active ingredient or its formulation into tablets in Canada; and (v) any public policy arising from the illegality of the manufacture and formulation of the product in Canada was sufficiently addressed by Apotexs concession that credit had to be given for the damages payable in the Canadian proceedings for the infringements committed there. If Etherton LJ had been satisfied that the infringement of the Canadian patent was a relevant illegality, he would have upheld the illegality defence. This was because like the judge he considered that there was a sufficiently close causal relationship between the patent infringement and the loss suffered by virtue of the injunction; and because, like the judge again, he was not impressed by the suggestion that the taking of the illegality defence was inconsistent with the undertaking in damages. 12. The Court of Appeal approved the concession made by Apotex about the credit to be given for the damages for infringement payable in Canada. It followed that the financial consequences of its decision must depend on what happens on the assessment of damages in Canada. The illegality defence: a rule of law 13. English law has a long standing repugnance for claims which are founded on the claimant's own illegal or immoral acts. The law on this point was already well established when Lord Mansfield CJ articulated it in his celebrated statement of principle in Holman vs Johnson (1775) 1 Cowp. 34l, 343: No court will lend its aid to a man who founds his cause of action on an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says that he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est condition defendentis. The doctrine necessarily operates harshly in some cases, for it is relevant only to bar claims which would otherwise have succeeded. For this reason it is in the nature of things bound to confer capricious benefits on defendants some of whom have little to be said for them in the way of merits, legal or otherwise. Lord Mansfield acknowledged this when he pointed out: The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff . Lord Mansfields formulation begs many questions. But as these citations show, two features of this area of law have been characteristic of it from the outset. First, it is a rule of law and not a mere discretionary power. Secondly, it is based on public policy, and not on the perceived balance of merits between the parties to any particular dispute. 14. The question what is involved in founding on an immoral or illegal act has given rise to a large body of inconsistent authority which rarely rises to the level of general principle. The main reason for the disordered state of the case law is the distaste of the courts for the consequences of applying their own rules, consequences which Lord Mansfield had pointed out two centuries ago. The only rational way of addressing this problem, if these consequences are regarded as intolerable, is to transform the rule into a mere power whose actual exercise would depend on the perceived equities of each case. The most notable modern attempt to achieve this transformation was made by the Court of Appeal in Euro Diam v Bathurst Ltd [1990] 1 QB 1, in which the illegality defence was invoked in response to a claim on a property insurance. The Court of Appeal placed the reported cases in a number of distinct factual categories, united by a common principle. Kerr LJ, delivering the only reasoned judgment, expressed that principle at p 35 by saying that the test was whether in all the circumstances it would be an affront to the public conscience to grant the plaintiff the relief which he seeks because the court would thereby appear to assist or encourage the plaintiff in his illegal conduct or to encourage others in similar acts. That question, he suggested, needed to be approached pragmatically and with caution, depending on the circumstances. Under this public conscience test, the application of the illegality defence was not discretionary in law. But it was clearly discretionary in nature. In substance it called for a value judgment about the significance of the illegality and the injustice of barring the claimants claim on account of it. 15. This development had been foreshadowed by some earlier decisions of the Court of Appeal. But it was decisively rejected by the House of Lords in Tinsley v Milligan [1994] 1 AC 240. That appeal arose out of an agreement under which two ladies bought a house to live in out of jointly owned funds. They agreed to vest it in one of them alone so that the other could claim social security benefits on the fraudulent basis that she did not own her home and was paying rent. In the ordinary course, the joint purchase of property by two people in the name of one of them would give rise to an equitable proprietary interest in the other. The question was whether the assertion of this interest in a court of law was debarred by the dishonesty of the parties purpose. The Court of Appeal, by a majority, had applied the public conscience test. Ralph Gibson LJ dissented [1992] Ch. 310, observing in his judgment, at p 334, that in so far as the basis of the ex turpi causa defence, as founded on public policy, is directed at deterrence it seems to me that the force of the deterrent effect is in the existence of the known rule and in its stern application. Lawyers have long known of the rule and must have advised many people of its existence. 16. In the House of Lords, the committee was divided on the correct test as well as on the correct result. But it was unanimous in rejecting the public conscience test, on the ground that it was unprincipled. The leading speech on this point was that of Lord Goff. Like almost every court which has reviewed the question, he took as his starting point the statement of Lord Mansfield in Holman v Johnson. At p 355, he observed: That principle has been applied again and again, for over 200 years. It is applicable in courts of equity as well as courts of law: see, e.g., the notes to Roberts vs Roberts (1818) Dan. 143, 150 151 and Ayerst vs Jenkins (1873) L.R. 16 Eq. 275, 283, per Lord Selborne L.C. In 1869 Mellor J. said that the maxim in pari delicto potior est conditio possidentis is as thoroughly settled as any proposition of law can be: see Taylor vs Chester (1869) L.R. 4 Q.B. 309, 313. It is important to observe that, as Lord Mansfield made clear, the principle is not a principle of justice; it is a principle of policy, whose application is indiscriminate and so can lead to unfair consequences as between the parties to litigation. Moreover the principle allows no room for the exercise of any discretion by the court in favour of one party or the other. Lord Goff acknowledged (at p 364 D E) that [t]he real criticism of the present rules is not that they are unprincipled, but rather that they are indiscriminate in their effect, and are capable therefore of producing injustice. Indeed, in the case before him, he regarded the claimants misconduct as relatively minor and pointed out that she had already made amends for it by repaying the sums dishonestly obtained in social security benefits. However, he considered that the illegality defence was governed by established rules of law (p 364F). Endorsing the view of Ralph Gibson LJ in the passage from which I have cited above, he rejected the public conscience test as contrary to 200 years of authority, because it required the court to weigh, or balance, the adverse consequences of respectively granting or refusing relief. This is little different, if at all, from stating that the court has a discretion whether to grant or refuse relief. It is very difficult to reconcile such a test with the principle of policy stated by Lord Mansfield CJ in Holman v Johnson . or with the established principles to which I have referred. (p 358 E F). Its adoption, he said, would constitute a revolution in this branch of the law, under which what is in effect a discretion would become vested in the court to deal with the matter by the process of a balancing operation, in place of a system of rules ultimately derived from the principle of public policy enunciated by Lord Mansfield CJ in Holman v Johnson. (p 363B). As he pointed out (at p 362 G H), short of treating the application of the rule as discretionary, it is difficult to make a principled distinction between degrees of iniquity. 17. Lord Browne Wilkinson (p 369B) agreed with Lord Goff on this point, observing that the consequences of being a party to an illegal transaction cannot depend, as the majority in the Court of Appeal held, on such an imponderable factor as the extent to which the public conscience would be affronted by recognising rights created by illegal transactions. The other members of the committee all agreed with the speeches of Lord Goff and Lord Browne Wilkinson on this point. 18. The House was divided on the question what should be substituted for the public conscience test. Lord Keith and Lord Goff favoured a rule which would bar any claim tainted by a sufficiently close factual connection with the illegal purpose, and would have dismissed the claim to an equitable interest in the house on that ground. Lord Browne Wilkinson, with whom Lord Jauncey and Lord Lowry agreed, preferred the reliance test derived from the decision of the Court of Appeal in Bowmakers Ltd v Barnet Instruments Ltd [1945] KB 65 and of the Privy Council in Palaniappa Chettiar v Arunasalam Chettiar [1962] AC 294. The effect of this test was that the claim was barred only if the claimant needed to rely on (i.e. to assert, whether by way of pleading or evidence) facts which disclosed the illegality: see Lord Browne Wilkinson at pp 370C D, 375 376; cf. Lord Jauncy at p 366C G. Both are intended to exclude those consequences of an illegal act which are merely collateral to the claim. Neither makes the application of the illegality defence dependent on a value judgment about the significance of the illegality or the consequences for the parties of barring the claim. For present purposes, it is enough to point out that neither test is discretionary in nature. Neither of them is based on achieving proportionality between the claimants misconduct and his loss, a concept derived from public law which is not easily transposed into the law of obligations. On the contrary, Lord Goff recognised, as Lord Mansfield had before him, that the practical operation of the law in this field will often produce disproportionately harsh consequences. 19. The Court of Appeal was bound by Tinsley v Milligan, and we have not been invited to depart from it on this appeal. It was, however, suggested and accepted by Etherton LJ, that a wider view of the law was open to the courts in the light of Lord Hoffmanns observation in Gray v Thames Trains Ltd [2009] 1 AC 1339, para 30 that the maxim ex turpi causa expresses not so much a principle as a policy. Furthermore, that policy is not based upon a single justification but on a group of reasons, which vary in different situations. I do not think that this dictum will bear the weight that has been placed on it. A court will commonly examine the policy rationale of a rule of law in order to discover what the rule is. This is what Lord Hoffmann was doing in the passage cited, which introduces an extended discussion of the various rules which the courts had evolved to deal with the dilemma that the denial of relief to one party would confer an unjustified benefit on the other. These rules did not seek to deal with the dilemma by leaving the court to make a value judgment about the seriousness of the illegality and the impact on the parties of allowing the defence. As Lord Hoffmann explained them, they dealt with it by defining as a matter of law when the illegality defence applied and when it did not. In Lord Hoffmanns view two rules were relevant where the illegality defence was raised in answer to a claim for compensation. There was a narrower rule that you cannot recover damage which is the consequence of a sentence imposed upon you for a criminal act; and a wider rule that you cannot recover compensation for loss which you have suffered in consequence of your own criminal act. The former test operated automatically, once it was ascertained that the loss claimed was a penalty imposed by a criminal court or the necessary consequence of the sentence, such as loss of earnings during a period of imprisonment. The latter test was simply a question of causation. Neither the narrower nor the wider rule depended on the courts assessment of the significance of the illegality, the proportionality of its application or the merits of the particular case. Nor does anything else in the speeches justify a test which would include such an assessment. 20. Tinsley v Milligan has had its critics. The Law Commission in successive reports on the illegality defence made little secret of its preference for the approach of the Court of Appeal in Euro Diam. The Commission initially proposed the introduction of a statutory scheme adopting a discretionary approach to the application of the illegality defence, on the ground that the House of Lords decision in Tinsley v Milligan had ruled out the development of judge made law in that direction. They later withdrew that proposal, because recent decisions of judges at first instance and in the Court of Appeal suggested to them that the effect of that decision was being eroded by lower courts: see The Illegality Defence: A Consultative Report (2009) (Consultation Paper 189), at paras 3.104 3.105, 3.123 3.124. At para 3.140 of the latter report, the Commission observed that the public conscience test, although rejected in Tinsley v Milligan, was nevertheless useful in suggesting that the present rules should be regarded as no more than guidance that help the court to focus its attention on particular features of the case before it. What lies behind these rules is a set of policies. This is why the courts are sometimes required to bend the rules (if possible) to give better effect to the underlying policies as they apply to the facts of the case before them. I confess that I find this difficult to justify as an approach to authority or the proper development of the law. It is directly inconsistent with the decision of the House of Lords in Tinsley v Milligan and the whole of the reasoning which underlies it. It makes the law uncertain, by inviting the courts to depart from existing rules of law in circumstances where it is difficult for them to acknowledge openly what they are doing or to substitute a coherent alternative structure. The present position was to my mind accurately stated by Lord Walker of Gestingthorpe when commenting on the Commissions original proposals in Stone & Rolls Ltd v Moore Stephens (a firm) [2009] AC 1391 paras 130 and 131: These proposals, if enacted by Parliament, would introduce more flexibility into this area of the law (although without reintroducing a general public conscience discretion) . The present state of the law is as laid down by the majority of the House in Tinsley v Milligan [1994] 1 AC 340. Any legislative change is likely to widen the test, not to narrow it. 21. It follows that the disposition of this case by the Court of Appeal cannot possibly be justified by the considerations put forward by Etherton LJ. Etherton LJ rejected the illegality defence on the ground that the infringement of Serviers Canadian patent was not turpitude for the purpose of the illegality defence. However, he did not address the question in what, as a matter of principle, turpitude consisted. He rejected the argument of Servier that patent infringement was necessarily turpitude and also the argument of Apotex that it never was. Instead, he held (para 76) that it all depends on the precise circumstances. The circumstances to which he attached importance were the five factors to which I have referred above: see para 11. Of these factors the first (Apotexs honest belief in the invalidity of the Canadian patent) was an assessment of the moral culpability of Apotexs infringement. The other four were all part of a complex inquiry into how far the infringement of the Canadian patent could be said to matter in the particular circumstances of this case. Arnold J had adopted much the same approach, although by reference to a narrower range of factors. The difference between them was essentially that Arnold J took a graver view of the infringements than Etherton LJ, partly because he was less impressed by the argument that Apotex genuinely believed that the Canadian patent was invalid, and partly because he attached more weight to the importance of respecting the Canadian patents. This difference encapsulates the vice of the test that they both applied. The answer depended not on the character of the illegality but on largely subjective judgments about how badly Apotex had behaved and how much it mattered. This was a process, discretionary in all but name, whose outcome would have been exceptionally difficult for either partys advisers to predict in advance. In my opinion, it was contrary to established legal principle. 22. However, it does not follow that the courts should be insensitive to the draconian consequences which the ex turpi causa principle can have if it is applied too widely. The starting point in any review of the modern law must be that we are concerned with a principle based on the application of general rules of law and not on fact based evaluations of the effect of applying them in each individual case. However, the content of the rules must recognise that within the vast and disparate category of cases where a party in some sense founds his claim upon an immoral or illegal act there are important differences of principle. The application of the ex turpi causa principle commonly raises three questions: (i) what acts constitute turpitude for the purpose of the defence? (ii) what relationship must the turpitude have to the claim? (iii) on what principles should the turpitude of an agent be attributed to his principal, especially when the principal is a corporation? Each of these questions requires a principled distinction to be made between different kinds of immoral or illegal act and different ways in which they may give rise to claims. For present purposes, we are concerned only with the question what constitutes turpitude for the purposes of the defence. The question what relationship it must have to the claim arises only if that question is answered in favour of Servier, and no question of attribution arises in this case at all. What is turpitude? 23. The paradigm case of an illegal act engaging the defence is a criminal offence. So much so, that much modern judicial analysis deals with the question as if nothing else was relevant. Yet in his famous statement of principle in Holman v Johnson Lord Mansfield spoke not only of criminal acts but of immoral or illegal ones. What did he mean by this? I think that what he meant is clear from the characteristics of the rule as he described it, and as judges have always applied it. He meant acts which engage the interests of the state or, as we would put it today, the public interest. The illegality defence, where it arises, arises in the public interest, irrespective of the interests or rights of the parties. It is because the public has its own interest in conduct giving rise to the illegality defence that the judge may be bound 24. to take the point of his own motion, contrary to the ordinary principle in adversarial litigation. In some contexts, notably the invalidity of contracts prohibited by law, the ex turpi causa principle can be analysed as part of the substantive law governing the parties rights. The contract is void, and any right derived from it is non existent. But in general, although described as a defence, it is in reality a rule of judicial abstention. It means that rather than regulating the consequences of an illegal act (for example by restoring the parties to the status quo ante, in the same way as upon the rescission of a contract) the courts withhold judicial remedies, leaving the loss to lie where it falls. This is so even in a contractual context, when the court is invited to determine the financial consequence of a contracts voidness for illegality. The ex turpi causa principle precludes the judge from performing his ordinary adjudicative function in a case where that would lend the authority of the state to the enforcement of an illegal transaction or to the determination of the legal consequences of an illegal act. In Lord Mansfields day, and for some time thereafter, this rule of abstention was sometimes expressed as a principle protecting the innocence or dignity of the court against defilement. In the notorious Highwaymens Case, Everet vs Williams (1725) (noted at (1893) 9 LQR 197), in which the court was invited to take an account between two highwaymen, it not only dismissed the claim as scandalous and impertinent but ordered the arrest of the plaintiffs solicitor and fined him. Two centuries later, in Parkinson v College of Ambulance Ltd and Harrison [1925] 2 KB 1, 13, Lush J said of a contract to procure an honour, that [n]o Court could try such an action and allow such damages to be awarded with any propriety or decency. Today, the same concept would be expressed in less self indulgent terms as a principle of consistency. This was the point made by McLachlin J in her much admired judgment in Hall v Hebert (1993) 101 DLR (4th) 129, 165: To allow recovery in these cases would be to allow recovery for what is illegal. It would put the courts in the position of saying that the same conduct is both legal, in the sense of being capable of rectification by the court, and illegal. It would, in short, introduce an inconsistency in the law. It is particularly important in this context that we bear in mind that the law must aspire to be a unified institution, the parts of which contract, tort, the criminal law must be in essential harmony. For the courts to punish conduct with the one hand while rewarding it with the other, would be to create an intolerable fissure in the laws conceptually seamless webWe thus see that the concern, put at its most fundamental, is with the integrity of the legal system. 25. The ex turpi causa principle is concerned with claims founded on acts which are contrary to the public law of the state and engage the public interest. The paradigm case is, as I have said, a criminal act. In addition, it is concerned with a limited category of acts which, while not necessarily criminal, can conveniently be described as quasi criminal because they engage the public interest in the same way. Leaving aside the rather special case of contracts prohibited by law, which can give rise to no enforceable rights, this additional category of non criminal acts giving rise to the defence includes cases of dishonesty or corruption, which have always been regarded as engaging the public interest even in the context of purely civil disputes; some anomalous categories of misconduct, such as prostitution, which without itself being criminal are contrary to public policy and involve criminal liability on the part of secondary parties; and the infringement of statutory rules enacted for the protection of the public interest and attracting civil sanctions of a penal character, such as the competition law considered by Flaux J in Safeway Stores Ltd v Twigger [2010] 3 All ER 577. 26. There are dicta which suggest that the ex turpi causa principle may be wider than this, that it may be engaged by a purely civil wrong such as a tort or breach of contract. The clearest and best known of them is that of Kennedy J in Burrows v Rhodes [1899] 1 QB 816, 828. He thought that no claim for damages could be founded on an act if the act is manifestly unlawful or the doer of it knows it to be unlawful as constituting either a civil wrong or a criminal offence. However, the only English case which he cited as supporting this proposition so far as it relates to civil wrongs, is Shackell v Rosier (1836) 2 Bing NC 634, which concerned a claim on a contract to indemnify the Plaintiff against damages and costs payable in consequence of having published a criminal libel: see Tindall CJ at 645 646. Weld Blundell v Stephens [1920] AC 956 concerned another libel action. The plaintiff had been successfully sued for a libel contained in a document which he had supplied to his accountant. The majority of the House of Lords held that he could not recover the damages he had had to pay to the defamed party from his accountant, who had negligently left the document about so that it came to the formers attention. The difficulty about this case is that its ratio has never been clear. Lord Dunedin proposed to dismiss the claim on the ground that the plaintiff was relying on his own wrong, namely the libel by which he had incurred liability. Lord Sumner decided the case on causation. He thought that the claim should be dismissed on the ground that the plaintiff had had to pay damages because of the libel, not the negligence. Lord Wrenbury thought that the claim should be dismissed on both grounds, and specifically approved the dictum of Kennedy J in Burrows v Rhodes. Viscount Finlay, who dissented, thought that a civil wrong was not to be equated to a criminal act for the purpose of the ex turpi causa principle: see p 971. Lord Parmoor, who also dissented, made the same distinction: pp 995 996. 27. In Columbia Picture Industries Inc. v Robinson [1987] Ch. 38, the plaintiff had obtained an Anton Piller order for an improper purpose and without full disclosure, against a defendant whose business consisted almost entirely in the manufacture and sale of pirated videos. Scott J declined to order an inquiry into damages under the plaintiffs undertaking because the losses had been incurred in a business which was illicit albeit not criminal under the law as it then stood. The point does not seem to have been argued in any detail, if at all, and the reasoning was both brief and cryptic. The judge appears to have reached his conclusion on two grounds. The first was that under the then law the pirated tapes which were the stock in trade of the defendants business belonged to the copyright owners, so that the defendants inability to sell them caused him no loss. The second was that the defendants business was dishonest (the judge thought the case analogous to the Highwaymens Case). By this I think that he must have meant that any sales that the defendant would have made but for the Anton Piller order would have been made by dishonestly misleading his customers about the origin of the videos. It is I think only on that footing the judges second reason can be justified. Scott J was not suggesting that a breach of copyright was in itself a sufficient basis on which to raise the illegality defence. 28. Apart from these decisions, the researches of counsel have uncovered no cases in the long and much litigated history of the illegality defence, in which it has been applied to acts which are neither criminal nor quasi criminal but merely tortious or in breach of contract. In my opinion the question what constitutes turpitude for the purpose of the defence depends on the legal character of the acts relied on. It means criminal acts, and what I have called quasi criminal acts. This is because only acts in these categories engage the public interest which is the foundation of the illegality defence. Torts (other than those of which dishonesty is an essential element), breaches of contract, statutory and other civil wrongs, offend against interests which are essentially private, not public. There is no reason in such a case for the law to withhold its ordinary remedies. The public interest is sufficiently served by the availability of a system of corrective justice to regulate their consequences as between the parties affected. It is right to add that there may be exceptional cases where even criminal and quasi criminal acts will not constitute turpitude for the purposes of the illegality defence. In Gray v Thames Trains Ltd at para 83, Lord Rodger of Earlsferry suggested that some offences might be too trivial to engage the defence. In general, however, the exceptional cases are implicit in the rule itself. This applies in particular where the act in question was not in reality the claimants at all. Leaving aside questions of attribution which arise when an agent is involved, and which are no part of the present appeal, there is a recognised exception to the category of turpitudinous acts for cases of strict 29. liability, generally arising under statute, where the claimant was not privy to the facts making his act unlawful: see Stone & Rolls Ltd v Moore Stephens (a firm) [2009] 1 AC 1391, paras 24, 27 (Lord Phillips of Worth Matravers). In such cases, the fact that liability is strict and that the claimant was not aware of the facts making his conduct unlawful may provide a reason for holding that it is not turpitude at all. This is the most satisfactory explanation of the decision of the Singapore Court of Appeal in United Project Consultants Pte Ltd v Leong Kwok Ong (trading as Leon Kwok Onn & Co) [2005] 4 SLR 214, where a taxpayer sought to recover from his accountant an administrative penalty under a statutory provision dealing with the innocent submission of an incorrect tax return: see paras. 55, 57. More generally, the wrong alleged against the defendant may consist precisely in causing an innocent claimant to commit an offence of strict liability. The leading case is Burrows v Rhodes [1899] QB 816, which arose out of the Jameson Raid of 1895. The plaintiff was induced to enlist in the raid, contrary to section 11 of the Foreign Enlistment Act 1870, by the defendants fraudulent representation that it had the sanction of the Crown (which would have made it lawful). In most cases of this kind the illegality defence would not arise, for there would be no criminal act, the element of mens rea being absent. But the pleadings in Burrows required the court to make the rather artificial assumption that the plaintiff would have been convicted under section 11 even without mens rea: see pp 830 832 (Kennedy J). The court held that even so, the defence was not available. This was because the plaintiff was not aware of the facts making enlistment illegal and on the assumption being made by the court he was criminally liable only because that liability was strict. As Kennedy J suggested at p 834, the exception would not necessarily have applied if Burrows had been claiming damages arising directly from the sentence of a criminal court or from some other penal sanction imposed on him by law. That situation would have engaged Lord Hoffmanns narrower rule, and in that context it must be assumed that the sentence was what the criminal court regarded as appropriate to reflect the personal responsibility of the accused for the crime that he had committed: Gray v Thames Trains Ltd [2009] 1 AC 1339, para 41 (Lord Hoffmann). Cf. Askey v Golden Wine Co Ltd [1948] 2 All ER 35, 38 (Denning LJ); State Railway Authority of New South Wales v Wiegold (1991) 25 NSWLR 500, 514 (Samuels JA). The application of the exception for cases of strict liability may require a court to determine whether the claimant was in fact privy to the illegality. To that extent, an inquiry into the claimants moral culpability may be necessary in such cases before his act can be characterised in law as turpitude. This may be a difficult question, but it is not a question of degree. The conclusion will be a finding that the claimant was aware of the illegality or that he was not. It is a long way from the kind of value judgment implicit in the search for a proportionate relationship between the illegality and its legal consequences of the claim. Conclusion 30. In my opinion, the illegality defence is not engaged by the consideration that Apotexs lost profits would have been made by selling product manufactured in Canada in breach of Serviers Canadian patent. A patent is of course a public grant of the state. But it does not follow that the public interest is engaged by a breach of the patentees rights. The effect of the grant is simply to give rise to private rights of a character no different in principle from contractual rights or rights founded on breaches of statutory duty or other torts. The only relevant interest affected is that of the patentee, and that is sufficiently vindicated by the availability of damages for the infringements in Canada, which will be deducted from any recovery under Serviers undertaking in England. There is no public policy which could justify in addition the forfeiture of Apotexs rights. In those circumstances, the second and third issues before the Court of Appeal do not arise. I would accordingly dismiss the appeal. LORD MANCE 33. The Court of Appeal approached the defence of illegality on the basis that it required in each case an intense analysis of the particular facts and of the proper application of the various policy considerations underlying the illegality principle so as to produce a just and proportionate response to the illegality, per Etherton LJ, para 75. This and the courts ensuing analysis of a number of the factors on which it relied fit uneasily with the clear cut, if potentially harsh, approach applicable on the basis of Tinsley v Milligan [1994] 1 AC 340. Nevertheless, I arrive at the same result as the Court of Appeal, but by different reasoning. I agree with Lord Sumption that this appeal should fail on the simple basis that the manufacture and supply of product in breach of the Canadian patent would, for the reasons he gives in paras 23 to 30, not have involved turpitude such as to engage the maxim ex turpi cause action non oritur. 34. 35. The second and third issues which Lord Sumption identifies in para 22 do not therefore arise. I note only that the second might on the face of it have arisen, 31. 32. 36. 37. had it not been for the parties agreement, noted by Lord Sumption in para 2, that each group should be treated as one entity. In fact, the European patent upon which the present proceedings are based was owned by the first appellant, Les Laboratoires Servier, a licence under it being granted to the second appellant, Servier Laboratories Ltd., while the Canadian patent, which would have been infringed by further manufacture but for the English injunction, was owned by another company in the group, ADIR, with a licence under it being granted to Servier Canada Inc. In the Apotex group, as Lord Sumption recounts in para 6, the active ingredient would have been manufactured by Apotex Pharmachem Inc, and then sold at a 30% mark up to Apotex Inc, which would have made it into tablets, which it would then have sold to Apotex UK Ltd for a price equivalent to 90% of Apotex UK Ltds profits on resale in the United Kingdom. 38. The English proceedings and the injunction were issued against all these three Apotex companies, as well as another, Apotex Europe Ltd. The injunction ordered that the Defendants must not dispose of, offer to dispose of, or import in the United Kingdom their generic perindopril erbumine product, on the basis of an undertaking that if the court later finds that this order has caused loss to the defendants, which shall include Apotex UK Ltd, and decides that the defendants should be compensated for that loss, the claimants [that is now, the two appellants] will comply with any order the court shall makes. 39. In the Canadian proceedings under the Canadian patent, Les Laboratoires Servier and Servier Laboratories were included as plaintiffs, but were struck out at trial as having no cause of action. The claim for infringement of the Canadian patent ultimately succeeded in the names of only ADIR and Servier Canada Inc against Apotex Inc and Apotex Pharmachem Inc. 40. The basis of the agreement that each group should in the present English proceedings be treated as one entity was not disclosed or explored. There may well have been some undisclosed legal basis for treating the individual group members as one entity or as having combined together. Subject to that, there might, on the face of it, have been an argument that it was only Apotex Inc and Apotex UK Ltd that would ever have disposed or, offered to dispose of, or imported the product into the United Kingdom or therefore were prevented from so doing by the injunction. Equally, there might have been an argument that the only companies which could have had any complaint under the Canadian patent would have been ADIR and Servier Canada Inc (the latter not party to the English proceedings) and that any complaint which they could have had would have been in respect of the products manufacture in and export from Canada, rather than in respect of importation into, or disposition in, England. 41. That might then perhaps have meant that (i) the companies with potential claims against Les Laboratoires Servier and Servier Laboratories Ltd under the undertaking were Apotex Inc and Apotex UK Ltd, which would exclude any claim in respect of Apotex Pharmachem Incs loss of profit, while (ii) the only relevant hypothetical cross claim would have been by ADIR against Apotex Pharmachem Inc. and Apotex Inc., for loss of the 30% mark up and the 90% profit that they would have made. The appellants liable under the undertaking not being the same as the claimants under the cross claim, no set off could then on the face of it have arisen. 42. This is all very tentative, since it was not explored. But it highlights a certain distance between the subject matter of the undertaking and the hypothetical cross claim, which could have had some bearing on the answer to the second question, had that arisen. 43. As to the third question, if the separate corporate identities of the members of each group had been insisted upon, then it seems not beyond all doubt that some point might have arisen under this question also. As it is, however, Lord Sumption correctly observes that no question of attribution arises. 44. This is not therefore the case in which to examine the difficult issues of attribution which may arise where a company acts through an agent whether that be an agent who is only capable of binding the company vicariously or whether the agent may, for some purposes at least, also be equated with the company (e.g. because he is its alter ego or its sole controlling owner) and so be capable of binding it personally. Such issues were discussed in Stone & Rolls Ltd v Moore Stephens (a firm) [2009] UKHL 30, [2009] 1 AC 1391, but do not require revisiting here. 45. Equally, this is not a case in which any question arises as to the correctness or otherwise of a decision such as that of the Court of Appeal in Safeway Stores Ltd v Twigger [2010] EWCA Civ 1492, which held that a company could not recover from directors or employees who had by involving the company in acts contravening the Competition Act 1998 caused it to incur a personal liability for penalties imposed under that Act. LORD TOULSON 46. In this appeal Servier is attempting to extend the doctrine of illegality beyond any previously reported decision in circumstances where I see no good public policy reason to do so. 48. 47. Apotexs claim arises under a cross undertaking in damages. The present proceedings were brought in England for alleged infringement of a UK patent. On 7 August 2006 Mann J granted Servier an interlocutory injunction restraining Apotex from importing and selling a chemical compound (generic perindopril erbumine) in the UK, upon Servier giving the usual cross undertaking in damages. On 11 July 2007 Serviers claim was dismissed and the injunction was discharged. In parallel Canadian proceedings Apotex was found liable for infringement of Serviers Canadian patent for the same chemical compound. An interlocutory injunction had been refused. Damages in the Canadian proceedings remain to be assessed. It is accepted that if the English interlocutory injunction had not been granted, Apotex would have imported and sold in the UK an additional 3.6 million packs of tablets. Apotex recognises that in calculating its damages under the cross undertaking for loss of profits from the lost UK sales it must offset not only the costs of manufacture but also the amount which it would have had to pay in the Canadian action as damages for manufacturing the tablets in breach of the Canadian patent. 50. On an inquiry into damages on a cross undertaking, as a matter of general principle the courts task is to put the party seeking to enforce the undertaking in the same position as if the injunction had not been granted. In Hoffmann La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295, 361, Lord Diplock said: [The court] retains a discretion not to enforce the undertaking if it considers that the conduct of the defendant in relation to the obtaining or continuing of the injunction or the enforcement of the undertaking makes it inequitable to do so, but if the undertaking is enforced the measure of the damages payable under it is not discretionary. It is assessed on an inquiry at which [the] principles to be applied are fixed and clear. The assessment is made upon the same basis as that upon which damages for breach of contract would be assessed if the undertaking had been a contract between the plaintiff and the defendant that the plaintiff would not prevent the defendant from doing that which he was restrained from doing by the terms of the injunction. 51. There has been no suggestion in this case that the conduct of Apotex in relation to the injunction was such as to make it inequitable for the court to enforce the undertaking. Arnold J did not proceed on that basis, nor has Servier argued that the court should refuse to enforce the cross undertaking on discretionary grounds. 52. The order made by the Court of Appeal accords with Lord Diplocks method of assessment. As Etherton LJ explained in his judgment at para 88, its effect is to place Apotex in precisely the position in which it would have been if there had been no UK interlocutory injunction, and it does not offend comity with Canada. Apotex will recover whatever sum may be left after deducting, from the proceeds of the lost sales, both the costs of the sales and the amount for which it would have had to account to Servier in the Canadian proceedings by way of damages for patent infringement. The result, Etherton LJ said, would neither be offensive to comity with Canada nor infringe English public policy. 53. By contrast, the order sought by Servier would potentially place it in a better position than if it had not obtained the English injunction for which it gave a cross undertaking. I use the word potentially, because it remains to be seen how the Canadian court will calculate damages for the infringement which led to UK sales by Apotex. It will be a simple matter to apply the same approach to the lost sales as the Canadian court will apply in relation to actual sales made by Apotex. The result may be that Apotex will be unable to establish any loss, after deduction of the damages which it would have had to pay in Canada, but that will depend on the outcome of the Canadian proceedings. 54. Servier argues that Apotexs claim under the cross undertaking is barred by the doctrine of illegality. It does not contend that the contracts for the lost sales would have been unlawful contracts under English law. It does not suggest, for example, that at the date when the Canadian court found that there had been a breach of the Canadian patent in the manufacture of the tablets, UK purchasers of the tablets who had not yet paid for them could have refused to make payment on the ground that the contracts of sale were unenforceable by Apotex because of illegality. Servier submits, however, that Apotexs claim under the cross undertaking for loss of payments which it would have received under contracts, lawful in themselves, is barred by illegality because performance of the contracts would have involved or resulted from breach of the Canadian patent. Etherton LJ said in his judgment, and his statement has not been challenged, that infringement of a Canadian patent constitutes a statutory wrong of strict liability under Canadian law. 55. Servier is unable to cite any precedent for saying that a claim for money otherwise payable under English law offends the doctrine of illegality if it arises from a contract involving the commission of a strict liability tort (whether as the object of the contract or in its performance). 56. There are very few reported cases in which the doctrine of illegality has been applied to tort. In Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621, the Court of Appeal held a contract to be unenforceable which had as its object the commission of the tort of deceit, but in that case Pearce LJ qualified his judgment by saying, at p 640, that in none of the cases cited before the court had a plaintiff failed where he was not fraudulently minded. Fraud for the purposes of deceit includes a false statement made in reckless disregard whether it be true or false, but there is no precedent for applying the doctrine of illegality to a tort of strict liability. In this case the protagonists are pharmaceutical companies who were involved in a bona fide commercial dispute about the validity of certain patents. 57. Servier relies on the often quoted statement of Lord Mansfield in Holman v Johnson in which he said that The principle of public policy is this; ex dolo malo non oritur actio. That statement made in 1775 remains a succinct statement of broad principle, but, as the cases over the last 340 years demonstrate, it does not provide a simple measuring rod for determining the boundaries of the principle. The case law is notoriously untidy. In deciding whether the principle should be applied in circumstances not directly covered by well established authorities, it is right to proceed carefully on a case by case basis, considering the policies which underlie the broad principle. This has been said in the past by judges at the highest level. 58. In Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277, 293, Lord Wright said: Each case has to be considered on its merits. Nor must it be forgotten that the rule by which contracts not expressly forbidden by statute or declared to be void are in proper cases nullified for disobedience to a statute is a rule of public policy only, and public policy understood in a wider sense may at times be better served by refusing to nullify a bargain save on serious and sufficient grounds. 59. In Gray v Thames Trains Ltd [2009] AC 1339, 1370, para 30, Lord Hoffmann said: The maxim ex turpi causa expresses not so much a principle as a policy. Furthermore, that policy is not based upon a single justification but on a group of reasons, which vary in different situations. 60. This observation was endorsed by Lord Phillips in Stone & Rolls Ltd v Moore Stephens (a firm) [2009] 1 AC 1391, para 25, where he said that it is necessary to give consideration to the policy underlying ex turpi causa in order to decide whether the defence was bound to defeat a claim. In Hounga v Allen [2014] 1 WLR 2889, [2014] UKSC 47, Lord Wilson said in the judgment of the majority, at para 42: 61. The defence of illegality rests upon the foundation of public policy. The principle of public policy is this said Lord Mansfield by way of preface to his classic exposition of the defence in Holman v Johnson (1775) 1 Cowp 341, 343. Rules which rest upon the foundation of public policy, not being rules which belong to the fixed or customary law, are capable, on proper occasion, of expansion or modification: Maxim Nordenfelt Guns and Ammunition Co Nordenfelt [1893] 1 Ch 630, 661 (Bowen LJ). So it is necessary, first, to ask What is the aspect of public policy which founds the defence? and, second, to ask But is there another aspect of public policy to which application of the defence would run counter? 62. I would therefore make no criticism of the Court of Appeal for considering whether public policy considerations merited applying the doctrine of illegality to the facts of the present case. In so doing it adopted a similar approach to that of the majority of this court in Hounga v Allen. 63. Cross undertakings are a standard and valuable feature of litigation, particularly but not only in commercial litigation. There is a public interest in their enforceability in bona fide disputes. It saves the court from having to make a more detailed and therefore time consuming and expensive assessment of the merits at an interlocutory stage than might otherwise be necessary, since the cross undertaking is designed to protect the defendant against the applicant gaining a financial advantage from obtaining an injunction which is later set aside on the claim failing. I cannot see a good public policy reason why Servier should be put in a better position than if the English injunction had not been granted, or why Apotex should be required to give greater credit to Servier on account of its breach of the Canadian patent than the amount assessed by the Canadian court as properly reflecting that breach. 64. There may come a case where it is necessary for this court to carry out a detailed re analysis of Tinsley v Milligan [1994] 1 AC 340, in the light of subsequent authorities and the consultative and final reports of the Law Commission (LCCP No 189 and Law Com No 320), in which the case has not for the first time been criticised; but nobody invited such a reconsideration in this case. The argument in this case was about whether the doctrine of illegality extends to the present case. I am satisfied that there is no good reason why it does or should do so, and I agree that the appeal should be dismissed. 49.

This appeal is about the meaning of turpitude in the ex turpi causa defence. This defence allows a defendant to resist a claim which is founded on the claimants own illegal or immoral acts. The appellants (collectively Servier) hold a number of patents for perindopril erbumine (a drug used for treating hypertension and cardiac insufficiency). European patent protection for the compound itself expired in June 2003, but a UK patent protecting a crystalline form continued and Serviers UK subsidiary was the exclusive licensee. Canadian patent protection for the compound itself will not expire until 2018. The respondents (collectively Apotex) are a Canadian group specialising in the manufacture and marketing of generic pharmaceutical products. The parties agreed that, for the purposes of this appeal, each group of companies could be treated as one legal entity each. Apotex began to import and sell generic perindopril erbumine tablets in the UK at the end of July 2006. Servier obtained an interim injunction against Apotex to stop it from doing this. In order to get the injunction, Servier had to give a cross undertaking in damages, meaning that it promised to compensate Apotex for any loss caused by the injunction if it later turned out that the injunction should not have been granted. In the event, the court found that the UK patent was invalid, and so Apotex became entitled to compensation from Servier. It is agreed that such compensation should be calculated on the basis that Apotex would have sold an additional 3.6m packs of tablets in the UK if there had been no injunction. These packs would have been manufactured in Canada but sold in the UK. Meanwhile, the parties were also litigating in Canada about the Canadian patent. That patent was found to be valid and infringed. Damages have not yet been assessed. The illegality issue arises because Servier argues that it is contrary to public policy for Apotex to recover damages for being prevented from selling a product whose manufacture in Canada would have been unlawful there as an infringement of Serviers Canadian patent. Servier won on this point at first instance before Arnold J but lost in the Court of Appeal. The Court of Appeal thought that the infringement of the Canadian patent did not count as turpitude for the purposes of the illegality defence, because: (i) Apotex honestly and reasonably believed that the Canadian patent was invalid too; (ii) it was important that Servier should pay once it had been discovered that it was enjoying a monopoly it was not entitled to; and (iii) the effect of the Canadian patent was limited to Canada, where (iv) the Canadian court had refused to grant an injunction and (v) Apotex was paying damages which would be taken into account when calculating Serviers liability on the cross undertaking. Servier appealed to the Supreme Court. The Supreme Court unanimously dismisses Serviers appeal, but on grounds which differ from those of the Court of Appeal. It holds that the infringement of the Canadian patent by Apotex does not constitute turpitude for the purposes of the ex turpi causa defence. Lord Sumption, with whom Lord Neuberger and Lord Clarke agree, gives the main judgment. Lord Mance agrees with Lord Sumption and offers some further comments. Lord Toulson also dismisses the appeal but agrees with the approach taken by the Court of Appeal. The majority of the House of Lords in Tinsley v Milligan [1994] 1 AC 340 rejected the public conscience approach on the ground that it imported a discretionary element into what was in reality a rule of law [13 18]. The Court of Appeal was wrong to treat the question as depending on the culpability of the illegality, the proportionality of the application of the defence or the general merits of the particular case [19]. Turpitude involves a breach of the public law of the state (or in some cases its public policy). The paradigm case of turpitude is a criminal act. In addition, the category of turpitude includes certain quasi criminal acts, such as: (i) dishonesty or corruption; (ii) certain anomalous acts (such as prostitution) which, while not criminal, are contrary to public policy and commonly involve criminal liability on the part of others; and (iii) the infringement of statutory rules enacted for the protection of the public interest and attracting civil sanctions of a penal character [23 30; 34]. The grant of a patent gives rise to private rights, the infringement of which does not engage the public interest so as to give rise to the ex turpi causa defence [30]. Lord Toulson agrees that the appeal should be dismissed, but he says that the Court of Appeal was right to take public policy considerations into account, because the defence is based on public policyas a majority of the Supreme Court recognised in Hounga v Allen [2014] UKSC 47 [62]. The public interest in the enforceability of cross undertakings in damages is an important factor pointing in favour of the recovery of damages by Apotex [63]. It may, however, be necessary to re analyse Tinsley v Milligan [1994] 1 AC 340 in a future case [64].

The Respondent, Haley Anne Preston (formerly Moore), a Minister in the Redruth Circuit of the Methodist Church until 2009, wishes to prosecute a claim against the Church in an employment tribunal for unfair dismissal. Under section 94 of the Employment Rights Act 1996, only an employee has the right not to be unfairly dismissed. Section 230 uncontroversially defines an employee as someone who has entered into or works under a contract of service or apprenticeship. The question at issue on this appeal is whether Ms Preston was an employee. The tribunal held that she was not. That decision was, however, reversed by the Employment Appeal Tribunal in a decision subsequently upheld by the Court of Appeal. The current state of the authorities Disputes about the employment status of ministers of religion have been coming before the courts ever since the introduction of national insurance in 1911 made it necessary to classify them for the first time. There is now a substantial body of authority on the point, much of it influenced by relatively inflexible tests borne of social instincts which came more readily to judges of an earlier generation than they do in the more secular and regulated context of today. Until recently, ministers of religion were generally held not to be employees. Two recurrent themes can be found in the case-law. The first is the distinction between an office and an employment. Broadly speaking, the difference is that an office is a position of a public nature, filled by successive incumbents, whose duties were defined not by agreement but by law or by the rules of the institution. A beneficed clergyman of the Church of England is, or was until recent measures modified the position, the paradigm case of a religious office-holder. But at an early stage curates in the Church of England were recognised as having the same status for this purpose: see In re Employment of Church of England Curates [1912] 2 Ch 563. The position of other ministers was taken to be analogous. In Scottish Insurance Commissioners v Church of Scotland (1914) SC 16, which concerned an assistant minister in the United Free Church of Scotland, Lord Kinnear said at 23 that the status of an assistant minister is not that of a person who undertakes work defined by contract but of a person who holds an ecclesiastical office, and who performs the duties of that office subject to the laws of the Church to which he belongs and not subject to the control and direction of any particular master. In Diocese of Southwark v Coker [1998] ICR 140, the Court of Appeal held that a stipendiary assistant curate was not an employee. They held that his duties were derived from his priestly status and not from any contract. Both Mummery LJ (at 147) and Staughton LJ (at 150) considered that there was a presumption that ministers of religion were office-holders who did not serve under a contract of employment. The second theme is a tendency to regard the spiritual nature of a minister of religions calling as making it unnecessary and inappropriate to characterise the relationship with the church as giving rise to legal relations at all. In Rogers v Booth [1937] 2 All ER 751, 754, Sir Wilfred Green MR, delivering the judgment of the Court of Appeal, held that membership of the Salvation Army gave rise to a relationship pre-eminently of a spiritual character which was not intended to give rise to legal relations. More recently, in Davies v Presbyterian Church of Wales [1986] 1 WLR 323, the House of Lords held that the mere fact that a relationship founded on the rules of a church was non-contractual did not mean that that there were no legally enforceable obligations at all. But they were inclined to find those obligations in the law of trusts, and adhered to the familiar distinction between an employment and a religious vocation. At p 329, Lord Templeman, with whom the rest of the committee agreed, said: My Lords, it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual. But in the present case the applicant cannot point to any contract between himself and the church. The book of rules does not contain terms of employment capable of being offered and accepted in the course of a religious ceremony. The duties owed by the pastor to the church are not contractual or enforceable. A pastor is called and accepts the call. He does not devote his working life but his whole life to the church and his religion. His duties are defined and his activities are dictated not by contract but by conscience. He is the servant of God. If his manner of serving God is not acceptable to the church, then his pastorate can be brought to an end by the church in accordance with the rules. The law will ensure that a pastor is not deprived of his salaried pastorate save in accordance with the provisions of the book of rules but an industrial tribunal cannot determine whether a reasonable church would sever the link between minister and congregation. The duties owed by the church to the pastor are not contractual. The law imposes on the church a duty not to deprive a pastor of his office which carries a stipend, save in accordance with the procedures set forth in the book of rules. President of the Methodist Conference v Parfitt [1984] QB 368 was a decision of the Court of Appeal on a claim for unfair dismissal by a Methodist minister. It is therefore directly in point on the present appeal. The Court held that the minister was not an employee, but the reasons of its members differed. Dillon LJ considered the spiritual character of the Methodist ministry to be fundamental to constitution and standing orders of the Methodist Church, but he reached the conclusion by an analysis of their terms. He does not appear to have been influenced by the distinction between an office and an employment, and regarded the earlier authorities as of no assistance. May LJ, on the other hand, adopted the analysis of the dissenting judgment of Waterhouse J in the Employment Appeal Tribunal, who had considered that the spiritual character was in itself inconsistent with the existence of a contractual relationship. Sir John Donaldson MR agreed with both judgments. The leading modern case in this area is the decision of the House of Lords in Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28. The Appellant was an associate minister in a parish of the Church of Scotland, who wished to bring a sex discrimination claim against the Church. It was accepted that she did not have a contract of service. But the statutory test of employment for the purposes of sex discrimination claims is broader than the test for unfair dismissal claims. Under the Sex Discrimination Act 1975, it extended to those who contract personally to execute any work or labour. Ms Percy claimed to come within that category. In spite of the difference between the tests for unfair dismissal and sex discrimination, the House took the opportunity to revisit both of the themes which had featured in the authorities to date on the question whether a minister was employed under a contract of service. The leading speech for the majority was delivered by Lord Nicholls, with whom Lord Scott and Baroness Hale agreed. Lord Nicholls regarded office- holding as an unsatisfactory criterion, at any rate on its own, for deciding whether a person was employed. The concept is clear enough but the boundaries are not, except in the case of holders of a small number of offices which have long been recognised as such by the common law, such as constables and beneficed clergymen of the Church of England. Moreover, offices and employments are not always mutually exclusive categories. A contract of employment is capable of subsisting side by side with many of the characteristics of an office. It followed that the classification of a ministers occupation as an office was no more than one factor in a judgment that depended on all the circumstances. Turning to the spiritual character of a ministers calling, Lord Nicholls recognised its relevance but pointed out that it could not be conclusive. At paras 23-25, he said: 23. There are indeed many arrangements or happenings in church matters where, viewed objectively on ordinary principles, the parties cannot be taken to have intended to enter into a legally-binding contract. The matters relied upon by Mr Parfitt in President of the Methodist Conference v Parfitt [1984] QB 368 are a good example of this. The nature of the lifelong relationship between the Methodist Church and a minister, the fact that he could not unilaterally resign from the ministry, the nature of his stipend, and so forth, all these matters made it impossible to suppose that any legally-binding contract came into being between a newly-ordained minister and the Methodist Church when he was received into full connection. Similarly with the Church's book of rules relied on by the Reverend Colin Davies in Davies v Presbyterian Church of Wales [1986] I WLR 323. Then the rebuttable presumption enunciated by the Lord President in the present case, following Mummery LJ's statements of principle in Diocese of Southwark v Coker [1998] ICR 140, 147, may have a place. Without more, the nature of the mutual obligations, their breadth and looseness, and the circumstances in which they were undertaken, point away from a legally-binding relationship. 24. But this principle should not be carried too far. It cannot be carried into arrangements which on their face are to be expected to give rise to legally-binding obligations. The offer and acceptance of a church post for a specific period, with specific provision for the appointee's duties and remuneration and travelling expenses and holidays and accommodation, seems to me to fall firmly within this latter category. 25. Further, in this regard there seems to be no cogent reason today to draw a distinction between a post whose duties are primarily religious and a post within the church where this is not so. In President of the Methodist Conference v Parfitt [1984] QB 368, 376, Dillon LJ noted that a binding contract of service can be made between a minister and his church. This was echoed by Lord Templeman in your Lordships' House in Davies v Presbyterian Church of Wales [1986] I WLR 323, 329. Lord Templeman said it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual. 26 The context in which these issues normally arise today is statutory protection for employees. Given this context, in my view it is time to recognise that employment arrangements between a church and its ministers should not lightly be taken as intended to have no legal effect and, in consequence, its ministers denied this protection. Applying these principles to Ms Percys case, Lord Nicholls had no difficulty in finding that she had contracted personally to execute any work or labour. This was because of the manner in which she had been engaged. The relevant committee of the Church of Scotland had invited applications, referring to the duties, the terms of service and the remuneration associated with the job. Ms Percy had responded, was offered the job and sent a full copy of the terms. She replied formally accepting it. These circumstances suggested a contractual relationship, and nothing in the terms was inconsistent with that. Lord Hope, in a concurring judgment, reached the same conclusion, pointing out that the manner of appointment of an associate minister was significantly different from the induction of a minister to a charge. He considered that if the relationship was contractual at all, the contract was one which engaged the anti-discrimination provisions of the statute. He accepted that Ms Percy was appointed to an office. But, like Lord Nicholls, he thought that there was no reason why the duties of that office should not be performed under a contract. The circumstances in which Ms Percy was engaged showed that this was what the parties had intended in her case. It is clear from the judgments of the majority in Percy that the question whether a minister of religion serves under a contract of employment can no longer be answered simply by classifying the ministers occupation by type: office or employment, spiritual or secular. Nor, in the generality of cases, can it be answered by reference to any presumption against the contractual character of the service of ministers of religion generally: see, in particular, Baroness Hale at para 151. The primary considerations are the manner in which the minister was engaged, and the character of the rules or terms governing his or her service. But, as with all exercises in contractual construction, these documents and any other admissible evidence on the parties intentions fall to be construed against their factual background. Part of that background is the fundamentally spiritual purpose of the functions of a minister of religion. The constitution and standing orders of the Methodist Church Methodist ministers have no written contract of employment. Their relationship with the Church is governed by its constitution, which is contained in the Deed of Union, by the standing orders of the Methodist Conference, and by such specific arrangements (if any) as may have been made with a particular minister. It is convenient to deal first with the position of the Methodist ministry generally, before examining any special arrangements with Ms Preston. Ms Rose QC, who appeared for the President of the Methodist Conference, invited us to approach these instruments on the footing that in the absence of anything in them amounting to an express contract of employment, it was necessary to imply one. For this purpose, she submitted, the test was one of necessity. If the essential features of the arrangements described in the Deed of Union and the standing orders were capable of being explained without reference to an employment relationship, then no such relationship should be held to exist. I reject this submission for three reasons. In the first place, in modern conditions, against the background of the broad schemes of statutory protection of employees, it should not readily be assumed that those who are engaged to perform work and receive remuneration intend to forgo the benefits of that protection, even where the work is of a spiritual character. Secondly, as Lord Hope pointed out in Percy, at para 107 the practical effect of the suggested approach is to reintroduce the presumption of non-contractual status in the case of ministers of religion, which he, along with the majority in that case rejected in principle. Third, whatever the legal classification of a Methodist ministers relationship with his Church, it is not sensible to regard it as implied. It is documented in great detail in the Deed of Union and the standing orders. The question is whether the incidents of the relationship described in those documents, properly analysed, are characteristic of a contract and, if so, whether it is a contract of employment. Necessity does not come into it. The Deed of Union, in its original form, was agreed in 1932 when the Wesleyan Methodist Church united with the Primitive Methodist Church and the United Methodist Church and other Methodist denominations to form the Methodist Church of Great Britain. The governing body of the Church is the Conference, which meets annually and transacts business in two sessions, the Representative Session and the Ministerial Session. The Representative Session comprises designated office-holders and representatives. The Ministerial Session comprises those members of the Representative Session who are ministers, together with certain other categories of ministers. The senior officer of the Church is the President of the Conference, who is designated as such by a vote of the previous Conference. Detailed provision is made for every aspect of the government of the Church by standing orders made by the Conference. For the purposes of its ministry, the Church is divided into geographical circuits, each of which is governed by its Circuit Meeting, Circuit Stewards, and committees appointed for special purposes. The Church adheres to the doctrine of the priesthood of all believers. Section 2, clause 4 of the Deed of Union records, Christs ministers in the church are stewards in the household of God and shepherds of his flock. Some are called and ordained to this sole occupation and have a principal and directing part in these great duties but they hold no priesthood differing in kind from that which is common to all the Lords people and they have no exclusive title to the preaching of the gospel or the care of souls. Section 7, clause 23(h) of the Deed of Union provides that to become a minister a candidate must first obtain the judgment of the Ministerial Session that he or she is fit to be admitted into full connexion and ordination. The Representative Session must then resolve that he or she is to be admitted and ordained. The candidate is then ordained by laying on of hands. Standing order 700(2) provides that [b]y receiving persons into full connexion as Methodist ministers the Conference enters into a covenant relationship with them in which they are held accountable by the Church in respect of their ministry and Christian discipleship, and are accounted for by the Church in respect of their deployment and the support they require for their ministry. Standing order 740(1)(a) provides that [i]n this relationship they accept a common discipline of stationing and collegially exercise pastoral responsibility for the Church. Stationing is a critical part of the management of the Church. It is the formal act by which a minister is assigned to particular duties. Section 20 of the Deed of Union requires the Conference annually to station ministers and probationers, although by section 29 they may be stationed between Conferences by the current President of the Conference. The standing orders make detailed provision for the process by which a minister is stationed. The first stage is an invitation from a Circuit, which is issued by the Circuit Invitation Committee, on the proposal of the Stewards: see standing order 540. The next stage is that current invitations issued by the Circuits are reported to the Stationing Committee of the Conference under standing order 782 once a year by an appointed date. This body then makes recommendations to the Representative Session of the next Conference. It is the Conference which makes the final decision: see standing order 322. Standing order 700(1) provides that [m]inisters are ordained to a life-long presbyteral ministry of word, sacrament and pastoral responsibility in the Church of God which they fulfil in various capacities and to a varying extent throughout their lives. It is clear that the life-long character of the ministry is more than just an aspiration. A minister can cease to be in full connexion only in limited circumstances, none of which is wholly dependent on his or her wishes. Under standing order 760, he or she may send a notice of resignation to the President of the Conference, but it is up to the President, advised by a special committee, to decide whether to accept it. Otherwise, a minister may cease to be in full connexion if a disciplinary charge is brought and a Disciplinary Committee exercises its power under standing order 1134 to decide that he or she shall cease to be a minister... in full connexion. It should be noted that the disciplinary scheme is the same for ministers and lay members, so far as the distinction is meaningful in a church in which the ministry is not a distinct order or class. Standing order 1100(3)(ii) provides that there should be no difference in principle between ordained and lay people in the way in which complaints against them are dealt with. For as long as a minister remains in full connexion he or she must be stationed, save in two cases. The first is that one of the exceptions in standing order 774 applies, i.e. the minister receives a discretionary exemption from the Ministerial Session of the Conference, or is required to be without appointment by the Stationing Committee on the ground that no appointment can be found. The second is that they are permitted by the Ministerial Session of the Conference to become supernumeraries (i.e. retire) under standing order 790 on account of their age, length of service or ill-health or on compassionate grounds. Retirement is, however, a relative term. Even supernumerary ministers are required under standing order 792 to continue to exercise their ministry as he or she is able. All ministers in full connexion who are not permitted to be without appointment under one of these provisions, are defined by section 1 of the Deed of Union as being in the active work. Section 80 of the standing orders provides for the support and maintenance of ministers. Under standing order 801, all ministers in active work and all stationed probationers are entitled to a stipend throughout their ministry, including periods of unlimited duration when they may be unable to perform their duties on account of illness or injury. In addition, they are entitled under standing order 803 to a manse to serve as a home and as a base for their ministry. Neither the stipend nor the manse are regarded by the Methodist Church as the consideration for the services of its ministers. They regard them as a method of providing the material support to the minister without which he or she could not serve God. In the Churchs view, the sale of a ministers services in a labour market would be objectionable, as being incompatible with the spiritual character of their ministry. If the arrangements governing the ministry described in the Deed of Union and the standing orders are a contract between the minister in that capacity and the Methodist Church, then it seems to me inevitable that they must be classified as a contract of employment. But that only increases the difficulty of regarding them as a contract at all. Three points seem to me to be cumulatively decisive. First, the manner in which a minister is engaged is incapable of being analysed in terms of contractual formation. Neither the admission of a minister to full connexion nor his or her ordination are themselves contracts. Thereafter, the ministers duties are not consensual. They depend on the unilateral decisions of the Conference. Secondly, the stipend and the manse are due to the minister by virtue only of his or her admission into full connexion and ordination. While he or she remains in full connexion and in the active life, these benefits continue even in the event of sickness or injury, unless he or she is given leave of absence or retires. In addition to the stipend and the manse, the minister has certain procedural rights derived from the disciplinary scheme of the Deed of Union and the standing orders, which determine the manner in which he or she may be suspended or removed from ministerial duties. But the disciplinary scheme is the same for all members of the Church whether they are ministers or ordinary lay members. Third, the relationship between the minister and the Church is not terminable except by the decision of the Conference or its Stationing Committee or a disciplinary committee. There is no unilateral right to resign, even on notice. I conclude that the ministry described in these instruments is a vocation, by which candidates submit themselves to the discipline of the Church for life. Unless some special arrangement is made with a particular minister, the rights and duties of ministers arise, as it seems to me, entirely from their status in the constitution of the Church and not from any contract. Ms Prestons ministry Conscious of the difficulties posed by the Deed of Union and the standing orders, Mr Bowers QC (who appeared for Ms Preston) founded his case mainly on the particular circumstances in which his client came to be stationed at the Redruth Circuit. These, he suggested, did amount to a special arrangement with his client, analogous to the one which was held to be contractual by the majority in Percy. The facts are that Ms Preston was initially stationed by the Conference as a probationer minister in Taunton Circuit in September 2001. She was admitted to full connexion by the 2003 Conference and thereupon ordained. She was then stationed as a full minister by the same Conference at the Taunton Circuit where she had been working as a probationer for the past two years. In November 2005, she was invited by the Invitation Committee of the Redruth Circuit to become a Superintendent Minister there. A Superintendent Minister is the senior minister of a circuit with a number of other ministers. The Redruth Circuit Steward wrote to her on 19 November 2005 confirming the invitation in the following terms: Following our telephone conversation last Monday, I can confirm the invitation made by the Redruth Methodist Circuit to offer you the position of Superintendent Minister commencing September 2006 for a period of five years. On 22 November, Ms Preston replied: Many thanks for your letter officially inviting me to serve as Superintendant Minister in the Redruth Circuit from September 2006. I write to confirm my acceptance of the invitation and express my thanks to the invitation committee. In other contexts, an exchange of letters like this one might well have given rise to a contract. The difficulty here is that the exchange occurred within the framework of the standing orders, from which it is clear that it was only part of a much longer procedure. Under the standing orders, the circuits have no power to make an appointment. The circuits invitation is no more than a proposal to the Conference Stationing Committee that they should recommend the candidate to the Conference for stationing in their circuit. While every effort is made to meet the preferences of both circuits and ministers, the decision is reserved to the Conference. It may be delegated only to the President of the Conference, and then only if the appointment has to be made between Conferences. The relevant relationship is between the minister and the Conference, which may move him or her from one circuit to another even before the end of the period for which the circuit invited the candidate to serve. There is no fresh relationship with each invitation or even with each appointment. It follows that Ms Preston was serving as a minister at Redruth not pursuant to the five-year relationship envisaged in the exchange of letters, but pursuant to the life-long relationship into which she had already entered two years before the exchange of letters, when she was ordained. The nature of that relationship was wholly dependent on the Deed of Union and standing orders under which she took that step. It makes no difference to this analysis that Ms Preston was appointed as a Superintendant Minister at Redruth. That was simply the role for which she was stationed by the Conference. The decisions of the Employment Appeal Tribunal and the Court of Appeal The Employment Appeal Tribunal and the Court of Appeal considered that Ms Preston was an employee, essentially because a Methodist minister served under arrangements of a kind which, in the words of Lord Nicholls in Percy, at para 24, on their face are to be expected to give rise to legally binding obligations. This was because they provided for the ministers duties, remuneration, accommodation, and the like. It is somewhat unclear at what stage and by virtue of what acts the parties entered into the contract of employment which they discerned. The Employment Appeal Tribunal appears to have thought that the contract was made by the offer and acceptance of a Church post for a specified period when Ms Preston was invited to serve in the Redruth Circuit: [2011] ICR 819. The Court of Appeal endorsed their conclusion generally, without giving specific attention to this aspect of the matter: [2012] QB 735. This conclusion gives rise to three principal difficulties. First, if it is correct, it would mean that almost any arrangements for the service of a minister of religion would be contractual unless the minister was a non-stipendiary volunteer. Secondly, the analysis which makes the circuits invitation and its acceptance into a contract is not consistent with the function of the invitation under the standing orders. The difficulty of identifying any acts by which the contract can be said to have been made is symptomatic of a broader problem of fitting the supposed contract within the scheme of the Churchs constitution, which the courts below have not really addressed. Third, and fundamentally, the conclusion of the courts below brought them up against the difficulty that Lord Nicholls, at para 23, apparently endorsed the decision in Parfitt, in which the facts were indistinguishable from those of the present case and the terms of the Deed of Union and standing orders were in all relevant respects the same. They surmounted this difficulty by subjecting the speeches to a minute analysis, what Maurice Kay LJ in the Court of Appeal called the fine toothcomb treatment. From this, they concluded that Lord Nicholls observations about Parfitt were inconsistent with his own test and with the speeches of those who agreed with him, and might therefore properly be disregarded. Underhill J, delivering the judgment of the Employment Appeal Tribunal, thought that he might have been describing only the historic position, but acknowledged that that is not what he appeared to be saying. In my view both courts below over-analysed the decision in Percy, and paid insufficient attention to the Deed of Union and the standing orders which were the foundation of Ms Prestons relationship with the Methodist Church. The question whether an arrangement is a legally binding contract depends on the intentions of the parties. The mere fact that the arrangement includes the payment of a stipend, the provision of accommodation and recognised duties to be performed by the minister, does not without more resolve the issue. The question is whether the parties intended these benefits and burdens of the ministry to be the subject of a legally binding agreement between them. The decision in Percy is authority for the proposition that the spiritual character of the ministry did not give rise to a presumption against the contractual intention. But the majority did not suggest that the spiritual character of the ministry was irrelevant. It was a significant part of the background against which the overt arrangements governing the service of ministers must be interpreted. Nor did they suggest that the only material which might be relevant for deciding whether the arrangements were contractual were the statements marking the ministers engagement, although it so happened that there was no other significant material in Ms Percys case. Part of the vice of the earlier authorities was that many of them proceeded by way of abstract categorisation of ministers of religion generally. The correct approach is to examine the rules and practices of the particular church and any special arrangements made with the particular minister. What Lord Nicholls was saying was that the arrangements, properly examined, might well prove to be inconsistent with contractual intention, even though there was no presumption to that effect. He cited the arrangements governing the service of Methodist ministers considered in Parfitt as an example of this, mainly for the reasons given in that case by Dillon LJ. These were, essentially, the lifelong commitment of the minister, the exclusion of any right of unilateral resignation and the characterisation of the stipend as maintenance and support. There is nothing inconsistent between his view on these points and the more general statements of principle appearing in his speech and in the speeches of those who agreed with him. Conclusion I would allow the appeal and restore the order of the Employment Tribunal dismissing Ms Prestons claim. Careful written arguments were presented to us on the question whether, and if so on what basis, a minister could enforce a claim to a stipend and to the occupation of a manse in the absence of a contract. I am inclined to think, with Lord Templeman in Davies v Presbyterian Church of Wales [1986] 1 WLR 328, that the answer to that question is that these benefits are enforceable as part of the trusts of the Churchs property, but I should prefer to leave that question to a case in which it arises and in which fuller material is available for resolving it. For the reasons given by Lord Sumption, I too would allow the appeal and restore the order of the Employment Tribunal. We were urged by the respondent to recognise the true nature of her relationship with the Church in the modern sense indicated by Lord Nicholls in Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28, paras 25 and 26. I have no difficulty with that proposition so far as it goes, or with the points that Lady Hale makes that we can approach the issue with an open mind and without the distractions of a presumption either one way or the other: see paras 35 and 45. Although section 2, clause 4 of the Deed of Union declares that Christs ministers in the Church are stewards in the household of God and shepherd of his flock and the standing orders build on that principle, this does not mean that they cannot be in the employment of those who decide how their ministry should be put to the service of the church: Baroness Hale of Richmond in Percy, para 146. But it does not solve the problem which the respondent faces in this case, due to the fact that she did not have the benefit of an express contract of employment with the Church, whether written or oral, and to the absence of clear grounds for holding that a contract of employment can be implied. Much of the argument in Percy was directed to the question whether the matters which Ms Percy wished to raise were matters spiritual within the meaning of section 3 and Article IV of the Declaratory Articles annexed to the Church of Scotland Act 1921. Section 3 provides that nothing in that Act shall affect or prejudice the jurisdiction of the civil courts in relation to a matter of a civil nature. But the effect of Article IV is that the civil authority has no right of interference in the proceedings and judgments of the Church in the sphere of its spiritual government and jurisdiction. So it was necessary for the appellate committee to satisfy itself that the exercise of the exclusive jurisdiction of the Church in spiritual matters did not extend to the question whether Ms Percys relationship with the Church was one of employment for the purposes of the Sex Discrimination Act 1975. The Church accepted the principle of equal treatment, but claimed exclusive jurisdiction to deal with Ms Percys claim that she had been wronged by the Churchs failure to apply that principle to her. Her claim failed in the Court of Session on the ground that her agreement with the Board was for her to perform duties which were, in their very essence, spiritual: 2001 SC 757, para 11, per Lord President Rodger. In para 14 he said that the formality of the documents did not disclose an intention to create relationships under the civil law. Rather, it reflected the serious way in which the Church regulated matters falling within the spiritual sphere. But, as Lord Nicholls explained, by any ordinary understanding of the expression matters spiritual, if the Church authorities enter into a contract of employment with one of its ministers, the exercise of statutory rights attached to the contract would not be regarded as a spiritual matter: [2006] 2 AC 28, para 40; see also paras 132, 133. So the exercise of the exclusive jurisdiction of the Church in spiritual matters did not extend to a claim by persons employed within the meaning of section 82(1) of the 1975 Act that they had been unlawfully discriminated against. The spiritual character of Ms Percys ministry was, therefore, part of the background to her case. But, once it had been decided that the question was a civil and not a spiritual matter, the question was simply whether the employment arrangements which plainly existed between Ms Percy and the Board were intended to have legal effect so that it could be held that a contract existed. The spiritual background had no part to play in that assessment. As Lord Nicholls said in para 25, there seemed to be no cogent reason for drawing a distinction between a post whose duties were primarily religious and a post within the church that was not so. In this case, however, the question is whether there were any arrangements of an employment nature at all. One cannot simply ignore the Churchs doctrinal reasons for regarding such arrangements as unnecessary. On the contrary, they provide an essential part of the factual background. They explain why the situation in which the respondent found herself was as it was. In finding that there was no contract, the court is not ignoring the modern approach to these matters. What it cannot ignore is the fact that, because of the way the Church organises its own affairs, the basis for the respondents rights and duties is to be found in the constitutional provisions of the Church and not in any arrangement of the kind that could be said to amount to a contract. The issue in this case concerns the essential character of the relationship between a Minister in full connexion with the Methodist Church who holds a particular appointment within the Church and the governing body of the Church. Is it a relationship which gives rise to legal rights and duties on both sides? If so, what are those rights and duties? And are they to be characterised as a contract of employment? If they are, it is not possible to contract out of the rights conferred by the Employment Rights Act 1996: section 203. Just as there is nothing in the relevant documentation which says that the relationship in this case was a contract of employment, there is nothing which says that it is not. We can approach the issue with an open mind. Until the decision of the House of Lords Percy v Board of National Mission of the Church of Scotland [2005] UKHL 73, [2006] 2 AC 28, such questions were clouded by two matters. The first was an assumption that because a minister is called upon to serve her God in a particular way, there cannot be a contract between the minister and her Church. But the relationship between a minister of religion and her Church, which is a temporal one, is not to be confused with the relationship between a minister of religion and her God, which is a spiritual one. As Ms Rose QC on behalf of the Methodist Church properly accepts, there is nothing intrinsic to religious ministry which is inconsistent with there being a contract between the minister and the Church. It is normal for rabbis to be employed by a particular synagogue, for example. Priests appointed in the Church of England are now engaged on terms which expressly provide that they have the right to complain of unfair dismissal to an employment tribunal (and existing holders of a benefice may opt in to the new arrangements should they so wish). Now that this assumption has been cleared out of the way, we can get down to the real task of analysing the relationship, although of course the spiritual nature of some (but by no means all) of the duties involved is an important part of the context. The other matter which has clouded the question is that many of the posts held by ministers of religion may be characterised as offices, in the sense that the post has a permanent existence irrespective of whether there is currently an incumbent. It was for a long time the law that people who held offices in the service of the Crown did not have contracts of employment. This still applies to police officers, but it no longer applies to the generality of civil servants. But outside the service of the Crown, it has always been possible for a person to be both an office holder and an employee. Managing directors are the most obvious example. Another is University teachers, who may hold the office of (say) Professor at the same time as having a contract of employment: see Thomas v University of Bradford [1987] AC 795. Universities have a good deal in common with organised religion, being charitable bodies with a written constitution, consisting of a foundational document, the Charter, together with the Ordinances, Statutes and Regulations made under it. These have typically given rights to both staff and students, rights which were traditionally superior to those given them by the common law. The constitutional documents of the Methodist Church bear a strong resemblance to such documents. The Methodist Church as we know it today was formed from the union of the Wesleyan Methodist Church, the Primitive Methodist Church and the United Methodist Church, under a deed of union (DU) executed on 20 September 1932 pursuant to the Methodist Church Union Act 1929, which was repealed and replaced by the Methodist Church Act 1976. The Constitutional Practice of the Church is governed by the 1976 Act and some other local Acts dealing with aspects of the administration of the Church, the Deed of Union as from time to time amended by the Methodist Conference, which is the governing body of the Church, and the Standing Orders (SO) made under clause 19 of the Deed of Union. It is these documents, coupled with any correspondence between individuals in pursuance of them, which tell us whether there is a contract between a Minister and the Church and if so, what sort of a contract it is. The Church holds the doctrine of the priesthood of all believers, so Ministers are not a class apart from any other member of the Church; rather, they are people who hold special qualifications for the discharge of special duties (DU, clause 4). Candidates who are chosen and trained for the Ministry are admitted to full connexion with the Church in the representative session of the Methodist Conference, provided that the ministerial session judges that they are fit for admission and ordination (DU, clause 23(h)). If not already ordained, they shall be ordained by the laying on of hands at a service held during the same meeting (SO, 728(6)). They are ordained to a life-long presbyteral ministry of word, sacrament and pastoral responsibility . . . which they fulfil in various capacities throughout their lives (SO, 700(1)). By receiving persons into full connexion as Methodist ministers the Conference enters into a covenant relationship with them in which they are held accountable by the Church in respect of their ministry and Christian discipleship, and are accounted for by the Church in respect of their deployment and the support they require for their ministry (SO, 700(2)). They accept a common discipline of stationing (SO, 740(1)), and most have a responsibility to engage in reflective learning and development (SO, 743), and in further study, training and professional development (SO, 745). Most ministers are in active work but some are not. Those who are not may be temporarily released to go abroad (SO, 700(4), or be supernumerary (basically, those retired from active work) or without appointment (basically, those for whom no suitable station can be found), but they are expected to continue to exercise their ministry as far as they are able (SO, 700(5)). By seeking permission to become a supernumerary, a minister thereby requests an alteration in the terms and conditions of his or her service (SO, 791). Ministers in active work exercise their ministry primarily where they are stationed (SO, 700(3)). Stationing is a crucial part of the relationship between the Church and those in active work. The Conference shall annually station as ministers, deacons and probationers such persons as it thinks fit (DU, clause 20). There are several different types of station, but the principal station is in a Circuit appointment in a home District (SO, 780(1)(i)). If a Circuit needs a minister, the Circuit authorities will follow the Guidance on how to go about issuing an invitation to a particular person (SO, 541), who may indicate her willingness to accept it (Guidance on the Stationing of Ministers and Deacons, D(4)). The initial invitation is for a period of five years (SO, 543). The invitation is then forwarded to the Stationing Committee of Conference. Nothing in the Standing Orders about Circuit invitations detracts from the ultimate authority of Conference over appointments annually (SO, 549). The Stationing Committee gathers the information about the ministers seeking a station and the Circuit or other bodies seeking to make appointments, matches them and prepares a draft list of proposed stations which is then submitted to Conference (SO, 782). There is scope for amendment, but eventually a list is adopted by Conference. Ministers who are moving to a new appointment are expected to move in the first week in August and to take up their duties on 1st September (SO, 785). Part 8 of the Standing Orders is headed Terms of Service. These deal with the right to a stipend (SO, 801), the right of a Circuit minister to be provided with a manse as a base for the work of ministry as well as a home (SO, 803), membership of the pension scheme (SO, 805), parenthood (SO, 806), including antenatal care, maternity, paternity, adoption and parental leave (SO, 807 to 807D). There is a Connexional Allowances Committee which annually recommends stipends to Conference. There is a standard stipend and allowances for extra responsibilities, including those of a superintendent minister. Part 11 of the Standing Orders deals with complaints and discipline. It does apply to all members of the Church but it also deals with a wide range of complaints, only some of which will involve charges. There is a special procedure for charges of serious breaches of Church discipline, which could result in the removal of a minister from full connexion (SO, section 113). The complaints team is expected to assess whether a complaint should be dealt with under a different process (SO, 1123(5)). This includes the process for Circuits to decide that the appointment of a minister should be curtailed, which is the more appropriate process where a Circuit and a minister are at odds with one another but there has been no serious breach of church discipline (SO, 544). It also includes requesting the President to inquire into a relevant Circuit (SO, 1123(6)), which is what seems to have happened in this case. Now that we are able to concentrate on the details of the relationship, without the distractions of a presumption against legal relations or the characteristics of an office, several things become clear. The first is that it would be very odd indeed if a minister who was not paid her stipend or was threatened with summary eviction from her manse could not rely upon the terms of her appointment either to enforce the payment or to resist a possession action. Some time was devoted at the hearing to discussing what legal redress would be available to her if she could not rely upon the terms of a contract. The suggestion was that she would be a beneficiary under the trusts upon which the Church holds its property. The trouble with this is that the Church holds property under any number of different trusts, whereas the stipend is paid centrally even if the funds with which to pay it are raised locally. The body which controls her and is responsible for her remuneration and accommodation is Conference. The second is that a distinction has to be drawn between being a minister being in full connexion with the Methodist Church - and having a particular station or appointment within it. That distinction was not as fully explored in the courts below as it was with us. But once it is, in my view the position becomes clear. Admission to full connexion brings with it a life-long commitment to the Church and its ministry. Quite apart from the individual covenant which every member makes with her Church and with her God, the Methodist Church is an evangelical Church (DU, clause 4). That is why retired ministers are still expected to do what they can to further the work of the Church and no person in full connexion can give up her commitment to do this without its permission.. But that can be contrasted with the particular posts to which a minister is assigned. There is a process of assignment which begins with the invitation and acceptance at Circuit level (and no doubt something similar for other stations), continues into the matching process at Stationing Committee level, and is confirmed by Conference (although nominally an annual process, this is clearly a rubber stamp during the expected five years of a particular Circuit appointment). The assignment is to a particular post, with a particular set of duties and expectations, a particular manse and a stipend which depends (at the very least) on the level of responsibility entailed, and for a defined period of time. In any other context, that would involve a contract of employment in that post. The spiritual nature of some of the duties entailed does not necessarily entail a different conclusion. There is a spiritual component on each side of this covenant relationship. The main factor which tells against there being a contract between the minister and the Church in relation to the particular station to which the minister is assigned is that the minister has no choice. She must go where Conference stations her. The reality is almost certainly completely different (although we do not have much evidence about this): ministers do have to go where they are put, but it would be a very foolish Stationing Committee which assigned a minister to a station where she was not willing to serve. The assignment would not be specifically enforceable. But I do not think that a prior commitment to go where you are sent negates a mutual contractual relationship when you are sent and agree to go to a particular place. Yet this is the main reason for denying a contractual relationship in this case. Everything about this arrangement looks contractual, as did everything about the relationship in the Percy case. It was a very specific arrangement for a particular post, at a particular time, with a particular manse and a particular stipend, and with a particular set of responsibilities. It was an arrangement negotiated at local level but made at national level. The Church may well have had good reasons to be troubled about the respondents performance. But the allegation is that, instead of addressing those directly, they reorganised the Circuits so as, in effect, to make any investigation of whether or not those complaints were justified unnecessary, thus depriving the respondent of her post by organising it out of existence, without any of the safeguards to which she would otherwise have been entitled. In my view, the EAT and the Court of Appeal reached the right result in this case and I would dismiss this appeal.

In 2003 Ms Preston was admitted to full connexion in the Methodist Church and thereupon ordained. She was then stationed at the Taunton Circuit as a probationer and, in November 2005, she accepted an invitation to become the Superintendent Minister in the Redruth Circuit. In 2009, she brought a claim against the Church in an employment tribunal for unfair dismissal. Under section 94 of the Employment Rights Act 1996, only an employee has the right not be unfairly dismissed. Section 230 of that Act defines an employee as someone who has entered into or works under a contract of service or apprenticeship. The question at issue on this appeal is whether Ms Preston was employee. The tribunal held she was not. That decision was, however, reversed by the Employment Appeal Tribunal in a decision subsequently upheld by the Court of Appeal. The Supreme Court allows the appeal by a majority of four to one (Lady Hale dissenting), and restores the order of the Employment Tribunal dismissing Ms Prestons claim. Lord Sumption (with whom Lords Hope, Wilson and Carnwath agreed) gives the main judgment of the Court. The modern authorities made clear that the question whether a minister serves under an employment contract can no longer answered by classifying the ministers occupation by type: office or employment, spiritual or secular. Nor can it be answered by any presumption against the contractual character of the service of ministers. The primary considerations are the manner in which a minister is engaged, and the rules governing his service. This depends on the intentions of the parties and, as with all such exercises any such evidence of the parties intentions falls to be examined against the factual background. Part of that background is the fundamentally spiritual purpose of the functions of a minister of religion [10, 33]. The constitution and standing orders of the Methodist Church showed that [20]: (1) A ministers engagement is incapable of being analysed in terms of contractual formation. Neither admission to full connection nor ordination are themselves contracts. (2) A ministers duties thereafter are not consensual. They depend on the unilateral decisions of the Conference. (3) The stipend and manse are due to a minister by virtue only of admission into full connection or ordination, and while a minister remains in full connection and in active life, these benefits continue even in the event of sickness or injury. (4) The disciplinary rights under the Churchs Deed of Union, which determine the way a minister may be removed, are the same for ordinary members as well as ministers. (5) The relationship between the Church and the minister is only terminable by the Conference or its Stationing Committee or by a disciplinary committee, and there is no unilateral right to resign, even on notice. The ministry described in the constitution and standing orders is a vocation, by which candidates submit themselves to the discipline of the Church for life. Absent special arrangements with a minister, a ministers rights and duties arise from their status in the Churchs constitution and not from any contract [20, 34]. With regard to Ms Prestons ministry, the exchange of letters by which she came to be stationed at Redruth might in other contexts be viewed as contractual. However, the standing orders showed that a circuits invitation is no more than a proposal to the Conferences Stationing Committee that they should recommend the candidate to the Conference for stationing in their circuit. While every effort is made to meet the preferences of circuits and ministers, the decision is reserved to the Conference. It may be delegated only to the President of the Conference, not to the circuit, and then only if the appointment has to be made between Conferences. The relevant relationship is between the minister and the Conference, and the Conference can move a minister from one circuit to another even before the end of the period for which the circuit invited the candidate to serve. There is no fresh relationship with each invitation or with each appointment. Ms Preston was serving as a minister at Redruth not pursuant to the five year relationship envisaged in the exchange of letters, but pursuant to the life long relationship into which she had already entered when she was ordained [23]. Lady Hale (dissenting) held that it would be odd if a minister who was not paid his or her stipend or evicted from his or her manse could not rely upon his or her terms of appointment to enforce the payment or to regain possession. The suggestion that a minister would be a beneficiary under a trust upon which the Church holds its property was inconsistent with the stipend being paid centrally and the Church holding property under numerous different trusts. The Conference controls a ministers remuneration and accommodation. There is a distinction between being a minister and having a particular appointment within it. A minister is assigned to a particular post for a defined period with particular duties, a particular manse and a stipend dependent on the level of responsibility. In any other context, such a post would involve a contract of employment. A prior (non enforceable) commitment to go where you are assigned does not negate a mutual contractual relationship when you are assigned and agree to go to a particular place [48].

The Leasehold Reform Act 1967 is on its face a statute about houses, not commercial buildings. The buildings with which we are concerned were originally designed and used as houses, but at the relevant date were used entirely for commercial purposes, one for offices, the other (in the judges words) as a self catering hotel. In both cases the courts below felt constrained to hold that they were houses within the meaning of the 1967 Act, with the consequence that the lessees were entitled to enfranchise, that is, to acquire the freeholds compulsorily from their lessors on the terms fixed by the Act. In the Court of Appeal [2010] EWCA Civ 748; [2010] 1 WLR 2317 Lord Neuberger of Abbotsbury MR regretted this result. He saw it as the probably unintended consequence of amendments made by the Commonhold and Leasehold Reform Act 2002, removing the previous residence requirements. However, he felt bound to apply his view of the relevant provisions as they stood after those amendments, rather than to decide what the legislature would have said if it had fully appreciated the consequences (para 57). From the material we have been shown, he was clearly right to think that his interpretation did not reflect Parliaments intentions. The thinking behind the 2002 legislation is apparent from the preceding Draft Bill and Consultation Paper Commonhold and Leasehold Reform (Cm 4843), published by the Lord Chancellor in 2000. It included proposals for the introduction of an entirely new form of tenure, known as Commonhold, and for amendment of the existing provisions relating to leases of flats (under the Leasehold Reform, Housing and Urban Development Act 1993) and of houses (under the 1967 Act). The first paragraph of the Introduction leaves no doubt that its purpose was to address perceived flaws in the residential leasehold system (p 107), not in the leasehold system more generally. In relation to flats, the governments view was that the residence tests under the 1993 Act were too restrictive, for example, in excluding someone subletting a flat, or occupying a flat as a second home. The residence requirement would therefore be abolished; but, to restrict the scope for short term speculative gains, it would be replaced by a rule requiring the qualifying tenant to have held the lease for at least two years (pp 155 6). A similar approach was proposed for leases of houses under the 1967 Act: This would bring the residence test for houses in line with the proposals for flats. It would allow long leaseholders of second homes to benefit and would also enable leaseholders who lease houses through a company to enfranchise. Furthermore, as in the case of flats, it would restrict the scope for short term speculative gains (p 189). There is no evidence then or thereafter of any ministerial or parliamentary intention to extend the scope of the Act more generally, or in particular to confer statutory rights on lessees of buildings used for purely non residential purposes. Although the 1967 Act like the 1993 Act is in a sense expropriatory, in that it confers rights on lessees to acquire rights compulsorily from their lessors, this has been held not to give rise to any interpretative presumption in favour of the latter. As Millett LJ said of the 1993 Act: It would, in my opinion, be wrong to disregard the fact that, while the Act may to some extent be regarded as expropriatory of the landlord's interest, nevertheless it was passed for the benefit of tenants. It is the duty of the court to construe the 1993 Act fairly and with a view, if possible, to making it effective to confer on tenants those advantages which Parliament must have intended them to enjoy. (Cadogan v McGirk [1996] 4 All ER 643, 648) By the same token, the court should avoid as far as possible an interpretation which has the effect of conferring rights going beyond those which Parliament intended. Statutory definition Section 2(1) defines house in the following terms: 'house' includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; and (a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate 'houses', though the building as a whole may be; and (b) where a building is divided vertically the building as a whole is not a 'house' though any of the units into which it is divided may be. In the present cases, nothing turns directly on the qualifications introduced by the word notwithstanding (which I shall refer to as the proviso). We are concerned with the main part of the definition, which raises two separate but overlapping questions: (i) is the building one designed or adapted for living in? (ii) is it a house reasonably so called? Both questions remain live in Hosebay; in Lexgorge the first has been conceded in favour of the lessees. The two parts of the definition are in a sense belt and braces: complementary and overlapping, but both needing to be satisfied. The first looks to the identity or function of the building based on its physical characteristics. The second ties the definition to the primary meaning of house as a single residence, as opposed to say a hostel or a block of flats; but that in turn is qualified by the specific provision relating to houses divided horizontally. Both parts need to be read in the context of a statute which is about houses as places to live in, not about houses as pieces of architecture, or features in a street scene, or names in an address book. The facts The first case (Hosebay) concerns three properties, 29, 31, and 39 Rosary Gardens, South Kensington, London SW7. They were originally built as separate houses as part of a late Victorian terrace forming the west side of Rosary Gardens. The current leases of Nos 29 and 39 were granted in 1966 for terms expiring in December 2020, subject to covenants for their use as 16 high class self contained private residential flatlets. The current lease for No 31 was granted in 1971 for a term expiring in December 2030, subject to a covenant restricting its use to that of a single family residence or a high class furnished property for accommodating not more than 20 persons. It was common ground that the current use, which had begun some time before 1981, was not in accordance with the covenants. It was unclear from the evidence when the premises had been converted to their present layout. The judge (para 83) proceeded on the basis that the conversions may well have been carried out substantially before the current leases were granted in 1966 and 1971. Although there was no evidence as to the actual purpose of the conversions, the Master of the Rolls on the balance of probabilities inferred (principally from the lack of documentation in the hands of the landlords to indicate otherwise) that they had been for the uses described in the leases (para 37). Hosebay Ltd acquired all three leases in 1996. On 23 April 2007 it served notices on its landlords under section 8 of the 1967 Act to acquire the freeholds of the three properties. Judge Marshall QC found that the three properties were at the relevant date being used together to provide short term accommodation for tourists and other visitors to London, or what she described as a self catering hotel (paras 8 and 19). Each of the three properties had been fully adapted to provide individual rooms for letting out (para 9), with the exception of two rooms in No 31, one of which was used for office and reception purposes, and the other for storage. The great majority of the rooms could be described as rooms with self catering facilities. Each room had between one and four beds, furniture, and limited storage space, cooking facilities, and small wet rooms with shower, basin and WC. Fresh bed linen and room cleaning, but no other services, were provided to those staying in the rooms. On these facts, the judge concluded that each of the three properties was physically adapted for living in even though the current use was itself too transient to qualify as such. The Court of Appeal agreed. I quote the Master of the Rolls: 33. My primary reason for that conclusion is that, in order to determine whether premises are adapted for living in, one looks at the most recent works of adaptation, and assesses objectively, whether they resulted in the property being adapted for living in 36. In this case, I consider that the effect of the most recent works of conversion to the three properties, if they were works of adaptation, adapted those properties for living in. Ignoring one or two rooms, each room in the three properties is a self contained unit of accommodation, with its own basic small shower room/WC, and its own even smaller and more basic cooking facilities. As Moore Bick LJ pointed out in argument, the rooms are entirely appropriate for letting to students on three year degree courses, and, as Mr Johnson rightly accepted, if they had been, all the rooms, and therefore the three buildings, would have been used for living in. Even if, as Mr Johnson argued and I am prepared to assume without deciding, the current use of the three properties is not for living in, that certainly does not mean that, viewed objectively, the three properties were not adapted for living in. The judge and the Court of Appeal held also that the properties were houses reasonably so called, as the Master of the Rolls explained: externally, each of the three properties has the appearance of being a relatively large town house; internally, each of the three properties has been converted so that almost every room can be used as a self contained unit for one or more individuals, with cooking and toilet facilities. I find it hard to see how the judge could be faulted for concluding that, even if each of the three properties might be called something else as well, they could each reasonably be called a house. (para 38) The other case (Lexgorge) relates to 48 Queen Anne Street, in Marylebone, London W1. It was built in the early 18th century as a house comprising five floors including basement, in a terrace of substantial houses. It was occupied for that purpose for many years until 1888, when it began to be used for commercial purposes. Coming to more recent times, planning permission was granted in December 1949 for conversion of the second and third floors into a self contained maisonette, and there is some evidence that it was implemented. However, from about 1961, all four upper floors were used as offices, and they were so used when the notice was served under the Act on 4 March 2005. The whole building was still in office use in June 2005. However, by the time of the trial in October 2009, when the judge inspected the property, the upper two floors were in use for residential purposes. The office use of the lower floors continued. The current lease was granted in 1951 for a term of 110 years. The lease described the property as a messuage or residential and professional premises, and restricted its use (subject to landlords' consent) to self contained flats or maisonettes on the upper two floors, professional offices on the first and ground floors, and in the basement storage and lavatory in connection with other parts of the demised premises. In 1978, the lease was acquired by Lexgorge Ltd. At the time of the notice the office use of all floors had become established, and therefore lawful for planning purposes, although in breach of the lease as respects the upper floors. The building is listed as a building of special architectural or historic interest (grade 2); English Heritages records describe it as a Terraced House. In this case, as already noted, it is conceded by the lessors that at the material date the premises, although used for offices, were still at least in part designed or adapted for living in. It was held by the judge (Judge Dight) and by the Court of Appeal that it was a house reasonably so called, and therefore within the definition. The Master of the Rolls said: 53. If the upper two floors of the property had been empty, I have little doubt but that the property could reasonably have been called a house, bearing in mind its external character and appearance (a classic town house in London's West End), its internal character and appearance at least on the upper two floors (which were, as I understand it, substantially as constructed), the description of the property in the lease as messuage or residential or professional premises, and, to the extent that it is relevant, the terms of the lease (restricting the use of the upper two floors to residential). I find it hard to see why the fact that the upper two floors had been used (even for many years) as offices (in contravention of the terms of the lease) should wreak such a change that the property could no longer reasonably be called a house. The authorities The first relevant case under the Act was Lake v Bennett [1970] 1 QB 663. However, I find it helpful to start from an authority in a different statutory context, Lord Denning MRs judgment in Ashbridge Investments Ltd v Minister of Housing and Local Government [1965] 1 WLR 1320. The case related to compulsory acquisition of two properties for the purpose of slum clearance under the Housing Acts. The level of compensation would vary significantly depending on whether the property was or was not a house. In the absence of a statutory definition of house, Lord Denning adopted the following formula: a building which is constructed or adapted for use as, or for the purposes of, a dwelling (p 1324). In Lake v Bennett he suggested that the draftsman of the 1967 Act definition had adopted these words, but added the limitation reasonably so called (p 670). Ashbridge itself concerned two adjoining buildings in the same terrace, which had been designated for compulsory purchase, the first (No 17) as an unfit house, the second (No 19) as a building other than a house. The buildings were very similar in appearance; both had been designed as shops with rear living rooms and living quarters above, but neither was in current use for living purposes. No 17, which had undergone no structural alterations, was held by the Minister to have retained its identity as a dwelling. No 19, by contrast, was held to have lost its identity as a dwelling, following structural alterations involving the extension of the shop into the rear living area (p 1325). The latter decision was described in the Court of Appeal as extraordinary (p 1327, per Harman LJ), but that did not undermine the validity of the decision in relation to No 17. Lord Dennings formula can be seen as his way of expressing the present identity (in the inspectors words), or perhaps function, of a building not currently in use, defined by reference to the purpose of its construction or subsequent adaptation. Lake v Bennett itself concerned a three storey house, the ground floor of which had been converted into a shop. There was no issue as to the first part of the definition, as it was clear that the building was at least in part adapted for use for living in. The Court of Appeal held that notwithstanding the commercial element, the building as a whole was a house reasonably so called and was therefore within the scope of the 1967 Act. The reasoning of Lake v Bennett was adopted and extended by the House of Lords in Tandon v Trustees of Spurgeons Homes [1982] AC 755, which remains the leading House of Lords authority on this part of the definition. Unfortunately the reasoning of the single majority speech of Lord Roskill, although carrying the unqualified support of Lord Scarman and Lord Bridge, is not without difficulty. Further, the case needs to be read in its factual context. As in Lake v Bennett, the main problem was to reconcile the statutory recognition (under the proviso) that the building need not be solely designed or adapted for living in, with the need for the building as a whole to be a house reasonably so called. This is not a problem in the present cases. At the end of his judgment Lord Roskill referred with approval to Lake v Bennett, which he welcomed as stating a principle and [confining] the question of fact to a narrow area , and from which he deduced the following three propositions of law : (1) as long as a building of mixed use can reasonably be called a house, it is within the statutory meaning of house, even though it may also reasonably be called something else; (2) it is a question of law whether it is reasonable to call a building a house; (3) if the building is designed or adapted for living in, by which, as is plain from section 1(1) of the Act of 1967, is meant designed or adapted for occupation as a residence, only exceptional circumstances, which I find it hard to envisage, would justify a judge in holding that it could not reasonably be called a house. They would have to be such that nobody could reasonably call the building a house. (p 767) Although expressed as propositions of law, they do not in my view offer much assistance as such, at least beyond the facts of the case. The first proposition was in terms directed to a building in mixed residential and commercial use. Such a building could plausibly be described either as a house with a shop below, or as a shop with a dwelling above. That was enough to show that it could reasonably be called a house. That proposition cannot in my view be applied more generally. The mere fact that a building may be described as a house for other purposes (for example, in the English Heritage list) is not enough to bring it within this part of the definition. The second proposition, that what is a house reasonably so called is a question of law, is not easy to extract from the judgments in Lake v Bennett. Lord Denning described the judges negative answer to that question as an inference from primary facts depending in part at least on the true interpretation of the words reasonably so called, and one with which the court could interfere if it was a conclusion to which the judge could not reasonably come ([1970] 1 QB 663, 671). Salmon LJ described it as partly a question of fact but also a question of law as to the true construction of the meaning of the word house in this Act. (p 672). Elsewhere Lord Roskill himself had accepted counsels submission that the definition of house was a mixed question of fact and law ([1982] AC 755, 765), but he saw it as one in which, in the interests of consistency, the question of fact should be confined within narrow limits: p 767. More modern authorities have leant against such conceptual debates (see, for example, Lord Hoffmann, in Moyna v Secretary of State for Work and Pensions [2003] UKHL 44, [2003] 1 WLR 1929, paras 25 27). In any event, none of these formulations throws much light on how the question should be answered in any particular case. The third proposition is again in terms hard to extract from Lake v Bennett. Lord Denning described the case before them as a typical case, but thought that difficult issues might arise in other cases: [1970] 1 QB 663, 671. He did not suggest that, in such cases, an affirmative answer to the first question would lead to any presumption in respect of the second. The examples given in the judgments (pp 671, 672) of cases that would not satisfy the second test a block of flats, the Ritz Hotel or Rowton House (a working mens hostel) can hardly be described as exceptional. Rather than a free standing proposition of law, deduced from Lake v Bennett, this proposition seems more an expression of Lord Roskills own view as to the correct policy approach to a building of the kind before him, which was adapted at least in part for occupation as a residence. It may be that the real difference between the majority and the minority in Tandon came down to one of policy. Lord Wilberforce (in the minority) thought it clear that the building could not reasonably be called a house; it was rather a mixed unit consisting in part of a shop and in part of a dwelling, and as such was not within the policy of the Act: [1982] AC 755, 760. For Lord Roskill (in the majority) Parliament had made clear that such mixed units were not in principle to be excluded. He noted that such small shops combined with living accommodation were a familiar feature of towns and villages across the country (p 766). In this he echoed the view of Salmon LJ (Lake v Bennett [1970] 1 QB 663, 672), who thought that a tenant living above a shop in the circumstances of that case was obviously the sort of person to whom the legislature intended to give security of tenure. Such policy considerations do not assist the lessees in this case. For the reasons already given, policy if anything points the other way. Of more significance for present purposes is the relative lack of weight given by the majority to the appearance of the buildings as a factor in answering the second question. Lord Fraser of Tullybelton (in the minority) had regarded appearance as the main element in the character of a building: [1982] AC 755, 762. He attached particular weight to the photograph which showed a shop in a row of shops, in contrast with the converted house in Lake v Bennett; to him it was obvious from the photograph that the building could not reasonably be called a house (p 763). That, however, was not the approach of the majority. Lord Roskill had apparently accepted that in determining the character of the building for these purposes, physical appearance could be relevant, as also its history and the terms of the lease (p 766). However, those factors played no detectable part in the final decision. The determinative points were that the proportion of residential use, even if only 25%, was substantial (p 766), and that a tenant occupying such a building as his residence was within what was perceived to be the scope of the protection intended by Parliament (p 766). Those factors were enough to bring the case within the principle established by Lake v Bennett notwithstanding the differences from that case in relation to the original design and physical appearance of the respective buildings. The only other relevant authority at the highest level is the much more recent decision in Boss Holdings Ltd v Grosvenor West End Properties Ltd [2008] UKHL 5; [2008] 1 WLR 289. The House of Lords held that a building previously designed or adapted for living in remained a house, even though at the material time it was not only disused but in parts stripped out to the basic structural shell (para 24). In contrast to Tandon this case was concerned solely with the first question. It was not in dispute that if that question was answered in the affirmative the building qualified as a house reasonably so called. As will be seen I do not regard the case as determinative in either of the present appeals. However, some comment is desirable, in view of the change of view of Lord Neuberger on one aspect of his leading speech. He had proposed the following grammatical analysis of the relevant words of the statutory definition: 18. In my judgment, the words designed or adapted for living in, as a matter of ordinary English, require one first to consider the property as it was initially built: for what purpose was it originally designed? That is the natural meaning of the word designed, which is a past participle. One then goes on to consider whether work has subsequently been done to the property so that the original design has been changed: has it been adapted for another purpose, and if so what purpose? When asking either question, one is ultimately concerned to decide whether the purpose for which the property has been designed or adapted, was for living in. 19. The notion that the word designed in section 2(1) is concerned with the past is reinforced by the later words in the same section was or is [not] solely designed or adapted. The use of the past tense is striking in a section which contains a number of verbs only in the present tense. In my judgment, the expression is to be construed distributively: thus, the word was governs designed, and the word is governs adapted. The present tense is appropriate for adapted because, as Lord Scott of Foscote pointed out in argument, there could have been several successive adaptations, and it is only the most recent which is relevant. The word was is in any event difficult to reconcile with Grosvenor's case (as accepted by the judge and the Court of Appeal), as it would be irrelevant whether the property could have been fit for residential occupation at any time in the past. Later in his speech, he considered the implications of this analysis for other cases, including how the definition should apply to a property which had been designed for living in, but had subsequently been adapted to another use. As a matter of literal language, he thought such a property would be within the definition. If, as appeared, designed and adapted were alternative qualifying requirements, a building which had been designed as a house would remain within the definition in spite of its adaptation to other uses. Such a conclusion, he accepted, might seem surprising, but it could have been more readily understandable when taken with the residence requirement in the original Act (para 26). It was on this latter point that, as Master of the Rolls in the present case, he has had second thoughts. It had been put directly in issue by the tenants in Hosebay, who argued (as they have in this court) that because the buildings were originally designed for living in, that was sufficient to bring them within the definition, regardless of any subsequent adaptation to other uses. On reconsideration, Lord Neuberger felt bound to reject the argument. Although the literalist meaning of designed or adapted was that either alternative would do, that was not by any means what the words naturally convey. His earlier thoughts had been based on an over literalist approach to the language used by the legislature: [2010] 1 WLR 2317, para 31. In his revised view, a building originally designed for living in, but adapted for some other purpose, was not designed or adapted for living in, unless subsequently re adapted for that purpose (para 40). I have no doubt, with respect, that Lord Neubergers second thoughts on this point were correct. Context and common sense argue strongly against a definition turning principally on historic design, if that has long since been superseded by adaptation to some other use. However, that approach may also have implications for the earlier part of his grammatical analysis in Boss Holdings (see para 31 above). The expression was or is designed or adapted is, as he says, to be read distributively: that is, as equivalent to was designed or is adapted. While that may support the view that the word designed is directed to the past, the same cannot be said of the expression is adapted. Nor (pace Lord Scott) is that grammatically the same as was most recently adapted. Logically that expression can only be taken as directed to the present state of the building. Once it is accepted that a literalist approach to the definition is inappropriate, I find myself drawn back to a reading which accords more closely to what I have suggested was in Lord Dennings mind in Ashbridge [1965] 1 WLR 1320, that is a simple way of defining the present identity or function of a building as a house, by reference to its current physical character, whether derived from its original design or from subsequent adaptation. Furthermore, I would not give any special weight in that context to the word adapted. In ordinary language it means no more than made suitable. It is true that the word is applied to the building, rather than its contents, so that a mere change of furniture is not enough. However, the word does not imply any particular degree of structural change. Where a building is in active and settled use for a particular purpose, the likelihood is that it has undergone at least some physical adaptation to make it suitable for that purpose. That in most cases can be taken as the use for which it is currently adapted, and in most cases it will be unnecessary to look further. That interpretation does not of course call into question the actual decision in Boss Holdings. The basis of the decision, as I understand it, was that the upper floors, which had been designed or last adapted for residential purposes, and had not been put to any other use, had not lost their identity as such, merely because at the material time they were disused and dilapidated. It was enough that the building was partially adapted for living in, and it was unnecessary to look beyond that: see [2008] 1 WLR 289, para 25. That reasoning cannot be extended to a building in which the residential use has not merely ceased, but has been wholly replaced by a new, non residential use. Finally I must refer to Prospect Estates Ltd v Grosvenor Estate Belgravia [2008] EWCA Civ 1281; [2009] 1 WLR 1313. The Court of Appeal held that a building which had been designed and built as a house, but which for many years had been used almost wholly as offices, was not a house within the definition. As in Tandon the case turned ultimately only on the second question, whether the building was a house reasonably so called. The facts were much closer to those of the present cases. The leading judgment was given by Mummery LJ. The building had been built in the 1850s as a house for residential occupation, but since 1958 it had been used substantially (88.5% of the floorspace) for office purposes. Under the most recent lease granted in 1972 the use was restricted to offices on all floors, except the top floor which was limited to use as a flat for a director or senior employee of a business occupying the offices below. It was accepted by the lessors that there had been insufficient works of adaptation to conclude that it had ceased to be designed for living in (Mummery LJ, para 9), but they challenged the judges conclusion that it was a house reasonably so called. That had been based, as the overwhelmingly significant factor, on the fact that the building was designed for living in and that its structure and appearance have (largely) remained unchanged (para 8). Mummery LJ held that the judge had given too much weight to those factors, and insufficient weight to the prescriptive terms of the lease, the actual uses of the building and the relative proportions of the mixed use at the relevant date (para 20). Goldring LJ, agreeing, found it impossible to accept that a building can reasonably be called a house although no one can lawfully live in virtually 90% of it (para 23). In the present case, the Master of the Rolls ([2010] 1 WLR 2317, para 43) questioned the weight placed on that case by counsel for the present appellants in Hosebay: There can be no doubt that the external and internal appearance of the properties are highly relevant factors on this issue, and it is clear from the Prospect Estates case [2009] 1 WLR 1313 that, in so far as user is significant, the permitted use under the lease is a relevant factor. In those circumstances, even assuming that actual use is also relevant, I find it hard to see how it can be sensibly said that each of the three properties cannot reasonably [be] called a house. To hold otherwise would involve concluding that the actual user, even where it involved people occupying virtually all the rooms in the building for relaxing, sleeping, cooking and washing, albeit on a short term basis, trumped all the other factors to the extent of disabling the building from being able to be a house . reasonably so called. He also doubted the decisive weight placed by Goldring LJ on the terms of the lease. He thought the thrust of the judgments in Lake v Bennett [1970] 1 QB 663 and the opinion of Lord Roskill in Tandon [1982] AC 755 was that the question was to be determined essentially by reference to [the buildings] external and internal physical character and appearance (para 46). He was not convinced that it would occur to most people, asked whether a building could reasonably be called a house, to ask about the permitted use under any lease, or that they would be influenced if told what the permitted use was (para 47). He suggested that the ratio of Prospect Estates should be treated as being limited to a case where residential use is either prohibited entirely, or restricted to a very small part of the building, and the actual use accords with that (para 49). As will be apparent from my earlier analysis of Tandon, I cannot agree that Lord Roskill regarded external and internal physical character and appearance as the determining factors. I agree with the Master of the Rolls that the terms of the lease as such should not have been treated as the major factor. However, in so far as Mummery LJ treated the use of the building, rather than its physical appearance, as determinative, his approach was in my view entirely consistent with the reasoning of the majority in Tandon as I have explained it. I consider that Prospect Estates [2009] 1 WLR 1313 was rightly decided, and that the ratio need not be limited in the way the Master of the Rolls proposed. The present cases which I can deal with briefly. I would allow the appeal in Hosebay on the grounds that a building which is wholly used as a self catering hotel is not a house reasonably so called within the meaning of this statute. As appears from para 38 of their judgment (quoted above), the contrary view of the Court of Appeal turned on two main points: (i) the external appearance of each property as a town house; (ii) the internal conversion to self contained units, with cooking and toilet facilities. I find it difficult with respect to see the relevance of the second point to this part of the definition, which only arises in relation to a building which is in some sense adapted for living in under the first part. It is not suggested that the building is divided in a way which comes within the proviso. The first point, for the reasons given in my analysis of Tandon, should not have been given determinative weight. The fact that the buildings might look like houses, and might be referred to as houses for some purposes, is not in my view sufficient to displace the fact that their use was entirely commercial. I turn to consider the application of these principles to the present appeals, In these circumstances I find it unnecessary to reach a concluded view on the application of the first part of the definition in this appeal. I agree with the appellants (and the judge) that living in means something more settled than staying in; and that the present use does not qualify as such. There is more room for debate, however, whether the premises are to be taken as adapted solely for such use, to the exclusion of longer term occupation. The Court of Appeal, as I understand it, were influenced not only by the consideration that the rooms might be used (for example) for longer term student occupation, but also that their current layout probably dates from earlier adaptation to the uses described in the leases, which could well be regarded as sufficiently settled to qualify as living in. One of the values of the two part definition is that it becomes unnecessary to resolve such narrow factual issues. In Lexgorge I would also allow the appeal on similar grounds. A building wholly used for offices, whatever its original design or current appearance, is not a house reasonably so called. The fact that it was designed as a house, and is still described as a house for many purposes, including in architectural histories, is beside the point. In this case no issue arises under the first part of the definition. It is unnecessary to consider whether the concession in that respect was rightly made, although it is possible that it was based on a wider interpretation of Boss Holdings [2008] 1 WLR 289 than my own analysis would have supported. In summary, I would allow both appeals, and hold that neither building was on the relevant date a house within the meaning of section 2 of the 1967 Act.

These two joined appeals raise the question of whether a property used wholly for commercial purposes may qualify as a house for the purposes of legislation governing the right to leasehold enfranchisement (i.e. the right of a lessee in certain circumstances compulsorily to acquire the freehold of the building from his/her landlord) [1]. In the Hosebay case, the respondents owned the leases of three buildings in central London which had originally been built as separate houses as part of a late Victorian terrace [10]. The leases restricted the use of the houses to use for residential purposes, but on the date when the respondent served notices on the appellants under s.8 of the Leasehold Reform Act 1967 (the 1967 Act) seeking compulsorily to acquire the freehold of the buildings, they were being used wholly as a self catering hotel [10,13]. In the Lexgorge case, the respondent owned the lease of a five storey building in central London also originally built as a house [16]. The terms of the lease restricted the use of the upper two floors of the building to residential flats [18]. On the date when the respondent served a notice under s.8 of the 1967 Act, the building was used wholly for office purposes [17]. The building was listed as a building of special architectural or historic interest, and English Heritages records described it as a terraced house [18]. The issue in both appeals was whether the properties constituted houses within the meaning of s.2(1) of the 1967 Act. This raised two separate but overlapping questions: (i) Were the buildings designed or adapted for living in? (ii) Were they houses reasonably so called? [8] Both elements of the definition were disputed by the appellants in the Hosebay case, but only second element of the definition was disputed by the appellant in the Lexgorge case [8]. The judge at first instance in each case concluded that the buildings were houses for the purposes the 1967 Act, and the Court of Appeal reluctantly upheld those decisions [1,2]. The Supreme Court unanimously allows both appeals. It holds that neither property constituted a house for the purposes of the 1967 Act on the date when the relevant statutory notice was served. The judgment of the Court is given by Lord Carnwath. The decision of the Court of Appeal was not the result intended by Parliament when, pursuant to the Commonhold and Leasehold Reform Act 2002, it removed the requirements of residence from the 1967 Act [3 5]. As far as possible, an interpretation of the 1967 Act which has the effect of conferring rights on lessees going beyond those which Parliament intended to confer should be avoided [6]. The first element of the definition of house in s.2(1) of the 1967 Act (i.e. designed or adapted for living in) looks to the identity or function of the building based on its physical characteristics, the second element (i.e. a house reasonably so called) ties the definition to the primary meaning of house as a single residence, as opposed to, for example, a hostel or a block of flats [9]. Both parts of the definition need to be read in the context of a statute which is about houses as places to live in, not about houses as pieces of architecture or features in a street scene [9]. As to the first part of the definition of house in s.2(1) of the 1967 Act, the words designed and adapted do not constitute alternative qualifying requirements, despite the literal meaning of the provision [34]. Context and common sense argue strongly against a definition turning principally on historic design, if that has long been superseded by adaptation to some other use [34]. The words is adapted in s.2(1) refer to the present state of the building and do not imply any particular degree of structural change [34,35]. As to the second part of the definition, the external and internal physical appearance of a building should not be treated as determinative of whether it is a house reasonably so called , nor should the terms of the lease be treated as a major factor [41]. The buildings in the Hosebay case were not houses reasonably so called [43]. The fact that they might look like houses and might be referred to as houses for some purposes was not sufficient to displace the fact that their use was entirely commercial [43]. It was unnecessary to decide whether the buildings were designed or adapted for living in [44]. The building in the Lexgorge case was also not a house reasonably so called because it was used wholly for office purposes [45]. The fact that it was designed as a house and is still described as a house for many purposes (such as architectural histories) was beside the point [45].

This appeal concerns the scope and content of the right to education under Article 2 of Protocol 1 (A2P1) of the European Convention on Human Rights (the Convention). A was born on 3 July 1989 and is now 21 years of age. At the time the relevant events occurred, between January 2002 and July 2003, he was 12 and 13 years of age. His problems during that period can be summarised in this way. He was autistic and had serious learning difficulties and a severe communication disorder. His behaviour was challenging. He suffered from epilepsy, frequently having 10 to 15 short epileptic fits a day despite medication. He was doubly incontinent, had no concept of danger and required constant supervision. He was dependant upon adults for every need. A claims damages against the respondent (Essex) as the local authority with statutory responsibility to assess and provide for his educational and social welfare needs. He does not claim damages for breach of a duty of care owed to him at common law or for breach of statutory duty. Nor is his claim otherwise based upon any public law duty imposed on Essex by the Education Act 1996. His claim is put solely under the Human Rights Act 1998 (the HRA). In short, his case is that in the period between January 2002 and July 2003, when he lived at home with his parents and three siblings, he was not at school and he was not provided with any significant education of any other kind such that he was deprived of even the minimum education to which he was entitled under A2P1. It is submitted that Essex acted in a way that was incompatible with his rights under A2P1 and thus unlawful under section 6(1) of the HRA; that he is a victim and entitled to bring proceedings against Essex under section 7(1); and that it would be just and appropriate for the court to award damages against Essex under section 8(1) because such an award is necessary to afford him just satisfaction within the meaning of section 8(3). A issued these proceedings on 5 May 2005. Essex sought an order that the claim be dismissed under CPR 24 on the basis that it had no real prospect of success. On 13 July 2007 Field J (the judge) granted the application and dismissed the claim: see [2007] EWHC 1652 (QB). He also refused an application on behalf of A to extend the period of one year provided for in section 7(5) of the HRA. He refused permission to appeal. Three similar applications were heard by the judge in other actions at the same time. He reached the same conclusion in each. None of those is the subject of this appeal. A appealed to the Court of Appeal with the permission of that court. The appeal was dismissed on 16 April 2008: see [2008] EWCA Civ 364. The court upheld the decision of the judge that the claim had no real prospect of success and did not consider the limitation point. The only substantive judgment was given by Sedley LJ, with whom Ward and Hughes LJJ agreed. The Court of Appeal refused permission to appeal to this court. This court subsequently granted permission to appeal. The statutory framework A2P1 is entitled Right to education and provides: No person shall be denied the right to education. In the exercise of any functions which it assumes in relation to education and to teaching, the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions. The critical part of A2P1 is the first sentence. As case is in essence, as Sedley LJ put it at para 3, that, for want of even minimally suitable provision for his education, he was shut out of the state system for 18 or 19 months. The principal domestic statute is the Education Act 1996 (the 1996 Act), which replaced and re enacted the Education Act 1993, which in turn replaced and re enacted the Education Act 1981. The relevant legislation governing special educational needs at the relevant time is summarised in paras 3 to 12 of the judgment of the judge, which (with very slight variations) are set out in the Appendix to this judgment. As appears in the Appendix, in As case Essex were subject to two particular statutory duties: first, a duty under section 324 to make and maintain a Statement of Special Educational Needs and to arrange that the special educational provisions specified in it were made for him; and secondly, a duty under section 19 to make arrangements for the provision of suitable education either at school or otherwise than at school on the basis that, by reason of his illness, exclusion from school or otherwise, he would not receive suitable education unless such arrangements were made for him. However, as I have already said, A does not rely upon a breach of these duties as giving him a cause of action against Essex. He relies only upon A2P1. The legal principles The critical provision is the first sentence of A2P1, which provides that No person shall be denied the right to education. It is not in dispute that that provision confers a right upon everyone. The right has been considered in a number of cases. The most important of them is A v Head Teacher and Governors of Lord Grey School [2006] UKHL 14, [2006] 2 AC 363. The issue in the Lord Grey School case was not the same as the issue here because the facts were very different. The dispute was between the claimant and the school which had excluded him. While excluded, the pupil was regularly provided with school work and was offered a place at a pupil referral unit which was rejected. He remained out of education for 10 months. By a majority, Baroness Hale dissenting, the House of Lords rejected the submission that there was a breach of A2P1 on the ground that an alternative package of education was on offer and not taken up. Those differences do not in my view affect the legal principles set out by Lord Bingham at para 24 as follows: The Strasbourg jurisprudence, summarised above in paras 11 13, makes clear how article 2 should be interpreted. The underlying premise of the article was that all existing member states of the Council of Europe had, and all future member states would have, an established system of state education. It was intended to guarantee fair and non discriminatory access to that system by those within the jurisdiction of the respective states. The fundamental importance of education in a modern democratic state was recognised to require no less. But the guarantee is, in comparison with most other Convention guarantees, a weak one, and deliberately so. There is no right to education of a particular kind or quality, other than that prevailing in the state. There is no Convention guarantee of compliance with domestic law. There is no Convention guarantee of education at or by a particular institution. There is no Convention objection to the expulsion of a pupil from an educational institution on disciplinary grounds, unless (in the ordinary way) there is no alternative source of state education open to the pupil (as in Eren v Turkey (Application No 60856/00) (unreported) 7 February 2006). The test, as always under the Convention, is a highly pragmatic one, to be applied to the specific facts of the case: have the authorities of the state acted so as to deny to a pupil effective access to such educational facilities as the state provides for such pupils? In this case, attention must be focused on the school, as the only public authority the respondent sued, and (for reasons already given) on the period from 7 June 2001 to 20 January 2002. Lord Bingham then said that the question, therefore, was whether, between those dates, the school denied the pupil effective access to such educational facilities as the country provides. There was some discussion in the course of the argument as to the significance, if any, of the fact that, unique among the Articles in the Convention, the right contained in the first sentence of A2P1 is expressed in negative terms. It was submitted on behalf of A that there is no significance in the negative formulation and that the right to education is an important positive right. By contrast, it was submitted on behalf of Essex that the negative formulation was deliberate and underlines the fact that the Convention does not contain an absolute right to education and, in particular, unlike some other human rights instruments, does not confer social and economic rights. In my opinion, the point is clearly and sufficiently addressed by Lord Bingham in para 24 of the Lord Grey School case quoted above and there is no need to embellish his analysis. It is an approach which is entirely consistent with that of the European Court of Human Rights (ECtHR), namely that any limitations on the right must not curtail it to such an extent as to impair its very essence and deprive it of its effectiveness: Leyla ahin v Turkey (2005) 44 EHRR 99, at para 154. Some reliance was placed upon the recent decision of the Grand Chamber of the ECtHR in Oru v Croatia (Application no 15766/03) delivered on 16 March 2010. As I read it, the case does not advance the above analysis. It was concerned with the schooling arrangements of Roma children in Croatia. It recognised that Croatia had a margin of appreciation but held (at para 182) that the State must have sufficient regard to the special needs of Roma children as members of a disadvantaged group. It held (at paras 185 and 186) that Croatia had violated their rights under Article 14 taken together with A2P1 and that it was not necessary to examine the complaint under A2P1 standing alone. In short, in my opinion Lord Binghams para 24 sets out the relevant legal principles for present purposes. Save to a very limited extent, I do not think that it is necessary for me to refer further to the Strasbourg cases because Lord Bingham has summarised them and his summary is set out by Lord Kerr. It was suggested in the course of the argument that there was a difference or, as Sedley LJ put it at his para 13, a possible tension between the analysis of Lord Bingham and that of Lord Hoffmann in the Lord Grey School case. I do not accept that that is so. Lord Nicholls and Lord Scott both agreed that the appeal should be allowed for the reasons given by Lord Bingham. Baroness Hale took a different view of the facts of the case but, as I read her speech, she did not disagree with the principles stated by Lord Bingham. What then of Lord Hoffmann? He concluded his judgment by saying that for the reasons he had given and those given by Lord Bingham he would allow the appeal. So the ground for a suggestion that they were applying different principles does not seem to be fertile. With the possible exception of two points, it appears to me that Lord Hoffmann was saying precisely the same as Lord Bingham. Thus he stressed at para 57 that the question to ask is whether the pupil has been denied the basic minimum of education under the domestic system. He had said both in para 56 and earlier in para 57 that there is no right to be educated in a particular institution. He was principally concerned to reject the submission that, if a failure to provide education was a breach of domestic law, it was necessarily a breach of A2P1: see paras 60 and 61. The two points are these. In para 56 he said that everyone is no doubt entitled to be educated to a minimum standard and referred to R (Holub) v Secretary of State for the Home Department [2001] 1 WLR 1359 at 1367. And in para 61 he rejected the suggestion that it was legitimate to promote the public law duty of the school, not giving rise to a private law action, to a duty under section 6 of the HRA remediable by a claim in damages. He added that the question to ask was whether there was a denial of a Convention right, which would have required a systemic failure of the educational system which resulted in the respondent not having access to a minimum level of education. As I see it, the critical point in all the speeches is that under A2P1 of the Convention a person is not entitled to some minimum level of education judged by some objective standard and without regard to the system in the particular State. The question is that posed by Lord Bingham, namely whether the pupil was denied effective access to such educational facilities as the country provides. As Lord Hoffmann stressed, that is not the same question as the question whether the relevant authority was in breach of a duty imposed by domestic law, as for example by failing, in breach of section 324 of the 1996 Act, to comply with educational provisions set out in an SSEN. The question is then whether the pupil has been denied effective access to the system in place. That question will only be answered in the affirmative where his right to education has been so reduced as to impair its very essence and deprive it of its effectiveness. Lord Hoffmanns reference to systemic failure must be viewed in the context of the education system provided. So too must the decision and reasoning in Holub, in which Tuckey LJ gave the judgment of the court, which also comprised Schiemann LJ and Sir Swinton Thomas. The question in the part of the appeal in Holub which is relevant for present purposes was whether the A2P1 rights of the applicants daughter would be infringed if she were returned to Poland and thus not educated in the United Kingdom. The court held that they would not. In the course of the judgment Tuckey LJ referred (at para 23) to X v UK (1980) 23 DR 228, where the Commission accepted the interpretation of the ECtHR in the Belgian Linguistic Case (No 2) (1968) 1 EHRR 252 at 281 283, which it summarised as follows: The negative formulation of the right indicates that the contracting parties do not recognise such a right to education as would require them to establish at their own expense, or to subsidise, education of any particular type or at any particular level. There never was, nor is now, therefore any question of requiring each state to establish a system (of general and official education) but merely of guaranteeing to persons subject to the jurisdiction of the contracting parties the right, in principle, to avail themselves of the means of instruction existing at a given time. The Convention lays down no specific obligations concerning the extent of those means and the manner of their organisation or subsidisation. The first sentence of article 2 of the Protocol consequently guarantees in the first place, the right of access to educational institutions existing at a given time. This right requires, however, regulation by the state regulation which may vary in time and place according to the needs and resources of the community and of individuals. It goes without saying that such regulation must never injure the substance of the right to education nor conflict with other rights enshrined in the Convention. Those principles are the same as those summarised in para 24 of Lord Binghams speech in the Lord Grey School case. However in Holub at paras 24 and 25 the Court of Appeal accepted a submission made by counsel that if the right was to have any content it should at least encompass the provision of an effective education. In doing so, it accepted the following passages from what is now the third edition (2009) of Human Rights Law and Practice by Lester, Pannick and Herberg: 4.20.4 The general right to education comprises four separate rights (none of which is absolute): (i) a right of access to such educational establishments as exist; (ii) a right to an effective (but not the most effective possible) education; (iii) a right to official recognition of academic qualifications. 4.20.6 As regards the right to an effective education, for the right to education to be meaningful the quality of the education must reach a minimum standard. It is important to note that the authors are careful to say in that summary that none of the rights identified is absolute. Much of As case is designed to support a submission that his right to a minimum standard of education is absolute. I would not accept that submission. I do not think that the court in Holub can have meant that there must be a minimum standard of education regardless of the system in place in a State Party to the Convention. Such a conclusion would be inconsistent with the reasoning in the Belgian Linguistic Case (No 2). The minimum standard must have regard to the system in place. The examples given by Lester, Pannick and Herberg seem to me to make that clear. Thus the note to para 4.20.4(ii) simply says that in Eren v Turkey (2006) 44 EHRR 619 the annulment of a students examination results, which resulted in his being denied access to university, was held to violate A2P1. And in the note to para 4.20.6 the authors refer to para 5 of the Belgian Linguistic Case (No 2): the right to education would be meaningless if it did not imply in favour of its beneficiaries the right to be educated in the national language or in one of the national languages, as the case may be. Reference was also made to Cyprus v Turkey (2001) 11 BHRC 45, where it was held that the abolition by the Turkish authorities of the Greek language secondary schools in Northern Cyprus constituted a breach of A2P1. In my opinion none of those cases is of assistance in the present case. The correct approach is that identified by Lord Bingham at para 24 of the Lord Grey School Case quoted above and the question for decision which he formulated, as applied to this case, is whether A was denied effective access to such educational facilities as the State provides for such pupils. A was only denied effective access if he was deprived of the very essence of the right. As I see it, the answer to that question must be given by reference to all the relevant circumstances of the case. In the instant case, as appears below, A could no longer continue at the school he was at. Given his very considerable problems, it was necessary for a proper analysis to be carried out as to what was best for him. It is inevitable that in a case of this kind there may be delays and interim measures may be difficult to put in place. As Lord Bingham put it, the test, as always under the Convention, is a pragmatic one to be applied to the specific facts of the case. Was A deprived of effective access to such educational facilities as the State provided for pupils like him? One of the real problems is that there are very few, if any, pupils like A and it seems to me that that is a factor which can fairly be taken into account before it is held that Essex infringed As rights under the Convention. It is important to appreciate, however, that the question in this appeal is not whether Essex infringed As rights but whether he has a real prospect of establishing such an infringement at a trial. It is also important to appreciate that that is not the same question as the question whether it is arguable that Essex could have done better or that Essex was in some way at fault in not doing more than it did in the interim period between January 2002 and July 2003, when a residential school was ultimately found to suit As needs. I recognise that there has been no trial of As allegations but, if the position is that, taking the facts at their highest from As point of view, his case that Essex infringed his rights under A2P1 cannot succeed, it follows that his claim has no real prospect of success and the appeal must be dismissed. The facts The relevant facts were set out by the judge and, as so set out, were incorporated into Sedley LJs judgment. The parties agreed a Statement of Facts and Issues. However, shortly before the hearing of this appeal those advising A produced further factual material upon which reliance was placed. Some of that material was disclosed to them recently and it was submitted that the court should have regard to it because it will or would be available at a trial and the question for the court at this stage is simply whether A has a real prospect of success at a trial. This position is far from satisfactory because the whole purpose of an agreed statement of facts and issues is that the parties should prepare and reach agreement on such a document well in advance of the appeal. However, I propose to have regard to the agreed statement as supplemented by the further material. Essex maintains a community special day school for children with severe learning difficulties called LS School (LS). Pursuant to section 324 of the 1996 Act, Essex made and maintained an SSEN for A and named LS in Part IV. It was originally issued on 1 July 1993. A accordingly began his statutory schooling at LS in 1995. In about May 2001, when he was approaching his 12th birthday his behaviour started to deteriorate. As part of the Annual Review process the school reported concerns about the unpredictability of his behaviour and asked Essex for more resources to cope with him. Concerns were expressed by the school, not only about his behaviour, but also about its ability to manage it. In a letter dated 17 September 2001, after observing A at school at lunch time, a consultant paediatrician said that he required two adults to hold him but that, in spite of that, he would lash out and bite or scratch those assisting him. The teacher had told him that he was running out of ideas as to how to control A. In November 2001 the SSEN was amended but LS remained the school named in Part IV. As behaviour deteriorated further and on 17 January 2002 As parents were invited to and attended a meeting with representatives both from the school and from Essex and with his community consultant paediatrician to discuss his placement. His parents were advised that the school could not cope with him and that his continued presence in class posed a risk to the health and safety of other pupils. The school felt that his underlying medical and psychiatric problems needed to be addressed satisfactorily before he would be able to benefit from the education it provided. His parents were asked not to bring him into school for health and safety reasons until an urgent medical assessment in a hospital setting was carried out. They agreed, no doubt because they felt that they had no alternative. The position was confirmed in a letter from the head teacher dated 18 January in which he assured As parents that the medical, educational and social services would continue to work together to find a solution for A. The letter expressly said that he would be in contact with them to arrange some home support while A was off school. The intention of the professionals, including the school, was for A to receive an urgent medical assessment at the National Centre for Young People with Epilepsy (NCYPE) at St Piers. However, it became clear that it might be quite some time before a residential assessment could be arranged and carried out. As mother expressed concern as to how she would be able to cope. On 13 February a meeting took place to discuss the position at which a large number of professionals was present and As situation was discussed in detail. It was reported to the meeting by Dr Yousif, who was a psychiatrist with the Learning Disability Outreach Team, that A had been accepted for an initial assessment at Chalfont or St Piers but that they were awaiting a date for it. The half day assessment would be the basis for a residential medical assessment which would last 5 days and which it was hoped would take place in April or May. In the event it did not take place until mid September 2002. Under the heading Ongoing Support, the note of the meeting says that the school was sending work for his parents to do with A. It also says that LS would if possible arrange for A to continue to access speech and language therapy sessions at school, with transport to be provided, and that both his class teacher and his social worker would keep in regular contact with his mother. Family care workers were said to be unable to provide respite support due to the risks involved. An occupational therapy assessment of As room had begun with the aim of providing equipment and padding in order to protect him from self harming. The initial medical assessment took place on 28 February. A consultant paediatric neurologist and an epilepsy nurse from the NCYPE made an outreach visit. Their report shows just how disturbed and difficult to cope with A was. They recommended a 5 day interdisciplinary assessment at St Piers, the aims of which would be to monitor seizure types and frequency, to advise on medication, to assess behaviour and its possible relationship with epilepsy, to assess communication, to assess mobility and self help skills and to advise on future educational placement. It can thus be seen that A required assistance from a number of different disciplines and it was sought to arrive at a cross disciplinary solution to his problems. On 4 March the head teacher of LS wrote to As parents inviting them to bring him in to the school for speech therapy sessions beginning that week. Speech therapy sessions started on or about 20 March on a weekly basis. At first they were 30 minute sessions, which for a time were reduced to 15 to 20 minutes in about May. On 20 March there was a further meeting at which very many professionals were present. The minutes show that many aspects of As problems were discussed. Concerns were expressed about As deteriorating behaviour and how his family could cope, especially since at least two residential homes had indicated that they could not provide him with respite care. Attempts continued to arrange a medical assessment. On 14 April As solicitors, the Childrens Legal Centre, were instructed by his parents on his behalf. On 1 May a further meeting of professionals, described as a Partnership Meeting, was held at LS. It was attended by representatives of Essexs social services and education departments, staff from LS, As parents and others. As parents had been given two boxes of activities touch books and bubbles for them to do with A at home. However, As mother said that A had become bored after a few sessions. It was noted at the meeting that the boxes of activities were not acceptable education. Although LS reiterated their reasons for A not being in school, namely health and safety, it was acknowledged that As educational needs were not being met. However, Essexs education department stated that there was no home tutor who was qualified to meet As needs. LS was asked to consider whether there was any possibility of providing A with a teacher for home tuition or offering some tuition at school. The head teacher said that he would discuss with the class teacher and teaching assistants how best to do that. However, although that might meet As short term needs, his long term educational needs also required to be addressed. Alison Stanford of the Special Educational Needs and Psychology Service (SENAPS) stressed the need to await the recommendations of the residential medical assessment. By the time of that meeting, joint funding for a 5 day residential assessment, which would cost over 10,000 had been agreed between Essex Learning Services (Education), Essex Social Services and Essex Health Authority. Unfortunately the assessment could not take place until September 2002. By this stage A was exhibiting increasingly challenging behaviour. Although his parents tried hard to support him at home, they were struggling to cope with his behaviour. In a report dated 18 June 2002 a community nurse specialist with the Children with Disability Team stated that As behaviour was due to (i) lack of sensory stimulation, boredom and lack of meaningful occupation; (ii) inability to clearly communicate his needs and be clearly understood by those around him. She said that she had therefore referred A to an occupational therapist and social services had agreed to pay for some of the equipment which the occupational therapist had recommended. She had also referred A to his doctor who had prescribed him with the anti psychotic drug Chlorpromazine with a view to calming his behaviour in the hope of reintegrating into activities, including attendance at school. A review of As SSEN on 19 June noted that A had been out of school since January but did not seek to amend the SSEN to name a different school. In a letter to As parents written somewhat later, on 31 July, referring to the SSEN, a member of the Special Educational Needs and Psychology Service, Clare Taylor, said that the school had developed a structured programme for A pending the outcome of his assessment at St Piers. She added that the Social Services Outreach Team would also continue to support the school in meeting As needs. Her letter was to some extent at least based on the information in a letter to her dated 21 June that there were a significant number of planned session times for A during the remainder of the summer term. They were for 45 minutes every Tuesday except for 9 July, which was Sports Day, an hour every Wednesday and 15 minutes on two Thursdays. These were all activity sessions while his parents attended Makaton sessions. A also attended planned sessions in September and October 2002. The residential medical assessment took place at St Piers from 8 to 13 September. A was observed by an inter disciplinary team of professionals. An oral report was made on 13 September which, as noted at the time, included the following: It was felt by St Piers that As epilepsy is not the overriding issue of concern at present. The overriding concern noted was that due to As exclusion from school since February, he has spent many months at home, and his educational, emotional, social, psychological and developmental needs are clearly not being met. It was noted that although Mr and Mrs W clearly try hard to support A at home, that it is very difficult for them to meet As comprehensive needs. This has resulted in A being hugely under stimulated, and him being effectively sensorily deprived. This may be a causative factor for his self injurious behaviour. St Piers stated how it is common for self injury to be seen in children with little sensory stimulation. It was recorded that there was a notable improvement in As behaviour during the 5 days and that his main disability was his learning disability as opposed to his autism. The note then included the following: In light of the above, it was clearly indicated that As needs are not currently being met. The conclusion from St Piers [is] that it is strongly in As best interests to be placed in a 24 hour residential school placement. This would be at a school specifically for children with high levels of challenging behaviour such as A. It is noted that by attending such a placement for an initial period of 1 year, this may have the eventual benefit of A becoming more easy for his parents to support at home in the long term. A would also be able to return home at weekends and during school holidays. St Piers recognised that Mr and Mrs W are very unhappy with this recommendation, however they stressed that they feel this placement would be strongly in As best interest. The very detailed report from St Piers followed. It included reports from each discipline including (but not limited to) an Education Report. A was diagnosed with generalised seizure disorder; severe learning disability and challenging behaviour (aggressive and self injurious behaviour). The report recommended a residential programme offering the benefit of a 24 hour curriculum with consistent behavioural strategies at a specialist school with expertise in managing very challenging behaviours in order to meet As complex needs. He needed 1:1 (sometimes 2:1) supervision and support at all times. He was described as a very sad and anxious young man who had been under stimulated. His behavioural problems were said to be long standing and to have deteriorated over the previous 15 months during which he had become more impulsive and aggressive to other people, kicking, biting and throwing objects at people, leading to his exclusion from school. His self harming behaviour had also intensified by the time of the St Piers assessment, characterised by slapping himself constantly or head banging. His parents reported that his self harming behaviour had deteriorated, the timing of this being shortly after he began his treatment with Chlorpromazine. At the time of the assessment his parents had to hold his hands constantly while he was awake to stop him from self harming. The report described As difficulties as a combination of his severe learning difficulties, severely challenging behaviour and his epilepsy, as well as a result of poor management of his needs. It recommended that Chlorpromazine be discontinued and that the dose of another drug be increased. It also made a number of other recommendations and concluded in this way: A would benefit from a residential placement where an individual programme can be provided to enhance his play, social interaction, and self help skills and to improve sensory integration. A residential programme would offer the benefit of a 24 hour curriculum, with consistent behavioural strategies. In view of the severity of As current behaviour difficulties, placement should initially be at a specialist school with expertise in managing very challenging behaviours. Whilst the team understand Mr and Mrs Ws reservations with regard to a residential placement and their commitment to him within the family, it is felt that this would offer the most positive way forward in developing As skills at this critical time as a teenager and in transition to adulthood. As A grows, there is a real concern that behaviours could lead to a serious management problem if not addressed urgently. As can be seen, As parents were initially opposed to a residential solution. However, they accepted the recommendations and in October 2002 discussions took place as to inter departmental funding for a placement for A and on 10 October joint funding between education and social services was approved. Between 16 October and 17 December Essex wrote to no fewer than 26 schools seeking a placement for A, but without success. At a meeting in 2003 professionals acknowledged that his home environment was having a negative impact on As behaviour because he remained under stimulated and bored and needed to be supported appropriately. In January 2003 A started to receive respite sessions three mornings a week at the Limbourne Centre, where he was also offered tuition. He continued to attend sessions at LS as before. On 10 January As solicitors wrote to Essex threatening a possible application for judicial review on the grounds that A was not receiving an education in accordance with his SSEN. On 9 February Kisimul School offered a place for A at a cost of 223,589 per annum which Essex agreed to pay. As parents accepted the offer on 9 April. However the placement did not become available until 28 July 2003 because of construction work at the school. In the meantime at a meeting of professionals on 23 May it was reported that the sessions at LS were not very positive, in that As behaviour had deteriorated in relation to self injury. The school felt that it was minding him rather than teaching him. The specialist teacher at Limbourne Centre also reported that he was finding it difficult to engage A at any meaningful level. As behaviour at home continued to deteriorate. On 30 May As solicitors sent Essex a letter before action in contemplation of an application for judicial review alleging that the educational provision for A was inadequate along with a demand that an appropriate residential placement be provided immediately and that there be an urgent re assessment of As special educational needs. They also applied for funding from the Legal Services Commission (LSC), which was refused on the basis that an appropriate school place was going to be available from the end of July 2003. A took up his place at Kisimul School, where he progressed well. His overall health and behaviour improved. He received an appropriate education and his self harming very much reduced. He left the school in the summer of 2008 and now lives in residential therapeutic accommodation in Halstead in Essex. He will need to spend the rest of his life in this kind of accommodation. He is able to visit his family regularly. It can thus be seen that, although there were on any view unfortunate delays between January 2002 and July 2003, his education thereafter has been a considerable success, albeit at a cost of over 1.2 million to the public purse. As case in this appeal In para 4 of the amended particulars of claim A accepts that his education at LS satisfied his rights under A2P1. Although para 46(i) seems to say something different, As case and the oral argument in this appeal focused on the period after 17 January 2002. A further accepts that his education at Kisimul School satisfied his rights under A2P1 as from 28 July 2003. His essential case is that his rights were infringed between 18 January 2002 and 28 July 2003. In short his case is that he received no effective or meaningful education during that time. In this appeal it was submitted on his behalf that he has a real prospect of establishing that case at a trial and that his case should be permitted to go to trial, especially since it has been accepted by the LSC as a test case. As case may be summarised in this way. As was recognised by many professionals at the time, A did not receive even a minimum education for 18 or 19 months. He was provided only with some educational toys, once weekly speech and language therapy sessions from March 2002, some activity sessions at LS during May and June 2002 and from 25 June 2002 some planned classroom time at LS. Then, in and after October 2002 some further activities were made available as set out above. Whether taken individually or together this did not amount to even a minimum education and denied him, or deprived him of, the very essence of his right to education under A2P1. Discussion I would not accept that the case should go to trial because it is said to be a test case. Where the relevant principles of law are developing, it is sometimes appropriate to determine those principles (especially where the issue is whether a duty of care is owed) only after ascertaining the facts at a trial; but this is not such a case. The relevant principles seem to me to be reasonably clear and the question is simply whether A has a real prospect of success. That question can be answered by taking the facts most favourable to A and deciding whether, on that footing, A could succeed at a trial. Was A deprived of an effective education during the relevant period? I recognise that if that question is asked by reference only to what he was provided with between January 2002 and July 2003, it could be answered in the affirmative. However, as Lord Bingham observed, the correct approach is the pragmatic one adopted by the ECtHR. It was recognised on all sides that what A required was a satisfactory long term solution for his various problems. It was also recognised at an early stage that, in the absence of a considerable improvement in his condition and behaviour, A could not go back to LS. I agree with the judge and the Court of Appeal that any other view is unarguable. All the professionals agreed that A required a multi disciplinary assessment and that the only place where that could be done was St Piers. Unfortunately it was not possible for that assessment to be carried out until September 2002. When it was carried out, it took account of the many and varied problems that beset A and indeed his family. Thereafter Essex agreed to the recommendations reasonably quickly, notwithstanding the very considerable costs involved. There were then further delays because, although Essex wrote to some 26 schools, none of them was able to assist until Kisimul School made its offer on 9 February 2003. There was then a yet further delay because of construction work at the school and it was not until July that A was able to take up his place. Thereafter all was well. It seems to me that, however As case is put on the facts, in terms of long term education for A the only realistic solution was a residential placement of the kind recommended in September 2002 and achieved in 2003. That was surely the critical step so far as A was concerned and in that regard it cannot be said that he was deprived of it. A long term solution was required and it is surely not surprising that it took some time to achieve. The solution was moreover strikingly successful. Since it was a long term solution that was required, the logic of the case for A is that he needed a residential solution of the kind recommended by St Piers immediately and that, since he did not receive it for some 18 months, the failure to provide it was an infringement of his rights under A2P1. If that was what was required and if he had an absolute right to it under the Convention, it follows that he was deprived of it between January 2002 and July 2003, that whether Essex was in any way at fault or open to criticism is irrelevant and that his rights under A2P1 were infringed because his right to education was in fact denied. The case was not, however, put in that way on behalf of A, no doubt because such a case would be far from the pragmatic approach adopted by the ECtHR. As Lord Clyde put it in Brown v Stott [2003] 1 AC 681 at 727 F, it must be remembered that the Convention is dealing with the realities of life and it is not to be applied in ways which run counter to reason and common sense. As case focuses therefore, not on what was really required, namely the residential placement eventually recommended by St Piers and arranged and paid for by Essex, but on the interim measures. The fact that it was not said that there was an infringement of As A2P1 right to a long term solution immediately shows that the correct approach is to consider the problem in the context of the system available and to recognise that solutions take time and money to put in place, sometimes a considerable amount of both time and money, as here. In my opinion the same approach should be adopted to the interim measures. All the professionals were working towards the long term solution, hoping that it would be achieved sooner rather than later. Some interim measures were put in place in the period from January 2002 to July 2003. It is said with apparent force that A was deprived of any meaningful education in that period and, indeed, that As condition and behaviour deteriorated during that period. Moreover, the account of the facts set out above shows that, at any rate on As case, there were grounds for criticism of Essex in not providing more than they did. The question is not, however, whether Essex were at fault but whether the limitations on As education impaired the very essence of his right to education and deprived his right of effectiveness or, as Lord Bingham put it, whether he was deprived of effective access to education. The answer to that question (or those questions) must have regard to the fact that the problems were correctly seen to be short term problems pending a multi disciplinary 5 day examination of A in order to achieve a long term solution. Even taking As case at its highest, considerable efforts were made by LS and others to assist A in various ways. They were not limited to the somewhat ineffectual provision of two boxes of educational toys, which were described as not acceptable education. Essex were faced with considerable difficulties. There was no home tutor who was available to meet As needs. Residential respite care was not available but A was referred to an occupational therapist. However the school did provide a significant number of speech therapy and activity sessions described above. I nevertheless recognise that As condition and behaviour deteriorated in the period before the assessment in September 2002 and that the St Piers report referred to poor management of his needs. Lord Kerr (whose judgment I have seen in draft) says that the level of As need, as disclosed in the report, finds a stark and sorry contrast with what had actually been provided for him in the preceding 9 months. I agree that that is so but the report does not identify any solution other than that A should be provided with long term residential care, which was not available before that. After delivery of the report and its acceptance by both As parents and Essex there was a further period of waiting, while Essex tried to find a school and, when they did, while construction work was carried out at the new school. During that period the activity sessions at LS continued and in January 2003 A started to receive respite sessions three mornings a week at the Limbourne Centre because his behaviour at home continued to deteriorate. He was also offered tuition there. The interim efforts made by Essex were far from perfect and it is arguable that Essex were both in breach of duty under domestic law in various ways and more generally open to criticism for not doing more than they did but, once one takes account of the fact that what was needed were interim measures pending the long term solution, I do not think that A can succeed at a trial. I agree with the Court of Appeal (and with the judge) that, as Sedley LJ put it at para 12, it is not possible to spell out of this unhappy interlude, with its undoubtedly adverse consequences for both A and his parents, either a failure of the education system or a denial of access to it. It is I think relevant to note that, although As solicitors were instructed on 14 April 2002, no legal action was taken. It was not suggested during the period between January and September 2002 that Essex were in breach of statutory duty or that they were infringing As A2P1 rights. On 10 January 2003 the solicitors threatened a possible application for judicial review on the ground that A was not receiving an education in accordance with the SSEN. Unsurprisingly no such application was made because there was no realistic prospect of A returning to LS at that time. Subsequently, on 30 May 2003 the solicitors sent the letter before action described above, which came to nothing because the LSC refused funding because a residential place was pending. So far as I am aware, no allegation was made that Essex were infringing As A2P1 rights in the interim. As I see it, viewed in the round, A was not arguably denied the very essence of his right to education. On the contrary, he was ultimately provided with high quality education at very considerable cost. I do not accept the submission made on behalf of A that he was abandoned by the educational authorities after his parents were persuaded to withdraw him from school. On the contrary, Essex were doing their utmost to have A properly appraised and thereafter did their utmost to arrange residential care, for which they paid. While the interim measures are at least arguably open to some criticism, that is not the question and their shortcomings do not arguably amount to a denial of As right to education. In this regard I agree with the judgment of Lord Brown which I have seen in draft. I also agree with Lord Phillips on this part of the case. It follows that I would dismiss the appeal. This analysis makes it unnecessary to consider the limitation point. However, I agree that the appeal should be dismissed on that ground too, for the reasons given by Lord Kerr. APPENDIX Summary of the 1996 Act as set out by the judge: 3. By section 312 a child has special educational needs if he has a learning difficulty which calls for special educational provision to be made for him. A child has a learning difficulty if, amongst other things, he has a significantly greater difficulty in learning than the majority of children of his age or he has a disability which either prevents or hinders him from making use of educational facilities of a kind generally provided for children of his age in schools within the area of the local education authority. 4. By section 321 of the Act a local authority is to exercise its powers with a view to securing that of children for whom they are responsible, they identify those who have special educational needs and for whom it is necessary for the authority to determine special educational provision. The local authority is responsible for, amongst others, children within the authority's area who either attend a school maintained by the authority or attend an independent school with fees paid for by the authority. 5. Pursuant to section 323, where the Local Education Authority (LEA) considers a child may fall within section 321, they are required to make an assessment of his needs, after having taken into account any parental representations. Under section 329, a parent may also initiate the process, by requesting an assessment under section 323. If such a request is made, the authority must comply with it if no such assessment has been made within the previous six months and it is necessary for the authority to make an assessment under section 323. Under section 329A (as inserted by section 8 of the Special Educational Needs and Disability Act 2001), the head teacher of a school may also request an assessment. 6. If as a result of an assessment under section 323 the local authority decides it is necessary for the local authority to make special educational provision for the child, then by section 324 the authority must make and maintain a Statement of Special Educational Needs (SSEN). Section 324 provides for the contents of such a statement. In particular, it must: give details of the educational needs and the provision required to meet them; specify the type of school or institution which the authority considers appropriate to meet those needs; and name any school or institution which is considered to be appropriate. The Education (Special Educational Needs) (England) (Consolidation) Regulations 2001 (SI 2001/3455) (the Regulations) prescribe in more detail the form and content of the statement. 7. The Regulations also make detailed provision for the assessment process. They specify (at regulations 7 to 11) that the authority must seek: (a) advice from the child's parent; (b) educational advice (usually from the head teacher of the child's school); (c) medical advice from the health authority; (d) advice from an educational psychologist employed by the authority; (e) advice from social services; and (f) any other advice which the authority considers appropriate for the purposes of arriving at a satisfactory assessment. The authority must also take into account any evidence submitted by or at the request of the child's parent. Once the assessment is complete, the authority must either provide the parents with a copy of a proposed statement of special educational needs (or amended statement if the child already has one) within 2 weeks, or inform them that they have decided not to make a statement or amend an existing statement within the same time period and inform the parents of their right to appeal (regulation 17). 8. If a proposed statement has been issued, there then follows an 8 week period during which the parent has the right to make representations as to the content of the Statement (Schedule 27 of the Act and regulation 17). At the end of the 8 week period, the authority must issue a complete statement unless certain defined exceptions apply. 9. Once a statement is made, the local authority has a statutory obligation to arrange that the special educational provision specified is made for the child section 324(5). The Statement must also be reviewed annually (regulation 18 of the Regulations). 10. Parents are given rights of appeal to the Special Educational Needs and Disability Tribunal (SENDIST) against decisions made by the authority see eg sections 329(2), 325(3) and 326. 11. Appeals from the SENDIST lie to the High Court on a point of law (Tribunals and Inquiries Act 1992 section 11, as amended by section 181 of the Education Act 1993): Subsequently replaced by the procedure under the Tribunals, Courts and Enforcement Act 2007. 12. By section 19, a local authority is under a duty to make arrangements for the provision of suitable education at school or otherwise than at school for those children of compulsory school age who, by reason of illness, exclusion from school or otherwise, may not for any period receive suitable education unless such arrangements are made for them. This duty arises only where it is not reasonably possible for a child to take advantage of any existing suitable schooling (R(G) v Westminster City Council [2004] EWCA Civ 45; [2004] 1 WLR 1113). LORD PHILLIPS Introduction The appellant, A, is a young man who was born on 3 July 1989. He claims that during a period of 18 months, starting in January 2002, when he was 12 years old, he was denied the right to education guaranteed by Article 2 of the First Protocol (A2P1) to the European Convention on Human Rights (the Convention). He seeks a declaration and damages under section 7(1)(a) of the Human Right Act 1998 (HRA). His claim was dismissed by Field J on 13 July 2007 under CPR Part 24 on the ground that it had no reasonable prospect of success. At the same time an application on his behalf under section 7(5)(b) of the HRA for an extension of the one year time limit for bringing such a claim on the grounds that this would be equitable was dismissed by Field J [2007] EWHC 1652 (QB). On 16 April 2008 the Court of Appeal dismissed his appeal against summary judgment and did not deal with the time bar point [2008] EWCA Civ 364. A appeals to this Court against each of the decisions against him. A is autistic and has a severe learning disability. He also has a severe communication disorder and challenging behaviour. He suffers from epilepsy, frequently having 10 15 short epileptic fits a day, despite medication. He is doubly incontinent, has no concept of danger and requires constant supervision. He is reliant on adults for his every need. Under the Education Act 1996 (the Education Act) he had, at the material time special educational needs. As claim was brought together with similar claims by three other young people with special educational needs. Their claims were also out of time. They suffered the same fate as As claim. Only A has appealed, with support from the Legal Services Commission on the basis that his claim should be treated as a test case. The National Autistic Society (NAS) has been given permission to intervene and its submissions of principle have been to the same effect as those advanced on behalf of A. The principal issues As case has been advanced by Mr Nicholas Bowen QC. His submissions were clearly set out in his written case and supported in oral argument, albeit that this ranged rather wider than his case at times. His primary contention has been that A2P1 imposes on the State an absolute obligation to provide effective education to a minimum standard for a child with special educational needs. He submits that this obligation is recognised by the Education Act and makes submissions as to how the duties under A2P1 and the Education Act have to be complied with by a local authority. The principal issues have been agreed as follows in the Statement of Facts and Issues: (i) Does Article 2 Protocol 1 guarantee a child an absolute minimum standard of education? If so, how is to be measured? (ii) If A2P1 does guarantee an absolute minimum standard of education how, in a case where a child has a statement of special educational need under EA96, and against what criteria, is an acceptable minimum to be judged? Should (as the Appellant argues) the breach contended for be judged on the same basis as the requirements of domestic law whereby an education authority is obliged to make and maintain the provision in part 3 of the statement as contained in the duty in section 324 EA96? The subsidiary issues The subsidiary issues have been agreed as follows in the Statement of Facts and Issues: (iii) Can Essex be said to have denied the Appellants right to an education under A2P1 on the facts of this case? (iv) Did Field J err in refusing to extend time for the bringing of this claim? The facts Most of the material facts in this case are not in dispute. They have been set out in detail in the judgments of Lord Clarke and Lord Kerr, and I need not repeat them. Their essence can be summarised as follows. As special needs were very demanding. By January 2002 LS, the State maintained special primary school which A attended, could no longer cope with the demands made by As behaviour. He was removed from LS to spend his days at home and ceased to receive the education that was needed to cater for his special needs. Indeed he was provided with very little support that could be described as educational at all. It took 18 months to arrange for and carry out a medical assessment of As current needs and to find a residential place for him in a special school where those needs could be met. The problem Special educational needs have been defined as a learning difficulty. A primary role of education is imparting knowledge. Ability to receive knowledge, or to learn, varies according to cognitive ability and some children are unable to keep up with their classmates. Their special educational needs may require special educational provision. But there are some barriers to learning that have nothing to do with cognitive ability. The sensory deprivation of blind or deaf children inhibit their learning in a conventional school. They also have special educational needs. A had profound learning disability, but this was exacerbated by the physical and psychiatric problems that I have described above. He was and is profoundly disabled. From the age of six it was possible to cater for his needs at LS School, a community special day school for children with severe learning difficulties. As he approached the age of 12, however, his behaviour deteriorated to the extent that the school was no longer able adequately to protect him from himself and the other pupils from him. This was the reason why he had to leave the school, rather than any cognitive inability to cope with the teaching. At this stage an assessment of As medical and psychiatric problems was necessary before any long term plans could be made for his continuing education. This involved an initial assessment, followed by a five day residential medical assessment by an interdisciplinary team of professionals. It did not prove possible to arrange for this assessment to be carried out until 8 months after his exclusion from LS. A further ten months elapsed before A could be placed in Kisimul School, a special residential school where he was able to receive the 24 hour a day supervision that he needed. He has now finished his schooling, but his needs are such that he will have to live in residential therapeutic accommodation all his life. As predicament is an extreme example of a widely experienced problem, as evidence placed before the Court by NAS has demonstrated. One child in a hundred suffers from an autism spectre disorder (ASD) of some kind. ASD is an umbrella term which covers autism, Asperger syndrome and a range of other disorders. Many of these children are successfully educated in the mainstream educational system, but many are not. Make school make sense: Autism and education: the reality for families today published by NAS in 2006 recorded at p25 that one in five children with autism have been excluded from school, 67% more than once and 16% more than ten times. 24% of excluded children are excluded permanently. NAS has placed in evidence a statement of Gillian Roberts, the Principal of the Robert Ogden School in support of the proposition that with sufficiently trained and experienced staff it is possible for schools to meet the needs of children across the autism spectrum. The Robert Ogden School is owned by NAS. It is the largest independent special school for children and young people who have been diagnosed with ASD. It currently has 105 pupils and a staff of 282. The school is residential and an Ofsted report of September 2008 commends it highly, commenting that the quality of the curriculum is outstanding because it is designed effectively to meet individual pupils needs. The evidence adduced by NAS, and the facts of this case, suggest that there are insufficient trained staff in the education system and insufficient special schools of the requisite quality and expertise to cater satisfactorily for the demands made by children with ASD. As case A2P1 provides: Right to education No person shall be denied the right to education. In the exercise of any functions which it assumes in relation to education and to teaching, the state shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions. Mr Bowens first submission was that implicit in the provision that no person shall be denied the right to education was the positive obligation on the State to provide a minimum of effective education for each individual child. Where the child had special educational needs the State had to cater for those needs to the extent necessary to achieve the minimum standard of education, otherwise the education would not be effective. Mr Bowen described this repeatedly in his printed case as an economic and social right. He submitted that this was an absolute right. Failure to provide the minimum standard of education, or delay in providing it, could not be excused on the ground of lack of resources. Mr Bowen described the case law in this area as undeveloped. He nonetheless sought to derive support for his submissions from the decision of the Strasbourg Court in the Belgian Linguistic Case (No 2) (1968) 1 EHRR 252. The applicants in that case were French speaking Belgian parents who contended that article 2 entitled their children to be educated in French. The Court observed, at p 280: 3. By the terms of the first sentence of this article, no person shall be denied the right to education. In spite of its negative formulation, this provision uses the term right and speaks of a right to education. Likewise the preamble to the Protocol specifies that the object of the Protocol lies in the collective enforcement of rights and freedoms. There is therefore no doubt that article 2 does enshrine a right. Mr Bowen relied on this passage. He also relied on the following statement, at p 281, in support of his contention that education must cater for the special educational needs of the individual child in order to be effective: 4. For the right to education to be effective, it is further necessary that, inter alia, the individual who is the beneficiary should have the possibility of drawing profit from the education received. Mr Bowen drew attention to the fact that Lord Bingham had referred to the right to effective access to educational facilities in A v Head Teacher and Governors of Lord Grey School [2006] UKHL 14; [2006] 2 AC 363 at para 24 and to the following statement in the judgment of the Court of Appeal in R (Holub) v Secretary of State for the Home Department [2001] 1 WLR 1359, 1367, at para 25, quoting from Lester & Pannick, Human Rights Law and Practice (1999), para 4.20.6: As regards the right to an effective education, for the right to education to be meaningful the quality of the education must reach a minimum standard. When these passages are read in their context they do not support the proposition that A2P1 imposes on contracting States a positive obligation to provide education that caters for the special needs of the small, if significant, portion of the population which is unable to profit from mainstream education. On the contrary the authorities assume, correctly, that all contracting States have a system of education and limit the positive obligation imposed by A2P1 to regulating education in such a way as to give access without discrimination to that system. Thus para 3 of the judgment in the Belgian Linguistic case continues, at pp 280 281: The negative formulation indicates, as is confirmed by the preparatory work, that the contracting parties do not recognise such a right to education as would require them to establish at their own expense, or to subsidise, education of any particular type or at any particular level. However, it cannot be concluded from this that the state has no positive obligation to ensure respect for such a right as is protected by article 2 of the Protocol. As a right does exist, it is secured, by virtue of article 1 of the Convention, to everyone within the jurisdiction of a contracting state. To determine the scope of the right to education, within the meaning of the first sentence of article 2 of the Protocol, the court must bear in mind the aim of this provision. It notes in this context that all member states of the Council of Europe possessed, at the time of the opening of the Protocol to their signature, and still do possess, a general and official educational system. There neither was, nor is now, therefore, any question of requiring each state to establish such a system, but merely of guaranteeing to persons subject to the jurisdiction of the contracting parties the right, in principle, to avail themselves of the means of instruction existing at a given time. The Convention lays down no specific obligations concerning the extent of these means and the manner of their organisation or subsidisation. In particular, the first sentence of article 2 does not specify the language in which education must be conducted in order that the right to education should be respected. It does not contain precise provisions similar to those which appear in articles 5(2) and 6(3)(a) and (e). However, the right to education would be meaningless if it did not imply, in favour of its beneficiaries, the right to be educated in the national language or in one of the national languages, as the case may be. While the last sentence might suggest that A2P1 imposes positive requirements as to the education that a State must provide, it can also be read as dealing with access to an existing system of education, for this is bound at least to include education in a language of the State. The statement in para 4 of the Belgian Linguistic case, at p281, that the individual who is the beneficiary of education should have the possibility of drawing profit from the education received did not impose an obligation to make special provision for those with special needs. It dealt with the obligation to ensure official recognition of studies that had been completed. The passage of his judgment in which Lord Bingham referred to effective access in the Lord Grey School case reads: 24 The Strasbourg jurisprudence, summarised above in paras 11 13, makes clear how article 2 should be interpreted. The underlying premise of the article was that all existing member states of the Council of Europe had, and all future member states would have, an established system of state education. It was intended to guarantee fair and non discriminatory access to that system by those within the jurisdiction of the respective states. The fundamental importance of education in a modern democratic state was recognised to require no less. But the guarantee is, in comparison with most other Convention guarantees, a weak one, and deliberately so. There is no right to education of a particular kind or quality, other than that prevailing in the state. There is no Convention guarantee of compliance with domestic law. There is no Convention guarantee of education at or by a particular institution. There is no Convention objection to the expulsion of a pupil from an educational institution on disciplinary grounds, unless (in the ordinary way) there is no alternative source of state education open to the pupil (as in Eren v Turkey (Application No 60856/00) (unreported) 7 February 2006). The test, as always under the Convention, is a highly pragmatic one, to be applied to the specific facts of the case: have the authorities of the state acted so as to deny to a pupil effective access to such educational facilities as the state provides for such pupils? These passages make it plain that the value of the right conferred by A2P1 depends upon the system of education that is in place in the particular State concerned. Volume VIII of the Collected Edition of the Travaux Prparatoires of the European Convention on Human Rights (1985) explains why, uniquely, a negative formulation was used to describe the right in A2P1: While education is provided by the State for children, as a matter of course, in all member States, it is not possible for them to give an unlimited guarantee to provide education, as that might be construed to apply to illiterate adults for whom no facilities exist, or to types or standards of education which the State cannot furnish for one reason or another. Contracting States that provide facilities for the education of adult illiterates are obliged by A2P1 to ensure that adult illiterates have access to those facilities. Those States that do not have such facilities are not required by A2P1 to establish them. The cost of providing for the needs of a child such as A are enormous. The fees charged for providing him with a place at Kisimul were 223,589 a year. It may well be that some contracting States are not able to contemplate expenditure on this scale to cater for the needs of an individual child. It is plainly highly desirable that a State should make provision for the educational needs of those who are disabled, but the signatories to A2P1 did not commit themselves to establishing educational facilities that did not exist in their countries. For these reasons I reject Mr Bowens first submission. A2P1 does not impose a positive obligation on contracting States to provide effective education for children who have special educational needs. Mr Bowens second submission was linked to the first. The starting point was the statement of Lord Bingham at para 24 of the Lord Grey School case. A2P1 guarantees fair and non discriminatory access to the system of education maintained in the particular state. The system of education maintained in England and Wales requires that provision is made for children with special educational needs. This was the system to which A2P1 guaranteed access. The system was one which provided the measure of the minimum standard of effective education that had to be provided for children with special educational needs. Mr Bowen placed at the heart of his argument the requirement of section 19 of the Education Act: (1) Each local education authority shall make arrangements for the provision of suitable education at school or otherwise than at school for those children of compulsory school age who, by reason of illness, exclusion from school or otherwise, may not for any period receive suitable education unless such arrangements are made for them. In this section suitable education, in relation to a child or young person, means efficient education suitable to his age, (6) ability and aptitude and to any special educational needs he may have. This was an unqualified obligation. He also relied on the obligation of a local authority to arrange that the special educational provision specified in a statement of special educational needs is made for the child section 324(5)(a)(i) of the Education Act. He submitted that financial constraints were no answer to these obligations. There had been a failure to satisfy the statutory obligations under the Education Act and this constituted a denial of As right to education under A2P1. The obligations were absolute; there was no defence of all reasonable endeavours. The Lord Grey School case shows that a failure to satisfy the educational requirements of domestic law will not automatically constitute an infringement of A2P1. But in that case the House of Lords held that the claimant had been provided with education that satisfied the requirements of A2P1. He was not deprived of access to the minimum standard of education provided by the State. In this case, during the 18 month period, there was a failure to comply with the requirements of the Education Act and a failure to provide any significant education to A. Does it follow that there was an infringement of A2P1? It does not. It is not right to equate a failure to provide the educational facilities required by domestic law with a denial of access to education under A2P1. The reason why A was, for 18 months, denied the very special schooling that his needs required was that there was not immediately available the resources required to carry out the medical assessment that he needed nor, thereafter, a place in a school that would satisfy his needs. Field J analysed the position in this way at para 101 of his judgment. The reality is that, in a case such as this, a local education authority may be unable, through lack of resources, immediately to satisfy the obligations imposed by section 19 of the Education Act. Article 2 guarantees the right to to avail themselves of the means of instruction existing at a given time; the right of access to educational establishments existing at a given time. paras 3 and 7,at pp 281 and 292, of the Belgian Linguistic case. Insofar as a States system of education makes provision for children with special needs, Article 2 guarantees fair and non discriminatory access for those children to the special facilities that are available. But if the facilities are limited, so that immediate access cannot be provided, the right of access must have regard to that limitation. Thus the right of access to education conferred on A by A2P1 had to have regard to the limited resources actually available to deal with his special needs. These caused the delay in catering for his special needs. In these circumstances that delay did not constitute a denial of his right to education. There was some debate as to whether Field J was correct to attribute all of the 18 month delay in placing A at Kisimul to the limited resources available. As case was not advanced, however, on the basis that there had been a failure to take all reasonable steps to cater for his needs. It was advanced on the basis that A2P1 imposed an absolute obligation to cater for them, and to do so timeously. Where there has been maladministration, resulting in a failure to provide access to education for a period, there can be difficulty in deciding whether this is so significant as to amount to a denial of education in breach of A2P1. Had part of the delay in this case been caused by maladministration I would not, on the facts of this case, have held that this amounted to a denial of As right to education under A2P1. In this respect I agree with the reasoning of Lord Brown at paragraph 128 132 and Lord Clarke at paragraph 57. For these reasons I reject Mr Bowens second submission. In the course of submissions, encouraged perhaps by interventions from the court, there was some discussion about the paucity of educational provision that was afforded to A during the 18 months that he was out of school, living with his parents. His special educational needs could not be met at home, as his assessment ultimately showed, but it is possible, indeed likely, that the failure over 18 months to meet those needs might have been mitigated by the provision of significantly more educational assistance than was in fact provided. I agree with Lord Kerr that there might, dependent upon facts that have not been explored, be a case for saying that, during this 18 month period, A was deprived of such educational provision as could have been made available and that this deprivation violated A2P1. In this I also agree with Lady Hale. Such a case would be fact specific and would not raise the issues of principle that have been pursued on As behalf. As primary case has not been that he was denied access to what was available but that A2P1, coupled with domestic law, imposed an absolute obligation under the HRA to provide what A needed. I do not think that it would be desirable to permit A an extension of time to pursue this alternative case, which, even if successful, would resolve no issue of principle and be unlikely to sound in significant damages. There has been considerable debate, here and below, as to the implications of the following observation of Lord Hoffmann in the Lord Grey School case at para 61: The correct approach is first to ask whether there was a denial of a Convention right. In the case of article 2 of the First Protocol, that would have required a systemic failure of the educational system which resulted in the respondent not having access to a minimum level of education. As there was no such failure, that is the end of the matter. That observation is not of general application. It was made in the context of a case where a child was excluded from his school, but not from the educational system as a whole, which was held by the majority to have provided him with the basic minimum of education available under the domestic system para 57. Lord Hoffmanns observation does not cover the position where a pupil is denied access to the system, nor to a case such as this where a pupil has special needs that can only be satisfied by special educational provision. This case has highlighted a problem for parents of children with severe disabilities. If there is not currently available in the system the special educational facilities that their child needs and that domestic law requires, a court may be reluctant to make a mandatory order that such facilities be provided. The Lamb Inquiry into Special Educational Needs and Parental Confidence, which was commissioned by the Government, has called for major reform of the current system. This may well be highly desirable. So far as A2P1 is concerned, it takes the system as it finds it. Disposal I would answer the first two agreed issues by holding that A2P1 does not guarantee that a child with special educational needs will receive the special educational provision required by the Education Act. I would answer the third issue by saying that the failure during the period of 18 months to cater for As special needs did not constitute a denial of As right to education under A2P1. I would answer the fourth issue, no, thereby precluding A from pursuing a claim that he was denied such educational provision as was available in the 18 month period, albeit that this would not have been adequate to meet his special needs. For these reasons I would dismiss this appeal. LADY HALE The main focus in this case has always been on the period from 18 January 2002 to 28 July 2003. During those 18 months, a child (aged 12 when it started and 14 when it ended) with very special educational needs was (a) denied access to the schooling to which he was legally entitled in domestic law, and (b) supplied with hardly anything to make up for it. The issues are (i) whether there is a triable case that this was also a breach of his right to education under article 2 of the First Protocol of the European Convention on Human Rights, and (ii) whether the judge erred in refusing to extend time for bringing the claim. On issue (i), I agree with Lord Kerr and Lord Phillips that there is indeed such a triable issue. On issue (ii), I am in a minority of one. The Right to Education We are asked to decide whether Article 2 of Protocol 1 guarantees a child an absolute minimum standard of education and, if so, how this is to be measured. My answer is that we have been referred to no authority in Strasbourg which has met this question head on. We cannot therefore be clear that the answer is yes; but equally we cannot be clear that the answer is no. Fortunately, however, we do not need to answer this question in order to decide this case. In its most recent decision on Article 2 of Protocol 1, Oru v Croatia, App no 15766/03, 16 March 2010, at para 146, the Grand Chamber repeated the basic proposition derived from all the cases dating back to the Belgian Linguistic case: The right to education, as set out in the first sentence of Article 2 of Protocol No 1, guarantees everyone within the jurisdiction of the Contracting States a right of access to educational institutions existing at a given time, but such access constitutes only a part of the right to education. For that right to be effective, it is further necessary that, inter alia, the individual who is the beneficiary should have the possibility of drawing profit from the education received, that is to say, the right to obtain, in conformity with the rules in force in each State, and in one form or another, official recognition of the studies which he has completed (see Belgian Linguistic Case (No 2) (1968) 1 EHRR 252, paras 3 5; Kjeldsen, Busk Madsen and Pedersen v Denmark (1976) 1 EHRR 711, para 52; and Leyla ahin v Turkey (2005) 44 EHRR 99, para 152). Undoubtedly, it is an important part of making the right effective that pupils and students are entitled to the certificates or other qualifications which they have earned as a result of the studies which they have been able to complete. But the Grand Chamber said that this was inter alia, thus acknowledging that there may be other rights entailed in making the basic right of access effective. The Chamber in Oru, in their Judgment of 26 June 2008, at para 58, stated that: The right to education is principally concerned with primary and secondary schooling and for this right to be effective the education provided must be adequate and appropriate. Oru was concerned with the segregation of Roma children into separate classes, ostensibly because their Croatian was not good enough for them to take part in classes with the other children. The Chamber held that their education was nevertheless adequate and appropriate. The Grand Chamber did not consider Article 2 of the first Protocol on its own, because it concluded that the segregation was unjustified racial discrimination. I accept, therefore, that the European case law does not at present lay down any minimum standards for what must be provided. But the possibility that it will do so in future certainly cannot be ruled out. Despite the wide margin of appreciation given to Member States to design and regulate their own systems of education, some failures may be so serious as to amount to a denial of the right. Lester, Pannick and Herberg, Human Rights Law and Practice, 3rd edition, at para 4.20.1, for example, comment that article 2 would not be violated by the inclusion or exclusion of a particular subject within the National Curriculum, unless the subjects addition or omission were to be so serious as to preclude the provision of proper education. We cannot be sure that they are wrong. Be that as it may, I have never dissented from the basic proposition laid down by Lord Bingham in A v Head Teacher and Governors of Lord Grey School [2006] UKHL 14, [2006] 2 AC 363, at para 24, that the primary purpose of article 2 was to guarantee fair and non discriminatory access to the established system of state education within the member state in question. Thus, The test, as always under the Convention, is a highly pragmatic one, to be applied to the specific facts of the case: have the authorities of the state acted so as to deny to a pupil effective access to such educational facilities as the state provides for such pupils? In that case, I disagreed only in the application of that test to the particular facts. This case is very different. I agree with Lord Justice Sedley, in this case at [2008] EWCA Civ 364, para 10, that there is a possible tension between Lord Binghams reference to such educational facilities as the state provides for such pupils and Lord Hoffmanns reference to the basic minimum of education available under the domestic system (para 57) and later to a systemic failure of the educational system which resulted in the respondent not having access to a minimum level of education (para 61). I do not think that there is any requirement that the failure be systemic in the usual sense of applying throughout the whole system. An individual child who is denied access can complain even though the system as a whole is working reasonably well. In Timishev v Russia (2005) 44 EHRR 776, Article 2 was breached because the applicants children were denied access to their school for an invalid reason. Lord Hoffmanns words have to be seen in the context of the facts of the Lord Grey case. The school had excluded the pupil but the system had then offered him alternative tuition in my view this was a denial of the education provided for pupils such as him, in the particular circumstances of that case, but in the view of the majority, the system as a whole had not let the pupil down. If it had, the fact that the system had not failed other pupils would not have prevented their finding a breach in As case. More relevant for our purposes is the possible tension between what is provided for such pupils and the basic minimum. I disagree with Lord Justice Sedleys view that this tension does not affect the present case, because it is one of total exclusion. The question has to be, exclusion from what?. This is where the fact that, unlike the pupil in Lord Grey, the appellant has such very special educational needs comes into play. The effect of exclusion for such pupils can be so much more serious than for other children. A denial of access which would have no long term impact upon an ordinary pupil may be catastrophic for a pupil with special needs. I respectfully endorse everything which Lord Kerr so movingly says, in para 139 of his judgment, about the particular meaning and importance of education in this case. This country has for a long time now recognised that disabled children have a right to education. There was a time, before the Education (Handicapped Children) Act 1970, when children who were suffering from a severe disability of mind could be declared unsuitable for education at school (see Schedule 2 to the Mental Health Act 1959). There was then no duty upon local education authorities to provide for them. But under the 1970 Act it was accepted that no child should be labelled ineducable. As the Warnock Report, The Report of the Committee of Enquiry into the Education of Handicapped Children and Young People (1978, Cmnd 7212, para 1.7) explained: Though the general concept of education may remain constant, its interpretation will thus be widely different in the case of different children. There is in our society a vast range of differently disabled children, many of whom would not have survived infancy in other periods of history. In the case of the most profoundly disabled one is bound to face the questions: Why educate such children at all? Are they not ineducable? How can one justify such effort and such expense for so small a result? Such questions have to be faced, and must be answered. Our answer is that education, as we conceive it, is a good, and a specifically human good, to which all human beings are entitled. There exists, therefore, a clear obligation to educate the most severely disabled for no other reason that that they are human. No civilised society can be content just to look after these children: it must all the time seek ways of helping them, however slowly, towards the educational goals we have identified. To understand the ways in which help can be given is to begin to meet their educational needs. If we fail to do this, we are actually increasing and compounding their disadvantages. Our present system of identifying and providing for the special educational needs of disabled children, contained in the Education Act 1996, is the outcome of the recommendations of the Warnock Report, first legislated in 1981, and based on that philosophy. This is not to suggest that everything is rosy in the education of children with special educational needs. The interveners case shows very clearly that it is not. The routes to achieving that basic human rights philosophy are controversial (as is shown in Haines and Ruebain (eds), Education, Disability and Social Policy, forthcoming). But that the education system in this country recognises the right of any child, however disabled in mind or body or both, to an education suitable to his age, ability and aptitude and to any special educational needs he may have (see Education Act 1996, s7) is not controversial. The European Court of Human Rights, concerned as it is with fair and non discriminatory access to education, recognises that this may mean that different children have to be educated in different ways. To return to the Grand Chamber in Oru, at para 149: According to the Courts well established case law, discrimination means treating differently, without an objective and reasonable justification, persons in relevantly similar situations. However, Article 14 does not prohibit a member State from treating groups differently in order to correct factual inequalities between them; indeed in certain circumstances a failure to attempt to correct inequality through different treatment may in itself give rise to a breach of Article 14 . The appellant has not pursued a case under Article 14 before this Court. I was rather surprised to learn that it was not suggested to the Court of Appeal that it took longer to find new places for children with special educational needs who were excluded from school than it did for other children (see [2008] EWCA Civ 364, para 18). The appellant was out of school, and deprived of any real educational input, for more than 18 months. If that is at all typical of the length of time for which ordinary children are kept out of school, it is a sorry state of affairs. For very out of the ordinary children, such as this child, it can be catastrophic. This could well be a case in which a failure to treat such a child better than other children amounted to discrimination. The question then would be whether this could be justified, precisely because of the very real difficulties in finding a suitable placement for him. I say all this, not to adjudicate upon an Article 14 claim which is not before us, but to point out that the content of the right to education may indeed differ from child to child, as Lord Bingham indicated in the Lord Grey case. A Roma child may require special help to learn the Croatian language (but that does not mean that he should be arbitrarily segregated in a different class simply because he is Roma). A disabled child may require two to one attention even though most children do not. Just as the Croatian system attempted, but clumsily, to cater for the special needs of the Roma children, so does our system make elaborate and some may think generous attempts to cater for the special needs of disabled children. The question then is whether there is a triable case that the appellant was unjustifiably denied access to the education which our system provides for children like him. I have to accept, from the Lord Grey case, that the mere fact of illegality in domestic law is not enough. But his case goes far deeper than that. The appellant cannot, and does not, complain about the excellent schooling which was eventually provided for him. But he does complain, first, that not enough was done to prevent things getting to such a pitch that his first school was unable to cope with him. Prevention is always better than cure, no more so than in catering for special educational needs. Secondly, he complains that he should not have been denied any real education for the 18 months that he was out of school. Should it have taken the authorities so long to assess his needs and find the right place? More importantly, in my view, should they have left him without any alternative while that was taking place? These are factual issues which have not been fully investigated. If a new place could have been found sooner, or if there is more that could reasonably have been done for the appellant in the meantime, I find it hard to see how the effective denial of any education could be justified. What legitimate aim could it serve and how could it be proportionate to such an aim? I am perfectly prepared to assume that the local authority meant no harm. But that is not the test. A local authority which interferes unjustifiably in family life may mean no harm, indeed may mean nothing but good, but it has still acted incompatibly with human rights. A prison governor who relies upon a mistaken interpretation of the law to keep a prisoner longer than the law in fact allows may mean no harm, but he has still acted incompatibly with the prisoners human rights. A hospital or care home which detains a patient or a resident for her own good without complying with the elaborate safeguards laid down in the Mental Capacity Act 2005 may mean nothing but good, but it has still acted incompatibly with the patient or residents human rights. We have to protect people from well meaning interferences with their human rights by public authorities as much as from those who mean them ill. Indeed, I would assume that most public authorities in this country do mean well and certainly that Essex County Council does so. But that is not the point. The second question put to us, about the nature of the minimum obligation, assumed an affirmative answer to the first, which we need not answer. The third question put to us was whether Essex can be said to have denied the Appellants right to an education on the facts of this case. The answer is that we do not know until the facts are tried. In agreement with Lord Phillips and Lord Kerr, and for the fuller reasons given by Lord Kerr, I would allow the appeal on that ground. The limitation issue There is little to say about this as the other members of the Court can find no error of principle in the judges exercise of his discretion. There is still very little case law on the principles applicable to limitation in human rights cases and so I think it right to express my reservations about the approach adopted by the judge and by others in this Court. Proceedings under the Human Rights Act must be brought within a year, beginning with the date on which the act complained of took place or such longer period as the court considers equitable having regard to all the circumstances (s 7(5)). Where there is a continuing violation, as is alleged here, time runs from when the breach was ended rather than when it began (Somerville v Scottish Ministers [2007] UKHL 44). The alleged breach ended on 28 July 2003. The year therefore expired on 27 July 2004. The proceedings were begun on 5 May 2005, just over nine months later. This is not a long delay in making a claim which relates to the past rather than seeks a remedy for the future. Equitable must mean fair to each side. There is nothing to suggest that the delay caused any prejudice to the local authority. The letter before action was sent on 6 February 2004, well within the limitation period. The evidence is mostly documentary but it is also unlikely that the professionals memories of this very unusual child will have dimmed over the ensuing years. A fair trial of the factual issues will still be possible. On the other side of the coin, the action would almost certainly have been started within the limitation period had funding not been refused in March 2004. It was not until a year later that funding was approved. This was because of the high public interest in the legal issues despite the fact that the appellant was now back at school. Difficulties with funding are often regarded as a good reason to extend time unless there is real prejudice to the other side. The judge placed at the forefront of his account of the relevant legal principles that there is a significant public interest in public law claims against public bodies being brought expeditiously (para 119). That is of course true in judicial review, when remedies are sought to quash administrative decisions which may affect large numbers of people or upon which other decisions have depended and action been taken. It is normally a prospective remedy, aiming not only to quash the past but also to put right the future. Expedition is less obviously necessary in a claim for a declaration in vindication of the claimants human rights, upon which nothing else depends, or of a claim for damages. These are retrospective remedies, aimed at marking or compensating what has happened in the past. Public authorities are no longer in any different position from other defendants in the general law of limitation (see limitation Act 1980, s 37(1)). This claim is more akin to a tort claim than to judicial review. Had judicial review proceedings been launched before the appellant went back to school, with a claim for damages included, there would have been no problem. I do not think it fair to blame the appellant for not having tried to launch judicial review proceedings earlier. It is not obvious to me that the right approach to difficult problems such as this is to rush off to the administrative court. Most people try to resolve their difficulties over access to public services by negotiation and agreement with the authorities. Very few have the knowledge or the resources to approach the administrative court. If all the people who were trying to persuade public authorities to comply with their legal obligations did so, the court would soon be swamped. Better by far to try and achieve a negotiated solution. Indeed, while negotiations are going on, the court may well refuse leave on the ground that the application is premature. But if, once the problem is solved, it appears that there has indeed been a violation of human rights, then it may be important that these are vindicated, whether by a declaration or by an award of damages or both, so that lessons can be learned. This is especially so in a novel situation such as this where the court may be able to lay down principles which will guide the authorities approach to such cases in future and thus benefit others as well as the particular people involved. That is, after all, why the House of Lords granted leave to appeal in this case. In my view, therefore, the judge erred in principle by approaching this as if it was a judicial review case and by minimising the importance of vindicating the human rights of the individual claimant and setting standards for others in a position similar to this. I venture to speculate that, if he had thought that the case raised a triable issue, he would have had little difficulty in extending time so that it could be tried. For these reasons, which fall some way short of what the appellant was hoping to achieve in this litigation, I would allow this appeal. LORD BROWN The appellant, now aged 21, claims that the respondent Council, during an 18 month period from January 2002 to July 2003, violated his right to education under article 2 of the First Protocol to the Convention (article 2). Other members of this Court have amply set out the facts of this case, all the relevant jurisprudence both domestic and from Strasbourg, and indeed the full terms of article 2. None of this need I repeat. I do, however, wish to put in my own words why I for my part regard this claim as having been rightly struck out summarily at first instance for having no realistic prospect of success this being the principal ground upon which I would dismiss the present appeal. It is difficult to exaggerate the degree of learning difficulty suffered by this appellant during the period in question and the extent of the problem faced by the respondent Council on this account. Perhaps some small measure of this can be gleaned from the huge expense involved in finally meeting the appellants educational needs: five years placement in a special residential school, Kisimul, at the cost of 223,589 per annum. I readily acknowledge that the appellants (and indeed his parents) situation was very far from satisfactory during the eighteen month period leading up to that five year placement. One obvious feature of this (much relied upon by Mr Bowen QC for the appellant) was the respondents continued naming of LS, a community special day school, as the suitable school for the appellants special educational needs pursuant to section 324 of the Education Act 1996 long after it became apparent to all that that school could no longer hope to cope with the appellants increasingly aberrant behaviour. Let it be assumed that this was in breach of the respondents public law duty under that section (and that the respondents were also in breach of their more general duty under section 19 of the Act). As, however, Sedley LJ observed in the court below (at para 13), this was a child with needs so profound that it took the system a considerable time to adjust and cope. I am quite prepared to assume too that, considerable though the efforts made by the respondents to cope with the appellants worsening difficulties evidently were, they are open to criticism for not having done yet more to resolve, or at least temporarily ameliorate, the deepening crisis in the appellants (and his parents) life. As Sedley LJ also observed (at para 13): No doubt [the Council] could and arguably should have moved faster, once it had become clear that LS School should not have been, or at least should not have remained, the school stipulated in the SSEN. Finally let it be assumed that, but for the respondents failures to move faster and/or do more, the appellants difficulties would not have intensified to the extent they did by the time his residential placement finally began. Would such assumed failings on the part of the respondents put them in breach of article 2? That critically is the question now before the Court. I understand Lord Kerr to answer that question in the affirmative. At paragraph 162 of his judgment, for example, he appears to suggest that unless the respondents can show that the entire eighteen month period was reasonably required to find a new school to meet the appellants needs and that in the meantime they did all they could to mitigate the position by considering other less ideal options, they would be in breach of article 2. Indeed, paragraph 163 infers that liability would be established here unless a trial revealed that there was nothing more that the County Council could have done. To my mind, however, such an approach puts the threshold for establishing a breach of article 2 far too low. I simply cannot accept that article 2 is breached whenever an education authority fails to do all that it possibly could do to ensure that a child is receiving the education he needs here, as Lord Kerr correctly explained at paragraph 139, training in the particular skills that will allow and encourage him to function to the best of what will inevitably be his restricted ability. In my opinion altogether more is required to be shown before article 2 is breached. Indeed Lord Kerr seems to me to come closer to identifying what could be regarded as a breach of article 2 in the broad illustrations he gives at paragraph 161: if the authority takes no action to supply any alternative to schooling which has been discontinued or if it knows that a pupil is not receiving [education] and engages in a completely ineffectual attempt to provide it. This essentially is the approach to article 2 which, albeit in a very different educational context, the House of Lords took in A v Head Teacher and Governors of Lord Grey School [2006] 2 AC 363. Article 2 was, Lord Bingham suggested at paragraph 24, intended to guarantee fair and non discriminatory access to any given member states established system of state education by those within that states jurisdiction. The test to be applied in any given case is: have the authorities of the state acted so as to deny to a pupil effective access to such educational facilities as the state provides for such pupils? Lord Hoffmann asks essentially the same question at paragraph 57: was the applicant denied the basic minimum of education available under the domestic system? Returning to the point at paragraph 61, Lord Hoffmann said: The correct approach is first to ask whether there was a denial of a Convention right. In the case of article 2 of the First Protocol, that would have required a systemic failure of the educational system which resulted in the respondent not having access to a minimum level of education. Like Lord Kerr I see no significant difference between the approach of Lord Bingham and that of Lord Hoffmann. Each, moreover, agreed with the others reasoning and Lord Nicholls and Lord Scott each agreed with the reasons of both. Only Lady Hale disagreed with the reasoning in the case although not with the result. Some uncertainty has been expressed in later cases as to precisely what Lord Hoffmann meant by a systemic failure of the educational system. Again, like Lord Kerr, I do not understand Lord Hoffmann to be saying that, for a breach of article 2 to be established, the authoritys system generally must have failed. Article 2 can be breached by a systemic (i.e. wholesale) failure even in an individual case. It seems to me that Sedley LJ captured the concept admirably when he observed (also at paragraph 13), a propos of his above cited acknowledgment that the respondent council here no doubt could and arguably should have moved faster: But that is a long way from the system either breaking down or abandoning the child. The facts of this case are now before us in very considerable detail much additional material having been adduced even since the Court of Appeal hearing. On no possible view of this material could a court reasonably conclude that the council took no action to supply the appellant with the education he required (after he ceased to attend LS school) or that their attempts to provide it were completely ineffective (Lord Kerrs paragraph 161 illustrations of Convention breach), given the magnitude of the problem confronting them and the difficulties of its solution. Nor can it reasonably be said that the appellant was denied effective access to such educational facilities as the [UK] provides for such pupils (Lord Binghams test in the Lord Grey case): such pupils are inevitably difficult to accommodate within the system and it is not sufficient for establishing a violation of article 2 to show merely a breach of the education authoritys domestic public law duties or even maladministration. Denial implies a substantially higher degree of blameworthiness than this: as I would hold, something akin to an abandonment of the particular childs plight (a refusal to engage with its needs) or a complete breakdown (not merely shortcomings) in the authoritys handling of the individual childs case. Nothing in the Strasbourg jurisprudence to my mind encourages a less exacting approach than this to the application of article 2 and I can think of few things more unfortunate in this field of law than that our own courts should adopt a looser approach. With the possibility of a damages award at the end of the road, many fresh claims would be generated, all at considerable public expense. Better by far that any serious shortcomings in the handling of an individual childs education should be the subject of a prompt public law challenge so that they may be corrected in good time. Inevitably, if one felt the least doubt as to whether the respondent Councils handling of this case could properly be characterised as a violation of the Convention, there would need to be a full trial. If, however, I am right as to the proper approach to article 2, this is unnecessary. There is a close parallel here with the cases concerning the existence or scope of a common law duty of care. As to these, it is worth recalling what Lord Hope said in Mitchell v Glasgow City Council [2009] 1 AC 874, 883 (at para 12): There will, of course, be cases where the existence or scope of a duty of care cannot safely be determined without hearing the evidence. But no advantage is to be gained by sending a case to proof when it is clear from the averments that, even if everything that the pursuer avers is proved, the case must fail. That is likely to be the case where the issue on which the case depends is one of principle or, as Lord Reed put it in para 135 of his opinion, of legal analysis. In such cases, it is not just that there would be no advantage in sending the case to proof. It would be unfair for the defenders to be required to spend time and money on what will obviously be a fruitless inquiry. Lord Reids comments in Jamieson v Jamieson [1952] AC 525, 550 on the value of the procedure for disposing of cases on relevancy without inquiry into the facts remain just as true today as they were when they were made nearly 60 years ago. As I observed at the outset, it is principally upon this ground that I would dismiss the appeal. Had it been necessary, however, I would, for the reasons given by other members of the Court, have dismissed it on the limitation ground also. LORD KERR A, a severely disabled child, launched an action for damages against Essex County Council for breach of his human rights, particularly in relation to Article 2 of the First Protocol to the European Convention on Human Rights and Fundamental Freedoms. This provides, among other things, that no person shall be denied the right to education. As action was dismissed by Field J by way of summary judgment [2007] EWHC 1652 (QB) on the ground that it had no realistic prospect of success. The judge further held that, since the claim had been brought out of time, it should be rejected on that account also. As appeal was dismissed by the Court of Appeal [2008] EWCA Civ 364, Sedley LJ holding that the facts asserted on As behalf were not capable of amounting to a breach of Article 2 of the First Protocol. In particular, he found that it was not possible to spell out of those facts either a failure of the education system or a denial of access to it. The claim had also been made both before Field J and the Court of Appeal that the respondent had acted in breach of As Convention rights under Article 3 (protection from inhuman and degrading treatment) and Article 8 (the right to respect for family and private life) and Article 14 (protection from discrimination) but these claims were not pursued before this court. The facts A is severely autistic. He suffers from epilepsy and has grave learning difficulties. He attended L S School, a Community Special Day School for children with serious problems with learning, from 1995 until 17 January 2002. In May 2001 teachers at the school expressed concern about his behaviour and the school's ability to deal with him. He had inflicted harm on himself and had no concept of danger. His condition was deteriorating and he was considered to represent a significant danger not only to himself but also to others who attended the school. In January 2002 As parents were contacted by the school. They were asked to keep him at home while a medical assessment of his condition was made. This was considered to be necessary because of his propensity for violence against other pupils and staff. As parents agreed to this request and he remained at home for many months before the medical assessment could be arranged. In fact, it did not take place until September 2002. In the meantime his condition deteriorated markedly. He was sent work in the form of two boxes of educational activities touch books and bubbles. Speech and language therapy was provided on Wednesday and Thursday mornings from March 2002 and an occupational therapy assessment of A's home was carried out. In May and June 2002 he attended activity sessions at L S School and from about the end of June 2002 until 24 July 2002 he went to the school for individual teaching sessions each of which lasted 45 minutes. But he was significantly under stimulated during this period and this led to intensification of his self harming and other aberrant behaviour. Indeed, by late 2002 or early 2003 A's condition had deteriorated to the extent that he was required to wear arm splints to prevent from gouging his face. He also had to wear a helmet such was the force with which he struck his head on solid objects. This was such an acute problem that experts feared that he might fracture his skull. It is now clear not least because of what occurred after A was finally given a suitable placement that the absence of virtually all forms of education during this period was directly linked to the striking deterioration in As condition. In this context it is important to remember that education for A cannot be regarded in the same way as conventional learning undertaken by a child of normal capability. Rather than the usual education given to a child who does not suffer from the type of difficulties that A has, in his case education involves training him in the particular skills that will allow and encourage him to function to the best of what will inevitably be his restricted ability. But because of the severe disabilities from which he suffers, the need for such education is, if anything, far more important than for a normal child. A normal child whose education is neglected is condemned to ignorance and a lack of the means to realise his full potential. For someone such as A the absence of proper education can have far more serious consequences as, indeed, his case has so graphically illustrated. The medical assessment of A finally took place between 9 and 13 September 2002 at the St Piers National Centre for Young People with Epilepsy. He was diagnosed as suffering from generalised seizure disorder; severe learning disability; and challenging behaviour (aggressive and self injurious behaviour). A report following the assessment recommended a residential programme. This would provide a 24 hour curriculum with consistent behavioural strategies at a specialist school. It was concluded that A needed supervision and support at all times on a one to one basis. Indeed, the view was taken that on occasions this would need to be on a two to one basis. This reports findings are highly significant in the debate as to whether As proposed action for violation of Article 2 of the First Protocol was entirely bereft of any prospect of success. The level of his need, as disclosed by the report, finds a stark and sorry contrast with what had actually been provided for him during the nine months that preceded the assessment. He had been left virtually continuously in the care of his parents who had no expertise whatever in dealing with his condition. They were also required to care for As siblings some of whom also had special educational needs. It is not difficult to understand why As condition worsened so dramatically during this period. The County Council became aware of the outcome of the assessment on 13 September. Commendably, by 10 October 2002 they had put funding in place for a residential placement. There then began a protracted search for a school that would meet As needs. The Council wrote to no fewer than twenty six schools between 16 October 2002 and 17 December 2002, seeking a placement for A. Eventually, on 9 February 2003 Kisimul School offered a place for him. This would cost the Council what Sedley LJ correctly described as the colossal sum of 223,589 per annum. Once again to its credit the County Council was immediately willing to pay this amount. But, for understandable reasons, A's parents asked if they could continue investigating other possibilities. Finally, it was decided to accept the place at Kisimul School. As it happened, however, the further investigation that his parents has asked for made no difference to the start of As placement there because it was not possible for him to begin his course until 28 July 2003 since there were ongoing building works at the school. A has now completed his course at Kisimul school. He progressed well there. His overall health and behaviour improved. He received appropriate education, and his self harming reduced considerably. In a report of 23 November 2006, a Consultant Community Paediatrician stated that there was no doubt that A's development achievements regressed during the period that he was away from school. His behaviour had deteriorated because of the lack of demands made upon him and the fact that, in consequence, he had been markedly under stimulated. Despite this, it was considered that the effects on his learning and general development were temporary. The paediatrician expressed the fear, however, that there may have been a more permanent effect on his behaviour. In light of this report and the other evidence, Field J found that the nineteen months during which A was away from school had an adverse impact not only on him but also on his parents. That finding has not been challenged. The evolution of As claim Field J described the claim made by A in the proceedings before him in the following paragraph of his judgment: [25] A claims that in breach of his A2P1 rights he was denied an effective and meaningful education whilst at L S School between May 2001 and 18 January 2002, and thereafter until 27 July 2003. He also claims that his exclusion from L S School was in breach of his A2P1 rights. The focus of the claim was, therefore, on the exclusion of A from the LS school and the adequacy of the education that he had been receiving there. Before the Court of Appeal that focus seems to have shifted somewhat. Sedley LJ stated that the essential case made on As behalf was that, for want of even minimally suitable provision for his education, he was shut out of the state system, although he also said that the foundation of the claim was that A ought to have remained in L S School until July 2003 when his successful placement at Kisimul School began. Before this court, a simpler and more direct case has been made. It is to the effect that this young man had been abandoned by the educational authorities after his parents were persuaded to withdraw him from school. Emphasis was no longer placed on the exclusion of A from a particular school or indeed from the state system. Rather, while acknowledging that the County Council had made conspicuous efforts to obtain a suitable place for A after the medical assessment was made, counsel for the appellant contended that the plain fact was that, from January 2002 until then, no effective education was provided for him. That, it was submitted, amounted to a denial of education in breach of Article 2 of the First Protocol. The denial of education Article 2 of the First Protocol to the European Convention on Human Rights and Fundamental Freedoms provides: Right to education No person shall be denied the right to education. In the exercise of any functions which it assumes in relation to education and to teaching, the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions. Although expressed in negative terms, it is clear that this provision enshrines a right to have access to education see Belgian Linguistic Case (No 2) (1968) 1 EHRR 252 where the European Court of Human Rights (ECtHR) said at, p 280, para 3: By the terms of the first sentence of this Article, 'no person shall be denied the right to education'. In spite of its negative formulation, this provision uses the term 'right' and speaks of a 'right to education'. Likewise the preamble to the Protocol specifies that the object of the Protocol lies in the collective enforcement of 'rights and freedoms'. There is therefore no doubt that article 2 does enshrine a right. The content of the right and the extent of the corresponding duty cast on the member state are discussed in the Belgian Linguistic Case. The court concluded that the scope of the obligation must be geared to the aim of the provision. That aim did not include the imposition of a duty to create an educational system; nor did it guarantee access to any particular type of education or at any specific level. What the provision was intended to achieve was the enshrining of a right to access to the education system that prevailed in the state at the material time. It was recognised, however, that the Article 2 First Protocol right had a further dimension beyond the mere right to access to available educational institutions. The court dealt with this in the following passage from, p 281, para 4 of its judgment: 4 The first sentence of article 2 of the Protocol consequently guarantees, in the first place, a right of access to educational institutions existing at a given time, but such access constitutes only a part of the right to education. For the 'right to education' to be effective, it is further necessary that, inter alia, the individual who is the beneficiary should have the possibility of drawing profit from the education received, that is to say, the right to obtain, in conformity with the rules in force in each State, and in one form or another, official recognition of the studies which he has completed. Mr Bowen QC for the appellant argued that, in effect, the prevailing education system for children in respect of whom a statement of special educational needs had been made under section 324 of the Education Act 1996 was the educational provision specified in the statement since this was the only form of education from which A could draw profit. Moreover for special educational needs children a system of education was in place in this country. This consisted of a means of determining what such a childs needs were and then meeting them. This, therefore, was the system to which A was entitled to have access by virtue of Article 2 of the First Protocol. The riposte of Mr Faulks QC (for the County Council) was that the appellants argument was tantamount to a claim to entitlement to a specific type of education which the Belgian Linguistic Case and later authority had expressly disavowed. Before commenting on these competing arguments, it is necessary to say something about the cases that came after the Belgian Linguistic Case. A number of the later Strasbourg authorities dwell on the need for a system of regulation in the provision of education and the constraint that this places on the scope of the right under Article 2 of the First Protocol. In SP v UK (Application No 28915/95) [1997] EHRLR 287, the applicant suffered from dyslexia. He claimed that his rights under Article 2 of the first Protocol had been violated because the teaching staff of the schools that he had attended had failed to address his special educational needs and the local education authority had initially refused to make a statement of special educational needs in his case. The applicants claim was declared inadmissible by the European Human Rights Commission. Citing the Belgian Linguistic Case 1 EHRR 252, 281, para 5 the Commission said that the right under Article 2 of the First Protocol by its very nature call[ed] for regulation by the State and that such regulation may vary in time and place according to the needs and resources of the community and of individuals. It was recognised that there must be a wide measure of discretion left to the authorities as to how to make the best use possible of the resources available to them in the interest of disabled children generally. And in ahin v Turkey (2005) 44 EHRR 99 ECtHR said: 154 In spite of its importance, this right is not, however, absolute, but may be subject to limitations; these are permitted by implication since the right of access 'by its very nature calls for regulation by the State' (see the Belgian Linguistic Case, para 5; see also, mutatis mutandis, Golder v United Kingdom (1975) 1 EHRR 524, para 38; and Fayed v United Kingdom (1994) 18 EHRR 393, para 65). Admittedly, the regulation of educational institutions may vary in time and in place, inter alia, according to the needs and resources of the community and the distinctive features of different levels of education . The constraint on the right under Article 2 of the First Protocol which arises from the recognition of the need for regulation leads inexorably, in my opinion, to the conclusion that the system of education to which the article guarantees access must include the process for investigating what is required to meet an individual childs needs. Such inquiry is unquestionably a feature of the educational system in this country. It follows that the failure to supply education during the reasonable period that such investigation requires will not give rise to a violation of Article 2 of the First Protocol. I shall discuss the implications of this conclusion on As case below. The most important domestic decision in this area is A v Head Teacher and Governors of Lord Grey School [2006] UKHL 14, [2006] 2 AC 363. Paras 12 and 13 of Lord Binghams speech contain a valuable summary of the Strasbourg jurisprudence following the Belgian Linguistic case and it is convenient to reproduce them here: 12 The court's judgment in the Belgian Linguistic Case (No 2) has been cited and relied on in a number of later decisions such as Kjeldsen, Busk Madsen and Pedersen v Denmark (1976) 1 EHRR 711, Campbell and Cosans v United Kingdom (1982) 4 EHRR 293, ahin v Turkey (Application No 44774/98) (unreported) 10 November 2005, Grand Chamber, and Timishev v Russia (Application Nos 55762/00 and 55974/00) (unreported) 13 December 2005. In later decisions the reasoning in that case has been followed but elaborated. It has been held that article 2 is dominated by its first sentence (Kjeldsen, para 52; Campbell and Cosans, para 40) but the article must be read as a whole (Kjeldsen, para 52), and given the indispensable and fundamental role of education in a democratic society a restrictive interpretation of the first sentence would not be consistent with the aim or purpose of that provision: ahin, para 137; Timishev, para 64. But the right to education is not absolute (ahin, para 154): it is subject to regulation by the state, but that regulation must not impair the essence of the right or deprive it of effectiveness: Campbell and Cosans, para 41; ahin, para 154. It is not contrary to article 2 for pupils to be suspended or expelled, provided that national regulations do not prevent them enrolling in another establishment to pursue their studies (Yanasik v Turkey (1993) 74 DR 14), but even this qualification is not absolute: Sulak v Turkey (1996) 84 A DR 98. The imposition of disciplinary penalties is an integral part of the process whereby a school seeks to achieve the object for which it was established, including the development and moulding of the character and mental powers of its pupils: ahin, para 156. 13 In Coster v United Kingdom (2001) 33 EHRR 479, para 136, Her Majesty's Government submitted that article 2 did not confer a right to be educated at a particular school. The court did not expressly accept or reject this submission. Such an interpretation was, however, adopted by the Court of Appeal in S, T and P v Brent London Borough Council [2002] ELR 556, para 9. In para 24 of his speech Lord Bingham identified the purpose of Article 2 of the First Protocol as the guarantee of fair and non discriminatory access to the system of education prevailing within the jurisdiction of member states. He went on to characterise the right as weak compared to other rights guaranteed by the Convention. That it is weak in respect of its scope in not guaranteeing access to a particular form of education, for instance is undeniable. But I do not understand Lord Bingham to have been suggesting that it was weak in relation to the force and effectiveness of the guarantee that it embodies. That much is, I believe, clear from Lord Binghams statement in the immediately preceding sentence of the same para: The fundamental importance of education in a modern democratic state was recognised to require no less [than fair and non discriminatory access to the prevailing educational system]. Later in the same paragraph Lord Bingham observed that the test as to whether there had been a denial of education was a highly pragmatic one, to be applied to the specific facts of the case: have the authorities of the state acted so as to deny to a pupil effective access to such educational facilities as the state provides for such pupils?. It was on this passage that Mr Bowen particularly fastened in order to advance his claim that the special educational needs system (and indeed the special needs provision stipulated in the statement) was that to which A was entitled to have access in fulfilment of Article 2 First Protocol rights. But I do not consider that Lord Bingham here had in contemplation a particular group of pupils with particular educational requirements. Just a few sentences earlier he had said that there was no right to education of a particular kind or quality, other than that prevailing in the state and there was no Convention guarantee of education at or by a particular institution. Sedley LJ in the Court of Appeal suggested that there was a possible tension between Lord Binghams formulation of the scope of the right (i.e. effective access to such educational facilities as the state provides for such pupils) and Lord Hoffmanns statement in the same case (at para 57) that a breach must involve denial of the basic minimum of education available under the domestic system. Taken as a whole, it seems to me that Lord Binghams concept of the content of the right does not differ significantly from that of Lord Hoffmann. His emphasis on the fact that it did not guarantee any particular form of education and that it did not require to be provided at any particular institution chimes well with the notion that all that need be provided is the basic minimum. I would not therefore be disposed to accept Mr Bowens contention that A was entitled under Article 2 of the First Protocol to have access to the particular form of education specified in the statement of special needs. He was entitled, however, to the basic minimum education and what that basic minimum involves must be assessed, in my opinion, by reference (at least in part) to As special needs. It would be utterly pointless to give A access to conventional education. To suggest that his right to an education extended only so far as the right to have access to the normal state system at its most basic level would be to rob the right of any meaning or effectiveness in his case. My view that A was entitled to a basic minimum education geared to his particular condition is not influenced, therefore, by the observation in the Belgian Linguistic case that, for the right to education to be effective, it is necessary that the individual who is the beneficiary should have the possibility of drawing profit from the education received. That statement reflected the particular circumstances of the case and was directed to the need to ensure the availability of some form of certification as to the proficiency of the student who had undertaken the education. The underpinning of my conclusion that the basic minimum in As case required that his condition be taken into account is the need for the right to be effective in his case. It would not be effective if that critical and central feature was ignored. While supporting Lord Binghams reasons for dismissing the pupils claim in the Lord Grey case, Lord Hoffmann gave reasons of his own for agreeing with that result. At para 61 he said: In the present case, where the respondent was not excluded from school education, he would in my opinion have had no claim at Strasbourg. And if no claim can be made in Strasbourg, it follows that there cannot have been an infringement of a Convention right giving rise to a claim under section 6 of the Human Rights Act 1998: see R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs [2006] 1 AC 529. It is in my view illegitimate to promote the public law duty of the school, not giving rise to a private right of action, to a duty under section 6 of the Human Rights Act 1998 remediable by a claim for damages, by saying that in domestic law the school bore the 'primary duty to educate the child'. The correct approach is first to ask whether there was a denial of a Convention right. In the case of article 2 of the First Protocol, that would have required a systemic failure of the educational system which resulted in the respondent not having access to a minimum level of education. As there was no such failure, that is the end of the matter. The use of the words systemic failure in this passage appears to have led the Court of Appeal in the present case to conclude that for a breach of Article 2 of the First Protocol to occur there must be either a failure of the education system or a denial of access to it see para 12 of Sedley LJs judgment. So expressed, these alternatives seem to contemplate either a deliberate withholding of education from the pupil concerned or some fundamental failure of the educational system in general which leads to his being denied access to it. As Mr Faulks was quick to accept, there can be a denial of education even if there has not been systemic default. I would therefore be slow to attach to Lord Hoffmanns use of the words, systemic failure quite the significance that the Court of Appeal appears to have associated with it. I consider that denial of education under the article can arise in a variety of ways. Obviously, a calculated refusal to allow a pupil access to any form of even basic education will be in violation of the right. But a failure to take steps to provide education when the state authority responsible for providing it is aware of the absence of the pupil from any form of education could in certain circumstances give rise to a breach of the right. If, for instance, a local education authority knows that a child has been asked by a school not to attend that school; and if the authority is responsible for the provision of education to the child; and if it takes no action to supply any alternative to what had been previously provided by the school, it is at least arguable that it is in breach of its duty under Article 2 of the First Protocol. I would go further. I believe it also to be at least arguable that an authority with the responsibility for providing education, if it knows that a pupil is not receiving it and engages in a completely ineffectual attempt to provide it, is in breach of the provision. As I have said above, however, an education authority must have the opportunity to make reasonable inquires as to what a childs educational needs are and how they can be met, without falling foul of the requirements of Article 2 of the First Protocol. What, therefore, is principally at stake in the present case is whether the entire period of As absence from any effective form of education can be accounted for on the basis that this period was reasonably required in order to investigate As particular needs and to identify a school at which they could be met. A subsidiary but nonetheless important issue is whether any less ideal option should have been considered in the meantime in order to mitigate the harm that A undoubtedly suffered during his absence from education. In my opinion, these were triable issues. If it could be shown that the County Council had either failed to make inquiries during any period that it knew A was not receiving effective education or that such investigations as it conducted were wholly inadequate, there would be at least a reasonable prospect of success for As claim under Article 2 of the First Protocol. A trial might well have revealed that there was nothing more that the County Council could have done. In that case, no breach of the article could arise. But I feel quite unable to say, in the absence of a trial, that this is bound to have been the outcome. I am likewise unable to conclude, in the absence of evidence that would allow a confident judgment on the issue, that it could never be shown that the County Council ought to have put in place some short term basic educational provision which would have gone some way towards diminishing the adverse impact on A of the lack of education while the medical assessment was being arranged and subsequently while awaiting its implementation. I am in complete agreement with what Lady Hale has said on this issue. It is, of course, easy to speculate that there may have been nothing that the Council could reasonably do in this regard. But unless the matter was investigated, I cannot see how it can be said that A had no prospect of establishing that the County Council should have done something beyond such efforts as it made. Extension of time Because it upheld the judges ruling that As claim should be dismissed by way of summary judgment, the Court of Appeal did not deem it necessary to consider the issue of whether time should have been extended to permit the appellants claim to proceed. Since I have reached a contrary view on the question of summary judgment, it is necessary for me to consider the extension of time point. Section 7 (5) of the Human Rights Act 1998 provides: Proceedings under sub section (1) (a) must be brought before the end of: (a) the period of one year beginning with the date on which the act complained of took place; or (b) such longer period as the court or tribunal considers equitable having regard to all the circumstances, but that is subject to any rule imposing a stricter time limit in relation to the procedure in question. It has been held in Cameron v Network Rail Infrastructure Ltd [2006] EWHC 1133 (QB), [2007] 1 WLR 163, para 47 that the burden of establishing that it is equitable to extend time under s 7(5) is on the party seeking the extension. As Field J observed, at para 120, however, few cases of this type lend themselves to a ready resolution by the application of a burden of proof and I prefer to approach the question (as did the judge) by an open ended examination of the factors that weigh on either side of the argument that this is a case in which the discretion of the court should be exercised to extend the time under section 7 (5) (b). Field J dealt with this issue in paragraph 129 of his judgment as follows: In my judgment, it is not equitable to extend the limitation period in this case. My reasons are these. CLC [the Children's Legal Centre], who are very familiar with the law relating to education, were instructed on 14 April 2002 but no application for judicial review was made until 30 May 2003, an application that foundered on the LSC's refusal to grant funding because a school place was going to be made available from the end of July 2003. No such reason would have existed for refusing funding for a judicial review application made towards the end of 2002 but such an application was not made. Instead, proceedings have been issued a long time after the alleged infringements came to an end and at a stage when there is little point from A's personal point of view in seeking a declaration that his rights were infringed. As for his damages claim, it is far from certain that a court would conclude that an award of damages is necessary to afford him just satisfaction and any sum awarded is likely to be modest and therefore at a level that is disproportionate to the costs of the proceedings. It was this lack of proportionality that understandably led the LSC to refuse funding until March 2005. I do not think that the public interest identified by the Public Interest Advisory Panel tips the balance in favour of extending time. The question whether A2P1 confers a right to an education in accordance with the relevant SSEN, and if so, the appropriateness of an award of damages and the impact on the alleged shortcomings of judicial review in special educational needs cases, can be as easily (and more appropriately) determined in an upcoming application for judicial review made by another party as in these very late proceedings. I can find nothing in this analysis with which to disagree. In particular, I consider that it is highly unlikely that any significant sum by way of damages would have been awarded if the action had been brought within time and had been successful. On the contrary, a court may well have concluded that no award of damages was necessary in order to provide just satisfaction to A. Accordingly, I would dismiss the appeal on the ground that the judge was right not to have extended the time to allow the claim to be brought.

This appeal case centred around whether a local education authority has a minimum legal obligation to provide all children with an effective education, taking account of their special needs and regardless of the demands that this has on resources. A, a man now aged 21, is severely autistic, suffers from epilepsy, and has grave learning difficulties. As a boy, he attended a special school. In 2001, when he was aged 12, teachers at the school expressed concern about his behaviour and the schools ability to deal with him. He would self harm, would suffer from regular epileptic fits in spite of medication, was doubly incontinent, had no concept of danger, and required constant supervision. In January 2002, As parents were asked not to bring him into school for health and safety reasons. It was at that time intended that he should receive an urgent residential medical assessment but this was delayed. Meanwhile the school sent work and activities for A to do with his parents at home and provided him with some weekly speech and language therapy sessions. Neither the Council nor As former school was able to provide a home tutor who was qualified or able to meet As needs. The assessment eventually took place in September 2002. It recommended that A should be placed in a 24 hour residential school specifically for children with high levels of challenging behaviour. Between October and December the Council wrote to a number of schools seeking a placement for A, but without success. Meanwhile As condition continued to deteriorate. A residential school placement did not finally become available under the end of July 2003. When, in July, he took up his place at his new school, his overall health and behaviour started to improve. He since received an appropriate education. He left the school in the summer of 2008 and now lives in residential therapeutic accommodation. Article 2 of the First Protocol to the European Convention on Human Rights (A2P1), made part of UK law by the Human Rights Act 1998, guarantees that no person shall be denied the right to education. In this case, relying on A2P1, A sought damages from Essex County Council arguing that, between the period January 2002 to July 2003, his right to education was infringed. The lower courts (High Court and Court of Appeal) had both decided that, since As case had no realistic prospect of succeeding, it should be struck out. That meant that A could not seek to prove his claim at a full trial of the evidence. A appealed to the Supreme Court against this decision. A also appealed against a ruling that he should not be allowed to pursue his claim because he had brought it outside of the legal time limit for the bringing of such claims. As case raised the following important issue of principle. Does A2P1 impose a minimum obligation to provide a child with an education that is effective having regard to his special needs, regardless of the demands that this makes on resources? A argued that it does, and that this mirrors the public law obligation imposed by statute in England and Wales. A argued that for the 18 months he was denied this right, because his special needs were not met. A also made an alternative argument. He said that A2P1 entitled him to such facilities as were available in the 18 month period, even if these were not adequate to meet his special needs, and that there had been a failure to provide these. The appeal was dismissed. A majority of three to two Justices (Lords Clarke, Phillips and Brown) held that on the principal issue it was not arguable that A2P1 gave A an absolute right to education that met his special needs during the 18 months. A full trial could not be allowed to proceed on that basis. The time taken to find a school that met these needs was attributable to limitation of resources. Even if the delay had been attributable in part to administrative shortcomings, this would not have amounted to a breach of A2P1. On the alternative argument, a different majority, (Lord Phillips, Lady Hale and Lord Kerr) held that A might have been able to establish a breach of A2P1 at a full trial in the form of a failure to provide educational facilities that were available that would have mitigated the consequences of the failure to meet As special needs during the 18 months. However a majority (Lord Phillips, Brown, Kerr and Clarke) held that it would not be right to extend the one year time limit to enable A to bring his claim. He is unable to pursue his claim at a full trial.

This appeal raises an important question of planning law. A planning authority foresees and plans for significant growth in its area. Major investment in transport infrastructure is required to accommodate the aggregate of the planned development. The planning authority seeks to achieve this investment by adopting a policy in its development plan which in substance requires developers to enter into planning obligations with it to make financial contributions to the pooled fund to be spent on the infrastructure, including interventions at places where a particular development has only a trivial impact. Is such a policy within the existing powers of the planning authority under current planning legislation? Factual background The Aberdeen City and Shire Strategic Development Planning Authority (the Authority) has the responsibility for preparing a strategic development plan for its area. The Authority foresaw the need for significant new and improved infrastructure to accommodate the cumulative impact of new development for which it planned. There were already proposals for transport infrastructure which involved major public sector investment, including the Aberdeen Western Peripheral Route (AWPR), new bridges, park and ride sites, making the A96 into a dual carriageway road and the creation of twin tracks on significant parts of the Aberdeen Inverness railway line, all of which was to be paid for out of public funds. In 2010 the North East of Scotland Transport Partnership (Nestrans) commissioned a cumulative transport appraisal for the area (the CTA), in which it estimated that 86.6m was required on top of already committed public sector investment in order to fund a package of infrastructure developments, which it identified, to address the cumulative impact of the proposed new development in the area. In December 2011 the Authority approved non statutory supplementary planning guidance which proposed the establishment of a Strategic Transport Fund (the Fund). In February 2013 the Authority published its proposed strategic development plan. In that plan the Authority stated that it intended to prepare supplementary guidance in support of the plan. This guidance would allow for the Fund to deliver the transport projects which were needed to deal with the combined effect of new development in four identified strategic growth areas within the Aberdeen Housing Market Area. The Authority stated that it would need to secure a higher percentage of the increase in land values, which resulted from the grant of planning permission, than it had in the past in order to be able to create sustainable mixed communities. Elsick Development Ltd (Elsick) proposes to develop approximately 4,000 houses together with commercial, retail and community facilities at Elsick, near Stonehaven. Elsicks site is located within the southerly of the four strategic growth areas. In November 2011 Elsick objected to the draft supplementary planning guidance while it was subject to consultation. Elsick also objected to the proposed strategic development plan and sought to have the reference to the Fund removed from that plan on the ground that it was contrary to the guidance of the Scottish Ministers on planning obligations which is set out in circular 3/2012, Planning Obligations and Good Neighbour Agreements (the Circular). The Circular advised planning authorities to seek to have developers enter into planning obligations only if the obligations met specified tests. These tests were that the obligations (i) were necessary to make the proposed development acceptable in planning terms (para 15), (ii) served a planning purpose (para 16), (iii) related to the proposed development either as a direct consequence of the development or arising from the cumulative impact of development in the area (paras 17 19), (iv) fairly and reasonably related in scale and kind to the proposed development (paras 20 23), and (v) were reasonable in all other respects. Elsicks principal concern was with (iv); Elsick asserted that the contribution to the Fund which the proposed plan envisaged was out of all proportion to the demands which its development would make on the infrastructure which expenditure from the Fund was to improve. In the meantime, on 30 September 2013 Elsick entered into a planning obligation under section 75 of the Town and Country Planning (Scotland) Act 1997 (as amended) (the 1997 Act) with Aberdeenshire Council (the Council) to contribute to the Fund in terms of the draft non statutory supplementary planning guidance or any revision or replacement of it in the proposed strategic development plan, but the agreement also provided that no contributions to the Fund needed to be paid if the supplementary planning guidance were found to be invalid. On 2 October 2013 the Council granted outline planning permission for the development and detailed planning permission for a first phase of 802 houses and other facilities. The proposed strategic development plan was examined by a reporter appointed by the Scottish Ministers. In his report dated 21 January 2014 the reporter stated that it was right that the principle of the Fund should be established in the development plan and concluded that the CTA had demonstrated that the overall traffic growth, which the development promoted in the plan would create, would have harmful effects unless there were mitigation measures. He expressed concern that the mechanism for raising contributions to the Fund did not comply with national policy in the Circular because there was not a sufficiently clear and direct relationship between the development supplying the contribution and the infrastructure to be delivered. He advised that para 5.9 of the proposed plan be amended to establish that the Fund will only be used to gather contributions towards infrastructure improvements that are related to the developments concerned and strictly necessary in order to make any individual development acceptable in planning terms. The Strategic Development Plan was amended to take account of the reporters comments. As so amended the relevant paragraphs of the Plan stated: 5.8 Developers will have to accept the need for contributions towards necessary infrastructure, services and facilities within their own site. However, in cases where development has wider effects, we will have to secure contributions to deal with these as well, although the public sector will also need to make an important contribution. 5.9 We will prepare supplementary guidance in support of this plan. This will allow (through a Strategic Transport Fund) transport projects which are needed as a result of the combined effect of new development to be funded and delivered. We will look for contributions from housing, business, leisure developments in the strategic growth areas within the Aberdeen Housing Market Area, (detailed criteria will be set out in the supplementary guidance). We will only use contributions to support projects that are related to the developments concerned and that are necessary to make those developments acceptable in planning terms. retail and commercial industrial, The Authority then resolved to convert the non statutory supplementary planning guidance into statutory guidance. On 12 December 2014 the Authority issued a consultation draft of the proposed statutory guidance. In a report to the meeting of the Authority which approved the consultation draft it was explained that the consultants who had prepared the CTA had re presented table 7.2 of the study, which I discuss in more detail in para 16 below, to show a clear and direct link between the development providing a contribution to the Fund and the infrastructure improvement to be delivered. The report also stated that the supplementary guidance was based on a strategic level evidence base and uses this to derive appropriate contribution levels for individual developments. The main driving force behind the preparation of the existing non statutory guidance was the need to facilitate development rather than leave it to individual developers to try to satisfy Transport Scotland and the two councils that they had adequately mitigated all their cumulative impacts on the transport network. Elsick and others objected to the consultation draft on several grounds, including that it failed to comply with the Circular. The Authority responded to Elsicks representations by stating that all but one of the transport interventions were within a three mile radius of Aberdeen City centre and had strong inter relationships and that the modelling of the CTA had demonstrated that there was a cumulative impact from all development areas to all of the interventions. The Authority approved the draft supplementary guidance on 24 April 2015 and sent it to the Scottish Ministers for ratification. The Scottish Ministers advised that the Authority could adopt the draft supplementary guidance if they added a statement that the use of any planning obligation shall follow the guidance in the Circular. The Authority made that amendment and adopted the supplementary guidance (SG) on 25 June 2015. As I explain below when I discuss the legislative background, the SG forms part of the development plan for the purpose of determining planning applications. The Supplementary Guidance After setting out the purpose of and background to the SG and who would be expected to contribute, the SG explained that the purpose of the Fund was to mitigate the cumulative impact of developments at specific hotspots in the network which the CTA had identified. It continued (in para 4.8): [t]here will still be a requirement to mitigate impacts specific to the development (defined as local impacts) whether they are on the local or strategic network. In section 5 the SG set out the contributions which were required to deliver the proposed interventions at an estimated cost of 86.6m. In Table 1 in that section the SG set out contribution levels which for residential developments were fixed by reference to unit size, ranging from 1,350 per unit for a one bedroom unit to 3,148 per unit for a unit of five bedrooms or more. The table also provided for contributions from non residential developments. Because the Authority has argued that contribution to the Fund was voluntary (para 20 below), I set out para 5.4 so far as relevant. It provided: Developers can elect to assess and mitigate their cumulative impact outwith the [Fund], although this will require a considerably more comprehensive Transport Assessment and the design and delivery of the mitigation measures shown to be necessary. This will definitely be more time consuming and almost certainly more expensive, if it can be achieved at all. (emphasis added) Section 6 of the SG addressed how and when contributions would be payable. Para 6.1 stated that a planning obligation or other legal agreement would normally be used to secure contributions. In accordance with the advice of the Scottish Ministers, the paragraph also stated that the use of any planning obligation shall follow the guidance in the Circular. Section 7 of the SG explained that the contributions would be used only to fund the transport interventions which it listed. Para 7.3 stated: No contributions from development sites will be used to support projects where the development in question is predicted to gain no mitigation benefit from the infrastructure being provided and therefore is un related to the development making the contribution. The CTA has shown that the delivery of each of the projects identified above is necessary to make all developments acceptable in planning terms (see appendix 2). (emphasis added) Appendix 2 summarised the CTA and listed the cumulative infrastructure requirements which it had identified. It reproduced as Table 3 the revised table 7.2 of the CTA, which had been prepared in response to the reporters criticism (para 7 above) that it had not been demonstrated that there was a clear and direct relationship between the development contributing to the Fund and the infrastructure which would be delivered. But that table showed the traffic generated by each development which would use the infrastructure at the identified hotspots as a percentage of the total traffic generated by that development. For example, the table showed the following in relation to the Elsick site: A944 New A947 A96 Development Zone East of Bridge of Dee AWPR 0.79% 8.39% 0.10% 0.76% Kingswells North Persley Bridge 1.46% 3.45% Elsick Thus, taking the columns on the left, the table showed that 3.45% of the traffic which the Elsick development would generate would use Persley Bridge and 0.10% of that traffic would use the A947. The previous table 7.2 in the CTA was more informative about the impact of the proposed developments on the infrastructure. It showed the percentage of the total traffic using the new infrastructure at the identified hotspots which the traffic generated by each proposed development was estimated to create. For example, in relation to the Elsick development, it had shown that the percentage of the total traffic predicted to use the same infrastructure as the following: Kingswells Development Zone North Persley Bridge A947 A96 East of AWPR 1% 0% A944 New Bridge of Dee 7% 1% Elsick 1% 2% It also showed that 2% of the traffic on the Loirston Link would be generated by the Elsick development and 79% of the traffic on the Elsick Fastlink. In relation to a separate development at Blackdog the original table 7.2 of the CTA showed that 1% of the traffic on the A947 would be attributable to that site and 0% of the traffic on all of the other listed infrastructure. Paragraph 7.4 explained that the contributions would be used to deliver the specified transport interventions. It stated: Nestrans as the Regional Transport Partnership will hold and administer contributions in a strategic transport fund. As contributions are received they will be placed into a ring fenced account. The monies in this account will only be available for delivering the strategic transport projects listed above, including detailed assessment, development and design work. The challenge Elsick appealed against the adoption of the SG to the Inner House of the Court of Session under section 238 of the 1997 Act. On 29 April 2016 the First Division of the Inner House (The Lord President (Lord Carloway), Lord Menzies and Lord Drummond Young) allowed the appeal and quashed the SG: [2016] CSIH 28. The First Division upheld three of the four grounds of appeal which Elsick advanced. First, the court upheld the submission that the Authority had failed to comply with national policy on the use of planning obligations, holding that it was a fundamental principle of planning law, which was reflected in the Circular, that a condition attached to the grant of a planning permission, whether contained in a planning obligation or otherwise, must fairly and reasonably relate to the permitted development. The First Division accepted the distinction, which the reporter had drawn, between the sharing of costs among developments which had cumulatively required a particular investment in transport infrastructure on the one hand and the funding of a basket of measures, not all of which were relevant to every development. The court referred (in para 35 of its opinion) to the original Table 7.2 and held that many of the planned developments had no impact at all on several of the proposed infrastructure interventions. It added: [t]his applies to both Elsick and Blackdog relative to a number of the interventions. In respect of others the impact is de minimis. The result was that the additional sentence in the SG about complying with the guidance in the Circular, which was added at the request of the Scottish Ministers (para 11 above), could not prevent the obligation to contribute to the Fund, in which contributions were pooled, from breaching the Circular. The First Division also upheld Elsicks submission that there was no rational basis for relying on Table 3 of Appendix 2 of the SG (ie the revised table 7.2 of the CTA) to support the contention that a particular intervention was made necessary by reason of either a particular development or the cumulative effect of it along with other developments. The Authority applied for and was given permission to appeal to this court arguing that the policy tests in the Circular were not part of the legal tests for the validity of a planning obligation, that the Inner House had taken an unduly restrictive approach to policy, and that the Authority had substantially complied with the Circular when the SG afforded the opportunity to a developer to make mitigation contributions to infrastructure wholly outside the Fund (para 5.4 of the SG, which is set out in para 13 above). This court refused to allow the Authority to argue that the Inner House had erred in law and fact in finding that many of the planned developments, such as Elsick and Blackdog, have no impact on some of the proposed interventions and, in the case of Elsick and Blackdog, the impact on some other interventions is de minimis, because that was a finding of fact, based on the original table 7.2 of the CTA, the contents of which were not disputed. Discussion The central issue in this appeal is the lawfulness of the planning obligation which Elsick has entered into in conformity with the requirements of the SG. The Authority challenges the First Divisions conclusion that the tests applicable to a planning condition are properly to be applied to a planning obligation. To address this challenge I examine (i) the correct legal test as to the lawfulness of a planning condition, (ii) the correct legal test as to the lawfulness of a planning obligation, (iii) the role of a planning obligation in the decision to grant or refuse planning permission, and (iv) the boundary between questions of legality and questions of policy. I set out the legislative background before turning to each of the four questions. Finally, I will apply the answers to those questions to the facts in this appeal. The legislative background The 1997 Act was amended extensively by the Planning etc (Scotland) Act 2006 to provide in Part 2 for strategic development planning: see section 2 of the 2006 Act. Section 4 of the amended 1997 Act empowers the Scottish Ministers to designate a group of planning authorities as authorities which are jointly to prepare a strategic development plan for the area which the Scottish Ministers determine (section 5(3)). Section 7 provides that a strategic development plan is to include a vision statement, which is to be a broad statement setting out the strategic development planning authoritys views on how development could and should occur in its area and the matters, including infrastructure, which might affect that development. The 1997 Act provides for the preparation and publication of a proposed strategic development plan (section 10), the appointment by the Scottish Ministers of a reporter to examine the proposed plan (section 12), the approval or rejection of the proposed plan by the Scottish Ministers (section 13), and, on such approval, the publication of the constituted strategic development plan. Section 22 empowers a strategic development planning authority to adopt and issue supplementary guidance in connection with a strategic development plan, which guidance has to be submitted to the Scottish Ministers who can by notice require the authority to modify it. The Town and Country Planning (Development Planning) (Scotland) Regulations 2008 (SSI 2008/426) provide (in regulation 27(2)) that such supplementary guidance may only deal with the provision of further information or detail in respect of the policies or proposals set out in [the] plan and then only provided that those are matters which are expressly identified in a statement contained in the plan as matters which are to be dealt with in supplementary guidance. Section 24 defines the development plan, which is an important concept in relation to decisions taken under the planning Acts, as including the provisions of the approved strategic development plan for the time being in force for the area and also the supplementary guidance issued in connection with that plan. The central importance of the development plan to planning decisions can be seen in two provisions of the 1997 Act. First, section 25(1) provides: Where, in making any determination under the planning Acts, regard is to be had to the development plan, the determination is, unless material considerations indicate otherwise (a) to be made in accordance with that plan Secondly, section 37(2) provides: In dealing with [an application for planning permission] the authority shall have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations. Sections 25(1) and 37(2) in combination set up what has been called a presumption that the development plan is to govern the decision on an application for planning permission: City of Edinburgh Council v Secretary of State for Scotland 1998 SC (HL) 33, 43G; [1997] 1 WLR 1447, 1458 per Lord Clyde. I will return to these two provisions when I consider question (ii) below. to section 37(1) which provides: In order to address question (i) (the lawfulness of a planning condition) I refer Where an application is made to a planning authority for planning permission (a) they may grant planning permission, either unconditionally or subject to such conditions as they think fit, and section 41(1) which provides so far as relevant: Without prejudice to the generality of section 37(1) to (3), conditions may be imposed on the grant of planning permission under that section a) for regulating the development or use of any land under the control of the applicant (whether or not it is land in respect of which the application was made) or requiring the carrying out of works on any such land, so far as appears to the planning authority to be expedient for the purposes of or in connection with the development authorised by the permission; for requiring the removal of any buildings or b) works authorised by the permission, or the discontinuance of any use of land so authorised, at the end of a specified period, and the carrying out of any works required for the reinstatement of land at the end of that period. Of direct relevance to question (ii) (the lawfulness of a planning obligation) is section 75 (as substituted by section 23 of the 2006 Act) which, so far as relevant, provides: (1) A person may, in respect of land in the district of a planning authority (a) by agreement with that authority, or (b) unilaterally, enter into an obligation (referred to in this section and in sections 75A to 75C as a planning obligation) restricting or regulating the development or use of the land, either permanently or during such period as may be specified in the instrument by which the obligation is entered into (referred to in this section and in those sections as the relevant instrument) (2) Without prejudice to the generality of subsection (1), the reference in that subsection to restricting or regulating the development or use of land includes (a) requiring operations or activities specified in the relevant instrument to be carried out in, on, under or over the land, or (b) requiring the land to be used in a way so specified. (3) A planning obligation may (b) require the payment (i) of a specified amount or an amount determined in accordance with the relevant instrument. Section 75(5) provides that a relevant instrument, to which the owner of the land is a party, may be recorded in the Register of Sasines or registered in the Land Register of Scotland so that the planning authority may enforce certain obligations in the instrument against both the owner and his successors in title. Sections 75A and 75B provide for the modification and discharge of planning obligations by agreement with the planning authority or by the determination of the Scottish Ministers on an appeal. Question (i): the lawfulness of a planning condition A planning condition is a statutory creation. Section 37(1) of the 1997 Act (para 26 above) and similar legislative provisions in England and Wales (section 70(1) of the Town and Country Planning Act 1990 (the 1990 Act)) authorise a planning authority to impose planning conditions when it grants a planning permission. The apparently unlimited power (subject to such conditions as they think fit) has long been interpreted restrictively by the courts to prevent its abuse. The courts have formulated three principal constraints. First, the conditions must be imposed for a planning purpose and not solely to achieve some ulterior object, however desirable in the public interest that object may be. Secondly, the conditions must fairly and reasonably relate to the permitted development. Thirdly, the conditions must not be unreasonable in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223, 233 234). The first constraint arises from the statutory origin of the power of a planning authority to impose conditions: administrative law provides that it must be exercised for the purposes of the 1997 Act, namely planning purposes. The second constraint was first articulated by Lord Denning in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554, 575. His statement has been endorsed on several occasions by the House of Lords in Fawcett Properties Ltd v Buckingham County Council [1961] AC 636, Mixnams Properties Ltd v Chertsey Urban District Council [1965] AC 735, and Newbury District Council v Secretary of State for the Environment [1981] AC 578. It arises from the statutory context of the power in section 37: a planning authority is tasked with determining an application for planning permission on its merits having regard to the development plan so far as relevant and other material considerations; the power to attach conditions to the permission is an inherent part of the power to grant permission for the development of land; therefore the conditions imposed on the grant of that permission must relate to the development for which permission is given. The third constraint is a feature of our administrative law. The second legal requirement that a condition must fairly and reasonably relate to the development requires there to be a reasonably close relationship between the development and the condition which governs it. In British Airports Authority v Secretary of State for Scotland 1979 SC 200 the Inner House looked for a clear relationship between the condition and the permitted development (218 per the Lord President (Emslie)) or a recognised and real relationship that is fair and reasonable (220 per Lord Cameron). Such a relationship between a condition and the permitted development existed where a planning authority imposed a negative suspensive condition, that development of a site should not commence until an event had occurred which the developer alone did not have power to bring about. In Grampian Regional Council v Secretary of State for Scotland and City of Aberdeen District Council 1984 SC (HL) 58 the House of Lords upheld the validity of such a condition which overcame an objection to a proposed industrial development on the ground of road traffic safety. The condition was that the development of the site could not commence until the road on the western boundary of the site had been closed by a road closure order which the Secretary of State would have to confirm. In the leading speech, Lord Keith of Kinkel (pp 66 67) accepted the three tests which I have stated in para 28 above and which have come to be associated with the Newbury case and held that the condition met the third test because it was not unreasonable to impose such a condition which was in the public interest and where there were reasonable prospects that a road closure order would be confirmed. The three fold legal test for validity, having been repeatedly approved by judges at the highest level, is an established part of planning law. Other rules of administrative law, such as the requirement to take account of all relevant considerations and not to take account of irrelevant considerations in decision making, apply to a decision to impose a particular condition. Question (ii): the lawfulness of a planning obligation A planning obligation also is a statutory creation. As with a particular planning condition, the lawfulness of a particular obligation depends upon (i) the wording of the statute, and (ii) the rules of our administrative law. Section 75 of the 1997 Act, like its predecessor legislation (section 50 of the Town and Country Planning (Scotland) Act 1972), requires that the obligation restricts or regulates the development or use of the land to which it relates. As section 75(3)(b) shows, the planning obligation can include the payment of money. Prima facie the planning authority is given a wide discretion as to the circumstances in which it can seek a planning obligation and the nature of that obligation. While it is not uncommon for planning authorities to duplicate some planning conditions in a section 75 agreement and thereby obtain an alternative means of enforcement, planning obligations also enable a planning authority to control matters which it might otherwise have no power to control by the imposition of planning conditions. Planning obligations are most commonly required in the context of an application for planning permission, but they are not confined to such circumstances and are available as a means of keeping land free from any development. It is not surprising therefore that there is no general legal requirement that there be a relationship to a permitted development. In Good v Epping Forest District Council [1994] 1 WLR 376, in which Ralph Gibson LJ delivered the leading judgment, the Court of Appeal addressed the question whether a planning authority could validly achieve by agreement any purpose which it could not validly achieve by planning condition or whether the test for validity was the same in each case. In substance, the Court held that the powers of a planning authority to bring about a planning obligation were not controlled by the nature and extent of its statutory powers to grant planning permission subject to conditions (p 387C). A planning obligation did not have to relate to a permitted development. In Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759, which I discuss more fully when addressing question (iii) below, both Lord Keith of Kinkel (769B C) and Lord Hoffmann (779C D) referred with approval to the judgment of the Court of Appeal in Good v Epping Forest District Council (above). Lord Hoffmann (779D) summarised the case thus: the only tests for the validity of a planning obligation outside the express terms of section 106 [of the 1990 Act] are that it must be for a planning purpose and not Wednesbury unreasonable. Thus beyond the restrictions implicit in the words of the section there are only the constraints of administrative law, which requires the planning authority to exercise its power to seek a planning obligation for a planning purpose: its exercise solely for a purpose unrelated to land use planning would be an abuse of power. Similarly, if a local planning authority acts unreasonably in the Wednesbury sense in requiring the undertaking of a planning obligation, the obligation may be reduced (nullified). Other rules of administrative law, such as the requirement to take into account all relevant considerations, also apply. The express words of section 75 require a relationship between the planning obligation and the land to be burdened by the obligation because the obligation must in some way restrict or regulate the development or the use of that land. But those restrictions or regulation do not necessarily relate to a particular permitted development on the burdened land. A planning obligation may prohibit the development of the land in a particular way or the use of the land for particular purposes. A planning obligation may keep the burdened land free from any development and may be entered into in circumstances which are not connected with any planning application. Restrictions may validly be imposed in the context of the development of another site. Thus, to take an example discussed in Good v Epping Forest District Council, the owner of two farms, A and B, within the area of a planning authority might apply for planning permission to develop and operate an intensive breeding establishment on farm A. The owner of the farms might offer, or the planning authority might require, a section 75 planning obligation preventing the use of farm B for that purpose. The restriction would relate to farm B and would be justified for the planning purpose of preventing an undesirable number of such establishments in the same area. A planning obligation may also regulate the development or use of the burdened site. An example, in the context of a planning application, is where a planning obligation requires the developer to provide affordable housing as a component of a development on its site or to create specified infrastructure on its land to meet the needs of that development. Similarly, a planning authority may contract for the payment of financial contributions towards, for example, educational facilities, healthcare facilities, sewerage or waste and re cycling: requiring a development to contribute to, or meet, its own external costs in terms of infrastructure involves regulating the development of the land which is burdened by the obligation. The financial contribution can be applied towards infrastructure necessitated by the cumulative effects of various developments, so long as the land which is subject to the planning obligation contributes to that cumulative effect and thereby creates a sufficient relationship between the obligation in question and the land so that one can fairly speak of the obligation as regulating the development of the land. In each of the examples in paras 38 41 above the restriction or regulation serves a purpose in relation to the development or use of the burdened site. In this appeal a question of principle arises: can a restriction or regulation of a site be imposed in the form of a negative suspensive planning obligation, analogous to the negative suspensive planning condition in the Grampian Regional Council case, for a purpose which does not relate to the development or use of the site? In particular, is it lawful by planning obligation to restrict the commencement of the development of a site until the developer undertakes to make a financial contribution towards infrastructure which is unconnected to the development of the site? Alternatively, is it lawful to require contributions towards such infrastructure in a planning obligation which does not restrict the development of the site by means of a negative suspensive obligation? The answer to each question is no. Dealing first with the latter question, a planning obligation which required a developer to contribute to infrastructure unconnected with its development but did not make the payment of the contribution a pre condition of development of the site would not fall within section 75 as it would neither restrict nor regulate the development or use of the site. In Tesco Stores Ltd v Secretary of State for the Environment (1994) 68 P & CR 219, Beldam LJ (pp 234 235) stated: In section 106(1) [of the 1990 Act] the obligations referred to in subsections (a), (b) and (c) clearly relate to the land in which the person entering into the obligation is interested. The obligation entered into by a person interested in land under subsection (d) to pay money to the authority is not expressed to be restricted to the payment of money for any particular purpose or object. But all the planning obligations are, by section 106(3), enforceable not only against the person entering into the obligation but also against his successors in title to the land. Against the background that it is a fundamental principle that planning permission cannot be bought or sold, it does not seem unreasonable to interpret subsection (1)(d) so that a planning obligation requiring a sum or sums to be paid to the planning authority should be for a planning purpose or objective which should be in some way connected with or relate to the land in which the person entering into the obligation is interested. In my view, this analysis is equally applicable to section 75 of the 1997 Act which, in so far as is relevant, is in substantially similar terms as section 106 of the 1990 Act (as substituted by section 12(1) of the Planning and Compensation Act 1991) as the obligations in section 106(1)(a) (d) are reflected in section 75(1)(2) and (3)(b). A planning obligation, which required as a pre condition for commencing development that a developer pay a financial contribution for a purpose which did not relate to the burdened land, could be said to restrict the development of the site, but it would also be unlawful. Were such a restriction lawful, a planning authority could use a planning obligation in the context of an application for planning permission to extract from a developer benefits for the community which were wholly unconnected with the proposed development, thereby undermining the obligation on the planning authority to determine the application on its merits. Similarly, a developer could seek to obtain a planning permission by unilaterally undertaking a planning obligation not to develop its site until it had funded extraneous infrastructure or other community facilities unconnected with its development. This could amount to the buying and selling of a planning permission. Section 75, when interpreted in its statutory context, contains an implicit limitation on the purposes of a negative suspensive planning obligation, namely that the restriction must serve a purpose in relation to the development or use of the burdened site. An ulterior purpose, even if it could be categorised as a planning purpose in a broad sense, will not suffice. It is that implicit restriction which makes it both ultra vires and also unreasonable in the Wednesbury sense for a planning authority to use planning obligations for such an ulterior purpose. It is, perhaps, surprising that the legal boundaries of a planning obligation have not been the subject of more extensive judicial comment, beyond the cases discussed in Good v Epping Forest District Council, the comment by Beldam LJ in the Court of Appeal in Tesco (para 43 above), and the opinion of Lord MacLean in McIntosh v Aberdeenshire Council 1999 SLT 93 (which upheld the validity of a planning obligation to build an estate road to serve the owners development of his land and also to facilitate the development of neighbouring land in third party ownership) when the risk of misuse of planning obligations has long been recognised as a matter of policy. There were concerns that some planning authorities were tempted to make exorbitant demands for what has been called planning gain, to confer benefits on the community which were not part of the developers original proposal. A developer in order to obtain a planning permission might be forced to incur disproportionate costs in providing such gains which were unrelated or insufficiently related to its development or otherwise suffer the delay and expense of an appeal to the Scottish Ministers. This practice risked bringing the planning system into disrepute. In 1981, in a report to the Secretary of State for the Environment called Planning Gain, the Property Advisory Group advised that planning obligations be used only to overcome legitimate planning objections to an application for planning permission and that the practice of bargaining with developers for planning gain was unacceptable. The report, which was criticised for taking too narrow an approach to the planning process, advocated that the Secretary of State should issue guidance. The Department of the Environment and the Welsh Office produced such guidance in 1983 in circular 22/83, which sought to control rather than exclude the pursuit of planning gain. In Scotland, the Scottish Development Department issued a circular in 1984, entitled Section 50 Agreements (SDD circular 22/1984). Current guidance on the use of planning obligations in Scotland is contained in the Circular (para 5 above). As I explain when addressing question (iv) below, this guidance, while an important statement of national policy, does not have the force of law. There was also a perceived risk that developers, who were each promoting a different site in a competition for what might be an exclusive permission to develop one of the sites, would offer to enter into an obligation with the planning authority to fund infrastructure or other community facilities which were unrelated or only marginally related to their developments. This practice similarly threatened to bring the planning system into disrepute, by creating the impression that they were buying planning permissions. In the heady days of the store wars, major supermarket chains competed with each other before planning authorities and in planning appeals to obtain permission to develop rival sites up and down the United Kingdom. This competition, which often involved offers to provide planning gain, led to authoritative judicial guidance on the relevance of a planning obligation to the grant or refusal of a planning permission, which I now consider under question (iii). Question (iii): the role of the planning obligation in the grant or refusal of planning permission What is the role of a planning obligation in the decision to grant or refuse planning permission? In Scotland that decision is governed by section 37(2) of the 1997 Act which requires that the planning authority have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations (para 25 above). In Tesco Stores Ltd v Secretary of State for the Environment (above) the House of Lords, when considering a legislative provision in identical terms (section 70(2) of the 1990 Act), gave guidance on the relevance of a planning obligation to the grant or refusal of planning permission. That guidance is not challenged in this appeal. In the leading speech, which Lord Keith of Kinkel delivered, the House held that for a planning obligation to be a material consideration, which it interpreted as a relevant consideration (764G), in the decision whether to grant planning permission, the obligation must have some connection with the proposed development which is not de minimis (ie too trifling for the law to be concerned with it). In what follows, I paraphrase the Latin phrase as trivial. Lord Keith described the relevance of a planning obligation in these terms (770A B): An offered planning obligation which has nothing to do with the proposed development, apart from the fact that it is offered by the developer, will plainly not be a material consideration and could be regarded only as an attempt to buy planning permission. If it has some connection with the proposed development which is not de minimis, then regard must be had to it. In that case, developers, including Tesco and Tarmac, which was associated with Sainsburys, competed to obtain planning permission for their sites for a superstore outside the centre of Witney in Oxfordshire. The Witney local plan proposed a new link road, including a new river crossing, to relieve traffic congestion. Tesco entered into a planning obligation with the planning authority under section 106 of the 1990 Act to fund that road. The Secretary of State on appeal favoured the Tarmac site and refused permission to the Tesco application, holding that the link road was not needed to enable any of the food stores to be developed or so directly related to any of the developments or the use of the land after completion that any of the developments should not be permitted without it. Tesco appealed under section 288 of the 1990 Act, arguing that the Secretary of State had erred in law in not treating the offer to fund in the planning obligation as a material consideration. The House held that the Secretary of State had correctly had regard to the offer but had chosen in the exercise of his planning judgement to attach little weight to it and so had not erred in law. No challenge was made in Tesco, in the House of Lords or in the courts below it, to the validity of the planning obligation: the question whether the obligation regulated the development of Tescos site was not put in issue and only Beldam LJ commented on the legality of an obligation to contribute money (para 43 above). The inclusion of a policy in the development plan, that the planning authority will seek such a planning obligation from developers, would not make relevant what otherwise would be irrelevant. Section 37(2) (para 25 above) requires the planning authority to have regard to the provisions of the development plan so far as material to the application and treats its provisions as a relevant consideration only to that extent. Thus, a green belt policy will be relevant to an application if the site of the application falls within the specified green belt and a requirement that a certain amount of open space is provided in a proposal for residential development will be relevant to an application for residential development. Similarly, a requirement in the plan that an applicant should agree to contribute to the cost of offsite infrastructure, which is related to its development, will be relevant to the application. But the words, which I have emphasised, mean that if a planning obligation, which is otherwise irrelevant to the planning application, is sought as a policy in the development plan, the policy seeking to impose such an obligation is an irrelevant consideration when the planning authority considers the application for planning permission. It is important to recall that the question whether a benefit conferred by a planning obligation is a material consideration in the determination of an application for planning permission is quite separate from the question whether a planning obligation restricts or regulates the development or use of a particular piece of land. Thus, to use the example of the farmer with two farms, A and B. He wishes to develop farm A and is prepared to enter into a planning obligation to restrict the development or use of farm B in the context of his negotiation of a permission for farm A. The legality of the planning obligation in relation to farm B will depend, among other things, on whether it restricts or regulates the development or use of farm B. The relevance of the planning obligation to the determination of the application in relation to farm A depends upon there being a more than trivial connection between the benefit conferred by controlling farm B and the development of farm A, as the Tesco case decided. Question (iv): The boundary between questions of legality and questions of policy Relevant ministerial guidance which sets out national planning policy is unquestionably a material consideration for any planning authority when it determines applications for planning permission. A failure by a planning authority to take into consideration national guidance, such as that in the Circular (para 5 above) on the tests which a planning authority should apply when deciding whether to seek a planning obligation, would be unlawful. Further, if a planning authority were to depart from national planning guidance when refusing an application for planning permission, it might risk an appeal by the disappointed applicant to the Scottish Ministers. But a decision by the planning authority is not illegal if it departs from ministerial guidance in a planning circular, provided that the authority has treated that guidance as a relevant consideration when it reached its decision. In Tesco (above) Lord Hoffmann pointed out (780F G) that the law has always made a clear distinction between the question of whether something is a material consideration and the weight which it should be given. The former is a question of law; the latter is a matter for the planning judgement of the planning authority. Accordingly, a failure by a planning authority to have regard to relevant guidance as a material planning consideration would be an error of law. A decision, after considering the guidance, not to follow it, would (absent another ground of challenge in administrative law) be a matter of planning judgement, in which the courts have no role. The legality of Elsicks planning obligation What is the nature of the scheme which the SG has established? First, it involves the payment by developers of financial contributions towards the funding of specified transport infrastructure in and around Aberdeen, principally through the mechanism of planning obligations. It involves the pooling of the contributions and no one developer is liable for the costs of any of the specified interventions (paras 1.5 and 3.3 and Appendix 2). Secondly, the obligation to contribute to the Fund is in addition to the requirement that a developer mitigate impacts specific to its development (para 4.8). Thirdly, the contributions from residential developers are fixed at a sum per unit (Table 1 summarised in para 12 above). Fourthly, those payments are not tied to the impact of a particular development on the transport network. The original table 7.2 in the CTA suggested that there was no connection between traffic generated by certain developments and the need to intervene at particular hotspots. The revised table 7.2 which is referred to in para 7.3 of the SG and reproduced in Appendix 2 shows that some vehicles from each of the developments will use the proposed infrastructure but in many cases such use is at a very low level. Fifthly, the opt out which para 5.4 of the SG offers (para 13 above) does not make the scheme voluntary in any real sense. The developer is still expected to provide a contribution towards the cumulative impact of the developments on infrastructure over and above the impact of its individual development and the paragraph understandably expresses doubt whether a developer could create the needed assessment, design and provide for the necessary mitigation measures. Unless a developer were able to perform this daunting task and persuade the planning authority that it was robust, it is clear that the scheme envisages that it would not obtain planning permission for its development. Sixthly, the statement in para 6.1 that the use of any planning obligation shall follow the guidance in the Circular is inconsistent with the nature of the scheme. This is because the pooling of fixed per unit contributions towards the funding of infrastructure interventions, which include many on which a particular developments impact is minimal, does not meet the criterion in the Circular that the obligation is fairly and reasonably related in scale and kind to the proposed development. The statement which the Scottish Ministers inserted into the SG therefore is no safeguard. As the Lord President has observed, there appears to be much that can be said in favour of such a scheme. It enables a planning authority to facilitate development within its area. Inclusion of such a scheme in a development plan allows a public debate during the statutory process of the approval of the plan. The scheme allows developers in the area to assess the viability of their proposed developments knowing the extent of their liability to the Fund before they spend large sums pursuing their applications. In England and Wales Part 11 of the Planning Act 2008, which provided for a community infrastructure levy, was enacted to achieve similar ends. But the 1997 Act does not allow for such a scheme. The Inner House has found that the connection between certain developments, including the development at Elsick, and some of the interventions which the pooled Fund is intended to finance is at best trivial. The illegality of the scheme is not because it does not comply with the Circular. The guidance in the Circular is simply a material consideration which the planning authority must take into account when deciding whether to grant planning permission. The weight which the planning authority attaches to such guidance is a matter of planning judgement. The scheme of the SG and the planning obligations which it promotes are unlawful for two separate reasons. First, the requirement imposed on a developer to contribute to the pooled Fund, which is to finance the transport infrastructure needed to make acceptable all of the developments which the development plan promotes, entails the use of a developers contribution on infrastructure with which its development has no more than a trivial connection and thus is not imposed for a purpose in relation to the development and use of the burdened site as section 75 requires. Further, the Council did not include any provision in the planning obligation restricting the development of the Elsick site until a contribution was made. Instead it resolved to grant planning permission for the development but to issue that permission only once Elsick had entered into the obligation. The planning obligation was therefore neither restricting nor regulating the development of the Elsick site and so was outside the ambit of section 75. Secondly, Tesco (above) establishes that for a planning obligation, which is to contribute funding, to be a material consideration in the decision to grant planning permission, there must be more than a trivial connection between the development and the intervention or interventions which the proposed contribution will fund. The planning obligation which Elsick entered into could not be a relevant consideration in the grant of the planning permission. In my view, it was not within the power of the planning authority to require a developer to enter into such an obligation which would be irrelevant to its application for permission as a precondition of the grant of that permission. If planning authorities in Scotland wish to establish a local development land levy in order to facilitate development, legislation is needed to empower them to do so. Conclusion I would dismiss the appeal.

The Appellant is a strategic development planning authority for the Aberdeen region. In February 2013, it produced draft supplementary planning guidance in support of its proposed strategic development plan for its area. This guidance allowed for a Strategic Transport Fund (the Fund) to deliver infrastructure needed because of proposed development in four strategic growth areas. In substance, the guidance required developers to enter into planning obligations under the Town and Country Planning (Scotland) Act 1997 (the 1997 Act) with the Appellant to make financial contributions to the Fund. Such contributions were to be pooled and spent on required infrastructure. The Respondent property developer objected to the draft supplementary planning guidance. It sought removal of reference to the Fund from the proposed strategic development plan on the basis that it was contrary to Scottish Government guidance on planning obligations (The Circular). The Respondent asserted that the contribution it was required to pay to the Fund was disproportionate to the infrastructure demands created by its development. In the meantime, the Respondent voluntarily entered into a planning obligation under s75 of the 1997 Act to contribute to the Fund in terms of the draft supplementary guidance but on the basis that no contributions would be paid if the guidance was found to be invalid. The Appellant adopted the supplementary guidance after making an amendment advised by the Scottish Ministers to the effect that the use of any planning obligation should follow the advice in the Circular. As adopted, the supplementary guidance listed the cumulative infrastructure requirements identified by the cumulative transport appraisal (CTA) for the area. These requirements had been revised following criticism by the Reporter appointed by the Scottish Ministers that it had not been demonstrated that there was a clear and direct relationship between the development contributing to the Fund and the infrastructure which would be delivered. Upon appeal by the Respondent, the Inner House of the Court of Session quashed the supplementary guidance on the basis that, notwithstanding the amendments made thereto, the obligation to contribute to the pooled Fund breached the Circular and such a planning obligation must fairly and reasonably relate to the permitted development. The Appellant appealed to the UKSC and argued, amongst other things, that the policy tests in the Circular were not part of the legal tests for the validity of a planning obligation. The Supreme Court unanimously dismisses the Appellants appeal. Lord Hodge gives the lead judgment with which the other Justices agree. An approved strategic development plan is of central importance to planning decisions under the 1997 Act [25]. Supplementary guidance deals with the provision of further information in respect of proposals set out in the plan [24]. Planning obligations in terms of s75 of the 1997 Act do not necessarily need to relate to a particular permitted development on the burdened land. A planning obligation may be entered into in circumstances which are not connected with any planning application [38]. For instance, a planning authority may contract for the payment of financial contributions towards certain infrastructure necessitated by the cumulative effect of various developments, so long as the land which is subject to the obligation contributes to that cumulative effect [41]. However, it is not lawful to restrict the commencement of development by planning obligation until the developer undertakes to make a financial contribution towards infrastructure which is unconnected with the development of the site [42 43]. If such a planning obligation were lawful, an authority could use an application to extract benefits which are unrelated to the proposed development [44]. Moreover, it is not lawful to require contributions towards such infrastructure in a planning obligation which does not restrict the development of the site by means of a negative suspensive condition, as such a planning obligation would neither restrict nor regulate the development of the site in terms of s75 [43]. In determining a planning application, the authority must take into consideration material provisions of the development plan and other material considerations. For a planning obligation to be material it must have some connection with the proposed development which is not trivial [47 48]. If a planning obligation, which is otherwise irrelevant to the application, is sought as a policy in the development plan, the policy seeking to impose such an obligation is an irrelevant consideration for determination of the planning application [51]. In the instant case, the scheme established in the supplementary guidance involved the pooling of payments which were not tied to a particular development [56]. The opt out did not make the scheme voluntary in any real sense [57]. The 1997 Act does not allow for such a scheme. The supplementary guidance and the planning obligations which it promotes are unlawful for two reasons [60]. Firstly, the use of the developers contribution to the pooled Fund on infrastructure with which its development has no more than a trivial connection means that the planning obligation is not imposed for a purpose related to the development and use of the burdened site as required by s75, [61] nor did the planning obligation restrict or regulate the development within the meaning of s75 [62]. Secondly, the planning obligation entered into by the Respondent was an irrelevant consideration in terms of a planning application because there was only a trivial connection between the development and the infrastructure intervention(s) which the proposed contribution would fund. An authority is not empowered to require a developer to enter into an obligation which would be irrelevant to an application for permission as a precondition of the grant of that permission [63]. The scheme was not unlawful because it did not comply with the Circular. The Circular was simply a material consideration which was required to be taken into account but not necessarily followed [53 54; 60].

This appeal is concerned with the law of unjust enrichment and subrogation. The original parties to the action were Melissa Menelaou as claimant (Melissa), the Bank of Cyprus UK Ltd as defendant (the Bank) and a firm of solicitors, Boulter & Co, as third party (Boulters). The trial of the action came before David Donaldson QC, sitting as an additional judge of the Chancery Division (the judge): [2012] EWHC 1991 (Ch). The trial began on 16 May 2012 and lasted three days. By the end of the trial only the Banks counterclaim against Melissa was live. On 19 July 2012 the judge handed down a judgment dismissing the counterclaim. The Bank appealed to the Court of Appeal (Moses, Tomlinson and Floyd LJJ), which allowed the appeal on 4 July 2013: [2013] EWCA Civ 1960, [2014] 1 WLR 854. Melissa appeals to this court. The background facts The facts can largely be taken from the agreed statement of facts and issues. Melissa, who was born on 27 January 1990, is the second of the four children of Mr Parris and Mrs Donna Menelaou (the Menelaou parents). The other children were Danielle, born on 9 August 1986, Max, born on 24 June 1991 and Ella Mae, born on 6 February 2002. In mid 2008, the Menelaou parents and their three youngest children lived at Rush Green Hall, Great Amwell, Hertfordshire (Rush Green Hall), which was a property owned by the Menelaou parents jointly. Melissa was 18 and a student at a nearby college. Rush Green Hall was subject to two charges in favour of the Bank. The Menelaou parents directly owed the Bank about 2.2m, and had personally guaranteed loans made by the Bank to their companies. The Menelaou parents decided to sell Rush Green Hall, to apply some of the proceeds to buy a smaller property as the family home, to provide funds for Danielle to pay the deposit on a house which she wanted to buy with her future husband and to free up capital to invest in a further development project. The Menelaou parents instructed Boulters to act for them in the conveyancing transaction. The senior partner of Boulters was Mr Menelaous sister. They used Mr Paul Cacciatore, who was employed by Boulters as a legal executive and who was also one of Mr Menelaous brothers in law. On 15 July 2008 contracts were exchanged for the sale of Rush Green Hall for the price of 1.9m. The contractual purchasers of Rush Green Hall paid a deposit of 190,000 to Boulters for the account of the Menelaou parents. About a week later, Mr Menelaou informed Mr Cacciatore that he had found a new property to serve as the family home at 2 Great Oak Court, Hunsdon, Hertfordshire (Great Oak Court). On 24 July 2008 contracts were exchanged for the purchase of Great Oak Court for the price of 875,000. On Mr Menelaous instructions, the purchaser of Great Oak Court was to be Melissa. The deposit payable was 87,500. This deposit was paid from the 190,000 held by Boulters as the deposit for the sale of Rush Green Hall. Mr Menelaou told Melissa that Great Oak Court was being bought in her name as a gift to her, on the basis that she would hold the property for the benefit of herself and her two younger siblings. She agreed to the arrangement. The Bank was not approached about the proposed arrangement prior to the exchanges of contracts. The Bank sanctioned the proposed arrangements with some reluctance given the overall indebtedness of the Menelaou parents and their companies. On 5 September 2008 Boulters wrote to the Bank saying that it understood that the Bank was to take a charge over Great Oak Court from Melissa, which Boulters understood would be a third party charge. Completion was to be on 12 September. On 9 September 2008 the Bank wrote to Boulters in these terms: Thank you for your letter dated 5 September 2008. We confirm that upon receipt of 750,000 we will release our charges over [Rush Green Hall] subject to a third party legal charge over [Great Oak Court] which is registered in the name of Melissa Menelaou. Melissa was not aware of the Banks intention to take any charge over Great Oak Court. The Bank also instructed Boulters to act as its solicitors to deal with the discharge of its charges over Rush Green Hall and to obtain a charge in favour of the Bank over Great Oak Court. On 10 September 2008 Boulters replied to the Banks letter of 9 September enclosing a certificate of title undertaking to obtain an executed mortgage in Melissas name over Great Oak Court and to confirm that they had complied or would comply with the Banks instructions. On 11 September 2008 Boulters sent the Bank a form of legal charge over Great Oak Court, purportedly signed by Melissa and identifying her as the customer. It was (and is) Melissas case, supported by her brother and by handwriting evidence, that the signature on the charge was not hers. Indeed, she was unaware of the existence of the charge until 2010. On the same day, 11 September 2008, the Bank telephoned Boulters and pointed out that the identity of the customer in the charge should be the Menelaou parents and not Melissa. Boulters did not contact Melissa. Instead, an employee of Boulters simply changed the name of the customer in manuscript on the charge from that of Melissa to those of the Menelaou parents. On 12 September 2008 completion of the sale of Rush Green Hall by the Menelaou parents and the purchase of Great Oak Court by Melissa both took place. As part of the completion process, Boulters received the balance of the price of Rush Green Hall from its purchasers. They remitted 750,000 to the Bank and sent a further 785,000 to the vendors of Great Oak Court to meet the remaining 90% of the purchase price for Great Oak Court. Boulters also sent the Bank two deeds to be sealed by the Bank authorising the cancellation of the entries in respect of the two registered charges over Rush Green Hall. The discharge of mortgage forms were not returned by the Bank until 13 October 2008. After a considerable delay, Melissa was registered as the proprietor of Great Oak Court. The Bank was also registered as the purported chargee. Following completion, the Menelaou parents, Melissa, and her two younger siblings moved into Great Oak Court and occupied it as their family home. In the spring of 2010 Melissa was told by her parents that their business was experiencing difficulties. It was proposed that Great Oak Court would be sold and a smaller property purchased. It was at this point that Melissa discovered the existence of the charge dated 12 September 2008 over Great Oak Court. Melissas conveyancing solicitors then corresponded with Boulters. The Bank was made aware of the challenge to the validity of its charge and, through its solicitors, intimated a claim against Boulters. Many allegations of breach of duty (fiduciary and otherwise) were made by the Bank against Boulters. The procedural history On 2 November 2010 Melissa issued a Part 7 claim in the Chancery Division seeking orders that all references to the charge, as appearing in the Charges Register for Great Oak Court, be removed. The main basis for this claim was that, not having been signed by Melissa, the Banks charge was void. The Bank defended the claim but also counterclaimed for a declaration that the Bank was entitled to be subrogated to an unpaid vendors lien over Great Oak Court. On 14 January 2011 the Bank issued a Part 20 claim against Boulters for damages for breach of trust and/or fiduciary duty, and an indemnity against all costs and expenses that it might incur in the main claim. After the exchange of witness statements, it became clear to Melissa and her advisers that Boulters had altered the charge without consulting her. By consent of the parties, pursuant to Melissas application dated 13 April 2012, the particulars of claim were amended to rely upon this alteration as a further ground for rendering the charge void. The Banks response was to continue to challenge the invalidity of the charge. As stated above, the trial of the case began on 16 May 2012. At the commencement of the trial all issues were live. Melissa was called to give evidence and was duly cross examined. Thereafter, following an interchange between counsel and the judge, Boulters conceded in the Part 20 claim that the charge was void and that Melissa was entitled to the relief sought in her claim and, as it is put in the statement of facts and issues, reflexively, the Bank conceded the same in the main claim. The issue of liability in the Banks claims against Boulters was then compromised and a written agreement was entered into between the Bank and Boulters whereby Boulters accepted that it was in breach of its duties in both contract and tort and was liable to indemnify the Bank for its losses as a result of an invalid charge being entered against Great Oak Court. As a result of that agreement, the only remaining live issue for determination at the trial was the Banks counterclaim against Melissa. Judgment was reserved and (as stated above) was handed down on 19 July 2012 dismissing the counterclaim. No formal order was made on that day but a further hearing took place on 23 October 2012, when the judge made an order that the Banks charge be removed from the Register (reflecting the Banks and Boulters concession that the Banks charge was void) and formally dismissed the Banks counterclaim with costs. The judge granted the Bank permission to appeal against the dismissal of its counterclaim. The judgment The judge made these findings in the course of his judgment. Whether by operation of law or as a result of any agreement or understanding between the parties, there was nothing to qualify the straightforward position that, in receiving the sale proceeds of Rush Green Hall, Boulters was acting as agent for Mr and Mrs Menelaou and held all the moneys for them alone (para 17). As regards the totality of the purchase price of Great Oak Court, it was not discharged by the use of moneys belonging to the Bank (para 19). The judge approached the matter on two bases, which he described as the narrow or traditional approach to the doctrine of subrogation to the unpaid vendors lien and the wider approach based on the law of unjust enrichment (para 14). He held that the fact that the moneys provided for the purchase were not paid by, and did not belong to, the Bank was fatal to the counterclaim on the narrow or traditional approach (para 19). As to the wider approach, he concluded that there was both benefit to Melissa, namely the gratuitous acquisition of Great Oak Court (albeit to be held on trust for her two younger siblings), and detriment to the Bank, namely the release of its two charges (para 22). He held that The existence of both detriment and benefit does not however establish the further element that the latter should have been at the expense of the Bank (para 22 original emphasis). He added, also in para 22: It is sufficient for me to say that there must in my view be something in the nature of, to use the formula proposed in Burrows, The Law of Restitution, 3rd ed (2010) p 66, a transfer of value from the Bank to the claimant. But here the claimants benefit enured and was complete on 12 September 2008, while the Banks detriment through the mistaken release of its charges over Rush Green Hall occurred a month later. Whether or not times arrow must always and with full rigour be respected in the law of unjust enrichment, I am clear that this is not a case in which economic or any other kind of reality calls for its wholesale rejection. The judge concluded that, although this left Melissa without any charge over her property, it did not leave the Bank without all recourse. This was because the Bank had an indemnity for its losses from Boulters (in reality with that firms indemnity insurers), which indemnity was agreed during the course of the trial (para 11). The Court of Appeal In a judgment handed down on 2 July 2013 the Court of Appeal unanimously allowed the Banks appeal. The question in this appeal is whether it was correct to do so. I will consider its reasoning in the course of my discussion of the issues argued before us. On 4 July 2003 the Court of Appeal handed down a further judgment dealing with a number of consequential issues. It declared that the Bank was entitled to be subrogated to an equitable charge by way of an unpaid vendors lien over Great Oak Court for 875,000 plus interest. The result of the Court of Appeals decision is that Melissas property, Great Oak Court, has been subjected to an equitable charge for 875,000 plus interest. The Banks application to a Master in the Chancery Division seeking to enforce the equitable charge has been stayed by agreement pending the outcome of this appeal. Discussion In the course of the argument, there was much discussion of the relevant legal principles. However, in my opinion it is not necessary to resolve all the possible issues which were discussed. It appears to me that this is a case of unjust enrichment. In Benedetti v Sawiris [2013] UKSC 50, [2014] AC 938 the Supreme Court recognised that it is now well established that the court must ask itself four questions when faced with a claim for unjust enrichment. They are these: (1) Has the defendant been enriched? (2) Was the enrichment at the claimants expense? (3) Was the enrichment unjust? (4) Are there any defences available to the defendant? See, for example, Benedetti at para 10, following Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 per Lord Steyn at 227 (and per Lord Hoffmann to much the same effect at 234) and Investment Trust Companies v Revenue and Customs Comrs [2012] EWCH 458 (Ch), [2012] STC 1150 per Henderson J at para 38 (ITC). In that paragraph Henderson J noted that Professor Andrew Burrows QC said in The Law of Restitution, 3rd ed (2011) p 27 that, if the first three questions are answered affirmatively and the fourth negatively, the claimant will be entitled to restitution and that those four elements constitute the fundamental conceptual structure of an unjust enrichment claim. In para 39, Henderson J accepted that approach, although he said that the four questions were no more than broad headings for ease of exposition, that they did not have statutory force and that there may be a considerable degree of overlap between the first three questions. I agree. In the instant case, there is no doubt that Melissa was enriched when she became the owner of Great Oak Court, which she was given by her parents, albeit on the basis that she would hold it for the benefit of herself and her two younger siblings. As it is correctly put on behalf of the Bank, her obligation to pay the purchase price of Great Oak Court to the vendor was discharged. The essential question is whether she was enriched at the expense of the Bank, since, if she was, there cannot in my opinion have been any doubt that the enrichment was unjust. I would accept the submission made on behalf of the Bank that the unjust factor or ground for restitution is usually identified in subrogation cases as being, either (1) that the lender was acting pursuant to the mistaken assumption that it would obtain security which it failed to obtain: see eg Banque Financire per Lord Hoffmann at p 234H, or (2) failure of consideration: see the fourth and fifth points made by Neuberger LJ in Cheltenham & Gloucester plc v Appleyard (C&G) [2004] EWCA Civ 291, paras 35 and 36; [2004] 13 EG 127 (CS). On the facts here the Bank expected to have a first legal charge over Great Oak Court securing the debts of the appellants parents and their companies but, as events turned out, it did not have that security interest. The critical question is therefore whether Melissa was enriched at the expense of the Bank. Was Melissa enriched at the expense of the Bank? According to Goff & Jones on The Law of Unjust Enrichment, 8th ed (2011), para 6 01, the requirement that the unjust enrichment of the defendant must have been at the expense of the claimant reflects the principle that the law of unjust enrichment is not concerned with the disgorgement of gains made by defendants, nor with the compensation of losses sustained by claimants, but with the reversal of transfers of value between claimants and defendants. I agree. In my opinion the answer to the question whether Melissa was unjustly enriched at the expense of the Bank is plainly yes. The Bank was central to the scheme from start to finish. It had two charges on Rush Green Hall which secured indebtedness of about 2.2m. It agreed to release 785,000 for the purchase of Great Oak Court in return for a charge on Great Oak Court. It was thus thanks to the Bank that Melissa became owner of Great Oak Court, but only subject to the charge. Unfortunately the charge was void for the reasons set out above. In the result Melissa became the owner of Great Oak Court unencumbered by the charge. She was therefore enriched at the expense of the Bank because the value of the property to Melissa was considerably greater than it would have been but for the avoidance of the charge and the Bank was left without the security which was central to the whole arrangement. As I see it, the two arrangements, namely the sale of Rush Green Hall and the purchase of Great Oak Court, were not separate but part of one scheme, which involved the Bank throughout. I respectfully disagree with the conclusions of the judge summarised in paras 13 to 16 above. It is not, so far as I am aware, in dispute that, if the Bank had received all the proceeds of sale of Rush Green Hall and had then re advanced the moneys required for the purchase of Great Oak Court, it would be entitled to succeed whether or not the re advance was to the Menelaou parents or to Melissa. It is submitted on behalf of the Bank that, if that is so, it would be pure formalism for subrogation to be precluded simply because the moneys remained in Boulters client account (and were not paid to the respondent) between the sale of Rush Green Hall and the purchase of Great Oak Court; just as Lord Steyn commented in Banque Financire at p 227C that it would be pure formalism for the interposition of Mr Herzig between the loan by BFC of its advance and Parcs obligation to repay to be treated as altering the substance of the transaction and the result of the claim. On the facts of the instant case the funds remained in Boulters client account and were not paid to the Bank because of a pre acquisition agreement between it and the Menelaou parents. By this agreement it was agreed that money to which the Bank was otherwise absolutely entitled under its charges could remain advanced to the Menelaou parents for the purpose of purchasing Great Oak Court and was to be released only on condition that the Bank was given a specific charge over Great Oak Court. I would accept those submissions, which support the conclusion in para 24 above. I would reject the submission that there must be a direct payment by the Bank to Melissa. Such a requirement, while sufficient, is not in my view necessary because it would be too rigid. As I see it, whether a particular enrichment is at the expense of the claimant depends upon the facts of the case. The question in each case is whether there is a sufficient causal connection, in the sense of a sufficient nexus or link, between the loss to the Bank and the benefit received by the defendant, here Melissa. There has been much debate both among academics and judges as to the correct test. The contrast was noted by Henderson J at first instance in ITC. He discussed the problem in considerable detail between paras 47 and 73, especially between paras 52 and 73. The contrast is between a rule that requires there to be a direct causal link between the claimants payment and the defendants enrichment, subject to some exceptions (paras 52 59) and a broader more flexible approach (paras 60 69). He expressed his conclusions on the principles as follows in para 67: 67. I must now draw the threads together, and state my conclusions on this difficult question. In the first place, I agree with Mr Rabinowitz that there can be no room for a bright line requirement which would automatically rule out all restitutionary claims against indirect recipients. Indeed, Mr Swift accepted as much in his closing submissions. In my judgment the infinite variety of possible factual circumstances is such that an absolute rule of this nature would be unsustainable. Secondly, however, the limited guidance to be found in the English authorities, and above all the clear statements by all three members of the Court of Appeal in Kleinwort Benson Ltd v Birmingham City Council [1996] 4 All ER 733, [1997] QB 380, suggest to me that it is preferable to think in terms of a general requirement of direct enrichment, to which there are limited exceptions, rather than to adopt Professor Birks view that the rule and the exceptions should in effect swap places (see At the expense of the claimant: direct and indirect enrichment in English law in Unjustified Enrichment: Key Issues in Comparative Perspective, edited by David Johnston and Reinhard Zimmermann, Cambridge (2002), p 494). In my judgment the obiter dicta of May LJ in Filby and the line of subrogation cases relied on by Professor Birks, provide too flimsy a foundation for such a reformulation, whatever its theoretical attractions may be, quite apart from the difficulty in framing the general rule in acceptable terms if it is not confined to direct recipients. The reference to Filby is to Filby v Mortgage Express (No 2) Ltd [2004] EWCA Civ 759, [2004] All ER (D) 198 (Jun). Henderson J continued as follows in para 68. The real question, therefore, is whether claims of the present type should be treated as exceptions to the general rule. So far as I am aware, no exhaustive list of criteria for the recognition of exceptions has yet been put forward by proponents of the general rule, and I think it is safe to assume that the usual preference of English law for development in a pragmatic and step by step fashion will prevail. Nevertheless, in the search for principle a number of relevant considerations have been identified, including (in no particular order): (a) the need for a close causal connection between the payment by the claimant and the enrichment of the indirect recipient; (b) the need to avoid any risk of double recovery, often coupled with a suggested requirement that the claimant should first be required to exhaust his remedies against the direct recipient; (c) the need to avoid any conflict with contracts between the parties, and in particular to prevent leapfrogging over an immediate contractual counterparty in a way which would undermine the contract; and (d) the need to confine the remedy to disgorgement of undue enrichment, and not to allow it to encroach into the territory of compensation or damages. It is submitted on behalf of the Bank that on four occasions since the decision in ITC the Court of Appeal has endorsed the considerations identified by Henderson J. They variously described his approach thus: as relevant considerations in TFL Management Services v Lloyds TSB Bank plc [2014] 1 WLR 2006 (TFL) per Floyd LJ, para 57, as of assistance in Relfo Ltd v Varsani (No 2) [2014] EWCA Civ 360, [2015] 1 BCLC 14 per Arden LJ, para 96; and as relevant considerations skilfully distilled in ITC on appeal, [2015] EWCA Civ 82 per Patten LJ (giving the judgment of the court), paras 67 and 69. Further, in his judgment in this case Floyd LJ described Henderson Js approach as thoughtful and valuable at para 39 and in TFL he said this about Henderson Js para 68: 57. I agree with Henderson J that these are relevant considerations in deciding the question of whether an indirect benefit was conferred at the claimants expense. But the various factors to which he refers are not, and were not I think intended to be, rigid principles. Far less can it be said that if one or more of the factors can be said to be adverse to the claim, the claim is necessarily doomed to failure. That approach seems to me to be consistent with the approach of the Court of Appeal in ITC, where Patten LJ said at the end of para 69: We consider that the correlative of taking a broad approach to the first consideration by taking account of economic or commercial reality is that it is important not to take a narrow view of what, under the third criterion, would conflict with contracts between the parties or with a relevant third party in a way which would undermine the contract. That seems to me to be a sensible approach. There is scope for legitimate debate as to whether the correct approach is to adopt a narrow test with exceptions or a broader approach. However, it appears to me that, whichever test is adopted the result is likely to be the same. In any event it is not to my mind necessary to consider the issue further in this case because, as the Court of Appeal made clear, the position is clear on the facts of the instant case, which is concerned only with the first of Henderson Js relevant considerations. In a case in which more such considerations were relevant, it would be necessary to have regard to a number of different factors, probably with no presumption one way or the other where the starting point is. position is neatly described by Tomlinson LJ as follows in paras 57 and 58: In short, I agree with the approach of the Court of Appeal. In particular, the 57. In the present case, the Bank was to receive 1.9m upon the sale of Rush Green Hall in circumstances where it was owed 2.2m and had charges over Rush Green Hall to secure that indebtedness. The Bank had agreed that it would release its charges over Rush Green Hall upon receipt of 750,000 out of the sale proceeds, in return for a charge over Great Oak Court to secure what would be the remaining indebtedness, 1.45m, thereby enabling the Menelaou parents on the strength of that undertaking by the Bank to use 875,000 out of the sale proceeds of Rush Green Hall for the purchase of Great Oak Court in the name of Melissa. I do not see how this can sensibly be described as anything other than a transfer of value between the Bank and Melissa, in whose name the purchase of Great Oak Court was made. 58. I am glad to be able to reach this conclusion. It gives effect to the reality of the transaction, whereas the conclusion of the judge, in my respectful view, amounts to that pure formalism which Lord Steyn has in this context deprecated That was of course a reference to the speech of Lord Steyn in Banque Financire referred to in para 18 above. Both Floyd and Moses LJJ expressed much the same conclusions at paras 42 and 48 and 61 62 respectively. I am unable to accept that there is any significance in the point which attracted the judge (para 22) that the benefit to Melissa was complete on 12 September, whereas the detriment to the Bank occurred over a month later when its charges over Rush Green Hall were released. As Moses LJ put it at para 62, everyone knew, as a result of the Banks agreement on 9 September 2008, that the Banks security in Rush Green Hall would be released and, provided that the terms of that agreement were satisfied, the Bank was bound to release its charge. For all these reasons I agree with the Court of Appeal that Melissa was enriched at the expense of the Bank. I have already expressed my view that she was unjustly so enriched. Defences The fourth question, namely whether there are any defences available to the defendant, must in my opinion be answered in the negative. On the assumption that the first three questions are answered in the affirmative, I do not understand Melissa to be relying upon any other defence. It is not suggested, for example, that she had a change of position defence. Nor was she a bona fide purchaser for value without notice. She was a mere donee and, as such can be in no better position than her parents as donors. As indicated at the end of para 31 above, I recognise that in another case there may well be defences or at least countervailing considerations, as indicated, for example, in considerations (b), (c) and (d) identified by Henderson J. Remedies The next question is what remedies are available to the Bank. The answer is that the Bank is subrogated to the unpaid sellers lien. Subrogation (sometimes known in this context as restitutionary subrogation) is available as a remedy in order to reverse what would otherwise be Melissas unjust enrichment. It is important to recognise that a claim in unjust enrichment is different in principle from a claim to vindicate property rights; see eg Foskett v McKeown [2001] 1 AC 102 per Lord Browne Wilkinson at p 108F, Lord Millett at p 129E F and Lord Hoffmann at p 115F, where he agreed with Lord Millett. Foskett was a claim to enforce property rights. Lord Millett expressed the distinction between that case and a case of unjust enrichment at p 129F: A plaintiff who brings an action in unjust enrichment must show that the defendant has been enriched at the plaintiffs expense, for he cannot have been unjustly enriched if he has not been enriched at all. But the plaintiff is not concerned to show that the defendant is in receipt of property belonging beneficially to the plaintiff or its traceable proceeds. The fact that the beneficial ownership of the property has passed to the defendant provides no defence; indeed, it is usually the very fact which founds the claim. Conversely, a plaintiff who brings an action like the present must show that the defendant is in receipt of property which belongs beneficially to him or its traceable proceeds, but he need not show that the defendant has been enriched by its receipt. He may, for example, have paid full value for the property, but he is still required to disgorge it if he received it with notice of the plaintiffs interest. The sentence which I have put in italics shows that a claim in unjust enrichment does not need to show a property right. In C&G Neuberger LJ (giving the judgment of the Court of Appeal) summarised the principles relevant to different types of subrogation concisely in paras 24 49. Like Floyd LJ at para 44, he set out the principles relevant here at para 25 as follows: The principle upon which C&G rely has been nowhere better stated than by Walton J in Burston Finance Ltd v Speirway Ltd (in liquidation) [1974] 1 WLR 1648 at p 1652B C: [W]here As money is used to pay off the claim of B, who is a secured creditor, A is entitled to be regarded in equity as having had an assignment to him of Bs rights as a secured creditor. It finds one of its chief uses in the situation where one person advances money on the understanding that he is to have certain security for the money he has advanced, and for one reason or another, he does not receive the promised security. In such a case he is nevertheless to be subrogated to the rights of any other person who at the relevant time had any security over the same property and whose debts have been discharged in whole or in part by the money so provided by him. Neuberger LJ noted at para 26 that that formulation was cited with approval by (among others) Lord Hutton in Banque Financire at p 245C D. He further noted at para 36 that in Banque Financire the lender bargained for what Lord Hoffmann called at p 229C a negative form of protection in the form of an undertaking, which he did not get. He added that this did not prevent his claim to be subrogated to a security, albeit essentially as a personal remedy: see per Lord Steyn at p 228C D and Lord Hoffmann at p 229C. The class of subrogation under discussion in this case is known as subrogation to an unpaid vendors lien. I agree with Floyd LJ at para 15 that it is not a concept which it is particularly straightforward to understand. He puts it thus. What the Bank seeks to achieve is to be placed in a position equivalent to that of the vendor of Great Oak Court at the point where the purchase money has not been paid. At that point the vendor would be able to refuse to convey the title to Great Oak Court, unless the purchase money was paid to him. He added that the lien was explained by Millett LJ in Barclays Bank plc v Estates & Commercial Ltd [1977] 1 WLR 415 at pp 419 420, in this way (omitting citations): As soon as a binding contract for sale [of land] is entered into, the vendor has a lien on the property for the purchase money and a right to remain in possession of the property until payment is made. The lien does not arise on completion but on exchange of contracts. It is discharged on completion to the extent that the purchase money is paid. Even if the vendor executes an outright conveyance of the legal estate in favour of the purchaser and delivers the title deeds to him, he still retains an equitable lien on the property to secure the payment of any part of the purchase money which remains unpaid. The lien is not excluded by the fact that the conveyance contains an express receipt for the purchase money. The lien arises by operation of law and independently of the agreement between the parties. It does not depend in any way upon the parties subjective intentions. It is excluded where its retention would be inconsistent with the provisions of the contract for sale or with the true nature of the transaction as disclosed by the documents. Floyd LJ then set out the passage from the judgment of Walton J in Burston Finance set out by Neuberger LJ in C&G and quoted at para 39 above. I adopt Floyd LJs description of the position at para 17 of his judgment as follows. A third party who provides some or all of the purchase money for a purchaser, thereby discharging the obligation to the vendor, can claim the benefit of the unpaid vendors lien by subrogation. This is so even after the lien has been extinguished as between vendor and purchaser. Floyd LJ notes that it is not intuitively clear how, or why, this should be the case and asks how it is that the unpaid vendors lien transferred from the vendor to the third party. He says with force that it might be thought that once the obligation in question has been extinguished, there is nothing which the vendor could transfer. He further asks by what legal method the transfer takes place, even if there was something to transfer. He notes that there has been no legal assignment and suggests that it was conceptual problems such as these that gave rise to the notion that the vendors lien was kept alive for the benefit of the subrogated third party. Floyd LJ resolves this apparent difficulty by adding that in Banque Financire at p 236 Lord Hoffmann explained that the phrase keeping the charge alive was not a literal truth but a metaphor or analogy: In a case in which the whole of the secured debt is repaid, the charge is not kept alive at all. It is discharged and ceases to exist. Lord Hoffmann added at p 236E F: It is important to remember that, as Millett LJ pointed out in Boscawen v Bajwa [1996] 1 WLR 328, 335, subrogation is not a right or a cause of action but an equitable remedy against a party who would otherwise be unjustly enriched. It is a means by which the court regulates the legal relationships between a plaintiff and a defendant or defendants in order to prevent unjust enrichment. When judges say the charge is kept alive for the benefit of the plaintiff, what they mean is that his legal relations with a defendant who would otherwise be unjustly enriched are regulated as if the benefit of the charge had been assigned to him. In para 19 Floyd LJ notes that Lord Hoffmann reviewed five authorities, namely Chetwynd v Allen [1899] 1 Ch 353, Butler v Rice [1910] 2 Ch 277, Ghana Commercial Bank v Chandiram [1960] AC 732, Paul v Spierway [1976] Ch 220 and Boscawen v Bajwa [1996] 1 WLR 328. Having done so, Lord Hoffmann noted at p 233 that in Boscawen there was no common intention that the vendor, whose mortgage had been paid off, should grant any security to Abbey National. Lord Hoffmann then said this at pp 233H 234D: As Millett LJ pointed out, at p 339 [of Boscawen], the Abbey National expected to obtain a charge from the purchaser as legal owner after completion of the sale, and, in the event which happened of there being no such completion, did not intend its money to be used at all. This meant that: The factual context in which the claim to subrogation arises is a novel one which does not appear to have arisen before but the justice of its claim cannot be denied. These cases seem to me to show that it is a mistake to regard the availability of subrogation as a remedy to prevent unjust enrichment as turning entirely upon the question of intention, whether common or unilateral. Such an analysis has inevitably to be propped up by presumptions which can verge upon outright fictions, more appropriate to a less developed legal system than we now have. I would venture to suggest that the reason why intention has played so prominent a part in the earlier cases is because of the influence of cases on contractual subrogation. But I think it should be recognised that one is here concerned with a restitutionary remedy and that the appropriate questions are therefore, first, whether the defendant would be enriched at the plaintiffs expense; secondly, whether such enrichment would be unjust; and thirdly, whether there are nevertheless reasons of policy for denying a remedy. An example of a case which failed on the third ground is Orakpo v Manson Investments Ltd [1978] AC 95, in which it was considered that restitution would be contrary to the terms and policy of the Moneylenders Acts. That appears to me to be an illuminating passage. Lord Hoffmann stresses what are the same questions as those referred to in para 18 above. Moreover, the reference to Orakpo seems to me to be of some significance. It demonstrates that, when Lord Hoffmann was referring to subrogation as a remedy to prevent unjust enrichment, he was not referring to subrogation to personal rights alone because Orakpo was a case concerning subrogation to property rights. The case of Orakpo is also of interest because it shows the broad nature of the doctrine of unjust enrichment. Three examples suffice. Lord Diplock said at p 104E F: My Lords, there is no general doctrine of unjust enrichment recognised in English law. What it does is to provide specific remedies in particular cases of what might be classified as unjust enrichment in a legal system that is based upon the civil law. There are some circumstances in which the remedy takes the form of subrogation, but this expression embraces more than a single concept in English law. It is a convenient way of describing a transfer of rights from one person to another, without assignment or assent of the person from whom the rights are transferred and which takes place by operation of law in a whole variety of widely different circumstances. Some rights by subrogation are contractual in their origin, as in the case of contracts of insurance. Others, such as the right of an innocent lender to recover from a company moneys borrowed ultra vires to the extent that these have been expended on discharging the companys lawful debts, are in no way based on contract and appear to defeat classification except as an empirical remedy to prevent a particular kind of unjust enrichment. Lord Salmon said this at p 110: The test as to whether the courts will apply the doctrine of subrogation to the facts of any particular case is entirely empirical. It is, I think, impossible to formulate any narrower principle than that the doctrine will be applied only when the courts are satisfied that reason and justice demand that it should be. Finally, Lord Edmund Davies said at p 112: Apart from specific agreement and certain well established cases, it is conjectural how far the right of subrogation will be granted though in principle there is no reason why it should be confined to the hitherto recognised categories (Goff and Jones, The Law of Restitution (1966), pp 376 377). Those statements seem to me to support a flexible approach to the remedies appropriate in a particular case. Indeed, the principles have been extended since the decision in Orakpo because there is now a general doctrine of unjust enrichment in a way that there was not when Lord Diplock drafted his speech. Lord Hoffmann stresses the importance of the questions identified in para 18 above. It appears to me that, on the facts of this case, if, as here, the first three questions are answered in the affirmative and the fourth in the negative, the appropriate equitable remedy is that the claimant is subrogated to the unpaid vendors lien as explained in paras 41 and 42 above. On the facts here the Bank is entitled to a lien on the property, which is in principle an equitable interest which it can enforced by sale. In short, by effectively reinstating Melissas liability under the charge, the remedy of subrogation is reversing what would otherwise be her unjust enrichment. I would accept the submission made on behalf of the Bank that the analyses in Banque Financire have rationalised the older cases through the prism of unjust enrichment. Banque Financire was not limited to subrogation to personal rights. The remedy the House fashioned was subrogation to a property right but, as the Bank puts it, it was attenuated so as not to grant RTB a greater right than that for which it had bargained. There is no reason why, on the facts of this case, the remedy should not be subrogation as described above, even if the Bank did not retain a property interest in the proceeds of sale of Rush Green Hall. The remedy simply reverses the unjust enrichment which Melissa would otherwise enjoy by ensuring that the Bank not only has a personal claim against her but also has an equitable interest in Great Oak Court, as it would have had if the scheme had gone through in accordance with the agreement of the Bank and the Menelaou parents. Moreover, but for the proposed remedy the Bank would lose the benefit it was to receive from the scheme, namely a charge on Great Oak Court to replace the charges it had on Rush Green Hall. In reaching these conclusions I have read Lord Carnwaths judgment in draft with great interest. My own view is that the principles are somewhat broader than he suggests. Conclusion For these reasons I would dismiss the appeal. As I see it, these conclusions make it unnecessary to decide whether the Bank had a security interest in the proceeds of sale that were used to buy Great Oak Court. In so far as the answer to that may depend upon the true ratio of the decision of the Court of Appeal in Buhr v Barclays Bank [2001] EWCA Civ 1223, [2002] BPIR 25 like the Court of Appeal I would prefer to leave that question for determination in a case in which it arises for decision. In so far as the Bank relies upon a Quistclose type trust (Quistclose Investments Ltd v Rolls Razor Ltd [1970] AC 567), arising in a similar manner to that which arose in Twinsectra v Yardley [2002] 2 AC 164, there seems to me to be much to be said for the conclusions reached by Lord Carnwath. However, in my opinion it is not necessary for the Bank to do so. Postscript Since writing the above I have read Lord Neubergers judgment in draft. I essentially agree with his conclusions and reasoning. I also agree with his tentative conclusions and reasoning in paras 103, 104 and 106. The one point upon which there is or may be a difference between us is whether the Bank would have a personal claim in unjust enrichment against Melissa. For my part I see no reason why it should not in principle have such a claim provided that it is dealt with as suggested by Lord Neuberger in para 81. In any event I agree with him that it is not necessary to decide this question in this appeal for reasons he gives in para 82. I would only say that there seems to me to be considerable force in his comments in para 81, namely that the standard response to unjust enrichment is a monetary restitutionary award in order to reverse the unjust enrichment. This must be left for decision on another day. LORD NEUBERGER: The facts of this case and the findings of the courts below are explained by Lord Clarke in paras 1 17. The question which arises is whether, in the light of those facts, the Bank is entitled to claim a charge over the freehold of Great Oak Court by invoking a right to be subrogated to the unpaid vendors lien over the freehold of Great Oak Court (the Lien). In considering that issue, I shall adopt the nomenclature in Lord Clarkes judgment. The Banks primary case involves two steps; the first is that it has a claim based on unjust enrichment against Melissa; the second step is that that claim was or should be satisfied by subrogating the Bank to the Lien. Melissas main argument against the first step is that she was innocent of any wrong doing and therefore cannot be said to have been unjustly enriched. As to the second step, her main argument is that subrogation as claimed by the Bank is not, as a matter of principle, available as a remedy for unjust enrichment in the circumstances of this case. I agree with Lord Clarke, and with the Court of Appeal, that, despite Melissas arguments to the contrary, each of the two steps in the Banks argument is made out. I am also attracted to the view that the Banks case on the first step could be justified on the alternative basis of an orthodox proprietary claim rather than on unjust enrichment, which in turn would render the second step in its case even clearer. Because the appeal raises points of some significance and because the state of the law appears to be somewhat unclear, I shall explain why I have reached these conclusions. Can the Bank establish an unjust enrichment claim against Melissa? The first step in the Banks case is that it has a claim against Melissa in unjust enrichment. A claim in unjust enrichment requires one to address the four questions which Lord Clarke sets out in para 18 above. I agree with what he says in relation to those four questions in this case in paras 19 35 above, and indeed with the analysis of Floyd LJ in the Court of Appeal at [2013] EWCA Civ 1960; [2014] 1 WLR 854, paras 29 to 42. I express the position in my own words as follows. The answer to the first question, namely whether Melissa has been enriched, would appear to be plainly yes, because she received the freehold of Great Oak Court (the freehold) for nothing. However, although it does not affect the outcome in the present case, there is much to be said for the view that the relevant enrichment for present purposes is that she received the freehold free of any charge, instead of receiving it subject to a charge to secure her parents indebtedness to the Bank (a Charge). This may be a more accurate way of answering the first question for present purposes, because the only aspect of Melissas enrichment which can be complained of by anyone arises from the fact that she received the freehold free of the intended Charge. The fact that the freehold was conveyed to her was an uncontroversial benefit, but the fact that it was not subject to a Charge was not just a benefit, but, in the light of the facts surrounding the sale of Rush Green Hall, the purchase of Great Oak Court and the preparation of the defective Deed of Charge (the Deed), it was accidental and unintended. (The fact that Melissa held the freehold on trust for herself and her siblings adds nothing for present purposes.) In any event, it might be said to be somewhat artificial to distinguish between acquisition of the freehold and acquisition of the freehold subject to the Charge. After all, Great Oak Court could not have been acquired without the Banks agreement that some of the proceeds of sale of Rush Green Hall could be used to purchase it, and that agreement was conditional on the grant of the Charge contemporaneously with the purchase. This is reflected by the observations of Lord Oliver in Abbey National Building Society v Cann [1991] 1 AC 56, 92 93, albeit that his observations apply by analogy rather than directly: [T]he acquisition of the legal estate and the charge are not only precisely simultaneous but indissolubly bound together. The acquisition of the legal estate is entirely dependent upon the provision of funds which will have been provided before the conveyance can take effect and which are provided only against an agreement that the estate will be charged to secure them. The reality is that the purchaser of land who relies upon a building society or bank loan for the completion of his purchase never in fact acquires anything but an equity of redemption, for the land is, from the very inception, charged with the amount of the loan without which it could never have been transferred at all and it was never intended that it should be otherwise. I turn to the second question, namely whether the enrichment was at the expense of the Bank. Professor Burrows refers to this requirement as being that the defendants enrichment must come from (be subtracted from) the claimants wealth Proprietary Restitution: Unmasking Unjust Enrichment (2001) 117 LQR 412, 415. The Bank had the right to demand the whole of the proceeds of sale of Rush Green Hall, as the Menelaou parents debt to the Bank, which had been secured on the freehold of Rush Green Hall, exceeded the proceeds of sale. Instead, the Bank agreed that 875,000 of those proceeds of sale could be used to fund the purchase of the freehold of Great Oak Court, but only provided that the Bank was granted a Charge over that freehold at the time of its acquisition. So the Bank would have had the right to prevent the 875,000 being used to purchase the freehold if it had not been provided with a valid Charge. Even assuming (as Melissa asserts) that the Bank had released to the Menelaou parents 875,000 of the proceeds of sale of Rush Green Hall, the release was only on the basis that it would be granted a Charge over Great Oak Court. Therefore, it seems to me clear that the Bank could have prevented the purchase proceeding until it had been granted a Charge. Accordingly, again deriving support from the passage quoted from Abbey National, looking at the arrangements in relation to the purchase and charging of Great Oak Court, it seems to me plain that Melissas enrichment was at the expense of the Bank. That conclusion is reinforced (if reinforcement is needed) by the point made by Lord Clarke in para 25 above, reflecting the realistic approach of the House of Lords in Abbey National, that it is appropriate not merely to consider the purchase of, and charge over, Great Oak Court as a single composite transaction. It is also appropriate in the present case to treat the sale of Rush Green Hall and the purchase of Great Oak Court as one scheme, at least for present purposes. I see nothing in any of the judgments in Scott v Southern Pacific Mortgages Ltd [2014] UKSC 52, [2015] 1 AC 385 (sub nom Mortgage Business plc v OShaughnessy) which casts doubt on that approach. If one regards the enrichment as having the freehold uncharged rather than subject to a Charge, it therefore seems clear that that enrichment was at the Banks expense. One gets the same answer if Melissas enrichment is regarded as being the freehold in its entirety: that enrichment would be at the expense of the Bank, albeit only to the extent that the freehold was uncharged rather than subject to the Charge, and therefore the points made in paras 66 67 above would apply with equal force. The third question is whether the enrichment was unjust. At first sight, there may appear to be some attraction in Melissas argument that, as between the Bank and herself, her enrichment was not unjust. After all, as Mr Mark Warwick QC pointed out, she owed the Bank nothing, she was wholly unaware of a prospective or actual charge, and she was innocent of any oversight, let alone any wrong doing, whether before, during or after the sale of Rush Green Hall and the purchase of Great Oak Court. The answer to that contention, in my view, lies in the fact that Melissa received the freehold as a gift from her parents. Had she been a bona fide purchaser for full value, it may very well have been impossible to characterise her enrichment as unjust, especially if she had no notice of the Banks rights. If she had paid a small sum to her parents for her acquisition, a difficult question might have had to be faced, although, as at present advised, I think that her enrichment would still have been unjust, but the extent of any unjust enrichment would be reduced by the small sum. But she paid nothing, and she therefore cannot, in my view, be in any better position than her parents so far as the Banks claim is concerned. And there can be no doubt that, if the Menelaou parents, rather than directing the transfer to Melissa, had acquired the freehold themselves in circumstances where the Deed was for some reason invalid, the Bank would have had a claim against them in unjust enrichment. Again, it seems to me to be easier to see why Melissas enrichment should be characterised as unjust if her enrichment is treated as being the receipt of the freehold uncharged instead of subject to the Charge. Her parents were quite properly able to direct the transfer of the freehold of Great Oak Court to Melissa, but they were not properly entitled, so far as the Bank was concerned, to direct the transfer to her of the unencumbered freehold; they were only properly able, at least as against the Bank, to direct the transfer to her of the freehold subject to a Charge. Mr Warwick suggested that this analysis could be called into question by considering the likely outcome if the Menelaou parents had decided to direct the freehold of Great Oak Court to be transferred to a charity, instead of their daughter. I agree that the outcome would be no different, but I see no difficulties in accepting that the Bank would in those circumstances have had a claim in unjust enrichment against the charity. A variant of Mr Warwicks argument on this third aspect is the contention that, if the Bank could otherwise mount a valid unjust enrichment claim, that claim cannot succeed against Melissa, as she was only an indirect recipient of any enrichment, to use the language Goff & Jones on The Law of Unjust Enrichment, 8th ed (2012), eds Professors C Mitchell, P Mitchell and Watterson, paras 6 12ff and in Ben McFarlanes article Unjust Enrichment, Property Rights, and Indirect Recipients (2009) 17 RLR 37. It is fair to say that there was a tripartite relationship in this case, in the sense that not merely Melissa and the Bank, but also the Menelaou parents, were parties to the arrangements which gave rise to the alleged unjust enrichment. However, as already explained above, there was in reality a single transaction, and it was from that transaction that Melissa directly benefitted, even though the benefit was effected at the direction of the Menelaou parents. The benefit to Melissa was direct because it arose as the immediate and inevitable result of the very transaction to which she was party and which gave rise to the unjust enrichment (in contrast to the examples at the beginning of Professor McFarlanes article). I should add that, even if Melissa could be characterised as an indirect recipient of any enrichment, I do not consider that that would assist her: she would still properly be liable on the facts of this case, essentially for the same reasons. As for the fourth question, it appears to me that, if (as I consider) the first three questions are answered in the Banks favour, there is no special reason precluding the conclusion that the Bank had a valid claim in unjust enrichment against Melissa. As already mentioned, the fact that Melissa did not know of the circumstances which caused her enrichment to be unjust does not alter the fact that she was unjustly enriched; nor does it alter the extent of her unjust enrichment. However, it does render it more likely that she would be able to rely on subsequent events to give rise to an innocent change of position defence to a claim based on the unjust enrichment. However, no such defence appears to arise in this case. It was rather tentatively suggested that the Bank should have no right to claim in unjust enrichment against Melissa, as it had a cast iron case for recovering all its losses arising from the defective Deed from Boulters. There is nothing in that point. Boulters liability in no way impinges on the question whether, and to what extent, Melissa was unjustly enriched at the expense of the Bank: the Banks claim against Boulters is res inter alios acta so far as Melissa is concerned. (Further, although the point was not argued, it may well be that, if the Bank had recovered damages from Boulters, then Boulters would be subrogated to the Banks unjust enrichment claim against Melissa.) Standing back, any fair minded person would say that, as a matter of fairness and common sense, by acquiring the freehold from any Charge, Melissa was unjustly enriched at the expense of the Bank, albeit not because of any fault of hers. Tomlinson LJs analysis in the Court of Appeal, as set out by Lord Clarke in para 33 above, accurately summarises the position. Of course, fairness and common sense cannot safely be relied as the sole touchstones as to whether there has been unjust enrichment as a matter of law. In that connection, like Lord Clarke, I would commend Henderson Js observations in Investment Trust Companies v Revenue and Customs Comrs [2012] EWHC 458 (Ch), [2012] STC 1150, paras 67 68, as containing what Floyd LJ called a thoughtful and valuable approach, while rightly not laying down rigid principles. Can the Bank invoke subrogation on the basis of its unjust enrichment claim? I turn then to the second step, namely whether the Banks claim in unjust enrichment can properly be satisfied by holding that it is subrogated to the Lien over the freehold to the extent of the price payable for the freehold, namely 875,000. (And in that connection, the fact that 10% of the 875,000 had already been paid as a deposit is irrelevant for present purposes, as the balance had to be paid to rescue the deposit.) Given that the Bank has a claim based on unjust enrichment against Melissa to the extent described above, it is hard to identify a more appropriate remedy for the Bank to obtain against Melissa. Subrogation to the Lien would accord to the Bank, and impose on Melissa, a right very similar to, although rather less in value than, that which the Bank should have had. It would give the Bank a lien instead of a formal charge, and it would be in the sum of 875,000 (plus interest), rather than the larger debt, well over 1m at the time of the purchase of the freehold, owed by the Menelaou parents to the Bank. An award of financial compensation might seem rather less appropriate. It was never intended that the Bank should have any personal claim against Melissa, merely that the freehold which she owned would be charged with the Menelaou parents debt to the Bank. Even if the compensation was limited to 875,000 (plus interest), it could prejudice Melissa for instance, if the freehold declined in value as a result of a fall in the property market subsequent to her acquisition. However, it is fair to say that the standard response to unjust enrichment is a monetary restitutionary award, to use the terminology adopted by in A Restatement of the English Law of Unjust Enrichment (Burrows et al, 2012), article 34, in order to reverse the unjust enrichment. In this case, the unjust enrichment could be quantified at 875,000, its value at the time it was conferred, or the difference in the value of the freehold uncharged and subject to the Charge at the date of the assessment of the unjust enrichment (or possibly at some other date). In so far as the quantification would result in an unfair or oppressive sum, the court could adjust the sum to avoid any unfairness or oppression. It is not necessary for the purpose of the present appeal to decide whether the Bank has a monetary claim against Melissa in the light of her unjust enrichment, let alone to determine the precise amount which the Bank could seek from her on that basis, or to decide whether the existence of any monetary claim would be affected by the subrogation claim. Nor would it be appropriate to do so, given that none of these points was debated in any detail on this appeal: indeed, the issue of whether the Bank had a money claim against Melissa was barely touched on at all (and no complaint is thereby intended). Turning now to the law, the circumstances in which an unpaid vendors lien typically arises and the circumstances in which subrogation typically can be claimed have been summarised by Millett LJ and Walton J respectively in the passages quoted by Lord Clarke in paras 41 and 39 above. In the course of his attractive argument on behalf of Melissa, Mr Warwick contended that, because the Banks case against Melissa was based on unjust enrichment, it could not justify the Banks claim to be subrogated to the Lien. His contention was that the decided cases and judicial dicta which establish a right to be subrogated to a charge or a debt, all involved the money coming from the person who establishes subrogation being used to pay off the chargee or the creditor respectively see eg per Sir John Romilly MR in Drew v Lockett (1863) 32 Beav 499, 505; per Lord Selborne LC in Duncan, Fox & Co v North and South Wales Bank (1880) 6 App Cas 1, 19; per Romer J in Chetwynd v Allen [1899] 1 Ch 353, 357, per Vaughan Williams LJ in Thurstan v Nottingham Permanent Benefit Building Society [1902] 1 Ch 1, 9; per Warrington J in Butler v Rice [1910] 2 Ch 277, 282; and, as quoted by Clarke LJ in para 39 above, per Walton J in Burston Finance Ltd v Speirway Ltd [1974] 1 WLR 1648, 1652. It is true that it can be fairly argued that the dicta in those cases as to when and how subrogation could arise do not apply here. However, there is nothing in those dicta to suggest that the judges in any of those cases were purporting to give an exclusive explanation or definition of when subrogation can arise. Further, as Mr Rainey QC, for the Bank, pointed out in his clear argument, no consideration was given in those cases to analysing whether actual ownership of the money on the part of the person claiming subrogation was needed. Nonetheless, that does not alter the point that subrogation should be accorded to the Bank in this case only if it can be achieved in accordance with principle. In my view, Mr Warwicks argument involves assuming that the circumstances in which subrogation can be claimed are more limited than they really are. That is made good by two decisions of the House of Lords. In Orakpo v Manson Investments Ltd [1978] AC 95, 104, Lord Diplock explained that there were some circumstances in which the remedy [for unjust enrichment] takes the form of subrogation, but this expression embraces more than a single concept in English law. He went on to describe subrogation as a convenient way of describing a transfer of rights from one person to another, without assignment or assent of the person from whom the rights are transferred and which takes place by operation of law in a whole variety of widely different circumstances. He described a case where a person who pays off a secured lender as being [o]ne of the sets of circumstances in which a right of subrogation arises. In the same case at p 110, Lord Salmon expressed himself very broadly, suggesting that [t]he test as to whether the courts will apply the doctrine of subrogation to the facts of any particular case is entirely empirical and that the principle was that the doctrine will be applied only when the courts are satisfied that reason and justice demand that it should be. Lord Edmund Davies suggested at p 112 that there is no reason why it should be confined to the hitherto recognised categories. And, to much the same effect, Slade LJ described the doctrine of subrogation as a flexible one, capable of giving a remedy in many and various situations in In re T H Knitwear (Wholesale) Ltd [1988] Ch 275, 286F. The opinion of Lord Hoffmann in the more recent decision of the House of Lords in Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 includes some illuminating remarks about subrogation, which are much in point for present purposes. At p 231G H, having described subrogation in the traditional case as a contractual arrangement for the transfer of rights against third parties [which] is founded upon the common intention of the parties, he went on to say that the term is also used to describe an equitable remedy to reverse or prevent unjust enrichment which is not based upon any agreement or common intention of the party enriched and the party deprived. Then, at pp 231H 232A, he described the former principle as part of the law of contract and the latter, which seems, at least on the face of it, to cover the present case, as part of the law of restitution. Lord Hoffmanns subsequent analysis at p 232B H confirms that the Banks subrogation claim in this case should not be in difficulties because Melissa was wholly ignorant of, and in no way responsible for, the fact that the Bank was intended to have a charge over the freehold (and, as Lord Hoffmann explained, this is confirmed by a number of earlier decisions including two of the cases relied on by Mr Warwick, namely Chetwynd and Butler). Thus, at p 234B D, Lord Hoffmann observed that it was a mistake to regard the availability of subrogation as a remedy to prevent unjust enrichment as turning entirely upon the question of intention (although he also said that this does not mean that questions of intention may not be highly relevant to the question whether or not enrichment has been unjust). He also expressed the view that intention has played so prominent a part in the earlier cases because of the influence of cases on contractual subrogation, and that, in a case of a restitutionary subrogation claim, the appropriate questions were, in effect, those identified by Lord Clarke at para 18 above. At p 236E, Lord Hoffmann explained that subrogation was not a right or a cause of action but an equitable remedy against a party who would otherwise be unjustly enriched. Accordingly, as he went on to say, the notion (in this case) of the unpaid vendors lien being kept alive for the benefit of the Bank was not a literal truth but rather a metaphor or analogy (p 236D). Particularly significantly for present purposes, Lord Hoffmann said at p 236F that subrogation is an equitable remedy against a party who would otherwise be unjustly enriched and a means by which the court regulates the legal relationships between a plaintiff and a defendant in order to prevent unjust enrichment. Accordingly, he said, it would not by any means follow that the [Bank] must for all purposes be treated as an actual assignee of the benefit of the [unpaid vendors lien] and, in particular, that [it] would be so treated in relation to someone who would not be unjustly enriched (p 236G). In my view, the observations in Orakpo and, even more, in Banque Financire, support the Banks claim to be subrogated to the Lien as a result of what happened in this case. It seems to me that this view is supported by the views expressed by the current editors of Goff & Jones at para 39 10, where they describe the true position as that explained by Lord Hoffmann in the passage quoted in para 90 above from Banque Financire at p 236F. The editors go on to say at para 39 12 that subrogation to extinguished rights is therefore a remedy that reverses unjust enrichment of a discharged debtor which follows from the discharge of a debt, by affording the claimant new rights which prima facie replicate the creditors extinguished rights. The same point is made in the following paragraphs. For instance in para 39 16, it is suggested that the subrogation cases can all be explained on the ground for restitution that makes it unjust for the debtor to be enriched at the claimants expense. It is true that there is nothing in Chapter 39 of Goff and Jones which deals with what is said to be the problem for the Bank in this case, namely that the money used to pay off the secured creditor (ie the unpaid vendor) did not emanate from the Bank itself. However, that does not seem to me to present the Bank with a problem in relation to its claim for subrogation. For the reasons given in paras 66 68 above, the Bank has established that Melissas enrichment was at its expense even though the money did not emanate from the Bank directly, so that its unjust enrichment is made out against her. I do not see why the Bank need establish anything more in this case in order to make good its case to be subrogated to the Lien. It is right to add that para 7 02 of Geoff & Jones, cited by Lord Carnwath in para 131 could be read as suggesting that a more stringent test has to be satisfied before the court will award subrogation (and see also paras 37 9 and 37 10). However, in the light of Orakpo and Banque Financire, I do not consider that those paragraphs can be read in this way. Further, at para 6 30 of Goff & Jones, the editors describe the grant by the House of Lords in Banque Financire of a subrogation remedy as unprecedented. However that was primarily because subrogation was accorded to a party who thereby obtained, as Lord Hoffmann himself put it at p 229, far greater security than it ever bargained for, and perhaps also because of the adjustments which had to be made to the subrogated right in order to achieve equity (discussed in Goff & Jones at paras 39 44 and 39 45). The Banks claim to subrogation in this case is stronger in the sense that neither of those two points can be raised against it in this case. Despite the broad statements in Banque Financire, what is said in Chapter 39 of Goff & Jones, and the way in which Lord Salmon and Lord Edmund Davies expressed themselves in Orakpo, the combination of facts that (i) the Bank has a claim in unjust enrichment against Melissa arising out of her acquisition of the freehold, (ii) subrogation is a remedy which can be accorded to reverse unjust enrichment, (iii) the Lien arose out of the transaction giving rise to the acquisition, and (iv) the Lien is a right to which it is legally possible to subrogate, is not enough to justify the conclusion that the Bank should be subrogated to the Lien. There has to be a principled case to support such a conclusion. Having said that, it seems to me that the conclusion is supported by principle. In addition to the general points identified in the previous paragraph, it appears to me that the following five points, when taken together, establish the Banks subrogation claim. (i) The freehold was acquired by being purchased through Boulters for 875,000; (ii) 875,000 was a sum which the Bank could have demanded from Boulters, and it only agreed to its being used to purchase the freehold if the Bank was granted a Charge; (iii) without that agreement, there would have been no 875,000 to purchase the freehold, (iv) owing to an oversight, the Bank was not granted a valid Charge; (v) the payment of 875,000 to purchase the freehold discharged the Lien. In those circumstances, it is hard to see why subrogating the Bank to the unpaid vendors lien is not an appropriate way to remedy the unjust enrichment. I do not consider that the reasoning in Boscawen v Bajwa [1996] 1 WLR 328 presents a problem. In that case, at pp 334D and 335C, Millett LJ discussed in instructive detail both tracing, which he explained was a process, and subrogation, which he described as a remedy. (On reflection, I wonder whether the distinction, despite the approval of Lord Hoffmann in Banque Financire at p 236E of the description of subrogation as a remedy, is as satisfactory as it seems at first sight. It seems to me questionable whether a sharp distinction can satisfactorily be drawn between a process and a remedy, but the point has no effect on the outcome of this case.) While I accept that Millett LJ treated tracing as the appropriate process to achieve subrogation in Boscawen, there are two important caveats for present purposes. First, he nowhere stated that subrogation was an impermissible remedy if tracing was not an available prior process. Secondly, as Mr Rainey QC pointed out, at p 339A B Millett LJ said that it would be perilous to extrapolate from one set of circumstances where the court has required a particular precondition to be satisfied before the remedy of subrogation can be granted a general rule which makes that requirement a precondition which must be satisfied in other and different circumstances. Similarly, at p 334H, Millett LJ described subrogation as a remedy which will be fashioned to the circumstances. Nor do I think that Lord Milletts statement in Foskett v McKeown [2001] 1 AC 102, p 127F about property rights being determined by fixed rules and not being discretionary, casts doubt on my conclusion in this case. His analysis in that case has its critics see eg Burrows, (2001) 117 LQR 412, 417 and The Law of Restitution, 3rd ed (2011), pp 140, 170 171 and 432 434, and Mitchell and Watterson, Subrogation: Law and Practice (2007), para 6.50. However, and more to the point, Lord Milletts remarks were directed to proprietary claims not unjust enrichment claims. Lord Millett made that clear in a passage at p 129E G, where he said, inter alia, that one must distinguish between a claim brought to vindicate property rights and one brought to reverse unjust enrichment, and that Foskett was an example of the former. This point was also made by Lord Browne Wilkinson and Lord Hoffmann at pp 108F and 115G respectively. Finally on this aspect, it is worth mentioning that Melissas case represents a triumph of form over substance, or, to use the words of Lord Steyn in Banque Financire at 227C, pure formalism. It would have been perfectly open to the Bank to have requested Boulters to pay the whole proceeds of the sale of Rush Green Hall to the Bank, with the Bank then remitting back to Boulters the 875,000 needed to purchase Great Oak Court, on the basis that it would be subject to a charge in favour of the Bank to secure the Menelaou parents indebtedness. If that had happened, and the Menelaou parents had then directed the transfer of Great Oak Court to Melissa, and the defective Deed had been executed, it is very difficult to see why the Bank could not have claimed subrogation to the unpaid vendors lien. If Melissas case on this appeal is right, the fact that the Bank sensibly short circuited the process, and agreed that the 875,000 could be retained by Boulters to purchase Great Oak Court, would mean that a small and practical change, of no apparent commercial significance, results in a substantially different commercial outcome. Such an outcome is, of course, possible, but its unattractiveness tends to support the conclusion which I have reached. The Banks proprietary claim This leads conveniently to the final point, namely whether the Banks claim to be subrogated to the unpaid vendors lien could in fact be justified by a simpler and less potentially controversial route. At least on the basis of the arguments we have heard, I am very sympathetic to the notion that the Bank had a proprietary interest in the 875,000 which was used to purchase Great Oak Court, and if that is right, its subrogation claim becomes relatively uncontroversial. I am, however, reluctant to express a concluded view on the topic, as the argument was developed very shortly, although it is fair to say that it was considered (and rejected) at first instance, albeit on a somewhat different basis from that which currently appeals to me. In this connection, I would be inclined substantially to agree with the analysis of Lord Carnwath in paras 135 139 of his judgment. It seems to me difficult, at least on the basis of the relatively limited argument we have heard, to argue against the proposition that the Bank had a proprietary interest in the 875,000 which was used to purchase Great Oak Court. What was intended to happen on 12 September 2006 was that the proceeds of sale of Rush Green Hall, which was charged to the Bank for a debt in excess of those proceeds, were split into two portions, one of which was to be paid to the Bank to reduce the debt, and the other of which was to be used to purchase Great Oak Court on terms that the Bank was to have charge over it for the outstanding indebtedness. In those circumstances, it would seem, either the second portion was the Banks money beneficially subject to its agreement that the money could be used to purchase Great Oak Court, or it was the Menelaou parents money beneficially subject to the Banks right to require it to be paid to the Bank to reduce the Menelaou parents debt unless it was used to purchase Great Oak Court subject to the Charge. When it comes to the beneficial interests in this case, as I see it at the moment, the position would be as follows. There would be little need to resort to Quistclose Investments v Rolls Razor Ltd [1970] AC 597, because there could be no doubt but that Boulters held the 875,000 on trust: it was plainly not their money beneficially. Both the Menelaou parents and the Bank were their clients towards whom they had contractual and equitable duties, and, more particularly, both of whom had an interest in the 875,000. If the Bank beneficially owned the 875,000 (subject to its agreement that the Menelaou parents could use it to purchase Great Oak Court, subject to the Charge), cadit quaestio so far as the Banks subrogation to the Lien is concerned, as I see it: the Banks money was used to redeem the Lien. Assuming, however, that the Menelaou parents were the beneficial owners of the 875,000, the Bank would, in my view, have had the right of requiring that sum to be used to purchase Great Oak Court subject to a Charge back in favour of the Bank, failing which the Bank would have the right to demand that that sum be paid to it. I find it hard to see why that would not have given the Bank a sufficient interest in the 875,000 to enable it to claim to be subrogated to the Lien, even on Melissas restricted view of subrogation. It may well be that the Bank could also claim that, if the 875,000 was to be treated as beneficially owned by the Menelaou parents, it was nonetheless subject to a charge in favour of the Bank, as discussed by Arden LJ in Buhr v Barclays Bank plc [2001] EWCA Civ 1223; [2002] BPIR 25, para 45. This argument was rejected by the Judge at first instance in this case see at [2012] EWHC 1991 (Ch), paras 15 17. It is unnecessary and inappropriate to discuss that possibility further, as it was barely touched on in argument. Conclusion In those circumstances, I would dismiss Melissas appeal on the basis that the Bank has a valid unjust enrichment claim against her which is properly reflected in the Banks claim to be subrogated to the unpaid vendors lien over the freehold of Great Oak Court. I add this. My strong, if provisional, opinion that the Bank had a proprietary interest in the 875,000 which was used to purchase the freehold leads me to wonder whether the conclusion that the Banks unjust enrichment claim is satisfied by subrogation could in fact be regarded as controversial, even before Orakpo and Banque Financire were decided. The reasons which persuade me that the unjust enrichment claim can properly be satisfied by subrogation to the Lien (see paras 91 95 above) are precious close to those which persuade me that there is a very strong case for saying that the Bank had a proprietary interest in the 875,000 (see para 103 above). LORD CARNWATH: Introduction I agree that the appeal should be dismissed, but I arrive at that conclusion by a somewhat different route from that taken by my colleagues. In my view the respondents case can be supported (contrary to the decision of the deputy judge) by a strict application of the traditional rules of subrogation, without any need to extend them beyond their established limits. I am less convinced with respect of the case for rationalising the older cases through the prism of unjust enrichment, as Lord Clarke suggests was done in Banque Financire (Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221), thus in effect conflating the two doctrines. As Lord Millett explained in Foskett v McKeown [2001] 1 AC 102, 129 (cited by Lord Clarke at para 38), there is a clear distinction of principle between a claim to enforce property rights and a claim for unjust enrichment. Earlier in the same judgment (at p 127F) he had emphasised that property rights are to be determined by fixed rules and settled principles, not by discretion or policy. Subrogation to a vendors lien is a claim to a property right, but it is, as Lord Clarke acknowledges, a less than straightforward concept. It should not be extended, nor should the established rules be distorted, without good reason. Conversely, in the light of some decades of academic discussion and of the authorities reviewed by Lord Clarke, it is surely time for the principles of restitution or unjust enrichment to be allowed to stand on their own feet. A proprietary remedy may arguably be justified because, as Lord Neuberger says (paras 79 80), such a remedy, rather than a personal remedy, is the most appropriate response to the unjust enrichment found in this case; but not because of some tenuous relationship with a vendors lien which has no continuing existence or practical relevance. However, that is not how the case has been argued, and, since it is not necessary for my decision on the appeal, I shall limit my observations on those wider issues. In this judgment I will take the facts as set out by Lord Clarke. I would only observe that I approach those facts without any particular predisposition in favour of the Banks claim. As Mr Warwick points out, if Melissa was enriched, it was because her parents gave to her, and to her two younger siblings, some of the proceeds of sale of their property, which she received in good faith. In the same way, Melissas older sister, Danielle, was enriched because she also received some of the proceeds of Rush Green Hall. Neither was aware of any interest of the Bank, and in Danielles case none has been asserted. Melissas ignorance of the Banks claim is the result of their own solicitors incompetence, not of any fault on her part. Subrogation the principles A simple modern statement of the principle of subrogation, frequently adopted in later cases (see eg Cheltenham & Gloucester plc v Appleyard [2004] EWCA] Civ 291, para 25, per Neuberger LJ); [2004] 13 EG 127 (CS), is that of Walton J in Burston Finance Ltd v Speirway Ltd [1974] 1 WLR 1648, 1652B C: [W]here As money is used to pay off the claim of B, who is a secured creditor, A is entitled to be regarded in equity as having had an assignment to him of Bs rights as a secured creditor. It finds one of its chief uses in the situation where one person advances money on the understanding that he is to have certain security for the money he has advanced, and, for one reason or another, he does not receive the promised security. In such a case he is nevertheless to be subrogated to the rights of any other person who at the relevant time had any security over the same property and whose debts have been discharged, in whole or in part, by the money so provided by him. Probably the fullest textbook discussion of the subject is to be found in Mitchell and Watterson Subrogation Law and Practice (2007) (It is noteworthy that both authors are also editors of the later edition of Goff & Jones (2011) to which I shall come.) Under the heading transfer of extinguished proprietary rights (para 3.26 8) the authors trace the origins of the rule whereby those whose money is used to pay off on land are presumptively entitled to acquire the charge for their own benefit (derived from Patten v Bond (1889) 60 LT 583). They describe as anomalous the extension of the rule beyond payments by someone with an existing interest in the land which requires protection. The anomaly lies in the absence of any sound policy reason to treat such a person any differently to any other person who has voluntarily paid off a persons debt, and for the more substantial reason that liabilities are not to be forced on people behind their backs (citing Falcke v Scottish Imperial Insurance (1886) 34 Ch D 234, 248 per Bowen LJ). However, as they observe the principle became well established in the case law, approved for example in the Privy Council in Ghana Commercial Bank v Chandiram [1960] AC 732, the justification for acquisition of the security being that the claimant was presumed to have intended this at the time when they parted with the money. The application of the concept in the context of an unpaid vendor's lien is also well established, but no less anomalous. Burston itself related to such a claim. The claim failed because, by taking a legal charge over the same property (even though invalid against the liquidator by reason of failure to register under the Companies Act 1948), the lien had been lost either as a result of the doctrine of merger or by presumed intention to waive the unpaid vendors lien (p 1653C). The earliest example in the cases cited to the court was Thurstan v Nottingham Permanent Benefit Building Society [1902] 1 Ch 1. On a purchase of land by an infant, 250 of the purchase money was paid on her behalf by the building society to the vendor subject to a mortgage. Although the mortgage was held to be void because of the infancy, the Society was subrogated to, and so able to enforce, the vendors lien. Vaughan Williams LJ, after some initial uncertainty and consultation with his colleagues, concluded at pp 9 10: the society, having paid off the vendor, have a right to the remedies of the vendor have a right, that is, to enforce the vendors lien. It is true that the society were not the vendors, but, having paid off the vendor, the society, as against the purchaser, stand in the place of the vendor. At first sight it seems odd that the Society, having failed due to its own mistake of law to get the security which it wanted, was able to revive and take advantage of a different security designed for a different purpose and a different person. As Floyd LJ observed in the Court of Appeal (para 15), the concept, although well established, is not altogether straightforward: A third party who provides some or all of the purchase money for a purchaser, thereby discharging the obligation to the vendor, can claim the benefit of the unpaid vendors lien by subrogation. This is so even after the lien has been, as between vendor and purchaser, extinguished. It is not intuitively clear how, or why, this should be the case. How is the unpaid vendors lien transferred from the vendor to the third party? It might be thought that once the obligation in question has been extinguished, there is nothing which the vendor could transfer. Even if there was something to transfer, by what legal mechanism does the transfer take place? There has been no assignment. (para 17) As he explained, Lord Hoffmann made some attempt to address such conceptual concerns in Banque Financire: In my view, the phrase keeping the charge alive needs to be handled with some care. It is not a literal truth but rather a metaphor or analogy: see Birks, An Introduction to the Law of Restitution, pp 93 97. In a case in which the whole of the secured debt is repaid, the charge is not kept alive at all. It is discharged and ceases to exist. It is important to remember that, as Millett LJ pointed out in Boscawen v Bajwa [1996] 1 WLR 328, 335, subrogation is not a right or a cause of action but an equitable remedy against a party who would otherwise be unjustly enriched. It is a means by which the court regulates the legal relationships between a plaintiff and a defendant or defendants in order to prevent unjust enrichment. When judges say that the charge is kept alive for the benefit of the plaintiff, what they mean is that his legal relations with a defendant who would otherwise be unjustly enriched are regulated as if the benefit of the charge had been assigned to him. It does not by any means follow that the plaintiff must for all purposes be treated as an actual assignee of the benefit of the charge and, in particular, that he would be so treated in relation to someone who would not be unjustly enriched.(P 236D E) It is not clear to me, with respect, how describing the concept as a metaphor adds anything by way of explanatory force. I note that in the passage cited by Lord Hoffmann, Professor Birks began by observing that in the law of restitution, subrogation really adds nothing to the techniques otherwise available; it is in the nature of a metaphor which can be done without (ibid p 93). Thirty years on, I would respectfully agree. In the context of the law of unjust enrichment, the issue should be the nature of the appropriate remedy, not whether it conforms to an analogy derived from some other area of the law. The view of the Court of Appeal In the Court of Appeal (as in this court) the appellant submitted that, there was no justification for extending the rules of subrogation so as to provide a proprietary remedy in this case. A proprietary claim based on subrogation to vendors lien is available only to a claimant who can show that the purchase price has been paid off by use of his own money. That is a common feature of all the cases in which such a claim has been allowed. It is supported by the leading modern authority: Boscawen v Bajwa [1996] 1 WLR 328. Floyd LJ acknowledged that no case had been cited to the court in which a lender had been entitled to a remedy of subrogation when that lender had not advanced funds (para 43). However, he considered that there was no strict requirement to that effect. He described the unusual feature of the present case that the Bank provided the value by agreeing to release a security interest rather than by advancing specific funds. The appellant had relied on Bankers Trust Co v Namdar [1997] NPC 22; [1997] EGCS 20, in which subrogation had been denied because, in the words of Peter Gibson LJ: I cannot see how the Bank can be afforded the remedy of subrogation in circumstances which, as I see it in agreement with the Judge, the Bank cannot properly be said to be the provider of the money used to discharge the debt owed to it by Mr and Mrs Namdar. (Floyd LJs emphasis) In the present case, however, Floyd LJ thought it sufficient the Bank had been a provider of the funds as a matter of economic reality: The mere fact that the claimant does some act in reliance on which there is a transfer of value between different parties is not sufficient. When the Bank gave its undertaking to release its charges on Rush Green Hall, and thus release the purchase moneys for the purchase of Great Oak Court, there was, as I have held, a transfer of value from the Bank to Melissa. Moreover, if one asks Peter Gibson LJs question, namely whether it can properly be said that the Bank is the provider of the money used to discharge the debt, the answer in the present case is that it is. Certainly that is true if one asks whether the Bank is the source of the moneys used as a matter of economic reality. I therefore see no reason in principle or justice why the Bank should not be entitled to the remedy of subrogation. (para 48) Moses LJ preferred to speak of a sufficiently close causal connection, established by showing that, but for the Banks agreement to release its charges over Rush Green Hall, Great Oak Court would never have been purchased and the obligation to pay its vendors would never have been satisfied. In his view, there was no need to invoke the somewhat fuzzy concept of economic reality (paras 61 62). Boscawen In my view, the strict approach advocated by the appellant gains strong support from the judgment of Millett LJ in Boscawen v Bajwa [1996] 1 WLR 328. It is the leading modern authority on the application of principles of tracing and subrogation in a context not dissimilar to the present. As has been seen, it was cited with approval by Lord Hoffmann in Banque Financire at p 233F (a valuable and illuminating analysis of the remedy of subrogation). Because of its acknowledged importance in this area of the law, it justifies careful examination. Indeed, if the test was as flexible as that favoured by the Court of Appeal in this case, much of the discussion in that judgment would have been redundant. The facts (as in the present case) involved a failure by solicitors to complete a transaction in the way intended by the main parties. A much simplified account will suffice. A building society (Abbey National) agreed to make an advance to clients for the purchase of a property from the defendant (Mr Bajwa) to be secured on a first legal charge. The property was subject to an existing mortgage in favour of another building society (Halifax). Abbey National paid the money to solicitors (Dave & Co) acting jointly for the society and the purchaser, on terms which obliged them to use the money for the purchase, and to return it if for any reason completion did not take place. They transferred it to the vendors solicitors (Hill Lawson) to hold to their order pending completion. Before completion Hill Lawson sent the money to Halifax in discharge of their mortgage, after which the sale fell through. In response to a subsequent claim to the property by judgment creditors of Mr Bajwa, the Abbey National claimed to be subrogated to the Halifax mortgage. It was held (in the words of the headnote) that: the money used by the vendors solicitors to discharge the mortgage had been held by the purchasers solicitors as trust money for the building society and by the vendors solicitors to the purchasers solicitors order pending completion of the purchase; that, therefore, the money could be traced into the payment and the vendors solicitors in making it had to be taken to have intended to keep the mortgage alive for the benefit of the building society; and that, accordingly, the building society was entitled, by way of subrogation, to a charge on the proceeds of sale of the property in priority to the plaintiffs. The headnote rightly highlights the importance of establishing a tracing link between the plaintiffs money and the money used to discharge the mortgage, leading to a presumed intention to keep the mortgage alive for the plaintiffs benefit. Millett LJs judgment needs to be read in the context of the issues before him. The main issue before the Court of Appeal was whether, in allowing the claim, the judge had made an impermissible aggregation of two different equitable doctrines, subrogation and tracing (p 333D G). As Millett LJ explained, these arguments showed a confusion of thought as to the nature of tracing: Tracing properly so called, however, is neither a claim nor a remedy but a process. It is the process by which the plaintiff traces what has happened to his property, identifies the persons who have handled or received it, and justifies his claim that the money which they handled or received (and, if necessary, which they still retain) can properly be regarded as representing his property. The process of tracing was to be distinguished from the fashioning of the appropriate remedy, once the plaintiff had succeeded in tracing his property whether in its original or in some changed form into the hands of the defendant, and overcome any defences: The plaintiff will generally be entitled to a personal remedy; if he seeks a proprietary remedy he must usually prove that the property to which he lays claim is still in the ownership of the defendant. If he succeeds in doing this, the court will treat the defendant as holding the property on a constructive trust for the plaintiff and will order the defendant to transfer it in specie to the plaintiff. But this is only one of the proprietary remedies which are available to a court of equity. If the plaintiffs money has been applied by the defendant, for example, not in the acquisition of a landed property but in its improvement, then the court may treat the land as charged with the payment to the plaintiff of a sum representing the amount by which the value of the defendants land has been enhanced by the use of the plaintiffs money. And if the plaintiffs money has been used to discharge a mortgage on the defendant's land, then the court may achieve a similar result by treating the land as subject to a charge by way of subrogation in favour of the plaintiff. The judge had not erred by invoking the two doctrines in the same case: They arose at different stages of the proceedings. Tracing was the process by which the Abbey National sought to establish that its money was applied in the discharge of the Halifaxs charge; subrogation was the remedy which it sought in order to deprive Mr Bajwa (through whom the appellants claim) of the unjust enrichment which he would thereby otherwise obtain at the Abbey Nationals expense. (p 334B 335F, emphasis added) Millett LJ went on to discuss separately the principles of tracing and subrogation, as applied to the instant case. In relation to the former (pp 335 337), it had been argued that the right to trace was lost when the money advanced by Abbey National went into Hill Lawsons general client account, where it was mixed with other money including other funds belonging to Mr Bajwa. It was held in favour of Abbey National that, as against Hill Lawson and Mr Bajwa, who though not wrongdoers were not innocent volunteers, they could rely on equitys ability to follow money through a mixed bank account by treating the money in the account as charged with the repayment of his money (pp 336F, 337G). Under the heading Subrogation (pp 338 339) the principal issue was whether it mattered that Abbey National had failed to show an intention to obtain the benefit of the Halifax security. As Millett LJ explained: In cases such as Butler v Rice and Ghana Commercial Bank v Chandiram [1960] AC 732, where the claimant paid the creditor direct and intended to discharge his security, the court took the claimants intention to have been to keep the original security alive for his own benefit save in so far as it was replaced by an effective security in favour of himself. In the present case the Abbey National did not intend to discharge the Halifaxs charge in the events which happened, that is to say, in the event that completion did not proceed. But it did not intend its money to be used at all in that event. However, that did not mean that the remedy was unavailable: In the present case the payment was made by Hill Lawson, and it is their intention which matters. As fiduciaries, they could not be heard to say that they had paid out their principals money otherwise than for the benefit of their principal. Accordingly, their intention must be taken to have been to keep the Halifaxs charge alive for the benefit of the Abbey National pending completion. In my judgment this is sufficient to bring the doctrine of subrogation into play. (p 339D H) These passages are of direct relevance to the arguments in the present case, and in my view difficult to reconcile with the more flexible approach of the Court of Appeal. It was clearly regarded by Millett LJ as necessary for the claimants to establish that the money used to pay off the loan was their money. Tracing was the process by which this was done. In the context of subrogation, tracing was not about identifying a particular asset in the hands of the defendant, as belonging notionally to the claimant; but rather as providing the necessary link with the payments made to discharge the relevant mortgage. In the passage quoted above, Millett LJ treated such payments as analogous to money spent in improving property. It was not regarded by him as sufficient to apply a broad causation or economic reality test, such as applied by the Court of Appeal in the present case. Had that been enough, the detailed examination of equitable rules relevant to tracing the money in the Hill Lawson account would have been unnecessary. It would have been enough that but for the receipt of the money from Abbey National, the Halifax mortgage would never have been paid off. This aspect of the case is not affected by the decision in Banque Financire. Lord Hoffmann noted that there was no difficulty on the facts of that case in tracing the banks money into the discharge of the relevant debt, since by contrast with Boscawen the payment was direct (p 235C D). I take him to have been using that term in the same sense as Millett LJ. The problem was not so much the right to a proprietary remedy but whether that right should be cut down so as to limit its scope by reference to the limited nature of the initial agreement. The decision itself, and in particular the nature of the remedy (personal, proprietary or hybrid?), have been much discussed (see Goff & Jones para 6 30). But it throws no doubt on the importance, in the present context, of establishing a tracing link between the claimants own money and the payment used to discharge the security. Academic discussion I should make brief reference to some of the academic discussion, if only to note the lack of consensus on the issues before us. Indeed, there are few more hotly debated issues among specialist academics in this field than the scope of the remedies, personal or proprietary, for unjust enrichment. In Mitchell and Watterson (op cit), there is an illuminating discussion of the various strands of academic opinion as it stood at the time of that edition (2007). I note in particular two sections, headed Proprietary remedies for unjust enrichment generally (para 8.40ff) and Proprietary subrogation (para 8.46 7). The former notes, for example, the view of some commentators that the English law of unjust enrichment should be purged of proprietary remedies altogether (para 8.41); contrasted with other more accommodating approaches, such as that of Professor Andrew Burrows (The Law of Restitution, 2nd ed (2002), para 8.42) who accepts the need for special justification for a proprietary remedy, but finds it in two factors, that the payment added to the value of the defendants asset and that the claimant did not voluntarily assume the risk of the defendants insolvency. Against that backdrop, it is said, the subrogation authorities reveal a surprising readiness to award proprietary remedies. Following Banque Financire, it is suggested that the courts should look across from the subrogation authorities to develop a consistent view of the circumstances in which proprietary restitutionary remedies should be awarded (para 8.46 7). The clearest academic exposition in recent textbooks of the distinction on which the appellants rely appears in the current edition of Goff & Jones, The Law of Unjust Enrichment, 8th ed (2011). Floyd LJ referred to para 6 01, relating to the term at the claimants expense, without noting that this was in a chapter dealing specifically with personal claims. Chapter 7, headed At the Claimants Expense; Proprietary Claims contains the following important passage, which on its face appears to support the appellants case: Both personal and proprietary claims are governed by the rule that the defendants enrichment must have been gained at the claimants expense, but the tests used to determine whether this requirement has been satisfied vary with the type of claim. Where the claimant seeks a personal remedy, he must show that there was a transfer of value between the parties, and this is tested by asking whether an event took place that caused the claimant to become worse off and the defendant to become better off. This is discussed in Chapter 6. In contrast, where the claimant seeks a proprietary remedy, it is not enough for him to show that there was a transfer of value between the parties: he must also show either that he previously owned the property in which he now claims an ownership or security interest, or else that the defendant acquired this property in exchange for property that was previously owned by the claimant, or else that this property was formerly the subject matter of an interest that was discharged with property that was previously owned by the claimant. This test is more stringent than the causal test used in the context of personal claims, and it serves as a control mechanism to prevent proprietary restitutionary remedies from becoming too freely available. (para 7 02, emphasis added) The footnote refers to a list of cases cited later in the chapter (para 7 39, fn 87) including in the subrogation context Boscawen (at p 334). The application of those principles to the payment of debts is discussed in more detail later in the chapter (para 7 42). The rule that the tracing process comes to an end when the value being traced is dissipated applies generally where the claimants money is used to pay off a debt. Subrogation is cited as one exception to the rule: if the debt was secured by a charge over the defendants property then Equity can treat the debt and the charge, by a legal fiction, as though they were not extinguished by the payment, thereby enabling the beneficiaries to trace the value inherent in their money into the value inherent in the creditors fictionally subsisting chose in action against the defendant. Again the reference is to Boscawen. Notable here is the close link between subrogation and the doctrine of tracing, which as has been seen was central to the analysis by Millett LJ in that case. There is no apparent support for the Court of Appeals view that a sufficient link could be found in a looser test based on economic reality or simple causation. Is there a tracing link in this case? The Court of Appeal felt able to decide the case on the footing that the Bank did not have an interest in the money used to pay off the security. It found it unnecessary to decide whether that assumption was correct. In this court it has been submitted that it was not. It is argued that the Bank did have a sufficient interest on the basis either of the principle in Buhr v Barclays Bank plc [2001] EWCA Civ 1223, [2002] BPIR 25, or of a so called Quistclose trust (after Quistclose Investments Ltd v Rolls Razor Ltd [1970] AC 567). Although the Quistclose principle does not appear in terms to have been relied on in argument in the courts below, the substance was sufficiently pleaded in the amended counterclaim (para 13), which asserts that the proceeds of the sale of Rush Green Hall released by the defendant Bank were held on trust for the defendant, subject to a power for Mr and Mrs Menelaou to use the same to purchase a flat in the joint names of Danielle Menelaou and her partner and also to purchase the Property in the name of the claimant but only on condition that the outstanding debts of Mr and Mrs Menelaou were to be secured by a first legal charge over the Property. The issue was also addressed by the judge (paras 14 17), albeit not specifically by reference to the Quistclose principle. It does not depend on any further findings of fact. I see no reason therefore why it cannot properly be relied on by the Bank in this court. The Quistclose principle was explained and applied by the House of Lords in Twinsectra Ltd v Yardley [2002] 2 AC 164. A solicitor (Sims) had received money, lent by Twinsectra to his client (Mr Yardley) for the purchase of a property, under an undertaking that it would be utilised solely for the acquisition of property and for no other purpose. The money was paid to the defendant solicitor (Mr Leach), acting on behalf of the same client; he paid it out to the client who used it for purposes other than the purchase of the property. A claim against the defendant solicitor for dishonest assistance failed only because dishonesty was not established. The money was held to be subject to a trust in the first solicitors client account, the terms of which were found in the terms of the undertaking, which made clear that the money was not to be at the free disposal of [the client]: the effect of the undertaking was to provide that the money in the Sims client account should remain Twinsectras money until such time as it was applied for the acquisition of property in accordance with the undertaking. For example, if Mr Yardley went bankrupt before the money had been so applied, it would not have formed part of his estate, as it would have done if Sims had held it in trust for him absolutely. The undertaking would have ensured that Twinsectra could get it back. It follows that Sims held the money in trust for Twinsectra, but subject to a power to apply it by way of loan to Mr Yardley in accordance with the undertaking (paras 12 13, per Lord Hoffmann) In the present case the critical issue is the status of the money received by Boulters on 12 September 2008, as proceeds of the sale of Rush Green Hall. (I do not understand either party to suggest that the deposit 90,000 should be treated differently from the balance of 785,000.) The judge saw no reason to infer a proprietary interest in the Bank: 16. In the present case the agreement or understanding recorded in the Banks letter of 9 September 2008 did not address the question of ownership or even security rights in the sale proceeds of Rush Green Hall, and had no reason to do so. While the arrival of the sale proceeds from Rush Green Hall and the payment of 785,000 to the vendors of Great Oak Court (or their solicitors) and of 750,000 to the Bank could not have been literally simultaneous, it is unrealistic to suppose that the parties were concerned with the status of the incoming monies in any short interval between them. Critically, the agreement was concerned only with the circumstances in which the charges over Rush Green Hall would be released. So long as they remained in place, there was neither need nor reason for the Bank to have any rights over the proceeds of sale, or thereafter, since the charges were only to be released against substitute security over Great Oak Court. And should there be a defect in that substitute security, the Bank had protected itself by obtaining the undertakings given by Boulters in the Certificate of Title. With respect to the judge, this analysis (like my own as trial judge in Twinsectra) seems to me to start from the wrong end. In the Boulters client account the money was undoubtedly trust money, in the sense that it was held beneficially for their clients (see eg In re A Solicitor [1952] Ch 328). That is not affected by the brevity of the period for which it was expected to be held. The relevant questions are: for whose benefit was it so held and on what terms? By this time they were acting for both the Menelaous and the Bank. Their respective interests in the money depended on the arrangements between them and with their solicitors. It is true that the Banks letter of 9 September 2008 said nothing in terms about an interest in the money to be used for the new purchase. But there is nothing to suggest that the money was treated as freely at the disposal of the Menelaous, which would have been inconsistent with the general purpose of the arrangement. The terms of the certificate of title provided to the Bank by Boulters on 10 September are also relevant. In it Melissa was named as borrower, and the price as 875,000. It included a standard form undertaking prior to use of the mortgage advance, to obtain in the form required by you the execution of a mortgage and a guarantee as appropriate by the persons whose identities have been checked in accordance with paragraph (1) above as those of the Borrower, any other person in whom the legal estate is vested and any guarantor . They also undertook to notify the Bank of anything coming to their attention before completion which would render the certificate untrue or inaccurate, and if so to defer completion pending your authority to proceed and return the mortgage advance to you if required . I agree with Mr Rainey that in its context the reference in the certificate of title to the mortgage advance must be read as a reference to the money received by them from the sale of Rush Green Hall. The natural implication of the undertakings was that, if the sale failed, the sum so defined would be paid to the Bank; not simply transferred to the Menelaous. It follows in my view that there is no difficulty in this case in finding the necessary tracing link between the Bank and the money used to purchase the new property. In this respect it is a much simpler case than Boscawen. The Banks interest in the purchase money was clear and direct. On this relatively narrow ground, I would hold that the appeal should be dismissed. LORD KERR AND LORD WILSON: Subject to the sentence which follows, we agree with the judgments both of Lord Clarke and of Lord Neuberger. We consider, however, that it is preferable to leave the availability of a personal claim against Melissa entirely open and so to that extent we prefer the terms in which Lord Neuberger expresses himself in paras 80 82 above to the marginally different terms in which Lord Clarke expresses himself in para 55 above.

The appellant (Melissa Menelaou) is the owner of a property, 2 Great Oak Court (the Property), bought by her parents in 2008 (in her name as a gift to her) as a family home for her, her siblings and her parents. The respondent Bank had two charges, securing the parents borrowing, totalling about 2.2 million over the previous family home owned by the parents, which was sold. The Bank agreed to release those charges, in return for a lump sum payment of 750,000 discharging part of the debt, and a fresh charge over the Property to secure the remaining indebtedness of 1.45 million. This left 875,000 to be used out of the sale proceeds for the purchase of the Property in Melissas name. Melissa was eventually registered as the proprietor of the Property, and the Bank as purported chargee. Melissa only became aware of the existence of the charge in 2010. She then discovered that the charge had not been properly executed and was in fact void, because she had not signed it and it had been altered without consulting her. She sought rectification of the register. The Bank invoked the unpaid vendors lien (namely the charge which the law gave to the vendor over the Property to secure the payment of the 875,000 which the purchasers were contractually due to pay him). It counterclaimed that, because the 875,000 used to pay the vendor effectively originated from its release of the charges over the previous property, and was intended to be secured on the Property, the law entitled it to be subrogated to the unpaid vendors lien, and thereby to claim a charge over the Property in the sum of 875,000. That counterclaim was the only issue at trial. It was dismissed by the judge at first instance, but granted by the Court of Appeal. The Supreme Court dismisses the appeal. Lord Clarke (with whom Lord Kerr and Lord Wilson agree) delivers the judgment. Lord Neuberger writes a concurring judgment, with which Lord Kerr and Lord Wilson also agree. Lord Carnwath writes a judgment dismissing the appeal, but on different reasoning. This is a case of unjust enrichment. Melissa was enriched. The critical question is whether she was enriched at the expense of the Bank [19 22], because if so that enrichment was clearly unjust. The answer is plainly yes: she became owner of the Property (subject to the charge) thanks to the Banks agreement to release a part of the debt in return for that charge. Since the charge was void, the value of the Property to Melissa was considerably greater, at the expense of the Bank which was left without the security that was central to the overall scheme [24]. There was one overall scheme, and a sufficient causal connection between the Banks loss and Melissas benefit, adopting either a narrow approach (with exceptions) or broad approach to the causal test [25 35]. There are no other defences available to Melissa [36]. The appropriate equitable remedy is that the Bank is subrogated to the unpaid sellers lien. This has the effect of reinstating Melissas liability under the charge, reversing her unjust enrichment, and allowing the Bank to enforce its equitable interest in the Property by sale [49]. Although this is a complex remedy, it has been rationalised by the development of the doctrine of unjust enrichment, and may now be applied flexibly to the facts of any particular case [37 48; 50]. Lord Neuberger agrees. The Bank can establish an unjust enrichment claim against Melissa. The first step is that she was enriched, because she received the freehold of the Property for nothing (or more accurately, received the freehold free of the intended charge) [62 64]. The second step is that Melissa was enriched at the Banks expense, both because the Bank could have prevented the purchase of the Property proceeding until it had been granted a charge, and because there was one overall scheme [65 68]. Thirdly, Melissas enrichment was unjust, since she (as a donee) could not be placed in a better position than her parents, who were not entitled to transfer the freehold free of the intended charge, and since she directly benefited from the scheme [69 73]. Fourthly, Melissa cannot point to any facts which give her a defence, even though she did not know of the charge and the Bank might have an alternative claim [73 77]. Lord Neuberger further notes that it is hard to identify a more appropriate remedy than subrogating the Bank to the lien over the freehold [79 82, 106]. The remedy is broad and flexible, and justified here on analysis of the decision of the House of Lords in Orakpo v Manson Investments Ltd [1978] AC 95, 104 and Lord Hoffmans observations in Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 [83 93]. Melissas case is by contrast pure formalism [95, 99]. This remedy could probably also be justified on the basis that the Bank had a proprietary interest in the 875,000 used to purchase the Property, and that either the Bank or Melissas parents were the beneficial owners of that sum [100 104, 106]. Lord Carnwath concurs, reaching the same conclusion, but by strict application of the traditional rules of subrogation. The proprietary restitutionary remedy is justified in this case by principles of tracing and subrogation as expressed in Boscawen v Bajwa [1996] 1 WLR 328, not because of any tenuous relationship with a vendors lien, said to subsist by way of analogy [109, 117 121]. The remedy requires that the claimant establish that its money was used to discharge the security through the process of tracing; the looser test of economic reality or simple causation (applied by the Court of Appeal in this case) is insufficient [132]. Here, there was a clear tracing link between the Bank and the money used to purchase the Property. The Banks interest in the purchase money was clear and direct. [134 140].

The narrow question raised by this appeal is whether, during the period 1 October 2002 to 5 December 2005, the takings on a particular category of machines (the disputed machines) operated by the appellants (Rank) were subject to VAT. The answer depends on whether the takings resulted from the provision of a gaming machine as defined in Note (3), more particularly whether for the purposes of that definition the element of chance in the game was provided by means of the machine. If not, the takings were exempt. The question comes to this court by a somewhat oblique route. On 21 December 2005 Rank made a substantial claim for repayment of tax (a net figure of more than 25m) for that period. That was on the basis of differences between the treatment between takings from the disputed machines, assuming they were exempt, and those from other similar machines which were taxable, thereby infringing the EU law principle of fiscal neutrality. The long and complex procedural history by which that claim has been litigated in the domestic and European tribunals and courts was sufficiently summarised by Rimer LJ in the Court of Appeal (paras 5 8, 50 52), and need not be repeated. The Court of Appeal answered the present question in favour of HMRC. Rank appeals with permission of this court. The disputed machines The disputed machines were all slot machines used for gaming. Traditionally such machines are coin operated, with three or more mechanical or video reels which spin when a button is pressed or, in the case of older machines, when a handle is pulled. The machine typically pays out according to the patterns or symbols on the machine when it stops. The basic form of the machines is sufficiently described in the agreed statement of facts, based on the findings of the VAT and Duties Tribunal: the hardware of a slot machine consists of a cabinet containing the electronic control board, power supply coin insert and pay out mechanisms, reels and/or video screens and cashboxes. The electronic control board is an embedded microprocessor control system that generates the winning and losing games and displays the results to the player via the reels, lamp displays or video screens. The machines software is a list of instructions that the processor executes in order to generate the winning or losing games. Such software is controlled either by embedded software that is controlled or random or by a remote random number generator. RNG (for random number generator) is used to describe the system for producing numbers for the machine's software, whether the system is embedded in that software or provided by means of another device. As is apparent from that description, and was explained in evidence, modern machines are entirely computerised: In modern slot machines, the reels and lever are present for historical and entertainment reasons only. The positions the reels will come to rest on are chosen by an embedded RNG contained within the machines software. The RNG is constantly generating random numbers, at a rate of hundreds or maybe thousands per second. As soon as the lever is pulled or the Play button is pressed, the most recent random number is used to determine the result. This means that the result varies depending on exactly when the game is played. A fraction of a second earlier or later, and the result would be different. (quoted by Rimer LJ, para 26) Much evidence was given about the development from the 1960s of different forms of gaming equipment, including for example bingo machines and fixed odds betting terminals, and in particular the development of different forms of RNG. This evidence was illustrated by photographs of different types of system from commercial brochures of the time. The evidence was described at some length by Rimer LJ, and again it is unnecessary to repeat it. For present purposes the significant points are the development, and (from the late 1970s) the commercial use, of RNGs in conjunction with different types of gaming equipment; and from about 2003 the development of multi machine products, with a single RNG serving a number of playing terminals. As Rimer LJ noted (para 24) it has always been common ground that the definition of gaming machine in note (3) is satisfied by at least one form of slot machine: that is the type of machine in which the element of chance was provided by an electronic or mechanical component within, and forming an integral part of, the body of the machine. The debate before the tribunal turned on the treatment of different forms of system using RNGs, either single terminal RNGs or multi terminal RNGs. As Rimer LJ explained (paras 31 35) the tribunal made findings on certain forms of single terminal RNGs. They included RNGs hanging by a wire from the terminal, or velcroed to the wall directly behind the machine or screwed to the wall (Rimer LJs category 1); or contained in a separate plinth on which the terminal stood, and linked to the terminal by a wire passing through a hole in the bottom of the terminal cabinet (category 2). The tribunal concluded (paras 54 56; summary of conclusions para 2) that terminals constructed with dedicated RNGs were gaming machines within note (3) where the RNG was used with the machine whether or not the RNG had been detached, although they observed that the position might have been different if the cable could be unplugged, the RNG did have an independent power source and was ordered and supplied separately (para 55). The machines in issue in the present appeal are all multi terminal systems. As Rimer LJ explained (paras 36 39) the evidence referred to three different types of system (his categories 3(a) to (c)), but the differences are not material for present purposes. It seems that in each case the RNG was connected by a wire to the playing terminals, but had its own power supply, and it might be housed in a separate box or hung on the wall. Up to six terminals might be served by a single remote RNG. Further, according to evidence summarised in the agreed statement of facts (para 20), each terminal was designed to be used with the RNG obtained from the manufacturer of the terminal, the terminals and RNGs were sold together, and each RNG was manufacturer specific so that a replacement if needed would have be obtained from the same manufacturer. Though linked to a single RNG, each terminal could be operated independently and could offer the same or different games as the operator wished. The legislation The Finance Act 1972, which introduced VAT to the United Kingdom, provided in Schedule 5 for certain exemptions. They included Group 4 Betting, Gaming and Lotteries, defined in these terms: Item no. 1. The provision of any facilities for the placing of bets or the playing of any games of chance. 2. The granting of a right to take part in a lottery. The general effect of this provision, which remained unamended until 1 November 1975, was to exempt from VAT the takings of all machines used for gaming. Note (1) to item 1 made three exclusions (a), (b) and (c) not relevant to the present dispute. Note (2) provided that game of chance had the same meaning as in the Gaming Act 1968. With effect from 1 November 1975 the notes to item 1 were amended by the Value Added Tax (Betting, Gaming and Lotteries) Order 1975 (the 1975 Order), subsequently consolidated into the Value Added Tax (Consolidation) Order 1976 (SI 1976/128). By a new paragraph (d) to note (1), it was provided that item 1 would not apply to the provision of a gaming machine, that term being defined by note (4): (4) Gaming machine means a machine in respect of which the following conditions are satisfied, namely it is constructed or adapted for playing a game of chance (a) by means of it; and (b) a player pays to play the machine (except where he has an opportunity to play payment free as the result of having previously played successfully), either by inserting a coin or token into the machine or in some other way; and (c) of the machine. the element of chance in the game is provided by means It is common ground that the disputed machines fall within (a) and (b) of the definition, the area of disagreement being confined to (c). Subject to minor amendments, including that what had previously been note (4) became note (3), the exemption and the exclusions remained unchanged until 6 December 2005. With effect from that date, note (3) was amended by article 2 of the Value Added Tax (Betting, Gaming and Lotteries) Order 2005 (SI 2005/3328) in a way which left no doubt that takings from the disputed machines were thenceforth taxable. Gaming Act comparisons The concept of an element of chance provided by means of the machine can be traced back to Part III of the Gaming Act 1968, which applied to Gaming by Means of Machines. For this purpose, section 52 defined machine as including any apparatus. Section 26 provided, so far as material: 26 (1) This Part of this Act applies to any machine which (a) is constructed or adapted for playing a game of chance by means of the machine, and (b) has a slot or other aperture for the insertion of money or moneys worth in the form of cash or tokens. (2) In the preceding subsection the reference to playing a game of chance by means of a machine includes playing a game of chance partly by means of a machine and partly by other means if (but only if) the element of chance in the game is provided by means of the machine. (Emphasis added) The significance of the definition in that context was in identifying the different forms of regulatory control to be applied. Part II of the 1968 Act applied to gaming on licensed premises, other than gaming by means of a machine to which Part III applied. Section 21 provided for the regulation of machines not falling within the Part III definition; hence the expression section 21 machines, used in the evidence and the judgments below. By contrast, the main regulatory provisions for Part III machines were in sections 31 to 34 of the Act. The appellants place reliance in particular on section 31, which contained restrictions on the use of such Part III machines on premises licensed or registered for the purpose. Section 31(2) and (3), as originally enacted, provided: (2) Not more than two machines to which this Part of this Act applies shall be made available for gaming on those premises. (3) The charge for play for playing a game once by means of any such machine on the premises shall be a coin or coins inserted in the machine of an amount not exceeding (or, if more than one, not in the aggregate exceeding) one shilling or such other sum as may be specified in an order made by the Secretary of State for the purposes of this subsection. Reference has also been made to section 37(1) which gives the Secretary of State a general power to impose such restrictions as he may consider necessary or expedient on the sale, supply ,maintenance or use of machines to which Part III applies. There was substantial evidence before the tribunal and the courts discussing the treatment (not always consistent) of various categories of machine by the regulatory authorities under the 1968 Act at different times. There was evidence of guidance issued by HMRC which related the tax treatment of different forms of equipment to its treatment under the 1968 Act. For example, guidance issued in January 2005 proceeded on the basis that section 21 gaming terminals were not gaming machines, as defined for either regulatory or tax purposes, because the element of chance is not provided by the terminals themselves but by a RNG which is outside the machine. That stance is clearly inconsistent with the position taken by HMRC in the present appeal, but it is not suggested that this is in any way determinative. Some help as to the meaning of the critical expression as understood in the mid 1970s, when the exclusion was drafted, can be taken from the well known description by Lord Denning MR of games of prize bingo in R v Herrod, Ex p Leeds City District Council [1976] 1 QB 540, p 558D H: I expect that everybody knows ordinary bingo. It is played at bazaars, sales of work, and so forth, for small prizes and is perfectly lawful. Now prize bingo is like ordinary bingo, but played with sophisticated apparatus. Instead of cards with numbers on them, there are dials facing the players. A player puts in a coin (5p for two cards). Thereupon two dials light up showing numbers corresponding to two cards. When the game starts, instead of someone drawing a number out of a hat, a machine throws a ball into the air. A gaily dressed lady plucks one of them and calls out the number. If it is one of the numbers on the dial, the player crosses it out by pulling a cover over it. If he gets all his numbers crossed out correctly before the other players, he gets a prize. This is obviously a lottery or a game of chance, but it is not a gaming machine because the element of chance is not provided by means of the machine but by means of the gay lady: see section 26(2) of the Gaming Act 1968. 15. In some of these premises there are also some one armed bandits. These are gaming machines. The player puts in a coin. This enables him to pull a handle to forecast a result. Cylinders revolve and give an answer. If he succeeds, he gets the winnings. If he fails, he loses his money. This is undoubtedly a gaming machine because the element of chance is provided by means of a machine: see section 26(1) of the Act of 1968 The contrast there drawn is between an element of chance provided by machinery within the device itself, and one provided by an outside agency of some kind. That approach may have been readily applied to the relatively simple types of equipment then in use. However, it is of little assistance in applying the statutory words to the more sophisticated forms of gaming device later developed. The decisions below and the arguments on the appeal It is not in dispute that in respect of all the potential comparators, whether multi terminal or single terminal, the element of chance was provided by the RNG. In the case of slot machines it is clear that the machine to which Note (3)(b) refers was the terminal into which the coins or tokens were inserted. If the conditions in (b) and (c) were both to be satisfied both the terminal and the RNG had to refer to the same machine. The use of the definite article before the word machine in (b) and (c) makes this clear. Indeed condition (a) had to be satisfied also. Where the RNG was situated inside the terminal so as to be an integral part of it, we have no doubt that the RNG and the terminal formed part of a single machine 53. Where the RNG was situated outside the terminal and served a number of terminals we conclude that the terminals were not gaming machines because the RNG was not part of any terminal and the element of chance was not provided by means of the machine containing the slot. We do not consider that the language of Note (3) was apt to cover a series of terminals linked to one RNG. The result is that by reason of Note (1)(d) to Group 4 the provision of gaming facilities by multi terminal products was exempt as a matter of law. In the High Court Norris J agreed with their approach. He said: The argument proceeded on the footing that the element of chance had to be provided by the machine and the problem lay in identifying the machine. The element of chance is the determining event which governs the outcome of the game being played on the machine which has the slot in it and which the player is playing. Where the determining event is a random number there is I think no difference in principle between a human being selecting a numbered ball, an electric ball shuffler (such as that used in the National Lottery) producing a numbered ball or a microprocessor emitting a stream of numbers. It is a question of fact in each case whether that determining event is produced by the machine, and fine distinctions might have to be drawn. In my judgment the principle by reference to which those judgments have to be made is whether the outcome of the game may sensibly be regarded as determined by an external event which the machine records or is produced by the machine itself. Like the tribunal I would hold that the random generation of a number in a separate unit which serves various player terminals (which may themselves be running different games) is properly regarded as an external event and not one produced by the machine that the player is playing. Like the tribunal I do not think it is possible to elaborate further. (para 67) 16. He had earlier rejected the suggestion that the machine might include both terminals and the RNG as conflicting with the statutory restriction on numbers: The regulatory context helps me to decide that the argument that the machine is the system of terminals linked to a common RNG is wrong (because it would effectively mean that the restrictions on numbers of machines on any given premises for which Part III provides would be meaningless since the restriction would relate to the RNG in each system, to which vast numbers of playing terminals could be linked). (para 63) 17. The Court of Appeal disagreed. Rimer LJ attached weight to considerations related to the scope of Part III of the Gaming Act 1968. It cannot, he thought, have been the purpose of Part III to confine its control to equipment comprised in a self contained single unit or terminal and to exclude from such control two separate, but linked, items of equipment that together perform an identical function (para 76). He had earlier (para 67) noted without comment the argument that a broader construction would cause difficulties for the purpose of the limits on numbers of machines under section 31(2), and the response (given by Mr Peretz for HMRC) that the problem could be met by use of the Secretary of States general regulatory powers under section 37. 18. He concluded that such a narrow, literal construction would lead to absurdity: 77. That cannot be the correct construction of the word machine. The word must, if the language of Part III is to be given a sensible and practical effect that will enable it to achieve its obvious purpose, be interpreted as including equipment ancillary, and connected, to the playing terminal that automatically provides the element of chance that determines the outcome of the game played on the terminal If this is right, it follows in my view, and for like reasons, that 79. a purpose built system comprising a terminal with a separate, but connected, RNG is also properly characterised as a machine. The terminal cannot be used for gaming purposes except by being linked to the RNG; and the RNG is designed to be linked to the terminal in order to enable the game to be played. Again, no doubt they constitute two separate items of equipment; but to treat the terminal as a separate machine in considering the impact or otherwise of Part III is unrealistic. They are being used together for the purpose of playing a game on the terminal and the RNG forms an essential element of the system. If right so far, I also do not understand why the multi terminal 80. systems should be treated any differently. The fact that there is only one RNG serving several terminals cannot make a material difference. In substance, the systems are exactly the same as in both previous configurations. By like reasoning, I cannot see why each terminal and the single RNG do not together constitute a machine within section 26. That is the substance of any such multi terminal system; and it is the substance of the matter that counts. 19. Having reached that view in respect of the Gaming Act definition he saw no reason to take a different view in respect of note (3). There again he rejected a narrow, literal reading which would reduce VAT on gaming machines to a voluntary tax, since tax could be avoided by a simple re design of the playing equipment, whilst leaving its essential function unchanged. (para 82) 20. In this court the appellants have supported the reasoning of the tribunal, which as a multifactorial assessment based on a number of primary facts should have been respected by the appellate courts (Procter & Gamble UK v Revenue and Customs Comrs [2009] EWCA Civ 407, [2009] STC 1990 para 9ff). The Court of Appeal were wrong to think that the narrow construction deprived the definition of sensible meaning, for regulatory or tax purposes, a position never previously taken by the Gaming Board or HMRC. It is not possible to identify any specific regulatory purpose which would justify a departure from the ordinary meaning of the words. Absent an abusive practice (as explained in Halifax plc v Customs & Excise Comrs (Case C 255/02) [2006] Ch 387, [2006] STC 919) the operators were entitled to design their machines in the most tax efficient way. 21. The respondents in turn support the reasoning of the Court of Appeal, relying on a purposive construction, and like them taking account of the Gaming Act regime. In particular they adopt the Court of Appeals conclusion that the word machine in the definition is apt to cover a configuration of separate, but connected, items that together enable the playing of a game of chance at a terminal . For good measure, they seek to turn on its head the appellants reliance on the principle of neutrality. So far as it applies, they argue, it favours an interpretation of note (3) which minimises any difference in treatment of similar items (Marks & Spencer plc v Customs and Excise Comrs (Case C 62/00) [2003] QB 866, [2002] ECR I 6325, para 24). Discussion 22. It is necessary first to dispose of a possible argument suggested by the court during the hearing but not adopted by either party rightly in my view. This would treat the words by means of the machine as requiring no more than that the relevant information be communicated to the player by means of the machine on which he is playing, regardless of where or how that information is generated. Thus when the player pulls a lever or presses a button on the terminal, which in turn triggers the operation of the RNG, whether or not connected to other terminals, the terminal on which he is playing becomes the means by which the element of chance is communicated, and so provided, to the player for the purposes of his game. In my view, that is not the natural sense of the words used. The question is how the element of chance is provided in the game. The definition implies an active function in the game as it is played, rather than the mere passive transfer of information to the player. 23. Secondly, with respect to the Court of Appeal, I do not consider that much help is to be gained from comparisons with the treatment of the various machines at different times under the Gaming Act. Rimer LJ observed (para 74) that much of the argument before the Court of Appeal had been directed to the question whether the disputed machines had been Part III machines for the purpose of the 1968 Act, and thought it logical to start by considering that question. I find that difficult to accept. The sole issue in the appeal concerns the construction of the VAT legislation at the relevant time. The draftsman has not simply applied the definition of gaming machine used in the Gaming Act, as he did when defining game of chance, but has merely adopted some of its elements. It cannot be assumed that he intended precisely the same results. Furthermore, even if one assumes that the policy thinking of the VAT draftsman was guided by that of the 1968 Act, that assumption is of little assistance unless perhaps a proposed interpretation conflicts materially with some aspect of the comparable provisions in the latter legislation, or if it reveals a clear basis for distinguishing in that context between the categories now in issue. With one exception relied on by Norris J (see para 16 above), no such conflict has been identified. On the other hand, it is of some relevance that no one has suggested any convincing policy reason for distinguishing, in either legislative context, between, on the one hand, embedded software or a single terminal RNG, and on the other a multi terminal RNG such as is in issue in this appeal. Unless the language points clearly in a different direction, policy considerations favour treating them in the same way. 24. Much of the argument in the tribunal and the lower courts turned on the meaning of the word machine. The tribunal did not refer to any dictionary definition of the term. However, they seem to have proceeded on the assumption that the word connoted a single item of equipment, which in the context of paragraph (b) of the definition, had to be that which was played by the player, and into which he inserted his coin or token. Accordingly, for both (b) and (c) to be satisfied both the terminal and the RNG had to refer to the same machine, that being made clear by the use of the definite article before the word machine in both. Where the RNG was situated outside the terminal and served a number of terminals, it was a separate item of equipment, so that the element of chance was not provided by means of the machine containing the slot. Norris J took a similar view. He also treated the relevant machine as that which has the slot in it and which the player is playing. It was then a question of fact whether the outcome of the game is determined by an external event which the machine records or is produced by the machine itself. The Court of Appeal interpreted the word machine in a broader sense, as extending to a configuration of separate, but connected, items of equipment that together enable the playing of a game of chance at the terminal. Again they made no reference to any dictionary definition, relying instead on what they deemed the absurdity of a more narrow interpretation, which they thought would deprive the provisions of sensible and practical effect. 25. I see some force in the appellants criticisms of the Court of Appeals reliance on arguments of absurdity, which seem difficult to reconcile with HMRCs own acceptance in the past of a narrow interpretation. However, their approach can arguably be supported by reference to the natural meaning of the word machine in its context. We have not been referred to any dictionary definitions of the word machine, but reference to the standard dictionaries does not indicate any linguistic reason to confine the word to a single item of equipment. It is in some ways a chameleon like word, and the dictionaries contain a variety of meanings. A typical and in my view accurate definition, taken from the Concise Oxford English Dictionary, is: an apparatus using or applying mechanical power, having several parts, each with a definite function and together performing certain kinds of work. 26. This is of interest in the present context for two reasons. First the use of the word apparatus as a synonym suggests that no particular significance is to be attached to the absence in the VAT legislation (as compared to the 1968 Act) of a specific reference to apparatus as part of the definition. Secondly, the emphasis is not so much on the physical nature of the equipment or its parts, as on the functions they are performing together for the purpose of a particular type of work. In the present context the overall purpose or task is the creation for a game of chance for the player, in which purpose both the terminal and the RNG play, and are designed to play, essential and connected functions. It should not matter whether that task is being performed by a single item or a combination of linked items designed for the same task. 27. If that is the correct analysis, the tribunals approach is open to the criticism that it limits its attention to the physical identity of the equipment as viewed by the player, but ignores the necessary components of the task which it is performing. The terminal is useless for the task of playing the game without the RNG. Where the RNG is linked to a single terminal, the tribunal apparently saw nothing unnatural in principle in viewing them as together constituting a single machine for playing the game. On that view, it does not matter that the coin or token is paid into one part, and the element of chance is provided by another; nor that the player may be unaware that the machine which he is playing has more than one component. 28. Similarly, even where the RNG is serving several terminals, it seems no less appropriate to treat the combined set of apparatus as a composite machine, at least where (as here) the combination has been designed and supplied for use together in the same premises, and the RNG functions for all material purposes in exactly the same way as embedded software in each terminal. From the players point of view, it may be less natural to think of him playing, or inserting his coin into, the combined machine. But viewed objectively that is what he is doing, since without the RNG his coin will not achieve its purpose, and the game will not be played. 29. The principal objection to that interpretation is that relied on by Norris J by reference to the limits in section 31 of the Gaming Act 1968. Read naturally and in context, the restriction of the numbers of machines on any premises seems directed at the terminals available to individual players. It can hardly have been intended that it could be satisfied by two multi terminal machines serving an unlimited number of players. As already noted, Mr Peretzs answer is that, even if the draftsman in 1968 may not have had in mind the possibility of multi terminal machines that cannot change the natural meaning of the words; section 37 was available to deal with changes in technology which might call for different or more sophisticated restrictions. 30. In my view, it is not necessary to resolve this debate, since one can arrive at the same practical answer as the Court of Appeal, without departing from the view that the word machine, where it matters, can refer to an individual terminal. The relevant phrase is the element of chance in the game is provided by means of the machine. In the words of Norris J, it is the determining event which governs the outcome of the game being played on the machine which the player is playing. Chance is the possibility of something happening, not in the abstract, but for a particular player in the context of a particular game; in other words, the possibility of that player getting the combination of numbers which wins a prize or conversely a combination which does not. 31. Here what determines the outcome of the game is the pressing of a button (or pulling a lever) on the terminal. The pressing of the lever is a more sophisticated equivalent of a player rolling a dice. In that context, it can fairly be said, the winning number is produced by means of the players action in throwing the dice. So here the RNG produces a pre programmed sequence of numbers which changes very rapidly. The element of chance in any game is provided by means of the action of the particular player in pressing the button and so interrupting that ever changing sequence at a particular moment. The terminal is not simply communicating information from the RNG, but is the active means by which the winning or losing combination is generated. The RNG is a necessary part of that process, but its response (wherever situated) is entirely automatic. In those circumstances, it is a fair use of language in my view, and consistent with the apparent policy of the legislation, to describe the element of chance as provided by means of the terminal. 32. Accordingly, albeit for somewhat different reasons, I agree with the conclusion reached by the Court of Appeal and I would dismiss the appeal. The tribunal concluded that the disputed machines were not gaming machines as defined by note (3). They said:

The question in this appeal is whether, in the period 1 October 2002 to 5 December 2005, the takings from slot machines (the disputed machines) operated by the appellants (Rank) were subject to Value Added Taxation (VAT). If the takings resulted from the provision of a gaming machine, as defined, then they were subject to VAT. The disputed element of the definition of gaming machine was: the element of chance in the game is provided by means of the machine. If this was not satisfied, then the takings from the disputed machines were exempt from VAT. The disputed machines were computerised. The machines typically pay out according to the symbols on the machine when it stops. The positions the reels come to rest on are chosen by a Random Number Generator (RNG), which is the system for producing numbers for the machines software. The RNG is constantly generating random numbers. As soon as the lever is pulled or the button is pressed, the most recent random number is used to determine the result. This means that the result varies depending on exactly when the game is played. It was common ground that a slot machine is a gaming machine for VAT purposes when the element of chance is provided by a component that forms part of the body of the machine on which the game is played. This appeal concerned multi terminal systems. In each case the RNG might be housed in a separate box or hung on the wall, but was connected by a wire to the playing terminals. Up to six playing terminals might be served by a single remote RNG. Each terminal was designed to be used with the RNG obtained from the manufacturer of the terminal, the terminals and RNGs were sold together, and each RNG was manufacturer specific. Though linked to a single RNG, each terminal could be operated independently and could offer the same or different games. The VAT and Duties tribunal concluded, in favour of Rank, that the disputed machines were not gaming machines because the RNG was not part of any terminal and the element of chance was not provided by the machine containing the slot. The High Court agreed. The Court of Appeal overturned this decision; Rimer LJ considered that each terminal and the single RNG could together constitute a machine. Rank appealed to the Supreme Court. The Supreme Court unanimously dismisses the appeal. Lord Carnwath gives the judgment of the Court with which Lord Neuberger, Lord Reed, Lord Toulson and Lord Hodge agree. The question is how the element of chance is provided in the game; the definition implies an active function in the game as it is played, rather than the mere passive transfer of information to the player. No one suggested any good policy reason for distinguishing between on the one hand, embedded software or a single terminal RNG, and on the other a multi terminal RNG. [22 23] The natural meaning of machine in context supports the Court of Appeals approach. A typical and accurate definition from the Concise Oxford English Dictionary is an apparatus using or applying mechanical power, having several parts, each with a definite function and together performing certain kinds of work. The overall purpose is the creation of a game of chance for the player, in which purpose both the terminal and the RNG play, and are designed to play, essential and connected functions. The tribunals approach limits attention to the physical identity of the equipment as viewed by the player, but ignores the necessary components of the task which the equipment is performing. The terminal is useless for playing the game without the RNG. Where the RNG is linked to a single terminal, the tribunal saw nothing wrong in principle in viewing them as together being a single machine for playing the game. Similarly, where the RNG serves several terminals, it is appropriate to treat the combined apparatus as a machine. [25 26] Rank argued that this approach is inconsistent with the limits on the numbers of machines on any premises (section 31 of the Gaming Act 1968). That restriction seems directed at the terminals available to individual players. It is not necessary to resolve the issue. The practical answer is that the word machine, where it matters, can refer to an individual terminal. But the relevant phrase is the element of chance in the game is provided by means of the machine. Chance is the possibility of something happening, not in the abstract, but for a particular player in the context of a particular game; the possibility of that player getting the combination of numbers which wins a prize, or a combination which does not. [29 30] The outcome of the game is determined by pressing a button or pulling a lever on the terminal. It is a more sophisticated equivalent of a player rolling a dice, where the winning number is produced by means of the players action in throwing the dice. The RNG produces a pre programmed sequence of numbers which changes very rapidly. The element of chance in any game is provided by means of the players action in pressing the button, so interrupting that ever changing sequence at a particular moment. The terminal is not simply communicating information from the RNG, but is the active means by which the winning or losing combination is generated. The RNG is a necessary part of the process, but its response (wherever it is situated) is entirely automatic. In these circumstances, it is a fair use of language, and consistent with the apparent policy of the legislation, to describe the element of chance as provided by means of the terminal. [31] Accordingly, Ranks appeal is dismissed. [32]

From time to time over many years the Secretary of State for the Home Department has been concerned to deport a foreign national on the grounds of national security. Sometimes, indeed with increasing frequency, those facing such deportation decisions have wished to contest them, either by challenging that they present a national security risk, or by invoking the European Convention on Human Rights and contending that they would be at risk of article 3 ill treatment if returned to their home country. To enable such cases to be properly heard, Parliament, by the Special Immigration Appeals Commission Act 1997 (the 1997 Act) established SIAC and, as will be very familiar to all with any interest in this area of the law, provided for an appeal system which allows where necessary for closed material procedures and the appointment of special advocates. All this has been rehearsed time and again in a succession of judgments not least, indeed, in paras 4 15 of the judgment below and no useful purpose would be served by my repeating it all here. Put very shortly, if the Secretary of State wishes to adduce evidence which, for reasons of national security or other sufficient public interest reasons, cannot safely be communicated to the appellant, SIACs rules and procedures provide for this to be done just how satisfactorily being a matter of continuing debate into which, happily, there is on this appeal no need to enter. The difficulty raised by the present case is a very different one and, it should be recognised at once, one that faces the court with what can only be regarded as the most unpalatable of choices. It is lesser evils which the court is searching for here, not perfect solutions. The difficulty and dilemma now before us can most easily be illustrated by my immediately sketching out a notional set of facts. Suppose that an appellant before SIAC (A) is a suspected terrorist whom it is proposed to return to Algeria. Such, indeed, is the position of each of the appellants now before us. Suppose this, too, is no mere supposition; it has been common ground before SIAC in a number of cases that Algeria is a country where torture is systematically practised by the DRS (Information and Security Department) and that no DRS officer has ever been prosecuted for it; and that: in the absence of [certain assurances from the Algerian Government] there would be a real risk that on his return to Algeria A (and persons in a similar position) would be tortured or subject to other ill treatment (SIACs judgment of 8 February 2007 in G v Secretary of State for the Home Department: Appeal No SC/02/05 G being one of the appellants now before us). Suppose that the Algerian authorities are hostile to any independent scrutiny of their actions in the human rights sphere: human rights organisations such as Amnesty and Human Rights Watch are not permitted to operate there; even the International Red Cross is denied access to DRS facilities. And suppose, as is also here the case, that the Secretary of State obtains assurances from the Algerian Government that As rights will be respected on return, the value of these assurances being the principal question at issue on As SIAC appeal. Suppose, then, that A wishes to adduce evidence from someone with inside knowledge of the position in Algeria asserting that, notwithstanding the Algerian Governments official assurances, those in As position on return to Algeria are in fact likely to be subject to torture or other article 3 ill treatment. Perhaps this prospective witness (W) was himself ill treated on return. Perhaps W is a whistleblower working within the Algerian prison service: an official or an interrogator or a medical practitioner. Perhaps he is a journalist or other outsider who has obtained particular information as to the fate of those like A on their return. Suppose that W (whether or not himself still in Algeria) is in a vulnerable position: he fears future torture or ill treatment either of himself or of someone near and dear to him. Perhaps at an earlier stage he had raised his concerns internally and been threatened that if ever he voiced them abroad his wife or children would suffer for it. Suppose finally that, such being the circumstances, W is not prepared to give evidence in As appeal to SIAC save only on one unalterable condition, namely that his identity and evidence will forever remain confidential to SIAC and the parties to the appeal (A and the Secretary of State). He is concerned in particular that the Secretary of State might seek to communicate something at least of his evidence to the Algerian authorities (or indeed to others in such a way as may bring him to the attention of the Algerian authorities) if only to seek to assess its veracity and reliability, and that her doing so might place him or his family in peril, something he is simply not prepared to risk. W, therefore, requires an absolute and irreversible guarantee of total confidentiality before he will permit his identity and evidence to be disclosed to the Secretary of State. Is it open to SIAC to make an order providing for such a guarantee? That, as will shortly appear, is the central question now before us. It is not, I should make clear at this stage, the appellants case that, SIAC having made an absolute and irreversible order giving W the guarantee he seeks, Ws evidence will necessarily then have to be regarded by SIAC as properly before them when finally it comes to their determining the disputed issue as to As safety on return. Rather the appellants propose an intermediate, inter partes hearing, by which time the Secretary of State must have been provided with full information as to Ws identity and intended evidence, and at which she will be able to contend that, for whatever reason, it would be wrong for SIAC to admit Ws evidence on the substantive appeal. She may suggest that in reality W has advanced no coherent case for saying that he is at risk of reprisals. Or she may say that Ws proposed evidence is inherently implausible and that, without her being afforded the least opportunity to check its authenticity or credibility or reliability it would simply not be right to afford it any weight whatever. Or she may have other arguments to advance. If, having heard them, SIAC then chooses to shut the evidence out, so be it. If, however, SIAC admits the evidence, then, reluctant though doubtless they will be to give it the weight it might have been expected to carry had the Secretary of State been permitted to check it, at least it will be before them (when ex hypothesi it would otherwise not have been) and in the result SIAC will have the benefit of the fullest possible picture on a critically important issue in the appeal: the question of As safety on return. It is on this basis and in this context that the question now arises: in such circumstances can SIAC ever properly make an absolute and irreversible order (necessarily on an ex parte application by A without the Secretary of State having an opportunity to resist it), prohibiting the Secretary of State from ever disclosing to anyone anything of Ws identity or evidence? This question the Court of Appeal on 29 July 2010 answered in the negative: [2010] EWCA Civ 898. Giving the only reasoned judgment (with which Jacob and Sullivan LJJ simply agreed), Sir David Keene (at para 27) concluded that: [I]t is not open to SIAC to make an order giving the absolute and irrevocable guarantee which is sought by the appellants. This may create a difficulty for the appellants, because of the reluctance of their potential witnesses, but it is inescapable. The adverse effect on them can be mitigated by such steps as anonymity orders and hearings in private, but irrevocable orders preventing the Secretary of State from disclosing material to a foreign state in any circumstances cannot properly be made by SIAC in advance of the Secretary of State seeing that material. As counsel for the Secretary of State said at the SIAC hearing, such a proposal is unworkable and in my view falls outside the scope of SIACs powers to give directions, broad though those powers are. Before turning to the Secretary of States objections I should observe that, although Sir David there spoke of the appellants proposals fall[ing] outside the scope of SIACs powers, he had earlier, at para 20, recorded that: Mr Tam QC, on behalf of the Secretary of State, accepts that SIAC could give directions under the Procedure Rules preventing the Secretary of State from disclosing such material to any other person, including the Algerian authorities. He acknowledges that SIACs power under rule 39 (1) to give directions relating to the conduct of any proceedings is expressed in wide and unlimited terms and could be used in conjunction with the rule 43(2) power to conduct a hearing in private for any good reason so as to prevent disclosure to other persons, including the authorities of the appellants country of origin. And that, indeed, I understand to remain the Secretary of States position. It is not for want of jurisdiction that SIAC should never make an order of the sort here contended for; rather it is because, so the Secretary of State submits, such an order could never properly be made; it can never be appropriate. Such being the case, I shall not burden this judgment with an exposition and analysis of all the various rules which arguably bear upon SIACs powers but instead shall turn at once to the Secretary of States principal reasons for saying that no order of the kind here sought should ever be made, notwithstanding that, for want of it, evidence directly going to the issue of As safety on return will on occasion not be available to SIAC when otherwise it would have been. Essentially, it seems clear, the Secretary of States fundamental objection to an order of the sort proposed is this: such an order having been made, the Secretary of State may then find herself in possession of information which (whether or not appreciated by SIAC, A or even W himself) might in one way or another suggest the existence of a terrorist threat abroad or some other risk to national security. Viewed in the context of myriad other pieces of information, it may be seen to form part of a jigsaw or mosaic (one is well familiar with the concept) whereby such risks come to be recognised. Because, however, of SIACs order, the Secretary of State will be unable to alert the foreign state to the risk, thereby gravely imperilling future diplomatic relations. True, but for the order, the Secretary of State would never have been put in possession of the information in the first place. But, runs the argument, the Secretary of State is in fact worse off with it than without it. Without it she cannot be criticised. But with it, yet bound by SIACs order to keep it to herself, she may become deeply embarrassed if the risk were then to eventuate. The court below, at paras 24 and 25 of Sir David Keenes judgment, accepted this argument: SIAC cannot, it seems to me, tie its hands in advance and say that, whatever the fresh slant on the material provided by the Secretary of State, it will in no circumstances allow disclosure to the authorities of a foreign state. How could it? It might be that the appellants material, innocuous when seen in isolation, becomes of vital diplomatic importance once combined with material in the possession of the Secretary of State. As was explored in argument, it might reveal a potential terrorist risk within the foreign state. It might indicate that, instead of the appellant having been the perpetrator of a terrorist outrage, as suspected hitherto, the true culprit remains at large in a foreign state and presents a real and immediate threat to that state. It is no answer for Mr Fordham to argue that, without the cast iron and irrevocable guarantee of non disclosure, the British Government would not even come into possession of the information. That is true, but the consequences for the United Kingdoms diplomatic relations differ radically between the two scenarios. If this countrys government is in possession of information indicating the existence of a risk of a terrorist outrage in a foreign state with which we have friendly relations and it does not warn that state, the potential impact on the United Kingdoms diplomatic relations with that state could be very serious indeed if it ever became known that our government knew of the risk. If, however, the government does not possess such information, then while the terrorist risk to the foreign state may remain the same, this country could not be accused of withholding vital information, and our diplomatic relations would not be affected. I confess to finding the argument a good deal less persuasive than did the Court of Appeal. Nor to my mind was it made good by a post hearing note submitted by the Secretary of State at our invitation giving five examples of prospective scenarios (understandably at a high level of generality) suggested to illustrate the problem. In all five examples, as it happens, the Home Secretarys stated concern is at her inability to communicate not with the country to which she proposes deporting A (here Algeria) but rather with some other foreign country (country C) to which, let us suppose, W, a known terrorist mastermind who trains suicide operatives, now says that he has moved (following torture on his return to Algeria), something about which the Secretary of State would wish to inform country C (an example in fact suggested by Lord Kerr during the hearing). Even, however, were such a scenario to play out and culminate in a terrorist atrocity in country C and it were later to emerge that the Secretary of State had known, but failed to warn country C, about Ws move there, it must surely be a substantial defence to any diplomatic complaint by country C that the Secretary of State was subject to a final and absolute court order prohibiting her from acting differently. After all, as the appellants point out, a number of recent international instruments are replete with statements urging states to ensure that witnesses are protected against ill treatment or intimidation, particularly in a human rights context see, for example, article 13 of the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment; Principle 3(b) of Annex I to the Istanbul Protocol Principles on the Effective Investigation and Documentation of Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment; paras 3, 7, 12, 13 and 20 of the 28 July 2010 Report of the United Nations High Commissioner for Human Rights on the Right to the truth; and para 3.2.8 (under the heading, Handling reluctant Sources) of the November 2010 EU common guidelines on (Joint) Fact Finding Missions. In short, I regard the Secretary of States concerns at learning more than she is permitted to divulge as an insufficient ground on which to deny A and SIAC the possible benefits of Ws evidence. That said, I do not overlook the radical nature of orders of the sort proposed here, nor, indeed, the kinds of difficulty they may bring in their wake. In the first place, such orders could be thought to come perilously close to offending against basic principles of open justice. There is nothing novel, of course, in the making of ex parte orders. But it is difficult to think of any other situation in which a respondent would be unable to seek release from a permanent injunction in this case, not to communicate his knowledge to others. The respondent can, as indicated, object at the inter partes hearing to the material being used at the eventual substantive hearing. But that is by no means the same thing as seeking to overturn the original order. There is, moreover, as the respondent points out, the further difficulty that, even though theoretically it will be open to SIAC at the inter partes hearing to rule out Ws evidence, it may be difficult for them to ignore it entirely. SIAC are, after all, required by section 5(6)(a) of the 1997 Act and by rule 4(3) of their 2003 Rules to ensure that on the material before them they can properly determine the proceedings. And there could hardly be a more important issue in those proceedings than that of As safety on return. It is that consideration, indeed, which weighs so very heavily in As favour in justifying the making of these proposed orders in the first place, given that without them SIAC will by definition never see the material. There is the obvious further problem with regard to evidence adduced on the basis proposed that the Secretary of State will be largely unable to investigate it and will find it difficult, therefore, to explain or refute it. Accordingly, the very making of the initial order must to a degree undermine the likely weight of the evidence and devalue its overall worth. In the last analysis, however, none of these considerations to my mind outweighs the imperative need to maximise SIACs chances of arriving at the correct decision on the article 3 issue before them and their need, therefore, to obtain all such evidence as may contribute to this task. I would rule, therefore, that it is open to SIAC to make such absolute and irreversible ex parte orders as are here contended for and that on occasion it may be appropriate to do so. This is, I conclude, the least worst option open to us the lesser of two evils as I put it at the outset. But at the same time I should make plain that I am far from enthusiastic about such orders and would certainly not expect a rash of them. Rather it would seem to me that the power to make them should be most sparingly used. There is, of course, the risk that the very availability of such orders may be exploited by the unscrupulous in the hope that SIAC may thereby be induced to receive untruthful evidence which, had it in the ordinary way been subject to full investigation, would have been exposed as such. I would advocate that before making one of these proposed ex parte orders, SIAC should require the very fullest disclosure from A of (a) Ws proposed evidence (namely a detailed final statement or proof of evidence depending upon whether it is proposed to adduce the evidence orally or in writing, and if the latter why in writing), (b) the particular circumstances in which W claims to fear reprisals, and (c) how A and his legal advisers came to hear about Ws proposed evidence and what if any steps they have taken to encourage him to give that evidence in the usual way subject to the usual steps generally taken to safeguard witnesses in these circumstances, namely by anonymity orders and hearings in private. If, moreover, one of these orders is made and it does then come to appear to the Secretary of State that the information disclosed may indeed be of some importance with regard to national security concerns, whether here or abroad, it should be open to the Secretary of State to try to persuade SIAC either to seek from A and W a sufficient waiver of the ex parte order forbidding any further communication of the information to enable these national security concerns to be met or, if such waiver, unreasonably in SIACs view despite their recognition of Ws fears, proves unobtainable, to shut out (or regard with additional scepticism) the evidence submitted. This power, in other words, should be exercised sensibly as well as sensitively, there being ample room for flexibility in its operation notwithstanding the absolute and irreversible nature of whatever order may initially be made. I should perhaps add this. In striking the balance in this way, I am in no way influenced by the consideration that, as earlier stated, there are circumstances in which the Secretary of State for her part is on occasion entitled to adduce evidence in closed proceedings divulged only to a special advocate and not to A. I do not see the scope for orders of the sort contended for here as, so to speak, levelling the playing field or providing equality of arms between the parties. The plain fact is that the Secretary of State is acting in these cases in the wider public interest, not as an interested party. She is, for example, obliged (now under the rules) to search for and disclose material, both open and closed, which may possibly assist As case. (He, of course, is under no corresponding duty towards the Secretary of State.) And the special advocate will to the best of his ability serve As interests, procuring on occasion rulings which may preclude the Secretary of State from relying on material however apparently damning to As cause. As Sir David Keene observed below (at para 26): The reality is that the position of an appellant and the position of the Secretary of State are not comparable, because of the public responsibilities of the latter. Since completing this judgment I have seen in draft the judgment of Lord Dyson and agree with him also. I would accordingly allow these appeals to the extent indicated. It must, of course, now be for SIAC to consider what, if any, impact our decision has upon the outcome of these appellants individual appeals: whether there is a need now to reopen them and what, if any, orders should now be made. It is to be hoped that no further order (save as to costs as to which the parties may have 28 days for written submissions) is required from this court. LORD DYSON National security issues continue to present difficult challenges to the courts. Lord Brown has explained the problem that is raised by the facts of the present case. The appellants are all Algerian nationals whom the Secretary of State for the Home Department decided under section 3(5)(a) of the Immigration Act 1971 to deport to Algeria on the basis that their presence in the United Kingdom is not conducive to the public good on grounds of national security. They appealed to the Special Immigration Appeals Commission (SIAC) who held that they posed a risk to national security and that the decisions to deport them were lawful and compatible with the European Convention on Human Rights (the Convention). Their appeals were dismissed by the Court of Appeal. The issue in all these cases is whether, if returned to Algeria, there is a real risk that the appellants would be subjected to ill treatment at the hands of the Algerian Authorities (AAs) contrary to article 3 of the Convention. One of the appellants (Z) was in a position to put forward material from a source or sources in Algeria which was relevant to safety on return. But the source(s) feared reprisals in Algeria if there were to be any disclosure of their identity to the AAs. They were willing to tell their story to SIAC (and indeed to the Secretary of State), but only on an absolute and irrevocable assurance that there would be no onward disclosure to the AAs. Rule 4(1) of the Special Immigration Appeals Commission (Procedure) Rules 2003 (SI 2003/1034) (the SIAC Rules) provides that, when exercising its functions, SIAC shall secure that information is not disclosed in any other circumstances where disclosure is likely to harm the public interest. Rule 39(1) confers on SIAC the power to give directions relating to the conduct of any proceedings. Subrule (2) provides that the power to give directions is to be exercised subject to the obligation in rule 4(1); and subrule (5) provides that directions under rule 39(1) may in particular (e) relate to any matter concerning the preparation for a hearing. Rule 43(2) enables SIAC to conduct a hearing or part of a hearing in private for any good reason (in addition to the reason identified in rule 43(1) which is not material to the appeal). It is common ground that these rules are wide enough to give SIAC the jurisdiction to make an absolute and irrevocable order prohibiting the Secretary of State from disclosing material to any person and to do so at or after a hearing from which the Secretary of State is excluded. The question is in what circumstances (if any) it may be appropriate to make such an order (which I shall refer to as an irrevocable non disclosure order). For the appellants, Mr Fordham QC submits that SIAC has the power to make such an order although it has not received informed representations from the Secretary of State as to whether the order should be made. It is able subsequently to hear informed representations from the Secretary of State as to the admission of the material in evidence. For the Secretary of State, Mr Tam QC accepts that there may be cases where an appellant is found to have good reasons for wishing to keep certain material confidential and this might provide a sound basis for SIAC to exercise its power to hold a private hearing under rule 43 and make an irrevocable non disclosure order. But he submits that it is never appropriate to make such an order on the basis of a hearing from which the Secretary of State is excluded and she should always be given the opportunity to apply subsequently to vary or discharge the order. In testing these submissions, it should be borne in mind that, as is illustrated by the circumstances of the present appeals, two conflicting considerations are in play here. On the one hand, the appellants say that, unless the order that they seek is made, they will be unable to place material before SIAC which may be crucial to their case that, if returned to Algeria, they face a real risk of ill treatment by the AAs contrary to article 3 of the Convention. If they are able to persuade SIAC of this risk, their appeals will succeed. Thus, the appellants say that it is essential to their case that they are able to place this evidence before SIAC: the stakes could hardly be higher for them (short of a risk to life itself). They also rely on rule 4(3) of the SIAC Rules which provides that subject to paragraphs (1) and (2), SIAC must satisfy itself that the material available to it enables it properly to determine proceedings. In other words, it has a duty to ascertain all relevant facts. On the other hand, it is said on behalf of the Secretary of State that there are important countervailing considerations both in relation to the conduct of the appeals and more generally. So far as the conduct of the appeals is concerned, the ability of the Secretary of State to participate in them effectively may be seriously undermined by an irrevocable non disclosure order. There are two aspects to consider. First, the cogency and validity of the reasons asserted by the source(s) in support of the claimed need for confidentiality may be open to question, but the Secretary of State will be denied the ability to test the reasons or to obtain information and/or adduce evidence from or with the assistance of the AAs to demonstrate that the asserted reasons for the claim to confidentiality are groundless. Secondly (and of perhaps even greater importance) is the fact that the Secretary of State may be seriously disadvantaged in her ability to test and challenge the substance of the evidence of the witness(es). The effect of the order may be to deprive the Secretary of State of the ability to place before SIAC relevant evidence which it should properly consider in deciding the substantive issues arising in the appeals. This would occur, for example, if the AAs were able to provide information bearing on the issue of safety on return of the appellants, but could not do so unless the identity of the witness(es) and what they have to say are disclosed to them. Once the authorities know the identity of the witness(es) and the substance of their evidence, the authorities might be able to demonstrate that what is said about the risk to the appellants on return to Algeria is false. I should add that the SIAC Rules do not make provision for the appointment of special advocates to represent the interests of the Secretary of State and it is (rightly) not suggested that SIAC could appoint special advocates under any of the powers conferred by the general rules. It follows that the difficulties to which the Secretary of State draws attention cannot be overcome or even mitigated by the appointment of a special advocate. In addition to the problems that are likely to be suffered by the Secretary of State in relation to the appeals, she says that irrevocable non disclosure orders may also cause collateral prejudice. It became clear during the course of the argument that this prejudice is the potential risk of harm to future diplomatic relations with a friendly foreign state. This is a factor which carried considerable weight with the Court of Appeal and which Lord Brown deals with at paras 11 to 15. In weighing these competing considerations, I have no doubt that the scales come down in favour of making an irrevocable non disclosure order where SIAC is satisfied that such an order is necessary in the interests of justice. I agree entirely with what Lord Brown says at paras 19 to 21 as to how the power to make an order should be exercised. SIAC should be astute to guard against the danger of abuse and should scrutinise with great care and test rigorously the claimed need for an order. But if SIAC (i) is satisfied that a witness can give evidence which appears to be capable of belief and which could be decisive or at least highly material on the issue of safety of return and (ii) has no reason to doubt that the witness genuinely and reasonably fears that he and/or others close to him would face reprisals in Algeria if his identity and the evidence that he is willing to give were disclosed to the AAs, then in my view an irrevocable non disclosure order should be made. I accept that to make such an order is a striking step for any court to take and is contrary to the instincts of any common lawyer. It is inimical to the fundamental principles which we rightly cherish of open justice and, above all, procedural fairness. To make an order without giving the Secretary of State an opportunity to be heard is a clear breach of the principles of natural justice. Any such order requires compelling justification. Regrettably, however, the circumstances of a case sometimes call for unusual and undesirable remedies. Ultimately, the court has to decide what is demanded by the interests of justice. In weighing the prejudice that the Secretary of State may suffer in the appeal process as a result of an irrevocable non disclosure order, it should not be overlooked that the appeals themselves will be conducted entirely inter partes. In particular, no material that is placed before SIAC by the appellants will be withheld from the Secretary of State. She may be able to demonstrate that the claimed need for confidentiality is without foundation and to persuade SIAC to give the evidence little or no weight for that reason alone. She may also be able to test the evidence of the witness(es) effectively even though she has been unable to discuss it with the AAs. For example, she may be able to show on the basis of objective general material about the conditions in Algeria that the evidence of the witness is unlikely to be true; and even where the evidence is more specific, she may be able to obtain information from the AAs which will enable her to rebut the evidence without divulging the name or identity of the witness or saying anything which might lead to his or her identification. It will, of course, depend on the nature of the evidence to be given by the witness. I do not wish to suggest that the effect of an irrevocable non disclosure order may not inhibit the ability of the Secretary of State to resist the appeals. In some cases, such an order will undoubtedly have that effect. But it cannot safely be said that it is bound to do so in every case. As regards the collateral prejudice claimed by the Secretary of State, like Lord Brown I consider that this has relatively little weight for the reasons that he gives. In my view, if SIAC concludes that the two conditions to which I have referred at para 34 above are satisfied, then the countervailing considerations relied on by the Secretary of State should not outweigh the need to ensure that the appellants are able to deploy any material which might show that, on return to Algeria, they would face a real risk of treatment contrary to article 3 of the Convention. The same considerations and the same result would follow if the case raised a question under article 2 of the Convention. But if the ground on which an appellant is resisting deportation is an alleged risk of breach of some other article of the Convention, the balance will almost certainly be struck the other way. For example, in many appeals against orders for deportation, the ground of appeal is that to deport the appellant would involve a breach of his or her article 8 rights. I find it difficult to conceive of a case in which it would be appropriate to make an order in order to protect the wish for confidentiality of a witness in those circumstances. For these reasons as well as those given by Lord Brown (with which I am in entire agreement), these appeals should be allowed to the extent indicated. LORD PHILLIPS, LORD KERR AND LORD WILSON We agree with both the judgments of Lord Brown and Lord Dyson.

The appellants, all Algerian nationals, were suspected terrorists whom the Secretary of State proposed to deport to Algeria. It was common ground that Algeria was a country where torture was systematically practised by state officials and no state official had ever been prosecuted for it. The Secretary of State obtained assurances from the Algerian Government that the appellants rights not to be tortured or subjected to other ill treatment would be respected on return to Algeria. The Special Immigration Appeals Commission Act 1997 established an appeal system which allows where necessary for closed material procedures and the appointment of special advocates. If the Secretary of State wishes to adduce evidence which, for reasons of national security or other sufficient public interest reasons, cannot safely be communicated to the other party, SIACs rules and procedures provide for this to be done. In this case, however, it was one of the appellants who wished to adduce evidence from a witness (W), who had inside knowledge of the position in Algeria and asserted that, notwithstanding the Algerian Governments official assurances, those in the appellants positions were in fact likely to be subjected on return to torture or other ill treatment. W was prepared to give evidence in the appellants appeals to SIAC only on one unalterable condition: that his identity and evidence would by order remain absolutely and irrevocably confidential to SIAC and the parties to the appeals. W was concerned that the Secretary of State might otherwise seek to communicate his evidence to the Algerian authorities, if only to assess its veracity and reliability, and that her doing so would place him and/or his family in peril. The Secretary of State had two main objections to such an order being made. First, she would be unable to participate effectively in the conduct of the appeals before SIAC, being unable to test either the validity of the reasons asserted by W in support of his claimed need for confidentiality or the substance of Ws evidence itself. Secondly, the Secretary of State may find herself in possession of information pointing to the existence of a terrorist threat abroad or some other risk to national security, yet, bound by SIACs order, unable to alert the foreign state to the risk. This could gravely imperil future diplomatic relations with foreign states. The question in the appeals therefore was whether it was open to SIAC to make an order for an absolute and irreversible guarantee of total confidentiality in respect of Ws identity and evidence before the same were disclosed to the Secretary of State (in circumstances where it would nevertheless remain open to the Secretary of State to challenge the admissibility or weight of that evidence before SIAC in its determination of the substantive appeals). The Supreme Court unanimously allows the appeals. Lord Brown gives the leading judgment of the Court; Lord Dyson gives a concurring judgment. The fundamental objection of the Secretary of State to the proposed order, based on her concerns about being obliged to withhold vital information relating to national security from a foreign state, thereby imperilling future diplomatic relations, is unpersuasive [11] [13]. It must surely be a substantial defence to any diplomatic complaint by a foreign state that the Secretary of State is subject to a final and absolute court order prohibiting her from acting differently [14]. A number of recent international instruments are replete with statements urging states to ensure that witnesses are protected against ill treatment or intimidation, particularly in a human rights context [15]. The imperative need here is to maximise SIACs chances of arriving at the correct decision on the issue before them concerning the safety of the appellants on return to Algeria and, therefore, for SIAC to obtain all such evidence as may contribute to this task [18]. Accordingly, it is open to SIAC to make absolute and irreversible ex parte orders of the kind sought in this case and on occasion it may be appropriate to do so [19]. The power to make such orders should however be used most sparingly [19]. Before making one of the proposed ex parte orders, SIAC should require the very fullest disclosure from the applicant (A) of (a) the proposed evidence from As proposed witness (W), (b) the particular circumstances in which W claims to fear reprisals, and (c) how A and his legal advisers came to hear about Ws proposed evidence and what if any steps they have taken to encourage W to give that evidence in the usual way subject to the usual steps generally taken to safeguard witnesses in such circumstances (e.g. anonymity orders and hearings in private) [20]. SIAC should only then, in the interests of justice, grant such an order if it (1) is satisfied that a witness can give evidence which appears to be capable of belief and which could be decisive or at least highly material on the issue of safety of return and (2) has no reason to doubt that the witness genuinely and reasonably fears that he and/or others close to him would face reprisals if his identity and the evidence that he is willing to give were disclosed to the relevant foreign state [34]. Notwithstanding the absolute and irreversible nature of the order, it should in addition be open to the Secretary of State, upon such order being made, to try to persuade SIAC either to seek from A and W a sufficient waiver of the ex parte order forbidding any further communication of the information, or, if such waiver proves unobtainable, to exclude or regard with additional scepticism the evidence submitted [21]. The Court, in permitting the making of such ex parte orders in the circumstances of this case, has in no way been influenced by the circumstances in which the Secretary of State is on occasion entitled to adduce evidence in closed proceedings divulged only to a special advocate and not to A. The scope of the orders sought here should not be regarded as levelling the playing field between the parties: the Secretary of State in cases before SIAC acts in the wider public interest and not as an interested party [22]. The same considerations and the same result would follow if the case engaging as it does here the rights of the appellants under article 3 of the ECHR raised a question under article 2 of the same. However, if the ground on which an appellant is resisting deportation is an alleged risk of breach of some other article of the ECHR (e.g. article 8), the balance will almost certainly be struck the other way. In those circumstances it would be inappropriate to make an ex parte order to protect the confidentiality of a witness [38].

This appeal requires the court again to consider one of the most controversial questions which the law of human rights can generate. It relates to the ability of the UK to deport a foreign citizen who, while lawfully resident here, has committed a string of serious crimes. The reaction of many British citizens is likely to be: We dont want this man here. His response is: But I need to remain here. In this case he no longer casts his response under article 8 of the European Convention on Human Rights (the Convention) by reference to respect for his private and family life. Instead he wishes to cast it under article 3 of the Convention which provides: No one shall be subjected to torture or to inhuman or degrading treatment or punishment. For the appellant is HIV positive. He is a citizen of Zimbabwe and his contention, which for reasons which I will explain has not yet been fully developed still less tested, is that, if deported to Zimbabwe, he would be unable to access the medication which, here in the UK, prevents his relapse into full blown AIDS. So considerations of public policy on the one hand and of what is said to be private existential need on the other clash like warriors; and upon the courts lies a heavy burden in determining which should, under the law, prevail. Reliance by the appellant on rights under article 3 has arisen at a late stage in these proceedings, which encompass a challenge on his part, so far entirely unsuccessful, to a decision by the Secretary of State to refuse to revoke an order for his deportation. At the first and second stages of them, namely in his successive appeals to the Immigration and Asylum Chamber of the First tier Tribunal and then of the Upper Tribunal, the appellant relied only on rights under article 8. Before those tribunals he conceded that, in the light of the decision of the House of Lords in N v Secretary of State for the Home Department (Terrence Higgins Trust intervening) [2005] UKHL 31, [2005] 2 AC 296, his appeal could not succeed by reference to article 3. But, before the appellants further appeal to the Court of Appeal was heard, the Grand Chamber of the European Court of Human Rights (the ECtHR) delivered its judgment in Paposhvili v Belgium [2017] Imm AR 867. On advice, the appellant then formed the view that in that judgment the Grand Chamber had given an expanded interpretation of article 3 in the context of a situation such as his own; and so he decided to abandon his reliance on article 8 and to seek to obtain an order for a rehearing before one or other of the tribunals at which he could present a case under article 3. He recognised, however, that, even if, as a result of the judgment in the Paposhvili case, the decision of the House of Lords in the N case, cited in para 2 above, about the breadth of that article had become out of step with the jurisprudence of the ECtHR, that decision remained binding on the Court of Appeal: Kay v Lambeth London Borough Council [2006] UKHL 10, [2006] 2 AC 465. Accordingly he conceded before the Court of Appeal that, at that level, his appeal, newly formulated by reference to article 3, fell to be dismissed. On 30 January 2018 the Court of Appeal duly dismissed his appeal, together with another appeal against removal brought by a Jordanian citizen suffering from cancer: [2018] EWCA Civ 64, [2018] 1 WLR 2933. It is against its order that today the appellant appeals; and he asks us to do what he could not ask the Court of Appeal to do, namely to depart from the decision in the N case by reference to the judgment in the Paposhvili case and to remit his application for rehearing by reference to article 3. In his judgment in the Court of Appeal, with which Patten and Hickinbottom LJJ agreed, Sales LJ, as he then was, not only explained why that court was required to dismiss the appeals. He also offered an interpretation of the effect of the judgment of the Grand Chamber in the Paposhvili case which the Secretary of State commends to us as correct but with which the appellant, supported by the AIRE Centre which intervenes in the appeal, strongly takes issue. It goes without saying that the interpretation offered by Sales LJ deserves considerable respect; inevitably, however, it also demands close scrutiny. Background The appellant was born in Zimbabwe in 1987 and is now 33 years old. He lived there until 2000 when he came to the UK, where his mother was already living. He has lived here ever since. In 2004 he and his mother were granted indefinite leave to remain in the UK. Early in 2005, when aged almost 18, the appellant sustained his first criminal conviction. It was for battery. During the next two years he sustained further convictions, including for assault, for receiving stolen goods and, twice, for possession of sharp blades in public places. In November 2006, soon after a son was born to the appellant and his partner (to whom he has since become married), the Secretary of State issued a decision to deport him. In January 2007 his appeal against the decision was dismissed so, in March 2007, the order for his deportation was made. He was detained pending deportation but in 2008 he was released on bail. In May 2009 the appellant was convicted of further offences. The reason why he had not by then been deported is unclear. The further offences were very serious: they were for possession of a firearm and ammunition, for which he was sentenced to seven years, and for possession of heroin with intent to supply, for which he was sentenced to two years, to run consecutively. In 2012, while he remained in prison, the appellant, by solicitors, applied to the Secretary of State to revoke the order for deportation made in March 2007 by reference to his rights under article 8 of the Convention. In due course he forwarded to the Secretary of State a letter about his medical condition. He contended that it was relevant to his right to respect for his private and family life. The letter had been written by a nurse in the sexual health clinic of a hospital. She said that he had been diagnosed as HIV positive in 2003; that the diagnosis had not given rise to concern until 2011, when his CD4 blood count had begun to fall; that in 2012 he had undertaken antiretroviral therapy (ART) but initially with a drug which had given rise to intolerable side effects, later identified as vomiting, stomach cramps, dizziness and night sweats; that the clinic had then prescribed a different drug for him, namely Eviplera, which, during the year prior to the date of the letter, had not given rise to significant side effects and which had enabled his CD4 blood count to increase and his HIV viral load to become undetectable; that his treatment and the monitoring of his condition needed to continue; that it was doubtful whether he could access ART in Zimbabwe, without which his CD4 blood count would fall again; and that in that event he would be prey to opportunistic infections which, if untreated, would lead to his death. In 2013 the Secretary of State, by letter, announced her refusal to revoke the deportation order made against the appellant. She duly determined it by reference to his claim under article 8. But, having considered the evidence referable to his medical condition, including the letter from the nurse and a country information report that ART was in principle available in Zimbabwe, she observed in passing: It is not considered for the reasons given above that you have shown that your case meets the high threshold for article 3 to be engaged. Later in 2013 the appellant was released from prison on licence. Shortly afterwards, however, he was found guilty of bringing cannabis into the prison in the course of a visit. He was recalled to prison and ordered to serve an additional six months. He was therefore again in prison at the time of the hearing before Judge Cameron in the First tier Tribunal late in 2014. At that hearing the appellant was represented by counsel. She presented his case under article 8 by reference to a wide variety of factors, including his relationship with his wife and son and also his medical condition. In the latter respect counsel relied not only on the letter from the nurse but also on a more recent letter, dated 14 August 2014, from a consultant physician in the same clinic who had been treating him for four years. He reported that the treatment of the appellant with Eviplera was continuing satisfactorily. He added: However, there is no cure for HIV at present. It is vital for individuals on antiretroviral therapy to be maintained on lifelong HIV treatment. Should this gentleman stop his treatment or be denied access to his treatment, his HIV viral load will rise, his CD4 count will decrease and he will be at risk of developing opportunistic infections, opportunistic cancers and premature death. It is vital for individuals living with HIV to maintain regular specialist follow up, and access to effective antiretroviral therapy. Counsel pointed out to Judge Cameron that, in the country information report referable to Zimbabwe, the list of ART medications available there did not include Eviplera. In the course of his Determination Judge Cameron wrote, at paras 101 102: [Counsel for the appellant] specifically indicated that article 3 was not being raised. However for the avoidance of doubt notwithstanding that the appellant is suffering from HIV and also depression, I am not satisfied that he is currently at a critical stage of the illness nor that treatment could not be available in Zimbabwe on his return albeit that it does not appear the exact medication he is currently taking is available There is nothing on the papers before me which would indicate that the appellants current medical or mental health condition would be sufficient to reach the high threshold necessary to engage [article] 3. Jurisprudence It is necessary to chart the development of the jurisprudence in the ECtHR and in our domestic courts in relation to claims under article 3 to resist return by reference to ill health. There are six main authorities. The first is the decision of the ECtHR in D v United Kingdom (1997) 24 EHRR 423. The applicant was a citizen of St Kitts. He was convicted of attempting to smuggle cocaine into the UK. Following his release from prison, the Secretary of State sought to deport him. But he was suffering from AIDS. It was in an advanced stage. His CD4 cell count, which should have been more than 500, was below 10 so he was vulnerable to a wide range of infections. In June 1996 his life expectancy was assessed as no more than a year. By the time of the hearing in Strasbourg in February 1997, he was in hospital and his life appeared to be drawing to a close. There was no drug treatment for AIDS available on St Kitts. The ECtHR held that his deportation would violate article 3. The court referred in para 51 to the advanced state of his terminal illness; in para 52 to the dramatic consequences which would attend the abrupt withdrawal of the regime of medication and care for him in the UK and his removal to an island where apparently no care was available for him; and in para 54 to the exceptional circumstances and the compelling humanitarian considerations in his case. In summary the applicant in the D case was about to die; and the essence of the decision was not the absence of treatment on St Kitts but the inhumanity of, in effect, pulling a man off his deathbed. The second is the decision of the House of Lords in the N case, cited in para 2 above. The appellant was a citizen of Uganda, aged 30. She came to the UK and claimed asylum. Her claim was rejected and the Secretary of State sought to return her to Uganda. But she was HIV positive and had suffered AIDS defining illnesses. Her CD4 cell count had fallen to 10; but over the following years the administration to her in the UK of ART and of chemotherapy had enabled it to recover to 414 and had stabilised her condition. If the administration to her of ART and the monitoring of her were to continue, as it would in the UK, she would be likely to live for decades. But her ability to access the appropriate medication and facilities in Uganda was problematic; and the prospect of her survival there for more than two years was bleak. In the N case the House of Lords examined the determination in the ECtHR during the eight years following the D case of claims under article 3 to resist removal from contracting states by reference to ill health: see in particular the speech of Lord Hope of Craighead in paras 37 to 50. Lady Hale summarised their effect in para 68: As Lord Hopes analysis shows, the later cases have made it clear that it is the patients present medical condition which is the crucial factor. The difficulty is in understanding where conditions in the receiving country fit into the analysis. In the event, however, Lady Hale expressed her conclusion in terms which did make limited allowance, perhaps only a token allowance, for conditions in the receiving state. It was as follows: 69. In my view, therefore, the test, in this sort of case, is whether the applicants illness has reached such a critical stage (ie he is dying) that it would be inhuman treatment to deprive him of the care which he is currently receiving and send him home to an early death unless there is care available there to enable him to meet that fate with dignity. It was the unanimous conclusion of the House of Lords in the N case that, in the light of her stable condition, the appellants claim under article 3 had to be dismissed. It is clear that all members of the appellate committee viewed this result with discomfort: see, for example, the speech of Lady Hale at paras 67 and 71. Some of them also expressed unease at the distinction which the jurisprudence of the ECtHR had drawn. Lord Brown of Eaton under Heywood said in para 91: It is perhaps not, however, self evidently more inhuman to deport someone who is facing imminent death than someone whose life expectancy would thereby be reduced from decades to a year or so. And see, to similar effect, the speech of Lord Nicholls of Birkenhead at para 13. But it was Lord Brown himself who drew a significant distinction between the D case and the case of N then before the committee. He pointed out, in paras 88 and 93, that the appellant in the N case contended for an interpretation of article 3 which would cast upon the UK a positive obligation, namely to continue to treat her indefinitely; whereas, in the light of his imminent death, the applicant in the D case had secured an interpretation which had cast upon the UK only a negative obligation, namely not to deport him. Lord Brown also adverted in para 89 to the far reaching consequences for contracting states if they were unable to remove foreign citizens with no other right to remain there just because treatment for their life threatening conditions in their country of origin would be far less effective than that currently administered. The third is the decision of the Grand Chamber of the ECtHR in N v United Kingdom (2008) 47 EHRR 39. The appellant in the N case in the House of Lords had become the applicant in the N case in the ECtHR. Again she relied on article 3. But, by a majority, her application was rejected. The Grand Chamber observed in para 34 that, since the judgment in the D case 11 years previously, the court had never held that removal of an alien would violate the article on grounds of ill health; in para 42 that in the D case the applicant had appeared to be close to death and that a reduction in life expectancy in the event of removal had never in itself been held to amount to a violation of article 3; in para 43 that, although there might be other very exceptional cases in which the humanitarian considerations are equally compelling, the high threshold for violation set in the D case should be maintained; and in paras 44 and 45, much as Lord Brown had suggested, that an obligation to provide free and unlimited treatment for a serious condition, if of a standard unmet in the applicants country of origin, would place too great a burden on contracting states. In para O I8 of the dissenting Opinion the relevance of this last consideration to a claim under article 3 was challenged in trenchant terms. The fourth is the decision of the ECtHR in Yoh Ekale Mwanje v Belgium (2013) 56 EHRR 35. The applicant was a citizen of Cameroon. Belgium sought to return her there. But she was HIV positive. The administration to her in Belgium of ART had stabilised her condition. The seven members of the court held that her return to Cameroon would not violate her rights under article 3. It observed in para 80 that the case was indistinguishable from the decision of the Grand Chamber in the N case; in para 81 that it was improbable that the applicant would obtain the necessary medication in Cameroon and that, without it, her survival in the short or medium term (later described as for more than a year) was in doubt; but in para 83 that the chief consideration was the applicants condition prior to removal, which was stable. Nevertheless six of the seven judges added a concurring opinion which, at para OI 6, concluded as follows: We believe however that such an extreme threshold of seriousness to be nearing death is hardly consistent with the letter and spirit of article 3, an absolute right which is among the most fundamental rights of the Convention and which concerns an individuals integrity and dignity. In this regard, the difference between a person on his or her deathbed and a person who everyone acknowledges will die very shortly would appear to us to be minimal in terms of humanity. We hope that the Court may one day review its case law in this respect. The fifth is the decision of the Grand Chamber of the ECtHR in the Paposhvili case cited in para 3 above. The applicant was a citizen of Georgia who had lived in Belgium for 18 years with his wife and family. His application for asylum was rejected. He was convicted of various criminal offences, including robbery and, ultimately, involvement in an extortion racket for which he was sentenced to imprisonment for three years. Belgium resolved to deport him to Georgia. He sought to resist deportation by reference to his rights under article 8 of the Convention but also, in particular, under article 3 in light of his grave ill health. His application to the ECtHR was first considered by its Fifth Section, which held that his deportation would not violate his Convention rights. But the Grand Chamber accepted referral of his application. During the period when, following the hearing, the Grand Chamber was deliberating upon the application, the applicant died. Nevertheless it decided to proceed to judgment, which it delivered in December 2016. In the event the Grand Chamber held that, if carried out at the stage proposed by Belgium, his deportation would have violated his rights under article 3 and, in a section of the judgment which it is unnecessary to address, also under article 8 of the Convention. The principal feature of the applicants ill health in the Paposhvili case was chronic lymphocytic leukaemia, from which he had suffered for ten years. He had undergone extensive courses of chemotherapy but after five years his level of leukaemia had risen from Binet stage B to Binet stage C and in 2014 a different course of treatment had been considered necessary. Short term treatment with the medication Ibrutinib was prescribed for the applicant, in a dose costing about 6,000 per month; and the plan, in the event never implemented, was that the medication might swiftly improve his condition to the point where he could receive a donor blood stem cell transplant, at a cost of about 150,000. Shortly before the hearing in the Grand Chamber the applicant filed an up to date report by his haematology specialist. He explained that the Ibrutinib had stabilised the applicants condition; that, were it discontinued, he would be likely to die within six months; that the proposed donor transplant, albeit risky, offered the only prospect of a cure; and that neither Ibrutinib nor a transplant would be available to him in Georgia. The specialist also referred to a variety of collateral conditions from which the applicant suffered and which rendered treatment for his leukaemia even more difficult, including pulmonary tuberculosis, hepatitis C and a recent stroke which had permanently paralysed his left arm. Following a careful analysis of the decision in the D case and of its own decision in the N case, the Grand Chamber in the Paposhvili case expressed the view in para 182 that the approach hitherto adopted should be clarified. The Convention is a living instrument and when, however appropriately, the ECtHR charts its growth, it may generate confusion for it to claim to be providing only clarification. The court proceeded as follows: 183. The Court considers that the other very exceptional cases within the meaning of the judgment in N v The United Kingdom (para 43) which may raise an issue under article 3 should be understood to refer to situations involving the removal of a seriously ill person in which substantial grounds have been shown for believing that he or she, although not at imminent risk of dying, would face a real risk, on account of the absence of appropriate treatment in the receiving country or the lack of access to such treatment, of being exposed to a serious, rapid and irreversible decline in his or her state of health resulting in intense suffering or to a significant reduction in life expectancy. The Court points out that these situations correspond to a high threshold for the application of article 3 of the Convention in cases concerning the removal of aliens suffering from serious illness. This important exposition will require study in paras 27 to 31 below; but, again, it is hard to think that it is encompassed by the reference in the N case to other very exceptional cases because any application of the criterion in the quoted passage would be likely to have led to a contrary conclusion in the N case itself. It is also convenient at this stage to address the words although not at imminent risk of dying in the first long sentence of the paragraph. As was agreed by counsel, the words refer to the imminent risk of death in the returning state. So the Grand Chamber was thereby explaining that, in cases of resistance to return by reference to ill health, article 3 might extend to a situation other than that exemplified by the D case, cited in para 14 above, in which there was an imminent risk of death in the returning state. Its new focus on the existence and accessibility of appropriate treatment in the receiving state led the Grand Chamber in the Paposhvili case to make significant pronouncements about the procedural requirements of article 3 in that regard. It held in para 186 that it was for applicants to adduce before the returning (a) state evidence capable of demonstrating that there are substantial grounds for believing that, if removed, they would be exposed to a real risk of subjection to treatment contrary to article 3; (b) in para 187 that, where such evidence was adduced in support of an application under article 3, it was for the returning state to dispel any doubts raised by it; to subject the alleged risk to close scrutiny; and to address reports of reputable organisations about treatment in the receiving state; (c) in para 189 that the returning state had to verify on a case by case basis whether the care generally available in the receiving state was in practice sufficient to prevent the applicants exposure to treatment contrary to article 3; in para 190 that the returning state also had to consider the accessibility (d) of the treatment to the particular applicant, including by reference to its cost if any, to the existence of a family network and to its geographical location; and (e) in para 191 that if, following examination of the relevant information, serious doubts continued to surround the impact of removal, the returning state had to obtain an individual assurance from the receiving state that appropriate treatment would be available and accessible to the applicant. These procedural obligations on returning states, at first sight very onerous, will require study in paras 32 and 33 below. It was the failure of Belgium to discharge the suggested procedural obligations which precipitated the Grand Chambers conclusion in the Paposhvili case that deportation of the applicant to Georgia would have violated his rights under article 3. It seems from para 197 that it treated the doctors evidence as capable of demonstrating that there [were] substantial grounds for believing that deportation would expose him to a real risk of treatment contrary to article 3. Belgiums procedural obligations were therefore engaged but not discharged: see para 205. The sixth is the decision of the Fourth Section of the ECtHR in Savran v Denmark [2019] ECHR 651, given as recently as 1 October 2019. The applicant was a Turkish citizen who, in 1991 when aged six, had come with his family to live in Denmark and who had remained living there. In 2001 he was convicted of robbery and in 2008 he was convicted of acting with others in an assault which had led to the victims death. It seems that, by the time of his conviction (in fact reconviction) for the latter offence, he had been diagnosed with paranoid schizophrenia and so he was sentenced to committal to psychiatric care, to be followed by expulsion to Turkey. In 2014 a City Court in Denmark varied the sentence so as to permit the applicant to receive his psychiatric treatment as an outpatient. But the main issue before that court was whether the order for his expulsion should be revoked. In this regard the applicant relied not on his Convention rights but on a domestic statute which required its revocation if his state of health made expulsion of him conclusively inappropriate. The City Court revoked the order but the High Court reversed its decision, whereupon he applied to the ECtHR by reference to his rights under article 8 and in particular under article 3. In the Savran case the revocation proceedings in Denmark had been concluded prior to delivery by the Grand Chamber of its judgment in the Paposhvili case. But, as the Grand Chamber acknowledged, the Danish courts had considered in some detail the availability and accessibility of appropriate treatment for the applicant in Turkey, as later mandated for the purposes of article 3 by the judgment in the Paposhvili case. By that stage treatment of the applicant in Denmark took the form of the daily ingestion of Clozapine, which required monitoring in particular with blood tests, and of the fortnightly injection of Risperidone. There was evidence that both drugs were available in Turkey and could be supplied free of charge if appropriate. But his treating psychiatrist had also suggested to the Danish courts that other elements of the necessary treatment package were the presence of a regular contact person and a scheme for follow up and for his overall supervision, without which he would relapse and become dangerous; and, in deciding that on the present state of the evidence his removal to Turkey would violate his rights under article 3, the majority in the Fourth Section held in paras 63 to 65 that, crucially, there had been no evidence before the Danish courts about the accessibility of those elements. Of the seven judges in the ECtHR, three wrote a dissenting Opinion in which in para 9 they accused the majority of pushing the door into article 3 wide open in circumstances in which the Grand Chamber in the Paposhvili case had opened it only slightly; and in which in paras 11 to 14 they alleged that, had it applied what the minority described as the new criterion identified in para 183 of the judgment in the Paposhvili case by asking whether there was a real risk of the applicants exposure to a serious, rapid and irreversible decline in his health resulting in intense suffering, the majority could not have held that his rights under article 3 would be violated. In January 2020 the Grand Chamber accepted a request by Denmark for referral to it of the Savran case; and we are told that the UK has recently applied for leave to intervene in the proceedings. This court has not been invited to postpone delivery of its judgment until after the decision of the Grand Chamber in the Savran case; and it means no disrespect to the Grand Chamber by not postponing it. The Grand Chambers decision cannot be imminent; and, so this court is told, the determination of other urgent appeals to the tribunals awaits its judgment on this appeal. Analysis We need to analyse the effect of the decision in the Paposhvili case and, first, to survey the analysis of its effect conducted by the Court of Appeal. It was that courts view, at para 39, that the decision reflected only a very modest extension of the protection against return given by article 3 in cases of ill health. The Court of Appeal fastened in para 39(iv) upon the Grand Chambers questionable choice of language that the previous approach to such cases needed only to be clarified. And it buttressed its restrictive view of the effect of the decision by claiming in para 39(ii) that the Grand Chamber had noted that there had been no violation of article 3 in the N case and in para 40 that the Grand Chamber had plainly regarded that case as rightly decided. But the careful reader of paras 178 to 183 of the judgment in the Paposhvili case may find it hard to agree with the Court of Appeal in this respect. Of course the Grand Chamber noted that it had been held in the N case there had been no violation of article 3; but there is no express agreement on its part with that conclusion and, subject to the precise meaning of the new criterion in para 183 of the judgment (to which we should now turn), its application to the facts of the N case would suggest a violation. The Court of Appeal interpreted the new criterion in para 183 of the judgment in the Paposhvili case, at para 38 as follows: This means cases where the applicant faces a real risk of rapidly experiencing intense suffering (ie to the article 3 standard) in the receiving state because of their illness and the non availability there of treatment which is available to them in the removing state or faces a real risk of death within a short time in the receiving state for the same reason. In other words, the boundary of article 3 protection has been shifted from being defined by imminence of death in the removing state (even with the treatment available there) to being defined by the imminence (ie likely rapid experience) of intense suffering or death in the receiving state, which may only occur because of the non availability in that state of the treatment which had previously been available in the removing state. The criticism of the above passage made by the appellant and by the AIRE Centre largely relates to the second sentence. In relation, however, to the first sentence, they suggest that, irrespective of the precise meaning, in context, of a significant reduction in life expectancy in para 183 (as to which see para 31 below), the paraphrase of death within a short time favoured by the Court of Appeal may not be entirely accurate. In relation to the second sentence, their criticism is directed to the words the imminence (ie likely rapid experience) of death in the receiving state attributable to the non availability of treatment. They point out that the Grand Chamber was addressing exposure to a serious, rapid and irreversible decline in his or her state of health resulting in intense suffering or to a significant reduction in life expectancy (italics supplied); and they contend that the Court of Appeal has misinterpreted those words so as to refer to a serious, rapid and irreversible decline in his or her state of health resulting in intense suffering or in a significant reduction in life expectancy. The Secretary of State, for her part, rejects their criticism as narrow and syntactical, apt perhaps to the construction of a statute but inapt to the present context in which the meaning of para 183 should be informed by case law and realism. Her reference to case law turns out to be an indorsement of the questionable conclusion of the Court of Appeal that in the Paposhvili case the Grand Chamber approved its decision in the N case. What remains is her reference, rather undeveloped, to realism. There is, so I am driven to conclude, validity in the criticism of the Court of Appeals interpretation of the new criterion. In its first sentence the reference by the Grand Chamber to a significant reduction in life expectancy is interpreted as death within a short time. But then, in the second sentence, the interpretation develops into the imminence of death; and, as is correctly pointed out, this is achieved by attributing the words rapid decline to life expectancy when, as written, they apply only to intense suffering. The result is that in two sentences a significant reduction in life expectancy has become translated as the imminence of death. It is too much of a leap. It remains, however, to consider what the Grand Chamber did mean by its reference to a significant reduction in life expectancy in para 183 of its judgment in the Paposhvili case. Like the skin of a chameleon, the adjective takes a different colour so as to suit a different context. Here the general context is inhuman treatment; and the particular context is that the alternative to a significant reduction in life expectancy is a serious, rapid and irreversible decline in health resulting in intense suffering. From these contexts the adjective takes its colour. The word significant often means something less than the word substantial. In context, however, it must in my view mean substantial. Indeed, were a reduction in life expectancy to be less than substantial, it would not attain the minimum level of severity which article 3 requires. Surely the Court of Appeal was correct to suggest, albeit in words too extreme, that a reduction in life expectancy to death in the near future is more likely to be significant than any other reduction. But even a reduction to death in the near future might be significant for one person but not for another. Take a person aged 74, with an expectancy of life normal for that age. Were that persons expectancy be reduced to, say, two years, the reduction might well in this context not be significant. But compare that person with one aged 24 with an expectancy of life normal for that age. Were his or her expectancy to be reduced to two years, the reduction might well be significant. The Grand Chambers pronouncements in the Paposhvili case about the procedural requirements of article 3, summarised in para 23 above, can on no view be regarded as mere clarification of what the court had previously said; and we may expect that, when it gives judgment in the Savran case, the Grand Chamber will shed light on the extent of the requirements. Yet observations on them may even now be made with reasonable confidence. The basic principle is that, if you allege a breach of your rights, it is for you to establish it. But Convention proceedings do not in all cases lend themselves to a rigorous application of [that] principle : DH v Czech Republic (2008) 47 EHRR 3, para 179. It is clear that, in application to claims under article 3 to resist return by reference to ill health, the Grand Chamber has indeed modified that principle. The threshold, set out in para 23(a) above, is for the applicant to adduce evidence capable of demonstrating that there are substantial grounds for believing that article 3 would be violated. It may make formidable intellectual demands on decision makers who conclude that the evidence does not establish substantial grounds to have to proceed to consider whether nevertheless it is capable of demonstrating them. But, irrespective of the perhaps unnecessary complexity of the test, let no one imagine that it represents an undemanding threshold for an applicant to cross. For the requisite capacity of the evidence adduced by the applicant is to demonstrate substantial grounds for believing that it is a very exceptional case because of a real risk of subjection to inhuman treatment. All three parties accept that Sales LJ was correct, in para 16, to describe the threshold as an obligation on an applicant to raise a prima facie case of potential infringement of article 3. This means a case which, if not challenged or countered, would establish the infringement: see para 112 of a useful analysis in the Determination of the President of the Upper Tribunal and two of its senior judges in AXB v Secretary of State for the Home Department [2019] UKUT 00397 (IAC). Indeed, as the tribunal proceeded to explain in para 123, the arrangements in the UK are such that the decisions whether the applicant has adduced evidence to the requisite standard and, if so, whether it has been successfully countered fall to be taken initially by the Secretary of State and, in the event of an appeal, again by the First tier Tribunal. In the event that the applicant presents evidence to the standard addressed above, the returning state can seek to challenge or counter it in the manner helpfully outlined in the judgment in the Paposhvili case at paras 187 to 191 and summarised at para 23(b) to (e) above. The premise behind the guidance, surely reasonable, is that, while it is for the applicant to adduce evidence about his or her medical condition, current treatment (including the likely suitability of any other treatment) and the effect on him or her of inability to access it, the returning state is better able to collect evidence about the availability and accessibility of suitable treatment in the receiving state. What will most surprise the first time reader of the Grand Chambers judgment is the reference in para 187 to the suggested obligation on the returning state to dispel any doubts raised by the applicants evidence. But, when the reader reaches para 191 and notes the reference, in precisely the same context, to serious doubts, he will realise that any doubts in para 187 means any serious doubts. For proof, or in this case disproof, beyond all doubt is a concept rightly unknown to the Convention. This court is not actively invited to decline to adopt the exposition of the effect of article 3 in relation to claims to resist return by reference to ill health which the Grand Chamber conducted in the Paposhvili case. Although the Secretary of State commends the Court of Appeals unduly narrow interpretation of the Grand Chambers exposition, she makes no active submission that, in the event of a wider interpretation, we should decline to adopt it. Our refusal to follow a decision of the ECtHR, particularly of its Grand Chamber, is no longer regarded as, in effect, always inappropriate. But it remains, for well rehearsed reasons, inappropriate save in highly unusual circumstances such as were considered in R (Hallam) and R (Nealon) v Secretary of State for Justice (JUSTICE intervening) [2019] UKSC 2, [2020] AC 279. In any event, however, there is no question of our refusing to follow the decision in the Paposhvili case. For it was 15 years ago, in the N case cited at para 2 above, that the House of Lords expressed concern that the restriction of article 3 to early death only when in prospect in the returning state appeared illogical: see para 17 above. In the light of the decision in the Paposhvili case, it is from the decision of the House of Lords in the N case that we should today depart. Disposal As indicated above, the Secretary of State, the First tier Tribunal and the Upper Tribunal each specifically noted that the appellant was not making a claim under article 3. In the light of the decision of the House of Lords in the N case, no such claim could have prevailed, as, in passing, the Secretary of State and the First tier Tribunal each observed. By the time of the hearing in the Court of Appeal, however, the decision in the Paposhvili case had raised the prospect that we in this court might depart from the decision of the House of Lords in the N case. So the appellant began to express the wish to be allowed to cast his claim under article 3 instead of under article 8. He accepted, however, that such a claim could not succeed unless, on further appeal, he could persuade this court to depart from the decision in the N case. For that reason he did not, with whatever degree of difficulty at an appellate level, attempt to adduce before the Court of Appeal evidence in support of his proposed new claim under article 3. This, however, did not deter the Secretary of State from contending before the Court of Appeal, nor did it deter that court from accepting, that, even by reference to the decision in the Paposhvili case, the appellant would have no claim under article 3. For, from the evidence submitted by the appellant to the First tier Tribunal in support of his claim under article 8, the Secretary of State extracted the two medical reports summarised in paras 8 and 11 above; and she contended that they failed to cross the threshold required to be crossed by applicants pursuant to para 186 of the decision in the Paposhvili case, as set out in para 23(a) above. In the light of its erroneous opinion that the decision in the Paposhvili case required evidence of a real risk that either intense suffering or death would be imminent in the receiving state, it was not difficult for the Court of Appeal to conclude, in para 44, that the two medical reports were insufficient to cross that threshold. Apart from the fact that the Court of Appeals conclusion about the insufficiency of the reports was therefore, with respect, flawed, it is inappropriate to extract the medical reports from the other evidence submitted in furtherance of the claim under article 8 and to ask whether they cross the threshold now required of an applicant under article 3 pursuant to the decision in the Paposhvili case. The reports did not address that requirement, which did not exist when they were written. Indeed they were both written more than five years ago. So in my view this court should not address the argument presented to it by the appellant, and strongly disputed by the Secretary of State, namely that, upon application of this courts wider interpretation of the Grand Chambers decision, the reports suffice to cross the requisite threshold. The proper course is to allow the appeal and to remit the appellants proposed claim under article 3 to be heard, on up to date evidence properly directed to the Grand Chambers substantive and procedural requirements, by the Upper Tribunal and, if practicable, by a panel including its President.

This appeal relates to the UKs ability to deport the appellant, a Zimbabwean citizen, who, while lawfully resident here, has committed serious crimes. He seeks to challenge the order for his deportation by reference to article 3 of the European Convention on Human Rights (the Convention), which provides: No one shall be subjected to torture or inhuman or degrading treatment or punishment. He is HIV positive and wishes to argue that if deported to Zimbabwe he would be unable to access the medication which he receives in the UK and which prevents his relapse into full blown AIDS. The appellant was born in Zimbabwe in 1987. He came to the UK in 2000 and was later granted indefinite leave to remain. He was convicted of battery and a deportation order was made against him. He was detained pending deportation but was released. He was then convicted of offences including possession of a firearm and ammunition and sentenced to further imprisonment. While in prison, he applied to the Secretary of State to revoke the deportation order. He invoked his right to respect for private and family life under article 8 of the Convention and argued that his medical condition was relevant. His evidence was as follows. He had been diagnosed as HIV positive. He had later undergone antiretroviral therapy (ART), initially with a drug that caused intolerable side effects but later with another drug, Eviplera, which had improved his condition without significant side effects. Whether he could access ART in Zimbabwe was doubtful; without it, he would be prey to infections which could lead to his death. After considering the evidence, the Secretary of State refused to revoke the order. The appellant appealed to the First tier Tribunal and then the Upper Tribunal, relying each time on article 8. He conceded that, in the light of the House of Lords decision in N v Secretary of State for the Home Department [2005] UKHL 31, [2005] 2 AC 296, his appeal could not succeed by reference to article 3. Before the hearing in his appeal to the Court of Appeal, the Grand Chamber of the European Court of Human Rights (the ECtHR) delivered its judgment in Paposhvili v Belgium [2017] Imm AR 867. The appellant formed the view that the judgment had expanded the scope of application of article 3 in cases like his and decided to seek a rehearing before a tribunal at which he could rely on it instead of article 8. He conceded in the Court of Appeal, however, that it was bound by the N case, even if that had become out of step with the ECtHRs case law as a result of Paposhvili. The Court of Appeal duly dismissed his appeal. He now appeals to the Supreme Court, asking it to depart from the N case by reference to Paposhvili and to remit his application for rehearing by reference to article 3. The Supreme Court unanimously allows the appeal. It remits the appellants claim under article 3 to be heard by the Upper Tribunal (and, if practicable, by a panel including its President) on up to date evidence properly directed to the substantive and procedural requirements set out by the Grand Chamber of the ECtHR. Lord Wilson gives the only judgment, with which the other Justices agree. In D v United Kingdom (1997) 24 EHRR 423, the ECtHR held that to remove a man who was on his deathbed to a state where no care was available for him would violate article 3; and it referred to the exceptional circumstances and compelling humanitarian considerations in his case [14]. In the N case, the House of Lords considered the ECtHRs decision in this case and others like it concerning article 3. It held that the test in such cases was whether the applicants illness had reached such a critical stage that it would be inhuman to deprive him of the care he was receiving and to send him to an early death in the receiving state, unless there was care available there to enable him to meet it with dignity [15 17]. In N v United Kingdom (2008) 47 EHRR 39, the ECtHR held that, although there might be other very exceptional cases in which the humanitarian considerations are equally compelling to those in the D case, a high threshold for violation of article 3 should be maintained [18]. In Paposhvili, the ECtHR reconsidered what those other very exceptional cases were. It held (at para 183) that they should now be taken to include cases in which there were substantial grounds for believing that the applicant, while not at imminent risk of dying, would face a real risk in the receiving country of being exposed either to a serious, rapid and irreversible decline in health resulting in intense suffering, or to a significant reduction in life expectancy [22]. According to the Court of Appeal in the present case, the test for violation of article 3 following Paposhvili is no longer whether death is imminent in the removing state, but whether intense suffering or death is imminent in the receiving state because treatment is unavailable there [29]. The Court of Appeal was, however, mistaken in taking the ECtHRs phrase, a significant reduction in life expectancy, to mean the imminence of death [30]. But what does the phrase mean? Significant here means substantial: only a substantial reduction in life expectancy would reach the level of severity required by article 3. In addition, a reduction in life expectancy to death in the near future is more likely to be significant than any other reduction [31]. In Paposhvili, the ECtHR also set out requirements (at paras 186 to 191) for the procedure to be followed in relation to applications under article 3 to resist return by reference to ill health [23, 32]. One requirement is for the applicant to adduce evidence capable of demonstrating that there are substantial grounds for believing that, if removed, he or she would be exposed to a real risk of being subjected to treatment contrary to article 3. That is a demanding threshold for the applicant. His or her evidence must be capable of demonstrating substantial grounds for believing that it is a very exceptional case because of a real risk of subjection to inhuman treatment. He or she must put forward a case which, if not challenged or countered, would establish a violation of the article [32]. If the applicant presents evidence to that standard, the returning state can seek to challenge or counter it. Paposhvili states that, in doing so, the returning state must dispel any doubts raised by the evidence; but any doubts here should be read to mean any serious doubts [33]. The court should only refuse to follow a decision of the ECtHR in highly unusual circumstances, and there is no question of the courts refusing to follow Paposhvili. In the light of that judgment, the court should now depart from the decision of the House of Lords in the N case [34]. The appellant first raised his article 3 claim in the Court of Appeal and, having accepted that it could not succeed at that level, he did not present evidence to support it. It was inappropriate for the Court of Appeal to extract medical reports from the evidence submitted in support of his article 8 claim, which did not address the Paposhvili requirements [36]. The court should not now determine whether the reports cross the threshold required of an applicant under article 3 following Paposhvili. The proper course is to allow the appeal and to remit the article 3 claim to be heard on up to date evidence [37].

This appeal arises out of proceedings for ancillary relief following a divorce. The principal parties before the judge, Moylan J, were Michael and Yasmin Prest. He was born in Nigeria and she in England. Both have dual Nigerian and British nationality. They were married in 1993, and during the marriage the matrimonial home was in England, although the husband was found by the judge to have been resident in Monaco from about 2001 to date. There was also a second home in Nevis. The wife petitioned for divorce in March 2008. A decree nisi was pronounced in December 2008, and a decree absolute in November 2011. The husband is not party to the appeal in point of form, although he is present in spirit. The appeal concerns only the position of a number of companies belonging to the group known as the Petrodel Group which the judge found to be wholly owned and controlled (directly or through intermediate entities) by the husband. There were originally seven companies involved, all of which were joined as additional respondents to the wifes application for ancillary relief. They were Petrodel Resources Ltd (PRL), Petrodel Resources (Nigeria) Ltd (PRL Nigeria), Petrodel Upstream Ltd (Upstream), Vermont Petroleum Ltd (Vermont), Elysium Diem Ltd, Petrodel Resources (Nevis) Ltd (PRL Nevis) and Elysium Diem Ltd (Nevis). Three of these companies, PRL, Upstream and Vermont, all incorporated in the Isle of Man, are the respondents in this court. PRL was the legal owner of the matrimonial home, which was bought in the name of the company in 2001 but was found by the judge to be held for the husband beneficially. There is no longer any issue about that property, which is apparently in the process of being transferred to the wife. In addition, PRL was the legal owner of five residential properties in the United Kingdom and Vermont is the legal owner of two more. The question on this appeal is whether the court has power to order the transfer of these seven properties to the wife given that they legally belong not to him but to his companies. Part II of the Matrimonial Causes Act 1973 confers wide powers on the court to order ancillary relief in matrimonial proceedings. Section 23 provides for periodical and lump sum payments to a spouse or for the benefit of children of the marriage. Under section 24(1)(a), the court may order that a party to the marriage shall transfer to the other party. such property as may be so specified, being property to which the first mentioned party is entitled, either in possession or reversion. Section 25 provides for a number of matters to which the court must in particular have regard in making such orders, including, at section 25(2)(a), the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future. The proper exercise of these powers calls for a considerable measure of candour by the parties in disclosing their financial affairs, and extensive procedural powers are available to the court to compel disclosure if necessary. In this case, the husbands conduct of the proceedings has been characterised by persistent obstruction, obfuscation and deceit, and a contumelious refusal to comply with rules of court and specific orders. The judge, Moylan J, recited in his judgment the long history of successive orders of the court which were either ignored or evaded, the various attempts of the husband to conceal the extent of his assets in the course of his evidence, and the collusive proceedings in Nigeria by which he sought declarations that certain of the companies were held in trust for his siblings. The only evidence on behalf of the respondent companies was an affidavit sworn by Mr Jack Murphy, a director of PRL and the corporate secretary of the three respondent companies, who failed to attend for cross examination on it. The judge rejected his excuse that he was in bad health, and found that he was unwilling rather than unable to attend court. His conclusion was that as a result of the husbands abject failure to comply with his disclosure obligations and to comply with orders made by the court during the course of these proceedings, I do not have the evidence which would enable me to assemble a conventional schedule of assets. However, he found that the husband was the sole beneficial owner and the controller of the companies, and doing the best that he could on the material available assessed his net assets at 37.5 million. By his order dated 16 November 2011, Moylan J ordered that the husband should procure the conveyance of the matrimonial home at 16, Warwick Avenue, London W2 to the wife, free of incumbrances, and that he should make a lump sum payment to her of 17.5 million and periodical payments at the rate of 2% of that sum while it remained outstanding, together with 24,000 per annum and the school fees for each of their four children. In addition he awarded costs in favour of the wife, with a payment of 600,000 on account. The judge ordered the husband to procure the transfer of the seven UK properties legally owned by PRL and Vermont to the wife in partial satisfaction of the lump sum order. He directed those companies to execute such documents as might be necessary to give effect to the transfer of the matrimonial home and the seven properties. Moreover, in awarding costs to the wife, the judge directed that PRL, Upstream and Vermont should be jointly and severally liable with the husband for 10% of those costs. Corresponding orders were made against certain of the other corporate respondents to the original proceedings, but they did not appeal, either to the Court of Appeal or to this court, and are no longer relevant, save insofar as the facts relating to them throw light on the position of the three respondents. No order was made (or sought) for the transfer of any assets of Upstream, but that company is interested in the present appeal by virtue of its liability under the judges order for part of the wifes costs. The distinctive feature of the judges approach was that he concluded that there was no general principle of law which entitled him to reach the companies assets by piercing the corporate veil. This was because the authorities showed that the separate legal personality of the company could not be disregarded unless it was being abused for a purpose that was in some relevant respect improper. He held that there was no relevant impropriety. He nevertheless concluded that in applications for financial relief ancillary to a divorce, a wider jurisdiction to pierce the corporate veil was available under section 24 of the Matrimonial Causes Act. The judge found that the matrimonial home was held by PRL on trust for the husband, but he made no corresponding finding about the seven other properties and refused to make a declaration that the husband was their beneficial owner. It is tolerably clear from his supplementary judgment of 16 November 2011 (on the form of the order), that this was because having decided that he was specifically authorised to dispose of the companies properties under section 24, it was unnecessary for him to do so and undesirable because of the potential tax consequences. It is not clear what potential tax consequences he had in mind, but his observation suggests that without them he might well have made the declaration sought. In the Court of Appeal, the three respondent companies challenged the orders made against them on the ground that there was no jurisdiction to order their property to be conveyed to the wife in satisfaction of the husbands judgment debt. This contention, which has been repeated before us, raises a question of some importance. For some years it has been the practice of the Family Division to treat the assets of companies substantially owned by one party to the marriage as available for distribution under section 24 of the Matrimonial Causes Act, provided that the remaining assets of the company are sufficient to satisfy its creditors. In the Court of Appeal, the practice was supported by Thorpe LJ, but the majority disagreed. Rimer LJ, delivering the leading judgment for the majority, held that the practice developed by the Family Division was beyond the jurisdiction of the court unless (i) the corporate personality of the company was being abused for a purpose which was in some relevant respect improper, or (ii) on the particular facts of the case it could be shown that an asset legally owned by the company was held in trust for the husband. He considered that the judge had rejected both of these possibilities on the facts, and that he ought not therefore to have made the order. In a short concurring judgment, Patten LJ said that the Family Division had developed an approach to company owned assets in ancillary relief applications which amounts almost to a separate system of legal rules unaffected by the relevant principles of English property and company law. The practice, he concluded, must now cease. This has significant practical implications. Unless the UK properties of the Petrodel Group are transferred to Mrs Prest, it is possible (she says likely) that the lump sum order in her favour will remain wholly unsatisfied. To date, the matrimonial home has been transferred to her but only subject to a pre existing charge in favour of BNP Paribas to secure a debt of undisclosed amount. 10% of the money ordered to be paid on account of costs has been paid by the three respondents, but only in order to satisfy a condition imposed on them upon their being granted leave to appeal to the Court of Appeal. Otherwise, apart from paying the childrens school fees, the husband has not complied with any part of Moylan Js order and shows no intention of doing so if he can possibly avoid it. The issues Subject to very limited exceptions, most of which are statutory, a company is a legal entity distinct from its shareholders. It has rights and liabilities of its own which are distinct from those of its shareholders. Its property is its own, and not that of its shareholders. In Salomon v A Salomon and Co Ltd [1897] AC 22, the House of Lords held that these principles applied as much to a company that was wholly owned and controlled by one man as to any other company. In Macaura v Northern Assurance Co Ltd [1925] AC 619, the House of Lords held that the sole owner and controller of a company did not even have an insurable interest in property of the company, although economically he was liable to suffer by its destruction. Lord Buckmaster, at pp 626 627 said: no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up. In Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 the House of Lords held that documents of a subsidiary were not in the power of its parent company for the purposes of disclosure in litigation, simply by virtue of the latters ownership and control of the group. These principles are the starting point for the elaborate restrictions imposed by English law on a wide range of transactions which have the direct or indirect effect of distributing capital to shareholders. The separate personality and property of a company is sometimes described as a fiction, and in a sense it is. But the fiction is the whole foundation of English company and insolvency law. As Robert Goff LJ once observed, in this domain we are concerned not with economics but with law. The distinction between the two is, in law, fundamental: Bank of Tokyo Ltd v Karoon (Note) [1987] AC 45, 64. He could justly have added that it is not just legally but economically fundamental, since limited companies have been the principal unit of commercial life for more than a century. Their separate personality and property are the basis on which third parties are entitled to deal with them and commonly do deal with them. Against this background, there are three possible legal bases on which the assets of the Petrodel companies might be available to satisfy the lump sum order against the husband: (1) It might be said that this is a case in which, exceptionally, a court is at liberty to disregard the corporate veil in order to give effective relief. (2) Section 24 of the Matrimonial Causes Act might be regarded as conferring a distinct power to disregard the corporate veil in matrimonial cases. (3) The companies might be regarded as holding the properties on trust for the husband, not by virtue of his status as their sole shareholder and controller, but in the particular circumstances of this case. The judges findings: the companies Most of the judges findings of fact were directed to two questions which are no longer in dispute, namely whether the husband owned the Petrodel Group and what was the value of his assets. For present purposes, it is enough to summarise those which bear on the position of the three corporate respondents. At the time of the marriage, and throughout the 1990, the husband was employed by a succession of major international oil trading companies as a trader, but in 2001 he left his last employer, Marc Rich, and began to run his own companies. Initially, there were two principal companies involved, Aurora and the Petrodel companies. In 2004 Aurora was wound up and thereafter he operated mainly through the Petrodel companies. The principal operating company of this group was PRL, a company incorporated in the Isle of Man. Its financial statements record that it was incorporated on 4 May 1993, was dormant until 1996, and did not begin operations until 25 April 2002, i.e. after the husband had left Marc Rich and set up on his own. Between 1996 and 2002, it is described in its financial statements as a property investment company. Its sole function in that period appears to have been to hold title to the matrimonial home at 16, Warwick Avenue in London and five residential investment properties in London, and to act as a channel for funding property purchases by other companies of the group. The husbands evidence was that the company had engaged in substantial agricultural and oil related business in the 1990s, in part in association with his then employer, Marc Rich. But this was inconsistent with the companys financial statements, and the judge rejected it. Mr Le Breton, a former business colleague of the husband, gave evidence at the hearing which the judge accepted as reliable. Mr Le Breton said that from about 2001 PRL was engaged in a limited way in oil trading and shipping, and from 2006 moved into oil exploration and production in Nigeria and West Africa. The latest disclosed accounts of PRL are draft accounts for 2008 and 2009. The judge declined to attach any significant weight to the financial data in the 2008 accounts, which he considered to have been manipulated. All the disclosed accounts are now very much out of date. For what they are worth, the accounts for both years show a substantial turnover and large balances. The husbands evidence was that PRL ceased trading in 2010, when it lost its major exploration contract. Given his evident determination to frustrate his wifes claims on him, it cannot be assumed that the assets of the company recorded in the disclosed accounts are still there. Management control of PRL has always been in the hands of the husband, ostensibly as chief executive under a contract of employment conferring on him complete discretion in the management of its business. The judge found that none of the companies had ever had any independent directors. The husband is a director of PRL Nigeria, but otherwise the directors are all nominal or professional directors, generally his relatives, who accept directions from him. The directors of PRL are Mr Murphy (the principal of its corporate secretary) and a lady in Nevis who appears to have been the couples cleaner there. The ownership of the respondent companies proved to be more difficult to establish. The husband did not admit to having any personal interest in the shares of any company of the group, and declined to say who the ultimate shareholders were. Substantially all of the issued shares of PRL are owned by PRL Nigeria. Almost all the shares of that company are owned by PRL Nevis, a company about which very little is known, but whose accounts show substantial balances, apparently derived from trading. The husbands evidence was that the shares of PRL Nevis were owned by its own subsidiary PRL Nigeria. The judge described this as puzzling but made no finding as to whether it was true. More recently, it has been suggested that PRL Nevis is owned by a family trust about which, however, nothing has been disclosed. In the end, it did not matter, because the judge cut through the complexities of the corporate structure by accepting the evidence of the wife and Mr Le Breton that the husband was the true owner of the Petrodel Group, as he had always told them he was, even if the exact means by which he held it remained obscure. That accounted for PRL, PRL Nigeria and PRL Nevis. It also accounted for Vermont, whose shares are held 49% by PRL and 51% by PRL Nigeria, and Upstream, which had a single issued share held by PRL Nevis. Vermont was and possibly still is a trading company. The husbands evidence was that it began to ship crude oil in 2010. The exact nature of Upstreams business (if any) is unclear. It does not appear to trade. The husband declined to answer the question whether he received any benefits from PRL other than his salary, saying that this was an accounting question. The judge, however, made extensive findings about this. He found that his personal expenditure substantially exceeded his salary and bonuses as chief executive, and that the difference was funded entirely by the company. There was no formality involved. The husband simply treated the companies cash balances and property as his own and drew on them as he saw fit. The judge found that the husband had unrestricted access to the companies assets, unconfined by any board control or by any scruples about the legality of his drawings. He used PRLs assets to fund his and his familys personal expenditure, including the substantial legal costs incurred in these proceedings. The group was effectively the husbands money box which he uses at will. Piercing the corporate veil I should first of all draw attention to the limited sense in which this issue arises at all. Piercing the corporate veil is an expression rather indiscriminately used to describe a number of different things. Properly speaking, it means disregarding the separate personality of the company. There is a range of situations in which the law attributes the acts or property of a company to those who control it, without disregarding its separate legal personality. The controller may be personally liable, generally in addition to the company, for something that he has done as its agent or as a joint actor. Property legally vested in a company may belong beneficially to the controller, if the arrangements in relation to the property are such as to make the company its controllers nominee or trustee for that purpose. For specific statutory purposes, a companys legal responsibility may be engaged by the acts or business of an associated company. Examples are the provisions of the Companies Acts governing group accounts or the rules governing infringements of competition law by firms, which may include groups of companies conducting the relevant business as an economic unit. Equitable remedies, such as an injunction or specific performance may be available to compel the controller whose personal legal responsibility is engaged to exercise his control in a particular way. But when we speak of piercing the corporate veil, we are not (or should not be) speaking of any of these situations, but only of those cases which are true exceptions to the rule in Salomon v A Salomon and Co Ltd [1897] AC 22, i.e. where a person who owns and controls a company is said in certain circumstances to be identified with it in law by virtue of that ownership and control. Most advanced legal systems recognise corporate legal personality while acknowledging some limits to its logical implications. In civil law jurisdictions, the juridical basis of the exceptions is generally the concept of abuse of rights, to which the International Court of Justice was referring in In re Barcelona Traction, Light and Power Co Ltd [1970] ICJ 3 when it derived from municipal law a limited principle permitting the piercing of the corporate veil in cases of misuse, fraud, malfeasance or evasion of legal obligations. These examples illustrate the breadth, at least as a matter of legal theory, of the concept of abuse of rights, which extends not just to the illegal and improper invocation of a right but to its use for some purpose collateral to that for which it exists. English law has no general doctrine of this kind. But it has a variety of specific principles which achieve the same result in some cases. One of these principles is that the law defines the incidents of most legal relationships between persons (natural or artificial) on the fundamental assumption that their dealings are honest. The same legal incidents will not necessarily apply if they are not. The principle was stated in its most absolute form by Denning LJ in a famous dictum in Lazarus Estates Ltd v Beasley [1956] 1 QB 702, 712: No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all transactions whatsoever The principle is mainly familiar in the context of contracts and other consensual arrangements, in which the effect of fraud is to vitiate consent so that the transaction becomes voidable ab initio. But it has been applied altogether more generally, in cases which can be rationalised only on grounds of public policy, for example to justify setting aside a public act such as a judgment, which is in no sense consensual, a jurisdiction which has existed since at least 1775: Duchess of Kingstons Case (1776) 2 Smith's LC, 13th ed, 644, 646, 651. Or to abrogate a right derived from a legal status, such as marriage: R v Secretary of State for the Home Department, Ex p Puttick [1981] QB 767. Or to disapply a statutory time bar which on the face of the statute applies: Welwyn Hatfield Borough Council v Secretary of State for Communities and Local Government [2011] 2 AC 304. These decisions (and there are others) illustrate a broader principle governing cases in which the benefit of some apparently absolute legal principle has been obtained by dishonesty. The authorities show that there are limited circumstances in which the law treats the use of a company as a means of evading the law as dishonest for this purpose. The question is heavily burdened by authority, much of it characterised by incautious dicta and inadequate reasoning. I propose, first, to examine those cases which seek to rationalise the case law in terms of general principle, and then to look at a number of cases in which the court has been thought, rightly or wrongly, to have pierced the corporate veil in order to identify the critical features of these cases which enabled them to do so. Almost all the modern analyses of the general principle have taken as their starting point the brief and obiter but influential statement of Lord Keith of Kinkel in Woolfson v Strathclyde Regional Council 1978 SC(HL) 90. This was an appeal from Scotland in which the House of Lords declined to allow the principal shareholder of a company to recover compensation for the compulsory purchase of a property which the company occupied. The case was decided on its facts, but at p 96, Lord Keith, delivering the leading speech, observed that it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere facade concealing the true facts. The first systematic analysis of the large and disparate body of English case law was undertaken by a strong Court of Appeal in Adams v Cape Industries plc [1990] Ch 433 (Slade, Mustill and Ralph Gibson LJJ). The question at issue in that case was whether the United Kingdom parent of an international mining group which was, at least arguably, managed as a single economic unit was present in the United States for the purpose of making a default judgment of a United States court enforceable against it in England. Among other arguments, it was suggested that it was present in the United States by virtue of the fact that a wholly owned subsidiary was incorporated and carried on business there. Slade LJ, delivering the judgment of the court, rejected this contention: pp 532 544. The court, adopting Lord Keiths dictum in Woolfson v Strathclyde, held that the corporate veil could be disregarded only in cases where it was being used for a deliberately dishonest purpose: pp 539, 540. Apart from that, and from cases turning on the wording of particular statutes, it held at p 536 that the court is not free to disregard the principle of Salomon v A Salomon & Co Ltd [1897] AC 22 merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities. In Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177, Sir Andrew Morritt V C reviewed many of the same authorities. Mr Smallbone, the former managing director of Trustor, had improperly procured large amounts of its money to be paid out of its account to a company called Introcom Ltd, incorporated in Gibraltar. Introcom was owned and controlled by a Liechtenstein trust of which Mr Smallbone was a beneficiary. Its directors acted on his instructions. At an earlier stage of the litigation, Trustor had obtained summary judgment on some of its claims against Introcom, on the footing that the payments were unauthorised and a breach of Mr Smallbones duty as managing director, that the company was simply a vehicle Mr Smallbone used for receiving money from Trustor, and that his knowledge could be imputed to the company. The Vice Chancellor was dealing with a subsequent application by Trustor for summary judgment against Mr Smallbone himself. It was accepted that there was an arguable defence to the claims against him for damages or compensation for breach of his duties as a director of Trustor. Accordingly the sole basis of the application was that he was liable to account as a constructive trustee on the footing of knowing receipt. This depended on the proposition that he was to be identified with Introcom and so treated as having received the money himself. It was submitted that the authorities justified piercing the corporate veil in three, possibly overlapping, cases: (i) where the company was a facade or sham; (ii) where the company was involved in some form of impropriety; and (iii) where it was necessary to do so in the interests of justice. In each of these cases, the right of the court to pierce the corporate veil was said to be subject to there being no third party interests engaged, such as unconnected minority shareholders or creditors. The Vice Chancellor concluded that the authorities supported the submission in case (i), and also in case (ii) provided that the impropriety was a relevant one, i.e. linked to the use of the company structure to avoid or conceal liability for that impropriety. He followed Adams v Cape Industries in rejecting the submission as applied to case (iii). In summary, the court was entitled to pierce the corporate veil and recognise the receipt of the company as that of the individual(s) in control of it if the company was used as a device or facade to conceal the true facts, thereby avoiding or concealing any liability of those individual(s): see para 23. For years after it was decided, Cape Industries was regarded as having settled the general law on the subject. But for much of this period, the Family Division pursued an independent line, essentially for reasons of policy arising from its concern to make effective its statutory jurisdiction to distribute the property of the marriage upon a divorce. In Nicholas v Nicholas [1984] FLR 285, the Court of Appeal (Cumming Bruce and Dillon LJJ) overturned the decision of the judge to order the husband to procure the transfer to the wife of a property belonging to a company in which he held a 71% shareholding, the other 29% being held by his business associates. However, both members of the court suggested, obiter, that the result might have been different had it not been for the position of the minority shareholders. Cumming Bruce LJ (at p 287) thought that, in that situation, the court does and will pierce the corporate veil and make an order which has the same effect as an order that would be made if the property was vested in the majority shareholder. Dillon LJ said (at p 292) that if the company was a one man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property. These dicta were subsequently applied by judges of the Family Division dealing with claims for ancillary financial relief, who regularly made orders awarding to parties to the marriage assets vested in companies of which one of them was the sole shareholder. Connell J made such an order in Green v Green [1993] 1 FLR 326. In Mubarak v Mubarak [2001] 1 FLR 673, 682C, Bodey J held that for the purpose of claims to ancillary financial relief the Family Division would lift the corporate veil not only where the company was a sham but when it is just and necessary, the very proposition that the Court of Appeal had rejected as a statement of the general law in Adams v Cape Industries. And in Kremen v Agrest (No 2) [2011] 2 FLR 490, para 46, Mostyn J held that there was a strong practical reason why the cloak should be penetrable even absent a finding of wrongdoing. There were of course dissenting voices, even in decisions on ancillary relief. Much the most significant of them for present purposes was that of Munby J. In A v A [2007] 2 FLR 467, paras 18 19, he drew attention to the robust approach which had always been adopted by judges of the Family Division in seeing through sham arrangements designed to hide the ownership of assets of the marriage by vesting them in relatives or companies which were in reality holding them as their nominees. But he warned against departing from fundamental legal principle. At para 21, he observed: In this sense, and to this limited extent, the typical case in the Family Division may differ from the typical case in (say) the Chancery Division. But what it is important to appreciate (and too often, I fear, is not appreciated at least in this division) is that the relevant legal principles which have to be applied are precisely the same in this division as in the other two divisions. There is not one law of sham in the Chancery Division and another law of sham in the Family Division. There is only one law of sham, to be applied equally in all three Divisions of the High Court, just as there is but one set of principles, again equally applicable in all three divisions, determining whether or not it is appropriate to pierce the corporate veil. In Ben Hashem v Al Shayif [2009] 1 FLR 115, another decision of Munby J, the difference between the approach taken in the Family Division and in other divisions of the High Court arose in a particularly acute form, because he was hearing the claim for ancillary relief in conjunction with proceedings in the Chancery Division. In the Family Division, the wife was seeking an order transferring to her a property which she was occupying but which was owned by a company controlled by the husband, while in the Chancery proceedings the company was seeking a possession order in respect of the same property. After reminding himself of what he had said in A v A and conducting a careful review of both family and non family cases, Munby J formulated six principles at paras 159 164 which he considered could be derived from them: (i) ownership and control of a company were not enough to justify piercing the corporate veil; (ii) the court cannot pierce the corporate veil, even in the absence of third party interests in the company, merely because it is thought to be necessary in the interests of justice; (iii) the corporate veil can be pierced only if there is some impropriety; (iv) the impropriety in question must, as Sir Andrew Morritt had said in Trustor, be linked to the use of the company structure to avoid or conceal liability; (v) to justify piercing the corporate veil, there must be both control of the company by the wrongdoer(s) and impropriety, that is (mis)use of the company by them as a device or facade to conceal their wrongdoing; and (vi) the company may be a facade even though it was not originally incorporated with any deceptive intent, provided that it is being used for the purpose of deception at the time of the relevant transactions. The court would, however, pierce the corporate veil only so far as it was necessary in order to provide a remedy for the particular wrong which those controlling the company had done. In VTB Capital plc v Nutritek International Corpn [2012] 2 Lloyds Rep 313, VTB Capital sought permission to serve proceedings out of the jurisdiction on the footing that the borrower under a facility agreement was to be identified with the persons who controlled it, so as to make the latter in law parties to the same agreement. The attempt failed in the Court of Appeal because the court was not satisfied that that would be the consequence of piercing the corporate veil even if it were legitimate to do so: see paras 90 91. The decision is not, therefore, direct authority on the question whether the court was entitled to pierce the corporate veil. But the court considered all the principal authorities on that question and arrived at substantially the same conclusions as Sir Andrew Morritt V C and Munby J. Munby Js statement of principle was adopted by the Court of Appeal subject to two qualifications. First, they said that it was not necessary in order to pierce the corporate veil that there should be no other remedy available against the wrongdoer, and so far as Munby J suggested that it was, he had set the bar too high. Secondly, they said that it was not enough to show that there had been wrongdoing. The relevant wrongdoing must be in the nature of an independent wrong that involves the fraudulent or dishonest misuse of the corporate personality of the company for the purpose of concealing the true facts: see paras 79 80. On this point, the case took the same course in the Supreme Court [2013] UKSC 5; [2013] 2 WLR 398, which dismissed VTB Capitals appeal. So far as piercing the corporate veil is concerned, the courts reasons were given by Lord Neuberger. He noted the broad consensus among judges and text book writers that there were circumstances in which separate legal personality of a company might be disregarded and the company identified with those who owned and controlled it. However, he declined to decide whether the consensus was right on an appeal from an interlocutory decision, given that, like the Court of Appeal, he considered that even if the veil were pierced the result would not be to make a companys controllers party to its contracts with third parties. But he adopted, as it seems to me, both the general reasoning of the Court of Appeal and the view of Munby J that any doctrine permitting the court to pierce the corporate veil must be limited to cases where there was a relevant impropriety: see paras 128, 145. In my view, the principle that the court may be justified in piercing the corporate veil if a companys separate legal personality is being abused for the purpose of some relevant wrongdoing is well established in the authorities. It is true that most of the statements of principle in the authorities are obiter, because the corporate veil was not pierced. It is also true that most cases in which the corporate veil was pierced could have been decided on other grounds. But the consensus that there are circumstances in which the court may pierce the corporate veil is impressive. I would not for my part be willing to explain that consensus out of existence. This is because I think that the recognition of a limited power to pierce the corporate veil in carefully defined circumstances is necessary if the law is not to be disarmed in the face of abuse. I also think that provided the limits are recognised and respected, it is consistent with the general approach of English law to the problems raised by the use of legal concepts to defeat mandatory rules of law. The difficulty is to identify what is a relevant wrongdoing. References to a facade or sham beg too many questions to provide a satisfactory answer. It seems to me that two distinct principles lie behind these protean terms, and that much confusion has been caused by failing to distinguish between them. They can conveniently be called the concealment principle and the evasion principle. The concealment principle is legally banal and does not involve piercing the corporate veil at all. It is that the interposition of a company or perhaps several companies so as to conceal the identity of the real actors will not deter the courts from identifying them, assuming that their identity is legally relevant. In these cases the court is not disregarding the facade, but only looking behind it to discover the facts which the corporate structure is concealing. The evasion principle is different. It is that the court may disregard the corporate veil if there is a legal right against the person in control of it which exists independently of the companys involvement, and a company is interposed so that the separate legal personality of the company will defeat the right or frustrate its enforcement. Many cases will fall into both categories, but in some circumstances the difference between them may be critical. This may be illustrated by reference to those cases in which the court has been thought, rightly or wrongly, to have pierced the corporate veil. The first and most famous of them is Gilford Motor Co Ltd v Horne [1933] Ch 935. Mr EB Horne had been the managing director of the Gilford Motor Co. His contract of employment precluded him being engaged in any competing business in a specified geographical area for five years after the end of his employment either solely or jointly with or as agent for any other person, firm or company. He left Gilford and carried on a competing business in the specified area, initially in his own name. He then formed a company, JM Horne & Co Ltd, named after his wife, in which she and a business associate were shareholders. The trial judge, Farwell J, found that the company had been set up in this way to enable the business to be carried on under his own control but without incurring liability for breach of the covenant. However the reality, in his view, was that the company was being used as the channel through which the defendant Horne was carrying on his business. In fact, he dismissed the claim on the ground that the restrictive covenant was void. But the Court of Appeal allowed the appeal on that point and granted an injunction against both Mr Horne and the company. As against Mr Horne, the injunction was granted on the concealment principle. Lord Hanworth MR said, at pp 961 962, that the company was a mere cloak or sham because the business was really being carried on by Mr Horne. Because the restrictive covenant prevented Mr Horne from competing with his former employers whether as principal or as agent for another, it did not matter whether the business belonged to him or to JM Horne & Co Ltd provided that he was carrying it on. The only relevance of the interposition of the company was to maintain the pretence that it was being carried on by others. Lord Hanworth did not explain why the injunction should issue against the company, but I think it is clear from the judgments of Lawrence and Romer LJJ, at pp 965 and 969, that they were applying the evasion principle. Lawrence LJ, who gave the fullest consideration to the point, based his view entirely on Mr Hornes evasive motive for forming the company. This showed that it was a mere channel used by the defendant Horne for the purpose of enabling him, for his own benefit, to obtain the advantage of the customers of the plaintiff company, and that therefore the defendant company ought to be restrained as well as the defendant Horne. In other words, the company was restrained in order to ensure that Horne was deprived of the benefit which he might otherwise have derived from the separate legal personality of the company. I agree with the view expressed by the Court of Appeal in VTB Capital, at para 63, that this is properly to be regarded as a decision to pierce the corporate veil. It is fair to say that the point may have been conceded by counsel, although in rather guarded terms (if the evidence admitted of the conclusion that what was being done was a mere cloak or sham). It is also true that the court in Gilford Motor Co might have justified the injunction against the company on the ground that Mr Hornes knowledge was to be imputed to the company so as to make the latters conduct unconscionable or tortious, thereby justifying the grant of an equitable remedy against it. But the case is authority for what it decided, not for what it might have decided, and in my view the principle which the Court of Appeal applied was correct. It does not follow that JM Horne & Co Ltd was to be identified with Mr Horne for any other purpose. Mr Hornes personal creditors would not, for example, have been entitled simply by virtue of the facts found by Farwell J, to enforce their claims against the assets of the company. Jones v Lipman [1962] 1 WLR 832 was a case of very much the same kind. The facts were that Mr Lipman sold a property to the plaintiffs for 5,250 and then, thinking better of the deal, sold it to a company called Alamed Ltd for 3,000, in order to make it impossible for the plaintiffs to get specific performance. The judge, Russell J, found that company was wholly owned and controlled by Mr Lipman, who had bought it off the shelf and had procured the property to be conveyed to it solely for the purpose of defeating the plaintiffs rights to specific performance. About half of the purchase price payable by Alamed was funded by borrowing from a bank, and the rest was left outstanding. The judge decreed specific performance against both Mr Lipman and Alamed Ltd. As against Mr Lipman this was done on the concealment principle. Because Mr Lipman owned and controlled Alamed Ltd, he was in a position specifically to perform his obligation to the plaintiffs by exercising his powers over the company. This did not involve piercing the corporate veil, but only identifying Mr Lipman as the man in control of the company. The company, said Russell J portentously at p 836, was a device and a sham, a mask which [Mr Lipman] holds before his face in an attempt to avoid recognition by the eye of equity. On the other hand, as against Alamed Ltd itself, the decision was justified on the evasion principle, by reference to the Court of Appeals decision in Gilford Motor Co. The judge must have thought that in the circumstances the company should be treated as having the same obligation to convey the property to the plaintiff as Mr Lipman had, even though it was not party to the contract of sale. It should be noted that he decreed specific performance against the company notwithstanding that as a result of the transaction, the companys main creditor, namely the bank, was prejudiced by its loss of what appears from the report to have been its sole asset apart from a possible personal claim against Mr Lipman which he may or may not have been in a position to meet. This may be thought hard on the bank, but it is no harder than a finding that the company was not the beneficial owner at all. The bank could have protected itself by taking a charge or registering the contract of sale. In Gencor ACP Ltd v Dalby [2000] 2 BCLC 734, the plaintiff made a large number of claims against a former director, Mr Dalby, for misappropriating its funds. For present purposes the claim which matters is a claim for an account of a secret profit which Mr Dalby procured to be paid by a third party, Balfour Beatty, to a BVI company under his control called Burnstead. Rimer J held, at para 26, that Mr Dalby was accountable for the money received by Burnstead, on the ground that the latter was in substance little other than Mr Dalbys offshore bank account held in a nominee name, and simply. the alter ego through which Mr Dalby enjoyed the profit which he earned in breach of his fiduciary duty to ACP. Rimer J ordered an account against both Mr Dalby and Burnstead. He considered that he was piercing the corporate veil. But I do not think that he was. His findings about Mr Dalbys relationship with the company and his analysis of the legal consequences show that both Mr Dalby and Burnstead were independently liable to account to ACP, even on the footing that they were distinct legal persons. If, as the judge held, Burnstead was Mr Dalbys nominee for the purpose of receiving and holding the secret profit, it followed that Burnstead had no right to the money as against Mr Dalby, who had in law received it through Burnstead and could properly be required to account for it to ACP. Burnstead itself was liable to account to ACP because, as the judge went on to point out, Mr Dalbys knowledge of the prior equitable interest of ACP was to be imputed to it. As Rimer J observed, the introduction into the story of such a creature company is. insufficient to prevent equitys eye from identifying it with Mr Dalby. This is in reality the concealment principle. The correct analysis of the situation was that the court refused to be deterred by the legal personality of the company from finding the true facts about its legal relationship with Mr Dalby. It held that the nature of their dealings gave rise to ordinary equitable claims against both. The result would have been exactly the same if Burnstead, instead of being a company, had been a natural person, say Mr Dalbys uncle, about whose separate existence there could be no doubt. The same confusion of concepts is, with respect, apparent in Sir Andrew Morritt V Cs analysis in Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177, which I have already considered. The Vice Chancellors statement of principle at para 23 that the court was entitled to pierce the corporate veil if the company was used as a device or facade to conceal the true facts thereby avoiding or concealing any liability of those individual(s) elides the quite different concepts of concealment and avoidance. As I read his reasons for giving judgment against Mr Smallbone, at paras 24 25, he did so on the concealment principle. It had been found at the earlier stage of the litigation that Introcom was simply a vehicle Mr Smallbone used for receiving money from Trustor, and that the company was a device or facade for concealing that fact. On that footing, the company received the money on Mr Smallbones behalf. This conclusion did not involve piercing the corporate veil, and did not depend on any finding of impropriety. It was simply an application of the principle summarised by the Vice Chancellor at para 19 of his judgment, that receipt by a company will count as receipt by the shareholder if the company received it as his agent or nominee, but not if it received it in its own right. To decide that question, it was necessary to establish the facts which demonstrated the true legal relationship between Mr Smallbone and Introcom. Mr Smallbones ownership and control of Introcom was only one of those facts, not in itself conclusive. Other factors included the circumstances and the source of the receipt, and the nature of the companys other transactions if any. In Trustor, as in Gencor, the analysis would have been the same if Introcom had been a natural person instead of a company. The evasion principle was not engaged, and indeed could not have been engaged on the facts of either case. This is because neither Mr Dalby nor Mr Smallbone had used the companys separate legal personality to evade a liability that they would otherwise have had. They were liable to account only if the true facts were that the company had received the money as their agent or nominee. That was proved in both cases. If it had not been, there would have been no receipt, knowing or otherwise, and therefore no claim to be evaded. The situation was not the same as it had been in Gilford Motor Co v Horne and Jones v Lipman, for in these cases the real actors, Mr Horne and Mr Lipman, had a liability which arose independently of the involvement of the company. These considerations reflect the broader principle that the corporate veil may be pierced only to prevent the abuse of corporate legal personality. It may be an abuse of the separate legal personality of a company to use it to evade the law or to frustrate its enforcement. It is not an abuse to cause a legal liability to be incurred by the company in the first place. It is not an abuse to rely upon the fact (if it is a fact) that a liability is not the controllers because it is the companys. On the contrary, that is what incorporation is all about. Thus in a case like VTB Capital, where the argument was that the corporate veil should be pierced so as to make the controllers of a company jointly and severally liable on the companys contract, the fundamental objection to the argument was that the principle was being invoked so as to create a new liability that would not otherwise exist. The objection to that argument is obvious in the case of a consensual liability under a contract, where the ostensible contracting parties never intended that any one else should be party to it. But the objection would have been just as strong if the liability in question had not been consensual. I conclude that there is a limited principle of English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the companys separate legal personality. The principle is properly described as a limited one, because in almost every case where the test is satisfied, the facts will in practice disclose a legal relationship between the company and its controller which will make it unnecessary to pierce the corporate veil. Like Munby J in Ben Hashem, I consider that if it is not necessary to pierce the corporate veil, it is not appropriate to do so, because on that footing there is no public policy imperative which justifies that course. I therefore disagree with the Court of Appeal in VTB Capital who suggested otherwise at para 79. For all of these reasons, the principle has been recognised far more often than it has been applied. But the recognition of a small residual category of cases where the abuse of the corporate veil to evade or frustrate the law can be addressed only by disregarding the legal personality of the company is, I believe, consistent with authority and with long standing principles of legal policy. In the present case, Moylan J held that he could not pierce the corporate veil under the general law without some relevant impropriety, and declined to find that there was any. In my view he was right about this. The husband has acted improperly in many ways. In the first place, he has misapplied the assets of his companies for his own benefit, but in doing that he was neither concealing nor evading any legal obligation owed to his wife. Nor, more generally, was he concealing or evading the law relating to the distribution of assets of a marriage upon its dissolution. It cannot follow that the court should disregard the legal personality of the companies with the same insouciance as he did. Secondly, the husband has made use of the opacity of the Petrodel Groups corporate structure to deny being its owner. But that, as the judge pointed out at para 219 is simply [the] husband giving false evidence. It may engage what I have called the concealment principle, but that simply means that the court must ascertain the truth that he has concealed, as it has done. The problem in the present case is that the legal interest in the properties is vested in the companies and not in the husband. They were vested in the companies long before the marriage broke up. Whatever the husbands reasons for organising things in that way, there is no evidence that he was seeking to avoid any obligation which is relevant in these proceedings. The judge found that his purpose was wealth protection and the avoidance of tax. It follows that the piercing of the corporate veil cannot be justified in this case by reference to any general principle of law. Section 24(1)(a) of the Matrimonial Causes Act 1973 If there is no justification as a matter of general legal principle for piercing the corporate veil, I find it impossible to say that a special and wider principle applies in matrimonial proceedings by virtue of section 24(1)(a) of the Matrimonial Causes Act 1973. The language of this provision is clear. It empowers the court to order one party to the marriage to transfer to the other property to which the first mentioned party is entitled, either in possession or reversion. An entitlement is a legal right in respect of the property in question. The words in possession or reversion show that the right in question is a proprietary right, legal or equitable. This section is invoking concepts with an established legal meaning and recognised legal incidents under the general law. Courts exercising family jurisdiction do not occupy a desert island in which general legal concepts are suspended or mean something different. If a right of property exists, it exists in every division of the High Court and in every jurisdiction of the county courts. If it does not exist, it does not exist anywhere. It is right to add that even where courts exercising family jurisdiction have claimed a wider jurisdiction to pierce the corporate veil than would be recognised under the general law, they have not usually suggested that this can be founded on section 24 of the Matrimonial Causes Act. On the contrary, in Nicholas v Nicholas [1984] FLR 285, 288, Cumming Bruce LJ said that it could not. This analysis is not affected by section 25(2)(a) of the Matrimonial Causes Act 1973. Section 25(2)(a) requires the court when exercising the powers under section 24, to have regard to the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future. The breadth and inclusiveness of this definition of the relevant resources of the parties to the marriage means that the relevant spouses ownership and control of a company and practical ability to extract money or moneys worth from it are unquestionably relevant to the courts assessment of what his resources really are. That may affect the amount of any lump sum or periodical payment orders, or the decision what transfers to order of other property which unquestionably belongs to the relevant spouse. But it does not follow from the fact that one spouses worth may be boosted by his access to the companys assets that those assets are specifically transferrable to the other under section 24(1)(a). Moylan J considered that it was enough to justify his order to transfer the properties that the husband should have the practical ability to procure their transfer, whether or not he was their beneficial owner. He found that this was established in the present case because of the power which the husband had over the companies by virtue of owning and controlling them. The judge did not make any finding about whether the properties of the corporate respondents were held in trust for the husband, except in the case of the matrimonial home in Warwick Avenue, which he found to be beneficially his. What he held was that the assets of the companies were effectively the husbands property, because he treated them as such. He was able to procure their disposal as he may direct, based again on his being the controller of the companies and the only beneficial owner. The judge accepted that as a matter of company law, the husband as shareholder had no more than a right of participation in accordance with the companys constitution, and that that did not confer any right to any particular property of the company. But, what if the shareholder is, in fact, able to procure the transfer to them of a particular item of company property, such as a matrimonial home, the judge asked, as a result of their control and ownership of the company and the absence of any third party interests. The judges answer to that question was that the purpose and intention of the Matrimonial Causes Act 1973 was that the companies assets should be treated as part of the marital wealth. Effectively, he said, the husband, in respect of the companies and their assets, is in the same position he would be in if he was the beneficiary of a bare trust or the companies were his nominees. I do not accept this, any more than the Court of Appeal did. The judge was entitled to take account of the husbands ownership and control of the companies and his unrestricted access to the companies assets in assessing what his resources were for the purpose of section 25(2)(a). But he was not entitled to order the companies assets to be transferred to the wife in satisfaction of the lump sum order simply by virtue of section 24(1)(a). I do not doubt that the construction of section 24(1)(a) of the Act is informed by its purpose and its social context, as well as by its language. Nor do I doubt that the object is to achieve a proper division of the assets of the marriage. But it does not follow that the courts will stop at nothing in their pursuit of that end, and there are a number of principled reasons for declining to give the section the effect that the judge gave it. In the first place, it is axiomatic that general words in a statute are not to be read in a way which would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness. The words are those of Lord Atkin in Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014, 1031 1032, but the principle is very familiar and has been restated by the courts in many contexts and at every level. There is nothing in the Matrimonial Causes Act and nothing in its purpose or broader social context to indicate that the legislature intended to authorise the transfer by one party to the marriage to the other of property which was not his to transfer. Secondly, a transfer of this kind will ordinarily be unnecessary for the purpose of achieving a fair distribution of the assets of the marriage. Where assets belong to a company owned by one party to the marriage, the proper claims of the other can ordinarily be satisfied by directing the transfer of the shares. It is true that this will not always be possible, particularly in cases like this one where the shareholder and the company are both resident abroad in places which may not give direct effect to the orders of the English court. In an age of internationally mobile spouses and assets this is a more significant problem than it once was, but such cases remain the exception rather than the rule. Section 24 cannot be construed as if it were directed to that problem. Third, so far as a party to matrimonial proceedings deliberately attempts to frustrate the exercise of the courts ancillary powers by disposing of assets, section 37 provides for the setting aside of those dispositions in certain circumstances. Section 37 is a limited provision which is very far from being a complete answer to the problem, but it is as far as the legislature has been prepared to go. The recognition of a jurisdiction such as the judge sought to exercise in this case would cut across the statutory schemes of company and insolvency law. These include elaborate provisions regulating the repayment of capital to shareholders and other forms of reduction of capital, and for the recovery in an insolvency of improper dispositions of the companys assets. These schemes are essential for the protection of those dealing with a company, particularly where it is a trading company like PRL and Vermont. The effect of the judges order in this case was to make the wife a secured creditor. It is no answer to say, as occasionally has been said in cases about ancillary financial relief, that the court will allow for known creditors. The truth is that in the case of a trading company incurring and discharging large liabilities in the ordinary course of business, a court of family jurisdiction is not in a position to conduct the kind of notional liquidation attended by detailed internal investigation and wide publicity which would be necessary to establish what its liabilities are. In the present case, the difficulty is aggravated by the fact that the last financial statements, which are not obviously unreliable, are more than five years old. To some extent that is the fault of the husband and his companies, but that is unlikely to be much comfort to unsatisfied creditors with no knowledge of the state of the shareholders marriage or the proceedings in the Family Division. It is clear from the judges findings of fact that this particular husband made free with the companys assets as if they were his own. That was within his power, in the sense that there was no one to stop him. But, as the judge observed, he never stopped to think whether he had any right to act in this way, and in law, he had none. The sole shareholder or the whole body of shareholders may approve a foolish or negligent decision in the ordinary course of business, at least where the company is solvent: Multinational Gas & Petrochemical Co v Multinational Gas & Petrochemical Services Ltd [1983] Ch 258. But not even they can validly consent to their own appropriation of the companys assets for purposes which are not the companys: Belmont Finance Corpn Ltd v Williams Furniture Ltd [1979] Ch 250, 261 (Buckley LJ), Attorney Generals Reference (No 2 of 1982) [1984] QB 624, Director of Public Prosecutions v Gomez [1993] AC 442, 496 497 (Lord Browne Wilkinson). Mr Prest is of course not the first person to ignore the separate personality of his company and pillage its assets, and he will certainly not be the last. But for the court to deploy its authority to authorise the appropriation of the companys assets to satisfy a personal liability of its shareholder to his wife, in circumstances where the company has not only not consented to that course but vigorously opposed it, would, as it seems to me, be an even more remarkable break with principle. It may be said, as the judge in effect did say, that the way in which the affairs of this company were conducted meant that the corporate veil had no reality. The problem about this is that if, as the judge thought, the property of a company is property to which its sole shareholder is entitled, either in possession or reversion, then that will be so even in a case where the sole shareholder scrupulously respects the separate personality of the company and the requirements of the Companies Acts, and even in a case where none of the exceptional circumstances that may justify piercing the corporate veil applies. This is a proposition which can be justified only by asserting that the corporate veil does not matter where the husband is in sole control of the company. But that is plainly not the law. Beneficial ownership of the properties It follows from the above analysis that the only basis on which the companies can be ordered to convey the seven disputed properties to the wife is that they belong beneficially to the husband, by virtue of the particular circumstances in which the properties came to be vested in them. Only then will they constitute property to which the husband is entitled, either in possession or reversion. This is the issue which the judge felt that he did not need to decide. But on the footing that he was wrong about the ambit of section 24(1)(a), it does need to be decided now. The issue requires an examination of evidence which is incomplete and in critical respects obscure. A good deal therefore depends upon what presumptions may properly be made against the husband given that the defective character of the material is almost entirely due to his persistent obstruction and mendacity. In British Railways Board v Herrington [1972] AC 877, 930 931, Lord Diplock, dealing with the liability of a railway undertaking for injury suffered by trespassers on the line, said: The appellants, who are a public corporation, elected to call no witnesses, thus depriving the court of any positive evidence as to whether the condition of the fence and the adjacent terrain had been noticed by any particular servant of theirs or as to what he or any other of their servants either thought or did about it. This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold. A court may take judicial notice that railway lines are regularly patrolled by linesmen and Bangers. In the absence of evidence to the contrary, it is entitled to infer that one or more of them in the course of several weeks noticed what was plain for all to see. Anyone of common sense would realise the danger that the state of the fence so close to the live rail created for little children coming to the meadow to play. As the appellants elected to call none of the persons who patrolled the line there is nothing to rebut the inference that they did not lack the common sense to realise the danger. A court is accordingly entitled to infer from the inaction of the appellants that one or more of their employees decided to allow the risk to continue of some child crossing the boundary and being injured or killed by the live rail rather than to incur the trivial trouble and expense of repairing the gap in the fence. The courts have tended to recoil from some of the fiercer parts of this statement, which appear to convert open ended speculation into findings of fact. There must be a reasonable basis for some hypothesis in the evidence or the inherent probabilities, before a court can draw useful inferences from a partys failure to rebut it. For my part I would adopt, with a modification which I shall come to, the more balanced view expressed by Lord Lowry with the support of the rest of the committee in R v Inland Revenue Commissioners, Ex p TC Coombs & Co [1991] 2 AC 283, 300: In our legal system generally, the silence of one party in face of the other partys evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a prima facie case may become a strong or even an overwhelming case. But, if the silent party's failure to give evidence (or to give the necessary evidence) can be credibly explained, even if not entirely justified, the effect of his silence in favour of the other party may be either reduced or nullified. Cf. Wisniewski v Central Manchester Health Authority [1998] PIQR 324, 340. The modification to which I have referred concerns the drawing of adverse inferences in claims for ancillary financial relief in matrimonial proceedings, which have some important distinctive features. There is a public interest in the proper maintenance of the wife by her former husband, especially (but not only) where the interests of the children are engaged. Partly for that reason, the proceedings although in form adversarial have a substantial inquisitorial element. The family finances will commonly have been the responsibility of the husband, so that although technically a claimant, the wife is in reality dependent on the disclosure and evidence of the husband to ascertain the extent of her proper claim. The concept of the burden of proof, which has always been one of the main factors inhibiting the drawing of adverse inferences from the absence of evidence or disclosure, cannot be applied in the same way to proceedings of this kind as it is in ordinary civil litigation. These considerations are not a licence to engage in pure speculation. But judges exercising family jurisdiction are entitled to draw on their experience and to take notice of the inherent probabilities when deciding what an uncommunicative husband is likely to be concealing. I refer to the husband because the husband is usually the economically dominant party, but of course the same applies to the economically dominant spouse whoever it is. The facts, so far as the judge was able to make findings about them, are that the London properties were acquired as follows: December 1995 Flat 4, 27 Abbey Road was transferred to PRL by the husband for 1. It had been bought by him in 1991, before the marriage and before the incorporation of PRL. There are two charges on the property, in favour of Ahli United Bank and BNP Paribas, apparently to secure loans made to PRL. Neither the husband nor PRL has complied with orders to disclose the loan agreement and related documents. March 1996 1998 August 2000 May 2001 Flat 5, 27 Abbey Road was transferred to PRL on the same day, also for 1, by the husbands younger brother Michel. It had been bought in March of that year for 48,650 in Michels name. The wifes evidence was that, at the time, Michel was a student in London with no substantial assets of his own who was being supported by her husband. She said that her husband had led her to believe that he had paid for it. Flat 2, 143 Ashmore Road, is a leasehold property transferred to PRL for 1 by the wife. It had originally been bought by the husband in November 1992 in the name of someone called Jimmy Lawrence. There is no information about Jimmy Lawrence or the reasons for his involvement. According to the husbands evidence, the purchase money came from PRL, but since PRL was not incorporated until six months after that, this cannot be correct. At some stage, it is unclear when or how, the lease was transferred into the name of the wife, and she must have signed the transfer when it was conveyed to PRL, but she had no recollection of being involved or of ever having owned it. The wife transferred her interest in the freehold of 143 Ashmore Street to PRL. The freehold had originally been bought in 1996 in the name of the wife and one Esta Blechman, who was the leasehold owner of another flat in the building. There is no information about the consideration paid either in 1996 or in 1998. The husbands evidence was the funds to buy the wifes interest in 1996 came from PRL. Flat 6, 62 64 Beethoven Street was transferred to PRL by the husband for 85,000. He had originally bought it in 1988 (before the marriage) for 70,500. The property is charged to secure the loans made by Ahli United Bank and BNP Paribas. The matrimonial home, 16 Warwick Avenue, was bought in the name of PRL for 1.4 million July 2001 January 2004 that and subsequently refurbished at a cost of about 1 million. The judge rejected the husbands the purchase price and evidence refurbishment costs were funded by PRL, because at that stage the company had not commenced trading operations. He found that they were funded from bonuses earned by the husband, presumably, at this stage, from his last employer before he set up on his own. The judge found that PRL had always held this property on trust for the husband and that conclusion is not challenged on this appeal. The property is charged to secure the loans made by Ahli United Bank and BNP Paribas. In accordance with the judges order PRL has now conveyed it to the wife, but subject to the charges. Flat 310, Pavilion Apartments was bought in the name of Vermont for 635,000. The judge found that the money was derived from PRL. 11, South Lodge, Circus Road, was bought in the name of Vermont for 700,000. The judge found that the purchase price was also derived from PRL. The property is charged to secure the loans made to Ahli United Bank and BNP Paribas. The judge recorded the wifes evidence that the husband had once advised her that if anything were to happen to him, she should sell all the properties, move to Nevis and use the proceeds of sale to meet her living expenses there. The starting point is that in her points of claim the wife expressly alleged, among other things, that the husband used the corporate defendants to hold legal title to properties that belonged beneficially to him. All seven of the properties in dispute on this appeal were identified in her pleading as having been held for him in this way. In her section 25 statement, she gives evidence of her belief that he was their beneficial owner, supported in some cases by admittedly inconclusive reasons for that belief. Neither the husband nor the companies have complied with orders for the production of the completion statements on the purchase of the properties and evidence of the source of the money used to pay the purchase price. The companies were joined to these proceedings only because they were alleged to be trustees for the husband of the shareholdings and the properties and because orders were being sought for their transfer to the wife. Yet the companies failed to file a defence, or to comply with orders for disclosure. One of the few things that is clear from Mr Murphys affidavit was that the companies refusal to co operate was deliberate, notwithstanding that they were conscious that the London properties (unlike the other assets) were within the jurisdiction of the court, which was in a position directly to enforce any order that it might make in respect of them. The only explanation proffered for their contumacy was that the information was confidential to the companies shareholders or commercial partners. It is difficult to imagine that any commercial partners could enjoy rights of confidence over information concerning residential investment properties in London, and on the judges findings the only shareholder was the husband himself. The only directly relevant evidence given by Mr Murphy in his affidavit is a bald assertion that the companies are the sole beneficial owners of the shareholdings and the properties, but he declined to appear for cross examination on it. The judge rejected his explanation that his health was not up to it. The judges findings about the ownership and control of the companies mean that the companies refusal to co operate with these proceedings is a course ultimately adopted on the direction of the husband. It is a fair inference from all these facts, taken cumulatively, that the main, if not the only, reason for the companies failure to co operate is to protect the London properties. That in turn suggests that proper disclosure of the facts would reveal them to have been held beneficially by the husband, as the wife has alleged. Turning to what is known about the acquisition of the disputed properties, PRL acquired the legal interest in six London properties (including the matrimonial home) between 1995 and 2001. All of these properties were acquired by PRL before it began commercial operations and began to generate funds of its own. This was the main basis on which the judge found that the matrimonial home was held on trust for the husband from its acquisition in 2001. Since, as the judge found, no rent was paid to PRL for the familys occupation of the matrimonial home, this is a particularly clear case of the husband using PRL as a vehicle to hold legal title on trust for himself. Of the other five properties owned by PRL, the first category comprises the three properties (Flats 4 and 5, 27 Abbey Road, and Flat 2, 143 Ashmore Road) acquired by the company in December 1995 and March 1996, in each case for a nominal consideration of 1. Since no explanation has been forthcoming for the gratuitous transfer of these properties to PRL, there is nothing to rebut the ordinary presumption of equity that PRL was not intended to acquire a beneficial interest in them. The only question is who did hold the beneficial interest. Flat 4, 27 Abbey Road was transferred by the husband, who had originally bought it in his own name in 1991, before PRL was incorporated. There is therefore an ordinary resulting trust back to the husband, which is held by him subject to the charges in favour of Ahli United Bank and BNP Paribas. Flat 5, 27 Abbey Road was transferred to PRL by the husbands younger brother Michel. He had acquired title shortly before at a time when he could not have paid for it himself. The wifes evidence was that the husband paid for it. Again, there is no evidence to rebut the ordinary inference that the husband was the beneficial owner of the property at the time of the transfer to PRL, and that the company held it on a resulting trust for him. The leasehold interest in Flat 2, 143 Ashmore Road was transferred to PRL by the wife. The rather curious chain of title before that is summarised above. The circumstances suggest that the husband must have provided the purchase money and was the beneficial owner when the legal estate was held by Jimmy Lawrence and also at the time of its transfer from him to the wife. Either it then became the beneficial property of the wife (which is what equity would initially presume); or else it remained in the beneficial ownership of the husband, which is what I would on balance infer from the wifes evidence that the transfer was procured by the husband without her conscious involvement. In either case, the company as the legal owner can be required to transfer this property to the wife. I conclude that the husband was at all relevant times the beneficial owner of all three properties. The freehold interest in 143 Ashmore Road and Flat 6, 62 64 Beethoven Street come into a different category. Flat 6, 62 64 Beethoven Street is known to have been acquired by PRL from the husband in August 1998 for substantial consideration. Since PRL had not begun operations at that stage, I infer that the purchase money must have come from the husband. Virtually nothing is known about the terms of acquisition of the wifes interest in the freehold of 143 Ashmore Road, except that the husband says that the money came from PRL. I infer for the same reason that PRL was funded by the husband. In itself, that is consistent with PRL being the beneficial owner if, for example, the husband provided the money to the company by way of loan or capital subscription. But there is no evidence to that effect, and I would not be willing to presume it in the absence of any. I conclude that the husband was the beneficial owner of these two properties. That leaves the two London properties (Flat 310, Pavilion Apartments and 11, South Lodge, Circus Road) which were acquired in the name of Vermont for substantial consideration, in July 2001 and January 2004 respectively. Vermont is an oil trading company which according to the husband started lifting oil in 2010. In the companys financial statements for 2008, the two properties are listed as its only assets and there were no liabilities apart from the bank loans charged on Flat 310, Pavilion Apartments. Flat 310, Pavilion Apartments was acquired with funds derived from PRL at a time when the company had not begun trading operations. I infer that the funds were provided to PRL by the husband. The position is the same in the case of 11, South Lodge, except that this was bought with money provided by PRL at a time when it was an active trading company and could therefore have funded the purchase itself. However, it is right to note (i) that the ownership of residential investment property in London appears to have nothing to do with the oil trading business in which PRL was then engaged, and (ii) that at this stage of the history a consistent pattern can be discerned by which the husband causes properties to be acquired with funds provided by himself by companies under his control, nominally funded by PRL but in fact by himself. If 11, South Lodge was the exception, then it was a break with past practice. In the absence of any explanation of these transactions by the husband or his companies, I conclude that both of the properties acquired in the name of Vermont were beneficially owned by the husband. Whether assets legally vested in a company are beneficially owned by its controller is a highly fact specific issue. It is not possible to give general guidance going beyond the ordinary principles and presumptions of equity, especially those relating to gifts and resulting trusts. But I venture to suggest, however tentatively, that in the case of the matrimonial home, the facts are quite likely to justify the inference that the property was held on trust for a spouse who owned and controlled the company. In many, perhaps most cases, the occupation of the companys property as the matrimonial home of its controller will not be easily justified in the companys interest, especially if it is gratuitous. The intention will normally be that the spouse in control of the company intends to retain a degree of control over the matrimonial home which is not consistent with the companys beneficial ownership. Of course, structures can be devised which give a different impression, and some of them will be entirely genuine. But where, say, the terms of acquisition and occupation of the matrimonial home are arranged between the husband in his personal capacity and the husband in his capacity as the sole effective agent of the company (or someone else acting at his direction), judges exercising family jurisdiction are entitled to be sceptical about whether the terms of occupation are really what they are said to be, or are simply a sham to conceal the reality of the husbands beneficial ownership. Nuptial settlement The wife sought special leave to argue that the companies constituted a nuptial settlement within the meaning of section 24(1)(c) of the Act. The court ruled in the course of the hearing that leave would be refused. The point was not argued below and does not appear to be seriously arguable here. Terms for permission to appeal Before parting with this case, I will only record my surprise that the companies were given permission to appeal on such undemanding terms. They were required to make a payment on account of costs, but they were not required to purge their contempt in failing to disclose documents or information, nor were they put on terms as to dealings with the properties. There may have been good reasons for not imposing such terms, but on the face of it the possibility was not even considered. Conclusion I would accordingly declare that the seven disputed properties vested in PRL and Vermont are held on trust for the husband, and I would restore paragraph 6 of the order of Moylan J so far as it required those companies to transfer them to the wife. Subject to any contrary submissions as to costs, I would also restore paragraph 14 of the judges order so far as it dealt with the costs payable by PRL and Vermont, and would order them to pay the costs of the appeal to the Court of Appeal and to this court. As at present advised, I would not require Upstream, against whom no relief has ever been sought, to pay any costs, but in the rather unusual circumstances of this case, I would not make any costs order in their favour either. LORD NEUBERGER I agree that Mrs Prests appeal succeeds. More particularly, I agree that her appeal should be (i) allowed on the basis that the properties were acquired and held by the respondents on trust for the husband, but (ii) dismissed in so far as it relies on piercing the veil of incorporation, or on section 24(1)(a) or (c) of the Matrimonial Causes Act 1973. I agree with all that Lord Sumption says on (i) the construction of section 24(1)(a) of the 1973 Act, in paras 37 42, (ii) the trust issue, in his masterly analysis of the facts and inferences to be drawn from them, in paras 43 52, (iii) the point sought to be raised under section 24(1)(c), in para 53, and (iv) his conclusions in paras 55 and 56, and there is nothing I wish to add on those issues. I wish, however, to add a little to what Lord Sumption says on the question of whether, and if so, in what circumstances, the court has power to pierce the corporate veil in the absence of specific statutory authority to do so. I agree that there are two types of case where judges have described their decisions as being based on piercing the veil, namely those concerned with concealment and those concerned with evasion. It seems to me that Staughton LJ had a similar classification in mind in Atlas Maritime Co SA v Avalon Maritime Ltd (No 1) [1991] 4 All ER 769, 779G (quoted in VTB Capital plc v Nutritek International Corpn [2013] UKSC 5; [2013] 2 WLR 378, para 118), where he sought to distinguish between lifting and piercing the corporate veil. I also agree that cases concerned with concealment do not involve piercing the corporate veil at all. They simply involve the application of conventional legal principles to an arrangement which happens to include a company being interposed to disguise the true nature of that arrangement. Accordingly, if piercing the corporate veil has any role to play, it is in connection with evasion. Furthermore, I agree that, if the court has power to pierce the corporate veil, Munby J was correct in Ben Hashem v Al Shayif [2009] 1 FLR 115 to suggest that it could only do so in favour of a party when all other, more conventional, remedies have proved to be of no assistance (and therefore I disagree with the Court of Appeal in VTB [2012] 2 Lloyds Rep 313, para 79, who suggested otherwise). However, as in the recent decision of this court in VTB, it is not necessary to decide whether there is a principle that it is open to a court, without statutory authority (or, possibly, in the absence of the intention of contracting parties), to pierce the veil of incorporation (the doctrine), and, if it is, the scope, or boundaries, of the doctrine. However, I can see considerable force in the view that it is appropriate for us to address those matters now. This is the second case in the space of a few months when the doctrine has been invoked before this court on what are, on any view, inappropriate grounds. It is also clear from the cases and academic articles that the law relating to the doctrine is unsatisfactory and confused. Those cases and articles appear to me to suggest that (i) there is not a single instance in this jurisdiction where the doctrine has been invoked properly and successfully, (ii) there is doubt as to whether the doctrine should exist, and (iii) it is impossible to discern any coherent approach, applicable principles, or defined limitations to the doctrine. In these circumstances, there is obvious value in seeking to decide whether the doctrine exists, and if so, to identify some coherent, practical and principled basis for it, if we can do so in this case. Any discussion about the doctrine must begin with the decision in Salomon v A Salomon and Co Ltd [1897] AC 22, in which a unanimous House of Lords reached a clear and principled decision, which has stood unimpeached for over a century. The effect of the decision is encapsulated at pp 30 31, where Lord Halsbury LC said that a legally incorporated company must be treated like any other independent person with its rights and liabilities appropriate to itself , whatever may have been the ideas or schemes of those who brought it into existence. Whether that is characterised as a common law rule or a consequence of the companies legislation (or an amalgam of both), it is a very well established principle of long standing and high authority. Writing extra judicially, Lord Templeman referred to the principle in Salomon as the unyielding rock on which company law is constructed, and on which complicated arguments might ultimately become shipwrecked Forty Years On (1990) 11 Co Law 10. The decision in Salomon plainly represents a substantial obstacle in the way of an argument that the veil of incorporation can be pierced. Further, the importance of maintaining clarity and simplicity in this area of law means that, if the doctrine is to exist, the circumstances in which it can apply must be limited and as clear as possible. Since the decision in Salomon, there have been a number of cases where the courts have considered piercing or lifting the corporate veil. The most important of those cases are discussed by Lord Sumption in paras 20 35 above. That discussion demonstrates, as I see it, the following: i. The decision of the International Court of Justice in In re Barcelona Traction, Light and Power Co, Ltd [1970] ICJ 3 recognises the doctrine; however, that is in the context of a civil law system which includes the principle of abuse of rights, and begs the question whether, in a common law system, the doctrine should be applicable by the courts in the absence of specific legislative sanction; ii. There are judgments in family cases based on obiter dicta in Nicholas v Nicholas [1984] FLR 285 (eg the judgments of Thorpe LJ in this case and of Mostyn J in Kremen v Agrest (No 2) [2011] 2 FLR 490), where the doctrine has been treated as valid and applicable; but the application of the doctrine, even if it exists, in these cases is unsound, as Munby J effectively (in both senses of the word) indicated in A v A [2007] 2 FLR 467 and Ben Hashem [2009] 1 FLR 115; iii. There are two cases outside the family law context which laid the ground for the establishment of the doctrine, namely the decisions of the Court of Appeal in Gilford Motor Co Ltd v Horne [1933] Ch 935, and of Russell J in Jones v Lipman [1962] 1 WLR 832; iv. There are two subsequent decisions, one of the House of Lords, Woolfson v Strathclyde Regional Council 1978 SC(HL) 90, the other of the Court of Appeal, Adams v Cape Industries plc [1990] vs Ch 433, in which it was assumed or accepted that the doctrine existed, but they cannot amount to more than obiter observations, as in neither of them did the doctrine apply; In subsequent cases in the Court of Appeal and High Court, it has been (unsurprisingly) assumed that the doctrine does apply, two recent examples being the Court of Appeal decisions in VTB [2012] 2 Lloyds Rep 313 and Alliance Bank JSC v Aquanta Corpn [2013] 1 Lloyds Rep 175; vi. However, in only two of those subsequent cases (the first instance decisions in Gencor ACP Ltd v Dalby [2000] 2 BCLC 734 and Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177) has the doctrine actually been relied on, and they each could have been decided the same way without recourse to the doctrine, and therefore involved illegitimate applications of the doctrine on any view (see para 62 above). On closer analysis of cases mentioned in subpara (iii) above, it does not appear to me that the facts and outcomes in Gilford Motor and Jones provide much direct support for the doctrine. However, the decisions can fairly be said to have rested on the doctrine if one takes the language of the judgments at face value. Further, they indicate that, where a court is of the view (albeit that I think that it was mistaken in those cases) that there is no other method of achieving justice, the doctrine provides a valuable means of doing so. In Gilford Motor, the legal argument at first instance and on appeal seems to have concentrated on the validity of the restrictive covenant (see at [1933] Ch 935, 936 937 and 950 952). It is also clear from the judgment of Lord Hanworth MR at p 961 that counsel for the company conceded that if, contrary to his contention, the company was a mere cloak or sham and that the business was actually being carried on by Horne in breach of the restrictive covenant, then the company should also be restrained. Further, in my view, as that passage indicates, the case was one of concealment, and therefore did not really involve the doctrine at all. In any event, it seems to me that the decision in Gilford Motor that an injunction should be granted against the company was amply justified on the basis that the company was Hornes agent for the purpose of carrying on the business (just as his wife would have been, if he had used her as the cloak); therefore, if an injunction was justified against Horne, it was justified against the company. There is nothing in the judgments in Gilford Motor to suggest that any member of the Court of Appeal thought that he was making new law, let alone cutting into the well established and simple principle laid down in Salomon. It is by no means inconceivable that the three members of the Court of Appeal in Gilford Motor were using the expression cloak or sham to suggest, as a matter of legal analysis, a principal and agent relationship. Lord Hanworth relied on a passage in a judgment of Lindley LJ in Smith v Hancock [1894] 2 Ch 377, 385 (where the expression cloak or sham appears to have originated), and in that passage, it seems to me that the cloak or sham is treated as amounting to the business being carried on for the defendant. This view is supported by something Lord Denning MR said in Wallersteiner v Moir [1974] 1 WLR 991, 1013, namely it was quite clear that the companies in that case: were just the puppets of Dr Wallersteiner. Transformed into legal language, they were his agents to do as he commanded. He was the principal behind them. At any rate, it was up to him to show that any one else had a say in their affairs and he never did so: cf Gilford. As for Jones, I am unconvinced that it was necessary for Russell J to invoke the doctrine in order to justify an effective order for specific performance, as sought by the plaintiffs in that case. An order for specific performance would have required Lipman not merely to convey the property in question to the plaintiffs, but to do everything which was reasonably within his power to ensure that the property was so conveyed see eg Wroth v Tyler [1974] Ch 30, 47 51. Lipman and an employee of his solicitors were the sole shareholders and directors of the company, and its sole liability appears to have been a loan of 1500 to a bank (borrowed to meet half the 3000 which it paid for the property). In those circumstances, it seems clear that Lipman could have compelled the company to convey the property to the plaintiffs (on the basis that he would have to account to the company for the purchase price, which would have ensured that the bank was in no way prejudiced). Indeed, I consider that the company could fairly have been described and treated as being Lipmans creature, without in any way cutting into the principle established in Salomon. The history of the doctrine over 80 years of its putative life (taking Gilford Motor as the starting point) is, therefore, at least as I see it, a series of decisions, each of which can be put into one of three categories, namely: i. Decisions in which it was assumed that the doctrine existed, but it was rightly concluded that it did not apply on the facts; ii. Decisions in which it was assumed that the doctrine existed, and it was wrongly concluded that it applied on the facts; iii. Decisions in which it was assumed that the doctrine existed and it was applied to the facts, but where the result could have been arrived at on some other, conventional, legal basis, and therefore it was wrongly concluded that it applied (see para 62 above). (The doctrine has been invoked in cases not considered by Lord Sumption, but they take matters no further see the decisions mentioned and briefly considered in VTB [2013] 2 WLR 398, paras 125 and 127). The lack of any coherent principle in the application of the doctrine has been commented on judicially in many of the major common law jurisdictions. In this country, Clarke J in The Tjaskemolen [1997] 2 Lloyds Rep 465, 471 said that [t]he cases have not worked out what is meant by piercing the corporate veil. In Australia, in Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549, 567, Rogers AJA in the New South Wales Court of Appeal observed that there is no common, unifying principle, which underlies the occasional decision of courts to pierce the corporate veil, and that there is no principled approach to be derived from the authorities. In Constitution Insurance Co of Canada v Kosmopoulos [1987] 1 SCR 2, 10, Justice Wilson in the Supreme Court of Canada said that [t]he law on when a court may [lift] the corporate veil follows no consistent principle. The New Zealand Court of Appeal in Attorney General v Equiticorp Industries Group Ltd (In Statutory Management) [1996] 1 NZLR 528, 541, said that to lift the corporate veil is not a principle. It describes the process, but provides no guidance as to when it can be used. In the South African Supreme Court decision, Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1995 (4) SA 790 (A), 802 803, Smalberger JA observed that [t]he law is far from settled with regard to the circumstances in which it would be permissible to pierce the corporate veil. Judges in the United States have also been critical, even though the doctrine has been invoked and developed to a much greater extent than in this jurisdiction. In Secon Serv Sys Inc v St Joseph Bank & Trust Co, 855 F2d (7th Cir, 1988), 406, 414, Judge Easterbrook in the US Court of Appeals described the doctrine as quite difficult to apply, because it avoids formulating a real rule of decision. This keeps people in the dark about the legal consequences of their acts . And in Allied Capital Corp v GC Sun Holdings LP, 910 A2d (2006) 1020, 1042 1043, the Delaware Court of Chancery said that the doctrine has been rightfully criticized for its ambiguity and randomness, and that its application yield[s] few predictable results. The doctrine has fared no better with academics. Easterbrook and Fischel, Limited Liability and the Corporation (1985) 52 Univ Chicago L Rev 89, pithily observe that [p]iercing seems to happen freakishly. Like lightning, it is rare, severe, and unprincipled. The jurisprudence on the doctrine has been described as incoherent and unprincipled by Farrar, Fraud, Fairness and Piercing the Corporate Veil (1990) 16 Can Bus LJ 474, 478. C Mitchell, in Lifting the Corporate Veil in the English Courts: An Empirical Study (1999) 3 Co Fin and Ins LR 15, 16 observes that courts have often used conclusory terms to express their decisions on the point, which for all their vividness tell us nothing about the reasoning which underpins these decisions. Neyers in Canadian Corporate Law, Veil Piercing, and the Private Law Model Corporation (2000) 50 Univ Toronto LJ 173, 180, asks rhetorically: How can the legal person doctrine that is so central to corporate law in one sentence be disregarded so casually in the next? D Michael in To Know A Veil (2000) 26 J Corp Law 41, 55, refers to the doctrine as a non existent and false doctrine. Ramsay and Noakes, Piercing the Corporate Veil in Australia (2001) 19 C & SLJ 250, 251, note that the doctrine is far from clear in the case law. Oh, Veil Piercing (2010) 89 Texas Law Review 81, 84 says that [t]he inherent imprecision in metaphors has resulted in a doctrinal mess. This last view has some resonance with my remarks in VTB [2013] 2 WLR 398, para 124, about the use of pejorative expressions to mask the absence of rational analysis. It also chimes with Justice Cardozos reference to the mists of metaphor in company law, which, starting as devices to liberate thought, end often by enslaving it, in Berkey v Third Ave Ry 155 NE 58, 61 (1926). In these circumstances, I was initially strongly attracted by the argument that we should decide that a supposed doctrine, which is controversial and uncertain, and which, on analysis, appears never to have been invoked successfully and appropriately in its 80 years of supposed existence, should be given its quietus. Such a decision would render the law much clearer than it is now, and in a number of cases it would reduce complications and costs: whenever the doctrine is really needed, it never seems to apply. However, I have reached the conclusion that it would be wrong to discard a doctrine which, while it has been criticised by judges and academics, has been generally assumed to exist in all common law jurisdictions, and represents a potentially valuable judicial tool to undo wrongdoing in some cases, where no other principle is available. Accordingly, provided that it is possible to discern or identify an approach to piercing the corporate veil, which accords with normal legal principles, reflects previous judicial reasoning (so far as it can be discerned and reconciled), and represents a practical solution (which hopefully will avoid the problems summarised in para 75 above), I believe that it would be right to adopt it as a definition of the doctrine. Having read what Lord Sumption says in his judgment, especially in paras 17, 18, 27, 28, 34 and 35, I am persuaded by his formulation in para 35, namely that the doctrine should only be invoked where a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. It appears to me that such a clear and limited doctrine would not fall foul of at least most of the strictures which have been made of the doctrine. In particular, (i) it should be of value in the few cases where it can be properly invoked, (ii) it is, I believe and hope, sufficiently clear as to render it unlikely to be raised in inappropriate cases, and (iii) it does not cut across the rule in Salomon because it is consistent with conventional legal principles. It is only right to acknowledge that this limited doctrine may not, on analysis, be limited to piercing the corporate veil. However, there are three points to be made about that formulation. In so far as it is based on fraud unravels everything, as discussed by Lord Sumption in para 18, the formulation simply involves the invocation of a well established principle, which exists independently of the doctrine. In any event, the formulation is not, on analysis, a statement about piercing the corporate veil at all. Thus, it would presumably apply equally to a person who transfers assets to a spouse or civil partner, rather than to a company. Further, at least in some cases where it may be relied on, it could probably be analysed as being based on agency or trusteeship especially in the light of the words under his control. However, if either or both those points were correct, it would not undermine Lord Sumptions characterisation of the doctrine: it would, if anything, serve to confirm the existence of the doctrine, albeit as an aspect of a more conventional principle. And if the formulation is intended to go wider than the application of fraud unravels everything, it seems to me questionable whether it would be right for the court to take the course of arrogating to itself the right to step in and undo transactions, save where there is a well established and principled ground for doing so. Such a course is, I would have thought, at least normally, a matter for the legislature. Indeed Parliament has decided to legislate to this effect in specified and limited circumstances with protection for third parties, in provisions such as section 37 of the Matrimonial Causes Act 1973 and section 423 of the Insolvency Act 1986. LADY HALE (with whom Lord Wilson agrees) I agree that this appeal should succeed, on the basis that the properties in question were held by the respondent companies on trust for the husband. As he is beneficially entitled to them, they fall within the scope of the courts power to make transfer of property orders under section 24(1)(a) of the Matrimonial Causes Act 1973. It also means that the court has power to order that the companies, as bare trustees, transfer these properties to the wife. The reasons for holding that these properties were beneficially owned by the husband have been amply explained by Lord Sumption. I would only emphasise the special nature of proceedings for financial relief and property adjustment under the Matrimonial Causes Act, which he explains in para 45. There is a public interest in spouses making proper provision for one another, both during and after their marriage, in particular when there are children to be cared for and educated, but also for all the other reasons explored in cases such as Miller v Miller [2006] UKHL 24, [2006] 2 AC 618. This means that the courts role is an inquisitorial one. It also means that the parties have a duty, not only to one another but also to the court, to make full and frank disclosure of all the material facts which are relevant to the exercise of the courts powers, including of course their resources: see Livesey (formerly Jenkins) v Jenkins [1985] AC 424. If they do not do so, the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are. I also agree, for the reasons given by Lord Sumption, that section 24(1)(a) does not give the court power to order a spouse to transfer property to which he is not in law entitled. The words entitled, either in possession or reversion refer to a right recognised by the law of property. This is clear, not only from the statutory language, but also from the statutory history. The words entitled to any property either in possession or reversion first appeared in the Matrimonial Causes Act 1857, which introduced judicial divorce to the law of England and Wales. Section 45 gave the court power, when granting a decree of divorce on the ground of the wifes adultery, to settle such property for the benefit of the husband and/or the children of the marriage. The same words were used in section 3 of the Matrimonial Causes Act 1884, when extending the same power to a husbands application for restitution of conjugal rights. They were carried through, respectively, into section 191(1) and (2) of the Supreme Court of Judicature (Consolidation) Act 1925, then into section 24(1) and (2) of the Matrimonial Causes Act 1950, then into sections 17(2) and 21(3) of the Matrimonial Causes Act 1965. The decree of restitution of conjugal rights was abolished in the comprehensive package of matrimonial law reforms which came into force on 1 January 1971. That package included, in section 4(a) of the Matrimonial Proceedings and Property Act 1970, the power to order either spouse to transfer to the other property to which the first mentioned party is entitled, either in possession or reversion. This was an expansion, for the benefit of either spouse and to outright transfer as well as settlement, of the earlier power to settle the wifes property. Section 4(a) later became section 24(1)(a) of the Matrimonial Causes Act 1973. There is nothing in the language, the history, or indeed the Report of the Law Commission which led to the 1970 Act (Law Com No 25), to suggest that those words should be read to include property over which the first mentioned party has such control that he could cause himself to become entitled, either in possession or reversion. But of course such property can be taken into account when computing that partys resources for the purpose of section 25(2) of the 1973 Act, which lays down a non exhaustive list of factors to be taken into account by the court when deciding how to exercise its various powers to make financial and property adjustment orders. Nor is there anything in the language of section 24(1)(a) to suggest that it was Parliaments intention to grant the divorce courts an express power to pierce the corporate veil in such a way as to treat property belonging to a limited company as property belonging to the spouse who owns and/or controls the company. The question nevertheless arises as to whether, in a case such as this, the courts have power to prevent the statutes under which limited liability companies may be established as separate legal persons, whether in this or some other jurisdiction, being used as an engine of fraud. I agree with Lord Sumption that piercing the corporate veil is an example of that general principle, with which family lawyers are familiar from the case of R v Secretary of State for the Home Department, Ex p Puttick [1981] QB 767. Lord Sumption refers to the process compendiously as disregarding the separate personality of the company at para 16. When considering its scope, however, it may be helpful to consider what the purpose of doing this is. In Salomon v A Salomon and Co Ltd [1897] AC 22 the purpose was to go behind the separate legal personality of the company in order to sue Aron Salomon personally for a liability that was legally that of the company which he had set up (with himself and members of his family as shareholders) to conduct his leather and boot making business. This succeeded at first instance and in the Court of Appeal, Lindley LJ going so far as to say that Mr Aron Salomons scheme is a device to defraud creditors: [1895] 2 Ch 323, 339. They did not think that Parliament had legislated for the setting up of limited liability companies in order that sole traders should be able to conduct their businesses on limited liability terms. But the House of Lords disagreed: the company was a separate person from Mr Salomon and he could not be made liable for the companys debts. They did not think that there was any fraud involved simply in using a limited liability company as a vehicle for conducting a legitimate business. Thus was the legal structure of modern business born. But there are a few cases where the courts have apparently been prepared to disregard the separate personality of a company in order to grant a remedy, not only against the company, but also against the individual who owns and/or controls it. Both Gilford Motor Co Ltd v Horne [1933] Ch 935 and Jones v Lipman [1962] 1 WLR 832 are examples of this. In both those cases, it so happened that the controller had a pre existing legal obligation which he was attempting to evade by setting up a company, in the one case a contractual obligation not to compete with his former employers, in the other case a contractual obligation to sell some land to the claimant. In In re Darby [1911] 1 KB 95, on the other hand, the liquidator of a creditor company was permitted to go behind the separate personality of a debtor company registered in Guernsey in order to obtain a remedy personally against its promoters who had fraudulently creamed off the profit from the sale by the Guernsey company to the creditor company of a worthless licence to run a slate quarry in Wales. I am not sure whether it is possible to classify all of the cases in which the courts have been or should be prepared to disregard the separate legal personality of a company neatly into cases of either concealment or evasion. They may simply be examples of the principle that the individuals who operate limited companies should not be allowed to take unconscionable advantage of the people with whom they do business. But what the cases do have in common is that the separate legal personality is being disregarded in order to obtain a remedy against someone other than the company in respect of a liability which would otherwise be that of the company alone (if it existed at all). In the converse case, where it is sought to convert the personal liability of the owner or controller into a liability of the company, it is usually more appropriate to rely upon the concepts of agency and of the directing mind. What we have in this case is a desire to disregard the separate legal personality of the companies in order to impose upon the companies a liability which can only be that of the husband personally. This is not a liability under the general law, for example for breach of contract. It is a very specific statutory power to order one spouse to transfer property to which he is legally entitled to the other spouse. The argument is that that is a power which can, because the husband owns and controls these companies, be exercised against the companies themselves. I find it difficult to understand how that can be done unless the company is a mere nominee holding the property on trust for the husband, as we have found to be the case with the properties in issue here. I would be surprised if that were not often the case. There is a statutory power to set aside certain dispositions made with the intention of defeating a claim for financial provision or property adjustment in section 37 of the Matrimonial Causes Act 1973. It is not suggested in this case that the expenditure involved in buying these properties, all of which were bought long before the marriage broke down, was made with that intention. If it had been, there might have been an argument that the exception for bona fide purchasers for value contained in section 37(4) did not apply to a company where the controlling mind was acting with that intention. But that is not this case. Stone & Rolls Ltd v Moore Stephens (a firm) [2009] AC 1391 is an example of going behind the separate legal personality of the company in order to get at the person who owned and controlled it, not for the purpose of suing him, but in order to attribute his knowledge to the company so that its auditors could raise a defence of ex turpi causa to the companys allegation that they had negligently failed to detect the fraudulent nature of its business. For all those reasons, in addition to those given by Lord Sumption, I would dismiss this appeal on all but the issue of whether either party had a beneficial interest in the properties in question but allow it on that ground. I fervently hope that the wife will gain some benefit from the outcome of all this litigation, although in the light of the mortgages which apparently encumber the properties I am not optimistic that she will. I agree that the appeal should be allowed for the reasons given by Lord LORD MANCE Sumption, supplemented in their essence by Lord Neuberger. I agree with Lord Sumptions analysis of the domestic case law to date in which the metaphor of piercing the veil has been deployed as part of the reasoning for a decision representing an exception to the basic principle in Salomon v A Salomon & Co Ltd [1897] AC 22. In the upshot, the only cases which Lord Sumption identifies in which a principle of piercing the veil can be said to have been critical to the reasoning can be rationalised as falling within what he describes as the evasion principle. In other cases, the corporate entity was simply being used to conceal the real actor, or some other analysis or relationship existed (such as principal and agent, nominee or trustee beneficiary) to explain the decision. It is however often dangerous to seek to foreclose all possible future situations which may arise and I would not wish to do so. What can be said with confidence is that the strength of the principle in Salomons case and the number of other tools which the law has available mean that, if there are other situations in which piercing the veil may be relevant as a final fall back, they are likely to be novel and very rare. In this connection, I have however in mind that, in giving the recent Privy Council judgment in La Gnrale des Carrires et des Mines v FG Hemisphere Associates LLC [2012] UKPC 27, I said at para 77 (in a context where Gcamines was a state corporation, not susceptible of being wound up): The alternative way in which Hemisphere puts its case is to submit that, if Gcamines is otherwise accepted as a separate juridical entity, the facts found justify the lifting of the corporate veil to enable Hemisphere to pursue Gcamines as well as the State. In the Boards view, this involves a misapplication of any principles upon which the corporate veil may be lifted under domestic and international law. Assuming for the sake of argument that the unceremonious subjecting of Gcamines to the controlling will of the state involved a breach by the State of its duty to respect Gcamines as a separate entity, that might conceivably justify an affected third party, possibly even an aggrieved general creditor of Gcamines, in suggesting that the corporate veil should be lifted to make the State, which had deprived Gcamines of assets, liable for Gcamines debts. The Board need express no further view on that possibility. It represents the inverse of the present situation. There is no basis for treating the States taking or Gcamines use of Gcamines assets for State purposes, at which Hemisphere directs vigorous criticism, as a justification for imposing on Gcamines yet further and far larger burdens in the form of responsibility for the whole of the debts of the Democratic Republic of the Congo. In international law as in domestic law, lifting the corporate veil must be a tailored remedy, fitted to the circumstances giving rise [to] it. It may be that the possibility on which I touched in para 77 would evaporate as a possible further exception to the principle in Salomons case. It is certainly a different situation to those which Lord Sumption discusses. But one would wish to hear further argument on this or any other suggested exception, in a case where it was directly relevant, before deciding this. No one should, however, be encouraged to think that any further exception, in addition to the evasion principle, will be easy to establish, if any exists at all. The evident absence, under the close scrutiny to which Lord Sumption has subjected the case law, of authority for any further exception speaks for itself. LORD CLARKE I agree with the other members of the court that the appeal should be allowed for the reasons given by Lord Sumption. I only wish to add a word on piercing the corporate veil. I agree that there is such a doctrine and that its limits are not clear. I also agree that Munby J was correct in Ben Hashem v Al Shayif [2009] 1 FLR 115 to suggest that the court only has power to pierce the corporate veil when all other more conventional remedies have proved to be of no assistance. It is thus likely to be deployed in a very rare case. Lord Sumption may be right to say that it will only be done in a case of evasion, as opposed to concealment, where it is not necessary. However, this was not a distinction that was discussed in the course of the argument and, to my mind, should not be definitively adopted unless and until the court has heard detailed submissions upon it. I agree with Lord Mance that it is often dangerous to seek to foreclose all possible future situations which may arise and, like him, I would not wish to do so. I expressed a similar view in VTB Capital plc v Nutritek International Corpn [2013] 2 WLR 378 and adhere to it now. However, I also agree with Lord Mance and others that the situations in which piercing the corporate veil may be available as a fall back are likely to be very rare and that no one should be encouraged to think that any further exception, in addition to the evasion principle, will be easy to establish. It will not. LORD WALKER Lord Sumption has comprehensively analysed the rather confused evidence relating to beneficial ownership of the London properties. His conclusion that they are all in the beneficial ownership of Mr Prest is in my view irresistible, based as it is on positive evidence of the sources from which the purchases were funded, as well as on inferences drawn from the failure of Mr Murphy, a director of PRL, to attend court for cross examination. I also agree with all Lord Sumptions observations as to the construction and effect of the Matrimonial Causes Act 1973, to which Lady Hale has added a full account of its legislative history. The appeal should be allowed in the terms proposed by Lord Sumption. In these circumstances it is not strictly necessary for this Court to add further general comments on the vexed question of piercing the corporate veil. But for my part I think it would be a lost opportunity even perhaps a minor dereliction of duty if we were to abstain from any further comment. I do therefore welcome the full discussion in the judgments of Lord Neuberger, Lady Hale, Lord Mance and Lord Sumption. residual category in which the metaphor operates independently no clear example has yet been identified, but Stone & Rolls Ltd v Moore Stephens (a firm), mentioned in Lady Hales judgment, is arguably an example. I am reluctant to add to the discussion but for my part I consider that piercing the corporate veil is not a doctrine at all, in the sense of a coherent principle or rule of law. It is simply a label often, as Lord Sumption observes, used indiscriminately to describe the disparate occasions on which some rule of law produces apparent exceptions to the principle of the separate juristic personality of a body corporate reaffirmed by the House of Lords in Salomon v A Salomon and Co Ltd [1897] AC 22. These may result from a statutory provision, or from joint liability in tort, or from the law of unjust enrichment, or from principles of equity and the law of trusts (but without any false invocation of equity in the phrase used by C Mitchell in the article mentioned by Lord Neuberger). They may result simply from the potency of an injunction or other court order in binding third parties who are aware of its terms. If there is a small

This appeal arises out of proceedings for financial remedies following a divorce between Michael and Yasmin Prest. The appeal concerns the position of a number of companies belonging to the Petrodel Group which were wholly owned and controlled by Michael Prest, the husband. One of the companies was the legal owner of five residential properties in the UK and another was the legal owner of two more. The question on this appeal is whether the court has power to order the transfer of these seven properties to the wife given that they legally belong not to the husband but to his companies. Under Section 24(1)(a) of the Matrimonial Causes Act 1973 (the 1973 Act), the court may order that a party to the marriage shall transfer to the other partysuch property as may be so specified, being property to which the first mentioned party is entitled, either in possession or reversion. In the High Court, Moylan J concluded that there was no general principle that entitled him to reach the companies assets by piercing the corporate veil. He nevertheless concluded that a wider jurisdiction to pierce the corporate veil was available under section 24 of the 1973 Act. In the Court of Appeal, three of the companies challenged the decision on the ground that there was no jurisdiction to order their property to be conveyed to the wife. The majority in the Court of Appeal agreed and criticised the practice of the Family Division of treating assets of companies substantially owed by one party to a marriage as available for distribution under section 24 of the 1973 Act. The Supreme Court unanimously allows the appeal by Yasmin Prest and declares that the seven disputed properties vested in the companies are held on trust for the husband on the ground (which was not considered by the courts below) that, in the particular circumstances of the case, the properties were held by the husbands companies on a resulting trust for the husband, and were accordingly property to which the [husband] is entitled, either in possession or reversion. Lord Sumption gives the leading judgment and Lord Neuberger, Lady Hale, Lord Clarke and Lord Walker add concurring judgments. There are three possible legal bases on which the assets of the companies might be available to satisfy the lump sum order against the husband: (1) that this is a case where, exceptionally, the Court may disregard the corporate veil in order to give effective relief; (2) that section 24 of the 1973 Act confers a distinct power to disregard the corporate veil in matrimonial cases; or (3) that the companies hold the properties on trust for the husband, not by virtue of his status as sole shareholder and controller of the company, but in the particular circumstances of the case [9]. After surveying the authorities, the Court holds that there is a principle of English law which enables a court in very limited circumstances to pierce the corporate veil. It applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil but only for the purpose of depriving the company or its controller of the advantage which they would otherwise have obtained by the companys separate legal personality. In most cases the facts necessary to establish this will disclose a legal relationship between the company and its controller giving rise to legal or equitable rights of the controller over the companys property, thus making it unnecessary to pierce the veil. In these cases, there is no public policy imperative justifying piercing the corporate veil. But the recognition of a small residual category of cases where the abuse of the corporate veil to evade or frustrate the law can be addressed only by disregarding the legal personality of the company is consistent with authority and long standing principles of legal policy. [35] The principle has no application in the present case because the husbands actions did not evade or frustrate any legal obligation to his wife, nor was he concealing or evading the law in relation to the distribution of assets of the marriage upon its dissolution [36]. Some of the concurring judgments reserve the possibility of a somewhat wider test, but not in respects which affect its application to the present case. The Court rejects the argument that a broader principle applies in matrimonial proceedings by virtue of section 24(1)(a) of the 1973 Act. The section invokes concepts of the law of property with an established legal meaning which cannot be suspended or taken to mean something different in matrimonial proceedings [37]. Nothing in the statutory history or wording of the 1973 Act suggests otherwise [86 9]. General words in a statute are not to be read in a manner inconsistent with fundamental principles of law unless this result is required by express words or necessary implication [40]. The trial judges reasoning cut across the statutory scheme of company and insolvency law which are essential for protecting those dealing with companies [41]. It follows that the only basis on which the companies could be ordered to convey properties to the wife is that they belong beneficially to the husband, by virtue of the particular circumstances in which the properties came to be vested in them [43]. After examining the relevant findings about the acquisition of the seven disputed properties, the Court finds that the most plausible inference from the known facts was that each of the properties was held on resulting trust by the companies for the husband. The trial judge found that the husband had deliberately sought to conceal the fact in his evidence and failed to comply with court orders with particular regard to disclosing evidence [4]. Adverse influences could therefore be drawn against him. [45]. The Court inferred that the reason for the companies failure to co operate was to protect the properties, which suggested that proper disclosure would reveal them to beneficially owned by the husband [47]. It followed that there was no reliable evidence to rebut the most plausible inference from the facts [49 51].

Between 01.00 and 07.00 on 11 May 2009, Mr Renford Braganza, Chief Engineer on BPs oil tanker the British Unity, then in the mid North Atlantic, disappeared. No one knows for certain what happened to him. But his employers formed the opinion that the most likely explanation for his disappearance was that he had committed suicide by throwing himself overboard. This would mean that his widow was not entitled to the death benefits provided for in his contract of employment. Clause 7.6.3 of that contract provided relevantly as follows: For the avoidance of doubt compensation for death, accidental injury or illness shall not be payable if, in the opinion of the Company or its insurers, the death, accidental injury or illness resulted from amongst other things, the Officers wilful act, default or misconduct whether at sea or ashore . (emphasis supplied) It is not the task of this or any other court determining a claim under such a contract to decide what actually happened to Mr Braganza. The task of the court is to decide whether his employer was entitled to form the opinion which it did. The issue of general principle in this appeal, therefore, is the test to be applied by the court in deciding that question. The facts Mr Braganza was an able and well qualified Chief Engineer. Like all the crew of the MV British Unity, he was an Indian national. He was a Roman Catholic and married with two children. In July 2008, the family had moved from India to Toronto in Canada and he had taken extended leave for this purpose. After returning to work with BP, he joined the British Unity in Gibraltar in February 2009. The vessels main engine had broken down in August 2008 and been repaired but the damaged cylinder liners had not been replaced. This major work was done in April 2009 in Ferrol, Spain. Shortly after leaving Ferrol, the cooling water jacket of one of the cylinders began to leak. The vessel then proceeded via Falmouth to Brofjorden in Sweden, where a cargo of unleaded gasoline was loaded and also two spare cooling water jackets, which were stored in an alleyway on the main deck, close to a hatch providing access to the engine room below. After sailing from Brofjorden, Mr Braganza received an email on 5 May 2009 from an engineering superintendent asking him to carry out a scavenge inspection/ring inspection of the engine in about six days time and suggesting that it would be prudent to replace the cooling water jacket at the same time as the engine was stopped for that purpose. Mr Braganza replied that he would do the inspection in about six days time and try to carry out the jacket replacement at the earliest opportunity. To do this, it would first be necessary to lower the cooling water jacket through the hatch into the engine room below. Ms Belinda Bucknall QC, for Mrs Braganza, stresses the highly weather sensitive nature of the cooling water jacket exchange. (Indeed, Mr Williamson, the engineering superintendent who had supervised the major works in Ferrol had intended to telephone Mr Braganza on the morning of 11 May to suggest that he think about the operation because obviously the lifting of a one and half tonne cylinder head in any sort of swell would be risky.) The main engine would have to be shut down for several hours, leaving the vessel at the mercy of wind and wave. The vessel was originally bound for Jebel Ali in the United Arab Emirates, but on 7 May, while in the middle of the Bay of Biscay, it was ordered to proceed to New York instead. It therefore altered course and headed across the Atlantic. On 9 May, the weather worsened during the day and the log recorded at 20.00 a rough sea and high swell and shipping water on deck. On 10 May the weather began to improve. At 19.00, the Master, the Chief Officer, Mr Braganza and the second engineer met to discuss the plans for the next day. These included lowering liner jacket to engine room from main deck and M/E scavenge inspection and liner jacket renewal. It was agreed that the Master and Chief Officer would check the weather in the morning. At about 23.30 that same night, the Master and Mr Braganza met for about an hour. They discussed the weather conditions for the next day, with the assistance of a weather routing report which the Master had sent to Mr Braganzas computer. During the meeting, Mr Braganza emailed an engineering superintendent to report that he intended to stop the main engines the next day and do a scavenge inspection and that, weather permitting, he would like to change the liner jacket at the same time. He was advised to go ahead if weather and schedule permits. The Master left Mr Braganzas cabin at about 00.30 on 11 May. That was the last anyone saw of the Chief Engineer. At 01.00 he sent a routine email to the second engineer. At 07.00 it was noticed that his cabin door was open, as it habitually was unless he was sleeping. His bed looked as if it had been slept in. He did not breakfast as usual in the officers mess. The Chief Officer carried out a risk assessment around 08.00 and the Master agreed that the job could be carried out. The Judge concluded that it was unlikely that there was no pitching or rolling but that it was not such as to make the planned operations unsafe. Lowering the cooling water jackets into the engine room began shortly after 08.00 and was safely completed by about 09.30. Mr Braganza was not there. Soon afterwards, the Master announced that he was missing. A search was made on board but he was not found. The vessel was turned around and a search and rescue operation conducted but he was not found. The cooling water jacket replacement was postponed until some days later. On arrival in New York, an investigation was carried out on behalf of the Isle of Man where the British Unity was registered. The ships crew were interviewed under caution. Its conclusion was that Mr Braganza was lost overboard, presumed drowned, but no finding was made as to the reason for this. BP then set up its own inquiry, in accordance with its own procedures, to investigate the relevant circumstances leading up to the loss of Mr Braganza, identify if possible the root causes of the incident and identify any changes required to the BP Shipping Safety Management System. The five person team took about four months to make their extensive inquiries. Their eventual report was dated 17 September 2009. It considered five possible scenarios. The team were able to discount three explanations hiding or being hidden on board, collection by another vessel and fall from vessel due to horseplay, altercation or foul play. That left an accidental fall from the vessel, which could not be discounted, and suicide. Under the heading suicide, the team made six bullet points which led them to consider that suicide was a possibility. There was much criticism of each of these points in the courts below and the conclusions of each are briefly summarised below: (1) Mr Braganzas behaviour was reported to be notably different on this voyage than on previous voyages: (a) he was quiet and withdrawn, (b) there were no clean officers uniforms in his cabin, and (c) his attention to detail in record keeping had slipped. The judge rejected (a) and (b) but found (c) justified. The Court of Appeal found all three justified. (2) The shoes and sandals he usually wore on board were found in his cabin after his disappearance. The judge found it difficult to see how this could be probative of suicide as he could have worn his work boots. The Court of Appeal agreed with him but thought it unimportant. (3) Several e mail messages received from his immediate family . suggest [he] had some family and/or financial difficulties that were causing him concern. The judge set out the emails from Mrs Braganza in some detail, including one on the 27 March, where she wrote I really cannot figure out what has shaken you out so much that you seem to be so afraid of life (see also paras 73 and 74 of Lord Neubergers judgment). They certainly suggest that he was worried about something. The team did not interview Mrs Braganza about her communications with her husband during the voyage and what these might mean, but the judge concluded that this was not unfair, because she could have provided an explanation as soon as she got their report. The Court of Appeal considered that the team was undoubtedly correct on this point (para 30). (4) He was not aware, before joining the ship, of its status and reputation and was reported to be unhappy about this. The judge accepted that this was correct. (5) He considered himself eligible for the 2008 bonus which had been paid to him, but the employer had later advised him that it would be withdrawn. The judge thought that this could not be a cogent reason for inferring suicide. The Court of Appeal held (as we shall see) that this was not a necessary approach for the team to adopt. (6) There were indications that the watertight door from the accommodation block that opens onto the upper deck on the starboard side may have been opened during the hours of darkness on the morning of 11 May. No member of the crew reported opening this door. The judge rejected this point, as there was no evidence that the door had been opened during the hours of darkness and the bosun could have left it secured on only one dog when he went on deck at the start of the working day. The Court of Appeal considered this an extremely small point (para 33). The teams report went through several drafts. The first version did not mention suicide. After exchanges with BP Legal, the final version concluded that Having regard for all the evidence the investigation team considers the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. The judge rejected the suggestion that there had been a fundamental shift between the first and final versions. The team had always felt that suicide was the most likely explanation. However, they could not rule out that he had gone on deck for a work related reason and that his fall had been accidental. The judge commented that What can perhaps be said is that the teams initial reluctance to identify suicide as . the likely cause of death suggests that such a conclusion was not clearly proven in the minds of the team (para 88). The report was produced by and for BP Shipping Limited, who owned and managed the vessel. It was then forwarded to Mr Sullivan, General Manager of BP Maritime Services (Singapore) Pte Ltd, a Singapore Company which provides management services to the shipping company and employed the officers on board the vessel. Mr Sullivan made no further enquiries of his own. On the basis of the teams report, he concluded that there had been wilful default within the meaning of Clause 7.6.3 of the contract of employment and thus that death in service benefits were not payable to Mrs Braganza. BP Legal informed her solicitors of this on 13 November 2009. Mrs Braganza brought a claim in contract against the employer for death benefits amounting to US$230,265. She also brought a claim in tort under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934 for damages quantified as US$1,325,945, alleging that the death was caused by negligence on the part of both the shipping company and the employer. BP produced a supplemental report in answer to the claims (see paras 83 to 85 of Lord Neubergers judgment). Mr Sullivan maintained his decision. The action was tried over 8 days in 2012 before Teare J, sitting as a judge of the Admiralty Court: [2012] EWHC 1423 (Comm). Teare J was unable to make a finding as to the cause of Mr Braganzas death (para 60): there was a real possibility, but it was not more likely than not, that he had fallen overboard (para 57); but the evidence was not sufficiently cogent to warrant a finding of suicide on the balance of probabilities (para 58). He rejected the claim in tort on the ground that there had been no breach of duty in deciding to carry out the two operations that day (para 64) and that, even if there had been a breach of duty, it had not caused the death (para 65). Mrs Braganza has not appealed against that conclusion. Teare J upheld the contractual claim. It was common ground between the parties that the opinion formed by the employer had to be reasonable (para 76). This meant reasonable in the sense in which that expression is used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation. [1948] 1 KB 223, which had been applied to the exercise of a contractual discretion (by a P & I Club) in The Vainqueur Jos [1979] 1 Lloyds Rep 557 (para 91). As Clause 7.6.3 was in the nature of an exception or exclusion clause, the burden of proving that the opinion was a reasonable one lay with the employer (para 93). The investigation team did not direct themselves that before making a finding of suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide (para 94). They, and therefore Mr Sullivan, failed to take into account the real possibility that Mr Braganza had gone out on deck in order to check the weather to see whether it was safe to carry out the planned work (para 96). They had stated in the first draft of their report that they could not find any work related reason for him to be outside during this time. His interest in the weather furnished such a reason and they should have taken it into account (para 97). This mattered because they had concluded that an accidental fall could not be discounted (para 98). Thus they were not properly directed in law and failed to take into account a relevant matter when forming their opinion (para 99). BP had conceded that if the opinion was not reasonable, the contractual claim should succeed (rather than the matter be sent back to them for reconsideration) (para 93). Having reached that conclusion, nevertheless Teare J very properly went on to consider the reasons advanced against the teams conclusion and formed the views outlined in para 9 above on the six bullet points. The employer appealed: [2013] EWCA Civ 230. Longmore LJ (with whom Rimer and Tomlinson LJJ agreed) thought it not entirely clear whether the judge had considered that the failure of the team, and Mr Sullivan, to direct themselves as to the need for cogent evidence before making a finding of suicide was in itself enough to render their opinions unreasonable (para 9). But, as Mocatta J had pointed out in The Vainqueur Jos, at 577, it would be a mistake to expect [of a lay body] the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a Court of Law (para 13). It could not be the law that a non lawyer such as Mr Sullivan had to give himself directions before forming his opinion (para 14). It would be impossible for him to give himself such a direction without taking legal advice of a kind which cannot have been contemplated by the requirements of the death benefit clause (para 20). As to the failure to appreciate that there might be work related reasons for Mr Braganza to go on deck, that failure could not make the employers opinion unreasonable in the absence of a mechanism explaining how he could accidentally fall overboard (para 22). Thus Longmore LJ was unable to agree with either of Teare Js reasons for saying that the opinion was unreasonable (para 23). He therefore went on to consider and reject the wider ranging attack mounted upon the six bullet points (see para 9 above). The conclusion of suicide was a reasonable one in all the circumstances (para 34). The principles This case raises two inter linked questions of principle, one general and one particular. The particular issue is the proper approach of a contractual fact finder who is considering whether a person may have committed suicide. Does the fact finder have to bear in mind the need for cogent evidence before forming the opinion that a person has committed suicide? The general issue is what it means to say that the decision of a contractual fact finder must be a reasonable one. There are many statements in the reported cases to the effect that the principles are well settled and well understood, but this case illustrates that all is not as clear or as well understood as it might be. Contractual terms in which one party to the contract is given the power to exercise a discretion, or to form an opinion as to relevant facts, are extremely common. It is not for the courts to re write the parties bargain for them, still less to substitute themselves for the contractually agreed decision maker. Nevertheless, the party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the contracting parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised, a term which may vary according to the terms of the contract and the context in which the decision making power is given. There is an obvious parallel between cases where a contract assigns a decision making function to one of the parties and cases where a statute (or the royal prerogative) assigns a decision making function to a public authority. In neither case is the court the primary decision maker. The primary decision maker is the contracting party or the public authority. It is right, therefore, that the standard of review generally adopted by the courts to the decisions of a contracting party should be no more demanding than the standard of review adopted in the judicial review of administrative action. The question is whether it should be any less demanding. The decided cases reveal an understandable reluctance to adopt the fully developed rigour of the principles of judicial review of administrative action in a contractual context. But at the same time they have struggled to articulate precisely what the difference might be. In Abu Dhabi National Tanker Co v Product Star Shipping Ltd (The Product Star) (No 2) [1993] 1 Lloyds Rep 397, 404, after contrasting the position in judicial review, Leggatt LJ explained that: The essential question is always whether the relevant power has been abused. Where A and B contract with each other to confer a discretion upon A, that does not render B subject to As uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably. That was in the context of a ship owners decision as to whether a port to which a vessel was directed was dangerous. In Paragon Finance plc v Nash [2001] EWCA Civ 1466, [2002] 1 WLR 685, the court had to consider whether there was any implied term limiting the power of a mortgagee to set interest rates under a variable rate mortgage. Dyson LJ had no difficulty in holding (at paras 32 to 36) that it was necessary, in order to give effect to the reasonable expectations of the parties, to imply a term that the power would not be exercised dishonestly, for an improper purpose, capriciously or arbitrarily. He went on to discuss whether there should also be a term that the power would not be exercised unreasonably. He concluded that there had been a somewhat reluctant extension of the implied term to include unreasonableness that is analogous to Wednesbury unreasonableness (paras 37 to 42). These authorities, together with Ludgate Insurance Co Ltd v Citibank NA [1998] Lloyds Rep IR 221, 239 240, and Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] EWCA Civ 1047, [2001] 2 All ER (Comm) 299, at paras 64, 67, 73, are helpfully summarised by Rix LJ in Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116, [2008] Bus LR 1304. In his conclusion, at para 66, he substitutes the more modern term irrationality for unreasonableness: It is plain from these authorities that a decision makers discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith, and genuineness, and the need for the absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused. Reasonableness and unreasonableness are also concepts deployed in this context, but only in a sense analogous to Wednesbury unreasonableness, not in the sense in which that expression is used when speaking of the duty to take reasonable care, or when otherwise deploying entirely objective criteria: as for instance when there might be an implication of a term requiring the fixing of a reasonable price, or a reasonable time. In the latter class of case, the concept of reasonableness is intended to be entirely mutual and thus guided by objective criteria. Laws LJ in the course of argument put the matter accurately, if I may respectfully agree, when he said that pursuant to the Wednesbury rationality test, the decision remains that of the decision maker, whereas on entirely objective criteria of reasonableness the decision maker becomes the court itself. The same point was made (albeit in a completely different context, and so obiter) by Lord Sumption in Hayes v Willoughby [2013] UKSC 17, [2013] 1 WLR 935, at para 14: Rationality is not the same as reasonableness. Reasonableness is an external, objective standard applied to the outcome of a persons thoughts or intentions. A test of rationality, by comparison, applies a minimum objective standard to the relevant persons mental processes. It imports a requirement of good faith, a requirement that there should be some logical connection between the evidence and the ostensible reasons for the decision, and (which will usually amount to the same thing) an absence of arbitrariness, of capriciousness or of reasoning so outrageous in its defiance of logic as to be perverse. (emphasis added) This is an obvious echo of the classic definition given by Lord Diplock when summarising the grounds of judicial review in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 410: By irrationality I mean what can by now be succinctly referred to as Wednesbury unreasonableness. 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. The problem with this formulation, which is highlighted in this case, is that it is not a precise rendition of the test of the reasonableness of an administrative decision which was adopted by Lord Greene MR in Associated Provincial Pictures Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 233 234. His test has two limbs: The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. The first limb focusses on the decision making process whether the right matters have been taken into account in reaching the decision. The second focusses upon its outcome whether even though the right things have been taken into account, the result is so outrageous that no reasonable decision maker could have reached it. The latter is often used as a shorthand for the Wednesbury principle, but without necessarily excluding the former. The parties in this case disagree as to whether the term to be implied into this contract includes both limbs. Mrs Braganza argues that the employer must keep within the four corners of the matters which they ought to consider, while the employer argues that its decision may only be impugned if it is a decision which no reasonable employer could have reached. Mrs Braganza can pray in aid the approach of Mocatta J in The Vainqueur Jos. He held that the common law principles applicable to the exercise of a contractual discretion include fairness, reasonableness, bona fides and absence of misdirection in law (p 574). He later quoted (p 575), without reservation, Lord Greenes summary of the public law concept of reasonableness. There is nothing on Mocatta Js judgment to suggest that only the second of those elements is applicable to the exercise of a contractual discretion. He did (at 574) contrast the contractual principles with the principles applicable to the exercise of a statutory discretion by Ministers of the Crown, but on the basis that, in addition, the Ministers decision had to be consistent with the objects and other provisions of the statute in question, citing Laker Airways Ltd v Department of Trade [1977] QB 643. On that point, on the other hand, in Hayes v Willoughby, just before the passage quoted in para 23 above, Lord Sumption stated that rationality has in recent years played an increasingly significant role in the law relating to contractual discretions, where the laws object is also to limit the decision maker to some relevant contractual purpose: [2013] 1 WLR 935, para 14. This is consistent with his earlier observations in British Telecommunications Plc v Telefnica O2 UK Ltd [2014] UKSC 42, [2014] Bus LR 765, at para 37: As a general rule, the scope of a contractual discretion will depend on the nature of the discretion and the construction of the language conferring it. But it is well established that in the absence of very clear language to the contrary, a contractual discretion must be exercised in good faith and not arbitrarily or capriciously [citing Abu Dhabi, Gan, and Paragon, above]. This will normally mean that it must be exercised consistently with its contractual purpose [citing Ludgate Insurance, above and Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459 (Lord Steyn), 461 (Lord Cooke of Thorndon)]. There are signs, therefore, that the contractual implied term is drawing closer and closer to the principles applicable in judicial review. The contractual cases do not in terms discuss whether both limbs of the Wednesbury test apply. However, in Gan Insurance, where the issue was the limits, if any, to the reinsurers power to withhold approval to the insureds agreement to settle a claim, Mance LJ first commented that what was proscribed was unreasonableness in the sense of conduct or a decision to which no reasonable person having the relevant discretion could have subscribed (para 64); but he concluded that any withholding of approval by reinsurers should take place in good faith after consideration of and on the basis of the facts giving rise to the particular claim and not with reference to considerations wholly extraneous to the subject matter of the particular reinsurance . (para 67). If it is part of a rational decision making process to exclude extraneous considerations, it is in my view also part of a rational decision making process to take into account those considerations which are obviously relevant to the decision in question. It is of the essence of Wednesbury reasonableness (or GCHQ rationality) review to consider the rationality of the decision making process rather than to concentrate upon the outcome. Concentrating on the outcome runs the risk that the court will substitute its own decision for that of the primary decision maker. It is clear, however, that unless the court can imply a term that the outcome be objectively reasonable for example, a reasonable price or a reasonable term the court will only imply a term that the decision making process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose. For my part, I would include both limbs of the Wednesbury formulation in the rationality test. Indeed, I understand Lord Neuberger (at para 103 of his judgment) and I to be agreed as to the nature of the test. But whatever term may be implied will depend upon the terms and the context of the particular contract involved. I would add to that Mocatta Js observation in The Vainqueur Jos, that it would be a mistake to expect [of a lay body] the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a court of law (577). Nor would some slight misdirection matter, at least if it were clear that, had the legal position been properly appreciated, the decision would have been the same. It may very well be that the same high standards of decision making ought not to be expected of most contractual decision makers as are expected of the modern state. However, it is unnecessary to reach a final conclusion on the precise extent to which an implied contractual term may differ from the principles applicable to judicial review of administrative action. Given that the question may arise in so many different contractual contexts, it may well be that no precise answer can be given. The particular context of this case is an employment contract, which, as Lord Hodge explains, is of a different character from an ordinary commercial contract. Any decision making function entrusted to the employer has to be exercised in accordance with the implied obligation of trust and confidence. This must be borne in mind in considering how the contractual decision maker should approach the question of whether a person has committed suicide. Teare J directed himself, in relation to his own decision as to the cause of Mr Braganzas disappearance, that before a finding of suicide is made there must be evidence of sufficient cogency commensurate with or proportionate to the seriousness of the finding (para 46), citing the observation of Watkins LJ in R v West London Coroner, Ex p Gray [1988] QB 467, 477 478, that suicide is still a drastic action which often leaves in its wake serious social, economic and other consequences. He also directed himself, following the House of Lords decision in The Popi M [1985] 1 WLR 948, 955 956, that, where two improbable causes are suggested, he was not bound to make a finding one way or another. I agree with Lord Neuberger, at para 100 of his judgment, that it is also perfectly proper for the employer to conclude that he or she is unable to form an opinion as to the cause of death. But the question is how he or she should go about making a positive finding of suicide. Longmore LJ pointed out that the direction based on Gray might itself be said to be a little outdated since the decisions in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 and In re B (Children) (Care Proceedings: Standard of Proof) [2009] AC 11, which have emphasised that in civil cases there is only one standard of proof, viz. the balance of probabilities (para 15). Those cases make it clear that there is not a sliding scale of probability to be applied, commensurate with the seriousness of the subject matter or the consequences of the decision. The only question is whether something is more likely than not to have happened. Lord Hoffmann put it thus in In re B at para 15: There is only one rule of law, namely that the occurrence of the fact in issue must be proved to have been more probable than not. Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to inherent probabilities. Some things are inherently a great deal less likely than others. The more unlikely something is, the more cogent must be the evidence required to persuade the decision maker that it has indeed happened. As Lord Nicholls explained in In re H, at 586, When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probabilities. Thus, for example, most parents do not sexually abuse their children. Cogent evidence is therefore required to establish that sexual abuse is more likely than not to have happened. But once it is clear that such abuse has happened, the threshold of incredulity has been surmounted, and the question of who was responsible can be answered on the balance of probabilities. Hence it is not the seriousness of the consequences of a finding of suicide which demands that there be cogent evidence to support it, but its inherent improbability. However, Longmore LJ also took the view that the employer did not have to approach the matter in this way. I respectfully disagree. The employer is entrusted with making a decision which has serious consequences for the family of a deceased employee. It deprives them of what would otherwise be a contractual right. There is no reason why the employer should not approach that decision in the same way that any other decision maker should do. On the contrary, in view of the special nature of the employment relationship, there is every reason why they should do so. Employers can reasonably be expected to inform themselves of the principles which are relevant to the decisions which they have to make. Employment law is complicated and demanding in many legal systems, but employers are expected to know it. They can also reasonably be expected to know how they should approach making the important decisions which they are required or empowered to make under the terms of the employment contract. In my view, a decision that an employee has committed suicide is not a rational or reasonable decision, in the terms discussed above, unless the employer has had it clearly in mind that suicide is such an improbability that cogent evidence is required to form the positive opinion that it has taken place. The employer now accepts that it is for him to show that the decision which it reached was a reasonable decision in the sense which is required by the contract. Application to the facts In my view, Mr Sullivan should not simply have accepted the view of the investigation team that suicide was the most likely explanation for Mr Braganzas disappearance. The team had been conducting their investigation for purposes which were different from the purpose of his decision. Their purpose was to see whether BPs systems could be improved. They could and did make recommendations about the steps to be taken to support officers who might be experiencing financial or emotional problems. Those recommendations were equally valid and sensible whether or not Mr Braganza had in fact committed suicide. 40. Although I would not have phrased the correct approach exactly as Teare J phrased it, in my view he was right to conclude (para 95) that the investigation teams report and conclusion could not be regarded as sufficiently cogent evidence to justify Mr Sullivan, and hence BP, in forming the positive opinion that he had committed suicide. No one suggests that his decision was arbitrary, capricious or perverse, but in my view it was unreasonable in the Wednesbury sense, having been formed without taking relevant matters into account. 43. I would therefore allow this appeal, with the result that Mrs Braganzas claim in contract (for the comparatively modest sum of US$230,265, albeit with interest) succeeds. I agree with Lady Hale that this appeal should be allowed. LORD HODGE: (with whom Lord Kerr agrees) 44. 45. For the sake of brevity I do not set out again the facts which Lady Hale and Lord Neuberger have summarised at paras 1 to 16 and 66 to 96 respectively. For the sake of simplicity I refer to the two BP companies involved in this appeal as BP without drawing distinctions between them, except in the next paragraph in which I identify Mr Braganzas employer. 46. Mr Renford Braganzas contract of employment entitled him to compensation in the form of a death in service benefit if he died in the employment of BP Maritime Services (Singapore) Pte Ltd, the second defendants (Clause 7.3.1). Any sum payable as compensation was to be paid to his nominated beneficiary, in this case his widow, the claimant and appellant. That entitlement was subject to Clause 7.6.3 which provided (so far as material) compensation for death shall not be payable if, in the opinion of the Company or its insurers, the death resulted from amongst other things, the Officers wilful act, default or misconduct 47. BP denied Mrs Braganza the compensation because it was of the opinion that Mr Braganza had committed suicide. That opinion, which Mr Sullivan reached on behalf of BP, was based on a report of the investigation team and his subsequent confirmation of his decision was based on the second report of that team after Mrs Braganza challenged the decision. As Lady Hale has shown in para 9, the teams conclusion that suicide was the most likely explanation for Mr Braganzas disappearance was based on six points which it set out as bullet points in its report. 48. The task which the investigation team and Mr Sullivan faced was, as Lord Neuberger says, to decide how an unlikely event, which undoubtedly occurred, was actually caused. As a result of the detailed investigations there were only two realistic possibilities: accident or suicide. 49. I am struck by the paucity and the insubstantial nature of the evidence from which BP inferred that Mr Braganza committed suicide. While the six points must be considered in aggregate, the only ones which seem to me to be capable of bearing any weight are (a) his lack of timely record keeping on his last voyage, (b) the evidence in Mrs Braganzas emails of his financial worries since his family had settled in Canada and (c) his concerns about the state of repair of his ship and the workload which fell on him as chief engineer as a result. Evidence of some moodiness during the voyage and irritation over the refusal of a bonus added little to the picture. I agree with Lady Hales description of the six points on which the investigation team relied as straws in the wind: para 40. Unsurprisingly, the team could not rule out the possibility that Mr Braganza had gone on deck for some work related reason and that he had fallen into the sea by accident. 50. Against the conclusion which BP reached is the inherent improbability of suicide. Mr Braganza had no history of depression or mental disorder. There was no evidence that he had spoken to anyone about suicide. On 13 February 2009, before commencing his last voyage, he had undergone a medical examination and was pronounced physically and psychologically fit. His colleagues who saw him in the 36 hours before his disappearance expressed no concerns about his appearance or behaviour. The ships master, who was the last person to see him alive, also had no concerns about his demeanour at 0030 hours when they discussed the arrangements for the planned inspection and repairs which were scheduled for the following morning. Mr Braganza left no suicide note or message that indicated any intention to kill himself. Further, he and his wife were devout Roman Catholics, for whom suicide is a mortal sin. 51. Accordingly, I readily understand Teare Js conclusion, in the part of his judgment in which he considered Mrs Braganzas claim in tort, that the evidence before the court was not sufficiently cogent to warrant a finding of suicide on the balance of probabilities. But the issue in this case is not what a court would decide if determining the matter at first instance. As Teare J recognised later in his judgment when he addressed Mrs Braganzas claim in contract, the decision maker was BP. The principal issue is: when is the court entitled to intervene in the exercise of a contractual discretion?. 52. As Lady Hale has shown (paras 18 31), the court is not entitled to substitute its own view of what is a reasonable decision for that of the person who is charged with making the decision; it conducts a rationality review. In Clark v Nomura International Plc [2000] IRLR 766, a case concerning an employees entitlement to a discretionary bonus, Burton J stated (at para 40): the right test is one of irrationality or perversity (of which caprice or capriciousness would be a good example) ie that no reasonable employer would have exercised his discretion in this way. 53. Like Lady Hale, with whom Lord Neuberger agrees on this matter (para 103), I think that it is difficult to treat as rational the product of a process of reasoning if that process is flawed by the taking into consideration of an irrelevant matter or the failure to consider a relevant matter. While the courts have not as yet spoken with one voice, I agree that, in reviewing at least some contractual discretionary decisions, the court should address both limbs of Lord Greenes test in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 233 234. In my view it is clearly appropriate to do so in contracts of employment which have specialties that do not normally exist in commercial contracts. In Johnson v Unisys Ltd [2003] 1 AC 518 (at para 20) Lord Steyn stated: It is no longer right to equate a contract of employment with commercial contracts. One possible way of describing a contract of employment in modern terms is as a relational contract. 54. Similarly, in Keen v Commerzbank AG [2007] ICR 623, Mummery LJ stated (at para 43): Employment is a personal relationship. Its dynamics differ significantly from those of business deals and of state treatment of its citizens. In general there is an implied mutual duty of trust and confidence between employer and employee. Thus it is the duty on the part of an employer to preserve the trust and confidence which an employee should have in him. This affects, or should affect, the way in which an employer normally treats his employee. It would not be correct to treat that duty on the employer as flying off at the moment of the employees death so as to free the employer from the constraints of that duty when it determines whether the nominated beneficiary is entitled to the contractual death in service benefit. While the duty as an inherent feature of the relationship of employer and employee does not survive the ending of the relationship, such as by dismissal or the expiry of a contractual period of employment, the death in service compensation was part of his contractual benefits, to which his nominated beneficiary was entitled unless BP were satisfied that the death was the result of his wilful act. For the employer to behave otherwise than in accordance with that duty would be to betray the trust of the deceased employee. 55. The personal relationship which employment involves may justify a more intense scrutiny of the employers decision making process than would be appropriate in some commercial contracts. 57. 56. The scope for such scrutiny differs according to the nature of the decision which an employer makes. In this case Clause 7 gave the employee a prima facie entitlement to the death benefit unless BP could satisfy itself of a factual circumstance which excluded the benefit. The nature of the exercise which BP had to undertake in deciding the cause of death was very different from the assessment of whether an employee was entitled to a discretionary bonus, which is an exercise that involves a qualitative judgement of the employees performance. In cases such as Clark v Nomura International Plc, Keen v Commerzbank AG and Horkulak v Cantor Fitzgerald International [2005] ICR 402 the courts have reviewed contractual decisions on the grant of performance related bonuses where there were no specific criteria of performance or established formulae for calculating a bonus. In such cases the employee is entitled to a bona fide and rational exercise by the employer of its discretion. The courts are charged with enforcing that entitlement but there is little scope for intensive scrutiny of the decision making process. The courts are in a much better position to review the good faith and rationality of the decision making process where the issue is whether or not a state of fact existed, such as whether an employees wilful act caused his death. The decision of the employer is not a judicial determination and the court cannot expect judicial reasoning. But I see no reason why an employers decision making should be subject to scrutiny that is any less intense than that which the court applies to the decision of a public authority which is charged with making a finding of fact. A large company such as BP is in a position to support its officials with legal and other advisory services and should be able to face such scrutiny. 58. The investigation team and Mr Sullivan appear not to have considered the real possibility of accident if Mr Braganza had a work related reason to be on deck after dawn, namely to check the weather conditions which would affect the planned replacement of the cooling water jacket, and had acted carelessly while standing at or even on the deck railings. While there was evidence that Mr Braganza was generally very conscious of safety, people do unexpected things and unforeseen accidents occur; accidents are often difficult to predict, as Teare J stated at para 56. 59. The focus of the teams second report was on responding to Mrs Braganzas suggestion that her husband might have been washed overboard or slipped while inspecting engine spares on the deck and fallen over or between the railings as a result of the rolling of the ship. The team found no evidence in support of such an accident. The weather conditions did not support such hypotheses. The railings were in good repair and adequate to prevent someone falling on the deck and sliding overboard. Those railings would also protect someone from falling overboard unless they acted carelessly. But if Mr Braganza had behaved carelessly at the railings, there would in all probability have been no evidence of the cause of his fall which could be set against the exiguous evidence pointing to suicide. 60. Given the improbability of suicide in this case, I agree with Lady Hale (para 36 above) there had to be cogent evidence to overcome that improbability. Not only do I not see that evidence but also I do not detect any consideration of both the possibility of Mr Braganza having acted carelessly while at the railings and that there would in all probability be no evidence of such behaviour. On those bases the appeal succeeds. 61. There is a further point. I do not rely on it in reaching my decision because it was not argued in this appeal and it may merit further argument in a suitable case. I think that the employers obligation of trust and confidence may provide a further reason for requiring cogent evidence. A finding that an employee has committed suicide carries a stigma for the spouse of the deceased employee. Teare J in his judgment (at para 46) cited Watkins LJ in R v West London Coroner, Ex p Gray [1988] QB 467 (at pp 477 478) where he stated that suicide is a drastic action which often leaves in its wake serious social, economic and other consequences. I accept that there is no logical or necessary connection between seriousness and probability In re B (Children) [2009] AC 11, Lady Hale at para 72. In many cases the court or a lay decision maker may have to decide on very thin evidence whether an event occurred on a balance of probability. But it may not be appropriate to do so in every context. Because employment is a relational contract, an employer may require cogent evidence before it makes a finding that has such consequences for an employee or his family, including the loss of the death in service benefit. I am inclined to think that it is consistent with the duty of trust and confidence that where, as here, the evidence is exiguous, the employer should ask itself whether there was evidence of sufficient quality to justify the finding, and when there is no cogent evidence, it should refrain from making a positive finding as to the cause of death. Unlike a judge in civil disputes or in family justice cases, an employer can sit on the fence; it does not have to find a cause of death if one is not clear. 63. 62. Whether or not the obligation of trust and confidence imposes this constraint on an employer, I am satisfied that there was not sufficient evidence of suicide in this case to outweigh its inherent improbability and Teare J was justified in so finding. Absent cogent evidence to support it, Mr Sullivan and thus BP should not have made a finding of suicide. I do not question the good faith of the investigation team, who carried out a thorough investigation under a different remit, or of Mr Sullivan, who made the positive finding on behalf of BP. Nor do I think that BP acted unfairly in the manner it carried out the task. But, like Lady Hale and Teare J, I do not think that the report of the investigation team gave Mr Sullivan the evidential basis for forming the positive opinion that Mr Braganza had committed suicide. I would therefore allow the appeal. 64. LORD NEUBERGER: (with whom Lord Wilson agrees) (dissenting) 65. The ultimate issue on this appeal is whether Niloufer Braganza, the widow of Renford Braganza, is disentitled from obtaining a death in service payment from his employer (whom I will refer to as BP) following his death at sea, on the ground that his death was caused by suicide. In agreement with the Court of Appeal, and respectfully differing from the majority of the court and from Teare J, I consider that Mrs Braganza is disentitled from obtaining the benefit in question. The basic facts 66. In order to explain my reasons for reaching this conclusion, I will set out the significant facts as I see them, although I am conscious that this means a degree of overlap with Lady Hales judgment. Mr Braganza had been employed by BP since 2004 as Chief Engineer. His terms of employment were set out in a contract, of which only parts of clause 7 (Clause 7) are relevant for present purposes. The effect of clause 7.3 was that, in the event of his death whilst in the employment of [BP], Mr Braganzas nominated beneficiary (in this case Mrs Braganza, the claimant in these proceedings) would be entitled to compensation equal to three times [his] annual salary. However, this entitlement was subject to certain exceptions. One of those exceptions was set out in clause 7.6.3 which stipulated that no such compensation would be payable if, inter alia, in the opinion of [BP] or its insurers, the death resulted from [his] wilful act, default or misconduct whether at sea or ashore . 67. On 9 February 2009, Mr Braganza joined the MV British Unity, a 183 metre long, 46,803 mt deadweight oil tanker, at Gibraltar. Unusually, and contrary to standard practice, he was not given a briefing, and in particular he was not told that the vessel needed substantial repairs. Major work was carried out while the vessel was in Ferrol, Spain between 18 and 22 April 2009, an operation for which Mr Braganza was responsible, albeit under supervision. After leaving Ferrol, further problems came to light and the vessel berthed in Falmouth for work and then went on to Brofjorden in Sweden for further work. The vessel was then loaded with unleaded gasoline, and set sail for Jebel Ali, but was then ordered to divert to New York. On 11 May 2009, Mr Braganza was lost overboard when the vessel was in the mid North Atlantic, en route for New York, between 01.00 (when he sent an email) and 07.00 (when his cabin was seen to be empty). The relevant background facts 68. Mr Braganza was an able and experienced engineer, a staunch Roman Catholic and a strong family man, with a wife and two children, and he telephoned his family when he was at sea every two or three days. He had been found to be physically and psychologically fit when examined in February 2009. 69. During the 36 or so hours before his disappearance, Mr Braganza was described as normal by those who saw him. On the evening of 9 May 2009, he was the caller in a game of bingo played by a number of the crew members, and, according to the Chief Officer, he made the party a lot of fun. He had discussions for around ninety minutes on 10 May with the Master and the second engineer about the replacement of a cooling water jacket (CWJ) which cooled one of the six cylinders of the vessels diesel engine, which involved the engines being turned off and which required reasonably clement weather. Mr Braganza thought that this needed doing, and it was agreed that it would be carried out next day, weather permitting. After meeting crew members and watching a comedy film with them, he discussed the proposed operation and the likely weather conditions in his cabin with the Master at about 23.30 for rather over an hour. At 23.24, while the Master was with him, he emailed an engineering superintendent about the proposed operation, which was approved in an email nine minutes later [i]f weather and schedule permits. Before the Master left his cabin, Mr Braganza checked the Indian Premier League cricket results on his computer. At 01.00 on 11 May, Mr Braganza emailed the second engineer concerning entries in the log book. He was not seen alive again. 70. While he was Chief Engineer on the MV British Unity, Mr Braganza was described by some of those on board as being withdrawn and staring into space, in contrast with his happy character noted on previous voyages although he was, as mentioned, in good humour on 9 May. During the carrying out of the works at Ferrol in April, Mr Braganzas skills did not impress the BP superintendent, who told him how he might improve them. 71. On 24 March 2009, Mr Braganza was advised by the Captain of the British Unity that he had been awarded a bonus of $1688, but on 18 April, the Master was told to deduct this sum from Mr Braganzas salary as he had had a break in service in 2008, which disentitled him from having a bonus. This was communicated on the same day to Mr Braganza, who immediately challenged the deduction, but his challenge was rejected by BP on 7 May. 72. As Chief Engineer, Mr Braganza was responsible for writing up the daily orders he gave his staff in the Chief Engineers Order Book. The last entry which he made was on 18 April 2009, when the vessel was still at berth, and when he was not under any obligation to make any entries. However, from 22 April 2009, when the vessel left Ferrol, he was obliged to make such entries, but he made none at any time thereafter. It is also appropriate to refer to emails which were sent to Mr Braganza by his wife after he had joined the British Unity. According to the evidence of Mrs Braganza to Teare J, Mr Braganza was worried about the cost of living in Toronto, where he had moved with his family from India in July 2008. The two had had telephone discussions on 13, 14 and 15 February, and in an email on the last of those dates, his wife had emailed Mr Braganza saying that she thank[ed] God for what we have and what the last seven months have done to us, and encouraging him to make a decision to let go of anything that is holding you down. Again according to the evidence of Mrs Braganza, Mr Braganza was also concerned about the amount of work that needed to be done to the vessel, and on 17 February, his wife emailed him saying please do not break your head about getting this opportunity on Unity. Just relax, 73. think this is like any other ship. So please do not stress yourself thinking of unnecessary stuff. However, it appears that Mr Braganza continued to worry about money and the repairs. 74. On 27 March, in what strikes me as a particularly relevant email, Mrs Braganza asked her husband not to worry, saying that everything will work out just fine and that I really cannot figure out what has shaken you out so much that you seem to be so afraid of life, adding If we keep crying over spilt milk we will not be able to go on with life. And, on 6 May, she emailed him, begging him to be happy for whatever we have and expressing concern that In Toronto you seem[ed] sad and Now on the ship too you do not seem happy. She also said that you are thinking too much about the future and that is eating you. She added that she wished he could share [her] enthusiasm, asking what are you frightened about?. The Reports commissioned by BP 75. After Mr Braganza had disappeared, BP appointed a five person investigation team (the team), pursuant to its Group Defined Practice, which applies to any fatality on board a vessel. The team consisted of a Vice President in the Engineering, Refining and Logistics Technology department, a Health Safety Security and Environment Manager, a Marine Incident Investigator, a Marine Standards Superintendent, and a Fleet Offshore Marine Services Superintendent. 76. The members of the team boarded the vessel on 18 May 2009 when it arrived in New York, and carried out an investigation, and produced their detailed Fatal Incident Report (the First Report) on 17 September 2009. According to the uncontradicted evidence, the First Report had been produced after carrying out careful inspections, interviewing 54 witnesses, and looking at hundreds of documents. 77. The terms of reference were set out at the start of the First Report. They were to investigate the relevant circumstances leading up to the loss of Mr Braganza, to identify if possible the root causes of the incident, [a]s a result [to] identify any changes or improvements in BPs safety systems, and to identify any common factors with another incident on a different vessel. The First Report then set out some other formal information. 78. The First Report then summarised its conclusions. After referring to the teams in depth investigation, the summary stated that the team could not conclude for certain the root cause of the incident. Then, after ruling out certain other possibilities, the Findings concluded by saying that the team considers the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. The First Report then set out certain recommendations for the future. 79. The First Report next recited the history leading up to the tragic death of Mr Braganza in some detail, including the need for the vessels repairs, the experience of Mr Braganza, and such details of the incident as the team could identify, including the response to his disappearance from the vessel. The First Report then explained the investigatory steps which the team had taken, including interviewing those on board, interviewing other people who might have relevant information, photographing and logging documents, inspecting the vessel, collecting other relevant information and analysing all data. The First Report went on to consider and reject the possibilities of Hiding on board, Collec[tion] by a 3rd party vessel or Fall from vessel due to horseplay, altercation or foul play. 80. The First Report then addressed Accidental fall from vessel, and while the team found [n]o evidence of sub standard or unsafe structures, they considered that slipping overboard cannot be discounted although there was no evidence to support it. The report then considered the possibility of suicide, and mentioned the matters referred to in paras 69 74 above, namely Mr Braganzas withdrawn character, his concerns about his finances, his worry about the vessels poor repair, the emails from his wife, the criticism he received at Ferrol, and the withdrawal of his bonus. The First Report then stated that, although Mr Braganzas state of mind cannot be known, it was possible that he jumped overboard. Under the heading of Findings, the First Report then repeated the conclusions contained at the start, including this: the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life. 81. Mr Sullivan, BPs General Manager, was appointed by BP to address the cause of Mr Braganzas death for the purpose of clause 7. He considered the First Report and accepted the conclusion reached by the team. Accordingly, he decided that the death in service benefits under clause 7.3 were not payable to Mrs Braganza, and this was duly communicated to her. 82. Mrs Braganza then challenged the teams rejection of the possibility that Mr Braganzas death was caused by an accident, on the basis that, for the purpose of seeing whether the CWJ could be replaced, he could well have gone on deck to see the state of the weather and fallen overboard. Accordingly, Mrs Braganza contended that the right conclusion was that her late husband had died as a result of an accident. She provided a statement to the team, which then reconsidered the matter. On 12 July 2011, the team produced a Supplemental Report (the Second Report) in which they adhered to their conclusion. 83. The Second Report referred to many of the findings of the First Report. It also observed that the state of the weather during the night of the 10 May and the morning of the 11 May was ever improving and could be considered good weather mid Atlantic, which rendered it improbable that Mr Braganza had been washed overboard or had fallen on deck due to a roll. It stated that, as a senior and respected Chief Engineer, and reported as being very safety conscious by his ship mates, Mr Braganza is highly unlikely to have ventured out on deck during the hours of darkness and certainly not without informing the officer of the watch on the bridge. The Second Report went on to point out that there would have been no reason for his checking on the weather, because that assessment would in any event be carried out from the bridge by the Master and/or the [Chief Officer] who was responsible for the task. The report also said that the safety standards on board impressed those of the team visiting a BP ship for the first time. A little later, the team stated that it would be extremely unlikely that a person could trip, slip or fall in such a manner so as to fall overboard while carrying out normal shipboard duties and in the weather conditions which were known to prevail at that time. The Second Report also stated that the team were not aware of any previous cases within BP where weather conditions or rolling of the vessel had caused anyone to go overboard accidentally (emphasis in the original). The report also stated that the team had considered the statement of Mrs Braganza dated May 2011 and that the contents do not affect the teams conclusions. 84. The Second Report went on to say that the team considered that the scenario of C/E Braganza going outside to check on equipment during the night or early morning and suffering a fall that took him over the side of the vessel, [to have been] unlikely in the extreme. The report then turned to the possibility of suicide and repeated the points which gave some support for that notion, which were summarised in these terms: there seemed a lot of independent and reported (although circumstantial) evidence indicating a depressed state of mind combined with personal problems. The lack of a suicide note, it said, cannot be taken as a firm indication that suicide was not the cause of his disappearance. 85. The Second Report therefore explained that the team assess[ed] suicide as the most likely scenario, although equally the investigation team cannot firmly conclude what happened to C/E Braganza on the night of the incident (emphasis in the original). The team also explained that they did not reach this conclusion [sc that Mr Braganza committed suicide] on the basis of exclusion ie because we could not find any other cause as being likely or possible. They added that there was no single piece of evidence on which [the team] concluded suicide, and that it was very much a collection of a number of issues and the general feeling based on this evidence that C/E Braganza intended to take his own life. 86. Following Mrs Braganzas contentions and the provision of the Second Report, Mr Sullivan reconsidered his opinion in the light of those contentions and that report, and remained of the view that Mr Braganzas death resulted from suicide. As he explained in the subsequent court proceedings, he took the view that there was a reasonable basis on which to conclude that deliberate suicide was the most likely scenario, which was a conclusion reached on the basis that there was positive evidence that made deliberate suicide the most probable cause of death. He also said that he did not arrive at this conclusion by a process of elimination. The decisions in the courts below 87. Mrs Braganza issued proceedings against BP claiming (i) damages under the Fatal Accidents Act 1976 on the ground that BP was in breach of its duty of care to Mr Braganza (the first claim), and (ii) that BPs opinion as to the cause of Mr Braganzas death, based as it was on the First and Second Reports (the Reports) was flawed and ought to be declared invalid (the second claim). The trial lasted eight days before Teare J, who heard a number of witnesses primarily directed to the first claim. Having heard argument, he gave a reserved judgment in favour of BP on the first claim and in favour of Mrs Braganza on the second claim [2012] EWHC 1423 (Comm). The judgment included some detailed findings of fact and conclusions in relation to Mr Braganzas death, because of the first claim, namely that under the 1976 Act. In paras 54 and 57 of his judgment, the judge concluded that, while there was a real possibility that Mr Braganza went out on deck to assess the weather himself, he was not persuaded that it is probable that he did so, and he concluded that while there was a real, not a fanciful, possibility that Mr Braganza fell overboard, it was not probable that he did so. In para 58, the judge said that there was also a real, not a fanciful, possibility that he committed suicide. 88. 89. The judge therefore concluded that Mrs Braganzas claim under the 1976 Act failed, as the onus was on her to show that her husbands death was accidental para 61. Although it was not necessary to do so, the judge went on in paras 64 65 to hold that, even if she had succeeded in establishing an accident, Mrs Braganzas claim under the 1976 Act would have failed on the additional grounds that she had failed to prove breach of duty by BP or causation. 90. The judge then turned to the second claim, namely Mrs Braganzas challenge to BPs opinion under clause 7.6.3 that Mr Braganza committed suicide, and concluded that Mr Sullivan had not properly directed himself before forming the opinion that Mr Braganza had committed suicide. In particular, in para 94, Teare J said that the team: did not direct itself that before making a finding of suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide. This is understandable in circumstances where the purpose of its investigation focussed upon whether there were any BP systems had failed and to make recommendations to improve BPs systems. [T]he teams remit did not include considering whether the Claimant should receive any death in service benefit pursuant to Mr Braganza's contract of employment. However, the findings of the team were adopted by Mr Sullivan when forming BPs opinion for the purposes of clause 7.6.3 of the contract of employment. There is no evidence that he directed himself that before forming the opinion that Mr Braganza committed suicide there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide. It is unlikely that he did. This was required because the consequence of forming that opinion was that Mr Braganzas widow would be deprived of the death benefits under her husband's contract of employment. Fairness required that BP and in particular Mr Sullivan should have been properly directed in that regard. 91. Teare J expanded on this in paras 96 97 in these terms: The Investigation Team, and hence Mr. Sullivan, failed to take into account the real possibility that Mr. Braganza went out onto deck in order to check the weather to see whether it was safe to carry out the planned work. The existence of a real possibility that Mr. Braganza went out on deck to check the weather is, in my judgment, a relevant matter to take into account when considering whether suicide has been shown to [be] more likely than not. The [teams] report strongly suggests that this was not taken into account. 92. The judge then went on to reject various other criticisms of the Reports, namely the lack of any psychiatric expertise (irrelevant as BP did not suggest that Mr Braganza suffered from a psychiatric illness), lack of engineering expertise (irrelevant to the issues which the team had to decide), and the fact that the team divided up to hear evidence (there was no requirement that they heard all the evidence together). The judge also considered and accepted some of Mrs Braganzas criticisms about the findings made by the team (and the more important examples are given by Lady Hale in para 9(1), (2) and (6) above), but he did not base his decision in favour of Mrs Braganza on these criticisms (para 120). 93. One further criticism raised on behalf of Mrs Braganza before the judge against the opinion formed by Mr Sullivan is worth mentioning, namely that neither the team nor Mr Sullivan had interviewed Mrs Braganza. The Judge thought that in principle fairness did require her to be interviewed, although he accepted Mr Sullivans explanation that he did not want to intrude unnecessarily into the familys grief. However, given that Mrs Braganza had the opportunity to comment on the First Report and did not offer any comment in relation to the matters the team relied on to justify its finding of suicide, the Judge rejected her case on this point. In these circumstances, the Judge effectively set aside the opinion of Mr Sullivan on behalf of BP that Mr Braganza had committed suicide, and determined that Mrs Braganza was entitled to the death in service benefit under clause 7.3, and gave judgment in her favour in the sum of $230,265 with interest. 94. 95. BP appealed against the judgment, and the Court of Appeal, for reasons given in a judgment given by Longmore LJ, with which Rimer and Tomlinson LJJ agreed, allowed its appeal [2013] EWCA Civ 230. Longmore LJ disagreed with the notion that Mr Sullivan (or the team) should have directed himself (or themselves) that there should be cogent evidence commensurate with or proportionate to the seriousness of a finding of suicide, on the ground that it was unreasonable to expect him (or them) to take such an approach (paras 19 20). Longmore LJ then went to explain that that was not necessarily the end of the matter, as [t]he relevant opinion still has to be reasonable. However, he disagreed with Teare Js view that the team did not take into account the fact that Mr Braganza might have had legitimate (non suicidal) reasons for being on deck. Longmore LJ also said that, even if the team had failed to take that possibility into account, it would not render its conclusion unreasonable, given the absence of a mechanism explaining how he could accidentally fall overboard para 22. 96. The Court of Appeal also considered the various minor items of evidence relied on by the team and referred to in para 92 above. They considered that the Judge had adopted too rigid a test in relation to some of those matters, but as the Judge had not relied on them to justify his conclusion, that aspect took matters no further. The three lines of attack raised on behalf of Mrs Braganza 97. Miss Belinda Bucknall QC, on behalf of Mrs Braganza, raised three lines of argument in support of her contention that this court should set aside the order of the Court of Appeal and restore Teare Js order. First, she contended that the Court of Appeal did not appear to have appreciated that it should not have interfered with the Judges conclusion, given that he was the trial judge, who had heard the witnesses and reached a fact sensitive conclusion. In my view, that contention is not well founded, because it confuses the judges role when he was deciding what in para 87 above I have called the first claim, namely whether BP had been in breach of duty, with his role when considering the second claim, namely whether BPs opinion under clause 7.6.3, based on the two Reports, should be set aside. When ruling on the first claim, the Judge was indeed the primary finder of fact, and it would only be if he had gone seriously wrong (eg if he had come to a conclusion which no reasonable judge could have come to, or made a demonstrable error such as ignoring a significant relevant piece of evidence) on a factual issue that an appeal court could properly have reversed his conclusion. However, the position on the second claim was entirely different: far from being the primary finder of fact, Teare J was carrying out a reviewing function of the two Reports, prepared by the team, and it was the team, or more precisely Mr Sullivan (who relied on the two Reports in forming his opinion), not the Judge, who represented the primary finder of fact. 98. Miss Bucknalls second line of attack was based on a number of alleged errors in the two Reports, which are briefly referred to in para 92 above. Although I agree with some of them, I do not accept all the criticisms which were accepted by the Judge. However, it is unnecessary to discuss this aspect further, as I agree with the Judge and the Court of Appeal that the mistakes could not possibly justify challenging the conclusion reached in the two Reports. It appears to me to be fanciful to think that, if all of them had been pointed out to the team and corrected, it could conceivably have resulted in the team reaching any different conclusion from that which they did. Just as minor errors in a full and careful judgment do not justify interfering with a judgment, so it is with minor errors in a report which may have legal effect. To hold otherwise would be wrong in principle, and it would serve to encourage unmeritorious appeals and to discourage full, considered and informative reports and judgments. Of course, different considerations apply where the error of fact might well have affected the outcome. 99. The third line of attack raised by Miss Bucknall was very similar to the Judges reasoning for rejecting Mr Sullivans reliance on the two reports as set out in para 94 of his judgment, namely that the basis for determining that Mr Braganza committed suicide was too flimsy to justify such a conclusion, at least by Mr Sullivan. That argument merits much fuller consideration, but, before turning to consider it, it is convenient to address the appropriate approach which the court should take to a contention such as that raised by Mrs Braganzas second claim. The proper approach to Mr Sullivans opinion 100. In some circumstances, it may be that the cause of an officers death is very difficult to determine. In such a case, the exercise envisaged in clause 7.6.3 does not require the person charged with carrying out the enquiry to form an opinion. It is perfectly proper for that person to conclude that he or she is unable to form an opinion as to the cause of the death in question. Clause 7.6.3 provides for an exception to BPs liability to pay compensation under clause 7.3, and if it is impossible for the person who is charged with forming an opinion under clause 7.6.3 to come to a conclusion, then BP must pay the compensation. 101. A second point, which requires a little more exegesis, arises from the fact that the person who is given the primary duty of determining the cause of death under clause 7.6.3 is BP or its insurers (and for present purposes one can ignore the reference to the insurers). If a provision such as clause 7.6.3 does not specify how the issue is to be determined, it would be for a judge to decide it as the primary fact finder. Save where for some reason BP cannot or refuses to consider the cause of death, the courts only have a role to play once BP forms an opinion on the issue and an interested party seeks to challenge the opinion as happened in this case. 102. There was some discussion as to the standard which the court should expect of the decision maker or opinion former in such circumstances. That question was fully considered by Rix LJ in Socimer International Bank Ltd v Standard Bank Ltd [2008] EWCA Civ 116, paras 60 66. He began by describing the issue as arising When a contract allocates only to one party a power to make decisions under the contract which may have an effect on both parties, and, after considering a number of previous authorities, he concluded: [A] decision makers discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith, and genuineness, and the need for the absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused. Reasonableness and unreasonableness are also concepts deployed in this context, but only in a sense analogous to Wednesbury unreasonableness, not in the sense in which that expression is used when speaking of the duty to take reasonable care, or when otherwise deploying entirely objective criteria: as for instance when there might be an implication of a term requiring the fixing of a reasonable price, or a reasonable time. Lord Justice Laws in the course of argument put the matter accurately when he said that pursuant to the Wednesbury rationality test, the decision remains that of the decision maker, whereas on entirely objective criteria of reasonableness the decision maker becomes the court itself. 103. Like Lady Hale, I consider that there is considerable force in the notion that this approach is, and at any rate should be, the same as the approach which domestic courts adopt to a decision of the executive, as described in the judicial observations which she quotes in paras 23 and 24 above (as indeed is reflected by the reference to the Wednesbury decision in the passage I have quoted from Rix LJ). I do not think that there is any inconsistency of approach between Lady Hale and Lord Hodge or myself in this connection. 104. However, a third point I should mention does concern a point of difference between us. It is best expressed by reference to Lord Hodges statement that contracts of employment have specialties that do not normally exist in commercial contracts, which he discusses in para 54 57. It appears to me questionable whether the special implied mutual duty of trust and confidence survived the death of Mr Braganza, but I accept that there is a powerful case for contending that it did, at least for present purposes. However, I do not think it necessary to decide the point, because I fail to see how it assists Mrs Braganzas case. Once it is accepted that BP had to carry out the investigation with honesty, good faith, and genuineness and had to avoid arbitrariness, capriciousness, perversity and irrationality, I do not see what trust and confidence add. I find it difficult to accept that trust and confidence would require more than what in a normal commercial context would be expected, either of BP when carrying out the investigation, or of the court when scrutinising the investigation and its results. Either the investigation was properly carried out or it was not, either there was enough evidence to justify the conclusion reached by Mr Sullivan or there was not, and either the reasoning which led to the conclusion was defensible or it was not. Accordingly, as I see it, the duty of trust and confidence is simply irrelevant to deciding that question. 105. A fourth point is also worth mentioning. A court considering a decision such as that reached in this case by the team or by Mr Sullivan should bear in mind the fact that it is performing a reviewing function, and, as I have already mentioned, not an originating fact finding function. The courts approach should therefore be similar to that of an appellate court reviewing a trial judges decision. In this case, the team, and then Mr Sullivan on behalf of BP, were entrusted with forming a view on a point of fact, namely how Mr Braganza died. As Lord Hoffmann pointed out in Biogen Inc v Medeva PLC [1997] RPC 1, 45, albeit in connection with a trial judges decision, this is a kind of jury question and should be treated with appropriate respect by an appellate court. And that is, in my view, at least as true where the parties have agreed by whom the issue should be determined. 106. Lord Hoffmann then explained that [t]he need for appellate caution in reversing the trial judges evaluation of the facts is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. He continued: [the judges] expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance of which time and language do not permit exact expression, but which may play an important part in the judges overall valuation. I would add that (i) it cannot be right to expect a higher standard from non lawyer decision makers than from a judge, and (ii) the respect to be shown to the decision makers determination may often be greater when it is that of a person or people with relevant expertise or experience than when it is that of a judge. Was the opinion that Mr Braganza committed suicide unreasonable? 107. One would have to be unusually stony hearted not to hope that a way could be found to ensure that, having suffered the terrible blow of losing her husband, Mrs Braganza could be spared the additional blows of an inquiry concluding that he had killed himself and the deprivation of a death in service benefit. However, it is the most fundamental duty of a judge to apply the law, even if it sometimes leads to hard consequences in the circumstances of a particular case. 108. In my view, the position in this case is, in summary, as follows. As the First Report made clear (see para 77 above), BP appointed a team of experienced people from different disciplines specifically to form a view as to how Mr Braganza had died, the team carried out what appears to have been a very thorough investigation (see para 78 above), and produced a full and meticulous report in which they expressed themselves in moderate and considered terms, and in which they concluded that, while Mr Braganza could have suffered an accident, that was very unlikely, and that the probable cause of his death was suicide (see paras 79 81 above). They then carefully reconsidered that conclusion following a request from Mrs Braganza, and, sadly for her, confirmed it in a further carefully considered report (paras 83 85 above). When Mr Sullivan was instructed by BP to consider the cause of Mr Braganzas death for the purpose of clause 7, it was entirely reasonable for him, in the light of that background to consider the First Report and adopt its conclusions, and, when the First Report was challenged, to readdress the matter and to consider the Second Report and adopt its conclusions. 109. However, it is said that Mr Sullivans opinion is flawed because of a combination of factors. When analysed, it appears to me that those factors may be summarised as follows: a) It was inappropriate for Mr Sullivan simply to rely on the Reports, as they were prepared for a different purpose; b) A finding that a person committed suicide amounts to an inherently improbable, serious or damaging conclusion which required more cogent evidence than was available; c) Mr Braganza exhibited no signs that he was depressed or had suicidal intentions during the 24 or 36 hours prior to his death; d) The consequence of Mr Sullivan concluding that Mr Braganzas death was caused by suicide was so severe, namely, the loss of a death in service benefit, that it was not justified on the evidence; e) Mr Sullivan ought at least have directed himself as to the inherent unlikelihood of Mr Braganza having committed suicide; f) The team, and therefore Mr Sullivan, failed to take into account the fact that Mr Braganza had good reason to go on deck in the early morning; g) Mr Sullivans failure to ask Mrs Braganza about the emails impugned his opinion. I shall take those arguments in turn. 110. As to argument (a), it was, in my view, neither unreasonable nor inappropriate for Mr Sullivan, when forming his opinion for the purposes of clause 7.3, to adopt the conclusion reached in a carefully considered report prepared by a group, such as the team, on behalf of BP. I am unpersuaded by the argument that the team was concerned with a different issue from Mr Sullivan. The team was specifically instructed to investigate the relevant circumstances and root causes of Mr Braganzas disappearance, and they clearly could only conclude that it was suicide if that was, in their view, the likely cause, ie on the balance of probabilities, after fairly considering all the evidence. Precisely the same applies to the forming of Mr Sullivans opinion as to the cause of Mr Braganzas death. Further, the fact that the team was investigating the issue for a purpose different from Mr Sullivan is nothing to the point. Even if one assumes (which I do not accept) that the sole purpose of the team was to make recommendations as to what steps should be taken by BP to improve safety on board their vessels, it was still essential for them to assess, if they could, just how Mr Braganza had died. 111. If the team had concluded in their report that Mr Braganza had fallen overboard as a result of an accident or that it was impossible to say how Mr Braganza had died, it could not seriously be suggested that Mr Sullivan could not have adopted that conclusion. Indeed, to many people, it would have been a little surprising if, in the absence of new facts not known to the team or plain error on the part of the team, Mr Sullivan had reached a different view from that taken by the team. Of course, Mr Sullivan was not entitled unthinkingly to adopt the view of the team: he had to form his own opinion. However, once he was satisfied that the team had conducted a very thorough investigation, and had carefully considered all the evidence and had reached a conclusion with which he considered that he agreed, it would in my view be little short of absurd to hold that he was nonetheless obliged in law to carry out his own separate investigation. 112. As to argument (b) in para 109, support for the proposition that the more serious the allegation, the more cogent the evidence required to prove it can be found in the opinion of Lord Nicholls in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563. At p 586, he said the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence. However, that point also can only be taken so far, as Lord Hoffmann and Baroness Hale each said in In re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35, [2009] AC 11, paras 1 15 and 64 70 respectively. As Baroness Hale pointed out in para 72, there is no logical or necessary connection between seriousness and probability. She then said that serious allegations are [not] made in a vacuum, and went on to give examples of statements which might seem intrinsically unlikely if made without a particular context, but appear quite likely if made in the context of certain assumed facts. In the end, the decision maker has to come to a conclusion on the particular facts of the case. 113. The point is also apparent from the opinion of Lord Carswell (with whom the other members of the committee agreed) in In re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33, [2008] 1 WLR 1499. At para 29, he said, in connection with the serious finding in civil family proceedings that an adult had been guilty of very serious sexual assaults on young girls, [t]he panel had to be satisfied on the balance of probabilities that he was, but it did not follow that specially cogent evidence was required. In reaching that decision, the House of Lords accepted the appellant panels argument identified at para 22 that the court below was wrong to say that the flexible approach to the civil standard of proof required more cogent evidence than would be conventionally required and that a more compelling quality of evidence was needed. 114. In the present case, it seems to me clear that there was a combination of reasons which can fairly be said to be sufficiently cogent to justify Mr Sullivans opinion, based on the two Reports, that Mr Braganza had taken the unusual and tragic course of committing suicide. First, this is a case where it is clear that Mr Braganza died at sea, and the only two plausible possible causes (as the Judge and the team both considered) were accident or suicide. So this is not a case where the issue is whether an unlikely event occurred: the issue is how an unlikely event, which undoubtedly occurred, was actually caused. 115. Secondly, when one turns to consider that issue, it is clear that there were various factors which either concerned, or could well have concerned, Mr Braganza. In particular, the emails from his wife strongly suggest that he was depressed about his financial affairs and that he was oppressed by the vessels state of repair (paras 73 and 74 above). Furthermore, he could well have been upset by the withdrawal of his bonus (especially if he had money problems) (para 71), and by the criticism of his supervision of the works at Ferrol (para 70). It does seem pretty clear from the emails from his wife that, to a significant degree, he let at least some of these matters cause him serious concern. Although there was evidence that he was on good form in the 36 hours immediately before his disappearance, there were a number of comments about his uncharacteristically moody state for most of the three weeks he was on board the British Unity see paras 69 and 70 above. And there is the curious fact that he did not make entries as he should have done in the Order Book see para 72 above. 116. Thirdly, the only serious alternative to suicide, as both the Judge and the team separately concluded, was an accident, and for the reasons summarised in paras 80 and 83 84 above, that would seem to have been very unlikely. The weather was relatively calm, Mr Braganza was very safety conscious, he was unlikely to have gone on deck without warning someone, he had no reason to go on deck, the vessel was very well protected, and nobody in the BP fleet had ever fallen overboard from this class of vessel. On the teams analysis, it was, at least in my view, plainly open to them, and therefore to Mr Sullivan, to conclude that suicide was more likely than an accident. 117. Of course, as already mentioned, it was open to the team to conclude (as the Judge did) that it was not possible to reach a conclusion as to how Mr Braganza had died. However, that is not at all the same thing as saying that this was the only conclusion that the team could have reached. If the team or Mr Sullivan had proceeded on the basis that they were bound to come to a conclusion as to how Mr Braganza had died, or if they had arrived at their conclusion by a process of simply eliminating all other possible causes, they would have been guilty of an error of law which would, I think, have vitiated the conclusion which the team reached. However, that is not how they approached the issue: on the contrary see paras 85 and 86 above. 118. Argument (c) in para 109 above is that there was no evidence of depression or suicidal behaviour in the day or two before Mr Braganzas disappearance. In the first place, there was evidence to support the possibility of suicide as already discussed. Quite apart from that, we do not, alas, need expert evidence to tell us that many suicides occur out of the blue so far as loving relatives are concerned. The very fact that some suicides occur at all is attributable to the fact that there are no signs that it will happen. Of course, a number of suicides are preceded by aberrant behaviour or warnings, but I am quite unpersuaded that the absence of any such matters is of much significance. 119. As to argument (d), namely the consequence of Mr Sullivans forming the opinion that the Mr Braganza killed himself was so great that the decision making process was flawed, of course, cogent evidence was needed: it always is. And, as The House of Lords has emphasised in a number of different cases, apart from the criminal standard of proof, there is but one standard of proof, namely on the balance of probabilities, ie more likely than not see what Lord Nicholls said in In re H [1996] AC 563, 586, affirmed and explained by Lord Hoffmann and Lady Hale in In re B, [2009] AC 11, paras 13 and 68 70 respectively, and applied by Lord Carswell in In re D [2008] 1 WLR 1499, para 28. 120. I accept that it may be right to take into account the seriousness of the consequences of a particular finding when deciding whether the evidence justified it, but, as Lord Carswell explained in In re D, para 28, [t]he seriousness of consequences is another facet of the [the seriousness of the allegation]. In other words, in this case it is illogical to suggest that, because Mr Sullivans opinion, unlike the decision of the team, would result in Mrs Braganza not receiving the death in service benefit, he should have been more reluctant than the team to conclude that Mr Braganza had committed suicide. The only relevance that the non receipt of the benefit could have had to Mr Sullivans opinion would be that, because the benefit would be lost if Mr Braganza committed suicide, it could be said to render it less likely that he would have done so. However, that applies equally to the teams decision. 121. As to the argument (e) in para 109 above, I do not think that it would be appropriate to hold it against either the team or Mr Sullivan that they did not expressly say that it is inherently unlikely that a person would commit suicide. There was evidence that could support the notion that Mr Braganza was in an unhappy state emotionally, and the only alternative to suicide was an accident, which the team rejected as very unlikely indeed. Particularly in those circumstances, it would, in my view, involve setting an unrealistically, and therefore an undesirably, high standard on investigators or writers of reports, whose investigations and reports are intended to have legal effect, to hold that the investigator or writer had to mention in terms that suicide was inherently unlikely. 122. Even if the Reports had been judgments, I very much doubt that they could have been fairly criticised for failing expressly to say that suicide is an inherently unlikely act. However, even if that is wrong, any such criticism is impossible to sustain in connection with the Reports. As Mocatta J said in The Vainqueur Jose [1979] 1 Lloyds Rep 557, 577: Where, as here, the success or failure of a claim depends upon the exercise of a discretion by a lay body, it would be a mistake to expect the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a Court of law. 123. So far as argument (f) in para 109 is concerned, Miss Bucknall, in the course of her submissions, emphasised on a number of occasions that Mr Braganza could have gone on deck in daylight to check the weather. This echoes the Judges observation in para 96 of his judgment that the team and hence Mr. Sullivan, failed to take into account the real possibility that Mr Braganza went out onto deck in order to check the weather to see whether it was safe to carry out the planned work. However, the simple answer to that contention is that (i) in the First Report, the team simply thought that an accident was very unlikely for the reasons they gave, even if Mr Braganza had gone on deck, and (ii) in the Second Report, the team reconsidered the possibility of an accident and rejected it as very unlikely, because (a) Mr Braganza would probably not have checked the weather, (b) if he had gone on deck to do so he would have told the officer of the watch, and (c) perhaps most importantly, because the possibility of his falling overboard by accident was very unlikely indeed see paras 80 and 83 84 above. 124. Nor would I accept that argument (f) in para 109 above provides a good reason for doubting Mr Sullivans opinion, namely that he did not ask Mrs Braganza about the emails before forming his opinion. If, as the Judge found, the team was entitled to assume that Mrs Braganza had had the opportunity to make representations about the emails to them once she got the First Report, then Mr Sullivan was equally entitled to make that assumption. Indeed, she was free to make any points which she wanted, and apparently did so in her note of May 2009, which was referred to in the Second Report (para 83 above). Mr Sullivan knew that she had complained about the First Report, as it was her complaint which resulted in the Second Report, and, having read the Second Report, he knew that she had been free to make any point she wanted to the team. 125. In any event, although Mr Sullivan referred in his witness statement to the fact that he had not thought it appropriate to approach Mrs Braganza about the emails, he was not cross examined about this. It is therefore difficult to see how he could be criticised on this ground. Quite apart from this, Mrs Braganza gave evidence before Teare J that her husband was not happy because their money was running out, [t]hey had sold everything, that life [was] tough in Toronto, and that Mr Braganza was frightened: para 17. Although the Judge rejected BPs case that this evidence understated Mrs Braganzas degree of concern, it does not seem to me that such evidence would have undermined a conclusion that he had killed himself: it confirms what is plain from the emails. 126. In my view, in the light of the discussion in paras 107 125 above, it is not fairly open to a court to decide that the conclusion reached by the team in the First and Second Reports, and therefore the opinion formed by Mr Sullivan, fell foul of the test laid down by Rix LJ in the passage cited in para 102 above. In my view, neither the conclusion reached by the team nor the consequential opinion formed by Mr Sullivan can be characterised as arbitrar[y], capricious , pervers[e] [or] irrational , to use Rix LJs words. The two Reports are, as I have indicated, impressive both in the extent of the investigations on which they were based and the care with which they were compiled, and the conclusion they reached was carefully and rationally explained, and Mr Sullivan cannot be criticised for relying on them. Conclusion 127. I would accordingly dismiss this appeal. Mr Sullivans task was quite different. He had to consider whether he was in a position to make a positive finding that Mr Braganza had committed suicide. He should have asked himself whether the evidence was sufficiently cogent to overcome the inherent improbability of such a thing. In my view that can be expected of any employer making a decision under a provision such as this. But it could certainly be expected of BP, which clearly had access to in house legal expertise to guide it in the decision making process. In this case, there were no positive indications of suicide. There was no suicide note, no evidence of suicidal thoughts (apart perhaps from his wifes reference six weeks earlier to his seeming so afraid of life), no evidence of over whelming personal or financial pressures of the sort which would be likely to lead a mature professional man to take his own life, no evidence of psychiatric problems or a depressive personality. The bullet points are at most straws in the wind. The two most significant are the emails and the record keeping deficiencies. The cogency of the emails from Mrs Braganza is much diminished by the failure to ask her about them. The teams failure to do so is completely understandable, given the task which had been set for them. But the employers failure to do so is much less understandable. Nor do the record keeping deficiencies appear to have been explored in any depth. 41. Against those straws in the wind is the evidence that Mr Braganzas behaviour had appeared entirely normal to the Master and the other officers with whom he was in contact the night before. There was also a good deal of evidence of his concern about the weather, which would have constituted a good work related reason for him to go on deck that morning. A further relevant factor which ought to have been in the mind of this employer is that Mr Braganza was a Roman Catholic. There are cultures in which suicide is an acceptable, even an honourable, solution to certain problems or dilemmas. But his was not one of them. For him, suicide was a mortal sin. This increases its inherent improbability in his case and the corresponding need for cogent evidence to support a positive finding.

Mr Renford Braganza disappeared between 1am and 7am on 11 May 2009 while working as the Chief Engineer on an oil tanker in the mid North Atlantic managed by the respondents (collectively BP). BP formed the opinion that the most likely explanation for his disappearance was that he had committed suicide by throwing himself overboard. As a result his widow was not entitled to death benefits under his contract of employment, which provided that compensation would not be payable if in the opinion of the Company or its insurers, the deathresulted fromthe Officers wilful act, default or misconduct. The question arising in this appeal is the proper test for the court to apply when deciding whether BP was entitled to reach the opinion it did. BP set up its own inquiry team into Mr Braganzas disappearance, to examine whether its systems could be improved, and it reported on 17 September 2009. The report identified six factors supportive of suicide and concluded that the most likely scenario was that Mr Braganza had jumped overboard deliberately. The report was forwarded to Mr Sullivan, the General Manager of the BP company which employed the officers on board the vessel. Mr Sullivan made no further inquiries of his own and on the basis of the report concluded that there had been wilful default within the meaning of Mr Braganzas employment contract so that death in service benefits were not payable to his widow. Mrs Braganza brought a claim in contract against BP for death benefits and damages for negligence under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934. In the High Court the judge was unable to make a finding as to the cause of Mr Braganzas death on the evidence. He upheld the contractual claim, finding that the opinion formed by BP was not reasonable because Mr Sullivan did not direct himself that cogent evidence commensurate with the seriousness of a finding of suicide was necessary and he had failed to take into account the real possibility that Mr Braganza had suffered an accident. The judge rejected the claim for negligence and Mrs Braganza did not appeal against this. BPs appeal in relation to the contractual claim was allowed by the Court of Appeal, which held that the employer did not have to approach the matter the way required by the judge, and that the conclusion of suicide was a reasonable one for BP to reach in all the circumstances. The Supreme Court by a majority of 3 to 2 allows Mrs Braganzas appeal. In the majority, Lady Hale gives the lead judgment and Lord Hodge gives a concurring judgment. Lord Kerr agrees with Lady Hale and Lord Hodge. Lord Neuberger gives a dissenting judgment, with which Lord Wilson agrees. The appeal raises two inter linked questions of principle: (i) the meaning of the general requirement that the decision of a contractual fact finder must be a reasonable one and (ii) the proper approach of a contractual fact finder who is considering whether a person may have committed suicide [17]. The court is not the primary decision maker but will seek to ensure that where there is a conflict of interest for the party charged with making a decision under the contract (which is heightened where there is a significant imbalance of power between the contracting parties), such contractual powers are not abused. The standard of review of contractual decisions is akin to that adopted for judicial review of administrative action [19]. That test involves two limbs: the first focusing on the decision making process and the second focused on its outcome [24]. The court will imply a term into the contract that the decision making process be lawful and rational in the public law sense, ie that the decision is made rationally, in good faith and consistently with its contractual purpose [30], but much depends on the context of the particular contract involved. This case involved an employment contract which has an implied obligation of trust and confidence, in accordance with which any fact finding function entrusted to the employer concerning whether a person has committed suicide must be exercised [32]. It would have been open to BP to conclude that it was unable to form an opinion as to the cause of Mr Braganzas death but instead it made a positive finding of suicide and the question was what was required for this conclusion [33]. As to this, it is not the consequences of a finding of suicide which demands that there be cogent evidence to support it but its inherent improbability [35]. A decision that an employee has committed suicide is not a rational or reasonable decision unless the employer has had it clearly in mind that suicide is such an improbability that cogent evidence is required to form a positive opinion that it has taken place [36]. On the facts of this case, Mr Sullivan should not simply have accepted the view of the inquiry, which was conducted for a different purpose, that suicide was the most likely explanation for Mr Braganzas disappearance. In order to make a positive finding of suicide he had to direct himself that cogent evidence was required sufficient to overcome its inherent improbability [39]. In this case there were no positive indications of suicide and the six factors relied on in the report were straws in the wind [40]. They should have been set against the evidence of his normal behaviour immediately before his disappearance, his concern about the weather and the fact that he was a Roman Catholic, which increased the inherent improbability of suicide in his case [41]. The lack of evidence supporting the hypothesis of an accident was still consistent with Mr Braganza having sustained an accident through carelessness [59]. Thus the judge had been right to find that the decision was unreasonable in the public law sense of having been formed without taking relevant matters into account [42, 63]. Lord Neuberger agrees with the majority that where a contract allocates power to a party to make decisions which have an effect on both parties the court should review the decision in the same way as it reviews administrative decisions [103]. BP had to carry out the investigation with honesty, good faith and genuineness, and avoid arbitrariness, capriciousness, perversity and irrationality. The courts approach when reviewing this decision should be similar to that of an appellate court reviewing a trial judges decision. In the present case, Lord Neuberger would have held that there was a combination of reasons which could fairly be said to be sufficiently cogent to justify the finding that Mr Braganza had taken the unusual and tragic course of committing suicide [114 125].

Birmingham City Council (Birmingham) appeals against the order of the Court of Appeal (Mummery and Davis LJJ and Dame Janet Smith) dated 29 November 2011, whereby it dismissed Birminghams appeal against the order of Mr Colin Edelman QC, sitting as a deputy judge of the High Court, Queens Bench Division, dated 17 December 2010. The deputy judge had dismissed Birminghams application for a direction that the claims made against it by 174 claimants, joined as parties to the single action, should be struck out. The claimants allege that they are former employees of Birmingham. All except four of them are women. The claims, which were issued in the High Court on 30 July 2010, were founded on an alleged breach of the equality clause which, by section 1(1) of the Equal Pay Act 1970 (the Act), as substituted by section 8(1) of the Sex Discrimination Act 1975, was deemed to have been included in their contracts of employment. On 1 October 2010 the Act was repealed; and the provisions of it which this appeal requires the court to consider were replaced by provisions to similar effect in Chapter 3 of Part 5, and in particular in Chapter 4 of Part 9, of the Equality Act 2010. Under the Act an equality clause had effect in three different situations specified in section 1(2) at (a) to (c). The claimants allege that the second situation, specified at (b), applied to them, namely where the woman is employed on work rated as equivalent with that of a man in the same employment. Although section 1(1) and (2) identified the contracts of women as those in which an equality clause was to be included, the provisions applied equally to the contracts of men where the situation was converse: section 1(13). Hence the claims of the four men; but, in what follows, it will be convenient to refer only to the claims of the women. Section 1(2)(b), as substituted by section 8(1) of the 1975 Act, proceeded to provide that, where the second situation applied, the effect of the equality clause was that: (i) if (apart from the equality clause) any term of the womans contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the womans contract shall be treated as so modified as not to be less favourable, and (ii) if (apart from the equality clause) at any time the term womans contract does not corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the womans contract shall be treated as including such a term. include a The claimants allege that Birmingham employed them on work rated as equivalent with that of certain men in the same employment pursuant to the National Joint Council for Local Authorities Services (West Midlands Provincial Council) Manual Workers Handbook 1987, known as the Blue Book, and to a Job Evaluation Scheme referred to in it; but that their contracts did not provide for the payment of the substantial bonuses and other additional payments for which the contracts of the male comparators provided. They therefore claim sums equivalent to such payments pursuant to the terms of their contracts provided for by section 1(2)(b) (i) and (ii) of the Act. Birmingham has not yet filed a defence to the claims. It does not allege that the claimants are out of time in bringing such claims in the High Court: their claims are brought within six years of the date on which their alleged causes of action accrued and so fall within the time set by section 5 of the Limitation Act 1980. Whether Birmingham will seek to dispute that it employed the claimants or, if so, that their work was rated as equivalent with that of the male comparators and whether it will seek to prove pursuant to section 1(3) of the Act, as substituted by regulation 2(2) of the Equal Pay (Amendment) Regulations 1983 (SI 1983/1794), that any variation between the contracts was genuinely due to a material factor other than the difference of sex are all questions which remain to be seen. The claimants suggest that, were their claims to go forward, the real battle would lie in the quantification of their claims, which certainly appears complex, rather than in the establishment of Birminghams substantive liability to them. Were it not for one feature, the claims could have been presented by way of complaint to an employment tribunal: section 2(1) of the Act, as amended by paragraph 2 of Schedule 1 to the Sex Discrimination Act 1975 and section 1(2)(a) of the Employment Rights (Dispute Resolution) Act 1998. Such claims are usually brought in the tribunal, which offers to litigants many advantages not on offer in a court, including greater expertise in their determination (even, in a specified situation, provision to them free of charge of an expert report under section 2A(1)(b) of the Act, as inserted by regulation 3(1) of the 1983 Regulations), less cost and, in principle, faster resolution. Indeed, in the course of giving the only substantive judgment in the Court of Appeal, Mummery LJ, whose experience of this area of the law is unrivalled, observed that he had never previously encountered a claim under the Act which had been presented to a court rather than the tribunal. The feature which precludes the claimants from presenting their claims to the tribunal is that they would be out of time for doing so. They concede that Birmingham ceased to employ them on various dates between August 2004 and November 2008. Section 2(4)(a) of the Act provided that the tribunal could not determine a complaint in respect of the contravention of a term modified or included by virtue of an equality clause unless it was presented on or before the qualifying date; and section 2ZA(3) provided that in a standard case the qualifying date was the date falling six months after the last day on which the woman was employed in the employment. It is agreed that each of the present claims is a standard case, as defined in section 2ZA(2). The period of six months was extended to nine months in specified circumstances but, even had such existed, the extension would not have enabled these claims to be presented to the tribunal. Birminghams application to the court for a direction that the claims be struck out has been brought pursuant to section 2(3) of the Act. The subsection, as amended by section 1(2)(a) of the 1998 Act, provided as follows: Where it appears to the court in which any proceedings are pending that a claim or counterclaim in respect of the operation of an equality clause could more conveniently be disposed of separately by an employment tribunal, the court may direct that the claim or counterclaim shall be struck out; and (without prejudice to the foregoing) where in proceedings before any court a question arises as to the operation of an equality clause, the court may on the application of any party to the proceedings or otherwise refer that question, or direct it to be referred by a party to the proceedings, to an employment tribunal for determination by the tribunal, and may stay or sist the proceedings in the meantime. It will be convenient to describe the provision prior to the semi colon as the first part of the subsection and the provision following it as the second part. It was Birminghams case before the deputy judge that the claims should have been presented to the tribunal; that the reasons why each claimant had failed to present her claim in time to the tribunal were irrelevant; that the claims could more conveniently be disposed of by the tribunal notwithstanding that such disposal would be by way of immediate dismissal for want of presentation in time; and that in those circumstances the first part of section 2(3) conferred on him a discretion to strike out the claims which he should proceed to exercise. categorical terms, as follows: In dismissing the application the deputy judge expressed himself in On the true construction of section 2(3), it cannot be more convenient for a claim to be disposed of separately by an employment tribunal in circumstances where the. tribunal could not determine the claim on its merits but would be bound to refuse jurisdiction to deal with the claim because it was time barred. He added that, had his conclusion about the meaning of the word convenient been otherwise, he would have held that to strike out the claims in such circumstances would be to offend against the principle of equivalence under EU law, which I will address in para 32 below. Finally, said the deputy judge, he would have declined to exercise any discretion which might have arisen under the first part of the subsection. But in the Court of Appeal (as it does in this court) Birmingham put its case differently. By that stage it had conceded that the reasons why each claimant had failed to present her claim in time to the tribunal were relevant. It invited the court to rule that, except where a claimant could provide a reasonable explanation for her failure to do so, her claim should be struck out; and it sought an order that its application be remitted to the High Court for inquiry into the identity of such claimants (of whom it conceded that there would be some) as, by reference to such an exception, could successfully resist the striking out of their claims. In his judgment Mummery LJ held that the basic assumption behind the first part of section 2(3) was that both the court and the tribunal would have jurisdiction to decide the claim on its merits; that the purpose behind the provision was, in that context, to identify the forum more fitted for its resolution; that, in that Birmingham was not alleging that the claims represented an abuse of the process of the court, the reasons why the claims had not been made to the tribunal were irrelevant; and that the deputy judges decision had been correct. Nevertheless Mummery LJ expressed himself in terms more qualified than those used by the deputy judge: he said that, in the exercise of the discretion under the first part of the subsection, the fact that a complaint to the tribunal would be time barred would be no more than a circumstance of considerable weight in most cases. He added that it would be exceptional for the reasons for not presenting a complaint in time to the tribunal to be relevant to the exercise of the discretion but that, for example, they would be relevant where they were such as to render the claim made to the court an abuse of its process. As an aside, Mummery LJ addressed the word separately in the first part of the subsection, upon which nothing in the appeal turned; and he observed, helpfully, that Parliament may in particular have had in mind the presentation to the court of a mixed claim, of which one component was of breach of an equality clause and of which others were such as the tribunal had no jurisdiction to entertain. In the light of his conclusion Mummery LJ explained that he had no need to address the principle of equivalence. We may readily expostulate that it cannot be more convenient for a claim to be disposed of in a forum in which, at the outset, and without reference to its merits, it would be required to be dismissed. But the issue in this appeal is somewhat more complicated than that. What, asks Birmingham, was Parliaments purpose in providing a strict time limit for the presentation of claims to the tribunal if those who fail to comply with it can have their claims heard elsewhere? The suggested absence of any good answer to that question leads, says Birmingham, to a need for us to stifle our expostulation and, in a more measured way, to conclude that the immediate disposal in the tribunal of a time barred claim would be otherwise than more convenient only in the case of those claimants who were to provide a reasonable explanation for their failure to present their claims to it in time. Other than in nomenclature, the terms of section 2(3) of the Act did not change between enactment and repeal. It is necessary to look carefully at the original context of the subsection. The Act, although enacted on 29 May 1970, provided that in principle it should come into force on 29 December 1975; the purpose of the lengthy delay was to afford time to employers to adapt to its new requirements. Article 119 of the EEC Treaty, later renumbered article 141, was replaced by article 157 of the Treaty on the Functioning of the European Union, which now provides that: Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. The scope of the earlier article was explained in article 1 of the Councils Equal Pay Directive No 75/117 adopted on 10 February 1975. Once the Act of 1970 was in force, the UK, which had become a member of the European Community on 1 January 1973, thereby discharged its obligations, at any rate in relation to Great Britain, under the article, as explained by the directive. But, as the date of its enactment shows, the Act was not originally a response to the need for the UK to discharge its Community obligations. It was the result of a long public campaign for equal pay for women on the part of feminists, trade unionists and fair minded citizens generally. Parliament resolved that the mechanism of the provision for equal pay for women should be by its very insinuation into their contracts of employment. Section 1(2) originally provided that It shall be a term of the contract under which a woman is employed. that she shall be given equal treatment with men. With effect from the date when the Act came into force, the section was radically recast by the Sex Discrimination Act 1975, which had been enacted in the interim. But the contractual mechanism was retained. The substituted section 1(1) thenceforward provided that: If the terms of a contract under which a woman is employed. do not include . an equality clause they shall be deemed to include one. In 1975 the employment tribunal, or industrial tribunal as it was called prior to August 1998, had no general jurisdiction to determine a claim that a contract of employment had been broken. Its general jurisdiction to do so was introduced only much later, in the wake of a suggestion made by Lord Browne Wilkinson in Delaney v Staples (trading as De Montfort Recruitment) [1992] 1 AC 687, 698B; it was achieved by the Industrial Tribunals Extension of Jurisdiction (England and Wales) Order 1994 (SI 1994/1623), and even then the jurisdiction was, as it remains, hedged about. Back in 1975 the jurisdiction of the tribunal, which had been established pursuant to the Industrial Training Act 1964, was limited to the determination of claims by employees of breach of specified statutory, non contractual, rights, for example to payment in the event of redundancy. In that Parliament intended that claims by women of breach of the equality clause in their contracts could be determined by the tribunal, it followed that jurisdiction to do so had specifically to be conferred on it by the Act. Such was achieved by section 2(1). Although another formulation of the subsection was substituted even before it came into force, the original formulation is worth noting. It provided that: . a claim for arrears of remuneration or damages in respect of a failure to comply with an equal pay clause may be referred to and determined by an industrial tribunal, and may be so referred either by the person making the claim or by the person against whom it is made. It is relevant to what follows at para 21 below to note the word referred: it may be seen that, pursuant to the Act as originally drawn, a woman referred, as opposed to presented, a claim to the tribunal. The unusual use of the verb appears to have been considered necessary in order also to encompass the employers right to seek from the tribunal a ruling in relation to a claim proposed to be made against it. Although it thus conferred on the tribunal jurisdiction to determine a claim of breach of contract in this regard, Parliament did not oust the jurisdiction of the court to determine such a claim. That there was concurrent jurisdiction in the tribunal and the court is plain from (among others) the subsection, namely section 2(3), which is central to this appeal; and, over the four subsequent decades, such has been frequently acknowledged and never doubted. Attention should now turn to the period of limitation provided by Parliament for the reference of a claim to the tribunal of breach of an equality clause. Its original provision was in section 2(4), as follows: No claim in respect of the operation of an equal pay clause relating to a womans employment shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above, if she has not been employed in the employment within the six months preceding the date of the reference. This provision remained in force until 19 July 2003, when, as supplemented by a new section 2ZA, as inserted by regulation 4 of the Equal Pay Act 1970 (Amendment) Regulations 2003 (SI 2003/1656), it was replaced by more sophisticated provisions which catered also for what were described as a concealment case, a disability case and a stable employment case. Fresh treatment of a stable employment case had been necessary in order to comply with the principle of effectiveness under EU law. Such is the principle which requires that the procedural rules for proceedings designed to ensure the protection of the rights which individuals acquire through the direct effect of Community law. are not framed in such a way as to render impossible in practice the exercise of rights conferred by Community law: Preston v Wolverhampton Healthcare NHS Trust, ECJ, (Case C78/98) [2001] 2 AC 415, para 31. One of the preliminary rulings of the ECJ in that case was that the application of section 2(4) to a stable employment case, as established for the purposes of domestic law, offended against the principle of effectiveness; the ruling was duly adopted by the House of Lords in Preston v Wolverhampton Healthcare NHS Trust (No 2) [2001] UKHL 5, [2001] 2 AC 455, paras 32 33 and the decision precipitated the reform. For a standard case the period of limitation remained as six months after the end of the employment. It is impossible to make a direct comparison between the period of limitation provided for the making of a claim (or, from 2003, a claim in a standard case) to the tribunal, namely six months from the end of the employment, and the period provided for the making of such a claim to the court, namely six years from the accrual of the cause of action. In that such claims can be made, and frequently are made, to the tribunal during the currency of the claimants employment, the period of limitation for making a claim to the tribunal is by no means as short as might at first appear. But there was another restriction, not strictly cast as a provision of limitation but having such effect, to which reference should be made. It does not aid comparison between the two periods because it applied equally to proceedings in the tribunal and to proceedings in court. It was section 2(5) and, as originally drawn, it provided as follows: A woman shall not be entitled, in proceedings brought in respect of a failure to comply with an equal pay clause (including proceedings before an industrial tribunal) to be awarded any payment by way of arrears of remuneration or damages in respect of a time earlier than two years before the date on which the proceedings were instituted. In Levez v TH Jennings (Harlow Pools) Ltd [2000] ICR 58 the employment appeal tribunal held, following a comparison with the ambit of the right of employees to make other contractual claims not reflective of Community law, that the period of only two years in section 2(5) offended against the principle of equivalence under EU law. In the Preston (No 2) case, cited at para 18 above, the House of Lords held, by way of adoption of another of the preliminary rulings of the ECJ in the same case, that, in relation at any rate to part time workers, mostly being women, who had been excluded from occupational pension schemes, the subsection also offended against the principle of effectiveness under EU law: see paras 10 to 12. The result was, in 2003, the replacement of the subsection, and its supplementation for England and Wales by section 2ZB, of which the effect was that, for the standard case (being, for this purpose, somewhat differently defined), a period of six years was substituted for that of two years. A striking feature of the limitation period of six months set by section 2(4) of the Act was that Parliament never made it extendable. For almost all of the many other claims which, by 2010, could be made to the tribunal, Parliament prescribed limitation periods which it permitted the tribunal to extend; in some cases to extend them insofar as it was just and equitable to do so and, in other cases in which it had not been reasonably practicable for the complaint to be presented in time, to extend them for such further period as the tribunal might consider reasonable: see Harvey on Industrial Relations and Employment Law, 2012 update, Division PI Practice and Procedure, para 84. It is strongly arguable that Parliament tolerated an unusually absolute time limit for the presentation to the tribunal of a claim under the Act only because it recognised that, were she to fall foul of that time limit, the claimant would nevertheless be likely to remain in time for making her claim in court. But I cannot resist one further piece of historical conjecture. It relates to the phrase otherwise than by virtue of subsection (3) above in the form in which section 2(4) remained in force until 2003 and which I have set out at para 18 above. Ones initial reaction such was certainly the reaction of highly experienced leading counsel at the hearing of this appeal is that the exclusion of the limitation period achieved by that phrase related to the second part of section 2(3), set out at para 8 above, namely to the ability of a court to refer to the tribunal a question as to the operation of an equality clause which arose in pending proceedings and to stay them in the meantime. It seems to me however that ones initial reaction might be wrong. In principle a reference by a court to a tribunal of a specific question raised in proceedings pending before it could not in any event fall foul of a period within which a claim had to be presented to the tribunal; so, on the initial analysis, the phrase would be redundant. Indeed, more specifically, the phrase was inserted into section 2(4) as an exception to the provision that [n]o claim shall be referred to [a] tribunal. (italics supplied). But the second part of section 2(3) did not provide for the reference of a claim; it provided for the reference of a question. It was, by contrast, the first part of the subsection which provided, albeit obliquely, for the reference of a claim, namely by the claimant to the tribunal as the intended sequel to the courts conclusion that her claim could more conveniently be disposed of there and to its consequent striking out. I recognise that judges can become dangerously enamoured of points introduced by themselves. So I venture only tentatively that, by the phrase introduced into section 2(4), Parliament intended to make entirely clear that there could never be circumstances in which a claimant could suffer the striking out of her claim in court on the basis that it could more conveniently be disposed of in the tribunal even though she would be time barred for presenting her claim there. The phrase, together therefore with this point, was swept away in 2003, when section 2(4) was replaced; but nothing suggests that, had such been Parliaments initial intention, it remained its intention no longer. In now contending that, except where they can provide a reasonable explanation for their failure to present their claims in time to the tribunal, the claims of the claimants should be struck out under section 2(3) of the Act, Birmingham relies heavily on observations made in the House of Lords in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 and on the decision of Slade J in Ashby v Birmingham City Council [2011] EWHC 424 (QB), [2012] ICR 1, in which she applied the observations to claims materially similar to the present. In the Spiliada case shipowners sued shippers for breach of contract in having loaded on to their ship a cargo of wet sulphur which had corroded it. The House of Lords held that the judge at first instance had rightly granted leave to serve the shippers out of the jurisdiction so that the action in England might proceed. The shippers had opposed leave on the basis that the shipowners should have sued them, if at all, in British Columbia, where any such action would by then have been time barred. Subject to three points of distinction which he identified at pp 480G 481E, Lord Goff, with whose speech the other members of the committee agreed, held that the principle which governs the grant of leave to serve out of the jurisdiction and the stay of the action on the ground of forum non conveniens was the same. It was, so he held at p 476C, whether, in the absence of special circumstances, the suggested alternative forum was appropriate for the trial of the action in the sense of being more suitable for all the parties and the ends of justice. But, at pp 476H 477A, he added a rider that, where the choice was between competing jurisdictions within a federal state, a strong preference should be given to the forum chosen by the claimant upon which, by its constitution, the state had conferred jurisdiction. which Birmingham relies. He observed, at pp 483E 484E: It is Lord Goffs treatment of a time bar in the alternative jurisdiction on Let me consider how the principle of forum non conveniens should be applied in a case in which the plaintiff has started proceedings in England where his claim was not time barred, but there is some other jurisdiction which, in the opinion of the court, is clearly more appropriate for the trial of the action, but where the plaintiff has not commenced proceedings and where his claim is now time barred. Now, to take some extreme examples, suppose that the plaintiff allowed the limitation period to elapse in the appropriate jurisdiction, and came here simply because he wanted to take advantage of a more generous time bar applicable in this country; or suppose that it was obvious that the plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he did not trouble to issue a protective writ there; in cases such as these, I cannot see that the court should hesitate to stay the proceedings in this country, even though the effect would be that the plaintiffs claim would inevitably be defeated by a plea of the time bar in the appropriate jurisdiction. Indeed a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiffs action would be time barred there. But, in my opinion, this is a case where practical justice should be done. And practical justice demands that, if the court considers that the plaintiff acted reasonably in commencing proceedings in this country, and that, although it appears that (putting on one side the time bar point) the appropriate forum for the trial of the action is elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example, by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not, I think, be just to deprive the plaintiff of the benefit of having started proceedings within the limitation period applicable in this country. The appropriate order, where the application of the time bar in the foreign jurisdiction is dependent upon its invocation by the defendant, may well be to make it a condition of the grant of a stay, or the exercise of discretion against giving leave to serve out of the jurisdiction, that the defendant should waive the time bar in the foreign jurisdiction; this is apparently the practice in the United States of America. Lord Goff added, at pp 487H 488A, that, had he considered that the court of British Columbia was the appropriate forum, he would have appended such a condition to the refusal of leave. In the Ashby case Slade J heard an appeal against the decision of a circuit judge to strike out, pursuant to section 2(3) of the Act, claims brought in the county court by 14 women who were former employees of Birmingham and who alleged its breach of the equality clause in their contracts. The issue in the appeal was identical to the issue in the present proceedings in that, by the date of the issue of their claims in court, the women would have been time barred for presenting them to the tribunal. Following the hearing before Slade J but prior to the delivery of her judgment, the deputy judge gave his judgment in the present case; and it was brought to her attention. But she disagreed with it. She observed, at paras 71 and 78, that the fact that the claims would be time barred if presented to the tribunal did not preclude a conclusion that they could more conveniently be disposed of there. She suggested, at para 56, that assistance in the construction of section 2(3) was to be gained from the observations of Lord Goff in the Spiliada case and thus held, at para 78, that the reason why the women had not presented their claims in time to the tribunal had to be taken into account. She therefore allowed the womens appeal but without prejudice to the right of Birmingham to reapply to the county court for their claims to be struck out under the subsection if and insofar as it might wish to contend that in all the circumstances they had not reasonably explained their failure to present their claims in time to the tribunal. I agree with Mummery LJ in his judgment in the present proceedings, and, with respect to her, I disagree with Slade J in the Ashby case, about the relevance to the construction of section 2(3) of the observations of Lord Goff in the Spiliada case. The words which, by the subsection, Parliament has required us to apply to the facts before us are more conveniently. [I]ts statutory objective, said Mummery LJ of the subsection, is the distribution of judicial business for resolution in the forum more fitted for it. Lord Goff was required to consider a much broader canvas. He observed, at p 474E: I feel bound to say that I doubt whether the Latin tag forum non conveniens is apt to describe this principle. For the question is not one of convenience, but of the suitability or appropriateness of the relevant jurisdiction. However the Latin tag. is so widely used to describe the principle. that it is probably sensible to retain it. But it is most important not to allow it to mislead us into thinking that the question at issue is one of mere practical convenience. The proposition that an action brought inappropriately in England should sometimes not be allowed to proceed even though it can no longer be brought in the foreign jurisdiction in principle appropriate to it is in my view of no assistance in determining whether, in circumstances in which Parliament has specifically allowed a claimant to bring her entirely domestic claim in court, it could more conveniently be disposed of by the tribunal. No doubt in most cases it will be more convenient for the tribunal to dispose of a claim in respect of the operation of an equality clause, provided that it can still be brought there, rather than for the court to do so. If the claim can no longer be brought there, the effect of Birminghams submissions in this appeal, founded on the decision of Slade J, would be to convert the reasons why the claimant had failed to present her claim in time to the tribunal into the factor determinative of whether it be struck out by the court. But I do not regard the reasons for her failure as relevant in any way to the notion of convenience. In my view Birmingham aspires in effect to re write section 2(3); and to introduce into the law a principle which would in some cases in effect serve to shorten the period of limitation allowed by Parliament for the bringing of claims in court. A modified version of Birminghams submissions finds favour with Lord Sumption and Lord Carnwath. Whereas Birmingham contends for an inquiry limited to that single feature, namely the reasons for a claimants failure to present her claim in time to the tribunal, they consider that the proper operation of section 2(3) requires a multi factorial inquiry not just into that feature but into all others which might bear upon whether, in the interests of justice, a claim should be struck out; they would therefore remit the claims of the 174 claimants for individual consideration along such lines. I entirely understand the aspiration to attribute a greater degree of efficacy to the rules of limitation in sections 2(4) and 2ZA of the Act. On any view they lie curiously alongside the right to issue proceedings in court, governed by a rule of limitation which, in a number of cases albeit certainly not in all, will prove to be more indulgent to claimants. But in my respectful view the aspiration drives my two colleagues to treat section 2(3) with an unacceptable degree of violence. The adverb in the subsection is conveniently. Of course the disposal of a claim can be achieved by application of rules of limitation; but in my view the adverb qualifies the type of disposal addressed in the subsection and mandates a straightforward practical inquiry into the forum more convenient for investigation of the merits. It is analogous to the practical inquiry which attends the permission given to a claimant by rule 7.3 of the CPR to use a single claim form to start all claims which can be conveniently disposed of in the same proceedings. I would deprecate a multi factorial inquiry into what Lord Sumption neatly describes as the disembodied interests of justice in place of the inquiry for which, on the natural reading of the subsection, Parliament has provided. In Restick v Crickmore [1994] 1 WLR 420 the Court of Appeal considered five appeals by claimants who in the High Court had brought proceedings which were required to be brought in the county court and which the judges below had struck out even though the claimants had become out of time for bringing them in the county court. The decision of the Court of Appeal was that section 40(1) of the County Courts Act 1984 had given the judges a power, which they should have exercised, to transfer the proceedings to the county court instead of striking them out. It may have been a controversial construction of the subsection but it was a just decision. Stuart Smith LJ, with whom the other members of the court agreed, said, at p 427E G: The construction I prefer accords with the well established policy of the courts: provided proceedings are started within the time permitted by the Statute of Limitations, are not frivolous, vexatious or abuse of the process of the court and disclose a cause of action, they will not as a rule be struck out because of some mistake in procedure on the part of the plaintiff or his advisers. The ordinary sanction for failure to comply with the requirements will be in costs. The present claimants have a far stronger case than the appellants in the Restick group of cases for the effective survival of their claims in that they were never required to proceed in the tribunal. I would hold that the present claims cannot more conveniently be disposed of by the tribunal and that Birminghams invocation of section 2(3) of the Act was rightly rejected both by the deputy judge and by the Court of Appeal. I prefer the categorical terms favoured by the deputy judge to the qualified terms favoured by Mummery LJ. The latter referred to cases of abuse of process. Nothing can detract from the inherent jurisdiction of the court to strike out a claim in respect of the operation of an equality clause if it were to represent an abuse of its process; one example might be that of a claimant who had been invited to present a complaint in time to the tribunal but who had spurned the invitation in order to secure what the court considered to be an illegitimate advantage by bringing the claim before itself. But the subject of section 2(3) was not abuse of process; and I would hold, for the purpose both of the first part of the subsection and of its successor, namely section 128(1) of the Equality Act 2010, that a claim in respect of the operation of an equality clause can never more conveniently be disposed of by the tribunal if it would there be time barred. No doubt one aspect of Birminghams concern about the prospect that claims in respect of the operation of an equality clause may be brought against employers in court, rather than in the tribunal, relates to the courts general rule, which does not apply in the tribunal, to make an order for costs against the unsuccessful party. But the court may make a different order and, in deciding what order (if any) to make in respect of costs, it must have regard to all the circumstances, including the conduct of the parties: CPR r 44.3(4)(a). It is to this latter inquiry that the factor incorrectly urged as relevant to this appeal might well become relevant. The courts conclusion that, instead of bringing it in court, a claimant should, in all the circumstances, reasonably have presented her claim, in time, to the tribunal might well be relevant to its survey in relation to costs under the subrule: insofar as, had she done so, she would not have obtained an order for costs, such might well be relevant to the courts decision as to the appropriate order. Even in circumstances in which the presentation of a claim to the tribunal would be time barred, the power of the court under both the second part of section 2(3) of the Act and its successor, namely section 128(2) of the 2010 Act, to refer to the tribunal a question as to the operation of an equality clause still remains; and should not be forgotten. Nevertheless Parliament might well wish to consider introducing a relaxation of the usual limitation period for the presentation of a claim to the tribunal in cases in which a claim in respect of the operation of an equality clause has been brought, in time, before the court and, were it not for the effect of the usual limitation period, would more conveniently be disposed of by the tribunal. I have doubts about the value of assuming, contrary to the above, that the effect of section 2(3) of the Act is, as contended for by Birmingham, to preclude a hearing of the claimants claims on the merits even in court, save if they fall within the exception for which it now allows; and, upon that assumption, of proceeding to consider whether such an effect infringes the EU principle of equivalence. Such is the principle which requires that the procedural rules for proceedings designed to ensure the protection of the rights which individuals acquire through the direct effect of Community law [should be] not less favourable than those governing similar domestic actions: para 31 of the judgment of the ECJ in the Preston case, cited at para 18 above. But I will address the point, on which the court heard only limited argument, briefly. My view, contrary to that of the deputy judge, is that this is not a freestanding point: section 2(3) conferred upon the court a discretion and, were any exercise of the discretion in favour of a strike out to offend against the principle of equivalence, the obligation of the court would be not so to exercise it: Litster v Forth Dry Dock and Engineering Co Ltd [1990] 1 AC 546. So the point is linked to the proper exercise of the discretion, which was the deputy judges separate and final reason for dismissing Birminghams application. But the decision of the House of Lords in the Preston (No 2) case, cited at para 18 above, seems to me to place formidable difficulties in the path of the claimants invocation of the principle of equivalence. In the Preston litigation some 60,000 part time workers, mainly women, complained to the tribunal that their exclusion from their employers pension schemes infringed the equality clause introduced into their contracts by the Act. Acknowledging their own obligation to make the appropriate back dated contributions into them, they sought recognition of their entitlement to membership of the schemes, to be backdated over what, in some cases, had been their many years of employment. Test cases were identified in order to resolve preliminary issues in relation to the application to them of section 2(4) and (5) of the Act; and in Preston v Wolverhampton Healthcare NHS Trust (No 1) [1998] 1 WLR 280 the House of Lords referred three questions to the ECJ for preliminary rulings as to whether, in any of the three respects, the application of the subsections infringed the principles of equivalence or of effectiveness. I have referred, at paras 18 and 19 above, to two of the preliminary rulings of the ECJ. Its third (which did not concern cases of stable employment) was, at para 35, that the six months rule did not offend against the principle of effectiveness and, at para 49, that, in the light of the greater ability of the national court to identify a comparator, it was for that court to determine whether it offended against the principle of equivalence. Such was, therefore, an exercise which, upon the return of the case to it, the House of Lords conducted in Preston (No 2), cited at para 18 above. It determined that the rule did not offend against the principle of equivalence. Albeit with considerable hesitation on the part of three of its members, the committee decided that there was a sufficiently similar comparator in the form of an action under domestic law for damages by an employee against an employer for failure to pay to the trustees of a pension scheme on his or her behalf the sums for which the contract of employment had provided: para 22 of the speech of Lord Slynn. But the committee was not satisfied that the six months rule for a claim under the Act was less favourable than the six years rule which would apply to such an action: paras 24 to 31 of his speech. In particular he stressed, at para 30, that a claim brought in the tribunal within six months of the end of the employment might in some cases stretch much further back than six years from the date of the claim. The decision in Preston (No 2), which some might now consider border line but from which the court was not invited to depart, is therefore authority for the proposition that, in its application to what after 2003 was known as the standard case, the six months rule in section 2(4) of the Act did not offend against the principle of equivalence. The claimants concede that, were the subject of the present appeal to be the time limit for a claim to the tribunal, the decision would foreclose the point against them. But, in an argument accepted by the deputy judge, they suggest that the subject is, instead, the time limit for a claim to the court. I disagree. For Birmingham seeks, by the operation of section 2(3), in effect to import into the time limit for a claim to the court and subject to the exception for which it now makes allowance the time limit for a claim to the tribunal. The deputy judge proceeded first to note the suggested comparators in the present case, namely the men entitled under the express terms of their contracts to the additional payments, and then, for the purposes of the comparison, to imagine that Birmingham had refused to make such payments, with the result that the men had sued for them in court. He held that, by comparison with their position, the effect of Birminghams submissions about the proper application to the claimants of section 2(3) would offend against the principle of equivalence. But I discern no material difference between the deputy judges comparison and that made in relation to pension provision by the House of Lords in the Preston (No 2) case. I do not consider that Birminghams contentions, however flawed, offend against the principle of equivalence. I would dismiss the appeal. LORD SUMPTION (with whom Lord Carnwath agrees) The majority of the Court proposes to dismiss the appeal. I shall therefore be brief in explaining why, for my part, I would have allowed it. In bald summary, the decision of the deputy judge and the Court of Appeal frustrates the policy underlying the provisions of the Equal Pay Act relating to limitation. Since those provisions are an important part of the statutory scheme, I find it impossible to accept that this result can have been intended by Parliament. It is common ground that in principle the courts and the employment tribunals have concurrent jurisdiction to hear claims for breach of the statutory equality clause in a contract of employment. The issue on this appeal arises from the fact that Parliament has provided by sections 2(4) and 2ZA of the Equal Pay Act that in proceedings before an employment tribunal various limitation periods are to apply (depending on the type of case) which differ from those that would apply under the general law in proceedings before a court. Under the Act as originally enacted, there were three differences. First, the period was shorter, six months as opposed to six years. Second, it ran from the end of the end of the employment relationship, and not from the accrual of the cause of action. Third, there were no provisions for deferring the running of the period, such as those which would apply to proceedings in court under the Limitation Act 1980 and the Latent Damage Act 1986. Under the Equal Pay Act as it stood in 2005 (the relevant time for the purpose of this case), the position is exactly the same in a standard case like this one. But by that time the statutory scheme had been refined by amendment so as to defer the running of time in cases of concealment and disability. The question comes down to this. If a particular claim would be time barred before an employment tribunal but not before a court, is it open to a court to strike it out on the ground that it ought to have been brought before an employment tribunal within the period provided for by section 2(4)? Since the court has no power to transfer a case directly to the employment tribunal, and no one suggests that the present proceedings are an abuse of the courts process, this depends entirely on section 2(3). Section 2(3) empowers a court in which a claim under the equality clause is pending to strike it out if it could more conveniently be disposed of separately by an employment tribunal. Although the present question can fairly be described as turning on the construction of this provision, the issue is particularly difficult to resolve by reference to the mere language of the Act. The relevant provisions are poorly drafted, and a complex history of ill thought out amendments has contributed nothing to their coherence. This is therefore a case in which it is more than usually important to examine the underlying purpose of Parliament in (i) conferring jurisdiction on employment tribunals over equal treatment claims, and (ii) providing for special periods of limitation to apply to such claims in those tribunals. Employment tribunals (originally industrial tribunals) were established by the Industrial Training Act 1964, initially for the limited purpose of hearing appeals against the imposition of industrial training levies. Their jurisdiction has always been wholly statutory, but it has been progressively expanded over the past half century. At the time when the Equal Pay Act was originally passed in 1970, the main business of the tribunals was the determination of claims for statutory redundancy payments, a jurisdiction conferred on them in 1965. By the time that the Act came into force in substantially amended form in 1975, its jurisdiction also extended to unfair dismissal claims. By 1970, and even more by 1975, employment tribunals were well established as cheap, informal, expert tribunals, comprising predominantly lay members and operating under a simplified procedure, in which parties need not be legally represented (or indeed represented at all) and in which costs orders were not ordinarily made. These were, and remain, substantial advantages not just for parties appearing in them, but for the disembodied interests of justice. It can be assumed that they were significant factors in Parliaments decision, when enacting the Equal Pay Act 1970, to confer jurisdiction upon them in equal treatment cases. Their specialist expertise in employment practice was perhaps of particular value in these cases, because they commonly turned on an expert evaluation of the claimants job by comparison with a relevant comparator: see section 1(5). Notwithstanding these advantages, the courts jurisdiction was retained, but it follows from the criterion laid down by section 2(3) for striking out equal treatment claims brought in court that the draftsman envisaged that the courts jurisdiction would be invoked only if the subject matter of any particular claim made it the more convenient forum. The paradigm case (although not necessarily the only one) would be proceedings involving mixed claims arising out of the same employment relationship, some of which were within the jurisdiction of the employment tribunal, while others were not. Hence the reference to claims brought in court that could more conveniently be disposed of separately by an employment tribunal. Turning to the purpose of the special limitation provisions in the Act, it is right to make two points by way of introduction. The first is that issues of limitation are bedevilled by an unarticulated tendency to treat it as an unmeritorious procedural technicality. This is, I think, unjustified. Limitation in English law is generally procedural. But it is not a technicality, nor is it necessarily unmeritorious. It has been part of English statute law for nearly four centuries. It has generated analogous non statutory principles in equity. Some form of limitation is a feature of almost all other systems of law. And it has been accepted in principle in the jurisprudence of both the Court of Justice of the European Union and the European Court of Human Rights. Limitation reflects a fundamental and all but universal legal policy that the litigation of stale claims is potentially a significant injustice. Delay impoverishes the evidence available to determine the claim, prolongs uncertainty, impedes the definitive settlement of the parties mutual affairs and consumes scarce judicial resources in dealing with claims that should have been brought long ago or not at all. These considerations, which are common to most litigation, are particularly germane to equal treatment claims. The characteristics of a job are liable to change radically, especially at a time of economic upheaval, industrial rationalisation or technological advance. The selection of appropriate comparators and their comparative evaluation are inherently more uncertain exercises when they relate back several years to a state of affairs which may no longer exist. In addition, equal treatment claims are by their nature liable to affect large classes of employees of a particular firm and may therefore have important financial implications for the employer, which will be particularly disruptive if they arise out of the position of ex employees who left long ago. The second introductory point is that the dismissal of a claim on the ground that it is time barred is a disposal of the claim. Limitation is a defence. A dismissal on that ground is a judicial decision giving effect to that defence. It was submitted to us that the introductory words of section 2(4) (No determination may be made by an employment tribunal) mean that the provision is a limitation on the employment tribunals jurisdiction. There is authority that provisions in this form, or substantially similar, do go to jurisdiction: see, most recently, Radakovits v Abbey National Plc [2009] EWCA Civ 1346; [2010] IRLR 307. I am by no means convinced that this is correct, but it is unnecessary to decide the point because section 2(4) plainly gives rise to a defence in proceedings before an employment tribunal, even if it also operates as a limitation on the tribunals jurisdiction. The words cannot mean that the tribunal is disabled from determining whether the claim is time barred. The only consequence of treating section 2(4) as going to jurisdiction is therefore that the defence cannot effectually be waived. The legislative policy underlying section 2(4) of the Act, both in its original and its amended form, is clear. It is to confer a degree of protection on the employer. There is no other purpose that can be imputed to the legislature, and none was plausibly suggested in argument. In standard and stable employment cases the object was to restrict the employers exposure to equal treatment claims to those which were brought while the employment relationship still subsisted, or within a short time thereafter, so as to enable him to draw a line under any employment relationship at that point. Why were these provisions absolute? Unlike Lord Wilson (paragraph 20), I do not think that in the statute as originally enacted, the absolute character of this time bar was due to the availability of a concurrent jurisdiction in court which would not be affected by it. If this issue had been considered by the draftsman at all, he would surely have made specific provision for reconciling the two procedures. Likewise, I cannot, with respect, agree with his historical conjecture (paragraph 21) about the reason for exclusion from section 2(4) in its original form of a claim referred to an industrial tribunal by virtue of section 2(3). I agree that the drafting is unclear, but the exclusion seems most naturally to refer to the only form of reference for which provision is made by section 2(3), even if (as he rightly says) that is not strictly a reference of the claim as such. In any event, neither argument can arise on the terms of the Act as it has stood since its amendment in 2003. The absence of any provision for deferring the running of time in standard and stable employment cases is in my view more plausibly explained by the importance which the legislature attached to the time bar. At the time when the Equal Pay Act was passed, section 26 of the Limitation Act 1939 (now section 32 of the Limitation Act 1980) provided for the deferral of the running of a limitation period under the general law in cases of fraud and concealment. There was, however, no corresponding provision applicable to equal treatment claims under the Equal Pay Act, even in cases of concealment. Over the years Parliament has introduced other grounds of deferral into the general law of limitation. It is, however, notable that the possibility of deferring the running of time was not introduced into the Equal Pay Act until 2003, when it was amended by statutory instrument. Even then it was limited to two narrowly defined categories of case, namely those in which the facts giving rise to an equal treatment claim were deliberately concealed by the employer from the employee during the subsistence of the employment relationship, and those in which the employee was under a disability during the period of six months after the termination of the relationship or (in a concealment case) after the day on which she discovered the facts deliberately concealed from her. All of these provisions have been re enacted in substantially the same form by sections 120, 122 123 and 129 130 of the Equality Act 2010. Accordingly the three salient features of the Equal Pay Act for present purposes are: (i) that it provides in the public interest as well as in the interests of parties for particular categories of employment disputes to be referred to a specialised tribunal, applying a procedure particularly adapted to the hearing of such disputes, (ii) that it lays down in the interests of employers a highly restrictive regime of limitation for cases brought in the specialist tribunal, and (iii) that it contains a careful and qualified definition of the circumstances in which older claims can be brought in the specialist tribunal. Parliament cannot rationally be thought to have intended that a far less restrictive regime should apply at the unfettered option of the employee, by the simple device of bringing his claim in a court of general jurisdiction which is less appropriate to such claims because it has neither the same specialist experience nor the specially adapted procedures thought suitable for this class of case. Nonetheless, in conferring jurisdiction over equal treatment claims on employment tribunals Parliament left in being the jurisdiction that the ordinary courts had always had over contractual disputes arising out of employment. Moreover, the protection of section 2(4) is not available in equal treatment cases before the courts, because it is in terms confined to cases before the employment tribunal (compare section 2(5) in which the restriction on the period in respect of which damages may be awarded is applied to such claims wherever brought). The only rational answer to this conundrum lies in the application of section 2(3). If an action founded exclusively on a breach of the statutory equality clause were brought in court before the time limit had expired for bringing it in an employment tribunal, one would expect it to be struck out as a matter of course under section 2(3) so that it could be brought in the appropriate forum. It could, in the language of the subsection, more conveniently be disposed of by an employment tribunal. If the claim is brought in court after the tribunal time limit has expired, the test is exactly the same, but the circumstances are in one respect different. The decision whether to strike out will still depend on whether it can more conveniently be disposed of by an employment tribunal, but the employment tribunal will inevitably have to dismiss the claim because of the time bar. The Court of Appeal took the view that for this reason a claim could only very rarely be more conveniently disposed of in a tribunal which would be bound to dismiss it as time barred. They appear to have had in mind rare cases where the mere fact of bringing the claim in court could be characterised as an abuse of the courts process. In this court, the majority considers that a claim can never more conveniently be disposed of by an employment tribunal if it would be time barred there. With respect, I cannot accept either version. Both of them depend upon the proposition, which I understand to be accepted by the majority, that the notion of convenience in section 2(3) is directed only to the efficient distribution of judicial business between the available forums. I think that this is far too narrow a test, because it excludes the broader interests of justice which in my opinion should be decisive. Convenient is used in section 2(3) in a sense analogous to that which it has in the expression forum non conveniens. The question is whether the disposal of the claim in an employment tribunal is appropriate in the interests of justice: see Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 474 475 (Lord Goff). I would accept without hesitation that the fact that the claim will be time barred in the employment tribunal is a highly relevant factor, but I cannot accept that it is conclusive or nearly so. As I have pointed out, the dismissal of a claim because it is time barred is a disposal. It may, depending on the circumstances, be a just disposal. I would not wish to press the analogy with forum non conveniens too far, for it is only an analogy. But, as Lord Goff pointed out in the Spiliada case, it is not necessarily unjust to require a claim to be heard in a jurisdiction where it would be time barred, if the nature of the case is such that that is the more appropriate jurisdiction: see pp 483 484. Indeed, the case for doing so is likely to be stronger where (i) the alternative and appropriate forum is another English forum, provided by law for this very class of case; and (ii) the court is seeking to give effect to the policy of the legislature in imposing a time bar on claims brought in the appropriate tribunal. In such cases, the justice to the claimant in having his claim determined by a court on its merits without regard to the time bar is exactly commensurate with the injustice to the employer of being deprived of a defence. Other relevant considerations which seem to me to bear on the justice of requiring the claim to be brought if at all in the employment tribunal include: whether the claimant acted reasonably in failing to bring his claim before the appropriate tribunal in time; whether the passage of time since the expiry of the tribunal time bar has made the issue substantially more difficult to determine justly; and whether the employer would be exposed to a substantial liability in costs in court which he would not have faced in the tribunal. The latter is likely to be a particularly significant factor in a case where the litigation is funded under a conditional fee agreement. It will be apparent that I have considerable sympathy for the approach adopted by Slade J in Ashby v Birmingham City Council [2012] ICR 1, although I would not limit the range of relevant factors to those which arose on the facts of the case before her. If, as I have suggested, the limitation provisions of the Equal Pay Act reflect the policy of the legislature as to the circumstances in which an employer ought to be exposed to stale claims, it must in my opinion be wrong to treat the only statutory mechanism available for giving effect to it as inapplicable in the precise circumstances which engage that policy. The view that court proceedings in support of an equal treatment claim should rarely or never be struck out where they would be time barred in an employment tribunal has the effect of making the statutory protection of the employer available to him only at the option of the employee. The effect is to deprive it of most of its content. Indeed, on this view, a claimant in a concealment or a disability case could bring his claim in an employment tribunal and, having failed to persuade the tribunal that he was entitled to defer the running of time, then bring precisely the same claim in court with the benefit of the ordinary limitation period of six years and the broader provisions for deferral. The employment tribunal, he would argue, had only decided upon the applicability of the tribunal time bar, which had no relevance to proceedings brought in another English jurisdiction. I find it difficult to derive any assistance on these points from Restick v Crickmore [1994] 1 WLR 420, to which both the Court of Appeal and Lord Wilson (paragraph 28) attach importance. In that case, the Court of Appeal criticised the decision of the judges below to strike out proceedings which should have been brought in the county court, in circumstances where they would have been time barred there. That was a decision about a very different statutory scheme, whose critical feature was the existence of a statutory power to transfer the proceedings to the county court instead of striking them out. Since a transfer would have preserved the plaintiffs limitation position, it was held to have been the appropriate course. I agree with the majority that to strike out the claim would not be inconsistent with the EU principle of equivalence, for the reasons given at paragraphs 32 34 of the judgment of Lord Wilson. I would for these reasons have allowed the appeal and remitted the case to the High Court to determine whether in the interests of justice it should be allowed to proceed there.

The issue in this appeal is whether the court should exercise its discretion to strike out the equal pay claims of the respondents, which have been brought in the High Court, on the ground that they could more conveniently be disposed of in an employment tribunal, notwithstanding the fact that the claims there would be time barred. The respondents are former employees of the appellant council (Birmingham), 170 of them women and 4 men. They left their employment on various dates between 2004 and 2008. They allege that Birmingham was in breach of the equality clause inserted into their contracts of employment by section 1(1) of the Equal Pay Act 1970 (the Act), as substituted by section 8(1) of the Sex Discrimination Act 1975, by failing to provide certain benefits and other payments which were payable to workers of the opposite sex employed on work rated as equivalent. The respondents could have brought their claims in the employment tribunal, provided that they did so within the time limit applicable to them of up to six months after leaving their employment. They did not do so, however, and instead issued the claims later in the High Court, for which the time limit was six years from the date their cause of action accrued. Birmingham asked the High Court to exercise the discretion provided by s 2(3) of the Act (as amended) to strike out the claims on the ground that they could more conveniently be disposed of separately by an employment tribunal. Birminghams application was dismissed by the High Court. Its appeal to the Court of Appeal was also dismissed. The Supreme Court by a majority (Lord Sumption and Lord Carnwath dissenting) dismisses the appeal. The judgment of the majority is given by Lord Wilson; the judgment of the minority by Lord Sumption. Birmingham contended that, although the High Court did have concurrent jurisdiction under the Act to determine the respondents claims, those claims should have been presented to the employment tribunal. It invited the court to rule that, except where respondents could provide a reasonable explanation for their failure to do so, their claims should be struck out. It argued that there would be no purpose in providing a strict time limit for the presentation of claims to the tribunal under the Act, if those who failed to comply with it could have their claims heard elsewhere [11 13]. In reviewing the history of s 2 of the Act since its enactment, Lord Wilson observed that it was a striking feature of the six month limitation period set by the Act for claims in the employment tribunal that Parliament had never made it extendable. This suggested that Parliament recognised the availability of an alternative claim in court [20]. The statutory objective of s 2(3) was the distribution of judicial business for resolution in the forum more fitted for it. In most cases it would be more convenient for an employment tribunal to dispose of a claim in respect of the operation of an equality clause, provided that it could still be brought there, rather than for the court to do so. The reasons for the failure of a claimant to bring the claim in the tribunal were not, however, relevant in any way to the notion of convenience [26], nor was a multi factorial inquiry into the interests of justice required [27]. Such claims, barring an abuse of process, could never be more conveniently disposed of by the tribunal if they would there be dismissed for being out of time [29]. Parliament might wish to consider introducing a relaxation of the usual limitation period for such cases in order to allow their convenient disposal in the tribunal in future [31]. In these circumstances there was no need to consider whether the procedural rules might infringe the EU principle of equivalence, by which the rules for proceedings in respect of rights afforded to individuals through the direct effect of Community law should not be less favourable than those governing similar domestic actions. This was a point linked to the proper exercise of the discretion under s 2(3) and would have been unlikely to succeed in this case [32 33]. Lord Sumption, dissenting, considered that allowing the claims to proceed in court frustrated the policy underlying the provisions of the Act relating to limitation [36]. It was difficult to resolve the construction of s 2(3) by reference to the mere language of the Act and therefore important to examine Parliaments underlying purpose in conferring jurisdiction on employment tribunals over equal treatment claims and providing special periods of limitation to apply to such claims in those tribunals [39]. There were substantial advantages for both the parties and for the broader interests of justice in having claims heard in employment tribunals [40]. Limitation was a particularly important defence for employers facing equal treatment claims [41], and this point more plausibly explained the absence of any provision to defer the running of time [44]. Lord Sumption would have held that convenience under s 2(3) went further than the narrow question of the more efficient distribution of judicial business. The fact that a claim would be time barred in the employment tribunal was a highly relevant but not conclusive factor [47].

This appeal raises a question concerning the role of this court in relation to the principles governing the award of costs in lower courts. The facts The material facts can be shortly stated. The appellant, Mr Gourlay, is a life prisoner. The respondent is the Parole Board. In 2014 the Board met to consider whether it would be appropriate to direct the appellants release. If it did not direct his release, it was required to consider whether to recommend his transfer to open conditions. On 10 March 2014 the Board issued its decision. It did not direct his release or recommend his transfer to open conditions. The appellant then brought proceedings for judicial review of the decision. In the claim form, both aspects of the decision were challenged. The Board did not take part in the proceedings. In its acknowledgment of service, it ticked the box stating that the defendant is a court or tribunal and does not intend to make a submission. At the hearing, counsel for the appellant confined his challenge to the decision not to recommend a transfer to open conditions. The challenge was successful, and that aspect of the decision was quashed: [2014] EWHC 4763 (Admin). The treatment of costs at first instance The appellant then applied for an order finding the Board liable for his costs. His submissions in support of that application reflected the established practice, described in R (Davies) v Birmingham Deputy Coroner [2004] EWCA Civ 207; [2004] 1 WLR 2739, of not making an award of costs against a court or tribunal which adopted a neutral stance in proceedings in which its decision was challenged, in the absence of exceptional circumstances, such as flagrantly improper behaviour. In Davies, Brooke LJ, with whom Longmore LJ and Sir Martin Nourse agreed, identified four issues as arising for consideration, at para 3: (1) What is the established practice of the courts when considering whether to make an order for costs against an inferior court or tribunal which takes no part in the proceedings, except, in the case of justices, to exercise their statutory right to file an affidavit with the court in response to the application? (2) What is the established practice of the courts when Brooke LJ set out his conclusions on those issues at para 47: considering whether to make an order for costs against, or in favour of, an inferior court or tribunal which resists an application actively by way of argument in the proceedings in such a way that it makes itself an active party to the litigation? (3) Did the courts adopt an alternative established practice in those cases in which the inferior court or tribunal appeared in the proceedings in order to assist the court neutrally on questions of jurisdiction and procedure and such like but did not make itself an active party to the litigation? (4) Whatever the answers to the first three questions, are there any contemporary considerations, including the coming into force of the Civil Procedure Rules 1998, which should tend to make the courts exercise their discretion as to costs in these cases in a different way from the way in which it was regularly exercised in the past? (l) The established practice of the courts was to make no order for costs against an inferior court or tribunal which did not appear before it except when there was a flagrant instance of improper behaviour or when the inferior court or tribunal unreasonably declined or neglected to sign a consent order disposing of the proceedings. (2) The established practice of the courts was to treat an inferior court or tribunal which resisted an application actively by way of argument in such a way that it made itself an active party to the litigation, as if it was such a party, so that in the normal course of things costs would follow the event. (3) If, however, an inferior court or tribunal appeared in the proceedings in order to assist the court neutrally on questions of jurisdiction, procedure, specialist case law and such like, the established practice of the courts was to treat it as a neutral party, so that it would not make an order for costs in its favour or an order for costs against it whatever the outcome of the application. (4) There are, however, a number of important considerations which might tend to make the courts exercise their discretion in a different way today in cases in category (3) above, so that a successful applicant . who has to finance his own litigation without external funding, may be fairly compensated out of a source of public funds and not be put to irrecoverable expense in asserting his rights after a coroner (or other inferior tribunal) has gone wrong in law, and there is no other very obvious candidate available to pay his costs. Against that background, the appellant argued in the present proceedings first, that the Board was not a court or tribunal falling within the scope of the practice described in Davies, and secondly, that there were in any event exceptional circumstances, arising from the Boards behaviour in relation to the proceedings. His submissions were recorded by the judge, King J, in a reasoned order dated 2 February 2015: 4. The claimants submission is that the defendant is not to be treated as a court or tribunal. Its legislative history is set out showing its development into an independent executive Non Departmental Public Body (NDPB) and body corporate. In that capacity it is said unlike a court or tribunal, this defendant does have the discretion to compromise a claim, it can actively contest a case or concede a case, and hence taking a neutral stance should not entitle the defendant to avoid an order for costs in circumstances where (as here) the claim against it has been successful and its Decision under challenge has been quashed. It is said that it had always been open to the defendant to concede this claim and to convene a fresh panel to re consider the claimants case The claimant prisoner would have been entitled to a new Review in any event which could have been brought forward. The defendants decision not to concede but to take a neutral stance led to an unnecessary hearing before this court. 5. The claimant relies on the Court of Appeal judgments in Bahta [R (Bahta) v Secretary of State for the Home Department] [2011] EWCA Civ 895, that even against government departments the normal provisions as to costs contained in the CPR apply, including the general rule starting point(rule 44.3(2)) that a successful claimant is entitled to his costs and the importance of complying with Pre action Protocols (an aspect of conduct identified in rule 44.3(5)). The point is made in this context that here the defendant did not respond to the letter before the claim. 6. There are, says the claimant, no circumstances apparent in these proceedings which should lead the court when exercising its discretion as to costs, to depart from the usual position in judicial review proceedings that the unsuccessful defendant public body whose decision has been under challenge will normally be ordered to pay costs to the successful claimant. The fact that the claimant is publicly funded is not a good reason to decline an award of costs which would otherwise be appropriate (again see Bahta). In any event as a fallback position the claimant submits that even if the defendant is to be treated differently, there are exceptional circumstances here to justify an order of costs, in that the defendant did not respond to the letter before claim, was late in filing its AOS [acknowledgment of service], and that which is described as a failure to compromise the claim (as invited by the claimants letter of 29 September 2014) is only to be interpreted as a defended claim and puts the defendant in an adversarial role. 7. The judge rejected those submissions. He stated that the first and critical issue was whether, for the purpose of the exercise of the courts discretion as to costs, the Board was to be treated as a court or tribunal, or at least a judicial decision making body, when making the decision under challenge. There was no doubt that it was acting in a judicial capacity when making its decision whether or not to direct a prisoners release. The second, consequent, decision was whether to recommend a transfer to open conditions: a recommendation which was not binding on the Secretary of State. It was that aspect which had been challenged. Although a theoretical distinction might be drawn between these two matters, the judge concluded: [I]n reality in the process before the defendant when the prisoner appears on a Review the question as to transfer is so bound up with the question of the prospects of the ultimate release of the prisoner, that I consider it artificial to characterise the defendant as acting in a judicial capacity one moment and then not the next. On any view in my judgment the defendant is acting in at least a quasi judicial capacity throughout. Approaching the application for costs on that basis, and following the practice described in Davies, the judge concluded that he should make no order as to costs: On the facts I have set out above this is not a case in which the defendant made itself an active party to the litigation and actively resisted the claim. The defendants failure to respond to the letter before the claim is to be regretted but that omission in itself cannot be interpreted as making the defendant an active party. In my view it was clear from the date the AOS was lodged that the defendant was not actively resisting the claim. I do not consider there was anything improper in the defendant taking a neutral stance and I cannot accept that by taking such a stance the defendant was adopting an adversarial role. I am not persuaded that the fact that the defendant could have agreed to convene a fresh panel to hold a further Review changes this analysis. Nor do I consider that there are any circumstances here of improper or unreasonable behaviour which should lead me to make an order for costs against a body such as the defendant notwithstanding it has not actively resisted the claim, despite the emphasis put by the claimant on the failure to respond to the letter before claim and the failure to compromise the claim when invited to do so. The judgment of the Court of Appeal The appellant appealed against that decision to the Court of Appeal: [2017] EWCA Civ 1003; [2017] 1 WLR 4107. Senior counsel was instructed and presented a more elaborate argument than King J had heard. The appeal was, however, presented on a limited basis. The court noted, at para 33 of the judgment delivered by Hickinbottom LJ, with whom Gloster and David Richards LJJ agreed: The sole ground relied upon by Mr Southey [senior counsel for the appellant] is that the principles set out in Davies as applicable to courts and tribunals do not apply to the Board. Hickinbottom LJ also noted at para 44: Mr Southey in my view, properly conceded that this court is bound by Davies. Although it seemed to me that at times he came painfully close to doing so, he unconditionally accepted that he could not argue before this court that Davies was not still good law. The only ground upon which he relied was that the principles and practice set out in that case, and expressly applied by King J below, simply do not apply to the Board when it performs its function of making recommendations to the Secretary of State in respect of the transfer of a prisoner to open conditions. In support of that proposition, counsel for the appellant made a number of submissions, which can be summarised as follows: (1) The Board did not fulfil the criteria of a court or tribunal for the purposes of Davies, because the relationship of the executive and the Board was closer than it should be. In that regard, counsel relied upon a direction which the Secretary of State had given to the Board as to how it should approach its decision making in relation to transfers to open conditions. (2) The Board could not properly maintain a neutral stance in response to a challenge to its decisions, since it could review its decisions or concede a challenge. Its failure to do so was tantamount to contesting the challenge. (3) Davies should now be read in the light of R (M) v Croydon London Borough Council [2012] EWCA Civ 595; [2012] 1 WLR 2607, which signalled a new approach to costs in public law cases. That new approach was designed to encourage the compromise and settlement of claims against public bodies. (It should be explained that M was a more recent case following and elaborating upon the reasoning in the earlier case of R (Bahta) v Secretary of State for the Home Department [2011] EWCA Civ 895; [2011] 5 Costs LR 857, which had been cited to the judge.) (4) It would be helpful for the Board to be a party to a challenge to one of its decisions. The historic concern over the possibility of the decision maker having to pay costs out of his own pocket had been alleviated in the case of the Board, which had been constituted as a body corporate. (5) Davies proceeded on the basis that it was irrelevant whether a claimant judicially reviewing a court or tribunal was legally aided, with the consequence that the fees paid to his legal representatives were below the rates paid for privately funded work. However, following In re appeals by Governing Body of JFS [2009] UKSC 1; [2009] 1 WLR 2353, that was or might be a relevant factor. Lord Hope of Craighead said in that case at para 25 that [i]t is, of course, true that legally aided litigants should not be treated differently from those who are not. But the consequences for solicitors who do publicly funded work is a factor which must be taken into account. A court should be very slow to impose an order that each side must be liable for its own costs in a high costs case where either or both sides are publicly funded . (6) The scope of Davies should therefore be restricted, and it should not be applied where the Board was a defendant to a judicial review. (7) Even if Davies applied to the Board when deciding questions of release, it should not apply when the Board was considering whether to recommend a transfer to open conditions. Those submissions were carefully considered by Hickinbottom LJ, and each of them was rejected, for reasons which, taking each point in turn, can be summarised as follows: (1) There was no doubt as to the independence and impartiality of the Board. The direction merely confirmed the self evident need for the Board, when considering a transfer to open conditions, to balance the benefits to the prisoner against the risks to the public. (2) A party did not contest a claim simply because he did not concede it. A tribunals power to review any decision it made did not detract from the judicial nature of the reviewable decision; nor did it mean that Davies was not applicable when such a decision was judicially reviewed. (3) The argument that M modified Davies had been considered, and rejected, in the case of R (Gudanaviciene) v First tier Tribunal (Immigration and Asylum Chamber) [2017] EWCA Civ 352; [2017] 1 WLR 4095. In that case Longmore LJ, with whom David Richards and Moylan LJJ agreed, held that M did not constitute a new approach at all, but merely decided that to make no order for costs in a public law claim might not be appropriate where, as a result of some settlement or compromise, there had been some degree of success. It was only in that limited situation that M broke new ground. However, that had no relevance to the different question of whether a party that was wholly successful should obtain an order for costs against the other party. Hickinbottom LJ also cited para 36 of Longmore LJs judgment, where it was said: It would be a serious step to say that in any undefended appeal or judicial review, the tribunal would be at risk as to costs and any such conclusion cannot be implied into the decision of M. If such a step is to be taken, it cannot be by a court of coordinate jurisdiction with the court which decided Davies. Hickinbottom LJ observed at para 57 that Gudanaviciene was binding upon the court, and that he would in any event adopt Longmore LJs analysis and conclusions: M did not materially affect the approach of the courts to costs orders in public law cases involving a court or tribunal, ie the principles and application of Davies; and, in particular, the encouragement given by M to the early settlement of public law cases by the threat of costs sanctions has no application to judicial review claims against courts or tribunals. (4) The principle that, unless it had acted improperly or had actively participated in the challenge, a court or tribunal was not required to pay the costs of rectifying one of its orders whether by way of judicial review or appeal was therefore well settled. It was a principle supported by many strands of public policy, and it had been well established since Davies. It could not be undermined in the case of a particular court or tribunal simply because one of the historic concerns that it sought to address was absent, for example where, as in the present case, the relevant judicial decision maker had an indemnity against costs. Nor was it undermined by the fact that the active intervention of the court or tribunal in the proceedings might be of assistance. As Brooke LJ indicated in Davies, it was open to a court or tribunal to make a neutral submission without incurring a costs order. The Administrative Court could also ask for the assistance from the tribunal. The fact that specialist courts or tribunals might assist in this way was no reason for overriding the principle in Davies. (5) Lord Hopes comments in JFS were made in an entirely different context, in which they were consistent with the proposition that legally aided litigants should not be treated differently from those who are not. He was not dealing with a retrospective application for costs, or with an application made against a court or tribunal. Nor were the present proceedings a high costs case. Following Davies, the source of funding was immaterial to the principle that, where a court or tribunal had not acted improperly and had taken no active part in the claim, the appropriate course was to make no order for costs. In respect of decisions concerning the release of prisoners, the Board (6) was clearly acting as a court or tribunal for the purposes of Davies. The principles of Davies thus applied to challenges to such decisions. (7) Although the recommendation of the Board in relation to transfer was only advisory, a similar approach to the costs of challenging decisions of the Board was appropriate. Whether dealing with decisions concerning release or decisions concerning transfer, the Board performed a similar function, in that it had to obtain relevant material from the National Offender Management Service and the offender himself, and evaluate that material in making an assessment of the risk posed by the offender, and of whether that risk was at an appropriate level for him to progress by way of transfer to a category D prison or release on licence, as the case might be. In respect of release, it had to reach its own objective judicial decision, in order to comply with the requirements of article 5(4) of the European Convention on Human Rights. In respect of transfer, it reached its decision in the same way, and to the same procedural standards. It had to use the same procedures for practical reasons: it was often the case that a panel was considering both transfer and release at the same time. However, it was also required to adopt the same procedural standards, not as a result of article 5(4), but by the common law. Therefore, in considering transfer decisions, the Board both in practice acted, and in principle was required to act, as if it were a court or tribunal. Hickinbottom LJ added that it was likely to be open to the prisoner to make the Secretary of State a party to any challenge to a decision in relation to transfer, so that in appropriate cases the prisoner would be able to obtain a costs order against the Secretary of State. The appeal to this court The issues arising on this appeal were agreed by the parties to be, first, whether Davies continues to represent the approach that should be adopted to costs orders against courts or tribunals, and secondly, if Davies continues to apply, whether the Board should be treated as a court or tribunal for that purpose. In relation to the first of those issues, counsel for the appellant submitted that Davies is wrong: a submission which, it was said, was not available to him below. In support of his submission, counsel argued that the rationale for the practice described in Davies had not been explained or justified. To the extent that reasons were given, many if not all of them had fallen away. In that regard, counsel referred to a number of changes which were said to have occurred since Davies was decided: in particular, the decline of legal aid, a diminution (in real terms) in legal aid payment rates, an increased reliance on conditional fees, and the introduction of the general rule that costs follow success, in CPR rule 44.2(2). Davies was argued to be incompatible with CPR rule 44.2(2), since it created an exception to that general rule. The Board must be viewed as the unsuccessful party even if it played no active part in the proceedings, since its decision had been quashed. If the Board did not concede a challenge, then in substance it opposed it. In relation to the second issue, counsel submitted, as in the courts below, that the Board should not be treated as a court or tribunal, at least when deciding whether to recommend a transfer to open conditions. In support of that submission, counsel referred to a number of factors, placing particular emphasis on the fact that the Boards recommendation was not binding on the Secretary of State, and on the fact that the Board had published a litigation strategy, which noted that in any form of litigation, it could decide to concede the case. In response, counsel for the Board submitted that the Court of Appeal was correct to hold that Davies was good law, and that the approach which it laid down applied to the Board. That approach, it was argued, accorded with the settled and long established approach of the High Court and the Court of Appeal, and ensured the continuing impartiality of judicial decision making bodies where their decisions were challenged by way of judicial review. Any decision which swept away their long established ability to maintain neutrality in proceedings challenging their decisions would have a very significant impact on the way in which litigation was conducted. An approach which declined to award costs against a neutral party was compatible with CPR rule 44.2(2). Such a party was not unsuccessful, and in any event rule 44.2(2) provided that the court may make a different order. At an early stage in the hearing of the appeal, the court raised with the parties the question whether the issues which were said to arise on the appeal (para 13 above) raised any question of law, as distinct from questions of practice in relation to the award of costs, which it might be appropriate for this court to leave to the courts below. The parties were invited to file written submissions on the question after the hearing. In the post hearing submissions filed on behalf of the appellant, counsel submitted that the Court of Appeal regarded itself as bound by its decision in Davies, as was apparent from para 36 of Gudanaviciene (para 11(3) above) and para 57 of Hickinbottom LJs judgment in the present case (ibid), and from its acceptance in the present case of the appellants concession that Davies was binding upon it (para 9 above). That understanding was also apparent from the judgment of Hickinbottom LJ, with which Davis and Ryder LJJ agreed, in R (Faqiri) v Upper Tribunal (Immigration and Asylum Chamber) [2019] EWCA Civ 151; [2019] 1 WLR 4497, para 24, where Gudanaviciene was said to have confirmed that Davies was still good law, and binding on this court. It followed that only the Supreme Court could decide whether Davies was good law. If, however, the question was one of practice, then it followed that the Court of Appeal had been mistaken in regarding itself as bound by the decision in Davies. This court should therefore find in favour of the appellant, on the ground that the courts below were mistaken in regarding Davies as imposing a strict rule, when their discretion was in reality much broader. The submissions on behalf of the respondent identified the relevant question of law as being whether King J had exercised his discretion correctly, or whether his approach was erroneous in law. In response to the submission of the appellant summarised at para 19 above, counsel observed that, given that counsel for the appellant had conceded before the Court of Appeal that it was bound by Davies, the implication of his argument was that the Court of Appeal should, of its own motion, have decided the appeal on a basis for which the appellant was not contending. Discussion Section 51(1) of the Senior Courts Act 1981 provides, so far as material: (1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in (a) (b) the civil division of the Court of Appeal; the High Court; shall be in the discretion of the court. (2) Without prejudice to any general power to make rules of court, such rules may make provision for regulating matters relating to the costs of those proceedings (3) The court shall have full power to determine by whom and to what extent the costs are to be paid. Section 51 is concerned with the jurisdiction of the court to make orders as to costs. That jurisdiction is expressed to be subject to rules of court. It is therefore open to the rule making authority (now the Civil Procedure Rule Committee established under section 2 of the Civil Procedure Act 1997) to make rules which control the exercise of the courts jurisdiction under section 51(1). It is also open to appellate courts to provide guidance to lower courts as to how their discretion should be exercised. As Lord Goff of Chieveley remarked in Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965, 975, section 51(1) is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. The rules of court relating to the courts discretion as to costs set out a number of general principles. Some are contained in CPR rule 44.2. Under paragraph (1), the court has discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are to be paid. Under paragraph (2), if the court decides to make an order about costs, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but the court may make a different order. Certain exceptions to the general rule are set out in paragraph (3), but do not apply in the present case. Under paragraph (4), in deciding what order (if any) to make about costs, the court is to have regard to all the circumstances, including the conduct of the parties. Other principles are set out in other rules, notably CPR rule 44.3, and apply to circumstances falling within the scope of those rules. The rules of court do not, however, set out a comprehensive code. It is also important, as Lord Goff indicated, that the appellate courts establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. This court, like the House of Lords before it, proceeds on the basis that responsibility for developing those principles falls principally upon the Court of Appeal. In proceeding on that basis, the court recognises that such principles are generally matters of practice, rather than matters of law, and follows its general approach to matters of practice. In modern times, that approach was articulated by Lord Hope in Girvan v Inverness Farmers Dairy 1998 SC (HL) 1, an appeal from the Inner House of the Court of Session concerned with the level of damages for personal injuries which had been awarded by a jury. In the course of his speech, with which the other members of the Appellate Committee agreed, Lord Hope considered a submission that a change in practice should be introduced in the Court of Session, so that juries would be given guidance by the judge as to the appropriate level of damages. He observed at p 21: In the first place it would, I believe, be inappropriate for your Lordships to recommend changes in the practice which is followed by the Court of Session in the conduct of jury trials in its own court. The Court of Session is, in a very real sense, the master of its own procedure. It has been said several times in the Inner House, on motions for leave to appeal in interlocutory matters, that it is not appropriate to refer matters of practice for decision by the House of Lords The basis for this view is that the Court of Session is far better placed than your Lordships can ever be to assess what changes in procedure or practice can appropriately be made and, if they were to be made, what would be their consequences. Lord Hope went on to explain that the Court of Session had a statutory power to make rules of court regulating its procedure, and that the Court of Session Rules Council, established under the same legislation, had the function of considering what changes ought to be made from time to time. Both branches of the legal profession were represented on the Rules Council, so that it provided an appropriate forum for consultation when changes to the rules were being proposed. In those circumstances, Lord Hope concluded: The Court of Session is thus well equipped to keep its own rules under regular review, and it has the ability to change or modify those rules with the minimum of delay by act of sederunt or practice note or by a decision of the court which can be reviewed, if necessary, by a larger court. By way of contrast, a decision by your Lordships on a matter of practice would lack the process of consultation which is needed to ensure general acceptability. It would also lack flexibility, as a decision of this House would be binding on the Court of Session and it would be very difficult to reverse except by legislation. The proper approach for this House to take therefore is to leave it to the Court of Session to decide what changes, if any, should be made to its own rules. That case was concerned with a different question from the one which arises in the present appeal. The emphasis on rules of court, in particular, distinguishes it from a case concerned with the principles upon which a discretionary power should be exercised, as set out in the judgments of appellate courts. Nevertheless, Lord Hopes remarks about the role of the House of Lords in relation to matters of practice, and about the greater ability of the Court of Session to assess what changes can appropriately be made, and to modify practice flexibly and without delay by means of judicial decisions, are of wider scope. They are relevant, mutatis mutandis, to the relationship between this court and the Court of Appeal of England and Wales, and the Court of Appeal of Northern Ireland, and have been cited in a number of different contexts in more recent decisions of the House of Lords and of this court. The case of Callery v Gray (Nos 1 and 2) [2002] UKHL 28; [2002] 1 WLR 2000, is more directly in point, as it concerned appeals against an order for costs. Questions arose, where the claimant had entered into a conditional fee agreement with his solicitors, as to whether the success fee, and an after the event insurance premium, were recoverable from the defendant as part of an award of costs; whether the amount of the success fee was reasonable; and whether the insurance premium was reasonable. The House of Lords decided not to intervene in the Court of Appeals determination of those questions. Lord Bingham of Cornhill, with whom Lord Nicholls of Birkenhead and Lord Hope agreed, stated at para 8: [T]he responsibility for monitoring and controlling the developing practice in a field such as this lies with the Court of Appeal and not the House, which should ordinarily be slow to intervene. The House cannot respond to changes in practice with the speed and sensitivity of the Court of Appeal, before which a number of cases are likely over time to come. Although this is a final and not an interlocutory appeal, there is in my view some analogy between appeals on matters of practice and interlocutory appeals, of which Lord Diplock in Birkett v James [1978] AC 297, 317 observed that only very exceptionally are appeals upon such matters allowed to come before the House. Lord Hoffmann added at para 17: My Lords, the Court of Appeal is traditionally and rightly responsible for supervising the administration of civil procedure. This is an area in which your Lordships have in the past seldom intervened and, it must be said, the few exceptions to this policy of self restraint have usually tended to confirm the wisdom of the general practice. Lord Hope, with whom Lord Nicholls also agreed, referred to his earlier observations in Girvan v Inverness Farmers Dairy, and said at para 56 that, for similar reasons to those which he gave in that case, responsibility for dealing with these issues lies pre eminently with the Court of Appeal and not with this House. Mention should also be made of the case of Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] UKSC 64; [2014] 1 WLR 4495, which concerned an order striking out a defence as a result of the defendants non compliance with a case management decision. Lord Neuberger of Abbotsbury stated at para 39, in a judgment with which Lord Sumption, Lord Hughes and Lord Hodge agreed: [I]ssues such as those raised by this appeal are primarily for the Court of Appeal to resolve. It would, of course, be wrong in principle for this court to refuse to entertain an appeal against a decision simply because it involved case management and the application of the CPR. However, when it comes to case management and application of the CPR, just as the Court of Appeal is generally reluctant to interfere with trial judges decisions so should the Supreme Court be very diffident about interfering with the guidance given or principles laid down by the Court of Appeal. Similar remarks have been made in other decisions of this court concerned with analogous matters. For example, in the case of BPP Holdings Ltd v Revenue and Customs Comrs [2017] UKSC 55; [2017] 1 WLR 2945, which concerned guidance given by the Court of Appeal and the Upper Tribunal (UT) to the First tier Tribunal (F tT), Lord Neuberger, with whom the other members of the court agreed, stated at para 26: It is not for this Court to interfere with the guidance given by the UT and the Court of Appeal as to the proper approach to be adopted by the F tT in relation to the lifting or imposing of sanctions for failure to comply with time limits (save in the very unlikely event of such guidance being wrong in law). The position is different where an appeal on costs raises a question of law. Appeals to the House of Lords, or in more recent times to this court, which are purely on costs have long been discouraged, as a general rule, and will rarely meet the courts central criterion for the grant of permission to appeal, namely that the appeal must raise an arguable point of law of general public importance: Practice Direction 3.3.3. Nevertheless, where permission to appeal has been granted, the court will intervene if an error of law is established. The Aiden Shipping case is itself an example. Three more recent examples can be given. First, in R (Hunt) v North Somerset Council [2015] UKSC 51; [2015] 1 WLR 3575, the appellant successfully challenged the legality of a decision taken by the respondent council, but the Court of Appeal declined to grant a quashing order because of the practical problems which that would cause, given the time which had elapsed before the appeal came on for hearing. Declaratory relief was not sought. In those circumstances, the Court of Appeal dealt with costs on the basis that the council was the successful party to the appeal. Its order was set aside by this court, Lord Toulson stating at para 15: The discretion of a court in a matter of costs is wide and it is highly unusual for this court to entertain an appeal on an issue of costs alone. But the Court of Appeal said that it reached its decision as a matter of principle, treating the respondent as the successful party. In adopting that approach, I consider that the court fell into error. Secondly, in Cartier International AG v British Telecommunications plc [2018] UKSC 28; [2018] 1 WLR 3259 the question arose whether the costs to internet service providers (ISPs) of implementing website blocking orders should be borne by the ISPs or by the persons who had obtained the orders in order to protect their intellectual property rights. The courts below had considered that the costs should in principle be borne by the ISPs, first for reasons of commercial equity, and secondly on the view that that was required by EU directives. This court intervened, on the basis that the ordinary rule in equity, in situations where a person was ordered to prevent the use of his facilities by a third party to commit or facilitate a wrong, was that the applicant bore the costs of compliance by an innocent intermediary, and the EU directives contained no contrary requirement. A third example of intervention is the case of XYZ v Travelers Insurance Co Ltd [2019] UKSC 48; [2019] 1 WLR 6075, where this court reversed the decisions of the courts below in relation to the award of a non party costs order against a liability insurer. Earlier decisions of the Court of Appeal had laid down the applicable general principles, which in the context in question implied that the relevant question was whether the insurer had become the real defendant in relation to an insured claim, or had intermeddled in an uninsured claim, thereby causing additional costs to be incurred. The judge had erred in the exercise of her discretion by basing her order on conduct by the insurer, some of which could not reasonably be regarded as intermeddling, and the remainder of which had not in any event resulted in the incurring of additional costs. The Court of Appeal had also erred, by relying on an irrelevant consideration. In summary, therefore, this court will ordinarily be slow to intervene in matters of practice, including guidance given by the Court of Appeal as to the practice to be followed by lower courts in relation to the award of costs. The court recognises that responsibility for monitoring and controlling developments in practice generally lies with the Court of Appeal, which hears a far larger number of cases. This court is generally less well placed to assess what changes in practice can appropriately be made. It cannot respond to developments with the speed, sensitivity and flexibility of the Court of Appeal. Nevertheless, it can intervene where there has been an error of law, and has done so where a question of law arose which was of general public importance. Bearing in mind, however, the discretionary nature of decisions on costs, and the rarity of their raising any question of law of general public importance, appeals solely on costs are not ordinarily appropriate. The counterpart of this restraint on the part of the Supreme Court is that the Court of Appeal must fulfil its primary responsibility for monitoring and controlling developments in practice, including developments in relation to costs. It cannot do so, however, unless it is able to keep its decisions laying down principles of practice as to how lower courts should exercise their discretion in relation to costs, such as Davies, under review. That entails that its decisions on such matters cannot be treated as binding precedents, in the sense in which that expression is generally understood: that is to say, precedents which the Court of Appeal is required to follow in accordance with the principles laid down in authorities such as Young v Bristol Aeroplane Co Ltd [1944] KB 718 and Davis v Johnson [1979] AC 264. Were the position otherwise, the Court of Appeal would be severely restricted in its ability to introduce changes in practice, since any departure from its previous decisions could only be brought about by appeals to this court. However, the appellants submission that such decisions are treated by the Court of Appeal as binding precedents, in the same sense as decisions on questions of law, appears to be a misleading over simplification of the position. In the first place, the principles of practice laid down by the Court of Appeal to guide judges in the exercise of their discretion as to the award of costs are not strictly binding even upon those judges, in the way in which a decision of the Court of Appeal on a point of law is binding upon them. There is always a residual discretion as to costs. Since the discretion is to be judicially exercised (Pepys v London Transport Executive [1975] 1 WLR 234, 237), the application of the principles laid down by appellate courts must be tempered by an ability to respond flexibly to unusual situations, and to reach a just result in the individual case. As was said long ago in relation to the discretion to order a jury trial, the Court cannot be bound by a previous decision, to exercise its discretion in a particular way, because that would be in effect putting an end to the discretion (Jenkins v Bushby [1891] 1 Ch 484, 495 per Kay LJ). Brooke LJs judgment in Davies itself recognised that there was scope for judges to exercise their discretion: see para 47(4), cited at para 4 above. Secondly, since a decision such as Davies establishes principles which should generally be applied as a matter of practice, as Brooke LJ repeatedly made clear (see, for example, para 47, cited at para 4 above), rather than deciding a question of law, it falls outside the scope of the rules of precedent laid down in authorities such as Young v Bristol Aeroplane Co Ltd, which are concerned with the effect of a decision on a question of law (p 729). It also falls outside the scope of the rationale of those rules, namely to promote legal certainty. It is therefore appropriate for a decision on a matter of practice to be reviewed where sufficient reason, such as a material change of circumstances, is put forward. Indeed, the fourth of the issues which Brooke LJ identified in para 3 of his judgment in Davies (cited at para 3 above) was whether there were any contemporary considerations which should tend to make the courts exercise their discretion as to costs in these cases in a different way from the way in which it was regularly exercised in the past: a question to which he gave an affirmative answer in para 47. Previous decisions on matters of practice are not, therefore, binding in the ordinary sense of that term. At the same time, Brooke LJ observed at para 4 of his judgment in Davies that some of the issues in that case had recently been considered by the Court of Appeal in another case, R (Touche) v Inner London North Coroner [2001] EWCA Civ 383; [2001] QB 1206. He added (ibid): Needless to say, the latter judgment is binding on us unless we were satisfied that the court in Touches case overlooked relevant case law of a material nature or that its decision could be treated as not binding on us on other grounds. That approach, indicating that the court would only review its recent decision on the same issue of practice if persuaded that the previous case had been decided per incuriam, or that there was some other sufficient reason to do so, makes evident sense, if the Court of Appeal is to avoid repeated arguments about the principles to be adopted in costs cases, potentially divergent decisions, and the attendant risk of inconsistency and incoherence. Accordingly, although a previous decision of the Court of Appeal on a question of practice is not binding upon it in the sense in which its precedents on questions of law are binding, it is appropriate that such a decision should only be reviewed where there is sufficient reason to do so: as, for example, where there has been a material change of circumstances, or where the previous case was decided per incuriam. Following that approach, the Court of Appeal can ensure a consistent approach, and prevent the repeated re arguing of the same points without justification, while also avoiding a situation in which its previous decisions become a potential barrier to the development of practice. Placed in that context, the dictum of Longmore LJ in Gudanaviciene at para 36 (cited at para 11(3) above) takes on a different complexion. The central issue in that case was whether the approach to costs in cases of judicial review which had been adopted in the M case, and the observations of Lord Hope in the JFS case, required the guidance given in Davies to be revisited. The Court of Appeal did not close its mind to those arguments, on the basis that Davies was a binding precedent, but examined the issues fully. As has been explained, Longmore LJ concluded that M did not represent a new approach, as had been argued, but reflected the approach generally adopted to challenges to the decisions of public bodies. That approach did not impinge upon the distinct approach taken to cases involving courts and tribunals which adopted a neutral stance towards challenges, exemplified by Davies. The case of Gudanaviciene itself was a case of the latter kind. In addition, the observations in the JFS case had been made in very different circumstances and were not in point. It was in those circumstances, where the arguments in favour of a new approach had been considered and rejected by the Court of Appeal, that Longmore LJ observed at para 36 that, if such an approach were to be adopted, that step would have to be taken by this court. Similarly, in the present case, Hickinbottom LJ carefully examined the arguments which were advanced in support of a modification of the approach adopted in Davies. Since the arguments were in substance the same as those which had recently been rejected by the Court of Appeal in Gudanaviciene, and no good reason had been put forward for reviewing the decision in that case, Hickinbottom LJ was correct to conclude that that decision should be followed. His description of it as binding was perhaps open to misinterpretation, but did not in reality involve any error of law: he plainly did not treat Gudanaviciene as a binding precedent in the Bristol Aeroplane sense. The same is true of his description of the decision in Davies as binding, and of his similar remark in Faqiri, cited at para 18 above. The present case The central question raised in an appeal on costs is generally whether the decision awarding costs was vitiated by a failure to exercise the statutory discretion rationally and in accordance with established principles. In this case, the relevant decision was taken by King J. The submissions before him took as their starting point the established practice described in Davies, and argued that the Board should not be treated as a court or tribunal for that purpose since (in particular) it could concede a challenge to one of its decisions; that it should be treated in the same way as the generality of public bodies, and as such should normally be liable for the costs of successful challenges to its decisions; and that there were in any event circumstances justifying an exception to the usual practice, since its conduct, in failing to respond to the appellants letter before action in accordance with the relevant protocol, and in filing its acknowledgment of service after the due date, should be penalised by an award of costs. The judges reasons for declining to make such an award took full account of the appellants submissions, and reflected the established practice. In particular, he identified the point of central importance as being that the Board had taken the decision under challenge while acting in a judicial or quasi judicial capacity, and had not made itself an active party to the litigation. His conclusion that the Board consequently fell within the scope of the practice described in Davies did not involve any error of law. The question whether the Board should be treated as a court or tribunal for that purpose is itself a question of practice: it is not determined abstractly or on the basis of definitions used for other purposes, such as the meaning given to the expression court or tribunal in the European Convention on Human Rights. Nor was there any error of law involved in the judges conclusion that the Boards failure to respond to the letter before action was regrettable, but did not amount to improper or unreasonable behaviour which would justify an award of costs against it. In short, there is nothing in the judges reasoning which was erroneous in law, or with which this court would consider it appropriate to interfere as a matter of practice. Given that conclusion, it is difficult to see any basis upon which this court could properly allow this appeal. The same arguments were presented to the Court of Appeal in a more fully elaborated form, together with an argument concerning the significance of the appellants being in receipt of legal aid. The appellants contention that the Court of Appeal erred in law by regarding itself as bound, as a matter of precedent, to follow its decision in Davies, has already been considered and rejected. Although the court might have proceeded on the basis that no adequate grounds had been advanced for it to review its recent decision in Gudanaviciene, in which the same arguments had been considered and rejected, it considered the appellants submissions fully, and gave detailed reasons for rejecting them on their merits. In doing so, it committed no error of law. In particular, there is nothing in CPR rule 44.2 which is inconsistent with the approach which was described in Davies and followed in the present case. A body which takes a decision in a judicial or quasi judicial capacity, and then declines to defend it when it is challenged in court proceedings, choosing instead to maintain its impartiality and to let the reasons which it gave for its decision speak for themselves, acts in accordance with principles of judicial independence and impartiality which have long been recognised both in English law and at an international level: see, for example, the United Nations Commentary on the Bangalore Principles of Judicial Conduct, paras 72 and 74. A judicial or quasi judicial body which acts in that way cannot be what the framers of the CPR rule had in mind when they referred to an unsuccessful party. Furthermore, CPR rule 44.2 was in force at the time of the decision in Davies, although differently numbered. As Brooke LJ observed in Davies at para 45(1), the rule provides unequivocally that the general rule is that the unsuccessful party will be ordered to pay the costs of a successful party, but this does not throw any light on the position of a neutral party. The only additional observation that need be made in relation to the law is that the fact that a party is in receipt of legal aid cannot affect the principles on which the discretion to award costs is normally exercised. That is because section 30(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (re enacting a provision previously contained in section 22(4) of the Access to Justice Act 1999) provides: Except as expressly provided by regulations, any rights conferred by or under this Part on an individual for whom services are provided under this Part for the purposes of proceedings do not affect the rights or liabilities of other parties to the (a) proceedings, or (b) or tribunal is normally exercised. the principles on which the discretion of a court Furthermore, as a matter of principle, this court would respectfully agree with Lord Neuberger MRs statement in the M case, at para 46, that the basis upon which the successful partys lawyers are funded, whether privately in the traditional way, under a no win no fee basis, by the Community Legal Service, by a law centre, or on a pro bono arrangement, will rarely if ever make any difference to that partys right to recover costs. The dictum of Lord Hope in the JFS case which was cited in para 10(5) is clearly consistent with that approach in so far as he said that legally aided litigants should not be treated differently from those who are not. It may, however, appear at first sight to conflict with it in so far as he said that the consequences for solicitors who do publicly funded work is a factor which must be taken into account. However, as Hickinbottom LJ explained at para 60 of his judgment in the present case, there is no inconsistency when the dictum is placed in its context. In the relevant passage of his judgment, Lord Hope was considering, obiter, whether it would have been appropriate to make a protective costs order under which each party would be liable for its own costs whatever the outcome of the appeal, in the event that such an order had been sought. The result of making such an order would have been to disapply the principles which normally govern an award of costs, so as to prejudice the legally aided claimants lawyers by making it impossible for them to recover remuneration at the rates which would have applied if the claimant had been privately funded. The point made by Lord Hope, in explaining why such an order would not have been made, was therefore consistent with his endorsement of the principle that legally aided litigants should not be treated differently. In so far as the decision whether to award costs against the Board turns on matters of practice, it would not be appropriate for this court, for the reasons explained earlier, to impose on the Court of Appeal its own assessment of the merits of the parties arguments. Conclusion For all these reasons, I would dismiss this appeal.

This appeal raises a question concerning the role of the Supreme Court in relation to the principles governing the award of costs in lower courts. The Appellant, Mr Gourlay, is a prisoner serving a life sentence, the minimum term of which has expired. In 2014, the Parole Board decided not to direct his release on licence and not to recommend his transfer to open prison conditions. Mr Gourlay challenged those decisions on a claim for judicial review. The Parole Board did not take part in the proceedings. The High Court decided that the Parole Boards decision not to recommend Mr Gourlay for transfer to open conditions was unlawful. Upon his success, Mr Gourlay applied for an order requiring the Parole Board to pay the costs he incurred in bringing his claim for judicial review. The High Court decided not to make such an order, following the practice described in R (Davies) v Birmingham Deputy Coroner [2004] 1 WLR 2755 (Davies): that, if a court or tribunal adopts a neutral stance in proceedings in which its decision is challenged, it will not be liable for the costs of the claim, unless there are exceptional circumstances. The Court of Appeal upheld the High Courts decision not to make an award of costs. Mr Gourlay appealed to the Supreme Court. He argued that the approach described in Davies is no longer correct, that it was wrongly treated by the Court of Appeal as a binding precedent, and that it does not apply to the Parole Board in any event. The Supreme Court unanimously dismisses the appeal. Lord Reed gives the sole judgment, with which the other Justices agree. Section 51 of the Senior Courts Act 1981 provides that the High Court and the Court of Appeal have discretion as to the award of costs, subject to the rules of court [21] [22]. The rules of court include the general rule that, if the court decides to make an order about costs, the unsuccessful party will be ordered to pay the costs of the successful party [23]. The rules of court do not, however, set out a comprehensive code [24]. It is also important that the appellate courts establish principles upon which the courts discretion as to the award of costs may, within the framework of the Senior Courts Act 1981 and the rules of court, be exercised [24]. Responsibility for the development of those principles falls principally upon the Court of Appeal [24]. Generally, such principles are matters of practice, rather than matters of law [24]. The Supreme Court will ordinarily be slow to intervene in matters of practice, including guidance given by the Court of Appeal as to the practice to be followed by lower courts in relation to the award of costs [36]. This is because the Supreme Court is generally less well placed to assess what changes in practice can appropriately be made [36]. The Supreme Court can intervene where there has been an error of law, but, bearing in mind the discretionary nature of decisions on costs, and the rarity of their raising any question of law of general public importance, appeals solely on costs are not ordinarily appropriate [36]. The counterpart of this restraint on the part of the Supreme Court is that the Court of Appeal must fulfil its primary responsibility for monitoring and controlling developments in practice [37]. In order to fulfil that responsibility, decisions on matters of practice should not be treated as binding precedents [37]. Otherwise, any departure from a previous decision could only be brought about by an appeal to the Supreme Court [37], and the Court of Appeal would be unable to respond flexibly to unusual situations, and reach a just result in each individual case [38]. Instead, it is appropriate for decisions of the Court of Appeal on matters of practice to be open to review by the Court of Appeal itself [39]. To avoid repeated arguments, potentially divergent decisions, and the attendant risk of inconsistency and incoherence, such decisions should be reviewed only where there is sufficient reason to do so: for example, where there has been a material change of circumstances [40]. In the present case, the High Court took full account of the arguments made on behalf of Mr Gourlay, and reached a decision which reflected established practice [44]. The question of whether the Parole Board falls within the scope of the practice described in Davies is itself a matter of practice: it is not determined abstractly or on the basis of definitions used for other purposes, such as the meaning given to the expression court or tribunal in the European Convention on Human Rights [44]. There is nothing in the Judges reasoning which was erroneous in law, or with which the Supreme Court would consider it appropriate to interfere as a matter of practice [44]. The Court of Appeal also did not commit any error of law [45]. In particular, its approach was not inconsistent with the rules of court [46]. The choice of a judicial or quasi judicial body to take a neutral position in court proceedings accords with principles of judicial independence and impartiality, and this cannot be what the framers of the rules of court had in mind when they referred to an unsuccessful party [46]. In addition, the Court of Appeal correctly recognised that the fact that a party is in receipt of legal aid cannot affect the principles on which the discretion to award costs is normally exercised [47] [48]. It also did not incorrectly treat itself as bound, as a matter of precedent, to follow the decision in Davies [42], [45]. The Court of Appeal could have proceeded on the basis that there was no good reason to review its recent decisions on this issue [42], [45]. Nonetheless, the Court considered Mr Gourlays submissions in full and gave detailed reasons for rejecting them on their merits [42], [45]. Insofar as the decision whether to award costs against the Parole Board turns on matters of practice, it would not be appropriate for the Supreme Court to impose on the Court of Appeal its own assessment of the merits of the parties arguments [49]. Mr Gourlays appeal must therefore be dismissed [50].

The Finance Act 2015 introduced a regulatory scheme requiring wholesalers supplying duty paid alcohol to be approved by Her Majestys Revenue and Customs Commissioners (HMRC or the Commissioners) under section 88C of the Alcoholic Liquor Duties Act 1979 (ALDA). Approval may only be given if HMRC are satisfied that the person seeking to carry on the activity is a fit and proper person to do so. OWD, Hollandwest and Budge Brands (the wholesalers) were already involved in the wholesale supply of duty paid alcohol when the scheme was introduced. They needed HMRC approval to continue to trade. Approval was refused because HMRC were not satisfied that they were fit and proper. Each wholesaler appealed to the First tier Tribunal (FTT) against the decision, inviting HMRC to permit them to continue trading whilst the appeals were pending. When HMRC refused to permit this, the wholesalers brought judicial review proceedings in the High Court challenging that refusal, and seeking orders that would permit them to carry on trading until after the determination of the FTT appeal. Having failed in the High Court, they obtained a measure of relief in the Court of Appeal, but on terms that they did not find satisfactory. Both they and HMRC appeal to this court against aspects of the Court of Appeals decision. The principal questions for determination in this court Two principal questions arise for determination on the appeal. The first, in broad outline, is this: when HMRC have refused a persons application for approval under section 88C of ALDA, what, if any, power do they have to permit that person to carry on trading pending the determination of an appeal to the FTT? HMRCs case is that they have no power to grant temporary approval pending the determination of a wholesalers appeal. The wholesalers argue that section 88C of ALDA enables HMRC to grant such approval or, failing that, HMRC can do so under section 9 of the Commissioners for Revenue and Customs Act 2005 (the 2005 Act). The Court of Appeal held that temporary approval can be granted to a person under section 88C of ALDA, but not under section 9 of the 2005 Act. However, contrary to the wholesalers argument, it held that considerations of hardship and the impact on the persons appeal rights were irrelevant to the decision whether to grant temporary approval to cover the appeal period, and that HMRCs focus must be purely on whether the person was fit and proper for that limited purpose. The issues that require attention in relation to this first question are, therefore, whether HMRC have any power at all, and if so, on what basis it is to be exercised. The second question concerns the position if HMRC either do not have power to permit trading pending the determination of an appeal to the FTT, or have power but decline to exercise it. In those circumstances, what interim relief, if any, can the High Court grant to ensure that the appeal to the FTT is not thwarted by the wholesaler going out of business whilst awaiting its determination? The Court of Appeal held that the High Court was able to grant injunctive relief under section 37 of the Senior Courts Act 1981. Drawing on CC & C Ltd v Revenue and Customs Comrs [2014] EWCA Civ 1653; [2015] 1 WLR 4043 (CC & C Ltd), it held that relief would only be granted in rare circumstances, but that this could include where there was a clear and properly evidenced claim that a failure to grant interim relief would render the appeal to the FTT illusory. This accorded with the position of HMRC. The wholesalers disagreed with the narrow limits imposed by the Court of Appeal on the scope for relief, but were refused permission to appeal to this court on that ground. Accordingly, the hearing before us began on the basis that the High Court had power to grant injunctive relief, exercisable in exceptional circumstances. As a result of questions which arose in the course of oral argument about the High Courts power, we received further written submissions on the point, after the hearing. Although both parties continued to support the existence of a power in the High Court, the issue needs attention in this judgment. The regulatory scheme: background The regulatory scheme introduced by the Finance Act 2015 was designed to combat fraud in relation to tax due on alcohol. Alcoholic liquors are subject to excise duty. Generally the charge to duty arises at the moment of importation into the United Kingdom, or at the moment of production here. The charge normally falls exclusively on the distiller/manufacturer/importer of alcohol. The duty paid is then reflected in the price of the alcohol as it passes down the supply chain. Alcohol was, however, entering the supply chain without the requisite duty being paid, resulting in a significant loss of tax revenue. There had long been a requirement for those dealing in duty suspended alcohol to be approved by HMRC, but there was no equivalent requirement for those dealing in duty paid alcohol. The introduction of the present scheme, known as the Alcohol Wholesaler Registration Scheme (AWRS), closed that gap. The statutory provisions Section 54 of the Finance Act 2015 inserted Part 6A and Schedule 2B into ALDA. Much of the fine detail of the statutory provisions is not necessary for present purposes and what follows is, at times, a broad summary only. A central concept is controlled activity. By virtue of section 88A(8), controlled activity means selling controlled liquor wholesale, offering it for sale wholesale, or arranging in the course of a trade or business for it to be sold or offered for sale wholesale. By section 88A(2), a sale is of controlled liquor if it is a sale of dutiable alcoholic liquor on which duty is charged under the Act at a rate greater than nil, with the excise duty point for the liquor falling at or before the time of the sale. By section 88A(3), subject to some exceptions, the sale is wholesale if the seller makes the sale, in the course of his trade or business, to a trade or business buyer, for the buyer to sell or supply in the course of his trade or business. It must be noted that one of the exceptions is, by section 88A(3)(d), an excluded sale. Section 88A(7) defines a sale as an excluded sale if it is of a description prescribed by or under regulations made by the Commissioners. Section 88B gives the Commissioners power to make provision, by regulations, for certain matters, including as to the cases in which sales are, or are not, to be treated for the purposes of Part 6A as (amongst other things) wholesale sales, and sales of controlled liquor. Section 88C deals with approval to carry on controlled activity. It provides: 88C. Approval to carry on controlled activity (1) A UK person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners under this section. (2) The Commissioners may approve a person under this section to carry on a controlled activity only if they are satisfied that the person is a fit and proper person to carry on the activity. (3) The Commissioners may approve a person under this section to carry on a controlled activity for such periods and subject to such conditions or restrictions as they may think fit or as they may by or under regulations made by them prescribe. (4) The conditions or restrictions may include conditions or restrictions requiring the controlled activity to be carried on only at or from premises specified or approved by the Commissioners. (5) The Commissioners may at any time for reasonable cause revoke or vary the terms of an approval under this section. (6) In this Part approved person means a person approved under this section to carry on a controlled activity. Section 88D obliges HMRC to maintain a register of approved persons. It is to contain such information relating to approved persons as the Commissioners consider appropriate (section 88D(2)). HMRC may make publicly available such information contained in the register as they consider necessary to enable those who deal with a person who carries on a controlled activity to determine whether the person in question is an approved person in relation to that activity (section 88D(3)). This publicly available information is important as section 88F provides that [a] person may not buy controlled liquor wholesale from a UK person unless the UK person is an approved person in relation to the sale. Section 88G supports the statutory scheme by establishing various criminal offences. For example, section 88G(1) makes it an offence to contravene section 88C(1) by selling liquor wholesale knowing, or having reasonable grounds to suspect, that the buyer is carrying on a trade or business and the liquor is for sale or supply in the course of that trade or business. Buying controlled liquor from an unapproved person, contrary to section 88F, is also an offence, if the person knows or has reasonable grounds to suspect the unapproved status of the supplier. The Wholesaling of Controlled Liquor Regulations 2015 The Wholesaling of Controlled Liquor Regulations 2015 (SI 2015/1516) (the 2015 Regulations) were made under Part 6A of ALDA. They provide for the manner in which an application for approval is to be made and processed. The application must be on a prescribed form, regulation 3(1). If HMRC refuse an application, they must notify the applicant of that In the present context, the following provisions of the Regulations are of note: i) ii) and give reasons, regulation 4(4). iii) In addition to any conditions or restrictions imposed by HMRC under section 88C(3) of ALDA, the approval of a person is subject to such conditions and restrictions as the Commissioners may prescribe, regulation 7. iv) HMRC may prescribe descriptions of sales that are excluded sales for the purposes of Part 6A of ALDA, regulation 10. v) Part 6 of the Regulations provides for dutiable alcoholic liquor to be subject to forfeiture where a person contravenes section 88C or section 88F or any condition or restriction imposed under Part 6A of ALDA or under the Regulations. vi) By regulation 2, prescribed means prescribed by the Commissioners in a published notice. Excise Notice 2002: Alcohol Wholesaler Registration Scheme Excise Notice 2002: Alcohol Wholesaler Registration Scheme (EN2002) was made under ALDA and the 2015 Regulations. It explains what the AWRS is about and addresses various particular aspects of it. It has been amended many times since its first publication in November 2015. The version which is relevant to the decisions of HMRC in this case is that in force between 21 June 2016 and 26 March 2017; unless otherwise specified, references are to that version. Existing wholesalers who sought approval after the introduction of the scheme were informed, by the relevant version of EN2002, that they could continue to trade as normal until receipt of HMRCs decision (para 6.5). Para 6.10 set out how HMRC would assess whether an applicant was fit and proper to carry on a controlled activity. It contains a list of relevant points, and a general statement that: HMRC must be satisfied the business is genuine and that all persons with an important role or interest in it are law abiding, responsible, and dont pose any significant threat in terms of potential revenue non compliance or fraud. Para 10 dealt with conditions and restrictions. It said that HMRC may decide to apply specific conditions or restrictions where they consider that a wholesaler is fit and proper to be approved but some additional controls are still needed, which would be used to address specific concerns HMRC had about the business. In contrast, if HMRC considered a wholesaler was not fit and proper to be approved, approval would be refused or revoked rather than allowing the wholesaler to trade subject to added conditions. In para 15(4), which dealt with revocation by HMRC of an existing approval, circumstances were identified in which approval was likely to be revoked, and it was pointed out that the controlled activity could not be carried on after revocation. However, the paragraph ended with a passage to which it will be necessary to return: Where HMRC think the circumstances merit, they may allow a reasonable period of time to wind down the business, for example, to dispose of any legitimate stock. Doubts have been expressed about HMRCs power to allow a period of grace in this way. The version of EN2002 published on 27 March 2017 put the position in relation to disposal of stock on winding down on a rather firmer footing by providing, under regulation 10 of the 2015 Regulations, for such sales to be excluded sales. Challenging a refusal of approval A wholesaler can challenge HMRCs refusal of approval by seeking a review of it by HMRC and/or appealing to the FTT. Sections 13A 16 of the Finance Act 1994 (FA 1994) (as amended by article 1(2) of and Schedule 1 to the Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (SI 2009/56) govern the review and appeal process. Reviews are covered by section 15A F. By section 15F, the nature and extent of the review are such as appear appropriate to HMRC in the circumstances, but account must be taken of representations made. The review may conclude that the decision is to be upheld, varied, or cancelled. An appeal to the FTT can be brought either as an alternative to seeking a review or, where there has been a review, against the review decision. The provisions as to appeals are set out in section 16. A central concept is that of a relevant decision. This is defined in section 13A which, in subsection (2)(a) (j), lists the decisions which are relevant decisions. A decision for the purposes of Part 6A of ALDA as to whether or not a person is to be approved and registered, or as to the conditions or restrictions on approval and registration, features in subsection (2)(j). By section 16(8) of FA 1994, such a decision is classed as an ancillary matter. Section 16(4) sets out the FTTs powers on an appeal in relation to any decision as to an ancillary matter, or any decision on the review of such a decision. It provides that the tribunals powers shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say (a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct; (b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a review or further review as appropriate of the original decision; and (c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by a review or further review as appropriate, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken the that unreasonableness do not occur when comparable circumstances arise in future. repetitions of for securing These limited powers contrast with the wider powers available to the FTT, under section 16(5), when dealing with other relevant decisions which are not classed as decisions as to ancillary matters. In those appeals, the FTT can also vary the decision or quash it and substitute its own decision. It is to be noted that, in ALDA appeals such as the present ones, FA 1994 gives the FTT no power to suspend the effect of a challenged decision pending an appeal, nor is any such power contained in the Tribunal Procedure (First tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273). This contrasts with the position in appeals relating to relevant decisions which come within section 13A(2)(a) (h) of FA 1994, which include a variety of decisions as to payment of duties, levies, assessments, security and penalties. Normally, by section 16(3) of FA 1994, an appeal in such a case will not be entertained unless the amount of duty which HMRC have determined, by the challenged decision, is payable has been paid or deposited with them. However, the appeal can proceed without full payment if HMRC issue a certificate stating that they have accepted such security as appears to them to be adequate, or that, on the grounds of the hardship that would otherwise be suffered by the appellant, they do not require security or have accepted such lesser security as they consider appropriate. If no certificate is issued, the appellant will be able to bring the appeal nonetheless, if the FTT decides that the certificate should not have been refused, and are satisfied that HMRC have been given such security (if any) as it would have been reasonable for them to accept. The Court of Appeal in the present case said (para 29) that this amounts to the FTT having a circumscribed power to provide interim relief. The Commissioners of Revenue and Customs Act 2005, section 9 Section 9(1) of the 2005 Act confers ancillary powers on HMRC in the following terms: The Commissioners may do anything which they think (a) necessary or expedient in connection with the exercise of their functions, or (b) functions. incidental or conducive to the exercise of their Section 51(2) of the 2005 Act provides the following assistance in interpreting the meaning of functions: (2) In this Act (a) function means any power or duty (including a power or duty that is ancillary to another power or duty), and (b) a reference to the functions of the Commissioners or of officers of Revenue and Customs is a reference to the functions conferred by or by virtue of this Act, or (i) (ii) by or by virtue of any enactment passed or made after the commencement of this Act. Issue 1A: what powers do HMRC have under section 88C ALDA to permit trading pending the determination of an appeal to the FTT? When HMRC refuse approval under section 88C, do they nevertheless have power under that section to grant temporary approval pending a wholesalers appeal to the FTT? To recap, HMRC deny that they have any such power under section 88C, whereas the wholesalers support the conclusion of the Court of Appeal that there is power, but challenge the Court of Appeals conclusion that hardship and the impact on a wholesalers appeal rights are irrelevant to the exercise of the power. The Court of Appeals reasoning for its conclusion about section 88C is to be found in paras 52 to 54 of the judgment of Burnett LJ, with whom the other members of the court agreed. Para 52 deals with HMRCs submissions. As Burnett LJ explained, it had been readily accepted on behalf of HMRC through their counsel (then, as now, Sir James Eadie QC) that subsections (2) and (3) [of section 88C] hang together. It was not a question simply of whether, in the abstract, a person was fit and proper, HMRC accepting that it was feasible for persons to fail to satisfy HMRC that they are fit and proper to conduct a wholesale alcohol business without conditions, but to satisfy them that they are fit and proper subject to conditions. Nevertheless, HMRC submitted that a temporary approval lasting a finite period could not be a proper basis to use the combined operation of the two subsections. It is important to identify the precise reason for this submission, which is reflected in HMRCs submissions to this court as well. It was, as summarised in the concluding lines of para 52: because there would have been no relevant change of circumstance relating to fitness since the general decision was made. Mr Eadie QC accepted that the statute envisaged an approval being given for a limited time but only, as he put it, if HMRC were satisfied on day one that the person concerned was fit and proper. Para 53 set out the following examples of situations in which approval might properly be limited in some way: In the following two paragraphs, Burnett LJ set out his conclusion in these terms: 53. It is possible to envisage that HMRC might have well founded concerns about the operation of a business at one of is locations, but not others. A condition limiting trading to specified sites might follow. They might consider the involvement of a particular proprietor, director or senior employee as critical to the grant of approval. By contrast, they might consider the involvement of a particular person to be inimical to the grant of approval. They might limit the period of approval to coincide with the known plans for retirement of an individual of significance in the business. They might limit the period to enable systems to be improved about which there is some concern. They might insist on the production of regular information to meet underlying concerns about record keeping and the like. 54. A conclusion that a person is not fit and proper for unconditional approval does not preclude conditional approval of that person. In my view HMRC have power under section 88C(3) to grant a temporary approval pending appeal if they conclude that a person is fit and proper for that limited period, perhaps with additional conditions. That is a possible conclusion that might be reached even if a general approval is being denied. In substance, if not in form, that is what HMRC were doing before 27 March when they purported to grant 30 days or more grace. The focus of a decision would remain whether the person was fit and proper but for the more limited purpose. Hardship and the impact on appeal rights would be extraneous considerations. Section 88C does not confer upon HMRC a broad discretionary power of approval but it is possible that they could conclude that a person is fit and proper for a limited time to continue trading. To the extent that HMRC apprehended that they had no power to do what was asked of them by the claimant, in my view they erred. 55. there is nothing in the statutory scheme relied upon by HMRC which excludes the possibility of what amounts to an ancillary application for temporary approval in the face of a refusal of the general application. In the light of these conclusions, Burnett LJ determined (para 87) that HMRCs decisions that they had no power to grant temporary approval to the wholesalers to trade pending appeal should be quashed, and the question returned to them for reconsideration. HMRC submit that the Court of Appeal was wrong to conclude that they had power to grant temporary approval to the wholesalers under section 88C. However, if it is found that section 88C does confer such power then, in HMRCs submission, the Court of Appeal was correct as to the criteria for the exercise of the power. It is necessary to appreciate exactly how HMRC put their criticism of the Court of Appeal. The following passage from their written case goes to the heart of the argument: It is therefore submitted that HMRC could not properly conclude someone was not fit and proper to carry on the controlled activity (even on conditions which include the power to approve for a limited time only); yet then separately conclude in response to a request that the same business and leadership might be fit and proper to carry on the controlled activity pending appeal to the FTT against the first finding (Emphasis in the original) From this, it is clear that HMRCs argument is addressed to a situation in which they have already concluded that someone is not fit and proper even for a limited period, and whatever conditions might be imposed. In their submission, the introduction of an extraneous factor which has nothing to do with fitness and propriety (ie the fact that an appeal is pending) cannot alter this assessment of fitness. The wholesalers appear to interpret HMRCs argument rather differently. They have taken HMRC to be contending that whether a person is fit and proper is an absolute question, that must be determined without considering whether the imposition of a time limit or other conditions might make it possible to approve someone as fit and proper. For example, they refer, in their written case, to HMRCs thesis that unless it is satisfied that a person is fit and proper to carry on a controlled activity (ie without consideration of whether that person might be fit and proper for a period, with conditions, with restrictions or any combination of these) it cannot approve a person under section 88C If HMRC were advancing the thesis there set out, it would be an untenable one, in my view. But as I have said, they are not doing so. They are not insisting that absolute fitness and propriety is required in all cases, but addressing the situation where, as here, they have concluded that no conditions or limitations will enable them to be satisfied that the person is fit and proper. The power to incorporate such conditions/limitations is always present, and the relevant technical guidance given to HMRC officers making AWRS decisions specifically drew attention to the option of approval with conditions, including an example of imposing a time limit on the approval. On the facts of these appeals, HMRC had nevertheless concluded that the wholesalers were not fit and proper. I would accept their argument that in those circumstances there is no power to grant temporary approval pending appeal. If the person is not fit and proper for even a limited period of time, that holds good whatever purpose the time limited approval would be designed to achieve. If considerations of hardship and the impact that maintaining the decision would have on the efficacy of the appeal were relevant to HMRCs decision, it might be different. But I am satisfied that the Court of Appeal was right to conclude that such considerations are not to the point. Section 88C operates through the medium of HMRC being satisfied that the person is a fit and proper person to carry on the activity, and the impact upon the person, or his business, of a refusal of approval is not material to that evaluation. The wholesalers invite attention to HMRCs practice, prior to the 27 March 2017 version of EN2002, of allowing a winding down period to a business whose approval was revoked, where they thought the circumstances merited it (see para 21 above). They submit that such temporary approval was granted under section 88C, noting that the Court of Appeal saw it that way (para 54), and submitting that it demonstrates the existence of the power that HMRC now deny. HMRC respond that the provision of a winding down period is different in character from temporary approval pending appeal, being closed ended, and presuming the rationality of the refusal. In my view, the practice (now, of course, ceased) of continuing approval during a winding down period cannot prove the existence of the power for which the wholesalers contend. It may serve to provoke a closer look at the scope of section 88C, but if, after that exacting inspection, the conclusion is reached that it does not encompass the power to grant temporary approval pending appeal, the fact that HMRC may have proceeded, in the past, on the basis of a looser construction of the section, does not alter that conclusion. It may not be irrelevant that HMRC took the opportunity in the 27 March 2017 EN2002 to regularise the position through the route of excluded sales (see para 22 above). Notwithstanding the earlier practice relating to a winding down period, I remain of the view that section 88C does not permit the temporary approval for which the wholesalers argue. Issue 1B: can HMRC give temporary approval pending appeal under section 9 of the 2005 Act? The wholesalers primary argument in the Court of Appeal, renewed as part of their case before this court, was that HMRC have power to grant approval pending appeal under section 9 of the 2005 Act. Section 9, which is set out in full at para 28 above, permits the Commissioners to do anything which they think necessary or expedient in connection with, or incidental or conducive to, the exercise of their functions. The Court of Appeal was not prepared to accept that this permitted the temporary approval sought. Burnett LJ gave this summary of his reasons for rejecting that construction: 35. In my judgment section 9 of the 2005 Act does not provide HMRC with power to approve persons as fit and proper to trade in wholesale alcohol pending appeal to the FTT, when they have concluded they are not fit and proper persons. Such an action could not be either necessary or expedient in connection with the exercise of their functions; nor would it be incidental or conducive to the exercise of their functions. It would be inconsistent with the statutory scheme. The wholesalers argue that there is nothing inconsistent with the statutory scheme in section 9 being interpreted as enabling HMRC to approve them to trade pending appeal. HMRC say, first, that the only route by which permission can be granted is the section 88C route, and secondly that to use section 9 for temporary approvals would run counter to the statutory scheme as a whole. Their first point is shortly stated: section 88C(1) provides that a person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners under this section (my italics). The wholesalers reply that there is nothing in section 88C(1) that prohibits HMRC from granting permission by a different route, and complain that if the provision were to be interpreted in this way, there would be no scope for the use of the powers set out in section 9. It is put this way in their written case: Allowing a decision maker to do something that that decision maker could otherwise not do in the performance of a function is precisely what ancillary and incidental powers do. If an ancillary power never enables the decision maker to do something that the decision maker otherwise lacks the power to do, then the ancillary power is left with nothing to do. I have no doubt that there are situations in which the sort of considerations identified by the wholesalers in this passage would lead the court to accept that the Commissioners have indeed got ancillary powers of one sort or another. But it all depends upon the general attributes, and detailed provisions, of the particular statutory scheme in relation to which the question arises, and the nature of the ancillary powers being considered. There are, in the authorities, plentiful statements to this effect, made in various contexts, see for example the following, from Hazell v Hammersmith and Fulham London Borough Council [1992] 2 AC 1 at p 31D E: The authorities deal with widely different statutory functions but establish the general proposition that when a power is claimed to be incidental, the provisions of the statute which confer and limit functions must be considered and construed. Section 9 concerns ancillary powers which are necessary or expedient in connection with the Commissioners exercise of their functions, or incidental or conducive to that exercise, not ancillary powers which undermine or contradict those functions. I do not accept that recourse can be had to it to provide an alternative route to time limited approval, supplementing section 88C in the way that the wholesalers suggest. I say that not only because of the terms of section 88C itself, which permit authorisation only under that section (approval given by the Commissioners under this section), but also because of the attributes of the whole scheme of which section 88C forms part. Rather than assisting the Commissioners exercise of their functions under the scheme, such a use would, in my view, undermine the scheme. To start with section 88C itself, it is important to take sections 88C(1) and (2) together. By subsection (1), a person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners under section 88C. By subsection (2), the Commissioners may only give the required approval if they are satisfied that the person is a fit and proper person to carry on the activity. So where, as here, they are not so satisfied, they may not give approval under section 88C, and without approval under section 88C, the person may not carry on the controlled activity. Amongst the consequences that follow if he does act without approval, the person will be guilty of an offence (section 88G). It can hardly be said to be necessary or expedient to the exercise of the functions under that tightly drafted scheme, which has at its heart that the Commissioners will only approve people to sell controlled liquor wholesale if satisfied that they are fit and proper to do so, for the Commissioners to be able to draw upon the ancillary powers in section 9 to grant approval to someone in relation to whom they are not satisfied, nor yet can that be said to be incidental or conducive to the exercise of their functions under the scheme. Furthermore, approval granted under section 9 would not be of any practical assistance to the wholesaler unless he were also put on the register of approved persons under section 88D. By sections 88F and 88G, a person may commit a criminal offence by buying from a person who is not approved, and would need to have recourse to the register to confirm the status of the wholesaler before buying. By using section 9 powers to enter the wholesaler on the register, HMRC would appear to be holding out as fit and proper a person in relation to whom they have formed the opposite view. It is unreal to suggest, as the wholesalers do, that this could be satisfactorily addressed by HMRC including information about the wholesaler under section 88D(2), to the effect that the approval is only temporary pending the outcome of the wholesalers appeal to the FTT and that actually HMRC do not consider the person fit and proper. But, says Mr Coppel QC for the wholesalers, it is necessary to look at HMRCs functions as a whole, not just their functions under section 88C, or under Part 6A of ALDA. I readily accept that as a general proposition, but I do not think that it justifies HMRC using section 9 to grant temporary approval. Mr Coppel relies on the fact that HMRCs section 88C decisions are attended by a review and appeal process, in which HMRC have a role, including a duty to give effect to whatever decision the FTT reaches. He argues that, as part and parcel of their functions in the appeal process, HMRC must be able to take steps to ensure the effectiveness of the wholesalers right to have his appeal heard, especially bearing in mind that, even if it ultimately turns out that approval was wrongly refused, the wholesaler will receive no compensation for the damage suffered whilst awaiting the appeal, including potentially the final closure of the business. So, where implementation of the challenged decision pending appeal is likely to result in the wholesaler suffering substantial, and irreversible, harm, he submits that HMRC must take as their starting point that temporary approval should be granted so as to keep the appeal right alive, although he would concede that the starting point could be displaced if the likelihood and scale of harm to the revenue would be greater, if temporary approval were to be granted, than the likelihood and scale of the harm to the wholesaler from a refusal. I am not persuaded by this argument. I do not accept that the fact that HMRCs decision is subject to an appeal, to which they are a party, is a proper foundation upon which to conclude that it is necessary or expedient, incidental or conducive, to the exercise of their functions to assume a power to grant temporary approval so as to preserve the wholesalers position pending that appeal. With certain other types of relevant decision, HMRC do have a role in facilitating an appeal to the FTT, by relaxing the normal requirement for duty to be paid prior to an appeal. As can be seen from para 27 above, they can effectively waive the standard security required under section 16(3) of FA 1994 on the grounds of hardship, and, if they are not prepared to do so, the FTT can intervene to allow the appeal to proceed nevertheless, if it decides that HMRC should not have refused to provide the required certificate. It cannot be said, therefore, that the review and appeal provisions were drafted without heed to the possibility that HMRC/the FTT might need powers to allow relief pending appeal, but when it comes to ancillary decisions such as the decisions in question here, there is nothing in sections 13A 16 of FA 1994 (see above at para 23 et seq), or in the Tribunal Procedure (First tier Tribunal) (Tax Chamber) Rules 2009, conferring any power on either HMRC or the FTT to suspend, or circumvent, the consequences of the decision that is being challenged pending determination of the appeal. R (Wilkinson) v Inland Revenue Comrs [2005] 1 WLR 1718 offers some insight as to how this absence of express power might bear upon the operation of a general provision such as section 9 of the 2005 Act. It concerned bereavement allowance, which at that time was payable only to widows and not to widowers. The House of Lords rejected the argument that section 1 of the Taxes Management Act 1970, which said that income tax shall be under the care and management of the Commissioners of Inland Revenue, could be construed as giving the revenue a discretionary power to grant an extra statutory concession allowing a widower to claim the equivalent to a widows bereavement allowance. Lord Hoffmann observed at para 21, with the agreement of the rest of the House, that the power could not be construed so widely as to enable the commissioners to concede, by extra statutory concession, an allowance which Parliament could have granted but did not grant. Although the context was not the same as in the present case, section 1 of the Taxes Management Act 1970 not being concerned with ancillary powers in quite the same way as section 9 of the 2005 Act, it can similarly be said here that section 9 should not be construed as conferring on HMRC a power to grant temporary approval pending appeal which Parliament could have conferred through Part 6A or the FA 1994, but did not. That temporary approval pending appeal is not part of the scheme is perhaps underlined also by the fact that express provision was made in section 54(12) of the Finance Act 2015 for the time from which the prohibition on trading in section 88C was to apply, namely when the wholesalers application to HMRC was disposed of (ie by section 54(13), has been determined by HMRC, withdrawn, abandoned, or otherwise ceases to have effect), rather than from the conclusion of any appeal against the decision on the application. Issue 2: High Court powers (1) The approach of the Court of Appeal in CC & C Ltd and in the present case In the Court of Appeal, it was common ground that the High Court has power to grant injunctive relief to assist a wholesaler pending his appeal to the FTT, but there was a dispute between the parties as to the basis on which relief could be granted. In determining this issue, the Court of Appeal drew heavily upon its earlier decision in CC & C Ltd and it will be necessary to look, therefore, at that decision. There are considerable similarities between CC & C Ltd and the present case, although CC & C Ltd concerned wholesale trade in duty suspended goods, not duty paid goods. Those trading wholesale in duty suspended goods were required to be approved and registered by HMRC. The claimant company had been approved and registered for some years, when HMRC revoked the registration on the basis that it was no longer fit and proper. Like HMRCs decisions in the present case, the decision in CC & C Ltd was classed, for the purposes of sections 13A 16 of the FA 1994, as a decision relating to an ancillary matter. The company appealed to the FTT against the decision and also commenced proceedings in the Administrative Court to obtain interim relief pending the determination of the appeal, claiming that there was a risk that it would be irreparably damaged meanwhile. Underhill LJ, with whom the other members of the court agreed, had no doubt that the court has jurisdiction, in the formal sense, under section 37(1) of the [Senior Courts Act 1981] to make an order of the kind sought (para 38, and see also Lewison LJs short judgment commencing at para 48). The court was concerned with the approach that should be taken to the exercise of that jurisdiction. At para 39, Underhill LJ said that it was trite law that where Parliament has enacted a self contained scheme for challenging decisions, it would normally be wrong for the High Court to permit such decisions to be challenged by way of judicial review. He cited a passage from a judgment of the Privy Council, in Harley Development Inc v Comr of Inland Revenue [1996] 1 WLR 727, 735 736, culminating in the following: Their Lordships consider that, where a statute lays down a comprehensive system of appeals procedure against administrative decisions, it will only be in exceptional circumstances, typically an abuse of power, that the courts will entertain an application for judicial review of a decision which has not been appealed. Underhill LJ set out in paras 41 and 42 why, where Parliament could have made provision for suspensory orders to be made pending appeal to the FTT but had not done so, the court was not entitled to intervene to grant a trader interim relief simply on the basis that there is a pending appeal with a realistic chance of success. But, he said, it did not follow that there were no circumstances in which the court may grant such relief, and he noted that HMRC did not so contend. He went on, in paras 43 and 44, to set out when relief may be granted. He said that: where the challenge to the decision is not simply that it is unreasonable but that it is unlawful on some other ground, then the case falls outside the statutory regime and there is nothing objectionable in the court entertaining a claim for judicial review or, where appropriate, granting interim relief in connection with that claim. A precise definition of that additional element may be elusive and is unnecessary for present purposes. The authorities cited in the Harley Development case refer to abuse of power, impropriety and unfairness. [Counsel for HMRC] referred to cases where HMRC had behaved capriciously or outrageously or in bad faith. Those terms sufficiently indicate the territory that we are in, but I would sound a note of caution about capricious and unfair. A decision is sometimes referred to rhetorically as capricious where all that is meant is that it is one which could not reasonably have been reached; but in this context that is not enough, since a challenge on that basis falls within the statutory regime. As for unfair, I am not convinced that any allegation of procedural unfairness, however closely connected with the substantive unreasonableness alleged, will always be sufficient to justify the intervention of the court: [counsel for HMRC] submitted that cases of unfairness would fall within the statutory regime to the extent that the unfairness impugned the reasonableness of the decision. As I have noted above, the types of unfairness contemplated in [R v Inland Revenue Comrs, Ex p Preston [1985] AC 835] which is the source of the use of the term in the Harley Development case were of a fairly fundamental character. But since procedural unfairness is not relied on in this case I need not consider the point further. Summarising his conclusion at para 44, he said that the court may entertain a claim where it is arguable that the decision was not simply unreasonable but was unlawful on one of the more fundamental bases identified above. He said that such cases will, of their nature, be exceptional. The CC & C case was not one of them, and relief was not available. following components: In the present case, Burnett LJ analysed the ratio of CC & C as having the 61. (i) The High Court has jurisdiction to grant an injunction maintaining registration pending appeal to the FTT, which has been revoked by HMRC, when a parallel challenge to that decision is made in judicial review proceedings. (ii) The jurisdiction should not be exercised simply on the basis that the person concerned has a pending appeal with a realistic chance of success. If the decision is challenged only on the basis that (iii) HMRC could not reasonably have come to it, the case falls within section 16 of the Finance Act 1994 and the court should not intervene. (iv) If the challenge to the decision is on some other ground outside the statutory regime the court may entertain judicial review or grant interim relief. (v) A definition of the additional element needed is elusive but would include abuse of power, impropriety and unfairness as envisaged in Harley Development Inc v Comr of Inland Revenue [1996] 1 WLR 727. Having lost their argument that CC & C Ltd had been decided per incuriam or should be distinguished, the wholesalers accepted that their cases did not fall within any of what Burnett LJ described (para 73) as the exceptions identified as examples in CC & C Ltd but submitted that interim relief should be granted because otherwise there was a risk that their rights under article 6 and article 1 protocol 1 (A1P1) of the European Convention on Human Rights (ECHR) would be violated. The argument, both in relation to article 6 and A1P1, was put on the basis that by the time the appeal is heard, the wholesalers would have ceased to be viable and their appeals to the FTT would be ineffective. The Court of Appeal found it sufficient to deal with the argument by focussing on article 6 alone, finding it unnecessary to explore the altogether more complicated route of A1P1, para 82, and in due course I will take the same approach. Burnett LJs conclusion was as follows: 81. In my opinion, a statutory appeal against a refusal of approval which is unable to provide a remedy before an appellant has been forced out of business, rendering the appeal entirely academic (or theoretical or illusory in the language of the Strasbourg Court) is capable of giving rise to a violation of article 6 which the High Court would be entitled to prevent by the grant of appropriate injunctive relief under section 37 of the 1981 Act. To that extent, the exceptions enumerated by Underhill LJ in the CC & C Ltd case [2015] 1 WLR 4043 can be expanded to include cases in which a claimant can demonstrate, to a high degree of probability, that the absence of interim relief would violate its ECHR rights. Moreover, such an injunction need not be ancillary to a claim for judicial review of any decision of HMRC, although it might be. Burnett LJs reasoning for his conclusion (see paras 77 to 81) involved the following steps: i) The dispute concerns civil rights and obligations for the purposes of article 6, see Tre Traktrer AB v Sweden (1989) 13 EHRR 309, in which the Strasbourg court concluded that there was a violation of article 6 where a company had its licence to sell alcohol revoked by two administrative bodies, neither of which was a court or tribunal. ii) Unlike in Tre Traktrer AB, the wholesalers have appeals to the FTT which satisfy the requirement for a hearing by a tribunal. iii) However, the ECHR is intended to guarantee rights that are practical and effective, not theoretical or illusory, see Airey v Ireland (1979) 2 EHRR 305 and other authorities set out at para 80 of Burnett LJs judgment. iv) If an appellant is forced out of business before the statutory appeal concludes, the appeal is rendered theoretical or illusory. It is important to recognise the lack of debate that there was in the Court of Appeal about this element of the case. At para 76, Burnett LJ recorded that Sir James Eadie accepted on behalf of HMRC that the High Court may grant an interim injunction to vindicate the Convention rights of the wholesalers, though emphasising (1) that (as Burnett LJ himself expressly accepted) the first port of call must be the FTT itself, which could be expected to expedite the appeal to avoid the problem, and (2) that proper evidential support would be required for an argument based on the ECHR. It was not argued on behalf of the wholesalers that interim relief should issue automatically, without it being demonstrated that the wholesaler could not survive until the appeal was heard. As Burnett LJ set out at para 83, Mr Coppel recognised that factors such as the strength of the appeal and the nature of the concern that led to the refusal to approve would be factors to be weighed when considering whether to grant an injunction, reflecting the fact that the scheme exists to protect the public purse and legitimate traders. Burnett LJ set out the sort of compelling evidence that would be required before relief would be granted: 85. A claimant seeking an injunction would need compelling evidence that the appeal would be ineffective. It would call for more than a narrative statement from a director of the business speaking of the dire consequences of delay. The statements should be supported by documentary financial evidence and a statement from an independent professional doing more than reformulating his clients stated opinion. Otherwise, a judge may be cautious about taking prognostications of disaster at face value. It should not be forgotten that a trader who sees ultimate failure in the appeal would have every incentive to talk up the prospects of imminent demise of the business, in an attempt to keep going pending appeal. Equally, material would have to be deployed which provided a proper insight into the prospects of success in an appeal. There is no permission filter for an appeal to the FTT. The High Court would not intervene in the absence of a detailed explanation of why the decision of HMRC was unreasonable. It must not be overlooked that the FTT is not exercising its usual appellate jurisdiction in these types of case where it makes its own decision. Finally, there would have to be detailed evidence of the attempts made to secure expedition in the FTT and the reasons why those attempts failed. Burnett LJ anticipated that the circumstances in which it was appropriate for injunctive relief of this kind to issue would be rare, as practical relief would be achievable by obtaining temporary approval from HMRC under section 88C (not a route that I consider available for the reasons set out earlier) or, failing that, by seeking expedition from the FTT. The evidence in support of injunctive relief in the present cases had not been sufficient to satisfy either of the two judges who entertained the proceedings at first instance that the appeals would be rendered nugatory without interim relief, as Burnett LJ set out: 86. In the ABC Ltd case William Davies J considered himself bound by the CC & C Ltd case to refuse injunctive relief even if the claimants could show that the appeal would be rendered nugatory. However, at para 48 he concluded that the evidence did not suggest that was inevitable. The evidence demonstrated that there was a prospect that the appeal would be rendered nugatory, no more. In the X Ltd and Y Ltd case, Andrew Baker J dealt with the strength of the evidence relating to the business prospects of the claimants in paras 39 and 40. He was unpersuaded by the assertions that they would not survive the appeal process. In those circumstances, even if either judge had considered a free standing injunction by reference to rights guaranteed by article 6 of the ECHR, it would have been refused. (2) The limited scope of Issue 2 This courts engagement in the issue as to the High Courts powers is narrowly confined for procedural reasons. Only the wholesalers sought to appeal against the Court of Appeals determination on this aspect of the case. Their notice of appeal sought permission to appeal on three grounds. The first ground challenged the Court of Appeals decision that section 9 of the 2005 Act did not give HMRC any power to permit temporary trading pending the outcome of an appeal to the FTT. Permission was given for this ground to be pursued and I have addressed it above. Ground 2 was that the Court of Appeal were wrong to conclude that it was only in exceptional circumstances that the High Court could grant interim relief pending an appeal to the FTT. Ground 3 was that the Court of Appeal were wrong to conclude that even where implementation of HMRCs decision prior to the outcome of an appeal to the FTT would violate a wholesalers ECHR rights, the High Court should not grant interim relief as the first port of call must be to the FTT to expedite the appeal. Permission to appeal was not granted in relation to either of these grounds. In these circumstances, both parties understandably approached the appeal to this court on the basis that the High Court has power to grant injunctive relief where the wholesalers article 6 rights would otherwise be infringed by the business ceasing to be viable before the FTT could consider the matter, rendering the appeal provided by statute entirely academic, and that the circumstances in which that power would be exercised were as set out in CC & C Ltd, as interpreted by the Court of Appeal in the present case. This courts refusal of permission to appeal in relation to the High Courts injunctive powers immunises that position from challenge in the present proceedings. Furthermore, it has not been the role of this court to review the established finding that the evidence produced by the wholesalers in support of their application for injunctive relief on an article 6 basis failed to meet the required standard (see para 86 of Burnett LJs judgment, set out above). The question that arose during the course of the hearing before us was the discrete question of what form the High Courts order could legitimately take, where a case for injunctive relief was made out. If minded to make an order, what, if anything, could the High Court order HMRC to do to protect the position of a wholesaler pending appeal? Supplementary written submissions were provided following the hearing directed to this point. (3) The parties supplementary submissions In their supplementary submissions, both sides adhere to the position that the Court of Appeal was correct to conclude that the power in section 37 of the Senior Courts Act 1981 could be exercised in the AWRS context, in exceptional cases. HMRC emphasise the breadth of the High Courts power under section 37, being a power to make orders and grant interim relief whenever it considers it just and convenient to do so, including when necessary to protect effective rights of access to court, whether derived from article 6 of the ECHR or the common law. This enables it, they say, to make an order which will have the effect of holding the ring pending the appeal, unconstrained by the limitations and conditions imposed upon HMRC by the legislation and public law principles. They also submit that Parliament can be taken to have enacted the AWRS on the basis that the High Courts powers to grant interim relief remain intact. In their submission, an order can be made requiring them to give the wholesaler provisional approval, under section 88C, to sell controlled liquor, and also to add the wholesaler to the section 88D register. They support this on the basis that, although they could not act in this way of their own initiative, they could do so pursuant to a court order because the courts role is part of the statutory scheme. In the alternative, HMRC propose that an order could be made requiring them to exercise their power, under regulation 10 of the 2015 Regulations (see para 16 above), to exclude certain descriptions of sales from ALDA. As with temporary approval, HMRC would not, they stress, independently use this power to exclude sales in circumstances like the present, but they would do so if ordered by the court to do that. If this route were to be taken, the wholesaler would be outside the ALDA regime whilst the appeal to the FTT was pending. It would be necessary, therefore, for the court to impose conditions that would need to be met by the wholesaler for the exclusion to continue, for example as to record keeping and due diligence. HMRC seek to explain why their own exclusion of sales to allow a winding down period (see above) should not be taken to indicate that they have power, without court intervention, to grant a wholesaler relief pending an appeal. They draw a distinction between their limited exercise of power, which is consistent with the statutory scheme, and an open ended exclusion pending appeal. The latter would, in their view, be a stretch too far for them, but not for the High Court when intervening on the basis that the case was exceptional and that there was a need to protect effective access to justice. Like HMRC, the wholesalers also submit that the High Court can order HMRC to approve and register a wholesaler temporarily under section 88C and section 88D. They say this on the basis that unless HMRC has decided that the wholesaler is not fit and proper to carry on any controlled activity for any period of time, regardless of all conditions and restrictions HMRC might impose, there is a residual power in the High Court to order HMRC to act under section 88C and D. Failing that, they propose that the order could focus upon section 9 of the 2005 Act. If neither of those routes is available, they rely upon section 8(1) of the Human Rights Act 1998, which they say gives the court power to act to ensure the efficacy of the appeal to the FTT, as required by article 6 ECHR (and, they say, A1P1). (4) Discussion It will be apparent, from what I have set out of their submissions, that the parties do not share the courts anxieties as to what, if any, form of order the High Court could make to safeguard the position of a wholesaler, without requiring HMRC to trespass impermissibly outside the statutory provisions relevant to the AWRS. As a result of this, the court has not had the benefit of any testing analysis, in the written or oral argument, of the parties essentially agreed position. This is not intended as a criticism (the parties were entitled to make the legal submissions they considered appropriate) but the result is that the process has not entirely dispelled the courts unease about the form that the High Courts order might legitimately take. To illustrate the point, let me take the suggestion that the High Court could order HMRC to grant temporary approval under section 88C to a wholesaler whose application they have rejected, but who has appealed to the FTT and has established an article 6 case for relief pending the appeal. Section 88C approval, whether indefinite or limited in time, depends on HMRC being satisfied that the wholesaler is fit and proper to carry on the controlled activity; that is an essential condition for approval under the section. For matters to have reached this point, however, HMRC must necessarily have concluded that they are not satisfied that the wholesaler is fit and proper, even for a limited period of trading. If the High Court orders HMRC to grant temporary approval to the wholesaler in these circumstances, it is necessarily requiring HMRC to be satisfied when they are not satisfied, and I question how that can properly be done. That example points to a more fundamental concern. Generally the High Courts power to order a person to do something by mandatory injunction is exercisable for the purpose of making that person do something that he has it within his powers to do and should have done, but has failed to do. Here, the court has concluded, and HMRC agree, that there is in fact nothing which HMRC can properly do in the exercise of their statutory functions. They may fairly be said to have no relevant power which they could legitimately exercise in this context without straying outside the purpose for which the power was given. In such circumstances, a conclusion that the High Court could nonetheless solve the problem by granting an injunction looks worryingly like endorsing the exercise of some sort of inherent authority to override an Act of Parliament, on the basis that the end justifies the means. It would take a lot of persuading for me to conclude that this would be a proper exercise of the High Courts undoubtedly wide power to grant injunctive relief, but the parties agreement that it is permissible has closed off adversarial submissions on the point. The absence of debate between the parties makes it undesirable to make any definitive pronouncement as to whether an appropriate form of order might be found as a vehicle for the exercise, by the High Court, of its power to grant relief to a wholesaler pending an appeal to the FTT. Since the case for relief was not, in fact, made out on the evidence in the present case (see para 86 of the Court of Appeal judgment, set out at para 61 above), it is unnecessary to do so, and I will say no more on the subject. It should be noted that Mr Coppel invites the court to broaden its interpretation of section 88C of ALDA and section 9 of the 2005 Act by viewing them with ECHR considerations in mind, and/or bearing in mind article 47 of the Charter of Fundamental Rights and Freedoms of the European Union. Just as I am uneasy about accepting that the statutory scheme can be interpreted in such a way as to enable the High Court to come to the assistance of a wholesaler whose ECHR rights are in issue, so I do not readily see how section 88C and section 9 could be more broadly interpreted to the same end. I need not say more on the subject, however, as Mr Coppels argument would not, in any event, assist the wholesalers in this case, given that their evidence did not establish that their ECHR rights are endangered. Conclusions I would allow HMRCs appeal against the Court of Appeals order remitting to HMRC the question of whether the wholesalers should be given temporary approval under section 88C. HMRC do not, in my view, have power, in circumstances such as the present ones, to grant such temporary approval under that section. I would dismiss the wholesalers appeal against the Court of Appeals determination that HMRC do not have power to grant temporary approval under section 9 because, in my view, the Court of Appeal were right. LORD HUGHES: (with whom Lord Sumption agrees) For the reasons so clearly set out by Lady Black, I agree that: (i) HMRC has no power under section 88C of the Alcoholic Liquor Duties Act 1979 (ALDA) to approve temporarily an existing trader whom it has determined not to be a fit and proper person even for a short period and even subject to conditions; and (ii) nor has HMRC any power to do this under section 9 of the Commissioners for Revenue and Customs Act 2005; moreover (iii) although this is not for decision in the present case, it is also difficult to see, where a trader has been refused registration, on the grounds that HMRC is not satisfied that it is a fit and proper person, even for a limited period or on conditions, that a power to preserve its ability to trade pending appeal to the FTT can be found in the High Court. As to (iii), it is highly significant that HMRC, which sponsored the legislation in question, thought it right to contend in these proceedings that the High Court does have the third mentioned kind of power pending appeal, albeit only in cases where it is clearly established that otherwise good grounds of appeal would be rendered nugatory if the power did not exist. The principle underlying that approach is correct, and responsible. Neither in English law nor under the ECHR is there any general right to an appeal against an adverse decision, such as the one here under consideration, viz a determination that a trader is not a fit and proper person to be approved under ALDA. But in this instance a right of appeal has been conferred by section 16 of the Finance Act 1994, albeit the grounds upon which it can succeed are limited: see para 25 of Lady Blacks judgment. Where such a right exists in law it would potentially be a breach of article 6 ECHR (right to a fair trial), read with article 13 (right to an effective remedy) if it were rendered illusory or nugatory by the absence of any power to suspend or stay the adverse decision of HMRC until the appeal can be determined. In the particular case of a trader who had an existing business at the time when the registration scheme introduced by section 88C of ALDA, his right of appeal to the FTT might be rendered illusory or nugatory if he would be forced out of business before a good case on appeal could be determined. There may be few who are genuinely in this position, and with the passage of time those thus affected must be a reducing number. But some are enough to result in potential incompatibility of the legislation with the ECHR. It is not possible for courts to invent a remedial legislative provision where, as seems here to be the case, the language of the self executing scheme adopted by ALDA and of the appellate structure adopted by the Finance Act 1994 do not admit of a construction which allows for a power to stay a decision of HMRC pending appeal. Nor, if the courts reading of the legislation is correct, can there be a remedy under section 8 of the Human Rights Act, since there is no unlawfulness if no other course is possible see section 6(2). But if potential incompatibility is to be avoided, those responsible for legislation in this field may wish urgently to address amendment, for example to give either the FTT or the High Court a limited power to impose a stay pending appeal in defined circumstances.

The Finance Act 2015 introduced a regulatory scheme requiring wholesalers supplying duty paid alcohol to be approved by Her Majestys Revenue and Customs Commissioners (HMRC) under section 88C of the Alcoholic Liquor Duties Act 1979 (the 1979 Act). Approval may only be given if HMRC are satisfied that the person seeking to carry on the activity is a fit and proper person to do so. OWD, Hollandwest and Budge Brands (the wholesalers) were already involved in the wholesale supply of duty paid alcohol when the scheme was introduced. They needed HMRC approval to continue to trade. HMRC refused as they were not satisfied that the wholesalers were fit and proper. Each wholesaler appealed to the First tier Tribunal (FTT) against the decision. They asked HMRC to permit them to continue trading whilst the appeals were pending. HMRC refused to do so and the wholesalers brought judicial review proceedings in the High Court challenging that refusal. The High Court dismissed their claims. The Court of Appeal held that temporary approval can be granted to a person under section 88C of the 1979 Act, but not under section 9 of the Commissioners for Revenue and Customs Act 2005 (the 2005 Act). Contrary to the wholesalers argument, it held that considerations of hardship and the impact on the persons appeal rights were irrelevant to the decision on temporary approval. The Court of Appeal further held that if HMRC was not able or willing to permit trading pending the appeal, the High Court was able to grant injunctive relief under section 37 Senior Courts Act 1981. Relief (i.e. a mandatory injunction requiring temporary approval of the wholesalers) would only be granted in rare circumstances, including where there was a clear and properly evidenced claim that a failure to grant interim relief would render the appeal to the FTT futile. The wholesalers appeal and HMRC cross appeal to the Supreme Court. The two questions considered are: (1) What power does HMRC have to permit a person to carry on trading pending the determination of an appeal to the FTT? (2) If HMRC does not have such a power or refuses to exercise it, what interim relief can the High Court grant? The Supreme Court unanimously allows HMRCs appeal against the Court of Appeals conclusion that HMRC has the power to permit temporary trading under section 88C of the 1979 Act. It unanimously dismisses the wholesalers appeal against the Court of Appeals determination that HMRC does not have that power under section 9 of the 2005 Act. Lady Black gives the judgment of the court. Lord Hughes gives a concurring judgment, with which Lord Sumption agrees. Issue 1A the powers of HMRC under section 88C of the 1979 Act HMRC has concluded that the wholesalers were not fit and proper, regardless of any conditions that could be imposed, including a time limit on the approval. In those circumstances, HMRC do not have the power to grant temporary approval pending appeal. If the person is not fit and proper for even a limited period, that holds good whatever purpose the time limited approval would be designed to achieve. The Court of Appeal was right to conclude that considerations of hardship and the impact of maintaining the decision on the efficacy of the appeal were not material to the evaluation under section 88C of whether a person is fit and proper [38]. HMRCs former practice of continuing approval during a winding down period does not prove the existence of the power for which the wholesalers contend [40]. Issue 1B the powers of HMRC under section 9 of the 2005 Act Section 9 permits HMRC to do anything which they think necessary or expedient in connection with, or incidental or conducive to, the exercise of their functions [42]. It is not concerned with ancillary powers that undermine or contradict those functions. Recourse cannot be had to section 9 to provide an alternative route to time limited approval, supplementing section 88C in the way that the wholesalers suggest. This is not only because section 88C itself only permits authorisation under that section, but also because of the attributes of the whole scheme of which section 88C forms a part [45]. By using section 9 powers to enter a wholesaler on the register, HMRC would appear to be holding out as fit and proper a person in relation to whom they have formed the opposite view [46]. The fact that HMRCs decision is subject to an appeal is not a proper foundation upon which to conclude that it is necessary or expedient, incidental or conducive, to the exercise of their functions to assume a power to grant temporary approval [48]. Issue 2 High Court powers In the Court of Appeal, it was common ground that the High Court has the power to grant injunctive relief to assist a wholesaler pending his appeal to the FTT, but there was a dispute as to the basis on which relief could be granted [50]. The two judges at first instance were not satisfied that the evidence in support of injunctive relief was sufficient, and the wholesalers did not have permission to appeal to the Supreme Court in relation to the circumstances in which the High Court may grant injunctive relief [61 63]. The question that arose during the hearing was what form the High Courts order could legitimately take, where a case for injunctive relief was made out [64]. If the High Court orders HMRC to grant temporary approval to the wholesaler where HMRC has concluded that the wholesaler is not fit and proper, it would necessarily be requiring HMRC to be satisfied of the opposite [70]. The High Courts power to order a mandatory injunction is exercisable for the purpose of making a person do something that he has it within his powers to do, yet here there is nothing HMRC can properly do in the exercise of their statutory functions [71]. However, the absence of debate between the parties makes it undesirable to make a definitive pronouncement on this matter, and the fact that the case for relief was not made out in the present case means it is unnecessary to do so [72]. Lord Hughes adds that the legislation may be incompatible with the European Convention on Human Rights, where traders who had an existing business when the registration scheme was introduced, and who are refused approval but have good grounds for appeal, might be forced out of business before their appeal could be determined [77].

The principle of open justice is one of the most precious in our law. It is there to reassure the public and the parties that our courts are indeed doing justice according to law. In fact, there are two aspects to this principle. The first is that justice should be done in open court, so that the people interested in the case, the wider public and the media can know what is going on. The court should not hear and take into account evidence and arguments that they have not heard or seen. The second is that the names of the people whose cases are being decided, and others involved in the hearing, should be public knowledge. The rationale for the second rule is not quite the same as the rationale for the first, as we shall see. This case is about the second rule. There is a long standing practice that certain classes of people, principally children and mental patients, should not be named in proceedings about their care, treatment and property. The first issue before us is whether there should be a presumption of anonymity in civil proceedings, or certain kinds of civil proceedings, in the High Court relating to a patient detained in a psychiatric hospital, or otherwise subject to compulsory powers, under the Mental Health Act 1983 (the 1983 Act). The second issue is whether there should be an anonymity order on the facts of this particular case. The facts The appellant is now 46 years old. He has had mental health problems for much of his life and in his twenties these became so severe that he was compulsorily admitted to a psychiatric hospital under section 2 of the 1983 Act. There he met and formed a relationship with another patient but it did not last. Shortly after his release from a second period in hospital he murdered her and her new boyfriend. It was a particularly savage killing which must have caused untold suffering to the victims and has continued to cause great grief to their families. In January 1997 he was convicted of murdering them both, the jury rejecting his defence of diminished responsibility, a verdict at which the trial judge expressed himself astonished. His first conviction was set aside on appeal, in the light of fresh evidence as to his mental condition; but when he was retried in November 1998 he was again convicted of murder, the jury again rejecting his defence of diminished responsibility. He was sentenced to life imprisonment, with a tariff originally set at 15 years but reduced on review to 11 years. The reviewing judge commented that the outstanding feature of the case is the obvious sub normality or mental abnormality of the defendant. This tariff expired in May 2007. But in August 2000 the appellant had been transferred to a high security psychiatric hospital, pursuant to a direction of the Secretary of State under section 47 of the 1983 Act. This permits the Secretary of State to transfer a person serving a sentence of imprisonment to be detained in hospital for psychiatric treatment if the grounds for doing so exist. The effect of an ordinary transfer is the same as the effect of an ordinary hospital order made in criminal proceedings under section 37 of the 1983 Act (section 47(3)). However, the Secretary of State may couple a transfer direction with a restriction direction under section 49 of the 1983 Act and did so in this case. This means that if the grounds for detaining the patient in hospital no longer exist, the Secretary of State may return the patient to prison to serve the remainder of his sentence (section 50(1)(a)). While the patient is in hospital, however, a transfer with restrictions has the same effect as a restriction order imposed by a court under section 41 of the 1983 Act (section 49(2)). This means, among other things, that the usual power of the patients responsible clinician to grant him leave of absence from the hospital under section 17 of the 1983 Act, and the power of the hospital managers to transfer him to another hospital under section 19 of the Act or the regulations made thereunder, and the power of the responsible clinician or the hospital managers to discharge him from hospital under section 23 of the Act, can only be exercised with the consent of the Secretary of State (section 41(3)(c)). The Secretary of State also has his own powers, to lift the restrictions if they are no longer required to protect the public from serious harm (section 42(1)), or to discharge the patient, either absolutely or conditionally (section 42(2)), and to recall a conditionally discharged patient to hospital (section 42(3)). But if a transferred prisoner is no longer suitable for hospital treatment, the Secretary of State may, instead of returning him to prison, exercise the same powers of releasing him on licence or subject to supervisions as he could have exercised had the patient been remitted to prison (section 50(1)(b)). In August 2007, the appellant was transferred from the high security hospital to a private sector medium secure psychiatric hospital, where he remained until October this year. From 2008, he had unescorted leave within the hospital grounds (which does not require the consent of the Secretary of State). From 2009, he also had escorted leave in the community, where he did voluntary work. In July 2012, his responsible clinician applied to the Secretary of State for consent for the appellant to have unescorted leave in the community. It is uncontroversial that unescorted leave in the community is usually an important component in assessing a patients suitability for discharge from hospital. That consent was refused by letter dated 13 December 2012. Patients subject to restriction orders or directions may apply annually to the First tier Tribunal under section 70 of the 1983 Act. The Tribunal has a duty, under section 73 of the Act, to discharge a patient who is subject to a restriction order, either absolutely or conditionally, if the grounds for detaining him in hospital no longer exist. But if the patient is subject to a restriction direction, the Tribunal has no power to discharge him. Instead, under section 74(1), the tribunal must: (a) notify the Secretary of State whether in its opinion, the patient would, if subject to a restriction order, be entitled to be absolutely or conditionally discharged under section 73; and (b) if the tribunal notifies him that the patient would be entitled to be conditionally discharged, may recommend that in the event of his not being discharged under this section he should continue to be detained in hospital. Where (a) applies, the Tribunal shall direct the absolute or conditional discharge of the patient if, within 90 days of the notification, the Secretary of State informs the Tribunal that it may do so (section 74(2)). On 25 April 2013, the First tier Tribunal, having heard the appellants case, notified the Secretary of State that he would have been entitled to a conditional discharge. In their view, he was not then suffering from mental disorder of a nature or degree which made it appropriate for him to be detained in hospital for medical treatment; it was not necessary for his own health or safety or for the protection of other persons that he should receive such treatment, provided that his discharge was conditional; and appropriate medical treatment was available for him, provided that the discharge was conditional and subject to the conditions they proposed, which included supervision, supported accommodation and further treatment. The Tribunal also recommended, pursuant to section 74(1)(b), that if he were not discharged he should remain in hospital. The Secretary of State could have sought to appeal that decision but did not do so. Instead, he followed his policy that the release of persons sentenced to life imprisonment should be determined by the Parole Board. Accordingly he referred the case to the Parole Board. Section 74(5A) of the 1983 Act provides that applications and references to the Parole Board may be made in respect of a patient subject to a restriction direction where the Tribunal has recommended that a patient who would otherwise be entitled to a conditional discharge should remain in hospital if not discharged. Following the Tribunals decision, the appellants responsible clinician again applied for the Secretary of States consent for him to have unescorted community leave. Consent was again refused in a letter dated 11 July 2013. In October the Secretary of State agreed to retake that decision, but in a letter dated 18 October 2013, consent was again refused. The claimant applied for judicial review of that decision in November 2013; in December 2013, the High Court ordered that the appellant be anonymised in the proceedings; this was continued at the end of December when permission to apply for judicial review was granted. The claim was heard by Cranston J in January 2014: [2014] EWHC 167 (Admin). He rejected the appellants challenge to the lawfulness of the Secretary of States decision. He had earlier invited the parties submissions on whether the appellant should remain anonymous. In response, the responsible clinician wrote to the judge to request that the anonymity order remain in force for the following reasons: 1. The hospital is a secure mental health hospital which provides care and treatment for a large number of patients with various offences and who continue to pose risks to staff and others. 2. Naming the hospital would lead to enhanced procedural, physical and relational security having to be put in place. 3. The hospital staff would need to be vigilant to monitor the safety of the individual in terms of the media interests and the impact this may have on [the patient] and on other patients who are detained in hospital with him and their attitude to him. 4. High profile nature of the case which would attract media interest leading to contact with the hospital and consequences of managing this interest on a daily basis. 5. Distress caused to relatives of the victims in this case. Impact of media interest on [the patients] care, 6. treatment and progress at the hospital. 7. patient] if his whereabouts were made public. Previous concerns in relation to the safety of [the Cranston J dealt with the issue in a single paragraph (para 35): previous proceedings about this claimant are publicly available and I cannot see the justification for anonymity: the public have a right to know what I have decided about his claim for judicial review: R (M) v Parole Board [2013] EWHC 1360 (Admin), [2013] EMLR 23, paras 47 49. However, Dr H has written requesting that the hospitals identity and that of the staff be concealed, to protect both the claimant and the other patients from potential intrusion. That is a reasonable request and there be an order of anonymity to that extent. The claimant was refused permission to appeal in relation to the dismissal of his claim but granted it in relation to the refusal of anonymity. The Court of Appeal dismissed his appeal. The original anonymity order has, however, remained in force pending the determination of his appeal to this court. To bring the history up to date, in September 2015, the Parole Board directed the release of the appellant on life licence. It explained that the Risk Management Plan which is put forward is robust, that your risks of causing serious harm in the community are now minimal and that any increase in risk is highly likely to be detected before any danger arises, that your risks can be safely managed in the appropriate community setting which is now proposed and that the point has been reached at which it is no longer necessary for the protection of the public that you should continue to be detained. Hence his release was conditional upon a place being available at a particular care home which specialises in rehabilitation services. The Parole Board also imposed a number of conditions in addition to the standard conditions contained in all life licences. These included a requirement to comply with the conditions in a protocol governing his residence in the care home. Both the Parole Board and the care home required him to continue to undertake psychiatric treatment under a psychiatrist, a psychologist and a community psychiatric nurse. He also agreed to change his name: I understand that my case has received a high level of media attention, and in order to facilitate my successful reintegration into the community, changing my name may protect me and those around me from unwanted media attention which could undermine the effectiveness of my placement and its aims. I agree to arrive at [the care home] using my intended new name and change my name by deed poll in the first week of arrival. I will then manage all my affairs under this name from the point of discharge. The appellant was in fact released from hospital in October 2015. The Civil Procedure Rules These are civil proceedings in the High Court, governed by the Civil Procedure Rules, rule 39.2. Rule 39.2(1) to (3) deal with the publicity of the hearing. It is worth quoting these in full, although the publicity of the hearing is not the issue in this case: (1) The general rule is that a hearing is to be in public. (2) The requirement for a hearing to be in public does not require the court to make special arrangements for accommodating members of the public. (3) A hearing, or any part of it, may be in private if (a) publicity would defeat the object of the hearing; it involves matters relating to national security; (b) (c) it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality; (d) interests of any child or protected party; it is a hearing of an application made without (e) notice and it would be unjust to any respondent for there to be a public hearing; a private hearing is necessary to protect the (f) it involves uncontentious matters arising in the administration of trusts or in the administration of a deceased persons estate; (g) interests of justice. the court considers this to be necessary, in the A protected party is a party, or intended party, who lacks capacity, within the meaning of the Mental Capacity Act 2005, to conduct the proceedings (CPR rule 21.1(c) and (d)). Some compulsory patients lack this capacity and some do not. Rule 39.2(4) deals with anonymity: (4) The court may order that the identity of any party or witness must not be disclosed if it considers non disclosure necessary in order to protect the interests of that party or witness. The rationale for a general rule that hearings should be held in public was trenchantly stated by Lord Shaw of Dunfermline in the leading case of Scott v Scott [1913] AC 417, at 477. He quoted first from Jeremy Bentham: In the darkness of secrecy, sinister interest and evil in every shape have full swing. Only in proportion as publicity has place can any of the checks applicable to judicial injustice operate. Where there is no publicity there is no justice. Publicity is the very soul of justice. It is the keenest spur to exertion and the surest of all guards against improbity. It keeps the judge himself while trying under trial. The security of securities is publicity. He also quoted the historian Henry Hallam: Civil liberty in this kingdom has two direct guarantees; the open administration of justice according to known laws truly interpreted, and fair constructions of evidence; and the right of Parliament, without let or interruption, to inquire into, and obtain redress of, public grievances. Of these, the first is by far the most indispensable; nor can the subjects of any state be reckoned to enjoy a real freedom, where this condition is not found both in its judicial institutions and in their constant exercise. This longstanding principle of the common law is reflected in article 6(1) of the European Convention on Human Rights: In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. It has been held acceptable to provide that a whole class of hearings, such as those relating to children, should normally be held in private: B v United Kingdom (2002) 34 EHRR 19. As the right is that of the litigant, this provision has normally become relevant in cases where the court proposes, in pursuance of one the exceptions to the normal rule, to sit in private, but the litigant wishes the case to be heard in public. However, in many, perhaps most cases, the important safeguards secured by a public hearing can be secured without the press publishing or the public knowing the identities of the people involved. The interest protected by publishing names is rather different, and vividly expressed by Lord Rodger in In re Guardian News and Media Ltd [2010] UKSC 1; [2010] 2 AC 697, para 63: Whats in a name? A lot, the press would answer. This is because stories about particular individuals are simply more attractive to readers than stories about unidentified people. It is just human nature. And this is why, of course, even when reporting major disasters, journalists usually look for a story about how particular individuals are affected. The judges [have recognised] that editors know best how to present material in a way that will interest the readers of their particular publication, and so help them to absorb the information. A requirement to report it in some austere abstract form, devoid of much of its human interest, could well mean that the report would not be read and the information would not be passed on. Ultimately such an approach could threaten the viability of newspapers and magazines, which can only inform the public if they attract enough readers and make enough money to survive. Of course, there are now many more ways of disseminating information, through the electronic media, to which that last comment does not apply. However, Lord Rodger also pointed out that the identities of claimants may not matter particularly to the judges. But the legitimate interest of the public is wider than the interests of judges qua judges or lawyers qua lawyers (para 38). Furthermore, the fact that the parties have agreed to anonymity cannot absolve the court from balancing the interests at stake for itself. Indeed that is when there is the greatest need for vigilance (para 2). It is now trite law that restrictions on publicity involve striking a balance between the right to respect for the private life of the individuals concerned, protected by article 8 of the European Convention on Human Rights, and the right to freedom of expression, protected by article 10 of the Convention: In re S (A Child) (Identification: Restrictions on Publication) [2004] UKHL 47, [2005] 1 AC 593; In re British Broadcasting Corp [2009] UKHL 34; [2010] 1 AC 145; In re Guardian News and Media Ltd, above. There are even cases where anonymity is required because of the risk of death or really serious ill treatment, in violation of the rights protected by articles 2 and 3 of the Convention: A v British Broadcasting Corp (Secretary of State for the Home Department intervening) [2014] UKSC 25; [2015] AC 588. The arguments It is necessary to draw a distinction between ordinary civil proceedings in which a mental patient may be involved, whether as claimant or defendant, and proceedings which are about the compulsory powers of detention, care and treatment under the 1983 Act. It is a striking fact that none of the experienced counsel in this case could remember a case of this nature in which the patient had not been granted anonymity, except where the patient himself wished his name to be published (as, for example, in R (Von Brandenburg) v East London and The City Mental Health NHS Trust [2003] UKHL 58; [2004] 2 AC 280). If this be so, it is not difficult to understand why. Patients detained in hospital, or otherwise subject to compulsory powers, under the 1983 Act have the right to make periodical applications to the First tier Tribunal (Health, Education and Social Care Chamber) for their release. Section 78(1)(e) of the 1983 Act, in its original form, permitted the Lord Chancellor, when making procedural rules for Mental Health Review Tribunals, to make provision for enabling a tribunal to exclude members of the public, or any specified class of members of the public, from any proceedings of the tribunal, or to prohibit the publication of reports of any such proceedings or the names of any persons concerned in such proceedings. When the First tier Tribunal took over the jurisdiction of Mental Health Review Tribunals in England (but not in Wales) under the Tribunals, Courts and Enforcement Act 2007, that Act permitted the Tribunal Rules Committee to make rules about whether hearings should be in private or in public and imposing reporting restrictions (section 22 and Schedule 5, paragraphs 7(b) and 11(2)). Accordingly, rule 38(1) of the Tribunal Procedure (First tier Tribunal) (Health, Education and Social Care Chamber) Rules 2008 (SI 2008/2699) provides that all hearings in mental health cases must be held in private unless the Tribunal considers that it is in the interests of justice for the hearing to be held in public. Rule 14(7) provides that Unless the Tribunal gives a direction to the contrary, information about mental health cases and the names of any persons concerned in such cases must not be made public. When the 1983 Act was passed, the only way of challenging the decision of a Mental Health Review Tribunal was either by asking the Tribunal to state a case for the determination of the High Court of any question of law arising before them (under section 78(8) of that Act) or by way of judicial review (which became the more common practice). After the 2007 Act, an appeal lies on a point of law to the Upper Tribunal. Rule 37(1) of The Tribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698) provides that all hearings must be in public, with some exceptions, which include the Tribunals power, in rule 37(2), to direct that a hearing, or part of it, is to be held in private. However, rule 14(7) repeats the rule in the First tier Tribunal that Unless the Upper Tribunal gives a direction to the contrary, information about mental health cases and the names of any persons concerned in such cases must not be made public. There is thus a presumption of anonymity in both tiers of the tribunal system. The issue for them, therefore, is whether to make an exception if the patient wants to waive his anonymity: see the principles helpfully discussed in AH v West London Mental Health Trust [2010] UKUT 264 (AAC) and [2011] UKUT 74 (AAC). The other specialist jurisdiction dealing with people with mental disorders or disabilities is the Court of Protection. This decides whether or not, because of mental disorder, a person lacks the capacity to make certain kinds of decision for himself and if so, how such decisions are to be taken on his behalf. These include decisions about his care and treatment. Rule 90(1) of the Court of Protection Rules 2007 (SI 2007/1744) lays down the general rule that hearings are to be held in private. If the hearing is in private, the court may authorise the publication of information about the proceedings (rule 91(1)). The court may also direct that the whole or part of any hearing be in public (rule 92(1)). But in either case the court may impose restrictions on publishing the identity of the person concerned or anyone else or any information which might lead to their identification (rules 91(3) and 92(2)). The starting point in the Rules, therefore, is both privacy and anonymity. However, from January 2016, there will be a six month transparency pilot, in which the court will generally make an order that any attended hearing will be in public; but at the same time it will impose restrictions on reporting to ensure the anonymity of the person concerned and, where appropriate, other persons. Thus, in all the other jurisdictions dealing with the detention, care and treatment of people with mental disorders and disabilities, the starting point is usually privacy and always anonymity, although either or both may be relaxed. This reflects the long standing practice of the High Court in what were then called lunacy proceedings. In the leading case of Scott v Scott [1913] AC 417, it was acknowledged that proceedings relating to wards of court and to lunatics were different from ordinary civil and criminal proceedings. Viscount Haldane LC explained the position thus (p 437): The case of wards of court and lunatics stands on a different footing. There the judge who is administering their affairs, in the exercise of what has been called a paternal jurisdiction delegated to him from the Crown through the Lord Chancellor is not sitting merely to decide a contested question. His position as an administrator as well as a judge may require the application of another and overriding principle to regulate his procedure in the interest of those whose affairs are in his charge. In the two cases of wards of court and of lunatics the court is really sitting primarily to guard the interests of the ward or the lunatic. It may often be necessary, in order to attain its primary object, that the court should exclude the public. The broad principle which ordinarily governs it therefore yields to the paramount duty, which is the care of the ward or the lunatic. The Earl of Halsbury did not consider these two acknowledged cases as true exceptions to the general rule, for neither of these, for a reason that hardly requires to be stated, forms part of the public administration of justice at all (p 441 2). Earl Loreburn referred to the parental jurisdiction regarding lunatics or wards of court (p 445). Lord Atkinson similarly referred to the judges as representatives of the Sovereign as parens patriae exercising on his behalf a paternal and quasi domestic jurisdiction over the person and property of the wards for the benefit of the latter (p 462). Lord Shaw of Dunfermline, the most vehement exponent of the principle of open justice, added (p 483) that, in this parens patriae jurisdiction, The affairs are truly private affairs; the transactions are transactions truly intra familiam; and it has long been recognised that an appeal for the protection of the court in the case of such persons does not involve the consequence of placing in the light of publicity their truly domestic affairs. Maurice Kay LJ cited these passages in his judgment in the Court of Appeal, but dismissed them on the ground that they were not dealing with the same sort of decisions as this: The sort of statutory powers with which we are concerned did not exist at the time and public law litigation of this kind was virtually unknown. ([2014] EWCA Civ 1009, para 7). It is correct that the Judge and Masters in Lunacy, when dealing with the affairs of a person found lunatic by inquisition, were usually concerned with the protection and administration of his property. But the parens patriae jurisdiction extended to both the person and the property of the lunatic, until the Mental Health Act 1959 came into force. By that Act, the jurisdiction of the Court of Protection over the property and affairs of a person who lacked the capacity to manage them for himself was placed on a statutory footing. The procedure for finding a person lunatic by inquisition was no longer thought necessary and the royal warrant under the sign manual delegating the parens patriae powers of the Crown to the judges was revoked (see B Hoggett, The Royal Prerogative in relation to the Mentally Disordered: Resurrection, Resuscitation or Rejection?, in MDA Freeman (ed), Medicine, Ethics and the Law (1988)). However, the Mental Capacity Act 2005 has now extended the jurisdiction of the Court of Protection to cover the care and welfare of persons who lack capacity, including whether they should be deprived of their liberty in their own best interests. Nor is it correct that there were no statutory powers of the sort with which we are now concerned at the time of Scott v Scott. The Secretary of States power to transfer a prisoner to hospital is clearly descended from similar powers in the Criminal Lunatics Act 1884, while the contemporary predecessors to other compulsory powers in the 1983 Act can be discerned in the Lunacy Act 1890 and the Mental Deficiency Act 1913. The judicial safeguards for patients in those Acts were conducted in private. However, it is correct that there is a difference between cases where a court or tribunal is administering the property, care or treatment of a patient in his own best interests and cases which are concerned with the proper management of a patient who has in the past been dangerous. In R (M) v Parole Board (Associated Newspaper Ltd intervening) [2013] EWHC 1360 (Admin); [2013] EMLR 23, the Divisional Court discharged an anonymity order made in favour of a prisoner convicted of murder who had brought judicial review proceedings challenging the decision of the Parole Board not to recommend his transfer to open conditions. There was a public interest in knowing how such decisions were made. However, the court accepted that there might well come a time when the claimants identity and whereabouts would have to be protected in order to secure his safety and to facilitate his re entry into society (para 49). That case concerned a prisoner, not a psychiatric patient, and there was no significant interference with his article 8 rights (para 53). The closer analogy in this case, therefore, is with the position in the First tier and Upper Tribunals, but Maurice Kay LJ also dismissed this on the basis that they will often be deciding essentially medical issues (para 10) whereas the issues in judicial review cases of this type are quite different and involve the assessment of risk. With respect, that too is not correct. The Tribunal is concerned with essentially three questions: is the patient suffering from mental disorder or mental disorder of a nature or degree which makes it appropriate for him to be liable to be detained in a hospital for treatment; is it necessary for the health and safety of the patient or for the protection of other persons that he should receive such treatment; and is appropriate treatment available for him (section 72(1)(b)(i), (ii), (iia))? In the case of restricted patients there is a fourth question: is it appropriate for the patient to remain liable to be recalled to hospital for further treatment (section 73(1)(b))? In the case of transferred prisoners such as the appellant, there is a fifth question: if the patient would otherwise be entitled to be conditionally discharged, should he continue to be detained in hospital if he is not discharged (section 74(1)(b))? Thus the Tribunals are very much concerned with risk as well as with diagnosis. In R (Mersey Care NHS Trust) v Mental Health Review Tribunal [2004] EWHC 1749 (Admin); [2005] 1 WLR 2469, para 14, Beatson J quoted with approval the Tribunals reasons for finding that their privacy rules were a proper and proportionate departure from the principle of open justice and thus compatible with article 6 of the European Convention on Human Rights: By definition the issues which the mental health review tribunal has to deal with involve personal and clinical confidential information affecting individuals who are often very vulnerable and not always in a position to make an informed decision as to what may or may not be in their best interests. Questions of capacity may frequently arise and clinical progress may be affected by the consequences of publicity. Decisions on whether a restricted patient should be allowed leave of absence or transferred to another hospital also involve a mixture of clinical and risk factors. The two are often inseparable. Both community leave and transfer to a less secure hospital serve a mixture of therapeutic and risk assessment aims. They obviously aim to improve the patients mental health, overall well being and level of functioning. But they are also important components in assessing how well the patient has progressed, whether he can safely be managed in the community, and how close he is to being fit for discharge. They inevitably involve examination of confidential medical information about the patient. Judicial review of the Secretary of States decisions is no different, as is amply demonstrated by the substantive judgment of Cranston J in this case. There is a further factor, which could be called the chilling effect of a risk of future disclosure. This has at least two aspects. First, it is important in all medical treatment, but perhaps particularly in the treatment of mental disorder, that a relationship of trust is established between the patient and the doctors, therapists and nurses who are looking after him. If a patient fears that his confidence may have to be breached in the course of legal proceedings about his future care and treatment, he may be less inclined to be as open and frank as he should be in his dealings with them. Openness is an important component, not only in his treatment, but also in the assessment of risk. Second, it may inhibit him from bringing proceedings with a view to relaxing the very significant deprivation of liberty involved in compulsory admission to hospital for medical treatment, which brings with it, not only the power to detain potentially indefinitely, but also the power to impose medical treatment without consent. As such it is only compatible with the right to liberty, protected by article 5 of the Convention (and much treasured by the common law), if subject to regular independent review. There is, as already explained, no real risk that the patients confidence will be breached against his will in the course of proceedings either in the First tier and Upper Tribunals or in the Court of Protection. The real risk arises if a case reaches the High Court or Court of Appeal. This risk will apply to compulsory patients of all kinds, whether detained under the civil compulsory powers in Part II of the 1983 Act or under the criminal powers in Part III, should a case concerning them reach the Court of Appeal on appeal from the Upper Tribunal by either side. It will also apply to all restricted patients, whether detained under restriction orders or restriction directions, whose cases reach the Administrative Court by way of challenge to the Secretary of States decisions. Conclusion in principle The question in all these cases is that set out in CPR 39.2(4): is anonymity necessary in the interests of the patient? It would be wrong to have a presumption that an order should be made in every case. There is a balance to be struck. The public has a right to know, not only what is going on in our courts, but also who the principal actors are. This is particularly so where notorious criminals are involved. They need to be reassured that sensible decisions are being made about them. On the other hand, the purpose of detention in hospital for treatment is to make the patient better, so that he is no longer a risk either to himself or to others. That whole therapeutic enterprise may be put in jeopardy if confidential information is disclosed in a way which enables the public to identify the patient. It may also be put in jeopardy unless patients have a reasonable expectation in advance that their identities will not be disclosed without their consent. In some cases, that disclosure may put the patient himself, and perhaps also the hospital, those treating him and the other patients there, at risk. The publics right to know has to be balanced against the potential harm, not only to this patient, but to all the others whose treatment could be affected by the risk of exposure. Application in this case This was a horrendous crime which caused incalculable distress to the families of the victims. All victims have certain rights under the Domestic Violence, Crime and Victims Act 2004, mediated through the providers of probation services. When a transfer direction is given in relation to an offender sentenced for a sexual or violent offence, the provider must take all reasonable steps to find out whether the victims wish to make representations about the conditions to which the offender should be subject if discharged and to be provided with information about the conditions to be imposed if he is discharged (section 42). If they do, the Secretary of State must inform the probation provider if he is considering lifting the restriction, discharging the patient or varying the conditions of a conditional discharge. The Tribunal must inform the provider if an application or reference is made to it. The probation provider must forward any representations made by the victims to the Secretary of State or Tribunal (section 43). The Secretary of State or the Tribunal have to inform the provider of the outcome. If a victim has expressed a wish to be informed, the provider must take all reasonable steps to inform him (a) whether or not the offender is to be subject to any conditions in the event of his discharge, (b) if he is, of the details of any condition relating to contact with the victim or his family, (c) the date on which any restriction direction is to cease to have effect, and (d) such other information as the provider considers appropriate in all the circumstances of the case (section 44). These rights, though limited, should enable the providers to reassure the victims families in this case that the arrangements made for the discharge of the patient will not put them at risk in any way. The public too have an interest is knowing how difficult and sensitive cases of this sort are decided, both by the Secretary of State and by the court. But that public oversight is protected by holding the hearing in public, so that the kinds of evidence and arguments considered are known, even if the identity of the patient concerned is not. Understandably, the Secretary of State has adopted a neutral stance on this appeal. It is the media interest, so vividly described by Lord Rodger in In re Guardian News and Media, with which we are principally concerned. In favour of anonymity are all the general considerations about harm to the patients health and well being, the chilling effect of a risk of disclosure, both upon his willingness to be open with his doctors and other carers, and upon his willingness to avail himself of the remedies available to challenge his continued deprivation of liberty, long after the period deemed appropriate punishment for his crimes has expired. Added to those are the specific risk elements in this case identified in the letter from his responsible clinician (see para 9 above). The existence of a risk to the appellant from members of the public is also acknowledged in the letters of the Secretary of State and reflected in the Parole Boards requirement that he change his name. He is much more likely to be able to lead a successful life in the community if his identity is not generally known. The risk of jigsaw identification, of people putting two and two together, will remain despite the change of name. Putting all these factors into the balance, I conclude that an anonymity order is necessary in the interests of this particular patient. His regime before he left hospital, involving escorted leave in the community, demonstrated the need for anonymity and the case is even stronger now (as foreseen in R (M) v Parole Board). Without it there is a very real risk that the progress he has made during his long years of treatment in hospital will be put in jeopardy and his re integration in the community, which was an important purpose of his transfer to hospital, will not succeed. I would therefore allow this appeal and maintain the anonymity order in place.

The issues in the appeal were (1) whether there should be a presumption of anonymity in civil proceedings in the High Court relating to a patient detained in a psychiatric hospital or otherwise subject to compulsory powers under the Mental Health Act 1983 (the MHA 1983) and (2) whether there should be an anonymity order on the facts of this particular case. The appellant, C, who had a history of severe mental health problems, was convicted of murdering his former girlfriend and her partner in 1997. He was sentenced to life imprisonment with a tariff subsequently set at 11 years. During his imprisonment he was transferred to a high security psychiatric hospital on the direction of the Secretary of State for Justice under the MHA 1983 for psychiatric treatment, with a restriction order which meant that the appellant could not be granted leave of absence, transferred to another hospital, or discharged without the consent of the Secretary of State. In July 2012 the appellants responsible clinician applied unsuccessfully for consent for the appellant to have unescorted leave in the community to assess his suitability for discharge. The appellant applied for discharge to the Firsttier tribunal. On 25 April 2013 the tribunal notified the Secretary of State that conditional discharge (subject to supervision, supported accommodation and further treatment) would be suitable for the appellant, but that if he was not conditionally discharged he should remain in hospital. The Secretary of State referred the case to the Parole Board. The appellants responsible clinician then made a further application for consent for the appellant to have unescorted community leave, which the Secretary of State refused on 18 October 2013. The appellant applied for judicial review of that decision. In December 2013 the High Court ordered that the appellant be anonymised in the proceedings and granted permission to bring the claim. The claim was rejected by Cranston J, who also refused an application for the anonymity order to remain in force. The appellant appealed in relation to the refusal of anonymity, but the Court of Appeal upheld the judges order. The appellant brought a further appeal on the anonymity issue to the Supreme Court. In the meantime the Parole Board approved the appellants conditional release on life licence and he was released from hospital in October 2015. The Supreme Court unanimously allows the appeal against the refusal to maintain the anonymity order protecting the appellant. It finds that there is no presumption of anonymity and the question in High Court proceedings relating to the compulsory powers under the MHA 1983 is whether an order for anonymity is necessary in the interests of the patient. Such an order was necessary in the appellants interests in this case. Lady Hale gives the only substantive judgment. The rules governing privacy and anonymity in all civil proceedings in the High Court are found in rule 39.2 of the Civil Procedure Rules [15]. The general rule that hearings should be held in public is subject to established exceptions in relation to whole classes of hearings such as those relating to children, which should normally be heard in private [17]. Most of the important safeguards secured by a public hearing can be achieved without the press publishing or the public knowing the identities of the people involved, but it is for the court and not the parties to balance the interests at stake [18]. It is necessary to distinguish between ordinary civil proceedings in which a mental patient may be involved, and proceedings concerning the compulsory powers under the MHA 1983 [21]. For the latter there is a presumption of privacy and anonymity in the rules governing applications to the First tier and Upper tribunals [24]. Similar rules providing for anonymity are in place for the Court of Protection, the other specialist jurisdiction dealing with people with mental disorders or disabilities [25]. As regards the High Court, it was recognised by the House of Lords in the leading case of Scott v Scott [1913] AC 417 that the principle of open justice did not extend to proceedings relating to wards of court and to lunatics. The Court of Appeal in the present case wrongly treated this exception as limited to private law litigation concerned with the protection and administration of property, when in fact there were already statutory powers similar to the compulsory powers under the MHA 1983 at the time of the decision of the House of Lords, and the judicial safeguards for patients under those statutes were also conducted in private [29]. The closest analogy with the present case was with proceedings in the tribunals, which were concerned with risk as well as diagnosis when considering applications in respect of transferred prisoners and restricted patients [31]. The privacy rules in the tribunals were a proper and proportionate departure from the principle of open justice [32], as the hearings inevitably involved examination of confidential medical examination about the patient. Judicial review of the Secretary of States decisions as to discharge of such patients was no different [33]. Fear of disclosure of confidential information might inhibit a patient from frank dealings with his medical team and from bringing proceedings to challenge his detention or treatment [34]. The question in all these cases was that set out in CPR 31.2(4), namely whether anonymity was necessary in the interests of the patient. There should not be a presumption in favour of anonymity in every case but a balance should be struck between the public right to information about decisions in respect of notorious criminals and the potential harm to the patient and all others whose treatment could be affected by the risk of exposure [36]. The present case concerned a horrendous crime which caused incalculable distress to the families of the victims, who have statutory rights to be informed about the arrangements made for the discharge of the appellant should they so wish [37]. The public interest in knowing how difficult and sensitive cases of this sort were decided was protected by holding a public hearing, even if the identity of the patient concerned was not disclosed [38]. In this case there was a risk to the appellant from members of the public. He was much more likely to lead a successful life in the community if his identity was not generally known [39]. Putting all these factors into the balance an anonymity order was necessary in the interests of the appellant, without which there was a real risk that his long years of treatment and reintegration into the community would not succeed [40].

A person infringes a patent for a particular product if he makes, disposes of, offers to dispose of, uses or imports the product or keeps it see section 60(1)(a) of the Patents Act 1977 (the 1977 Act). The principal issue on this appeal concerns the meaning of the word makes. The other aspect of this appeal raises a number of issues arising out of section 68 of the 1977 Act. The background facts and the patent in suit Intermediate Bulk Containers An intermediate bulk container, unsurprisingly known as an IBC, is a large container, normally around 1000 litres in volume, used for the transport of liquids. Such containers face tough transport conditions. They must be capable of bearing heavy weights (as much as six tonnes, as they are often stacked four high), of withstanding prolonged or violent vibration, and of resisting the forces caused by the liquid splashing around inside, without buckling, cracking or springing leaks. IBCs of a two part construction, resting on a flat pallet (of wood, steel, or plastic) have been well known in the trade for many years. They consist of a metal cage into which a large plastic container (or bottle) is fitted. The bottle has to fit the cage snugly, as otherwise the cage will not provide full protection, and the walls of the bottle will not be properly supported. The general idea is shown by the prior art IBC which is illustrated in the description of the patent involved in this case: IBCs are used to transport a wide range of types of liquid. Often, the bottle cannot be reused, because it contains residues of a toxic liquid or because it has been physically damaged. While the cage also has a limited life span, which depends on a number of factors (such as the means and conditions of transport and climatic conditions), it has a significantly longer life expectancy than a bottle; the evidence suggested that, on average, it is about five or six times as long. Reconditioning Reconditioners engage in re bottling or cross bottling used IBCs. In either case the old bottle is removed, any damage to the cage repaired, and a new bottle is fitted within the cage. Re bottling involves replacing the bottle with a fresh bottle from the original manufacturer; cross bottling involves replacing the bottle with a bottle from a different source. Opinion in the industry is divided about cross bottling. Because the bottle is not specifically designed for the cage, the fit is not always as good as with a bottle from the original manufacturer. For instance, stabilising loops in the top of the bottle may not precisely match up with bars on the cage, or the bottle may not fit so as to drain properly without tipping. However, there appears to be a healthy market for cross bottled IBCs. The IBC market IBCs are normally sold by a manufacturer to a filler, who then uses the IBC to send its product to an end user. Fillers typically include large chemical companies, and end users include fizzy drink wholesalers, cosmetic suppliers and pharmaceutical companies. Manufacturers of new IBCs often also recondition their own original IBCs, but there are many suppliers of IBCs who are solely reconditioners. Reconditioners (whether or not they are the original manufacturers) normally collect used IBCs from end users, who have no further use for the used IBCs. The end users are sometimes, but by no means always, paid for these used IBCs by the reconditioners. After re bottling or cross bottling an IBC, the reconditioner offers the reconditioned product to fillers on the market in competition with the products of original manufacturers, and of other reconditioners. Reconditioned IBCs are, predictably, generally cheaper than new IBCs. The invention and the Patent in this case European Patent (UK) 0 734 967 (the Patent) has a priority date of 30 March 1995. Claim 1 of the Patent (the Claim) is the only relevant claim for present purposes. It is in the following terms (with added sub paragraphs): [A] Pallet container for the transporting and storing of liquids, having a flat pallet, an exchangeable inner container made of plastic material with an upper, closable filler opening and a lower emptying device and also, surrounding the inner container, one outer sleeve which consists of vertical and horizontal lattice bars made of metal which support the plastic inner container filled with liquid, [B] the lattice bars which are configured as tubes being indented at the intersection points to form trough like, double walled recesses extending in the longitudinal direction of the lattice bars [C] in such a manner that at each intersection point between the longitudinal edges of the recesses of two lattice bars lying perpendicularly one above the other there arise four contact points with a material accumulation respectively corresponding to the quadruple lattice bar wall thickness, and the four contact points of the two lattice bars being welded together at the intersection points, [D] characterised in that the trough like recesses of the vertical and horizontal lattice bars have a central raised part extending across the cross section of the recesses, [E] two lattice bars respectively lying one above the other at the intersection points are welded together at the four contact points of these raised parts and the incisions of the recesses of the lattice bars adjacent on both sides to the raised part [F] with the contact and weld points form restrictedly elastic bending points with a reduced bending resistance moment relative to the raised part for relieving the weld joints at the intersection points upon application of static and/or dynamic pressure on the lattice sleeve. Read on its own, the Claim is not immediately accessible, and it would normally be inappropriate to consider its meaning or effect without explaining its factual and technical context, including the description (i.e. the narrative preceding the claims) of the Patent, reasonably fully. However, given the issues which require consideration on this appeal, only the following points need be identified: i. Item [A] extends to a complete IBC, i.e. a pallet, a bottle (the inner container) and a cage (the outer sleeve); ii. The claimed inventiveness lies in items [D], [E], and [F], as is indicated by the introductory words characterised in that; iii. The inventiveness of the Patent lies in the idea of flexible weld joints in the cage, to increase its strength and durability; iv. More specifically, the inventiveness lies in the idea of introducing a dimple on either side of the weld and a central raised portion; vs The description of the Patent acknowledges that the bottle is exchangeable i.e. replaceable. The parties The proprietor of the Patent is Protechna S.A. (Protechna). The respondent, Schtz (U.K.) Limited (Schtz) is its exclusive licensee in this country, and is the leading manufacturer of rigid composite IBCs in the United Kingdom. Most of its sales are of new IBCs, but about 25% are rebottled IBCs, whose cages have, after any necessary repairs, been re bottled with new Schtz bottles. The appellant, Werit UK Limited (Werit), sells bottles (Werit bottles) for IBCs to a reconditioner, Delta Containers Limited (Delta). Delta acquires discarded IBCs originally put on the market by Schtz (Schtz IBCs), and replaces the original bottles (Schtz bottles) with Werit bottles, and then offers these cross bottled IBCs on the market. These cross bottled IBCs are therefore in competition with the original Schtz IBCs, marketed by, or with the express authority of, Schtz. Schtz objects to its cages being used by cross bottlers. Apart from the competitive consequences, Schtz claims to be concerned that publicity about any accident with a cross bottled product made with one of its cages might harm its reputation. Accordingly, it objects to Deltas re bottling activities and contends that they infringe the Patent. It is common ground that, if Delta thereby infringes the Patent, Werit does so. The legislation Section 60(1) of the 1977 Act (section 60(1)) is concerned with direct infringement, and provides in para (a) that a person infringes a patent if, where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise, without the consent of the patentee. Section 60(2) of the 1977 Act is concerned with indirect infringement, which includes the knowing supply to a primary infringer of any of the means which enables him to carry out the infringing act. (Hence the common ground referred to at the end of the preceding paragraph). Section 125(1) of the 1977 Act (section 125(1)) provides that unless the context otherwise requires, an invention for a patent for which a patent has been granted should be taken to be that specified in a claim of the specification of the patent , as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent shall be determined accordingly. Section 130(7) of the 1977 Act states that certain specified sections of that Act, including sections 60 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the [European Patent Convention and the Community Patent Convention] have in the territories to which those Conventions apply. The scope of protection afforded by a European patent is defined by Article 69(1) of the European Patent Convention (the EPC), as amended in 2000, which provides that [t]he extent of the protection conferred by a European patent shall be determined by the terms of the claims. It also provides in Article 64(1) that the protection to be afforded to an EPC patentee should be the same as that afforded to a patentee under a national patent. Article 25(a) of the Community Patent Convention (the CPC) prohibits the making, offering, putting on the market, or using a product which is the subject matter of the patent. The present litigation On 7 August 2008, Schtz issued these proceedings against Werit seeking relief on the ground that Werit infringed the Patent (as well as two earlier patents, also vested in Protechna and of which Schtz was the exclusive licensee). The proceedings were met with a denial of infringement on more than one ground, and a counterclaim for revocation of the three patents. By the time the case came on for hearing before Floyd J in March 2010, the issues concerned only two of the three patents, but there were other issues which he had to resolve. Following a seven day hearing, he gave a full and prompt judgment [2010] EWHC 660 (Pat), [2010] Bus LR 1244, [2010] FSR 22. The only question relevant to the present appeal which he had to consider was whether Delta infringed the Patent by mak[ing] the article claimed by the Claim, contrary to section 60(1)(a). On that question, Floyd J held, distinguishing the House of Lords decision in United Wire Ltd v Screen Repair Services (Scotland) Ltd, [2000] 4 All ER 353, [2001] RPC 24, that Deltas activity of replacing the inner container of a Schtz IBC with a Werit bottle does not amount to making the patented product. He justified this conclusion on the ground that the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim, and the inventive concept of [this claim] is wholly embodied in the Schtz cage paras 181, 197, and 206. Schtz appealed on a number of points. In a judgment given by Jacob LJ (with which Ward and Patten LJJ agreed), the Court of Appeal upheld the Judge on all other points, but reached a different conclusion on this issue. Relying on the reasoning of the Court of Appeal and House of Lords in United Wire, Jacob LJ said that it was inappropriate to determine the issue by reference to the inventive concept, and that [the] product (i.e. the IBC) ceased to exist when the bottle is removed, so [w]hat remained at that stage was merely an important component from which a new IBC could be made [2011] EWCA Civ 303, [2011] Bus LR 1510, [2011] FSR 19, paras 69, 75, and 64. Accordingly, Werit was found to be liable to Schtz to pay damages or account for its profits, arising out of its infringement of the Patent. The Court of Appeal also had to deal with an issue relating to costs and damages, arising out of section 68 of the 1977 Act (section 68), and the fact that Schtz had failed to register its exclusive licence. This led to two decisions, which were favourable to Schtz. Accordingly, Werit had to pay the great majority of Schtzs costs of the proceedings at first instance and almost all of Schtzs costs in the Court of Appeal. Werit was granted permission to appeal both against the substantive order that it had infringed the Patent and against the costs order. I shall first consider the main issue, namely whether the Court of Appeal were right to hold that Delta did indeed make the patented article contrary to section 60(1)(a), and I shall then address certain issues arising under section 68. Infringement: the proper approach to the meaning of makes Introductory It seems clear that the effect of section 60(1)(a) is that a person infringes a patent for a product if that person makes the product, as claimed in the patent concerned. As to the making, that is the verb used in section 60(1)(a). As to the product being defined by the claim, that seems clear from section 125(1). In any event, if it is not the product as claimed in the patent, it is hard to see what else the subject matter of the making could rationally be. The word makes must, of course, be interpreted contextually. In this case, the word should, in my view, be approached bearing in mind a number of considerations (which sometimes may be apparently irreconcilable in this field, as Robert Walker LJ pointed out in Cartonneries De Thulin SA v CTP White Knight Ltd [2001] RPC 6, para 21 quoting Attorney General v Prince Ernest Augustus Of Hanover [1957] AC 436, 461). First, the word makes must be given a meaning which, as a matter of ordinary language, it can reasonably bear. Secondly, it is not a term of art: like many English words, it does not have a precise meaning. Thirdly, it will inevitably be a matter of fact and degree in many cases whether an activity involves making an article, or whether it falls short of that. Fourthly, the word makes must be interpreted in a practical way, by reference to the facts of the particular case. Fifthly, however, there is a need for clarity and certainty for patentees and others, and for those advising them. Sixthly, it should be borne in mind that the word applies to patents for all sorts of products, from machinery to chemical compounds. Seventhly, one should bear in mind, at least as part of the background, the need to protect the patentees monopoly while not stifling reasonable competition. Eighthly, the word makes must be interpreted bearing in mind that the precise scope of a claim may be a matter almost of happenstance in the context of the question whether the alleged infringer makes the claimed product. Lord Diplock described the specification of a patent as a unilateral statement by the patentee, in words of his own choosing by which he states what he claims to be the essential features of the new product Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, 242. As Lord Hoffmann explained in Kirin Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] 1 All ER 667, [2005] RPC 169, para 21, a claim is, or at least should be drafted not only in the interest of others who need to know the area within which they will be trespassers but also in the interests of the patentee, who needs to be able to make it clear that he lays no claim to prior art or insufficiently enabled products. As Lord Hoffmann went on to explain in para 35, all sorts of factors, only some of which may appear to be rational, can influence the person drafting a claim. Ninthly, where, as here, there is a decision (United Wire) of the House of Lords or this court on the meaning of the word, it cannot be departed from save for very good reasons indeed. Finally, particularly given that section 60 (like section 125) is one of the sections mentioned in section 130(7) of the 1977 Act, the word should be interpreted bearing in mind that it is included in a provision which is intended to be part of a scheme which applies in many other jurisdictions. United Wire The decision of the House of Lords in United Wire assumed central importance in the Court of Appeal, as is clear from para 91 of Jacob LJs judgment, where he described Schtzs appeal as determined by United Wire, a proposition unsurprisingly supported by Mr Meade QC on behalf of Schtz before this court. However, while we must be careful not to cause confusion in this area, the reasoning in that case, like the reasoning of any court, was inevitably based on the facts agreed between the parties or decided by the judge, and on the arguments raised by the parties or suggested by the court. United Wire involved two patents, and the facts were summarised by Lord Hoffmann at paras 62 64 (taking the paragraph numbering from the RPC report, which includes the decision of the Court of Appeal) in these terms: 62. [B]oth patents are for a screen consisting of a frame to which two meshes of different mesh sizes are adhesively secured at the periphery so as to be at different tensions. The differences are the striking screens of the first patent and the flexible apertured [frame] of the second. 63. The meshes quickly become torn in use. The plaintiffs therefore enjoy [the] aftermarket in selling replacement screens made in accordance with their inventions. 64. The defendants [sell] reconditioned screens made from the plaintiffs own frames. The [metal] frames weigh about 10 kilos [and look] more like a drain cover than a picture frame. They are durable in relation to the rest of the materials of the screen. The defendants acquire the frames from the plaintiffs customers and strip them down to the bare metal by sandblasting. They recoat them with adhesive polyethylene and attach the two layers of mesh, coarse below and fine above. The differences in the sizes of the mesh produces the necessary differential tensions when both are tensioned together. Heat is then used to bond the meshes to the polyethylene coating of the frame, the selvage of mesh around the frame is cut off and the edges trimmed and taped. At first instance in United Wire, the judge had been narrowly persuaded that the defendants activities amounted to repair, and therefore that the defendant did not make the article claimed under either of the two patents. The Court of Appeal took a different view. In a judgment which was expressly approved by the House of Lords, Aldous LJ held that in cases where it is claimed that the alleged infringer makes a product contrary to section 60(1)(a) the question must be whether his acts amount to manufacture of the product, namely the product of the invention see para 25. In para 27, he briefly summarised the patentees case, which he accepted, and which included the contention that the defendants activities should be contrasted with on site repair. He then described the defendants activity as equivalent to the purchase on the open market of frames and then using them to produce an assembly para 28. In the House of Lords, Lord Bingham and Lord Hoffmann gave reasoned speeches, with which the other Law Lords agreed. Lord Bingham, at para 56, thought the issue was simply whether the defendant made the patented article, to which the answer was a question of judgment; that it was better not to ask whether the defendants work involved repair; and that the Court of Appeal had identified the right question and reached a conclusion open to them. Lord Hoffmann described the point as a very short one, and (discussing an earlier case) he said that the real issue was whether the defendants had made the patented product paras 68 and 72. He quoted (para 70) with approval a statement made by Lord Halsbury LC that you may prolong the life of a licensed article but you must not make a new one under the cover of repair, and he warned (para 71) of the dangers of asking whether the work constituted repair. Lord Hoffmann described the question raised as one of fact and degree in para 72, and, at the end of his final paragraph, para 73, he said that: [The patented] product ceased to exist when the meshes were removed and the frame stripped down to the bare metal. What remained at that stage was merely an important component, a skeleton or chassis, from which a new screen could be made. Neither Lord Bingham nor Lord Hoffman said, at least in terms, that the decision of the trial judge to the contrary effect was one which he could not have reached. What Lord Hoffmann said at para 73 was that the Court of Appeal was entitled to substitute its own evaluation because the judge did not correctly identify the patented product. Lord Bingham seems also to have justified the Court of Appeal having substituted its own decision on this ground, saying in para 56 that the judge did not concentrate his attention on whether the defendants had made the patented product. Decisions of German courts The fact that the word makes is in a section of the 1977 Act which is intended to conform with the provisions of an international convention is particularly significant where, as is the case with the EPC and the CPC, the convention contains a set of principles which are intended to apply consistently across signatory states. (The EPC is not an EU convention, whereas the CPC is; however, the CPC is not yet in force.) The House of Lords and this court have emphasised on a number of occasions the desirability of national courts following the established approach to validity of the Technical Board of Appeal of the European Patent Office (the EPO), and the German Bundesgerichtshof (the BGH) have taken the same view see, most recently, Human Genome Sciences Inc v Eli Lilly & Co [2011] UKSC 51, [2012] 1 All ER 1154, paras 84 87, and Case Xa ZR 130/07. The parties in this case have not referred to any relevant decision of the EPO, as we are here concerned with infringement. However, it is worth addressing four decisions of the BGH which consider what activities constitute making a patented article. The most recent such decision related to the German equivalent of the Patent Paletenbehlter II, Schtz v Mauser (Pallet Container II) Case X ZR 97/11, in July 2012. These are not only decisions of a highly expert, experienced and respected court on the very point which is raised in this case, but they are decisions of a court of another signatory state to the EPC (and the CPC) on a point of some significance arising under those Conventions. We should therefore accord them considerable respect, and sympathetically consider the extent to which we should adopt any points of principle or practice which they raise. However, there can be no question of the courts in this jurisdiction feeling obliged to follow the approach of the German courts, any more than the German courts could be expected to feel obliged to follow the approach of the English and Welsh courts. Unlike the EPO, both this court and the BGH are national courts. As such, while they have a great deal, including many principles, in common, they have inevitably developed somewhat different techniques and approaches in relation to many issues, including many which arise in the field of patents. While complete consistency of approach may be achieved one day, it is not a feasible or realistic possibility at the moment. Nonetheless, given the existence of the EPC (and the CPC), it is sensible for national courts at least to learn from each other and to seek to move towards, rather than away from, each others approaches. It appears that the BGH is of the same view. In Flgelradzhler (Impeller Flow Meter) Case X ZR 48/03, para 2.a, it made the point that, following the CPC, the case law on the old German patent law cannot be used automatically to interpret section 10 of the German Patent Act (equivalent to section 60 of the 1977 Act). In the same case at the end of para 3.b.ii, the BGH cited the reasoning of Lord Hoffmann in United Wire. And in Pallet Container II it considered the decision of the Court of Appeal in this case see para 47 below. In Impeller Flow Meter, the BGH referred to the distinction between a (permissible) repair and a (prohibited) remaking and observed that this could only be determined in the light of the particular nature of the subject matter of the invention and a balancing of the conflicting interests. It then said that When the interests are weighed, increasing importance can be given to whether it would be customary to expect the relevant parts to be replaced during the service life of the device . But what is also relevant is the extent to which the technical effects of the invention are reflected by the replaced parts. Therefore, the replacement of a part subject to wear and tear that is usually replaced during the expected service life of the machine sometimes repeatedly does not usually constitute a new manufacture. The situation can be different, however, if this part in fact embodies essential elements of the inventive concept. This approach was adopted by the BGH in Laufkranz (Wheel Tread) Case X ZR 45/05, para 17, and it was also followed in Pipettensystem (Pipette System) Case X ZR 38/06. In Pallet Container II, the BGH cited these three earlier decisions in support of the proposition that it may also be significant whether the parts [replaced] are such that one normally expects them to be replaced during the useful life of the product and to what extent the technical effects of the invention are reflected in the replaced parts para 23 (substantially repeated at para 28). It was made clear at paras 43 to 45 that, in the view of the BGH, the technical effects of the invention were not reflected in the bottle, as they were not manifested in the replaced part. However, the BGH went on to say that [i]f, according to the prevailing market opinion, the replacement of a part is seen as re manufacturing the patented product, then as a general rule, a patent infringement cannot be denied, but if it was seen by general market opinion as a repair, the opposite conclusion would probably apply paras 29 and 41. It then observed that there was insufficient evidence available to reach a concluded view, and suggested that, if used [IBCs] which require the replacement of the inner container are viewed as practically worthless in the prevailing opinion of the purchasers of such containers, then the installation of a new inner container [w]ould be viewed as the re manufacture of the [IBC] para 34. The BGH remitted the case for a determination as to what proportion of used IBCs were returned to Schtz or reconditioners for no consideration. connected, points about the decision in Pallet Container II. First, I do not read the BGH as suggesting that the question of whether a new article is made depends on who carries out the work involved. That would be illogical and unprincipled, and indeed contrary to what was said in para 19 of Pallet Container II. When the BGH referred to the market, it was simply looking at the difference in value between a used IBC before and after it is reconditioned. Secondly, the BGH said at para 40 that it disagreed with the Court of Appeal in this case that weight should be given to the fact that Delta described their rebottled IBCs as re manufactured. I agree with the BGH on this point: the issue we have to determine is not how a party views or markets its products, but how those products should be characterised. In the light of the argument before us, I should make two further, perhaps Repairing and making The reasoning of Lord Bingham and Lord Hoffmann in United Wire emphasises that one must avoid basing a decision on the point at issue by simply contrasting the two concepts of making and repairing, not least because the notions of making and repair may well overlap para 71 per Lord Hoffmann. However, it was a contrast which Buckley LJ drew, and apparently found helpful, in this context in Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537, 555 (in a passage quoted and approved by Lord Hoffmann in United Wire at para 72), and which Aldous LJ appears to have approved in his judgment in United Wire at paras 21 22 and 26 27. The approach of Buckley LJ supports the notion that, subject to the overriding point that it should not obscure the central issue of whether the alleged infringer makes the patented article, it may sometimes be useful to consider whether the alleged infringer is repairing rather than making the article. I am fortified in that view by the fact that the BGH also plainly considers this distinction to be a useful one in this field. The mere fact that an activity involves replacing a constituent part of an article does not mean that the activity involves making of a new article rather than constituting a repair of the original article. Repair of an item frequently involves replacement of one or some of its constituents. If there are broken tiles on a roof, the replacement of those tiles is properly described as repairing the roof, and such replacements could not be said to involve rebuilding, or making, the roof. Indeed, replacing the whole of a deteriorated roof of a building could be regarded as repairing the building, taken as a whole, rather than reconstructing the building. There are many cases concerned with repairing obligations in leases which illustrate this point see e.g. the discussion in Woodfall on Landlord and Tenant (October 2008), Vol 1, paras 13.32 to 13.037.12. In the more directly relevant context of chattels rather than buildings, the normal use of making and repairing demonstrates the same point. Works to a ship or a motor car, which involve removal and replacement of defective significant constituent parts, could be substantial in terms of physical extent, structural significance, and financial cost, without amounting to making a ship or motor car, as a matter of ordinary language: in such a case, they would be repair of the existing ship or motor car. Thus, in Coleborn & Sons v Blond [1951] 1 KB 43, 49 50, Denning LJ said, in a case concerned with purchase tax, that [s]peaking generally, if you replace an old engine by a new one, or an old body by a new body, you are not making a different vehicle: you are altering and improving an old one . On the facts of that case he held a new thing was made out of two parts the old chassis and the new body [which] when assembled together make a different thing from either of them separately. The approach of Lord Hoffmann in the remarks at the end of his judgment in United Wire, quoted at the end of para 35 above, appear to me to be consistent with the approach of Denning LJ in Coleborn. On the facts of United Wire, Lord Hoffmann concluded (or said that the Court of Appeal was entitled to conclude) that the totality of the work described in his para 64 amounted to making a new article, because the removal of the meshes and the stripping down and repairing of the frame resulted merely in a component of the patented article from which a new screen could be [and was] made. Returning to the theme of the normal meaning of a word, observations about the meaning of make in a different legal or factual context from that under consideration should be approached with caution. The examples given above are referred to primarily to emphasise the somewhat slippery nature of the meaning of the word, and the very important role which context plays in determining whether a particular activity involves making an article. In general terms, in a case under section 60(1)(a) the particular contextual features are those identified in paras 26 to 29 above. Infringement: the present case The reasoning in the decisions below The first question to consider is whether either of the Courts below adopted the right approach to the question which they had to decide. In my view, they did not. In para 196 of his judgment, Floyd J said that [t]he difficult question, as it seems to me, is the case where the invention resides, or resides principally, in the part retained. This was not the case in United Wire. Mr Meade QC challenged this statement, contending that, at any rate in the case of the second of the patents in United Wire, the inventive concept in the patented article lay, at least primarily, in the frame which the defendant retained, and not in the wire meshes which it replaced. I accept that contention, although, as explained below, it does not by any means wholly invalidate the approach adopted by Floyd J. Similarly, Floyd J over simplified the position in the following paragraph of his judgment, when he said that the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim. The notion that the issue of infringement in a case such as this is to be determined simply by answering the question which the judge formulated in that passage is attractive and simple to apply. However, it seems to me to conflict with the wording of sections 60(1)(a) and 125(1) as well as with the approach adopted by the Court of Appeal and House of Lords in United Wire. On the other hand, I consider that the Court of Appeal were too ready to accept that the outcome of this case was governed by United Wire. They do not appear to have recognised that the question of whether replacing a part of a patented article constitutes making it is a matter of fact and degree. Indeed, Jacob LJ appears to have thought that replacing any part of a patented article would involve making it. At para 70, he said that if Delta made a frame according to Claim 1 and fitted it with a Schtz bottle that must produce exactly the same outcome as the present position. Similarly, at para 64, he said that the IBC ceased to exist when the bottle is removed and [w]hat remained at that stage was merely an important component [viz the Schtz cage] from which a new IBC could be made. However, as mentioned above, it is a matter of degree, to be assessed in each case, whether replacing a worn or damaged part of a patented article amounts to making the patented article. If, very unusually, an original Schtz IBC was in such a state that the bottle could be reused but the cage could not, it would, I think, be hard to challenge the view that putting the existing bottle in a new Schtz cage would involve making the claimed article. On the other hand, if an original Schtz IBC was entirely reusable save that the detachable lid of the bottle (assuming the bottles design involved a detachable lid) was damaged, it could not be plausibly contended that the replacement of the lid constituted making the claimed article, even though the IBC would be unusable without a new lid. In other words, the replacement of a damaged essential constituent of an IBC can constitute repairing, rather than making, the article. The fact that merely replacing the damaged lid of a Schtz bottle in a Schtz cage would not infringe the Patent, cannot possibly mean that there would be no infringement if one took a lid from an IBC marketed by Schtz and fixed it to a newly made bottle in a newly made cage, which (but for the lid) would infringe the Claim. By the same token, Jacob LJ was wrong to say that, because a person who replaced a damaged original Schtz cage, while keeping the original Schtz bottle, would infringe, it must follow that a person who replaced a damaged original Schtz bottle, while keeping the original Schtz cage would infringe. The correct approach in this case Since neither the Judge nor the Court of Appeal approached the issue in this case in the right way, we must reconsider and, if possible, determine for ourselves, the central issue, namely, whether Delta makes a patented article when it removes a damaged Schtz bottle from a Schtz cage, and replaces it with a Werit bottle. As is clear from United Wire, this question requires the court to focus on the question of whether, when it replaces a component of the article (viz. the bottle) the subject of the Claim, Delta makes that article (viz. the IBC as described in the Claim). In answering that question, I consider that it is both legitimate and helpful to consider the question of whether the bottle is such a subsidiary part of the patented article that its replacement, when required, does not involve making a new article. There are undoubtedly points in favour of the view that the bottle is more than subsidiary in this sense, so that its replacement involves making the claimed article, namely an IBC. Thus, it is a necessary part, indeed an integral part, of the patented article, but so, self evidently, is the lid of the bottle, whose replacement, when damaged, cannot, as observed in para 59 above, sensibly be said to involve making the IBC. Further, the bottle is specifically referred to in Item [A] of the Claim, but then so is the lid, albeit arguably only impliedly (an upper closable filler opening). The question, however, is one of degree. In that connection, the bottle is a much more substantial feature of the composite article described in the Claim than the lid of the bottle. Indeed, the bottle would appear to have a greater surface area than the cage (at least if one ignores the gaps between the bars). However, while undoubtedly an essential and physically large part of the patented article, it seems to me that, particularly in the context of the present issue, the bottle can fairly be said to be a relatively subsidiary part of the article, viewed as a whole. In that connection, Mr Thorley QC identified two significant features of the bottle. First, the bottle has a significantly lower life expectancy than the cage and, presumably, than the pallet. In particular, one would anticipate replacing the bottle, on average, five or six times during the life of the cage. The fact that one would expect the bottle to be replaced in this way reinforces the notion that it is a subsidiary part. Another aspect of the same point is that the bottle is also physically less substantial than the cage (or, no doubt, the pallet), since it is made of plastic (albeit tough plastic) rather than metal. Looking at the point another way, if the cage has a much greater life expectancy than the bottle, a purchaser of an IBC might well expect to be able to replace the bottle. As Lord Hatherley LC said in Betts v Willmott (1871) LR 6 Ch App 239, 245, in a passage cited by Lord Hoffmann in United Wire at para 68: When a man has purchased an article he expects to have the control of it, and there must be some clear and explicit agreement to the contrary to justify the vendor in saying that he has not given the purchaser his licence to sell the article, or to use it wherever he pleases as against himself. In principle, a purchaser of a patented article, as I see it, should be taken as entitled to make such an assumption, subject to section 60(1)(a). Accordingly, for that reason also, where the article includes a component which is physically easily replaceable and in practice relatively perishable, those features must constitute a factor (which may, of course, be outweighed by other factors) in favour of concluding that the replacement of that component does not fall foul of section 60(1)(a). Secondly, the bottle does not include any aspect of the inventive concept of the Patent. The extent to which a component of an article is a subsidiary part, so that its replacement is more likely to involve repairing than making the article, must be a matter of degree. It therefore seems to me that it must be legitimate, in the context of addressing the question whether a person makes the patented article by replacing a worn out part, to consider whether that part includes the inventive concept, or has a function which is closely connected with that concept. While, as already observed, there is nothing in the judgments in United Wire to support the notion that the inventive concept is relevant to the question raised in an appeal such as this, there is nothing inconsistent with such a notion either. What the reasoning in that case does rule out is the attractively simple use of the inventive concept in this sort of case which Floyd J suggested in his para 196. Mr Meade QC contended that the inventive concept of a patent is often a controversial issue, and that there could therefore be problems if it was treated as relevant in determining whether an alleged infringer makes the patented article. I am unconvinced by that contention. In almost all patents, the claimed inventive concept is clearly identified or identifiable from the patent, and, if it is unclear or disputed, it will often be an issue in the proceedings anyway. I note that the BGH appears to have no difficulty in accommodating the inventive concept in this exercise, and, if Mr Meade QC was right, it would be much more likely to be a problem in Germany with its bifurcated approach (where different courts deal with infringement and validity) than in England with our unitary approach (where the two issues are dealt with by the same court). Two further factors (which are connected to some extent) carry some weight with me. They can be highlighted by contrasting the facts of this case with those in United Wire. In this case, the replaced part, the bottle, is a free standing item of property, which does not include, or relate to, the inventive concept. In United Wire, the replaced part, the wire mesh system, had no independent identity from the retained part, the frame. Hence it was much easier to say, as Lord Hoffmann did in that case, that the original product ceased to exist when the meshes were removed, whereas in this case there are, as it were, two products (disregarding the pallet, which is included in the Claim), and one of them, which is significantly longer lasting, more substantial, and the only inventive component, certainly does not cease to exist. Furthermore, there is a significant difference between the nature of Deltas operations in this case and that of the defendants operations in United Wire, as described by Lord Hoffmann at para 64 of his opinion (quoted in para 31 above). In this case, a damaged free standing plastic bottle is simply replaced within the metal cage, which contains the inventive concept, and the metal cage is repaired if necessary. In United Wire, unlike in this case, (i) the replaced part was integrally connected to the retained part, so the work included a significant element of demolition, (ii) the replaced part was subjected to significant improvement work, (iii) the inventive concept either largely resided in the replaced part (the first patent) or was closely connected to that part (the second patent), and (iv) the work involved could undoubtedly be described as manufacture. Merely replacing a damaged plastic bottle (albeit one of considerable size) with a new plastic bottle (even allowing for the fact that the replacement has to be made) appears to me to be an exercise of a very different order. It seems to me that it would accord with the eight general principles set out in paras 26 to 28 above to take into account the various factors mentioned in the preceding eleven paragraphs, when deciding whether Delta makes the patented article. I derive comfort from the fact that they are factors which appear to carry force with the BGH when it is considering this issue. I also consider that there is nothing in the speeches of Lord Bingham or Lord Hoffmann in United Wire which suggests that it would be wrong to take these factors into account. The speeches appear to me to establish that the question to be determined in a case such as this is whether the alleged infringer makes the patented article, and that the answer to that question is often a matter of fact and degree. The speeches do not give much guidance as to what specific considerations can or cannot be taken into account when determining the question. The next issue to be addressed is whether it is also appropriate to consider the further point raised by the BGH in Pallet Container II, summarised in para 44 above. In my view, the question of whether the end user is paid for a used IBC could have relevance to the issue which we have to determine. If an article has no value when it has been used and before it is worked on, and has substantial value after it has been worked on, that could fairly be said to be a factor in favour of the work resulting in the making of a new article, or, to put the point another way, in favour of the work involved amounting to more than repair. However, that would be just one factor, and it would have to be approached with caution. For instance, there might be considerable value to an end user in having the used IBC collected by Delta, as it might otherwise have to be disposed of at some cost. Or a cross bottled IBC may have a relatively small value, so that the collection by Delta represents significant cost to Delta. Further, it is possible that the value of the cage could vary significantly with the price of the metal from which it is made, and it would seem wrong that the issue whether Delta makes a new article should fluctuate with prices on the metal exchanges. In this case, as in Pallet Container II, there was no evidence which can fairly enable us to assess this factor. However, unlike the BGH in Pallet Container II, I am firmly of the view that we should not remit the case back to Floyd J, let alone another judge, so as to enable the parties to adduce evidence on the matter. A first instance hearing in this jurisdiction involves a full and detailed examination of all the issues, requiring the parties to devote considerable expense and effort, and taking up a significant amount of court time; and an appeal is normally limited to points of law. Parties are expected to adduce all their evidence and arguments before the trial judge, and are normally only permitted to adduce new evidence (whether on appeal or through a rehearing) if there was a very good reason why the evidence was not adduced at trial. In any event, on the basis of the evidence and arguments which we have heard, I think it very unlikely that any such evidence would have affected the outcome. Infringement: conclusion Weighing up the various relevant factors, I have come to the conclusion that by replacing the bottle in the IBC, Delta does not make the article identified in the Claim. Given the size of the bottle, and the fact that it is one of the two (or three, if one includes the pallet) components of that article, the issue is by no means clear. However, the combination of the factors discussed in paras 63 to 72 above persuade me that the conclusion reached by Floyd J on this point was right, albeit for somewhat more nuanced reasons. Deciding whether a particular activity involves making the patented article involves, as Lord Bingham said, an exercise in judgment, or, in Lord Hoffmanns words, it is a matter of fact and degree. In some such cases, one can say that the answer is clear; in other cases, one can identify a single clinching factor. However, in this case, it appears to me that it is a classic example of identifying the various factors which apply on the particular facts, and, after weighing them all up, concluding, as a matter of judgment, whether the alleged infringer does or does not make the patented article. In the present case, given that (a) the bottle (i) is a freestanding, replaceable component of the patented article, (ii) has no connection with the claimed inventive concept, (iii) has a much shorter life expectancy than the other, inventive, component, (iv) cannot be described as the main component of the article, and (b) apart from replacing it, Delta does no additional work to the article beyond routine repairs, I am of the view that, in carrying out this work, Delta does not make the patented article. I should add that, while ones focus in a case such as this should not be deflected from the central question of whether the alleged infringer makes the patented article, it may sometimes be a useful cross check to consider whether its activities involve repairing the original product. As mentioned, that was a question which Buckley LJ found helpful in Solar Thompson, and which the BGH also invokes in this connection. In this case, I consider that the question does not take matters much further: for the reasons I have given for concluding that Delta does not make a new patented article, I am of the view that its cross bottling activities involve repairing the original product. I would therefore allow Werits appeal on the main issue. That means that Werits appeal on the section 68 issue is academic. However, because the issues that the appeal raises were fully argued, and because I do not agree with some of the conclusions of the Court of Appeal, it is right to deal with that aspect also, at least to the extent that it is safe to do so. The section 68 appeal The background facts and law As mentioned above, Schtz has been granted an exclusive licence by the patentee, Protechna. Schtz was initially granted a licence (the first licence) on 24 March 1994. On 26 November 2009, the first licence was determined, and on the same day another licence (the second licence) was granted in its place. Sections 32 and 33 of the 1977 Act (sections 32 and 33) provide for a register of patents, on which not only patents themselves, but also transactions, instruments or events affecting rights in or under patents can be registered, partly for the purpose of establishing priority. The first licence was not registered until 17 July 2008, more than fourteen years after it had been granted, and just before these proceedings were started. The second licence was not registered until 15 November 2012, some two years after it had been granted and well after the decision of the Court of Appeal on infringement. Section 68, in its original and current form, is in these terms: Where by virtue of a transaction, instrument or event to which section 33 above applies a person becomes the proprietor or one of the proprietors or an exclusive licensee of a patent and the patent is subsequently infringed, the court shall not award him damages or order that he be given an account of the profits in respect of such a subsequent infringement occurring before the transaction, instrument or event is registered, in proceedings for such an infringement, the court shall not award him costs or expenses unless (a) the transaction, instrument or event is registered within the period of six months beginning with its date; or (b) the court is satisfied that it was not practicable to register the transaction, instrument or event before the end of that period and that it was registered as soon as practicable thereafter. The italicised words were in the section as enacted, but, with effect from 29 April 2006, they were repealed and replaced by the words in bold, to ensure that the section did not fall foul of Articles 13(1) and 14 of the Enforcement Directive (2004/48/EC). This was effected by regulation 2(2) of, and para 4 of Schedule 2 to, the Intellectual Property (Enforcement etc) Regulations 2006 (SI 2006/1028). The purpose of section 68 is not in dispute. People need to know who is on the register. This section is aimed at making the people who own the monopolies get on the register, as Jacob J observed in LG Electronics v NCR Financial Solutions Group Ltd [2003] FSR 24, para 18. The effect of the Court of Appeals decision that Werit infringed the Patent was, at least on the face of it, that Schtz was entitled to (i) damages or an account of profits in respect of infringements occurring on or after 7 August 2002 (being six years before the issue of these proceedings), and (ii) its costs (subject, of course, to any point which Werit could have legitimately raised). However, if section 68 applied, (i) its original provisions would have disentitled Schtz from recovering any damages or account in respect of infringements occurring before 29 April 2006, and (ii) the amended provisions would have cut down Schtzs right to recover costs. After the Court of Appeals judgment on the main issue had been made available in draft, Werit gave notice that it intended to rely on section 68. This led to two further decisions of the Court of Appeal [2011] EWCA Civ 927, [2012] FSR 2 and [2011] EWCA Civ 1337, [2012] Bus LR 746, [2012] 2 Costs LR 306. The first of those decisions gives rise to three issues, and the second decision to a fourth issue. I shall consider those issues in turn. To what extent should reliance on section 68 be pleaded? The first issue is whether Werit needed to have specifically raised its reliance on section 68 in its pleaded case before it could rely on its original restriction on damages and an account, and its subsequent restriction on costs recovery. The Court of Appeal held that the point need not be pleaded, because of the mandatory terms in which section 68 is expressed the court shall not. I do not agree. The main point of requiring a party to put forward its contentions in a statement of case or a pleading is to ensure that the other party is not taken by surprise. The mere fact that a statute is expressed in directory terms should not mean that its contents can be relied on by a party without any warning to the other party. Of course, there may be good public policy issues justifying a different view in a particular case, but, absent such a factor, I consider that clear words would be required before a party could, as of right, raise a point of this nature without fairly putting the other party on notice, which would normally be in its statement of case. This conclusion is supported by the reasoning of the Court of Appeal in Fookes v Slaytor [1978] 1 WLR 1293 in relation to section 1 of the Law Reform (Contributory Negligence) Act 1945, which provides that, in a negligence case, damages shall be reduced to take into account contributory negligence. To much the same effect is what Lord Griffiths said about the need to plead a limitation defence in Ketteman v Hansel Properties Ltd [1987] AC 189, 219. The same view is taken in Bennion on Statutory Interpretation (5th edition, 2007), p.114, and specifically in relation to section 68, by Terrell on the Law of Patents (17th edition, 2010) at para 18.89. It should be recorded that none of these authorities appears to have been cited to the Court of Appeal in this case. The policy behind section 68 is to encourage persons such as Schtz to register their licences or other interests under section 33 of the 1977 Act. Although the court should favour an interpretation which gives such a policy real effect, I do not consider that it is a policy which justifies the view that the point need not be pleaded. It would be a remarkably harsh result for a licensee who had failed to register, and would represent a potentially remarkable windfall for an infringer. Under the section as originally drafted, an infringer would be able to lie low during proceedings brought by an unregistered licensee, knowing that there was a complete defence to any financial liability for continuing infringement which the licensee could end by registering. Accordingly, Schtzs case on this point is a fortiori that of the successful parties in Fookes and Ketteman, where there was no continuing benefit for the party who had failed to plead the point. Was Werits case sufficiently pleaded to enable it to raise section 68? The second question is whether Werit did, in fact, plead its case sufficiently to enable it to rely on section 68. The Court of Appeal held that if, contrary to their view, Werit had to plead its case on section 68, it had not done so. Again I disagree. In its pleaded case, Werit not only denied that Schtz was entitled to the relief it sought, which included damages, an account, and costs, but, crucially, in my opinion, para 5 of Werits statement of case (i) put Schtz to proof as to its status as exclusive licensee, and (ii) stated that any alleged licence had not been filed for registration and it is not admitted that the said transaction, instrument or event was registered within the period of six months beginning with its date. Thus, Werits pleaded case denied Schtzs right to damages or costs, raised all the facts which were needed for a section 68 argument, and quoted the crucial words from that very section. CPR 16.5(2)(a) requires a defendant to state its reasons for denying any allegation, and para 13.3(1) of Practice Direction 16 merely entitles a party to refer to any point of law it relies on. At least in the circumstances of this case, it seems to me clear that there was a sufficient pleading for section 68 purposes. If there were any doubt about this, it would be put to rest by the fact that para 5 was in a defence to a claim brought under the 1977 Act by an exclusive licensee, whose claim form recorded that it had instructed solicitors and counsel who were acknowledged experts in the field. I should add that we were referred in this connection to evidence on behalf of Schtz as to how para 5 of Werits statement of case was understood by Schtz. I very much doubt that such evidence was admissible, but, if it was, it tends to support my conclusion. I therefore reach the same conclusion as the Court of Appeal on the procedural issue of whether it was open to Werit to rely on section 68, but for very different reasons. The Court of Appeal thought that Werit had not pleaded the point but did not need to do so; I am of the view that Werit had to plead the point, and had done so. How does the costs sanction under section 68 work? The conclusion of the Court of Appeal, supported by Mr Meade QC on behalf of Schtz, was that section 68 simply serves to disentitle a licensee from recovering costs incurred in connection with an infringement action during a period that the licence is unregistered. Werits case, as advanced by Mr Thorley QC in the Court of Appeal and before us, is that if a claim for damages or an account by the licensee of a patent relates to an infringing act prior to registration of the licence, then the claimant licensee can recover no costs. Like the Court of Appeal, I cannot accept Werits case on this point. It seems to me to produce an arbitrary and potentially penal result. It is arbitrary because the sanction would be the same whether the licensee was claiming for one weeks infringement before registration and five years after, or for five years infringement before the registration and for one weeks after. In the former case, it would also be penal. The interpretation favoured by the Court of Appeal and Schtz does not produce a penal or arbitrary result, but it leaves the section with very little bite, as an unregistered licensee could avoid its consequences simply by registering and then starting the proceedings. It also seems to me to be difficult to reconcile with the wording of the amended section 68. The expression proceedings for such an infringement must be a reference to the proceedings for infringe[ment] before the transaction is registered, not to proceedings, before the transaction is registered, for infringement. Because the section is poorly drafted, that may not have been an insuperable obstacle to Schtzs case were there not a third interpretation, which was raised in argument by Lord Mance, and which I think is right. That interpretation is that, where a licensee successfully claims damages or an account for infringement of a patent, it cannot recover its costs in so far as they are attributable to the claim for damages or an account in respect of infringements pre dating the registration of the licence, but it can recover costs attributable to such relief in respect of infringements post dating the registration. In my view, this is the right interpretation, as it accords with the wording of section 68, and it reflects its purpose as described in LG Electronics. Apparently, this interpretation was considered in argument in the Court of Appeal, but rejected on the ground that it would be unworkable. I do not see why. Obviously in a case where there was a claim for pre and post registration relief, there would have to be an apportionment, and the apportionment would normally involve an element of rough justice. But that is a familiar state of affairs when it comes to costs. The consequence of the late registration of the second licence The final issue arises from the fact that the second licence was not registered until 15 November 2012, even though it was granted on 26 November 2009. The effect of the reasoning so far is that, if Schtz had succeeded on infringement, (i) it would not have been entitled to relief in respect of infringements before 29 April 2006 (when section 68 was amended), (ii) it would have been entitled to relief in respect of infringements after that date, (iii) it would not have been entitled to costs in relation to infringements occurring between 29 April 2006 and 17 July 2008 (when the first licence was registered); (iv) it would have been entitled to costs in relation to infringements occurring between 17 July 2008 and 26 November 2009 (when the first licence was determined and the second licence was granted); (v) it would have claimed costs in relation to infringements between 26 November 2009 and 15 November 2012 (when the second licence was registered); and (vi) it would have been entitled to costs in respect of infringements after 15 November 2012. Thus, the remaining issue, which is in respect of item (v) in the preceding paragraph, would have concerned costs in respect of infringements committed between 26 November 2009 and 15 November 2012. The Court of Appeal accepted Schtzs contention that what mattered was that it had been registered as a licensee in July 2008 and had remained registered as such at all times since that date, and the fact that it had surrendered the first licence in exchange for the second licence did not require it to go through the exercise of re registration. This conclusion is reinforced by the fact that, although the register records the date of the licence as well as the name of the licensee, and the public has a right to inspect the register, those who wish to inspect the register have no right to see, or to be told of the terms of, the licence. Werit contends, however, that the natural meaning of section 68, and in particular the word becomes, demonstrates that Schtz should have registered the second licence. Some support for that proposition may also be found in the fact that sections 32 and 33 appear to envisage registration of licences and other documents rather than of licensees and proprietors. The Court of Appeal accepted that Werits argument had force, but concluded that Article 14 of the Enforcement Directive required it to adopt what Ward LJ referred to as an artificial meaning, as opposed to the natural meaning of section 68, so as to enable Schtz to rely on the registration of the first licence, even after it had been determined and replaced by the second licence. The Court of Appeal may have been right about the natural meaning of section 68 in the absence of Article 14; certainly its conclusion derives support from the reasoning of Aldous J in Minnesota Mining & Manufacturing Co v Rennicks (UK) Ltd [1992] FSR 118, Pumfrey J in Spring Form Inc v Toy Brokers Ltd [2001] EWHC 535 (Pat);[2002] F.S.R. 17, and Peter Smith J in Finecard International Ltd v Urquhart Dyke and Lord [2005] EWHC 2481 (Ch); [2006] F.S.R. 27. However, despite these decisions, there does appear to be an argument the other way. If the Court of Appeal was right about the natural meaning of the section, then I am very dubious about its invocation of Article 14 to justify a very different meaning to the section, especially as it has not been argued that Article 14 has direct effect. This final point throws up two questions which are not straightforward and were (understandably in all the circumstances) not as fully argued as they might have been. Accordingly, it would be safer not to decide the point, although I would emphasise that the reasoning of the Court of Appeal both as to the natural reading of section 68 and as to the justification for adopting an artificial meaning, should not be regarded as necessarily correct. Conclusion on the section 68 costs issue 68 judgment, but not to the extent to which Werit contended, and I would leave open the question of whether it should succeed on its appeal against the second section 68 judgment. However, as I would allow Werits appeal on the main, infringement, issue, my conclusions on the section 68 costs issues are, strictly speaking, obiter. Accordingly, I would have allowed Werits appeal against the first section

The principal issue on this appeal concerns the meaning of the word makes in section 60(1)(a) of the Patents Act 1977 (the 1977 Act), which provides that a person infringes a patent for a particular product if he makes the product without the consent of the patentee. This issue arises in respect of European Patent (UK) 0 734 967 (the Patent), of which Protechna S.A. (Protechna) is the proprietor. Claim 1 of the Patent (the Claim) extends to certain aspects of a complete intermediate bulk container (IBC). An IBC is a large container used by suppliers of liquids (fillers), for the transport of a wide range of liquids to a so called end user. IBCs of a two part construction consist of a metal cage into which a large plastic container (or bottle) is fitted. Often, the bottle cannot be reused, because it contains residues of a toxic liquid or because it has been physically damaged. The inventiveness of the Patent lies in the idea of flexible weld joints to the cage, to increase its strength and durability, and in the idea of introducing a dimple on either side of the weld and a central raised portion. The description of the Patent acknowledges that the bottle is exchangeable (i.e. replaceable). The cage has a life expectancy on average five or six times longer than a bottle, which is why so called reconditioners engage in re bottling or cross bottling used IBCs. In either case, the old bottle is removed, any damage to the cage is repaired, and a new bottle is fitted within the cage. Re bottling involves replacing the bottle with a fresh bottle from the original manufacturer, whereas cross bottling involves replacing the bottle with a bottle from a different source. After re bottling or cross bottling an IBC, the reconditioner offers the reconditioned product to fillers on the market, in competition with the products of original manufacturers, and of other reconditioners. Schtz (U.K.) Limited (Schtz) is the exclusive licensee of Protechna, and the leading manufacturer of rigid composite IBCs, in the United Kingdom. Werit UK Limited (Werit) sells bottles (Werit bottles) for IBCs to a reconditioner, Delta Containers Limited (Delta). Delta acquires discarded IBCs originally put on the market by Schtz (Schtz IBCs), replaces the original bottles (Schtz bottles) with Werit bottles, and then offers these cross bottled IBCs on the market. These cross bottled IBCs are therefore in competition with the original Schtz IBCs. Schtz objected to Deltas cross bottling activities, and issued proceedings against Werit, seeking relief on the ground that Werit infringed the Patent. It is common ground that, if Delta thereby infringes the Patent, Werit does so. Two issues arising from those proceedings are relevant to the present appeal. The first issue is whether Delta infringed the Patent by mak[ing] the article claimed by the Claim, contrary to section 60(1)(a) of the 1977 Act. The second issue, which arises only if it is found that Delta infringes the Patent, concerns costs sanctions in such proceedings under section 68 of the 1977 Act (the section 68 issue). At first instance, Floyd J held that Deltas cross bottling activities do not amount to making the patented product, on the ground that the inventive concept of the Claim is wholly embodied in the Schtz cage. The Court of Appeal considered that it was inappropriate to determine the issue by reference to the inventive concept, and held that Deltas cross bottling activities do amount to making the patented product, on the basis that the Schtz IBC ceases to exist when the Schtz bottle is removed, and all that remains at that stage is merely an important component from which a new IBC could be made. The Supreme Court unanimously allows Werits appeal and holds that Delta did not make the patented article contrary to section 60(1)(a) of the 1977 Act. Lord Neuberger gives the judgment of the Court. This decision renders Werits appeal on the section 68 issue academic, but because the issues that appeal raises were fully argued, Lord Neuberger provides some guidance on how the costs sanctions under section 68 of the 1977 Act work [80] [107]. The central issue is whether Delta makes a patented article when it removes a damaged Schtz bottle from a Schtz cage, and replaces it with a Werit bottle. The word makes does not have a precise meaning. It must be interpreted contextually, by reference to the facts of the particular case, and in a practical way, bearing in mind that the precise scope of a claim may be a matter almost of happenstance. It must also be given a meaning which, as a matter of ordinary language, it can reasonably bear. There is a need for clarity and certainty for patentees and others, and for those advising them. It should also be borne in mind that the word makes applies to patents for all sorts of product. Moreover, there is a need to protect the patentees monopoly while not stifling reasonable competition [26] [29]. Therefore, it will inevitably be a matter of fact and degree in many cases whether an activity involves making an article [26],[57],[58],[72],[78]. Observations about the meaning of make in a different legal or factual context from that under consideration should be approached with caution because of the somewhat slippery nature of the meaning of the word, and the very important role which context plays in determining whether a particular activity involves making an article [53]. The mere fact that an activity involves replacing a constituent part of an article does not mean that the activity involves the making of a new article, rather than constituting a repair of the original article. One must, however, avoid simply contrasting making and repairing, not least because these concepts may well overlap. That said, it may sometimes be useful to consider whether the alleged infringer is repairing rather than making the article, because repair of an item frequently involves replacement of one or some of its constituents [48] [50]. It is both legitimate and helpful to consider the question whether the bottle is such a subsidiary part of the patented article that its replacement, when required, does not involve making a new article [61]. While undoubtedly an essential and physically large part of the patented article, four factors indicate that the bottle can fairly be said to be a relatively subsidiary part of the IBC, when that article is viewed as a whole [64]. (i) The bottle has a significantly lower life expectancy than the cage [65] [66]. (ii) The bottle does not include any aspect of the inventive concept of the Patent [67] [69]. (iii) The bottle is a free standing item of property [70]. (iv) The damaged free standing bottle is simply replaced within the metal cage, which contains the inventive concept, and the metal cage is repaired if necessary [71]. The question whether the end user is paid for a used IBC could be of relevance [74], although there was no evidence which can fairly enable assessment of this factor [75], and it is very unlikely that any such evidence would have affected the outcome [76]. This case represents a classic example of identifying the various factors which apply on the particular facts, and, after weighing them all up, reaching a conclusion on infringement. Given that (a) the bottle (i) is a freestanding, replaceable component of the patented article, (ii) has no connection with the claimed inventive concept, (iii) has a much shorter life expectancy than the other, inventive, component, (iv) cannot be described as the main component of the article, and (b) apart from replacing it, Delta does no additional work to the article beyond routine repairs, Delta does not make the patented article [78].

On 8 November 2006 the appellant and his two co accused were convicted of the racially aggravated abduction and murder of a 15 year old boy, who was selected at random and abducted from a public street, repeatedly stabbed, and set alight with petrol. The appalling nature of that crime was reflected in the sentences imposed. The appellant was extradited from Pakistan in order to stand trial, and on 6 October 2005 was remanded in custody pending his trial. On 7 October 2005 he was removed from association with other prisoners and placed in solitary confinement, otherwise described as segregation. Apart from the period immediately prior to and during his trial, when he was accommodated in mainstream conditions, he remained in continuous segregation until 13 August 2010. Altogether, he spent 56 months in segregation. For a prisoner in Scotland to spend almost five years in segregation is exceptional. The situation of the appellant and his co accused was exceptional primarily because of the media coverage which they attracted as a result of the nature of their crime. They were notorious as the perpetrators of a crime which, because of its racist nature, and the fact that the victim was a child, was liable to result in their being attacked by other prisoners. In consequence, there were persistent fears for their safety if they were accommodated in mainstream conditions. In these proceedings, the appellant seeks orders declaring that certain periods of his segregation were contrary to the relevant Prison Rules, and that there were violations of his Convention rights under articles 3 and 8 of the European Convention on Human Rights (ECHR), as given effect by the Human Rights Act 1998. He also seeks an award of damages as just satisfaction under section 8 of that Act. The Ministers expressly acknowledge that the nature of the crime committed does not justify a contravention of the appellants Convention rights. As Lord Steyn observed in R (Roberts) v Parole Board [2005] UKHL 45; [2005] 2 AC 738, para 84, even the most wicked of men are entitled to justice at the hands of the state. The appellant first applied for legal aid to bring this application for judicial review in February 2007, when he had been in segregation for about 15 months. Legal aid was finally granted in June 2010, when he had been in segregation for about four and a half years. The application was heard a year later, by which time his segregation had ended. Following a four day hearing, the Lord Ordinary, Lord Malcolm, refused the application on 18 November 2011: [2011] CSOH 192; 2012 SLT 178. An appeal was refused by an Extra Division, comprising Lord Menzies, Lord Drummond Young and Lord Wheatley, on 31 January 2014: [2014] CSIH 18A; 2014 SC 490. The Prison Rules It may be helpful to begin with the relevant Prison Rules. Section 39 of the Prisons (Scotland) Act 1989 allows the Scottish Ministers to make rules for the regulation and management of prisons. The rules that are relevant to this appeal are the Prisons and Young Offenders Institutions (Scotland) Rules 1994 (SI 1994/1931) as amended (the 1994 Rules), which were in force when the appellant entered the prison system on 7 October 2005, and the Prisons and Young Offenders Institutions (Scotland) Rules 2006 (SSI 2006/94) (the 2006 Rules), which replaced them on 26 March 2006. They were in turn replaced by the Prison and Young Offenders Institutions (Scotland) Rules 2011 (SSI 2011/331) (the 2011 Rules) with effect from 1 November 2011. It is common ground that it is sufficient for the purposes of this appeal to refer to the 2006 Rules, the relevant provisions of which are identical to the corresponding provisions of the 1994 Rules as they stood at the material time. Rule 94(1) of the 2006 Rules confers a power on the governor (an expression defined for this purpose, by rule 5, as including any authorised unit manager) to order the segregation of a prisoner for specified purposes: (1) Where it appears to the Governor desirable for the purpose of (a) maintaining good order or discipline; (b) protecting the interests of any prisoner; or ensuring the safety of other persons, (c) the Governor may order in writing that a prisoner shall be removed from association with other prisoners, either generally or during any period the prisoner is engaged or taking part in a prescribed activity. The governor is required by rule 94(4) to specify in the order the reasons why it is made and to record in the order the date and time it is made. He is also required to explain to the prisoner the reasons why the order is made and provide the prisoner with a copy of the order. Rule 94(5) is critical to one of the issues in this appeal. It provides: (5) A prisoner who has been removed from association generally or during any period that the prisoner is engaged in or taking part in a prescribed activity by virtue of an order made by the Governor in terms of paragraph (1) shall not be subject to such removal for a period in excess of 72 hours from the time of the order, except where the Scottish Ministers have granted written authority on the application of the Governor, prior to the expiry of the said period of 72 hours. Rule 94(6) is also critical. It provides: (6) An authority granted by the Scottish Ministers under paragraph (5) shall have effect for a period of one month commencing from the expiry of the period of 72 hours mentioned in paragraph (5) but the Scottish Ministers may, on any subsequent application of the Governor, renew the authority for further periods of one month commencing from the expiry of the previous authority. Finally, in relation to rule 94, it is relevant to note that, under rule 94(9), any order under rule 94(1), or any authority under rule 94(5), ceases to have effect when a prisoner is transferred from one prison to another. Under rule 94(10), a prisoner who has been removed from association under rule 94 must be visited by a medical officer as soon as practicable and as often as is necessary, but at least once every seven days. Rule 80(1), (5), (6) and (9) of the 1994 Rules corresponded to rule 94(1), (5), (6) and (9) of the 2006 Rules respectively. The non observance of time limits The first issue in the appeal arises from the failure of the authorities, on a number of occasions, to comply with the time limits imposed by rule 94 and its predecessor. It is common ground that three of the orders made on behalf of the Ministers, authorising the appellants continued segregation under rule 94(5), were granted after the 72 hour period had expired. On each occasion, authority for continued segregation was purportedly granted with effect from the time when the 72 hours had expired. It is also common ground that 11 of the renewals of authority on behalf of the Ministers under rule 94(6) or its predecessor were granted after the previous authority had expired. The renewals again purported to be backdated so as to leave no interval when authorisation was absent. It is argued on behalf of the appellant that the late authorisations under rule 94(5) were invalid, and that the appellants segregation during the period purportedly authorised was therefore unlawful. Furthermore, it is argued, the purported renewals of the invalid authorisations under rule 94(6) were equally invalid. In addition, it is argued, all late renewals under rule 94(6) were invalid, and all subsequent renewals following upon a late renewal were also invalid. On that basis, it is argued that the appellants segregation was unauthorised for periods totalling 32 months: about 14 months arising from invalid authorisations under rule 94(5), and a further 18 months arising from late renewals under rule 94(6). On behalf of the Ministers, on the other hand, it is argued that the lateness of the orders had no effect upon their validity. The courts below accepted the Ministers submissions on this point. They focused upon the limited extent to which the orders were late, when considered in the context of the appellants segregation as a whole, and took the view that, notwithstanding their lateness, they achieved the intended purpose of ensuring that segregation was maintained only for so long as was necessary, and that the position of the prisoner was regularly reviewed. In those circumstances, they inferred that the legislator could not have intended the lateness of the authorisations to invalidate continued segregation. The critical issue is the construction of the legislation. Considering rule 94(5) in the first place, it plainly means that segregation by virtue of an order made under rule 94(1) should not continue beyond the initial 72 hours from the time of the order, unless authority has been granted before the 72 hours have expired: A prisoner . shall not be subject to such removal for a period in excess of 72 hours from the time of the order, except where the Scottish Ministers have granted written authority on the application of the Governor, prior to the expiry of the said period of 72 hours. The words shall not be subject to such removal . except mean that what follows is a pre condition to lawful segregation for a period in excess of 72 hours from the time of the order. The words have granted . prior to the expiry of the said period mean that, in order for the condition to be satisfied, authority must have been granted before the 72 hour period expires. Rule 94(5) has to be read together with the provision in rule 94(6) that an authority granted under paragraph (5) shall have effect for a period of one month commencing from the expiry of the period of 72 hours mentioned in paragraph (5). Rule 94(6) does not specify when the authority must be granted, but it makes it clear when it must take effect, namely from the expiry of the 72 hour period beginning when the governors order was made under rule 94(1). The apparent effect of the provisions is therefore (1) that a late authority under rule 94(5) cannot operate so as to authorise segregation more than 72 hours after the initial order under rule 94(1), since that would be contrary to the requirement in rule 94(5) that the prisoner should not be segregated beyond the expiry of the 72 hour period unless authority has been granted prior to its expiry, and (2) that a late authority under rule 94(5) cannot therefore be of any effect, since rule 94(6) provides that a (valid) authority must take effect from the expiry of the 72 hour period, but we know from rule 94(5) that a late authority cannot do so. The implication is that authority under rule 94(5) cannot be granted late. On a natural reading of rule 94(5) and (6), there must be a seamless sequence of authorisations: the governors order under rule 94(1), effective for the first 72 hours, and the Ministers authority, granted prior to the expiry of that period, and effective for the succeeding month. That reading of the legislation establishes a logical structure. It is also consistent with its purpose. The reason for requiring the Ministers authority under rule 94(5), as explained by the House of Lords in Somerville v Scottish Ministers (HM Advocate General for Scotland intervening) [2007] UKHL 44; 2008 SC (HL) 45; [2007] 1 WLR 2734, and reiterated by this court in relation to the corresponding English rule in Bourgass and Hussain v Secretary of State for Justice (Howard League for Penal Reform intervening) [2015] UKSC 54; [2015] 3 WLR 457, is to provide a safeguard for the protection of the prisoner. The requirement that local prison management must obtain the authority of the Ministers within 72 hours ensures that the need for segregation is reviewed within a short time by officials external to the prison, on the basis of information which is up to date, and that segregation is maintained only for as long as is necessary. Authorisations which are 17, 44 or 47 hours late, as occurred in this case, defeat the intention of the legislation. The courts below were concerned about the practical consequences of the legislation, so understood. The Lord Ordinary gave the example of a prisoner being held in segregation for his own safety, where the documentation in support of an application under rule 94(5) was received one hour late. Was there nonetheless a continuing duty on the Ministers to consider the governors request? Or must the prisoner be returned to the mainstream population, even if he might be killed or seriously assaulted there? The Lord Ordinary commented that most people would consider it quite unreal that, if the Ministers decided to go ahead and grant the authority, both it and all subsequent renewals would be rendered unlawful. I shall return to that example. In the light of considerations of that kind, the courts below concluded that purposive arguments favoured treating a late authorisation as valid, within reasonable limits. No amount of purposive interpretation can however entitle the court to disregard the plain and unambiguous terms of the legislation. The consequence of the failure to obtain authority for continued segregation prior to the expiry of the 72 hour period is ineluctably spelled out by the legislation itself: the prisoner shall not be subject to removal for a period in excess of 72 hours from the time of the order. That consequence cannot be avoided by relying, as the courts below sought to do, upon such authorities as R v Soneji [2005] UKHL 49; [2006] 1 AC 340. Those authorities were concerned with situations where the legislation was silent as to the consequences of failure to comply with a time limit, and where the intended consequences therefore had to be inferred from the underlying purpose of the legislation. The present case is fundamentally different. The only principle of statutory interpretation which might enable the plain meaning of legislation to be circumvented is that it can be given a strained interpretation where that is necessary to avoid absurd or perverse consequences: see, for example, Inland Revenue Comrs v Hinchy [1960] AC 748, 768 (Lord Reid), and R (Edison First Power Ltd) v Central Valuation Officer [2003] UKHL 20; [2003] 4 All ER 209, paras 25 (Lord Hoffmann) and 116 (Lord Millett). Indeed, even greater violence can be done to statutory language where it is plain that there has been a drafting mistake: Federal Steam Navigation Co Ltd v Department of Trade and Industry [1974] 1 WLR 505, 509 (Lord Reid), and Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586, 592 (Lord Nicholls of Birkenhead). In the present case, however, there has not been any drafting mistake. Nor does the legislation have absurd or perverse consequences. On the contrary, as I have explained, the plain meaning of the legislation is consistent with its purpose. The problem which concerned the Lord Ordinary that the prison management might be compelled to return a prisoner to the mainstream even though the result might be to endanger his safety or that of another prisoner nevertheless had a straightforward solution, as I shall explain. I say had because the 2006 Rules are no longer in force: as explained earlier, they have been replaced by the 2011 Rules. The corresponding provision in the 2011 Rules, namely rule 95, is expressed differently from rule 94 of the 2006 Rules, and no question arises in these proceedings (and this court has heard no argument) as to its meaning or effect. In relation to rule 94 of the 2006 Rules, the Lord Ordinary considered that in practice, if the 72 hours expired without authority for continued segregation having been granted, and if it then remained necessary for the prisoner to be segregated, the governor would make a fresh order under rule 94(1). A new period of 72 hours would then begin, and a fresh application could be made under rule 94(5). That view may or may not be correct. Rule 94 does not expressly preclude the making of more than one order under rule 94(1) on the same grounds, and it is arguable that such an order would be valid if it were made reasonably and in good faith, in the event of a failure to comply with the timetable envisaged by rule 94. It might on the other hand be argued that the repeated use of rule 94(1) in such circumstances is impliedly precluded, on the view that the safeguards created by rule 94(5) could otherwise be circumvented. It has also to be noted that rule 80(7) of the 1994 Rules originally conferred on the governor an express power to make a further order under rule 80(1) on the expiry of the 72 hour period; but that power was confined to removal from association in relation to a prescribed activity only, and was in any event repealed by amendment in 1998: the Prisons and Young Offenders Institutions (Scotland) Amendment Rules 1998 (SI 1998/1589), rule 32(4). The court has heard no argument on the question whether a further order might be made as the Lord Ordinary suggested, and it would be inappropriate to determine it without inviting further submissions. Since another solution exists to the problem which concerned the Extra Division, as I shall shortly explain, and bearing in mind that the 2006 Rules have been superseded and no longer raise any live problem, it is unnecessary to determine the question. An analogous question may arise under the 2011 Rules, but, as I have explained, the relevant rule is differently expressed, and no question as to its effect is raised in these proceedings. What is however clear is that any duty arising under the 2006 Rules would be overridden by a conflicting duty imposed by primary legislation. In particular, the governors duty under section 6(1) of the Human Rights Act to protect the safety of prisoners, in accordance with their article 2 and 3 Convention rights, would override any duty arising from rule 94 to return a prisoner to mainstream conditions, where that would involve a serious risk to life or limb. This is another issue on which the court was not addressed, but the point is too clear to admit of argument. The precise mechanism by which rule 94 would be overridden is open to argument: it may be that it should be read down so as to be consistent with Convention rights, or it may be that it is simply to be disregarded in so far as it is inconsistent with those rights. The practical result is the same in either case. So far as renewals of authority are concerned, rule 94(6) provides that the Ministers may, on any subsequent application of the governor, renew the authority for further periods of one month commencing from the expiry of the previous authority. The power of renewal is predicated upon there being a valid grant of authority, but no time limit is imposed on the decision to renew that authority, other than the general implication that it must be made within a reasonable period. On the facts of the present case, there were, as I have explained, three occasions when authority under rule 94(5) was purportedly granted after the 72 hour period had expired. No attempt has been made to rely upon the Human Rights Act as providing a lawful basis for the continuation of the appellants segregation on those occasions. In these circumstances, the only conclusion open is that the authority was invalid and, as such, was incapable of renewal. The consequence is that the appellants segregation during periods totalling about 14 months lacked authorisation under the rules. That conclusion does not in itself entitle the appellant to any remedy in damages. Rule 94 does not confer on a prisoner any right to damages in the event that his segregation is unauthorised: R v Deputy Governor of Parkhurst Prison, Ex p Hague [1992] 1 AC 58; Bourgass and Hussain v Secretary of State for Justice [2015] 3 WLR 457. Furthermore, it is responsibly accepted on behalf of the appellant that he suffered no prejudice as a result of authority being granted late. The breaches of rule 94(5) bear, however, on the issues arising under article 8 of the ECHR, to which I shall return. Article 3 of the ECHR Article 3 provides: No one shall be subjected to torture or to inhuman or degrading treatment or punishment. On behalf of the appellant, it was submitted that his segregation violated that guarantee. As the European Court of Human Rights said in Ahmad v United Kingdom (2012) 56 EHRR 1, para 205, the circumstances in which the solitary confinement of prisoners will violate article 3 are now well established in its case law: 207. Solitary confinement is one of the most serious measures which can be imposed within a prison and, as the Committee for the Prevention of Torture has stated, all forms of solitary confinement without appropriate mental and physical stimulation are likely, in the long term, to have damaging effects, resulting in deterioration of mental faculties and social abilities. Indeed, as the Committees most recent report makes clear, the damaging effect of solitary confinement can be immediate and increases the longer the measure lasts and the more indeterminate it is. 208. At the same time, however, the court has found that the prohibition of contact with other prisoners for security, disciplinary or protective reasons does not in itself amount to inhuman treatment or punishment. In many states parties to the Convention more stringent security measures, which are intended to prevent the risk of escape, attack or disturbance of the prison community, exist for dangerous prisoners. 209. Thus, whilst prolonged removal from association with others is undesirable, whether such a measure falls within the ambit of article 3 of the Convention depends on the particular conditions, the stringency of the measure, its duration, the objective pursued and its effects on the person concerned. 210. In applying these criteria, the court has never laid down precise rules governing the operation of solitary confinement. For example, it has never specified a period of time, beyond which solitary confinement will attain the minimum level of severity required for article 3. The court has, however, emphasised that solitary confinement, even in cases entailing relative isolation, cannot be imposed on a prisoner indefinitely In the present case, it is accepted that the conditions of the appellants segregation were not such as in themselves to breach article 3. The space and layout of the cells were satisfactory, and there was integral sanitation, although it was not screened. Although a report lodged on behalf of the appellant concluded that the ventilation in the relevant segregation units (including the one at HMP Barlinnie) fell short of accepted standards, and that the level of natural light also fell below desirable standards, that view might be contrasted with the report by the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT), following a visit to Barlinnie in 2012, that the cells in the segregation unit had adequate lighting, including access to natural light, and adequate ventilation (Report to the Government of the United Kingdom on the Visit to the United Kingdom carried out from 17 to 28 September 2012). On any view, the conditions were compatible with respect for the appellants human dignity, and adequate to secure his health and well being. It is also accepted that the measures imposed on the appellant did not in themselves breach article 3. Although the regime prevented contact with the general prison population, it did not involve the appellants total isolation from other prisoners or from other human contacts. He was confined to his cell for between 20 and 22 hours per day. He was permitted to associate with other prisoners at times when he was released from his cell. He generally had access to one hour of exercise per day in the segregation unit yard. He often had access, for about an hour at a time, to a gym located in the segregation unit. He was entitled to receive visits and to use prison telephones. He had daily access to showers and newspapers. He occasionally had his hair cut. He was occasionally visited by an Imam. He occasionally attended court. After March 2008 all the cells in which he was accommodated had electric power, and a television was provided. Prior to that date, he was provided with a battery powered television in his cell. The impression conveyed by the documentation is that the staff of the various segregation units generally did their best to treat him as well as they could within the restrictions inherent in the rule 94 regime. On the other hand, no work or other occupation was provided or permitted in his cell, and education courses were not generally available. He was not permitted to attend religious services, although from May 2009 he attended a class for Muslim prisoners at HMP Glenochil. The objective pursued was the protection of the appellant from attack by other prisoners, in accordance with the duties imposed on the prison authorities both by domestic law and under the ECHR. It is not disputed that the intelligence received by the authorities was such as to give rise to a genuine and reasonable concern that he was at risk of serious injury or worse. The duration of the segregation was 56 months in total, divided into two periods of 11 and 45 months. The prison authorities were aware of the risks which segregation, especially for a prolonged period, can pose to mental health. The effects on the appellant were regularly monitored. Prison medical officers visited him at least once every seven days. They did not find that he was medically unfit to be segregated. He was examined in January 2007 by a psychologist at Barlinnie, who reported that he appeared to be coping well. When interviewed by a psychologist instructed by his lawyers for the purpose of these proceedings in May 2010, towards the end of his period in segregation, his demeanour indicated low mood. He reported anxiety about going outside the segregation unit, hearing voices, which the psychologist considered to be a reaction to his environment, and a loss of confidence. Without under estimating the unpleasantness of the symptoms reported by the appellant, it is not suggested in the report, or in any other evidence before the court, that he suffered any severe or permanent injury to his health. Considering the facts of this case against the criteria applied in the case law of the European Court, the treatment of the appellant did not attain the minimum level of severity required for a violation of article 3. It is important to bear in mind that the isolation which he experienced was partial and relative. The fact that his segregation was imposed in the interests of his own safety is also relevant. There is no doubt that the duration of his segregation was undesirable, and indeed exceptional by the standards of prisons in the United Kingdom. There are also respects in which his conditions might have been improved, in particular by making greater provision for the pursuit of purposeful activities. The procedural protections available were not as effective as they should have been, particularly as a result of the prolonged delay in obtaining legal aid. Nevertheless, comparison with such cases as Ramirez Sanchez v France (2006) 45 EHRR 1099, where the applicant was held for eight years in solitary confinement, under much more stringent conditions than the appellant, indicates that segregation of the duration experienced by the appellant, under the conditions in which he was held, does not entail a violation of article 3. Article 8 of the ECHR Article 8 provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. It is accepted on behalf of the Ministers that segregation is an interference with the right to respect for private life guaranteed by article 8(1), and therefore requires to be justified under article 8(2). That concession reflects the approach adopted by the European Court in Munjaz v United Kingdom [2012] 1 MHLR 351. The questions that arise are accordingly (1) whether the appellants segregation pursued a legitimate aim, (2) whether it was in accordance with the law, and (3) whether it was necessary and proportionate in order to achieve the legitimate aim pursued. The Ministers bear the burden of establishing that these requirements were met. Legitimate aim There is no doubt that the segregation pursued a legitimate aim, namely the protection of the appellants safety. In accordance with the law Whether the segregation was in accordance with the law is a more difficult question. In the first place, as I have explained, there were periods during which the appellant was held in segregation without valid authorisation under the Prison Rules. During those periods, his segregation was not in accordance with the law, and accordingly his rights under article 8 were breached. It was also argued that his segregation was not in accordance with the law because the protections provided by the law were not effective in practice. Two related points were made. First, it was argued that the reasons given for the decisions to segregate the respondent, or to apply for the continuation of his segregation, were formulaic and repetitive, and did not indicate that genuine consideration had been given to the question whether it was necessary for his segregation to continue. Secondly, many of those decisions appeared to have given formal effect to prior decisions taken by a body with no status under the Prison Rules, namely the Executive Committee for the Management of Difficult Prisoners (ECMDP). In order to address these arguments, it is necessary to consider the history of the appellants segregation. First, however, it may be helpful to explain the nature and role of the ECMDP (subsequently re named the Prisoner Monitoring and Assurance Group). It is a non statutory body, composed of prison governors and chaired by a senior official of the Scottish Prison Service (SPS), whose terms of reference include: 1. To manage the location, movement and progression of all prisoners . held out of association for three months or more under rule 80 of the [1994 Rules, and] 2. To monitor the provision of appropriate accommodation and regimes for difficult prisoners . The guidance on segregation issued by the SPS in November 2006 states: ECMDP also carry out an important corporate monitoring role of the rule 94 process. The membership of the above committee comprises senior managers from all mainstream establishments and its role is to consider the management of difficult prisoners, some of whom are held for lengthy periods of time on rule 94 conditions. The committee regularly reviews the progress of such prisoners and at times recommends action to assist with the progress and re integration of difficult prisoners to mainstream conditions. According to a report by the Scottish Public Services Ombudsman on the appellants case, to which it will be necessary to return, the ECMDP determines where such prisoners are to be held, and is accountable to the SPS Director of Custody, who has executive authority for the placement of all prisoners held out of association for three months or more under rule 94 and for the management policy applicable to them. On 6 October 2005 the appellant was remanded in custody at Barlinnie pending his trial. The following day, he was segregated under rule 95(2) of the 1994 Rules, pending adjudication of a charge of assaulting another prisoner in his hall. It was noted that he had declined protection. On 10 October 2005, he was segregated under rule 80(1) of the 1994 Rules. Numerous applications for authority to continue his segregation were subsequently made. The same reasons for making the applications were generally repeated verbatim, or with minor changes. They were to the effect that the crime with which the appellant was charged had caused highly racial motivated feelings within the local prisoner population and had rendered the appellant a target for retribution. There does not appear to have been any specific intelligence report indicating a risk to the appellants safety during this period, other than a threat, on 7 October 2005, of revenge by the victim of the assault that day. During this period, the appellant was discussed at a meeting of the ECMDP on 12 January 2006. The minute records that he was to remain within segregation unit until trial commences. That minute pre dated the start of the trial by almost nine months. On its face, it recorded a decision as to how rule 94 or its predecessor would be applied during the intervening period. On 18 September 2006 the appellant was transferred to HMP Edinburgh in anticipation of his trial. He was accommodated in the mainstream regime there until the conclusion of the trial on 8 November 2006. No incidents between the appellant and other prisoners were recorded during this period. On his return from court after his conviction, he was placed in segregation. On 9 November 2006 the appellant was returned to HMP Barlinnie and was immediately segregated, for the same reasons as previously. He remained in segregation there until 28 January 2007, the necessary applications for authority being made by the local management and granted by officials. The last such application, granted on 12 January 2007, stated that to admit the appellant to a mainstream regime at that time would result in disorder. The only specific intelligence report during this period dated from 9 November 2006, and was to the effect that the appellant and his co accused would be killed if they were located at HMP Glenochil. It was also recorded on 25 January 2007 that there had been a heated exchange of words between the appellant and another prisoner, with threats being made. During this period, the cases of the appellant and his co accused were discussed at a meeting of SPS senior management on 15 November 2006. It was minuted that reliable intelligence indicated that they were at very real risk of attack were they to be located in mainstream circulation in any prison in Scotland. Their location in a protection regime would not offer a significantly diminished prospect of violence. It was decided that they would be held out of circulation under rule 94 while consideration was given to their medium and longer term management. It was agreed that they should be held in segregation units that offered a similar range of facilities, namely Edinburgh, Glenochil, Kilmarnock, Perth and Shotts. The regime to be delivered in the units would need to be coordinated. A further meeting would therefore be held to identify a model approach and a process for coordinating and monitoring delivery. On the face of this document, it had been decided that the appellant would continue to be held in segregation, in advance of formal decisions being made under rule 94. A meeting was then held on 22 November 2006 of the managers responsible, as the minute stated, for the segregation units within HM Prisons Shotts, Glenochil, Barlinnie, Perth and Edinburgh where these prisoners will be held. A timetable was agreed for their transfers between segregation units. In relation to the appellant, it was agreed that he would spend December 2006 and January 2007 in the segregation unit at Barlinnie, February and March 2007 in the segregation unit at Edinburgh, April and May 2007 in the segregation unit at Perth, June and July 2007 in the segregation unit at Shotts, August and September 2007 in the segregation unit at Glenochil, October and November 2007 in the segregation unit at Edinburgh, December 2006 and January 2008 in the segregation unit at Barlinnie. The segregation unit manager where he was currently held would submit the next application for authorisation with an agreed content, and would circulate it to the other segregation units to ensure consistency. The minutes of the meeting were to be supplied to the assistant director of prisons and to the official at SPS headquarters who subsequently granted many of the authorisations. On the face of this document, the managers agreed in advance that their powers under rule 94 would be exercised to keep the appellant in segregation for a further period of over a year. At a meeting of the ECMDP on 5 December 2006 it was agreed that the appellant would be dealt with through the ECMDP for all future management and progression issues. On 17 January 2007 a meeting was held of SPS officials and the relevant segregation unit managers. It was agreed that the appellant and his co accused would be transferred as per the plan. On 28 January 2007 the appellant was transferred to Edinburgh and immediately segregated. The reason given was that he is managed through ECMDP and the rule 94 is applied for to keep him in Edinburgh segregation unit. It was during this period in Edinburgh that authority for segregation beyond the first 72 hours was, for the first time, granted late and subsequently renewed. The applications stated that to admit the appellant to mainstream would result in disorder. The last of the applications included a note of a case conference which stated that the appellant would be held in segregation until a decision was taken by the ECMDP to relocate [him] to a mainstream regime. On its face, that implied that local management regarded themselves as required to maintain the appellants segregation unless and until the ECMDP decided otherwise. During this period, an intelligence report was received on 9 March 2007 to the effect that the appellant and his co accused would be stabbed if they went into the mainstream at Glenochil. There was also a report of the appellant being racially abused by other prisoners while on his way to the gym. On 3 April 2007 the appellant was transferred to Perth and immediately segregated. The application for authority for continued segregation beyond the initial 72 hours stated that the appellant is managed by the ECMDP and any major decisions on his management are currently made by them. When that was renewed in May 2007, the reason given for the application was that the appellant remains in segregation subject to a national directive. Authority was renewed again in June 2007, the reason for the application being that the appellant remains subject to removal from general association subject to HQ direction. The application included a letter from the manager of the segregation unit, who stated that the appellant was admitted there as part of a national agreed programme. The apparent implication of these documents is again that local management did not regard it as their responsibility to make an independent judgment under rule 94. On 2 July 2007 the appellant was transferred to Shotts and immediately segregated. The reasons given narrated that the appellant was transferred to HMP Shotts segregation unit, and referred to the need for time to determine his future management at Shotts so as to protect his safety. This period in Shotts was the second during which authority for continued segregation was granted late and subsequently renewed. The application for authorisation included a note of a case conference recording that Shotts was looking at integration into the mainstream, possibly at the National Induction Centre or NIC, which was located there. It was also noted that the appellant would receive his visits in the main visiting room, so that the reactions of other prisoners towards him could be monitored. The authorisation was renewed in August 2007, when the application stated that a protocol had been formulated and would be implemented to allow his phased integration into the NIC. During this period, there were intelligence reports to the effect that the appellant would be killed if he were admitted to a particular hall. A further renewal was granted in September 2007. The application stated that attempts at reintegration within the NIC had resulted in protests and information that prisoners were prepared to assault the appellant should the attempts be continued. The appellant had also attempted to assault a prisoner. Local management did not consider it safe to try any further integration at that time. Further renewals were granted during October, November and December 2007. The applications stated that the appellant was held under ECMDP conditions due to concerns about his safety and the safety of others. A further renewal was granted on 7 January 2008. A note of a case conference stated that his case would be discussed at an ECMDP meeting on 8 January 2008, and that future decisions were dependent on outcome of that meeting. At that meeting, it was noted that Barlinnie had agreed to take the appellant. On 15 January 2008 the appellant was returned to Barlinnie and was immediately segregated. The reason given was that he had been admitted into the segregation unit as part of an agreement at the recent ECMDP, and that there remained considerable bad feeling from a lot of the prison population. Segregation was felt to be appropriate until a long term management plan be put in place via ECMDP. Authority for continued segregation was granted later in January and February 2008, when the application included a note of a case conference stating that the appellant was to remain in Barlinnie under rule 94 conditions, and that this was the decision by ECMDP. Further renewals were granted during March and April 2008. The notes of the most recent case conference stated that the decision that he should remain in Barlinnie under rule 94 conditions was a decision by ECMDP, and that the future action required was the responsibility of ECMDP. On their face, these documents bear the same implication as those discussed earlier. At a meeting of the ECMDP on 12 March 2008, it was minuted that the appellant would remain on long term rule [94], and that there would be a need for periodical transfers between establishments. On its face, that again confirms that the appellants continued long term segregation was pre determined. At the meeting of ECMDP on 14 May 2008, it was decided that he should be kept at Barlinnie. A further renewal was granted on 16 May 2008, the reason for the application stating that the appellants admission into the segregation unit at Barlinnie was part of an agreement at the recent ECMDP, and that there was still considerable bad feeling towards the appellant. In the meantime, the appellant had complained to the Scottish Prisons Complaints Commissioner (the SPCC), who exercised a statutory jurisdiction under Part 12 of the 2006 Rules. On 2 June 2008 the SPCC wrote to the ECMDP, expressing disappointment that there had been little or no progress since he had first looked at the case, 16 months earlier. He asked the ECMDP to consider the mental suffering and irreparable harm which many prisoners experienced through extended periods of segregation. He asked the ECMDP to treat the matter as a priority and to make a decision on the most appropriate placement for the appellant outside of a segregation unit. There was no response from the ECMDP, and its minutes contain no indication that the matter was discussed. SPS however replied to the effect that the appellant continued to be held appropriately on rule 94 conditions. Further authorisations were granted during June, July, August and September 2008. It was reported that threats had been made by other prisoners when the appellant was being escorted from the segregation unit for legal visits. There was a further renewal on 17 October 2008, when the note of the case conference stated that it had been decided by ECMDP that the appellant was to remain in Barlinnie on rule 94 conditions until further notice. On 21 October 2008 the ECMDP minuted that a move to mainstream conditions cannot be considered at this time. There was a further renewal on 17 November 2008, when the application recorded that the appellants brother, one of his co accused, had been placed in normal circulation in HMP Dumfries, but that the ECMDP had decided that the appellant should remain at Barlinnie. The case conference note recorded the ECMDPs decision that the appellant was to remain under rule 94 conditions. On 26 November 2008 the SPCC elicited the information that his recommendations had not been considered by the ECMDP. There was a further renewal in December 2008, when the appellant stated that both his co accused were now in normal circulation in Dumfries and had not experienced any problems. On 13 January 2009 the ECMDP agreed that Barlinnie will initiate discussions with Glenochil to arrange a smooth transition to their segregation unit, and that the move would take place during the coming weeks. In the meantime, there were further renewals. On 13 March 2009 the appellant was transferred to Glenochil and immediately placed in segregation. The segregation units profile for the appellant recorded that he came there as a result of ECMDP under rule 94 conditions. Authorisation for continued segregation was granted, and renewed in April 2009, when it was reported that the appellant had been verbally abused by other prisoners. It was also reported that local management were carrying out risk assessments in order to assess whether the appellant could be located in association with other prisoners. A further exchange between the appellant and other prisoners, involving threats, occurred later in April 2009. In May 2009 he began attending a class with other Muslim prisoners. An ECMDP meeting that month minuted, in relation to the appellant: Stay Glenochil segregation. Further renewals were granted during May, June, July and August 2009. During that period, there was a further report, in July 2009, of threats of violence towards the appellant. At an ECMDP meeting on 2 September 2009 it was noted that Glenochil had difficulty integrating the appellant into the mainstream, and that Shotts had agreed to take him in the hope of his being moved to the NIC. On 9 September 2009 the appellant was transferred to Shotts and immediately segregated. This period in Shotts was the last during which authority for continued segregation was granted late and subsequently renewed. The application for renewal in November 2009 included a note of a case conference earlier that month, when the appellant was told that his case management had been referred back to the ECMDP, which was meeting that day, and depending on the recommendations a rule 94 extension will be applied for. In the event, the ECMDP noted a recent increase in intelligence regarding risks to his safety if he were returned to a mainstream hall. Several intelligence reports of threats to the appellants safety, if he were moved to the NIC, were received during this period. Further renewals were granted during December 2009, and January and February 2010, when it was reported that there was resistance by other prisoners to the appellants integration into the mainstream. Further orders were made during March, April and May 2010. It was explained that the feasibility of reintegration at the NIC had again been explored but was considered to be unsafe. The papers also record that the appellant had indicated his unwillingness to be subject to a protection regime. There was further intelligence of a threat to his safety during that period. By this time, the appellant had complained to the Scottish Public Services Ombudsman. In its report, dated 21 April 2010, it found that it was clear that the ECMDP was not regularly reviewing the appellants case, and that there was no evidence of its having been reviewed at all between May 2007 and January 2008. It recommended that the SPCC should urgently establish from the SPS whether there was any long term plan for the appellants management and reintegration. At an ECMDP meeting on 18 May 2010 it was noted that the attempts made at Shotts to integrate the appellant into mainstream conditions had not gone well, and that Edinburgh had agreed to take him. On 11 June 2010 the appellant was returned to Edinburgh and immediately segregated. Authority for continued segregation was granted during June and July 2010. As I have explained, the Scottish Public Services Ombudsman had recommended that the SPCC urgently establish whether there was any long term plan for the appellants management and reintegration. During June 2010, legal aid was also granted for the present proceedings. Following the appellants transfer to Edinburgh, management there undertook an appraisal of how he might be integrated into the mainstream. On 7 July 2010 a management plan for the appellant was prepared. It set out a carefully staged series of measures, designed to result in the appellants integration during August 2010. As counsel for the Ministers acknowledged, no similar plan had been drawn up earlier. It was successfully implemented. The appellant gradually spent greater amounts of time in the mainstream over a period of weeks, with appropriate supervision and support from staff, until he was ultimately able to be integrated into the mainstream on 13 August 2010. Before this court, counsel for the Ministers explained that the appellant had been successfully integrated on that occasion, unlike the previous attempt at Shotts during 2007, in part because there was an active judicial review challenge. As he put it, the judicial review proceedings forced the authorities hand. Having summarised the factual background, it is necessary to return to the argument that the decisions made by local prison management under rule 94 were essentially a formality, the true decision making function being exercised by the ECMDP. In considering this argument, the Lord Ordinary accepted that the role of the ECMDP did not fit easily within the Prison Rules, and that it was clear that the local governors were looking to that body for guidance. He also expressed the view, however, that it was plain that the local governors and the Ministers were satisfied that the appellant should not be in the mainstream prison environment, and that the appropriate procedure was followed at the end of each month. He concluded that, even if the role adopted by the ECMDP was outside the Prison Rules, it did not amount to a violation of article 8. It is not entirely clear whether the Lord Ordinary accepted that the local management had not regarded it as their responsibility to make an independent judgment, but he appears to have considered that they had in any event shared the ECMDPs view that continued segregation was appropriate. The Extra Division expressed their view somewhat more clearly, describing the role of the ECMDP as essentially advisory. In relation to these conclusions, it should be noted that they were inferences drawn from the same documents as are before this court: no other evidence was adduced in relation to this matter, either orally or by affidavit. The starting point, in considering this issue, is the rule of domestic administrative law that a statutory power of decision making must be exercised by the person on whom the power has been conferred. The point is illustrated by R v Deputy Governor of Parkhurst Prison, Ex p Hague. The case arose from the fact that the governor of one prison had purported to authorise the segregation of a prisoner on his arrival at another prison to which he was being transferred, as required by an instruction issued by the Home Office. The prisoners continued segregation at his new prison, after the initial period of segregation expired, was then automatically authorised on behalf of the Secretary of State, in accordance with the same instruction. Both authorisations were held by the Court of Appeal to be ultra vires: [1992] 1 AC 58, 102 et seq. The governor of one prison had no power to order the segregation of a prisoner held in another prison: the decision could only be taken by the governor of the prison where the prisoner was currently held. Nor could the Secretary of State lawfully authorise segregation as a matter of routine, without a genuine exercise of his discretion both as to whether his authority should be given and, if so, for how long. The point is also illustrated by Leech v Deputy Governor of Parkhurst Prison [1988] AC 533, 563, where the House of Lords explained that the Home Office had no authority to direct a prison governor as to how to exercise his disciplinary functions. The same is true, mutatis mutandis, of the SPS and the ECMDP vis vis the powers of the governor under rule 94. In the present case, where neither party has sought to rely on any evidence other than the documents before the court, one has to draw reasonable inferences from those documents. In the light of the documents, relevant extracts from which have been quoted, it would be unrealistic to view the role of the ECMDP as merely advisory, or to maintain that decisions whether it was appropriate for segregation to continue were left to the independent judgment of local management. Counsel for the Ministers frankly described the ECMDP minutes as unsatisfactory, and indefensible if looked at in isolation. I have quoted the minute of the meeting on 12 January 2006, recording, several months before the appellants trial, that he was to remain within segregation unit until trial commences. I have quoted the minute of its meeting on 11 November 2008, recording a move to mainstream conditions cannot be considered at this time. I have also quoted the minute of its meeting in May 2009: Stay Glenochil segregation. Other documents appear to imply that transfers between segregation units were pre arranged, sometimes several months in advance. Other documents imply that local management at some of the prisons proceeded on the basis that their decisions to segregate the appellant, or to apply for authority to continue his segregation, implemented decisions taken by the ECMDP, and that any change in his status had to be initiated by that committee. For example, Edinburgh recorded that the appellant would be held in segregation until a decision was taken by the ECMDP to relocate [him] to a mainstream regime. Perth recorded that he was admitted to its segregation unit as part of a national agreed programme and remained there subject to a national directive. Barlinnie recorded more than once that the appellants admission into its segregation unit was part of an agreement at the recent ECMDP, and that the decision that he should remain under rule 94 conditions was a decision by ECMDP. At the same time, it also appears from the documents that, at some prisons, during some periods of the appellants segregation, local management made independent assessments of the appropriateness of continued segregation in the light of the current risks to his safety. The first period which the appellant spent at Shotts is not the only example, but it is the clearest. It may not be coincidental that there was no consideration of the appellants case by the ECMDP during that period. In these circumstances, it would be inappropriate to generalise. The only reasonable conclusion which can be drawn, however, in the light of what was written by those involved, and in the absence of any other evidence, is that some of the decisions taken by local management to segregate the appellant under rule 94(1) or its predecessor, to apply for authority for his segregation to continue under rule 94(5), and to apply for the renewal of such authority under rule 94(6), were not taken in the exercise of their own independent judgment, but proceeded on the basis that the relevant judgment had already been made, or would be made, by the ECMDP. They proceeded, in other words, not on the basis that the ECMDP was performing an advisory function, but that it was taking decisions which they were expected to follow. Whether or not the ECMDP expected its decisions to be viewed in that way is beside the point. What matters is whether the power of decision was in reality exercised independently by the person to whom it was entrusted by the legislation. Nor does it matter if the subsequent decision to grant or renew authority was properly taken on behalf of the Ministers: their power of decision was predicated upon a valid application to them, which depended on the lawful exercise of the power conferred on local management. Like the failure to obtain valid authorisation for some of the time spent in segregation, this breach of domestic law results in a violation of article 8. It has not however been established that it caused any prejudice to the appellant. Whenever local management carried out an independent assessment, the invariable conclusion was that segregation was necessary in order to protect the appellants safety. When attempts were made by local management to reintegrate the appellant at Shotts and Glenochil, they were abandoned in the light of the hostile response of other prisoners and threats of violence. It has not been argued, let alone established, that the appellants segregation might have been ended earlier if local management had not deferred to the ECMDP. Proportionality There is no doubt that the appellants case presented the SPS management with a very difficult problem. Nevertheless, they had to apply their minds to find an appropriate solution. In view of the length of the appellants segregation, a rigorous examination is called for by the court to determine whether the measures taken were necessary and proportionate compared with practicable alternative courses of action. In its judgment in Razvyazkin v Russia (Application No 13579/09) given 3 July 2012, the European Court cited at para 89 the discussion of proportionality in the 21st General Report of the CPT, of 10 November 2011: Given that solitary confinement is a serious restriction of a prisoners rights which involves inherent risks to the prisoner, the level of actual or potential harm must be at least equally serious and uniquely capable of being addressed by this means. This is reflected, for example, in most countries having solitary confinement as a sanction only for the most serious disciplinary offences, but the principle must be respected in all uses of the measure. The longer the measure is continued, the stronger must be the reason for it and the more must be done to ensure that it achieves its purpose. (para 55) The last sentence in that passage is reflected in a statement which the European Court has often repeated, for example in the Grand Chamber judgment in Ramirez Sanchez at para 139: that the reasons for segregation will need to be increasingly detailed and compelling the more time goes by. The Extra Division commented that they had difficulty understanding what this meant: if a threat remained the same, it was difficult to see how greater detail could be given. What is meant, as it appears to me, is that because the actual or potential harm which segregation may cause to the prisoner increases the longer that segregation is prolonged, the seriousness of the risk of harm required to justify his segregation becomes correspondingly greater. In addition, the court will become correspondingly more demanding in scrutinising whether segregation is the only means of addressing the risk, given the increasing risk that segregation will itself cause serious harm to the prisoner. The serious risks to the mental health of prisoners who are subject to prolonged segregation are well known, and are recognised both in international standards and domestically. An interim report submitted to the UN General Assembly in August 2011 by Juan E Mndez, the Special Rapporteur of the Human Rights Council on torture and other cruel, inhuman or degrading treatment or punishment, expressed particular concern about prolonged solitary confinement (or segregation, as it was also termed), which he defined as solitary confinement in excess of 15 days. He noted that after that length of time, according to the literature surveyed, some of the harmful psychological effects of isolation can become irreversible (para 26). He also noted that lasting personality changes often prevent individuals from successfully readjusting to life within the broader prison population and severely impair their capacity to reintegrate into society when released from prison (para 65). The previous Special Rapporteur, Manfred Nowak, annexed to an earlier report, submitted in July 2008, the Istanbul Statement on the Use and Effects of Solitary Confinement, adopted on 9 December 2007. It stated, in a passage cited by the Special Rapporteur: It has been convincingly documented on numerous occasions that solitary confinement may cause serious psychological and sometimes physiological ill effects. Research suggests that between one third and as many as 90% of prisoners experience adverse symptoms in solitary confinement. A long list of symptoms ranging from insomnia and confusion to hallucinations and psychosis has been documented. Negative health effects can occur after only a few days in solitary confinement, and the health risks rise with each additional day spent in such conditions. Similar conclusions were reached by the CPT in its 21st General Report of 10 November 2011. It referred to evidence that solitary confinement can have an extremely damaging effect on the mental, somatic and social health of those concerned, which increases the longer the measure lasts and the more indeterminate it is (para 53). It considered the maximum period for which solitary confinement should be imposed as a punishment to be 14 days (para 56(b)). The dangers of prolonged segregation have also been accepted by government within the United Kingdom. In relation to England and Wales, the relevant Prison Service Order (PSO 1700, first issued in 2003) states at p 29: Research into the mental health of prisoners held in solitary confinement indicates that for most prisoners there is a negative effect on their mental wellbeing and that in some cases the effects can be serious. A study by Grassian & Friedman (1986) stated that, Whilst a term in solitary confinement would be difficult for a well adjusted person, it can be almost unbearable for the poorly adjusted personality types often found in a prison. The study reported that the prisoners became hypersensitive to noises and smells and that many suffered from several types of perceptual distortions (eg hearing voices, hallucinations and paranoia). The risks involved in prolonged segregation are also acknowledged by the SPS. The guidance document issued in November 2006, referred to earlier, states that there should be awareness of the impact that segregation may have on a prisoners mental health. It states that it is an established principle that segregation should be used sparingly and for the minimum time necessary, in order to protect the physical and mental health of segregated prisoners. Every prison system has prisoners who are unable, for a variety of reasons, to serve their sentences in the mainstream. This may be because they require protection from other prisoners, because of the nature of their offence, their co operation with the criminal justice authorities, inter gang rivalries, debts inside or outside the prison, or the general vulnerability of the person. It may be because they themselves present a threat to the safety of other prisoners, or because their behaviour is liable to jeopardise the good order of the prison. In the first instance, such prisoners can be removed from association under rule 94 and located in a segregation unit. As the European Court has emphasised, however, they cannot be held in segregation indefinitely: Ramirez Sanchez, para 145. The basic obligation which the prison system attempts to secure by the segregation of prisoners for the purpose of protection to provide a safe environment for those confined to prison is ultimately inconsistent with the use of segregation as a long term measure. There are however ways in which states can fulfil this obligation over the long term, in respect of prisoners who remain at risk of harm. One option is to identify particular locations as accommodation for prisoners who are likely to be unsuitable for mainstream accommodation for a prolonged period. Such locations might accommodate small groups of prisoners with reduced levels of association and increased officer supervision. Locations of that nature existed in Scottish prisons until relatively recently, at the Barlinnie Special Unit and similar units at Perth, Peterhead and Shotts. Broadly analogous locations continue to exist in England and Wales, in the form of High Supervision Units and Close Supervision Centres. In the absence of any such unit in Scotland during the period in question, the only option considered in the appellants case was his segregation until a long term management plan [is] put in place via ECMDP, as the applications for authority repeatedly stated. There was however no meaningful plan put in place until the appellant had been in segregation for 55 months. Whether a successful plan might have been put in place earlier is uncertain, but by no means impossible. It is noteworthy that the appellant was accommodated safely in the mainstream remand population at Edinburgh between September and November 2006, and that he was able to be integrated into the mainstream population there within a short time of his transfer there in June 2010. The possibility cannot be excluded that he might have been integrated there earlier, if a suitable plan had been devised and implemented. It is also noteworthy that his co accused were integrated into the mainstream at Dumfries while the appellant continued to be segregated in establishments in west central Scotland, where attitudes towards him might have been expected to be most hostile. It has not been explained why the appellant could not have joined his co accused, or indeed could not have been placed with them during the years when all three were in segregation. Quite apart from the possibility of the appellants being successfully transferred to a prison in another part of Scotland, it is also accepted that no consideration was given to the possibility of transferring him to a prison elsewhere in the United Kingdom, under the provisions of Schedule 1 to the Crime (Sentences) Act 1997. In deciding whether the Ministers have complied with the standards laid down in the Convention, the scope for them to find appropriate accommodation for prisoners elsewhere in the United Kingdom has to be borne in mind (Mathew v The Netherlands (2005) 43 EHRR 444, para 204). It is however unnecessary to speculate about these and other possibilities. What is apparent is that no meaningful plan was devised until a very late stage. It is for the Ministers to establish that the appellants segregation for 56 months was proportionate. In my judgment, in the absence of any evidence that serious steps were taken by the SPS management to address the issues arising from his segregation until four and a half years after it had begun, they have failed to do so. Just satisfaction Where the court finds that an act of a public authority is unlawful under section 6(1) of the Human Rights Act, as in the present case, section 8(1) of the Act enables the court to grant such relief or remedy, or make such order, as it considers just and appropriate. Under section 8(3) of the Act, no award of damages is to be made unless, taking account of all the circumstances of the case, including any other relief or remedy granted, the court is satisfied that the award is necessary to afford just satisfaction to the person in whose favour it is made. Section 8(4) requires the court, in determining whether to award damages, or the amount of an award, to take into account the principles applied by the European Court under article 41 of the Convention. The approach which should be adopted was explained by the House of Lords in R (Greenfield) v Secretary of State for the Home Department [2005] UKHL 14; [2005] 1 WLR 673, and by this court in R (Faulkner) v Secretary of State for Justice; R (Sturnham) v Parole Board of England and Wales (Nos 1 and 2) [2013] UKSC 23 and 47; [2013] 2 AC 254. The European Court has considered the application of article 41 in a number of cases concerned with violations of article 8 where prisoners were subject to segregation. In some cases, modest awards have been made in respect of non pecuniary damage arising not from the segregation itself, but from other restrictions imposed. For example, in Glmez v Turkey (Application No 16330/02) given 20 May 2008, an award was made in respect of a restriction on the prisoners right to receive family visits. In other cases, the court declined to make an award in respect of non pecuniary damage, holding that the finding of a violation of the Convention in itself constituted sufficient just satisfaction: see, for example, Messina v Italy (No 2) (Application No 25498/94) given 28 September 2000. On general principles, however, there is no doubt that an award may be made in respect of the costs and expenses necessarily incurred in order to establish the violation, or for its prevention or redress. In the present case, it is not suggested that the appellant was prejudiced by the breaches of the time limit under rule 94(5), which invalidated the authorisation of 14 months of his segregation. His segregation would without doubt have continued during those periods even if the procedures had been carried out timeously. Nor has it been established that the deference of local management to the ECMDP was prejudicial to the appellant. Whether the failure to develop a management plan for his integration into the mainstream, or to consider possible transfers, resulted in the prolongation of his segregation is possible but uncertain. Three matters are however clear. One is that it is not suggested that he suffered any severe or permanent injury to his health as a consequence of the prolongation of his segregation. Another is that the degree of interference with his private life which resulted from his removal from association with other prisoners was relatively limited, given the attitude of the other prisoners towards him. The third is that he was not isolated from all contact with other prisoners, and remained entitled to receive visits and to make telephone calls. In these circumstances, just satisfaction can be afforded by making a declaratory order, establishing that the appellants Convention rights were violated, and by making an appropriate award of costs. Conclusion For these reasons, I would allow the appeal and grant declarator (1) that the appellant was segregated without lawful authority (a) between 11.15 am on 31 January 2007 and 9.55 am on 3 April 2007, (b) between 6 pm on 5 July 2007 and 4 pm on 15 January 2008, and (c) between 4.30 pm on 12 September 2009 and 4.30 pm on 13 March 2010, and (2) that the circumstances of the appellants segregation violated his Convention rights under article 8. I would in addition find the appellant entitled to the costs of this appeal, and invite submissions in relation to the expenses of the proceedings in the Court of Session.

In 2006 the appellant and his two co accused were convicted of the racially aggravated abduction and murder of a 15 year old boy. Upon being remanded in custody, from 7 October 2005 the appellant was removed from association with other prisoners and placed in solitary confinement (segregation). It was considered that the appellant and his co accused were liable to attack by other prisoners, and there were persistent fears for their safety if accommodated in mainstream conditions. Apart from a period immediately prior to and during his trial, the appellant remained in continuous segregation until 13 August 2010. Altogether he spent 56 months in segregation. The appellant was segregated pursuant to the Prisons and Young Offenders Institution (Scotland) Rules 1994 and the subsequent Prisons and Young Offenders Institution (Scotland) Rules 2006, the relevant provisions of which are identical. Rule 94 of the 2006 Rules permit a Governor to authorise segregation for up to 72 hours for the purpose of maintaining good order or discipline, protecting the interests of any prisoner, or ensuring the safety of other persons. Segregation beyond 72 hours for a further month must be authorised by the Scottish Ministers, prior to the expiry of the said period of 72 hours, on the application of a Governor. The Scottish Ministers may renew the authority for further monthly periods, again on the application of a Governor. The appellant sought orders declaring that certain periods of his segregation were in breach of the relevant Prison Rules, and that his segregation violated article 3 of the European Convention on Human Rights, the prohibition against torture, inhuman and degrading treatment, and article 8, the right to respect for private life. His judicial review challenging the lawfulness of his segregation was refused by both the Outer House and the Inner House of the Court of Session. The Supreme Court unanimously allows the appeal, granting a declarator (1) that the appellant was segregated unlawfully during three separate periods totalling 14 months; and (2) that his article 8 rights were violated. Lord Reed gives the only judgment with which Lord Neuberger, Lady Hale, Lord Sumption and Lord Hodge agree. There are three issues in the appeal: (1) whether the authorities admitted failure to comply with the time limits imposed by the Prison Rules invalidated the continued segregation; (2) whether the appellants segregation breached article 3 of the Convention; and (3) whether his segregation violated article 8. On the first issue, rule 94(5) means that segregation should not continue beyond the initial 72 hours unless the Ministers authority has been granted before the 72 hours have expired [15]. Rule 94(6) makes it clear that the Ministers authority takes effect from the expiry of the 72 hour period [16]. A late authority by the Ministers, granted after the expiry of the 72 hour period, cannot have effect [17]. This is consistent with the purpose of the legislation: to provide a safeguard for the protection of the prisoner, by ensuring that the need for segregation is reviewed within a short time by officials external to the prison and that segregation is maintained only for so long as is necessary [18]. On the three occasions when authority for the appellants segregation was granted late, that authority was invalid, and incapable of renewal. Consequently, the appellants segregation for periods totalling about 14 months lacked authorisation under the Prison Rules [28]. It is however accepted that the appellant was not prejudiced as a result [29]. On the second issue, the conditions of segregation and the measures imposed were not in themselves in breach of article 3 [32 33]. The appellant was placed in segregation in the interests of his own safety, and there was a genuine and reasonable concern that he was at risk of serious injury or worse [34]. The appellant did not suffer any severe or permanent injury to his health. The isolation he experienced was partial and relative. Whilst the duration of his segregation was undesirable, and the conditions could have been improved, the appellants segregation did not attain the minimum level of severity required for a violation of article 3 [36 37]. On the third issue, the Ministers accepted that segregation is an interference with the right to respect for private life under article 8(1). It must therefore pursue a legitimate aim, be in accordance with the law, and be a proportionate means of achieving the aim pursued [39]. The segregation pursued a legitimate aim, namely the protection of the appellants safety [40]. However, during the periods in which the appellant was segregated without valid authorisation under the Prison Rules, his segregation was not in accordance with the law [41]. Additionally, some of the decisions taken by Governors to segregate the appellant or to apply for Ministers authorisation for his continued segregation were not taken in the exercise of their own independent judgment. Instead, they proceeded on the basis that the decision had already been made by the Executive Committee for the Management of Difficult Prisoners (ECMDP), a body which was not entrusted with the power to make such a decision. This invalidated subsequent decision making by the Ministers, as their power of decision was predicated on a valid application being made to them. This breach of domestic law also results in a violation of article 8, although it does not appear to have prejudiced the appellant, as when Governors did carry out an independent assessment, they reached the conclusion that segregation was necessary to protect the appellants safety [66 73]. In relation to proportionality, the seriousness of the risk of harm required to justify segregation becomes greater as time goes by, and increased scrutiny will be applied as to whether segregation is the only means of addressing the risk [76]. Other potential accommodation options, providing reduced association and greater supervision for prisoners who remain at risk of harm, were not available in Scotland during the period in question. No consideration was given to the possibility of transferring the appellant to a prison elsewhere in the UK. No meaningful plan was put in place until the appellant had been in segregation for 55 months. Accordingly, the Scottish Ministers have failed to establish that the appellants segregation for the entire period was proportionate [83 86]. In the circumstances, just satisfaction can be afforded by making a declaratory order [89].

The appellants await trial in the Crown Court at Southwark on three counts of an indictment. Count two charges them with making funds available to Iraq, contrary to articles 3(a) and 11(4) of the Iraq (United Nations Sanctions) Order 2000 and section 1 of the United Nations Act 1946. The particulars of offence allege that the appellants being directors of Mabey & Johnson Ltd, between 1 May 2001 and 1 November 2002, consented to, or connived in, the making of 422,264 available to the government of the Republic of Iraq, or a person resident in the Republic of Iraq, by Mabey & Johnson, without the authority of a licence granted by the Treasury. Mabey & Johnson Ltd were in the business of exporting pre fabricated bridges to developing countries and the essential allegation against the appellants is that they consented to the companys entering into an arrangement which facilitated the Iraqi Governments avoidance of international sanctions by allowing it indirectly to access funds held in a United Nations controlled account. The appellants have pleaded not guilty both to that count and to the other two counts, each of false accounting. The appellants have sought to have count two quashed on the basis that the Iraq (United Nations Sanctions) Order 2000 (SI 2000/3241) was ultra vires section 1 of the United Nations Act 1946. In essence they say that such an Order cannot be made under the 1946 Act unless made at or about the same time as the Security Council Resolution which it is implementing is itself made. This Order was made 10 years after the relevant Resolution. The argument failed before Judge Rivlin QC, the Recorder of Westminster, at a preparatory hearing at Southwark on 18 June 2010 (conducted pursuant to section 7 of the Criminal Justice Act 1987). It failed again on an interlocutory appeal (brought by leave of the Recorder pursuant to section 9(11) of the 1987 Act) to the Court of Appeal (Criminal Division), (Hooper LJ, Owen and Roderick Evans JJ) on 22 October 2010: [2010] EWCA Crim 2437. The Court of Appeal refused leave to appeal but certified two points of law of general public importance: (i) May the power to create criminal offences granted to Her Majesty in Council by section 1 of the United Nations Act 1946 only lawfully be exercised at or about the time of the relevant Security Council Resolution? (ii) If yes, are articles 3(a) and 11(4) of the Iraq (United Nations Sanctions) Order 2000 to the extent to which they create a criminal offence, ultra vires section 1 of the United Nations Act 1946 given that the relevant Security Council Resolution was adopted in 1990? The matter came before this court on 6 December 2010 when, at the outset of the hearing, the appellants were granted permission to appeal; at the conclusion of the hearing the appeal was dismissed for reasons to be given later. These reasons now follow. It is convenient at once to set out the most material parts of the three instruments here calling for particular consideration, beginning with the Security Council Resolution (SCR) referred to in the two certified questions. (1) SCR 661 (1990) (SCR 661) was adopted by the Security Council under Chapter VII of the UN Charter on 6 August 1990 (four days after Iraq invaded Kuwait, an invasion condemned that same day by SCR 660 (1990)). The Council reaffirmed SCR 660; by article 2 they decided to take measures to secure Iraqs compliance with it; by article 3 they imposed an embargo on trade with Iraq and Kuwait; and by article 4 the Council: decides that all states shall not make available to the government of Iraq, or to any commercial, industrial or public utility undertaking in Iraq or Kuwait, any funds or any other financial or economic resources and shall prevent their nationals and any persons within their territories from removing from their territories or otherwise making available to that government or to any such undertaking any such funds or resources and from remitting any other funds to persons or bodies within Iraq or Kuwait, except payments exclusively for strictly medical or humanitarian purposes and, in humanitarian circumstances, foodstuffs. (2) The United Nations Act 1946 (the 1946 Act) provides by section 1(1): If, under article 41 [in Chapter VII] of the Charter of the United Nations . (being the article which relates to measures not involving the use of armed force) the Security Council of the United Nations call upon His Majestys Government in the United Kingdom to apply any measures to give effect to any decision of that Council, His Majesty may by Order in Council make such provision as appears to Him necessary or expedient for enabling those measures to be effectively applied, including (without prejudice to the generality of the preceding words) provision for the apprehension, trial and punishment of persons offending against the Order. (3) The Iraq (United Nations Sanctions) Order 2000, made on 13 December 2000 and coming into force on 14 December 2000 (the 2000 Order), recites: Whereas under article 41 of the Charter of the United Nations the Security Council of the United Nations have, by a resolution adopted on 6 August 1990, called upon Her Majestys Government in the United Kingdom and all other states to apply certain measures to give effect to a decision of that Council in relation to Iraq: Now, therefore, Her Majesty, in exercise of the powers conferred on Her by section 1 of the United Nations Act 1946, is pleased, by and with the advice of Her Privy Council to order, and it is hereby ordered, as follows. Articles 3 and 11 (the two articles referred to in count 2 and in the second certified question) provide: 3. Any person who, except under the authority of a licence granted by the Treasury under article 5 (a) makes any funds available to the Government of the Republic of Iraq or any person who is resident in the Republic of Iraq, or, (b) otherwise remits or removes any funds from the United Kingdom to a destination in the Republic of Iraq, is guilty of an offence. 11. (1) Any person guilty of an offence under article 3 . shall be liable (a) on conviction on indictment to imprisonment for a term not exceeding seven years, or a fine, or both . (4) Where a body corporate is guilty of an offence under this Order, and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Essentially the appellants argument comes to this. The 1946 Act was enacted, and the government was thereby permitted to introduce by executive order highly restrictive measures including new criminal offences and sanctions without a parliamentary majority or even parliamentary scrutiny, specifically so as to enable urgent (prompt, hasty, speedy and immediate were other words used by the appellants in the course of argument) action to be taken to implement article 41 UN Resolutions. Urgency alone justifies such wide executive power and the bypassing of the ordinary parliamentary processes and safeguards. The power, therefore, must be construed as subject to there being a need for its immediate exercise and limited, therefore, to its being exercised within a very short time scale. If not exercised at or about the same time as the Resolution being implemented, runs the argument, the power is lost by the effluxion of time. The appellants candidly acknowledge that they can find no example of any other power once given expiring by the effluxion of time (absent, obviously, legislation containing express sunset clauses). They submit, however, that, novel as their argument may be, there is support for it to be found in a number of the speeches made during the parliamentary debates leading to the passage of the 1946 Act and some support too in the judgments of this court in A v HM Treasury [2010] 2 AC 534. Principal amongst the passages from Hansard relied upon are these: (i) Subsection (4) provides that Orders in Council shall be laid forthwith before Parliament, but it excludes the application of a provision in the Rules Publication Act requiring the publication in the London Gazette of notice of the proposal to make the Order in Council for 40 days before the Order is made, it being obvious that the urgency with which decisions of the Security Council must be carried out renders any such notice quite impracticable. (Lord Jowitt LC, introducing the Bill at its second reading in the House of Lords: Hansard (HL Debates), 12 February 1946, col 376. (ii) [The Lord Chancellor] is fortunate in being able to bring forward a Bill to enable this Government to do things by Order in Council which will, I believe, have the complete, unanimous, and enthusiastic support of everybody in this House. If this organisation fails, all fails. If it is to succeed, it must be able to take effective action, and that action must be prompt and immediate. All the world must know that when it takes a decision, all the member states will be prompt and loyal in giving effect to such a decision. For the reasons the noble and learned Lord Chancellor has given, this method of Orders in Council is the only effective way by which we can do that. (Viscount Swinton, supporting the Bill at its second reading: Hansard (HL Debates), 12 February 1946, col 377. (iii) Subsection (4) provides that Orders in Council shall be forthwith laid before Parliament, but it excludes the application of a provision in the Rules Publication Act requiring publication in the London Gazette of notice of the proposal to make the Order in Council for 40 days before the Order is made. It is evident that that must be so, because, if we are to take action at all in pursuance of a decision by the Security Council, it must be taken with the least possible delay. Therefore, any such notice of 40 days would be really out of the question. (Mr Philip Noel Baker, Minister of State, introducing the Bills second reading before the House of Commons: Hansard (HC Debates, 5 April 1946, col 1516. (iv) The procedure by way of Order in Council under this Bill when it becomes an Act possesses the necessary combination of speed and authority to enable instant effect to be given to these international obligations to which we are pledged. (Mr W S Morrison, supporting the Bills second reading in the House of Commons. Hansard (HC Debates, 5 April 1946, col 1517). The terms of these debates, submit the appellants, demonstrate Parliaments clear intention that the powers granted under section 1(1) of the 1946 Act must be used with haste after the passing of the relevant United Nations Resolution requiring implementation. It was for that reason alone, they contend, that Parliament consented to the summary procedure for which the Act provides. The power must therefore be exercised speedily or not at all. As for the recent decision of this court in A v HM Treasury [2010] 2 AC 534, the appellants fix in particular upon passages in the judgments which recognise as had earlier judgments in the House of Lords, most notably in R v Secretary of State for the Home Department, Ex p Pierson [1998] AC 539 and R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 that a power conferred by Parliament in general terms is not to be taken to authorise the overriding of fundamental human rights or basic legal principles unless unambiguously conferred with that intention. They rely, for example, upon Lord Hopes judgment at p 626, para 47: I would approach the language of section 1 of the 1946 Act, therefore, on the basis that Parliament did not surrender its legislative powers to the executive any more than must necessarily follow from the words used by it. The words necessary and expedient both call for the exercise of judgment. But this does not mean that its exercise is unlimited. As, however, the appellants rightly recognise, A was concerned with a very different aspect of the scope of the power under the 1946 Act than is under consideration here. Whereas A was concerned with the proper limits of the content of Orders that can be made under the Act, the present appeal seeks to impose limits upon the time within which the power is properly exercisable. It is not suggested that an Order precisely in the terms of the 2000 Order could not properly have been made at around the time SCR 661 was adopted on 6 August 1990. What is contended is rather that, by 13 December 2000, the 1946 Act had long since ceased to be an available legislative route by which to implement the 1990 Resolution; the appellants argue that the new offences created by the 2000 Order could at that stage only have been introduced by ordinary parliamentary legislation. By the same token that A demonstrates the Order making power under the 1946 Act not to be unrestricted as to content, so too, the appellants submit, this court should now hold it not to be unrestricted as to the time of implementation either. And certainly, if the urgency of the need to give effect to a United Nations Resolution were indeed a precondition of the right to exercise the power, the strength of the appellants case would be obvious: ten years elapsed before the 2000 Order gave effect to (part of) the measures required by article 4 of SCR 661. Is, then, the suggested analogy between the situation facing the court in A and that arising here a true one? In our judgment it is not. The critical feature of the Orders in Council under consideration in A was that they plainly overrode the fundamental rights of those affected. Orders of that kind, the court held, were impermissible: the 1946 Act had neither expressly nor by necessary implication conferred so extreme a power. The essential reason why the court in A was prepared, indeed anxious, to examine the parliamentary material surrounding the passage of the 1946 Act was to make sure that there had in fact been nothing said by those introducing the Bill to suggest that the executive power being conferred was intended to permit fundamental human rights to be overridden. In short, Hansard was being examined to confirm the absence of a clear statement of such intention, the argument there being that a power of the width contended for by the Minister needed to have been conferred unambiguously. In the present case, by contrast, we can see no good reason to look behind the enactment of the 1946 Act, and a real risk of breaching parliamentary privilege if one does. As already stated, it is not suggested here that the 2000 Order overrides anyones fundamental human rights or is otherwise ultra vires the order making power conferred by the 1946 Act (save as to the delay in the Order being made). Obviously it was envisaged that the order making power would ordinarily need to be exercised speedily. But that is a far cry from saying that it was Parliaments clear intention to confine it to urgent use. Had that been the intention, one would have expected it to be clearly provided for in the Act. And inevitably, if it had been, some identifiable limit of time would have been formulated: how otherwise is the Minister, or the court in the event of legal challenge, to determine what precisely is the legal limit of the power? So far from anything of this kind being found in the legislation, it is entirely silent on the question, there being no hint of any such restriction in the language of the section. Indeed, it goes somewhat further even than this: section 1(3) of the 1946 Act provides: Any Order in Council made under this section may be varied or revoked by a subsequent Order in Council. The appellants necessarily, therefore, recognise that some variations may be made to existing Orders by subsequent Orders made perhaps years later. They are thus constrained to argue rather that this power of variation cannot be invoked to create serious criminal offences. Once the initial urgency has passed, they must submit, such offences can only be created through the normal legislative process. Again, however, had Parliament intended to place such limitations upon this power of variation, one would have expected it to say so rather than leave the position entirely uncertain. We have considered the issue thus far purely as one of principle and on the barest of facts, by reference simply to the long passage of time between the United Nations Resolution requiring measures to be taken and the Order giving effect to it. The Crown, indeed, have been anxious that we should do so, concerned no doubt lest otherwise anyone wishing to contest the vires of an apparently delayed 1946 Act Order will be able to require an explanation as to how the delay came about. As will now be apparent, moreover, even on this somewhat blinkered approach, it is our clear conclusion that the appellants argument must fail. We think it right, however, briefly to sketch in something of the broader context in which the 2000 Order in fact came to be made, partly to show that the case is not simply one of inexplicable tardiness on the part of a negligent government (indeed, succession of governments), but in part also to demonstrate that there may be perfectly good reason to act as the government did here which, of course, assuming that is so, makes it yet more unlikely that Parliament on conferring the power had been intent upon tightly circumscribing the time within which it could lawfully be exercised. As already indicated, SCR 661 was adopted on 6 August 1990, four days after Iraq invaded Kuwait. In the meantime, on 4 August, the Treasury had already given directions in exercise of powers conferred by section 2 of the Emergency Laws (Re enactments and Repeals) Act 1964 forbidding (save with Treasury permission) the carrying out of orders by the Government of, or any resident in, Iraq requiring any person to make any payment or to part with any gold or securities or requiring any change to be made in the persons to whose credit any sum is to stand or to whose order any gold or securities are to be held. To an extent, therefore, these directions anticipated the requirements of SCR 661. Shortly afterwards, namely two days after SCR 661 and in substantial implementation of the measures required by it, the Government on 8 August made the Iraq and Kuwait (United Nations Sanctions) Order 1990 (SI 1990/1651) pursuant to the 1946 Act power, imposing restrictions (as the Explanatory Note put it) on the exportation of goods from Iraq and Kuwait and on supply of goods to Iraq and Kuwait as well as certain related activities and dealings, including the carriage of such goods in British ships or aircraft. This Order thus gave effect to the entirety of SCR 661 save just a part of article 4. It was then amended on 29 August to add a new article 4A so as to ban the payment of any bond given in respect of a contract whose performance was prohibited under any other article: article 4 of the Iraq and Kuwait (United Nations Sanctions) (Amendment) Order 1990 (SI 1990/1768). There followed a succession of SCRs dealing with the Iraqi situation as it continued to develop over the next ten years. Putting it very shortly, on 15 August 1991 SCR 706 (1991) authorised the setting up of an oil for food programme, a programme, however, which was then rejected by Iraq on the grounds that it interfered with their sovereignty. On 14 April 1995 SCR 986 (1995) again authorised such a programme and this finally began to operate at the end of 1996. Thereafter the programme was extended on a six monthly basis by further Resolutions, each of which re affirmed the terms of SCR 661. With the passage of time, however, the scale and complexity of the humanitarian programme grew, and oil prices increased, to the point where there was ever greater scope for the manipulation of the programme by the Iraqi government. By September 2000 there were consistent reports of Iraq demanding a surcharge on all oil sales and on the purchase of all humanitarian goods, to be paid directly or indirectly to the Government of Iraq. In December 2000 the United Nations 661 Committee agreed that the payment of all such surcharges was illegal and in breach of the UN sanctions imposed on Iraq. On 5 December 2000 SCR 1330 (2000) was adopted inter alia allow[ing] the Council to take further action with regard to the prohibitions referred to in Resolution 661 . It was in the context of this ever changing diplomatic and international landscape that on 13 December 2000 the 2000 Order came to be made. If this brief history establishes nothing else, it demonstrates surely that Security Council Resolutions are not simply one off measures requiring immediate implementation by member states and then receding into history, and that situations can develop in the course of their subsequent enforcement which call for further measures to be taken, sometimes with considerable urgency, to meet emerging problems. It would be not merely inappropriate as a matter of construction but regrettable as a matter of fact were this court now to stultify the power conferred under the 1946 Act by confining its exercise within an artificially restricted time frame. For the sake of completeness we record that, since the above judgment was written, the appellants have now been convicted on count 2, the sanctions count. We have in the result lifted the anonymity order which was earlier imposed in these proceedings.

This appeal concerns the question whether the power to create criminal offences granted to Her Majestys government by section 1 of the United Nations Act 1946 (the 1946 Act) may only lawfully be exercised at or about the time of the relevant resolution by the Security Council of the United Nations which such order is implementing. At the time of the hearing of this appeal, the appellants, Forsyth and Mabey, were awaiting criminal trial on a number of charges, of which one is an offence of making funds available to Iraq contrary to the Articles 3(a) and 11(4) of the Iraq (United Nations Sanctions) Order 2000 (the Order). As a preliminary issue prior to the trial, the appellants sought to establish that the Order creating the offence of making funds available to Iraq was ultra vires section 1 of the 1946 Act. Section 1 grants power to the government to implement resolutions of the Security Council by an executive order without any parliamentary process. The appellants argument was that such a wide executive power could be justified only if the resolutions of the Security Council were implemented urgently and the power, therefore, must be construed as subject to its being exercised within a very short timescale. In essence, the appellants maintained that unless the power to make an order under the 1946 Act is exercised at or about the same time as the relevant Security Council resolution, that power is lost by the passage of time. The Order in question was made 10 years after the relevant resolution. The appellants lost both in the Crown Court and the Court of Appeal. The matter came before this court on 6 December 2010 when, at the outset of the hearing, the appellants were granted permission to appeal; at the conclusion of the hearing the appeal was dismissed for reasons to be given later. The present judgment contains those reasons. Lord Brown delivered the judgment of the court which held that the power conferred on the government by section 1 of the 1946 Act cannot be restricted by confining its exercise within an artificially restricted timeframe. The suggested analogy between the case of A v HM Treasury which was concerned with proper limits of the content of orders made pursuant to section 1 of the 1946 Act and the present appeal seeking to impose limits upon the time within which the power is properly exercisable is false: [9]. Unlike the case of A, where Hansard needed to be examined to confirm the absence of parliamentary intention to permit fundamental human rights to be overridden, there is no good reason to look behind the actual words of the 1946 Act in this case, and indeed a real risk of breaching parliamentary privilege if one does. Had Parliament intended to confine the order making power to urgent use, one would have expected it to be clearly provided for in the 1946 Act: [10] [11]. Instead, the 1946 Act is entirely silent on the question and indeed provides for a power to vary the existing order without placing any time limitations upon this power of variation: [12]. The history of how the Order in the present case came to be made so long after the UN resolution it was implementing confirms that it would be inappropriate to limit the exercise of the power conferred by the 1946 Act within a restricted timeframe by demonstrating that Security Council resolutions are not simply one off measures requiring immediate implementation by member states which then recede into history: [18].

This appeal concerns a tax avoidance scheme by which employers paid remuneration to their employees through an employees remuneration trust in the hope that the scheme would avoid liability to income tax and Class 1 national insurance contributions (NICs). The appeal raises a fundamental question about the nature of the income tax charge on employment income. That question is whether an employees remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself. HM Revenue and Customs Commissioners (HMRC) assessed the employing companies to income tax and NICs on the sums so paid as remuneration. The employing companies appealed those assessments to the First tier Tribunal (Tax Chamber) (the FTT), whose members were Kenneth Mure QC, Dr Heidi Poon and Scott Rae WS. The FTT, while recognising that the scheme was an aggressive tax avoidance scheme (para 193), held in a decision dated 29 October 2012 (by a majority, being Mr Mure and Mr Rae) that the scheme was effective in avoiding liability to income tax and NICs. This was because the FTT considered the steps in the scheme were not shams and that the employees had received only a loan of the moneys which the employing companies paid to the trusts. The Upper Tribunal (Tax and Chancery Chamber) (Lord Doherty), in a decision dated 8 July 2014, upheld the FTTs decision, because it detected no error of law in the majoritys reasoning. The Advocate General for Scotland on behalf of HMRC appealed to the Inner House of the Court of Session and advanced a legal argument which had not been presented to, or at least had not been developed before, the tribunals, namely that the payment of the sums to the remuneration trust involved a redirection of the employees earnings and accordingly did not exclude those earnings from the charge to income tax. The Inner House (the Lord Justice Clerk (Lord Carloway), Lord Menzies and Lord Drummond Young) upheld that argument and allowed the appeal on 4 November 2015: Advocate General for Scotland v Murray Group Holdings Ltd 2016 SC 201. Of the employing companies only RFC 2012 plc appeals to this court. I will refer to it, along with its previous incorporation which was the Rangers Football Club plc, as RFC. In this judgment I set out my reasons for concluding that this appeal should be dismissed. The tax legislation The employing companies, including RFC, operated the tax avoidance scheme in the tax years between 2001/02 and 2008/09. During that time the legislation for the taxation of emoluments from earnings was replaced by a new enactment. It is therefore necessary to describe the relevant provisions, which are essentially to the same effect, under each of the relevant Acts. In the tax years 2001/02 and 2002/03 the relevant legislation was contained in the Income and Corporation Taxes Act 1988 (as amended) (ICTA). Section 19 of that Act charged income tax under Schedule E on emoluments derived from any office or employment. So far as relevant section 19 provided: Schedule E Tax under this Schedule shall be charged in respect of any office or employment on emoluments therefrom which fall under one or more than one of the following Cases Case1: any emoluments for any year of assessment in which the person holding the office or employment is resident and ordinarily resident in the United Kingdom Emoluments were defined in very wide terms in section 131 of ICTA as including all salaries, fees, wages, perquisites and profits whatsoever. Since 1989, emoluments have been taxed on a receipts basis: section 202A of ICTA provided that income tax shall be charged under Schedule E on the full amount of the emoluments received in the year in respect of the office or employment concerned. Section 202B defined when emoluments were to be treated as received for the purposes of section 202A: so far as relevant it was the earlier of (a) the time when payment is made of or on account of the emoluments or (b) the time when a person becomes entitled to payment of or on account of the emoluments. This legislation was replaced by the Income Tax (Earnings and Pensions) Act 2003 (ITEPA), which governs RFCs liability to income tax on employment income during the relevant tax years from 2003/04 to 2008/09. Section 6 of that Act imposes a tax on employment income, which so far as relevant is on general earnings. Section 7 defines general earnings by reference to section 62 which, so far as relevant, provides: (2) [E]arnings, in relation to an employment, means any salary, wages or fee, (a) any gratuity or other profit or incidental benefit (b) of any kind obtained by the employee if it is money or moneys worth, or (c) the employment. anything else that constitutes an emolument of (3) For the purposes of subsection (2) moneys worth means something that is (a) of direct monetary value to the employee, or (b) capable of being converted into money or something of direct monetary value to the employee. Section 9 of ITEPA, which defines the amount of employment income charged to tax, provides in subsection (2) that, in the case of general earnings, the amount charged is the net taxable earnings from an employment in the year. Employers, who pay emoluments (or earnings after 2003) which are assessable to tax, are required to deduct income tax from their payments to their employees under the pay as you earn (PAYE) regime. Before 2003, section 203 of ICTA provided for the deduction to be made in accordance with regulations, which were the Income Tax (Employments) Regulations 1993 (SI 1993/744) (the 1993 Regulations). Regulation 6 provided that an employer, on making any payment of emoluments to an employee, should deduct tax and regulations 40 to 42 provided that the employer should pay to HMRC the amount of tax which it was liable to deduct. Section 203A of ICTA provided, so far as relevant, that for the purposes of section 203 and the 1993 Regulations payment was treated as made at the earlier of (a) the time when the payment is actually made and (b) the time when a person becomes entitled to the payment. For the tax year 2003/04 and following tax years, section 683 of ITEPA defined PAYE income as any PAYE employment income for the year and section 684 provided for the making of regulations, which became the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) (the PAYE Regulations). Regulation 21 of the PAYE Regulations requires the employer to deduct income tax on making a relevant payment to an employee. I discuss the meaning of employee in both of these regulations in para 40 below. Regulation 80 of the PAYE Regulations provides that, if it appears to HMRC that there may be tax payable by an employer which has not been paid, HMRC may determine the amount of that tax and serve notice of their determination on the employer. HMRC made its determinations in relation to the employing companies under this regulation. Thus, as Lord Drummond Young stated in delivering the impressive judgment of the court, the central concept in the tax regime governing employment income is the payment of emoluments or earnings derived from employment; and an employer who pays emoluments or earnings to or on account of an employee is obliged to deduct tax in accordance with the PAYE Regulations. Liability to pay Class 1 NICs on earnings in respect of employment was and is governed by section 6 of the Social Security Contributions and Benefits Act 1992 (the 1992 Act). Schedule 1 to the 1992 Act required the employer, who paid earnings to an employed earner, to pay both the employers and the earners Class 1 contributions to HMRC. The parties to the appeal have agreed that the determination of the appeal in relation to income tax will govern liability to NICs. I therefore do not need to consider the legislation relating to NICs any further. The interpretation of tax legislation The legislative code for the taxation of income has developed over time to reflect changing governmental policies in relation to taxation, to remove loopholes in the tax regime and to respond to the behaviour of taxpayers. Such responses include the enactment of provisions to nullify the effects of otherwise successful tax avoidance schemes (or schemes which were apparently successful pending a definitive judicial determination). As a result, the legislative code is not a seamless garment but is in certain respects a patchwork of provisions. Over time, judicial decisions on the interpretation of sections of the tax legislation have assisted in clarifying the boundaries of those provisions. Such decisions have influenced Parliament in the re enactment of legislation. Some judicial decisions, for example, as I discuss in paras 42 44 below, the requirement that a perquisite in section 131 of ICTA be convertible into money, have been definitional. But the courts at the highest level have repeatedly warned of the need to focus on the words of the statute and not on judicial glosses, which may clarify or illustrate in a particular case but do not replace the statutory words. Thus in Hochstrasser v Mayes [1960] AC 376, in which the House of Lords was considering whether an emolument could be said to arise from a taxpayers employment or office, Lord Radcliffe cited various judicial statements and stated (391): These are all glosses, and they are all of value as illustrating the idea which is expressed by the words of the statute. But it is perhaps worth observing that they do not displace those words. Similar advice can be found in the speech of Lord Reid in Laidler v Perry [1966] AC 16, 30, in which he stated: There is a wealth of authority on this matter and various glosses on or paraphrases of the words in the Act appear in judicial opinions, including speeches in this House. No doubt they were helpful in the circumstances of the cases in which they were used, but in the end we must always return to the words in the statute See also the judgment of Lord Russell of Killowen in the Court of Appeal in Brumby v Milner [1976] 1 WLR 29, 34 35 and the speech of Lord Simon of Glaisdale in the House of Lords in that case [1976] 1 WLR 1096, 1099 1100. Another, more recent, judicial development in the interpretation of taxing statutes is the definitive move from a generally literalist interpretation to a more purposive approach. This can be traced to the speech which Lord Nicholls of Birkenhead delivered in the House of Lords in Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684, in which he explained the true principle established in W T Ramsay Ltd v Inland Revenue Comrs [1982] AC 300 and the cases which followed it. As he explained (para 28), the modern approach to statutory construction is to have regard to the purpose of a particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose. In the past, the courts had interpreted taxing statutes in a literalist and formalistic way when applying the legislation to a composite scheme by treating every transaction which had an individual legal identity as having its own tax consequences. Lord Nicholls described this approach as blinkered (para 29). Instead, he removed the interpretation of taxing statutes from its literalist enclave and incorporated it into the modern approach to statutory interpretation which the court otherwise adopts. He stated (para 32): The essence of the new approach was to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall effect of a number of elements intended to operate together) answered to the statutory description. [T]he question is always whether the relevant provision of the statute, upon its true construction, applies to the facts as found. As Lord Nicholls of Birkenhead said in MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311, 320, para 8: The paramount question always is one of interpretation of the particular statutory provision and its application to the facts of the case. Lord Nicholls (para 34) recognised two features which were characteristic of tax law. First, tax is generally imposed by reference to economic activities or transactions which exist, as Lord Wilberforce said (in W T Ramsay, 326) in the real world. In the Court of Appeal in Barclays Mercantile [2003] STC 66, para 66, Carnwath LJ made the same point: taxing statutes generally draw their life blood from real world transactions with real world economic effects. Secondly, the prodigious intellectual effort in support of tax avoidance results in transactions being structured in a form which will have the same or nearly the same economic effect as a taxable transaction but which it is hoped will fall outside the terms of the taxing statute. He continued: It is characteristic of these composite transactions that they will include elements which have been inserted without any business or commercial purpose but are intended to have the effect of removing the transaction from the scope of the charge. The correct response of the courts was not to disregard elements of transactions which had no commercial value. That, he said, was going too far. Instead the court had, first, to decide, on a purposive construction, exactly what transaction would answer to the statutory description and secondly, to decide whether the transaction in question did so (para 36). Lord Reed in UBS AG v Revenue and Customs Comrs [2016] 1 WLR 1005, para 62, has helpfully summarised the significance of the new approach, which W T Ramsay, as explained in Barclays Mercantile, has brought about, in these terms: First, it extended to tax cases the purposive approach to statutory construction which was orthodox in other areas of the law. Secondly, and equally significantly, it established that the analysis of the facts depended on that purposive construction of the statute. In summary, three aspects of statutory interpretation are important in determining this appeal. First, the tax code is not a seamless garment. As a result provisions imposing specific tax charges do not necessarily militate against the existence of a more general charge to tax which may have priority over and supersede or qualify the specific charge. I return to this point towards the end of this judgment (paras 68 72 below). Secondly, it is necessary to pay close attention to the statutory wording and not be distracted by judicial glosses which have enabled the courts properly to apply the statutory words in other factual contexts. Thirdly, the courts must now adopt a purposive approach to the interpretation of the taxing provisions and identify and analyse the relevant facts accordingly. In this appeal, there is no suggestion that any part of the transaction, which comprised the tax avoidance scheme, was a sham. But that is not the point. The elements of the transaction, which I discuss below, were all genuine and had legal effect, as the majority of the FTT held. In answering the question whether the relevant statutory provisions were intended to apply to the transaction, the proper approach is, first, to interpret the relevant statutory provisions purposively and, secondly, to analyse the facts in the light of those statutory provisions so construed. I seek to do so in para 35 and following. But first I set out the facts. The facts As this is an appeal on a point of law and as the UT did not make separate findings of fact, I derive my summary of the facts from the judgment of the majority of the FTT. Some of those findings are terse and require explanation from the documents which were before the FTT and have been made available to this court. Dr Poon, who wrote the minority judgment, made additional findings of fact, which she derived principally from the documents before her. I do not have regard to her findings in so far as they are inconsistent with those of the majority. I refer to her findings on two occasions, first, where they explain findings by the majority which need clarification (para 29 below) and, secondly, as a check on a conclusion which I have reached based on the majoritys findings (para 27 below). I state below when I am drawing on her findings for these purposes. The employing companies were at all relevant times members of a group of companies whose ultimate parent company is Murray International Holdings Ltd. Since the period with which this appeal is concerned, RFC has been sold out of the Murray group. Other than RFC, the employing companies were Murray Group Holdings Ltd, which is a subsidiary holding company, Murray Group Management Ltd (MGML), which provided management services to the group, the Premier Property Group Ltd, and GM Mining Ltd. MGML by deed dated 20 April 2001 set up a trust known as the Remuneration Trust, which I will refer to as the Principal Trust. A company within the Murray group of companies which wished to benefit one of its employees made a cash payment to the Principal Trust in respect of that employee. When it did so, the employing company recommended the trustee of the Principal Trust to resettle the sum which it paid on to a sub trust and asked that the income and capital of the sub trust should be applied in accordance with the wishes of the employee. The trustee of the Principal Trust had a discretion whether to comply with those requests, but, when an employing company provided the funds, the trustee without exception created a sub trust for the favoured employee. 108 sub trusts were established in the name of individual employees, of which 81 were for RFC employees (footballers and executives) and 27 for other Murray group employees. The group companies also used the combination of the Principal Trust and a sub trust to pay discretionary annual bonuses to employees, other than the footballers whom RFC employed. Since 2005 only RFC used the Principal Trust to remunerate its employees. In this appeal we are concerned only with the sums which RFC paid to the Principal Trust and which were re settled on to a sub trust in accordance with the wishes of each of its employees who took part in the scheme. I discuss employees other than footballers in para 31 below, but first address the operation of the scheme by reference to the footballers. It is instructive to understand (a) how the trust mechanism was established when a footballer was recruited and how the mechanism was explained to the player, (b) the powers over the sub trust which were conferred on the footballer, and (c) how the trustee of the various sub trusts exercised its discretion in operating the arrangement which RFC (and the other Murray group companies) had initiated. The establishment of the trust mechanism: When RFC negotiated the engagement of a footballer with the prospective player or his agent, the discussions focused on the figure net of tax which the footballer would receive. A senior RFC executive would explain the mechanism of creating a sub trust in the name of the employee and the benefits which the trust mechanism would give. In particular, the prospective employee would be told that he could obtain a loan of the sum paid to the sub trust from its trustee which would be greater than a payment net of tax deducted under PAYE if he were to be paid through RFCs payroll. The loan was to be repayable on an extended term of ten years on a discounted basis, that is to say that the player would not pay annual interest on the loan but that the interest would be accrued and applied so that a grossed up sum would be repayable. Both RFC and the footballer expected that the loans would not be repaid at term but would be renewed, as RFCs executive explained to the footballer or his agent that the arrangement had the additional tax advantage that the loans would be repayable out of the footballers estate on death, thereby reducing its value for Inheritance Tax purposes. It was also explained that the player would be appointed as protector of the sub trust, with powers to change both the trustee and also the beneficiaries of the sub trust, as I discuss below. On recruitment of a footballer, the terms of his engagement were recorded in two separate contractual documents. The first was a contract of employment which set out the terms of employment and the footballers remuneration which would be paid subject to deduction of PAYE and NICs. The second was a side letter in which a senior executive of RFC undertook that RFC would (a) recommend to the trustee of the Principal Trust (i) to include the footballer as protector of a sub trust and (ii) to fund the sub trust with the sum or sums which had been agreed in the recruitment negotiation, and (b) fund the Principal Trust to enable the trustee to carry out those recommendations. It is clear from documents, which were before the FTT and were made available to this court as examples of the arrangements, that the sums paid to the Principal Trust and to the sub trusts represented remuneration for employment. In one case, RFC undertook in the side letter to an employee dated 17 June 2004 to pay him free of UK or other taxes the sum which it had undertaken to pay into the Principal Trust for funding the sub trust, if the trustee of the Principal Trust did not make him the protector of the sub trust or fund the sub trust. In another case, we were referred to documents in which a footballers remuneration had been agreed between RFC and his agent in July 2001. The footballers agent recorded his clients remuneration in these terms: Annual Salary 8,000 per week. Contribution to Remuneration trust 8,000 per week namely 416,000 per annum which equates to the sum of 250,000 per annum net. The player will accordingly receive 125,000 in October and February during each year of the Contract. Rangers will grant the appropriate indemnity that they will be responsible for payment of any tax should the revenue seek to recover any tax from the player on these amounts. Thereafter RFC and the footballer entered into a contract of employment which provided for the payment of an annual salary of 416,000 and RFCs finance director sent the footballer a side letter dated 13 July 2001 in which he confirmed that RFC would recommend to the trustee of the Principal Trust to include him as the protector of a sub trust and to fund the sub trust with 125,000 on each occasion in October and February during the period which matched the term of the contract of employment. The majority of the FTT recorded (para 207) that RFC offered the prospective employees this form of deal, combining a payroll payment and the transfer of funds through the trust mechanism on a take it or leave it basis. The Scottish Football Association (SFA) required football clubs to register players contracts with it. RFC registered the contracts of employment but did not disclose the side letters to the SFA. RFC initiated the creation of a sub trust by having the employee complete a letter of wishes, in which the employee, as protector of the sub trust, wrote to the trustee to express his wishes as to the exercise of the trustees discretionary powers. The court was shown examples of such letters, which were in a standardised form, in which the employee asked that the income and capital be held and applied according to his wishes, and that on his death, the trust fund be held for the benefit of a specified member or members of his family. In all but one case, RFC had the employee complete a loan application on his own behalf. The letter of wishes and the loan application were then submitted to the trustee. Messrs Baxendale Walker, the solicitors who devised and operated the scheme for the Murray group, then submitted a standard form of trust deed for the trustee company, in its capacity as trustee of the Principal Trust, to sign in order to create the sub trust. RFC paid its agreed contribution to the Principal Trust; and, on receipt of the funds, the trustee company invariably exercised its discretion to create a sub trust in the name of the employee. The trustee company, in its other capacity as trustee of the sub trusts, almost invariably exercised its discretion to grant a loan of the full amount in the sub trust in response to an employees request. The employees powers over the sub trust: The employee enjoyed extensive powers under the sub trust as its protector. In an example of a sub trust which was shown to the court, clause 7 gave the protector a power, which was stated to be a fiduciary power, to appoint and remove any trustee. Clause 9 gave the protector the power, which again was stated to be a fiduciary power, to alter the provisions of the sub trust. Significantly, that power included the power to change the beneficiaries of the sub trust. The power of alteration was subject to exclusions and required the written consent of the trustee if it was exercised in a manner which would adversely affect the trustee. The employee as protector was also empowered to appoint a protector in his place (clause 1.1.7). The FTT summarised the position (in para 103(v) of the majority decision) in these terms: the employee could also be appointed protector with extended powers in respects resembling trusteeship, but without title to the trust assets, and not enabling the conferring of any absolute beneficial right on the employee himself. This statement by the majority of the FTT is accurate in so far as it states what the employee could do while he was protector. But the employee had, as I have said, a power to appoint someone else as protector in his place and that person as protector had power to alter the beneficiaries of the sub trust. The majority of the FTT recorded (paras 23 and 227) that foreign players who left RFC and moved to reside overseas were able to unscramble the legal framework and receive an absolute right to the moneys which had been put in the sub trust. The majority of the FTT stated that this could be done only with the consents of those interested in the capital of the sub trust concerned. I am not persuaded that that is correct. In some cases, such as the one to which the majority expressly referred, the players wife cooperated with RFC, the trustee and the player to assign the receivables of the sub trust to the player and thus extinguish the loan. But the power of a replacement protector to alter the beneficiaries may have enabled the player to be nominated as the beneficiary and for him in cooperation with the trustee to extinguish the loan and bring the sub trust to an end. Dr Poons more detailed findings on the termination of sub trusts in paras 145 151 of her dissenting decision suggest that this device also was used. The exercise of discretion by the trustee: The initial trustee of the Principal Trust was Insinger Trust Company Ltd, which was resident in Jersey and which later changed its name to Equity Trust (Jersey) Ltd (Equity). Equity was also the trustee of the sub trusts. Both the Principal Trust and the sub trusts are governed by English law. In 2006 MGML replaced Equity with Trident Trust Company Ltd (Trident), another company resident in Jersey, as trustee of the Principal Trust, and transferred the trusteeship of certain sub trusts to it. As I have said, in every case in which an employing company paid money to the Principal Trust, the trustee, whether Equity or Trident, exercised its discretion to create a sub trust. When the employee applied for a loan of the sum paid into the sub trust, the trustee gave the employee a loan of that sum. In no case did the trustee take a security from the employee borrower to protect the repayment of the fund of the sub trust. The majority of the FTT recorded (paras 91, 103(x) and 225) that Equity was replaced as trustee by Trident after Equity had responded to some loan applications by requesting the provision of security and delayed the payment of the loans. It is clear from Dr Poons more detailed findings of fact (paras 50, 60, 166(xiii) and 201) that Equitys request for security was prompted by an investigation by its regulator, the Jersey Financial Services Commission, as to whether the loans were on commercial terms. Tridents managers proved to be more compliant with MGMLs wishes and the majority of the FTT (para 225) described the trustees attitude as lax. The majority recorded (para 225) that the trustee had the benefit of a broad indemnity from MGML; but the majority in its judgment treated the structure of the trust mechanism as important rather than the lax attitude of a particular trustee. RFC used the same trust mechanisms in making termination payments to players and in the payment of guaranteed bonuses. The majority of the FTT discussed these and also certain exceptional cases in paras 206 to 211 of its decision. The other companies in the Murray group, which were respondents before the Court of Session, used the same trust mechanisms and loans when paying discretionary annual bonuses to senior executives. The majority recorded (paras 103(xi) and 205) that these bonuses differed from the footballers bonuses, which were agreed on their engagement, as the senior executives had no contractual right to the bonuses before they were awarded. But the bonuses were paid as a reward for the work which the employees had carried out in their capacity as employees. RFC also used the same mechanisms in paying discretionary bonuses to its senior executives. One director, whose evidence the majority of the FTT accepted, described his understanding that the loan of the funds from the sub trust could be extended after ten years and would ultimately reduce the value of his estate for Inheritance Tax. He had received an indemnity from RFC against any personal tax liability from the arrangement (para 71). The basis of this appeal The majority of the FTT found that the trusts and the loans were valid and were not shams. It refused to hold that the trustee was a cipher and concluded that the trustee genuinely exercised discretion in its appointments upon the sub trusts and the making of the loans. HMRC does not challenge those findings in its defence of this appeal. HMRC succeeded in its appeal before the Inner House on the basis that income, which is derived from an employees work qua employee, is an emolument or earnings, and that it is assessable to income tax, even if the employee requests or agrees that it be redirected to a third party. The Inner House held that the scheme, which involved payments into the Principal Trust and the application of the funds through the sub trusts, amounted to a redirection of the employees earnings and did not remove the employers liability to pay income tax under the PAYE system. It held that the redirection occurred when the employing company paid the sums to the Principal Trust; the fact that the employee took the risk that the trustee would not apply the funds as he requested was irrelevant. The payments by the employing company into the Principal Trust were derived from the employees work as an employee and so were emoluments or earnings. RFC challenges this conclusion. Andrew Thornhill QC submits on its behalf that the Inner House erred in applying what it called the redirection principle in the circumstances of this case. In essence, he asserts that it is not sufficient that the payment of money arises from the performance of the duties of an employment. The payment of money so arising to a third party does not amount to the payment of earnings or emoluments unless the employee already has a legal right to receive the payment and it is paid at his direction to a third party. He submits that the employing companies did not incur liability to pay income tax or NICs because the employees of the Murray group companies never had a right to receive the sums which were paid into the trust mechanism. An employee received only a loan from the trustee of the relevant sub trust and that loan did not fall within the PAYE system. Interpreting the legislation Discussion (i) Income tax on emoluments or earnings is, principally but not exclusively, a tax on the payment of money by an employer to an employee as a reward for his or her work as an employee. As we have seen from the use of the word therefrom in section 19 of ICTA (para 5 above), income tax under Schedule E was charged on emoluments from employment. In other words, it was a tax on the remuneration which an employer pays to its employee in return for his or her services as an employee. This concept also underpins the concept of earnings in ITEPA (para 6 above) which in section 9(2) refers to taxable earnings from an employment and in section 62 defines earnings in relation to an employment. Included in that definition in section 62(2)(c) is the catch all phrase: anything else that constitutes an emolument of the employment. That which was an emolument under prior legislation remains an emolument under ITEPA. What is taxable is the remuneration or reward for services: Brumby v Milner [1976] 1 WLR 29, 35 per Lord Russell of Killowen in the Court of Appeal; [1976] 1 WLR 1096, 1098 1099 per Lord Wilberforce in the House of Lords. That is not in dispute. The central issue in this appeal is whether it is necessary that the employee himself or herself should receive, or at least be entitled to receive, the remuneration for his or her work in order for that reward to amount to taxable emoluments. A careful examination of the provisions of the primary legislation reveals no such requirement. First, section 13 of ITEPA defines the taxable person who is liable for any tax on employment income. Subsection (2) of that section provides: If the tax is on general earnings, the taxable person is the person to whose employment the earnings relate. The employee, whose work gives rise to the remuneration, is taxed, not the recipient of the earnings. This is consistent with the prior history of the tax charge under Schedule E which, as RFC acknowledged in its written case, made the employee the taxable person even if the emoluments were received by a third party. Secondly, the provisions of ICTA and ITEPA, to which I have referred in paras 5 and 6 above, with one exception, do not restrict the concept of emoluments by requiring their payment to a specific recipient. Section 131 of ICTA and section 62(2) of ITEPA define taxable emoluments, but, other than section 62(2)(b) which I discuss in para 45 below, do not specify the recipient. Section 202A of ICTA, which established the receipts basis of the tax charge, spoke of the emoluments received in the year without specifying the recipient and section 202B spoke of the time when a person becomes entitled to payment of or on account of the emoluments (emphasis added). Section 18 of ITEPA, which sets out rules as to when money earnings are received is similarly unspecific as to the identity of the recipient. It provides: (1) General earnings consisting of money are to be treated for the purposes of this Chapter as received at the earliest of the following times Rule 1 The time when payment is made of or on account of the earnings. Rule 2 The time when a person becomes entitled to payment of or on account of the earnings. (Emphasis added) Section 686 of ITEPA contains the same rules for the purposes of the PAYE Regulations. Section 203A of ICTA used a similar formulation in the context of the PAYE regime. Section 203 of ICTA, like the other provisions which I have mentioned, was silent as to the identity of the recipient. I see nothing in the wider purpose of the legislation, which taxes remuneration from employment, which excludes from the tax charge or the PAYE regime remuneration which the employee is entitled to have paid to a third party. Thus, if an employee enters into a contract or contracts with an employer which provide that he will receive a salary of X and that as part of his remuneration the employer will also pay Y to the employees spouse or aunt Agatha, I can ascertain no statutory purpose for taxing the former but not the latter. The breadth of the wording of the tax charge and the absence of any restrictive wording in the primary legislation, do not give any support for inferring an intention to exclude from the tax charge such a payment to a third party which the employer and employee have agreed as part of the employees entitlement. Both sums involve the payment of remuneration for the employees work as an employee. The relevant subordinate legislation points in the same direction. Regulation 21 of the PAYE Regulations speaks of making a relevant payment to an employee and regulation 6 of the 1993 Regulations used similar language (para 7 above). But those provisions in subordinate legislation do not mean that only the employee may receive it. Employee was defined in the 1993 Regulations (regulation 2) as meaning any person in receipt of emoluments. The PAYE Regulations defines employee more narrowly by reference to sections 4 and 5 of ITEPA but it allows for receipt by an other payee which it defines (regulation 2) as a person receiving relevant payments in a capacity other than employee and regulation 12 provides that for the purposes of the PAYE Regulations other payees are treated as employees. I therefore read payment to an employee or essentially similar phrases in the subordinate legislation as a reference to the payment of the employees emoluments whether to the employee or to another person. As a general rule, therefore, the charge to tax on employment income extends to money that the employee is entitled to have paid as his or her remuneration whether it is paid to the employee or a third party. The legislation does not require that the employee receive the money; a third party, including a trustee, may receive it. While that is a general rule, not every payment by an employer to a third party falls within the tax charge. It is necessary to consider other circumstances revealed in case law and in statutory provisions which fall outside the general rule. Those circumstances include: (i) the taxation of perquisites, at least since the enactment of ITEPA, (ii) where the employer uses the money to give a benefit in kind which is not earnings or emoluments, and (iii) an arrangement by which the employers payment does not give the intended recipient an immediate vested beneficial interest but only a contingent interest. As I shall seek to show, in the first circumstance, current legislation requires receipt by the employee; in the second circumstance, there are special rules for the taxation of such benefits; and, in the third circumstance, where on a proper analysis of the facts there is only a contingent right, the taxable earnings or emoluments are not paid by the employer as remuneration until the occurrence of the contingency. The first such circumstance is the taxation of perquisites and profits or, in the updated wording of ITEPA, any gratuity or other profit or incidental benefit. Section 131 of ICTA spoke of perquisites and profits. While in colloquial usage a perk may take many forms, judicial interpretation of tax legislation has long required that the perquisite be capable of being converted into money in order to fall within the tax net under this provision. Three cases in the House of Lords demonstrate this. First, in Tennant v Smith [1892] AC 150, the House of Lords held that a bank manager was not liable to income tax on the use of accommodation in bank premises in Montrose, which he was required to occupy as part of the duties of his employment, because he could not convert any benefit which he obtained from such occupation into money. The arrangement saved the bank manager from incurring expenditure on accommodation; but that was not enough to make the benefit taxable as an emolument. In Abbott v Philbin [1961] AC 352 a majority of the House of Lords held that an employee of a company was liable to income tax on the grant by his employer of an option to purchase shares in that company in the tax year in which the option was granted because the option itself had a monetary value which the employee could realise. Lord Radcliffe described the principle in Tennant v Smith thus (378): if [the benefits] are by their nature incapable of being turned into money by the recipient they are not taxable, even though they are in any ordinary sense of the word of value to him. In Heaton v Bell [1970] AC 728 the House of Lords held by majority that the benefit of the use of a car which an employer provided to its employees under a car loan scheme was taxable either as part of an employees wages, because the contract provided for a deduction from the employees wages to cover the cost of providing the car or, more relevantly, because the car was a perquisite which the employee could turn into money by surrendering it to his employer. These judicial decisions gained statutory expression in section 62 of ITEPA which in subsection (2)(b) provides that earnings include any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or moneys worth and defines moneys worth in subsection (3) which looks to the monetary value of the thing to the employee (para 6 above). Thus, in contrast with the more open definitions of earnings in section 62(2)(a) and (c) (salary, wages or fee and anything else that constitutes an emolument of the employment), Parliament has required that the benefit be obtained by the employee and that it is or is capable of being converted into money or something of direct monetary value to the employee. The Notes on Technical Points, which were annexed to the Bill which became ITEPA, described subsection 2(b) as a significant departure in contrast with the continuity between the statutory concepts of emoluments and earnings (Annex 2, note 13). Section 62(2)(b) and (3) were intended to be the modern equivalent of the prior statutory reference to perquisites and profits whatsoever. It is not clear in principle why such benefits should be restricted to those which are received by and of value to the employee when the other forms of employment earnings are not. The provision may reflect judicial dicta such as in Pook v Owen [1970] AC 244, in which Lord Pearce (259) spoke of perquisites as meaning something that benefits a man by going into his own pocket. That case concerned the question of whether the reimbursement of travel expenses, from which the employee made no profit, was a perquisite, which Lord Guest (255) described as a casual emolument additional to regular salary or wages. The House of Lords held that the reimbursement was not such a perquisite. The question of payment to a third party did not arise. It may be that casual emoluments, such as gratuities, are almost always paid to the employee. But I see no proper basis for reading the other forms of earnings in section 62(2)(a) and (c) in a similarly restrictive way. A second circumstance, which falls outside the general rule, is where the employer spends money to confer a benefit in kind which the recipient cannot convert into money. Such expenditure is not a perquisite or profit, gratuity or incidental benefit for the reasons discussed above and only falls within the income tax regime because of special statutory provision, such as, currently, the benefits code in Part 3 chapters 2 11 of ITEPA, which cover among others the provision of living accommodation, cars or loans and the payment of expenses. Part 7 of ITEPA also has special rules for shares etc acquired in connection with an employment, and Part 6 of that Act is concerned with income which is not earnings or share related. A third circumstance is where the person entitled to receive the sums paid by the employer does not acquire a vested right in those sums until the occurrence of a contingency. This circumstance is illustrated by the case of Edwards v Roberts (1935) 19 TC 618, in which an employing company entered into an employment contract to give an employee, in addition to his salary, an interest in a conditional fund, into which it would make annual payments from its profits, as an incentive for him to advance the companys interests. The employee was entitled to receive the annual income from the fund but had no right to receive any of the capital of the fund other than that which had been held in the fund for five years or more. The contract provided that he would receive the whole fund if he died while still employed by the company or on termination of his employment by the company in specified circumstances. But the contract also provided that the employee would cease to have any right in the conditional fund in circumstances which included his dismissal for misconduct. The trustees of the fund handed over to the employee the investments in the fund when he later resigned with the consent of the company. The employee argued that the sums which the company had paid into the conditional fund formed part of his emoluments in each of the years in which they were paid into the fund. But the Court of Appeal (Lord Hanworth MR, Romer and Maugham LJJ) held that those sums did not constitute his emoluments in those years because he had only a conditional interest in them; instead the value of the investments transferred to him after his resignation were his emoluments in the tax year in which they were transferred to him. The payments in that year reflected his status as an employee at the time when the contingency was fulfilled. In that case the court distinguished the case of Smyth v Stretton (1904) 5 TC 36, in which Channell J had construed an employers scheme, which provided for payments into a provident fund for payment to employees on their retirement, as providing for an agreed application of part of the employees salary and held that the payments into the fund were therefore taxable as emoluments for services provided in the year of payment into the fund. The recent judgment of this court in Forde and McHugh Ltd v Revenue and Customs Comrs [2014] 1 WLR 810, which turned on the wording of provisions in the Social Security Contributions and Benefits Act 1992, is consistent with the approach in Edwards v Roberts in holding that sums paid by an employer, other than out of an employees salary, which were to provide contingent benefits to an employee, did not fall within the charge to NICs on earnings before the occurrence of the contingency and the payment of the benefits. Otherwise, on HMRCs approach to the legislation in question, liability to pay NICs on earnings would have arisen both on payment of sums into the trust and on the later payments of the benefits (if any) from it. Mr Thornhill founds on the case, and in particular on its emphasis in para 17 of the judgment on what the employee received, to support his submission that the payment of remuneration cannot be the payment of emoluments unless the employee is entitled to receive it. But Forde and McHugh Ltd was not concerned with the payment of an employees remuneration to a third party or the provision of that money to the employee without the interposition of any contingency. What the court said in para 17 of that case should be read in its context, which involved (a) the conferring of only a contingent benefit on the employee and (b) (if HMRC had been correct in their submission) the imposition of a double charge, levied both on the settlement of funds on to the pension trust and on receipt of the deferred remuneration from it. The case did not create or support the principle for which Mr Thornhill contends. In summary, the statutory provision for the taxation of what were in the past called perquisites and profits, namely section 62(2)(b) of ITEPA, has confined the tax charge to benefits received by the employee. But there is no such restriction in section 62(2)(a) or (c). In none of the cases, which I have mentioned in paras 42 44, 47 and 48 and on which RFC relies, was the court concerned with the identity of the recipient of the benefit. The focus in each was on the source or the nature of the right which the employee received. Accordingly, the cases do not assist in determining the issue on this appeal. By contrast, the advice of the Privy Council in Hadlee v Comr of Inland Revenue [1993] AC 524 is in point. The appeal concerned income tax legislation in New Zealand. Section 38(2) of the Income Tax Act 1976 provided that income tax was payable by every person on income derived by him during the year for which tax was payable. A partner in an accountancy firm assigned a proportion of his share in the partnership to a trust under which the primary beneficiaries were his wife and child. He sought to argue that he was not liable to income tax on that proportion of his annual partnership income. The New Zealand courts rejected that contention and the Privy Council upheld their decision, holding that income tax was a tax on income which was the product of the taxpayers personal exertion and that the taxpayer could not escape liability to pay that tax by assigning a part of his share in the partnership. While the relevant provision of the New Zealand statute was worded differently from the United Kingdom legislation, the latter, by its emphasis on emoluments arising from a taxpayers employment, adopts a similar concept of the tax charge. It supports the view which I have reached that a charge to income tax on employment income can arise when an arrangement gives a third party part or all of the employees remuneration. As well as ascertaining whether remuneration amounts to emoluments or earnings, it is necessary under the provisions relating to PAYE to determine whether there has been a payment from which deductions were required. In para 11 above, I referred to cases of high judicial authority which warned against misplaced reliance on judicial glosses. Such misplaced reliance has been evident in the case law which led up to this appeal in relation to the concept of payment. In Garforth v Newsmith Stainless Ltd [1979] 1 WLR 409 Walton J addressed the meaning of payment in the context of the statutory provisions and regulations which then set out the PAYE system. In the tax year 1974/75 a taxpayer company voted to award bonuses to its two directors and controlling shareholders and credited the sums to accounts with the company from which the directors were free to draw. The directors did not draw on those sums. The Inland Revenue assessed the company to tax, arguing that the company should have deducted tax under the PAYE system on the full sums credited to those accounts. Walton J, upholding the revenues assessment, said (412G) that the word payment had no one settled meaning but took its colour from its context. He held that there was no need for the directors to withdraw the money from their loan accounts for there to have been payment by the company, stating (414A B) when money is placed unreservedly at the disposal of directors by a company, that is equivalent to payment. He held (415C E) that different considerations would have arisen if the company had required a further decision by the board of directors or by the shareholders in general meeting before the money could have been withdrawn. In my view, the interpretation or gloss which Walton J placed on payment (money placed unreservedly at the disposal ) was a practical and sensible one in the context of the circumstances which he was addressing, which later became the subject of statutory provision in section 202B of ICTA. That interpretation or gloss was also adopted by the Inner House in Aberdeen Asset Management plc v Revenue and Customs Comrs 2014 SC 271 in analysing the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. By the time the case reached the Inner House, the employing company had accepted that the sums which it had paid though the employee benefits trust to an Isle of Man company were taxable as emoluments and that the scheme was ineffective to reduce the value of those emoluments. The question was whether the employing company was liable to pay the tax under the PAYE system or the benefited employees individually should pay. The issue, to which the gloss was unexceptionably applied, was whether the money in an Isle of Man company, whose shares the employee had acquired through the scheme, was to be treated as being received by the employee so that there was payment within the meaning of section 203 of ICTA and the 1993 Regulations. Lord Drummond Young, having cited Walton Js judgment in Garforth, stated (para 34): In considering what amounts to payment for the purposes of the PAYE legislation, it is important in my opinion to bear in mind that money is a medium of exchange. In practical terms, therefore, the crucial question is whether funds have been placed in a position where as a practical matter they may be spent by the employee as he wishes; it is at that point that the employee can be said to obtain the benefit of those funds. If the PAYE legislation is construed purposively it is in my view obvious that it is such a benefit that is to be taxed. For this purpose it is not appropriate to deconstruct the precise legal nature of the employees rights, drawing fine distinctions according to the methods that he must adopt in order to use the funds for his benefit. The fact that the employee has practical control over the disposal of the funds is sufficient to constitute a payment for the purposes of the legislation. See also the Lord President (Lord Gill) (para 7) and Lord Glennie (paras 65 66). The Inner House did not have to address the argument which HMRC has advanced in this appeal that a payment of an employees emoluments to a third party, including a trustee, could be covered by the PAYE system. The gloss is no basis for establishing a general rule or principle that a payment is made for the purposes of PAYE only if the money is paid to or at least placed unreservedly at the disposal of the employee. Yet it has been so used. In Sempra Metals Ltd v Revenue and Customs Comrs [2008] STC (SCD) 1062 one of the issues which the Special Commissioners had to address was whether payments by the taxpayer company of senior employees bonuses into an employee benefit trust involved the payment of earnings for the purposes of PAYE. In 1995 the company established the trust by deed of settlement in order to provide tax efficient benefits to its employees. The employees could choose to take their annual bonuses in cash or have them paid to the trust. Each employee had the choice of taking the amount allocated to him as a loan or leaving it invested in the trust. No application for a loan was ever refused by the trustee. After changes were made by the Finance Act 2003 which prevented the deduction from profits for the purpose of corporation tax of sums paid into such trusts unless they gave rise to an income tax charge on employment income and a liability to pay NICs, the company replaced the employee benefit trust with a family benefit trust. The beneficiaries of the family benefit trust were members of the employees family as nominated by the employee and the trust operated in a very similar way to the earlier trust. Counsel for the taxpayer company submitted that the employees had received loans and not earnings or emoluments and the trustee had exercised the discretion subject to which it held the funds. Counsel for HMRC argued that the payments to the trusts became emoluments and earnings when they vested unconditionally in the employees and that occurred when the trustee allocated amounts to the individual employees or their nominated beneficiaries. He referred to Garforth for the principle that money placed unreservedly at the disposal of an employee amounted to payment. That was one of the principles which the special commissioners adopted in their reasoning, holding (para 142) that the existence of the trusts, the continuing discretion of the trustee and the existence of the loans, in those cases in which loans were made, meant that the employees were not free to do whatever they liked with the funds allocated to them. They concluded (para 144): When the appellant made payments to the trusts, no transfer of cash or its equivalent was placed unreservedly at the disposal of the employees. That means that there was no payment by the appellant of emoluments or earnings giving rise to an obligation to deduct income tax and pay it to the Revenue. The special commissioners (para 147) reached the same conclusion in relation to NICs. In my view, for the reasons discussed above, Sempra Metals was wrongly decided. HMRC had earlier taken the same approach in its arguments before the special commissioners in Dextra Accessories Ltd v Macdonald (Inspector of Taxes) [2002] STC (SCD) 413, which concerned an employee benefit trust into which a company transferred the bulk of the remuneration of its three director shareholders. In that case the special commissioners rejected the assertion that funds which an employer contributed to an employee benefit trust and which its trustee allocated to trust sub funds were at the absolute disposal of the employees. They held that the trustee would have to exercise its discretion and appoint the funds absolutely to the employees as beneficiaries of the sub trust before those funds could be at the employees absolute disposal. From that conclusion the special commissioners inferred that the sums were not subject to income tax, holding (para 17): The reason why the employees are not taxed on funds in the EBT is simply that they do not belong to the employees. For the reasons set out above I do not agree with this conclusion. But their decision on this issue was not appealed and the special commissioners decision on the deductibility of the companys expenditure for the purpose of corporation tax was reversed by the House of Lords: (2003) 77 TC 146. It is therefore sufficient to note that the special commissioners were not presented with the arguments which HMRC advanced in this appeal before the Inner House and this court. In summary, (i) income tax on emoluments or earnings is due on money paid as a reward or remuneration for the exertions of the employee; (ii) focusing on the statutory wording, neither section 131 of ICTA nor section 62(2)(a) or (c) of ITEPA, nor the other provisions of ITEPA which I have quoted (except section 62(2)(b)), provide that the employee himself or herself must receive the remuneration; (iii) in this context the references to making a relevant payment to an employee or other payee in the PAYE Regulations fall to be construed as payment either to the employee or to the person to whom the payment is made with the agreement or acquiescence of the employee or as arranged by the employee, for example by assignation or assignment; (iv) the specific statutory rule governing gratuities, profits and incidental benefits in section 62(2)(b) of ITEPA applies only to such benefits; (v) the cases, to which I have referred above, other than Hadlee, do not address the question of the taxability of remuneration paid to a third party; (vi) Hadlee supports the view which I have reached; and (vii) the special commissioners in Sempra Metals (and in Dextra) were presented with arguments that misapplied the gloss in Garforth and erred in adopting the gloss as a principle so as to exclude the payment of emoluments to a third party. Parliament in enacting legislation for the taxation of emoluments or earnings from employment has sought to tax remuneration paid in money or moneys worth. No persuasive rationale has been advanced for excluding from the scope of this tax charge remuneration in the form of money which the employee agrees should be paid to a third party, or where he arranges or acquiesces in a transaction to that effect. Having adopted this purposive construction of the legislation, I turn to apply it to the facts of this appeal. (ii) Applying the legislation to the facts Having set out the law in some detail above, I can be brief in applying it to the facts as found by the majority of the FTT. The payment of money into the Principal Trust was a component of the remuneration of the footballers and other employees. I address first the footballers. The arrangement which led to the two contracts, being the contract of employment and the side letter relating to the trust arrangement, were negotiated between senior managers of RFC on the one hand and the footballers or their agents on the other. The focus of the discussions was on the net remuneration which would be made available to the footballer. Every time a footballer wanted to use the money provided to his sub trust, he was given a loan by the sub trust. Thus, as envisaged by the negotiation, the footballer was able to gain access to the cash when he wanted it. The expectation of both employer and employee was that the employee would not have to repay the loan while he lived and thus he would be able to gain an inheritance tax benefit through the diminution of his estate by the combination of the outstanding loan and its accrued interest. See paras 21 24 above. The assets of the sub trust, which were almost always the loan and the accruing interest, were held in trust for the benefit of members of the footballers family whom he had selected. Thus the funds available on repayment of the loan would go to his family. The footballer as protector of the sub trust could determine who the trustees of the sub trust were and also who were its beneficiaries. See paras 25 27 above. It was necessary for the operation of the scheme as the parties intended that the trust administration was lax, not least in the provision of the entire fund of a sub trust to the employee in the form of a loan without taking measures to secure its repayment. When the Jersey regulator caused Equity to tighten up the terms on which a sub trust provided loans, Equity was replaced by the more compliant Trident. See paras 28 and 29 above. The relevant provisions for the taxation of emoluments or earnings were and are drafted in deliberately wide terms to bring within the tax charge money paid as a reward for an employees work. The scheme was designed to give each footballer access without delay to the money paid into the Principal Trust, if he so wished, and to provide that the money, if then extant, would ultimately pass to the member or members of his family whom he nominated. Having regard to the purpose of the relevant provisions, I consider the sums paid to the trustee of the Principal Trust for a footballer constituted the footballers emoluments or earnings. There was a chance that the trust company as trustee of the Principal Trust might not agree to set up a sub trust and there was a chance that as trustee of a sub trust it might not give a loan of the funds of the sub trust to the footballer. But that chance does not alter the nature of the payments to the trustee of the Principal Trust. In applying a purposive interpretation of a taxing provision in the context of a tax avoidance scheme it is legitimate to look to the composite effect of the scheme as it was intended to operate. In Inland Revenue Comrs v Scottish Provident Institution [2004] 1 WLR 3172 Lord Nicholls stated (para 23): The composite effect of such a scheme should be considered as it was intended to operate and without regard to the possibility that, contrary to the intention and expectations of the parties, it might not work as planned. The footballers, when accepting the offer of higher net remuneration through the trust scheme which the side letters envisaged, were prepared to take the risk that the scheme might not operate as planned. The fact that the risk existed does not alter the nature of the payment to the trustee of the Principal Trust. The bonuses which RFC and the other employing companies gave their executives were made available through the same trust mechanisms. See para 31 above. The employees had no contractual entitlement to the bonuses before their employers decided to give them but that does not alter the analysis of the effect of the scheme. The fact that bonuses were voluntary on the part of the employer is irrelevant so long as the sum of money is given in respect of the employees work as an employee: Blakiston v Cooper [1909] AC 104, 107 per Lord Loreburn LC, Hartland v Diggines [1926] AC 289, 291 per Viscount Cave LC. For the same reasons as those which cause the footballers remuneration paid to the Principal Trust to be subject to taxation, the bonuses which were paid to the employees though the trust mechanism fall within the tax charge as emoluments or earnings when paid to the Principal Trust. In agreement with Lord Drummond Young, I consider that the PAYE system can operate without difficulty. The trustee of the Principal Trust is the person in receipt of the emoluments or earnings and payment to it should have been subject to deduction of income tax under the 1993 Regulations and now under the PAYE Regulations. See paras 38 and 39 above. The constraints of the statutory tax code? For completeness, I should explain why I am not persuaded by the assertion that other provisions in tax legislation militate against the view to which I have come. The majority of the FTT thought that a purposive approach to the interpretation of emoluments or earnings was curtailed by the existence of a highly prescriptive statutory code and by the legal effect of the trust arrangements and loans (paras 191 and 193). The creation of a trust structure can give rise to charges to income tax on trust income and, other things being equal, employment related loans can be the subject of a specific tax charge under Part 3 chapter 7 (sections 173 191) of ITEPA and formerly under Part V chapter 2 (sections 160 161B) of ICTA. But the taxation of income earned by the assets of a trust is the taxation of a separate source of income from a persons emoluments or earnings and is therefore irrelevant. The specific provisions for the taxation of employment related loans have the effect of deeming the benefit of the loans to be emoluments. But if, on a proper analysis, the sums paid into the Principal Trust are emoluments in the first place, these provisions cannot apply as otherwise the taxpayer would taxed twice on part of the same earnings. I agree with Dr Poon in her dissenting judgment in the FTT when she stated (para 181) that the legislative code for emoluments has primacy over the benefits code in relation to loans. I also agree with the conclusion of the FTT in Sloane Robinson Investment Ltd v Revenue and Customs Comrs [2012] UKFTT 451 (TC), [2012] SFTD 1181 (para 93): it suffices to say that in these circumstances [the provisions of Part 7 of ITEPA (which covered income related securities)] cannot apply to a situation which is already covered by sections 18 and 686 of the Act. Part 7A of ITEPA was introduced by the Finance Act 2011 (section 26 and Schedule 2) and is designed to tax as employment income, among other things, the value of loans provided by third parties to employees under arrangements to reward employment. This legislation appears to have removed many of the benefits which some believed that the tax scheme gave. More recently, the Finance Act 2017 (section 15 and Schedule 6) has amended Part 7A of ITEPA. But these provisions, which are designed further to counter tax avoidance schemes, cannot affect the interpretation of prior tax legislation. Finally, section 154 of ICTA imposed a charge on the provision of benefits to members of the family or household of a person employed as a director of a company or with emoluments of 8,500 or more. But it does not militate against the interpretation which I have favoured because it is a residual charge to tax and applies only if the cost of providing the benefit is not otherwise chargeable to tax: section 154(1)(b). The current residual liability to a tax charge on such a benefit is in chapter 10 of Part 3 of ITEPA, section 201(2). I am therefore satisfied that the purposive approach to the interpretation of the general provisions of ICTA and ITEPA in relation to emoluments or earnings is not excluded by these provisions. Disposal For these reasons, which are essentially the same as those of the Inner House, I would dismiss the appeal.

RFC 2012 Plc (RFC) was a member of a group of companies whose parent company was Murray International Holdings Ltd. By a deed dated 20 April 2001, Murray Group Management Ltd, which was also a member of the group, set up a trust known as the Remuneration Trust (the Principal Trust). When a group company wished to benefit an employee it made a payment to the Principal Trust. On payment, the employing company asked the trustee of the Principal Trust to resettle the sum on to a sub trust and requested that the sub trust income and capital should be applied in accordance with the employees wishes. The trustee of the Principal Trust had a discretion whether to comply with those requests, but, in practice, the trustee without exception created the requested sub trust. The employee was appointed as protector of the sub trust with the power to change its beneficiaries. When RFC negotiated the engagement of a footballer, RFC would explain the sub trust mechanism, in particular, that the prospective employee could obtain a loan of the sum paid to the sub trust from its trustee which would be greater than the payment net of tax deducted under PAYE if he were to be paid through RFCs payroll. The trust fund would be held for the benefit of the beneficiaries of the sub trust, being members of the footballers family whom he specified. On the footballers death, the loans and interest would be repayable out of his estate, thereby reducing its value for Inheritance Tax purposes. RFC used the same mechanisms in paying discretionary bonuses to its senior executives. The Income Tax (Earnings and Pensions Act) 2003 (ITEPA) governs RFCs liability to income tax on employment income during the relevant tax years from 2003/04 to 2008/09. Section 6 imposes a tax on general earnings. Section 7 defines general earnings by reference to section 62. Section 62(2) provides [E]arnings, in relation to an employment, means (a) Any salary, wages or fee, (b) Any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or moneys worth, or (c) Anything else that constitutes an emolument of the employment. The Income and Corporation Taxes Act 1988 (ICTA) applied in the tax years 2001/02 and 2002/003. The relevant provisions in ICTA, under which income tax is charged on emoluments, are essentially to the same effect as those in ITEPA. In accordance with the Income Tax (Employments) Regulations 1993 and the Income Tax (Pay As You Earn) Regulations 2003 (the PAYE Regulations), employers who pay emoluments or earnings which are assessable to tax are required to deduct income tax from their payments to their employees under the pay as you earn (PAYE) regime. Under the PAYE Regulations, HM Revenue and Customs Commissioners determined that RFC had failed to pay income tax and National Insurance Contributions (NICs) on the sums paid to the trusts as remuneration. The parties to the appeal agreed that the determination of the appeal in relation to income tax governs the liability to NICs. The First tier Tribunal (the FTT) held that the scheme was effective in avoiding liability to income tax and NICs because the employees had only received a loan of the moneys paid to the trusts. The Upper Tribunal (Tax and Chancery Chamber) upheld the FTTs decision. The Inner House allowed HMRCs appeal. It held that income derived from an employees work is assessable to income tax, even if the employee agrees that it be redirected to a third party. The central issue in this appeal is whether it is necessary that the employee should himself or herself receive, or at least be entitled to receive, the remuneration for his or her work in order for that payment to amount to taxable earnings. The Supreme Court unanimously dismisses RFCs appeal. Lord Hodge gives the judgment, with which the other Justices agree. Three aspects of statutory interpretation are important in determining this appeal. First, provisions in the tax code imposing specific tax charges do not militate against the existence of a more general charge to tax which may have priority over or qualify the specific charge. Secondly, it is necessary to pay close attention to the statutory wording and not be distracted by judicial glosses which have enabled the court to apply the statutory words in other factual contexts. Thirdly, a purposive approach to the interpretation of the taxing provisions must be adopted [15]. As a general rule, the charge to tax on income extends to money that the employee is entitled to have paid as remuneration irrespective of whether it is paid to the employee or to a third party [41]. The relevant ICTA and ITEPA provisions do not restrict the concept of earnings by requiring payment to a specific recipient [38]. Section 62(2)(b) ITEPA confines the charge on perquisites and profits to benefits received by the employee, but there is no such restriction in section 62(2)(a) or 62(2)(c) [49]. Nothing in the wider purpose of the legislation excludes from the tax charge remuneration which the employee is entitled to have paid to a third party [39]. Parliament has sought to tax remuneration paid in money or moneys worth. There is no rationale for excluding from the scope of this tax charge remuneration in the form of money which the employee agrees should be paid to a third party [59]. For the purposes of PAYE it is necessary to determine whether there has been a payment of earnings from which deductions were required. Misplaced reliance on judicial glosses in relation to the concept of payment is evident in the case law leading up to the appeal [51]. There is no basis for establishing a general rule that a payment is made for the purposes of PAYE only if the money is paid to or at least placed unreservedly at the disposal of the employee [54]. The references to making a relevant payment to an employee or other payee in the PAYE Regulations fall to be construed as payment either to the employee or to the person to whom payment is made with the agreement of the employee [58]. The sums paid to the trustee of the Principal Trust for a footballer constituted the footballers earnings [64]. The risk that the trustee might not set up a sub trust or give a loan of the sub trust funds to the footballer does not alter the nature of the payments made to the trustee of the Principal Trust [65]. The discretionary bonuses made available to RFCs employees through the same trust mechanisms also fall within the tax charge as these were given in respect of the employees work [66]. Payment to the Principal Trust should have been subject to deduction of income tax under the PAYE Regulations [67]. As the sums paid into the Principal Trust were earnings in the first place, the specific provisions of the tax code which deem the benefit of loans to be earnings cannot apply [69].

When is it lawful for a local housing authority to accommodate a homeless person a long way away from the authoritys own area where the homeless person was previously living? There is no doubt that, for a variety of reasons, such out of borough placements have become increasingly common in recent years. The latest national statistics show that in September 2014 a quarter of all temporary accommodation for homeless people was provided in a different council area, an increase from 21% in September 2013. The great majority of these were from London Boroughs (Department for Communities and Local Government, Statutory Homelessness: July to September Quarter, England, National Statistics, Housing, Statistical Release, 11 December 2014). However, local authorities have a statutory duty to provide accommodation in their own area so far as reasonably practicable: Housing Act 1996 (the 1996 Act), section 208(1). And if that is not practicable, statutory guidance requires them where possible, to try to secure accommodation as close as possible to where the applicant was previously living. This case is about the import of those duties for individual households who are offered an out of borough placement. The facts The appellant is a 51 year old single mother of five children, aged between eight and 14. She has many long standing health problems: she is HIV positive, and suffers from Type II diabetes, hypertension, diabetic retinopathy and perhaps depression. She has lived in London since at least January 2000. From December 2008 to November 2012, the family lived in a privately rented four bedroomed house in Westminster. Her rent of 1,150 per week was covered by housing benefit. In 2012, however, a cap (known as the local housing allowance) was placed on the amount of housing benefit payable for privately rented properties according to their size and locality (known as the local housing allowance). Her maximum housing benefit was dramatically reduced. This meant that she was no longer able to afford the rent. The landlord was not prepared to reduce it and so she was evicted from her home in November 2012. She applied to Westminster City Council under the homelessness provisions in Part 7 of the 1996 Act and the family were temporarily housed in two rooms in a hotel in the Royal Borough of Kensington and Chelsea on a bed and breakfast basis. This was near enough for the children to continue in their schools. On 17 January 2013, she was notified that Westminster had decided that she was homeless, eligible for assistance, in priority need, not intentionally homeless, and that they should not refer her case to another local authority where she was more closely connected. Hence they accepted that they owed her what is usually termed the main homelessness duty under section 193(2) of the 1996 Act, as they put it a duty to ensure that you have somewhere suitable in which to live. Their temporary lettings team would be contacting her shortly with an offer of self contained temporary accommodation in discharge of that duty. On Thursday 24 January, the authority wrote offering her temporary accommodation in a five bedroomed house in Bletchley, near Milton Keynes. They had arranged for her to view the property at 12 pm on Monday 28 January. The letter explained: There is a severe shortage of accommodation in Westminster and it is not reasonably practicable for us to offer a Westminster home for everyone who applies for one. That is why we have had to offer you accommodation in Milton Keynes. Although it is outside Westminster, having considered your circumstances, we believe this accommodation is suitable for you. The appellant rejected this offer because it was too far away. It was too far from people helping her with her children. There would be nobody there she knew. She had high blood pressure and wanted to stay with her GP. It would mean changing the childrens schools. She had lived in Westminster for a long time. The authoritys immediate response, by letter of Friday 25 January, was that none of the children was of GSCE age, so it was suitable for them to move schools. The average journey time from the Bletchley property to Westminster was around one hour and 15 minutes. The property was of a suitable size for the family and based on your circumstances theres no reason for us to place you within the borough of Westminster. Because she had refused the offer, their duty under section 193 had ended and they were no longer required to provide her with accommodation. The letter was headed Notice that our housing duty has come to an end. This was no doubt because the duty under section 193(2) does not come to an end automatically when the applicant refuses to accept an offer of accommodation which the authority are satisfied is suitable; under section 193(5), the authority must serve notice that the duty has come to an end. The appellant sought a review of the authoritys decision under section 202 of the 1996 Act. She was interviewed for the purpose of the review, where she repeated her concerns and gave some more details of the help she received from her friends. Three of her friends were also interviewed. Two medical certificates were obtained which confirmed that her chronic conditions [were] incurable and likely to worsen with further complications and that she needed safe accommodation to be able to take medication and stay well; but a medical assessment could not find anything medical to preclude residing in Milton Keynes. The review was completed on 27 May 2013 and the reviewing officer confirmed the decision that the property in Bletchley was suitable and the duty towards her discharged. The decision letter dealt in detail with the familys personal circumstances. As to these, the officers conclusions were: I am not satisfied that the accommodation was unsuitable on the grounds that your medical and support needs are such that you have to live in Westminster; the length of time she had lived in Westminster was not a particularly long time and does not mean that you cannot live anywhere else; none of her children were currently sitting national exams and could move schools without their education suffering; and the accommodation offered was suitable and affordable. The letter then refers to the duty in section 208 of the 1996 Act and states: As you are aware Westminster is currently suffering from a severe shortage of both temporary and permanent accommodation. It is therefore not reasonably practicable to offer temporary accommodation in the borough for everyone who applies for it and therefore we have to offer some people temporary accommodation located outside Westminster. The Councils Temporary Lettings team carefully assesses each application based on the individual circumstances of each household member and decides what type of accommodation would be suitable for the household. Given the shortage of housing in Westminster and all of your circumstances, including those above, I believe that it was reasonable for the Council to offer your household this accommodation outside the Westminster area. This appears to be a standard paragraph which has appeared in a number of other decision letters emanating from the City of Westminster. The authority have produced no evidence of their policy in relation to the procurement of accommodation in order to fulfil their obligations under the 1996 Act, nor of the location of that accommodation, nor of the instructions given to the temporary lettings team as to how they are to decide which properties are offered to which applicants. The appellant then appealed to the county court under section 204 of the 1996 Act. The appeal was heard in October 2013. The authority adduced evidence that at that date 52% of Westminsters temporary accommodation units were in borough and 48% out of borough. Also produced was a report dated May 2012, from the Strategic Director of Housing, Regeneration and Property, produced for the relevant Cabinet Members approval. This reviewed the demand for and supply of social rented housing and low cost home ownership for the previous year and made supply and demand projections for the coming year. It revealed that in the nine months to the end of 2011 there had been 1072 homelessness applications and 394 acceptances; there was a total of 1783 households in temporary accommodation, of which 478 were stage 2 (that is, after the main homelessness duty had been accepted); the housing benefit cap was leading to an increase in homelessness resulting from the loss of a private sector tenancy; at the same time it was becoming increasingly difficult to source self contained temporary accommodation from the private sector, particularly in high rent areas; but at that time around 70% of their temporary accommodation was in borough, with the majority of the non Westminster stock in East London; it would continue to be secured in borough so far as reasonably practicable but would also be sourced out of borough in areas where it was available. The appeal was unsuccessful. HHJ Hornby commented that: I appreciate that there appears to be no reference in particular to the fact that consideration was given to the particular area within Westminster or those areas nearer than Milton Keynes, but it seems to me almost inevitable that the team must have had regard to all the stock that there was and allocated what was the most suitable property available to them for that particular person. The authority had been continuing to provide interim accommodation for the appellant and her children during the review and appeal process. But they refused to do so pending her application for permission to appeal to the Court of Appeal. After she was refused permission for a judicial review of that decision, the authority ceased to provide that accommodation. The childrens services department refused to accommodate the whole family and so on 24 February 2014, the appellant asked the childrens services department to provide accommodation for her children under the Children Act 1989. The children were separated between three different foster families and care proceedings were begun. The appellant was granted permission to appeal to the Court of Appeal, but that appeal was also unsuccessful, for reasons which were essentially the same as those of Judge Hornby: [2014] EWCA Civ 1383, [2015] PTSR 211 (see paras 33 and 34 below). The 1996 Act and Guidance Sections 206 and 208 of the 1996 Act impose distinct but related requirements upon the local authority. Section 206(1) provides that the authority may discharge their housing functions only by securing suitable accommodation, albeit by a variety of routes. Section 208(1) provides that: So far as reasonably practicable a local housing authority shall in discharging their housing functions under this Part secure that accommodation is available for the occupation of the applicant in their district. By virtue of section 205(1) of the 1996 Act, their housing functions refers to their functions under Part 7 to secure that accommodation is available for a persons occupation. It is clear, therefore, that these are duties owed to the individual person to whom the main homelessness duty is owed. The accommodation offered has to be suitable to the needs of the particular homeless person and each member of her household and the location of that accommodation can be relevant to its suitability: see R (Sacupima) v Newham London Borough Council [2001] 1 WLR 563, CA. This has since been fleshed out in statutory guidance. Under section 182(1) of the 1996 Act, local housing authorities are required to have regard to such guidance as may from time to time be given by the Secretary of State. The current general guidance is contained in the Homelessness Code of Guidance for Local Authorities (Department for Communities and Local Government, 2006). As to the duty in section 208(1), this provides: 16.7. Section 208(1) requires housing authorities to secure accommodation within their district, in so far as is reasonably practicable. Housing authorities should, therefore, aim to secure accommodation within their own district wherever possible, except where there are clear benefits for the applicant of being accommodated outside of the district. This could occur, for example, where the applicant, and/or a member of his or her household, would be at risk of domestic or other violence in the district and need to be accommodated elsewhere to reduce the risk of further contact with the perpetrator(s) or where ex offenders or drug/alcohol users would benefit from being accommodated outside the district to help break links with previous contracts which could exert a negative influence. As to suitability, the Code says this about the location of the accommodation: 17.41. The location of the accommodation will be relevant to suitability and the suitability of the location for all the members of the household will have to be considered. Where, for example, applicants are in paid employment account will need to be taken of their need to reach their normal workplace from the accommodation secured. The Secretary of State recommends that local authorities take into account the need to minimise disruption to the education of young people, particularly at critical points in time such as close to taking GCSE examinations. Housing authorities should avoid placing applicants in isolated accommodation away from public transport, shops and other facilities, and, wherever possible, secure accommodation that is as close as possible to where they were previously living, so they can retain established links with schools, doctors, social workers and other key services and support essential to the well being of the household. This has since been expanded upon. Under section 210(2), the Secretary of State may by order specify (a) the circumstances in which accommodation is or is not to be regarded as suitable, and (b) the matters to be taken into account or disregarded in determining whether accommodation is suitable for a person. During the passage of the Localism Act 2011, the Government undertook to remain vigilant to any issues that arose around suitability of location. It had come to light that some local authorities were seeking accommodation for households owed the main homelessness duty far outside their own district. The Government was therefore willing to explore whether protections around location of accommodation need to be strengthened and how this might be done (Department for Communities and Local Government, Homelessness (Suitability of Accommodation) (England) Order 2012 Consultation, May 2012, para 38). A full consultation exercise showed widespread support for strengthening that protection (Department for Communities and Local Government, Homelessness (Suitability of Accommodation)(England) Order 2012 Governments Response to Consultation, November 2012): Government has made it clear that it is neither acceptable nor fair for local authorities to place households many miles away from their previous home where it is avoidable. Given the vulnerability of this group it is essential that local authorities take into account the potential disruption such a move could have on the household. The method chosen was to make it a matter of statutory obligation to take the location of the accommodation into account when determining whether accommodation is suitable. Hence, in October 2012, shortly before the decisions were taken in this case, the Secretary of State made the Homelessness (Suitability of Accommodation) (England) Order 2012 (SI 2012/2601). Article 2 provides: In determining whether accommodation is suitable for a person, the local housing authority must take into account the location of the accommodation, including (a) where the accommodation is situated outside the district of the local housing authority, the distance of the accommodation from the district of the authority; (b) the significance of any disruption which would be caused by the location of the accommodation to the employment, caring responsibilities or education of the person or members of the persons household; (c) the proximity and accessibility of the accommodation to medical facilities and other support which (i) are currently used by or provided to the person or members of the persons household; and (ii) are essential to the well being of the person or members of the persons household; and (d) the proximity and accessibility of the accommodation to local services, amenities and transport. The Governments response to consultation had emphasised that the Order does not prevent or prohibit out of borough placements where they are unavoidable nor where they are the choice of the applicant. However, the Department also issued Supplementary Guidance on the homelessness changes in the Localism Act 2011 and on the Homelessness (Suitability of Accommodation) (England) Order 2012 (November 2012), which strengthened the obligation to secure accommodation as close as possible to where the household had previously been living: 48. Where it is not possible to secure accommodation within district and an authority has secured accommodation outside their district, the authority is required to take into account the distance of that accommodation from the district of the authority. Where accommodation which is otherwise suitable and affordable is available nearer to the authoritys district than the accommodation which it has secured, the accommodation which it has secured is not likely to be suitable unless the authority has a justifiable reason or the applicant has specified a preference. 49. Generally, where possible, authorities should try to secure accommodation that is as close as possible to where an applicant was previously living. Securing accommodation for an applicant in a different location can cause difficulties for some applicants. Local authorities are required to take into account the significance of any disruption with specific regard to employment, caring responsibilities or education of the applicant or members of their household. Where possible the authority should seek to retain established links with schools, doctors, social workers and other key services and support. (Emphasis supplied) The guidance goes on to deal with employment, caring responsibilities, education, medical facilities and other support, and also with cases where there may be advantages in the household being accommodated somewhere outside the local authoritys district, including employment opportunities there. The effect, therefore, is that local authorities have a statutory duty to accommodate within their area so far as this is reasonably practicable. Reasonable practicability imports a stronger duty than simply being reasonable. But if it is not reasonably practicable to accommodate in borough, they must generally, and where possible, try to place the household as close as possible to where they were previously living. There will be some cases where this does not apply, for example where there are clear benefits in placing the applicant outside the district, because of domestic violence or to break links with negative influences within the district, and others where the applicant does not mind where she goes or actively wants to move out of the area. The combined effect of the 2012 Order and the Supplementary Guidance changes, and was meant to change, the legal landscape as it was when previous cases dealing with an out of borough placement policy, such as R (Yumsak) v Enfield London Borough Council [2002] EWHC 280 (Admin), [2003] HLR 1, and R (Calgin) v Enfield London Borough Council [2005] EWHC 1716 (Admin), [2006] HLR 58, were decided. An applicant who is dissatisfied with any of the local authoritys decisions listed in section 202(1) of the Act can request a review of that decision. The decisions listed do not in terms include a decision to place out of borough despite section 208(1). But they do include, at (f), any decision of a local housing authority as to the suitability of accommodation offered in discharge of their duty under, inter alia, section 193(2). They also include, at (b), any decision as to what duty (if any) is owed, inter alia, under section 193(2). It is common ground that (b) includes a decision that the duty is no longer owed because it has been discharged. Under section 204, an applicant who has requested a review under section 202 and is dissatisfied with the decision may appeal to a county court on any point of law arising from the decision (alternatively, if the review decision has not been notified within the prescribed time, arising from the original decision). The childrens welfare Shelter Childrens Legal Service have helpfully intervened to remind the court that the exercise of the local authoritys functions under the 1996 Act is covered by section 11(2) of the Children Act 2004. This requires each person or body to whom the section applies (which includes a local housing authority) to make arrangements for ensuring that: (a) their functions are discharged having regard to the need to safeguard and promote the welfare of children; and (b) any services provided by another person pursuant to arrangements made by the person or body in the discharge of their functions are provided having regard to that need. Section 11 does not define welfare, but section 10 provides a statutory framework for co operation between the local authority and relevant agencies with a view to improving the well being of children in the area. Well being for this purpose is defined as (a) physical, mental and emotional well being; (b) protection from harm and neglect; (c) education, training and recreation; (d) the contribution made by children to society; and (e) social and economic well being (section 10(2)). The welfare of the child has long been given a broad meaning in family proceedings, encompassing physical, psychological, social, educational and economic welfare. It has been held that section 11 applies, not only to the formulation of general policies and practices, but also to their application in an individual case. As Pitchford LJ put it, in R (Castle) v Metropolitan Police Commissioner [2011] EWHC 2317 (Admin), [2014] 1 All ER 953, para 51: The chief officers statutory obligation is not confined to training and dissemination of information. It is to ensure that decisions affecting children have regard to the need to safeguard them and to promote their welfare. However, he went to point out that: This does not mean that the duties and functions of the police have been re defined by section 11 the guidance accurately states the obligation of chief officers of police to carry out their existing functions in a way which takes into account the need to safeguard and promote the welfare of children. In the homelessness context, there is a distinction between the factual decisions which the authority have to make and an exercise of discretion or evaluation. Thus it has been held that section 11 has no part to play in the decision as to whether a persons actions are deliberate for the purpose of deciding whether she is intentionally homeless. As Moses LJ pointed out in Huzrat v Hounslow London Borough Council [2013] EWCA Civ 1865, para 26: The statutory questions are clear; was the action or omission in question deliberate? The answer to that question cannot differ [according to] whether the local authority takes into account the duty under section 11 of the Childrens [sic] Act or not. Some statutory questions do leave room for the consideration of the childs welfare. Where the question relates to the eligibility of a third country national for homelessness assistance under the Regulations implementing the decision of the Court of Justice of the European Union in Ruiz Zambrano v Office national de lemploi (Case C 34/09) [2012] QB 265, the test is whether the EU citizen child of that third country national would be unable to reside in the UK or another EEA state if the third country national were obliged to leave. It was held in Hines v Lambeth London Borough Council [2014] EWCA Civ 660, [2014] 1 WLR 4112, that the childs welfare had obviously to be taken into account, but it could not be the paramount consideration as this would be inconsistent with the statutory language. The question of whether the accommodation offered is suitable for the applicant and each member of her household clearly requires the local authority to have regard to the need to safeguard and promote the welfare of any children in her household. Its suitability to meet their needs is a key component in its suitability generally. In my view, it is not enough for the decision maker simply to ask whether any of the children are approaching GCSE or other externally assessed examinations. Disruption to their education and other support networks may be actively harmful to their social and educational development, but the authority also have to have regard to the need to promote, as well as to safeguard, their welfare. The decision maker should identify the principal needs of the children, both individually and collectively, and have regard to the need to safeguard and promote them when making the decision. However, section 11 does not in terms require that the childrens welfare should be the paramount or even a primary consideration. As the Joint Committee on Human Rights pointed out (19th Report of Session 2003 2004, Children Bill, HL Paper 161, paras 69 to 77), it does not in terms reproduce the wording of article 3(1) of the United Nations Convention on the Rights of the Child (UNCRC): In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. Where Convention Rights under the Human Rights Act 1998 are engaged, it is well established that they have to be interpreted and applied consistently with international human right standards, including the UNCRC: see ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 AC 166, H(H) v Deputy Prosecutor of the Italian Republic Genoa (Official Solicitor intervening), [2012] UKSC 25, [2013] 1 AC 338, Stevens v Secretary of State for Communities and Local Government [2013] EWHC 792 (Admin), [2013] JPL 1383, approved in Collins v Secretary of State for Communities and Local Government [2013] EWCA Civ 1193, [2013] PTSR 1594. It is not suggested in this case that any of the Convention rights are engaged: compare Yumsak (para 19 above), where it was conceded that placing the mother and her children in Birmingham interfered with their rights under article 8 of the Convention. We have not heard argument on the interesting question of whether, even where no Convention right is involved, section 11 should nevertheless be construed consistently with the international obligations of the United Kingdom under article 3 of the UNCRC. That must be a question for another day. It is also the case that there will almost always be children affected by decisions about where to accommodate households to which the main homelessness duty is owed. Such households must, by definition, be in priority need, and most households are in priority need because they include minor children. The local authority may have the invidious task of choosing which household with children is to be offered a particular unit of accommodation. This does not absolve the authority from having regard to the need to safeguard and promote the welfare of each individual child in each individual household, but it does point towards the need to explain the choices made, preferably by reference to published policies setting out how this will be done (as to which see further below). Evidencing and explaining the authoritys decisions The Secretary of State for Communities and Local Government has also intervened in this case, in order to emphasise that when making decisions about where to accommodate homeless persons, local authorities have a number of duties to evidence and explain their decisions. They are required to take the Code and Supplementary Guidance into account. If they decide to depart from them they must have clear reasons for doing so: see R (Khatun) v Newham London Borough Council [2004] EWCA Civ, [2005] QB 37, para 47. Very good reasons are required to depart from a policy formulated after public consultation: Royal Mail Group plc v Postal Services Commission [2007] EWHC 1205 (Admin), para 33. This is especially so where the Code is designed to protect vulnerable people: R (Munjaz) v Mersey Care NHS Trust [2005] UKHL 58, [2006] 2 AC 148. By definition, any homeless household in priority need will be vulnerable in this sense. The authority must also have a proper evidential basis for their decision: R (Calgin) v Enfield London Borough Council [2005] EWHC 1716 (Admin), [2006] HLR 58, para 32. It must be clear from the decision that proper consideration has been given to the relevant matters required by the Act and the Code. While the court should not adopt an overly technical or nit picking approach to the reasons given in the decision, these do have to be adequate to fulfil their basic function. It has long been established that an obligation to give reasons for a decision is imposed so that the persons affected by the decision may know why they have won or lost and, in particular, may be able to judge whether the decision is valid and therefore unchallengeable or invalid and therefore open to challenge: see R v City of Westminster, Ex p Ermakov (1996) 28 HLR 819, at 826 827. Nor, without a proper explanation, can the court know whether the authority have properly fulfilled their statutory obligations. The Secretary of State is concerned that the Court of Appeal was too ready to assume that the authority had properly complied with their statutory obligations. Thus, at para 21, it was said that the reviewing officer must be taken to have been aware of the resources available to the council and the pressures on them. It is not necessary in a decision letter of this kind for the reviewing officer to describe in detail what those resources and pressures are. If, as I think, Westminster was entitled to take a broad range of factors into account in deciding whether it was reasonably practicable to provide accommodation to [the applicant] within its own district, it was sufficient for the reviewing officer to describe the circumstances which led her to that conclusion in general terms. I am therefore not persuaded that her decision was irrational in the sense that it lacked an evidential base. Then, at para 25, when it came to providing accommodation as close as possible to the home district: The guidance produced by the Secretary of State is lengthy and detailed in my view there is no basis for inferring that [the reviewing officer] did not have it in mind or that she was unaware of the desirability of accommodating [the applicant] as close to Westminster as was reasonably practicable. It was not necessary for her to explain in detail what other accommodation was available to Westminster outside its own district and why it had not been offered to [her]. The Secretary of State complains that the effect of this approach would be to encourage courts to infer, on no other basis than the assumed experience and knowledge of a local authority, that the authority knew of the Code and Guidance and had taken it into account; that the authority had considered and rejected the possibility of providing closer accommodation than that offered; and that the authority had good reasons for their decision in this particular case. If the courts are prepared to assume all this in the authoritys favour, this would immunise from judicial scrutiny the automatic decisions to house people far from their home district, which was just what the 2012 Order and Supplementary Guidance were designed to prevent. This case The Secretary of State has, of course, made no submissions as to the effect of these criticisms in this particular case. Mr Peacock, on behalf of the Local Authority, does not dispute the applicable principles but has valiantly tried to defend the decision letter. But it is apparent that this decision suffers from all of those defects and more. There is little to suggest that serious consideration was given to the authoritys obligations before the decision was taken to offer the property in Bletchley. At that stage, the temporary lettings team knew little more than what was on the homelessness application form. This did not ask any questions aimed at assessing how practicable it would be for the family to move out of the area. Nor were any inquiries made to see whether school places would be available in Bletchley and what the appellants particular medical conditions required. Those inquiries were only made after the decision had been taken. The review decision is based on the premise that, because of the general shortage of available housing in the borough, the authority could offer accommodation anywhere else, unless the applicant could show that it was necessary for her and her family to remain in Westminster. There was no indication of the accommodation available in Westminster and why that had not been offered to her. There was no indication of the accommodation available near to Westminster, or even in the whole of Greater London, and why that had not been offered to her. There was, indeed, no indication that the reviewing officer had recognised that, if it was not reasonably practicable to offer accommodation in Westminster, there was an obligation to offer it as close by as possible. It follows that the authority cannot show that their offer of the property in Bletchley was sufficient to discharge their legal obligations towards the appellant under the 1996 Act. Moreover, their notification to the appellant that their duty towards her had come to an end was purportedly given in circumstances where she did not know, and had no means of knowing, what, if any, consideration had been given to providing accommodation in or nearer to the borough, apart from the general standard paragraph in the letter offering her the Bletchley accommodation the previous day. I would add that they also cannot show that they have properly discharged their obligation under section 11 of the Children Act 2004. The appeal must be allowed and the decision that their duty to secure that accommodation was made available to her had come to an end must be quashed. Guidance But how, it may be asked, are local authorities to go about explaining their decisions as to the location of properties offered? It is common ground that they are entitled to take account of the resources available to them, the difficulties of procuring sufficient units of temporary accommodation at affordable prices in their area, and the practicalities of procuring accommodation in nearby authorities. It may also be acceptable to retain a few units, if it can be predicted that applicants with a particularly pressing need to remain in the borough will come forward in the relatively near future. On the other hand, if they procure accommodation outside their own area, that will place pressures on the accommodation, education and other public services available in those other local authority areas, pressures over which the receiving local authority will have no control. The placing authority are bound to have made predictions as to the likely demand for temporary accommodation under the 1996 Act and to have made arrangements to procure it. The decision in any individual case will depend upon the policies which the authority has adopted both for the procurement of temporary accommodation, together with any policies for its allocation. Ideally, each local authority should have, and keep up to date, a policy for procuring sufficient units of temporary accommodation to meet the anticipated demand during the coming year. That policy should, of course, reflect the authoritys statutory obligations under both the 1996 Act and the Children Act 2004. It should be approved by the democratically accountable members of the council and, ideally, it should be made publicly available. Secondly, each local authority should have, and keep up to date, a policy for allocating those units to individual homeless households. Where there was an anticipated shortfall of in borough units, that policy would explain the factors which would be taken into account in offering households those units, the factors which would be taken into account in offering units close to home, and if there was a shortage of such units, the factors which would make it suitable to accommodate a household further away. That policy too should be made publicly available. This approach would have many advantages. It would enable homeless people, and the local agencies which advise them, to understand what to expect and what factors will be relevant to the decision. It would enable temporary letting teams to know how they should go about their business. It would enable reviewing officers to review the decisions made in individual cases by reference to those published policies and how they were applied in the particular case. It would enable reviewing officers to explain whether or not the individual decision met the authorities obligations. It would enable applicants to challenge, not only the lawfulness of the individual decision, but also the lawfulness of the policies themselves. Indeed, it would also enable a general challenge to those policies to be brought by way of judicial review. In some ways this might be preferable to a challenge by way of an individual appeal to a county court. But it may not always be practicable to mount a judicial review of an authoritys policy, and an individual must be able to rely upon any point of law arising from the decision under appeal, including the legality of the policy which has been applied in her case. No doubt there are other ways in which an authority could ensure that their decisions are properly evidenced and properly explained. But a standard paragraph of the sort that was used in this case is not one of them.

The question arising in this appeal is whether it is lawful for a local housing authority to accommodate a homeless person a long way away from the authoritys own area where the homeless person was previously living. Local authorities have a statutory duty to provide accommodation in their own area so far as reasonably practicable under section 208(1) Housing Act 1996 (the 1996 Act). The accommodation must be suitable to the needs of the homeless person and each member of the household, and the location can be relevant to its suitability. Regard must be given to any guidance given by the Secretary of State for Communities and Local Government. While out of borough placements are not prohibited, the Homelessness (Suitability of Accommodation) (England) Order 2012 (the 2012 Order) requires authorities to take into account the distance of the accommodation being offered from its district and the disruption to caring responsibilities or the education of any member of the household. The obligation to secure accommodation as close as possible to where the household had previously been living was strengthened by Supplementary Guidance on the homelessness changes in the Localism Act 2011 and on the Homelessness (Suitability of Accommodation) (England) Order 2012 (the Supplementary Guidance), including the need to seek to retain established links with schools, doctors, social workers and other key services and support. The appellant is a single mother of five children aged between 8 and 14. She has serious health problems. In 2012 she was evicted from her privately rented home, in which she had been living since 2008, following the introduction of a cap on housing benefit, which left her unable to pay the rent. The respondent housing authority (Westminster) accepted that she was unintentionally homeless and that it owed a duty to provide her with suitable accommodation. It offered her temporary accommodation in a house in Bletchley, near Milton Keynes, with a brief explanation that due to a severe shortage of accommodation it was not reasonably practicable to offer her a home in Westminster, but that this house was suitable in view of her circumstances. The children were not of GCSE age so Westminster considered it suitable for them to move schools. The appellant refused the accommodation and Westminster served notice that its duty to house her had come to an end. Her application for a review of the decision was unsuccessful. Her appeals to the County Court and Court of Appeal were also dismissed. The Supreme Court unanimously allows the appeal and quashes Westminsters decision that it had discharged its duty to house the appellant because she had refused suitable accommodation. Lady Hale gives the only judgment. The 1996 Act and Guidance Local authorities have a statutory duty to accommodate persons within their area so far as this is reasonably practicable. Reasonable practicability imports a stronger duty than simply being reasonable. Where it is not reasonably practicable to accommodate in borough they must generally try to place the household as close as possible to where they were previously living. The combined effect of the 2012 Order and the Supplementary Guidance has changed the legal landscape when dealing with out of borough placement policies [19]. As an aspect of the suitability of the accommodation being offered, a decision to place an applicant out of borough falls within the grounds on which a review can be sought under section 202 of the 1996 Act [20]. The childrens welfare The exercise of the local authoritys functions under the 1996 Act is subject to section 11(2) of the Children Act 2004, which requires it to have regard to the need to safeguard and promote the welfare of children. Welfare encompasses physical, psychological, social, educational and economic welfare [23] and the duty applies both to the formulation of general policies and practices and to their application in an individual case [24]. The duty is clearly relevant to the question of the suitability of the accommodation being offered [27]. It does not, however, require that the childrens welfare should be the paramount or even a primary consideration [28]. There will almost always be children affected by decisions about where to accommodate households to which the main homelessness duty is owed, and invidious choices between them must sometimes be made, but this points towards the need to explain the choices made, preferably by reference to published policies [30]. Evidencing and explaining the authoritys decisions The Secretary of State intervened in the case to emphasise the duties on local authorities to evidence and explain their decisions [31]. It must be clear from the decision that proper consideration has been given to the relevant matters required by the 1996 Act and accompanying Code. The courts below were too ready to assume that Westminster had properly complied with its statutory obligations, which had the effect of immunising from judicial scrutiny automatic decisions to house people far from their home district [35]. This case The decision made in the appellants case suffers from these defects and more. No enquiries were made to assess the practicability of moving the family to Bletchley or as to the childrens needs, and no consideration seems to have been given to the duty to offer accommodation as close by as possible or explanation given [36]. It follows that Westminster still owes the appellant a duty to secure suitable accommodation. Guidance Ideally each local authority should have an up to date publically available policy for securing sufficient units of temporary accommodation to meet the anticipated demand for the coming year, reflecting its obligations under the 1996 Act and the Children Act 2004. It should also have a policy for the allocation of those units to individual homeless households, to which reference would be made in explaining any decisions to accommodate a household out of the area [39]. This way decisions will be properly evidenced and explained, and can be challenged if required [41].

We are concerned with the employment, by the Secretary of State for Children, Schools and Families, of teachers to work in the European Schools. These are schools set up to provide a distinctively European education principally for the children of officials and employees of the European Communities. The Staff Regulations, made by the Board of Governors pursuant to the Convention defining the Statute of the European Schools, limit the period for which teachers may be seconded to work in those schools to a total of nine years (or exceptionally ten). This is made up of an initial probationary period of two years, and a further period of three years, which is renewable for a further four years. The principal question before us is whether these arrangements can be objectively justified as required by the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) (the Fixed term Regulations). This was the measure chosen by the United Kingdom to implement Council Directive 1999/70/EC concerning the framework agreement on fixed term work concluded by ETUC, UNICE and CEEP (the Fixed term Directive). The effect of regulation 8 is that a successive fixed term contract is turned into a permanent employment unless the use of such a contract can be objectively justified. Should the answer to the principal question be no, two subsidiary issues arise in the case of teachers who are employed to work in schools outside the United Kingdom. The first is whether the Fixed term Regulations apply to them. In other words, do they form part of the contractual arrangements between the parties? This may raise questions of European law which might have to be referred to the European Court of Justice. The second is whether the statutory protection against unfair dismissal, given to people employed in Great Britain, applies to them. Without such protection, the teachers would be limited to their contractual rights. If the answer to the principal question is yes, however, these questions do not arise. The Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal have all held that the use of successive fixed term contracts for these teachers is not objectively justified. In the case of teachers employed to work in schools outside the United Kingdom, the Employment Appeal Tribunal and the Court of Appeal have held that the Fixed term Regulations do apply. However, this might have been something of a pyrrhic victory, because the Employment Tribunal and the Employment Appeal Tribunal held, applying the test in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250, that the teachers were not entitled to make claims for unfair dismissal. This would have meant that they were limited to their contractual notice rights. The Court of Appeal held, applying the principle in Bleuse v MBT Transport Ltd [2008] ICR 488 that, nevertheless, it was necessary to extend the remedy of unfair dismissal to them in order to give them an effective remedy for breach of their rights in Community law. The Secretary of State appeals against the decision of the Court of Appeal, reported at [2010] ICR 815, on all save the Lawson v Serco issue and the teachers cross appeal on that issue. The background The first European School was established in 1954 for the children of officials of the European Coal and Steel Community, by agreement between the original six Member States. This later became the Statute of the European Schools and Protocol on the Setting Up of the European Schools of 1957. In 1994, the Member States and the European Communities adopted the Convention defining the Statute of the European Schools (the Schools Convention), which consolidated, updated and amended the original Statute. The Board of Governors, established under the Convention, is made up of a representative of the European Commission, a representative of each Member State, a staff representative, a parent representative and a representative of the EU Patent Office. The Regulations for Members of the Seconded Staff of the European Schools 1996 (the Staff Regulations) were made by the Board pursuant to Article 12 of the Schools Convention. Articles 28 and 29 of those Regulations define the terms for which teachers may be seconded: an initial probationary period of two years (article 28(1)); a further period of three years (article 29(a)(i)); renewable for a further period of four years (article 29(a)(i)); subject to a maximum period of nine years, although a further one year extension may be granted in special cases (article 29(a)(ii)). This is what has come to be referred to as the nine year rule. The nine year rule is an attempt to strike a balance between the need for expertise and continuity in the European Schools and the desire for cross fertilisation between those schools and the national schools of the Member States; to put it another way, to prevent the European Schools becoming an educational ghetto, isolated from the mainstream of ordinary education. Whether the supposed benefits of the rule outweigh the disruption caused to the lives of the teachers and to the education of their pupils is controversial. The staff committee has for a long time been trying to persuade the Governors to think again but so far without success. The United Kingdom government has also supported a review of the rule, which presents a particular difficulty for the United Kingdom because of the way in which teachers are employed in this country. Most of the teachers in the European Schools are not employed by the schools themselves, but are employed as teachers by the Member States and seconded to work in the European Schools. In most of the Member States, school teachers are permanent employees of the state. At the end of their secondment they return to work in their home countries. In the United Kingdom, however, school teachers are employed either by the local education authority or by the governing body of the school where they work. They are not employed by central government. Hence the Secretary of State employs teachers specifically to work in the European Schools and on fixed term contracts which correspond to the secondment periods laid down in the Staff Regulations. This of course presents problems for the teachers, who will have to look for new employment when their terms of employment end. It also presents a problem for the Secretary of State, who has no other work for these teachers once their secondment to the European Schools is over. The Directive and the Regulations It is important to understand that the Fixed term Directive is not directed against fixed term contracts as such. It has two more specific aims, set out in recital (14): The signatory parties . have demonstrated their desire to improve the quality of fixed term work by ensuring the application of the principle of non discrimination, and to establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships. Those two purposes are spelled out in clause 1 of the annexed Framework Agreement. Clause 4 goes on to deal with the principle of non discrimination and clause 5 deals with measures to prevent abuse: 1. To prevent abuse arising from the use of successive fixed term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures: (a) objective reasons justifying the renewal of such contracts or relationships; (b) the maximum total duration of successive fixed term employment contracts or relationships; (c) the number of renewals of such contracts or relationships. The preamble and general considerations in the Framework Agreement recognise that contracts of an indefinite duration are, and will continue to be, the general form of employment relationship between employers and workers and also that they contribute to the quality of life of the workers concerned and improve performance. But they also recognise that fixed term employment contracts respond, in certain circumstances, to the needs of both employers and workers and that they are a feature of employment in certain sectors, occupations and activities which can suit both employers and workers. But the substantive provisions of the Framework Agreement do not attempt to define the circumstances in which fixed term employment is acceptable. Instead they concentrate on preventing or limiting the abuse of successive fixed term contracts, the abuse being to disguise what is effectively an indefinite employment as a series of fixed term contracts, thus potentially avoiding the benefits and protections available in indefinite employment. When implementing clause 5 of the Framework Agreement, the United Kingdom chose a mixture of options (a) and (b). Regulation 8 of the Fixed term Regulations deals with Successive fixed term contracts: (1) This regulation applies where (a) an employee is employed under a contract purporting to be a fixed term contract, and (b) the contract mentioned in sub paragraph (a) has previously been renewed, or the employee has previously been employed on a fixed term contract before the start of the contract mentioned in sub paragraph (a). Thus the regulation only applies to a fixed term contract where there has been at least one previous fixed term contract or to a fixed term contract which has been renewed. It continues: (2) Where this regulation applies then, with effect from the date specified in paragraph (3), the provision of the contract mentioned in paragraph (1)(a) that restricts the duration of the contract shall be of no effect, and the employee shall be a permanent employee, if (a) the employee has been continuously employed under the contract mentioned in paragraph (1)(a), or under that contract taken with a previous fixed term contract, for a period of four years or more, and (b) the employment of the employee under a fixed term contract was not justified on objective grounds (i) where the contract mentioned in paragraph (1)(a) has been renewed, at the time when it was last renewed; (ii) where that contract has not been renewed, at the time when it was entered into. (3) The date referred to in paragraph (2) is whichever is the later of (a) the date on which the contract mentioned in paragraph (1)(a) was entered into or last renewed, and (b) the date on which the employee acquired four years continuous employment. Thus there is no need for objective justification for the current (that is, renewed or successive) contract unless and until the employee has been continuously employed for four years. But once he has, the latest renewal or successive contract has to be justified on objective grounds. Otherwise the contract will automatically be transformed into a contract of indefinite duration. As such it will still, of course, be terminable by whatever is the contractual notice period on either side. The individual cases Mr Fletcher was employed by the Secretary of State and seconded to work in the European School in Culham, Oxfordshire, from 1 September 1998 until 31 August 2008. After his two year probationary period, therefore, he was employed for a further three year period, extended for a further four years, and then an additional one year, making the maximum total of ten years in all. His initial offer letter referred to the nine year rule, and stated that the contract was governed by English law and that the English courts had exclusive jurisdiction over it. In 2007, Mr Fletcher claimed that he was a permanent employee by virtue of regulation 8 of the Fixed term Regulations. The Employment Tribunal made a declaration to that effect on 16 November 2007. The Tribunal went through the documents showing the history of and debates about the nine year rule in some detail. They examined the three reasons for the rule recorded in the Minutes of the Board of Governors in 2002, summarised as: turnover of staff, new staff bringing new ideas, and enrichment of the national systems when teachers returned. They noted that they did not have the benefit of evidence from the Troika of Governors who had last considered the rule and found no evidence to support its supposed benefits: quite the reverse. They therefore rejected the factual justification for the rule. They also rejected the argument that the fact that Staff Regulations laid down the rule was justification in itself. They cited the rulings of the European Court of Justice in Adeneler v Ellinikos Organismos Galaktos (ELOG) (Case C 212/04) [2006] ECR I 6057 and Del Cerro Alonso v Osakidetza (Servicio Vasco de Salud) (Case C 307/05) [2008] ICR 145 that a difference in treatment could not be justified on the basis that it was provided for by a general, abstract national norm but had to be justified by the existence of precise and concrete factors, characterising the employment condition to which it relates, in the specific context in which it occurs and on the basis of objective and transparent criteria in order to ensure that the unequal treatment in fact responds to a genuine need, is appropriate for achieving the objective pursued and is necessary for the purpose. They regarded the Staff Regulations in the same light as the Greek national law in Adeneler (which simply provided that fixed term contracts were justified where national law provided for them). The Secretary of State could not therefore rely upon the Staff Regulations unless these prevailed over the Fixed term Directive. They held that the Directive prevailed. It followed that Mr Fletcher was entitled to his declaration. Both the Employment Appeal Tribunal and the Court of Appeal dismissed the Secretary of States appeal. The Court of Appeal heard the case of Mr Fletcher together with that of Mr Duncombe. Mr Duncombe was a teacher at the European School in Karlsruhe, Germany, from January 1996 until 31 August 2006. He too was employed under a series of fixed term contracts to reflect the nine year rule. He brought claims in the Employment Tribunal for wrongful dismissal or pay in lieu of notice, unfair dismissal and a declaration that he was a permanent employee. He failed on the preliminary point that he did not have the right to bring the claims because he was employed outside the United Kingdom. In both the Employment Appeal Tribunal and the Court of Appeal, he succeeded in respect of his claim for wrongful dismissal or pay in lieu of notice, and in the Court of Appeal he also succeeded in respect of his claim for unfair dismissal. The arguments on the principal question Before the Employment Tribunal the Secretary of State made what, with hindsight, was the fatal mistake of trying to justify the nine year rule on its merits. In other words, he tried to persuade the Tribunal that it was a good thing. This he conspicuously failed to do. The Tribunal was unconvinced by the argument that encouraging a turnover of staff in the European Schools was a way of bringing in staff with up to date experience of teaching in the national systems, thus with new ideas and a fresh outlook, as well as returning teachers to their national systems enriched with a European outlook. Despite the unreality of the Tribunal expecting the Governors of the European Schools to appear before them to explain themselves, it was not suggested until now that this was an exercise upon which the Tribunal should never have embarked. Before this Court, Mr Crow QC on behalf of the Secretary of State contends that it is not for a court or tribunal in one of the Member States to inquire into the factual merits of the nine year rule. The plain fact of the matter is that the Secretary of State has no choice. The United Kingdom has only one vote on the Board of Governors and has so far failed to persuade them that the rule should be changed. It has to employ teachers for the purpose of seconding them to the European Schools and the Schools will only take them on the basis of the nine year rule. All of this is made perfectly plain to the teachers when they are recruited. This in itself is objective justification for employing the teachers on successive or renewable contracts which mirror the periods in the rule. Mr Crow further argues that this is not a question of whether the Staff Regulations trump the Fixed term Directive, as the Employment Tribunal held that they had to do if the Secretary of State was to get home on this ground. There is no inconsistency between the two. The Staff Regulations do not dictate the terms of employment of seconded teachers, merely the duration of the period(s) for which they can be seconded to the schools. Furthermore, the reliance in both the Employment Tribunals and the Court of Appeal on the case of Adeneler was misplaced. There it was held that a Greek employer could not rely upon a general rule of Greek law as justification. That was in effect allowing a Member State to provide for a general opt out from the Directive. But that is not this case. It is not argued that the United Kingdom has failed to transpose the Directive properly. The rule in question is specific to the work in question and is made by an international body responsible for determining the terms of that work in circumstances over which the United Kingdom has no control. The respondent teachers are understandably aggrieved that the Secretary of State should now be putting his case rather differently from the way in which it was put in the Tribunals and Court below. But they have to grapple with the argument. Mr Giffin QC argues that the Staff Regulations are incompatible with the Directive. The Directive is there to give effect to the proposition that the norm is indefinite employment. If therefore there is an indefinite need for the work which the employee is doing, then prima facie the worker should be kept on an indefinite contract. It defeats the object to keep changing the workers doing the same job. The exceptions, where fixed term contracts may be justified, relate to the specific short term or seasonal nature of the work being done. (Thus, for example, it was justified for the European Parliament to employ people on short term contracts to coincide with the Parliamentary sessions: see the judgment of the European Union Civil Service Tribunal in Aahyan v European Parliament (Case F 65/07) (unreported), 30 April 2009.) There is therefore no escape from a factual inquiry into the evidence to see whether the practice is really justified. A practice can be justified because it is complying with a rule, but only if the rule itself is justified. The Employment Tribunal has found that this one is not and there is no right of appeal from that factual finding. Furthermore, he argues, all the Member States are bound by the Directive and by a general duty to co operate with one another in furthering its purposes. Their representatives on the Board of Governors cannot therefore use the power to make Staff Regulations in a way which means that Member State employers will be using fixed term contracts in contravention of the Directive. In short, the United Kingdom should be taking a tougher line with the Board, and invoke the dispute resolution mechanism, as the teachers have argued, rather than complain that it is between a rock and a hard place. Discussion of the principal question The teachers complaint is not against the three or four periods comprised in the nine year rule but against the nine year rule itself. In other words, they are complaining about the fixed term nature of their employment rather than about the use of the successive fixed term contracts which make it up. But that is not the target against which either the Fixed term Directive or the Regulations is aimed. Had the Secretary of State chosen to offer them all nine year terms and take the risk that the schools would not have kept them for so long, they would have had no complaint. Employing people on single fixed term contracts does not offend against either the Directive or the Regulations. This is therefore the answer to Mr Giffins attractive argument: that fixed term contracts must be limited to work which is only needed for a limited term; and that where the need for the work is unlimited, it should be done on contracts of indefinite duration. This may well be a desirable policy in social and labour relations terms. It may even be the expectation against which the Directive and Framework Agreement were drafted. But it is not the target against which they were aimed, which was discrimination against workers on fixed term contracts and abuse of successive fixed term contracts in what was in reality an indefinite employment. It is not suggested that the terms and conditions on which the teachers were employed during their nine year terms were less favourable than those of comparable teachers on indefinite contracts. It follows that the comprehensive demolition by the Employment Tribunal of the arguments for the nine year rule is nothing to the point. It is not that which requires to be justified, but the use of the latest fixed term contract bringing the total period up to nine years. And that can readily be justified by the existence of the nine year rule. The teachers were employed to do a particular job which could only last for nine years. The Secretary of State could not foist those teachers on the schools for a longer period, no matter how unjustifiable either he or the employment tribunals of this country thought the rule to be. The teachers were not employed to do any alternative work because there was none available for them to do. The Adeneler case is not in point. That concerned a national rule which provided a general get out from the requirements of the Directive. It is not a question of whether the Staff Regulations trump the Directive. There is no inconsistency between them. The Staff Regulations are dealing with the duration of secondment, not with the duration of employment. In those circumstances it is questionable whether there is any duty of co operation between the Member States. It appears that the Board of Governors did not see any conflict between the Staff Regulations and the Directive. This is scarcely surprising. The United Kingdom could have chosen to implement the Directive by setting a maximum number of renewals or successive fixed term contracts, for example by limiting them to three. It could equally have chosen to implement the Directive by setting a maximum duration to the employment, for example by limiting it to nine or ten years in total. It is readily understandable why the alternative route of requiring objective justification after four years was taken: this is more flexible and capable of catering for the wide variety of circumstances in which a succession of fixed term contracts may be used. Unless a very short maximum total had been chosen, it is more favourable to employees than the alternatives. But the fact that the alternatives would have been equally acceptable ways of implementing the Directive is yet another indication that the target is not fixed term employment as such. For these reasons I would allow the appeal of the Secretary of State on the principal issue. In those circumstances, there is no need to consider the other issues which arise in the case of Mr Duncombe and the other teachers who were employed to work in schools outside the United Kingdom. But they are both important points to which a large proportion of the argument before us was directed. The remedies issue There is now a great deal of European Union law addressing employment rights. This is not surprising as the free movement of workers is one of the fundamental rights in the Union. Mr Crow argues that these are rules designed for the protection of employees and should thus be subject to the same jurisdictional rule which applies to the protection given in our domestic law against unfair dismissal. That protection only applies to employment in Great Britain and the principles governing when an employment should be held to be in Great Britain and when it should not were laid down by the House of Lords in Lawson v Serco. It is not enough, however, simply to characterise the rules of European law relating to employment as employment protection. They are designed in part for that purpose, of course, but they are different from the law of unfair dismissal in at least three ways. First, of course, they have their source in the law of the European Union and not simply in the domestic law of the United Kingdom. Secondly, that law is designed to offer workers the same or similar protection wherever they are working in the area covered by European Union law. They must not lose the rights that they have accrued in one of the Member States because they choose to work in another Member State; nor should they have lesser rights than other workers in the country where they go to work. Thirdly, therefore, the rights which workers have are enforceable as part of the contractual arrangements between them and their employers. The question then becomes one of incorporation into those contracts. In what circumstances does a contract of employment between a United Kingdom employer and a worker who is employed to work outside the United Kingdom incorporate the protection given by European Union law? It may be that it is not enough simply to provide that the contract is governed by English law (or by the law of some other jurisdiction within the United Kingdom). Would a person employed to work in China, for example, be able to claim the benefit of all the domestic law which emanates from the European Union? It is not necessary to attempt to answer that question, because we are concerned with a person employed by an employer in the United Kingdom to work in another country within the European Union. Is it to be expected that there should be gaps in the protection offered to such workers? In other words, that they would be protected if employed by an employer in the country where they work, but not if employed by an employer in their home country? Two people doing exactly the same work would enjoy very different protection. This seems, on the face of it, an unlikely conclusion. On the other hand, there would still be differences between the two employees. One would be covered by the European Union law as implemented in the country where they both worked; the other would be covered by the law as implemented in the country where his employer was based. These would not always be identical, as the example of the Fixed term Directive shows. But the context of the European Schools shows that there may be European workers from different European countries who are subject to different contractual arrangements. At least, on this view, they would all have the benefit of the minimum requirements imposed by European Union law. I would therefore be inclined to agree with the Tribunals and the Court of Appeal that Mr Duncombe and other teachers employed by the Secretary of State in European schools abroad are covered by the Fixed term Regulations. But the intended scope of the protection given by the Directive, and others like it, is a question of European Union law to which a uniform answer should be given throughout the Union. We have not been shown any authority which indicates that the answer is acte clair, however obvious we might think the answer to be. Had it been necessary to answer the question, therefore, it would probably be necessary to refer it to the European Court of Justice. Were the answer to that simple question to be yes it would then be necessary to give further consideration to the mechanisms appropriate to achieve that end. There was much discussion before us of whether the Fixed term Directive had direct effect and whether the principle put forward by the Employment Appeal Tribunal in Bleuse v MBT Transport Ltd [2008] ICR 488 applied. There is no need to enter into that debate at present, but it would seem unlikely that, if the protection of European employment law is to be extended to workers wherever they are working in the area covered by European law, that protection should depend upon whether or not it gives rise to directly effective rights against organs of the state. A way would have to be found of extending it to private as well as public employment. The cross appeal As already indicated, the scope of protection against unfair dismissal is a different question. This does not originate in European Union law. It is a remedy devised by Parliament to fill a well known gap in the protection offered to employees by the domestic law of contract. It does not form part of the contractual terms and conditions of employment. The Employment Rights Act 1996 no longer specifies the employments to which the right not to be unfairly dismissed in section 94(1) applies whether to employees actually doing their work wholly or mainly within Great Britain or to employees who are based here or to some other employments as well. In Lawson v Serco the House of Lords held that it applied to employment in Great Britain but that there were some exceptional circumstances in which people who performed their work wholly or mainly outside Great Britain were nevertheless protected. However, it was not enough that the employer was based here. Something more was needed. This might be provided by the fact that an employee was posted abroad for the purpose of a business conducted, not in the foreign country, but here at home: for example, a foreign correspondent of a British newspaper (para 38). It might also be provided by the fact that an employee was working within what amounts for practical purposes to an extra territorial British enclave in a foreign country (para 39): for example, a civilian employee working on a British military base in Germany or an RAF base on Ascension Island. Lord Hoffmann, with whom all the other members of the committee agreed, was not able to think of any other examples: they would have to have equally strong connections with Great Britain and British employment law (para 40). Mr Giffin makes a strong case that this is another example: a British worker working for the British government within an international enclave who has no one else to whom he can turn for protection. But this last cannot be enough on its own: otherwise every person employed abroad by a British employer would be able to claim. They too have no where else to go. A British national locally engaged to work in the British Embassy in Rome would be protected: yet Lord Hoffmann had no doubt that Bryant v Foreign and Commonwealth Office (unreported) 10 March 2003 was rightly decided (para 39). The question is whether Parliament intended that they should have the extra protection afforded to employees who are based in this country. It is not necessary for us to decide the point for the purpose of the questions of European Union law which were put before us in this appeal. However, we have been told that the point is still relevant for the purpose of unfair dismissal claims based upon other grounds. Accordingly we intend to reserve our decision upon the cross appeal to a later date. Conclusion I would therefore allow the Secretary of States appeal and hold that it was objectively justified to employ these teachers on the current fixed term contracts and accordingly that these were not converted into permanent contracts by the operation of regulation 8 of the Fixed term Regulations. LORD MANCE I agree with Lady Hale that this appeal should be allowed on the principal issue for the reasons she gives. I also agree with her view on the remedies issue and that our decision on the cross appeal should be reserved. LORD COLLINS I also agree with Lady Hale that this appeal should be allowed on the main issue for the reasons she gives. I would prefer to express no view on the very interesting and difficult questions which arise on the remedies issue and reserve our decision on the cross appeal. I agree with Lady Hale that the appeal should be allowed on the principal issue LORD CLARKE Hilary Term [2011] UKSC 36 On appeal from: [2009] EWCA Civ 1355 JUDGMENT Duncombe and others (Respondents) v Secretary of State for Children, Schools and Families (Appellant) (no. 2) before Lord Rodger Lady Hale Lord Mance Lord Collins Lord Clarke JUDGMENT GIVEN ON 15 July 2011 Heard on 17 and 18 January 2011 Appellant Jonathan Crow QC Maya Lester (Instructed by Treasury Solicitors) Respondents Nigel Giffin QC Katherine Eddy Simon Henthorn (Instructed by Reynolds Porter Chamberlain LLP) LADY HALE, DELIVERING THE JUDGMENT OF THE COURT 1. This is the judgment of the court, composed of Lady Hale, Lord Mance, Lord Clarke and Lord Collins. Lord Rodger of Earlsferry presided over the panel which heard this case on 17 and 18 January 2011 and took part in our deliberations and decision upon the appeal: [2011] UKSC 14. His sudden illness and untimely death have sadly prevented him from taking any part in our deliberations and decision upon the cross appeal. 2. The case relates to the unusual employment status of teachers employed by the Secretary of State for Children, Schools and Families to work in the European Schools. The main issue in the appeal was whether the terms of that employment fell foul of the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) which implemented Council Directive 1999/70/EC concerning the framework agreement on fixed term work concluded by ETUC, UNICE and CEEP. This Court handed down judgment on 30 March 2011 allowing the appeal of the Secretary of State on that issue: [2011] UKSC 14. We reserved judgment in the cross appeal of the teachers. The issue in the cross appeal is whether their employment is covered by the protection against unfair dismissal conferred by section 94(1) of the Employment Rights Act 1996. 3. It is fair to say that had this issue stood alone it is unlikely that permission would have been given to bring an appeal to this Court. It is common ground that the basic principle was laid down by the House of Lords in Lawson v Serco Ltd [2006] UKHL 3, [2006] ICR 250. It is also common ground that these teachers employment does not fall within either of the specific examples given in Lawson of people employed by British employers to work outside Great Britain who would be protected from unfair dismissal. The question is whether there are other examples of the principle, of which this is one. 4. There were three cases heard together in Lawson v Serco. Mr Lawson was employed by Serco as a security supervisor at the British RAF base on Ascension Island, which is a dependency of the British Overseas Territory of St Helena. Mr Botham was employed as a youth worker at various Ministry of Defence establishments in Germany; under the NATO Status of Forces Agreement of 1951 he was part of the civil component of British Forces in Germany and treated as resident in the UK for various purposes. Mr Crofts was a pilot employed by a company which was a wholly owned subsidiary of, and provided aircrew for, Cathay Pacific Airways Ltd, the Hong Kong airline; but he was based at Heathrow under the airlines permanent basings policy. 5. Section 94(1) of the Employment Rights Act 1996, which grants employees the right not to be unfairly dismissed, no longer contains any geographical limitation. Parliament had repealed the previous exclusion of employees (mariners working on British ships apart) who ordinarily worked outside Great Britain in 1999 and put nothing in its place. But it was agreed that section 94(1) could not apply to all employment anywhere in the world. But to what did it apply? Lord Hoffmann, with whom all the other members of the appellate committee agreed, emphasised that this was a question of law (para 34), and that it was a matter of applying a principle rather than inventing a rule (para 23). The standard, normal or paradigm case was an employee working in Great Britain at the time of the dismissal (paras 25, 27). Also covered were peripatetic employees who might spend much of their time outside Great Britain but were nevertheless based here (para 30). 6. The problem of expatriate employees, who worked or were based abroad, was more difficult (para 35). Lord Hoffmann agreed with counsel for the Ministry of Defence that it might well be correct to describe the cases in which section 94(1) could exceptionally apply to employees working outside Great Britain as those where despite the workplace being abroad, there are other relevant factors so powerful that the employment relationship has a closer connection with Great Britain than with the foreign country where the employee works. But like many accurate statements, it is framed in terms too general to be of practical help. So he tried to identify the characteristics which such an exceptional case would ordinarily have (para 36). First, it would be very unlikely that the right would apply unless the employee was working for an employer who was based here; but many British companies carry on businesses in other countries, so something more would be needed (para 37). The something more might be that the employee was posted abroad for the purpose of a business carried on in Great Britain, such as the foreign correspondent of a British newspaper (para 38). Another example was an employee working within what amounts for practical purposes to an extra territorial British enclave in a foreign country (para 39). There might be other examples, but he could not think of any, and they would have to have equally strong connections with Great Britain and British employment law (para 40). 7. According to these principles, all three employees in Lawson v Serco were covered by the legislation: Mr Crofts because he was based in Great Britain, and both Mr Botham and Mr Lawson because they were working for British employers in what amounted to a British enclave. In the latter two cases, although there was a local system of law the connection between the employment relationship and the United Kingdom was overwhelmingly stronger (para 39). On the other hand, he had no doubt that Bryant v Foreign and Commonwealth Office, unreported, 10 March 2003, was correctly decided: there the Employment Appeal Tribunal held that section 94(1) did not apply to a person (who happened to be a British national) locally engaged to work in the British embassy in Rome (para 39). 8. It is therefore clear that the right will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is a mistake to try and torture the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the application of the general principle. 9. The Employment Tribunal rightly held that neither of Lord Hoffmanns specific examples applied to teachers employed by the British Government to work in European Schools abroad. The Tribunal thought that their employment was much more firmly rooted in the European Schools than in Great Britain. However, the teachers argument is that, although their actual work might have strong connections with the particular school in which they were employed, their employment relationship had virtually no connection with the system of law in the country in which that particular school happened to be. They were not employed in a British enclave but they were employed in an international enclave. There is no applicable international system of employment law to which they can turn. In this respect they are very similar to Mr Lawson and Mr Botham, where there was a local system of law, but the connection between the employment relationship and the United Kingdom was overwhelmingly stronger. 10. The teachers also draw attention to the similarities between their case and that of Mrs Wallis and Mrs Grocott: see Ministry of Defence v Wallis and Grocott [2011] EWCA Civ 231. This case is of interest, first, because of the agreed statement of facts between the Ministry of Defence and the claimants, which was relied upon by the employment judge; and second, because on facts very similar to the present case, the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal reached a different conclusion. 11. Mrs Wallis was employed by the Ministry of Defence as a library assistant at the international school attached to the Supreme Headquarters Allied Powers Europe (SHAPE) in Belgium. Mrs Grocott was employed by the Ministry of Defence as a school secretary in the British section of the Armed Forces North International School attached to the Joint Forces Command (JFC) in the Netherlands. Both SHAPE and JFC are entities within the structure of NATO. The claimants were recruited to these jobs because they were the wives of armed forces personnel working at SHAPE and JFC. Both were dismissed from their jobs when their husbands left the British armed forces (although they continued to work for NATO at SHAPE and JFC respectively in a civilian capacity). According to the agreed statement of facts in the case, the Ministry of Defence regards it as desirable for the harmony of the family life of those engaged in the forces, or the civilian component accompanying them, that there are employment opportunities open to their spouses and other dependants and so actively tries to recruit them. Their contracts of employment are governed by English law and the Ministry of Defence goes to considerable lengths to reassure such employees that their terms and conditions are essentially English. They pay neither British nor local taxes, but do pay British national insurance contributions. These employees are in a different category from directly employed labour. The latter are employees engaged locally with the help of the host state, who are engaged on local (host state) labour terms, regardless of their nationality, and pay local taxes. 12. The employment judge rightly rejected the argument that the women were working within a British enclave. Rather, they were working within an international enclave. But their employment was so closely connected to England as to be within section 94(1) of the Employment Rights Act 1996. They were piggy backed by their husbands into the same terms and conditions as employees of the British armed forces posted to serve abroad, who undoubtedly fall within the Botham exception. They were thus in a quite different position from the locally engaged directly employed labour such as Mrs Bryant: Mrs Bryants connection with England was just the fortuitous one of nationality in what would otherwise be a standard case of directly employed labour. 13. That reasoning was described as unimpeachable by Underhill J in the Employment Appeal Tribunal and accepted by the Court of Appeal. Elias LJ said this: They were the spouses of persons who formed part of a British contingent working in an international enclave, and they obtained their employment only because of that relationship. In my judgment they have equally strong connections with Great Britain and British employment law as those employed in British enclaves abroad (para 46). Mummery LJ also rejected the Ministry of Defence submission that this would be to export British unfair dismissal law to a foreign country and contrary to the principles of sovereignty and equality of states in international law: Considerations of international comity could not possibly affect the claimants husbands access to an employment tribunal for unfair dismissal from the armed forces and I do not see how they could affect claims by the claimants if there is a sufficiently strong connection of their employment to Great Britain and its unfair dismissal law (para 35). 14. The teachers in this case point out that they too have been recruited to work in an international enclave and have even stronger links with Britain and British employment law. They have not been recruited simply because they are the dependants of British personnel posted abroad, but as British public servants to be posted abroad. Furthermore, although they were not being employed abroad for the purpose of a British undertaking conducted here, nor were they being employed for the purpose of a foreign branch of a British undertaking, they were being employed to fulfil the obligations which the United Kingdom government had undertaken to other European Union states under the Statute of the European Schools. 15. In this case, the Secretary of State was content simply to argue that it fell within neither of the cases identified as exceptional in Lawson v Serco: the teachers worked entirely overseas in a sui generis international establishment and this was not a strong enough connection with Great Britain and its employment law. The Court of Appeal had been right to defer to the judgment of the specialist Employment Tribunal. In applying for permission to appeal in the case of Wallis and Grocott, the Ministry of Defence argues that aspects of the employees personal lives have been wrongly labelled employment factors, so as to supply the necessary connection between the employment and British employment law, and that the decision fails to respect the employment laws of the countries in which the women were employed. The Ministry also makes some in terrorem arguments about the potential consequences of adding these further examples to those in Lawson v Serco. 16. In our view, these cases do form another example of an exceptional case where the employment has such an overwhelmingly closer connection with Britain and with British employment law than with any other system of law that it is right to conclude that Parliament must have intended that the employees should enjoy protection from unfair dismissal. This depends upon a combination of factors. First, as a sine qua non, their employer was based in Britain; and not just based here but the Government of the United Kingdom. This is the closest connection with Great Britain that any employer can have, for it cannot be based anywhere else. Second, they were employed under contracts governed by English law; the terms and conditions were either entirely those of English law or a combination of those of English law and the international institutions for which they worked. Although this factor is not mentioned in Lawson v Serco, it must be relevant to the expectation of each party as to the protection which the employees would enjoy. The law of unfair dismissal does not form part of the contractual terms and conditions of employment, but it was devised by Parliament in order to fill a well known gap in the protection offered by the common law to those whose contracts of employment were ended. Third, they were employed in international enclaves, having no particular connection with the countries in which they happened to be situated and governed by international agreements between the participating states. They did not pay local taxes. The teachers were there because of commitments undertaken by the British government; the husbands, in Wallis and Grocott, were there because of commitments undertaken by the British government; and the wives were there because the British government thought it beneficial to its own undertaking to maximise the employment opportunities of their husbands dependants. Fourth, it would be anomalous if a teacher who happened to be employed by the British government to work in the European School in England were to enjoy different protection from the teachers who happened to be employed to work in the same sort of school in other countries; just as it would be anomalous if wives employed to work for the British government precisely because their husbands were so employed, and sacked because their husbands ceased to be so employed, would be denied the protection which their husbands would have enjoyed. 17. This very special combination of factors, and in particular the second and third, distinguishes these employees from the directly employed labour of which Mrs Bryant was an example. There, the closer analogy was with a British, or indeed any other company, operating a business in a foreign country and employing local people to work there. These people are employed under local labour laws and pay local taxes. They do not expect to enjoy the same protection as an employee working in Great Britain, although they do expect to enjoy the same protection as an employee working in the country where they work. They do, in fact, have somewhere else to go. (It would indeed be contrary to the comity of nations for us to assume that our protection is better than any others.) To admit the cases before us as another example of the principle laid down in Lawson v Serco is scarcely to extend those exceptional cases very far or to offend against the sovereignty and equality of nations. 18. For those reasons, the cross appeal is allowed and the case will return to the Employment Tribunal. It follows that the application of the Ministry of Defence for permission to appeal on this point in the cases of Wallis and Grocott will be dismissed. for the reasons she has given.

This appeal is concerned with the employment, by the Secretary of State for Children, Schools and Families, of teachers to work in the European Schools. These are schools set up to provide a distinctively European education principally for the children of officials and employees of the European Communities. The Staff Regulations, made by the Board of Governors pursuant to the Convention defining the Statute of the European Schools, limit the period for which teachers may be seconded to work in those schools to a total of nine years (or exceptionally ten). This is made up of an initial probationary period of two years, and a further period of three years, which is renewable for a further four years (the nine year rule). The principal question in the appeal is whether these arrangements can be objectively justified, as required by the Fixed term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034) (the Fixed term Regulations). This was the measure chosen by the United Kingdom to implement Council Directive 1999/70/EC concerning the framework agreement on fixed term work (the Fixed term Directive). The effect of regulation 8 is that a successive fixed term contract is turned into a permanent employment unless the use of such a contract can be objectively justified. Mr Fletcher was employed by the Secretary of State and seconded to work in the European School in Culham, Oxfordshire, from 1 September 1998 until 31 August 2008. After his two year probationary period, he was employed for a further three year period, extended for a further four years, and then an additional one year. In 2007, he claimed that he was a permanent employee by virtue of regulation 8. Mr Duncombe was a teacher at the European School in Karlsruhe, Germany, from January 1996 until 31 August 2006. He too was employed under a series of fixed term contracts to reflect the nine year rule. He brought claims in the Employment Tribunal for wrongful dismissal or pay in lieu of notice, unfair dismissal and a declaration that he was a permanent employee. The Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal all held that the use of the successive fixed term contracts is not objectively justified. The Supreme Court unanimously allows the appeal, holding that it was objectively justified to employ these teachers on the current fixed term contracts and accordingly that these were not converted into permanent contracts by the operation of regulation 8 of the Fixed term Regulations. Lady Hale gives the leading judgment. The teachers complaint is not against the three or four periods comprised in the nine year rule but against the nine year rule itself. In other words, they are complaining about the fixed term nature of their employment rather than about the use of the successive fixed term contracts which make it up. But that is not the target against which either the Fixed term Directive or the Regulations are aimed. Employing people on single fixed term contracts does not offend against either the Directive or the Regulations. [23] The targets against which the Directive and Framework Agreement were directed were discrimination against workers on fixed term contracts and abuse of successive fixed term contracts in what was in reality an indefinite employment. It is not suggested that the terms and conditions on which the teachers were employed during their nine year terms were less favourable than those of comparable teachers on indefinite contracts. [24] It is not the nine year rule which requires to be justified, but the use of the latest fixed term contract bringing the total period up to nine years. And that can readily be justified by the existence of the nine year rule. The teachers were employed to do a particular job which could only last for nine years. The Secretary of State could not foist those teachers on the schools for a longer period, no matter how unjustifiable either he or the employment tribunals of this country thought the rule to be. The teachers were not employed to do any alternative work because there was none available for them to do. [25] It is not a question of whether the Staff Regulations trump the Directive. There is no inconsistency between them. The Staff Regulations are dealing with the duration of secondment, not with the duration of employment. [26]

Cigarettes attract smokers, smugglers and thieves. In the two appeals now before the court, one container load was allegedly hi-jacked in Belgium en route between Switzerland and The Netherlands in September 2011, while another allegedly lost 756 of its original 1386 cartons while parked overnight contrary to express instructions near Copenhagen en route between Hungary and Vallensbaek, Denmark. The consignors are claiming against English main contractors who undertook responsibility for the carriage and against sub-contractors in whose hands the cigarettes were when the alleged losses occurred. The carriage was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR), given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965. Although the Act only incorporates the English language version, CMR was agreed at an international level in English and French, each text being equally authentic. Lord Wilberforce said this about the proper approach to its interpretation in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978] AC 141, 152D-F: I think that the correct approach is to interpret the English text, which after all is likely to be used by many others than British businessmen, in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation: Stag Line Ltd v Foscolo, Mango and Co Ltd[1932] AC 328, per Lord Macmillan, at p 350. Moreover, it is perfectly legitimate in my opinion to look for assistance, if assistance is needed, to the French text. This is often put in the form that resort may be had to the foreign text if (and only if) the English text is ambiguous, but I think this states the rule too technically. As Lord Diplock recently said in this House the inherent flexibility of the English (and, one may add, any) language may make it necessary for the interpreter to have recourse to a variety of aids: Carter v Bradbeer [1975] 1 WLR 1204, 1206. There is no need to impose a preliminary test of ambiguity. It appears that some 55 states have ratified, or acceded or succeeded to participation in CMR, of which half are states not members of the European Union, including states as wide-spread as Azerbaijan, Kazakhstan, Kyrgystan, Jordan, Mongolia, Moldova, Morocco, Syria, Tajikistan, the former Yugoslav Republic of Macedonia and Uzbekistan. There is no international court to which national courts may refer issues of interpretation of CMR. The present appeals each involve the issue whether the consignors can found jurisdiction in England not only against the main contractors but also against sub- contractors as successive carriers within the meaning of CMR, by relying on the presence here of, and the proceedings brought against, the main contractors and/or upon a provision in the main contract for English jurisdiction. The goods had a high value, put in the case of the first container at 624,000 plus 2.9m duty and/or taxes demanded by Belgian Customs, and in the case of the cartons missing from the second container at 30,000 plus over 500,000m duty and/or taxes. English law and English jurisdiction are said to offer the advantage that such duty and/or taxes are recoverable in a CMR claim against carriers, which is not the case in some other jurisdictions. Joinder of all carriers in English proceedings is said to have the advantage that it will ensure that all parties concerned and their witnesses will be involved in the same proceedings, in which the consignors intend to seek to establish wilful misconduct, so preventing any carrier liable from availing itself of the limit of liability otherwise provided under Chapter IV of CMR (see articles 23 and 29). In a clearly reasoned judgment, given on 23 March 2012 within a week of the hearing before him, the judge (Cooke J) held that the consignors could not succeed in doing this, and set aside the proceedings against the sub-contractors: [2010] EWHC 694 (Comm); [2013] 1 WLR 397. The Court of Appeal (McFarlane LJ, Sir Bernard Rix and Sir Timothy Lloyd) heard argument over two days on 5-6 February 2013, and in a detailed judgment given by Sir Bernard Rix on 30 October 2013 reached the opposite conclusion: [2013] EWCA Civ 1319; [2014] 1 WLR 4526. The matter now comes to this court with our permission. The circumstances in greater detail The two consignors were companies in the British American Tobacco group. They are respondents on the appeal and have been referred to together as BAT. The transport of the container loads took place under a framework agreement made by British American Tobacco (Supply Chain WE) Ltd (BAT SCWE) and a local agreement made by British American Tobacco (Holdings) Ltd (BAT Holdings) with the first defendants Exel Europe Ltd (Exel), who have played no part on these appeals. The appellants are in the first appeal H Essers Security Logistics BV (Essers Security) and H Essers Transport Co Nederland BV (Essers Transport), referred to collectively as Essers, and in the second appeal Kazemier Transport BV (Kazemier). All the appellants are ordinarily resident in and have their principal place of business in the Netherlands. Essers Security was engaged by Exel to carry the first container, and maintains that it in turn engaged Essers Transport to do this. Kazemier was engaged by Exel to carry the second container. Two CMR consignment notes are before the court. In relation to the first container, we have the consignors copy issued in Switzerland on 2 September 2011, showing the relevant BAT company as consignor and Maersk Shipping Lines as intended consignee and signed simply by Essers as carriers. In relation to the second container, we have the carriers copy issued in Hungary on 15 September 2011 showing the relevant BAT company as consignor, an associated Danish company as consignee and Kazemier as carrier. It is signed by a chauffeur, presumably Kazemiers driver, and, on receipt of the container at destination on 20 September 2011, by the Danish company with a notation regarding the missing cartons. The common ground about the CMR position There is much common ground between the parties. First, the two BAT companies who are consignors have been treated as parties to the framework and/or local agreement, each of which provides that it is governed by English law, and that each party irrevocably submits to the exclusive jurisdiction of the English courts in relation to all matters arising out of or in connection with it. I note in parenthesis that the sub-contracts made by Exel with respectively Essers Security and Kazemier also contained identical provisions, regarding choice of law and court. Second, the arrangements between each BAT consignor and Exel constituted a contract for carriage by Exel within the meaning of CMR. Third, under the provisions of Chapter VI of the Convention relating to carriage performed by successive carriers, Exel was the first carrier, while one or other of the Essers companies was the last carrier and the carrier performing the carriage at the time of the loss of the first container, and Kazemier was the last carrier and the carrier performing the carriage at the time of the loss of the second container. Chapter VI of the Convention commences with article 34, providing: If carriage governed by a single contract is performed by successive road carriers, each of them shall be responsible for the performance of the whole operation, the second carrier and each succeeding carrier becoming a party to the contract of carriage, under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. In the French version (equally authentic at an international level), that reads: Si un transport rgi par un contrat unique est execut par des transporteurs routiers successifs, chacun de ceux-ci assume la responsabilit de excution du transport total, le second transporteur et chacun des transporteurs suivants devenant, de par leur acceptation de la marchandise et de la lettre de voiture, parties au contrat, aux conditions de la lettre de voiture. Article 35 gives a further indication as to how this system is envisaged as working. It provides: 1. A carrier accepting the goods from a previous carrier shall give the latter a dated and signed receipt. He shall enter his name and address on the second copy of the consignment note. Where applicable, he shall enter on the second copy of the consignment note and on the receipt reservations of the kind provided for in article 8, paragraph 2. 2. The provisions of article 9 shall apply to the relations between successive carriers. The common ground between the parties in the present case involves necessarily their acceptance that one or other of the Essers companies in the case of the first container and Kazemier in the case of the second was a successive carrier within article 34. In this connection, the present parties are content to proceed on the basis, said in Professor Malcolm Clarkes work International Carriage of Goods by Road: CMR, 6th ed (2014), para 50a(i) to be disputed but accepted by both Donaldson J and the Court of Appeal in Ulster-Swift v Taunton Meat Haulage [1975] 2 Lloyds Rep 502, 507 and [1977] 1 Lloyds Rep 346, 358-361 and by other national courts, that, where (as here) a company contracts to carry goods, but sub- contracts the whole performance, the first company is for CMR purposes the first carrier, while the second becomes a successive carrier. Further, although article 4 of CMR provides that The contract of carriage shall be confirmed by the making out of a consignment note, it continues by saying that The absence, irregularity or loss of the consignment note shall not affect the existence or the validity of the contract of carriage which shall remain subject to the provisions of this Convention. However, article 34 provides that a second or succeeding carrier only becomes a successive carrier by becoming a party to the contract of carriage, under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. At this point, therefore, it might seem that the existence of a CMR note was of importance, and Professor Loewe, in a Commentary on the Convention of 19 May 1956 on the Contract for the International Carriage of Goods by Road (CMR), prepared for the United Nations in 1975 and expressed at paragraph 16 to be based on the preparatory work, on personal notes and recollections of the negotiations, and on the logic and spirit of the Convention itself, indicates at paragraph 275 that the language of article 34 was directed to ensuring that successive carriers were made aware through the consignment note that the carriage which they were undertaking (perhaps only for one part, and possibly even within only one countrys territory) was international carriage subject to the provisions of CMR. There appears in the present cases at least a real possibility that the two CMR consignment notes only came into existence at the time when the relevant Essers company and Kazemier collected the respective consignments and signed the relevant CMR consignment notes. Whether article 34 can apply to such a case is a point which we can however leave open, since the parties are prepared without further examination to proceed on the basis that these appeals both concern successive carriage, by the relevant Essers company or companies and by Kazemier, within the terms of article 34. Further provisions of CMR The appeals raise a number of particular issues, to address which it is necessary to set out further provisions of CMR: CHAPTER II PERSONS FOR WHOM THE CARRIER IS RESPONSIBLE Article 3. For the purposes of this Convention the carrier shall be responsible for the acts and omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. CHAPTER III CONCLUSION AND PERFORMANCE OF THE CONTRACT OF CARRIAGE Article 4. [See above, para 12] Article 5. The consignment note shall be made out in three original copies signed by the sender and the carrier. Article 6.1. The consignment note shall contain the following particulars: (a) the date of the consignment note and the place at which it is made out; the name and address of the sender; the name and address of the carrier; the place and the date of taking over of the goods and the place designated for delivery; the name and address of the consignee; the description in common use of the nature of the goods and the method of packing, and, in the case of dangerous goods, their generally recognised description; the number of packages and their special marks and numbers; the gross weight of the goods or their quantity otherwise expressed; (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) charges relating to the carriage (carriage charges, supplementary charges, customs duties and other charges incurred from the making of the contract to the time of delivery); the requisite instructions for Customs and other formalities; a statement that the carriage is subject, notwithstanding any clause to the contrary, to the provisions of this Convention. 2 Where applicable, the consignment note shall also contain the following particulars: (a) (b) (c) (d) a statement that transhipment is not allowed; the charges which the sender undertakes to pay; the amount of cash on delivery charges; a declaration of the value of the goods and the amount representing special interest in delivery; the senders instructions to the carrier regarding insurance of the goods; the agreed time-limit within which the carriage is to be carried out; a list of the documents handed to the carrier. (e) (f) (g) 3. The parties may enter in the consignment note any other particulars which they may deem useful. Article 8.1. On taking over the goods, the carrier shall check: (a) (b) the accuracy of the statements in the consignment note as to the number of packages and their marks and numbers, and the apparent condition of the goods and their packaging. 2 Where the carrier has no reasonable means of checking the accuracy of the statements referred to in paragraph l(a) of this article, he shall enter his reservations in the consignment note together with the grounds on which they are based. He shall likewise specify the grounds for any reservations which he makes with regard to the apparent condition of the goods and their packaging. Such reservations shall not bind the sender unless he has expressly agreed to be bound by them in the consignment note. Article 9.1. The consignment note shall be prima facie evidence of the making of the contract of carriage, the conditions of the contract and the receipt of the goods by the carrier. Article 13.1. After arrival of the goods at the place designated for delivery, the consignee shall be entitled to require the carrier to deliver to him, against a receipt, the second copy of the consignment note and the goods. If the loss of the goods is established or if the goods have not arrived after the expiry of the period provided for in article 19, the consignee shall be entitled to enforce in his own name against the carrier any rights arising from the contract of carriage. CHAPTER V CLAIMS AND ACTIONS Article 30.1 [Deals with checking of the goods by the consignee] 30.2. When the condition of the goods has been duly checked by the consignee and the carrier, evidence contradicting the result of this checking shall only be admissible in the case of loss or damage which is not apparent and provided that the consignee has duly sent reservations in writing to the carrier within seven days, Sundays and public holidays excepted, from the date of checking. 3 No compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within 21 days from the time that the goods were placed at the disposal of the consignee. 5 The carrier and the consignee shall give each other every reasonable facility for making the requisite investigations and checks. Article 31.1 1. In legal proceedings arising out of carriage under this Convention, the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties and in addition, in the courts or tribunals of a country within whose territory (a) the defendant is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made, or the place where the goods were taken over by the carrier or the place designated for delivery is situated, (b) and in no other courts or tribunals. 2 Where in respect of a claim referred to in paragraph 1 of this article an action is pending before a court or tribunal competent under that paragraph, or where in respect of such a claim a judgment has been entered by such a court or tribunal no new action shall be started between the same parties on the same grounds unless the judgment of the court or tribunal before which the first action was brought is not enforceable in the country in which the fresh proceedings are brought. Article 32: The period of limitation for an action arising out of carriage under this Convention shall be one year. Nevertheless, in the case of wilful misconduct, or such default as in accordance with the law of the court or tribunal seised of the case, is considered as equivalent to wilful misconduct, the period of limitation shall be three years. Article 33. The contract of carriage may contain a clause conferring competence on an arbitration tribunal if the clause conferring competence on the tribunal provides that the tribunal shall apply this Convention. CHAPTER VI PROVISIONS RELATING TO CARRIAGE PERFORMED BY SUCCESSIVE CARRIERS Articles 34 and 35 [See above, paras 10 and 11] Article 36. Except in the case of a counter-claim or a set-off raised in an action concerning a claim based on the same contract of carriage, legal proceedings in respect of liability for loss, damage or delay may only be brought against the first carrier, the last carrier or the carrier who was performing that portion of the carriage during which the event causing the loss, damage or delay occurred; an action may be brought at the same time against several of these carriers. Article 37. A carrier who has paid compensation in compliance with the provisions of this Convention, shall be entitled to recover such compensation, together with interest thereon and all costs and expenses incurred by reason of the claim, from the other carriers who have taken part in the carriage, subject to the following provisions: the carrier responsible for the loss or damage shall be solely liable for the compensation whether paid by himself or by another carrier; (a) (b) when the loss or damage has been caused by the action of two or more carriers, each of them shall pay an amount proportionate to his share of liability; should it be impossible to apportion the liability, each carrier shall be liable in proportion to the share of the payment for the carriage which is due to him; if it cannot be ascertained to which carriers liability is attributable for the loss or damage, the amount of the compensation shall be apportioned between all the carriers as laid down in (b) above. (c) Article 38. If one of the carriers is insolvent, the share of the compensation due from him and unpaid by him shall be divided among the other carriers in proportion to the share of the payment for the carriage due to them. Article 39.1. No carrier against whom a claim is made under articles 37 and 38 shall be entitled to dispute the validity of the payment made by the carrier making the claim if the amount of the compensation was determined by judicial authority after the first mentioned carrier had been given due notice of the proceedings and afforded an opportunity of entering an appearance. 2 A carrier wishing to take proceedings to enforce his right of recovery may make his claim before the competent court or tribunal of the country in which one of the carriers concerned is ordinarily resident, or has his principal place of business or the branch or agency through which the contract of carriage was made. All the carriers concerned may be made defendants in the same action. The issues The following particular issues arise: (i) First, can article 31 and 36 be read together, so that, once a claimant has established jurisdiction against one defendant under article 31.1(a), it can then bring into that jurisdiction any other successive carrier potentially liable under article 36? (ii) Second, is it under article 31 sufficient to enable the BAT companies to sue Essers and Kazemier as successive carriers in England that the English courts were designated by agreement in the carriage contracts made between such BAT companies and Exel? (iii) Third, can the BAT companies sue Essers and Kazemier in the English courts, on the basis that the branch or agency through which the contract of carriage was made was in England? (iv) Fourth, do the provisions or principles of the Brussels I Convention on Civil Jurisdiction and Judgments, Council Regulation (EC) No 44/2001 of 22 December 2000 (OJ 2001 L12, p 1) either enable jurisdiction to be established over Essers and Kazemier or inform or dictate the answer to any of the previous questions? The answers to the first three questions all require a proper understanding of the significance of article 31, in a context where there are successive carriers. Each side has also submitted that the fourth question may bear on jurisdiction generally or at least on the first two questions. I will therefore start by outlining how they have submitted that this may be so. Article 6(1) of the Brussels Regulation provides: A person domiciled in a member state may also be sued: where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings; A similar provision exists, of course, in a non-Union context in Practice Direction 6B para 3.1(3) governing the heads of English and Welsh jurisdiction. BAT submit that this reflects a principle of general international acceptance that should inform the interpretation of articles 31 and 36 of CMR, and so the answer to the first question. Alternatively, they submit that, if CMR has otherwise no like provision, there is a lacuna, which falls to be filled by article 6(1) of the Brussels Regulation. In Frans Maas Logistics (UK) Ltd v CDR Trucking BV [1999] 1 All ER (Comm) 737; [1999] 2 Lloyds Rep 179, Colman J held article 31.2 of CMR to be limited to proceedings brought by same claimant against the same defendant, and that, on that basis, the lis pendens provisions of articles 21 and 22 of the Brussels Convention should be applied to preclude a mirror image claim in England raising the same issues, but with the parties positions as claimant and defendant reversed, to those raised in prior Dutch proceedings. Colman Js decision limiting article 31.2 to claims by the same claimant against the same defendant was overruled by the Court of Appeal in Andrea Merzario Ltd v Internationale Spedition Leitner Gesellschaft GmbH [2001] 1 AER (Comm) 883; [2001] 1 Lloyds Rep 490, though this does not of itself necessarily mean that Colman J was wrong to identify as a possibility gap- filling, by reference to for example article 22 of the Brussels Regulation. As to the second question, Essers and Kazemier rely on the principle, which I have no difficulty in accepting, that jurisdiction clauses generally derive their validity from agreement between the parties (or their privies). This principle is clearly enshrined in article 25 of the recast Brussels Regulation ((EU) No 1215/2012 of 12 December 2012) (OJ 2012 L351, p 1): 1. If the parties, regardless of their domicile, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that member state. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either: (a) (b) in writing or evidenced in writing; in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned. Accordingly, Essers and Kazemier submit that, in so far as the BAT companies seek to rely against them upon jurisdiction clauses which were contained in the contract between BAT and Exel and to which they did not agree, CMR cannot and should not be interpreted as binding them by such clauses. The fact that, as it happened, the sub-contracts made by Exel with Essers Security and Kazemier were also subject to English choice of law and court clauses must, I accept, be legally irrelevant in this connection, however much it might be thought to diminish the attractiveness in non- legal terms of Essers and Kazemiers position. In the further alternative, BAT submit that, if CMR positively precludes the recognition or application of article 6(1) or of a similar principle, then CMR would lead to results which are less favourable for achieving sound operation of the internal market than those resulting from the provisions of the Brussels Regulation, and in particular inconsistent with observance of the aim of minimising the risk of concurrent proceedings which is one of the objectives and principles which underlie judicial cooperation in civil and commercial matters in the European Union, and that its provisions must to that extent be over-ridden by the provisions of, or the principle behind, article 6(1). The quotations are from the Court of Justices judgments in Nipponkoa Insurance Co (Europe) Ltd v Inter-Zuid Transport BV (DTC Surhuisterveen BV intervening) (Case C-452/12) EU:C:2013:858; [2014] 1 All ER (Comm) 288, paras 37 and 44; see also TNT Express Nederland BV v Axa Versicherung AG (Case C-533/08) EU:C:2010:243; [2011] RTR 136, paras 51 and 53. Article 31.1 general I turn to consider article 31.1. A significant element of the Court of Appeals reasoning was that, looking at the overall structure of CMR, article 31 was primarily concerned only with, on the one side, cargo interests in the form of the sender or consignee, and, on the other side, the carrier and [p]rima facie, therefore, in its place, is not addressed to the position of a successive carrier, who only becomes a party to the single contract of carriage by accepting the goods and the consignment note (article 34) under what has been called a special statutory contract (para 61). On that basis, the Court of Appeal approached article 31 as not addressing the possibility of multiple carrier defendants, successive carriers being only introduced in the later Chapter VI (para 62). Article 31.1 thus balanced the interests of cargo interests and the original CMR carrier, by providing in paragraph (a) for jurisdictions looking to the interests of defendants and in paragraph (b) for jurisdictions looking to the interests of claimants (para 63). The Court of Appeals approach in this regard led into its view that it was natural to treat the last sentence of article 36 as a further jurisdictional provision directed to the position of successive carriers who had only been introduced in article 34. The difficulty I have with this approach is that, firstly, CMR must have been conceived as a whole and cannot be read as a series of sequential provisions, each unconscious of what was to follow. Even the Court of Appeals use of words primarily and prima facie contain a limited recognition of that truth. Secondly, the provisions of Chapter V, including article 31, must, on analysis, apply not only to disputes arising between cargo interests and the original CMR carrier, but also to situations where a successive carrier is involved. That is clearly true of article 30, dealing with checking and time limits for making reservations. It is also true of article 32 dealing with the one-year limitation period for actions. It must also be true of the provisions regarding lis pendens, enforceability, and security for costs in paras 2-5 of article 31. Article 31.1 must equally apply and have been envisaged as covering cases of successive carriage. Mr Charles Priday in his submissions for BAT recognised this by his submission that what article 31 envisaged in such a case was that the claimant would establish jurisdiction against at least one of the relevant carriers identified in article 36 (ie the first or last carrier or the carrier performing the carriage at the time of the loss, damage of delay) whereupon the last sentence of article 36 would give jurisdiction over the other relevant carrier[s]. Mr John Passmore QCs response for Essers and Kazemier is that this analysis effectively undermines and opens up the careful scheme of article 31. Article 31.1 jurisdiction designated by agreement Rather than take the questions which the parties have identified in the order they have addressed them, I think that it is helpful to go through the various heads of jurisdiction contained in article 31 in the order in which they appear. The opening provision of article 31.1 is that the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties. It is unnecessary on these appeals to decide whether that means between the parties to the carriage contract or the parties to the litigation. But I am of the view that it should be interpreted as meaning the latter. Article 31.1 is a provision dealing with jurisdiction to bring legal proceedings. Any agreement on jurisdiction between the parties to such proceedings is one for which one would naturally expect a Convention like CMR to cater. When article 31.2 goes on to preclude any new action between the same parties, it is also referring to the parties to the litigation. On this point, therefore, I would endorse Rix LJs view in Hatzl v XL Insurance Co Ltd [2009] EWCA Civ 223, [2010] 1 WLR 470, para 64. Whatever the position in that respect, however, the opening provision of article 31.1 clearly applies as between BAT and Exel. It provides one ground of jurisdiction for suing Exel in England (at least one other being, under paragraph (a), that Exels principal place of business is here). The words and, in addition in article 31 qualify the operation of the jurisdiction clause agreed between BAT and Exel only to the extent that the clause is not under CMR exclusive. So BAT could, if they had wished, have sued in one of the other jurisdictions provided by paragraphs (a) and (b) of article 31.1. But it is common ground that they were as against Exel entitled to take advantage of the English jurisdiction clause. Since it is also common ground on these appeals that Essers Security and/or Essers Transport in respect of the first container and Kazemier in respect of the second were successive carriers, it follows that they must, under article 34, have become party to the respective contract or contracts of carriage made between BAT and Exel. If the matter stopped there, that would on the face of it mean party to those contracts whatever their terms. But article 34 qualifies the position, by adding that a successive carrier becomes party to the contract of carriage under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note, or in French becomes par leur acceptation de la marchandise et de la lettre de voiture, parties au contrat, aux conditions de la lettre de voiture. These references to the terms or conditions of the consignment note are general. They clearly refer to something different from any reservations which the first carrier may have entered regarding the number, marks, numbers, condition or packaging of the goods taken over under article 8.1, or which a successive carrier may have entered on his acceptance of the goods under article 35.1. Such reservations are not terms or conditions by which anyone is bound. Equally, since the consignment note is intended to confirm the contract of carriage (article 4) and is prima facie evidence of both its making and its conditions (article 9.1), it is difficult to understand the purpose of the reference to terms or conditions in article 34, unless it is intended to mean that a successive carrier is bound by the original contract in so far as its terms or conditions are set out in the consignment note. CMR in a number of places refers to carriage, liability or conduct under the terms of or in accordance with a Convention, contract, article or law, and these also envisage that the former will be measured or controlled by reference to the latter. Article 6 contains a full list of particulars which are required to appear in a consignment note and by their nature will disclose core terms of the main carriage contract. But neither article 6 nor the present consignment notes make mention of any choice of law or court clause or agreement. Particulars of any such clause or agreement might have been added as contemplated by article 6.3 of CMR in the boxes entitled Conventions particulires or Besondere Vereinbarungen on the consignment note. But these boxes were in each case left empty. There is of course nothing unusual about either a choice of law and court clause, or a clause providing for dispute resolution before an arbitration tribunal. Both are common enough in international trade. Article 31 contemplates that a contract of carriage may contain either, and the latter is for good measure also expressly permitted by article 33. But that does not mean that CMR necessarily intended that a successive carrier should become party to such a clause, without having any notice of it or the express opportunity to decline to carry on its terms. BAT rely on the fact that neither article 6.1 nor article 6.2 of CMR requires a CMR consignment note to state the existence of a choice of law or court clause. But that to my mind tends to confirm that the transposition of application of such a clause to the relationship between the consignor or consignee and a successive carrier depends on agreement, and here in particular upon the use of the boxes provided pursuant to article 6.3. Had it been contemplated that a successive carrier would automatically be bound by such a clause, one would have expected the existence of such a clause to have been among the particulars required by these paragraphs to appear in the consignment note for the very purpose of giving the successive carrier notice of them. That is one obvious reason why, alongside basic details relating to the parties, the carriage and the goods (including in the case of dangerous goods their generally recognised description), the consignment note is required also to include for example, a statement that the carriage is subject to CMR, and further details such as any cash on delivery charges, any special interest in delivery, and instructions regarding insurance, and any agreed time-limit for the carriage. These are all matters in relation to which a successive carrier would be expected to be bound and would accordingly need to know. A choice of court clause is, on the contrary, a particular which the parties to a consignment note (particularly the consignors as the most likely claimant against a successive carrier) might consider it appropriate to identify in the relevant box, Conventions particulires, if they wished to bind a successive carrier by it. It would fall within article 6.3. But there is no reason why they should be bound to do this. At a more fundamental level, I am now also persuaded that it would be contrary to general principle to hold a successive carrier bound by a choice of court clause, or any other contractual clause not evidenced by the consignment note, of which he had no express notice. To do so would involve an unfamiliar and undesirable invasion of the general principle that contract depends on agreement. It is true that CMR itself provides that a successive carrier becomes a party to the original carriage contract by acceptance of the goods and the consignment note. But that is the published and, by now at least, familiar scheme of CMR, which any road carrier carrying on business within the CMR states may be taken to know, and of which the consignment note is also required to give express notice. To hold a successive carrier liable by reference to terms or conditions not mentioned in the consignment note would be a quite different matter. The consignor and a first carrier may have agreed all sorts of onerous obligations by which it would be most unfair to hold a successive carrier bound. In the present case, it is alleged that Exel had been specifically instructed not to park the second container overnight. No such instruction was recorded on the consignment note. While we heard no argument on this specific point, it seems difficult to suggest that any such instruction could bind anyone contractually other than Exel. To attempt to distinguish between specific instructions of a usual and an unusual nature would, in my view, be to make bricks without straw. CMR neither contains nor hints at any such distinction. Article 34 makes the straightforward point that successive carriers take over the goods and become parties to the original contract on the terms or conditions of the consignment note. On that basis, I have ultimately reached the clear conclusion that there is no basis upon which Essers or Kazemier can have become bound by an English jurisdiction clause in the original contract or contracts to which they became party, but which was not identified in the terms or conditions of the CMR consignment note. I note that Professor Loewe takes a different view in para 282 of the paper to which I have already referred, considering that a successive carrier who on his view becomes bound by a jurisdiction clause of which he had no notice in the consignment note could bring an action for damages against the first carrier. This view is not based on any reference to negotiations preceding CMR, and is stated in simple conclusionary terms. Why and how a successive carrier could or would have any claim for damages against a first carrier, who had no duty to identify the jurisdiction clause on the consignment note, is also unexplained. Other commentators have not accepted Professor Loewes view on this point, though their reasoning varies. In Hill and Messents CMR: Contracts for the International Carriage of Goods by Road 3rd ed (2000), paras 11.37 and 11.67 take the view which I have expressed. At the same time, paras 10.27 and 10.28 suggest that a consignee may (like a privy or assignee) be bound by a jurisdiction clause, even though it is not mentioned in the consignment note. But, if that is correct (on which I need express no concluded view), it does not undermine paras 11.37 and 11.67; rather it is because under article 13 a consignee stands, without more, in the same position as the consignor with regard to the enforcement of any rights arising from the contract of carriage, and, unlike the position under article 34, there is no qualification that the consignee is only entitled or bound under the terms or conditions of the consignment note. In contrast, Professor Malcolm Clarke in his work, cited above, para 46c suggests that the designation of a court or tribunal by agreement between sender and carrier will not bind the consignee or a successive carrier unless the latter [sic] has notice of the designation. But he does so on a basis which makes no reference to the language of article 34 and relies on two French decisions: one by the Court of Appeal of Paris dated 14 November 1969, the other by the Court of Appeal of Colmar dated 26 November 2001. In the former, a French consignee suing in France was held not bound by any German jurisdiction clause, firstly because none had been proved even between the German consignor and the carrier, and secondly because the only document of a contractual nature evidencing the carriage terms which the consignee ever saw and accepted was a receipt which (it appears) made no mention of any jurisdiction clause. In the latter case, the French consignor (Amural) was claiming, firstly, against the German buyer/consignee (Neuendorf) of frozen duck fillets for withholding 15% of the invoice amount on account of the high temperature of the fillets on arrival and, secondly or alternatively, against the carriers (TAC Transports) and sub-carriers (Transport Michel) for having caused any damage. There was clearly French jurisdiction against both carriers under article 31.1(a) and (b), but there was an internal issue as to whether the Regional Court of Mulhouse had been chosen by agreement between Amural and TAC Transports or whether, failing such choice and as the court held, the Commercial Court of Meaux was the court assigned by the New French Code of Civil Procedure. Neuendorf as buyer/consignee accepted that CMR governed his relationship with Amural. This seems very strange in respect of a claim by Amural which appears to have been, as against Neuendorf, for the balance of the unpaid price of goods. But, on the basis that CMR applied, Neuendorf contended that he could only be sued in Bochum, Germany as the place where he resided and the place of delivery. This suggestion was summarily rejected by the court on the ground that article 31 conferred jurisdiction on France. As against Neuendorf, and on the apparently odd assumption that CMR regulated its sale of goods relationship with Amural, this was presumably on the basis that France was where the goods were taken over for carriage. Neither of the French cases cited by Professor Clarke seems to me therefore to offer any real guidance as to the proper approach to the application of an agreed jurisdiction clause as against a successive carrier. However, in the light of the other considerations which I have set out, and contrary to my initial reaction, I have come the clear conclusion that the qualifying phrase in article 34 has the effect that a successive carrier will not be bound by a jurisdiction clause agreed between the consignor and the first carrier unless it is identified in the consignment note (or unless of course the successive carrier binds himself to it by agreement in some other way). Article 31.1 further provisions I move accordingly to the further provisions of article 31.1. It is common ground, and in any event clearly correct, that paragraph (b) refers to the places of taking over by the carrier and designated for delivery under the CMR contract made between the consignor and the first carrier. The only caveat that may be appropriate is that, as regards a successive carrier, the position could (again in the light of article 34) be different if the CMR consignment note failed correctly to reflect the place of taking over or the place designated for delivery actually agreed between the consignor and first carrier. That, hopefully rare, case does not require further consideration here. The effect of paragraph (b) is that any carrier against whom proceedings can be brought under article 36 can be sued in either the place where the goods were taken over or the place designated for their delivery. Paragraph (a) of article 31.1 is on the other hand concerned with the position of the particular defendant under consideration, whether or not there are other co- defendants. In so far as it refers to the country where that defendant is ordinarily resident, or has his principal place of business, it is capable of applying in relation to any successive carrier, or, indeed, in the case of an action by a carrier in relation to any consignor or consignee sued by such a carrier. But the reference to the branch or agency through which the contract of carriage was made is much less obviously apt to apply as against anyone other than one of the original parties to the carriage contract, that is basically the consignor (and perhaps the consignee, if the consignor was acting as his agent) and the first carrier. Mr Priday submits that that is wrong, and that, as successive carriers, Essers and Kazemier can be regarded as having contracted through the branch or agency of Exel because Exel made the framework and local agreement with BAT, to which Essers and Kazemier became parties under article 34. That I regard as distorting the plain purpose and effect of the relevant provisions of CMR. Essers and Kazemier are as successive carriers party to the original carriage contract under the terms of the consignment note not because anyone made a contract with them through any branch or agency, but simply because CMR makes them a party by statute in consequence of their accepting the goods and the consignment note. It follows that article 31.1 contains a variety of provisions: (i) a provision enabling the enforcement of any jurisdiction clause in favour of the court or tribunal of a contracting state which was (a) agreed between the parties to the original carriage contract, or (b) to be taken, in the light of article 34, to be agreed as between the original goods interests and any successive carrier becoming party to that original contract on terms in the consignment note incorporating the jurisdiction clause, or (d) agreed in some other way between the parties to the litigation. (ii) provisions in paragraph (a) regarding ordinary residence and a principal place of business which can be relied upon as against any carrier or successive carrier liable to suit under article 36, as well as by a carrier bringing proceedings arising out of carriage under CMR against a consignor or consignee, (iii) a further provision in paragraph (a) which can only sensibly apply in (iv) proceedings between original parties to the carriage contract, further provisions in paragraph (b) which open up jurisdiction in any claim arising out of CMR carriage to cover the courts or tribunals of the place of taking over or designated for delivery of the goods. The important corollary of these provisions is that, under the final words of article 31.1, a claimant may not bring an action arising out of carriage under CMR in any other courts or tribunals. The relationship of articles 31.1, 36 and 39 BATs case is that, once jurisdiction is established over one carrier under article 31.1 in any of the jurisdictions provided by that article, then the last sentence of article 36 opens up the further possibility of joining in the same proceedings any other carrier or carriers potentially liable under article 36, even though proceedings against them, viewed by themselves, cannot be brought within article 31.1. The alternative view of the last sentence of article 36, advocated by Essers and Kazemier, is that it is there to make clear that the liability of the first, last carrier and performing carriers under article 36 is joint and several, and not alternative as might otherwise have been capable of being suggested in view of article 36s reference to proceedings being brought against the first carrier, the last carrier or the [performing] carrier. The provision that an action may be brought against several of these carriers at the same time, or in the French la fois, is on this alternative view merely confirming or emphasising that there is no need to pursue them sequentially. On BATs case, a jurisdiction clause agreed between the consignor and first carrier, but not mentioned in the CMR consignment note accepted by a successive carrier, would nonetheless enable the successive carrier to be added to the proceedings commenced against the first carrier in the court or tribunal of the place assigned by the jurisdiction clause. Likewise, the ability to rely on any of the heads of jurisdiction provided by paragraph (a) of article 31.1 as against any relevant carrier (first, last or performing) would open up the same jurisdiction against any other of such carriers in relation to whom article 31.1 would not otherwise provide any ground of jurisdiction. As BAT contend on the present appeals, the principal place of business of any carrier (even though it was outside any contracting state) would suffice to ground jurisdiction against all relevant carriers, even though it has no connection with the physical carriage. On the face of it, such extensions of the carefully delineated jurisdiction provided by article 31.1 seem unlikely to have been intended. The interests of claimants are, as the Court of Appeal observed at para 63, served by paragraph (b). That paragraph enables all carriers potentially liable under article 36 to be joined in one forum. The opening up of the heads of jurisdiction specified in article 31.1 which on BATs case follows from the last sentence of article 36 sits uneasily with the final words of article 31.1 and in no other courts or tribunals. BAT submit that the interpretation of the last sentence of article 36 which they advance brings symmetry and order to CMRs treatment of claims involving multiple defendants. In a cargo claim, jurisdiction can be achieved against all by establishing it against one. That they submit is also what article 39.2 provides. The problem with this submission is that article 39.2 states this explicitly, by providing that a carrier who has paid compensation may seek recourse by making his claim before the competent court or tribunal of the country in which one of the carriers concerned is ordinarily resident, or has his principal place of business or the branch or agency through which the contract of carriage was made and that all the carriers concerned may be made defendants in the same action. In contrast, article 31.1(a) in terms only confers jurisdiction against the individual defendant whose ordinary residence, principal place of business or branch or agency is relied upon. As to BATs submission that the last sentence of article 39.2 deals, as between carriers, with jurisdiction, and must have been seen as paralleling, also in relation to jurisdiction but here as between cargo interests and carriers, the last sentence of article 36, I do not consider that either sentence necessarily or clearly refers to jurisdiction. Both are well capable of being read as emphasising or confirming no more than that all or several carriers liable may be sued at the same time. BATs submission regarding symmetry also faces the objection that the claims covered by article 39.2 differ significantly in content and structure from those covered by article 31.1: (i) Article 31.1 does not only offer a claimant the jurisdiction of any individual defendants ordinary residence, principal place of business or branch or agency. It offers the additional advantage of jurisdiction against all carriers potentially liable under article 36 (the first, the last and the performing carriers) in the place either of taking over or designated for delivery of the goods. No such jurisdiction is available under article 39.2 to a carrier seeking recourse from another carrier. (ii) Article 39.2 concerns recourse claims which fall under articles 37 and 38 to be divided pro rata, potentially between all carriers and not just the first, last or performing carrier. This is so, having regard to the specific provisions covering cases where more than one carrier was responsible for the loss or damage, or where it cannot be ascertained who was responsible or where a carrier otherwise liable to contribute is insolvent. There is an obvious imperative under article 39.2 to enable a claimant to bring all such claims in one jurisdiction. The same imperative does not exist under article 31.1, since cargo interests are under article 36 entitled to look to any one of the relevant carriers (first, last or performing) to meet their full claim, each being liable 100%. Further, in so far as cargo interests do wish to pursue all such relevant carriers together, they are able to do so in the place either of taking over or designated for delivery as stated in point (i). BAT rely on dicta in two Court of Appeal cases: Cummins Engine Co Ltd v Davis Freight Forwarding (Hull) Ltd [1981] 1 WLR 1363 and ITT Schaub-Lorenz Vertriebsgesellschaft mbH v Birkart Johann lnternationale Spedition GmbH & Co KG [1988] 1 Lloyds Rep 487. Both cases concerned recourse claims between carriers. In Cummins, Cummins as consignor had contracted with Davis, another English company, for the carriage of engines from England to Amsterdam. Davis instructed Charterway to undertake the leg from Rotterdam to Amsterdam, and Charterway in turn asked Graaf, who asked Boers to do this. Charterway, Graaf and Boers were all Dutch firms and all successive carriers under CMR. Cummins issued a writ in England against all four, but served only Davis. Davis issued third party proceedings to join and seek recourse from Charterway, Graaf and Boers, who applied, successfully, to have the third party proceedings set aside on the basis that under article 39.2 any recourse proceedings against them could only be in Holland. But at p 1371 Brandon LJ made the following general statement regarding jurisdiction in the main proceedings: It is clear from the provisions of CMR contained in Chapters V and VI that it contemplates two kinds of legal proceedings arising out of a contract of carriage. The first kind of legal proceedings which it contemplates are actions brought by a sender or consignee of goods against one or more carriers. Where successive carriers are involved, the effect of article 31, paragraph 1, combined with article 34, is that the plaintiff can bring a single action against one, more than one, or all the carriers concerned. Article 31, paragraph 1, further requires him to bring his action in certain courts only. These courts are, first, any court of a contracting state which has been agreed between the parties; secondly, the courts of the country where any of the carriers sued is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made; and, thirdly, the courts of the place where the goods were taken over for the carriage or the place where they were to be delivered. It is on the basis of these provisions that, in the present case, Cummins issued a writ against four parties, Davis, Charterway, Graaf and Boers, although they have only served such writ on Davis. Brandon LJ went on specifically to address the recourse claims. In ITT Schaub-Lorenz, at p 494, Bingham LJ quoted the above passage and its continuation, and said that, although it could not be regarded as having more than persuasive authority, I think (with respect) that it is plainly right. Neither Cummins nor ITT Schaub-Lorenz required any precise examination of the accuracy of Brandon LJs statement that article 31.1 combined with article 34 allows a plaintiff to bring a single action against one, more than one, or all the carriers concerned in the courts of the country where any of the carriers concerned is ordinarily resident or has his principal place of business or the branch or agency through which the carriage contract was made. Further, it is unclear by what reasoning Brandon LJ derived his summary from articles 31 and 34, the only articles which he cited. Article 31.1(a) does not on any view confer jurisdiction over one carrier concerned, simply because any of the other carriers concerned is ordinarily resident or has his principal place of business or relevant branch or agency in the country where proceedings are brought. It confers jurisdiction against a carrier who has such residence, place or branch or agency. It is only the last sentence of article 36 - which Brandon LJ did not mention at all - that arguably extends this jurisdiction to enable other carriers to be added to the proceedings against the carrier defendant who satisfies article 31.1(a). Further, in Cummins at pp 1374-1375 OConnor LJ also described the scheme of CMR in terms which were, I think, both more specific on the present issue and significantly different in effect from those used by Brandon LJ. He said: It will be seen that the scheme of the Convention, starting in article 31, is that normally, unless the parties otherwise agree, any legal proceedings are to be originated in the jurisdiction of the defendant (article 31, paragraph 1(a)), and I am content, under the ordinary rules of interpretation, to read defendant for defendants. The only alternative there given is the place where the goods were taken over or the place designated for delivery. The place where the goods were taken over by the carrier, in my judgment, refers to the place where the contract of carriage commenced (see article 1 of the Convention) and cannot be repeated down the line where successive carriers have participated in the carriage at various stages. That in the present case was Scotland and the place of delivery was Holland. Therefore, Cummins were limited to bringing the action, as far as the jurisdiction of the defendant was concerned, either in England (Davis) or in Holland the other three. It is clear from this passage that OConnor LJ did not accept that Cummins could under CMR properly bring English proceedings against any defendant other than Davis, which alone fell within article 31.1(a). That corresponds with the case advanced by Essers and Kazemier on these appeals. Academic commentary also supports Essers and Kazemiers position on this point: see Professor Loewes paper, para 281, Hill & Messent, para 11.67 and KF Haak in The Liability of the Carrier under the CMR (Stichting Vervoeradres The Hague 1986), p 114, para 2, where the requirement to bring each successive carrier held liable under article 36 within the scope of article 31.1 is explained as a practical restriction on the severity of the joint and several liability imposed by the last sentence of article 36 on, in particular, the last carrier. The desirability of joining all possible defendants This brings me to a fundamental element of BATs case, the desirability of, and suggested imperative to arrive at, an interpretation or solution enabling all claims by goods interests against all carriers to be resolved in one place and one set of proceedings. That this can be a relevant approach is certainly borne out by article 6(1) of the Brussels Regulation, as well as, domestically, by Practice Direction 6B para 3.1(3): see para 16 above. But it is not an invariable approach, and it is not the approach taken in the Warsaw Convention 1929 (for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12 October 1929), the language of which the relevant provisions of CMR to a large degree reflect. The Warsaw Convention provided: Article 28.1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination. Article 30.1. In the case of carriage to be performed by various successive carriers and falling within the definition set out in the third paragraph of article 1, each carrier who accepts passengers, luggage or goods is subjected to the rules set out in this Convention, and is deemed to be one of the contracting parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under his supervision. 3 As regards luggage or goods, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier who performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee. Under the Warsaw Convention, it is clear that article 28 defines jurisdiction, while the last sentence of article 30.3 deals, like the rest of that article, with liability by emphasising that all potentially liable carriers are jointly and severally liable for loss, damage or delay in respect of goods and luggage. CMR rephrases the last sentence of article 36, but not in a way which suggests that it is now intended to have the fundamentally different purpose of addressing not liability (like the rest of article 36), but jurisdiction. Viewing the position more generally, article 31.1 of CMR affords clearly defined heads of jurisdiction additional to those provided by the Warsaw Convention in particular jurisdiction based on any agreement between the parties to a court or tribunal in a contracting state, and jurisdiction at the place of taking over of the goods (and not merely at the place designated for their delivery). As to the Brussels Regulation, there are, unsurprisingly, parallels between some of its provisions and those of CMR. A defendants domicile in a member state is the general head of jurisdiction under article 2.1 of the Brussels Regulation, while article 5.5 provides a special head as regards disputes arising out of the operations of a branch or agency. These heads broadly parallel the heads found in article 31.1(a) of CMR. In other respects, there are however differences in both directions in the jurisdictions available under CMR and the Brussels Regulation. Article 5.1 of the Brussels Regulation offers as special heads the place of performance of the obligation in question in a contract claim or the place where the harmful event occurred in a tort claim. Article 31.1(b) of CMR offers in contrast the place designated for delivery, which may correspond with the place for performance of the obligation in question, if the relevant law enables suit against a carrier on the basis of a failure to deliver or to deliver in good condition at destination. Finally, the Brussels Regulation does not offer any general head of jurisdiction paralleling the right to sue at the place of taking over the goods conferred by article 31.1(b). On the other hand, coming to the nub of BATs case on this point, the Brussels Regulation contains the further special head that: A person domiciled in a member state may also be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled . On Essers and Kazemiers case, CMR contains no such provision. On BATs case, the last sentence of article 36 of CMR has an effect which is similar - similar, but necessarily wider since it would expose any successive carrier potentially liable under article 36 to being sued by cargo interests in any jurisdiction anywhere in the world which happened to be that of the principal place of business of any other such successive carrier, or which happened to be that of the branch or agency through which the first carrier happened to make the carriage contract. A lesser point, not without all practical relevance, is that BATs reading of the last sentence of article 36 would also provide an automatic ground of jurisdiction against any such carrier without the qualifying condition inserted into article 6.1 of the Brussels Regulation, that the claims should be so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The absence of such a qualification could be significant if, for example, a claim was brought against a first carrier based on a special term included in the original carriage contract, but not binding on a successive carrier because it was not included in the consignment note. In these circumstances, I do not consider that the desirability in some contexts of a provision such as article 6.1 of the Brussels Regulation or Practice Direction 6B para 3.1(1) can affect or impact on the interpretation of articles 31, 34 and 36 of CMR in any significant way. Equally, I do not see how it can be said that there is any gap that article 6.1 should be called upon to fill, even assuming that gap-filling by reference to the Brussels Regulation is admissible and required, in a European Union context, as Colman J thought in Frans Maas Logistics. The scheme of CMR appears to me to be deliberate and comprehensive. For better or for worse, and starting with the model of the Warsaw Convention, it elected for a generous range of heads of jurisdiction. There is no gap in it, as a matter of construction, merely a considered decision that the heads provided would reflect an appropriate balance between the interests of all concerned, potential claimants and potential defendants. Does article 6.1 of the Brussels Regulation prevail over article 31.1 of CMR? That leaves BATs last and perhaps most far-reaching submission, that, if all else fails, European Union law, in particular article 6.1 of the Brussels Regulation or the principle behind it, must prevail over the scheme of CMR to enable the joinder of all carriers potentially liable under article 36 in any court or tribunal in which jurisdiction can be established under article 31.1(a) on the basis of any one of such carriers principal place of business or branch or agency. I have already outlined statements of principle made by the Court of Justice on which BAT rely (para 18 above). The starting point, however, must be the European Treaties. CMR was concluded before 1 January 1958 between states half of which are, even today, not member states of the European Union. Article 351 TFEU provides: The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding states, before the date of their accession, between one or more member states on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties. To the extent that such agreements are not compatible with the Treaties, the member state or states concerned shall take all appropriate steps to eliminate the incompatibilities established. Member states shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude. In applying the agreements referred to in the first paragraph, member states shall take into account the fact that the advantages accorded under the Treaties by each member state form an integral part of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other member states. Reflecting article 351 TFEU, article 71 of the Brussels Regulation provides: 1. This Regulation shall not affect any conventions to which the member states are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments. 2 With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner: (a) this Regulation shall not prevent a court of a member state, which is a party to a convention on a particular matter, from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another member state which is not a party to that convention. The court hearing the action shall, in any event, apply article 26 of this Regulation; (b) judgments given in a member state by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other member states in accordance with this Regulation. Where a convention on a particular matter to which both the member state of origin and the member state addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation which concern the procedure for recognition and enforcement of judgments may be applied. On the face of it, article 351 establishes a clear position. The Court of Justice has, however, interpreted article 315. In its famous decision in Kadi v Council of the European Union (Joined Cases C-402/05P and C-415/05P) [2009] AC 1225, the court in considering the relationship between a European sanctions measure and the obligations imposed on member states under the United Nations Charter and general international law to give effect to UN Security Council asset freezing orders under Chapter VII of the UN Charter, said this: 300. What is more, such immunity from jurisdiction for a Community measure like the contested regulation, as a corollary of the principle of the primacy at the level of international law of obligations under the Charter of the United Nations, especially those relating to the implementation of resolutions of the Security Council adopted under Chapter VII of the Charter, cannot find a basis in the EC Treaty. 301 Admittedly, the court has previously recognised that article 234 of the EC Treaty (now, after amendment, article 307EC) could, if the conditions for application have been satisfied, allow derogations even from primary law, for example from article 113 of the EC Treaty on the common commercial policy: see, to that effect, the Centro-Com case [1997] QB 683, paras 56-61). 302 It is true also that article 297EC implicitly permits obstacles to the operation of the common market when they are caused by measures taken by a member state to carry out the international obligations it has accepted for the purpose of maintaining international peace and security. 303 Those provisions cannot, however, be understood to authorise any derogation from the principles of liberty, democracy and respect for human rights and fundamental freedoms enshrined in article 6(1) EU as a foundation of the Union. 304 Article 307EC may in no circumstances permit any challenge to the principles that form part of the very foundations of the Community legal order, one of which is the protection of fundamental rights, including the review by the Community judicature of the lawfulness of Community measures as regards their consistency with those fundamental rights. Article 351 TFEU is the successor to article 307EC. Kadi was a decision at a high level of importance for individual freedoms. It is, in one sense, a surprise to find its thinking extended to the tarmacadam of the worlds roads. But in TNT Express para 51, and Nipponkoa, para 37, referred to in para 18 above, the court stated that: Article 71 of Regulation 44/2001 cannot have a purport that conflicts with the principles underlying the legislation of which it is part. Accordingly, that article cannot be interpreted as meaning that, in a field covered by the Regulation, such as the carriage of goods by road, a specialised convention, such as the CMR, may lead to results which are less favourable for achieving sound operation of the internal market than the results to which the Regulations provisions lead. The court did not refer to article 307EC or article 351 TFEU, and the courts reasoning is essentially circular. It is the purpose of article 307EC, now 351 TFEU, to derogate from not only Regulations such as (EC) 44/2001, but also from the Treaties themselves. As Judge Allan Rosas, not a member of the court in TNT or Nipponkoa, explained extra-judicially in The Status in EU Law of International Agreements Concluded by EU member states (Fordham International Law Journal vol 34, Issue 5 (2011) article 7), at p 1321: Article 351(1) TFEU allows a derogation from the principle of primacy of EU law but only in relation to agreements concluded prior to EU membership and, in principle, only to treaty relations between member states and third states (category 1 above). According to settled case law, the purpose of the provision is to establish that the application of EU law does not affect the duty of the member state concerned to respect the rights of non-member countries under a prior agreement and to perform its obligations thereunder. The court has also recognized that article 351(1) TFEU may allow derogations from not only Unions secondary law but also its primary law, such as provisions of the TEU and the TFEU. The court has added that the provision would not achieve its purpose if it did not imply a duty on the part of the Union institutions not to impede the performance of the obligations of member states that stem from a prior agreement. These propositions are borne out by the prior authorities which Judge Rosas cited in their support, particularly Attorney General v Burgoa (Case C-812/79) [1980] ECR 2787, para 8 et seq. At a high level, preservation of the internal market is of course fundamental to the Union. But the court in both TNT para 49 and Nipponkoa para 36 endorsed the more detailed statements that, although article 71 of Regulation 44/2001 provides, in relation to matters governed by specialised conventions such as CMR, for the application of those conventions: the fact remains that their application cannot compromise the principles which underlie judicial cooperation in civil and commercial matters in the European Union, such as the principles, recalled in recitals 6, 11, 12 and 15 to 17 in the preamble to Regulation 44/2001, of free movement of judgments in civil and commercial matters, predictability as to the courts having jurisdiction and therefore legal certainty for litigants, sound administration of justice, minimisation of the risk of concurrent proceedings, and mutual trust in the administration of justice in the European Union. In TNT the court added: 50. Observance of each of those principles is necessary for the sound operation of the internal market, which, as is apparent from recital 1 in the preamble, constitutes the raison dtre of Regulation 44/2001. The context in which these statements were made and applied is however important. Both cases concerned competing proceedings between the same parties in different member states. Both concerned the free movement of judgments and mutual trust in the administration of justice. In TNT, AXA as cargo-insurer was seeking to enforce in the Netherlands a German judgment obtained against TNT, the CMR carriers, who were seeking in the Netherlands to contest the German courts jurisdiction to give the German judgment on the basis that there existed prior Netherlands proceedings in which TNT were seeking a declaration of non-liability. The Hoge Raad referred the matter to the Court of Justice, which, after citing its familiar case law on mutual trust (including West Tankers Inc v Allianz SpA (formerly RAS Riunione Adriatica di Sicurt SpA) (Case C-185/07) EU:C:2009:69; [2009] AC 1138, para 24) held: Having regard to the principle of mutual trust referred to above, the court has stated that the court of the state addressed is never in a better position than the court of the state of origin to determine whether the latter has jurisdiction. Accordingly, Regulation 44/2001, apart from a few limited exceptions, does not authorise the jurisdiction of a court of a member state to be reviewed by a court in another member state (Allianz SpA, at para 29 and the case law cited). Therefore, article 31(3) of the CMR can be applied in the European Union only if it enables the objectives of the free movement of judgments in civil and commercial matters and of mutual trust in the administration of justice in the European Union to be achieved under conditions at least as favourable as those resulting from the application of Regulation 44/2001. 55. Nipponkoa also concerned competing sets of proceedings. These were Dutch proceedings in which the carriers had successfully limited their liability to the CMR limit and German proceedings in which cargo insurers were seeking to establish wilful misconduct. On a reference by the Landgericht Krefeld, the Court of Justice held that article 71 of the Brussels Regulation precluded an interpretation of article 31(2) of CMR whereby an action for a declaration of non- or limited liability did not involve the same cause of action as a positive claim for damages in respect of the same alleged loss. This slightly surprising way of putting the matter (in terms of the proper interpretation of CMR) contrasts with the courts confirmation in TNT, paras 58-63, that it has no jurisdiction under article 267 TFEU to interpret international agreements concluded between member states and non-member countries or, specifically, to interpret article 31 of CMR. It is however possible to understand the decision in Nipponkoa on the basis that what the court was really doing was treating Union law in the relevant area, particularly that covered by article 29.1 of the Brussels Regulation and Owners of cargo lately laden on board the ship Tatry v Owners of the ship Maciej Rataj (Case C-406/92) (Note) EU:C:1994:400; [1999] QB 515; [1995] 1 Lloyds Rep 302, as over-riding any different regime contained in CMR. How close such reasoning and decisions may be to the thinking of the European legislators when they agreed article 351 TFEU and article 71 of the Brussels Regulation is a different matter. The present case does not concern or present any risk of competing judgments involving the same parties. BAT is under CMR unquestionably entitled to look to Exel for the whole of any loss which BAT can prove. At highest, BAT may have to pursue Essers and Kazemier in different jurisdictions, if they continue to wish to expand their target beyond Exel. In so far as BATs wish to do this is based on a belief that their evidential position, in seeking to show wilful misconduct, may be improved if they can join Essers and Kazemier, I cannot associate an evidential aim of this nature with any fundamental principle of Union law in the field of jurisdiction or justice. I add that, in so far as BAT suggest that it may not be possible to sue Essers and Kazemier elsewhere on the same basis as here, since the courts in the Netherlands would decline to recognise Exel as first carrier (since it did not actually carry the goods anywhere), the point cuts both ways, as well as leaving open both a possibility that Essers and Kazemier should then themselves be regarded as first carriers and that if, on its face surprisingly, the Dutch courts would not regard the carriage as subject to CMR at all, Essers and Kazemier would be liable under the general law. More fundamentally, as discussed in paras 44-47 above, CMR represents a balanced jurisdictional rgime adopted across a wide-range of some 55 states, only half of which are Union member states. I cannot regard its tailored balance as impinging on any of the principles of Union law which have been explained by the Court of Justice in the authorities discussed above, and which it is for us to apply. I conclude that nothing in Union law prevents effect being given to article 31.1 of CMR, under which it is clear that neither Essers nor Kazemier can be sued here. I add, though it is unnecessary for my decision, that I cannot believe that it is wholly inadmissible under Union law to bear in mind the interests of those third party states in a rgime which operates with some certain degree of consistency across all member states. Restrictions under Union law on the ordinary application of an international convention like CMR potentially undermine the uniformity and predictability that are the aim of such conventions. This tends to suggest that any over-riding interests of Union law should be relatively narrowly confined. Conclusion Js order setting aside the service of the claim forms on Essers and Kazemier. It follows from the above that I would allow this appeal, and restore Cooke LORD SUMPTION: (with whom Lord Neuberger, Lord Clarke and Lord Reed agree) Article 34 of the CMR provides that where a single contract of carriage is performed by successive carriers, each of them is to be responsible for the performance of the whole operation. Under article 36, cargo interests are entitled to claim under the contract against the first and last carriers and the carrier in possession of the goods when the loss, damage or delay occurred. The commercial logic of these provisions points towards recognising a jurisdiction to receive claims against all three in one set of proceedings. Sir Bernard Rix makes a strong case for this outcome in the present case in his judgment in the Court of Appeal. Nevertheless, in agreement with Lord Mance, I think that the language of the CMR points clearly in the other direction. In the light of the Lord Mances very full analysis of the Convention, I can state my reasons quite shortly. Chapter V deals with Claims and Actions. Article 31.1 provides for legal proceedings arising out of carriage under this Convention to be brought in: any court or tribunal of a contracting country designated by agreement between the parties and in addition in the courts or tribunals of a country within whose territory, (a) the defendant is ordinarily resident, or has his principal place of business. or the branch or agency through which the contract of carriage was made, or (b) the place where the goods were taken over by the carrier or the place designated for delivery is situated, and in no other courts or tribunals. This provision cannot be limited to claims against the first or primary carrier. It is in terms directed to claims arising out of carriage under this Convention. It must therefore apply to any carrier whom the Convention makes potentially liable. I find it impossible to attach any importance to the fact that it appears earlier in the text than the provisions regulating the liability of second or subsequent carriers. As applied to actions arising out of carriage under the Convention, article 31.1 is in terms a complete code. It confers jurisdiction on the courts or tribunals of the jurisdiction (i) which has been designated by agreement between the parties, or (ii) where the defendant is present in one or other of the ways envisaged by sub- paragraph (a), or (iii) where the place of consignment or the contractual place of delivery are situated (see sub-paragraph (b)), and in no other courts and tribunals. The courts and tribunals of the place of consignment or the contractual place of delivery (case (iii) in my categorisation) have jurisdiction over all carriers who are potentially liable. This is because these are jurisdictions identified by reference to the transportation operation and not some circumstance specific to the proposed defendant. They are also identifiable from the consignment note. The Convention envisages that in these jurisdictions all such carriers may be sued together. So far, therefore, as there is a commercial imperative to have a jurisdiction in which all carriers potentially liable may be sued, that imperative is satisfied by the existence of jurisdiction at the place of consignment or the contractual place of delivery. Cases (i) and (ii) are different. In these cases, jurisdiction depends on something specific to the particular defendant, ie he has entered into a jurisdiction agreement with the claimant or is present within the relevant jurisdiction. Jurisdiction may be established under one of these two heads only against defendants who fulfil the stated criteria. There is no provision for jurisdiction to be exercisable against necessary or proper parties who do not fulfil them. Since in this case, England was neither the place of consignment nor the contractual place of delivery, BAT must rely on one or other of the heads of jurisdiction specific to defendants satisfying particular criteria, ie cases (i) or (ii). The only way in which they could claim to have agreed with Essers or Kazemier upon English jurisdiction is by showing that those companies acceded to the contracts between BAT and Exel which contained the relevant jurisdiction clause. The agreements between BAT and Exel are framework agreements containing the terms of the relevant contract of carriage. The consignment note is not itself the contract of carriage. It is only prima facie evidence of its existence and terms: see article 9. But under article 34, a succeeding carrier becomes a party to the contract of carriage only under the terms of the consignment note, by reason of his acceptance of the goods and the consignment note. It follows that the only terms to which a successive carrier accedes by accepting the goods with the consignment note are those recorded in the consignment note. These are terms of the Convention itself and any additional terms specified in Box 20 (Conditions Particulires Besondere Vereinbarungen). This is a wholly rational result. Those are the only terms of which the successive carrier was necessarily aware or to which he can be said to have consented. That leaves only the argument that when Essers and Kazemier acceded to the contract of carriage by accepting the goods and the consignment note from Exel, they did so through a branch or agency, namely Exel, which was located in England. This is, to my mind, an impossible argument. As the context shows, the branch or agency referred to in sub-paragraph (a) of article 31.1 is relevant as one of a number of indicia of the defendants presence in the jurisdiction in which the claimant wishes to sue. It means a branch or agency of the relevant defendant (Essers or Kazemier). The conditions are, first, that it should be located in the jurisdiction (England) where the claimant wishes to sue and, secondly, that the contract of carriage should have been made through it. It is not suggested that Essers or Kazemier has a branch or agency in England. Even if they did, they did not accede to the contract of carriage through that branch or agency but by accepting the goods and the consignment note in Switzerland and Hungary respectively. The fact that the place at which a successive carrier accedes to the contract under article 34 will necessarily be the place of consignment, which is already a relevant jurisdiction by virtue of sub-paragraph (b), indicates that paragraph (a) is in fact referring to the branch or agency through which the contract of carriage was originally made between the consignor and the first or primary carrier as principals. It is not referring to the branch or agency (if any) through which a successive carrier acceded to it. The final words of article 36 ( an action may be brought at the same time against several of these carriers) authorise proceedings at the same time against any or all carriers who are liable under the Convention. The effect of these words is simply that there is no prescribed order in which cargo interests must have recourse to the various parties made concurrently liable. The draftsman has no doubt assumed that proceedings will be brought in a court which has jurisdiction, but the article is not concerned with jurisdiction. It certainly does not confer jurisdiction if it does not otherwise exist. This analysis is supported by articles 37-39, which deal with claims for indemnity by a carrier who has paid compensation to cargo interests, against the carrier or carriers actually responsible (or deemed to be responsible). Claims for an indemnity may be brought by the carrier who has paid against the carriers concerned (ie the carriers responsible or deemed to be responsible for the loss) in a jurisdiction where any one of them is present: see article 39.2. Two points may be made about this. First, it applies only to actions among carriers. There is no equivalent provision available to found jurisdiction for claims brought by cargo interests under cases (i) or (ii). Secondly, the technique used by the Convention for avoiding inconsistent findings in actions by cargo interests and subsequent actions by carriers among themselves is not to provide for them to be litigated in the same proceedings. It is to provide for the validity of the payment of damages previously made to cargo interests to be incapable of challenge in subsequent proceedings for an indemnity, provided that the amount was determined by judicial authority after the [carrier against whom indemnity is claimed] had been given due notice of the proceedings and afforded an opportunity of entering an appearance: see article 39.1. At the conclusion of the argument in this appeal I was persuaded that this appeal should be dismissed for the reasons given by Sir Bernard Rix in the Court of Appeal. I remained of that view until I received a copy of the draft judgment of Lord Mance. I am now entirely persuaded by his reasoning that Cooke J was correct at first instance and that this appeal should be allowed and his order restored. Since then I have read in draft the judgment of Lord Sumption giving his reasons for agreeing with Lord Mance. In all the circumstances, for the reasons which they give I would allow the appeal. I do so with some misgivings because I agree with Lord Sumption that the commercial logic of articles 34 and 36 points towards the recognition of a jurisdiction to receive claims against all three carriers in one set of proceedings. However, I agree with him that Lord Mances analysis has shown that the language of the CMR points clearly in the other direction. At the conclusion of the argument in this appeal I was persuaded that this appeal should be dismissed for the reasons given by Sir Bernard Rix in the Court of Appeal. I remained of that view until I received a copy of the draft judgment of Lord Mance. I am now entirely persuaded by his reasoning that Cooke J was correct at first instance and that this appeal should be allowed and his order restored. Since then I have read in draft the judgment of Lord Sumption giving his reasons for agreeing with Lord Mance. In all the circumstances, for the reasons which they give I would allow the appeal. I do so with some misgivings because I agree with Lord Sumption that the commercial logic of articles 34 and 36 points towards the recognition of a jurisdiction to receive claims against all three carriers in one set of proceedings. However, I agree with him that Lord Mances analysis has shown that the language of the CMR points clearly in the other direction.

This case concerns jurisdiction over claims relating to thefts from two cargo containers. The first container was allegedly hi jacked in Belgium in September 2011. 756 of an original 1,386 cigarette cartons disappeared from the second container while it was parked overnight near Copenhagen. The consignors of these containers, and respondents in both appeals, are two companies in the British American Tobacco Group. The consignors are claiming against the English main contractors, Exel Europe Ltd (Exel), who undertook responsibility for the carriage and also against the sub contractors, the appellants, in whose hands the containers were when the alleged losses occurred. Exel has played no part in the appeals. In the appeal concerning the first container the appellants are H Essers Security Logistics BV and H Essers Transport Company Nederland BV (collectively, Essers) and in the appeal concerning the second container the appellant is Kazemier Transport BV (Kazemier). In both cases the carriage of containers was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR), which is given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965. Article 31 CMR sets out certain bases on which courts and tribunals can have jurisdiction over disputes arising from contracts of carriage. Article 34 CMR provides that where a contract of carriage is performed by successive carriers, each is responsible for the performance of the whole operation. Under article 36 CMR, claims under the contract may be brought against the first and last carriers and the carrier in possession of the goods when the loss, damage or delay occurred. The issue in the appeals is whether the consignors can found jurisdiction in England against Essers and Kazemeir as successive carriers within the meaning of CMR by relying on the presence in England of, and the proceedings brought against, Exel and/or upon a provision in the main contract for English jurisdiction. The High Court set aside the service of claim forms on Essers and Kazemeir. The Court of Appeal reached the opposite conclusion. Essers and Kazemeir appealed to the Supreme Court. The Supreme Court allows the appeals by Essers and Kazemeir and restores the High Courts order setting aside the service of claim forms. Lord Mance writes the lead judgment, with which Lord Neuberger and Lord Reed agree. Lord Sumption and Lord Clarke write concurring judgments. Does Article 31 apply to successive carriers? Article 31 CMR applies to disputes where a successive carrier is involved [19 20, 61]. Article 31 CMR confers jurisdiction only on the courts or tribunals of the jurisdiction (i) as agreed by the parties, (ii) where the defendant is ordinarily resident, or has his principal place of business, or the branch through which the contract was made, or (iii) the place of consignment or delivery [33, 62]. In order to found jurisdiction in England, the respondents must bring their claim under one of these heads. It is common ground that England was not the place of consignment or delivery for either container [31, 64]. Did Essers and Kazemeir agree to English jurisdiction? The appellants became party to the respective contracts made between the respondents and Exel but article 34 CMR qualifies this position by adding that a successive carrier becomes party to the contract of carriage under the terms of the consignment note [23]. It would be contrary to the general principle that contract depends on agreement to hold a successive carrier bound by a choice of court clause, or any other clause not evidenced by the consignment note and of which he had no express notice. On that basis neither Essers nor Kazemeir were bound by an English jurisdiction clause in the original contracts [26]. Can a claimant bring subsequent carriers into the jurisdiction where it is already suing one carrier? The first, last and performing carriers under article 36 CMR hold joint and several liability, rather than alternative liability [34 42]. CMR reflects a considered decision as to the balance of interests between all potential claimants and defendants and ought not to be interpreted to include an additional head of jurisdiction allowing for a defendant domiciled in one member state to be sued in the courts of the place where a co defendant was domiciled, unlike the article 6.1 of the Regulation on Civil Jurisdiction and Judgments, Council Regulation (EC) No 44/2001 of 22 December 2000 (the Brussels Regulation) [46 47]. Was England the location of the branch or agency through which the relevant contract of carriage was made? Article 31 CMR refers to the original contract between the consignor and the primary carrier, rather than that through which any successive carrier acceded. Therefore England is not the relevant location of such branch or agency [32, 66]. Does the Brussels Regulation provide any other basis for jurisdiction or aid the interpretation of the CMR? The Brussels Regulation does not provide any other basis for jurisdiction over Essers or Kazemeir or otherwise act as an aid to the interpretation of the CMR. The CMR represents a balanced regime adopted across 55 states, only half of which are in the EU. It does not impinge on any of the principles of EU law which the Court of Justice has, in other cases, held to prevail over such international agreements [48 57]. Lord Clarke and Lord Sumption both consider that the commercial logic of articles 34 and 36 points towards the recognition of a jurisdiction to receive claims against all three carriers in one set of proceedings but agree with Lord Mance that the language of the CMR clearly provides otherwise [60, 69].

This is an appeal under paragraph 13(a) of Schedule 6 to the Scotland Act 1998, which provides that an appeal lies to this court against a determination of a devolution issue by a court of two or more judges of the High Court of Justiciary. But the circumstances that have led to its coming here cannot be regarded as satisfactory. It is far from clear that the issue identified in the devolution minute is a devolution issue within the meaning of paragraph 1(d) of Schedule 6. As the determination against which the appeal has been brought was taken on paper at the second sift, we do not have a fully reasoned opinion of the judges for the decision that they took to refuse to grant leave to appeal. The motion for leave to appeal to the Supreme Court against their determination was not opposed by the Lord Advocate on the question of jurisdiction, although he did oppose it on the ground that it did not raise a matter of general public importance. The Appeal Court in its turn did not give any reasons when it gave leave to appeal to this court. As a result we are, in effect, having to deal with this case at first instance without having the benefit of the views of the judges of the High Court of Justiciary as to whether a devolution issue has been raised and, if so, how it should be determined. In Follen v HM Advocate 2001 SC (PC) 105, para 10 the Judicial Committee observed that, where the Appeal Court refused leave without giving reasons, the Board might find it difficult to appreciate that a petition for special leave to appeal was without merit from the information given on paper by the petitioner. This is not such a case, and there are no grounds for criticising the judges for the fact that no reasons were given. The motion for leave was not opposed on this point. But it is unfortunate that, as there has been no reasoned judgment because of the procedural route the case has followed, the question whether a devolution issue has truly been raised appears to have been overlooked until now. The facts On 16 December 2010 the appellant James Kinloch was found guilty on indictment in the Sheriff Court at Glasgow of, on 6 February 2007 at various addresses in Glasgow including the appellants home at 32 Prospecthill Crescent, converting and transferring criminal property consisting of large sums of money in breach of sections 327(1)(a), (b), (c) and (d) and 329(1)(a), (b) and (c) of the Proceeds of Crime Act 2002. He was, in short, convicted of money laundering. At a diet held on 13 September 2010 a preliminary plea was taken on the appellants behalf that the police had acted unlawfully when they kept him under observation on 6 February 2007, as they had failed to obtain authorisation under the Regulation of Investigatory Powers (Scotland) Act 2000 (the 2000 Act) to conduct covert surveillance on him and his associates. A devolution minute was moved in support of this argument. The sheriff refused the devolution minute. He also refused leave to appeal, and the case went to trial before another sheriff. The devolution minute began by stating that the appellant intended to raise a devolution issue within the meaning of Schedule 6 to the Scotland Act 1998. The charges which had been brought against him were referred to, as were production 1 which was a copy of a form purporting to authorise directed surveillance on a group of individuals and production 2 which was a police surveillance log dated 6 February 2007. The observations which the police carried out from about 0835 hours to about 1200 hours were described. The appellant was seen leaving his car and entering the block of flats in which he lived, leaving the block carrying a bag and entering a car which then drove off. He was observed leaving various other locations and cars in Glasgow and then entering a taxi carrying a bag which appeared to be heavy which was later seen parked outside his brothers home. The police approached the taxi, and the appellant and his brother were detained. Various searches were carried out and large sums of money were recovered by the police. Reference was made in the minute to article 8 of the European Convention on Human Rights. Article 8(1) provides that everyone has a right to respect for his private and family life, his home and his correspondence. Article 8(2) states that there shall be no interference by a public authority with the exercise of this right except such as is, among other things, in accordance with the law. Reference was also made to section 1(2) of the 2000 Act which defines what amounts to directed surveillance for the purposes of that Act, and to section 5(1) which provides that such conduct is lawful for all purposes if an authorisation under the Act confers entitlement to engage in it on the person whose conduct it is and that persons conduct is in accordance with the authorisation. The Crown conceded that no authorisation had been granted for the surveillance of the appellant, any associate of his or anyone else who was the subject of the observations by the police which were referred to in evidence at the trial. The issue that the Minute sought to raise was described in these terms: That the police have acted unlawfully in that they failed to obtain authorisation to conduct covert surveillance upon the minuter or his associates. That all of the subsequent actions by the police officers and the materials recovered under search warrants obtained by the police flowed from the said unlawful acts. That as a consequence the surveillance and the searchers (sic) and seizures which followed upon the minuters arrest were unlawful and any evidence in respect of said surveillance or items seized is inadmissible in evidence. The prayer at the end of the Minute invites the court: to hold that the surveillance carried out on James Kinloch on 6 February 2007 was unlawful and that the productions 1 and 2 are inadmissible and that all subsequent action by the police including the obtaining of a warrant and the seizing of various items as described in crown production 5 was unlawful and, as a consequence, inadmissible as evidence. In Gilchrist v HM Advocate 2005 (1) JC 34 there was an invalid authorisation for the directed surveillance that the police carried out because it lacked the necessary detail. A devolution minute was lodged by the second appellant in which it was contended that his rights under article 8 had not been properly protected, and that for the Crown to lead evidence obtained by that infringement would compromise his right to a fair trial under article 6. The High Court of Justiciary rejected the submission that the events in question involved the obtaining of private information, which is defined by section 1(9) of the 2000 Act as including any information relating to a persons private or family life. It also rejected the submission that, because the surveillance operation was being carried out under an invalid authorisation, there was an infringement of the second appellants rights under article 8. The effect of the decision was that the leading of the evidence was not incompatible with his rights under article 6 either. Giving the opinion of the Appeal Court, Lord Macfadyen said in para 21: What took place in Albion Street at the relevant time was that a plastic bag was handed by the first appellant to the second appellant. That was done in a public place. The event was there to be observed by anyone who happened to be in the vicinity, whatever the reason for their presence might be. It was in fact observed by police officers. They had reason to suspect that criminal activity was taking place. They therefore detained the appellants. On further investigation it was found that the bag contained controlled drugs. That sequence of events did not involve the obtaining of private information about the second appellant, in the sense mentioned in section 1(9) or in any broader sense. Nor did it involve any lack of respect for the second appellants private life. What was done did not, in our opinion, amount to an infringement of the second appellants rights under article 8. A note of appeal was lodged following the appellants conviction in which it was narrated, among other things, that the Crown relied on the decision in Gilchrist when opposing the devolution minute. It was submitted that the case of Gilchrist was wrongly decided. It was conceded that the sheriff was bound by that decision, but the sheriff was said to have erred in law by refusing to allow leave to appeal his decision. The sheriff said in his report that, as it was not in dispute that he was bound by Gilchrist, the only appropriate course was for him to refuse the minute and that, as he did not find his decision to be a matter of fine balance, he refused leave to appeal. It was also submitted that the sheriff who presided at the trial erred in repelling a submission of no case to answer. The judge who dealt with the application at the first sift refused leave to appeal on both grounds. With regard to the point raised in the devolution minute, he said that the sheriff was entitled to refuse leave to appeal and that the note of appeal contained no adequate basis upon which to advance an argument that the case of Gilchrist was wrongly decided. An opinion was then obtained from counsel as to whether the appeal was arguable. Various reasons were given for criticising the approach that was taken in Gilchrist to the question whether there had been a violation of article 8. It was said that the relevant decisions of the European Court supported the appellants argument. The second sift panel, having considered that opinion, also refused to grant leave to appeal. In relation to the devolution minute all it said was that it agreed with the sheriff that he was bound by the decision in Gilchrist and that he did not err in refusing leave to appeal. On 2 November 2011 the Appeal Court, having heard counsel for the appellant and without giving reasons, granted leave to appeal to the Supreme Court. is stated that the issues in the appeal are as follows: In the statement of facts and issues lodged for the purposes of this appeal it i) Whether the observations by the police, not having been authorised under the Regulation of Investigatory Powers (Scotland) Act 2000, breached the appellants rights under article 8(1). The appellant maintains that the following second issue also arises and should be considered by the Supreme Court. ii) If so, whether the act of leading the evidence derived from that surveillance was incompatible with the appellants rights under article 8(1) et separatim article 6(1) and thus ultra vires in terms of section 57(2) of the Scotland Act 1998? The respondent does not accept that the second issue arises in the appeal. Is there a devolution issue? Of the various questions listed in paragraph 1 of Schedule 6 to the Scotland Act 1998, the only one that is relevant to this appeal is that listed in sub paragraph (d), as amended by section 12(2) of the Scotland Act 2012: a question whether a purported or proposed exercise of a function by a member of the Scottish Government is incompatible with any of the Convention rights or with EU law. That provision has to be read together with section 44(1), which provides that there shall be a Scottish Government whose members shall be (a) the First Minister, (b) such Ministers as the First Minister may appoint and (c) the Lord Advocate and the Solicitor General for Scotland. Section 57(2) of the 1998 Act provides: A member of the Scottish Government has no power to make any subordinate legislation, or to do any other act, so far as the legislation or act is incompatible with any of the Convention rights or with EU law. It is unlawful under section 6(1) of the Human Rights Act 1998 for the police to act in a way which is incompatible with a Convention right, as they are a public authority. But they are not members of the Scottish Government. So the question whether they have acted in a way that is incompatible with any of the Convention rights is not a devolution issue within the meaning of paragraph 1(d). The first issue in the statement of facts and issues is a reasonably accurate summary of the contents of the devolution minute. It refers to the actions of the police, and it raises the issue whether their observations were in breach of the appellants rights under article 8. As the proceedings below indicate, what the appellant was seeking to do was to argue that Gilchrist v HM Advocate was wrongly decided. His argument at the first sift was that the sheriff erred in refusing him leave to appeal on that matter. But, in contrast to what was submitted in Gilchrist, no mention was made at any stage of the question whether the act of the Lord Advocate in leading evidence obtained by the surveillance would compromise the appellants rights under article 6. Taking it on its own terms, therefore, the devolution minute does not appear to raise a devolution issue at all. The question which it does raise is not one that can be determined by this court under the jurisdiction that it has been given by Schedule 6. The appellant seeks to remedy this defect by the second question raised in the statement of facts and issues. But the respondent objects to that question because the appellant gave no notice of an intention to raise that issue in his devolution minute. So there was no determination of that issue in the High Court of Justiciary as the question it raises was not before it, and this court does not have an original jurisdiction in these matters: Follen v HM Advocate 2001 SC (PC) 105, para 9. Except in regard to devolution issues as defined by paragraph 1 of Schedule 6 to the Scotland Act 1998, every interlocutor of the High Court of Justiciary such as that pronounced by the judges at the second sift is final and conclusive and not subject to review by any court whatsoever: Criminal Procedure (Scotland) Act 1995, section 124(2); Hoekstra v HM Advocate (No 3) 2001 SC (PC) 37, 41. The decision at the second sift was that the sheriff was bound by the decision in Gilchrist. It does not appear from the reasons that were given that the panel gave any consideration to the question whether the act of the Lord Advocate in leading the evidence was incompatible with the appellants rights under article 6(1). The proper course, in view of the limits to the jurisdiction of this court under the statute, might well have been to dismiss this appeal as incompetent. But, with considerable hesitation, we decided that we should hear argument on the second issue. Three factors in particular have led us to this conclusion. The first is the fact that the Crown did not oppose the appellants motion for leave to appeal to this court on this point. The second is the fact that the Appeal Court took the view that it should give leave to appeal. The third is that, as noted in para 12 above, what the appellant was really seeking to do was to enable the correctness of the decision in Gilchrist that the evidence led by the Lord Advocate was admissible to be re examined. As Mr McConnachie QC for the appellant pointed out, that was the only court to have heard any submissions at all on the matter. It must be taken to have been satisfied that it was proper for it to give leave. Our decision to allow this appeal to proceed should not be taken, however, as an indication that this Court is not aware of the limits to its jurisdiction, or of its responsibility to ensure that those limits are respected. Devolution minutes should say what they mean. Was the act of leading the evidence incompatible with article 6? The starting point for an examination of this issue, as it was in Gilchrist, is the question whether there was a breach of the appellants right to respect for his private life under article 8. The fact that evidence was irregularly obtained as the surveillance was not authorised under section 6 of the 2000 Act does not, of course, of itself make that evidence inadmissible at common law: see Lawrie v Muir 1950 JC 19. Nor does the fact that evidence was obtained in breach of article 8 necessarily mean that it would be incompatible with article 6 for that evidence to be led at the trial: Khan v United Kingdom (2000) 31 EHRR 1016, para 40; PG and JH v United Kingdom (2001) 46 EHRR 1272, para 81. It has also to be noted that any breach of article 8 in the obtaining of the evidence was due to acts of the police, not the Lord Advocate. It was so held in McGibbon v HM Advocate 2004 JC 60, where it was conceded that there had been a breach of article 8 in the obtaining of covert video and audio recordings of the appellants incriminating conversations. Lord Justice Clerk Gill said in para 20 that the act that was relevant to section 57(2) of the Scotland Act 1998 was the act of the Lord Advocate in leading the evidence. The appellant in this case suggested that the distinction which the Lord Justice Clerk drew in McGibbon between the acts of the police and the Lord Advocate was unsound. I think that the Lord Justice Clerk was well founded in holding that the functions of the police and the Lord Advocate are constitutionally separate. The Lord Advocate was, however, responsible for the leading of the evidence. It should be noted too that issues relating to the lawfulness of an interference with private life must be distinguished from those about the fairness of the use of evidence in the trial: Perry v United Kingdom (2003) 39 EHRR 76, para 48; also HM Advocate v P 2012 SC (UKSC) 108, para 18 for the test of fairness in this context. The tests as to whether there was a breach of these two articles are different, as are the remedies if they are held to have been breached. So the way the evidence was obtained may infringe article 8, yet the leading of that evidence may be held not to be incompatible with article 6. Nevertheless it would not be right to examine the issue as to whether the leading of the evidence in this case was incompatible with article 6 without examining the underlying question whether the appellants article 8 right to respect for his private life was interfered with. The key to the whole argument lies in what one makes of the article 8 issue. Decisions of the Strasbourg court on the question whether there has been an interference with the right to respect for a persons private life indicate that the answer to it will depend in each case on its own facts and circumstances. Private life is regarded by that court as a broad term not susceptible to exhaustive definition: PG and JH v United Kingdom (2001) 46 EHRR 1272, para 56. The extent of the intrusion into the individuals private space will always be relevant, as will the use that is made of any evidence that results from it. The use of covert listening devices installed in the persons home or other premises where he has a reasonable expectation of privacy will require to have a clear basis in domestic law if it is to be held not to amount to an interference in breach of article 8: Malone v United Kingdom (1984) 7 EHRR 14, para 67; Khan v United Kingdom (2000) 31 EHRR 1016, para 27. There may also be a violation if the information that has been gathered by covert methods about a persons private life is systematically collected and stored in a file held by agents of the state: Amann v Switzerland (2000) 20 EHRR 843, paras 65 67; Rotaru v Romania (2000) 8 BHRC 449, paras 43 44. This case is not concerned with interferences of that kind. There is a zone of interaction with others, even in a public context, which may fall within the scope of private life: PG and JH v United Kingdom (2001) 46 EHRR 1272, para 56. But measures effected in a public place outside the persons home or private premises will not, without more, be regarded as interfering with his right to respect for his private life. Occasions when a person knowingly or intentionally involves himself in activities which may be recorded or reported in public, in circumstances where he does not have a reasonable expectation of privacy, will fall into that category: PG and JH v United Kingdom, para 57. A person who walks down a street has to expect that he will be visible to any member of the public who happens also to be present. So too if he crosses a pavement and gets into a motor car. He can also expect to be the subject of monitoring on closed circuit television in public areas where he may go, as it is a familiar feature in places that the public frequent. The exposure of a person to measures of that kind will not amount to a breach of his rights under article 8. The Strasbourg court has not had occasion to consider situations such as that illustrated by the present case, where a persons movements in a public place are noted down by the police as part of their investigations when they suspect the person of criminal activity. But it could not reasonably be suggested that a police officer who came upon a person who has committed a crime in a public place and simply noted down his observations in his notebook was interfering with the persons right to respect for his private life. The question is whether it makes any difference that notes of his movements in public are kept by the police over a period of hours in a covert manner as part of a planned operation, as happened in this case. I think that the answer to it is to be found by considering whether the appellant had a reasonable expectation of privacy while he was in public view as he moved between his car and the block of flats where he lived and engaged in his other activities that day in places that were open to the public. Although Lord Macfadyen did not say so in as many words, it is plain that this was the basis for the decision in Gilchrist v HM Advocate. I would hold that it was rightly decided on this issue. There is nothing in the present case to suggest that the appellant could reasonably have had any such expectation of privacy. He engaged in these activities in places where he was open to public view by neighbours, by persons in the street or by anyone else who happened to be watching what was going on. He took the risk of being seen and of his movements being noted down. The criminal nature of what he was doing, if that was what it was found to be, was not an aspect of his private life that he was entitled to keep private. I do not think that there are grounds for holding that the actions of the police amounted to an infringement of his rights under article 8. For these reasons I would answer the first issue in the statement of facts and issues in the negative. As the only ground for the submission that the leading of the evidence was incompatible with the appellants rights under article 6(1) was that it had been obtained in a way that infringed his rights under article 8, the question raised by the second issue must be answered in the negative too. I would only add that it has not been suggested that there was any coercion or trickery by the police which, if it had been present, might have led to the conclusion that the appellant did not receive a fair trial: see Bykov v Russia, (Application No 4378/02), given 10 March 2009 (GC), paras 99 and 102. Conclusion I would dismiss the appeal.

On 6 February 2007, police officers carried out observations on the Appellant from about 0835 hours to about 1200 hours. He was seen leaving his car and entering the block of flats in which he lived, leaving the block carrying a bag and entering a car which then drove off. He was observed leaving various other locations and cars in Glasgow and then, carrying a bag which appeared to be heavy, entering a taxi which was later seen parked outside his brothers home. The police approached the taxi, and the Appellant and his brother were detained. Various searches were carried out and large sums of money were recovered by the police. On 16 December 2010 the Appellant was found guilty on indictment in Glasgow Sheriff Court of money laundering offences [3 4]. At a preliminary stage, the Appellant had lodged a devolution minute. He referred to article 8 of the European Convention on Human Rights which provides that everyone has a right to respect for his private life. He argued that the police had acted unlawfully because they had failed to obtain authorisation to conduct covert surveillance on him and his associates under the Regulation of Investigatory Powers (Scotland) Act 2000 (the 2000 Act). He asked the Court to hold that the surveillance was unlawful and that the fruits of that surveillance were inadmissible as evidence. The Sheriff refused the devolution minute and refused leave to appeal his decision [3 and 5 6]. Following his conviction, the Appellant appealed to the High Court of Justiciary. His first ground of appeal was that the Sheriff should have granted leave to appeal his decision to refuse the devolution minute. The Appellant conceded that the Sheriff was bound by the decision of the Appeal Court in Gilchrist v HM Advocate (which he said the prosecution had relied on when opposing the devolution minute) but argued that it was wrongly decided. The Appellants second ground of appeal was that the trial Sheriff was wrong to reject his no case to answer submission [8]. In the High Court of Justiciary, leave to appeal on both grounds was refused at the first and second sifts. On 2 November 2011 the Appeal Court, having heard counsel for the Appellant and without giving reasons, granted leave to appeal to the Supreme Court [9]. The parties agreed that the issue whether the observations of the police breached the Appellants rights under article 8 arose in the appeal to the Supreme Court. The Appellant maintained that the issue whether the act of leading that evidence was incompatible with the Appellants rights under article 8 and article 6 (to a fair trial) and therefore unlawful under the Scotland Act 1998 also arose, but the Respondent did not accept this [10]. The Supreme Court unanimously dismisses the appeal. There has been no interference with the Appellants rights under articles 8 and 6 of the Convention. The judgment is given by Lord Hope with whom all the other Justices agree. Taking it on its own terms, the devolution minute did not appear to raise a devolution issue at all. The question of whether the police acted in a way that is incompatible with the Appellants Convention rights is not a devolution issue. The only relevant devolution issue would have been whether the act of the Lord Advocate in leading the surveillance evidence would have been incompatible with the Appellants Convention rights. But no mention of the issue whether the Lord Advocate leading such evidence would have breached the Appellants article 6 right was made or appears to have been considered at any stage of the proceedings. There was no determination of the issue in the High Court of Justiciary because the question it raises was not before it. In terms of the Scotland Act 1998, the Supreme Court does not have an original jurisdiction in these matters. Except in regard to devolution issues as defined in the Scotland Act 1998, every order of the High Court of Justiciary is final and conclusive and not subject to review by any court whatsoever [11 13]. The proper course might well have been to dismiss this appeal as incompetent. But, with considerable hesitation, the Court decided that it should hear argument on the issue for three reasons in particular. First, the prosecution did not oppose the Appellants motion for leave to appeal to the Supreme Court. Second, the Appeal Court gave leave to appeal to the Supreme Court. Third, the Appellant was really seeking to re examine the correctness of the decision in the Gilchrist case (which was that surveillance evidence obtained without a valid 2000 Act authorisation led by the Lord Advocate was admissible). However, the Supreme Courts decision to hear the appeal should not be taken as an indication that it is not aware of the limits to its jurisdiction, or of its responsibility to ensure that those limits are respected. Devolution minutes should say what they mean [14]. Any breach of article 8 in obtaining the surveillance evidence in this case was due to acts of the police, not the Lord Advocate. The fact that evidence is irregularly obtained because there is no authorisation under the 2000 Act does not of itself make that evidence inadmissible at common law. Nor does the fact that the evidence is obtained in breach of article 8 necessarily mean that it would be incompatible with article 6 for that evidence to be led at the trial. Nevertheless, the key to the whole argument lies in what one makes of the underlying article 8 issue [15 17]. The Strasbourg Court has not yet considered the situation where a persons movements in a public place are noted down by the police as part of their investigations when they suspect the person of criminal activity. But it could not reasonably be suggested that a police officer who came upon a person who has committed a crime in a public place and simply noted down his observations in his notebook was interfering with the persons article 8 right. In this case, notes of the Appellants movements in public were kept by the police over a period of hours in a covert manner as part of a planned operation. However, there is nothing to suggest that the Appellant could reasonably have had any expectation of privacy. He engaged in his activities in places where he was open to public view by neighbours, by persons in the street or by anyone else who happened to be watching what was going on. He took the risk of being seen and of his movements being noted down. The criminal nature of what he was doing, if that was what it was found to be, was not an aspect of his private life that he was entitled to keep private [20 21]. On the first issue in the appeal, there are no grounds for holding that the actions of the police amounted to an infringement of the Appellants rights under article 8. It is plain that the absence of a reasonable expectation of privacy was the basis for the decision in Gilchrist, which was rightly decided in this respect. On the second issue in the appeal, it follows that there has been no breach of article 6, since the only ground for arguing this was that there had been a breach of article 8 [21 22].

This appeal tests the limits, in a modern context, of the long-established remedy known as the solicitors equitable lien. In its traditional form it is the means whereby equity provides a form of security for the recovery by solicitors of their agreed charges for the successful conduct of litigation, out of the fruits of that litigation. It is a judge-made remedy, motivated not by any fondness for solicitors as fellow lawyers or even as officers of the court, but rather because it promotes access to justice. Specifically it enables solicitors to offer litigation services on credit to clients who, although they have a meritorious case, lack the financial resources to pay up front for its pursuit. It is called a solicitors lien because solicitors used to have a virtual monopoly on the pursuit of litigation in the higher courts. Nothing in this judgment should be read as deciding whether the relaxation of that monopoly means that the lien is still limited only to solicitors. Solicitors have, since time immemorial, been entitled to a common law retaining lien for payment of their costs and disbursements. That is an essentially defensive remedy, which merely enables them to hold on to their clients papers and other property in their actual possession, pending payment. It affords no assistance where there is nothing of value in the solicitors possession, and is powerless where, in a litigation context, the defendant to the claim pays the judgment debt or agreed settlement amount direct to the solicitors client, the claimant. But equity deals with that deficiency in the common law by first recognising, and then enforcing, an equitable interest of the solicitor in the fruits of the litigation, against anyone who, with notice of it, deals with the fruits in a manner which would otherwise defeat that interest. Originally the fruits of the litigation were first identified in the judgment debt. Later this was extended to the debt due under an arbitration award and, later still, to the debt due to the claimant under an agreement to settle the claim. Each of those types of debt was identified as a form of property, a chose in action, in which equity could recognise and enforce an equitable interest in favour of the solicitor. It was called a lien because the chose in action represented the fruits of the solicitors work. But it is better analysed as a form of equitable charge. Traditionally, the solicitors interest could not be identified as a beneficial share in the chose, because that would have offended the laws against maintenance and champerty. Rather it was, from the earliest times, recognised as a security interest, enforceable against the fruits of the litigation up to the amount contractually due to the solicitor, in priority to the interest of the successful client, or anyone claiming through him. It did not depend upon the fruits of the litigation including a specific amount for party and party costs, such as a judgment for costs, or an element in a settlement sum on account of costs. In the ordinary course of traditional litigation, with solicitors acting on both sides, the amount due under a judgment, award or settlement agreement would be paid by the defendants solicitor to the claimants solicitor. Or the claimants solicitor might recover the sum due to his client by processes of execution. In either case the equitable lien would entitle the solicitor not merely to hold on to the money received, but to deduct his charges from it before accounting to his client for the balance. But equity would also enforce the security where the defendant (or his agent or insurer) paid the debt direct to the claimant, if the payer had either colluded with the claimant to cheat the solicitor out of his charges, or dealt with the debt inconsistently with the solicitors equitable interest in it, after having notice of that interest. In an appropriate case the court would require the payer to pay the solicitors charges again, direct to the solicitor, leaving the payer to such remedy as he might have against the claimant. This form of remedy, or intervention as it is sometimes called, arose naturally from the application of equitable principles, in which equitable interests may be enforced in personam against anyone whose conscience is affected by having notice of them, either to prevent him dealing inconsistently with them, or by holding him to account if he does. The modern context in which the extent of this remedy comes to be reviewed is that of the pursuit of modest claims for personal injuries arising out of road traffic accidents, by solicitors retained under a Conditional Fee Agreement (CFA) using the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the RTA Protocol). In bare outline this highly effective scheme, hammered out by stakeholders under the auspices of the Civil Justice Council and approved by the Civil Procedure Rule Committee, enables modest claims for personal injuries to be notified by the claimants solicitors to the defendants insurer using a bespoke online platform (The RTA Portal) and, where liability is admitted, for a settlement to be negotiated, or quantum to be determined by the court, at a fraction of the cost and effort which would have to be deployed if the matter were to become the subject of ordinary proceedings in the County Court, and on terms which reward the claimants solicitors with modest fixed costs for their work on the process. It is an express objective of the RTA Protocol, and its provisions are designed so to ensure, that the solicitors are paid their fixed costs and charges at each stage of the process, direct by the defendants insurer. The casus belli for this litigation was a decision by the appellant insurer (Haven) to respond to the notification of claims on the RTA Portal by offering to settle direct with claimants, on terms which included no amount for their solicitors costs or disbursements (fixed or otherwise), with the twin inducements to claimants of a speedier and more generous payment than would be likely to be available from a settlement using the RTA Protocol and Portal. The motivation of the insurer was the opportunity to avoid having to add, to the settlement amount for the injury, the fixed costs and disbursements payable under the terms of the RTA Protocol to the claimants solicitors. Settlements thereby achieved included claims by clients of the respondent solicitors (Edmondson) arising from three motor accidents, all of whom retained the respondent firm on a particular type of identically worded CFA retainer, known in the trade as a CFA Lite, designed to ensure that in no circumstances would the client have to put his hands in his own pocket for payment of the firms charges. Edmondson responded by a claim against Haven for wrongful inducement to the clients to breach their retainer contract, intentional causing of loss by unlawful means and, by amendment, seeking equitable enforcement of its solicitors lien. Although the sums involved are individually modest, we were told that this practice by Haven had been repeated on a sufficiently large scale for the determination of the dispute to have financial consequences running to many millions of pounds. The trial judge (HHJ Jarman QC) rejected the claims in tort and refused to grant permission to appeal in respect of those claims. An application for permission was made to the Court of Appeal, but not dealt with because of its disposal of the claim to enforce the solicitors lien. That claim was rejected by the trial judge because, in his view, there had been no collusion between Haven and the claimants to cheat the solicitors, and because Haven was not on notice of the terms of the retainers. In the Court of Appeal [2015] EWCA Civ 1230; [2016] 1 WLR 1385 the main submission of Haven was that the particular terms of the CFA Lite retainers created no contractual liability of the claimants for Edmondsons charges, so that there was nothing upon which an equitable security could be founded. The Court of Appeal agreed that there was no such contractual liability upon the true construction of the retainers. Nonetheless it decided that the equitable jurisdiction to intervene could be extended far enough to enable the court to recognise and then enforce an interest of Edmondson under the RTA Protocol in receiving its fixed costs and charges as therein provided or, alternatively, an interest under an express provision in the retainers to sue in its clients names for recovery of those charges from Haven, and that Haven knew of those interests. Accordingly the Court of Appeal ordered Haven to pay the charges allowable under the RTA Protocol to Edmondson, in addition to the settlement sums already paid to the claimants. In this court Haven repeated its main submission that the retainers created no contractual liability to pay the charges upon which an equitable lien or charge could be founded, and submitted that the Court of Appeal had been wrong to extend the equity of intervention as it did, the extension being contrary to settled principle. Edmondson countered first by asserting that the retainers did contain a sufficient contractual liability of the clients for their charges to support their equitable lien on conventional grounds. Secondly, and in the alternative, Edmondson vigorously supported the extended power of equitable intervention in the absence of such a contractual liability, as devised by the Court of Appeal. This court permitted The Law Society of England and Wales to intervene in writing, broadly in support of the solution devised by the Court of Appeal, and to submit written evidence about the widespread use of the CFA Lite, and the use of the RTA Protocol. The court is grateful for the submissions both of the parties and of the Law Society. This is, according to the researches of counsel, the first occasion for this court (or its predecessor) to consider the nature and effect of the solicitors equitable lien. It is therefore appropriate to describe its evolution in a little more detail than might otherwise have been necessary. Before doing so, I must first summarise the facts, set out the relevant terms of the CFA Lite retainer, and describe the terms and modus operandi of the RTA Protocol. The Facts I must first describe the particular facts about each accident, and the steps taken to settle the claims arising from them. I do so, with gratitude, from the summary given in the judgment of Lloyd Jones LJ in the Court of Appeal. Ainsley Tonkin Mr Ainsley Tonkin was involved in a road traffic collision on 10 April 2012. Havens insured was also involved in the collision and on the 12 April 2012. Haven, having obtained Mr Tonkins contact details from its insureds accident report form, contacted Mr Tonkin concerning a hire vehicle. On 16 April 2012 Mr Tonkin entered into a CFA with Edmondson and on 17 April 2012 the case entered the Portal. On 20 April 2012 Mr Tonkin telephoned Haven asking where they go from here. He was told by Louise Richardson of Haven: ... What we can do is offer you a scheme to compensate you for your injury. We can work out a sum of money and you can put it into your account as soon as you agree on that figure. Mr Tonkin told Ms Richardson that he had his insurance solicitor and volunteered the information that there was a 14-day cooling off period. They then negotiated on the telephone and Ms Richardson offered 2,200. She said: So the offer stands at the moment at two thousand two hundred pounds and obviously [indecipherable] think about it but if you do ask your solicitors they will tell you that they can get you more ... but at the end of the day that offer will come from myself and we through solicitors we have to pay solicitor costs as well. Mr Tonkin replied that he fully understood that and went on to raise other matters. They eventually negotiated a settlement at 2,350. Mr Tonkin asked what he should do about the solicitors he had instructed. Ms Richardson said he should just call them and tell them that he did not want to deal with them any more and they could just close the claim. On 23 April 2012 Haven sent a written offer of settlement to Mr Tonkin who on 24 April 2012 completed and signed the mandate of acceptance which was returned to Haven on 26 April. The mandate of acceptance confirmed that the offer was accepted: in full and final settlement of my claim for Pain, Suffering & Loss of Amenity in respect of injuries sustained and any financial losses incurred in relation to the road traffic accident. Michael Wheater, Dale Makey, Saul Mohsin and Rose Lunt On 23 June 2012, Mr Michael Wheater, Mr Dale Makey, Mr Saul Mohsin and Ms Rose Lunt were all travelling in the same vehicle when it was involved in a road traffic accident. On 20 July 2012 all four entered into CFAs with Edmondson and on 23 July 2012 their cases entered the Portal. On 24 July 2012 Haven sent to each of them a letter containing an offer of settlement. On 7 August 2012 Mr Mohsin telephoned Mr OConnell of Haven who told him that we offer services if you want to come to us to avoid going to the solicitors. Mr Mohsin explained that he had actually gone to some solicitors but he was concerned that it was going to take a long time to get everything settled. Later that day Mr Mohsin telephoned Haven again with the news that he had spoken to Mr Wheater, Mr Makey and Ms Lunt and that they were all going to accept the offer. On the same day Mr Mohsin sent an email enclosing mandates of acceptance completed by all four claimants. Daniel Grannell Mr Daniel Grannell was involved in a road traffic accident on 30 August 2012. On the following day he entered into a CFA with Edmondson and his case entered the Portal that day. On 10 September 2012 Haven sent Mr Grannell a letter offering to settle the claim for 1,900. On 14 September 2012 Haven received a completed mandate of acceptance signed by Mr Grannell on 13 September 2012. Thereafter an impostor claiming to be Mr Grannell spoke by telephone with Haven and the compensation was paid to an account on his directions. When Mr Grannell subsequently contacted Haven, Haven became aware that it had been defrauded. In a telephone conversation on 6 November 2012 Mr Grannell stated that the mandate of acceptance dated 13 September 2012 was genuine. Mr Ralph McClaren of Haven told him that the offer of 1,900 was still on the table and that he could arrange for that to be paid at once. Mr Grannell replied that he would love that. Mr McClaren then said that he would contact Edmondson and tell Edmondson what they had done. He then added: As I say theyll probably when you speak to them theyll probably will tell you not to ya know or you shouldnt do that but for the to be honest with you if when they call you probably a bit less the reason we offer you a bit more is because of the fact the solicitors get kept out of it so we don't have to pay their fees thats basically it. Mr Grannell said he was absolutely happy with that. The facts relevant to the issue about notice were the same in all three cases. As will shortly appear, the RTA Protocol prescribes a simple online form of notification of a claim (a Claim Notification Form or CNF) which contains a tick box opposite a statement that the solicitors had been retained under a CFA which provided for a success fee. In each case Edmondson ticked the box and filled in the date of the retainer. Thus Haven knew that information via the Portal before it began negotiating with the claimants. Haven did not know the detailed terms of the retainers, which I shall now describe. The CFA Lite Retainers Each of the claimants retained Edmondson on identical terms. They were each sent, on the same day, the following documents. First, a document headed (under the firms logo) CFA, containing these relevant provisions: This agreement is a binding legal contract between you and your solicitor/s. Before you sign, please read everything carefully. This agreement must be read in conjunction with the Law Society document What you need to know about a CFA. Paying us If you win your claim, you pay our basic charges, our disbursements and a success fee. You are entitled to seek recovery from your opponent of part or all of our basic charges, our disbursements, a success fee and insurance premium as set out in the document What you need to know about a CFA. The Success Fee The success fee is set at 100% of basic charges, where the claim concludes at trial; or 12.5% where the claim concludes before a trial has commenced. In addition 5% relates to the postponement of payment of our fees and expenses and cannot be recovered from your opponent. The Success fee inclusive of any additional percentage relating to postponement cannot be more than 100% of the basic charges in total. Secondly, they were sent the Law Society document referred to in the above quotation. It is a standard form document published in 2005. It contained the following relevant provisions. What do I pay if I win? If you win your claim, you pay our basic charges, our disbursements and a success fee. The amount of these is not based on or limited by the damages. You can claim from your opponent part or all of our basic charges, our disbursements, a success fee and insurance premium. Basic charges These are for work done from now until this agreement ends. These are subject to review. Under the heading How we calculate our basic charges the document sets out a table of hourly rates. Road Traffic Accidents If your claim is settled before proceedings are issued, for less than 10,000, our basic costs will be 800; plus 20% of the damages agreed up to 5,000; and 15% of the damages agreed between 5,000 and 10,000. [If you live in London, these costs will be increased by 12.5%]. These costs are fixed by the Civil Procedure Rules. Provision is then made for charging VAT. Dealing with costs if you win You are liable to pay all our basic charges, our disbursements and success fee. Normally, you can claim part or all of our basic charges, our disbursements success fee and insurance premium from your opponent. If we and your opponent cannot agree the amount, the court will decide how much you can recover. If the amount agreed or allowed by the court does not cover all our basic charges and our disbursements, then you pay the difference. You will not be entitled to recover from your opponent the part of the success fee that relates to the cost to us of postponing receipt of our charges and our disbursements. This remains payable by you. As with the costs in general, you remain ultimately responsible for paying our success fee. You agree to pay into a designated account any cheque received by you or by us from your opponent and made payable to you. Out of the money, you agree to let us take the balance of the basic charges; success fee; insurance premium; our remaining disbursements; and VAT. You take the rest. We are allowed to keep any interest your opponent pays on the charges. If your opponent fails to pay If your opponent does not pay any damages or charges owed to you, we have the right to take recovery action in your name to enforce a judgment, order or agreement. The charges of this action become part of the basic charges. In a lengthy definitions section there is this definition of win: Win Your claim for damages is finally decided in your favour, whether by a court decision or an agreement to pay you damages or in any way that you derive benefit from pursuing the claim. The third document is the Client Care Letter. It deals with a number of miscellaneous aspects of the solicitor client relationship and is not primarily drafted as a contractual document. But it contains the following relevant provisions: Costs: In this case we have advised and you have elected to enter into a conditional fee agreement. Full details of the terms of the agreement and our charging rates are set out within the conditional fee agreement and the accompanying schedules. For the avoidance of any doubt if you win your case I will be able to recover our disbursements, basic costs and the success fee from your opponent. You are responsible for our fees and expenses only to the extent that these are recovered from the losing side. This means that if you win, you pay nothing. It is this last quoted passage that is said to make the retainer a CFA Lite, because of its evident intent to assure the client that he will not in any circumstances have to put his hand in his own pocket to pay his solicitors. The RTA Protocol This voluntary pre-action protocol came into force in 2010. At the relevant time for present purposes it applied to claims for RTA personal injuries between 1,000 (which was the dividing line between the Fast Track and the Small Claims Track) and 10,000. It has since been extended to higher value claims, up to 25,000, which corresponds with the boundary between the Fast Track and the Multi Track. Current Government proposals to raise the Small Claims Track boundary to 5,000 for RTA cases may greatly affect its scope, since more that 90% by number of RTA cases are for damages below that level. I can again take the summary of the relevant provisions of the RTA Protocol from the judgment of Lloyd Jones LJ in the Court of Appeal. The Protocol describes in great detail the behaviour the court will normally expect of parties, of their legal representatives and of the parties insurers, involved in such claims. Under the Protocol scheme parties, lawyers and insurers, when required to send information to one another, are expected to do so electronically through a website (the Portal) established by road accident insurers. While notice of claims falling within the Protocol is expected to be given in accordance with the procedures set out in the Protocol, they are not mandatory. However, there are possible costs consequences if qualifying claims are not processed in accordance with the Protocol. The preamble to the RTA Protocol states: 2.1 This Protocol describes the behaviour the court will normally expect of the parties prior to the start of proceedings where a claimant claims damages valued at no more than 10,000 as a result of a personal injury sustained by that person in a road traffic accident. The aims of the Protocol are set out in paragraph 3.1. 3.1 The aim of this Protocol is to ensure that (1) the defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings; (2) damages are paid within a reasonable time; and (3) the claimants legal representative receives the fixed costs at the end of each stage in this Protocol. Claims which no longer continue under the Protocol cannot subsequently re-enter the process. (Paragraph 5.11) The process is initiated by the completion of the Claim Notification Form (CNF). Paragraph 6.1 provides: 6.1 The claimant must complete and send - (1) the CNF to the defendants insurers; ... The RTA Protocol makes provision for response by the insurer as follows: 6.10 The defendant must send to the claimant an electronic acknowledgment the next day after receipt of the CNF; 6.11 The defendant must complete the Insurer Response section of the CNF (the CNF response) and send it to the claimant within 15 days; 6.15 The claim will no longer continue under this Protocol where the defendant, within the period in paragraph 6.11 or 6.13 - (1) makes an admission of liability but alleges contributory negligence (other than in relation to the claimants admitted failure to wear a seat belt); (2) does not complete and send the CNF response; (3) does not admit liability; or (4) notifies the claimant that the defendant considers that (a) there is inadequate mandatory information in the CNF; or (b) if proceedings were issued, the small claims track would be the normal track for that claim. The Protocol makes provision for fixed costs to be paid at specified points. Paragraph 6.18 makes provision for Stage 1 fixed costs. 6.18 Except where the claimant is a child, the defendant must pay the Stage 1 fixed costs in rule 45.29 where liability is admitted; or (1) liability is admitted and contributory negligence (2) is alleged only in relation to the claimants admitted failure to wear a seat belt, within ten days after sending the CNF response to the claimant as provided in paragraph 6.11 or 6.13. If the claim proceeds to Stage 2, the Protocol requires a Stage 2 Settlement Pack including a medical report to be sent to the defendant within 15 days of the claimant approving a final medical report and agreeing to rely on it. (Paragraph 7.26). There is a 35 day period for consideration of the Stage 2 Settlement Pack by the defendant (Paragraph 7.28). Paragraph 7.37 provides: 7.37 Any offer to settle made at any stage by either party will automatically include, and cannot exclude - (1) (2) (3) the Stage 2 fixed costs in rule 45.29; an agreement in principle to pay disbursements; a success fee in accordance with rule 45.31(1). Paragraph 7.40 provides in respect of Settlement: (1) 7.40 Except where the claimant is a child or paragraphs 7.41 and 7.42 apply, the defendant must pay - the agreed damages less any (a) deductible amount which is payable to the CRU; and (b) previous interim payment; any unpaid Stage 1 fixed costs in rule 45.29; the Stage 2 fixed costs in rule 45.29; the (2) (3) (4) accordance with rule 45.30; and (5) a success fee in accordance with rule 45.31 for Stage 1 and Stage 2 fixed costs, within ten days of the end of the relevant period in paragraphs 7.28 to 7.30 during which the parties agreed a settlement. relevant disbursements allowed in Part 36 CPR - Offers to Settle, has been amended to take account of the Protocol. Part 45 CPR, Fixed Costs, makes specific provision for costs under the Protocol scheme. The Solicitors Equitable Lien: the Existing Law The earliest decision to recognise the equitable lien is Welsh v Hole (1779) 1 Dougl KB 238. The plaintiff obtained judgment for 20 and costs in a civil claim for assault, but then compromised the claim for a direct payment by the defendant of 10. There was no collusion to defeat the solicitors right to payment of his bill. Lord Mansfield said this: An attorney has a lien on the money recovered by his client, for his bill of costs; if the money come to his hands, he may retain to the amount of his bill. He may stop it in transit if he can lay hold of it. If he apply to the Court, they will prevent its being paid over till his demand is satisfied. I am inclined to go still farther, and to hold that, if the attorney give notice to the defendant not to pay till his bill should be discharged, a payment by the defendant after such notice would be in his own wrong, and like paying a debt which has been assigned, after notice. But I think we cannot go beyond those limits. There having been no notice in that case, the solicitors claim against the defendant failed. It is implicit in Lord Mansfields reasoning that, if there had been notice to the defendant, he would have had to pay a second time, up to the amount of the solicitors bill. The typically terse judgment may be said to have dealt with legal and equitable lien without clearly distinguishing between the two, but the analogy of an assigned debt shows that Lord Mansfield recognised that the solicitor had an interest in the judgment debt which the court would protect, provided that notice of that interest had been given to the debtor before payment to the judgment creditor. An interest dependent upon notice is typical of an equitable interest. Confirmation that payment of the judgment debt to the claimant after notice of the solicitors interest exposed the payer to having to pay again was provided in Read v Dupper (1795) 6 Term Rep 361. In that case the defendants solicitor paid the plaintiff direct, after notice of the plaintiffs solicitors interest, and had to pay again. Lord Kenyon began: The principle by which this application is to be decided was settled long ago, namely that the party should not run away with the fruits of the cause without satisfying the legal demands of his attorney, by whose industry, and in many instances at whose expense, those fruits are obtained. Lord Kenyon explained Lord Mansfields reference to assignment in Welsh v Hole in terms of equitable principle. He said: according to the rules of equity and honest dealing if the assignee give notice to the debtor of such assignment, he shall not afterwards be suffered to avail himself of a payment to the principal in fraud of such notice. In Ormerod v Tate (1801) 1 East 464 the fruits consisted of the debt arising from an arbitration award. That appears to have been a case of collusion, because Lord Kenyon described the arrangement to pay the claimant direct as: no other than a mere shuffle between the plaintiff and defendant to cheat the attorney of his lien. He described the extension of the principle to accommodate arbitration awards as justified by convenience, good sense and justice and recognised a public interest in the extension, to encourage litigants to use arbitration. Two early cases demonstrate that access to justice lay behind the development of the principle. The first is Ex p Bryant (1815) 1 Madd 49. Vice Chancellor Plumer said: I do not wish to relax the doctrine as to lien, for it is to the advantage of clients, as well as solicitors; for business is often transacted by solicitors for needy clients, merely on the prospect of having their costs under the doctrine as to lien. The Vice Chancellor also said, obiter, that knowledge of the solicitors lien on the part of the payer would be as effective as notice. To the same effect is Gould v Davis (1831) 1 Cr & J 415. The second case is In re Moss (1866) LR 2 Eq 345, although it was about a legal rather than equitable lien. Lord Romilly MR said: I think it of great importance to preserve the lien of solicitors. That is the real security for solicitors engaged in business. It is also beneficial to the suitors. It would frequently happen, but for the lien which solicitors have upon papers and deeds, that a client who is not able to advance money to enable them to carry on business would be deprived of justice, through inability to prosecute his claims in the suit. Barker v St Quintin (1844) 12 M & W 441 shows, better than any other, that the equitable lien operates by way of security or charge. Baron Parke said: The lien which an attorney is said to have on a judgment (which is, perhaps, an incorrect expression) is merely a claim to the equitable interference of the Court to have that judgment held as a security for his debt. A similar analysis is provided by Lord Hanworth MR in Mason v Mason and Cottrell [1933] P 199, at 214. The use of the concepts security and charge imply that there must be identified some fund over which it can operate. This was described as a necessary condition of equitable interference under this principle in In re Fuld decd (No 4) [1968] P 727, per Scarman J at 736. The requirement for a fund may be satisfied not just by a judgment debt or arbitration award, but also by a debt arising from a settlement agreement. Provided that the debt has arisen in part from the activities of the solicitor there is no reason in principle (and none has been suggested) why formal proceedings must first have been issued, all the more so in modern times when parties and their solicitors are encouraged as a matter of policy to attempt to resolve disputes by suitable forms of ADR, and when pre-action protocols of widely differing kinds have been developed precisely for that purpose. The authorities on the solicitors equitable lien (including many of those summarised above) were recently reviewed by the Court of Appeal in Khans Solicitors v Chifuntwe [2014] 1 WLR 1185. The fund in question consisted of a debt arising from the agreement of the Home Secretary to settle pending judicial review proceedings by a payment of a specific sum on account of the claimants costs. The payment was made direct by the Treasury Solicitor to the claimant (by then acting in person) after express notice from the claimants former solicitors that they claimed a lien. The Home Secretary was ordered to pay the settlement sum a second time to the solicitors, less an amount already paid by the client on account. Sir Stephen Sedley provided this summary, at para 33: In our judgment, the law is today (and, in our view, has been for fully two centuries) that the court will intervene to protect a solicitors claim on funds recovered or due to be recovered by a client or former client if (a) the paying party is colluding with the client to cheat the solicitor of his fees, or (b) the paying party is on notice that the other partys solicitor has a claim on the funds for outstanding fees. The form of protection ought to be preventative but may in a proper case take the form of dual payment. I consider that to be a correct statement of the law. It recognises that the equity depends upon the solicitor having a claim for his charges against the client, that there must be something in the nature of a fund against which equity can recognise that his claim extends (which is usually a debt owed by the defendant to the solicitors client which owes its existence, at least in part, to the solicitors services to the client) and that for equity to intervene there must be something sufficiently affecting the conscience of the payer, either in the form of collusion to cheat the solicitor or notice (or, I would add knowledge) of the solicitors claim against, or interest in, the fund. The outcome of the case also recognised that the solicitors claim is limited to the unpaid amount of his charges. Implicit in that is the recognition that the solicitors interest in the fund is a security interest, in the nature of an equitable charge. It remains to consider whether the decision of the Court of Appeal in the present case is either an application of that settled principle, or a legitimate extension of it, in the context of its finding that Edmondson had no contractual entitlement to its charges from any of the claimants, but only the expectation of receiving fixed costs, disbursements and a success fee under the terms of the RTA Protocol. But it is first necessary to determine whether or not Edmondson did have a contractual entitlement to its charges under the CFA. Construction of the CFA - Does the client have any contractual liability to pay the solicitors charges? At the heart of the Court of Appeals analysis lay a negative answer to that question. Like the trial judge, Lloyd Jones LJ identified a tension between the terms of the CFA itself (incorporating the Law Societys standard 2005 terms) and the last quoted passage in the Client Care Letter which, being labelled for the avoidance of any doubt, was held to prevail. At para 18 he said: The solicitor has no recourse against his client for the fees and is limited to what he can recover from the losing side. Later, at para 30, he continued: I consider that the effect of the client care letter is to override the general provisions in each CFA with the result that the underlying claimants were not under any personal liability to pay the fees of Edmondson. Rather, Edmondson has limited its fees to what may be recovered from the defendants in the underlying proceedings. In these circumstances, Edmondson would not have a lien over assets received on its clients account because there is no underlying liability of the clients to Edmondson for the lien to protect. I respectfully disagree. In my judgment, for the reasons which follow, the Client Care Letter did not destroy the basic liability of the client for Edmondsons charges expressly declared in the CFA and Law Societys standard terms. It merely limited the recourse from which Edmondson could satisfy that liability to the amount of its recoveries from the defendant. It both preserved and in my view affirmed that basic contractual liability, to the full extent necessary to form the basis of a claim to an equitable charge as security. The first question is whether the Client Care Letter had contractual effect at all. Both it and the two other documents sought to make it clear that the full terms of the retainer were to be found in the CFA document and in the incorporated Law Society terms. Nonetheless I am prepared to assume, in favour of the client, that the last quoted passage in the Client Care Letter was either part of the contract of retainer, or a collateral contract. I consider that the language of that passage does three things. First, it asserts a right for Edmondson to recover its fees and charges from the defendant. That affirms the equitable lien, since there would otherwise be no basis upon which Edmondson could do so. Secondly it states in clear terms that such a recovery is the means by which Edmondson can give effect to a continuing responsibility of the client for those fees. Thirdly it limits Edmondsons recourse for the fees to the amount recovered from the defendant. There is in my view a compelling parallel in a limited recourse secured loan agreement. A lender may lend a million pounds to a borrower, take valuable security, and then agree to limit his recourse to the amount recovered by enforcing that security. It would be absurd to say that the lender thereby deprived the security of all effect because the borrower would not have to put his hand in his pocket to pay anything in addition. The Client Care Letter was plainly intended to be read, so far as possible, in accordance with, rather than in opposition to, the CFA and Law Societys terms. Those two documents are, in the passages from them quoted above, shot through with clear assertions of the clients responsibility for the firms charges in the event of a win in the litigation, which is defined to include a settlement of the claim under which there is an agreement to pay the claimant damages. Full effect can be given to the objective stated in the Client Care Letter, that the client should not have to put his hand in his own pocket to pay the solicitors charges, without destroying the basic contractual responsibility of the client for their payment, if it is construed as I have described. Did Haven have Notice of Edmondsons Lien? The result of the above analysis is that there did exist, in each of the six cases, a sufficient contractual entitlement of Edmondson against its claimant clients to form the basis of a claim to an equitable lien over the agreed settlement debts payable by Haven on behalf of its insured drivers. The conventional analysis therefore requires the following questions to be answered: (1) did those settlement debts owe their creation, to a significant extent, to Edmondsons services provided to the claimants under the CFAs? and (2) in the absence of collusion did Haven have notice (or knowledge) of Edmondsons interest in the settlement debts? There has been no challenge to an affirmative answer to the first question, save in the case of Mr Tonkin, to which I shall return below. Edmondson completed and lodged the CNFs onto the RTA Portal as the first step in its discharge of its duties under its retainers. Each CNF contained a sufficient description of the clients claims and an indication that, unless settled, they would in due course lead to litigation. Even though it did not involve Edmondson in much work, it was enough to trigger Edmondsons entitlement to its basic charge, disbursements and success fee under the CFA terms if there ensued a successful outcome to the claim, and enough to galvanise Haven into making a direct settlement offer to each of the claimants. The question of knowledge or notice is in dispute. Absence of notice was the main reason why the claims failed before the judge. In his view it was a fatal objection that Haven did not know the detailed terms of the CFAs. In the Court of Appeal it was held that Haven had both express notice, implied notice and the requisite knowledge in any event. The claim under the traditional principles of equitable lien failed, not because of absence of notice, but because there was no underlying responsibility of the clients to pay Edmondsons charges. It is common ground that, by the time that Haven paid the settlement sums direct to the claimants, it knew that each of them had retained Edmondson under a CFA, but not its detailed terms. This much was apparent from the CNFs which Edmondson placed on the Portal. Haven also knew, from the fact that Edmondson chose to initiate each claim by using the RTA Portal, that Edmondson was most unlikely to have been paid its charges up front, but rather that it expected, if successful, to obtain payment of its charges from monies paid by Haven under the terms of the RTA Protocol, if the case settled while in the Portal, or by way of a costs order if it went to court. Either way, Haven knew that Edmondson was looking to the fruits of the claim for recovery of its charges. Havens knowledge that, if the claim could not be settled direct, it would have to fund Edmondsons recoverable charges is also apparent from the recorded telephone conversations with Mr Tonkin and Mr Grannell set out above. The judge found that Haven had this knowledge, and intended by settling direct to avoid having to pay Edmondsons charges. The claim of collusion failed, not because Haven lacked the requisite intent, but because each of the claimants did. In my judgment the Court of Appeals approach to the question of notice is to be preferred to that of the judge. Once a defendant or his insurer is notified that a claimant in an RTA case has retained solicitors under a CFA, and that the solicitors are proceeding under the RTA Protocol, they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable, as an interference with the solicitors interest in the fruits of the litigation. The very essence of a CFA is that the solicitor and client have agreed that the solicitor will be entitled to charges if the case is won. Recovery of those charges from the fruits of the litigation is a central feature of the RTA Protocol. The re-formulation of the Equitable Lien by the Court of Appeal This courts conclusion that the CFAs made between Edmondson and its clients did contain a sufficient contractual entitlement to charges to support the equitable lien on traditional grounds makes it strictly unnecessary to address this further question, because the sub-stratum upon which it is based is missing. There is simply no need, on these facts, to do more than apply the principles summarised in the Khans case, to reach the conclusion that Edmondson are entitled to have Haven pay them the charges identified in the CFAs as recoverable in the event of a win, to the extent that those charges did not exceed the settlement sums actually agreed to be paid to the claimants. But the correctness or otherwise of the Court of Appeals reformulation of the principle has been extensively argued, and supported by the Law Society as intervener. The Court of Appeal rested its conclusion on two alternative grounds, both of which assumed that Edmondsons clients had no contractual responsibility of any kind for its charges. The first was that Edmondson had its own entitlement to recover its charges from Haven under the RTA Protocol. The second was that the clients had such an entitlement, and Edmondson had a right to sue Haven for its enforcement using the clients name for that purpose. There are in my judgment insuperable obstacles in the way of each of those alternatives. They stem mainly from the voluntary nature of the RTA Protocol. It is not contractual in nature (although participants do undertake certain irrelevant contractual obligations to PortalCo, which operates the RTA Portal). A failure to comply with some provisions, such as the requirement to lodge a CNF response within 15 days, automatically leads to the case leaving the scheme. Other breaches of its terms entitle, but do not oblige, the other party to take the case out of the scheme. True it is that, in a case where liability is not in issue, the solicitor participant has an expectation that it will receive its charges stage by stage under the scheme from the defendants insurer, but that is not a contractual or other legal right. Generally, breach of protocol terms may lead to adverse costs orders if the matter then becomes the subject of proceedings in court, but this lies in the discretion of the court. For this purpose I am prepared to assume that an offer of a settlement payment, made direct by the insurer to the claimant, which makes no provision for payment of Stage 2 fixed costs, disbursements and a success fee to the solicitor, at a time when a case has entered and not yet left the scheme, is a breach of paragraph 7.37 of the RTA Protocol. But it creates no legal or equitable rights of any kind, if the client has no responsibility to the solicitor sufficient to support the solicitors lien. There is no legal entitlement of the solicitor direct against the insurer which the lien can support by way of security. As for suing in the name of the client, this is (as counsel agreed) a form of contractual subrogation. The solicitor can be in no better position than the client, as against the insurer. In the present case, all the clients contracted with Haven to receive settlement sums which did not include a costs element, and were paid in full. Any attempt by Edmondson to stand in their shoes by way of subrogation would be met by an unanswerable defence from Haven, based upon the settlement agreements. Counsel for Edmondson presented a detailed and vigorous submission to the effect that the flexibility of the equitable remedy for the protection of solicitors was apt to respond to any instance of unconscionable conduct by the insurer, including breach of the RTA Protocol, all the more so because of the strong public policy in enforcing the scheme, designed as it was to balance the competing interests of its stakeholders while ensuring access to justice for the victims of road accidents at proportionate cost. He sought to show, by reference to the cases which I have summarised, that this remedy had that flexibility from the outset. I acknowledge that equity operates with a flexibility not shared by the common law, and that it can and does adapt its remedies to changing times. But equity nonetheless operates in accordance with principles. While most equitable remedies are discretionary, those principles provide a framework which makes equity part of a system of English law which is renowned for its predictability. I have sought to identify from the cases the settled principles upon which this equitable remedy works. One of them is that the client has a responsibility for the solicitors charges. It is simply wrong in my view to seek to distil from those cases a general principle that equity will protect solicitors from any unconscionable interference with their expectations in relation to recovery of their charges. Furthermore the careful balance of competing interests enshrined in the RTA Protocol assumes that a solicitors expectation of recovery of his charges from the defendants insurer is underpinned by the equitable lien, based as it is upon a sufficient responsibility of the client for those charges. Were there no such responsibility, it is hard to see how the payment of charges to the solicitor, rather than to the client, would be justified. Furthermore, part of the balance struck by the RTA Protocol is its voluntary nature. Its voluntary use stems from a perception by all stakeholders that its use is better for them than having every modest case go to court. If the court were to step in to grant coercive remedies to those affected by its misuse by others, that balance would in all probability be undermined. Mr Tonkin It was submitted for Haven that the particular facts about Mr Tonkins case did not entitle Edmondson to an equitable lien because, it was said, Edmondsons work pursuant to its retainer made no significant contribution to the settlement. The submission was that Haven offered Mr Tonkin a settlement before, and without regard to, Edmondson logging Mr Tonkins claim onto the Portal. I disagree. The relevant chronology is as follows. On 12 April 2012, shortly after the accident, Haven contacted Mr Tonkin to discuss the provision of a hire car for him. This had nothing to do with a personal injury claim, although of course it arose from the same accident. Mr Tonkin and Edmondson entered into a CFA for the purpose of pursuing his personal injury claim on 16 April and, on the following day, Edmondson logged the details of that claim onto the Portal. Three days later, on 20 April, and after Haven had acknowledged the claim on the Portal, Mr Tonkin telephoned Haven. The transcript of the conversation shows that he was ringing about the provision of a hire car. Haven took that opportunity to make him an oral settlement offer for his personal injuries, initially of 2,200, later revised after negotiation to 2,350. This was repeated in writing by Haven on 23 April, and accepted by Mr Tonkin on the following day. Solicitors for a claimant generally contribute to a settlement by logging an RTA claim onto the Portal in two ways. First, they thereby supply to the insurer the essential details of the claim necessary for the insurer to appraise it and decide whether, and if so in what amount, to make a settlement offer. These go well beyond the details the insurer is likely to receive from its insureds accident report, although that report will be likely to assist the insurer to decide whether liability should be put in issue. Secondly, they thereby demonstrate that the claimant intends seriously to pursue a claim for personal injuries, and has obtained, by the CFA, the services of solicitors for that purpose on terms which do not require the claimant to provide his own litigation funding up front. The incentive which that will usually supply to the insurer to settle a modest claim early, before costs increase, and where liability is not in issue, is obvious. In Mr Tonkins case the evidence does not show that Haven had, before Edmondson logged the claim onto the Portal, already obtained any, let alone any sufficient, information about the personal injuries claim. The earlier discussion with Mr Tonkin was about the provision of a hire car. Moreover the chronology shows that Haven had already received and acknowledged Mr Tonkins personal injury claim via the Portal before it made him a settlement offer. Nor did Mr Tonkin telephone Haven on 20 April to seek such a settlement. The inference is plain that Haven was encouraged by the logging of the claim onto the Portal to make an early offer of settlement, and nothing in the judges findings of fact displaces it. Mr Tonkins claim is not therefore an exception to the others, so far as concerns the application of the established principles about the solicitors equitable lien. Edmondson made a modest but still significant contribution to the obtaining of the settlement which ensued, and that was sufficient to trigger the lien. Conclusion For those reasons, which differ from those of the Court of Appeal, I would nonetheless dismiss this appeal, subject to one point of detail. The Court of Appeal proceeded upon the basis that the equitable remedy could be deployed to provide a means for Edmondson to recover from Haven precisely those fixed costs, disbursements and success fee provided for under the RTA Protocol, regardless of the amount agreed to be paid in settlement. By contrast the remedy exists to provide security for the solicitors charges under his retainer, limited to the amount of the debt created by the settlement agreement. In the present cases, one effect of the retainer was to limit those recoveries to the amount recoverable from the defendants or their insurers. To the extent that the fixed costs regime limits those recoveries below that recoverable under the tables in the CFAs, that limitation would have to be taken into account, as it has been by the Court of Appeals order. Calculations carried out at the courts request suggest that the Protocol based recovery was, in all cases other than Mr Tonkin, slightly greater than the amounts agreed to be paid in settlement of the respective claims. The Court of Appeals order for payment therefore needs to be reduced to the settlement amount in each case. The same calculations show that the Protocol-based recovery was, in the case of Mr Grannell, slightly higher than the corresponding entitlement under the relevant CFA: (2,070.50 as against 2,043.50). But since both amounts exceed the settlement figure of 1,900, no additional adjustment appears to be necessary. Counsel are asked to agree the precise form of the order which should now be made, in the light of this courts reasoning. Calculations carried out at the courts request suggest that the Protocol based recovery was, in all cases other than Mr Tonkin, slightly greater than the amounts agreed to be paid in settlement of the respective claims. The Court of Appeals order for payment therefore needs to be reduced to the settlement amount in each case. The same calculations show that the Protocol-based recovery was, in the case of Mr Grannell, slightly higher than the corresponding entitlement under the relevant CFA: (2,070.50 as against 2,043.50). But since both amounts exceed the settlement figure of 1,900, no additional adjustment appears to be necessary. Counsel are asked to agree the precise form of the order which should now be made, in the light of this courts reasoning.

Six individuals were involved in road traffic accidents involving vehicles whose drivers were insured by the appellant insurance company, Haven Insurance Company Limited (Haven). They all entered into conditional fee agreements (CFAs) with the respondent solicitors firm, Gavin Edmondson Solicitors Limited (Edmondson). Edmondson notified the claims via the online Road Traffic Accident Portal (the Portal), in accordance with the Pre action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the Protocol). Under this scheme, the solicitors lodge the details of the claim on the Portal, the insurers respond by admitting or denying liability, and then, if liability is admitted, the amount of the damages are negotiated, with recourse to a court hearing if the amount cannot be agreed. Under the Protocol, the insurer is expected to pay the solicitors fixed costs and charges direct to the solicitors. In this case, however, shortly after the claims were logged on the Portal, Haven made settlement offers direct to the claimants, on terms which did not include any amount for the solicitors costs. Haven told the claimants that they could pay the claimants more, and more quickly, by that route, than by going through the Portal. All the individuals eventually accepted these offers, and cancelled their CFAs with Edmondson. This practice by Haven has been repeated in many other cases, which are not before the court. Edmondson claimed against Haven for the fixed costs which it should have been paid under the Protocol. Specifically, Edmondson sought enforcement of the solicitors equitable lien. This is a form of security for the payment of fees owed by the client for the successful conduct of litigation, paid out of the fruits of that litigation. Edmondsons claim was dismissed at first instance. The Court of Appeal allowed their appeal, holding that, even though the claimants did not have a contractual liability for the firms charges, which meant that the traditional equitable lien claim failed, the remedy could be modernised to allow the solicitors to recover from the insurers their fixed costs that should have been paid under the Protocol. The Supreme Court unanimously dismisses the appeal. Lord Briggs gives the lead judgment, with which the rest of the Court agrees. Edmondson are entitled to the enforcement of the traditional equitable lien against Haven, as the client owed a contractual duty to pay the solicitors charges. However, the equitable lien should not have been modernised in the manner undertaken by the Court of Appeal. The solicitors equitable lien: the existing law As the early cases demonstrate, the solicitors equitable lien was developed to promote access to justice. It enables solicitors to offer litigation services on credit to clients who, although they have a meritorious case, lack the financial resources to pay up front for its pursuit [1], [33 34]. The equitable lien depends upon (i) the client having a liability to the solicitor for his charges; (ii) there being something in the nature of a fund in which equity can recognise that the solicitor has a claim (usually a debt owed by the defendant to the solicitors client which owes its existence to the solicitors services to the client); and (iii) something sufficiently affecting the conscience of the payer at the time of payment, either in the form of collusion with the client to cheat the solicitor or notice or knowledge of the solicitors claim against or interest in the fund [35 37]. Construction of the CFA does the client have any contractual liability to pay the solicitors charges? The client care letter, which explained that the solicitor would be able to recover its costs from the losing side if the claimants won, so that the claimants would not need to put their hands in their own pockets, did not mean that the claimants were not contractually liable for the solicitors fees. It merely limited the recourse from which Edmondson could satisfy that liability to the amount of its recoveries from the defendant, and it both preserved and affirmed the clients basic contractual liability. This was a sufficient foundation for the lien to operate as a security for payment, on a limited recourse basis [40 44]. Did Haven have notice of Edmondsons lien? In all the cases before the court, the requirement that the settlement debts must owe their creation to Edmondsons services provided to the claimants under the CFAs was satisfied on the facts. Edmondsons actions in logging the claim on the portal contributed to the settlement in two ways. First, it supplied the details of the claim to the insurer, and second, it demonstrated the claimants serious intention to pursue the claim, and ability to do so with the benefit of a CFA [45 46], [59 63]. Once a defendant or his insurer is notified that a claimant in a road traffic accident case has retained solicitors under a CFA, and that the solicitors are proceeding under the Protocol, they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable, as an interference with the solicitors interest in the fruits of the litigation. In this case, Haven had notice of the lien because they knew that each of the claimants had retained Edmondson under a CFA, and also knew that Edmondson was looking to the fruits of the claim for recovery of its charges [48 50]. As such, the lien could be enforced against Haven by requiring it to pay the fee amounts in the CFAs direct to Edmondson, but only up to the amount of the agreed settlement payments [65]. To that limited extent the order made by the Court of Appeal needed to be varied. The re formulation of the equitable lien by the Court of Appeal It is not strictly necessary to address this issue in view of the decision on the traditional principle above, but the correctness or otherwise of the Court of Appeals reformulation of the principle has been extensively argued, and the Law Society has intervened to support it [51 52]. There are insuperable obstacles to extending the principle to cases where, although there is no contractual liability for the charges, the Protocol is breached. This includes the fact that the Protocol is purely voluntary and created no debt or other relevant legal rights at all. Whilst equitable remedies are flexible, they still operate according to principle. One of the principles of the equitable lien is that the client must have a responsibility for the solicitors charges. There is no general principle that equity will protect solicitors from any unconscionable interference with their expectations in relation to recovery of their charges [53 58].

A crucial issue in many asylum appeals is whether the claimants account of his or her provenance is truthful. So in the present cases it was central to each of the respondents claims that they came from a particular region of Somalia, where they were at risk of persecution. In each case, in dismissing those claims, the Secretary of State relied on linguistic analysis to the effect that their mode of speaking was linked to Kenya not Somalia. That evidence came in the form of linguistic analysis reports provided by a Swedish commercial organisation called Sprakab (more fully, Skandinavisk Sprkanalys AB). Those decisions were upheld on appeal to the Upper Tribunal, but reversed by the Inner House which made a number of criticisms of the form of the reports and the reliance placed on them by the tribunal. In February 2010, following the original tribunal hearings in the present cases but before the appeals, a special three judge panel of the Upper Tribunal (presided over by Judge Ockelton, Vice President) heard another case raising similar issues, and gave guidance on the use of such reports in the future. Their judgment, dated 15 September 2010 ([2010] UKUT 329 (IAC)), reviewed detailed evidence on Sprakabs operations and methodology, including oral evidence from their manager, Ms Fernquist. In the light of that consideration, they endorsed the use of the Sprakab reports, subject to certain safeguards. Their approach was generally supported by the Court of Appeal (RB (Somalia) v Secretary of State for Home Department [2012] EWCA Civ 277 (RB)). Those decisions, at both levels, were in turn considered by the Inner House in the present case. Accordingly, although we are directly concerned only with the two appeals before us, it is appropriate for us to look at them also in the context of the wider discussion of the issues in RB. Sprakabs operation For a general indication of Sprakabs operation and methods of work it is convenient to quote the description given by Moses LJ (who gave the only substantive judgment) in RB, which takes account of the more detailed evidence given before the Upper Tribunal in that case and their findings on it: 5. Sprakab's work is linguistic analysis. It works for the immigration services of a number of governments including Canada, Sweden, Australia, the Netherlands and the United Kingdom. Since 2000 it has conducted over 40,000 linguistic analyses. The Upper Tribunal was given only one example of an individual seeking analysis from Sprakab. The company employs linguists with university qualifications and members of the relevant international association. They are subject to regular evaluation. It also employs a pool of analysts who, generally, speak the language they are asked to analyse and are taught to think critically and analytically. 6. Linguistic analysis at Sprakab is a two stage process. First, the analyst listens to a recorded specimen of speech, typically an interview. The analyst notes features of the speech which appear to be of interest. Second, the analyst discusses those features with a linguist. The analyst and linguist decide whether the features are diagnostic of the speaker's origin and produce a report with four grades of likelihood: certainty (one way or the other), most likely, likely and possibly. The rationale for identification of the degree of certainty or otherwise is usually explained in the report. The analysts are given extensive training by the linguists so as to look for certain distinctive features of any particular language or dialect. The manager, Ms Fernqvist, agreed that linguistic analysis could not determine a nationality, although it is of assistance. Interviews would usually last some 20 to 30 minutes and the recording would be discussed by analyst and linguist before a draft report was produced. 7. Sprakab carry out around 4,000 analyses per year and Ms Fernqvist was of the opinion that it supported applicants in about 60% of the cases in which they were involved. Certainly, it supported applicants more often than it rejected their claims. Sprakab has developed a database of recordings which, though not available for peer review, was, she believed, accurate. 8. Sprakab's policy is not to make the names or personal details of its analysts or linguists public. It fears that their safety may be endangered if it is known that they are producing analyses for governmental authorities. But each member of staff is given a unique identifier and the language background training and other relevant experience associated with that identifier. Thus the qualifications and background of a particular analyst [or] linguist are disclosed and it is also possible to see whether the same or different analysts were involved. Those who reported in the instant case were identified only by letter and number. The tribunal was provided with the names of the witnesses but they were not disclosed to the appellant or her legal team. The number of those involved in the analysis in the instant case was disclosed and Ms Fernqvist was able to give evidence as to their qualifications. 9. The Upper Tribunal made the following findings and conclusion. It accepted that Sprakab was a bona fide organisation which has devised and refined a system for analysing language requiring interaction between several employees. That process minimises the opportunities for the incompetence of one to lead to a false result. The tribunal accepted that anonymity could theoretically have an adverse impact on reliability. But the fact that no one person's opinion is decisive and that those opinions are reasoned, explained, and can be checked and criticised, reduces the risk of an incompetent or corrupt employee. The tribunal rejected the suggestion that Sprakab was not independent. The Upper Tribunal noted that Sprakab did not claim to be infallible. The present appeals Procedural changes To understand the course of the present appeals, it is necessary to be aware of the changes which took place in February 2010 in the arrangements for hearing asylum appeals. At the time of the original appeals in both cases, the relevant appellate body was the Asylum and Immigration Tribunal (the AIT). This was a single tier appellate body, albeit with provision for reconsideration to be ordered where a possible error of law was identified by a senior tribunal judge or the relevant court. Procedure was governed by the Asylum and Immigration Tribunal (Procedure) Rules 2005 (SI 2005/230) (the AIT rules). Although a new tribunal system (including a First tier and Upper Tribunal) had been brought into operation in November 2008 under the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act), the AIT continued for the time being unchanged as a separate body. As from 15 February 2010, the first instance jurisdiction of the AIT was transferred to the new Immigration and Asylum Chamber of the First tier Tribunal (the FTTIAC). At the same time there was established a right of appeal, with permission, to the Immigration Appeal Chamber of the Upper Tribunal (the UTIAC). There were transitional provisions to deal with pending cases. In the FTTIAC, the AIT rules continued to have effect subject to appropriate amendments to take account of the new two tier system. In the UTIAC, procedure was governed by the Tribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698) (the Upper Tribunal rules), which applied generally across the various chambers at that level, but subject again to appropriate amendments to take account of the new jurisdiction. At the same time a new set of Practice Directions, applying to the new immigration and asylum chambers at both levels, was issued in the name of the Senior President. They followed without material alteration (for present purposes, at least) the form of Practice Directions issued by the President of the former AIT. It is worth adding that, although the present appeals were heard in Glasgow, and found their way on appeal in due course to the Court of Session, the jurisdictions of the former AIT and the new IAC Chambers were and are UK wide. It is accepted that there is and should be no material difference between the principles applicable on either side of the border. MNs appeal The first appellant, MN, entered the United Kingdom on 16 August 2009 and claimed asylum. His claim was rejected by the Secretary of State and, on 5 February 2010, by the AIT (IJ McGavin). The appellant said that he was a national of Somalia and that he was born in Mogadishu and belonged ethnically to a minority clan in Somalia, namely "clan Benadiri, sub clan Reer Hamar, and sub sub clan Shanshi" (AIT decision para 13). In rejecting the claim to asylum, the immigration judge, like the Secretary of State, relied on a Sprakab report, which identified his speech as being from Kenya rather than Somalia. He appealed to the UTIAC, on grounds which included criticisms of the Sprakab reports. The appeal was heard in December 2010 (SIJ Macleman), following the promulgation of the decision and guidance in RB. Permission to appeal to the Court of Session was given by the court itself, which on 12 July 2013 by a majority of the Extra Division (Lords Eassie and Menzies, Lord Marnoch dissenting) allowed the appeal and remitted the case to the Upper Tribunal for reconsideration. KYs appeal The second appellant, KY, arrived in the United Kingdom on 30 November 2008 and claimed asylum. She claimed to be a citizen of Somalia, born in February 1988 in Mogadishu, and ethnically of the Benadiri clan (also known as the Reer Hamaar) sub clan Sharif Omar. It was and is common ground that if she made good that contention she would be entitled to asylum. Her claim was refused by the Secretary of State, and on 20 February 2009 by the AIT (IJ MacDonald), both relying on a Sprakab report, which identified her speech as being from Kenya rather than Somalia. She applied successfully to the Court of Session under the procedure then applicable (section 103A(1) of the Nationality, Immigration and Asylum Act 2002 (the 2002 Act), as inserted by section 26(6) of the Asylum and Immigration (Treatment of Claimants, etc) Act 2004 (the 2004 Act)) for an order for reconsideration of the decision. In a note attached to his order (dated 22 July 2009) the Lord Ordinary, Lord Macphail, made a number of criticisms of the Sprakab report (relying in particular on a 2004 report by an international group of linguists), and directed that reconsideration be undertaken without reference to the Sprakab report. The reconsideration not having taken place before 15 February 2010, the order fell to be treated under transitional provisions (paragraph 3 of Schedule 4 to the 2002 Act) as a grant of permission to appeal to the Upper Tribunal under the 2007 Act. The decision of the Upper Tribunal (in this case also, SIJ Macleman) was given on 22 October 2010, dismissing the appeal. Permission to appeal having been given by the Court of Session, the appeal was allowed by the same constitution as in MN. In this case, since there was agreed to be no other material supporting the refusal of her claim, the appeal was allowed without further remission. The Sprakab reports in more detail To understand the criticisms made by the Court of Session, and by the respondents before us, it is necessary to give a little more information about the form and content of the Sprakab reports. Since they are examined in detail in the judgment of Lord Eassie (paras [5] ff), to which reference can be made, I will focus on the principal points. I follow him also by concentrating on the first case in time (that is KYs case), the other being in similar form. The report, which is entitled linguistic analysis report, is not in narrative form, but consists of a series of boxes with a number of headings to be completed by the language analyst. An attachment indicates that the analysis in this case was conducted by analyst EA20; the results of analysis confirmed by analyst EA17; and the analysis reviewed and approved by Linguist 04. None of the three is named, but their experience and qualifications are summarised. For example, in respect of analyst EA20 the following appears: ANALYST EA20 The analyst was born 12 October 1968 in Mogadishu, Somalia and came to Sweden 1990 The analyst last visited Somalia in 1990 The analyst analyses the Somali language and the Somali dialects May May and Bravanese The analyst has performed 476 language analyses The analyst interprets for the Swedish authorities EMPLOYMENT HISTORY 2006 to present Analyst at Sprakab 1990 to present Interpreter in Somali EDUCATIONAL QUALIFICATIONS Bachelors Degree in Law, Somalia Sociological studies in Law, Stockholm University, Sweden Returning to the report itself, the first box gives the conclusion: The person speaks a variety of Somali found [x] with certainty not in: Somalia. [x] with certainty in: Kenya. The following boxes indicate that the basis is a tape recording of a telephone conversation lasting 18 minutes, that the language used was Somali, and that the type of analysis included both linguistic analysis and knowledge assessment, the latter involving examination of the persons knowledge and experiences of culture and geography of his/her stated country/region of origin. The next section, headed Analysis begins with the following General comments: The person, who is a woman, speaks Somali on the recording. She speaks the language to the level of a mother tongue speaker. First she says she was born and raised in Mahaddaay in the Shabeellada Dhexe province and that she also has lived in Jowhar in the same province. Later she states that she was born in Mogadishu in southern Somalia. The person does not speak a variety of Somali found in Somalia. She speaks a variety of Somali found with certainty in Kenya. The person is asked about what dialect she speaks on the recording. She says that she speaks the Reer Hamar dialect. However, it can be ascertained that she does not speak the Reer Hamar dialect. The person has deficient knowledge and deficient local knowledge of the area she says she is from. Her knowledge sounds rehearsed for the occasion since she does not give any detailed descriptions of the area she says she is from. There then follow under the heading Specific findings more detailed observations relating to phonological characteristics, morphology, syntax and lexicon and colloquialisms". A separate box headed Knowledge of 'country and culture' of the person includes the following: The person first says that she was born and raised in Mahaddaay in the Shabeellada Dhexe province, in southern Somalia. After a while she changes her mind and says that she was born in Mogadishu. She also says that she moved to Jowhar in the Shabeellada Dhexe province. The person has deficient knowledge and deficient local knowledge of the area she says she is from. Her knowledge sounds rehearsed for the occasion since she does not give any detailed descriptions of the area she says she is from. She often hesitates and gives short answers on the questions she is asked. This section ends with a summary of findings supporting the conclusion In summary, it can be ascertained that the person speaks Somali to the level of a mother tongue speaker. The person does not speak a variety of Somali found in Somalia. She speaks a variety of Somali with certainty found in Kenya. She does not speak the Reer Hamar dialect. The person has deficient knowledge and deficient local knowledge of the area she says she is from. Her knowledge sounds rehearsed for the occasion since she does not give any detailed descriptions of the area she says she is from. She often hesitates and give short answers on the questions she is asked. Although there is space for a signature, it appears that this was not completed, the identity of the author instead being indicated by codes given in the attachment to which I have already referred. The Upper Tribunals decision and guidance in RB I have already referred to the findings made by the Upper Tribunal and the Court of Appeal in RB about the nature of the Sprakab operations. Although this is not an appeal from that decision, it is right to set their guidance in the context of the facts of the case and the material before the tribunal. The factual issue was in one respect similar to the present, in that the appellant claimed to be from Somalia, and was ultimately disbelieved on the basis partly of Sprakab reports which linked her to Kenya. However, of more particular importance was her claim to be from the Bajuni clan, and to be proficient in Kibajuni the mother tongue of that clan (paras 49 53). The tribunal accepted that if that link were established her appeal should succeed (para 143). It was in that context that a critical issue was how well she understands Kibajuni, and the way she speaks it herself (para 151). It was on that issue that the tribunal ultimately rejected her evidence, and in doing so placed considerable weight on the deficiencies in her knowledge of that language, disclosed not only by the Sprakab reports but also by her own answers in cross examination (para 152). It is not entirely clear from the judgment of the Upper Tribunal how the case came to be selected as a guidance case on the use of Sprakab reports, or what steps were taken to ensure that the tribunal had before it all the material and assistance necessary to reach an authoritative view. It seems surprising that (as far as appears from the judgment) the tribunal does not appear to have been referred to the criticisms of the Sprakab reports made by the Lord Ordinary in earlier cases, but they had before them the 2004 report on which he relied (see below). The evidence ultimately before the tribunal was substantial and was carefully considered and analysed by them. They were assisted by experienced counsel on both sides. Apart from the evidence of the appellant herself, it included: i) Four Sprakab reports, the last being particularly detailed. They were supported by written and oral evidence by their manager, Ms Fernqvist, who was subject to cross examination (paras 10 20). In accordance with Sprakabs practice, the authors of the reports were not identified by name. The tribunal noted that that no reasoned objection was taken by counsel for the appellant to this course (para 25). The tribunal heard oral evidence from three of the individuals directly responsible for the reports, analyst E19 and linguists 01 and 04, who also were subject to cross examination. ii) Two reports by an independent expert, Ms Margaret Kumbuka, instructed for the appellant (described as a lector in Swahili in the African Department of SOAS para 100); and a response by Sprakab to those reports (para 11 19). Ms Kumbuka had been expected to give oral evidence, but unfortunately she died shortly before the hearing (para 99). iii) Documentary evidence (para 120ff), including a) A 2004 report by an international group of linguists (the Language and National Origin Group) on the use of language analysis in refugee cases; b) Information on the Bajuni people from the UNHCR website (complied in 2005 by the Immigration and Refugee Board of Canada); c) A report on the Bajuni people published in 2010 by the Country of Origin Information Centre in Norway (Landinfo). iv) The tribunal referred also to three reports dated February 2010 by a Professor D Nurse (an emeritus professor of linguistics at St Johnss University Canada and said to be a specialist in Swahili dialectology). These included a critique of some 50 Sprakab reports between 2004 and 2010, a review of some 20 recordings of interviews, and a report of a fact finding mission to Nairobi in September 2000. These had come to the attention of the tribunal after the hearing through a monthly mailing of the Immigration Law Practitioners Association. The tribunal summarised Professor Nurses comments on the fluidity of [the] Bajuni language and society amid the upheavals of recent years and his criticisms of the Sprakab interview methods, leading to his view that it would be unwise to use a Sprakab report as a basis for any legal decision on whether an applicant is or is not a Somali Bajuni (para 137). Although the tribunal received submissions on these reports and made some comments on them (paras 165 166), they indicated that they could not treat Professor Nurse as an expert witness in this appeal, because of numerous points of factual dispute which would need to be addressed by way of live evidence and cross examination (para 141). Having given their reasons for dismissing RBs appeal on its own facts, the tribunal concluded by setting out the following, by way of General guidance on linguistic analysis evidence: 170. We close this determination with three matters of general guidance in relation to appeals based on linguistic analysis in general and Sprakab reports in particular. 171. First, we note that it is said that the decision as to a person's background or origin should not be based solely on linguistic analysis. We have heard and seen nothing enabling us either to endorse or doubt that advice. But where there is clear, detailed and reasoned linguistic analysis leading to an opinion expressed in terms of certainty or near certainty it seems to us that little more will be required to justify a conclusion on whether an applicant or appellant has the history claimed. 172. Secondly, the conclusions we have reached about Sprakab's reports do not, of course, mean that Sprakab or any other linguistic analyst is infallible. A decision maker or judge must be alive to the possibility of error, whether or not the particular level of certainty expressed by the report leads one to expect it. Where there is linguistic evidence in a particular case it is important that all parties have a proper opportunity to submit it for expert assessment and it is equally important that all the evidence be taken into account in deciding the questions in issue according to the appropriate standard of proof. 173. The parties must have an opportunity to challenge any linguistic assessment opposing them. That means a sound recording of any interview of or discussion with an appellant that forms the basis of such analysis must be made available to the other party in good time before any substantive appeal hearingWe would expect for the future that where linguistic analysis is in issue, no party should seek to rely on an analysis based on examples of the appellant's speech that all parties have not had the opportunity to analyse. 174. Thirdly, we have given our reasons above for acceding to Sprakab's request for anonymity for its linguists and analysts, subject to details being given of their background and qualifications. These reasons are of general applicabilityunless there was some very good reason for departing from this practice. The issues The issues agreed between the parties for consideration by this court are (in summary): In what circumstances should witnesses providing evidence in such i) Whether the immigration judges were entitled to attribute any weight to the Sprakab reports; ii) appeals be granted anonymity; iii) Whether there are any particular rules governing expert evidence tendered in the name of an organisation rather than an individual; iv) To what extent can such evidence be accepted in a form not prescribed by the Practice Directions; v) To what extent, and with what effect, can the Upper Tribunal give guidance as to the weight to be given to such reports, or the conclusions to be drawn from them. General approach Before looking at these issues in more detail, it may be helpful to make some general comments about the context in which they are to be considered. We are concerned with specialist tribunals, now forming part of the new system established by Parliament under the 2007 Act following the report of Sir Andrew Leggatt, Tribunals for Users, One System, One Service (2001). As Senior President of Tribunals, I discussed the background to those reforms and some of their practical implications in an article: Tribunal Justice a New Start [2009] PL 48 (cited by me also in Jones v First tier Tribunal (Social Entitlement Chamber) [2013] UKSC 19; [2013] 2 AC 48, para 46). I referred for example to Lady Hales description of the essential features of tribunals, as compared to courts, in Gillies v Secretary of State for Work and Pensions [2006] 1 WLR 781, paras 36ff, including accessibility, freedom from technicality, and expertise. These special qualities, including emphasis on the development of innovative methods of resolving disputes that are of a type that may be brought before tribunals, are given statutory force in the duties of the Senior President under section 2 of the 2007 Act. They are also embodied in the overriding objective in the rules now applying across the new tribunal system, under which the objective of dealing with cases fairly and justly is defined as including avoiding unnecessary formality and seeking flexibility in the proceedings and using any special expertise of the [tribunal] effectively (see eg rule 2 of the Upper Tribunal Rules). Although, as already noted, the FTTIAC rules still follow the old AIT format, with amendments, the overriding objective there stated (rule 4) does not differ in substance. In particular, it imposes on the members of the tribunal the responsibility for ensuring that proceedings are handled as fairly, quickly and efficiently as possible. In the same spirit, rule 51(1) provides that the tribunal may receive oral, documentary or other evidence of any relevant fact, notwithstanding that it would be inadmissible in a court of law (see, to like effect, rule 15(2) of the Upper Tribunal rules). Generally, therefore, the area of legitimate debate is about relevance and weight, not admissibility. Secondly, there is no presumption that the procedure will necessarily follow the adversarial model which (for the time being at least) is the hallmark of civil court procedures. In a specialist tribunal, particularly where parties are not represented, there is more scope, and often more need, for the judges to adopt an inquisitorial approach. This has long been accepted in respect of social security benefits (see Kerr v Department for Social Development [2004] 1WLR 1372, paras 61 63, where Lady Hale spoke of the process of benefits adjudication as inquisitorial rather than adversarial a co operative process of investigation in which both the claimant and the department play their part). However, there is no single approach suitable for all tribunals. For example, in a major case in the tax or lands tribunals, the sums may be as great, and the issues as complex, as in any case in the High Court, and the procedure will be modelled accordingly. Thirdly, an important objective of the reforms, including the establishment of the Upper Tribunal, was to promote consistency across the tribunal system. An accepted means of so doing, established in previous case law, is the provision of guidance through judgments in suitable cases. (See the discussion in R (Iran) v Secretary of State for the Home Department [2005] Imm AR 535, paras 21ff per Brooke LJ; and by myself in Jones v First tier Tribunal [2013] 2 AC 48, paras 42 43). Such guidance need not be confined to points of law, to which rules of precedent may apply in the tribunals as in the courts, but may extend to issues of principle relating to factual, procedural or other matters of common application in a particular specialist field. An example from a very different area of specialisation was the guidance given by the Lands Tribunal on discount rates in the context of leasehold enfranchisement (see my comments in Earl Cadogan v Sportelli [2008] 1 WLR 2142, paras 91ff; on this aspect not questioned by the House of Lords at [2010] 1 AC 226). Except so far as statute otherwise provides, statements on such issues by the Upper Tribunal are not binding on the FTTIAC judges, who retain their duty to decide their cases on the evidence before them. As Brooke LJ explained at para 26 of R (Iran), (adopting comments of Ouseley J as President of the IAT in NM (Lone women Ashraf) Somalia CG [2005] UKIAT 00076), such statements are to be taken into account as part of the material considerations to which the judges are required to have regard, but are not to treated as factual precedents. Similarly, in Januzi v Secretary of State for Home Department [2006] 2 AC 426 [50], Lord Hope observed that, while it was desirable in the interests of fairness and consistency that country guidance should be followed: in the end of the day each case, whether or not such guidance is available, must depend on an objective and fair assessment of its own facts. It is to be noted that, in the context of immigration appeals under the 2002 Act, the position has since 2005 been formalised to some extent by statutory provision. Under section 107(3) as added by section 48(3) of, and paragraph 22(1)(c) of Schedule 2 to, the 2004 Act, practice directions may require tribunals to treat a specified decision of the [Upper Tribunal] as authoritative in respect of a particular matter. Paragraph 12 of the 2010 Practice Directions contains such provision for what are known as starred and country guidance determinations; subject to certain qualifications, decisions so designated are to be treated as authoritative in subsequent appeals. (The development and effect of those provisions are discussed in detail Macdonalds Immigration Law and Practice 8th ed (2010), para 19.105.) A recent guidance note issued by Blake J as Chamber President (Guidance Note 2011 No 2: Reporting decisions of the Upper Tribunal Immigration and Asylum Chamber) explains the current practice. Having referred to the specific provisions in relation to Country Guidance cases, the note refers to the criteria for reporting other cases where the factual findings may be of some general interest, noting that such decisions are of persuasive value only on the facts (para 13). It is not suggested that the guidance in the present case falls within any special category within the practice direction, or that it is thereby entitled to be treated as other than merely persuasive. There is another important aspect to cases such as the present. The higher courts have emphasised the special responsibility carried by the tribunals in the context of asylum appeals. It is customary in this context to speak of the need for anxious scrutiny (following R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514, 531 per Lord Bridge of Harwich). As a concept this is not without its difficulties, but I repeat what I said in R (YH) v Secretary of State for the Home Department [2010] 4 All ER 448, para 24: the expression [anxious scrutiny] in itself is uninformative. Read literally, the words are descriptive not of a legal principle but of a state of mind: indeed, one which might be thought an axiomatic part of any judicial process, whether or not involving asylum or human rights. However, it has by usage acquired special significance as underlining the very special human context in which such cases are brought, and the need for decisions to show by their reasoning that every factor which might tell in favour of an applicant has been properly taken into account. I would add, however, echoing Lord Hope [in R (BA Nigeria) v Secretary of State for the Home Department [2010] 1 AC 444, para 32], that there is a balance to be struck. Anxious scrutiny may work both ways. The cause of genuine asylum seekers will not be helped by undue credulity towards those advancing stories which are manifestly contrived or riddled with inconsistencies. Similar considerations in my view impose a special responsibility on the Secretary of State and those representing her to ensure that the evidence presented to the tribunal is adequately supported. So in this case Lord Eassie rejected the suggestion that it was enough for the Secretary of State to provide the interview tapes to the appellants, leaving them to obtain their own expert advice. He said, at para 66: as a matter of principle, it is the Secretary of State who invokes the purported expert evidence for her purposes in order to impugn the honesty of the appellant. In accordance with all normal rules of procedure it must therefore be for her to establish, by active demonstration of the appropriate expert qualification, the worth of the evidence upon which she relies to counter the testimony of the appellant. For the Secretary of State Mr Lindsay QC, as I understood him, did not challenge this statement of principle. In my view, he was right not to do so. The agreed issues The issues (para 21 above) fall into two categories: first, relating to the admissibility in principle of the Sprakab reports (issues (i) (iv)); secondly, as to the nature and extent of the guidance which it is appropriate for the Upper Tribunal to give (issue (v)). It is convenient first to consider these issues in general terms by reference to the decision and guidance given in RB, before turning to the implications of those points for the cases before us. In principle, as I think counsel for the respondents accept, there was nothing wrong in the Upper Tribunal seeking to give guidance on a matter of general concern to the First tier, such as the use of Sprakab reports. The practice directions contain valuable guidance on the general principles applying to expert evidence. To a large extent they follow the principles applicable in civil courts, designed (inter alia) to ensure that the expert provides truly independent assistance to the tribunal, does not assume the role of advocate, and sets out the facts and other material on which an opinion is based. However, the absence of any specific provision in the practice directions for evidence in the form of the Sprakab reports was not in itself a bar to their admission. On the contrary, where the tribunals were faced with a new form of evidence, of potential value in resolving issues of common occurrence, it was entirely appropriate for the Upper Tribunal to select a suitable case with a view to giving general guidance. As Lord Eassie acknowledged, the practice directions did not have to be rigidly applied. In the civil courts, flexibility on such matters is routinely accepted under modern practice. For example, in Rogers v Hoyle (Secretary of State for Transport and International Air Transport Association intervening) [2014] EWCA Civ 257, the Court of Appeal confirmed the admission of a report by a body known as Air Accident Investigation Branch, one objection having been that it failed to comply with mandatory rules (CPR Pt 35) relating to expert evidence. In support of a flexible approach to the rules, Christopher Clarke LJ cited (inter alia) Sunley v White (Surveyors & Estate Agents) Ltd [2003] EWCA Civ 240, in which: this court regarded as admissible a draft soil report issued by a company although the report was unsigned, provisional and did not carry the name or qualifications of the author. These were matters which Clarke LJ, with whom Longmore LJ agreed, treated as essentially going to weight (para 44). Such considerations apply with equal or greater force before tribunals. Thus the Court of Appeal has warned tribunals against rejecting expert evidence merely because a witness is not available for cross examination. In Singh (Tarlochan) v Secretary of State for the Home Department [2000] Imm AR 36 Buxton LJ said, at para 43: In the way in which this sort of inquiry is necessarily conducted in front of a Tribunal, it is only rarely going to be the case that evidence is given by persons actually appearing in front of a Tribunal rather than by reference to the reports of persons of greater or lesser weight Amnesty International, the United Nations Commission on Refugees and the Canadian body used in this case So here, it is inappropriate for general questions relating to Sprakab, its methodology and the presentation of its reports to be re litigated constantly in separate FTT hearings, with inevitable inconsistency of outcome. The Upper Tribunal were right in RB to address those issues. Subject to appropriate safeguards, they were entitled in my view to find no objection of principle to the admission of the Sprakab reports, whether because they were in the name of an organisation rather than an individual, or in general for failure in other respects to comply with the practice directions. This discussion makes it unnecessary to consider in more detail issues (i), (iii), (iv); the short answer is that none of them points to any overriding objection to evidence in this form. As Lord Eassie said, in a passage to which Mr Lindsay took no objection: in the end one naturally has to consider whether, in substance, the tribunal in question has been provided in the case before it with expert evidence which the tribunal can be satisfied is based upon an appropriate and adequate expert knowledge, given with the neutrality required of the expert, unencumbered by views falling outwith his field of expertise. (para [57]) It is necessary to deal in a little more detail with issue (ii) (anonymity of witnesses), which proved more contentious. Anonymity In RB the Secretary of State asked for anonymity for the individual analysts and linguists (other than by reference to an identifier code) on the grounds that their independence might otherwise be compromised and their personal safety might be at risk. It was said that it was not Sprakabs policy to disclose the identity of its analysts because of threats which have been directed at analysts in the past by disgruntled claimants. One analyst was said to have stopped working for Sprakab because of such threats (Upper Tribunal decision, para 22). The tribunal accepted this submission. They accepted that it was exceptional for witnesses to give evidence anonymously, but thought that course appropriate and proportionate in view of the potential of threats to Sprakab personnel, and in the absence of any reasoned objection from counsel for the appellant. They said: . Given the information that is associated with the identifier, it seems to us to be virtually inconceivable that anybody is disadvantaged by not knowing the name or address of the individual concerned. It might perhaps be that in some particular case there will be a proper reason for inquiring whether a named individual had been involved in the analysis of a sample. If it was necessary to ask that question, it could be directed to Sprakab, and a Tribunal might in due course have to decide how to deal with whatever answer was given. But in the general case the reports are available on the authority of Sprakab itself, with full information about the qualifications of those who have contributed to them. That is sufficient. (paras 24 27) That approach was endorsed by the Court of Appeal. Moses LJ said: There will be expert evidence which requires identification of who among a number of experts discussing the conclusion reached a particular view. But Ms Fernqvist's evidence was such that it was perfectly fair, provided the process was patent, to give a collective conclusion (para 14) In view of his other reasons for allowing the appeal, Lord Eassie found it unnecessary to reach a final view on this issue, but expressed serious reservations as to the approach of the Upper Tribunal, which departed from the principle that a person is entitled to know the identity of the witness against him in judicial proceedings unless anonymity is justified by special and exceptional reasons (para 77). That approach has been supported by the respondents in their submissions in this court. They rely on statements of high authority referring to the fundamental principle of judicial process that, other than in exceptional circumstances, witnesses are identified whether in criminal or civil proceedings (see R v Davis [2008] AC 1128, para 40 per Lord Rodger; Al Rawi v Security Service (Justice intervening) [2012] 1 AC 531). There is no doubt about the power of the tribunal to make such a direction. Rule 45 of the AIT rules, which gives the tribunal power to give directions relating to the conduct of appeals, includes an unqualified power in such directions to make provision to secure the anonymity of a party or a witness (r 45(4)(i)). That was not the power in terms relied on by the Upper Tribunal. They referred instead (para 25) to rule 14 (Use of documents and information), which gives the Upper Tribunal power to make orders prohibiting disclosure of information (1) likely to lead to identification of any person whom the Upper Tribunal considers should not be identified, or (2) likely to cause serious harm to the person to whom it is disclosed or some other person. Since the Upper Tribunal were retaking the decision of the First tier Tribunal on both fact and law (see section 12(4) of the 2007 Act), it would have seemed more appropriate for them to rely on the power in the AIT rules, directed specifically to anonymity of witnesses, rather than rule 14 which is concerned with disclosure of information more generally. On the other hand, rule 14 is helpful as emphasising that, in the tribunals as in the courts, openness is the norm, and that there needs to be special reason for departing from it, risk of serious personal harm being an obvious example. Although the AITs power is expressed in unqualified terms, I agree that in respect of an individual expert witness its exercise requires special justification. Sprakabs policy of anonymity clearly would not absolve the tribunal of its duty to examine of itself the evidence said to justify a departure from the normal rule. However, in my view there were valid reasons for taking a less strict view in the present context. This was not anonymous evidence in the ordinary sense. The evidence was advanced, and the expertise claimed, on behalf of an organisation, based on the collaborative work of individuals with different skills within it. There was no doubt about the identity of the organisation, its working methods or the qualifications and experience of those involved in preparing its report. The names of the individuals were available to the tribunal, and could have been made known to the parties if it became necessary to do so, for example to pursue a particular line of cross examination. Subject to appropriate safeguards, and to satisfying themselves that in the circumstances of the particular case no prejudice was caused, the Upper Tribunal were entitled to determine that there was no objection in principle to the course adopted. The guidance As has been seen, the Upper Tribunal ended its judgment by giving general guidance on the use of evidence of this kind. For the most part this was helpful and appropriate. In particular it was right to emphasise that Sprakab were not infallible, that tribunal judges must be alive to the possibility of error, and that parties must be provided with the opportunity and materials necessary to enable them to challenge their evidence (paras 172 173). However, with respect to this experienced tribunal, I have concerns that on two aspects the guidance appears unduly prescriptive and potentially misleading. The first is as to the weight to be given to such evidence in future cases. Tribunals are advised that, where there is a clear, detailed and reasoned linguistic analysis leading to an opinion expressed in terms of certainty or near certainty, then little more is required to support a conclusion. This seems to me to underplay the importance in any case of the tribunal itself examining such a report critically in the light of all the evidence, and of the reasoning supporting its conclusion (not necessarily limited by the scope of any criticisms or evidence that may be presented by the appellant). The language of the guidance gives rise to a real risk of being interpreted as prejudging issues which are for the individual tribunal to determine. As will be seen, the present appeals are illustrative of that risk. Also problematic to my mind is the special weight given to reports expressed in terms of certainty or near certainty. As has been seen, it is a feature of the Sprakab reports in the present case that the conclusions are so expressed, both positively and negatively. In RB itself, two of the Sprakab reports were expressed in similar terms but not it seems the final most detailed report (paras 13 15). The reasons for the discrepancy were not further discussed. It is unfortunate that, through circumstances beyond their control, the Upper Tribunal did not have the benefit of oral evidence from experts critical of Sprakabs methods. That was another reason for caution. In any event, as one would expect, the Upper Tribunals subsequent discussion and conclusion did not turn on the degree of certainty or near certainty expressed by Sprakab, but on an evaluation of all the evidence of which theirs was one part. That would be the duty of any future tribunal, regardless of the certainty of Sprakabs own views. What matters is not the confidence with which they are expressed, but the strength of the reasoning and expertise used to support them. The other concern is similar, relating to the guidance on anonymity (para 174). The Upper Tribunal were entitled on the evidence they had heard to indicate, as they did, that were no objections in principle to the form of the Sprakab reports, to the methodology used to produce them, or in general to the contributors not being identified by name in the reports. However, they went further, describing their reasons on this aspect as of general applicability and requiring some very good reason for a departure (para 174). Again that seems with respect unduly prescriptive on an issue which must depend on the circumstances of each case. As already noted, in RB itself, counsel for the appellant had made no reasoned objection in the circumstances of [that] case (para 25). This no doubt was because he was satisfied that the procedure adopted (including cross examination) and the information available to him enabled him properly to present his clients case. That concession could not be regarded as transferable to other cases. It was important in any guidance to emphasise that it would remain the duty of the tribunal in any future case to determine what justice requires, in the light of the evidence and submissions made to them. That could not be predetermined by general guidance given by the Upper Tribunal. More generally, there is a case for updating the guidance, which is now more than four years old. As I have explained, the Upper Tribunal in 2010 had limited direct evidence from those critical of the methodology. The conclusion of the present appeals provides an opportunity to review the guidance, in the light of this judgment and of experience in the cases, and any other relevant evidence both for and against Sprakabs methodology. It will be for the President of UTIAC to determine what form that review should take. While it is not for this court to take over that role, some pointers may be helpful: i) On the basis of the material we have seen, I see no reason in principle why Sprakab should not be able to report on both (a) language as evidence of place of origin and (b) familiarity with claimed place of origin provided, in both cases, their expertise is properly demonstrated and their reasoning adequately explained. (As will be seen below, the problem in relation to (b) was not the nature of the evidence, but the lack of demonstrated expertise.) ii) As to (a), language: a) The findings (on evidence) in RB are to my mind sufficient to demonstrate acceptable expertise and method, which can properly be accepted unless the evidence in a particular case shows otherwise; b) The Upper Tribunal ought to give further consideration to how the basis for the geographical attribution of particular dialects or usages can be better explained and not (as it often currently seems to be) left implicit. The tribunal needs to be able to satisfy itself as to the data by reference to which analysts make judgements on the geographical range of a particular dialect or usage. c) The RB safeguard requiring the Secretary of State to make the recording available to any expert instructed for the claimant is not only sensible, but essential. iii) As to (b), familiarity: a) The report needs to explain the source and nature of the knowledge of the analyst on which the comments are based, and identify the error or lack of expected knowledge found in the interview material; b) Sprakab reporters should limit themselves to identifying such lack of knowledge, rather than offering opinions on the general question of whether the claimant speaks convincingly. (It is not the function of an expert in language use to offer an opinion on general credibility.) iv) On the issue of anonymity, since the approach in RB was a departure from the norm, it would be appropriate for the tribunal to satisfy itself both that the departure remains justified in the interests of security of Sprakab personnel or otherwise, and, if it does, as to the safeguards necessary to ensure that the evidence is reliable and that no prejudice arises in individual cases. Consideration for example could be given to requiring assurances that the identifying numbers remain with an individual throughout his work with Sprakab, and requiring disclosure of other work done in any related field by the individual (eg advice to Governments, interpretation, translation), and of any occasion on which his conclusions have been rejected by courts or tribunals. The present appeals I turn to the application of these principles to the present cases. Regardless of the general discussion, there are in my view clear reasons for dismissing the present appeals on their own facts. They relate, first, to the use made by the AIT in each case of the Sprakab evidence relating to knowledge of country and culture; secondly the use by the Upper Tribunal of the guidance in RB in response to criticisms of the Sprakab reports. Knowledge of country and culture As noted by Lord Eassie, this is an issue on which there is a degree of common ground. It was not in dispute before them that the comments in the reports on the claimants knowledge of country and culture were inadequately supported by any demonstrated expertise of the authors. Of this Lord Eassie said, at para 53): This criticism may, I think, be treated relatively briefly since counsel for the Advocate General accepted that in what purported to be expert evidence of a linguistic analysis the author was stepping outside his proper field of expertise in expressing such views and comments. I consider that counsel was right to make that concession. What is being done appears to be nothing more than an expression of a view on credibility, which is outwith any expert witness' function. He added that in neither case was there anything to indicate the extent (if any) of the particular areas from which the interviewees were said to come, and that in any event it was doubtful to what extent such issues could be properly explored in a telephone conversation lasting only 18 minutes and dealing also with other matters. Before us, Mr Lindsay QCdid not seek to withdraw the concession that this aspect of the Sprakab evidence was unsupported by demonstrated expertise in the relevant field. However, he submitted that Lord Eassie erred in treating this as a defect which deprived the linguistic analyses of any validity, or undermined the conclusions of the respective immigration judges. In this submission he gained support from the dissenting judgment of Lord Marnoch (para 97). I am unable to accept those submissions. Not only do I agree that the concession was rightly made, but I also agree with Lord Eassies criticism that in some respects the evidence went beyond the proper role of a witness. Indeed, the observation that KYs knowledge sounds rehearsed for the occasion reads as that of an advocate rather than an independent expert witness, and was wholly inappropriate even if the relevant expertise had been established. Expert witnesses should never act or appear to act as advocates. Furthermore, on a fair reading of the careful judgments of the immigration judges in each case, I find it impossible to treat this aspect of their reasoning as severable from the remainder. In the first place this aspect formed an intrinsic part of Sprakabs overall assessment in each case, on which the judges relied. In KY the judge refers in terms to the two experts comment on her knowledge of country and culture, and in the absence of any contradictor in terms of the expert views given adopts them as part of the conclusions, without distinguishing the different aspects (paras 39 49). The position in MN is perhaps less clear, in that the judge undertook her own commendably detailed examination of the evidence relating to the claimants knowledge of his area, but I am unable to say that the supposedly expert views on this aspect expressed in the Sprakab report played no significant part in the overall reasoning. In my view, this point on its own is sufficient to undermine the decisions of the AIT in each case, and to this extent at least to require us to uphold the decision of the Court of Session. [I should add that, as Lord Eassie noted, it was not an issue which had arisen in in RB. We were told that this aspect of the Sprakab forms had been altered or deleted in later versions. The current form states (in capitals) that knowledge assessment is separate and forms no part of the language analysis.] Use of Guidance in RB In each appeal an important part of the appellants case, both before the first tribunal and in their grounds of appeal to the Upper Tribunal, was an attack on the use by the Secretary of State of the Sprakab reports. In each case the tribunal judge made a detailed analysis of the reports and the criticisms made of them, before accepting them. In KY as already noted Lord Macphail, when directing reconsideration under the old procedure, had made strong criticism of the Sprakab report in that case, partly by reference to the guidelines in the 2004 Language and National Origin Report, and had gone as far as to direct that reconsideration should take place without reference to it. (Whether he had power to do that is not now material.) Similarly, in MN SIJ Storey, when granting permission to appeal under the new procedure, noted the challenge to the reliance placed on the Sprakab report again by reference to the 2004 guidelines. By the time of the hearings in each case, in October and December 2010 respectively (as it happened, before the same Senior Immigration Judge), the decision and guidance in RB had become available. It is clear from the language used in each judgment, that the judge regarded that as effectively precluding further argument on the Sprakab reports. In KY he fairly criticised other advocates for treating Lord Macphails note as equivalent to a decision of the Court of Session; but made no other reference to his specific criticisms, other than to record the lack of suggestion of any possible error indicated in the Lord Ordinarys note that RB leaves unresolved. He treated RB as establishing that a linguistic analysis in terms of certainty or near certainty was such that little more would be required to justify a conclusion on whether the appellant had the history claimed, observing that this appellant is caught by that judgment. Similarly in MN he concluded that the appellants criticisms of the Sprakab report did not raise any point which has not been dealt with in principle in RB which is binding for present purposes (emphasis added in each case). In my view he was clearly wrong to take that approach. I have some sympathy for his position in dealing with these cases so soon after the judgment in RB. As I have explained, he was entitled to regard the guidance in RB as persuasive on the procedural matters covered by it (subject to the reservations expressed above). However, it was no substitute for a critical analysis of the particular reports relied on in the instant cases, and of the reasoning of the First tier tribunal on them. It may be said that such an error by the Upper Tribunal is not in itself a reason for refusing the appeal if the first tribunals decision is otherwise supportable. However, this would be to give no weight to the special appellate role of the Upper Tribunal in the new system, which is not fully replicated by onward appeal on law to the higher courts. Also, there were significant differences between the facts of the present cases, and those considered in RB. For example, the particular dialect in issue in each case (that of the Reer Hamar clan) was not the same as in RB. Further, as Lord Eassie points out (paras 59 60), there were serious questions about the basis on which the Sprakab analysts felt able to establish with such certainty the geographical allocation of the appellants modes of speech. These were issues which, having been properly raised in their grounds of appeal, the appellants were entitled to have considered and answered at the appeal level. Conclusions For the reasons given above, I would dismiss the present appeals. In the result, the case of MN will be remitted to the Upper Tribunal as ordered by the Inner House. In the case of KY, before the Inner House, (para 81) it was accepted for the Secretary of State that if the appeal succeeded it should be allowed simpliciter and no remission would be necessary. I did not understand Mr Lindsay to depart from that position in this court. Accordingly I would uphold that order.

It is central to each of the appellants claims for asylum that they came from a particular region of Somalia where they were at risk of persecution. In each case, in dismissing those claims, the Secretary of State relied on linguistic analysis to the effect that their mode of speaking was linked to Kenya not Somalia. That evidence came in the form of linguistic analysis reports provided by a Swedish commercial organisation called Sprakab. Those decisions were upheld on appeal to the Upper Tribunal (UT) but reversed by the Inner House which made a number of criticisms of the form of the reports and the reliance placed on them by the Asylum and Immigration Tribunal (AIT). In another case raising similar issues, a special three judge panel of the Upper Tribunal gave guidance on the use of such reports in the future. They endorsed the use of the Sprakab reports, subject to certain safeguards. Their approach was in general supported by the Court of Appeal in RB (Somalia) v Secretary of State for the Home Department [2012] EWCA Civ 277 (RB). The issues for consideration by the Supreme Court are: Whether the immigration judges were entitled to attribute any weight to the Sprakab reports; In what circumstances should witnesses providing evidence in such appeals be granted anonymity; Whether there are any particular rules governing expert evidence tendered in the name of an organisation rather than an individual; To what extent can such evidence be accepted in a form not prescribed by the Practice Directions; and To what extent, and with what effect, can the Upper Tribunal give guidance as to the weight to be given to such reports, or the conclusions to be drawn from them. The Supreme Court unanimously dismisses the appeal. Lord Carnwath gives the lead judgment, with which Lord Neuberger, Lord Clarke, Lord Hughes and Lord Hodge agree. The Practice Directions contain valuable guidance on the general principles applying to expert evidence. The absence of any specific provision in the Practice Directions for evidence in the form of the Sprakab reports was not in itself a bar to their admission. Where the tribunals were faced with a new form of evidence, of potential value in resolving issues of common occurrence, it was entirely appropriate for the UT to select a suitable case with a view to giving general guidance. The Practice Directions did not have to be rigidly applied. The UT were right in RB to address questions relating to Sprakab, its methodology and the presentation of its reports. Subject to appropriate safeguards, they were entitled to find no objection of principle to the admission of Sprakab reports [34 37]. The AIT has the power to make a direction for anonymity but in respect of an individual expert witness its exercise requires special justification. Sprakabs policy of anonymity would not absolve the tribunal of its duty to examine of itself the evidence said to justify a departure from the normal rule. However, there were valid reasons for taking a less strict view in the present context. This was not anonymous evidence in the ordinary sense. The evidence was advanced, and the expertise claimed, on behalf of an organisation, based on the collaborative work of individuals with different skills within it. There was no doubt about the identity of the organisation, its working methods or the qualifications and experience of those involved in preparing its report. The names of the individuals were available to the tribunal, and could have been made known to the parties if it became necessary to do so, for example to pursue a particular line of cross examination. Subject to appropriate safeguards, and to satisfy themselves that in the circumstances of the particular case no prejudice was caused, the Upper Tribunal were entitled to determine that there was no objection in principle to anonymity [42 43]. For the most part, the general guidance given by the UT was helpful and appropriate but on two aspects the guidance appears unduly prescriptive and potentially misleading. The first is as to the weight to be given to such evidence in future cases. It seems to underplay the importance in any case of the tribunal itself examining such a report critically in the light of all the evidence, and of the reasoning supporting its conclusion. The other concern is similar, relating to the guidance on anonymity. It is important to emphasise that it would remain the duty of the tribunal in any future case to determine what justice requires, in the light of the evidence and submissions made to them [44 50]. In the present cases, there are clear reasons for dismissing the appeals on their own facts. The comments in the reports (upon which the Secretary of State originally relied) on knowledge of country and culture were inadequately supported by any demonstrated expertise of the authors. In some respects the evidence went beyond the proper role of a witness. Expert witnesses should never act or appear to act as advocates. The judge in the UT was entitled to regard the guidance in RB as persuasive on the procedural matters covered by it, but it was no substitute for a critical analysis of the particular reports relied on and of the reasoning of the first tribunal [52 60].

The question that arises in this appeal is whether a court order must always be obtained before clinically assisted nutrition and hydration, which is keeping alive a person with a prolonged disorder of consciousness, can be withdrawn, or whether, in some circumstances, this can occur without court involvement. Terminology The term prolonged disorder of consciousness encompasses both a permanent vegetative state (sometimes referred to as a persistent vegetative state, and often shortened to PVS) and a minimally conscious state (or MCS). Prolonged disorder of consciousness is commonly shortened to PDOC and that practice is followed in this judgment. Clinically assisted nutrition and hydration is now referred to as CANH, although it has been variously described in the past. The facts Mr Y was an active man in his fifties when, in June 2017, he suffered a cardiac arrest which resulted in severe cerebral hypoxia and extensive brain damage. He never regained consciousness following the cardiac arrest. He required CANH, provided by means of a percutaneous endoscopic gastrostomy, to keep him alive. The month after his cardiac arrest, Mr Y was admitted to the regional hyper acute rehabilitation unit under the control of the first respondent NHS Trust so that his level of awareness could be assessed. In late September, his treating physician concluded that he was suffering from PDOC and that even if he were to regain consciousness, he would have profound cognitive and physical disability, remaining dependent on others to care for him for the rest of his life. A second opinion was obtained in October, from a consultant and professor in Neurological Rehabilitation, who considered that Mr Y was in a vegetative state and that there was no prospect of improvement. Mrs Y and their children believed that he would not wish to be kept alive given the doctors views about his prognosis. The clinical team and the family agreed that it would be in Mr Ys best interests for CANH to be withdrawn, which would result in his death within two to three weeks. On 1 November 2017, the NHS Trust issued an application in the Queens Bench Division of the High Court for a declaration (1) that it was not mandatory to seek the courts approval for the withdrawal of CANH from a patient with PDOC when the clinical team and the patients family were agreed that it was not in the patients best interests that he continue to receive that treatment, and (2) that no civil or criminal liability would result if CANH were to be withdrawn. At a directions hearing on 3 November, Fraser J invited the Official Solicitor to act as Mr Ys litigation friend in the proceedings but, rather than adjourning the case for a hearing in the Court of Protection as the Official Solicitor sought, he ordered that the final hearing be expedited and listed before OFarrell J in the Queens Bench Division on 10 November. On 10 November, OFarrell J [2017] EWHC 2866 (QB) refused the Official Solicitors renewed application for the case to be transferred to the Court of Protection. She considered that it would have been appropriate to transfer the case if the court were being asked to determine whether the withdrawal of treatment was in Mr Ys best interests, but that, in fact, the issue she had to determine was a purely legal issue. She concluded that it was not established that there was any common law principle that all cases concerning the withdrawal of CANH from a person who lacks capacity had to be sanctioned by the court. In her view, at para 52, where the clinicians have followed the Mental Capacity Act and good medical practice, there is no dispute with the family of the person who lacks capacity or others interested in his welfare, and no other doubts or concerns have been identified, there is no requirement to bring the matter before the court. Such was the situation in Mr Ys case, she considered, and accordingly she granted the following declaration: It is not mandatory to bring before the court the withdrawal of CANH from Mr Y who has a prolonged disorder of consciousness in circumstances where the clinical team and Mr Ys family are agreed that it is not in his best interests that he continues to receive that treatment. The judge granted the Official Solicitor permission to appeal and certified the case, pursuant to section 12 of the Administration of Justice Act 1969, as appropriate for an appeal directly to the Supreme Court. In case the result of the appeal was that proceedings should be brought in the Court of Protection, the judge gave directions so that any such proceedings could progress without delay. So it was that the Official Solicitor obtained a further expert report, from a different neuro rehabilitation consultant. However, although CANH had been continued pending the appeal, on 22 December 2017 Mr Y died, having developed acute respiratory sepsis. The expert instructed by the Official Solicitor could only base his report upon documentation, including Mr Ys medical records. In the report, he referred to the difficulty in diagnosing vegetative and minimally conscious states, and gave his opinion that, had Mr Y survived, further assessments, over a longer period of time, would have been required in order to reach a reliable conclusion that he was in a permanent vegetative state. Notwithstanding that, in view of Mr Ys death, the proceedings could no longer serve any purpose for him and his family, this court determined that the appeal should go ahead, because of the general importance of the issues raised by the case. Accordingly, the court has received full argument from Mr Gordon QC and Ms Paterson for the Official Solicitor, and Mr Sachdeva QC and Ms Dobson for the first two respondents (the NHS Trust which manages the regional hyper acute rehabilitation unit at which Mr Y was a patient until he was discharged to a nursing home and the Clinical Commissioning Group which funded the nursing home). Written submissions were permitted from the four intervenors. Mrs Y understandably felt unable to participate in the proceedings at what is an exceptionally sad and difficult time for her and her family. The opposing arguments in brief summary I will look at the Official Solicitors case in detail later, but it may help to introduce the issues now by means of the briefest of summaries. The Official Solicitor submits that, in every case, court approval must be sought before CANH can be withdrawn from a person with PDOC, thus ensuring that the patients vulnerable position is properly safeguarded by representation through the Official Solicitor, who can obtain independent expert medical reports about his condition and prognosis, and make submissions to the court on his behalf if appropriate. The Official Solicitor derives this requirement essentially from the common law and/or the European Convention on Human Rights (ECHR), in particular article 2 and article 6. In his submission, his position finds support in the Mental Capacity Act Code of Practice, issued on 23 April 2007 pursuant to section 42(1) of the Mental Capacity Act 2005 (MCA 2005). He submits that it is irrelevant that neither the MCA 2005 nor the Court of Protection Rules specifically impose the requirement for which he contends. The first and second respondents disagree, submitting that neither the common law nor the ECHR imposes a universal requirement to obtain court approval prior to the withdrawal of CANH. The case law preceding the MCA 2005 The MCA 2005 was a watershed in the law relating to people who lack capacity. Before the Act, questions relating to the management of the property and affairs of adults who did not have capacity to make their own decisions, were dealt with in the old style Court of Protection, and questions relating to the care and welfare of such adults were resolved under the inherent jurisdiction of the High Court. The MCA 2005 established a new regime with, amongst other things, a new Court of Protection which has jurisdiction in relation to both property matters and issues relating to personal care. Nevertheless, an examination of the common law in relation to the treatment of patients such as Mr Y must commence with the pre MCA 2005 cases, and I turn first to two centrally important House of Lords decisions, In re F (Mental Patient: Sterilisation) [1990] 2 AC 1 and Airedale NHS Trust v Bland [1993] AC 789. In In re F (Mental Patient: Sterilisation), the House of Lords considered whether the court had jurisdiction to grant a declaration that it would not be unlawful for a sterilisation operation to be carried out on a woman who, because of mental incapacity, was unable to consent to the operation herself. Although not concerned with precisely the sort of life and death decision that is involved in the present litigation, the decision is relevant because their Lordships were required to determine a sensitive and difficult question relating to medical treatment of a mentally incapacitated adult. They determined that the court could, under its inherent jurisdiction, make a declaration that the proposed operation was in the patients best interests and therefore lawful. They also held that where the procedure was intended to prevent pregnancy rather than for the purpose of treating a disease, although not necessary to establish the lawfulness of the operation, it was highly desirable, as a matter of good practice, that a declaration be obtained before the operation took place. The starting point for the reasoning was the established common law position that a doctor cannot lawfully operate on adult patients of sound mind, or give them any other treatment involving the application of physical force without their consent, and if he were to do so, he would commit the tort of trespass to the person (p 55), but that, in the case of a patient who lacked the capacity to consent to treatment, a doctor could lawfully operate or give other treatment provided that it was in the best interests of the patient. There was a range of views as to whether, with an operation such as the proposed sterilisation operation, it was desirable/necessary to obtain a declaration from the court that the procedure was in the patients best interests. All were in favour of a declaration being obtained but, for the most part, put the matter on the basis of good practice, rather than finding it to be a legal requirement that such a declaration first be obtained. There was fairly general agreement with the approach of Lord Brandon of Oakbrook. At p 56, he identified six special features of the particular operation which were influential in his view that, whilst the lawfulness of the treatment did not depend upon the courts approval and it was not therefore strictly necessary as a matter of law to seek it, the involvement of the court was highly desirable as a matter of good practice. The six features were: first, the operation will in most cases be irreversible; secondly, by reason of the general irreversibility of the operation, the almost certain result of it will be to deprive the woman concerned of what is widely, and as I think rightly, regarded as one of the fundamental rights of a woman, namely, the right to bear children; thirdly, the deprivation of that right gives rise to moral and emotional considerations to which many people attach great importance; fourthly, if the question whether the operation is in the best interests of the woman is left to be decided without the involvement of the court, there may be a greater risk of it being decided wrongly, or at least of it being thought to have been decided wrongly; fifthly, if there is no involvement of the court, there is a risk of the operation being carried out for improper reasons or with improper motives; and, sixthly, involvement of the court in the decision to operate, if that is the decision reached, should serve to protect the doctor or doctors who perform the operation, and any others who may be concerned in it, from subsequent adverse criticisms or claims. Lord Goff of Chieveley expressed his own view (p 79) that, as a matter of practice, the operation should not be performed without first obtaining the opinion of the court that the operation is, in the circumstances, in the best interests of the person concerned, by seeking a declaration that the operation is lawful. In his opinion, the courts guidance should be sought in order to obtain an independent, objective and authoritative view on the lawfulness of the procedure in the particular circumstances of the relevant case, after a hearing at which it can be ensured that there is independent representation on behalf of the person upon whom it is proposed to perform the operation. Lord Griffiths would have been minded to make it a legal requirement to obtain the sanction of the High Court in all cases, and considered that the common law could be adapted to introduce such a requirement. However, he recognised that he would be making new law, and that the other members of the House considered that it was not open to them to take that course. He therefore accepted what Lord Brandon had proposed, but as second best (pp 70 to 71). Airedale NHS Trust v Bland [1993] AC 789 concerned a man who had been left in a persistent vegetative state after being injured in the Hillsborough disaster. He could see, hear, and feel nothing and could not communicate in any way. There was no prospect whatever that he would make any recovery, but if he continued to have the medical care that he was receiving, there was every likelihood that he would maintain his present state of existence for many years to come. Over three years after the accident, the family and the patients doctors having formed the view that, in these circumstances, it was appropriate to stop prolonging his life by artificial means, an application was made by the hospital authority for declarations that the measures keeping him alive, including artificial nutrition and hydration, could lawfully be discontinued, which would result in his death. The House of Lords held that the declarations could and should be granted, explaining why in a series of thoughtful speeches considering the moral and legal aspects of the issue. It is important to set the decision in context. Recent developments in medical technology, including the development of life support systems, had made it possible for patients who would otherwise have died to survive. As Lord Browne Wilkinson said (p 878C et seq), those recent developments had fundamentally affected previous certainties about what was life and what was death, and meant that the time and manner of someones death might no longer be dictated by nature but might instead be determined by a human decision. Wholly new ethical and social problems had been raised by the developments, and society was not of one mind about them. It was not a foregone conclusion that the withdrawal of artificial life support measures could be tolerated at all by the criminal and civil law, and the decision to endorse the declarations that had been granted by the President of the Family Division was only arrived at after an extensive review of the law, and then only on a narrow basis tied firmly to the facts of the case. Their Lordships were at pains to emphasise that the case was an extreme one, it having been overwhelmingly established that the patient was, and would remain, insensate. They were conscious that there would be cases in which the facts were less extreme and the issues, legal and ethical, even more difficult. They did not seek, in their decision, to provide a set of universal principles, dictating the answers in all other cases, and there was acknowledgment that some of the issues arising may more properly be for Parliament to determine. A sense of the delicacy with which the House was proceeding is conveyed by Lord Mustills observation that [e]very step forward requires the greatest caution (p 899F). In these circumstances, it is not at all surprising that their Lordships held that, for the time being, the guidance of the court should be sought before treatment and care of a patient were discontinued. Given the central importance that Mr Gordon attaches to what they said about this, the relevant passages will need to be cited in full in due course, but, before doing that, it is appropriate to underline the following three points of importance that are found in the speeches and have relevance not only to the decision in the Bland case, but also to subsequent decisions, including the present one: i) As has already been seen from In re F (Mental Patient: Sterilisation) (supra), it is unlawful to administer medical treatment to an adult who is conscious and of sound mind, without his consent; to do so is both a tort and the crime of battery. Such an adult is at liberty to decline treatment even if that will result in his death, and the same applies where a person, in anticipation of entering into a condition such as PVS, has given clear instructions that in such an event he is not to be given medical care, including artificial feeding, designed to keep him alive. ii) Where a person, due to accident or some other cause, becomes unconscious and thus unable to give or withhold consent, it is lawful for doctors to give such treatment as, in their informed opinion, is in the best interests of the patient. Where it is no longer in the best interests of the patient to provide treatment, it may, and ultimately should, be discontinued (see, for example, p 867 of Lord Goffs speech, with which Lord Keith of Kinkel and Lord Lowry agreed). iii) The argument that artificial feeding (in that case by nasogastric tube) was not medical treatment at all, but indistinguishable from normal feeding, was rejected. Regard had to be had to the whole regime which was keeping the patient alive, and in any event a medical technique was involved in the feeding. I come now to look in more depth at what their Lordships had to say in the Bland case when explaining their position in relation to declaratory relief. It is useful to start with their recognition that the courts and the medical profession were working together in addressing the new situation that had arisen as a result of scientific advances. The medical profession had already been working on the issue and there was available a Discussion Paper on Treatment of Patients in Persistent Vegetative State, issued in September 1992 by the Medical Ethics Committee of the British Medical Association. On the basis of it, at p 870, Lord Goff paid tribute to the evident care with which the topic was being considered by the medical profession. In a passage which remains relevant today, he commented as follows on the respective roles of doctors and judges in life and death cases (p 871): I also feel that those who are concerned that a matter of life and death, such as is involved in a decision to withhold life support in case of this kind, should be left to the doctors, would do well to study this paper. The truth is that, in the course of their work, doctors frequently have to make decisions which may affect the continued survival of their patients, and are in reality far more experienced in matters of this kind than are the judges. It is nevertheless the function of the judges to state the legal principles upon which the lawfulness of the actions of doctors depend; but in the end the decisions to be made in individual cases must rest with the doctors themselves. In these circumstances, what is required is a sensitive understanding by both the judges and the doctors of each other's respective functions, and in particular a determination by the judges not merely to understand the problems facing the medical profession in cases of this kind, but also to regard their professional standards with respect. Mutual understanding between the doctors and the judges is the best way to ensure the evolution of a sensitive and sensible legal framework for the treatment and care of patients, with a sound ethical base, in the interest of the patients themselves. This is a topic to which I will return at the end of this opinion, when I come to consider the extent to which the view of the court should be sought, as a matter of practice, in cases such as the present. At p 873, Lord Goff did return to the topic, saying: I turn finally to the extent to which doctors should, as a matter of practice, seek the guidance of the court, by way of an application for declaratory relief, before withholding life prolonging treatment from a PVS patient. The President considered that the opinion of the court should be sought in all cases similar to the present. In the Court of Appeal, Sir Thomas Bingham MR expressed his agreement with Sir Stephen Brown P in the following words, ante, pp 815 816: This was in my respectful view a wise ruling, directed to the protection of patients, the protection of doctors, the reassurance of patients families and the reassurance of the public. The practice proposed seems to me desirable. It may very well be that with the passage of time a body of experience and practice will build up which will obviate the need for application in every case, but for the time being I am satisfied that the practice which the President described should be followed. Before the Appellate Committee, this view was supported both by Mr Munby, for the Official Solicitor, and by Mr Lester, as amicus curiae. For the respondents, Mr Francis suggested that an adequate safeguard would be provided if reference to the court was required in certain specific cases, ie, (1) where there was known to be a medical disagreement as to the diagnosis or prognosis, and (2) problems had arisen with the patients relatives disagreement by the next of kin with the medical recommendation; actual or apparent conflict of interest between the next of kin and the patient; dispute between members of the patients family; or absence of any next of kin to give their consent. There is, I consider, much to be said for the view that an application to the court will not be needed in every case, but only in particular circumstances, such as those suggested by Mr Francis. In this connection I was impressed not only by the care being taken by the Medical Ethics Committee to provide guidance to the profession, but also by information given to the Appellate Committee about the substantial number of PVS patients in the country, and the very considerable cost of obtaining guidance from the court in cases such as the present. However, in my opinion this is a matter which would be better kept under review by the President of the Family Division than resolved now by your Lordships House. I understand that a similar review is being undertaken in cases concerned with the sterilisation of adult women of unsound mind, with a consequent relaxation of the practice relating to applications to the court in such cases. For my part, I would therefore leave the matter as proposed by the Master of the Rolls; but I wish to express the hope that the President of the Family Division, who will no doubt be kept well informed about developments in this field, will soon feel able to relax the present requirement so as to limit applications for declarations to those cases in which there is a special need for the procedure to be invoked. Lord Keith said (p 859): The decision whether or not the continued treatment and care of a PVS patient confers any benefit on him is essentially one for the practitioners in charge of his case. The question is whether any decision that it does not and that the treatment and care should therefore be discontinued should as a matter of routine be brought before the Family Division for endorsement or the reverse. The view taken by the President of the Family Division and the Court of Appeal was that it should, at least for the time being and until a body of experience and practice has been built up which might obviate the need for application in every case. As Sir Thomas Bingham MR said, this would be in the interests of the protection of patients, the protection of doctors, the reassurance of the patients families and the reassurance of the public. I respectfully agree that these considerations render desirable the practice of application. Lord Lowry said (p 875): Lord Browne Wilkinson said (p 885): Procedurally I can see no present alternative to an application to the court such as that made in the present case. This view is reinforced for me when I reflect, against the background of your Lordships conclusions of law, that, in the absence of an application, the doctor who proposes the cessation of life supporting care and treatment on the ground that their continuance would not be in the patients best interests will have reached that conclusion himself and will be judge in his own cause unless and until his chosen course of action is challenged in criminal or civil proceedings. A practical alternative may, however, be evolved through the practice of the Family Division and with the help of the Medical Ethics Committee, which has already devoted so much thought to the problem, and possibly of Parliament through legislation. I am very conscious that I have reached my conclusions on narrow, legalistic, grounds which provide no satisfactory basis for the decision of cases which will arise in the future where the facts are not identical. I must again emphasise that this is an extreme case where it can be overwhelmingly proved that the patient is and will remain insensate: he neither feels pain from treatment nor will feel pain in dying and has no prospect of any medical care improving his condition. Unless, as I very much hope, Parliament reviews the law, the courts will be faced with cases where the chances of improvement are slight, or the patient has very slight sensate awareness. I express no view on what should be the answer in such circumstances: my decision does not cover such a case. I therefore consider that, for the foreseeable future, doctors would be well advised in each case to apply to the court for a declaration as to the legality of any proposed discontinuance of life support where there has been no valid consent by or on behalf of the patient to such discontinuance. Lord Mustill did not say anything specifically on the topic, but he spoke of his profound misgivings about almost every aspect of this case (p 899), and, as the comment that I have already quoted above shows, he urged that matters should proceed with the greatest caution. The practice of seeking declarations as to the lawfulness of medical treatment became firmly established in the years after In re F and the Bland case, as can be seen from the comment of Hale J, as Baroness Hale then was, in In re S (Hospital Patient: Courts Jurisdiction) [1995] Fam 26, that it has been followed in many cases (p 31E). The next case which needs to be considered is R (Burke) v General Medical Council (Official Solicitor and others intervening) [2006] QB 273. There, the court was called upon to determine issues in relation to a patient who was competent but suffering from a congenital degenerative brain condition. In contrast to the Bland case, the litigation was not brought in order to obtain the courts sanction for treatment being withdrawn, but in order to ensure that it would not be withdrawn. Nevertheless, the decision covers ground which is of relevance to the present issue. The patient wished to ensure that the artificial nutrition and hydration that he would need as his degenerative condition progressed would not be withheld by the medical practitioners responsible for his care. He sought judicial review of the General Medical Councils 2002 guidance, Withholding and Withdrawing Life prolonging Treatments: Good Practice in Decision making, on the basis that it was incompatible with his rights at common law and under the ECHR in, inter alia, failing to spell out a legal requirement to obtain prior judicial sanction for the withdrawal of artificial nutrition and hydration. The Court of Appeal considered the principles applicable in such circumstances and found the guidance compatible with them. Giving the judgment of the court, the Master of the Rolls, Lord Phillips of Worth Matravers, considered whether there was in fact a legal requirement to obtain court authorisation before withdrawing artificial nutrition and hydration, as Munby J had determined that there was, in certain circumstances. The Court of Appeal did not agree that such a requirement existed. Summarising the legal position, the Master of the Rolls said (para 71): We asked Mr Gordon to explain the nature of the duty to seek the authorisation of the court and he was not able to give us a coherent explanation. So far as the criminal law is concerned, the court has no power to authorise that which would otherwise be unlawful: see, for instance, the observation of Lord Lowry in Blands case [1993] AC 789, 875H. Nor can the court render unlawful that which would otherwise be lawful. The same is true in relation to a possible infringement of civil law. In Blands case the House of Lords recommended that, as a matter of good practice, reference should be made to the Family Court before withdrawing ANH from a patient in a PVS, until a body of experience and practice had built up. Plainly there will be occasions in which it will be advisable for a doctor to seek the courts approval before withdrawing ANH in other circumstances, but what justification is there for postulating that he will be under a legal duty so to do? [Original emphasis] Having considered, but rejected, the possibility that the Human Rights Act 1998 and the decision of the European Court of Human Rights (the ECtHR) in Glass v United Kingdom [2004] 1 FLR 1019 had converted what was only a requirement of good practice into a legal requirement, the court said (para 80): The true position is that the court does not authorise treatment that would otherwise be unlawful. The court makes a declaration as to whether or not proposed treatment, or the withdrawal of treatment, will be lawful. Good practice may require medical practitioners to seek such a declaration where the legality of proposed treatment is in doubt. This is not, however, something that they are required to do as a matter of law. Mr Burke made a complaint to the ECtHR under articles 2, 3, 8 and 14 of the ECHR (Burke v United Kingdom (Application No 19807/0) 11 July 2006). It was rejected as manifestly ill founded. The ECtHR expressed itself satisfied that the presumption of domestic law is strongly in favour of prolonging life where possible, which accords with the spirit of the Convention (p 8 of the decision). Dealing specifically with the argument that there was insufficient protection for someone in Mr Burkes position, because a doctor might reach a decision to withdraw artificial nutrition and hydration without being obliged to obtain approval from the court, the court saw no problem with a process which involved taking into account the patients previously expressed wishes and those of people close to him, and the opinions of medical personnel, and approaching a court only if there was any conflict or doubt as to the applicants best interests. It appears to have been content to endorse what the Court of Appeal said: the Court would refer to the Court of Appeals explanation that the courts do not as such authorise medical actions but merely declare whether a proposed action is lawful. A doctor, fully subject to the sanctions of criminal and civil law, is only therefore recommended to obtain legal advice, in addition to proper supporting medical opinion, where a step is controversial in some way. Any more stringent legal duty would be prescriptively burdensome doctors, and emergency ward staff in particular, would be constantly in court and would not necessarily entail any greater protection. The Mental Capacity Act 2005 Since 2007, the MCA 2005 has been the statutory context within which treatment decisions are taken in relation to those who lack capacity, essentially without input from the court, but with the possibility of an application being made to court should the case require it. It may be helpful briefly to review the main provisions of the Act which are relevant to the present issue, dealing first with provisions of general application and then coming, in para 39, to the provisions dealing with the courts involvement and, in para 40, to the provision requiring the Lord Chancellor to issue codes of practice. I start with two provisions which place the best interests of the person who lacks capacity at the heart of the process. Section 1(5) provides that an act done, or a decision made, under the Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests. Section 4 sets out how someone determining, for the purposes of the Act, what is in a persons best interests must go about the task. All the relevant circumstances must be considered, and the steps listed in the section must be taken. They include considering, so far as reasonably ascertainable, the persons wishes and feelings, and the beliefs and values that would be likely to influence his decision if he had capacity, as well as the other factors that he would be likely to consider if he were able to do so. Also to be taken into account are the views of various specified people who have some responsibility for or are interested in his welfare. There is a specific subsection, section 4(5), dealing with a determination that relates to life saving treatment; it provides that in such cases, in considering whether the treatment is in the best interests of the person concerned, the person making the determination must not be motivated by a desire to bring about his death. Section 5 allows carers, including health professionals, to carry out acts in connection with personal care, health care, or treatment of a person who lacks capacity to consent. It provides a significant degree of protection from liability, provided that the act is done in the reasonable belief that capacity is lacking and that the act is in the patients best interests. If these conditions are satisfied, no more liability is incurred than would have been incurred if the patient had had capacity to consent and had done so. There are provisions of the Act which enable someone to cater in advance for the possibility that he or she will, in future, lose the capacity to make decisions about his or her own welfare. One such provision is section 9 which deals with lasting powers of attorney, under which the donor gives the donee authority to make decisions about the donors personal welfare. Such a power of attorney is subject to the restrictions in section 11(7), and thus subject to sections 24 to 26 of the Act (see immediately below). Although it will normally extend to giving or refusing consent to the carrying out or continuation of a treatment by a person providing health care for the donor, section 11(8) provides that it will not authorise the giving or refusing of consent to the carrying out or continuation of life sustaining treatment, unless the instrument contains express provision to that effect. Sections 24 to 26 deal specifically with advance decisions to refuse treatment. They enable an adult with capacity to decide in advance that if he later lacks capacity to consent to the carrying out or continuation of a specified health care treatment, that treatment is not to be carried out or continued. Such an advance decision applies to life sustaining treatment only if the decision is verified by a statement from the person concerned that it is to apply even if his life is at risk, and the decision complies with certain formalities set out in section 25(6), which essentially requires it to be written, signed and witnessed. Section 37 makes provision for a situation in which an NHS body is proposing to provide serious medical treatment for a person who lacks capacity to consent to it and there is no one, other than those engaged in providing care or treatment for the person in a professional capacity or for remuneration, whom it would be appropriate to consult in determining what would be in the persons best interests. Serious medical treatment means treatment which involves providing, withholding or withdrawing treatment of a kind prescribed by regulations made by the appropriate authority, which in practice will relate to situations in which a finely balanced decision has to be taken or what is proposed would be likely to involve serious consequences for the patient. Before providing the treatment, the NHS body must instruct an independent mental capacity advocate (referred to as an IMCA) to represent the person, although treatment which is urgently needed can be provided even though it has not been possible to appoint an IMCA. In providing treatment, the NHS body has to take into account information provided or submissions made by the IMCA. The provisions of sections 15 to 17 of the Act give the court power to make decisions about personal welfare and to make declarations and orders in respect of a person who lacks capacity. Section 15 deals with declarations, including declarations as to the lawfulness or otherwise of any act which has been or is to be done. Section 16 enables the court, by making an order, to make personal welfare decisions for a person without capacity, and, by section 17, the courts power in this regard extends to giving or refusing consent to the carrying out or continuation of a treatment by a person providing health care for the patient. Section 16(3) makes it clear that the courts powers under section 16 are subject to the provisions of the Act and, in particular, to section 1 and to section 4. What governs the courts decision about any matter concerning the patients personal welfare is therefore the patients best interests. Section 42 provides for the Lord Chancellor to prepare and issue codes of practice on various subjects. Before preparing a code, the Lord Chancellor has duties to consult, and a code may not be issued unless it has been laid before both Houses of Parliament in accordance with section 43(2). Section 42(4) imposes a duty on someone acting in a professional capacity in relation to a person who lacks capacity to have regard to any relevant code. Section 42(5) provides that if it appears to a court conducting any criminal or civil proceedings that a provision of a code, or a failure to comply with a code, is relevant to a question arising in the proceedings, the provision or failure must be taken into account in deciding the question. Before leaving this overview of the provisions of the 2005 Act, it is worth noting a provision which is not to be found amongst them. The Law Commission had recommended (see Law Commission Report No 231 on Mental Incapacity, published in 1995, particularly para 6.21) that the new statute should provide that the discontinuance of artificial sustenance to an unconscious patient with no activity in the cerebral cortex and no prospect of recovery should in every case require the prior approval of the court, unless an attorney or court appointed manager had express authority to make the decision, albeit that flexibility for the future was to be incorporated by providing that the Secretary of State could, by order, replace the need for court approval with a requirement for a certificate from an independent medical practitioner duly appointed for that purpose. As the Explanatory Notes to the 2005 Act state, the Act has its basis in the Law Commission Report. However, it does not seem to have been thought appropriate to include in it a requirement of court approval. In a note provided by counsel for the appellant, it is suggested that the reason for this was that the government concluded that, rather than creating inflexible legal rules, the better course would be for the courts to continue to decide which cases should have their prior sanction, with the situations in which that was the case being set out in a code of practice (see Baroness Ashton of Uphollands statement during the debate on the Bill in the House of Lords, Hansard (HL Debates) 25 January 2005, vol 668, col 1243). Mental Capacity Act 2005 Code of Practice The Mental Capacity Act 2005 Code of Practice (the Code), issued under section 42 of the MCA 2005, came into effect in April 2007. Chapter 5 of the Code has a section entitled How should someones best interests be worked out when making decisions about life sustaining treatment? It includes the following: 5.31 All reasonable steps which are in the persons best interests should be taken to prolong their life. There will be a limited number of cases where treatment is futile, overly burdensome to the patient or where there is no prospect of recovery. In circumstances such as these, it may be that an assessment of best interests leads to the conclusion that it would be in the best interests of the patient to withdraw or withhold life sustaining treatment, even if this may result in the persons death. The decision maker must make a decision based on the best interests of the person who lacks capacity. They must not be motivated by a desire to bring about the persons death for whatever reason, even if this is from a sense of compassion. Healthcare and social care staff should also refer to relevant professional guidance when making decisions regarding life sustaining treatment. 5.33 Doctors must apply the best interests checklist and use their professional skills to decide whether life sustaining treatment is in the persons best interests. If the doctors assessment is disputed, and there is no other way of resolving the dispute, ultimately the Court of Protection may be asked to decide what is in the persons best interests. 5.36 As mentioned in para 5.33 above, where there is any doubt about the patients best interests, an application should be made to the Court of Protection for a decision as to whether withholding or withdrawing life sustaining treatment is in the patients best interests. Chapter 6 of the Code is entitled What protection does the Act offer for people providing care or treatment? Healthcare and treatment decisions are dealt with from paras 6.15 to 6.19. Para 6.16 says that major healthcare and treatment decisions, such as major surgery or a decision that no attempt is to be made to resuscitate a patient, need special consideration. Health care staff are directed to work out carefully what would be in the persons best interests, taking into account the views of people in various categories, and involving an IMCA where no one else is available to consult. Para 6.17 commends multi disciplinary meetings as often the best way to decide on a persons best interests. They bring together healthcare and social care staff to discuss the persons options and may involve those who are closest to the person concerned. However, the paragraph stresses that final responsibility for deciding what is in the best interests of the person lies with the member of healthcare staff responsible for the persons treatment, who should record their decision, how they reached it, and the reasons for it, in the patients clinical notes. As long as they have recorded objective reasons to show that the decision is in the persons best interests, and the other requirements of section 5 of the Act are met, all healthcare staff taking actions in connection with the particular treatment will be protected from liability. Para 6.18 then goes on to single out certain treatment decisions in the following terms: 6.18 Some treatment decisions are so serious that the court has to make them unless the person has previously made a Lasting Power of Attorney appointing an attorney to make such healthcare decisions for them (see chapter 7) or they have made a valid advance decision to refuse the proposed treatment (see chapter 9). The Court of Protection must be asked to make decisions relating to:20 the proposed withholding or withdrawal of artificial nutrition and hydration (ANH) from a patient in a permanent vegetative state (PVS) cases where it is proposed that a person who lacks capacity to consent should donate an organ or bone marrow to another person the proposed non therapeutic sterilisation of a person who lacks capacity to consent (for example, for contraceptive purposes) cases where there is a dispute about whether a particular treatment will be in a persons best interests. See paragraphs 8.18 8.24 for more details on these types of cases. Footnote 20 to para 6.18 refers to procedures resulting from those court judgments but the court judgments in question are not named. Para 6.19 develops matters a little: Chapter 8 of the Code deals with the role of the Court of Protection. Commencing at para 8.18, there is a section headed Serious healthcare and treatment decisions. Paras 8.18 and 8.19 read: 6.19 This last category may include cases that introduce ethical dilemmas concerning untested or innovative treatments where it is not known if the treatment will be effective, or certain cases involving a termination of pregnancy. It may also include cases where there is conflict between professionals or between professionals and family members which cannot be resolved in any other way. Where there is conflict, it is advisable for parties to get legal advice, though they may not necessarily be able to get legal aid to pay for this advice. Chapter 8 gives more information about the need to refer cases to court for a decision. 8.18 Prior to the Act coming into force, the courts decided that some decisions relating to the provision of medical treatment were so serious that in each case, an application should be made to the court for a declaration that the proposed action was lawful before that action was taken. Cases involving any of the following decisions should therefore be brought before a court: decisions about the proposed withholding or withdrawal of artificial nutrition and hydration (ANH) from patients in a permanent vegetative state (PVS) cases involving organ or bone marrow donation by a person who lacks capacity to consent cases involving the proposed non therapeutic sterilisation of a person who lacks capacity to consent to this (eg for contraceptive purposes) and all other cases where there is a doubt or dispute about whether a particular treatment will be in a persons best interests. 8.19 The case law requirement to seek a declaration in cases involving the withholding or withdrawing of artificial nutrition and hydration to people in a permanent vegetative state is unaffected by the Act30 and as a matter of practice, these cases should be put to the Court of Protection for approval. Footnote 30 refers to the Bland case. Just to complete the picture, para 15.36 says that [t]here are some decisions that are so serious that the court should always make them and refers the reader back to chapter 8 for more information about that type of case. It will be noted that the Code of Practice does not seem to be entirely consistent in its approach to involving the court in serious treatment decisions, chapter 6 asserting that the Court of Protection must be asked to make certain decisions, and chapter 8 that certain decisions should be brought before a court. It will be necessary to return to this later. Court of Protection Rules and Practice Directions Court of Protection Rules are made by the President of the Family Division (who is the President of the Court of Protection), in exercise of powers conferred by the MCA 2005. Assistance is provided by an ad hoc Rules Committee which is chaired by the Vice President of the Court of Protection, and includes judges of the Court of Protection, experienced solicitors and barristers, representatives of local authorities, court staff and the Official Solicitor. The first set of rules were the Court of Protection Rules 2007 (SI 2007/1744). They were replaced by the Court of Protection Rules 2017 (SI 2017/1035) which came into force on 1 December 2017. Both sets of Rules have been supplemented by Practice Directions. The Court of Protection Rules 2007 were accompanied by Practice Direction 9E. This was entitled Applications relating to serious medical treatment and set out the procedure to be followed where the application concerned serious medical treatment. Para 5 of the Practice Direction said that cases involving decisions about the proposed withholding or withdrawal of artificial nutrition and hydration from a person in a permanent vegetative state or a minimally conscious state should be regarded as serious medical treatment for the purposes of the Rules and this Practice Direction, and should be brought to the court. When the 2017 Rules replaced the 2007 Rules, this provision was revoked and no equivalent provision was introduced. As to the reasoning for this change, some insight is provided by the notes of a meeting in July 2017 of the ad hoc Court of Protection Rules Committee, which are headed Further Note: Serious Medical Treatment Practice Directions 9E and12A (28 July 2017). The notes state (para 7) that no final recommendation was formulated by the committee. However, it is recorded (para 4) that it had been concluded that Practice Direction 9E should not have included provisions as to what cases should be brought to court, since a practice direction cannot properly direct when an application should be made, and that accordingly any new practice direction should not include any equivalent provision. The final paragraph records that Charles J, as the chairman of the committee, would recommend and so instruct work to be done to remove and not replace Practice Direction 9E. It appears that the committee had considered, but not generally favoured, a practice direction which took a different approach, for example recording what had been said in the decided cases. It was, however, common ground that the British Medical Association, the Law Society, the Ministry of Justice and the Department of Health (the reference, in the conclusions and recommendations section of the note, to the Ministry of Defence must be a mistake) would create a working group to address the underlying issues and the giving of guidance which would take account of developing authority and so would consider how the guidance produced could be readily updated. The case law: domestic decisions after MCA 2005 Aintree University Hospitals NHS Foundation Trust v James [2013] UKSC 67; [2014] AC 591 was the first case to come before the Supreme Court under the MCA 2005. It concerned a patient with multiple medical problems, who had a very limited level of awareness and lacked capacity to make decisions concerning his medical treatment. The hospital Trust applied for a declaration, under section 15 of the MCA 2005, that it would be lawful, as being in the patients best interests, for three particular life preserving treatments to be withheld if his condition got worse. The family did not agree with the withdrawal of treatment and, at first instance, Peter Jackson J refused to grant the declaration. By the time of the Trusts appeal to the Court of Appeal, the patient had suffered a dramatic deterioration; he was completely dependent on mechanical ventilation and was comatose or semi comatose. The Court of Appeal allowed the appeal and granted the declaration. The patient subsequently died, following a cardiac arrest, but the Supreme Court nonetheless heard his widows appeal, which gave rise to questions concerning the proper approach to the assessment of a patients best interests in the post MCA 2005 era. The appeal was dismissed, although Peter Jackson Js approach to determining the patients best interests was preferred to that of the Court of Appeal. Baroness Hale gave a judgment with which the other justices all agreed. She restated, now with reference to the provisions of the MCA 2005, the position as to invasive medical treatment of a patient. Although going over ground covered in the pre MCA 2005 cases, it is worth setting out the relevant passages in full, since they establish the up to date legal context for the questions that arise in the present appeal. She said: 19. Generally it is the patients consent which makes invasive medical treatment lawful. It is not lawful to treat a patient who has capacity and refuses that treatment. Nor is it lawful to treat a patient who lacks capacity if he has made a valid and applicable advance decision to refuse it: see the 2005 Act, sections 24 to 26. Nor is it lawful to treat such a patient if he has granted a lasting power of attorney (under section 10) or the court has appointed a deputy (under section 16) with the power to give or withhold consent to that treatment and that consent is withheld; but an attorney only has power to give or withhold consent to the carrying out or continuation of life sustaining treatment if the instrument expressly so provides (section 11(8)) and a deputy cannot refuse consent to such treatment: section 20(5). 20. Those cases aside, it was recognised by the House of Lords in In re F (Mental Patient: Sterilisation) [1990] 2 AC 1 that where a patient is unable to consent to treatment it is lawful to give her treatment which is necessary in her best interests. Section 5 of the Mental Capacity Act 2005 now provides a general defence for acts done in connection with the care or treatment of a person, provided that the actor has first taken reasonable steps to establish whether the person concerned lacks capacity in relation to the matter in question and reasonably believes both that the person lacks capacity and that it will be in his best interests for the act to be done. However, section 5 does not expressly refer both to acts and to omissions, the giving or withholding of treatment. The reason for this, in my view, is that the fundamental question is whether it is lawful to give the treatment, not whether it is lawful to withhold it. Baroness Hale underlined further, in para 22, that the focus is on whether it is in the patients best interests to give the treatment, rather than whether it is in his best interests to withhold it or withdraw it. She continued: If the treatment is not in [the patients] best interests, the court will not be able to give its consent on his behalf and it will follow that it will be lawful to withhold or withdraw it. Indeed, it will follow that it will not be lawful to give it. It also follows that (provided of course that they have acted reasonably and without negligence) the clinical team will not be in breach of any duty towards the patient if they withhold or withdraw it. The court did not have to consider the issue that now falls for determination. However, it is worth noting that Baroness Hale spoke in approving terms, in para 47, of the sensible advice given by the General Medical Council in their guidance on Treatment and care towards the end of life: Good practice in decision making (see below) and said that nothing in her judgment was inconsistent with it. In re Briggs (Incapacitated Person) [2018] Fam 63 concerned a man in a minimally conscious state. His wife brought proceedings under section 21A of the MCA 2005 (as inserted by paragraph 9 of Schedule 2 to the Mental Health Act 2007) seeking a determination that it was not in her husbands best interests to continue to be given the CANH that he needed to survive. By virtue of having applied under section 21A, the wife was entitled to non means tested legal aid. It was contended, against her, that the issue of her husbands treatment could not be raised under section 21A (which deals with the courts powers in relation to the authorisation of deprivation of liberty) and that the application should have been brought under other provisions of the Act, which would have resulted in only means tested funding being available. The question for the court was therefore whether section 21A was broad enough to cover the treatment application. The Court of Appeal held that it did not provide a route for determining questions in relation to medical treatment where, as in that case, the deprivation of liberty itself was not the real or essential issue before the court. An application for a welfare order under section 16 of the Act should have been made. In the course of the judgment, King LJ (with whom both other members of the court agreed, Sir Brian Leveson P adding a few words of his own) made some observations about the issue that now concerns this court. Although obiter, they are still valuable, not least for their insight into what happens in practice. At the time, Practice Direction 9E remained in force, and King LJ observed, at para 24, that at first glance there seemed to be a tension between the practice direction, which appeared to say that all cases of withholding or withdrawing treatment in relation to a minimally conscious person should be brought before the court, and the Code which said that matters should be brought before the court where there was a doubt as to the persons best interests. Because the Code was a statutory code to which the MCA 2005 made it mandatory to have regard, she said that the Code must take precedence and then continued: 26. In reality virtually all of these traumatic decisions are made by agreement between the families and the treating teams of the person involved. To suggest that every case should go before a judge (even where all concerned are in accord as to what was in the best interests of the patient) would not only be an unnecessary pressure on the overstretched resources of the NHS trusts and add to the burden on the courts but, most importantly, would greatly add to the strain on the families having to face these unimaginably distressing decisions. In my judgment, the practice direction provides valuable procedural guidance but should not be interpreted as introducing a requirement that all cases where a decision is to be made about the withdrawal of CANH must come before a court. Having rejected the argument that medical treatment decisions could be taken, in a case such as that which the court was considering, under section 21A of the MCA 2005, King LJ set out in para 108 what, in her view, was the proper approach to a medical treatment case. In so far as relevant to the present appeal, she said: (i) If the medical treatment proposed is not in dispute, then, regardless of whether it involves the withdrawal of treatment from a person who is minimally conscious or in a persistent vegetative state, it is a decision as to what treatment is in Ps best interests and can be taken by the treating doctors who then have immunity pursuant to section 5 of the MCA. (ii) If there is a dispute in relation to medical treatment of an incapacitated person, and, specifically, where there is a doubt as to whether CANH should be withdrawn, then the matter should be referred to the court for a personal welfare determination under sections 15 to 17 of the MCA. In similar vein, Sir Brian Leveson P said, at para 114, that [i]f agreement between the authorities and the family is possible, litigation will not be necessary. Finally, in terms of the post MCA 2005 domestic case law, I would refer to two decisions of the Court of Protection. It is important to do so, because judges of the Family Division, who sit also in the Court of Protection, deal regularly with the very difficult welfare decisions which have to be taken as people approach the end of their lives, and this experience gives weight to their views. In In re M (Adult Patient) (Minimally Conscious State: Withdrawal of Treatment) [2011] EWHC 2443 (Fam); [2012] 1 WLR 1653, a case concerning a woman in a minimally conscious state, Baker J expressed the view (paras 78, 82 and 257) that all decisions about the proposed withholding or withdrawal of ANH from a person in a persistent vegetative state or minimally conscious state should always be brought to the court. By this, it can be seen from para 257 that he meant that such decisions must be referred to court. He considered that the legal position has been clear since the decision in the Bland case and, in so far as there was any difference between the Code (which might have suggested that applications to court were not necessary unless the doctors assessment of the patients best interests was disputed) and the position set out in Practice Direction 9E, it was the Practice Direction which reflected the law. Our attention was invited to a fairly recent paper entitled A matter of life and death (2017) 43 J Med Ethics 427 written by Baker J from which it appears that, at least up to that point, he continued to be of the view that he expressed in In re M. He acknowledged that the time may come when applications to court were only necessary where there was a dispute, but did not believe that time had yet been reached. In his view, at p 434, medical science and the law were still evolving and until such time as there was greater clarity and understanding about the disorders of consciousness, and about the legal and ethical principles to be applied, there remains a need for independent oversight, and applications to the court should continue to be obligatory in all cases where withdrawal of ANH is proposed. He did, however, identify an urgent need for a more streamlined procedure for court resolution, avoiding undue cost and delay. In In re M (Incapacitated Person: Withdrawal of Treatment) [2017] EWCOP 18; [2018] 1 WLR 465, the court was concerned with the withdrawal of CANH from a woman who was suffering from Huntingtons disease and was in a minimally conscious state. Her family, her clinicians, and a specialist from whom a second opinion had been sought, were agreed that it was in her best interests not to continue with treatment, notwithstanding that that would result in her death, and a declaration was made to that effect. Peter Jackson J responded to a request from the parties for clarification as to whether legal proceedings were, in fact, necessary prior to withholding or withdrawing CANH when an incapacitated persons family and clinicians agreed that CANH was no longer in the persons best interests. At the time he decided the case, Practice Direction 9E (which had been influential in Baker Js decision) was still effective, but his view differed from Baker Js. Notwithstanding the provisions of the Practice Direction, he held (paras 37 and 38) that, on the facts with which he was dealing, the decision about what was in Ms best interests could lawfully have been taken by her treating doctors, having fully consulted her family and having acted in accordance with the MCA 2005 and with recognised medical standards, without reference to the court. He pointed out that there was no statutory obligation to bring the case to court and gave his view that none of the cases and materials cited in his judgment sustained the proposition that a court decision was necessary as a matter of law rather than of practice. He did not consider that article 2 of the ECHR mandated court oversight, taking the view that the approach taken in Ms case fully respected her article 2 rights in a fashion contemplated in Lambert v France (2016) 62 EHRR 2. He drew attention to the fact that, overwhelmingly, treatment decisions up to and including the withholding of life support are taken by clinicians and families working together in accordance with good practice, with no suggestion of mandatory court involvement, and expressed the view that it was anomalous to require it for a limited subset of cases (those involving PVS or MCS) which were not sufficiently different to justify different treatment. Identifying another anomaly, he also observed that there was no suggestion that the court should be involved where there was a valid and applicable advance decision, yet the grave consequences of the decision and the risk of error were no different in such cases from cases where there was no advance decision. He also referred to the deterrent effect of costly and time consuming proceedings, both on the individual case and on the patient population in general. He considered that a mandatory litigation requirement may deflect clinicians and families from making true best interests decisions and in some cases lead to inappropriate treatment continuing by default. He gave Ms case as an example, in that she continued to receive CANH that neither her doctors nor her family thought in her best interests for almost a year until a court decision was eventually sought. He made quite clear, however, that the court is always available where there is disagreement, or where it is felt for some other reason that an application should be made, although this would only arise in rare cases. Strasbourg jurisprudence Since Mr Gordon relies upon the ECHR as one foundation for his argument that there is a requirement to apply to court for a declaration in every case, it is important to look at the case law of the ECtHR on the subject. I have already referred to the case of Burke in 2006. The case of Lambert v France (2016) 62 EHRR 2 is also very much in point, although it received only a passing mention in the appellants written case. If there were any doubt as to its significance, in Gard v United Kingdom (2017) 65 EHRR SE9, the ECtHR described it as its landmark Grand Chamber case Lambert (para 79). Lambert concerned a man, VL, who had sustained serious head injuries, rendering him tetraplegic and completely dependent. He had irreversible brain damage and was receiving artificial nutrition and hydration. Through the collective procedure established in France by the Public Health Code as amended by the Act of 22 April 2005 on patients rights and end of life issues (the Public Health Code), a decision was taken by Dr K to withdraw nutrition and hydration. VLs wife, and ultimately also his parents, a half brother and a sister, were involved in the decision making process. His parents, half brother and sister opposed the withdrawal of nutrition and hydration, and there was considerable litigation in France. This culminated in the Conseil dtat. Furnished with an expert medical report which concluded that VL was in a vegetative state, and after considering observations on the Public Health Code from a number of amici curiae, the Conseil held that Dr Ks decision was not unlawful. The parents, half brother and sister made an application to the ECtHR, arguing that there was a violation of (inter alia) articles 2 and 8 of the ECHR. By a majority, the court found that there was no violation of article 2, and that there was no need for a separate ruling on article 8. In its judgment, it referred back to its previous decisions in Glass (2003) 37 EHRR CD66 and Burke v United Kingdom (Application No 19807/0) (supra), observing at para 143 that: in addressing the question of the administering or withdrawal of medical treatment [in those cases], it took into account the following factors: the existence in domestic law and practice of a regulatory framework compatible with the requirements of article 2; whether account had been taken of the applicants previously expressed wishes and those of the persons close to him, as well as the opinions of other medical personnel; and the possibility to approach the courts in the event of doubts as to the best decision to take in the patients interests. These factors were relevant to its decision about VL (and were set out again subsequently in para 80 of Gard), as well as the criteria laid down in the Council of Europes Guide on the decision making process regarding medical treatment in end of life situations. The Guide had been drawn up in the course of work on patients rights and with the intention of facilitating the implementation of the Oviedo Convention on Human Rights and Biomedicine (see para 59 of Lambert), which has been ratified by 29 of the Council of Europe member states, but not the United Kingdom. The ECtHR observed (para 165) that the comparative law materials available to it showed that, in those countries which authorise the withdrawal of treatment, and where the patient has not given any advance directive, there is a great variety of arrangements governing the taking of the final decision to withdraw treatment. The most common situation was that the final decision was taken by the doctor treating the patient, but it could be taken jointly by the doctor and the family, by the family or legal representative, or (as it is put in para 75) even the courts. The ECtHR determined that the French legal provisions, as interpreted by the Conseil dtat, constituted a legal framework which was sufficiently clear to regulate with precision the decisions taken by doctors in situations such as VLs, and which ensured protection of patients lives. It is worth looking in a little detail at what was required by French law at the relevant time. By the Public Health Code (including the Code of Medical Ethics which is part of it), the decision to limit or withdraw treatment of a person who is unable to express his or her wishes is taken by the doctor in charge of the patient, after the implementation of a collective procedure. The circumstances in which such a decision can be taken are set out in article R.4127 37 para I of the Public Health Code. I have included the provision in both French and English in order that the reference to unreasonable obstinacy in the English translation might be better understood; the ECtHR explains it in para 53 as continuing treatment to unreasonable lengths. En toutes circonstances, le mdecin doit sefforcer de soulager les souffrances du malade par des moyens appropris son tat et lassister moralement. Il doit sabstenir de toute obstination draisonnable dans les investigations ou la thrapeutique et peut renoncer entreprendre ou poursuivre des traitements qui apparaissent inutiles, disproportionns ou qui nont dautre objet ou effet que le maintien artificiel de la vie. The doctor shall at all times endeavour to alleviate suffering by the means most appropriate to the patients condition, and provide moral support. He or she shall refrain from any unreasonable obstinacy in carrying out examinations or treatment and may decide to withhold or discontinue treatment which appears futile or disproportionate or the only purpose or effect of which is to sustain life artificially. Before taking the decision, the doctor is required to consult with the care team where there is one, and there has to be a reasoned opinion of at least one doctor acting as an independent consultant. The decision has to take into account any wishes previously expressed by the patient, in particular in the form of advance directives, the views of any person of trust that the patient may have designated and of the family or, failing this, of another person close to the patient. Reasons have to be given for any decision to limit or withdraw treatment, and the position has to be documented in the patients file. Whilst the matter had, in VLs case, been litigated in the courts, demonstrating that recourse could be had to court if necessary, court approval was not required by the French provisions. Although the applicants did not advance any argument that this rendered the system unsatisfactory for the purposes of article 2, they did complain about the decision making process on other grounds, considering that the decision should have been a genuinely collective one or, at the very least, provision should have been made for mediation in the event of disagreement. This complaint led the court to consider what obligations there were concerning the decision making process. Rejecting the complaint, it said (para 168) that the organisation of the decision making process, including the designation of the person who takes the final decision to withdraw treatment and the detailed arrangements for the taking of the decision, fall within the states margin of appreciation. The French process (as amended, although not substantially, in 2016) once more withstood scrutiny by the ECtHR in January 2018 in Afiri and Biddarri v France (Application No 1828/18) 23 January 2018. The court again re iterated the elements set out in para 143 of Lambert (supra) and repeated the observations it had there made (para 168) about the organisation of the decision making process. Other guidance Various medical bodies in the UK have produced codes relating to the withdrawal of life sustaining treatment. In chronological order, they are: i) The BMAs Withholding and Withdrawing Life Prolonging Medical Treatment: Guidance for decision making (first published in 1999, 3rd ed 2007) ii) The GMCs Treatment and care towards the end of life: good practice in decision making (published May 2010) iii) The report of the Royal College of Physicians (the RCP) entitled Prolonged disorders of consciousness: National clinical guidelines (the report of a working party in 2013) iv) An Interim Guidance document produced in December 2017 by the GMC, BMA and RCP entitled Decisions to withdraw clinically assisted nutrition and hydration (CANH) from patients in permanent vegetative state (PVS) or minimally conscious state (MCS) following sudden onset profound brain injury. The last document referred to in the previous paragraph was published after the decisions at first instance in the present case, the Court of Appeals decision in Briggs, and Peter Jackson Js decision in In re M. It was not meant to override the existing guidance from each of the three bodies, but to supplement it, responding to the statements in those cases that there is no requirement for treating clinicians to seek court approval to withdrawing CANH, and to the withdrawal of Practice Direction 9E. It summarises the recent developments in the law, and also the views of the GMC, BMA, and RCP about good clinical and professional practice in the area. It is intended that before long it will be replaced with a new final guidance, which (the introduction to the Interim Guidance says) will recommend safeguards to ensure that a robust and thorough assessment process continues to be followed prior to the withdrawal of CANH. It is necessary to look in more detail at this body of professional guidance since it has a very important part to play in ensuring the proper protection of patients and in maintaining the confidence of the public in the health care system. Whatever impression might be conveyed by terms such as guidance and guidelines, the practice set out in the various documents has significant weight. This is perhaps particularly so in relation to guidance emanating from the GMC, which has a special role in providing guidance for the medical profession. It was established by statute, the Medical Act 1983, with the over arching objective of protecting the public, and is charged with setting and maintaining the standards that doctors across the UK must follow, where necessary taking action in relation to a doctor if he or she is found to be falling below the required standard. Its statutory powers under the Medical Act include power to issue advice for members of the medical profession on standards of professional conduct, standards of professional performance and medical ethics (section 35). The GMCs 2010 guide to good practice draws upon the domestic and European jurisprudence and covers the matters that one would therefore expect. I will not rehearse all those matters here, particularly given that guidance is continuing to evolve, and will simply give a broad indication of the nature and ambit of the document. It provides the doctor with a decision making model, applicable where an adult lacks the capacity to decide about treatment and care. As part of the decision making process, the doctor is to: find out about any valid advance decision made by the patient or consider what treatments are clinically appropriate and likely to i) make an assessment of the patients condition, ii) benefit the patient, iii) anyone who has legal authority to decide for him, iv) as far as practical and appropriate, consult members of the healthcare team and those close to the patient and, when deciding about treatment, take their views into account, v) take steps towards the appointment of an IMCA where appropriate, vi) attempt to resolve disagreements about what treatment and care would be of overall benefit to the patient, seeking legal advice on applying to court for an independent ruling if agreement is not reached. The guide requires a record to be made of decisions about treatment, and of who was consulted in relation to the decisions. There is a section specifically addressing CANH, particularly stressing the need to listen to and consider the views of the patient and those close to them, and to explain the issues to be considered. The doctor is alerted to the need, in the event of disagreement about CANH, to ensure that the patient or someone acting on their behalf is advised on how to access their own legal advice or representation. Where the patient is not expected to die in any event in hours or days, but the doctor judges that CANH would not be of overall benefit to him, all reasonable steps must be taken to get a second opinion from a senior clinician who is not already directly involved but who should examine the patient. If that is not practically possible in exceptional circumstances, advice from a colleague must still be sought. As to patients in PVS or a condition closely resembling it, the guide says that the courts require that you approach them for a ruling. This is, however, modified in the Interim Guidance of December 2017 which proceeds upon the basis that there will be cases in which no court application is required. The December 2017 Interim Guidance starts by identifying that a best interests decision cannot be taken for the patient where he has made a valid and applicable advance decision to refuse treatment which covers CANH, or where an attorney appointed under a suitable lasting power of attorney makes the decision. It then goes on to say that where there is disagreement about best interests or the decision is finely balanced, an application should be made to court for a declaration as to whether CANH continues to be in the patients best interests. Then, dealing with the remainder of cases, the guidance sets out the steps that should be taken to ensure that there is proper consultation prior to determining what is in the patients best interests. These include ensuring that the RCP guidelines have been followed regarding assessment, with the assessment carried out by professionals with the appropriate training, that guidance in the Mental Capacity Act Code, and from the BMA, RCP and/or GMC has been followed, that there have been formal, documented best interests meetings with those who care for the patient and are interested in his or her welfare, and that an IMCA is consulted where necessary. The doctor is told to find out as much as possible about the patients values, wishes, feelings and beliefs. A second clinical opinion should be sought from a consultant with experience of PDOC who has not been involved in the patients care and who should, so far as reasonably practical, be external to the NHS Trust/Clinical Commissioning Group (CCG); the consultant should examine the patient and review the medical records and the information that has been collected. There should be very detailed records kept, both a clinical record (covering many specified matters) and a record of discussions, meetings and so on. The RCP document is lengthy, covering the diagnosis and management of patients with PDOC. There is a section devoted to assessment, diagnosis, and monitoring, in which the doctor is alerted to the challenges in making an accurate diagnosis and the need for evaluation by a multi disciplinary team of expert clinicians, with the family and close friends of the patient having a key role, and is told that the diagnostic assessment process should follow a structured approach, elements of which are described in some detail. Another section of the document covers ethical and medico legal issues, also in detail. The BMA guidance is similarly substantial, its aim being to provide a coherent and comprehensive set of principles which apply to all decisions to withhold or withdraw life prolonging treatment (Introduction p xiii). It should be noted that the Faculty of Intensive Care Medicine (FICM) and the Intensive Care Society (ICS) have also issued joint recommendations in the form of Guidelines for the provision of intensive care services; these include recommendations about end of life care. The submissions on behalf of the Official Solicitor Considerations of human dignity and the sanctity of human life are, quite rightly, central to the Official Solicitors case. His submission is that only by requiring judicial scrutiny in every case concerning the withdrawal of CANH from a patient suffering from PDOC can human life and dignity be properly safeguarded. An important part of the protection is, he submits, the oversight of an independent and neutral person such as the Official Solicitor, who can investigate, expose potential disputes, and give the patient a voice in the decision making, and it is court proceedings that enable the Official Solicitor to be involved. Medical guidance on its own is, in his submission, insufficient protection, and so, until other protective mechanisms are devised, the common law and/or the ECHR dictate that an application to court must be made. I do not understand the Official Solicitor to go so far as to submit that In re F (Mental Patient: Sterilisation) and Blands case specifically impose a common law requirement for a court application in every case. His argument is less direct. In his written case, Mr Gordon says that it is abundantly clear from those cases that the House of Lords implicitly accepted the link between the need for common law protection of patients rights and necessary mechanisms (not yet sufficiently advanced) to give full protection of those rights. That, in his submission, is what led them to say that for the time being a declaration should be sought, it being the only suitably protective mechanism so far available. Since, in the Official Solicitors view, the necessary mechanisms have still not been developed, there remains no satisfactory alternative protection for patients. In those circumstances, it is artificial, he submits, to distinguish between a statement of good practice, and what is required by common law, as they are in fact one and the same, necessitating court involvement in every case. The passing of the MCA 2005 has not changed matters, it is submitted, and the common law is not undermined by the absence of an express statutory provision in it requiring court involvement. Indeed it is asserted that, on the contrary, [i]t was clear that Parliament intended that judicial scrutiny of any decision to withdraw CANH should continue for the foreseeable future. In terms of recent support for his position, Mr Gordon seeks to rely upon something that Baroness Hale said in In re N v (An Adult) (Court of Protection: Jurisdiction) [2017] AC 549, para 38. Whereas I intend to address the bulk of the Official Solicitors submissions later, this one can be dealt with straight away. I did not include In re N v (An Adult) (Court of Protection: Jurisdiction) in my rsum of the authorities as it is not on the point which requires determination here. The issue related to the powers of the Court of Protection where a public body, the local commissioning group, refused to provide or fund a care package for an incapacitated adult which his parents thought would be in his best interests. At para 38, introducing her discussion of that very different issue, Baroness Hale said: Section 5 of the 2005 Act gives a general authority, to act in relation to the care or treatment of P, to those caring for him who reasonably believe both that P lacks capacity in relation to the matter and that it will be in Ps best interests for the act to be done. This will usually suffice, unless the decision is so serious that the court itself has said it must be taken to court (My italics) It seems to me over ambitious to seek to rely upon the italicised sentence, taken out of context, as support for the existence of the common law requirement for which Mr Gordon contends. Turning to the ECHR, the Official Solicitor seeks to invoke article 2 (right to life), article 6 (right to a fair trial), article 8 (right to respect for private and family life) and article 14 (prohibition of discrimination) as further support for the assertion that court involvement is a necessary component in securing the patients rights. The jurisprudence of the ECtHR makes clear, he says, that if there is doubt as to the medical position or the patients best interests, there must be a real remedy and, in cases such as the present, only a court application will reveal whether there is doubt. Here, without the Official Solicitors full participation in the present proceedings, it was impossible to know whether or not there was any dispute about the medical evidence or about Mr Ys best interests, and as a result Mr Ys article 6 rights were eroded to the point that his article 2 rights were afforded no effective protection. An argument is also advanced in reliance upon article 14, which it is said will be breached because a patient in Mr Ys position unjustifiably has less protection than an adult who has capacity and is terminally ill, the latter having the protection in relation to assisted dying afforded by section 2 of the Suicide Act 1961 (which makes it an offence to do an act capable of encouraging or assisting a suicide). It is important to note some of the special features of PDOC cases which in the Official Solicitors submission necessitate court involvement. He stresses the particular vulnerability of patients with PDOC, the difficulty in assessing the level of a persons consciousness, and the dangers of a wrong diagnosis or a wrong conclusion about what is in the persons best interests. He invites attention to examples of diagnostic errors in the decided cases where, for example, a patient has been thought to be in a permanent vegetative state but found later to be in a minimally conscious state. He submits that, although decisions about withdrawing treatment have to be made in relation both to patients with PDOC, and patients in intensive care with life limiting illnesses or injuries, the two categories of patient are different. The patient with PDOC may be clinically stable and may live for a prolonged period with only appropriate nursing care, hydration and nutrition, whereas the patient in intensive care may require more active medical intervention and support and may face death within hours or days. Furthermore, it is suggested that there is a particular concern about the morality of withdrawing CANH, which many might see as basic care, as opposed to certain other types of treatment. Lord Brandons reasoning at p 56 of In re F (Mental Patient: Sterilisation) (supra) (where he identified a number of special features which made the involvement of the court highly desirable) applies equally to PDOC cases, it is submitted. Similarly in point is Lord Lowrys concern, expressed in the Bland case (supra), that without court oversight, the doctor will be judge in his own cause. In addition, there is a danger, it is said, that the doctor may persuade family members who might not have the resources (emotional or financial) to question the doctors decision. Far from the need for independent scrutiny having diminished since the Bland case, Mr Gordon submits that it has increased as the growing understanding of disorders of consciousness has revealed the shortcomings of the assessments that have to be carried out. Discussion Permeating the determination of the issue that arises in this case must be a full recognition of the value of human life, and of the respect in which it must be held. No life is to be relinquished easily. As Baroness Hale said at para 35 of Aintree University Hospitals NHS Foundation Trust v James (supra): The authorities are all agreed that the starting point is a strong presumption that it is in a persons best interests to stay alive. And yet there may come a time when life has to be relinquished because that is in the best interests of the patient. The situation of Mr Y, and the ordeal through which his family has been going, serve as a solemn reminder of how illness may confront any one of us at any time and of the difficulties that face the patient, his family, and the medical staff whose job it is to do the best that they can for them. As Lord Browne Wilkinson said in Blands case (p 877), the questions for us are questions of law, [b]ut behind the questions of law lie moral, ethical, medical and practical issues of fundamental importance to society. The weight of that consideration anchors the legal decisions which I would make. Before turning to the central questions in the case, it is worth restating the basic position with regard to medical treatment, because it is upon this foundation that everything else is built. Although the concentration is upon the withdrawal of CANH, it must be kept in mind that the fundamental question facing a doctor, or a court, considering treatment of a patient who is not able to make his or her own decision is not whether it is lawful to withdraw or withhold treatment, but whether it is lawful to give it. It is lawful to give treatment only if it is in the patients best interests. Accordingly, if the treatment would not be in the patients best interests, then it would be unlawful to give it, and therefore lawful, and not a breach of any duty to the patient, to withhold or withdraw it. For a recent authoritative statement to this effect, see the Aintree case, although I would add that if a doctor carries out treatment in the reasonable belief that it will be in the patients best interests, he or she will be entitled to the protection from liability conferred by section 5 of the MCA 2005 (see para 36 above). It is also important to keep in mind that a patient cannot require a doctor to give any particular form of treatment, and nor can a court (see, for example, R (Burke) v General Medical Council at paras 50 and 55, and the Aintree case at para 18). I turn then to the core issue, commencing with a consideration of what, if any, requirements are imposed by domestic law. This consideration must start with the Bland case. In my view, there can be no question of the House of Lords there having imposed a legal requirement that in all cases of PVS (or any other form of prolonged disorder of consciousness) an application must be made to the court before CANH can be withdrawn. The scene had been set in In re F (Mental Patient: Sterilisation), where consideration was given to whether it was necessary to seek a declaration before carrying out a sterilisation operation on a woman who could not consent to the procedure herself. This was the case in which Lord Brandon set out the six features which made it highly desirable to seek the involvement of the court as a matter of good practice, five of which features the Official Solicitor relies upon in his present argument. That none of their Lordships in In re F considered that they were laying down a common law requirement to apply to the court is put beyond doubt by the speech of Lord Griffiths. It will be recalled that he would have been inclined to make it a legal requirement to seek the sanction of the court in all cases, and thought that the common law could be adapted to do so, but was deterred because the other members of the House considered that this would be making new law and inappropriate. In re F was very much in the minds of their Lordships in the Bland case, as can be seen from their speeches, and the approach they took to the question of court involvement was similar to that taken in In re F. There was no suggestion that the common law was now being developed in the sort of way that Lord Griffiths had eschewed in In re F. It was made quite clear that it was as a matter of practice that guidance should be sought from the court by way of declaratory relief, the practice of applying being desirable. It was contemplated that the President of the Family Division would keep matters under review and it was hoped that he would, in time, be able to limit applications for declarations to cases where there was a special need; this would have been difficult had the House of Lords created a legal requirement of a declaration in every case. The position was underlined in R (Burke) v General Medical Council (supra) where the Court of Appeal expressly rejected the argument that there was a legal duty to seek a declaration from the court before withdrawing artificial nutrition and hydration from a patient in PVS, affirming that the House of Lords in Blands case had recommended as a matter of good practice that reference be made to the court. Mr Gordon submits that the Court of Appeal was not there addressing the same issue as this court must now address, namely the protection of the vulnerable class of patients with PDOC, and that it had only been addressed on the situation of PVS patients in passing. I do not consider that Burkes case can be removed from the picture in this way. It seems to me to be an accurate statement of the legal position and of relevance to the issue before us. Accordingly, when the Mental Capacity Act 2005 came into force in 2007, there was no universal requirement, at common law, to apply for a declaration prior to withdrawing CANH. Mr Sachdeva, for the respondents, argues that it would be inconsistent with the statutory regime established by Parliament in the MCA 2005 to have such a requirement. The Act makes provision for decisions to be taken on behalf of those who lack capacity, based upon what is in their best interests, without involving a court. By section 5, subject of course to the impact of any relevant lasting power of attorney or advance decision to refuse treatment, a clinician who treats a patient in accordance with what he reasonably believes to be the patients best interests does not incur any liability, in relation to the treatment, that he would not have incurred if the patient had had capacity to consent and had consented to it. Provision is made for the court to make decisions about personal welfare where necessary, but the Act does not single out any sub class of decisions which must always be placed before the court, and there is no requirement for the Official Solicitor to be involved in best interest decisions relating to serious medical treatment. There is an attraction to Mr Sachdevas argument that the MCA 2005 is a complete statutory code but, had there been a common law requirement of court involvement by the time it was passed, I think I might nonetheless have been prepared to accept that it could have survived the silence of the Act on the subject. However, as there was no pre existing common law requirement, the point does not arise for decision. The absence of any requirement in the statute of the type for which the Official Solicitor contends is nevertheless of interest, given the recommendations of the Law Commission Report No 231 which brought it to attention as one of the possible options, and given that the Act is based upon that report. In contrast to the statute itself, the Mental Capacity Act 2005 Code of Practice does speak of applications to court in cases such as the present, but is contradictory in what it says about them. Paras 5.33 and 5.36 speak in terms of an application being made if there is any doubt or dispute about the doctors assessment of the patients best interests. Although para 6.18 suggests that the court has to make/must be asked to make the decision about withholding or withdrawing artificial nutrition and hydration from a patient in PVS, that statement seems to have been derived from the case law, which dealt only in terms of good practice, not of legal obligation. And paras 8.18 and 8.19, to which para 6.18 invites reference, say that an application should be made to the court and that as a matter of practice such cases should be put to the Court of Protection for approval, referring to a case law requirement to seek a declaration, the source of which is given as the Bland case. A Code in these rather ambiguous terms, plainly attempting to convey what the cases have so far decided, cannot extend the duty of the medical team beyond what the cases do in fact decide is incumbent upon them. Whatever the weight given to the Code by section 42 of the MCA 2005, it does not create an obligation as a matter of law to apply to court in every case. Practice Direction 9E which accompanied the Court of Protection Rules 2007 said that decisions about the proposed withholding or withdrawal of artificial nutrition and hydration from a person in a persistent vegetative state or a minimally conscious state should be brought to court. It is understandable that the ad hoc Rules Committee decided that, in so far as the practice direction purported to direct which cases had to be brought to court, it went beyond its proper scope; a practice direction cannot establish a legal obligation when none exists already, see U v Liverpool City Council (Practice Note) [2005] 1 WLR 2657, para 48. In any event, as no equivalent practice direction accompanies the Court of Protection Rules 2017, it is not necessary to delve into the matter further. No requirement to apply to court can be found in the post MCA 2005 case law either. The decision of Baker J in In re M (Adult Patient) (Minimally Conscious State: Withdrawal of Treatment) does not assist because it proceeded upon the basis that the Bland case had established that all decisions about the proposed withholding or withdrawal of CANH had as a matter of law to be brought to court and I would not interpret the Bland case in this way. The view of King LJ, expressed obiter in the Court of Appeal in In re Briggs [2018], that treating doctors can take a decision without recourse to court where there is no dispute about it should, however, be accorded weight. This is so even allowing for the possibility raised by Mr Gordon that the court may not have had full argument on the subject and may not have been referred to all the relevant passages in the Code, as King LJ spoke only of one of the less prescriptive provisions. It is important to note the views of those who, like her, have long experience in the Family Division where life and death issues are regularly litigated. Peter Jackson Js judgment in In re M (Incapacitated Person: Withdrawal of Treatment) (given after the Court of Appeals decision in the Briggs case) is also of assistance, particularly for the judges analysis of why, in his view, the decision as to what was in Ms best interests could have been taken without reference to the court. Mr Gordon points out that the Official Solicitor was not formally involved in that case and that there was no oral argument on the topic. However, as Peter Jackson J set out in para 30, he did invite and receive a substantial skeleton argument prepared by leading and junior counsel on behalf of the Official Solicitor which, he said, (among other things) trenchantly asserts that an application to court should be made in every case of proposed withdrawal of CANH, unless there is a valid advance directive. There is no doubt, therefore, that Peter Jackson J will have been made aware of the arguments that ran counter to the view he ultimately formed. Mr Gordon advances four respects in which he says the judge went wrong, namely: (1) he failed to recognise that PDOC patients are distinct from other patients, (2) he mistakenly attributed the delay to the proceedings when the majority of it appears to have been caused by other factors, (3) he failed to see that matters are very different when an advance decision has been made pursuant to section 24 of MCA 2005, and (4) he failed to recognise that if there is no requirement for court involvement, the article 2 requirement identified in Lambert v France for regulations compelling hospitals to adopt appropriate measures for the protection of patients lives will not be satisfied. For the most part, these are issues which arise as part of the Official Solicitors argument before this court and the reasons why I do not find them compelling will therefore appear in due course. There being, therefore, in my view, no requirement in domestic law for an application to court of the type that the Official Solicitor says is imperative for the protection of patients, the next question is whether the ECHR generates a need for an equivalent provision to be introduced. To my mind, the answer is a clear no. The first port of call is the landmark Grand Chamber case of Lambert v France on the French collective procedure which, it will be recalled, provided for the doctor to take the decision, with no application to court required, yet satisfied the ECtHR as being sufficiently protective of the articles 2 and 8 rights there engaged. I set out in a little detail earlier (para 71) what the French procedure required and it bears a significant resemblance to the procedure set out in the medical guidance in this country. In each case, the context for the decision is similar in that the French article R.4127 37 para I says that the doctor can decide to withhold or discontinue treatments qui apparaissent inutiles, disproportionns ou qui nont dautre objet ou effet que le maintien artificiel de la vie, and para 5.31 of the Mental Capacity Act Code speaks of cases where treatment is futile, overly burdensome to the patient or where there is no prospect of recovery. The French code requires the doctor to consult with the care team, and to take into account any wishes expressed by the patient and the views of people close to him, and the same is required by the MCA 2005 and the medical guidance here. An independent consultants opinion is required in France and should also be sought in this country. The court is available if necessary in France as it is here. As I have said, Lambert v France was not a central feature of the Official Solicitors written case, but as he developed his argument in oral submissions, Mr Gordon sought to distinguish the decision on the basis that France has a formally prescribed procedure with guarantees and we do not. To comply with the ECHR, a system must have a prescribed procedure, he says, and the sort of professional guidance that we have in this country will not suffice. The ECtHR has repeatedly set out certain factors that it considers relevant to the question of administering or withdrawing medical treatment. They can be found in para 143 of Lambert v France (see para 69 above), and also in Glass v United Kingdom, Burke v United Kingdom, Gard v United Kingdom, and Afiri and Biddarri v France. The first of those factors is the existence in domestic law and practice of a regulatory framework compatible with the requirements of article 2, which no doubt is (quite properly) the foundation of Mr Gordons submission that a prescribed procedure is required. Where I differ from Mr Gordon is in his assertion that the system in this country is not what the ECtHR was looking for. True it is that in France there is a comprehensive legislative framework, set out in the Code de la sant publique, whereas the same cannot be said for our domestic law. However, we too have provisions designed to protect the human rights of patients and their families, and I have no difficulty in viewing the combined effect of the MCA 2005, the Mental Capacity Act Code, and the professional guidance, particularly that emanating from the GMC, as a regulatory framework. The basic protective structure is established by the MCA 2005, which I have described above. An advance decision about life sustaining treatment can be taken in accordance with sections 24 to 26 and will be respected. Similarly, a proper role is established for lasting powers of attorney by section 9 and the other sections associated with it. Where the decision is taken by a doctor, section 5 establishes the conditions that must be satisfied if the doctor is to be protected from liability. It directs the focus firmly to the best interests of the patient, and that imports the provisions of section 4 which include taking into account the perspective that the patient would have on the decision if he had capacity and the views of those with an interest in the patients welfare. Section 4(5) imposes the safeguard that the person making the decision must not be motivated by a desire to bring about his death. Section 37 makes provision for an IMCA to represent the patient where appropriate, and sections 15 to 17 ensure that application can be made to court for a decision about the patients welfare where necessary. Notwithstanding the contradictions in it with which I have already dealt, the Code contains valuable guidance, and regard must be had to it by virtue of section 42. The passages that I referred to earlier are only a small fraction of the Code but it will be noted from them that, for example, it commends multi disciplinary meetings when making healthcare and treatment decisions, and speaks about recording decisions and the reasons for them. It also expressly provides (see para 5.31, quoted above) that when making decisions regarding life sustaining treatment, healthcare and social care staff should refer to relevant professional guidance. Given the statutory framework within which the GMC operates, I would single out its guidance to the medical profession as undeniably part of the established regulatory framework. As I have set out above, it has provided its own individual guidance in 2010, and has joined with the BMA and RCP to provide supplementary Interim Guidance in 2017, with final guidance planned for 2018. The second of the factors to which consistent reference has been made by the ECtHR is whether account has been taken of the patients previously expressed wishes and those of people close to him, as well as the opinions of other medical personnel. The MCA 2005 requires this to happen, and is reinforced by the professional guidance available to doctors. The third factor that features consistently in the ECtHRs evaluation is the possibility of approaching the courts in the event of doubts as to the best decision to take in the patients interest and, of course, that possibility exists in this country. As Peter Jackson J said in In re M (Incapacitated Person: Withdrawal of Treatment) at para 38, those considering withdrawal of CANH should not hesitate to approach the Court of Protection in any case in which it seems to them to be right to do so. The opportunity to involve the court is available whether or not a dispute is apparent, and is of particular benefit where the decision is a finely balanced one. No one would discourage an application in any case where it is felt that the assistance of the court would be valuable. And if a dispute has arisen and cannot be resolved, it must inevitably be put before the court. Mr Gordon characterises Lambert as a case about the facts, which tells us nothing about first principles. He submits, also, that the article 6 argument that he advances was not put to the court in this or any of the other ECtHR cases. This is not how I see the case of Lambert or the ECtHR jurisprudence generally. The Lambert decision forms part of a consistent line of Strasbourg decisions and it tells us, in my view, that the ECtHR does not regard it as problematic, in principle, that a decision to withhold or withdraw CANH from patient with a prolonged disorder of consciousness should be made by a doctor, without obligatory court involvement. If there be any doubt about the implications of this for the present case, reference to Burke v The United Kingdom removes it. The ECtHR was there required to consider our domestic provisions, even before they were bolstered by the MCA 2005, specifically focusing on the GMC guidance then in force. Breaches of articles 2, 3, 8 and 14 were alleged, and it was one of the applicants complaints that the GMC guidance failed to spell out a legal requirement to obtain prior judicial sanction. The ECtHR proceeded upon the basis that article 2 imposes positive obligations on the State to make regulations compelling hospitals to adopt appropriate measures for the protection of their patients lives, yet no suggestion was made that such regulations were lacking in the United Kingdom. The argument that there was insufficient protection because a doctor might decide to withdraw CANH without being under an obligation to obtain the approval of the court was expressly rejected, and I have already cited (see para 33 above) what the ECtHR said in so doing. Recognising the practical realities, it observed that a more stringent legal duty would be prescriptively burdensome, resulting in some medical staff being constantly in court, and would not necessarily entail any greater protection. As for the Official Solicitors article 6 argument, even if that particular argument was not put before the ECtHR in terms, the question of hearing rights was an obvious component in the arguments that were advanced in Burkes case, and there is no reason to suppose that the outcome would have been different if there had been a specific article 6 complaint. The same might be said of Lamberts case, where article 6 was indeed referred to, but only by way of a complaint that the doctor who took the decision was not impartial, not as part of a wider argument that court involvement is required in every case. Moreover, I would accept Mr Sachdevas argument that what engages article 6 is a disagreement or a question of law and/or fact in dispute, and that, in the light of the safeguards to be found in the MCA 2005 and the Code, together with the professional guidance, there is no basis for the Official Solicitors suggested approach of engaging article 6 by assuming in every case that there is a dispute. Of the Official Solicitors ECHR arguments, it only remains to deal with article 14. It is not in point, in the present case, in my view. The analogy that Mr Gordon seeks to draw between someone in Mr Ys position and a person with capacity who seeks assistance in bringing his or her life to an end is not a proper analogy. There is, as Mr Sachdeva says, a critical distinction in both the domestic and the Strasbourg jurisprudence, between an act which constitutes the intentional taking of life and therapeutic abstention from treatment. We are presently dealing with the latter, whereas assisted dying concerns the former. It is worth observing also that an article 14 argument was advanced in Burkes case before the ECtHR and was rejected as manifestly ill founded. The argument was to the effect that the applicant was treated less favourably on account of his disease than others who need CANH but are not suffering from a disease that causes them to lose competence to influence their treatment. The court observed that neither a competent nor an incompetent patient can require a doctor to give treatment that the doctor considers is not clinically justified, thus no difference of treatment arises. In so far as a competent patient is able to participate in the consultation process and an incompetent patient is not, the court said that the patients are not in a relatively similar situation. It remains to stand back from this intense focus upon the law, in order to consider the issue in its wider setting. In so doing, it is necessary to exercise the restraint that is required of a court when it ventures into areas of social and ethical uncertainty, and especially when it does so in the abstract, setting out views which will be of general application (as is necessarily so in this case) rather than resolving a clearly defined issue of law or fact that has arisen between the litigants appearing before it. Lord Goff remarked, in the passage at p 871 of the Bland case which I have set out at para 22 above, upon how frequently doctors have to make decisions which may affect the continued survival of their patients, and how experienced they are in this respect. Judges have also developed experience in dealing with life and death decisions, but it is experience of a different sort from that of the medical team which actually treats the patient, and of the professional bodies responsible for regulating and guiding them, and this limitation must be recognised and taken into account. It has been of particular assistance to have, from the written submissions of the intervenors, an insight into the practicalities of caring for patients who are critically ill, and also some idea of the large number of patients who might be affected in some way by the decision in the instant case. It is important to acknowledge that CANH is more readily perceived as basic care than, say, artificial ventilation or the administration of antibiotics, and withholding or withdrawing it can therefore cause some people a greater unease. However, it was decided as far back as the Bland case that CANH is in fact to be seen as medical treatment. It is not easy to explain, therefore, why it should be treated differently from other forms of life sustaining treatment, and yet that is the consequence of the legal position for which the Official Solicitor contends. Furthermore, the Official Solicitors focus is on only one sub set of patients who are, for one reason or another, unable to take their own decisions about their medical care and in respect of whom life sustaining treatment is under consideration. This is a point that Peter Jackson J made in In re M (Incapacitated Person: Withdrawal of Treatment), and it emerges with some force from the written submissions of the BMA and of the ICS and the FICM. It is not only those, such as Mr Y, who suffer an acute episode and are then stabilised, who may require CANH. The need for it can arise also, for example, in the advanced stages of a degenerative neurological condition such as Huntingtons disease or multiple sclerosis, or in the advanced stages of dementia, where there may be a recognised downward trajectory. Presently, the BMA say, in the case of patients who have suffered a severe stroke, or are significantly cognitively impaired but conscious, or are suffering from a degenerative neurological condition or other condition with a recognised downward trajectory, decisions to withhold or withdraw CANH are made on a regular basis without recourse to the courts. The BMA can see no principled or logical reason for requiring court review in relation to patients with PVS and MCS but not for a patient with a different condition. Similarly, it can find no logical reason why one form of medical treatment, CANH, is treated differently from other forms of medical treatment such as artificial ventilation. The submissions of the ICS and FICM are illuminating as to what occurs in units delivering critical care to patients. Most admissions to such units occur as an emergency, without the patient having made any advance decision about treatment, and possibly already so unwell that he or she has impaired consciousness or is unable to communicate wishes. Most decisions relating to medical treatment in the critical care setting, including as to whether life sustaining treatment is withheld or withdrawn, have to be made without the participation of the patient. They are, we are told, almost invariably taken on the basis of (in England & Wales) best interests and (in Scotland) benefit, on the basis of consensual decision making as between the clinical team and the patients family and carers. In that critical care setting, CANH is not considered differently from any other form of life sustaining treatment. This is said to reflect the reality in critically ill patients that it is the withdrawal of invasive or non invasive ventilation, vasoactive medical and renal replacement therapy, and the double effect from administration of medications to ensure patient comfort towards the end of life, that leads to the natural death of the patient, rather than cessation of CANH. It is likely, where CANH is withdrawn from a patient who is clinically stable but suffering from a prolonged disorder of consciousness, that death will result from the withdrawal of CANH, so to this extent there is a difference between the two groups of patients. However, once CANH is seen as medical treatment, there is a parallel between the cases. In any event, I have difficulty in accepting that there are readily apparent and watertight categories of patient, with PDOC patients clearly differentiated from, say, patients with a degenerative neurological condition or critically ill patients, in such a way as to justify judicial involvement being required for the PDOC patients but not for the others. The dilemmas facing the medical team and those close to the patient may well be very similar in each of these cases. It would be a mistake to think, for example, that the intensive care doctor simply does whatever is necessary to stop the patient dying, no matter what the cost to the patient, any more than does the doctor looking after a PDOC patient or the stroke patient or the patient with Huntingtons disease. In all of these cases, the medical team take their decisions as to treatment, whether it is CANH, or some other form of treatment such as artificial ventilation or cardio pulmonary resuscitation or the administration of antibiotics, by determining what is in the patients best interests. In so doing, the doctors will often have difficult diagnoses to make, reaching a prognosis may be challenging, and the evaluation of the patients best interests may not be entirely straightforward. All these tasks may call for considerable professional skill and individual judgement. Furthermore, although the Official Solicitor submits that it should be possible, with proper case management, to obtain a decision from the court speedily, giving an example of a case which was concluded within eight weeks, I fear that that is an over optimistic view of the situation. I note that even in that case, the delay would have been about six weeks longer had it not been for the parties shortening their time estimate (it would seem in part by removing from it the time for the judge to prepare the judgment) and another case coming out of the judges list. Even allowing for Peter Jackson J to have over estimated the precise period of delay in obtaining an order in In re M (Incapacitated Person: Withdrawal of Treatment), the facts of that case exemplify the dangers. The pressure of business in the courts charged with handling such cases is significant and delays are almost inevitable. As King LJ observed in In re Briggs, quite apart from the pressure that court cases place on the overstretched resources of NHS trusts, they add greatly to the strain on families facing acutely distressing decisions. In a case where all the proper procedures have been observed and there is no doubt about what is in the best interests of the patient, there is much to be said for enabling the family and the patient to spend their last days together without the burden and distraction, and possibly expense, of court proceedings. In addition, I do not disagree with Peter Jackson Js observation that there is a risk that the need to go to court might deflect clinicians and families from making true best interests decisions and might lead in some cases to inappropriate treatment continuing by default. Equally, it is not inconceivable that it might, as the BMA suggest, generate a reluctance, in some cases, to start CANH because of the procedures attending its withdrawal. The Official Solicitor submits that the challenges of diagnosis have increased since the Bland case, rather than the way becoming clearer as might have been expected. The difficulties in diagnosis are underlined in the submissions of the intervenors, Care Not Killing, and the report of Professor Sturman which accompanies them, but are also apparent from other material available to us. Medical science, continually developing, cannot always provide answers, and greater knowledge can produce yet more questions. Developments in this area of medicine include the ability to differentiate between vegetative state and minimally conscious state, and improvement in the outcomes for some individual patients. These changes inevitably create new challenges of diagnosis and management, new uncertainties, for the medical profession. The situation is not, however, on a par with that which faced the House of Lords in the Bland case. The survival of patients such as Anthony Bland, then so unprecedented, is now a well established feature of medical practice. The documentation supplied to us shows that the difficulty that there is in assessing the patient and in evaluating his or her best interests is well recognised. The process is the subject of proper professional guidance, covering vitally important matters such as the involvement in the decision making process of a doctor with specialist knowledge of prolonged disorders of consciousness, and the obtaining of a second opinion from a senior independent clinician with no prior involvement in the patients care. The second opinion, as contemplated in the guidance (see paras 79 and 80 above, for example), is, in my view, a crucial part of the scrutiny that is essential for decisions of this sort, and the guidance sets parameters which should ensure that it is an effective check, in that the clinician who provides the second opinion must (so far as reasonably practical in the circumstances of the case) be external to the organisation caring for the patient, and is expected to carry out his or her own examination of the patient, consider and evaluate the medical records, review information about the patients best interests, and make his or her own judgement as to whether the decision to withdraw (or not to start) CANH is in the best interests of the patient. Thus the interests of patients and their families are safeguarded, as far as possible, against errors in diagnosis and evaluation, premature decisions, and local variations in practice. If, at the end of the medical process, it is apparent that the way forward is finely balanced, or there is a difference of medical opinion, or a lack of agreement to a proposed course of action from those with an interest in the patients welfare, a court application can and should be made. As the decisions of the ECtHR underline, this possibility of approaching a court in the event of doubts as to the best interests of the patient is an essential part of the protection of human rights. The assessments, evaluations and opinions assembled as part of the medical process will then form the core of the material available to the judge, together with such further expert and other evidence as may need to be placed before the court at that stage. In conclusion, having looked at the issue in its wider context as well as from a narrower legal perspective, I do not consider that it has been established that the common law or the ECHR, in combination or separately, give rise to the mandatory requirement, for which the Official Solicitor contends, to involve the court to decide upon the best interests of every patient with a prolonged disorder of consciousness before CANH can be withdrawn. If the provisions of the MCA 2005 are followed and the relevant guidance observed, and if there is agreement upon what is in the best interests of the patient, the patient may be treated in accordance with that agreement without application to the court. I would therefore dismiss the appeal. In so doing, however, I would emphasise that, although application to court is not necessary in every case, there will undoubtedly be cases in which an application will be required (or desirable) because of the particular circumstances that appertain, and there should be no reticence about involving the court in such cases.

The question in this appeal is whether a court order must always be obtained before clinically assisted nutrition and hydration (CANH), which is keeping a person with a prolonged disorder of consciousness (PDOC) alive, can be withdrawn, or whether, in some circumstances, this can occur without court involvement. In June 2017 Mr Y, an active man in his fifties, suffered a cardiac arrest which consequently led to extensive brain damage due to lack of oxygen. He never regained consciousness following the cardiac arrest and required CANH to keep him alive. His treating physician concluded that, even if he regained consciousness, he would have profound disability and would be dependent on others to care for him for his remining life. A second opinion from a consultant and professor in Neurological Rehabilitation considered Mr Y to be in a vegetative state without prospect of improvement. Mrs Y and their children believed that he would not wish to be kept alive given the doctors views about his prognosis. The clinical team and the family agreed that it would be in Mr Ys best interests for CANH to be withdrawn, which would result in his death within two to three weeks. On 1 November 2017, the NHS Trust sought a declaration in the High Court that it was not mandatory to seek the courts approval for the withdrawal of CANH from a patient with PDOC when the clinical team and the patients family agreed that it was not in the patients best interests to continue treatment and that no civil or criminal liability would result if CANH were withdrawn. The High Court granted a declaration that it was not mandatory to seek court approval for withdrawal of CANH from Mr Y where the clinical team and Mr Ys family were in agreement that continued treatment was not in his best interests. The judge granted permission to appeal directly to the Supreme Court. In the intervening period Mr Y died but the Supreme Court determined that the appeal should go ahead because of the general importance of the issues raised by the case. The Supreme Court unanimously dismisses the appeal. Lady Black gives the sole judgment with which the other Justices agree. It has not been established that the common law or the European Convention on Human Rights (ECHR) give rise to the mandatory requirement to involve the court to decide upon the best interest of every patient with PDOC before CANH can be withdrawn [126]. The fundamental question facing a doctor, or a court, considering treatment of a patient who is not able to make his or her own decision is not whether it is lawful to withdraw or withhold treatment, but whether it is lawful to give it. It is lawful to give treatment only if it is in the patients best interests. If a doctor carries out treatment in the reasonable belief that it will be in the patients best interests, he or she will be entitled to the protection from liability conferred by section 5 of the Mental Capacity Act (MCA) 2005 [92]. The starting point on whether there is a common law requirement to seek a court order is the House of Lords decision in Airedale NHS Trust v Bland [1993] A.C. 789. However, there can be no question of the House of Lords in that case having imposed a legal requirement that in all cases of patients in a persistent vegetative state an application must be made to court before CANH can be withdrawn. Instead they recommended as a matter of good practice that reference be made to the court [93 94]. Therefore, when the MCA 2005 came into force in 2007 there was no universal requirement, at common law, to apply for a declaration prior to withdrawing CANH and the MCA itself did not single out any class of decisions which must always be placed before the court [95]. The MCA 2005 Code of Practice (the Code) does speak of applications to court in cases such as the present but does so in a contradictory fashion on the issue of whether such applications are mandatory [97]. Further, no requirement to apply to court can be found in the post MCA 2005 case law [98]. The ECHR does not generate a need for an equivalent provision to be introduced [102]. The European Court of Human Rights (ECtHR) decision in Lambert v France 62 EHRR 2 and subsequent cases have repeatedly set out factors relevant to the administering or withdrawing of medical treatment. These are factors which the UK has complied with. First, the UK has a regulatory framework compatible with the requirements of article 2 in the form of the combined effect of the MCA 2005, the Code, and professional guidance, particularly that of the GMC [105]. Second, the MCA 2005 requires doctors to take into account the patients express wishes and those of people close to him, as well as the opinions of other medical personnel [108]. Third, the opportunity to involve the court is available whether or not a dispute is apparent [109]. Lambert and subsequent decisions show that the ECtHR does not regard it as problematic, in principle, that a decision to remove CANH from a patient with PDOC should be made by a doctor without obligatory court involvement [110]. CANH is medical treatment and it is not easy to explain, therefore, why it should be treated differently from other forms of life sustaining treatment [116]. In any event, it is difficult to accept that one can delineate patients with PDOC from other patients in such a way as to justify judicial involvement being required for the PDOC patients but not the others. In all cases, the medical team make their treatment decisions by determining what is in the patients best interest [119]. If it transpires that the way forward is finely balanced, there is a difference of medical opinion, or a lack of agreement from persons with an interest in the patients welfare, a court application can and should be made [125].

This appeal raises a question relating to the temporal scope of Council Directive 97/81/EC of 15 December 1997, 1998 OJ L14/9, concerning the Framework Agreement on part time work (the directive) as extended to the United Kingdom by Council Directive 98/23/EC of 7 April 1998, 1998 OJ L131/10, and the general principles of EU law governing the non retroactivity of legislation. The question arises in the context of proceedings between Mr Dermod OBrien QC and the Ministry of Justice concerning the pension to which Mr OBrien is entitled by reason of his part time service in a judicial office. In essence, the question is whether, where a part time worker retires after the entry into force of the directive and is entitled under the directive, taken together with national law, to an occupational pension based on his length of service, periods of service which were completed before the directive entered into force should be taken into account. The facts The material facts are as follows. Mr OBrien is a retired self employed barrister who also held part time judicial office as a recorder (a part time judge of the Crown Court) between 1 March 1978 and 31 March 2005, when he retired at the age of 65. Recorders were not salaried but were paid fees on a per diem basis. There was no provision for the payment of a judicial pension on retirement. In June 2005 Mr OBrien wrote to the Ministry, requiring that he be paid a retirement pension on the same basis, adjusted pro rata temporis, as that paid to former full time judges who had been engaged on the same or similar work. He was informed by the Ministry that he fell outside the categories of judicial office holder to whom a judicial pension was payable. In September 2005 he began proceedings in the Employment Tribunal, in which he claimed that he was entitled to a judicial pension by virtue of the directive and the regulations transposing it into domestic law. On 28 July 2010 the Supreme Court referred two questions to the Court of Justice for a preliminary ruling under article 267 TFEU: (1) Is it for national law to determine whether or not judges as a whole are workers who have an employment contract or employment relationship within the meaning of clause 2.1 of the Framework Agreement, or is there a Community norm by which this matter must be determined? (2) If judges as a whole are workers who have an employment contract or employment relationship within the meaning of clause 2.1 of the Framework Agreement, is it permissible for national law to discriminate (a) between full time and part time judges, or (b) between different kinds of part time judges in the provision of pensions? On 1 March 2012 the Second Chamber of the Court of Justice, having received the opinion of the Advocate General (Kokott) on 17 November 2011, gave judgment: OBrien (Case C 393/10) [2012] 2 CMLR 25. It answered the questions as follows: (1) European Union law must be interpreted as meaning that it is for the member states to define the concept of workers who have an employment contract or an employment relationship in clause 2.1 of the Framework Agreement and in particular, to determine whether judges fall within that concept, subject to the condition that that does not lead to the arbitrary exclusion of that category of persons from the protection offered by Directive 97/81, as amended by Directive 98/23, and that agreement. An exclusion from that protection may be allowed only if the relationship between judges and the Ministry of Justice is, by its nature, substantially different from that between employers and their employees falling, according to national law, under the category of workers. (2) The Framework Agreement . must be interpreted as meaning that it precludes, for the purpose of access to the retirement pension scheme, national law from establishing a distinction between full time judges and part time judges remunerated on a daily fee paid basis, unless such a difference in treatment is justified by objective reasons, which is a matter for the referring court to determine. Following that ruling, the Supreme Court held that Mr OBrien was at the material time a part time worker within the meaning of clause 2.1 of the Framework Agreement, and that no objective justification had been shown for departing from the principle of remunerating fee paid part time judges on the same basis as full time judges, subject to adjustment pro rata temporis. Mr OBrien was therefore entitled to a pension on terms equivalent to a circuit judge (a comparable full time judge): [2013] UKSC 6; [2013] 1 WLR 522. The case was remitted to the Employment Tribunal for determination of the amount of the pension to which Mr OBrien was entitled. The question which then arose was whether, in calculating the amount of his pension, account should be taken of the whole of his service since the beginning of his appointment on 1 March 1978 (a period of 27 years), or only his service since the deadline for transposing the directive expired (a period of less than five years). The Employment Tribunal held that the calculation should take into account the whole of his service, but the Employment Appeal Tribunal held the contrary: [2014] ICR 773. The Court of Appeal upheld the decision of the Employment Appeal Tribunal: [2015] EWCA Civ 1000; [2016] 1 CMLR 28. Mr OBrien now appeals to the Supreme Court. The legal context (a) National law Domestic legislation provides for the payment of judicial pensions under two statutes, the Judicial Pensions Act 1981 and the Judicial Pensions and Retirement Act 1993. The 1981 Act applies to persons appointed prior to 31 March 1995, unless they elect to have their pension paid under the 1993 Act. The 1993 Act applies to persons appointed on or after 31 March 1995. Under the Acts, a pension is payable to any person retiring from qualifying judicial office, subject to their having attained the age of 65 and, under the 1993 Act, subject also to their having completed at least five years service in such office. At the material time, full time judges and salaried part time judges held a qualifying judicial office, but fee paid part time judges, such as recorders, did not. Under both schemes, the amount of pension payable to a full time judge is based on his or her final years salary and on his or her number of years service in a qualifying judicial office by the date of retirement. Under the 1981 Act, circuit judges must have served for 15 years in order to qualify for a full pension of one half of their last annual salary. The corresponding period under the 1993 Act is 20 years. Under both schemes, judges who have served for shorter periods receive a proportion of the full pension corresponding to the length of their service. There is also a lump sum payable on retirement, the sum being based on the amount of the annual pension. Judicial pensions were at the material time non contributory. Since 2012, judges have had to pay a contribution. The United Kingdom gave effect to the directive by the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551), which came into force on 1 July 2000. The Regulations provide that a part time worker has the right not to be treated by his employer less favourably than the employer treats a comparable full time worker. In determining whether a part time worker has been treated less favourably than a comparable full time worker, the pro rata principle is to be applied unless it is inappropriate. The Regulations expressly do not apply to fee paid part time judges. (b) Relevant EU law In European Commission v Moravia Gas Storage AS (Case C 596/13 P) [2015] 3 CMLR 17, para 32, the Court of Justice stated: A new rule of law applies from the entry into force of the act introducing it, and, while it does not apply to legal situations that have arisen and become definitive under the old law, it does apply to their future effects, and to new legal situations. It is otherwise, subject to the principle of the non retroactivity of legal acts, only if the new rule is accompanied by special provisions which specifically lay down its conditions of temporal application. The Court applied that principle in the context of the directive in Istituto Nazionale della Previdenza Sociale (INPS) v Bruno (Joined Cases C 395/08 and C 396/08) [2010] ECR I 5119, where the question arose whether service prior to the entry into force of the directive counted towards the service required to qualify for a retirement pension. The Court cited the principle that new rules apply, unless otherwise specifically provided, immediately to the future effects of a situation which arose under the old rule (para 53), and concluded: Accordingly, the calculation of the period of service required to qualify for a retirement pension such as the pensions at issue in the main proceedings is governed by Directive 97/81, including periods of employment before the directive entered into force. (para 55) The Court cited that judgment when rejecting an objection to the admissibility of the first preliminary reference in the present proceedings. In OBrien (Case C 393/10) [2012] ICR 955, the Court stated: 24. The Latvian Government doubts whether the reference for a preliminary ruling is admissible. It is contrary to the principle of the protection of legitimate expectations and the principle of legal certainty to hold that Directive 97/81 may apply to facts which took place before the entry into force of that directive in the United Kingdom and which continued for a short time after its entry into force, even if the right to a retirement pension claimed by Mr OBrien arose after the expiry of the time limit for transposing Directive 97/81. 25. The Court has already declared, as regards the applicability ratione temporis of that directive that new rules apply, unless otherwise specifically provided, immediately to the future effects of a situation which arose under the old rule. Thus the Court concluded that the calculation of the period of service required to qualify for a retirement pension is governed by Directive 97/81, including periods of employment before the directive entered into force (Joined Cases C 395/08 and C 396/08 Bruno [2010] ECR I 5119, paras 53 to 55). 26. Consequently, the reference for a preliminary ruling must be declared admissible. The Court has treated occupational pensions as a form of pay, the entitlement to which accrues over the length of the employees service. In Ten Oever v Stichting Bedrijfspensionenfonds voor her Glazenwassers en Schoonmaakbedrijf (Case C 109/91) [1993] ECR I 4879, the Court stated, in relation to its Barber v Guardian Royal Exchange Assurance Group judgment (Case C 262/88) [1990] ECR I 1889: 17. The Courts ruling took account of the fact that it is a characteristic of this form of pay [scil, benefits provided for by private occupational pension schemes] that there is a time lag between the accrual of entitlement to the pension, which occurs gradually throughout the employees working life, and its actual payment, which is deferred until a particular age. 19. Given the reasons explained in para 44 of the Barber judgment for limiting its effects in time, it must be made clear that equality of treatment in the matter of occupational pensions may be claimed only in relation to benefits payable in respect of periods of employment subsequent to 17 May 1990, the date of the Barber judgment . (c) Summary of arguments of parties The fundamental difference between the parties is as to whether Mr OBriens entitlement to a pension in respect of his service prior to 7 April 2000 (the final date for transposition of the directive) should be regarded as a legal situation which arose and became definitive under the law then in force, or should be regarded as one of the future effects of a legal situation which arose under the old law, to which the directive therefore applies. Mr OBrien argues that the reasoning in the Bruno and OBrien judgments implies that periods of employment before the directive entered into force are to be taken into account when applying the directive in situations which arise after it should have been transposed. In particular, they are relevant not only to qualification for a retirement pension (which the Ministry does not dispute), but also to the quantification of that pension, where its quantification is based on the employees length of service. The Ministry argue that since, following Ten Oever, a pension payable under an occupational pension scheme constitutes deferred pay for past work, and the workers entitlement to pension accrues at the time of the work for which it constitutes pay, it follows from the non retroactivity principle that the accrued right cannot be affected retrospectively by a change in the law. The entitlement is permanently fixed at the time when the right accrues, rather than being determined when the person retires and the pension becomes payable. On that basis, it is argued that Mr OBriens non entitlement to pension in respect of his first 22 years of service was definitively established before the directive entered into force. (d) The view of the national court The majority of the court are inclined to think that the effect of Directive 97/81 is that it is unlawful to discriminate against part time workers when a retirement pension falls due for payment. The directive applies ratione temporis where the pension falls due for payment after the directive has entered into force. In so far as part of the period of service took place prior to the directives entry into force, the directive applies to the future effects of that situation. However, the Court of Justice has not as yet considered the argument that if, following the Ten Oever line of authority, an occupational pension is treated as deferred pay, the right to which is acquired at the time of the work to which the pay relates, then it follows from the general principle of non retroactivity that the directive does not alter or affect rights acquired (or, in Mr OBriens case, not acquired) before it was brought into force, there being no provision in the directive which overrides that general principle. Although the majority of the court are inclined to think that Ten Oever was concerned with the exceptional Barber limitation, which does not arise in the present context, the correct approach does not appear to the Supreme Court to be acte clair. The question referred Does Directive 97/81, and in particular clause 4 of the Framework Agreement annexed thereto concerning the principle of non discrimination, require that periods of service prior to the deadline for transposing the Directive should be taken into account when calculating the amount of the retirement pension of a part time worker, if they would be taken into account when calculating the pension of a comparable full time worker? The Supreme Court has therefore concluded that it is necessary to refer the following question to the Court of Justice:

The Appellant, Mr OBrien, is a retired self employed barrister who also worked on a daily fee paid basis as a part time judge of the Crown Court between 1978 and 2005. At the material time domestic law entitled salaried judges (including part time judges) to a pension based on their final years salary and number of years service, but made no pension provision for fee paid part time judges. Although employers were prevented from treating part time workers less favourably than full time workers under Council Directive 97/81/EC (the directive), the Regulations which gave effect to the directive (the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) which came into force on 1 July 2000) expressly did not apply to fee paid part time judges. Mr OBrien brought proceedings against the Ministry of Justice claiming an entitlement to a judicial pension. The case reached the Supreme Court, which referred to the Court of Justice of the European Union (CJEU) the question of whether it was permissible for national law to draw a distinction between salaried and daily fee paid judges for the purposes of pension provision. The CJEU held that it was not permissible, and the Supreme Court found that Mr OBrien was therefore entitled under the directive and national law to a pension on terms equivalent to a comparable full time judge. The Supreme Court then remitted the case to the Employment Tribunal to determine the amount of the pension to which Mr OBrien was entitled. There the question arose whether, in calculating the amount of his pension, account should be taken of the whole of his service since the beginning of his appointment in 1978 (a period of 27 years), or only his service since 7 April 2000, the deadline for transposing the directive (a period of less than five years). The Employment Tribunal held that the calculation should take into account the whole of his service, but the Employment Appeal Tribunal held the contrary. The Court of Appeal upheld the decision of the Employment Appeal Tribunal. Mr OBrien now appeals to the Supreme Court. The Supreme Court unanimously decides to refer a question to the CJEU. The terms of the reference are set out by Lord Reed. The Supreme Court is not persuaded that the case of either appellant or respondent is clearly right and is therefore under a duty to refer the questions in issue to the CJEU. As a matter of EU law when a new rule of law comes into force, it cannot apply to legal situations which have arisen and become definitive prior to that date, but can apply to the future effects of a situation which arose under the old law (European Commission v Moravia Gas Storage AS (Case C 596/13 P). This principle was applied in Istituto Nazionale della Previdenza Sociale (INPS) v Bruno (Joined Cases C 395/08 and C 396/08), where it was held that periods of employment completed before the directive came into force should be taken into account in calculating whether an employees length of service qualified for a pension. The entitlement to a pension (or lack thereof) based on periods of employment under the old law was not a situation which arose and became definitive at the time of the employment, but was a future effect of that employment. Mr OBrien argues that under this line of reasoning, periods of employment before the directive entered into force are to be taken into account when applying the directive in situations which arise after it should have been transposed, not only in relation to qualification for a retirement pension (which the Ministry does not dispute), but also in relation to the quantification of that pension, where its quantification is based on the employees length of service. However, the CJEU has also treated occupational pensions as a deferred form of pay, the entitlement to which accrues continuously over the employees service (Ten Oever v Stichting Bedrijfspensionenfonds voor her Glazenwassers en Schoonmaakbedrijf (Case C 109/91). In Ten Oever the Court referred to its judgment in Barber v Guardian Royal Exchange Assurance Group judgment (Case C 262/88) on the requirement for equal treatment of men and women in occupational pensions (pursuant to a different EU law provision), and held that such equal treatment could be claimed only in relation to benefits in respect of periods of employment subsequent to the date of the Barber judgment. The Ministry argued that following Ten Oever an occupational pension constitutes deferred pay for past work, and the workers entitlement to that pension accrues and is fixed at the time of the work for which it constitutes pay; the entitlement is not determined when the person retires and the pension becomes payable. The EU law principle of non retroactivity therefore prevents the right which accrued (or did not accrue) at the time of service from being affected retrospectively by a change in the law. On that basis, it is argued that Mr OBriens non entitlement to a pension in respect of his first 22 years of service was definitively established before the directive entered into force. In the context of these two approaches, the Supreme Court is inclined to think that the effect of the directive is that it is unlawful to discriminate against part time workers when a retirement pension falls due for payment. The directive applies where the pension falls due for payment after the directive has entered into force. In so far as part of the period of service took place prior to the directives entry into force, the directive applies to the future effects of that situation. However, the CJEU has not yet considered the argument that if, following the Ten Oever line of authority, an occupational pension is treated as deferred pay, the right to which is acquired at the time of the work to which the pay relates, then it follows from the general principle of non retroactivity that the directive does not alter or affect rights acquired (or, in Mr OBriens case, not acquired) before it was brought into force, there being no provision in the directive which overrides that general principle. Although the majority of the court are inclined to think that Ten Oever was concerned with the exceptional Barber limitation, which does not arise in the present context, the correct approach does not appear to the Supreme Court to be sufficiently clear. The following question is therefore referred to the CJEU: Does Directive 97/81, and in particular clause 4 of the Framework Agreement annexed thereto concerning the principle of non discrimination, require that periods of service prior to the deadline for transposing the Directive should be taken into account when calculating the amount of the retirement pension of a part time worker, if they would be taken into account when calculating the pension of a comparable full time worker?

This appeal concerns the lawfulness of a bus companys policy in relation to the use of the space provided for wheelchair users on its buses. The factual and procedural background At around 9.35 in the morning of 24 February 2012, Mr Doug Paulley, who is a wheelchair user, arrived at Wetherby bus station, expecting to catch the 9.40 bus (the Bus) to Leeds. On arrival at Leeds he intended to catch the train to Stalybridge to meet his parents for lunch. The Bus was operated by a subsidiary of FirstGroup PLC (FirstGroup), which is the parent company of a group of companies which operates a total of about 6,300 buses. The Bus was equipped with a lowering platform and a wheelchair ramp. The Bus also had a space (a space) for wheelchairs, which included a sign that read Please give up this space if needed for a wheelchair user. When Mr Paulley started to board the Bus, the driver, Mr Britcliffe, asked him to wait because the space was occupied by a woman with a sleeping child in a pushchair. The space had a sign with the familiar designation of a wheelchair sign, and in addition it had a notice (the Notice) saying Please give up this space for a wheelchair user. Mr Britcliffe asked the woman to fold down her pushchair and move out of the space so that Mr Paulley could occupy it in his wheelchair. She replied that her pushchair did not fold down, and refused to move. Mr Paulley then asked whether he could fold down his wheelchair and use an ordinary passenger seat. Mr Britcliffe refused that request, because there was no safe way of securing the wheelchair and the Bus had to take a rather winding route. As a result, Mr Paulley had to wait for the next bus, which left around 20 minutes later. The consequence of this was that Mr Paulley missed his train at Leeds, and had to take a later train which arrived at Stalybridge an hour later than he had planned. Although Mr Paulley was a frequent bus user, this was the first time that he was unable to get on a bus because someone refused to vacate the space. Mr Paulley issued proceedings in the Leeds County Court against FirstGroup for unlawful discrimination against him on the ground of his disability. His claim was based on the proposition that FirstGroup had failed to make reasonable adjustments to its policies contrary to section 29(2) of the Equality Act 2010. The claim came on before Recorder Isaacs. The evidence showed that FirstGroups published policy about wheelchairs and their users at the time of the incident was this: By the time of the trial, the published policy had changed somewhat, and it was in these terms: As part of our commitment to providing accessible travel for wheelchair users virtually all our buses have a dedicated area for wheelchair users; other passengers are asked to give up the space for wheelchairs. If the bus is full or if there is already a wheelchair user on board unfortunately we will not be able to carry another wheelchair user. Wheelchairs do not have priority over buggies, but to ensure that all our customers are treated fairly and with consideration, other customers are asked to move to another part of the bus to allow you to board. Unfortunately, if a fellow passenger refuses to move you will need to wait for the next bus. As part of our commitment to providing accessible travel for wheelchair users virtually all our buses have a dedicated wheelchair area for wheelchair users; other passengers are asked to give up the space for wheelchairs. Wheelchair users have priority use of the wheelchair space. If this is occupied with a buggy, standing passengers or otherwise full, and there is space elsewhere on the vehicle, the driver will ask that it is made free for a wheelchair user. Please note that the driver has no power to compel passengers to move in this way and is reliant on the goodwill of the passengers concerned. Unfortunately, if a fellow passenger refuses to move you will need to wait for the next bus. The evidence before the Recorder established that Mr Britcliffe had followed FirstGroups policy, by asking the woman with the pushchair to move from the space, but, when she refused, by taking the matter no further. Mr Birtwhistle, FirstGroups UK Bus Projects Manager, told the Recorder that in the main passengers complied with a request to give up the space. Mr Birtwhistle also explained why FirstGroup had adopted the policy set out in paras 7 and 8 above. The company had carried out a review of the way it communicated with its customers, and found that many of them thought that it was putting up too many peremptory notices on buses. FirstGroup had concluded that it would be better policy to use more pleasant and engaging notices which were friendlier to customers. So far as FirstGroups policy about the space was concerned, Mr Birtwhistle said that it was designed to cause the customer to think Somebody else needs this space. I will be reasonable. I will move away from it. The policy was intended to be non confrontational and placatory. The Recorder found for Mr Paulley and awarded him 5,500 damages. FirstGroup appealed to the Court of Appeal who allowed its appeal [2015] 1 WLR 3384. Mr Paulley now appeals to this Court. The legal requirements in relation to public service vehicles Mr Paulleys claim was based on his allegation that FirstGroup had failed to comply with its duties under the Equality Act 2010, and it is therefore appropriate to set out the relevant provisions of that Act. However, before doing so, I should refer to earlier legislation applicable to public service vehicles, as it was relied on by the Court of Appeal, and it was also canvassed in the arguments before this Court. The Bus was a public service vehicle for the purposes of the Public Passenger Vehicles Act 1981 (the 1981 Act), and it was therefore required to comply with Schedule 1 to the Public Service Vehicles Accessibility Regulations 2000 (SI 2000/1970) (the Accessibility Regulations). Paragraph 2 of that Schedule required the Bus to have at least one wheelchair space on the lower deck, which had to comply with para 3 or 4. The Bus complied with para 4, which contains detailed specifications as to the size and other characteristics of the space, and also envisages that a folding or tip up seat may be placed in the space, and requires there to be a notice on or near such a seat stating Please give up this seat for a wheelchair user. The Bus was also required to carry a sign adjacent to the space which showed a representation of a person in a wheelchair. Paragraph 3 of Schedule 2 to the Accessibility Regulations requires there to be at least four seats designated as priority seats for use by disabled passengers, and a sign on or near a priority seat indicating that disabled persons have priority for the use of that seat. Section 25 of the 1981 Act also enables regulations to be made authorising the driver of a bus or, at his request, a police constable to remove a passenger infringing what are known as the Conduct Regulations, namely the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 (the Conduct Regulations) (SI 1990/1020), which were made under these powers. Para 5(2) of the Conduct Regulations provides: A driver, inspector and conductor shall take all reasonable steps to ensure that the provisions of these Regulations relating to the conduct of passengers are complied with. Para 6(1) of the Conduct Regulations states that no passenger shall, inter alia: (b) put at risk or unreasonably impede or cause discomfort to any person travelling on or entering or leaving the vehicle (k) remain on the vehicle, when directed to leave by the driver, inspector or conductor on the following grounds: (i) that his remaining would result in the number of passengers exceeding the maximum seating capacity or maximum standing capacity (ii) (iii) cause offence to a reasonable passenger that he has been causing a nuisance; or that his condition is such as would be likely to Para 6(2) of the Conduct Regulations states that: [A] passenger on a vehicle who has with him [inter alia any bulky or cumbersome article] or any animal if directed by the driver, inspector or conductor (a) to put it in a particular place on the vehicle, shall put it where directed; and (b) driver, inspector or conductor, shall remove it. if requested to move it from the vehicle by the Para 8(2) of the Conduct Regulations provides that any passenger on a vehicle who contravenes any provision of those regulations may be removed from the vehicle by the driver or, on the request of the driver, by a police constable. The Conduct Regulations were amended by the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) (Amendment) Regulations 2002 (SI 2002/1974), under powers conferred by the Disability Discrimination Act 1995, to deal with wheelchair users. Para 12 of the Conduct Regulations as inserted by the amendments provides that: the wheelchair is of a type or size that can be (2) If there is an unoccupied wheelchair space on the vehicle, a driver and a conductor shall allow a wheelchair user to board if (a) correctly and safely located in that space, and (b) in so doing, neither the maximum seating nor standing capacity of the vehicle would be exceeded. (3) For the purpose of paragraph (2), a wheelchair space is occupied if (a) (b) passengers or their effects are in that space and they or their effects cannot readily and reasonably vacate it by moving to another part of the vehicle. (4)(e) [B]efore the vehicle is driven [the driver must ensure that] any wheelchair user is correctly and safely positioned in a wheelchair space. there is a wheelchair user in that space; or In addition a bus driver has duties to help wheelchair users to board and alight and, where appropriate, to fit wheelchair restraints. When the Conduct Regulations were amended, the Government issued written guidance about their application. The introduction said that the Government was committed to comprehensive and enforceable civil rights for disabled people. Achieving a fully accessible public transport system is a key element of that policy. Dealing with the space the guidance said: A wheelchair user must only be carried if there is a wheelchair space available and the seating and standing capacity of the vehicle will not be exceeded. Because buses often carry more seated and/or standing passengers when the wheelchair space is unoccupied the opportunity for a wheelchair user to travel may depend on other passengers and how full the vehicle is at the time. If there is space available and the seating and standing capacity will not be exceeded when the space is occupied then any passengers in the wheelchair space should be asked to move. This may not be practical if, for example, the vehicle is nearing its capacity or passengers with baggage or a baby buggy are using the space. The Equality Act 2010 The 2010 Act now governs cases of discrimination on the ground of a protected characteristic. Disability is one such characteristic. Section 6(3) provides: In relation to the protected characteristic of disability a reference to a person who has a particular (a) protected characteristic is a reference to a person who has a particular disability; (b) a reference to persons who share a protected characteristic is a reference to persons who have the same disability. It is common ground that Mr Paulleys particular disability for the purposes of section 6(3)(a) is a physical condition which requires him to use a wheelchair. Accordingly, this case is concerned with disadvantages faced by wheelchair users rather than people with other kinds of disability. FirstGroup is a public service provider. Accordingly it falls within section 29 of the 2010 Act, which provides: (1) A person (a service provider) concerned with the provision of a service to the public or a section of the public (for payment or not) must not discriminate against a person requiring the service by not providing the person with the service. (2) A service provider (A) must not, in providing the service, discriminate against a person (B) as to the terms on which A provides the service (a) to B; (b) by terminating the provision of the service to B; (c) by subjecting B to any other detriment. In addition, under section 29(7) of the 2010 Act, as a public service provider, FirstGroup has a duty to make reasonable adjustments, and by virtue of section 20, that duty involves complying with three requirements, the first of which is in section 20(3), which is in these terms: (3) The first requirement is a requirement, where a provision, criterion or practice of As puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage. According to section 21(1), the word substantial in subsection 20(3) means more than minor or trivial. The applicable Schedule for the purposes of section 20(1) of the 2010 Act is in this case Schedule 2, paragraph 2 of which provides: (1) A must comply with the first, second and third requirements. (2) For the purposes of this paragraph, the reference in section 20(3), (4) or (5) to a disabled person is to disabled persons generally. Again, it is common ground that paragraph 2(2) of Schedule 2 is, on the facts of this case, concerned with wheelchair users generally, rather than any wider class of disabled persons. Section 21 provides: (1) A failure to comply with the first, second or third requirement is a failure to comply with a duty to make reasonable adjustments. (2) A discriminates against a disabled person if A fails to comply with that duty in relation to that person. (3) A provision of an applicable Schedule which imposes a duty to comply with the first, second or third requirement applies only for the purpose of establishing whether A has contravened this Act by virtue of subsection (2); a failure to comply is, accordingly, not actionable by virtue of another provision of this Act or otherwise. When considering whether a proposed adjustment to a provision, criterion or practice (PCP) is reasonable in any particular case, the Code of Practice on Services, Public Functions and Associations issued by the Equality and Human Rights Commission states at para 7.30 that, without intending to be exhaustive, some of the factors which might be taken into account include: whether taking any particular steps would be effective in overcoming the substantial disadvantage that disabled people face in accessing the services in question; provider to take the steps; the extent to which it is practicable for the service the financial and other costs of making the adjustment; the extent of any disruption which taking the steps the extent of the service providers financial and other the amount of any resources already spent on making would cause; resources; adjustments; and the availability of financial or other assistance. The judgments below The Recorder considered that there was no difference of substance between FirstGroups policy at the time of the incident and its policy at the time of the hearing. (I am not sure that I agree, but the contrary was not argued, and it is not an issue which needs to be resolved on this appeal. In so far as it is relevant, this judgment is directed to the current policy, ie as set out in para 8 above). He found that this policy was a PCP, which he described as a policy of first come first served, whereby a non wheelchair user occupying the space on the bus would be requested to move but if the request was refused nothing more would be done. The Recorder also found that this PCP was a policy which placed Mr Paulley and other wheelchair users at a substantial disadvantage by comparison with non disabled bus passengers. Crucially for present purposes, the Recorder went on to hold that there were reasonable adjustments that FirstGroup could have made to the PCP which would have eliminated that disadvantage. Those reasonable steps were, at least as I read his judgment, (i) an alteration to the Notice which would positively require a non disabled passenger occupying a space to move from it if a wheelchair user needed it, coupled with (ii) an enforcement policy that would require non disabled passengers to leave the bus if they failed to comply with that requirement. In this connection, it is common ground that FirstGroups conditions of carriage do not give a driver power to require, let alone to force (as opposed to request) a non wheelchair user to move out of a space needed by a wheelchair user, or to leave the bus if she refuses to do so. More particularly, the Recorder said that the contention that the system of priority given to wheelchair users should be enforced as a matter not of request to any non wheelchair user (to use the inelegant but convenient term), but of requirement was in his view a reasonable one, because: It could be incorporated into [FirstGroups] conditions of carriage so that any non disabled non wheelchair using passenger could be obliged to leave the space if requested to do so because a wheelchair user needed to use it; just as there are conditions of carriage which forbid smoking, making a nuisance or other anti social behaviour on pain of being asked to leave the bus then a refusal to accede to a requirement to vacate the space could have similar consequences. In my view once the system had been advertised and in place there would be unlikely to be caused any disruption or confrontation as all passengers would know where they were. Although such a policy might inconvenience a mother with a buggy that, I am afraid is a consequence of the protection that Parliament has chosen to give to disabled wheelchair users and not to non disabled mothers with buggies. I agree with the claimant that the [Conduct] Regulations do not really assist the court in determining whether the proposed adjustment suggested by the claimant is reasonable or not. (para 21) FirstGroups appeal to the Court of Appeal was due to be heard with another appeal in a case heard in the Middlesborough County Court involving virtually identical facts, Black v Arriva North East Ltd, where His Honour Judge Bowers had found an identical policy did not involve unlawful discrimination under the 2010 Act see [2013] EqLR 558. However, that appeal was withdrawn. Although FirstGroups appeal in this case was unanimously allowed, in one respect the reasons given by Lewison LJ (who gave the leading judgment) differed from those of Arden and Underhill LJJ. While Underhill and Arden LJJ considered that the PCP put Mr Paulley and other wheelchair users at a substantial disadvantage in comparison with persons who were not [so] disabled, Lewison LJ was not convinced that this was so see paras 62 65 (Underhill LJ), 72 73 (Arden LJ), and paras 35 39 (Lewison LJ). The majority view of the Court of Appeal is not challenged by FirstGroup in this Court (rightly, as I am currently inclined to think). All three members of the Court of Appeal considered that the lawfulness of FirstGroups policy should be assessed on the basis that it had a PCP which they formulated in slightly different terms from the Recorder, although they accepted that this difference did not affect the outcome see per Lewison LJ at para 34. They said that the proper approach started by accepting that FirstGroup had a PCP which involved operating its buses on a first come first served basis and then asking whether the modification to that PCP, namely to request but not to require non wheelchair users to vacate the space, and if necessary the bus, when a wheelchair user wants to use the space, is an adjustment that went far enough to comply with the duty to make reasonable adjustments. There is no challenge in this Court to that proposition (again, rightly in my view). The Court of Appeal decided that it was not reasonable to hold, as the Recorder had done, that FirstGroup should adjust its PCP so that its drivers required, rather than requested, non wheelchair users to vacate a space when it was needed by a person in a wheelchair, and then positively to enforce that requirement, with the ultimate sanction being removal from the bus. The Court of Appeal considered that the adjustment which the Recorder upheld would be both unfair and impractical because: i) (a) It would be unreasonable for the adjustment to extend to all non wheelchair users including those whose refusal to vacate the space was reasonable, as such an adjustment could unfairly affect other passengers (para 55), and If the adjustment was limited to non wheelchair users who (b) unreasonably refused to vacate the space, it would be impracticable as it would require the driver to decide whether a passenger was being unreasonable (paras 48 and 52 53), and, in any event, ii) It would not be reasonable to expect a driver to try and enforce the proposed amended policy by seeking physically to remove such a person from the space or the bus, or by halting the bus until that person vacated the space or the police arrived (paras 49 50). In addition, the Court of Appeal doubted that the proposed adjustment to the PCP could be enforced through the police, because a person who disobeyed it would not be guilty of criminal activity unlike a person who was in breach of the Conduct Regulations (paras 49 50 and 67). The Court of Appeal also rejected the notion that the Notice in the space or the drivers request could have been more prescriptive. Lewison LJ based this view on the grounds that the Recorder had accepted Mr Birtwhistles evidence that FirstGroups research had shown that the company achieved better results with more customer friendly signage and that negative prescriptive signage produced a worse outcome; yet he did not consider that evidence in his assessment of the effectiveness of the adjusted PCP that he endorsed (para 51). Underhill LJ addressed this issue more fully at para 68. He said that he would: hope and expect that, other things being equal, a driver whose first request to a non wheelchair user to vacate the wheelchair space was refused would not simply shrug his or her shoulders and go back to the cab, and that there would normally be some attempt at further persuasion or pressure (possibly even including a threat not to proceed with the journey until the space is cleared though this risks seriously inconveniencing other passengers). However, he considered that: The circumstances in which such a refusal is encountered are liable to vary enormously. In most cases further attempts at persuasion or pressure would be appropriate, but in some they might not be: as Lewison LJ has illustrated, there will be cases where it would be obviously unreasonable to expect the person occupying the space to vacate it, and there would be others where the question of whose need was the greater was at least debatable and where it would not be fair to expect the driver to have to make a decision. Also, the temperaments and experience of different drivers are bound to vary: some would handle such a situation well, but others might find it difficult to cope with. It would be unrealistic for a company to have a policy which prescribed calibrated responses covering the whole range of possible situations. He added that he need not express a final view about any such half way house, since this was not the basis on which the judge decided the case. Arden LJ also discussed this issue, saying at para 80: I consider that the bus company must provide training for bus drivers and devise strategies that bus drivers can lawfully adopt to persuade people to clear the wheelchair space when needed by a wheelchair user. Bus drivers have to use their powers of persuasion with passengers who can move voluntarily. The driver may even decline for a short while to drive on until someone moves out of the wheelchair space. There is no risk of liability to such passengers in requesting them (firmly) to move, if they can, because if they cannot safely do so, they will not do so. The bus company should also have an awareness campaign and put up notices designed to make other passengers more aware of the needs of wheelchair users. However, she said in the following paragraph: These steps are not part of Mr Paulleys case: he has limited his case to requiring the bus company to require people to get off the bus when necessary so that a wheelchair user can get on. In reaching their conclusion, the Court of Appeal considered that the Recorder was wrong to ignore the Conduct Regulations. In para 49 of his judgment, in a passage with which Underhill and Arden LJJ agreed, Lewison LJ pointed out that each of the anti social activities identified by the Recorder in the passage quoted in para 12 above is expressly prohibited by the Conduct Regulations, and the police can be called in aid of the driver under regulation 8(2). Accordingly, he continued, [i]n these cases the driver can truthfully say that the passenger is breaking the law. Earlier in his judgment at para 21, Lewison LJ said that he would infer that the Government took the view that the guidance which accompanied the amended para 12 of the Conduct Regulations (and set out in para 19 above) struck the right balance between the interests of wheelchair users on the one hand, and other passengers on the other, and that FirstGroups policy follows this Government guidance. He fairly added that this guidance pre dated the introduction of the duty to make reasonable adjustments which is now contained in the Equality Act 2010, although as he said the guidance has not been withdrawn or amended. What did the recorder decide? As Lewison LJ said in para 30 of his judgment, it follows from the provisions of 2010 Act set out above that if, on the morning of 24 February 2012, FirstGroup failed to comply with its duty to make reasonable adjustments to its PCP of first come first served, in order to avoid the substantial disadvantage which Mr Paulley suffered as a disabled person, it will have unlawfully discriminated against him. As explained above, the Court of Appeal concentrated on the contention that the adjustment which it was said that FirstGroup had wrongly failed to make to its PCP was to have a policy of requir[ing] and if necessary enforc[ing] the requirement (as Mr Allen QC succinctly put it in his argument on behalf of Mr Paulley), as opposed to merely requesting, that non wheelchair users vacate the space if the space was needed by a wheelchair user. This proposal involves two departures from FirstGroups PCP: first it involves the driver requiring, rather than requesting, a non wheelchair user to vacate a space; secondly, in the event of non compliance, it involves the driver, rather than doing nothing, enforcing the requirement by ejecting the non wheelchair user (or getting him or her ejected) from the space, and, if necessary, from the bus. Before discussing the issues of substance, it is necessary to address the question of what the Recorder actually decided. It appears that Lady Hale and Lord Kerr do not read the Recorders judgment as effectively requiring a policy that could lead to a non wheelchair user being ordered off the bus. However, for my part, I accept the submission of Mr Chamberlain QC for FirstGroup that the Recorder did hold that such a policy was mandated. I say that for a number of reasons. First, the Recorder appears to me to have made it clear when he said that a non disabled passenger would either have to vacate the space by, for example, folding a buggy and sitting elsewhere, or by leaving the bus and taking the next bus available in the passage quoted in para 79 of Lord Toulsons judgment. In addition, the Recorder said that the real adjustment alleged on behalf of the claimant was that there should be a clear practice/policy which not only paid lip service to the giving of priority but actually enforced such priority, so that non wheelchair users would realise that if there was competition for [a] space with a wheelchair user they would either have to vacate the space or [leave] the bus. Consistently with this approach, the Recorder then considered the evidence relating to the possibility of enforcing a requirement to vacate the space on an unwilling non wheelchair user who was occupying it, and concluded that the real adjustment which he had identified should have been made by FirstGroup. In addition, there is his reference to any requirement being enforced in the passage quoted at the beginning of para 30 above. Secondly, in answer to a question from Lewison LJ, Mr Allen QC made it clear to the Court of Appeal on behalf of Mr Paulley that it was necessary to have a policy of require and if necessary, enforce, adding [t]hat was our case and that was the case that was put in cross examination. Thirdly, it is quite clear that the hearing before the Court of Appeal, and the judgment of that court proceeded on the basis that the Recorder had accepted Mr Paulleys case, which was that, to be legally valid, any policy should be enforceable, if necessary, by requiring a non wheelchair user to get off the bus. Lewison LJ said at para 41 of his judgment, the arguments on the appeal were limited to the question whether the judge was right to endorse the PCP that he did. There was no Respondents Notice and no argument directed to some alternative and more limited form of PCP that FirstGroup should have adopted. (Mr Allen QC makes a fair criticism that the two references to PCP are mischaracterisations, but it is clear that Lewison LJ meant adjustment rather than PCP). In particular, Lewison LJ said that Mr Paulleys case had involved an amendment to the PCP where no discretion is given to the driver. And Underhill and Arden LJJ expressed views to the same effect see the passages quoted from their respective judgments at the end of paras 36 and 37 above. Further, as Mr Chamberlain QC said, the point is also apparent from exchanges during the argument in the Court of Appeal, including that quoted in para 42 above. Fourthly, Mr Allen QC accepted in his written case in this Court that this is how the case proceeded in the Court of Appeal, at any rate in his opening argument. He said that at first instance there had been no discussion of compel[ling] all other passengers to vacate the wheelchair space irrespective of the reason why they are in it, but, although he contended that FirstGroup did not rely on exceptional circumstances before the Recorder, Mr Allen nowhere disputed the notion that the Recorder concluded that FirstGroups policy should include mandatory enforcement. It is also clear from later passages in his written case that he accepted that the question of mandatory enforcement was floated in argument before the Recorder. Indeed, in his written case, Mr Allen made the point that FirstGroup could enforce any policy by requiring drivers to turn off the bus a non wheelchair user who did not move from a space. Finally, if a bus company must have a policy which actually forces a non wheelchair user to vacate the space, there can be no getting away from the fact that there will be occasions when that policy can only be complied with by forcing someone off the bus: eg when the bus is completely full, when the non wheelchair user cannot stay on the bus unless she remains in the space, or when the non wheelchair user simply refuses to move from the space. A policy of require and if necessary enforce: discussion In my judgment, it is very difficult to disagree with the reasoning of the Court of Appeal in rejecting this contention (the primary contention) advanced on behalf of Mr Paulley. First, in so far as this adjustment involved an absolute rule (ie that any non wheelchair user must vacate the space if it is required by a wheelchair user), it would not be reasonable. Secondly, whether it was an absolute rule or a qualified rule (ie that any non wheelchair user must vacate if it is reasonable), its implementation through the medium of mandatory enforcement would be likely to lead to problems on some occasions. As to an absolute rule, it is true that there is nothing in the primary or secondary legislation which supports the notion that the space allocated for wheelchair users is to be exclusively used by such individuals, although it is clear that that was, in general terms at any rate, the primarily envisaged use. It is also true that there is no absolutist legislative provision comparable to those relating to anti social activities as contained in the Conduct Regulations set out in paras 15 17 above. However, it does not follow from either point that a court could not conclude that, on appropriate facts, an absolute rule such as that suggested by the Recorder would be requisite. As Mr Allen QC argued, the 2010 Act accorded what Lady Hale has called an extra right consistent with the obligations which the United Kingdom has now undertaken under the United Nations Convention on the Rights of Persons with Disabilities Aster Communities Ltd (formerly Housing Homes Ltd) v Akerman Livingstone (Equality and Human Rights Commission intervening) [2015] AC 1399, paras 25 26. Accordingly, I do not consider that, for instance, para 12(3)(b) of the Conduct Regulations (set out in para 18 above) or the guidance set out in para 19 above provides an automatic answer to the notion that, on appropriate facts, there should be an absolute rule. Nonetheless, once one considers the effect of an absolute rule in relation to the use of spaces on buses, it is not difficult to conceive of circumstances in which it could be unreasonable to expect a non wheelchair user to vacate a space and, even more, to get off the bus even though the space is needed by a wheelchair user. As Lewison LJ said (perhaps somewhat optimistically in some cases) in para 48 of his judgment, [a]lmost by definition, a person who refuses to vacate the wheelchair space when asked to do so [to accommodate a wheelchair user] will have a reason which (at least to them) seems to be a reasonable one. Thus, it might be reasonable for a person to refuse to vacate the space, if he or she was disabled and needed the space to store disability aids, or was elderly and infirm, or was accompanying infants, especially, for instance, if that person had an urgent hospital appointment, or would find it physically very difficult to alight from the bus. Or the space might be occupied by a vulnerable person who only felt safe in the space and could not reasonably be required to leave the bus in an unfamiliar or unsafe location. Of course, in some of these types of circumstances, it might be possible for the non wheelchair user to move elsewhere on the bus, but that may be impossible in some cases, or it may only be possible if third parties, not occupying the space, alighted from the bus, which may be unacceptably difficult or even impossible to arrange. Turning to the possibility of a qualified rule, it is right to record that Mr Allen accepted that, even if there was an absolute rule, there could be exceptions to it in cases of real emergency. Such an approach is close to what I have called a qualified rule, viz a rule that non wheelchair users would only be required to vacate a space to accommodate a wheelchair user if it would be unreasonable for them not to do so. I have some doubts whether it would be fair to impose on bus drivers the burden of deciding on the relative needs of a wheelchair user and a non wheelchair user in circumstances when the decision may result in his requiring the non wheelchair user to vacate the bus. However, it is unnecessary to decide that point in the light of what I say in the next three paragraphs. Whether the policy of requiring non wheelchair users to vacate the space, and, if necessary, the bus, is absolute or qualified, it seems to me to be a fair objection that it would often prove difficult (or worse) when it comes to enforcement. As Mr Chamberlain QC put it, it would be likely to cause confrontation with other passengers and delay. This is particularly relevant given the need to take into account practicability and disruption under para 7.30 of the Code of Practice (para 27 above). As I have already mentioned, a non wheelchair user who refused to vacate the space, whether requested or required to do so, would often (indeed, I think, would normally) consider that he or she was entitled to refuse, and would often have arguably good, or at least understandable, reasons for the refusal. Further, if the bus was full, enforcement of the request would require someone to get off the bus. It would be bad enough if that involved the practically fraught requirement that the non wheelchair user who was occupying the space get off the bus; but in some cases, the driver might have to consider whether it would be more appropriate to require one or more third parties to get off, so that, because of her needs, the non wheelchair user could take their place. Accordingly, any enforcement by a driver of the policy proposed by the primary contention would, possibly frequently, be likely to involve confrontation at best and violence at worst. Further, it is by no means clear that there is any statutory obligation on a passenger to comply with a policy relating to use of the space. This is in marked contrast with the situations dealt with in paras 5 and 6 of the Conduct Regulations (see paras 15 and 16 above), which impose a duty on a passenger, as well as on the operator and the driver, in relation to what the Recorder accurately described as anti social behaviour on the part of the passenger. Further, in para 8, those Regulations provide for enforcement by the driver, and where appropriate by the police (see para 17 above). I note what Lady Hale and Lord Kerr say about para 6(1)(b) of the Conduct Regulations. I do not see how it could on any view be relied on if a non wheelchair user was required to get off the bus: reading paras 6(1)(b) and 12(3)(b) together, the most that a driver can require of such a person is that she move elsewhere in the bus. Quite apart from this, I am by no means convinced that a non wheelchair user who unreasonably failed to comply with a request to move from the space would fall foul of para 6(1)(b). Para 12 imposes duties on a driver, not on a passenger, whereas para 6 is concerned with the behaviour of passengers. And para 6(1)(b) has a requirement of reasonableness, and, as mentioned in para 48 above, most non wheelchair users who refuse to vacate a space will believe that they are being reasonable. And, in any event, even if para 6(1)(b) did apply, it would not answer the points made in paras 50 51 above. The less aggressive policy of stopping the bus until the non wheelchair user vacates the space is, in my view, appropriate, provided that it is not required to be mandatory. Again, I find it impossible to accept that a policy would not be held to be reasonable unless it required a driver to stop the bus until a non wheelchair user vacated a space. It would be plainly unfair on the other passengers, particularly in a full bus or in a bus which was connecting with another service (eg a train or another bus), if the driver had to wait for a long time. Indeed, it is not fanciful to think that such a policy could lead to violence. As Buxton LJ said in Roads v Central Trains Ltd (2004) 104 Con LR 62, para 42, [s]teps might be unreasonable for a [service provider] to take if they unreasonably impact on third parties. Again, I draw support from para 7.30 of the Code of Practice. It is true that stopping the bus until a passenger ceased any anti social behaviour was, on the evidence of Mr Britcliffe, a course which a driver occasionally adopted where a passenger persisted in a breach of para 6 of the Conduct Regulations. But it does not follow that it would therefore be reasonable to expect a driver to take the same course in every case where a non wheelchair user refuses to vacate a space needed by a wheelchair user, and may have to leave the bus if he does vacate the space. In a case involving anti social behaviour, there would rarely if ever be a need for a difficult decision about competing needs, and the nature of any confrontation would be likely to be very different from that in a case involving competing claims to occupy the space. Mr Britcliffe made the point in his evidence when he said that theres a lot of difference between a kebab and a new born baby, Im afraid. Further, subject to the possible argument as to the applicability of para 6(1)(b) of the Conduct Regulations, in a case involving anti social behaviour, the police could be called under para 8 of the Conduct Regulations, whereas there is no such provision applicable to a case where a non wheelchair user refuses to vacate a space required by a wheelchair user. A policy of require and pressurise: introductory Rejection of Mr Paulleys primary contention that FirstGroup should have enforced a more prescriptive policy, requiring, rather than requesting, a non wheelchair user to vacate the space when it was required by a wheelchair user and enforcing that requirement, does not mean that it should not have had a more prescriptive policy than it actually had, so far as any notice and instructions from the driver are concerned. Mr Paulleys alternative contention (the alternative contention) is that, even if one rejects his primary contention, FirstGroup should still have adjusted its PCP so that it expressed itself more prescriptively in writing through the Notice and/or orally through the driver. Thus, on behalf of Mr Paulley it is contended that the Notice should have positively required anyone who was a non wheelchair user occupying the space to give it up to a wheelchair user, and that it should have stated that the obligation to vacate would be enforced. It is also contended that Mr Britcliffe, the driver of the Bus, should have told the woman occupying the space that she had to vacate it now that Mr Paulley required it, and that Mr Britcliffe should have refused to drive on, at least for a period, if she did not comply. It is further contended that there was no good reason why FirstGroup could not have adopted such a policy with regard to its notices and its instructions to its drivers. The fact that such written and oral requirements would not be enforced by drivers or the police does not, it is argued, alter the fact that if such stipulations were expressed as requirements, rather than as requests, it is substantially more likely that any non wheelchair user would vacate the space if it was needed by a wheelchair user. A policy of require and pressurise: a procedural problem Although they discussed Mr Paulleys arguments on this point in the passages cited in para 35 37 above, the Court of Appeal took the view that it was not open to Mr Paulley to advance the alternative contention, and in any event that he was not doing so see paras 42 45 above in that connection. They said that the only adjustment with which this case was concerned was that identified in paras 11 and 14 above, namely what I have called the principal contention, viz that, rather than simply requesting, FirstGroup should have required, and enforced the requirement, that persons not in wheelchairs vacate the space when it was needed by a person in a wheelchair. However, the position appears to have been rather different at first instance. Mr Paulleys pleaded case and his counsels skeleton argument advanced a number of potential reasonable adjustments, which FirstGroup should have made to its PCP, and they were advanced both on alternative and on cumulative bases. Those alleged adjustments included the primary contention (ie forcing a recalcitrant non wheelchair user to leave the bus), but they also included a number of alternative contentions including (i) a more peremptory Notice, (ii) the driver insisting that the pushchair was folded and (iii) the driver refusing to move on until the space was vacated (as well as other suggestions). The Recorder referred to the various suggested adjustments in his well constructed and clear judgment, but, as explained in para 42 above described the real adjustment alleged on behalf of the claimant as requiring and enforcing ie Mr Paulleys primary case which he went on to accept. In these circumstances, there are two possible problems with this Court considering Mr Paulleys alternative contention. First, it seems quite clear that the argument and judgments in the Court of Appeal proceeded on the basis that it was not part of Mr Paulleys case, as seems to have been accepted on his behalf. On the other hand, the case was advanced much more broadly before the Recorder, because, as I have explained, a number of possible adjustments were put forward on the basis that they were alternatives or cumulative. Nonetheless, because of the position adopted on behalf of Mr Paulley in the Court of Appeal, it can be said to be rather unsatisfactory for this Court to consider whether FirstGroup should have made an adjustment to its PCP which was less extreme than that found by the Recorder. The second problem arises from the fact that, in order for Mr Paulley to succeed in his claim, he must not only establish that FirstGroup should have made an adjustment to its PCP, but also that, had that adjustment been made, there is at least a real prospect that it would have made a difference. (It is right to say that decisions of the Employment Appeal Tribunal express the real prospect test slightly differently (compare Lancaster v TBWA Manchester UKEAT/0460/10/DA, para 46 and Leeds Teaching Hospital NHS v Foster UKEAT/052/10, para 17). However, the precise formulation of the test is not relevant for present purposes. The essential point is that there is no finding by the Recorder that, if FirstGroup had phrased the Notice more peremptorily and/or required its drivers to be more forceful, this requirement would have been satisfied, given that there would have been no question of actual enforcement. In particular, as Lord Toulson points out in para 85 below, there has been no formal appeal and no written or oral argument against the finding that the woman occupying the space refused to move after saying that her pushchair did not fold down. There is therefore no satisfactory basis upon which this Court can, in fairness to FirstGroup, conclude that there would have been a real prospect that such an adjustment to its PCP would have resulted in Mr Paulley not being placed in the disadvantage that he was. In my judgment, the solution which enables this Court both to be procedurally fair to the parties and to provide as much guidance as possible in this important field, is to decide whether the alternative contention should, on the evidence given to the Recorder and findings made by him, succeed but, in the event of our so deciding not to award Mr Paulley any damages. The evidence and arguments in relation to the alternative contention were advanced before the Recorder, and, by accepting Mr Paulleys more extreme primary contention, it is very likely that he must or would have decided to reject FirstGroups arguments against the alternative. Although the alternative contention was not advanced in the Court of Appeal, we have the benefit of some valuable thoughts on it from Underhill and Arden LJJ. Accordingly, the fact that a case based on the alternative contention was not run in the Court of Appeal should not be fatal to Mr Paulleys ability to run it before this Court. On the other hand, to award Mr Paulley any damages in the event of this Court accepting the alternative contention would be unwarranted as the Recorder made no finding as to whether he would have been disadvantaged had the PCP been adjusted accordingly. (The first instance finding that Mr Paulley was disadvantaged was based on the Recorders view as to what FirstGroups policy should have been, which, for the reasons which I have attempted to give, was too prescriptive.) It is true that this approach would make any finding as to the alternative contention somewhat hypothetical, and indeed arguably obiter, but that should not, in my opinion, stand in the way of our addressing it. A policy of require and pressurise: discussion Turning then to the substance of Mr Paulleys alternative contention, it has two components. The first is that the Notice should have been more strongly expressed and that it should have stated that the obligation to vacate the space, if needed by a wheelchair user, would be enforced. The second component is that FirstGroups bus drivers should have been required to do more than simply ask a non wheelchair user occupying the space to vacate if it was needed by a wheelchair user, in particular they should positively have expressed themselves as requiring the non wheelchair user to vacate the space and/or they should have refused to drive on until she did so. As mentioned above, the space in the Bus contained a wheelchair sign, as specifically required by the Accessibility Regulations, and it also contained the Notice when no such notice was specifically required by those (or any other) Regulations (see paras 3 and 12 above). I do not consider that FirstGroup can be criticised for not expressing the Notice in more peremptory terms. In disagreement with the Recorder, it seems to me that, albeit politely, the Notice did require, rather than merely request, a non wheelchair user to vacate the space if it was needed by a wheelchair user. Without the word Please it was a requirement, and the addition of the word Please at best makes it more polite and at worst softens the requirement. Secondly, there is no reason to doubt the evidence of Mr Birtwhistle, FirstGroups manager, who said that the company had been advised that directive notices were a less effective means of communication with the public than more customer friendly and non confrontational notices. (It is right to mention that there was evidence that some other bus companies used more peremptory notices, but there was no evidence to suggest that they were more effective). Thirdly, while I would not endorse it as a principle applicable in all cases, Underhill LJs statement at para 68 of his judgment that [l]egal liability ought not to depend on whether an employer has chosen to use specially emphatic language in expressing his policy has real force in relation to criticisms of the way the Notice was expressed. If finding a more peremptory, persuasive or firmly worded notice in another companys buses was enough to undermine the reasonableness of the notice in this case, it could, as a matter of logic, lead to an absurd state of affairs the fact that another bus company used more aggressive language, a larger sign, bolder print, or more exclamation marks could presumably all be relied on. And it is worth remembering that we are concerned with the question whether FirstGroups PCP makes reasonable adjustments, and, as is made clear by the Code of Practice, that involves taking practicality into account. The Recorder also thought that the Notice should have made it clear that the priority of wheelchair users over the space would be enforced. While that view has its attractions, I am ultimately not convinced by it. First, having rejected Mr Paulleys primary case (unlike the Recorder), I am unenthusiastic about the notion of a court requiring a party to put up a notice containing a statement which would not be true and it would not be true once one rejects Mr Paulleys primary case. Secondly, as I have already indicated, in the light of Mr Birtwhistles evidence as to what constituted effective notices, and in the absence of any evidence to the contrary, I would not be prepared to hold that FirstGroup was in breach of its duty to make reasonable adjustments by failing to express the Notice more aggressively. Thirdly, there is the point made by Underhill LJ quoted at the end of para 36 above. I turn finally to the contention that FirstGroup drivers should have been instructed to do more than simply request non wheelchair occupiers to move from a space when it was needed by a wheelchair user. On this aspect, it seems to me that there is obvious force in the concerns, expressed by Underhill LJ in the second passage quoted from his judgment in para 36 above, about the difficulties of identifying any policy given the fact that the circumstances of the non wheelchair user and the character of the driver could be very different in different cases. Nonetheless, I have concluded that it was not enough for FirstGroup to instruct its drivers simply to request non wheelchair users to vacate the space, and do nothing further if the request was rejected. I accept that allowance must be made for the fact that there will be a variety of different circumstances in which a non wheelchair user refuses to vacate a space which is needed by a wheelchair user. Thus, the appropriate approach of the driver could depend on (i) the reason for the refusal, including, in particular, the needs of the non wheelchair user; (ii) the surrounding circumstances, including whether the bus is full or has vacant places, whether the bus is on time, and the frequency of the service; and (possibly) (iii) the character of the driver. However, in para 68 of his judgment, Underhill LJ was in my view right in describing as good practice, a policy to encourage drivers to go as far as they thought appropriate in the circumstances in legal language, use their best endeavours to induce the recalcitrant passenger to reconsider his or her initial refusal. A driver may form the view that a non wheelchair user is reasonable in refusing to move from the space. If the driver considers that that is so, or even probably so, then it would not, at least normally, be unreasonable for any request to move not to be taken further. However, where the driver concludes that the non wheelchair users refusal is unreasonable, it seems to me that it would be unjustifiable for a bus operating company to have a policy which does not require some further step of the bus driver in any circumstances. In particular, where there is some other place on the bus to which a non wheelchair user could move, I cannot see why a driver should not be expected to rephrase any polite request as a requirement, and, if that does not work and especially if the bus is ahead of schedule, why the driver should not be expected to consider whether there was any reason why the bus should not stop for a few minutes with a view to pressurising or shaming the recalcitrant non wheelchair user to move. Because circumstances can vary so much, and because judges should plainly not impose a policy which is not practicable, I consider that this is as far as any adjustment required by this Court to be made to FirstGroups PCP could be expected to go (at least in the light of the evidence given at trial, the Recorders findings and the arguments we have heard). It may well be, as Underhill LJ went on to say, that, at least in many cases, there is in reality no very deep gulf between a policy so expressed and one, like FirstGroups, which does not in terms go further than saying that the passenger should be asked to move. However, in my opinion, there will undoubtedly be cases where the sort of good practice which he suggested, and which I have attempted to summarise in para 67 above, could be expected to produce positive results whereas FirstGroups current, more pallid, policy would not do so. When a non wheelchair user is unreasonably refusing to move from the space, there are vacant places on the bus, (and the bus is ahead of schedule) a more forceful repetition of an initial unsuccessful request in the form of a requirement (coupled with a refusal to drive on for several minutes) may well persuade the unreasonable non wheelchair user to vacate the space. The very fact that, under FirstGroups current PCP (set out in para 8 above), drivers were expected to request a non wheelchair user to vacate a space needed by a wheelchair user, at least if there is a place for the non wheelchair user to move to on the bus, demonstrates that drivers can be expected to show a degree of initiative and to see whether or not there are spare places on the bus. I therefore find it hard to see how it could be unreasonable to expect FirstGroup to train its drivers to do a bit more, when appropriate, if and when an initial request is not complied with. I also agree with Lord Toulson that this conclusion is supported by para 12(2) and (3) of the Conduct Regulations (set out in para 18 above), which show that those responsible for those Regulations did not consider it unreasonable to decide whether a non wheelchair user could readily and reasonably vacate a space and mov[e] to another part of the vehicle. Such a conclusion seems to me to be consistent with what Underhill LJ hope[d] and expect[ed] in the first passage quoted in para 36 above, and what Arden LJ considered that FirstGroup should do in the passage quoted in para 37 above. Conclusion Since preparing the first draft of this judgment, I have had the opportunity of reading in draft the judgments of Lady Hale, Lord Kerr, Lord Clarke, Lord Sumption and Lord Toulson. I agree with what Lord Toulson says in his concise judgment, as to the reasons for allowing this appeal, as to the interpretation of the Recorders judgment, and as to the advisability of reconsidering the state of the law in this area. I think that Lord Kerr and I have arrived at the same view as to what the driver should be expected to do under a policy which complies with a bus companys equality duty. In that connection, I would refer to the fourth and fifth sentences of para 129 and para 133 of his judgment and paras 66 and 67 above. However, we disagree about the notice (compare his para 122 with paras 63 64 above). Lady Hale (with whom Lord Clarke also agrees) prefers to limit any decision to saying whether FirstGroups PCP could have done more see the end of paras 101 and 108 of her judgment. As to that, I accept that we could decide this appeal without expressing a view as to how much further FirstGroups PCP should have gone for instance, without deciding whether a requirement to move would have to be physically enforced. However, that would, in my opinion, be regrettable. Merely to decide that FirstGroups PCP fails to satisfy the requirements of the 2010 Act would leave bus companies in a state of real uncertainty as to their equality duties in connection with wheelchair users. It is inevitable that any decision we reach will result in some grey areas, but it is one of the principal functions of this Court to clarify the law, and therefore to keep the grey areas as few and as small as possible. As to Lord Sumptions judgment, I agree with him that, at least as a general rule, the law should not normally seek to sanction or otherwise deal with lawful but inconsiderate behaviour, and, similarly, it should not normally enforce basic standards of decency and courtesy. However, we are here concerned with a statute whose purpose is to ensure, within limits, that behaviour is curbed when it results in discrimination under section 29 of the Equality Act 2010. Accordingly, while it is essential that any judicial decision in this area seeks to take into account the realities of life and the interests of others, judges have to do their best to give effect to that purpose, even if it may involve a degree of departure from the general rule. Accordingly, I would allow this appeal to the limited extent explained in paras 66 68 above, albeit on a point which was expressly not pursued in the Court of Appeal. LORD TOULSON: (with whom Lord Reed agrees) The majority of the Court of Appeal held that the respondent bus company applied a provision, criterion or practice (PCP), within the meaning of section 20(3) of the Equality Act 2010, that wheelchair users could use the wheelchair space on its buses on a first come first served basis, and that this PCP put wheelchair users at a substantial disadvantage compared with able bodied passengers. There is no appeal against those findings. The issue is whether there were reasonable steps which the bus company could have taken to avoid or ameliorate the disadvantage. With effect from 1 October 2002, regulation 12(2) of the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990, (SI 1990/1020) as amended by SI 2002/1724, provided that: If there is an unoccupied wheelchair space on the vehicle, a driver and a conductor shall allow a wheelchair user to board if (a) the wheelchair is of a type and size that can be correctly and safely located in that wheelchair space, and (b) in so doing, neither the maximum seating nor standing capacity of the vehicle would be exceeded. Regulation 12(3) defined a wheelchair space as being occupied if there is a wheelchair user in that space; or (a) (b) passengers or their effects are in that space and they or their effects cannot readily and reasonably vacate it by moving to another part of the vehicle. It follows from the fact that the obligation under regulation 12(2) was imposed on drivers (and conductors), and from the wording of the regulation, that drivers could have to decide whether a passenger who was using a wheelchair space could readily and reasonably vacate it by moving to another part of the vehicle, and this was obviously not considered to be an unreasonable thing for drivers to be expected to do. It should also be noted that a non wheelchair user who was using a wheelchair space was not expected to have to vacate the bus, but rather to move to another part of the vehicle if that was readily and reasonably possible. Regulation 12(4) required the driver to ensure before the vehicle was driven that any wheelchair was correctly and safely positioned in a wheelchair space. There is therefore an apparent tension in the regulation, because regulation 12(2) requires the driver to permit a wheelchair user to board if there is an unoccupied wheelchair space, which includes a space physically occupied by a person who could readily and reasonably move elsewhere, but for as long as that person remains in the wheelchair space the vehicle must not be driven. Where the space is taken by someone who could readily and reasonably vacate it by moving to another part of the bus, the driver could properly say to that person that he, the driver, is required by law to allow the wheelchair user to occupy the space and that for this to happen that person must move. But there is a possibility that he may be ignored. I would in such circumstances interpret the obligation under regulation 12(2) as an obligation on the driver to do as much as he practically can to enable a wheelchair user to occupy the wheelchair space, unless it is already occupied within the meaning of regulation 12(3), but if that task proves impossible he is not required to do more. The Recorder accepted the claimants argument that the bus company could reasonably have adopted a policy of requiring other passengers to allow the wheelchair space to be used by a wheelchair user, even if it meant requiring the other passenger(s) to get off the bus. It is right that I should explain why I interpret the Recorders judgment in that way, since there appears to be some difference of opinion among the members of the court on the point. After setting out the various forms of adjustment pleaded in the claimants particulars of claim, the Recorder said at para 15 that: the most comprehensive adjustment alleged by the claimant was that it should be made clear to other passengers that the wheelchair space is for wheelchair users and that they will be required [underlined] to vacate the space if needed. Once such a practice was put into effect with a proper system of notices, warnings and, if necessary, advertising then the culture will have changed and no non disabled passenger who wished to occupy the space could be under any illusion that if there was competition for such a space with a wheelchair user, then they would either have to vacate the space by, for example, folding a buggy and sitting elsewhere, or by leaving the bus and taking the next bus available. At para 21 the Recorder said that the practice suggested by the claimant was a reasonable one. I infer that the Recorder had in mind that the suggested practice was intended to apply even if it meant requiring other passengers to get off, because this was part of the claimants case and the Recorder referred, at para 17, to counsel for the bus company asking rhetorically whether we want a culture in which a parent with a child is removed from the bus to allow access for a wheelchair user. However, more importantly than debating what precisely the Recorder meant in his full and careful judgment, the case has raised points on which those who are affected need a clear ruling from this Court. They include not only the question whether the bus company should reasonably have adopted a general practice of requiring other passengers to allow the wheelchair space to be occupied by a wheelchair user, but also the question whether that should apply even if it would mean requiring the other passenger(s) to get off the bus. On the latter point, I agree with the Court of Appeal that the Recorder went too far. The risk that a bus may be fully occupied when it arrives at a bus stop is one shared by all travellers. The risk may be greater for wheelchair users because there is likely to be only one wheelchair space, but if that space is occupied within the meaning of regulation 12(3) of the Conduct Regulations, I do not see that it would be reasonable to require the occupier to leave the bus midway through their journey. By definition we are talking about someone who is already lawfully on the bus and who cannot readily and reasonably vacate [the wheelchair space] by moving to another part of the bus. Moreover the person may also have protected characteristics, such as having a disability requiring the use of a walking frame or being a child. As Lady Hale has demonstrated, 90% of people with disabilities do not use wheelchairs, and the evidence is that over half of those with disabilities have mobility problems, no doubt of varying severity. Age is another protected characteristic, and there would be obvious objections to a policy which entailed telling a child that he or she was required to get off the bus, even more so if it were at an unfamiliar or unsafe location or after dark or for a lengthy or uncertain period of time. Illustrations of passengers with particularly cogent reasons to object to being told that they were required to leave the bus could readily be multiplied. If the law in this difficult and sensitive area becomes the subject of further Parliamentary consideration (to which I refer at the end of this judgment), there would doubtless be considerable argument about striking a fair balance. The situation is different if the space is occupied by somebody who could readily and reasonably vacate it but refuses to do so. There is a preliminary objection that a bus driver cannot reasonably be expected to judge whether a person could readily and reasonably vacate the space, but I do not regard that as a point of substance. It is easy to make it sound complicated, but realistically it should not be difficult to tell whether there is another part of the bus which the person could readily and reasonably use. The drafter of regulation 12(2) and (3) must have presupposed that this would not be too much for a bus driver or conductor, and the bus companys own policy, set out by Lord Neuberger at para 8, expected the driver to be able to tell if other space on the bus was available for a non wheelchair user who was occupying the wheelchair area (If this is occupied with a buggy, standing passengers or otherwise full, and there is space elsewhere on the vehicle, the driver will ask that it is made free for a wheelchair user). It is a matter of looking. I agree with Lord Neuberger that there are reasonable steps which a bus company could take beyond simply asking the occupant to move. The driver could make it plain that it is a requirement and I do not see that it would be misleading or wrong for him to do so. For one thing, if the place is taken by someone who could readily and reasonably vacate it by moving to another available space, the object of the duty placed on the driver by regulation 12(2) and (3) is to enable the wheelchair user to occupy it and in those circumstances it must be at least open to the bus company to stipulate that the non wheelchair user who could readily and reasonably vacate it should do so. But in any event I am not aware of a legal principle which prevents a service provider from adopting a requirement just because securing compliance with it will or may depend on moral pressure. Unless the bus is running late, the driver could also wait at least for a time for the passenger to comply. The policy might not succeed in every case, and in that event the driver might have no practical alternative to refusing to allow the wheelchair user to remain on the bus, but the fact that the policy might not work in every case does not make it valueless. The concept of reasonable adjustments under section 29(7) of the Equality Act 2010 is intensely practical. Much human behaviour is governed by expectation and convention rather than legal enforcement. Although this was not the primary case advanced by the claimant on this appeal, it is within it. His lengthy printed case included, for example, the contention (at para 163) that the Court of Appeal was wrong to reject the submission that even a policy of request plus some attempt at further persuasion or pressure would have been better than what happened. In the present case there was no finding of fact by the Recorder whether the lady with the child in a buggy could reasonably and readily have vacated the wheelchair space. Lewison LJ said in his account of the facts that the driver asked her to move and to fold down her pushchair so that the claimant could use the space, but that she said that her pushchair did not fold down and refused to move. There was no appeal against that finding. Because it was not an issue in the appeal, the court heard no argument whether Lewison LJs account was correct or incorrect, but I note that it was consistent with the claimants own witness statement. It would not be right in these circumstances for this Court to substitute a contrary finding, and I do not consider that the case merits being remitted to the judge for further consideration. It follows that the award of damages in favour of the claimant cannot be sustained, but, like Lord Neuberger, I would allow the appeal to the extent of holding that the bus company ought to have adopted a policy of training its staff to make clear, in circumstances where a wheelchair user wanted to board the bus but the wheelchair space was occupied by somebody who could reasonably and readily move to another part of the bus, that the person occupying it must do so. For those reasons as well as the reasons given by Lord Neuberger, I agree with his judgment. By way of postscript, the Court of Appeal made critical comments about the present state of the law in this area. The divisions of opinion in this Court may be thought to reinforce the desirability of it receiving fresh legislative consideration. LORD SUMPTION: If a wheelchair user wishes to occupy the designated wheelchair space on a bus, basic decency and courtesy require the non wheelchair user occupying it to move, unless he or she has a very good reason not to do so. But the law cannot enforce basic decency and courtesy, save insofar as they correspond to legal standards of behaviour. The difficulty in this case is that the Conduct Regulations deal with the obligations of passengers at paras 5 and 6, without imposing any obligation on them to vacate the wheelchair space when it is required by a wheelchair user. FirstGroup cannot create such an obligation of passengers by the terms of their published wheelchair policy. I agree with Lord Neuberger that in those circumstances it would be wrong to expect the bus company to rephrase the notice at the designated wheelchair space so as to suggest that a non wheelchair user was required to move. It would simply not be true. The difficulty is that the same objection might be said to apply to Lord Neubergers view that the drivers polite request having been rejected, he should rephrase it as a requirement. That would not be true either. One solution to the problem might be for FirstGroup to change their conditions of carriage so as to require a non wheelchair user to move to another part of the bus if there is space, or to get off the bus if there is not. They would then have a contractual right to enforce a requirement by the driver to move. The difficulties about this solution are (i) that it will not in all cases be reasonable to require the non wheelchair user to vacate the wheelchair space, even if there is space elsewhere on the bus; (ii) it would not in my view be reasonable in any case to require him or her to get off the bus if there is no space elsewhere; and (iii) a change in the conditions of carriage which were subject to a test of reasonableness in each case would simply give rise to argument with the more recalcitrant non wheelchair users, without being enforceable at the only point of time when enforcement would of be any use to wheelchair users. I see the force of the argument that bus companies can reasonably expect their drivers not just to ask the non wheelchair user to move but to do their best to persuade him or her to do so unless he has good reason to stay or it is clear that persuasion will be unavailing. The difficulties, as it seems to me, are (i) that if this is to be turned into a legally required policy, it is necessary to specify what, as a minimum, a driver ought to do; and (ii) that any alternative guidance must be in terms which are capable of practical application and reasonably likely to be effective in a bus full of people at the roadside. This is a sensitive area in which the circumstances may be infinitely varied and techniques of persuasion are not susceptible to detailed legal prescription. The ideal solution, if there is one, would be to change the law so as to create an obligation on the part of non wheelchair users, enforceable in the same way as the rule against anti social behaviour, to move unless the driver reasonably considers that they have a sufficient reason not to do so. In the absence of such a change, we must recognise that there are limits to what law can achieve in amending lawful but inconsiderate behaviour. Fortunately, the evidence suggests that the present problem rarely arises. For these reasons, I confess that I have misgivings about aspects of the reasoning of Lord Neuberger and Lord Toulson, which would impose on drivers a duty to require the non wheelchair user to move and in some cases to stop the bus for a few minutes, thereby inconveniencing every other passenger in order to shame the non wheelchair user into doing something that the law does not require him to do. But this is not a case in which it would be right to dissent. In a situation where there is no ideal solution, but only more or less unsatisfactory ones, I think that the approach of Lord Neuberger and Lord Toulson comes as close to giving effect to the policy of this legislation as a court legitimately can. I therefore agree with their proposed disposition of this difficult appeal. In particular I agree with them that once one rejects, as I fear one must, the more abrasive policy required by the Recorder, there are no findings which could justify an award of damages. LADY HALE: (dissenting in part) The ability to travel and to get about is important to all of us. Without it we cannot get to work, do the shopping, visit family and friends or places of entertainment, in short be part of the community. Difficulties with transport are one of the two most common barriers to work for people with impairments. Of the 12m disabled people in the United Kingdom, one tenth, that is 1.2m people, are wheelchair users and more than a quarter of these are under the age of 60 (Papworth Trust, Disability in the United Kingdom 2014, Facts and figures). It scarcely needs stating that they face particular difficulties in getting about and thus playing as full a part as they can in the life of the community. Without the ability to travel they risk becoming socially isolated and losing confidence in themselves. But their journeys need even greater planning than do those of people who are not wheelchair users: will I be able to get to the bus stop, will I be able to get on the bus, when will the bus go, will I be able to get from the bus to the train station, will I be able to get on the train, when will the train go, will I be able to get to my destination at the other end? Time was when the law did nothing to help. But then along came the Disability Discrimination Act 1995. This not only prohibited direct and indirect discrimination against disabled people; it also imposed duties upon the providers of employment, accommodation, goods and services, in certain circumstances, to make reasonable adjustments to cater for the needs of disabled people. The object, as has been said time and again, is to level the playing field, to lower the barriers which prevent disabled people having access to employment, accommodation, goods and services on the same terms as non disabled people. It is to produce equality of results rather than equality of treatment (see, for example, MM v Secretary of State for Work and Pensions [2013] EWCA Civ 1565; [2014] 1 WLR 1716, para 35, citing Archibald v Fife Council [2004] UKHL 32; [2004] ICR 954, paras 47, 57, and Roads v Central Trains Ltd (2004) 104 Con LR 62, para 30). However, the general duty to make reasonable adjustments, imposed upon the providers of services by section 21 of the 1995 Act, did not apply to any service so far as it consists of the use of any means of transport (section 19(5)(b)). Instead, Part V of the Act dealt with public transport and empowered the Secretary of State to make regulations for the purpose of securing that it is possible for disabled persons (a) to get on to and off regulated public service vehicles in safety and without unreasonable difficulty (and, in the case of disabled persons in wheelchairs, to do so while remaining in their wheelchairs); and (b) to be carried in such vehicles in safety and in reasonable comfort (section 40(1); now replaced by the Equality Act 2010, section 174). It was pursuant to that and related powers that the Secretary of State made the Public Service Vehicles Accessibility Regulations 2000, which are still in force. These impose detailed and technical requirements for the provision of access to, and wheelchair spaces and priority seating in, buses and coaches. This was a big advance, making public transport much more accessible than it had been before. The Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 (SI 1990/1020) were made under powers contained in the Public Passenger Vehicles Act 1981. In 2002, they were strengthened to impose specific duties to allow access by disabled people, and in particular by those accompanied by guide dogs and for wheelchair users. Thus, drivers, inspectors and conductors are prohibited from preventing a disabled person accompanied by an assistance, guide or hearing dog being allowed to board and travel in the vehicle with his dog, subject to there being a suitable space available (regulation 5(7)); likewise, drivers and conductors are required to allow a wheelchair user to board if there is an unoccupied wheelchair space on the vehicle and to ensure that wheelchair users can gain access into and get out of a wheelchair space (regulation 12(2), (4)); a wheelchair space is occupied if (a) there is a wheelchair user in that space; or (b) passengers or their effects are in that space and they or their effects cannot readily and reasonably vacate it by moving to another part of the vehicle (regulation 12(3)). The regulations already imposed upon drivers, inspectors and conductors a duty to take all reasonable steps to ensure that the regulations relating to the conduct of passengers are complied with (regulation 5(2)); and prohibited passengers, among many other things, from putting at risk or unreasonably impeding or causing discomfort to any person travelling on or entering or leaving the vehicle (regulation 6(1)(b)). Any passenger who is reasonably suspected of contravening any of the regulations is required to give his name and address to the driver, inspector or conductor on demand (regulation 8(1)); and any passenger who actually contravenes the regulations may be removed from the vehicle by the driver, inspector or conductor, or, at their request, by a police constable (regulation 8(2)). Contravention of the regulations, whether by drivers, inspectors or conductors or by passengers, is a summary offence punishable by a fine, but it is a defence to prove a reasonable excuse for the act or omission in question (1981 Act, sections 24(2), 25(3) and 68(1)). Parliament must have considered that the 2000 and amended 1990 Regulations were not sufficient to enable disabled passengers to enjoy the same access to public transport as is enjoyed by non disabled passengers, because Parliament next passed the Disability Discrimination Act 2005. Section 5 of that Act added a new section 21ZA to the Disability Discrimination Act 1995, providing for the application of sections 19 to 21 of that Act in modified form to providers of transport services. Where such a provider had a policy, practice or procedure which made it impossible or unreasonably difficult for disabled persons to make use of a service which he provided to other members of the public, it was his duty to take such steps as is reasonable in all the circumstances of the case for him to have to take in order to change that practice, policy or procedure so that it no longer has that effect. The duty of service providers to make reasonable adjustments to cater for the needs of disabled people is now contained in the Equality Act 2010. The duty is imposed by paragraph 2(1) of Schedule 2, which requires the provider to comply with the first, second and third requirements in section 20, as modified by paragraph 2. Relevant in this case is the first (in section 20(3)): The first requirement is a requirement, where a provision, criterion or practice of As puts disabled persons generally at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage. Failure to comply with this (or the other two requirements) is a failure to comply with a duty to make reasonable adjustments (section 21(1)); and A discriminates against a disabled person if A fails to comply with that duty in relation to that person (section 21(2)). As has been pointed out, this is a prospective duty, owed to disabled persons generally, to take proactive steps to meet their needs, and if an individual suffers as a result, then it is discrimination against him. Three general points can be made about the legislative framework which is now in place. The first is that mere compliance with the earlier regulations, both as to the provision of the wheelchair space and affording access to it, is not necessarily enough. Parliament must have contemplated, in passing the 2005 Act, that other adjustments to business as usual might be needed in order to reduce the difficulties faced by disabled people in using public transport services. The second is that, as the Recorder pointed out, there is an enormous difference between imposing a criminal sanction upon a driver and the obligation upon a service provider not to discriminate by a failure to take reasonable steps to adjust a present policy which is having the effect of substantially disadvantaging a disabled person (para 18). The third, and most obvious, is that service providers owe positive duties towards disabled people, including wheelchair users, which they do not owe to other members of the travelling public, including parents travelling with small children in baby buggies or other people travelling with bulky luggage. The Court of Appeal, in my view, fell into the trap of assuming that the claims of disabled travellers were no different from the claims of any other person wishing to use the buses. They are not. Disabled people are, for very good reasons, a special case. It is now not in dispute that the respondent had a provision, criterion or practice which put wheelchair users at a substantial disadvantage when compared with non disabled passengers. This was their policy of making the wheelchair space provided on their buses available on a first come, first served basis and doing no more than request occupants to vacate the space if it was required by a wheelchair using passenger. At the time of the incident in question, the policy was that wheelchair users had no priority over buggies and this infected both the content of the notices and the approach to enforcement. The issue agreed between the parties for the purpose of this appeal is a simple one: Was the Recorder correct in concluding that FirstGroup was in breach of the 2010 Act? The Recorder concluded that FirstGroup could reasonably be expected to adjust its policy. It should have been made clear to passengers, and to their drivers, that wheelchair users had priority over anyone else in the occupation of the wheelchair space and that other passengers would be required, not merely requested, to move out of it if a wheelchair user needed it. With a proper system of notices, making the position plain, backed up with firm statements from the driver, everyone would know where they stood. The culture would change. Disruption and confrontation would be unlikely. It is obviously reasonable to expect bus operators to do more than FirstGroup did in this case. One only has to travel on a London bus to find a different policy in operation. The notice carried on London buses has two boxes side by side. The left hand one is headed Buggy users and below this Please make space for wheelchair users. Below this there is another heading: Priority wheelchair area and below this, This space is reserved for a wheelchair when needed. It goes on to explain how the wheelchair must be placed and ends Please give up this space for a wheelchair. Alongside this is another panel, headed Baby buggies. This reads Buggies can use this area if it is not needed by a wheelchair user. Please move out of the wheelchair priority area if necessary. Buggies may need to be folded at busy times. This may not go quite as far as the Recorder contemplated, but it is clear, polite and firm and a great improvement on the Please give up this space for a wheelchair sign adopted by the respondent. Three sorts of objection have been raised to the Recorders conclusion. One is that management had undertaken a review of the way in which the company communicated with its passengers. They had been told that they were being too directive so the approach was changed to one which was more customer friendly. The sign was intended to be non confrontational (para 7 of the Recorders judgment). But that was merely the explanation given by the company for the current sign. The evidence of Mr Birtwhistle, for the company, was that there was no reason why the signs which were in the form of a request could not be worded differently so as to make it clear to all passengers that wheelchair users not only had such priority but that that such priority would be enforced (para 19 of the Recorders judgment). So he clearly did not consider the non confrontational practice to be an objection. In any event, it is usually possible to be polite as well as clear and firm. And if clarity and firmness cannot be achieved without a more peremptory tone, then it is reasonable to expect a more peremptory tone. The point has to be got across that other people are required to vacate the wheelchair space if it is needed by a wheelchair user. The second sort of objection is that there will be some circumstances in which it is not reasonable to expect an existing occupier to vacate the wheelchair space. This is so, although it is important to bear in mind that non disabled people are not entitled to be treated in the same way as disabled people. There is no duty to make reasonable adjustments for them. There may be circumstances in which that duty, coming as it does after the Conduct Regulations, could go beyond what is required by regulation 12(2) and (3). However, the adjustments to be expected for disabled people must be reasonable ones, and there will obviously be circumstances in which it is not reasonable to expect the space to be vacated. There is nothing in the Recorders judgment to suggest that he was expecting an absolute rule of the sort that would brook no exceptions. This may well be because this sort of objection was not raised before him, although it featured heavily in the Court of Appeal. As already mentioned, the Recorder drew a clear distinction between the criminal liability of drivers under the Regulations and the providers duty to make reasonable adjustments. The third sort of objection rests on the fact that the service provider is being expected to make adjustments which will bring about change in other peoples behaviour. Hence a great deal of argument was directed towards how a priority policy might be enforced against recalcitrant passengers. In my view this is something of a red herring. Most people do what they are told to do if they are told sufficiently clearly what it is that they are required to do. The possibility that some people will be disobedient should not deter the bus company from making it clear what the rules are and doing its best to persuade people to obey. There are many steps short of physically removing the person from the bus which can be taken, including delaying the departure of the bus until the rule is obeyed (which I have observed being highly effective against rowdy behaviour on an underground train). I do not read the Recorders references to enforcement as necessarily involving forcible ejection from the space or the bus. In any event, it is highly arguable that to refuse, without a reasonable excuse, to move from a wheelchair space required by a wheelchair user is to unreasonably impede any person travelling on or entering or leaving the vehicle within the meaning of regulation 6(1)(b). It is also difficult to see why the Recorder was wrong to say that the company could make the requirement to leave the space a term of its conditions of carriage, in breach of which a passenger could be required to leave the bus. This is no more unreasonable than requiring passengers to refrain from eating messy or smelly foods or drinking alcohol. Drivers are frequently required to make judgments of this kind and do their best to enforce them. These points do not have to be decided for the purpose of deciding this case, but I agree with what Lord Kerr says about them in paras 123 to 128 of his judgment. This case is about whether there were adjustments which the company could have made which would have enabled Mr Paulley to board this bus. There clearly were. Furthermore, in the Recorders judgment there is little doubt that had the practice suggested by the claimant been in force on 24 February 2012 then Mr Paulley would have been able to travel rather than having to leave the bus and wait until the next bus was due to leave the Wetherby bus station (para 21). In my view, therefore, the answer to the single issue agreed between the parties (para 101 above) is yes: the Recorder was correct to conclude that FirstGroup was in breach of the 2010 Act. That being so, I have difficulty in understanding how it can possibly be just to deprive Mr Paulley of the damages which the Recorder awarded him. A variety of adjustments were canvassed before the Recorder and I agree with Lord Kerr (para 133) that his judgment did not partake of the absolute quality which the Court of Appeal thought that it did. Even if it did, it should have been open to Mr Paulley to argue that lesser adjustments were appropriate. He did not need to put in a respondents notice in order to do so. And the sole issue for this Court is not whether the Recorder was correct in every particular, although I am inclined to think that he was, but whether he was correct to find that FirstGroup was in breach. The view of this Court is that FirstGroup was in breach. In agreement with Lord Kerr, therefore, I would allow the appeal and restore the order which the Recorder made. LORD KERR: (dissenting in part) It is now not in dispute that FirstGroup, in making wheelchair spaces on their buses available on a first come first served basis, applied a provision, criterion or practice (PCP) which placed wheelchair users at a substantial disadvantage. This appeal therefore centres on the question of what reasonable adjustments were required to modify the PCP. The Recorder considered that two types of adjustment to deal with the deficiencies in the PCP were entirely feasible. First, the notice on the respondents buses could be changed to make it clear that a non disabled passenger was obliged to move from a wheelchair space if it was needed by a wheelchair user. Secondly, passengers who failed to vacate the space when asked to do so, could be asked to leave the bus. The Court of Appeal considered that these went further than was reasonable. Lord Neuberger and Lord Toulson agree. Unlike the Court of Appeal, however, they consider that adjustments which can properly be described as reasonable could be made to the respondents PCP. These adjustments are quite different from those deemed by the Recorder to be reasonable. The reasons that the Court of Appeal considered that the adjustments proposed by the Recorder went beyond what was reasonable have been set out by Lord Neuberger in paras 34 to 39. In short summary, these are: (a) that it would be objectionable to require people to vacate the space whose refusal to do so was reasonable; (b) that it was impracticable to expect the driver to decide whether a passenger was being unreasonable in refusing to move; (c) that it was not feasible to expect a driver to remove such a person or wait for police to arrive and, in any event, police could not enforce the adjusted policy because someone who refused a direction to move would not have committed a criminal offence; and (d) that a more prescriptive notice on the bus was not realistic in light of research which suggested that better results would be achieved by a more customer friendly message. Lord Neuberger takes the view that what he describes as an absolute rule of requiring a non wheelchair user to vacate the wheelchair space and, in the event of non compliance, ejecting the passenger from the space must be rejected (paras 40 and 41). He accepts that establishing an absolute rule is not necessarily inconsistent with a wheelchair users rights under the Equality Act 2010 (para 41). But he concludes that the enforcement of an absolute rule would not be reasonable in all conceivable circumstances. So, for instance, a person who was disabled but who did not require the use of a wheelchair might reasonably refuse to move from the wheelchair space. Likewise, a person who felt safe only in that space and who might otherwise be vulnerable could not reasonably be required to leave it. In paras 43 46 Lord Neuberger has examined the possible difficulties in enforcing even a qualified rule. He expresses doubt as to the fairness of requiring a bus driver to assess whether an objection to vacate the wheelchair space is reasonable. Whatever of that, however, Lord Neuberger considers that the clinching argument is that enforcement of a rule that required a passenger to vacate the wheelchair space on the basis of an absolute or a qualified rule would involve unacceptable confrontation and, on that account, could not be regarded as a reasonable adjustment to the PCP. What has been described as an alternative case that might be made on behalf of the appellant (and which was, apparently, advanced before the Recorder) is discussed by Lord Neuberger in paras 49 51. This involved the consideration of a number of potential reasonable adjustments. They included a more peremptory notice on the buses; the driver insisting that a pushchair be folded so as to accommodate the wheelchair; and the driver refusing to continue the journey until the space was vacated. Lord Neuberger has taken the view that consideration of these alternative formulations was beset by two procedural problems. The first was that the Court of Appeal had proceeded on the basis that the appellants case was confined to the absolute argument viz that a non wheelchair user should be required to vacate the wheelchair space and, in the event of non compliance, they should be ejected from the bus. The second procedural difficulty identified by Lord Neuberger was the absence of any finding by the Recorder that, if one of these modified adjustments had been made, there was a real prospect that it would have made a difference. Notwithstanding these procedural problems, Lord Neuberger considers that it is open to this Court to decide whether the alternative case should succeed but, in the event that it does, the appellant should not be awarded damages. He has concluded that it was not enough for the respondent to instruct its drivers to request non wheelchair users to vacate the space and do nothing further if that request was not acted upon (para 59). Various courses of action that a driver might take are adumbrated by Lord Neuberger at para 60. Reasonable adjustments What is a reasonable adjustment must be determined according to the context in which the assessment is made. Here the context is the elimination of discrimination against disabled people. That will require, in appropriate circumstances, able bodied people to accept restrictions that they may find irksome or inconvenient. It will demand of those who police or enforce the adjustments that they be ready to make difficult decisions and that they be prepared to confront and require of those who may not wish to, to suppress selfish inclinations. Moreover, difficulty in enforcement of those restrictions does not automatically determine that they are unreasonable. There is a distinct exhortatory dimension to be recognised in deciding whether an adjustment to assist a disabled person to overcome the disadvantage that she or he has in comparison to an able bodied person is reasonable. A more peremptory notice? On the first issue, viz whether the notice in the bus should have been in more peremptory terms, Lewison LJ in the Court of Appeal said that the Recorder had accepted evidence that the respondents research had shown that the company achieved better results with more customer friendly signage and that negative prescriptive signage produced a worse outcome but that he had failed to reflect this in his assessment of what he considered should be the adjustment to the PCP. What the Recorder said about this evidence is to be found at para 7 of his judgment: The sign on the bus relating to the wheelchair space is couched in terms which are entirely consistent with the first come first served policy. Mr Birtwhistle [the project director of FirstGroup] agreed that it was merely a request to those passengers, other than wheelchair users, who might be using/occupying the wheelchair space to give up the wheelchair space if needed for a wheelchair user. Mr Birtwhistle explained that the reason for the signs being by way of request rather than requirement was that the management had undertaken a review of the way in which the company communicated with its passengers. They had been told that they were being too directive so the approach was changed to one which was more customer friendly. The sign was intended to be non confrontational. Leaving aside the question whether any distinction should be drawn between Lewison LJs description of this work as research rather than review (as the judge described it) a real issue arises as to whether a more customer friendly notice has anything to do with a reasonable adjustment under section 29(7) of the 2010 Act. It may well be the case that customer relations might be improved if a less confrontational sign was erected but this is not a case about fostering good customer relations, at least not unless the better relations would assist in eliminating the discrimination that wheelchair users suffer in using the respondents buses. Lewison LJ said that negative prescriptive signage would produce a worse outcome but it is not clear on what basis this was anticipated. Is it suggested that non disabled customers were less likely to comply with a requirement to vacate the wheelchair space than they would to a request to do so? Such a conclusion is certainly not warranted by the Recorders account of Mr Birtwhistles evidence on the subject. A person is surely more likely to vacate a space if he or she is aware that they will be required to do so rather than if they are merely going to be asked to move. Customers may baulk at direct instructions but they cannot claim that they are entitled to exercise a choice in the matter. A bus company which alerts its passengers that they will have to abide by certain rules if they wish to travel removes the element of choice or the occasion for discussion. This may not be conducive to the best customer relations but it makes it clear that certain rules must be obeyed if the customer is to avail of the companys services. A reasonable adjustment geared to removing discrimination against wheelchair users cannot be discounted simply because a less rigorous policy might promote good customer relations. The question whether a notice which instructs rather than requests passengers to vacate a wheelchair space when it is required by a wheelchair user must be viewed solely in terms of whether this is a reasonable adjustment to make in order to avoid the discrimination that the wheelchair user would otherwise suffer. Viewed in that way, the answer is plain. It is an entirely reasonable adjustment. It removes the element of choice on the part of the passenger occupying the space. They know, and, importantly, know in advance, that they will have to move. Some passengers may not like it but that is not the point. Such a notice, as well as eliminating any scope for debate, constitutes a significant statement which accords precisely with the Governments policy of providing comprehensive and enforceable civil rights for disabled people and achieving a fully accessible public transport system for them see para 19 of Lord Neubergers judgment. Refusing to move unlawful? The Court of Appeal appears to have been influenced to its decision by the consideration that, under the Conduct Regulations (Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 (SI 1990/1020)), it would not be unlawful for a passenger to refuse to obey an instruction to vacate a wheelchair space. I consider that, although passengers are not expressly required to obey every instruction from the driver, a refusal to leave a wheelchair space when instructed to do so in order that it be made available for a wheelchair user would be unlawful. Regulation 12(2) requires the driver to allow a wheelchair user to board the bus if the wheelchair space is unoccupied. Regulation 12(3) provides that the space is deemed to be unoccupied if a passenger, who is not a wheelchair user, occupying the space can readily and reasonably vacate it by moving to another part of the vehicle. In order to comply with his duty under regulation 12(2), the driver will have to make a judgment as to whether a non wheelchair using passenger occupying the wheelchair space can readily and reasonably move, if that person refuses to move. The first step for a driver in deciding whether to permit a wheelchair user to board the bus is to ascertain if the wheelchair space is unoccupied. Because of the deeming provision in regulation 12(3) it is not enough for the driver to discover whether there is someone in that space. He must go further. He has to decide if the person occupying the space can readily and reasonably move from it. If he so concludes, his duty under regulation 12(2) is activated. How, then, is he to comply with that duty if he does not at least direct the passenger deemed to be able to move to do so? Quite apart from the effect of regulation 12, a passenger who is readily and reasonably able to move from a wheelchair space commits an offence under regulation 6(1)(b) if his refusal prevents a wheelchair user from being allowed to board the bus. This regulation prohibits any passenger from unreasonably impeding another passenger from entering a bus. The Court of Appeal was concerned that enforcing regulation 6(1)(b) would require the driver to assess whether the person occupying the wheelchair space was acting unreasonably in refusing to vacate it. But I question whether this is a matter for significant apprehension. Under regulations 6 and 8 a bus driver can be called on to assess whether a passenger is causing discomfort to other passengers, or is causing a nuisance or is in a condition that would be likely to cause offence to a reasonable passenger. All of these are grounds for removal of passengers from buses and the judgment as to whether the conditions justifying such removal must be made, in the first instance at least, by the bus driver. Even if it were the case that to refuse to obey an instruction to move did not amount to a criminal offence, this would not provide the inevitable answer to the question whether it is a reasonable adjustment to a PCP that drivers be required to instruct passengers to do so. As the Recorder observed, this could be made expressly clear by an adjustment to the conditions of carriage. And since it would not involve the driver making assessments which are markedly different from those which he is already required to undertake by virtue of regulations 6 and 8, it cannot be suggested that such an adjustment was other than reasonable. Lewison LJ suggested that it would not be practical for a bus company to sue every passenger who refused to vacate a wheelchair space. I, of course, agree. Nor would it be appropriate for a driver to attempt to manhandle a recalcitrant passenger off the bus see para 50 of Lewison LJs judgment. But these considerations do not detract from the reasonableness of an adjustment to the PCP whereby the driver is at least entitled to say to a passenger, you have to move. If the passenger persists in refusal, the driver may decide not to proceed with the journey. This would of course inconvenience other passengers and it might well lead to unpleasantness but these are not reasons to condemn as unreasonable a change to the PCP which gives drivers the responsibility of pointing out to a passenger obstinately refusing to move that it is the policy of the bus company (and, when the adjustment to them had been made, one of the conditions of carriage) that they must vacate the wheelchair space. Lord Neuberger has stated (in para 46) that what he described as the absolute rule required not only that the passenger be instructed to move but, if he refused, that he be ejected. I do not read the Recorders judgment as requiring that the reasonable adjustment must incorporate the need to eject a passenger refusing to move. In para 13 of his judgment he outlined the various adjustments which the appellant had initially put forward as reasonable modifications that could be made to the companys PCP. None of these suggested that passengers who refused to move would have to be ejected. To the contrary, one suggestion was that the driver should try to persuade the passenger to move; another was that the driver should refuse to continue the journey until the passenger moved from the wheelchair space. These are not consistent with a proposal that the driver be required to eject him. At para 15 the Recorder said that it had become apparent during the hearing that the real adjustment which the appellant sought was a clear practice/policy which not only paid lip service to the giving of priority to the wheelchair user but actually enforced such priority. It has been assumed that the Recorder intended that enforcement in this context connoted ejection but I do not consider that this is correct. What he actually said was: the most comprehensive adjustment alleged by the claimant was that it should be made clear to other passengers that the wheelchair space is for wheelchair users and that they will be required to vacate the space if needed. Once such a practice was put into effect with a proper system of notices, warnings and, if necessary, advertising then the culture will have changed and no non disabled passenger who wished to occupy the space could be under any illusion that if there was a competition for such a space with a wheelchair user, then they would either have to vacate the space by, for example, folding a buggy and sitting elsewhere, or by leaving the bus and taking the next bus available. The extent to which the adoption of such a policy would also require an insistence that pushchairs be folded or that passengers should be asked to fold their buggies before boarding the bus or that drivers should be trained to enable them to better persuade passengers to move from the wheelchair area would be a matter of degree. The most effective adjustment, which would remove the disadvantage occasioned by the competition for the wheelchair space, would require a change in the first come, first served/request approach. (original emphasis) I do not construe the Recorders statement that the able bodied passenger should be under no illusion that he or she would have to sit elsewhere or leave the bus as endorsing a policy of forcible ejection in the face of refusal to move. Ensuring that a passenger was under no illusion as to what was expected of him or her is quite a different matter from physically removing them from the bus against their will if they failed to meet that expectation. Nor do I understand him to have suggested that passengers should in every case be required to vacate the wheelchair space, regardless of whether they were able to do so reasonably. The Recorder articulated a reasonable adjustment designed to cover, among other circumstances, the case of a passenger who occupied a space with what she claimed was a buggy that would not fold. It was never suggested that there was nowhere else on the bus for the passenger to sit. The problem was, if her claim was true, where the buggy should be placed. The necessary inference from the Recorders judgment was that, if the passenger was unable to fold the buggy and to store it somewhere away from the wheelchair space, it was reasonable to expect her to be asked to leave the bus in order that Mr Paulley could be allowed to board. This, I suggest, is clear from para 15 of the Recorders judgment where he said that, if there was competition for such a space with a wheelchair user, then they would either have to vacate the space by, for example, folding a buggy and sitting elsewhere, or by leaving the bus and taking the next bus available. That does no more than affirm the principle that the wheelchair space is to be regarded as an area in which priority be given to wheelchair users. It is entirely consonant with the overall intention and legislative purpose of the Equality Act 2010 and the Accessibility Regulations. Difficulty in enforcement If the reasonable adjustments required to the PCP are that (i) the notice in the respondents bus should stipulate that the wheelchair space must be vacated when a wheelchair user wishes to use it; and (ii) that the driver be required to tell a non disabled passenger occupying the space that he must yield it to the wheelchair user (rather than that he be required to eject the passenger), many of the perceived difficulties in implementing the policy fall away. The notice would give emphasis to the policy of the company that it is expected that able bodied passengers must yield the space to a wheelchair user. There is no reason to suppose that drivers making that policy explicitly clear would not help to persuade reluctant passengers that it is pointless to refuse. There is every difference between a passenger who says well, your policy allows me to refuse a request and I am refusing and the passenger who says, well, I know that your policy requires me to move but I am not moving. Even without coercive back up, there is every reason to conclude that the number of passengers prepared to take the latter stance would be significantly smaller than in the former. In any event, as I have said, difficulty in implementation should not be the lone yardstick against which its reasonableness should be measured. The reasonableness of the adjustments is to be judged by the contribution which they make to redressing the imbalance between wheelchair users and able bodied members of the public in the opportunity they have to use public transport. Of course, if it is utterly impossible to enforce an adjustment and if it is likely to be wholly ignored, it may be said that it is not reasonable to introduce it. But there is no warrant for reaching such a conclusion in the present case. The adjustment to the PCP would, at the very least, make an important statement about the companys commitment to ensuring equal treatment for its wheelchair bound customers. And, for the reasons that I have given, I consider that it would also bring about an attitudinal change on the part of those passengers who might be inclined to refuse a request to move. Without supporting evidence, I am not prepared to accept that a stipulation that a passenger was required to move would lead to confrontation or delay. When members of the public congregate to use a generally available facility, there is always the possibility that there may be disagreement about who is entitled to what but is there any greater likelihood of discord and confrontation because a rule is clear, as opposed to one which allows the passenger to decide whether to accede to a request? I would certainly not take that as a given. And, of course, there are situations that arise under the Conduct Regulations that do require drivers to give instructions. It was not suggested that these gave rise to widespread problems of confrontation or delay. Even if an instruction, as opposed to a request, prompted delay, such as where a driver might refuse to continue the journey until the refusing passenger yielded, that would not be a basis on which the adjustment could be condemned as unreasonable. Wheelchair users face formidable difficulties in making use of facilities that the able bodied can take for granted. If inconvenience to the travelling public because of delay is the price which has to be paid to allow those who depend on a wheelchair to make maximum use of the transport system which is made available to all, I do not consider that this is, in any sense, unreasonable. Inflexible application of the adjusted policy It is important to remember that what is sought is a reasonable adjustment to the PCP. It is not demanded that there be a wholly unyielding application of it in every conceivable circumstance. Even before the Court of Appeal, the appellant accepted that there would be circumstances in which it would not be appropriate to apply the adjusted policy in its full rigour. But, just because there should be a measure of discretion as to when the adjusted policy should be applied, it does not follow that there should not be an adjustment. The inevitable fact that there will be occasions when it would not be appropriate to require a passenger to leave a wheelchair space does not require that the correct policy should not be in place. Of course, the decision when to enforce the adjusted policy rigidly and when to relax or modify it calls for judgment to be exercised by the bus driver. But there is no reason to suppose that this will require exceptional powers of discretion. It is in the nature of a bus drivers work that he or she will need to make decisions about how passengers should be handled or responded to in all manner of circumstances. The fact that there will be circumstances in which a reasonable decision may be made not to enforce a policy strictly does not mean that the policy should not exist. Nothing in the Recorders judgment suggests that he considered that the adjusted policy would have to be enforced in an unbending fashion, whatever circumstances were encountered. I am afraid that I am unable to agree, therefore, with Lord Neubergers statement in para 55 that there is no basis on which to conclude that there would have been a real prospect that an adjustment to the respondents PCP would have resulted in Mr Paulley not being placed in the disadvantage that he was. On my analysis, the Recorder had, at least implicitly, accepted that drivers would not be required to eject passengers who refused to move and he had not ruled out the possibility of drivers deciding that, in exceptional circumstances, the policy should not be strictly enforced. The essential finding that he made was that what he described as the first come first served/request policy required adjustment. It is an inescapable inference from that conclusion that, if the adjustment had been made, there was at least a real prospect that Mr Paulley would not have been prevented from travelling on the bus. That seems to me to be an inescapable inference in any event. If the young woman who refused to move had been told that she had to move and that the bus companys policy was that she must do so, how could it be said that there was not a real prospect that she would have moved? Was it open to the appellant to advance a qualified rule in the Court of Appeal? For the reasons that I have given, I do not believe that the Recorders findings partook of the absolute quality which the Court of Appeal considered that they did. He had not suggested that ejection of the refusing passenger from the bus was an indispensable ingredient of the required adjustment to the PCP. Even if he had done, however, I do not consider that the appellant should have been deprived of the opportunity of arguing that a less rigorous adjustment was appropriate. The essential case made by the appellant was that reasonable adjustments to the policy were required in order to overcome the disparity of treatment between him and able bodied passengers. The case that he had to make was that the policy was deficient and that reasonable adjustments could have cured, or at least ameliorated, that position. He was not required to adopt unshakeably one particular form of reasonable adjustment to the exclusion of all others. That is, no doubt, the reason that a whole series of possible adjustments was adumbrated on his behalf before the Recorder, as detailed by him in para 13 of his judgment. Even if it were the case that the Recorder had lighted on one particular form of adjustment, it surely does not follow that the appellant was fixed with that as the only possible avenue through which to advance his argument. I do not consider that a respondents notice was required in order to allow the appellant to pursue a different line from that espoused by a lower court. A respondents notice is needed where a finding made by a lower court is challenged or where a particular line of argument advanced by the respondent below had been rejected. Neither situation obtained here. Conclusion I would allow the appeal and restore the order which the Recorder made. LORD CLARKE: (dissenting in part) I initially thought that the resolution of this appeal depended upon the application of regulation 12 of the Conduct Regulations (the Regulations) referred to by Lady Hale in para 96 of her judgment. It seemed to me that, so far as relevant to this appeal, the critical provisions were contained in regulation 12. In particular, regulation 12(2) provides for the use of an unoccupied wheelchair space. Regulation 12(3) defines a wheelchair space as being occupied if: there is a wheelchair user in that space; or (a) Regulation 12(2) provides: (b) passengers or their effects are in that space and they or their effects cannot readily and reasonably vacate it by moving to another part of the vehicle. If there is an unoccupied wheelchair space on the vehicle, a driver and conductor shall allow a wheelchair user to board if (a) the wheelchair is of a type and size that can be correctly and safely located in that wheelchair space, and (b) in so doing, neither the maximum seating nor standing capacity of the vehicle would be exceeded. The express meaning of those provisions is that a wheelchair user must be permitted to board and use the space, provided that there is no wheelchair user already in the space or, if another passenger or passengers is or are in the space, he or they must be unable readily and reasonably to vacate it by moving to another part of the vehicle. It follows that the Regulations do not themselves contemplate that such a person or persons would be asked or required to get off the bus. The Regulations thus balance the interests of wheelchair users and other passengers in a specific way. Since that balance does not contemplate that a person using the space would be asked or required to get off the bus altogether, I did not think that FirstGroup could have been in breach of any duty to Mr Paulley under regulation 12 to direct that the lady with the buggy leave the bus. In so far as the Recorder concluded that FirstGroup owed Mr Paulley a duty to make adjustments to what is called a provision, criterion or practice (or PCP) under which he would have priority as a wheelchair user and that, in appropriate circumstances, another person using the wheelchair place who was not using a wheelchair would be required to leave the bus, I thought that his case was not established under regulation 12. Assuming that those were the only relevant regulations governing the duty of the defendant (the company) in a case of this kind it seemed to me that the only way in which it could be said that it was in breach of duty to the claimant would be as follows. First, the company should have ensured that its drivers considered whether, in circumstances like these, a person with a child and a buggy could (in the words of regulation 12(3)) readily and reasonably vacate the space by moving to another part of the bus. For my part, I do not think that it was sufficient for the driver (or the lady concerned) to refuse to wake the child up if, as appears to have been the case on the facts, he or she was asleep. Moreover, it was not, in my judgment, sufficient for the driver to do no more than ask the lady to move out of the wheelchair space. In para 5 of his judgment the Recorder set out the companys policy, both at the time of the incident and at the time of the trial. The first was in these terms: Wheelchairs do not have priority over buggies, but to ensure that all our customers are treated fairly and with consideration, other customers are asked to move to another part of the bus to allow you to board. Unfortunately, if a fellow passenger refuses to move you will need to wait for the next bus. That was on the website but was changed because the wheelchair policy on the website did not reflect the policy adopted by the company. It was replaced by this. Wheelchair users have priority use of the wheelchair space. If this is occupied with a buggy, standing passengers or otherwise full, and there is space elsewhere on the vehicle, the driver will ask that it is made free for a wheelchair user. Please note that the driver has no power to compel passengers to move in this way and is reliant on the goodwill of the passengers concerned. Unfortunately, if a fellow passenger refuses to move you will need to wait for the next bus. It is not now in dispute that neither of those terms is a satisfactory PCP. The question is whether the bus company made reasonable adjustments to the PCP. The reason that it is not now contested that those adjustments are not reasonable is that both leave the decision whether to vacate the space and to move to another part of the bus entirely to the person using the wheelchair space. Under them, if that person refuses to move, that is the end of it. For the reasons given by Lady Hale and Lord Kerr and (I think) by Lord Neuberger, Lord Toulson and Lord Reed, I agree that the failure to make further adjustments to the PCP was contrary to the law as it stood when the Regulations were introduced. For these reasons, I would hold that the company was in breach of duty owed to Mr Paulley in failing to take more steps than it did in response to his request to use the wheelchair space in his wheelchair. In short, I agree with Lord Toulson and Lord Neuberger that it should have gone further than it did. See, in particular para 83 of Lord Toulsons judgment, with which I agree. I further agree with him, and indeed with Lord Neuberger, that the appeal should be allowed, at least to the extent that they propose. I also agree in this regard with Lady Hale and Lord Kerr. The question then arises, or would arise, whether there is any basis upon which the order for damages should be sustained. It is accepted by both Lord Neuberger and Lord Toulson that this alternative case was advanced by the claimant at first instance. I agree that the claimant should be permitted to take the point, since (whatever may have been said in the Court of Appeal), all parties were in a position to argue the point before this Court. The next question is whether, if the bus driver had taken further steps to put pressure upon the lady with the buggy, there was a sufficient prospect that she would have moved from her place to another part of the bus sufficient to satisfy the relevant test of causation. Lord Kerr concludes that, if the policy had been more authoritative, and the lady had been told that she had to move and that the companys policy was that she must do so, there was at least a real prospect that she would have moved. I agree. It seems to me to be a reasonable inference from the facts that it was practicable for her to move to another part of the bus. It was not the evidence of the driver that there was nowhere else she could go. His requests were consistent only with the conclusion that it was both reasonable and practicable for her to move elsewhere on the bus. There is no evidence that she was faced with only two alternatives, namely staying where she was in the wheelchair space or leaving the bus. In these circumstances I agree with Lord Kerr that there is at least a real possibility that, if the position had been explained to her in clear terms, she would have moved elsewhere on the bus, even though it would have involved waking the child. I would go further. It seems to me that, if the problems and the policy had been put clearly to her, it is more likely than not that she would have agreed to do so. The question then arises whether, if the driver had told the lady that she must move and if, as I think, it is more likely than not that she would have done so, it is clear that there was somewhere else in the bus she could (and would) have gone to. It is common ground that the driver asked the lady if she would move elsewhere in the bus in order to accommodate the wheelchair. It is I think clear that there was somewhere else for her to go on the bus. The further question then arises whether the buggy would have been able to be folded up. Again, it seems to me to be more likely than not that the buggy was foldable. First, although there may be some exceptions, buggies are ordinarily foldable. Secondly, the drivers evidence (in his statement) was that he asked the lady if she would fold her buggy up so that Mr Paulley could travel on the bus. In his statement he added at paras 45 and 46: 45 The lady pointed out to me that her child was fast asleep within the buggy and that she had no intentions of waking the child or removing the child from the buggy. It was clear to both me and Mr Paulley that the lady was 46. refusing to assist. The driver did not say that the lady told him that it was not possible to fold up the buggy. When he was asked whether there was anywhere else for the buggy and child to go if they moved out of the space, the driver said no. However, he was then asked whether there was any alternative to asking the person with the buggy to get off the bus. He said that the alternative was to fold down the buggy if possible, if the buggy would fold down. It is true that he was then asked And they had refused to do that? and he replied yes. There is however no evidence that he heard the lady say that. As I see it, he inferred that from the reply recorded in his statement. Ironically perhaps, the only evidence which might be said to support the conclusion that the buggy in question could not be folded up is in the evidence of Mr Paulley. In his statement he said at para 24 that he appreciated that the wheelchair space is a good place for people to park their pushchairs, but they can at least fold them up. That suggests that he thought that the buggy could be folded up. However, earlier in his statement he said at para 14 that, while he was boarding the bus, the following exchange took place between the driver and the lady with the buggy: Of his own initiative, the driver turned to the lady and asked if she would fold it [ie the buggy] down so that I could use the wheelchair bay. The lady (who was on her mobile phone) responded by saying that the pushchair did not fold down and so she wouldnt move. It is true that in the Court of Appeal Lewison LJ at para 3 accepted that account, although he did not advert to the drivers evidence set out above. I am bound to say that it seems unlikely to me that it was not possible to fold the buggy and that it is more likely than not that the true reason for her attitude was the inconvenience of moving the child and the buggy when the child was asleep, which was essentially the reason she gave. If those conclusions are correct, Mr Paulley would be entitled to succeed even if the only relevant provisions were contained in regulation 12 of the Conduct Regulations. However, Lady Hale and Lord Kerr place considerable weight upon the position as at the date of the incident. Lady Hale has described the Regulations and their provenance in detail in her para 96, which she puts in their context in her paras 93 95 and 98. Importantly, she also stresses the importance of section 21ZA of the Disability Discrimination Act 2005 in her para 98. As she says, that section provided for the application of sections 19 to 21 of the DDA 1995 in modified form to providers of transport services. I agree with her that in passing that Act, Parliament must have concluded that the earlier regulations were not sufficient to enable disabled passengers to enjoy the same access to public transport as is enjoyed by non disabled passengers. As she says, those sections provide that, where providers of transport services had a policy, practice or procedure which would make it impossible or unreasonably difficult for disabled persons to make use of a service which they provided to other members of the public, it was their duty to take such steps as is reasonable in all the circumstances of the case for him to take in order to change that practice, policy or procedure so that it no longer has that effect. I now appreciate that the critical point in this appeal is not whether there was a breach of regulation 12 of the Conduct Regulations. As Lady Hale says at para 101, the issue agreed between the parties for the purpose of this appeal is a simple one, namely whether the Recorder was correct in concluding that the company was in breach of the Equality Act 2010. In her paras 99 to 109 Lady Hale convincingly explains why the answer to that question is yes. The essential points which have persuaded me are these, which are really no more than those made by Lady Hale. The bus company as the service provider must comply with three requirements set out in paragraph 2(1) of Schedule 2 to the 2010 Act. The first is in section 20(3) as modified by the Schedule. It reads: The first requirement is a requirement, where a [PCP] of As puts disabled persons generally at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage. As Lady Hale explains in para 99, failure to comply with that requirement is a failure to make reasonable adjustments under section 21(1) and A discriminates against a disabled person if A fails to comply with that duty in relation to that person under section 21(2). This is a prospective duty, owed to disabled persons generally, to take proactive steps to meet their needs, and if an individual suffers as a result, then that failure amounts to discrimination against him. I agree with the general points made by Lady Hale in para 100. In particular, the position under the 2010 Act is different from that under the Conduct Regulations. Disabled people are a special case. Their needs are to be treated differently from those of others, including those with buggies. As Lady Hale puts it in paras 101 and 102, at the time of the incident the companys policy was that wheelchair users had no priority over buggies and that infected both the content of the notices and the approach to enforcement. It should have been made clear to passengers that wheelchair users had priority over others, who should have been required to vacate the wheelchair space. I agree with Lady Hale that disruption and confrontation would be unlikely. As indicated above, it is my view that it is more likely than not on the facts here that, if the lady had been required to move, as opposed to merely being asked to do so, she would have done so. I am also of the view that if, contrary to my view of the facts of this case, a buggy cannot be folded down, the PCP should have been adjusted to make it clear that, if necessary to enable a wheelchair user to use the wheelchair space, the buggy user (and not the wheelchair user) must get off the bus. Only in this way will the statutory policy of priority for wheelchair users be carried out. In reaching this conclusion, I do not disagree with the points made by Lady Hale in para 105. As she says, while non disabled people are not entitled to the same treatment as disabled people, especially after the 2010 Act, the adjustments to be expected for disabled people must be reasonable ones, and there will obviously be circumstances in which it is not reasonable to expect the space (or indeed the bus) to be vacated. However, this is not such a case. In conclusion, I agree in particular with the reasoning of Lady Hale and Lord Kerr. I too would allow the appeal. I also would answer the question posed, namely whether the company was in breach of the 2010 Act in the affirmative. I agree with Lady Hale that, whatever concession may have been made in the Court of Appeal, it cannot be just to deprive Mr Paulley of the damages which the Recorder awarded him. As I say in para 148 above, all parties were in a position to argue the point before this Court. I would therefore restore the order made by the Recorder.

The appeal concerns the lawfulness of a bus companys policy in relation to the use of the space provided for wheelchair users on its buses. Mr Paulley is a wheelchair user who attempted to board a bus operated by a subsidiary of FirstGroup PLC on 24th February 2012. The bus had a space marked by a wheelchair sign and a notice saying, Please give up this space for a wheelchair user (the Notice). At the time Mr Paulley attempted to board, a woman with a sleeping child in a pushchair occupied this space. She was asked by the driver to fold down the chair and move; however, she refused, stating that it did not fold down. Mr Paulley had to wait for the next bus as a result. Mr Paulley issued proceedings against FirstGroup for unlawful discrimination on the ground of his disability, claiming that FirstGroup had failed to make reasonable adjustments to its policies contrary to section 29(2) of the Equality Act 2010. The Recorder found that FirstGroup operated a provision criterion or practice (PCP) consisting of a policy of first come first served whereby a non wheelchair user occupying the space on the bus would be requested to move, but if the request was refused nothing more would be done. This placed Mr Paulley and other wheelchair users at a substantial disadvantage by comparison with non disabled passengers. There were reasonable adjustments that FirstGroup could have made to eliminate the disadvantage: (i) altering the Notice positively to require non disabled passengers occupying a space to move if a wheelchair user needed it; and (ii) adopting an enforcement policy requiring non disabled passengers to leave the bus if they failed to comply. The Recorder found in favour of Mr Paulley and awarded him 5,500 damages. FirstGroups appeal was unanimously allowed by the Court of Appeal which held that it was not reasonable to hold that FirstGroup should adjust its policy so that its drivers required, rather than requested, non wheelchair users to vacate a space when it was needed by a person in a wheelchair, and then to positively enforce that requirement with the ultimate sanction being removal from the bus. The Supreme Court unanimously allows Mr Paulleys appeal, albeit only to a limited extent. Lord Neuberger gives the lead judgment (with which Lord Reed agrees) allowing the appeal but only to the extent that FirstGroups policy requiring a driver to simply request a non wheelchair user to vacate the space without taking any further steps was unjustified. Where a driver who has made such a request concludes that a refusal is unreasonable, he or she should consider some further step to pressurise the non wheelchair user to vacate the space, depending on the circumstances. Lord Toulson and Lord Sumption write concurring judgments. On the issue of the order to be made, this majority declines to uphold an award of damages. Lady Hale, Lord Kerr and Lord Clarke also allow the appeal but they would have restored the order of the Recorder in full, including upholding the award of damages. Under section 29 of the 2010 Act, as a public service provider, FirstGroup must not discriminate against a person requiring its services by not providing the person with the service, and it must make reasonable adjustments to avoid substantial disadvantage to disabled persons [20 26]. The Recorders judgment effectively required a policy that could lead to a non wheelchair user being ordered off the bus [40 45]. The Court of Appeal was right to reject this. An absolute rule that any non wheelchair user must vacate the space would be unreasonable: there are many circumstances in which it could be unreasonable to expect a non wheelchair user to vacate a space, and even more, to get off the bus, even where the space is needed by a wheelchair user [46 48]. Even a qualified rule (i.e. that any non wheelchair user must vacate if it is reasonable) implemented through mandatory enforcement would be likely to lead to confrontation with other passengers (not least where the non wheelchair user vacating the space affected other travellers) and delay [50 51]. Passengers are not clearly subject to a statutory obligation to comply with a policy relating to the use of the space, and would not appear to be under such an obligation to get off the bus if they fail to do so [52]. Even though the hearing in the Court of Appeal had proceeded on the basis that it was not part of Mr Paulleys case [59], the argument that FirstGroups PCP should have gone further than it did, albeit not as far as the Recorder concluded, has more force. FirstGroup cannot be criticised for choosing not to express the Notice in more forceful terms: it was aimed at politely requiring non wheelchair users to vacate the space; there was evidence that directive notices are a less effective means of communication with the public; and the use of specially emphatic language should not determine legal liability in this case [63]. The suggestion that the Notice should state that priority of wheelchair users would be enforced would be false [64]. However, it was not enough for FirstGroup to instruct its drivers simply to request non wheelchair users to vacate the space and do nothing further if the request was rejected. The approach of the driver must depend upon the circumstances, but where he or she concludes that the refusal is unreasonable, some further step to pressurise the non wheelchair user to move should be considered, such as rephrasing the request as a requirement (especially where the non wheelchair user could move elsewhere in the bus) or even a refusal to drive on for several minutes [67]. Lord Toulson agrees [83 85] adding that fresh legislative consideration is desirable [87]. Lord Sumption also agrees albeit with reservations [92]. So far as damages are concerned, Lord Neuberger (with whom Lords Sumption, Reed and Toulson agree) concludes that the Recorder did not specifically consider whether, if FirstGroup had simply required its drivers to be more forceful, there was a prospect that it would have made a difference in this case. It is therefore not possible to conclude that there would have been a real prospect that such an adjustment would have resulted in Mr Paulley not being placed in the disadvantage that he was, and so an award of damages is not possible [60 61]. Lady Hale, Lord Kerr and Lord Clarke dissent in part. As the Recorder found, it was reasonable to expect bus operators to do more than FirstGroup did [102 109]. His judgment did not necessarily require ejection of a passenger who refused to move from the bus nor did it create an absolute rule [106]; [129 131]; [137]. Had the practice suggested by the claimant been in force, there was at least a real prospect that Mr Paulley would likely have been able to travel [108]; [138]. This being so, it was unjust to deny Mr Paulley damages [109]; [160].

It is the aim of an award of damages in the law of tort, so far as possible, to place the person who has been harmed by the wrongful acts of another in the position in which he or she would have been had the harm not been done: full compensation, no more but certainly no less. Of course, there are some harms which no amount of money can properly redress, and these include the loss of a wife or husband. There are also harms which it is difficult to assess, especially those which will be suffered in the future, but the principle of full compensation is clear. The issue in this case is whether the current approach to assessing the financial losses suffered by the dependant of a person who is wrongfully killed properly reflects the fundamental principle of full compensation, and if it does not whether we should depart from previous decisions of the House of Lords. The facts The appellant is the widower of Mrs Knauer, who died from mesothelioma in August 2009 at the age of 46. It is now accepted that she contracted the disease as a result of exposure to asbestos during the course of her employment by the respondent as an administrative assistant at Her Majestys Prison, Guys Marsh. The respondent had initially denied such exposure but liability was eventually admitted in December 2013, when judgment was entered for the appellant with damages to be assessed. The damages hearing took place before Bean J in July 2014. Many items of damage were agreed and he resolved those which remained in issue. This included the annual figure for the value of the income and services lost as a result of her death (the multiplicand). There is no appeal against any of those findings. The issue is whether the number of years by which that figure is to be multiplied (the multiplier) is to be calculated from the date of death or from the date of trial. The parties are agreed that in this case the difference between the two approaches is 52,808. The trial judge held (as had Nelson J in White v ESAB Group (UK) Ltd [2002] PIQR Q6) that he was bound to follow the approach adopted by the House of Lords in Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 and to calculate the multiplier from the date of death. Freed from that authority, however, he would have preferred the approach which had been recommended by the Law Commission, in their report on Claims for Wrongful Death (1999) (Law Com No 263), of calculating the multiplier from the date of trial. He granted a certificate under section 12 of the Administration of Justice Act 1969 to enable the case to come directly to this court, leapfrogging the Court of Appeal. The issue of principle which this court is asked to decide is whether the date of death or the date of trial is the proper approach. But if the answer to that question is the date of trial then the subsidiary issue is whether it is open to or proper for this court to depart from the approach laid down by Lord Diplock and Lord Fraser of Tullybelton in Cookson v Knowles and by Lord Bridge of Harwich in Graham v Dodds or whether the defect in the present law is one which should be left to Parliament to cure. The principle Mr Gerard McDermott QC, who appeared for the respondent, very properly conceded that the appellants case on the issue of principle was a good one. The normal approach is to calculate the losses up to the date of trial and award a lump sum in respect of those. Future losses are calculated on the multiplier/multiplicand approach. The multiplier reflects the normal life expectancy of the victim, based on actuarial tables which include a discount to take account of the risk of an earlier death (frequently referred to as the vicissitudes of life). But there is also a discount to reflect the value to the claimant of receiving a lump sum now to cater for future losses which would have been suffered over a number of years in the future. Without such a discount, there would be over compensation. The object is that, at the end of the period in question, the damages will have been exhausted in compensating the victim. The victim should not gain a profit from the compensation. That is the way in which damages for personal injury falling short of death are assessed. Calculating damages for loss of dependency upon the deceased from the date of death, rather than from the date of trial, means that the claimant is suffering a discount for early receipt of the money when in fact that money will not be received until after trial. The appellant accepts that the sum calculated to reflect the loss which has been suffered up to the date of trial should contain a discount to reflect the risk that, had there been no tort, the deceased might have died between her actual date of death and the date of trial. There may also be a risk that the support or services provided for a dependant might have stopped or reduced, for example because of the deceaseds accident, illness or loss of job or the dependency ceasing, for example because a child grows up. In most cases any discount would be a modest one, although of course there will be cases in which the risk was far from negligible and where a larger discount would be appropriate. But, as the figures in this case show, the effect of the discount for the non existent early receipt of the money is far from negligible. It results in under compensation in most cases. This has become clear now that the calculation of financial losses is based upon the actuarial tables produced by the Ogden Working Party. The current approach in fatal accident cases involves taking a multiplier as at the date of death and then deducting from it the time which has elapsed between the death and the trial. This is to mix up a calculation based on properly considered actuarial principles with an arbitrary arithmetical deduction. As Hooper LJ confessed in Fletcher v A Train and Sons Ltd [2008] EWCA Civ 413; [2008] 4 All ER 699, para 42, I do not understand why chronological years are deducted from the multiplier. The trial judge in that case had awarded interest on the whole sum, in order to make up for the under compensation, an approach which the Court of Appeal had to overturn. There have been other examples of courts seeking to get round the problem by adopting a distorted approach: see ATH v MS [2003] QB 965 and Corbett v Barking, Havering and Brentwood Health Authority [1991] 2 QB 408. The temptation to react to a rule which appears to produce an unjust result by adopting artificial or distorted approaches should be resisted: it is better to adopt a rule which produces a just result. The Law Commission, in their report on Claims for Wrongful Death, said this: 4.7 In the majority of cases it is the life expectancy of the deceased, and hence the period for which he or she would have continued to provide benefits to any dependants, which will govern the multiplier. It was in this context that the date of death rule was adopted, on the basis that everything that might have happened to the deceased after that date remains uncertain. 4.8 It is true that where the multiplier is controlled by the life expectancy of the deceased, the only information which will usually be relevant to that calculation is that which was known about the deceased at the time of death. On the other hand, it is possible to imagine facts on which matters emerging as certain after the deceaseds death do affect the period for which it is estimated that he or she would have continued to provide benefits. For example, the deceased might have suffered from a life shortening medical condition which could not be treated in his or her lifetime. If by the time of trial it is known that, within a year of his death, a treatment for the condition had been developed, this would inevitably affect the accuracy of any multiplier calculated at the date of death. Thus, even in cases where the deceaseds life expectancy controls the multiplier, we do not agree with Lord Frasers assertion that the multiplier should inevitably be selected once and for all as at the date of death. They recommended that, as in personal injury cases, actuarially calculated multipliers should be used for calculating future losses in fatal accident cases from the date of trial. For pre trial losses the only difference from non fatal cases would be that there would have to be a small deduction to take account of the possibility that the deceased might in any event have died or given up work before trial (para 4.17). They expressed this policy, not in the simple proposition that the multiplier should be calculated from trial, not death, but more precisely as a multiplier which has been discounted for the early receipt of the damages shall only be used in the calculation of post trial losses (para 4.18). They also recommended that the Ogden Working Party should consider, and explain more fully, how the existing tables should be used, or amended to produce accurate assessments of damages in fatal accident cases, based upon their preferred approach (para 4.23). If this is now so obvious, why did the House of Lords reach a different conclusion in Cookson v Knowles and Graham v Dodds? The short answer is that both cases were decided in a different era, when the calculation of damages for personal injury and death was nothing like as sophisticated as it now is. In particular, the courts discouraged the use of actuarial tables or actuarial evidence as the basis of assessment, on the ground that they would give a false appearance of accuracy and precision in a sphere where conjectural estimates have to play a large part. Hence [t]he experience of practitioners and judges in applying the normal method is the best primary basis for making assessments: Lord Pearson in Taylor v OConnor [1971] AC 115, 140. Rather like the assessment of the tariff in criminal cases, the answer lay in the intuition of the barristers and judges who appeared in these cases. This was wholly unscientific. Counsel in the current case were agreed that, when they started at the Bar, the conventional approach to deciding upon the multiplier was to halve the victims life expectancy and add one year, with a maximum of 16 to 18 years. This is an approach which depends upon being in the know rather than reality. In Cookson v Knowles the main issue was whether interest should have been awarded on the whole sum of damages awarded, as the trial judge had done. Both the Court of Appeal and the House of Lords held that it should not. The damages should be split into pre trial and post trial losses and interest (at half rate) should be awarded on the former but not on the latter. Lord Fraser also dealt with the date from which the multiplier should be calculated and held that, in a fatal accident case, it should be the date of death, whereas in a non fatal personal injury case, it was the date of trial. He justified the distinction on this basis at p 576: In a personal injury case, if the injured person has survived until the date of trial, that is a known fact and the multiplier appropriate to the length of his future working life has to be ascertained as at the date of trial. But in a fatal accident case the multiplier must be selected once and for all as at the date of death, because everything that might have happened to the deceased after that date remains uncertain. It seems clear that he was thinking of the multiplier in terms of taking account of the vicissitudes of life rather than in terms of accelerated receipt. The only other substantial speech was that of Lord Diplock, who did not question the propriety of assessing the multiplier as at the date of death (although for the purpose of awarding interest, it had to be divided into the pre and post trial periods). In Graham v Dodds, the majority of the Court of Appeal in Northern Ireland took the view that Lord Diplock and Lord Fraser had expressed opposite and irreconcilable opinions (p 814), Lord Diplock favouring the date of trial and Lord Fraser the date of death. The court preferred what they took to be Lord Diplocks view. In the House of Lords, Lord Bridge (with whom all the other members of the appellate committee, including Lord Diplock, agreed) held that Lord Fraser and Lord Diplock had not disagreed. Lord Bridge agreed with the reason given by Lord Fraser for distinguishing between fatal and non fatal cases and added that choosing the later date would lead to the highly undesirable anomaly that in fatal accident cases the longer the trial of the dependants claims could be delayed the more they would eventually recover (p 815). Once again, the emphasis was on the uncertainties of life, the difficulty of knowing what would have happened to the deceased between death and the date of trial, and not upon the question of accelerated payment. The Ogden Tables did not exist when these two cases were decided. The working party under the chairmanship of Sir Michael Ogden QC produced the first edition of Actuarial Tables with Explanatory Notes for use in Personal Injury and Fatal Accident Cases in 1984. Since then they have become a staple of personal injury and fatal accidents practice, the current edition being the 7th in 2011. Any doubts about using them in the courts were laid to rest in the landmark case of Wells v Wells [1999] 1 AC 345, where Lord Lloyd of Berwick said this at p 379F G: I do not suggest that the judge should be a slave to the tables. There may well be special factors in particular cases. But the tables should now be regarded as the starting point, rather than a check. A judge should be slow to depart from the relevant actuarial multiplier on impressionistic grounds, or by reference to a spread of multipliers in comparable cases especially when the multipliers were fixed before actuarial tables were widely used. Following publication of the Law Commissions report, the tables have included fatal accident calculations based on the Law Commissions recommended approach, although at present they cannot be used. Of the two reasons given by Lord Bridge for the present approach, it is now clear that there is a perfectly sensible way of addressing his uncertainty point, which would remove the current distinction between fatal and non fatal cases. The twin brothers mentioned in argument in Cookson v Knowles, one of whom was injured and the other of whom was killed in the same accident, would both be dealt with in the same way. If his first concern can thus be dealt with, his second concern, any incentive for claimants to delay the trial, is a little harder to understand. If it were valid, it would apply equally to non fatal personal injury claims. Further, if the present approach leads to under compensation, it could be said that it creates an incentive for defendants to delay the trial. The reality is that this is another respect in which the litigation landscape has been transformed since 1984. Under the Civil Procedure Rules 1998, the court is now in a position to set timetables and insist that parties keep to them. In any event, the proper use of the Ogden Tables makes the concern irrelevant. The dependants will get that which reflects their probable loss on an actuarial calculation based on the facts known at the date of trial. There is no injustice either way. Departing from previous House of Lords decisions The question for us is not simply the identification of the date as at which the multiplier should be assessed. Before we can decide that that date should be the date of trial rather than the date of death, we also have to be satisfied that we should depart from the established law as laid down by the House of Lords in Cookson v Knowles and Graham v Dodds. For the appellant, Mr Frank Burton QC contended that a determination that the appropriate date is the trial date would not involve a departure from those previous decisions, and therefore did not require the appellant to rely on the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234, whereby the House of Lords declared that it could depart from its previous decisions. This contention rested on the basis that we are merely being asked by the appellant to change a judicial guideline, rather than to depart from any earlier decision. We do not accept that contention, which appears to fly in the face of the reasons given by Lord Bridge for reaching the conclusion which he did in Graham v Dodds. He stated that the selection of the date of trial date would be clearly contrary to principle and would give rise to a highly undesirable anomaly (p 815). However much we may doubt those observations for the reasons already given, they demonstrate that he was deciding the issue as a matter of legal principle, and not merely giving non binding guidance. Furthermore, it is important not to undermine the role of precedent in the common law. Even though it appears clear that both the reasoning and conclusion on the point at issue in Cookson v Knowles and Graham v Dodds were flawed, at least in the light of current practice, it is important that litigants and their advisers know, as surely as possible, what the law is. Particularly at a time when the cost of litigating can be very substantial, certainty and consistency are very precious commodities in the law. If it is too easy for lower courts to depart from the reasoning of more senior courts, then certainty of outcome and consistency of treatment will be diminished, which would be detrimental to the rule of law. In our view, therefore, the issue is whether this is a case where this Court should apply the 1966 Practice Statement. In that connection, it is well established that this Court should not refuse to follow an earlier decision of this Court or the House of Lords merely because we would have decided it differently see per Lord Bingham of Cornhill in Horton v Sadler [2007] 1 AC 307, para 29. More than that is required, not least because of the desirability of certainty in the law, as just discussed. However, as Lord Bingham said in the same passage, while former decisions of the House are normally binding too rigid adherence to precedent may lead to injustice in a particular case and unduly restrict the development of the law. This Court should be very circumspect before accepting an invitation to invoke the 1966 Practice Statement. However, we have no hesitation in concluding that we ought to do so in the present case. At least in the current legal climate, the application of the reasoning in the two House of Lords decisions on the point at issue is illogical and their application also results in unfair outcomes. Further, this has encouraged courts to distinguish them on inadequate grounds (to quote Lord Hoffmann in A v Hoare [2008] AC 844, para 25), which means that certainty and consistency are being undermined. Above all, the fact that there has been a material change in the relevant legal landscape since the earlier decisions, namely the decision in Wells v Wells and the adoption of the Ogden Tables, when taken with the other factors just mentioned, gives rise to an overwhelming case for changing the law. As already noted, Mr McDermott very fairly acknowledged the strength of the appellants case for a change of approach. His only substantive answer to the contention that we should change the law was to point out that the system should be seen as a whole and that there are respects in which the current legislation requires that claimants be over compensated. One example is section 3(3) of the Fatal Accidents Act 1976, which requires the court to ignore, not only the prospect but the actual remarriage of the claimant, but another is section 4, which requires that benefits which will or may accrue to any person as a result of the death shall be disregarded. These are, of course, examples of over compensation. They result from legislative choices and not (unlike the principles with we are concerned in this case) from judicial decisions. The Law Commission recommended that they be modified by legislation. But none of this is an answer to the basic question under consideration here. The present claimant should not be deprived of the compensation to which on ordinary principles he would be entitled because some other claimants, as a result of understandable legislative choices made by Parliament, receive more than they would receive on those ordinary principles. It would be wrong to preserve what is now known to be a flawed practice affecting most claimants in order to counteract those choices. Because those matters are dealt with in the 1976 Act itself, the solutions must lie with Parliament. Finally, it was also suggested that, rather than this Court changing the law, we should leave it to the legislature to do so (as has happened in Scotland, where the Scottish Parliament has enacted section 7(1)(d) of the Damages (Scotland) Act 2011, following the recommendation of the Scottish Law Commission in their Report on Damages for Wrongful Death (2008) (Scot Law Com No 213), to the effect that the multiplier should be fixed as at the date of trial). We would reject that suggestion. The current law on the issue we are being asked to resolve was made by judges, and, if it is shown to suffer from the defects identified above, then, unless there is a good reason to the contrary, it should be corrected or brought up to date by judges. That is, after all, the primary principle which lies behind the 1966 Practice Statement. Of course, there may be cases where any proposed change in the law is so complex, or carries with it potential injustices or wider implications that the matter is better left to the legislature, but this is not such a case. Furthermore, in England and Wales, questions relating to the assessment of damages are and always have been very much for the courts, rather than for the legislature (although there are exceptions, to which we have already alluded). In relation to the point at issue on this appeal, that was recognised by the Law Commission in paras 4.19 4.22 of their 1999 report, where it is said that legislation is probably neither necessary nor appropriate to change the law on this point, on the ground that there was room for judicial manoeuvre without legislation. Conclusion For these reasons, we would allow this appeal, and refuse to follow Cookson v Knowles and Graham v Dodds, on the basis that the correct date as at which to assess the multiplier when fixing damages for future loss in claims under the Fatal Accidents Act 1976 should be the date of trial and not the date of death.

Mrs Knauer was employed by the Ministry of Justice as an administrative assistant at Her Majestys Prison, Guys Marsh. In the course of her employment, she contracted mesothelioma, from which she died in August 2009. Her husband, Mr Knauer, made a claim for future loss of dependency under the Fatal Accidents Act 1976. The Ministry of Justice admitted liability for Mrs Knauers death in December 2013. In a hearing before Bean J in July 2014, the parties agreed the annual figure for the value of the income and services lost as a result of Mrs Knauers death, the multiplicand. A dispute arose between the parties as to whether the number of years by which that figure is to be multiplied, the multiplier, should be calculated from the date of death or from the date of trial. The trial judge held that he was bound to follow the approach adopted by the House of Lords in the cases of Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 and to calculate the multiplier from the date of death. The trial judge made it clear that, absent that authority, he would have preferred to calculate the multiplier from the date of trial in line with the approach recommended by the Law Commission in their report Claims for Wrongful Death (1999, Law Com No 263). Bean J granted a certificate under section 12 of the Administration of Justice Act 1969 to enable Mr Knauer to appeal direct to the Supreme Court. The Supreme Court unanimously allows Mr Knauers appeal. Lord Neuberger and Lady Hale give a joint judgment, with which the other Justices agree. Calculating damages for loss of dependency from the date of death, rather than the date of trial, means that the claimant suffers a discount for early receipt of the money when in fact that money will not be received until after trial, a discount that results in under compensation in most cases [7]. A ruling that damages should be assessed from the date of trial would involve departing from the established law as laid down by the House of Lords in Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808. Therefore, the question is whether this is a case in which the Court should apply the 1966 Practice Statement and depart from precedent [19 22]. The Court has no hesitation in concluding that it should do so in the present case [23]. In the current legal climate, the application of the reasoning in the two House of Lords decisions is illogical and its application also results in unfair outcomes. The most important reason for coming to that view is that there has been a material change in the relevant legal landscape [23]. Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 were decided in a different era, when the calculation of damages for personal injury and death was nothing like as sophisticated as it is now and the use of actuarial evidence or tables was discouraged [12]. Lord Bridge, in Dodds, outlined two concerns which were said to justify the rule. First, adopting the date of death reduced the need to deal with uncertainties around what would have happened to the deceased between the death and the date of trial. Secondly, were the date of trial to be adopted, this would lead to the anomaly that, the longer the trial were delayed, the more a claimant would be able to recover [13 15]. The Ogden Tables were produced in 1984 and endorsed by the House of Lords in the landmark case of Wells v Wells [1999] 1 AC 354. As the Ogden Tables include fatal accident calculations based on the recommendations of the Law Commission, there is now a perfectly sensible way of addressing the first of Lord Bridges concerns [16 17]. As to the second of Lord Bridges concerns, this is less of an issue due to the respect in which the litigation landscape has been transformed since 1984; under the Civil Procedure Rules 1998, the court is now in a position to set timetables and insist that the parties keep to them. In any event, the proper use of the Ogden Tables makes the concern irrelevant [18]. Another reason why the Court should depart from Cookson and Dodds is that the unfair effect of the rule as set out in those cases, has led courts to distinguish them on inadequate grounds, which means that certainty and consistency are being undermined [8 9, 23].

The issue in this case is whether the court should order the return to France of two little girls who have been living with their mother in Scotland since July 2013. The issue arises under article 3 of the 1980 Hague Convention on the Civil Aspects of International Child Abduction, as incorporated into the law of the United Kingdom by the Child Abduction and Custody Act 1985. The facts The children were born in France in August 2010 and June 2013. Their father is a French citizen who has lived in France all his life. He has a small business in France. Their mother is a British and Canadian citizen, who was born in Canada of a Scottish mother. She works from home for a Canadian employer. She and the father have never been married. Until July 2013 the family lived together in France, visiting the mothers parents in Scotland from time to time. During July 2013 the mother and the two children came to live in Scotland. They did so with the agreement of the childrens father. According to the fathers affidavit, it had been agreed that the mother and the children should live in Scotland during her 12 months maternity leave, returning afterwards to France. According to the mothers affidavit, it had been agreed that the family would move permanently away from France, although not necessarily remaining in Scotland beyond the duration of her maternity leave. The father was to join the rest of the family after the family home in France had been sold, and arrangements had been made in relation to the management of his business, and they would then decide where to settle in the longer term. What is uncontroversial is that the mother and children were to live in Scotland for the period of about a year from July 2013 during which she was on maternity leave. Following their arrival in Scotland, the mother and children lived initially with the maternal grandparents. In August 2013 the family home in France was sold, the sale being completed two months later. The elder child also started to attend the local nursery in Scotland in August 2013, and has continued to do so since then. The father visited the rest of the family in Scotland for several days every month. The mother and children joined the father for a holiday in France in September 2013, and also spent 12 days with him in October 2013 at their former home in France, shortly before it changed hands. On their return to Scotland they moved into a rented house, adjacent to the maternal grandparents, which the mother and father had inspected together. The mother and children have lived there ever since. On 9 November 2013 the mother discovered infidelity on the part of the father and told him that their relationship was over. On 20 November 2013 he was served with notice of proceedings in Scotland in which the mother sought a residence order in respect of the children, and interdict against the father removing them from Scotland. In the present proceedings, brought under the 1985 Act and seeking an order for the return of the children to France, the father maintains that the initiation of the mothers proceedings was a wrongful retention within the meaning of the Hague Convention. That proposition is predicated upon the childrens being habitually resident in France immediately before 20 November 2013. That is the question on which issue was joined in the courts below. The proceedings below In the Outer House of the Court of Session, the Lord Ordinary, Lord Uist, identified the first question which he had to determine as being whether the children were habitually resident in France immediately before 20 November 2013. It was common ground that that question was to be determined in accordance with the guidance given by this court in A v A and another (Children: Habitual Residence) (Reunite International Child Abduction Centre and others intervening) [2013] UKSC 60; [2014] AC 1 and In re L (A Child) (Custody: Habitual Residence) (Reunite International Child Abduction Centre intervening) [2013] UKSC 75; [2014] AC 1017. After summarising the evidence and the parties contentions, the Lord Ordinary stated (para 7): After considering all the relevant evidence I am satisfied that the children had not immediately before 20 November 2013 lost their habitual residence in France. They had both been born there and lived there in family with their parents until 26 July. This was a French family living in France. There is nothing which happened thereafter which persuades me that they had ceased to be habitually resident in France. I conclude from the evidence and productions presented that the stay of the respondent and the two children in Scotland was to be of limited duration, consisting of the period of her maternity leave. I do not regard the sale of the family home in Narbonne as evidencing a joint intention to leave France for good. I am not persuaded that there was a joint decision to uproot themselves from France and relocate permanently to Scotland. The petitioner has his own expanding business in Narbonne, for which he relies on his livelihood (sic) and in order to maintain the respondent and children. He speaks little or no English. I reject as fanciful any suggestion that he intended to set up a business in Scotland. That would have involved abandoning his established business in France and attempting to set up a business in a country where he did not speak the language and had no obvious prospect of succeeding. He continued to live and work in France after the respondent and children came to live in Scotland, although he visited them regularly. The respondent and children returned to France on two occasions after their move to Scotland. Certain of the children's belongings were in storage in France. The lease of the property in which the respondent and children were living in Scotland was in her name alone. Nothing in the communications between the parties indicates a joint intention to uproot themselves from France and relocate permanently to Scotland. The Lord Ordinary therefore granted the fathers application. That decision was reversed by an Extra Division of the Inner House of the Court of Session: [2014] CSIH 95; 2014 SLT 1080; [2014] Fam LR 131. The court considered that the Lord Ordinary had erred in law, in the passage which I have just quoted, in treating a shared parental intention to move permanently to Scotland as an essential element in any alteration of the childrens habitual residence from France to Scotland. This error had deflected him from a proper consideration of the factors relied upon by the mother. Considering the matter afresh, in the light of the guidance provided by this court, the Extra Division concluded that the children were habitually resident in Scotland at the material time: If the salient facts of the present case are approached in accordance with the guidance summarised earlier, the key finding of the Lord Ordinary is that the children came to live in Scotland. The real issue is whether there was a need for a longer period in Scotland before it could be held that there had been a change in their habitual residence. For our part, in the whole circumstances we would view four months as sufficient. (para 14) The law Article 1 of the Hague Convention provides that its objects include to secure the prompt return of children wrongfully removed to or retained in any contracting state. In terms of article 3, the removal or the retention of a child is to be considered wrongful where, in the first place, it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the state in which the child was habitually resident immediately before the removal or retention. Article 12 provides that, where a child has been wrongfully removed or retained in terms of article 3, and proceedings are commenced within one year before the judicial or administrative authority of the contracting state where the child is, the authority shall order the return of the child forthwith. Under article 13, the return of the child need not be ordered if it is established, inter alia, that the applicant for the order consented to the removal or retention. In relations between the member states of the EU other than Denmark, the Hague Convention is supplemented by the Brussels II Revised Regulation (EC) No 2201/2003 (the Regulation), which is in similar but not identical terms. The Regulation takes precedence over the Convention: see article 60. It is common ground that habitual residence, for the purposes of applying the Hague Convention and the Regulation, is to be determined in accordance with the guidance given by this court in the cases of A v A, In re L and In re LC (Children) (Reunite International Child Abduction Centre intervening) [2014] UKSC 1; [2014] AC 1038. It is also common ground that that guidance is consistent with the guidance given by the Court of Justice of the European Union as to the application of the Regulation in Proceedings brought by A (Case C 523/07) [2010] Fam 42, Mercredi v Chaffe (Case C 497/10PPU) [2012] Fam 22, and C v M (Case C 376/14PPU) [2015] Fam 116. judgment of the Court of Justice in Proceedings brought by A: In A v A, Lady Hale drew attention at para 48 to the operative part of the 2. The concept of 'habitual residence' under article 8(1) of Council Regulation (EC) No 2201/2003 must be interpreted as meaning that it corresponds to the place which reflects some degree of integration by the child in a social and family environment. To that end, in particular the duration, regularity, conditions and reasons for the stay on the territory of a member state and the family's move to that state, the child's nationality, the place and conditions of attendance at school, linguistic knowledge and the family and social relationships of the child in that state must be taken into consideration. It is for the national court to establish the habitual residence of the child, taking account of all the circumstances specific to each individual case. (p 69) Lady Hale also noted at para 50 the need to focus upon the primary carer, rather than the child, in cases where the child is an infant. As the Court of Justice explained in Mercredi v Chaffe: An infant necessarily shares the social and family environment of the circle of people on whom he or she is dependent. Consequently, where . the infant is in fact looked after by her mother, it is necessary to assess the mother's integration in her social and family environment. In that regard, the tests stated in the court's case law, such as the reasons for the move by the child's mother to another member state, the languages known to the mother or again her geographic and family origins may become relevant. (para 55) In the circumstances of the present case, it is also important to note what was said by Lady Hale in relation to passages in Mercredi v Chaffe which appeared to import a requirement of permanence for residence to be habitual. In particular, in para 51 of Mercredi v Chaffe the Court of Justice stated: In that regard, it must be stated that, in order to distinguish habitual residence from mere temporary presence, the former must as a general rule have a certain duration which reflects an adequate degree of permanence. However, the Regulation does not lay down any minimum duration. Before habitual residence can be transferred to the host state, it is of paramount importance that the person concerned has it in mind to establish there the permanent or habitual centre of his interests, with the intention that it should be of a lasting character. Accordingly, the duration of a stay can serve only as an indicator in the assessment of the permanence of the residence, and that assessment must be carried out in the light of all the circumstances of fact specific to the individual case. In A v A, Lady Hale commented at para 51: At first instance in DL v EL [2013] FLR 163, Sir Peter Singer compared the French and English texts of the judgment, which showed that the French text had almost throughout used stabilit rather than permanence and in the one place where it did use permanence it was as an alternative to habituelle: paras 71 et seq. It is therefore the stability of the residence that is important, not whether it is of a permanent character. There is no requirement that the child should have been resident in the country in question for a particular period of time, let alone that there should be an intention on the part of one or both parents to reside there permanently or indefinitely. As Lady Hale observed at para 54 of A v A, habitual residence is therefore a question of fact. It requires an evaluation of all relevant circumstances. It focuses upon the situation of the child, with the purposes and intentions of the parents being merely among the relevant factors. It is necessary to assess the degree of integration of the child into a social and family environment in the country in question. The social and family environment of an infant or young child is shared with those (whether parents or others) on whom she is dependent. Hence it is necessary, in such a case, to assess the integration of that person or persons in the social and family environment of the country concerned. The essentially factual and individual nature of the inquiry should not be glossed with legal concepts which would produce a different result from that which the factual inquiry would produce. In particular, it follows from the principles adopted in A v A and the other cases that the Court of Appeal of England and Wales was right to conclude in In re H (Children) (Reunite International Child Abduction Centre intervening) [2014] EWCA Civ 1101; [2015] 1 WLR 863 that there is no rule that one parent cannot unilaterally change the habitual residence of a child. Finally, it is relevant to note the limited function of an appellate court in relation to a lower courts finding as to habitual residence. Where the lower court has applied the correct legal principles to the relevant facts, its evaluation is not generally open to challenge unless the conclusion which it reached was not one which was reasonably open to it. The present case Counsel for the father sought to persuade this court that there had been no error of approach by the Lord Ordinary, and that the Inner House had therefore not been entitled to interfere with his assessment. I am unable to accept that submission. In the salient passage in his judgment, quoted earlier, the Lord Ordinarys focus was entirely upon whether there had been a joint decision to move permanently to Scotland. He began by expressing his conclusion, at para 7: I conclude from the evidence and productions presented that the stay of the respondent and the two children in Scotland was to be of limited duration, consisting of the period of her maternity leave. He then referred to aspects of the evidence which bore upon that issue, stating that he did not regard the sale of the family home in France as evidencing a joint intention to leave France for good, and that he was not persuaded that there was a joint decision to uproot themselves from France and relocate permanently to Scotland. In that regard, he referred to the fathers business interests in France, his limited command of English, the fact that he continued to live and work in France, the fact that the mother and children had visited him there, the fact that certain of the children's belongings were in storage in France after the [mother] and children came to live in Scotland, and the fact that the lease of the house in Scotland was in the mothers name alone. He then concluded his discussion of the issue of habitual residence: Nothing in the communications between the parties indicates a joint intention to uproot themselves from France and relocate permanently to Scotland. In determining the case on this basis, the Lord Ordinary failed to apply the guidance given in the authorities. As I have explained, parental intentions in relation to residence in the country in question are a relevant factor, but they are not the only relevant factor. The absence of a joint parental intention to live permanently in the country in question is by no means decisive. Nor, contrary to counsels submission, is an intention to live in a country for a limited period inconsistent with becoming habitually resident there. As was explained in A v A, the important question is whether the residence has the necessary quality of stability, not whether it is necessarily intended to be permanent. The Lord Ordinarys exclusive focus on the latter question led to his failing to consider in his judgment the abundant evidence relating to the stability of the mothers and the childrens lives in Scotland, and their integration into their social and family environment there. Counsel for the father further argued that the Extra Division had themselves fallen into error, in treating the critical issue as being whether it was necessary for the mother and children to have spent a longer period in Scotland before the children could be said to have become habitually resident there. The Extra Division had, it was argued, answered that question without themselves addressing the truly critical issue, namely whether the children retained habitual residence in France immediately before 20 November 2013. They had erroneously focused only on the childrens circumstances in Scotland, and had left out of account the agreement between their parents as to the limited duration of the stay in Scotland, and their parents intentions. I do not find that submission persuasive. The Extra Division proceeded on the basis that the stay in Scotland was originally intended to be for the 12 months maternity leave, that much being uncontroversial. They therefore assumed, in the fathers favour, that the stay in Scotland was originally intended to be of limited duration. Their remark that the real issue was whether there was a need for a longer period than four months in Scotland, before it could be held that the childrens habitual residence had changed, followed immediately upon their statement: If the salient facts of the present case are approached in accordance with the guidance summarised earlier, the key finding of the Lord Ordinary is that the children came to live in Scotland. In other words, following the childrens move with their mother to Scotland, that was where they lived, albeit for what was intended to be a period of 12 months. Their life there had the necessary quality of stability. For the time being, their home was in Scotland. Their social life was there. Their family life was predominantly there. The longer time went on, the more deeply integrated they had become into their environment in Scotland. In that context, the question the Extra Division asked themselves did not indicate any error of approach. Nor did their answer: For our part, in the whole circumstances we would view four months as sufficient. The Extra Division therefore considered the evidence on a proper understanding of the nature of habitual residence. In the light of the evidence before them, their conclusion that the children were habitually resident in Scotland at the material time is one which they were entitled to reach. Other issues Counsel for the mother took the opportunity of this appeal to raise the question whether there had been any wrongful retention of the children in Scotland. It was argued that the bringing of the residence proceedings did not amount, implicitly or otherwise, to a wrongful retention within the meaning of the Hague Convention. That issue was not raised in the courts below, and it does not arise for decision by this court: given the conclusion that the children were habitually resident in Scotland at the material time, they cannot have been wrongfully retained there. There was also discussion in the courts below of the question, under article 13 of the Hague Convention, whether the father had consented to the childrens retention in Scotland. Given my conclusion on the issue of habitual residence, that question also does not arise, and need not be considered. Conclusion For these reasons, I would dismiss the appeal.

This appeal concerns the application of Article 3 of the Hague Convention on the Civil Aspects of International Child Abduction (the Convention). Under Article 3 it is unlawful to remove or retain a child in breach of rights of custody attributed to a person under the law of the state in which the child was habitually resident immediately before removal or retention. This case concerns two small children, born and raised in France, who were brought to Scotland by their mother in July 2013 with the consent of their father, who remained in France. The mother and children were to live in Scotland for the period of about a year. In November 2013 the relationship between the parents ended. On 20 November 2013 the mother commenced proceedings in which she sought a residence order in respect of the children and an interdict against the father removing them from Scotland. The father argued that the initiation of those proceedings was a wrongful retention within the meaning of the Convention on the basis that the children were habitually resident in France immediately before proceedings commenced. The Outer House of the Court of Session concluded that the children were still habitually resident in France on 20 November 2013. This judgment was based on the fact that the move to Scotland had not been intended by both parents to be permanent. The Inner House of the Court of Session reversed the Outer Houses decision on the basis that shared parental intention to move permanently to Scotland was not an essential element in any alteration of the childrens habitual residence. The Inner House concluded that the children were habitually resident in Scotland at the material time. The father appealed to the Supreme Court on the basis that the Outer House had been correct, and that the Inner House had in any event erred in its approach. The mother argued that there had in any event been no wrongful retention. The Supreme Court unanimously dismisses the appeal. The Court considers that, for the purposes of habitual residence, the stability of residence, rather than its degree of permanence, is important. There is no requirement that the child should have been resident in the country in question for a particular period of time or that one or both parents intend to reside there permanently or indefinitely. As the Court has previously held in a series of cases, habitual residence is a question of fact which requires an evaluation of all relevant circumstances [16]. In determining habitual residence, the focus is upon the situation of the child, with the intentions of the parents being merely one of the relevant factors. It is necessary to assess the degree of the integration of the child (or, in the case of an infant or young child, the degree of integration of those on whom the child is dependent) into a social and family environment in the country in question. There is no rule that one parent cannot unilaterally change the habitual residence of a child [17]. In the present case, the children were habitually resident in Scotland within the meaning of the Convention. The absence of a joint parental intention to live permanently in Scotland was not decisive, nor was an intention to live in a country for a limited period inconsistent with becoming habitually resident there. The important question is whether the residence has the necessary quality of stability, not whether it is necessarily intended to be permanent [21]. Following the childrens move with their mother to Scotland, their life there had the necessary quality of stability. Their home was Scotland for the time being, their social life and much of their family life was there. The longer time went on, the more integrated they became into their environment in Scotland [23]. Given this conclusion, the question of wrongful retention did not arise [25].

The issue raised by this appeal is the extent of an exclusive prescriptive right (ie an exclusive right obtained through a long period of use) to take cockles and mussels from a stretch of the foreshore on the east side of the Wash, on the west coast of Norfolk. The factual and procedural background An outline of the basic facts The proprietor of the exclusive right in question is the second respondent, Mr Michael Le Strange Meakin, who is Lord of the Manors of Snettisham and Heacham (the Manors) and the owner of a substantial amount of land adjoining the east side of the foreshore. The land, the right to fish and the Lordships have been in the ownership of the Le Strange family for many generations, and we shall refer to Mr Le Strange Meakin and his predecessors as the Estate. In 1970, the Estate granted a lease of the exclusive right to the first respondent, Mr John Loose, who is still holding over under that lease. The appellants are individuals and companies who operate fishing boats out of Kings Lynn in Norfolk. During the summer of 2007, 13 of the appellants boats fished for cockles in locations claimed by the respondents to be within the area of the exclusive fishery vested in the Estate. Some of the appellants fishing activities took place at or near an area known as Stubborn Sand, and some at or near an area known as Ferrier Sand. Both Stubborn Sand and Ferrier Sand are now attached to the foreshore, but they had not been so attached in the past. Although we were provided with a large number of detailed plans, the following summary of the position on the ground should suffice for present purposes. The stretch of foreshore between Wolferton Creek to the south and Thornham Creek to the north (the Foreshore) is irregular in shape, but it can be treated as going from north to south, with the Wash to the west, and land (owned by the Estate) to the east. There are a number of sandbanks which are separated from the Foreshore at low tide. The evidence establishes that some sandbanks which are currently attached to the Foreshore at any rate at low tide had previously been separated from it. The shifting nature of sandbanks is a feature of the shore on the eastern side of the Wash, and, at least in that part of the Wash with which this appeal is concerned, the trend over the past 400 years or more appears to have been for previously separated sandbanks to become joined to the Foreshore with the passage of time. Examples include Stubborn Sand, which is now attached to the Foreshore but which was separated from it until sometime in the 18th century; Ferrier Sand, which only became attached to the Foreshore around 50 years ago; and Blackguard Sand, which only became attached within the past 20 years or so. The attachment to the Foreshore of previously separated sandbanks appears to have occurred as a result of the gradual silting up of channels which had separated the sandbanks from the Foreshore. It is also clear that the low water marks (ie the lines showing the edge of the sea at low water) of the Foreshore have moved significantly with the passage of time. At least in recent periods the low water marks have, in very general terms, moved further west ie seaward, further away from the shore. We refer to low watermarks in the plural because, of course, the extent of low water varies from time to time. For present purposes, four different types of low water measurement should be mentioned. (i) Mean low tide, the average of neap and spring low waters, (ii) mean spring low tide, the average of spring low waters, (iii) mean neap low tide, the average of neap low waters, and (iv) the lowest astronomical tide, the most extreme neap low water, which occurs every 18.6 years. (Extreme low water was also referred to in oral argument, when it was said to be the same as lowest astronomical tide, but that was corrected subsequent to the hearing. However, it did not feature in argument as a separate relevant measurement, save by way of explanation of a line on a chart). There are, unsurprisingly, high water equivalents of these four low water measurements. The breeding and other habits of cockles and mussels differ to some extent, but it is common ground that there is no need for present purposes to make any distinction between the two types of shellfish (and any reference to shellfish hereafter is to cockles and mussels). Shellfish are to be found on the foreshore, but they are also to be found in the shallow seas. At least in the past, shellfish were taken entirely from the foreshore at low tide by individuals coming by foot from the shore and gathering them by hand. In recent times, however, with the development of more sophisticated and aggressive fishing techniques, in particular suction dredging, shellfish are increasingly gathered from vessels at a time when the foreshore is not exposed by the tide as was done recently by the appellants as referred to in para 3 above. The issues between the parties As mentioned above, it is accepted that the Estate is the owner by prescription of the exclusive right to take shellfish over part of the Foreshore (the Right), but what divides the parties is the extent of the area over which it can claim the Right (the Area). The southern and northern boundaries of the Area are not in dispute: they are Wolferton Creek and Thornham Creek respectively. The disputes involve (i) the location of the western, seaward, boundary and (ii) issues relating to former sandbanks near the eastern, landward, boundary. The dispute over the western, seaward, boundary is whether the Estates Right extends to mean low tide, mean low water spring tide, lowest astronomical tide, or some other mark. At first instance, Sir William Blackburne held that it was the mean spring low water, whereas the Court of Appeal concluded that it was the lowest astronomical tide mark. The appellants primarily contend that the western boundary should be that shown in the Lynn Deeps Fishery Order 1872 (the 1872 Order), or alternatively mean low water, whereas the respondents support the conclusion reached by the Court of Appeal. As to the issue relating to sandbanks, the appellants contend that, unless the respondents can establish that the Estates prescriptive Right extended to a sandbank before it became attached to the Foreshore, the Right cannot extend to such a sandbank simply because it becomes attached to the Foreshore. The respondents contend that the Right can and does so extend, and in that connection they rely on two arguments. The first is that the Right is a prescriptive right which applies to the Foreshore as it is constituted from time to time. The second argument is that, if this first argument is wrong, the respondents are entitled to invoke the doctrine of accretion, so that a sandbank becomes, as it were, added to the Area the subject of the Right by operation of law, when it becomes attached to the Foreshore. Sir William Blackburne and the Court of Appeal accepted both the respondents arguments. The factual evidence and previous litigation The evidence included a number of charts and maps going back to 1588, which, as mentioned, clearly establish that (i) the location of the low and high water marks moved significantly over time, and (ii) various sandbanks, which were initially separated therefrom, became attached to the Foreshore as channels became silted up. The evidence also included a number of witness statements, which concentrated on both relatively recent events and analyses of the effect of earlier proceedings or deductions made from historic documents, some private and some public. The private documents include a number of leases of exclusive fishing rights granted by the Estate between 1857 and 1970. These leases describe the extent of the exclusive fishery in different terms. For instance, the 1857 lease referred to the extreme low water mark of the sea, and the 1970 lease described the boundary as so far as may be worked without boats at extreme low water. A 1903 lease identified the seaward boundary as the ordinary low water mark. Other leases were less precise as to the boundary, some simply referring to the foreshore and another to the foreshore and so much of the seabed that belongs to [the lessor]. The 1857 lease was for a term of ten years, and, during its currency, a successful action for trespass at the Norfolk Summer Assize was brought, for some reason in the name of the Estate rather than the lessee, against a Mr Rowe who had taken mussels from the Foreshore between high and low water Le Strange v Rowe (1866) 4 F & F 1048. In his direction to the jury in that case, Erle CJ said at p 1056 that there is evidence of what to my mind was a very strong act of ownership in respect to the taking of mussels. The 1872 Order was the first of a number of orders regulating fishing in the eastern side of the Wash. It applied for 60 years. The boundary of the exclusive fishery in the 1872 Order was described as the line of ordinary low water mark, by the western side of the Stubborn Sand. The chart attached to the 1872 Order indicated that the seaward extent of the exclusive fishery vested in the Estate was at least as far seaward as mean spring low water (at least according to Bridge LJ in the judgment referred to in paras 22 and 23 below), and that that fishery included Stubborn Sand (which was by then joined to the Foreshore) but not Ferrier Sand (which was still separate from the Foreshore at that time). The Estate was involved in the drafting of the 1872 Order (including the attached chart), which also established the Lynn Fisheries Committee. The 1872 Order was made under the Sea Fisheries Act 1868 (31 & 32 Vict C45), which was enacted following a national review of fisheries, and was intended to bring some clarity to the existence and extent of coastal private fishing rights. Section 48 of the 1868 Act specifically provided that that no order made under that Act shall take away or abridge any Right of Several [ie exclusive] Fishery enjoyed by any Person under Prescription or Immemorial Usage, without the consent of such Person. In 1885, proceedings were brought by the Estate against the local authority, Lynn Corporation, with a view to establishing the southern boundary of the fishery Le Strange v Lynn Corporation. The decision of Lord Coleridge CJ, in favour of the Estate, was only reported in a local newspaper, but we were shown a fairly full note of the judgments of the Divisional Court, who refused Lynn Corporations application for a new trial. The propositions which this case supports for the purpose of the instant proceedings are limited, but may be summarised as follows: (i) the Estate claimed its exclusive Right extended over Stubborn Sand but not over Ferrier Sand or other unconnected sandbanks, (ii) the decision effectively established the northern and southern boundaries of the Area the subject of the Right, and (iii) the proceedings illustrate how the Estate has taken steps to protect the Right over the Area. The most recent lease was granted in 1970 for a term of three years to Mr Loose, who continues to hold over 45 years later. In 1971, a Mr Castleton took mussels from a location near Stubborn Sand, seaward of the mean low water mark, but landward of the mean low water springs mark. This led to proceedings against him by Mr Loose for declaratory, injunctive and financial relief. The proceedings were heard in the Kings Lynn County Court by His Honour Judge Moylan, who, in a judgment given in January 1977, found for Mr Loose. He decided that the Estate, as the Lords of the Manors, had acquired the ownership of an exclusive fishery over the Foreshore by prescription, and that the western, seaward, boundary of the area concerned was at least as far from the shore as the mean spring low water mark (as Mr Loose claimed). Judge Moylans decision was subsequently upheld by the Court of Appeal see Loose v Castleton (1978) 41 P & CR 19. Judge Moylans judgment is only available in draft form, but it is clear and coherent, and shows that he had little hesitation in reaching his conclusion, saying that the evidence builds up to a very strong case that for nearly the last four centuries the Lords of the Manors have acted as the owners and possessors of the soil of the Foreshore and of a several fishery in the waters over that soil. Some of the documents of title relating to each of the Manors included specific references to fisheries in the case of one of the Manors as long ago as the early 12th century and in the case of the other in the 16th century; and, while other documents of title did not specifically refer to fisheries, they included rights in general terms which could have extended to fisheries. Judge Moylan also referred to acts of ownership, possession and user supporting the existence of the Right, on the part of the Lords of the Manors going back to the early 17th century, including acts against third parties who were fishing on the Foreshore, leases granted of the fishing rights claimed, and records of expenditure on preserving those fishing rights. Judge Moylan went on to accept that, as the most successful mussel beds are found between mean low water and low water mean springs, the seaward boundary of the fishery is and always has been at least as far out as the line of low water mean springs wherever that may be from time to time, which is what the Estate had claimed. The Court of Appeal upheld Judge Moylans decision for reasons given by Bridge LJ, with whom Megaw and Ormrod LJJ (both of whom gave short judgments) agreed. The main issue on the appeal was whether the evidence of title relating to the two Manors was such as to undermine Judge Moylans conclusion. In that connection, Bridge LJ said at p 30 that the evidence was sufficient to raise the presumption of a lost grant dating from some period before the end of the reign of Henry II. At p 32, Bridge LJ rejected the contention that there was a rule of law that the seaward boundary was limited to the mean low water mark. On the evidence, he agreed with Judge Moylan that the boundary was mean spring low water, but, as Judge Moylan made clear, Mr Looses case was that it was at least mean spring low water. In concluding where the seaward boundary of the Area lay, Bridge LJs reasoning was controversial. Having given two reasons which were each based on evidence of fact which had not been referred to, let alone specifically accepted, by Judge Moylan, Bridge LJ said this at p 33: perhaps most importantly of all, there was clear evidence that the best mussel grounds lay between the low water mark of ordinary tides and the low water mark of spring tides. In the light of that evidence, one is entitled to ask oneself the question: is it really to be supposed that, when the Crown was granting to favoured subjects a valuable right such as a several fishery relating to shellfish , it was doing so by reference to an artificial line on a map mean low water at ordinary tides , and doing so in order to deny to the favoured subjects the primary benefit that one would suppose was intended to be conferred on them, namely the benefit of exploiting the fishery where it could best be exploited? The answer to this question is, obviously: no . Successive Fishery Orders were made after the 1872 Order expired. The most recent is the Wash Fishery Order 1992 (SI 1992/3038) (the 1992 Order), which was made pursuant to the Sea Fisheries (Shellfish) Act 1967. So far as the legal effect of the 1992 Order is concerned for present purposes, it included in article 16 a statement that [n]othing in this Order shall affect prejudicially any right of [the Estate] and it also stated that nothing herein contained shall be deemed to be a consent to or be construed to recognise the existence of any right, power or privilege of the [Estate]. However, during the currency of the negotiations leading up to the 1992 Order, and relying on Loose v Castleton, the Estate successfully persuaded the relevant Fisheries Committee and the Crown Estate that certain sandbanks which were part of the foreshore but had previously been detached from it, including Ferrier Sand, should be excluded from their respective jurisdictions. This caused resentment among the fishing community in the location, and this then led to the testing of this outcome by the appellants fishing in the areas described in para 3 above, and this in turn resulted in the instant proceedings. The proceedings below At the hearing before Sir William Blackburne, the appellants (unsurprisingly) accepted Judge Moylans finding that there was an exclusive, or several, fishery vested in the Estate, which had been let to Mr Loose. However, they concentrated on (i) an aspect which was not conclusively determined in Loose v Castleton, namely the seaward boundary, and (ii) another aspect which appears to have been barely touched on in Loose v Castleton, namely the sandbanks which had formerly been separated from the Foreshore, but which had become attached thereto. In relation to the formerly detached sandbanks, there was no suggestion by the respondents that the Estate had exercised an exclusive right to take shellfish over any of the sandbanks which, at least on the evidence currently available, had previously been separated from the Foreshore, with the sole exception of Stubborn Sand. Thus, with the exception of Stubborn Sand, it was common ground that former sandbanks (such as Ferrier Sand and Blackguard Sand), so long as they were separated from the Foreshore, had not been treated as part of the exclusive fishery claimed by the respondents. It was also accepted that they had been available to members of the public for fishing as of right, and, at least in the case of some of those sandbanks, that members of the public had actually taken shellfish from them within living memory. The appellants contended at trial (i) that the seaward boundary of the Area was the mean low water mark, and (ii) that none of the formerly separated sandbanks (including Stubborn Sand) was subject to the Right. In an instructive judgment, Sir William concluded that (i) mean spring low water marked the boundary of the Area, on pragmatic grounds but also following Loose v Castleton, and (ii) sandbanks, which were formally separated from the Foreshore, became part of the Area when they became joined to the Foreshore, on the alternative grounds that (a) the prescriptive right extended to the Foreshore as it was physically constituted from time to time, or (b) if the prescriptive right was limited to the foreshore in its original state, it nonetheless extended to previously separated sandbanks as they joined to the foreshore, pursuant to the doctrine of accretion [2013] EWHC 901 (Ch). On the appellants appeal and the respondents cross appeal, the Court of Appeal held, for reasons given in a clear judgment by Moore Bick LJ, that (i) allowing the cross appeal, the seaward boundary of the Area was the lowest astronomical tide mark, and (ii) dismissing the appeal, Sir William was right about the former sandbanks being included in the Area for the reasons which he gave [2015] Ch 547. On this appeal, the respondents adhere to their position below and contend that the Court of Appeal was right on both aspects, essentially for the reasons given by Moore Bick LJ. The appellants, on the other hand, have changed their position, albeit only slightly. As to the seaward boundary, the appellants contend that it should be as marked on the chart attached to the 1872 Order, or alternatively that it should be mean low water. So far as the formerly separated sandbanks are concerned, while the appellants basic case remains as it was (namely that neither ground for accepting the respondents case is sustainable), they now accept that Stubborn Sand is included in the Area the subject of the Estates exclusive fishery, although they maintain their contention that Ferrier Sand, Blackguard Sand and any other sandbanks which have become joined to the foreshore within living memory, are not. The Crown Estate Commissioners have since 1961 been responsible for managing the Crown Estate, and therefore have an obvious interest in the outcome of this case. They intervene in this appeal, and support the appellants case on the issue of whether previously separated sandbanks, which have now attached to the foreshore, should be treated as subject to the Estates right, contending that they should not be so treated. Prescription: the applicable legal principles The right to fish on the foreshore Piscary is the legal name of a right to catch and take away fish, and it is an example of a right over land known as a profit prendre (or, more simply, a profit), which is a right to go on to the land of another to remove items (eg gravel, timber, game). Profits, like easements (a different category of rights over land, which include rights of way, rights of light and rights of water), are recognised in common law and statute as legal rights known as incorporeal hereditaments. A right of piscary which does not limit the quantity of fish which can be taken to the requirements or benefit of neighbouring land, is in law known as a profit in gross, and, unlike a right of piscary which is so limited (or a right of way or a right to light), it is capable of surviving independently of any land owned by the grantee see Harris v Earl of Chesterfield [1911] AC 623. Historically, it has long been accepted that the Crown is prima facie the owner of the bed of the sea, and of the foreshore so far as the tide flows and reflows. Prima facie because there is nothing to prevent the Crown from alienating (ie transferring away its ownership of) any part of the foreshore or seabed, and it has done so in respect of much of the coast of England and Wales. However, as Sir Matthew Hale wrote in De Jure Maris et brachiorum ejusdem (1888 ed), p 11, the common people of England have regularly a liberty of fishing in the sea or creeks or arms thereof, as a public common of piscary. This is because, since time immemorial, the public has fished for fish and shellfish by right in those areas, but not in non tidal waters. Nonetheless, as Hale went on to explain, the Crown could, by its prerogative, exclude the public from exercising that right, and grant the right of fishery to an individual or individuals exclusive of that common liberty. It has been said on a number of occasions that this prerogative power was irrevocably lost in 1215 following the sealing of Magna Carta see per Blackstone, 2 Bl (Comm), p 59, and, more recently, per Willes J giving the unanimous advice of the judges in Malcolmson v ODea (1863) 10 HL Cas 593, 618, where he added that this did not affect rights which were made by Act of the Crown not later than the reign of Henry II, ie not later than 1189, when Richard I succeeded him. This advice was held by Lord Blackburn in Neill v Duke of Devonshire (1882) 8 App Cas 135, 178 to settle the law, and it was described as unquestioned law by Viscount Haldane LC in Attorney General for the Province of British Columbia v Attorney General for the Dominion of Canada [1914] AC 153, 170. It should also be mentioned that, while it is accepted that the Crown cannot create an exclusive fishery, there is no reason why Parliament cannot do so or authorise the executive to do so, and, as Sir William Blackburne explained at [2013] EWHC 901 (Ch), paras 15 26, it has done so in relation to many areas round the United Kingdom, including the Wash. The grant of an exclusive fishery (whose technical description is, as already explained, somewhat confusingly, a several fishery) over a tidal area is not really a grant of the right to take fish from that area, as the grantee would presumably have that right in his capacity as a member of the public. Rather, it is the grant of a right to exclude anyone else from fishing over that area. Classically, such a right would be granted by deed, but, as with many rights over property, it can be acquired by long use ie by prescription. Obtaining rights by prescription As Lord Hoffmann said in R v Oxfordshire County Council, Ex p Sunningwell Parish Council [2000] 1 AC 335, 349, [a]ny legal system must have rules of prescription which prevent the disturbance of long established de facto enjoyment. Given that a prescriptive right is based on long use, the nature and extent of a prescriptive right depends on the nature and extent of the long established use. As Bovill CJ put it in Williams v James (1867) LR 2 CP 577, 580, [i]n all cases of this kind which depend upon user the right acquired must be measured by the extent of the enjoyment which is proved. The quality of the use required in order to establish a prescriptive right to a profit or an easement is embodied in the expressions, which have been held to be synonymous in their meaning and effect, namely as of right and nec vi, nec clam, nec precario (ie not secretly, not by force, and not with permission). As Lord Walker put it in R (Lewis) v Redcar and Cleveland Borough Council (No 2) [2010] 2 AC 70, para 30, persons claiming to have acquired a right by prescription must by their conduct bring home to the landowner that a right is being asserted against him, so that the landowner has to choose between warning the trespassers off, or eventually finding that they have established the asserted right against him. The period for which use must be enjoyed to establish a prescriptive right to a profit or an easement depends on the nature of the right claimed. The law in that connection is a mixture of inconsistent and archaic legal fictions, practical if sometimes haphazard judge made rules, and (in the case of easements and some profits but not profits in gross) well meaning but ineptly drafted statutory provisions. The common law originally fixed the requisite prescription period as being from time immemorial. In due course, this came to mean from before 1189, as discussed by Cockburn CJ in Bryant v Foot (1867) LR 2 QB 161, 179 182, and as explained by Lord Hoffmann in Sunningwell at pp 349 350. Because of the impracticality of requiring evidence of use going back to the end of the 12th century, the judges developed the rule that use which can be shown to have been enjoyed as of right for 20 years continuously or else since before the time of living memory (ie there is no living witness who can speak to a period when it was not enjoyed) would suffice to establish a prescriptive right see eg Aynsley v Glover (1875) 10 Ch App 1023 and RCP Holdings Ltd v Rogers [1953] 1 All ER 1029. However, such a claim could be defeated where it could be proved that the origin of the enjoyment must have been more recent than 1189 see Bury v Pope (1586) Cro Eliz 118 and Bowring Services Ltd v Scottish Widows Fund and Life Assurance Society [1995] 1 EGLR 158, 160. Because even this somewhat more relaxed approach to common law prescription was regarded as imposing too rigid a test in some cases, the judges then developed the more flexible doctrine of lost modern grant, which can be relied on where there has been upward of 20 years uninterrupted enjoyment even if there is direct evidence that no such grant was in fact made per Buckley LJ in Tehidy Minerals Ltd v Norman [1971] 2 QB 528, 552. However, as he also explained, the doctrine cannot be relied on if for some reason, such as incapacity on the part of [the putative grantor], the existence of the grant is impossible. Meanwhile, after the judiciary had developed common law prescription and lost modern grant, the legislature intervened and enacted the notoriously poorly drafted Prescription Act 1832 (2 & 3 Will 4 c71). The 1832 Act has not replaced the common law, but has added a further basis for claiming a right by prescription. The Right in this case is based on the uncontested fact that the Estate (and their lessees and agents) have excluded the public from at least part of the area over which they claim to have established a right back to a period before the time of living memory, and there is no evidence to suggest that the Right could not have been granted before 1215. No specific reliance has been placed by the respondents on the 1832 Act. This may be because it is assumed that the present case involves a profit in gross (as, by virtue of the words the occupiers of the tenement in respect whereof the same is claimed in section 5, it appears that that statute does not extend to a profit in gross). Or it may be because it is assumed that the 1832 Act does not take matters further than common law prescription, in the light of the effect of Magna Carta, as described in paras 33 and 34 above. Lost modern grant was not relied on, presumably for this latter reason. Accordingly, it is contended by the respondents (and not challenged by the appellants) that the Right is founded on common law prescription. In the light of the arguments in this case, it is worth quoting another passage in the advice of Willes J in Malcolmson. At p 618, he said that once a prescriptive right is established the result is, not that you say, this is a usurpation, for it is not traced back to the time of Henry II, but that you presume that the fishery being reasonably shown to have been dealt with as property, must have become such in due course of law, and therefore must have been created before legal memory. In other words, because the several fishery is treated today as having been the subject of a valid grant at some point before living memory, the legal fiction that the right is treated as granted before 1189 should not be treated as more than a metaphor. As Lord Mansfield said in Jones v Randall (1774) Lofft 384, 385, [t]he law would be a strange science if we must go to the time of Richard I and see what is law. The extent of a prescriptive right When considering the arguments relating to both the seaward boundary and the formerly separated sandbanks, it is vital to bear in mind that the basis upon which the Estate claims to have obtained its right of exclusive fishing is by prescription. It is therefore appropriate to consider the precise nature of the inquiry involved in an exercise of establishing the nature and extent of a prescriptive right. It is true that a prescriptive right can be said to be based on a notional grant, but that grant is not merely notional: it is fictional. The essential point is that such a right is based not on an imagined document, but on actual use as of right, namely use which is such as to bring home to the landowner that a right is being asserted against him, as Lord Walker said in the Redcar and Cleveland Borough Council case at para 30. In other words, in order to identify the nature and extent of the right obtained by prescription, one has to examine the actual use as of right upon which it is said to be based. The correct question is therefore not what the notional grant would have been likely to be, let alone what would have been the intention of the notional grantor; it is what is the extent of the user as of right for the requisite period. (In many cases, of course, these questions will produce the same answer). Thus, as is reflected by what was said by Bovill CJ in Williams v James, the general rule is accurately set out in Gale on Easements (19th ed (2012), para 9 03, discussing rights of way, but it is applicable to any right), namely where a right of way is acquired by user, the extent of the right must be measured by the extent of the user. Having said that, the extent of the right obtained by prescription has to be established bearing in mind practical reality. This is exemplified by the unum quid rule which was explained by Lord Blackburn (who said that it was as much the law in a Scotch as in an English Court) in Lord Advocate and the Trustees of the Clyde Navigation v Lord Blantyre (1879) 4 App Cas 770, 791 792 in these terms: [A]ll that tends to prove possession as owners of parts of the tract tends to prove ownership of the whole tract; provided that there is such common character of locality as would raise a reasonable inference that if the barons possessed one part as owners they possessed the whole, the weight depending on the nature of the tract, what kind of possession could be had of it, and what kind of possession was proved. This was said in connection with possession and ownership of land, but it applies equally to rights over land. Thus, the rule was specifically applied to a prescriptive claim for a several fishery in Neill v Duke of Devonshire, where at p 151, Lord Selborne LC said that [i]f the fishery of the whole river was what has sometimes been called a unum quid, there can be no doubt that evidence of acts of ownership and enjoyment in any part of it would be applicable to the whole. As Lord OHagan emphasised at p 165, reflecting what Lord Blackburn had said in Blantyre, whether evidence of long enjoyment of fishing over one part of a river will extend to another part, or to other parts, must of course vary according to circumstances, and [w]hat may demonstrate it, in one case, may be quite inadequate for that purpose, in another. A shifting prescriptive right Another issue which should be mentioned in relation to both the seaward boundary and the sandbanks in the present case is whether the property over which a prescriptive right is established can change. The concept of a conveyance of, or a grant of a right over, a shifting, or fluctuating, area of land is not offensive to any principle of property law, provided that the land in question can be ascertained at any time with reasonable precision. As Sir Robert Megarry V C pointed out in Baxendale v Instow Parish Council [1982] Ch 14, 22, the contention that there cannot be such a thing as a shifting freehold is undermined by what is stated in no less an authority than Coke on Littleton see Co Litt 48b, p 494 which plainly supports the argument that what was conveyed by a particular deed was the foreshore as it existed from time to time. As Sir Robert went on to hold, and as seems supported by at least the majority of the court in Scratton v Brown (1825) 4 B & C 485, when it comes to construing a conveyance of (or indeed a deed of grant over) the foreshore, it is a matter of interpretation whether what is conveyed (or granted) is the foreshore (or a right over the foreshore) at the time of the document or the foreshore as it exists from time to time. If a right over land, the identity of which shifts, can be the subject of an express grant, then it appears to us to follow that, as has been assumed on all sides below, there is no reason why that should not apply equally to a right over land obtained by prescription. Presumptions in the case of prescriptive rights against the Crown It is well established that, unlike other instruments, grants by the Crown are not construed against the grantor (contra proferentem). Crown grants are construed most strictly against the grantee and most beneficially for the Crown, so that nothing will pass to the grantee but by clear and express words per Lord Birkenhead LC in Viscountess Rhonddas Claim [1922] 2 AC 339, 353. The reason for this is that the prerogatives of the Crown being conferred upon it for great purposes, and for the public use, it shall not be intended that such prerogatives are diminished by any grant, beyond what such grant by necessary and unavoidable construction shall take away per Sir William Scott in The Rebeckah (1799) 1 Ch Rob 227, 230. This principle has been more recently recognised by Lewison J in Crown Estate Comrs v Roberts [2008] 2 P & CR 255, paras 78 80. As the Court of Appeal rightly said, this rule has no part to play in a case such as this, where the right concerned was not granted by a document, but arises as a result of long use. However, in our view, the principle upon which the rule is based can, for what it is worth, properly be prayed in aid by the Crown in relation to a claim based on prescription, and therefore by the appellants in this case. It appears to us that that basic principle is that a court should not be too easily persuaded that the Crown has been deprived of a property or a right, given that the property or right is held for the public good. Therefore, in cases where it would otherwise be quite unclear whether a prescriptive right obtained against the Crown extended to certain property or certain rights, the principle may properly be invoked to justify the conclusion that it does not so extend. In the great majority of cases of prescription, as in most cases of express grant, this principle will take matters no further, as it is only where the extent of the right would otherwise be really unclear that the principle can come into play. There is, we would add, some force in the point that this principle should be given particular weight in relation to a prescriptive several fishery, given the importance accorded to the public right to fish as long ago as 1215. As Lewison J said in Roberts at para 115, [g]iven the importance of the fishing industry both in ancient times and also today several fisheries were not popular. Conclusions on the issues in this appeal Introductory The appellants have been realistic in accepting that the Estate has a several fishery on the Foreshore, in the light of the findings and judgments in the earlier cases, as well as the leases and the oral evidence before Sir William Blackburne. Both parties have been realistic in accepting that the location of the seaward boundary of the Area subject to the fishery has not been determined in previous proceedings (in Loose v Castleton, Mr Loose contended that it was at least as far out as the line of low water mean springs, which Judge Moylan accepted). Equally, they have been realistic in accepting that the issue whether the fishery extended to previously unattached sandbanks was not decided in previous proceedings. So far as the two issues on this appeal, the seaward boundary and the previously unattached sandbanks, are concerned, most of the relevant evidence had already been agreed before, or found by, Judge Moylan in Loose v Castleton. However, there was further and more detailed evidence adduced before Sir William Blackburne, particularly relating to the location of the Estates fishery at different times, fishing methods and tidal movements. The leases granted between 1857 and 1970 obviously support the Estates contention that it owned a several fishery, but, when it comes to identifying its eastern and western boundaries, they are imprecise and inconsistent. The Fishery Orders are expressly not intended to determine private rights. The maps and charts established facts described in paras 5 to 7 above, but are not of much further help. As to the more recent factual evidence, there were occasions when the appellants or other fishermen negotiated with representatives of the Estate or Mr Loose to take cockles from Ferrier Sand. However, the negotiations were quite insufficient in terms of frequency, period of time, and express terms to give rise to any arguable inference of a public acceptance of the existence of a several fishery over Ferrier Sand (and we doubt whether they could give rise to a several fishery in any event). The seaward boundary: a fluctuating boundary? As mentioned above, it is rightly common ground that the Estate has a prescriptive exclusive Right to take cockles and mussels within an Area of the foreshore between Wolferton Creek to the south and Thornham Creek to the north. It is clear that the seaward, western, extent of the boundary of that Area must be a low water mark. The first question is, logically, whether that boundary is a fixed boundary, or whether it is one which fluctuates with the relevant low mark. The second question is which of the various suggested low water marks is the appropriate boundary. So far as the first question is concerned, we consider that the assumption which was made below was correct, and that the seaward boundary of the Area the subject of the exclusive Right to take shellfish fluctuates with the passage of time as the low water mark moves. The Estate has exercised a prescriptive exclusive Right to take shellfish from the foreshore for a substantial period, during which the low water mark fluctuated to a significant extent over time, in circumstances where the evidence clearly establishes that the only way in which the shellfish were gathered was by individuals walking from the land when the tide was out. It is in those circumstances inherently very likely, indeed inevitable in terms of practical reality, that the putative Right would have been exercised over an area which was defined, or limited, by a shifting low tide mark. Thus, based on the inherently probable nature and extent of the actual exercise of the putative Right to fish by or on behalf of the Estate, we conclude that the boundary of the Area would have been low water as it was from time to time. This is not an application of the unum quid rule, but it involves an approach roughly akin to it. The natural unit of property so far as the exercise of the Right is concerned is the stretch of foreshore between high water and low water, and, as the land comprised within that unit moves with the shifting tides, one would expect, at least in the absence of good reason to the contrary, the exercise of the putative right to move correspondingly. As Sir Robert Megarry put it in Baxendale at p 25, one would expect sea grounds, oyster layings, shores and fisheries to follow the sea as it advances or retreats. Further, and importantly, it is not as if the existence of such a fluctuating right would have detrimentally affected any other interests, and in particular any public interests, of any significant value. We accept that the public would have enjoyed the right to take shellfish seaward of a low water mark boundary, and that right would be lost as, and to the extent that, the boundary shifted seaward. However, such a right would have been of no value, as nobody could have got access to the shellfish below the low water mark on foot, and, as explained in para 8 above, access from the sea for that purpose is of comparatively recent origin. In these circumstances, we cannot accept the appellants primary contention that the boundary of the Area is the low tidemark shown on the chart attached to 1872 Order, as this would mean a fixed seaward boundary to the Area. In any event, as already mentioned, the 1872 Order was made under legislation which provided in terms that it was not intended to delimit the extent of private fisheries (even though it is fair to say that there is some evidence which could be said to suggest that the tidemark shown on the chart was understood by some people at the time to identify the boundary of the Right). The seaward boundary: which low water mark? As to the second issue, namely the identity of the low water boundary of the Area, it is well established that the landward limit of the foreshore is the mean high water mark. In Attorney General v Chambers (1854) 4 De G M & G 206, 218, Lord Cranworth LC (who was assisted by Alderson B and Maule J) said that Lord Hale gives as his reason for thinking that lands only covered by high spring tides do not belong to the Crown, that such lands are for the most part dry and maniorable. Lord Cranworth then said that the reasonable conclusion is, that the Crowns right is limited to land which is for the most part not dry or maniorable. However, as is common ground between all parties to this appeal, there is no equivalent consensus as to where the seaward limit of the foreshore is located. Further, the reasoning of Lord Cranworth in the passage just cited does not cast much, if any, light so far as the seaward limit of the foreshore is concerned. Accordingly, the selection of the relevant low water mark which provides the boundary of the Area is a relatively open question. Not without some hesitation, we have come to the conclusion that the most satisfactory low water mark to select as the appropriate seaward boundary of the Area the subject of the Right is the lowest astronomical tide. That conclusion appears to us to produce the least arbitrary result and to be consistent with the unum quid principle (discussed in paras 46 and 47 above). Selecting the most extreme low water mark means that all parts of the Foreshore which are at any time uncovered by the sea are included in the Area, whereas any other selection involves some of those parts being excluded from the Area. And, as we see it, the unum quid principle would at least tend to suggest that one should assume, at least in the absence of good reasons to the contrary, that the Right was being exercised in respect of the whole of the Foreshore, as it was from time to time uncovered by the sea. Further, the alternative marks proposed (whether mean spring low water, as the Judge selected, or mean low water as the appellants suggested) are mean low water marks. As Moore Bick LJ said, unlike lowest astronomical tide, which is an actual (if rare) tide mark, they would therefore involve taking an artificial mark, although it is fair to say that it could be seen from a chart. In addition, it seems to us that the lowest astronomical tide is consistent with the approach of Popham CJ in Sir John Constables Case and Sir Henry Constables Case as translated and discussed by Moore in A History of the Foreshore and the Law Relating Thereto (1888), pp 233 237. The passage in the judgment, quoted at pp 235 237, suggests that the correct mark is where the sea does not ever ebb or the lowest ebb. The two cases were respectively concerned with the extent of a manor and the right to take a wreck, so we would accept that they are only of indirect assistance. We were initially impressed with the appellants point that lowest astronomical tide was an unattractive boundary to select, as it occurs only once in every 18.6 years, which significantly exceeds the average life of a cockle or mussel. At first sight, at any rate, that renders the lowest astronomical tide a rather unrealistic mark to take. However, it is important to bear in mind that, until recently, cockles and mussels could only be gathered from the shore when the tide was out, and could not be gathered from a ship. Accordingly, nobody would have been able to take the cockles and mussels which were just on the shore side of lowest astronomical tide, except once every 18.6 years. It is only with the advent of suction dredging and other similar techniques that anyone could gather such cockles and mussels. We do not agree with the reasoning of Moore Bick LJ (which was understandably based on the likely notional grant, following the wrong approach in Loose v Castleton at p 33, rather than the probable actual use), but we agree with his conclusion that the seaward boundary of the Area subject to the Right is the lowest astronomical tide mark from time to time. The previously separated sandbanks: prescription We turn to the respondents contention that sandbanks, previously separated from the foreshore, and thus not forming part of the Area subject to the Right, nonetheless become part of the Area as a matter of prescription when they become attached to the foreshore. In this connection, the respondents first argument is that, although the Estate did not gather cockles or mussels from sandbanks such as Ferrier Sand and Blackguard Sand, when they were separated from the Foreshore, the nature of the Estates prescriptive right is such that it automatically extended to those sandbanks as soon as they became attached to the Foreshore around 50 and 20 years ago respectively. Given that the Estate is claiming a prescriptive Right, this argument must be based on the proposition that, over a long period, sandbanks which have been close to, but detached from, the Foreshore have from time to time become joined to the Foreshore as channels have become silted up, and, as and when this happened, the Estate effectively extended the collecting of shellfish to that former sandbank. The Court of Appeal accepted this argument, on the basis of assessing the likely terms of the hypothetical grant which would have been made (applying Bridge LJs faulty analysis in Loose v Castleton at p 33) see para 26 of Moore Bick LJs judgment. However, as already explained the proper basis for establishing the nature or extent of a prescriptive right is not by assessing the likely terms of a fictional notional grant, but by assessing the extent of the actual use of the putative right established by the evidence. The respondents maintain that the Court of Appeals conclusion was nonetheless correct and, at any rate at first sight, they can derive substantial support for their argument from the reasoning in paras 58 60 above, which justifies the conclusion that the seaward boundary of the Area fluctuates. Although we acknowledge that that argument has some force in the present context, we have reached the conclusion that the evidence does not establish that the Estates prescriptive exclusive Right extends to sandbanks which were not previously joined to the Foreshore, as and when they become so attached. For present purposes, there are two distinctions of significance between the notion that the low tide mark boundary of the Foreshore fluctuates and the notion that attaching sandbanks become part of the Foreshore. First, the low tide mark will, presumably, at least normally, shift relatively gradually, whereas, although the silting up of the channel concerned will be gradual, the attachment of the whole of a previously detached sandbank to the Foreshore will happen at one moment. It is true that a channel between a sandbank and the foreshore will silt up gradually, but the question whether a sandbank has become joined to the foreshore must surely be tested by reference to a particular point in time, and we would have thought that it would be when the tide has receded past the point where the sandbank has or could become joined to the foreshore ie low tide. In that connection, it was implicitly accepted by the respondents that there would be a specific point at which a former sandbank would become joined to the foreshore: they did not suggest, for instance, that the prescriptive right would attach to a sandbank at low tide but not at high tide. Secondly, and particularly importantly in this context, the public will have had the right to take fish (including shellfish) from such a sandbank, at least until the moment when it becomes attached to the Foreshore. In those circumstances, at least in the absence of any specific evidence that the Estate in fact took shellfish and excluded the public from doing so, as of right from sandbanks as they became attached to the Foreshore, we do not think that it would be right to assume that the Estate did in fact behave in this way. Unlike the position in relation to the fluctuating low tide mark, it is by no means plain or obvious that, once a sandbank became attached to the Foreshore, the Estate would have exercised an exclusive Right to take shellfish from that former sandbank. After all, up to that moment, the public had had a right, and, at least in some cases, had exercised the right, to take shellfish from that sandbank. In the absence of any evidence that such a thing had ever happened, it appears to us wrong in principle to assume that what the Estate contends might have happened would have happened, let alone that it did happen. Indeed, given that, over at least the past 150 years or so, members of the public took shellfish from the Area which was subject to the Right (at least on the occasions giving rise to these and the earlier proceedings), it appears to us unlikely that local fishermen would have been prepared to accept the Estate maintaining (or, as they would have seen it, extending) its exclusive Right to fish over former sandbanks which were previously subject to a public right to fish just because they had become attached to the Foreshore. It is also relevant to mention that in his case in Loose v Castleton Mr Loose did not contend that Ferrier Sand was included within the Area. The respondents argue that the fact that it is common ground that the Estates several fishery extends to Stubborn Sand is inconsistent with this conclusion. We do not agree. For instance, it may be that, throughout the period during which the Estate has been taking shellfish from the Area, that activity extended to Stubborn Sand, even before it became attached to the Foreshore. Over and above this, if, as seems to have been the case, Stubborn Sand has been joined to the Foreshore since before the time of living memory, it would, as we see it, appear to follow that the Estate would have acquired the right to take cockles and mussels from Stubborn Sand by prescription in any event. Thus, in summary, we consider that the courts below were wrong on this point. We accept that there is force in the respondents contention that, as a sandbank becomes attached to the Foreshore, it should be treated as part of the Area subject to the Right in accordance with the notion that the foreshore is a shifting piece of property in effect a unum quid. However, it appears to us that the existence of a public right to fish over that sandbank, a highly relevant circumstance, serves to negative the respondents contention, at least in the absence of further supportive evidence and there is none. The previously separated sandbanks: accretion The alternative basis upon which the respondents rest their contention that previously unattached sandbanks become incorporated within the Area the subject of the Estates prescriptive exclusive Right is through the process of accretion. Thus, given (as we have just indicated) that the nature of the prescriptive Right is not such as to extend automatically to those sandbanks, the argument is that they are, as a matter of law, nonetheless added to the Area as a result of the doctrine of accretion. Whether one is concerned with the ownership of, or rights over, land, the principle that land can increase (or indeed decrease) as a result of accretion is well established. In the Privy Council, Lord Wilberforce described accretion in Southern Centre of Theosophy Inc v State of South Australia [1982] AC 706, 716 as: a doctrine which gives recognition to the fact that where land is bounded by water, the forces of nature are likely to cause changes in the boundary between the land and the water. Where these changes are gradual and imperceptible (a phrase considered further below), the law considers the title to the land as applicable to the land as it may be so changed from time to time. This may be said to be based on grounds of convenience and fairness. Except in cases where a substantial and recognisable change in boundary has suddenly taken place (to which the doctrine of accretion does not apply), it is manifestly convenient to continue to regard the boundary between land and water as being where it is from day to day or year to year. To do so is also fair. If part of an owners land is taken from him by erosion, or diluvion (ie advance of the water) it would be most inconvenient to regard the boundary as extending into the water: the landowner is treated as losing a portion of his land. So, if an addition is made to the land from what was previously water, it is only fair that the landowners title should extend to it. The doctrine of accretion, in other words, is one which arises from the nature of land ownership from, in fact, the long term ownership of property inherently subject to gradual processes of change. The respondents argue that accretion applies to the former sandbanks in this case, because the channels formerly separating those sandbanks from the Foreshore only gradually and imperceptibly became silted up, and it was as a result of such gradual silting up that they became attached to the Foreshore. Although that argument was accepted by Sir William Blackburne and the Court of Appeal, we consider that it is wrong. In a nutshell, the argument relies on the gradual and imperceptible process pursuant to which the boundary of the further land allegedly changes, whereas the doctrine of accretion only applies where the actual change to the boundary is gradual and imperceptible. As explained in para 71 above, it seems to us clear that there is a specific moment in time when the whole of a sandbank becomes attached to the foreshore, and therefore the addition of the sandbank is not gradual and imperceptible as that expression was used by Lord Wilberforce. We believe that this follows from what he said in the passage quoted above, especially in his reference to changes in the boundary which are gradual and imperceptible, and his specific exclusion of cases where a substantial and recognisable change in boundary has suddenly taken place. The issue was specifically addressed in the judgment of Griffith CJ in the High Court of Australia in a passage in his judgment in Williams v Booth (1910) 10 CLR 341, 350, with which we agree: I do not think that any case of accretion is made out. The law as stated by Blackstone (2 Bl Com, p 262), is that if this gain be by little and little, by small and imperceptible degrees, it shall go to the owner of the land adjoining. For de minimis non curat lex. But, if the alluvion or dereliction be sudden or considerable, in this case it belongs to the King; for, as the King is Lord of the sea, and so owner of the soil while it is covered with water, it is but reasonable he should have the soil, when the water has left it dry. The word imperceptible refers to the slowness of the additions to the soil. Assuming, then, that a moment has arrived at which the mouth of the lagoon became permanently closed, the suggested accretion is not an addition of an imperceptible quantity of soil to the plaintiffs land, but of an area of many acres occurring at the moment of permanent closure, so that, according to the plaintiffs contention, on one day the land belonged to the King as Lord of the sea and on the next to the plaintiff. This is a sudden and considerable alluvion or dereliction, and does not operate to confer a title by accretion. In other words, there is a difference in kind between the gradual extension of one recognised bank and the joining up of two formerly distinct banks. It is true that the two cases just referred to were concerned with ownership of land rather than prescriptive rights over land, but we can see no reason in principle or practice why the rules relating to accretion should not apply equally to rights over land as they do to ownership of land: one would expect them to march together. Such a view derives support from Mercer v Denne [1905] 2 Ch 538, especially per Sterling LJ at p 582. We were pressed by the respondents with the argument that, if we held that accretion did not apply to Ferrier Sand and other formerly separated sandbanks, the corollary must be that land forming part of the original Foreshore which becomes detached as a separate sandbank would nonetheless remain part of the Area subject to the Estates Right of several fishery. We accept that is indeed the corollary, but we see nothing surprising about it. As Ladd J pithily said in an Iowan case Holman v Hodges 84 NW (1901) 950, 952 (a decision cited with approval in the Iowan Supreme Court in State v Sorensen 436 NW 2d 358 (1989) and albeit on a different point by Brennan J in the US Supreme Court decision in Nebraska v Iowa 406 US 117 (1972)): There is no more reason for saying the state loses title to an island when connected by accretions to the shore than to say title to an islet formed at one side of the thread in an unnavigable stream is lost when connected with anothers land on the opposite side. Conclusion In these circumstances, we would dismiss the appellants appeal in so far as it relates to the seaward, western, boundary of the Area, but we would allow their appeal in relation to previously detached sandbanks. It would be helpful if we were able to define the precise extent of the Area over which the Estates several fishery should be enjoyed. However, we suspect that that would only be possible if the parties were able to agree it following receipt of this judgment. In the absence of agreement, there may be issues such as the precise identification of the boundary between Stubborn Sand and Ferrier Sand. Accordingly, if agreement cannot be reached, it appears to us, at least as at present advised, that we should remit the proceedings to Sir William Blackburne, or another judge of the Chancery Division, to enable the precise extent of the Area to be identified.

The Le Strange family (the Estate) is the owner of a substantial amount of land adjoining the east side of the foreshore (the Foreshore) on the east side of the Wash, on the west coast of Norfolk (the Wash), as well as holding an exclusive right to take cockles and mussels from the Foreshore (the Right). In 1970, the Estate granted a lease of the Right to Mr John Loose, who is still holding over under that lease. The appellants operate fishing boats out of Kings Lynn in Norfolk. During the summer of 2007, 13 of the appellants boats fished for cockles in locations claimed by the respondents to be within the area of the exclusive fishery vested in the Estate (the Area). Mr Loose and the Estate (the respondents) subsequently brought a claim in the Chancery Division of the High Court, alleging that the appellants had infringed the Right. The parties accepted that the Estate is the owner by prescription of the Right, but were in dispute as to two issues relating to the extent of the Area. The first issue was which of the low water measurements should determine the location of the western, seaward, boundary of the Area. Four different types of low water measurement were contended for: (i) mean low tide; (ii) mean spring low tide; (iii) mean neap low tide; and (iv) the lowest astronomical tide, the most extreme neap low water, which occurs every 18.6 years. At first instance, the High Court held that the mean spring low water represented the location of the western, seaward boundary of the Area; whereas the Court of Appeal concluded that it was the lowest astronomical tide mark. The second issue between the parties was whether the Right extended to sandbanks which, having been previously separated from the Foreshore, became attached to it as a result of the gradual silting up of channels separating the banks and the Foreshore. The appellants contended that the respondents must establish that the Right extended to the relevant sandbanks before they became part of the foreshore; whereas the respondents contended that either the Right applied to the Foreshore as it was constituted from time to time, or, by the doctrine of accretion, the sandbanks were treated in law as added to the Area when it became attached to the Foreshore. The High Court and the Court of Appeal accepted both the respondents arguments on this issue. The Supreme Court unanimously (i) dismisses the appeal regarding the seaward boundary, finding that the boundary is determined by the lowest astronomical tide, and (ii) allows the appeal in relation to the second issue, holding that the Estates right to fish does not extend to the sandbanks which attach to the Foreshore as and when they become so attached. Lord Neuberger and Lord Carnwath give a joint judgment, with which the other Justices agree. There are two important principles which apply to both issues. The first principle is that unless it is taken away from them, the public have the right to gather fish and shellfish from the foreshore and since Magna Carta it has not been possible for the Crown, the owner of the foreshore, to grant a private fishery ( ousts the public right) [32 35]. The second principle is that, in order to establish that he has obtained a fishery (as with any right) by prescription, a person must establish that he has physically enjoyed the fishery as of right for the requisite period, so the extent of the right must be determined by the extent of the actual or probable use in the past, not by inquiring into the mind of the notional grantor [44 47]. The first issue: the seaward boundary Resolving the first issue involves answering two questions. The first is whether the western boundary is fixed or whether it fluctuates with the relevant low mark, because, over time, the low water marks, marking the edge of the sea at low water had moved further seaward [57]. The Court concludes that it is a fluctuating boundary. The evidence clearly establishes that during the substantial period during which the prescriptive Right to take shellfish from the Foreshore was exercised, the only way in which the shellfish were gathered was by individuals walking from the land when the tide was out [58]. In those circumstances, it was very likely that the putative Right would have been exercised over an area which was defined or limited by a shifting low tide mark [58]. It is not as if the existence of such a fluctuating right would have detrimentally affected any other interests of any significant value [60]. The second question is which of the suggested low water marks is the appropriate boundary [57]. The Court concludes that the most satisfactory low water mark is the lowest astronomical tide, as this means that all parts of the Foreshore which are at any time uncovered by the sea are included in the Area, whereas any other selection involves some of those parts being excluded from the Area [64]. The second issue: the previously separated sandbanks As to the respondents first argument, the evidence does not establish that the Estates prescriptive Right extends to sandbanks which were not previously joined to the Foreshore as and when they become so attached [70]. There are two distinctions between the change in the Foreshore and the fluctuation of the low tide mark boundary. First, (while the silting up of channels which leads to the attachment is gradual), the actual attachment of sandbanks to the Foreshore itself will happen at one moment, whereas the shifting of the low tide mark will normally be gradual [71]. Second, and of particular significance, the public will have had the right to take fish, including shellfish, from such a sandbank. Unlike the position in relation to the fluctuating low tide mark, and notwithstanding the respondents contention to the contrary, it is by no means plain or obvious that, once a sandbank became attached to the Foreshore, the Estate would have exercised an exclusive Right to take shellfish from that former sandbank [72 73]. In fact, it appears unlikely that local fisherman would have been prepared to accept the Estate maintaining its exclusive Right to fish over former sandbanks which became attached to the Foreshore [73]. The fact that it is common ground between the parties that one of the sandbanks, Stubborn Sand, falls within the Area, is not inconsistent with the Courts conclusion [74]. As to the Respondents second argument, based on accretion, the doctrine of accretion is concerned with gradual and imperceptible changes in a boundary; in the present case, however, there is a specific moment in time when the whole of a sandbank becomes attached to the Foreshore [78]. There is a difference in kind between the gradual extension of one recognised bank and the joining up of two formerly distinct banks. There is no room for the doctrine of accretion in relation to the sandbanks which became connected to the foreshore in the present case [80]. Conclusion The Court would only be able to define the precise extent of the Area if the parties were able to agree it following receipt of the Courts judgment. In the absence of agreement, the Court considers that the best course of action would be to remit the proceedings to the Chancery Division to enable the precise extent of the Area to be identified [83]. This summary is provided to assist in understanding the Courts decision. It does not form part of the reasons for the decision. The full judgment of the Court is the only authoritative document. Judgments are public documents and are available at: http://supremecourt.uk/decided cases/index.html

On 22 September 2015, Bernadette Hilton was convicted at Belfast Magistrates court on her plea of guilty of three offences contrary to section 105A of the Social Security Administration (Northern Ireland) Act 1992. One of the offences related to her failure to notify the Social Security Agency of a change in her circumstance which would have affected her entitlement to claim Income Support. The other two offences involved the making of false statements in order to obtain Income Support. Following her conviction, Ms Hilton was committed to the Crown Court and that court was asked to make a confiscation order under section 156 of the Proceeds of Crime Act 2002. This application was heard by His Honour Judge Miller QC on 20 October 2016. It had been calculated that Ms Hilton had wrongly obtained a total sum of 16,517.59 as a result of her crimes. The judge assessed the benefit that she had gained to be that sum. The only property held by Ms Hilton at the time of the hearing before Judge Miller was a house which was owned jointly with a former partner. She contended that the value of her half share in the property, after deduction of an outstanding mortgage was 10,263.50. The judge accepted that contention. He assessed the available amount as that sum and made a confiscation order in respect of it. Ms Hilton was ordered to pay that amount within three months. In default of its payment, it was directed that she serve six months imprisonment. Ms Hilton appealed. Although not included in her original grounds of appeal, before the Court of Appeal she argued that Judge Miller had failed to comply with the requirements of section 160A(2) of the 2002 Act because neither the co owner nor the mortgagee had been given the opportunity to make representations about the making of the confiscation order. It transpired that neither Ms Hiltons former partner nor the building society which was the mortgagee was aware of the criminal proceedings or the application for a confiscation order. The proceedings in the Court of Appeal Deeny J in an extempore judgment gave the decision of the court (Gillen LJ, Deeny J and Keegan J) on 12 May 2017: [2017] NICA 73. The principal issue which concerned the court (and which is the only matter involved in the appeal before us) was in relation to the requirements of section 160A(2) of the 2002 Act and whether the judges order contravened those requirements. Two other matters were argued before the Court of Appeal, namely, whether a reduction in the amount to be recovered should have been made in order to reflect the costs of the sale of the property and whether article 8 of the European Convention of Human Rights (ECHR) should have been taken into account at the time of the making of the confiscation order, as opposed to the making of an order for its enforcement. It is not necessary to say anything on either issue. The Court of Appeal decided that section 160A(2) required that, at the time of making a confiscation order, the Crown Court must give to anyone who is thought to hold or who, it is considered, may hold an interest in the property an opportunity to make representations on whether a confiscation order should be made and, if so, in what amount. Deeny J observed that the subsection had not been drawn to the attention of Judge Miller but, in any event, the failure to give Ms Hiltons estranged partner and the building society the chance to make representations was fatal to the decision of the judge (para 7 of the Court of Appeal judgment). The Director of Public Prosecutions applied for permission to appeal to this court and for a certificate that a point of law of general public importance arose on the appeal. On 6 March 2018, the Court of Appeal refused permission to appeal but certified the following points of law of general public importance: 1. Where property is held by the defendant and another person, in what circumstances is the court making a confiscation order required by section 160A of the Proceeds of Crime Act 2002, in determining the available amount, to give that other person reasonable opportunity to make representations to it at the time the order is made? If section 160A does so require, does a failure to give 2. that other such an opportunity render the confiscation order invalid? The 2002 Act There are or, at least, there can be two stages to confiscation proceedings: the first is the making of the confiscation order itself and the second the order securing its enforcement. The first stage is provided for in sections 156 to 163B. That stage is triggered in the manner described in section 156. The obligation to make an order arises once the conditions in subsections (2) and (3) are satisfied. These are fairly routine. The order must be made if a defendant has been convicted of an offence before the Crown Court or is committed to that court with a view to a confiscation order being made subsection (2); and if the prosecutor asks for such an order to be made or the court believes it appropriate to make it subsection (3). The relative ease with which these conditions can be satisfied suggests that it was envisaged that the making of a confiscation order (as opposed to its enforcement) should be straightforward, indeed quasi automatic. If satisfied that the order should be made, the court is directed how to proceed by section 156(4) and (5), the relevant parts of which, so far as concerns the present case, are these: (4) The court must proceed as follows (c) if it decides that [the defendant] does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct. (5) If the court decides under subsection (4) (c) that the defendant has benefited from the conduct referred to it must (a) decide the recoverable amount, and (b) make an order (a confiscation order) requiring him to pay that amount. [A footnote to sub paragraph (b) was inserted on 1 June 2015 by the Serious Crime Act 2015 (the 2015 Act) (c 9), section 88(3)(b), Schedule 4 paragraph 46; regulation 3(2)(b). It is to the following effect: Paragraph (b) applies only if, or to the extent that, it would not be disproportionate to require the defendant to pay the recoverable amount.] Section 157 deals with the calculation of the recoverable amount. The starting point is that the recoverable amount is an amount equal to the defendants benefit from the conduct concerned subsection (1). But if the defendant shows that the available amount is less than the benefit obtained, the recoverable amount is duly adjusted subsection (2). The available amount is defined in section 159 of the Act. For present purposes it is sufficient to refer to subsection (1)(a) of section 159 which stipulates that the recoverable amount is the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority. It was by dint of the operation of section 157(2) in tandem with section 159(1)(a) that the recoverable amount in Ms Hiltons case was found to be the sum which, it was considered, could be obtained from the sale of the property which she jointly owned. It is to be noted that section 159(1)(a) specifies that the recoverable amount is the total of the values of all the free property then held by the defendant minus the amount payable for debts which have priority. The emphasis is on property which the defendant holds. Section 227(3), which makes provision for determining a propertys value, again makes clear that it is the market value of the defendants interest in the property, rather than the overall value of the property which dictates the amount to be specified in the confiscation order. Having made those preliminary observations, one must turn then to the section which is pivotal to this appeal section 160A. (It was also inserted on 1 June 2015 by the 2015 Act (c 9), sections 24, 88(3)(a), The Serious Crime (2015 Act) (Commencement) Regulations (Northern Ireland) 2015 (SR 2015/190), regulation 3(1)(a)). Section 160A(1) provides: Where it appears to a court making a confiscation order that (a) there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order, and (b) hold, an interest in the property, a person other than the defendant holds, or may the court may, if it thinks it appropriate to do so, determine the extent (at the time the confiscation order is made) of the defendants interest in the property. Clearly, in this case, the judge formed a view as to the extent of Ms Hiltons interest in the jointly owned property. The critical question is whether he determined the extent of that interest under section 160A, so as to preclude any further representations by persons other than Ms Hilton who held or may hold an interest in the property. Ms Hiltons complaint is that he did and further that he failed to advert to subsection (2) of section 160A which provides: The court must not exercise the power conferred by subsection (1) unless it gives to anyone who the court thinks is or may be a person holding an interest in the property a reasonable opportunity to make representations to it. The significance of a determination under section 160A which precludes representations from third parties is clear from subsection (3) which provides: (3) A determination under this section is conclusive in relation to any question as to the extent of the defendants interest in the property that arises in connection with (a) the realisation of the property, or the transfer of an interest in the property, with a view to satisfying the confiscation order, or (b) of any such realisation or transfer. any action or proceedings taken for the purposes A determination of the extent of the interest of the person subject to the confiscation order on the basis that no further representations may be made by third parties thus becomes immutable, unless there is an appeal to the Court of Appeal section 181(4), (5) and (6). The question whether a confiscation order has been made on foot of such a determination is therefore critical. But it is also critical that that question be addressed with the two stage process involved in the making of the order and securing its enforcement firmly in mind. Before turning to that, however, it should be recalled that making a determination as to the extent of a persons interest which precludes later representations by third parties (as opposed to forming a preliminary view about that interest) is conditional on the courts considering it appropriate to do so. Since section 160A(2) requires that the court should give to anyone who may be a person holding an interest in the property a reasonable opportunity to make representations to it, by definition, it could not be appropriate to make a determination affecting such a persons interest without giving him or her that opportunity. Unless the Crown Court judge is confident that the third partys interest will not be affected, he or she should not make a determination under section 160A(1) which effectively extinguishes the opportunity for third parties to make later representations. The judge is not prohibited, however, from forming a view as to the extent of the interest of the person subject to the confiscation order for the purpose of computing what is, in effect, a statutory debt see R v Ahmed (Mumtaz) [2005] 1 WLR 122, discussed below at para 19. This is particularly so because of the provisions relating to the quite distinct exercise involved in the realisation of the order or payment of the sum due and it is to those provisions that I now turn. Section 198 makes provision for the circumstances where a confiscation order has been made but has not been satisfied. It is in these terms: (1) This section applies if (a) (b) (c) a confiscation order is made, it is not satisfied, and it is not subject to appeal. (2) On the application of the prosecutor the Crown Court may by order appoint a receiver in respect of realisable property. It is to be noted that the exercise of the power under this section is dependent on a confiscation order having been made. This reflects the two stage approach: the first the making of the confiscation order and the second the realisation or enforcement of that order. As the appellant submits, if the interests of third parties are not considered and disposed of at the confiscation stage, they must be dealt with at the enforcement stage. This is the effect of various provisions in section 199. The first relevant provision in section 199 is subsection (2). It provides that the court may confer on a receiver (appointed under subsection (1)) a number of powers in relation to the realisable property. These include the power to manage or otherwise deal with the property (subsection 2(b)) and the power to realise the property, in such manner as the court may specify (subsection 2(c)). Subsection (6) makes provision for the courts power to order a person holding an interest in realisable property to make a payment to a receiver in respect of a beneficial interest held by the defendant and, on the payment being made, order the transfer, grant or extinguishment of any interest in the property. proviso in section 199(8), however. It provides: Importantly, recourse to subsections (2) and (6) is subject to an important (8) The court must not confer the power mentioned in subsection (2)(b) (a) or (c) in respect of property, or (b) (6) in respect of property, exercise the power conferred on it by subsection unless it gives persons holding interests in the property a reasonable opportunity to make representations to it. This is important because the section was retained in the legislation, despite the introduction of section 160A. It can be safely assumed, therefore, that Parliament intended that the two stage process of (i) the making of the confiscation order, and (ii) its enforcement or realisation at a later point should be preserved. Indeed, there can be no doubt about this because a new subsection 8B was introduced by the 2015 Act (c 9), sections 27, 88(3)(a) (SR 2015/190), regulation 3(1)(a). It provides: Representations that a person is entitled to make by virtue of subsection (8) do not include representations that are inconsistent with a determination made under section 160A, unless (a) the person was not given a reasonable opportunity to make representations when the determination was made and has not appealed against the determination, or (b) it appears to the court that there would be a serious risk of injustice to the person if the court was bound by the determination; and the determination does not bind the court if paragraph (a) or (b) applies. This provision proceeds on the premise that section 160A and section 199 continue, in relevant circumstances, to co exist. Third party representations are forbidden, subject to the qualifications in sub paras (a) and (b), if a determination under section 160A has been made. If such a determination has not been made, however, there is no inhibition to the making of third party representations. Put simply, section 160A does not purport to occupy the field. The opportunity to make representations at the enforcement stage continues to apply either because a determination under section 160A has not been made or because the conditions in section 199(8B) are met. The fundamental point is that, at the enforcement stage, third party rights may continue to be considered either because the Crown Court did not make a section 160A determination, or because it did so without affording a person with an interest in property the opportunity to make representations when the determination was made. Discussion The distinct two stage process in (i) the making a confiscation order; and (ii) the enforcement of that order, was an inevitable feature of proceeds of crime applications before the introduction of section 160A to the 2002 Act by the 2015 Act. In R v Ahmed (Mumtaz) and R v Qureshi (Ghulam) [2005] 1 WLR 122, after dealing with the question of whether the defendants had benefited from their criminal activities, Latham LJ turned to the nature of the exercise involved in the making of a confiscation order. At paras 11 and 12, he said: 11. The court is merely concerned with the arithmetic exercise of computing what is, in effect, a statutory debt. That process does not involve any assessment, in our judgment, of the way in which that debt may ultimately be paid, any more than the assessment of any other debt. 12. Different considerations, will, however arise if the debt is not met and the prosecution determine to take enforcement action, for example by obtaining an order for a receiver. As the House of Lords explained in In re Norris [2001] 1 WLR 1388 this is the stage of the procedure in which a third partys rights can not only be taken into account but resolved. A third partys rights were not considered at the confiscation order stage. This was and still may be a computation exercise to decide how much the defendant has benefited from his or her criminal activity and to assess what assets they have that might be recoverable. Whether those assets were in fact realisable was left to the enforcement stage. The crucial question to be determined in the present appeal is whether, and in what circumstances, that division of functions can still occur where there are third party interests at stake. The circumstance that the confiscation stage did not involve any consideration of how the debt might be realised was reinforced by the fact that, as Latham LJ put it, it was akin to a statutory debt and it was owed in personam. The significance of this is explained in Millington and Sutherland Williams on The Proceeds of Crime, 5th ed (2018), chapter 16, para 16.53: A confiscation order is an in personam order against the convicted defendant and not an in rem order against specific items of property. The consequence of this, prior to 1 June 2015, was that third parties who held an interest in realisable property did not have a right to be heard at the confiscation hearing in the Crown Court or to have counsel make representations to the court on their behalf. If the defendant wished the third party to be called as a witness on his behalf for the purpose of establishing the extent of his interest in realisable property, he could of course do so. Following the introduction of section 10A of POCA [in Northern Ireland section 160A] the position has been modified. The extent of the modification is contained in section 160A(2) which stipulates that the Crown Court must give to anyone who is thought to hold or who, it is considered, may hold an interest in the property an opportunity to make representations on whether a confiscation order should be made and, if so, in what amount see para 6 above. What has not been modified, in my opinion, in cases where third party interests have been identified, is the opportunity available to the Crown Court, to make a confiscation order other than under section 160A. In such circumstances, the confiscation stage of proceedings remains separate from the enforcement stage. In the present case, the Court of Appeals judgment is premised on the proposition that on every occasion that third party interests arise, the court must proceed under section 160A. The consequence of that approach would be that there would be an inevitable collapse of the traditional two stages into one hearing with all the panoply of investigation of the merits of the rights of third parties, such as a former partner and the building society in the present appeal. This would inevitably introduce a cumbersome procedure to the making of the confiscation order. Conventionally, as in the present instance, those with some interest in the property which might become available at the realisation stage, such as former partners and mortgagees, are not made parties to the application for a confiscation order. If, in every case where third party interests were potentially at stake, a full section 160A investigation had to be undertaken at the stage of making the confiscation order, the case would have to be adjourned; those with possible interests would have to be put on notice; and the making of a confiscation order would have to be postponed. I am satisfied that this was not intended. The making of a confiscation order would no longer be straightforward, much less quasi automatic (see para 8 above) if section 160A had to be applied in all its rigour in every case where third party interests arose. The enactment of the section was designed to streamline the system, not to complicate it. In my view, its purpose was to combine the confiscation and enforcement stages in simple cases where there could be no sensible debate about how the confiscation order should be enforced. This conclusion is supported by consideration of academic commentary and case law which predates the introduction of section 160A. In Blackstones Guide to The Proceeds of Crime Act 2002, 5th ed (2015), the authors note at para 2.197 that traditional advice for third parties wishing to protect property in their possession was to await enforcement proceedings. Of course, during the determination hearing itself, the defendant himself might call the third party as a witness in order to prove an interest which reduced the amount of the defendants available property. However, there has never been any procedure allowing for third parties to make their own freestanding representations at that stage. Dicta in In re Norris [2001] UKHL 34; [2001] 1 WLR 1388 underscore the distinction between the confiscation order and the order for its enforcement. The House of Lords emphasised the in personam nature of a confiscation order: The order which it makes is an order which is directed against the defendant only, and it is simply an order for the payment of a sum of money. The question of realisation, if the exercise of powers by a receiver is needed in order to make good the order which the defendant is required to satisfy, is reserved for the High Court (para 5). It was further emphasised that the structure of the 2002 Act reflected the engrained distinction between the courts criminal jurisdiction and their civil jurisdiction, and the division of responsibility and function between the Crown Court exercising the criminal jurisdiction and the High Court exercising the civil jurisdiction. The criminal jurisdiction is concerned alone with what order to make under sections 1 to 4 of the Act. The procedure of the criminal court is solely concerned with the parties before it, the prosecution and the defendant (para 23). There is now, of course, a procedure allowing third parties to make representations at the confiscation stage of proceedings but only where the Crown Court is minded to make a determination under section 160A. Indeed, this is the combined effect of sections 160A(2) and (3) and section 199(8)(b) see paras 12 14 and 17 above. It is evident, therefore, that it was open to Judge Miller to make a confiscation order other than under section 160A. Having read the transcript of the hearing of the application for a confiscation order and the order which the judge made, it is clear to me that no determination under that section was made. It was not mentioned during the submissions that were made to the judge nor in the order of the court. The hearing of the application for a confiscation order was principally concerned with the relevance of the costs of the sale of the property to the calculation of the realisable amount. The possible significance of third party interests was not referred to by any party. It seems likely that the judge was completely unaware of these. Section 160A has no bearing on this case, therefore, unless the judge was bound to make an order under its provisions. For the reasons that I have given, he was not. Having considered the transcript of the hearing before him, I am satisfied that he did not. Conclusion I consider that the answer to the first question certified, namely, Where property is held by the defendant and another person, in what circumstances is the court making a confiscation order required by section 160A of the Proceeds of Crime Act 2002, in determining the available amount, to give that other person reasonable opportunity to make representations to it at the time the order is made? should be that this question does not arise on the present appeal because a determination under section 160A was not made. The same answer must be given to the second certified question. The appeal is therefore allowed and the learned County Court judges order is restored. It will be open to the third parties to make representations at the enforcement stage of the proceedings. Likewise, at that stage, it will be open to Ms Hilton to canvass the matters adverted to in para 5 above.

On 22 September 2015 Bernadette Hilton was convicted of three offences contrary to section 105A of the Social Security Administration (Northern Ireland) Act 1972. Following conviction, Ms Hilton was committed to the Crown Court and that court was asked to make a confiscation order under section 156 of the Proceeds of Crime Act 2002. The application was heard by His Honour Judge Miller QC on 20 October 2016. He made a confiscation order in respect of 10,263.50, which was the equivalent of Ms Hiltons half share of her matrimonial home. Ms Hilton appealed against the order. The Court of Appeal decided that Section 160A(2) of the Proceeds of Crime Act 2002 required that, at the time of making a confiscation order, the Crown Court must give to anyone who is thought to hold an interest in the property an opportunity to make representations on whether a confiscation order should be made and, if so, in what amount. The failure to give Ms Hiltons estranged partner and the building society the chance to make representations was fatal to the decision of the judge and the confiscation order was thus invalid. The Director of Public Prosecution appeals to this Court. The Court of Appeal certified the following points of law of general public importance: 1. Where property is held by the defendant and another person, in what circumstances is the court making a confiscation order required by section 160A of the Proceeds of Crime Act 2002, in determining the available amount, to give that other person reasonable opportunity to make representations to it at the time the order is made? 2. If section 160A does so require, does a failure to give that other such an opportunity render the confiscation order invalid? The Supreme Court unanimously allows the appeal. It holds that the questions certified do not arise on the present appeal because a determination under section 160A was not made. Lord Kerr gives the judgment. The Proceeds of Crime Act 2002 provides for two stages to confiscation proceedings: the first is the making of the confiscation order itself and the second the order securing its enforcement. The first stage is dealt with in sections 156 and 163B and envisages that the making of a confiscation order should be straightforward, indeed quasi automatic [8]. Section 160A of the Act provides that (1) Where it appears to a court making a confiscation order that (a) there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order, and (b) a person other than the defendant holds, or may hold, an interest in the property, the court may, if it thinks it appropriate to do so, determine the extent (at the time the confiscation order is made) of the defendants interest in the property. (2) The court must not exercise the power conferred by subsection (1) unless it gives to anyone who the court thinks is or may be a person holding an interest in the property a reasonable opportunity to make representations to it. (3) A determination under this section is conclusive in relation to any question as to the extent of the defendants interest in the property that arises in connection with (a) the realisation of the property, or the transfer of an interest in the property, with a view to satisfying the confiscation order, or (b) any action or proceedings taken for the purposes of any such realisation or transfer. The critical question is whether, at the stage of making the order, the Crown Court judge made a determination of the extent of Ms Hiltons interest in the jointly owned property under section 160A. If made on foot of such a determination, the confiscation order becomes immutable unless there is an appeal [11 14]. A determination under section 160A therefore effectively extinguishes the opportunity for third parties to make later representations. On the other hand, the judge can at this stage form a view of the extent of the interest of the person in question, here Ms Hilton, without making a determination under section 160A. Parliament intended this to be the case, as is evident from the provisions relating to the second, enforcement stage of a confiscation order [14]. In particular, section 199(8) provides that a court must not order enforcement unless it gives persons holding interests in the property a reasonable opportunity to make representations. This section is important because it was retained in the legislation despite the introduction of section 160A. Furthermore, subsection 8B to section 199 proceeds on the premise that section 160A and section 199 continue, in relevant circumstances, to co exist [16 18]. Reading these sections together, it is clear that section 160A does not purport to occupy the field. The opportunity to make representations at the enforcement stage continues to apply either because a determination under section 160A has not been made or because the conditions in section 199(8B) are met. The fundamental point is that, at the enforcement stage, third party rights may continue to be considered [18]. Essentially, therefore, where the court makes a section 160A determination, third parties must be afforded the chance to make representations at the stage of making the confiscation order, as provided for by section 160A(2). But where the court does not make a section 160A determination and rather simply forms a view, at this first stage of the process, of the extent of the interest of the person in question, it will have to give third parties the chance to make representations at the enforcement stage. Where the court does not make a section 160A determination, therefore, it is not incumbent upon it to give third parties the chance to make representations at the first stage of the process (the making of the order) because they will have the chance to do so at the second stage (enforcement) before the confiscation order is enforced. The Court of Appeals judgment is premised on the proposition that on every occasion that third party interests arise, the court must proceed under section 160A. This is contrary to the conclusion reached that the introduction of section 160A has not modified the opportunity available to the Crown Court to make a confiscation order other than under section 160A. The consequence of the Court of Appeals approach would involve a collapse of the traditional two stages the making of an order and the enforcement of it into one hearing with all the panoply of investigation of the merits of the rights of third parties, such as a former partner and the building society in the present appeal. This would inevitably introduce a cumbersome procedure to the making of the confiscation order [23]. This was not intended. The making of a confiscation order would no longer be straightforward, much less quasi automatic (see para [8]) if section 160A had to be applied in all its rigour in every case where third party interests arose [24]. The enactment of the section was designed to streamline the system, not to complicate it. section 160A simply introduces a procedure allowing third parties to make representations at the confiscation stage, but only where the Crown Court makes a determination under section 160A [27]. No determination under section 160A was made here [28]. For this reason, the answer to the questions certified is that they do not arise on the present appeal. The appeal is therefore allowed [29].

London Clubs Management Ltd (LCM) operates casinos where games such as blackjack, punto banco and American roulette are played. The questions to which this appeal gives rise concern the correct treatment for gaming duty purposes of non negotiable gaming chips and free bet vouchers which are provided free of charge by LCM and some other casino operators to selected gamblers to encourage them to gamble in their casinos. Gaming duty is an excise duty which was introduced by the Finance Act 1997 (the FA 1997). Section 10(1) provides that the duty is charged in accordance with section 11 on any premises where dutiable gaming takes place. It is accepted that the gaming at issue in this appeal is dutiable gaming for which LCM, as the provider of the casino premises where it takes place, is liable. The amount of gaming duty payable is calculated by applying the relevant rate of gaming duty to the gross gaming yield from the casino premises during a specified accounting period. Section 11(8) provides that the gross gaming yield consists of the aggregate of gaming receipts and bankers profits for that period: the gaming receipts for that period from those premises; (a) and (b) where a provider of the premises (or a person acting on his behalf) is banker in relation to any dutiable gaming taking place on those premises in that period, the bankers profits for that period from that gaming. Gaming receipts are defined by section 11(9), which reads, so far as relevant: For the purposes of subsection (8) above the gaming receipts for an accounting period from any premises are the receipts in that period from charges made in connection with any dutiable gaming which has taken place on the premises other than (b) any charge the payment of which confers no more than an entitlement to admission to the premises. Bankers profits were, at the relevant time, 1 October 2008 to 30 September 2012, defined by section 11(10) as the amount by which the value in money or moneys worth of the stakes staked exceeded the value of the prizes provided by the banker: In subsection (8) above the reference to the bankers profits from any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say (a) the value, in money or moneys worth, of the stakes staked with the banker in any such gaming; and the value of the prizes provided by the banker to (b) those taking part in such gaming otherwise than on behalf of a provider of the premises. Section 11(10A), which has had effect since 1 September 2007, addresses the valuation of prizes: Subsections (2) to (6)(a) of section 20 of the Betting and Gaming Duties Act 1981 (expenditure on bingo winnings: valuation of prizes) apply, with any necessary modifications, for the purposes of gaming duty as they apply for the purposes of bingo duty. Section 20 of the Betting and Gaming Duties Act 1981 (the BGDA) says, so far as relevant: (2) Where a prize is obtained by the promoter from a person not connected with him, the cost to the promoter shall be treated as the value of the prize for the purpose of subsection (1). (3) Where a prize is a voucher which (a) may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person, (b) in place of which the voucher may be used, and (c) does not fall within subsection (2), specifies an amount as the sum or maximum sum the specified amount is the value of the voucher for the purpose of subsection (1). (4) Where a prize is a voucher (whether or not it falls within subsection (2)) it shall be treated as having no value for the purpose of subsection (1) if (a) it does not satisfy subsection (3)(a) and (b), or (b) its use as described in subsection (3)(a) is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount mentioned in subsection (3)(b). The facts The relevant facts are not in dispute and are very straightforward. Normal cash chips are either purchased by gamblers for cash or won on a winning bet. They are replayable at the gaming tables until they are lost, or they may be used to buy goods or services, or they may be encashed. Non negotiable chips are provided to selected gamblers as a promotional tool. They have some of the characteristics of normal cash chips. In particular, they may be used to place bets at the gaming tables and they are replayable until they are lost. If the gambler wins, the banker pays out the winnings in cash chips and the gambler retains the non negotiable chips and may use them to place further bets. There are important differences between non negotiable chips and cash chips, however. First and as I have mentioned, they are not purchased for cash but are provided free of charge. Secondly, they cannot be used to buy goods or services, nor can they be encashed. They can be used to place bets and that is all. Thirdly, when a gambler loses a bet placed with non negotiable chips, the banker places them in the tables drop box which is a secure box under the gaming table. In contrast (with the exception of tips), cash chips are not placed in the drop box. Rather, when a gambler loses a bet placed with cash chips, the chips are placed in the chip float, a tray which rests in front of the banker and contains the casinos chips. Fourthly, non negotiable chips are physically distinguishable from cash chips. The face of each non negotiable chip is clearly marked non negotiable. Free bet vouchers are printed paper vouchers which are also provided to selected gamblers as a promotional tool. There are several different types. Free play vouchers or replayable vouchers can be used in just the same way as non negotiable chips. If the gambler loses the bet, they are placed in the drop box. If the gambler wins the bet, the winnings are paid to him in cash chips and the voucher is returned to him and may be used to place further bets. One hit vouchers can only be used to place a single bet, regardless of whether the gambler wins or loses. Once the voucher has been played, the dealer puts it in the drop box. If the gambler has won the bet, his winnings are paid in the form of cash chips. If he loses the bet, he receives nothing. Cash match vouchers operate in a similar way to one hit vouchers, except that a gambler must first place a bet with cash chips in order to use a cash match voucher of the same value. Finally, there are free gaming chips vouchers. They may be exchanged for non negotiable chips at the casinos cash desk without charge. These non negotiable chips can then be used in just the same way as other non negotiable chips. Non negotiable chips have no printed terms and conditions. Free bet vouchers, on the other hand, are subject to terms and conditions which may limit the games in which they may be played (for example, blackjack or punto banco), the bets for which they may be placed (for example, even money bets) or the time at which they may be used (for example, between particular dates). In these proceedings non negotiable chips and all free bet vouchers have been referred to collectively as Non Negs and I too will use that terminology. No one has suggested that, for tax purposes, the various kinds of Non Negs should be treated differently from one another. But I should observe that the Upper Tribunal pointed out, entirely correctly in my view, that free gaming chips vouchers should not have been included in the same category as other Non Negs because they are not used in the game itself, nor do they end up in the drop box; it is only the Non Negs into which they may be exchanged which are placed as bets. Clearly this can have no effect on the outcome of this appeal, however. LCM introduced Non Negs in 2008 and from that time it included the face value of all the Non Negs played by gamblers and retained by its casinos in their drop boxes in the calculation of its bankers profits. However, following a review of that approach, it considered that it had made an error in so doing and that, in consequence, it had over declared its payable gaming duty. In October 2012 LCM therefore wrote to the Commissioners for Her Majestys Revenue and Customs (HMRC) and requested repayment of 1,973,376.97 of gaming duty which it said had been overpaid in the period from 1 October 2008 to 30 September 2012. The request was made under section 137A of the Customs and Excise Management Act 1979. On 13 March 2013, HMRC rejected that claim. LCM appealed against that decision. The proceedings The First tier Tribunal (FTT) (Judge Sinfield) [2014] UKFTT 1060 (TC) dismissed LCMs appeal. The FTT rejected LCMs argument that Non Negs did not have any value in money or moneys worth within the meaning of section 11(10)(a) of the FA 1997 because they were provided to the gambler free of charge and so the gambler did not risk anything of value when he placed them as a bet. It accepted instead the argument advanced on behalf of HMRC that the value in money or moneys worth of the Non Negs was their monetary face value on the basis that the face value would be used to calculate the winnings in cash chips and on a losing bet the gambler would no longer have the right to bet the monetary value of the Non Negs for free. On appeal by LCM, the Upper Tribunal (Tax and Chancery Chamber) (UT) (Henderson J and Judge Roger Berner), [2016] UKUT 0259 (TCC) allowed the appeal. It held that the FTT failed to have proper regard to the requirement that the value of the stakes staked in section 11(10)(a) of the FA 1997 must be the value of those stakes in money or moneys worth. However, Non Negs did not represent any money paid or deposited with LCM, nor did they have any value in moneys worth by reason of being redeemable for cash or for goods or services. Further, there was no evidence and there were no findings of fact either that Non Negs were transferable or, if they were, as to the monetary value that they might realise upon any transfer. The UT also addressed the position of Non Negs as prizes under section 11(10)(b) of the FA 1997. It considered that this was not an issue which needed to be resolved to dispose of the appeal but it was desirable that it should express a view upon it because the system of valuation for gaming duty purposes of chips and vouchers for free bets should be regarded as a whole, taking into account the positive and negative elements of the calculation of the bankers profits. On this issue, the parties took the position that Non Negs should be treated in the same way for the purposes of section 11(10)(a) and (b). Hence LCMs case was that Non Negs were to be treated as having no value for the purposes of section 11(10)(a) and (b). HMRC, on the other hand, argued that Non Negs were to be treated as having their face value for the purposes of section 11(10)(a) and (b), with the result that only when a Non Neg was not returned to or retained by the gambler would its value contribute to bankers profits. The UT observed that it was not part of LCMs claim or its case on appeal that if Non Negs had no value for the purposes of section 11(10)(a) they could nevertheless have a value for the purposes of section 11(10)(b). Correspondingly but not surprisingly, LCM did not dispute HMRCs analysis of the position as to the value of Non Negs as prizes were HMRCs argument as to the value of Non Negs for the purposes of section 11(10)(a) to have prevailed. The UT accepted LCMs contentions on this issue. It held that Non Negs which were returned to or retained by the gambler fell within section 20(4)(a) and (b) of the BGDA and therefore must be regarded as having no value. They fell within section 20(4)(a) because they failed to satisfy section 20(3)(a) and (b). They could be used to play a game but that did not mean they were used in place of money as payment for benefits. They fell within section 20(4)(b) because their use was restricted to the same use as any other Non Neg and therefore could not have any different value in money or in moneys worth. The Court of Appeal (Flaux, Leggatt LJJ, Dame Elizabeth Gloster) [2018] EWCA Civ 2210; [2019] 1 WLR 1 dismissed HMRCs further appeal. It held that a Non Neg was not a stake staked for the purposes of section 11(10)(a) of the FA 1997; and, if a Non Neg was a stake staked, that stake had no value in money or moneys worth. Dame Elizabeth Gloster, with whom Leggatt and Flaux LJJ agreed, reasoned that the assessment of stakes staked under section 11(10), in context, involved a conventional arithmetical calculation of real world stakes received from players which, if necessary, could feature as revenue figures in a set of accounts and contribute to the casinos gross profits. It did not include artificial or notional values placed on tokens given to the gambler by the casino as a promotional exercise which intrinsically had no value and were non negotiable, or at best had an economic value to the player equivalent to their face value multiplied by the chance of winning. In no sense could the face value of a Non Neg, or even the value calculated by reference to the chance of winning, feature as a receipt in a casinos accounts or be said to contribute to its gross profits. Further, when a gambler used a Non Neg, he was not using his own money or putting his own money at risk. When a gambler lost a Non Neg and it was placed in the casinos drop box, he was not losing cash but the right to use that Non Neg to place a bet. On an objective assessment of value, a Non Neg had no value in money or moneys worth for the purposes of section 11(10)(a). HMRC also asked the Court of Appeal to consider the value of Non Negs as prizes provided on the basis that, although a finding on this issue was not necessary to dispose of the appeal, there should, so far as possible, be consistency between the value of Non Negs as stakes staked and as prizes provided. The Court of Appeal duly did so and, once again, agreed with the reasoning of the UT. The benefit which a retained Non Neg provided was no different from that referable to the original Non Neg. As no payment was required for the original Non Neg, there was no payment in money which the Non Neg could replace. Nor did staking a Non Neg in a casino game entail payment in return for a benefit. Moreover, the use of a Non Neg was restricted, since it could only be used as a stake, and its use as such had no value. The UT was therefore right to conclude that the effect of either section 20(4)(a) or (b) of the BGDA was that a Non Neg retained as a prize had no value for the purposes of section 11(10)(b) of the FA 1997. This appeal Upon this further appeal, HMRC contend that the Court of Appeal fell into error on each of the issues it decided. It is therefore necessary to consider: i) whether, in calculating bankers profits, Non Negs are stakes for the purposes of section 11(10)(a) of the FA 1997; ii) what value, in money or moneys worth (if any) Non Negs have for the purposes of section 11(10)(a); and iii) what value (if any) should be given to Non Negs for the purposes of section 11(10)(b). Issues (i) and (ii) Non Negs as stakes staked It is convenient to address these issues together, for they are closely related. HMRCs case is clear and straightforward. They contend that for the purposes of section 11(10)(a) Non Negs are stakes staked when they are played in a game and that their value in money or moneys worth is their face value because that is the value which is attached to them in the game. Non Negs are to be treated as a stake for the purposes of section 11(10)(a) because they are treated as a stake under the rules of the game in which they are played, and are to be valued by reference to their value in money as a stake under those rules. This approach is, they say, focused on the treatment of the Non Negs in the game but also reflects the commercial reality that it is only because they can be staked at their face value and confer an entitlement to cash winnings if the play is successful that they act, as intended, as incentives or rewards. HMRC recognise that one of two other approaches might be adopted. The first is that section 11(10)(a) is concerned with stakes which consist of cash or which can be encashed or converted to cash, in which case Non Negs, which cannot be encashed, have a zero value or are not stakes at all. The second is that this provision is concerned with stakes which have a real world value to the gambler, and that this is their value under the provision. HMRC continue that this value will generally not be zero because a gambler can, by using cautious strategies, convert a Non Neg into cash chips. Further, if the Non Neg is assignable, it will have a value in an arms length transaction between its holder and another gambler. HMRC accept that it is not open to them on this appeal to argue that, on this approach, the market value of the Non Negs in issue was not zero but say that, were this court to find this is the correct approach, it would be open to them to do so in other cases, and to argue that the market value is substantial. It is contended by HMRC that their preferred approach is the correct one. Section 11(10)(a) is concerned with the existence and value of the stake being placed as a stake in the casino game, and not its value in any other context, such as its value when encashed or when sold or assigned to another gambler. They continue that this is why, when ordinary cash chips are given by casinos to favoured gamblers and are used to place bets in a game, these chips count as stakes staked in the game for duty purposes. It is also why a cash incentive given to a gambler, such as a promise of a 50 cash back if 1,000 worth of ordinary cash chips are bought and staked, has no effect on the value of those cash chips as stakes staked in the calculation required by section 11(10). The promise does not affect the treatment or value of the stakes staked in the game under the rules of the game. LCM contends that HMRCs approach accords with neither the wording of the legislation nor the judicial guidance in this area. Playing a casino game with a Non Neg does not involve staking a stake with the banker. Further, if and in so far as playing with a Non Neg does involve staking a stake, the value of the stake in money or moneys worth is nil. The case advanced by LCM therefore has two elements. In support of the first, namely that a Non Neg is not a stake staked within the meaning of section 11(10)(a), it argues that it is inherent in the concept of staking a stake that a gambler is putting something of value at risk. However, a Non Neg has no value and it represents nothing of value. A gambler risks nothing when he plays a game with a Non Neg and the banker gains nothing if the player loses his bet. Much the same reasoning underpins the second limb of LCMs case. It argues that if a Non Neg is a stake then it has no value in money or moneys worth. Assessment of whether a Non Neg has a value in money or moneys worth requires a consideration of the economic substance which underpins its use as a stake in a game. As a matter of substance, the gambler is not placing anything of value at risk. The Non Neg is a token which allows him to play the game for free. I should add one further point at this stage. The parties remain in agreement that there should, so far as possible, be consistency in approach between the value of Non Negs as stakes staked under section 11(10)(a) and as prizes provided under section 11(10)(b). This is a matter to which I must return in considering issue (iii). Discussion Before addressing these rival arguments and the proper interpretation of the legislation, I must say a little about the nature of a cash chip and what it represents. This was explored by the House of Lords in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. The case concerned the misappropriation by a solicitor of money from his firms client account. The solicitor exchanged that money for cash chips which he gambled away at the respondents club. In these proceedings the firm sought to recover from the respondents the money lost by the solicitor as money had and received. One of the issues which arose was whether the respondents had given, in good faith, good consideration for the money. At that time gaming contracts were void under section 18 of the Gaming Act 1845 (the 1845 Act) but the respondents nevertheless claimed they had given good consideration for two reasons: first, each time the solicitor placed a bet at the club, he obtained in exchange the chance of winning and thus of being paid; and secondly, the chips were supplied to the solicitor in exchange for money, and this constituted a separate contract, independent of the contracts under which bets were placed at the club and it was not void under the 1845 Act. The House of Lords had no difficulty rejecting the first of these arguments. Each time the solicitor placed a bet he received nothing in return which constituted valuable consideration. The gaming contract was void and, if the solicitor won his bet, he had no right to any winnings, though he might have had a confident expectation that the club would pay. Were it otherwise, the club would soon have gone out of business. The second argument ultimately fared no better. In the course of his reasoning, Lord Goff of Chieveley said this at p 575F H: In common sense terms, those who gambled at the club were not gambling for chips: they were gambling for money. As Davies LJ said in CHT Ltd v Ward [1965] 2 QB 63, 79: People do not game in order to win chips; they game in order to win money. The chips are not money or moneys worth; they are mere counters or symbols used for the convenience of all concerned in the gaming. The convenience is manifest, especially from the point of view of the club. The club has the gamblers money up front, and large sums of cash are not floating around at the gaming tables. The chips are simply a convenient mechanism for facilitating gambling with money. The property in the chips as such remains in the club, so that there is no question of a gambler buying the chips from the club when he obtains them for cash. Lord Goff went on to explain that if gaming contracts were not void under English law there would be a contract in respect of the chips under which the club would accept the deposit of money by the gambler and provide him with chips which he could use to place bets or redeem; and separate contracts would be made when each bet was placed, at which point in time part or all of the money so deposited would be appropriated to the bet. As it was, however, each time the gambler placed a bet, the agreement between the gambler and the club was an agreement by way of gaming and so was null and void. The club, by accepting the bets, had not given valuable consideration for the money wagered by the gambler because the club was under no legal obligation to honour those bets. It follows that when a gambler plays with cash chips in a casino, he is not staking the chips but the money those cash chips represent which he has deposited with the casino. When the gambler uses the chips to make a bet in a game, the money those chips represent is appropriated to the bet the gambler is making. If the gambler loses the bet, the right to the money those chips represent passes to the casino. If, on the other hand, the gambler wins the bet, then, depending on the rules of the game, the gambler will be entitled to a prize comprising the money he has bet and a further monetary prize, the size of which will usually be related to the size of the bet the gambler has made and the odds of him winning. The gambler will be given cash chips which represent the money he has won and he can use those chips and the money they represent to place further bets or he may encash the chips. I can now turn to the legislation and would make three points at the outset. First, the assessment of the gross gaming yield from any premises requires a focus upon the activity of gaming and not the provision of other goods or services on the premises. As I have explained, section 11(8) of the FA 1997 provides that the gross gaming yield consists of the aggregate of the gaming receipts from the premises and, where the provider of the premises (or a person acting on his behalf) is banker in relation to dutiable gaming taking place on the premises, the bankers profits. Gaming receipts, as defined in section 11(9), comprise, subject to section 11(9)(b), receipts from charges made in relation to dutiable gaming such as fees to participate in a particular dutiable game. Similarly, bankers profits are those profits derived from the activity of gaming and not any wider activities or services provided at the premises at which the gaming takes place. The second point concerns the nature of bankers profits and the perspective from which they must be considered. As defined in section 11(10), bankers profits from gaming are the value in money or moneys worth of the stakes staked with the banker in any such gaming, less the value of the prizes provided by the banker to the gamblers taking part in the gaming (excluding anyone who takes part on behalf of a provider of the premises). This assessment must, so it seems to me, be carried out from the perspective of the banker for it is the bankers profits which must be brought into account in calculating the gross gaming yield from the premises. The third point concerns the nature of the valuation that must be conducted. In my view, the expression money or moneys worth in section 11(10)(a) emphasises that in determining the value of the stakes staked it is the actual and real world value of the stakes in the hands of the banker which matters. Section 11(10)(a) is concerned with stakes which are or represent money (as cash chips do) or which can be converted into money. Similarly, in working out the value of the prizes provided by the banker, it is the actual or real world cost to the banker of providing the prizes that must be brought into account, subject to the operation of section 20 of the BGDA. I would reject the submission made by HMRC that section 11(10)(a) is concerned with the role the stake plays in the game and the value it carries for that purpose. In my view, the UT was right to say that this goes too far and attaches insufficient weight to the expression money or moneys worth and the context, which requires a focus on the economic substance of the stake and the real financial contribution that stake makes to the bankers profits from gaming and in turn to the gross gaming yield from the premises. So too, the Court of Appeal was correct to say that the calculation of stakes staked involves a conventional accounting of the real world value of the stakes which have been staked in any given accounting period. Aspects of this approach to the legislation are reflected in the decision of the Court of Appeal in Aspinalls Club Ltd v Revenue and Customs Comrs [2013] EWCA Civ 1464; [2015] Ch 79. There Aspinalls Club Ltd, the operator of a well known gaming casino, offered various incentive schemes to wealthy gamblers whom it wished to encourage. These took the form of commissions or rebates provided to the gambler based on the amount of chips played or losses incurred by him over the term of the agreement. Under one of these schemes, the cash chip agreement, Aspinalls agreed to pay to the gambler a commission based on the total amount of cash chips staked during the course of the agreement providing the gambler had staked enough to meet a turnover requirement. One issue to which the appeal gave rise was whether, as Aspinalls argued, the value of the stake staked had to be determined by reference to the agreement between Aspinalls and the gambler under the cash chip agreement. Hence, Aspinalls argued, the value of the stake staked was the value of the stake less any commission due under the agreement. The Court of Appeal rejected that argument for reasons given by Moses LJ, with whom Black and Gloster LJJ agreed, at para 8: Section 11(10)(a) of the 1997 Act is clear. The value in money or moneys worth of the stakes staked is the face value of the chip. Staking a chip is the same as staking money and the value in money of the chip is its face value: see Davis LJ in CHT Ltd v Ward [1965] 2 QB 63, 79 and Lord Goff of Chieveley in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, 575, cited [2011] UKFTT 325 (TC) at para 30; [2012] STC 2124, para 35. The stake is the amount risked in connection with the game; it is the value of that stake which is put at risk in the game. The value put at risk in the game is not altered by reference to any commission the player receives under the cash chip agreement. The Court of Appeal was right to reach this conclusion. Section 11(10)(a) is concerned with the value of the stakes staked in the game, not any wider consideration such as the payment of commissions. The value of the stakes staked by a high value gambler with the benefit of the cash chip agreement was the face value of the chips used by that gambler to place the bet. That was the amount of money the gambler put at risk. The Court of Appeal went on to find, again rightly in my view, that the commissions were not prizes either. Section 11(10)(b) is concerned with the prizes provided by the banker in the game in the event the gambler wins the bet. The focus throughout is on the game itself, not the wider activities of the casino or the expenses it has incurred or its overall profitability. That brings me to Non Negs and how they are to be treated under this statutory scheme. I would acknowledge at the outset that Non Negs do have a real world value to the gambler. They confer on the gambler a right to make a bet in a game without placing any of his own money at risk, and with the bet comes the opportunity of winning. To this extent, therefore, I agree with HMRCs submissions. Non Negs operate as incentives or rewards because they have a real world value to the gamblers to whom they are provided and by whom they may be used to place bets in a game. So too I would reject LCMs submission that a gambler risks nothing when he uses a Non Neg to make a bet. He risks losing the Non Neg and with it the opportunity to win a prize by using it to make a bet. Nevertheless, Non Negs are very different from cash chips which represent money deposited by the gambler, or money which he has won or been given to encourage him to bet. Non Negs do not represent money to which the gambler is entitled and, unlike cash chips, they cannot be encashed or exchanged for goods or services. Further, when a gambler places a bet using a Non Neg, no money is appropriated to the bet. If the gambler loses, the Non Neg is placed in the drop box but no right to money passes to the casino. When the casino allows a gambler to bet with a Non Neg, it is, in a sense, allowing the gambler to bet with the casinos own money. Put another way, from the point of view of the casino, a Non Neg amounts to a free bet. As such, a Non Neg has no real world value to the casino when the gambler loses it in a bet save in so far as it may be said that a contingent liability of the casino to pay out according to the rules of the game in which it is played is eliminated. But in my view, this does not instil in the Non Neg a value, in money or moneys worth within the meaning of section 11(10)(a). Nor does it render it a stake staked within the meaning of that provision. Furthermore, a Non Neg does not make a contribution to the bankers profits within the meaning of section 11(10) or to the bankers gross gaming yield within the meaning of section 11(8). This is so whether the Non Neg is assignable or not. The assignability of the Non Neg cannot and does not affect its value to the casino. The diamond necklace This approach also yields the answer to a question which animated submissions at the hearing of this appeal. It arises from an illustration used by HMRC. Suppose, say HMRC, a gambler stakes a diamond necklace with an uncertain market value lying somewhere in the range of 15,000 to 35,000. HMRC submit that section 11(10) of the FA 1997 deals with this uncertainty by treating the value of the necklace (and so the stake) as the value that it is given in the game. So, if the casino and the gambler agree that the value of the necklace is to be treated for the purposes of the game as 10,000 then that is its value for the purposes of section 11(10) when it is placed as a stake. The casino cannot argue later that the true value of the necklace is less than 10,000, nor can HMRC argue that the true value is more than 10,000. This, HMRC continue, is the position in relation to Non Negs too. The casino and the gambler have agreed that Non Negs shall be treated as having their face value for the purposes of the game, and that is the value they must have when placed as a stake under section 11(10). This approach produces certainty. LCM agrees that, in this example, the necklace is to be treated as having a value of 10,000 for the purposes of calculating the bankers profits but says that this is consistent with its case rather than that of HMRC. Its case, it continues, focuses on the contract between the parties in order to determine whether there is a stake and, if there is a stake, what its value is. Non Negs allow a gambler to play for free. He places nothing at risk. So, a Non Neg has no value and is not a stake. I would not accept the arguments of either party in relation to this example for they both seem to me to ignore the need to assess the value in money or moneys worth of the stakes staked in calculating the bankers profits from gaming under section 11(10). The need to assess the value in money or moneys worth emphasises the need to ascertain the real objective value, that is to say, the real world value of a stake staked. If the casino and the gambler have agreed a value of 10,000 for a necklace which is staked in a game but the casino later finds that the necklace is made of paste and worthless, then it will contribute nothing to the bankers profits. Conversely, if the casino discovers that it has made a good bargain and that the necklace is worth more than 10,000, then that is the contribution it will make to the bankers profits. Of course the fact that the casino and the gambler have agreed a value of 10,000 for the necklace may be powerful evidence of its true value but it may not be determinative, and where it is not I can see no reason why HMRC, which are not party to the agreement between the casino and the gambler, should be bound by its terms. For all of these reasons, I would conclude that Non Negs are not stakes staked within the meaning of section 11(10)(a) of the FA 1997, nor do they have any value in money or moneys worth within the meaning of that provision. Issue (iii) Non Negs as prizes I agree with the UT and the Court of Appeal that any discussion of how Non Negs are to be valued in a game ought also to consider their value when returned by the casino to the gambler who has won his bet. As I have said, HMRC and LCM agree that Non Negs which are returned to the gambler in that way are prizes within the meaning of section 11(10)(b) of the FA 1997. They also agree that, so far as possible, there should be a consistency in approach as to the value of Non Negs as stakes staked under section 11(10)(a) and as prizes provided under section 11(10)(b). Hence HMRC say that they should be treated as having their face value for the purposes of section 11(10)(a) and (b) whereas LCM argues, and the UT and the Court of Appeal agreed, that they have no value. So too it formed no part of the submissions of either party that Non Negs should be treated differently for the purposes of section 11(10)(a) and (b). I would emphasise, therefore, that HMRC do not contend that, were this court to hold that Non Negs are not stakes staked or that they do not have a value, in money or moneys worth equal to their nominal face value when assessing the value of the stakes staked in a given accounting period, they nonetheless have their face value when returned to gamblers as prizes by application of section 20 BGDA. Nor, I would add, did LCM make such a submission. Nevertheless, it seems to me to be desirable that I should address, on their merits, HMRCs arguments concerning the value of Non Negs as prizes, albeit that these arguments have only been advanced as the counterpart of their case that Non Negs have their face value as stakes staked. HMRC have developed their case on this aspect of the appeal in the following way. They say that, as a matter of ordinary language, a Non Neg may be used in place of money as payment for benefits of a specified kind, namely the benefit in the course of a game of cash equivalent to the face value of the Non Neg. In the game, the Non Neg is as good as cash, and a gambler who uses the Non Neg is in the same position as a gambler who uses cash. Accordingly, section 20(3)(a) and (b) of the BGDA are satisfied and in so far as the UT and the Court of Appeal found to the contrary, they fell into error and misunderstood the statutory language and the underlying economic reality. They also say that section 20(3)(c) is satisfied, about which there has been no dispute. Turning now to paragraph (b) of section 20(4) of the BGDA, HMRC say this must be read with section 20(3)(a) and (b) and that, in referring to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount specified in subsection (3)(b), the paragraph must be referring to a restriction, condition or limitation on the use of the voucher beyond the fact that it can only be used as payment for benefits of a specified kind obtained from a specified person. Were it otherwise, any voucher which satisfied the requirements of section 20(3)(a) would also fall within section 20(4)(b) and that cannot have been the intention of the legislature. As for Non Negs, HMRC say that there is no restriction on their use beyond the limitation that they can be used for the purpose of playing particular games in LCMs casino. In summary, HMRC continue, Non Negs are vouchers which satisfy section 20(3)(a), (b) and (c) of the BGDA. Further, Non Negs do not satisfy section 20(4)(b). It follows that Non Negs are to be treated as having their face value as prizes for the purposes of section 11(10)(b) of the FA 1997. In my judgment Non Negs do not satisfy section 20(3)(a) of the BGDA. As I have explained, gamblers gamble with money. When a casino issues cash chips, the property in those chips remains the property of the casino. The cash chips are simply a convenient way of facilitating gambling with money. A gambler who places a bet using cash chips is not purchasing goods or services or any other benefits with the chips or with the money those chips represent. He is placing his money at risk under the terms of an agreement he makes with the casino to play a game of chance. Similarly, when a gambler uses a Non Neg to place a bet he is playing a game of chance in which the casino treats him as having put money to the value of the Non Neg at risk. If the gambler loses, the casino retains the Non Neg. If the gambler wins, the Non Neg is returned to him together with any other prize he has won. But in neither case has the gambler used the Non Neg in place of money as whole or partial payment for benefits of a specified kind obtained from the casino or banker. In these circumstances it is not necessary to express a final view on the proper interpretation and application of section 20(4)(b). Nevertheless, I would be minded to reject one aspect of the submissions of HMRC here too. In particular I would not accept that section 20(4)(b) must be referring to restrictions, conditions or limitations on the use of the vouchers concerning matters other than the kinds of benefits for which they can be used as payment or the persons from whom those benefits can be obtained. To my mind a critical feature of section 20(4)(b) is the requirement for its application that the restriction, condition or limitation may make the value of the voucher to the recipient significantly less than its face value. Some vouchers will satisfy this condition and others will not. Whether a Non Neg does so or not will depend upon the restrictions, conditions or limitations imposed by the casino on its use and the impact those restrictions, conditions or limitations have upon the value of the Non Neg to the gambler. I am confirmed in these views because, on the interpretation of section 20(3) of the BGDA which I would hold to be correct, the outcome is a coherent scheme for the treatment of Non Negs whether used by gamblers to place bets or when returned to gamblers as prizes. Were it otherwise, the legislation would have the consequence that Non Negs would not contribute to bankers profits when gamblers lost their bets but would reduce those profits when gamblers won and had their Non Negs returned to them as prizes. It would mean that if, for example, a gambler, who places as a bet a Non Neg with a face value of 100, wins three times in a row before losing, and each time he wins has his Non Neg returned to him together with any other prize, the casino can say that, simply by returning the Non Neg, it has incurred a cost of 300 in prizes and reduce its profits accordingly. That would produce an incoherent scheme which would be unduly favourable to casinos and in my view that cannot have been Parliaments intention. Conclusion For all of these reasons, I would dismiss this appeal. LADY ARDEN: Bankers profits for gaming duty purposes This appeal concerns gaming duty, which is chargeable on premises such as casinos in the United Kingdom where dutiable gaming, including casino games, takes place. The respondent at its casinos provides to selected customers Non Negs, that is, non negotiable vouchers for gaming conferring the right to place free bets in order to induce those customers to visit its casinos and engage in gaming. The vouchers can only be used for that purpose and they are non negotiable in that they cannot be exchanged for cash or used to pay for goods or services such as food and drink, but, if the customer using Non Negs wins, he receives redeemable cash chips and is given back his Non Negs. Non Negs are not subject to any restriction on transfer. They bear a face value amount which is the amount for which they can be wagered. The key question at the heart of this appeal is whether the Non Negs should be taken into account as part of the bankers profits for the purposes of section 11(8)(b) read with section 11(10) of the Finance Act 1997 (the FA 1997), which are set out in paras 3 and 5 above. Gaming duty in this case is charged on gross gaming yield from the relevant premises (section 11(8) of the FA 1997, para 3 above). Where there is a banker for gaming purposes, the gross gaming yield means both the gaming receipts and the bankers profits. These are defined in section 11(10) as follows: In subsection (8) above the reference to the bankers profits from any gaming is a reference to the amount (if any) by which the value specified in paragraph (a) below exceeds the value specified in paragraph (b) below, that is to say (a) the value, in money or moneys worth, of the stakes staked with the banker in any such gaming; and (b) the value of the prizes provided by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises. Value of stakes is value at large It is clear that Parliament in enacting this provision is requiring there to be brought into account for the purposes of gaming duty not the receipts of gaming (which are covered by section 11(8)(a)) but the value of stakes staked less the value of prizes paid. It is, therefore, not determinative that the stake might have been issued as a free bet by the casino, or that the receipt was less than its perceived value as where the customer puts down a stake in the form of an IOU but then fails to pay. The key is the value of whatever has generated the gaming activity. Value is not restricted to the amount for which the stake is bet In my judgment, the term value in section 11(10)(a) is value at large in that it is determined by open market valuation, that is what a person would pay for it in the open market, and that person could include the casino. In its primary case HMRC adopt a game based approach to valuation and submits that the value of the stakes staked is the value which the stake is given for the purposes of the relevant gaming, as opposed its value to any particular person or in the market. HMRC point out that the term banker is used in this subsection in its gaming connotation. The term value of the stakes staked is not, however defined and it seems to me that that it must bear its ordinary meaning. The expression stake staked are an unusual collocation of words, and it has not been suggested that the combined phrase is a term of article The word staked seems to mean which has been staked, meaning actual staking and constituting a form of condition subsequent to the identification of a stake. I do not think it can be read as in the amount that it has been staked. Even if it did, it could be liable to circumvention where stakes were accepted, for instance, in ounces of silver. I therefore join with the majority in rejecting HMRCs primary case. Of course, it is consistent with HMRCs case that, as the majority hold and I agree, the diamond necklace of uncertain value is to be taken to have a value equal to the amount for which the casino allows it to be staked, no more and no less. This is also consistent with my approach. As I see it, that limitation is achieved by the word staked. The only value which is relevant is that which has been wagered or staked, and the rest falls outside gaming duty. I can see that it would be easier to administer the duty (which is self assessed in the first place) if the person liable to gaming duty had to take only the face value of the voucher, but we have to interpret the words that Parliament has used. This to me is more important than the fact that the object of section 11(10) is to ascertain the bankers profits because section 11(10) does not have as its purpose the presentation of a true and fair view of a bankers profits, as would the statutory accounts of a registered company. Section 11(10) is an artificial sectoral formula which has left matters of deduction out of account and which can equally bring matters into account even if they would not fall to be included under conventional accounting principles (cf para 38, last sentence of Lord Kitchins judgment). Aspinalls (paras 39 to 41 above) shows that the formula is not based on conventional accounting principles of admitting the deduction of all costs incurred in making a particular profit. Market value is in issue on this appeal An alternative case put by HMRC is market valuation. This does not arise on the facts in this case as found by the tribunals. It arises only because the majority has adopted the approach to value of valuation from the perspective of the banker alone. This excludes market valuation. Therefore it seems to me incumbent to deal with the issue of market valuation on this appeal. If market value is the value of the stake, and a stake has a market value, that stake would, to the extent of that value, form part of the bankers profits once the stake had been staked. Contrary to the majoritys conclusion, value of a stake is not restricted to the perspective of the banker In my judgment, the majority make a critical error in interpreting value as the value from the perspective of the banker without any legislative direction to that effect (see para 37 above). This appears, in the opinion of the majority, to make irrelevant any market value: see para 44 above (The assignability of a Non Neg cannot and does not affect its value to the casino). That means that, if the banker issues a free bet and can then say, when the free bet is staked, that there is no contribution to its tangible assets, the free bet is outside the scope of gaming duty. In my judgment this is contrary to the statutory direction in section 11(10) to ascertain the value of the stakes staked because value is, as explained above, unqualified. The bankers perspective approach fails to take account of the fact that the free bet is staked and leads to gaming activity at the premises which are subject to gaming duty. A nil value is still a value. An objective value is a real world value. Profits can be bankers profits without the elements used to calculate those profits having to be valued from the perspective of the banker. Moreover, if Lord Sales is right in his interpretation of section 20 of the BGDA (dealing with the valuation of prizes), the further asymmetric and anomalous result is reached under section 11(10A) that the casino can not only exclude the free bets from bankers profits but also deduct the amount of prizes in the form of free bets from other stakes and reduce its other bankers profits accordingly. In any event, if there is a market value, it is as open to the banker as anyone else to make an offer to acquire the Non Neg. It is wrong to conclude that market value is not available to the casino. The casino could offer to acquire the Non Neg when the holder arrives at the casino, perhaps by offering him a free drink in exchange or a cash chip of a reduced amount. If the banker modelled the risk of a holder of a Non Neg winning, it would no doubt be in its interests to make such an offer at the appropriate amount to avoid a loss. When the player loses his bet, the right to stake the Non Neg is lost and the paper voucher is taken out of play. So, in my respectful judgment it is not open to the casino to say that nothing passes to it: it has extinguished the liability on the Non Neg. There cannot be read into the statute a requirement that this benefit is acquired by way of assignment or transfer. HMRCs failure to lead evidence of market value HMRC made an error of law at the start of this case which was corrected by the Tribunals. HMRC contended that the value of a Non Neg was its face value. The First tier Tribunal (Judge Greg Sinfield) rejected that method of valuation and found that the value was the chance of winning. The Upper Tribunal (UT) (Henderson J and Judge Roger Berner) corrected that by pointing out that the value had to be value in money or moneys worth, and there was no evidence to support any valuation. Therefore, HMRC failed on the facts, but non constat that it could not be shown on other evidence that objectively speaking the Non Neg had value. The UT explained the position as follows: 33. We do not regard as anything to the point that the Non Neg might provide the player with a right to play a game, or a right to have the chance to win, or a promise from the club in those respects, which Ms Wilson argued was a valuable right. The mere fact that such a right might subjectively be regarded by the holder of the Non Neg as a valuable right, in the sense that it would enable that holder to play a game without putting money at risk, is not material to an objective valuation, in money or moneys worth, of the stake staked. 34. On the other hand, the objective valuation of a stake would, in our view, have to have regard to the monetary value, if any, that could be obtained on an arms length assignment to a third party of the right to place that stake, in the same way that it would if the Non Neg was redeemable for cash or for goods and services. That would be moneys worth for the purpose of section 11(10)(a). It was not, however, HMRCs case that the stakes of the Non Negs should have any value other than the face value of the Non Negs, and there were no findings of fact either that the Non Negs were transferable or, if they were, what value might be realisable on a transfer. Furthermore as section 11(10)(a) requires the individual stake to be valued, there would have to be evidence of a value generally obtainable in a market in Non Negs or evidence that a particular Non Neg could have been, at the time it was staked, assigned for money or moneys worth. In the absence of such evidence, it is not possible to ascribe any moneys worth to the stake by reference to any assignable right. 35. It follows, in our judgment, that the FTT erred in law when it concluded, at para 27, that the value, in money or moneys worth, of a Non Neg was its monetary face value, on the basis that the face value would be used to calculate winnings in cash chips and on a losing bet the player would no longer have the right to bet that monetary value for free. In our view, the FTT failed to have proper regard to the requirement that the value in section 11(10)(a) must be a value in money or moneys worth The Court of Appeal (as referred at [2019] 1 WLR 1) agreed with this passage from the judgment of the UT (paras 36, 51 and 52). Mechanics of objective valuation Objective valuation permits the possibility that the parties will adduce evidence as to whether another person in the open market would buy the voucher and if so at what price. In the hands of an experienced player, it might be that the Non Negs could be turned into winnings, paid in cash chips, which the player could then encash. In those circumstances the Non Neg may have some value in the open market, even if small. The objective valuation of the stake permits the stake to be taken into account at an appropriate value as directed by Parliament if it has generated gaming activity, which is the trigger for the charge to gaming duty. The voucher serves the function of a gaming chip. In the normal way the customer obtains a gaming chip by placing a deposit of cash with the banker. Lord Kitchin refers to the speech of Lord Goff in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 in which this point is made. But with free bets there is no deposit of cash: although there are different types of voucher in this case as Lord Kitchin explains, this feature is a constant. In short, the Non Negs are all free bets issued by the casino itself as a promotional tool. The fact that they are not issued for cash does not in my judgment prevent it from being a stake or having an objective value for the purposes of section 11(10). Furthermore, the majority accept that the Non Neg has a real world value to the gambler and thus, I assume, a value might be realisable on the open market: see para 42 of the judgment of Lord Kitchin. Subjective ideas of value play no part in the process of valuing a stake. I therefore agree with Lord Kitchin in rejecting the argument to that effect that a diamond necklace of uncertain value offered and accepted as a stake for a specified amount is to be valued by reference to what the parties or at least the banker thought was its value. It is irrelevant if the banker or the player wrongly thought that the necklace was paste and therefore much less than it turned out to be. As I have said, it is inherently unlikely, given that Parliament would be concerned with the fair and equal allocation of tax burdens, that it was intended that the value of a stake should depend on anything other than its objective market valuation. That leaves the question of exactly what must be valued. As I have explained, one function of the word staked in the expression of the value of the stakes staked is to limit the stake to that part of, or that part of the value of whatever is staked, or what is used in the game. Why a Non Neg is a stake for the purposes of section 11(10)(a) of the FA 1997 In my judgment, a Non Neg is a stake and the Court of Appeal fell into error in holding otherwise. Dame Elizabeth Gloster, with whom Leggatt and Flaux LJJ agreed, reasoned on this issue as follows: 29. The calculation of stakes staked under section 11(10)(b), to my mind, in context, involves a conventional arithmetical calculation of real world stakes received from players, which, if necessary, could feature as actual receipt or revenue figures in a set of accounts; it does not on any natural reading include artificial or notional values placed on tokens given to the player by the casino, as part of a promotional or marketing exercise, which intrinsically have no value and are non negotiable, or at best have an economic value to the player equivalent to their face value multiplied by the chances of winning. In real terms, when the casino gives out Non Negs to favoured players, it is allowing the player to bet with its (the casinos) own money. There is no receipt by the casino contributing to its gross profits; on the contrary, in permitting the player to gamble with a Non Neg, what the casino is actually doing is incurring a contingent (non enforceable) liability to pay out, according to the relevant odds of the game, in respect of the face value of the Non Neg in the event that the chip is placed as a winning bet. It is, in my judgment, counter intuitive in such circumstances to characterise what is essentially an item of the casinos own expenditure as part of the bankers profits or as a stake having a value in money or moneys worth. In no sense could the face value of a Non Neg, or even the value to the player calculated by reference to the chances of winning, feature as a receipt in a casinos accounts or be said to contribute to its gross profits. 30. For that reason taken on its own, I would not regard a Non Neg as being a stake which was required to be taken into account in the calculation of gross gaming yield as defined under section 11(8) or of bankers profits as referred to or defined under section 11(8)(b) or section 11(10). In particular, I do not consider that the amplified definition of bankers profits in section 11(10) requires one artificially to include the Non Negs (which are clearly not items of receipt directly contributing to profit, but rather items of expenditure) in the statutory profit calculation. In other words, in construing the relevant provisions one has to have regard to the relevant context. Although the phrase in section 11(10)(a) the stakes staked with the banker could arguably be said, linguistically, to be broad enough to include a Non Neg (simply because a Non Neg chip is placed on the gaming table by a favoured recipient as a stake), in my judgment, the phrase, construed in its actual context ie the ascertainment of gross gaming yield and bankers profits does not permit the artificial inclusion, as an item of stake under section 11(10)(a), of an amount of the casinos promotional marketing expenditure given to the player by the casino. Only in the most general and indirect sense could such a stake be said to be contributing to profit; and it could not be said in any real sense to constitute part of the gross gaming yield of the casino. I do not agree with this analysis. This reasoning with respect confuses the stake staked with its value. A stake is an ordinary English word meaning: That which is placed at hazard; esp a sum of money or other valuable commodity deposited or guaranteed, to be taken by the winner of a game, race, contest, etc. (Oxford English Dictionary, 2nd ed (1989)) The word staked enables stakes which are not used in gaming to be left out of account and so Non Negs which are issued but never used may be excluded from the calculation of bankers profits. But a stake can on an assessment of its market value be worthless, as in the case of forged cheques (see Lydiashourne Ltd v Revenue and Customs Comrs (Decision E00092), 13 August 1998 explained by the UT at para 42). This is an important point in the statutory scheme. Stakes and prizes are not, moreover, the same as assets and liabilities in accounting generally. Parliament has required a specific account to be taken of stakes staked and prizes paid, and the fact that a stake might in some circumstances for accounting purposes be treated as a conditional liability or expenditure of the casino rather than as a receipt is not relevant. As stated above, a nil value is still a value. A stake does not cease to be a stake because it is of nil value. Does statute require the method of valuing Non Negs as stakes and Non Negs as prizes to be consistent? The valuation of Non Negs as prizes which can be deducted from the value of stakes staked is governed by section 11(10A) (para 6 above) which incorporates by reference subsections (2) to (6)(a) of section 20 of the BGDA (as amended by the Finance Act 2003) (the relevant parts of section 20 are set out in para 7 above). Section 11(10A) is not as such a deeming provision, but one which requires modifications to be made to the incorporated provisions. Where, as here, such a provision does not spell out the modifications which can be made, it may give rise to some exacting interpretation issues, and there should in my view be no expectation or anticipation that such a provision when carefully analysed should have rough edges or worse. It is, in my judgment, more important to approach those provisions in their application to gaming duty on the basis of the principle of statutory construction that it should be presumed that Parliament intended the statutes in pari materia (as here) to constitute a harmonious whole. On that basis, if I am right that the value of the Non Neg falls into the definition of the bankers profits I would as a matter of first impression expect the basic rules of debit and credit to apply and therefore, that if the value of stakes is credited on one basis, that, when Non Negs form part of a prize, they will be debited on the basis of a similar valuation method. On that last point, the views of the majority and my own coincide. On the other hand it is noticeable that subsections (3) and (4) of section 20 BGDA are expressly drafted so as to achieve HMRCs primary case on section 11(10) of the FA 1997 that the relevant value (in that case, a Non Neg) is the face value amount of the voucher, an argument which all members of the Court have rejected, and so some differences may in fact be unavoidable. HMRCs arguments of the parties are set out in paras 51 to 53 above. I approach the submissions on the hypothesis that it has been shown that the Non Negs have a market value as a stake. As to section 20(3)(a) I agree with Lord Sales. The majority do not explain what is meant by in place of money and in my judgment it must include instead of money. On that basis the prize of a Non Neg plainly satisfies section 20(3)(a). (No issue arises on section 20(3)(b) or (c)). As to section 20(4)(b), the UT held that the prize was not to be treated as valueless because of its restrictions under section 20(4) but in this the Upper Tribunal failed to give weight to the direction to find the value to the recipient. The recipient was a player, and the value of a free bet to someone who wants to gamble is not obviously significantly less than the face value of the voucher (and the majority accept the real world value of a free bet to the player: para 42 above). The question whether section 20(4)(b) is satisfied will depend on a consideration of the restriction in question. It is capable of being satisfied as where, for instance, the voucher contains some unreasonable condition as to the time of use of the voucher. I agree with Lord Sales that it must be a restriction on the use not of the prize but of the voucher in place of money as described in section 20(3)(a). The point is that, if the condition in section 20(4)(b) is met, it would be unreasonable to afford the casino the deduction of the face value of the prize to which it would otherwise be entitled to under section 20(3). This is consistent with the fact that, if section 20(4)(b) is met, it would be unlikely that the Non Neg would have any market value as a stake. If it is not met in any case, the banker would, on the face of it, be entitled to a deduction for the amount specified in the voucher. I do not propose to express a final view on this because the Court has heard no argument on whether, as authorised in principle by the terms of section 11(10A), in these circumstances section 20(3) must necessarily be modified to achieve parity between the credit to profits and the deduction of prizes where Non Negs are involved. That question must remain open. Conclusion On the facts of this case, but for reasons materially differing from the majority and the Court of Appeal, I would dismiss this appeal. LORD SALES: I agree with Lord Kitchins judgment in respect issues (i) and (ii), regarding the proper interpretation of section 11(10)(a) of the Finance Act 1997 (as amended). That is all that is necessary to dispose of the appeal. However, the UT and the Court of Appeal also expressed views in respect of issue (iii), regarding the proper interpretation of section 20 of the BGDA, as it applies by virtue of section 11(10A) of the FA 1997 in relation to the valuation of prizes for the purposes of section 11(10)(b), and we were invited to do the same. On that issue, I have come to a different conclusion from Lord Kitchin. As regards section 11(10)(a), I agree with Lord Kitchin that the subparagraph is concerned with the value to the banker of the stake staked. Although section 11(10) is focused just on the game (rather than the bankers income or profits in the wider sense), it imposes a tax on the banker. Accordingly, it is appropriate to construe it as applying in relation to real economic gains which the banker receives in the context of the game. This is borne out by the fact that what is taxed under section 11 is the gross gaming yield (section 11(2)(a)), which is calculated, according to section 11(8), by adding together gaming receipts and the bankers profits from the gaming. This language strongly suggests that what is in contemplation is receipts in the sense of real sums received by the banker (and section 11(9), which explains how they are to be calculated, reinforces this point) and profits in the sense of real profits realised by the banker from the gaming. In my view, this context informs the construction to be given to section 11(10), which explains how bankers profits are to be calculated. Further, as the UT emphasised (para 27), the reference in section 11(10)(a) to money or moneys worth indicates that the calculation is concerned with real world value. I would add that the context shows that it is real world value available to the banker which is significant. As Lord Kitchin points out, from the point of view of the gambler a Non Neg does have a real economic value (para 42); but from the point of view of the banker, as a contribution to its receipts and profits, it has none it simply represents a free bet (para 44). I agree with him that in the context of section 11(10)(a), the relevant concept of real economic worth is that given from the bankers perspective, not from that of the gambler. This view is supported by the points made in para 89 above. Therefore HMRCs submissions regarding the interpretation of section 11(10)(a), to say that under that provision either a Non Neg should be given its face value or should be given the notional market value it might have if it is assignable by the gambler, must be rejected. Moneys worth in section 11(10)(a) refers to real economic value to which the banker has access and which therefore can add to his profits. It does not include value to which only the gambler has access. Hence, it does not include the putative exchange value for the gambler of selling a Non Neg to a third party who wants to gamble. Even if the Non Neg is assignable, this is not value to which the banker has access in any real sense. If the banker wants to sell chips to another gambler, he will sell him regular chips. The application of section 11(10)(a) does not depend on the happenstance whether a Non Neg is assignable or not. Parliament intended that the application of the tax should be uniform as between different bankers and that it should not depend upon such matters, which are of no economic consequence from the bankers point of view. It should be emphasised that this is to give section 11(10)(a) a different construction from that arrived at by the UT, as endorsed by the Court of Appeal. Although the UT dismissed HMRCs contention that a Non Neg should be given a value under section 11(10)(a) equal to its face value, the UT considered (para 34) that this provision required a notional objective value to be given to a Non Neg in the gamblers hands, and it was only because HMRC had not introduced any evidence as to what that value might be that in this case the Non Negs should be treated as having nil value for the purposes of section 11(10)(a). By contrast, on Lord Kitchins interpretation of section 11(10)(a), with which I agree, the focus is firmly on the value of a stake for the banker in the context of the game. This means that issues which would affect the value of a Non Neg from the point of view of the gambler, but not the banker, such as whether it is assignable or not, are irrelevant. In my view, this approach to the proper interpretation of section 11(10), rooted in economic reality so far as concerns the bankers position and the calculation of his profits from the game, also means that the premise for the submissions made both by HMRC and LCM namely that Non Negs must be given the same value in subsection 11(10)(a) (the plus side of the calculation of the bankers profits) and in subsection 11(10)(b) (the minus side of that calculation, based on the prizes given in the game) breaks down. It is agreed that when a gambler plays a game with a Non Neg and wins, so that the Non Neg is returned to him with his winnings, the Non Neg so returned constitutes part of the prize given in the game. (Of course, one might have Non Negs the terms of which only allowed them to be played once and excluded them from being returned if the gambler wins a game using them, but that is not true of the Non Negs in issue on this appeal.) There is a real cost to the banker in providing a Non Neg as a prize, equal to the percentage chance the gambler has of winning real money from the banker when using the Non Neg to bet in the next game. Accordingly, the value of a Non Neg is different in the two elements of the calculation. The value of a Non Neg is nil from the point of view of the banker as regards section 11(10)(a), but when awarded as a prize it represents a real cost to the banker which ought in principle to be brought into account under section 11(10)(b), since section 11(10) is concerned with economic reality in relation to the bankers position. It is unfortunate that the submissions of the parties on issue (iii) were not entirely helpful or well directed, because they proceeded on the false premise that the approach to valuing a Non Neg should be the same for both sides of the equation. Before the amendment of section 11 of the FA 1997 by the addition of subsection (10A) in 2007, in calculating his profits from the gaming under section 11(10) the banker was entitled to bring the real cost of providing a Non Neg as a prize into account under subparagraph (b). Section 20 of the BGDA, to which section 11(10A) of the FA 1997 refers, deals with the valuation of non cash prizes in bingo gaming (see subsection (1): A persons expenditure on bingo winnings for an accounting period is the aggregate of the values of prizes provided by him in that period by way of winnings at bingo promoted by him). I do not consider that the amendment of the FA 1997 in 2007 to cross refer to section 20(2) (6)(a) of the BGDA to govern the calculation of the value of prizes given by the banker was intended to change the fundamental scheme of section 11(10) so as to disable the banker from bringing into account the value of Non Negs as prizes, even though they represent a real economic cost in the game for the banker. Yet this is the consequence which Lord Kitchins interpretation of section 20 produces. Rather, in my opinion, the cross reference to section 20 was intended to simplify and make uniform across the gambling industry and across different games of chance the calculation of the value of the cost to the banker or game organiser of vouchers (including Non Negs) given as prizes, for the purposes of calculating their income or profits from the game. In my view, on a straightforward reading of section 20(3) and (4) of the BGDA (set out at para 7 above), a Non Neg given as a prize satisfies the conditions in subsection (3) and does not fall within subsection (4), with the result that the Non Neg is treated for the purpose of section 11(10)(b) of the FA 1997 as having its face value. This is somewhat generous to the banker, as the true economic cost of the Non Neg will be less than this. But it only applies in relation to those Non Negs which are played and then returned to the gambler when he wins, which will be a very small subset of Non Negs. In relation to Non Negs which are played and lost, the banker cannot bring their cost to him into account at all. I consider that the interpretation of section 20 which I prefer respects the basic structure of section 11(10), in that it does give a value to what is a real cost to the banker in providing Non Negs as prizes. The application of deeming provisions in tax legislation, like section 20 of the BGDA, inevitably involves some rough edges, which may somewhat benefit the taxpayer or HMRC depending on the particular context. Such rough edges are the price paid for securing simplicity, uniformity and equality of treatment across a range of situations. In any event, it seems to me that the application of section 20(3) and (4), respectively, is clear in the present context. I do not think it is possible to depart from the clear wording of the provision as legislated by Parliament in order to address the sort of situation identified by Lord Kitchin at para 56 above. It is common ground that a Non Neg qualifies as a voucher for the purposes of section 20(3). Section 20 involves a degree of departure from the focus in section 11(10) of the FA 1997 on the economic position of the banker, in that section 20 focuses on the economic benefit of the voucher to the gambler: see section 20(3)(a), which focuses on how the gambler is able to make use of the voucher, and section 20(4)(b), which also focuses on the value of the voucher to the recipient. Therefore, in my opinion, one cannot say that just because a Non Neg does not qualify as a stake under section 11(10)(a) because it has no economic value for the banker, the same conclusion must follow when applying section 20. For present purposes, the starting point in applying section 20 is subsection (3). That provides that where the prize is a voucher which satisfies the conditions in subparagraphs (a) to (c), the specified amount is the value of the voucher for the purpose of the calculation of the cost to the banker of the provision of the voucher as a prize. In the present case, it is agreed that the condition in subparagraph (c) is satisfied. The application of section 20(3) therefore turns on subparagraphs (a) and (b). In my view, in respectful disagreement with Lord Kitchin, as regards subparagraph (a), a Non Neg given as a prize may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person. The gambler is entitled to use a Non Neg in place of an ordinary chip, representing money, as payment for a benefit of a specified kind, namely participation in a game of chance, obtained from a specified person, namely the banker. It seems to me that the condition in subparagraph (a) clearly is satisfied in relation to a Non Neg. I do not understand it to be in dispute that the condition in subparagraph (b) is satisfied: a Non Neg clearly specifies the amount of money which it represents in the game. Therefore, according to section 20(3) and subject to section 20(4), the relevant amount to be brought into account as the cost of the prize in section 11(10)(b) of the FA 1997, as amended, is the value which the Non Neg is specified to have. A Non Neg with a face value of, say, 5 for use in a game will have that value for the purposes of section 11(10)(b). I turn then to section 20(4), to see whether it has the effect that the Non Neg given as a prize should be treated as having no value for the purposes of section 11(10)(b) of the FA 1997. In my view, the precondition for the operation of section 20(4) set out in subparagraph (a) is not satisfied. For the reasons given above, a Non Neg given as a prize satisfies section 20(3)(a) and (b). That leaves the alternative precondition for the operation of section 20(4) set out in subparagraph (b). In my view, normally this precondition is not satisfied either. A paradigm case for application of section 20(4)(b) would be a prize in a bingo game or other game of chance in the form of a voucher redeemable for a weeks holiday worth a specified amount at a specified resort, but where the fine print stated that it could only be used in one specified and unattractive week of the year. In such a case, the value of the voucher to the recipient, who in practice might not be able or might not wish to use the voucher, might well be significantly less than its apparent face value. What is significant about such a case is that the use of the voucher as described in subsection (3)(a) (ie to obtain the benefits of a specified kind from the holiday resort) is subject to a relevant restriction, condition or limitation in relation to using it to obtain that benefit. However, assuming that one is concerned with a Non Neg in simple form, that is not the position in the present case. (I leave aside cases which might arise in theory, in which a Non Neg is subject to conditions which mean that the gambler cannot simply use it at will in a game, but, say, could only so use it at particular times of day which were inconvenient: such conditions would give rise to a potential issue regarding the application of section 20(4)(b) similar to that referred to in para 103 above). The use of a simple form Non Neg as described in subsection (3)(a) (ie to stand in place of money in payment for participation of a game of chance with the banker) is not limited in any way. When used for that purpose, the Non Neg is used in place of money at the full face value of the Non Neg. It is irrelevant that it cannot be used in place of money for any other purpose. For the reasons I have given, under issue (iii) I consider that section 20 of the BGDA as applied to section 11(10)(b) of the FA 1997, as amended, has the effect that a Non Neg given as a prize should be brought into account at the full face value of the Non Neg.

Gaming duty is an excise duty that is charged in accordance with the provisions of the Finance Act 1997 (the FA) on any premises where dutiable gaming takes place. Non negotiable gaming chips and free bet vouchers (collectively referred to as Non Negs for the purposes of this appeal) are promotional tools provided free of charge by some casino operators to selected gamblers to encourage them to gamble in their casinos. Non Negs may typically only be used to place bets at the gaming tables for their face value and cannot be used to buy goods or services, nor encashed. This appeal is about whether Non Negs should be taken into account as part of the bankers profits for the purposes of computing gaming duty in accordance with section 11(8)(b) read with section 11(10) of the FA. Bankers profits are defined by section 11(10) as the value, in money or moneys worth, of the stakes staked with the banker in any such gaming (section 11(10)(a)) less the value of the prizes provided by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises (section 11(10)(b)). The valuation of prizes for the purposes of section 11(10)(b) is governed by section 11(10A) of the FA which incorporates by reference, with any necessary modifications, certain provisions of the Betting and Gaming Duties Act 1981 (the BGDA). From October 2008 until September 2012, London Clubs Management (LCM) included the face value of all the Non Negs played by gamblers and retained by its casinos in the calculation of its bankers profits for the purposes of computing its liability for gaming duty. It subsequently considered that this approach was incorrect and that it had overpaid gaming duty by over 1.97 million. Her Majestys Revenue and Customs (HMRC) rejected LCMs claim for repayment of the alleged overpayment and LCM appealed that decision. The First tier Tribunal dismissed LCMs appeal. The Upper Tribunal allowed LCMs appeal. The Court of Appeal dismissed HMRCs further appeal. HMRC appealed to the Supreme Court. The Supreme Court unanimously dismisses the appeal. The leading judgment is given by Lord Kitchin, with whom Lord Carnwath and Lady Black agree. Lady Arden gives a separate judgment, agreeing that the appeal should be dismissed but for materially different reasons. Lord Sales gives a separate judgment agreeing with the majority on the decisive issues in the appeal but reaching a different conclusion on a related issue. Lord Kitchin holds that Non Negs are neither stakes staked, nor have any value in money or moneys worth within the meaning of section 11(10)(a) of the FA [31 48]. First, the assessment of the gross gaming yield from any premises requires a focus on the activity of gaming and not the provision of other goods or services [36]. Second, the assessment required by section 11(10) must be carried out from the bankers perspective, for it is the bankers profits which must be brought into account in calculating the gross gaming yield [37]. Third, the reference to money or moneys worth in section 11(10)(a) emphasises that it is the real world value of the stakes in the hands of the banker which matters [38]. A gambler who plays with cash chips in a casino is not staking the chips as such but the money those chips represent, which the gambler has deposited with the casino [31 35]. That is not the case when a gambler places a bet using a Non Neg, which essentially amounts to a free bet. Therefore, a Non Neg holds no real world value to the casino when a gambler loses it in a bet, save that it eliminates the chance that the casino may have to pay out the winnings corresponding to that bet. However, that does not impart a value, in money or moneys worth to the Non Neg, nor mean that it is a stake staked within the meaning of section 11(10)(a) of the FA [44]. Lord Sales agrees with Lord Kitchins reasoning in this regard and provides further reasons in support of the conclusion [88 92]. Lady Arden adopts different reasoning for dismissing the appeal [61 78]. She holds that the value of a stake for the purposes of section 11(10)(a) is what a person would pay for it in the open market [62]. The objective valuation of the stake means that it can be taken into account at an appropriate value if it has generated gaming activity, which is what gaming duty is charged upon [70]. A Non Neg is a stake for the purposes of assessing the bankers profits under section 11(10)(a) of the FA [75]. However, the appeal fails on the facts of this case as no evidence was adduced to support any objective valuation [68]. The Supreme Court also considers the related issue of what value, if any, should be given to Non Negs for the purposes of section 11(10)(b) of the FA. Lord Kitchin expresses the view that, as with section 11(10)(a), it is the real world cost to the banker of providing the prizes that must be brought into account for the purposes of assessing the value of the prizes provided by the banker, subject to the relevant provisions of the BDGA [38]. Under the BGDA, the cost to the banker of awarding a voucher as a prize is taken to be its face value if, among other things, it may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person. Non Negs do not satisfy this condition and must therefore be treated as having no value for the purposes of section 11(10)(b) of the FA [54]. Lord Kitchin is confirmed in his views by the consideration that the result is a coherent scheme for the treatment of Non Negs, whether used by gamblers to place bets or when returned to gamblers as prizes [56]. Lord Sales reaches a different conclusion from the majority in this regard. When a Non Neg is awarded as a prize, it represents a real cost to the banker which ought to be brought into account [93]. A Non Neg given as a prize satisfies the relevant conditions under the BDGA 1981, such that it should normally be treated as having its face value for the purposes of section 11(10)(b) of the FA [95 104]. Lady Arden agrees with Lord Saless conclusion in this regard [82 84].

The members of the Court are well aware of the limited nature of the issue which we have to decide in this appeal. But many of the general public (who are understandably taking a close interest in the matter) are not so well aware of its limited scope. It is therefore appropriate to spell out at the outset that the Court does not have the task of deciding whether the system of charging personal current account customers adopted by United Kingdom banks is fair. The appellants are seven of the largest banks in the United Kingdom and one building society (but I shall for convenience refer to them all as the banks). The appellants accept that the system of free if in credit banking prevalent in this country involves a significant cross subsidy (amounting to about 30 per cent of the banks total revenue stream from current account customers) provided by those customers who regularly incur charges for unauthorised overdrafts (a cohort, we were told, of the order of twelve million people) to those customers (a cohort of about 42 million people) who are in the fortunate position of never (or very rarely) incurring such charges. Banks in other European countries adopt different forms of cross subsidy; French banks for instance, concentrate their charges on processing standing orders and debit card transactions. Some would regard the United Kingdom system as being, in some sense at least, obviously unfair, though Mr Sumption QC (for the banks) vigorously disputed Lord Mances suggestion that his clients were engaged in a sort of reverse Robin Hood exercise. That is an imponderable question which depends partly on whether ones perception of the average customer who incurs unauthorised overdraft charges is that he is spendthrift and improvident, or that she is disadvantaged and finding it hard to make ends meet. But it is not the question for the Court. The question for the Court is much more limited, and more technical. It is whether as a matter of law the fairness of bank charges levied on personal current account customers in respect of unauthorised overdrafts (including unpaid item charges and other related charges as described below) can be challenged by the respondent the Office of Fair Trading (the OFT) as excessive in relation to the services supplied to the customers. That issue depends on the correct interpretation (in its European context) and application of Regulation 6(2) of the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083 (the 1999 Regulations). Regulation 6(2) is as follows: In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate (a) to the definition of the main subject matter of the contract, or (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange. The context requires adequacy to be read in the sense of appropriateness, as Lord Rodger of Earlsferry pointed out in Director General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1 AC 481, para 64. The Directive and the Regulations The 1999 Regulations were made under section 2(2) of the European Communities Act 1972 in order to transpose into national law Council Directive 93/13/EEC on unfair terms in consumer contracts (the Directive). The 1999 Regulations revoked and replaced similar regulations made in 1994 (SI 1994/3159) in order (as the explanatory note to the 1999 Regulations puts it) to reflect more closely the wording of the Directive. Regulation 6(2) of the 1999 Regulations does indeed follow closely the English text of Article 4(2) of the Directive, which is as follows: Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, in so far as these terms are in plain intelligible language. The Court has had available the texts of Article 4(2) in French, German and some other languages, but they cast little light on the interpretation of the English text. Both Mr Sumption (for the banks) and Mr Crow QC (for the OFT) made submissions about the background to the Directive, its travaux prparatoires, and academic commentaries on it. The Directive in its final form applies only to contractual terms which have not been individually negotiated. That is the effect of Article 3, which sets a fairly high threshold for meeting that test. The Councils original proposals had been more far reaching but they attracted a lot of criticism, especially from commentators in France and Germany, who were concerned at such extensive inroads into freedom of contract. An article by Professor Brandner and Professor Ulmer of the University of Heidelberg ((1991) 28 CML Rev 647) was particularly influential. In September 1992 the Council brought forward new proposals which can be described as a compromise solution balancing the need for consumer protection against residual freedom of contract. Recital (19) reflects part of this compromise, though it does not contribute very much to the understanding of Article 4(2): Whereas, for the purposes of this Directive, assessment of unfair character shall not be made of terms which describe the main subject matter of the contract nor the quality/price ratio of the goods or services supplied; whereas the main subject matter of the contract and the price/quality ratio may nevertheless be taken into account in assessing the fairness of other terms; whereas it follows, inter alia, that in insurance contracts, the terms which clearly define or circumscribe the insured risk and the insurers liability shall not be subject to such assessment since these restrictions are taken into account in calculating the premium paid by the consumer. Another element of compromise is the so called greylist set out in Schedule 2 to the 1999 Regulations, exactly reproducing the annex referred to in Article 3(3) of the Directive. This is an indicative and non exhaustive list of terms which may be regarded as unfair. Originally it was proposed as a blacklist of terms which would be conclusively presumed to be unfair. The list contains 17 items, four of which refer in one way or another to the monetary consideration paid by the consumer: (d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract; (e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation; (f) authorising the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract; . (l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded; The basic test of fairness is in Regulation 5(1) of the 1999 Regulations, transposing Article 3(1) of the Directive. Regulation 5(1) provides: A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer. The consequences of unfairness are set out in Regulation 8, transposing Article 6(1). Regulation 8 provides: (1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer. (2) The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term. The Court of Justice has not yet had occasion to rule on the scope of Article 4(2). Not all the member states have precisely transposed the Directive into their national laws, since Article 8 provides that they may adopt or retain more stringent provisions for consumer protection, so long as they are compatible with the Treaty. France and Italy, like the United Kingdom, have precisely transposed the Directive. The Netherlands and Spain have enacted more far reaching legislation affording greater protection to consumers. Germany considered it unnecessary to transpose the Directive in any form, as its national law already offered a greater degree of consumer protection. The First National Bank case The Law Lords have already considered Article 4(2) in Director General of Fair Trading v First National Bank Plc [2001] UKHL 52, [2002] 1 AC 481. They considered it in the slightly different form in which it was transposed by Regulation 3(2) of the 1994 Regulations: In so far as it is in plain, intelligible language, no assessment shall be made of the fairness of any term which (a) defines the main subject matter of the contract, or (b) concerns the adequacy of the price or remuneration, as against the goods or services sold or supplied. So in the old provision the words in exchange did not appear, and the nature of the assessment was expressed a little differently. Before your Lordships neither side attached much importance to these points of difference, since the dominant text (as Lord Steyn put it in First National Bank at para 31) is that of the Directive itself. In First National Bank the Director General of Fair Trading (the predecessor of the OFT, which was established by Part 1 of the Enterprise Act 2002) sought an injunction to restrain the bank, which was active in the consumer credit market, from using a standard term under which (on enforcement of an overdue debt) interest was to continue to accrue at the contractual rate until payment after as well as before any judgment (such obligation to be independent of and not to merge with the judgment). At first instance Evans Lombe J held ([2000] 1 WLR 98) that the term was a default term and not (as the banks counsel had submitted) a core term within Regulation 3(2) of the 1994 Regulations, but that it was not unfair in the statutory sense. The Court of Appeal ([2000] QB 672) allowed the Director Generals appeal, agreeing with the judge as to Regulation 3(2) but differing as to the fairness of the term. Peter Gibson LJ (giving the judgment of the Court) deprecated the expression core term (at p686): The test in respect of the relevant term is not whether it can be called a core term but whether it falls within one or both of paragraphs (a) and (b) of Regulation 3(2). On a further appeal by the bank the House of Lords allowed the appeal, unanimously agreeing with the Court of Appeal as to the Courts power to review the term, but unanimously reversing the Court of Appeal as to the terms fairness. The key passages on the scope of Regulation 3(2) of the 1994 Regulations (now Regulation 6(2) of the 1999 Regulations) are para 12 of the opinion of Lord Bingham of Cornhill and para 34 of the opinion of Lord Steyn. Lord Bingham observed in para 12, after references to the then current editions of two leading textbooks (Treitel, The Law of Contract, 10th ed. (1999) p248 and Chitty on Contracts, 28th ed. (1999) para 15 025), The object of the Regulations and the Directive is to protect consumers against the inclusion of unfair and prejudicial terms in standard form contracts into which they enter, and that object would plainly be frustrated if Regulation 3(2)(b) were so broadly interpreted as to cover any terms other than those falling squarely within it. In my opinion the term, as part of a provision prescribing the consequences of default, plainly does not fall within it. Later in that paragraph Lord Bingham referred to the term as an ancillary provision. Lord Steyn observed in para 34: Clause 8 of the contract, the only provision in dispute, is a default provision. It prescribes remedies which only become available to the lender upon the default of the consumer. For this reason the escape route of Regulation 3(2) is not available to the bank. So far as the description of terms covered by Regulation 3(2) as core terms is helpful at all, I would say that clause 8 of the contract is a subsidiary term. In any event, Regulation 3(2) must be given a restrictive interpretation. Unless that is done Regulation 3(2)(a) will enable the main purpose of the scheme to be frustrated by endless formalistic arguments as to whether a provision is a definitional or an exclusionary provision. Similarly, Regulation 3(2)(b) dealing with the adequacy of the price or remuneration must be given a restrictive interpretation. After all, in a broad sense all terms of the contract are in some way related to the price or remuneration. That is not what is intended. The background and course of this litigation A complaint of infringement of the 1999 Regulations may be pursued in proceedings in the county court commenced by an individual consumer by reference to the terms of a particular contract that he or she has entered into. It may also be pursued by the OFT which was established, as already mentioned, by Part 1 of the Enterprise Act 2002 and is a general enforcer of Community infringements under section 213(1)(a) of that Act (read with section 212 and Schedule 13, para 5). This dual system (of what Lord Steyn, in para 33 of his opinion in First National Bank, referred to as ex casu challenges and pre emptive or collective challenges) is provided for by Article 7 of the Directive. Both types of challenge form part of the background to this appeal. As Andrew Smith J put it at first instance (para 2): The Relevant Terms and Relevant Charges are being challenged on two fronts: the [OFT] is investigating under the [1999 Regulations] the fairness of the terms under which banks make such charges, and cases have been brought by individual customers in county courts disputing charges levied by banks, many of them relying not only on the 1999 Regulations but also on common law rules about the unenforceability of penalties. There have, we were told, been many thousands of individual claims in the county courts, many brought by litigants in person with the assistance of on line forms and advice. All or virtually all of these proceedings have been stayed to await the outcome of these proceedings. The volume of litigation speaks for itself as to the dissatisfaction (to use no stronger an expression) felt by many thousands of customers affected by the challenged charges. In March 2007, following complaints made to it, the OFT started a formal investigation of the fairness of terms relating to overdraft charges (these were referred to in the pleadings and in the lower courts as the Relevant Terms and the Relevant Charges and it is convenient to adopt the same terminology). At the same time the OFT began a market study in order to consider (in the words of the first witness statement of Mr Cavendish Elithorn, a senior director of the OFT) wider questions about competition and value for money in the provision of personal current accounts in the UK, such as: (a) the low levels of cost transparency and; (b) the ease with which consumers can switch accounts. At an early stage of the investigation the banks raised a preliminary objection based on Regulation 6(2) of the 1999 Regulations. The same issue had been raised in many individual claims in the county courts. In order to resolve the issue, and in accordance with written agreements reached between the OFT and the banks, the OFT on 27 July 2007 issued proceedings in the Commercial Court seeking a declaration that Regulation 6(2) did not apply to the banks Relevant Terms then current. The banks, in order to obtain a more comprehensive answer covering related issues raised in individual claims, counterclaimed not only for declarations to the opposite effect to those sought by the OFT (including an express declaration as to plain and intelligible language) but also for further declarations that their Relevant Terms were not capable of amounting to a penalty at common law, and declarations relating to good faith under regulation 5(1). These issues were raised both in relation to the banks then current sets of terms and in relation to terms which were no longer current. The judge heard argument only on the then current terms, for case management reasons. But our decision is likely to cover almost all the historic terms as well. We were told that the OFT and the banks have so far been able to agree that the lower courts decisions on the current terms should be treated as applicable to the historic terms as well. In these circumstances Andrew Smith J had three groups of issues to decide: issues as to Regulation 6(2) (including particular issues as to plain intelligible language); issues as to Regulation 5(1); and issues as to common law penalties. He gave judgment on 24 April 2008 after 14 days of hearings during January and February 2008. His judgment ([2008] EWHC 875 (Comm), [2008] 2 All ER (Comm) 625) runs to 450 paragraphs and the Court of Appeal rightly paid tribute to its quality and clarity. In brief, the judge decided the issues as follows (the paragraph numbers specified below being the conclusions at the end of the relevant discussion): (1) on the first group of issues, that the Relevant Terms were in plain intelligible language except (in the case of four banks) in certain specific and relatively minor respects (para 293); that they were not exempt under Regulation 6(2) from assessment in point of fairness (para 421); and that the excluded assessment construction was correct (para 436); that none of the terms amounted to the imposition of a common law (2) penalty (para 323); and (3) that it was inappropriate to give any declaratory relief as regards Regulation 5(1) (para 447). The banks appealed, with the permission of the judge, against the decision that Regulation 6(2) did not apply to the Relevant Charges. The judge refused permission to the four relevant banks on the plain intelligible language issue. The OFT did not seek to appeal but put in a respondents notice with further grounds for supporting the judges decision on Regulation 6(2). The argument in the Court of Appeal was therefore mainly focused on the scope of Regulation 6(2). The Court of Appeal (Sir Anthony Clarke MR, Lord Justice Waller V P and Lloyd LJ), in a judgment of the Court delivered on 26 February 2009 by the Master of the Rolls ([2009] EWCA Civ 116), dismissed the banks appeal for reasons which the Court described (para 112) as somewhat broader than those of the judge. The Court refused to extend the permission to appeal to the plain intelligible language issue. The banks further appeal to the House of Lords (with leave granted on 31 March 2009) was heard in June 2009 but our judgment is (under transitional provisions in the Constitutional Reform Act 2005 and the Supreme Court Rules) a judgment of the Supreme Court of the United Kingdom. The Relevant Terms and Charges It will be necessary to come back to a detailed consideration of the Court of Appeals reasoning, which Mr Sumption has subjected to robust criticism. But I must first say more about the Relevant Terms and the Relevant Charges of the banks. They are the material to which Regulation 6(2), properly construed, has to be applied. The Relevant Terms and the Relevant Charges were covered in detail in the pleadings, and annexes to the pleadings. There is a clear summary in annexes B E to the OFTs joint reply and defence to the counterclaims. The judge gave a general description of the operation of current accounts and authorised and unauthorised overdrafts (paras 42 82). He then (in order to deal with a range of questions as to plain intelligible language) covered a mass of detail in a masterly fashion. His summaries of the eight banks terms and charges starts with Abbey National (paras 130 154) and ends with Royal Bank of Scotland (paras 274 292). This part of his judgment has not been challenged in any way, and the Court of Appeal adopted it. For present purposes it is sufficient to set out the summary in paras 7 and 8 of the Statement of Facts and Issue agreed by the parties: There are four basic categories of Relevant Charges, as defined in the Judgments below, not all of which are charged by all Banks: Unpaid Item Charges; Paid Item Charges; Overdraft Excess Charges; and Guaranteed Paid Item Charges. a. An Unpaid Item Charge is levied when the customer gives an instruction for payment or, in some cases at least withdrawal, that the bank declines to honour because the customer does not have sufficient funds in his account or an arranged facility which covers it. b. A Paid Item Charge is levied when the customer gives an instruction for payment or, in some cases at least withdrawal, for which he does not have sufficient funds in his account, or an arranged facility which covers it, and which the bank honours. c. A Guaranteed Paid Item Charge refers to a charge distinct from a Paid Item Charge which some of the banks levy when they honour, in accordance with the guarantee, a cheque issued in conjunction with a cheque guarantee card (or, in the case of some banks, a debit card payment made under a guaranteed debit payment system) for which the customer does not have sufficient funds or a sufficient arranged facility. d. An Overdraft Excess Charge is levied if, during a specified period (typically a day or a month) an account is and/or goes overdrawn (and there is no overdraft facility), or the debit balance is and/or goes above the limit on an existing overdraft facility. Annexed hereto are summaries (one for each bank) that identify the relevant contractual documents, the Relevant Terms and the Relevant Charges. In all cases, there is a terms and conditions document, and an accompanying leaflet or tariff, which it is the Banks practice to make available to the customer as part of the process of opening the account. This litigation assumes the incorporation of the Relevant Terms into the contract between the Banks and their respective customers. The Banks standard rates of interest and charges are usually set out in the tariff/leaflet. Prior notice of any material changes in the tariff (or terms generally) has to be given to the customer under the terms of the Banking Code to which the Banks voluntarily subscribe. The opposing arguments in summary The appeal has been argued with conspicuous clarity and skill by Mr Sumption and Mr Vos QC (the latter instructed on behalf of Nationwide) for the banks and Mr Crow for the OFT. This brief summary is no more than a sketch drawing attention to some salient points. The general thrust of Mr Sumptions submissions for the banks was that both the judge and the Court of Appeal had adopted an over complicated approach to an issue which, however important both for the consumers and for the banks, is ultimately quite a short point of construction. Article 4(2) of the Directive, now transposed by Regulation 6(2) of the 1999 Regulations, is expressed in fairly simple and non technical language, as is appropriate for a Community measure which has to be applied across a variety of national systems of contract law. It represents a compromise between consumer protection and freedom of contract. The courts below, in seeking to identify and give effect to the underlying purpose of the Directive, misread Regulation 6(2) as concerned (in paragraph (b) as well as in paragraph (a)) only with what was a core or essential part of the bargain, to which the consumer may be supposed to have consented in a meaningful sense. The courts below had overlooked that core term, if that expression is to be used at all, must be understood as no more than shorthand for the contents of paragraphs (a) and (b). Mr Vos supplemented Mr Sumptions submissions by what he referred to as the debit/credit argument, which focuses on the fact that customers who incur Relevant Charges will view the essence of their contract with the bank differently from those customers who never (or rarely) incur those charges. Against that Mr Crows primary submission was that the Court of Appeal had reached the right conclusion for the right reasons. The fairness of payment obligations falling within Regulation 6(2)(b) is exempt from assessment in point of adequacy (appropriateness) only if they form part of the essential bargain between the parties. The essential bargain constitutes only so much of the contract as the consumer can be said to have consented to freely. The banks had misunderstood the travaux prparatoires and drawn the wrong conclusion from them. The Court of Appeals decision was supported by the decision of the House of Lords in First National Bank. The Relevant Charges were ancillary payment obligations and were not incurred in the normal performance of the contract. The typical consumer would not clearly recognise them as the price of services supplied by the banks in exchange. The Court of Appeal's reasoning It is therefore necessary for the Court to look closely at the Court of Appeals reasoning. The general structure of the reasoning on the construction issue is a summary, with some discussion, of the judges main conclusions (paras 12 to 22); discussion of First National Bank (paras 40 to 58), the travaux prparatoires (paras 59 to 69), academic writings (paras 70 to 80) and the relevant principles and the Courts conclusions on the issue of construction (paras 81 to 92). This is followed by a relatively short section (paras 93 to 112) applying the Courts conclusions to the facts. The first point to note (in order to get it out of the way) is the Courts treatment of the excluded terms/excluded assessment controversy which the judge had dealt with at some length. This point arose on the wording of Regulation 3(2) of the 1994 Regulations (and may have been one of the reasons for their replacement). It may appear an abstract point but it is potentially of great practical importance, as Lord Phillips explains in his judgment (paras 60 and 61). The judge put the issue in these terms (para 422): If Regulation 6(2)(b) applies to a term, is any assessment of its fairness excluded (the excluded term construction), or does the Regulation exclude only an assessment relating to the adequacy of the price (the excluded assessment construction)? He decided in favour of the excluded assessment construction and that was not challenged in the Court of Appeal or before this Court. Mr Sumption described it as a distraction. For present purposes, I am inclined to agree. The precise nature of the exercise in assessing the fairness of a reviewable term is no more than marginally relevant to deciding whether or not a term is reviewable in the first place. But in the long run it may become an issue of great practical importance. The Court of Appeal then addressed the issue whether paras (a) and (b) of Regulation 6(2) should be construed conjunctively (as the OFT had argued before the judge) or disjunctively (as the banks had argued). The judge decided that they should be construed disjunctively. The Court of Appeal commented (para 15): The OFT does not challenge his decision. We do not therefore express a different view, although in our opinion it is important to construe paragraph (b) of Regulation 6(2)(b) in the context of the whole of the Regulation including paragraph (a). Here the Court of Appeal was, I think, putting down a marker for what was to become one of the most important themes in its decision. I have to say that I do not find it particularly helpful to consider whether paragraphs (a) and (b) should be read conjunctively or disjunctively. The Court is not faced with a text (such as charitable or benevolent in the will of Caleb Diplock: Chichester Diocesan Fund & Board of Finance v Simpson [1944] AC 341, 349, 369) where the two approaches are stark alternatives. In my view the two paragraphs must be given their natural meaning, and read in that way they set out tests which are separate but not unconnected. They reflect (but in slightly different ways) the two sides (or quid pro quo) of any consumer contract, that is (a) what it is that the trader is to sell or supply and (b) what it is that the consumer is to pay for what he gets. The definition of the former is not to be reviewed in point of fairness, nor is the adequacy (appropriateness) of the latter. The Court of Appeal then discussed First National Bank at some length, focusing (entirely correctly, in my opinion) on Lord Binghams and Lord Steyns description of the relevant clause as a default provision. The Court also focused on Lord Binghams description of it as ancillary and Lord Steyns description of it as subsidiary. That led to what I regard as a more questionable conclusion (para 49): As we see it, it follows from the reasoning of the House of Lords that what article 4(2) of the Directive was seeking to exclude from the assessment required by the national authorities (here the OFT) was the core bargain or the core price but not ancillary or incidental provisions. In our judgment, Regulation 6(2) of the 1999 Regulations should be construed with that underlying purpose in mind. The Court went on similarly (para 52): In our view these considerations support the conclusion that the purpose of Regulation 6(2)(b) was to limit the exclusion to the essence of the price, just as the purpose of Regulation 6(2)(a) was to limit it to the main subject matter of the contract. As appears below, the reason for the limitation was to reflect the fact that the parties would be likely to (or might well) negotiate the main subject matter of the contract and the essential price but not the detail. The considerations referred to were that Regulation 6(2)(b) referred to the price or remuneration and not to part of the price or remuneration. This impressed both the judge and the Court of Appeal. I do not see much force in it, as the Directive is expressed in terse, simple language, and the 1999 Regulations follow the same style. This part of the Court of Appeals reasoning ends with a firm conclusion. After approving the judges reliance on passages in successive editions of Treitel (11th ed. (2003) p273 and 12th ed. (2007) para 7 101) the Court went on (para 55): This last point is of some importance because the Banks submit that, once the conjunctive construction has been rejected, there is no room to apply the principle of essential bargain to price clauses, if only because of the difficulty in deciding to which it applies and to which it does not. We are not able to accept that submission. We accept the OFTs submission that it all depends upon the circumstances of the particular case and that it is a question of fact whether a clause which might otherwise fall to be assessed is outside the essential bargain between the parties. The Court found support for this not only in First National Bank but also in the travaux and in some academic writings. It identified the purpose of the Article 4(2) exception as being (para 69) that standard form contracts should be subjected to a test of fairness except so far as their terms have been negotiated (the implication being that it was essential terms, both as to specification and as to price, that a consumer would actually negotiate). Therefore (para 69 (iii)): Ancillary or incidental price, remuneration or payment terms will not fall within the exception in article 4(2) because they do not fulfil the purpose or essential rationale of the exception. The Court noted that a similar view had been taken in a Joint Consultation Paper issued in 2001 by the Law Commission and the Scottish Law Commission (though paragraph 3.32 of the Paper, set out in para 79 of the judgment, is expressed in terms of understanding rather than consent). The next section of the judgment contains a discussion of the relevant principles of construction followed by a restatement of the conclusion that the Court had already reached (para 86): The question is whether to import the notion of essential bargain into the construction of article 4(2) and into both paragraphs (a) and (b) of Regulation 6(2). Our answer to that question is yes, essentially for the reasons we have already given when discussing the First National Bank case and the travaux prparatoires. We would summarise them in much the same way as Mr Crow did in the course of the oral argument: (i) The concept of the essential bargain flows naturally from the structure of the Directive, from the purpose of the Directive, from the purpose of the exemption and from the decision in the First National Bank case. These points are then elaborated in (ii), (iii) and (iv). The Court of Appeal then went on to consider whether the Relevant Terms and the Relevant Charges were or formed part of the essential or core bargain between the parties. The Court recorded (para 99) fifteen points made by Mr Crow, the general thrust of which was that an unauthorised overdraft was something to which a customer was not entitled; it was exceptional and unnecessary; in consequence Relevant Charges were contingent, uneconomic, unadvertised and imperfectly understood. Against this Mr Vos (leading the banks submissions in response to the fifteen points made by Mr Crow) pointed (para 101) to the banks having earned 2.56bn from Relevant Charges in 2006 (against 4.1bn in net interest earned on accounts in credit) and to over 12 million customers who had incurred Relevant Charges in that year. The majority of these incurred more than one Relevant Charge. In the circumstances it was wrong, Mr Vos submitted, to say that they were isolated incidents. It was a misuse of language to describe unarranged borrowing as an exception to an exception. The Court concluded (para 104): We say at once that there is undoubted force in these submissions but we have nevertheless reached the conclusion that, when all the circumstances are taken into account, the Relevant Charges are not part of the core or essential bargain in the sense that that concept has been used in the sources to which we have referred. The appeal was therefore dismissed. The decision of the Court of Appeal was followed by Mann J. in Office of Fair Trading v Foxtons Ltd [2009] EWHC 1681 (Ch), 10 July 2009. We received written submissions on this decision. The submissions vary markedly in their perceptions of how easily and satisfactorily the judge applied the Court of Appeals test (which was of course binding on him). I do not think it necessary to go further into the decision, especially as the relevant term was in any event not in plain intelligible language. The meaning of Regulation 6(2) After considering the judgments of Andrew Smith J and the Court of Appeal at length I am impressed, as no doubt all of us are, by the great care with which both courts have considered all the arguments and materials put before them. But I must respectfully say that I see force in Mr Sumptions criticisms of their approach as over elaborate. The issue is a very important one, but it is essentially quite a short point, even when all the elements relevant to a purposive approach to construction are taken into account. I also respectfully think that the courts below, although cautioning themselves that core terms is a shorthand expression for the contents of paragraphs (a) and (b) of regulation 6(2), tended to slip into treating it as an autonomous expression which itself expressed the contents of both those paragraphs. I start with the language of Article 4(2) and Regulation 6(2) (I can see no significant difference between them, although for no obvious reason Article 4(2) refers to assessing the unfair nature of a term whereas Regulation 6(2) refers to assessment of fairness of a term). Paragraphs (a) and (b) are, as I have said, concerned with the two sides of the quid pro quo inherent in any consumer contract. The main subject matter may be goods or services. If it is goods, it may be a single item (a car or a dishwasher) or a multiplicity of items. If for instance a consumer orders a variety of goods from a mail order catalogue say clothing, blinds, kitchen utensils and toys there is no possible basis on which the court can decide that some items are more essential to the contract than others. The main subject matter is simply consumer goods ordered from a catalogue. I think that the Court of Appeal was wrong (para 55) to dismiss the difficulties raised by the banks on this point as something that the court could decide as a question of fact in the circumstances of the particular case. Similarly, a supply of services may be simple (an entertainer booked to perform for an hour at a childrens party) or composite (a weeks stay at a five star hotel offering a wide variety of services). Again, there is no principled basis on which the court could decide that some services are more essential to the contract than others and again the main subject matter must be described in general termshotel services. The services that banks offer to their current account customers are a comparable package of services. These include the collection and payment of cheques, other money transmission services, facilities for cash distribution (mainly by ATM machines either at manned branches or elsewhere) and the provision of statements in printed or electronic form. When one turns to the other part of the quid pro quo of a consumer contract, the price or remuneration, the difficulty of deciding which prices are essential is just the same, and Regulation 6(2)(b) contains no indication that only an essential price or remuneration is relevant. Any monetary price or remuneration payable under the contract would naturally fall within the language of paragraph (b) (I discount the absence of a reference to part of the price or remuneration for reasons already mentioned). In the case of banking services supplied to a current account customer under the free if in credit regime, the principal monetary consideration received by the bank consists of interest and charges on authorised and unauthorised overdrafts, and specific charges for particular non routine services (such as expedited or foreign money transmission services). The most important element of the consideration, however, consists of the interest forgone by customers whose current accounts are in credit, since whether their credit balance is large or small, they will be receiving a relatively low rate of interest on it (sometimes a very low rate or no interest at all). The scale of this benefit is indicated by the figure for 2006 already mentioned. Mr Sumption was wary about committing himself as to whether interest foregone constituted part of the banks price or remuneration for the purposes of Regulation 6(2)(b). Whatever view is taken as to that, it is clear that just as banking services to current account customers can aptly be described as a package, so can the consideration that moves from the customer to the bank. Interest forgone is an important part of that package for customers whose accounts are in credit, and overdraft interest and charges are the most important element for those customers who are not in credit. Lawyers are very used to speaking of a package (or bundle) of rights and obligations, and in that sense every obligation which a consumer undertakes by a consumer contract could be seen as part of the price or remuneration received by the supplier. But non monetary obligations undertaken by a consumer contract (for instance, to take proper care of goods on hire purchase, or to treat material supplied for a distance learning course as available only to the customer personally) are not part of the price or remuneration within the Regulation. That is the point of Lord Steyns observation in First National Bank, in para 34, that in a broad sense all terms of the contract are in some way related to the price or remuneration. This Houses decision in First National Bank shows that not every term that is in some way linked to monetary consideration falls within Regulation 6(2)(b). Paras (d), (e), (f) and (l) of the greylist in Schedule 2 to the 1999 Regulations are an illustration of that. But the relevant term in First National Bank was a default provision. Traders ought not to be able to outflank consumers by drafting themselves into a position where they can take advantage of a default provision. But Bairstow Eves London Central Ltd v Smith [2004] 2 EGLR 25 shows that the Court can and will be astute to prevent that. In First National Bank Lord Steyn indicated that what is now Regulation 6(2) should be construed restrictively, and Lord Bingham said that it should be limited to terms falling squarely within it. I respectfully agree. But in my opinion the Relevant Terms and the Relevant Charges do fall squarely within Regulation 6(2)(b). That conclusion is not to my mind at variance with the message to be derived from the travaux. It is a fairly complex message, reflecting not only a compromise between the opposing aims of consumer protection and freedom of contract, but also the contrast between consumer protection and consumer choice (the latter being more central, perhaps, to basic Community principles). This point was explored and explained in an article (not mentioned by the Court of Appeal) to which Mr Sumption referred, that is Good Faith in European Contract Law by Professor Hugh Collins, (1994) 14 OJLS 229. Mr Sumption placed particular emphasis on the following passage: The history of the EC Directive on Unfair Terms in Consumer Contracts reveals the struggle between these two interpretations of the economic interests of consumers. Even at a late stage in the negotiations, the draft Directive proposed by the Commission envisaged the introduction of a general principle against substantive unfairness in consumer contracts. It invalidated terms in standard form consumer contracts which caused the performance of the contract to be significantly different from what the consumer could legitimately expect, or which caused the performance of the contract to be unduly detrimental to the consumer. But in the battle between the advocates of consumer rights and the supporters of free competition, eventually the latter emerged victorious in the Council of Ministers. The fairness of the transaction in the sense of the price paid for the goods or services should not be subjected to review or control. This is the meaning of the obscure Article 4(2) [which is then set out]. The final reservation in this provision [plain intelligible language] is significant. The Directive does not require consumer contracts to be substantively fair, but it does require them to be clear. Clarity is essential for effective market competition between terms. What matters primarily for EC contract law is consumer choice, not consumer rights. The Court of Appeal took account of the travaux and of some academic writing. It recognised as an underlying value the notion that freedom of contract should prevail where there has been meaningful negotiation between supplier and consumer, so that the latter does consent to the terms of the contract. But I respectfully think the Court went too far in interpreting the language of the Directive and the 1999 Regulations in order to meet that perceived aim. The Directive and the 1999 Regulations apply only to terms which have not been individually negotiated, and the Court departed from the natural meaning of the text in order to achieve an unnecessary duplication of the exception for individually negotiated terms. I would add a postscript to this part of the discussion. A variety of expressions has been used, in the courts below and in argument (and to some extent by this House in First National Bank), to describe those contractual terms which are subject to review in point of fairness: ancillary, subordinate, incidental, non core, collateral. These may all be of some assistance but it is important, in considering provisions which apply across an extraordinarily wide range of consumer contracts, to treat them with caution. I venture to repeat a paragraph from an opinion of mine (in which the other members of the Appellate Committee concurred) in College of Estate Management v Customs & Excise Commissioners [2005] STC 1957, para 30, an appeal raising questions of Community law about whether there is a single or multiple supply, and whether it is of goods or services, for the purposes of value added tax: Ancillary means (as Ward LJ rightly observed ([2004] STC 1471 at [39]) subservient, subordinate and ministering to something else. It was an entirely apposite term in the discussion in British Telecommunications (where the delivery of the car was subordinate to its sale) and in Card Protection Plan itself (where some peripheral parts of a package of services, and some goods of trivial value such as labels, key tabs and a medical card, were subordinate to the main package of insurance services). But there are other cases (including Faaborg, Beynon and the present case) in which it is inappropriate to analyse the transaction in terms of what is principal and ancillary, and it is unhelpful to strain the natural meaning of ancillary in an attempt to do so. Food is not ancillary to restaurant services; it is of central and indispensable importance to them; nevertheless there is a single supply of services (Faaborg). Pharmaceuticals are not ancillary to medical care which requires the use of medication; again, they are of central and indispensable importance; nevertheless there is a single supply of services (Beynon). Conversely, delivery of goods or peripheral extras may be disregarded as ancillary for the purposes of para (a) of Regulation 6(2), but the charges for them, if payable under the same contract, are part of the price for the purposes of para (b). The application of Regulation 6(2) I can state my opinion much more briefly on the second main issue in the appeal, that is the application of Regulation 6(2), properly construed, to the facts. Charges for unauthorised overdrafts are monetary consideration for the package of banking services supplied to personal current account customers. They are an important part of the banks charging structure, amounting to over 30 per cent of their revenue stream from all personal current account customers. The facts that the charges are contingent, and that the majority of customers do not incur them, are irrelevant. On the view that I take of the construction of Regulation 6(2), the fairness of the charges would be exempt from review in point of appropriateness under Regulation 6(2)(b) even if fewer customers paid them, and they formed a smaller part of the banks revenue stream. Even if the Court of Appeals interpretation had been correct, I do not see how it could have come to the conclusion that charges amounting to over 30 per cent of the revenue stream were (para 111) not part of the core or essential bargain. Should there be a reference under Article 234? This Court, as the national court of last resort, is under an obligation to make a reference to the Court of Justice under Article 234 of the Treaty if a decision on the correct interpretation of the Directive is necessary to enable the Court to give judgment, and the point is not acte clair. Neither side showed any enthusiasm for a reference, because of the further delay that would be occasioned in a very large number of claims at present stayed. The Court is entitled to take the likely delay into account, although not as an overriding consideration, in deciding whether to make a reference. If (as I understand to be the case) the Court is unanimous that the appeal should be allowed, then in my opinion we should treat the point as acte clair, and decide against making a reference. It may seem paradoxical for a court of last resort to conclude that a point is clear when it is differing from the carefully considered judgments of the very experienced judges who have ruled on it in lower courts. But sometimes a court of last resort does conclude, without any disrespect, that the lower courts were clearly wrong, and in my respectful opinion this is such a case. Even if some or all of the Court feel that the point is not acte clair, I would still propose that we ought not to incur the delay involved in a reference under Article 234, since a decision on the correct construction of Article 4(2) of the Directive is not essential for the determination of this appeal. The correct construction of Article 4(2) is a question of Community law, but the application of the Article, properly construed, to the facts is a question for national law. Even if the Court of Appeal was not clearly wrong on the issue of construction, it was in my respectful opinion clearly wrong in applying its construction to the facts. In other circumstances it might be regarded as rather unprincipled to take that means of avoiding an important issue of Community law, but in the special circumstances of this case I would regard it as the lesser of two evils. There is a strong public interest in resolving the matter without further delay. Conclusion For these reasons I would allow the appeal. The declaration sought by the banks in their counterclaims is inappropriate for the reasons explained by Lord Phillips at the beginning of his judgment. I would declare that the bank charges levied on personal current account customers in respect of unauthorised overdrafts (including unpaid item charges and other related charges) constitute part of the price or remuneration for the banking services provided and, in so far as the terms giving rise to the charges are in plain intelligible language, no assessment under the Unfair Terms in Consumer Contracts Regulations 1999 of the fairness of those terms may relate to their adequacy as against the services supplied. If the Court allows this appeal the outcome may cause great disappointment and indeed dismay to a very large number of bank customers who feel that they have been subjected to unfairly high charges in respect of unauthorised overdrafts. But this decision is not the end of the matter, as Lord Phillips explains in his judgment. Moreover Ministers and Parliament may wish to consider the matter further. They decided, in an era of so called light touch regulation, to transpose the Directive as it stood rather than to confer the higher degree of consumer protection afforded by the national laws of some other member states. Parliament may wish to consider whether to revisit that decision. LORD PHILLIPS Introduction In common with most members of the public all members of the Court have a current account with one or other of the appellants (the Banks). The Banks and the Respondent (the OFT) have agreed that we should none the less hear this appeal. The operation of a current account by a Bank for its customer involves the provision of a number of different services. These include the collection of cheques drawn in favour of the customer, the honouring of cheques drawn by the customer, payments on behalf of the customer pursuant to the use by the customer of credit or debit cards and cash distribution facilities. The customer rewards his Bank for the provision of these services in different ways, in accordance with standard terms agreed between the customer and the Bank. The majority of customers, who always keep their accounts in credit, reward the Bank by allowing it to use the funds standing to their credit without paying interest at the market rate. Somewhat misleadingly, the services provided by Banks to such customers are said to be free of charge. The position is very different in the case of a customer who permits his current account to go into debit without having obtained, in advance, authority from his Bank to overdraw. When this occurs, the customer becomes liable to pay charges. In some instances the charge will be triggered by the performance of an individual identifiable service, such as honouring a cheque. In other instances a sum becomes payable if, during a specified period, an account is overdrawn. These charges have collectively been described in this litigation as the Relevant Charges and the terms under which they are imposed as the Relevant Terms. I shall adopt that terminology. Mr Sumption QC, who appeared for the Banks, preferred to call the charges Insufficient Fund Charges. Lord Walker has, in his judgment, explained the background to this litigation and set out the relevant provisions of the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083 (the 1999 Regulations) and Council Directive 93/13/EEC (the Directive), which the 1999 Regulations implemented. Subject to one exception I shall not repeat that exercise. The OFT is minded to attack the Relevant Terms under the 1999 Regulations on the ground that they are unfair. The Banks contend that any such attack will be circumscribed by the provisions of Regulation 6(2) of the 1999 Regulations, which provides: In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate to the definition of the main subject matter of the (a) contract, or (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange. It is common ground that the Relevant Terms that are the subject of this appeal are largely in plain intelligible language except (in the case of four banks) in certain specific and relatively minor respects. The issue The agreed Statement of Facts and Issue describes the issue raised by this appeal as follows: Whether an assessment of the fairness of the Relevant Terms (pursuant to which the Relevant Charges are levied) would relate to the adequacy of the price and remuneration, as against the services supplied in exchange, within the meaning of regulation 6(2)(b) of the Unfair Terms in Consumer Contracts Regulations 1999. This does not accurately describe the issue raised by this appeal, which is very much more narrow. That issue is whether the Relevant Charges constitute the price or remuneration, as against the services supplied in exchange within the meaning of the Regulation. If they do not, the attack on the fairness of the terms that is open to the OFT will not be circumscribed by Regulation 6(2)(b). If they do, they will still be open to attack by the OFT on the ground that they are unfair as defined by Regulation 5(1), but that attack cannot be founded on an allegation that the Relevant Charges are excessive by comparison with the services which they purchase, for that is forbidden by Regulation 6(2)(b). That this was indeed the issue was made clear by counsel on either side in their oral submissions. Towards the close of his reply, Mr Sumption QC said this: All that I can ask the courts to declare, and all that my clients have ever asked the courts to declare, is that the insufficient fund charges are included in the price within the meaning of the word price in [Regulation] 6 and that no assessment of the fairness of the terms imposing the IFCs may relate to their adequacy as against the service supplied. Mr Crow QC for his part submitted on behalf of the OFT that even if Article 4(2) of the Directive did apply, the Relevant Terms were still subject to assessment for fairness. In that event, while it would not be open to the OFT to assess the fairness of the price by reference to the adequacy of the goods or services supplied in exchange, it would be open to the OFT to assess the fairness of the price according to other criteria. This agreement between the parties reflects acceptance by the Banks in the Court of Appeal of a finding by Andrew Smith J that was contrary to one of their submissions. The Banks had submitted that a term of a contract that provided the price or remuneration for goods or services supplied was absolutely exempt from assessment for fairness by reason of Regulation 6(2). This was described as the excluded term construction of the Regulation. Andrew Smith J held that this was not correct. Regulation 6(2) precluded assessing a price term for fairness by reference to its adequacy as payment for the goods or services provided in exchange. It did not, however, preclude assessing a price term for fairness according to other criteria. This has been described as the excluded assessment construction of the Regulation. Mr Sumption submitted that the difference between the excluded term and the excluded assessment constructions was a distraction from the real issues. It is certainly a distraction from the narrow issue that the parties are now agreed is before the court. But it is only because the excluded assessment construction has prevailed that the issue has been narrowed from that in the Agreed Statement of Facts and Issue. Had the excluded term construction prevailed, a finding in favour of the Banks that the Relevant Terms were included within the meaning of the word price in Regulation 6(2) would have precluded any challenge to those terms on the ground of fairness. As it is, if the Banks succeed on the narrow issue, this will not close the door on the OFTs investigations and may well not resolve the myriad cases that are currently stayed in which customers have challenged Relevant Charges. There is a further general point to be made. It seems likely that many of the customers who have challenged Relevant Charges have done so on the basis that they are excessive for the individual services to which they relate. They have treated the Relevant Charges as being levied in exchange for those services. Equally, one of the provisional grounds of attack advanced by the OFT has been that the Relevant Charges are out of all proportion to the cost of providing the services to which they relate. The Banks primary case is that these attacks are founded on a misconception that the Relevant Charges are payment for the services that trigger them. According to the Banks the reality is that the Relevant Charges are simply part of the payment in exchange for a global package of services. If that is correct, it would seem to follow that the attack based on the disparity between the cost of providing the services that trigger the Relevant Charges and the amount of the Relevant Charges is based on a false premise and does not in fact involve an assessment of fairness that relates to the adequacy of the price or remuneration, as against the goods or services supplied in exchange. This was a point that was appreciated by Andrew Smith J. At paragraph 400 of his judgment he says: Moreover, the basis of the whole package argument is that the Relevant Charges are not the price or remuneration for services but part of the price or remuneration for services. An assessment of the fairness of the Relevant Charges does not involve an assessment of the level or adequacy or appropriateness of the overall price or remuneration for the package of services supplied by the Bank, and an assessment of the fairness of the Relevant Charges as against those services, apart from being entirely beside the point, would not intrude upon the essential bargain between the parties that the Directive and the 1999 Regulations intend should be protected from assessment. The whole package argument does not engage the policy of the Directive and the 1999 Regulations for exempting the fairness of the Relevant Terms from assessment. Indeed, I am far from convinced that an assessment of part of the price or remuneration (or at least for less than what is manifestly the predominant part of the price or remuneration) for goods or services would ever be covered by Regulation 6(2)(b), but since this is not an argument advanced by the OFT, I say no more about that. Mr Crow did not submit before us that if the Relevant Charges formed part of the price paid in exchange for the package of services, they could not be included within the meaning of the word price in Regulation 6(2). I consider that Regulation 6(2) could apply to a complaint that the Banks charges overall, of which the Relevant Charges are an important element, are unfair because those who pay them pay an excessive amount in exchange for the package of services in respect of which they constitute part of the payment. Thus the issue of whether or not the Relevant Charges form part of the price or remuneration, as against the goods or services supplied in exchange within Regulation 6(2) is not necessarily academic. No attack has yet been made, however, on the level of the Banks charges overall. The reasoning of the Courts below Both Andrew Smith J and the Court of Appeal concluded that the Relevant Terms did not qualify as price or remuneration within the meaning of those words in Regulation 6(2). At the heart of the reasoning of Andrew Smith J was the conclusion that the Relevant Charges were not covered by Regulation 6(2) because they were not the price or remuneration for services supplied in exchange. They were not charged in exchange for anything. While most of the charges were triggered by the provision of an individual service they were not imposed by way of payment for those services. They were charges levied because the services in question were supplied by the Banks in particular circumstances. One of the four types of Relevant Charges was not triggered by the provision of a service. Unpaid Item Charges were levied when a request to honour a cheque on an overdrawn account was refused. Refusing a request could not properly be described as a service at all. Andrew Smith J rejected the Banks case that the Relevant Charges were part payment for the entire package of services provided by the Banks to current account customers for the following reasons: I am unable to accept this argument, for two (linked) reasons. First, I do not consider that the payments are made in exchange for the whole package of services supplied by the Bank when it is operating a current account. It is not a natural use of language to say that the Relevant Charges are levied or paid in exchange for those services supplied when an account is in credit. Secondly, I do not consider that the payments are the price or remuneration for those services in any natural meaning of the phrase or within the meaning of Regulation 6(2). The payments would not be so recognised by the typical customer when he opens a current account with a Bank, and they are not generally so presented by the Banks in their terms or other documentation. The Court of Appeal reached the same conclusion as Andrew Smith J, but by a different process of reasoning. Lord Walker has set out that reasoning at length. Once again I shall restrict myself to the essence of the Courts conclusion. In relation to Unpaid Item Charges the Court held that giving consideration to a request to honour a cheque on an overdrawn account was a service, even if the request was turned down. Thus each of the events that triggered a liability to pay Relevant Charges involved the provision of a service. It was not, however, realistic to consider that each Relevant Charge was payment for the individual service that occasioned its imposition. Rather, the substance of the contract had to be analysed as a package. The Court then went on to divide the package into the core or essential bargain and provisions that were incidental or ancillary, holding that Regulation 6(2) only applied to the former. The core or essential bargain was comprised of those matters to which the typical consumer would have regard when deciding whether to enter into the agreement with the Bank. The latter would be those to which he would not attach importance when concluding the contract. The Court decided that charges which were contingent upon the customer overdrawing on his current account would not have been considered of significance by the typical customer at the time of establishing the account. The charges would only be imposed in contingent circumstances and were akin to default charges triggered by a breach of contract, although they were not in fact triggered by a breach of contract because of the manner in which the contractual relationship had been expressly framed. The customer would not consider the contingent liability to pay the Relevant Charges in the event of overdrawing on his account an essential part of the Banks agreement to provide these services without charge provided that he remained in credit. It followed that the liability to pay the Relevant Charges was not part of the core or essential bargain and did not fall within the ambit of Regulation 6(2). The approach to the issue Early in his argument Mr Sumption said: [T]here isroom for argument about whether the insufficient fund charges are part of the price for the package of services or just the particular service which occasions their being charged, but we will submit that it is unrealistic to say, as the judge did, that insufficient fund charges are not payable in exchange for any service at all and are, therefore, not a price at all. This raises the questions by what criteria do you decide whether the charges are payment for services, if so, whether individual charges are payments for individual services or part payment for a package of services, and from whose viewpoint do you decide those questions? So far as the latter question is concerned, the choice would appear to be between the viewpoint of the customer, having regard to the facts that he would reasonably be expected to know, the viewpoint of the Banks, having regard to the more extensive knowledge held by the Banks, or no viewpoint at all, on the basis that these questions have to be answered by application of an objective test to all the material facts. There is an allied question of whether the language used to describe the obligations imposed by the terms is relevant or whether one looks simply at the nature and effect of those obligations. The narrow issue raised by this appeal is only relevant as part of the wider issue that will arise if and when the Relevant Terms are challenged as being unfair. At that point the question may arise are the terms being challenged on the ground that the Relevant Charges are excessive having regard to the services that are provided in exchange for them? The court before which the challenge is made may then have to decide whether any, and if so what, services are provided in exchange for the Relevant Charges as a stepping stone to deciding whether the challenge is one precluded by Regulation 6(2). To answer that question the court will, in my view, properly have to consider the role played by the Relevant Charges having regard to all the facts that are relevant to the operation of the contractual adventure and not just to those that are, or reasonably should be, within the knowledge of the customer. Conclusions I wish to express my admiration for the detailed and perceptive analysis of Andrew Smith J, although I do not share all the conclusions that he reached. He examined each of the Relevant Charges and the circumstances in which they fell to be paid. He concluded that it was impossible to say that each charge was given in exchange for the event that triggered it. I agree with that conclusion. It accords, of course, with the primary way in which the Banks put their case. The same conclusion would, I think, have been reached by a reasonably informed customer who applied his mind to the question. In each instance the Judge identified aspects of the provisions for payment of the Relevant Charges that would be anomalous if they were intended to be paid in exchange for the service to which they related. I will take one of the charges made by Barclays to illustrate such anomalies. A Paid Referral Fee is charged when the Bank honours a cheque, standing order or direct debit in circumstances where the account is overdrawn without prior arrangement. The fee is not charged per transaction but at 30 per day. But the fee is only charged on a maximum of three days per month. A customer would not conclude that the fee was charged in exchange for the transaction or transactions concluded on the days when the charges were made but that any other similar transactions in the course of the month were provided free. I agree with Andrew Smith J that a careful analysis of the transactions giving rise to the obligation to pay the Relevant Charges leads to the conclusion that they are not the prices paid in exchange for the transactions in question. I shall revert to the Judges rejection of the Banks case that the Relevant Charges were part of the remuneration paid for the package of services provided to holders of current accounts. First I wish to address the reason why the Court of Appeal rejected that case. The Court of Appeal accepted that the contract between the Bank and its customer had to be treated as a package. They did not exclude from the package services that were supplied at a time when the current account was overdrawn. They accepted that the Relevant Terms were terms that provided for payment of price or remuneration. They held, however, that they were not core payment terms but ancillary or incidental price, remuneration or payment terms (paragraph 69(iii)) which did not constitute price or remuneration that fell within Regulation 6(2). I can see no justification for excluding from the application of Regulation 6(2) price or remuneration on the ground that it is ancillary or incidental price or remuneration. If it is possible to identify such price or remuneration as being paid in exchange for services, even if the services are fringe or optional extras, Regulation 6(2) will preclude an attack on the price or remuneration in question if it is based on the contention that it was excessive by comparison with the services for which it was exchanged. If, on analysis, the charges are not given in exchange for individual services but are part of a package of different ways of charging for a package of varied services, this does not mean that they are not price or remuneration for the purpose of Regulation 6(2). As I observed earlier, an assessment of the fairness of the charges will be precluded if the basis of the attack is that, by reason of their inclusion in the pricing package, those who pay them are being charged an excessive amount in exchange for the overall package. The Court of Appeal accepted the following argument advanced by the OFT. The object of Regulation 6(2) is to exclude from assessment for fairness that part of the bargain that will be the focus of a customers attention when entering into a contract, that is to say the goods or services that he wishes to acquire and the price he will have to pay for doing so. Market forces could and should be relied upon to control the fairness of this part of the bargain. Contingencies that the customer does not expect to involve him will not be of concern to him. He will not focus on these when entering into the bargain. The Relevant Charges fall into this category. Free if in credit current accounts are opened by customers who expect to be in credit. Customers who go into debit without making a prior agreement for an overdraft normally do so because of an unforeseen contingency. Customers do not have regard to the consequences of such a contingency when opening a current account. Accordingly, the Relevant Charges that are then levied do not fall within Regulation 6(2). It seems to me that this reasoning is relevant not to the question of whether the Relevant Charges form part of the price or remuneration for the package of services provided but to whether the method of pricing is fair. It may be open to question whether it is fair to subsidise some customers by levies on others who experience contingencies that they did not foresee when entering into their contracts. If it is not it may then be open to question whether the Relevant Terms fall within Regulation 5(1). These questions do not, however, bear on the question of whether the Relevant Charges form part of the price or remuneration that is paid in exchange for the services provided to the holder of a current account. In agreement with Lord Walker, and for the additional reasons that he gives, I am not persuaded by the Court of Appeals reasons for excluding the Relevant Charges from the price or remuneration in Regulation 6(2). I now turn to the reasons given by Andrew Smith J for rejecting the Banks case that the Relevant Charges are part of a package of prices or remuneration paid for a package of services see paragraph 67 above. First he says that it is not a natural use of language to say that the Relevant Charges are levied or paid in exchange for those services supplied when an account is in credit. It does not seem to me that this does full credit to the package approach. I do not imagine that there are many customers who run a current account that is permanently overdrawn in circumstances where they have not specifically agreed an overdraft facility. Most customers who incur Relevant Charges run current accounts that are in credit most of the time. I do not think that it is an unnatural use of language to say that the Relevant Charges that they pay are paid as part of the price or remuneration provided in exchange for the package of services that they receive. If the Relevant Charges are not part of the price or remuneration for the services provided, the question arises of how the charges should be classified. The answer suggested on behalf of the OFT is that they are in the nature of default payments, imposed not as a hefty element in the price that the Banks hope that customers will pay for their services but by way of sanctions to discourage them from overdrawing on their current accounts. At paragraph 107 the Court of Appeal held: [The Relevant Charges] areakin to default charges which are triggered by a breach of contract. Although they are not in fact triggered by a breach of contract because of the manner in which the contractual relationship has been expressly framed, this does not mean that they are not contingent charges Andrew Smith J considered at paragraphs 295 to 324 whether the Relevant Charges were penalties at common law so as to be unenforceable for that reason. He held that they were not because a penalty at common law is a payment that becomes payable upon a breach of contract. Liability to pay Relevant Charges is not contingent upon breaches by the customers of their contracts. It is not a breach of any of the standard form contracts under consideration to overdraw, or attempt to overdraw, on a current account. Mr Sumption rightly conceded, however, that the Banks could not convert what were in effect penalties into price simply by wording their contracts so as to ensure that the contingencies that triggered liability to pay the charges did not constitute breaches of contract. Mr Crow argued that the Court of Appeal was correct to describe the Relevant Charges as akin to default charges. They were only payable in what he described as aberrant circumstances. He pointed out that many of the terms that give the impression that the charges are the cost of exercising contractual options are of recent origin. Contracts that preceded them had terms which indicated that customers were not to go into overdraft without prior arrangement, even if doing so was not technically a breach of contract. He pointed out that this is still true of the following current term of the Nationwide Building Societys terms: Your FlexAccount is a share of Nationwide Building Society. It will give membership rights to the account holder(s).Your membership may be withdrawn if you overdraw without agreement or exceed an agreed overdraft. Mr Sumption challenged that submission. He submitted that, at a time when virtually the whole population had a personal current account, the ability to overdraw informally and at short notice and without elaborate negotiation was an important tool of personal finance management. It was an extremely valuable facility, not properly to be described as an aberration. Andrew Smith J rejected the OFTs submission that the Banks terms that treat an instruction that involves overdrawing as a request for an overdraft were misleading. He held: 75. Thus, apart from Nationwide, the Banks terms and conditions are couched in terms of the customer making a request of the Bank and the Bank responding to it, and in some cases they refer to the Bank considering the request. The OFT criticises this terminology as an artificial device recently introduced which disguises the true nature of the parties dealings when a customer gives his bank an instruction which would, if paid, take the account into debit. Similarly, the OFT suggests that the use of the term overdraft to describe the debit balance created in these circumstances has misleading connotations, and emphasises the differences between the debit balance resulting from such a payment and an overdraft facility that a bank and a customer might agree should be available on an account. 76. Certainly, this terminology has been introduced by the Banks into their documentation relatively recently. However, I am unable to accept that the references to the customer making a request for an overdraft when he gives a Relevant Instruction are inappropriate or create a fiction. On the contrary, they spell out what is, as a matter of legal analysis, implicitly done when a customer gives a Relevant Instruction. Of course, there are differences between any resulting overdraft and a facility arranged by a specific agreement between a customer and his bank. A facility for an overdraft typically, and as provided by the Banks under their current terms (to which I refer below), commits the bank to allow the customer to overdraw on his account for as long as the facility is in place and within its limits, and, while of course it is possible for a facility to be confined to use for a stipulated purpose, it does not typically cover only a specific payment by the customer. If a fee is charged, it is generally for the facility itself, regardless of whether it is in fact used by the customer to borrow or how much it is so used. (None of the Banks charges a customer for requesting a facility in advance if the request is refused.) However, none of this means that it is misleading to use the expression overdraft to refer either to a facility or to borrowing under a facility or to unarranged borrowing. To my mind the expression is flexible enough naturally to encompass all these usages. As Mr Sumption observed there has been no appeal against this finding. In support of his submissions Mr Sumption relied upon the fact that a very significant number of customers incur Relevant Charges and upon the overall contribution that these charges make to the revenue earned by the Banks from operating current accounts. In the region of 20% of customers incur Relevant Charges but these account for over 30% of the revenue received by the Banks from current account customers. This compares with about 50% that represents the benefit of the use by the Banks of the funds in the accounts of customers who are in credit. When the relevant facts are viewed as a whole, it seems clear that the Relevant Charges are not concealed default charges designed to discourage customers from overdrawing on their accounts without prior arrangement. Whatever may have been the position in the past, the Banks now rely on the Relevant Charges as an important part of the revenue that they generate from the current account services. If they did not receive the Relevant Charges they would not be able profitably to provide current account services to their customers in credit without making a charge to augment the value of the use of their funds. For these reasons I have formed the conclusion that the Relevant Charges are, as the Banks submit, charges that they require their customers to agree to pay as part of the price or remuneration for the package of services that they agree to supply in exchange. My conclusions accord with those of Lord Walker and, for the reasons that he gives as well as my own, I would allow this appeal. I have not found this an easy case and I do not find the resolution of the narrow issue before the court to be acte clair. I agree, however, that it would not be appropriate to refer the issue to the European Court under Article 234. I do not believe any challenge to the fairness of the Relevant Terms has been made on the basis that they cause the overall package of remuneration paid by those in debit to be excessive having regard to the package of services received in exchange. In these circumstances the basis on which I have answered the narrow issue would seem to render that issue academic. It may be that, if and when the OFT challenges the fairness of the Relevant Terms, issues will be raised that ought to be referred to Luxembourg. That stage has not yet been reached. LADY HALE For the reasons given by Lord Walker and Lord Mance, I too would allow this appeal and make the declaration proposed by Lord Walker. I would only add that, should this or any other Parliament be minded to take up the invitation given in the last paragraph of Lord Walkers judgment, it may not be easy to find a satisfactory solution. The banks may not be the most popular institutions in the country at present, but that does not mean that their methods of charging for retail banking services are necessarily unfair when viewed as a whole. As a very general proposition, consumer law in this country aims to give the consumer an informed choice rather than to protect the consumer from making an unwise choice. We buy all sorts of products which a sensible person might not buy and some of which are not good value for the money. We do so with our eyes open because we want the product in question more than we want the money. Should financial services be treated differently from other goods and services? Or is the real problem that we do not have a real choice because the suppliers all offer much the same product and do not compete on some of their terms? This is the situation here. But it is not clear to me whether the proper solution is to find some way of forcing the suppliers to compete with one another in the terms they offer or whether the solution is to condemn one particular model of charging for those services. Fortunately, however, that is for Parliament and not for this Court. LORD MANCE Council Directive 93/13/EEC of 5 April 1993 and The Unfair Terms in Consumer Contracts Regulations 1999 (S.I. no. 2083), which implement the Directive domestically, both relate to unfair terms in contracts concluded between a seller or [a] supplier and a consumer. They make the validity of a contractual term which has not been individually negotiated subject generally to the criterion of fairness (defined by reference to whether contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer). This appeal concerns the exception to this rule, provided in Article 4(2) of the Directive and Regulation 6(2). It is not suggested that there is any material difference between these two provisions. As Regulation 6(2) puts it: In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate: to the definition of the main subject matter of the (a) contract, or (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange. Adequacy (the word also used in the Directive) means appropriateness or reasonableness (in amount). This appeal is concerned with Relevant Charges in the form of unpaid item charges, paid item charges, overdraft excess charges and guaranteed paid item charges levied when a customer gives instructions or undertakes a transaction without having sufficient funds to back it. The Office of Fair Trading (OFT) has written to various banks expressing concerns about the fairness of the terms agreed by the banks with their customers so far as they provide for payment of Relevant Charges. The question for decision is whether the OFT would be entitled to challenge the fairness of such terms under regulation 12. It is now accepted that such terms are not individually negotiated within regulation 5(1). But it is also common ground (except in the case of four banks in certain specific and minor respects) that they are in plain intelligible language within regulation 6(2). The issue is whether the Relevant Charges or the agreement to pay them constitute price or remuneration in exchange for the supply of services within regulation 6(2). If they do, then any challenge to their fairness based on their appropriateness in relation to such services is excluded under regulation 6(2). Any assessment based on matters not relating to the appropriateness in amount of the price or remuneration is not excluded by regulation 6(2)(b). This regulation is clearer than its predecessor (regulation 3(2) of the 1994 Regulations) which suggested grammatically that it was only a term which . concerns the appropriateness of the price or remuneration that was immune from challenge (language reflected in some of the reasoning in Director General of Fair Trading v First National Bank plc [2002] 1 AC 481, below). The parties have in their written cases and oral submissions identified two broad issues for determination. The first concerns the proper interpretation of regulation 6(2)(b), the second whether the Relevant Charges fall within the scope of that regulation, properly interpreted. The first issue is one of European law. As to the second, however, no question of European law is involved in the determination of the relevant circumstances. The parties also agree that no such question is in this case involved in applying the regulation, properly interpreted, to the circumstances including identifying the price or remuneration in exchange for which goods or services are to be supplied. European Court of Justice authority for this differentiation appears to be limited to the assessment of unfairness under articles 3 and 4(1) of the Directive (regulations 5 and 6(1) of the Regulations): Freiburger Kommunalbauten GmbH Baugesellschaft & Co. KG v Ludger Hofstetter and Ulrike Hofstetter (Case C 237/02); but I accept its correctness in principle. Since the Directive and Regulations are concerned with terms in contracts, it is first of all necessary to identify the relevant contracts. This is a matter about which the judge, Andrew Smith J, and the Court of Appeal took different views, although again it is not suggested that it raises on the facts of this case any particular issue of European law. The banks primary case is that the relevant contracts are the contracts for an overall package of banking facilities made by the banks with their customers. Andrew Smith J rejected this analysis as unnatural: payments by way of Relevant Charges could not be said to be paid in exchange for services supplied when an account is in credit; and the description free if in credit connoted that there was no price to be paid when an account was in credit (paras. 398 9). Furthermore, if the relevant contract was taken to be the overall package, the Relevant Charges would represent no more than part of the price or remuneration, and an assessment of the fairness of such charges as against the package of services would be beside the point and would not intrude upon the essential bargain intended to be protected from assessment (para. 400). There is in my opinion a flaw in this reasoning. It is not comparing like with like. Viewing the matter at the level of the banking contracts, the comparison is between, on the one hand, the package of services offered by the banks (some or all of which may or may not be used by any particular customer) and, on the other, the customers commitment to pay such charges as may arise from whatever facilities he does use. At this level, the banks case is that price or remuneration is or includes the customers potential liability for charges, rather than the payments which he or she has actually to make if and when such charges are incurred. In my opinion the Court of Appeal was right in para. 97 of its judgment to identify the relevant contract as being in the first instance the banking contract for an overall package of facilities. That is the contract in which the Relevant Charges appear and were agreed. Further, any challenge to the fairness of a term must be to its fairness in the context of the relevant contract in which it appears. It is beside the point if it is not. If, on a proper analysis, the customers potential liability for the Relevant Charges is the or part of the price or remuneration in exchange for which the overall package of banking services is supplied, and it is challenged on the ground that it makes such price or remuneration disproportionate overall, then regulation 6(2)(b) excludes the challenge. If there is no challenge to the overall proportionality of the overall price or remuneration of the package, then I fail to see how a challenge to the proportionality of the Relevant Charges in relation to the cost of providing particular services in isolation can be admissible or relevant. A term which is proportionate in context cannot become disproportionate viewed out of context. It is true that Relevant Charges are only incurred when a customer, either deliberately or inadvertently, gives an instruction or enters into a transaction, by which as a matter of law and contract he or she requests the bank to provide overdraft facilities. So, each time such a request is made and acted upon (even if only with the result that the request is declined), it is possible to identify a more developed contractual relationship as arising. Under that relationship, the Relevant Charges become payable in respect of the request (although not, the judge thought, in exchange for any services provided in consequence of the request). I do not however consider that this relationship can be the contract to which the Directive and Regulations refer. If the agreement to incur the Relevant Charges is part of an overall package contract, its vulnerability to challenge and, if permissible, any assessment of its fairness under the Directive and Regulations must, as I have said, depend upon an analysis of such agreement as part of the package contract. Otherwise, as Mr Sumption pointed out, a customer could challenge each separate part of a package in isolation, although as a whole the price or remuneration charged was unchallengeable. Issues arise under two heads: the first, the proper interpretation of Article 4(2) and Regulation 6(2) (I shall for convenience generally refer only to the latter); and the second, the application on the facts of whatever is that proper interpretation. As to the first, it is common ground that not every provision for payment contained in a contract for the supply of goods or services is rendered immune from scrutiny under Regulation 6(2). There can be payments which do not constitute either price or remuneration of goods or services supplied in exchange. Further, payments which do constitute price or remuneration in this sense can be challenged as unfair on grounds which do not relate to their appropriateness in amount as against the goods or services supplied in exchange. Heads (d), (e), (f) and (l) in the grey list of terms set out in Schedule 2 to the Regulations fall within one or both categories. Director General of Fair Trading v First National Bank plc [2002] 1 AC 481 provides another example. In the First National Bank case, the House was concerned with a provision in a regulated credit agreement for interest to continue at the credit agreement rate as against a borrower who had defaulted and against whom judgment had been entered for the principal and interest outstanding to judgment. The County Courts (Interest on Judgment Debts) Order 1991 (SI No 1991/1184) meant that there was no statutory claim for or right to post judgment interest. Hence, the rationale for including a continuing interest provision in the credit agreement. The case arose under Regulation 3(2) of the Unfair Terms in Consumer Contracts Regulations 1994, which provided that no assessment shall be made of the fairness of any term which . (b) concerns the adequacy of the price or remuneration, as against the goods or services sold or supplied. (This is slightly, though possibly materially, different wording to that of Regulation 6(2) of the 1999 Regulations which replaced it.) The House held that Regulation 3(2) did not apply, but went on to hold the term to have been fair. Passages from the speeches of Lord Bingham of Cornhill (para. 12) and Lord Steyn (para. 34) have been set out by Lord Walker. Both considered that clause 8 fell outside Regulation 3(2)(b), as a provision prescribing the consequences of default. Lord Bingham added in a sentence drawing on the particular wording of Regulation 3(2)(b) that It does not concern the adequacy of the interest earned by the bank as its remuneration but is designed to ensure that the bank's entitlement to interest does not come to an end on the entry of judgment. Lord Hope of Craigheads explanation is also relevant. He said (para. 43) that: Condition 8 is a default provision. The last sentence of it is designed to enable interest to be recovered on the whole of the amount due on default. That amount includes legal and other costs, charges and expenses, so it is not confined to the outstanding balance due by the borrower. I do not think that it can be said to be directly related to the price charged for the loan or to its adequacy. It is concerned instead with the consequences of the borrower's breach of contract. It sets out what is to happen if he fails to make the repayments to the bank as they fall due. I agree that regulation 3(2)(b) does not apply to it, and that its fairness as defined in regulation 4(1) of the 1994 Regulations must be assessed. This underlines the distinction between payments due in exchange for the original loan and the financial payments (including those relating to costs, charges and expenses) due on default under the clause. The decision of Gross J in Bairstow Eves London Central Ltd. vs Smith [2004] EWHC 263 (QB); [2004] 2 EGLR 25 provides another example of the same distinction. The contracts made by customers for an overall package of banking facilities have been described as on a free if in credit basis. The OFT submits that this indicates or suggests that the agreement to pay Relevant Charges cannot be regarded as the or a part of the price or remuneration in exchange for which banking facilities are supplied. The banks submit, on the contrary, that the clear corollary of free if in credit is that the services provided will not be free if the customer is not in credit. They ask rhetorically what other price or remuneration there is, if not the Relevant Charges. The OFTs response is that it is conceptually possible to have a contract for services without anything in exchange that counts in terms of regulation 6(2)(b) as either price or remuneration. That I would accept. The bank might (especially under a basic banking contract which did not allow any overdraft in any circumstances) be content to operate on the basis that its profit would come solely from its power to use money which customers deposited with or arranged to have transferred to it. That power follows from the banks ownership of money deposited with or transferred to it. (Further, since the deposit with or transfer to a bank of money is the main or part of the main subject matter of a banking contract, any assessment of the fairness of it or its legal consequences would appear to be excluded under regulation 6(2)(a), rather than (b).) Alternatively, the OFT suggests, without committing itself, that, if there is any price or remuneration under a free if in credit banking contract, it is more easily found in the customers agreement to pay overdraft interest. In accordance with general European legal principle, article 4(2) and regulation 6(2) are as exceptions to be construed narrowly. Nevertheless, the concepts of price or remuneration must, I think, be capable in principle of covering, under a banking contract, an agreement to make a payment in a particular event. The language of regulation 6(2)(b) is on its face therefore capable of covering a customers commitment, under the package contracts put before the House, to pay the Relevant Charges in the specified events. There is no reason why a customer should not be given free services in some circumstances, but, as a quid pro quo, be expected to pay for them in others. At various points the submissions before the House addressed the policy underlying the free if in credit system of charging. It is clear from the description free if in credit itself that the system is likely to involve significant elements of cross subsidy. Some customers (those remaining always or largely in credit) pay no or few charges, while others pay charges more regularly. Overall, around 30% of the banks income from their customers is derived from the Relevant Charges. According to the OFTs own Market Study of July 2008, 77% of customers surveyed who had incurred a Relevant Charge in the past 12 months had heard of such charges before they incurred one. The Relevant Charges levied on any particular customer greatly exceed the actual net cost to the bank of complying with the request(s) impliedly made by the customer leading to the incurring of such charges. But it is obvious on reading the charging structure that charges cannot be directly related to the actual costs of providing any particular service triggering them. There are of course other obvious elements of cross subsidy, even between customers who remain in credit. Customers who maintain large current accounts and receive no or limited interest on them subsidise in a sense customers who manage consistently to keep just in credit. Mr Jonathan Crow QC for the OFT made clear that the OFT does not contend that the element of cross subsidy provided by the Relevant Charges affects the question whether regulation 6(2)(b) applies. Regulation 6(2)(b) would apply if the banks simply decided to charge more for particular services in order to pay their directors more or to earn more for their shareholders. It cannot make any difference to its application if the banks decide to adopt a business model which charges more for one type of transaction in order to subsidise another. The OFTs case, essentially accepted by the Court of Appeal, is that the agreement to pay the Relevant Charges is not price or remuneration, because regulation 6(2)(b) is confined in scope to payments in exchange for sales or supplies on which payments the consumer can be taken to have focused and to which he can be taken truly to have consented. The Court of Appeal encapsulated this conclusion as import[ing] the notion of essential bargain into the construction of article 4(2) and into both paragraphs (a) and (b) of regulation 6(2) (para. 86). It added that the concept of the essential bargain flows naturally from the structure and purpose of the Directive because not every payment that a consumer makes falls within regulation 6(2)(b), and such a construction prevents regulation 6(2)(b) being construed too widely. It considered that its conclusion reflected the reasoning both in the travaux prparatoires and in the First National Bank case, which it interpreted as indicating that ancillary or incidental payment terms were not intended to be exempt from assessment for their adequacy under regulation 6(2) (paras. 64, 69 and 86). The considerations which the Court of Appeal saw as relevant to the broad test which it thus identified were as follows (para. 90): terms the standard 90. The above analysis suggests that the following considerations are relevant to this broad question, together no doubt with many others, depending upon the facts of the particular case: i) The nature of the services provided as a whole and the manner and term in which documentation is provided to consumers. ii) The quantum of the particular payment, the goods or services to which it is said to relate and the other payments required under the contract. iii) In order to be 'price or remuneration' within the meaning of article 4(2) the payment provision must not be ancillary to the central bargain between the consumer and supplier. Along this sliding scale: a) if the payment obligations are directly negotiated between the consumer and supplier they will not be subject to assessment for fairness under the Directive; b) the more closely related the payment term is to the essential bargain between the parties, the more likely it is to fall within the exception in article 4(2); but c) the more ancillary the payment term is and the less likely it is to come to the direct attention of the consumer at the time the contract is entered into, the less likely it is to be within the concept of 'price or remuneration' within the meaning of the Directive. One difficulty about the Court of Appeals reasoning lies in its reliance on the concept of negotiation or indeed bargain, as in para. 90(iii)(a) and (b) above and elsewhere, repeatedly, in its judgment: see paras. 64, 87, 107 and 109 (negotiation) and 86, 90, 94 95 and 106 (bargain). The Court of Appeal suggested that the absence of any negotiation or bargain or of any ability to negotiate or bargain militated strongly against a conclusion that a particular charge constituted (part of) the price or remuneration. However, the Directive and Regulations are only concerned with contractual terms which have not been individually negotiated. Another difficulty is that the Court of Appeals broad test, and the sliding scale of relevant considerations introduced by para. 90, convert the apparently simple language of regulation 6(2)(b) (or article 4(2)) into a complex and uncertain value judgment. This is rendered even more complex by the Court of Appeals further conclusion that the judgment should be made by the court through the eyes of the typical consumer (para. 91). This led to considerable argument before the House as to who might be regarded as the typical consumer. Was it relevant to look at the whole body of customers, or at those who would or might be likely to incur Relevant Charges? Before the House Mr Crow for the OFT summarised three main considerations on which the OFT relied to determine whether a payment was part of the essential bargain, namely whether the payment was (a) ancillary, (b) readily recognisable or visible by a typical customer and (c) one arising in the normal performance of the contract. The Directive was the result of an iterative process between the Commission, European Parliament and Council of Ministers. The outcome was, as not uncommonly happens, significantly different from that originally proposed. The Commissions original proposal of 24 July 1990 (COM(90) 322 fin) and its Explanatory Memorandum of 3 September 1990 were drafted with a view to regulating by reference to the test of fairness every contract between a consumer and a party acting in the course of his trade, business or profession, whether the contract is a take or leave it contract, or is in standard form or is negotiated individually. The proposal was the subject of a critique by Hans Erich Brandner and Peter Ulmer (The Community Directive on Unfair Terms in Consumer Contracts: some critical remarks on the proposal submitted by the EC Commission, (1991) 28 CMLR 647); these authors argued that any control by the courts or administrative authorities of the reasonableness or equivalence of the relationship between the price and the goods or services provided was anathema to the fundamental tenets of a free market economy, and that the focus should be on improving transparency in this area, the requirement of transparency being directed against terms which may conceal the principal obligations or the price and thus make it difficult for the consumer to obtain an overview of the market and to make what would (relatively speaking) be the best choice in a given situation (p.656). The Committee on Legal Affairs and Citizens Rights of the European Parliament issued a report on 9 April 1991 (A3 0091/91), which suggested the amendment of the proposal to exclude individually negotiated contract terms. The Economic and Social Committee (consulted by the Council of Ministers) issued its opinion on 24 April 1991, suggesting both that individually negotiated contractual terms required different treatment and that an additional criterion of unfairness should be introduced, namely the non transparency of a contract term (OJ No C 159, 17.6.1991). The European Parliament repeated its stance that individually negotiated terms should fall outside the proposal, and proposed that terms containing clauses which are unreadable or likely to be misunderstood by consumers because they are not in plain language should be regarded as unfair (OJ No C 326, 16.12.1991). The Commission on 5 March 1992 responded with an amended proposal (COM(92) 66 fin). This distinguished between the treatment of non negotiated and negotiated terms, but would have continued to regulate the latter where imposed upon the consumer as a result of the seller/suppliers economic power or the consumers economic and/or intellectual weakness. The amended proposal also contained a requirement (in terms which become part of the final article 5) that all written terms offered to the consumer in writing must always be drafted in plain, intelligible language. On 22 September 1992 the Council of Ministers adopted its Common Position on the basis of article 100a of the Treaty (8406/92). This restricted the proposal to contractual terms which had not been individually negotiated. It introduced article 4(2) in its final form and accepted the requirement under article 5 that all written terms offered to the consumer in writing must always be drafted in plain, intelligible language. The accompanying reasons explained in relation to article 4 that the new wording . is intended to clarify the procedures for assessing the unfairness of terms and to specify their scope while excluding anything resulting directly from the contractual freedom of the parties (e.g. quality/price relationship). The Parliament accepted the Councils Common Position on 16 December 1992, and the Directive was finalised on this basis. The legislative history shows therefore an extensive process of development, during which the original proposal was replaced by an amended proposal which was itself very largely amended. The measure ultimately agreed was confined to non negotiated terms. It stressed the need for transparency (plain, intelligible language) in relation to all such terms. But, provided such transparency existed, any assessment of the fairness of such terms was excluded in relation to the definition of the main subject matter of the contract and the adequacy of the price and remuneration . as against the services or goods supplied in exchange . The general approach and the rationale as explained in the Councils Reasons match those of Brandner and Ulmer in their article cited above. It would re write the legislation to read article 4(2) of the Directive or regulation 6(2) as if they introduced as the test a complex enquiry as to whether or how far consumers had actually exercised contractual freedom when agreeing upon a price or remuneration stated in plain and intelligible language in a contract into which they entered. Article 4(2) and regulation 6(2) can loosely be described as being concerned with the assessment of core terms (see e.g. First National Bank). But that is on the basis that price and remuneration always fall within them. The Court of Appeal erred in introducing a yet further restriction, whereby it would be only essential core terms which could attract immunity. In my opinion, the identification of the price or remuneration for the purposes of article 4(2) and regulation 6(2) is a matter of objective interpretation for the court. The court should no doubt read and interpret the contract in the usual manner, that is having regard to the view which the hypothetical reasonable person would take of its nature and terms. But there is no basis for requiring it to do so by attempting to identify a typical consumer or by confining the focus to matters on which it might conjecture that he or she would be likely to focus. The consumers protection under the Directive and Regulations is the requirement of transparency on which both insist. That being present, the consumer is to be assumed to be capable of reading the relevant terms and identifying whatever is objectively the price and remuneration under the contract into which he or she enters. A contract may of course require ancillary payments to be made which are not part of the price or remuneration for goods or services to be supplied under its terms. The First National Bank and Bairstow Eves cases illustrate the distinction by reference to default terms. Andrew Smith J considered and rejected a submission that the Relevant Charges constituted in reality no more than penalties, disguised (at least in the case of all the terms save those of Nationwide Building Society) by drafting which expressed the charges as arising in respect of services to be provided by the banks. He held that, far from being inappropriate or artificial, the language of request reflected the true legal analysis of a situation where the customer gives an instruction or enters into a transaction for which insufficient funds exist in his or her account (paras. 75 76). There has been no appeal against that conclusion, and the fact that the relevant contractual arrangement is an overall package contract made between a bank and each customer tends in my view to confirm the conclusion. A customer making such a contract accepts that the free if in credit system involves substantial charges if instructions are given or transactions entered into which involve putting the account into debit. While the incurring of Relevant Charges is no doubt something that customers would like to avoid, it is a clearly explained and, objectively viewed, very important feature of the overall package. The OFTs case that such charges are not readily visible or recognisable as the price is in my view untenable. In so far as it relies on the consideration that the charges are out of proportion to the actual cost of rendering any services in respect of an instruction or transaction which would involve an (or an increase in an) unauthorised overdraft, it also presents the paradox, that the higher the Relevant Charges, the less visible or recognisable they are said to be as the price of the overall package. Taking the view that I do of the meaning of both the Directive and the Regulations, the question arises whether it is nevertheless incumbent on us to refer the interpretation of the Directive to the Court of Justice. Under CILFIT v Ministry of Health (Case 283/81; [1982] ECR 3415) and in the absence of any prior Court of Justice authority, this depends upon (a) whether the question is relevant to the outcome of the case and (b) whether the correct application of Community law is so obvious as to leave no scope for reasonable doubt. In the latter connection we have to ask ourselves whether the answer we consider correct would be equally obvious to the courts of other Member States and to the Court of Justice itself; and in this regard we have to bear in mind the fact that Community legislation is drafted in different languages which may convey different meanings to different readers, that the Community concepts it uses (here price and remuneration) are autonomous concepts and that every provision of Community law must be placed in the context of Community law as a whole. In the present case, we are concerned with a relatively simple sentence, using simple and basic concepts, and the scope for different readings of different language texts seems very limited. The complex and unpredictable value judgment involved in the Court of Appeals approach was based in large measure upon a clear error, in treating the existence or absence of negotiation as significant in a context dealing by definition only with non negotiated terms. The suggested test of what is not . ancillary to the main bargain involves a restatement of the language of the Directive and Regulations; that language treats the price or remuneration as axiomatically part of the core bargain and so immune from scrutiny for reasonableness. Bearing in mind the general Community aim of legal certainty, the likelihood of the Court of Justice (or any other Member States courts) accepting the Court of Appeals approach to the interpretation of article 4(2) seems to me remote indeed. I would regard the position as acte clair and not as requiring a reference. However, if one takes a different view on whether the position is acte clair, there remains the question of relevance. Eliminating the Court of Appeals clear error in introducing as part of the test whether the relevant term had been directly negotiated, and assuming that the Court of Appeal was generally right in adopting as a test whether the term was not . ancillary to the main bargain, the question would be whether the Court was right to treat the terms of the package contracts relating to the Relevant Charges as ancillary terms, rather than as part of the agreed price or remuneration in exchange for which the banks undertook to provide their whole package of services. That question would involve the application of the Directive and Regulations, which is, as I have said, a matter for domestic, not European, law. The starting point would be that the banks customers committed themselves, under plain, intelligible language, to pay the Relevant Charges in respect of instructions given or transactions entered into without sufficient funds and in return for the package of services offered by the banks. The Court of Appeal identified a series of considerations, relating to the nature of personal current accounts, the contingent circumstances in which such instructions or transactions could come about, the uneconomic nature (from the customers viewpoint) of the Relevant Charges and the absence of any marketing of the banks services by reference to such Charges (para. 99). It summarised the incurring of Relevant Charges as being simply outside (or outwith) the ordinary conduct of the contractual relationship (para. 99(xv)). Mr Crow repeated and expanded on these points in his case (para. 81) and in his oral submissions before the House; he suggested that, if any price or remuneration could be identified at all, then the bank interest charged on any unauthorised overdraft was more readily recognisable as the payment made in exchange for the overdraft (case, para. 81(r)). But there is no reason why the price or remuneration payable for a package of services should not consist of a contingent liability. The uneconomic nature of the Relevant Charges from the customers viewpoint constitutes the importance of the charges from the banks viewpoint, and the plain intelligible language of the banking contracts made evident that there must be a considerable element of cross subsidy in respect of customers while they remained in credit. Like Lord Walker, I would therefore disagree with the Court of Appeals application of its test, even had I considered that test to be correct so far as it focused on what was or was not ancillary to the main bargain. In these circumstances, it would be unnecessary to make a reference, even if the view were to be taken that the meaning of price and remuneration in article 4(2) of the Directive is not acte clair. I would therefore allow the appeal and grant the relief proposed by Lord Walker in paragraph 51. I would also endorse Lord Walkers final paragraph. LORD NEUBERGER I also would allow this appeal for the reasons given by Lord Walker and Lord Mance, and would grant the relief proposed by Lord Walker in paragraph 51. I also agree with Lord Phillips, whose reasons are, I think essentially the same as those of Lord Walker and Lord Mance. On the one issue on which there may be some disagreement, namely whether the resolution of the dispute as to the interpretation of article 4(2) is acte clair, I share Lord Mances scepticism as to whether the Court of Justice would adopt the meaning accepted by the Court of Appeal. However, like Lord Phillips, I consider that it is possible that the Court of Justice would adopt such an interpretation, and therefore, if the resolution of that issue were essential to the determination of this appeal, I would, very reluctantly, have concluded that a reference was required. However, as he says, it is unnecessary for the issue to be resolved for the purpose of this appeal as explained by Lord Walker in para 50, and by Lord Mance in paras 116 and 117.

Lord Walker made clear that the scope of the appeal was limited the court did not have the task of deciding whether or not the system of charging current account customers was fair, but whether the OFT could challenge the charges as being excessive in relation to the services supplied in exchange (Paragraph 3). As Lord Phillips stated, even if such a challenge was not possible, it might still be open for the OFT to assess the fairness of the charges according to other criteria (Para 61). The key issue was whether the charges constituted the price and remuneration as against the goods or services supplied in exchange within the meaning of the Regulations. The Supreme Court considered and decided a number of arguments as to whether the charges could be said to be price or remuneration under Regulation 6 (2) (b): (1) The charges were not paid in exchange for the transactions to which they related eg. honouring a cheque when the customer had insufficient funds to do so (Para 75). (2) The Court of Appeal was wrong to find that Regulation 6 (2) (b) did not apply to charges that were ancillary to the core contract between the bank and customer (Paras 38 41, 47, 78, 112). Lord Walker commented that Regulation 6 (2) (b) contained no indication that only the essential price or remuneration was relevant. In fact, any monetary price or remuneration payable under the contract would naturally fall within the language of Regulation 6 (2) (b) (Para 41). (3) The charges were not concealed default charges designed to discourage customers from becoming overdrawn on their accounts without prior arrangement (Paras 88, 114). The High Court had rejected this argument and was right to do so. (4) The charges were properly to be regarded as falling within the scope of the Regulations (Paras 43, 80, 104). They were in fact part of the price or remuneration paid by the customer in exchange for the package of services which made up a current account (Paras 47, 89). The fact that liability to pay the charges depended on specific events occurring was irrelevant to that conclusion (Paras 47, 104). Accordingly, since any assessment of the fairness of the charges, which related to their appropriateness as against the services supplied in exchange, fell within Regulation 6 (2) (b), no such assessment could take place and so the appeal would be allowed (Paras 51, 90, 92, 118, 119). Further Comments Lord Phillips also noted that in the absence of the charges the banks would not be able profitably to provide current account services without a fee (Para 88). He stated that it might be open to question whether it is fair to subsidise some customers whose accounts always remain in credit by levies on others who experienced events they did not foresee when they opened their accounts (Para 80). Lord Walker commented that ministers and Parliament had decided to transpose the directive as it stood rather than to confer the higher degree of consumer protection afforded by the national laws of some other member states. Parliament might wish to consider whether to revisit that decision (Para 52). Lord Mance endorsed this comment (Para 118). Lady Hale commented that if Lord Walkers invitation to ministers and Parliament was to be taken up, it might not be easy to find a satisfactory solution. She questioned whether the real problem was not the charging model, but the lack of competition between the banks as to the product they offered (Para 93). No The court decided that although the interpretation of the European directive which the Regulations implemented was a question of European law it was not necessary to refer the matter to the European Court of Justice (Paras 49, 91, 115, 120).

These appeals raise a number of points, some technical, others fundamental, relating to the requirements of and consequences of non compliance with the short and inflexible time limits introduced by the Extradition Act 2003. Parts 1 and 2 of that Act deal with extradition to respectively category 1 territories in practice other member states of the European Union party to the Council Framework Decision of 13 June 2002 (2002/584/JHA) introducing the European Arrest Warrant, to which Part 1 gives effect and category 2 territories in relation to which a different and more traditional scheme applies. Each of the schemes contained in Part 1 and 2 leads to the person whose extradition is requested being brought before a judge. The judge then decides, by considering a series of questions laid down in the Act, whether or not, in the case of Part 1, to order extradition or, in the case of Part 2, to send the case to the Secretary of State for his decision whether to extradite. Depending upon the judges decision, there are rights of appeal to the High Court on law and fact. These are given under Part 1 to the individual (section 26) or to the authority issuing the warrant (section 28) and under Part 2 to the individual (section 103) or the authority acting on behalf of the category 2 territory seeking extradition (section 105). Rights of appeal also exist under Part 2, if the Secretary of State orders extradition (sections 108(1) and 110(1)). These rights of appeal must all be exercised within short time limits, described as the permitted periods. Thus, section 26(4) provides in the case of an order for extradition to a Part 1 territory that: Notice of an appeal under this section must be given in accordance with rules of court before the end of the permitted period, which is seven days starting with the day on which the order is made. Section 28(4) gives the authority a parallel right in the case of an order for discharge, providing for a like seven day permitted period starting with the day on which the order for the persons discharge is made. Sections 103, 105, 108 and 110 provide for appeals from a judges order sending a case to the Secretary of State for his decision whether a person is to be extradited and from any order subsequently made by the Secretary of State for extradition. In each case the permitted period within which notice of an appeal must be given in accordance with rules of court is 14 days starting with the day on which the Secretary of State informs the person affected or the person acting on behalf of the category 2 territory (as the case may be) of the order. In Mucelli v Government of Albania; Moulai v Deputy Public Prosecutor in Creteil, France [2009] UKHL 2; [2009] 1 WLR 276, the House of Lords held by a majority (Lord Rodger dissenting) that the requirement in sections 26(4) and 103(9) that notice of an appeal be given within the relevant permitted period meant that it had both to be filed in the High Court and served on all respondents to the appeal within such period. A similar requirement must necessarily exist under sections 28, 105, 108 and 110. The Supreme Court was asked on the present appeal to revisit and reverse that decision. The House in Mucelli distinguished between the requirement to give notice of an appeal within the permitted period and the requirement that such notice should be given in accordance with the rules. Failure to comply with the mandatory requirement (interpreted in Mucelli as involving both filing and service) is on this basis fatal to any appeal, since the statutory language only permits appeals within the permitted periods with no possibility of extension. Failure to comply with the rules can, on the other hand, be cured by the court in the exercise of its discretion under (in England) CPR 3.9 and 3.10. The result is similar to that achieved in Pollard v The Queen [1995] 1 WLR 1591, where the Privy Council held that a notice of appeal which was required by statute to be given "in such manner as may be directed by rules of court", but which did not comply with such rules because it was not signed by the appellant personally, was nonetheless a notice within the meaning of the relevant statutory provision, at least once the irregularity was waived by the court, and that such waiver validated the notice from the date of its lodging and did not merely bring into existence for the first time a valid notice. The House in Mucelli further held that the rules of court were incapable of cutting down the statutory permitted period; thus, CPR 3.6 providing (at the relevant time) that any document served after 16.00 should be deemed to be served on the next day was incapable of rendering out of time a notice of appeal served by Mr Moulai after 16.00 on the seventh and last day of the permitted period. Subsequent case law in the High Court shows the distinction between requirements of the statute and of the rules to have proved contentious. One line of authority has taken a relaxed view of the statutory requirements. In Office of Public Prosecutor of Hamburg, Germany v Hughes [2009] EWHC 279 (Admin), the court, rightly in my view, treated as a mere procedural error, which could be corrected, the endorsement in a notice of appeal of a wrong date of arrest (the effect of such endorsement being that, on the face of the notice, the 40 day period allowed for the court to begin to hear the substance of the appeal would have expired a month early). In a series of further cases, the court accepted that service of an unsealed notice of appeal was, at most, a procedural error: Pawel Sciezka v Court in Sad Okregowy, Poland [2009] EWHC 2259 (Admin), Dunne v High Court Dublin [2009] EWHC 2003 (Admin), Arunthavaraga v Administrative Court Office [2009] EWHC 18921 (Admin) and R (Kane) v Trial Court No 5 Marbella, Spain [2011] EWHC 824 (Admin); [2012] 1 WLR 375. In Kaminski v Judicial Authority of Poland [2010] EWHC 2772 (Admin) the court refused to strike out appeals where no or only plainly inadequate grounds were stated in the notice of appeal. It did so on the basis that the inclusion of grounds was a matter for rules (in which connection the court also thought that the rules made no provision for grounds). Other courts have taken a more stringent line. In Regional Court in Konin, Poland v Walerianczyk [2010] EWHC 2149 (Admin); [2012] 1 WLR 363, service of an unsealed copy notice of appeal was held insufficient to satisfy the statutory requirement under section 28 a decision which meant that it was the Polish authority that was out of time to appeal. In R (Bergman) v District Court in Kladno, Czech Republich [2011] EWHC 267 (Admin), a notice of appeal was prepared by an unrepresented defendant who had been remanded in custody, and was then faxed in draft to the judicial authority and filed, all within the 7 day period, but no stamped copy was served, or indeed received back by the defendant, until much later. Following Walerianczyk, it was held that there could be no appeal, although Irwin J, at para 10, recorded his "concern that unrepresented litigants who are in custody will often find it very hard to comply with the necessary requirements, despite every effort on the part of the court staff". In Szelagowski v Regional Court of Piotrkow Trybunalski Poland [2011] EWHC 1033 (Admin), a clerk was instructed, after filing a notice of appeal, to serve it on the Crown Prosecution Service with a letter on which he wrote the relevant Crown Office reference. The letter was expressed to cover the delivery of the appellants notice and grounds and to request a signature by way of receipt, and the Crown Prosecution Service gave such a receipt. But the clerk handed over the wrong accompanying package. Nothing in the package handed over or in the covering letter could be described as a notice of appeal. There was held to be no valid appeal. Sullivan LJ observed (para 18) that: this case demonstrates how a rigid statutory time limit which cannot be extended under any circumstances can work injustice in practice, but the statutory scheme is very clear. In the cases of Lukaszewski, Pomiechowski and Rozanski [2011] EWHC 2060 (Admin); [2012] 1 WLR 391, now before the Supreme Court, each of the appellants is a Polish citizen who is the subject of a European Arrest Warrant issued by the Polish court on the basis that he is wanted in order to serve an existing sentence, and, in the case of Mr Lukaszewski, that he is also wanted to stand trial on ten charges of fraud. The appellants were arrested and brought before the City of Westminster Magistrates Court, where their extradition was ordered on (respectively) 28th January 2011, 2nd March 2011 and 4th March 2011. Mr Lukaszewski and Mr Rozanski had each only been arrested on the day before such order. Mr Pomiechowski was also brought before the court on the day after his arrest, but his case was twice adjourned and he was remanded in custody until 2nd March 2011. He was then refused a further adjournment, and his extradition was ordered. Westminster Magistrates Court is the dedicated court for extradition proceedings, with three of its ten court rooms apparently being devoted to that purpose. It is a busy court. Article 11(2) of the Framework Decision stipulates that a person arrested for the purpose of the execution of a European Arrest Warrant shall have a right to be assisted by a legal counsel and by an interpreter in accordance with the national law of the executing Member State. At the City of Westminster Magistrates Court, such legal assistance is provided by duty solicitors before though not, it appears, after an extradition order is made by a magistrate. On Mr Lukaszewskis (untested) account, he was able to speak to the duty solicitor only briefly for two or three minutes through the glass of the dock immediately before the hearing with the security guard by him, and was not aware that the matter would proceed straight to a decision. Mr Pomiechowski was, in contrast, provided after his first appearance with a solicitor, and wished to oppose extradition on the grounds of delay, but on his account the solicitor had not produced a skeleton on this point by the 2nd March 2011, when a further adjournment was refused. In the event, none of these three appellants argued any substantive points before the magistrate in opposition to extradition. It is not difficult to see how, under such circumstances, the statutory right of appeal might prove relevant. Having regard to the dates on which their extradition was ordered, the permitted periods for Mr Lukaszewski, Mr Pomiechowski and Mr Rozanski to give notices of an appeal expired at midnight on respectively 3rd February, 8th March and 10th March 2011. Each appellant was remanded in custody (Mr Rozanski because he was unable to meet a condition of bail that he lodge security of 1,500), and taken to HMP Wandsworth. All three had been made aware, by the magistrate and/or the relevant duty solicitor or legal representative, at least in general terms of the permitted period of 7 days for appealing. Each had at this point no legal assistance, but each was assisted by a prison officer working in the prisons Legal Services Department to complete a Form N161 notice of appeal. Officers working in the prison legal services department have no legal background, but have completed a three day training course, which does not include extradition training. They seek to help unrepresented prisoners and to facilitate their appeals against extradition. For completeness, I record that Mr Lukaszewski sought to raise issues relating to his mental health, put later as involving a risk of suicide and as entitling him to protection from extradition under sections 25 and 21 of the 2003 Act. Mr Pomiechowskis grounds are not before the court, but appear to have invoked the delay elapsed since he left Poland in 2000. Mr Rozanski invoked compassionate grounds and inhuman conditions that he said that he would face in a Polish prison. However, no point arises or has been raised at this stage on the contents or merits of these appellants notices of appeal. The points before the Supreme Court are points of principle, which affect the admissibility of appeals, however good or bad. The legal services department faxed the notices of appeals to the Administrative Court for filing and stamping. The Administrative Court faxed a copy of the sealed front page back to the legal services department. The legal services department then faxed to the Crown Prosecution Service (as the legal representatives of the judicial authority of the state requesting surrender) a copy of the sealed front page together with a cover sheet. In the case of each of these three appellants all this occurred within the seven day permitted period. In the case of Mr Lukaszewski, the cover sheet faxed on 2nd February 2011 bore the words Sealed copy and his name with the explanation extradition appeal, and in the case of Mr Pomiechowski the cover sheet faxed on 8th March 2011 identified the copy as sealed and said see attached front page of Extradition paperwork for Mr Pomiechowski. Objection was not at once taken to the service only of a sealed front page. But, once taken, it was accepted by the High Court. It was also only after the course of events recounted in the previous paragraphs that the solicitors now acting for Mr Lukaszewski, Mr Pomiechowski and Mr Rozanski first became involved. In the cases of Lukaszewski and Pomiechowski, [2012] 1 WLR 391, para 20, Laws LJ and Kenneth Parker J held on 15th June 2011 that, in order [to] be or purport to be a notice of appeal, the document must (a) identify the appellant, (b) identify the decision against which he seeks to appeal and (c) pace Ouseley J in Kaminksi v Judicial Authority of Poland [2010] EWHC 2772, set out at least the gist of the basis on which the appeal is sought to be presented. Laws LJ reasoned that: So much is, I think, inherent in any sensible understanding of a notice of appeal. A document without statement of any grounds at all could not support an appeal. The absence of grounds from the notice at the beginning of the process will, I think, be apt to lengthen that process by later procedural contests. The case of Rozanski came on later, on 17th November 2011, before Moore Bick LJ who followed the decision in Lukaszewski and Pomiechowski. The fourth appellant before the court is Mr Halligen, a British citizen whose extradition is sought to the United States of America under Part 2 of the 2003 Act to face allegations of wire fraud and money laundering. He was arrested and brought before the City of Westminster Magistrates Court which on 4th November 2010 ordered that the case be sent to the Secretary of State for her to decide whether Mr Halligen should be extradited, and remanded Mr Halligen in custody. Mr Halligens extradition was ordered by the Secretary of State under section 93 on 22nd December 2010. The order and a letter setting out the Secretary of States reasons were sent not only by post, but also by fax (timed at either 15.48 or 16.48) to Mr Halligens solicitors on the same day. The Secretary of States letter addressed an objection which Mr Halligen had raised with reference to alleged national security grounds (see section 208 of the 2003 Act). It also informed Mr Halligen of his right under section 108 to give notice of appeal within 14 days to the High Court, pointing out explicitly that the giving of such notice requires both filing and service of the appellants notice within such 14 days and that under the rules any papers filed at the High Court must also be served upon the Home Office and the Crown Prosecution Service. Mr Halligen had solicitors. Evidently, they were quick to prepare grounds of appeal, since those attached to the notice of appeal are dated 23rd December 2010. The notice of appeal (by which he sought to pursue his alleged national security points by reference to the Secretary of States failure to exercise her powers under section 208 of the 2003 Act) was filed and stamped on prescribed form N161 on 29th December 2010. This was well within the fourteen day permitted period. If one takes 22nd December 2010 as the date on which the Secretary of State informed Mr Halligen of his decision, that period expired at midnight on 4th January 2011. Also on 29th December 2010, Mr Halligen himself wrote from prison by fax to the Home Office, asking them to accept this letter as notice & service of my intent to appeal that decision, and adding that My solicitors have been duly instructed and this letter is only necessitated by the imposed due date of 4th January 2011 and my inability to make contact with them given the restrictions imposed by HMP Wandsworth. His apparent concern was justified, since his solicitors let him down. It was only on 5th January 2011 that they sent the notice of appeal to the Crown Prosecution Service by fax and to the Home Office by post, reaching the latter on 6th January 2011. On 25th February 2011 the Treasury Solicitor wrote stating that there would be an application to have the appeal dismissed accordingly. In the ensuing High Court proceedings and before the Supreme Court, Mr Halligen has been represented by different solicitors to those to whom reference has been made in this paragraph. The High Court on 19th April 2011 accepted it had no jurisdiction to hear Mr Halligens appeal. Applying Mucelli Stadlen J, giving a judgment with which Laws LJ agreed, rejected a submission that the court had power to dispense with service. The High Court rejected a submission that Mr Halligens letter dated 29th December 2010 constituted or purported to constitute a notice of appeal to the Secretary of State. It rejected a submission that, assuming that the fax of 22nd December 2010 was sent at 16.48 (rather than 15.48), the Secretary of State should be treated as having informed Mr Halligen of her decision only on 23rd December 2010, with the result that the fax sent to the Crown Prosecution Service on 5th January 2011 would have been in time. This submission was advanced on the basis that it was only open to the Secretary of State to inform someone of an extradition decision within normal working hours, which could in turn be regarded as ending at 16.30, by analogy with CPR 6.26, governing documents to be served in accordance with the CPR or any Practice Direction. Finally, it rejected more general submissions that the court should under section 3 of the Human Rights Act 1998 read the mandatory requirements of section 108(4) of the 2003 Act as subject to an implied qualification and/or to the power of relief contained in CPR 3.10, in order to cater for the large number of public holidays that occurred during the relevant 14 day period and/or to avoid the loss of the right of appeal which would otherwise follow from Mr Halligens solicitors failings. Nevertheless Stadlen J commented (para 31): It would seem to offend basic principles of fairness that a person served with a notice of extradition should be deprived of a statutory right of appeal through no fault of his own. The first question is whether the Supreme Court should apply or decline to follow the Houses decision in Mucelli. Lord Rodgers dissenting approach in that case was that all that the statute required was filing, and not service, within the statutory period. I understand the attraction of preferring this dissenting approach, in so far as to do so would enable all the current hard cases to be resolved quite easily in the appellants favour. That would not itself be a good reason for adopting such an approach. It would also not resolve other hard cases, for example those which could well arise if a negligent solicitor failed to file notice of appeal with the court within the permitted period, or if a prison riot or a defendants collapse and illness following receipt of information about an extradition decision prevented him giving any instructions to lodge notice of appeal (see in this connection para 70 of Lord Neubergers speech in Mucelli). Further, it would not address the very real considerations which led the majority in Mucelli to their decision. The structure of the relevant sections, with the distinctions drawn between appealing, or bringing an appeal, to the High Court and giving notice of an appeal within the relevant permitted periods, is itself difficult to reconcile with any conclusion that some form of notice to the respondents is not required (a point to which Lord Neuberger referred at para 65). I would not therefore depart from Mucelli in so far as it requires not merely filing of an appeal, but also some form of notice of an appeal being given to the respondents, both within the permitted period. The question remains what form of notice of an appeal is required. In Mucelli the argument and majority judgments proceeded on the basis that what was required was service of the notice of appeal. It was however recognised, and was one plank of Lord Rodgers dissent, that in Scotland the requirement is that a note of appeal should be served (necessarily in draft) before lodging with the court (Mucelli, para 19). Mucelli concerned the question whether the statute (as opposed to the rules) required notice of an appeal to be given to all respondents within the permitted period. The House spoke of a statutory requirement of service. But the question what sort of notice was required by the statute (as opposed to the rules) was not the focus of decision. The statute requires notice of an appeal to be given in accordance with rules of court, so any failure to comply with the rules of court requires the appellant to seek relief from the court to cure the irregularity. But this does not answer the question what constitutes giving notice of an appeal to the respondents which, if not in accordance with the rules, nonetheless satisfies the statutory requirement and is capable of being cured. In my view, a generous view can and should be taken of this, bearing in mind the shortness of the permitted period and the fact that what really matters is that an appeal should have been filed and all respondents should be on notice of this, sufficient to warn them that they should not proceed with extradition pending an appeal. This should not however be taken as a licence to appellants to give informal notices of appeal. Any potential appellant serving anything other than a complete copy of the sealed Form N161 will need to seek and will depend upon obtaining the courts permission to cure the position under the rules. However, it follows from the foregoing that I cannot agree with Laws LJs reasoning in the cases of Lukaszewski and Pomiechowski. To have any prospect of success an appeal must at some point be supported by grounds. Rules may provide that such grounds must be stated or summarised in the appeal notice, and do in fact do so: CPR 52.4, read with note 52.4.4, prescribed form N161 section 6 and Practice Direction Appeal, para 3.2 at 52PD.5. Non constat however that a purported notice of appeal is a nullity unless accompanied from the outset by grounds. If, contrary to rules of court, it is not, that is an irregularity, but one which can in an appropriate case be cured under CPR 3.9 and 3.10. This is the position in principle. As a matter of practice also, there is no attraction in a conclusion whereby a notice without any grounds would be a nullity incapable of grounding any appeal, whereas a notice with palpably inadequate grounds would be merely irregular and capable of cure by amendment. The front page of the notices of appeal returned by the court and served by fax in the cases of Lukaszewski, Pomiechowski and Rozanski showed the relevant High Court references and stamps with the dates of filing as well as the names and addresses of the appellants and the respondent Polish court. The subsequent pages which were not returned or served identified matters such as the decision appealed (though in current extradition practice this would be a decision of the Westminster Magistrates Court), its date, the grounds and a statement of belief. The irregularity involved in their absence was capable of cure, and on the present facts certainly merited this. The Crown Prosecution Service can have had no difficulty in identifying the decision being appealed, and it would be disproportionate if the practice followed by the court and the prison Legal Services Department should lead to these appellants losing any right of appeal. I would therefore allow the appeals in all three Polish cases, and remit the appeals against the relevant extradition decisions to the High Court to be heard there. The position in Halligen is more problematic. Again his notice of appeal was filed with the court in time, but notice was required to both the Secretary of State and the Crown Prosecution Service. Taking the Secretary of State first, Mr Halligen has to rely on his letter dated 29th December 2010, which he asked the Home Office Extraditions Section to accept as notice & service of my intent to appeal. In terms of the rules, this was a highly irregular notice of any appeal, and, although it was dated the same date as his solicitors in fact filed notice of appeal with the court on his behalf, it was framed as notice of my intent to appeal, rather than as notice of an actual appeal. Nonetheless, the statute is capable of embracing the Scottish practice, whereby a draft note of an appeal is served before being lodged with the court. It follows that notice of an intent to appeal must be within the statutory language. I would regard Mr Halligens letter as notice to the Secretary of State of an appeal within the statute, albeit that the letter was highly irregular in terms of the rules. Provided it counts as a notice within the statute, the court is able to cure the irregularity if it thinks fit. The circumstances again militate strongly in favour of doing this. However, Mr Halligen faces the further difficulty that he has to show that notice of an appeal was given to the Crown Prosecution Service. The first submission made on his behalf in this connection is that the Secretary of State informed him on 23rd rather than 22nd December 2010. Like the High Court, and for the same reasons, I am unable to accept this submission. Making the assumption in Mr Halligens favour, in the absence of any evidence either way, that the relevant fax was timed at 16.48 rather than 15.48 on 22nd December 2010, there is no basis for applying, directly or by analogy, CPR 6.26 which only governs documents to be served in accordance with the CPR or any Practice Direction. I add that, even if it were relevant (which it is not in my view) to consider whether the notice was transmitted at an hour when it would be expected to come to the attention of someone responsible in the receiving solicitors firm, there would be no basis for treating 16.48 as not being such an hour. Indeed, as far as anyone knows, the fax was immediately read and addressed, and some support for this may be found in the dating of the grounds in the notice of appeal on the next day (23rd December 2010). It was also faintly submitted that the fourteen day period should be extended by reference to the large number of public holidays occurring during it. But, contrary to the situation considered by Lord Neuberger in Mucelli at paras 83 84, the last day of the fourteen day period was not a public holiday. Lord Neubergers approach allows for the human propensity to think about things at the last moment, but I do not think that it should be extended to situations where the last moment is a business day on which the intended appellant could have filed and served a notice of appeal. It follows that no notice of an appeal was given to the Crown Prosecution Service within the permitted period, and Mr Halligens appeal is on its face impermissible as against both respondents. It is therefore necessary to consider whether the apparently inflexible time limits for appeals in the 2003 Act are subject to any qualification or exception. The appellants in the cases of Lukaszewski, Pomiechowski and Rozanski have in particular sought to rely on article 5(4) of the Human Rights Convention, read with section 3 of the Human Rights Act 1998. Section 3 requires the court, so far as it is possible to do so, to read the relevant sections in a way which is compatible with the Convention. Article 5(4) reads that Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. The appellants submit that, in so far as the 2003 Act provides rights of appeal, such rights cannot consistently with article 5(4) be made subject to limitations which restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired and that any such restriction must pursue a legitimate aim and there must be a reasonable relationship of proportionality between the means employed and the aim sought to be achieved: Tolstoy Miloslavsky v United Kingdom (1995) 20 EHRR 442, para 59. Tolstoy was a case concerning appeals in a context to which Article 6(1) applied, but the appellants in invoking article 5(4) rely by analogy upon the case law under article 6(1). The difficulty which these appellants face in relying upon article 5(4) is that their grievance relates to the extradition decision, rather than the fact, incidental to that decision, that they were remanded in custody pending extradition. In MT (Algeria) v Secretary of State for Home Department [2009] UKHL 10; [2010] 2 AC 110, the House was concerned with challenges to deportation decisions upheld in partly closed proceedings before the Special Immigration Appeals Tribunal (SIAC). The appellants were by reason of such decisions detained with a view to deportation, and submitted on that basis that the proceedings before SIAC were subject to article 5(4). The House did not accept the submission. Lord Phillips noted that the European Court of Human Rights had held in Chahal v United Kingdom (1996) 23 EHRR 413 that the lawfulness of the detention of a person with a view to deportation did not depend upon whether the underlying decision to deport could be justified, and that the appellants had not made an independent challenge of [sic] his detention as opposed to the decision to deport him (paras 89 90). Lord Hoffmann noted, at para 173, that the European court in Chahal had decided that an alien who was detained pending deportation was entitled by virtue of article 5(4) to a substantial measure of procedural justice in proceedings to determine the lawfulness of his detention (paragraph 131) but not to a judicial tribunal to review whether the underlying decision to expel could be justified under national or Convention law (paragraph 128). Lord Hope and Lord Brown and I all expressed our agreement with these parts of Lord Phillips and Lord Hoffmanns speeches (paras 226, 252 and 262). In Chahal, para 128, the European Court in fact said this: 128. The Court refers again to the requirements of Article 5 para. 1 (article 5 1) in cases of detention with a view to deportation (see paragraph 112 above). It follows from these requirements that Article 5 para. 4 (article 5 4) does not demand that the domestic courts should have the power to review whether the underlying decision to expel could be justified under national or Convention law. The present appellants suggest that the conclusion and reasoning in MT (Algeria) requires reconsideration in the light of other authority in which article 5(4) has been relied upon as indicating that a court must have jurisdiction to consider whether an extradition decision involves an abuse of process. In R (Kashamu) v Governor of Brixton Prison [2002] QB 887, the Divisional Court (Rose LJ and Pitchford J) was faced with a series of pre Human Rights Act decisions at the highest level: Atkinson v United States of America [1971] AC 197, R v Governor of Pentonville Prison, Ex p Sinclair [1991] 2 AC 64 and In re Schmidt [1995] 1 AC 339. These cases had held that, despite the development in other fields of a general power on the part of a court to intervene on the grounds of abuse of process, any challenge on such grounds to the lawfulness of a decision ordering a persons extradition and detention with a view to extradition was a matter for the Secretary of State rather than the courts: the courts could become involved at most only on a subsequent application for judicial review of the Secretary of States decision. In Kashamu the Divisional Court relied upon section 6(1) of the Human Rights Act 1998 and upon article 5(4) to hold that such decisions could no longer be applied, and that it was, under schedule 1 to the Extradition Act 1989, incumbent on the district judge to consider whether there had been abuse of process rendering the detention unlawful under article 5(4), rather than to leave this issue for a minister to consider. The abuse of process alleged is only briefly outlined in relation to one of the three persons concerned in Kashamu. In relation to him it consisted of a prior arrest, conceded to have been irregular due to non disclosure (para 11). It seems clear that the abuse asserted would have affected not only any detention pending extradition but also, more fundamentally, any possibility of extradition. Under para 6(1) of Schedule 1 to the Extradition Act 1989, the district judge in Kashamu had had the same powers, as near as may be, . as if the proceedings were the summary trial of an information against him for an offence committed in England and Wales. On a summary trial, those powers would have included considering and applying article 5(4) in relation to any issue whether detention was justified. In these circumstances, I am not surprised that the Divisional Court held that the district judge had the power to investigate the possibility of abuse, which earlier authority had confined to the High Court by way of judicial review. The decision in Kashamu was followed and approved by the Privy Council in Fuller v Attorney General of Belize [2011] UKPC 23. There was in Fuller no equivalent provision to para 6(1) to Schedule 1 to the Extradition Act 1989, and the Board simply treated article 5(4) and its Belizean analogue, section 5(2)(d) of the Constitution, as applicable to detention for the purpose of extradition. As the Board made clear the abuse alleged went, in that case also, to the extradition as much as to any prior detention: paras 5 and 53 54. Indeed, Mr Fuller had been released on bail, although it is established for the purposes of a challenge to extradition under domestic law that an applicant for habeas corpus is to be treated as effectively in custody, even if released on bail: R v Secretary of State for the Home Department, Ex p Launder (No 2) [1998] QB 994, 1000G 1001G and 1011G H. Where detention and the extradition proceedings as a whole stand and fall together, according to whether or not they involve an abuse of process, then Fuller suggests that article 5(4) may be an effective means by which a root and branch challenge to extradition may be pursued. The decision in MT (Algeria) was not however cited in Fuller, and both Kashamu and Fuller were concerned with a question whether the previous restriction on an extradition courts ordinary power to restrain proceedings conducted in abuse of process should continue to be recognised. It is unsurprising that the courts should conclude that this limitation was no longer appropriate. There is no suggestion of any abuse of process at the root of the present extradition proceedings. The present appeals concern the single question whether proceedings to challenge an extradition decision are subject to the procedural guarantee contained in article 5(4). Proceedings to challenge an extradition decision are capable of raising a whole range of issues which have nothing to do with abuse of process or, indeed, with the question whether the person concerned is actually detained in the sense clearly envisaged in article 5(4). For example, they may raise questions whether the alleged offence is an extradition offence (section 10), whether extradition is barred by the rule against double jeopardy, extraneous considerations, the passage of time, age, hostage taking considerations, speciality, earlier extradition to the United Kingdom or earlier transfer to the International Criminal Court (sections 11 to 19A) and whether extradition would be compatible with the Convention rights within the meaning of the Human Rights Act 1998 (section 21). The reasoning in Kashamu and Fuller does not suggest, or justify a conclusion, that all such questions engage the procedural guarantee contained in article 5(4). This is so whether the person concerned is in custody or whether, even if he is not, he is to be treated as if he were for the domestic law purposes of a challenge to the proceedings by writ of habeas corpus. I do not therefore consider that either Kashamu or Fuller affects the careful distinction drawn by the European Court of Human Rights in Chahal between challenges to detention and to the underlying decision to remove an alien from the jurisdiction. The same careful distinction was followed in MT (Algeria), which in my view governs the present situation of a challenge made essentially to an extradition decision. I would therefore hold that article 5(4) did not apply and that the present appellants were not entitled to a judicial decision under article 5(4). Article 5(4) is not however the only potential string in the appellants bow. Mr Halligen also invokes article 6(1). The respondent, the Secretary of State, in reply submits that it is clear that article 6(1) has no application to decisions to expel or extradite. She cites a number of decisions of the European Court. H. v Spain (Application no. 10227/82) concerned an American citizen whose extradition from Spain was sought by the United States and who complained that he had had inadequate legal representation and interpretation before the Audiencia Nacional. The Commission held the complaint inadmissible on the ground that extradition proceedings do not involve the determination of a criminal charge within article 6(1), because in this context the word determination involves the full process of the examination of an individuals guilt or innocence of an offence. E.G.M. v Luxembourg (Application No 24015/94) concerned a Colombian national whose extradition from Luxembourg was sought by the United States. He complained that the extradition proceedings in Luxembourg violated the principle ne bis in idem and his rights of defence. The Commission held that the former principle was not guaranteed by the Convention, in the context of different criminal proceedings in different states, and that the rights and freedoms recognised in the Convention do not include any right not to be extradited. It referred in the latter connection to a prior statement to this general effect in G.K. and B.J.F. v The Netherlands (Application No 12543/86), based in turn on a similar general statement in X v Belgium (Application No 7256/75). Another case in which a similar statement appears is Salgado v Spain (Application No 65964/01). These were all again cases concerning aliens, in the first and third complaining that he would be ill treated in the requesting country and in the second that his extradition violated the terms of an extradition treaty. Lastly, the Commission in E.G.M. v Luxembourg referred to its established case law whereby the words determination . of a criminal charge . relate to the full process of the examination of an individuals guilt or innocence, and not merely to the process of determining whether or not a person may be extradited to another country, citing H v Spain and Kirkwood v United Kingdom (Application No 10479/83), (1984) 37 DR 158. In Kirkwood the applicant, a United States national, claimed that the proceedings for his extradition from the United Kingdom to the United States infringed article 6(3)(d), because he was not permitted to cross examine the witnesses against him in the United Kingdom. The Commission held that, although the tasks of the Magistrates' Court included the assessment of whether or not there was, on the basis of the evidence, the outline of a case to answer against the applicant and [t]his necessarily involved a certain, limited, examination of the issues which would be decisive in the applicant's ultim[at]e trial, nevertheless, these proceedings did not in themselves form part of the determination of the applicant's guilt or innocence, which will be the subject of separate proceedings in the United States which may be expected to conform to standards of fairness equivalent to the requirements of article 6, including the presumption of innocence, notwithstanding the committal proceedings. In these circumstances the Commission concluded that the committal proceedings did not form part of or constitute the determination of a criminal charge within the meaning of Article 6 of the Convention (para 9). The House of Lords cited and applied para 9 of the Commissions ruling in Kirkwood, when rejecting similar claims to rely on article 6(3)(d) by the appellants in R (Al Fawwaz) v Governor of Brixton Prison [2001] UKHL 69 [2002] 1 AC 556. In Maaouia v France (2001) 33 EHRR 42, a Tunisian citizen sought to resist his exclusion from France on the ground that the length of the proceedings had been unreasonable and excessive. He failed emphatically, for reasons which emphasised his position as an alien. The Court said: 37. The Court therefore considers that by adopting Article 1 of Protocol No.7 containing guarantees specifically concerning proceedings for the expulsion of aliens the States clearly intimated their intention not to include such proceedings within the scope of Article 6(1) of the Convention. 38. In the light of the foregoing, the Court considers that the proceedings for the rescission of the exclusion order, which form the subject matter of the present case, do not concern the determination of a "civil right" for the purposes of Article 6(1). The fact that the exclusion order incidentally had major repercussions on the applicant's private and family life or on his prospects of employment cannot suffice to bring those proceedings within the scope of civil rights protected by Article 6(1) of the Convention. 39. The Court further considers that orders excluding aliens from French territory do not concern the determination of a criminal charge either. In that connection, it notes that their characterisation within the domestic legal order is open to different interpretations. In any event, the domestic legal order's characterisation of a penalty cannot, by itself, be decisive for determining whether or not the penalty is criminal in nature. Other factors, notably the nature of the penalty concerned, have to be taken into account. On that subject, the Court notes that, in general, exclusion orders are not characterised as criminal within the Member States of the Council of Europe. Such orders, which in most States may also be made by the administrative authorities, constitute a special preventive measure for the purposes of immigration control and do not concern the determination of a criminal charge against the applicant for the purposes of Article 6(1). The fact that they are imposed in the context of criminal proceedings cannot alter their essentially preventive nature. It follows that proceedings for rescission of such measures cannot be regarded as being in the criminal sphere either. 40. The Court concludes that decisions regarding the entry, stay and deportation of aliens do not concern the determination of an applicant's civil rights or obligations or of a criminal charge against him, within the meaning of Article 6(1) of the Convention. In Mammatkulov and Askarov v Turkey (2005) 41 EHRR 494, in the context of complaints about the fairness of Turkish extradition proceedings, the European Court reiterated, at para 82, that decisions regarding the entry, stay and deportation of aliens do not concern the determination of an applicant's civil rights or obligations or of a criminal charge against him, within the meaning of Article 6(1) of the Convention. This examination of Strasbourg case law shows that the Commission and Court have stood firm against any suggestion that extradition as such involves the determination of a criminal charge or entitles the person affected to the procedural guarantees provided in the determination of such a charge under article 6(1) or 6(3). The cases involved are all also cases involving the extradition of aliens. The last two decisions emphasise that proceedings for the extradition of aliens do not involve the determination of any civil rights within the meaning of article 6(1). By the same token they underline a potential difference in this respect between aliens and citizens. Both in international law and at common law British citizens enjoy a common law right to come and remain within the jurisdiction, and Mr Halligen is such a citizen. Blackstone (Commentaries on the Laws of England 15th ed (1809) vol 1, p 137) stated: But no power on earth, except the authority of Parliament, can send any subject of England out of the land against his will; no, not even a criminal. This passage was cited and approved by Lord Hoffmann in R (Bancault) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61; [2009] AC 453, para 44. In R v Bhagwan [1972] AC 60, 77G Lord Diplock spoke of the common law rights of British subjects . to enter the United Kingdom when and where they please and on arrival to go wherever they like within the realm. In Case 41/74 Van Duyn v Home Office [1975] Ch 358, para 22, the European Court of Justice recognised that: it is a principle of international law, which the EEC Treaty cannot be assumed to disregard in the relations between member states, that a state is precluded from refusing its own nationals the right of entry or residence. The principle is the necessary corollary of a states right (subject to obligations undertaken by e.g. the Geneva Refugee Convention and the European Convention on Human Rights) to refuse aliens permission to enter or stay in its territory. Were it otherwise, the Flying Dutchman would be no fleeting phantom. In these circumstances, Mr Halligen enjoyed a common (or civil) law right to enter and remain in the United Kingdom as and when he pleased. The next question is whether proceedings under the Extradition Act 2003, in that they may affect his freedom to remain in the United Kingdom at least for the duration of American criminal proceedings, involve the determination of that civil right. The 2003 Act has the authority of Parliament, and to that extent Mr Halligens right to remain in the United Kingdom is potentially qualified. But under the Act it is only through domestic extradition proceedings that this right can be affected and suspended for the purpose and period of any American proceedings and of any sentence which might thereafter be passed on him, if found guilty. In so far as it may be suspended, the extradition proceedings determine whether Mr Halligen may continue to enjoy his common law right for whatever proves to be the relevant period. A claim to extradite him does not involve the determination of a criminal charge, and he is not entitled to any full process of examination of his guilt or innocence, or to the procedural guarantees which would attend that. But he is entitled to a fair determination as to his common law right to remain within the jurisdiction. In these circumstances, it follows in my view that the extradition proceedings against Mr Halligen fall within article 6(1). In so far as the proceedings involve under the statute a right of appeal against any extradition decision, article 6(1) also requires that it be free of limitations impairing the very essence of the right, pursue a legitimate aim and involve a reasonable relationship of proportionality between the means employed and the aim sought to be achieved in accordance with the standard identified in Tolstoy Miloslavsky v United Kingdom, cited in para 22 above. I cannot regard the provisions regarding appeals contained in the 2003 Act as meeting the standard set in Tolstoy Miloslavsky. Indeed I note that the Review of the United Kingdoms Extradition Arrangements of 30 September 2011 identified the time limits as an unsatisfactory feature about the appeals process, and mentioned a number of trenchant judicial criticisms, some already set out, as well as the particular difficulties posed for those remanded in custody. In the end, however, after identifying as possible mechanisms for alleviating potential injustice either extending the time limit for Part 1 from seven to fourteen days or giving the court a discretion to extend the time limit in the interests of justice, the Review said that On the whole we prefer the former, as this is an area in which certainty and finality is important. Finality and certainty are important legal values. But, although the cases to date may not be large in absolute numerical terms, they indicate that neither finality nor certainty has been achieved to date. Even on the more relaxed view of the statutory conditions which I consider appropriate, the statute will be capable of generating considerable unfairness in individual cases, unless some further relief is available. More importantly, it is not sufficient under article 6(1) if in most or nearly all cases the right of appeal can be or should be capable of being exercised in time. The very essence of the right may be impaired in individual cases and there may still be no reasonable relationship of proportionality between the means employed and the aim sought to be achieved. It has been held, in the public law context of removal from the jurisdiction of an alien, that a litigant must answer for the failings of his legal advisers, with the result that he was unable to obtain the reopening of an adjudicators decision on the ground of such advisers negligent failure to inform him of the hearing: R v Secretary of State for the Home Department, Ex p Al Mehdawi [1990] 1 AC 876. Any other decision would, it was said, come at the cost of opening such a wide door which would indeed seriously undermine the principle of finality in decision making: per Lord Bridge, at p 901E. In Ex p Al Mehdawi there was however a residual discretion in the Secretary of State to refer the matter back to an adjudicator. In contrast, in an asylum context where no such residual discretion existed, the Court of Appeal in FP (Iran) v Secretary of State for the Home Department [2007] EWCA Civ 13 held ultra vires immigration rules deeming a party to have received notice of a hearing served on the most recent addresses notified to the relevant tribunal and requiring the tribunal to proceed in the partys absence if satisfied that such notice had been given. The solicitors acting for the asylum seekers in FP (Iran) had failed to give the tribunal new addresses to which the asylum seekers had been moved by the National Asylum Support Service. Distinguishing Ex p Al Mehdawi, the Court of Appeal held that there was no universal surrogacy principle which (reformulated) rules would have to depart from in order to operate justly (para 46). The rules were framed so as to be productive of irremediable procedural unfairness. Both the appellants were among those affected by this deficiency, because both have lost the opportunity to be heard through the default of their legal representatives and not through their own fault (para 48). This decision (reached in the context of aliens) turned on common law principles regarding access to justice, though reference was made by analogy to the position under the European Convention on Human Rights. The position is a fortiori in so far as article 6(1) is directly applicable in Mr Halligens case. It is clear that the statutory provisions regarding the permitted periods for appeals may in individual cases impair the very essence of the right of appeal. The previous judicial expressions of concern are eloquent about the potential and actual unfairness of the position in which prisoners find themselves in trying to meet the statutory requirements, with such aid as the prison legal services department or legal advisers can, under difficult conditions, provide. The problems of communication from prison with legal advisers in the short permitted periods of seven and fourteen days are almost bound to lead to problems in individual cases. It is no satisfactory answer that a person wrongly extradited for want of an appeal as a result of failings of those assisting him might, perhaps, be able to obtain some monetary compensation at some later stage. Strict application of the surrogacy principle would be potentially unjust. I am not persuaded that the interests of finality and certainty outweigh the interests of ensuring proper access to justice by appeal in the limited number of extradition cases where this would otherwise be denied. There would not be a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. What then does this mean for Mr Halligen? The opposed possibilities are, on the one hand, that the statute can be read in a manner consistently with the Convention rights, pursuant to the courts duty under section 3 of the Human Rights Act so to read it so far as it is possible to do so, and, on the other hand, that the statutory time limits are simply incompatible with article 6(1). The former solution may involve reading in words, provided that they are compatible with the underlying thrust of the legislation and do not go against the grain of the legislation: Ghaidan v Godin Mendoza [2004] UKHL 30, [2004] 2 AC 557, paras 33, per Lord Nicholls, and 121, per Lord Rodger; and see R v A (No 2) [2001] UKHL 25, [2002] 1 AC 45, where statutory restrictions on cross examination were read as subject to a further implied exception to enable a fair trial under article 6(1), and Connolly v Director of Public Prosecutions [2007] EWHC 237 (Admin), [2008] 1 WLR 276, para 18, where the High Court was prepared to read a statutory prohibition on sending another person certain material as subject to an implied provision that this was not to apply where the prohibition would involve a breach of the senders Convention rights under article 10. In the present case, there is no reason to believe that Parliament either foresaw or intended the potential injustice which can result from absolute and inflexible time limits for appeals. It intended short and firm time limits, but can only have done so on the basis that this would in practice suffice to enable anyone wishing to appeal to do so without difficulty in time. In these circumstances, I consider that, in the case of a citizen of the United Kingdom like Mr Halligen, the statutory provisions concerning appeals can and should all be read subject to the qualification that the court must have a discretion in exceptional circumstances to extend time for both filing and service, where such statutory provisions would otherwise operate to prevent an appeal in a manner conflicting with the right of access to an appeal process held to exist under article 6(1) in Tolstoy Miloslavsky. The High Court must have power in any individual case to determine whether the operation of the time limits would have this effect. If and to the extent that it would do so, it must have power to permit and hear an out of time appeal which a litigant personally has done all he can to bring and notify timeously. The position of others who are not British citizens of the United Kingdom and do not enjoy the protection of article 6(1) is not, as it happens, relevant to the outcome of any of the appeals now before the Supreme Court. However, their position, as well as that of persons enjoying the protection of article 6(1), would, on the information before the court, appear to deserve attention. This includes specifically whether they are currently provided with meaningful and effective legal assistance in relation to the whole extradition process, including any appeal they may wish to bring. For the reasons I have explained, I would allow Mr Halligens appeal and remit his case, as well as those of Mr Lukaszewski, Pomiechowski and Rozanski (see paragraph 19 above), to the High Court for the hearing of all their four appeals against the relevant extradition decisions. LADY HALE I agree that these appeals should be allowed for the reasons given by Lord Mance. They have highlighted a number of aspects of the present law which may be thought unsatisfactory. First, section 26(4), section 103(9) and section 108(4) of the Extradition Act 2003 lay down tight deadlines within which the requested person must give notice of appeal against, respectively, an extradition order under Part 1 of the 2003 Act, a decision to send the case to the Secretary of State under Part 2, and the Secretary of States extradition order under Part 2. Sections 35 and 117 lay down tight deadlines within which the person must be extradited if no notice of appeal is given before the end of the permitted period. In Mucelli v Government of Albania [2009] UKHL 2, [2009] 1 WLR 276, therefore, the House of Lords proceeded on the assumption that, unless the appellant gave notice to the respondent(s) within the permitted period, the extraditing authorities would not know whether the clock had stopped. We now know that that assumption is incorrect, for two reasons. The first is that the respondent(s) to the appeals are not the extraditing authorities for this purpose. The respondents will be those acting on behalf of the issuing judicial authority (in Part 1) or the requesting authority and the Secretary of State (in Part 2). The extraditing authority is the Serious Organised Crime Agency (SOCA) in Part 1 and the Secretary of State in Part 2. So giving notice to the respondent(s) is not, in itself, sufficient for the extraditing authority to know that the clock has stopped. Secondly, the uncontradicted evidence of Mr Evans, solicitor for the first two appellants, is that Westminster Magistrates Court informs SOCA by email when an extradition order is made and that the High Court emails SOCA when an appeal is filed. That is what alerts SOCA to the fact that it is no longer obliged, or indeed entitled, to extradite the requested person within the required period. This undermines a substantial part of the reasoning of the majority in Mucelli at least in relation to Part 1 cases. The best point remaining is the linguistic difference between an appeal . may be brought in section 26(3), section 103(4), (7) and (8)(b), and section 108(4), and notice of an appeal . must be given in section 26(4), section 103(9) and section 108(4). But there is no magic in those words. Different terms are used for the process of bringing an appeal in the three different jurisdictions which make up the United Kingdom. In Lord Rodgers view, the draftsman has just chosen a familiar form of words for referring to the bringing of an appeal [14]. It would have been so easy for the draftsman to have said filed and served if that is what he had meant but he did not. Be that as it may, this court is not constituted to depart from the decision in Mucelli and there is no need for it to do so in the Polish cases. However, the new information does underline the fact that there is no good practical reason for the court to construe what is meant by giving notice to the respondents in a demanding way. The clock will have stopped, but if the rules about service have not been properly complied with, the court has power either to grant an extension or to impose sanctions, including the sanction of striking out the appeal, as appropriate. Secondly, however, the court does have to contend with Mucelli in the case of Mr Halligen. We can treat his letter to the Secretary of State as notice for this purpose, but we cannot treat his notice to Crown Prosecution Service as arriving in time. There are two possible ways of solving the problem, should we think this result to be unnecessary and unjust. One is to depart from Mucelli. For the reasons indicated earlier, we could conclude that it was not the intention of Parliament that there should be no jurisdiction to entertain an appeal in such circumstances. The other is to employ the obligation of conforming interpretation in section 3(1) of the Human Rights Act 1998 in cases where the ordinary interpretation produces results which are incompatible with the Convention rights of the requested person. Section 3(1) requires that So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights. As is now well established, this requires the court (and others) to read (and give effect to) legislation compatibly with the Convention rights even if this is not what, on ordinary principles of construction, Parliament intended, so long as it is possible to do so. The appellants and the Secretary of State consider that it is possible in this case. The respondents consider that it is not, and if (which they do not accept) the strict application of the time limit for service is incompatible, the only course would be a declaration of incompatibility under section 4 of the 1998 Act. The right of a person to enter and remain in the country of which he is a national is the most fundamental right of citizenship. The United Kingdom has signed but not ratified Protocol No 4 to the ECHR, article 3 of which makes this right crystal clear. But, as Lord Mance has demonstrated, it has been part of United Kingdom law for centuries. It is perhaps more questionable whether it counts as a civil right for the purpose of the right to a fair hearing in article 6(1) of the Convention. As originally conceived, this did not apply to the rights enforceable only in public law. But that limitation has been steadily eroded: see the jurisprudence discussed by Lord Hope in Ali v Birmingham City Council [2010] UKSC 8, [2010] 2 AC 39, [28] to [49]. And in any event, this right is not like a claim to a social security benefit (which is a civil right) or to a social service (which currently is not), for these can only be enforced as provided for by the statute or by judicial review. Should the need arise, this right could be claimed in ordinary civil proceedings against a person who was denying it. I therefore agree with Lord Mance that the extradition proceedings against Mr Halligen involve the determination of his civil rights for the purpose of article 6(1). I also agree that to insist upon the time limit for service in the particular circumstances of his case is a disproportionate limitation upon his right of access to the appeal process. I further agree that it is possible to read and give effect to section 108(4) and, it would necessarily follow, section 26(4) and section 103(9) in the manner which Lord Mance suggests at paragraph 39. However, it does seem to me unsatisfactory that we are taking this course, rather than the more straightforward course of departing from Mucelli. There is very good reason to think that the House decided Mucelli on a mistaken factual assumption. There were very good reasons, trenchantly expressed in Lord Rodgers dissenting opinion, to think that the intention of Parliament was to insist only on filing, rather than on service, of the notice of appeal before the deadline. For my part, I consider it more satisfactory to comply with the actual intention of Parliament than to resort to the obligation of conforming interpretation (whether under the European Communities Act 1972 or the Human Rights Act 1998). Resorting to section 3 of the 1998 Act, although two of the parties consider this possible, produces two distortions in the extradition process. It discriminates between nationals and aliens. It also discriminates between the requested persons and the requesting authorities, for the latter can have no convention rights which mandate a compatible interpretation. Thus section 28(4), section 105 (5) and section 110(5), which impose the same time limits upon appeals against discharge by the first instance court or by the Secretary of State, cannot be read down so as to forgive such trivial failures as these on the part of the requesting authorities. Thirdly, however, whichever of the above courses is taken in this case, recognition that the right of a citizen to remain in this country is a civil right for the purposes of article 6(1) of the ECHR leaves open the possibility that section 26(4) and also section 103(9) and section 108(4) would also have to be read down if the rigid time limits for the filing of a notice of appeal were to be held a disproportionate limitation on a citizens right of access to the appeal process. There was talk during the hearing of riots, strikes or fires at the prison to which the requested person was remanded making the service of notice impossible, but such extraordinary events might also make the filing of a notice of appeal impossible. As things currently stand, a requested person who is remanded in custody does not always have access to a lawyer who can protect his interests. While we know that HMP Wandsworth has a Legal Services Department staffed by prison officers who provide assistance, we do not know whether similar facilities are available to requested persons who are remanded to other prisons. We do know that, given the pace of proceedings, quite properly arguable grounds for resisting extradition or the execution of a European arrest warrant may not have been put before the district judge. I do not, of course, say that it would indeed be possible to read down the legislation in such circumstances, but merely that our decision in this case makes the argument possible. Had other members of the court been of the same mind, therefore, I would have allowed all these appeals, but for reasons other than those given by Lord Mance. But those reasons are not incompatible with the reasons which he gives and with which I am also content to agree.

Lukaszewski (L), Pomiechowski (P) and Rozanski (R) are Polish citizens who are each the subject of a European Arrest Warrant (EAW) issued by the Polish court. Each is wanted in order to serve an existing sentence. L is wanted, in addition, to stand trial on ten charges of fraud. The fourth appellant, Halligen (H), is a British citizen whose extradition is sought to the USA under Part 2 of the Extradition Act 2003 (the Act) to face allegations of wire fraud and money laundering. All four appellants were arrested and brought before Westminster Magistrates Court. L, P and Rs extradition were ordered on (respectively) 28th January 2011, 2nd March 2011 and 4th March 2011. Hs case was sent to the Secretary of State for her to decide whether H should be extradited. On 22nd December 2010, Hs extradition was ordered by the Secretary of State, and the order and a letter setting out the Secretary of States reasons were sent by post and fax (at either 15.48 or 16.48) to Hs solicitors on that same day. All four appellants were remanded in custody at HMP Wandsworth pending extradition. The permitted time period for giving notice of appeal against an extradition order was 7 days in the case of L, P and R, and 14 days in the case of H. L, P and R were each assisted by a prison officer working in the legal services department at HMP Wandsworth to complete a notice of appeal. The legal services department faxed the notices of appeal to the Administrative Court for filing and stamping, which faxed back a copy of the sealed front page to the legal services department. The legal services department then faxed to the Crown Prosecution Services (CPS), as legal representatives of the judicial authority of the state requesting surrender, a copy of the sealed front page together with a cover sheet. In the case of each of L, P and R, all this occurred within the 7 day permitted period. However, in each case, the CPS was not served with a full copy of the notice of appeal, sealed or unsealed, until after the 7 day time limit had expired. The High Court held it had no jurisdiction to hear the appeals. A notice of appeal had to be both filed and served within the non extendable permitted period, and must (a) identify the appellant, (b) identify the decision against which he seeks to appeal, and (c) set out at least the gist of the basis on which the appeal is sought to be presented. Accordingly, the purported notices of appeal were invalidly constituted and served out of time. Hs solicitors prepared a notice of appeal, attaching grounds of appeal, on 23rd December 2010. The notice of appeal was filed and stamped on 29th December 2011, well within the 14 day permitted period which expired at midnight on 4th January 2011. However, only on 5th January 2011 did Hs solicitors send the notice of appeal to the CPS by fax and to the Home Office by post (reaching the latter on 6th January 2011). H himself had written from prison by fax to the Home Office on 29th December 2010 asking them to accept the letter as notice & service of my intent to appeal that decision and stating that he had instructed solicitors for that purpose. The High Court held it had no jurisdiction to hear Hs appeal, that Hs letter of 29th December 2011 did not constitute a valid notice of appeal, and the Secretary of State should be treated as having informed H of her decision on 22nd December, not 23rd December, 2011, so that the purported notice of appeal was in any event served out of time. All four appellants appealed the decisions of the High Court to the Supreme Court. The Supreme Court allows all four appeals unanimously. Lord Mance gives the leading judgment of the Court. Lady Hale gives a separate concurring judgment. The requirement under the Act that a notice of an appeal be given within the relevant permitted period meant that it had to be filed in the High Court and served on all respondents to the appeal within such period (following the decision of the House of Lords in Mucelli v Government of Albania [2009] UKHL 2) [5], [17]. However, a generous view should be taken of this requirement, bearing in mind the shortness of the permitted periods under the Act and that what really matters is that an appeal should have been filed and that all respondents be on notice of this, sufficient to warn them that they should not proceed with extradition pending an appeal [18]. In the cases of L, P and R, the irregularity involved in the absence of pages following the sealed front page of their notices of appeal was capable of cure. The CPS, having received in time the sealed front page of each notice of appeal, can have had no difficulty in identifying the decisions being appealed. It would be disproportionate if the practice followed by the court and the prison legal services department should lead to the appellants losing their right of appeal [19]. The Court regards Hs letter as notice to the Secretary of State of an appeal within the Act, albeit that the letter was highly irregular in its form [20]. However, even if it is accepted that Hs solicitors only received the relevant fax from the Secretary of State at 16.48, there was no basis for deeming the fax to have been received the following day. It follows that no notice of an appeal was given to the CPS within the permitted period, and Hs appeal is on its face impermissible as against both respondents [21]. In these circumstances, the question for the Court is whether the apparently inflexible time limits for appeals within the Act are subject to any qualification or exception [22]. Under Article 6(1) of the Human Rights Convention, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law in the determination of his civil rights and obligations or of any criminal charge against him. The Court is satisfied that extradition does not involve the determination of a criminal charge [31]. However, H, as a UK citizen, enjoyed a civil right to enter and remain in the UK as and when he pleased [32]. Proceedings under the Act, in that they may affect Hs freedom to remain in the UK, at least for the duration of foreign extradition proceedings, involve the determination of that civil right [32]. It follows that the extradition proceedings against H fall within Article 6(1) [33]. In the case of a UK citizen, the statutory provisions concerning appeals can and should be read (pursuant to the obligation of conforming interpretation under section 3(1) of the Human Rights Act 1998) as being subject to the qualification that the court must have a discretion in exceptional circumstances to extend time for both filing and service, where such statutory provisions would otherwise operate to prevent an appeal in a manner conflicting with the right of access to an appeal process under Article 6(1). Accordingly, the Court allows all four appeals and remits each appeal against extradition to the High Court to be heard there [19], [41].

It is a common assumption that young people of succeeding generations become increasingly sophisticated and worldly wise. Certainly, the young people of today have access to a range of external experiences, particularly through social media, that would have been inconceivable even 20 years ago. But the street urchins of Dickens day were, arguably, just as knowing vis vis their elders, as are todays youth. The seeming sophistication or worldliness of todays children does not mean that they are not as inherently immature as have been children throughout the ages. Apparent social sophistication is not to be equated with a lack of naivet. Giving the appearance of being older than their years should not be confused with possession of mature judgment. Protection of our children from the consequences of their immaturity and the preservation of their innocence are just as vital as they have ever been. The young man who is the appellant in this case is now 18 years old. He was born on 16 July 1996. On 23 and 26 July 2010 two newspapers, the Derry Journal and the Derry News respectively, published an image of him. He was at that time barely 14 years old. These photographs had been published by the newspapers at the request of the police. The publication of the appellants photographs and those of others who had been involved in public disorder in Londonderry was part of a police campaign known as Operation Exposure which was designed to counteract sectarian rioting at what are called interface areas in parts of Derry. Interface areas are situated at the boundaries of parts of the city which are predominantly inhabited by one or other of the two main communities. The appellant argues that publication of photographs of him constituted a violation of his article 8 rights. The Divisional Court in Northern Ireland (Morgan LCJ, Higgins and Coghlin LLJ) dismissed his application for judicial review on 21 March 2013. Factual background Mr McGleenan QC, counsel for the Chief Constable, has described the factual background as convoluted and that is certainly not an exaggeration. The case made on the appellants behalf in the judicial review proceedings, by which he sought to challenge the legality of the police operation, was made largely through affidavits from his father. On 14 July 2010 the Derry Journal had published images of closed circuit television (CCTV) pictures which had been taken during serious rioting in Derry in July 2010. In the first of his affidavits, the appellants father claimed that these included images of his son. He also claimed that leaflets published and distributed by police on 16 August 2010 which again contained CCTV images of young people involved in rioting identified the appellant. When the application for leave to apply for judicial review was first heard, two particular images from the 14 July issue of the Derry Journal and the leaflets were stated by his counsel to be those of the appellant. It was later established that, not only were these not images of the appellant, he did not appear at all in that particular issue of the newspaper or in the leaflets. The appellant had been interviewed by police on 1 July 2010. He was questioned about his involvement in rioting on 24 May 2010 and 8 June 2010. He was shown CCTV footage of both incidents and he claimed to be able to identify himself from the footage of both incidents. He was also shown a booklet of some 115 photographs of persons involved in rioting on various dates in May and June 2010. These included the images contained in the leaflets which were later published by police on 16 August 2010. The appellant did not identify himself in any of these images. In light of the statement by counsel for the appellant at the leave hearing that the appellants image did appear in one of the photographs contained in the leaflet, he was interviewed again in relation to the incident portrayed in that photograph. During this second interview the appellant and his father were shown CCTV footage. As a result of this viewing, both concluded that, contrary to what had been said on his behalf at the application for leave to apply for judicial review, the appellant was not depicted in the image in the leaflet which had formerly been chosen as having identified him. So far as the image in the Derry Journal of 14 July 2010 was concerned, it was established that this was of someone else entirely. In sum, in neither of the particular images which counsel had told the court were of the appellant, was he in fact portrayed. Following the second interview, a further affidavit was prepared for the appellants father. It is claimed that this affidavit has been filed in the proceedings. Apparently, it has never been sworn, so it seems unlikely that it has actually been filed. In any event, in this affidavit, it was claimed that the appellants image appeared in issues of the Derry Journal and the Derry News published on 23 and 26 July 2010 respectively. Both issues contained the same photograph. The appellants father stated that the image came from video footage of an incident which he believed had occurred on 6 June 2010. It is now accepted by the respondent that the appellant is the figure shown in the photograph reproduced in these two issues of the newspapers but the appellants image was captured on 5 June rather than the sixth as the appellants father believed. The appellants father also claimed in this second affidavit that, during the interview on 1 July 2010, his son had identified himself as the child throwing stones in the photograph that was published in the Derry Journal and the Derry News on 23 and 26 July 2010. This is disputed by the respondent. In affidavits filed on his behalf, the interviewing officer has said that, although CCTV footage of events on 5 June had not been shown during the interview on 1 July 2010, the appellant and his father were shown the image later reproduced in the newspapers on 23 and 26 July but the appellant had not been identified at that stage. Indeed, formal identification of the appellant was not made as the person shown in the photograph published on those dates until 11 May 2011. By that time, the six month limitation period that applies to any charge that might have been preferred against the appellant had elapsed. Accordingly, no action was taken against him. The appellant was involved in offences other than those relating to the publication of his photograph. On 6 August 2009 he was arrested on a charge of riotous behaviour which had occurred on 13 July 2009 at Butchers Gate, Derry. This was dealt with by a restorative caution on 29 June 2011. He was also charged with two separate offences of riotous behaviour alleged to have occurred on 6 June and 8 June 2010 and with possession of an offensive weapon and attempted criminal damage on the latter date. A youth conference was directed by Public Prosecution Service on 16 December 2010. The appellant failed to engage with this and on 31 May 2011 it was decided that he should be prosecuted for these offences. The riotous behaviour charges were dealt with by a youth conference ordered by the court on 23 October 2012. The possession of offensive weapon and attempted criminal damage charges were not proceeded with. Operation Exposure Chief Inspector Chris Yates is the area commander of Police Service of Northern Ireland (PSNI) for the Foyle District of Londonderry. He has described how interface violence between the two communities in this district was a regular occurrence during periods of heightened tension such as when parades were taking place. The number of incidents of violence decreased significantly during the period from 2006 to early 2009. But in the early part of 2009 it was observed that the number of such incidents at one particular location, the Bishop Street/Fountain estate interface, had increased substantially. This was of particular concern to the police because there is a residential home for the elderly and vulnerable in the vicinity. Inter community violence in the area again became a regular occurrence, flaring up significantly during two parades in July and August. The level of violence increased yet again during May and June 2010. It was more serious and prolonged than any experienced by Mr Yates since he had begun service in the Foyle district. Intelligence received by police suggested that vigilante groups were being formed on one side and dissident republicans were encouraging violence on the other side. Community representatives on the nationalist side informed police that they had lost influence over the youths in their area; indeed they had been confronted on occasions by dissident republican elements. Police officers on the ground reported on the absence of community representatives from either side during the disturbances. The ongoing violence drained police resources and, in the estimation of Mr Yates, threatened to undermine community confidence in PSNIs response. Indeed, police were criticised for having failed to deal with the continuing disorder. The issue was raised at a meeting of the district police partnership on 16 June 2010. This is composed of, among others, local councillors and community representatives. The ongoing violence was discussed at the meeting and general concern was expressed. The matter was discussed again on 1 July 2010 when Chief Inspector Yates was present at a meeting of the City Centre Initiative. This was attended by representatives of various political parties and community groups. Everyone present agreed that the violence at the interface had to be brought to an end. The chief inspector informed those present that the young people engaged in the recent public disorder had to be identified in order to ensure an effective response to the interface violence. He produced a booklet of photographs and asked all who were present to inspect these and to help him identify those captured in the images. He said that if the persons involved were not identified at the meeting or at later private meetings which he offered to hold with any of the representatives present, he would consider having them published in the local press. None of those depicted in the photographs was identified. The chief inspector was asked to defer placing the images in the newspapers and he agreed to do so for a period of two weeks. In the event, he was not contacted by anyone who had attended the meeting and he proceeded to arrange for the publication of the photographs in the local press. The final decision as to whether particular images should be released to the press or contained in leaflets to be distributed by the police fell to Temporary Superintendent Sam Donaldson. In an affidavit filed on behalf of the respondent, Mr Donaldson explained how the strategy of seeking public assistance in identifying offenders from still images and CCTV footage had been developed in G police district in 2008 and 2009. (Foyle is in G police district). The strategy had proved to be a particularly effective tool in identifying offenders involved in interface violence and acts of public disorder. What follows in the next six paragraphs is Mr Donaldsons account of how the strategy is implemented. Operation Exposure is a system of investigation of crime which comprises an elaborate series or stages of inquiry. The first stage involves the investigating officer inspecting the details of the individual offence which have been entered on the police database. At the next stage the officer follows what might be described as conventional lines of inquiry. This can include the recording of statements from injured parties and witnesses, the interviews of suspected offenders and, if the state of the evidence justifies it, the preparation of a prosecution file. When part of the criminal inquiry involves taking possession of CCTV or still photographic images, the investigating officer is not automatically entitled to make use of these to pursue the inquiry. He or she is required to ensure that all reasonable steps have been taken to identify a suspect by a less intrusive means. These may include door to door inquiries; forensic examination of items of evidence; circulation of details among other police officers; intelligence research; and liaison with other police services including An Garda Siochana. When it is clear that all lines of reasonable inquiry have been exhausted, the investigating officer is authorised to request the CCTV unit to develop the best image from the available footage. This is then uploaded to police internal electronic briefing pages in order to facilitate identification of suspects. All serving police officers have access to these pages. As part of the Operation Exposure process, the briefing pages carry photographs of the persons that the police wish to identify, together with details of the incident under investigation. Officers are reminded to speak to the Operation Exposure officer if they are able to identify anyone from the images. Particular attention is paid to the role of neighbourhood officers because of their local knowledge and the greater likelihood of their being able to identify individuals. These officers are regularly briefed and it is the responsibility of the Operation Exposure officer to ensure that this particular line of inquiry has been pursued before proceeding to the next stage. If it proves impossible to identify a suspect by internal police procedures, the question of releasing images to outside agencies is considered. The Operation Exposure officer must ensure that all other lines of inquiry have been fully pursued before seeking authorisation to release the images. A senior officer such as Mr Donaldson is briefed on the circumstances of the case, the lines of inquiry which have been pursued and the steps that the investigating officer has taken in relation to the identification of the suspect. The senior officer is also informed about the location of the incident under investigation; the injuries, if any, involved in the suspected offence; the ages of the injured parties and the estimated age of the offender. All of this is recorded in an official journal, together with any queries that may have been raised, for instance, about whether all necessary steps have been taken to identify a suspect by some other means. Consideration of the reasons in favour of and those against the release of a specific image is also recorded. All these steps are prescribed by an Operation Exposure guidance document which is modelled on national guidance issued by the Association of Chief Police Officers. In accordance with specific provisions in the guidance documents, human rights issues are also considered. The authorising officer requires to be satisfied that not only have all other reasonable lines of inquiry been pursued but that the release of the image will have a positive effect on the investigation. The proportionality of an order for release is also considered this involves considering whether it is in the public interest that it be released; the risk to the community should the individual depicted in the image remain unidentified; the frequency of the type of offence involved; and the consequences of it continuing to be committed. Operation Exposure was not specifically designed as a general aid in the investigation of crimes committed by juveniles but where it is clear that the image to be released is that of a young person, particular care is taken and greater weight is given to the potential implications of the release of the image. Inquiry is made as to whether liaison has taken place with the local police officer who has a particular knowledge of young people in his area (the police youth diversion officer). Consideration is given to whether there is a risk to the young person from the community (in other words, whether he or she might be the target for a so called punishment beating). The apparent age of the young person is taken into account. Unfortunately, it is the police experience that some young people involved in interface violence may be below the age of criminal responsibility. Where the authorising officer considers that this might be the case, release of the image will not be authorised. Finally, a decision whether to release the image of a young person will involve consideration of where the best interests of the child lie. The authorising officer addresses this question in terms of whether it would be more beneficial to allow the young person to remain unidentified with the possibility that he or she would continue in the unlawful conduct or that it is better to intervene, in order to protect the young person from the dangers associated with involvement in public disorder. This examination takes place against the background that the preferred choice of the police service is to deal with an offending child in ways that do not involve the criminal justice system. The most common result of a child being identified as having taken part in this type of offending is what are described as lower level interventions such as parent/guardian involvement or youth diversion opportunities. Mr Donaldson stated that these are often the desired, and most appropriate outcome. The circumstances in which the appellants image came to be published were explained by Inspector Jon Burrows. He described the sectarian violence that had occurred between April and July 2010 at the Fountain Street/Bishop Street interface. In that period there were at least 46 sectarian incidents there and over 100 offences were committed. Approximately 75 young people were involved. Police warnings were issued informing the public that CCTV filming of the disorder would take place. Notwithstanding this, violence at the interface continued unabated. The inspector then considered whether to seek authorisation for the publication of images of those involved in the disorder. Before applying for this he conducted a risk assessment. This included addressing the risk that young people who were identifiable from the images might be targeted. This was considered to be low but mitigation measures were put in place, involving the obtaining of intelligence on the likelihood of targeting taking place and ensuring that all images published would be accompanied by a caption which referred to the presumption of innocence. Inspector Burrows realised that the use of Operation Exposure carried a risk that young people identified by it would become criminalised and stigmatised. He sought to counteract this by adopting a no positive charge policy, in other words that there would be a presumption in favour of diversion away from sectarianism and crime rather than prosecution. Highlighting the use of engagement procedures whereby the police and other agencies engage with the young person was an integral part of the Operation Exposure exercise. The inspector produced a copy of the internal police guidance that had been prepared in order to regulate the implementation of the Operation Exposure policy. This stipulated that all other means of identifying and tracing the suspect must have been exhausted before images were published. It also required that special care be taken when release of images of suspects under 18 years was being contemplated. The test for disclosure would be more rigorously applied in those instances. Social services should be approached and offered the opportunity to view the images so that release of such images to the media could be kept to a minimum. All of these steps were taken before the Operation Exposure exercise in July 2010 was authorised. Subsequently, in August 2011 that exercise was retrospectively analysed. The results analysis revealed that 102 offences had been committed between 24 May and 30 June 2010. The release of images in July 2010 had resulted in the identification of 37 persons (including the appellant) who had been engaged in interface violence. Of these 37, only five had been charged with criminal offences. The others had been dealt with through the youth diversion or the youth conferencing facility. This was despite the fact that, in Inspector Burrows estimation, there was sufficient evidence to charge the young people involved with criminal offences. The reason that he gave for this was that the overarching objective of the exercise was to identify the offenders and help them to divert from the type of offending that they had been engaged in. The results analysis also disclosed that there had been a 50% reduction in sectarian crimes in the Foyle district in July and August 2010 from the number committed in the same months the previous year. The report also recorded a marked reduction in sectarian incidents at the interface at Fountain Street, Londonderry. The issues The case made on behalf of the appellant before the Divisional Court was that the publication of photographs of him in the Derry Journal and the Derry News constituted a breach of his right to respect for a private life under article 8 of the European Convention on Human Rights and Fundamental Freedoms (ECHR). This was the single issue. And the question certified by the Divisional Court reflected that position. It was in these terms: Whether the publication of photographs by the police to identify a young person suspected of being involved in riotous behaviour and attempted criminal damage can ever be a necessary and proportionate interference with that persons article 8 rights. On the hearing of the appeal to this court, the appellant sought to introduce an argument that the retention of images of him by the police constituted a separate violation of article 8. Separate, that is, from the claim that supplying photographs of the appellant to the newspaper for publication was a breach of his article 8 rights. Unsurprisingly, the respondent objected to this new ground of challenge. The question of the legality of retaining the images (as opposed to publishing them) had not been considered by the Divisional Court because that court had not been addressed on the issue. Indeed, Morgan LCJ at para 22 of his judgment had said this about the nature of the application with which the court was dealing: This application is not concerned with the taking of photographs of the riotous and disorderly activity or the retention and distribution of those photographs internally to police officers for the purpose of identifying offenders. The complaint is focused on the provision of those photographs to the media and solely concerns the decision to do so in circumstances where it was apparent that some of the photographs were images of children. It was decided that the appellant should not be permitted to introduce this new ground of challenge before this court. As the respondent pointed out, evidence about the reasons for retention of the appellants photographs and whether these were to be retained for any particular length of time had not been given. To allow this particular challenge to proceed in the absence of such evidence would plainly be wrong. The sole remaining issue, therefore, is whether the publication of the photographs of the appellant constituted a breach of his article 8 right. Is article 8 engaged? The majority in the Divisional Court held that article 8 was engaged. Morgan LCJ dealt with this at para 30: In this case the photograph is not just an image of the child. It is part of a context which discloses to the public that the child in the image is at least wanted for interview in connection with possible involvement in serious public disturbances. At the time of publication it had not been established that the child had participated in any offence. The domestic and international provisions set out at paras 23 to 26 above [section 53 of the Justice (Northern Ireland) Act 2002, article 22 of the Criminal Justice (Children) (Northern Ireland) Order 1998, the Beijing Rules, the United Nations Convention on the Rights of the Child (UNCRC)] indicate the importance of respecting the privacy of children in the criminal justice system because of the risk that they will become stigmatised with a consequent effect on their reputation and standing within the community. If participation in criminal activity is established their rehabilitation may thereafter be impaired. Given the breadth of the concept of private life the publication of photographs suggesting that police wished to identify this child in connection with these serious offences was an intrusion into his private life. Higgins LJ did not agree. He considered that article 8 was not engaged. In para 63 of his judgment he said: The answer to the question whether a private life right exists in a public setting will be found by considering whether the person had a reasonable expectation of privacy in the public circumstances in which he placed or found himself. In this case the applicant placed himself in public view among a crowd of other persons engaged, allegedly, in public disorder. He was open to public view by anyone who happened to be watching, be they police or civilians. He took the risk of his presence and any activities being observed and noted down or otherwise recorded. What was the aspect of his private life which was in issue at that stage? None has been ventured. There must be an onus on the applicant to establish the aspect of his private life which he states is engaged at that stage or to characterise the interest which he seeks to protect. As in Kinloch there can have been no expectation of privacy in the circumstances of the instant case. The criminal nature of his activities or his presence, (if that is what they are), are not aspects of his life which he is entitled to keep private. Such activities should never be an aspect of private life for the purposes of article 8. In my view a criminal act is far removed from the values which article 8 was designed to protect, rather the contrary. In this case the applicant was photographed by the police, rather than his presence or activities simply noted down. I do not consider that is a material distinction. The photograph is probably a more accurate record of what is on going. In my view the taking of the photographs of the claimant, in the particular circumstances of this case, did not amount to a failure to respect any aspect of the claimants private life within article 8(1). Before this court the respondent argued that the appellant could not be said to have any reasonable expectation of privacy where he had willingly engaged in acts of disorder in a public street. Ms Higgins QC (who appeared for the appellant) countered this by submitting that reasonable expectation of privacy was not in general a prerequisite for the engagement of article 8 and certainly not in the case of a child or young person. Alternatively, she suggested that, at best, reasonable expectation was a factor to be taken into account. It was not to be treated as determinative of the issue whether the Convention right was engaged. In Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457 at para 20, Lord Nicholls of Birkenhead identified as the initial question in a claim that a persons article 8 rights had been violated by the publication of material about them, the issue whether the published information engaged article 8 at all by being within the sphere of the complainants private or family life. He then gave this warning in para 21: Accordingly, in deciding what was the ambit of an individuals private life in particular circumstances courts need to be on guard against using as a touchstone a test which brings into account considerations which should more properly be considered at the later stage of proportionality. Essentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy. (emphasis supplied) In Kinloch v HM Advocate [2012] UKSC 62, [2013] 2 AC 93 Lord Hope of Craighead took a similar approach. In that case the appellant complained that police had acted in breach of his article 8 rights in obtaining evidence by surveillance since they had failed to obtain authorisation for the surveillance under the Regulation of Investigatory Powers (Scotland) Act 2000. He was accused of converting and transferring criminal property consisting of large sums of money. Police had covertly observed the appellant and his associates in various public places leaving premises, entering cars and carrying a bag which, when he was searched, was found to contain a large sum of money. At para 19 of his judgment Lord Hope acknowledged that there was a zone of interaction with others that, even in a public context, fell within the scope of private life but where a person knowingly or intentionally involves himself in activities which may be recorded or reported in public, in circumstances where he does not have a reasonable expectation of privacy article 8 is not engaged. Article 8 of ECHR is, arguably at least, the provision in ECHR with the broadest potential scope of application. How, after all, are limits to be set on the right to respect for ones private life, ones family life, ones home and ones correspondence? The engagement of the right, as opposed to justification of interference with it, must, of necessity, cover a wide field of an individuals activity. And the potential scope of application of the provision must vary according, not only to the conditions in which it is invoked, but also to the circumstances of the individual concerned. The concept of a reasonable expectation of a right to privacy, connoting, as it might seem to some, the notion that the individual concerned actually expected that his or her personal circumstances, on the occasion of the invasion of that privacy, ought to have been protected, and that that expectation was reasonable, is one to be approached with some caution, in my opinion, particularly in the case of children. There is, at the least, a possible tension between the application of a reasonable expectation of privacy test and the well established principle that any decision affecting a child should give prominence to his or her best interests. Moreover, an unduly rigorous use of the reasonable expectation test is impossible to reconcile with the breadth of possible application of article 8. As ECtHR said in PG v United Kingdom (2001) 46 EHRR 1272: Private life is a broad term not susceptible to exhaustive definition. Article 8 also protects a right to identity and personal development, and the right to establish and develop relationships with other human beings and the outside world. It may include activities of a professional or business nature. There is therefore a zone of interaction of a person with others, even in a public context, which may fall within the scope of private life. (para 56) It is clear from the next paragraph of the Strasbourg courts judgment in PG that it did not consider that the reasonable expectation of privacy was a touchstone test of whether article 8 is engaged, if, by that expression one means that it is determinative of the issue. In para 57, the court said: There are a number of elements relevant to a consideration of whether a person's private life is concerned by measures effected outside a person's home or private premises. Since there are occasions when people knowingly or intentionally involve themselves in activities which are or may be recorded or reported in a public manner, a persons reasonable expectations as to privacy may be a significant, although not necessarily conclusive, factor. A person who walks down the street will, inevitably, be visible to any member of the public who is also present. Monitoring by technological means of the same public scene (for example, a security guard viewing through closed circuit television) is of a similar character. Private life considerations may arise, however, once any systematic or permanent record comes into existence of such material from the public domain. It is for this reason that files gathered by security services on a particular individual fall within the scope of article 8, even where the information has not been gathered by any intrusive or covert method. The court has referred in this context to the Council of Europe's Convention of January 28, 1981 for the protection of individuals with regard to automatic processing of personal data, which came into force on October 1, 1985 and whose purpose is: [T]o secure in the territory of each Party for every individual . respect for his rights and fundamental freedoms, and in particular his right to privacy, with regard to automatic processing of personal data relating to him. Such data being defined as any information relating to an identified or identifiable individual.(emphasis supplied) The italicised sentence in this passage clearly indicates that where someone engages in activities (such as public disorder) which are liable to be recorded or reported, what is reasonable to expect as to protection of his or her privacy is a factor to be taken into account in deciding whether article 8 is engaged but it will not automatically determine that issue. Other factors such as the use to which a photograph might be put or whether the individual concerned has objections to its publication are also relevant. Thus in Reklos v Greece (2009) 27 BHRC 420, photographs taken of a day old infant constituted a breach of his article 8 rights because his parents objected to the taking of his photograph. At para 42 the court said: . the court finds that it is not insignificant that the photographer was able to keep the negatives of the offending photographs, in spite of the express request of the applicants, who exercised parental authority, that the negatives be delivered up to them. Admittedly, the photographs simply showed a face on portrait of the baby and did not show the applicants son in a state that could be regarded as degrading, or in general as capable of infringing his personality rights. However, the key issue in the present case is not the nature, harmless or otherwise, of the applicants sons representation on the offending photographs, but the fact that the photographer kept them without the applicants consent. The babys image was thus retained in the hands of the photographer in an identifiable form with the possibility of subsequent use against the wishes of the person concerned and/or his parents (see, mutatis mutandis, PG and JH v The United Kingdom 46 EHRR 1272, para 57). The significance of taking and using a persons photograph, in the context of article 8, was emphasised by the court in para 40: A persons image constitutes one of the chief attributes of his or her personality as it reveals the persons unique characteristics and distinguishes the person from his or her peers. The right to the protection of ones image is thus one of the essential components of personal development and presupposes the right to control the use of that image. Whilst in most cases the right to control such use involves the possibility for an individual to refuse publication of his or her image, it also covers the individuals right to object to the recording, conservation and reproduction of the image by another person. As a persons image is one of the characteristics attached to his or her personality, its effective protection presupposes, in principle and in circumstances such as those of the present case , obtaining the consent of the person concerned at the time the picture is taken and not simply if and when it is published. Otherwise an essential attribute of personality would be retained in the hands of a third party and the person concerned would have no control over any subsequent use of the image. Prima facie, therefore, the taking and use of a photograph of an individual will lie within the ambit of article 8. The essential question is whether it is removed from that ambit because of the activity in which the person is engaged at the time the photograph was taken and because the person could not have a reasonable expectation that his or her right to respect for a private life arose in those particular circumstances. The fact that the activity in which the person is engaged is suspected to be criminal will not, by reason of that fact alone, be sufficient to remove it from the possible application of article 8. In R (L) v Comr of Police of the Metropolis (Secretary of State for the Home Department intervening) [2009] UKSC 3, [2010] 1 AC 410, this court held that disclosing criminal records during a Criminal Records Bureau check fell within article 8 because a persons private life could be affected by the stigma of having it revealed that he or she had criminal convictions. Although the appellant in that case had not been convicted of a criminal offence, in the course of making available to her employers the result of an enhanced criminal record certificate, the Secretary of State disclosed certain information which had been supplied by the police commissioner. This was to the effect that the appellants son had been placed on the child protection register under the category of neglect. It was stated that the appellant had refused to co operate with social services. This information caused her employers to discontinue her employment. After reviewing several Strasbourg authorities (including X v Iceland (1976) 5 DR 86; Niemietz v Germany (1992) 16 EHRR 97; Sidabras v Lithuania (2004) 42 EHRR 104; Rotaru v Romania (2000) 8 BHRC 449; Segerstedt Wiberg v Sweden (2006) 44 EHRR 14, and Cemalettin Canli v Turkey, (Application No 22427/04) (unreported) given 18 November 2008), Lord Hope, at para 27, said that this line of authority from Strasbourg shows that information about an applicants convictions which is collected and stored in central records can fall within the scope of private life within the meaning of article 8(1), with the result that it will interfere with the applicants private life when it is released. If disclosure of a persons actual criminal convictions falls within the scope of article 8, it is difficult to see how publication of an image of someone, such as the appellant, who was photographed when it was suspected he was engaged in criminal activity, would not likewise come within its ambit. In Sciacca v Italy (2005) 43 EHRR 400 ECtHR held that article 8 could be engaged by the publication of a persons photograph in newspapers even where they were under investigation for (and subsequently convicted of) criminal behaviour. In that case the applicant had been charged with criminal association, tax evasion and forgery of official documents. Revenue police compiled a file on her containing, among other things, her photographs and fingerprints. A public prosecutor held a press conference in which the allegations against the applicant and others were discussed. Photographs from the police file were supplied to newspapers. Following this, two newspapers published the photographs of the applicant in articles which stated that she and others had been charged with serious offences. The case against the applicant ended with a special procedure for imposition of a penalty agreed between the applicant and the prosecution. The penalty involved the imposition of a term of imprisonment and a fine. On the question of whether there had been an interference with Ms Sciaccas article 8 rights, the court said this at para 29: Regarding whether there has been an interference, the court reiterates that the concept of private life includes elements relating to a persons right to their picture and that the publication of a photograph falls within the scope of private life. It has also given guidance regarding the scope of private life and it has found that there is: a zone of interaction of a person with others, even in a public context, which may fall within the scope of a private life (Von Hannover v Germany (2004) 40 EHRR 1, paras 50 53) In the instant case the applicants status as an ordinary person enlarges the zone of interaction which may fall within the scope of private life, and the fact that the applicant was the subject of criminal proceedings cannot curtail the scope of such protection. Accordingly, the court concludes that there has been interference. Of course, clear distinctions can be drawn between the Sciacca case and the present appeal. In that case it was not considered necessary, as it was here, to publish the applicants photograph for the purpose of identifying her. Also, she was not engaged in criminal activity at the time the photograph was published. Moreover, it might be said that she had a reasonable expectation that a photograph taken as part of conventional police procedures would not be published without her consent. But the case is notable in the present context for its unqualified statement of principle that the publication of a photograph falls within the scope of a private life. Thus, while even a 14 year old child might not have a reasonable expectation that his photograph would not be taken if he engaged in rioting in a public place, different considerations arise when it comes to the publication of the photograph. The fact that the appellant was technically a child at the time of the publication of his photograph plays an important part in the decision whether that publication fell within the scope of his article 8 rights. The criminal justice system is geared to protect the identity of young offenders from disclosure. This is precisely to avoid the risks of criminalisation and stigmatisation. This is why such emphasis is placed by the police service and the prosecution service on youth conferences and other diversionary options. And it is why, if a child is involved in criminal proceedings, specific provision is made to ensure that his or her identity is not revealed. Article 22 of the Criminal Justice (Children) (Northern Ireland) Order 1998 (SI 1998/1504 (NI 9)) contains express provisions about the protection of a childs identity: (1) Where a child is concerned in any criminal proceedings (other than proceedings to which paragraph 2 applies) the court may direct that (a) no report shall be published which reveals the name, address or school of the child or includes any particulars likely to lead to the identification of the child; and (b) no picture shall be published as being or including a picture of the child, except in so far (if at all) as may be permitted by the direction of the court. (2) Where a child is concerned in any proceedings in a youth court or on appeal from a youth court (including proceedings by way of case stated) (a) no report shall be published which reveals the name, address or school of the child or includes any particulars likely to lead to the identification of the child; and (b) no picture shall be published as being or including a picture of any child so concerned, except where the court or the [Department of Justice], if satisfied that it is in the interests of justice to do so, makes an order dispensing with these prohibitions to such extent as may be specified in the order. (3) If a court is satisfied that it is in the public interest to do so, it may, in relation to a child who has been found guilty of an offence, make an order dispensing with the prohibitions in paragraph 2 to such extent as may be specified in the order It does not lie easily with the scheme of protection of a childs identity envisaged by this provision that the publication of his photograph, for the very purpose of enabling those who know or recognise him to identify him in the course of criminal activity, should not fall within the scope of a Convention provision which guarantees his right to respect for a private life. Moreover, as is common case, the nature and content of a childs right under article 8 must be informed by relevant international treaty provisions. Article 3(1) of UNCRC provides that in all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. The United Nations Committee on the Rights of Children, in its comment on the significance of this provision in May 2013, said this in para 1 of its report: Article 3, paragraph 1 of the Convention on the Rights of the Child gives the child the right to have his or her best interests assessed and taken into account as a primary consideration in all actions or decisions that concern him or her, both in the public and private sphere. Moreover, it expresses one of the fundamental values of the Convention. The Committee on the Rights of the Child (the Committee) has identified article 3, paragraph 1, as one of the four general principles of the Convention for interpreting and implementing all the rights of the child, and applies it is a dynamic concept that requires an assessment appropriate to the specific context. And this at para 4: 1. The concept of the child's best interests is aimed at ensuring both the full and effective enjoyment of all the rights recognized in the Convention and the holistic development of the child. The Committee has already pointed out that an adults judgment of a childs best interests cannot override the obligation to respect all the childs rights under the Convention. It recalls that there is no hierarchy of rights in the Convention; all the rights provided for therein are in the child's best interests and no right could be compromised by a negative interpretation of the child's best interests. And, finally, this at para 5: The full application of the concept of the child's best interests requires the development of a rights based approach, engaging all actors, to secure the holistic physical, psychological, moral and spiritual integrity of the child and promote his or her human dignity. The notion that a childs best interests can be properly catered for by supposing that when he or she engages in criminal activity in a public place, because he or she cannot therefore have a reasonable expectation of privacy, publication of his or her photograph, while engaged in that activity, does not come within the ambit of article 8 is, at best, incongruous, and is distinctly out of step with the philosophy which underpins article 3(1) of UNCRC. That philosophy, so far as it relates to criminal proceedings against children, is prominently proclaimed in article 40(2)(vii) of the Convention which requires states who are party to the Convention to ensure that the childs privacy is fully respected at all stages of the proceedings. The Beijing Rules accord similar importance to the need to insulate children from the disclosure of their identity when they are involved in criminal proceedings. They were adopted by the General Assembly resolution 40/33 of 20 November 1985. Rule 8 provides: 8.1 The juvenile's right to privacy shall be respected at all stages in order to avoid harm being caused to her or him by undue publicity or by the process of labelling. 8.2 In principle, no information that may lead to the identification of a juvenile offender shall be published. The commentary on this rule is to the following effect: Rule 8 stresses the importance of the protection of the juveniles right to privacy. Young persons are particularly susceptible to stigmatization. Criminological research into labelling processes has provided evidence of the detrimental effects (of different kinds) resulting from the permanent identification of young persons as delinquent or criminal. Rule 8 stresses the importance of protecting the juvenile from the adverse effects that may result from the publication in the mass media of information about the case (for example the names of young offenders, alleged or convicted). The interest of the individual should be protected and upheld, at least in principle. Taken as indicators as to how article 8 should be interpreted in this case, these provisions are reasonably unmistakable. A childs identity should be protected even (or, perhaps, especially) when he or she has been subject to criminal proceedings. The ambit of article 8 of ECHR must be seen as including within its embrace the need to protect a child from exposure as a criminal. That it should apply to the publication of a photograph of a child while, apparently, engaged in criminal activity, must follow inexorably. I consider, therefore, that there has been an interference with the appellants article 8 right. This conclusion does not depend on the abandonment of the test of reasonable expectation of privacy as a measure of whether a particular form of activity carried out in a public place comes within the ambit of article 8. In appropriate circumstances, this will be of considerable importance and its application to those circumstances may lead to only one possible conclusion such as, for instance, an adult person engaging in crime in a public forum. Such a person could not have a reasonable expectation of privacy for his criminal activity. As in Kinloch he could not expect that police would not be entitled to carry out surveillance of his criminal behaviour. That consideration may occupy a position of such importance in the question of whether particular circumstances come within the ambit of article 8, that no other factor could outweigh it. But it is important to understand that reasonable expectation of privacy, as a test of whether article 8 is engaged, cannot be accorded a status of unique importance with that automatic consequence in every conceivable circumstance where it can be said that a reasonable expectation of privacy was not present. The present case exemplifies the point. If reasonable expectation of privacy was to be treated as the be all and end all of whether article 8 was engaged, it might be supposed that only one answer was possible. For the reasons that I have given, a more nuanced approach is warranted. The fact that the appellant was a child; the fact that the mooted interference with his article 8 right involved not only the taking of his photograph but also its publication, with the consequent risk of stigmatisation; and the fact that the consent of the appellant and his parents was neither sought nor given, combine to more than offset the importance of the reasonable expectation of privacy test in his case. The test for whether article 8 is engaged is, essentially, a contextual one, involving not merely an examination of what it was reasonable for the person who asserts the right to expect, but also a myriad of other possible factors such as the age of the person involved; whether he or she has consented to publication; whether the publication is likely to criminalise or stigmatise the individual concerned; the context in which the activity portrayed in the publication took place; the use to which the published material is to be put; and any other circumstance peculiar to the particular conditions in which publication is proposed. To elevate reasonable expectation of privacy to a position of unique and inviolable influence is to exclude all such factors from consideration and I cannot accept that this is a proper approach. As I have said, reasonable expectation of privacy will often be a factor of considerable weight; it might even be described as a rule of thumb but to make it an inflexible, wholly determinative test is, in my opinion, to fundamentally misunderstand the proper approach to the application of article 8 and to unwarrantably proscribe the breadth of its possible scope. Von Hannover v Germany (2004) 16 BHRC 545 is not authority for giving reasonable expectation of privacy this unique status. It is true that in para 51 of its judgment (quoted by Lord Toulson in para 84) the court referred to the reasonable expectation of privacy but this was for the purpose of making clear that where there was such an expectation, that was a factor in favour of the engagement of article 8. The court did not suggest that, if there was no reasonable expectation of privacy, that would be determinative of the issue. Indeed, it did not even address that question. Moreover, the courts discussion in para 52 about the Commissions reference to the use to which photographs might be put was quite separate from the question of whether a there was a reasonable expectation of privacy. It is clear that the Commission (and the court) considered that the dissemination of photographs to the general public could alone give rise to interference with the article 8 right, irrespective of whether there was a reasonable expectation of privacy. That approach is plainly inconsistent with the view that, unless there was such an expectation, there could never be an interference with article 8 rights. In para 22 of R (Wood) v Comr of Police for the Metropolis [2009] EWCA Civ 414, [2010] 1 WLR 123, Laws LJ outlined what he described as three safeguards against the overblown use of article 8. The second of these was that the touchstone for the engagement of the article was a reasonable expectation of privacy. Laws LJ said that, absent such an expectation, there is no relevant interference with personal autonomy. His authority for this proposition appears to rest on Van Hannover the opinions of Lord Nicholls and Lord Hope in Campbell and the judgment of Sir Anthony Clarke MR in Murray v Express Newspapers plc [2008] 3 WLR 1360 (see para 24 of Laws LJs judgment). For the reasons given earlier, I consider that Von Hannover does not support the proposition for which it was cited by Laws LJ. In relation to the opinions of Lord Nicholls and Lord Hope in Campbell, it is, I believe, significant that neither suggested, in quite the sweeping way that Laws LJ did, that reasonable expectation of privacy was a sine qua non of article 8 engagement. Neither stated in terms that if a reasonable expectation of privacy was not present, there could never be an interference with personal autonomy. True it is that Lord Nicholls referred to reasonable expectation of privacy as the touchstone of private life but that is a far cry from saying that this is an indispensable criterion for the engagement of article 8. It is to be remembered that Campbell was a breach of confidence case. Such a case is more likely to give rise to consideration of what it was reasonable for the person who claimed that his or her article 8 rights had been infringed to expect. Moreover, too much can easily be read into the use of the word, touchstone. Understood, as I suggest it should be, as an expression connoting no more than a means by which the significance of the material to be assessed is considered or as a form of litmus test, the mistake of treating it as an obligatory condition is revealed. Laws LJs reliance on the judgment of Sir Anthony Clarke MR in Murray does not take further the debate as to whether reasonable expectation of privacy is an essential prerequisite of article 8 engagement. It is clear that the Master of the Rolls conceived the reasonable expectation of privacy test as one to be applied in a broad and general way. At para 36 he said: As we see it, the question whether there is a reasonable expectation of privacy is a broad one, which takes account of all the circumstances of the case. They include the attributes of the claimant, the nature of the activity in which the claimant was engaged, the place at which it was happening, the nature and purpose of the intrusion, the absence of consent and whether it was known or could be inferred, the effect on the claimant and the circumstances in which and the purposes for which the information came into the hands of the publisher. This passage does not partake of an approach which starts the inquiry into whether article 8 is engaged by asking, in a context free way, whether there was a reasonable expectation of privacy. Rather, it commends an examination of all the circumstances of the case in order to determine whether such an expectation can be said to exist. This approach is echoed in the judgments of Lord Clarke and Lord Toulson in the present case. As I understand those judgments, it is suggested that considerations such as the age of the child, the circumstances in which the avowed interference took place, the purpose of the publication of photographs and whether consent had been obtained are relevant only in so far as they may be said to conduce to the overarching touchstone of a reasonable expectation of privacy. The reason for adopting such an approach is not explained other than by reference to earlier authority which, in turn, does not contain any analysis of why reasonable expectation of privacy should be given such unique and overweening status. There is certainly no obviously logical reason for approaching the question of engagement of article 8 in this way. The factors outlined earlier are unquestionably capable of bearing on the issue on a freestanding, autonomous footing and, absent any rational basis for treating them merely as a sub set of reasonable expectation of privacy, this is how they should be evaluated. I am therefore of the firm view that the reasonable expectation of privacy is but one of a number of factors which may be relevant to the issue of the engagement of article 8. That this is the correct approach is, it seems to me, clear from the judgment of Richards LJ in R (C) v Comr of Police for the Metropolis (Liberty intervening) [2012] EWHC 1681 (Admin) , [2012] 1 WKR 3007. Dealing with Laws LJs judgment in Wood, Richards LJ said at para 36: What Laws LJ said about the taking of photographs on arrest was obviously obiter. More importantly, it relied on Strasbourg decisions prior to S v United Kingdom which, as already explained, have to be re assessed in the light of the judgment in that case; and it was based on a test of reasonable expectation of privacy which, as the recent Strasbourg cases show, is not the only or determinative factor. In Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457, at para 21, Lord Nicholls of Birkenhead said, in relation to article 8.1, that [e]ssentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy. But that was plainly not the specific test applied by the Strasbourg court in S v United Kingdom; and the judgment in PG v United Kingdom makes clear, at para 27, that it is not the only test and that other considerations come into play, in particular, in relation to the retention of personal data . Kinloch does not throw doubt on the correctness of Richards LJs analysis. As it happens, and unsurprisingly, the patent lack of any reasonable expectation of privacy in that case was a weighty factor which militated strongly against a finding that article 8 was engaged but nothing in Lord Hopes judgment in that case lends support to the notion that that factor must in all circumstances be present for engagement of the article to arise. The criminalisation of a childs activities and his possible stigmatisation by publishing photographs of him while apparently engaged in such activities are factors which were not in play in Kinloch. But they are distinctly in play in this case. Surveillance was the complained of activity in Kinloch; here it is the publication of photographs of the appellant which is in issue. That publication was, for reasons that I shall discuss below, justified. But it is extremely important not to conflate the question of justification with the issue of whether article 8 is engaged. It is wrong, in my judgment, to draw from cases such as Kinloch the notion that, because the occasion of possible interference involves the recording of what appears to be criminal activity, the subsequent use of that material can never engage article 8. This point was clearly made by Lord Sumption in R (Catt) v Association of Chief Police Officers of England, Wales and Northern Ireland (Equality and Human Rights Commission intervening) [2015] UKSC 9, [2015] 2 WLR 664. In the passage which succeeds that quoted by Lord Toulson in para 10, Lord Sumption said this: In one sense [the reasonable expectation of privacy] test might be thought to be circular. It begs the question what is the privacy which may be the subject of a reasonable expectation. Given the expanded concept of private life in the jurisprudence of the Convention, the test cannot be limited to cases where a person can be said to have a reasonable expectation about the privacy of his home or personal communications. It must extend to every occasion on which a person has a reasonable expectation that there will be no interference with the broader right of personal autonomy recognised in the case law of the Strasbourg court. This is consistent with the recognition that there may be some matters about which there is a reasonable expectation of privacy, notwithstanding that they occur in public and are patent to all the world. In this context mere observation cannot, save perhaps in extreme circumstances, engage article 8, but the systematic retention of information may do. When one focuses, as one must, on the publication of the photographs of the appellant, rather than the activity on which he was engaged, and when one recognises the potential effect that their publication might have on the life of the child that he then was, it is not difficult to understand that article 8 must be engaged. It would be facile to say that, because he was rioting, he cannot have expected that a right to respect for private life would be engaged and, on that account alone, it was not engaged. A childs need for protection can go beyond what, if he was an adult, he would be reasonably entitled to expect. Whether, therefore, one approaches the question of whether article 8 was engaged on the basis that reasonable expectation of privacy is but one factor in the equation or that that concept should be adjusted to take into account what the effect would be on the child, irrespective of his personal expectation, I am satisfied that there was an interference with his Convention right and that the essential issue in this case is whether that interference was justified. Justification Justification of interference with a qualified Convention right such as article 8 rests on three central propositions. The interference must be in accordance with law; it must pursue a legitimate aim; and it must be necessary in a democratic society. Proportionality is a particular aspect of the last of these requirements. The appellant takes no issue with the respondents assertion that the interference with his article 8 right pursued a legitimate aim. It is claimed, however, that it was not in accordance with law and was not necessary in a democratic society. As the Lord Chief Justice stated in para 32 of his judgment, section 32 of the Police (Northern Ireland) Act 2000 imposes a general duty on police officers to prevent the commission of offences and, where an offence has been committed, to take measures to bring the offender to justice. In light of its acknowledged responsibilities to children the police service devised Policy Directive 13/06 entitled PSNI Policing with Children and Young People. It aims to identify children and young people at risk of becoming involved in offending and works with partner agencies in the provision of support and intervention. It contains an express commitment to adhere to ECHR rights as well as the international standards in the UNCRC and the Beijing Rules. Policy Directive 13/06 is available to the public. Publication of the appellants photograph was subject to the Data Protection Act 1998. The photograph of the appellant constituted sensitive personal data (section 2(g) of the Act) and its publication was processing of the data under section 1(1) of the Act. The police service is a registered data controller and must therefore comply with the data protection principles in relation to all personal data which it holds as data controller. Under section 29 of the Act, personal data is exempt from the first data protection principle, if processed for the purposes of the prevention and detection of crime and the apprehension and prosecution of offenders, except insofar as it required compliance with Schedule 2 and/or Schedule 3 to the Act. Since the processing related to sensitive personal data, the requirements of both Schedules were engaged. If any of the conditions in these Schedules was satisfied, the respondent is deemed to have acted in accordance with the Act. A condition common to both schedules is that the processing be necessary for the administration of justice. Plainly, this applies in the appellants case. There was therefore no breach of the Data Protection legislation and I am satisfied that the publication of the appellants photograph was in accordance with law. Necessary in a democratic society Clearly, the detection and prevention of crime, the prosecution and rendering to justice of those guilty of criminal offending and the diversion of young people from criminal activities, which may be said cumulatively to constitute the objective of the Operation Exposure campaign, are necessary in a democratic society. The essential question which arises under this rubric, therefore, is whether the devising and the application of the policy were proportionate. As Lord Wilson in R (Aguilar Quila) v Secretary of State for the Home Department (Aire Centre intervening) [2011] UKSC 45, [2012] 1 AC 621, para 45 and Lord Reed in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39, [2014] AC 700, 790, paras 72ff explained, this normally requires that four questions be addressed: i) fundamental right?; ii) connected to it?; iii) are they no more than are necessary to accomplish it?; and iv) do they strike a fair balance between the rights of the individual and the interests of the community? is the legislative objective sufficiently important to justify limiting a are the measures which have been designed to meet it rationally The importance of detecting and prosecuting criminal offenders, the prevention of future crime and the diversion of young people from criminal activity are self evidently objectives of the first order of importance. In concrete terms in this case, dealing with sectarian violence at interfaces in Derry, which showed alarming signs of persistence and escalation, was obviously a pressing police and community priority. This was reflected in the concerns expressed by community leaders in the meetings referred to in paras 13 and 14 above. There is no question therefore that the objective of Operation Exposure was sufficiently important to justify an interference with the article 8 right. One must concentrate, therefore, on the three remaining questions to be answered, as outlined in Lord Wilsons and Lord Reeds analysis. First, is Operation Exposure rationally connected to the objective that it sought to achieve? A number of possible options were available to police as to how to deal with the sectarian violence that was taking place in 2009 and 2010. In his affidavit, Inspector Burrows explained why arresting individuals involved in rioting at the Fountain Street interface was extremely difficult. These reasons have not been challenged. In short summary, they were that police in full riot gear could easily be outrun by young rioters who would descend a grassy slope into the Bogside area of Derry as soon as any arrest operation at the scene was attempted. Pursuing them into this area and attempting to carry out arrests was almost certain to bring about further disorder and community disaffection. Deciding to identify young rioters after the rioting had ended and either prosecuting them or securing their co operation on diversionary alternatives had an obviously rational connection with the objective of detecting crime, preventing further disorder and diverting young people from criminal activity. The rational connection between Operation Exposure and its objective is plainly established. Are the measures no more than is necessary to achieve the objective? In Bank Mellat Lord Reed, in outlining the fourfold test of proportionality, followed the approach of Dickson CJ in the Canadian case of R v Oakes [1986] 1 SCR 103. In expressing the third element of the test, he endorsed the approach that one should ask whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective. The painstaking approach taken by the police service to the objective of identifying young offenders such as the appellant has been explained by Chief Inspector Yates and Superintendent Robinson. Internal police inquiries were made; community leaders and social services were asked whether they could identify those involved; and it is ironical that the appellant and his father were shown the photograph that was later published. Had they identified the appellant, no publication would have occurred. Plainly, some means of identifying those involved in the rioting had to be found. Sectarian violence at interfaces in Derry could not be allowed to continue. This not only put at risk vulnerable and elderly people living in the area, as well as the young people involved in the violence themselves. It was corrosive of the good community relations in Derry which so many agencies are trying to promote. I am satisfied that publication of the photographs was, in this instance, truly a measure of last resort. I do not consider that a less intrusive means of achieving the objective of Operation Exposure was feasible. The third condition is satisfied, in my opinion. A fair balance? The final element in the proportionality examination is whether a fair balance has been struck between the rights of the individual and the interests of the community. The importance of the article 8 right and of the need to protect children and young persons from the risk of criminalisation and stigmatisation have been discussed above. The need for the decision maker to be guided by the primary consideration of the best interests of the children has also been explained. Striking the balance between the rights of the individual and the interests of the community should not, in this instance, be viewed solely as a competition between two opposing benefits. The appellant himself stood to gain by the opportunities afforded him to be diverted from the criminal activity in which he had been engaged. It was very much in his long term interests that he should become a law abiding and useful member of his community. The interests to the community generally are obvious. Quite apart from the deep unpleasantness and, indeed, danger to which those who lived in the area were subjected by these recurring riots, the peril in which they placed inter community harmony is undeniable. The fact that the Operation was so successful in reducing the number of interface confrontations cannot be left out of account either. For these reasons and for the reasons given by the Lord Chief Justice in para 37 of his judgment, the balance fell firmly on the side of pursuing the option of publication of the appellants photographs and those of others involved. The way in which he and others who were thus identified have been dealt with is testament to the benefit that was available to them by following that course. The benefit to the community is as unquestionable as it is considerable. Disposal I would dismiss the appeal. LORD TOULSON: (with whom Lord Hodge agrees) I agree that this appeal should be dismissed but, unlike Lord Kerr, I do not consider that the conduct of the police amounted, prima facie, to an interference with the appellants right to respect for his private life, so as to fall within the scope of article 8 of the European Convention on Human Rights and Fundamental Freedoms. Article 8.1 provides that Everyone has the right to respect for his private and family life, his home and his correspondence. In the leading case of Von Hannover v Germany (2004) 16 BHRC 545, concerning press photographs of the applicant engaged in various informal activities with members of her family or friends in locations outside her own home, the Strasbourg court said: 50. The court reiterates that the concept of private life extends to aspects relating to personal identity, such as a persons name (see Burghartz v Switzerland [1994] ECHR 16293/90 at para 24) or a persons picture (see Schussel v Austria (Application No 42409/98) (admissability decision, 21 February 2002)). Furthermore, private life, in the courts view, includes a persons physical and psychological integrity; the guarantee afforded by article 8 of the convention is primarily intended to ensure the development, without outside interference, of the personality of each individual in his relations with other human beings (see, mutatis mutandis, Niemietz v Germany [1992] ECHR 13710/88 at para 29, and Botta v Italy (1998) 4 BHRC 81 at para 32.) There is therefore a zone of interaction with others, even in a public context, which may fall within the scope of private life (see, mutatis mutandis, PG v UK [2001] ECHR 44787/98 at para 56, and Peck v UK (2003) 13 BHRC 669 at para 57.) 51. The court has also indicated that, in certain circumstances, a person has a legitimate expectation of protection and respect for his private life. Accordingly, it has held in a case concerning the interception of telephone calls on business premises that the applicant would have had a reasonable expectation of privacy for such calls (see Halford v UK (1997) 3 BHRC 669 at para 45). 52. As regards photos, with a view to defining the scope of protection afforded by article 8 against arbitrary interference by public authorities, the Commission had regard to whether the photographs related to private or public matters and whether the material thus obtained was envisaged for a limited use or was likely to be made available to the general public (see, mutatis mutandis, Friedl v Austria [1995] ECHR 15225/89, (1995) 21 EHRR 83, Friendly Settlement, Commission opinion, at paras 49 52; PG v UK [2001] ECHR 44787/98 at para 58; and Peck v UK (2003) 13 BHRC 669 at para 61). This passage highlights three matters: the width of the concept of private life; the purpose of article 8, ie what it seeks to protect; and the need to examine the particular circumstances of the case in order to decide whether, consonant with that purpose, the applicant had a legitimate expectation of protection in relation to the subject matter of his complaint. If so, it is then up to the defendant to justify the interference with the defendants privacy. In an impressive analysis of the scope of article 8, Laws LJ said in R (Wood) v Comr of Police of the Metropolis [2009] EWCA Civ 414, [2010] 1 WLR 123: 20. The phrase physical and psychological integrity of a person (Von Hannover v Germany (2004) 16 BHRC 545 (para 50), S v UK (2008) 25 BHRC 557 (para 66) is with respect helpful. So is the persons physical and social identity (see S v UK at para 66 and other references there given). These expressions reflect what seems to me to be the central value protected by the right. I would describe it as the personal autonomy of every individual 21. The notion of the personal autonomy of every individual marches with the presumption of liberty enjoyed in a free polity: a presumption which consists in the principle that every interference with the freedom of the individual stands in need of objective justification. Applied to the myriad instances recognised in the article 8 jurisprudence, this presumption means that, subject to the qualifications I shall shortly describe, an individuals personal autonomy makes him should make him master of all those facts about his own identity, such as is name, health, sexuality, ethnicity, his own image, of which the cases speak; and also of the zone of interaction (Von Hannover v Germany (2004) 16 BHRC 545 (para 50) between himself and others 22. This cluster of values, summarised as the personal autonomy of every individual and taking concrete form as a presumption against interference with the individuals liberty, is a defining characteristic of a free society. We therefore need to preserve it even in little cases. At the same time it is important that this core right protected by article 8, however protean, should not be read so widely that its claims become unreal and unreasonable. For this purpose I think that there are three safeguards, or qualifications. First, the alleged threat or assault to the individuals autonomy must (if article 8 is to be engaged) attain a certain level of seriousness. Secondly, the touchstone for article 8(1)s engagement is whether the claimant enjoys on the facts a reasonable expectation of privacy (in any of the senses of privacy accepted in the cases). Absent such an expectation, there is no relevant interference with personal autonomy. Thirdly, the breadth of article 8(1) may in many instances be greatly curtailed by the scope of the justifications available to the state pursuant to article 8(2). I shall say a little in turn about these three antidotes to the over blown use of article 8. I have set out this passage at length because I agree with it and cannot improve on it. We are concerned in this case with the second of Laws LJs qualifications the touchstone of whether the claimant enjoyed on the facts a reasonable expectation of privacy or legitimate expectation of protection. (I take the expressions to be synonymous.) In support of that part of his analysis Laws LJ cited Von Hannover v Germany at para 51 (set out above), Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457 and Murray v Express Newspapers plc [2008] EWCA Civ 446, [2009] Ch 481. In Campbells case Lord Nicholls said at para 21 that Essentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy. He also warned that courts need to be on guard against using as a touchstone a test which brings into account considerations which should more properly be considered at the later stage of proportionality. Applying Campbells case, Sir Anthony Clarke MR said in Murrays case at para 35 that The first question is whether there is a reasonable expectation of privacy. He said at para 36 that the question is a broad one which takes account of all the circumstances of the case, including the attributes of the claimant, the nature of the activity in which the claimant was involved, the place at which it was happening, and the nature and purpose of the intrusion. The principled reason for the touchstone is that it focuses on the sensibilities of a reasonable person in the position of the person who is the subject of the conduct complained about in considering whether the conduct falls within the sphere of article 8. If there could be no reasonable expectation of privacy, or legitimate expectation of protection, it is hard to see how there could nevertheless be a lack of respect for their article 8 rights. More recent authorities to the same effect are Kinloch v HM Advocate [2012] UKSC 62, [2013] 2 AC 93 and R (Catt) v Association of Chief Police Officers of England, Wales and Northern Ireland (Equality and Human Rights Commission intervening) [2015] UKSC 9, [2015] 2 WLR 664. In Kinlochs case the police carried out covert surveillance of the applicant as part of a criminal investigation which led to his prosecution and conviction for laundering criminal property consisting of large sums of money. He complained that the form of surveillance and use of the resulting evidence at his trial involved a breach of his article 8 rights. Lord Hope said in a judgment with which the other members of the court agreed: 19. There is a zone of interaction with others, even in a public context, which may fall within the scope of private life: PG v United Kingdom, 46 EHRR 1272, para 56. But measures effected in a public place outside the persons home or private premises will not, without more, be regarded as interfering with his right to respect for his private life. Occasions when a person knowingly or intentionally involves himself in activities which may be recorded or reported in public, in circumstances where he does not have a reasonable expectation of privacy, will fall into that category: PG v United Kingdom, para 57. 20. The Strasbourg court has not had occasion to consider situations such as that illustrated by the present case, where a persons movements in a public place are noted down by the police as part of their investigations when they suspect the person of criminal activity 21. I think that the answer to it is to be found by considering whether the appellant had a reasonable expectation of privacy while he was in public view as he moved between his car and the block of flats where he lived and engaged in his other activities that day in places that were open to the public. The criminal nature of what he was doing, if that is what it was found to be, was not an aspect of his private life that he was entitled to keep private. Citing Campbells case and Kinlochs case, Lord Sumption said in R (Catt) v ACPO at para 4: In common with other jurisdictions, including the European Court of Human Rights and the courts of the United States, Canada and New Zealand, the courts of the United Kingdom have adopted as the test for what constitutes private life whether there was a reasonable expectation in the relevant respect. Lord Kerr considers that caution is needed in applying the reasonable expectation of privacy test especially in a case involving a child, where the test may be in tension with the principle that any decision should give prominence to the childs best interests. Lord Kerr draws attention to the observation of the Strasbourg court in PG at para 57: There are a number of elements relevant to a consideration of whether a persons private life may be concerned by measures effected outside a persons home or private premises. Since there are occasions when people knowingly or intentionally involve themselves in activities which are or may be recorded or reported in a public manner, a persons reasonable expectations as to privacy may be a significant, although not necessarily conclusive, factor. A person who walks down the street will, inevitably, be visible to any member of the public who is also present. Monitoring by technological means of the same public scene is of a similar character. Private life considerations may arise, however, once any systematic or permanent record comes into existence of such material from the public domain. (Emphasis added.) The court did not expand on its thinking in the second sentence of this passage. The linkage between the two halves of the sentence is intriguing but obscure. It may be that the court had in mind that a person may have a reasonable but mistaken expectation of privacy. Be that as it may, I have difficulty in reading the court as meaning to suggest that a situation may come within the scope of article 8 even where the person concerned had no reasonable expectation of privacy, and it is difficult to see why that should be so. It is perhaps unfortunate that the point was not developed, but the case pre dated Von Hannover, where the court referred to a legitimate expectation of protection, and the succeeding line of domestic authorities (including three decisions of the House of Lords or Supreme Court), which have adopted and applied the reasonable expectation test. Sciacca v Italy (2005) 43 EHRR 400 was, as Lord Kerr has explained at para 44, a case where the police released to the press a photograph taken of the applicant while under arrest. There is no difficulty is seeing that the applicant had a legitimate expectation that the police would not make use of her photograph in that way, but it is a very different question whether a member of a crowd engaged in a violent disturbance in a public place has a legitimate expectation of protection from the police seeking the help of the public to identify those involved. In a footnote to the passage in para 29 of the courts judgment (set out by Lord Kerr at para 45), the court cited paras 50 to 53 of the judgment in Von Hannover as the foundation of its observations. I have set out (at para 3) the relevant passage in Von Hannover, including the reference to a legitimate expectation of protection which is an important part of the guidance given by the court in that case. The court has not gone so far as to suggest that the taking or use of a photograph of a person is all circumstances an interference with a persons private life. The fact that the appellant was a child at the relevant time is not in my opinion a reason for departing from the test whether there was a reasonable (or legitimate) expectation of privacy, but it is a potentially relevant factor in its application. In the case of a child too young to have a sufficient appreciation of the idea of privacy there must obviously be some modification, but this caused no difficulty to the court in Murray v Express Newspapers plc. Sir Anthony Clarke MR approved (at para 37) the approach taken by the trial judge, Patten J, who had said [2007] EWHC 1908 (Ch) at para 23: A proper consideration of the degree of protection to which a child is entitled under article 8 has to be considered in a wider context by taking into account not only the circumstances in which the photograph was taken and its actual impact on the child, but also the position of the childs parents and the way in which the childs life as part of that family has been conducted. The question whether a child in any particular circumstances has a reasonable expectation for privacy must be determined by the court taking an objective view of the matter including the reasonable expectations of his parents in those same circumstances as to whether their childrens lives in a public place should remain private. Ultimately it will be a matter of judgment for the court with every case depending upon its own facts. The point that needs to be emphasised is that the assessment of the impact of the taking and the subsequent publication of the photograph on the child cannot be limited by whether the child was physically aware of the photograph being taken or published or personally affected by it. The court can attribute to the child reasonable expectations about his private life based on matters such as how it has in fact been conducted by those responsible for his welfare and upbringing. In considering whether, in a particular set of circumstances, a person had a reasonable expectation of privacy (or legitimate expectation of protection), it is necessary to focus both on the circumstances and on the underlying value or collection of values which article 8 is designed to protect. I therefore do not agree with Lord Kerrs suggestion (para 56) that the test of reasonable expectation of privacy (or legitimate expectation of protection), excludes from consideration such factors as the age of the person involved, the presence or absence of consent to publication, the context of the activity or the use to which the published material is to be put. The reasonable or legitimate expectation test is an objective test. It is to be applied broadly, taking account of all the circumstances of the case (as Sir Anthony Clarke said in Murrays case) and having regard to underlying value or values to be protected. Thus, for example, the publication of a photograph of a young person acting in a criminal manner for the purpose of enabling the police to discover his identity may not fall within the scope of the protection of personal autonomy which is the purpose of article 8, but the publication of the same photograph for another purpose might. Nor am I persuaded by Lord Kerrs reading of Von Hannover (in para 57 of his judgment) that the Commission and the court treated dissemination to the general public as a self standing test. The facts set out by Morgan LCJ at para 37 included the following: the violence at this [the Fountain Street/Bishop Street] interface (i) was persistent, extending over a period of months, and was exposing vulnerable people to fear and the risk of injury. (ii) There was, therefore, a pressing need to take steps to bring it to an end by identifying and dealing with those responsible. (iii) Detection by arresting those at the scene was not feasible so use of photographic images was necessary. (iv) All reasonably practicable methods of identifying those involved short of publication of the photographs had been tried. These facts have obvious relevance to the issue of justification, but it is also relevant to understand the nature of the activity in which the appellant was involved in considering whether the scope of article 8 extends to his claim (or, to use language familiar to lawyers, whether article 8 is engaged). When the authorities speak of a protected zone of interaction between a person and others, they are not referring to interaction in the form of public riot. That is not the kind of activity which article 8 exists to protect. In this respect the case is on all fours with Kinloch. Lord Hopes words are equally applicable to the appellant: The criminal nature of what he was doing, if that was what it was found to be, was not an aspect of his private life that he was entitled to keep private. If, for example, members of the public gave descriptions of a rioter from which an artist prepared an indentikit, would its use by the police for the purpose of his identification be an infringement of his right to privacy? I consider not. I should make it clear that I do not suggest that there could never be circumstances in which publication of the photographs which are the subject of this case could fall within the scope of the appellants article 8 rights. Photographs can become historic and re publication of material which was once properly in the public domain may give rise to a valid complaint. In R (Catt) v ACPO the court, applying the test of reasonable expectation of privacy, held that the systematic retention of personal details about a person on police files for a period of years was within the scope of article 8. But we are concerned with publication, in the recent aftermath of criminal activity, of photographs taken of public rioting for the purpose of identifying those involved. I agree with Higgins LJ that this situation is far removed from the values which article 8 was designed to protect. The court was referred to the provisions of the Police (Northern Ireland) Act 2000 and the Justice (Northern Ireland) Act 2002. Under the Police Act, section 32, it is the duty of the police to protect life and property; to preserve order; to prevent the commission of offences; and where an offence has been committed, to take measures to bring the offender to justice. Under the Justice Act , section 53, it is the principal aim of the youth justice system to protect the public by preventing offending by children; all persons and bodies exercising functions in relation to the youth justice system must have regard to that principal aim, with a view (in particular) to encouraging children to recognise the effects of crime and to take responsibility for their actions; but all such persons and bodies must also have regard to the welfare of children with a view to furthering their personal, social and educational development. I do not consider that these provisions affect the question whether the conduct of the police in releasing the CCTV images for publication was prima facie an interference with the appellants right to respect for his private life. If, contrary to my opinion, there was an interference by the police with the appellants right to respect for his private life, I agree fully with Lord Kerr that it was justified and there is nothing which I would wish to add on that issue. LORD CLARKE: (with whom Lord Hodge agrees) The facts giving rise to this appeal are set out in detail by Lord Kerr. I agree with Lord Kerr and Lord Toulson that this appeal must be dismissed on the basis that, if the facts fall within article 8.1 of the ECHR so that (as it is often put) article 8.1 is engaged, the conduct complained of was justified so that there was no breach of article 8 because of the provisions of article 8.2. Like Lord Toulson, I do not wish to address the justification issue. However, I wish to add a short judgment on the question whether article 8.1 is engaged. I do so because Lord Kerr and Lord Toulson have reached different conclusions. The question which divides them is whether article 8 is only engaged where the alleged victim has a legitimate expectation of privacy or a reasonable expectation of protection and respect for his private life. As Lord Toulson shows at para 84, the latter expression was used by the European Court of Human Rights in the leading case of Von Hannover v Germany (2004) 16 BHRC 545 at para 51. The expression reasonable expectation of privacy is found in a number of English cases. I agree with Lord Toulson that the two expressions have the same meaning. Subject to one point, I also agree with him that Laws LJ expressed the position correctly in R (Wood) v Comr of Police of the Metropolis [2009] EWCA Civ 414, [2010] 1 WLR 123 at paras 20 22, which he quotes at para 86. Laws LJ said at para 22 that the touchstone for the engagement of article 8.1 is whether the claimant enjoys on the facts a reasonable expectation of privacy. Laws LJ went so far as to say that, absent such an expectation, there is no relevant interference with personal autonomy so as to engage article 8. As appears below, I would not go quite as far as that. As Lord Toulson noted, Laws LJ cited para 51 of Von Hannover, together with two English cases, namely Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457 and Murray v Express Newspapers plc [2008] EWCA Civ 446, [2009] Ch 481. The more recent domestic cases cited by Lord Toulson in paras 8 to 10, namely Kinloch v HM Advocate [2012] UKSC 62, [2013] 2 AC 93 and R (Catt) v Association of Chief Police Officers of England, Wales and Northern Ireland (Equality and Human Rights Commission intervening) [2015] UKSC 9, [2015] 2 WLR 664, are to the same effect. That is to my mind true in Catt even though, as Lord Kerr says at para 62, the whole passage in para 4 of Lord Sumptions judgment reads as follows: In common with other jurisdictions, including the European Court of Human Rights and the courts of the United States, Canada and New Zealand, the courts of the United Kingdom have adopted as the test for what constitutes private life whether there was a reasonable expectation in the relevant respect: see Campbell para 21 (Lord Nicholls of Birkenhead) and Kinloch paras 19 21 (Lord Hope of Craighead DPSC). In one sense this test might be thought to be circular. It begs the question what is the privacy which may be the subject of a reasonable expectation. Given the expanded concept of private life in the jurisprudence of the Convention, the test cannot be limited to cases where a person can be said to have a reasonable expectation about the privacy of his home or personal communications. It must extend to every occasion on which a person has a reasonable expectation that there will be no interference with the broader right of personal autonomy recognised in the case law of the Strasbourg court. This is consistent with the recognition that there may be some matters about which there is a reasonable expectation of privacy, notwithstanding that they occur in public and are patent to all the world. In this context mere observation cannot, save perhaps in extreme circumstances, engage article 8, but the systematic retention of information may do. Lord Sumption was not suggesting that any test other than the legitimate expectation of privacy might be appropriate. All the domestic cases support the proposition that, as Lord Nicholls put it, the touchstone of private life is whether the person in question had a reasonable expectation of privacy or, as Lord Sumption put it in Catt, the test for what constitutes private life is whether there was a reasonable expectation in the relevant respect. Lord Kerr places some reliance on para 36 of the judgment of Richards LJ in R (C) v Comr of Police of the Metropolis [2012] EWHC 1681 (Admin), [2012] 1 WLR 3007 as follows: What Laws LJ said [in Wood] about the taking of photographs on arrest was obviously obiter. More importantly, it relied on Strasbourg decisions prior to S v United Kingdom [(2008) 48 EHRR 50] which, as already explained, have to be re assessed in the light of the judgment in that case; and it was based on a test of reasonable expectation of privacy which, as the recent Strasbourg cases show, is not the only or determinative factor. In Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457, at para 21, Lord Nicholls of Birkenhead said, in relation to article 8.1, that [e]ssentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy. But that was plainly not the specific test applied by the Strasbourg court in S v United Kingdom; and the judgment in PG v United Kingdom [(2008) 46 EHRR 51] makes clear at para 57, that it is not the only test and that other considerations come into play, in particular, in relation to the retention of personal data . It is true that in S v United Kingdom the court does not expressly refer to the reasonable expectation of privacy but its analysis seems to me to be consistent with it. It is also true that in PG the court said at para 57 that a persons expectations may be a significant, although not necessarily a conclusive, factor. I cannot at present think of a situation where article 8.1 would be engaged in the absence of a reasonable expectation of privacy or a reasonable expectation of protection and respect for the private life of the applicant. It is difficult to see why article 8.1 should be engaged where the applicant has no reasonable expectation of privacy. It is important in this respect to have regard to the fact that the concept of reasonable expectation is a broad objective concept and that the court is not concerned with the subjective expectation of the person concerned, whether that person is a child or an adult. As Laws LJ put it in Wood at para 22, absent a reasonable expectation of privacy, there is no relevant interference with personal autonomy, which (as he explains in para 21) is a central feature of article 8. Although, in the light of the present state of the Strasbourg jurisprudence, I for my part would not go so far as to say that such a case is impossible, the test of reasonable expectation is in my opinion relevant in this class of case. I agree with Lord Toulson that Kinloch is a case of some significance on the facts here. In para 90 he sets out the facts and relies upon paras 19 to 21 of Lord Hopes judgment in this court. The complaint was that the form of surveillance and the use of the resulting evidence involved a breach of the applicants article 8 rights. Lord Hope said: 19. There is a zone of interaction with others, even in a public context, which may fall within the scope of private life: PG v United Kingdom, , para 56. But measures effected in a public place outside the persons home or private premises will not, without more, be regarded as interfering with his right to respect for his private life. Occasions when a person knowingly or intentionally involves himself in activities which may be recorded or reported in public, in circumstances where he does not have a reasonable expectation of privacy, will fall into that category: PG v United Kingdom, para 57 20. The Strasbourg court has not had occasion to consider situations such as that illustrated by the present case, where a persons movements in a public place are noted down by the police as part of their investigations when they suspect the person of criminal activity 21. I think that the answer to it is to be found by considering whether the appellant had a reasonable expectation of privacy while he was in public view as he moved between his car and the block of flats where he lived and engaged in his other activities that day in places that were open to the public. The criminal nature of what he was doing, if that is what it was found to be, was not an aspect of his private life that he was entitled to keep private. I agree with Lord Toulson that on the facts here the criminal nature of what the appellant was doing was not an aspect of his private life that he was entitled to keep private. He could not have had an objectively reasonable expectation that such photographs, taken for the limited purpose of identifying who he was, would not be published. I would not however hold that the mere fact that a person is photographed in the course of a criminal activity deprives him or her from the right to prevent the police from publishing the photographs. Thus, if the photographs had been published for some reason other than identification, the position would have been different and might well have engaged his rights to respect for his private life within article 8.1. I would not therefore put the point quite as broadly as Lord Hope does in para 21 of Kinloch quoted above. I respectfully differ from Lord Kerr in so far as he distinguishes the position of a child. I adhere to the views I expressed in Murrays case to which Lord Toulson refers at paras 88, 96 and 98. As ever, all depends upon the circumstances of the case and, in the case of a child, the context is of particular importance. So, for example, the attributes of the child, the nature of the activity in which he or she was involved, the place where the activity was happening and the nature and purpose of the intrusion complained of are all relevant factors. I do not think that any of the decisions of the European Court of Human Rights to which we were referred leads to any other conclusion, although I accept that it does not always refer to the reasonable expectation point. As Lord Toulson says at para 96, in Murray the Court of Appeal (comprising Laws, Thomas LJJ and myself) approved the approach of Patten J at first instance so far as a child is concerned. I remain of that view today. All the factors identified by Patten J as quoted by Lord Toulson are relevant or potentially relevant in considering whether article 8.1 is engaged in a particular case. Thus I agree with Lord Toulson at para 98 that the age of the person involved, the presence or absence of consent to publication, the context of the activity and the use to which the relevant material is put are all relevant. The law is to be applied broadly, taking account of all the circumstances of the case. In Lord Steyns famous phrase, in law context is everything. In the instant case, for the reasons given by Lord Toulson at paras 100 to 102, I agree with him that the test is not satisfied on the facts of this case, which involves the publication, in the recent aftermath of criminal activity, of photographs taken of public rioting for the purpose of identifying those involved. I reach that conclusion having regard to all the circumstances of the case, including the fact that the appellant was 14 at the material time.

The Appellant, referred to in these proceedings as JR38, was involved in serious rioting which took place in Derry in July 2010. At the time he was 14 years old. CCTV images taken of him in the course of rioting were later published in two newspapers as part of a police campaign designed identify individuals involved in the riots and also to discourage further sectarian rioting. The Appellant complained that the publication of the images breached his rights under Article 8 of the European Convention on Human Rights. Dismissing the application, the Divisional Court held that the Appellants Article 8 right was engaged because that the published image was of a child, where it was at least possible he was involved in serious public disturbances. This risked stigmatising the child and impairing his rehabilitation and reputation. The interference with Article 8 was justified, however, because it was necessary for the administration of justice and not excessive in the circumstances. The Supreme Court unanimously dismisses the appeal. Lord Kerr, with whom Lord Wilson agrees, holds that Article 8 is engaged but the interference with the right is justified. Lord Toulson, with whom Lord Hodge agrees, holds that Article 8 is not engaged, but if it were engaged the publication would be proportionate. Lord Clarke writes a separate judgment concurring with Lord Toulson. Lord Kerr examines the Strasbourg jurisprudence on engagement of Article 8 and concludes that a nuanced approach is needed to reach a conclusion on this issue [55]. The test is essentially a contextual one, involving not only whether the person asserting the right had a reasonable expectation of privacy but also many other possible factors such as the applicants age, consent, the risk of stigma and the use to which the published material is put. Reasonable expectation of privacy may be a factor of considerable weight but it is not determinative [56]. In the present case Article 8 is engaged because of JR38s age and the effect which the publication of the photographs may have on him. The emphasis under Article 8 should be on the publication of the photographs rather than the activity in which the Appellant was engaged [65]. Lord Kerr concludes, however, that the interference with Article 8 is justified. The police were entitled to disclose the image under the Data Protection Act 1998 as the publication was for the purposes of the prevention and detection of crime and the apprehension and prosecution of offenders [70]. Publication furthered these objectives as well as seeking to divert young people from criminal activity [73]. The polices painstaking approach showed that this was a measure of last resort [76 77]. The publication struck a fair balance between the interests of the Appellant and the community. Appellant stood to benefit from being diverted from criminal activity, as did his community from the prevention of crime and apprehension of offenders [79 80]. Lord Toulson concludes that Article 8 is not engaged. The touchstone for engagement of Article 8 is whether the person seeking to assert their rights had a reasonable expectation of privacy [88]. The fact that the Appellant was a child at the relevant time does not justify using another test but may be relevant to its application [95]. It is an objective test [98]. There was no reasonable expectation of privacy in these circumstances. Article 8 does not exist to protect rioting and the Appellants involvement in the riot was not an aspect of his private life which he was entitled to keep private [100]. Alternatively, if Article 8 were engaged, any interference with the Appellants Article 8 right was justified for the reasons given by Lord Kerr [103]. Lord Clarke holds that Article 8 was not engaged or, alternatively, that any engagement was justified. The relevant test is whether there was a reasonable expectation of privacy [107]. The Appellant could not have had an objectively reasonable expectation that such photographs would not be published [112].

William Leonard McMullan, known as Lenny McMullan, and Denise Brewster lived together for some ten years before December 2009. On Christmas Eve that year, they became engaged. Sadly, Lenny McMullan died two days later. His death was sudden and unexpected; he was only 43 years old. He was found dead in the home that he shared with Ms Brewster in Lilac Avenue, Coleraine, County Londonderry. The couple had bought the house together in April 2005. Mr McMullan died intestate. He had no children. At the time of his death, Mr McMullan was employed by Translink, the company which provides Northern Irelands public transport services. He had worked for that company for approximately 15 years. Throughout that time Mr McMullan was a member of and paid into the Local Government Pension Scheme Northern Ireland (the scheme). The first respondent, the Northern Ireland Local Government Officers Superannuation Committee (NILGOSC), is the statutory body responsible for administering the scheme. When Mr McMullan died, NILGOSC administered the scheme pursuant to the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations (Northern Ireland) 2009 (SI 2009/32) (the 2009 regulations). The second respondent, the Department of the Environment for Northern Ireland (DENI), made and was responsible for the 2009 regulations. Among other things, the 2009 regulations provide for the payment of retirement pensions to members of the scheme and for the payment of pensions and other benefits to certain survivors of members. In April 2009, on the coming into force of the 2009 regulations, a cohabiting surviving partner became eligible for the first time, for payment of a survivors pension. But, in order to qualify for payment of the pension, a cohabiting surviving partner had to be nominated by the member. Ms Brewster believes that Mr McMullan had completed a form in which he nominated her. NILGOSC says, however, that it did not receive the form and has refused to pay her a survivors pension. The appeal has proceeded on the basis that the nomination was not made. Ms Brewster applied for judicial review of NILGOSCs decision not to award her a survivors pension, arguing that the absolute requirement of nomination imposed on unmarried partners as a condition of eligibility for a survivors pension under the 2009 regulations constitutes unlawful discrimination contrary to article 14 of the European Convention on Human Rights and Fundamental Freedoms (ECHR), when read in conjunction with article 1 of the First Protocol (A1P1) to ECHR. In a judgment delivered on 9 November 2012, (neutral citation [2012] NIQB 85) Treacy J held that the nomination requirement was an instrument of disentitlement (para 59) in relation to unmarried partners and that whilst the impugned regulations pursued a legitimate aim, there was not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. He therefore made an order declaring that the requirement of nomination of a cohabiting partner in the 2009 scheme was not compatible with article 14 ECHR read together with A1P1. He quashed the decision of NILGOSC dated 1 July 2011 by which it had declined to pay the appellant a survivors pension. NILGOSC and DENI appealed. On 1 October 2013, by a majority, Girvan LJ dissenting, the Court of Appeal (Higgins, Girvan and Coghlin LJJ, neutral citation [2013] NICA 54) allowed the appeal. Higgins LJ found that the nomination requirement was not unjustified or disproportionate; and Coghlin LJ also concluded that the requirement had not been shown to be manifestly without reasonable justification. Survivor benefit schemes for unmarried partners of public service employees In December 1998, the government in Westminster published a Green Paper on pension reform. It was entitled A new contract for welfare: partnership in pensions. The Green Paper stated that occupational pension schemes were one of the great welfare success stories of this country (para 1, p 65). It was observed that, [m]ost large occupational pension schemes in the private sector now provide survivors benefits for the unmarried partners of the opposite sex of scheme members, although in the overwhelming majority of cases this is at the discretion of the trustees (para 59, p 76). At the time of the publication of the Green Paper, in contrast to private sector schemes, public service schemes only provided survivors pensions to the spouse of a deceased member (para 60, p 76). The first public sector scheme to introduce survivors pensions for unmarried partners was the Civil Service Pension Scheme in 2002. It included a requirement to jointly [make] and [sign] a declaration in a form prescribed by the Minister. No evidence has been proffered as to why the requirement for such a declaration was included. In October 2004 a consultation exercise was conducted into the operation of the England and Wales Local Government Pension Scheme: Facing the Future - Principles and propositions for an affordable and sustainable Local Government Pension Scheme in England and Wales. This was carried out through the Office of the Deputy Prime Minister. It was proposed that survivors benefits be extended generally to cohabiting partners, provided that members of individual schemes wanted this and were prepared to meet the extra cost involved. The consultation paper suggested that certain considerations arose because of the different situations of, on the one hand, married or civil partners and, on the other, cohabiting unmarried couples but the only consideration referred to in the paper itself was the nature of proof required in the latter case to establish they were living together as if they were husband and wife or civil partners. Outlining the types of evidence that would be required to verify the authenticity of the relationship, the paper adumbrated a number of different requirements, including that there be a valid nomination of a partner with whom there would be no legal bar to marriage or civil registration - essentially an opt-in obligation: para B8.7. Once again, the consultation paper provided no explanation as to why it was thought that evidence of a valid nomination was needed in addition to objective evidence of the nature of the relationship. Moreover, there was no consultation question inviting response to the proposed evidence requirements. In June 2006 a further consultation paper was issued setting out four options, all of which proposed survivors pensions for cohabitants but none of which contained a nomination requirement: Where next? - Options for a new-look Local Government Pension Scheme in England and Wales. The consultation paper stated, however, that the Law Commission was conducting a project on cohabitation and that a final report was expected by August 2007. It was noted that the Law Commission was considering the case for allowing cohabiting couples to opt-in to a scheme imposing enforceable financial obligations in the event of their separation: paras 6.14-6.15. The Law Commissions inquiry into and subsequent report on cohabitation was, of course, conducted on a much wider plane than consideration of survivors benefits for unmarried partners of public service employees. The consultation paper published in advance of the commissions consideration ranged over all manner of financial protection for unmarried cohabiting couples: Cohabitation: The Financial Consequences of Relationship Breakdown (2006) (Consultation Paper No 179). A key element of the discussion was whether an opt-in provision was required in order to anchor financial security for cohabiting partners. In its consultation paper the commission adverted to the fact that opt-in schemes had been introduced in several European states and elsewhere but that the take-up for these schemes, even where open to both opposite-sex and same-sex couples, is generally low: para 5.45. The reasons for that were discussed in the consultation paper. It could be that one partner was unwilling to make the commitment or that the other, willing to make the commitment, was reluctant to raise it lest that jeopardise the relationship. As the consultation paper pointed out at para 5.28, it might be considered too harsh to deny all legal protection to the economically weaker party in the event of separation. Even if the failure to take that step were due to inertia, or a lack of proper appreciation of the legal significance of not taking that step, the harshness of the result in some cases could be regarded as a wholly disproportionate sanction for that inactivity. The commissions provisional view was set out in paras 5.53 and 5.54 of the consultation paper: 5.53 In our view, a scheme that applied by default to eligible cohabitants, subject to a right to opt out, would create an appropriate balance between affording scope for party autonomy and securing fairer outcomes for individuals at the end of cohabiting relationships. It would mean that inactivity would not, as it currently does, leave the more vulnerable party unprotected at the point of separation: the scheme would apply by default in the absence of a valid opt-out agreement. 5.54 Many other jurisdictions have adopted this approach, following the trend set in 1984 by New South Wales, the first jurisdiction to create a statutory scheme for financial relief between cohabitants. That pattern has been replicated across other jurisdictions, including the rest of Australia, most of the Canadian provinces, New Zealand, some parts of Spain, Sweden and, most recently, Scotland. After extensive consultation, the Law Commissions final report was duly published on 3 July 2007 (Cohabitation: The Financial Consequences of Relationship Breakdown (Law Com No 307) (Cm 7182)) and, having observed that most consultees had agreed with the commissions provisional view, it firmly rejected an opt-in requirement. The penalisation of cohabitants for their failure to subscribe to an opt-in scheme was discussed at para 2.88 of the report: research suggests that providing people with information about the law and what they should do to protect their legal position does not guarantee that they will take those steps, or even be able to do so. Indeed, while there was considerable support among respondents to the Living Together Campaign survey for opt-in regimes, the fact that so few of those individuals had taken action based on the information that they had obtained suggests that few would in practice register their relationship or be able to do so. A major underpinning of the commissions preference for the opt-out scheme was the protection of the vulnerable partner in the relationship and this might be considered to have more direct relevance to separation of cohabiting partners, rather than the death of one of them. The latter situation was discussed in the commissions report at para 6.13 where it was stated: It is important not to equate separation and death. Many consultees felt, and we agree, that there is a qualitative difference between a relationship cut short by death and a relationship terminated by separation. On separation, there has ordinarily been a failure of commitment by at least one of the parties. It is, therefore, legitimate when considering the eligibility of separating couples under our recommended scheme to ask whether the length of the relationship indicated that there was, at least at one time, sufficient commitment between the parties to justify bringing the relationship within the scheme. Where a relationship is terminated by death, however, the ending of the relationship does not of itself suggest that there was any lack of commitment on either side. This qualitative difference may well affect what should be regarded as reasonable financial provision on death and who should be eligible to make a claim under the 1975 [Inheritance (Provision for Family and Dependants)] Act. It is, of course, the case that these comments were made in the context of whether cohabitants should be included in the categories of person entitled to make an inheritance claim under the 1975 legislation. But important general considerations underlie the observations. In the first place, it will be more readily deducible that the requisite level of commitment existed between the parties where the ending of the relationship is brought about by death rather than separation. Secondly, notions of fairness have an obvious role to play when one is considering whether it is right to deny financial benefit to a surviving unmarried partner when a married partner would have an automatic right to that benefit. These considerations bear on the justification for the preservation of the requirement of nomination in the impugned regulations. The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 (SI 2007/1166) (which, of course, applied in England and Wales) were laid before Parliament in April 2007, three months before the Law Commissions report was published. Notwithstanding the fact that no proposal for a nomination requirement had been made in the consultation paper, such a requirement featured in regulations 24 and 25. The Explanatory Note to the regulations did not give a reason for the nomination requirement. The Local Government Pension Scheme in England and Wales was revised in 2013 with effect from 1 April 2014 for claims arising after that date: the Local Government Pension Scheme Regulations 2013 (SI 2013/2356). The revisions included the removal of the opt-in or nomination requirement for unmarried couples. The same change was made to the Scottish scheme by the Local Government Pension Scheme (Scotland) Regulations 2014 (SSI 2014/164). The circumstances in which these changes took place and why they were not introduced in Northern Ireland are discussed in paras 24-28 below. The background to the Northern Ireland scheme In an affidavit filed in these proceedings on behalf of DENI, Marie Cochrane, a deputy principal in the department, stated that the scheme in Northern Ireland had mirrored the scheme in Great Britain because it was considered to be generally desirable that local government employees should have equivalent pension benefits right across the UK. In August 2006, therefore, while the consultation in England and Wales was taking place, a separate consultation exercise was begun in Northern Ireland. Although the Northern Ireland exercise was separate from that which had started in England and Wales some two months before, the consultation paper for the latter formed the centrepiece of the documentation sent to consultees in Northern Ireland. Consultees were told that the Northern Irish scheme maintains parity with the scheme in Great Britain. As earlier noted, the consultation paper for England and Wales did not suggest a nomination requirement in any of the four proposals that it contained. Nor did the letter from Ms Cochrane which started the consultation process in Northern Ireland. Despite the absence of any reference to a nomination requirement, NILGOSC, in its response to the consultation letter, raised the issue. In its letter of 9 October 2006 to DENI, it pointed out that the Civil Service Pension scheme stipulated that there be a valid nomination of a cohabiting partner to receive a survivors pension. NILGOSC immediately referred to a number of inequalities that would arise from such a requirement and to the possibility of legal challenge if these were not addressed. These included:- 1. The fact that married or civil partners did not have to be living together in order to benefit from the scheme, whereas cohabiting unmarried partners did; 2. A married or civilly registered couple did not have to be in an exclusive, long term relationship established for a minimum of two years in order for a survivor pension to be paid; and 3. A survivor pension would automatically be paid to a married or civilly registered partner; no nomination was required in their case. The lack of a valid nomination form was likely to result in disputes where all the other criteria were met. Since neither the consultation paper for the England and Wales exercise nor the letter from Ms Cochrane which set the Northern Ireland consultation in train contained any reference to a nomination requirement, it is unsurprising that no policy objectives that might be achieved by such a requirement were identified by DENI when it set up the consultation process. But the letter from NILGOSC certainly brought the question of the need for such a requirement to centre stage. The appellant has pointed out that no evidence has been produced by DENI to show that the matter was considered at all, even after the letter from NILGOSC was received. Indeed, the only policy driver which emerges from a consideration of contemporary documents is the need to maintain parity with the rest of Great Britain. No independent assessment of the need for or the viability of a nomination requirement was undertaken. It appears that no attempt was made to address the possible difficulties that NILGOSCs letter had identified. The 2009 Regulations The 2009 Regulations were made under powers conferred by the Superannuation (Northern Ireland) Order 1972 (SI 1972/1073 (NI 10)). Article 9 of that Order allowed DENI to make regulations providing for pensions, allowances or gratuities to be paid to or in respect of such persons, or classes of persons, as were to be prescribed. In general, these were persons employed by local authorities and other public service employees. On 6 June 2008 DENI invited consultees to comment on the draft regulations. The draft regulations included the nomination requirement. The only reference to this in the 6 June letter was that survivor benefits would be payable to widows, widowers, civil partners and nominated cohabiting partners, but the letter did not provide any explanation for the reason for including a condition of nomination nor did it specifically invite comment on it. The 2009 Regulations were made on 25 February 2009 and the new Pension Scheme came into effect on 1 April 2009. The relevant provisions are contained in regulations 24 and 25. The material parts of those regulations are as follows: 24(1) If a member dies leaving a surviving spouse, nominated cohabiting partner or civil partner, that person is entitled to a pension payable from the day following the date of death 25(1) Nominated cohabiting partner means a person nominated by a member in accordance with the terms of this regulation. (2) A member (A) may nominate another person (B) to receive benefits under the Scheme by giving the Committee a declaration signed by both A and B that the condition in paragraph (3) has been satisfied for a continuous period of at least two years which includes the day on which the declaration is signed. (3) The condition is that - (a) A is able to marry, or form a civil partnership with, B; (b) A and B are living together as if they were husband and wife or as if they were civil partners; (c) neither A nor B is living with a third person as if they were husband and wife or as if they were civil partners; and (d) B are financially interdependent. either B is financially dependent on A or A and (4) But a nomination has no effect if the condition in paragraph (3) has not been satisfied for a continuous period of at least two years which includes the day on which the declaration is signed. (5) A nomination ceases to have effect if - either A or B gives written notice of revocation (a) to the Committee; (b) A makes a subsequent nomination under this regulation; (c) either A or B marries, forms a civil partnership or lives with a third person as if they were husband and wife or as if they were civil partners; or (d) B dies. (6) B is As surviving nominated partner if - the nomination has effect at the date of As death; (a) and (b) B satisfies the Committee that the condition in paragraph (3) was satisfied for a continuous period of at least two years immediately prior to As death. It is clear that mere nomination will not satisfy the requirements of regulation 25. By para (4) of the regulation, nomination has no effect if the condition specified in para (3) has not in fact been satisfied for the requisite period. And by para 6(b) the nominated partner is required to satisfy the committee that the condition in para (3) had indeed been fulfilled. So the applicant must show that she has been a cohabitant for two years before the date of declaration and been in that position for two years before the date of death. The provisions demand of the surviving cohabitant that she or he prove to the satisfaction of the committee that the stipulations in para (3) have been met. They are freestanding of the nominating procedure. The question therefore arises, what is the function of requiring nomination? The appellant says that it adds nothing to the process of establishing that the qualifying conditions have been met. The 2013 Regulations in England and Wales and the 2014 Regulations in Scotland The Local Government Pension Scheme in England and Wales was revised with effect from 1 April 2014 for claims arising after that date. The revisions included the removal of the opt-in requirement for unmarried couples. Survivors pensions are now available to cohabiting partners. They are defined in Schedule 1 to the Local Government Pension Scheme Regulations 2013 as follows: cohabiting partner means a person whom the appropriate administering authority is satisfied fulfils the following conditions - (a) the person (P) has fulfilled the condition in paragraph (b) for a continuous period of at least two years on the date the member (M) died, and (b) the condition is that - (i) M is able to marry, or form a civil partnership with P, (ii) M and P are living together as if they were husband and wife or as if they were civil partners, (iii) neither M nor P is living with a third person as if they were husband and wife or as if they were civil partners, and (iv) either P is financially dependent on M, or M and P are financially interdependent. As stated in para 16, the same change was made to the Scottish scheme by the Local Government Pension Scheme (Scotland) Regulations 2014. The circumstances in which the nomination requirement in the England and Wales scheme was removed were explained in an affidavit of Chris Megainey, the deputy director (Workforce, Pay and Pensions) in the Department for Communities and Local Government (DCLG). He explained that the first consultation document which was issued before the draft 2013 regulations were prepared had included a proposal that the nomination requirement be maintained but consultees were invited to address the question of the need for its retention in light of the decision of Treacy J in the present case. Seventeen of the responses which were received (a significant majority) expressed a wish that DCLG should explore the possibility of introducing a less onerous system for determining a cohabiting partners entitlement to a survivors pension. In response to these replies, further consultations took place and it was decided that the nomination requirement should be removed. In a second affidavit, Mr Megainey said that, to the best of his knowledge and belief, the nomination requirement was removed from the legislation because it was considered to be unnecessary. Kimberley Linge, Policy Manager in the Scottish Public Pensions Agency (SPPA), explained the reasons for the change in the Scottish regulations. She said that after the Court of Appeal had given its decision in the present case, SPPA had sought advice from the Scottish Government Legal Department about the nomination issue. The advice received was to the effect that the nomination requirement was an overly burdensome one for cohabitants when compared with the requirements imposed on married partners and civil partners. Initially, that advice was not acted upon but following discussion at the Scottish Local Government Pension Scheme Advisory Group (a tripartite group comprising the unions, the Convention of Scottish Local Authorities and the Scottish Government) it was agreed to dispense with the nomination requirement. The application to re-open the appeal When the appellants advisers became aware of the changes to the English 2013 and the Scottish 2014 regulations, they applied to the Court of Appeal for a re- opening of the appeal. This was against the background that in the draft amended regulations which had been proposed in Northern Ireland in 2014 the nomination requirement was to be retained. DENI opposed the application to re-open the appeal. In an affidavit filed to support DENIs opposition to the reopening of the appeal, Ms Cochrane stated: I can confirm that the Department was not aware, at the date of hearing of this Appeal, of the intention of DCLG to amend the specific provision on the nomination requirement for a cohabiting partner survivor benefit. The Department, which is not copied into consultations by DCLG, first became aware of the existence of the 20 June 2013 consultation document on or about 24 June 2013 through either the DCLG website or through a specialist pensions bulletin published by Pendragon. However, the Department did not become aware of the relevant part of the 20 June 2013 consultation until some point after 8 July 2013 Having become aware of the relevant part of the 20 June 2013 consultation document, I did not consider that this could have any bearing upon the Brewster case because the said case had already been heard on 8 and 9 May 2013 and because the proposed changes were prospective and related only to England & Wales. Also a separate process for the development of proposals for the reformed Local Government Pension Scheme in Northern Ireland was underway. I was not aware of the need to advise Departmental Solicitors Office of a prospective change in another jurisdiction and consequently did not do so. The application to re-open the appeal was refused on 22 May 2014 and the Northern Irish scheme was revised on 27 June 2014. The new scheme did not remove the nomination requirement for unmarried couples. No evidence has been offered of any contemporaneous consideration of the need to preserve this requirement or of the desirability of amending the Northern Irish scheme so as to bring it into line with the changes in the rest of the United Kingdom, notwithstanding that before Treacy J and the Court of Appeal, DENI had relied on the allegedly critical importance of parity with the England and Wales scheme. The policy behind the nomination requirement Ms Cochrane dealt with the policy objectives underlying the 2009 Regulations and, in particular, the procedural requirements for cohabitants claiming survivor benefit in para 13 of her first affirmation, dated 21 February 2012, where she said: the decision to introduce in Northern Ireland the same procedural requirements for claiming a survivors benefit was heavily influenced by the reforms already introduced in England & Wales. The policy objectives of those requirements were those identified in the 2004 consultation paper issued by the Office of the Deputy Prime Minister. They were designed to ensure that the existence of a cohabiting relationship, equivalent to marriage or civil partnership was established in an objective manner and also that the wishes of the scheme member had been identified through the execution of a valid nomination form during his lifetime. One can understand why the procedural requirements designed to establish that a genuine and subsisting relationship existed had been included in the regulations. But this does not explain why a nomination was required. If it was shown (as, for the reasons given in para 23 above, it had to be) that there was indeed a cohabiting relationship which satisfied the tests as to its genuineness and existence at the time of the death, why was a nomination process needed? This added nothing to the evidential hurdle which a surviving unmarried partner of a scheme member had to face. If the requirements in regulation 25(3) (other than the making of a nomination) are satisfied, the only conceivable object of the nomination requirement was to find out what the scheme member wanted. But what had those wishes to do with the question of entitlement? It is not enough simply to state that the procedural requirements were designed to ensure that the wishes of the scheme member had been ascertained, in order to invest that aim with the necessary attribute of legitimacy. The confirmation of those wishes does not have some intrinsic, undeniable value. The purpose behind the avowed need to ascertain them must be stated. It has been said that its purpose was not to permit a scheme member to prevent, for vindictive reasons, his cohabiting partner from receiving a survivors benefit, although, on its face, it certainly had that potential. If that was not its purpose, what then was it? DENI adopted Higgins LJs characterisation of the purpose of the scheme to be to permit some cohabitants in certain defined circumstances to obtain the same pension provision as those who are married or in a civil partnership - para 17 of his judgment. DENI expressly disavowed the legitimate aim of the regulations which Treacy J had identified viz to facilitate entitlement without discrimination on grounds of status. What the judge had said about the aim of the regulations appears at para 54 of his judgment: The aim or underlying objective of this aspect of the pension scheme is to place unmarried, stable, long-term partners in a similar position to married couples and those in a civil partnership to facilitate entitlement to a pension without discrimination on the grounds of status. DENIs repudiation of the judges description of the aim of the regulations (in so far as they relate to the treatment of surviving unmarried partners of scheme members) is, to say the least, surprising. It is especially so in light of DENIs proper - but inevitable - acceptance that the provision of a survivor benefit under the scheme engages A1P1 of ECHR and that the appellants status, as a person who was in a cohabiting relationship other than a marriage or a civil partnership at the time of her partners death, is a relevant status for the purposes of article 14 ECHR. The judge had been careful to couch his description of the aim of this aspect of the pension scheme in terms which reflected the stability and long term nature of the relationship. It surely must be the case that the regulations were geared to eliminate unwarranted differences of treatment between married or civil partner survivors on the one hand and, on the other hand, those unmarried long term partners who were in a stable relationship with the scheme member before death. Given DENIs acceptance that the provision of a survivor benefit engages A1P1 and that the appellant has the requisite status to rely on article 14, unwarranted (ie unjustified) difference of treatment (ie discrimination) would bring it into breach of its ECHR obligations if such unequal treatment was not eradicated. In my view, DENI simply cannot be heard to say that elimination of unjustified difference of treatment between, on the one hand, the survivor of a scheme member who establishes that they were in a stable long term relationship with that member and, on the other, a married or civil partner of a scheme member was not the aim of the inclusion of unmarried partners within the survivors entitlement. This must have been its objective and, expressed in that way, it is no more than a rephrasing of the judges formulation of the aim. The error of DENIs submission on this point and, with respect, Higgins LJs characterisation of the aim of the regulations on this aspect is to confuse the aim with the means employed to achieve it. Permitting some cohabitants in certain defined circumstances to obtain the same pension provision as married or civil partner survivors is the way in which unjustified discrimination is avoided. It is not an end in itself. The essential question, therefore, is whether imposing a nomination requirement in fact conduces to unwarranted difference of treatment or to its removal. It is for this reason that it is relevant to note that the wishes of a married scheme member did not have to be stated or ascertained. If nomination was not required of a married survivor of a scheme member and if the overall aim of the amended regulations was to place a surviving cohabitant who was in a stable, long term relationship with the deceased scheme member on an equal footing with a surviving spouse or civil partner, the need for a nomination procedure in the case of the cohabitant is difficult to find. If it was designed to test the truth of a claim that the relationship was stable and long-lasting, that would be one thing. But it was not. The obligation to establish those features of the relationship was entirely independent of the nomination procedure. Nothing in the contemporaneous documentation suggests that this consideration underlay its inclusion in the scheme. One must therefore look elsewhere to find out why the nomination procedure was considered to be needed. As to the averment in Ms Cochranes affirmation that the policy objectives of the procedural requirements were those identified in the 2004 consultation paper issued by the Office of the Deputy Prime Minister, Girvan LJ correctly pointed out at para 6 of his judgment in the Court of Appeal, that that consultation paper provides no explanation as to why nomination would or should be evidentially required. The 2004 paper is of no assistance, therefore, as to any objective which the nomination procedure might achieve. Moreover, as again Girvan LJ rightly observed in para 6, there was simply no evaluation of the pros and cons of having a nomination or opt-in procedure. The only discernible reason operating at the time the 2009 regulations were made was that it was considered necessary and/or desirable that they should mirror the provisions in England and Wales. Post hoc justification for the nomination requirement In para 15 of her first affirmation, Ms Cochrane alluded to the formal dimension that the nomination procedure brought to a claim for survivors pension. She said: It is the view of the Department that these [procedural] requirements are reasonable and proportionate measures designed to establish in a formal manner, the intentions of the deceased about a matter which has testamentary significance. Furthermore, cohabiting relationships are different from marriage and civil partnerships insofar as they may be commenced and ended without legal formality and do not involve a change of an individuals legal status. The Department is of the view that if a Scheme member chooses to have a cohabiting relationship which is neither marriage nor civil partnership, the requirements of the 2009 Regulations are an appropriate means by which to determine the existence, formality and status of the relationship in addition to obtaining independent verification of the deceaseds wishes. It has not been suggested by DENI that these considerations featured in its assessment of whether a nomination procedure was required before the 2009 Regulations were made. They must nevertheless be considered now in order to see whether they support the claim as to the reasonableness and proportionality of the measure. The value of formality in this setting is not explained. Since the regulations require a surviving cohabitant to establish that she or he had been in a long term relationship with the scheme member, it is difficult to see what formality adds to the question of entitlement. The same may be said of the circumstance that cohabitation does not involve a change in legal status. It is in the very nature of cohabitation that there is no legal formality or change of status involved. But there is no immediately obvious reason that some ersatz substitute for the legal formality of marriage or civil partnership would contribute to the assessment of a cohabitants entitlement to a survivors pension. That entitlement derives from the survivor having been in a longstanding relationship with the scheme member. In so far as the use of the word existence in the final sentence of the cited passage connotes some extra proof of the relationship, as I have already pointed out, the terms of regulation 25 require the survivor to establish by independent means that the relationship was of the nature and duration required to satisfy the schemes requirements. There was no further need of proof beyond this. On the question of the verification of the deceaseds wishes, I have already made clear in paras 31-36 above why I do not consider that this is a relevant consideration. Before the Court of Appeal, both respondents took up the theme of testamentary significance, which had been foreshadowed in Ms Cochranes affirmation. They submitted that by lodging a nomination form, the scheme member and her or his cohabitant were required to make a public affirmation akin to the formal and public commitment of marriage and that this added a necessary ingredient of correctness to the process. This argument found favour with the majority, Higgins LJ, describing it as crucial (para 19) and Coghlin LJ characterising the nomination form as a public statement from both participants equivalent to the production of a certificate of marriage or civil partnership (para 23). The need for a formal or public affirmation is not explained. Certainly, in this context, it has no inherent value. It does not, of and in itself, make the survivor any more deserving of the pension. The essence of entitlement is that the relevant parties have lived together for a sufficiently long period and that one is financially dependent on the other or that they are financially interdependent. Being required to make a public declaration that these conditions obtain adds nothing to the objective inquiry as to whether they in fact exist. Arguments were also advanced to the effect that administrative costs would increase if the nomination procedure was abandoned and that actuarial predictions were easier with that procedure in place. No evidence to support those claims was presented to the Court of Appeal and the arguments were not pursued before this court. Echoes of them might be found in the printed case of DENI to the effect that the nomination requirement is a bright-line inclusionary rule of general application directed to workability and legal certainty but again no material to establish the truth of these assertions was proffered. It is clear, therefore, that the making of a nomination adds nothing to the evidential demands made of a survivor to show that she or he was in a longstanding relationship with the deceased scheme member and that they were either financially dependent on or financially interdependent with the deceased. It is also evident that no intrinsic value attaches to the making of such a nomination. The areas of agreement of A1P1 which provides: It is not in dispute that the denial of a survivors pension falls within the ambit 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. Although the right to a pension might not be regarded, in conventional terms, as a possession, it is well settled that A1P1 protects possessions, which can be either existing possessions or assets, including claims, in respect of which the applicant can argue that he or she has at least a legitimate expectation of obtaining effective enjoyment of a property right. It does not, however, guarantee the right to acquire property (see Kopeck v Slovakia (2004) 41 EHRR 43, para 35 (GC) and J A Pye (Oxford) Ltd v United Kingdom (2007) 46 EHRR 45, para 61 (GC)). It is likewise not in dispute that the appellant, as a person who was in a cohabiting relationship other than a marriage or a civil partnership at the time of her partners death, enjoyed a relevant status for the purposes of article 14 ECHR (In re G (Adoption Unmarried Couple) [2008] UKHL 38; [2009] AC 173, paras 8, 107 and 132). Article 14 provides that the enjoyment of the rights and freedoms in ECHR shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. It was also agreed that a surviving unmarried partner falling within regulation 25(6)(b) of the 2009 Regulations is in an analogous situation to a surviving married partner or civil partner. The single area of dispute between the parties, therefore, is whether the interference with the appellants right to property has been objectively justified - see para 13 of Higgins LJs judgment. The starting point in the analysis of whether there is objective justification for interference with the appellants right to property must be the duty of the state to secure her entitlement to equal treatment. Unlike, for instance, the duty under article 8 of ECHR, which enjoins the state to respect the citizens right to a private life etc, article 14 requires of the state that it should ensure that her rights under ECHR are in place unless there is objective justification for denying them to her. The European Court of Human Rights (ECtHR) has been careful to question whether discrimination in the enjoyment of survivors rights based on some prior failure to regularise a relationship has been justified: Marckx v Belgium (1979) 2 EHRR 330. In that case ECtHR held that the limitations placed on the capacity of an unmarried mother to give and bequeath, and her child to take and inherit, property were discriminatory if they had no objective and reasonable justification in the sense that there was no reasonable relationship of proportionality between the means employed and the aim sought to be realised: para 33. The obligation to secure rights must require a greater level of vigilance on the part of the state authorities than is animated by a duty to have respect for a particular species of right. The duty to secure rights calls for a more proactive role than the requirement to respect rights. The question whether justification has been demonstrated must be assessed objectively - see R (SB) v Governors of Denbigh School [2006] UKHL 15; [2007] 1 AC 100, para 30, per Lord Bingham of Cornhill. That is not to say, however, that the court should substitute its view for that of the decision-maker. Indeed, it may be appropriate to accord a wide margin of discretionary judgment to the conclusion of a decision-maker, particularly where it is the legislature that makes the choice and where the conclusion lies within the field of socio-economic policy. Thus, for instance, in the case of Swift v Secretary of State for Justice [2013] EWCA Civ 193; [2014] QB 373, where a claim pursuant to section 1(3)(b) of the Fatal Accidents Act 1976 was dismissed because, although the claimant was a cohabiting partner of the deceased, she did not meet the condition of having lived in the same household for a period of two years immediately before the date of death, it was held that Parliament was better placed than the courts to appreciate what was in the public interest on an issue of socio-economic policy (para 24). But the margin of discretion may, of course, take on a rather different hue when, as here, it becomes clear that a particular measure is sought to be defended (at least in part) on grounds that were not present to the mind of the decision-maker at the time the decision was taken. In such circumstances, the courts role in conducting a scrupulous examination of the objective justification of the impugned measure becomes more pronounced. An example of this is to be found in the case of Belfast City Council v Miss Behavin Ltd [2007] UKHL 19; [2007] 1 WLR 1420, paras 46-47, where Lord Mance asked: what is the position if a decision-maker is not conscious of or does not address his or its mind at all to the existence of values or interests which are relevant under the Convention? The court is then deprived of the assistance and reassurance provided by the primary decision-makers considered opinion on Convention issues. The courts scrutiny is bound to be closer, and the court may have no alternative but to strike the balance for itself, giving due weight to such judgments as were made by the primary decision-maker on matters he or it did consider. The appellant has submitted that where the decision-maker has not made any judgment, in advance of its decision, about the factors which it later deploys in support of that decision, no institutional deference can be due to such post hoc logic. Ms Mountfield QC, who appeared for the appellant, has argued that those factors must be judged on their own terms. They should be given only such weight as their cogency and any supporting evidence warrant. While accepting that such factors could, in principle, attract weight as a result of the particular experience or expertise of the deciding body, she argues that the court should not exercise restraint by virtue of the bodys constitutional responsibility for taking the decision, because the factors advanced post hoc did not form any part of the reasoning behind the bodys discharge of its function. I am not prepared to accept this submission without qualification. Obviously, if reasons are proffered in defence of a decision which were not present to the mind of the decision-maker at the time that it was made, this will call for greater scrutiny than would be appropriate if they could be shown to have influenced the decision- maker when the particular scheme was devised. Even retrospective judgments, however, if made within the sphere of expertise of the decision-maker, are worthy of respect, provided that they are made bona fide. DENI has submitted that the correct legal test to be applied in determining whether the nomination requirement in the 2009 Regulations is justified and proportionate is that set out in Stec v United Kingdom (2006) 43 EHRR 47 at para 52: ... a wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the court will generally respect the legislatures policy choice unless it is manifestly without reasonable foundation. Mr McGleenan QC, who appeared for DENI, pointed out that the manifestly without reasonable foundation test was adopted and applied by this court in R (JS) v Secretary of State for Work and Pensions (Child Poverty Action Group intervening) [2015] UKSC 16; [2015] 1 WLR 1449 (also known as R (SG) v Secretary of State for Work and Pensions) where at para 11 Lord Reed, having cited the test enunciated in Carson v United Kingdom (2010) 51 EHRR para 13, stated: That approach was followed by this court in Humphreys v Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545, where Lady Hale stated at para 19 that the normally strict test for justification of sex discrimination in the enjoyment of Convention rights gives way to the manifestly without reasonable foundation test in the context of welfare benefits. I am prepared to accept for the purpose of this appeal that the test to be applied is that of manifestly without reasonable foundation. Whether that test requires adjustment to cater for the situation where the proffered reasons are the result of deliberation after the decision under challenge has been made may call for future debate. Where the state authorities are seen to be applying their direct knowledge of their society and its needs on an ex post facto basis, a rather more inquiring eye may need to be cast on the soundness of the decision. Since it does not affect the outcome of this appeal, however, I am content that the without reasonable foundation formula should be taken to apply in this instance. Both DENI and NILGOSC drew heavily on the joint dissenting judgment of Lord Sumption and Lord Reed in R (Tigere) v Secretary of State for Business Innovation and Skills [2015] UKSC 57; [2015] 1 WLR 3820 in advancing the claim that where a persons status is not an immutable characteristic of the individual affected, the state should be accorded a correspondingly wide margin of appreciation when determining whether discrimination based on that status is justifiable and proportionate to its objective. The judgment was also cited in support of the bright- line rule that the nomination procedure is said to establish and in advancing the case that, in the socio-economic field, a broad area of discretionary judgment should be allowed to state authorities. These principles, well-recognised as they are, depend heavily on the context in which it is sought to apply them. As it happens, I have no difficulty in accepting that each is worthy of close consideration in this case. But whether they impel the outcome for which the respondents contend must be subject to careful examination of the particular aspects of the case which they are said to affect. To set the scene for that examination, it is necessary to look at some passages from Lord Sumption and Lord Reeds dissenting judgment. On the first of the arguments viz that where the status involved is not an immutable characteristic, there should be a commensurately broader discretion available to the decision-maker, it should, of course, be recalled that in Tigere the status concerned was one of immigration. But I accept that statements made concerning that status may apply to the present case where the status is one of cohabitant. At para 74 of the joint judgment, Lord Sumption and Lord Reed said: The Strasbourg court has accepted that a persons immigration status can be an other status for the purpose of article 14: Bah v United Kingdom (2011) 54 EHRR 773, paras 45-46. But it also made it clear that, because immigration status is not an immutable characteristic of the individual affected, the state should be accorded a correspondingly wide margin of appreciation when determining whether discrimination based on that status is justifiable and proportionate to its objective, at para 47: The nature of the status on which differential treatment is based weighs heavily in determining the scope of the margin of appreciation to be accorded to contracting states Immigration status is not an inherent or immutable personal characteristic such as sex or race, but is subject to an element of choice While differential treatment based on this ground must still be objectively and reasonably justified, the justification required will not be as weighty as in the case of a distinction based, for example, on nationality. It is relevant that the appellant and Mr McMullan had chosen not to marry for the ten years that they lived together (although, of course, they had clearly decided to change that situation shortly before he died). The appellants status is one which she chose and not one with which she was born or which she could not avoid. Unquestionably, that circumstance alters the approach that one takes to the difference in treatment to which she was subject vis--vis a married or civil partner. But should that bring about a markedly more benevolent review of the imposition of the nomination requirement? After all, the essential purpose of the change in the scheme brought about by the 2009 Regulations was to include persons such as the appellant. Moreover, it was necessary for the authorities to bring about that change in order to secure her entitlement to equal treatment and, incidentally, to comply with their obligations under ECHR and the Human Rights Act 1998. The reason that it was decided to include the nomination requirement was to make the scheme congruent with that in England and Wales. No independent evaluation of the need for this particular procedure was undertaken. It was not present to the mind of the decision-maker that a wider discretion was available because the status of those affected was not an inherent or immutable personal characteristic. For all these reasons, while this is a factor that should not be left out of account, it does not weigh heavily in the assessment as to whether the discrimination is justifiable and proportionate to its objective. On the bright-line rule argument, the respondents relied on para 91 of Lord Sumption and Lord Reeds judgment: The advantages of a clear rule in a case like this are significant. It can be applied accurately and consistently, and without the element of arbitrariness inherent in the discretionary decision of individual cases. By simplifying administration it enables speedy decisions to be made and a larger proportion of the available resources to be applied to supporting students. Young people considering applying to universities need to know whether they will get a student loan or not. The Student Loan Company, which administers the scheme, needs to process a very large number of applications for loans in the relatively short interval between the acceptance of a student by a university and the start of the academic year. The contrast between the situation in Tigere and the present case is immediately obvious. The authorities in Tigere had identified the difficulties in administration which they claimed would beset the student loan scheme if those whose immigration status was uncertain were included in it. That was central to the policy decision. The volume of applications for loans called for a clear rule, it was claimed, even though this might cause hardship in individual cases. This was a thought-through approach to what the authorities apprehended would be a considerable logistical problem. In the present case, no thought was given to possible difficulties with administration that might arise if the nomination procedure was not included in the new scheme which the 2009 Regulations introduced. Indeed, even after the appellants challenge was made, DENI has not been able to produce tangible evidence that there would be significant problems in administering the scheme if the nomination requirement was abandoned. Vague suggestions as to the workability of the scheme and the advantages of actuarial predictions were made but these were not supported by evidence. It is also significant that in England and Wales, where a significantly greater number of applications require to be transacted, it is considered that the nomination procedure is not necessary. I consider, therefore, that the desirability of a bright-line rule is, at most, of marginal significance in this case. On the argument that a broad margin of appreciation should be afforded to the decision to include the nomination procedure because it fell within the socio- economic sphere, the respondents relied on paras 75 and 76 of Lord Sumption and Lord Reeds judgment in Tigere, which quoted from a passage in Stec already referred to above at para 53. 75. Student loans are provided out of public funds on terms which are much more advantageous to students than any commercial alternative. They are a form of state benefit. Such benefits are almost invariably selective and the criteria for selection necessarily involve decisions about social and economic policy and the allocation of resources. For this reason, discrimination in their distribution gives rise to special considerations in the case law of the Strasbourg court. The test is to be found in the decision of the Grand Chamber of the European Court of Human Rights in Stec v United Kingdom, 43 EHRR 1017, para 52: 76. Commenting on this test in R (RJM) v Secretary of State for Work and Pensions [2009] AC 311, Lord Neuberger (with whom Lord Hope, Lord Walker and Lord Rodger agreed) remarked on its practical implications, observing that the fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable. The test was reviewed and reaffirmed by this court in Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545, paras 15-21 (Baroness Hale of Richmond JSC). It has recently been applied by this court in R (SG) v Secretary of State for Work and Pensions (Child Poverty Action Group intervening) [2015] 1 WLR 1449, paras 11, 69 (Lord Reed JSC). Where a conscious, deliberate decision by a government department is taken on the distribution of finite resources, the need for restraint on the part of a reviewing court is both obvious and principled. Decisions on social and economic policy are par excellence the stuff of government. But where the question of the impact of a particular measure on social and economic matters has not been addressed by the government department responsible for a particular policy choice, the imperative for reticence on the part of a court tasked with the duty of reviewing the decision is diminished. In this case, DENI was not concerned about socio-economic choices when it decided to mimic the nomination requirement that was in place in England and Wales. It was motivated solely by the desire to maintain consistency between the two schemes. Of course, after the appellants challenge materialised, the department addressed possible advantages that might accrue if the nomination requirement was maintained and, as I have said, these are not to be dismissed solely because they are the product of hindsight - nor even because they have been put forward post hoc as a possible justification for discrimination in reaction to the appellants claim. But the level of scrutiny of the validity of the claims must intensify to take account of the fact that the claims are made ex post facto and the claimed immunity from review on account of the decision falling within the socio- economic sphere must be more critically examined. A suggestion that any matter which comes within the realm of social or economic policy should on that account alone be immune from review by the courts cannot be accepted. It must be shown that a real policy choice was at stake. While it is not essential that the policy options were clearly in play at the time the choice was made, obviously, when they were, the cause for reluctance by courts to intervene is enhanced. In the present case, however, for the reasons earlier given, not only were socio-economic factors not at the forefront of the decision-making process at the time that the decision to include the nomination procedure was made, but the attempt to justify retention of the procedure on those grounds was characterised by general claims, unsupported by concrete evidence and disassociated from the particular circumstances of the appellants case. I do not consider, therefore, that this is a factor of any significance in this instance. The test for proportionality The test for the proportionality of interference with a Convention right or, as in this case, the claimed justification for a difference in treatment, is now well settled - see the judgments of Lord Wilson in R (Aguilar Quila) v Secretary of State for the Home Department [2011] UKSC 45; [2012] 1 AC 621 at para 45, Lord Sumption in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39; [2014] AC 700 para 20 and Lord Reed in Bank Mellat at para 74. As Lord Reed said, it is necessary to determine (1) whether the objective of the measure is sufficiently important to justify the limitation of a protected right, (2) whether the measure is rationally connected to the objective, (3) whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (4) whether, balancing the severity of the measures effects on the rights of the persons to whom it applies against the importance of the objective, to the extent that the measure will contribute to its achievement, the former outweighs the latter. For the reasons earlier given, I consider that the objective of the particular provisions in the 2009 Regulations which are involved here must have been to remove the difference in treatment between a longstanding cohabitant and a married or civil partner of a scheme member. To suggest that, in furtherance of that objective, a requirement that the surviving cohabitant must be nominated by the scheme member justified the limitation of the appellants article 14 right is, at least, highly questionable. Be that as it may, I consider that there is no rational connection between the objective and the imposition of the nomination requirement and that this also fails to meet the third and fourth standards in Lord Reeds formulation. Conclusion I would allow the appeal; make a declaration that the requirement in the 2009 Regulations that the appellant and Mr McMullan should have made a nomination be disapplied; and that the appellant is entitled to receive a survivors pension under the scheme. I would allow the appeal; make a declaration that the requirement in the 2009 Regulations that the appellant and Mr McMullan should have made a nomination be disapplied; and that the appellant is entitled to receive a survivors pension under the scheme.

This case concerns a requirement in the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2009 (the 2009 Regulations) that unmarried co habiting partners be nominated by their pension scheme member partner in order to be eligible for a survivor's pension. The survivor must also show that he or she has been a cohabitant for two years before the date on which the member sent the nomination and has been in that position for two years before the date of death. There is no similar nomination requirement for married or civil partner survivors. The Department of the Environment of Northern Ireland (DENI) included a nomination requirement in the 2009 Regulations in order to ensure parity with other local government pension schemes in Scotland and England and Wales, which at the time had similar requirements. The appellant, Denise Brewster, lived with her partner, William Leonard McMullan, for around ten years before December 2009. On Christmas Eve that year, they became engaged. Mr McMullan died two days later. At the time of his death, Mr McMullan was employed by Translink, a public transport operator, for whom he had worked for approximately 15 years. Throughout that time he had been a member of, and had paid into, the Local Government Pension Scheme (the scheme). Ms Brewster believes that Mr McMullan had completed a form in which he nominated her to be eligible for a survivors pension, but the Northern Ireland Local Government Officers Superannuation Committee (NILGOSC), which administers the scheme, says it did not receive any form. Accordingly, NILGOSC refused to pay her a survivors pension. Ms Brewster applied for a judicial review of this decision. The High Court held that the requirement of nomination of a cohabiting partner in the 2009 Regulations was incompatible with article 14 of the European Convention on Human Rights (which prohibits discrimination) read together with article 1 protocol 1 (peaceful enjoyment of possessions) (A1P1). The Court of Appeal allowed the respondents appeal, finding that the nomination requirement was neither unjustified nor disproportionate. In the meantime, prompted by the judgment of the High Court, the equivalent regulations in England and Wales and in Scotland were amended to remove the nomination requirement in those schemes. When the appellant became aware of these changes, she applied to the Court of Appeal for her appeal to be re opened. Her application was refused and she now appeals to the Supreme Court. The Supreme Court unanimously allows Ms Brewsters appeal and declares that the requirement in the 2009 Regulations that the appellant and Mr McMullan should have made a nomination be disapplied; and that the appellant is entitled to receive a survivors pension under the scheme. Lord Kerr gives the judgment, with which the other Justices agree. The parties are agreed that a survivors pension, as a possession, falls within the ambit of A1P1 and that the appellant, as a surviving unmarried cohabiting partner, enjoys a relevant status for the purpose of article 14 and is in an analogous situation to a surviving married partner or civil partner [44 47]. The only issue, therefore, is whether the interference with the appellants right to property has been objectively justified. The starting point in assessing justification must be the duty of the state under article 14 to secure the appellants right to equal treatment. The duty to secure rights calls for a more proactive role than the requirement to respect rights. The question of justification must be assessed objectively, but the court should not substitute its view for that of the decision maker, particularly in matters of socio economic policy [49]. According to DENI, the objective behind the nomination requirement was to establish the existence of a cohabiting relationship equivalent to marriage or civil partnership and identify the wishes of the scheme member [29]. The 2009 Regulations, however, already require a surviving partner to establish that a genuine and subsisting relationship existed, so the nomination requirement adds nothing to this evidential hurdle. The confirmation of the members wishes has no intrinsic value [31]. Although the status of cohabitation is not an immutable characteristic but a matter of choice, this was not a factor that was considered by the decision maker [59]. The desirability of establishing a bright line rule is also of marginal significance in this case, as no thought was given to the possible difficulties with administration that might arise if the nomination procedure was not included and no evidence was produced that it would cause significant problems in administering the scheme, particularly as in England and Wales it is considered that the nomination procedure is not necessary [62]. Given DENIs acceptance that the provision of a survivor benefit engages A1P1 and that the appellant has the requisite status to rely on article 14, the objective behind the nomination requirement must have been to eliminate unwarranted differences of treatment between married or civil partner survivors on the one hand and unmarried long term partners in a stable relationship on the other [34]. When it comes to general measures of economic or social strategy, the court will generally respect the legislatures policy choice unless it is manifestly without reasonable foundation [53 55]. Where a conscious, deliberate decision by a government department is taken on the distribution of finite resources, the need for restraint on the part of a reviewing court is both obvious and principled. But where the question of the impact of a particular measure on social and economic matters has not been addressed by the government department responsible for a particular policy choice, the imperative for reticence on the part of a court tasked with the duty of reviewing the decision is diminished [64]. A matter is not immune from review purely on account of coming within the realm of social or economic policy it must be shown that a real policy choice was at stake. In the present case, not only were socio economic factors not at the forefront of the decision making process, but the attempt to justify retention of the procedure was characterised by general claims, unsupported by concrete evidence and disassociated from the particular circumstances of the appellants case [65]. There is no rational connection between the objective, which was to remove the difference of treatment between a longstanding cohabitant and a married or civil partner, and the imposition of the nomination requirement and therefore its discriminatory effect cannot be justified [67].

The Palmers Wood Oil Field is a naturally occurring reservoir of petroleum and petroleum gas, the north eastern part of which extends beneath the Oxted Estate of which the appellant Bocardo (Bocardo) is the freehold owner. The rest of the Oil Field lies under land in different ownerships. Petroleum cannot be recovered from an underground reservoir without carrying out works of some kind below the surface of the land. An oil company such as the first respondent, Star Energy Weald Basin Ltd, which has a licence under section 2 of the Petroleum (Production) Act 1934 (now repealed and replaced by section 3 of the Petroleum Act 1998, Schedule 3, para 4 of which preserves pre existing licences) to search, bore for and get petroleum will have to sink wells into the substratum by means of drilling in order to recover it. It may have to do this by means of wells that are drilled diagonally rather than vertically from the well head. A particular feature of this case is that the apex of the Oil Field lies beneath Bocardos land. The most efficient means of recovering the petroleum is to sink a well as close to the apex as possible. If this is not done, and the well is sunk to a point that is substantially below the apex, much of the oil that could otherwise be recovered will be lost. It was for this reason that the respondents predecessors sunk three wells from the well head by what is known as deviated or directional drilling from one of the two drilling sites that were created for the extraction of petroleum from the Palmers Wood Oil Field. The wells enter the substrata below the Oxted Estate at depths of about 1,300, 800 and 950 feet beneath the surface respectively. Two of them are known as PW5 and PW8. They are used to extract petroleum and petroleum gas from the reservoir beneath the Oxted Estate and terminate at about 2,900 and 2,800 feet below the surface of its land respectively. The third, known as PW9, passes through the substrata beneath the Oxted Estate at a depth of about 950 feet below the surface and ends beyond its perimeter at a point in the reservoir at about 1,400 feet below ground level. It is used for injecting water into the Oil Field to maximise and speed recovery. The respondents predecessors, Conoco (UK) Ltd, did not seek to negotiate any contractual licence or wayleave from Bocardo to drill the wells, lay the casing and tubing within them or extract the petroleum and petroleum gas by this means from the Oil Field. Nor did they apply for any statutory right to do this under the Mines (Working Facilities and Support) Act 1966 or the Pipelines Act 1962. The respondents in their turn did not seek to do this when they acquired the petroleum production licence from their predecessors. It appears to have been assumed all along that this was not necessary. The evidence at the trial of the respondents expert was that, although deviated or directional drilling has been common industry practice for some years, he was not aware that any onshore oil company had applied for ancillary rights to permit deviated drilling on UK onshore operations. Bocardo was unaware until July 2006 that petroleum and petroleum gas was being extracted by this means from beneath its land. The issues that this case raises fall into two parts. First, there is the question whether the drilling of the three wells under Bocardos land was an actionable trespass. Peter Smith J held that it was: [2008] EWHC 1756 (Ch); [2009] 1 All ER 517. His decision was affirmed by the Court of Appeal (Jacob, Aikens and Sullivan LJJ): [2009] EWCA Civ 579; [2009] 3 WLR 1010; [2010] Ch 100. Secondly, if there was an actionable trespass, there is the question what is the correct measure of damages. The measure that was adopted by the trial judge was rejected by the Court of Appeal, which made a very substantial reduction in the award of damages. Bocardo appeal to this court on the damages issue, and the respondents cross appeal on the issue of trespass. (a) Trespass On 21 July 2006 Bocardo commenced proceedings against the respondents for trespass. The question which this issue raises is whether an oil company which has been granted a licence to search, bore for and get petroleum in the licensed area which is beneath land belonging to another, and drills wells at depth beneath that land in order to recover petroleum from within the licensed area without obtaining the landholders agreement or an ancillary right under the Mines (Working Facilities and Support) Act 1966 to do so, is committing a trespass. The respondents accept that, if a trespass was committed by drilling the wells in the first place, it will have continued until now. In the Court of Appeal Aikens LJ said that it was logical to examine the question of whether there was a trespass as at July 2000 when, having taken account of the fact that the limitation period under section 2 of the Limitation Act 1980 for a claim in trespass is six years, the cause of action arose: [2009] 3 WLR 1010, [2010] Ch 100, para 48. But I agree with him that nothing turns on the precise date at which the issue is considered. It is common ground that a trespass occurs when there is an unjustified intrusion by one party upon land which is in the possession of another: Blackstone, Commentaries on the Laws of England, vol 3, p 209; Clerk & Lindsell on Torts, 19th ed (2006), para 19.01. It is common ground too that Bocardo did not, and does not, own any of the petroleum in the reservoir that is situated beneath its land. Nor does it possess, or have the right to possess, any of that petroleum. Those rights belonged to the holder of the licence granted by the Secretary of State under section 2 of the Petroleum (Production) Act 1934, Conoco (UK) Ltd. They now belong to the respondents (currently the first respondent, Star Energy Weald Basin Ltd) as the original holders assignees. By virtue of section 1 of the 1934 Act, which vested the property in petroleum existing in its natural condition in strata in Great Britain in the Crown, at no time did Bocardo have any right to search, bore for or get that petroleum from the reservoir beneath its land. Only the Crown or its licensee had the right to do so. The question whether the drilling of the three wells under Bocardos land, and the continued presence of the well casing and tubing within them, was an actionable trespass raises the following issues: (1) whether Bocardos title to the land extends down to the strata below the surface through which the three wells and their casing and tubing pass; (2) whether possession or a right to possession is a pre condition for bringing a claim for trespass and, if so, whether Bocardo has or is entitled to possession of the subsurface strata through which these facilities pass; (3) whether the respondents have a right under the 1934 Act (and subsequently the 1998 Act) to drill and use the three wells and their casing and tubing to extract petroleum from beneath Bocardos land which gives them a defence to a claim in trespass. Ownership: how far below the surface? There is, of course, nothing new in one person carrying out works under land whose surface is in the ownership or the possession of another. Operations of that kind have been familiar since at least Roman times. They ranged from great public works such as catacombs on the one hand to modest cellars for the storage of wine or other commodities on the other. What is new is the depth at which the operations that are said to constitute a trespass in this case have been carried out. The advance of modern technology has led to the discovery of things below the surface, and the desire to obtain access to and remove them, that were unimaginable when the depths to which people could go were limited by what manual labour could achieve. Bocardos case is that it is trite law that a conveyance of land includes the surface and everything below it, unless there have been exceptions from the grant such as commonly occurs in the case of minerals. The respondents do not dispute this proposition as a general rule that applies where the rights of the surface owner are interfered with. But they maintain that it does not extend to the depth at which the operations were and are being carried out in this case. The minimum depth was 800 feet, while for the most part the depths were greatly in excess of this. Mr Driscoll QC for the respondents said that he accepted that in law the surface owner owned the substrata to some depth, but not that far. He submitted that the wells and their tubes and casing did not interfere with or enter upon land in any meaningful way at all. Moreover the right to search, bore for and get the petroleum was vested in the Crown. Bocardo did not own, and had no right to possess, the petroleum. It has often been said that prima facie the owner of the surface is entitled to the surface itself and everything below it down to the centre of the earth: see, for example, Rowbotham v Wilson (1860) 8 HL Cas 348, 360, per Lord Wensleydale; Bowser v Maclean (1860) 2 De G F & J 415, 419, per Lord Campbell LC; Pountney v Clayton (1883) 11 QBD 820, 838, per Bowen LJ; Elwes v Brigg Gas Co (1886) 33 Ch D 562, 568, per Chitty J; and National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, 708, per Lord Russell of Killowen. The proposition that prima facie everything below the surface belongs to the surface owner is often linked to the proposition that everything above it belongs to him too: everything up to the sky, as Sir William James VC put it in Corbett v Hill (1870) LR 9 R 671, 673, or everything under the sky in the words of Bowen LJ in Pountney v Clayton. In Mitchell v Mosley [1914] 1 Ch 438, 450, Cozens Hardy MR said that the grant of the land includes the surface and all that is supra houses, trees and the like and everything that is infra mines, earth and clay, etc. Agreeing with him, Swinfen Eady and Phillimore LJJ said that this was a recognised rule of law. Plainly, the source for these remarks was the well known Latin brocard cuius est solum, eius est usque ad coelum et ad inferos. The soundness of this brocard as a proposition of law was questioned in Commissioner for Railways v Valuer General [1974] AC 325. The subject of the appeal was a property in the centre of Sydney beneath which there had been extensive excavations to a depth of 40 feet or more. The question was how the property was to be valued for rating purposes. The statute proceeded on the basis that it was a parcel of land that had to be valued. The Commissioner said that this meant land defined only by vertical boundaries land usque ad coelum et ad inferos, in other words. The Valuer General said that it was only possible to value as land that which had a recognisable connection with the surface. Otherwise it had to be valued as stratum, to which special provisions applied. As Lord Wilberforce explained at p 351, the question that the Valuer Generals argument gave rise to was whether there was a complete dichotomy between land and strata beneath it and, if so, what that dichotomy was. The statutory definition did not answer the question how, in the context of the legislation, layers defined by horizontal boundaries were to be treated. It is in relation to this question, he said, that the Latin tag usque ad coelum et ad inferos has been introduced and given a prominent place in the argument. Lord Wilberforce did not think much of the brocard, or tag as he called it. As he explained at p 351: It is well known that this brocard cannot be traced in the Digest or elsewhere in Roman Law. The first recognised appearance is in the 13th century gloss of the Bolognese Accursius upon Digest VIII.2.1. It appears there in the form cuius est solum eius esse debet usque ad coelum (cf in the law of Scotland Stairs Institutions II.7.7). In the form of a maxim, it only has authority at common law in so far as it has been adopted by decisions, or equivalent authority. The earliest recognition appears to be recorded in Bury v Pope (1587) Cro. Eliz 118 where reference is made to its use Temp. Ed I in the form cuius est solum, eius est summitas usque ad coelum, but the context of this statement in the reign of Edward I has not been identified. Then, after referring to Coke Litt. 4a, which he said contained an uncritical adoption of the maxim, and to Blackstone, Commentaries II, 21st ed (1844) c2, p 18 who followed Coke, he said: There are a number of examples of its use in judgments of the 19th century, by which time mineral values had drawn attention to downwards extent as well as, or more than, extent upwards. But its use, whether with reference to mineral rights, or trespass in the air space by projections, animals or wires, is imprecise and it is mainly serviceable as dispensing with analysis: cf Pickering v Rudd (1815) 4 Camp 219 and Ellis v Loftus Iron Co (1874) LR 10 CP 10. In none of these cases is there an authoritative pronouncement that land means the whole of the space from the centre of the earth to the heavens: so sweeping, unscientific and unpractical a doctrine is unlikely to appeal to the common law mind. At most the maxim is used as a statement, imprecise enough, of the extent of the rights, prima facie, of owners of land: Bowen LJ was concerned with these rights when, in a case dealing with rights of support, he said: Prima facie the owner of the land has everything under the sky down to the centre of the earth: Pountney v Clayton (1883) 11 QBD 820, 838 In the Court of Appeal Aikens LJ, referring to Lord Wilberforces remarks in Commissioner for Railways v Valuer General, said that he had no doubt that Accursiuss maxim or brocard was not part of English law: [2009] 3WLR 1010, [2010] Ch 100, para 59. Asking himself what the general rule is at common law about the ownership of the substrata below the surface of land, he said that he found it in Mitchell v Mosley [1914] 1 Ch 438, but shorn of its references to Accursiuss maxim. In short, he said, the registered freehold proprietor of the surface will also be the owner of the strata beneath the surface of his land, including the whole minerals, unless there has been some express or implied alienation of the whole or a particular part of the strata to another. In his view, at para 60, Bocardos title certainly extended to the strata (other than the petroleum) to be found at the depth of the wells up to 2,800 feet below the surface of the Oxted Estate. Precisely how much further into the earths crust that ownership might go was a question that he did not need to decide. But if it carried to the centre of the earth landowners, he said, all have a lot of neighbours. I think, with respect, that Aikens LJ was perhaps a little too hasty in asserting that the brocard is not part of English law. It is true that Lord Wilberforce appears to have had little enthusiasm for it. He regarded it as an excuse for dispensing with analysis. But those remarks were made in a case where the question was what was meant by the word land in the statute. He seems to have been prepared to accept it as having some relevance as a statement, imprecise though it is, of the rights, prima facie, of owners of land: see his reference to Bowen LJs observation in Pountney v Clayton (1883) 11 QBD 820, 838. Furthermore, although Aikens LJ adopted what Cozens Hardy MR said in Mitchell v Mosley [1914] 1 Ch 438, 450 as an accurate statement of the law if shorn of his references to Accursiuss maxim, it must be acknowledged that it was by reference to that maxim that Cozens Hardy MR said what he did. As Lord Wilberforce pointed out, the maxim only has authority at common law in so far as it has been adopted by decisions, or equivalent authority. I am inclined to think that the observations by the Court of Appeal in Mitchell v Mosley, seen against the background of various dicta in the 19th Century cases including Pountney v Clayton, measure up to that requirement. In the present context, therefore, I believe that the brocard does have something to offer us. The particular relevance of the brocard to the dispute in this case is that, taken literally, it answers Mr Driscolls point that the wells in question were too deep for the landowners interest in his land to be affected. If the brocard is accepted as a sound guide to what the law is, there is no stopping point. This makes it unnecessary to speculate as to how it can be applied in practice as one gets close to the earths centre. The depths to which the wells in question were drilled in this case do not get anywhere near to approaching the point of absurdity. The fact that there were substances at that depth which can be reached and got by human activity is sufficient to raise the question as to who, if anybody, is the owner of the strata where they are to be found. The Crown has asserted ownership of the petroleum, but it does not assert ownership of the strata that surround it. The only plausible candidate is the registered owner of the land above, which is exactly what the brocard itself indicates. Mr Driscoll was unable to point to any contrary authority. It is perhaps worth looking more closely at the words used by the glossator. The earliest source that we have for them is the Glossa Ordinaria which was compiled by Accursius, a professor at the University of Bologna, in the 13th century. He set for himself the task of collecting and arranging a vast number of annotations to the Digest that had been made by his predecessors in one great work. He supplemented these with annotations of his own. For the most part at least, the authors of these annotations are not identified. The gloss that led to the brocard with which we are all familiar is not attributed to anybody. We have no means of knowing when it was first written down. Francis Lyall, The maxim cuius est solum in Scots Law [1978] JR 147, 148, observed that the history of its development is obscure. It may have been one of Accursiuss own annotations, but it seems just as likely that it was much older. All we can say with confidence is that it was not part of Roman law but that it had been recognised by 1250 when the Glossa Ordinaria was completed. The wording of the gloss itself is instructive. Paulus, speaking of urban praedial servitudes, is quoted in the Digest, 8.2.1.pr, as follows: Si intercedat solum publicum vel via publica, neque itineris actusve, neque altius tollendi servitutes impedit; sed immitendi protegendi prohibendi item fluminum et stillicidiorum servitutem impedit: quia coelum quod supra id solum intercedit, liberum esse debet. The words quia coelum are then glossed in this way: Quia coelum. Nota. Cujus est solum ejus debet esse usque ad coelum. Lyall says that in later editions of the Glossa Ordinaria this gloss itself is noted with the comment: cujus solum, ejus coelum: [1978] JR 147, 148. I think that it is significant that the glossator took as his starting point the rule that applied to the underlying strata and then applied it to what took place above the surface. The context for the annotation was the proposition that, while the owner may erect structures as high as he likes on the solum of land in his ownership, his freedom to do so is restricted by the praedial servitude non altius tollendi which protects his neighbours right to light and prospect. The owner of the dominant tenement is entitled to insist that there should be no interference with the sky over his land. The assumption appears to have been that it was generally understood that the ownership of land carried with it the right to everything that lay below the surface. The point that the glossator was making, as an explanation for the praedial servitude, was that the existing rule as to what lay below (cuius est solum) should be (debet esse) applied to the air space above it. The rule that applied to the underlying strata appears to have been of greater antiquity. The problems that a rule in these terms might give rise to as mans understanding of the earths structure improved, airspace began to be used for the passage of aircraft and means were developed to penetrate deep below the surface were not, of course, obvious in the 13th century. But the simple notion that each landowner is the proprietor of a column or cylinder of land that stretches down to the centre of the earth and upwards indefinitely into outer space is plainly no longer tenable. The earth is not flat, as the glossator may have supposed. A greater understanding of geology has taught us that most of the earths interior, due to extremes of pressure and temperature, is a complex and inhospitable structure that is beyond mans capacity to enter or make use of. It has been observed that anything that is drilled below a depth of about 8.7 miles or 14 kilometres would be crushed by the earths pressure of 50,000 pounds per square inch and vaporised by a temperature of 1,000 degrees Fahrenheit: see John G Sprankling, Owning the Center of the Earth, (2008) 55 UCLA L Rev 979, 993, fn 84. As Sprankling explains at p 994, productive human activity is possible only within the shallowest portion of the earths crust, and humans have never penetrated below it. As for that portion of it, the development of heat mining and carbon capture, storage and sequestration technologies to reduce greenhouse gas emissions, which he discusses at pp 1030 1032, would be difficult to achieve if the subsurface within which it is sought to carry out these activities in the public interest were to be broken up into columns of rock owned by the surface owners. As for the position above the surface, the development of powered flight has made it impossible to apply the brocard usque ad coelum literally. In Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479 Baron Bernstein failed in his claim that the defendants, who had flown over his land to take an aerial photograph of his property which they then offered to sell to him, were guilty of trespass. Griffiths J noted at p 485 that the proposition that an owner has certain rights in the air space above his land was well established by authority. In Kelsen v Imperial Tobacco Co (of Great Britain and Northern Ireland) Ltd [1957] 2 QB 334, for example, a mandatory injunction was granted ordering the defendants to remove a sign which projected 8 inches over the plaintiffs property on the ground that, applying the brocard, this was a trespass. Griffiths J was willing to accept, as a sound and practical rule, that any incursion into air space at a height which may interfere with the ordinary user of land was a trespass. But he said that wholly different considerations arise when considering the passage of aircraft at a height which in no way affects the user of the land. In his judgment, at p 488, the balance was best struck by restricting the rights of the owner to such height as necessary for the ordinary use and enjoyment of his land and the structures upon it, and declaring that above that height he has no greater rights in the air space than any other member of the public. The respondents say that this analysis should be applied to subsurface ownership too. They submit that a sensible and pragmatic solution would be for each surface owner to own directly down beneath the boundaries of his land as far down as is necessary for the use and enjoyment of the surface, the buildings on the surface and any minerals which have not been excluded from his ownership by conveyance, common law or statute which lie beneath it. Mr Driscoll was unable to point to any English authority that provided direct support for this approach to the position beneath the surface. But there is some support for it in the United States. In Boehringer v Montalto 142 Misc 560 (1931) the New York Supreme Court held that a sewer laid 150 feet below the surface was not included in the surface owners title. The judge said that title above the surface was now limited to the extent to which the owner of the soil might reasonably make use of it, and that by analogy his title was not to be extended to a depth below ground beyond which the owner might reasonably make use of it. In US v Causby 328 US 256 (1946) the US Supreme Court held that there was a taking of the respondents property within the meaning of the Fifth Amendment by frequent and regular flights of army and navy aircraft over their land at low altitudes. But in para 3, at p 261, of the courts opinion Douglas J said that the doctrine expressed in the brocard has no place in the modern world: The air is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea. To recognise such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim. That was a case about limitations on the absolute rights of surface owners above the surface, as was Willoughby Hills v Corrigan 278 NE2d 658, 664 (Ohio 1972) in which the court said that the doctrine of the common law that the ownership of land extends to the periphery of the universe has no place in the modern world. But in Chance v BP Chemicals Inc 670 NE2d 985 (Ohio 1996) the Supreme Court of Ohio took the same approach to subsurface ownership rights. In para 8, at p 992, of the courts opinion the judge said: we do not accept the appellants assertion of absolute ownership of everything below the surface of their property. Just as a property owner must accept some limitations on the ownership rights extending above the surface of the property, we find that there are also limitations on property owners subsurface rights. We therefore extend the reasoning of Willoughby Hills, that absolute ownership of air rights is a doctrine which has no place in the modern world, to apply as well to ownership of subsurface rights. The court held that some type of physical damage or interference with the use of the land must be shown for the owner to recover for a trespass and that the use of lateral migration of injection technology to dispose of refining by products below the surface did not meet this test. Sprankling, Owning the Center of the Earth, (2008) 55 UCLA L Rev 979, 991 992, points out however that most modern US legal texts continue to endorse the centre of the earth theory and that almost all modern cases continue to embrace it too: see, for example, Kankakee County Board of Review v Property Tax Appeal Board 871 NE2d 38 (Illinois 2007) and Orr v Mortvedt 735 NW2d 610 (Iowa 2007). Addressing himself to the question, how far below the earths surface do property rights extend, he asserts at p 1033 that the surface owner should certainly hold property rights to a portion of the subsurface. After exploring four alternative models ownership of the entire crust, ownership based on first in time exploitative use, ownership for reasonable and foreseeable uses and ownership to a specified depth he comes down in favour of a specified depth such as 1000 feet, but he acknowledges that reasonable minds may differ as to the appropriate extent. The goal of his article, he said, was to ignite that debate, not to extinguish it: p 1039. Spranklings article suggests that the debate as to the extent of subsurface rights remains alive in the United States. In Canada, Griffiths Js approach in Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479 to the right to use air space above the land was described by the Alberta Court of Appeal as most persuasive in Didow v Alberta Power Ltd [1988] 5 WWR 606, 613. But we were not referred to any Canadian or Australian authority that extends that approach to ownership below the surface. In Todd, The Law of Torts in New Zealand (5th ed, 2009), p 426, it is stated that it appears to be generally accepted that any intrusion into the subsoil beneath the owners land will constitute trespass, and that there appears to be no case in the Commonwealth where a plaintiff has failed on the basis that the area of subsoil invaded was so deep that the surface occupiers possessory rights did not extend that far. In a footnote to that passage, in which Spranklings article is referred to, the editors note that American authority points both ways: see fn 22. Coming closer to home, Dr Jean Howell, Subterranean Land law: Rights below the Surface of Land, (2002) 53 Northern Ireland Legal Quarterly 268, 270 acknowledges that it might be argued that the same test as that which Griffiths J applied in Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479 should be used for land below the surface. But, as she also notes, it was implicit in that case that even above the notional height at which the land owners usable rights stop, there is not a free for all in the airspace above. To characterise the surface owners rights as following technological advances as to the depth at which land can be exploited, she says, would offend against all notions of property whose defining quality in land is certainty. She concludes, at p 285, that any intrusion into land which is not sanctioned by some countervailing property right will be a trespass and that, although the surface owner will not usually wish to or be able to utilise the ground below the surface, he has rights in the land which could be valuable. In my opinion the brocard still has value in English law as encapsulating, in simple language, a proposition of law which has commanded general acceptance. It is an imperfect guide, as it has ceased to apply to the use of airspace above a height which may interfere with the ordinary user of land: Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479. The position in Scotland may be different: see Stair Memorial Encyclopaedia, vol 19, Property, para 198, where the question is seen as relating to the extent of ownership rather than the balancing of rights in the airspace. But I think that the reasons for holding that the brocard has no place in the modern world as regards what goes on below the surface, even in England, are not by any means as compelling as they are in relation to the use of airspace. In US v Causby 328 US 256 (1946) the US Supreme Court regarded the airspace as a public highway to which only the public had a just claim. The same cannot be said of the strata below the surface. As Aikens LJ said in the Court of Appeal, it is not helpful to try to make analogies between the rights of an owner of land with regard to the airspace above it and his rights with regard to the strata beneath the surface: [2009] 3 WLR 1010, [2010] Ch 100, para 61. Although modern technology has found new ways of making use of it in the public interest, there is no question of it having become a public highway. The test applied in Chance v BP Chemicals Inc 670 NE2d 985, that some type of physical damage or interference with the use of the land must be shown, would lead to much uncertainty. It overlooks the point that, at least so far as corporeal elements such as land and the strata beneath it are concerned, the question is essentially one about ownership. As a general rule anything that can be touched or worked must be taken to belong to someone. The better view, as the Court of Appeal recognised [2009] 3 WLR 1010, [2010] Ch 100, para 59, is to hold that the owner of the surface is the owner of the strata beneath it, including the minerals that are to be found there, unless there has been an alienation of them by a conveyance, at common law or by statute to someone else. That was the view which the Court of Appeal took in Mitchell v Mosley [1914] 1 Ch 438. Much has happened since then, as the use of technology has penetrated deeper and deeper into the earths surface. But I see no reason why its view should not still be regarded as good law. There must obviously be some stopping point, as one reaches the point at which physical features such as pressure and temperature render the concept of the strata belonging to anybody so absurd as to be not worth arguing about. But the wells that are at issue in this case, extending from about 800 feet to 2,800 feet below the surface, are far from being so deep as to reach the point of absurdity. Indeed the fact that the strata can be worked upon at those depths points to the opposite conclusion. I would hold therefore that the appellants title extends down to the strata through which the three wells and their casing and tubing pass. Possession The next question is whether possession or a right to possession is a pre condition for bringing a claim in trespass. The respondents maintain that possession, not ownership, is essential and that the claim should fail because the appellant is not in possession of the substrata where the wells entered the substrata at least 800 feet below the surface of its land. In Powell v McFarlane (1977) 38 P & CR 452, 470 Slade J said: In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner. In Pye (JA) (Oxford) Ltd v Graham [2003] UKHL 30, [2003] 1 AC 419, para 40 Lord Browne Wilkinson approved of this definition, making the point that, without the requisite intention, in law there can be no possession. This is highly relevant if the law is to attribute possession of land to a person who cannot establish a paper title to possession. But in this case the appellant has the paper title. That, in the absence of evidence to the contrary, is enough for it to be deemed to be in possession of the land. As Aikens LJ said in the Court of Appeal, it is difficult to say that the appellant has actual possession of the strata below the Oxted Estate as it has done nothing to reduce those strata into its actual possession: [2009] 3 WLR 1010, [2010] Ch 100, para 66. But he held that the appellant, as the paper title owner to the strata and all within it (other than any gold, silver, saltpetre, coal and petroleum which belong to the Crown at common law or by statute), has the prima facie right to possession of those strata so as to be deemed to be in factual possession of them. I think that he was right to conclude that this was the effect of Slade Js dictum. As the paper title carries with it title to the strata below the surface, the appellant must be deemed to be in possession of the subsurface strata too. There is no one else who is claiming to be in possession of those strata through the appellant as the paper owner. Does either common law or the 1934 Act provide a defence to the claim in trespass? There remains the question whether the respondents have a defence to the claim of trespass either under the common law or under the statute. I think that there is nothing in the argument that there is a defence at common law. It would be different, as Aikens LJ said in the Court of Appeal [2009] 3 WLR 1010, [2010] Ch 100, para 74, if the right to extract the petroleum had been granted to the respondents by the appellant. The principle of non derogation from grant would prevent the appellant from doing anything that would hamper the respondents use of the strata for the purpose that both parties contemplated at the time of the grant. But the right to search and bore for and get the petroleum was obtained by the respondents under licence from the Crown. I do not think that there is any common law principle that the respondents can invoke in that situation to regulate their position in relation to a landowner who was not a party to that arrangement. This leaves the question whether the matter can be said to have been regulated by the statute. Section 10(3) of the Petroleum (Production) Act 1934 (now repealed and re enacted as section 9(2) of the Petroleum Act 1998) provided: Nothing in this Act shall be construed as conferring, or as enabling the [Secretary of State] to confer, on any person, whether acting on behalf of His Majesty or not, any right which he does not enjoy apart from this Act to enter on or interfere with land. The respondents say that they had a right under the licence granted under section 2(1) of the 1934 Act to search and bore for and get the petroleum to penetrate the strata under Bocardos land and that as a matter of ordinary language drilling the pipelines diagonally into the substrata would not be considered as entering on it or as interfering with Bocardos use and enjoyment of it. They were not sunk on the surface of Bocardos land, but were justified by the statutory right to search and bore for and get the petroleum. Moreover there were no minerals which were capable of being enjoyed as such under the surface of Bocardos land that were entered on or interfered with. In the Court of Appeal Aikens LJ, albeit with some reluctance, concluded that it was impossible to say that the 1934 Act, when read with the Mines (Working Facilities and Support) Act 1923 (later replaced by the 1966 Act) and the existing common law, granted a licensee under the 1934 Act the express or implied right to bore pipelines at depth through the land of another within the licensed area in the absence of agreement or the grant of an ancillary right under those Acts: [2009] 3 WLR 1010, [2010] Ch 100, paras 80 83. His reasoning was based in part on the wording of section 10(3) itself. In his opinion the words enter on land were intentionally general and broad enough to include entering land beneath the surface. It was also based on the provisions of section 3(1) of that Act read with section 3(2)(b) of the 1923 Act. The opening words of section 3(1) of the 1934 Act provided that the 1923 Act was to apply for the purpose of enabling a person holding a licence under this Act to acquire such ancillary rights as may be required for the exercise of the rights granted by the licence, and shall have effect accordingly. Section 3(2)(b) of the 1923 Act provided that the expression ancillary right in relation to minerals was to include a right of air way, shaft way or surface or underground wayleave. The word wayleave, he said, was broad enough to encompass a right to bore a pipe through strata as well as create and use a passage to get to and carry minerals such as coal. The wording of section 10(3) indicated that the licensee could continue to enjoy such rights as he already has to enter on or interfere with land, but that it was not within the power of the Secretary of State to confer on him any other right to do so. Despite Mr Driscolls submissions to the contrary, I have not been able to detect any flaw in this reasoning. The subsurface strata through which the wells and pipelines were sunk is Bocardos land. There is nothing in section 10(3) or the context in which it was enacted that restricts the reference to land in that subsection to things that happen only on the surface. In the context of a statute which is concerned with the right to search for and bore for and get petroleum existing in its natural condition in strata below ground, the words enter on in that subsection are apt to apply to underground workings as well as workings on the surface itself. The words interfere with are not restricted, as was suggested, to interfering with the owners use and enjoyment of the land for the time being. The owner of the subsurface is entitled to say that his land is being interfered with when it is bored into by someone else. His right to object is inherent in his right of ownership of the land. It is nothing to the point that he is not making any use of it. The fact that an underground wayleave is included in the ancillary rights referred to in section 3(2)(b) of the 1923 Act reinforces the conclusion that is to be drawn from the provisions of the 1934 Act that a licensee who does not already enjoy a right to enter upon someone elses land needs to acquire an ancillary right from the owner of that land if he wishes to do this. For all these reasons I would hold, in agreement with the Court of Appeal, that the respondents have trespassed on Bocardos land and that, subject to their submissions as to the amount of the damages, they have no defence to Bocardos claim. I would dismiss the cross appeal. (b) Damages The parties are agreed that, if damages are to be assessed on a wayleave or user basis, their measure is the price that reasonable persons in the position of the parties would have negotiated for a grant of a contractual right for the licensee to extract the oil through the sub strata below the Oxted Estate using wells PW5, PW8 and PW9: Statement of Facts and Issues, Principal Issue 2, para 2(a). It is also agreed that, in assessing the price that reasonable parties would have negotiated, the negotiation must be assumed to have taken place against the relevant statutory background, which at the relevant date would have included the Petroleum (Production) Act 1934 and the Mines (Working Facilities and Support) Act 1966. I gratefully adopt Lord Clarkes description of the general background and the statutory framework. Section 8(2) of the 1966 Act provides that the compensation or consideration is to be assessed on the basis of what would be fair and reasonable between a willing grantor and a willing grantee, having regard to the conditions subject to which the right is, or is to be, granted. The word consideration is included in this subsection because the rights that may be granted under section 1 of the Act include the right to search for, work and take away minerals such as coal. In the present case, however, the relevant word is compensation. This is because the transaction which is in issue is the acquisition of the right to sink the wells under Bocardos land which, as Lord Brown says in para 62, Bocardo had no option but to allow the respondents to do. Had it refused to grant them a wayleave, the respondents would have been able to go to the court for an order granting them the necessary ancillary rights under section 3(2)(d) of the 1966 Act. I agree with Lord Walker, Lord Brown and Lord Collins, for the reasons they give, that this must be taken to be a case of compulsory acquisition. So the general principles of compulsory acquisition law must be applied, including the value to owner principle and the no scheme rule in particular: see Lord Collins, paras 101 and 102. Accordingly, an increase in value which is consequent on the scheme for which the land is being acquired must be disregarded. The basis on which compensation is awarded is the value of the land to the owner, not its value when taken by the promoter of the scheme. But if the land has a special value because it is the key to the development of other land, that will represent part of its value to the owner which may be taken into account in the assessment of compensation in just the same way as it would if the owner was negotiating to realise its value in the open market: Waters v Welsh Development Agency [2004] UKHL 19, [2004] 1 WLR 1304, paras 64 65 per Lord Nicholls of Birkenhead. It would be wrong to approach bringing this element of value into account as amounting to the exercise of a right of veto, as Harman LJ suggested in Edwards v Minister of Transport [1964] 2 QB 134, 156; see also Logan v Scottish Water [2005] CSIH 73, 2006 SC 178, para 102 where his approach was adopted. It is a legitimate element of the value of the land to the owner, so long as it is justified by the facts of the case. What then is one to make of the facts of this case? In respectful disagreement with Lord Walker, Lord Brown and Lord Collins, I would not attribute the key value of Bocardos land in the hypothetical negotiation that must be imagined entirely to the scheme underlying the acquisition by the respondents of the right to obtain access to the petroleum. It seems to me that the key to its value lies in the geographical position which it occupies on top of the apex to the reservoir. It is, of course, clear that after the coming into force of the 1934 Act only the Crown or someone holding a licence from the Crown had the right to search, bore for and get the petroleum. The market that has to be envisaged was therefore a limited one. There could be only one licence holder at any one time. But this does not mean that the respondents must be taken to be the only possible bidder in the hypothetical market for the right to obtain access to the apex of the reservoir. The scheme which the respondents devised was dictated by the position of the drilling sites which they had created, but it has not been suggested that it was the only way that access could be obtained to it. I agree with that part of Lord Clarkes judgment in which he examines this question on the assumption that the Pointe Gourde principle applies to the assessment of compensation under section 8(2): see paras 158 163. Support for Lord Clarkes reasoning is to be found in the decision of the Lands Tribunal in Chapman, Lowry & Puttick Ltd v Chichester District Council (1984) 47 P & C R 674, to which Lord Clarke refers in para 161. Lord Walker sees that case differently: para 55. But I prefer Lord Clarkes interpretation of it. The approach which the Tribunal took was to ask itself whether the acquiring authoritys need for the strip of waste land as access for the land which it owned to the rear was special or peculiar to the authority itself. This question could not be determined unless the needs of other possible owners of the rear land were considered and taken into account. It was reasonable to assume that such hypothetical owner or developer could expect to receive precisely the same planning permission for precisely the same residential development as that obtained by the acquiring authority and subject to the same constraints in relation to the highway. From this it followed that any owner of the rear land would have precisely the same need for the waste strip as had the acquiring authority: pp 679 680. I think that exactly the same points can be made in this case. Anyone who had obtained a licence to search, bore for and get the petroleum under Bocardos land would have had precisely the same need to obtain a wayleave to obtain access to it if it was not to commit a trespass. So it was not the respondents scheme that gave the relevant strata beneath Bocardos land its peculiar and unusual value. It was the geographical position that its land occupies above the apex of the reservoir, coupled with the fact that it was only by drilling through Bocardos land that any licence holder could obtain access to that part of the reservoir that gives it its key value. I agree with Lord Clarke that this case is on the side of the line identified by Mann LJ in Batchelor v Kent County Council (1989) 59 P & CR 357, 361 in which the land has a key value which was pre existent to the scheme proposed by the respondents for their development. I do not think that it would be right to take into account what Viscount Hailsham said during the Second Reading of the Bill which became the 1934 Act as reported in Hansard (HL Debates), 19 April 1934, cols 691 692. What he said does not fall within the limited exception to the general rule that resort to Hansard is inadmissible which was recognised in Pepper v Hart [1993] AC 593. This is available to prevent the executive seeking to place a meaning on words used in legislation which is different from that which ministers attributed to those words when promoting legislation in Parliament; see R v Secretary of State for the Environment, Transport and the Regions, Ex parte Spath Holme Ltd [2001] 2 AC 349, 407 408. Viscount Hailsham was the Secretary of State for War, but he was not the promoter of the Bill. That task was being undertaken by the Secretary of State for Air, the Marquess of Londonderry, in whose support Viscount Hailsham spoke when the Bill was being debated. Moreover this is not a case where the executive is seeking to put a different meaning on words used in the 1934 Act from that which the Minister attributed to those words when promoting the Bill. Nor do I find clear and convincing support in the wording of the 1934 Act for the argument that all that was to be compensated for was the amenity value of the land. The 10% uplift in the compensation provided for by section 3(2)(b) of the 1934 Act as an allowance on account of the acquisition being compulsory appears to me to be a neutral factor, for the reasons that Lord Clarke gives in para 142. On all the remaining issues, including the way the amount of the damages ought to have been quantified, I agree with Lord Clarke. I think that the trial judge went too far in applying his figure of 9% to all the oil extracted or to be extracted during the period covered by his award until the oil and gas extraction was exhausted. In my opinion the sum of 621,180 plus interest that he awarded as damages was excessive, as it was not restricted to the amount that was attributable to the key value of the land. I would not be averse to using his figure of 9%, so long as it was applied only to the extra amount of oil and gas that was obtained by drilling into the apex of the reservoir. If this had been a live issue it would have been necessary to remit the case to the High Court so that it could assess the amount of the extra value and complete the exercise of calculating, on this much more limited basis, the amount of the damages. Having dismissed the cross appeal on the trespass issue, I would allow the appeal and remit the issue of damages to the High Court. LORD WALKER I agree with the judgment of Lord Hope on the trespass issue and with that of Lord Brown on the damages issue. What follows should be read as no more than footnotes to Lord Browns judgment. It is common ground (see para 2.2 of the Statement of Issues) that if damages are to be assessed on a wayleave basis, the measure of damages is the price that reasonable persons in the position of the parties would have negotiated for a grant of the appropriate contractual rights, against the statutory background of the Petroleum (Production) Act 1934 and the Mines (Working Facilities and Support) Act 1966. I am inclined to think that that starting point might have been open to argument, on the lines indicated in the comprehensive and scholarly judgment of Warren J in Field Common Ltd v Elmbridge Borough Council [2008] EWHC 2079 (Ch) [2009] 1 P & CR1, paras 55 99. But I put that aside. The starting point, therefore, is (in the words of section 8(2) of the 1966 Act): What would be fair and reasonable between a willing grantor and a willing grantee, having regard to the conditions subject to which the right is or is to be granted. The statute requires the adjudicator to predict the outcome of a hypothetical negotiation, between willing negotiators, which reaches a concluded agreement. In my opinion this statute (in conjunction with section 3 of the 1934 Act) is plainly concerned with compulsory acquisition of rights in or over land. Indeed section 3(2) of the 1934 Act (requiring an uplift of at least 10%) says as much. I cannot accept the appellants submission that there is a fundamental distinction between a statute which gives a public authority a right to acquire property and one which regulates property rights between private parties. The whole law of compulsory purchase began and developed with infrastructure projects (first canals, then railways) undertaken by companies in the private sector. The oldest of the statutory formulae was in section 63 of the Land Clauses Consolidation Act 1845. It was also the simplest: . The value of the land to be purchased or taken by the promoters . (There was also compensation for injurious affection). There was then a long period of judicial interpretation of this simple phrase, resulting in the firmly established value to the owner principle. This was explained by Lord Collins in Transport for London v Spirerose Ltd [2009] 1 WLR 1797, paras 119 129, in his exposition of the Pointe Gourde principle (see Pointe Gourde Quarrying & Transport Co Ltd v Sub Intendent of Crown Lands [1947] AC 565). It is a principle of statutory construction, and in the Transport for London case I suggested (at para 24) that the principles vigour is now channelled and restrained by a much more complex statutory scheme (especially sections 14 17 of and Schedule 1 to the Land Compensation Act 1961). One way of looking at the principle is to see it as an answer (at least in part) to the question: in the hypothetical negotiation called for by the statute, how far are the actual purpose and circumstances of the compulsory purchase to be taken into account? The principle tells us that compensation cannot include an increase in value which is entirely due to the scheme underlying the acquisition (Lord MacDermott in Pointe Gourde at p572, emphasis supplied). Similarly Lord Nicholls in Waters v Welsh Development Agency [2004] 1 WLR 1304, para 18 referred to the disregard of enhancement in the value of land attributable solely to the particular purpose for which it is being compulsorily acquired (emphasis supplied). This can be summarised, with some loss of precision, by saying that the hypothetical negotiation takes place in a no scheme world. Statutory hypotheses are notoriously troublesome. In East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109 the issue was whether a hypothetically rebuilt block of flats would have been subject to the Rent Restriction Acts. Lord Asquith of Bishopstone said (at pp132 133, a passage that has since been cited in many different contexts), If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. But the need for the case to go to the House of Lords suggests that there was room for argument about what were the inevitable corollaries of the hypothesis. There is no difficulty about extreme cases such as Stebbing v Metropolitan Board of Works (1870) LR 6 QB37, the graveyards case. The hypothetical sale of the graveyards was not to take place in a world in which hundreds of graves containing human remains (whose presence precluded any normal development) were to be exhumed so that a road could be built. The enhancement in value was entirely due to the road building scheme. But other cases are more difficult. One such case is the so called Indian case [1939] AC 302. It is difficult partly because of the unusual facts (the proposed anti malarial works consisted of closing unhealthy wells which supplied several different villages, and the spring was seen as a source of fresh water both for the new harbour undertaking and for the villages) and partly because of Lord Romers rather discursive discussion of an imaginary auction. I agree with Lord Brown that it may not be necessary, or helpful, to refer to the Indian case again. Another case which illustrates the tangles which hypothesis can lead to is Porter v Secretary of State for Transport [1996] 3 All ER 693, considered by Lord Collins in Transport for London at paras 115 118. The no scheme rule required the actual proposal for a by pass round Evesham to be disregarded, but because the town really did need a by pass somewhere, the valuation was made on the basis that a relief road would be built on another route. So the court posited a world in which the scheme actually proposed did not exist, but an imaginary scheme did exist. This convoluted approach was altered for the future by amending legislation. The case now before the Court is on very unusual facts, but its unusual facts do not to my mind make it more difficult. It is an extreme case in that Star Energys operations did not (in the words of Peter Smith J) interfere one iota with Bocardos enjoyment of its land. Subject to a contrary argument put forward by Bocardo, the value of the right granted to Star Energy was entirely due to the scheme, which was (as Aikens LJ said in the Court of Appeal, para 111) the exploitation of the petroleum licence in the specified area. The contrary argument (picking up the well known observations of Mann LJ in Batchelor v Kent County Council (1989) 59 P & CR 357, 361) is that the value was not entirely due to the scheme underlying the acquisition but was pre existent. It is true that the natural petroleum was pre existent. It had been there, no doubt, for tens of thousands of years. But the petroleum did not belong to Bocardo. It is true that Bocardo held a key (not, I think, the only possible key) to the most efficient exploitation of the petroleum by diagonal drilling to the apex of the oilfield. But the keys value depended entirely on the scheme, unlike a ransom strip for which there might have been a variety of possibilities of profitable realisation, some not involving compulsory purchase, as in Chapman, Lowry & Puttick Ltd v Chichester District Council (1984) 47 P & CR 674. For these reasons, and for the fuller reasons in the judgment of Lord Brown, I would dismiss this appeal. LORD BROWN What sum would the Court have assessed as the proper compensation to be paid by Star to secure their right to install deviated wells or pipelines beneath Bocardos land had Star sought to enforce that right pursuant to the Mines (Working Facilities and Support) Act 1966 (the 1966 Act)? Agreeing, as I do, with Lord Hopes judgment on all the issues raised by Stars cross appeal on liability, and concerned, as I am, to address only the issues arising on Bocardos appeal as to damages, that is what I regard as the ultimate question for the Courts determination. For this purpose I shall take as my starting point the scenario described in the next 4 paragraphs (based partly on a somewhat simplified account of the facts and partly on what I understand to be common ground between the parties as to the proper measure of damages for trespass in this particular case given that Bocardo succeed on all issues of liability). Pursuant to section 2 of the Petroleum (Production) Act 1934 (the 1934 Act) Star held a licence issued by the Secretary of State on behalf of the Crown giving them the exclusive right to search and bore for and get the petroleum lying underground (the property in which section 1 of the 1934 Act had vested in the Crown) in a part of Surrey including the Palmers Wood oil field. Under the licence Star are required to pay royalties to the Crown equal to 5% of the market value of the petroleum won (potentially rising, depending upon the amount won, to 12.5%). The apex of this oil field lies at a depth of some 2,800 ft below ground within the Oxted Estate, land in Bocardos freehold ownership. To win the petroleum, Star needed to drill and install three pipelines, two (PW5 and PW8) down towards the apex, one (PW9) so as to inject water into a different part of the oil field (not within the Oxted Estate) to maximise petroleum recovery. These three pipelines were drilled diagonally from a site (known as the Coney Hill well head) outside Bocardos Oxted Estate: PW5 entering the estate at about 1300 ft below ground level, running for about 500m and terminating at about 2,900 ft below; PW8 entering at about 800 ft below, running for about 700m and terminating at about 2,800 ft below; PW9 entering at about 950 ft below, crossing a corner of the estate and exiting deeper still after about 250m. The pipelines are variously of 8 inches and 12 inches diameter and lined with steel casing. Their drilling and installation occasioned no harm whatsoever to the estate. It did not interfere with Bocardos use or enjoyment of its land one iota. Pursuant to section 3 of the 1934 Act, Part I of the Mines (Working Facilities and Support) Act 1923 (the 1923 Act) applied and, upon the replacement of the 1923 Act as amended by the 1966 Act, the 1966 Act applied to enable Star as licence holder to acquire such ancillary rights as they required in order to win the petroleum. The ancillary right which Star required was, or was akin to, that described in section 2(1)(b) of the 1966 Act, as amended by section 27 of the Petroleum Act 1987, as a right of . shaft way . or underground way leave, or other right for the purpose of access to or conveyance of minerals. Section 3(2)(d) of the 1966 Act (replacing section 4(1)(d) of the 1923 Act) provided that, had Bocardo unreasonably refused to grant Star such ancillary right or demanded unreasonable terms for its grant, Star was entitled to ask the Minister to refer the matter to the court both for it to grant the right and to assess the compensation or consideration payable for it under section 8(2) of the 1966 Act (section 9(2) of the 1923 Act). Section 8(2) provides, so far as material in the present context: The compensation or consideration in respect of any right . shall be assessed by the court on the basis of what would be fair and reasonable between a willing grantor and a willing grantee . By section 3(2)(b) of the 1934 Act it was provided that: in determining the amount of any compensation to be paid in respect of the grant of any right, an additional allowance of not less than 10% shall be made on account of the acquisition of the right being compulsory. In the light of those basic facts and those governing statutory provisions I return to the question I posed at the outset, what sum should the court have assessed as proper compensation to be paid to Bocardo for having no option but to allow Star to install their pipelines under Bocardos land? The answer to that question ultimately determinative of this appeal must in turn depend upon the answers to two fundamental other questions. First, do the principles ordinarily governing the approach to valuation in the field of compulsory land purchase apply equally to the construction and application of section 8(2) of the 1966 Act with regard to the compulsory acquisition of ancillary rights over (or, as here, under) land? Secondly, even assuming (contrary to Bocardos argument) that compulsory purchase principles do apply in this context, do they operate to deny Bocardo what would otherwise be regarded as the powerful bargaining position of a landowner able to control access to a valuable oil field partially sited beneath their land? Bocardos core argument is to be found in their printed case (para 48) as follows: This is a classic key case. The second party does not own the treasure but he does own the key to the treasure chest. The key has little or no intrinsic value. Its value is what it gives access to. What the owner of the key has is purely a bargaining position. He is in the position of the owner of land which is needed to give the access necessary for the exploitation of a valuable asset. Bocardo then contend (para 53) that, there being no direct comparables, in order to determine a fair and reasonable price, [i]t was accordingly necessary to approach the valuation by enquiring what would be a fair share of the spoils for the landowner to receive for granting a right of access to the oil deposit. It was an acceptance of essentially this argument that led Peter Smith J at first instance to assess Bocardos damages at 621,180 (being 9% of the gross revenue from the oil extracted during the relevant period up to trial) plus interest (together with 9% of all future revenue derived from the pipelines the price of suspending an injunction otherwise imposed in respect of their further use). The Court of Appeal by contrast held that ordinary compulsory purchase principles apply to the assessment of compensation under section 8(2) and that pursuant to these Bocardo had no key value to exploit, were suffering no loss whatever, and would be amply compensated by an award of 1,000 (to include the 10% uplift under section 3(2)(b) of the 1934 Act) in respect of both past and continuing trespass. I turn then to the first of the two underlying questions earlier identified: do compulsory purchase principles of valuation apply to section 8(2)? First and foremost of these principles is what is commonly known as the no scheme rule or the Pointe Gourde rule. This rule was stated by Lord MacDermott in Pointe Gourde Quarrying & Transport Co Ltd v Sub Intendent of Crown Lands [1947] AC 565, 572 as follows: It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. The two most authoritative recent decisions on the proper approach to compensation for compulsory purchase are Waters v Welsh Development Agency [2004] 1 WLR 1304 (Waters) and Transport for London v Spirerose Ltd [2009] 1 WLR 1797 (Spirerose). Waters was concerned principally with the correct identification of the extent of the scheme whose effect in increasing the value of the land is to be disregarded; Spirerose was concerned rather with the value of the acquired lands pre existing potential for development and more particularly with whether that has to be discounted for future uncertainties. Whilst it is unnecessary to traverse again most of the ground covered by those cases, it is important to note, first, Lord Nicholls of Birkenheads description of the Pointe Gourde principle (at para 42 of Waters) as no more than the name given to one aspect of the long established value to the owner principle; secondly, Lord Walkers observation (at para 12 of Spirerose) that the Pointe Gourde principle is essentially concerned with statutory construction . not . with the meaning of a particular word or phrase which has appeared in a succession of statutes dealing with the same subject matter, but with the general attitude and expectation with which the Court should approach a statute dealing with compensation for the compulsory acquisition of land [operating, as it is put in Bennion, Statutory Interpretation, 5th ed (2008), p442, as a special interpretative convention]; and, thirdly, as was clearly held by the majority in Waters, that it is the Pointe Gourde principle as explained in the cases, rather than the statutory rules for assessing compensation contained in section 5 of the Land Compensation Act 1961 (rules originally enacted in section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919), which nowadays principally governs the approach to compensation in compulsory purchase cases although it nonetheless seems to me worth noting too the terms of section 5(3) of the Land Compensation Act 1961 (as amended by Schedule 15(I) of the Planning and Compensation Act 1991): The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the requirements of any authority possessing compulsory purchase powers. The policy underlying the principle is, of course, that identified by Lord Nicholls in Waters (para 18): When granting a power to acquire land compulsorily for a particular purpose Parliament cannot have intended thereby to increase the value of the subject land. Parliament cannot have intended that the acquiring authority should pay as compensation a larger amount than the owner could reasonably have obtained for his land in the absence of the power. For the same reason there should also be disregarded the special want of an acquiring authority for a particular site which arises from the authority having been authorised to acquire it. As Lord Nicholls then added (para 19): This approach is encapsulated in the time hallowed pithy, if imprecise, phrase that value in this context means value to the owner, not value to the purchaser. Bocardo contend that section 8(2) is simply not subject to the compulsory purchase principles of valuation exemplified by the Pointe Gourde rule. There is no mention, either in the 1923 Act or the 1966 Act, of the statutory rules governing the approach to compensation to be found in the 1919 Act or the 1961 Act, in contrast to a number of other statutes similarly conferring compulsory powers to acquire subterranean land or rights: notably, the Channel Tunnel Act 1987, the Water Resources Act 1991, the Electricity Act 1989, the Pipelines Act 1962 and the Gas Act 1986. Instead there is in section 8(2) an unadorned provision for fair and reasonable compensation as between a willing grantor and a willing grantee without even an entitlement to seek the Courts assessment unless and until it is shown to be not reasonably practicable to obtain the right by private arrangement because the person with power to grant the right unreasonably refuses to grant it or demands terms which, having regard to the circumstances, are unreasonable (section 3(2)(d) of the 1966 Act). Accordingly, submit Bocardo, they are in no worse negotiating position under the 1966 Act than they would be at common law indeed better placed because under the Act a willing seller cannot merely hold out for a price which properly reflects the value of the right to the purchaser but can also act so as to delay the acquisition of the right and (pursuant to section 3(2)(c) of the 1934 Act) put the purchaser to considerable expense by way of irrecoverable costs. And, of course, the seller gets a minimum 10% uplift. Ably though these arguments were presented, for my part I cannot accept them. That the present context is one of compulsory acquisition of rights over land seems to me indisputable. How, indeed, could this be more clearly demonstrated than by the express requirement under section 3(2)(b) of the 1934 Act for a 10% or greater uplift in compensation on account of the acquisition of the right being compulsory? Quite why the 1923 Act (and, in turn, the 1966 Act) do not incorporate the statutory rules contained in the general land compensation legislation is unclear, but it may be because the 1923 Act (and the 1966 Act) provide not only (as is directly relevant here) for compensation for rights over land to win minerals not in the landowners ownership, but also for consideration, for example for the working of coal whereby the property in the mineral passes from the grantor to the grantee and so calls for a valuation of that property right on an ordinary commercial basis. For the life of me, however, I can think of no sound reason why Parliament in 1934 should have intended an ancillary right of the kind under consideration here to be valued on a different and altogether more generous basis than comparable rights acquired under general compulsory purchase powers or, indeed, under the several Acts mentioned above. Quite the contrary. A strongly arguable case in fact arises here for saying that Stars diagonal wells are actually to be regarded as pipelines within the meaning of the Pipe lines Act 1962 (in which event the ordinary approach to compensation for compulsory acquisition most obviously applies). Like the Court of Appeal I think it unnecessary to reach my conclusion on the argument. But the mere fact that it arises to my mind underlines the oddity of the proposition that an entirely different compensation requirement exists for the ancillary right here in question depending upon whether it is enforceable under the 1923/1966 legislation or under the Pipe lines Act 1962. It would seem to me most odd had Parliament in 1934 expropriated with no compensation whatever the property in all subterranean petroleum together with the exclusive right to search, bore for and win it, and yet at the same time intended that the landowner, beneath whose land the Crowns licence holder must necessarily bore to achieve the statutory purpose of maximising petroleum recovery in the national interest, should thereby become entitled to a fair share of the spoils as the appellants contend. And to my mind such a supposition becomes more bizarre still when one recognises that Parliament expressly stipulated for not less than a 10% uplift in the statutory compensation payable on account of the landowner being powerless to deny the licence holder the ancillary right he requires. Why would Parliament both allow him to exploit his bargaining position for all the world as if the parties negotiation was taking place in a routine commercial context beyond the reach of legislation and then add upwards of 10% simply because he cannot at the end of the day refuse to grant the ancillary right required and is unable to charge for it more than is fair and reasonable? Is the licence holder, as Peter Smith J held, really required to pay not merely a 5% (rising to 12 %) royalty to the Crown but in addition compensation amounting to a further 9% of the value of the petroleum won in order to be able to avail himself of his statutory entitlement to win the petroleum? This issue cannot be resolved by reference simply to the language of section 8(2): what is fair and reasonable compensation as between a willing grantor and a willing grantee must inevitably depend upon whether the willing grantee is or is not entitled in the notional negotiation between the parties to exploit the position he would be in but for the grant of compulsory purchase powers to deny the licence holder access to the petroleum he is statutorily empowered to win. It depends, in short, upon whether the Court construing section 8(2) should approach it with the same general attitude and expectation as ordinarily it brings to the construction of statutory provisions dealing with compensation for compulsory land acquisition. If so, the Pointe Gourde principle applies: the landowners compensation should not be assessed at more than he could reasonably have attained for the grant of the ancillary right had the licence holder not enjoyed a statutory power to acquire it compulsorily for a particular purpose (plus, of course, upwards of 10%). I recognise, of course, that the word value (which had appeared in section 63 of the Land Clauses Consolidation Act 1845) is not to be found in section 8(2). But, as Lord Walker observed in Spirerose (see para 12 above), the Pointe Gourde approach is not dependant on a particular word or phrase but rather on the correct approach to statutory construction in this particular context. If the Court is to construe section 8(2) consistently with other legislative provisions governing compulsory acquisition, it falls to be approached on the basis that what is fair and reasonable depends not on what the grantee is gaining but rather on what the grantor is losing. It is for this reason too that the wealth of authority concerning damages for trespass (user damages) damages measured by the benefit received by the trespasser, namely, by his use of the land, as Lord Nicholls put it in AG v Blake [2001] 1 AC 268, 278 seems to me of no assistance in the present case, Bocardo having conceded throughout that their entitlement to damages can be no more than they would have received as compensation under section 8(2). As already indicated, it seems clear to me that Parliament in 1934 must have intended compensation under the 1923 Act to be assessed on similar principles to the assessment of compensation under other compulsory purchase legislation (save only that there was to be added the 10% or greater uplift payable for such ancillary rights as were required to win petroleum, notwithstanding that by section 2(1) of the 1919 Act Parliament had abolished the 10% addition for compulsory purchase that had earlier characterised compensation awards). Were, however, Parliaments intention in 1934 to be unclear and resort to be had to the Hansard Reports of the day as Bocardo themselves pray in aid the speech of the Marquess of Londonderry, the Secretary of State for Air and the Minister promoting the Bill, in support of their contention (which indeed I accept) that section 10(3) was inserted into the Act to remove any possible doubt as to whether a licence holder wishing to enter upon or interfere with land needed to obtain an ancillary right to do so under the 1923 Act; clearly they did it could only serve to support my understanding of the position with regard to the intended basis of compensation. It is sufficient for this purpose to set out a passage from the speech of Viscount Hailsham, the Secretary of State for War supporting the Bill on its second reading in the House of Lords (see Hansard (HL Debates),19 April 1934, cols 691 692): Now it is said . You are not compensating the owners for the value of the oil which is under their land. It is quite true we are not. We are not compensating them for the value of the oil that is under their land, or, for the matter of that, for the value of oil which is under their neighbours land. But it is fair to remember that at this moment and that is one reason why the Bill to be introduced and passed, as we think, at this stage there is no value in the oil under their land, or under their neighbours land. In the three cases in which licences have been granted and are being worked [licences under the Petroleum (Production) Act 1918 pursuant to which landowners were demanding royalty payments for the right to drill for oil under their land] we have been careful to exclude those areas altogether from the provisions of the Bill, because we recognise that, in accordance with our principles it would not be right to say that, where vested interests have been created and there is a chance of land having appreciated by the possibility of oil being found there, that value should be taken away without due compensation being given. In the cases with which this Bill deals the rest of the country there is no value at all today in the possible oil rights, in the chances of finding oil under the soil. But we have been careful to provide that where in any particular place arrangements are made, or asked for, for the sinking of wells or for bore holes, or in any way interfering with the actual rights that exist, interfering with the surface rights, there shall be paid not merely full compensation in the sense of the full market value, not merely full compensation for any loss of amenity value, but in addition to that it is expressly provided in the Bill that there shall be an addition of 10% because the acquisition is a compulsory one and the owner may not necessarily desire to realise that asset. So that we are careful to give full compensation in every case in which any valuable right is interfered with. All we do is to say before there is any value established, before any vested right is created, that the oil if it exists which nobody knows shall belong to the state in future; but that any interference with the rights of property on the soil, or with the value of the property under which the oil is situated, shall be fully compensated for to the owner whose property is interfered with. It seems to my mind perfectly clear that the compensation and the only compensation contemplated by Parliament in enacting the 1934 Act was for any loss of amenity value consequent on interference with actual rights that exist, in particular the surface rights. For any such loss full compensation in the sense of the full market value was to be paid, plus 10% because the owner may not necessarily desire to realise that asset. Compensation was to be for interference with any valuable right. Landowners, however, had no right at all in the oil or in the chances of finding oil under the soil. It seems clear that Parliament in 1934 was not contemplating the boring of deep wells diagonally beneath land but that, had they done so, they would not have regarded that as an interference with any actual existing right or as involving any loss of amenity value or at any rate not such an interference as required more than essentially nominal compensation. I pass now to the second of the two fundamental questions arising: even supposing ordinary compulsory purchase principles apply to the assessment of compensation under section 8(2), can Bocardo nevertheless assert and benefit from the key value of the ancillary right which Star needed to acquire here? Bocardo submit that their control over the necessary right of passage of wells through their land is in principle indistinguishable from the ownership of a ransom strip of land giving necessary access to other land: in the latter case, without acquisition of the ransom strip, the second plot is landlocked; here, without acquisition of the required ancillary right of passage, the petroleum is earth locked. For my part I readily acknowledge the closeness of the parallel between the two situations. But to point to the parallel is by no means to answer the question arising. It merely invites the posing of the question in another form: suppose a 1934 Act licence holder needs to acquire a strip of wasteland to be able to exploit his statutory right to search, bore for and get petroleum, would the owner of that strip be entitled to its key value? said there under the heading Ransom value: It is convenient at this stage to return to Waters to see what Lord Nicholls 64 One last point should be noted before returning to the present case. This concerns so called ransom value or, less pejoratively, key value. I have already mentioned that under the value to the owner principle or the Pointe Gourde principle, whichever nomenclature is preferred, the pressing need of an acquiring authority for the subject land as part of a scheme should be disregarded when assessing its value for compensation purposes. The value of the land is not the price a driven buyer would be prepared to pay. But a strip of land may have special value if it is the key to the development of other land. In that event this feature of the land represents part of its value as much for purposes of compensation as on an actual sale in the open market. 65. The intersection of these two principles was identified neatly by Mann LJ in Batchelor v Kent County Council (1989) 59 P &CR 357, 361: If a premium value is entirely due to the scheme underlying the acquisition then it must be disregarded. If it was pre existent to the [scheme] it must in my judgment be regarded. To ignore the pre existent value would be to expropriate it without compensation and would be to contravene the fundamental principle of equivalence . 66. In the present case the claimants contend their land had key value because of its importance as compensatory wetlands required for completion of the Cardiff Bay barrage project. Whether this contention is well founded for compensation purposes depends, in accordance with the principle enunciated by Mann LJ, on the ambit of the scheme of which the subject lands acquisition was an integral part. In reality Bocardo are advancing here essentially the same argument as was advanced by the owners of the wetlands in Waters which I there identified (at para 153) as their second argument and (at para 156) rejected, observing that: If correct, it would emasculate the no scheme rule to the point of extinction. Like Lord Nicholls, I too (at para 157) cited Mann LJs judgment in Batchelor v Kent County Council and (at para 158) concluded: Assuming, however, that any premium value, or indeed any other particular value, of the land were entirely due to the scheme underlying the acquisition (or, if one prefers Lord Nicholls formulation in Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, 136, due to the very scheme of which the [acquisition] forms an integral part), then in my judgment, notwithstanding that it represents the lands unrealised potentiality . , it clearly falls to be disregarded. To my mind there can be no doubt as to what constitutes the scheme in the present case: the Court of Appeal (para 111) correctly identified it as: The exploitation of the petroleum licence in the specified area. Nor can there be any doubt that, whatever particular value existed in the ancillary right here required to facilitate that exploitation (any premium or key or ransom value), it existed exclusively (entirely or solely are other words used in this context) because of the scheme. But for the scheme, there was no potential use or value whatever in the right being granted. It thus fell to be disregarded under the Pointe Gourde principle as, indeed, to my mind, had it been a ransom strip of land, it would no less obviously have fallen to be disregarded whether under that principle or under section 5(3) of the 1961 Act: the purpose served by the suitability of such land for providing access could only have been achieved in pursuance of statutory powers, there being no market for such right of access apart from the requirements of the statutorily empowered licence holder. To my mind it is impossible to characterise the key value in the ancillary right being granted here as pre existent to the scheme. There is, of course, always the chance that a statutory body with compulsory purchase powers may need to acquire land or rights over land to accomplish a statutory purpose for which these powers have been accorded to them. But that does not mean that upon the materialisation of such a scheme, the key value of the land or rights which now are required is to be regarded as pre existent. This is well illustrated by Fletcher Moulton LJs judgment in In Re Lucas & Chesterfield Gas and Water Board [1909] 1 KB 16 where land had been compulsorily purchased for the construction of a reservoir. Having stated (pp29 30) the absolute rule that the landowner is only to receive compensation based upon the market value of his lands as they stood before the scheme was authorised by which they are put to public uses, the Lord Justice turned to consider the question of the special adaptability of land for purposes for which lands are required only when used for works of public utility and continued (pp30 31): Ought the owner to be entitled to higher compensation by reason of the, to him, useless peculiarities which the lands possess? No better example of the problem could be found than that which we have in the present case. The land in question is by its position and conformation marked out as a favourable site for an impounding reservoir to collect water for the public supply of a district. The peculiarities which make it suitable for that purpose add nothing to its value as agricultural or grazing land, which I will assume to be the only alternative uses. A public authority obtains powers to take it for a reservoir; ought it to pay any higher price than is represented by its agricultural or grazing value? Is not any price in excess of this a violation of the canon that you are only to give that which represents its worth to the seller, and that you are to disregard all questions of its worth to the buyer? The decided cases seem to me to have hit upon the correct solution of this problem. To my mind they lay down the principle that where the special value exists only for the particular purchaser who has obtained powers of compulsory purchase it cannot be taken into consideration in fixing the price, because to do otherwise would be to allow the existence of the scheme to enhance the value of the lands to be purchased under it. But when the special value exists also for other possible purchasers, so that there is, so to speak, a market, real though limited, in which that special value goes towards fixing the market price, the owner is entitled to have this element of value taken into consideration, just as he would be entitled to have the fertility or the aspect of a piece of land capable of being used for agricultural purposes. Towards the end of his judgment (p35) Fletcher Moulton LJ concluded: The scheme which authorises the new reservoir only entitles the owner of the land to receive as compensation the value of the land unenhanced by that scheme, and, unless its situation and peculiarities create a market for it as a reservoir site for which other possible bidders exist, I do not think that the single possible purchaser that has obtained parliamentary powers can be made to pay a price based on special suitability merely by reason of the fact that it was easy to foresee that the situation of the land would lead to compulsory powers being some day obtained to purchase it. Now it is perfectly true to say that subsequently, in Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302 (the Indian case) the Privy Council preferred the view expressed in the Lucas case by Vaughan Williams LJ (p28), namely that in assessing the award for the land the Umpire may value the possibility of the site going into the market as being required for the enlargement of the waterworks, [albeit] not on the basis of a realised possibility, or on account of the promoters having obtained from Parliament compulsory powers. But there are two important points to be made. The first is that the Indian case affords no assistance at all as to how much the acquiring authority should be regarded as willing to pay for the particular value of the land to him. Although the Board was critical of Rowlatt Js view in Sidney v North Eastern Ry. Co. [1914] 3 KB 629, 637 that the acquiring authority should pay for the lands existing use value or development potential no more than the highest price realisable from any competing prospective purchaser, there is certainly nothing to suggest that they disagreed with his view that compensation was plainly not to be assessed on the basis of the owner obtaining for himself a share in [the] value [of the land to the promoter for his scheme]. As Lord Nicholls said in Waters (para 36) with regard to the Indian case: Potentiality is part of the market value of land and must be taken into account when assessing compensation. Potentiality should be valued even if the only likely purchaser is the acquiring authority itself. That was decided in the Indian case. But market value does not include enhanced value attributable solely to the particular use proposed to be made of the land under a scheme of which compulsory acquisition of the subject land is an integral part. This element of value is not part of market value because it is not an element the owner could have realised in the open market. That is the traditional view, which has long been acted upon in this country. In practice, it appears, a more or less token increase on what otherwise would be assessed as the lands market value tends to be made in deference to the Indian case for example, in BP Petroleum Developments Ltd v Ryder [1987] 2 EGLR 233, 248, an increase from 40 per annum per acre to 45 for the rights over the additional land sought by the special purchaser there (the increase being made for him to be certain that he will acquire the rights he seeks); and, indeed, the increase from 50 to 75 which the Court of Appeal in para 116 of the present case suggested would be made by a court assessing compensation here to account for the fact that Star, as the holder of the petroleum licence, was a special purchaser. The basic 50, I should note, is the standard compulsory purchase compensation paid for a deep tunnel. The second point to be made, to my mind more important still, is that made by Lord Nicholls in paragraph 38 of Waters: The legislation under consideration in the Indian case contained no equivalent of rule 3. Rule 3 is expressed in absolute terms which appear to leave no room for taking into account a potential use of the land where the acquiring authority is the only person who could turn this potentiality into an actuality. In this regard rule 3 is more restrictive of compensation than the value to the owner principle as clarified on this point by the decision of the Privy Council in the Indian case. Indeed, as Lord Nicholls had earlier noted (para 28), rule 3 in section 5 of the 1919 Act (section 5(3) of the 1961 Act see para 12 above), constituted legislative affirmation of the approach adopted on this point by Fletcher Moulton LJ in [the Lucas case] an observation reiterated by Lord Walker in Spirerose (para 18). In my opinion, therefore, it is now to be regarded as clearly established in English law that the Fletcher Moulton (or rule 3) approach is to apply to the assessment of compensation for compulsory purchase, whether of land or rights over land, and that this approach must be recognised as an integral part of the Pointe Gourde principle. I go so far as to question, therefore, whether it will be necessary, or indeed helpful, ever again to refer to the Indian case. Lord Clarke suggests (para 140) that, had the owners of the Oxted Estate before the 1934 Act been aware of the oilfield and its potential, the key value of their land as the necessary (or best) access route to the apex of the field would already have been apparent. He then asks (para 158) whether Parliament increased the key value of the land when it enacted the 1934 Act and (para 161) concluded not: the key value was not created or enhanced by the scheme or the 1934 Act because the Oxted Estate already had a key value in the market. To my mind, however, this approach is to overlook the true effect of the 1934 Act. It must be recognised that by this Act, Parliament in terms (a) vested the property in all petroleum in the Crown, (b) gave the Crown the exclusive right of searching and boring for and getting such petroleum (a right that could be licensed to others, as here to Star) and (c) enabled any licencee compulsorily to acquire any necessary ancillary right (as here to access the petroleum through Bocardos land). The correct analysis seems to me to be this: that by these provisions Parliament was at one and the same time extinguishing whatever pre existing key value Bocardos land might be thought to have had in the open market and creating a new world in which only the Crown and its licencees had any interest in accessing the oilfield and in which they had been empowered to do so (to turn the key if one wants to persist in the metaphor) compulsorily and thus on terms subject to the Pointe Gourde approach to compensation. As from 1934 all exploitation of petroleum was pursuant to the new statutory licensing scheme; all, that is, save for the petroleum won pursuant to the three licences previously granted under the 1918 Act which consistently with the first of the two paragraphs quoted above (para 76) from Viscount Hailshams speech promoting the 1934 Bill was expressly excluded from the 1934 Act Scheme (by the proviso to section 1(1)). As, however, the second quoted paragraph from the speech makes plain, save for those previously licensed areas, there was to be no value at all in possible oil rights or the chances of finding oil under the soil. The 1934 Act marked the end of key values and the payment of royalties. As I have sought to explain, compensation thereafter was to be paid on the usual basis in compulsory acquisition cases (with, of course, a 10% uplift). In summary, I reject Bocardos contentions, first, that the principles governing the approach to valuation in compulsory purchase cases have no application to the assessment of compensation under section 8(2); second, that in any event there is here no relevant scheme to be discounted under the Pointe Gourde principle; third, that Bocardos power of control over the passage by wells or pipes through their land gave a pre existing key value to the ancillary rights which Star needed to acquire from them; and, fourth, that for purely geographical reasons the land through which access was required always had potential value so long as petroleum resources lay underground. Each contention is in reality a re formulation of the same essential argument, namely that Bocardo are entitled to some share of the value of the petroleum being accessed through their land. If they are, then no doubt substantial damages such as those awarded here at first instance are appropriate (although there are detailed criticisms to be made of the precise calculation arrived at). If not, however, then the 1,000 awarded by the Court of Appeal can be regarded as positively generous: compensation under section 8(2) would have been assessed at no more than 82.50 including the 10% uplift. There is frankly no coherent basis for any intermediate award. As will already be apparent, the Court of Appeals approach here (following as it does Peter Gibson Js decision in very similar circumstances in BP Petroleum Developments v Ryder) is to my mind strongly to be preferred. I would dismiss this appeal. LORD COLLINS I agree with Lord Hopes reasons for concluding that Stars cross appeal should be dismissed, and with Lord Browns reasoning on the quantum of damages. The principles for the award of damages in cases such as this are fully canvassed in Pell Frishmann Engineering Ltd v Bow Valley Iran Ltd [2009] UKPC 45, [2010] Bus LR 73, per Lord Walker at [46] [54]. It is common ground that the measure of damages is to be assessed by reference to the amount which Bocardo would have been awarded under section 8(2) of the Mines (Working Facilities and Support) Act 1966, had Star obtained an order from the court granting it the necessary ancillary rights over Bocardos land. The statutory scheme is simple. The issues would now be regulated by the Petroleum Act 1998 and the Mines (Working Facilities and Support) Act 1966, but the licence to Star in the present case was issued pursuant to the Petroleum (Production) Act 1934. Section 1 of the 1934 Act vested in the Crown the property in petroleum existing in its natural condition in strata in Great Britain and gave the Crown the exclusive right to search and bore for and get such petroleum. By section 2 the Crown had the power to grant licences to search and bore for and get petroleum. Star held a licence from the Crown under the 1934 Act which gave it the exclusive right to search and bore for and get the petroleum lying under (among other land) Bocardos land. The royalty payable by Star to the Crown is 5% of the market value of the petroleum extracted, rising, depending on the amount of petroleum, to 12.5%. By section 3 of the 1934 Act, Part I of the Mines (Working Facilities and Support) Act 1923 applied to enable a person holding a licence under the 1934 Act to acquire such ancillary rights as may be required for the exercise of the rights granted by the licence. The 1923 Act as amended was replaced by the Mines (Working Facilities and Support) Act 1966, a consolidating Act. By section 1 of the 1966 Act the court may confer any ancillary right on a person having the right to work minerals, who is working or desirous of working the minerals, if the right is required in order that the minerals may be properly and conveniently worked by the licensee, and the proper and efficient working of the minerals is unduly hampered by his inability or failure to obtain that right. Among the relevant ancillary rights are a right of . shaft way . or underground way leave, or other right for the purpose of access to or conveyance of minerals (section 2(1)(b)). By section 3 no such right is to be granted under section 1 unless the court is satisfied that the grant is expedient in the national interest, and it is not reasonably practicable to obtain the right by private arrangements because (among other reasons) the person with power to grant the right unreasonably refuses to grant it or demands terms which, having regard to the circumstances, are unreasonable (section 3(2)(d)). The licensee may then apply to the Secretary of State for Energy, who may refer the matter to the court: section 4. The court may grant the right and such compensation or consideration as in default of agreement may be determined by the court shall be paid or given by the applicant (section 5(1), (2)). By section 8(1), where a right is granted under section 1, the court may determine the amount and nature of compensation or consideration to be paid or given. By section 8(2): The compensation or consideration in respect of any right . shall be assessed by the court on the basis of what would be fair and reasonable between a willing grantor and a willing grantee Section 3(2)(b) of the 1934 Act provided that in determining the amount of any compensation to be paid in respect of the grant of any right, an additional allowance of not less than ten per cent. shall be made on account of the acquisition of the right being compulsory. Even without the express reference in section 3(2)(b) to the acquisition of the right being compulsory, there can be no doubt that this would have been a case of compulsory acquisition and that any general principles of compulsory acquisition law are applicable. For present purposes the most plainly relevant is the value to the owner principle, expressed in the first edition of Cripps on Compensation (1881) as follows (at 144): The basis on which all compensation for lands required or taken should be assessed, is their value to the owner, and not their value when taken to the promoters. The question is not, what the persons who take the land will gain by taking it; but what the person from whom it is taken will lose, by having it taken from him. One aspect of the value to the owner is the principle known as the Pointe Gourde rule or the no scheme rule, namely that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition (Pointe Gourde Quarrying & Transport Co Ltd v Sub Intendent of Crown Lands [1947] AC 565, 572 (PC, per Lord McDermott), extensively discussed in Waters v Welsh Development Agency [2004] UKHL 19, [2004] 1 WLR 1304, especially at [40] et seq by Lord Nicholls and [124] et seq by Lord Brown, and in Transport for London v Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797, at [19] et seq by Lord Walker, and at [119] et seq by myself). It is not necessary to repeat what is said there, except to say that it has long been recognised that increase in value consequent upon the execution of the undertaking for or in connection with which the purchase is made must be disregarded (South Eastern Ry Co v London County Council [1915] 2 Ch 252, at 258, per Eve J). In this case there can be no doubt that Bocardo will have suffered no quantifiable physical loss. It has no property rights in the petroleum. The most that it can say is that the ancillary right which Star would have asked the court to value was the ransom value or key value in the hypothetical negotiation. Plainly a strip of land may have special value if it is the key to the development of other land, but if the premium value is entirely due to the scheme underlying the acquisition then it must be disregarded: Waters v Welsh Development Agency at [64] [65], per Lord Nicholls, approving Batchelor v Kent County Council (1989) 59 P &CR 357, 361, per Mann LJ. Put differently, the question in this case is whether the legislature intended the landowner, under whose land petroleum was discovered but who did not hold a licence to exploit the petroleum and in relation to whose land the licence holder needed access, to have a share in the enterprise or in the prospective value of the petroleum. In my judgment the whole scheme of the legislation against the background of well established principles of compensation for compulsory acquisition demonstrates that that was not the intention. The 10% uplift in the compensation would make no sense if the landowner were entitled to rely on the ransom value of the ancillary right. In Edwards v Minister of Transport [1964] 2 QB 134, 156 (applied in Logan v Scottish Water, [2005] CSIH 73, 2006 SC 178, at [102]) Harman LJ said: I do not find anywhere in the textbooks or in any of the authorities any suggestion that a kind of ransom value, to which a man having a power of veto might hold the promoting authority, was the measure of his damage; for in fact he does not have a right of veto and the question, therefore, does not really arise. In this case Bocardo would have had no right of veto, and is not entitled on the hypothetical valuation to compensation for a right which it would never have had. The true key to the oil is not Bocardos ownership of the land, but Stars licence, which gives it alone the right to bore for and produce petroleum: see Peter Gibson J in BP Petroleum Developments Ltd v Ryder [1987] 2 EGLR 233, at 247. I have come to this conclusion in the light of the legislation and general principles of law applicable to compulsory acquisition. It is true that what was said on the second reading of what became the 1934 Act (quoted by Lord Brown at [76]) supports the view that what was envisaged was loss of amenity value. But I prefer not to take that into account in the light of the continuing controversy over Pepper v Hart [1993] AC 593 and its limits: Kavanagh, Pepper v Hart and Matters of Constitutional Principle (2005) 121 LQR 98; Sir John Baker, Our Unwritten Constitution (2010) 167 Proceedings of the British Academy 91, 99 100. LORD CLARKE Introduction I. This appeal raises two questions of some interest and, perhaps, importance. The first is whether the principle sometimes known by the proposition that a landowner owns the land usque ad coelum et ad inferos is part of English law (and, if so, to what extent) and the second is the measure of damages for trespass in circumstances in which the trespasser could have sought a licence to acquire ancillary rights under section 3 of the Petroleum (Production) Act 1934 (the 1934 Act) and, if it had obtained such a licence, would have had to pay compensation under section 8(2) of the Mines (Working Facilities and Support) Act 1966 (the 1966 Act). In a judgment given on 24 July 2008 Peter Smith J (the judge) held that the respondents had committed a trespass and awarded the appellant damages in the sum of 621,180 plus interest. The Court of Appeal (Jacob, Aikens and Sullivan LJJ) reduced the damages to 1,000. Permission to appeal against the quantum of damages was refused by the Court of Appeal but granted by this Court. The respondents were subsequently granted permission to cross appeal against the finding that they were liable in trespass. The facts The appellant is and has since 1974 and 1988 been the freehold owner of Barrow Green Court and Barrow Green Farm respectively. They are near Oxted in Surrey and form the Oxted Estate. The Palmers Wood Oil Field (the Oil Field) is a naturally occurring reservoir of petroleum and petroleum gas, the north eastern part of which extends beneath the Oxted Estate. The remainder of the Oil Field lies under land in different ownerships. The respondents (Star) were successive holders of a petroleum production licence (the licence) issued by the Secretary of State for Energy on behalf of the Crown on 17 November 1980 under the 1934 Act. The licence granted the licensee exclusive licence and liberty to search and bore for, and get, petroleum in an area which included the Oil Field. The licence incorporated specified clauses of the then model clauses and required the licensee to pay royalties to the Crown as percentages of the market value of the petroleum obtained as follows: 5 per cent in respect of the first 100,000 tonnes won in any half year, 7.5 per cent of the next 50,000 tonnes, 10 per cent of the next 50,000 tonnes and 12.5 per cent of the tonnes in excess of 200,000 tonnes, all in the same half year. There are two drilling sites for the extraction of petroleum from the Oil Field, although we are concerned only with that at Coney Hill, which is immediately next to the Oxted Estate. The three wells which are the subject of this dispute are PW5, PW8 and PW9. They were drilled by Stars predecessors from the Coney Hill site. Importantly, they were not drilled vertically down from Coney Hill but diagonally so that they entered the substrata under the Oxted Estate at substantial depths beneath the surface. The wells were lined with steel casing with tubing inserted. The casing of PW5, PW8 and PW9 is of 8 inches and 12 inches in diameter. PW5 and PW8 begin at the Coney Hill site and then deviate, entering the substrata below the Oxted Estate at about 1,300 and 800 feet respectively below ground level and continue until termination at about 2,900 feet and 2,800 respectively below ground level. They run under the Oxted Estate for distances of about 0.5 and 0.7 kilometres respectively. Both wells are production wells to extract petroleum and petroleum gas from the reservoir which lies beneath the Oxted Estate and neighbouring lands. PW9 passes between the substrata beneath the Oxted Estate at about 950 feet below ground level and ends beyond it terminating at a point on the reservoir at about 1,400 feet below ground level. PW9 is used for injecting water into the Oil Field so as to maximise and speed recovery. PW5 was first drilled as an exploration well in 1986. PW8 and PW9 were drilled in July 1992. Production from PW5 began in October 1990 and from PW8 in September 1992. PW9 was used to inject water into the Oil Field from August 1992. The reason the wells were drilled diagonally under neighbouring land rather than vertically under Stars land was to maximise recovery of oil from the north eastern part of the Oil Field. Since oil is lighter than water, in order to maximise recovery it is necessary to drill the well into or close to the apex of the field, which lay under the Oxted Estate. The experts at the trial agreed that, if the wells had not been drilled under the Oxted Estate, the recovery of the petroleum from the Oil Field would not have been maximised. At no stage was permission sought from the appellant to drill beneath its land. The issues There are two principal issues in this appeal, namely whether the appellant is in principle entitled to recover damages in trespass and, if so, what is the measure of damages. Trespass Both the judge and the Court of Appeal held that the appellant is in principle entitled to recover damages in trespass. This issue has been considered in detail by Lord Hope, who has answered the question in the affirmative, as both the judge and the Court of Appeal did. I agree with his conclusion and his reasons and there is nothing I wish to add in this regard. V. Limitation of action As explained by Aikens LJ (with whom Jacob and Sullivan LJJ agreed) at para 9, the judge held that the appellants claim was time barred in respect of any trespass committed before 22 July 2000. He held that it was only entitled to damages for the trespass committed by Star from 22 July 2000 until the trial and to damages (in lieu of an injunction) for the continued trespass until the oilfield was exhausted. The judges conclusions on limitation have been accepted both in the Court of Appeal and in this Court. Damages at common law The appellants case is that it is entitled to damages on what has sometimes been called the user (or here the wayleave) basis. It is and has throughout been accepted by and on behalf of the appellant that it has suffered no damage or loss as a result of the trespass. As Aikens LJ stressed at para 112, the drilling of three pipelines at depths of 800 to 2,800 feet below the appellants land would not disturb or detract from its use of the land (to use the judges phrase) one iota. However Mr Gaunt submitted on behalf of the appellant that it does not follow from that that it is not entitled to substantial damages because it is now well settled that, where a claimant cannot show loss or damage, he may be entitled to user damages. For my part, I would accept Mr Gaunts analysis of the position at common law. The courts have held that, in the case of trespass to land, damages may be recovered equal to the value to the defendant of the use he has made of the claimants land even though the claimant has suffered no consequential loss and the value of his land has not been diminished. The principle originated in cases not unlike this, where the defendant trespassed by carrying coals along an underground way through the claimants land. The damages were assessed by determining what the claimant would have received if he had been paid for a wayleave: se eg Stoke on Trent City Council v W&J Wass Limited [1988] 1 WLR 1406 at 1410G to 1411E and the cases there cited. Those principles were then applied to cases of wrongful trespass on the surface of land and wrongful retention of the possession of land in circumstances where the claimant would not otherwise have made use of the land: see Whitwham v Westminster Brymbo Coal and Coke Co [1896] 2 Ch 538 per Rigby LJ at 543. Much more recently Lord Nicholls put the principle thus in AG v Blake [2001] 1 AC 268 at 278: A trespasser who enters anothers land may cause the landowner no financial loss. In such a case damages are measured by the benefit received by the trespasser, namely by his use of the land. The same principle is applied where the wrong consists of use of anothers land for depositing waste, or by using a path across the land or using passages in an underground mine. In this type of case the damages recoverable will be, in short, the price a reasonable person would pay for the right of user. Lord Nicholls restated the principle in Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883 at paras 87 to 90 and in Sempra Metals Limited v IRC [2008] 1 AC 561 at para 116; see also Lord Scott at para 140 and Lord Mance at para 230. The same principle applies where a landowner is awarded mesne profits, whether or not he would have re let the property during the relevant period: Swordheath Properties Limited v Tabet [1979] 1 WLR 285, which was applied by the Privy Council in Inverugie Investments Limited v Hackett [1995] 1 WLR 713. The same principles have been applied in assessing damages in lieu of an injunction: see eg Bracewell v Appleby [1975] Ch 408 and Jaggard v Sawyer [1995] 1 WLR 269, both of which were cases of obtaining access to a newly built house, and Horsford v Bird [2006] 1 EGLR 75, per Lord Scott at paras 12 and 13. It was in this connection that Lord Nicholls said in AG v Blake at page 281G that the measure of damages is often analysed as a loss of a bargaining opportunity or, which (he said) comes to the same, the price payable for the compulsory acquisition of a right. Many other examples could be given, including the leading case of Wrotham Park Estate Co Limited v Parkside Homes Limited [1974] 1 WLR 798, where damages were awarded on this basis in respect of an unlawful act which had been committed and it was too late to restrain it by injunction. It was a case where land had been developed in breach of a restrictive covenant and where the existence of the new houses did not diminish the value of the benefited land by one farthing, which is perhaps not very different from the iota referred to by both the judge and Aikens LJ. Other well known examples are Experience Hendrix LLC v PPX Enterprises Inc [2003] 1 All ER (Com) 830, WWF World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2008] 1 WLR 445 and Lunn Poly Limited v Liverpool and Lancashire Properties Limited [2006] 2 EGLR 29. Finally, the most recent case in this area is the decision of the Privy Council in Pell Frischmann Engineering Limited v Bow Valley Iran Limited [2009] UKPC 45, [2010] BLR 73, where Lord Walker, giving the judgment of the Board, reviewed the principles in detail at paras 46 to 54. At para 48 he set out five general principles established by the authorities. They included the following (omitting the case references): 1. Damages (often termed user damage) are readily awarded at common law for the invasion of rights to tangible moveable or immoveable property (by detinue, conversion or trespass). 2. 3. Damages under Lord Cairns's Act are intended to provide compensation for the court's decision not to grant equitable relief in the form of an order for specific performance or an injunction in cases where the court has jurisdiction to entertain an application for such relief. Most of the recent cases are concerned with the invasion of property rights such as excessive user of a right of way. The breach of a restrictive covenant is also generally regarded as the invasion of a property right since a restrictive covenant is akin to a negative easement. the decision of the House of Lords in Blake decisively covers what their Lordships have referred to as a non proprietary breach of contract. 4. Damages under this head (termed negotiating damages by Neuberger LJ in Lunn Poly at para 22) represent such a sum of money as might reasonably have been demanded by [the claimant] from [the defendant] as a quid pro quo for [permitting the continuation of the breach of covenant or other invasion of right] (Lunn Poly at para 25). 5. Although damages under Lord Cairns's Act are awarded in lieu of an injunction it is not necessary that an injunction should actually have been claimed in the proceedings, or that there should have been any prospect, on the facts, of it being granted: Lord Walker added at para 49: 49. Several of the recent cases have explored the nature of the hypothetical negotiation called for in the assessment of Wrotham Park damages. It is a negotiation between a willing buyer (the contract breaker) and a willing seller (the party claiming damages) in which the subject matter of the negotiation is the release of the relevant contractual obligation. Both parties are to be assumed to act reasonably. The fact that one or both parties would in practice have refused to make a deal is therefore to be ignored: I recognise that it is common ground that the measure of damages in this case must have regard to the statutory context and thus to the 1934 and 1966 Acts in particular. However, subject to that, the correct measure of damages for the trespass on the facts here would be to award the appellant user or wayleave damages and to assess them by reference to a hypothetical negotiation of the kind referred to by Lord Walker in para 49 of the judgment of the Board in Pell Frischmann. The question would be what would be a fair and reasonable figure for Star to agree to pay and for the appellant to agree to receive for the use of the part of the appellants land which was in fact used by Star as described above. That figure would reflect the key value of the wayleave. It is inconceivable that it would be only the 1,000 awarded on the facts here by the Court of Appeal. Since both the reservoir which forms the Oil Field and the Oxted Estate have been there for very many years and long before the enactment of any of the statutes relevant in this appeal, it follows that, if Star or their predecessors in title had committed the trespass that was in fact committed in order to remove oil from the Oil Field before, say, 1934, the correct measure of damages would have been user or wayleave damages calculated as stated above. I turn to the statutory framework. The statutory framework The property in petroleum existing in its natural condition in strata in Great Britain was originally vested in the owner of the land above it: see eg the decision of the Court of Appeal in Singapore in NV De Bataafsche Petroleum Maatschappij v The War Damage Commission, (1956) 23 ILR 810. However, by section 1(1) of the 1934 Act the property in such petroleum was vested in the Crown, which was given the exclusive right of searching and boring for and getting such petroleum. By section 2(1) the Board of Trade (later the Secretary of State for Energy) was given the power, on behalf of the Crown, to grant licences to search and bore for and get petroleum. By section 2(2) any such licence was to be granted for such consideration (whether by way of royalty or otherwise) as the Board of Trade with the consent of the Treasury may determine, and upon such other terms and conditions as the Board of Trade think fit. Section 3(1) provided that Part 1 of the Mines (Working Facilities and Support) Act 1923 (the 1923 Act) should apply for the purposes of enabling a person holding such a licence to acquire such ancillary rights as might be required for the exercise of the rights granted by the licence. Those rights were stated to include a right to enter upon land and to sink bore holes therein for the purpose of searching for and getting petroleum and a right to use and occupy land for the erection of such buildings, the laying and maintenance of such pipes as may be required for the purpose of searching and boring for and getting, carrying away, storing, treating and converting petroleum. Section 3(2)(b) of the 1934 Act provided that, in determining the amount of compensation to be paid in respect of the grant of any right, which included any ancillary right, an additional allowance of not less than ten per cent was to be made on account of the acquisition of the right being compulsory. Section 10(3) provided: Nothing in this Act shall be construed as conferring, or as enabling the Board of Trade to confer, on any person, whether acting on behalf of His Majesty or not, any right which he does not enjoy apart from this Act to enter on or interfere with land. Part 1 of the 1923 Act, which contained provisions for ancillary rights in section 3 and for compensation in section 9, was repealed and consolidated by the Mines (Working Facilities and Support) Act 1966 (the 1966 Act), which provided that the reference to Part 1 of the 1923 Act in section 3 of the 1934 Act was now a reference to the 1966 Act. Section 1 of the 1966 Act empowered the court to confer any rights described in a Table, which included in paragraph 5 ancillary rights, which were defined in section 2 and included by section 2(1)(b) a right of airway, shaft way or surface or underground wayleave or other right for the purpose of access to or conveyance of minerals or the ventilation or drainage of the mines. It is clear from these provisions that a grant of a petroleum licence under the 1934 Act did not itself entitle its licensee to enter land belonging to another party and that the Act did not empower the Secretary of State to grant a licence to enter such land. If the licensee wished to drill a deviated well beneath another persons land, he needed to negotiate or apply under the 1966 Act for an ancillary right, here an underground wayleave. This is important because it shows that Parliament was drawing a distinction between the oil on the one hand and the access to the oil on the other. It provided for the licensee to pay a royalty to the Crown for the oil but provided a different scheme in relation to access to the oil. That scheme involved the obtaining of ancillary rights. Section 4 of the 1966 Act provided for applications for ancillary licences to be made to the Minister, who is now the Secretary of State for Energy, and for him to refer the matter to the court. Section 5(1) of the 1966 Act provides that, where the matter is referred to the court, the court may grant an ancillary licence. Section 5 (2) provides: (2) Where a right is granted, such compensation or consideration as in default of agreement may be determined by the court shall be paid or given by the applicant in respect of the acquisition of the right to such persons as the court may determine to be entitled thereto. Section 8 provides, so far as relevant: 8 Compensation (1) Where a right is granted under section 1 of this Act, the court may determine the amount and nature of compensation or consideration to be paid or given and the persons to whom it is to be paid or given, either at the time when it determines whether the right should be granted or the restrictions imposed or at any subsequent time. (2) The compensation or consideration in respect of any right, , shall be assessed by the court on the basis of what would be fair and reasonable between a willing grantor and a willing grantee, having regard to the conditions subject to which the right is or is to be granted. Section 8 thus replaced section 9 of the 1923 Act, which was in similar terms. VIII. The correct approach to section 8(2) It is, to my mind, striking that the negotiation contemplated by section 8(2) is, at any rate on the face of it, essentially the same as is deployed by the common law in assessing wayleave damages. Its purpose is, again on the face of it, the same, namely to ascertain what would be a fair and reasonable figure for Star to agree to pay and for the appellant to agree to receive for the use of the part of the appellants land which was in fact used by Star as described above. There is nothing in the language of the subsection about the value of the land used or taken and there is no suggestion that the purpose for which the right is to be acquired is to be ignored during the postulated negotiation. Nor is there any reference in section 8(2) or elsewhere in the 1934 or 1966 Acts to the basis upon which compensation is to be assessed, as for example in section 63 of the Land Clauses Consolidation Act 1845 (the 1845 Act), section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 (the 1919 Act) or section 5 of the Land Compensation Act 1961 (the 1961 Act). See also the Pipe lines Act 1962, the Gas Act 1986, the Channel Tunnel Act 1987, the Electricity Act 1989 and the Water Resources Act 1991. In particular section 2 of the 1919 Act provided detailed rules for the assessment of compensation in respect of land acquired compulsorily. It is to my mind striking that those rules were not incorporated into the 1923 Act. Moreover, section 5 of the 1961 Act in turn set out detailed rules for the assessment of compensation, which again were not incorporated into the 1966 Act. There are many different types of compulsory acquisition legislation. The 1934 and 1966 Acts are one example and the 1919 and 1961 Acts are another. I can see no principled basis for applying the provisions of the latter Acts to the assessment of compensation under the former. If Parliament had intended those provisions to apply it would have so provided in 1923 and 1966. In this regard I agree with the reasoning of Judge Hague QC in Mercury Communications Ltd v London & India Dock Investments Ltd [1994] 1 EGLR 229. If section 8(2) of the 1966 Act is given its ordinary and natural meaning, it postulates a negotiation in which it is assumed that both parties are willing to reach agreement and that they both act reasonably. In such a negotiation, the seller will naturally stress the value of the right being sold (here the wayleave) to the purchaser. On the facts of this case, that value is the key to unlocking the oil in the reservoir because it was necessary to dig diagonal tunnels in order to maximise the oil recovered from the reservoir. On this approach, the figure agreed at the postulated negotiation would be the same as it would be at common law. Moreover, it would, as I see it, be the same whether it is treated or described as compensation or consideration. That is because what is being negotiated is a fair price for the wayleave. In the absence of authority to the contrary, I would approach the matter in that way. In the particular context of the 1934 and 1966 Acts, I see no reason not to do so. The position can be tested by a comparison between the position immediately before and after the 1934 Act came into force. Before the Act, assuming that the parties were aware of the reservoir of petroleum and its potential, and the owner of the reservoir and its oil wanted to exploit it, he would need to obtain a wayleave through the Oxted Estate. If he acted lawfully, he would have to seek a wayleave from the owner and would (it is assumed) pay a fair price. If he acted unlawfully and committed trespass, the measure of damages at common law would be the notional price of the wayleave, which is to be a fair and reasonable price arrived at after a postulated negotiation between a willing seller and a willing buyer. The strength of the sellers position (and the price or damages arrived at) would depend upon the existence and physical position of the oil on the one hand and the existence and position of the land through which it was necessary to obtain a wayleave in order to be able to exploit it on the other. Why, so far as the wayleave is concerned, should the position be any different after the 1934 Act? The effect of the Act is to transfer the oil to the Crown without compensation. That was no doubt a political decision. After the Act the Crown is in the same position as the owner of the reservoir was in before the Act. It now has the right to exploit the oil, either itself or by granting a licence. In order to exploit the oil to its full extent, it (or its licensee) needs to obtain a wayleave. It is entitled to do so but only if it pays compensation under section 8(2). That compensation is to be assessed by postulating a negotiation as described above. As I see it, the seller of the wayleave is in the same position before and after the Act. The reason it is in that position is not because of the Act, and certainly not solely because of the Act, but because of the physical position of the sellers land in relation to the reservoir. In these circumstances, absent authority to the contrary, I would hold that the measure of compensation under the Act is the same as at common law. It is true that section 3(2)(b) provides for an additional allowance of ten per cent but that is expressed to be because the acquisition of the right was compulsory. It was at one time common for such a provision to be included in statutory provisions which provided for compensation for compulsory purchase. By section 2(1) of the 1919 Act, the ten percent allowance was abolished in respect of cases to which the 1919 Act applied. That very fact, coupled with the enactment of section 3(2)(b) of the 1934 Act, demonstrates clearly that the 1919 regime does not apply to the new provisions of the 1934 Act. It appears that Parliament took the view that in this different regime an additional payment should be made over and above the amount arrived at in the postulated negotiation, which of course assumes that there is a willing seller and a willing buyer and thus that the seller (or more accurately the grantor) cannot refuse to sell. This factor tells us nothing about what would be a fair and reasonable figure to arrive at as a result of the negotiation. It is said that the approach I have described is the wrong approach to the construction of the subsection because of the Pointe Gourde principle to which I now turn. The Pointe Gourde principle This principle, which is also known as the no scheme rule, takes its name from the decision of the Privy Council in Pointe Gourde Quarrying and Transport Co Ltd v Sub Intendent of Crown Lands [1947] AC 565. The principle has been considered in some detail in two comparatively recent cases in the House of Lords. They are Waters v Welsh Development Agency [2004] UKHL 19, [2004] 1 WLR 1304, and Transport for London v Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797 (TFL). In both Waters and TFL the compensation fell to be calculated in accordance with the 1961 Act. Lord Brown summarised the principle thus in one sentence in Waters at para 125: Pointe Gourde has long been regarded as authority for the principle that compensation for compulsory purchase cannot include any increase in value which is entirely due to the scheme underlying the acquisition There are two questions which arise under this head. The first is whether this principle applies to compensation assessed under section 8(2) of the 1966 Act. The second is, if so, whether there has been an increase in the value of the wayleave entirely or solely due to the scheme. There has been some discussion in the cases as to the juridical basis of the principle. However, it is in my opinion now clear that it is a principle of statutory construction. This is clear from paras 127 and 128 of the speech of Lord Collins in TFL with which the other members of the appellate committee agreed. He put it thus: 127. What is the juridical basis of the Pointe Gourde principle? Lord Nicholls said in Waters para 42 that the principle is no more than the name given to one aspect of the long established value to the owner principle. 128. In my opinion it is a principle of statutory interpretation, mainly designed and used to explain and amplify the expression value. It is in this sense that it has sometimes been referred to as a common law principle: see e.g. Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment [2000] 2 AC 307, 315, per Lord Hope of Craighead; Waters para 142, per Lord Brown of Eaton under Heywood. In Rugby Joint Water Board v Shaw Fox [1973] AC 202, 213 215 Lord Pearson reviewed the authorities and concluded, at p 214, that although the Pointe Gourde principle had been described as a common law principle", it could not be such a principle because compulsory acquisition and compensation for it are entirely creations of statute. He went on, at pp 214 215: The Pointe Gourde principle in my opinion involves an interpretation of the word value in those statutory provisions which require the compensation for compulsory acquisition to include the value of the lands taken. I am satisfied that this the right approach and that there is nothing in Lord Nicholls speech in Waters which is inconsistent with this view. It is clear from those conclusions that the question is whether the Pointe Gourde principle applies to compensation under section 8(2) of the 1966 Act as a matter of construction of that sub section. In Waters Lord Nicholls gave the leading speech in which he analysed in some detail the approach to compensation under the various different statutes referred to above, although he did not analyse the position under the 1934 or 1966 Acts. All the statutes he analysed either expressly referred to value or contained a compensation code. Thus from para 15 he discussed the meaning of value in section 63 of the 1845 Act. He recognised at para 17 that land may have a special value and gave an example based on Inland Revenue Commissioners v Clay [1914] 3 KB 466: Thus a house, worth 750 as a house but 1,000 as an annex to an adjoining nursing home, has a market value of 1,000. Lord Nicholls then said this at para 18: 18. In principle, subject to one qualification, this approach is equally applicable when assessing value for the purposes of compensation. It is this qualification which has given rise to difficulty. The qualification is that enhancement in the value of the land attributable solely to the particular purpose for which it is being compulsorily acquired, and an acquiring authority's pressing need of the land for that purpose, are to be disregarded. If statute authorises an authority to acquire some ancient graveyards in the City of London and use the land for new buildings and a new street from Blackfriars to the Mansion House, the increased value the land will have when applied to these more profitable secular purposes should be left out of account. This is implicit in the yardstick of 'value' in the Lands Clauses Consolidation Act 1845. When granting a power to acquire land compulsorily for a particular purpose Parliament cannot have intended thereby to increase the value of the subject land. Parliament cannot have intended that the acquiring authority should pay as compensation a larger amount than the owner could reasonably have obtained for his land in the absence of the power. For the same reason there should also be disregarded the 'special want' of an acquiring authority for a particular site which arises from the authority having been authorised to acquire it. Lord Nicholls added at para 19 that it was in this context that the cases distinguish between value to the owner and value to the purchaser, which he further described at para 21: Drawing a distinction between value to the owner and value to the purchaser makes it necessary to distinguish the one from the other. It is necessary to separate from the market value of land any enhancement in value attributable solely to the presence of the acquiring authority in the market as a purchaser of the land in exercise of its statutory powers. It is important to recognise that, for this purpose, it is not the existence of a power of compulsory acquisition which increases the value of land. What is relevant, because this may affect the value of the land, is the use the acquiring authority proposes to make of the land it is acquiring. Accordingly, in identifying any enhanced value which must be disregarded it is always necessary to look beyond the mere existence of the power of compulsory purchase. It is necessary to identify the use proposed to be made of the land under the scheme for which the land is being taken. Hence the introduction of the concept of the 'scheme' or equivalent expressions such as project or undertaking. Lord Nicholls then considered the 1919 Act, The Indian Case, namely Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302, the Pointe Gourde principle and the 1961 Act. In the context of the Pointe Gourde principle he said it was one aspect of the value to the owner principle. In TFL Lord Collins summarised the position thus in part of a section of his speech entitled Principles of valuation: 88. It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition": Pointe Gourde [1947] AC 565, 572, per Lord MacDermott. 89. Some elementary principles of the law of compensation for compulsory acquisition provide a starting point. First, the underlying principle is that fair compensation should be given to the owner claimant whose land has been compulsorily taken. The aim of compensation is to provide a fair financial equivalent for the land taken. The owner is entitled to be compensated fairly and fully for his loss, but the owner is not entitled to receive more than fair compensation: Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, 125; Waters para 4. 90. Second, the basis of compensation is the value to the owner, and not its value to the public authority. In the first edition of Cripps (later Lord Parmoor), Principles of the Law of Compensation (1881) it was said, at p 144: The basis on which all compensation for lands required or taken should be assessed, is their value to the owner, and not their value when taken to the promoters. The question is not, what the persons who take the land will gain by taking it; but what the person from whom it is taken will lose, by having it taken from him. 91. The classic example mentioned by Cripps is Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37, 42 where Cockburn CJ said that it was intended that the landowner should be compensated to the extent of his loss and his loss shall be tested by what was the value of the thing to him, not by what will be its value to the persons acquiring it. 92. Third, and directly in point on this appeal, one plainly relevant element in the value to the owner is the prospect of exploiting the property. I have already mentioned R v Brown [(1867)] LR 2 QB 630, in which Cockburn CJ, at p 631, said that the jury assessing compensation under the 1845 Act had to consider the real value of the land, and may take into account not only the present purpose to which the land is applied, but also any other more beneficial purpose to which in the course of events at no remote period it may be applied, just as an owner might do if he were bargaining with a purchaser in the market. In cases where those principles apply, the critical question is what was the value to the owner, which is arrived at by excluding the value to the acquirer. This is not, however, to say that the value to the owner may not have regard to the use which will be made of the land. In a case like this, where the value of the land is that it has a ransom or key value because it is needed by the buyer to exploit his land, as I see it, the value to the owner is (or includes) the ransom or key value. Both this principle and its relation to the Pointe Gourde principle can be seen from paras 64 and 65 of Lord Nicholls speech in Waters. Lord Nicholls said at paras 64 and 65: 64. One last point should be noted before returning to the present case. This concerns so called 'ransom' value or, less pejoratively, 'key' value. I have already mentioned that under the 'value to the owner' principle or the Pointe Gourde principle, whichever nomenclature is preferred, the pressing need of an acquiring authority for the subject land as part of a scheme should be disregarded when assessing its value for compensation purposes. The value of the land is not the price a 'driven' buyer would be prepared to pay. But a strip of land may have special value if it is the key to the development of other land. In that event this feature of the land represents part of its value as much for purposes of compensation as on an actual sale in the open market. 65. The intersection of these two principles was identified neatly by Mann LJ in Batchelor v Kent County Council (1989) 59 P & CR 357, 361: If a premium value is "entirely due to the scheme underlying the acquisition" then it must be disregarded. If it was pre existent to the [scheme] it must in my judgment be regarded. To ignore the pre existent value would be to expropriate it without compensation and would be to contravene the fundamental principle of equivalence. ' The part of para 64 which I have italicised shows that the key value is part of the value to the owner. This view was also expressed by Lord Brown in Waters at para 140, where he said this: 140. True it is that in the Indian case [1939] AC 302, 312, Lord Romer said: The disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy must alike be disregarded. Neither must be considered as acting under compulsion. It by no means follows, however, that the open market value to the seller will exclude whatever key value the land may have. On the contrary, any such value properly falls to be taken into account, as it was in Stokes v Cambridge Corpn (1961) 13 P&CR 77, Land is not to be valued merely by reference to the use to which it is being put at the valuation date but by reference to any unusual features or potentialities it may have: see the Indian Case per Lord Romer, giving the judgment of the Privy Council at page 312 313. Thus value to owner includes or potentially includes key value but is to be disregarded in the circumstances identified if, as Mann LJ put it in Batchelor, at p 361, the premium or key value is entirely due to the scheme underlying the acquisition. As I see it that approach encapsulates the Pointe Gourde principle and is a gloss on or modification (or perhaps explanation) of the value to owner principle. On the other hand, if on the facts of the particular case, the premium value or key value was pre existent to the scheme it is taken into account and not disregarded. The question is whether these principles apply to compensation under section 8(2) of the 1966 Act. It is difficult to see how they do as a matter of construction of the Act. I have already expressed the view that the codes in the 1919 and 1961 Acts do not form part of the approach identified in section 8(2) of the 1966 Act and thus in the 1934 Act. There is moreover no reference to value in that subsection. In these circumstances, although it is a compensation provision, as Lord Pearson put it in the passage approved by Lord Collins in para 128 of his speech in TFL quoted above (and thus by the House), the Pointe Gourde principle involves an interpretation of the word value. Since the word value does not appear in section 8(2), it is difficult to see why it should be construed as if it did. For these reasons I would hold that the subsection should be construed by the application of the language used in it as explained above without reference either to the codes or to the Pointe Gourde principle. In this regard I prefer the reasoning of Judge Hague in Mercury Communications to that of Peter Gibson J in BP v Ryder [1987] 2 EGLR 233. I should, however, say a word about the Hansard materials relied upon by the respondents. I agree with Lord Hope for the reasons he gives in para 43 that there is no legitimate basis for using Hansard as an aid to construction of the simple terms of the 1923, the 1934 or the 1966 Acts. Like section 9 of the 1923 Act, section 8(2) of the 1966 Act is in simple terms. It can readily be applied to the facts of this case. It is true that there is no reference to key value in the Hansard materials; nor is there any reference to the Pointe Gourde principle. There is accordingly no reference to the distinction drawn in Batchelor; so that no assistance can be obtained from Hansard as to the principles the court must apply to the postulated negotiation other than those stated in the sub section. It appears to me that no consideration was given at all to the problems that have arisen in this connection and that the correct approach is for the court to construe the statute in accordance with its language and having regard to its statutory purpose. This can readily be done without the assistance of Hansard. I recognise that others do not take the same view of the subsection. I therefore turn to the question what, on the assumption that the Pointe Gourde principle applies to the assessment of compensation under section 8(2), is the correct approach to the key value. Again, in a case of this kind the starting value is the key value, which must only be disregarded if it represents an increase in value which is entirely due to the scheme underlying the acquisition. I take this to refer to the acquisition of the wayleave. The contrast is that identified by Mann LJ in Batchelor as approved by Lord Nicholls in para 65 of Waters. The question is whether the key value was entirely due to the scheme underlying the acquisition or whether it was pre existent to the scheme. Another way of putting what seems to me to be essentially the same question is to ask, as Lord Nicholls does in para 18 of Waters, whether Parliament increased the key value of the land when it enacted the 1934 Act. It is important to note that this approach does not disregard the key or ransom value but encapsulates it. It is expressly accepted as relevant by Lord Nicholls in para 64 of Waters set out above. In this connection I should mention two cases which are referred to by Lord Collins at para 105 but which were not I think relied upon in argument. They are Edwards v Minister of Transport [1964] 2 QB 134, per Harman LJ at page 156, and Logan v Scottish Water [2005] CSIH 73, 2006 SC 178, which applied his analysis. Harman LJ there said that the possibility of assessing damages by reference to a ransom value did not really arise because such a value would only be relevant if the postulated seller had a right of veto, which he does not because the rights are being compulsorily purchased. In my opinion that approach cannot be correct in the light of Waters, at any rate under section 8(2). The figure to be arrived at as a result of the postulated negotiation in a case of this kind is the key or ransom value of the wayleave, that is a fair and reasonable price for the access to the oil reservoir, but on the assumption of a willing seller or grantor and a willing buyer or grantee. Thus the value reflects the importance of the particular access to the particular oil. I note in passing that, in these circumstances, it seems to me that the ten per cent uplift is also understandable as reflecting the fact that the seller was compelled to sell. The critical question is thus that stated above, namely whether the key value was entirely due to the scheme underlying the acquisition or whether it was pre existent to the scheme. In my opinion the key value was not created or enhanced by the scheme or the 1934 Act because the Oxted Estate already had a key value in the market. As I see it, this is a case like Chapman, Lowry & Puttick Limited v Chichester District Council (1984) 47 P&CR 674, where the acquiring authority owned a plot of housing land to the rear of a small quantity of waste land which was necessary to gain access to the housing land. The question was whether the purpose for which the land was required was to be taken into account. It was held that it was. The Tribunal (VG Wellings QC) said at page 680: It appears to me that the reference land is the key which unlocks the development value of the rear land in whosoevers hands the rear land happens to be. By reason of that fact the reference land has acquired naturally a value in excess of its existing use value. The matter can be tested by analogy with the Pointe Gourde principle as was done by the Court of Appeal in Lambe v Secretary of State for War [[1955] 2 QB 612]. It is not the scheme underlying the acquisition which gives value to the reference land in excess of its existing use value; it is its geographical position, coupled with the fact that there is no other suitable access for residential development on the rear land. I would accept the appellants submission that that is essentially the position on the facts here. This a case which is on the side of the line identified by Mann LJ in Batchelor in which the land had a key value which was pre existent to the Act and the scheme. That key value depended upon the juxtaposition of two physical features of the land, namely the existence of the reservoir of oil and the existence of the land which was part of the Oxted Estate and which was above the apex of the oil deposit and, given the absence of any other suitable or optimal access to that apex, would be needed by anyone who exploited the oil in the reservoir in order to maximise the recovery of the oil. Moreover it had and has this key value even if, as is likely, there is only one owner or licensee who wishes to exploit the oil. In these circumstances, the key value cannot in my opinion fairly be described as solely or entirely due to the scheme because it pre existed it. Whenever the owner of the oil chose to exploit it fully he would need a wayleave over the Oxted Estate. That is so, whether the owner was a private landowner before the oil was nationalised or was the Crown after the 1934 Act and, in that case, whether the Crown exploited the oil itself or granted a petroleum licence to another to do so. In short, the key value was not created by the 1934 Act or the grant of the petroleum licence to Star. It was pre existing key value. For my part, save perhaps for BP v Ryder, I would not accept the submission that, if that is the case here, it must follow that any of the decided cases was wrongly decided. There was no equivalent of the existing reservoir in Waters or TFL. In these circumstances, assuming (contrary to my view) that the no scheme rule derived from Pointe Gourde applies to the assessment of compensation under section 8(2) of the 1966 Act and thus to the 1934 Act, I do not accept that this approach would emasculate the no scheme rule to the point of extinction. Whether the relevant value falls to be disregarded depends upon which side of the line drawn by Mann J in Batchelor and approved in Waters the facts of a particular case falls. If this case does not fall on what may be called the appellants side of the line, it is difficult to see what case would. For these reasons I have reached a different conclusion from the Court of Appeal on this part of the case. Since writing the above paragraphs I have seen Lord Browns response at paras 89 to 91. I remain unpersuaded. The key value attaches to the access land and not to the oil. Both before and after the 1934 Act it was or would have been necessary for the person seeking to exploit the oil to obtain access through the Oxted Estate by acquiring ancillary rights. It would thus have been necessary for that person to obtain such rights, whether as owner of the oil or licensee from the Crown. In both cases he would have needed a wayleave and in both cases he would have had to pay a price that reflected the key value of the access land (not the oil). In these circumstances I remain of the view that the key value was not solely attributable to the scheme. It was at least in part attributable to the physical juxtaposition of the access land and the reservoir. The Pipe lines Act 1962 The respondents rely in the alternative on the Pipe lines Act 1962 (the 1962 Act). They say that it is part of the background of statutory legislation against which the hypothetical negotiation would have taken place and that they could have obtained a right to drill or maintain oil wells and pipelines through the appellants land under sections 11 and 12 of the 1962 Act, which provided for compensation under the 1961 Act. The appellants response is two fold. The first is that, since neither the respondents nor their experts or lawyers thought of this point when they were considering the matter in detail before the judge or when they prepared the grounds of appeal to the Court of Appeal upon which permission to appeal was granted, it is hardly likely to have played any part in hypothetical negotiations in the 1980s. It was certainly never suggested in evidence that it would have done, although that is hardly surprising since nobody thought of the point until it appeared in the respondents revised skeleton argument in the Court of Appeal. I would be reluctant to rest a decision on this analysis. The appellants second response is that the 1962 Act does not apply. Section 65 provides, so far as relevant: (1) In this Act pipe line (except where the context otherwise requires) means a pipe for the conveyance of any thing other than air, water, water vapour or steam It is submitted that the pipes in this case were not for the conveyance of substances and that this can be seen from section 57 of the 1962 Act, which amended section 3(2)(b) of the 1923 Act. In its unamended form section 3(2)(b) provided that ancillary rights included (b) [a] right of underground wayleave, or other right for the purpose of access to or conveyance of minerals or the ventilation or drainage of the mines; Section 57 of the 1962 Act amended section 3(2)(b) of the 1923 Act by excluding from it rights for the conveyance of minerals by means of a pipe, thus (as Mr Gaunt puts it) leaving all other ancillary rights, including the right to bore wells, to be covered by the 1923 Act. Section 57 was repealed in 1966 when the amendment to the 1923 Act was reflected in the definition of ancillary rights in section 2(1)(b) of the 1966 as quoted above. He submits that, in these circumstances, the correct conclusion is that the 1962 Act was not intended to apply to pipes constituting the oil well itself. That seems to me to be correct. A third point has occurred to me under this head. Where it applies, the effect of the 1962 Act is to apply the compensation scheme under the 1961 Act; so that, if it applies here, those principles, including the Pointe Gourde principles would apply. It seems to me to follow that compensation would be payable for the reasons given in section IX above, namely that the key value was not solely or entirely due to the scheme. The Human Rights Act The appellant sought permission to rely upon the Human Rights Act 1998 on the basis that compensation of so little as was awarded by the Court of Appeal would infringe its rights under Article 1 of Protocol 1 of the European Convention on Human Rights. However, since, if the conclusions I have already expressed were correct, the appellant would be no better off in terms of damages than he would be under section 8(2), there is no need for me to express a view under this head. Measure of damages This topic would of course only arise if I were right so far. Since the majority of the court take a different view on that question, the measure of damages is not relevant. It seems to me that, if it were relevant, the correct approach would be to assess a fair and reasonable amount to reflect the key value of the wayleave, in the words of section 8(2), as between a willing grantor and a willing grantee, and to add ten per cent in accordance with the statute. However, as I see it, that key value would not reflect the value of the access to all the oil in the reservoir. Its particular value was to provide access to the apex (or attic) oil. I am not, at least at present, persuaded that that was the basis upon which the figure was arrived at by the judge. In these circumstances, if this were a live issue, I would remit it to the High Court for determination. CONCLUSION For the reasons I have given I would allow the appeal and would remit the issue of damages to the High Court.

The appellant, Bocardo, is the freehold owner of the Oxsted Estate, Surrey. The apex of an oil field (the Palmers Wood oil field) lies at a depth of some 2,800 ft below ground within the Oxsted Estate. Pursuant to section 2 of the Petroleum (Production) Act 1934 Star held a licence issued by the Secretary of State for Energy on behalf of the Crown giving them the exclusive right to search and bore for and get the petroleum lying underground (the property in which section 1 of the 1934 Act had vested in the Crown) in a part of Surrey including the Palmers Wood oil field. To win the petroleum, Star needed to drill and install three wells. These three wells were drilled diagonally from a site outside Bocardos Oxsted Estate. They each entered the estate at various depths below ground level (between about 800 ft and 1,300 ft), ran through the estate for between about 250 m and 700 m and then exited the estate at a depth below ground level that was even greater than the depth at which they entered the estate. Their drilling and installation occasioned no harm whatsoever to the estate. There was no interference with Bocardos use or enjoyment of its land. The Mines (Working Facilities and Support) Act 1966 applied to enable Star to acquire such ancillary rights as they required in order to win the petroleum. Stars predecessors did not seek to negotiate any contractual licence or way leave from Bocardo to drill and install the wells. Nor did they apply for any statutory right to do this under the 1966 Act or the Pipelines Act 1962. Star in turn did not seek to do this when they acquired the licence from their predecessors. So far as material, section 8(2) of the 1966 Act provides that [t]he compensation or consideration in respect of any right. shall be assessed. on the basis of what would be fair and reasonable between a willing grantor and a willing grantee. And section 3(2)(b) of the 1934 Act gave the grantor a minimum uplift in compensation of 10% on account of the acquisition of the right being compulsory. The issues that this case raises fall into two parts: The trespass issue: was the drilling of the wells under Bocardos land an actionable trespass? The High Court held that it was and its decision was affirmed by the Court of Appeal. The damages issue: if there was an actionable trespass, what is the correct measure of damages? The measure that was adopted by the High Court was rejected by the Court of Appeal, which made a very substantial reduction in the award of damages. Bocardo appealed to the Supreme Court on the damages issue, and the respondents cross appealed on the trespass issue. The Supreme Court unanimously dismisses the respondents cross appeal on the trespass issue, with Lord Hope giving the judgment of the Court on this issue. By a majority (Lord Walker, Lord Brown and Lord Collins), the Supreme Court dismisses Bocardos appeal on the damages issue, with Lord Brown giving the judgment of the majority on this issue. The trespass issue The question whether the drilling of the wells under Bocardos land, and the continued presence of the well casing and tubing within them, was an actionable trespass raises the following issues: (1) Whether Bocardos title to the land extends down to the strata below the surface through which the three wells and their casing and tubing pass. (2) Whether possession or a right to possession is a pre condition for bringing a claim for trespass and, if so, whether Bocardo has or is entitled to possession of the subsurface strata through which these facilities pass. (3) Whether the respondents have a right under the 1934 Act to drill and use the three wells and their casing and tubing to extract petroleum from beneath Bocardos land which gives them a defence to a claim in trespass. As to (1), the Court holds that the owner of the surface is the owner of the strata beneath it, including the minerals that are to be found there, unless there has been an alienation of them by conveyance, at common law or by statute, to someone else. There must obviously be some stopping point, as one reaches the point at which physical features such as pressure and temperature render the concept of the strata belonging to anybody so absurd as to be not worth arguing about. But the wells that are at issue in this case are far from being so deep as to reach the point of absurdity. Indeed the fact that the strata can be worked upon at those depths points to the opposite conclusion [para 27]. As to (2), as the paper title carries with it title to the strata below the surface, Bocardo must be deemed to be in possession of the subsurface strata too. There is no one else who is claiming to be in possession of those strata through Bocardo as the paper owner [para 31]. As to (3), the right to search and bore for and get the petroleum was obtained by the respondents under licence from the Crown. There is no common law defence against a claim of trespass in relation to a landowner who was not a party to that arrangement [para 32]. The relevant statutory provisions (and the context in which they were enacted) also do not give the respondents a defence to Bocardos trespass claim [paras 33 35]. The damages issue The answer to the damages issue depends upon the answers to two fundamental questions: (1) Do the principles ordinarily governing the approach to valuation in the field of compulsory land purchase apply equally to the construction of the application of section 8(2) of the 1966 Act with regard to the compulsory acquisition of ancillary rights over (or, as here, under) land? (2) Even assuming that compulsory purchase principles apply to the assessment of compensation under section 8(2), can Bocardo nevertheless assert and benefit from the key value of the ancillary right which Star needed to acquire here? As to the first question, that the present context is one of compulsory acquisition of rights over land seems to Lord Brown indisputable. Lord Brown notes that this could not be more clearly demonstrated than by the express requirement under section 3(2)(b) of the 1934 Act for a 10% or greater uplift in compensation on account of the acquisition of the right being compulsory [para 71]. If the Court is to construe section 8(2) consistently with other legislative provisions governing compulsory acquisition, it falls to be approached on the basis that what is fair and reasonable depends not on what the grantee is gaining but rather on what the grantor is losing [para 74]. As to the second question, Lord Brown referred to the decision of the House of Lords in Waters v Welsh Development Agency [2004] 1 WLR 1304, in which it was reaffirmed that if any premium value of a strip of land was due to the very scheme of which the acquisition forms an integral part, that value fell to be disregarded (the no scheme rule). However, it was also recognised in Waters that a strip of land may have special value if it is key to the development of other land. In that event this feature of the land represents part of its value as much for purposes of compensation as on an actual sale in the open market [paras 80 81]. The scheme in the present case is the exploitation of the petroleum licence in the specified area. There cannot be any doubt that, whatever particular value existed in the ancillary right here required to facilitate that exploitation (any premium or key or ransom value), it existed exclusively because of the scheme. But for the scheme, there was no potential use of value whatever in the right being granted [para 82]. It is impossible to characterise the key value in the ancillary right being granted here as pre existent to the scheme [para 83]. It must be recognised that by the 1934 Act, Parliament in terms (a) vested the property in all petroleum in the Crown, (b) gave the Crown the exclusive right of searching and boring for and getting such petroleum (a right that could be licensed to others, as here to Star) and (c) enabled any licencee compulsorily to acquire any necessary ancillary right (as here to access the petroleum through Bocardos land). The correct analysis is that by these provisions Parliament was at one and the same time extinguishing whatever pre existing key value Bocardos land might be thought to have had in the open market and creating a new world in which only the Crown and its licencees had any interest in accessing the oilfield and in which they had been empowered to do so compulsorily and on terms subject to the no scheme rule approach to compensation [para 90].

Siblings can be as important as parents in the lives of those who have them. While parents have been likened to the doctors doing their ward rounds to see the bigger picture, siblings have been likened to the nurses: they are there every day. These siblings are often fellow travellers through adversity or significant life events; they can act as a source of support for some children and a source of conflict for others. For these reasons, siblings are a potentially powerful influence on development (White & Hughes, Why Siblings Matter: The Role of Brother and Sister Relationships in Development and Wellbeing (2018)). These appeals concern the role of siblings in the procedures by which childrens hearings in Scotland make compulsory supervision orders (CSOs). The principal issue concerns the procedures required to make sure that public authorities comply with the obligation in article 8 of the European Convention on Human Rights (ECHR) to show respect for the private or family life established between a sibling and a child who might be the subject of a CSO. Although the procedures are very different in different parts of the United Kingdom, the applicable Convention rights are the same. The potential importance of sibling relationships to the welfare of children is not in dispute. What is in dispute is how that importance should be reflected in the childrens hearings procedure: specifically, should those siblings who want it be accorded the same status as parents as relevant persons in the proceedings? Or will something more flexible suffice? The proceedings which have led to these appeals have revealed that there has hitherto been a gap in the legislation and the guidance given on this matter. In this judgment when we refer to sections of an Act we are referring to the Childrens Hearings (Scotland) Act 2011 (the 2011 Act) unless we state otherwise. The childrens hearings system There are no less than 17 grounds for referring a child to a childrens hearing (2011 Act, section 67(2)). Broadly speaking, they cover three different types of situation: where a child is at risk of harm from a lack of parental care or of physical or sexual abuse; where a child has committed a criminal offence; and where a child is misbehaving in some other way, such as abusing alcohol or drugs or not going to school. There are about 2,500 volunteer panel members who sit on childrens hearings. Childrens hearings are conducted by a panel of three members, one of whom is selected to be the chairing member. The hearings are designed to be child friendly and to be conducted in a manner which prizes informality, minimises the numbers involved at a hearing and avoids legalistic procedures. The hearing is conducted as a discussion. It is not like a court of law; there is no cross examination of witnesses. Panel members are not lawyers but are skilled and experienced in communicating with children and understanding their needs. The aim is to achieve what the UN Committee on the Rights of the Child, General Comment No 12 (2009) (para 34) describes as child appropriate proceedings. The 2011 Act transferred the administration of childrens hearings from local authorities to national bodies. It established the role of National Convener, who appoints the members of the Childrens Panel and appoints the members of a childrens hearing, and the chairing member, from amongst the members of the Panel. The National Convener is empowered to provide advice to childrens hearings about any matter arising in relation to their functions, including legal advice and advice about procedural matters (section 8), but he cannot direct or guide a hearing in carrying out its functions (section 9). We refer to the guidance which is relevant to these appeals in para 35 below. The 2011 Act also established Childrens Hearings Scotland, a corporate body set up to assist and facilitate, but not to direct or guide, the National Convener in carrying out his or her functions (sections 11 and 12). This involves facilitating, in keeping with national standards set by the National Convener, the recruitment, training and quality assurance of the Childrens Panel. The Principal Reporter and the Scottish Childrens Reporter Administration (SCRA) operate a national reporter service, give training to reporters, and provide the administration of the childrens hearings. A reporter decides whether to refer a child to a childrens hearing for it to determine whether to make a CSO, arranges the childrens hearings and issues notifications, invitations to attend and the papers for the hearings. The reporter also keeps a record of proceedings at the childrens hearing, supports the hearing to maintain a fair process and conducts court proceedings relating to the childrens hearing. The Principal Reporter and the SCRA provide guidance to the reporters in the exercise of their functions. Although called a supervision order, a CSO may contain any of the requirements listed in section 83(2). These include a requirement as to where the child is to reside, which can result in the child being removed from the family home and placed in foster care or some other residential setting identified by the childrens hearing. They also include a direction regulating contact between the child and a specified person or class of persons, a requirement that the child comply with any specified condition, and a requirement that the implementing local authority carry out specified duties in relation to the child. The relevant local authority (the implementation authority) is responsible for making sure that there is compliance with the CSO and that the child obtains such help as is needed. CSOs last for up to one year and can be continued on review for further periods of up to a year at a time until the child is 18 years old (section 83(1) and (7)). The procedure for the making of a CSO can be summarised briefly. The reporter compiles grounds of referral. There is then a grounds hearing before the childrens hearing (section 69) at which the grounds are explained to the child and to relevant persons (section 90). If the child and the relevant persons accept the grounds, a CSO may be made at the grounds hearing or else at a further childrens hearing. If the child or any of the relevant persons reject the grounds of referral, the reporter takes the case to the sheriff court to establish the grounds, and if the sheriff holds that the grounds are established, the case returns to a childrens hearing to decide whether to make a CSO. If the child or any relevant person is unable to understand any of the grounds, the case must be referred to the sheriff court or the referral discharged on that ground (section 94). In advance of any hearing relating to a CSO, the reporter is required to provide details of the date, time and place of the hearing to among others the referred child, any relevant persons (sections 81 and 200) and also any individual who has had significant involvement in the upbringing of the child (Childrens Hearings (Scotland) Act 2011 (Rules of Procedure in Childrens Hearings) Rules 2013, rule 22 (SSI 2013/194) (the 2013 Rules)). In certain cases, the childrens hearing will appoint a safeguarder whose role is to prepare reports on matters relevant to the hearing and to make recommendations as to the referred childs best interests. The reporter also notifies the safeguarder of such hearings. Central to the challenges which are the subject of these appeals are the definition of the relevant person and the concept of a deemed relevant person which we describe at paras 14 to 16 below. The focus of these appeals is on the article 8 rights of siblings of the referred child. But it is important to bear in mind that the referred child also has article 8 rights. And whenever they come to any decision about a child, the childrens hearing, a pre hearing panel, and a court must regard the need to safeguard and promote the welfare of the child throughout the childs childhood as the paramount consideration (section 25(2)). The primary focus of the childrens hearing must therefore be on the welfare of the child who is the subject of the proceedings, although it is, of course, the duty of the hearing to act compatibly with the Convention rights. The relevant person and the deemed relevant person Section 78(1) names the people who have a right to attend a childrens hearing. Among those listed is a relevant person in relation to the child. Section 200 defines who is a relevant person in relation to a child. Those persons include a parent or guardian having parental responsibilities or parental rights in relation to the child (section 200(1)(a)) and others on whom parental responsibility is conferred by statute, including the Children Act 1989 (which applies in England and Wales). The Scottish Ministers are given a power under section 200(1)(g) to make an order specifying that another person is to be a relevant person, but that power has been exercised to date only in relation to a parent, or person with parental responsibilities under the law in Northern Ireland (Childrens Hearings (Scotland) Act 2011 (Review of Contact Directions and Definition of Relevant Person) Order 2013 (SSI 2013/193), article 3). But sections 79 to 81 provide a mechanism by which a person may be deemed to be a relevant person in relation to a child. If the individual, the child or a relevant person in relation to the child requests, the Principal Reporter must refer the matter for determination by a pre hearing panel of three members selected by the National Convener. By section 81(3) the pre hearing panel is bound to deem the individual a relevant person if it considers that the individual has (or has recently had) a significant involvement in the upbringing of the child. When an individual, who has been deemed a relevant person, has ceased to have significant involvement in the childs upbringing, there is a procedure by which a pre hearing panel can determine that that person is no longer to be deemed to be a relevant person (sections 79(5A) and 81A). The status of relevant person (or deemed relevant person) confers a right to be notified of and an obligation to attend a childrens hearing. It is a criminal offence to fail to attend if required to do so (section 74(4)). The status also gives access to the papers before the childrens hearing. A relevant person can accept or not accept the grounds for referral at a grounds hearing. The status allows the person to have legal representation and to make submissions to the panel, and it gives the person a right of appeal from a decision of the childrens hearing and a right to seek a review of a contact direction or a CSO. It is clear that the statutory scheme confers the right to be deemed a relevant person only on a person who has, or has recently had, a significant involvement in the childs upbringing. In most cases that would not include a sibling; and that is the gravamen of the appellants complaint. The factual background i) The circumstances of ABC and XY ABC is a 16 year old. He has a younger brother, DEF, aged nine and two older sisters. ABC and DEF were made the subjects of a CSO in 2016 and were accommodated by different foster carers. Until then both ABC and DEF had lived together in a family unit. DEF remains subject to a CSO but has remained in contact with ABC. On 7 September 2017 there was a childrens hearing concerning DEF. ABC did not receive an invitation to the hearing and was not asked to provide his views in advance of the hearing. ABC attended the hearing without having given any prior indication of his wish to do so. He was not given an opportunity to speak at the hearing and was then made to leave the hearing. There is a dispute of fact, which we cannot, and have not been asked to, resolve, as to whether his exclusion was the result of a confrontation at the hearing. The childrens hearing made contact directions allowing ABC direct contact with his brother for a minimum of once a fortnight for a minimum of two hours and prohibiting telephone contact. ABC then lodged an incompetent appeal against the decision of the childrens hearing. At the request of his solicitors, the Principal Reporter invited ABC to produce written information for the next hearing to consider. ABC and his solicitor were permitted to attend the next childrens hearing on 5 December 2017 and the chairperson of the hearing exercised discretion under section 78(2)(a) to allow ABC to express his views. XY is a 24 year old. He has three sisters who are now aged 17, 16 and 14. He and his sisters were removed from the care of their parents under a child protection order in 2012 and were made subject to CSOs in 2013. At the date of the hearing of his appeal the circumstances were as follows. XY was allowed supervised contact with his siblings once a month. He and his parents wished to have the family reunited. The eldest sister did not wish XY to become a relevant person in her case. The second eldest sister did, and so did the youngest sister but her safeguarder remained of the view that it is not in her best interests that XY become a relevant person in her case. In August 2017 a pre hearing panel, acting under section 81, refused XYs application to be a deemed relevant person in relation to his sisters. That decision was overturned by the sheriff but, on an appeal by the eldest sister to the Sheriff Appeal Court, the decision of the pre hearing panel was restored in relation to her. In 2018 a childrens hearing, acting under section 81A, determined that XY should not continue to be a deemed relevant person in relation to the two younger sisters. The hearing again refused to deem him a relevant person in respect of his eldest sister. XY appealed unsuccessfully to the sheriff and his appeal by stated case to the Inner House under section 164(1) was refused. As a result, XY is no longer a deemed relevant person in relation to any of his siblings. ii) The claims by ABC and XY ABC has raised an application for judicial review claiming that the decisions of the childrens hearings on 7 September and 5 December 2017 were unlawful. He seeks, among other remedies, a declarator that (a) the definition of a relevant person in section 200, (b) the mechanism by which a person can be deemed to be a relevant person in section 81 and (c) the provisions for the review of a contact direction in section 126 are all incompatible with his rights under article 8 of the ECHR, are outside the legislative competence of the Scottish Parliament and are therefore not law. ABC argues that his rights under article 8 of the ECHR mean that he should have the following procedural rights in the childrens hearing proceedings. First, he is to be notified of a childrens hearing and informed whether a CSO is being sought and if contact directions may be made. Secondly, he is to be provided with all of the papers which are to be considered at the childrens hearing. Thirdly, he has a right to attend the childrens hearing and be legally represented at it. Fourthly, he has the right to make representations. Fifthly, he has a right to appeal or seek a review of the decision of the childrens hearing. Sixthly, he has a right to require the childrens hearing to review its direction as to contact between siblings after three months. He also seeks a mandatory direction to the chairing member of a childrens hearing to adjourn a hearing if a sibling of the child has not been notified of the hearing. In his written case he explained why he sought access to the written material before the hearings: The reports to which ABC was not given access will have greatly informed both childrens hearings and will have been central to the decisions made. Matters such as DEFs health, development, welfare, educational development, his current care arrangements, the local authority view on his contact with others, including ABC, as well as formal recommendations as to the need for continued measures of supervision, whether DEF should remain accommodated in foster care and the nature and extent of his contact with all the members of his family including ABC. In a judgment dated 31 July 2018 ([2018] CSOH 81) the Lord Ordinary (Lady Wise) relied on dicta in the judgment of this Court in Principal Reporter v K [2010] UKSC 56; 2011 SC (UKSC) 91; [2011] 1 WLR 18 to read down section 81(3) to extend the people to be deemed a relevant person to include persons whose established family life with the child may be interfered with by the hearing and whose rights require the procedural protection of being a relevant person. On that basis she was not persuaded that the decisions of the childrens hearings were unlawful and refused the orders which ABC sought. ABC appealed to the Inner House. The First Division of the Inner House (the Lord President, Lord Drummond Young and Lord Malcolm) in an opinion delivered by Lord Malcolm on 27 November 2018 ([2018] CSIH 72) refused the reclaiming motion but recalled the Lord Ordinarys interlocutor in so far as it declared that words were to be read in to section 81(3). The First Division held that the ECHR did not require that ABC be afforded the status of a relevant person or the opportunity to apply for such status. They held that decisions affecting the article 8 rights of a relative other than a parent would not generally require the same level of involvement as that of a parent. They held that fairness might require that a sibling be given the opportunity to provide written information to a childrens hearing but that only exceptionally would a siblings attendance at the childrens hearing be required. They concluded that the provisions of the 2011 Act and the supporting regulations were sufficiently flexible to allow the legitimate interests of family members who were not relevant persons to be taken into account in the childrens hearing and were sufficient to protect ABCs article 8 rights. ABC, with the support of his parents, appeals to this Court with the permission of this Court granted on 27 June 2019. XY also appeals to this Court with the permission of this Court granted on 16 July 2019. XYs appeal is made under section 98 of and paragraph 13(b) of Schedule 6 to the Scotland Act 1998 against the determination of a devolution issue. He challenges the lawfulness of the provisions (sections 81(3) and 81A(3) of the 2011 Act) which govern the right to be a deemed relevant person. He argues that those provisions are not compatible with his rights under articles 6 and 8 of the ECHR and therefore not within the legislative competence of the Scottish Parliament under section 29(1) and (2)(d) of the Scotland Act 1998, unless one can read them down under section 3 of the Human Rights Act 1998 to render them compatible. XY has attended some childrens hearings concerning his siblings and has made written representations to other hearings. There is a factual dispute as to whether he has been invited to all of the relevant childrens hearings. But, again, that is not something that this Court can resolve. His appeal is supported by his parents and one of his siblings and is opposed by another sibling. His appeal to the Inner House against the sheriffs judgment to uphold the decision of the childrens hearing that he should not be accorded the status of a relevant person in relation to any of his sisters was heard by the First Division comprising the same judges as those who heard ABCs reclaiming motion. In a short Opinion of the Court dated 27 March 2019 ([2019] CSIH 19) delivered by Lord Malcolm, the First Division founded on their opinion in ABCs appeal and the opinion of the same Bench in DM v Locality Reporter [2018] CSIH 73; 2018 SLT 1308 (again a judgment delivered by Lord Malcolm) to hold that there was no merit in XYs appeal. In a short postscript the First Division expressed their and the safeguarders shared concern about the privacy rights of the children if XY were to be given the status of a relevant person, about the number of people who would attend the childrens hearings, and about the disputatious nature of the hearings which had been held. The problem which the challenges have identified The challenges which ABC and XY have mounted have revealed concerns about whether the childrens hearing system has been and is operated in a way that gives adequate protection to the legitimate interests of siblings and other family members, such as aunts, uncles and grandparents, who do not have a significant involvement in the upbringing of the child, to preserve a family relationship with the child and indeed to the legitimate interest of the child in preserving a family relationship with siblings and other relatives. The respondents in these appeals accept that these are legitimate interests. But they do not accept that it is necessary to afford the status of relevant person in order to respect them. What is the right and what is the test? In our view article 8 of the ECHR provides the appropriate framework for analysis in these cases. Article 8 includes procedural as well as substantive rights: the decision making process leading to measures of interference must be fair: McMichael v United Kingdom (1995) 20 EHRR 205, para 87. We are not persuaded that the requirement of a fair hearing under article 6 of the ECHR adds anything to that right in these cases. Under article 8(1) everyone has the right to respect for his private and family life. Public authorities may only interfere with that right in the circumstances laid down in article 8(2). The first question, therefore, is whether siblings enjoy private or family life together. The general principles were summarised recently by the European Court of Human Rights in Nazarenko v Russia (2019) 69 EHRR 6, para 56: The Court reiterates that the notion of family life under article 8 of the Convention is not confined to marriage based relationships and may encompass other de facto family ties. The existence or non existence of family life for the purposes of article 8 is essentially a question of fact depending upon the real existence in practice of close personal ties [referring to K v Finland (2003) 36 EHRR 18, para 150]. That case concerned the mothers husband, who had thought himself the father of the child until the couple divorced. There are not many cases concerning other relatives. In Lazoriva v Ukraine (Application No 6878/14) (unreported) 17 April 2018, which concerned an aunt who wished to become the childs guardian, the court pointed out that: Close relationships short of family life would generally fall within the scope of private life (see Znamenskaya v Russia, no 77785/01, para 27, 2 June 2005). Cases concerning siblings are few and far between, but an instructive example is Akin v Turkey (Application No 4694/03) (unreported) 6 April 2010. A married couple had two children, a boy and a girl, aged 11 and 6 when the couple divorced. The court awarded custody of the boy to the father and of the girl to the mother and ordered that the children should swap places for a few weeks each year. The father and son complained that this meant that the children were never together under the same roof. The court considered that family life existed between the siblings (and in any event this was not disputed). The original court order constituted an interference but the failure of later court hearings to put this right, during which they did not have due regard to the best interests of the family, constituted a violation of the States positive obligation to maintain and develop family ties. The Akin case reminds us that article 8 imposes both negative and positive obligations not to interfere in family life without justification and to take positive steps to maintain and develop family ties. In both cases, the case law under article 8 emphasises the authorities obligation to have regard to the best interests of the child (see Maslov v Austria [GC] [2009] INLR 47 (Application No 1638/03) 23 June 2008, para 82). And the decision making process must be such as to show that the authorities had a sufficient evidentiary basis for their decisions and that the interested parties, including the children themselves, were able to express their views (see, eg, Havelka v Czech Republic (Application No 23499/06) (unreported) 21 June 2007). However, the role of a parent, involving, in the absence of intervention by public authorities, the right to decide how a child is to be brought up, is qualitatively different from the role of most siblings. As noted above, a siblings role can be very important to the well being and development of a child. But where a child is being cared for away from the family, what matters is the maintenance and development of the relationship between the siblings, whether through placing them together or through staying in regular contact with one another. In the context of a childrens hearing respect is shown to that interest if, in the particular circumstances of the case, the sibling is enabled to have an involvement in the decision making process, seen as a whole, to a degree sufficient to protect his or her interest: W v United Kingdom (1988) 10 EHRR 29, para 64; McMichael v United Kingdom (above) para 87; Lazoriva v Ukraine (above) para 63; SJP and ES v Sweden (Application No 8610/11) (unreported) 28 August 2018, para 92. The required degree of involvement in the decision making process depends upon the relationship or bond between the applicant and the referred child and the applicants role, if any, in the childs life. In Boyle v United Kingdom (1995) 19 EHRR 179, para 46, the European Commission of Human Rights recognised that a denial of contact with a child would generally be an interference with a parents right to respect for family life but that that would not necessarily be the case where other close relatives were concerned so long as a restriction of access does not deny a reasonable opportunity to maintain the relationship. The central question in these appeals is therefore whether the 2011 Act and related subordinate legislation, if operated sensibly, afford the appellants a sufficient opportunity to take part in the decision making process, without their being given the status of a relevant person, or whether only the conferral of that status will suffice. Measures taken to respect a family members family life In response to the appellants contention that their interest in maintaining family life will be properly respected only if they are given the status of a relevant person, Mr Moynihan for the Principal Reporter and Ms Dunlop for the Lord Advocate submit that the legislation is compatible with article 8 of the ECHR if it is operated sensibly. Mr Moynihan and Ms Dunlop submit, correctly in our view, that the Court when assessing the operation of the childrens hearing system should look not only to the regime set out in the 2011 Act and related subordinate legislation but also to the requirements of the common law and the procedural rights under article 8 of the ECHR which govern the behaviour of the relevant public officials. They accept that these challenges have resulted in changes of practice in relation to childrens hearings. It is now the practice for notice of hearings to be given to the siblings of a child if they are sufficiently mature, for invitations to attend a hearing to be sent to a sibling and for the chairing member of the hearing to exercise her or his discretion to allow the sibling to attend the hearing. Under section 78(2)(a) the chairing member can allow a person to attend the hearing if that persons attendance is necessary for a proper consideration of the matter and under section 78(2)(b) and (3) the chairing member also has a discretion to allow such attendance unless the child or a relevant person in relation to the child objects. The SCRAs Practice Direction 3 concerning relevant persons advises reporters when arranging a hearing to consider whether there is anyone other than a relevant person and a person who may be deemed to be a relevant person whose attendance is likely to be necessary under section 78(2)(a) (para 9.1). Since 2019, para 9.2 of the Practice Direction has also stated as follows: In particular, the reporter is to invite anyone who has (i) established family life and an ongoing relationship with the child and (ii) sufficient age and maturity to participate in the hearing where: the hearing is likely to consider including a contact direction about them in a CSO for the first time or to vary a contact direction about them in a CSO, or the person has made clear that they want the hearing to consider their contact with the child. The paragraph goes on to recognise that it will be for the chairing member of the hearing to decide whether and when the individual is allowed to attend the hearing. Para 9.3 deals with situations where it was not foreseen that a hearing would consider a contact direction or where a person was not of sufficient age and maturity to be invited. In those circumstances the reporter is directed to invite the hearing to satisfy itself that it has the views of the person in relation to their contact or, if not, that the person has been given an opportunity to provide their views. The direction states that the hearing can defer the decision to allow the person to give their views directly or indirectly. Mrs Scott drew the Courts attention to sections 8 and 9 of the 2011 Act (see para 7 above). Section 8 empowers the National Convener to provide advice to childrens hearings including legal advice and advice about procedural matters. This has the aim that the hearing should not have to rely on the Principal Reporter or the legal representative appearing before it for such advice. Section 9, which protects the independence of childrens hearings, confirms that it is for the members of the childrens hearing to make the relevant decisions in carrying out their functions. But, as the respondents submitted, a reporter would advise a childrens hearing against refusing to hear or otherwise obtain the views of a sibling of sufficient age and maturity. These measures do not give a sibling access to the papers which have been given to the members of the childrens hearing and the relevant persons. But at a hearing after the grounds of referral have been accepted, the chairing member is required to inform every person present at the hearing of the substance of any relevant document: sections 91, 119 and 138 and rule 60(2)(a) of the 2013 Rules. To allow these procedures to work effectively, it is necessary that the decision makers have adequate information about the family members and the history of their involvement or contact with the child. Childrens Hearings Scotland has updated its Childrens Hearing Practice and Procedure Manual in September 2019. The Manual has in Part 2 a chapter 8 entitled Maintaining important relationships. At para 8.26 it states: Para 8.27 states: There is no statutory requirement for a childrens hearing to think about sibling contact in the same way as they must consider contact with those with parental responsibilities who are relevant persons for the purposes of childrens hearings. Panel members should have information about a childs relationships with their brothers and sisters and give careful consideration to how these relationships can be maintained and protected. The key considerations of the hearing will be: Identifying all the childs brothers and sisters, including those who have had a similar role in the childs life, such as children brought up in the same placement; The views of the children about their relationships and existing contact provisions; Promoting face to face contact where possible; The practical and emotional capacity of carers to facilitate contact; How contact can be achieved in as relaxed and natural manner as possible. Under section 17(6) of the Children (Scotland) Act 1995 (the 1995 Act), a child who is subject to a CSO or an interim CSO in respect of which the local authority is the implementation authority is a looked after child. Under section 17(1) it is the duty of the authority to safeguard and promote the welfare (which is to be their paramount concern) of any child whom they are looking after in a manner prescribed by the Secretary of State (now the Scottish Ministers). Section 17(3) requires the authority, before making any decision about a child they are looking after or proposing to look after, so far as reasonably practicable to ascertain the views of the child, as well as of the parents and others with parental responsibility and any other person whose views the authority consider relevant. The Looked After Children (Scotland) Regulations 2009 (SSI 2009/210) require the local authority to carry out an assessment of a child whom they look after or whom they are about to look after and, in so doing, to obtain details of a childs siblings and their contact with the child (regulations 3 and 4 and Schedule 1, paragraphs 7 and 8). The result of that assessment is a childs plan which must include arrangements for contact between the child and others, including any person whose views the local authority consider relevant to the matter to be decided (regulation 5 and Schedule 2, paragraph 7). Section 66(4) of the 2011 Act empowers the Principal Reporter, when investigating whether a child needs protection, guidance, treatment or control, to require the local authority to provide a report on a child, which could include relevant information about his or her siblings or other matter relating to the child which the Principal Reporter specifies. On reaching the view that it is necessary for a CSO to be made in respect of a child, the Principal Reporter has power to request further information from the local authority (section 69(4) and (5)). The Principal Reporter has a further opportunity to obtain a report from the implementation authority when arranging a childrens hearing to review a CSO (section 137(4) and (5)). Since 2013 it has been a statutory requirement that when making, varying or continuing a CSO in relation to a child, the childrens hearing must consider whether to include in the CSO a contact direction (section 29A). The Principal Reporters Practice Direction, Childrens Hearings Scotlands Practice and Procedure Manual and the statutory provisions to which we have referred provide mechanisms by which the childrens hearings can show respect for the family life of family members who are not entitled to the status of relevant person. The parents and the referred child can also make representations on behalf of members of the wider family in order to protect their article 8 interests: Principal Reporter v K (above), para 68. Family members who have or have recently had a significant involvement in the upbringing of the child, whether siblings, aunts, uncles or grandparents have the right to be deemed a relevant person under section 81(3) and they also have the right to call for a review of a contact direction: section 126 and article 2 of the Childrens Hearings (Scotland) Act 2011 (Review of Contact Directions and Definition of Relevant Person) Order 2013 (SSI 2013/193). Finally, when the grounds have been accepted by the child and each relevant person, the childrens hearing can direct the release of documents under rule 61(1)(g) of 2013 Rules so far as is necessary to enable the hearing to decide whether to make a CSO and if so the measures to be included in that order. Therefore, there is a range of measures which can be used to ensure that the relevant public authorities the childrens hearings themselves, the reporters and the local authorities comply with their duty to act compatibly with the article 8 rights of family members. We agree with the respondents that those measures should work if the childrens hearings are conducted in a practical and sensible manner and in compliance with the guidance given by the Principal Reporter and Childrens Hearings Scotland. It is, of course, a great help if there can be continuity of membership, or at least of the chairing member, between the pre hearing panel where procedural decisions are often made and the hearing itself. But the appellants contend that their rights will be adequately protected only if they have the right to obtain the status of a relevant person. Mrs Scott criticises the measures which we have described as a hotchpotch. Principal Reporter v K Both ABC and XY found on statements made by this Court in Principal Reporter v K (above) in support of their challenges. The case concerned the article 8 rights of an unmarried father of a child in respect of whom he did not have parental rights or responsibilities. The father claimed that the provisions of the 1995 Act, which then contained the definition of a relevant person, must be read compatibly with article 8 of the ECHR so as to include him and thereby afford him a proper opportunity to take part in the decision making process concerning his child at childrens hearings. In the judgment of the Supreme Court, delivered by Lord Hope and Lady Hale, his claim was upheld. The Court held (para 48): a parent (or other person) whose family life with the child is at risk in the proceedings must be afforded a proper opportunity to take part in the decision making process. As currently constituted the childrens hearing system violated the article 8 right of this father (and indeed of his child) and risks violating the rights of others in the same situation. From this it can be seen that the Courts focus was on the article 8 rights of the father and the child and extended to others only if they were in the same situation. The Court went on in para 60ff to consider how to cure the violation of those rights. The solution set out in para 69 was to interpret section 93(2)(b)(c) of the 1995 Act, which set out a part of the definition of who was a relevant person, so that the words which we italicise below were included in the statutory definition: any person who appears to be a person who ordinarily (and other than by reason only of his employment) has charge of, or control over, the child or who appears to have established family life with the child with which the decision of a childrens hearing may interfere. Giving a literal and non contextual interpretation to the inserted words would mean that every person who had established family life with the child would be a relevant person. Mr Moynihan and Ms Dunlop submit that the solution which this Court adopted in Principal Reporter v K requires to be read in its context of the article 8 rights of an unmarried father who did not have parental rights in domestic law and that the Court was addressing the rights of the parent and the child. In reading down the then current statutory provision the Court was not creating a statutory formula which could be applied across the board. We agree with this submission and with the First Divisions analysis of this Courts approach in Principal Reporter v K in paras 14 17 of its clear and succinct opinion in ABCs case. We agree with the First Divisions reading of the judgment that the reading down of the statutory provision which then governed was intended to be limited to unmarried fathers and to a limited class of others with a significant involvement in the upbringing of the child (para 17). As the First Division stated, this approach was later enacted in section 81(3). It is important to recognise that there are differences between the relationship of a parent and a child and the relationship between a sibling and a child. People who have parental responsibilities are treated as relevant persons because of those responsibilities and people who have a significant role in the upbringing of a child also have the right to be deemed a relevant person. As the European Court of Human Rights stated in Haase v Germany (2005) 40 EHRR 19, para 82, the mutual enjoyment by parent and child of each others company constitutes a fundamental element of family life. The parents and other people who have a significant involvement in the upbringing of the child are those who make decisions for the child. It is those decisions which are now being made by the public authorities through the CSO. The interference with the article 8 rights of such people is qualitatively different from the interference with the article 8 rights of siblings, which normally will be concerned with maintaining their relationship with the referred child, whether through contact or (if they are both the subject of CSOs) through being placed together. The conferment of the status of relevant person is an acknowledgement of the gravity of the interference with the family life of the child and the parents and others with that significant involvement in the childs upbringing. But there are several other reasons why it is not appropriate for a sibling, who has not taken on such responsibility for the upbringing of a child, to be given the status of a relevant person. As we have said, being a relevant person involves an obligation to attend a childrens hearing which can be enforced through the criminal law (section 74). It would not be appropriate to impose that obligation on every sibling. Each relevant person has the power to agree or not to agree the grounds of a referral. Again, that power is not obviously appropriate to a sibling who has not had a significant involvement in the upbringing of the child; and it could result in unnecessary and disruptive referrals to the sheriff court if the status of relevant person were to be so extended. A relevant person has comprehensive access to the papers before the childrens hearing. These may give a detailed account of the childs life, including confidential information about the childs education and health, any abuse that the child may have suffered, and possibly about the childs involvement in criminal activity or other anti social behaviour. The information may include details of and adverse comments concerning the problems and behaviour of the parent or parents. A childrens hearing may withhold information about the referred child from a person if its disclosure to that person would be likely to cause significant harm to that child: section 178. But the childs confidentiality is not otherwise protected. Nor is there such protection for the parents and others. Public authorities have to show respect for the article 8 rights, including the privacy rights, of everyone involved. Article 8(2) recognises that public authorities may legitimately interfere with a persons rights to family life for the protection of the rights and freedoms of others. The rights to privacy of the referred child, the parents and others must also be respected. The views of the child are an important consideration in the decision making process (section 27). There are matters relating to a child, such as adverse school reports, health problems and involvement in criminal activity, about which a parent may need to know, but not every sibling. Indeed, in XYs case, one of his younger sisters has objected to his becoming a relevant person in order to preserve her privacy. While XY has abandoned his claim to be made a relevant person in relation to that sister, the point of principle remains. Similarly, there are matters concerning a parent or parents about which the panel need to know but which may not be suitable to be divulged to one of their children. In ABCs case, his father has expressed concern about ABC having access to confidential information concerning him. In our view, the requirement to respect the privacy of others, the concerns about the dissemination of sensitive information, and the statutory requirement on the chairing member to take all reasonable steps to keep to a minimum the number of persons present at a childrens hearing at the same time (section 78(4)), all militate against reading down the statutory definition of a relevant person so as to confer the status of relevant person on anyone who appears to have established family life with the referred child with which a decision of the childrens hearing may interfere. In our view, article 8 of the ECHR does not require the public authorities to give a sibling, who has not, and has not recently had, a significant involvement in the upbringing of the child, the status of a relevant person. Thus, for reasons which are essentially the same as those of the First Division, we are satisfied that the challenges to the legislative competence of the Scottish Parliament in enacting the relevant provisions of the 2011 Act must fail. We nonetheless acknowledge that the initiation of these challenges has served to uncover a gap in the childrens hearings system which has had to be adapted to meet the requirements of article 8 in relation to siblings and other family members. There is now a clear recognition of the interest of both the child and the sibling in maintaining a sibling relationship through contact (or through placement if both are subject to CSOs) in most cases. The nature of the sibling relationship will vary from family to family and there needs to be a nuanced approach which addresses the extent of family life in that relationship, the home circumstances, how far the interests of the parents, the sibling and the child coincide and the possibility that the child, the parents and other siblings may have article 8 rights which are in conflict with those of the sibling. There needs, in short, to be a bespoke enquiry about the childs relationship with his or her siblings when the childrens hearing is addressing the possibility of making a CSO. To make effective the rights of the sibling and other family members with a similar interest in maintaining contact with a child, it is necessary both that the relevant public authorities are aware of those interests and that the siblings and family members are informed of the nature of the proceedings concerning the child and of their rights in relation to the proceedings. Each person involved in the process the Principal Reporter, the Childrens Panel members, the local authority, the social worker preparing a care plan, and the safeguarder need to be aware of those interests if the system is to operate compatibly with the article 8 rights of siblings and other family members. We have described in paras 32 to 40 above the arrangements now in place by which this may be achieved. It is for the public authorities involved to address whether further steps are desirable to protect the relevant article 8 interests. But we are persuaded that the legislative scheme of the 2011 Act can be operated in accordance with those rights. The orders sought It follows that a declarator as to legislative incompetence should not be made, for there is no such incompetence. Nor is it necessary to make any other order in ABCs case. It may be that the childrens hearing on 7 September 2017 did not adequately respect his article 8 procedural rights to have his views taken into account, but the matter was rectified in December 2017 and the contact directions have been the subject of later review decisions to which he has been able to contribute by written submission or by attendance at the childrens hearing. On each occasion, his contact with his younger brother has been preserved. Conclusion We would dismiss these appeals.

These appeals concern the role of siblings in the procedures by which childrens hearings in Scotland make compulsory supervision orders (CSOs) under the Childrens Hearings (Scotland) Act 2011 (the 2011 Act). A CSO is an order in respect of a child which may (among other things) direct where the child is to reside and regulate the childs contact with any person. The 2011 Act provides for certain persons to have (or to be deemed to have) relevant person status in relation to a child. This status confers a right to be notified of, and an obligation to attend, any childrens hearing in relation to the child. The status also confers ancillary rights, such as access to the papers, the right to make submissions, and the right to seek a review of any CSO. Under section 81(3) of the 2011 Act, a person is deemed to be a relevant person if that person has (or has recently had) significant involvement in the upbringing of the child. In most cases that would not include a sibling. ABC is a 16 year old. His younger brother, DEF, is subject to a CSO which regulates his contact with ABC. ABC is not a deemed relevant person in relation to DEF. ABC argues that the relevant person scheme is incompatible with his right to respect for his family life under article 8 of European Convention on Human Rights (ECHR) and is therefore outside the legislative competence of the Scottish Parliament. The Lord Ordinary dismissed ABCs petition for judicial review but held that the test for deemed relevant person status in section 81(3) of the 2011 Act was too narrow to be compatible with article 8 of the ECHR, unless it was read down to include a broader range of people having established family life with the child. The First Division of Inner House of the Court of Session dismissed ABCs appeal and reversed the finding that there was a need to read down section 81(3). XY is a 24 year old with three younger sisters who are all subject to CSOs. XY applied to be deemed a relevant person in relation to each of his siblings and was briefly granted this status. However, following a series of decisions by childrens hearings, sheriffs and the Sheriff Appeal Court, XY is no longer deemed to be a relevant person in relation to any of his siblings. The First Division of the Inner House of the Court of Session, applying its own decision in the ABC case, dismissed XYs appeal against these decisions. XY argues that the provisions of the 2011 Act governing the grant and removal of deemed relevant person status (sections 81(3) and 81A(3)) are not compatible with his rights to a fair hearing and to respect for his family life under articles 6 and 8 of the ECHR. He argues that these provisions are therefore not within the legislative competence of the Scottish Parliament, unless they can be read down to render them compatible. The Supreme Court unanimously dismisses the appeals. Lady Hale and Lord Hodge give the sole judgment with which the other Justices agree. The Supreme Court considers that article 8 of the ECHR provides the appropriate framework for analysis. The requirement of a fair hearing under article 6 does not add anything to that right in the present circumstances [27]. In each case, the relevant interest for the purposes of article 8 is the maintenance and development of the relationship between the sibling and the referred child [29]. In the context of a childrens hearing, respect is shown to that interest if, in the particular circumstances of the case, the sibling is enabled to have an involvement in the decision making process, seen as a whole, to a degree sufficient to protect that interest [30]. The required degree of involvement will vary based on the nature and extent of the siblings relationship with the referred child. The Supreme Court concludes that article 8 does not require public authorities to grant relevant person status to a sibling, who does not have, and has not recently had, a significant involvement in the upbringing of the child [51]. Whilst the guidance has not always been clear, there is a range of measures which can be used to ensure that the relevant public authorities comply with their duty to act compatibly with the article 8 rights of family members who are not relevant persons [41]. For instance, the Scottish Childrens Reporter Administration directs reporters, when arranging a hearing, to consider whether there is anyone other than a (deemed) relevant person who ought to be invited under the discretionary powers contained in section 78 of the 2011 Act [32]. Childrens hearings also have recourse to advice from the National Convener of Children's Hearings Scotland, who would advise against refusing to obtain the views of a sibling of sufficient age and maturity [33]. Further guidance is provided in Childrens Hearings Scotlands Practice and Procedure Manual, which directs childrens hearings to obtain information about a childs relationships with siblings and to give careful consideration to how these relationships can be maintained and protected [35]. Under the Children (Scotland) Act 1995 and the Looked After Children (Scotland) Regulations 2009, the responsible local authority must obtain details of the childs siblings and their contact with the child and prepare a childs plan with arrangements for contact between the child and others [36]. In addition, the Principal Reporter, who is responsible for investigating whether a CSO is necessary, may require the local authority to provide a report or further information about a child, including relevant information about the childs siblings [37]. The child or any relevant person may also make representations on behalf of the childs wider family, including siblings [39]. Taken together, these mechanisms allow childrens hearings to show respect for the family life of those who are not entitled to the status of relevant person [38], provided that hearings are conducted in a practical and sensible manner and in line with the guidance of the Principal Reporter and Childrens Hearings Scotland [41]. As such, the Supreme Court holds that the relevant provisions of the 2011 Act are within the competence of the Scottish Parliament and need not be read down [50, 51]. Those who have a significant involvement in the upbringing of a child are those who make decisions for the child. Relevant person status is granted to such persons because CSOs interfere with their rights to make such decisions [46]. A sibling, who has not taken on such responsibility and does not face such interference, should not be given relevant person status. It would not be appropriate for every sibling to be required to attend all the childrens hearings under pain of criminal sanction [47], or to have comprehensive access to the referred childs documents (which might include highly sensitive information about the child and other family members) [48], or to have the power to delay or disrupt referrals by withholding their agreement to the underlying grounds [47]. Nor would this be consistent with the statutory requirement for childrens hearings to minimise the number of people present at any given time [50].

The issue in this case is what is meant by the word violence in section 177(1) of the Housing Act 1996. Is it limited to physical contact or does it include other forms of violent conduct? The Court of Appeal, as it was bound to do by the earlier case of Danesh v Kensington and Chelsea Royal London Borough Council [2006] EWCA Civ 1404, [2007] 1 WLR 69, held that it was limited to physical contact: [2009] EWCA Civ 1543. The appellant contends that it is not. As the appellant is a woman, and the majority of victims of all forms of domestic violence are women, I shall refer to the victim as she throughout. But of course I realise that men can be victims too. The evolution of the statutory scheme The modern scheme of local housing authorities powers and duties towards homeless people dates back to the Housing (Homeless Persons) Act 1977. That Act provided that a person was homeless if there was no accommodation which she (together with other members of her family) was entitled to occupy. Even if there was such accommodation, a person was also homeless if it is probable that occupation of it will lead to violence from some other person residing in it or to threats of violence from some other person residing in it and likely to carry out the threats: 1977 Act, section 1(2)(b). That provision was repeated when the 1977 Act was consolidated with other housing legislation in the Housing Act 1985: see section 58(3)(b). Then came the case of R v Hillingdon London Borough Council, Ex p Puhlhofer [1986] AC 484, where the House of Lords held that a person was not homeless even if it was not reasonable for her to have to continue to occupy the accommodation to which she was entitled. In response to this, the Housing and Planning Act 1986 inserted two new subsections into section 58 of the 1985 Act. Subsection (2A) provided that A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy; but subsection (2B) permitted the local housing authority, when deciding whether it would be reasonable to continue to occupy, to have regard to the general circumstances prevailing in relation to housing in the district. No change was made to the basic definition in section 58(3), under which a person was automatically homeless if there was a risk of violence from another person living in the accommodation which she was entitled to occupy. Neither in 1977 nor in 1985 did the subsection specify who had to be the victim of such violence: it may have been assumed that it had to be the person claiming to be homeless or it may have been assumed that it would also cover the people living with her, in particular her children. The scheme was recast in Part VII of the Housing Act 1996, although retaining its basic shape. The definition of homelessness, now contained in section 175 of the 1996 Act, remained the same as it had been in the 1985 Act as amended in 1986, but section 58(3)(b) dealing with violence and section 58(2B) dealing with local housing conditions were removed into section 177 (see para 5). The former reasonable to continue to occupy requirement in section 58(2A) is now contained in section 175(3): A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy. The former section 58(3)(b) and (2B) have been translated into the new section 177, which is headed Whether it is reasonable to continue to occupy accommodation. The former section 58(2B), dealing with local housing conditions, is now contained in section 177(2), which reads as follows: In determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation, regard may be had to the general circumstances prevailing in relation to housing in the district of the local housing authority to whom he has applied for accommodation or for assistance in obtaining accommodation. Although there was some debate about it before us, the phrase used is the general circumstances in relation to housing and not the general condition of the housing stock in the area. This strongly suggests that regard may be had, not only to the quality of housing available locally, but also to the quantity. The former section 58(3)(b), dealing with the risk of violence, was recast as section 177(1) of the 1996 Act. In its original form, it read as follows: It is not reasonable for a person to continue to occupy accommodation if it is probable that this will lead to domestic violence against him, or against (a) a person who normally resides with him as a member of his family, or (b) any other person who might reasonably be expected to reside with him. For this purpose domestic violence , in relation to a person, means violence from a person with whom he is associated, or threats of violence from such a person which are likely to be carried out. This made two changes of substance from the old law. First, it expressly encompassed violence against other members of the homeless persons household: a mother for example, could not reasonably be expected to occupy accommodation where her children were at risk of domestic violence. Second, it was no longer limited to violence from someone living in the same accommodation but covered violence from an associated person, whether or not living in the same household. Section 178 spells out the Meaning of associated person in detail, but of course it includes spouses and former spouses, cohabitants and former cohabitants, and (since 2005) civil partners and former civil partners. But these changes did not change the underlying purpose of section 177(1). It has variously been called a deeming or a pass-porting provision. The effect is, as it has been since 1977, that a person who is at risk of the violence to which it applies is automatically homeless, even though she has every right to remain in the accommodation concerned and however reasonable it might in other respects be for her to do so. Questions of local housing conditions or shortages do not come into it. There was, however, another important consequence of the particular drafting technique employed in section 177. This was new to the 1996 Act and was not referred to in the argument before us. As it is automatically not reasonable for a person to continue to occupy accommodation where she is at risk of violence, she cannot be treated as intentionally homeless if she leaves. Section 191 defines when a person becomes homeless intentionally as follows: (1) A person becomes homeless intentionally if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would have been reasonable for him to continue to occupy. This result follows a recommendation of the Home Affairs Committee in their 1993 Report on Domestic Violence, to which I shall return in paragraph 21. Section 177(1) was amended, and a new section 177(1A) introduced, by the Homelessness Act 2002. These now read as follows: (1) It is not reasonable for a person to continue to occupy accommodation if it is probable that this will lead to domestic violence or other violence against him, or against (a) a person who normally resides with him as a member of his family, or (b) any other person who might reasonably be expected to reside with him. (1A) For this purpose violence means (a) violence from another person; or (b) threats of violence from another person which are likely to be carried out; and violence is domestic violence if it is from a person who is associated with the victim. Once the prospect of other violence was introduced into this pass-porting provision, it is not easy to see why the specific reference to domestic violence (together with the complex definition of associated persons in section 178) was retained, unless perhaps it was thought that domestic violence had a special meaning. But this is quite hard to reconcile with the phrase violence is domestic violence. I return to this question in paragraph 31. One reason may be that the phrase domestic violence has been in the scheme throughout, even though it was not originally used in the definition of homelessness in section 1 of the 1977 Act (see para 2 above). Section 5 of the 1977 Act dealt with responsibility for housing homeless people as between different local housing authorities. The authority first approached could in effect transfer responsibility to another housing authority if the applicant, or other members of her household, had no local connection with their area, but did have a local connection with another area, and neither the person who so applied nor any person who might reasonably be expected to reside with him will run the risk of domestic violence in that housing authoritys area: see section 5(1)(iii). The risk of domestic violence or threats of domestic violence was defined in terms of a risk from any person with whom, but for the risk of violence, he might reasonably be expected to reside or from any person with whom he formerly resided: see section 5(11). These provisions were consolidated in the 1985 Act as section 67(2)(c) and (3). The same principles were carried through into section 198(2)(c) and (3) of the Housing Act 1996 in virtually identical form, save that the risk had now to come from a person with whom he is associated. With the introduction of other violence into section 177(1) by the 2002 Act, changes were also made to section 198. Section 198(2) remains in its original form, but a new section 198(2A) has been introduced and section 198(3) replaced. These now read as follows: (2A) But the conditions for referral mentioned in subsection (2) are not met if (a) the applicant or any person who might reasonably be expected to reside with him has suffered violence (other than domestic violence) in the district of the other authority; and (b) it is probable that the return to that district of the victim will lead to further violence of a similar kind against him. (3) For the purposes of subsections (2) and (2A) violence means - (a) violence from another person; or (b) threats of violence from another person which are likely to be carried out; and violence is domestic violence if it is from a person who is associated with the victim. As with section 177, it is not easy to see why the distinction between domestic and other violence was retained, as the consequence is the same, unless there was thought to be some difference between them. There is one further provision in the homelessness scheme to which I must refer. The 1996 Act introduced a new provision in section 177(3): (3) The Secretary of State may by order specify (a) other circumstances in which it is to be regarded as reasonable or not reasonable for a person to continue to occupy accommodation. There is no equivalent power in section 198. Thus, in theory, the Secretary of State could expand the categories of people who are automatically homeless by reference to some other risk, but they could then be sent back to a district where they would face exactly that same risk. Danesh v Kensington and Chelsea Royal London Borough Council [2006] EWCA Civ 1404, [2007] 1 WLR 69, concerned the meaning of non-domestic violence in section 198. The applicant and his family were asylum seekers who had been living for just over a year in Swansea when they were granted indefinite leave to remain and thus became eligible under Part VII of the 1996 Act. They applied to Kensington which referred them to Swansea. They complained of trouble from local youths in Swansea, shouting abuse and making insulting gestures, racist abuse on a bus, and two specific incidents of assault outside a community centre and in the city centre. The local authority took the view that the two assaults were random incidents of crime which might happen anywhere to anyone and were not part of a course of harassment against the applicant or his family. The verbal abuse did not amount to a threat of violence and accordingly there was no reason to believe that it was more likely than not that violence would result if they returned to Swansea. The Court of Appeal held that in this context, violence involved some sort of physical contact: Neuberger LJ accepted the councils contention that In section 198 violence means physical violence, and the word violence on its own does not include threats of violence or acts or gestures, which lead someone to fear physical violence: see para 14. He went on to give five reasons for this, to which I shall return. Finally, it is worth noting another innovation made by the 1996 Act. Sections 145 and 149 amended the 1985 Act and the Housing Act 1988 by introducing for secure and assured tenancies a new ground for obtaining possession of a dwelling let to a married or cohabiting couple by, respectively, a local authority on a secure tenancy and a registered social landlord or charitable housing trust on an assured tenancy, where one partner has left because of violence or threats of violence towards that partner or a member of the family living with her and is unlikely to return. This was in response to a recommendation of a Department of the Environment Homelessness Policy Division Working Party Report on Relationship Breakdown and Secure Local Authority Tenants (December 1993). The facts of this case The appellant is a married woman with two young children, a girl who is now aged eight and a boy who is now aged two. They were aged respectively six and eight months in August 2008 when she left the matrimonial home in which she lived with her husband, taking the children with her, and (having nowhere else to go) sought the help of the local housing authority. The matrimonial home was rented in her husbands sole name. In her two interviews with the housing officers, she complained that her husband hates her and [she] suspects that he is seeing another woman. [She] is scared that if she confronts him he may hit her. [However her] husband has never actually threatened to hit her. She went on to complain of his shouting in front of the children, so that she retreated to her bedroom with them, not treating her like a human, not giving her any money for housekeeping, being scared that he would take the children away from her and say that she was not able to cope with them, and that he would hit her if she returned home. The officers decided that she was not homeless as her husband had never actually hit her or threatened to do so. She consulted solicitors who applied for a review which was unsuccessful. The panel noted that your root cause of homelessness is not that you fled after a domestic incident, but it was your decision to leave the matrimonial home because you felt that your husband did not love you any more and was not close to you, in addition to suspecting that he was seeing another woman. They believed that the probability of domestic violence is low and found her fear that her husband would take the children away from her to be contradictory, as she had also said that he took no interest in the children. Hence they concluded that it was reasonable for her to continue to occupy the matrimonial home while taking action to secure a transfer under the Family Law Act 1996 or alternatively seeking accommodation in the private sector. Mr Richard Drabble QC, who appears for the local authority, accepts that the housing officers and review panel applied the Danesh meaning when they decided that the appellant was not homeless within the meaning of the Housing Act 1996. If this Court decides that there is a wider meaning, the case will have to be considered afresh. There is no need, therefore, to make any further comment on the facts or upon the reasoning in the decision and review letters. The meaning of violence In Danesh the first, and principal, reason given was that physical violence is the natural meaning of the word violence: para 15. I can readily accept that this is a natural meaning of the word. It is, for example, the first of the meanings given in the Shorter Oxford English Dictionary. But I do not accept that it is the only natural meaning of the word. It is common place to speak of the violence of a persons language or of a persons feelings. Thus the revised 3rd Edition, published in 1973, also included vehemence of personal feeling or action; great, excessive, or extreme ardour or fervour; . . . passion, fury; and the 4th (1993), 5th (2002) and 6th (2006) Editions all include strength or intensity of emotion; fervour, passion. When used as an adjective it can refer to a range of behaviours falling short of physical contact with the person: see, for example, section 8 of the Public Order Act 1986. The question is what it means in the 1996 Act. The 1996 Act was originally concerned only with domestic violence, that is violence between people who are or were connected with one another in an intimate or familial way. By that date, it is clear that both international and national governmental understanding of the term had developed beyond physical contact. The Court is grateful to the diligence of both interveners, the Secretary of State for Communities and Local Government and the Womens Aid Federation of England, for gathering so many of the references together. Internationally, in 1992 the United Nations Committee, which monitors the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), adopted General Recommendation 19, which included in its definition of discrimination in relation to gender based violence acts that inflict physical, mental or sexual harm or suffering, threats of such acts, coercion and other deprivations of liberty. In 1993, the General Assembly adopted the Declaration on the Elimination of Violence against Women, defined for this purpose as any act of gender-based violence that results in, or is likely to result in, physical, sexual or psychological harm or suffering to women . . . Nationally, in 1993 the House of Commons Home Affairs Committee in its Report on Domestic Violence adopted the definition any form of physical, sexual or emotional abuse which takes place within the context of a close relationship (Session 1992-93, Third Report, HC 245-I, para 5). The Home Affairs Committee report used two reports as the basis for its inquiry: the Report on Domestic Violence of a national inter-agency working party convened by Victim Support (1992) and the Report of the Law Commission on Domestic Violence and Occupation of the Family Home (1992, Law Com No 207). The Law Commission gave this explanation of domestic violence, at para 2.3: The term violence itself is often used in two senses. In its narrower meaning it describes the use or threat of physical force against a victim in the form of an assault or battery. But in the context of the family, there is also a wider meaning which extends to abuse beyond the more typical instances of physical assaults to include any form of physical, sexual or psychological molestation or harassment which has a serious detrimental effect upon the health and well-being of the victim. The recommendations made in the Law Commissions Report were embodied in the Domestic Violence and Occupation of the Family Home Bill which passed through most of its Parliamentary stages in the session 1994 1995 before falling at the last hurdle. The same clauses were reintroduced, with immaterial amendments, in the Family Law Bill 1995 1996 and became Part IV of the Family Law Act 1996. It cannot be a coincidence that the definition of an associated person in section 178 of the Housing Act 1996 bears a very close resemblance to the definition of an associated person for the purpose of occupation and non- molestation orders under the Family Law Act 1996, in section 62(3) to (6) of that Act. It will be recalled that the Housing Act 1996 had shifted the focus, away from the presence of the perpetrator in the same accommodation as the victim, to the nature of the relationship between them. These are strong indications of joined up thinking on the part of the legislators. The Home Affairs Committee had also made the link between the criminal and family law remedies, with which it was concerned, and the housing law remedies, which were then the concern of the Department of the Environment; thus, it recommended that local authorities put an end to the nonsense where a victim fleeing domestic violence is deemed to have made herself intentionally homeless and that appropriate priority be given to rehousing victims of domestic violence (para 131). In fact, the Department of the Environment had already gone some way towards meeting the first point, as the 1991 version of the Code of Guidance for Local Authorities on Homelessness had stated (para 7.11) that authorities should not automatically treat an applicant as intentionally homeless because she had failed to use legal remedies to protect herself from domestic violence. The Department of the Environments Relationship Breakdown Working Party (see para 15 above) was well aware of the Law Commissions Report: not only was the Law Commission represented upon it but the Working Party recommended implementation of the Commissions two most relevant recommendations. All of this indicates a consciousness in 1996 of the need to align housing, homelessness and family law remedies for victims of domestic violence, so that they could have a genuine choice between whether to stay and whether to go and the local authority or social landlord would not be obliged to continue to provide family sized accommodation to the perpetrator. There was also an explicit acknowledgement in the report which led to the Family Law Act 1996 and by the Home Affairs Committee that violence could have a wider meaning than physical contact. In my view, therefore, whatever may have been the original meaning in 1977 (and, for that matter, in the Domestic Proceedings and Magistrates Courts Act 1978), by the time of the 1996 Act the understanding of domestic violence had moved on from a narrow focus upon battered wives and physical contact. But if I am wrong about that, there is no doubt that it has moved on now. In March 2005, the Home Office published Domestic Violence: A National Report, in which it was stated at para 10: To support delivery across government and its agencies through a common understanding of domestic violence, we now have a common definition. This follows the definition already used by the Association of Chief Police Officers, and is: Any incident of threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional) between adults who are or have been intimate partners or family members, regardless of gender or sexuality. That definition, or something very close to it, has been adopted by many official and governmental bodies, including the Association of Chief Police Officers: Guidance on Investigating Domestic Abuse (2008); the Crown Prosecution Service Policy for Prosecuting Cases of Domestic Violence (2010); the Ministry of Justice, in Domestic Violence: A Guide to Civil Remedies and Criminal Sanctions (February 2003, updated March 2007); and the UK Border Agency, in Victims of Domestic Violence: Requirements for Settlement Applications. Indeed, it is cited in Hounslows own leaflet, Domestic Violence: What it is and how you can get help (2009), which goes on to explain: It is rarely a one off incident and it is not only about being physically or sexually abused, you may be subject to more subtle attacks, such as constant breaking of trust, isolation, psychological games and harassment. Emotional abuse is just as serious and damaging; many survivors will carry the emotional scars long after the physical injuries have healed. The 2006 version of the Homelessness Code of Guidance for Local Authorities is explicit at para 8.21: The Secretary of State considers that the term violence should not be given a restrictive meaning, and that domestic violence should be understood to include threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional) between persons who are, or have been, intimate partners, family members or members of the same household, regardless of gender or sexuality. This was new to the 2006 Code. The fourth reason given by the Court of Appeal in Danesh, at para 18, was that various passages in the previous, 2002, Code had given a different impression, for example by comparing severe harassment with actual violence (para 8.32). However, it is not for government and official bodies to interpret the meaning of the words which Parliament has used. That role lies with the courts. And the courts recognise that, where Parliament uses a word such as violence, the factual circumstances to which it applies can develop and change over the years. There are, as Lord Steyn pointed out in R v Ireland [1998] AC 147, at p 158, statutes where the correct approach is to construe them as if one were interpreting it the day after it was passed. The House went on in that case to construe bodily harm in the Offences Against the Person Act 1861 in the light of our current understanding of psychological as well as physical harm. The third reason given by the Court of Appeal in Danesh was that it was impermissible to construe the meaning of one phrase by reference to the meaning of another. This I accept. However, as Lord Clyde observed in Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27, at p 49, which was concerned with whether same sex partners could be members of one anothers family for the purpose of succession to Rent Act tenancies, it is a relatively rare category of cases where Parliament intended the language to be fixed at the time when the original Act was passed. In other cases, as Lord Slynn of Hadley explained at p 35: It is not an answer to the problem to assume . . . that if in 1920 people had been asked whether one person was a member of another same-sex persons family the answer would have been No. That is not the right question. The first question is what were the characteristics of a family in the 1920 Act and the second whether two same-sex partners can satisfy those characteristics so as today to fall within the word family. An alternative question is whether the word family in the 1920 Act has to be updated so as to be capable of including persons who today would be regarded as being of each others family, whatever might have been said in 1920: see R v Ireland [1998] AC 147, 158, per Lord Steyn; Bennion, Statutory Interpretation, 3rd ed (1997), p 686 and Halsburys Laws of England, 4th ed reissue, vol 44(1) (1995), p 904, para 1473. Violence is a word very similar to the word family. It is not a term of article It is capable of bearing several meanings and applying to many different types of behaviour. These can change and develop over time. There is no comprehensive definition of the kind of conduct which it involves in the Housing Act 1996: the definition is directed towards the people involved. The essential question, as it was in Fitzpatrick, is whether an updated meaning is consistent with the statutory purpose in that case providing a secure home for those who share their lives together. In this case the purpose is to ensure that a person is not obliged to remain living in a home where she, her children or other members of her household are at risk of harm. A further purpose is that the victim of domestic violence has a real choice between remaining in her home and seeking protection from the criminal or civil law and leaving to begin a new life elsewhere. That being the case, it seems clear to me that, whatever may have been the position in 1977, the general understanding of the harm which intimate partners or other family members may do to one another has moved on. The purpose of the legislation would be achieved if the term domestic violence were interpreted in the same sense in which it is used by the President of the Family Division, in his Practice Direction (Residence and Contact Orders: Domestic Violence) (No 2) [2009] 1 WLR 251, para 2, suitably adapted to the forward-looking context of sections 177(1) and 198(2) of the Housing Act 1996: Domestic violence includes physical violence, threatening or intimidating behaviour and any other form of abuse which, directly or indirectly, may give rise to the risk of harm. That conclusion is consistent with the decision of the Court of Appeal in AN (Pakistan) v Secretary of State for the Home Department [2010] EWCA Civ 757. This was concerned with the meaning of domestic violence in para 289A of the Immigration Rules, which stipulates the requirements to be met by a person admitted as the spouse or civil partner of a person present or settled here who is the victim of domestic violence which has caused the relationship permanently to break down and who is seeking indefinite leave to remain in the United Kingdom. Richards LJ quoted the definitions in the 1993 Home Affairs Committee Report, the 2005 National Report (repeated in a more recent Report of the Home Affairs Committee, Domestic Violence, Forced Marriage and Honour-Based Violence, 2007-08, 6th Report, para 4), the guidance given by the UK Border Agency, and the Presidents Practice Direction. He pointed out that The general thrust of all those definitions is much the same (para 23) and accepted that the term was not limited to physical violence, although it must reach some minimum level of seriousness, which will depend upon context and particular circumstances (para 24). It remains to be discussed whether giving the words the meaning given them by the President of the Family Division would be inconsistent with anything in the statutory language or purpose. The statutory language The second reason given in Danesh for preferring a narrow construction was that, in both section 177(1) and section 198(3), violence is defined as violence or threats of violence which are likely to be carried out: para 16. If the concept of violence already included conduct which puts a person in fear of physical violence there would be no need to refer to threats at all. I am not convinced of this. For one thing, there are some forms of conduct which undoubtedly put a person in fear of violence but which would not necessarily be described as threats. Silent phone calls, heavy breathing, the sorts of stalking behaviours which were the subject matter of Bond v Leicester City Council [2001] EWCA Civ 1544, [2002] HLR 158 and R v Ireland [1998] AC 147, can all put the victim in very real (and justified) fear of violence in the narrow sense. They should be covered by the concept of violence. More importantly, if the concept of violence includes other sorts of harmful or abusive behaviour, then the reference to threats is not redundant. Locking a person (including a child) within the home, or depriving a person of food or of the money to buy food, are not uncommon examples of the sort of abusive behaviour which is now recognised as domestic violence. There is nothing redundant in a provision which refers to threats of such behaviour which are likely to be carried out. In this Court, Mr Drabble urged an alternative solution upon us: that if there were forms of ill-treatment falling short of physical violence which ought to be included within the pass-porting provision in section 177(1), the Secretary of State could use the power in section 177(3)(a) to include them. Mr Maurici, on behalf of the Secretary of State, explained that the Secretary of State has not done so because in his view the concept of violence already bears the wider meaning for which the appellant contends. There is the further objection to this solution, that there is no equivalent power in section 198, so that a person might be accepted as homeless under section 177(1) but could then be referred to a district where she would face exactly the same risks. There may also be a concern that an expanded definition is setting the threshold too low. The advantage of the definition adopted by the President of the Family Division is that it deals separately with actual physical violence, putting a person in fear of such violence, and other types of harmful behaviour. It has been recognised for a long time now that it is dangerous to ignore what may appear to some to be relatively trivial forms of physical violence. In the domestic context it is common for assaults to escalate from what seems trivial at first. Once over the hurdle of striking the first blow, apologising and making up, some people find it much easier to strike the second, and the third, and go on and on. But of course, that is not every case. Isolated or minor acts of physical violence in the past will not necessarily give rise to a probability of their happening again in the future. This is the limiting factor. Sections 177 and 198 are concerned with future risk, not with the past. The introduction in 2002 of other violence into a statute which was previously concerned only with domestic violence also raises questions. They are readily answered, if I am right that the concept of domestic violence in 1996 was already wider than physical contact. As Miss Nathalie Lieven QC for the appellant points out, the introduction of other violence in 2002 cannot possibly have been intended to cut down the meaning which the statute already had. However, if the understanding of the conduct to which the word applies has moved on, the question of whether this also applies to other violence does not arise on the facts of this case, and so it is unnecessary for us to express a concluded view. Reading the statute as it now stands, there are arguments on either side. On the one hand, if violence has the same meaning in both domestic violence and other violence, there was no need to retain the separate concept of domestic violence, together with the complicated definition of associated persons in section 178. A person who was at risk of any violence if she stayed in or returned to the property or the locality would be protected. Retaining them as separate concepts suggests that domestic violence is limited by the relationship between the victim and the perpetrator, rather than by the nature of the conduct involved. Other violence, having no such limitation and lacking the connotations of an intimate or familial relationship, might relate to a narrower set of behaviours. On the other hand, providing in sections 177(1A) and 198(3) that violence is domestic violence suggests that violence has a constant meaning. Hence, I would incline towards the view that it does. Nor would that be surprising. People who are at risk of intimidating or harmful behaviour from their near neighbours are equally worthy of protection as are those who run the same risk from their relations. But it may be less likely that they will suffer harm as a result of the abusive behaviour of their neighbours than it is in the domestic context. In practice, the threshold of seriousness may be higher. Conclusion As the housing officers and review panel adopted a narrow view of domestic violence in this case, it is agreed that it must be remitted to the authority to be decided again. I accept that these are not easy decisions and will involve officers in some difficult judgments. But these are no more intrinsically difficult than many of the other judgments that they have to make: for example, as to the circumstances in which it is reasonable to continue to occupy the accommodation; as to whether a person has rendered herself intentionally homeless; and as to the suitability of accommodation provided by the local authority. Was this, in reality, simply a case of marriage breakdown in which the appellant was not genuinely in fear of her husband; or was it a classic case of domestic abuse, in which one spouse puts the other in fear through the constant denial of freedom and of money for essentials, through the denigration of her personality, such that she genuinely fears that he may take her children away from her however unrealistic this may appear to an objective outsider? This is not to apply a subjective test (pace the fifth reason given in Danesh). The test is always the view of the objective outsider but applied to the particular facts, circumstances and personalities of the people involved. I would therefore allow this appeal and remit the case to be decided by the local housing authority. I agree that the appeal should be allowed for the reasons given by Lady Hale. I add a few comments of my own, since the point is not free from difficulty and we are differing from two decisions of the Court of Appeal. The term domestic violence rose to prominence in the 1970s in connexion with battered wives women who, whether married or not, suffered violence at the hands of their husband or partner. One reaction was to set up refuges. Another was public pressure for the law to be reformed to give such women greater protection. Of course, it was known that physical violence was not the only form of abuse which women suffered. For example, in 1974 Dr Elizabeth Wilson referred to a case where the husbands constant abuse in the form of offensive and cruel denigratory remarks had already damaged his wifes psyche possibly in a more irreparable way than if he had broken her nose: Battered wives: why they are the born victims of domestic violence, The Times 4 September 1974, p 13. But, understandably, the predicament of women who were the victims of physical violence was at the forefront of demands for the law to be reformed. It is therefore not surprising that the term domestic violence first entered English law in the short title of the Domestic Violence and Matrimonial Proceedings Act 1976 (the 1976 Act) which derived from the Private Members Bill promoted by Miss Josephine Richardson MP. There can be no doubt that the main aim of Parliament in passing the legislation was to give some additional protection, by way of injunctions in the county court and the possibility of including a power of arrest in certain cases - to women, whether married or cohabiting, who were likely to suffer physical violence at the hands of their husband or partner. Section 2 did indeed refer to the other party to the relationship using violence. But the Act was not confined to such cases. As Lord Scarman noted in Davis v Johnson [1979] AC 264, 348C-E, the mischief at which section 1 of the Act was aimed (molesting) went beyond physical violence and included conduct which makes it impossible or intolerable for the other partner, or the children, to remain at home. When, the following year, Parliament enacted the Housing (Homeless Persons) Act 1977 (the 1977 Act), it included provisions that were designed to provide additional help to victims of violence in the home. On this occasion it did not refer to cases where the woman was molested. Parliament therefore seems to have been concentrating on the paradigm case of battered wives, women who feared physical violence understandably enough, since the new Act was imposing novel obligations on local authorities. More than 30 years have passed. The legislation has become a familiar part of the legal landscape and has been re-enacted in the Housing Act 1996 (the 1996 Act). The question before the Court is whether the word violence in section 177(1) and (1A) of the 1996 Act is confined to physical violence. At first sight it is curious that Parliament has maintained the special term domestic violence. Section 177(1) now applies to cases where it is probable that continuing to occupy accommodation will lead to domestic or other violence - other violence being violence from people, such as neighbours, who are not associated with the victim. Subsection (1A) then says that violence is domestic violence if it is from a person who is associated with the victim. In my view, there is no doubt that violence means the same, whether it comes from a person associated with the victim or from a third party. The form of the provision may simply reflect the way that the provision has evolved. More likely, however, the retention of the term domestic violence is intended to serve a purpose. The aim, it seems to me, may well be to ensure that the same standard is applied to violence within the home as to other violence and so to counter any suggestion that violence within the home is to be treated as being somehow of less significance than violence outside the home. Subsection (1A) makes it clear that any conduct that would count as violence outside the home counts as violence if it occurs within the home: the law does not give a discount to the perpetrator because of the domestic setting. In 1974 Dr Wilson saw that the husbands constant denigration of his wife had damaged her psyche possibly irreparably. The Court has not been referred to any case where a court had to consider whether such conduct would have counted as violence for the purposes of section 1(2)(b) of the 1977 Act. I have already made the point that cases of that kind were not the focus of Parliaments attention in enacting that provision. But it is common place for courts to have to consider whether circumstances, beyond those at the forefront of Parliaments consideration, may properly be held to be within the scope of a provision, having regard to its purpose. Similarly, cases of physical violence surely remain the main focus of section 177(1) of the 1996 Act. And, similarly, the question remains: does deliberate non-physical abuse which harms the other party fall within the scope of violence in that subsection, having regard to its purpose? Parliament has provided that it is not reasonable for someone to continue to occupy accommodation if it is probable that this will lead to her being subjected to violence in the form of deliberate conduct, or threats of deliberate conduct, that may cause her physical harm. So the person at risk is automatically homeless for the purposes of the 1996 Act. I can see no reason why Parliament would have intended the position to be any different where someone will be subjected to deliberate conduct, or threats of such conduct, that may cause her psychological harm. I would therefore interpret violence as including such conduct and the subsection as applying in such cases. To conclude otherwise would be to play down the serious nature of psychological harm. A necessary precondition of a right to be rehoused under the homelessness legislation is that the applicant is without accommodation. Section 175(3) of the Housing Act 1996 as amended (the 1996 Act) provides: A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy. Section 177(1) of the Act provides: It is not reasonable for a person to continue to occupy accommodation if it is probable that this will lead to domestic violence or other violence against him . . . The issue identified by the parties for the Courts determination on this appeal is: Is the concept of domestic violence in section 177(1) of the Act limited to actual physical violence or is it capable of extending to abusive psychological behaviour which could reasonably be described as violence? It has long been known that psychological abuse within a domestic context can cause at least as much long-term harm to the victim (most commonly the woman) as physical abuse. Certainly no one who has read the extensive material put before us by the Womens Aid Federation of England could fail to appreciate that fact. But I have nonetheless found this a much more difficult case than other members of the Court appear to have done and I cannot hide my profound doubt as to whether at any stage of their legislative history the domestic violence provisions with which we are here concerned now enacted as sections 177 and 198 of the 1996 Act - were intended to extend beyond the limits of physical violence. A number of indicators to my mind point to this being Parliaments limited intention. One of these is the primary meaning ordinarily given to the word violence as connoting physical violence (in contrast, in the present context, to other forms of domestic abuse). A second pointer is the very definition of violence and domestic violence contained in both section 177 (1A) and section 198 (3) of the 1996 Act: (1A) For this purpose violence means (a) violence from another person; or (b) threats of violence from another person which are likely to be carried out; and violence is domestic violence if it is from a person who is associated with the victim. Psychological abuse would plainly encompass threats whether or not they are likely to be carried out: it is the threats themselves which are intrinsically abusive and harmful. It is not generally apt to speak of a threat to carry out psychological abuse. Even if one postulates a threat, say, to lock someone up in their room or deprive them of all funds, the statutory definition stipulates that it is only if the threat is likely to be carried out that it constitutes violence: the threat itself, however hurtful and humiliating, unless likely to be carried out, is excluded from the definition. Another pointer to Parliaments intention is the fact that violence falls to be construed in the same way irrespective of whether the perpetrator is a person associated with the victim (sections 177(1A) and 178) or some other person. If, of course, the perpetrator is associated with the applicant, the question arising under section 177(1) is whether the applicants continued occupation of the accommodation would probably lead to domestic violence; the question arising under section 198(2)(c) being whether, if referred to another local housing authority for re-housing in their district, the applicant would then run the risk of domestic violence in that district. If, however, the perpetrator is not associated with the applicant, the question under 177(1) is whether continued occupation of the accommodation would probably lead to violence by that person; the question under 198(2A) being whether the applicant (whom the housing authority contemplates referring to another authority) has in the past suffered (non-domestic) violence in that other authoritys district and would probably suffer violence of a similar kind if returned there. I do not say that psychological abuse (as opposed to actual or threatened physical violence) at the hands of a non-associated perpetrator is literally incapable of being described as violence and of justifying respectively (a) deemed homelessness leading to a section 193 duty to re-house or (b) non- referral back to the district whence the applicant came. I do say, however, that Parliament is unlikely to have contemplated or intended these consequences. Fourthly, it must be recognised that when the homelessness legislation was first introduced (by the Housing (Homeless Persons) Act 1977 - homelessness by section 1(2)(b) of the Act being deemed to exist in the case of those whose occupation of accommodation would probably lead to violence from some other person residing in it or to threats of violence from some other person residing in it and likely to carry out the threats, described as the risk of domestic violence in sections 5(1)(iii) and 5(11) of the Act, the equivalent provisions to those now in section 198 of the 1996 Act) the publics concern as to domestic violence was essentially about battered women (for whom, one recollects, Ms Erin Pizzey was starting to provide refuges). This view, moreover, that in the homelessness context domestic violence meant physical violence, was reflected in successive statutory Codes of Guidance issued by the Secretary of State (under provisions similar to what is now section 182(1) of the 1996 Act), certainly up until the 2006 Code. The 1978 Code, for example, referred to fear of violence and to battered women . . . at risk of violent pursuit or, if they return home, at risk of further violence (paras 2.10(b) and 2.12(c)(iii)). The 2002 Code (issued following the 2002 amendments to the 1996 Act) refers (at para 6.18) to the required assessment of the likelihood of a threat of violence being carried out not being based solely on whether there has been actual violence in the past (emphasis added) and (at para 8.26) to the safety of the applicant . . . [being] of paramount concern (emphasis added). A little later, not in the context of deemed homelessness but rather of priority need for accommodation because of vulnerability for some other special reason (section 189(1)(c) of the 1996 Act), the 2002 Code (at para 8.32) says: People fleeing harassment. In some cases severe harassment may fall short of actual violence or threats of violence likely to be carried out. Housing authorities should consider carefully whether applicants who have fled their home because of non-violent forms of harassment, for example verbal or psychological abuse or damage to property, are vulnerable as a result. There, it can readily be seen, verbal or psychological abuse is mentioned as an example of non-violent forms of harassment and contrasted with actual violence. True it is that from 1991 onwards the successive codes from time to time refer to violence or threats of violence including, for example, racial harassment or attacks, sexual abuse or harassment, and harassment on the grounds of religious creed. Invariably, however, until 2006, this was in the context not of deemed homelessness under section 177(1), but rather of whether it was reasonable for the applicant to continue to occupy his (or more generally her) accommodation, the question now arising under section 175(3) of the 1996 Act. This is the basic question which has arisen ever since 1986 (when the Housing Act 1985 was amended to overturn the effect of R v Hillingdon London Borough Council, Ex p Puhlhofer [1986] AC 484) in every case save when section 177(1) deems continued occupation not reasonable. Only in the 2006 Code (at para 8.21) did the Secretary of State first indicate his support for a wider interpretation of section 177(1): The Secretary of State considers that the term violence should not be given a restrictive meaning, and that domestic violence should be understood to include threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional) between persons who are, or have been, intimate partners, family members or members of the same household, regardless of gender or sexuality. It is not, of course, suggested that this notable change in the Secretary of States Code of Guidance could directly affect the true construction of the statute: such guidance can be at most persuasive of the meaning to be given to legislative provisions. It is, after all, for the courts not the executive to interpret legislation. But it is suggested that, consistently with the living instrument, always speaking approach to statutory construction, and following the decision of the House of Lords in Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27, the developing perception and understanding of domestic violence now enables, indeed requires, the interpretation of the relevant sections in line with the Secretary of States present views, reflecting as these do modern thinking on the question. By the same token that the majority of the Court in Fitzpatrick had regard to changes in social habits and opinions to interpret the phrase tenants family as being capable of encompassing a same-sex partner, so too, the appellant argues, nowadays it would be wrong to continue construing domestic violence (or, indeed, this being a necessary part of the appellants case, violence outside the domestic context) as meaning physical violence only. Tempting though it is to accept this argument one does not, after all, like to appear old-fashioned I confess to doubts and hesitation here too. If one considers just why it is that domestic violence (indeed, violence generally), in contradistinction to all other circumstances, has been thought to justify a deeming provision a provision, that is, which deems it unreasonable that a probable victim of future such violence should continue to occupy his or her present accommodation, the explanation would seem to me to lie partly in the obvious need for the speedy re-housing of those identified as being at risk of violence in order to safeguard their physical safety, and partly in the comparative ease with which this particular class of prospective victims can be identified. With the best will in the world I find it difficult to accept that there is quite the same obvious urgency in re-housing those subject to psychological abuse, let alone that it will be possible to identify this substantially wider class of prospective victims, however precisely they may be defined, with anything like the same ease. Confining the deeming provision to the victims and potential victims of physical abuse does not, of course, remove all other victims from protection. Rather it leaves their cases to be assessed under section 175(3). If, then, an applicant does come to be assessed as a victim of sufficiently severe psychological abuse to satisfy the section 175(3) test for homelessness (a process which I accept would be likely to take rather longer than a section 177(1) judgment in respect of physical abuse), then obviously he or she would have to be re-housed just as if they had been deemed homeless under section 177(1). It is, of course, true that, in section 175(3) cases generally but not in deemed cases, the housing officer is empowered by section 177(2) to have regard to the general circumstances prevailing in relation to housing in the district, so that theoretically, on the present understanding and application of the statute, a victim of psychological abuse, in contradistinction to a victim of physical abuse, could be subject to an adverse decision on homelessness by reference to the limited stock of housing available to an authority for re-housing purposes. Realistically, however, I see this as only a theoretical possibility since it seems to me that section 177(2) exists essentially to deal with complaints about the quality of an applicants existing housing: the housing officer may on occasion have to decide that an applicants present accommodation, however un-ideal, must suffice given the quality and quantity of the authoritys stock generally. I had at one time thought that the solution to the problem raised by this case if problem there is lay in the Secretary of States order-making power under section 177(3)(a) of the 1996 Act. I recognise, however, that there are difficulties in the use of this power: first, that, given the Secretary of States view that the victims of psychological abuse are already covered by section 177(1), he cannot properly specify their needs as arising in other circumstances; secondly, that the use of this power could not in any event affect the proper approach to section 198 so that the problem would not be entirely solved. There would remain the possibility of someone being returned for re-housing to an area where, although not cohabiting with an abuser, he or she might be at risk of future psychological abuse from a non-cohabiting family member (essentially the position in Bond v Leicester City Council [2002] HLR 158, although that case was in fact concerned with intentional homelessness and appears to have been argued and decided on the assumption that section 177(1) dealt with physical violence only) or, indeed, a neighbour. Certainly, I no longer see section 177(3) as the solution to this case. Rather the Court has no alternative but to decide whether it is indeed now right, pursuant to the Fitzpatrick principle, to give to the terms domestic violence and violence the wider meaning contended for by the appellant and both interveners. In taking this course we would, of course, be overturning two clear and unanimous decisions of the Court of Appeal: respectively of Mummery, Jacob and Neuberger LJJ in Danesh v Kensington and Chelsea Royal London Borough Council [2007] 1 WLR 69 and of Waller, Laws and Etherton LJJ in the present case. I have already indicated my very real doubts about doing so. At the end of the day, however, I do not feel sufficiently strongly as to the proper outcome of the appeal to carry these doubts to the point of dissent. I am content that the views of the majority should prevail and that the appeal should be allowed.

The issue in this case is what is meant by the word violence in section 177(1) of the Housing Act 1996. Is it limited to physical contact or does it include other forms of violent conduct? Under section 193 of the 1996 Act, where a local housing authority are satisfied that an applicant is homeless and did not become homeless intentionally, they must make accommodation available for the applicant, unless they refer the application to another local housing authority. Section 175(1) provides that a person is homeless if he has no accommodation available for his occupation. Section 175(3) provides that a person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy. Section 177(2) states that in determining whether it is reasonable for a person to continue to occupy accommodation, regard may be had to the general circumstances prevailing in relation to housing in the local housing authority district. Section 177(1) states that it is not reasonable for a person to continue to occupy accommodation if it is probable that this will lead to domestic violence or other violence against him or other members of his household. The effect of section 177(1), which has been called a pass porting provision, is that a person who is at risk of the violence to which it applies is automatically homeless, however reasonable it might in other respects be for her to remain in the accommodation. Questions of local housing conditions or shortages do not come into it. Another important consequence of section 177(1) is that the person cannot be treated as intentionally homeless. Section 198 provides that one of the conditions for referral to another local housing authority is that neither the applicant nor other members of his household will run the risk of domestic violence in the other district. In the case of Danesh v Kensington and Chelsea Royal London Borough Council [2006] EWCA Civ 1404, [2007] 1 WLR 69, the Court of Appeal held that violence in the context of section 198 involved some sort of physical contact, and the word violence on its own did not include threats of violence or acts or gestures, which lead someone to fear physical violence. In August 2008, the Appellant left the matrimonial home in which she lived with her husband, taking her two young children with her, and sought the help of the local housing authority. In interviews with housing officers, she complained of her husbands behaviour, which included shouting in front of the children, and stated that she was scared that if she confronted him he might hit her. The officers decided that she was not homeless as her husband had never actually hit her or threatened to do so. On a review, the panel noted that the root cause of her homelessness was not that she had fled after a domestic incident. The panel believed the probability of domestic violence to be low. They concluded that it was reasonable for her to continue to occupy the matrimonial home. The Respondent local authority accepted that the housing officers and review panel had applied the Danesh meaning when deciding that the appellant was not homeless within the meaning of the 1996 Act. The Supreme Court unanimously allows the appeal and sends the case back to be decided again by the local housing authority. Lady Hale gives the leading judgment. The Court holds that domestic violence in section 177(1) of the 1996 Act includes physical violence, threatening or intimidating behaviour and any other form of abuse which, directly or indirectly, may give rise to the risk of harm. Physical violence is not the only natural meaning of the word violence. Another natural meaning is strength or intensity of emotion; fervour, passion. [19] By the time of the 1996 Act, both international and national governmental understanding of the term domestic violence had developed beyond physical contact. There is certainly no doubt that the understanding of domestic violence has moved on now, as demonstrated by the definitions used in a 2005 Home Office publication Domestic Violence: A National Report and in the 2006 Homelessness Code of Guidance for Local Authorities. [20] [24] Violence is not a term of article It is capable of bearing several meanings and applying to many different types of behaviour. These can change and develop over time. The essential question is whether an updated meaning is consistent with the statutory purpose. The purpose is to ensure that a person is not obliged to remain living in a home where she, her children or other members of her household are at risk of harm. A further purpose is that the victim of domestic violence has a real choice between remaining in her home and seeking protection from the criminal or civil law and leaving to begin a new life elsewhere. [27] The purpose of the legislation would be achieved if the term domestic violence were interpreted in the same sense in which it is used by the President of the Family Division, in his Practice Direction (Residence and Contact Orders: Domestic Violence) (No 2) [2009] 1 WLR 251, para 2, suitably adapted to the forward looking context of sections 177(1) and 198(2) of the Housing Act 1996: Domestic violence includes physical violence, threatening or intimidating behaviour and any other form of abuse which, directly or indirectly, may give rise to the risk of harm. [28] Lord Rodger could see no reason why Parliament would have intended the position to be any different where someone will be subjected to deliberate conduct, or threats of deliberate conduct, that may cause her psychological, as opposed to physical, harm. To conclude otherwise would be to play down the serious nature of psychological harm. [46] Lord Brown indicated his very real doubts that Parliament intended domestic violence to extend beyond the limits of physical violence but did not feel sufficiently strongly as to the proper outcome of the appeal to carry these doubts to the point of dissent. [48], [60].

This case is concerned with the right of a trader (in this case, Zipvit) to deduct input VAT due or paid by it on supplies of services to it by a supplier (in this case, Royal Mail), so far as those supplies are used for the traders own supplies of goods or services to an ultimate consumer. The issue arises in a specific set of circumstances. The general terms and conditions governing the supply contract between the supplier and the trader provided that the trader should pay the commercial price for the supply plus such amount of VAT (if any) as was chargeable in respect of the supply. As determined by a subsequent judgment of the Court of Justice, the supply should in fact have been treated as standard rated for VAT, so that the trader should have been charged VAT assessed at the relevant percentage of the commercial price for the supply. However, at the time of the supply both the supplier and the trader, acting in good faith and on the basis of a common mistake, understood that the supply was exempt from VAT, so the trader was only charged and only paid a sum equal to the commercial price for the supply. The invoices relating to the supplies in question denoted the supplies as exempt and hence indicated that no VAT was due in respect of them. The tax authorities (Her Majestys Revenue and Customs Commissioners, HMRC) made the same mistake in good faith. HMRC had inadvertently contributed to the mistake by the parties, by issuing tax guidance containing statements to the same effect. The effect of the mistake has been that the trader has only paid the amounts equivalent to the commercial price for each supply and there is now no prospect that it can be made to pay, or will pay, the additional amount equivalent to the VAT element of the total price (ie the commercial price plus the VAT due in respect of it) which ought to have been charged and paid in respect of such supplies. Likewise, the supplier has not accounted to HMRC for any VAT due or paid in respect of such supplies, and there is no prospect that it can now be made to account, or will account, to HMRC for such VAT. Notwithstanding this, the trader now maintains that under article 168(a) of the Principal VAT Directive (2006/112/EC the Directive) it is entitled as against HMRC to make a claim to deduct as input VAT the VAT due in respect of the supplies in question or a VAT element deemed by law to be included in the price charged by the supplier for each supply (and hence deemed by law to be VAT in fact paid in respect of such supply when the trader paid what the parties believed to be the commercial price of the supply). Against this, HMRC contend that in the circumstances of this case, on the proper interpretation of the Directive: (1) there is no VAT due or paid in respect of the supplies in question, so no claim can be made to recover input tax in relation to them, and/or (2) the invoices relating to the supplies in question did not show that VAT was due in respect of the supplies, and since the trader at no stage held invoices which showed that VAT was due and its amount, in compliance with article 226(9) and (10) of the Directive, for this reason also the trader is not entitled to recover input tax in relation to the supplies. The trader responds on point (1) that VAT must be treated as having been paid as part of the price (or as due) and on point (2) that all relevant facts are now known and it can prove by other means the amount of the VAT due or paid on each supply. The sums claimed by Zipvit as input VAT on the relevant supplies amount to 415,746 plus interest. The present proceedings are a test case in respect of supplies of services by Royal Mail where the same mistake was made. The court has been provided with estimates of between about 500m and 1 billion as the total value of the claims against HMRC. The factual background Royal Mail is the public postal service in the United Kingdom. Article 132(1)(a) of the Directive (and equivalent provisions which preceded it) provides that member states shall exempt the supply by the public postal services of services other than passenger transport and telecommunications services, and the supply of goods incidental thereto. In implementing this provision, Parliament and HMRC interpreted it as covering all postal services supplied by Royal Mail. The implementing national legislation, the Value Added Tax Act 1994 (VATA), contained a provision to this effect (Schedule 9, Group 3, paragraph 1) and HMRC issued guidance notes to the same effect. Zipvit carries on the business of supplying vitamins and minerals by mail order and used the services of Royal Mail. During the period 1 January 2006 to 31 March 2010, Royal Mail supplied Zipvit with a number of business postal services under contracts which had been individually negotiated with Zipvit. The present proceedings concern supplies of one such service, Royal Mails multimedia service (the services). The contract under which Royal Mail supplied the services incorporated Royal Mails relevant general terms of business which provided that all postage charges specified as payable by the customer (ie Zipvit) were exclusive of VAT, that the customer shall pay any VAT due on Postage and other charges at the appropriate rate, and that VAT shall be calculated and paid on [the commercial price of the services]. Accordingly, insofar as VAT was due in respect of the supply of the services, the total price payable by Zipvit for such supply under the contract was the commercial price plus the VAT element. However, on the basis of the domestic legislation and guidance and the common mistaken view that the services were exempt from VAT, the invoices issued by Royal Mail to Zipvit in relation to the services were marked E for exempt, showed no sum attributable to VAT to be due, and charged Zipvit only the commercial price of the services. Zipvit duly paid to Royal Mail the sums set out in the invoices. Zipvit did not at the time of the supplies make any claim to recover input VAT in respect of them. Since Royal Mail understood the services to be exempt, and since it had set out no charge for VAT in its invoices, it did not account to HMRC for any sum relating to VAT in respect of the supply of the services. HMRC likewise believed the services to be exempt and did not expect or require Royal Mail to account to them for any such sum. Things proceeded in this way for several years, until the judgment of the Court of Justice of 23 April 2009 in R (TNT Post UK Ltd) v Revenue and Customs Comrs (Case C 357/07) EU:C:2009:248; [2009] ECR I 3025. The Court of Justice held that the postal services exemption applied only to supplies made by the public postal services acting as such, and did not apply to supplies of services for which the terms had been individually negotiated. On the basis of this interpretation of the Directive and its predecessor by the Court of Justice, in the relevant period the services in the present proceedings should have been treated as standard rated. Royal Mail should have charged Zipvit a total price for the supply of the services equal to the commercial price plus VAT at the relevant rate, and Royal Mail should have accounted to HMRC for that VAT element. As it was, however, Zipvit was not charged and did not pay that VAT element, and Royal Mail did not account to HMRC for any sum representing VAT in respect of the services. In the light of the TNT Post judgment, Zipvit made two claims against HMRC for deduction of input VAT in respect of the services by a procedure called voluntary disclosure: (i) on 15 September 2009 in the amount of 382,599 plus In the meantime, HMRC was making inquiries with Royal Mail to establish interest, in respect of input tax paid from the quarter ended 31 March 2006 (due after 1 April 2006) to the quarter ended 30 June 2009, and (ii) on 8 April 2010 in the amount of 33,147, relating to the periods to December 2009 and to March 2010. These claims were calculated on the basis that the prices actually paid for the supplies must be treated as having included a VAT element. precisely which of its services were affected by the TNT Post judgment. HMRC rejected Zipvits claims by letter dated 12 May 2010. This was on the basis that Zipvit had been contractually obliged to pay VAT in relation to the commercial price for the services, but it had not been charged VAT in the relevant invoices and had not paid that VAT element. After review, HMRC upheld that decision by letter dated 2 July 2010. At this time, the national limitation period of six years under section 5 of the Limitation Act 1980 for a contract claim by Royal Mail to claim the balance of the total price due to it in respect of the supply of the services (ie a sum equal to the amount of the VAT due in respect of such supply, calculated by reference to the commercial price of the services) had not expired. But issuing claims against all Royal Mails relevant customers affected by the TNT Post judgment, including Zipvit, would have been costly and administratively burdensome for Royal Mail and it had no commercial interest in doing this, and so did not pursue such claims. At this time, HMRC were within the time limits set out in section 73(6) and section 77(1) of VATA to issue assessments against Royal Mail for VAT in respect of at least some of the supplies of the services. However, HMRC considered that they should not issue such assessments because national law in the form of VATA had provided at the relevant time that the supply of the services was exempt and, moreover, Royal Mail had not in fact received from Zipvit the VAT due in respect of the supplies. Furthermore, HMRC considered that they had created an enforceable legitimate expectation on the part of Royal Mail that it was not required to collect and account for VAT in respect of the services, so that Royal Mail would have a good defence to any attempt to issue assessments against it to account for VAT in respect of the services. Zipvit appealed against HMRCs review decision to the First tier Tribunal (Tax Chamber). The hearing of the appeal took place on 14 and 15 May 2014. By this time, the limitation period for a contract claim by Royal Mail against Zipvit for the payment of the balance of the total price due for the supply of the services had expired in relation to the greater part of the supplies which had been made. HMRC were also largely if not entirely out of time to issue an assessment against Royal Mail, as noted in para 140 of the First tier Tribunals judgment. The First tier Tribunal held that the services were standard rated as a matter of EU law, as the judgment in TNT Post indicated, and that the postal service exemption in national law could and should be interpreted in the same way, so that the services were properly to be regarded as standard rated as a matter of national law. This is now common ground. The First tier Tribunal dismissed Zipvits appeal, in a judgment dated 3 July 2014. It held that HMRC had no enforceable tax claim against Royal Mail because Royal Mail had not in its VAT returns declared any VAT in respect of its supply of the services, had made no voluntary disclosure of underpaid VAT, had not issued any invoice showing the VAT as due, and HMRC had not assessed Royal Mail as liable to pay any VAT: para 137. In those circumstances there was no VAT due or paid by Royal Mail in respect of the supply of the services, for the purposes of article 168(a) of the Directive: paras 138 146. The question whether HMRC would have been prevented by principles of public law, including the principle of legitimate expectation, from issuing an assessment against Royal Mail was left to one side, as unnecessary for determination: paras 147 148. In any event, since Zipvit did not hold valid tax invoices in respect of the supply of the services, showing a charge to VAT, it had no right to claim deduction of such VAT as input tax: paras 149 153. Although HMRC have a discretion under national law to accept alternative evidence of payment of VAT in place of a tax invoice (under regulation 29(2) of the Value Added Tax Regulations 1995 (SI 1995/2518) regulation 29(2)), which they had omitted to consider in their decisions, the First tier Tribunal found that on due consideration whether to accept alternative evidence, HMRC would inevitably and rightly have decided in the exercise of their discretion not to accept Zipvits claim for a deduction of input VAT in respect of the services: paras 192 198. The important point in that regard was that repayment of notional input VAT to Zipvit in respect of the services would constitute an unmerited windfall for Zipvit: paras 189 and 195 198. Zipvit had in fact paid only the commercial price for the services, exclusive of any element of VAT, so repayment to it of a notional element of VAT in respect of the supply of those services would mean that in economic terms it would have received the services for considerably less than their true commercial value, and there was no good reason why HMRC should in their discretion dedicate large sums of public money to achieve such an unmeritorious benefit for Zipvit. Zipvit appealed. The Upper Tribunal (Tax Chamber) dismissed the appeal. Its reasoning on the due or paid issue (article 168(a) of the Directive) differed from that of the First tier Tribunal which was later disapproved by the Court of Appeal and is not now supported by HMRC. It is now common ground that due or paid means due or paid by the trader to the supplier. The Upper Tribunal upheld the First tier Tribunals decision on the invoice issue and on the question of the exercise of discretion under regulation 29(2). Zipvit appealed to the Court of Appeal. It was only in the Court of Appeal that the underlying factual position regarding the obligations of Zipvit under its contract with Royal Mail was finally fully investigated and the findings of fact in that respect set out above were made. These are now common ground. The Court of Appeal dismissed Zipvits appeal. After an extensive review of the case law of the Court of Justice in relation to the due or paid point as it arose in the light of the factual position regarding Zipvits contractual obligations, the Court of Appeal found that the position was not acte clair: [2018] 1 WLR 5729, para 86. However, the Court of Appeal reached the same conclusion as the Tribunals below on the invoice issue: paras 91 119. After reviewing the case law of the Court of Justice, the Court of Appeal held that it was a necessary precondition for Zipvit to be able to exercise any right of deduction of input VAT in respect of the services that it should be able to produce VAT invoices which showed that VAT had been charged in respect of the supplies of the services, in compliance with article 226(9) and (10) of the Directive, or supplementary evidence showing payment of the relevant tax by Royal Mail to HMRC, which Zipvit could not do: paras 113 115. The Court of Appeal agreed with the Tribunals below on the question of the exercise of discretion by HMRC under regulation 29(2): paras 116 117. If HMRC treated Zipvit as having paid input VAT in respect of the services, Zipvit would receive an unmerited windfall (uncovenanted bonus), by obtaining in effect a reduction in the commercial price it had had to pay for the services, paid for out of public funds, even though that VAT had not been paid into the public purse: para 116. The Court of Appeal considered the position regarding the invoice issue to be acte clair, so that no reference was required to the Court of Justice: para 119. The appeal to the Supreme Court Zipvit has now appealed to this court. Zipvit contends that it should succeed on both the due or paid issue and the invoice issue, including so far as necessary on the question of the exercise of discretion by HMRC under regulation 29(2). After full argument, the court has decided that neither the due or paid issue nor the invoice issue can be regarded as acte clair, and that a reference should be made to the Court of Justice to ask the questions set out at the end of this judgment. In brief outline, the parties submissions on the appeal are as follows. (1) The due or paid issue Article 168(a) of the Directive provides that a trader who is a taxable person has an entitlement to deduct from VAT which he is liable to pay the VAT due or paid in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person. Zipvit contends that in the circumstances of this case, on each occasion when (although contractually liable for VAT in addition) it only paid the commercial price charged to it in Royal Mails invoice it (Zipvit) must be treated as having paid an element of VAT to be regarded as embedded in the sum paid. The sum charged by Royal Mail and paid by Zipvit should be treated as a total price comprising a (lesser) taxable amount and the VAT at standard rate on that taxable amount. Thus, if Royal Mail charged Zipvit 120 in an invoice for the services, that being the commercial price for the services, and Zipvit only paid that amount, then even though the invoice purported to say that the services were exempt from VAT, the taxable amount (within the meaning of articles 73 and 78 of the Directive) should (after the elapse of six months under article 90 and section 26A of VATA) be treated as having been only 100 and the additional 20 (assuming a 20% rate of VAT) should be treated as VAT, which Zipvit is now entitled to claim as input VAT relating to supplies made by it to its customers. This embedded VAT element of each payment constitutes VAT which has been paid, in the requisite sense, and thus falls within article 168(a). In support of this submission, Zipvit relies in particular on articles 73, 78 and 90 of the Directive (reflected in national law in sections 19(2) and 26A of VATA) and the judgment in Tulic v Agenia Naional de Administrare Fiscal (Joined Cases C 249/12 and C 250/12) EU:C:2013:722; [2013] BVC 547. Alternatively, even if the embedded element of VAT on which Zipvit relies is not to be regarded as having been paid for the purposes of article 168(a), VAT should be regarded as being due for the purposes of that provision, so that Zipvit is entitled to claim to deduct it as input VAT on that basis. To the extent that HMRC say that they cannot compel Royal Mail to account to them for VAT in respect of its supply of the services to Zipvit, that is HMRCs own fault (either because of their actions in creating any legitimate expectation or other defence on which Royal Mail could rely against enforcement action taken by HMRC it not being admitted that there is any such defence or by reason of allowing time to elapse so that they are now out of time to take enforcement action), and is not in any event a matter which can prevent Zipvit from relying on its entitlement under article 168(a) to deduct input VAT due or paid. Against these submissions, HMRC contend that in the circumstances of this case there is nothing in the Directive which requires or justifies the retrospective re writing of the commercial arrangements between Royal Mail and Zipvit, according to which the invoices from Royal Mail referred only to the commercial price to be paid by Zipvit for the services and Zipvit remained contractually obliged to pay Royal Mail an additional sum in respect of VAT at the standard rate in respect of that commercial price (as became clear only after the TNT Post judgment). As events transpired, Royal Mail did not issue further invoices to demand payment of that VAT; it could not be compelled to issue such further invoices (and is now out of time to do so, under the national law of limitation in relation to contract claims); it has not accounted to HMRC for any VAT in respect of the services (whether embedded VAT on a lower notional commercial price as referred to by Zipvit or VAT chargeable on the true commercial price); and HMRC could not take action to compel Royal Mail to account for any VAT in respect of the supply of the services (either for reasons of public law, including respect for the legitimate expectations of Royal Mail, or by reason of limitation). HMRC say that to allow Zipvit to claim an element of VAT notionally embedded in the payments it made to Royal Mail would be to re write history in an entirely theoretical manner divorced from reality, which is not required by any provision of the Directive. As the Tribunals and the Court of Appeal rightly found, it would mean that Zipvit gained an unmerited financial windfall at the expense of the taxpayer (and which would give it an advantage against its commercial competitors), which cannot be justified under the Directive. It would also produce a result which would violate the principle of neutrality which is fundamental to the Directive, in that the input VAT which Zipvit claims to deduct has never been paid into the public purse and Royal Mail would not have acted as collecting agent for the tax authorities in the manner required to give effect to that principle (relying in that regard, in particular, on the judgments in Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1997] QB 499, para 22, and in Minister Finansw v MDDP (Case C 319/12) [2014] STC 699, paras 41 43). HMRC submit that the present case is to be distinguished from the circumstances under consideration in Tulic. At para 37 of the judgment in that case, the Court of Justice expressly said that it was not dealing with the type of contractual arrangement which has been found to exist in this case. In a case where the contract between the supplier (Royal Mail) and the trader (Zipvit) obliges the trader to pay the commercial price for the services supplied plus a supplement covering the VAT due in respect of that commercial price, the case law indicates that on the proper interpretation of article 168(a) of the Directive VAT can only be regarded as having been paid when the VAT due in respect of the commercial price is actually paid, which it has not been here. The case law also indicates that VAT can only be regarded as being due when there is an enforceable claim to collect it from Zipvit and to ensure that it is passed on to the tax authorities, which there is not here. HMRC rely, in particular, on Vleclair SA v Ministre du budget, des comptes publics et de la rforme de lEtat (Case C 414/10) [2012] STC 1281; Volkswagen AG v Financn riaditelstvo Slovenskej republiky (Case C 533/16) EU:C:2017:823; [2018] BVC 15; and Biosafe Indstria de Reciclagens SA v Flexipiso Pavimentos SA (Case C 8/17) EU:C:2017:927; [2018] BVC 17. HMRC say that the case law does not suggest that the conduct of the tax authority is a relevant consideration in the application of the Directive in a case of this kind. Usually, in the absence of a declaration by the supplier or the presentation of tax invoices which comply with article 226(9) and (10), the tax authority will not know what supplies have been made and whether it is in a position to issue a tax assessment against the supplier. Further and in any event, there is nothing in the conduct of HMRC which could justify disregarding the principles of EU law referred to in this jurisprudence. As in the Volkswagen and Biosafe Indstria cases, the situation under review has arisen as a result of a simple mistake made in good faith by all of Zipvit, Royal Mail and HMRC. HMRC also rely on the principle that asymmetrical reliance on the Directive is not permitted, whereby a trader both takes advantage of an exemption in national law (which is not in fact authorised by the Directive) in relation to supplies and seeks to deduct input VAT in relation to those supplies. In that regard, HMRC refer in particular to the MDDP case. They contend that in substance Zipvit is seeking both to take advantage of the fact that national law mistakenly treated the supply of the services in this case as exempt and to rely on the Directive in support of its claim to deduct input VAT in relation to such supply, in breach of that principle. Zipvit denies this. (2) The invoice issue Zipvit submits that the case law of the Court of Justice indicates that there is an important difference between the substantive requirements to be satisfied for a claim for input tax (including those in article 168(a)) and the formal requirements which apply in relation to such a claim (including those in relation to the production of a VAT invoice in accordance with article 226). The approach is strict in relation to the substantive requirements, but departure from the formal requirements is permissible if alternative satisfactory evidence of the VAT which was paid or is due can be produced by the trader. Zipvit relies in particular on the judgments in Barlis 06 Investimentos Imobilirios e Tursticos SA v Autoridade Tributria e Aduaneira (Case C 516/14) [2016] BVC 43, SC Paper Consult SRL v Direcia Regional a Finanelor Publice Cluj Napoca (Case C 101/16) EU:C:2017:775; [2017] BVC 52 and Vdan v Agenia Naional de Administrare Fiscal (Case C 664/16) EU:C:2018:933. In this case, Zipvit contends that it has produced alternative satisfactory evidence of the VAT which was paid (in the form of the payment of embedded VAT which Zipvit contends was included in the price paid by it to Royal Mail) or which was due, since with the benefit of the judgment in the TNT Post case this can readily be worked out from the invoices which Royal Mail in fact sent to Zipvit together with an understanding of the contractual arrangements for the provision of the services to which the invoices related. HMRC could not, in the exercise of their discretion under regulation 29(2), refuse to accept the alternative evidence produced by Zipvit in support of its claim. Zipvit contends that the judgments in the Volkswagen and Biosafe Indstria cases do not have the significance for the invoice issue which HMRC say they have. According to Zipvit, the better explanation of the reasoning in those cases is that they were concerned to ensure that a trader should not be prevented from being able to give practical effect to its right to claim deduction of input VAT in circumstances where it had been misled by receipt of an invoice which purported to show that no VAT was due in respect of a supply. Against this, HMRC submit that the regime in the Directive for collection of VAT in accordance with the principle of neutrality requires particular importance to be attached to the requirements in article 226(9) and (10) regarding production of an invoice which shows that VAT is due in respect of a supply and in what amount. Under the VAT regime, several parties need to know these matters in order for the regime to function effectively; and the tax authorities need to be presented with invoices which deal properly with these requirements so that they can monitor the position and ensure that the supplier has properly accounted to them for the VAT charged. Therefore, according to HMRC, a valid claim for deduction of input tax cannot be made in the absence of a VAT invoice which satisfies these particular requirements. HMRC support the reasoning of the Court of Appeal. They also rely, in particular, on the Advocate Generals opinions and the judgments in the Volkswagen and Biosafe Indstria cases, which they contend support their submission that a valid claim for deduction of input VAT in respect of the supply of the services would have to be supported by a VAT invoice from Royal Mail which complied with article 226(9) and (10) of the Directive. Zipvit had never asked Royal Mail to send invoices charging it with the VAT due in respect of the commercial price charged for the supply of the services and evidently had no intention of asking for such invoices or of paying the charge for VAT which they would contain. Since Zipvit could not produce relevant VAT invoices in support of its claim to deduct input VAT in respect of the services, that claim must fail. There is nothing in EU law which can be relied on to impugn the conclusion of the Tribunals and the Court of Appeal regarding the exercise of HMRCs discretion under regulation 29(2). Copies of the provisions of national law referred to above are annexed to this reference. The reference to the Court of Justice In these circumstances, the court refers the following questions to the Court (1) Where (i) a tax authority, the supplier and the trader who is a taxable person misinterpret European VAT legislation and treat a supply, which is taxable at the standard rate, as exempt from VAT, (ii) the contract between the supplier and the trader stated that the price for the supply was exclusive of VAT and provided that if VAT were due the trader should bear the cost of it, (iii) the supplier never claims and can no longer claim the additional VAT due from the trader, and (iv) the tax authority cannot or can no longer (through the operation of limitation) claim from the supplier the VAT which should have been paid, is the effect of the Directive that the price actually paid is the combination of a net chargeable amount plus VAT thereon so that the trader can claim to deduct input tax under article 168(a) of the Directive as VAT which was in fact paid in respect of that supply? (2) Alternatively, in those circumstances can the trader claim to deduct input tax under article 168(a) of the Directive as VAT which was due in respect of that supply? (3) Where a tax authority, the supplier and the trader who is a taxable person misinterpret European VAT legislation and treat a supply, which is taxable at the standard rate, as exempt from VAT, with the result that the trader is unable to produce to the tax authority a VAT invoice which complies with article 226(9) and (10) of the Directive in respect of the supply made to it, is the trader entitled to claim to deduct input tax under article 168(a) of the Directive? (4) In answering questions (1) to (3): (a) is it relevant to investigate whether the supplier would have a defence, whether based on legitimate expectation or otherwise, arising under national law or EU law, to any attempt by the tax authority to issue an assessment requiring it to account for a sum representing VAT in respect of the supply? (b) is it relevant that the trader knew at the same time as the tax authority and the supplier that the supply was not in fact exempt, or had the same means of knowledge as them, and could have offered to pay the VAT which was due in respect of the supply (as calculated by reference to the commercial price of the supply) so that it could be passed on to the tax authority, but omitted to do so? of Justice:

The case concerns whether Zipvit, a trader selling vitamins and minerals by mail order, is entitled when accounting for VAT on its sales to make deductions of input VAT (the tax paid by the trader on goods and services purchased in connection with its business, as opposed to output VAT, which is the tax charged to the consumer by the trader on its goods or services) in respect of the price of postal services supplied to it by Royal Mail. Under Royal Mails terms and conditions, Zipvit was required to pay the commercial price for the supply plus such amount of VAT (if any) as was chargeable. At the time of supply, both Royal Mail and Zipvit understood that the supply was exempt from VAT, so Zipvit was only charged and only paid a sum equal to the commercial price for the supply. Royal Mails invoices treated the supplies as exempt. However, the Court of Justice of the European Union (the CJEU) subsequently held that such a supply of individually negotiated mail services should in fact have been treated as standard rated for VAT. If that had been appreciated at the time of the supplies, Royal Mail would have charged Zipvit VAT and would have accounted for this to HM Revenue and Customs (HMRC). The present proceedings are a test case in respect of supplies of services by Royal Mail where the same mistake was made. Zipvit now claims that under article 168(a) of the Principal VAT Directive (2006/112/EC) (the Directive) it is entitled to deduct as input VAT the VAT due in respect of these supplies or a VAT element deemed by law to be included in the price paid to Royal Mail for each supply. HMRC contend that on the proper interpretation of the Directive: (a) there was no VAT due or paid for the purposes of the Directive; and/or (b) since Zipvit at no point held invoices which showed that VAT was due and its amount, in compliance with article 226(9) and (10) of the Directive, Zipvit is not entitled to recover input tax. Zipvit made claims to HMRC for the deduction of input VAT, which were rejected by HMRC. Zipvit appealed against HMRCs decision to the First tier Tribunal (Tax Chamber), which dismissed the appeal. Zipvit appealed to the Upper Tribunal (Tax Chamber), which dismissed the appeal. The Court of Appeal dismissed Zipvits appeal from the Upper Tribunal. Zipvit now appeals to the Supreme Court. The Supreme Court unanimously decides that the legal position under the Directive is not clear. It is common ground that at this stage in the process of the UKs withdrawal from the EU, in a case involving an issue of EU law which is unclear, the Supreme Court is obliged to refer that issue to the CJEU to obtain its advice on the point. Therefore, the Supreme Court makes an order for a reference and sets out the questions for the CJEU. Lord Briggs and Lord Sales give the judgment, with which all other members of the Court agree. Zipvit appealed on two issues: first, the due or paid issue, and second, the invoice issue. The Court has decided that neither issue can be regarded as acte clair (so obvious as to leave no scope for any reasonable doubt) and that a reference should be made to the CJEU. The due or paid issue arises out of article 168(a) of the Directive, which provides that a trader who is a taxable person has an entitlement to deduct from VAT which he is liable to pay the VAT due or paidin respect of supplies to him of goods or services, carried out or to be carried out by another taxable person. Zipvit contends that the commercial price it paid Royal Mail for the supplies of postal services must be treated as having contained an element of VAT, even though the invoice purported to say that the services were exempt from VAT. Alternatively, even if this embedded element of VAT is not to be regarded as having been paid, it should be regarded as being due [26] [27]. HMRC contend that there is nothing in the Directive which requires or justifies retrospective re writing of the commercial arrangements between Royal Mail and Zipvit. Royal Mail did not issue further invoices to demand payment of VAT, cannot be compelled to issue such further invoices, and has not accounted to HMRC for any VAT in respect of the services. HMRC could not take action to compel Royal Mail to account for any VAT in respect of the supply of services. As the courts below found, if Zipvit were to succeed it would gain an unmerited financial windfall at the expense of the taxpayer [31] [32]. On the invoice issue, Zipvit submits that CJEU case law indicates that there is an important difference between the substantive requirements to be satisfied for a claim for input tax and the formal requirements that apply in relation to such a claim. The approach is strict for the substantive requirements, but departure from the formal requirements is permissible if alternative satisfactory evidence of the VAT which was paid or is due can be produced. Zipvit contends that it has produced alternative satisfactory evidence of the VAT paid, in the form of payment of the embedded VAT [36] [38]. Against this, HMRC submit that the regime in the Directive requires particular importance to be attached to the requirement of the production of an invoice showing that VAT is due and in what amount. A valid claim for the deduction of input tax cannot be made in the absence of a compliant VAT invoice [39] [40]. The Supreme Court refers four questions to the CJEU. The first asks whether, in circumstances like those of Zipvit, the effect of the Directive is that the price actually paid by the trader is to be regarded as the combination of a net chargeable amount plus VAT thereon, thus allowing the trader to claim to deduct input tax under article 168(a) of the Directive in the amount of VAT which was in fact so paid by it in respect of that supply [42(1)]. The second asks whether, in those same circumstances, the trader can claim to deduct input tax under article 168(a) as VAT which was due in respect of that supply [42(2)]. The third asks whether, where a tax authority, the supplier, and the trader misinterpret European VAT legislation and treat a taxable supply as exempt, resulting in a non compliant VAT invoice which stated that no VAT was due, the trader is entitled to claim to deduct input tax under article 168(a) [42(3)]. Finally, in answering the prior three questions, the Court asks whether it is relevant to investigate whether the supplier (Royal Mail) would have a defence to any attempt by the tax authority to issue an assessment requiring it to account for a sum representing VAT in respect of the supply, and whether it is relevant that the trader (Zipvit) knew at the same time as the tax authority and the supplier that the supply was not in fact exempt, and could have offered to pay the VAT due, but omitted to do so [42(4)].

In July 2012, a new Appendix FM was inserted into the Immigration Rules, dealing with the entry requirements for non-EEA family members to join their relatives here. Section EC-P dealt with entry clearance and leave to remain as the partner of a British citizen in the United Kingdom, or a person settled in the United Kingdom, or a refugee or person with humanitarian protection in the United Kingdom. By partner is meant a spouse or fianc(e), a civil partner or proposed civil partner or a person living in a relationship akin to marriage or civil partnership for at least two years. Section E-ECP dealt with the financial requirements. These were more precise and stringent than anything which had gone before (and are here referred to as the Minimum Income Requirement or MIR). Put shortly, they required that the sponsoring partner have a gross annual income of at least 18,600, with an additional 3,800 for the first dependent non-EEA national child and 2,400 for each additional such child. Only the sponsors earnings are to be taken into account: the prospective earnings of an entering partner, and any support from third parties, are ignored. Alternatively, the couple are required to have substantial savings, 16,000 plus two and a half times the shortfall in the sponsors earnings. Estimates differ as to the proportion of the adult population who can meet these requirements but it is clear that a substantial number cannot do so, especially if they have children. Median full-time gross earnings in the UK in 2012 were 26,500 but for men they were 28,700 and for women 23,100. There were also substantial regional differences, with people in London and the south-east earning above the national median and people in Northern Ireland, Wales, and the north east earning considerably below (Office for National Statistics, Statistical Bulletin: Annual Survey of Hours and Earnings: 2012 Provisional Results, November 2012); the 2015 Provisional Results were published in November 2016. 301 out of the 422 occupations listed had average annual earnings below 18,600. Among those earning below that figure were many providing essential public services. Four of the cases before us, MM, AF, AM and SJ (for convenience we shall refer to all the parties by initials), are claims for judicial review of the MIR launched around the time that Appendix FM was first introduced. The MIR is challenged on the ground that it is incompatible with the rights of the claimants and their partners (and a child living with one of them) under articles 8, 12 and/or 14 of the European Convention on Human Rights and also that it is unreasonable and ultra vires on common law principles. The claimants enjoyed a measure of success before Blake J in the Administrative Court: [2013] EWHC 1900 (Admin); [2014] 1 WLR 2306. The Court of Appeal allowed the Home Secretarys appeal: [2014] EWCA Civ 985; [2015] 1 WLR 1073. The fifth case, SS, is an appeal against the refusal of entry clearance because of failure to meet the MIR. The appeal succeeded on article 8 grounds in both the First-tier Tribunal and the Upper Tribunal. The Court of Appeal heard the Entry Clearance Officers appeal, along with five other selected test cases, and the appeal was allowed: [2015] EWCA Civ 387; [2016] 1 All ER 706. The Supreme Court directed that all five appeals be heard together. The MIR and the background to its introduction Before the introduction of the MIR, the Immigration Rules required broadly that the parties would be able to maintain and accommodate themselves and any dependants adequately in the UK without recourse to public funds, which included social housing and most welfare benefits but not the NHS, education and social care. This is still the criterion which applies if the applicants partner is in receipt of disability living allowance or similar disability-related benefits (see Appendix FM, para E-LTRP 3.3). In KA and others (Pakistan) [2006] UKAIT 00065; [2007] AR 155, the Upper Tribunal adopted income support as the test of adequate maintenance - at that level it could not be said that the family were not properly maintained but neither should it be contemplated that immigrants would live below that level. This reasoning was approved by the Court of Appeal in AM (Ethiopia) v Entry Clearance Officer [2008] EWCA Civ 1082, [2009] Imm AR 254, para 78. This amounted to around 5,500 a year after deduction of tax and housing costs. Problems were encountered with that approach. The assessment did not depend upon a set income threshold but on a consideration of current and prospective employment income of both parties, the extent of any other financial means, including the support of third parties, and their housing costs. Entry clearance officers and case workers found that it was difficult to apply the test consistently and for applicants and sponsors to assess whether they would meet it. It was complex to administer, particularly in respect of any benefits which the sponsor might claim, as it was difficult to know whether these were the result of admitting the partner. It did not prevent burdens on the system arising over the longer term once the partner had qualified for settlement and thus for full access to welfare benefits. Hence the Home Office set about devising an alternative policy. A consultation paper proposing a new minimum income threshold for sponsors wishing to bring a non-EEA national spouse or partner or dependants into the UK, set at a higher level than the safety net of income support, was published in July 2011. At the same time the Government asked the Migration Advisory Committee to consider what the minimum threshold should be in order to ensure that the sponsor could support a partner and any dependants independently without their becoming a burden on the state. The Committees Report, Review of the minimum income requirement for sponsorship under the family migration route, was published in November 2011. The Committee based its calculations on the gross income received by the sponsor in the United Kingdom, without deducting housing costs, which it believed were open to manipulation and difficult to verify (paras 4.24-4.26). It acknowledged, however, that there was a strong case in principle for including the future earnings of the sponsored migrant as it is the total household income which determines whether they will be a burden on the state (para 4.20). It then developed three options: benchmarking to levels of pay, such as the national minimum wage, the living wage, the 25th percentile of UK wage distribution and so on; or benchmarking to the benefits system, that is to the level of income beyond which the family would not be entitled to income-related benefits, including tax credits; or benchmarking to the net fiscal contribution, the point at which more is paid in tax than is consumed in public services, such as health and education, as well as welfare benefits. The pay approach was rejected because, although simple to calculate and understand, it did not relate directly to the question asked, nor was there any clear economic basis for selecting one threshold over another (para 5.2, 5.3). Under both the benefits and the net fiscal approaches, the lowest possible threshold was 13,400 a year and the highest was 40,000. Under the benefits approach, the committees preferred threshold was 18,600 a year, the point at which the family would not be entitled to any income-related benefits, including tax credits and housing benefit, assuming a two adult household (because the additional adult increases benefit entitlement) and housing costs of 119 per week (para 5.5). Under the net fiscal approach, the preferred threshold was 25,700 a year, assuming a one adult household (because only one adults income is taken into account) (para 5.6). The Committee therefore recommended that the income threshold be set between 18,600 and 25,700 gross annual income (para 5.7). The Committee also considered two methods of adjusting the income threshold to account for dependent children, the first of which reflected income-related benefits that the family would derive from their dependent children. Based on what was known about recent sponsors of spouse or partner applicants, it was estimated that 45% of them would not be able to meet the 18,600 threshold and 64% would not be able to meet the 25,700 threshold (para 5.18). The Committee emphasised that its recommendation was based solely on economic considerations and not on the wider legal, social or moral issues (para 5.7). The Governments conclusions were announced in the Home Offices Statement of Intent: Family Migration (June, 2012). The Government had decided to adopt the gross annual income threshold of 18,600 for a British citizen or settled person to sponsor a non-EEA fianc(e), proposed civil partner, spouse, civil partner, or unmarried partner, with an additional 3,800 for the first dependent child and 2,400 for each further child. These would apply at every application stage - for entry clearance or leave to remain, for further leave to remain (after 30 months) and for indefinite leave to remain (after five years) (para 74). The same rules would apply to refugees and people granted humanitarian protection who wished to sponsor a post-flight partner and dependent child or children, because they should not be in a better position than people settled here (para 131). But sponsors in receipt of specified disability-related benefits or carers allowance would continue to be covered by the old rules (para 75). Caseworkers were to have no discretion or flexibility in respect of the threshold (para 83c). Specified non-employment income, pensions and savings of both parties would be taken into account (para 82), but the previous, current or prospective employment and earnings of migrant partners would not be taken into account at the entry clearance stage (para 83e), although their earnings would be taken into account where or once they were here with permission to work (para 83f). Sponsors or partners must have been earning at the required level for six months in the same employment or for 12 months if they had changed employment (para 83h). Sponsors returning from abroad would have to show that they had earned at the required level while abroad and had a firm, verifiable job offer or signed contract of employment to start work here within three months of their return at the required level (para 83j). Cash savings of both partners of more than 16,000 could be taken into account to make up the shortfall in income multiplied by 2.5 for the probationary period and simply to make up the shortfall at the indefinite leave to remain stage; thus if there was no income, they would need savings of 62,000 in cash at the entry clearance and leave to remain stages, but 34,600 at the indefinite leave to remain stage (para 83l). These savings might have come as a gift from a third party but they must be real resources for the couple to use as they see fit, not a loan or an undertaking to subsidise or support if needed. Promises of support from third parties would not be accepted (para 83m). The detailed requirements and the evidence which would be required were set out in Appendix B. The Statement of Intent also announced that the new rules on family migration would reflect fully the factors which can weigh for and against an article 8 claim. They will set proportionate requirements that reflect, as a matter of public policy, the Governments and Parliaments view of how individual rights to respect for private or family life should be qualified in the public interest to safeguard the economic well-being of the UK (para 7) This was fleshed out by a Home Office statement which accompanied the new Immigration Rules on Family and Private Life (HC 194), Grounds of Compatibility with article 8 of the European Convention on Human Rights. This explained that, while the Rules were amended in 2000 to require all Home Office staff to carry out their duties in compliance with the provisions of the Human Rights Act, there had been no substantive change to the family life part of the Rules to reflect any consideration of proportionality under article 8 or to align them with developing case law (para 12). Staff and courts had had to make their own decisions on an individual basis, which had led to unpredictability and inconsistency which are anathema to good administration (para 11). Hence the purpose of the new rules was said to be - to fill the policy vacuum by setting out the Secretary of States position on proportionality and to meet the democratic deficit by seeking Parliaments agreement to her policy. (para 19) The Rules themselves would state how the balance should be struck between the public interest and individual rights, taking into account the relevant case law. If the Rules were proportionate, decisions taken in accordance with them, would, other than in exceptional cases, be compatible with article 8 (para 20). The role of the courts should shift from reviewing the proportionality of individual administrative decisions to reviewing the proportionality of the Rules themselves: The starting-point of such a review will be that Parliament has decided how the balance should be struck. Although Parliaments view is subject to review, it should be accorded the deference due to a democratic legislature. If proportionality has already been demonstrated at a general level, it need not, and should not, be re-determined in every individual case. (para 22) impact assessment and an equality impact assessment. In addition to these documents, the Government also published a general The aims of the MIR, as consistently stated both in the Statement of Intent and in the Grounds of Compatibility were that those who choose to establish their family life in the UK should have the financial wherewithal to be able to support themselves and their partner without being a burden on the taxpayer. Moreover, the sponsor should bear the financial responsibility of ensuring that the migrant is well enough supported to be able to integrate and play a full part in British society (Grounds of Compatibility, para 52). This policy has a legitimate aim of safeguarding the economic well-being of the UK and it is considered that there is enough flexibility in the policy to prevent the policy from being a disproportionate interference with article 8 rights (para 55). The evidence of Mr Clive Peckover, for the Secretary of State, is that the MIR forms part of an overall programme of reform intended to reduce net migration and restore public confidence in the immigration system (Witness Statement 2, para 8). But this was not its primary objective: there is no cap on the number of spouses, partners and would-be partners who can be admitted, provided that the couple can meet the MIR. Nevertheless, it was anticipated that it would lead to a fall in the numbers admitted by this route, which would bring substantial savings in welfare benefits, and to the NHS, education and other public services. 40,500 spouse or partner visas were issued in 2010 and it was estimated that a MIR of 18,600 would, taken with the other proposed reforms, reduce family route visas by approximately 16,100 per year and net migration by 9,000. The new Rules and Guidance The MIR in the new Rules laid before Parliament reflected those policy choices. In June 2012, the Home Secretary laid before Parliament HC 194, which introduced a new Appendix FM to the Immigration Rules dealing with applications from family members. Unusually, the new Rules were unanimously approved by a positive resolution of the House of Commons. When the Rules were tabled in the House of Lords, a motion of regret was withdrawn and there was no negative resolution. The new Rules came into force on 9 July 2012. They were further amended by CM 8423 which inserted a new Appendix FM-SE dealing with the procedural and evidential requirements and came into force on 20 July 2012. Appendix FM as updated in 2016 begins by stating (para GEN.1.1): It sets out the requirements to be met and, in considering applications under this route, it reflects how, under article 8 of the Human Rights Convention, the balance will be struck between the right to respect for private and family life and the legitimate aims of protecting national security, public safety and the economic wellbeing of the UK; the prevention of disorder and crime; the protection of health or morals; and the protection of the rights and freedoms of others (and in doing so also reflects the public interest considerations as set out in Part 5A of the Nationality, Immigration and Asylum Act 2002). It also takes into account the need to safeguard and promote the welfare of children in the UK, in line with the Secretary of States duty under section 55 of the Borders, Citizenship and Immigration Act 2009. (italicised words added by Statement of Changes in Immigration Rules (2012) (Cm 8423)) Nevertheless, the Appendix contemplates that the Rules will not cover all the situations in which a person may have a valid claim to enter or remain in the UK as a result of his or her article 8 rights. Paragraphs GEN.1.10 and GEN.1.11 both provide for what is to happen if an applicant does not meet the requirements of the Appendix but the decision-maker grants entry clearance or leave to enter or remain outside the rules on article 8 grounds. The Rules governing the pre-entry language requirement, which was the subject of this Courts decision in R (Bibi) v Secretary of State for the Home Department [2015] UKSC 68; [2015] 1 WLR 5055, grant an express exemption where there are exceptional circumstances which prevent the applicant from being able to meet the requirement prior to entry to the UK (paras E-ECP 4.2(c) and E- LTRP 4.2(c)). There is no equivalent exemption, or reference to exceptional circumstances, in the Rules governing the MIR at the entry clearance stage. Given the obligation to respect Convention rights, therefore, there can be no question of the rules relating to the MIR being a complete code. However, there is an exception EX.1 to the MIR and language requirements for applicants for limited or indefinite leave to remain (not leave to enter) as a partner if (a) the applicant has a genuine and subsisting parental relationship with a child under 18 in the UK who is a British citizen or has lived here continuously for seven years and it would not be reasonable to expect the child to leave the UK; or (b) the applicant has a genuine and subsisting relationship with a partner in the UK who is a British citizen, settled in the UK or in the UK with refugee leave or humanitarian protection, and there are insurmountable obstacles to family life with that partner continuing outside the UK. Insurmountable obstacles is said to mean very significant difficulties faced by either which could not be overcome or would entail very serious hardship to either. The source of the exceptional circumstances requirement where the MIR is not met is the Immigration Directorate Instruction: Family Migration: Appendix FM Section 1.0a: Family Life (as a Partner or Parent): 5-year Routes and Appendix FM Section 1.0b: Family Life (as a Partner or Parent) 10-Year Routes. (We have been supplied with the versions published in August 2015. ) Section 14 of the former requires Entry Clearance Officers, where an application does not meet the requirements in the Rules, to consider whether there may be exceptional circumstances which make refusal a breach of article 8 rights, or whether there are compelling compassionate reasons which might justify a grant of entry clearance, because refusal would result in unjustifiably harsh consequences for the applicant or their family. However, Entry Clearance Officers are not allowed to grant entry clearance outside the Rules, so an officer who thinks that the case might meet this very high threshold must refer the case to the Referred Casework Unit (RCU) in London. The Instructions go on to state that the Rules themselves reflect the position of the Secretary of State on proportionality and reflect how the balance should be struck between individual rights and the public interest. Only in exceptional circumstances will a decision taken in accordance with the Rules lead to a disproportionate outcome. This is likely to occur only rarely. Section 14.1 of the 2015 Instructions gives an almost identical explanation of exceptional circumstances to that given in the December 2012 Instructions current at the time of the decision of Blake J: Exceptional does not mean unusual or unique. Whilst all cases are to some extent unique, those unique factors do not and generally render them exceptional. For example, a case is not exceptional just because the criteria set out in the Immigration Rules have been missed by a small margin. Instead exceptional means circumstances in which refusal would result in unjustifiably harsh consequences for the individual or their family such that refusal of the application would not be proportionate under article 8. The fact that refusal may, for example, result in the continued separation of family members does not of itself constitute exceptional circumstances where the family have chosen to separate themselves. Cases that raise exceptional circumstances to warrant a grant of entry outside the Rules are likely to be rare. Decision-makers are also told that the consideration of exceptional circumstances must include consideration of any factors relevant to the best interests of a child in the UK; but that requiring the Rules to be met is likely to lead to a disproportionately detrimental effect on the best interests of the child in the UK only rarely. The key issue is whether there are any factors involving the child in the UK that can only be alleviated by the presence of the applicant in the UK. Consideration needs to be given to the effective and material contribution that the applicants presence in the UK would make to safeguarding and promoting the welfare of the child. This contribution needs to be of a significant kind, eg: Support during a major medical procedure, particularly if this is unforeseen or likely to lead to a permanent change in the childs life. Prevention of abandonment where there is no other family member in the UK to care for a child. Simply reducing the time and resource spent on a childs case by agencies such as childrens services is unlikely to be sufficient. The applicants presence in the UK must form part of achieving a durable solution for the child that is in his or her best interests. The Guidance goes on to state that: Other means of meeting the childs best interests need to have been considered and ruled out. The normal need for a child to be given genuine and effective care by both parents is reflected in the Immigration Rules and there must be substantive reasons why the childs best interests in this regard can only be met by granting entry clearance outside the Rules. So the fact that parents have chosen to travel at different times, or maintained separate life-styles in two countries, will not amount to a degree of separation that amounts to exceptional circumstances. On the other hand the impact of natural disaster on the overseas parents housing or employment making it impossible for the child to return to live with him or her may count. From 2012 to 2014, only 52 cases were referred to the RCU for consideration of leave outside the Rules, of which 26 succeeded. In the same period, some 30,000 applications were refused. The guidance quoted above applies to applications from outside the country for entry clearance. Instruction Appendix FM section 1.0b gives guidance on in- country applications for leave to remain outside the Rules. There are differences between the two, but the initial assumption that the Rules cover the ground, so that refusals will only be disproportionate in exceptional circumstances likely to be rare, and the definition of exceptional circumstances, are the same. The cases before the court The cases before us are samples of some of the situations in which the MIR may cause problems for partners who wish to live together in this country. In only one of them (SS) have there been findings of fact in legal proceedings. The others (MM, AF, AM, and SJ) have been dealt with on the basis of assumed facts. MM, AF, AM, SJ: the facts and decisions below MM is a 37-year old national of Lebanon. He entered the UK in 2001 and has been granted limited leave to remain in the UK as a refugee until June 2017. He lives with his sister, EM, who has discretionary leave to remain (for the background see EM (Lebanon) v Secretary of State for the Home Department [2008] UKHL 64; [2009] 1 AC 1198). She has a son, AF, who was aged 16 when these proceedings began and looks to MM as a father figure. In 2010 MM became engaged to a Lebanese woman whom he met in Syria. They spent five months together in Cyprus between September 2012 and January 2013. They were married by proxy in Lebanon in 2013. He is reading for a PhD at the University of Wolverhampton and working with three different agencies as a quality inspector. He earns approximately 15,600 gross per annum. His wife has a BSc in nutrition and is employed in Lebanon as a pharmacist. She speaks fluent English and inquiries indicate that she would be likely to find skilled employment here. MMs brother has covenanted to provide them with 80 per week for five years. Alternatively his father has promised to remit an equal amount from Lebanon. AF has been included as an interested party to MMs claim because of the adverse impact upon him of MMs difficulties in achieving family unity in this country. This, he contends, is not only in breach of his Convention rights but also of the Secretary of States duty, in section 55 of the Borders, Citizenship and Immigration Act 2009 (the 2009 Act), to have regard to the need to safeguard and promote the welfare of children when making decisions which affect them. AM is a British citizen of Pakistani heritage and has lived here since 1972. In 1991 he married a Pakistani woman who lives in Kashmir although the marriage was not formally registered until 2006. They have five children who are British citizens, four of whom have lived in this country since 2001 and the youngest of whom lives with his mother in Kashmir. AM has been out of work since 2006 and is dependent on benefits. His wife was refused leave to enter under the old Rules because of this. He believes that his employment prospects would be improved if his wife were admitted and could look after the children. He also argues that he has relatives who could support them until they become self-sufficient. He complains about the application of the MIR to the parents of children settled here, who are seeking to enter or remain as spouses or partners. (He also complained about the contrast between the Rules governing parents seeking to enter or remain as spouses or partners and those governing parents seeking to enter or remain as lone parents or separated parents having contact with their children, but the Court of Appeal refused him permission to appeal on this ground.) SJ is a British citizen who was born here and is also of Pakistani heritage. She lives with her family in Birmingham, has no qualifications and an intermittent employment history with no prospect of employment at the required level of earnings. In 2012 she married a Pakistani man who lives and works as a civil servant in Pakistan. In 2013 she sponsored his application to come to this country, but following the Court of Appeal decision in 2014 the application was refused on the ground that the MIR and accommodation requirement were not met and there were no exceptional circumstances leading to the grant of entry clearance outside the Rules. She contends that the MIR is not only a violation of her Convention rights under articles 8 and 12 but also that it is indirectly discriminatory against women, and in particular British Asian women, who suffer from significantly lower rates of pay and employment than others. Blake J declined to strike down the Rules introducing the MIR, because they were capable of leading to an article 8 compatible result. Claims of individual violations should be examined in the context of an application where the relevant facts could be established and factors weighed (para 120). These included the best interests of any children involved (para 119). He also rejected the discrimination challenge on the ground that it would be impracticable and inappropriate to introduce different rules for, for example, women sponsors or sponsors living in lower paid regions (para 114). Nevertheless he found that, when applied to the partners of British citizens or of recognised refugees, the combination of more than one of five features of the Rules was so onerous in effect as to be an unjustified and disproportionate interference with a genuine spousal relationship (para 123). Those five features were: setting the income level at above 13,400, the lowest threshold identified by the MAC and close to the national minimum wage, then 13,600; requiring savings of 16,000 before they could be used to make up a shortfall; using a 30-month period for forward income projection as opposed to a 12-month period; disregarding credible and reliable undertakings of third party support; and disregarding the spouses own earning capacity during the 30-months after entry (para 124). While the MIR was rationally connected to a legitimate aim, these features went further than necessary to promote it (para 144). But he declined to seek to encapsulate the nuances of this judgment in a formal declaration (para 154). The Court of Appeal rejected the applicants argument that the MIR was not rationally connected to its legitimate aims: it was enough that the Secretary of State had a rational belief that the policy would overall achieve the identified aim (para 142). The Court went on to hold that, while proportionality had to be judged objectively by the Court, as held by the House of Lords in R (SB) v Governors of Denbigh High School [2006] UKHL 15; [2007] 1 AC 100, appropriate weight had to be given to the judgment of the Secretary of State, particularly where she had acted on the basis of independent research and wide consultation (para 149). She had shown that the interference was both the minimum necessary and struck a fair balance between the interests of the groups concerned and the community in general. It was not the courts job to impose their own view of the minimum income required to accomplish the stated policy aim unless the level chosen was irrational or inherently unjust or inherently unfair, which it was not (para 151). Given this conclusion, it was unnecessary to consider the exceptional circumstances provisions in the Instructions. Both these and the duty to safeguard the welfare of children might be factors in individual cases but were not the basis for a challenge to the Rules themselves (paras 161 and 164). SS: the facts and the decisions below SS is a citizen of the Democratic Republic of Congo (DRC) and resident there. She is married to NT, who is also from the DRC, but was granted refugee status here and later became a naturalised British citizen. They met in 2010 on one of NTs visits to the DRC and married in September 2012. In November 2012 SS applied for entry clearance under Appendix FM. This was refused by the Entry Clearance Officer on the ground that the MIR was not met and the correct documents had not been supplied. She appealed to the First-tier Tribunal. The Tribunal found that the documentation showed that NTs gross annual income for the tax year 2011/2012 was 16,194. New information showed that his earnings were roughly 17,000 per annum. This did not meet the MIR, but the appeal was allowed on article 8 grounds. The couple would not be able to live together in the DRC. NT earned well above the minimum wage (amounting to 13,600 per annum). They would be able to live on his income without placing additional strain on the public purse. SS had suffered a miscarriage after her application had been refused which had left her traumatised and deeply distressed that NT was unable to visit her for fear of losing his employment. She needed to be admitted to the United Kingdom so that she can take solace with her husband and begin to form family life with him here. In reaching this conclusion the Tribunal applied the approach of Blake J in MM (Lebanon) to assessing the proportionality of the interference. The Upper Tribunal dismissed the Entry Clearance Officers appeal. It held that the First-tier Tribunal had been wrong to take into account events since the refusal, but that since there were insurmountable obstacles to family life continuing in the DRC on a permanent basis it followed that there were exceptional circumstances resulting in an unjustifiably harsh situation for the couple. The Court of Appeal allowed the Entry Clearance Officers appeal on the basis that the First- tier Tribunal had been wrong to apply the reasoning of Blake J in MM (Lebanon), had given inadequate weight to the MIR in the article 8 assessment and too much weight to the near-miss aspect, and had failed to identify valid compelling circumstances requiring the grant of leave to enter. However, the First-tier Tribunals findings of fact, including that the couple could not live together in DRC, were not challenged and the case was remitted to the Upper Tribunal. The case law This Court has considered the inter-relationship between the Human Rights Act 1998 and the Immigration Rules affecting people who apply to join spouses, partners and other family members in the United Kingdom on several occasions, beginning with Huang, above, and most recently in Bibi, above, and Agyarko v Secretary of State for the Home Department, decided at the same time as this case. The starting point is, of course, that any state has the right, in international law, to control the entry of foreigners and how long they may remain after entry. Nevertheless, that right has to be exercised consistently with the obligations of the European Convention on Human Rights. In Abdulaziz, Cabales and Balkandali v United Kingdom (1985) 7 EHRR 471, the European Court of Human Rights held that refusing to admit the foreign spouses of British citizens or persons settled here was not a breach of the article 8 right to respect for family life; there was no general obligation to respect a married couples choice of country to live in; and there were no obstacles to establishing family life in their own or their husbands home countries. However, the refusal did engage article 8 rights sufficiently to bring the case within the article 14 requirement that there be no unjustified discrimination in the enjoyment of those rights; in that case, there was unjustified discrimination on grounds of sex. The majority in that case went so far as to say that there was no lack of respect for the couples family life. Since then, however, the Strasbourg case law has moved on, and recognised that such refusals do amount to a lack of respect, as this Court held in R (Aguilar Quila) v Secretary of State for the Home Department (AIRE Centre intervening) [2011] UKSC 45; [2012] 1 AC 621. The Home Secretary clearly accepts this, as she acknowledged in Appendix FM itself that article 8 required a fair balance to be struck between individual rights and the public interest. Nevertheless, the Strasbourg case law has long drawn a distinction between the expulsion of settled migrants with rights of residence in the host country and the refusal to admit, or the removal of, migrants with no such rights. The former involves an interference with the right to respect for family or private life which has therefore to be justified under article 8(2), as being necessary in a democratic society in pursuance of a legitimate aim. The context has typically been the commission of criminal offences by a migrant who has been living lawfully in the host country for a long time, sometimes since birth or early childhood. The Strasbourg case law is discussed in the recent decision of this Court in Hesham Ali v Secretary of State for the Home Department [2016] UKSC 60; [2016] 1 WLR 4799. In summary, the factors to be taken into account were explained in Boultif v Switzerland (2001) 33 EHRR 1179: the nature and seriousness of the offence; the length of the applicants stay in the host country; the time elapsed since the offence and his conduct in the meantime; the nationalities of the people concerned; the applicants family situation, such as the length of the marriage and other factors expressing the effectiveness of a couples family life; whether the spouse knew of the offence when entering the relationship; whether there are any children and their age; and not least the seriousness of the difficulties which the spouse is likely to encounter in the [applicants] country of origin, although the mere fact that a spouse might face certain difficulties cannot in itself exclude an expulsion (para 48). These were approved and expanded by the Grand Chamber in ner v The Netherlands (2007) 45 EHRR 421, which emphasised the best interests and well-being of the children, in particular the seriousness of the difficulties which any children of the applicant are likely to encounter in the country to which the applicant is to be expelled; and the solidity of the social, cultural and family ties with the host country and with the country of destination (para 58). Refusing to admit, or removing, migrants with no settled rights of residence involves the potential breach of a positive obligation to afford respect to private or family life by allowing a person to enter or remain in the host country. Technically, therefore, the question is whether the host country has such an obligation rather than whether it can justify interference. Hence, as the Grand Chamber said in the recent case of Jeunesse v The Netherlands (2015) 60 EHRR 789, the criteria developed in the courts case law for assessing whether a withdrawal of a residence permit of a settled migrant is compatible with article 8 cannot be transposed automatically to the situation of an alien seeking admission, even where, as in that case, the applicant had in fact lived for many years in the host country (para 105). Nevertheless, the court went on to repeat, as had been said in many previous cases dating back at least as far as Gul v Switzerland (1996) 22 EHRR 93, that the principles applicable to the states negative and positive obligations under article 8 were similar: In both contexts regard must be had to the fair balance that has to be struck between the competing interests of the individual and of the community as a whole; and in both contexts the state enjoys a certain margin of appreciation (para 106; note that the margin has consistently been said to be certain rather than wide). There is no general obligation to respect a married couples choice of country in which to reside or to authorise family reunification. It will depend upon the particular circumstances of the persons concerned and the general interest. Factors to be taken into account are the extent to which family life would effectively be ruptured; the extent of the ties in the host country; whether there are insurmountable obstacles (or, as it has sometimes been put in other cases, major impediments: see, for example, Tuquabo-Tekle v The Netherlands [2006] 1 FLR 798, para 48; IAA v United Kingdom (2016) 62 EHRR 233, paras 40 and 48) in the way of the family living in the aliens home country; and whether there are factors of immigration control (such a history of breaches of immigration law) or public order weighing in favour of exclusion (para 107). If family life was created at a time when the people involved knew that the immigration status of one of them was such that persistence of family life in the host state would from the outset be precarious, it is likely only to be in exceptional circumstances that the removal of the non-national family member will constitute a violation of article 8 (para 108; note that this was expressed as a prediction rather than a requirement). All of this had already been said in the similar family reunification case of Rodrigues da Silva v The Netherlands (2007) 44 EHRR 729. However, since then, the Grand Chamber had decided, in Neulinger v Switzerland (2012) 54 EHRR 1087, that the best interests of any child whose family life was involved had to be taken into account in article 8 cases, and in Nunez v Norway (2014) 58 EHRR 511, this had tipped the balance in an immigration case. In Jeunesse, therefore, the Grand Chamber went on to say: Where children are involved, their best interests must be taken into account. On this particular point, the Court reiterates that there is a broad consensus, including in international law, in support of the idea that in all decisions concerning children, their best interests are of paramount importance. Whilst alone they cannot be decisive, such interests certainly must be afforded significant weight. Accordingly, national decision- making bodies should, in principle, advert to and assess evidence in respect of the practicality, feasibility and proportionality of any removal of a non-national parent in order to give effective protection and sufficient weight to the best interests of the children directly affected by it. (para 109) In Jeunesse, the Court found that the circumstances were exceptional and a fair balance had not been struck (para 122). The applicants spouse and children were all Netherlands nationals with the right to enjoy family life together in the Netherlands (para 115). The applicant had been living in the Netherlands for 16 years and had no criminal record. Her presence had been tolerated by the Netherlands authorities (para 116). There were no insurmountable obstacles to the family relocating to her home country, but the family would experience a degree of hardship if forced to do so (para 117). The authorities had not given sufficient weight to the interests of the children; the applicant was their mother and primary carer while the father worked full time to support the family and they were deeply rooted in the Netherlands (paras 118-120). The central issue, according to the Court, was whether a fair balance had been struck between the personal interests of all members of the family in maintaining their family life in the Netherlands and the public interest in controlling immigration (para 121). This was nothing new: the Court has referred to striking a fair balance between those interests in numerous family reunion cases, with varying results depending on the individual circumstances: Gul v Switzerland, above, para 38; Ahmut v The Netherlands (1997) 24 EHRR 62, paras 63, 73; Sen v The Netherlands (2003) 36 EHRR 81, para 31; Tuquabo-Tekle v The Netherlands (para 41 above); Konstantinov v The Netherlands [2007] ECHR 1635/03, paras 46, 53; Rodriguez da Silva v The Netherlands, above; Y v Russia (2010) 51 EHRR 531, paras 39, 44; Nunez v Norway, above, para 68; IAA v United Kingdom (2016) 62 EHRR 233, paras 38, 40, 42, 47. However, while the Strasbourg court has not found it necessary to carry out the article 8(2) proportionality analysis in family reunification cases, this Court has adopted that approach in Huang, above, EB (Kosovo) v Secretary of State for the Home Department [2008] UKHL 41; [2009] AC 1159, Quila, above, Zoumbas v Secretary of State for the Home Department [2013] UKSC 74; [2013] 1 WLR 3690, and in Bibi, above. As this Court has also held in Hesham Ali v Secretary of State for the Home Department, above, para 49, there is no objection to our employing this useful analytic tool. The issue is always whether the authorities have struck a fair balance between the individual and public interests and the factors identified by the Strasbourg court have to be taken into account, among them the significant weight which has to be given to the interests of children. Best interests of children There is a further reason in this country for giving significant weight to the interests of children. This country is party to the United Nations Convention on the Rights of the Child. As is well known, article 3(1) provides that: In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. Originally, the United Kingdom had entered a reservation in respect of immigration matters, but this was lifted in 2008 and section 55(1) and (2) of the 2009 Act requires the Secretary of State to make arrangements for ensuring that her own functions in relation to immigration, asylum and nationality, and those conferred upon immigration officers by the Immigration Acts, are discharged having regard to the need to safeguard and promote the welfare of children who are in the United Kingdom. It is common ground that this duty applies, not only to the making of decisions in individual cases, but also to the function of making the Immigration Rules and giving guidance to officials. Section 55(3) requires persons exercising those functions to have regard to any guidance given by the Secretary of State in relation to this duty. Statutory guidance has been given in Every Child Matters: Change for Children (2009). In paragraph 1.4: Safeguarding and promoting the welfare of children is defined as: preventing impairment of childrens health or development (where health means physical or mental health and development means physical, intellectual, emotional, social or behavioural development); ensuring that children are growing up in circumstances consistent with the provision of safe and effective care; and undertaking that role so as to enable those children to have optimum life chances and to enter adulthood successfully. Additionally, although section 55 only applies to children in the United Kingdom, the guidance states that UK Border Agency staff working overseas must adhere to the spirit of the duty and make inquiries when they have reason to suspect that a child may be in need of protection or safeguarding, or presents welfare needs that require attention (para 2.34). As already seen, Appendix FM itself purports, in para GEN.1.1, to reflect both the article 8 rights of the parties and the Secretary of States duty under section 55. The Explanatory Memorandum laid before Parliament states that the purpose of the new rules was to set requirements which correctly balance the individuals right to respect for private and family life with the public interest in safeguarding the economic well-being of the UK by controlling immigration (para 2.1); further that the assessment of the best interests of the child is intrinsic to the proportionality assessment under article 8, and has therefore also been incorporated into the Immigration Rules (para 7.4). Immigration Rules and policy The legal and policy background of the immigration rules has been discussed in detail by Lord Reed in Hesham Ali and Agyarko. As he explains, the statutory basis for the modern system of immigration control starts from the Immigration Act 1971. Section 1(4) gives authority to the Secretary of State to make rules as to the practice to be followed in the administration of the Act for regulating the entry and stay of persons not having the right of abode. Section 3(2) makes detailed provision for statements of the rules, or changes, to be laid before Parliament. The 1971 Act has been described as a constitutional landmark. It is the modern embodiment of the powers previously exercised under the Royal prerogative, and now entrusted to the Secretary of State, who has constitutional responsibility under Parliament for immigration control and policy. The rules are to be seen as statements by the Secretary of State as to how she proposes to control immigration, the scope of that duty being defined by the statute (see R (Alvi) v Secretary of State for the Home Department [2012] UKSC 33; [2012] 1 WLR 2208 paras 31, 33 per Lord Hope). By the HRA section 6 the Secretary of State is bound to exercise her powers under the Act in a way which is compatible with the European Convention on Human Rights. Although some reliance has been placed upon article 12 - the right to marry and found a family - and on article 14 - enjoyment of the Convention rights without discrimination on status grounds - the principal focus in these cases has been on article 8 - the right to respect for private and family life. Challenging the rules under article 8 In this case (unlike Hesham Ali or Agyarko) we are asked to consider the legality of the rules as such, rather than simply their application to individual cases. In both situations, however, it is legitimate to follow the familiar four-stage test adopted in Quila, above, and in Bibi, above. Immigration rules made for legitimate objectives were held disproportionate and therefore unlawful in R (Baiai) v Secretary of State for the Home Department [2008] UKHL 53; [2009] AC 287; and in effect (although the challenge was to two individual decisions) in Quila, above. The former required a person subject to immigration control to obtain a prior certificate of approval to enter a marriage otherwise than in accordance with the rites of the Church of England. The latter sought to deter forced marriages, by requiring both parties to a marriage to be aged 18 (later 21). The latter was seen as a very strong case. As Lord Wilson observed the number of unforced marriages which [the scheme] obstructs vastly exceeds the number of forced marriages which it deters, an issue which the Secretary of State had failed to address: On any view it is a sledge-hammer but she has not attempted to identify the size of the nut. At all events she fails to establish that the interference with the rights of the claimants under article 8 is justified. (Quila para 58) In the same case (paras 78-79) Lady Hale summarised the reasons for holding both schemes unlawful, noting in particular the blanket character of the prohibition in each case (a factor also emphasised by the Strasbourg court in respect of the first scheme: ODonoghue v United Kingdom (2011) 53 EHRR 1, para 89). In Bibi the court declined to hold unlawful amendments to the rules requiring a foreign spouse or partner of a British citizen or a person settled in this country to pass a test of competence in the English language before coming to live here. The court upheld the rules as a whole as satisfying the requirements of proportionality under article 8, while (with differing degrees of emphasis) expressing concern about the potential operation of the guidance in individual cases. In the leading judgment Lady Hale commented on the difficulties of challenges to the rules as such: It may well be possible to show that the application of the rule in an individual case is incompatible with the Convention rights of a British partner It is much harder to show that the rule itself is inevitably unlawful, whether under the Human Rights Act 1998 or at common law (para 2) As those cases show, rules prepared by the Secretary of State will rarely fail to satisfy the first two tests, which closely resemble conventional Wednesbury principles (see per Laws LJ, SS (Nigeria) v Secretary of State for the Home Department [2013] EWCA Civ 550; [2014] 1 WLR 998, para 39), while the third and fourth tests generally overlap. In practice the main emphasis is likely to be on the fourth test: do the measures strike a fair balance between the rights of the individual and the interests of the community? Nor is it enough that the rule may lead to infringements of that principle in individual cases. As Lord Hodge said (Bibi, para 69, approving the approach of Aikens LJ in the present case: [2015] 1 WLR 1078, paras 133-134): The court would not be entitled to strike down the rule unless satisfied that it was incapable of being operated in a proportionate way and so was inherently unjustified in all or nearly all cases. That observation reflects the fact that, as a general rule, it is the decision in an individual case which may be incompatible with the Convention rights, rather than the relevant general rules or policies. That applies also to the Secretary of States duty under section 6 of the Human Rights Act 1998 not to act in a way which is incompatible with a Convention right. Compliance in an individual case does not necessarily depend on the rules. As Laws LJ has said (Mahad (Ethiopia) v Secretary of State for the Home Department [2008] EWCA Civ 1082; [2009] Imm AR 254, para 39, agreed by Pill and Carnwath LJJ): The immigrants article 8 rights will (must be) protected by the Secretary of State and the court whether or not that is done through the medium of the immigration rules. It follows that the rules are not of themselves required to guarantee compliance with the article. There would no doubt be a breach of that duty if the rules were to be couched in a form which made non-compliance in individual cases practically inevitable. But that is not the position in the present context. Even features which make compliance more difficult, in particular the insistence that Entry Clearance Officers cannot themselves take decisions outside the rules but must refer them to the RCU in London, are not the product of the rules but of the administrative arrangements. As already explained (para 19 above), the general provisions of the rules envisage a two-stage process, the second involving consideration of the human rights issues outside the rules (appendix FM GEN.1.1 and GEN.1.10-11). Unsurprisingly, therefore, Miss Giovannetti for the Secretary of State accepts in her printed case (para 38) that failure to meet the MIR does not in itself lead to an application for entry clearance being refused, since (in her words): The Secretary of State retains a discretion to grant entry clearance outside the rules in appropriate cases, which must be exercised in accordance with section 6 of the Human Rights Act 1998. Consistently with that approach, when dealing with the appeal in SS (Congo) (para 256), she accepts as uncontroversial the appellants submission that the requirements of rules do not absolve decision-makers from carrying out a full merits based fact-sensitive assessment outside the rules. This position is reinforced by the nature of the right of appeal against any adverse decision of the Secretary of State, whether made by reference to the rules or the Convention. As was made clear in Huang (paras 6, 17), the structure of the appeal provisions draws a clear distinction between the two. Thus the grounds on which an appeal may be brought (Nationality, Immigration and Asylum Act 2002 section 84(1)) include: (a) that the decision is not in accordance with immigration rules ... (c) that the decision is unlawful under section 6 of the Human Rights Act 1998 (c 42) as being incompatible with the appellants Convention rights ... Failure to qualify under the rules is not conclusive; rather it is (in Lord Binghams words) - the point at which to begin, not end, consideration of the claim under article 8. The terms of the rules are relevant to that consideration, but they are not determinative. (para 6) Thus, whatever the defects there may be in the initial decision, it is the duty of the tribunal to ensure that the ultimate disposal of the application is consistent with the Convention. This analysis provides a simple answer to the central issue in the case. It removes any substantial basis for challenging the new rules as such under the HRA. (The treatment of children under section 55 of the 2009 Act raises different issues, to which we shall return.) It follows that such a challenge in the present context must stand or fall under common law principles. The question in short is whether, taking account of the fact that those rules are only one part of the decision-making process, they are in themselves based on a misinterpretation of the 1971 Act, inconsistent with its purposes, or otherwise irrational. Under the HRA the main focus of attention shifts to the instructions issued by the Secretary of State to entry clearance officers for dealing with cases outside the rules (described at paras 20ff above). The question then is whether there is anything in those instructions which unlawfully prevents or inhibits them from conducting a full merits-based assessment as required by the HRA. As to how that question should be approached, we now have authoritative, up-to-date guidance in the judgment of the Grand Chamber in Jeunesse (paras 42- 43 above) which conveniently draws together earlier Strasbourg jurisprudence. As we have explained, in agreement with Lord Reed in Hesham Ali, para 42, and Agyarko, para 42, the ultimate issue is whether a fair balance has been struck between individual and public interests, taking account the various factors identified. The changing case for the Secretary of State In fairness to the appellants, and their arguments based on common law illegality, it must be acknowledged that they have been faced with something of a moving target. The position now adopted by counsel for the Secretary of State represents a significant change from statements made at the time the rules were laid before Parliament. The governments thinking at that time was explained most clearly in the Grounds of Compatibility statement, submitted to Parliament at the same time as the new rules. The salient passages have already been described at para 11 above. However, the more prescriptive approach in the new rules was triggered by the governments reaction to the decision of the House of Lords in Huang. Further comment on what was said about that case in the statement is called for, in the light of the way the case is now put. The statement noted that previous Secretaries of State had taken the position that, if the rules were thought to produce disproportionate results in a particular case, the court should itself decide the proportionate outcome on the facts before it, rather than hold that the rule itself was incompatible with article 8. This approach had been adopted by the courts, and confirmed by the House of Lords in Huang, with the result, whatever the intention of the House of Lords, that when assessing compatibility in individual cases the courts cannot have recourse to the Rules themselves but must make their own decisions on an individual basis. This had led to unpredictability and inconsistency which are anathema to good administration. (para 11) Accordingly, under the new, more prescriptive, scheme, the role of the courts would shift from reviewing the proportionality of individual administrative decisions to reviewing the proportionality of the rules. Those passages appear to reflect a distorted account of the legislative scheme and of the reasoning in Huang, which, had it been left uncorrected, would in our view have involved a misdirection in law. In the first place the opinion in Huang was not, as the author of the statement seems to have thought, a decision about the relationship of the Secretary of State with the courts. On the contrary it was a decision about the relationship of the Secretary of State with the specialist appellate system set up by Parliament to hear appeals by disappointed applicants. It was Parliament which had laid down the rules governing that system. In particular, it was Parliament, not the courts, which had required separate consideration by the tribunal of issues under article 8, and had placed no express restriction on the scope of that consideration. The House in Huang was simply giving effect to Parliaments intention. That position remained unchanged until the Immigration Act 2014, which post-dated the decisions in the present appeals. Secondly, it was wrong to interpret the House as indicating that individual decisions should be made entirely on a case-by-case basis, without regard to the Secretary of States policy, or to the need for predictability and consistency. Paragraph 16 of the opinion is quite clear as to the importance of such factors: There will, in almost any case, be certain general considerations to bear in mind: the general administrative desirability of applying known rules if a system of immigration control is to be workable, predictable, consistent and fair as between one applicant and another; the damage to good administration and effective control if a system is perceived by applicants internationally to be unduly porous, unpredictable or perfunctory As was said, the giving of weight to such factors is part of the ordinary judicial task of weighing up the competing considerations and according appropriate weight to the judgment of a person with responsibility for a given subject matter and access to special sources of knowledge and advice. A third misconception is the implication that article 8 considerations could be fitted into a rigid template provided by the rules, so as in effect to exclude consideration by the tribunal of special cases outside the rules. As is now common ground, this would be a negation of the evaluative exercise required in assessing the proportionality of a measure under article 8 of the Convention which excludes any hard-edged or bright-line rule to be applied to the generality of cases (EB (Kosovo) v Secretary of State for the Home Department [2009] AC 1159, para 12, per Lord Bingham). Although Miss Giovannetti made some attempt to defend the statement, we remain unconvinced that its approach could be reconciled with the correct legal analysis, as now accepted by her: that is, that the rules are only the starting point for consideration under the Convention. But for the Governments altered stance, the rules read with the grounds of compatibility statement would have faced a serious challenge on grounds of error of law. However, the change in the Governments stance means that the error is of historical interest rather than current relevance, so long as the rules are capable of being operated in a manner consistent with the Convention. Regardless of what was said in the statement, the rules themselves have always made clear that they left open the possibility of separate consideration under article 8. That said, it remains the Secretary of States position, as we understand it, that a principal objective of the new rules was to achieve Convention-compliant decisions in the generality of cases. Thus, as already explained, the current instructions reflect the view that a decision in accordance with the rules will not involve a breach of article 8 save in exceptional circumstances; which expression is equated with circumstances where a refusal would lead to unjustifiably harsh consequences for the individual or their family. An important issue in the case is whether that is an acceptable approach. But that is an issue as to the legality of the relevant instructions, not of the rules. The need for consistency in decision-making Notwithstanding the criticisms which can be made of some of its reasoning, there is force in the underlying concerns expressed in the Grounds of Compatibility statement. Decision-making on the scale required by the immigration system depends on the judgements made on a daily basis by large numbers of individual entry clearance officers, and on appeal by individual tribunal judges. As the House recognised in Huang, fairness and consistency are important considerations at both levels. Before 2000, the position was reasonably clear. The Immigration Act 1971 established the principles governing immigration control. The principal machinery for achieving consistency was found in rules made by the Secretary of State under section 3(4). They provided the framework both for decisions by entry clearance officers and also for the then appellate authorities. The Secretary of State retained a residual discretion to allow entry outside the rules, but unconstrained by the Convention. The entry into force of the Human Rights Act was not reflected in any change to section 3. The Secretary of States duty under that Act to comply with the Convention was reflected in a direction to officials in the rules (see Agyarko, para 6). At appellate level, the assumption seems to have been that it would be enough to add a new ground of appeal by reference to the Convention. As the statement says, nothing was done to address the problem of achieving consistency in its application at either level. The Secretary of State can give guidance to entry clearance officers and expect it to be followed, but has no such power to influence the decisions of tribunal judges in respect of the Convention. Frustrating though it may be for the Secretary of State, under the present legislation the task of promoting consistency at that level falls to the tribunals themselves. The role of the tribunals It is perhaps understandable that, while recognising the general objective of fairness and consistency, the House in Huang did not in terms address the mechanisms by which it was to be achieved within the appellate system. The immigration appeal system was then in a process of transition. At the time of the relevant appeals the system had provided for an initial appeal to immigration adjudicators, with an onward appeal on points of law to the Immigration Appeal Tribunal. By the time of the House of Lords hearing this arrangement had been supplanted by an appeal to a single-tier Asylum and Immigration Tribunal. Since then there has been more radical change to the tribunal system under the Tribunals Courts and Enforcement Act 2007. In 2010 immigration appeals were brought within the new two-tier system created by the Act, with a specialist Immigration and Asylum chamber at each level. Part of the function envisaged for the Upper Tribunal within that system is the giving of guidance to the First-tier Tribunal on issues of principle (see Jones v First-tier Tribunal [2013] UKSC 19; [2013] 2 AC 48). The Immigration and Asylum Chamber of the Upper Tribunal has well-established practices for selecting test cases to give authoritative guidance on particular issues. We have not heard detailed submissions on this aspect, and it is in any event a matter of practice for the Presidents of the relevant Chambers of the First-tier and Upper Tribunals, rather than this court, as to what if any guidance should be given to tribunal judges. However, the system so described does point the way to a means of promoting consistency in the approach to questions arising under article 8, at both levels of decision-making. The experience built up by tribunals in dealing with individual cases can provide a basis on which the Upper Tribunal may develop a consistent approach to the handling of cases at the first tier. Their guidance in turn should help to inform the evolution of departmental policy. The result is not a confrontation between the executive and the courts or tribunals, but rather a partnership between two agencies each charged by the legislature with a specific role in administering a system which is to be fair both to the public and to individual applicants. Policy and expertise As Lord Reed has shown (Hesham Ali, paras 46f), although the tribunal must make its own judgment, it should attach considerable weight to judgments made by the Secretary of State in the exercise of her constitutional responsibility for immigration policy. He cites Lord Binghams reference in Huang to the need to accord appropriate weight to the judgment of a person with responsibility for a given subject matter and access to special sources of knowledge and advice. As that passage indicates, there are two aspects, logically distinct: first, the constitutional responsibility of the Secretary of State for setting national policy in this area; and secondly the expertise available to her and her department in setting and implementing that policy. Both are relevant in the present case, but the degree of respect which should be accorded to them may be different. The weight to be given to the rules or Departmental guidance will depend on the extent to which matters of policy or implementation have been informed by the special expertise available to the Department. A good illustration in a different factual context is to be found in the Denbigh High School case, above, on which Lord Wilson in Quila (para 46ff) placed particular reliance as explaining the nature of the courts inquiry under the fair balance part of the four-stage test. Lord Bingham (para 30) referred to the value judgment required, in which proportionality was to be judged objectively, by the court It is notable however that the objective inquiry actually undertaken by Lord Bingham in that case (concerning school uniform policy as applied to Muslim girls) involved giving substantial weight to the judgment of the school: It would in my opinion be irresponsible of any court, lacking the experience, background and detailed knowledge of the head teacher, staff and governors, to overrule their judgment on a matter as sensitive as this. The power of decision has been given to them for the compelling reason that they are best placed to exercise it, and I see no reason to disturb their decision. (para 34) By contrast in Quila itself, as Lord Wilson held (para 58), the Secretary of State had failed to show any adequate evidentiary support for the policy choices reflected in the rules under challenge. As Lord Reed explains (Agyarko, para 47), this approach is consistent with the margin of appreciation permitted by the Strasbourg court on an intensely political issue, such as immigration control. However, this important principle should not be taken too far. Not everything in the rules need be treated as high policy or peculiarly within the province of the Secretary of State, nor as necessarily entitled to the same weight. The tribunal is entitled to see a difference in principle between the underlying public interest considerations, as set by the Secretary of State with the approval of Parliament, and the working out of that policy through the detailed machinery of the rules and its application to individual cases. The former naturally include issues such as the seriousness of levels of offending sufficient to require deportation in the public interest (Hesham Ali, para 46). Similar considerations would apply to rules reflecting the Secretary of States assessment of levels of income required to avoid a burden on public resources, informed as it is by the specialist expertise of the Migration Advisory Committee. By contrast rules as to the quality of evidence necessary to satisfy that test in a particular case are, as the committee acknowledged, matters of practicality rather than principle; and as such matters on which the tribunal may more readily draw on its own experience and expertise. Analysis The initial challenges brought by MM, AF, AM and SJ were to the Rules introducing the MIR. Orders were sought quashing the Rules, declaring them incompatible with the Convention rights, and unreasonable and ultra vires at common law. At that stage there were no Instructions giving guidance on how the new Rules were to be applied by entry clearance officers and in-country decision- makers. Instructions were, however, issued in December 2012 and have to be taken into account as part of the overall scheme: on the one hand, they might so mitigate the effects of the Rules as to make them compatible with the Convention rights when they would not otherwise have been so; on the other hand, they might, taken in conjunction with the Rules, serve to create or exacerbate the incompatibility. Against that background we make no apology for not attempting to cover all the points made in the copious submissions on both sides. In this case, more than many, there is a serious danger of missing the wood among the trees. We have already indicated why the central challenge - to the validity of the rules as such under the HRA - must fail. We also agree with Aikens LJ in the Court of Appeal, for reasons also articulated by Blake J (paras 112-130), that no separate issue arises in respect of discrimination under article 14. For completeness we mention here the cross-appeal of Mr Majid. The Court of Appeal refused permission to appeal (for the reasons given at paras 165-172). Although Mr de Mello attempted to persuade us otherwise, that is determinative in this court also. The remaining issues can be considered under three heads: i) The principle of a minimum income requirement; ii) The treatment in the rules and instructions of children; iii) The treatment in the rules and the instructions of alternative sources of funding. (i) Acceptability in principle of the MIR There can be no doubt that the MIR has caused, and will continue to cause, significant hardship to many thousands of couples who have good reasons for wanting to make their lives together in this country, and to their children. There are several types of family, not illustrated in the cases before us, upon whom the MIR will have a particularly harsh effect. These include British citizens who have been living and working abroad, have married or formed stable relationships there, and now wish to return to their home country. Many of these relationships will have been formed before the new Rules were introduced or even publicly proposed. They also include couples who formed their relationships before the changes in the Rules were introduced and who had every expectation that the foreign partner would be allowed to come here. Of particular concern is the impact upon the children of these couples, many or even most of whom will be British citizens themselves. These are illustrated in a Report commissioned by the Office of the Childrens Commissioner for England, Family Friendly: The Impact on Children of the Family Migration Rules: A Review of the Financial Requirements (2015, Middlesex University and the Joint Council for the Welfare of Immigrants). But the fact that a rule causes hardship to many, including some who are in no way to blame for the situation in which they now find themselves, does not mean that it is incompatible with the Convention rights or otherwise unlawful at common law. As far as the Convention rights are concerned, the arguments have concentrated on article 8, the right to respect for private and family life, either alone or in conjunction with article 14, the right to enjoy the Convention rights without discrimination, rather than on article 12, the right to marry and found a family. The MIR does not, as such, prevent a couple marrying. It does, however, present a serious obstacle to their enjoying family life together. Further, unlike the temporary impediment held to be unlawful in Quila, the MIR may constitute a permanent impediment to many couples, because the sponsor will never be able to earn above the threshold and the couple will not be able to amass sufficient savings to make good the shortfall. Female sponsors, who have constituted as many as a third of the total, are disproportionately affected, because of the persisting gender pay gap, as are sponsors from certain ethnic groups whose earnings tend to be lower, and those from parts of the country where wages are depressed. In Quila, however, there was no immigration dimension: although the measure in question was contained in the Immigration Rules, its purpose was not to control immigration, but to deter or prevent forced marriages. In this case, there undoubtedly is an immigration dimension. The MIR is part of an overall strategy aimed at reducing net migration. Its particular aims are no doubt entirely legitimate: to ensure, so far as practicable, that the couple do not have recourse to welfare benefits and have sufficient resources to be able to play a full part in British life. As accepted by the courts below, those aims are sufficient to justify the interference with, or lack of respect for, the article 8 right. In agreement with both Blake J and the Court of Appeal, we would also reject the suggestion that there is no rational connection between those legitimate aims and the particular income threshold chosen. The work of the Migration Advisory Committee is a model of economic rationality. Even though it had to make certain assumptions, it was careful to identify and rationalise these. Making those assumptions, it arrived at an income figure above which the couple would not have any recourse to welfare benefits, including tax credits and housing benefits. That being a legitimate aim, it is also not possible to say that a lesser threshold, and thus a less intrusive measure, should have been adopted. It may, of course, have a disproportionate effect in the particular circumstances of an individual case, but that is not the claim currently before us (save in relation to SS, discussed below). That view of the acceptability in principle of the MIR is reinforced by the treatment of a similar issue by the Strasbourg court in Konstatinov v Netherlands [2007] 2 FCR 194, which also concerned minimum income requirements. The applicant was of Roma origin with a rather mixed background, including several aliases, an expulsion from the Netherlands in 1987 for unspecified reasons, and a string of convictions for robbery and theft in the 1990s. The immediate issue for the court concerned the ministers refusal in November 1998 of her request for a residence permit to enable her to live with her husband (entitled to permanent residence since 1988) and their son (born in 1989). The grounds of refusal, unsurprisingly, included public order grounds, but also her husbands failure to satisfy the minimum income requirements under the rules (para 15). The refusal was upheld by the domestic courts on both grounds (para 21), and by Strasbourg. In its decision given in April 2007, the court noted that the relationship had been developed at a time when her status was precarious (para 49). It also accepted the principle of a minimum income requirement: In principle, the Court does not consider unreasonable a requirement that an alien having achieved a settled status in a Contracting State and who seeks family reunion there must demonstrate that he/she has sufficient independent and lasting income, not being welfare benefits, to provide for the basic costs of subsistence of his or her family members with whom reunion is sought. (para 50) Having regard to her criminal record, the fact that her son would come of age in April 2007, and the lack of any insurmountable obstacles to her own return to Serbia where she had lived until the age of seven (paras 51-52), it could not be said that the Netherlands authorities had failed to strike a fair balance between her interests and its own interest in controlling immigration and public expenditure and in the prevention of disorder and crime (para 53). Miss Giovannetti is entitled to rely on para 50 as confirming that a minimum income requirement, such as in the present case, is in principle acceptable, and a matter properly taken into account in the balancing process. The case is also significant as showing how national policy choices may inform the courts consideration of the case under article 8. Mr Drabble QC for SS (case para 149ff) relies on the case as showing that precariousness was a variable rather than binary consideration, a matter to be taken into account rather than one leading automatically to a requirement of exceptionality. However, that was before Jeunesse brought a greater measure of clarity to that issue. We conclude that the challenge to the acceptability in principle of the MIR must fail. (ii) Treatment of children The only case before us directly concerning a child is that of AF. Blake J was clearly unimpressed by that case on its facts, saying: the proposition that denial of admission of MMs wife interferes unduly with AFs best interests because it leads MM to spend time in Cyprus away from his nephew and de facto child, is a challenging one to substantiate. It is not possible to do so in the context of a generic challenge to legality of the rules as such. (para 115) On the material before us, we would find it difficult to disagree with that assessment of the particular case. It does however provide the opportunity for us to deal with the position of children under the rules as a matter of general principle. We have already explained how the internationally accepted principle requiring primary attention to be given to the best interests of affected children is given clear effect in domestic law and policy. The same principle is restated as part of the considerations relevant to the article 8 assessment in Jeunesse (see para 40 above), requiring national decision-makers to: advert to and assess evidence in respect of the practicality, feasibility and proportionality [of any such removal of a non- national parent] in order to give effective protection and sufficient weight to the best interests of the children directly affected by it. (para 119) In Jeunesse itself the determining factor for the court seems to have been the authoritys failure to give adequate weight to the impact on the children of the removal of their mother, who was the homemaker and primary carer of the children who are deeply rooted in the Netherlands (para 41 above). In the new Appendix FM to the rules, paragraph GEN.1.1 asserts that it takes into account the Secretary of States duties in respect of children. Miss Giovannetti (case para 233) relies on that statement. Apart from some references to specific categories, she prays in aid the proposition that it will be for the entry clearance officer to ensure that appropriate consideration is given to the interests of any relevant children, it being axiomatic that this can only be decided on the facts of a particular case. That is clearly correct. As Blake J said: alongside the rules there are also legal duties towards children, that can be applied on a case-by-case basis when the relevant facts are established. There is a statutory duty on the entry clearance officer to have regard to the best interests and welfare of a child in the UK when considering the admission of someone whose presence or absence impacts on the child. (paras 113-114) However, her reliance on that principle does nothing to support the assertion in GEN.1.1 that those aspects are sufficiently taken into account in the appendix itself. In our view the instructions in their present form (quoted at para 24 above) do not adequately fill the gap left by the rules. Rather than treating the best interests of children as a primary consideration, taking account of the factors summarised in Jeunesse, they lay down a highly prescriptive criterion requiring factors that can only be alleviated by the presence of the applicant in the UK, such as support during a major medical procedure, or prevention of abandonment where there is no other family member . It seems doubtful that even the applicant in Jeunesse itself would have satisfied such a stringent test. Furthermore, although section 55 is in terms directed to children in the UK, the Secretary of State has accepted that the same approach should be applied to the welfare of children elsewhere (see para 46 above). We have no doubt therefore that the guidance is defective in this respect and needs to be amended in line with principles stated by the Strasbourg court. Furthermore, the statement in GEN.1.1 that the duty has already been taken into account in the rules is wrong in law. Nor is the gap filled by GEN.1.10-11 which refer to the separate consideration under article 8, but not section 55. This is not simply a defect of form, nor a gap which can be adequately filled by the instructions. The duty imposed by section 55 of the 2009 Act stands on its own feet as a statutory requirement apart from the HRA or the Convention. It applies to the performance of any of Secretary of States functions including the making of the rules. While the detailed guidance may be given by instructions, it should be clear from the rules themselves that the statutory duty has been properly taken into account. We would grant a declaration that in this respect both the rules and the instructions are unlawful. (iii) Treatment of alternative sources of funding We have described the restrictions in the rules on taking into account prospective earnings of the foreign partner or guarantees of third party support. The most striking example, in the cases before us, is found in that of MM and his wife (paras 28ff above). On the face of it there is a strong case on the merits for admitting her consistently with the general objectives of the new rules. The couple have no realistic prospect of living together in any other country, and, although his earnings on their own are below the MIR, she is a pharmacist with good prospects of finding skilled employment here, and they have apparently credible promises of support from other family members. They are unlikely to be a burden on the state, or unable, due to lack of resources, to integrate. Yet the strict application of the rules will exclude them. As noted above (para 29) they had not applied, it seems, because they saw no point in incurring the substantial cost of an application bound to fail. As already noted, the Migration Advisory Committees report considered the issue of accounting for different sources of income (paras 4.15-4.19), and income of the sponsored migrant (paras 4.20-4.23). Under the former they observed that it might be appropriate to include in the calculation third party support received by the sponsors family, but thought that it could be difficult for UKBA to verify the extent of support and whether it would continue (para 4.18). They had accordingly assumed that such sources should be excluded for reasons of practicality, emphasising that this assumption was made for practical rather than economic reasons, adding: in principle a case can be made for taking other income streams into account, if an operationally feasible way of doing so can be found. (para 4.19) Similarly it saw a strong case in principle for taking account of future income of the sponsored migrant recognising that it is total household income that will determine whether the household is a burden on state, but had excluded it in recognition of the substantial risks and uncertainties attached to such calculations (paras 4.20-4.22). In his second witness statement, Mr Peckover confirms that the Secretary of State did not take up the committees offer to advise on how the threshold could be adjusted to take account of the migrant partners prospective earnings, commenting that no adjustment could remove the precariousness of such an assumption (para 33). He also confirms that she fully explored the scope of including third party support, but decided to allow in two forms: accommodation, reflecting the need or preference to live with family or friends, and gifts of cash savings held for at least six months (para 37). Similar issues were discussed by this court in Mahad v Entry Clearance Officer [2009] UKSC 16; [2010] 1 WLR 48. There the issue was different: it turned, not on whether such sources could properly be excluded from the assessment, but whether, as a matter of construction of the pre-2012 rules (which were in different form), they had been so excluded. However, questions of practicality arose also in that context. The court rejected the argument that a narrow construction should be adopted to reflect the relative precariousness of such sources, and difficulties of verification. In the leading judgment, Lord Brown said: Whilst I readily acknowledge the legitimacy of each of these concerns, their strength seems to me much diminished by a number of considerations. First, whilst I accept that generally speaking unenforceable third party promises are likely to be more precarious and less easily verifiable than a sponsors own legal entitlements, that will not invariably be so. And it would surely be somewhat anomalous if ECOs could accept promises of continuing accommodation and/or employment and yet not promises of continuing payments, however regularly they can be shown to have been made in the past and however wealthy the third party can be seen to be. Are rich and devoted uncles (or, indeed, large supportive immigrant communities such as often assist those seeking entry) really to be ignored in this way? A second consideration, never to be lost sight of, is that it is always for the applicant to satisfy the ECO that any third party support relied upon is indeed assured. If he fails to do so, his application will fail. That this may be difficult was recognised by Collins J himself in the Arman Ali case [2009] INLR 89, 103: I do not doubt that it will be rare for applicants to be able to satisfy an entry clearance officer, the Secretary of State or an adjudicator that long-term maintenance by a third party will be provided so that there will be no recourse to public funds. But whether or not such long- term support will be provided is a question of fact to be determined on the evidence. Of course there may be difficulties of investigation. But that is already so with regard to many different sorts of application and, indeed, is likely to be so with regard to some of the kinds of third party support already conceded to be acceptable. (para 19) Lord Kerr said: The vaunted precariousness of support from a third party source is, in my opinion, no greater than that which might arise in the course of the ordinary vagaries and vicissitudes of life. Promised employment may not materialise or may last for only a short time. Dependence on benefits received by the family member who is settled in the United Kingdom may cease it is entirely conceivable that support from a number of family members and friends of the person seeking to enter will be a more dependable resource and a more effective prevention of dependence on public funds than prospective employment (paras 54-55) It is apparent from the MAC report, and the evidence of Mr Peckover, that the reasons for adopting a stricter approach in the new rules were matters of practicality rather than wider policy, reflecting what the MAC acknowledged to be the relative uncertainty and difficulty of verification of such sources. That did not make it unreasonable or irrational for the Secretary of State to take them into account in formulating the rules. The MAC recognised the strength of the case for taking account of other sources, but it did not in terms advise against the approach ultimately adopted by the Secretary of State. In considering the legality of that approach, for the reasons already discussed (para 59 above) it is necessary to distinguish between two aspects: first, the rationality of this aspect of the rules or instructions under common law principles, and secondly the compatibility with the HRA of similar restrictions as part of consideration outside the rules. As to the first, while the application of these restrictions may seem harsh and even capricious in some cases, the matter was given careful consideration by both the MAC and the Secretary of State. As Aikens LJ said (para 154), the decision was not taken on a whim. In our view, it was not irrational in the common law sense for the Secretary of State to give priority in the rules to simplicity of operation and ease of verification. Operation of the same restrictive approach outside the rules is a different matter, and in our view is much more difficult to justify under the HRA. This is not because less intrusive methods might be devised (as Blake J attempted to do: para 147), but because it is inconsistent with the character of evaluation which article 8 requires. As has been seen, avoiding a financial burden on the state can be relevant to the fair balance required by the article. But that judgment cannot properly be constrained by a rigid restriction in the rules. Certainly, nothing that is said in the instructions to case officers can prevent the tribunal on appeal from looking at the matter more broadly. These are not matters of policy on which special weight has to be accorded to the judgment of the Secretary of State. There is nothing to prevent the tribunal, in the context of the HRA appeal, from judging for itself the reliability of any alternative sources of finance in the light of the evidence before it. In doing so, it will no doubt take account of such considerations as those discussed by Lord Brown and Lord Kerr in Mahad, including the difficulties of proof highlighted in the quotation from Collins J. That being the position before the tribunal, it would make little sense for decision-makers at the earlier stages to be forced to take a narrower approach which they might be unable to defend on appeal. As already explained, we do not see this as an issue going to the legality of the rules as such. What is necessary is that the guidance to officers should make clear that, where the circumstances give rise to a positive article 8 duty in the sense explained in Jeunesse, a broader approach may be required in drawing the fair balance required by the Strasbourg court. They are entitled to take account of the Secretary of States policy objectives, but in judging whether they are met, they are not precluded from taking account of other reliable sources of earnings or finance. It is open to the Secretary of State to indicate criteria by which reliability of such sources may be judged, but not to exclude them altogether. We conclude therefore that, while the rules as such are not open to challenge, there are aspects of the instructions to entry clearance officers which require revision to ensure that the decisions made by them are consistent with their duties under the HRA. In the light of that conclusion, the Secretary of State might wish to consider whether it would be more efficient to revise the rules themselves, to indicate the circumstances in which alternative sources of funding should or might be taken into account, rather than simply to revise the guidance. But that would be a matter for her. SS (Congo) We turn to the only individual appeal before us, the facts of which have been set out above (para 35ff). The crucial finding was that there were insurmountable obstacles to the couple living together in DRC (para 61). Although this may seem a little surprising on the evidence as we have it, the finding was not challenged in the Upper Tribunal, and (as Miss Giovannetti realistically accepts) it cannot be challenged in this court. Certain aspects of the reasoning of First-tier Tribunal were flawed, as the Upper Tribunal found, but they were held not to be material. The Upper Tribunal concluded: Clearly, if there are insurmountable obstacles to the couple carrying on family life in the DRC it follows that there are exceptional circumstances which would mean that refusal of the application results in unjustifiably harsh consequences for the sponsor and the claimant. The only factor weighing against them in the stage two assessment is the claimants inability to meet the income threshold of 18,600 per annum. The sponsor's income was however well above ... the lower appropriate threshold of 13,400 per annum. This was the case at the date of the hearing and it was probably also well above this threshold at the date of decision. Accordingly, although there are some flaws in the judges reasoning, she reached the sustainable conclusion that the interference with family life consequential upon the refusal decision was disproportionate; and that the insistence in this particular case on the claimant meeting the minimum income threshold of 18,600 per annum (albeit a requirement lawfully prescribed by the new rules) had unjustifiably harsh consequences which justified the claimant being accorded exceptional treatment outside the rules. (paras 24-25) The only criticism which might be made of this passage is the reliance on the figure of 13,400 adopted as a guide by Blake J (see para 33 above), but not ultimately upheld by the Court of Appeal. The tribunals reliance on that part of Blake Js judgment was erroneous, though of course entirely proper at the time. However, in considering after this long delay whether the error is such as to require remission to the tribunal, fairness requires that that we should also take account of the more recent guidance of the Strasbourg court in Jeunesse. The issue is not whether there has been a near miss from the figure in the rules, but the weight to be given to any factors weighing against the policy reasons relied on by the Secretary of State to justify an extreme interference with family life. One such factor may be the extent to which the family, while not complying with the MIR, would in practice be a burden on the state. The other Jeunesse factors pointed strongly in favour of the applicants. Taking the factors listed in Jeunesse: family life would effectively be seriously ruptured, because they could spend only short periods of time together; while both spouses originated from the DRC, the sponsor has been here for many years and was naturalised as a citizen here as long ago as 2006; he also has two children who are both British citizens, so his ties to this country are extensive; the First-tier Tribunal has found what are insurmountable obstacles in the way of their living in DRC; there are no factors of immigration control or public order weighing in favour of exclusion. The only factor pointing the other way is the fact that this is a post-flight relationship, formed when there was no guarantee that the applicant would be admitted, although it began in 2010 before the Rules were changed, and the sponsor would easily have met the old adequate maintenance test. The reason for including refugees and those granted humanitarian protection in the MIR on the same terms as others is that their relationships developed post- flight should not be treated more favourably than the relationships of British citizens and others settled here. But neither should such individuals be treated less favourably. If there were insurmountable obstacles to a non-refugee British citizen going to live in his partners home country, and there were nowhere else for them to go, it would be necessary to weigh the precariousness aspect against the extent to which the couple would, in fact, be able to support themselves. Even if the tribunals adoption of the guide figure of 13,400 was misdirected, that should not be determinative. In the unusual circumstances of this case, after long delay due to legal arguments which were of no direct concern to the applicants, it would be unfair to subject them to the uncertainties of a rehearing unless there were substantial grounds for thinking that a different result would be reached. That is far from the case. The considerations listed above provide ample support for the conclusion reached by the First-tier Tribunal, and for the view of the Upper Tribunal that any legal errors were not material. It is no doubt desirable that there should be a consistent approach to issues of this kind at tribunal level, but as we have explained there are means to achieve this within the tribunal system. As was said in Mukarkar v Secretary of State for the Home Department [2006] EWCA Civ 1045, para 40 (per Carnwath LJ): It is of the nature of such judgments that different tribunals, without illegality or irrationality, may reach different conclusions on the same case The mere fact that one tribunal has reached what may seem an unusually generous view of the facts of a particular case does not mean that it has made an error of law Nor does it create any precedent, so as to limit the Secretary of States right to argue for a more restrictive approach on a similar case in the future. However, on the facts of the particular case, the decision of the specialist tribunal should be respected. Conclusion We would allow all the appeals to the limited extent indicated above. In SS(Congo) this has the effect that the decision of the Upper Tribunal will be restored. We would also declare that the rules fail unlawfully to give effect to the duty of the Secretary of State in respect of the welfare of children under section 55 of the 2009 Act. Save to that extent we would dismiss the challenge to the validity of the rules. So far as concerns the instructions, we have indicated those aspects which require revision. However, given the passage of time, including new legislation, it would be wrong for this court to attempt to indicate how those defects should now be corrected. It is preferable to adjourn the question of remedies to allow time for the Secretary of State to consider her position, and to indicate to the appellants and to the court how she proposes to amend the instructions or other guidance to accord with the law as indicated in this judgment. The court will receive written submissions on such proposals, and consider whether a further hearing is necessary.

In July 2012 the Immigration Rules (the Rules) were amended to establish new entry requirements for non EEA applicants to join their spouses or civil partners in the United Kingdom. These included a minimum income requirement (MIR) of at least 18,600 per annum with additional sums for dependent children, to be satisfied by the sponsoring spouse or civil partner. In four appeals the appellants claim that the Rules themselves, and the Immigration Directorate Instruction on family migration giving guidance to entry clearance officers (the Instructions), are incompatible with the rights protected by the European Convention on Human Rights (ECHR), principally the right to family life in article 8, and unlawful under common law principles. One of the appellants is a child, and it is contended that the Rules fail to take account of the Secretary of States duty under section 55 of the Borders, Citizenship and Immigration Act 2009 (the s 55 duty) to have regard to the need to safeguard and promote the welfare of children when making decisions which affect them. The fifth appeal, brought by SS, is against the refusal of entry clearance because of a failure to meet the MIR on the facts of her case. The claims to strike down the Rules partly succeeded in the High Court, but this decision was reversed by the Court of Appeal. SS appealed successfully against the refusal to grant her entry clearance to the First tier Tribunal, which found that she and her husband would not be able to live together in the Democratic Republic of Congo, where she was a citizen, but from which he had been granted asylum in the UK. He could not meet the MIR but the refusal was found to be a breach of article 8. The Entry Clearance Officers appeal failed in the Upper Tribunal but was allowed by the Court of Appeal. The Supreme Court unanimously (i) allows SSs appeal, restoring the decision of the Upper Tribunal in her case, and (ii) allows the other four appeals to a limited extent. The court holds that the MIR is acceptable in principle but that the Rules and the Instructions unlawfully fail to take proper account of the s 55 duty. The Instructions also require amendment to allow consideration of alternative sources of funding when evaluating a claim under article 8. Lady Hale and Lord Carnwath give a joint judgment, with which all the other Justices agree. Challenge to the validity of the Rules under the Human Rights Act 1998 (HRA) The Secretary of State is bound by s 6 HRA to exercise her powers under the Immigration Act 1971 compatibly with the ECHR. In a challenge to the legality of the Rules as such, as well as to their application to individual cases, it is legitimate to follow the four stage proportionality test to decide whether the Secretary of State has struck a fair balance between the individual and public interests, taking into account the relevant factors identified by the European Court of Human Rights (ECtHR) and the significant weight to be given to the interests of children [52, 56]. The general provisions of the Rules envisage a two stage process, the second involving a fact sensitive consideration of any human rights issues outside the Rules. The duty of the tribunal hearing appeals against any adverse decision of the Secretary of State is to ensure that the ultimate disposal of the application is consistent with the ECHR. This means that there is no basis for challenging the new Rules as such under the HRA [58, 60]. The principle of an MIR The fact that the MIR may cause hardship to many does not render it unlawful [81]. It has the legitimate aim of ensuring that the couple do not have recourse to welfare benefits and have sufficient resources to play a full part in British life. The income threshold chosen was rationally connected to this aim [83] and the acceptability in principle of an MIR has been confirmed by the ECtHR [86]. Treatment of children The Rules assert that the Secretary of States s 55 duty has been taken into account but nothing in the relevant section gives direct effect to it [90]. The Instructions in their current form do not adequately fill the gap left by the Rules. They are defective and need to be amended in line with the principles established by the ECtHR. The s 55 duty stands on its own and it should be clear from the Rules themselves that it has been taken into account. In this respect the Supreme Court grants a declaration that the Rules and the Instructions are unlawful [92]. Treatment of alternative sources of funding There are restrictions in the Rules on taking into account the prospective earnings of the foreign spouse or partner or guarantees of third party support when deciding whether the MIR has been met. Although harsh, it is not irrational for the Secretary of State to give priority in the Rules to simplicity of operation and ease of verification [98]. Operation of the same restrictive approach outside the Rules is a different matter and inconsistent with the evaluative exercise required by article 8. A tribunal on an appeal can judge for itself the reliability of any alternative sources of finance and it makes little sense for decision makers at an earlier stage to be forced to take a narrower approach [98]. In this respect aspects of the Instructions require revision to ensure that decisions are taken consistent with the duties under the HRA. It will be a matter for the Secretary of State to decide if it is more efficient to revise the Rules themselves to achieve this [101]. Appeal by SS In the light of the crucial finding by the tribunal that there were insurmountable obstacles to the couple living together in DRC, any errors in the tribunals judgment did not after this long delay require the appeal to be remitted for rehearing. Applying the correct test, the extreme interference with family life would not be found to be justified on the facts of SSs case [106].

The appellant (Autoclenz) provides car cleaning services to motor retailers and auctioneers. It has contracts with British Car Auctions (BCA) for cleaning vehicles at a number of different places. The respondents (the claimants) are 20 individual valeters who at the relevant time provided car cleaning services at BCAs Measham site in Derbyshire. In these proceedings the claimants say that they were workers within the meaning of the National Minimum Wage Regulations 1999 (NMWR) (SI 1999/584) and of the Working Time Regulations 1998 (WTR) (SI 1998/1833) and that, as workers, they were entitled to be paid in accordance with the NMWR and to receive statutory paid leave under the WTR. Their case is that they were paid neither. The question is whether the claimants were workers within regulation 2(1) of the NWMR, which adopted the definition in section 54(3) of the National Minimum Wage Act 1998, and in regulation 2(1) of the WTR. The definition of worker is in materially identical terms in both sets of regulations as follows: . worker means an individual who has entered into or works under (a) a contract of employment; or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. Materially identical definitions of employee and worker appear in various other statutes and regulations concerning employment rights and protection against unlawful discrimination in the employment field. The proceedings to date Proceedings were issued in the Employment Tribunal (ET) by the claimants on 19 November 2007. The question whether the claimants were workers as so defined was determined by the ET as a preliminary issue. In a judgment sent to the parties on 1 March 2008 the ET (Employment Judge Foxwell) held that the claimants were workers within the definition on the basis that they were employed under contracts of employment within limb (a) of the definition and that they were in any event working pursuant to contracts within limb (b). Autoclenz appealed to the Employment Appeal Tribunal (EAT), which heard the appeal on 4 June 2008. The EAT (Judge Peter Clark) held that they were not within (a) but that they were within (b). Both sides appealed to the Court of Appeal. The Court of Appeal (Sedley, Smith and Aikens LJJ) restored the judgment of the ET, holding that the claimants were within both (a) and (b). Autoclenz was granted permission to appeal by this Court. The written contract In each case there was a written contract contained in or evidenced by two documents. I take as an example the position of Paul Huntington. His original contract was dated 18 June 1991, in which he was described as a sub contractor. Clauses 1 to 3 of the contract provided: 1. The Sub contractor shall perform the services which he agrees to carry out for Autoclenz within a reasonable time and in a good and workmanlike manner. 2. The Sub contractor hereby confirms that he is a self employed independent contractor and that his tax affairs are handled by . tax office under Schedule D ref No . 3. The Sub contractor and Autoclenz agree and acknowledge that the Sub contractor is not, and that it is the intention of the parties that the Sub contractor should not become, an employee of Autoclenz. Accordingly, the Sub contractor is responsible for the payment of all income tax and national insurance contributions arising on or in respect of payments made to the Sub contractor by Autoclenz and the Sub contractor agrees that he shall indemnify Autoclenz in respect of any liability to tax and national insurance contributions for which Autoclenz may be held liable on or in respect of such payments. That contract did not contain any clause permitting Mr Huntington to provide a substitute to perform the services he was contracted to perform. Nor did it state that he was not obliged to perform services or that Autoclenz was not obliged to provide work under the agreement. In 2004 the Inland Revenue carried out a review of the arrangements between Autoclenz and the valeters. On 20 May 2004 it said, somewhat enigmatically, that it is felt that the balance of probability leans more towards self employment than PAYE. In 2007 Autoclenz decided to produce two new documents, which formed the contract between it and the claimant in each case. The first document, which was not itself signed by the claimant, included the following: For the purpose of providing car valeting services to its clients garages, Autoclenz wishes to engage the services of car valeters FROM TIME TO TIME on a sub contract basis. We understand that YOU ARE AN EXPERIENCED CAR VALETER and might be prepared to offer your services to Autoclenz. If so would you please complete and return to us the form of agreement set out below, which is intended to confirm that any contractual relationship between Autoclenz and yourself is one of client and independent contractor and not one of employer/employee and to protect Autoclenz against any claim on Autoclenz for Income Tax and/or National Insurance contributions in respect of payments made to yourself. For the avoidance of doubt, as an independent contractor, you are entitled to engage one or more individuals to carry out the valeting on your behalf, provided that such an individual is compliant with Autoclenzs requirements of sub contractors as set out in this agreement Those requirements were, in short, that the individual was capable of providing the services, had been fully trained and held a current full UK driving licence which he would make available to Autoclenz, that he complied with health and safety guidance and that he had permission to work in the UK. The document asked the claimant to note the following. For security reasons the valeter would be obliged to wear protective overalls which would identify him as a contractor of Autoclenz and that such overalls could be purchased from Autoclenz. The valeter would be required to provide cleaning materials for himself and those who worked for him. Given the nature of the work it might be necessary for the valeter and those who worked for him to drive motor vehicles. Accordingly the valeter would be required to hold a current valid driving licence. The document concluded: If you wish to provide services to Autoclenz would you please sign and return to Autoclenz the form agreement attached. YOU WILL NOT BE OBLIGED TO PROVIDE YOUR SERVICES ON ANY PARTICULAR OCCASION NOR, IN ENTERING INTO SUCH AGREEMENT, DOES AUTOCLENZ UNDERTAKE ANY OBLIGATION TO ENGAGE YOUR SERVICES ON ANY PARTICULAR OCCASION. The second document was a contract which Mr Huntington signed on 21 May 2007. A copy of the contract is annexed to this judgment marked A. It can be seen that Mr Huntington was described as a sub contractor throughout. Moreover, by clause 3 it was expressly agreed that it was the intention of the parties that the sub contractor was not and should not become an employee of Autoclenz. Further, by clause 7(a) Mr Huntington promised that he would ensure that those who worked for him in providing services to Autoclenz held a current driving licence as set out in the clause. The ET held that both documents were put in front of Mr Huntington and that he signed the contract set out in Annex A, although he was not provided with a copy. The judge said that he strongly suspected that Mr Huntington signed it without reading it. It is common ground that both documents formed part of the contract between the parties. If the relevant contract was, as a matter of law, solely contained in those two documents, it would be impossible to bring the case within limb (a) of the definition and very difficult to bring it within limb (b). However, the ET made certain further findings of fact, including the following. If the valeters had not signed the revised contracts, they would not have been offered further work. The valeters had no input into the negotiation of the terms, which were imposed by Autoclenz. However, as the ET put it at para 32, the claimants went into their agreements . with their eyes open as Autoclenz has made no secret of the fact that it regards the claimants as self employed. The operation The ET made further findings of fact in respect of the operation carried on by Autoclenz as follows. There was a relatively low turnover of personnel among the valeters. Mr Huntington started with Autoclenz in 1991 and continued right through almost on a full time basis apart from a few weeks in 2002 and 2003 when he tried working for a competitor. New valeters were recruited either by personal recommendation and word of mouth or through advertisements placed in the local press or at a job centre. Examples of such advertisements seen by the ET invited applications for well paid full time work and emphasised that Autoclenz was looking for self employed people. The claimants all knew that they were being offered a role which was described and intended by Autoclenz to be one of self employment. The vehicles were required to be cleaned in accordance with a detailed specification set by BCA. The valeters generally worked in teams of four, with one valeter as team leader. Each team took a batch of six vehicles at a time and the members shared the task between them. The more experienced valeters were able to get through more batches than others. On most days there was enough work to keep a group of 14 valeters busy. In the year before the hearing in the ET there was more work, although the ET also found that because of the fluctuations in the level of work there was occasionally no work to be done but that that was the exception rather than the rule. The payments to the valeters were calculated on a piecework basis. The valeters kept records which were then passed to Autoclenz, first locally and then to head office. The valeters rendered weekly invoices which, although nominally from the valeters, were calculated and prepared by Autoclenz, being generated by Autoclenz at head office based on the information provided by the valeters. The valeters undertook responsibility for payment of tax and national insurance. This was done on a self employed basis. The arrangements for the provision of equipment and materials varied over the years but at the time the ET was considering, Autoclenz provided all the equipment and materials used by the valeters including jet washers, vacuum cleaners, sponges and chemicals. From 2007 Autoclenz introduced a 5 per cent charge for materials, which was contained in a separate invoice. The valeters were supplied with overalls bearing BCAs logo for security reasons. The first two sets of overalls were free of charge but the valeters had to pay for subsequent sets. The critical findings of fact are set out in paragraphs 34 to 40 of the ETs judgment. I will return to these after considering the correct approach in principle to issues of this kind. The legal principles It is common ground that the issues are (1) whether the ET was correct to find that the claimants were at all material times working under contracts of employment and were therefore workers within limb (a) of the definition and (2) whether in any event the ET was correct to find that they were at all material times within limb (b). This involves consideration of whether and in what circumstances the ET may disregard terms which were included in a written agreement between the parties and instead base its decision on a finding that the documents did not reflect what was actually agreed between the parties or the true intentions or expectations of the parties. As Smith LJ explained in the Court of Appeal at para 11, the classic description of a contract of employment (or a contract of service as it used to be called) is found in the judgment of MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, 515C: A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service. Freedom to do a job either by ones own hands or by anothers is inconsistent with a contract of service, though a limited or occasional power of delegation may not be. Three further propositions are not I think contentious: i) As Stephenson LJ put it in Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612, 623, There must be an irreducible minimum of obligation on each side to create a contract of service. ii) If a genuine right of substitution exists, this negates an obligation to perform work personally and is inconsistent with employee status: Express & Echo Publications Ltd v Tanton (Tanton) [1999] ICR 693, per Peter Gibson LJ at p 699G. iii) If a contractual right, as for example a right to substitute, exists, it does not matter that it is not used. It does not follow from the fact that a term is not enforced that such a term is not part of the agreement: see eg Tanton at p 697G. The essential question in each case is what were the terms of the agreement. The position under the ordinary law of contract is clear. It was correctly summarised thus by Aikens LJ in the Court of Appeal: 87. Express contracts (as opposed to those implied from conduct) can be oral, in writing or a mixture of both. Where the terms are put in writing by the parties and it is not alleged that there are any additional oral terms to it, then those written terms will, at least prima facie represent the whole of the parties' agreement. Ordinarily the parties are bound by those terms where a party has signed the contract: see eg L'Estrange v F Graucob Ltd [1934] 2 KB 394. If a party has not signed a contract, then there are the usual issues as to whether he was made sufficiently aware of the clauses for a court to be able to conclude that he agreed to the terms in them. That is not an issue in this case. 88. Once it is established that the written terms of the contract were agreed, it is not possible to imply terms into a contract that are inconsistent with its express terms. The only way it can be argued that a contract contains a term which is inconsistent with one of its express terms is to allege that the written terms do not accurately reflect the true agreement of the parties. 89. Generally, if a party to a contract claims that a written term does not accurately reflect what was agreed between the parties, the allegation is that there was a continuing common intention to agree another term, which intention was outwardly manifested but, because of a mistake (usually a common mistake of the parties, but it can be a unilateral one) the contract inaccurately recorded what was agreed. If such a case is made out, a court may grant rectification of a contract. See, generally, the discussion in the speech of Lord Hoffmann, [48] to [66], in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101 with whom all the other law lords agreed. Nothing in this judgment is intended in any way to alter those principles, which apply to ordinary contracts and, in particular, to commercial contracts. There is, however, a body of case law in the context of employment contracts in which a different approach has been taken. Again, Aikens LJ put it correctly in the remainder of para 89 as follows: But in cases of contracts concerning work and services, where one party alleges that the written contract terms do not accurately reflect the true agreement of the parties, rectification principles are not in point, because it is not generally alleged that there was a mistake in setting out the contract terms as they were. There may be several reasons why the written terms do not accurately reflect what the parties actually agreed. But in each case the question the court has to answer is: what contractual terms did the parties actually agree? In this context there are three particular cases in which the courts have held that the ET should adopt a test that focuses on the reality of the situation where written documentation may not reflect the reality of the relationship: Consistent Group Ltd v Kalwak (Kalwak) [2007] IRLR 560 in the EAT (but cf [2008] EWCA Civ 430, [2008] IRLR 505 in the Court of Appeal), Firthglow Ltd (t/a Protectacoat) v Szilagyi (Szilagyi) [2009] EWCA Civ 98, [2009] ICR 835 and the Court of Appeal decision in the present case. Those cases must be set in their historical context, which includes Snook v London and West Riding Investments Ltd (Snook) [1967] 2 QB 786 and Tanton. Although Snook was not an employment case but arose out of the hire purchase of a car, I refer to it because of the statement of Diplock LJ, which has been often referred to in the employment context. He said this at p 802 with reference to the suggestion that the transaction between the parties was a sham. I apprehend that, if it [ie the concept of sham] has any meaning in law, it means acts done or documents executed by the parties to the sham which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities that for acts or documents to be a sham, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. I would accept the submission made on behalf of the claimants that, although the case is authority for the proposition that if two parties conspire to misrepresent their true contract to a third party, the court is free to disregard the false arrangement, it is not authority for the proposition that this form of misrepresentation is the only circumstance in which the court may disregard a written term which is not part of the true agreement. That can be seen in the context of landlord and tenant from Street v Mountford [1985] AC 809 and Antoniades v Villiers [1990] 1 AC 417, especially per Lord Bridge at p 454, Lord Ackner at p 466, Lord Oliver at p 467 and Lord Jauncey at p 477. See also in the housing context Bankway Properties Ltd v Pensfold Dunsford [2001] 1 WLR 1369 per Arden LJ at paras 42 to 44. Those cases were examples of the courts concluding that relevant contractual provisions were not effective to avoid a particular statutory result. The same approach underlay the reasoning of Elias J in Kalwak in the EAT, where the questions were essentially the same as in the instant case. One of the questions was whether the terms of the written agreement relating to the right to refuse to work or to work for someone else were a sham. Elias J referred to part of the judgment in Snook quoted above at para 53. At para 56 he noted that in Tanton Peter Gibson LJ had recognised (at p 697G) that such terms might be a sham. He also noted that the Court of Appeal had emphasised that the question whether there was an obligation personally to perform the work had to be determined by asking what legal obligations bound the parties rather than by asking how the contract was actually carried out. The employers appeal in Tanton was allowed on the ground that the ET wrongly drew an inference from the way the contract was carried out. At paras 57 59 Elias J said this: 57. The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship. Peter Gibson LJ was alive to the problem. He said this (p 697G) Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham it will want to say so. In other words, if the reality of the situation is that no one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses 58. genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless. 59. Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance There is in my opinion considerable force in the approach set out in those paragraphs. Elias J dismissed the employers appeal from the ET but his decision was reversed by the Court of Appeal, comprising May, Rimer and Wilson LJJ. The differences between the reasoning of Elias J and that of the Court of Appeal were discussed in some detail by the Court of Appeal in the later case of Szilagyi (comprising Sedley, Keene and Smith LJJ) and indeed by the Court of Appeal in this case. In Szilagyi the court was considering similar questions. The principal question was whether written partnership agreements were a sham. The principal judgment was given by Smith LJ. Smith LJ referred to the dicta of Diplock LJ in Snook. She also referred in detail to Kalwak in the EAT and in the Court of Appeal, and to Tanton. She quoted para 58 from Elias Js judgment in Kalwak which I have set out above. At para 48 she noted that in the Court of Appeal Rimer LJ scrutinised Elias Js judgment and was critical of the reasoning by which he had upheld the ETs decision. However, she added that the court allowed the appeal on the ground that the ETs decision was inadequately reasoned and remitted the case for rehearing. She then said that it did not appear to her that the court was critical of Elias Js test and added that it seemed to her that Rimer LJ approved that test as being in compliance with Diplock LJs definition of a sham. For my part, I am not persuaded that that is so. It appears to me that the reasoning of Rimer LJ and that of Elias J are not consistent. In this regard I agree with the view of Judge Clark to that effect in the EAT. See also a valuable article by Alan Bogg in (2010) 126 LQR 166, 167 168. Rimer LJ said at para 28 in Kalwak that a finding that the contract was in part a sham required a finding that both parties intended it to paint a false picture as to the true nature of their respective obligations. He was there applying the approach of Diplock LJ in Snook to this situation. In my opinion that is too narrow an approach to an employment relationship of this kind. In this regard I agree with the views expressed by ACL Davies in an illuminating article entitled Sensible Thinking About Sham Transactions in (2009) 38 ILJ 318, which was a note on Szilagyi published before the decision of the Court of Appeal in the instant case. However, the question for this court is not whether the two approaches are consistent but what is the correct principle. I unhesitatingly prefer the approach of Elias J in Kalwak and of the Court of Appeal in Szilagyi and in this case to that of the Court of Appeal in Kalwak. The question in every case is, as Aikens LJ put it at para 88 quoted above, what was the true agreement between the parties. I do not perceive any distinction between his approach and the approaches of Elias J in Kalwak, of Smith LJ and Sedley LJ in Szilagyi and this case and of Aikens LJ in this case. In para 57 of Kalwak (set out above) Elias J quoted Peter Gibson LJs reference to the importance of looking at the reality of the obligations and in para 58 to the reality of the situation. In this case Smith LJ quoted (at para 51) para 50 of her judgment in Szilagyi: The kernel of all these dicta is that the court or tribunal has to consider whether or not the words of the written contract represent the true intentions or expectations of the parties, not only at the inception of the contract but, if appropriate, as time goes by. She added in paras 52, 53 and 55: 52. I regret that that short paragraph [ie para 51] requires some clarification in that my reference to 'as time goes by' is capable of misunderstanding. What I wished to say was that the court or tribunal must consider whether or not the words of the written contract represent the true intentions or expectations of the parties (and therefore their implied agreement and contractual obligations), not only at the inception of the contract but at any later stage where the evidence shows that the parties have expressly or impliedly varied the agreement between them. In my judgment the true position, consistent with Tanton, Kalwak and Szilagyi, is that where there is a dispute as to the genuineness of a written term in a contract, the focus of the enquiry must be to discover the actual legal obligations of the parties. To carry out that exercise, the tribunal will have to examine all the relevant evidence. That will, of course, include the written term itself, read in the context of the whole agreement. It will also include evidence of how the parties conducted themselves in practice and what their expectations of each other were. Evidence of how the parties conducted themselves in practice may be so persuasive that the tribunal can draw an inference that that practice reflects the true obligations of the parties. But the mere fact that the parties conducted themselves in a particular way does not of itself mean that that conduct accurately reflects the legal rights and 53. 55. obligations. For example, there could well be a legal right to provide a substitute worker and the fact that that right was never exercised in practice does not mean that it was not a genuine right. It remains to consider whether the EJ directed himself correctly when he considered the genuineness of the written terms. I am satisfied that he directed himself correctly in accordance with, although in advance of, Szilagyi. In effect, he directed himself that he must seek to find the true nature of the rights and obligations and that the fact that the rights conferred by the written contract had not in fact been exercised did not mean that they were not genuine rights. Aikens LJ stressed at paras 90 to 92 the importance of identifying what were the actual legal obligations of the parties. He expressly agreed with Smith LJs analysis of the legal position in Szilagyi and in paras 47 to 53 in this case. In addition, he correctly warned against focusing on the true intentions or true expectations of the parties because of the risk of concentrating too much on what were the private intentions of the parties. He added: What the parties privately intended or expected (either before or after the contract was agreed) may be evidence of what, objectively discerned, was actually agreed between the parties: see Lord Hoffmann's speech in the Chartbrook case at [64] to [65]. But ultimately what matters is only what was agreed, either as set out in the written terms or, if it is alleged those terms are not accurate, what is proved to be their actual agreement at the time the contract was concluded. I accept, of course, that the agreement may not be express; it may be implied. But the court or tribunal's task is still to ascertain what was agreed. I agree. At para 103 Sedley LJ said that he was entirely content to adopt the reasoning of Aikens LJ: recognising as it does that while employment is a matter of contract, the factual matrix in which the contract is cast is not ordinarily the same as that of an arms length commercial contract. I agree. commercial dispute is identified by Aikens LJ in para 92 as follows: The critical difference between this type of case and the ordinary 92. I respectfully agree with the view, emphasised by both Smith and Sedley LJJ, that the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that, frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so. So the relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed and the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part. This may be described as a purposive approach to the problem. If so, I am content with that description. The facts With characteristic clarity and brevity Sedley LJ described the factual position as follows: 104. Employment judges have a good knowledge of the world of work and a sense, derived from experience, of what is real there and what is window dressing. The conclusion that Autoclenz's valeters were employees in all but name was a perfectly tenable one on the evidence which the judge had before him. The elaborate protestations in the contractual documents that the men were self employed were odd in themselves and, when examined, bore no practical relation to the reality of the relationship. 105. The contracts began by spelling out that each worker was required to perform the services which he agrees to carry out for Autoclenz within a reasonable time and in a good and workmanlike manner an obligation entirely consistent with employment. Notwithstanding the repeated interpolation of the word sub contractor and the introduction of terms inconsistent with employment which, as the judge found, were unreal, there was ample evidence on which the judge could find, as he did, that this was in truth an employment relationship. 106. His finding did not seek to recast the contracts: it was a finding on the prior question of what the contracts were. Rightly, it was uninfluenced by the fiscal and other consequences of the relationship, which were by no means all one way. I entirely agree with those conclusions. They are in my opinion justified by the critical findings of fact in paras 35 to 38 of the judgment of Employment Judge Foxwell in the ET. They were these: 35. In my judgment these claimants are employees. I do not think it can be said that Mr Huntington and his colleagues are businessmen in business on their own account. They have no control over the way in which they do their work. They have no real control over the hours that they work, save and except that they can leave when their share of the work on site has been completed. They do not have any real economic interest in the way in which the work is organised, other than the fact that the more work they do the more they earn. They cannot source materials for themselves. They are subject to the direction and control of the respondent's employees on site. They work in teams and not as individuals. It crossed my mind that each team might constitute a partnership, but it has never been suggested that these claimants are partners running businesses together and, whilst the makeup of each team seems to be fairly static, they can be adjusted to meet the respondent's needs. The claimants have no say in the terms upon which they perform work, the contracts which are placed before them are devised entirely by the respondent and the services they provide are subject to a detailed specification. The invoices which they submit are prepared by the respondent. The respondent determines the deductions which are applied to those invoices and the amounts charged in respect of insurance and materials. There has been no evidence to confirm that these deductions bear any real relation to the actual cost of the services to which they refer. Rates of pay are determined by the respondent and the respondent has felt able to increase or reduce those rates 36. 37. unilaterally. Really there is nothing that these claimants can do to make their putative businesses any more profitable by the way in which they organise themselves. I have noted that the claimants are required to wear company overalls and some of these are supplied free. I have also noted that they are provided with some training by the respondent. I do not think that either of these factors is determinative in this case. I accept that training must be provided to people who handle chemicals whatever their status for the purposes of health and safety. Equally I accept that requiring some badge of identification, in this case a uniform, is simply an incident of the fact that valeters are permitted to drive high value goods, motorcars and vans. That said, I accept the claimants' evidence that they are fully integrated into the respondent's business and that they have no real other source of work. I accept that occasionally individual claimants might work elsewhere but only on days when the respondent has no work for them to do. In Mr Huntington's case, for example, this occurred once in 17 years of service. I am satisfied that the claimants are required to provide personal service under their agreements with the respondent notwithstanding the substitution clause that was introduced in 2007. I do not find that this clause reflects what was actually agreed between the parties, which was that the claimants would show up each day to do work and that the respondent would offer work provided that it was there for them to do. Mr Hassell confirmed in evidence that this was the true nature of the agreement between the parties and that his work could not have been done without an understanding that the valeters could be relied on to turn up and do the work put in front of them. I have of course noted that in 2007 the respondent introduced a clause saying that there was no obligation on it to offer work or on the claimants to accept work. I find that this clause was wholly inconsistent with the practice described in paragraph 18 of Mr Hassell's witness statement where he refers to a requirement for valeters to notify him in advance if they were unavailable for work. This indicates that there was an obligation to attend for work unless a prior arrangement had been made. In my judgment these factors place these new clauses within the proposition identified at paragraph 58 in the judgment [of Elias J] in Consistent Group Ltd v Kalwak (supra) and I find that the substitution clause and the right to refuse work were unrealistic possibilities that were not truly in the contemplation of the parties when they entered into their agreements. Accordingly, I find that the claimants entered into contracts under which they provided personal service, where there were mutual obligations, namely the provision of work in return for money, that these obligations placed the contracts within the employment field and that the degree of control exercised by the respondent in the way that those contracts were performed placed them in the category of contracts of employment. Mr Hassell was the Autoclenz manager at the Measham site. 38. These are findings of fact which Autoclenz cannot sensibly challenge in this Court. In short, they are findings which were open to the ET. It is true that, as Smith and Aikens LJJ both observed, the reasoning of the ET could have been fuller, but I also agree with them (and Sedley LJ) that the ET was entitled to hold that the documents did not reflect the true agreement between the parties and that, on the basis of the ETs findings, four essential contractual terms were agreed: (1) that the valeters would perform the services defined in the contract for Autoclenz within a reasonable time and in a good and workmanlike manner; (2) that the valeters would be paid for that work; (3) that the valeters were obliged to carry out the work offered to them and Autoclenz undertook to offer work; and (4) that the valeters must personally do the work and could not provide a substitute to do so. See in particular, per Aikens LJ at para 97. It follows that, applying the principles identified above, the Court of Appeal was correct to hold that those were the true terms of the contract and that the ET was entitled to disregard the terms of the written documents, in so far as they were inconsistent with them. CONCLUSION Autoclenz and PAUL HUNTINGTON (Name of Sub contractor) HEREBY AGREE as follows: 1. The Sub contractor shall perform the services, which he agrees to carry out for Autoclenz within a reasonable time and in a good and workmanlike manner. 2. The Sub contractor hereby confirms that he is a self employed independent contractor and that he is responsible for payment of his National Insurance contributions and for making his returns to HM Inspector of Taxes paying his Income Tax under schedule D. 3. The Sub contractor and Autoclenz agree and acknowledge that the Sub contractor is not, and it is the intention of the parties that the Sub contractor should not become, an employee of Autoclenz. Accordingly, the Sub contractor is responsible for payments of all Income Tax and National Insurance contributions arising on or in respect of payments made to the Sub contractor by Autoclenz and the Sub contractor agrees that he shall indemnify Autoclenz in respect of any liability to Income Tax and National Insurance contributions for which Autoclenz may be held liable on or in respect of such payments. Sums agreed to be paid by Autoclenz to the Sub contractor shall be net of VAT (if any). For as long as the Sub contractor is, or becomes or remains liable to be, registered for VAT then Autoclenz shall, in addition, pay VAT on such sums. 5. Autoclenz shall, if requested by the Inland Revenue or the Department of Social Security, provide to those government departments details of payments made to the Sub contractor. 6. The Sub contractor confirms that he is not suffering and has never suffered from back trouble, skin rashes, eczema, dermatitis, asthma or epilepsy and has never been refused work or been terminated from work due to ill health. EITHER: 4. 7. (a) The Sub contractor confirms that he holds a current valid Driving Licence, free of endorsements And that he will ensure that those who work for him, in providing services to Autoclenz, hold the same. (b) The Sub contractor confirms that he DOES NOT hold a current valid Driving Licence. OR: PLEASE DELETE AS NECESSARY Although no deletions were made, details of Mr Huntingtons driving licence were included in clause 7(a). The agreement was signed by both Autoclenz and Paul Huntington. An agreement in the same or substantially the same form was signed between Autoclenz and each of the other claimants. For the reasons given above, I agree with the Court of Appeal that the ET was entitled to hold that the claimants were workers because they were working under contracts of employment within the meaning of regulation 2(1) of each of the NWMR and the WTR. They were within limb (a) of the definitions set out in para 2 above. Since the question whether the claimants were workers within limb (b) would only arise if the claimants had not entered into a contract of employment, that question does not arise, although, like the ET, I would have held that they were in any event working under contracts within limb (b). It follows that I would dismiss the appeal. ANNEX A Agreement

This appeal concerns the correct approach to written contracts in the employment context where there is a dispute as to the genuineness of a written term. The question arises in the context of a dispute as to whether individuals are workers within the meaning of the National Minimum Wage Regulations 1999 (NMWR) and of the Working Time Regulations 1998 (WTR). The appellant (Autoclenz) provides car cleaning services to motor retailers and auctioneers. The respondents (the claimants) are 20 individual valeters who all worked as car valeters for Auoclenz. All signed similar contractual documents which contained statements to the effect that the claimants were self employed and the claimants were taxed on that basis. In 2007, Autoclenz required the claimants to sign new contracts. The new contract contained a clause which provided: For the avoidance of doubt, as an independent contractor, you are entitled to engage one or more individuals to carry out the valeting on your behalf, provided that such an individual is compliant with Autoclenzs requirements of sub contractors as set out in this agreement. The contract also provided that: You will not be obliged to provide your services on any particular occasion nor, in entering such agreement, does Autoclenz undertake any obligation to engage your services on any particular occasion. The claimants brought a claim in the employment tribunal (ET) seeking a declaration that they were workers as defined under the WTR and the NMWR and consequently entitled to holiday pay and to be paid in accordance with the NMWR. Both sets of regulations define worker in materially identical terms as: an individual who has entered into or works under (a) a contract of employment; or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. As a matter of law no obligations clauses and substitution clauses are inconsistent with contracts of employment or contracts of personal performance It was therefore common ground between the parties that if the terms of the written contract were valid then, as a matter of law, the valeters could not be said to be workers within the meaning of the WTR and the NMWR. The ET held that these contractual terms did not reflect the true agreement between the parties and could be disregarded so that the claimants could be regarded as employed under contracts of employment within limb (a) of the definition. The Employment Appeal Tribunal (EAT) allowed Autoclenzs appeal on the basis that the claimants were not employees under limb (a) but held that they were workers under limb (b) of the definition. It held that on the basis that the ET had applied the incorrect legal test for the identification of sham terms. Both parties had to intend the contractual clause to mislead before it could be said to be a sham and there was insufficient evidence of such an intention. Both sides appealed to the Court of Appeal which restored the judgment of the ET, holding that the claimants were workers within the meaning of (a) and (b). The Supreme Court unanimously dismisses the appeal, holding that the ET had been entitled to find that the claimants were workers because they were working under contracts of employment within the meaning of the NWMR and the WTR. The substantive judgment is given by Lord Clarke, with whom Lord Hope, Lord Walker, Lord Collins and Lord Wilson agree. The ET had been entitled to disregard the terms included in the written agreement between the parties on the basis that the documents did not reflect what was actually agreed between the parties. In the employment context the courts must be alive to the possibility that written documentation may not accurately reflect the reality of the relationship between the parties. Employers may include terms aimed at avoiding a particular statutory result, even where such terms do not reflect the real relationship: [21] [25]. Where one party to an employment contract seeks to challenge the genuineness of the terms there is no need to show an intention to mislead anyone; it is enough that the written term does not represent the intentions or expectations of the parties. The question in every case is what was the true agreement between the parties: [26] [29]. The correct approach to that is enquiry is that set out by the Court of Appeal in this case. The focus must be to discover the actual legal obligations of the parties. To carry out that exercise the tribunal will have to examine all the relevant evidence. That will include the written term itself, read in the context of the whole agreement, as well as evidence of how the parties conducted themselves in practice and what their expectations of each other were: [31] [33]. Nothing in the judgment is intended in any way to alter those principles which apply to ordinary contracts, and in particular, to commercial contracts: [21]. However, the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. This must be taken into account in deciding whether terms of any written agreement in truth represent what was agreed: [34] [35]. In the present case the ET had been entitled to find that: (1) the valeters would perform the services defined in the contract for Autoclenz within a reasonable time and in a good and workmanlike manner; (2) that the valeters would be paid for that work; (3) that the valeters were obliged to carry out the work offered to them and Autoclenz undertook to offer work; and (4) that the valeters must personally do the work and could not provide a substitute to do so. It follows that the Court of Appeal was entitled to hold that those were the true terms of the contract and that the ET was entitled to disregard the terms of the written documents: [37] [38].

In 2008 Lord Bingham of Cornhill and I were the dissenting minority when the majority in R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61, [2009] AC 453 (Bancoult No 2) allowed the Secretary of States appeal and upheld the validity of section 9 of the British Indian Ocean Territory (Constitution) Order 2004 (the 2004 Constitution Order). Section 9 provides that, since the British Indian Ocean Territory (BIOT) was set aside for defence purposes, no person shall have any right of abode there (section 9(1)) and further that no person shall be entitled to enter or be present there except as authorised by the Order itself or any other law. I have not changed my opinion as to what would have been the appropriate outcome of the appeal to the House of Lords. But that is not the issue before us. The issue before us is whether the majority decision should be set aside, not on the grounds that it was wrong in law, but on grounds that the Secretary of State failed, in breach of his duty of candour in public law proceedings, to disclose relevant documents containing information which it is said would have been likely to have affected the factual basis on which the House proceeded. That was that the Secretary of State, when enacting section 9, could justifiably rely on the stage 2B report prepared by Posford Haskoning Ltd (Posford) for its conclusion that any long term resettlement on the outlying Chagos Islands was infeasible, other than at prohibitive cost. In addressing the issue now before us, we are bound by the legal reasoning which led the majority to its conclusion indeed, strictly bound without possibility of recourse to the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234, since this is an application in the same proceedings. The relevant documents are conveniently described as the Rashid documents, after Ms Rashid, the deponent from the Treasury Solicitors Department who by witness statement dated 1 May 2012 first produced them. She did this without commentary in Administrative Court proceedings in Bancoult (No 3), regarding the declaration of a Maritime Protected Zone (MPA) in the high seas around BIOT. Ms Rashid made clear that she had no personal knowledge of events leading to the earlier failure to disclose. That the failure to disclose the Rashid documents in the Bancoult No 2 proceedings was culpable is not, and could not be, disputed. On the other hand, it is accepted that it was not intentional and did not involve any bad faith. I shall address the circumstances, the contents of the documents and their significance in due course. In addition to relying on the alleged breach of candour, Mr Bancoult also seeks to adduce four heads of new material, put forward as constituting evidence unavailable at the time of the House of Lords decision. All are said to go to the reliability of the stage 2B report, to undermine or invalidate the basis on which the House proceeded and to constitute an independent justification for re opening the decision. I will revert to this ground of application later in this judgment, and focus in the meanwhile on the alleged breach of candour. The jurisdiction to set aside in cases of unfair procedure and fresh evidence Unfair procedure: There is no doubt that the Supreme Court has inherent jurisdiction to correct any injustice caused by an earlier judgment of itself or its predecessor, the House of Lords, though it is also clear that it will not re open any appeal save in circumstances where, through no fault of a party, he or she has been subjected to an unfair procedure and that there can be no question of that decision being varied or rescinded by a later order made in the same case just because it is thought that the first order is wrong: R v Bow Street Metropolitan Stipendiary Magistrate, Ex p Pinochet Ugarte (No 2) [2000] 1 AC 119, per Lord Browne Wilkinson. One partys failure to disclose relevant documentary information is clearly capable of subjecting the other party to an unfair procedure. However, a decision to re open an appeal also has important evaluative as well as discretionary aspects. The present applicant was, in its application to set aside (paras 109 130), content to express the evaluative aspect in terms used in an analogous context in the Court of Appeal in Taylor v Lawrence [2002] EWCA Civ 90; [2003] QB 528 and followed by the Privy Council in Bain v The Queen [2009] UKPC 4. As the Privy Council said in the latter case at para 6, quoting Lord Woolf CJ at p 547 in the former case: What will be of the greatest importance is that it should be clearly established that a significant injustice has probably occurred and that there is no alternative effective remedy. Fresh evidence: That the jurisdiction to set aside also extends to situations where fresh evidence is discovered after a judgment has been rendered which is not susceptible of appeal is also recognised in Court of Appeal authority: In re U [2005] EWCA Civ 52; [2005] 1 WLR 2398 Feakins v Department of Environment, Food and Rural Affairs [2006] EWCA Civ 699. The latter was a case where it was discovered that a DEFRA official had provided materially incorrect information to the court in a witness statement. In each case, however, it was emphasised that it was not sufficient simply to rely on the principles in Ladd v Marshall [1954] 1 WLR 1489, which apply when fresh evidence is sought to be adduced for or on an appeal. Rather, as it was put in In re U, para 22, it must at least be shown, not merely that the fresh evidence demonstrates a real possibility that an erroneous result was arrived at in the earlier proceedings , but that there exists a powerful probability that such a result has in fact been perpetrated. This statement was quoted from and accepted in the application to set aside, para 121. Further, as to the discretionary aspect, the court noted in Feakins: The court [in In re U] held that, although that was a necessary condition, it was not sufficient; the court would have also to consider the extent to which the complaining party was author of his own misfortune and that there was no alternative remedy. In oral submissions, Mr Edward Fitzgerald QC did not directly challenge the above principles as stated in In re U, stating in his reply that there was nothing between the parties on jurisdiction. However, in his written speaking note, directed specifically to jurisdiction in response to the courts invitation to focus on this, the matter was put differently, and as follows (para 2.4(iv)): As to whether there would now be a different outcome, it is submitted that it is only necessary to show at this threshold stage that there may well be a different outcome on a reconsideration. See also, eg the submission (para 8.8) that Dr Shepherd may well have had an axe to grind. For my part, particularly where, as here, a party has failed to disclose the documents which it is now submitted constituted important evidence, I prefer to leave open whether a test of probability or, in the context of fresh evidence, powerful probability is too inflexible to cater for all possibilities. The egregiousness of a procedural breach and/or the difficulty of assessing the consequences of such a breach or of the significance of fresh evidence might, it seems to me, in some situations militate in favour of a slightly lower test, perhaps even as low as (though I do not decide this) whether the breach may well have had a decisive effect of the outcome of the previous decision. I shall consider the present application in that light also, although I do not in the event consider that the outcome of this application depends at any point on the test applied. The course of events leading to the present application The regrettable facts lying behind these and other proceedings such as R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 1) and (No 3) were outlined by Lord Hoffmann in paras 1 30 of his judgment in Bancoult No 2, in terms which both Lord Bingham and I accepted with only a few (presently immaterial) qualifications: see paras 68 and 137 139. BIOT consists of the Chagos Islands, the largest being Diego Garcia. In 1966 the United Kingdom agreed in principle to make BIOT available to the United States for at least 50 years for defence purposes, and with effect from July 1971 the United States took over Diego Garcia as a base. At the same time, by the Immigration Ordinance 1971, the Commissioner of BIOT prohibited any person from entering or being in BIOT without a permit issued by an immigration officer. Mr Bancoult represents Chagossians (or Ilois), indigenous inhabitants of BIOT, whose removal and resettlement the United Kingdom procured between 1968 and 1973 by various non forceful means with a callous disregard of their interests (Lord Hoffmann, para 10). Compensation, initially in the 1970s of 650,000 and then in 1982 of a further 4m in a trust fund set up under a Mauritian statute, was paid and accepted in satisfaction of all claims by most (some 1,340) Chagossians, though a few refused to sign. A challenge to this settlement was later made but struck out as an abuse of process by Ouseley J in Chagos Islanders v Attorney General [2003] EWHC 2222 (QB), leave to appeal being refused by the Court of Appeal [2004] EWCA Civ 997. Ouseley Js judgment made clear that there was no further economic obligation on the United Kingdom to fund resettlement in BIOT. A challenge to the Immigration Ordinance 1971 was on the other hand successful. In R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 1) [2001] QB 1067, the Divisional Court decided that the Commissioner for BIOTs power to legislate for the peace, order and good government of BIOT did not include a power to expel its inhabitants. The then Foreign Secretary, Mr Robin Cook, stated publicly that he accepted this decision, and revoked the 1971 Ordinance by the Immigration Ordinance 2000. This confined the restriction on entry or presence to persons not British Dependent Territories citizens by virtue of their connection with BIOT. Mr Cook also announced that a recently completed feasibility study into the prospects of resettling the Ilois would now proceed to a second stage. This was originally intended to involve two phases, the first (Phase 2A) relating to hydrological monitoring, the second (Phase 2B) to a more general examination, prior to a cost benefit analysis (Phase 3). The second stage reports were undertaken by Posford as project managers. In the event, the first two phases were amalgamated, leading to a report entitled stage 2B published in July 2002. Its General Conclusions, para 1.11, stated: To conclude, whilst it may be feasible to resettle the islands in the short term, the costs of maintaining long term inhabitation are likely to be prohibitive. Even in the short term, natural events such as periodic flooding from storms and seismic activity are likely to make life difficult for a resettled population. The Secretary of State in this light decided not to proceed with Phase 3, terminated consideration of re settlement and on 10 June 2004 introduced a new prohibition on residence in BIOT by section 9 of the 2004 Constitution Order, to the effect set out in para 1 above. A new Immigration Order 2004 was at the same time also enacted, but needs no separate treatment here. The present proceedings were begun for judicial review to quash section 9 of the Constitution Order. They succeeded before the Divisional Court and Court of Appeal, but failed by a majority of three to two before the House of Lords. All members of the House accepted that the 2004 Constitution Order was susceptible to judicial review on ordinary principles of legality, rationality and procedural impropriety. But the majority (Lord Hoffmann, Lord Rodger of Earlsferry and Lord Carswell) held: that, although the Chagossians had had important common law rights of abode, they were not so fundamental that they could not be removed by section 9; that the Secretary of States decision to remove such rights, to reimpose immigration control and to prevent resettlement was in the circumstances neither unreasonable nor an abuse of power; and that the previous Foreign Secretarys statements in 2000 (para 11 above) did not amount to a clear and unambiguous promise that the Chagossians would be permitted to return and settle permanently creating any legitimate expectation on which they could now rely. Lord Bingham and I took the opposite view on these points, and would have dismissed the Secretary of States appeal. During the proceedings no challenge was made or suggested to the stage 2B report or its findings. The Secretary of State relied on its findings in para 106 of his skeleton argument before the Administrative Court dated 25 November 2004, stating: in any event, the defendant submits that it cannot conceivably be said to be irrational for steps to be taken to ensure that the BlOT is not resettled in circumstances where no viable long term resettlement can be supported; where the costs of resettlement would be extensive, prohibitively expensive and potentially open ended; and where the UKs defence interests and treaty obligations strongly militate against permitting resettlement of the archipelago. Sir Sydney Kentridge QC expressly disavowed any challenge to the reports conclusions when opening the Chagossians case before the Divisional Court on 6 December 2005; and amended particulars put before that Court on 13 December 2005 on the issue of irrationality likewise made no such challenge. Before the House of Lords the stage 2B report and its findings were equally uncontentious. All members of the House proceeded on that basis. The argument on behalf of the Chagossians was throughout that the findings did not justify the making of the 2004 Constitution Order. Lord Bingham and I accepted that argument, but the majority rejected it and, to differing extents, deployed the relevant findings in their reasoning. Lord Hoffmann at para 53 said this: 53. I think it is very important that in deciding whether a measure affects fundamental rights or has profoundly intrusive effects, one should consider what those rights and effects actually are. If we were in 1968 and concerned with a proposal to remove the Chagossians from their islands with little or no provision for their future, that would indeed be a profoundly intrusive measure affecting their fundamental rights. But that was many years ago, the deed has been done, the wrong confessed, compensation agreed and paid. The way of life the Chagossians led has been irreparably destroyed. The practicalities of today are that they would be unable to exercise any right to live in the outer islands without financial support which the British government is unwilling to provide and which does not appear to be forthcoming from any other source. During the four years that the Immigration Ordinance 2000 was in force, nothing happened. No one went to live on the islands. Thus their right of abode is, as I said earlier, purely symbolic. If it is exercised by setting up some camp on the islands, that will be a symbol, a gesture, aimed at putting pressure on the government. The whole of this litigation is, as I said in R v Jones (Margaret) [2007] 1 AC 136, 177, the continuation of protest by other means. No one denies the importance of the right to protest, but when one considers the rights in issue in this case, which have to be weighed in the balance against the defence and diplomatic interests of the state, it should be seen for what it is, as a right to protest in a particular way and not as a right to the security of ones home or to live in ones homeland. It is of course true that a person does not lose a right because it becomes difficult to exercise or because he will gain no real advantage by doing so. But when a legislative body is considering a change in the law which will deprive him of that right, it cannot be irrational or unfair to consider the practical consequences of doing so. Indeed, it would be irrational not to. (italics added for emphasis) Lord Rodger at paras 110 114 said: 110. Section 9 of the Constitution Order removes any right of abode on the Chagos Archipelago which the claimant or anyone else may have had. It is a stark provision. But the Secretary of States decision to have it enacted and the effect of that decision have to be judged against the circumstances at the time it was taken. No one was then actually living on the outer islands and, even though the islanders had enjoyed a right to return since November 2000, none of them had done so. They were instead seeking support from the UK and US governments to financially assist their return or alternatively to provide compensation: Feasibility Study Phase 2B, Executive Summary, para 1.1. More importantly, there was no prospect that anyone would be able to live on the outer islands, except on a subsistence basis, in the foreseeable future: Feasibility Study Phase 2B, Executive Summary, para 1.11. Sir Sydney did not dispute this, but contended that it was irrelevant. In other words, the position was just the same as if people had actually been living on the islands when the Orders were made. I am unable to accept that submission. The impact of the legislation on the people concerned would be very different in the two situations. In my view, in reviewing the Secretary of States decision to remove the right of abode, it is relevant that there was actually no prospect of the Chagossians being able to live on the outer islands in the foreseeable future. The government accepts, of course, that they can apply for permits to visit the islands and that an unreasonable refusal could be judicially reviewed. Such visits have taken place in the past. 111. Against that background, can it be said that no reasonable Secretary of State could have decided to have section 9 enacted? 112. On 15 June 2004 a junior minister, Mr Rammell, made a written statement to Parliament. His good faith has not been impugned by the respondent. The statement shows that, in deciding to legislate to prevent people resettling on the outer islands, the government took into account the fact that the economic conditions and infrastructure which had once supported the way of life of the Chagossians had ceased to exist. Something new would have to be devised. The advice was that the cost of providing the necessary support for permanent resettlement was likely to be prohibitive and that natural events were likely to make life difficult for any resettled population. Human interference within the atolls was likely to exacerbate stress on the marine and terrestrial environment and would accelerate the effects of global warming. Flooding would be likely to become more frequent and would threaten the infrastructure and the freshwater aquifers and agricultural production. Severe events might even threaten life. The minister recorded that, for these reasons, the government had decided to legislate to prevent resettlement. Although he made no mention of it, the decision to legislate and to introduce immigration controls at that particular time appears to have been prompted by the prospect of protesters attempting to land on the islands. In addition, Mr Rammell said that restoration of full immigration control over the entire territory was necessary to ensure and maintain the availability and effective use of the territory for defence purposes. He referred to recent developments in the international security climate since November 2000 when such controls had been removed. 113. The ministerial statement indicates that a decision to legislate was taken on the basis of the experts (second) report on the difficulties and dangers of resettling the islands, these difficulties and dangers being dangers and difficulties which would affect the Chagossians themselves, if they were to try to live on the outer islands. Given the terms of that report alone, it could not, in my view, be said that no reasonable government would have decided to legislate to prevent resettlement. In particular, the advice that the cost of any permanent resettlement would be prohibitive was an entirely legitimate factor for the government, which is responsible for the way that tax revenues are spent, to take into account. In addition, the government had regard to defence considerations, the views of its close ally, the United States, and the changed security situation after 9/11. These additional factors reinforce the view that the decision to legislate was neither unreasonable nor irrational. 114. Of course, the decision was adverse to the claim of the Chagossians to return to settle on the outer islands. But that does not mean that their interests had been ignored: a realistic assessment of the long term position of any potential Chagossian settlers on the outer islands was central to the expert report on which the government relied. In addition, the government considered the overall interests of the United Kingdom. It was entitled to do so. In the absence of any relevant legal criteria, judges are not well placed to second guess the balance struck by ministers on such a matter. (italics added) Lord Carswell said (para 120) that he agreed with very little qualification with the reasoning of Lord Hoffmann and Lord Rodger, but his specific reasoning focused on the lack of long term feasibility. He said that the Chagossians expressed wish to return to their homeland was: put on an abstract basis by their counsel, for it is quite clear that for them to resettle in the islands is wholly impracticable without very substantial and disproportionate expenditure. They are not in a position to meet such a cost. It could only be shouldered by the British government, which has made it clear that it is willing to permit and fund from time to time short visits to the outlying islands, but not to support a large scale permanent resettlement. One might ask the question why this campaign is being pursued, for the Chagossians already can pay visits and there is no realistic prospect of resettlement unless it is funded for them at huge expense. I do not find it necessary to seek an answer to that question, but the practical difficulties in the way of resettlement are in my view relevant to the rationality of the governments decision to make the 2004 Orders in Council. (italics added) On the present application, Mr Bancoult submits that, had the Rashid documents been available prior to the hearing before the Divisional Court, the Court of Appeal or the House of Lords, they would have led to a challenge being mounted to stage 2B report, the conclusions drawn in that report would have been discredited, and the majority reasoning in the above extracts would have been impossible. This brings me to a consideration of the Rashid documents. The Rashid documents: (a) Circumstances of late disclosure By letter dated 5 December 2005 disclosure had been made on behalf of the Secretary of State to Sheridans, solicitors acting for Mr Bancoult, of a copy letter dated 23 May 2002 sent by Mr Charles Hamilton of BIOT to Ms Alex Holland, the senior environmental scientist who was Posfords project manager. This raised questions and made comments on a draft stage 2B report. Between November 2005 and February 2006, requests were made on behalf of Mr Bancoult for disclosure of this draft report as well as any draft of the earlier feasibility study. The Treasury Solicitor, while replying that these requests did not go to any issue in Bancoult No 2, made searches, but was in the event only able to locate a draft feasibility study which was disclosed in early December 2005. By letter dated 13 January 2006 (E1472) Mr Bancoults solicitors, Sheridans, questioned, in relation to the stage 2B report, whether there had been official input into the work of consultants which undermines its authority. The Treasury Solicitor responded that this was an extremely serious allegation and needed to be particularised. It was not particularised and, as stated, no challenge to the stage 2B report was then made. A further allegation that, in the absence of the draft stage 2B report, the General Conclusions must be assumed not to be the unguided advice of independent consultants was made by note dated 13 March 2009. On 7 October 2010 an email dated 29 May 2002 sent by Mr Charles Hamilton to Ms Holland advising that the final draft omit development scenarios (advice not in fact followed: para 40 below) was disclosed on behalf of the Secretary of State in the context of the issues arising in Bancoult (No 3). By letter dated 21 December 2010 Clifford Chance (now acting for Mr Bancoult as a result of the move to that firm of Mr Gifford the individual partner handling Mr Bancoults affairs) wrote asserting that the total absence of any records of meetings in May June 2000 and June/July 2002 regarding what became respectively the feasibility study and stage 2B report casts grave doubts on the ability of FCO to explain its conduct or to justify what appears to be serious and concerted influence practised to achieve a conclusion which reflected the views of officials and contradicted the unguided advice of consultants. Clifford Chance referred in this connection to the disclosure of the email dated 29 May 2002 and to statements made to them in a letter dated 11 February 2010 by Mr Stephen Akester, one of the Phase 2B consultants, that resettlement was always feasible within reasonable cost parameters, but that he was not in the committee that drafted the stage 2B report. On 10 October 2011 Clifford Chance wrote in the light of the above urging a yet further search for documents pursuant to the Secretary of States duty of candour in the context of both Bancoult (No 2) and Bancoult (No 3). The further search then made led to the Treasury Solicitor discovering previously undisclosed documents, including the draft stage 2B report, in circumstances described in its letter dated 15 March 2012 to Clifford Chance as follows: In the context of the aforementioned matters, TSol recalled archived files held by a third party document storage company that were generated during the conduct of the Bancoult (No 2) litigation. In the course of reviewing these files, it has become apparent that they contain certain documents concerned with the drafting of the Phase 2B report which originate from the FCO but are no longer retained by the FCO on its own files as a result of its document retention. It was subsequently further explained that there was clearly a point, occurring during 2005, when the FCO no longer held the draft Phase 2B Executive Summary on its files, as it was removed according to the FCOs document retention policies, and yet TSol retained a copy on its Bancoult (No 2) files. The documents so discovered, including the draft stage 2B report, were then disclosed by Ms Rashids witness statement dated 1 May 2012. The Secretary of State accepts that, in the light of the requests made and despite the absence of any challenge to the stage 2B report, the Rashid documents should have been capable of location and should have been located and disclosed pursuant to his general duty of candour in public law proceedings. The failures in this regard were and are highly regrettable. But there is, as stated previously, no basis for attributing them to any deliberate misconduct. The question is what significance would or might have attached to, and what consequences would or might have flowed from, their disclosure. (b) Alleged significance of the Rashid documents In Mr Bancoults written case, it is alleged that the Rashid documents would have been significant under four heads: (i) As showing that, instead of being independent as understood, the final report was subject to extensive alterations to reflect FCO views. Head (iv) below concerns one particular difference alleged to be centrally important to the stage 2B reports conclusions. (ii) As revealing that Dr Sheppard, the FCOs scientific adviser, had criticised the draft stage 2B report in an email sent to Charles Hamilton on 14 May 2002 and had, after the issue of the final report, also endorsed criticisms of it made by a resettlement anthropologist, Jonathan Jenness, instructed on behalf of Mr Bancoult. (iii) As revealing evidence of lack of objectivity in Dr Sheppards input into the stage 2B report before it was finalised. More specifically, it is said that the documents show that Dr Sheppard was the only reviewer of the whole draft, that heavy reliance on only one specialist made the report unsafe and that, as a coral reef specialist well known to be strongly dedicated to their conservation, there is concern whether he could reasonably be regarded as an objective assessor on the issue of reintroducing human settlement. (iv) As showing alterations between the draft and final version of the stage 2B report in a manner which conflates and distorts the consultants original finding in relation to storms creating difficulties for resettlement. Taken together, it is submitted that it is certain that, had the Rashid documents been disclosed, they would have caused the applicants representatives to challenge the reliability of the feasibility study, that it is highly likely that the challenge would have succeeded and that, if the House of Lords judgment is set aside, a new hearing will reach a different conclusion. The focus of the first and fourth heads of alleged significance of the Rashid documents is alterations alleged to have been made and to have distorted the final stage 2B report. The focus of the second and third heads is Dr Sheppard. The second relies on his criticisms of the draft. The third suggests that his input lacked objectivity and was unreliable. (c) The first and fourth heads These two heads stand or fall together. They are reproduced in the speaking note which Mr Edward Fitzgerald QC used at the hearing before the Supreme Court. That speaking note refers to extensive alterations to the original draft in the final draft, which it suggests are likely to have reflected FCO views and input and to have been unsupported by evidence in the body of the study. According to Clifford Chances letter dated 10 October 2011, there were 94 revisions over a period when the document was open for editing for a total of seven and a half hours. The speaking note says that some of the key changes are summarised in a summary note dated 17 February 2015 prepared by counsel for Mr Bancoult. This was based in turn on a lengthy Analysis Note prepared by Mr Bancoults solicitor, Mr Gifford, in conjunction with a coral scientist, Mr Dunne. In addition to the change relating to storms and re settlement identified in head (iv), the summary note identifies three further key amendments. That alterations would or might be made in the final report following comments by the FCO and BIOT on the draft report cannot come as any surprise to those representing Mr Bancoult, or be regarded as in any way unnatural. The stage 2B report was prepared by Posford under a contract expressed to be between the Commissioner for BIOT and Posford Duvivier Environment dated 10 December 2001. The Terms of Reference set out in section 4 of the contract provided by clause 6 for monthly reporting and further by clause 6.3 that A draft final report, containing an account of the work done, conclusions and recommendations will be submitted within four months of commencing the assignment. Within two weeks of the receipt of comments on the draft from recipients, consultants will submit a Final Report. In this respect clause 6.3 echoed the provisions of clause 17 of the terms of reference for the earlier contract dated 13 April 2000 made with David Crapper for the feasibility study, which, when made was according to its terms intended also to cover stage 2. Clause 17 provided: 17. A draft report will be produced for the government of the BIOT. On receiving comments on the draft report from the government of the BIOT, the consultant will finalise the report and provide the text in both paper and electronic form to the government of the BlOT. Sheridans received a copy of this earlier contract, and in a letter dated 28 November 2005 noted and set out clause 17 specifically, not by way of objection, but in order to ask for the draft report and for any comments on it made by the FCO and the government of BIOT. Whether any of the actual alterations made can be described as extensive or as reflecting FCO views, or be seen to have unbalanced the report as a result, are matters to which I will come. Before doing so, it is convenient to examine events in more detail to identify any overt trace of undue executive influence over the final report. After entry into force of the contract dated 10 December 2001, Posford set about preparing for field studies in BIOT, in particular on the two outlying islands of Ile de Coin and Ile Boddam, as contemplated by its terms. These took place in February 2002, after which Posford submitted a second progress report dated 1 March 2002. This was tabled and discussed at a meeting with the FCO and BIOT on 6 March 2002. There is no suggestion or likelihood that the draft executive summary was available to anyone at this stage, and Ms Hollands letter dated 12 April and Mr Hamiltons email dated 15 April 2002 (E2404) indicate that, once drafted and reviewed, such a draft was only submitted to the FCO in early April 2002. It is convenient at this point to introduce the fourth piece of new evidence on which the applicant seeks to rely. It is a note of the 6 March 2002 meeting made by Posford dated 7 March 2002. It was only obtained by the applicants advisers, after a chance meeting, from Mr Stephen Akester of MacAlister Elliott & Partners (MEP), sub contractors to Posford who arranged the on site investigations in the Chagos in early 2002. As such it is not a document which was at any relevant time in the possession of or available to the executive. But it records a meeting at which FCO and BIOT representatives were present, and, taking it as an accurate record of what took place at that meeting, what it records was within their knowledge, and may also throw light on their roles in relation to the re drafting and finalisation of the stage 2B report. Mr Huckle of the FCO is reported as reiterating the political importance of the forthcoming feasibility report which he stressed had been heightened in recent weeks because the Ilois are currently pursuing legal action against the British and American governments. He went on to point out that the outcome of the court case will either be compensation, or financial assistance to the Ilois in resettling the islands and that the questions were how much, and what forms of livelihood development will the British government permit, which he said was where the feasibility report comes in. There is nothing here which appears to be anything other than a genuine explanation as to the reports current relevance couched if anything in terms anticipating that it would accept the possibility of resettlement. The FCO appears a little later as saying that it had hoped that Phase II would negate the need for Phase III, ie if it concluded that resettlement wasnt feasible, but realistically, that was never likely to be the outcome. The FCO is hoping that the section on Climate Change will resolve its difficulties, but Brian [Little] and I pointed out that a considerable amount of money could be made in 25 100 years, and lets not assume that the Ilios are considering a return to subsistence or reliance on natural resources . Again this confirms, if anything, that the FCO was resigned to a report accepting the feasibility of some form of resettlement, and that Posford was well capable of standing up for what it believed correct. Indeed, earlier in the note Posford recorded that allegedly, a number of those whom we competed against in the bidding process have been taking pot shots at our approach within earshot of important people. Sounds like sour grapes. That all said, our findings and arguments must be tight and convincing. There is no suggestion that the FCO was inviting changes to bolster any sort of findings or conclusions in either the draft and the final report, and no basis for regarding Posford as susceptible to any such invitation. The express purpose of the 6 March meeting was, as stated, to provide a de briefing on Posfords recent field studies on Ile du Coin and Ile Boddam. In all the circumstances, the 7 March 2002 note provides no real support to a suggestion that the content even of the draft stage 2B report was unduly interfered with or influenced by the FCO or BIOT, still less that any subsequent alterations between the draft submitted in April and the stage 2B report as finalised in June were the result of any such undue interference or influence. The follow up exchanges after Posford had completed and submitted all sections of the draft report in April 2002 (E2403) are evidenced by the Rashid documents as well as the previously disclosed messages dated 23 and 29 May 2002 from Mr Hamilton to Ms Holland. They are also significant. Dr Sheppard had on 14 May 2002 sent Mr Hamilton very detailed comments on the draft report (E2409 on). In relation to the Executive Summary, he wrote: This important section does not always reflect the content of the volumes very well. This is doubtless due to haste and short deadlines. Several key issues missed out are stated in the text and in the conclusions. I suggest that after a period of reflection this is revisited. Several conclusions are apparently at odds either with each other or with other, known facts. During the rewrite, these apparent contradictions in the text can be resolved. They make parts of the report somewhat vulnerable. One example is the widely varying estimates of numbers of people that could be sustainably supported. Dr Sheppard went on in sections dealing with the body of the draft report to note (a) the risk of water contamination, observing that the draft did not clearly state how such contamination could be prevented through the thin roof of the aquifers, (b) a contradiction between statements that Water recharge of aquifers would increase by vegetation clearing (Groundwater resources section) But: water recharge would decrease with clearance of plants and development (from volume IV), and (c) under Other points: The point about Chagos is that it lies in the most nutrient poor part of the Indian Ocean. The Chagos bank fishery potential is estimated to be half that of other banks (p 146). Mr Hamilton then wrote to Ms Holland on 23 May 2002, noting that he had studied the drafts of the report in some detail, that it and any recommendations which followed from it would be carefully examined and that we are particularly anxious therefore that its scientific content is as complete and watertight as possible. He made detailed comments on the draft, drawing heavily on Dr Sheppards comments, particularly when writing this in relation to the Executive Summary: This important section does not always reflect the content of the volumes very well. Several key points and conclusions in the main text are important and stand out, but are not well reflected in the summary. Further, several conclusions are apparently at odds either with each other or with other known facts. During your revision, I would be grateful if you would resolve these apparent contradictions as they make parts of the report unclear. Examples of issues needing reconciliation include widely varying estimates of numbers of people that could be sustainably supported, issues of water contamination and the balances of water use for different activities, whether plants increase or decrease water recharge, and the Chagos bank fishery potential. Synthesis would doubtless resolve many of these. I understand that different consultants wrote different sections, so I think that this summary may be a suitable place for an overall, concise synthesis, which would also include overall environmental management recommendations. Many of these points are noted in the attachments relating to different sections, but are crucial for the writer of this Executive Summary. As is apparent, Mr Hamilton was here picking up points made by Dr Sheppard as indicated above. In attachment 7, relating to volume III of the draft dealing with resettlement issues, Mr Hamilton discussed three scenarios which had been included, noting various issues and that nothing had been said either on scenario 3 (based partly around expensive tourism), although this appeared to be the only attractive development option for interested parties, or on a possible scenario 4 (non residential, but settled seasonally for some fishing). The discussion ended Possibly use of the three scenarios just adds confusing complexity and begs several questions which are not answered. He ended by underlining the importance attaching to the overall synthesis (Executive Summary) which should clearly highlight the main points which are brought out in the text, and indicated that following the drafts revision he would call a meeting of all concerned to finalise the report. Posford then prepared its own detailed comments on Mr Hamiltons letter which were sent to him by Ms Holland under cover of a faxed letter dated 28 May 2002. Her letter stated: To summarise the attached, we consider that some of the comments are valid and we will revise our report in light of these suggestions. However, we feel that others are somewhat inaccurate and do not reflect the understanding we had with the BlOT Administration on our approach. I should like to discuss these comments with you at your earliest convenience. In the body of the comments, Posford replied to the points made on the three scenarios as follows: Three scenarios: There was much debate during the drafting of the report as to whether the three scenarios should be included, but several of those involved considered that these helped to develop conclusions about whether certain resettlement activities would be possible, particularly in the drafting of the environmental appraisal. We stopped at three hypothetical scenarios, but recognise that there could be many more combinations of activities. The suggestion of scenario 4, which is based on non residential and non development, does not actually constitute resettlement and was therefore not considered as a scenario. However, you will note that Option 1 for fisheries development (p 165) does refer to this form of livelihood activity. We would be grateful if you would give direction as to whether you wish us to include or exclude the development scenarios from the final report. To this last request, Mr Hamilton simply replied by email on 29 May 2002: You asked about the inclusion of development scenarios in the final report. Our advice is that it would be better if these are excluded. However, as Mr Giffords and Mr Dunnes Analysis Note acknowledges, this advice was not in fact taken up in the final stage 2B report, where the Development Scenarios can be seen to be crucial to several parts of the study. Nevertheless, the Analysis Note seeks to portray Mr Hamiltons letter and comments dated 23 May 2002 as an exercise of editorial control, and his email of 29 May 2002 as yet further attempts to exercise editorial control over the final report. To my mind, there is nothing untoward about them at all. The impression conveyed is one of independently minded exchanges, passing between people whose genuine concern was to have as thorough, accurate and watertight a final report as possible. Posfords comments dated 28 May 2002 were evidently also sent to Dr Sheppard, since he commented on them by email on 31st May 2002 (E2450 2451). There were further technical exchanges between Brian Little, who had been appointed as FCO Feasibility Study Project Manager under contract dated 29 January 2001, and Posford in late May and early June (E2452 2458 and E2465 2467), and a further set of comments by Tony Falkland of Posford responding on 9th June to Dr Sheppards comments (E2459 2464) as well as to Brian Littles comments (E2465 2468). Dr Sheppard noted Mr Littles comments on 11 June (E2469), and Mr Little sent an email commenting on Posfords response on 12 June (E2470). A meeting was set up to discuss the final report on Friday 12 June, in relation to which Mr Hamilton invited Dr Sheppard to act as a devils advocate. This he evidently did (E2476 2477). Some changes/deletions were made, leading to the final report. Reading all these exchanges, nothing in them suggests anything but a proper, professionally oriented and independent process, with all involved seeking to arrive at objective and sustainable findings and conclusions. I turn to the alterations which can now be seen to have been made between the original draft and the final report. The General Conclusions, to which Sheridans rightly attached importance in their note dated 13 March 2009 (para 21 above), are now available in both their draft and their final form in the executive summary. A fundamental point which risks being overlooked in discussion about differences elsewhere in the executive summary or body of the text is that the General Conclusions can now be seen to have been in identical terms in both their draft and their final versions. Their terms have been set out in para 12 above. They represent the critical conclusions, on which the majority in the House of Lords relied as justifying the Secretary of States decision to make the 2004 Constitution Order, and they were unaltered between the original draft and final versions. following section headed Vulnerability: Immediately preceding these General Conclusions also appeared the There appear to be sufficient groundwater, soils, fisheries, and environmental (eg limited tourism) resources to support a small population on a subsistence basis with some commercial opportunity, but there are some more fundamental issues surrounding the feasibility of resettlement. These relate to the vulnerability of a resettled population to current and predicted climatic conditions, and the fragility of the environment to human induced disturbance. Under the present climate, it is assumed, based on historic meteorological patterns and observations, that the islands are already subject to regular overtopping events, flooding, and erosion of the outer beaches. As global warming develops, these events are likely to increase in severity and regularity. In addition, the area is seismically active, and the possibility of a tsunami is a concern. These events would threaten both the lives and infrastructure of any people living on the islands. Whilst it might be possible to protect the islands to some extent in the short term through coastal defence measures, it is likely to be cost prohibitive and non pragmatic to consider this form of defence in the long term. The environment of the Chagos Archipelago is highly diverse and yet very susceptible to human disturbance. Coral reefs, which are one of the most important ecosystems within the Archipelago, are already exhibiting signs of stress from increased sea surface temperatures and other climatic phenomenon. Predictions from climate change experts indicate that mass mortality of reef building corals in the Indian Ocean is likely to occur as global warming increases, may be as soon as within the next 20 years. This will not only have huge implications for the long term coastal defence of the islands, and hence their very existence, but will also adversely affect livelihoods, particularly fisheries and tourism, which are likely to be the mainstay of any resettled population. Human interference within the atolls, however well managed, is likely to exacerbate stress on the marine and terrestrial environment and will accelerate the effects of global warming. Thus resettlement is likely to become less feasible over time. Again this passage was in identical form in the draft and final stage 2B report, and, as the Analysis Note acknowledges, it constitutes the basis for the overall negative assessment in the General Conclusions. The identity of these core sections of the Executive Summary in the draft and final reports raises obvious problems for the present application. But it is said that these key sections refer back in turn to section 1.8. It is in section 1.8 that the summary note dated 15 February 2015 identifies in total four key amendments. The following passages underlined and marked A, B or C in the following extracts from the draft report are passages on which Mr Bancoult relies in support of his case of inappropriately motivated or influenced alteration: 1.8 CLIMATE CHANGE The reports of the International Panel on Climate Change were evaluated to determine the latest projections on climate change. Global sea levels are expected to rise by about 38cm between 1990 and the 2080s. Indian and Pacific Ocean islands face the largest relative increase in flood risk. Although there will be regional variation, it is projected that sea level will rise by as much as 5mm per year, with a range of 2 9mm per year, over the next 100 years [B]. With a rise of 0.5 metres in sea level, the implications of climate change on the Chagos Archipelago are considerable, given that mean maximum elevation of the islands is only two metres; the diversity of livelihoods available is limited; and the relative isolation and exposure of the islands to oceanic influences and climatic events. These implications are discussed in the light of biodiversity and resettlement. 1.8.1 Implications for Biodiversity The impacts of climate change on highly diverse and productive coastal ecosystems such as coral reefs and atoll islands will depend upon the rate of sea level rise relative to growth rates and sediment supply. In addition, space for and obstacles to horizontal migration, changes in the climate ocean environment such as sea surface temperatures and storminess as well as human pressures will influence the capacity of ecosystems to adapt to the impacts of' climate change. [Two paragraphs dealing with coral bleaching and reefs] Species that occupy terrestrial habitats for all or part of their life cycle, such as birds, turtles and coconut crabs, will also be adversely affected by sea level rise. There is considerable uncertainty about how climate change will affect the natural environment in the Chagos Archipelago, but that the outcome is likely to be an unfavourable shift in biodiversity. 1.8.2 Implications for Resettlement The most significant and immediate consequences of climate change on a resettled population within the Chagos Archipelago are likely to be related to changes in sea levels, rainfall regimes, fresh water resources, soil moisture budgets, prevailing winds (direction and speed) and short term variation in regional and local patterns of wave action. At present, the Chagos Archipelago lies just north of an active cyclone belt, however, a small northward shift of this belt could lead to frequent cyclones in the area [A]. This would lead to more frequent flooding of the islands, with corresponding risk to life and any infrastructure. It would also reduce agricultural potential and the freshwater contained within the island aquifers would experience higher levels of salinity. Irrespective of whether the Chagos Archipelago becomes subjected to regular cyclones, the general increase in storminess that may accompany climate change would result in increased wave energies and an increasing frequency of over topping events [C]. Based on a 0.5m rise in sea level scenario, models of overtopping events demonstrate an increase of between 20 50% of the frequency of severe events. Of further significance is the probability that sea level rise and overtopping events would threaten the characteristics and sustainability of the fresh groundwater lens. The rate of erosion of the ocean coasts are likely to increase with sea level rise andincreased storminess, and would be accompanied by an increase in sediment transport, which would have implications for shoreline infrastructure. On islands where physical space is limited, as in Chagos, coastal defences are likely to be low key and would need to be developed with a view to sustainability. It is advised that future settlers on the outer atolls should be made aware of the risks of climate change in terms of their own safety and that of any physical investment. Should people wish to return, it would be prudent to provide specialist assistance in the preparation of appropriate and sustainable land use and coastal defence policies, which would ensure that the vulnerability of the resettled population was minimised as far as possible. In the final stage 2B report, section 1.8 of the executive summary reads as follows. Again, the passages underlined and marked A, B and C are passages on which Mr Bancoult relies in support of his case of inappropriately motivated or influenced alteration: CLIMATE CHANGE According to the International Panel on Climate Change global sea levels are expected to rise by about 38cm between 1990 and the 2080s. Indian and Pacific Ocean islands face the largest relative increase in flood risk. Although there will be regional variation, it is projected that sea level will rise by an average of 5mm per year over the next 100 years [B]. The implications of these predictions for resettlement of the Chagos Archipelago are considerable, given that mean elevation of the islands is only two metres. The most significant and immediate consequences of climate change for the Chagos Archipelago are likely to be related to changes in sea level, rainfall regimes, soil moisture budgets, prevailing winds, and short term variation in regional and local patterns of wave action. As a consequence, most islands will experience increased levels of flooding, accelerated erosion, and seawater intrusion into freshwater sources. The extent and severity of storm impacts, including storm surge floods and shore erosion are predicted to increase [A]. Although the risks associated with climate change are not easily established the implications of these issues to resettlement of the outer atolls of the Chagos Archipelago are outlined briefly below. Implications for water resources: Rising sea level would not have a significant effect on island freshwater lenses in the Chagos archipelago unless land is lost by inundation. If rising mean sea level causes land to be permanently inundated, then there will be a consequent loss in fresh groundwater. Increased storminess [C]: The Chagos islands have a small storm surge envelope thus even small changes in sea level and storm surge height implies an increase in the area threatened with inundation. It has been predicted that the flooding severity for a 1 in 50 year storm event with 0.5m of sea level rise is almost as high as the present day 1 in 1000 year event. Inundation can cause seawater intrusion into freshwater lenses. This not only reduces the availability of water for human consumption, but if salinity concentrations are high enough it can lead to decreased agricultural production. Biological systems and biodiversity: Climate change is predicted to have a significant impact on the marine and terrestrial environments of the Archipelago. Coral reefs are one of the most important ecosystems likely to be affected, and their ability to cope will depend upon the rate of sea level rise relative to their growth rate. The Chagos coral reefs were severely affected by the 1998 El Nino event, therefore any future sea surface warming would increase pressure on already stressed coral reefs. The added pressure of human interference within the marine environment would further weaken the ability of these systems to cope with climate change. Fisheries and aquaculture: It is predicted that climate change may have a severe impact on the abundance and distribution of reef fish populations. In addition, there is strong evidence of a correlation between the annual incidence of ciguatera (fish poisoning) and local warming of the sea surface, which will have an impact on fisheries potential, for subsistence and commercial purposes. Climate change is expected to have both positive and negative impacts on aquaculture; but the implications for seaweed farming (as investigated during this study) is not positive, with increased temperatures leading to reductions in productivity [D]. Human health, settlement and infrastructure: Populations, infrastructure and livelihoods are likely to be highly vulnerable to the impacts of climate change. Sustainability in food and water availability will be among the most pressing issues, together with the vulnerability of infrastructure to flooding and storm surges. Vulnerability and adaptation: There is a wide range of adaptation strategies that could be employed by a resettled population in response to climate change. Integrated coastal management has been strongly advocated as the key planning framework for adaptation. Adapting to island instability: There are two issues that need to be taken into account in adapting to island instability: shoreline erosion and sediment inundation of the island surface. Adaptation can fall within three broad categories depending on the level of infrastructure and population density on islands: no response; accommodation (infrastructure and dwellings are replaced at a rate commensurate with island migration); or protection (maintenance of infrastructure through coastal protection measures). The latter is likely to be the most costly strategy, and should be avoided through wise land use planning. Adaptation to inundation: Response to inundation will vary depending on the level of development on islands. On islands that will have little infrastructure, as is likely to be the case in Chagos, the costs to protect against inundation are likely to be prohibitive. Adaptation measures will include siting of infrastructure in low risk areas and the application of appropriate infrastructure designs, such as revised floor levels and open structures. More robust measures to prevent inundation, such as seawalls, are not recommended as they necessitate costly maintenance and future vertical extension as sea level rises, and they can lead to adverse impacts on coastal habitats. Adaptation to reef response: Discussion of the possible response of coral reefs to sea level rise indicates that at worst reef food and sediment resources diminish and at best they are maintained at similar levels or may even increase. The importance of reefs as both natural coastal protection structures and providers of food means that any adaptation measures against climate change, and any human livelihood activities, should not compromise the health of the reef system. Minimising adverse effects on reefs will require robust pollution control measures and effective waste management. From an examination of projected climate change scenarios, it is likely that the Chagos Archipelago, and any population settled on the outer atolls, will be vulnerable to its effects. The main issue facing a resettled population on the low lying islands will be flooding events, which are likely to increase in periodicity and intensity, and will not only threaten infrastructure but also the freshwater aquifers and agricultural production. Severe events may even threaten life. Increases in sea surface temperatures are likely to have adverse effects on coral reefs and consequently their ability to act as a coastal defence to the islands, and to support fisheries. This will place more pressure on resettled populations to not only counteract the pressures of climate change but also to ensure that their subsistence and income needs are met. The key amendments relied upon therefore fall under four heads. It is worth emphasising their limited extent in the overall context of the report, and particularly in the light of the unaltered General Conclusions and Vulnerability sections. Whatever the suggestion whether it is that the alterations were the product of undue executive influence or that they in some way demonstrate that the final report was unreliable or that the Secretary of State would have reached a different decision regarding the making of the 2004 Constitution Order if he had only been shown the draft rather than the final report the limited extent of the alterations in the overall context of the report points to my mind sharply against giving it credence or weight. However, I must also examine the amendments more closely. Taking first the change identified at [A] the main criticism is that The effect of this change is to delete from the feasibility study the important fact that the Chagos Islands are not within the cyclone belt at present, but to the North of it. There is no information anywhere in the Phase 2B study to indicate that (1) the cyclone belt has moved, either northward or in any other direction, in the past; or (2) that it is likely to move in the future; or (3) that if it were to move it would move closer to the Chagos Islands as opposed to moving further away from them. This is not however correct. Both the Gifford/Dunne Analysis Note and Mr Jennesss report demonstrate that the passage removed from the draft executive summary remained in the body of the report: see E1330, citing passages from Part III which set out the same information as appeared in the draft about the effect of a small shift north in the cyclone belt. A second criticism addressed to the change at [A] relates to the addition of new sentences stating that As a consequence [of climate change], most islands will experience increased levels of flooding, accelerated erosion, and seawater intrusion into freshwater sources and that The extent and severity of storm impacts, including storm surge floods and shore erosion are predicted to increase. For the latter, it is said, There is no factual basis and it is not supported by a close reading of the body of the report. As to this, two points arise. First, both the draft and the final reports start by stating that the most significant and immediate consequences of climate change for the Chagos Archipelago are likely to be related to changes in sea levels, rainfall regimes, soil moisture budgets, prevailing winds and wave action. The statements in the final version that As a consequence most islands will experience increased levels of flooding, accelerated erosion, and seawater intrusion into freshwater sources and that the extent and severity of storm impacts, including storm surge floods and shore erosion are predicted to increase follow unsurprisingly from this initial sentence. Second, as to the criticism of lack of evidential support, no basis appears for doubting that these statements were fully endorsed, and if anything regarded as understated, by Dr Sheppard. Dr (now Professor) Sheppard was at the time Head of Biological Sciences at Warwick University, and was (unlike Mr Jenness, who was a resettlement anthropologist) an acknowledged expert on climate change and marine science in general and on BIOT in particular. He supported Posfords conclusions in this area and believed that they were, if anything, understated: see eg E2409, where on 14 May 2002 he commented on the draft report: Oceanographic, climate, groundwater and soils sections are scientifically sound (with some queries and revisions suggested). These broadly show that development in the islands is not sensible, long term nor sustainable (and may even become dangerous) for the first two development scenarios. See further E2461, where on 31st May Dr Sheppard noted, in relation to rainfall and recharging of the lenses and in view of changes to future rainfall projected by the Hadley Centres website, that the consequences to sustainable settlement numbers could be considerable; and E2519 to E2523 where in October 2002 he responded to Mr Jennesss criticisms of the final version, stating, in particular, that past lack of flooding, lack of erosion, steady temperature, are no guide at all to conditions from now on and that our climatic entry into the unknown is difficult to accept for those who are unversed in such matters, as seems to be the case with Jenness. (E2519) Dr Sheppard went on (E2520): The climate modelling section, which is the part which most effectively supports the notion that resettlement will be hazardous is the most criticised by Jenness. In fact the model is pretty rigorous and is probably correct. It does miss some detail, but its general tenet is almost certainly, unhappily for the Chagos islands, quite accurate, and fits well with climate modelling and predictions from many other sources. Again, Jenness is unaware just how much change is forecast. (If he is aware, he is writing propaganda, not a scientific critique.) If anything, it is clear that Dr Sheppard thought that Posford should have gone further. Thus at E2463 he is recorded as having advised on 31 May 2002 that following should be further addressed or resolved in the final report, viz Effects of sea level rise on the boundaries or depths of the lenses, especially in islands whose central parts are near sea level (two islands were levelled and this could be usefully incorporated). Posfords response was that The effects of sea level rise on the groundwater systems was not in the TOR for the groundwater section. As a further example, commenting on Mr Jenness views at E2522, Dr Sheppard records: Cyclones and Earthquakes Posford do go on a lot about cyclones and earthquakes, which is validly criticised by Jenness. Whatever weather changes will occur, cyclones (and certainly earthquakes) are not expected to change at all. Jenness is correct to say that Posford went overboard unjustifiably on this. (Posford should as was recommended to them have made more on sea level rise and warming, which is touched on, and would have been unassailable.) Dr Sheppards view about cyclones quite probably led to the removal of the reference to cyclones from the executive summary to the body of the text. The final bracketed sentence also speaks against any idea that Posford were engaged in a whitewash, or that the consultants were not acting independently. Dr Sheppard went on (E2522): Erosion and overtopping Jenness says that there is no need to defer any plans (for resettlement) before rates of island erosion are established. That is plain daft, unless all constructions are moveable. Jenness says that lack of overtopping damage in the past means that estimates of increased overtopping in future are exaggerated. The climate is changing, and the past is now no guide to the future in this respect. Jenness acknowledges elsewhere that climate change is occurring and that things may get worse. But he says that this is no reason to not develop. All that is needed is that development should use careful land use planning and management with strong components for costal management and reef health. What does he mean? This sweeps a huge issue (the issue) under the carpet. The only land which will be above projected flooding is a rim around part of most islands. He says it should not preclude resettlement of the Chagos in a prudently planned fashion. Where? A final quotation from Dr Sheppard reads (E2524): Jenness has much to say about the omissions on health, economics etc. Some are valid. But he really should go and stand on one of the islands, holding a copy of the islands profile above sea level, before he says Land loss may be inevitable and should be planned for. Loss of groundwater can be planned for . and . can be managed with modest investment. This may be true for, say 20 years. But beyond that we are talking here not about a little loss of a beach, but possibility of broaching of the rims and flooding of large inland areas. The upshot is in my opinion that there is no basis for regarding as suspicious or actually or potentially significant in any way either (a) the removal in the final version of paragraph 1.8 of the reference to the possibility of a small northward shift of the cyclone belt or (b) the inclusion of (i) a reference to increased levels of flooding, accelerated erosion and seawater intrusion into freshwater sources or (ii) the predicted increase in severity of storm impacts, including storm surge floods and shore erosion. I can take the other three key amendments, [B], [C] and [D] quite briefly. The first, a change in respect of future sea water level rises from a range of 2 9mm per year to an average of 5mm a year cannot conceivably be sinister or significant, or, if it had been known to or focused on by any decision maker, have led to a change in any ministerial decision. The second is a complaint that the draft executive summary referred to the general increase in storminess that may accompany climate change (E2397) while the final executive summary contained a paragraph starting Increased storminess (E2498). The Summary Note does not record that the latter paragraph continues the Chagos islands have a small storm surge envelope thus even small changes in sea level and storm surge height implies an increase in the area threatened with inundation. To my mind, there is therefore nothing in the difference. But, if there is, it is clear from Dr Sheppards views, already set out, that he would support the reported threat. The third and last point relates to a new paragraph noting that it is predicted that climate change may have a severe impact on the abundance and distribution of reef fish populations (E2499). The complaint is that the body of the report is expressed in more nuanced terms. Again, it is clear that Dr Sheppard took a clear view of the likely effects of climate change, and there is no reason to suspect that the final version represented anything other than a genuine prediction. Any difference in nuance should also have been apparent and, whether or not so, cannot conceivably support an argument that the minister acted irrationally in making the Orders he did on the basis of the final report. Heads (ii) and (iii) These two heads face in opposite directions. Both aim at undermining the stage 2B report. But head (ii) does so by relying on Dr Sheppard and his alleged endorsement of criticisms by Mr Jenness, the resettlement anthropologist instructed on behalf of Mr Bancoult to consider the stage 2B report in autumn 2002, while head (iii) suggests that Dr Sheppards input into the stage 2B report lacked objectivity and was unreliable. As to the latter suggestion, the applicant has through his representatives been prepared for a long time to cast wide ranging aspersions on a large number of people, including Dr Sheppard. But I do not think that they are made good, and that includes the suggestions that Dr Sheppard allowed his interest in preserving coral reefs to influence the advice he gave government. On the contrary, Dr Sheppard comes across in the material as a forthright and very independent character, not hesitating to comment bluntly on those working for government or for the applicant: see eg his email of 14 May at E2406, comments of 14, 30 and 31 May 2002 set out or reported at E2409 2422, E2450 2451 and E2460 2464 and further comments on Mr Jenness (some cited above) at E2518 2525. I also see no basis for regarding the stage 2B report as unreliable or for treating reliance on it as irrational in 2004, simply because Dr Sheppard had been the sole outside reviewer instructed by the executive, in addition to Mr Little, who had been appointed as FCO Feasibility Study Project Manager. As to the former suggestion, although Dr Sheppard agreed with aspects of Mr Jennesss report, it is apparent from his comments on that report which I have already set out that he disagreed fundamentally with any suggestion that Mr Jennesss report undermined the conclusions in the stage 2B report, and that he would himself have gone, if anything, further in discounting the risks of climate change that underlay those conclusions. Conclusion relating to the Rashid documents The essential issues, as summarised in Mr Fitzgerald QCs speaking note, are (i) whether due disclosure of the Rashid documents would have led to a challenge by Mr Bancoults representatives to the stage 2B report in the original judicial review proceedings, and, if so, (ii) whether it is likely that such a challenge would have resulted in a different outcome in the House of Lords on the rationality of the removal by the 2004 Constitution Order of the right of abode. The two questions are of course inter connected, since any decision whether or not to challenge the stage 2B report would have depended on an assessment of the prospects of such a challenge succeeding. As to the first question, some caution is in my view required before accepting outright the submission that it is certain that there would have been such a challenge. Mr Bancoults advisers had in December 2005 had disclosure of Mr Hamiltons extensive letter dated 23 May 2002 evidencing the nature of the FCOs involvement in and input into the process of re drafting and finalisation of the report (see paras 20 and 37 38 above). Mr Bancoults solicitors felt able, from January 2006 onwards, to make serious allegations about lack of independence of the stage 2B report as well as about allegedly significant alterations between the draft and final versions of the preliminary study from January 2006 onwards (see eg E1472 and E1487). Yet, at the same time, the applicant through Sydney Kentridge QC was expressly disclaiming before the Divisional Court any challenge to the study or its outcome: see E1482. Mr Bancoults advisers did not at that stage think they could or should even try to overcome the first hurdle. Further, they maintained this attitude for years, including after disclosure in October 2010 of the email dated 29 May 2002 (paras 21 and 39 40 above), despite continuing to make serious allegations in correspondence of lack of independence and invalidity. For present purposes, I am however prepared to assume without deciding that a challenge would have been made, and to proceed directly to a consideration of the second. In Mr Fitzgeralds formulation, that is whether it is likely that such a challenge would have resulted in a different outcome but in my judgment it makes no difference ultimately whether the test should be formulated at the slightly higher level of a requirement to show a probability that it would have done so or at the perhaps slightly lower level of whether it may well have done so. The second question reduces itself ultimately to a question whether it is probable or likely, or whether it may well be, that the material now available would have led the court (at whichever level the case was being considered) to conclude that it was irrational or unjustified for the Secretary of State to accept and act on the General Conclusions set out in the stage 2B report. Those were the General Conclusions on which the Secretary of State acted when making, and which the majority in the House of Lords regarded as justifying his decision to make, section 9 of the 2004 Constitution Order. In addressing this question, I proceed on the basis that it is necessary and appropriate to treat the Secretary of State, when deciding in June 2004 whether to make section 9 of the 2004 Constitution Order, as having available to him or within his knowledge all the contemporary material which in fact existed in the possession of the executive. That includes the draft report and all the exchanges taking place and advice received in the process of its redrafting and finalisation. Is it either probable or likely, or may it well be, that the court would have concluded that the material now shown to have been within the executives possession or knowledge at the relevant date in June 2004 undermines the rationality or justifiability of the Secretary of States decision to rely on such Conclusions? The answer in my opinion is clear. The General Conclusions, and the section on Vulnerability immediately preceding them remained unaltered from the draft to the final stage 2B report. There is no probability, likelihood or prospect (and, for completeness, in my view also no real possibility) that a court would have seen or would see, in the process of preparation, re drafting and finalisation of the stage 2B report and in the associated material which can now be seen to have existed, anything which could, would or should have caused the Secretary of State to doubt the General Conclusions, or which made it irrational or otherwise unjustifiable to act on them in June 2004. On that basis, the application to set aside the House of Lords judgment by reference to the Rashid and other documents disclosed late must fail. Additional evidence The first head consists of the Analysis Note. This, as its name indicates, consists essentially of an analysis of primary material and/or submissions on it. Its development has taken place over years starting originally it seems as early as 2006 and continuing up to at least 2012. We have it in various forms. It is not conceived or presented as evidence, though I have taken its contents into account in considering the parties respective cases and submissions on the material which is admissible and relevant. The second head consists of information provided by Mr Stephen Akester, who, after their chance meeting, wrote to Mr Gifford a letter dated 11 February 2011 explaining the role of his company, MEP, as a sub contractor to Posford. MEP was principally concerned with water resources and fisheries, and organised the site visit to the Chagos in early 2001. Mr Akester explains that his own experience was in regional development. In his letter, Mr Akester said that after the site visit, MEP reported and it appears provided Posford with the three development scenarios, after which Posford and he had no further involvement. But he explained: Because I and our team considered that resettlement was feasible, I prepared a draft of the different levels of development that would be appropriate to support such resettlement, given the fragility of the islands and bearing in mind that there had, in contravention of the normal practice of consulting potential settlers, been no consultation with the Chagossians themselves (this was excluded from our terms of reference). After submitting our report via PH to BIOT, I was surprised that we heard nothing further concerning the text of it either from PH or from BIOT. I was not invited to any further meetings with BIOT, did not receive any draft prior to its critique by BIOT on 23 May 2002, and heard nothing more about the terms of the report until the final Executive summary had been approved by BIOT and sent to me. By then, it was of course too late to make any further comments. We were therefore unable to modify the terms of the General Conclusion which I find to be wrong in its claim that resettlement involves obstacles which cannot be overcome by reasonable measures. Such issues are inherent in small island development and are regularly resolved within reasonable cost parameters. That Posfords sub contractor may have disagreed with conclusions drawn by Posford is a matter outside any conceivable sphere of information or knowledge that the Secretary of State or executive may be treated as having had at any material time. The material is thus correctly analysed as potential fresh evidence. But fresh evidence going to what issue? The ultimate issue is whether the Secretary of State was justified in acting as he did on the material which was or should have been available to him at the time, not whether his decision could be justified on a revisiting of the whole issue of resettlement in the light of any other material which either party could adduce now. In any event, the views expressed by Mr Akester in the letter dated 11 February 2010 cannot meet the test, however relaxed the terms in which this might be expressed, for setting aside the House of Lords judgment, even if they were material to any issue. I say this quite apart from the fact that, despite complaints regarding suggested lack of independence, no step was taken to set aside that judgment in the years following receipt of such letter, until after the Rashid documents had been disclosed. The third piece of evidence is a further review of the report, prepared for the applicant by Professor Paul Kench of the University of Auckland dated 5 October 2012. According to the applicants case: He concludes that not only were the findings of the ocean and coastal processes section in the feasibility study unsound, because of lack of specialist understanding and methodological flaws, but also that the relevant summary (section 1.6) in the Executive Summary was not supported by those findings. This conclusion casts grave doubt on the pivotal findings of the feasibility study with regard to increased risk of sea water flooding, which influenced the decision of the majority in the House of Lords Like the information in Mr Akesters letter, this material does not go to any issue relevant to the question whether the Secretary of State acted rationally in the light of the material to be treated as available or within his or the executives knowledge in June 2004. It would be relevant if the issue were whether the conclusions in the stage 2B report were sustainable today. But that is not the issue. I add for completeness that I am also unpersuaded that any good reason has been shown for not obtaining such an experts report at any time prior to the disclosure of the Rashid documents, having regard to the serious allegations of inadequacy and lack of independence of the report that were being made at such time, both before and after receipt of Mr Akesters letter dated 11 February 2010. The fourth piece of evidence is Posfords memorandum dated 7 March 2002, the information in which I am, for reasons already explained, prepared to take into account as material within the executives knowledge, but which does not persuade me that there is any basis for setting aside the House of Lords judgment. Other relevant considerations There is one other factor, which would have been both relevant and in my opinion decisive, had I reached a conclusion that the threshold test for setting aside was or might otherwise have been satisfied. The applicant submits that nothing other than a reversal of the House of Lords decision (in so far as it proceeded on the basis that the stage 2B report could be relied on) will overturn the constitutional bar on their return to the Chagos. But there has been a new 2104 2015 feasibility study, published by KPMG in March 2015, which assesses the risks differently from the prior report and finds that, at some cost and taking into account (for the first time) the possibility of resettlement on Diego Garcia itself (E925 926), there would be scope for supported resettlement: see E917 918. In practical terms, the background has shifted, and logically the constitutional ban needs to be revisited. As Mr Steven Kovats QC expressly accepted during oral submissions, it is open to any Chagossian now or in the future to challenge the failure to abrogate the 2004 Orders in the light of all the information now available. That is in my opinion a factor militating strongly against the setting aside of the House of Lords judgment and ordering a rehearing either of the whole appeal or of the limited issue whether it was rational for the Secretary of State to make the 2004 Constitution Order in the light of the material available to him or the executive generally in 2004. Even the latter issue could lead to further lengthy litigation and, quite possibly, a completely fresh hearing at first instance about a factually superseded study report. There has been a yet further development consisting of the declaration by the Secretary of State on 1 April 2010 of the Marine Protected Area (MPA) in the high seas surrounding the Chagos Islands. That declaration is the subject of a challenge by Mr Bancoult by way of judicial review in Bancoult (No 3). The challenge failed before the Divisional Court on 11 June 2013, [2013] EWHC 1502 (Admin), and before the Court of Appeal on 23 May 2014, [2014] EWCA Civ 708. It is now the subject of a combined application to the Supreme Court for permission to appeal and for a protective costs order without which it is said that it will not be possible to pursue any appeal. The Secretary of States notice of objection dated 6 February 2015 in respect of this application supports the Court of Appeals statement that the MPA (the only practical effect of which according to the Divisional Court was to prohibit commercial fishing in BIOT waters) had no meaningful or real effect at all on the economic, cultural or social development of BIOT, basically because there never had been commercial fishing there and there is no resident population in BIOT outside the US naval defence facility. Having said that, the notice goes on to state that: The MPA does not preclude resettlement in the event that Her Majestys government concludes that it is appropriate to permit and/or support resettlement of the islands. Whilst that decision is being considered in the light of an ongoing Feasibility Study commenced in January 2014 (and expected to be the subject of an imminent report by a panel of experts), the possibility of commercial fishing within the BIOT by a resident population is not realistic without resettlement and without a resident population. The Court of Appeal was right to note that it was therefore the prohibition on residential settlement on the BIOT which directly impacted upon the economic, social and cultural development of the BIOT. But that was not the decision that was under challenge in Bancoult (No 3). That decision was unsuccessfully challenged in Bancoult (No 2), culminating in a decision of the House of Lords These passages confirm that resettlement is not precluded by the MPA, if the outcome of the new KPMG feasibility study of the ensuing public consultation on resettlement options, and of the ongoing governmental policy review persuades the government that it is appropriate to permit and support resettlement. If the outcome of that study, consultation and review does not persuade the government, then Mr Bancoult will be able, in principle, to apply to challenge the governments refusal to permit and/or support resettlement as irrational, unreasonable and/or disproportionate, whichever may in context be the right test, by way of judicial review. If the MPA does prove to prejudice or limit the prospects of resettlement or the nature of any resettlement that may be permitted by the government or on judicial review by the Court, that will be a result of the MPA, which can only be avoided or removed by a successful challenge in the Bancoult (No 3) proceedings. Conclusion For all the reasons I have given, this application to set aside the House of Lords judgment and to direct a rehearing of the appeal to the House of Lords in Bancoult (No 2) fails in my opinion and must be dismissed. LORD CLARKE: I am in many ways sympathetic to the case advanced by Mr Bancoult. Indeed, I was a member of the Court of Appeal which decided the appeal in his favour. In these circumstances it is not perhaps surprising that I much prefer the reasoning of the minority to that of the majority in the House of Lords. It is however common ground that the question now before the court is not whether the majority were correct but whether the issue should be re opened. I have read the judgments of Lord Kerr and Lady Hale on one side and of Lord Mance, supported by Lord Neuberger, on the other. I have reluctantly concluded that Lord Mances analysis is to be preferred and that the application should be refused for the reasons he gives. One of the factors which has led me to that conclusion is that, as I see it, that is not the end of the road. I agree with Lord Mances conclusion in para 72 that there is a critical factor which is in any event conclusive. The background to much of the debate between the parties had been the feasibility of the Chagossians returning to the Chagos Islands. The 2014 2015 feasibility study considers, among other things, the possibility of resettlement on Diego Garcia. Given that new factor, the study concludes that there would be scope for supported resettlement. As Lord Mance puts it, the background has now shifted and logically the constitutional ban needs to be revisited. The outcome of the new (and ongoing) feasibility study will no doubt consider the prospects of resettlement. In the light of the results of the study the government will no doubt consider whether it is (as Lord Mance puts it at para 75) appropriate to permit and support resettlement. It was expressly accepted on behalf of the government that it will be open to any Chagossian to challenge the failure to abrogate the 2004 Orders in the light of all the information which is now available or becomes available in the light of the ongoing study. For example, it will, at any rate in principle, be open to Mr Bancoult to institute judicial review proceedings to challenge any future refusal of the government to permit or support resettlement as, in Lord Mances words irrational, unreasonable or disproportionate. In all these circumstances I do not think that it would be right now to set aside the judgment of the House of Lords and to direct a rehearing. It would be disproportionate to do so without having regard to the new circumstances taking into account the possibility of resettlement on Diego Garcia. LORD KERR: (dissenting) (with whom Lady Hale agrees) Introduction The Chagos Islands are in the middle of the Indian Ocean. Since the early 19th century they had been part of the British colony of Mauritius but they were detached from that country before Mauritius gained its independence in 1968. The islands consist of a group of coral atolls. The largest of these, Diego Garcia, has a land area of approximately thirty square kilometres. To the north of this are Peros Banhos (thirteen square kilometres) and the Salomon Islands (five square kilometres). In 1962 a Seychelles company acquired the coconut plantations on these three islands. The gathering of coconuts and the extraction and sale of the copra or kernel from them was the main form of employment for the inhabitants. After the acquisition of the plantations, it appears that the company exercised a paternalistic, even feudal, control of the islands affairs. Company officers acted as justices of the peace and generally administered most aspects of civilian life. Partly as a consequence of that, Chagossians had what might be considered to be a simple existence. They were largely illiterate and their skills were confined to those that the activities on the islands required. But it was an existence which they valued and, especially when contrasted with what transpired after 1971, one which was unquestionably worthwhile. Apart from indigenous inhabitants, some workers on the plantations came from Mauritius and the Seychelles. But the settled population of the three islands was some 1,000 in 1962. Many of the families which comprised that population had lived in the islands for generations. Their living conditions, although not at all affluent, were far from deprived. Every family had a house and some land. They grew vegetables on the land and kept poultry or pigs to supplement the imported provisions which the company supplied. Some fishing also took place. All who wanted to have and were capable of employment had a job. This was principally in the copra industry but employment was also to be had in construction, boat building and domestic service. The Chagossians therefore enjoyed what Lord Hoffmann (in R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No2) [2009] AC 453) described as a rich community life. World affairs were soon to interrupt that simple but rich community life. Events are well described in para 6 of Lord Hoffmanns speech: Into this innocent world there intruded, in the 1960s, the brutal realities of global politics. In the aftermath of the Cuban missile crisis and the early stages of the Vietnam War, the United States felt vulnerable without a land based military presence in the Indian Ocean. A survey of available sites suggested that Diego Garcia would be the most suitable. In 1964 it entered into discussions with Her Majestys government which agreed to provide the island for use as a base. At that time the independence of Mauritius and the Seychelles was foreseeable and the United States was unwilling that sovereignty over Diego Garcia should pass into the hands of an independent, non aligned government. The United Kingdom therefore made the British Indian Ocean Territories Order 1965 (the BIOT Order) which, under powers contained in the Colonial Boundaries Act 1895 (58 & 59 Vict c 34), detached the Chagos Archipelago (and some other islands) from the colony of Mauritius and constituted them a separate colony known as In 1966, in an exchange of notes between the British and United States governments, the United Kingdom agreed in principle to make BIOT available to the United States for defence purposes. Later in the same year it was agreed that a military base on Diego Garcia would be established and that the United States would be allowed to occupy the other islands if they wished. In 1967, the UK government bought all the lands held by the Seychelles company. Although the company was granted a lease which allowed it to continue to run the coconut plantations, it was stipulated that this would come to an end whenever the United States needed the islands. In 1970 the US government gave notice that it would need Diego Garcia in July 1971 and, acting under powers granted to him by the British Indian Ocean Territories Order 1965, the Commissioner for BIOT promptly made the Immigration Ordinance 1971. It provided (in section 4(1)) that no person shall enter the territory or, being in the territory, shall be present or remain in the territory, unless he is in possession of a permit [issued by an immigration officer]. Even before the making of this Ordinance, the UK authorities were active in preparing for the occupation of Diego Garcia by the United States. Between 1968 and 1971 they secured the removal of the inhabitants of the island, mainly to Mauritius and the Seychelles. A small population remained for a short time on Peros Banhos and the Salomon Islands, but they too were evacuated by the middle of 1973. The islanders were told that the company was closing down its activities and that unless they accepted transportation elsewhere, they would be left without supplies. In effect, therefore, although they were not forcibly removed, they were given no choice but to leave their homes. The Chagossians were resettled mainly in Mauritius. There they were largely left to their own devices. Since that country suffered high unemployment and considerable poverty, the conditions in which the displaced Chagossians were required to live, principally in the slums of St Louis, were miserable and squalid. It is now beyond question that their interests had not been considered by the British authorities to any extent. Indeed, one might say that the removal of the Chagossians from their homes was cynically engineered by ensuring that the Seychelles company could no longer continue its commercial activities and that the inhabitants means of livelihood was thereby brought to an inevitable end. As Lord Hoffmann put it (in para 10 of his speech), the removal and resettlement of the Chagossians was accomplished with a callous disregard of their interests. Legal proceedings In 1975 proceedings were issued by a former inhabitant of Diego Garcia, Michael Vencatessen, against the Foreign Secretary, the Defence Secretary and the Attorney General. Damages were claimed for intimidation and deprivation of liberty associated with the circumstances in which he had been required to leave Diego Garcia. In negotiations between the UK government and Mr Vencatessens advisers, the latter were treated as acting on behalf of all the Chagossians. An initial purported settlement of the claim failed to win the approval of the Chagossian community and negotiations resumed in which the Mauritius government was also involved. Finally in July 1982 it was agreed that the UK government would pay 4m into a trust fund for the Chagossians, set up under a Mauritian statute. The agreement was signed by the two governments in the presence of Chagossian representatives. It provided that individual beneficiaries should sign forms renouncing all their claims arising out of their removal from the islands. The vast majority of the displaced persons signed. Matters did not end there. On 30 September 1998 Mr Bancoult applied for judicial review of the Immigration Ordinance 1971 and a declaration that it was void because it purported to authorise the banishment of British Dependent Territory citizens from the Chagos Islands. He also sought a declaration that the policy which prevented him from returning to and residing in the territory was unlawful. The UK government reacted to these proceedings by commissioning an independent feasibility study to examine whether it would be possible to resettle some of the Chagossians on Peros Banhos and the Salomon Islands. Return to Diego Garcia was regarded as unfeasible because, under the arrangements made with the UK government, the United States was entitled to occupy that island until 2016 at least. On 3 November 2000 the Divisional Court (Laws LJ and Gibbs J) gave judgment in favour of Mr Bancoult: R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs [2001] QB 1067 (Bancoult (No 1)). An order was made quashing section 4 of the Immigration Ordinance 1971 as ultra vires. The government did not appeal this decision. Instead the Foreign Secretary issued a statement in which he referred to the feasibility study, Phase 2 of which was, he said, well under way. As a result of the courts judgment, the statement said, the feasibility of resettling the Chagossians took on a new importance and a new Ordinance allowing them to visit the outer islands would be made. On the same day that the statement was issued, the commissioner revoked the 1971 Immigration Ordinance and made the Immigration Ordinance 2000. This largely repeated the provisions of the previous Ordinance but contained a new section 4(3) which provided that the restrictions on entry or residence imposed by section 4(1) should (with the exception of Diego Garcia) not apply to anyone who was a British Dependent Territories citizen by virtue of his connection with BIOT. Some Chagossians visited the outer islands to tend family graves or to re familiarise themselves with the lands that they had been forced to leave. No one attempted to resettle there. Before the feasibility study was published, a group action was begun on behalf of the Chagossians. This claimed compensation and restoration of the property rights of the islanders and declarations of their entitlement to return to all the Chagos Islands and to measures facilitating their return. The action was taken against the Attorney General and other ministers. On 9 October 2003 Ouseley J in Chagos Islanders v Attorney General [2003] EWHC 2222 struck out this action on the grounds, inter alia, that the claim to more compensation after the settlement of the Vencatessen case was an abuse of process, and that the claims were in any case statute barred. An application for leave to appeal against that order was refused on 22 July 2004 (Dame Elizabeth Butler Sloss P, Sedley and Neuberger LJJ) [2004] EWCA Civ 997. The feasibility report was published in June 2002. Its findings were summarised by Lord Hoffmann in para 23 of his speech: It concluded that agroforestal production would be unsuitable for commercial ventures. So there could be no return to gathering coconuts and selling copra. Fisheries and mariculture offered opportunities although they would require investment. Tourism could be encouraged, although there was nowhere that aircraft could land. It might only be feasible in the short term to resettle the islands, although the water resources were adequate only for domestic rather than agricultural or commercial use. But looming over the whole debate was the effect of global warming which was raising the sea level and already eroding the corals of the low lying atolls. In the long term, the need for sea defences and the like would make the cost of inhabitation prohibitive. On any view, the idyll of the old life on the islands appeared to be beyond recall. Even in the short term, the activities of the islanders would have to be very different from what they had been. In light of the feasibility report the government decided that it would not support resettlement of the islands. In any event, in their perception, Diego Garcia would have to be excluded from any resettlement plans because of what was considered to be the UKs treaty obligations to the United States. Added to these considerations were reports of planned direct action by various groups who intended to launch landing expeditions to the islands. These factors combined to prompt the government to restore full immigration control. The British Indian Ocean Territory (Constitution) Order 2004 (the Immigration Order) was made. This included section 9 which provided: (1) Whereas the territory was constituted and is set aside to be available for the defence purposes of the government of the United Kingdom and the government of the United States of America, no person has the right of abode in the territory. (2) Accordingly, no person is entitled to enter or be present in the territory except as authorised by or under this Order or any other law for the time being in force in the territory. A challenge to the validity of section 9 by way of judicial review was made. The Divisional Court [2006] EWHC 1038 (Admin), paras 120 122 held that it was invalid because its rationality had to be judged by the interests of BIOT. That meant the people who lived or used to live on BIOT. The Court of Appeal (Sir Anthony Clarke MR, Waller and Sedley LJJ) [2008] QB 365 affirmed that decision but on somewhat different grounds. The Master of the Rolls and Sedley LJ held that there had been an abuse of power in enacting the 2004 Order because the interests of the Chagossians had not been taken into account. All three members of the Court of Appeal agreed that the Foreign Secretarys statement after the judgment in Bancoult (No 1) and the Immigration Ordinance 2000 constituted promises to the Chagossians which gave rise to a legitimate expectation that, in the absence of a relevant change of circumstances, their rights of entry and abode in the islands would not be revoked and there had been no such change. The Court of Appeals decision was appealed to the House of Lords and by a majority (Lord Hoffmann, Lord Rodger and Lord Carswell, Lord Bingham and Lord Mance dissenting) R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2009] AC 453 the appeal was allowed and the decision of the Court of Appeal was reversed. The present application By this application, Mr Bancoult, the respondent in the appeal before the House of Lords, seeks to have its decision set aside on the ground of material non disclosure. He claims that documents held by the defendant which should have been produced in the course of the earlier proceedings are likely to have made a significant difference to the outcome of those proceedings. Before examining that claim, it is necessary to say something about the various stages and phases that were planned for the feasibility study and how those stages and phases changed in the course of its progress. It will also be necessary to consider the opinions of the House of Lords before assessing whether disclosure of the documents is likely to have affected its decision. The various stages of the feasibility study and the process of disclosure The report on stage 1 of the feasibility study had been published in June 2000 just before the hearing of Bancoult (No 1). It was, the applicant claims, largely in favour of resettlement. It identified fishing as a major means of subsistence for a resettled population. Shortly after the Foreign Secretarys statement following the decision in Bancoult (No 1), the stages of the feasibility study were re named. Stage 1 was now referred to as the preliminary study. Phase 2A was to be a technical report on hydrogeological monitoring on the Salomon and Peros Banhos atolls. A more substantial Phase 2B was to be a general examination of some pre requisites to re settlement, prior to the full cost benefit analysis that was originally intended to come at stage 2 but which would now be a stage 3 of the report. Phase 2A, the hydrogeological survey, was started in 2001 but was never published as a separate report, its work being subsumed into Phase 2B. The latter phase was begun in late 2001 and completed in mid 2002. A report on it was published in July 2002. The full cost benefit analysis, contemplated as stage 3 was never carried out. Phase 2B reported that resettlement would be precarious and that its cost would be prohibitive. The government decided not to proceed with the planned stage 3 (the cost benefit analysis). It terminated consideration of resettlement, and introduced the 2004 Order prohibiting residence on the islands. Richard Gifford was a partner in the firm of solicitors which acted for Mr Bancoult in the litigation which culminated in the decision of the House of Lords. In advance of the hearing before the Divisional Court he sought disclosure of the drafts of the three phases of the feasibility study and of any comments made on these by officials. Correspondence was exchanged with the Treasury Solicitor in which the relevance of some of the material sought was disputed but it is unnecessary to review this. Comments on the draft of the preliminary study could not be located at first. They were then discovered and supplied. Mr Gifford claims that they revealed clear evidence of a crude re writing of the important General Conclusion from an entirely positive statement to a qualified one. It might be thought that since the document which is said to have prompted the 2004 Order was the report on the Phase 2B study, the re writing of the preliminary reports conclusion is of no particular importance. The fact that it was rewritten, however, when set against the now known position that there was extensive rewriting of the draft Phase 2B report may indicate a greater need for caution in examining the reasons for this rewriting. On 6 December 2005 the Treasury Solicitor had written to Mr Gifford stating that draft reports for the preliminary feasibility study and the Phase 2B study report had been located and were available for inspection. In a letter of 13 December, however, this statement was corrected and it was stated that only a draft of the preliminary study had been found. No draft for the Phase 2B report had been found. This was confirmed in a letter of 23 December 2005. During the hearing before the Divisional Court a number of inquiries were made by the judges of the defendant as to whether all relevant documents had been disclosed. The court was informed that if any further relevant documents were found these would be disclosed. Subsequently, on 3 February 2006, Mr Bancoults solicitor wrote to the defendant, specifically asking for the disclosure of all documents and materials which demonstrate and support your counsels assertion that resettlement of the Chagos Islands is not feasible. This was met with the response that the material was not relevant but, when the appeal against the Divisional Courts decision was pending, the UK Chagos Support Association asked for a copy of the draft of the Phase 2B report, and was informed by letter from the Foreign and Commonwealth Office on 6 October 2006 that no copy of the draft report had been retained on their files. This was confirmed on 9 November 2006, in response to a Freedom of Information request. The applicant claims that, faced with the absence of relevant documentation relating to the production and acceptance of the feasibility study, it was considered that a challenge to the reliability of the study could not be made. Counsel for the claimant in the Court of Appeal therefore stated that the governments entitlement to terminate the feasibility study after the Phase 2B report and to decline to support a return to the islands was not contested. In view of the appellants knowledge at that time, I do not consider that this was in any sense unreasonable. In any event, the stance taken by counsel did not make the feasibility study irrelevant to the case, however. The report remained relevant as being the alleged good reason relied on for not proceeding with resettlement and for denying Chagossians the right to return. But the challenge to the governments decision would have been, the applicant claims, of a very different stripe, if the existence of highly critical comments on the Phase 2B report had been known. Then the rationality of the decision not only not to fund resettlement but to deny Chagossians the right to return to the islands would have been strongly contested. That challenge would have been founded directly on the lack of reasonableness in relying on a report which was so obviously flawed and open to criticism. The existence of undisclosed documents first became known in the course of the hearing before the High Court of a case called R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 3) [2013] EWHC 1502 (Admin). That case concerned the creation of a no take marine protected reserve around the Chagos Islands on 1 April 2010. In those proceedings Mr Bancoult challenged the legality of the creation of the reserve. Exhibited to a witness statement filed on behalf of the Foreign Secretary (the defendant in the proceedings) was a bundle of documents. The statement to which the documents were exhibited was that of Zaqia Rashid, a solicitor in the Treasury Solicitors department. She observed that she produced the documents without comment as to the reasons that they had not been disclosed earlier. Before Ms Rashids statement in Bancoult (No 3) had been received, Mr Bancoult had made a number of freedom of information requests to the Foreign and Commonwealth Office concerning drafts of the feasibility reports. He was not satisfied with the replies that he received and lodged a complaint with Information Commissioner and a subsequent appeal to the First tier Tribunal General Regulatory Chamber Chagos Refugees Group (in Mauritius) v Information Comr (Case EA/2011/0030). The hearing of the appeal took place after the documents attached to Ms Rashids statement had been received and was therefore principally concerned with two memoranda which had not been included in those documents. It also touched on explanations given for the failure to disclose the documents, however. The Foreign Office explained that this was due to a combination of factors. There had been a clerical oversight in relation to some of these and a recall of archived material which was more rigorously reviewed in the course of the Bancoult (No 3) litigation led to others being disclosed. What have become known as the Rashid documents (ie those exhibited to Ms Rashid statement) contained a draft version of the executive summary of the Phase 2B feasibility study; and a covering letter from Posford (Royal) Haskoning (the consultants appointed to carry out the study) forwarding the remaining draft volumes. They also contained a number of documents generated during the preparation and finalisation of the feasibility study. These included (1) documents relating to the scope of work to be undertaken both for the first part of the original two stage study, later re named the preliminary study under the Phase 2A contract and under the Phase 2B contract; (2) a memorandum of a meeting between BIOT officials and the consultants; (3) correspondence between the FCO and an external scientific adviser in relation to the Chagos Archipelago, Dr Charles Sheppard; (4) correspondence between the Foreign Office and the consultants and (5) details of the amendments to the draft Phase 2B report. The House of Lords decision The appeal to the House of Lords from the Court of Appeals decision ranged over three principal areas, only one of which is relevant to this application. The first concerned the scope of the courts power to review the validity of an Order in Council legislating for a colony. What were described as the extreme positions adopted by the parties were both rejected by Lord Hoffmann. It had been argued on behalf of the government that no review of the making of an Order in Council was legally legitimate since this involved the exercise of a legislative power. On behalf of the Chagossians it was claimed that the right of abode in ones homeland was so sacred that the Crown did not have power to remove it in any circumstances. Lord Hoffmann decided that there was a power of review and that the main point in the appeal was the application of the ordinary principles of judicial review (para 52). The question whether there had been any contravention of those principles was the second principal area involved in the appeal and it is this ground which underpins the current application. I will consider it presently. The other two members of the majority, Lord Rodger and Lord Carswell, agreed with Lord Hoffmann on his rejection of the extreme positions of the parties on whether the government had power to make the Order. They also agreed that the courts had power to review the making of the 2004 Order on the normal judicial review grounds (paras 105 and 122). The third area of dispute was whether a legitimate expectation on the part of the Chagossians had been created by the Foreign Secretarys statement and the 2000 Ordinance. Lord Hoffmann held that this argument failed at the first hurdle that there had to be a promise which was clear, unambiguous and devoid of relevant qualification per Bingham LJ in R v Inland Revenue Comrs, Ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545, 1569. Lord Rodger and Lord Carswell agreed. In powerful dissenting speeches, Lord Bingham and Lord Mance concluded that the government did not have power by Order in Council to exclude the Chagossians from their homeland (Lord Bingham at para 71 and Lord Mance at para 160). They also held that the Foreign Secretarys statement and the making of the 2000 Ordinance created a legitimate expectation on the part of the Chagossians that they would be allowed to return to the outer islands unless or until the United Kingdoms treaty obligations might at some later date forbid it Lord Bingham at para 73. These findings and their conflict with the conclusions of the majority are not relevant to this application. The findings of Lord Bingham and Lord Mance in relation to the rationality of the decision to make the 2004 Order most certainly are, however. But before examining their reasons for determining that that decision was irrational, it is necessary to look at the speeches of the majority in order to see precisely why they considered that the charge of irrationality had to fail. The summary of the findings of the feasibility report contained in para 23 of Lord Hoffmanns speech has been set out above (para 16). This provided the backdrop to his examination of the issue of irrationality. Having accepted Sir Thomas Bingham MRs statement of principle in R v Ministry of Defence, Ex p Smith [1996] QB 517, 554, to the effect that where a measure affects fundamental rights or has profoundly intrusive effects, the courts will anxiously scrutinise the decision to introduce it, Lord Hoffmann said this at para 53: However, I think it is very important that in deciding whether a measure affects fundamental rights or has profoundly intrusive effects, one should consider what those rights and effects actually are. If we were in 1968 and concerned with a proposal to remove the Chagossians from their islands with little or no provision for their future, that would indeed be a profoundly intrusive measure affecting their fundamental rights. But that was many years ago, the deed has been done, the wrong confessed, compensation agreed and paid. The way of life the Chagossians led has been irreparably destroyed. The practicalities of today are that they would be unable to exercise any right to live in the outer islands without financial support which the British government is unwilling to provide and which does not appear to be forthcoming from any other source. During the four years that the Immigration Ordinance 2000 was in force, nothing happened. No one went to live on the islands. Thus their right of abode is, as I said earlier, purely symbolic. If it is exercised by setting up some camp on the islands, that will be a symbol, a gesture, aimed at putting pressure on the government. The whole of this litigation is, as I said in R v Jones (Margaret) [2007] 1 AC 136, 177 the continuation of protest by other means. No one denies the importance of the right to protest, but when one considers the rights in issue in this case, which have to be weighed in the balance against the defence and diplomatic interests of the state, it should be seen for what it is, as a right to protest in a particular way and not as a right to the security of ones home or to live in ones homeland. It is of course true that a person does not lose a right because it becomes difficult to exercise or because he will gain no real advantage by doing so. But when a legislative body is considering a change in the law which will deprive him of that right, it cannot be irrational or unfair to consider the practical consequences of doing so. Indeed, it would be irrational not to. Some observations can be made about this passage. In the first place it clearly implies that a decision to remove the Chagossians from their homeland with little or no provision for their future would indeed be a profoundly intrusive measure and one for which compelling justification would be required. And, of course, this is precisely what happened between 1968 and 1973. The Chagossians were removed. The islanders need to accept that removal must have been seen by them as a matter of survival. Whatever one might think of the argument that the evacuation of the islands was necessary (and, therefore, justified) in order to accommodate the American bases, it is impossible to defend the failure to ensure that the Chagossians were adequately housed and provided for in their new surroundings. In accordance with the standard set by Lord Hoffmann, the decision to remove the Chagossians without making adequate provision for them and their subsequent actual removal when that provision was not in place must therefore have been irrational when those events occurred. The fact that their removal, when it in fact occurred, was unreasonable cannot, in my opinion, be left out of account in assessing whether the subsequent decision to perpetuate the Chagossians exile was rational. I will give my reasons for that conclusion later. Secondly, it appears that Lord Hoffmann considered that the importance of the right to live in the outer islands, because it could not be fulfilled without financial help, was diminished because it was purely symbolic. This was a view strongly challenged in the speech of Lord Mance. In para 138 he said: [The wish of the Chagossians] for recognition of their historic connection, and on their case rights of abode, in relation to the Chagos Islands is deep felt, longstanding and, in my view, understandable. Arguments that any right of abode is symbolic, since it would be impracticable to exercise without expensive government support to which it is accepted that there is no right and which would not be forthcoming, in my view miss the point. If anything, they indicate that the right claimed could be recognised without this being likely to have any practical effect on the present state of the Chagos Islands. These islands (apart from Diego Garcia) appear to exist as an unspoilt nature paradise to which an increasing number of long distance yachtsmen venture to spend periods of months without noticeable disturbance to the operations of the United States base at Diego Garcia many miles away. This passage throws into sharp focus the question whether the practicability of fulfilment of an undeniable right affects its intrinsic worth. It also emphasises the need to look closely at the question whether it was necessary to deny the Chagossians the right to live on the outer islands in order to avoid responsibility for funding such an option. At a theoretical level at least, a clear distinction can be drawn between, on the one hand, a refusal to underwrite the costs of resettlement, and, on the other, depriving the Chagossians of the right to return to their homeland. If all that the British government wanted to avoid was paying for the cost of resettlement, why should it not simply say so? But the riposte to an argument that it was unnecessary to forbid return to the islands and that refusing to fund such a return was enough to achieve the governments aims might be that given by Lord Hoffmann himself. This was that to permit an unfunded return would merely assist in the campaign on which the Chagossians were embarked. In order to frustrate that campaign, it was necessary to remove from the Chagossians their right to return to the place where they and their ancestors were born and had lived. Lord Mance suggested (also in para 138 of his speech) that it had not been shown that that the Chagossians have been, in Bancoult (No 1) or the present proceedings, engaged in a mere campaign to obtain the UK government support for resettlement or to embarrass the United Kingdom and United States governments. Whether or not there was evidence from which to infer that there was such a campaign, it is clear from Lord Hoffmanns speech that the rationality of the decision to enact the 2004 Order depended crucially on its being shown that the conclusion that it was necessary in order to forestall a campaign by the Chagossians was not unreasonable. This is also clear from the speeches of Lord Rodger and Lord Carswell. At para 112, Lord Rodger said that the decision to legislate and to introduce immigration controls appears to have been prompted by the prospect of protesters attempting to land on the islands. And at para 132 Lord Carswell expressed his full agreement with Lord Hoffmann and Lord Rodger. Does the decision of the majority on the issue of irrationality preclude any re examination of the question of whether the right of the Chagossians to go and live where they were born was merely symbolic or, if it was, that its importance was thereby devalued? Is the second question set out above (whether the purpose of the Chagossians challenge was to advance a campaign to obtain financial support from the UK government and to embarrass the UK and US governments) forever settled by the decision of the majority? In my opinion, the answer to these questions is a conditional no. The conclusion that the decision to enact the 2004 Order could withstand the charge of irrationality was multi factorial. If it now transpires that one of the bases for that conclusion was reliance on information that has now proved to be wrong or incomplete, this inevitably reflects on the cogency of the other grounds on which the conclusion was based. The various reasons for a decision such as this are, of their nature, interlinked. They may also be interdependent. Weight given to one factor may be affected by the discovery that the weight given to another can no longer be sustained. If, therefore, it emerges that the decision on the feasibility of resettlement was reached on information that was plainly wrong or open to serious challenge and that it is at least distinctly possible that a different decision on that question would have been formed had the full picture been known, it seems to me that the rationality of the enactment of the 2004 Order should be re examined generally. Leaving that debate aside for the present, however, it is necessary to focus directly on the feasibility of a return to the islands and the various views expressed about that. Lord Hoffmanns summary of his conclusions (para 23 of his speech) on this question have already been discussed. He also relied on the written statement to the House of Commons on 15 June 2004 by the Foreign Office Under Secretary of State, Mr Bill Rammell, that in the light of the feasibility report it would be impossible for the government to promote or even permit resettlement to take place. Lord Rodger also relied on the contents of the feasibility report and Mr Rammells statement. At paras 112 and 113 he said this: 112. On 15 June 2004 a junior minister, Mr Rammell, made a written statement to Parliament. His good faith has not been impugned by the respondent. The statement shows that, in deciding to legislate to prevent people resettling on the outer islands, the government took into account the fact that the economic conditions and infrastructure which had once supported the way of life of the Chagossians had ceased to exist. Something new would have to be devised. The advice was that the cost of providing the necessary support for permanent resettlement was likely to be prohibitive and that natural events were likely to make life difficult for any resettled population. Human interference within the atolls was likely to exacerbate stress on the marine and terrestrial environment and would accelerate the effects of global warming. Flooding would be likely to become more frequent and would threaten the infrastructure and the freshwater aquifers and agricultural production. Severe events might even threaten life. The minister recorded that, for these reasons, the government had decided to legislate to prevent resettlement. Although he made no mention of it, the decision to legislate and to introduce immigration controls at that particular time appears to have been prompted by the prospect of protesters attempting to land on the islands. In addition, Mr Rammell said that restoration of full immigration control over the entire territory was necessary to ensure and maintain the availability and effective use of the territory for defence purposes. He referred to recent developments in the international security climate since November 2000 when such controls had been removed. 113. The ministerial statement indicates that a decision to legislate was taken on the basis of the experts (second) report on the difficulties and dangers of resettling the islands these difficulties and dangers being dangers and difficulties which would affect the Chagossians themselves, if they were to try to live on the outer islands. Given the terms of that report alone, it could not, in my view, be said that no reasonable government would have decided to legislate to prevent resettlement. In particular, the advice that the cost of any permanent resettlement would be prohibitive was an entirely legitimate factor for the government which is responsible for the way that tax revenues are spent to take into account. In addition, the government had regard to defence considerations, the views of its close ally, the United States, and the changed security situation after 9/11. These additional factors reinforce the view that the decision to legislate was neither unreasonable nor irrational. Although Lord Rodger noted that factors other than those outlined in the experts second report were in play, it is clear from these paragraphs that he acknowledged that the report was the principal influence in the governments decision. He identified a number of features from it as being of particular importance: 1. the cost of permanent resettlement was likely to be prohibitive; 2. natural events would make life difficult for the inhabitants; 3. stress on the marine and terrestrial environments would be aggravated; 4. the effects of global warming would be increased; 5. flooding was likely to become more frequent and fresh water supplies and agricultural production would be endangered; and 6. severe events might even threaten life. By any standard, these were anticipated consequences of considerable moment. Lord Carswell also relied heavily on the report. At para 121 he said that it was quite clear that resettlement was wholly impracticable without very substantial and disproportionate expenditure. The practical difficulties in the way of resettlement were in his view relevant to the rationality of the governments decision. The claims made for the rationality of the decision to introduce the 2004 Order were forthrightly rejected in a lucid and strong passage of Lord Binghams speech. At para 72 he said: section 9 was irrational in the sense that there was, quite simply, no good reason for making it. (1) It is clear that in November 2000 the re settlement of the outer islands (let alone sporadic visits by Mr Bancoult and other Chagossians) was not perceived to threaten the security of the base on Diego Garcia or national security more generally. Had it been, time and money would not have been devoted to exploring the feasibility of resettlement. (2) The United States government had not exercised its treaty right to extend its base to the outer islands. (3) Despite highly imaginative letters written by American officials to strengthen the Secretary of States hand in this litigation, there was no credible reason to apprehend that the security situation had changed. It was not said that the criminal conspiracy headed by Osama bin Laden was, or was planning to be, active in the middle of the Indian Ocean. In 1968 and 1969 American officials had expressly said that they had no objection to occupation of the outer islands for the time being. (4) Little mention was made in the courts below of the rumoured protest landings by LALIT. Even now it is not said that the threatened landings motivated the introduction of section 9, only that they prompted it. Had the British authorities been seriously concerned about the intentions of Mr Bancoult and his fellow Chagossians they could have asked him what they were. (5) Remarkably, in drafting the 2004 Constitution Order, little (if any) consideration appears to have been given to the interests of the Chagossians whose constitution it was to be. (6) Section 9 cannot be justified on the basis that it deprived Mr Bancoult and his fellows of a right of little practical value. It cannot be doubted that the right was of intangible value, and the smaller its practical value the less reason to take it away. Now, it is true that none of the reasons outlined in this paragraph touches on the question of feasibility as such but they provide a powerful and, in my view, unanswered case for rejecting the claim that the decision to introduce the 2004 Order was rational unless it could be shown that the feasibility argument was so strong as to outweigh it. This is crucial. If significant doubt could have been cast on the claims made in relation to feasibility, then the case for the government that its decision was rational would have been thrown into considerable disarray. Lord Mance was unimpressed by the use of the feasibility report as a basis for denying the Chagossians their fundamental right of abode in their homeland. At para 168 he pointed to the central incongruity of using a report published in 2002 to justify the enactment of the 2004 Order, two years later and to the circumstance that the government had been found to be under no legal obligation to fund resettlement: The report is in fact dated 28 June 2002, so the BIOT Order 2004 was enacted two years after the report, and nine months after Ouseley Js decision that the government had no duty to fund resettlement, although a month before the Court of Appeal finally refused permission to appeal against that decision. In the absence of any legal obligation to fund resettlement, the prospective cost of doing so appears to me (as it did to Sedley LJ in the Court of Appeal: para 71) an unconvincing reason for withdrawing any right of abode and any right to enter or be present in BIOT. The Secretary of State notes in his written case that, even in the absence of any legal obligation to fund resettlement (and although the United Kingdom has made clear its determination to resist any suggestion that it should provide such funds on a voluntary basis), there could be public and political pressure claiming that the United Kingdom should provide funding for the cost of resettlement. That is not a reason articulated at the time or supported by any reference in the written case. The logic of this reasoning is, in my opinion, irresistible. At its height, the feasibility report spoke to the impracticability of resettlement and the inordinate cost of funding any attempt by the Chagossians to resettle in their homeland. But it had been held that the government was under no legal obligation to fund a resettlement. As a justification for denying the fundamental right of abode in the country of ones birth, therefore, the report could be relied on only to forestall public and political pressure on the United Kingdom that the government should meet what the feasibility report said was the inordinate cost of resettlement. Quite apart from the consideration that, as Lord Mance pointed out, this was not a reason proffered by the government either by way of explanation of the reason for the 2004 Order or in its written case, this was a heavy burden for the report to bear. It was not enough that it be shown that the cost was exorbitant or that resettlement was impracticable; these had to be so great that the risk of the government coming under pressure to meet the cost and permit resettlement was such that the Chagossians had to be refused the right to return to their traditional home. Against that background, any reservations about the veracity of the claims made in the report assume an unmistakable significance. Unless the report was compelling and irrefutable in its conclusions, its capacity to act as the sole justification for the denial of such an important right was, at least, suspect. Many criticisms of the reliability of the Phase 2B feasibility study have been made on behalf of the applicant. These have included examination of 1. the approach of the consultants to their task; 2. the editorial control exercised by the FCO; 3. the avowedly misleading representation that the consultants acted wholly independently; 4. the alterations to the terms of reference of the preliminary study; 5. the criticisms made of the scientific value of the Phase 2B report; and 6. the changes to the text of the report. Many documents prepared to support the applicants case have been submitted. While I have read and closely considered all of these, I do not find it necessary or helpful to set all of them out in any detail. What follows is a summary of the principal matters to emerge from all this material which are pertinent to the central issue to be determined viz whether this appeal should be re opened. The draft preliminary report and some of the changes made to it An examination of the background to the Phase 2B report must begin with the preliminary stage report. As mentioned (para 102 above) Mr Gifford claimed that there had been a crude rewriting of the conclusion of this report from the version in the original draft. In its original conception the feasibility study was intended to comprise two stages, the first of which was to see whether settlement appears possible and environmentally acceptable (with an estimate of the numbers who might wish to return to the outlying islands). Consultants delivered a draft report in May 2000. The principal conclusion was contained in para 5.1.1: The conclusion of this preliminary study is that there is no obvious physical reason why one or both of the two atolls should not be repopulated, by the sort of numbers (up to or around one thousand) of Ilois [Chagossians] who are said to have expressed an interest in re settlement. Carrying capacity is largely a function of the nature of economic activity which accompanies re settlement, and its capability of financing the necessary amount of resources to ensure adequate supplies of water and to minimise the environmental impact. It was recognised that further feasibility studies would have to be undertaken and so the draft report continued at para 5.1.13: If a decision is taken to examine further the feasibility of re settlement, the next stage of the feasibility study should be largely concerned with examining the technical, financial, economic and environmental aspects of specific development proposals put forward by groups of islanders who are serious about re settlement and who have proper financial and technical backing for their proposed enterprises. When the report reached its final form, there was a notable alteration to the principal conclusion. In the published version it read in para 5.1: The conclusion of this preliminary study is that resettlement of one or both of the two atolls is physically possible, but only if a number of conditions are met. These include confirmation that: the nature and scale of settlement will not a sustainable and affordable water resource can be developed; damage the environment; and basic services; and one or more private investors are willing to develop viable enterprises which can generate sufficient incomes to pay for the investment and recurrent costs of re settlement. public money is available to finance infrastructure Taken on its face, this change may not appear especially significant. But, apart from the difference in language and structure, it had incorporated as essential pre conditions matters which the draft report had indicated should be the subject of further study and investigation. Again, however, this may betoken no more than a recognition of a need for caution about future planning. It is perhaps on this account that these changes did not feature to any great extent in the presentation of Mr Bancoults case at any of the stages of the proceedings which ended in the appeal to the House of Lords. In light of changes to and criticisms of the draft Phase 2B report, it may be that greater importance should be attached to them and that they could be regarded as heralding a reluctance on the part of the government to countenance any return of the Chagossians to Peros Banhos and the Salomon Islands. Certainly, it is not difficult to conclude that such an argument would have been made, had the criticisms of the draft Phase 2B report and the changes made to it been known. What would have been made of such an argument is now perhaps difficult to say but the fact that it could have been but was not advanced should weigh in the balance as to whether the decision of the House of Lords should be set aside. The draft Phase 2B report and the criticisms made of it In his statement to the House of Commons Mr Rammell had said that the government had commissioned a feasibility study by independent experts to examine and report on the prospects for re establishing a viable community in the outer islands of the territory. While it is strictly true that the consultants were independent, the terms of reference for the study made it clear that the BIOT government (for convenience, in the next sections this will be referred to as BIOT) retained the right to see and comment on a draft of the final report. In particular, para 6.3 of the terms of reference for Phase 2B of the study provided that a draft final report, containing a report of the work done, conclusions and recommendations, had to be submitted to BIOT within four months of the assignment starting. After BIOT received the draft, it was then able to make comments on it and it was only after these had been received that the final version of the report would be published. All of this might be regarded as, if not standard government practice, at least not untoward. But the applicant suggests that the way that the procedure in fact operated in this case robbed the final report of any claim to true independence. He claims that when the extent of the widespread changes to the draft originally submitted became known (after the Rashid documents became available) what might have appeared as a wholly independent report took on a very different complexion. It is further suggested that this conclusion is reinforced by a consideration of the contents of a memorandum of a meeting between on 6 March 2002 between Alex Holland of the consultants, Alan Huckle (head of the Overseas Territories Department and BIOT Commissioner), Louise Savill (BIOT Administrator) and Brian Little (FCO Feasibility Study Project Manager). This followed 21 days of field work in Peros Banhos and the Salomon Islands. A progress report covering the period from 25 January to 28 February 2002 was considered at the 6 March meeting. This report laid down the future work programme, with draft reports from individual consultants due at Posford Haskoning by 22 March 2002, followed by submission of the entire first draft to BIOT on 31 March 2002. The memorandum of this meeting was prepared by Ms Holland. In it she recorded Mr Huckle as saying: The FCO had hoped that Phase II would negate the need for Phase III, ie if it concluded that resettlement wasnt feasible. The comment is then made, realistically, that was never likely to be the outcome. Lord Mance has stated at para 33 that there is no suggestion that the FCO was inviting changes to bolster any sort of findings or conclusions in either the draft and the final report, and no basis for regarding Posford as susceptible to any such invitation. It is true that there is no record of an explicit invitation to bolster or change findings. But it is telling that the memorandum recorded that FCO is hoping that the section on climate change will resolve its difficulties. In my view, while these statements might be supposed not to entirely undermine the subsequent findings of the consultants, it is clear that the consultants were being given an unmistakable steer as to what FCO wanted the outcome of the report to be and, inevitably, whatever one might think about Posfords susceptibility to suggestions, this at least raises questions about the independence and impartiality of the judgment that the consultants ultimately made. Those questions in turn play into the validity of the scientific analysis made by the consultants. The Executive Summary of the draft report was received by BIOT in the week beginning 8 April 2002. The remaining sections of the draft arrived on 15 April. On 24 April 2002 Charles Hamilton (who had just succeeded Louise Savill as BIOT Administrator) asked Dr Charles Sheppard (a tropical marine ecologist at Warwick University who had extensive previous work experience in the Chagos) to carry out a peer review of the consultants report. This was provided on 14 May 2002. Dr Sheppard wrote an email to accompany his report. In this he excoriated some parts of the consultants work. Some sections of the report were, he said, quite hopeless. These related principally to the resources section. Importantly, however, Dr Sheppard endorsed the consultants conclusions on the practicability of resettlement largely on account of anticipated climatic conditions. The consultants views on this were, Dr Sheppard said, supported by emerging science connected with tropical science generally. It might therefore be said that on the central issue which influenced the majority in the House of Lords, viz whether resettlement was a feasible option, the consultants assessment was essentially supported by Dr Sheppard. The applicant points to a more general criticism voiced by Dr Sheppard, however. This, he says, is bound to have prompted his advisers to mount a wholesale and direct challenge to the methodology and reliability of the feasibility report generally. In this connection, the applicant relies particularly on a sharp criticism of the report by Dr Sheppard in the following strongly worded terms: the present Posford report should not in my view be released in its present form; some of its science would be badly savaged by anyone not happy with your conclusions, and so, by implication, could some of the conclusions themselves. The claim that if this comment had been known by the applicants advisers, it would have led to a more direct challenge to the feasibility report must be approached with caution in light of the fact that the applicant had engaged a resettlement anthropologist, Jonathan Jenness. He was asked to conduct a review of the feasibility report primarily to provide input on the resettlement issues which were excluded from the Phase 2B study, but Mr Jenness also made some strong criticisms of the claimed conclusions of the study, without knowing how those conclusions had been arrived at. Mr Jenness report was submitted to FCO. The applicant and his advisers were unaware that it had been subjected to a critique by Dr Sheppard until FCO wrote to his solicitors on 2 December 2002 enclosing Dr Sheppards report. He challenged and criticised a number of Mr Jenness conclusions but he said that many of his points about the inadequacies and errors in the Posford report were valid. There must be some doubt, however, that Dr Sheppards acknowledgment that parts of Mr Jenness criticisms of the feasibility study were sound would have led to a markedly different strategy on the part of Mr Bancoults advisers, not least because of the astringency of Dr Sheppards other observations on Mr Jenness report. Whether disclosure of Dr Sheppards critique of Mr Jenness would have led to a different conclusion by the majority in the House of Lords calls for rather more subtle consideration, however. As I have said, the essential issue for the House of Lords was whether the cost of resettlement was so exorbitant or that resettlement was so impracticable that the risk of the government coming under pressure to meet the cost and permit resettlement was such that the Chagossians had to be refused the right to return to their traditional home. It seems to me that, in light of Dr Sheppards general criticisms of the consultants report and his endorsement of some of Mr Jenness disparagement of it, it is at least questionable that such heavy reliance would have been placed by the majority on its conclusions. Alterations made to the draft Phase 2B report The draft report contained a supremely important passage at the second part of para 1.8, which was originally included in the section on resettlement. It reads: the most significant and immediate consequences of climate change on a resettled population within the Chagos Archipelago are likely to be related to changes in sea levels, rainfall regimes, fresh water resources, soil moisture budgets, prevailing winds (direction and speed) and short term variation in regional and local patterns of wave action. At present the Chagos archipelago lies just north of an active cyclone belt, however, a small northward shift of this belt could lead to frequent cyclones in the area. This would lead to more frequent flooding of the islands, with corresponding risk to life and any infrastructure. It would also reduce agricultural potential and the freshwater contained within the island aquifers would experience higher levels of salinity. (emphasis added) The final version of the report in the equivalent section was in the following terms: The most significant and immediate consequences of climate change for the Chagos Archipelago are likely to be related to changes in sea levels, rainfall regimes, soil moisture budgets, prevailing winds and short term variation in regional and local patterns of wave action. As a consequence most islands will experience increased levels of flooding, accelerated erosion, and seawater intrusion into freshwater sources. The extent and severity of storm impacts, including storm surge floods and shore erosion are predicted to increase. Although the risks associated with climate change are not easily established the implications of these issues to resettlement in the outer atolls of the Chagos Archipelago are outlined briefly below (emphasis added). The most obvious and significant points to be made about these two passages is in (i) the transformation of a conditional forecast of frequent flooding etc, predicated on a possible northward shift of the active cyclone belt, into a firm prediction that these and other consequences will occur; (ii) the omission of any reference to the cyclone belt in the final version; and (iii) the new wording in the final version predicting an increase in storm surge floods and shore erosion unconnected with cyclones. A new sentence has been added stating that [t]he extent and severity of storm impacts, including storm surge floods and shore erosion are predicted to increase. No evidence was provided to support the assertion contained in this sentence. The significance of translating the prediction of possible consequences of climate changes into a positive statement that these will occur lies, of course, in the impetus that it gives to the notion that there really was no practical means of resettling the islands. As it happens, there is no evidence that these consequences have begun to materialise even now, although that may not be taken into account on the issue of whether the application to re open the appeal should be allowed. But the essential message of the final report that these consequences would occur cannot but have influenced the decision of the majority of the House of Lords that the perceived need to enact the 2004 Order was not irrational. It is one thing to say that it is rational to forbid Chagossians to return to their homeland if the dire consequences that were spoken of were going to occur. It is quite another to say that it was reasonable if it was merely possible that they might happen. The jurisdiction to set aside a decision of the House of Lords and the test to be applied It is possible, at least theoretically, to distinguish between the question whether this court has jurisdiction to set aside a decision of its predecessor and the test to be applied in deciding whether to do so. In practice, however, these concepts overlap because the jurisdiction tends to be defined in terms of the conditions which justify its invocation. In R v Bow Street Metropolitan Stipendiary Magistrates, Ex p Pinochet Ugarte (No 2) [2000] 1 AC 119, 132D, Lord Browne Wilkinson said: In principle it must be that your Lordships, as the ultimate court of appeal, have power to correct any injustice caused by an earlier order of this House. There is no relevant statutory limitation on the jurisdiction of the House in this regard and therefore its inherent jurisdiction remains unfettered. In Broome v Cassell & Co Ltd (No 2) [1972] AC 1136 your Lordships varied an order for costs already made by the House in circumstances where the parties had not had a fair opportunity to address argument on the point. There is likewise no relevant statutory limitation on the jurisdiction of this court. And its inherent jurisdiction must comprehend the right to correct an injustice caused by an earlier order made by it or however such injustice arises. This point was made by Lord Hope, delivering the judgment of the panel in R (Edwards) v Environment Agency (No 2) [2011] 1 WLR 79 where he said at para 35: The Supreme Court is a creature of statute. But it has inherited all the powers that were vested in the House of Lords as the ultimate court of appeal. So it has the same powers as the House had to correct any injustice caused by an earlier order of the House or this court. It would however be more consistent with the principle which Lord Browne Wilkinson described to say that the power is available to correct any injustice, however it may have arisen Of course, in this context, what is meant by injustice is the critical issue. Providing a comprehensive definition of the circumstances in which it would be appropriate to exercise this jurisdiction is impossible but one can begin with the uncontroversial statement that it must be sparingly invoked. Lord Browne Wilkinson was careful to make that point in emphatic terms. At 132E of Pinochet he said: it should be made clear that the House will not re open any appeal save in circumstances where, through no fault of a party, he or she has been subjected to an unfair procedure. Where an order has been made by the House in a particular case there can be no question of that decision being varied or rescinded by a later order made in the same case just because it is thought that the first order is wrong. By wrong in this connection one may safely assume that Lord Browne Wilkinson had in mind a conclusion that the earlier courts decision was, in the minds of the subsequent panel, one which should not have been reached on the particular facts and legal issues before it. So it is not sufficient to show that the earlier decision was wrong in that sense. But is it necessary to show that, not only was a party subjected to an unfair procedure but that a wrong decision was thereby procured? On one view, the statement in the earlier passage quoted above, that the jurisdiction should be invoked to correct any injustice might indicate this, for how could an injustice occur if the outcome of the proceedings would have been the same in any event? But Lord Browne Wilkinsons later reference to Broome v Cassell (No 2) suggests that the jurisdiction is not so confined. This appears to indicate that where parties have not had a fair opportunity to address argument on a relevant point, an injustice, sufficient to animate the jurisdiction, is present. The question remains, however, whether it is a necessary prerequisite that the earlier decision would not have been, or is likely not to have been, reached, if the defect in procedure or other irregularity had not occurred. The applicant has accepted that it must be shown that the non disclosure probably had, or may well have had, a decisive effect on the outcome. This concession was based largely on Court of Appeal jurisprudence. The respondent agreed with the applicants formulation of the appropriate test. In Taylor v Lawrence [2002] EWCA Civ 90; [2003] QB 528, it was held that the Court of Appeal could re open proceedings which it had already heard and determined if it was clearly established that a significant injustice has probably occurred and that there is no alternative effective remedy. It is apparent that significant injustice in that case connoted an actual injustice (in the form of an adverse result which should not have occurred), although, as it happens, no such injustice was held to have happened there. A tangible injustice in the form of the probably wrong outcome was considered to be necessary. This approach was followed in Feakins v Department of the Environment, Food and Rural Affairs [2006] EWCA Civ 699. After Taylor v Lawrence was decided, CPR 52.17 headed Re opening of Final Appeals was promulgated on 6 October 2003. It provided: The Court of Appeal . will not re open a final determination of any appeal unless it is necessary to do so in order to avoid real (a) injustice; (b) appropriate to re open the appeal; and (c) there is no alternative effective remedy. the circumstances are exceptional and make it No such provision exists in the Supreme Court Rules. Obviously, there will customarily be no alternative effective remedy where the decision that is sought to be re opened is one of the Supreme Court. Should the approach of this court be the same as that otherwise indicated in this provision? For reasons earlier given, the power to re open should be invoked sparingly and the need for exceptional circumstances is unobjectionable. The requirement that the circumstances are such as to make it appropriate to re open the appeal is somewhat general and rather begs the question, when is it appropriate that the appeal should be re opened. This is an issue on which, I think, it is quite impossible to be prospectively prescriptive. It seems to me, therefore, that the truly important condition in CPR 52.17 is that the re opening of an appeal should be necessary in order to avoid injustice and that this is the touchstone which this court should adopt as a guide to when this exceptional course should be followed. Does real injustice involve a conclusion that the circumstance which prompts the application to re open the appeal probably had, or may well have had, a decisive effect on the outcome? I am content to say that this should normally be required. But I enter two caveats to that proposition. In the first place, it may not always be possible to forecast that such a decisive effect would probably or might well accrue. In that event, I would not preclude in every circumstance the possibility of a re opening of the appeal. The second possible exception to the general rule might arise where the behaviour of the party whose failure to place before the court relevant material was so egregious that, even if it was not considered likely that the outcome of the appeal would be affected, it would nevertheless be appropriate that the appeal be re opened in order to demonstrate that all pertinent information had been fully considered and that due process had been followed. Neither situation arises here. I am satisfied, therefore, that it is incumbent on the applicant to show that if the material in the Rashid documents had been available to the House of Lords they would have had, or may well have had, a decisive effect on the outcome of the appeal. I am entirely satisfied, however, that it is enough that it be established that there is a real possibility that a different outcome would have occurred had the information been available at the time of the original hearing. How could it be otherwise? If it is shown that it is distinctly possible that a party might have achieved a different result had relevant material been available to it, I cannot understand how it could be said that that party has not suffered an injustice by being denied the material and thereby being denied the opportunity of securing the outcome that they sought. If I might have persuaded the court that it should reach a different view if I had material that could have influenced that view, have I not suffered an injustice by being deprived of that chance? Of course I have. To the extent that Taylor v Lawrence and Feakins v Department of the Environment, Food and Rural Affairs suggest otherwise I emphatically disagree with them. It is, therefore, my firm belief that it is not necessary to show that it was probable that a different outcome would have been brought about; it is enough that there exists a distinct possibility that this would be so. Furthermore, the formulation whether it was irrational or unjustified for the Secretary of State to accept and act on the General Conclusions does not focus on the essential issue here. It was not simply a question of the Secretary of State accepting the conclusions; it was a matter of using those conclusions as a basis for denying a right of abode to the Chagossians solely in order to deter a campaign by the Chagossians to be allowed to return to their homeland. The House of Lords was not addressing in the abstract the question of the rationality or justifiability of the Secretary of States decision to rely on such conclusions (Lord Mance in the final sentence of para 64). What it was about was an examination of the sufficiency of his reliance on those reasons as a basis for denying the Chagos Islanders entitlement to return to live in their homeland, when there was no question of any legal obligation on the part of the government to fund that return. It is therefore, I am afraid, not enough to say that there was nothing in the re drafting and finalisation of the stage 2B report which could, would or should have caused the Secretary of State to doubt the General Conclusions or which made it irrational or otherwise unjustifiable to act on them in June 2004 Lord Mance para 65. The critical issues were the nature of the action taken and the background against which it occurred. It might not be irrational to accept the conclusions of the report but that, with respect, is simply not the point. The question is whether it was rational to deny these islanders their fundamental right to live where they and their ancestors were born for the sole reason of seeking to avoid a potentially embarrassing campaign that the British government should put right the callous disregard that had been shown them when they were effectively forced from the islands between 1968 and 1973. The House of Lords was not merely considering whether it was reasonable for the Secretary of State to accept the reports findings. The rationality challenge was to the action that he took, having accepted those findings. In the knowledge that the British government was not under any legal obligation to fund resettlement and that the most it had to fear was a campaign by the islanders that they be allowed to return home and that the government should facilitate that, the minister decided that they should be denied their right of abode in their homeland. That is the true nature of the rationality challenge. And that is why (as I explain at para 165 below) that it is necessary to recognise how severe the challenge to justify the 2004 Order truly was. When that central truth is confronted, it becomes clear how any doubt on the authority of the report was likely to or certainly should have caused the majority of the panel to question the rationality of the decision. And that is why there is, at the very least, a distinct possibility that there would have been a different outcome. Would the Rashid documents have had, or may they well have had a decisive effect? In my view the principal relevant documents exhibited to Ms Rashids statement were: 1. the memorandum of the meeting of 6 March 2002 in which the governments hopes for the outcome of the feasibility study were made clear; 2. Dr Sheppards critique of the draft Phase 2B report; 3. Dr Sheppards endorsement of some of Mr Jenness criticism of the feasibility study; 4. The draft Phase 2B report which, when contrasted with the final report, illustrated the distinct change in emphasis in the prediction of climate changes, especially since these bore directly on the question of the feasibility of resettlement. In deciding whether the disclosure of these documents before the appeal was heard by the House of Lords would or might well have had a decisive effect on the outcome, one must keep closely in mind the real issue on rationality. This was whether it was rational to deny the Chagossians the right to return to their homeland in order to deflect or prevent a campaign that the UK government should fund resettlement costs. The issue was not whether it would be reasonable for the government to meet those costs. It had been decided that there was no legal obligation on them to do so. It could not, therefore, be sought to justify the decision to introduce the 2004 Order on the basis that it was not reasonable that the UK government should have to fund the resettlement costs. The government did not need to defend a decision that it would not pay for resettlement. It had been told by a court that it was not legally obliged to do so. What motivated the decision to categorically forbid the Chagossians the right to go back to live in their homeland was an anticipated campaign that might have been politically embarrassing for the government. When this apprehended harm is pitted against the importance of the right to be denied, it is not difficult to recognise how severe the challenge to justify the 2004 Order truly was. People were told that they could not go back to live where they and their ancestors had lived. Moreover, that denial took place against a background that they had been evacuated from the islands in circumstances which were plainly unjustified. When the decision came to be made in 2004 whether they should be allowed to return to live in the outlying islands, the fact that their removal from them had been organised with callous disregard of their interests was a plainly relevant circumstance. It could not have been properly left out of account by a conscientious decision maker. There is no evidence that regard was had to that factor. Irrespective of whether it was or not, however, the circumstances in which the Chagossians were originally removed from their homeland rendered any subsequent decision to refuse to allow them to return all the more difficult to justify. If the Rashid documents had been before the House of Lords, the following matters would have had to be squarely confronted: the draft report had to be submitted to BIOT officials who had the (i) despite the claims for their independence, the consultants had been told in unequivocal terms what the government hoped would be the outcome of their report; (ii) opportunity to approve or require amendment of its contents; (iii) much of the science of the report (although not that relating to climatic changes) had been severely criticised by Dr Sheppard; (iv) many of the criticisms of the report by Mr Jenness had been endorsed by Dr Sheppard (even though he was also extremely critical of Mr Jenness); (v) most importantly, the draft reports central findings in relation to climate change, couched in conditional terms, had been altered to provide a firm prediction that such changes would take place. In my view, the collective effect of these revelations is that the appeal might well have been decided differently. The passages from the speeches of the majority which have been quoted earlier, for perfectly understandable reasons, bear no trace of reservation or doubt as to the anticipated consequences of any attempt to resettle the islands. If the members of the House of Lords knew that much of the science of the report was considered to be suspect by the scientist retained by the FCO; that the consultants had been given a clear indication of what the government hoped the report would deliver; that the changes to the conclusions of the preliminary study (which were known) proved to be a mild herald of the more radical changes to the Phase 2B report; that the Chagos Islands were not in an active cyclone belt and that this had a direct bearing on the predictions contained in the report, is it likely that the speeches of the majority concerning the anticipated consequences of an attempt to resettle would have been expressed in such emphatic terms? In my judgment it is not. And if the majority felt compelled, as it surely would, to recognise the lack of certainty in some of the central predictions, is it likely that they would have been prepared to hold as rational a decision to completely deny the Chagossians the right to return to their homeland, simply because a failure to do so would give rise to a campaign that the government should fund resettlement, when it had already been held that they were under no obligation to do so? In my opinion, it is at least distinctly possible that a different view would have been taken by the majority and that the outcome of the appeal would have been different. I would therefore grant the application to re open the appeal. Other matters (i) New evidence The applicant sought to introduce new evidence which, he claimed, would show that the dire consequences which the feasibility study predicted have not in fact materialised and were, in any event, highly suspect from the start. Four species of evidence were involved: (i) a comprehensive analysis of the Phase 2 feasibility study based on a comparison of the original draft disclosed in the Rashid documents with the final published version of the study and on other information contained in the documents. This was prepared by Richard Gifford and by a coral reef scientist, Richard Dunne; (ii) information provided to the applicant by Stephen Akester, who was one of the members of the team which prepared the feasibility study. Mr Akester stated that he did not agree with the conclusion of the feasibility study that resettlement was not feasible, and that he was not consulted about the finalisation of the original draft of the study. It is claimed that he was the only member of the team of consultants the only person with direct experience of re settlement on small coral atolls; (iii) a review of the feasibility study, prepared by Professor Paul Kench, of the University of Auckland, New Zealand, dated 5 October 2012. He concluded that not only were the findings of the ocean and coastal processes section in the feasibility study unsound, because of lack of specialist understanding and methodological flaws, but also that the relevant summary in the executive summary was not supported by those findings. This conclusion, it was claimed, cast grave doubt on the pivotal findings of the feasibility study especially in relation to increased risk of sea water flooding; (iv) the written note of 6 March 2002, referred to in para 138 above. It is not open to an applicant for a re opening of an appeal to adduce evidence solely for the purpose of retrospectively impeaching the decision of the court whose judgment he seeks to have reviewed. This would, in effect, allow an appeal against the decision based on information acquired for the purpose of undermining the judgment. An application to re open an appeal must be based on the contention that if the original appeal had been conducted in the way that it ought to have been, it is probable or at least distinctly possible that there would have been a different outcome. On this account, much of the material which the applicant seeks to introduce is not admissible, irrespective of whether it complies with the conditions which should be met, based on the principles of Ladd v Marshall [1954] 1 WLR 1489, for the introduction of fresh evidence. In truth, an application to re open an appeal will rarely, if ever, be the occasion for an application to introduce fresh evidence in the conventional meaning of that term. The essence of an application to re open an appeal, in so far as it relates to evidence, is that evidence which should have been before the original court was not. For this reason, I consider that none of the so called items of evidence in the first three categories above is admissible. The memorandum of 6 March 2002, by contrast constitutes material which ought to have been disclosed before the Divisional Court hearing. If it had been, I consider that it would unquestionably have featured in that and subsequent proceedings in the case, bearing, as it undoubtedly did, on not only the independence of the consultants but also on the result that the Foreign Office hoped to obtain from the feasibility study. (ii) The paucity of the peer review of the feasibility study and Dr Sheppards impartiality It was argued on behalf of the applicant that, in light of the range of subjects covered by the feasibility study, a professional peer review of the draft study, carried out by up to six specialists was essential. Unique reliance on the expertise of Dr Sheppard, whose specialism is coral reef ecology, was insufficient to give the report the authority that it required. There is nothing in this point. If the rationality of deciding to introduce the 2004 Order depended at all on the robustness of the peer review of the feasibility study, this point could have been made during the earlier proceedings. But, in any event, while it may be good practice to have a comprehensive peer review of a report such as the feasibility study, that is a very far cry from saying that it was irrational to rely on the study in the absence of such a review. It was suggested that Dr Sheppards input into the revision of the draft of the feasibility study was mainly composed of criticisms of those parts of the study which tended to suggest that resettlement was feasible. Thus in his input to the final version he described the natural resources sections, which suggested a variety of ways in which natural resources could be exploited to provide a livelihood for the islands as dismal, while stating that the oceanographic, climate, groundwater and soils sections were scientifically sound. This, it was claimed, reflected the fact that Dr Sheppard was well known to be strongly dedicated to [the] conservation [of coral reefs] and it was therefore questionable whether he could reasonably be regarded as an objective assessor of a study on the issue of reintroducing human settlement to the pristine and now deserted environment which he was so committed to protecting. Even if one was prepared to take these highly contentious and untested claims at their height, they fall very far short of showing that taking Dr Sheppards views into account in deciding to introduce the 2004 Order was irrational. The applicant does not dispute that Dr Sheppard was a well recognised expert in his field. The suggestion that he might have allowed his interest in preserving coral reefs to influence the advice that he gave to the government is, at best, speculative. I consider that this argument is without merit. Is the application moot? The respondent has argued that events occurring since the decision of the House of Lords and a further review of the feasibility of resettlement render this application unnecessary. In July 2013 the respondent announced that a new feasibility study would be carried out. The terms of reference for this study were published on 31 January 2014. The new study was to consider a range of options for the re settlement of BIOT, including not just the outer Chagos Islands but also Diego Garcia where the United States military base is located. These developments do not render the re opening of the appeal of merely academic interest. If the original judgment of the House of Lords is not set aside, the starting point for all future consideration of the resettlement issue will be that section 9 of the Constitution Order is valid, and that the removal of the Chagos Islanders right of abode was lawful. If it proves that there would have been a different outcome in the appeal before the House of Lords if the material from the Rashid documents had been before their Lordships, it would obviously not be right that the position concerning the Chagossians right to return to their homeland, recognised first by the Divisional Court, should not be retrospectively vindicated, with whatever legal consequences that this might entail. Lord Mance in para 72 and Lord Clarke in para 78 of their judgments have characterised as conclusive the consideration that the 2014/5 feasibility study takes into account the possibility of resettlement on the islands, including Diego Garcia. They both suggest that the background has now shifted and that the constitutional ban needs to be revisited. With respect, whatever the outcome of the 2014/5 feasibility study, it cannot be right to suggest that this is relevant to a decision whether the appeal should be re opened, much less that it is conclusive of that issue. The fallacy of the suggestion can be demonstrated in this way: let us suppose that timeous disclosure of the Rashid documents would have led the House of Lords to a different conclusion on the question of the rationality of the decision to make the 2004 Orders. Could it seriously be suggested that the appeal should not be re opened because of the possibility that the Chagos Islanders might be allowed to resettle in entirely different circumstances and for completely different reasons than those which underlay the original decision? What is the juridical basis on which such a conclusion might be made? Is it an instance of the exercise of judicial discretion to deny a remedy to which the applicant is otherwise plainly entitled? For such a result, it would be necessary to demonstrate that the applicant would achieve the same result as would accrue on the successful re opening of the appeal. Alternatively, it might be suggested that there are occasions where it is appropriate for a court to take a pragmatic view and dispose of a case in a particular way because of a new factual context. Quite apart from the unfortunate imprecision of such an approach, it must surely only be permissible when the particular disposal allows the court to achieve justice in the changed circumstances. Given the narrowness of the issue before the Supreme Court on this appeal, taking account of changed circumstances in the Chagos Islands does not achieve justice. We are not in a position to make an order that vindicates the applicants right to resettle on Diego Garcia or elsewhere on the archipelago. The suggestion that we need not re open this appeal because of the possibility that the 2014/5 feasibility study would permit resettlement depends on (a) the government changing its stance as a result of the study; failing which (b) the applicant or others of like mind having the appetite to bring forward yet further litigation, despite the unhappy previous experience of past proceedings; (c) their being able to secure the services of lawyers prepared to work for them pro bono or on some other uncertain basis; and (d) the courts deciding in favour of the Chagossians in that speculative litigation. Even if it could be said that a favourable outcome of the 2014/5 feasibility study is possible, the Chagossians ability to obtain the result that the original appeal, if successful before the House of Lords, would have achieved is remote in the extreme. That this should provide a basis for denying them an outcome to which they were otherwise entitled is in my view inconceivable. The respondent has claimed that there was undue delay in making the application to re open the appeal. I do not consider that there is any merit in that claim. The Rashid documents were disclosed on 1 May 2012, in the course of the Bancoult (No 3) proceedings. The applicant sought to raise the issue of their non disclosure in those proceedings. He was not permitted to do so. It was held that the feasibility study had not played a part in the decision to create a marine protected area paras 81 to 93 of judgment given on 11 June 2013. That decision was appealed to the Court of Appeal, and judgment was given in the Court of Appeal on 23 May 2014 ([2014] EWCA Civ 708; [2014] 1 WLR 2921). The applicant then sought to resolve the matter by inviting the respondent to agree that the judgment in the present action should be set aside by consent. This request was made in a letter dated 5 December 2013. It was refused on 5 January 2014. Counsels opinion was obtained on 26 January 2014 and legal aid was applied for immediately. It was eventually granted on 29 September 2014. There is no suggestion that the applicant was in any way responsible for delay between the submission of the application for legal aid and its grant. The application form was filed on 9 January 2015. There was no culpable delay on the part of the applicant. Duty of candour A respondents duty of candour in judicial review proceedings is summarised at p 125 of Fordhams Judicial Review Handbook (Sixth Edition 2012): A defendant public authority and its lawyers owe a vital duty to make full and fair disclosure of relevant material. That should include (1) due diligence in investigating what material is available; (2) disclosure which is relevant or assists the claimant, including on some as yet unpleaded ground; and (3) disclosure at the permission stage if permission is resisted. A main reason why disclosure is not ordered in judicial review is because courts trust public authorities to discharge this self policing duty, which is why such anxious concern is expressed where it transpires that they have not done so. In R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs [2002] EWCA Civ 1409 at para 50 Laws LJ said, There is a very high duty on public authority respondents, not least central government, to assist the court with full and accurate explanations of all the facts relevant to the issue which the court must decide. The duty extends to disclosure of materials which are reasonably required for the court to arrive at an accurate decision Graham v Police Service Commission [2011] UKPC 46 at para 18. The purpose of disclosure is to explain the full facts and reasoning underlying the decision challenged, and to disclose relevant documents, unless, in the particular circumstances of the case, other factors, including those which may fall short of public interest immunity, may exclude their disclosure R (AHK) v Secretary of State for Home Department (No 2) [2012] EWHC 1117 at para 22. The Rashid documents should have been disclosed. That is accepted by the respondent. They contained material that was obviously germane to the issues between the parties. The fact that they were not disclosed, despite numerous pointed requests for their production and the circumstance that, in some instances, their very existence was denied are deeply disturbing. The failure to locate the documents throughout the proceedings before the Divisional Court, the Court of Appeal and the House of Lords is not merely unfortunate, it is plainly reprehensible. But I am not persuaded that the non production of the documents until the hearing in Bancoult (No 3) was deliberate. The applicant has accepted as much, having said in his written case that the non disclosure of the documents may conceivably have been due to an oversight. I believe that the preponderance of evidence suggests that this is the most likely explanation, although it was a grievous oversight and one which, it is to be hoped, will be so regarded by the relevant authorities. An omission by government to disclose such material as was contained in the Rashid documents and its failure thereby to discharge its duty of candour was wholly unacceptable when such a fundamental right was at stake. The applicant has suggested that, in light of the seriousness of the failure to disclose these documents and in view of their high relevance, judicial criticism will not suffice and that the decision of the House of Lords should be set aside on account only of their non disclosure. I do not agree. If there are circumstances in which a failure to disclose documents would alone be cause for setting aside a judgment, they are not present here. For the reasons earlier given, however, I consider that the decision should be set aside and the appeal re opened. LADY HALE: (dissenting) This is another chapter in the epic saga of the Chagossians, their expulsion from their homeland and their persistent attempts to secure, if not their actual return, then at least the recognition of their right to do so. It is a saga which shows how the imperial common good is riven by competing theoretical justifications for empire: one, based in liberal imperialism, emphasises the civilising nature of empire and focuses on the good governance of colonies; the other, based in a utilitarian imperialism, instead focuses on how best to appropriate colonial possessions for the benefit of the imperial power (T Frost and CRG Murray, The Chagos Island cases: the empire strikes back (2015) 66 NILQ 263, 266). Thus far, it is the latter which has not only driven the actions of government but has also triumphed in the courts: Lord Hoffmann acknowledged that a choice between the liberal and utilitarian faces of imperialism did rest with the court, and decisively affirmed the utilitarian importance of the imperial interests at stake (Ibid, 287). Courts have, of course, to do justice according to law. Any doubts about whether it is legally possible for the imperial power to exile a people from their homeland have to be rigorously suppressed. That question of law has been finally resolved in these proceedings by the decision of the majority in Bancoult (No 2). Nevertheless, the decision to exile a people has to be taken in accordance with the law; and the people to whom it is of such momentous importance are entitled to expect the highest standards of decision making and the most scrupulous standards of fairness from the institutions of imperial government. The challenge in the main proceedings is to the rationality of the decision in 2004 to re impose the denial of the Chagossians right of abode in their homeland, the first denial in 1971 having been declared unlawful in Bancoult (No 1), a decision which was accepted by the government of the day. The challenge in this application is to the decision of the majority in Bancoult (No 2) that the governments decision was rational. The question for the appellate committee, as Lord Kerr has explained, was not whether it was rational to accept the conclusions of the feasibility study, but whether, on the basis of that report, it was rational to take the drastic decision to re impose the denial of the right of abode. The question for us is not whether the majority got the answer to that question wrong. We could no more set that decision aside on that basis than we could set aside their decision that the imperial government had the power to do this. The basis upon which this court could set aside the earlier decision is that explained by Lord Browne Wilkinson in R v Bow Street Metropolitan Stipendiary Magistrate, Ex p Pinochet Ugarte (No 2) [2000] 1 AC 119, 132D: In principle it must be that your Lordships, as the ultimate court of appeal, have power to correct any injustice caused by an earlier order of this House. However, it should be made clear that the House will not re open any appeal save in circumstances where, through no fault of a party, he or she has been subjected to an unfair procedure. When an order has been made by the House in a particular case there can be no question of that decision being varied or rescinded by a later order made in the same case just because it is thought that the first order is wrong. The previous decision in that case was set aside because of Lord Hoffmanns connection with an intervener in the case. He should not have decided the case without that connection being disclosed to the other parties. The House did not therefore have to consider whether his participation made any difference to the result (although, given that the earlier decision had been reached by a majority of three to two and that at the re hearing a rather different decision was reached, there was surely a very real possibility that it did). I accept that, even if it has power to do so, this court should not set aside a decision reached after an unfair procedure if the result would inevitably have been the same had the procedure been fair. However, if it is clear that the procedure was unfair, this court should not struggle too hard to discover that the result would have been the same. It is for the court which rehears the case to reach its own conclusions. The parties are entitled to procedural as well as substantive justice. It is a proud feature of the law of judicial review of administrative action in this country that the public authority whose actions or decisions are under challenge has a duty to make full and fair disclosure of all the relevant material. Only if this is done can the court perform its vital role of deciding whether or not those actions or decisions were lawful. There is no doubt in this case that the Rashid documents should have been disclosed. They were obviously relevant to the issues in the case. Not only that, the government was asked for them many times and denied their existence. This is scarcely a good advertisement for the quality of government record keeping. No doubt files are sometimes transferred to the Treasury Solicitor for litigation purposes and their existence forgotten. But this should not happen in any well regulated system of file keeping. It was deeply unfair to the applicant, and to the court, that these documents were not disclosed. This was all the more unfair, given the sorry treatment of the Chagossians in the past and the importance of what was at stake for them. Given that context, this court should not take much convincing that their disclosure might have made a difference to the decision in the case. What light they do cast upon the rationality of the decision under challenge will be a matter for the court which does reconsider the case. To my mind, it is quite obvious that they might have made a difference and we certainly cannot be satisfied that they would not. They showed that the science of the report had been severely criticised both by the governments own expert and by an expert on behalf of the islanders; it matters not in what direction those criticisms had tended; what they did was cast doubt upon the authority of the report. They showed that the government had made it plain to the consultants what it wanted the conclusions to be. They showed that important changes had been made to the conclusion. They showed that the central findings about climate change had been changed. They showed that the islands were not in a cyclone belt. The question whether this might have made a difference has to be answered objectively rather than by reference to the particular judges who were then sitting on the case. Ultimately, this is a case about justice. While I deeply admire the industry and intellectual honesty of Lord Mance, which has led him to the conclusion that the decision with which he disagreed at the time should not be set aside, for the reasons given by Lord Kerr, with which I agree, I would grant this application. Justice to my mind demands that the applicant be given a fair chance to satisfy this court that the decision to re impose the denial of the islanders right of abode was not a rational one.

The Chagos Islands are otherwise known as the British Indian Ocean Territory (BIOT). In 1962 they had a settled population of 1,000. In 1966 the UK Government agreed to allow the USA to use the largest of the Chagos Islands, Diego Garcia, as a military base. Pursuant to this arrangement, the Commissioner for BIOT made the Immigration Ordinance 1971 (the Ordinance). Section 4 of the Ordinance made it unlawful for a person to be in the BIOT without a permit and empowered the Commissioner to make an order directing that persons removal. Between 1968 and 1973 the UK Government procured the removal and resettlement of the Chagossians by various non forceful means. In 2000 the appellant, Mr Bancoult, obtained a High Court order quashing section 4 of the Ordinance. The then Foreign Secretary announced that he accepted this decision, such that the prohibition on the resettlement of BIOT was lifted. He also announced that work on the second stage of a feasibility study into the resettlement of the former inhabitants would continue. The second stage of the feasibility study was published in 2002. Part B (the 2B report) concluded that the costs of long term inhabitation of the outer islands would be prohibitive and life there precarious. In 2004 Her Majesty by Order in Council made the BIOT Constitution Order (the 2004 Order) which introduced a new prohibition on residence or presence in BIOT. In 2008, the appellants challenge to the 2004 Order by judicial review was dismissed by a majority of 3 (Lord Hoffmann, Lord Rodger and Lord Carswell) to 2 (Lord Bingham and Lord Mance) in the House of Lords (R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61) (the 2008 judgment). In separate litigation concerning the Governments declaration of a Marine Protected Area (MPA) around BIOT, the respondent in 2012 disclosed certain documents relating to the drafting of the 2B report (the Rashid documents). The appellant seeks to set aside the 2008 Decision on the grounds that (i) the Rashid documents cast doubt on the reliability of the 2B report and should, pursuant to the respondents duty of candour in public law proceedings, have been disclosed prior to the 2008 judgment, and (ii) four heads of new evidence have come to light, constituting independent justification for setting aside the 2008 judgment. In 2014 15 a new feasibility study concluded that, assuming for the first time possible re settlement of Diego Garcia itself, scope existed for supported resettlement of BIOT (the 2014 15 study). The Supreme Court dismisses the appeal by a majority of 3 to 2. Lord Mance gives the majority judgment, with which Lord Neuberger agrees. Lord Clarke gives a separate judgment, concurring with Lord Mance. Lord Kerr gives a dissenting judgment, with which Lady Hale agrees in a separate dissent. The Supreme Court has inherent jurisdiction to correct injustice caused by an unfair procedure which leads to an earlier judgment or is revealed by the discovery of fresh evidence, although a judgment cannot be set aside just because it is thought to have been wrong on points unrelated to such procedure or evidence [5, 154, 190]. The authorities indicate as the threshold for setting aside a previous judgment whether a significant injustice has probably occurred in case of non disclosure or whether there is a powerful probability of significant injustice in case of fresh evidence. But Lord Mance leaves open the possibility of the egregiousness of the procedural breach and/or the difficulty of assessing its consequences militating in favour of a lower threshold, and considers the application on that basis too [8]. An applicant must also show that there is no alternative effective remedy [6]. As to the non disclosure, the essential questions are (i) whether due disclosure of the Rashid documents would have led to a challenge by Mr Bancoults representatives to the 2B report in the original judicial review proceedings, and, if so, (ii) whether it is likely that such a challenge would have resulted in a different outcome to the 2008 judgment [61]. Assuming without deciding that (i) was satisfied, Lord Mance concludes as to (ii), after reviewing the 2008 judgment [16 19] and the Rashid documents [20 64], that there is no probability, likelihood, prospect or real possibility that a court would have seen, or would now see, anything which could, would or should have caused the respondent to doubt the conclusions of the 2B report, or made it irrational or otherwise unjustifiable to act on them in June 2004 [65]. As to the alleged new evidence, the first head consists essentially of analysis and submissions which the majority takes into account, the second and third heads consist of material outside the respondents knowledge at the relevant times and neither they nor the fourth provide any basis for setting aside the 2008 judgment [66 71]. Even if the threshold for setting aside were crossed, circumstances have changed in the light of the 2014 15 study and/or governmental confirmation that the MPA does not preclude resettlement [72 75]. It is now open to any Chagossian to mount a fresh challenge to the failure to abrogate the 2004 orders in the light of the 2014 15 studys findings, as an alternative to further lengthy litigation and quite possibly a fresh first instance hearing about the factually superseded 2B report. [72 76, 78 79]. Lord Kerr, with whom Lady Hale agrees, would have set aside the 2008 Decision. Although the appellant accepted that it must be shown that the non disclosure probably had, or may well have had, a decisive effect on the outcome [155], Lord Kerr would have held that it is enough for there to be a real possibility that a different outcome would have occurred had the information been available at the time of the original hearing [160 163]. The Rashid documents might well have caused the 2008 Decision to be different [168, 193]. Lord Kerr disagrees with the majority that the conclusions of the 2014 2015 feasibility study render the present application moot. The mere possibility that the Chagossians might be allowed to resettle is insufficient. It would be necessary to demonstrate that they would achieve the same result as would accrue on the successful re opening of the appeal [179]. Moreover, there is no question of pragmatic justice being done here as the Supreme Court in this appeal is unable to vindicate the appellants right to resettle in the BIOT [180].

On 27 July 2016, following a hearing of this appeal, this court referred a number of questions of EU law to the Court of Justice for a preliminary ruling: Secretary of State for the Home Department v Vomero [2016] UKSC 49; [2017] 1 All ER 999. On 17 April 2018 the Court of Justice delivered its judgment: FV (Italy) v Secretary of State for the Home Department (Joined Cases C 424/16 and C 316/16) [2019] QB 126. In the light of that judgment, and the opinion of Advocate General Szpunar, this court held a further hearing of the appeal on 7 February 2019. It is now in a position to give its decision on the appeal. The facts The respondent, Franco Vomero, is an Italian national born on 18 December 1957. On 3 March 1985 he moved to the United Kingdom with his future wife, a UK national. They were married in the UK on 3 August 1985 and had five children here, for whom Mr Vomero cared, in addition to working occasionally, while his wife worked full time. Between 1987 and 2001 Mr Vomero received several convictions in the UK, two of which (in 1991 and 1992) resulted in short terms of imprisonment. In 1998 the marriage broke down. Mr Vomero left the family home and moved into accommodation with Mr Edward Mitchell. On 1 March 2001, Mr Vomero killed Mr Mitchell. Both men had been drinking, a fight ensued and Mr Vomero struck Mr Mitchell at least 20 times on the head with weapons including a hammer, and then strangled him with electrical flex from an iron. Mr Vomero was arrested on 2 March 2001 and remanded in custody until his trial. The jury reduced the charge of murder to manslaughter by reason of provocation. Mr Vomero was on 2 May 2002 sentenced to eight years imprisonment. He was released on licence on 3 July 2006 but re arrested a short time later as no hostel accommodation was available for him. He was subsequently detained under immigration powers. By decision made on 23 March 2007 and maintained on 17 May 2007, the appellant, the Secretary of State, determined to deport Mr Vomero under regulations 19(3)(b) and 21 of the Immigration (European Economic Area) Regulations 2006 (SI 2006/1003). Regulation 19(3)(b) permits the Secretary of State to deport a national of the European Economic Area (EEA), or a family member of an EEA national, where the persons removal is justified on the grounds of public policy, public security or public health. Any such deportation must be in accordance with regulation 21. The latter regulation gives effect to articles 27 and 28 of Council Directive 2004/38/EC of 29 April 2004 (OJ 2004 L158, p 77) (the Directive), which are set out below. Mr Vomero challenged that decision before the Asylum and Immigration Tribunal. The decision of that tribunal was appealed to the Court of Appeal, whose decision ([2012] EWCA Civ 1199; [2013] 1 WLR 3339) has given rise to the present appeal. The proceedings were twice adjourned pending the determination of other cases, including latterly the references in Onuekwere v Secretary of State for the Home Department (Case C 378/12) [2014] 1 WLR 2420 and Secretary of State for the Home Department v MG (Portugal) (Case C 400/12) [2014] 1 WLR 2441. Mr Vomero was detained with a view to deportation until December 2007. He subsequently committed and was convicted of further offences, two of which resulted in custodial sentences. In January 2012 he was convicted of having a bladed article, battery and committing an offence while subject to a suspended sentence. He was sentenced to 16 weeks imprisonment. In July 2012 he was convicted of burglary and theft and was sentenced to a further 12 weeks imprisonment. In summary, therefore: (1) From 1985 to 2001 Mr Vomero lived in the UK, with convictions from time to time which resulted in short periods of imprisonment during 1991 and 1992. (2) From March 2001 to July 2006 he was in prison for manslaughter. (3) The decision to deport him was made in March 2007, less than nine months after his release from prison, by which time he had entered immigration detention. (4) Subsequently he was convicted again and served further short sentences during 2012. The court has no information before it as to Mr Vomeros circumstances since 2012. The Directive In Chapter III of the Directive, entitled Right of residence, articles 6 and 7 specify the conditions under which Union citizens and their family members have rights of residence in a member state other than that of which they are nationals. Under article 6, entitled Right of residence for up to three months, Union citizens have the right of residence on the territory of another member state for a period of up to three months without any conditions or formalities other than the requirement to hold a valid identity card or passport. Under article 7, entitled Right of residence for more than three months, Union citizens have the right of residence on the territory of another member state for a period of longer than three months if they meet one of the conditions set out in para 1, including if they (a) are workers or self employed persons in the host member state. In Chapter IV, entitled Right of permanent residence, article 16 states: 1. Union citizens who have resided legally for a continuous period of five years in the host member state shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III. 2. Paragraph 1 shall also apply to family members who are not nationals of a member state and have legally resided with the Union citizen in the host member state for a continuous period of five years. 3. Continuity of residence shall not be affected by temporary absences not exceeding a total of six months a year, or by absences of a longer duration for compulsory military service, or by one absence of a maximum of 12 consecutive months for important reasons such as pregnancy and childbirth, serious illness, study or vocational training, or a posting in another member state or a third country. 4. Once acquired, the right of permanent residence shall be lost only through absence from the host member state for a period exceeding two consecutive years. Legal residence is residence which satisfies the conditions laid down in the Directive, in particular those set out in article 7(1): Ziolkowski v Land Berlin (Joined Cases C 424/10 and C 425/10) [2014] All ER (EC) 314; [2011] ECR I 14035, para 46. In its application to periods of residence preceding the date for transposition of the Directive, the expression is construed as meaning residence in accordance with the earlier EU law instruments: Secretary of State for Work and Pensions v Lassal (Child Poverty Action Group intervening) (Case C 162/09) [2011] All ER (EC) 1169; [2010] ECR I 9217, para 40. Chapter VI of the Directive, entitled Restrictions on the right of entry and the right of residence on grounds of public policy, public security or public health contains articles 27 to 33. Article 27, entitled General principles, states in paras 1 and 2: 1. Subject to the provisions of this Chapter, member states may restrict the freedom of movement and residence of Union citizens and their family members, irrespective of nationality, on grounds of public policy, public security or public health. These grounds shall not be invoked to serve economic ends. 2. Measures taken on grounds of public policy or public security shall comply with the principle of proportionality and shall be based exclusively on the personal conduct of the individual concerned. Previous criminal convictions shall not in themselves constitute grounds for taking such measures. The personal conduct of the individual concerned must represent a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society. Justifications that are isolated from the particulars of the case or that rely on considerations of general prevention shall not be accepted. Article 28, entitled Protection against expulsion, provides: 1. Before taking an expulsion decision on grounds of public policy or public security, the host member state shall take account of considerations such as how long the individual concerned has resided on its territory, his/her age, state of health, family and economic situation, social and cultural integration into the host member state and the extent of his/her links with the country of origin. 2. The host member state may not take an expulsion decision against Union citizens or their family members, irrespective of nationality, who have the right of permanent residence on its territory, except on serious grounds of public policy or public security. 3. An expulsion decision may not be taken against Union citizens, except if the decision is based on imperative grounds of public security, as defined by member states, if they: (a) have resided in the host member state for the previous ten years; or (b) are a minor, except if the expulsion is necessary for the best interests of the child, as provided for in the United Nations Convention on the Rights of the Child of 20 November 1989. Under article 40, member states were required to transpose the Directive by 30 April 2006: that is to say, during the period when Mr Vomero was serving his sentence of imprisonment for manslaughter. The Directive did not contain any transitional provisions explaining whether the right of permanent residence could be acquired immediately on 30 April 2006 on the basis of earlier periods of legal residence, or, if so, which earlier periods would qualify, in particular if they had been interrupted or had ceased at some point prior to that date. Nor did the Directive contain any provisions explaining whether periods of imprisonment might be treated as legal residence, or whether imprisonment interrupted the continuity of residence. Those and other lacunae have been filled by numerous judgments of the Court of Justice. The previous judgment of this court At the previous hearing of the appeal, the Secretary of States case, put shortly, was that since Mr Vomero was in prison between 2001 and 2006, he had not acquired a right of permanent residence under article 16 by the time the deportation order was made in March 2007. It followed that, although he enjoyed the protection of articles 27(2) and 28(1) of the Directive, he did not benefit from the protection against expulsion conferred by article 28(2). In the Secretary of States submission it also followed, contrary to the conclusion of the Court of Appeal, that Mr Vomero was not entitled to enhanced protection against expulsion under article 28(3)(a). As presented to this court, the Secretary of States case did not involve investigating events prior to 2001, but rested on the undisputed fact of Mr Vomeros imprisonment from 2001 to 2006. Lord Mance, with whose judgment the other members of the court agreed, observed at para 8 of his judgment that no right of permanent residence under the Directive could in law be acquired before 30 April 2006, when the period for transposing the Directive expired. To acquire such a right, Mr Vomero therefore required, as at 30 April 2006 or at some later date, to have resided legally for a continuous period of five years in the UK, as stipulated by article 16(1) of the Directive: Lassal, para 38. As at the date when the deportation decision was taken, Mr Vomero had completed the custodial part of his sentence less than nine months earlier, and had entered immigration detention. Lord Mance also noted at para 9 that in Onuekwere the Court of Justice held that, under the terms of article 16(2) of the Directive, periods of imprisonment cannot be taken into consideration for the purposes of the acquisition of a right of permanent residence for the purposes of that provision (para 22), and that articles 16(2) and (3) must be interpreted as meaning that continuity of residence is interrupted by periods of imprisonment in the host member state (para 32). Lord Mance observed that the same must necessarily apply in respect of a Union citizen under article 16(1). Lord Mance went on to refer in para 10 to the judgment of the Court of Justice in Secretary of State for Work and Pensions v Dias (Case C 325/09) [2012] All ER (EC) 199; [2011] ECR I 6387, which concerned a Union citizen who had resided legally in the UK for over five years between January 1998 and April 2003 (not yet acquiring a right of permanent residence, since the period ended before 30 April 2006), and then remained in the UK between April 2003 and April 2004, during which time she did not work or satisfy any other condition entitling her to reside in the UK under EU law. She then worked in the UK between April 2004 and March 2007, at which point she asserted that she had acquired a right of permanent residence. Lord Mance observed: The Court of Justice held that the rule laid down in article 16(4) regarding absences [once acquired, the right of permanent residence shall be lost only through absence from the host member state for a period exceeding two consecutive years] must be applied by analogy in relation to the period when she had not been working. Since this was for less than two years, it did not affect her acquisition of a permanent right of residence as from 30 April 2006. The Supreme Court considers it clear that the Court of Justice was here identifying a bright line rule relating to the acquisition of a permanent right of residence. Lord Mance went on to observe at para 11 that, where a person had acquired a right of permanent residence, [b]y analogy with absence, it might seem logical if a period exceeding two years spent in prison were to lead to the loss of any right of permanent residence acquired on or after 30 April 2006. Lord Mance added however that the parties were not agreed on this, and that it was unnecessary to consider the point further on the present appeal. Lord Mance concluded at para 12: It follows from paras 8 and 9 above that, as the Secretary of State rightly submits, the respondent had not acquired any right of permanent residence before the date of the decision to deport him. The respondents case on this basis has to be that this is irrelevant, and that a Union citizen with no right of permanent residence may nevertheless acquire a right to enhanced protection under article 28(3)(a). In that regard, counsel for Mr Vomero submitted at the previous hearing that the requirement in article 28(3)(a) that the Union citizen have resided in the host member state for the previous ten years involved an overall assessment of the degree of integration at the date of the decision to deport, that there must in principle have been ten continuous years of residence, but that a period of imprisonment immediately preceding the decision to deport would not necessarily mean that prior integration was lost to a degree depriving the Union citizen of enhanced protection under article 28(3)(a). That submission had been accepted by the Court of Appeal, which noted that Mr Vomero had resided in the UK for more than ten years prior to his imprisonment in 2001, and considered that his integrative link with the UK remained intact in March 2007, when the deportation decision was taken. Against that background, this court referred the following questions to the Court of Justice: (1) Whether enhanced protection under article 28(3)(a) depends upon the possession of a right of permanent residence within article 16 and article 28(2). If the answer to question (1) is in the negative, the following questions are also referred: (2) Whether the period of residence for the previous ten years, to which article 28(3)(a) refers, is (a) a simple calendar period looking back from the relevant date (here that of the decision to deport), including in it any periods of absence or imprisonment, (b) a potentially non continuous period, derived by looking back from the relevant date and adding together period(s) when the relevant person was not absent or in prison, to arrive, if possible, at a total of ten years previous residence. (3) What the true relationship is between the ten year residence test to which article 28(3)(a) refers and the overall assessment of an integrative link. The judgment of the Court of Justice (1) The courts preliminary observations Before answering the first question referred by this court, the Court of Justice made the following preliminary observations: 40. By its first question, the Supreme Court of the United Kingdom asks, in essence, whether article 28(3)(a) of Directive 2004/38 must be interpreted as meaning that it is a prerequisite of eligibility for the protection against expulsion provided for in that provision that the person concerned must have a right of permanent residence, within the meaning of article 16 and article 28(2) of that Directive. 41. As a preliminary point, it should be noted that that question is based on the premise that Mr Vomero does not have such a right of permanent residence in the United Kingdom. 42. Since the court does not have all the information necessary in order to assess the merits of that premise, it must be assumed, for the purposes of the question, that it is well founded. It is also relevant to note the preliminary observations made by Advocate General Szpunar in his opinion: 32. [T]he national court has stated that Mr Vomero has not acquired any right of permanent residence, which is a matter for that court to determine before taking a final decision with due regard to EU law as interpreted by the court. According to the national court, that finding is based on the fact that Mr Vomero was in prison between 2001 and 2006, as well as the approach taken by the court in its case law, particularly in Secretary of State for Work and Pensions v Dias (Case C 325/09) [2011] ECR I 6387; [2012] All ER (EC) 199, para 57 and Onuekweres case [2014] 1 WLR 2420, para 26. 33. However, it must be noted that, in the case of citizens of third states who fulfil the condition of minimum presence on the employment market of a member state, namely citizens whose rights are based on Association Council Decision No 1/80 of 19 September 1980 on the Development of the Association between the European Economic Community and Turkey, the court has held that their right of residence, as the corollary of the right to have access to the employment market, is not affected by imprisonment: see Cetinkaya v Land Baden Wrttemberg (Case C 467/02) [2004] ECR I 10895, paras 38 and 39 and Aydinli v Land Baden Wrttemberg (Case C 373/03) [2005] ECR I 6181, para 32. (In the context of pre trial detention followed by a criminal sentence of suspended imprisonment, also see Nazli v Stadt Nrnberg (Case C 340/97) [2000] ECR I 957, paras 40 and 41.) In taking that approach, the court referred to the wording of the provisions of that Decision, which does not permit any limitation on the right of residence except in the event of absence or on grounds of public policy, public security or public health: Cetinkayas case, para 38 and Aydinlis case, para 28. However, in Diass case, para 64, the court held that a similar provision of Directive 2004/38, namely article 16(4), may be applied by analogy to periods prior to those covered by Directive 2004/38 which do not amount to legal residence for the purpose of article 16(1) of that Directive: Diass case, para 65. In Diass case the court sought above all to address a lacuna in Directive 2004/38 and a situation which could arise only prior to that Directive: see opinion of Advocate General Trstenjak in Diass case EU:C:2011:86; [2011] ECR I 6387, point 102. The case law cited above concerns the effect of imprisonment on the enjoyment of rights acquired after presence on the employment market for a number of years, while Onuekweres case, relates to the stage at which a right is acquired. Consequently, the main reason stated by the court in Onuekweres case, para 26, according to which the taking into consideration of periods of imprisonment for the purpose of acquiring a right of permanent residence would be contrary to the aim pursued by Directive 2004/38, cannot be applied to the case of forfeiture of that right because, in some cases, it may involve a Union citizen taking advantage not of periods of imprisonment directly, but of earlier periods of residence in the member state. It will be necessary to return to these observations and to consider their significance. (2) The courts answer to the first question The Court of Justice began its consideration of the first question referred to it by explaining that article 28 provides a graduated scheme of protection against expulsion, under which the degree of protection reflects the degree of integration of the Union citizen concerned in the host member state: 44. Directive 2004/38, as is apparent from recital (24) in the Preamble, establishes a system of protection against expulsion measures which is based on the degree of integration of those persons in the host member state, so that the greater the degree of integration of Union citizens and their family members in the host member state, the greater the guarantees against expulsion they enjoy. 45. In that context, first of all, article 28(1) of Directive 2004/38 provides generally that, before taking an expulsion decision on grounds of public policy or public security, the host member state must take account in particular of considerations such as how long the individual concerned has resided on its territory, his or her age, state of health, family and economic situation, social and cultural integration into the host member state and the extent of his or her links with the country of origin 46. Next, under article 28(2), Union citizens or their family members, irrespective of nationality, who have the right of permanent residence on the territory of the host member state pursuant to article 16 of the Directive cannot be the subject of an expulsion decision except on serious grounds of public policy or public security. 47. Lastly, in the case of Union citizens who have resided in the host member state for the previous ten years, article 28(3)(a) of Directive 2004/38 considerably strengthens their protection against expulsion by providing that such a measure may not be taken except where the decision is based on imperative grounds of public security, as defined by member states 48. It thus follows from the wording and the structure of article 28 of Directive 2004/38 that the protection against expulsion provided for in that provision gradually increases in proportion to the degree of integration of the Union citizen concerned in the host member state. 49. In those circumstances, and even though it is not specified in the wording of the provisions concerned, the enhanced protection provided for in article 28(3)(a) of Directive 2004/38 is available to a Union citizen only in so far as he first satisfies the eligibility condition for the protection referred to in article 28(2) of that Directive, namely having a right of permanent residence under article 16 of that Directive. (citations omitted) The Court of Justice accordingly concluded at para 61 that the answer to the first question was that article 28(3)(a) of Directive 2004/38 must be interpreted as meaning that it is a prerequisite of eligibility for the protection against expulsion provided for in that provision that the person concerned must have a right of permanent residence within the meaning of article 16 and article 28(2) of that Directive. It followed that the second and third questions referred by this court did not require to be examined. (3) B v Land Baden Wrttemberg The Court of Justice joined the reference made by this court with another reference made by a German court, in the case of B v Land Baden Wrttemberg (Case C 316/16), which raised related questions. It is relevant to note some passages in the courts judgment in which it considered the fourth question referred to it by the German court, which it described as being in essence, at what point in time compliance with the condition of having resided in the host member state for the previous ten years, within the meaning of article 28(3)(a) of Directive 2004/38, must be assessed: para 84. The answer to that question was that whether a person satisfied that condition must be assessed at the date on which the expulsion decision is initially adopted. However, the court added the following remarks: 89. It must be noted, however, that that conclusion is without prejudice to the separate issue of when it is necessary to assess whether there are actually grounds of public policy or public security within the meaning of article 28(1) of Directive 2004/38, serious grounds of public policy or public security within the meaning of article 28(2) of that Directive, or imperative grounds of public security within the meaning of article 28(3) of that Directive, on the basis of which expulsion may be justified. In that regard, it is indeed for the authority which 90. initially adopts the expulsion decision to make that assessment, at the time it adopts that decision, in accordance with the substantive rules laid down in articles 27 and 28 of Directive 2004/38. 91. However, that does not preclude the possibility that, where the actual enforcement of that decision is deferred for a certain period of time, it may be necessary to carry out a fresh, updated assessment of whether there are still grounds of public policy or public security, serious grounds of public policy or public security or imperative grounds of public security, as applicable. 92. It must be borne in mind, in particular, that under the second sub paragraph of article 27(2) of Directive 2004/38, the issue of any expulsion measure is, in general, conditional on the requirement that the conduct of the person concerned must represent a genuine, present threat affecting one of the fundamental interests of society or of the host member state 94. Furthermore, it follows, more generally, from the case law of the court that the national courts must take into consideration, in reviewing the lawfulness of an expulsion measure taken against a national of another member state, factual matters which occurred after the final decision of the competent authorities which may point to the cessation or the substantial diminution of the present threat which the conduct of the person concerned constitutes to the requirements of public policy or public security. That is so, above all, if a lengthy period has elapsed between the date of the expulsion order and that of the review of that decision by the competent court (citations omitted) The parties submissions In the light of the preliminary observations of the Court of Justice and the Advocate General, an issue has arisen between the parties as to whether it is open to Mr Vomero to argue that he had acquired a right of permanent residence in the UK by the date of the decision to deport him. In the submissions advanced on behalf of Mr Vomero, the argument is couched in terms of whether he retained a right of permanent residence which was notionally, though not formally acquired prior to 30 April 2006. It is argued on his behalf, under reference to cases concerned with actual, not notional, rights of permanent residence, that a period of more than two years imprisonment need not result in the loss of such a right. A similar argument was presented on behalf of Mr Vomero to the Court of Justice, but was not reflected in the approach which it adopted. As it seems to me, references to a notional right of permanent residence are liable to obscure the true question. There is no indication in the judgments of the Court of Justice that EU law recognises a right of permanent residence of a merely notional character. On the contrary, the judgments of the Court of Justice in the cases concerning the Directive have drawn a distinction between the acquisition of a right of permanent residence (as in Lassal, Dias and Onuekwere) and the subsequent loss of such a right (as provided for under article 16(4) of the Directive). Before any question can arise as to whether Mr Vomero retained a right of permanent residence, it is necessary first to determine whether he had acquired such a right, not notionally but in reality: something which, as the Court of Justice has made clear (for example, in Dias, paras 40 and 57), could only occur on or after 30 April 2006. As explained earlier, Lord Mance concluded in his judgment that Mr Vomero had not acquired a right of permanent residence in the UK by the date of the decision to deport him, notwithstanding his many years residence, because his imprisonment between 2001 and 2006 had the result that he had not, as at 30 April 2006 or some later date, resided legally in the UK for a continuous period of five years prior to the decision to deport him. It is argued on Mr Vomeros behalf that this reasoning cannot be correct, given the Court of Justices statement in para 42 of its judgment (cited at para 22 above) that it did not have all the information necessary in order to assess the merits of the premise of the first question referred, namely, as the court stated in para 41, that Mr Vomero does not have such a right of permanent residence in the United Kingdom. Since, it is argued, the court had Lord Mances judgment before it, it cannot have found in Lord Mances reasoning a sufficient basis for his conclusion. In response, the Secretary of State submits that the conclusion expressed in para 12 of Lord Mances judgment is correct. He concedes, however, that when the appeal is remitted to the Upper Tribunal to be reconsidered, it will be open to Mr Vomero to argue, if he can establish it on the evidence, that he has acquired a right of permanent residence since the date of the decision to deport him, and therefore now benefits from the protection given by article 28(2) of the Directive. The parties agree that that is because the tribunal is required under domestic law to consider the position as at the date of the hearing before it, rather than the date of the decision under challenge. This is agreed to follow from section 85(4) of the Nationality, Immigration and Asylum Act 2002, together with Schedule 2, paragraph 1 of the Immigration (European Economic Area) Regulations 2016 (SI 2016/1052). Given that that is a matter of agreement, this court need express no view as to whether it is legally correct. Discussion The preliminary observations made by the Court of Justice do not set out any criticism of the reasoning which led Lord Mance to the conclusion stated in para 12 of his judgment. The court properly confined itself to answering the question referred to it. It is notable that the premise which the court said that it was unable to assess was not the same as Lord Mances conclusion. That conclusion was that the respondent had not acquired any right of permanent residence before the date of the decision to deport him: that is to say, that he had not acquired such a right by 23 March 2007. The premise which the court assumed to underlie the reference was different: that Mr Vomero does not have such a right of permanent residence in the United Kingdom: that is to say, that he does not presently have such a right. This court expressed no view as to whether Mr Vomero presently has such a right. That question was not, and is not, before this court. As explained in para 32 above, the parties are in agreement that the question whether Mr Vomero has acquired a right of permanent residence since 23 March 2007 remains open for consideration by the tribunal when the case is remitted there. The Court of Justices observation that it did not have all the information necessary in order to assess whether Mr Vomero (presently) has a right of permanent residence does not, therefore, undermine Lord Mances conclusion to any extent. The preliminary observations of the Advocate General also began at point 32 (cited at para 23 above) by attributing to this court a statement that Mr Vomero has not acquired any right of permanent residence (emphasis supplied): a statement which, however, this court did not make. The Advocate Generals belief that this court had made such a statement may form the background to part of what he said in point 33. In that paragraph, the Advocate General began by referring to the approach adopted by the Court of Justice in the cases of Cetinkaya and Aydinli, which were not concerned with the Directive but with the effect of imprisonment on rights of residence acquired under Decision 1/80 of the EEC Turkey Association Council of 19 September 1980. The Advocate General contrasted that approach with the approach adopted in the case of Dias, concerned with the acquisition of the right of permanent residence under the Directive. He explained the latter approach as being designed to address a lacuna in the Directive. In this passage, the Advocate General appears to have intended to clarify the case law of the Court of Justice, or possibly to invite the court to do so. In the event, the Court of Justice did not comment on the matter: its judgment contains no mention of Cetinkaya or Aydinli, and mentioned Dias only to record that this court had referred to it. The Advocate General then went on in point 33 to contrast Cetinkaya and Aydinli, which as previously mentioned concerned the effect of imprisonment on the enjoyment of rights previously acquired, with the case of Onuekwere, which concerned the effect of imprisonment on the acquisition of a right of permanent residence. He expressed the view that the reasoning in Onuekwere could not be applied to cases concerned with the forfeiture of that right once acquired. That passage in his opinion is relevant to para 11 of Lord Mances judgment (cited at para 18 above), where Lord Mance observed, obiter, that it might seem logical if a period of more than two years imprisonment were to lead to the loss of a right of permanent residence once acquired. It does not, on the other hand, affect the reasoning which led Lord Mance to his conclusion in para 12. The preliminary observations of the Advocate General do not, therefore, place in question Lord Mances conclusion in para 12 of his judgment that Mr Vomero had not acquired a right of permanent residence in the UK by the date of the decision that he should be deported. That conclusion follows, as Lord Mance explained, from the principles laid down in the judgments of the Court of Justice in Dias and Onuekwere. The case of Dias, like the present case, concerned a situation where a Union citizen had been legally resident in the UK for a continuous period of more than five years prior to 30 April 2006: as explained earlier, she resided legally in the UK between January 1998 and April 2003. That period of continuous legal residence had, however, been followed by a period between April 2003 and April 2004 when she was not legally resident, since she did not work or satisfy any other condition entitling her to reside in the UK under the Directive, although she remained in possession of a residence permit issued under Council Directive 68/360/EEC. She then worked in the UK between April 2004 and March 2007, at which point she asserted that she had acquired a right of permanent residence. The Court of Justice held, following its judgment in the case of Lassal, that continuous periods of five years legal residence which were completed before 30 April 2006 counted towards the acquisition of the right of permanent residence, but that the right could not be acquired until that date. It then referred to article 16(4) of the Directive, under which the right of permanent residence, once acquired, is lost through absence from the host member state for a period exceeding two consecutive years. Although that provision is concerned with the loss of the right of permanent residence, rather than with its acquisition, and although it is concerned only with absence from the host member state, the Court of Justice held that the rule which it laid down had also to be applied by analogy, in the context of the acquisition of a right of permanent residence, to periods spent in the host member state during which the conditions governing entitlement to a right of residence were not satisfied, which occurred before 30 April 2006 and after a continuous period of five years legal residence completed prior to that date. In that regard, the court stated: 60. Next, the court has also held that that provision [article 16(4)] falls to be applied independently of whether the periods of residence in question were completed before or after 30 April 2006, for the reason that, since residence periods of five years completed before that date must be taken into account for the purpose of acquisition of the right of permanent residence provided for in article 16(1) of Directive 2004/38, non application of article 16(4) thereof to those periods would mean that the member states would be required to grant that right of permanent residence even in cases of prolonged absences which call into question the link between the person concerned and the host member state (see Lassals case (para 56)). 62. Such reasoning must also be applied by analogy to periods of residence completed on the basis solely of a residence permit validly issued pursuant to Directive 68/360, without the conditions governing entitlement to any right of residence having been satisfied, which occurred before 30 April 2006 but after a continuous period of five years legal residence completed prior to that date. 63. Even though article 16(4) of Directive 2004/38 refers only to absences from the host member state, the integration link between the person concerned and that member state is also called into question in the case of a citizen who, while having resided legally for a continuous period of five years, then decides to remain in that member state without having a right of residence. 64. In that regard, it should be noted, as the Advocate General has stated in points 106 and 107 of her opinion, that the integration objective which lies behind the acquisition of the right of permanent residence laid down in article 16(1) of Directive 2004/38 is based not only on territorial and time factors but also on qualitative elements, relating to the level of integration in the host member state. 65. As the situations are comparable, it follows that the rule laid down in article 16(4) of Directive 2004/38 must also be applied by analogy to periods in the host member state completed on the basis solely of a residence permit validly issued under Directive 68/360, without the conditions governing entitlement to a right of residence of any kind having been satisfied, which occurred before 30 April 2006 and after a continuous period of five years legal residence completed prior to that date. The case of Dias was concerned with a period, following a continuous period of five years legal residence completed prior to 30 April 2006, during which the conditions of legal residence were not satisfied because the Union citizen was out of work. The case of Lassal was concerned with a period, following a continuous period of five years legal residence completed prior to 30 April 2006, during which those conditions were not satisfied because the Union citizen was absent from the host member state. The present case is concerned with a period, following a continuous period of five years legal residence completed prior to 30 April 2006, during which the Union citizen was in prison. The leading authority on the significance of imprisonment in relation to the acquisition of a right of permanent residence is the case of Onuekwere. It concerned a Nigerian national who became the husband of a Union citizen exercising her right of residence in the UK. The question was whether he had acquired a right of permanent residence under article 16(2) of the Directive (see para 10 above). In order to do so, he had to have resided legally with his wife in the UK for a continuous period of five years. He resided with her legally between 2000 and 2004, but was then in prison between September 2004 and November 2005. He was imprisoned again between 2008 and 2009. He then asserted that he had acquired a right of permanent residence. The court held that the periods of imprisonment could not be taken into account for the purpose of calculating the length of the claimants residence in the UK. It stated at para 26: The imposition of a prison sentence by the national court is such as to show the non compliance by the person concerned with the values expressed by the society of the host member state in its criminal law, with the result that the taking into consideration of periods of imprisonment for the purposes of the acquisition by family members of a Union citizen who are not nationals of a member state of the right of permanent residence for the purposes of article 16(2) of Directive 2004/38 would clearly be contrary to the aim pursued by that directive in establishing that right of residence. (Emphasis supplied) The court went on to state at para 32 that article 16(2) and (3) must be interpreted as meaning that continuity of residence is interrupted by periods of imprisonment in the host member state of a third country national who is a family member of a Union citizen. The practical result was that Mr Onuekwere was unable to aggregate the periods of residence before and after his periods of imprisonment, so as to establish a period of five years continuous legal residence. Onuekwere differs from Lassal and Dias in that the decision was not based on the application by analogy of the rule in article 16(4) of the Directive, under which a right of permanent residence, once acquired, is lost where there has been a period of absence exceeding two consecutive years. Instead, it was based on the application of article 16(3), which concerns continuity of residence for the purpose of the acquisition of a right of permanent residence, and was interpreted as applying where there has been a period of imprisonment, as well as in the cases expressly set out in that provision. The reasoning in Onuekwere nevertheless resembles that in Lassal and Dias, in that it was based (as appears, for example, from paras 24 25 and 30) on the significance of imprisonment in relation to the integrative link between the offender and the host member state. As Lord Mance observed in para 9 of his judgment, the same reasoning as was applied in Onuekwere for the purposes of article 16(2) of the Directive (which applies article 16(1) to the family members of a Union citizen who are not themselves nationals of a member state) and article 16(3) (which applies for the purposes of both article 16(1) and article 16(2)) must also apply to Union citizens themselves for the purposes of article 16(1). The present case differs from Onuekwere, however, in that Mr Vomero had completed more than five years continuous legal residence in the UK before he was imprisoned in 2001. Considering whether Mr Vomero had acquired a right of permanent residence when the period for implementation of the Directive expired on 30 April 2006, the position is therefore analogous to those in Lassal and Dias: the rule in article 16(4) has to be applied by analogy. Treating imprisonment as weakening the integrative link between the person involved and the host member state in a similar way to the circumstances in Lassal and Dias, in accordance with the judgment in Onuekwere, it follows that the period of imprisonment for more than two years which Mr Vomero had undergone by 30 April 2006 prevented him from acquiring a right of permanent residence on that date, or at any subsequent time prior to 23 March 2007, when the decision to deport him was taken. The necessary period of five years continuous legal residence could not begin any earlier than 3 July 2006, when he completed the custodial part of his sentence, and would depend on his fulfilling the conditions for legal residence laid down in the Directive. If five years continuous legal residence had not been completed by the time of the periods of imprisonment in 2012, those periods would not count towards the five years required, and would interrupt the continuity of residence, in accordance with Onuekwere. Lord Mances conclusion that Mr Vomero had not acquired a right of permanent residence by the date of the decision to deport him was therefore correct. On the other hand, a question is raised by the Advocate Generals comments in the last two sentences of point 33 of his opinion in the present case in relation to the tentative suggestion made by Lord Mance in the penultimate sentence of para 11 of his judgment. As explained earlier, Lord Mance observed, obiter, that it might seem logical if a period of more than two years imprisonment were to lead to the loss of a right of permanent residence once acquired. The Advocate General, however, expressed the view that the reasoning in Onuekwere could not be applied to cases concerned with the forfeiture of that right once acquired. In the light of those comments, it would be wise for this court to refrain from expressing any view in the present case as to whether there may be a distinction between the effect of imprisonment on the acquisition of a right of permanent residence, with which Onuekwere was concerned, and its effect on the retention of such a right once obtained. Finally, as the Court of Justice made clear in paras 89 94 of its judgment in the case of B v Land Baden Wrttemberg, cited at para 28 above, it will be necessary for the tribunal, when this case is remitted to it, to consider not only whether Mr Vomero has acquired a right of permanent residence since the date of the decision to deport him, in accordance with the agreement of the parties (see para 32 above), and if so the implications of his having done so, but in any event whether there are still grounds of public policy or public security within the meaning of article 28(1) of the Directive on the basis of which his expulsion may be justified. Conclusion For the foregoing reasons, the court should in my view allow the appeal, grant a declaration that neither article 28(2) nor article 28(3) of Directive 2004/38/EC applied to Mr Vomero as at the date of the Secretary of States decision to deport him on 23 March 2007, and remit the respondents appeal against that decision to the Upper Tribunal to be reconsidered in accordance with this judgment.

The Respondent, Mr Franco Vomero, is an Italian national who has lived in the United Kingdom since 1985. In 1998 his marriage to his British wife broke down, and he moved into accommodation with Mr Edward Mitchell. In 2001, he killed Mr Mitchell. In 2002 he was sentenced to eight years imprisonment for manslaughter. In 2006 he completed the custodial part of his sentence. On 23 March 2007 the Home Secretary decided to deport him under regulations 19(3)(b) and 21 of the Immigration (European Economic Area) Regulations 2006. Regulation 21 gives effect to articles 27 and 28 of Directive 2004/38/EC (Directive). In October 2007 the Immigration and Asylum Tribunal (IAT) dismissed Mr Vomeros appeal against the deportation decision. A Senior Immigration Judge ordered that the IATs determination be reconsidered. On reconsideration, the IAT allowed Mr Vomeros appeal. The Court of Appeal dismissed the Secretary of States appeal against the second IAT determination. The Secretary of State appealed to the Supreme Court. Following an initial hearing of his appeal in 2016, the Supreme Court referred a number of questions to the Court of Justice of the European Union (CJEU). The Supreme Courts reasons for making the reference were explained in a judgment given by Lord Mance. After the CJEU delivered its judgment on 17 April 2018, the Supreme Court held a further hearing on 7 February 2019. The Supreme Court unanimously allows the appeal. Lord Reed, with whom the rest of the Court agrees, delivers the judgment. In the reference, the Supreme Court asked whether a right of permanent residence (RPR) is a prerequisite for enhanced protection against expulsion pursuant to article 28(3)(a) of the Directive, as the Court of Appeal had held. Pursuant to that article, an expulsion decision may not be taken against Union citizens, except if the decision is based on imperative grounds of public security, as defined by member states, if they have resided in the host member state for the previous ten years. The CJEU held that RPR is a prerequisite for this, because article 28 provides a graduated scheme of protection, under which the degree of protection reflects the individuals degree of integration into the host member state. [26] In the initial judgment of the Supreme Court, Lord Mance concluded that Mr Vomero had not acquired a right of permanent residence in the UK by the date of the decision to deport him, notwithstanding his many years of residence, because his imprisonment between 2001 and 2006 had the result that he had not resided legally in the UK for a continuous period of five years as at 30 April 2006, which is when the Directive was due to be implemented, or any later date before the decision to deport him. [30] It is now argued on Mr Vomeros behalf that it was wrong for the Supreme Court to conclude that he did not have RPR, because the CJEU observed in the course of its judgment that the question referred to it was based on the premise that he does not have RPR, and that it did not have all the information necessary in order to assess whether the premise was correct. In response, the Secretary of States maintains that Lord Mances conclusion was correct but concedes that it will be open to Mr Vomero to argue that he has acquired a right of permanent residence since the date of the decision to deport him. [31] [32] The proposition which the CJEU said that it was unable to assess, namely that Mr Vomero does not have RPR, is not the same as Lord Mances conclusion, namely that Mr Vomero had not acquired RPR by 23 March 2007. [33] The same is true of the Advocate Generals preliminary observations. [34] The leading authority on the significance of imprisonment in relation to the acquisition of RPR is Onuekwere v Home Secretary (Case C 378/12) [2014] 1 WLR 242, where the CJEU held that periods of imprisonment could not be taken into account for the purpose of calculating the length of the claimants residence in the UK, and interrupted the continuity of such residence. [42] The present case differs from Onuekwere in that Mr Vomero had completed more than five years of continuous legal residence in the UK before he was imprisoned in 2001. However, the period of imprisonment for more than two years which he had undergone by 30 April 2006 prevented him from acquiring a right of permanent residence on that date, in the same way as absence from the UK or being out of work for more than two years would have done, following Secretary of State for Work and Pensions v Lassal (Case C 162/09) [2001] 1 CMLR 31 and Secretary of State for Work and Pensions v Dias (Case C 325/09) [2011] 3 CMLR 40. Accordingly, the necessary period of five years continuous legal residence could not begin any earlier than when he completed the custodial part of his sentence, and five years continuous legal residence had not been completed by the time the decision to deport him was made. [45] It will be necessary for the tribunal, when this case is remitted to it, to consider not only whether Mr Vomero has acquired a right of permanent residence since the date of the decision to deport him, but also whether there still exist grounds of public policy or public security within the meaning of article 28(1) of the Directive on the basis of which his expulsion could be justified. [47]

This appeal arises out of an application for judicial review of a decision taken by the Scottish Criminal Cases Review Commission (the Commission) under section 194B(1) of the Criminal Procedure (Scotland) Act 1995, as amended (the 1995 Act). That subsection provides, so far as material: The Commission on the consideration of any conviction of a person . who has been convicted on indictment or complaint may, if they think fit, at any time, and whether or not an appeal against such conviction has previously been heard and determined by the High Court . refer the whole case to the High Court and, subject to section 194DA of this Act, the case shall be heard and determined, subject to any directions the High Court may make, as if it were an appeal under Part VIII or, as the case may be, Part X of this Act. The grounds for a reference under section 194B(1) are set out in section 194C: (1) The grounds upon which the Commission may refer a case to the High Court are that they believe that it is in the interests of justice that a reference that a miscarriage of justice may have occurred; (a) and (b) should be made. (2) In determining whether or not it is in the interests of justice that a reference should be made, the Commission must have regard to the need for finality and certainty in the determination of criminal proceedings. It is also relevant to note section 194DA. So far as material, it provides: (1) Where the Commission has referred a case to the High Court under section 194B of this Act, the High Court may, despite section 194B(1), reject the reference if the Court considers that it is not in the interests of justice that any appeal arising from the reference should proceed. (2) In determining whether or not it is in the interests of justice that any appeal arising from the reference should proceed, the High Court must have regard to the need for finality and certainty in the determination of criminal proceedings. Sections 194C(2) and 194DA were inserted into the 1995 Act by the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (the 2010 Act), a piece of emergency legislation which was enacted on the day after this court gave judgment in Cadder v HM Advocate [2010] UKSC 43; 2011 SC (UKSC) 13; [2010] 1 WLR 2601. These proceedings arise out of the Commissions consideration of the appellants conviction for rape. The Commission decided not to refer his case to the High Court of Justiciary. They accepted that a miscarriage of justice might have occurred, but they did not believe that it was in the interests of justice that a reference should be made. The condition laid down in section 194C(1)(b) was therefore not met. The appellant challenges that decision on the basis that the Commissions decision was vitiated by errors of law. The appellants application for judicial review was refused by the Lord Ordinary, Lord Pentland. That decision was upheld by an Extra Division (Lord Menzies, Lady Clark of Calton and Lord Wheatley). The present appeal against their decision was brought before the introduction of a requirement that permission to appeal should be obtained. The factual background to the appeal On 12 August 2001 the appellant had sexual intercourse with a woman who then reported to the police that she had been raped. She was medically examined, and vaginal swabs were taken from her for forensic examination. The following day, the appellant was informed by the police that the allegation had been made. As requested, he went to a police station and was interviewed by police officers. At the beginning of the interview he was cautioned. He confirmed that he fully understood the caution and that he had attended the police station voluntarily. He was asked if he wished to have a solicitor advised, but declined. In accordance with practice at the time, and the law as then understood, he was not offered the option to consult a solicitor before the interview, and no solicitor was present during it. When questioned, he freely admitted having had sexual intercourse with the complainer at his flat, and maintained that it had taken place with her consent. As a result of his admission, the semen found on the vaginal swabs was not subjected to DNA analysis. That also was in accordance with the usual practice at the time, when the fact that sexual intercourse had taken place between an accused and a complainer was not in dispute. The appellant was subsequently charged with the rape of the complainer, and also with indecent assaults on two other women. The subsequent trial took place between 30 August and 5 September 2002. At the trial, the appellant was represented by a highly experienced Queens Counsel. He pled guilty to one of the charges of indecent assault, and the other charge of indecent assault was withdrawn. In relation to the charge of rape, the Crown relied on the appellants admission as corroboration of the complainers evidence that sexual intercourse had occurred, that being an element of the offence which must be proved by corroborated evidence. A videotape of the appellants interview was therefore played to the jury as part of the Crown case, without objection. Corroboration of the complainers evidence as to the other essential element of the offence, namely that she had not consented to sexual intercourse, was provided by other Crown witnesses, who gave evidence of her being in a state of shock and distress shortly after her encounter with the appellant, and of injuries which were found when she was medically examined. There was also evidence that a decorative chain on her trousers had been broken, although her clothing was otherwise undamaged. In cross examination, the complainer accepted that she had initially given the police an untrue account of where the incident occurred, when she had stated that she had been raped in a lane near the nightclub where she met the appellant, rather than at his flat, some miles away. She explained that she had been disorientated. In relation to the evidence of her being distressed, the line of cross examination sought to attribute her distress to her consumption of alcohol and medication, and to the appellants having rejected her at the end of their encounter. It was also established that the complainer initially told the police that she had been taken from the nightclub forcibly, but later said that she left it willingly. She had explained her earlier account by saying that she had been embarrassed to admit that she had gone home with a man she had only just met. The appellant elected not to give evidence, but relied on the interview as setting out his defence to the charge, namely that the sexual intercourse had been consensual. As a result, he avoided having his version of events subjected to cross examination. The appellant was convicted. He was sentenced to five years imprisonment on the rape charge and admonished for the indecent assault. The sentence was completed long ago. The appellants case is fairly typical of rape cases of that period. It was usual for persons accused of rape to be interviewed by the police without having the opportunity to consult a solicitor. It was common for them to accept that sexual intercourse had taken place and to maintain that it was consensual. It was common, in those circumstances, for the police not to complete forensic examination of samples which might have provided independent corroboration of the fact of sexual intercourse, since the accuseds admission at interview rendered such examination unnecessary. It was usual for the Crown then to rely on the admission as part of the Crown case at the trial. It was common for the accused to rely on the exculpatory part of the interview in his defence. The first appeal The appellant appealed against his conviction for rape on three grounds. The first was defective representation. He claimed that evidence should have been led from a number of witnesses who could have given evidence about such matters as his kissing the complainer in the night club prior to their going to his flat, and the lack of noise from his flat at the material time. The second ground was that the jury had been directed on the law of rape in accordance with the decision in Lord Advocates Reference (No 1 of 2001) 2002 SCCR 435, which post dated the incident. The third ground concerned the prejudicial effect of pre trial publicity. Each ground was considered at first sift (by a single judge) on 20 June 2003. Leave to appeal was refused, the first sift judge giving detailed reasons for his decision. However, at second sift (by three judges) on 23 December 2003, leave to appeal was granted, but only on the defective representation ground. Notwithstanding that decision, on 30 April 2004 the court allowed the appellant to lodge two additional grounds of appeal. The new grounds related to the adequacy of corroboration, and to the directions given on mens rea. At the hearing of the appeal on 29 September 2004, it was only the new grounds which were relied upon. The appeal was refused: Gordon v HM Advocate 2004 SCCR 641. The second appeal The appellant applied to the Commission to have his case referred back to the High Court on a number of grounds, namely prejudicial pre trial publicity, the effect of the development in the law of rape between the incident and the trial, the sufficiency of the evidence, misdirection on the law of rape, failure by the Crown to disclose that the complainers clothing had been seized by the police, and police misconduct and failures in relation to the investigation of the incident, the gathering of evidence and the disclosure of evidence. In April 2007 the Commission referred the case back to the High Court, primarily on the basis that (1) the police investigation had been defective in a number of respects, (2) there had been a failure by the Crown to disclose a statement taken from the complainer in which she said that she shouted during the incident, contrary to her evidence at the trial (although the defence knew at the trial that such a statement had been made, and the complainer was cross examined on the basis that she had made such a statement), and (3) the Commission had discovered evidence that the complainer had previously been in a relationship with one of the witnesses who had given evidence of her distress. In accordance with section 194B(1) of the 1995 Act, the referral was dealt with as a second appeal. On 20 April 2007 the appellant made a further application to the Commission, on the basis that there had been an imbalance between men and women on the jury. The Commission rejected the application on the ground that the case had already been referred, and the matter could be raised as a ground of appeal. In the event, the matter was not pursued. The appellants grounds of appeal were lodged in June 2007. They concerned the matters identified by the Commission, and also a failure to disclose that the complainer had been charged by the police with child neglect in relation to an occasion several months after the incident involving the appellant, when her estranged husband reported that their 11 year old daughter had been left at home on her own. The charge had not been pursued. The appeal had an extended procedural history, described in the judgment of Lord Carloway in Gordon v HM Advocate [2009] HCJAC 52; 2009 SCCR 570. In the light of that judgment, in July 2009 the appeal was set down for a hearing on 26 28 January 2010. On those dates the appellant appeared on his own behalf, having parted company (not for the first time) with his legal representatives. He sought to have the hearing discharged in order to instruct fresh counsel and solicitors, but that application was refused in view of the protracted procedural history and the age of the conviction, amongst other matters. The appeal was refused on 6 May 2010: Gordon v HM Advocate [2010] HCJAC 44; 2010 SCCR 589. In its opinion, delivered by Lord Carloway, the court considered each of the grounds of appeal with meticulous care. Its conclusion reflected its evaluation of the likely effect on the jurys verdict of the additional or undisclosed evidence, and of the potential evidence which was unavailable because of defects in investigation: The points raised in this appeal are essentially matters of fact which the appellant maintains might, or perhaps would, have made a difference in the jurys deliberations. But the reality is that this was a complainer who was demonstrated to have given different accounts to the police and others after the occurrence of the incident. The defence brought out a number of points in favour of the defence position, including the lack of damage to the clothing. There was ample material available at the trial which could have persuaded the jury that there was a reasonable doubt about the guilt of the appellant. But, the jury had no reasonable doubt and it is easy to see why. Although there were substantial variations in the complainers early accounts, she ultimately spoke clearly to leaving the nightclub, ending up at the appellants flat and being raped by him. [T]he evidence of the bruising to the complainers breast, arms, thighs and buttocks must have seemed to the jury, as it does to this court, to be of some note. The ornamental chain of her trousers was broken. In addition, it was not disputed that the complainer had left the appellants flat abruptly. She did not go home, as might have been anticipated after a consensual event, but went first to a male friends house in the early hours of the morning in a distressed state. When she left his flat, she still did not go home, but called a female friend to pick her up from a shopping centre some time around 3.30 am, when she was witnessed still to be in a state of distress. In addition, there was the appellants own account where, at parts of his interview, he accepts that he escorted the complainer to his flat when he knew she was in a drunken state. He admitted that things got a wee bit out of control at some point, albeit that he had an alternative explanation for this. He admitted that he did not provide the complainer with his name or address, so that she could telephone a taxi. The jury would have been entitled to regard these admissions as highly supportive of the complainers account and not consistent with an episode of consensual intercourse. The evidence therefore fully entitled the jury to reach the verdict they did and nothing in the grounds of appeal or otherwise has persuaded the court that a miscarriage of justice did occur, or even might have occurred, in this case. (paras 105 107) The Cadder decision On 26 October 2010, several months after the appellants second appeal had been refused, this court gave judgment in the case of Cadder v HM Advocate. It held that the right under article 6 of the European Convention on Human Rights not to incriminate oneself implied that a suspect should be permitted access to legal advice prior to and during interrogation by the police, unless there were compelling reasons in the particular circumstances of the case which justified a restriction on the right of access to a solicitor; and that, as a general rule, answers to police questioning conducted without the opportunity of access to legal advice ought not to be admitted in evidence. However, their admission in evidence did not in itself make the trial unfair. A conviction would only be quashed if (per Lord Hope at para 64) it was clear that there was insufficient evidence for a conviction without the evidence of the police interview or that, taking all the circumstances of the trial into account, there was a real possibility that the jury would have arrived at a different verdict had they not had that evidence before them. This decision was not unexpected. There had however been considerable concern about its practical implications, partly because of an apprehension that the resultant change in understanding of the law might form the basis of appeals by the large numbers of persons who had previously been convicted on the basis of evidence obtained at interviews conducted without their having had access to a solicitor. Such persons had been properly convicted under the law as it was understood at the time of their trial and any subsequent appeal, but they might, following Cadder, argue that they were the victims of a miscarriage of justice. There was little if any authority on the approach which the High Court should take to applications for extensions of time to lodge notices or notes of appeal, based upon developments in the law. If the ordinary approach to applications for extensions were adopted, then it appeared that such applications might be granted in large numbers of cases, since the lateness of the application would generally be excusable. There was also uncertainty as to whether the refusal of applications would in any event be compatible with Convention rights. Even if the court adopted a restrictive approach, the refusal of applications might simply result in a flood of references by the Commission. In Cadder, this court considered the retroactive effect of its own decision in an effort to address those concerns. Lord Hope, in a judgment with which the other members of the court agreed, referred to dicta in earlier decisions of this court, to the effect that it has an inherent power to limit the retrospective effect of its decisions. The Convention principle of legal certainty suggested that there would be no objection to this on Convention grounds. He concluded, however, that the exercise of that power was precluded in this context by the statutory regime created by the Scotland Act 1998. Furthermore, the relevant Strasbourg authority (Salduz v Turkey (2008) 49 EHRR 19) had not laid down a new principle: far from making a ruling that was not applicable to acts or situations that pre dated its judgment, it ruled that the applicants Convention rights were violated in 2001, when the relevant events took place. Nevertheless, Lord Hope considered that there were strong grounds for ruling, on the basis of the principle of legal certainty, that the decision in Cadder did not permit the re opening of cases which had been finally determined. After referring to judgments of the European Court of Human Rights concerned with the principle of legal certainty in the application of the Convention, to the decision of the Supreme Court of Ireland in A v Governor, Arbour Hill Prison [2006] IESC 45; [2006] 4 IR 88, and to that of the Court of Appeal in England in R v Budimir [2010] EWCA Crim 1486; [2011] QB 744, Lord Hope stated: In the light of these authorities I would hold that convictions that have become final because they were not appealed timeously, and appeals that have been finally disposed of by the High Court of Justiciary, must be treated as incapable of being brought under review on the ground that there was a miscarriage of justice because the accused did not have access to a solicitor while he was detained prior to the police interview. The Scottish Criminal Cases Review Commission must make up its own mind, if it is asked to do so, as to whether it would be in the public interest for those cases to be referred to the High Court of Justiciary. It will be for the Appeal Court to decide what course it ought to take if a reference were to be made to it on those grounds by the commission. (para 62) The reference to the public interest in that passage, and in a similar passage in the judgment of Lord Rodger (para 103), should be understood as referring to the interests of justice, in accordance with section 194C(1) of the 1995 Act. Lord Rodger, in a judgment with which the other members of the court also agreed, observed (para 101) that guidance could be derived from the judgment of Murray CJ in A v Governor, Arbour Hill Prison at paras 36 38: [T]he retrospective effect of a judicial decision is excluded from cases already finally determined. This is the common law position . No one has ever suggested that every time there is a judicial adjudication clarifying or interpreting the law in a particular manner which could have had some bearing on previous and finally decided cases, civil or criminal, that such cases be reopened or the decisions set aside. It has not been suggested because no legal system comprehends such an absolute or complete retroactive effect of judicial decisions. To do so would render a legal system uncertain, incoherent and dysfunctional. Such consequences would cause widespread injustices. Lord Rodger considered that Murray CJs description of the effect of a decision which alters the law as previously understood could be applied to Scots law, and that such an approach was also compatible with the Convention: For instance, in Smith v Lees 1997 JC 73 the Court of Five Judges overruled Stobo v HM Advocate 1994 JC 28 and thereby laid down a more restrictive test for corroboration in cases of sexual assault. The new test applied to the appellants case and to other cases that were still live. But it could never have been suggested that the decision meant that convictions in completed cases, which had been obtained on the basis of the law as laid down in Stobo, were ipso facto undermined or invalidated. Similarly, in Thompson v Crowe 2000 JC 173, the Full Bench overruled Balloch v HM Advocate 1977 JC 23 and re established the need to use the procedure of a trial within a trial when the admissibility of statements by the accused is in issue. But, again, this had no effect on the countless completed cases where convictions had been obtained on the basis of evidence of such statements by the accused which judges had admitted in evidence without going through that procedure. So, here, the courts decision as to the implications of article 6(1) and (3)(c) of the Convention for the use of evidence of answers to police questioning has no direct effect on convictions in proceedings that have been completed. To hold otherwise would be to create uncertainty and, as Murray CJ rightly observes [in A v Governor, Arbour Hill Prison A v Governor, Arbour Hill Prison, para 38], cause widespread injustices. And the Strasbourg court has pointed out that the principle of legal certainty is necessarily inherent in the law of the European Convention (Marckx v Belgium (1979) 2 EHRR 330, para 58). In A v Governor, Arbour Hill Prison (para 286) Geoghegan J said that he was satisfied . that it would be wholly against good order if convictions and sentences which were deemed to be lawful at the time they were decided had to be reopened. I emphatically agree. And that policy is, of course, embodied in section 124 of the 1995 Act which makes interlocutors and sentences pronounced by the Appeal Court final and conclusive and not subject to review by any court whatsoever, except in proceedings on a reference by the Scottish Criminal Cases Review Commission. (para 102) In the subsequent cases of Lang and Hastie v United Kingdom (2012) 55 EHRR SE 7, in which applications were made to the European Court of Human Rights by persons who had been refused extensions of time to appeal on a Cadder basis, the court referred approvingly to the legal certainty the Supreme Court properly sought to introduce when it limited the effect of its ruling in Cadder (para 32). The 2010 Act A legislative response to Cadder had been prepared in anticipation of this courts decision, and as earlier explained, the 2010 Act was immediately enacted. As well as amending the legislation governing the rights of persons arrested or detained by the police, so as to provide them with a right of access to a solicitor, and making consequential amendments to legal aid legislation, it amended the provisions of the 1995 Act relating to references by the Commission as explained earlier. As a result, in determining whether or not it was in the interests of justice that a reference should be made, the Commission was required to have regard to the need for finality and certainty in the determination of criminal proceedings. The High Court was also given the power to reject references if it considered that it was not in the interests of justice that any appeal arising from the reference should proceed; and in that regard it also was required to have regard to the need for finality and certainty in the determination of criminal proceedings. Although the immediate occasion for the enactment of the provisions of the 2010 Act concerning references by the Commission was the case of Cadder, it is important to appreciate that those provisions have a wider significance. They are not confined either to Cadder type cases or to other cases concerned with changes in the law. It is inherent in the role of the Commission that it qualifies the principle of finality in criminal proceedings, otherwise secured by statutory provisions concerning the time limits for bringing appeals and the finality of the disposal of appeals by the High Court. The justification for that inroad into finality and legal certainty is the need to provide a mechanism for the review of cases where a possible miscarriage of justice comes to light after the exhaustion of rights of appeal. This is necessary not only in the interests of the potential victim of a miscarriage of justice but also in order to maintain public confidence in the administration of justice. Certainty and finality nevertheless remain important considerations for any system of criminal justice: the re opening of cases which have been completed has significant implications for the victims of crime, and the families of deceased victims, as well as for those who have been convicted. Public confidence in the administration of justice is also damaged if the outcome of completed proceedings appears to be merely provisional. There are in addition more pragmatic considerations. In a legal system with limited resources, the public interest requires priority generally to be given to dealing with current cases. In order for these considerations to be taken into account, it is necessary that the Commission should not merely ask itself whether a miscarriage of justice may have occurred, but also whether it is in the interests of justice that the case should be referred to the High Court; and that, in deciding the latter question, it should have regard to the need for finality and certainty in the determination of criminal proceedings. The post Cadder application to the Commission On 7 May 2010, the day after the refusal of his second appeal, the appellant made another application to the Commission, raising matters relating to forensic findings. On 29 October 2010 the appellant also sought to have his case referred on the basis of the Cadder decision, issued three days earlier. The Commission declined to make a reference on the grounds relating to forensic findings, saying in a statement of reasons dated 25 February 2011 that they did not believe that a miscarriage of justice might have occurred. In relation to Cadder, the Commission decided to defer their decision until judgment had been given in a number of appeals to this court. No issue is taken with that decision in this appeal. In response to further submissions on behalf of the appellant, relating to scientific matters and also making allegations of unfairness and oppression at the hearing of the second appeal, the Commission declined to make a reference on those grounds in a supplementary statement of reasons dated 30 September 2011. No issue is taken with that decision in this appeal. Following the giving of judgment by this court in the case of Ambrose v Harris [2011] UKSC 43; 2012 SC (UKSC) 53; [2011] 1 WLR 2435 and related appeals, the Commission addressed the Cadder ground in a statement of reasons dated 27 January 2012. They considered that, since the Crown had relied upon the appellants admission that sexual intercourse had occurred as corroboration of the complainers evidence in that regard, and no other corroborative evidence existed, there might have been a miscarriage of justice. The remaining question was whether it was in the interests of justice that a reference should be made. In that regard, the Commission noted the requirement to have regard to the need for finality and certainty in the determination of criminal proceedings, in accordance with section 194C(2) of the 1995 Act. They noted that the appellant had been convicted in 2002, long before the decision in Cadder or the judgments of the European Court of Human Rights on which it was based. They noted the history of the previous applications and appeals. They stated that they considered the following matters to be relevant: (1) The amount of time that had passed since the conviction. (2) That the appellant had never disputed that he had sexual intercourse with the complainer, and had relied on the interview at his trial in order to present his defence of consent. (3) That, in so far as the Crown had used the interview not only as corroboration of sexual intercourse having taken place, but also to undermine the appellants credibility, no objection had been taken at the trial (whereas objection had been taken, successfully, to the admissibility of a further interview). (4) That no issue had been raised in the two appeals as to the fairness of the manner in which the interview was conducted. In the light of these considerations, the Commission concluded that it was not in the interests of justice to refer the case back to the High Court. In the light of further submissions on behalf of the appellant, the Commission confirmed their decision in a supplementary statement of reasons dated 27 April 2012. The submissions argued that the appellants case should be regarded as exceptional, particularly because he had been unrepresented at the hearing of the second appeal and had lacked the necessary knowledge to raise a Cadder point. The Commission accepted, as they had in their earlier statement of reasons, that the appellant could not be criticised for raising the point only after the decision in Cadder, and considered that the reasons for his not having raised the point earlier were not relevant to the question of whether it was in the interests of justice to refer his case. In relation to that question, the Commission adhered to their earlier reasoning. They emphasised in particular the fact that the appellant had at no stage disputed the veracity of what he said to the police, together with the fact that he relied upon the interview in order to present his defence of consent. The proceedings below On 13 September 2012 the appellant commenced proceedings for judicial review of the Commissions decision not to refer his case back to the High Court on the Cadder ground. It was argued that the Commission had erred in taking account of the amount of time that had passed since the conviction, or had in any event attached undue weight to that consideration. It was also argued that the Commission should have given greater weight to the adverse impression which might have been created in the minds of the jury by the appellants attitude towards women, as revealed by the interview: an attitude described as one of flippancy, coarseness, indelicacy and selfishness. Finally, it was argued that notwithstanding what had been said by this court in Cadder about the need for finality in criminal proceedings, the appellants case should have been treated as exceptional, particularly since he had been unrepresented when his appeal was heard, and the Cadder appeal had then been pending. In those circumstances, it was argued, the High Court should have advised him to seek an adjournment of the hearing of his appeal. On 24 January 2013 the Lord Ordinary refused the application: [2013] CSOH 13. In a careful judgment, Lord Pentland considered fully the various points made on behalf of the appellant, and rejected each of them. His decision was upheld by the Extra Division on 6 November 2013: [2013] CSIH 101. The present appeal The issues raised by the appellant in the present appeal are stated to be whether the Commission erred in law in taking into account the following considerations, when, had Cadder applied, the interview that provided the corroboration of the Crown case would have been inadmissible and the appellant would not have been convicted: that the appellant had not disputed the truth of what he told the (1) police at interview; (2) that the appellant had not challenged the fairness of the police interview or its use at his trial in that, before Cadder, there was no basis upon which to do so; and (3) that the appellant made use of the interview at trial, when this was a course of action decided upon in circumstances forced on the appellant, namely that the interview was already before the jury. In relation to the first of these matters, Lord Pentland said: [I]t was clearly relevant for the respondents to recognise that the petitioner has never disputed the truth of what he told the police in his interview and, in particular, that he has never suggested that he did not have sexual intercourse with the complainer. What he now seeks to do is to take advantage of a subsequent change in the law rendering inadmissible evidence which was not in dispute at the trial, videlicet evidence that he admitted having intercourse with the complainer. It would, in my opinion, be repugnant to the interests of justice if the petitioner were now to be permitted to invoke Cadder for the purpose of ruling out uncontested evidence that was essential to the technical sufficiency of the Crown case at his trial. To do so would allow the petitioner to transform what was a non issue at the trial into an issue of critical importance years later. That would run counter to the principle of finality and certainty that is central to the fair working of the criminal justice system. I respectfully agree. The fact that the evidence in question was and remains undisputed is plainly relevant to an evaluation of whether it is in the interests of justice to make a reference. It would not normally be in the interests of justice to quash a conviction merely because, under the law as now understood, there was a lack of admissible corroboration of a fact which had never been in dispute. Counsel for the appellant submitted that, if the appellant had been offered the opportunity to consult a solicitor, and if (1) he had taken advantage of that opportunity, (2) he had been advised on corroboration, self incrimination and his right to remain silent, and (3) he had exercised his right to remain silent, then he might not have admitted having sexual intercourse, in which event the interview would not have provided the necessary corroboration that sexual intercourse had occurred. That also is a relevant consideration. So too, for that matter, are factors affecting the likelihood of each of those conditions being satisfied: for example, the fact that the appellant actually declined to have intimation of his being interviewed given to any solicitor (para 7 above), the fact that other potentially corroborative evidence was available, in the form of the semen found on vaginal swabs (para 7 above), and the fact that a person accused of rape might have been advised that the only defence, if sexual intercourse could be proved to have taken place, was one of consent, and that the credibility of such a defence would be enhanced if it were put forward at the earliest opportunity. The fact that it was because of the answers given at interview, and the admissibility of those answers under the law at that time, that the semen was not subjected to examination so as potentially to provide other corroborative evidence, is also relevant. The relevance of considerations such as these does not, however, in any way detract from the relevance of the fact that the truth of what was said at interview about sexual intercourse taking place was and remains undisputed. In relation to the second matter, Lord Pentland said: I also consider that it was plainly important for the respondents to acknowledge that in the course of two full appeals against his conviction the petitioner never challenged the fairness of the manner in which the police conducted the interview. Nor did he seek to argue on appeal that the use made of the interview by the Crown at his trial was unfair. I again agree. Counsel for the appellant argued that there was no basis on which the appellant could have challenged the fairness of the interview or its use at his trial, before Cadder. But that misses the point. The decision in Cadder established a new basis on which evidence of answers to police questioning might be inadmissible, but there were already other well established grounds of objection, including unfairness in the conduct of the interview or in the use made of it at the trial. The short point being made by the Commission was that, in the appellants case, unlike some others, the fairness of the conduct of the interview and the use made of it at the trial had not been challenged. That was plainly relevant to an evaluation of where the interests of justice lay. The third matter was not raised in quite the same way before the courts below, but Lord Pentland accepted that the fact that the appellant had chosen to rely on his police interview to present his defence to the jury was a relevant consideration. Again, I agree. Counsel for the appellant argued that this was a course of action decided upon in circumstances forced upon the appellant, namely that the interview was already before the jury. That is not a complete answer. Given that the appellants admission that sexual intercourse had taken place was admissible under the law as it then stood, he was entitled to have the whole of the interview placed before the jury, as a matter of fairness, so that the jury were aware that the admission was made in the context of his also maintaining that intercourse had been consensual. The result was that, although he was entitled to give evidence in his own defence, he did not have to do so in order for his defence to be placed before the jury: they had already heard his account to the police. He did not, therefore, have to expose his account to cross examination. That afforded him an opportunity which would not have existed if the interview had been inadmissible. In the event, he availed himself of that opportunity. That was a matter which could properly be taken into account by the Commission when evaluating the course of action which the interests of justice required. Counsel for the appellant also argued that the approach to the application of the interests of justice test in section 194C of the 2009 Act which had been adopted by the Commission in the present case was inconsistent with the approach to the application of the corresponding test in section 194DA by the High Court in M v HM Advocate; Gallacher v HM Advocate [2012] HCJAC 121; 2012 SCL 1027. It was argued that the case of Chamberlain Davidson v HM Advocate [2013] HCJAC 54; 2013 SCCR 295 was a good illustration of the approach proposed by the appellant. There are a number of difficulties with these arguments. One arises from the fact that the High Court has not itself seen its task in applying the interests of justice test in section 194DA as identical to that of the Commission applying the corresponding test under section 194C. In M v HM Advocate; Gallacher v HM Advocate, Lord Justice General Hamilton, delivering the opinion of the court, considered the role of the Commission and its relationship with the court, and stated: Although this court has been given the power to reject a reference in language that replicates the provision applicable to the Commission (section 194DA(1), (2)), it cannot be right for us simply to duplicate the Commissions function and give effect to our own view. In light of the impressive record of the Commission, it is unlikely that we will have cause to differ from its judgment on this point. I think that we are entitled to assume, unless the contrary is apparent, that the Commission has considered the criteria set out in section 194C and has duly made its independent and informed judgment on them. In my view, we should reject a reference only where the Commission has demonstrably failed in its task; for example, by failing to apply the statutory test at all; by ignoring relevant factors; by considering irrelevant factors; by giving inadequate reasons, or by making a decision that is perverse. (para 33) As the Lord Justice General pointed out in that passage, the Commission makes an independent judgment. It is therefore possible, as was noted in the Report of the Carloway Review (2011), that there may be cases in which the SCCRC and the High Court could reach a different decision on where the interests of justice may lie (para 8.2.11). A further difficulty with the argument is that the expression the interests of justice, which appears in both section 194C and section 194DA, is not susceptible of a precise legal definition which can be applied mechanically. It requires an evaluation of a broad nature, based on an assessment of the particular circumstances of individual cases. Thanks to the thoroughness of the Commissions reports and the High Courts judgments in the present case, this court has access to a wealth of information about the facts which led the Commission to conclude that a reference was not in the interests of justice. Its knowledge of the other cases relied on in argument is derived entirely from the judgments of the High Court in those cases, and is more limited. Certain points of distinction are however readily apparent. The cases of M v HM Advocate and Gallacher v HM Advocate, which were decided together, raised the question whether the court should reject two references under section 194DA. Each reference concerned the admission of a police interview prior to Cadder. In the case of M v HM Advocate (the subsequent stage of which is reported as RMM v HM Advocate [2012] HCJAC 157; 2013 JC 153), where the appellant had been convicted of rape, the statements made during the interview went to the issue of consent: in relation to that issue, the appellant gave several potentially incriminating answers to questions put to him. At his trial, he did not accept the truth of those answers, and gave evidence in his own defence. The interview was then used in cross examination, and in the prosecutors speech to the jury, to attack his credibility. There was also a lack of clarity in the verdict. The appellant was still serving his sentence. In Gallacher v HM Advocate, the appellant made admissions during a police interview which could be held to show special knowledge of a series of sexual offences. He claimed that the police had bullied him and briefed him as to the answers he should give to their questions. That, he maintained, was how he came to show special knowledge. The court allowed the references to proceed. In each of those cases, the circumstances were very different from those of the present case. None of the factors referred to in para 37 above appears to have been present. Most importantly, the statements in question in those cases went to an issue which was in dispute at the trial and remained in dispute. Their veracity was not accepted. The case of Chamberlain Davidson v HM Advocate was concerned with a conviction for attempted rape, where the appellant had told the police at interview that he had met the complainer in the street, had said hello, and had grabbed her wrists when she started to scream. The latter admission was the only corroboration of the complaint of assault. The Commission made a reference on grounds concerned with misdirection. They declined to make a reference on a Cadder ground, for similar reasons to those given in the present case: the appellant had served his sentence; all parties had proceeded in good faith on the understanding that the interview had been conducted fairly and that its contents were admissible; the appellant had never denied the veracity of the incriminating statement he had made; and he had relied on his police interview by way of his defence. The court decided not to reject the reference under section 194DA: [2012] HCJAC 120. Subsequently, in the exercise of its power under section 194D(4B) of the 1995 Act to grant leave for the appellant to found the appeal on additional grounds, the court allowed additional grounds of appeal to be received, including a ground raising a question as to the retroactive effect of the decision in Cadder: [2012] HCJAC 122. In the event, that point was not discussed at the hearing of the appeal. The Crown conceded that, if there was not a sufficiency of evidence without the police interview, the appeal must succeed. It succeeded on that basis. Nothing in that case suggests that the Commission erred in taking account of the matters mentioned in para 37 above. of, as the courts below correctly held. Conclusion It follows that the Commission did not err in any of the respects complained For these reasons, I would dismiss the appeal.

The appeal arises out of an application for judicial review of a decision taken by the Scottish Criminal Cases Review Commission (the Commission) under s.194B(1) of the Criminal Procedure (Scotland) Act 1995 (the 1995 Act) not to refer the appellants rape conviction to the High Court of Justiciary. In 2001 the appellant had sexual intercourse with a woman who then reported to the police that she had been raped. The appellant was interviewed by the police, and in accordance with practice and the law as it was understood at the time, he was not offered the option to consult a solicitor before the interview, and no solicitor was present during it. During the interview, he admitted having had sexual intercourse with the complainer, but maintained that it had been consensual. As a result of his admission, semen found on vaginal swabs was not subjected to DNA analysis. At trial, the appellant elected not to give evidence but relied on the interview as setting out his defence of consent. The appellant was convicted and sentenced to 5 years imprisonment. The appellant appealed against his conviction unsuccessfully. His case was also referred by the Commission, again without success. The appellant then applied to the Commission for a second referral of his case. Following the decision of the Supreme Court in Cadder v HM Advocate that article 6 of the European Convention on Human Rights required suspects to be permitted access to legal advice prior to and during interrogation by the police the appellant also sought to have his case referred on that basis. The Commission declined to make a reference on any of the grounds advanced. In relation to the Cadder ground, the Commission considered that since the Crown had relied upon the appellants admission that sexual intercourse had occurred as corroboration of the complainers evidence in that regard, and no other correlative evidence existed, there might have been a miscarriage of justice. However, the Commission did not believe it was in the interests of justice that a reference should be made, given the time that had passed since conviction, and that the appellant did not dispute the veracity of the interview or the fairness of the manner in which it had been conducted, and had relied on it at trial. The grounds for a reference set out in s.194C(1) were therefore not met. The appellant applied for judicial review of the Commissions decision. That application was refused by the Lord Ordinary and the ruling was upheld by the Extra Division. The appellant appealed to the Supreme Court. The Supreme Court unanimously dismisses Mr Gordons appeal. Lord Reed gives the judgment, with which the rest of the Court agrees. The Extra Division and the Lord Ordinary were correct to conclude that the Commission did not err in law in any of the ways suggested by the appellant. The Commission was right to take into account the fact that the appellant had not disputed the veracity of what he had told the police in the interview. The fact that the evidence in question was and remains undisputed is plainly relevant to whether it is in the interests of justice to make a reference. It would not normally be in the interests of justice to quash a conviction merely because, under the law as now understood, there was a lack of admissible corroboration of a fact which had never been in dispute. While it is a relevant consideration that if the appellant had been offered the opportunity to consult a solicitor, matters might have taken a different course, and the interview might not have provided the necessary corroboration that sexual intercourse had occurred, it is also relevant that it was because of the answers given at interview, and the admissibility of those answers under the law at the time, that the semen found on the swabs were not submitted to examination, so as potentially to provide other corroborative evidence. These considerations do not however detract from the relevance of the fact that the truth of what was said at interview was and remains undisputed. [37 39] The Commission was also correct to take into account the fact that the appellant had not challenged the fairness of the way in which the interview had been conducted or its use at the trial. Prior to Cadder there were well established grounds of objection on which the appellant could have relied in the event of unfairness in the conduct of the interview or the use made of it at the trial, and his failure to do so was plainly relevant to where the interests of justice lay. [40] It was also a relevant consideration that the appellant had relied on the interview in order to present his defence to the jury. The appellants argument was that this course of action was forced upon him. Although the appellants admission that sexual intercourse had taken place was admissible under the law as it then stood, he was entitled to have the whole of the interview placed before the jury so that they were aware that the admission was made in the context of his contention that the sexual intercourse had been consensual. The result was that, although the appellant was entitled to give evidence in his own defence, he did not have to do so in order for his defence to be placed before the jury. He could therefore avoid exposing his defence to cross examination. That afforded him an opportunity which would not have existed if the interview had been inadmissible. In the event, he availed himself of that opportunity. [41] The Commissions approach to the interests of justice test in s.194C of the Act was not inconsistent with the application in the case law of the corresponding test in s.194DA, which applied to the High Court. The High Court has not treated its decision under s.194DA as identical to that of the Commission under s.194C; although the power to refer is couched in the same language, the role of each body is different. Further, the authorities relied on by the appellant in any event concerned different circumstances. [42 50]

This is an appeal by leave of the Court of Appeal on a point of law arising in the course of the trial of the appellant, Jack Taylor, in the Crown Court at Exeter for aggravated vehicle taking, contrary to section 12A of the Theft Act 1968. The facts The facts can be shortly stated. On the evening of 23 June 2012, the appellant, who was in Exmouth, took a Ford Transit Tipper truck from a friend, David Marriott, in order to collect another friend from Exeter. The truck belonged to Marriotts employer, and the Crown alleges that it was taken without the owners consent. Having picked up the friend, the appellant was driving back to Exmouth when he collided on a bend in a narrow country lane with a scooter driven by Steven Davidson Hackett. The scooter slid under the wheels of the truck, and Davidson Hackett was killed. The appellant was later found to be over the drink drive limit. He was also uninsured. But the Crown, after a careful investigation of the accident, accepts that there was no evidence on which a jury could be sure that the manner of his driving was at fault or open to criticism. The statutory framework if Section 12 of the Theft Act provides that a person shall be guilty of an offence without having the consent of the owner or other lawful authority, he takes any conveyance for his own or anothers use or, knowing that any conveyance has been taken without such authority, drives it or allows himself to be carried in or on it. This a summary offence carrying a maximum sentence of six months imprisonment. There are a number of offences of varying degrees of gravity which may be committed by drivers whose manner of driving causes death, injury or damage. At the relevant time, they included manslaughter, causing death by dangerous driving, causing death by careless or inconsiderate driving, dangerous driving, careless or inconsiderate driving, causing death by careless driving when under the influence of drink or drugs, and various other offences involving drink or drugs. All of these offences require mens rea, generally provided by the absence of due care. The appellant was not charged with any of them, and in the light of the agreed facts about the manner of his driving, he could not have been convicted of any of them. Instead, he was charged with aggravated vehicle taking contrary to section 12A of the Theft Act 1968. Vehicle Taking Act 1992. It provides so far as relevant, as follows: Section 12A of the Theft Act was inserted by section 1 of the Aggravated 12A Aggravated vehicle taking (1) Subject to subsection (3) below, a person is guilty of aggravated taking of a vehicle if (a) he commits an offence under section 12(1) above (in this section referred to as a basic offence) in relation to a mechanically propelled vehicle; and (b) it is proved that, at any time after the vehicle was unlawfully taken (whether by him or another) and before it was recovered, the vehicle was driven, or injury or damage was caused, in one or more of the circumstances set out in paragraphs (a) to (d) of subsection (2) below. (2) The circumstances referred to in subsection (1)(b) above are that the vehicle was driven dangerously on a road (a) or other public place; that, owing to the driving of the vehicle, an (b) accident occurred by which injury was caused to any person; (c) that, owing to the driving of the vehicle, an accident occurred by which damage was caused to any property, other than the vehicle; (d) that damage was caused to the vehicle. (3) A person is not guilty of an offence under this section if he proves that, as regards any such proven driving, injury or damage as is referred to in subsection (1)(b) above, either the driving, accident or damage referred to in (a) subsection (2) above occurred before he committed the basic offence; or (b) he was neither in nor on nor in the immediate vicinity of the vehicle when that driving, accident or damage occurred. At the time when section 12A was enacted, it carried a maximum sentence of two years imprisonment, or five years if the accident caused the death of the victim. The five years was increased by section 285(1) of the Criminal Justice Act 2003 to 14 years. The Crown contends that the only element of fault required for the offence under section 12A(2)(b) is the unauthorised taking of the vehicle, and that no further fault on the part of the defendant need be proved in relation to the occurrence of the accident. The proceedings The appellant was charged on an indictment containing five counts. Of these Counts 1, 2 and 5 can for present purposes be ignored. Count 1 related to a previous occasion; Count 2 related only to David Marriot; and the Crown decided not to proceed on Count 5. That left only Count 3, which charged him with aggravated vehicle taking; and Count 4, which charged him jointly with Marriott with causing the death of Mr Davidson Hackett while driving uninsured, contrary to section 3ZB of the Road Traffic Act 1988 (as inserted by section 21(1) of the Road Safety Act 2006). On 31 July 2013, the Supreme Court gave judgment in R v Hughes [2013] 1 WLR 2461, holding that an offence under section 3ZB of the Road Traffic Act 1988 required proof that there was some element of fault in the defendants control of the vehicle, which contributed in a more than minimal way to the victims death. The case came before the Recorder of Exeter (His Honour Judge Gilbert QC) on 13 January 2014. At the opening of the case, an application was made on behalf of both defendants to vacate Count 4 in the light of the decision in Hughes. After an adjournment overnight, the Crown accepted that there was no fault in the manner of Mr Taylors driving and announced that they would offer no evidence on Count 4. A verdict of Not Guilty was accordingly directed on that count. The question then arose whether the decision in Hughes also ruled out a conviction on Count 3. The Recorder was invited by both parties to rule on this point. The Crown sought to distinguish Hughes. It relied on the decision of the Court of Appeal (Criminal Division) in R v Marsh [1997] 1 Cr App R 67 as authority for the proposition that there was no element of fault in the offence of aggravated vehicle taking. The Recorder decided that point against them. He ruled that fault had to be proved in relation to the accident. The Crown asked for leave to appeal his ruling on the count of aggravated vehicle taking, and the proceedings were adjourned until the appeal had been disposed of. The appeal was heard on 9 April 2014 by the Court of Appeal (Criminal Division) (Pitchford LJ, Sweeney J and HHJ Bourne Arton). They allowed the appeal on the ground that Marsh remained binding authority, but certified a question of general public importance and gave leave to appeal to the Supreme Court. The certified question was as follows: Is an offence contrary to section12A(1) and 2(b) of the Theft Act 1968 committed when, following the basic offence and before recovery of the vehicle, the defendant drove the vehicle, and without fault in the manner of his driving the vehicle was involved in an accident which caused injury to a person. The authorities Three cases are directly in point, R v Marsh [1997] 1 Cr App R 67, R v Williams [2011] 1 WLR 588, and R v Hughes [2013] 1 WLR 2461. The facts of Marsh were in the relevant respects indistinguishable from those of the present case, except that the injury to the victim was not fatal. Like the present case, it turned on the meaning of the words owing to the driving of the vehicle, an accident occurred by which injury was caused to any person in section 12A(2)(b). The Court of Appeal ruled that fault in relation to the accident was not an element of the offence. The judgment of the court was delivered by Laws J. He held that the only relevant requirement of the subsection was that the driving of the vehicle should have been the cause of the accident, and that it was not legitimate to imply words which would require proof that the manner of the driving was the cause of the accident. He pointed out that section 12A(2)(a) expressly required that the vehicle should have been driven dangerously, but that no corresponding requirement of fault could be found in subsections (b), (c) or (d). He therefore concluded that once it was established that the basic offence of taking the vehicle had been committed, no further element of fault was required. In Williams, the offence charged was causing death by driving when unlicensed, disqualified or uninsured, contrary to section 3ZB of the Road Traffic Act 1988. The statute provided that a person committed an offence if, being unlicensed, uninsured or disqualified, he causes the death of another person by driving a motor vehicle on a road. (The reference to disqualified drivers has since been removed, and separate offences created to cover them.) The facts were that the defendant was driving through Swansea, without a licence or insurance, when a pedestrian crossed the central reservation and stepped in front of his car. On the facts, the accident was entirely the fault of the pedestrian. Nevertheless, the trial judge ruled that fault was not an element of the offence, and the defendant was convicted. His ruling was upheld by the Court of Appeal. They considered, at para 14, that the approach of this court in Marsh applies even more clearly to the offence under section 3ZB of the 1988 Act. In Hughes, where the same offence was charged, the facts were remarkable. Mr Hughes was driving his familys camper van, when a vehicle approached in the other direction, veering all over both sides of the road. The other driver, a Mr Dickinson, was overtired, having driven a long distance, and high on heroin. There was a collision in which Mr Dickinson was killed. It was common ground that Mr Hughes driving was faultless and that there was nothing that he could have done to avoid the accident. But he was driving without a licence or insurance, and was prosecuted under section 3ZB for causing Mr Dickinsons death. The trial judge ruled that he had not committed the offence because he had not caused the death. The Court of Appeal [2011] 4 All ER 761 overturned the ruling, once again applying Marsh. It held, as it had done in Williams, that the approach of this court in Marsh applies even more clearly to the offence under section 3ZB. The decision was reversed in the Supreme Court. The judgment of the court was delivered by Lord Hughes and Lord Toulson. They started by drawing attention to the consequences of the Court of Appeals decision at para 9: The difficulty, however, exposed by the present case and others like it is that instead of Mr Hughes being punished for what he did wrong, namely for failing to pay his share of the cost of compensation for injuries to innocent persons, he is indicted and liable to be punished for an offence of homicide, when the deceased, Mr Dickinson, was not an innocent victim and could never have recovered any compensation if he had survived injured. A further difficulty is that since using a car uninsured is an offence of strict liability, it is an offence which may well be committed not only by the likes of Mr Hughes, who deliberately fail to take out insurance, but also by those who overlook a renewal notice, or who find themselves uninsured because of an office mistake by brokers, or because they have driven someone elses car when both they and the owner believed there was valid insurance but in fact there was not, for example because a condition in the policy had been overlooked. If the ruling in the present case is correct, all such persons will be guilty of a very serious offence of causing death by driving if a fatal collision ensues, even if they could have done nothing to avoid it. Has Parliament used language which unambiguously has such far reaching effects? The argument of the Crown, as summarised at para 15 of the judgment, was that the object of the enactment was to impose criminal liability for a death if it involved the presence of the defendant at the wheel of a car on the road where he had no business to be. This courts reasons for rejecting that argument in Hughes may be summarised as follows: (1) The statutory requirement that the driving should cause the death was not satisfied if all that could be shown was that the accident would not have happened if the uninsured driver of the car had not been on the road. The fact that the car was on the road was a precondition of the accident, and perhaps the occasion for it, but was not the effective cause or even one among a number of effective causes: By the test of common sense, whilst the driving by Mr Hughes created the opportunity for his car to be run into by Mr Dickinson, what brought about the latters death was his own dangerous driving under the influence of drugs. It was a matter of the merest chance that what he hit when he veered onto the wrong side of the road for the last of several times was the oncoming vehicle which Mr Hughes was driving. He might just as easily have gone off the road and hit a tree, in which case nobody would suggest that his death was caused by the planting of the tree, although that too would have been a sine qua non. (para 25) (2) In the absence of a test of effective causation, the offence would be committed even in a case where the casualty resulted from the deliberate act of the victim, as in the case of the suicide or attempted murder considered in para 16 of the judgment. (3) The culpability of the defendants conduct in taking the vehicle in the first place could not logically constitute the mens rea appropriate to an offence the essence of which that it caused a mans injury or death. To say that he is responsible because he ought not to have been on the road is to confuse criminal responsibility for the serious offence of being uninsured with criminal responsibility for the infinitely more serious offence of killing another person. (para 17) (4) The fact that there were other offences which were unquestionably fault based, including the offence of causing death by careless or inconsiderate driving, which was created by the same statute, did not mean that there was no element of fault in the offence of causing death while driving unlicensed or uninsured. It was not uncommon for the elements of different offences to overlap, and for particular offences to add little to those which already exist. (5) The gravity of any offence of homicide, and the potential severity of the penalties, meant that if Parliament intended these consequences to follow in a case where the conduct of the defendant had not caused the death, it must make its intention unequivocally clear, not least so that the court could be satisfied that the legislators had confronted the moral dilemma with knowledge of the consequences. Should we depart from Hughes? The Crowns primary case on this appeal was that the decision in Hughes should be overruled under Practice Statement (Judicial Precedent) [1966] 1 WLR 1234. The main point urged in support of this course was that that the Crown had conceded in Hughes that the absence of fault could not be irrelevant in all circumstances. It is correct that when taxed with some of the more extreme consequences of the Crowns case, Counsel beat a tactical retreat on this point. He accepted that the defendant could not be convicted if the death was due to the deliberate act of the deceased. As Lord Hughes and Lord Toulson pointed out (para 16), once that is accepted, it is difficult to see where else a line is to be drawn than by following the normal approach to causation taken by the common law. Counsel submitted that the exception could be rationalised on the ground that the deliberate act of the victim broke the chain of causation. But as the judgment points out, that presupposes that there is a chain of causation to be broken. What is clear is that the concession did not displace the need for argument or analysis. It simply exposed the weakness of the Crowns case. Lord Hughes and Lord Toulson dealt with the matter as an issue of principle. It is difficult to imagine that their conclusion or their reasons would have been any different if the Crown had stuck to its original, extreme position. In those circumstances, the only basis on which it could be right to depart from the decision now is that the court as presently constituted takes a different view. A mere difference of opinion can rarely justify departing from an earlier decision of this court. I can see nothing in the present case which could justify our taking such a course, and I would decline to do so. Can Hughes be distinguished? The next question is whether, on the footing that Hughes is binding for what it decides, it can be distinguished. The Supreme Court left open the question how far its reasoning could be applied to the offence under section 12A of the Theft Act and it expressed no view on the correctness of the decision in Marsh. This was because there were differences between the offences created by section 3ZB of the Road Traffic Act 1988 and section 12A of the Theft Act 1968 and differences in the statutory language which created them. Four differences are, at least potentially relevant: (1) Unlike driving while unlicensed or uninsured, which are offences of strict liability, section 12A of the Theft Act requires that the defendant should have committed the basic offence of taking the vehicle without consent. That is not an offence of strict liability. Under section 12(1) knowledge of the absence of authority is an essential element. (2) Although aggravated vehicle taking carries a higher sentence if the vehicle is involved in a fatal accident, the death of the victim is not an element of the offence. This is not therefore strictly speaking an offence of homicide. (3) The offence under section 3ZB is causing the death of another person by driving a motor vehicle on a road. By comparison, it can be argued that the driving is merely incidental to the offence of aggravated vehicle taking as defined in section 12A of the Theft Act. The dangerous driving, personal injury or damage to property which constitute the first three aggravating circumstances must have occurred after the taking of the vehicle and before its recovery, but there is no requirement that the defendant should have been driving it, provided that he was party to the taking of the vehicle and was in or in the immediate vicinity of the vehicle when the driving, accident or damage occurred. He may have been a passenger or standing by the kerbside. Indeed, in the circumstances referred to in section 12A(2)(d) (that damage was caused to the vehicle) it is not even necessary that the vehicle should have been driven at the time of the damage. These considerations might be taken to suggest that it is the harm rather than the driving which is the gravamen of the offence. (4) Section 12A(3) makes special defences available in two specific cases where the defendant could not be held responsible, namely where the damage occurred before he took the vehicle and where he was neither in nor in the vicinity of the vehicle at the relevant time. This would arguably have been unnecessary if the offence was subject to a more general requirement of fault. I shall return to these factors below. For present purposes it is enough to observe that the essential point made in Hughes is common to both offences. The phrase caused the death of another person by driving a motor vehicle on a road. (section 3ZB of the Road Traffic Act 1988) and the phrase owing to the driving of the vehicle, an accident occurred by which injury was caused to any person (section 12A(2)(b) of the Theft Act 1968) both posit a direct causal connection between the driving and the injury. If the requirement of causation is satisfied by the mere fact that the taking of the vehicle accounted for its being in the place where the accident occurred, then all of the anomalous consequences which this court regarded as extraordinary in Hughes apply equally to the offence under section 12A. It means that the defendant is liable to be convicted and sentenced to a long period of imprisonment on account of an aggravating factor for which he bears no responsibility. Strict liability This brings me to the fundamental reason why in my opinion this appeal must succeed, and why I would have taken the same view even if I had felt able to distinguish the language of section 12A of the Theft Act or depart from the reasoning in Hughes. The Crowns argument effectively invites the court to treat the section as imposing strict liability for the aggravating factors which differentiate this offence from the basic offence under section 12, in circumstances where that course is neither necessary nor warranted by the language of the Act. The full definition of every crime, said Stephen J in R v Tolson (1889) 23 QBD 168, 187, contains expressly or by implication a proposition as to a state of mind. The reason was stated in the same case by Wills J, at pp 171 172: It is, however, undoubtedly a principle of English criminal law, that ordinarily speaking a crime is not committed if the mind of the person doing the act in question be innocent. It is a principle of natural justice and of our law says Lord Kenyon, CJ, that actus non facit reum, nisi mens sit rea. The intent and act must both concur to constitute the crime: Fowler v Padget (1798) 7 TR 509, 514. The leading modern case to this effect is Sweet v Parsley [1970] AC 132, in which the rule was reaffirmed by the House of Lords after a period in which it had been somewhat inconstantly applied. Lord Reid expressed the general principle at p 149: it is firmly established by a host of authorities that mens rea is an essential ingredient of every offence unless some reason can be found for holding that that is not necessary. It is also firmly established that the fact that other sections of the Act expressly require mens rea, for example because they contain the word knowingly, is not in itself sufficient to justify a decision that a section which is silent as to mens rea creates an absolute offence. In the absence of a clear indication in the Act that an offence is intended to be an absolute offence, it is necessary to go outside the Act and examine all relevant circumstances in order to establish that this must have been the intention of Parliament. I say must have been because it is a universal principle that if a penal provision is reasonably capable of two interpretations, that interpretation which is most favourable to the accused must be adopted. The rule was never absolute, even in late Victorian England, when Tolson was decided. But in general a criminal offence will require proof of mens rea unless strict liability is either required by the clear language of the act or necessary for the achievement of its purpose. Cases in the latter category usually involve regulatory statutes. Wills J, immediately after the passage which I have quoted, gave as examples bye laws regulating the width of thoroughfares, the height of buildings, the thickness of walls, and a variety of other matters necessary for the general welfare, health, or convenience. Such legislation generally has two characteristic features. The first is that its requirements are founded on collective convenience rather than moral imperatives. Lord Reed in Sweet v Parsley called such offences quasi criminal. But, as he observed at p 149, where the offence carries a significant moral stigma, it is necessary to consider whether, in a case of this gravity, the public interest really requires that an innocent person should be prevented from proving his innocence in order that fewer guilty men may escape. The second characteristic feature of offences of strict liability is that, although fault in the actual commission of the offence may be unnecessary, there are nonetheless positive steps that the prospect of criminal liability may cause people to take in order to prevent the offence from occurring. Lord Diplock put the point concisely in the same case, at p 163: Where penal provisions are of general application to the conduct of ordinary citizens in the course of their everyday life the presumption is that the standard of care required of them in informing themselves of facts which would make their conduct unlawful, is that of the familiar common law duty of care. But where the subject matter of a statute is the regulation of a particular activity involving potential danger to public health, safety or morals in which citizens have a choice as to whether they participate or not, the court may feel driven to infer an intention of Parliament to impose by penal sanctions a higher duty of care on those who choose to participate and to place upon them an obligation to take whatever measures may be necessary to prevent the prohibited act, without regard to those considerations of cost or business practicability which play a part in the determination of what would be required of them in order to fulfil the ordinary common law duty of care. But such an inference is not lightly to be drawn, nor is there any room for it unless there is something that the person on whom the obligation is imposed can do directly or indirectly, by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to influence or control, which will promote the observance of the obligation. (emphasis added) The main reason why the House of Lords declined to hold Miss Sweet strictly liable for the fact that her tenants kept cannabis in the rooms which she let out to them was that there were no reasonable steps which she could have taken to stop them doing it or discover that they had: see in particular pp 150F H (Lord Reid), 154 5 (Lord Morris), 157B D (Lord Pearce). Section 12A The first point to be made about section 12A of the Theft Act is that it is in no sense a regulatory or quasi criminal enactment. Aggravated vehicle taking is a serious crime. Driving offences causing serious injury or damage are a source of growing public concern. The aggravating factors which differentiate the section 12A offence from the basic offence expose the defendant to a maximum sentence of 14 years imprisonment, the same as for causing death by dangerous driving. Although the death of the victim is not strictly speaking an element of the offence, the increased maximum sentence for cases where someone has been killed reflects the real stigma associated with it. Even where the only damage is to property, the maximum sentence is two years. The one respect in which section 12A imposes strict liability is that the offence may be committed not only by the driver but by anyone else who was party to the basic offence under section 12(1) and is in or in the immediate vicinity of the vehicle at the time of the dangerous driving, injury or damage. That emerges unequivocally from the statutory language. But it is important to note that it is also a rational response to the mischief of the enactment, which has close analogies to the principle underlying cases of strict liability identified by Lord Diplock in Sweet v Parsley. The Act treats someone who has been party to the taking of a vehicle without authority as having control over it thereafter. He is in a position to take positive steps to ensure that it is driven safely and not in a manner which causes personal injury or damage to property. That is the rationale of the proviso that he must have been in or in the immediate vicinity of the vehicle at the time when the dangerous driving, injury or damage occurred. His responsibility continues to be engaged while he is present. However, it is one thing for the legislature to make a person who has taken a car without authority responsible for the fault of another person who drives it in his presence. It is another thing altogether to make him responsible for personal injury or damage which could not have been prevented, because it occurred without fault or was entirely the fault of the victim. That would be a sufficiently remarkable extension of the scope of the strict liability to require clear language, such as the draftsman has actually employed to impose liability on a taker who is not the driver. There is no such language in section 12A. Of the four aggravating circumstances identified in subsection (2), (a) expressly imports a requirement of fault (the car must have been driven dangerously), while (b), (c) and (d) contain nothing which expressly excludes such a requirement. As Lord Reid explained in Sweet v Parsley, at p 149D E, this difference cannot itself be enough to make (b), (c) and (d) operate independent of fault. On the contrary, in the case of (b) and (c), it is implicit in the requirement that the accident must have occurred owing to the driving of the vehicle, that there will have been something wrong with the driving. As this court pointed out in Hughes, the driving cannot be said to have caused the accident if it It follows from the admitted absence of fault in the driving of the vehicle that merely explained how the vehicle came to be in the place where the accident occurred. Application to the facts the driving did not cause the death of Mr Davidson Hackett. The Crown ran an alternative argument to the effect that excess of alcohol in the appellants blood at the time of the accident constituted sufficient fault to go to the jury. This was said to be because if he had been sober he would not have been driving at all, [and] the fatal accident would not have happened. To my mind this argument is misconceived. The relevant fault is the fault in the driving which is necessary to establish the causal connection between the driving and the accident. The fact that the appellant had excess alcohol in his blood establishes that he was guilty of the summary offence under section 5(1)(a) of the Road Traffic Act 1988, but not that this circumstance had anything to do with the accident. On the agreed facts, it had none. I need not therefore comment on the oddity of the suggestion that he was only driving his friend back to Exmouth because he had drunk too much and would not have driven if he had been sober. Disposition I would express the test applicable in this case in the same terms as Lord Hughes and Lord Toulson expressed it in Hughes at para 36. There must be at least some act or omission in the control of the car, which involves some element of fault, whether amounting to careless/inconsiderate driving or not, and which contributes in some more than minimal way to the death. For these reasons I would allow the appeal and answer the certified question no.

Under section 12A of the Theft Act 1968 the offence of aggravated vehicle taking is committed where a person has committed the basic offence of taking a vehicle without authority, and owing to the driving of the vehicle, an accident occurred by which injury was caused to any person (s12A (2) (b)). If the injury is fatal, the offence carries a maximum of 14 years imprisonment. On 23 June 2012, the appellant and another man called Marriott took a van belonging to Marriots employer, without the latters consent. While driving it, he collided with a scooter on a bend in a narrow country lane. The driver of the scooter was killed, and the appellant was later found to be over the drink drive limit and uninsured. The appellant was charged jointly with Mr Marriott with aggravated vehicle taking contrary to s12A of the Theft Act 1968 and with causing the death of the scooter driver whilst uninsured contrary to s3ZB of the Road Traffic Act 1988. The Crown accepted that there was no fault in the manner of the appellants driving. A Not Guilty verdict was therefore directed on the Road Traffic Act count, in accordance with the decision in R v Hughes [2013] WLR 2461. The judge held that fault also had to be proved in relation to the accident on the aggravated vehicle taking count; a decision which the Crown appealed. The Court of Appeal allowed the appeal, relying on R v Marsh [1997] 1 Cr App R 67, in which it was held that no element of fault was required in the offence of aggravated vehicle taking. But it certified a question of law of general public importance for consideration by the Supreme Court, namely Is an offence contrary to s12A (1) and 2(b) of the Theft Act 1968 committed when, following the basic offence and before recovery of the vehicle, the defendant drove the vehicle, and without fault in the manner of his driving the vehicle was involved in an accident which caused injury to a person. The Supreme Court unanimously allows the appeal, holding that the driving must have been at fault for a person to be convicted of aggravated vehicle taking under s12A of the Theft Act 1968. Lord Sumption gives the judgment. The reasoning in R v Hughes cannot be distinguished, because the offences under s12A(2)(b) of the Theft Act 1968 and s3ZB of the Road Traffic Act 1988 are both drafted in terms which require a direct causal connection between the driving and the injury. [20 22; 30]. Strict liability is typically imposed where the enactment is regulatory or quasi criminal. Aggravated vehicle taking under s12A is neither: it is a serious crime, exposing defendants to the possibility of much longer maximum sentences. It imposes strict liability only to the extent that anyone who was party to the taking of the vehicle (and in the immediate vicinity at the time of the injury) commits the offence, whether or not he was driving at the time. The appellants driving explained how the vehicle came to be in the place where the accident occurred, but cannot be said to have caused it [23 29]. The test is as set out in R v Hughes: there must be at least some act or omission in the control of the car which involves some element of fault, whether amounting to careless/inconsiderate driving or not, and which contributes in some more than minimal way to the death [30; 32 3]. This summary is provided to assist in understanding the Courts decision. It does not form part of the reasons for the decision. The full judgment of the Court is the only authoritative document. Judgments are public documents and are available at: http://supremecourt.uk/decided cases/index.html

The Family Law (Scotland) Act 1985 (the 1985 Act) brought about a radical reform of financial provision on divorce in Scotland. This appeal raises questions of statutory interpretation in relation to both the 1985 Act and subordinate legislation made under that Act. The appellant (Mrs McDonald) seeks a pensions sharing order under section 8(1)(baa) of the 1985 Act on her divorce from her husband (Mr McDonald) on the basis that his pension forms part of the matrimonial property which is taken into account in fixing financial provision. It is a central principle in the 1985 Act relating to such financial provision that the net value of the matrimonial property should be shared fairly between the parties to the marriage. This appeal raises the question as to what proportion of a persons pension rights falls within the definition of matrimonial property. In particular, is it necessary that the holder of the pension rights contributed to his or her pension during the marriage in order for any part of his or her interest in the pension to be matrimonial property? The facts can be stated briefly. Mr McDonald worked as a miner for British Coal. He joined the British Coal Staff Superannuation Scheme (the scheme) on 11 December 1978 when he was aged 25 and began contributing to it. He married Mrs McDonald on 22 March 1985. Shortly afterwards, as a result of a leg injury, he was found to be unfit to continue working as a miner. His disability entitled him to retire from employment early on grounds of ill health and to receive a pension income before his normal retiring age. When he decided to exercise that right, he was only 32 years old and had completed only six years and 243 days of pensionable service. He stopped contributing to the scheme on 10 August 1985 and has received a pension since then. As a result, between 11 December 1978 and 10 August 1985 Mr McDonald was a member of and contributor to the scheme; since then he has been a member in receipt of income benefits under the scheme. Mr and Mrs McDonald ceased to cohabit on 25 September 2010. As I explain below, the date of final separation is an important date for ascertaining matrimonial property under the 1985 Act and is one of the dates referred to in that Act as the relevant date. It is in this case the relevant date. Further, as I explain below, section 10(5) of the 1985 Act treats as matrimonial property the proportion of any rights or interests of either person in any benefits under a pension arrangement which is referable to the period [during the marriage but before the relevant date] (emphasis added). Subordinate legislation, which I discuss in paras 20 31 below, has provided for the valuation of a persons rights or interests in a pension arrangement by reference to what is known as the cash equivalent transfer value (CETV). British Coal has provided a figure for the CETV of Mr McDonalds pension rights which had accrued in the scheme on the relevant date. That value is 172,748.38. This figure reflects not only the capitalised value of the pension then in payment but also a spouses pension payable to a surviving spouse on Mr McDonalds death. As discussed below, the subordinate legislation also provides a formula for apportioning the CETV to ascertain what part of it is matrimonial property. The dispute between the parties relates to that formula. The dispute is as to whether in ascertaining the matrimonial property under the 1985 Act the court should apportion the value of Mr McDonalds pension rights (a) by reference only to the period in which he was an active member of the scheme (ie from 11 December 1978 to 10 August 1985) (an active member being a person who is in pensionable service under an occupational pension scheme: Pensions Act 1995, section 124(1)) or (b) by reference to the period in which he was a member of the scheme, both when in pensionable employment and when in receipt of income benefits until the relevant date (ie from 11 December 1978 to 25 September 2010). The parties helpfully agreed in a joint minute that if the CETV is to be apportioned by reference to the period in which Mr McDonald was an active member of the scheme, the value of his interest in the pension benefits which was matrimonial property is 10,002. They also agreed that if the apportionment is by reference to the period of his membership of the scheme, both when in pensionable employment and also when drawing a pension, that value is 138,534. Sheriff Holligan in a judgment dated 12 December 2013 concluded that the first method was the correct one: only the period of active membership was relevant. In reaching that view, he relied on the wording of a formula in the relevant subordinate legislation, the Divorce etc (Pensions) (Scotland) Regulations 2000 (SSI 2000/112) (the 2000 Regulations), which I discuss below. Secondly, he saw that method as being consistent with what he saw as the general principles of the 1985 Act which sought to share wealth accumulated by a spouse over the period of the marriage by treating as matrimonial property only those assets which a spouse acquired during the marriage and before the relevant date. Mrs McDonald appealed to the Inner House of the Court of Session. An Extra Division of the Inner House (Lady Smith, Lord Malcolm and Sheriff Principal Abercrombie) heard the appeal and on 11 August 2015 by majority (Lady Smith dissenting) dismissed the appeal. The majority adopted a purposive approach to the interpretation of the relevant provisions of the 1985 Act and the 2000 Regulations and in substance agreed with the sheriffs reasoning. The majority emphasised the idea that matrimonial property was, as a general rule, confined to assets acquired during the marriage and before the relevant date. They also relied on the formula in the 2000 Regulations. Mrs McDonald appeals to this court. Counsel for Mr McDonald advanced arguments on similar lines to those which the Sheriff and the majority of the Inner House upheld. This appeal raises questions of statutory interpretation both in relation to the 1985 Act and also the 2000 Regulations. I set out below the reasons why I would allow this appeal. The aims of the Family Law (Scotland) Act 1985 The 1985 Act was enacted by the United Kingdom Parliament in response to recommendations of the Scottish Law Commission (the Commission) in its report Family Law: Report on Aliment and Financial Provision (1981) (Scot Law Com No 67). The principal defects of the prior law in relation to financial provision on divorce, which the Commission identified (paras 1.5 and 1.6), were that it identified no objectives or governing principles and that the court had an inadequate range of powers. The Act seeks to remedy those problems. It deals with the first problem by setting out in section 9 the principles which the court would apply in deciding what order for financial provision it would make. Section 8(2) requires the court to make orders which are justified by the section 9 principles and which are reasonable having regard to the resources of the parties. The principle relevant to this appeal is the first which is set out in section 9(1)(a), namely that the net value of the matrimonial property should be shared fairly between the parties to the marriage. Section 10 addresses the concept of matrimonial property. Section 10(1) establishes a presumption that the fair sharing of such property under section 9(1)(a) is equal sharing unless other proportions are justified by special circumstances. Although not directly relevant to this appeal, it is important to observe that the presumption of equal sharing of matrimonial property applies only to the section 9(1)(a) principle; the 1985 Act in the other sub paragraphs of section 9(1) contains other principles which inform the courts decision making and introduce flexibility into the award of financial provision. These principles include (i) that fair account be taken of any economic advantage derived by either party from both financial and non financial contributions by the other and of economic disadvantage suffered in the interests of the family (section 9(1)(b)), (ii) the fair sharing of the economic burden of caring for a child of the marriage after divorce (section 9(1)(c)), (iii) financial provision for up to three years for a person who has been dependent on the financial support of the other person (section 9(1)(d)), and (iv) the need for an award of financial provision for a reasonable period to relieve a person of serious financial hardship as a result of the divorce (section 9(1)(e)). Further flexibility is introduced by the recognition in section 10(1) that there may be special circumstances for departing from the equal sharing of matrimonial property in applying the section 9(1)(a) principle. Those circumstances include but are not confined to the circumstances which are specified in section 10(6). Section 10(2) provides that the net value of matrimonial property is the value at the relevant date after deduction of debts then outstanding. Section 10(3) defines the relevant date as including the date when the parties ceased to cohabit, which is the date applicable in this case (para 3 above). Section 10(4) is an important provision because it establishes a norm that matrimonial property is property acquired by either or both of the parties during the marriage but before the relevant date. Section 10(4) provides: Subject to subsection (5) below, in this section and section 11 of this Act the matrimonial property means all the property belonging to the parties or either of them at the relevant date which was acquired by them or him (otherwise than by way of gift or succession from a third party) before the marriage for use by them as a family home or as furniture or plenishings for such home; or during the marriage but before the relevant date. The requirement in this sub section that the property is acquired during the marriage but before the relevant date has influenced the courts below in their assessment of statutory purpose when adopting a purposive approach to the following sub section, which establishes what part of a persons interest in a pension arrangement falls within matrimonial property. But I observe that the opening words of subsection (4) above carve out subsection (5) from that requirement. Section 10(5), which is the provision in issue in this appeal, provides: The proportion of any rights or interests of either person under a life policy or similar arrangement; and in any benefits under a pension arrangement which either person has or may have (including benefits payable in respect of the death of either person) which is referable to the period to which subsection (4)(b) above refers shall be taken to form part of the matrimonial property Section 27(1) was amended in 2000 to add a definition of a pension arrangement as meaning any occupational pension scheme, a personal pension scheme, a retirement annuity contract and specified annuities and insurance policies. The precursor of section 10(5), as originally framed by the Commission as clause 10(4) of the draft Bill attached to its report, referred to rights or interests under a life policy or occupational pension scheme or similar arrangement but otherwise was to the same effect as the current section 10(5). In its commentary on the draft subsection the Commission explained the recommended provision in these terms: Rights under life policies, pension funds and similar arrangements are often built up over many years. This subsection makes it clear that the proportion referable to the period from the marriage to the final separation is to be regarded as matrimonial property and subject to the same rules as any other item of matrimonial property. (see paragraph 3.73) Paragraph 3.73 of the report stated: Life insurance policies and pension schemes are important ways of saving for the future. In most marriages at least one of the spouses has rights under one or other of them. Where such rights have been acquired wholly during the period from marriage to final separation the value of these rights would constitute matrimonial property. In many cases, however, rights under life policies or pension schemes or similar arrangements will have been built up partly before and partly after the marriage. In such cases we think that only the proportion which is attributable to the period between the marriage and the final separation should be treated as matrimonial property. Paragraph 3.77 spoke of the sharing of savings made during the marriage, including savings made by means of life policies or retirement pension schemes. But it is not clear from those paragraphs whether the Commission sought to confine the scope of such sharing to active saving or included savings created by the passive growth of the relevant fund or the passive accrual of pension rights by survival over time. The answer must be found in the wording of the enacted legislation. The focus in section 10(5) is on the proportion of rights or interests under a pension arrangement referable to the specified period and not on the acquisition of the rights by a party to the marriage during that period. Prima facie the proportion of rights under a pension arrangement referable to a specified period would reflect the enhancement in value of the pension arrangement during that period both by the plan holders investment of further funds in the arrangement and by the passive growth in the value of the already acquired fund. Similarly, where there is no fund, the enhancement in the value of pension rights by survival during the specified period is referable to that period. If Parliament had intended that the proportion of the rights or interests be determined by the ratio of the part of the fund created by contributions to the arrangement during the marriage until the relevant date to the value of the total fund at that date, it could have said so. Section 10(5) could nonetheless achieve a close approximation of such a result in relation to some policies and pension schemes which involve the regular payment of the similar sums year on year. But other arrangements, including personal pension schemes, may involve the payment of differing sums at irregular intervals. Thus, suppose Mr A has a personal pension scheme in which he invested 2,500 each year for ten years before his marriage. On marrying, he encountered other demands on his income and was able to pay into his pension scheme only 1,500 in year four and 1,000 in year eight of his marriage. Mr and Mrs A separated finally at the end of the tenth year of their marriage. In such a case there will have been contributions both before and after the marriage, but a time related ratio would not remotely approximate to the ratio of pre marriage and post marriage contributions. As Lady Smith has recorded in her opinion (para 20), uncertainty about how to value a persons interest in a pension arrangement under section 10(5), and the delay and expense incurred in litigation as a result, including the obtaining of competing actuarial valuations using differing methods, led to the passing of subordinate legislation. The Divorce etc (Pensions) (Scotland) Regulations 1996 (SI 1996/1901), which were made under section 10(8) of the 1985 Act as amended, introduced the CETV, which I mentioned in para 5 above, as the means of valuing the benefits under a pension arrangement. The current regulations are the 2000 Regulations as amended. Before examining the disputed provisions of the 2000 Regulations it is important to note the scope of those regulations. The 2000 Regulations apply to occupational pension schemes and also to personal pension schemes of all kinds. The 2000 Regulations have also been extended to cover certain state scheme rights. Occupational pension schemes may often involve regular contributions from an employee and some, at least in the past, may have provided for such contributions only from the employer. Personal pension schemes include schemes which permit the member to make contributions when he or she chooses giving rise to the result which I have discussed in para 19 above. Regulation 3 of the 2000 Regulations sets out mandatory rules for the calculation and verification of the value of any benefits under a pension arrangement for the purposes of the 1985 Act. Regulation 3 provides different rules for the calculation depending on whether, for example, the party with pension rights is a deferred member or an active member of an occupational pension scheme or a member of a personal pension scheme. There are also different rules if the pension of the party with pension rights is in payment. Beyond observing that regulation 3 provides for different classes of membership of an occupational pension scheme and also for membership of a personal pension scheme, we are not concerned with the details of the methods by which the cash equivalent of the benefits is calculated in that regulation. Mr McDonalds interest in a pension in payment has been valued in accordance with regulation 3(2)(d)(i). Regulation 4 of the 2000 Regulations identifies what proportion of a persons rights and interests in such benefits forms part of the matrimonial property. It provides: The value of the proportion of any rights or interests which a party has or may have in any benefits under a pension arrangement or in relevant state scheme rights as at the relevant date and which forms part of the matrimonial property by virtue of section 10(5) shall be calculated in accordance with the following formula A x B/C where A is the value of these rights or interests in any benefits under the pension arrangement which is calculated, as at the relevant date, in accordance with paragraph (2) of regulation 3 above; and B is the period of C which falls within the period of the marriage of the parties before the relevant date and, if there is no such period, the amount shall be a zero; and C is the period of the membership of that party in the pension arrangement before the relevant date. This formula, as I have said, informed the view of the sheriff and the majority of the Inner House. The words which fall to be interpreted are the words in the definition of factor C above, namely the period of the membership of that party in the pension arrangement. It is striking that factor C in the formula in regulation 4, by which the regulation 3 value is apportioned so as to identify what is matrimonial property, (i) refers to the period of membership of the party in the pension arrangement without further specification and (ii) must apply to membership of both occupational pension schemes and personal pension schemes. Both Sheriff Holligan and the majority of the Extra Division treated membership as confined to active membership of an occupational pension scheme or membership of another scheme while the member was contributing to it. I do not agree for four reasons. First, that interpretation involves adding words to regulation 4 which are not there. The person who drafted the 2000 Regulations was clearly aware of the different categories of membership which were set out in regulation 3. Regulations 3 and 4 must be read together. Regulation 4, in contrast to regulation 3, refers to membership without differentiation between classes of membership. Secondly, it is clear, and is not disputed, that the 2000 Regulations apply not only to occupational pension schemes but also to personal pension schemes. The definition of active membership in section 124(1) of the Pensions Act 1995 (para 6 above) applies only to an occupational pension scheme and makes no sense in relation to personal pension schemes. It also, as Mr Mitchell, who appeared for Mrs McDonald, pointed out, makes no sense in relation to relevant state scheme rights to which regulation 4 also applies. It would, as Mrs Scott argued on behalf of Mr McDonald, be possible to circumvent the problem in relation to personal pension schemes by reading the definition of factor C as if it stated the period of membership of that party in the pension arrangement when contributions are being made by or on behalf of that party. But how does one ascertain at what point before the relevant date a party who has made occasional contributions to a personal pension scheme had chosen to cease to make such contributions? It is to be assumed that Parliament intended the provisions of the Regulations to operate sensibly in relation to the differing pension schemes and state pension rights. Thirdly, I do not think that one can support the reading of the word active or contributing into the phrase in question by referring to the focus in section 10(4) of the 1985 Act on the acquisition by the parties of assets during the marriage but before the relevant date. As I have said (para 14 above), the opening words of section 10(4) carve subsection (5) out of the section 10(4) definition of matrimonial property. Parliament chose to deal with pension rights differently by making discrete provision for them. It is important in that regard to recall that in section 10(4)(a) of the 1985 Act there is included in matrimonial property all property acquired before the marriage for use as a family home or as furniture or plenishings for such a home. Thus even within section 10(4) there is no unqualified principle that property must have been acquired during the marriage and before the relevant date. Indeed, the asset which will often be the most valuable asset within the matrimonial property is excluded from the section 10(4)(b) regime. Further, assets acquired during the marriage by way of gift or inheritance from third parties are excluded from the matrimonial property. It is thus difficult to detect a general principle confining matrimonial property to assets acquired during the marriage to support the purposive interpretation which the majority of the Extra Division has favoured. Fourthly, I am not persuaded by the argument that membership in regulation 4 must mean active membership of an occupational pension scheme (or contributing membership of other schemes) and cannot extend to all types of membership in order to give meaning to the statement in the statutory formula that factor B can be zero. This argument has featured at every stage of this case and was accepted by the sheriff and the majority of the Extra Division. Suggestions have been made as to how factor B (the period of C which falls within the period of the marriage before the relevant date) could be zero when factor C is a positive number. Mr Mitchell suggested that where parties separated on the day of their marriage, there would be no period of marriage before the relevant date; if a spouse had a pre existing pension arrangement factor C would be a positive figure and factor B would be zero. Lady Smith gave the circumstance of a pension arrangement entered into on the date of separation as an example of when B would be zero. But in her example both B and C would be zero; there would be no interest in the benefits of a pension arrangement to value. It is not possible to tell precisely which circumstance was in the mind of the person who drafted regulation 4 when he or she provided for the possibility that factor B could be zero. But that does not matter. If the person drafting the wording of factors B and C intended it to confine membership to active membership that would involve egregious circumlocution. There is no hint of such an intention in the words of the Regulations. If it were necessary to go further, I observe that there is no such hint in the explanatory note to the 2000 Regulations, to which the court can have regard to ascertain the context of the provision and the mischief which it addresses as aids to purposive interpretation: R v Environment Secretary, Ex p Spath Holme Ltd [2001] 2 AC 349, 397 398 per Lord Nicholls of Birkenhead; Comhairle nan Eilean Siar v Scottish Ministers 2013 SC 548, para 47 per Lady Smith, para 62 per Lord Brodie. The explanatory note states: Regulation 4 provides for the apportionment of the value of such benefits. Provision is made apportioning the value of the benefits in accordance with the period of time the party in the pension arrangement has been in both the pension arrangement and in the marriage as a proportion of the period of time that person has been in the pension arrangement. (regulation 4) If regulation 4 were circumlocution for the period of active membership of an occupational pension scheme or, more generally, the period when contributions were being made towards a pension, I would have expected that to be flagged up in the explanatory note. In any event, as I have said (para 19 above), confining the period of the membership to the period when contributions were made and apportioning the value of the rights or interests in the benefits by reference to time, as section 10(5) requires, may often create an apportionment of the rights or interests in benefits in personal pension schemes which bears no relationship to the relative value of the rights acquired before and during the marriage. I am therefore persuaded that period of the membership in regulation 4 of the 2000 Regulations refers to the period of the persons membership of the pension arrangement, whether or not contributions are being made to that arrangement in that period. That does not mean, of course, that the value of an interest in a pension arrangement must be shared equally. As I said in para 13 above, there are safeguards within the 1985 Act which temper its prescriptiveness. Conclusion I would allow the appeal and remit the case to the sheriff at Edinburgh to proceed accordingly.

Mr McDonald (the respondent) worked as a miner for British Coal. He joined the British Coal Staff Superannuation Scheme on 11 December 1978 and began contributing to it. He married Mrs McDonald (the appellant) on 22 March 1985. Shortly afterwards, he retired early on grounds of ill health and exercised his right to receive a pension income before his normal retiring age. As a result, between 11 December 1978 and 10 August 1985 Mr McDonald was a member of and contributor to the scheme; since then he has been a member in receipt of income benefits under the scheme. Mrs McDonald seeks a pensions sharing order under section 8(1)(baa) of the Family Law (Scotland) Act 1985 (the 1985 Act) on her divorce from Mr McDonald on the basis that his pension forms part of the matrimonial property which is taken into account in fixing financial provision. This appeal raises questions of statutory interpretation both in relation to the 1985 Act and The Divorce etc. (Pensions) (Scotland) Regulations 2000 (the 2000 Regulations), which were made under section 10(8) of the 1985 Act as amended. Section 10(5) of the 1985 Act treats as matrimonial property the proportion of any rights or interests of either personin any benefits under a pension arrangement which is referable to the period [during the marriage but before the relevant date]. The relevant date is the final date of separation, 25 September 2010 being the relevant date in the present case when the parties ceased to cohabit. The 2000 Regulations, which apply to occupational pension schemes and personal pension schemes of all kinds, provide for the valuation of a persons rights or interests in a pension arrangement for the purposes of section 10(5) by reference to what is known as the cash equivalent transfer value. Regulation 4 of the 2000 Regulations contains the relevant formula: A x B/C where A is the value of these rights or interests in any benefits under the pension arrangement which is calculated, as at the relevant date, in accordance with paragraph (2) of regulation 3 above; and B is the period of C which falls within the period of the marriage of the parties before the relevant date and, if there is no such period, the amount shall be zero; and C is the period of the membership of that party in the pension arrangement before the relevant date The dispute between the parties relates to that formula. The words which fall to be interpreted are the words in the definition of factor C, namely the period of membership of that party in the pension arrangement. Mr McDonald argues that the court should apportion the value of his pension rights by reference only to the period in which he was an active member of the scheme, that is the period during which he was making contributions to the scheme. On that basis, the value of his interest in the pension benefits which is matrimonial property would be 10,002. Mrs McDonald argues that the cash equivalent transfer value should be apportioned by reference to the period of Mr Macdonalds membership of the scheme, both when in pensionable employment and also when drawing a pension, that value being 138,534. An Extra Division of the Inner House dismissed Mrs McDonalds appeal. The majority based their reasoning on the general rule found in section 10(4) of the 1985 Act, which states matrimonial property is confined to assets acquired during the marriage but before the relevant date. They also relied on the formula in the 2000 Regulations. The Supreme Court unanimously allows Mrs McDonalds appeal. Lord Hodge gives the judgment, with which the other Justices agree. The period of membership in regulation 4 of the 2000 Regulations refers to the period of the persons membership of the pension arrangement, whether or not contributions are being made in that period [31]. There are four reasons why membership should not be confined to active membership of pension scheme while the member was contributing to it [25]. First, interpreting regulation 4 as confined in such a way involves adding words which are not there. The person who drafted the 2000 Regulations was clearly aware of the different categories of membership, as can be observed from the differentiation between categories of membership in regulation 3, and chose not to differentiate in regulation 4 between classes of membership [26]. Secondly, the 2000 Regulations apply to both occupational pension schemes and personal pension schemes. The definition of active membership in section 124(1) of the Pensions Act 1995 makes no sense in relation to personal pension schemes. It must be assumed that Parliament intended the Regulations to operate sensibly in respect of differing pension schemes. Further, it would prove difficult to ascertain the point at which a party who has made occasional contributions to a personal pension scheme had chosen to cease to make contributions [27]. Thirdly, the reading of the word active or contributing into regulation 4 cannot be supported by referring to the focus in section 10(4) of the 1985 Act to the acquisition by the parties of assets during the marriage but before the relevant date. Section 10(5) of the 1985 Act deals specifically with pensions, and the opening words of section 10(4), which defines matrimonial property, state that the definition provided in section 10(4) is subject to subsection (5) below. Parliament chose to deal with pensions differently by making a separate provision for them in section 10(5). It follows from the creation of that separate provision that the definition in section 10(4) should not be considered to apply to pensions and, therefore, the majority of the Extra Division of the Inner House erred in its reliance on it. Fourthly, it is not persuasive that membership in regulation 4 must mean active membership in order to give meaning to the statement that factor B can be zero. If the person drafting the wording of factors B and C in regulation 4 intended to confine membership in such a way that would be remarkably indirect. There is no hint of such an intention in the words of the Regulations. Further, confining the period of membership to the period when contributions were made and apportioning the value of the rights or interests in the benefits by reference to time, as section 10(5) requires, may often create an apportionment of the rights of interests in benefits in personal pension schemes which bears no relationship to the relative value of the rights acquired before and during the marriage [30]. This interpretation does not mean that the value of an interest in a pension must be shared equally. Section 9(1) of the 1985 Act contains other principles which inform the courts decision making and introduces flexibility into the award of financial provision. Further flexibility is introduced by the recognition in section 10(1) that there may be special circumstances for departing from the equal sharing of matrimonial property [13, 32].

Ideally, discrimination ought to be an easy concept, although proving it may be harder. But we do not live in an ideal world and the concepts are not easy, as these two cases illustrate all too well. The law prohibits two main kinds of discrimination direct and indirect. Direct discrimination is comparatively simple: it is treating one person less favourably than you would treat another person, because of a particular protected characteristic that the former has. Indirect discrimination, however, is not so simple. It is meant to avoid rules and practices which are not directed at or against people with a particular protected characteristic but have the effect of putting them at a disadvantage. It is one form of trying to level the playing field. The two cases before us are about indirect discrimination on grounds of race and/or age and/or religion. Indirect discrimination is defined in section 19 of the Equality Act 2010 in this way: (1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of Bs. (2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of Bs if (a) A applies, or would apply, it to persons with whom B does not share the characteristic, (b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) it puts, or would put, B at that disadvantage, and (d) A cannot show it to be a proportionate means of achieving a legitimate aim. Subsection (3) lists the relevant protected characteristics, which include age, race and religion or belief. Mr Essops case relies upon both age and race; Mr Naeems case relies on both race and religion but primarily religion. Section 9 explains what is meant by race: (1) Race includes (a) colour; (b) nationality; (c) ethnic or national origins. (2) In relation to the protected characteristic of race a reference to a person who has a particular (a) protected characteristic is a reference to a person of a particular racial group; (b) a reference to persons who share a protected characteristic is a reference to persons of the same racial group. (3) A racial group is a group of persons defined by reference to race; and a reference to a persons racial group is a reference to a racial group into which the person falls. (4) The fact that a racial group comprises two or more distinct racial groups does not prevent it from constituting a particular racial group. Section 5(1) and (2) makes provision equivalent to section 9(2) for people who belong to or share a particular age group, which may be defined either by reference to a particular age or an age range. Section 10(3) makes equivalent provision for people of, or who share, a particular religion or belief. The concept of discrimination obviously involves comparisons between groups or individuals. Section 23(1) provides that: On a comparison of cases for the purpose of section 13, 14 or 19 there must be no material difference between the circumstances relating to each case. Having defined what is meant by discrimination, the Act goes on to define the circumstances in which it is unlawful. Relevant to these appeals is section 39(2): An employer (A) must not discriminate against an employee of As (B) (a) as to Bs terms of employment; (b) in the way A affords B access, or by not affording B access, to opportunities for promotion, transfer or training or for receiving any other benefit, facility or service. Finally, the Act deals with the burden of proof in civil proceedings before a court or a list of tribunals which includes an employment tribunal. Relevant to these appeals are section 136(2) and (3): (2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provisions concerned, the court must hold that the contravention occurred. (3) But subsection (2) does not apply if A shows that A did not contravene the provision. The Essop case Mr Essop is the lead appellant in a group of 49 people, six of whom have been chosen as test cases. They are, or were, all employed by the Home Office. Mr Essop is an immigration officer who has been employed by the Home Office since 1995. It is common ground that the relevant provision, criterion or practice (PCP) in this case is the requirement to pass a Core Skills Assessment (CSA) as a pre requisite to promotion to certain civil service grades. At the relevant times, the Home Office required all employees to take and pass a CSA in order to become eligible for promotion to the grades of Higher Executive Officer (HEO) original, HEO interim or Grade 7. The CSA was a generic test required for each of these grades, irrespective of the particular role. Its stated purpose was to test the core skills required to operate as a civil servant at those grades, rather than the knowledge and skills required for the particular post sought. Candidates who passed the CSA would then be required to sit and pass a Specific Skills Assessment relevant to the particular post. All the appellants have, at some time, failed the CSA and were thus not, at that time, eligible for promotion. In 2010, a report commissioned by the Home Office from a firm of occupational psychologists, Pearn Kandola, revealed that Black and Minority Ethnic (BME) candidates and older candidates had lower pass rates than white and younger candidates. All non white candidates were pooled into a single BME grouping, although a more detailed breakdown of ethnicity was available, in order to maximise the size of the group and thus the reliability of the analysis. (Whether this is an appropriate approach is not in issue before this Court but was left open by the Employment Tribunal.) The BME pass rate was 40.3% of that of the white candidates. The pass rate of candidates aged 35 or older was 37.4% of that of those below that age. In each case, there was a 0.1% likelihood that this could happen by chance. Of course, they did not all fail. No one knows why the proportion of BME or older candidates failing is significantly higher than the proportion of white or younger candidates failing. Proceedings were launched in the London South Employment Tribunal. It was agreed between the parties that a pre hearing review was required to determine whether the claimants were required for the purposes of section 19(2)(b) and/or (c) to prove what the reason for the lower pass rate was. The Home Office argued that they did need to do so. The claimants argued that they did not. The Employment Judge held that they did have to prove the reason. The claimants appealed to the then President of the Employment Appeal Tribunal, Langstaff J, who sat alone on this occasion. He held that they did not have to prove the reason. It was enough to show that the group had suffered, or would suffer, the particular disadvantage of a greater risk of failure and that each individual had in fact suffered the disadvantage of failure: [2014] UKEAT/0480/13; [2014] ICR 871. The Home Office appealed to the Court of Appeal, which held that the claimants had to show why the requirement to pass the CSA put the group at a disadvantage and that he or she had failed the test for that same reason and gave general guidance for the Employment Tribunal handling the claims: [2015] EWCA Civ 609; [2015] ICR 1063. The principal issue of law on appeal to this Court, therefore, is whether section 19(2)(b) and (c) of the 2010 Act requires that the reason for the disadvantage suffered by the group be established and that the reason why the individual has suffered from that disadvantage be the same. Also in issue are how the disadvantage is to be defined in this case and how and by whom the burden of proving the reason for it is to be discharged. The Naeem case Mr Naeem is an imam who works as a chaplain in the Prison Service. Some prison chaplains are employed on a salaried basis under contracts of employment. Some are engaged on a sessional basis as and when required and paid at an hourly rate. Both groups are required to undergo training. Before 2002, Muslim chaplains were engaged on a sessional basis only, because the Prison Service believed that there were not enough Muslim prisoners to justify employing them on a salaried basis. Mr Naeem began working as a prison chaplain at HMP Bullingdon in June 2001, at first on a sessional basis, but in October 2004 he became a salaried employee. It is common ground that the PCP in question is the Prison Service pay scheme for chaplains, which incorporates pay progression over time and thus pay is related to length of service. Like many public sector employers, the Prison Service operates an incremental pay scale, with (usually) annual increments in pay in addition to any cost of living increases until the top of the scale is reached. When Mr Naeem became an employee it would take 17 years to progress from the bottom of the pay scale (where employees normally began) to the top. The Prison Service has since reduced the time taken to climb from the bottom to the top, with the eventual aim of reducing the ladder to six years. This was done gradually, so that a new joiner in 2009 would take only nine years to do so. Existing chaplains were granted accelerated progress up the scale so that they could keep pace. But the whole process was interrupted by government constraints and a pay freeze from 2010/11 onwards. These proceedings were launched in April 2011. On 1 April 2011, the average basic pay for Muslim chaplains was 31,847, whereas the average basic pay for Christian chaplains was 33,811. This was because Muslims had only been employed on a salaried basis since 2002, whereas a substantial number of Christian chaplains had started their employment before that date. Hence their average length of service was longer and they had had more time to climb the ladder. Of course, a Christian chaplain who started in salaried employment on the same date as a Muslim chaplain, and who had the same appraisal record, would be paid the same. Mr Naeem brought proceedings in the Reading Employment Tribunal complaining that the incremental pay scheme was indirectly discriminatory against Muslim or Asian chaplains. It resulted in his being paid less than Christian chaplains in a post where length of service served no useful purpose as a reflection of ability or experience. The Tribunal held that the pay scheme was indirectly discriminatory in relation to both race and religion, but that it was objectively justified as a proportionate means of achieving a legitimate aim. Each side appealed to the Employment Appeal Tribunal, which held that the pay scheme was not indirectly discriminatory at all, because chaplains employed before 2002 should be excluded from the comparison between the two groups. However, if the EAT were wrong about that, the pay scheme had not been shown to be a proportionate means of achieving a legitimate aim. There were various possible ways of modifying the scheme so as to avoid the disadvantage suffered by people such as the claimant, which the tribunal ought to have considered: UKEAT/0215/13/RN; [2014] ICR 472. Mr Naeems appeal to the Court of Appeal was dismissed. It was not enough to show that the length of service criterion had a disparate impact upon Muslim chaplains. It was also necessary to show that the reason for that disparate impact was something peculiar to the protected characteristic in question: [2015] EWCA Civ 1264; [2016] ICR 289. Thus, although the reason for the differential impact of the length of service criterion is known, one issue in Mr Naeems case is whether the reason for the disadvantage which he suffers has also to be related to the protected characteristic of his religion or race. It is also in issue whether the pool for comparison should be all prison chaplains or only those employed since 2002 and whether the EAT was entitled to interfere with the decision of the Employment Tribunal. Direct and indirect discrimination Under the Sex Discrimination Act 1975 and the Race Relations Act 1976, direct discrimination was defined as treating a person less favourably than another on the ground of her sex or on racial grounds. Under section 13(1) of the Equality Act 2010, this has become treating someone less favourably because of a protected characteristic. The characteristic has to be the reason for the treatment. Sometimes this will be obvious, as when the characteristic is the criterion employed for the less favourable treatment: an example is Preddy v Bull [2013] UKSC 73; [2013] I WLR 3741, where reserving double bedded rooms to hetero sexual married couples only was directly discriminatory on grounds of sexual orientation. At other times, it will not be obvious, and the reasons for the less favourable treatment will have to be explored: an example is Nagarajan v London Regional Transport [2000] 1 AC 501, where the tribunals factual finding of conscious or subconscious bias was upheld in the House of Lords, confirming the principle, established in R v Birmingham City Council, Ex p Equal Opportunities Commission [1989] AC 1155 and James v Eastleigh Borough Council [1990] 2 AC 751, that no hostile or malicious motive is required. James v Eastleigh Borough Council also shows that, even if the protected characteristic is not the overt criterion, there will still be direct discrimination if the criterion used (in that case retirement age) exactly corresponds with a protected characteristic (in that case sex) and is thus a proxy for it. The concept of indirect discrimination has proved more difficult to define in statutory terms. The original version in section 1(1)(b) of the Sex Discrimination Act 1975 provided that a person discriminates against a woman if he applies to her a requirement or condition which he applies or would apply equally to a man but (i) which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it, and (ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied, and (iii) which is to her detriment because she cannot comply with it. Essentially the same definition was contained in section 1(1)(b) of the Race Relations Act 1976, as originally enacted. Much, but by no means all, of the Equality Act 2010 is derived from our obligations under European Union law. Those parts which are so derived must be interpreted consistently with EU law (as it is now called) and it is inconceivable that Parliament intended the same concepts to be interpreted differently in different contexts. Although EU law has always recognised both direct and indirect discrimination, the first legislative definition of indirect discrimination was contained in Council Directive 97/80/EC on the burden of proof in cases of discrimination based on sex, article 2(2) of which provided that, for the purposes of the principle of equal treatment, indirect discrimination shall exist where an apparently neutral provision, criterion or practice disadvantages a substantially higher proportion of the members of one sex unless that provision, criterion or practice is appropriate and necessary and can be justified by objective factors unrelated to sex. This introduced the term an apparently neutral provision, criterion or practice (or PCP as it is generally known) and the concept of disproportionate group disadvantage. There was no reference to individual disadvantage, but article 4 required that, where persons who considered themselves wronged by the non application to them of the principle of equal treatment established facts from which it might be presumed that there had been direct or indirect discrimination, it was for the respondent to prove that there had been no breach of the principle of equal treatment. In 2001, a new section 63A was added to the Sex Discrimination Act to cater for this in relation to particular fields of activity covered by European Union law. A new section 54A was added to make equivalent provision in the Race Relations Act, although not yet required by European law (although it soon would be, by article 8 of Council Directive 2000/43/EC, referred to below). Section 136 of the Equality Act 2010 (above, para 6) has extended the shifting burden of proof to all activities covered by the Act (although not to criminal proceedings). The next European definition of indirect discrimination came in Council Directive 2000/43/EC implementing the principle of equal treatment between persons irrespective of racial or ethnic origins (the Race Directive). Article 2(2)(b) provided that: indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons of a racial or ethnic origin at a particular disadvantage compared with other persons, unless that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary. Thus it was sufficient that the PCP would put such persons at a particular disadvantage when compared to others. Article 8 made the same provision for shifting the burden of proof as had the earlier Directive in relation to sex. The same definition of indirect discrimination was adopted in article 2(2)(b) of Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation on grounds other than sex or race, in article 2(b) of Council Directive 2004/113/EC implementing the principle of equal treatment between men and women in the access to and supply of goods and services and article 2(1)(b) of Council Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast). In 2003, both the Sex Discrimination Act and the Race Relations Act were amended to apply this new concept of indirect discrimination to specified fields of activity covered by European Union law. Thus a new section 1(2)(b) in the 1975 Act provided that, for those purposes, a person discriminated against a woman if he applies to her a provision, criterion or practice which he applies or would apply equally to a man, but (i) which puts or would put women at a particular disadvantage when compared with men, (ii) which puts her at that disadvantage, and (iii) which he cannot show to be a proportionate means of achieving a legitimate aim. Equivalent provision was made in a new section 1(1A) of the 1976 Act. That is the same concept of indirect discrimination as has now been applied to all the areas of activity covered by the Equality Act 2010. It is instructive to go through the various iterations of the indirect discrimination concept because it is inconceivable that the later versions were seeking to cut it down or to restrict it in ways which the earlier ones did not. The whole trend of equality legislation since it began in the 1970s has been to reinforce the protection given to the principle of equal treatment. All the iterations share certain salient features relevant to the issues before us. The first salient feature is that, in none of the various definitions of indirect discrimination, is there any express requirement for an explanation of the reasons why a particular PCP puts one group at a disadvantage when compared with others. Thus there was no requirement in the 1975 Act that the claimant had to show why the proportion of women who could comply with the requirement was smaller than the proportion of men. It was enough that it was. There is no requirement in the Equality Act 2010 that the claimant show why the PCP puts one group sharing a particular protected characteristic at a particular disadvantage when compared with others. It is enough that it does. Sometimes, perhaps usually, the reason will be obvious: women are on average shorter than men, so a tall minimum height requirement will disadvantage women whereas a short maximum will disadvantage men. But sometimes it will not be obvious: there is no generally accepted explanation for why women have on average achieved lower grades as chess players than men, but a requirement to hold a high chess grade will put them at a disadvantage. A second salient feature is the contrast between the definitions of direct and indirect discrimination. Direct discrimination expressly requires a causal link between the less favourable treatment and the protected characteristic. Indirect discrimination does not. Instead it requires a causal link between the PCP and the particular disadvantage suffered by the group and the individual. The reason for this is that the prohibition of direct discrimination aims to achieve equality of treatment. Indirect discrimination assumes equality of treatment the PCP is applied indiscriminately to all but aims to achieve a level playing field, where people sharing a particular protected characteristic are not subjected to requirements which many of them cannot meet but which cannot be shown to be justified. The prohibition of indirect discrimination thus aims to achieve equality of results in the absence of such justification. It is dealing with hidden barriers which are not easy to anticipate or to spot. A third salient feature is that the reasons why one group may find it harder to comply with the PCP than others are many and various (Mr Sean Jones QC for Mr Naeem called them context factors). They could be genetic, such as strength or height. They could be social, such as the expectation that women will bear the greater responsibility for caring for the home and family than will men. They could be traditional employment practices, such as the division between womens jobs and mens jobs or the practice of starting at the bottom of an incremental pay scale. They could be another PCP, working in combination with the one at issue, as in Homer v Chief Constable of West Yorkshire [2012] UKSC 15; [2012] ICR 704, where the requirement of a law degree operated in combination with normal retirement age to produce the disadvantage suffered by Mr Homer and others in his age group. These various examples show that the reason for the disadvantage need not be unlawful in itself or be under the control of the employer or provider (although sometimes it will be). They also show that both the PCP and the reason for the disadvantage are but for causes of the disadvantage: removing one or the other would solve the problem. A fourth salient feature is that there is no requirement that the PCP in question put every member of the group sharing the particular protected characteristic at a disadvantage. The later definitions cannot have restricted the original definitions, which referred to the proportion who could, or could not, meet the requirement. Obviously, some women are taller or stronger than some men and can meet a height or strength requirement that many women could not. Some women can work full time without difficulty whereas others cannot. Yet these are paradigm examples of a PCP which may be indirectly discriminatory. The fact that some BME or older candidates could pass the test is neither here nor there. The group was at a disadvantage because the proportion of those who could pass it was smaller than the proportion of white or younger candidates. If they had all failed, it would be closer to a case of direct discrimination (because the test requirement would be a proxy for race or age). A fifth salient feature is that it is commonplace for the disparate impact, or particular disadvantage, to be established on the basis of statistical evidence. That was obvious from the way in which the concept was expressed in the 1975 and 1976 Acts: indeed it might be difficult to establish that the proportion of women who could comply with the requirement was smaller than the proportion of men unless there was statistical evidence to that effect. Recital (15) to the Race Directive recognised that indirect discrimination might be proved on the basis of statistical evidence, while at the same time introducing the new definition. It cannot have been contemplated that the particular disadvantage might not be capable of being proved by statistical evidence. Statistical evidence is designed to show correlations between particular variables and particular outcomes and to assess the significance of those correlations. But a correlation is not the same as a causal link. A final salient feature is that it is always open to the respondent to show that his PCP is justified in other words, that there is a good reason for the particular height requirement, or the particular chess grade, or the particular CSA test. Some reluctance to reach this point can be detected in the cases, yet there should not be. There is no finding of unlawful discrimination until all four elements of the definition are met. The requirement to justify a PCP should not be seen as placing an unreasonable burden upon respondents. Nor should it be seen as casting some sort of shadow or stigma upon them. There is no shame in it. There may well be very good reasons for the PCP in question fitness levels in fire fighters or policemen spring to mind. But, as Langstaff J pointed out in the EAT in Essop, a wise employer will monitor how his policies and practices impact upon various groups and, if he finds that they do have a disparate impact, will try and see what can be modified to remove that impact while achieving the desired result. The arguments in Essop All the above salient features of the definition of indirect discrimination support the appellants case that there is no need to prove the reason why the PCP in question puts or would put the affected group at a particular disadvantage. The respondent relies upon two main arguments to counter this. The first is that the individual claimant has to show that he has been put at that disadvantage, that is, the same disadvantage that the group to which he belongs is, or would be, put. How, it is said, can one know what that disadvantage is unless one knows the reason for it? But what is required by the language is correspondence between the disadvantage suffered by the group and the disadvantage suffered by the individual. This will largely depend upon how one defines the particular disadvantage in question. If the disadvantage is that more BME or older candidates fail the test than do white or younger candidates, then failure is the disadvantage and a claimant who fails has suffered that disadvantage. If the disadvantage is that BME and older candidates are more likely to fail than white or younger candidates, then the likelihood of failure is the disadvantage and any BME or older candidate suffers that disadvantage. That leads to the second argument that undeserving claimants, who have failed for reasons that have nothing to do with the disparate impact, may coat tail upon the claims of the deserving ones. This is easier to answer if the disadvantage is defined in terms of actual failure than if it is defined in terms of likelihood of failure (because only some suffer the first whereas all suffer the second). But in any event, it must be open to the respondent to show that the particular claimant was not put at a disadvantage by the requirement. There was no causal link between the PCP and the disadvantage suffered by the individual: he failed because he did not prepare, or did not show up at the right time or in the right place to take the test, or did not finish the task. A second answer is that a candidate who fails for reasons such as that is not in the same position as a candidate who diligently prepares for the test, turns up in the right place at the right time, and finishes the tasks he was set. In such a situation there would be a material difference between the circumstances relating to each case, contrary to section 23(1) (para 4 above). A third answer is that the test may in any event be justified despite its disparate impact. Although justification is aimed at the impact of the PCP on the group as a whole rather than at the impact upon the individual, as Langstaff J pointed out, the less the disadvantage suffered by the group as a whole, the easier it is likely to be to justify the PCP. If, however, the disadvantage is defined in terms of likelihood of rather than actual failure, then it could be said that all do suffer it, whether or not they fail and whatever the reason for their failure. But there still has to be a causal link between the PCP and the individual disadvantage and it is fanciful to suppose that people who do not fail or who fail because of their own conduct have suffered any harm as a result of the PCP. It must be permissible for an employer to show that an employee has not suffered harm as a result of the PCP in question. The appeal has come before us as a matter of principle. In principle, the arguments put forward by the respondent do not justify importing words into the statute (and the Directives which lay behind it) which are simply not there and which, as the Court of Appeal recognised, could lead to the continuation of unlawful discrimination, which would be contrary to the public interest (para 34). In order to succeed in an indirect discrimination claim, it is not necessary to establish the reason for the particular disadvantage to which the group is put. The essential element is a causal connection between the PCP and the disadvantage suffered, not only by the group, but also by the individual. This may be easier to prove if the reason for the group disadvantage is known but that is a matter of fact, not law. Secondly, the parties are not agreed on how the disadvantage should be defined. The case came before the Employment Tribunal on the basis that the disadvantage was the greater likelihood of failure. In the Employment Appeal Tribunal, Langstaff J treated the mere fact of failure of the test as the disadvantage (para 25). The Court of Appeal favoured the approach in the Employment Tribunal. Before this Court the appellants identify the disadvantage in essentially the same terms as did Langstaff J: the disadvantage was that members of the group failed the test disproportionately and the appellants suffered that same disadvantage. In my view, the appellants (and the EAT) are in principle correct. As already noted, it is a typical feature of indirect discrimination that some members of the disadvantaged group will not in fact suffer the disadvantage. At the level of the group the disadvantage may be no more than likely but that does not make it a different disadvantage from the actual disadvantage suffered by those who are affected. The difference is between potential and actual disadvantage but the disadvantage is the same. Thus, in the typical example of a height requirement, women are statistically more likely to fail to meet it, but only some will fail and others will pass. The disadvantage in each case is the same the failure to meet the height requirement. Any other approach would deprive indirect discrimination of much of its content. I would therefore allow the appeal in the Essop case and remit the claims to be determined by the Employment Tribunal in accordance with this judgment. The arguments in Naeem Disadvantage In Mr Naeems case, the reason why the pay scale puts Muslim chaplains at a disadvantage is known: essentially it depends upon length of service and they have, on average, shorter lengths of service than Christian chaplains. But the respondent raises two main arguments. The first argument is that the reason why the PCP puts the group at a disadvantage the context factor has itself to be related to the protected characteristic. This was the view taken by Underhill LJ in the Court of Appeal in this case (and in the EAT in the earlier case of Haq v Audit Commission [2011] UKEAT/0123/10/LA but not upheld by the Court of Appeal at [2012] EWCA Civ 1621; [2013] Eq LR 130). Thus, at para 22, he held that it cannot properly be said that it is the use of the length of service criterion which puts Muslim chaplains at a disadvantage, within the meaning of section 19(2)(b). The concept of putting persons at a disadvantage is causal, and, as in any legal analysis of causation, it is necessary to distinguish the legally relevant cause or causes from other factors in the situation. In my view the only material cause of the disparity in remuneration is the (on average) more recent start dates of the Muslim chaplains. But that does not reflect any characteristic peculiar to them as Muslims: rather, it reflects the fact that there was no need for their services (as employees) at any earlier date. But this cannot be right. The same could be said of almost any reason why a PCP puts one group at a disadvantage. There is nothing peculiar to womanhood in taking the larger share of caring responsibilities in a family. Some do and some do not. But (in the context of equal pay) it has been acknowledged that a length of service criterion can have a disparate impact on women because they tend to have shorter service periods as a result of career breaks or later career starts flowing from their child care responsibilities: see Wilson v Health and Safety Executive [2009] EWCA Civ 1074; [2010] ICR 302, following Cadman v Health and Safety Executive (Case C 17/05) [2006] ICR 1623. Indeed, it could be said that the lack of need for the Muslim chaplains is more peculiar to them as Muslims than are many of the reasons why women may suffer a particular disadvantage. All that this means is that the employer may have to justify the PCP. In principle, a length of service criterion may be justified as a reward for greater experience and skill, but this gets harder to do the longer the time taken to achieve parity with others. The second argument relates to the group or pool with which the comparison is made. Should it be all chaplains, as the Employment Tribunal held, or only those who were employed since 2002? In the equal pay case of Grundy v British Airways plc [2007] EWCA Civ 1020; [2008] IRLR 74, at para 27, Sedley LJ said that the pool chosen should be that which suitably tests the particular discrimination complained of. In relation to the indirect discrimination claim in Allonby v Accrington and Rossendale College [2001] EWCA Civ 529; [2001] ICR 1189, at para 18, he observed that identifying the pool was not a matter of discretion or of fact finding but of logic. Giving permission to appeal to the Court of Appeal in this case, he observed that There is no formula for identifying indirect discrimination pools, but there are some guiding principles. Amongst these is the principle that the pool should not be so drawn as to incorporate the disputed condition. Consistently with these observations, the Statutory Code of Practice (2011), prepared by the Equality and Human Rights Commission under section 14 of the Equality Act 2006, at para 4.18, advises that: In general, the pool should consist of the group which the provision, criterion or practice affects (or would affect) either positively and negatively, while excluding workers who are not affected by it, either positively or negatively. In other words, all the workers affected by the PCP in question should be considered. Then the comparison can be made between the impact of the PCP on the group with the relevant protected characteristic and its impact upon the group without it. This makes sense. It also matches the language of section 19(2)(b) which requires that it ie the PCP in question puts or would put persons with whom B shares the characteristic at a particular disadvantage compared with persons with whom B does not share it. There is no warrant for including only some of the persons affected by the PCP for comparison purposes. In general, therefore, identifying the PCP will also identify the pool for comparison. In this case, the PCP identified was the incremental pay structure which affected all the chaplains employed by the Prison Service. This did put the Muslim chaplains at a particular disadvantage compared with the Christians. The appellant suffered this disadvantage and so section 19(2)(b) and (c) were satisfied. The question, therefore, is whether the respondent can justify it as a proportionate means of achieving a legitimate aim. Justification The Employment Tribunal held that it could. The original pay scale had been intended to reward loyalty and experience. The Prison Service had been trying to move away, as quickly as possible, from the long incremental pay scale to a much shorter one, where increments would depend to a limited extent on experience and a greater extent on assessed performance. The Employment Tribunal identified the objective as the single one of rewarding length of service and increasing experience, while at the same time managing an orderly and structured transition, over a period of time, to the shorter, single pay scale That is clearly a serious objective, which represents a real organisational need (para 27). The EAT agreed that the Employment Tribunal had properly identified a legitimate aim. Mr Naeem does not now challenge that conclusion. The EAT however disagreed that the means adopted to meet that organisational need had been shown to be proportionate. The Employment Tribunal had found as a fact that six years service was the most required for newly appointed chaplains to have attained the professional standards which should entitle them to be rewarded at the top of the scale, as fully trained and experienced in their role (para 10.7). The Prison Service was trying to achieve that in an orderly manner, by agreement with the Trade Union, but the process had been halted by government pay restraint. The Tribunal simply concluded that We accept that the need for orderly management of the process renders the element of particular disadvantage in this case necessary, but having regard to the totality of the circumstances, we find that such disadvantage to the claimant is no more than is necessary to achieve the objective (para 27). They had not considered alternative ways in which the Prison Service could have eliminated the discrimination against Mr Naeem and the other Muslim chaplains affected within the constraints to which they were subject. Not surprisingly, Mr Naeem agrees with the EAT and asks this Court, should we accept his arguments on the earlier issues, as I would do, to remit the claim to the Employment Tribunal for reconsideration of the justification issue. The EAT records that the Employment Tribunal had been offered the example of a larger group of Prison Service employees, psychotherapists, for whom a suitable adjustment had been made to eliminate discriminatory treatment (para 41). The EAT did not place much, if any, weight on this, as it had been done in the context of an equal pay rather than a discrimination claim. But the EAT made other suggestions for alternative ways of continuing to apply the PCP in question without disadvantage to the claimant backdating his length of service, adding an additional increment at the start of his service, or refusing further pay increases for those higher up the scale while improving the position of those lower down the scale. The Tribunal should have thought of these, especially as they had been given an example of a successful search for solutions. Neither the EAT nor any higher court is entitled to disturb the factual findings of an Employment Tribunal. It must detect an error of law. The Tribunal had adopted the no more than necessary test of proportionality from the Homer case and can scarcely be criticised by this Court for doing so. But we are here concerned with a system which is in transition. The question was not whether the original pay scheme could be justified but whether the steps being taken to move towards the new system were proportionate. Where part of the aim is to move towards a system which will reduce or even eliminate the disadvantage suffered by a group sharing a protected characteristic, it is necessary to consider whether there were other ways of proceeding which would eliminate or reduce the disadvantage more quickly. Otherwise it cannot be said that the means used are no more than necessary to meet the employers need for an orderly transition. This is a particular and perhaps unusual category of case. The burden of proof is on the respondent, although it is clearly incumbent upon the claimant to challenge the assertion that there was nothing else the employer could do. Where alternative means are suggested or are obvious, it is incumbent upon the Tribunal to consider them. But this is a question of fact, not of law, and if it was not fully explored before the Employment Tribunal it is not for the EAT or this Court to do so. I would therefore dismiss the appeal in Mr Naeems case.

These two appeals were heard together because both raise issues arising from claims of indirect discrimination on grounds of race and/or age and/or religion. Indirect discrimination occurs when an employer applies a provision, criterion or practice (PCP) both to people who have and people who do not have the protected characteristic in question but which puts people with that characteristic at a particular disadvantage when compared with others and puts, or would put, the individual at that disadvantage, unless the employer can show that the PCP is a proportionate means of achieving a legitimate aim. Mr Essop is the lead appellant in a group of 49 people, six of whom have been chosen as test cases. They are, or were, all employed by the Home Office. They were required to pass a Core Skills Assessment (CSA) as a pre requisite to promotion to certain civil service grades. A report in 2010 established that Black and Minority Ethnic (BME) candidates, and older candidates, had lower pass rates than white and younger candidates. No one has been able to identify why this is. The appellants issued claims alleging that the requirement to pass the CSA constituted indirect discrimination on the grounds of race or age. The Home Office argued that section 19(2)(b) of the Equality Act 2010 required the appellants to prove the reason for the lower pass rate. The Court of Appeal agreed, upholding the decision of the Employment Judge. Mr Naeem is an imam who works as a chaplain in the Prison Service. Before 2002, Muslim chaplains were engaged on a sessional basis only, because it was believed that there were too few Muslim prisoners to justify employing them on a salaried basis as some Christian chaplains were. Mr Naeem worked on a sessional basis from 2001 but in 2004 became a salaried employee. At this date the pay scheme for chaplains incorporated pay progression over time. The average length of service of Christian chaplains was longer which led to a higher average basic pay. Mr Naeem argued that the incremental pay scheme was indirectly discriminatory against Muslim or Asian chaplains, resulting in lower pay in a post where length of service served no useful purpose as a reflection of ability or experience. Mr Naeems claim was rejected by the Employment Tribunal which found that the indirect discrimination was justified. The Employment Appeal Tribunal held that the scheme was not indirectly discriminatory at all because chaplains employed before 2002 should be excluded from the comparison between the two groups. The Court of Appeal held that it was not enough to show that the length of service criterion had a disparate impact upon Muslim chaplains: it was also necessary to show that the reason for that disparate impact was something peculiar to the protected characteristic of race or religion. The Supreme Court unanimously allows the Essop appeal. It remits the claims to be determined by the Employment Tribunal in accordance with the judgment. It unanimously dismisses Mr Naeems appeal. Lady Hale, with whom all the other Justices agree, gives the only judgment. The concept of indirect discrimination has following salient features: There has never been any express requirement for an explanation of the reasons why a particular PCP puts one group at a disadvantage when compared with others. It is enough that it does [24]. Indirect discrimination, unlike direct discrimination, does not require a causal link between the characteristic and the treatment but does require a causal link between the PCP and the particular disadvantage suffered [25]. The reason for the disadvantage may not be in itself unlawful, or within the control of the employer, but both the PCP and the reason for the disadvantage must be but for causes of the disadvantage [26]. The PCP need not put every member of the group sharing the protected characteristic at a disadvantage. In the Essop case, it was irrelevant that some BME or older candidates could pass the CSA: the group was at a disadvantage because the proportion who could pass was smaller than the proportion of white or younger candidates [27]. It is commonplace for the disparate impact, or particular disadvantage, to be established on the basis of statistical evidence [28]. It is always open to a respondent to show that the PCP is justified. There may well be a good reason for it. A wise employer will, however, try to see if PCPs which do have a disparate impact can be modified to remove that impact while achieving the desired result [29]. The disadvantage suffered by the individual must correspond with the disadvantage suffered by the group. The disadvantage in Essop was that members of the group failed the CSA disproportionately and the appellants suffered this disadvantage. However, a candidate who fails the CSA because he did not prepare or did not turn up for or finish the CSA has not suffered harm as a result of the PCP in question and in such a case it is open to the respondent to show that the causal link between the PCP and the individual disadvantage is absent. The Essop appeal is therefore allowed and the claims are remitted to the Employment Tribunal [30 36]. In Mr Naeems case the reason why the pay scale puts Muslim chaplains at a disadvantage is known. It is because they have on average shorter lengths of service than Christian chaplains [37]. The Court of Appeal was wrong to require the reason to relate to the protected characteristic [39]. The pool of comparators comprises all workers affected by the PCP in question. In this case the incremental pay structure affected all chaplains in the Prison Service and this did put the Muslim chaplains at a disadvantage compared with the Christians [42]. As regards justification, it was not in dispute that the pay scheme had a legitimate aim but the means adopted needed to be proportionate. The Employment Tribunal found as a fact that six years was the most required for newly appointed chaplains to have the skills and experience for reward at the top of the scale, but that in the circumstances the disadvantage suffered by Mr Naeem was no more than was necessary as the transition to a new shorter pay scale took its course. This was the correct test. It is not open to the courts on an appeal to disturb that finding, even if there were alternative means to reduce the disadvantage more quickly which could have been considered [43 47]. Mr Naeems appeal is therefore dismissed.

Since 1969 Mr Cusack has practised as a solicitor at 66 Station Road, Harrow (the property). Station Road, part of the A409, is a single carriage road in each direction flanked by a pedestrian footway. At some unknown date the former front garden was turned into a forecourt open to the highway, which has since then been used for parking cars of staff and clients. This involves cars crossing the footway to gain access, and backing into the road when leaving. The house had been built in around 1900 as a dwelling. In 1973 a personal permission was granted on appeal to Mr Cusack to use the ground floor as offices, subject to a condition requiring cessation by 31 August 1976. It was noted that the ground floor had been used for that purpose for some time, and permission was only sought for a temporary period to enable Mr Cusack to continue his work in the local court. One of the objections had related to traffic generation, but the inspector did not think that use of these rather limited premises has added materially to traffic hazard over the last two years. Following the expiry of that permission the use as an office has continued and has become established in planning terms. The present dispute began in January 2009, when the London Borough of Harrow (the council), as highway authority, wrote to Mr Cusack asserting that the movement of vehicles over the footway caused danger to pedestrians and other motorists. In March 2009 he was informed that the council were planning to erect barriers from 36 to 76 Station Road to prevent vehicles from driving over raised kerbs and footways. After some initial confusion as to the statutory basis for their proposed action, they settled on section 80 of the Highways Act 1980. Mr Cusack began proceedings in the county court for an injunction to prevent the erection of the barriers outside his house. Judge McDowall and on appeal Maddison J found in favour of the council, but their decisions were reversed by the Court of Appeal. Pursuant to an undertaking given by the council to the county court, no barriers have yet been erected outside number 66, although they have been erected outside some other adjoining properties. Apart from statute, Mr Cusack, as owner of property fronting on to the highway, would have had a common law right of access without restriction from any part of the property (see Marshall v Blackpool Corporation [1935] AC 16, 22 per Lord Atkin). In practice those rights have been much circumscribed by statute. As Lord Radcliffe said in Ching Garage Ltd v Chingford Corporation [1961] 1 WLR 470, 478: It is plain, therefore, that, certainly in any built-up area, there are numerous rights of access to the streets from adjoining premises, and that they are rights derived from common law or statute, general or local, or, perhaps, from a combination of the two sources. In my opinion, it is well-settled law that a highway authority exercising statutory powers to improve or maintain a street or highway, such as to raise or lower its level, to form a footpath, to pave or kerb or to erect omnibus shelters, is empowered to carry out its works even though by so doing it interferes with or obstructs frontagers' rights of access to the highway. As that case also shows, although many of the powers conferred by the Acts are subject to payment of compensation, there is no general rule to that effect. As Lord Radcliffe said in the same case (p 475), the right to compensation is a matter of law not concession: If they can do what they want to without having to pay compensation, they have no business to use public funds in paying over money to an objector who is not entitled to it; and if they have to pay compensation, they must pay according to the proper legal measure One of the issues in the appeal is whether that simple dichotomy holds good since the enactment of the Human Rights Act 1998. It is not now in dispute that the council has statutory power to do what it did. The Court of Appeal declared that it is not entitled to proceed under section 80 of the Highways Act 1980, but was so entitled under section 66(2). The latter declaration is not under appeal. The difference lies in whether compensation is payable. Statutory provisions I turn to the relevant sections. Section 66 (in a group of sections headed Safety provisions) provides: Footways and guard-rails etc for publicly maintainable highways (1) It is the duty of a highway authority to provide in or by the side of a highway maintainable at the public expense by them which consists of or comprises a made-up carriageway, a proper and sufficient footway as part of the highway in any case where they consider the provision of a footway as necessary or desirable for the safety or accommodation of pedestrians; and they may light any footway provided by them under this subsection. (2) A highway authority may provide and maintain in a highway maintainable at the public expense by them which consists of or comprises a carriageway, such raised paving, pillars, walls, rails or fences as they think necessary for the purpose of safeguarding persons using the highway. (3) A highway authority may provide and maintain in a highway maintainable at the public expense by them which consists of a footpath or bridleway, such barriers, posts, rails or fences as they think necessary for the purpose of safeguarding persons using the highway. (5) The power conferred by subsection (3) above, and the power to alter or remove any works provided under that subsection, shall not be exercised so as to obstruct any private access to any premises or interfere with the carrying out of agricultural operations. (8) A highway authority or council shall pay compensation to any person who sustains damage by reason of the execution by them of works under subsection (2) or (3) above. Section 80 (in a group headed Fences and boundaries) provides: Power to fence highways (1) Subject to the provisions of this section, a highway authority may erect and maintain fences or posts for the purpose of preventing access to- (a) a highway maintainable at the public expense by them, (b) land on which in accordance with plans made or approved by the Minister they are for the time being constructing or intending to construct a highway shown in the plans which is to be a highway so maintainable, or (c) land on which in pursuance of a scheme under section 16 above, or of an order under section 14 or 18 above, they are for the time being constructing or intending to construct a highway. (2) A highway authority may alter or remove a fence or post erected by them under this section. (3) The powers conferred by this section shall not be exercised so as to- (a) interfere with a fence or gate required for the purpose of agriculture; or (b) obstruct a public right of way; or (c) obstruct any means of access for the construction, formation or laying out of which planning permission has been granted under Part III of the Town and Country Planning Act 1990 (or under any enactment replaced by the said Part III); or (d) obstruct any means of access which was constructed, formed or laid out before 1 July 1948, unless it was constructed, formed or laid out in contravention of restrictions in force under section 1 or 2 of the Restriction of Ribbon Development Act 1935 Reference was also made in earlier correspondence, and in argument before us, to other powers in the Highways Act. They include the power to stop up private means of access subject to compensation (sections 124, 126), and the power to create crossings for, or impose conditions on the use of, accesses onto the highway (section 184). Apart from providing further illustrations of the wide range of sometimes overlapping powers available to authorities under the Act, they appear to throw no useful light on the issues we have to decide. The Court of Appeal The Court of Appeal accepted the submission of Mr Green, for Mr Cusack, that viewed in the context of the structure of the Act as a whole, the appropriate power for what the council wanted to do was section 66 not section 80. As Lewison LJ recorded his submission: Section 66(2) applies where the highway authority consider that the erection of posts etc is necessary for the purpose of safeguarding persons using the highway. This is a much more specific reason for invoking a statutory power than the more nebulous statement of purpose in section 80. Indeed this is precisely the reason, according to the council, why it wishes to erect barriers across the forecourt of 66 Station Road. Lewison LJ found support for that submission in the principle that in statutory construction the specific overrides the general - generalia specialibus non derogant (see eg Pretty v Solly (1859) 26 Beav 606). In his view, the councils proposed action and the reason for taking it fall squarely within section 66(2), and accordingly section 80 did not apply to the facts of the case (para 21). He considered an alternative argument based on section 3 of the Human Rights Act 1998, but did not think that argument took Mr Cusacks case any further (para 27). In this court Mr Sauvain for the council challenges that conclusion. There is no justification, he says, for application of the general/specific principle where there is no conflict between the two provisions. Although they may overlap, they are provided for different purposes and apply in different situations. Where the council has two alternative statutory methods of achieving the same objective, it is entitled to adopt the one which imposes the least burden on the public purse (Westminster Bank Ltd v Minister of Housing and Local Government [1971] AC 508, 530). Whether compensation is payable depends on the particular statutory provision. Mr Green, as I understood his arguments in this court, relied less on the general/specific principle as such, than on a purposive interpretation of the statutory provisions in their context. Although he put his arguments in a number of ways, the common theme was that the broad, unfettered power asserted by the council, without the protection of compensation, was irreconcilable with the general scheme of the Act and the pattern of other comparable provisions. In particular the councils construction of section 80 would enable it to override the safeguards provided in other sections. In particular, it would deprive section 66(2) of most of its apparent content, and, if applied to footpaths and bridleways, would enable it to bypass the prohibition on the use of section 66 to obstruct a private access (section 66(3)(5)). With respect to the Court of Appeal, I am unable to see how the general/specific principle assists in this case. I see no reason to regard either power as more specific or less general than the other. It is true that section 66(2) is directed to a specific purpose (safeguarding persons using the highway), but the powers are defined in relatively wide terms, not necessarily related to private accesses. The powers in section 80 are expressed in narrower terms, related specifically to the prevention of access to an existing or future highway. Although there is no express mention of safety as a purpose, it is implicit that the section must be used for purposes related to those of the Act, which of course include, but are not necessarily confined to, highway safety. Before considering Mr Greens more general submissions it is necessary to say something about the legislative background of the relevant provisions. Legislative history Section 80 It is of interest, though hardly unexpected, that highway safety was one of the purposes referred to when the predecessor of section 80 was first introduced as part of a statute restricting ribbon development (Restriction of Ribbon Development Act 1935, section 4). Mr Sauvains researches have revealed that the then Minister (Mr Hore-Belisha MP better known perhaps for his beacons) described the objects of the new powers as being - to minimise the present dangers to life and limb which result from the erection of houses and buildings with their own means of access at innumerable and ill-considered points along the road, to remove the obstruction to the free passage of traffic and to prevent the further impairment of the setting in which the roads lie. (Hansard (HC Debates), 29 July 1935, col 2335) The 1935 Act imposed a general restriction on the construction, formation or laying out without the consent of the highway authority of any means of access to or from various categories of road, including classified roads (sections 1, 2). Where such restrictions were in force on any road, section 4 enabled the highway authority to erect fences or posts for the purpose of preventing access except at places permitted by them. The section contained exceptions to prevent interference with agricultural fences or gates, or obstruction of public rights of way, and also to prevent obstruction of any means of access formed either before the date on which the restrictions were brought into force, or with the consent of the highway authority thereafter. The Act (section 9) contained provision for compensation for diminution in value caused, not by the erection of the fences as such, but by the prohibition on the formation of new accesses resulting from the restrictions imposed by sections 1 and 2. The main provisions of the 1935 Act (including sections 1, 2 and 9) were repealed by the Town and Country Planning Act 1947, at the same time as the introduction of universal planning control, which has continued under successive enactments to the present day (now the Town and Country Planning Act 1990). The restrictions on ribbon development were in effect subsumed into the general prohibition of development other than with planning permission. For the purposes of the planning Acts, the formation or laying out of means of access to highways was included in the definition of engineering operations and was thus treated as development requiring planning permission (see the 1990 Act, sections 55(1), 336(1)). With very limited exceptions, not material to this case, no compensation was payable for refusal of permission under the new statutory scheme. Section 4 of the 1935 Act was retained following the repeal of the substantive provisions of that Act (including the compensation provision), but was amended by section 113 of, and Schedule 8 to, the 1947 Act to take account of the new legislative scheme. The amended section retained the first two exceptions (agricultural fences or gates, and public rights of way) but for the remainder there was substituted a prohibition in terms related to the 1947 Act. It prohibited use of the section so as to obstruct - any means of access for the construction, formation or laying out of which planning permission has been granted under Part III of the Town and Country Planning Act 1947, or which was constructed, formed or laid out before the appointed day within the meaning of the said Act, unless it was constructed, formed or laid out in contravention of restrictions in force under the foregoing restrictions of this Act. Subject to minor drafting changes, this is the form in which the provision was carried into the Highways Act 1959 (section 85), and now section 80 of the Highways Act 1980. Section 66 Section 66(2) has a very different history, dating back to the Public Health Act 1875. Section 149 included a power for urban authorities to place and keep in repair fences and posts for the safety of foot passengers. That was expanded to something more like its present form in section 39 of the Public Health Acts Amendment Act 1890 (read as one with the 1875 Act: see section 2). The 1875 Act contained a general provision giving compensation for damage caused by the exercise of powers under the Act (section 308). These provisions were replaced by section 67(2) of the Highways Act 1959. By contrast section 67(1) of the 1959 Act (duty to provide footways) reproduced the effect of a more recent enactment, section 58 of the Road Traffic Act 1930. Section 67(1) and (2) were re-enacted as section 66(1) and (2) of the 1980 Act. This different history probably explains why the right to compensation in section 66(8) extends to the effects of works under section 66(2), but not of those under section 66(1). As this account illustrates, the current Highways Act 1980 is the result of a complex evolutionary history extending over more than 130 years. Against this background, and in spite of the efforts of the consolidating draftsmen, it is not perhaps surprising that it contains a varied miscellany of sometimes overlapping and not always consistent statutory powers. The Ching Garage case shows that the present councils confusion as to the appropriate source of the necessary powers is not without precedent. In that case the councils arguments went through a number of vicissitudes (see p 473), before they settled on the provisions on which they lost at trial. By the time of the appeal these had been overtaken by the coming into force of section 67(2) of the 1959 Act, which was substituted by amendment of their pleadings. Having satisfied themselves that the proposed works fell within that provision, their Lordships were not concerned by the possible overlap with other provisions. Planning immunity It is common ground that the use of the property as an office, although in breach of planning control since 1976, has become immune from enforcement. There is no precise finding as to when the occupants of number 66 began to use the forecourt for parking with direct access to the road, nor what works were carried out at that time. Judge McDowall accepted that by the time Mr Cusack acquired the property (1969) it was in its present state, without a front wall or fence, and further that at some time thereafter the pavement was lowered at that point. He was unwilling to find that it began before 1948. The commencement of use of the access, if incidental to the office use of the property, would not itself have involved a material change of use requiring planning permission. But when works were carried out amounting to formation or laying out of a means of access, they would have amounted to an engineering operation and thus development within the statutory definition. That also would have involved a breach of planning control, but again would long since have become immune from enforcement action. Section 80 provides specific protection for accesses formed since 1947 if authorised by planning permission. The protection does not in terms extend to use of accesses which have become immune from enforcement under the planning Acts. In that respect planning law has moved on since 1947. Immunity and its consequences are now governed by amendments made to the 1990 Act by the Planning and Compensation Act 1991, implementing recommendations made in my own report on planning enforcement (Enforcing Planning Control (HMSO 1989)). Among my recommendations was that a development which had become immune from enforcement should be put on the same footing as a permitted use, and that this should be done by treating it as subject to deemed planning permission. I was concerned that the limbo state described as unlawful but immune was confusing to all but specialists and could create difficulties in other areas of the law, including that of compensation for acquisition of land (under the Land Compensation Act 1961, section 5) (see report pp 69-73). Those recommendations were given effect by a new section 191 of the 1990 Act (Certificates of lawfulness of existing use or development). Section 191(2) provides: For the purposes of this Act uses and operations are lawful at any time if - (a) no enforcement action may then be taken in respect of them (whether because they did not involve development or require planning permission or because the time for enforcement action has expired or for any other reason); and (b) they do not constitute a contravention of any of the requirements of any enforcement notice then in force. The section enables application to be made to the local planning authority for a certificate to that effect. It further provides: (6) The lawfulness of any use, operations or other matter for which a certificate is in force under this section shall be conclusively presumed. (7) A certificate under this section in respect of any use shall also have effect, for the purposes of the following enactments, as if it were a grant of planning permission - (a) section 3(3) of the Caravan Sites and Control of Development Act 1960; (b) section 5(2) of the Control of Pollution Act 1974; and (c) section 36(2)(a) of the Environmental Protection Act 1990. It is to be noted that, apart from those three specific cases, the draftsman did not in terms adopt my proposal that there should be a deemed planning permission whenever development had become immune from enforcement. On the other hand, under subsection (2) lawfulness as such for the purposes of the Act does not depend on the issue of a certificate, which is relevant only as evidence of that status. Nor is lawfulness limited to the three categories for which there is deemed planning permission. As Chadwick LJ explained in Epping Forest District Council v Philcox [2002] Env LR 46, paras 28-30, features common to those three statutes are that they involve regulatory regimes which prevent an occupier of land from using that land for the specified purpose unless he is the holder of a licence; that the regimes are underpinned by criminal sanctions; and that no licence can be granted unless at that time the use is authorised by planning permission. In those cases the fact that the use is lawful would not be enough. There is no indication, however, that the specific provision for those three categories was intended to detract from the generality of the proposition that immune uses must now be regarded as lawful for all planning purposes. Lawful for planning purposes might not necessarily be the same as lawful for the purposes of the Highways Act 1980. However, as has been seen, the effect of the 1947 Act was to substitute the general prohibition on development under the planning Acts for the previous more specific restrictions under highways legislation. Apart from planning control, we have not been referred to any other provisions in highways legislation in force since 1947, which would have precluded Mr Cusack from relying on his common law right of access to the highway. Interpretation of section 80 Consideration of the legislative history does not in my view detract from the natural meaning of section 80 as it appears in the 1980 Act. It may be of some interest in explaining why the specific provision for compensation in the 1935 Act was not retained, following the introduction of general planning control, including control over new accesses. As far as concerned Mr Cusacks property, this had the effect that after the 1947 Act any prospective expectation of creating a direct access to the road was subject to the powers of the highway authority, at any time and without compensation, to prevent its use for highway reasons, unless planning permission was first obtained. In my view, apart from the Human Rights Act 1998, Mr Sauvain is right in his submission that the council is entitled to rely on the clear words of section 80 for the power they seek. There is no express or implied restriction on its use. On the basis of the pre-1998 Act authorities, the fact that section 66(2) may confer an alternative power to achieve the same object, which is subject to compensation, is beside the point. That is clear in particular from the Westminster Bank case (see above). There also the legislation provided two different ways of achieving the councils objective, one under the planning Acts and the other under the Highways Act, only the latter involving compensation. The authority was entitled to rely on the former. Lord Reid (giving the majority speech) said: Here the authority did not act in excess of power in deciding to proceed by way of refusal of planning permission rather than by way of prescribing an improvement line. Did it then act in abuse of power? I do not think so. Parliament has chosen to set up two different ways of preventing development which would interfere with schemes for street widening. It must have been aware that one involved paying compensation but the other did not. Nevertheless it expressed no preference, and imposed no limit on the use of either. No doubt there might be special circumstances which make it unreasonable or an abuse of power to use one of these methods but here there were none. ([1971] AC 508, 530) The passage (in the final sentence) also provides an answer to Mr Greens concern that the power might be abused in particular cases, for example, to override specific prohibitions in section 66. Judicial review is not excluded in such circumstances. Mr Green sought to distinguish that case by reference to the speech of Viscount Dilhorne. He had referred to section 220 of the Town and Country Planning Act 1962, which provided for the avoidance of doubt that the powers under that Act were exercisable notwithstanding provision in any other enactment for regulating development. As Mr Green observed, there is no equivalent to that in section 80. However, Viscount Dilhornes reliance on that section was not reflected in the comments of the majority speech, which were expressed in general terms. For these reasons, the council is in my view entitled to succeed, unless some additional limitation on their powers can be derived from the Human Rights Act 1998. To that question I now turn. Human Rights Act 1998 In this part of the case, Mr Green relies on article 1 of the First Protocol to the European Convention on Human Rights (A1P1), which provides: 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 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. In the domestic context A1P1 is given effect by two provisions of the Human Rights Act (HRA). First, section 3 deals with the duty of the court when interpreting legislation. It requires that so far as it is possible to do so legislation must be read and given effect to in a way which is compatible with the Convention rights. Secondly, section 6 deals with acts of public authorities. It provides so far as material: (1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right. (2) Subsection (1) does not apply to an act if (a) as the result of one or more provisions of primary legislation, the authority could not have acted differently; or (b) in the case of one or more provisions of, or made under, primary legislation which cannot be read or given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions. Three questions therefore arise: Is the closure of Mr Cusacks access without compensation under i) section 80 compatible with A1P1? ii) If not, (under HRA section 3) is it possible to read section 80 in such a way as to make it compatible? iii) Alternatively, (under HRA section 6(2)(a)) could the authority have avoided the breach by acting differently? Mr Green submits that use of section 80 to deprive Mr Cusack of vehicular access to his own property and the right to park on his own hard-standing, without any compensation, would be a breach of A1P1, which can be avoided by use of section 66(2) to achieve the same end. The effect of the Strasbourg caselaw under that article, dating from the leading case of Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35, was summarised by the Grand Chamber in Depalle v France (2010) 54 EHRR 535, 559: The Court reiterates that, according to its case-law, Article 1 of Protocol No 1, which guarantees in substance the right of property, comprises three distinct rules (see, inter alia, James v United Kingdom (1986) 8 EHRR 123, para 37): the first, which is expressed in the first sentence of the first paragraph and is of a general nature, lays down the principle of peaceful enjoyment of property. The second rule, in the second sentence of the same paragraph, covers deprivation of possessions and subjects it to certain conditions. The third, contained in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The second and third rules, which are concerned with particular instances of interference with the right to peaceful enjoyment of property, are to be construed in the light of the general principle laid down in the first rule (see Bruncrona v Finland (2004) 41 EHRR 592, paras 65- 69 and Broniowski v Poland (2004) 40 EHRR 495, para 134). Regarding whether or not there has been an interference, the Court reiterates that, in determining whether there has been a deprivation of possessions within the second rule, it is necessary not only to consider whether there has been a formal taking or expropriation of property but to 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 the situation amounted to a de facto expropriation (see Brumrescu v Romania (1999) 33 EHRR 862, para 76 and Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35, paras 63 and 69-74). As that passage makes clear, there is a material distinction between the second rule, relating to deprivation of possessions, and the third (the second paragraph of the article) relating to control of the use of property. Mr Greens primary submission is that removing Mr Cusacks common law right of access to the highway is deprivation of a possession within the second rule. The significance of that characterization, he says, is that where there is a deprivation of property absence of a right to compensation will only be justified in exceptional circumstances (James v UK (1986) 8 EHRR 123, para 54). Alternatively, if deprivation of a frontager's right of access is characterised as a control of his property rights, albeit lawful and in the general interest, the council has not discharged its onus of showing the proportionality of the interference. I say at once that I see no basis for his reliance on the second rule. Mr Cusack has not been deprived of any property. Mr Green was unable to point us to any support in the Strasbourg cases for treating a restriction on the form of access as a deprivation of a possession under that rule. On the other hand, as Mr Sauvain concedes, it falls clearly within the third rule as a control of his property. Accordingly, it is in that context that its compatibility with the Convention right must be considered. Mr Green referred us to the decision in Chassagnou v France (1999) 29 EHRR 615, in which it was held that a law effecting the compulsory transfer to a municipal association of hunting rights over the applicants land was a disproportionate burden and thus a breach of the second paragraph of article 1. Although it was intended that he would be compensated by the grant of a concomitant right to hunt over other land, this was of no value to him since he disapproved of hunting on ethical grounds (see paras 82-85). In my view, the subject-matter of that case was so far from the present that it is of little assistance, other possibly than as an illustration of the width of the principle. Closer to the present context is the decision in Bugajny v Poland (Application No 22531/05) (unreported) given 6 November 2007, which was considered and applied recently by the Court of Appeal in Thomas v Bridgend County Borough Council [2012] QB 512. In my leading judgment I commented on the guidance to be derived from that and other cases since Sporrong: 31. Later cases (see eg Bugajny v Poland (Application No 22531/05) (unreported) given 6 November 2007, para 56 and following) have given further guidance on the practical application of article 1 to individual cases. First, the three rules are not distinct in the sense of being unconnected; the second and third rules are to be construed in the light of the general principle enunciated in the first rule. Secondly, although not spelt out in the wording of the article, claims under any of the three rules need to be examined under four heads: (i) whether there was an interference with the peaceful enjoyment of possessions; (ii) whether the interference was in the general interest; (iii) whether the interference was provided for by law; and (iv) proportionality of the interference. ... 49. The cases show that the issue of proportionality can be expanded into the following question: whether the interference with the applicants' right to peaceful enjoyment of their possessions struck the requisite fair balance between the demands of the general interest of the public and the requirements of the protection of the individual's fundamental rights, or whether it imposed a disproportionate and excessive burden on them. (Bugajny v Poland 6 November 2007, para 67). In Bugajny itself certain plots in a development area had been designated as internal roads, which were in due course built and opened to the public. The developers sought to transfer ownership to the council in return for compensation, under a statute by which public roads were required to be expropriated subject to compensation. This request was rejected on the grounds that, not having been provided for in the local land development plan, they did not belong to the category of public roads. An application to the Strasbourg court alleging a breach of A1P1 succeeded. The requirement to accept the public use of the roads was an interference with the peaceful enjoyment of their possessions within A1P1. Although it met the requirements of being lawful and in the general interest, it was not proportionate. The court recognised that in the area of land development and town planning contracting states enjoyed a wide margin of appreciation in order to implement their policies; but it was for the court to determine whether the requisite balance was maintained in a manner consonant with the applicant's right of property (para 68). To explain how it approached that task, it is necessary to quote from the judgment at some length: [The roads] currently serve both the general public and the housing estate which the applicants developed and are open both to public and private transport of all kinds Given that the entire area of the housing estate covers nine hectares which were divided into as many as thirty-six plots of land designated for the construction purposes, it is reasonable to accept that a considerable number of people can be said to use these roads. It has not been shown or even argued that the access to the estate or the use of these roads is restricted or limited in any way. The situation examined in the present case must therefore be distinguished from that of fenced housing estates to which the public access is restricted by a decision of its inhabitants. The only way in which the land in question can now be used is as roads. The applicants are also currently obliged to bear the costs of their maintenance. The Court emphasises that the burden which the applicants were made to bear is not limited in time in any way. The Court observes that one of the arguments on which the authorities relied when refusing to expropriate the applicants' property was that the roads to be constructed on the estate had not been included in the local land development plan. However, it reiterates that it was not in dispute that the decision on the division could be issued only when the division plan submitted by the owners was compatible with the land development plan. The Court considers that by adopting such an approach the authorities could effectively evade the obligation to build and maintain roads other than major thoroughfares provided for in the plans and shift this obligation onto individual owners. The Court finally notes that the Poznan Regional Court expressed serious doubts as to whether the applicants' situation was compatible with the requirements of article 1 of Protocol No 1. This court expressly compared the applicants' position to that of the applicant in the Papamichalopoulos v Greece case [(1993) 16 EHRR 440] and considered it to be even worse. In the Court's view, the applicants' situation in the present case was less serious than the situation examined in the Papamichalopoulos judgment, because they were not divested of all possibility of using their property. Nonetheless, such a critical assessment on the part of the domestic court is certainly, in the Court's view, of relevance for the overall assessment of the case. Having regard to the above considerations, the Court is of the view that a fair balance was not struck between the competing general and individual interests and that the applicants had to bear an excessive individual burden. (paras 70-74) In the Thomas case the factual circumstances were very different, but a similar approach was applied. The case concerned the exclusion of the right to compensation for the effects of road works where the opening of the road was delayed beyond a fixed time-limit, even if the delay was attributable to default by the authoritys contractor. I noted that, while A1P1 does not impose any general requirement for compensation, its absence may be relevant to the issue of proportionality (para 53): In deciding whether the proportionality test is satisfied, the court is entitled to treat the compensation rights created by the 1973 Act as part of the fair balance thought necessary by Parliament. Where a class of potential claimants is excluded from those rights, the court is entitled to inquire into the reasons for the exclusion, and ask whether it serves any legitimate purpose, or leads to results so anomalous as to render the legislation unacceptable: J A Pye (Oxford) Ltd v United Kingdom (2007) 46 EHRR 1083, para 83. On the particular case I said: Whatever its purpose, the operation of the provision in circumstances such as the present is truly bizarre. The diligent road- builder who completes his project in time is penalised by liability for compensation; the inefficient road-builder is rewarded by evading liability altogether. For the householders there is a double disadvantage. Not only do they suffer the inconvenience and disturbance of a protracted maintenance period, but they lose their right to any compensation for the effects of the use which they are already experiencing. This result is in my view so absurd that it undermines the fairness of the balance intended by Parliament, and necessary to satisfy article 1. In this respect it is my view a stronger case than Bugajny... The nature of the interference was very different. But at the heart of the court's reasoning on proportionality, as I read the decision, was the arbitrary distinction drawn by the domestic law between public roads as designated in the development plan, and internal roads which were no less public in practice, and no less appropriate for adoption by the authorities. The fairness of the balance between public and private interests was destroyed by the opportunity so given to the authorities to evade the responsibility otherwise imposed on them. At least there the state was able to raise an arguable case for distinguishing between the two categories of road. Here, instead, the section produces a result which is directly contrary to that which common sense would dictate. (paras 56-57) As is perhaps implicit in that passage, I regard Bugajny as a somewhat extreme example of the use of A1P1 to override the decisions of the national authorities. The court effectively substituted its own views for that of the national courts as to what was a public road under national law. However, it is relevant that the present case, like Bugajny, falls in the general field of land development and town planning, in which the state is allowed a wide margin of appreciation. As that case also shows, the issue of proportionality is not hard-edged, but requires a broad judgment as to where the fair balance lies. It is not in my view confined to cases of the truly bizarre (as in Thomas), or what might be termed irrationality or Wednesbury unreasonableness in domestic law. In this respect, in my view, the Convention may require some qualification to the narrow approach established by earlier authorities, such as Westminster Bank. The issue is not simply whether the councils action is an abuse of its powers under section 80, but whether in that action a fair balance was struck between the competing general and individual interests. On the other hand, there is no challenge to the compatibility of section 80 as such. Accordingly, the mere fact that another statutory route was available involving compensation does not in itself lead to the conclusion that reliance on section 80 was disproportionate. One argument on the councils side might have been that the requirement for specific planning permission under section 80 is designed to ensure that there has been an opportunity for highway considerations to be taken into account. That, however, does not explain why the exception can be overridden by use of a different power, the only material difference being liability to compensation. Further the inclusion of an exception for pre-1947 uses, regardless of whether they have been assessed on safety grounds, shows that the exclusion is related at least as much to protection of accrued rights as to safety considerations. It was also suggested in the course of argument that frontagers potentially at risk under section 80 could have protected themselves by seeking retrospective planning permission. However, it is at least doubtful whether that would be a proper use of the councils power, in relation to a use which is already lawful for planning purposes, and where the sole object is not a planning purpose, but to secure a right to compensation under a different legislative scheme. Mr Greens strongest argument in my view rests on the changes made by the 1991 Act. Previously, the access, though immune from enforcement under the planning Acts, was not lawful, and therefore, it could be said, should not be the subject of compensation (cf the Land Compensation Act 1973, section 5(4)). As he submits, that position has now changed. The access is to be regarded as lawful for planning purposes, and therefore, he says, there is no good reason for treating it less favourably than a pre-1948 use. The question must however be answered principally by reference to the balance drawn by section 80 itself, allowing for the wide margin of appreciation allowed to the national authorities. It is in my view significant that the legislature did not adopt my recommendation that all immune uses and operations should be treated generally as though subject to planning permission, apart from the three cases specified in the section. There may be room for argument as to where the line in section 80 should have been drawn, but the compatibility of the section is not the issue. Given the availability of the power as a legitimate means of controlling use of a private access in the public interest, its use in the present circumstances was in my view neither an abuse of the councils powers nor outside the boundaries of the discretion allowed by the Convention. For these reasons, I would allow this appeal and (save for the second part of the declaration, relating to possible use of section 66(2), which is not in dispute) set aside the order of the Court of Appeal. LORD NEUBERGER (with whom Lord Sumpton and Lord Hughes agree) Mr Cusack contends that he is entitled to compensation for the loss of vehicular access to his property at 66 Station Road, Harrow, across the footway of the A409 highway. This contention is based on the proposition that, in order to justify its right to impede that access (the access), the council should be required to rely on section 66 of the Highways Act 1980 which provides for compensation, rather than on section 80 of the same Act, which does not. Mr Cusack puts his case on two alternative bases. The first, which was accepted by the Court of Appeal, is that, as a matter of ordinary statutory interpretation, the council cannot choose to rely on section 80, and can only properly rely on section 66. If this is wrong, his alternative basis, which was rejected by the Court of Appeal, is that, once one takes into account the European Convention on Human Rights, and in particular article 1 of the First Protocol (A1P1), the council must rely on section 66 rather than section 80. I agree with Lord Carnwath that both these arguments fail, and that accordingly the councils appeal to this court should be allowed, for the reasons which he gives. However, I would like to add a little, not least because we are differing from the Court of Appeal. As has been accepted by both parties, at least as a matter of language, section 66(2) and section 80(1) of the 1980 Act each appear to be capable of justifying the councils actions in blocking the access. If indeed they do both apply in this case, then, subject to the effect of A1P1, it appears clear the council would be entitled to choose which of the two statutory provisions to rely on. In Westminster Bank Ltd v Minister of Housing and Local Government [1971] AC 508, 530, having said that where Parliament has chosen to set up two different ways of preventing development and that [i]t must have been aware that one involved paying compensation but the other did not, Lord Reid concluded that in the absence of special circumstances which make it unreasonable or an abuse of power to use one of these methods, a highway authority was entitled to rely on either method. Indeed, it was suggested that, bearing in mind the councils obligation to conserve public funds, the council has a duty to rely on section 80. Thus, in a slightly different context, Lord Radcliffe said in Ching Garage Ltd v Chingford Corporation [1961] 1 WLR 470, 475, that if a highway authority can do what they want to without having to pay compensation, they have no business to use public funds in paying over money to an objector who is not entitled to it. It seems to me that the correct test in a case such as this, where there are two separate statutory provisions which could apply, is that, as Lord Reid stated, it is open to the council to rely on either provision, provided that it is reasonable in all the circumstances for it to do so. However, the Court of Appeal concluded that, despite the language of section 80(1), it could not be relied on here, because, construing the 1980 Act as a whole, section 66(2) was the specific statutory provision which applied to the councils actions in this case, and the council could not effectively disapply it by invoking the more general power contained in section 80(1). In his clear and succinct judgment, Lewison LJ identified the relevant approach to interpretation by quoting from a judgment of Sir John Romilly MR in Pretty v Solly (1859) 26 Beav 606, 610. Sir John said that wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply. It was suggested on behalf of the council that this case represented an opportunity for this court to make it clear that canons of construction should have a limited role to play in the interpretation of statutes (and indeed contracts). In my view, canons of construction have a valuable part to play in interpretation, provided that they are treated as guidelines rather than railway lines, as servants rather than masters. If invoked properly, they represent a very good example of the value of precedent. Interpretation of any document ultimately involves identifying the intention of Parliament, the drafter, or the parties. That intention must be determined by reference to the precise words used, their particular documentary and factual context, and, where identifiable, their aim or purpose. To that extent, almost every issue of interpretation is unique in terms of the nature of the various factors involved. However, that does not mean that the court has a completely free hand when it comes to interpreting documents: that would be inconsistent with the rule of law, and with the need for as much certainty and predictability as can be attained, bearing in mind that each case must be resolved by reference to its particular factors. Thus, there are some rules of general application eg that a statute cannot be interpreted by reference to what was said about it in Parliament (unless the requirements laid down in Pepper v Hart [1993] AC 593 are satisfied), or that prior negotiations or subsequent actions cannot be taken into account when construing a contract. In addition, particularly in a system which accords as much importance to precedence as the common law, considerable help can often be gained from considering the approach and techniques devised or adopted by other judges when considering questions of interpretation. Even though such approaches and techniques cannot amount to rules, they not only assist lawyers and judges who are subsequently faced with interpretation issues, but they also ensure a degree of consistency of approach to such issues. Hence the so-called canons of construction, some of which are of relatively general application, such as the so-called golden rule (that words are prima facie to be given their ordinary meaning), and some of which may assist in dealing with a more specific problem, such as that enunciated by Sir John Romilly in Pretty v Solly. With few, if any, exceptions, the canons embody logic or common sense, but that is scarcely a reason for discarding them: on the contrary. Of course there will be many cases, where different canons will point to different answers, but that does not call their value into question. Provided that it is remembered that the canons exist to illuminate and help, but not to constrain or inhibit, they remain of real value. Although the principle expressed by Sir John Romilly, sometimes referred to by the Latin expression generalia specialibus non derogant, is a valuable canon of construction, I do not consider that it applies in relation to section 66 and section 80 of the Highways Act 1980. That is because I do not think that it is possible to treat section 66(2) as a specific provision in contrast with section 80(1) as the more general provision. They are, as Mr Sauvain QC for the council submitted, simply different provisions concerned with overlapping aims and with overlapping applications. Each provision authorises a highway authority to erect posts, in the case of section 66 to [safeguard] persons using the highway, and in the case of section 80 for the purpose of preventing access to a highway. There is a relatively narrow exception, in section 66(5), to the circumstances in which section 66(2) can be relied on but by virtue of section 66(8), if it is relied on, it carries with it compensation; on the other hand, there are fairly widely drawn circumstances, set out in section 80(3), in which section 80(1) cannot be invoked, but, where it is relied on, it carries no compensation. The notion that either of two independent provisions in the same statute can be invoked for a particular purpose may seem surprising, especially when that purpose involves an interference with a frontagers right of access by a public body, and when the provisions have significantly different consequences for the frontager. Accordingly, one can well understand why the Court of Appeal sought to reconcile section 66(2) and section 80(1) so as to avoid, or at least to minimise, any overlap. However, as Lord Carnwaths analysis in paras 13-19 above shows, the 1980 Act, like its predecessor was a consolidating statute, and, while it included amendments, it did not purport to rationalise and re-codify the existing law. Rather, it sought to bring into a single Act of Parliament most, if not all, of the various existing and rather disparate statutory provisions relating to highways, which had developed over the years in a piecemeal way, with a few amendments. That was equally true of the 1959 Act, as evidenced by the statutory provisions considered, and the approach taken to them by the House of Lords, in Westminster Bank. Extensive reference to the genealogy or archaeology of a consolidating statute is almost always unhelpful, and is sometimes positively confusing. However, in this case, once one appreciates the way in which the 1980 Act was put together, and more particularly the different statutory origins of sections 66(2) and 80(1), the force of the argument that the two provisions should be construed in a mutually exclusive way is substantially weakened. In view of the history of the 1980 Act, it is unsurprising that it includes provisions which substantially overlap, and courts should not therefore strain to find an interpretation which avoids or minimises such overlap. So far as the application of A1P1 is concerned, as the Grand Chamber said in Depalle v France (2010) 54 EHRR 535, para 78, it is necessary not only to consider whether there has been a formal taking or expropriation of property but to look behind the appearances and investigate the realities of the situation. On that basis, it seems to me clear that the restriction of Mr Cusacks frontager rights, by depriving him of vehicular access to his property, did not involve the deprivation of a possession, within the second rule of A1P1, as identified in Depalle, para 77. However, I do accept, as did the council, that it falls within the third rule there identified, namely the control [of] the use of property in accordance with the general interest. As Lewison LJ said in the Court of Appeal, [2011] EWCA Civ 1514, [2012] PTSR 970, para 25, [E]ven on Mr Green's hypothesis the council is not proposing to rob Mr Cusack of all access to the highway. It is merely proposing to block vehicular access to the highway; and even then perhaps only access by four wheeled vehicles. So even on that basis he is not deprived of the right of access to the highway: the right is being controlled so that it can only be exercised in a particular way. Given that the disadvantage suffered by Mr Cusack falls within the third rule, I do not see how it can be said that the councils reliance on section 80, with the consequence that Mr Cusack receives no compensation, falls foul of A1P1. Although there is no general right to compensation where the third rule applies, that is not, I accept, the end of the matter: it is appropriate to consider whether the exceptions in section 80(3), and in particular the fact that Mr Cusacks case does not fall within them, can be said to be arbitrary. I do not consider such a suggestion to be supportable. Section 80(3)(c) and (d) are drawn so as to exclude accesses which are immune from enforcement under the planning legislation, as opposed to accesses which, under para (c), are the subject of planning permission or deemed planning permission, or which, in the case of para (d), pre-dated the planning legislation. I accept that the distinction between (i) actual or deemed permission and (ii) immunity from enforcement is somewhat narrow, but it undoubtedly exists and has long existed, and it is far from arbitrary or irrational, as Lord Carnwath explains in paras 20-25. Given that there is nothing in the argument that the councils reliance in this case on section 80, which carries no compensation, offends A1P1, I do not consider that the fact that the council could have relied on section 66, which would have carried compensation, alters that conclusion. The fact that these two provisions happen to have overlapping applications, but different consequences in terms of compensation, is explicable by reference to their different origins. A1P1 does not carry with it a general rule that, where the state seeks to control the use of property, and could do so under two different provisions, which have different consequences in terms of compensation, it is obliged to invoke the provision which carries some (or greater) compensation. Of course, as in domestic law (as explained by Lord Reid in Westminster Bank), in a particular case with special facts, there may be such an obligation, but no such special facts have been prayed in aid here. LORD MANCE I agree that the appeal should succeed for the reasons given by Lord Carnwath in paras 27 to 50 and by Lord Neuberger in paras 61 to 69 of their respective judgments.

This case concerns the circumstances in which a highway authority is required to pay compensation for the erection of barriers preventing a property owner accessing a public highway from his or her property. Mr Cusack is a solicitor who has practised from a property on a main road in Harrow since 1969. The property was originally built as a dwelling and had a garden at the front adjoining a footpath which runs alongside the road. In 1973, Mr Cusack obtained temporary planning permission to use the ground floor of the property as offices until August 1976. That use of the property continued and is now to be regarded as lawful (by virtue of section 191(2) of the Town and Country Planning Act 1990). At an unknown date, the garden at the front of the property was turned into a forecourt for use as a car park for members of staff and clients. In order to enter and leave the forecourt, cars are required to cross the footpath. In January 2009, Harrow London Borough Council, the relevant highway authority, informed Mr Cusack that the movement of vehicles across the footpath was a danger to pedestrians and other motorists. Mr Cusack was told that the council intended to erect barriers in front of his property and several neighbouring properties in order to prevent cars driving over the footpath. Mr Cusack began proceedings seeking an injunction restraining the council from erecting the barriers. A county court judge refused to grant the injunction, holding that the council had power to erect the barriers under section 80 of the Highways Act 1980, which permits a highway authority in certain circumstances to erect and maintain fences or posts for the purpose of preventing access to a public highway. The Court of Appeal held that section 80 was not applicable because the council had power to erect the barriers under section 66(2) of the 1980 Act, which empowers a highway authority to erect and maintain walls, rails, fences etc. if necessary for the purpose of safeguarding persons using the highway and (unlike section 80) would require compensation to be paid to Mr Cusack. The council appealed to the Supreme Court. Mr Cusack accepts that the council has power to erect the barriers, but maintains that appropriate compensation must be paid. No barriers have yet been erected in front of Mr Cusacks property. The Supreme Court unanimously allows the councils appeal. Lord Carnwath gives the leading judgment. The owner of a property adjoining a highway has a common law right of access to the highway, without restriction, from any part of his or her property. However, that right has been greatly limited by statutory provisions and there is no general right to compensation when action is taken to restrict a property owners right of access to an adjoining highway [4]. Canons of statutory construction, including the principle that a specific statutory provision excludes the application of an inconsistent and more general statutory provision, have a valuable role to play as guidelines embodying logic or common sense [57,60]. However, the distinction between general and specific statutory provisions is of no assistance in this case because neither section 66(2) nor section 80 of the 1980 Act can be regarded as more specific or less general then the other. The power conferred by section 66(2) must be used for a specific purpose (safeguarding persons using the highway) but, unlike section 80, it is not confined to preventing access to a highway [12, 61]. The 1980 Act is a consolidating statute and is the result of a complex history extending over more than 130 years. It contains a variety of overlapping and sometimes inconsistent powers [19, 64]. The council is entitled to rely on the clear wording of section 80 in order to erect barriers in front of Mr Cusacks property. It does not matter that the council could use section 66(2) to achieve the same objective. However, a highway authoritys use of section 80 could be challenged if, for example, it circumvented the specific prohibitions of the use of the power conferred by section 66(2) [27]. The Human Rights Act 1998 does not preclude the council from relying on section 80 because it involves no breach of Mr Cusacks right to peaceful enjoyment of his property under article 1 of the First Protocol to the ECHR (A1P1): o The erection of barriers in front of Mr Cusacks property would be a control of the use of property, not a deprivation of property [37, 66]. o This case concerns land development and town planning, in relation to which the state enjoys a wide margin of appreciation [44]. o The issue of the proportionality of the interference with Mr Cusacks rights under A1P1 requires a broad judgment as to where a fair balance lies between competing general and individual interests; the issue is not merely whether the council has abused its powers. Although there is no general right to compensation under A1P1, the absence of compensation is relevant to the proportionality of any interference with the rights guaranteed by A1P1 [42 44]. o There has been no challenge by Mr Cusack to the compatibility of section 80 with A1P1 as such. The mere fact that another statutory route is available to the council and that it requires the payment of compensation to Mr Cusack does not itself lead to the conclusion that the councils reliance on section 80 is disproportionate. There is no general rule under A1P1 that, where the state seeks to control the use of property and could do so under two different provisions which have different consequences in terms of compensation, it is obliged to use the provision which carries some (or greater) compensation [45, 69]. o A use of property that is immune from planning enforcement measures, and is therefore to be regarded as lawful under section 191(2) of the Town and Country Planning Act 1990, is not to be treated for all purposes as being the subject of a deemed planning permission. Mr Cusacks use of the vehicular access to his property via the footpath is, therefore, different from the use of a means of access that is authorised by planning permission (and which, by virtue of section 80(3)(c), could not be obstructed by the use of the power conferred by section 80) [49, 68].

The central issue in this appeal is whether the Secretary of State was precluded under the British Nationality Act 1981 from making an order depriving the appellant of British citizenship because to do so would render him stateless. This turns on whether (within the meaning of article 1(1) of the 1954 Convention relating to the Status of Stateless Persons) he was a person who is not considered as a national by any state under the operation of its law. If this issue is decided against him he also seeks to argue that the decision was disproportionate and therefore unlawful under European law. Background The appellant was born in Vietnam in 1983 and thus became a Vietnamese national. In 1989, after a period in Hong Kong, the family came to the UK, claimed asylum and were granted indefinite leave to remain. In 1995 they acquired British citizenship. Although none of them has ever held Vietnamese passports, they have taken no steps to renounce their Vietnamese nationality. The appellant was educated in this country and attended college in Kent. At 21 he converted to Islam. Between December 2010 and July 2011 he was in the Yemen, where, according to the security services but denied by him, he is said to have received terrorist training from Al Qaida. It is the assessment of the security services that at liberty he would pose an active threat to the safety and security of this country. That assessment has not yet been subject to judicial examination. On 22 December 2011 the Secretary of State served notice of her decision to make an order under section 40(2) of the British Nationality Act 1981 depriving the appellant of his British citizenship, being satisfied that this would be conducive to the public good. She considered that the order would not make him stateless (contrary to section 40(4)) because he would retain his Vietnamese citizenship. The order was made later on the same day and served on the appellant, followed by notice of her decision to deport him to Vietnam. Thereafter, the Vietnamese government has declined to accept him as a Vietnamese citizen. The United States of America have asked for him to be extradited to stand trial in that country. The Home Secretary certified that the request of the USA for the extradition of the appellant was valid. The appellant challenged the request before District Judge Nicholas Evans over several dates during July and October 2013. The District Judge rejected all grounds of challenge in a judgment handed down on 26 November 2013. The Home Secretary made her decision to order the extradition of the appellant on 22 January 2014 and the appellant appealed. The hearing before Aikens LJ and Simon J took place on 15 and 16 July 2014. The parties made further written submissions on 17 and 24 November 2014 and 1 December 2014. The Administrative Court gave its judgment on 12 December 2014, dismissing the appeal ([2014] EWHC 4167 (Admin). At para 91 Aikens LJ held that the issue of the appellants citizenship makes no difference to his relevant article 6 rights. The Administrative Court refused to certify a question of general public importance on 30th January 2015. Under the relevant provisions of the Extradition Act 2003, the appellant must be extradited within 28 days, that is, no later than 26 February 2015. The appeal proceedings On 13 January 2012 he appealed against the decision to remove his British citizenship on legal and factual grounds. His grounds of appeal asserted (inter alia) that he was married to a British citizen with a child, that he was of good character and was not linked to terrorism as claimed, and that the decision was incompatible with his rights under the European Convention on Human Rights. He also claimed that deprivation of British citizenship was prohibited by section 40(4) because it would render him stateless. This was on the grounds that Vietnamese law did not permit dual nationality, and accordingly his Vietnamese citizenship had been lost when he became a British citizen. The Secretary of State had certified (under section 40A(2)) that her decision had been taken in part in reliance on information, disclosure of which would be contrary to the public interest. His appeal accordingly lay to the Special Immigration Appeals Commission (SIAC): Special Immigration Appeals Commission Act 1997, section 2B. By section 4 of that Act the panel may consider not only whether the decision was in accordance with law, but also whether any discretion exercised by the Secretary of State should have been exercised differently. In June 2012 SIAC held a hearing to determine, as a preliminary issue, the issue of statelessness. On 29 June 2012 the panel allowed the appeal, holding that the effect of the Secretary of State's decision would be to render him stateless. On 24 May 2013 that decision was reversed by the Court of Appeal ([2013] EWCA Civ 616: Jackson, Lloyd Jones and Floyd LJJ), which remitted the case to SIAC for further consideration of the other grounds of appeal. SIAC had given a fully reasoned decision on the statelessness issue in an open judgment. As the Court of Appeal noted, it had supplemented its open decision with a separate short closed judgment, which the Court of Appeal had read at the request of the Secretary of State. Although the panel indicated that an appellate court would need to refer to the closed judgment fully to understand the reasons for our decision (para 2), the Court of Appeal found nothing in it which affected their conclusions in the case (para 22, per Jackson LJ). In this court neither party has invited us to look at the closed judgment nor suggested that the closed material contains anything which might affect our conclusions on the questions we have to decide. Consideration by SIAC SIAC noted the course of dealings between the British and Vietnamese governments in connection with the decision made in December 2011. Although there was evidence of discussions between the two governments beginning in October 2011, the panel found that no information about the identity, date and place of birth or alleged activities of the appellant was communicated to the Vietnamese government until 22 December. It continued: It is not suggested that the Vietnamese government then had any view about the status of the appellant. There have been extensive discussions between the British and Vietnamese governments about him since then, the relevant parts of which are analysed in the closed judgment. It is a fact that, despite being provided with those details, the Vietnamese government has not expressly accepted that the appellant is (and was on 22 December 2011) a Vietnamese citizen. For reasons explained in the closed judgment, we are satisfied that this omission is deliberate There is no evidence or suggestion that the Vietnamese government has taken any action since 22 December 2011 to deprive the appellant of Vietnamese citizenship. (paras 7 8) They were shown extracts of the relevant Vietnamese laws, and heard evidence from two Vietnamese lawyers, Ambassador Binh for the appellant and Dr Nguyen Thi Lang for the Secretary of State. It is unnecessary to do more than summarise the main points, which are not now in dispute. Following the end of the Vietnam war, North and South Vietnam were reunited in 1975, eight years before the appellant was born. At that time nationality was governed by Order 53, dating from 1945, which continued in force until 1988. Under that order children born in Vietnam automatically acquired Vietnamese citizenship. The order also provided (with one irrelevant exception) that a Vietnamese citizen would lose that nationality on acquiring foreign nationality, thus in effect prohibiting dual nationality. That order was replaced by the 1988 Nationality Law, which remained in force until 1998, and was therefore the operative law when the appellant acquired British citizenship in 1995. Article 3 of the 1988 Law provided: Recognition of a single nationality for Vietnamese citizens. The State of the Socialist Republic of Vietnam recognizes Vietnamese citizens as having only one nationality being Vietnamese. Unlike Order 53 the 1988 law did not in terms prohibit dual nationality. SIAC rejected the appellants submission that it did so by implication (para 10). It found further (para 17) that the possibility of dual citizenship was expressly acknowledged by a 1990 decree by the Council of Ministers, which made specific provision for Vietnamese citizens who concurrently hold another nationality. Ambassador Binh, who had played a part in drafting the 1988 legislation, gave evidence of the then policy to encourage the return of Vietnamese citizens who had left the country for political or economic reasons (para 15). Article 8 of the 1988 Law provided that a citizen might lose Vietnamese nationality in four defined circumstances: (1) being permitted to relinquish Vietnamese nationality, (2) being deprived of that nationality, (3) losing that nationality as a result of international treaties, or (4) losing Vietnamese nationality in other cases as provided for in this Law. Articles 9, 10, 12 and 14 provided further details of the four categories. Article 15 of the 1988 Law provided: 1. The Council of Ministers shall determine in all cases the granting, relinquishing, restoration, depriving and revoking of decisions to grant Vietnamese nationality. 2. Procedures for deciding all questions of nationality shall be determined by the Council of Ministers. The 1988 law was replaced by a new 1998 Nationality Law with effect from January 1999 (para 12). It contained similar provisions in respect of the loss of nationality. The State President was given sole power to determine nationality questions in individual cases. That law was replaced in turn by the 2008 Nationality Law with effect from July 2009. As the panel found (para 13) decision making power rested with the President; there was no provision for determination of any such issue by a court. The panel accepted, in line with the evidence of the expert for the Secretary of State, that on the basis of the legislative texts alone the appellant remained a Vietnamese citizen: None of the laws since 1988 have provided for automatic loss of Vietnamese citizenship on the acquisition of foreign citizenship. All contained provision for relinquishment with permission or deprivation. In each case, the Vietnamese state would play a determinative part: granting or withholding permission to relinquish and making a decision to deprive. Further, article 2 of the 1990 Decree expressly acknowledges the possibility of holding dual citizenship. There being no provision for automatic loss on acquiring foreign citizenship, the natural conclusion is that the effect of article 3 is only that the Vietnamese state will not recognise the foreign citizenship of a Vietnamese national.(para 17) However, in their view the issue could not be determined principally by reference to the text of the law. They accepted Ambassador Binhs evidence, from which they drew the following conclusions: The true position is that stated by Ambassador Binh: the 1988 law was deliberately ambiguous so as to permit the Executive to make whatever decisions it wished. It has, consistently, wished to encourage the return of prosperous and talented individuals of Vietnamese origin, for economic purposes and may even in recent years have encouraged the return of those with strong family connections. It has not, however, lost the ability, as a matter of Vietnamese law and/or state practice, to decline to acknowledge, as Vietnamese citizens, individuals of Vietnamese origin whose return it wishes to avoid. Now that the Vietnamese government has received adequate information about the appellant, we are satisfied that it does not consider him to be a Vietnamese national under the operation of its law. Its decision may to western eyes appear arbitrary. Nevertheless, for reasons which are more fully explained in the closed judgment, we are satisfied that that is the stance of the Vietnamese government. Given that both Vietnamese law and state practice give it that power, we must accept that it is effective. Accordingly, the answer to the preliminary question is that the decision of the Secretary of State to deprive the appellant of his citizenship on 22 December 2011 did make him stateless and so is not permitted under section 40(4) of the 1981 Act. (paras 18 19) On its face this was a conclusion about the position taken by the Vietnamese government subsequent to the relevant decision of the Secretary of State. On that basis, the decision of the Secretary of State would not itself have rendered him stateless at the time it was taken. To understand how the panel related their conclusion to the time of that decision, it is necessary to refer to an earlier passage where they explained their understanding of the issue before them: The precise question which we have to answer is whether, as at 22 December 2011, the state of Vietnam did or not consider the appellant to be a Vietnamese national under the operation of its law. That is not a question which can sensibly be answered by reference only to the inadequate information available to the Vietnamese government as at that date. On the facts of this case, the question must be answered by determining what the settled attitude of the Vietnamese government is to the appellants status now that it has all the information which it needs to form its view. (para 7) They considered and dismissed a submission by Mr Tam QC for the Secretary of State that if, under the relevant law, the appellant was a Vietnamese citizen on 22 December 2011, a subsequent decision by the Vietnamese government not to recognise that citizenship would mean that he was not de jure stateless when the deprivation order was made. They said: We do not accept that submission. We prefer and have applied the formulation set out above: to determine what the settled view of the Vietnamese government is, now that it knows the facts, and to apply it to the stance that it would have taken if it had known them on 22 December 2011. There is a reasonably close analogy with what might happen in a more conventional case. If, under the law of a state, nationality status was doubtful but was subsequently determined by a court of that state, SIAC would be bound to accept that the courts determination applied as at the date of deprivation even if, at that date, the position was unclear. (para 8) 19. The Court of Appeal The sole substantive judgment was given by Jackson LJ, with whom the other members of the court agreed. He discussed at some length the relevant legislative and non legislative materials relating to the 1954 Convention relating to the Status of Stateless Persons, including papers and reports produced in connection with a meeting of experts convened by the UNHCR in Prato, Italy in 2010. As will be seen, the availability to us of more up to date guidance from the UNHCR makes it unnecessary to comment in detail on his review of the earlier reports. Jackson LJs principal reasoning is found in paras 88 92 of the judgment: 88. The position under Vietnamese nationality law is tolerably clear. Mr Pham retained his Vietnamese nationality through all the events of the 1980s and the 1990s. The 2008 Law did not change Mr Pham's legal status. The fact that in practice the Vietnamese Government may ride roughshod over its own laws does not, in my view, constitute the operation of its law within the meaning of article 1.1 of the 1954 Convention. I accept that the executive controls the courts and that the courts will not strike down unlawful acts of the executive. This does not mean, however, that those acts become lawful. 91. The Vietnamese Government has now, apparently, decided to treat Mr Pham as having lost his Vietnamese nationality. They have reached this decision without going through any of the procedures for renunciation, deprivation or annulment of Vietnamese nationality as set out in the 2008 Law and its predecessors. I do not accept that this can be characterised as the position under domestic law as that phrase is used in para 18 of the Prato Report. 92. If the relevant facts are known and on the basis of those facts and the expert evidence it is clear that under the law of a foreign state an individual is a national of that state, then he is not de jure stateless. If the Government of the foreign state chooses to act contrary to its own law, it may render the individual de facto stateless. Our own courts, however, must respect the rule of law and cannot characterise the individual as de jure stateless. If this outcome is regarded as unsatisfactory, the remedy is to expand the definition of stateless persons in the 1954 Convention or in the 1981 Act, as some have urged. The remedy is not to subvert the rule of law. The rule of law is now a universal concept. It is the essence of the judicial function to uphold it. Statelessness 20. It is common ground that the term stateless in section 40(4) has the same meaning as in article 1(1) of the 1954 Convention relating to the Status of Stateless Persons, which reads (in the English version): For the purpose of this Convention, the term stateless person means a person who is not considered as a national by any State under the operation of its law. As the introduction to the Convention makes clear, the French and Spanish versions are equally authentic to the English text. They read respectively: Aux fins de la prsente Convention, le terme apatride dsigne une personne qu'aucun tat ne considre comme son ressortissant par application de sa lgislation. A los efectos de la presente Convencin, el trmino aptrida designar a toda persona que no sea considerada como nacional suyo por ningn Estado, conforme a su legislacin. 21. As Jackson LJ explained (para 26ff), academic texts and international instruments on this subject have drawn a distinction between de jure and de facto statelessness: that is, between those who have no nationality under the laws of any state, and those who have such nationality but are denied the protection which should go with it. It is common ground that the definition in article 1 corresponds broadly to the former category, but equally that it is the words of the article itself which are determinative. Under the 1969 Vienna Convention on the Law of Treaties article 31(1), those words must be read in good faith and in the light of [the] object and purpose of the treaty. 22. The UN High Commissioner for Refugees (UNHCR) has a special role, as the designated body (under article 11 of the 1961 Convention on the Reduction of Statelessness) to which a person claiming the benefit of the Convention may apply for examination of the claim and for assistance in presenting it to the appropriate authority. The Court of Appeal referred to a report by its senior legal adviser, Hugh Massey, for a meeting of experts convened by the UNHCR in Prato in 2010, and to the report (Prato Report) which emerged from that meeting. However the Court of Appeal was not apparently referred to the guidelines published by the UNHCR in February 2012, following the Prato Report, nor to the guidance issued in May 2013 by the Secretary of State herself, based to a large extent on the UNHCR guidelines. 23. A further meeting of experts in Tunisia, convened by the UNHCR in autumn 2013, emphasised the need to respect the decision of the state whose nationality is in issue: 6. A Contracting State must accept that a person is not a national of a particular State if the authorities of that State refuse to recognize that person as a national. A Contracting State cannot avoid its obligations based on its own interpretation of another State's nationality laws which conflicts with the interpretation applied by the other State concerned. 24. We have the advantage of even more recent guidance from the UNHCR in the form of a handbook issued in June 2014, which draws on the results of the expert meetings and the earlier guidance. The following passage appears under the heading not considered as a national . under the operation of its law: Meaning of law The reference to law in article 1(1) should be read broadly to encompass not just legislation, but also ministerial decrees, regulations, orders, judicial case law (in countries with a tradition of precedent) and, where appropriate, customary practice. When is a person not considered as a national under a State's law and practice? Establishing whether an individual is not considered as a national under the operation of its law requires a careful analysis of how a State applies its nationality laws in an individual's case in practice and any review/appeal decisions that may have had an impact on the individual's status. This is a mixed question of fact and law. Applying this approach of examining an individual's position in practice may lead to a different conclusion than one derived from a purely formalistic analysis of the application of nationality laws of a country to an individual's case. A State may not in practice follow the letter of the law, even going so far as to ignore its substance. The reference to law in the definition of statelessness in article 1(1) therefore covers situations where the written law is substantially modified when it comes to its implementation in practice. (paras 22 24) 25. A similar passage had appeared in the 2012 Guidelines (paras 15 17). This, we were told by Mr Tam on instructions, was the basis of the following paraphrase in the Secretary of States 2013 guidance: Establishing whether an individual is not considered as a national under the operation of its law requires an analysis of how a State applies its nationality laws in practice and has applied them to the individual, taking account of any review/appeal decisions that may have had an impact on the individual's status. The reference to by the operation of its law in the definition of a stateless person in article 1(1) is intended to refer to those situations where State practice does not follow the letter of the law. (p 10) If this wording was intended to imply that there is something in the word operation which justifies departure from the letter of the law, it is not to my mind an accurate reflection of the passage in the UNHCR text. That passage, as I read it, is suggesting, not that the law of the country is irrelevant, but 27. 28. rather that, having regard to the purpose of the article, the term law should be interpreted broadly as encompassing other forms of quasi legal process, such as ministerial decrees and customary practice. 26. The contrast is brought out in a later passage of the UNHCR handbook dealing specifically with the Impact of appeal/review proceedings: In instances where an individual's nationality status has been the subject of review or appeal proceedings, whether by a judicial or other body, its decision must be taken into account. In States that generally respect the rule of law, the appellate/review body's decision typically would constitute the position of the State regarding the individual's nationality for the purposes of article 1(1) if under the local law its decisions are binding on the executive. Thus, where authorities have subsequently treated an individual in a manner inconsistent with a finding of nationality by a review body, this represents an instance of a national's rights not being respected rather than the individual not being a national. A different approach may be justified in countries where the executive is able to ignore the positions of judicial or other review bodies (even though these are binding as a matter of law) with impunity. This may be the case, for example, in States where a practice of discriminating against a particular group is widespread through State institutions. In such cases, the position of State authorities that such groups are not nationals would be decisive rather than the position of judicial authorities that might uphold the nationality rights of such groups. (paras 47 48, emphasis added) In the first case, where a finding of nationality in respect of an individual has been made by a competent body under the relevant law, his status under the article is not affected by the fact that the finding may be ignored by the state authorities. The position is different, as in the second case, where there is a practice of discriminating against a particular group, regardless of the strict legal position. Such a practice, it seems, should be treated as equivalent to the operation of law under the article. I do not with respect find some of the UNHCR guidance easy to reconcile with the wording of the article itself, especially when regard is had to the equivalent expressions in the French or Spanish versions. The Spanish version in particular seems to indicate, perhaps even more clearly than the English or French versions, the need for conformity with a law of some kind. Furthermore, the reference to its law seems to imply that the starting point, at least, is the relevant national law where one exists. Thus in the present case, the relevant Vietnamese law since 1998 has taken the form of a detailed framework for decisions on the acquisition and loss of nationality. Admittedly decision making power has been conferred on the executive, and is not subject to court review. But it was expressed in article 15 of the 1988 Law, not as a general discretion, but as a power relating to the granting, relinquishing, restoration, depriving and revoking of decisions, thus apparently following the pattern of the more detailed provisions in the preceding articles. It is difficult to see how a process of consideration by the state which pays no regard at all to this legal framework could be said to be by operation of its law. 29. However, Mr Tam, as I understand him, does not seek on behalf of the Secretary of State to question the authority of the UNHCR guidance, nor to rely on any possible difference of emphasis between the three official versions of the text. It is appropriate therefore to take the guidance into account in considering the facts of the present case, without necessarily expressing a concluded view on its accuracy as a legal interpretation of the article. 30. Finally under this section I should note a submission of the intervener (the Open Society Justice Initiative) relying on international jurisprudence relating to human rights. It is sufficient to refer to one of the three cases cited, a decision of the European Court of Human Rights: Kuri v Slovenia (2012) 56 EHRR 20. It concerned Yugoslav citizens resident in Slovenia at the time of independence, but who failed to acquire Slovenian citizenship and whose names were erased from the register of permanent residents, thus making them stateless. It was not in dispute that the erasure and its repercussions amounted to an interference with the private or family life of the applicants under article 8 of the Convention (para 339). It was held that the domestic legal system had failed to regulate clearly the consequences of the erasure, and that it involved an interference which was not in accordance with the law as required by article 8(2) (para 346). This decision, unsurprising in its own context, was not concerned with the definition of statelessness in the The issues 31. The issues for this court, as set out in the agreed statement, are: i) When determining whether a person is considered as a national of a State under the operation of its law (as that phrase is used in article 1(1) of the 1954 Convention): a) Whether that question is to be decided by reference to the text of the nationality legislation of the State; or b) Whether the operation of the law of that State is to be taken to include the practice of the government to make decisions which cannot be challenged effectively in the courts. ii) When considering if it would be lawful to deprive a person of his British citizenship when that deprivation would entail loss by him of citizenship of the EU, whether such consideration falls within the ambit of EU law and whether any (and if so what) consideration must be given to the question of proportionality. iii) If so, whether it would necessarily be disproportionate and therefore unlawful under EU law to deprive the appellant of his British citizenship for the sole reason that the Vietnamese government does not consider the appellant to be a Vietnamese national under the operation of Vietnamese law, in circumstances in which the appellant has no other nationality. 32. Although these issues have been agreed by counsel for both parties, there is a question whether issues (ii) and (iii), involving reference to European law, are properly within the scope of the preliminary issue as directed by SIAC: that is, whether the Secretary of States decision was made in breach of section 40(4) of the British Nationality Act 1981. Issue (i) Interpretation of the 1954 Convention 33. Mr Southey QC for the appellant criticises the reasoning of Jackson LJ as being unduly influenced by concerns regarding the rule of law, and the lack of any process for court review of the decision of the executive in Vietnam. Such concerns, he says, were directly contrary to the approach advocated by the UNHCR guidance quoted above. That indicates that operation of its law in article 1(1) refers not to the letter of the law as such, but rather to its operation in practice, even in states where ordinary principles of the rule of law are ignored. 34. In the light of the guidance now available to us, but not to the Court of Appeal, these criticisms have some validity. It is clear that, as understood by the UNHCR at least, the term law is to be interpreted broadly as including ministerial decrees or practices, even if not subject to court review, and even where they appear to depart from the substance of the domestic law. Familiar principles of the rule of law, as it would be understood in this country, are not the governing consideration. 35. As I have said, the relevance of the UNHCR guidance is not in dispute. However, even the broadest interpretation suggested by those passages does not in my view provide sufficient support for SIACs reasoning. In the first place, all the various formulations imply, to my mind, that the state in some form has adopted a position or practice, either in the individual case, or in cases of an identifiable category of which it is part. There is nothing in the evidence relied on by SIAC which goes so far. The 1988 Law was deliberately ambiguous on the issue of dual nationality, to allow the Executive to make whatever decisions it wished. It was not suggested that, as at the date of the Secretary of States decision itself, the Vietnamese government had any view about the status of the appellant; nor was there any evidence or suggestion that that government had taken any action since 22 December 2011 to deprive the appellant of Vietnamese citizenship. All that could be said was that, despite being provided with the necessary information, the Vietnamese government has not expressly accepted that the appellant is (and was on 22 December 2011) a Vietnamese citizen, and that its omission to do so was deliberate. It is true that SIACs final conclusions as to the position of the Vietnamese government (para 19) were expressed rather in more positive terms: the panel was satisfied that it does not consider him to be a Vietnamese national under the operation of its law; that was referred to as its decision, albeit arbitrary to western eyes; and it was found to be the stance of the Vietnamese government, for reasons more fully explained in the closed judgment. I would normally hesitate to depart from such a finding without seeing the closed judgment on which it is said to be at least partly based. However, as already mentioned, the Court of Appeal having read the closed judgment found nothing of significance, nor were we invited by counsel for either party to look at the closed materials. The earlier findings by SIAC, summarised above, indicate that the appellant did not automatically lose his Vietnamese citizenship on acquiring British nationality, and that no action has been taken by the Vietnamese government, before or since 22 December 2011 to deprive him of that citizenship. Nor is there any evidence that the government issued a ministerial decree, or adopted any other form of practice or position which could be treated as equivalent to law, even in the broadest sense used by the UNHCR. Rather the implication is that it has simply 36. declined, no doubt for policy reasons, to make any formal decision on the appellants status, whether under the operation of its own nationality law or at all. 37. There is a further problem with the panels reasoning. It recognised that it was directly concerned with the position as at the date of the Secretary of States decision, by which time (on its own findings) no position of any kind could be attributed to the Vietnamese government. It sought to fill that gap by substituting the settled attitude of the government on that issue once it had the necessary information. It drew an analogy with a subsequent decision of a court on such status, which would take effect retrospectively. With respect to the panel, that comparison is misplaced. A court may indeed be given the function of determining status as at a particular date in the past. But there is nothing in the Vietnamese law to suggest that such a power was given to the executive under article 15 or its successors, nor in any event that it was purporting to make such a retrospective determination in this case. In conclusion on issue (i), I would accept that the question arising under article 1(1) of the 1954 Convention in this case is not necessarily to be decided solely by reference to the text of the nationality legislation of the state in question, and that reference may also be made to the practice of the government, even if not subject to effective challenge in the courts. However, there is in my view no evidence of a decision made or practice adopted by the Vietnamese government, which treated the appellant as a non national by operation of its law, even adopting the broadest view of those words as interpreted by the UNHCR; nor in any event of one which was effective at the date of the Secretary of States decision. The appeal under this ground must accordingly be dismissed. 38. Issues (ii) and (iii) application of European law 39. These issues raise a new question as to whether the Secretary of States decision fell with the ambit of European law, given that its effect would be to deprive him not only of British citizenship, but also of citizenship of the European Union; and if so what if any consideration must be given to the proportionality of the Secretary of States action under well established principles of European law. Ability to rely on European law would also, it is said, offer significant procedural advantages identified in ZZ (France) v Secretary of State for the Home Department [2013] QB 1136, which would not be available under domestic law. 40. The appellants case on proportionality, if it arises, can be shortly stated. As Mr Southey submits, it cannot be proportionate to deprive a person of their EU citizenship, in circumstances in which no other state will recognise them as a national so that they will be denied all the benefits of any citizenship anywhere. They are denied their right to rights. Further, the proportionality principle will be violated if there are less onerous means of achieving the same aim. Where no other state will accept the appellant as a national, there is no reason to think that the objective of removing him from this country will be achieved. The risk to national security is better addressed by other powers available to the Secretary of State to manage the risk, such as under the Terrorism Prevention and Investigation Measures Act 2011. 41. We were told by Mr Southey that these issues were not raised before the Court of Appeal, because they were thought to be foreclosed by the decision of the latter court in R (G1) v Secretary of State for the Home Department [2013] QB 1008. Although Mr Tam had not objected to their inclusion in the agreed statement, he submitted that, not having been identified by SIAC as issues for the preliminary hearing, they were not strictly open for consideration by us on this appeal. Furthermore, the issue of principle should not be considered in isolation from the factual issues relevant to proportionality, including the strength of the national security case. The intervener supports the appellants case on these issues, and further submits that if we are left in any doubt on the application of EU law we should make a reference to the Court of Justice. European citizenship Rights under the treaties 42. European citizenship is a relatively new concept, dating only from the entry into force of the Maastricht treaty in 1993. Its present statutory source is article 9 of the Treaty of the European Union (TEU) (replacing article 17(1), or before amendment article 8, of the EC Treaty), which provides: Every national of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. Further provision is made by article 20 of the Treaty on the Functioning of the European Union (TFEU): 1. Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. By TFEU article 20(2) citizens of the Union shall enjoy the rights and be subject to the duties provided for in the Treaties. These rights include, inter alia, (a) the right to move and reside freely within the territory of the Member States; (b) the right to vote and to stand as candidates in elections to the European Parliament and in municipal elections in their Member State of residence, under the same conditions as nationals of that State; (c) the right to enjoy, in the territory of a third country in which the Member State of which they are nationals is not represented, the protection of the diplomatic and consular authorities of any Member State on the same conditions as the nationals of that State; (d) the right to petition the European Parliament, to apply to the European Ombudsman, and to address the institutions and advisory bodies of the Union in any of the Treaty languages and to obtain a reply in the same language. Mr Southey also draws our attention to the rights conferred on European citizens by the Charter of Fundamental Rights of the European Union. European and domestic authorities 43. The relationship of European and national citizenship was considered by the European court in R v Secretary of State for the Home Department, Ex p Kaur (Case C192 99) [2001] All ER (EC) 250. The background was that, on its accession to the treaty in 1972, and again in revised form in 1982, the United Kingdom had made declarations as to the meaning of the term national as it was to be applied to this country. In 1992, for the purposes of the then Treaty on European Union, which first introduced the concept of EU citizenship, the Conference of the Representatives of the Governments of the Member States, adopted Declaration No 2, annexed to the Final Act of the Treaty: The Conference declares that, wherever in the Treaty establishing the European Community reference is made to nationals of the Member States, the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned 44. In Kaur the applicant was a Kenyan citizen of Asian origin, who had become a citizen of the United Kingdom and Colonies under the British Nationality Act 1948, but was not within the categories recognised as having a right of residence in this country under the Immigration Act 1971 or the British Nationality Act 1981, the terms of which were in this respect reflected respectively in the 1972 and 1982 declarations. It was held by the court that article 8 of the then treaty, under which any person holding the nationality of a Member State became a citizen of the Union, had to be interpreted taking account of the declarations. 45. The court referred to its decision in Micheletti v Delegacin del Gobierro en Cantabria (Case 369/90) [1992] ECR I 4239, para 10, in which it had held that, under international law, it was for each member state, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality. Applying that principle, it was held that the 1972 declaration had been intended to clarify the scope ratione personae of the Community provisions which were the subject of the Accession Treaty and to define the United Kingdom nationals who would benefit from those provisions and, in particular, from the provisions relating to the free movement of persons. The UK declarations did not have the effect of depriving any person of rights to which that person might be entitled under community law; their consequence rather was that such rights never arose in the first place (paras 23 26). 46. This decision was distinguished in Case C 135/08 Rottmann v Freistaat Bayern [2010] ECR I 1449, [2010] QB 761, on which Mr Southey principally relies. In that case the applicant had automatically lost his original Austrian nationality when he moved to Germany and acquired nationality there by naturalisation, but he was subsequently deprived of the latter nationality because it had been obtained by deception. The question for the European court was whether the fact that the decision also deprived him of European citizenship meant that it had to be made in accordance with European principles, including that of proportionality. 47. The Advocate General recognised that, if the scope of the Treaty was not to be widened, national provisions relating to the acquisition and loss of nationality could not come within the scope of Community law solely on the ground that they may lead to the acquisition or loss of Union citizenship. However, he thought that a case would come within the scope of Community law if it involved a foreign element, that is, a cross border dimension. The present case, in his view, involved such a link with Community law because his loss of Austrian nationality arose from his exercise of rights of Union citizenship by moving to Germany (paras 10, 13). 48. The court agreed with the Advocate Generals conclusion that European law was engaged, but without so explicitly relying on the cross border element. The court reiterated the principle, established by Micheletti and other cases, that it was for each member state having due regard to Community law to lay down the conditions for the acquisition and loss of nationality (para 39); but this did not alter the fact that in situations covered by European Union law, the national rules concerned must have due regard to the latter (para 41). It continued: 42 It is clear that the situation of a citizen of the Union who, like the applicant in the main proceedings, is faced with a decision withdrawing his naturalisation, adopted by the authorities of one Member State, and placing him, after he has lost the nationality of another Member State that he originally possessed, in a position capable of causing him to lose the status conferred by article 17 EC and the rights attaching thereto falls, by reason of its nature and its consequences, within the ambit of European Union law. 43 As the Court has several times stated, citizenship of the Union is intended to be the fundamental status of nationals of the Member States 44 Article 17(2) EC attaches to that status the rights and duties laid down by the Treaty, including the right to rely on article 12 EC in all situations falling within the scope ratione materiae of Union law . 45 Thus, the Member States must, when exercising their powers in the sphere of nationality, have due regard to European Union law 46 In those circumstances, it is for the Court to rule on the questions referred by the national court which concern the conditions in which a citizen of the Union may, because he loses his nationality, lose his status of citizen of the Union and thereby be deprived of the rights attaching to that status. 48 The proviso that due regard must be had to European Union law does not compromise the principle of international law previously recognised by the Court . that the Member States have the power to lay down the conditions for the acquisition and loss of nationality, but rather enshrines the principle that, in respect of citizens of the Union, the exercise of that power, in so far as it affects the rights conferred and protected by the legal order of the Union, as is in particular the case of a decision withdrawing naturalisation such as that at issue in the main proceedings, is amenable to judicial review carried out in the light of European Union law. 49. The court distinguished the case of Kaur on the grounds that, since she had not met the definition of a national of the United Kingdom, she could not be deprived of rights which he had never enjoyed; by contrast Dr Rottmann had unquestionably held Austrian and then German nationality and has, in consequence, enjoyed that status and the rights attaching thereto. (para 49) It held that withdrawal of naturalisation on account of deception was not objectionable in principle, but that it was for the national court to consider whether the decision in the particular case observes the principle of proportionality in respect of its consequences under both European and national law (para 55): 56 Having regard to the importance which primary law attaches to the status of citizen of the Union, when examining a decision withdrawing naturalisation it is necessary, therefore, to take into account the consequences that the decision entails for the person concerned and, if relevant, for the members of his family with regard to the loss of the rights enjoyed by every citizen of the Union. In this respect it is necessary to establish, in particular, whether that loss is justified in relation to the gravity of the offence committed by that person, to the lapse of time between the naturalisation decision and the withdrawal decision and to whether it is possible for that person to recover his original nationality. 57 With regard, in particular, to that last aspect, a member state whose nationality has been acquired by deception cannot be considered bound, pursuant to article 17EC, to refrain from withdrawing naturalisation merely because the person concerned has not recovered the nationality of his member state of origin. 58 It is, nevertheless, for the national court to determine whether, before such a decision withdrawing naturalisation takes effect, having regard to all the relevant circumstances, observance of the principle of proportionality requires the person concerned to be afforded a reasonable period of time in order to try to recover the nationality of his member state of origin. 50. In R (G1) v Secretary of State the Secretary of State had made an order under section 40(2) depriving the appellant of British citizenship. He appealed to SIAC, but also brought judicial review proceedings (inter alia) alleging procedural unfairness under domestic and European Union law. Only the last point is relevant to the present appeal. As in this case, Mr Southey QC had relied on the judgment of the European court in Rottmann to justify importing procedural principles of EU law. Counsel for the Secretary of State argued that Rottmann was concerned with cross border movement, whereas the present case concerned a wholly internal situation (para 36). 51. Laws LJ (giving the leading judgment) found some difficulties with the reasoning in that case, in particular as to whether the cross border element was essential to the decision (para 37). This uncertainty betrayed a deeper difficulty which he explained as follows: 38. The distribution of national citizenship is not within the competence of the European Union. So much is acknowledged in Rottmann itself (para 39, cited by Advocate General Sharpston in her Opinion in Zambrano, para 94), as is the principle of international law . that the Member States have the power to lay down the conditions for the acquisition and loss of nationality (Rottmann para 48). Upon what principled basis, therefore, should the grant or withdrawal of State citizenship be qualified by an obligation to have due regard to the law of the European Union? It must somehow depend upon the fact that since the entry into force of the Maastricht Treaty in 1993 EU citizenship has been an incident of national citizenship, and citizenship of the Union is intended to be the fundamental status of nationals of the Member States (Rottmann para 43 and cases there cited). 39. But this is surely problematic. EU citizenship has been attached by Treaty to citizenship of the Member State. It is wholly parasitic upon the latter. I do not see how this legislative circumstance can of itself allocate the grant or withdrawal of State citizenship to the competence of the Union or subject it to the jurisdiction of the Court of Justice. Article 17(2) of the EC Treaty (Citizens of the Union shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby), referred to at para 44 of the Rottmann judgment, does not purport to have any such consequence. A generalised aspiration to the enjoyment of a fundamental status can surely carry the matter no further. In the result I am none the wiser as to the juridical basis of an obligation to have due regard to the law of the European Union in matters of national citizenship. 52. He found difficulty also in understanding the implications of the proposition (Rottmann para 48) that such decisions are amenable to judicial review carried out in the light of European Union law, in particular whether (as implied by paras 53, 55) this referred only to general principles of EU law, such as proportionality and the avoidance of arbitrary decision making, or as argued by Mr Southey included provisions of black letter EU law (para 40). He also referred to a citation from a more recent case, McCarthy v Secretary of State for the Home Department (Case C 434/09) [2011] All ER (EC) 729, para 45, that EU rules governing freedom of movement cannot be applied to situations which are confined in all relevant respects within a single Member State. 53. He concluded (with the agreement of his colleagues) that Rottmann could not be read as importing any part of Mr Southey's panoply of black letter EU law into the process of the appellant's appeal under section 40A, so that the effectiveness of the appellants remedies must be judged by reference to the standards of the common law (para 42). 54. Finally he raised an issue of competence under the EU treaty: The conditions on which national citizenship is conferred, withheld or revoked are integral to the identity of the nation State. They touch the constitution; for they identify the constitution's participants. If it appeared that the Court of Justice had sought to be the judge of any procedural conditions governing such matters, so that its ruling was to apply in a case with no cross border element, then in my judgment a question would arise whether the European Communities Act 1972 or any successor statute had conferred any authority on the Court of Justice to exercise such a jurisdiction. We have not heard argument as to the construction of the Acts of Parliament which have given the Court of Justice powers to modify the laws of the United Kingdom. Plainly we should not begin to enter upon such a question without doing so. That in my judgment is the course we should have to adopt if we considered that the Court of Justice, in Rottmann or elsewhere, had held that the law of the European Union obtrudes in any way upon our national law relating to the deprivation of citizenship in circumstances such as those of the present case. (para 43) I have quoted from the judgment at some length because it raises issues of general importance and some difficulty, which in agreement with Laws LJ I do not think are satisfactorily resolved by the judgment in Rottmann itself. Mr Southey relies also on more recent decisions of the European court (Zambrano v Office National de lemploi (Case C 34/09) [2011] ECR I 1177, Dereci v Bundesministerium fr Inneres (Case C 256/11) [2011] ECR I 11315) for the general proposition (citing Rottmann) that TFEU article 20 precludes national measures which have the effect of depriving citizens of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the European Union. This formulation, as he says, is not expressly limited to cross border rights. However, as Mr Eicke notes, the scope of Zambrano remains a matter of controversy in domestic case law (see, for example, Harrison v Home Secretary [2012] EWCA Civ 1736). It is sufficient for present purposes to say that none of the more recent European authorities provides clear answers to the questions raised by Laws LJ in G1. 55. Discussion 56. Issues (ii) and (iii) raise a number of difficult issues, which may require detailed consideration either in this court or in Europe. However, the prior question is whether the European law aspects are properly before us at all for decision. In my view they are not. The scope of the present appeal is limited by reference to the preliminary issue defined by SIAC by its order of 1 February 2012, which was confined to the narrow question of statelessness under section 40 of the 1981 Act, and made no mention of issues of European law. It is noteworthy that the grounds of appeal (dated 13 January 2012) raised questions of proportionality under the Convention on Human Rights, but made no mention of EU law. That omission cannot be ascribed to the decision of the Court of Appeal in G1 which came some months later (4 July 2012). Even at that stage, although SIAC may have been bound by the Court of Appeal decision as a matter of domestic law, that would not necessarily have precluded a request to it to make a reference itself to the European court to determine the application of European law if it thought it material to the resolution of the case (see R v Plymouth Justices, Ex p Rogers [1982] QB 863, 869 871). It seems clear that the issue of EU law would raise difficult issues, even before reaching the question of a reference to the European court. I see considerable force in the criticisms made by Laws LJ of some of the reasoning in Rottmann. In particular he raises the more fundamental issue of competence (para 54 above): that is, in his words, whether the European Communities Act 1972 or any successor statute had conferred any authority on the Court of Justice to exercise such a jurisdiction. In the light of his judgment, this is an issue which would need to be considered, in the Court of Appeal or this court, before it would become appropriate to consider a reference to the European court. 59. However, before that stage is reached, in my view, it is important that SIAC, as the tribunal of fact, should first identify the respects, if any, in which a decision on these legal issues might become necessary for disposal of the present case. Mr Southey relies in general terms on the EU requirement of proportionality, but he has not shown how (whatever its precise scope in EU law) it would differ in practice in the present case from the issue of proportionality already before SIAC under the European Convention, or indeed from principles applicable under domestic law. 57. 58. 60. In Kennedy v Charity Commission [2014] UKSC 20, [2014] 2 WLR 808, a majority of this court endorsed a flexible approach to principles of judicial review, particularly where important rights are at stake (see especially per Lord Mance, at paras 51 55). As Lord Mance said (para 51): The common law no longer insists on the uniform application of the rigid test of irrationality once thought applicable under the so called Wednesbury principle. The nature of judicial review in every case depends on the context. The judgment also endorsed (para 54) Professor Paul Craigs conclusion (in The Nature of Reasonableness (2013) 66 CLP 131) that both reasonableness review and proportionality involve considerations of weight and balance, with the intensity of the scrutiny and the weight to be given to any primary decision makers view depending on the context. Those considerations apply with even greater force in my view in a case such as the present where the issue concerns the removal of a status as fundamental, in domestic, European and international law, as that of citizenship. 61. Mr Southey has suggested that the appellant might be able to take advantage of procedural safeguards available under EU law. It is true that in ZZ (France) v Secretary of State [2013] QB 1136 the European court lay down strict rules for limiting disclosure on grounds of national security. However, it is impossible for this court to judge in the abstract what practical effect that might have in this case, as compared to disclosure available under domestic or Convention law. That is best considered by SIAC, with access to all relevant material open and closed. 62. For these reasons, I would decline to answer the questions raised by issues (ii) and (iii). If an issue of proportionality under EU law is properly raised before SIAC by amendment of the present grounds of appeal, it would in my view be appropriate and helpful for SIAC to reach a view on its merits, even if only on a hypothetical basis. That would ensure that any future consideration by the higher courts will be informed by a clear understanding of the practical differences if any (substantive or procedural) from the remedies otherwise available. Conclusion 63. For these reasons I would dismiss the appeal and confirm the order of the Court of Appeal remitting the case to SIAC. LORD MANCE: (with whom Lord Neuberger, Lady Hale and Lord Wilson agree) Article 1(1) of the 1954 Convention 64. Under the British Nationality Act 1981 the Secretary of State may by order deprive a person of a citizenship status if satisfied that deprivation is conducive to the public good (section 40(2)), but may not make [such] an order if satisfied that the order would make a person stateless (section 40(4)). It is common ground that statelessness under section 40(4) must be equated with the concept as used in the Convention on the Status of Stateless Persons 1954, which binds the United Kingdom at the international level. The Secretary of State made an order purporting to deprive the appellant of his British citizenship under section 40(2) on 22 December 2011. The first question on this appeal is therefore whether on that date the appellant was, in the terms of article 1(1) of the 1954 Convention, a person who is not considered as a national by the state of Vietnam under the operation of its law or, to take the equally authentic French and Spanish versions par application de sa lgislation and conforme a su legislacon. 65. As Lord Carnwath points out (paras 22 29), the terms in which the UNHCR and the Secretary of State have given guidance about the meaning of these provisions do not fit easily with any of the authentic versions. Customary practice in the interpretation and application of the law may in some circumstances shape the content of the law itself. The guidance appears to go further, and to contemplate situations in which a state acts contrary to any conceivably legitimate interpretation of the law. 66. However, it is, as Lord Carnwath indicates (para 29), unnecessary on this appeal to express any concluded view on whether or how far practice may supersede law in relation to the concept of statelessness under article 1(1). The position under the terms of the relevant Vietnamese Nationality Law of 2008 is, I agree, clear: the appellant had Vietnamese nationality as at 22 December 2011. All that happened is that the Vietnamese Government has, when subsequently informed by the British Government of its intention to deport the appellant, declined to accept that he was or is a Vietnamese national. 67. Even if it could be said to have been the practice of the Council of Ministers to treat article 15 of the 2008 Law as enabling it, whenever it wishes, to override or ignore the four categories of situation in which that Law provides for loss of Vietnamese citizenship, that does not establish any practice covering individuals in the appellants position. SIAC was also wrong to consider that the Vietnamese Governments subsequent attitude could in some way feed back in time, to determine whether the appellant had Vietnamese citizenship on 22 December 2011. European citizenship 68. The appellant submits that we should address the significance of his citizenship of the European Union, which he will on the face of it lose if the Secretary of States order depriving him of British citizenship is valid. Article 20(1) TFEU provides that Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. The natural corollary is that loss of British citizenship entails loss of Union citizenship. 69. The appellant was effectively precluded below from relying on his Union citizenship, by reason of the Court of Appeals decision in R (G1) v Secretary of State for the Home Department [2013] QB 1008. The appellant submits that this decision was wrong; that the Secretary of States decision to (in effect) remove his Union citizenship falls within the scope of Union law; and that Union law imposes a pre condition of proportionality. He also submits that Union law offers another potentially relevant procedural benefit, indicated by the Court of Justices decision in (Case C 300/11) ZZ (France) v Secretary of State for the Home Department [2013] QB 1136. In that case, the Court of Justice held that, notwithstanding the special advocate procedure, the Secretary of State, when she proposes to exclude a person from the United Kingdom on grounds of national security, must communicate to that person the essence of those grounds in a manner which takes due account of the necessary confidentiality of the evidence (para 69). The appellant argues that the same principle must govern the more severe sanction of withdrawal of citizenship. He submits, finally, that, if the Supreme Court is not prepared to accept his case on these points, it should and must at least make a reference to the Court of Justice for them to be clarified. 70. The Secretary of State takes issue with these submissions. She contends that Union citizenship depends on national citizenship, in the acquisition or loss of which the Union has no role. Further, she contends that, even when considering rights derived from Union citizenship, there must be some cross border element before Union law is engaged or gives rise to any such rights. In this latter respect, she points to the conclusion reached by this Court in R (Chester) v Secretary of State for Justice [2013] UKSC 63, [2014] 1 AC 271, para 59, that the core rights listed in article 20(2) TFEU (set out in para 84 below) all have a supra national element. 71. For reasons which will appear, I consider that it is unnecessary and inappropriate at least at this stage to resolve the disagreement between the parties about Union law, or to consider making any reference to the Court of Justice relating to it. The right course is to remit the matter to SIAC, with an indication that it should address the issues in the case on alternative hypotheses, one that the Court of Appeals decision in R (G1) v Secretary of State is correct, the other that it is incorrect. 72. My reasoning is as follows. The appellants case on Union law rests on two premises: the first is that Union law applies in some relevant respect to a decision by the Secretary of State to remove the appellants British citizenship and, second, assuming that it does, that it offers advantages over the relevant domestic law which could make the difference between upholding and setting aside the Secretary of States decision. 73. As to the first premise, the appellants case rests upon decisions by the Court of Justice indicating that, even though a case may not involve any cross border element, a decision may be contrary to Union law, if it would have the effect of depriving the relevant individual of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the Union: (Case C 34/09) Ruiz Zambrano v Office national demploi, para 42 and (Case C 434/09) McCarthy v Secretary of State for the Home Department [2011] ECR I 3375, para 47. This was explained in Case C 256/11 Dereci v Bundesministerium fr Inneres [2011] ECR I 11315, para 66 as referring to situations in which the Union citizen has, in fact, to leave not only the territory of the Member State of which he is a national, but also the territory of the Union as a whole. 74. None of these cases was concerned with withdrawal of Union citizenship, as opposed to the rights attaching to such citizenship while it subsists. However, (Case C 135/08) Rottmann v Freistaat Bayern [2010] QB 761, decided a year before any of them, was concerned with a situation in which withdrawal of newly acquired German citizenship would lead to loss of Union citizenship, because Dr Rottmanns previously held Austrian citizenship would not automatically revive. In Rottmann the court said that citizenship of the Union is intended to be the fundamental status of nationals of the Member States (para 43); it held that a Member State can withdraw national citizenship even though the effect was to withdraw Union citizenship, but that the decision to withdraw must have due regard to European Union law (para 45) and that any such withdrawal is conditional upon observance of the principle of proportionality (paras 55 and 59). The appellant relies on this as a general statement, establishing that withdrawal of national citizenship, at least because or if it would oblige him to leave the territory of the Union as a whole, is permissible only if and so far as would be compatible with principles of Union law, particularly proportionality and the procedural rule mentioned in para 69 above. In R (G1) Laws LJ, in reasons with which the whole court agreed, questioned the Court of Justices interpretation of the Treaties and left open its competence to restrict Member States control over those possessing their nationality in this way. He said (para 43): 75. The conditions on which national citizenship is conferred, withheld or revoked are integral to the identity of the nation State. They touch the constitution; for they identify the constitution's participants. If it appeared that the Court of Justice had sought to be the judge of any procedural conditions governing such matters, so that its ruling was to apply in a case with no cross border element, then in my judgment a question would arise whether the European Communities Act 1972 or any successor statute had conferred any authority on the Court of Justice to exercise such a jurisdiction. We have not heard argument as to the construction of the Acts of Parliament which have given the court powers to modify the laws of the United Kingdom. Plainly we should not begin to enter upon such a question without doing so. That in my judgment is the course we should have to adopt if we considered that the Court of Justice, in the Rottmann case or elsewhere, had held that the law of the European Union obtrudes in any way upon our national law relating to the deprivation of citizenship in circumstances such as those of the present case. 76. Laws LJs remarks in R (G1) recognise, correctly, that the question he raised is for a United Kingdom court, ultimately one of construction of a domestic statute, the European Communities Act 1972. That follows from the constitutional fact that the United Kingdom Parliament is the supreme legislative authority within the United Kingdom. European law is part of United Kingdom law only to the extent that Parliament has legislated that it should be. 77. When construing a domestic statute, United Kingdom courts apply a strong presumption that Parliament intends legislation enacted to implement this countrys European Treaty obligations to be read consistently with those obligations: see eg Assange v Swedish Prosecution Authority [2012] UKSC 22, [2012] 2 AC 471. But it is not axiomatic that consistency is either always achievable or what Parliament intended or did achieve. 78. Advocate General Cruz Villalns recent Opinion in (Case C 62/14) Gauweiler v Deutscher Bundestag, 14 January 2015, paras 30 69 suggests that i) European law does not leave it open to any national court to adopt a criterion or benchmark for assessing the vires of a European act (which, presumably, would include a Court of Justice decision) different from that of the Court of Justice (para 53); ii) any reservation of identity, independently formed and interpreted by the competent often judicial bodies of the Member States would very probably leave the EU legal order in a subordinate position, at least in qualitative terms (para 60). 79. That looks at the matter from one angle. However, Advocate General Villaln added (para 61) that: a clearly understood, open, attitude to EU law should in the medium and long term give rise, as a principle, to basic convergence between the constitutional identity of the Union and that of each of the Member States. This recognises, perhaps, that Europe has not yet reached a situation where it is axiomatic that there is constitutional identity between the Union and its Members. 80. For a domestic court, the starting point is, in any event, to identify the ultimate legislative authority in its jurisdiction according to the relevant rule of recognition. The search is simple in a country like the United Kingdom with an explicitly dualist approach to obligations undertaken at a supranational level. European law is certainly special and represents a remarkable development in the worlds legal history. But, unless and until the rule of recognition by which we shape our decisions is altered, we must view the United Kingdom as independent, Parliament as sovereign and European law as part of domestic law because Parliament has so willed. The question how far Parliament has so willed is thus determined by construing the 1972 Act. 81. Sections 2(1) and 3(1) of the 1972 Act read: 2(1) All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression enforceable EU right and similar expressions shall be read as referring to one to which this subsection applies. 3(1) For the purposes of all legal proceedings any question as to the meaning or effect of any of the Treaties, or as to the validity, meaning or effect of any EU instrument, shall be treated as a question of law (and, if not referred to the European Court, be for determination as such in accordance with the principles laid down by and any relevant decision of the European Court). 82. The breadth of sections 2(1) and 3(1) of the 1972 Act is notable. On one reading, they leave the scope of the Treaty within the sole jurisdiction of the Court of Justice as a question as to its meaning or effect. Nevertheless, this court in R (HS2 Action Alliance Ltd) v Secretary of State for Transport [2014] UKSC 3, [2014] 1 WLR 324, paras 207 208 recognised the potential which exists for jurisdictional limits on the extent to which these sections confer competence on the Court of Justice over fundamental features of the British constitution. Questions as to the meaning and effect of Treaty provisions are in principle capable of being distinguished from questions going to the jurisdiction conferred on the European Union and its court under the Treaties: compare in a domestic context, the decision in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. The principle that the orders of a superior court of record are valid until set aside is not necessarily transposable to an issue of construction concerning the scope of sections 2(1) and 3(1) of the 1972 Act or the Treaty provisions and conferral competence referred to in those provisions. 83. The Treaty on European Union enshrines the principle of conferral at its outset in articles 4 and 5: Article 4 1. In accordance with article 5, competences not conferred upon the Union in the Treaties remain with the Member States. 2. The Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self government. It shall respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State. Article 5 1. The limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportionality. 2. Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States. 84. In the present context, it is clearly very arguable that there are under the Treaties jurisdictional limits to European Union competence in relation to the grant or withdrawal by a Member State of national citizenship. Fundamental though its effects are where it exists, citizenship of the Union is under the Treaties a dependant or derivative concept it depends on or derives from national citizenship. That is clear from article 9 TEU and article 20 TFEU, providing: Article 9 In all its activities, the Union shall observe the principle of the equality of its citizens, who shall receive equal attention from its institutions, bodies, offices and agencies. Every national of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. Article 20 1. Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. 2. Citizens of the Union shall enjoy the rights and be subject to the duties provided for in the Treaties. They shall have, inter alia: (a) the right to move and reside freely within the territory of the Member States; (b) the right to vote and to stand as candidates in elections to the European Parliament and in municipal elections in their Member State of residence, under the same conditions as nationals of that State; (c) the right to enjoy, in the territory of a third country in which the Member State of which they are nationals is not represented, the protection of the diplomatic and consular authorities of any Member State on the same conditions as the nationals of that State; (d) the right to petition the European Parliament, to apply to the European Ombudsman, and to address the institutions and advisory bodies of the Union in any of the Treaty languages and to obtain a reply in the same language. These rights shall be exercised in accordance with the conditions and limits defined by the Treaties and by the measures adopted thereunder. 85. There is nothing on the face of the Treaties to confer on the EU, or on a Union institution such as the Court of Justice, any power over the grant or withdrawal by a Member State of national citizenship, even though such grant or withdrawal has under the Treaties automatic significance in terms of European citizenship. If further confirmation were necessary of the exclusive role of Member States in relation to such a grant or withdrawal, it is amply present in governmental declarations and a Council decision associated with the history and making of the Treaties. The relevance of such declarations and decision as an aid to construction of the Treaties was recently confirmed by the Court of Justice in its Opinion 2/13 dated 18 December 2014 on the draft agreement on the accession of the EU to the European Convention on Human Rights. 86. When the original Treaty on European Union was adopted and first introduced the concept of Union citizenship in 1992, the Conference of the Representatives of the Governments of Member States agreed by Declaration No 2 annexed to the Final Act (quoted by Lord Carnwath in para 43 above) that: wherever in the Treaty establishing the European Community reference is made to nationals of the Member States, the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned. 87. This was reinforced also in 1992 by Council Decision concerning certain problems raised by Denmark on the Treaty of European Union (OJ 1992 C348, p 1). The Decision stated that: Citizenship The provisions of Part Two of the Treaty establishing the European Community relating to citizenship of the Union give nationals of the Member States additional rights and protection as specified in that Part. They do not in any way take the place of national citizenship. The question whether an individual possesses the nationality of a Member State will be settled solely by reference to the national law of the Member State concerned. Although the provisions of this Decision were stated to be arrangements which apply exclusively to Denmark and not to other existing or acceding Member States, it is difficult to regard a categorical statement about the interpretation of the Treaty as a mere arrangement or as irrelevant as an additional aid, if necessary, to understanding the limits of the competence conferred on the Community, or now Union. In any event, the position was again confirmed by United Kingdom Declaration No 63 annexed to the Final Act adopting the Treaty of Lisbon, which shaped the present Treaties. This stated that: 88. 63. Declaration by the United Kingdom of Great Britain and Northern Ireland on the definition of the term nationals In respect of the Treaties and the Treaty establishing the European Atomic Energy Community, and in any of the acts deriving from those Treaties or continued in force by those Treaties, the United Kingdom reiterates the Declaration it made on 31 December 1982 on the definition of the term nationals with the exception that the reference to British Dependent Territories Citizens shall be read as meaning British overseas territories citizens. 89. The 1982 Declaration provided that the terms nationals, nationals of Member States or nationals of Member States and overseas countries and territories wherever used in the then European Treaties were to be understood as references to British citizens, British subjects by virtue of the British Nationality Act 1981 with a right of abode in the United Kingdom and citizens of British Dependant Territories whose citizenship was acquired from a connection with Gibraltar. 90. A domestic court faces a particular dilemma if, in the face of the clear language of a Treaty and of associated declarations and decisions, such as those mentioned in paras 86 89, the Court of Justice reaches a decision which oversteps jurisdictional limits which Member States have clearly set at the European Treaty level and which are reflected domestically in their constitutional arrangements. But, unless the Court of Justice has had conferred upon it under domestic law unlimited as well as unappealable power to determine and expand the scope of European law, irrespective of what the Member States clearly agreed, a domestic court must ultimately decide for itself what is consistent with its own domestic constitutional arrangements, including in the case of the 1972 Act what jurisdictional limits exist under the European Treaties and upon the competence conferred on European institutions including the Court of Justice. It will be a very rare case indeed where any problem arises in this connection, and the recipe for avoiding any problem is that all concerned should act with mutual respect and with caution in areas where Member States constitutional identity is or may be engaged particularly so where, as in the present context, great care has been taken to emphasise this by declarations accompanying the relevant Treaty commitments. That reflects the spirit of co operation of which both the Bundesverfassungsgericht and this court have previously spoken. In the light of all these considerations the question posed by Laws LJ may well, at some future date, have to be considered and answered, in order to determine whether the first premise of the appellants case is correct. But I am satisfied that this is not the occasion to attempt any such task, unless and until the second premise is established and involves a conclusion that Union law not only offers advantages over the relevant domestic law governing removal of the appellants citizenship, but offers advantages which are or at least may be critical to the success of the appellants case. 92. 91. Proportionality and procedural benefit under Union law 93. I turn to the second premise that Union law offers potentially decisive advantages over domestic law, if and so far as it requires that (a) any withdrawal of citizenship having the effect of removing European citizenship and requiring the person affected to leave the Union should be measured against a yardstick of proportionality, and that (b) such withdrawal would also only be permissible in the case of removal of citizenship on grounds of national security if the person affected had been informed of and was able to address the essence of those grounds in a manner which takes due account of the necessary confidentiality of the evidence. 94. In a judgment in Kennedy v Charity Commission [2014] UKSC 20, [2014] 2 WLR 808, paras 55 56, with which Lord Neuberger and Lord Clarke agreed, and with the reasoning in which I understand Lord Toulson also to have agreed (para 150), I concluded that there would be no real difference in the context of that case between the nature and outcome of the scrutiny required under common law and under article 10 of the Convention on Human Rights, if applicable. The judgment noted (para 51) that: The common law no longer insists on the uniform application of the rigid test of irrationality once thought applicable under the so called Wednesbury principle. The nature of judicial review in every case depends on the context. 95. The judgment also endorsed (in para 54) Professor Paul Craigs conclusion (in The Nature of Reasonableness (2013) 66 CLP 131) that both reasonableness review and proportionality involve considerations of weight and balance, with the intensity of the scrutiny and the weight to be given to any primary decision makers view depending on the context and continued: The advantage of the terminology of proportionality is that it introduces an element of structure into the exercise, by directing attention to factors such as suitability or appropriateness, necessity and the balance or imbalance of benefits and disadvantages. There seems no reason why such factors should not be relevant in judicial review even outside the scope of Convention and EU law. Whatever the context, the court deploying them must be aware that they overlap potentially and that the intensity with which they are applied is heavily dependent on the context. In the context of fundamental rights, it is a truism that the scrutiny is likely to be more intense than where other interests are involved. 96. In short, proportionality is as Professor Dr Lbbe Wolff (former judge of the Bundesverfassungsgericht which originated the terms modern use) put it in The Principle of Proportionality in the case law of the German Federal Constitutional Court (2014) 34 HRLJ 12, 16 17 a tool directing attention to different aspects of what is implied in any rational assessment of the reasonableness of a restriction, just a rationalising heuristic tool. She went on: Whether it is used as a tool to intensify judicial control of the state acts is not determined by the structure of the test but by the degree of judicial restraint practised in applying it. Whether under EU, Convention or common law, context will determine the appropriate intensity of review: see also Kennedy, para 54. 97. The present appeal concerns a status which is as fundamental at common law as it is in European and international law, that is the status of citizenship. Blackstone (Commentaries on the Laws of England Book I, p 137) states the position as follows: A natural and regular consequence of this personal liberty is, that every Englishman may claim a right to abide in his own country so long as he pleases; and not to be driven from it unless by the sentence of the law. The king indeed, by his royal prerogative, may issue out his writ ne exeat regnum, and prohibit any of his subjects from going into foreign parts without licence. But no power on earth, except the authority of parliament, can send any subject of England out of the land against his will; no, not even a criminal. For exile, and transportation, are punishments at present unknown to the common law; The last two sentences of this passage were cited and approved by Lord Hoffmann in R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61; [2009] AC 453, paras 43 44. In the same case, para 70, Lord Bingham identified the relevant principles by the following quotations, in terms with which the Secretary of State did not quarrel: Sir William Holdsworth, A History of English Law (1938), vol X, p 393, states: The Crown has never had a prerogative power to prevent its subjects from entering the kingdom, or to expel them from it. Laws LJ, in para 39 of his Bancoult (No 1) judgment which the Secretary of State accepted, cited further authority: For my part I would certainly accept that a British subject enjoys a constitutional right to reside in or return to that part of the Queen's dominions of which he is a citizen. Sir William Blackstone says in Commentaries on the Laws of England ,15th ed (1809), vol 1, p 137: 'But no power on earth, except the authority of Parliament, can send any subject of England out of the land against his will; no, not even a criminal.' Compare Chitty, A Treatise on the law of the Prerogatives of the Crown and the Relative Duties and Rights of the Subject (1820), pp 18, 21. Plender, International Migration Law, 2nd ed (1988), ch 4, p 133 states: 'The principle that every state must admit its own nationals to its territory is accepted so widely that its existence as a rule of law is virtually beyond dispute ' and cites authority of the European Court of Justice in Van Duyn v Home Office (Case 41/74) [1975] Ch 358, 378 379 in which the court held that 'it is a principle of international law that a state is precluded from refusing its own nationals the right of entry or residence'. Dr Plender further observes, International Migration Law, p 135: 'A significant number of modern national constitutions characterise the right to enter one's own country as a fundamental or human right', and a long list is given. The same authorities were recently cited and applied by this court in Pomiechowski v District Court of Legnica, Poland [2012] UKSC 20, [2012] 1 WLR 1604. 98. Removal of British citizenship under the power provided by section 40(2) of the British Nationality Act 1981 is, on any view, a radical step, particularly if the person affected has little real attachment to the country of any other nationality that he possesses and is unlikely to be able to return there. A correspondingly strict standard of judicial review must apply to any exercise of the power contained in section 40(2), and the tool of proportionality is one which would, in my view and for the reasons explained in Kennedy v Charity Commission, be both available and valuable for the purposes of such a review. If and so far as a withdrawal of nationality by the United Kingdom would at the same time mean loss of European citizenship, that is an additional detriment which a United Kingdom court could also take into account, when considering whether the withdrawal was under United Kingdom law proportionate. It is therefore improbable that the nature, strictness or outcome of such a review would differ according to whether it was conducted under domestic principles or whether it was also required to be conducted by reference to a principle of proportionality derived from Union law. On these points, I agree with what Lord Carnwath says in paras 59 60 of his judgment, as well as with what Lord Sumption says in paras 108 109 of his judgment. 99. As to the appellants case that Union law would or might entitle him to particulars of the essence of the case against him which he would not be able to obtain at common law, that raises both the question whether domestic law would also entitle him to whatever measure of protection Union law might entitle him and a potential question, if any difference exists, whether it could have any practical significance in this case. These questions should, at least in the first instance, only be addressed, if they arise, in the course of full consideration of the facts and issues by SIAC. Again, I agree with what Lord Carnwath says in para 61 of his judgment. 100. For these reasons, I too would dismiss the appeal and confirm the Court of Appeals order remitting the case to SIAC. LORD SUMPTION: (with whom Lord Neuberger, Lady Hale and Lord Wilson agree) 101. I agree that this appeal should be dismissed. I am not convinced that practice can stand for law in article 1(1) of the 1954 Convention, nor that any relevant practice was proved in this case. But I think that the answer to this appeal is simpler than that. Under section 40(4) of the British Nationality Act the Home Secretary was precluded from withdrawing Mr Phams British nationality only if he would thereby have been rendered stateless. That depends on whether he had Vietnamese nationality on 22 December 2011 when his British nationality was withdrawn. Since Mr Pham unquestionably had Vietnamese citizenship at the time of his birth in Vietnam, he must still have had it on 22 December 2011 unless something had happened to take it away. The government of Vietnam was entitled to withdraw his nationality, but no one suggests that they had done so, at any rate by the relevant date. In those circumstances, Mr Phams case on appeal depends upon the proposition that the statements of Vietnamese officials to British diplomats after 22 December 2011 (when the British government was hoping to deport him to Vietnam) were tantamount to a legally definitive declaration about his status on that date, with substantially the same effect as if it had been a declaration pronounced by a court of law. There is, however, a world of difference between saying that no court of law was in a position to control the Vietnamese governments statements or acts, and saying that the Vietnamese government was a court of law or was like one. There is some evidence for the former proposition but not for the latter. The statements did not purport to do anything other than state the Vietnamese governments position. They amounted to a refusal to treat Mr Pham as a Vietnamese citizen. Even if one were to assume that these statements conclusively determined Mr Phams nationality at the time that they were made, there is no basis on which they could relate back to an earlier date when the Vietnamese government knew nothing about Mr Pham and had no position one way or the other about his status. The judge may well have been right to say that they are good evidence of what the Vietnamese governments position would have been on 22 December 2011 if they had been asked on that date. But if they were not a court of law or like a court of law, and it is clear that they were not, that is irrelevant. It follows that if anyone has rendered Mr Pham stateless, it is not the Home Secretary on 22 December 2011 but the Vietnamese government thereafter. 102. I also agree that having determined that the Home Secretarys decision did not render Mr Pham stateless, this court should not deal with the remaining issues, but should remit them to SIAC. Not only are those issues no part of the preliminary issue which SIAC directed, but they are unsuitable for determination by this court in the absence of any of the relevant findings of fact and without the judgment of either court below. 103. I add a judgment of my own in order to address a point which was raised with counsel in the course of the hearing but not developed in argument, and which appears to me to be of some importance. One of the questions to be remitted to SIAC is the impact (if any) of EU law on the remaining issues raised by Mr Phams application. The main reason why this is said to matter is that if the withdrawal of Mr Phams British nationality was within the ambit of EU law it will be necessary to apply to the decision the principle of proportionality. This assumes that the principle of proportionality as it applies in EU law is liable to produce a different result in a case like this by comparison with ordinary principles of English public law. I question whether this is necessarily correct. 104. In Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, at p 410, Lord Diplock envisaged the possibility that English law might adopt proportionality from continental systems of public law as an additional ground of review. In fact, the courts have applied a proportionality test to acts of public authorities said to contravene principles of European Union law and or to interfere with rights protected by the European Convention on Human Rights, both of which incorporate proportionality as an integral part of their test for legal justification. But they have not adopted proportionality generally as a principle of English public law. With the progressive enlargement of the range of issues which are affected by EU law or the Convention (or, increasingly, by both), this has produced some rather arbitrary distinctions between essentially similar issues, depending on the source of law which is invoked as a ground of challenge. The present case is a particularly striking illustration of this problem. If a person could be deprived of European citizenship as such, a test of proportionality would in principle have to be applied. On the other hand, if the matter turns wholly on domestic law and only the three traditional grounds of review recognised in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 are applied, then no test of proportionality would be applied. In fact, European citizenship is acquired or lost as the incidental consequence of acquiring or losing British citizenship. The Home Secretarys decision therefore affects Mr Phams status in both respects. It is hardly satisfactory to apply a proportionality test to the decision so far as it affects his European citizenship but not so far as it affects his British nationality when the decision is a single indivisible act. An alternative approach would be to regard European citizenship as a mere attribute of national citizenship. That would be consistent with the fact that it is wholly parasitic on national citizenship. But it is not consistent with some of the wider dicta of the Court of Justice of the European Union treating European citizenship as fundamental. 105. However, although English law has not adopted the principle of proportionality generally, it has for many years stumbled towards a concept which is in significant respects similar, and over the last three decades has been influenced by European jurisprudence even in areas of law lying beyond the domains of EU and international human rights law. Starting with the decision of the House of Lords in Bugdaycay v Secretary of State for the Home Department [1987] AC 514 it has recognised the need, even in the context of rights arising wholly from domestic law, to differentiate between rights of greater or lesser importance and interference with them of greater or lesser degree. This is essentially the same problem as the one to which proportionality analysis is directed. The solution adopted, albeit sometimes without acknowledgment, was to expand the scope of rationality review so as to incorporate at common law significant elements of the principle of proportionality. 106. This approach was originally adopted in dealing with rights protected by the Convention, at a time when it did not have the force of law and the courts were unwilling to apply any presumption that domestic legislation was intended to be construed consistently with it. Many of these rights had been recognised at common law for many years, in some cases since the famous opening chapter of Blackstones Commentaries (The Rights of Persons). In Bugdaycay, the House of Lords recognised that a more exacting standard of review was required when the decision of a public authority interfered with a fundamental right. That case concerned the right to life, which is perhaps the most fundamental of all rights. But I doubt whether it is either possible or desirable to distinguish categorically between ordinary and fundamental rights, applying different principles to the latter. There is in reality a sliding scale, in which the cogency of the justification required for interfering with a right will be proportionate to its perceived importance and the extent of the interference. As Lord Bridge of Harwich observed in R v Secretary of State for the Home Department, Ex p Brind [1991] 1 AC 696, at pp 748 749, the courts are perfectly entitled to start from the premise that any restriction of the right to freedom of expression requires to be justified and that nothing less than an important competing public interest will be sufficient to justify it. In R v Ministry of Defence, Ex p Smith [1996] QB 517, the Court of Appeal adopted the following statement of principle from the argument of counsel (Mr David Pannick QC) at p 554: The court may not interfere with the exercise of an administrative discretion on substantive grounds save where the court is satisfied that the decision is unreasonable in the sense that it is beyond the range of responses open to a reasonable decision maker. But in judging whether the decision maker has exceeded this margin of appreciation the human rights context is important. The more substantial the interference with human rights, the more the court will require by way of justification before it is satisfied that the decision is reasonable in the sense outlined above. This is in substance a proportionality test, but with the important difference that the court declined to judge for itself whether the decision was proportionate, instead asking itself whether a rational minister could think that it was. This is why when the case came before the European Court of Human Rights (Smith and Grady v United Kingdom (1999) 29 EHRR 493, at para 138) it was held that the test applied by the English courts was not sufficient to protect human rights. 107. The differences between proportionality at common law and the principle applied under the Convention were considered by Lord Steyn in R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532, at paras 27 28. In a passage with which the rest of the House of Lords associated itself, he identified three main differences: (i) a proportionality test may require the court to form its own view of the balance which the decision maker has struck, not just decide whether it is within the range of rational balances that might be struck; (ii) the proportionality test may require attention to be directed to the relative weight accorded to competing interests and considerations; and (iii) even heightened scrutiny at common law is not necessarily enough to protect human rights. The first two distinctions are really making the same point in different ways: balance is a matter for the decision maker, short of the extreme cases posited in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. But it may be questioned whether it is as simple as this. It is for the court to assess how broad the range of rational decisions is in the circumstances of any given case. That must necessarily depend on the significance of the right interfered with, the degree of interference involved, and notably the extent to which, even on a statutory appeal, the court is competent to reassess the balance which the decision maker was called on to make given the subject matter. The differences pointed out by Lord Steyn may in practice be more or less significant depending on the answers to these questions. In some cases, the range of rational decisions is so narrow as to determine the outcome. 108. Although the full facts have not yet been found, it seems likely that the outcome of this case will ultimately depend on the approach which the court takes to the balance drawn by the Home Secretary between Mr Phams right to British nationality and the threat which he presented to the security of the United Kingdom. A persons right in domestic law to British nationality is manifestly at the weightiest end of the sliding scale, especially in a case where his only alternative nationality (Vietnamese) is one with which he has little historical connection and seems unlikely to be of any practical value even if it exists in point of law. Equally, the security of this country against terrorist attack is on any view a countervailing public interest which is potentially at the weightiest end of the scale, depending on how much of a threat Mr Pham really represents and what (if anything) can effectually be done about it even on the footing that he ceases to be a British national. The suggestion that at common law the court cannot itself assess the appropriateness of the balance drawn by the Home Secretary between his right to British nationality and the relevant public interests engaged, is in my opinion mistaken. In doing so, the court must of course have regard to the fact that the Home Secretary is the statutory decision maker, and to the executives special institutional competence in the area of national security. But it would have to do that even when applying a classic proportionality test such as is required in cases arising under the Convention or EU law, a point which I sought to make in R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2014] 3 WLR 1404, at paras 31 34. 109. Thus in Daly itself the Appellate Committee accepted that legal professional privilege in respect of documents in a prisoners cell might have to be qualified in the interest of allowing searches for the purpose of maintaining order and suppressing crime but it held the particular searches to be unlawful. This was because it thought that the concerns of the service were exaggerated and did not accept the evidence of the prison service that they were necessary: see Lord Bingham at paras 18 19. The result, as Lord Bingham pointed out, was the same in that case as if the Human Rights Act had been in force. Correspondingly, in other cases the strength of the justification or the breadth of the decision makers margin of judgment may be such that the facts would satisfy either test of proportionality. In Brind, restrictions on the broadcasting of statements by persons representing proscribed organisations were held to be lawful because of what the Appellate Committee regarded as the limited character of the restrictions by comparison with the important public interest in combatting terrorism. Professor Paul Craig has persuasively argued that a similar approach to rationality review is implicit in a substantial body of domestic case law extending over half a century, whether the rights engaged originate in domestic law or in EU or the Convention: The Nature of Reasonableness Review (2013) 66 CLP 131. As Lord Mance recently observed in Kennedy v Charity Commission [2014] 2 WLR 808, at para 51, the common law no longer insists on a single, uniform standard of rationality review based on the virtually unattainable test stated in Wednesbury. 110. I agree with the observations of Lord Mance and Lord Carnwath, which are to the same effect, and I understand a majority of the court to take the same view. For these reasons, it would assist the future course of these proceedings if in dealing with the remaining issues SIAC were to take the common law test as its starting point and then say in what respects (if any) its conclusions are different applying article 8 of the Human Rights Convention or EU law. It may well turn out that in the light of the context and the facts, the juridical source of the right made no difference. 111. I also agree with the important reservations which Lord Mance has expressed about the relevance of EU law to questions of national citizenship. LORD REED: 112. I agree with the judgment of Lord Carnwath. There is also much in the judgments of Lord Mance and Lord Sumption with which I agree, including Lord Mances observations about EU law and British nationality. I add some observations on the question of the relationship between reasonableness and proportionality as principles of domestic administrative law, as I would prefer to express my thoughts on that issue in my own words. It should be made clear at the outset that this important and difficult question has not been the subject of detailed argument. In the circumstances, I shall say no more than is necessary to assist SIAC when the case returns to that tribunal. 113. It may be helpful to distinguish between proportionality as a general ground of review of administrative action, confining the exercise of power to means which are proportionate to the ends pursued, from proportionality as a basis for scrutinising justifications put forward for interferences with legal rights. 114. In the first context, there are a number of authorities in which a finding of unreasonableness was based upon a lack of proportionality between ends and means. Examples include Hall & Co Ltd v Shoreham by Sea Urban District Council [1964] 1 WLR 240 and R v Barnsley Metropolitan Borough Council, Ex p Hook [1976] 1 WLR 1052. There are also authorities which make it clear that reasonableness review, like proportionality, involves considerations of weight and balance, with the intensity of the scrutiny and the weight to be given to any primary decision makers view depending on the context. The variable intensity of reasonableness review has been made particularly clear in authorities, such as R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514, R v Secretary of State for the Home Department, Ex p Brind [1991] 1 AC 696, and R v Ministry of Defence, Ex p Smith [1996] QB 517, concerned with the exercise of discretion in contexts where fundamental rights are at stake. The rigorous approach which is required in such contexts involves elements which have their counterparts in an assessment of proportionality, such as that an interference with a fundamental right should be justified as pursuing an important public interest, and that there should be a searching review of the primary decision makers evaluation of the evidence. 115. That is not to say that the Wednesbury test, even when applied with heightened or anxious scrutiny, is identical to the principle of proportionality as understood in EU law, or as it has been explained in cases decided under the Human Rights Act 1998. In R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532, Lord Steyn observed at para 26, with the agreement of the other members of the House of Lords, that there was a material difference between the Wednesbury and Smith grounds of review and the approach of proportionality in cases where Convention rights were at stake. In Brind, the House of Lords declined to accept that proportionality had become a distinct head of review in domestic law, in the absence of any question of EU law. This is not the occasion to review those authorities. 116. Nevertheless, the application of a test of reasonableness may yield the same outcome as the application of a test of proportionality. Lord Slynn, a former Advocate General and Judge at the European Court of Justice, observed in R v Chief Constable of Sussex, Ex p International Traders Ferry Ltd [1999] 2 AC 418, 439: In R v Secretary of State for the Home Department, Ex p Brind [1991] 1 AC 696 the House treated Wednesbury reasonableness and proportionality as being different. So in some ways they are though the distinction between the two tests in practice is in any event much less than is sometimes supposed. The cautious way in which the European Court usually applies this test, recognising the importance of respecting the national authoritys margin of appreciation, may mean that whichever test is adopted, and even allowing for a difference in onus, the result is the same. 117. As Lord Slynns observations indicate, and as was explained in Bank Mellat v Her Majestys Treasury (No 2) [2014] AC 700, paras 69 72, proportionality is not a monolithic principle, expressed and applied in a uniform way in different legal systems and in different contexts. In particular, the intensity of review, whether under the Human Rights Act or under EU law, depends on a variety of factors, including the nature of the right which is involved, the seriousness of the interference with that right, and the nature of the justification for that interference: see, for example, in relation to EU law, Tridimas, The General Principles of EU Law, 2nd ed (2006), chapters 3 and 5. 118. The cases which I mentioned in para 114 might be contrasted with others concerned with the scrutiny of justifications advanced for interferences with legal rights. In a number of cases concerned with important rights, such as the right of access to justice and legal professional privilege, the court has interpreted statutory powers to interfere with those rights as being subject to implied limitations, and has adopted an approach amounting in substance to a requirement of proportionality, although less formally structured than under the Human Rights Act. Examples include R v Secretary of State for the Home Department, Ex p Leech [1994] QB 198 and R (Daly) v Secretary of State for the Home Department. In the former case, the legislation was interpreted, against the background of the European Convention on Human Rights, as authorising the minimum intrusion into correspondence passing between a prisoner and a solicitor which was objectively established as being necessary to fulfil the aim of ensuring that the correspondence was bona fide legal correspondence. In a similar context, it was held in Daly that the infringement of prisoners rights to maintain the confidentiality of their privileged legal correspondence was greater than was shown to be necessary to serve the legitimate public objectives identified. 119. One can infer from these cases that, where Parliament authorises significant interferences with important legal rights, the courts may interpret the legislation as requiring that any such interference should be no greater than is objectively established to be necessary to achieve the legitimate aim of the interference: in substance, a requirement of proportionality. 120. The present case concerns the Secretary of States power under section 40(2) of the British Nationality Act 1981 to deprive a person of a citizenship status if satisfied that deprivation is conducive to the public good. Given the fundamental importance of citizenship, it may be arguable that the power to deprive a British citizen of that status should be interpreted as being subject to an implied requirement that its exercise should be justified as being necessary to achieve the legitimate aim pursued. Such an argument has not however been advanced at the hearing of this appeal, and it would be inappropriate to express any view upon it. 121. If the question of proportionality under EU law is raised before SIAC, it may well be that the answer is the same as it would be under domestic law, applying either the approach to reasonableness which I have discussed in paras 114 to 116, or the approach to vires which I have discussed at paras 118 to 120. That will however be for SIAC to determine. 1954 Convention, and in my view (like the two other human rights cases cited by the intervener) throws no light on the issues we have to decide.

The central issue in this appeal is whether the respondent was precluded from making an order depriving the appellant of his British citizenship because to do so would render him stateless. This turns on whether he was considered as a national by Vietnam under the operation of its law (article 1(1) of the 1954 Convention relating to the Status of Stateless Persons). Alternatively, the appellant argues that the decision was disproportionate under European Union law. The appellant was born in Vietnam in 1983. In 1989 his family came to the UK, claimed asylum and were granted indefinite leave to remain. In 1995 he acquired British citizenship. The appellant took no steps to renounce his Vietnamese nationality. On 22 December 2011 the Home Secretary deprived him of his British citizenship under section 40(2) of the British Nationality Act 1981 because she suspected that the appellant was involved in terrorist activities. Vietnamese officials have since declined to acknowledge that Mr Pham is a national of Vietnam. He appealed against the respondents decision to the Special Immigration Appeals Commission (SIAC) on various grounds, including that he had lost his Vietnamese citizenship and therefore the decision made him stateless, contrary to section 40(4) of the 1981 Act. On a preliminary hearing on this issue, SIAC allowed the appeal on the basis that in practice it was the Vietnamese executive who made nationality decisions, and Mr Pham would not have been considered to be a Vietnamese national by the executive on 22 December 2011 had it been asked at that point. The Court of Appeal allowed the Secretary of States appeal and held that Mr Pham was a Vietnamese national on the relevant date under the text of Vietnamese laws. The Supreme Court unanimously dismisses the appeal and remits to SIAC to decide the remaining issues in the appeal. Lord Carnwath gives the lead judgment. Lord Mance, Lord Sumption and Lord Reed give concurring judgments. Lord Neuberger, Lady Hale and Lord Wilson agree with Lord Carnwath, Lord Mance and Lord Sumption. Lord Carnwath observes that the question under article 1(1) is not necessarily to be decided solely by reference to the text of the nationality law of the state in question. to the governments practice, even if not subject to effective challenge in the courts. However, even on the broad interpretation suggested by the UN High Commissioner for Refugees in its guidance, there is no evidence of a decision or practice of the Vietnam government which treated the appellant as a non national by operation of its law. Nor in any event was there evidence of a decision that was effective at the date of the Home Secretarys decision of 22 December 2011; unlike a court, the decision of the executive cannot take effect retrospectively. [34 38] On the further issues of EU law, in the judgment of the Court of Justice of the European Union in Rottman [2010] ECR I 1449, the Court did not explicitly state that a Member States decision as to the acquisition or loss of national citizenship, without any cross border element, is outside the scope of EU law. [48] Lord Carnwath observes that this raises issues of general importance; however, the European point was not properly before the court for decision in this appeal as the preliminary issue defined by SIAC was confined to the question of statelessness. [55 56] Lord Carnwath sees force in criticisms of some of the reasoning in Rottman. The issue would need to be considered by the domestic courts before it would be appropriate to consider a reference to the CJEU. However, before that stage is reached it is important that the tribunal of fact, SIAC, should first identify the respects in which a decision on these legal issues might be necessary for disposal of the case, including how the EU requirement of proportionality would differ in practice in the present case from proportionality under the European Convention on Human Rights, an issue already before SIAC, or from applying domestic law principles. [58 59] Lord Carnwath, Lord Mance and Lord Sumption agree that in this case, the nature and intensity of review may not differ whether under domestic law or EU law. [59 60, 98, 109 110] As to whether EU law offers greater procedural safeguards than domestic law, Lord Carnwath states that it is impossible to judge in the abstract what practical effect that might have and this is best considered by SIAC. [59 61, 100] Lord Mance agrees it is unnecessary at this stage to resolve the dispute about EU law. [71] It is very arguable that there are under the Treaties jurisdictional limits to EU competence in relation to the grant or withdrawal by a Member State of national citizenship. [84] A national court must ultimately decide for itself what is consistent with its domestic constitutional arrangements, including what jurisdictional limits exist on the competence of EU institutions. [90] Lord Mance further notes that proportionality could in principle be an appropriate standard of review at common law for a decision removing a status as fundamental as citizenship. [98] Lord Sumption adds that a different test for EU or human rights issues than for domestic issues produces arbitrary distinctions which depend on which source of law is invoked as a ground of challenge: in the present case, it would be rather unsatisfactory to apply a proportionality test to the decision so far as it affects Mr Phams EU citizenship but not his British citizenship. [104 105] Lord Reed notes that proportionality as a general ground of review of administrative action is distinguishable from proportionality as a basis for scrutinising justifications for interferences with legal rights. In the first sense, the domestic test of reasonableness has been held not to be identical to proportionality in EU or human rights law. Nevertheless, the tests may sometimes yield the same outcome. [112 116] As to the second sense, in a number of cases concerned with statutory powers to interfere with important common law rights, the court has interpreted the powers as subject to implied limits, adopting in substance a requirement of proportionality, though less formally structured than that under the Human Rights Act 1998. [118 119] Given the fundamental importance of citizenship, arguably the power to remove it should be subject to that implied limit; Lord Reed reserves his view on this as it was not argued. [120]

This appeal concerns the relationship between two statutory provisions, one very old and the other very young. The old provision, which dates back to the inception of Income Tax during the Napoleonic Wars, but is now to be found in section 874 of the Income Tax Act 2007, requires a debtor in specific circumstances to deduct income tax from payments of yearly interest arising in the United Kingdom. The young provision, first made the subject of legislation in 1986 (and replacing previous judge made rules) but now to be found in rule 14.23(7) of the Insolvency Rules 2016, requires a surplus remaining after payment of debts proved in a distributing administration first to be applied in paying interest on those debts in respect of the periods during which they had been outstanding since the commencement of the administration. The short question, which has generated different answers in the courts below, is whether interest payable under rule 14.23(7) is yearly interest within the meaning of section 874, so that the administrators must first deduct income tax before paying interest to proving creditors. The question arises in connection with the administration of Lehman Brothers International (Europe) (LBIE) which, although it commenced at a time when LBIE was commercially insolvent due to the worldwide crash of the international group of companies of which it formed an important part, has nonetheless generated an unprecedented surplus after payment of all provable debts, in the region of 7 billion, of which some 5 billion is estimated to be payable by way of statutory interest (before any deduction of income tax). LBIE went into administration on 15 September 2008. It became a distributing administration in December 2009. A final dividend was paid to unsecured proving creditors (bringing the total dividends to 100p in the pound) on 30 April 2014. After the coming into effect of a scheme of arrangement, interest slightly in excess of 4 billion was paid to creditors, after deduction of a sufficient amount on account of tax to abide the outcome of these proceedings, on 25 July 2018. Thus the time which elapsed between the commencement of the administration and the payment of interest to creditors was slightly under ten years. The periods in respect of which interest was payable under rule 14.23(7) (and its predecessor) ranged from a little over four years (which expired when the first interim distribution to proving creditors was made in November 2012) and little over five and a half years, when the final dividend to creditors was made, as described above. Statutory Interest in Administration Rule 14.23(7) of the Insolvency Rules 2016, which replaced substantially identical provisions in rule 2.88(7) of the Insolvency Rules 1986, provides as follows: (7) In an administration (a) any surplus remaining after payment of the debts proved must, before being applied for any other purpose, be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the relevant date; (b) all interest payable under sub paragraph (a) ranks equally whether or not the debts on which it is payable rank equally; and the rate of interest payable under sub paragraph (c) (a) is whichever is the greater of the rates specified under paragraph (6) and the rate applicable to the debt apart from the administration. Rule 14.23(6) provides that the relevant rate of interest is that specified in section 17 of the Judgments Act 1838 (1 & 2 Vict c 110), which was, at the material time, 8% per annum. The relevant date referred to in rule 14.23(7)(a) is the date upon which the company entered administration; see rule 14.1(3). In In re Lehman Brothers International (Europe) (in administration) (No 6) [2015] EWHC Civ 2269 (Ch); [2016] Bus LR 17, para 149, David Richards J said this about statutory interest payable under the predecessor of rule 14.23(7): The right to interest out of a surplus under rule 2.88 is not a right to the payment of interest accruing due from time to time during the period between the commencement of the administration and the payment of the dividend or dividends on the proved debts. The dividends cannot be appropriated between the proved debts and interest accruing due under rule 2.88, because at the date of the dividends no interest was payable at that time pursuant to rule 2.88. The entitlement under rule 2.88 to interest is a purely statutory entitlement, arising once there is a surplus and payable only out of that surplus. The entitlement under rule 2.88 does not involve any remission to contractual or other rights existing apart from the administration. It is a fundamental feature of rule 2.88, and a primary recommendation of the Cork Committee that all creditors should be entitled to receive interest out of surplus in respect of the periods before payment of dividends on their proved debts, irrespective of whether, apart from the insolvency process, those debts would carry interest. In the present case, in the Court of Appeal [2018] Bus LR 730, after citing that passage in full, Patten LJ continued, at para 16: There is no doubt at all that statutory interest, as David Richards J explained, is not a continuing liability which accrues from day to day on a prospective basis over the period to which it relates. It is paid, as I have said, as statutory compensation for the loss which the creditors have suffered by being kept out of their money for the period of the administration. I agree. In In re Lehman Brothers International (Europe) (in administration) (Nos 6 and 7) [2017] EWCA Civ 1462; [2018] Bus LR 508, para 26, giving the judgment of the Court of Appeal, Gloster LJ said of the simple words of rule 2.88(7), when aggregated with the following two paragraphs (all in substantially the same terms as are now to be found in rule 14.23, as set out above): this simple formula constitutes, in our view, a complete and clear code for the award of statutory interest on provable debts. As [counsel] put it, it contains all you need to know. In the present case, at first instance, Hildyard J said at para 16: In my judgment, the statutory right to interest is sui generis and is not to be equated with a right to interest which accrues over time. Again, I agree with both those dicta (and was a party to the first of them). Yearly Interest under the Income Tax Legislation follows: Section 874 of the Income Tax Act 2007 provides (so far as is relevant) as (1) This section applies if a payment of yearly interest arising in the United Kingdom is made (a) by a company, (b) by a local authority, (c) by or on behalf of a partnership of which a company is a member, or (d) by any person to another person whose usual place of abode is outside the United Kingdom. (2) The person by or through whom the payment is made must, on making the payment, deduct from it a sum representing income tax on it at the basic rate in force for the tax year in which it is made. There is no definition of the phrase yearly interest anywhere in the 2007 Act. Nonetheless there is this deeming provision in section 874, added by Schedule 11 to the Finance Act 2013: (5A) For the purposes of subsection (1) a payment of interest which is payable to an individual in respect of compensation is to be treated as a payment of yearly interest (irrespective of the period in respect of which the interest is paid). This is unfortunately another case in which the full meaning of an apparently innocent looking simple statutory phrase can only be addressed by reference to the historical deployment of that phrase, or equivalent phrases seeking to express the same concept, in early legislation. Hildyard J set out in an Appendix to his judgment an admirable brief summary of the history of the statutory provisions about deduction of yearly interest, beginning with the introduction of income tax by Pitts Income Tax Act 1799 (39 Geo 3 c 13). In the present case, the main reason for needing an understanding of the statutory history is so that important decisions about the underlying concepts behind yearly interest can be reliably interpreted, by reference to the particular context of the use of the phrase in the statute then in force. As would appear, the earliest of those authorities was decided in 1854, and the latest in 1981. The concept of yearly interest first appeared within the income tax legislation in section 208 of Addingtons Income Tax Act 1803 (43 Geo 3 c 122). It appeared as part of the phrase: Annuities, yearly Interest of Money, or other annual Payments whether the same shall be received and payable half yearly, or at any shorter or more distant Periods. Section 208 both charged yearly interest to tax and authorised the payer to deduct an amount equal to the tax chargeable on the interest. When income tax was reintroduced by Sir Robert Peel in the Income Tax Act 1842 (5 & 6 Vict c 35), section 102 charged to tax: Annuities, yearly Interest of Money, or other annual Payments. And, as in 1803, provided for deduction at source by the payer, where paid out of taxed profits or gains. Deduction of yearly interest at source was continued in Gladstones Income Tax Act 1853 (16 & 17 Vict c 34), by section 40, while Schedule D brought into charge: All Interest of Money, Annuities, and other annual Profits and Gains. From 1888 until 1965, a succession of provisions to substantially the same effect made it compulsory to deduct tax at source and to account for it to the Revenue where interest of any kind was not wholly paid out of taxed income, but permitted the deduction of tax at source and its retention in respect of yearly interest which was wholly paid out of taxed income. In relation to yearly interest, this enabled the interest payer to be compensated for the fact that yearly interest paid out was not deductible in computing his own taxable profits or gains. This dichotomy was, between 1918 and 1952, achieved by rules 21 and 19 respectively of the General Rules Applicable to all Schedules of the Income Tax Act 1918 (the 1918 Rules). In short, rule 21 was about all types of interest, whereas rule 19 was concerned only with yearly interest. From 1952 until 1965 this dichotomy was preserved by sections 169 (concerning yearly interest) and 170 (concerning interest of any kind) of the Income Tax Act 1952. This dichotomy between the treatment of interest of any kind which is not paid out of profits or gains and yearly interest which is so made was progressively unwound, first for corporate taxpayers by the Finance Act 1965 and then generally by the Finance Act 1969. The regime for deduction of tax on interest at source which has continued, without substantial change, from 1969 is that set out in section 54 of the Income and Corporation Taxes Act 1970, then section 349(2) and (3) Income and Corporation Taxes Act 1988 and, latterly, section 874 of the Income Tax Act 2007. In summary, it provides only for the mandatory deduction at source of tax on yearly interest paid by companies as well as certain other categories of payers, or paid by any person to someone whose usual place of abode is outside the UK. The issues In order to make sense of what follows, it is convenient at this stage to provide a bare outline of what is and is not in issue, under the general question whether or not statutory interest payable by administrators out of a surplus is yearly interest. It has been common ground throughout this litigation that the payments are properly to be regarded as interest, not merely because they are so described in rule 14.23(7), but also within the meaning of the word as used in section 874(1). As will appear (and as the Court of Appeal concluded) that apparent concession by the administrators serves more to mask than to define the real issues. The main thrust of the administrators submissions (by Mr David Goldberg QC and Mr Daniel Bayfield QC in this court although Mr Goldberg did not appear below) has been to contrast the characteristics which the authorities show are required for the classification of interest as yearly interest with those of interest payable from a surplus in administration. The required characteristics are that the interest should derive from a source with the requisite degree of permanence and durability over time, and that the interest should accrue due over a period intended, or at least likely to last for a year or more. By contrast, it is submitted, statutory interest payable from a surplus in administration has, as its source, first the emergence of a surplus and second the decision of the administrators that it is time to pay it. It does not accrue due over any significant or likely period of time. Rather it is simply payable out of that surplus once it has been ascertained and turned into money, usually (and as here) by a single payment of a lump sum to each qualifying creditor. For HMRC it is submitted (by Mr Malcolm Gammie QC and Ms Catherine Addy QC) first, that it is unnecessary to identify a source for a statutory interest payment to qualify for deduction under section 874(1) and secondly, that it is not a requirement of yearly interest that it should accrue due over a period of time. Rather, the characteristic which satisfies the requirement that the interest should be yearly is that, once a surplus has been identified, the statutory interest is payable in respect of the period, commencing with the beginning of the administration, and ending with payment of the proving creditors debts in full, during which the creditors have been kept out of their money. If that period is, on the facts about a particular administration, in excess of a year, then the requirement for duration over time encapsulated in the word yearly is satisfied. Further, to the extent that the authorities made it a requirement that the source of the interest should be something in the nature of an investment, this was satisfied in relation to all LBIEs creditors, and regardless of the basis of their claims admitted to proof, because they were involuntary long term investors in LBIE by reason of the moratorium placed upon their claims by its administration. At first instance, Hildyard J was persuaded that the absence of any accrual over time (prior to the identification of a surplus and its quantification after payment of all proved debts in full) was fatal to the categorisation of statutory interest as yearly interest. By contrast, the Court of Appeal could discern no requirement from the authorities that yearly interest should accrue due over time. Since it was compensation for the proving creditors being kept out of their money for a substantial time, the interest had the requisite long term quality sufficient for it to be categorised as yearly. The Authorities The relevant authorities may broadly be divided into two groups. First, there are those which address the question whether interest which does accrue due over time is properly to be categorised as yearly interest or, in bankers jargon, short interest. Secondly, there are those authorities which address the question whether an entitlement to money described as interest, but which does not accrue due over time, can properly be regarded as yearly interest, or indeed interest at all, within the meaning of the income tax legislation. This second group is mainly concerned with interest payable as a result of a judicial decision, either when granting an equitable remedy or when exercising a discretion to award interest under statute. As will appear, it is this second group of authorities which, in my view, provides the answer to the questions raised by this appeal, albeit only by analogy because, as the judge himself observed, statutory interest payable from a surplus realised in a distributing administration is sui generis. Nevertheless it is convenient to take the first (generally earlier) group of authorities first. The earliest is Bebb v Bunny (1854) 1 K & J 216. The question was whether interest contractually payable upon the late completion of a contract for the purchase of land was yearly interest of money within the meaning of section 40 of the Income Tax Act 1853, so that it was payable subject to deduction of tax, either by the purchaser or by the court, even if paid into court gross as the condition for a decree of specific performance against the vendor. In deciding that it was yearly interest, Sir William Page Wood V C said, at pp 219 220: The whole difficulty is in the expression yearly interest of money; but I think it susceptible of this view, that it is interest reserved, at a given rate per cent per annum; or, at least, in the construction of this Act, I must hold that any interest which may be or become payable de anno in annum, though accruing de die in diem, is within the 40th section. I cannot make any solid distinction between interest on mortgage money and interest on purchase money. I consider the Act very singularly worded, yearly interest being used apparently in the same sense as annual payments; but I am clearly of opinion that it means at least all interest at a yearly rate, and which may have to be paid de anno in annum; such as interest on purchase money, as well as mortgage interest; and that, therefore, the purchaser is entitled to deduct the tax in this case. The reference to mortgage money, by way of analogy, becomes intelligible when it is understood that the drafting practice of the time was typically to make mortgage loans repayable, with interest, on a fixed date, usually less than a year after the making of the advance, even if the parties expectation was that the mortgage would endure for much longer, before redemption, with interest being payable periodically in the meantime. As the Vice Chancellor put it, at p 218: Most mortgage deeds contain only a covenant to pay the principal, with interest at a certain rate per annum, on a day certain. After that it accrues de die in diem, and the interest, without any particular reservation, ordinarily is received half yearly, from year to year. It is difficult to see the distinction between interest so reserved and paid, and that which by special agreement accrues on purchase money, which also goes on from day to day, and may run on for a year or stop at any time on payment of the purchase money, and which, in some shape or other, forms a lien on the property. Thus it was the propensity, rather than the intention or inevitability, for interest payable during a period of delayed completion to run on for more than a year which made it yearly interest, even though in many cases the delay in the completion of the purchase might well be much shorter. The potentially very wide interpretation of yearly interest in Bebb v Bunny was, in a series of later cases, significantly curtailed, albeit that in none of them was the decision held to have been wrong. On the contrary, it has remained the leading case. Goslings & Sharpe v Blake (1889) 23 QBD 324 was about a three months bankers loan, repayable with interest on a fixed date, interest being calculated by reference to a rate per annum, an example of what Lindley LJ called, at p 330: short loans by bankers. It establishes two principles relevant to the question whether interest is yearly interest (then within the meaning of section 40 of the Income Tax Act 1853). The first is that interest is not yearly interest merely because it is calculated by reference to a rate per annum: see per Lord Esher MR, at p 328. Secondly it establishes that the question whether the interest is yearly or short depends upon a business like rather than dry legal assessment of its likely duration. At p 330, speaking of the mortgage example used in Bebb v Bunny, Lindley LJ said: The difficulty is not lessened by the circumstance that most mortgages are loans for six months. The ordinary form of mortgage contains a covenant to repay the loan in six months, and if not then paid a covenant to pay interest until the loan is repaid. Those are short loans; but in fact, as men of business, we know perfectly well that, except in exceptional cases, money lent on mortgages is very seldom repaid at the end of six months, the mortgagee usually being content with his security and receiving his interest half yearly. In point of business, therefore, a mortgage is not a short loan; but a bankers loan at three months is a totally different thing. That is a short loan, it is intended and understood to be a short loan, and the difference in practice between the two is perfectly well known to every business man. The first relevant case about whether statutory (rather than contractual) interest can be yearly interest is In re Cooper [1911] 2 KB 550, in which objection was taken to the supposed failure of a judgment creditor to deduct tax from statutory interest due on the judgment relied on in a bankruptcy notice served on the judgment debtor. That depended upon whether the interest was yearly interest. In deciding that interest payable on a judgment debt under the Judgment Act was not yearly interest Cozens Hardy MR said this, at p 553: The words yearly interest are satisfied although the interest be not payable yearly but be payable quarterly or half yearly, and further, as in the case of a mortgage, although the money is covenanted to be paid six months after date in the ordinary course of a mortgage, the court treats that as being a transaction to the knowledge and the reasonable intendment of all parties, upon which yearly interest was payable in the understanding and contemplation of all parties, it being really in the nature of an investment.(my emphasis) He continued: Now in the present case I ask myself is it possible to suppose that this was a transaction in which anybody contemplated or intended anything permanent? It is quite impossible so to regard it. At first blush, this decision of the Court of Appeal might appear to suggest that statutory interest could never be yearly interest because it arose otherwise than pursuant to any agreement, transaction or common intention of the parties. Subsequent cases have shown that this is not so but the concept of addressing the yearly interest question by reference to a perception whether the source of the interest can properly be regarded as a form of investment has survived. A negative answer to that question in relation to statutory interest from a surplus in administration formed a major plank in the administrators submissions. A question deliberately left open in the Goslings case was whether interest on a short loan could nonetheless become yearly interest if the loan was left outstanding for more than a year. In Gateshead Corpn v Lumsden [1914] 2 KB 883 the plaintiff local authority had become entitled against the owners (including the defendant) of premises fronting a street which it had paved and made up, to a proportion of its costs, plus interest at 5% per annum. Although the Corporation had no settled practice of allowing these statutory debts to remain outstanding for periods of more than a year, it did so in relation to the defendant, who made payments on account of interest and capital from time to time. The Court of Appeal rejected a submission that the Corporations forbearance converted interest into yearly interest within the meaning of section 40 of the 1853 Act. Applying the principle which he extracted from In re Cooper, Lord Sumner said, at pp 889 890: applying the principle underlying that decision, I am unable to see how the words yearly interest can apply to this transaction. There is no agreement for a short loan or a long loan. The debt is due and repayment is not enforced; only in that sense is there a loan. Truly speaking there is simply a forbearance to put in suit the remedy for a debt. The repayment might have been enforced at any moment. The debt might have been paid by the debtor at any moment. Lord Sumner was careful to put on one side any case in which it might be established that the local authority had a settled practice of leaving statutory debts for street improvements outstanding for substantial periods of time. But the decision is good authority for the proposition that mere forbearance by a creditor who is entitled to statutory interest on a debt which is immediately due and payable does not bring that statutory interest within the confines of yearly interest. It serves as a caution against treating the words of Sir William Page Wood V C in Bebb v Bunny (quoted above) as meaning that the mere possibility that a stream of interest may endure for more than a year is sufficient in all cases to make it yearly interest. The investment test first enunciated in In re Cooper gains force from the analysis of Rowlatt J in Garston Overseers v Carlisle [1915] 3 KB 381. Persons claiming to be charitable trustees enjoyed a long standing arrangement with their bankers whereby credits on current accounts generated interest. The question was whether that was yearly interest within section 105 of the Income Tax Act 1842, qualifying for deduction at source. By concession, that phrase in section 105 was treated as having the same meaning as in section 40 of the Income Tax Act 1853. Referring to the case law on section 40, Rowlatt J said this, at p 386: The broad result of the decisions in those cases is, I think, that yearly interest means, substantially, interest irrespective of the precise time in which it is collected, interest on sums which are outstanding by way of investment as opposed to short loans or as opposed to moneys presently payable and held over or anything of that kind. He continued, at p 387: They (the overseers) are to levy rates as far as they can for their current expenditure. However, they must necessarily keep a small balance in hand, and they get interest upon it under the arrangements which the bank were willing to make. It is no doubt contemplated that the balance will continue for a long time; but what is the daily balance? It is not even a short loan; it is merely money at call, money payable on demand. Since those temporary balances could not be described as investments, the interest payable was not yearly interest. An attempt to reduce this jurisprudence to a concrete set of useful propositions was made by Lord Anderson, sitting in the Inner House (Second Division) of the Court of Session in Inland Revenue Comrs v Hay (1924) VIII TC 636 at 646. The case was about yearly interest within the meaning of section 27(1)(b) of the Income Tax Act 1918, but it was, again, common ground that the phrase had the same meaning as was under consideration in all the earlier cases, beginning with Bebb v Bunny. Lord Anderson said this: Now the authorities referred to by Crown Counsel seem to me to establish these propositions, five in number: (First), that interest payable in respect of a short loan is not yearly interest (Goslings ). (Second) that in order that interest payable may be held to be yearly interest in the sense of the Income Tax Acts, the loan in respect of which interest is paid must have a measure of permanence. (Third), that the loan must be of the nature and this is pretty well expressing the second proposition in another form that the loan must be of the nature of an investment (Garston Overseers). (Fourth), That the loan must not be one repayable on demand (Gateshead Corpn ). And (fifth) that the loan must have a tract of future time (per Lord Johnston in Scottish North American Trust Ltd, 1910 Session Cases 966, 973). These propositions are perhaps one proposition expressed in different forms, but they are the result of the authorities. I will refer these tests as the Hay tests. Some further support for the pre eminence of the investment test is to be found in the judgment of Lord Denning MR in Corinthian Securities Ltd v Cato [1970] 1 QB 377, at 382 383. After referring to Inland Revenue Comrs v Hay, he continued: The words short loan are not used in the statute: it is a mistake to place too much emphasis on them. The real question is whether the interest payable is yearly interest of money. Interest is yearly interest of money whenever it is paid on a loan which is in the nature of an investment no matter whether it is repayable on demand or not. After reviewing the Goslings case he continued: Looking at the agreement in this case, it is plain to me that this loan was made as an investment. Although payable on demand, it was unlikely that any demand would be made so long as the interest payments were kept up. It was a loan on the security of property, indistinguishable in principle from an ordinary loan or mortgage. The interest was yearly interest of money. Some cold water was cast upon the investment test by Sir John Donaldson MR in Cairns v MacDiarmid [1983] STC 178, at 181, as follows: It is well settled that the difference between what is annual and what is short interest depends on the intention of the parties. Thus interest payable on a mortgage providing for repayment of the money after six months, or indeed a shorter period, will still be annual interest if calculated at a yearly rate and if the intention of the parties is that it may have to be paid from year to year (Bebb v Bunny Corinthian Securities Ltd v Cato ). I would personally wish to avoid the use of the term investment as providing any sort of test in the context of whether interest is annual interest, notwithstanding its use in the latter case, because it is possible to have a short term and indeed a very short term investment, eg overnight deposits, and such an investment does not involve any annual interest, regardless of whether the interest is calculated at an annual rate. That was a case in which it had been found that the loan was never intended to last for more than a few days, although there was an entitlement to postpone repayment for two years. It had, as intended, been discharged within a week, by novation. In my view the difference in approach to the use of investment as a test between that case and those which preceded it has more to do with changes in what the financial world regards as an investment than with any change in the underlying tax law. I consider that the Hay tests remain the best convenient summary of the jurisprudence about the meaning of yearly interest, in the context of interest which accrues due over time, whether purely contractual or statutory in origin. I turn now to the second group of cases, all of which were concerned with interest payable after the event (and usually in one lump sum) as compensation for the payee being kept out of money or property during some earlier period. The common characteristic of these cases, shared with this case, is that the interest does not accrue due during the period in question. Rather, it is awarded after the period has ended, as compensation relating to that earlier period. Taking them chronologically, the first is Barlow v Inland Revenue Comrs (1937) 21 TC 354. In 1923 the appellant, who was a trustee of settlements in favour of his children, realised the trust investments and reinvested the proceeds in his own name in unauthorised securities which subsequently fell in value. Recognising that he acted in breach of trust, by a deed made in March 1930 he covenanted to pay his fellow trustees an amount equivalent to the proceeds of the realisation in 1923, together with compound interest at 5% per annum from the date of realisation until 1 January 1930. Finlay J, on appeal from the Special Commissioners, held that the interest element in the lump sum agreed to be paid by the deed was yearly interest. Following Vyse v Foster (1872) LR 8 Ch App 309 and Inland Revenue Comrs v Barnato [1936] 2 All ER 1176, he held that where a trustee agrees to pay principal and interest in respect of his breach of trust in relation to a period in the past, the interest element is properly to be regarded as interest (rather than damages) because the beneficiary has a right to elect between interest and an account of profits in respect of the period during which the trust property was mis applied. He held that it was yearly interest on the basis that it fell clearly within the definition as explained in Bebb v Bunny. Although he did not say so in terms, this must have been because of the lengthy period of over six years prior to the March 1930 deed in respect of which the trustee had been accountable. In the famous litigation known as Regal Hastings v Gulliver the House of Lords had, in an order made in February 1942 [1967] 2 AC 134; [1942] 1 All ER 378, found that the defendant directors were liable to account to their company for a profit made by them in 1935 from the use of information which they held as fiduciaries. Interest at 4% per annum was ordered to be paid from the dates in October and December 1935 when the defendants had made the relevant profits. In March 1942 the defendants paid what they regarded as owing to the company including interest, but they deducted income tax on the interest element. Cassels J held (1944) 24 ATC 297, that this was yearly interest, deductible either under rule 19 or under rule 21 of the 1918 Rules. Although rule 21 related to interest of all kinds, rule 19 related only to yearly interest. The outcome was therefore much the same as it had been in the Barlow case save that, whereas the trustee in that case had volunteered an account including interest to the beneficiary, the liability of the defendant trustees in Regal Hastings v Gulliver had only been ascertained, after lengthy litigation, in the House of Lords. It was sufficient for Cassels Js decision that the interest was yearly interest that it had been paid in respect of a period of accountability of some six and a half years, so that cases such as the Gosling case were plainly distinguishable. The next, and most important case, is Riches v Westminster Bank Ltd [1947] AC 390. Section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934 provides that: In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment. This discretion applies, as Viscount Simon said at p 397, regardless whether there is or is not a contractual right to interest which underlies the cause of action. He said that: The added amount may be regarded as given to meet the injury suffered through not getting payment of the lump sum promptly, but that does not alter the fact that what is added is interest. At p 398 he addressed a submission to the effect that an order for interest under section 3 could not be interest within the meaning of the Income Tax Acts because the added sum only came into existence when the judgment was given and from that moment had no accretions under the order awarding it. Viscount Simon said: But I see no reason why, when the judge orders payment of interest from a past date on the amount of the main sum awarded (or on a part of it) this supplemental payment, the size of which grows from day to day by taking a fraction of so much per cent per annum of the amount on which interest is ordered, and by the payment of which further growth is stopped, should not be treated as interest attracting income tax. It is not capital. It is rather the accumulated fruit of a tree which the tree produces regularly until payment. Addressing the submission that the payment under section 3 was, however described, in truth damages, Lord Wright said, at pp 399 400: The appellants contention is in any case artificial and is in my opinion erroneous because the essence of interest is that it is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had had the use of the money, or conversely the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation. Later, at p 403, he said: It was said that the sum in question could not be interest at all because interest implies a recurrence of periodical accretions, whereas this sum came to existence uno flatu by the judgment of the court and was fixed once for all. But in truth it represented the total of the periodical accretions of interest during the whole time in which payment of the debt was withheld. The sum awarded was the summation of the total of all the recurring interest items. Lord Simonds addressed the same submission at p 410 as follows: It was further urged on behalf of the appellant that the interest ordered to be paid to him was not interest of money for the purpose of tax because it had no existence until it was awarded and did not have the quality of being recurrent or being capable of recurrence. This argument was founded on certain observations of Lord Maugham in Moss Empires Ltd v Inland Revenue Comrs [1937] AC 785, 795, in regard to the meaning of the word annual. It would be sufficient to say that we are here dealing with words in the Income Tax Act which do not include either annual or yearly, but in any case I do not understand why a sum which is calculated upon the footing that it accrues de die in diem has not the essential quality of recurrence in sufficient measure to bring it within the scope of income tax. It is surely irrelevant that the calculation begins on one day and ends on another. It is more important to bear in mind that it is income. In 1947 the income tax treatment of interest was still subject to the dichotomy described in paras 14 15 above. Tax on interest of any kind had to be deducted at source if not wholly paid out of taxed income, pursuant to rule 21 of the 1918 Rules. By contrast, rule 19 permitted the deduction (and retention) of tax at source where yearly interest was paid wholly out of taxed income. The Riches case was about rule 21 rather than rule 19 but the interest awarded under section 3 of the 1934 Act represented interest from June 1936 until May 1943, being the period since the arising of the cause of action during which the plaintiff had been kept out of his money. As Patten LJ observed in the present case (at para 54, referring back to para 25), the passage in Lord Simonds speech quoted above suggests that he would have regarded the statutory interest awarded in that case as both interest and yearly interest for the purposes of the Income Tax Acts. This is because he regarded the payment of a single lump sum by way of interest after the event, referable to an earlier period for which the claimant needed compensation for being kept out of his money, as having the requisite quality of recurrence. Recurrence over seven years is plainly sufficient for that purpose. Jefford v Gee [1970] 2 QB 130 was another case about an award of interest under section 3 of the 1934 Act. The award was made in June 1969 by way of addition to damages for personal injuries incurred by the plaintiff in a motor accident in November 1966. It therefore compensated the claimant for having been kept out of his money for some two and a half years. At p 146, addressing the principles applicable to an award of interest in personal injury cases under section 3 of the 1934 Act, Lord Denning MR said: Interest should not be awarded as compensation for the damage done. It should only be awarded to a plaintiff for being kept out of money which ought to have been paid to him. Later, under the heading Tax, at p 149, he continued: When the court awards interest on debt or damages for two, three or four years, the interest is subject to tax because it is yearly interest of money: see Riches v Westminster Bank [1947] AC 390. It has been suggested (for example by Hildyard J at para 71(2) of his judgment) that Lord Denning MR may have failed to appreciate that the Riches case was about interest rather than yearly interest. In my view this ignores Lord Denning MRs reference to the period of two, three or four years in respect of which interest is awarded. He was entitled to conclude that, even if the Riches case only established that the relevant payments were interest for tax purposes, they were nonetheless yearly interest because of the historical period of several years in respect of which the lump sum award of interest was made. Chevron Petroleum (UK) Ltd v BP Petroleum Development Ltd [1981] STC 689 is about the interest element in rolled up payments by way of contribution to expenses in a joint venture agreement for the exploitation of the Ninian oilfield in the North Sea. The participants made payments against the expenditure in accordance with their expected share of the production. Provision was made for each participating groups share to be adjusted in the light of later experience of actual production. After an accounting which added interest to the amounts expended, the participants were credited or debited with the differences between their contributions on account and their adjusted contribution liability. Thus the liability to make payments against debits was contingent upon share adjustments pending final calculations, and the interest element in them related to periods of time which had passed before any payment liability fell due. Nonetheless Sir Robert Megarry V C held that the interest element was yearly interest, and therefore subject to deduction at source. He said, at p 696: I cannot see why the contingency should deprive the so called interest of the quality of being true interest. If X lends 100 to Y, the loan to carry interest at 10% per annum, why should a provision for repayment and interest to be waived in certain events, or for repayment with interest to be made only in certain events, prevent the interest from being true interest if in the event it becomes payable? Later, at pp 696 697, commenting upon the Riches case and interest awarded under section 3 of the 1934 Act, he continued: Although the obligation to pay interest was created by the judgment, the award was made on the basis that the defendant ought to have paid the money sued for at an earlier date and had not done so. The interest awarded was interest in respect of the plaintiff having been wrongfully kept out of the money: . That was not so in the present case, where the operating parties had duly paid all that was due from them under the contract at the time when it was due. I do not think that this point, or, indeed, any other point, suffices to distinguish the Riches case. If a contract (eg with a builder) provides for specified payments to be made on account of the final liability, and for interest at a specified rate to be paid on any balance when the final accounts have been agreed, the fact that all the specified payments on account were punctually made does not, it seems to me, prevent the interest payable on the balance from being truly interest. Analysis The statutory interest in the present case shares many of the relevant features with the contractual provision for interest in the Chevron case. In both cases it cannot be known during the period in respect of which interest is calculated whether it will in fact be payable at all. In the Chevron case liability depended upon an adjustment of participants shares made in the light of actual production, after the relevant expenditure was incurred, which increased rather than reduced the relevant participants share of the liability to fund expenses. In this case it depends upon the realisation of a surplus after payment of proving creditors claims in full, necessarily after the commencement of the administration and indeed after the end of the period in respect of which interest is calculated, which ends upon payment of the creditors debts. In both cases there is no liability to pay interest during the period in respect of which it is calculated. In both cases the interest is not itself payable over a period of time. It is rolled up and payable in a single lump sum. In short the interest is not an income stream, payable over a period of a year or more, but it is nonetheless income rather than capital, as the Vice Chancellor was at pains to emphasise, at p 696. More generally the relevant features of the interest in this case have much more in common with the second group of cases about statutory interest under section 3 of the 1934 Act, and about interest ordered or agreed to be paid by a trustee or fiduciary in respect of a past loss or misapplication of trust property than they have with the first group of cases about interest accruing due and payable immediately, or over time, beginning with Bebb v Bunny. This is not because the interest is statutory rather than contractual. There are examples of each in both groups. It is first because in none of the second group is the interest actually due and payable during the period by reference to which it is calculated, nor can it be said with certainty during that period that it ever will become due. But the interest is nonetheless payable, after the event, as a form of compensation for the recipients being in some way out of their money during the period in respect of which it is calculated. In the cases about interest under the 1934 Act the recipients are (usually) compensated for that loss during the period when they have a cause of action for debt or damages, until a judgment gives them an enforceable right to payment. In the trust cases the beneficiary is compensated by payment of interest for the loss (if any) represented or caused by the trust fund being out of the monetary value of the trust property lost or misappropriated by the trustee, until the trustee accounts and pays that sum back into the trust fund. In the Chevron case the payment of interest by the participants who later incurred an increased contribution share compensated those participants who, in the light of production experience, turned out to have paid more than their fair share of the cost of generating it. In the present case, as Mr Goldberg was at pains to emphasise, it cannot generally be said from the commencement of an administration whether there will ever be generated a surplus out of which statutory interest will become payable. Such surpluses are in fact very rare indeed. It may be that, during that period, the process of asset recovery by the administrators will make a surplus more likely, but even then its amount and the timing of any interest payment will all depend upon countless contingencies, including (in this case) long drawn out litigation about the amount of creditors claims. Statutory interest is never due until after all proving creditors have been paid in full. There is always a risk that an administration will be followed by a winding up, with unfortunate (and probably unforeseen) consequences upon the availability of interest under rule 14.23, even if there is a surplus: see In re Lehman Brothers International (Europe) (in administration) (No 4) [2018] AC 465 per Lord Neuberger of Abbotsbury, at paras 117 to 121. Nonetheless, as rule 14.23 makes clear in the plainest terms, the interest once paid compensates proving creditors for being kept out of their proved debts from the commencement of the administration (which prevents them seeking any other form of recovery), until they are actually paid. Mr Goldberg sought to distinguish the trust cases on the basis that, pursuant to Vyse v Foster, a beneficiary had an enforceable right to interest from the moment when the trust property was lost or misapplied. For the reasons given by Patten LJ in the Court of Appeal, at paras 45 to 50, based upon Target Holdings Ltd v Redferns [1996] AC 421, this is not the correct analysis of the basis upon which the court awards interest in equity. It is discretionary, like interest under the 1934 Act, even though the discretion may be exercisable in accordance with well settled principles. It is true, as the administrators submitted, that some of the second group of cases were primarily concerned with the question whether payments described as interest were truly interest at all for income tax purposes, rather than whether they were yearly interest. In the Riches case this was because the question arose under a provision in the 1918 Rules relating to all types of interest. In Jefford v Gee it may be that Lord Denning MR was not overly concerned with whether the interest was yearly or not, although he certainly took notice of the fact that the plaintiff had been out of his money for several years. In the Chevron case the contrary argument was that the element in the rolled up payment described as interest was not interest at all. There may have been no dispute that, if it was, it was yearly interest. By contrast in the present case it has been common ground throughout that statutory interest under rule 14.23 is interest for the purposes of income tax. But those cases nonetheless provide the answer to the conundrum: what period of durability is to be identified for interest payable in a single lump sum as compensation for the payee being out of the money in the past, for the purpose of deciding whether it is to be treated as yearly interest, under the Hay principles? The simple answer, supplied by all the second group of cases, is that it is the period in respect of which the interest is calculated, because that is the period during which the loss of the use of money or property has been incurred, for which the interest is to be compensation. This appears also to have been the assumption made by the drafter of what is now section 874(5A), quoted above. It deems payment of interest to an individual in respect of compensation to be yearly interest irrespective of the period in respect of which the interest is paid. This suggests that, but for the deeming provision (introduced, so the court was told, to deal with compensation for mis selling of Payment Protection Insurance), the question whether the interest would or would not have been yearly interest would have depended upon the duration of the period in respect of which the compensatory interest was calculated. It may of course be said that this approach has nothing to do with the intentions of the payer and the payee, and that, for most of the relevant period it will not be known when it will end, or whether interest as compensation for that loss will ever be paid. This is true of all the second group of cases, just as in the present case. But this gives rise to no relevant uncertainty. The payer will always know what that period is by the time that the interest becomes due and will be able to deduct tax or pay gross accordingly. In the case of interest under the 1934 Act the judge is required to identify the period. In the trust cases the order for payment of interest will also be by reference to a defined period. In the present case the period is fixed by the date of commencement of the administration and the date (or dates) upon which the proving creditors are paid their debts. I must finally address the group of submissions deployed by the administrators under the heading source. These were not deployed with any prominence in, or at least addressed by, the Court of Appeal, but they were advanced at the forefront of Mr Goldbergs submissions in this court. The argument goes like this. Income Tax is, and always has been, levied by reference to the source of the relevant income. The only source from which interest under rule 14.23 can be said to derive, apart from the statutory provision itself, is the combination of a realised surplus and a decision by the administrators that it is time to pay it. Those elements cannot, either singly or together, be said to have the quality of durability over time sufficient to make the interest yearly interest for income tax purposes, applying the Hay tests. They are unpredictable, liable to evaporate in the event of a winding up, will generally not have existed for a year before payment, and cannot be regarded as being in the nature of an investment. The period of time in respect of which the statutory interest is calculated cannot itself be regarded as a source of the interest. If there has to be a search for any source of the statutory interest other than the surplus and the decision to pay, it can only be the contractual debts owed by LBIE to its creditors at the moment when it went into administration, but those debts were mainly short term in nature, lacking the requisite capacity to generate yearly interest. Furthermore for income to be taxable at all the source has to be in existence at the time when the income becomes due and payable. Neither those contractual debts, nor the provable debts which replaced them from the commencement of the administration, remained in existence when the statutory interest became payable. They had all by then been discharged by payment in full. The short answer to this submission is that, if it were correct, all the second group of cases would have been wrongly decided. In none of them did the interest under review have a source in the sense of some kind of durable investment. In the equity cases the beneficiaries received interest by way of compensation for part of their trust fund being lost or misappropriated. In the cases under the 1934 Act the plaintiffs were being compensated for the delayed payment of damages, in one case for the pain and suffering occasioned by a broken leg which had no doubt healed long before the interest became due. In the Chevron case one group of joint venturers were in substance being compensated, long after the event, for having contributed more than their fair share of the expenses. But the flaws in the submission are more fundamental than that. First, the obligation to deduct tax from interest under section 874 does not depend at all upon the question whether the interest is taxable in the hands of the recipient. If the payment is yearly interest, and the payers (or the circumstances) qualify, for example because the payer is a company, or the usual place of abode of the recipient is offshore, then tax must be deducted. There is no requirement to identify a source at all, in the case of statutory or other UK interest. At the most it may be said that the first group of cases can loosely be characterised as involving an examination of the source of the interest as part of the inquiry about whether the income in question was yearly interest of money. Secondly, it is artificial to regard the source of statutory interest as having anything to do with the realisation of the surplus, still less the decision of the administrators to pay it, even though the combination of those two factors may be said to have been the immediate cause of the interest becoming payable. Of course the interest may be said to derive from the surplus, in the sense of constituting the fund from which it came, but the concept of source in that literal sense had nothing whatever to do with the characterisation of the payments as yearly interest in any of the second group of cases or, for that matter, even in the first group. As for the decision of the administrators to pay, this broadly equates with the exercise of a judicial discretion, both in the equity cases and those under the 1934 Act. To the limited extent that it may be said to render the right to payment contingent, it is a much less formidable contingency than the exercise of judicial discretion. In truth the administrators have no real discretion at all. Thirdly, to the extent that it is instructive to look for a source of the statutory interest under rule 14.23, the obvious candidate is the status of the recipient as a proving creditor during the period between the commencement of the administration until payment of the principal amount by dividend. That is a statutory status created by the insolvency code laid down by the Insolvency Act and Rules, which (as we now know) replaces the creditors former contractual rights at the commencement of the administration. It precisely coincides with the period in respect of which the statutory interest is calculated and, for the reasons given above, amply fulfils the necessary quality of durability over time. Finally, if it were necessary to do so, I would regard the status of a proving creditor in a distributing administration as having the requisite character of being an investor, albeit an unwilling and involuntary one. It is no mere irony that LBIEs unsecured debt has, during that last ten years, turned out to be a very satisfactory long term investment, generating interest, payable in full, at a handsome 8%. For all those reasons, which do not differ in their essentials from those given by Patten LJ in the Court of Appeal, I would dismiss this appeal.

This appeal concerns the final stage of the administration of Lehman Brothers International (Europe) (LBIE). It became commercially insolvent due to the worldwide crash of the Lehman group. LBIE went into administration on 15 September 2008. The administration generated an unprecedented surplus in the region of 7 billion. It is estimated that about 5 billion is payable as statutory interest. All unsecured creditors have already been repaid the principal sums owed, in full, by 30 April 2014. The question on appeal is whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 (the 2016 Rules) is yearly interest within the meaning of section 874 of the Income Tax Act 2007 (the 2007 Act). If so, the administrators must deduct income tax before paying interest to creditors. In the High Court, Mr Justice Hildyard considered that statutory interest under rule 14.23(7) is not yearly interest for the purposes of the 2007 Act. This was because of the absence of any accrual of interest over time, before the surplus was identified and quantified. The Court of Appeal disagreed, allowing the appeal by the Commissioners (HMRC). It considered that interest under rule 14.23(7) is indeed yearly interest. It did not accept a requirement that yearly interest should accrue over time and considered that, because the statutory interest was compensation for the creditors, it had the required long term quality. The administrators now appeal to the Supreme Court. The Supreme Court dismisses the appeal. Lord Briggs gives the lead judgment, with which all members of the Court agree. Income tax must be deducted before payment of statutory interest to the creditors. Rule 14.23(7) of the 2016 Rules, which replaced substantially identical provisions in rule 2.88(7) of the Insolvency Rules 1986, requires a surplus after payment of proved debts in an administration to be used for payment of statutory interest [1]. Interest is paid as statutory compensation for the loss which the creditors have suffered by being kept out of their money during the administration [6]. Section 874 of the 2007 Act, which is a much more historic provision within the income tax legislation, requires a debtor to deduct income tax from payments of yearly interest arising in the UK [1, 11 15]. Historically, the income tax legislation adopted a dichotomy between the treatment of interest of any kind which is not paid out of profits or gains, on the one hand, and yearly interest, on the other hand [15]. The mandatory deduction at source of yearly interest remains in place for interest paid by companies as well as certain other categories of taxpayers, and interest paid by any person to someone whose usual place of abode is outside the UK [15]. There are two lines of English and Scottish case law that are relevant to this appeal. The first deals with whether interest which accrues over time is properly categorised as yearly interest [20]. The second is mainly concerned with interest payable as a result of a judicial decision, either when granting an equitable remedy or when exercising a discretion to award interest under statute [20]. However, statutory interest under rule 14.23(7) of the 2016 Rules does not strictly fall within either category. The answer to the question on appeal must thus be found by analogy [20]. In the first line of cases, a number of general tests for whether interest is yearly interest or not were laid down [21 29]. These were summarised by the Court of Session in Inland Revenue Comrs v Hay (1924) VIII TC 636 (the Hay tests). In summary: (1) interest payable on so called short loans is not yearly interest; (2) for interest to be yearly interest, there must be some element of permanence in the contractual arrangement under which it is payable; (3) the arrangement under which interest is payable must be in the nature of an investment; (4) the loan must not be one repayable on demand; and (5) there must be some tract of future time during which interest will continue to be payable [30]. The Hay tests remain the best convenient summary about the meaning of yearly interest in the context of interest which accrues over time [33]. In the second line of cases, the same question has been addressed in the context of interest usually payable in a single lump sum [34]. The most important case is the House of Lords decision in Riches v Westminster Bank Ltd [1947] AC 390 [36 42]. In most of these cases, interest became payable only after the event (and usually in one lump sum) upon the order of the court and it served as compensation for being deprived of money or property during a past period [34, 47 48]. Relevant examples include cases where a trustee has misused trust property and cases where the court has ordered interest to be paid on damages, such as for personal injury, until the date of judgment [34 48]. Where that period exceeds a year, interest was held to be yearly interest for income tax purposes [52]. Interest payable on a surplus in an administration is of a special type [49]. Such interest, once paid, compensates proving creditors for being kept out of their proved debts in respect of the period from the beginning of the administration until they are actually paid [49]. Consequently, the relevant analogy is to the second line of cases [47 48, 52]. This is because in both the present appeal and those cases there is no liability to pay interest during the period in respect of which it is calculated, and the interest is not itself payable over a period of time [47 48]. Moreover, in both cases, it cannot be known during the period of calculation whether interest will in fact be payable at all [47 48]. In both, the interest amounts to compensation for the recipients having been out of their money [48, 52]. There is no relevant uncertainty, because, like in the trust and personal injury cases, the taxpayer will know to which period the interest relates by the time it becomes due and thus make suitable tax deductions [54]. In the present case, the period is fixed by the date of commencement of the administration and the date (or dates) when the proving creditors are paid their debts [54]. Arguments based on the source of the relevant income conflict with the second line of cases [55 56]. Further, they are wrong in principle as: (1) the income tax deduction obligation under section 874 of the 2007 Act does not depend on whether the interest is taxable in the hands of the recipient; (2) it is artificial to regard the source of statutory interest as either the realisation of the surplus or the administrators decision to pay interest; and (3), if anything, the relevant status of the recipient is as a proving creditor between the start of the administration and payment of the principal debt [57 59]. On the present facts, the result is that the statutory interest payable is yearly interest [61]. Therefore, income tax is to be deducted at source pursuant to section 874 of the 2007 Act [61].

Both sides agree that the transactions before the Court on this appeal may give rise to taxable interest under three actual or notional loan transactions (the cautious may in the statement of facts and issues, paragraph 30, reflects the Revenues ultimate fall-back position that two of the transactions produce no debit or credit at all). The three loan transactions are as follows: (1) The actual loan transaction between the United Kingdom government and the holder of United Kingdom Government securities (gilts); (2) A loan transaction between DCC Holdings (UK) Ltd (DCC) as lender and Ulster Bank Ireland Ltd (the Bank) as borrower deemed to exist under section 730A of the Income and Corporation Taxes Act 1988 (ICTA 1988); and (3) A loan transaction between the Bank as lender and DCC as borrower deemed to exist under section 737A(5) of ICTA 1988 and section 97(2) and (4) of the Finance Act 1996 (FA 1996). Counsel on both sides put this analysis in the forefront of their written cases. The two sides have now been arguing for over six years about DCCs tax return for the relevant period (1 April 2001 to 31 March 2002), and they are now extremely familiar with the arguments. For them the arena is already well-trodden. But for those who are less familiar with the arguments it is unhelpful to be confronted at once with these three abstract relationships, two of which are statutory constructs. It is more helpful to start with the general nature of the problems which Parliament was trying to address, first in sections 730A and 737A of ICTA 1988 and then in Part IV, Chapter II of FA 1996, and the general nature of the solutions which Parliament adopted to deal with those problems. One source of taxable income is interest payable by a debtor to a creditor. Traditionally that was taxed under Schedule D, Case III under the simple rubric of interest of money, whether yearly or otherwise. The rule was that even though under the general law most interest accrues from day to day, that was not the right treatment for the purposes of Schedule D, Case III. The tax rule was (as the Special Commissioner observed in this case, echoing Rowlatt J in Leigh v Inland Revenue Commissioners [1928] 1 KB 73, 77 and Lord Hanworth MR in Dewar v Inland Revenue Commissioners [1935] 2 KB 351, 366) that receivability without receipt is nothing. Apart from anti-avoidance provisions the Revenue could not charge income tax on a holder of gilts who, by a well-timed sale just before payment of a half-yearly instalment of interest, in effect turned accrued income into a capital gain (Wigmore v Thomas Summerson & Sons Ltd [1926] 1 KB 131). Nor could a purchaser of short-dated gilts pregnant with interest escape liability to tax on the whole of the interest payment, even if he had paid an extra sum expressed to be for the accrued interest, as an aggrieved litigant in person discovered in Schaffer v Cattermole [1980] STC 650. The traditional rule opened up opportunities for tax avoidance. In Wigmore v Thomas Summerson & Sons Ltd [1926] 1 KB 131, 145, Rowlatt J observed, The result is that nobody on the super tax level, who has not more money than appreciation of income tax law, will ever buy a security that is full of dividend, because in doing so he is buying super tax; and that a man on the super tax level, if he wants to sell a security, had better sell when it is full of dividend, because then he is selling super tax. Anti-avoidance provisions were in due course enacted. They were supplemented and elaborated at frequent intervals in response to the development of increasingly sophisticated avoidance schemes, some of which were popularly called dividend stripping and bond washing. When the law of income tax and corporation tax was consolidated in ICTA 1988, Part XVII (headed Tax Avoidance) comprised 85 sections, and Part XVII, Chapter II (headed Transfers of Securities) contained 29 sections. That is the context of the first set of provisions with which this appeal is concerned, sections 730A and 737A of ICTA 1988. Those new sections were inserted into Part XVII, Chapter II by section 80(1) of the Finance Act 1995 and section 122 of the Finance Act 1994 respectively, to apply (in each case) to transactions entered into on or after 1 May 1995. (It is a little surprising that section 737A preceded section 730A in its enactment, but the former provision was initially intended to apply to section 730, a more general provision than section 730A.) It should also be mentioned in passing that section 736A, introducing Schedule 23A, was enacted by section 58 of the Finance Act 1991. I draw attention to the different provenance of these provisions because it is relevant to the resolution of this appeal to see that it depends on the construction, not of a single set of statutory rules addressed to a single problem, but to a patchwork of legislation; and its difficulty lies not only in the language of particular sections, subsections and paragraphs, but in seeing how Parliament must be taken to have intended them to operate together. I respectfully disagree with the comment of Rix LJ [2010] STC 80, para 94 that the statutory provisions were always seeking one goal. In this context, the special provisions about repos in sections 730A, 730B, 737A, 737B and 737C can be seen as making a relatively modest extension in the existing battery of anti-avoidance provisions already contained in Part XVII, Chapter II of ICTA 1988. They were also intended to make the tax treatment of repos correspond to their economic substance, so as to be more in line with modern accounting theory and practice as set out in FRS 4 and FRS 5. In legal form a repo is a preordained sale and purchase at prices fixed in advance, but in economic substance it is a short-term secured loan, as was explained in the written evidence of the only expert witness, Mr Holgate. These sections were in force in their original form for only about a year before the introduction of the new loan relationships code, for corporation tax purposes, by FA 1996. With hindsight, it might have been better if Parliament had waited a year in order to produce a more integrated legislative scheme for the tax treatment of repos. Part IV Chapter II of FA 1996 effected a fundamental change in the taxation of loan interest for the purposes of corporation tax (but not for the purposes of income tax). The changes were aimed at bringing the tax treatment of all interest onto an authorised basis of accounting (in many cases, including this case an accruals basis), and went far beyond mere counteraction of tax avoidance. They involved a new head of charge for corporation tax purposes in section 18(3A) of ICTA 1988, as inserted by section 105 of, and para 5 of Schedule 14 to, FA 1996: profits and gains which, as profits and gains arising from loan relationships, are to be treated as chargeable under this Case by virtue of Chapter II of Part IV of the Finance Act 1996. The provisions most relevant to this appeal are summarised below. But first it is necessary to give a brief account of repos and the way in which they were taxed under sections 730A and 737A of ICTA 1988. Repo transactions Mr Holgate, a chartered accountant of the highest standing, gave written and oral evidence to the Special Commissioner. He was careful to distinguish between matters of accounting theory and practice on which he could speak as an expert, and matters of statutory interpretation which were questions of law beyond his competence as an expert. In his written report dated 18 December 2006 Mr Holgate set out the basic definition of a repo in the Stock Lending and Repo Committees Gilt Repo Code of Best Practice: A transaction, carried out under an agreement, in which one party sells securities to another, and at the same time and as part of the same transaction, commits to repurchase equivalent securities on a specified future date, or at call, at a specified price. He then continued (paragraphs 4.3, 4.4 and part of 4.5): By using the term fixed price repo, I am referring to a sale and repurchase agreement, whereby one party (the seller) sells securities to another party (the buyer) for an agreed amount of cash and simultaneously agrees to repurchase the same or an identical security at a specified future date for a fixed amount of cash. Therefore, under such an arrangement, the cash flows and the timings of those cash flows are fixed in advance and hence the return under the arrangement for the repo buyer is fixed. Although legally a sale and subsequent repurchase of securities, the seller retains the risks and benefits of market price fluctuations of the securities, rather than passing them to the buyer. Hence, such arrangements are economically similar to a secured loan providing a fixed rate of return, with the security acting as collateral. FRS 5 The relevant accounting standard under UK GAAP which was in force for the year ended 31 March 2002 is FRS 5 Reporting the substance of transactions, which was issued in April 1994. The key requirement of FRS 5 is given in paragraph 14 as follows: A reporting entitys financial statements should report the substance of the transactions into which it has entered. In determining the substance of a transaction, all its aspects and implications should be identified and greater weight given to those more likely to have a commercial effect in practice. A group or series of transactions that achieves or is designed to achieve an overall commercial effect should be viewed as a whole. FRS 5 therefore tells us to account for the repo transaction in accordance with its substance, rather than its legal form, if the two do not accord. In paragraph 4.8 Mr Holgate explained (without actually using those terms) a gross paying repo and net paying repo: Under a fixed price repo, the seller has an unconditional commitment to repurchase the security from the buyer at the sale price plus interest, which represents a lenders return. Furthermore, if during the term of the repo arrangement, a coupon or dividend is paid to the buyer (as the legal holder of the security) on the underlying security, then the buyer is often obliged to immediately pass an equivalent amount of cash back to the seller. Alternatively, if, under the arrangement, the buyer is able to retain the cash coupon or dividend received under the security, then instead the repurchase price is reduced, in effect passing the benefit of the coupon or dividend back to the seller. In either case, the substance of the repo transaction will be that of a secured loan, whereby the buyer lends cash to the seller. Although the buyer has legal ownership of the security for the repo term, the seller retains all significant benefits and risks relating to the security (ie movements in market price and the benefits of any coupon or dividend payments on the security) over the term of the repo. In this case there were five separate repos, effected under a single master repurchase agreement and a master custody agreement to which The Northern Trust Co was a party. They were closely consecutive on each other, the purchase price on the second and subsequent transactions being set off against the repurchase sum receivable under the previous transaction. Each transaction involved a different issue of gilts, and in each case a half-yearly interest payment was made on the last day of the repo period (the longest period was 42 days, and the shortest 11 days). It was agreed that each of the repos would be a net paying repo. It is common ground that the transactions were arms length transactions and that DCC entered into the transactions otherwise than for the purposes of a trade carried on by it. In argument below, and in this Court, counsel have used a simplified version of the facts which aggregates the sums paid on the respective sales and repurchases under the five consecutive transactions, aggregates the half-yearly payments of interest made on the last day of each repo period, and takes an average length of that period. This process produces figures, when rounded, of 812.2m, 785.2m, 28.8m and 18 days, and it is convenient to use those figures. It will be seen that if 28.8m (the gilts interest retained by DCC) is added to 785.2m (the repurchase sum paid to DCC) it exceeds 812.2m (the sale price paid by DCC) by 1.8m. That figure of 1.8m is the only one agreed by both sides (and by the Special Commissioner and all the judges who have so far considered the matter) as an element in the tax computations. Sections 730A, 737A and 737C of ICTA 1988 Section 730A of ICTA 1988 (Treatment of price differential on sale and repurchase of securities) is the starting point in understanding the tax treatment of repos as it was in 2001-2002. Section 730A provided a self-sufficient code for the simple case in which either no coupon was paid during the repo period, or a coupon was paid and was receivable (the expression in section 737A(2)(a)) by the original owner (the expression used in section 730A(1) for Mr Holgates seller). This might occur if the gilts were throughout registered in the name of a nominee. That is the simple case because it did not involve any manufactured interest or deemed manufactured interest (explained in para 16 below). In the simple case the operative provision was section 730A(2)(a): The difference between the sale price and the repurchase price shall be treated for the purposes of the Tax Acts - (a) where the repurchase price is more than the sale price, as a payment of interest made by the repurchaser on a deemed loan from the interim holder of an amount equal to the sale price; With any gross paying repo the repurchase price would naturally be higher than the original sale price, and section 730A(2) operated, through section 730A(6) in its original form, to charge the interim holder (Mr Holgates buyer) with tax under Schedule D Case III on the difference. This corresponded to the economic reality, that the interim holder had made a secured loan, at interest, to the original owner. In less simple cases section 730A operated not as a self-sufficient code, but in conjunction with sections 737A and 737C. Parliament seems to have proceeded on the basis that when a coupon is paid during the repo period, there are three possible situations: (1) a gross paying repo under which the coupon goes to the original owner without reaching the interim holder at all (this is the simple case, already noted); (2) a gross paying repo where the coupon is received by the interim holder but is passed on, under a contractual obligation, to the original owner; and (3) a net paying repo where the coupon is paid to and retained by the interim holder. In the second of these situations the payment on by the interim holder was termed manufactured interest. In the third situation there was no actual payment on by the interim holder, but the interim holder was treated for tax purposes as making a payment on, termed deemed manufactured interest. The rationale seems to be that the original owner had made use of the accruing coupon as part of the repo bargain, since by opting for a net paying repo he could negotiate a much lower repurchase price. His turning it to account in this way was treated for tax purposes as equivalent to an actual receipt of it. The relevant statutory provisions in relation to (actual) manufactured interest were principally section 736A of, and paragraph 3 of Schedule 23A to, ICTA 1988. They are not directly relevant to this appeal. Indeed, because of paragraph 3(12) (introduced by an amendment made in the Finance Act 1997) they really do no more than explain the expression manufactured interest. The statutory provisions in relation to deemed manufactured interest, by contrast, are of central importance. They are section 737A (Sale and repurchase of securities: deemed manufactured payments), subsections (7) and (9) of section 737C (Deemed manufactured payments: further provisions) and section 730A(9). Most of section 737A needs to be set out in full: 737A Sale and repurchase of securities: deemed manufactured payments (1) This section applies where on or after the appointed day a person (the transferor) agrees to sell any securities, and under the same or any related agreement the transferor or another person connected with him (a) is required to buy back the securities, or (b) acquires an option, which he subsequently exercises, to buy back the securities; but this section does not apply unless the conditions set out in subsection (2) below are fulfilled. (2) The conditions are that (a) as a result of the transaction, a dividend which becomes payable in respect of the securities is receivable otherwise than by the transferor, (b) [repealed] (c) there is no requirement under any agreement mentioned in subsection (1) above for a person to pay to the transferor on or before the relevant date an amount representative of the dividend, and (d) it is reasonable to assume that, in arriving at the repurchase price of the securities, account was taken of the fact that the dividend is receivable otherwise than by the transferor. (3) For the purposes of subsection (2) above the relevant date is the date when the repurchase price of the securities becomes due. (5) Where this section applies, [words repealed] Schedule 23A and dividend manufacturing regulations shall apply as if (6) (a) the relevant person were required, under the arrangements for the transfer of the securities, to pay to the transferor an amount representative of the dividend mentioned in subsection (2)(a) above, (b) a payment were made by that person to the transferor in discharge of that requirement, and (c) the payment were made on the date when the repurchase price of the securities becomes due. In subsection (5) above the relevant person means (a) where subsection (1)(a) above applies, the person from whom the transferor is required to buy back the securities; Section 737C(7) and (9) provided that the repurchase price for a gilts repo was to be increased by the gross amount of the deemed manufactured interest, and for good measure section 730A(9) was to just the same effect. I have already explained the legislative purpose, as I understand it, of these provisions for deemed manufactured interest. These provisions are not easy reading (and it has to be said that they are no more than the prologue to the difficult issues that have to be decided in this appeal). It may be helpful to give some simple examples by way of recapitulation of the legislation as it stood before the coming into force of FA 1996. The examples assume a sale price of 1,000, a coupon of 35, and a repurchase price of 1,020 for a gross paying repo and 985 for a net paying repo. (1) No coupon during repo period interim holder taxed on differential of 20 as interest original owner taxed on coupon of 35 (received later) and has trading or non-trading debit of 20 (2) Gross paying repo, coupon direct to original owner interim holder taxed on differential of 20 as interest original owner taxed on coupon of 35 and has debit as above (3) Gross paying repo, interim holder receives coupon and makes representative payment-on interim holder taxed on differential of 20, coupon netted off against manufactured interest original owner taxed on coupon of 35 (as manufactured interest) and has debit as above (4) Net paying repo interim holder taxed on differential of 20 (985+35-1,000), coupon netted off against deemed manufactured interest original owner taxed on coupon of 35 (as deemed manufactured interest) and has debit as above In this way, cumbersome as it was, the provisions achieved the apparent legislative purpose of taxing every type of repo uniformly, and in line with its economic substance. The change to an accruals basis Part IV, Chapter II of FA 1996 introduced for corporation tax purposes a new statutory source of income, profits and gains from loan relationships, with concomitant changes in the computations of debits and credits, so as to put them on an authorised basis of accounting. These represented an important development in tax law. They were presented by the Revenue as a simplification that would make life easier for companies: Details of a simpler and more coherent tax regime for borrowers and lenders were announced today with the proposed repeal of a variety of complex rules for different types of bond and their replacement with a single set of rules covering all debts. This is a major deregulatory initiative which will simplify decisions for companies and lead to a substantial reduction in the amount of tax legislation on debt. That is from the Inland Revenue Budget Day release in 1996, quoted in a note on the Finance Bill in 1996 BTR 349, 356. The official claims were not groundless, but may nevertheless be regarded with some scepticism by those involved in this particular appeal. The opening sections of Chapter II are sections 80 (Taxation of loan relationships), 81 (Meaning of loan relationship etc) and 82 (Method of bringing amounts into account). They are important machinery but it is not necessary to set out the text. Section 83 (Non-trading deficit on loan relationships) is technical and it is not necessary to set it out. It is however of crucial importance to DCC, which seeks to surrender a non-trading deficit (by way of relief) against profits earned by its subsidiaries of over 28m (the precise figures of the original claim appear in form CT600 (2001) in Appendix Part IV and also at [2009] STC 77, 122). In Section 84 (Debits and credits brought into account) subsection (1) is of crucial importance to this appeal: The credits and debits to be brought into account in the case of any company in respect of its loan relationships shall be the sums which, in accordance with an authorised accounting method and when taken together, fairly represent, for the accounting period in question (a) all profits, gains and losses of the company, including those of a capital nature, which (disregarding interest and any charges or expenses) arise to the company from its loan relationships and related transactions; and (b) all interest under the companys loan relationships and all charges and expenses incurred by the company under or for the purposes of its loan relationships and related transactions. Subsection (5) defines related transaction as meaning, in relation to a loan relationship, any disposal or acquisition (in whole or in part) of rights or liabilities under that relationship. But paragraph 15 of Schedule 9 to FA 1996 makes it unnecessary, as is common ground, to consider the related transaction provisions in this case. Paragraph 13 of Schedule 9 contains an anti-avoidance provision (loan relationships for unallowable purposes) which the Revenue has not invoked in this case, partly it seems because of doubts (since removed by an amendment) as to its efficacy. Section 85 (Authorised accounting methods) provides as follows: (1) Subject to the following provisions of this Chapter, the alternative accounting methods that are authorised for the purposes of this Chapter are (a) an accruals basis of accounting; and (b) a mark to market basis of accounting under which any loan relationship to which that basis is applied is brought into account in each accounting period at a fair value. (2) An accounting method applied in any case shall be treated as authorised for the purposes of this Chapter only if (a) it conforms (subject to paragraphs (b) and (c) below) to normal accountancy practice, as followed in cases where such practice allows the use of that method; (b) it contains proper provision for allocating payments under a loan relationship to accounting periods; and (c) where it is an accruals basis of accounting, it does not contain any provision (other than provision comprised in authorised arrangements for bad debt) that gives debits by reference to the valuation at different times of any asset representing a loan relationship. Subsection (3) contains further provisions as to accruals. The accruals basis is the only permitted method for computations under section 730A of ICTA 1988, that being the effect of the new subsection (6) inserted into section 730A by section 104 of, and paragraph 37 of Schedule 14 to, FA 1996. Section 97 (Manufactured interest) must be set out (as amended by the Finance Act 1997) in full: (1) This section applies where (a) any amount (manufactured interest) is payable by or on behalf of, or to, any company under any contract or arrangements relating to the transfer of an asset representing a loan relationship; and (b) that amount is, or (when paid) will fall to be treated as, representative of interest under that relationship (the real interest). In relation to that company the manufactured interest shall be (2) treated for the purposes of this Chapter (a) as if it were interest under a loan relationship to which the company is a party; and (b) where that company is the company to which the manufactured interest is payable, as if that relationship were the one under which the real interest is payable. (3) Any question whether debits or credits falling to be brought into account in the case of any company by virtue of this section (a) are to be brought into account under section 82(2) above, or (b) are to be treated as non-trading debits or non- trading credits, shall be determined according to the extent (if any) to which the manufactured interest is paid for the purposes of a trade carried on by the company or is received in the course of activities forming an integral part of such a trade. (4) Where section 737A(5) of [ICTA 1988] (deemed manufactured payments) has effect in relation to a transaction relating to an asset representing a loan relationship so as, for the purposes of Schedule 23A to that Act, to deem there to have been a payment representative of interest under that relationship, this section shall apply as it would have applied if such a representative payment had in fact been made. The resolution of this appeal depends on the correct interpretation and inter- relation of sections 730A(2) and 737A(5) of ICTA 1988 and sections 84(1) and 97(2) and (4) of FA 1996. Argument has focused, in particular, on whether and how far the words in section 84(1) the sums which, in accordance with an authorised accounting method and when taken together, fairly represent . . . can be stretched (or need to be stretched) in order to avoid the absurd result of DCCs deemed income receipt in respect of the coupon being different from its deemed interest payment as a borrower which is party to a loan relationship under section 737A(5) of ICTA 1988 and section 97(4) of FA 1996. The absurdity of that asymmetrical result has been recognised in the Special Commissioners decision [2009] STC 77 (paras 164-166 and numerous other passages) and in the Court of Appeal [2010] STC 80, especially by Rimer LJ at para 85 (Moses LJs reasoning . . . clothes the relevant legislation with a garb of commercial sanity) and Rix LJ at para 92 (a most unfortunate, uncommercial, and no doubt unintended result). Moses LJ referred at para 69 to the deemed income flow under section 97(4) as retaining its essential function, which is to cancel out, but not to exceed, the amount which it represents. Norris J, by contrast, was scathing about the statutory drafting (para 22) and unwilling to make any presupposition about its intended effect (para 42). In my opinion the need for a symmetrical solution lies at the heart of this appeal. The need for symmetry comes from the statutory purpose of the deemed income flows provided for in the provisions of sections 730A, 737A and 737C of ICTA 1988, which I have already analysed at tedious length. They are intended to have a cancelling effect so that DCC is taxed on the repo as if it had made a secured loan at interest, and the coupon is taxed as income of the Bank, whether it reaches the Bank directly, or in the form of a representative payment, or not at all. Some sort of case can be made out for each of the three pairs of symmetrical answers: (1) credit 28.8m, debit 28.8m; (2) credit 2.9m, debit 2.9m; (3) credit nil, debit nil. The Special Commissioner (Mr Charles Hellier), in a long and closely-reasoned decision, concluded that credit nil, debit nil was the right answer. Neither side has treated this conclusion with any enthusiasm, but the Revenue have adopted it as their second and final fall-back position. Norris J reached the asymmetrical answer of credit 2.9m, debit 28.8m. Rimer LJ agreed with Norris J. Rix and Moses LJJ concluded that the correct answer was the symmetrical credit 28.8m, debit 28.8m. Mr Holgates evidence as to the accruals basis I have already summarised Mr Holgates evidence about the nature of repos and the proper accounting treatment which recognises their economic substance. I must also give a brief account of his evidence about the accruals basis. This part of his written evidence is in section 6 (My understanding of the legislative assumptions), section 7 (The exercise posed by section 84 Finance Act 1996) and section 8 (Conclusions). In section 6 he considers section 84 at some length and concludes that the expression fairly represent is, from an accounting perspective, not significantly different from giving a true and fair view. He also states his assumptions as to the effects of section 737A of ICTA 1988 and section 97 of FA 1996 (paragraph 6.18) and of section 730A of ICTA 1988 (paragraph 6.20). Paragraph 7.11 is in the following terms: Furthermore, in order to prepare financial statements that show a true and fair view of the transactions undertaken by the entity, full knowledge of the transactions and arrangements undertaken by an entity must first be understood, both from a legal and an economic perspective. Accordingly, accounting standards and GAAP are based on real, economic transactions and therefore determining the most appropriate accounting treatment without the full facts or based on transactions which do not make economic sense is difficult, if not impossible. At paragraphs 7.16 to 7.19 Mr Holgate set out his views on the issue of DCCs credit. On one view (paragraph 7.16) it should be nil, since in substance DCC never had beneficial ownership of the gilts. The alternative view (paragraphs 7.18 and 7.19) was as follows: DCC held the gilts at the coupon date and so was entitled to receive an interest payment from the government in respect of its investment. From an accounting perspective, applying the accruals basis (as defined in FRS 18 paragraph 27), it is appropriate to bring into account the interest accruing on the gilts only in respect of the period those gilts are held by DCC, ie the proportion of the interest received by DCC. This is because any other party holding the gilts before and after the term of the repo transaction would expect to be compensated by receiving the proportion of the coupon relating to their period of ownership of the gilts. Therefore under this assumption, in my opinion the sum which fairly represents the interest arising on the gilts held by DCC (ignoring any purchase and sale proceeds) is the accrued portion of the coupon for the period of the repo transaction. In accordance with an accruals basis of accounting, it could be no more; specifically, DCC could not recognise the receipt of the full interest coupon unless the gilts had been held for the full period to which the coupon relates. Coupons on gilts are typically paid every six months; accordingly, it would be appropriate to recognise as income the full amount of a coupon received only if the gilts in question had been held for the full six- month period. At paragraphs 7.22 and 7.23 Mr Holgate set out his views on the proper treatment of DCCs debit in respect of deemed manufactured interest. I have emphasised a passage which takes a preliminary view on a point of statutory construction: From an accounting perspective it is not possible to determine the debits and credits to be brought into account in respect of any deemed cash payment that fairly represent the loan relationship, unless one has more information about the transaction. For example the premium on redemption of a deeply discounted bond would be taken into account in determining the interest accruing on such a bond for an accounting period. However, without knowing the full terms of the transaction, it is not possible to determine whether the deemed interest does fairly represent the interest accruing under the loan relationship and related transactions (if any) for the accounting period. However, if there is a legislative need to determine the debits to be brought into account on an accruals basis that fairly represents the loan relationship, then I would understand the legislation may be making an assumption that the deemed interest, which is to be treated as paid by DCC under a loan relationship to which DCC is a party, was payable in respect of a period for which DCC was a party to that loan relationship. If that is the case, then, from an accounting perspective, a debit for the whole amount relating to that period should be recognised in respect of that accrued interest payable. In paragraph 8 Mr Holgate summarised his conclusions. Most relevantly for present purposes, he stated that DCCs credit should be either nil or an apportioned amount of 2.9m (paragraph 8.5) and that DCCs debit should be the whole of the deemed interest payment, or could not be determined from accounting principles, on the basis of the information given (paragraph 8.9). The judgments below I have already made some reference to the judgments below, and I do not think that it would be helpful to attempt to analyse them at length. But I would add a few more comments. I respectfully think that Norris J was wrong to criticise the Revenues case (as put by Mr Furness QC) as based on a presupposition. I would have said that it was based on a careful analysis of sections 730A, 737A and 737C, to which Norris J seems to have been at least partly receptive at para 44 of his judgment. It was not an unreasonable presupposition, but a reasonable expectation, that Parliament intended to preserve, rather than to destroy, the essentials of those provisions when enacting Part IV, Chapter II of FA 1996. As it was Norris J went along with the assumption put forward in paragraph 7.23 of the report, putting it like this (para 48): So far as the deemed manufactured interest is concerned this is treated as an interest payment made by DCC on the repurchase date. What sums under the accruals method will, when taken together fairly represent the gains or losses under this deemed loan relationship? The answer will not be found in any accounts because the transaction is entirely fictional. The answer seems to me to be 28.8m. This is the amount of the deemed interest and it cannot relate to any period other than the period for which the relationship between DCC and [the Bank] existed under which the deemed interest is deemed to be paid ie the period of the repo transaction. Rimer LJ agreed with Norris J on this point (indeed he seems to have agreed with him on all points, but reluctantly because he was more concerned about the lack of commercial sanity: para 85). Moses LJ also agreed (para 51: [t]he deemed expense incurred as a result of the deemed manufactured payments could only be incurred by DCC and thus only accrued to DCC). So did Rix LJ, although it is not clear whether his reasoning was precisely the same. It may be significant that Moses LJ disposed of this issue of DCCs debit before grappling with the issue of its credit, and he did not revisit it in the context of his observations on the cancelling function of the deemed income flows (which I regard as an important insight). I respectfully doubt Moses LJs analysis of section 84(1) as containing two criteria, one of which he required to yield to the other (para 71 Moses LJ had put down markers about these criteria in paras 13, 22 and 34). I agree with the proposition (finally, I think, adopted by both sides in argument) that the crucial words in section 84(1) must be construed as a composite whole. Statutory hypotheses As DCCs printed case notes (paragraph 34), Parliament has now swept away the statutory provisions with which the Court is concerned in this appeal. There is a new code, introduced by the Finance Act 2007 and now re-enacted as Part 6 of the Corporation Tax Act 2009. DCCs printed case suggests that one of the reasons for the new code was to get away from the almost inevitable problems arising from [statutory] fictions. It is in fact the problems raised by statutory fictions that give this appeal such general importance as it has, despite the repeal of the legislation. It is therefore appropriate to refer to some well-known authorities on that topic. In the courts below Mr Furness cited several authorities on the construction of statutes, including the decisions of the Court of Appeal (1993) 67 TC 56 and the House of Lords [1995] 1 AC 148 in Marshall v Kerr. That was a case about the effect of a deed of family arrangement varying (within two years of his death) the will of a testator who died domiciled and ordinarily resident overseas. Section 24(11) of the Finance Act 1965 provided that in such a case the earlier provisions of the section should apply as if the variations made by the deed . . . were effected by the deceased A settlement made by an overseas testators will would have had tax advantages, which the deed of variation was trying to obtain. In the Court of Appeal Peter Gibson J considered a number of authorities, including at p 76 some observations by Nourse J in Inland Revenue Comrs v Metrolands (Property Finance) Ltd [1981] 1 WLR 637, 646: When considering the extent to which a deeming provision should be applied, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to. It will not always be clear what those purposes are. If the application of the provision would lead to an unjust, anomalous or absurd result then, unless its application would clearly be within the purposes of the fiction, it should not be applied. If, on the other hand, its application would not lead to any such result then, unless that would clearly be outside the purposes of the fiction, it should be applied. Peter Gibson J (with whom Balcombe and Simon Brown LJJ agreed) then stated this principle 67 TC 56, 79 (the same passage also appears at p 92 but with five words accidentally omitted): For my part, I take the correct approach in construing a deeming provision to be to give the words used their ordinary and natural meaning, consistent so far as possible with the policy of the Act and the purposes of the provisions so far as such policy and purposes can be ascertained; but if such construction would lead to injustice or absurdity, the application of the statutory fiction should be limited to the extent needed to avoid such injustice or absurdity, unless such application would clearly be within the purposes of the fiction. I further bear in mind that, because one must treat as real that which is only deemed to be so, one must treat as real the consequences and incidents inevitably flowing from or accompanying that deemed state of affairs, unless prohibited from doing so. In the House of Lords (which reversed the Court of Appeal on a point not taken below) Lord Browne-Wilkinson approved this passage as the correct approach: [1995] 1 AC 148, 164. Neuberger J developed this reasoning in a passage in Jenks v Dickinson [1997] STC 853, 878 that I find helpful: It appears to me that the observations of Peter Gibson J, approved by Lord Browne-Wilkinson, in Marshall indicate that, when considering the extent to which one can do some violence to the words and whether one can discard the ordinary meaning, one can, indeed one should, take into account the fact that one is construing a deeming provision. This is not to say that normal principles of construction somehow cease to apply when one is concerned with interpreting a deeming provision; there is no basis in principle or authority for such a proposition. It is more that, by its very nature, a deeming provision involves artificial assumptions. It will frequently be difficult or unrealistic to expect the legislature to be able satisfactorily to [prescribe] the precise limit to the circumstances in which, or the extent to which, the artificial assumptions are to be made. Conclusions I must try to follow these principles in applying section 737A(5) of ICTA 1988 and sections 97(2) and (4) and 84(1) of FA 1996. But it may be helpful to consider a less abstract example. If a 40-something woman says to her teenage daughter, If you were my age you would see things differently, you could not be sure that the mother was referring to anything more specific than the experience or disillusionment that is supposed to come with the advance of middle age. Of course, if she added something like Because then you would have lived through the miners strike (or other words giving some real-life context) the hypothesis becomes more specific. But there would almost certainly be no contextual grounds for taking the mothers hypothesis as implying that they would no longer be seeing things as mother and daughter (as they were hypothetically the same age) or alternatively that the mother herself must have been born a generation before her actual birth. Either implication would be taking the hypothesis further than was warranted. The language of an enactment may be expected to be considered more carefully than informal family exchanges. But the hypothesis in section 737A(5), as applied by section 97, is puzzling. Under section 737A(5) DCC is to be supposed to make a payment on the last day of the repo period representative of the coupon that has accrued during that period. Section 97(4) repeats the reference to a payment representative of interest under [the gilts] relationship, and in effect applies section 97(2). It is therefore to be treated (under subsection (2)(a)) as interest under a new, hypothetical relationship (under which DCC is the debtor and the creditor is unidentified). That is all we can get from the statute. But Norris J and the Court of Appeal all seem to have supposed that the only possible conclusion, even if it made commercial nonsense, was to treat this hypothetical payment under a hypothetical relationship as accruing (in its entirety) during the repo period of 18 days (see especially Norris J at para 48 and Moses LJ at para 51, adopting Norris J). They seem to have overlooked that section 84(1) of FA 1996, as applied to deemed interest by section 730A(6)(b) of ICTA 1988, requires the uniform application of an accruals basis, and on that basis only a small part of the coupon had accrued during the repo period. Mr Holgate seems to have recognised that the result reached in the courts below was not inevitable. In paragraph 7.23 of his report he made it clear that his view was based on his understanding that the legislation may be making an assumption that the deemed interest . . . was payable in respect of a period for which DCC was a party to that loan relationship. That assumption may have been warranted, but it was unwarranted to assume that the hypothetical section 97(2)(a) loan relationship lasted no longer than the repo period. What we do get from the statute is that the payment was representative of a gilts coupon, and what we get from the real world is that that coupon accrued during a period of six months, but that DCCs interest in it, on an accruals basis, lasted (in the averaged model) for only 18 days. Mr Gardiner QC submitted that para 51 of Moses LJs judgment was a complete answer to the Revenues reliance (as its first fall-back position) on DCC being treated, under section 84(1), as having a debit of an apportioned sum of 2.9m. He submitted that this position was unacceptable because it involved 25.9m (the balance of the deemed manufactured interest) as having simply vanished into the ether. I do not see that as a convincing argument. Under section 84(1) the concern is to identify the sums, whether credits or debits, in respect of all DCCs loan relationships, actual or hypothetical, which in accordance with an authorised accounting method [the accruals basis] and when taken together, fairly represent . . . (b) all interest under the companys loan relationships If the credit from an actual relationship under which DCC is a creditor is a time- apportioned sum, the debit under a hypothetical relationship under which DCC is a debtor making a payment representative of interest must also be a time- apportioned sum, with the apportionment carried out in the same way. The language of section 84(1) is in my view amply wide enough to enable that to be done, and unless it is done, the subsections requirement of fair representation cannot be satisfied. The spare 25.9m may vanish into the ether as a hypothetical sum, but 25.9m is (or would be but for its non-residence) taxable in the hands of the Bank (see paragraphs 7.30 and 8.7 of Mr Holgates report). In short, I consider that the majority of the Court of Appeal were right to see the overwhelming need for a symmetrical solution: that is the essential statutory function of the deemed flows of income referred to in paras 69 and 71 of the judgment of Moses LJ. If the statutory wording had been such that it was impossible to argue that DCCs credit under section 84(1) was any sum other than 28.8m, I might have been able to struggle to the same conclusion as Rix and Moses LJJ, although with a good deal more difficulty than they encountered. But it seems to me that the correct answer is that on the accruals basis mandated by section 84(1) (as affected by section 730A(6)(b)), both the credit and the debit should be 2.9m the former by a simple process of time-apportionment of the coupon, the latter by a corresponding time-apportionment of DCCs notional payment representative of the coupon, so that only 18 days out of the 182 days deemed manufactured interest (very slightly more than one-tenth, producing the figure of 2.9m as an apportioned part of 28.8m) is brought into account as a debit. For these reasons I would dismiss the appeal and affirm the order of the Court of Appeal, although on different grounds.

This appeal concerns complex statutory provisions relating to corporation tax on financial transactions known as repos. These provisions have now been replaced. The general interest of the appeal lies in the approach to be taken to deeming provisions in statutes, namely those which create statutory hypotheses. A repo is a financial transaction under which shares or securities are sold at one price and are later repurchased by the seller at a different price, fixed in advance. Although in legal theory a sale and repurchase, in economic substance a repo is a secured loan by the buyer to the seller. The payment of the purchase price by buyer to seller is the advance of the loan; the shares or securities act as security for the loan; and the repurchase price is the repayment of the loan. A dividend or instalment of interest may become payable during the period of the repo. In a gross paying repo, the contract will provide for the interim holder (i.e. the buyer under the repo) to pay that dividend or interest over to the seller. Such a payment is, for tax purposes, called manufactured interest. In a net paying repo, the dividend or interest is retained by the interim holder, and the repurchase price adjusted to take account of the receipt. The Appellant (DCC) and a Bank entered into five consecutive net paying repo transactions in respect of UK government gilts. For the purposes of this case, these were treated as one composite transaction. The Bank sold gilts to DCC for 812m. During the 18 day period when DCC held the gilts, interest of 28.8m (payable half yearly) was received. The Bank repurchased the gilts for 785m. The Finance Act 1996 (the 1996 Act) made major changes in the taxation of interest for corporation tax purposes. Companies are now chargeable to corporation tax on the profits and gains from their loan relationships. In terms of section 84(1) of the 1996 Act, the credits and debits to be brought into account in respect of a companys loan relationships shall be the sums which, in accordance with an authorised accounting method, and when taken together, fairly represent . all interest under the companys loan relationships. Because of the approach of the tax legislation, the repos gave rise to three loan relationships. The question in this appeal was what debits and credits should be brought into account for DCC in respect of three loans relationships. They were: (1) the actual loan relationship between the UK government and the holder of the gilts. The payment of interest under the gilts created a credit in DCCs favour, as the holder of the gilts. (2) a deemed loan relationship between DCC (as lender) and the Bank (as borrower). Section 730A of the Income and Corporation Taxes Act 1988 (the 1988 Act) provided that the difference between the sale price and the repurchase price was to be treated as interest paid by the repurchaser (the Bank) on a deemed loan from the interim holder (DCC). This deemed payment gave rise to a credit for DCC. (3) a deemed loan relationship between the Bank (as lender) and DCC (as borrower) under which DCC was treated as making a payment of deemed manufactured interest: section 737A(5) of the 1988 Act & 97(2) & (4) of the 1996 Act. This deemed payment gave rise to a debit for DCC. The parties agreed that the second loan relationship created a credit to DCC of 1.8m (i.e. the repurchase price of 785m plus the gilt interest of 28.8m minus the purchase price of 812m.) There was no agreement as to the credit in respect of the first loan relationship (the interest on the gilts received by DCC) and the debit in respect of the third loan relationship (the payment of deemed manufactured interest deemed to have been made by DCC). The Special Commissioner and High Court reached different results. By a majority, the Court of Appeal concluded that the answer was credit 28.8m, debit 28.8m. DCC appealed to the Supreme Court. It argued that the answer was credit 2.9m; debit 28.8m, which would produce an overall debit. That would be to DCCs advantage, as it could set this against group profits to reduce the group overall tax bill. The Supreme Court unanimously dismisses the appeal, but adopts different reasoning to the Court of Appeal. It holds that the credit in respect of the interest on the gilts is 2.9m. The purpose of the deemed payment of manufactured interest by DCC being to cancel out that receipt and to allow it to be taxed as income in the hands of the Bank, the debit for that payment was also 2.9m. Lord Walker gives the judgment of the Court. Lord Walker examines the history of the tax treatment of repos. Under the regime prior to the 1996 Act, in the simple case where no gilt interest was payable during the period of the repo, the interim holder was treated as having made a loan of the sale price to the seller and was taxed on the interest he received on the loan, namely the difference between the repurchase price and the sale price. This corresponded to the economic reality of a repo. In a net paying repo, where interest was received by the interim holder during the period of the repo, the interim holder was deemed to make a payment representative of that interest to the seller: [14] [19]. There was a need for symmetry between these two payments. They were intended to cancel each other out, so that the buyer could be taxed on the repo as if it had made a secured loan at interest, and also to allow the gilts interest to be taxed as income of the seller: [26]. The 1996 Act effected a major change in the taxation of loan interest for corporation tax. Interest was to be computed in accordance with an authorised accounting method, in this case an accruals basis: [7], [23]. It was reasonable to expect that, when effecting this change, Parliament intended to preserve rather than to destroy the essentials of the existing provisions: [33]. Applying an accruals basis of accounting, DCCs credit in respect of interest on the gilts was 2.9m: the total payment of 28.8m accrued over a 6 month period, and DCC held the gilts for only 18 days: [30], [32], [44]. DCC submitted that applying an accruals basis of accounting to the deemed third loan relationship, the appropriate debit was 28.8m. No other result was possible, because it would mean that the balance of that payment vanished into the ether. Lord Walker emphasises that it is important when interpreting a deeming provision not to take the hypothesis further than is warranted: [40]. The payment which section 737A(5) of the 1988 Act deems DCC to make is said to be representative of the interest on the gilts received during the repo period. Section 97(2)(a) of the 1996 Act provides that this deemed payment is to be treated as interest paid under a hypothetical loan relationship. It was unwarranted to assume that this hypothetical loan relationship lasted no longer than the repo period, so that the entire payment needed to be treated as accruing during the 18 days during which DCC held the gilts. The interest on the gilts accrued during a period of six months but DCCs interest in the gilts lasted only 18 days: [42]. Its receipt of interest was therefore apportioned. The debit under a hypothetical relationship under which DCC was making a payment representative of that interest should also be a time apportioned sum, with the apportionment carried out in the same way: [43].

On 3 December 1973, the appellant, Martin Corey, was convicted of the murder of two police officers. He was sentenced to life imprisonment. He remained in prison until 26 June 1992 when the Secretary of State for Northern Ireland released him on licence, pursuant to section 23(1) of the Prison Act (Northern Ireland) 1953. Following his release in 1992 the appellant remained at liberty for almost 18 years. On 13 April 2010 the Secretary of State wrote to the parole commissioners referring Mr Coreys case to them under article 9(1) of the Life Sentences (Northern Ireland) Order 2001 (SI 2001/2564 (NI 2)) and seeking a recommendation on whether the licence on which appellant had been released should be revoked. Article 9(1) provides that, if recommended to do so by the commissioners, in the case of a life prisoner who has been released on licence, the Secretary of State may revoke his licence and recall him to prison. On 14 April 2010, a single commissioner recommended that the licence of Mr Corey should be revoked. That recommendation was based on material which had been supplied by the Secretary of State. The material included a confidential file containing intelligence information which had been provided by the security services. After that recommendation had been received, a minister of state, acting on behalf of the Secretary of State, revoked the appellants licence on 15 April 2010. Mr Corey was taken into custody again on 16 April 2010 and has remained in prison since then. By virtue of article 9(4) of the 2001 Order, a prisoner recalled to prison must have his case referred to the parole commissioners. After he had been recalled to prison, therefore, Mr Coreys case was duly referred. Initially it was considered by a single commissioner. She gave provisional directions under the Parole Commissioners Rules (Northern Ireland) 2009 (SRNI 2009/82). Part of the material which had been supplied to the commissioners in April 2010 had been certified as confidential information under rule 9(1) of the 2009 Rules. And rule 9(3) requires that a gist of such information should be served on the commissioners and the prisoner. On 7 June 2010 the Secretary of State provided a dossier of material in relation to Mr Coreys case. In compliance with rule 9(3) it was accompanied by a statement of evidence which set out the gist of the confidential information. This was considered by the single commissioner. She also examined the confidential material itself. She recommended, pursuant to rule 19, that the Advocate General for Northern Ireland should appoint a special advocate to represent Mr Coreys interests. The commissioner also recommended that the appellants case should be dealt with by a panel of commissioners, rather than by a single commissioner considering it alone. A panel was duly convened. On 9 November 2010, following a directions hearing, the chairman of the panel ordered that a statement of all open and closed material relevant to the case, including the product of any exculpatory matter that undermined the Secretary of State's case, should be served on the panel and the special advocate. It was ordered that a similar statement in respect of the open material be served on the prisoner's representatives. They were not to receive the closed material, of course. A closed hearing took place on 25 January 2011 to consider the material which had been served on the panel and the special advocate. The panel heard submissions on behalf of the Secretary of State. The special advocate also made representations to the panel about the adequacy of the disclosure of the closed material. The commissioners gave a ruling on these submissions on 7 February 2011. Hearings before the panel were then conducted into Mr Coreys case. These took place between 29 and 31 March and 23/24 May 2011. Open and closed evidence was received. Counsel appeared for Mr Corey and the Secretary of State at the open hearings. The special advocate represented the appellants interests during closed hearings. On 15 August 2011 the panel gave its decision. This comprised both a closed and an open judgment. In a detailed ruling which formed part of the open judgment, the panel stated that it was satisfied that Mr Corey had become involved in the Continuity Irish Republican Army from early 2005 and that he was in a position of leadership in that organisation from 2008 until his recall to prison. It was concluded that the appellant posed a risk of serious harm to the public at the time of his recall. Under article 6(4) of the 2001 Order the commissioners are forbidden to direct that a life prisoner be released unless they are satisfied that it is no longer necessary for the protection of the public from serious harm that the prisoner should be confined. Since the commissioners were not so satisfied in relation to Mr Corey, they refused to direct his release. The appellant sought judicial review of the commissioners decision on the grounds (among others) that inadequate material had been disclosed in the gist and that the refusal to direct his release had been based solely or to a decisive degree on the closed material and was, on that account, in breach of Mr Coreys rights under article 5(4) of the European Convention for the Protection of Human Rights and Fundamental Freedoms. The Secretary of State was a notice party to the application for judicial review. In a judgment delivered on 9 July 2012, Treacy J held that the commissioners decision was indeed based solely or decisively on the closed material. He further found that the allegations contained in the open material were not sufficiently specific to enable the appellant to provide his lawyers and the special advocate with information to refute them. The hearing which the commissioners had conducted into the appellants case constituted, on that account, a breach of the appellants right to procedural fairness under article 5(4) of the Convention. Instead of quashing the decision of the commissioners, however, Treacy J decided, pursuant to section 21 of the Judicature (Northern Ireland) Act 1978, to remit the matter to them with a direction that they reconsider the case and reach a decision in accordance with his ruling. The judge also decided to admit the appellant to bail pending reconsideration of his case by the parole commissioners. The Secretary of State immediately applied for a stay of Treacy Js order and within a short time thereafter lodged an appeal against the judges decision. Although the commissioners also lodged an appeal, this was not pursued and they participated as a notice party in the appeal proceedings brought by the Secretary of State. The Court of Appeal convened an early hearing to consider that part of the judges order by which he had directed the appellants release. On 11 July 2012 it decided that the judge did not have power to grant bail. The Court of Appeal therefore stayed enforcement of that part of Treacy Js order which had admitted the appellant to bail. Delivering the judgment of the court, Morgan LCJ said that the determining issue was whether there had been a break between the sentence [of life imprisonment] and the continued detention of the [appellant] (para 8). Since there was no such break, the judge did not have power to grant bail. An application for permission to appeal the decision of the Court of Appeal on the question of the High Courts jurisdiction to grant bail was lodged with this court on 27 September 2012. Permission to appeal was granted on 13 December 2012. In the meantime, the appeal by the Secretary of State against that part of Treacy Js decision in relation to the breach of article 5(4) (which had been deferred in July 2012) was heard by the Court of Appeal on 26 October and 26 November 2012. In a judgment delivered on 21 December 2012 the appeal was allowed: [2012] NICA 57. The Court of Appeal concluded that the material provided to the appellant and his advisers was sufficient to allow him to give effective instructions to those representing him. There was therefore no breach of article 5(4) of the Convention. Application was made to this court for permission to appeal the Court of Appeals decision on the issue of breach of article 5(4). That application was refused. In these circumstances, the appellants appeal on the question whether the High Court had an inherent jurisdiction to grant him bail or otherwise order his interim release is, strictly speaking, academic. Because of the importance of the issue, however, this court considered that the appellants appeal on this question should be allowed to proceed. The appellants arguments Ms Quinlivan QC made three principal arguments on behalf of the appellant. Firstly, she submitted that, when determining a judicial review challenge to the commissioners refusal to release a recalled prisoner, the High Court had power to order the discharge of the prisoner as part of its inherent jurisdiction. Secondly, she argued that the Human Rights Act 1998 afforded an applicant whose Convention rights were found to have been violated the right to an effective remedy. Where breach of the appellants article 5(4) rights had occurred, the effective remedy for that breach must include entitlement to be admitted to bail. Finally, she contended that the continued detention of the appellant some two years and three months after revocation of his licence, without there having been an article 5(4) compliant hearing at which the legal propriety of his detention was reviewed, amounted to a breach of article 5(1) of the Convention; alternatively, his continued detention was arbitrary. In either event, the High Court had power to direct that the appellant should be released. The third and final of these arguments had not been addressed to Treacy J. Nor had it been at least in the terms in which it is now made advanced to the Court of Appeal. Article 5(1) of the Convention, in its material part, provides that Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (a) the lawful detention of a person after conviction by a competent court For the first time before this court, Ms Quinlivan sought to argue that the delay in holding an article 5(4) compliant inquiry into the appellants detention had rendered that detention unlawful. The inherent jurisdiction of the High Court of Northern Ireland The Supreme Court of Judicature Act (Ireland) 1877 (40 & 41 Vict c 57) replaced the existing court structure in Ireland. It created a Supreme Court of Judicature which comprised a High Court of Justice and a Court of Appeal. The 1877 Act replicated the reform of the courts of England and Wales under the Judicature Acts of 1873 and 1875. As in England and Wales, the High Court in Ireland inherited the same inherent jurisdiction as had been enjoyed by the pre 1877 superior courts of common law and equity. The Government of Ireland Act 1920 abolished the Supreme Court of Judicature which had been created by the 1877 Act. Separate High Courts for Northern Ireland and the remainder of the island of Ireland (later to become the Republic of Ireland) were brought into existence. They continued to function in much the same way as previously but as separate entities. In Northern Ireland a new Supreme Court of Judicature was created by the Judicature (Northern Ireland) Act 1978. Under this Act, the basic court structure remained largely unchanged. In particular, the general jurisdiction of the High Court was preserved. Section 16(2)(a) provided that all such jurisdiction as was capable of being exercised previously by the High Court of Justice in Northern Ireland would continue to be exercisable. There can be no doubt, therefore, that the Northern Ireland High Court has an inherent jurisdiction. The nature of inherent jurisdiction Sir Jack Jacob in his authoritative work, The inherent jurisdiction of the Court [1970] CLP 23, 25 27 has said that the historical development of inherent jurisdiction has proceeded along two paths, firstly by way of punishment for contempt of court and secondly as a means of regulating the practice of the court and preventing abuse of its process. On the latter aspect, Sir Jack said that the essential character of a superior court of law necessarily involves that it should be invested with a power to maintain its authority and to prevent its process being obstructed and abused. The power to control the courts proceedings and process has a number of aspects: the regulation of proceedings; dealing with abuse of process; and compelling observance of the courts orders and directions. Ultimately, however, these are geared to the same aim viz ensuring the effective delivery and enforcement of the courts decisions. Approached in that way, the issue in the present case can be expressed thus: Is it necessary for the effective disposal of the appellants claim that the court should have power to order his release pending reconsideration of his case by the commissioners? The fact that the release of life sentence prisoners is governed by the 2001 Order does not, per se, inhibit the exercise of an inherent jurisdiction. As Sir Jack Jacob put it, at p 24, the court may exercise its inherent jurisdiction even in respect of matters which are regulated by statute. But he added an important rider. Recourse to an inherent jurisdiction, he said, must not contravene any statutory provision. One may go further, however. Using an inherent jurisdiction in a way that runs counter to the purpose or spirit of legislation is not permissible. The present case exemplifies the point. It could not be right to purport to exercise an inherent jurisdiction in a way that would undermine the intended operation of the statute. And therefore to direct the release of a recalled prisoner where the statutory safeguards surrounding a decision to restore liberty to such a prisoner are not in place could not be justified by invoking the inherent jurisdiction. Did the High Court have inherent jurisdiction to grant bail in this instance? The gravamen of the appellants case on this question was that the common law in relation to inherent jurisdiction is both flexible and versatile. It can and should respond to changing needs and circumstances. Although it was primarily a means of controlling procedure, it should be adapted to meet the requirement of ensuring that the courts decision is fully effective. This argument has as its corollary the claim that, to be effective, the remedy for the breach of a recalled prisoners article 5(4) rights must include the opportunity to seek from the court his release from prison in vindication of the right. Article 5(4) provides: Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. It is important to recall that in the present case, the lawfulness of the appellants detention on foot of his recall to prison was not directly in issue in the judicial review proceedings before Treacy J. The focus of the appellants challenge was to the commissioners failure to direct his immediate release and the manner in which their determination was made. The appellants had not made a substantive challenge to the lawfulness of his detention under article 5(1) of the Convention. As the judge said in para 58 of his judgment: This court is concerned only with the fairness of the determination and the process used to come to it (emphasis added) The decision to grant bail in the present case was not founded, therefore, on the conclusion that the appellants detention was unlawful. The judge did not address that issue. He based his decision on the manner in which the commissioners review of the appellants case had been conducted. The claim that the court had inherent jurisdiction to order his release must be viewed against that backdrop. The same applies to the claim that the finding of a breach of article 5(4), to be practical and effective, required that the court should be able to order the appellants release. Put shortly, the critical question is whether it was necessary that, in order to give meaningful and realistic effect to the finding that the review into the appellants detention had not been conducted lawfully, the court should have power to order the appellants release. In my view it is clear that the judges decision did not require that underpinning. His order that the review of the appellants detention had not been conducted lawfully and that it should be reconsidered was, on its own terms, a full vindication of the right which the appellant had asserted. On that ground alone, I consider that the judge did not have power to order the appellants release. That conclusion makes it unnecessary to deal with the submission made on behalf of the appellant that the decision in Ex parte Blyth [1944] KB 532, that the High Court did not have jurisdiction to grant bail post conviction, should not be followed. Ms Quinlivan had relied on the decisions in R v Secretary of State for Home Department, Ex p Turkoglu [1998] QB 398 and R (Sezek) v Secretary of State for the Home Department [2002] 1 WLR 348 in support of the claim that a more expansive approach to the scope of inherent jurisdiction was warranted. In Turkoglu the applicant had been granted bail by a High Court judge when he was given leave to apply for judicial review of the decision refusing him leave to enter the United Kingdom. His application for judicial review was subsequently dismissed and the judge, considering that he had no further jurisdiction in the matter, refused bail pending an appeal. On his appeal against the refusal of bail it was held that, unless there was statutory provision or judicial precedent to the contrary, the High Court seized of a civil matter had jurisdiction to grant bail. In Sezek the applicant, a Turkish national, had been granted indefinite leave to remain in the United Kingdom but his subsequent application for British citizenship had been refused for failing to declare previous criminal convictions. A deportation order was made in April 1999 which included authorisation for his detention. He applied for judicial review of that decision which was dismissed. He appealed the dismissal and applied to the Court of Appeal for bail pending the hearing of his appeal. It was held that the High Court had power in judicial review proceedings to make an ancillary order temporarily releasing on bail an applicant detained pursuant to the Immigration Act 1971. The Court of Appeal, it was decided, also had power to order the appellants release by virtue of section 15(3) of the Supreme Court Act 1981 but, in that instance, the court was exercising an original jurisdiction. These cases, Ms Quinlivan argued, illustrated the versatility of the law and its responsiveness to the requirements of the liberty of the individual. A similar approach was, she suggested, appropriate in this case. It should be noted, firstly, that in both Turkoglu and Sezek it was accepted by the Secretary of State that the relevant courts had power to grant bail. It should also be remembered that in Sezek the Court of Appeal considered that it was by recourse to an original, as opposed to inherent, jurisdiction, that the grant of bail might be made. All that aside, the principal difficulty with Ms Quinlivans argument is that in both cases the applicants were asserting their right to liberty. If their claims were upheld, they were entitled not to be detained, whereas what Mr Corey claims is the right to have his valid recall to prison reviewed in a way that is compliant with article 5(4) of the Convention. A power to grant bail ancillary to the declaration that the appellant was entitled to that particular form of relief was not only unnecessary in order to make the grant of relief practical and effective, it was unrelated to it. Quite apart from the inaptness of recourse to an inherent jurisdiction for the purpose of making the judges order practically and meaningfully effective, to recognise an inherent jurisdiction to order release in the circumstances of this case would run directly counter to the operation of the 2001 Order. One of the principal philosophies underlying the Order is expressed in article 6(4) which provides: The Commissioners shall not give a direction [that the prisoner should be released] unless (a) (b) the Commissioners are satisfied that it is no longer necessary for the protection of the public from serious harm that the prisoner should be confined. That philosophy has received the endorsement of the court in Strasbourg. In Stafford v United Kingdom (2002) 35 EHRR 1121, para 80 the European Court of Human Rights said Once the punishment element of the sentence (as reflected in the tariff) has been satisfied, the grounds for the continued detention, as in discretionary life and juvenile murderer cases, must be considerations of risk and dangerousness . A statement to like effect is to be found in the later case of von Blow v United Kingdom (2004) 39 EHRR 16, para 43. As Mr Simpson QC for the Secretary of State reminded us, the 2001 Order prominently required, in article 3(2), that a miscellany of experts drawn from a variety of fields be appointed to be life sentence commissioners (the predecessors of parole commissioners). That requirement was replicated in later legislation. Under paragraph 1 of Schedule 4 to the Criminal Justice (Northern Ireland) Order 2008 (SI 2008/1216) the Secretary of State is enjoined to ensure that at least one of the commissioners is a person who holds or has held judicial office; one must be a medical practitioner who is a psychiatrist; one a chartered psychologist; one who has experience of working with victims of crime; and one who has made a study of the causes of delinquency or the treatment of offenders. This requirement reflects the need to have available a range of specialists who can contribute to what must often be a difficult debate as to whether the rigorous test set out in article 6(4)(b) is satisfied. It would be inconsistent with the protection of the public (which is such a central feature of the legislation) that a judge should order the release of a life sentence prisoner by reason only of a failure to conduct an article 5(4) compliant review, where the intense examination, contemplated by article 6(4)(b), of whether his detention is no longer necessary has not taken place. Put simply, the legislature has placed in the hands of a panel of experts the difficult decision as to when a life sentence prisoner should be released. Their role should not be supplanted by a judge who does not have access to the range of information and skills available to the commissioners. In this connection it should be noted that Ms Quinlivan sensibly accepted that, even if the High Court had inherent jurisdiction to release a life sentence prisoner on bail, it should not do so unless satisfied that he would pose no risk of serious harm to the public. The hearing before the Court of Appeal It appears that the case for the appellant in the Court of Appeal took a distinctly different turn from that which had been presented to Treacy J. In para 5 of his ex tempore judgment delivered on 11 July 2012, Morgan LCJ observed that the court had been referred to extensive authorities in relation to the lawfulness of the detention of the [appellant]. So far as one can tell from the understandably brief judgment, the focus seems no longer to have been on whether there had been a review of the appellants detention that was compliant with article 5(4) of the Convention but on whether his detention had become unlawful because of a break between the sentence and the continued detention (para 8). In deciding that there was no such break the Court of Appeal considered the decision of the House of Lords in R (James) v Secretary of State for Justice (reported as R (Walker) v Secretary of State for Justice (Parole Board intervening) [2010] 1AC 553). That case was concerned with indeterminate sentences for public protection (IPP) which had been introduced by section 225 of the Criminal Justice Act 2003. Such sentences comprise a tariff period (which must be served before the prisoner is considered for release by the Parole Board) and a post tariff period which ends when the Parole Board concludes that it would no longer be dangerous for the prisoner to be released. There had been a systemic failure to provide courses for the prisoners in the James case. It was argued that, if they had completed such courses successfully, they could have demonstrated to the Parole Board their suitability for release. Among other claims, the appellants asserted that they were, in consequence, unlawfully detained under article 5(1) of the Convention. It was unanimously held that the absence of material to enable the Parole Board to form a view as to the safety of the appellants release did not make their detention unlawful. Relying on the decision of the Strasbourg court in Weeks v United Kingdom (1987) 10 EHRR 293 para 42, the House of Lords held that, for a prisoners detention to be justified under article 5(1), there had to be sufficient causal connection between his conviction and the deprivation of liberty: [2010] 1AC 553, para 38. Such a link, the House held, might be broken by a prolonged failure to enable the prisoner to demonstrate that he was safe for release but the delay in the appellants case was not such as to give rise to a breach of article 5(1). This was the burden of the two principal opinions given by Lord Brown of Eaton under Heywood and Lord Judge CJ. In para 42, Lord Brown considered whether the objectives of an IPP included not only the continued detention of the prisoner until he could be safely released but also his reform and rehabilitation. At para 49 he said that the IPP legislation went no further than providing the government with the opportunity to introduce treatment courses but the provision of rehabilitative treatment necessary to obviate the risk was not among the specific legislative objectives. If it was not possible to assess the prisoners dangerousness because he had been unable to undertake courses which might demonstrate that he no longer posed a risk to the public detention beyond the tariff period is justified because the sentencing court decided that the prisoner would continue to be dangerous at the expiry of the punitive element of the sentence; the necessary predictive judgment will have been made. (para 50) Lord Judge was also of the view that the purposes of the 2003 Act did not include the rehabilitation of prisoners (see para 126). He expressed the same opinion as Lord Brown as to the enduring effect of the decision on dangerousness made by the trial judge at the time of sentencing. At para 103 he said: As the court is required to make an informed predictive assessment at the date of sentence, and the justification for detention beyond the tariff period is found in the judgment of the court that an IPP is indeed necessary, I respectfully disagree with the views expressed by Laws LJ in the Divisional Court in R (Wells) v Parole Board [2008] 1 All ER 138, para 46 that what he described as further detention after the expiry of the tariff period was not at all justified by or at the time of sentence, for the very reason that the extent to which, or the time for which, the prisoner will remain a danger is unknown at the time of sentence . The justification for detention during the tariff period is of course spent; it is spent the moment the tariff expires. For the same reasons I am unable to accept the observations of Moses LJ in R (Lee) v Secretary of State for Justice in the Administrative Court [2008] EWHC 2326, para 22, no doubt reflecting the earlier judgment of Laws LJ, that the position of a prisoner whose level of dangerousness cannot be ascertained is the same as one who ceases to be a danger. The original justification for the sentence, namely his dangerousness, has ceased to exist. In my judgment detention beyond the tariff period is justified just because the sentencing court has decided that the prisoner would continue to be dangerous at the expiry of the punitive element of the sentence. The necessary predictive judgment will have been made. On one view the opinions of Lord Brown and Lord Judge as expressed in these passages suggest that the judgment, made at the time of sentencing that an IPP was required in order to protect the public, was not to be dislodged and remained fully effective until displaced by positive evidence, accepted by the Parole Board, that this was no longer the position. On that view, the circumstance that courses (which were the only means by which the prisoner might demonstrate his lack of dangerousness) had not been provided was neither here nor there. A softening of such a rigid stance can be detected, however, in other passages from the speeches of Lord Hope of Craighead, Lord Brown and Lord Judge. At para 51 Lord Brown said this: In my opinion, the only possible basis upon which article 5(1) could ever be breached in these cases is that contemplated by the Court of Appeal [2008] 1 WLR 1977, paras 61, 69 of their judgment namely after a very lengthy period without an effective review of the case. The possibility of an article 5(1) breach on this basis is not, I think, inconsistent with anything I said either in R (Noorkoiv) v Secretary of State for the Home Department [2002] 1 WLR 3284 or in R (Cawser) v Secretary of State for the Home Department [2004] UKHRR 101. Cawser, it is important to appreciate, was a case all about treating the prisoner to reduce his dangerousness, rather than merely enabling him to demonstrate his safety for release. To my mind, however, before the causal link could be adjudged broken, the Parole Board would have to have been unable to form any view of dangerousness for a period of years rather than months. It should not, after all, be forgotten that the Act itself provides for two year intervals between references to the Parole Board. And at para 15 Lord Hope had said this: It is just possible to conceive of circumstances where the system which the statutes have laid down breaks down entirely, with the result that the Parole Board is unable to perform its function at all. In that situation continued detention could be said to be arbitrary because there was no way in which it could be brought to an end in the manner that the original sentence contemplated. At para 128 Lord Judge echoed the remarks of Lord Brown quoted at para 40 above when he said: I should perhaps add that, like Lord Brown, I should not exclude the possibility of an article 5(1) challenge in the case of a prisoner sentenced to IPP and allowed to languish in prison for years without receiving any of the attention which both the policy and the relevant rules, and ultimately common humanity, require. James v United Kingdom When the Court of Appeal gave judgment in the present case, the House of Lords decision in James was the most recent judicial pronouncement on whether a failure to provide courses by which prisoners might demonstrate their suitability for release could give rise to a breach of article 5(1). Two months after the Court of Appeal ruling, the European Court of Human Rights (ECtHR) handed down its judgment in James v United Kingdom (2012) 56 EHRR 399. The court did not agree with the finding of the House of Lords that the purposes of the 2003 Act did not include the rehabilitation of prisoners. At para 209 of its judgment the court said: The court is satisfied that in cases concerning indeterminate sentences of imprisonment for the protection of the public, a real opportunity for rehabilitation is a necessary element of any part of the detention which is to be justified solely by reference to public protection. In the case of the IPP sentence, it is in any event clear that the legislation was premised on the understanding that rehabilitative treatment would be made available to those prisoners on whom an IPP sentence was imposed, even if this was not an express objective of the legislation itself. Indeed, this premise formed the basis upon which a breach of the Secretary of State's public law duty was found and confirmed (see paras 31, 104 and 107 above).The court accordingly agrees with the applicants that one of the purposes of their detention was their rehabilitation. Since the applicants in James did not have the opportunity to embark on rehabilitative courses, successful completion of which was indispensable to their establishing their suitability for release, their continued detention was found to be arbitrary. Significantly at para 221 the court said this: following the expiry of the applicants' tariff periods and until steps were taken to progress them through the prison system with a view to providing them with access to appropriate rehabilitative courses their detention was arbitrary and therefore unlawful within the meaning of article 5(1)1 of the Convention. The arbitrariness (and, on that account, the unlawful nature) of the continued detention stemmed from their detention while the means of bringing it to an end remained elusive for the prisoners. This was not directly related to the question of the causal link between the detention and the original sentence, however. The causal link survived. The sentence was imposed because of the perception that the prisoners posed a threat to the public if released. (The perception was grounded, at least to a certain extent, on a presumption built into the statute but it is unnecessary for present purposes to go into that). Until the risk of danger to the public could be dispelled the causal link with that part of the sentence which required the detention of the prisoner remained intact. It was because there was no means of ascertaining whether the danger had dissipated that the detention had become arbitrary. Logically, therefore, so soon as a means of assessing the risk of danger to the public became available through the courses which the prisoner was able to undertake, in order to demonstrate that he no longer constituted such a danger, the detention was no longer to be regarded as arbitrary. Thus, the court said in para 221 that until steps were taken to progress [the prisoners] through the prison system (emphasis added) with a view to enabling them to undertake courses that would reduce or eliminate the danger that they presented and until, thereby, they were able to demonstrate their suitability for release, their detention remained arbitrary. When the necessary steps were taken, detention which had until then been arbitrary, was no longer so. This analysis stands apart from the question of the causal link between the original sentence and the reasons for continued detention. The original sentence is premised on the existence of a danger to the public which must be extinguished before release is to be ordered. Until that extinguishment can be demonstrated, the reasons for the original sentence (and therefore the causal link) endure. But if one deprives the prisoner of the opportunity to show that the danger no longer obtains the detention is arbitrary, not because the causal link does not continue, but because the prisoner cannot show that the risk on which it is founded is no longer present. The lawfulness of the appellants detention is not to be approached, therefore, solely in terms of whether the causal link between his original sentence and his current detention has been broken. The essential question is whether he has had an opportunity to demonstrate that the reasons that he was considered to present a threat to society no longer apply. If he does not have such an opportunity, then clearly, on the authority of James v United Kingdom, his continued detention is arbitrary. Whether it follows that he must, therefore, be released is an altogether different question. In the present case it is clear that the appellant did indeed have an opportunity to show that he no longer posed a risk to the public. The Court of Appeals judgment dismissing his claim that the review of his detention was not compliant with article 5(4) disposes conclusively of that issue. He has had what has been found to be a fully ample chance to show that he can be safely released. There is, therefore, no question of his continued detention being arbitrary. Moreover, the review of the panels decision, foreshadowed in their ruling, is already under way and we were informed in the course of the hearing that this is likely to be completed soon. The more problematic, although, in terms of this case, academic, question is whether, if it is shown that a prisoner has not had a chance to demonstrate that his continued detention is no longer necessary and if, for that reason, that detention constitutes a violation of article 5(1) and he is therefore unlawfully detained, he must be released. In James v United Kingdom the ECtHR found that a detention which was arbitrary and unlawful could be restored to a condition of lawfulness by making accessible the courses whose unavailability were the cause of the arbitrary and unlawful detention. What is not completely clear from the judgment is whether, during the period that the detention was unlawful, the prisoners were entitled to be released. Observations made in para 217 of the courts judgment are somewhat ambiguous on the question whether release is the automatic consequence of a finding of violation of article 5(1): The court acknowledges that the IPP sentence was intended to keep in detention those perceived to be dangerous until they could show that they were no longer dangerous. The Government have suggested that, in these circumstances, a finding of a violation of article 5(1) as a result of the lack of access to appropriate treatment courses would allow the release of dangerous offenders who had not yet addressed their risk factors. The court accepts that where an indeterminate sentence has been imposed on an individual who was considered by the sentencing court to pose a significant risk to the public at large, it would be regrettable if his release were ordered before that risk could be reduced to a safe level. It is not immediately obvious whether the court was there indicating that such a regrettable eventuality should be avoided or that the outcome, although unwelcome, was inescapable. Since there was no violation of article 5(1) in this case and it is therefore unnecessary to reach a final conclusion on it, I would prefer to leave the decision on this vexed question for a future occasion when the issue arises directly. I would dismiss the appeal. I agree that this appeal must be dismissed for the reasons given by Lord LORD MANCE (with whom Lord Clarke, Lord Hughes and Lord Toulson agree) I add some words on the decision of the Fourth Section of the European Court of Human Rights in James v United Kingdom (2012) 56 EHRR 399, which, as Lord Kerr remarks, leaves at least one question problematic. On a straightforward reading of the European Convention on Human Rights, article 5(1) establishes the right to liberty and addresses the circumstances in which a person may be deprived of liberty, while article 5(4) provides that anyone deprived of his liberty has the right to speedy access to court and to a decision whether such deprivation was in circumstances permitted under article 5(1). James, like the present case, concerned prisoners whose detention was justified by the authorities on the ground that it constituted the lawful detention of a person after conviction by a competent court within article 5(1)(a). But, after the expiry of their tariff period, their continued detention also depended under domestic law upon whether or not they could satisfy the Parole Board that such detention was no longer necessary for the protection of the public. In the absence of appropriate available courses, they could not hope to satisfy the Parole Board of this. Nonetheless, under the relevant domestic law, the result was on the face of it that they remained lawfully detained under the original court sentence. Equally, nothing was stopping them going to court to test the validity of their detention, but it would not on the face of it have done them any good to do so. What they could and did in James do was seek by judicial review orders that they be provided with the courses that they needed. The House of Lords in James [2010] 1 AC 553 (sub nom R (Walker) v Secretary of State for Justice (Parole Board intervening)) recognised that prisoners in this invidious position had a public law entitlement to such orders by way of judicial review, but held that they had no complaint by reference to the Human Rights Convention rights. The European Court of Human Rights in finding that the circumstances also constituted a cause of complaint under the Convention had to locate the violation somewhere in the Convention. It located it in article 5(1): see paras 221 and 231 and holding (3). It did so on the basis that the detention was arbitrary and therefore unlawful under article 5(1) during the relevant periods of delay that is, during the periods after expiry of the relevant tariffs and before steps were taken to progress the prisoners through the system by moving them to first stage prisons where courses would be available, and also, in the case of Lee, during a subsequent period when he was still not offered any course: para 231. Two further issues were raised before the Court of Human Rights in James, under respectively articles 5(4) and 13. Under article 5(4), all three applicants complained that, because there had been no meaningful review of the legality of [the prisoners] post tariff detention as a result of the failure to operate a system [of courses] properly, there had been a violation of article 5(4): para 223. The court held that the complaint under article 5(4) gave rise to no separate issue, and said that it followed that it could not make any award in respect of the alleged violation of article 5(4): paras 226 and 243. It is not clear to me whether or not that means that the court thought that article 5(4) had been breached. The second further issue was raised under article 13 by Mr Wells and Mr Lee, but the court regarded article 5(4) as a lex specialis in relation to the more general requirements of article 13, and so dealt with this issue also under article 5(4): para 229. The complaint was that the obstacle under primary legislation to the prisoners release until they satisfied the Parole Board that they were no longer a public danger meant that, even if they had succeeded in their challenge to their detention, they would not have had any effective remedy in respect of the violation: para 224. In dealing with this, the court noted that Mr Wells and Mr Lee had been able to commence judicial review proceedings to obtain orders that they be provided with the relevant courses and that their commencement of such proceedings had led to their speedy transfer to first stage prisons for that purpose. Accordingly, they had failed to establish that the combination of the Parole Board and judicial review proceedings could not have resulted in an order for their release and, so, there had been no violation in this regard: para 232. This reasoning does not explicitly address the further five month delay in actually providing courses which Mr Lee suffered. But the underlying thinking may again be that Mr Lee could have commenced further judicial review proceedings which, in combination with the Parole Boards power to release once satisfied that he no longer presented a public danger, constituted an effective remedy. The courts reference in James to the detention as unlawful under article 5(1) during periods when courses were not being duly provided is problematic. It suggests that the circumstance identified in article 5(1)(a) that is the lawful detention of a person after conviction by a competent court had ceased to exist. If that were so, then logically that implies that the prisoner should have been at once released. In its forensic endeavour to persuade the Strasbourg Court not to find any violation of article 5(1), the United Kingdom Government itself suggested that a finding of such a violation would allow [logically, require] the release of dangerous offenders who had not yet addressed their risk factors: para 217. The court did not face up directly to the logic of this submission, but contented itself with saying that it would be regrettable if . release were ordered before that risk could be reduced to a safe level, adding only that However, this does not appear to be the case here: para 217. Although the submissions before the court took this extreme form, which much of the courts description of the issues echoed (see paras 175 onwards), I doubt whether it follows axiomatically from the courts judgment that a prisoner who was not being given appropriate courses could assert a right to release until such courses became available. The suggestion that this follows would lose its basis, if the court were to be understood as implying into article 5 an ancillary duty on the state to provide the courses which would enable prisoners to progress towards release in accordance with domestic law. That is in substance what the court was doing in, for example, para 206, where it said that it would be irrational to have a policy of making release dependent on a prisoner undergoing a treatment course without making reasonable provision for such courses. There are, I think, some other indications in the courts judgment in James that, if the matter had to be decided, the court would not expect that prisoners should be released during periods when courses were not being duly provided. First, the court said that the detention was only arbitrary and in breach of article 5(1) during the periods in which the prisoner were not progressed in their sentences (para 231) and that, once they had access to relevant courses their detention once again became lawful: para 244. It is difficult to think that the court would expect prisoners to be released for a period, eg until appropriate first stage prison places and courses were available, and then, by some mechanism, recalled. Second, there is the way in which the court dealt with Mr Wells and Mr Lees complaint that the pre condition to their release introduced by primary legislation, constituted by the requirement to satisfy the Parole Board that they were no longer a public danger, prevented them having an effective remedy under article 13. The court said nothing to question the legitimacy of this requirement during periods when courses were not available. On the contrary, it recited that Pursuant to the 1997 and 2003 Acts, the release of a prisoner sentenced to an IPP could be ordered by the Parole Board, having satisfied itself that the individual was no longer dangerous: para 231. It is however true that the court in its further reasoning was only concerned with, and accepted, the effectiveness of the judicial remedy available through the combination of the Parole Board and the judicial review proceedings which Mr Wells and Mr Lee actually took: para 232. Third, I find significant the courts reasoning in rejecting the claims to recover in respect of the violation of article 5(1) any damages over and above sums for distress and frustration: para 244. The court rejected such claims because, it said, it cannot be assumed that, if the violations in the present cases had not occurred, the applicants would not have been deprived of their liberty: para 244. That reasoning makes good sense, if the obligation to progress prisoners towards courses, which could facilitate their release, was an obligation ancillary to their continued detention. They would not be entitled to release, but they could claim damages for the ancillary and arbitrary failure to enable them to progress towards release. However, any damages claimed for loss of liberty (as distinct from damages for distress and frustration on account of the delays in providing courses) would depend upon showing that, had they been moved earlier to first stage prisons and given courses sooner, they would in fact have been released sooner. That, the court in effect said, had not been shown, and could not be assumed: para 244. This explanation of the courts reasoning loses force if the court thought that the prisoners should have been released during any periods when they were not being duly progressed through the prison system. On that basis, the prisoners continued detention would simply be illegitimate, and, as such, damages for wrongful detention should follow. It is not normally possible for a public authority, after a wrongful arrest or imprisonment, to argue that, if it had not been guilty of a wrongful arrest or imprisonment, then it could and would have taken different steps which would have achieved a rightful arrest or imprisonment. And, even if such an argument were possible, the onus would surely be on the public authority to show that it could and would have taken those different steps with that result. It would not be sufficient to put the onus on the wrongfully detained prisoners to show that the public authority could not or would not have taken such steps. So the courts statement that it cannot be assumed (para 244) that the prisoners would not anyway have been detained would not have been appropriate. obligation to progress the prisoners through the prison system arising by implication from, rather than directly under the terms of, article 5(1). Such a breach would not mean that the prisoners were entitled to be released, but would entitle them to recover any damages which they could show had been suffered as a result of that breach. If this were to be regarded as the correct analysis, then their continuing detention would continue to be legitimate under the Convention as well as under domestic law, until the Parole Board was satisfied that their detention was no longer necessary for the protection of the public. For these reasons, despite the courts description in para 221 of the detention as arbitrary and unlawful under article 5(1), I believe it to be well arguable that what was in truth being identified was a breach of an ancillary

This appeal is about the jurisdiction of the High Court to grant bail. In 1973 Martin Corey was sentenced to life imprisonment for murdering two police officers. The respondent, the Secretary of State for Northern Ireland, released him on licence in 1992. The Secretary of State referred Mr Coreys case to the parole commissioners on 13 April 2010 to ask whether his licence should be revoked. The next day a single parole commissioner recommended that it should be. That recommendation was based on material the Secretary of State supplied, including confidential information from the security services. The Secretary of State accordingly revoked Mr Corys licence on 15 April 2010. Mr Corey was taken into custody the next day and has been in prison since then. Mr Coreys case was then referred, as required, to the commissioners. The Secretary of State provided information including a gist of material he had certified as confidential. The single commissioner who initially considered the case read these and the confidential material itself. In accordance with her recommendation, a full panel of commissioners considered Mr Coreys case at a closed hearing on 25 January 2011. His interests were represented by a special advocate, who, like the panel, was entitled to see a statement of all open and closed material relevant to the case, including anything undermining the Secretary of State's case. Mr Cory and his own legal representatives were allowed to see a similar statement in respect of the open material, but not of the closed material. On 15 August 2011 the panel gave both closed and open judgments. In the open judgment, they stated that Mr Corey had become involved in the Continuity Irish Republican Army from early 2005 and was in a position of leadership in it from 2008 until his recall to prison. Since the panel were satisfied that Mr Corey posed a risk of serious harm to the public, they were required to refuse to direct his release. Mr Cory sought judicial review of the commissioners decision on the grounds (among others) (1) that the gist disclosed inadequate information and (2) that the refusal to direct his release had been based solely or to a decisive degree on the closed material and so breached article 5(4) of the European Convention on Human Rights. Article 5(4) provides, Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. Mr Justice Treacy held on 9 July 2012 that the commissioners decision was indeed based solely or decisively on the closed material. He further found that the allegations in the open material were not specific enough to allow Mr Corey, through his lawyers and the special advocate, to refute them. The commissioners hearing therefore breached his right to procedural fairness under article 5(4). Instead of quashing the commissioners decision, however, Mr Justice Treacy directed them to reconsider the case in accordance with his ruling. He also gave Mr Corey bail pending their decision, since his detention would be in the meantime unlawful. The Secretary of State immediately applied for a stay of that order and appealed it. On 11 July 2012 the Court of Appeal decided that the judge did not have power to grant bail, and so stayed that grant. This Court granted Mr Corey permission to appeal on the bail issue. Meanwhile, the Court of Appeal allowed the Secretary of States appeal on the article 5(4) issue, which had been heard separately. The Court of Appeal concluded that the material which had been provided allowed Mr Corey to instruct his advisers effectively, and so article 5(4) was complied with. This Court refused Mr Corey permission to appeal on that issue. Whether the High Court could grant him bail is therefore academic, but important enough that this Court allowed the appeal to proceed on that issue. The Supreme Court unanimously dismisses Mr Coreys appeal. Lord Kerr, with whom the other Justices agree, concludes that the High Court in Northern Ireland has an inherent jurisdiction to grant bail [1819], provided certain conditions are met. The question is whether those conditions are met in this case. They are that it is (a) necessary for the effective disposal of Mr Coreys claim and (b) not contrary to the purpose or spirit of the legislation in question that the court should have power to order his release pending reconsideration of his case by the commissioners [2122]. The judges order that the review of Mr Coreys detention had not been conducted lawfully and that it should be reconsidered was, on its own terms, a full vindication of the right which the appellant had asserted. On that ground alone, the judge did not have power to order Mr Coreys release [27]. It is important to bear in mind that in the present case the lawfulness of Mr Coreys detention on foot of his recall to prison was not directly in issue. The focus of his challenge was to the commissioners failure to direct his immediate release and the manner in which their determination was made [25]. In any event, an inherent jurisdiction to order release in the circumstances of this case would run directly counter to the operation of the legislation in question in this case: the Life Sentences (Northern Ireland) Order 2001. One of the principal philosophies underlying the Order is expressed in article 6(4) which provides that the commissioners shall not direct a prisoners release unless satisfied that his confinement is no longer necessary to protect the public from serious harm. And article 3(2) requires that the commissioners have expertise from a variety of fields: one must hold or have held judicial office; one must be a psychiatrist; one must be a chartered psychologist; one must have experience of working with victims of crime; and must have expertise in the causes of delinquency or the treatment of offenders. This requirement reflects the need to have available a range of specialists who can contribute to what must often be a difficult debate as to whether the rigorous test set out in article 6(4) is satisfied. Put simply, the legislature has placed in the hands of a panel of experts the difficult decision as to when a life sentence prisoner should be released. Their role should not be supplanted by a judge who does not have access to the range of information and skills available to the commissioners [3133]. Lord Kerr notes in passing the European Court of Human Rights recent judgment in James v United Kingdom (2012) 56 EHRR 399, which appeared to suggest that, if a prisoner has not had a chance to take the steps necessary to meet the conditions for release, his detention would breach article 5(1) of the European Convention during those periods. Article 5(1) allows states to imprison people only when justified by law, and requires prisoners not lawfully detained to be released. Since it is unnecessary to decide the question in this case, Lord Kerr would defer decision on it until necessary. Lord Mance, with whom the remaining Justices agree, suggests that James should be interpreted as arising only from a secondary obligation, implied by article 5(1), to progress prisoners through the prison system. Such a breach would not require a prisoner to be released, but would entitle him to damages. These observations do not form part of the reasoning on which the judgment in this case was based.

The short issue raised by this appeal is whether the respondent (SL), a failed asylum seeker, was at the relevant time in need of care and attention, requiring the provision of accommodation by the local authority under section 21(1)(a) of the National Assistance Act 1948. Burnett J decided that he was not, but that decision was reversed by the Court of Appeal, Laws LJ giving the only substantive judgment. As Baroness Hale of Richmond explained in the leading authority (R (M) v Slough Borough Council [2008] UKHL 52, [2008] 1 WLR 1808 (Slough)), this section of the 1948 Act has for the most part been a relatively peaceful backwater of the law. She observed: until 1996, it would not have occurred to anyone that section 21(1)(a) might cover this sort of case. There was no need for it to do so. And it was not designed to do so. (para 7) That peace was shattered in the 1990s by the pressures of tighter immigration control, and the recognition by the courts of the potential role of local authorities under section 21(1)(a) in meeting the resulting needs (see R v Hammersmith and Fulham London Borough Council, ex parte M (1997) 30 HLR 10). The Immigration and Asylum Act 1999, which followed a 1998 White Paper, sought to redefine the respective responsibilities of national and local government (Slough paras 22 24). It established a national scheme of last resort, initially administered by a new body, the National Asylum Support Service (NASS) (later administered by the UK Border Agency on behalf of the Secretary of State), and at the same time introduced amendments limiting the application of section 21 in the case of those subject to immigration control. There followed what one commentator called an unseemly turf war (Slough, para 28) over responsibility for homeless asylum seekers as between, on the one hand, local authorities under section 21(1)(a) of the 1948 Act and, on the other, central government under the new national scheme. That led in due course to two cases in the House of Lords: R (Westminster City Council) v National Asylum Support Service [2002] UKHL 38, [2002] 1 WLR 2956 (NASS), and the Slough case. Between the two came the important decision of the House of Lords in R (Limbuela) v Secretary of State for the Home Department [2005] UKHL 66, [2006] 1 AC 396, which established that even those deprived of support under the national scheme, because they had not claimed asylum as soon as reasonably practicable (see Nationality, Immigration and Asylum Act 2002, s 55(1)), must not be left subject to such a level of deprivation as would amount to inhuman or degrading treatment under human rights law (Slough para 23). In the present case, happily, there has been no unseemly dispute between different parts of government, it having been accepted throughout, as I understand it, that if section 21(1)(a) of the 1948 Act did not apply, responsibility would fall on the Home Secretary under the national scheme. When these proceedings began, the difference was regarded as significant because of the more limited protection thought to be available under the national scheme (including the possibility of dispersal to a different area). There has been concern about the accommodation and support provided for asylum seekers since at least the Report of the Joint Committee on Human Rights on The Treatment of Asylum Seekers (Tenth Report of Session 2006 07, HL Paper 81 I, HC 60 I), and repeated, for example, in the Report of the Parliamentary Inquiry into Asylum Support for Children and Young People (The Children's Society, January 2013). That remained a potentially live issue at the time of the hearing before Burnett J in November 2010. However, it became academic following the grant in March 2011 of indefinite leave to remain. The Court of Appeal agreed to hear the appeal on the basis of the broader questions of principle involved. It has proceeded to this court on the same basis. Statutory provisions and Asylum Act 1999) provides: Section 21 of the 1948 Act (as amended in particular by the Immigration (1) Subject to and in accordance with the provisions of this Part of this Act, a local authority may with the approval of the Secretary of State, and to such extent as he may direct shall, make arrangements for providing: (a) residential accommodation for persons aged eighteen or over who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them; and (aa) residential accommodation for expectant and nursing mothers who are in need of care and attention which is not otherwise available to them. (1A) A person to whom section 115 of the Immigration and Asylum Act 1999 (exclusion from benefits) applies may not be provided with residential accommodation under subsection (1)(a) if his need for care and attention has arisen solely (a) because he is destitute; or (b) because of the physical effects, or anticipated physical effects, of his being destitute (Sub section (1B) provides that destitute for these purposes is defined in accordance with section 95 of the 1999 Act.) By section 21(8), nothing in section 21 is to be taken as authorising or requiring the making of any provision authorised or required to be made under any enactment not contained in this Part of this Act (that is, Part III of the 1948 Act), or under the National Health Service Acts. Section 29, also in Part III of the 1948 Act, deals with welfare arrangements, unrelated to the provision of accommodation. It provides for authorities, subject to approvals or directions of the Secretary of State, to make arrangements for promoting the welfare of persons aged eighteen or over who are blind, deaf or dumb or who suffer from mental disorder of any description (and certain other specified categories). The duties under section 29 are supplemented by section 2 of the Chronically Sick and Disabled Persons Act 1970. Apart from the 1948 Act, local social services authorities also have a range of caring responsibilities under other statutes (eg National Health Service Act 2006, sched 20 para 3: home help and laundry facilities for households which include a person who is ill, aged or handicapped). It is convenient at this stage to note certain points which I understand to be common ground in the light of the authorities. First, the requirements of section 21(1)(a) of the 1948 Act can be expressed as three cumulative conditions: first, the person must be in need of care and attention; secondly, the need must arise by reason of age, illness, disability or 'other circumstances' and, thirdly, the care and attention which is needed must not be available otherwise than by the provision of accommodation under section 21. (see Slough, per Lady Hale at para 31 citing R (Wahid) v Tower Hamlets London Borough Council [2002] LGR 545, para 30), Only the first and third conditions are in issue in this case. Secondly, it is clear that the words not otherwise available in section 21(1)(a) govern care and attention, not accommodation (Slough, para 16, per Lady Hale; para 50 52, per Lord Neuberger of Abbotsbury). It is equally clear now (whatever the intention of the framers of the 1948 Act) that ordinary, as opposed to special, accommodation, is not excluded: It may well be that those who drafted section 21(1)(a) in 1948 assumed that it only applied to people who needed extra care and attention which could not be provided in their own homes Be that as it may, we are required, by [the NASS case], to accept that people who need care and attention which could be provided in their own homes, if they had them, can fall within section 21(1)(a). (Slough, para 30, per Lady Hale) Finally, the national scheme is designed to be a scheme of last resort. The regulations require the Secretary of State, in deciding whether an asylum seeker is destitute, to take into account any other support available to the asylum seeker, including support available under section 21 of the 1948 Act (Asylum Support Regulations 2000 (SI 2000/704), reg 6(4)(b); Slough, para 27). Conversely, the local authority, in answering the questions raised by that provision, must disregard the support which might hypothetically be available under the national scheme (see eg R (SO) v London Borough of Barking and Dagenham [2011] 1 WLR 1283, para 40). The facts SL, who is now aged 22, arrived in this country in 2006. He claimed asylum, because of fear of persecution in Iran on account of his sexual orientation, but the claim was refused in January 2007. He became homeless in October 2009. Following his attempted suicide in December 2009, SL was admitted as a patient at the St Charles Hospital Mental Health Unit and was discharged in April 2010. He was diagnosed as suffering from depression and post traumatic stress disorder. Since then, his condition has been kept under review, and various psychological and other assessments have been carried out. Continuing supervision was provided by his care co ordinator, Mr Adam Wyman, a social worker employed by the council. SL was accommodated at the councils expense pursuant to an interim order made by Saunders J on 16 April 2010 until April 2011, when he began to be accommodated under housing legislation following the grant of indefinite leave to remain. There is no material dispute as to SLs state of health at the time of the relevant decision. An occupational therapists report prepared in March 2010 had concluded that he was independent in all self care needs, had no cognitive or motor difficulties, and was sociable and able to form positive relationships. Mr Wyman himself had found that SL was an intelligent and creative young man, and that his problems centred round his post traumatic stress disorder, depression and anxiety. He had concluded Certainly S's mental state is fluctuating and he continues to experience genuine emotional distress, including symptoms of depression, anxiety and low confidence. Unfortunately, S also exhibits broadly emotionally immature and histrionic personality symptoms that combine with his distress to put him at some risk of self harm. In my view, however, this risk does not warrant the need for S to be looked after. In my experience, and also the view of Dr Clarke, S's consultant at St Charles, confirms that such support will likely be counter effective to that which would be considered therapeutic, associating in S's mind his recovery with the provision of dedicated mental health services, rather than coming to understand his responsibilities (with the availability of social work and counselling services) to manage both the distress he is experiencing and the set of (difficult) social circumstances he is currently facing . He will continue to receive social work support if he will accept it. On 14 April 2010 the council gave notice of its decision that SL was not in need of care and attention for the purpose of section 21(1)(a) of the 1948 Act. The letter stated that social work support would be available for SL if he wanted it; that such support would be in the form of practical assistance in arranging activities for him during the day, and also monitoring his mental state at regular appointments which would not involve visits to his home (unless a total absence of contact with any member of the Community Mental Health Team led to concerns about his mental health). The arrangements subsequently put in place for SL are described in the judgment of Laws LJ [2012] PTSR 574 (paras 11 14). They included links with counselling groups, who were organisations working with gay men and women, and regular meetings with a befriender (under a service provided by the council) who saw him once a week and took him to activities he enjoys. Laws LJ summarised the position: 13. Looking at the factual material in the round, the support furnished by the local authority may be summarised much as Mr Knafler summarised it: at his weekly meetings with the claimant the care co ordinator Mr Wyman offers advice and encouragement and generally monitors his condition and progress. He has also been instrumental in arranging contact (or the renewal of contact) with the counselling groups to which I have referred, and the claimants befriender. He noted that SL also received medical attention including prescribed medicines, but accepted that this was excluded from consideration by section 21(8) of the 1948 Act. The authorities Laws LJ reviewed the line of cases in the higher courts following R v Hammersmith and Fulham London Borough Council, ex p M (1997) 30 HLR 10, and the enactment of the 1999 Act. As he explained, the courts attempts to draw a line between section 21(1)(a) of the 1948 Act and the national scheme had led to a distinction between the able bodied destitute and the infirm destitute, the former but not the latter being excluded from consideration under section 21(1)(a). Shortly after the enactment of section 21(1A), its effect was considered by the Court of Appeal in R v Wandsworth London Borough Council, ex p O [2000] 1 WLR 2539 (ex p O). The applicants were over stayers with no right to accommodation unless they could bring themselves within section 21(1)(a) of the 1948 Act. They both had health problems and were destitute. The court rejected an argument that they were excluded from consideration under section 21(1)(a) by virtue of subsection (1A). Simon Brown LJ (with whom Hale and Kay LJJ agreed) summarised the applicants argument which he accepted: [I]f an applicant's need for care and attention is to any material extent made more acute by some circumstance other than the mere lack of accommodation and funds, then, despite being subject to immigration control, he qualifies for assistance. Other relevant circumstances include, of course, age, illness and disability, all of which are expressly mentioned in section 21(1) itself. If, for example, an immigrant, as well as being destitute, is old, ill or disabled, he is likely to be yet more vulnerable and less well able to survive than if he were merely destitute." (p 2548F G) This was followed in R (Mani) v Lambeth London Borough Council [2003] EWCA Civ 836, [2004] LGR 35. The applicant, a destitute asylum seeker, suffered from a disability to one leg which impaired his mobility and led to the need for help in tasks such as bed making, cleaning and carrying shopping. The council disclaimed responsibility on the grounds that his needs were not such as to require the provision of accommodation. The courts disagreed. At the beginning of his judgment Simon Brown LJ adopted Wilson Js formulation of the relevant question: Does a local authority have a duty to provide residential accommodation for a destitute asylum seeker who suffers a disability which, of itself, gives rise to a need for care and attention which falls short of calling for the provision of residential accommodation? (para 1) He summarised the authoritys argument: . the care and attention referred to means care and attention of a kind calling for the provision of residential accommodation. Unless the applicants disability or infirmity is such as to give rise to an accommodation related need for care and attention, it cannot be a disability or infirmity entitling the applicant in any circumstances to subsection 21 accommodation. (para 16) He rejected that argument and answered the question posed by Wilson J in the affirmative. Although echoing the doubts which he had expressed in the NASS case (see below), Simon Brown LJ thought that the council were well and truly caught in the coils of the existing authorities, and, like Wilson J, he felt bound to apply the logic of his own judgment in ex p O (para 20). In the NASS case, the applicant was at the relevant time an infirm destitute asylum seeker, suffering from spinal cancer, and living with her 13 year old daughter. The dispute arose when NASS refused responsibility for the cost of her accommodation, and the council began judicial review proceedings. It is helpful to refer to the statement of assessed needs as described by Simon Brown LJ in the Court of Appeal (para 3): Mrs Y A is not merely destitute but suffers also from spinal myeloma for which she has been, and continues to be, treated at St Mary's Hospital, Paddington. On 23 November 2000, the appellant Council's social services department assessed her as requiring (on her discharge from hospital) assistance from a carer with her mobility indoors and outdoors, with transfer between bed, chair, bath and wheelchair, and with personal care in respect of washing, dressing and toilet. She also requires accommodation with disabled access and its own bathroom as close to St Mary's Hospital as possible and which has at least two rooms, one of them large enough to allow a carer to work around her. Unsurprisingly, on these facts, there was no dispute that she was in need of care and attention. The only issue was whether it was otherwise available Lord Hoffmann summarised the effect of section 21(1A): The use [in section 21(1A) of the 1948 Act] of the word 'solely' makes it clear that only the able bodied destitute are excluded from the powers and duties of section 21(1)(a). The infirm destitute remain within. Their need for care and attention arises because they are infirm as well as because they are destitute. They would need care and attention even if they were wealthy. They would not of course need accommodation, but that is not where section 21(1A) draws the line. (NASS, para 32) He rejected the councils argument that the applicants need for care and attention could be satisfied in private accommodation and did not entail a need for local authority accommodation: The difficulty about this argument is that it seems to me to run counter to the reasoning in R v Hammersmith and Fulham London Borough Council, Ex p M 30 HLR 10. The able bodied destitute asylum seekers in that case would never have been given Part III accommodation if they had not been subject to immigration control. They would have been given income support and Housing Act accommodation. They had to be given accommodation because otherwise there was nowhere else they could receive care and attention. Mr Pleming did not challenge the correctness of Ex p M and I do not think it would be open to him to do so, because the whole of Part VI of the 1999 Act proceeds on the assumption that it is correct. But the present seems to me an a fortiori case. (para 43) At the time that the NASS case came before the House of Lords, Mani had been decided at first instance but had not reached the Court of Appeal. In the NASS case itself, in the Court of Appeal, Simon Brown LJ had expressed concerns about the unforeseen implications of his judgment in ex p O (echoed by Lady Hale in Slough, paras 27). Lord Hoffmann noted these concerns (para 46). He also summarised the criticisms made by counsel of the decision in ex p O in the light of the first instance judgment in Mani: Mr Pleming said that this case (Mani) demonstrated the absurd consequences of the decision of the Court of Appeal. If Mr Mani had been an ordinary resident, his disability would never have entitled him to accommodation under a statute intended to provide institutions for the old and retreats for the mentally handicapped. His entitlement as found by Wilson J arises simply from the fact that he is an asylum seeker. Such a conclusion is inconsistent with the policy of having a national support system specifically for asylum seekers. Furthermore, the decision undermines the policy of dispersal followed by NASS, which is intended to prevent asylum seekers from gravitating to London boroughs or other local authority areas of their choice. An asylum seeker who can produce a disability, physical or mental, which makes his need for care and attention to any extent more acute than that which arises merely from his destitution, can play the system and secure accommodation from the local authority of his choice. (para 48) Lord Hoffmann accepted that these concerns were not without substance, but thought that they did not arise in the case before them: But the issues before your Lordships are narrow. The present case has been argued throughout on the footing that Mrs Y Ahmed has a need for care and attention which has not arisen solely because she is destitute but also (and largely) because she is ill. It is also common ground that she has no access to any accommodation in which she can receive care and attention other than by virtue of section 21 or under Part VI of the 1999 Act. (para 49) Accordingly, it was not necessary in the NASS case to decide the correctness of the test laid down in ex p O, and applied in Mani, for determining whether the claimants need had arisen solely because he is destitute. Lord Hoffmann declined to express any view on this point, because it would affect the rights of everyone subject to immigration control, whether an asylum seeker or not (para 50). In the Slough case, the principal issue was the meaning of the expression care and attention. The claimant, who was HIV positive, and needed various prescribed medicines and a refrigerator in which to store them, was held not to be within section 21(1)(a) of the 1948 Act. As already noted, Lady Hale (who gave the leading speech) reviewed the history of the legislation and the authorities. Concerning the expression care and attention, she noted the submissions (and concessions) of Mr Howell, for the council : Mr Howell argues that there must be some meaningful content in the need for care and attention. He was at first disposed to argue that it must mean care and attention to physical needs, such as feeding, washing, toileting and the like, and not simply shopping, cooking, laundry and other home help type services. But he accepted that it had also to cater for people who did not need personal care of this sort but did need to be watched over to make sure that they did not do harm to themselves or others by what they did or failed to do. The essence, he argued, was that the person needed someone else to look after him because there were things that he could not do for himself. (para 31) She rejected his first approach as incompatible with the authorities and with practice over the years. It was also clear from a comparison with other statutes that care and attention was a wider concept than nursing or personal care (para 32). She then gave her own view: I remain of the view which I expressed in R (Wahid) v Tower Hamlets London Borough Council [2002] LGR 545, para 22, that the natural and ordinary meaning of the words care and attention in this context is looking after. Looking after means doing something for the person being cared for which he cannot or should not be expected to do for himself: it might be household tasks which an old person can no longer perform or can only perform with great difficulty; it might be protection from risks which a mentally disabled person cannot perceive; it might be personal care, such as feeding, washing or toileting. This is not an exhaustive list. The provision of medical care is expressly excluded (para 33) That approach was consistent with the authorities and draws a reasonable line between the able bodied and the infirm. It was consistent in particular with Mani, of which she said: That case [i.e. Mani] was argued on the assumption that the claimant did have a need for care and attention, but not a need which required the provision of residential accommodation. Mr Mani had one leg which was half the length of the other. He had difficulty walking and when in pain he could not undertake basic tasks such as bed making, vacuum cleaning and shopping. He did need some looking after, going beyond the mere provision of a home and the wherewithal to survive. (para 34) She noted a possible discrepancy with the statement of Lord Woolf MR in ex p M (30 HLR 10, 21) that the authorities could anticipate the deterioration which would otherwise take place and intervene before a person's health had been damaged. That was to be interpreted, not as giving power to intervene before there was a need for care, but as recognising the need for some sensible flexibility, allowing the authorities to intervene before a present need becomes a great deal worse (para 35). Lord Neuberger agreed, adding: As for care and attention, while again it is right to caution against the risks of reformulating the statutory language, it appears to me that Hale LJ was right to say that in this context, the expression means looking after and that ordinary housing is not in itself care and attention see R (Wahid) v Tower Hamlets London Borough Council [2002] LGR 545, para 32. I do not consider that care and attention can extend to accommodation, food or money alone (or, indeed, together) without more. As a matter of ordinary language, care and attention does not, of itself, involve the mere provision of physical things, even things as important as a roof over one's head, cash, or sustenance. Of course, if a person has no home or money, or, even more, if he has no access to food, he may soon become in need of care and attention, but, as already explained, that is beside the point. (para 56) Finally I should refer to the judgment of Laws LJ himself in R (Zarzour) v Hillingdon London Borough Council [2009] EWCA Civ 1529, on which he relied in the present case. The applicant was an asylum seeker awaiting a decision on his claim. He was totally blind, and needed help with dressing and laundry, with finding his way around his accommodation, and with shopping; he could not go out safely on his own. The judge upheld his claim to judicial review, and the Court of Appeal agreed. Laws LJ said: [T]he real question here is whether the council's own findings. compel a conclusion that the claimant was in need of care and attention within the meaning of section 21(1)(a) or, to put it in conventional public law terms, whether that conclusion was one which, on the facts, no reasonable council could reach. (para 13) Applying the approach of Lady Hale in the Slough case, he agreed that the applicant was in need of care and attention, and that it was at least in part accommodation specific (para 18). But he added: It is important to note that it has been accepted in [Mani], approved by Lady Hale at paragraph 34 of [R (M) v Slough BC], and in [NASS] that the need of care and attention spoken of in section 21 was not such as necessarily to call for the provision of residential accommodation notwithstanding the fact that such provision is made by the statute the principal medium for meeting the need, and notwithstanding the further fact that, as other parts of Part III of the 1948 show, section 21 typically entails a move into local authority accommodation. (para 18) The courts below At first instance, Burnett J dismissed the application for judicial review. As is now common ground, he erred on one point (para 18), in that he took account of the Secretary of States acceptance of responsibility to accommodate under the national scheme. However, this does not seem to me to undermine the remainder of his reasoning on the two live issues. He concluded that, important as was the social work support to SLs well being, it did not amount to care and attention for the purposes of section 21(1)(a) of the 1948 Act: To suggest that the claimant needs looking after would stretch the meaning of those words beyond their proper limit. In my judgment, it would be more accurate to say that the support that the claimant needs amounts to keeping an eye on him. That is a rather different matter. It imports the notion that whilst keeping an eye on him, if circumstances change, different or further interventions might become necessary. It is not, however, in my view, care and attention. (para 31) On the other issue, he noted the rejection, in the NASS case, of the submission that section 21 did not apply where the care and attention could be provided in the claimants own accommodation. However, he thought the argument in the present case was different, because Assistance to this claimant is provided outside of his home, wherever that home happens to be. It is provided when he visits the Abbey Road Centre. Mrs Y Ahmed [the claimant in NASS] needed the care in her own home. She had no home. (para 19) Similarly, the applicants in ex p M had to be housed under the 1948 Act to enable them to receive the care and attention that they needed (para 21). That was not so in respect of SL. In the Court of Appeal, Laws LJ reached the opposite result on both issues. He dealt shortly with the care and attention issue. Having quoted the Burnett Js conclusion, he said: 22. The judge has, I think, understated the nature of the support provided by the local authority through Mr Wyman. As Mr Knafler submitted, Mr Wyman is doing something for the claimant which he cannot do for himself: he is monitoring his mental state so as to avoid if possible a relapse or deterioration. He is doing it, no doubt, principally through their weekly meetings; but also by means of the arrangements for contact (or the renewal of contact) with the two counselling groups, and with the befriender. It is to be noted that care and attention within the subsection is not limited to acts done by the local authority's employees or agents. And I have already made it clear that the subsection does not envisage any particular intensity of support in order to constitute care and attention. 23. I acknowledge that the question is to some extent a matter of impression; and also that the claimant must show that the local authoritys determination was not open to a reasonable decision maker But in my judgment that test is met. The support provided by the local authority to the claimant qualifies as care and attention. He regarded the second issue as altogether more problematic (para 24ff). He had earlier identified certain broader questions left unresolved by the speeches in Slough: Must it be shown that the necessary care and attention cannot be given without the provision of residential accommodation? Or should the expression be construed as meaning that the provision of accommodation is reasonably required in order for care to be furnished in a way that fully meets the claimant's needs?. Or are there other possible meanings? (para 15) Of the cases following ex p M and the 1999 Act, he said: What has happened since is that the cases seem to have proceeded on the basis that all destitute persons are liable to be accommodated under section 21(1)(a) unless they are able bodied. Only the able bodied destitute are excluded by section 21(1A). There is, so to speak, no undistributed middle between the two subsections. (para 27) He cited the test adopted by Simon Brown LJ in ex p O (para 15 above), which in his view reflects, indeed exemplifies, the division of destitute asylum seekers into two mutually exclusive classes, able bodied and infirm. All members of the first class are covered by section 21(1A), and all members of the second by section 21(1)(a); there is no third class, no undistributed middle. (para 36) He noted (para 32) that in the NASS case Lord Hoffmann had declined to comment on the correctness of the decision in ex p O because of its wide implications. Accordingly, the approach in ex p O must be taken as remaining the law for his purposes, there being nothing in Slough to suggest otherwise (para 35). Following his own judgment in Zarzour, Laws LJ accepted that there must be at least some nexus between the care and attention and the accommodation (para 34). However, he thought that the strict distinction drawn by the cases between able bodied and infirm destitute applicants gave no weight to the third criterion in section 21(1)(a) of the 1948 Act not otherwise available (para 37). He continued: 38. However some force must be given to those words. The undistributed middle cannot be quite what it seems. Now, a nexus between a claimant's destitution and his infirmity may mean different things. At para 15 above I suggested two possible ways in which the expression care and attention which is not otherwise available might be understood. First, it might mean that the necessary care and attention unequivocally requires the provision of residential accommodation. Secondly, it might mean that the provision of accommodation is reasonably required in order for care to be furnished in a way that fully meets the claimant's needs. As I stated, Mr Knafler, supported by the interveners, urges the latter approach. A third possibility, though perhaps little more than a variant of the second, would be that care and attention is not otherwise available unless it would be reasonably practicable and efficacious to supply it without the provision of accommodation. 39. In my judgment this third sense of not otherwise available most closely reconciles the statutory condition which those words exemplify with the exhaustive division of destitute asylum seekers between the infirm and the able bodied the undistributed middle. As I have shown, this court in R (Mani) v Lambeth London Borough Council [2004] LGR 35 rejected the local authority's submission that care and attention in section 21(1)(a) means "care and attention of a kind calling for the provision of residential accommodation". I take that submission in effect to mirror the first of the three meanings I have identified. As Simon Brown LJ indicated in Manis case, it cannot stand with the other authorities, not least R v Wandsworth London Borough Council, Ex P O [2000] 1 WLR 2359. But the second meaning, favoured by Mr Knafler and the interveners, is in my judgment too far distant from the statutory language. The subsection's terms do not suggest a legislative policy by which accommodation is to be provided in order to maximise the effects of care and attention. However the third meaning, that care and attention is not otherwise available unless it would be reasonably practicable and efficacious to supply it without the provision of accommodation, can in my judgment live with existing authority. Indeed it is, I think, an implicit assumption made in the course of the learning's evolution. He made clear that his conclusion was one constrained by the authorities, rather than arising from his own view of the statutory language: 41. I should say, however, that I am troubled by this conclusion as to the proper interpretation of section 21(1)(a). The natural and ordinary meaning of the statutory words seems to me to be closer to that advanced but rejected in Manis case care and attention of a kind calling for the provision of residential accommodation, so that the need for care and attention is accommodation related (Manis case [2004] LGR 35, para 16): the first of the three meanings I have identified. But the learning, so much of whose focus has been on the inverted and unseemly turf war between local and national government, has barred such a construction. Having referred again to the services provided by Mr Wyman, he concluded: On the view of the law which I favour the question is whether it would be reasonably practicable and efficacious, for the purpose in hand, to supply these services without the provision of accommodation; and in asking the question the assumption has to be made that the claimant is destitute (because the potential availability of NASS accommodation has to be ignored). Approaching the matter thus, the question admits of only one sensible answer. Given the evidence of the claimants condition which was before the local authority it would, as Mr Knafler submitted, be absurd to provide a programme of assistance and support through a care co ordinator "without also providing the obviously necessary basis of stable accommodation. (para 44) As I read the judgment, the interpretation adopted by Laws LJ was his attempt to reconcile the effect of the authorities which were binding on him, with the words of section 21(1)(a). The requirement that the care and attention should be not merely available, but practical and efficacious, was necessary to offer a logical explanation, consistent with those authorities, for the inclusion of the infirm destitute as a class within section 21(1)(a), whether or not the needs of particular individuals were accommodation related in the sense discussed in Mani. Submissions I turn to the submissions to this court. I shall not attempt more than a short summary of what I understand to be the main points, in over 100 pages of written submissions by the parties and the interveners, as developed in oral submissions. Mr Howell QC, for the council, and Mr Knafler QC for SL, have both shown notable industry in researching the highways and byways of the legislative history, going back even to the presentation of the National Assistance Bill to Parliament (by Mr Aneurin Bevan MP) in November 1947. I hope I shall be forgiven for not following them on that journey. It seemed a distraction from the task of construing section 21(1)(a) in the light of its modern context, and of the relevant authorities, all of which are relatively recent. Such emphasis on the history is unlikely to be helpful in relation to provisions which must be read in the light of changing social conditions (see Wahid, para 31), particularly where (as here) they have been forced into service to deal with a problem wholly unforeseeable at the time of the passing of the Act. Lady Hales speech in the Slough case gives us all the history we need to understand the evolution of the statute and its present legal and social context. It is in that context that the simple statutory words must be interpreted and applied. Confined to their essentials, the respective submissions can I hope be fairly summarised as follows. Mr Howell submitted that: i) Monitoring (or assessing) an individual's condition at a weekly meeting is not itself care and attention for this purpose. It is rather a means of ascertaining what care and attention or other services (if any) the individual may need in the future. ii) Care and attention means more than monitoring, or doing something for a person which he cannot do for himself. As Dunn LJ said in the comparable statutory context of attendance allowance (R v National Insurance Commissioner ex p Secretary of State for Social Services [1981] 1 WLR 1017 at 1023F) the word attention itself indicates something involving care, consideration and vigilance for the person being attended a service of a close and intimate nature. iii) On the second issue, the services provided by the council, other than accommodation, could be provided under other statutory provisions; they were therefore otherwise available, and thus excluded from consideration by section 21(8) of the 1948 Act. iv) Alternatively, in line with the reservations expressed by Laws LJ (para 41), and contrary to the decision of the Court of Appeal in Mani, the court should hold that the section applies, not to all those who need care and attention, but only to those who have an accommodation related need, that is those who need care and attention of a kind which is only available to them through the provision of residential accommodation (Mani, para 16). In any event, as the judge found, there was no link between any need for accommodation and the services needed by SL, which were being v) provided wholly independently of the place where SL was or might be living. Mr Knafler submitted in summary that: i) ii) Care and attention or looking after included not only intimate personal care, but any other forms of personal care or practical assistance. It is enough, in Lady Hales words, that the council is doing something for the person being cared for which he cannot or should not be expected to do for himself. Monitoring SLs mental state was indeed doing something for him, and was no different in principle from watching over as described by Mr Howells concession in Slough. Care and attention is not an accommodation related need. Care and attention can be provided to persons in residential accommodation under section 21(1)(a), and also to persons in their own homes under section 29 or other enactments. Longstanding local authority practice is to provide care and attention in residential accommodation when it can no longer be provided reasonably practicably and efficaciously in a persons home, or elsewhere, having regard to all the circumstances, including cost. iii) Not otherwise available means, as Laws LJ held, not otherwise available in a reasonably practicable and efficacious way. In this case, SL needed care and attention because he needed accommodation, basic subsistence, personal care and practical assistance. That package was not available at all, otherwise than by the provision of residential accommodation. Alternatively, looking simply at the care he needed for his mental illness, and given that he was homeless and destitute, the necessary care was not available to him in any reasonably practicable and efficacious way, otherwise than by providing him with accommodation as a stable base. The written submissions for the two interveners, Mind and Freedom From Torture, supported by evidence from expert witnesses, sought generally to uphold the approach of the Court of Appeal, and to counter some of the arguments put forward by the council. I note the following points: i) Care and attention must be interpreted in the light of modern medical research, in particular giving equal weight to the needs of those with mental health problems as to those with physical health problems, and attributing to social recovery as much importance as clinical recovery. In that context it should be read as including all the services directed to monitoring a persons mental health, preventing decline and promoting recovery, and facilitating independence and social inclusion. The services provided by the council to SL fell into these categories, and were thus properly accepted by the Court of Appeal as coming within section 21(1)(a) of the 1948 Act. ii) The Court of Appeals approach to the nexus issue rightly reflected the important role of residential accommodation in securing the effective provision of care and attention to people with mental health problems. Delivering effective care to someone who does not have stable accommodation is almost impossible. Lack of such accommodation can aggravate the problems and lead to the need for more intensive intervention or hospitalisation. iii) Section 21(1)(a) of the 1948 Act should be interpreted in the light of the UN Convention on the Rights of Persons with Disabilities (ratified by the UK in June 2009). Article 26 of that treaty, in particular, requires States Parties to take effective measures to enable those with disabilities to to attain and maintain maximum independence, full physical, mental, social and vocational ability, and full inclusion and participation in all aspects of life. iv) These considerations apply particularly to victims of torture, for whom relevant care includes psychological counselling and support provided outside accommodation, and for whom stable and appropriate accommodation are essential to make any such care effective. Discussion Applying the agreed reformulation of section 21(1)(a) of the 1948 Act, there were two questions for the council: (1) was SL in need of care and attention? (2) if so, was that care and attention available otherwise than by the provision of accommodation under section 21? They answered the first in the negative, and the second in the affirmative. The issue for the courts, applying ordinary judicial review principles, was whether they were reasonably entitled to take that view. In agreement with the judge on both issues, I would hold that they were. In reaching this conclusion I do not in any way seek to question the evidence of the interveners as to the importance of the services they describe, including stable accommodation, both for those with mental health problems generally, and for victims of torture in particular, nor the relevance in that context of the UN Convention and the other texts to which they refer. However, acknowledgement of the importance of the services does not compel the view that they fall within the responsibilities imposed on local authorities by section 21(1)(a) of the 1948 Act. That must depend on the true construction of the words of the section in their context. On the first issue, authoritative guidance as to the meaning of the expression care and attention is given by Lady Hales speech in the Slough case. I would also read Lord Neubergers speech as offering some helpful elaboration of the same idea. Mr Howell asked us to adopt a more restrictive approach, put in various ways, but in substance limiting it to personal care, or service of a close and intimate nature. These submissions seemed to turn the clock back not just on previous authority, but on his own concessions (albeit, on behalf of a different council) in the Slough case. I do not accept that such limitations are supported by an ordinary reading of the statutory words. Even if I did, I would not regard it as appropriate for us to revisit an issue considered so recently at the highest level. On the other side, Mr Knafler relies on Lady Hales reference to doing something for the person being cared for which he cannot or should not be expected to do for himself. Echoing Laws LJ, he submits that those words are wide enough to encompass monitoring SLs condition to avoid a relapse, and arranging contact with counselling groups and befrienders. This approach divorces the concept of care and attention from the overall context of section 21(1)(a). Thus isolated, the term can be given an artificially wide scope. That danger is exemplified by Mr Knaflers argument that care and attention covers all forms of social care and any form of practical assistance. This could lead to absurd results. Providing a refrigerator for M would in one sense have been doing something for him which (if he had no money) he could not do for himself. But as Lord Neuberger said, care and attention does not involve the mere provision of physical things, even things as important as food and accommodation. It is wrong to elevate the words of Lady Hale in Slough that care and attention involves doing something for the person which he cannot or should not be expected to do for himself into a compendious statement of all the elements of the care and attention or looking after concept. These words were merely illustrative of an aspect of the notion of what is meant by the stipulation. Nor in my view is Mr Knafler assisted by Lady Hales reference in the Slough case to watching over (an expression attributed to Mr Howell, rather than in terms adopted by her). Even if taken literally, that to my mind implies a more direct and regular involvement than Mr Wymans weekly sessions, which were aptly characterised by the judge as keeping an eye on him. Mr Wymans view was that the risk of self harm did not warrant the need for SL to be looked after; rather, he thought that it would be counter effective for the council to do so, because it would detract in SLs mind from his responsibility to manage for himself. That assessment cannot be regarded as irrational. What is involved in providing care and attention must take some colour from its association with the duty to provide residential accommodation. Clearly, in light of the authorities already discussed, it cannot be confined to that species of care and attention that can only be delivered in residential accommodation of a specialised kind but the fact that accommodation must be provided for those who are deemed to need care and attention strongly indicates that something well beyond mere monitoring of an individuals condition is required. Turning to the second issue, and assuming for this purpose that Mr Wyman was meeting a need for care and attention, was it available otherwise than by the provision of accommodation under section 21? Although it is unnecessary for us to decide the point, or to consider the arguments in detail, it seems to me that the simple answer must be yes, as the judge held. The services provided by the council were in no sense accommodation related. They were entirely independent of his actual accommodation, however provided, or his need for it. They could have been provided in the same place and in the same way, whether or not he had accommodation of any particular type, or at all. The Court of Appeals contrary view depended on reading the word available as meaning not merely available in fact, but as implying also a requirement for the care and attention to be reasonably practicable and efficacious. Thus, even the limited services provided by Mr Wyman could not be expected in practice to achieve their objectives unless combined with a degree of stability in his living arrangements. That indeed is the theme of the submissions for the interveners. Such a loose and indirect link is not in my view justified by the statutory language. In a slight variation on the theme, Mr Knafler submitted that in SLs case the provision of accommodation was a critical part of his social rehabilitation and that this was, by definition, an aspect of his care and attention. However, Slough has decided affirmatively that the need for accommodation cannot, in itself, constitute a need for care and attention. As I have explained, the line of reasoning advanced by the interveners and adopted by Laws LJ did not represent his preferred interpretation of section 21(1)(a), but was one to which he felt logically driven by authorities binding on him. At this level, it is open to us to hold that, on this part of section 21, the Court of Appeal took a wrong turning in Mani following the lead thought to have been given by ex p O. On one view the issue in ex p O was simply whether the infirm destitute were excluded by section 21 (1A), not whether they satisfied the other requirements of section 21(1)(a). However, Simon Brown LJ appears to have endorsed the proposition that if an applicants need for care and attention is to any extent made more acute by circumstances other than the lack of accommodation and funds, he qualifies for assistance [under section 21(1)(a)] ([2000] 1 WLR 2539 at 2548F H). Similarly, the question in Mani was posed in terms which assumed that, if answered in the affirmative, it would result, without more, in the local authority being under a duty to provide residential accommodation. I agree with Laws LJ that, to this extent, the judgments failed to give proper weight to the words otherwise available . in section 21(1)(a). In other words, there is a class of people who do have a need for care and attention which is made more acute by circumstances other than the lack of accommodation and funds but who nevertheless do not qualify for accommodation under section 21(2)(a) (what Laws LJ referred to as an undistributed middle). The need has to be for care and attention which is not available otherwise than through the provision of such accommodation. As any guidance given on this point in this judgment is strictly obiter, it would be unwise to elaborate, but the care and attention obviously has to be accommodation related. This means that it has at least to be care and attention of a sort which is normally provided in the home (whether ordinary or specialised) or will be effectively useless if the claimant has no home. So the actual result in Mani may well have been correct. The analysis may not be straightforward in every case. The matter is best left to the good judgement and common sense of the local authority and will not normally involve any issue of law requiring the intervention of the court. I agree with Burnett J that the present case is clearly distinguishable on the facts from the NASS case. That case had been argued on the footing that the applicants need for care and attention had arisen not solely because she was destitute but also (and largely) because she (was) ill Lord Hoffmann, para 49); and it was common ground that she had access to no other accommodation in which she could receive that care and attention (Lord Hoffmann, para 43). Furthermore, her needs (see para 17 above) affected both the nature and the location of the accommodation. In the present case, by contrast, care and attention can be, and is provided, independently of SLs need for accommodation or its location. Indeed, it was not in dispute that similar support services could be provided anywhere in the country. Conclusion For these reasons, I consider that Burnett J reached the right result for substantially the right reasons. I would accordingly allow the appeal and restore his order.

This case concerns the scope of the obligation of local authorities under s.21(1)(a) of the National Assistance Act 1948 to provide accommodation to individuals who, by reason of age, illness, disability or any other circumstance, are in need of care and attention which is not otherwise available to them. According to s.21(1A) of that Act, accommodation may not be provided under s.21(1)(a) to persons subject to immigration control if their need for care and attention has arisen solely because they are destitute or because of the physical effects, or anticipated physical effects, of destitution. SL is a failed asylum seeker from Iran. He arrived in the UK in 2006 and became homeless in October 2009. He was admitted to a psychiatric hospital following an attempted suicide in December 2009. SL was diagnosed as suffering from depression and post traumatic stress disorder. Upon discharge from hospital in April 2010, SL was assessed as needing regular sessions with mental health professionals and counselling groups, and also weekly meetings with a social worker. Westminster City Council says that it has no duty under s.21(1)(a) of the 1948 Act to provide SL with accommodation. It argues that he is not in need of care and attention for the purposes of that provision because his weekly meetings with a social worker are only a means of monitoring what, if any, care and attention he may need in the future. The council also argues that any assistance that SL may need is, in any event, otherwise available for the purposes of s.21(1)(a) because it is available to him regardless of his accommodation arrangements. The National Asylum Support Service (NASS) accepted that, if s.21(1)(a) was not applicable in this case, it would have an obligation to provide SL with accommodation. SL brought a claim for judicial review of the councils refusal to provide him with accommodation under s.21(1)(a). The High Court dismissed the claim, but the Court of Appeal reversed that decision. The council has accommodated SL pending the resolution of these proceedings. SL has since been granted indefinite leave to remain, which entitles him to a wider range of state benefits. However, the appeal was heard because it raises important questions of principle regarding s.21(1)(a). The Supreme Court allows the appeal, concluding that the Council does not owe a duty to provide SL with accommodation under s.21(1)(a) of the 1948 Act. Lord Carnwath gives the only judgment. There are three cumulative conditions which must be satisfied before s.21(1)(a) of the 1948 Act is applicable and accommodation must be provided thereunder: (i) the person in question must be in need of care and attention; (ii) the need must arise by reason of age, illness, disability or other circumstances; and (iii) the care and attention which is needed must not be available otherwise than by the provision of accommodation under s.21. The Council was reasonably entitled to take the view that the first and third of those conditions are not satisfied on the facts of this case [7, 39]. The support available from NASS is intended to be a last resort. In determining whether the conditions in s.21(1)(a) are satisfied, a local authority must disregard the support which might hypothetically be available from NASS [9]. The phrase care and attention means looking after, i.e. doing something for a person which he cannot or should not be expected to do for himself. It does not, however, cover all forms of social care and practical assistance. Care and attention for the purposes of s.21(1)(a) does not include the mere provision of physical things, even things as important as food and accommodation. The meaning of the words care and attention must take some colour from its association with the duty to provide residential accommodation. It is not confined to care and attention that can only be provided at specialised residential accommodation. However, something well beyond merely monitoring an individual is needed. The council was, therefore, entitled to conclude that the services it provided to SL do not qualify as care and attention [41 44]. The words not otherwise available in s.21(1)(a) govern care and attention not accommodation. The council was entitled to conclude that the services provided to SL were available otherwise than by the provision of accommodation under s.21 because they were entirely independent of SLs accommodation arrangements; the assistance could have been provided to SL in the same place and in the same way whether or not he had accommodation of any particular type, or at all. The Court of Appeal was wrong to read the word available in s.21(1)(a) as meaning not merely available in fact but also available in a manner that is reasonably practicable and efficacious. The acceptance of such a loose and indirect link with the provision of accommodation is not justified by the wording of s.21(1)(a). Whether the criterion of not otherwise available is satisfied in any particular case is best left to the judgment and common sense of the local authority concerned [8, 45 49].

London suffered from serious rioting for four days from 6 to 9 August 2011. The rioters caused extensive damage to property. Property owners and insurers suffered significant losses. Several owners of uninsured property, including two of the respondents in this appeal, lost their businesses when they became insolvent as a result of those losses. Property owners and insurers, which had compensated their assureds, submitted claims for compensation from the appellant police authority (MOPC) under section 2 of the Riot (Damages) Act 1886 (the 1886 Act). The MOPC contested those claims initially on both liability to compensate and the quantification of loss. The liability of the MOPC to pay compensation is no longer in issue. The question is the quantification of the claims. This appeal raises a question of statutory construction. It is whether persons who suffer loss when rioters destroy their property can in principle obtain compensation for consequential losses, including loss of profits and loss of rent, under section 2 of the 1886 Act, and if so on what basis. Factual background This appeal is concerned with one riotous incident which occurred on the third night of the London riots. At about 11.40 pm on 8 August 2011 a gang of youths broke into the Sony DADC distribution warehouse, which is situated in a business park on Solar Way in Enfield. The youths stole goods from the warehouse and also threw petrol bombs which caused a fire. The fire destroyed the warehouse and the stock, plant and equipment within it. The insurers of Sony DADC, which were the lessees of the warehouse, the insurers of the freehold owner of the warehouse, and companies which were customers of Sony DADC and whose stock in the warehouse had been destroyed, made claims against the MOPC. The legal proceedings In the Commercial Court of the High Court, Flaux J had to decide two preliminary issues. The first issue concerned liability and was whether the warehouse had been destroyed by persons assembled together riotously and tumultuously within the meaning of section 2(1) of the 1886 Act. In his judgment dated 12 September 2013 Flaux J held that it had been. The Court of Appeal (Lord Dyson MR, Moore Bick and Lewison LJJ) in a judgment dated 20 May 2014 upheld that finding. The second preliminary issue is the subject matter of this appeal. Flaux J held that section 2 of the 1886 Act provided compensation only for physical damage and not for consequential losses. The Court of Appeal reversed that finding. It held that section 2(1) of the 1886 Act provided a right to compensation for all heads of loss, including consequential loss, proximately caused by physical damage to property for which the trespassing rioter is liable at common law, save to the extent that they are excluded by the statute. The MOPC appeals to this court against that finding. The Riot (Damages) Act 1886 Section 2(1) of the 1886 Act as amended provides: Where a house, shop, or building in a police area has been injured or destroyed, or the property therein has been injured, stolen, or destroyed, by any persons riotously and tumultuously assembled together, such compensation as hereinafter mentioned shall be paid out of the police fund of the area to any person who has sustained loss by such injury, stealing, or destruction; but in fixing the amount of such compensation regard shall be had to the conduct of the said person, whether as respects the precautions taken by him or as respects his being a party or accessory to such riotous or tumultuous assembly, or as regards any provocation offered to the persons assembled or otherwise. (emphasis added) I can cover the other relevant provisions of the 1886 Act briefly. Section 2(2) allows the insurer which has indemnified its assured in whole or in part to claim compensation. Section 3(1) provides: Claims for compensation under this Act shall be made to the compensation authority of the police area in which the injury, stealing, or destruction took place, and such compensation authority shall inquire into the truth thereof, and shall, if satisfied, fix such compensation as appears to them just. Section 3(2) empowers the Secretary of State to make regulations governing when, how and under what conditions claims for compensation are to be made under the Act and subsection (3) provides that the regulations are to be published in the London Gazette. The compensation authority does not have the final say on the fixing of compensation, as section 4 provides that an aggrieved claimant may bring an action against the authority to recover compensation. Section 6 provides that the Act applies to damage to or the destruction of machinery, plant and equipment used in manufacturing, agriculture and mining. Finally, section 7 identifies the appropriate claimants if a church or chapel, or school, hospital, public institution or public building is damaged or destroyed. The Court of Appeals judgment In support of its view that the 1886 Act provides for the recovery of consequential losses, the Court of Appeal began with a linguistic analysis of section 2(1). It pointed out that the words, which I have emphasised in para 7 above, compensated for loss sustained by such injury, stealing, or destruction. This was loss that was caused by (i) damage to or destruction of a building, or (ii) damage, destruction or stealing of property in the building. Such loss could as a matter of linguistic analysis include consequential losses, such as the loss of rent while an owner repaired his building. Secondly, the other provisions in the 1886 Act, including the now repealed preamble (which I discuss in para 31 below), did not militate against this view. Case law on predecessor legislation suggested that remedial statutes should be given a liberal interpretation. Thirdly, that case law, which I discuss in paras 20 to 23 below, also suggested a principle that the relevant community, which was then the hundred, stood as sureties for the trespassers. There was no reason to think that a rioter would not have been liable in tort for consequential losses before Parliament legislated in 1714. Thus the local authority incurred such liability under statute. The 1886 Act did not depart from what the Court of Appeal described as the fundamental standing as sureties principle. Fourthly, the court rejected any reliance on the regulations which the Secretary of State promulgated in the London Gazette in 1886 as an aid to the interpretation of the 1886 Act. Fifthly, the court rejected for lack of evidence a submission on behalf of the MOPC that there was a settled practice of interpreting the 1886 Act as excluding compensation for consequential losses. Sixthly, the court considered that there was an anomaly if the 1886 Act did not cover consequential loss. An owner of a commercial building which was damaged in a riot might choose to sell it in a damaged state and claim as his compensation the diminution in value caused by the physical damage. Where a building was valued by reference to its capacity to generate income, part of that diminution in value could be attributable to loss of rent or loss of profits that the purchaser would suffer pending the completion of remedial works. By contrast, if an owner decided to repair the building and suffered a loss of rent or a loss of profits while the remedial works were carried out, he could not recover such losses if the 1886 Act did not extend to consequential losses. The court said that there was no rational basis for imputing to Parliament an intention to allow recovery for such losses as part of a claim for diminution of value but to exclude a free standing claim for losses of the same character. Seventhly and finally, the court derived no assistance from parallel Scottish legislation, namely section 10 of the Riotous Assemblies (Scotland) Act 1822 (3 Geo IV, c 33) because of its use of different language. The MOPCs challenge and the respondents answer Lord Pannick QC for the MOPC submitted that Flaux J had reached the correct conclusion on the interpretation of section 2 of the 1886 Act and that his order on this point should be restored. In support of his contention he relied on what he called the purpose and the plain meaning of the words in section 2(1) and also on sections 3 and 7 and the repealed preamble of the 1886 Act. He also relied as a contemporaneous exposition of meaning on the first regulations under the 1886 Act which the Home Secretary promulgated on 28 July 1886. He departed from the argument of settled practice which had been included in his written case, accepting that evidence of such practice had not been adduced. But he submitted that the historical background to the 1886 Act and in particular the history of prior legislation and judicial pronouncements on that legislation supported the view that the legislation from the outset was a self contained statutory scheme for compensation which was not co extensive with the tortious liability of the trespasser. In the prior legislation the compensation was limited to physical damage to the premises or property in it. The 1886 Act did not materially alter the nature of that compensation scheme. Mr Michael Crane QC for the first to third respondents presented the issue for this court as being whether the 1886 Act excludes in principle a head of loss caused by physical damage to property inflicted by rioters and otherwise compensable under the English law of tort. In advocating a negative answer to that question, he submitted that the words of the 1886 Act contained no such limitation and that the history of the legislation since the 1714 Riot Act (1 Geo I, c 5) was consistent with the ancient notion that the inhabitants of the hundred stood surety for the good behaviour of their fellow subjects. The principle was that the liability in damages of the rioter should be transferred to the hundred. That principle survived the transfer by the 1886 Act of that liability from the hundred to the police authority. The 1886 Act contained no clear language to limit the liability of the police authority by excluding the recovery of consequential loss. In short, the history of the legislation showed that the heads of loss recoverable from time to time in an action against the trespasser were recoverable as a matter of strict liability initially from the hundred and since 1886 from the police authority. The Court of Appeal had been correct in concluding that the police authority stood in the shoes of the trespasser save to the extent that the 1886 Act provided otherwise. The appropriate analogy in construing the 1886 Act was with a strict liability in tort, arising from the failure of the police to maintain law and order. He founded his argument also on the anomaly which had carried weight in the judgment of the Court of Appeal (its sixth reason which I have summarised in para 10 above). Mr Simon Pritchard for the fourth and fifth respondents, which had been trading companies, made submissions adopting and supporting those of Mr Crane. He also explained that those respondents were in large part uninsured and that Sony DADCs liability as bailee had been restricted by contract to the manufacturing replacement cost of damaged stock. Their inability to recover the market value of their stock and their lost profits had precipitated their insolvency. Discussion The appeal, as I have said, raises a question of statutory construction. While the arguments have been wide ranging, the resolution of the dispute is to be found in the words of the 1886 Act, interpreted against the backdrop of the prior legislative history. In my view this is a case in which history rather than legal theory casts light, revealing the correct answer. Linguistic analysis of the relevant provisions of the 1886 Act by itself does not provide a clear cut answer. Section 2(1) speaks of compensation for loss by the injury or destruction of a building or the injury, stealing or destruction of property within the building. Those statutory words do not disclose whether the loss which the claimant has sustained by the destruction etc of his property is simply the damage to the property, to be compensated by payment of the cost of repair or the diminution in value of the building or other property, or extends to consequential loss, such as the loss of rent or loss of profit which the claimant would have derived from the property. Section 6 of the 1886 Act provides that compensation will be payable in the same way for the injury or destruction of manufacturing or agricultural machinery and fixtures and for equipment in a mine or quarry. By providing that the Act will apply in like manner to such property, it casts no light on the scope of section 2. What is striking, however, is that the 1886 Act does not expressly provide compensation for either (a) personal injury caused by rioters and resulting medical expenditure or (b) damage to property in the streets such as a parked car. We were referred to no jurisprudence to support the view that such losses could be claimed under the 1886 Act even where they resulted from damage to or the collapse of a building. On any view, therefore, the Act provides only partial compensation for damage caused by rioters. Further, those limitations show that it is not correct to interpret the words sustained loss by such destruction as creating an unqualified causal test to which the normal rules of causation in tort can readily be applied. I do not find the other provisions of the 1886 Act to be of any assistance in addressing the disputed question. Section 3 requires the compensation authority of the police area to fix such compensation as appears to them just, while section 4 allows persons who are aggrieved by the decision of the compensation authority to raise an action against it in order to obtain a judicial determination of their claims. Section 7 identifies who may be the claimants for damage to a church, chapel, school, hospital, public institution or public building by deeming them to have sustained loss from such injury, stealing, or destruction. It goes on to state that claims may be made in relation both to the building and to the property therein. I do not interpret its speaking of loss from destruction etc as altering the test in section 2. Nor do I construe the phrase in relation both to the building as casting light on the scope of the claims that may be made in relation to a building. Such light comes in my view from the interpretation of the 1886 Act in the context of the prior legislative history since 1714, to which I now turn. Parliament first provided for compensation for riot damage in 1714 in response to the public disorder which followed the succession to the throne of Great Britain of George, the Elector of Hanover, as George I. Section 1 of the Riot Act 1714 made it a felony punishable by death for an unlawful assembly of 12 or more persons to fail to disperse after a justice of the peace or other specified official had read a proclamation commanding them to do so. The procedure, which was a precondition of the felony, became popularly known as reading the Riot Act. Section 4 made it a felony punishable by death for rioters to demolish or pull down buildings for religious worship, dwelling houses and farm buildings. Section 6, provided that when rioters had demolished or pulled down all or part of such buildings, the inhabitants of the hundred in which such damage shall be done, shall be liable to yield damages to the person or persons injured and damaged by such demolishing or pulling down wholly or in part The 1714 Act did not specify the scope of the damages to be paid by the local community. Cases, which followed later riots, enabled judges to give some guidance. In Ratcliffe v Eden (1776) 2 Cowp 485 (98 ER 1200), which followed upon a riot by sailors in Liverpool, the Court of Kings Bench was concerned with the question of whether the victim of a riot could recover compensation not only for the damage to his house but for also the destruction of the furniture and household goods within his house. The hundred argued that the victim could not recover for the furniture and goods as their destruction was a separate and independent act from the damage to the house. The court rejected this defence. Lord Mansfield (at p 488) explained that the 1714 Act had altered the nature of the offence; rioters were no longer trespassers but felons and were to be hanged. Before the Act the trespassers would have been liable in damages. Under the Act the inhabitants of the hundred instead were liable in damages and this was an inducement to them to perform their duty of preventing or suppressing riots. He stated: This is the great principle of the law, that the inhabitants shall be in the nature of sureties for one another. It is a very ancient principle; as old as the institution of the decennaries by Alfred, whereby the whole neighbourhood or tithing of freemen were mutual pledges for each others good behaviour. The same principle obtains in the Statutes of Hue and Cry. It is the principle here. As the destruction of the furniture and goods occurred at the same time as the damage to the house, it was part of the demolition of the house just as it would be if the pulling down of the house crushed the furniture. Ashhurst J took the same view. Aston J advocated a liberal interpretation, at p 489: The object and principle of this Act was, to transfer the damages occasioned by the trespass, from the rioters to the hundred; to make it felony in the offenders themselves, and to put the party injured in the same state as before. It is a remedial law, and ought to be extended. Other cases followed the anti Catholic Gordon Riots in London in June 1780, which caused extensive damage and destruction of property, including Lord Mansfields house in Bloomsbury Square. In Hyde v Cogan (1781) 2 Doug 699 (99 ER 445) the court again considered whether the hundred was liable for the destruction of furniture in a house as well as the demolition of the house. In this case the argument advanced on behalf of the hundred was that the 1714 Act was penal against both the trespasser and the hundred and ought to be interpreted narrowly. Lord Mansfield, although present, declined to express an opinion, leaving Willes, Ashhurst and Buller JJ to decide the case. The judges rejected the contention that section 6, which provided for the compensation, was penal and held that it was remedial; Buller J said that, as a result, it should be interpreted liberally. In that bygone age when, according to Willes J, the furniture in a London house might be worth twice as much as the house itself, that liberal interpretation brought household goods within the scope of the statutory compensation scheme. The court also had before it a note of the judgment of Lord Loughborough in the Court of Common Pleas in the case of Wilmot v Horton, which had been decided earlier in the same year. In that case Lord Loughborough gave both the remedial nature of the Act and its substitution of the liability of the hundred for that of the offender as the reasons for allowing the recovery of compensation for the destruction of furniture within the house. In Mason v Sainsbury (1782) 3 Doug 61 (99 ER 538) the question was whether insurers, who had indemnified the owner for the damage to his house in those riots, could maintain an action in the name of the assured against the hundred under the 1714 Act. In answering the question affirmatively, the Court of Kings Bench again explained that the Act put the hundred in the place of the trespassers. Lord Mansfield stated (at p 64): the Act puts the hundred, for civil purposes, in the place of the trespassers; and upon principles of policy, as in the case of other remedies against the hundred, I am satisfied that it is to be considered as if the insurers had not paid a farthing. In London Assurance Co v Sainsbury (1783) 3 Doug 245 (99 ER 636) the court held that insurers could not sue the hundred in their own names and overturned the award of damages by a jury. Mr Crane pointed out that the jury had awarded damages on the buildings, rent, and stock in trade, in both houses and furniture (emphasis added). Indeed it did; but its judgment was reversed on other grounds and this court was referred to no other case in which the courts have allowed recovery for anything other than physical damage to property. Moving on over two centuries, in Yarls Wood Immigration Ltd v Bedfordshire Police Authority [2010] QB 698 Rix LJ at para 54 described the rationalisation of the liability of the hundred and now the police authority in these terms: It seems to me that what Lord Mansfield had to say about that question, so much closer to the origin of the first Riot Act 1714, still retains pertinence, expressing as it does the common sense of the matter. It is for the sake of the party whose property has been damaged, it is to encourage the inhabitants (now the police force) of the locality, but including the party injured himself, all to assist in the preservation of the peace, it is to share the burden both of keeping the peace and of the misfortune of loss or injury. Moreover, as is so often the case with strict liability, it is because those who are liable to compensate are also regarded by the law as standing in the shoes of the wrongdoers themselves (as, for instance, in the case of the vicariously liable), in part because their obligation, their strict obligation, is to prevent what has happened happening. I recognise the force of the respondents emphasis on the statements of principle that the community (and now the police force) stood as sureties for the wrongdoer. But, for the following three reasons, I do not accept that the rationalisation can bear the weight that the respondents seek to place on it. First, while the 1714 Act imposed on the hundred the obligation to compensate only for loss occasioned by the destruction of, or damage to, buildings, which the case law to which I have referred extended to furniture and household goods, the prior law of hue and cry imposed no such restriction. The obligation on the community to raise hue and cry (hutesium et clamor) when encountering an offender dates back to before the Norman Conquest, as Lord Mansfield said. For example, John Hudson, The Oxford History of the Laws of England, (2012) vol 2, p 171, refers to a statute of King Cnut (II Cn, c 29) imposing the obligation on someone who failed to raise hue and cry to make amends at the rate of the thiefs wergeld, in other words to pay compensation to the victim. Historically, wergild and bot, which had been features of law in England since at the latest the reign of the Kentish king, Aethelbert, in the late sixth and early seventh centuries, extended to payment of compensation for injuries or death and continued as part of the legal scene after the Norman Conquest at least into the 12th century, and afterwards in out of court settlements: Professor Anthony Musson, Wergeld: Crime and the compensation culture in medieval England, www.gresham.ac.uk. Codes were made from time to time establishing fixed values for specified types of injury and damage. The Statute of Winchester of 1285 (13 Edw I) made the hundred answerable for any theft or robbery if it failed to apprehend and deliver up the offender. Pollock and Maitland, The History of English Law before the Time of Edward I (1898) vol 1, pp 648 649, describe this as a form of joint and several liability to the victim. The Statute of Hue and Cry 1584 1585, to which reference was made in section 6 of the 1714 Act, allowed the victim to prosecute the hundred by way of special action on the case for damages where the offender was not apprehended. It also set up a system by which a Justice of the Peace and constables could recover the damages from the inhabitants of the hundred and pay the victims, thereby sharing the burden within the community. Secondly, while under the 1714 Act the hundred incurred strict liability for the riot, the prior hue and cry legislation allowed the community to escape liability if hue and cry were raised and the offenders caught. Under the older law, therefore, the hundred were not sureties for the offender unless they failed to apprehend him. It may have been the intention of Parliament that because the 1714 Act made riot a felony punishable by death, with the result that the offender would not be around to pay compensation and as, like other felons, his assets would be forfeited to the Crown, the injured party should have a right of compensation against the hundred in substitution for his action of trespass. Be that as it may, it is clear that the principle on which the respondents founded could vary in its application. Thirdly, and to my mind most importantly, the legislative history after 1714 undermines the respondents reliance on the general principle in the interpretation of the 1886 Act. The toughening of the criminal law which the 1714 Act represented was extended by the notorious Criminal Law Act 1722 (9 Geo I, c 22), commonly known as the Black Act. This introduced many new statutory felonies in response to the activities of poaching gangs (known as blacks because they blackened their faces) after the economic downturn caused by the South Sea Bubble. Section 7 of the Black Act provided for compensation from the hundred for the damages sustained by the killing and maiming of cattle, the cutting down of trees and the destruction of agricultural buildings and equipment. In the Malicious Injury Act 1769 (9 Geo III, c 29), in order to remove uncertainties as to the scope of the 1714 Act, Parliament made it a felony for any rioter to demolish, destroy or damage any mills or specified engines and equipment used in the mining industry or fences made for enclosing land by virtue of Acts of Parliament. Compensation for damage by rioters to mills and to works associated with mills was introduced by the Compensation for Injuries to Mills etc Act 1801 (41 Geo III, c 24). In response to the developing industrial revolution, Parliament enacted the Malicious Damage Act 1812 (52 Geo III, c 130) which extended the compensation regime to protect industrial buildings and equipment by creating statutory felonies of (a) maliciously setting fire to commercial and industrial buildings and engines and (b) demolishing or beginning to demolish such buildings and equipment in the course of a riot. Section 3 of the Act provided that persons injured by the damage caused by rioters (in (b) above) were empowered to recover the value of such erection, building or engine, and of the machinery belonging thereto, or used therein, which shall be destroyed in such demolishing as aforesaid, or the amount of the damage which may be done to any such erection, building or engine or machinery aforesaid, in such tumultuous and riotous demolishing in part as aforesaid Section 2 of the Malicious Damage Act 1816 (56 Geo III, c 125) provided for compensation for destruction or damage by rioters of equipment used in the mines and collieries. Like the 1812 Act above it empowered the claimants to recover the value of such property. Section 38 of the Seditious Meetings Act 1817 (57 Geo III, c 19) imposed on the inhabitants of the hundred the liability to pay full compensation for the destruction of or damage or injury to any house, shop, or other building whatever or for the destruction, taking away or damage of any fixtures thereto attached, or any furniture, goods, or commodities in those buildings in the course of a riot. Thereby it gave statutory effect to the 18th century decisions which included furniture and household goods within the scope of the compensatory regime of the 1714 Act. The Riotous Assemblies Act 1822 (3 Geo IV, c 33) introduced separate provisions for compensation in England and Wales on the one hand and Scotland on the other. Section 1 of the Act prohibited the raising of proceedings against the hundred under the legislation mentioned above if the damage sustained in the riot did not exceed 30. Section 10, which established a new compensation regime for Scotland, survived the repeal of the English provisions by the Act which I discuss next. The Remedies against the Hundred (England) Act 1827 (7 & 8 Geo IV, c 31) is particularly important as it amended and consolidated the prior legislation and as it remained in force until repealed by the 1886 Act. Section 2 provided for compensation for the demolition or destruction in whole or in part of a wide range of buildings and industrial machinery, requiring the hundred to yield full compensation to the person or persons damnified by the offence, not only for any damage so done to any of the subjects hereinbefore enumerated, but also for any damage which may at the same time be done by any such offenders to any fixture, furniture, or goods whatever, in any such church, chapel, house, or other of the buildings or erections aforesaid. In my view this wording of the 1827 Act, like the 1812 Act and the 1816 Act before it, makes it clear that the statutory compensation was confined to physical damage to property. repealed preamble stated: I can detect nothing in the 1886 Act which removed that limitation. The now Whereas by law the inhabitants of the hundred or other area in which property is damaged by persons riotously and tumultuously assembled together are liable in certain cases to pay compensation for such damage, and it is expedient to make other provision respecting such compensation and the mode of recovering the same. (emphasis added) There was no suggestion in the preamble of any intention to alter the basis on which compensation would be paid. The 1886 Act made the following principal changes to the arrangements for statutory compensation: (i) As a result of changes in local government, it transferred liability to pay compensation from the hundred to the police authority (section 2(1)); (ii) The Secretary of State became responsible for creating and regulating the procedure by which claims could be made, the conditions for those claims and the circumstances in which they might be rejected (section 3(2)); (iii) The police authority was charged with inquiring into the claims and fixing compensation as appeared to it to be just (section 3(1)); (iv) The police authority was directed to have regard to the conduct of the claimant, such as any provocation of the rioters or failure to take proper precautions to protect his property, when deciding what compensation was due (section 2(1)); (v) Compensation was payable not only if a building or property inside it had been destroyed or damaged by rioters but also if property in the building had been stolen by them (section 2(1)); (vi) Insurers were given a right to claim compensation in their own names and the right of the insured person who had received insurance payments was correspondingly reduced (section 2(2)); and (vii) A claimant who was dissatisfied with the police authoritys decision could commence an action in the courts to recover compensation, which could not exceed the amount claimed from the police authority (section 4(1)). None of the provisions suggested any intention to extend the measure of compensation beyond physical damage to property. In my view it is not correct to use a judicial rationalisation of a statutory scheme to override the words which Parliament has used. From 1714 to this day, the community, whether in the form of the hundred or the police authority, has not stood in the shoes of the offender for all purposes of compensation. As I have said (in para 16 above) the statutory provisions have given only partial compensation for the loss, injury and damage which a person may suffer as a result of rioting. I see no reason for inferring that Parliament intended that the statutory compensation should extend beyond the cost of repairing physical damage to property. When regard is had to the words of the statute, in the context of the prior legislative history, there is no reason to think that Parliament ever intended that the compensation scheme should mirror the offenders liability in tort or that its scope should develop as the law of damages for tort developed. While the adoption of a liberal interpretation, as enjoined by the 18th century case law, justified the inclusion of furniture and household goods within the scheme if they were damaged as a result of the demolition of the building or at the same time in the course of the same riot, it cannot alter the nature of the compensation scheme. In summary, I consider that the words of the 1886 Act should be construed in the light of the prior legislation. The 1714 Act used open textured wording, requiring the payment of damages to persons injured or damaged by the demolition of their houses. The courts liberal interpretation extended the hundreds liability to cover physical damage to household goods and furniture but no further. This limited extension was incorporated into the 1817 Act. Over time, statutory innovations extended the scope of the compensation to cover agricultural buildings, mills, commercial and industrial buildings, the contents of those buildings, and mines and collieries. There is nothing in the wording of the 1886 Act that supports an intention to extend the scope of the compensation to cover consequential loss. Several provisions suggest a contrary intention. I refer in particular to the absence of compensation for personal injury, or for injury to property other than buildings and their contents, together with the unusual provision for compensation to be reduced according to very broad assessments of the conduct of the claimant. Together, they support the conclusion that the 1886 Act, like its predecessors, created a self contained statutory scheme which did not mirror the common law of tort. Further, I do not accept that there is any anomaly in this interpretation. A claim for loss of rent or loss of profits in addition to the cost of restoring or replacing a building is different from an estimation of the diminution in value of a commercial building, in which the valuation of the undamaged building had regard to its income earning potential. They are different heads of loss. A claim for the diminution in value of the building is a measure of the compensation available for the damage to the building itself, for example if the owner chooses to sell the damaged building instead of restoring it. If that diminution in value is greater than the cost of the restoration of the building, the claim will normally be capped at the latter figure. Even if there were an anomaly, that would not entitle the court to refuse to give effect to the words of the statute. In the debate in this appeal counsel speculated on when the common law first recognised a claim for consequential loss. This court was referred to The Kate [1899] P 165, an Admiralty case concerning the collision of two vessels. The court held that the proper measure of damages was the value of the lost vessel at the end of the voyage and also the profits lost under the charter party. In his judgment, the President, Sir F H Jeune, supported that conclusion by referring to The Columbus (1849) 3 Wm Rob 158. In the absence of further citation of authority, I am prepared to assume that by 1886 the common law of damages for tort would in principle include a claim for lost rent or lost profits arising from damage to a building. But that does not assist the respondents unless they could establish that the 1886 Act was intended to mirror the common law. Mr Crane also referred to Bedfordshire Police Authority v Constable [2009] 2 All ER (Comm) 200, in which the Court of Appeal addressed the question whether a police authoritys liability under the 1886 Act for the damage to property caused by a riot in an immigration detention centre was covered by its insurance contract, which gave an indemnity in respect of all sums which the assured may become legally liable to pay as damages. The court, in the leading judgment of Longmore LJ, held that it was because the police authority was notionally in breach of its responsibility for preservation of law and order (paras 24 26). I have no difficulty with that conclusion, which is consistent with the thinking behind the medieval practice of hue and cry. But it falls far short of equating the statutory scheme with the wrongdoers civil liability in tort. I can deal with the other submissions relatively briefly. First, in reaching my conclusion on the meaning of the 1886 Act I do not rely on the 1886 regulations which the Secretary of State promulgated in the London Gazette as an aid to the interpretation of the Act. The regulations were not laid before Parliament. But that of itself, while affecting their weight, would not exclude them from consideration as a guide to statutory meaning in accordance with Lord Lowrys guidance in Hanlon v The Law Society [1981] AC 124, 193G 194G. They are consistent with the view which I have reached of the meaning of the Act by other means and might have been an important adminicle of evidence if the MOPC had produced evidence in support of a case of settled practice. Secondly, section 10 of the Riotous Assemblies (Scotland) Act 1822 (3 Geo IV, c 33), formerly part of the Riotous Assemblies Act 1822 which I mentioned in para 29 above, gives only limited support to my view. Although my conclusion about the 1886 Act tallies with that reached by Temporary Judge, Morag Wise QC, in her opinion on the Scottish provision in the 1822 Act in Board of Managers of St Marys Kenmure v East Dunbartonshire Council 2013 SLT 285, there are, as she recognised, minor differences between the wording of the Scottish provision and that of both the English provisions in the 1822 Act and the 1886 Act, which might have supported a different interpretation of the English provisions. In any event, I do not need to rely on the Scottish provision in reaching my clear view on the meaning of the 1886 Act. Thirdly, the MOPC advances an argument of public policy. The argument runs thus. The common law does not impose a duty of care on the police to prevent a third party injuring a person or damaging property: Michael v Chief Constable of South Wales Police [2015] AC 1732. The strict liability of the police under the 1886 Act is an exception to the common law principle of no liability. Therefore the court should be slow to widen the liability imposed by the Act. I am not persuaded by this argument. In my view, it is difficult to use the public policy of the common law as an interpretative tool because the statutory compensation has never sought to mirror the common law, but has created a self contained regime for compensation for property damage caused by rioters. Conclusion For these reasons I would allow the appeal.

London suffered from serious rioting from 6 to 9 August 2011. In one incident at 11:40pm on 8 August 2011, a gang of youths broke into the Sony DADC distribution warehouse at the business park on Solar Way in Enfield. They stole goods from the warehouse and threw petrol bombs, starting a fire which destroyed the warehouse and the stock, plant and equipment within. The insurers of Sony DADC (which were the lessees of the warehouse), the insurers of the freehold owner of the warehouse, and companies (which were customers of Sony DADC and whose uninsured stock in the warehouse had been destroyed) made claims for compensation from the appellant, the Mayors Office for Policing and Crime (the MOPC) under s.2 of the Riot (Damages) Act 1886 (the 1886 Act). The MOPC contested those claims on both its liability to pay compensation and the quantification of loss. The High Court and the Court of Appeal decided that the MOPC was liable and that finding is no longer in issue. The remaining issue before the Supreme Court is the quantification of the claims, which raises a question of statutory construction: whether persons who suffer loss when rioters destroy their property can in principle obtain compensation for consequential losses, including loss of profits and loss of rent, under s.2 of the 1886 Act. The High Court held that s.2 provided compensation only for physical damage and not for consequential losses, but the Court of Appeal reversed that decision, holding that s.2 provided a right to compensation for all heads of loss, including consequential loss, proximately caused by physical damage to property for which the trespassing rioter is liable at common law. The Supreme Court unanimously allows the MOPCs appeal. Lord Hodge gives the lead judgment, with which the other Justices agree. The wording of the 1886 Act by itself does not provide a clear cut answer to the issue. In particular, s.2(1) does not clarify whether the loss for which a claimant may claim compensation is simply the physical damage to his property, or extends to consequential losses [14 15, 17]. The 1886 Act does not expressly provide compensation for either (a) personal injury caused by rioters, or (b) damage to property in the streets (e.g. a parked car) and there is no jurisprudence to support the view that such losses could be claimed. On any view, therefore, the Act provides only partial compensation for damage caused by rioters [16]. Legislative history The 1886 Act must be construed in the light of the prior legislative history [13]. Parliament first provided for compensation for riot damage in the Riot Act 1714 (the 1714 Act). Section 6 provided that when rioters had demolished certain buildings, the inhabitants of the hundred (an historical administrative subdivision of a county or shire) were liable to pay damages to the injured party [18 19]. The 1714 Act did not specify the scope of the damages to be paid by the hundred, so guidance was provided by the courts, which extended the right to compensation for loss occasioned to furniture and household goods [20 23]. However, this case law does not support a general principle that the hundred stood as sureties for the wrongdoer [24]. This is because: (1) While the 1714 Act imposed on the hundred the obligation to compensate only for loss occasioned by the destruction of, or damage to, buildings, the prior laws governing the hundreds liability for a failure to raise hue and cry imposed no such restriction [25]. (2) While under the 1714 Act the hundred incurred strict liability for the riot, the prior hue and cry legislation allowed the community to escape liability if hue and cry were raised and the offenders caught: the hundred were not sureties for the offender unless they failed to apprehend him [26]. (3) Most importantly, the legislative history after the 1714 Act shows there was no broad principle of compensation. In particular, the wording of the Remedies against the Hundred (England) Act 1827 (which amended and consolidated the prior legislation and remained in force until the 1886 Act) makes it clear that the statutory compensation was confined to physical damage to property [27 30]. The 1886 Act made certain changes to the statutory scheme, including transferring the liability to pay compensation from the hundred to the local police authority, and directing the police authority to have regard to the claimants conduct when deciding what compensation was due. None of these changes suggest an intention to extend the measure of compensation beyond physical damage to property [31 32]. When regard is had to the words of the 1886 Act in the context of its legislative history, there is no reason to think that Parliament ever intended that the statutory compensation scheme should mirror the rioters liability in tort, or should develop as the law of damages for tort developed [33]. The Act, like its predecessors, sets out a self contained statutory compensation scheme which does not extend to cover consequential losses [34].

This is an appeal from an interlocutor of the First Division of the Inner House of the Court of Session (the Lord President (Hamilton), Lord Kingarth and Lord Brodie) of 10 September 2010: [2010] CSIH 78, 2010 SLT 1047, 2011 SC 70. By that interlocutor the First Division allowed a reclaiming motion by Blajosse Charlotte Eba against an interlocutor of the Lord Ordinary (Lord Glennie) dated 31 March 2010: [2010] CSOH 45, 2010 SLT 547. It refused a cross appeal against that interlocutor by the Advocate General for Scotland, representing the Department for Work and Pensions. The issue with which it was concerned was the scope of the remedy of judicial review in the Court of Session of decisions of the Upper Tribunal established under the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act) which are excluded from review by way of an appeal. The Lord Ordinary had dismissed Ms Ebas petition for judicial review of a decision of Judge DJ May QC, sitting as a judge of the Upper Tribunal, dated 6 February 2009. Judge May had refused her application for permission to appeal to the Upper Tribunal against the refusal on 27 January 2009 by the First tier Social Entitlement Chamber of her appeal against the refusal by the Department on 11 February 2008 of her claim to disability living allowance. The First Division, reversing the decision of the Lord Ordinary, held that the decision of the Upper Tribunal on this matter was amenable to judicial review under the supervisory jurisdiction of the Court of Session and that the grounds on which it could be reviewed were not subject to any limitation on policy or discretionary grounds: para 65. Ms Eba had also sought judicial review of the decision by the First tier Tribunal on 27 January 2009 to refuse her application for permission to appeal to the Upper Tribunal. Section 11(3) of the 2007 Act provides that the right to appeal to the Upper Tribunal may be exercised only with permission. Section 11(4) provides that permission may be given by the First tier Tribunal or the Upper Tribunal. But, as there was an alternative remedy against the decision of the First tier Tribunal because permission could also be sought from the Upper Tribunal, the focus of attention throughout these proceedings has been on the decision of the Upper Tribunal to refuse permission: see the Lord Ordinary, 2010 SLT 547, para 1. It should be noted that there was no right of appeal to the Court of Session against the Upper Tribunals decision to refuse permission, as section 13(1) of the 2007 Act provides that the right to appeal to that court on any point of law arising from a decision of the Upper Tribunal does not extend to an excluded decision. Section 13(8)(c) provides that for the purposes of section 13(1) an excluded decision includes any decision of the Upper Tribunal on an application under section 11(4) for permission to appeal. So the only way that unappealable decisions of that kind would be open to challenge in Scotland would be by way of judicial review in the Court of Session under the supervisory jurisdiction of that Court. The issues The appeal by the Advocate General in Ms Ebas case was heard together with appeals by the applicants against the decision of the Court of Appeal in R (Cart) v Upper Tribunal [2010] EWCA Civ 859, [2011] 2 WLR 36, [2011] QB 120 and that by Sullivan LJ in MR (Pakistan) v Upper Tribunal [2010] EWHC 3558 (Admin) which raised the same issue. In Cart the Court of Appeal held that the unappealable decisions of the Upper Tribunal were amenable to the supervisory jurisdiction of the High Court in those cases only where the Upper Tribunal had exceeded its own jurisdiction in the sense understood prior to the decision of the House of Lords in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147 or where it conducted the hearing so unfairly as to render its decision a nullity: [2011] 2 WLR 36, para 37. In setting the boundaries of the supervisory jurisdiction in this very narrow way in relation to the Upper Tribunal, the Court of Appeal in Cart applied the decision in R (Sivasubramaniam) v Wandsworth County Court [2002] EWCA Civ 1738, [2003]1 WLR 475. In that case the Court of Appeal held that the supervisory jurisdiction was not available for the review of decisions of the county courts, save only in very rare and exceptional circumstances. These were where it was sought on the ground of an absence of jurisdiction as opposed to a mere error of law, or where there had been a procedural irregularity such that the applicant had been denied a fair hearing. In MR (Pakistan) Sullivan LJ held that the reasoning in Cart, in which the decision that was under review came from the Social Entitlement Chamber, applied to unappealable decisions of the Immigration and Asylum Chamber of the Upper Tribunal too. The Lord Ordinary in Ms Ebas case followed the reasoning of the Divisional Court in Cart: 2010 SLT 547, para 76. The Advocate General joined with the Secretary of State for Justice, the Secretary of State for the Home Department and the Child Maintenance and Enforcement Commission in supporting the decision of the Court of Appeal in Cart and of the High Court in MR (Pakistan), and there is much that is common ground between all three appeals. But a separate judgment is needed in Ms Ebas case in view of the questions that her case raises that are of particular interest in Scotland. The principal issue in her case relates to the grounds on which a decision of the Upper Tribunal to refuse permission to appeal under section 11(4) of the 2007 Act is amenable to the supervisory jurisdiction of the Court of Session. Ms Eba submits that unappealable decisions of the Upper Tribunal are amenable to the supervisory jurisdiction of the Court of Session on the grounds applicable to public tribunals in general which, she maintains, are without limit and have never been, and should not be, circumscribed. This issue lies at the heart of the relationship between the Court of Session and the new system for specialist tribunals which was created by the 2007 Act. On the one hand there is the rule of law, which is the basis on which the entire system of judicial review rests. Wherever there is an excess or abuse of the power or jurisdiction which has been conferred on a decision maker, the Court of Session has the power to correct it: West v Secretary of State for Scotland 1992 SC 385, 395. This favours an unrestricted access to the process of judicial review where no other remedy is available. On the other hand there is the principle of finality. There is obvious merit in achieving finality at the tribunal level in the delivery of administrative justice. The new structure introduced by the 2007 Act lends force to this argument. The importance of the issue is not, of course, confined to Scotland. The new, simplified statutory framework for tribunals which the 2007 Act created extends to England and Wales and to Northern Ireland too. The provisions of section 11 as to the right to appeal to the Upper Tribunal with permission (or, in Northern Ireland, leave) on any point of law arising from a decision made by the First tier Tribunal apply to those jurisdictions as well. The provisions of section 13(1) and section 13(8)(c), which exclude from the right of appeal under section 13(2) decisions of the Upper Tribunal to refuse permission to appeal to the Court of Session, apply also to refusals of permission to appeal to the Court of Appeal in England and Wales or the Court of Appeal in Northern Ireland. There are however two further issues which need to be considered in Ms Ebas case. The first arises because there are significant differences between the circumstances in which the remedy of judicial review is available in England and Wales and Northern Ireland and the right of the citizen to invoke the supervisory jurisdiction of the Court of Session in Scotland. The first question, then, is whether in Scotland too the scope for judicial review of unappealable decisions of the Upper Tribunal should be restricted in some way. The Advocate Generals position is that the intention of Parliament was that the Upper Tribunal should be amenable to judicial review to the same extent in the Court of Session as in the High Court in England, and that the First Division of the Court of Session was wrong to hold otherwise. For Ms Eba it is submitted that this argument should be rejected as, whatever may be held to be the position in England, the suggestion that the grounds of judicial review of decisions of the Upper Tribunal should be restricted in Scotland is not supported by authority and to adopt it would destroy the consistency of Scots law. The position in Scotland is also more complicated than that which arises in England and Wales. The 2007 Act can be said to have effected a complete re ordering of the system of administrative justice in England and Wales. But that is certainly not true of Scotland. There are a large number of tribunals and other similar bodies which sit in Scotland which have not been included within the new structure. They are mainly confined to the Scottish tribunals that deliver administrative justice in matters devolved under the Scotland Act 1998 whose functions cannot be transferred to either the First tier or the Upper Tribunal by order of the Lord Chancellor: section 30(5)(a). Various Scottish tribunals which exercise functions in relation to devolved matters have been restructured under legislation that applies only in Scotland. These measures include the Mental Health (Care and Treatment) (Scotland) Act 2003, the Planning etc (Scotland) Act 2006, the Judiciary and Courts (Scotland) Act 2008 and the creation of Additional Support Tribunals under the Education (Additional Support for Lifelong Learning) (Scotland) Act 2004. However, at least one tribunal exercising functions in Scotland in relation to reserved matters the Pensions Appeal Tribunal remains at first instance mainly outwith the structure of the 2007 Act. So too do the Employment Tribunals and the Employment Appeal Tribunal. So there is this further question. Should there be a different approach to the grounds on which judicial review of unappealable decisions is available in the case of tribunals over which the supervisory jurisdiction of the Court of Session is exercised that are within the scheme of the 2007 Act from those that lie outside it? Background A comprehensive description of the statutory framework that the 2007 Act provides is to be found in the opinion of the First Division which was delivered by the Lord President (see 2011 SC 70, paras 2 4) and in the judgment of Lady Hale in the cases of Cart and MR (Pakistan) in this Court: [2011] UKSC 28, paras 22 29. It is necessary, in order to set the scene for the purposes of this judgment, only to sketch in a few details. The 2007 Act was designed to implement proposals in a report by a committee chaired by Sir Andrew Leggatt, Tribunals for users One System, One Service (DCA 2001). It sets out a two tier structure which comprises a First tier Tribunal, into which were transferred most existing first instance tribunals exercising functions in relation to reserved matters, and an Upper Tribunal whose function is primarily to deal with appeals from the First tier Tribunal but also to take over the work of some first instance tribunals from which there was no appeal. Both the First tier Tribunal and the Upper Tribunal are composed of a number of separate Chambers into which the work of the existing tribunals was grouped according to subject matter. One of the aims of this reform, as described in para 6.30 of the Leggatt Report, was to create a comprehensive and systematic right of appeal on points of law from the First tier Tribunal to the Upper Tribunal and from there to the Court of Session or the Court of Appeal. Any point of law was to be open to challenge before experts within the Tribunals system, and the senior members of the Upper Tribunal were to be judges. They were to include judges of the Court of Session, judges of the Court of Appeal in England and Wales, Lord Justices of Appeal in Northern Ireland and puisne judges of the High Court in England and Wales and Northern Ireland: see section 6(1)(a) (d). In para 6.30 the Leggatt Report added this comment: It would be significantly to users benefit to use that appeal system, rather than have recourse to the more complicated procedures and more limited remedies of judicial review. We think that this latter possibility should be excluded. Slightly different arguments apply to the appellate Division and first tier tribunals. In para 6.31 it offered two options for the removal of judicial review from the Upper Tribunal. One was to constitute all the appeal tribunals a superior court of record, as had already been done with the Employment Appeal Tribunal and the Transport Tribunal. The other was to exclude judicial review by express statutory provision. It recognised that the option of designating most of the First tier Tribunals as superior courts of record was manifestly inappropriate. The recommendation in their case was a statutory provision prohibiting review of their decisions where there was a right of appeal which had not been exercised. In the event the 2007 Act does not contain any provision which excludes judicial review of decisions of either the First tier or the Upper Tribunal. It provides instead that the Upper Tribunal is to be a superior court of record: section 3(5). This is a term that is unknown to the law of Scotland and has never been applied to any of the Scottish courts. But it is to be found in legislation relating to courts in other parts of the United Kingdom and to the Supreme Court of the United Kingdom itself: Constitutional Reform Act 2005, section 40(1). It is used there to indicate a court that keeps a permanent record of its acts and proceedings and has power to punish for contempt. The Divisional Court in R (Cart) v Upper Tribunal held that section 3(5) of the 2007 Act did not have the effect of excluding the judicial review jurisdiction from the Upper Tribunal, whatever the historic scope of the expression superior court of record might be: [2009] EWHC 3052 (Admin), [2011] QB 120, paras 31 32. This was because the supervisory jurisdiction can only be ousted by the most clear and explicit words: R v Medical Appeal Tribunal, Ex p Gilmore [1957] 1 QB 574, 583, per Denning LJ. Laws LJ said that it was a constitutional solecism to suggest that the effect of section 3(5) was to exclude it by implication: para 38. Counsel for the Advocate General did not challenge that conclusion. But it was said to be an indicator of an intention by Parliament, when taken together with the seniority of the judges who were to sit on it, that the Upper Tribunal was to take its place alongside courts of the level of importance of the High Court in England and Wales and Northern Ireland and not to be an inferior tribunal. The 2007 Act sets out a carefully organised system for the review of decisions and appeals. Review of decisions of the First tier Tribunal and of the Upper Tribunal is provided for by sections 9 and 10. Section 11 provides for a right of appeal to the Upper Tribunal, with permission or leave, on any point of law arising from a decision made by the First tier Tribunal other than an excluded decision. A list of excluded decisions is set out in section 11(5), which has been supplemented by paragraph 2 of the Appeals (Excluded Decisions) Order 2009 (SI 2009/275) as amended. The same formula is repeated in section 13, which provides for a right of appeal to the Court of Session and the equivalent courts in England and Wales and Northern Ireland. As already noted, permission or leave is required. In the case of appeals under section 13, this can be given either by the Upper Tribunal or the relevant court. A list of the decisions that are excluded decisions for the purposes of this section is set out in section 13(8), which has also been supplemented by paragraph 3 of the Appeals (Excluded Decisions) Order 2009 as amended. It includes the following: (a) any decision of the Upper Tribunal on an appeal under section 28(4) or (6) of the Data Protection Act 1998 (c 29) (appeals against national security certificate), (b) any decision of the Upper Tribunal on an appeal under section 60(1) or (4) of the Freedom of Information Act 2000 (c 36) (appeals against national security certificate), (c) any decision of the Upper Tribunal on an application under section 11(4)(b) (application for permission or leave to appeal), (d) a decision of the Upper Tribunal under section 10 (i) to review, or not to review, an earlier decision of the tribunal, (ii) to take no action, or not to take any particular action, in the light of a review of an earlier decision of the tribunal, or (iii) to set aside an earlier decision of the tribunal. (e) a decision of the Upper Tribunal that is set aside under section 10 (including a decision set aside after proceedings on an appeal under that section have begun), or (f) any decision of the Upper Tribunal that is of a description specified in an order made by the Lord Chancellor. Decisions of the descriptions in section 13(8)(a) and (b) are decisions from which, under the legislation referred to, there was no statutory right of appeal. Counsel for the government accepted that they are subject to the ordinary process of judicial review in the sense indicated by Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. Ms Ebas appeal is directed to decisions of the description set out in section 13(8)(c). The Advocate General submitted in his cross appeal to the Inner House that decisions of the Upper Tribunal were not in any circumstances amenable to the supervisory jurisdiction of the Court of Session: 2011 SC 70, para 13. The Lord President devoted much of his opinion to a discussion of that argument, which was rejected on the ground that the jurisdictional rule in Scotland pointed to an exclusion of the supervisory jurisdiction only where the subject body was a manifestation of the Court of Session or akin to such a manifestation, which the Upper Tribunal was not: para 54. The focus of the argument has accordingly shifted very considerably from that which was considered in the Inner House. It is no longer maintained that the supervisory jurisdiction has been excluded altogether. The question is as to the extent, if at all, it has been restricted in the case of decisions of the Upper Tribunal that are unappealable. There is one other provision in the 2007 Act which should be mentioned. Section 13(6) provides that the Lord Chancellor may, as respects an application for permission or leave to appeal to the Court of Appeal in England and Wales or Northern Ireland from any decision of the Upper Tribunal on an appeal under section 11 from a decision of the First tier Tribunal, make provision by order for permission or leave not to be granted on the application unless the Upper Tribunal or the relevant court considers (a) that the proposed appeal would raise some important point of principle or practice, or (b) that there is some other compelling reason for the relevant appellate court to hear the appeal. An order to this effect has been made by the Lord Chancellor: see The Appeals from the Upper Tribunal to the Court of Appeal Order 2008 (SI 2008 no. 2834), which came into force on 3 November 2008. The 2007 Act did not confer an equivalent power on the Lord President in relation to Scotland, perhaps because the question of second appeals was being considered in the Scottish Civil Courts Review that was then taking place under the Chairmanship of Lord Gill. But a provision broadly to the same effect as section 13(6) was made by SSI 2008/349 with effect from 3 November 2008 by inserting into the Rules of the Court of Session 1994 a new rule 41.59. It provides: (1) This rule applies where an application is made to the court under section 13(4) of the Tribunals, Courts and Enforcement Act 2007 for permission to appeal a decision of the Upper Tribunal which falls within section 13(7) of that Act and for which the relevant appellate court is the Court of Session. (2) Permission shall not be granted on the application unless the court considers that (a) the proposed appeal would raise some important point of principle or practice, or (b) there is some other compelling reason for the court to hear the appeal. As a result the position in relation to the granting of permission for a second appeal is now the same in the Court of Session as it is in the High Court under the statute. But it should be noted that the Scottish Rule of Court does not apply to applications made to the Upper Tribunal as opposed to the Court of Session, while the Order in other parts of the United Kingdom applies to applications to either the Upper Tribunal or the Court of Appeal. Some areas of common ground Mr Mitchell QC, in his helpful submissions for Ms Eba, drew together various matters relating to the position in Scotland which he said appeared to be common ground between the parties. It is worth repeating some of them, as they help to put into focus the points on which the parties are divided. First, the issue before this Court is confined to those decisions of the Upper Tribunal which are unappealable because, in the language of section 13(8) of the 2007 Act, they are excluded decisions. The effect of the exclusion is that these decisions are not amenable to the process of internal review within the tribunal system under the statute, which has not provided any alternative remedy. So, as Mr Mitchell submitted, it is either judicial review or it is nothing. Second, the question for decision is not whether judicial review is available at all. In the Inner House the Advocate General submitted that, in view of its constitution, jurisdiction and powers and its relationship with the Court of Session, the Upper Tribunal should properly be regarded as having a status so closely equivalent to the latter that its decisions were not appropriately amenable to its supervisory jurisdiction at all: 2011 SC 70, para 14. That extreme position is no longer contended for. The question is as to the scope or extent of the remedy. Third, the grounds of judicial control of administrative action in Scotland are based on legal principle. Judicial review by the Court of Session is not an exercise of judicial discretion, in contrast to what was said as to the position in English law in R (Sivasubramaniam) v Wandsworth County Council [2003] 1 WLR 475, para 47. Every person who complains that he has suffered a wrong because of an error or abuse of the power conferred on a decision maker is entitled to apply to the Court of Session for judicial review under Ch 58 of the Rules of the Court of Session 1994 as of right, in exactly the same way as he could have done by way of an ordinary action before the Rules of Court were amended to introduce the current procedure in 1985: West v Secretary of State for Scotland 1992 SC 385, 404. He does not have to apply for permission to do so and, although the Court has a discretion to refuse a remedy in judicial review on what may be described as equitable grounds, it has no discretion to refuse to entertain a competent application: Tehrani v Secretary of State for the Home Department 2007 SC (HL) 1, para 53. As the law currently stands, the hurdle that a petitioner must cross for a motion for a first order to be granted is a low one. In the Inner House the Lord President said that it seemed that this had been done only where the application was manifestly without substance: para 35. This approach was confirmed in Y v Secretary of State for the Home Department [2011] CSIH 3, 2011 SLT 508, where the Extra Division said that only in very exceptional circumstances should a refusal to grant first orders be made: para 16. Watt v Lord Advocate It is also common ground that the history and nature of the supervisory jurisdiction in Scotland shows that, contrary to what was said in Watt v Lord Advocate 1979 SC 120, the Court of Session has power to correct an error of law made by a statutory tribunal that acts within its statutory jurisdiction but has misunderstood the question that it has been given power to decide. In that case the pursuer sought and was granted reduction of a decision of a National Insurance Commissioner that he was not entitled to unemployment benefit. Lord President Emslie said that it was not necessary for him to express a concluded view on the point, as he had held that the Commissioner had exceeded his statutory powers and that his decision was ultra vires, but that he had the gravest doubt whether, if that had not been so the Court would have had power to review it. The Lord President went on to say this at p 131: it seems clear that, however much this is to be regretted, the Court Session has never had power to correct an intra vires error of law made by a statutory tribunal or authority exercising statutory jurisdiction. As Lord Justice Clerk Moncrieff said in Lord Advocate v Police Commissioners of Perth (1869) 8 M 244 at p 245 In the ordinary case it would now, I think, be held that where statutory powers are given, and a statutory jurisdiction is set up, all other jurisdictions are excluded There is no indication in any subsequent authority that this view has been doubted or even questioned and I entirely agree with the Lord Ordinary for the reasons which he gives that the fact that the Court of Session may have exercised a comprehensive corrective jurisdiction over determinations of parochial aid in the 18th and early 19th Centuries does not in any way support the existence of a jurisdiction in this court to correct errors by a statutory tribunal in the due performance of its statutory duties. As the Advocate General has pointed out, this approach suggests that the supervisory jurisdiction of the Court of Session is restricted to what is commonly referred to as pre Anisminic error. That is not the way that Lord Fraser of Tullybelton seems to have understood the position to be, as in Brown v Hamilton District Council 1983 SC (HL) 1, 42, he said: It is not necessary for me to consider the grounds on which judicial review may be open. The decisions in the English cases of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, and Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147, so far as they relate to matters of substance and not of procedure, are accepted as being applicable in Scotland: see Watt v Lord Advocate 1979 SC 102. There is no difference in substance between the laws of the two countries on this matter. It does appear however that, in expressing the position as narrowly as he did in Watt, the Lord President failed to appreciate the significance of the decision in Anisminic, which abolished the distinction between errors of law that went to jurisdiction only in the strict sense and those that did not: Clyde and Edwards, Judicial Review, paras 22.21 22.24. quoted in Watt at p 130, Lord Reid said: In a passage from his speech in Anisminic at p 171 which the Lord President It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity. But in such cases the word jurisdiction has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. There then followed a list of examples which, as Lord Reid said was not intended to be exhaustive of errors that fell into that category, including where the tribunal has misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question that was not remitted to it, has refused to take into account something that it was required to take into account or has based its decision on some matter which it had no right to take into account. He ended this passage with these words, which indicate precisely where the boundary lies between what is open to review and what is not: But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly. As the Lord President observed in the present case, Anisminic has come to be interpreted and applied in the English courts in a way that does not appear to sit easily with Lord President Emslies dictum: 2011 SC 70, para 43. The distinction between jurisdictional and other errors, which he was endorsing, has been abandoned. Furthermore, the way that his dictum has been applied in practice appears to have been somewhat patchy. It was applied in ONeill v Scottish Joint Negotiating Committee for Teaching Staff 1987 SC 90, by Lord Jauncey at p 94 and in Rae v Criminal Injuries Compensation Board 1997 SLT 291, by Lord Macfadyen at 295I J. More recently, since the decision in West v Secretary of State for Scotland 1992 SC 385 in which the court said at p 413 that there is no substantial difference between English and Scots law as to the grounds on which the process of decision making may be open to review, it has been ignored, as in Mooney v Secretary of State for Work and Pensions 2004 SLT 1141 and Donnelly v Secretary of State for Work and Pensions 2007 SCLR 746. In Diamond v PJW Enterprises 2004 SC 430, paras 37 38 the Lord Justice Clerk referred to the argument that Anisminic had made obsolete the traditional distinction that was recognised in Watt between an error of law as to jurisdiction and an error of law made intra vires but found it unnecessary to decide the issue. In Hyaltech Ltd, Petitioners 2009 SLT 92, para 53 too, as there had been no misapplication of the relevant law, the court found this not be necessary. But the dictum has never been expressly disapproved. In my opinion the time has come for it to be declared that Lord President Emslies dictum in Watt v Lord Advocate 1979 SC 102, 131 is incompatible with what was decided in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. In In re Racal Communications Ltd [1981] AC 374, 382 Lord Diplock said that the decision in Anisminic was a legal landmark which proceeded on the presumption that, where Parliament confers on an administrative tribunal or authority power to decide particular questions defined by the Act, it intends to confine that power to answering the question as it has been so defined and that, if there is any doubt what that question is, this is a matter that the court must resolve. I would hold that the dictum in Watt cannot be reconciled with that interpretation of the decision and that it should no longer be followed. Once again it must be stressed that there is, in principle, no difference between the law of England and Scots law as to the substantive grounds on which a decision by a tribunal which acts within its jurisdiction may be open to review: Brown v Hamilton District Council 1983 SC (HL) 1, 42 per Lord Fraser; West v Secretary of State for Scotland 1992 SC 385, 402 and 413. The extent of the remedy in English law The choices in relation to unappealable decisions of the Upper Tribunal in England and Wales were examined in the judgment that the Court has given today in Cart and MR (Pakistan): [2011] UKSC 28. As Lady Hale explained in para 37, three points had become clear in the course of oral argument. First, there is nothing in the 2007 Act which purports to exclude judicial review of unappealable decisions of the Upper Tribunal. Second, it would be inconsistent with the new structure introduced by the 2007 Act to distinguish between the scope of judicial review in the various jurisdictions which it has gathered together in that new structure. I note in passing that the Advocate General submitted in Ms Ebas case that its scope should be the same across all the chambers of the Upper Tribunal, that there was no submission from anyone else to the contrary and that the Inner House agreed that there should be no distinction between any of them: 2011 SC 70, para 61. Third, as the object of judicial review is to ensure that decisions are taken in accordance with the law and not otherwise, the question is what machinery is necessary to ensure that mistakes as to what the law requires are kept to a minimum. Should there be any jurisdiction in which mistakes of law are immune from scrutiny in the higher courts? There were, then, three possible approaches which the Court could have taken. First, it could have endorsed the decision of the Court of Appeal in Cart and held that the scope of judicial review should be restricted to an excess of jurisdiction in the pre Anisminic sense or where there had been a procedural irregularity such that the applicant had been denied a fair hearing. Second, it could have held that nothing had changed and that judicial review of the kind that had always been available before the 2007 Act should be retained. Third, a course between these two options could be adopted in which judicial review would be limited to the grounds on which permission might be granted for a second tier appeal to the Court of Appeal. The first option was rejected. The approach of the Court of Appeal in Cart was too narrow, as it left the possibility that serious errors of law affecting large numbers of people would go uncorrected: para 44. The second option, too, was rejected. Although the courts have adopted principles of judicial restraint when considering the decisions of expert tribunals, it had found more favour in some contexts than others. A principled but proportionate approach was now required: paras 49 50. Unrestricted judicial review was not necessary for the maintenance of the rule of law and was not proportionate: Lord Dyson, para 128. This left the adoption of the second tier appeals criteria, which would be a rational and proportionate restriction upon the availability of judicial review. It would recognise that the new tribunal structure deserves a more restrained approach to judicial review than had previously been the case: para 57. But, as Lord Phillips said in his judgment at para 92, some overall judicial supervision was needed in order to guard against the risk that errors of law of real significance may slip through the system. So it was the third approach which was adopted. Should the same approach be followed in Scotland? For the Advocate General, Mr Johnston QC submitted that the conclusion that was reached as to the extent of the remedy for England and Wales should be applied to Scotland too. He expressed concern about the extent of the burden that applications for judicial review would impose if the decision of the Inner House were to be supported, especially in immigration and asylum cases. The Scottish Court Service had drawn attention to this problem in the consultation on immigration appeals in 2008, pointing out that many of these applications took in excess of one judge day to consider and that they accounted for approximately the equivalent of the time of one full time judge for which no additional resource had been provided. While the number of these applications might seem to be small in comparison to the position in England and Wales, it was nevertheless a significant burden on the Scottish Courts. There was no current mechanism for sifting out unmeritorious applications, apart from that indicated by Y v Secretary of State for the Home Department [2011] SLT 508, para 16. The fact that petitions for judicial review occupied a disproportionate amount of sitting days had been noted by Lord Gill in his Report of the Scottish Civil Courts Review (September 2009), chapter 12, para 50. The recommendation in para 51 of that chapter that a requirement to obtain leave should be introduced had not yet been implemented. It was open to the court to set the parameters. This was not just a matter for Parliament. The Inner House had been wrong to decline this opportunity: 2011 SC 70, para 60. He drew attention to the fact that the scope of the remedy can be tailored by the court to the needs of the particular body. A good example of this was the ecclesiastical case of McDonald v Burns 1940 SC 376, in which Lord Justice Clerk Aitchison at p 383 had addressed the question as to the circumstances in which the Courts would entertain actions arising out of the judgments of ecclesiastical bodies. As the Lord Ordinary had pointed out, there were many fields in which the courts in Scotland had tailored their approach to the nature of the tribunal, the subject matter of the dispute and the perceived parliamentary intention behind any relevant legislation: 2010 SLT 547, para 89. The Inner House had simply been wrong to rely on the mere fact that a petitioner was entitled to bring the case into court: 2011 SC 70, para 60. Tehrani did not support this approach to the grounds on which the remedy might be exercised. Also the 2007 Act is an enactment of the Parliament of the United Kingdom. It should not be applied in a way that would encourage forum shopping. Intervening on behalf of the Lord Advocate, Mr Mure QC submitted that there was no pressing need to control the exercise of the supervisory jurisdiction in Scotland in respect of the 2007 Act tribunals by restricting the grounds of review. He accepted that this case provided the court with an opportunity to mould its approach, but he maintained the post Anisminic grounds of review should remain. It should be left to the Court of Session to adapt the intensity of the review to the needs of each case. Resources were an issue, but this was a matter for the Scottish Government to address. The 2007 Act was a United Kingdom statute, but it had been careful to make separate provision for Scotland. This allowed for a different approach to be taken to the way the supervisory jurisdiction should be exercised in Scotland from that which might be adopted in England. For Ms Eba, Mr Mitchell stressed that the Scottish approach to the supervisory jurisdiction was that described in West v Secretary of State for Scotland. She had a right to have her complaint dealt with by the court. The Inner House had been right to observe that in Scotland, in contrast to what had happened in England and Wales, the right of the citizen to invoke the jurisdiction of the Court of Session to control the actings of statutory bodies had never been circumscribed on discretionary or similar grounds: 2011 SC 70, para 60. It had always been accepted in Scotland that it would require clear, unambiguous and express words to oust that jurisdiction: e.g. Dunbar v Scottish County Investments 1920 SC 201, 217; Hume v Nursing and Midwifery Council 2007 SC 644, para 17; Clyde and Edwards, Judicial Review, para 11.04. Mr Mitchell accepted that the grounds for review could vary according to the nature of the bodies themselves. But he submitted that it would not be right to restrict the intensity of review by analogy with the test that the 2007 Act had laid down for second appeals. The Act had not effected a complete re ordering of administrative justice in Scotland, as there was not and could not be a unified system for the whole range of Scots tribunals. There was no reason why the approach that was taken to a decision made by a sheriff under the Mental Health (Scotland) Act 1984 in R v Secretary of State for Scotland 1999 SC (HL) 17 should not be applied generally. It was wrong to see the 2007 Act as having created something that was fundamentally different from what was there before. It had long been established in the social security context that unappealable refusals of leave to appeal were amenable to judicial review on ordinary grounds, with due recognition and respect for specialist expertise. Such statistics as were available suggested that the increase in the number of applications in immigration and asylum cases was not a pressing issue that was incapable of being dealt with by case management. The court should not pre empt what might come from the reforms indicated by the Civil Courts Review. The submissions which I have set out in this brief summary were, of course, presented on the assumption that one of the choices with which the court was presented was to endorse the approach of the Court of Appeal in Cart. There is no doubt that a decision by this Court to endorse that approach with regard to unappealable decisions of the Upper Tribunal in England and Wales would have presented a very real problem in Scotland. To extend it to Scotland would have created a rift between the broad and flexible approach that is taken to the supervisory jurisdiction in Scotland generally, which is available as of right to everyone, and the very limited opportunity for review which it would have provided in the case only of that class of unappealable decisions. It would also lead us back, in their case only, to the distinction between jurisdictional and other errors to which Lord President Emslie referred in Watt v Lord Advocate 1979 SC 102, 131 but was effectively abandoned after Anisminic, as Lady Hale said in Cart and MR, para 39. This would indeed have destroyed the consistency of the approach to the supervisory jurisdiction in Scots law, as was submitted for Ms Eba. It would have been hard to justify. As it is, the decision of this court in Cart and MR not to endorse that approach has removed that objection. It has made it much easier for the Scots approach to the supervisory jurisdiction in relation to unappealable decisions of the Upper Tribunal in Scotland to find common ground with that which must now be taken in England and Wales. The key to our doing so lies in a recognition that the issue is not one about access to the remedy, which will remain available to the citizen as of right, or the purpose for which the supervisory jurisdiction may be exercised. It is an issue about how best to tailor the scope of the remedy according to the nature and the expertise of the Upper Tribunal and the subject matter of the decisions that have been entrusted to it by Parliament. There is no doubt that the supervisory jurisdiction is capable of being moulded in this way. As was pointed out in West v Secretary of State for Scotland 1992 SC 385, 397, a distinction must be made between the question of competency as to whether a decision is open to review by the Court of Session in the exercise of its supervisory jurisdiction, and the substantive grounds on which it may do so: The extent of the supervisory jurisdiction is capable of a relatively precise definition, in which the essential principles can be expressed. But the substantive grounds on which that jurisdiction may be exercised will of course vary from case to case. And they may be adapted to conform to the standards of decision taking as they are evolved from time to time by the common law. There is an element of flexibility within this system that has enabled the grounds of judicial review to be adapted to a diverse range of decision making bodies. As the Lord Ordinary observed, the Court of Session has been slow to interfere with decisions of specialist tribunals, and it has been restrained in its approach in reviewing decisions of arbitrators and decisions of adjudicators under the Housing Grants, Construction and Regeneration Act 1996: 2010 SLT 547, para 89. This can be compared with the cautious approach to giving permission to appeal from decisions of the Social Security Commissioners in England and Wales because of their particular expertise in a highly specialised area of the law that was indicated by Hale LJ in Cooke v Secretary of State for Social Security [2001] EWCA Civ 734, [2002] 3 All ER 278, paras 15 17. The fact that, as was stressed repeatedly in West v Secretary of State for Scotland (see pp 403, 405 and 413), there is no substantial difference between English and Scots law as to the grounds on which the process of decision making may be open to review provides further support for the argument that there should be no difference between them as to the scope for the judicial review of unappealable decisions of the Upper Tribunal on either side of the Border. This is why Scots law has been able to follow the developments in the English approach to judicial review since Anisminic in preference to the approach indicated in Watt v Lord Advocate 1979 SC 102, 131. Lord Frasers observations in Brown v Hamilton District Council 1983 SC (HL) 1, 42 show that there is no obstacle to its doing this. It would not, therefore, be a very large step for the Scots approach to unappealable decisions of the Upper Tribunal to align itself with that which has now been decided should be taken in England and Wales. As to whether it should now do so, I would unhesitatingly answer that question in the affirmative. I would do so for reasons that have at least as much to do with the restraint that the Court of Session has already recognised it should take to decisions of that kind as with the need for it to find common ground with the position in English law. Two factors seem to me to carry particular weight. One is the familiar point that the court should be slow to interfere with decisions that lie within the expertise of specialist tribunals. As Dyson LJ said in R (Wiles) v Social Security Commissioner [2010] EWCA Civ 258, para 54, the reviewing court should not be astute to detect some error in their decision to refuse leave to appeal. That is already well established, as a matter of practice, in Scots law. The other is the fact that the limitation on the scope for second appeals in section 13(6) of the 2007 Act has been reproduced in rule 41.59 of the Rules of the Court of Session: see paras 22 and 23, above. That rule gives effect to a particular intention about when questions of law should be subject to further scrutiny by a higher court. It would not be consistent with that intention, to which the amendment to the Rules has given effect, for the court to provide a wider opportunity for the decisions of the Upper Tribunal to refuse permission to appeal to itself to be reconsidered by way of judicial review. So I would hold that the phrases some important point of principle or practice and some other compelling reason, which restrict the scope for a second appeal, provide a benchmark for the court to use in the exercise of its supervisory jurisdiction in relation to decisions that are unappealable that is in harmony with the common law principle of restraint: see, as to how these phrases are applied in practice in England and Wales, Uphill v BRB (Residuary) Ltd [2005] EWCA Civ 60, paras 17 and 24 per Dyson LJ and Cramp v Hastings Borough Council [2005] EWCA Civ 1005 para 68 per Brooke LJ. Underlying the first of these concepts is the idea that the issue would require to be one of general importance, not one confined to the petitioners own facts and circumstances. The second would include circumstances where it was clear that the decision was perverse or plainly wrong or where, due to some procedural irregularity, the petitioner had not had a fair hearing at all. I would leave it to the Court of Session to give such further guidance as may be needed as to how this analogy with the second appeals criterion should be applied in practice. But it may be helpful if I were to mention these points: (a) Lord Reids observation in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147, 171 that if a statutory tribunal decides a question remitted to it for decision without committing an error of law as to what that question is, it is as much entitled to decide that question wrongly as it is to decide it rightly remains the basic yardstick: see also West v Secretary of State for Scotland 1992 SC 385, p 413, para 2. (b) The court must then distinguish between errors of law that raise an important issue of principle or practice, or reasons that are compelling, and those that do not answer to this description. The question whether the application meets this test must depend on the facts of each case. It ought to be capable of being applied at the earliest possible stage, and certainly at the stage of the first hearing, as a matter of relevancy. (c) Under the current rules a person who invokes the supervisory jurisdiction does not require permission to do so. But a petition for judicial review can be dismissed at the stage of a motion for a first order: Sokha v Secretary of State for the Home Department 1992 SLT 1049; Butt v Secretary of State for the Home Department, 15 March 1995, unreported (1995) GWD 16 905. As the law currently stands, the hurdle that a petitioner must cross for a motion for a first order to be granted is a low one: Y v Secretary of State for the Home Department 2011 SLT 508; see para 28, above. I think that this is perfectly acceptable as the test for use in relation to applications to the supervisory jurisdiction of the Court of Session generally. But its application to that special category of cases where a petitioner seeks to bring unappealable decisions of the Upper Tribunal under review needs now to be reconsidered. (d) The ever increasing pressure on the courts business by applications for judicial review to which our attention has been drawn, together with the fact that the new tribunal structure requires that a more restrained approach be taken to judicial review of decisions of this kind, suggests that the Lord Ordinary to whom a petition is presented under rule 58.7 for a first order for the review of an unappealable decision of the Upper Tribunal should be encouraged to consider the question whether there is an arguable case that the criterion referred to in para (b) is satisfied before he or she decides whether or not a first order should be granted. It seems to me, with respect, that the approach which Lady Smith took to this issue in the Outer House when she declined to grant the petitioners motion for first orders because she was not satisfied that an arguable case had been made out in Y v Secretary of State for the Home Department 2010 SLT 170, paras 12 14, has much to commend it, and that it would be appropriate for use in relation to cases falling within this special category. Other Scottish Tribunals For the Advocate General Mr Johnston said that there were good grounds for distinguishing between those tribunals that are within the system of the 2007 Act and those that are not. Tribunals of the latter kind should be left to another day. For the Lord Advocate Mr Mure said the position is still in flux and that this court should be wary of telling the Court of Session how to deal with them. A number of tools are available and it should be left to the Court of Session to choose between them. For Ms Eba Mr Mitchell expressed concern about what he referred to as seepage into decisions of the other tribunals if the approach of the Court of Appeal in Cart were to be applied to unappealable decisions of the Upper Tribunal in Scotland. That problem, however, does not now arise. As noted above, it is already well established in Scots law as a matter of common law that restraint should be exercised in the opening up of decisions of specialist tribunals to judicial review. What is lacking in the case of these other tribunals is the intention of Parliament which is indicated by the statutory restriction on the availability of second appeals. Rule 41.59 does not apply to them. But the harmony between the statutory restriction and the common law principle of restraint suggests that the absence of that additional element is unlikely to make any substantial difference in practice. It is not necessary for us to reach any decision on the point, as a case that has been the subject of decision by a tribunal within this group is not before us. But I do not see any good reason why a different approach should be taken to the application of the common law principle of restraint to unappealable decisions of those tribunals from that which must now be taken to those of the Upper Tribunal that are unappealable. Conclusion Ms Eba accepted before the Lord Ordinary that she had not pled herself within the exceptional circumstances test that was used as a shorthand for an excess of jurisdiction in the pre Anisminic sense: 2010 SLT 547, para 4. But it was also accepted that, if the Advocate Generals argument were to fail, there would require to be further procedure to determine the merits of Ms Ebas case. Scrutiny of the merits of her case was taken no further in the Inner House in view of its decision that the scope of the supervisory jurisdiction of the Court of Session to judicially review unappealable decisions of the Upper Tribunal was unrestricted. I would therefore dismiss the appeal by the Advocate General and, although for different reasons, affirm the interlocutor of the Inner House of the Court of Session. The case should be remitted by the Inner House to the Lord Ordinary to examine the question whether Ms Eba has sufficient grounds for judicial review of Judge Mays decision, which was to refuse her application for permission to appeal to the Upper Tribunal against the refusal of her claim to disability living allowance. I would direct him, when he does so, to apply the approach to the scope for review that has been described in the judgment of this Court.

The issue in this appeal is the scope of the remedy of judicial review in the Court of Session of decisions of the Upper Tribunal established under the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act). Ms Ebas claim for disability living allowance was refused by the Department of Work and Pensions on 1 February 2008. Her appeal against this decision to the First Tier Social Entitlement Chamber was dismissed. She was refused permission to bring a further appeal to the Upper Tribunal by a judge of the Upper Tribunal. There was no right of appeal from that decision under the 2007 Act. Ms Eba therefore sought to bring proceedings for judicial review. Her claim for judicial review was dismissed by the Lord Ordinary (Lord Glennie) on 31 March 2010. The First Division of the Court of Session, however, allowed a reclaiming motion, holding that the decision of the Upper Tribunal was amenable to judicial review under the supervisory jurisdiction of the Court of Session and that the grounds on which it would be reviewed were not subject to any limitation on policy or discretionary grounds. The Advocate General for Scotland appealed to the Supreme Court. The appeal was heard with appeals in two English cases raising the same issue, R (Cart) v Upper Tribunal and MR (Pakistan) v Upper Tribunal. The Supreme Court unanimously dismisses the appeal and affirms the interlocutor of the Inner House of the Court of Session, although for different reasons. It holds that unappealable decisions of the Upper Tribunal are amenable to judicial review in cases which raise some important point of principle or practice or some other compelling reason to be heard. Ms Ebas case should be remitted by the Inner House to the Lord Ordinary to examine the question of whether she has sufficient grounds for her claim, applying this approach. Lord Hope gives the judgment of the court. The issue in the appeal lay at the heart of the relationship between the Court of Session and the new system for specialist tribunals created by the 2007 Act. On the one hand was the rule of law, which gave the Court of Session power to correct excesses or abuses of the power or jurisdiction conferred on a decision maker by the system of judicial review; on the other was the interest in achieving finality at the tribunal level in the delivery of administrative justice [8]. Although there are differences in judicial control of administrative actions in Scotland, there is in principle no difference between the law of England and Wales and Scots law as to the substantive grounds on which a decision by a tribunal which acts within its jurisdiction may be open to review [34]. The potential approaches in relation to unappealable decisions of the Upper Tribunal in England and Wales were examined in the judgments in the linked appeals in Cart and MR(Pakistan). The Supreme Court in those appeals has held that the adoption of the criteria for the grant of permission to bring second tier appeals provided by the 2007 Act would be a rational and proportionate restriction on the availability of judicial review while guarding against the risk that errors of law may slip through the system [37]. The outcome of those appeals, by overturning the restrictive approach of the Court of Appeal in Cart, has made it much easier for the Scots approach to find common ground with that now being taken in England and Wales. The issue is not one about access to the remedy, which will remain available to the citizen as of right, or the purpose for which the supervising jurisdiction may be exercised, but one of how best to tailor the scope of the remedy according to the nature and expertise of the Upper Tribunal and the subject matter of the decisions that have been entrusted to it by Parliament [44]. Two factors already established in Scots law support the conclusion that Scots law should now align itself with the position in English law. The first is that the court should be slow to interfere with decisions that lie within the expertise of the specialist tribunals. The second is the fact that the limitation on the scope for second appeals in the 2007 Act has been reproduced in the Rules of the Court of Session and it would be inconsistent with the intention behind that rule to provide a wider opportunity for the decisions of the Upper Tribunal to refuse permission to appeal to itself to be reconsidered by way of judicial review [47]. It will be for the Court of Session to give such further guidance as may be needed as to how this analogy with the second appeals criteria should be applied in practice, but ideally the Lord Ordinary should give consideration of whether the criteria are arguably met at the stage of the first order [49]. There is no good reason to take a different approach in the application of the common law principle of restraint in cases relating to other Scottish tribunals outside the 2007 Act, although it does not arise for decision in the present appeal [51].

Until relatively recent times, English judges were obliged to impose sentences of imprisonment for life only in cases of murder. A judge might also impose a discretionary life sentence in other cases where a determinate sentence would not provide adequate protection to the public against the risk of serious harm presented by the particular individual. In practice, such sentences were highly unusual. Following a series of judgments in which the European Court of Human Rights considered the compatibility of life sentences with the European Convention on Human Rights and Fundamental Freedoms (the Convention), statutory reforms were introduced so that, where a life sentence was imposed, the judge determined a minimum period or tariff to be served for the purposes of retribution and deterrence, following which the continued detention of the prisoner depended upon an assessment of the level of risk which he continued to present, carried out by the Parole Board (the Board). I shall return to the statutory functions of the Board. In more recent times, sentencing legislation required judges to impose automatic life sentences upon a much wider range of offenders. In particular, section 2 of the Crime (Sentences) Act 1997 (the 1997 Act) required the courts to impose a life sentence upon anyone convicted of a second serious offence, unless there were exceptional circumstances permitting the court not to take that course. A similar duty was imposed by section 109 of the Powers of Criminal Courts (Sentencing) Act 2000 (the 2000 Act). Section 225 of the Criminal Justice Act 2003 (the 2003 Act) introduced, with effect from 4 April 2005, indeterminate sentences of imprisonment for public protection (IPP), which were to be automatically imposed whenever a person was convicted of any one of a large number of offences designated as serious offences and the court thought there to be a significant risk of serious harm to members of the public by the commission of a further specified offence. Risk was to be assumed in cases where the person had previously been convicted of a relevant offence. The Board is responsible for the release of prisoners sentenced to life imprisonment and those serving IPP sentences. Under section 28(5) of the 1997 Act as amended, the Secretary of State is required to release a life or IPP prisoner who has served his tariff period if the Board has directed his release. Section 28(6) provides that the Board shall not give such a direction unless the Secretary of State has referred the prisoners case to it, and the Board is satisfied that it is no longer necessary for the protection of the public that the prisoner should be confined. Section 28(7) provides that a life prisoner may require the Secretary of State to refer his case to the Board at any time after the expiry of his minimum term. In practice, cases are normally referred to the Board by the Secretary of State some months before the expiry of the tariff period. The Board also receives from the Secretary of State the reports which it requires on the prisoners progress, and then fixes an oral hearing prior to reaching its decision. One consequence of the changes introduced by the legislation described in paragraph 2, and in particular the introduction of IPP sentences, was greatly to increase the number of prisoners whose cases required to be considered by the Board. Another consequence was that a much higher proportion of prisoners subject to indeterminate sentences, particularly in IPP cases, had short tariff periods. The cumulative effect of these developments was greatly to increase the workload of the Board. Although these consequences of the introduction of IPP sentences were entirely predictable, they had not been anticipated by the Secretary of State, and the Board was not provided with a commensurate increase in its resources. It soon became clear that the existing resources were insufficient. The result was delay in the consideration of the cases of prisoners who had served their tariff period, and whose further detention could only be justified on the basis of an assessment of the risk which they continued to present. Steps have been taken to address the problem. The 2003 Act was amended by the Criminal Justice and Immigration Act 2008, with effect from 14 July 2008, so that IPP sentences are no longer mandatory. In addition, the Board has been provided with additional resources, and administrative changes have been introduced in order to increase the efficiency of the system. The courts however have to deal with the legal consequences of the problems which I have described. Convention rights In that regard, important issues arise under the Human Rights Act 1998 (the 1998 Act). In that Act, Parliament required the courts to give effect to Convention rights corresponding to those guaranteed by the Convention. Those rights include the rights conferred by article 5(1) and (4) of the Convention. Article 5(1) provides: (1) Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: Article 5(4) provides: (a) the lawful detention of a person after conviction by a competent court Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. Compliance with article 5(1)(a) requires more than that the detention is in compliance with domestic law. As the European court stated in Weeks v United Kingdom (1987) 10 EHRR 293, para 42: The 'lawfulness' required by the Convention presupposes not only conformity with domestic law but also conformity with the purposes of the deprivation of liberty permitted by sub paragraph (a) of article 5(1). Furthermore, the word 'after' in sub paragraph (a) does not simply mean that the detention must follow the 'conviction' in point of time: in addition, the 'detention' must result from, 'follow and depend upon' or occur 'by virtue of' the 'conviction'. In short, there must be a sufficient causal connection between the conviction and the deprivation of liberty at issue. In relation to a discretionary life sentence imposed for the purpose of public protection, the court added (para 49): The causal link required by sub paragraph (a) might eventually be broken if a position were reached in which a decision not to release or to re detain was based on grounds that were inconsistent with the objectives of the sentencing court. In those circumstances, a detention that was lawful at the outset would be transformed into a deprivation of liberty that was arbitrary and, hence, incompatible with article 5. The court further held in that case that, where a defendant was recalled to prison following release on licence, it followed that it was necessary for him to be able to bring proceedings, as soon as he was recalled to prison and at reasonable intervals thereafter (since the need for continued public protection was liable to change over time), in order to determine whether his continued detention had become unlawful for the purposes of article 5(1)(a), on the basis that it was no longer consistent with the objectives of the sentencing court. The obligation to provide an opportunity for such a determination arose under article 5(4). In Thynne, Wilson and Gunnell v United Kingdom (1990) 13 EHRR 666 this reasoning was applied in relation to discretionary life prisoners whose tariff periods had expired. Since there was a question whether their continued detention was consistent with the objectives of the sentencing court, it followed that they too were entitled under article 5(4) to have the question determined. The subsequent judgment in Stafford v United Kingdom (2002) 35 EHRR 1121 confirmed that a mandatory life prisoner was also entitled to the protection of article 5(4), by means of regular reviews of the risk which he presented, once the punitive period of his sentence had expired. The implications of these judgments were then reflected in domestic case law. In relation to automatic life prisoners, in particular, it was held in R (Noorkoiv) v Secretary of State for the Home Department [2002] 1 WLR 3284 that article 5(4) requires a review by the Board of whether the prisoner should continue to be detained once the tariff period has expired, and therefore requires a hearing at such a time that, whenever possible, those no longer considered dangerous can be released on or very shortly after the expiry date. In practice, that meant that the Board should hold hearings prior to the expiry of the tariff period. Since Noorkoivs case had not been heard until two months after the expiry of his tariff period, he was therefore the victim of a violation of article 5(4). That approach has been followed in the subsequent case law. Another important aspect of the 1998 Act is that the remedies which Parliament has provided for a violation of Convention rights, by section 8 of the Act, include damages. Accordingly, it was accepted in the case of R (James) v Secretary of State for Justice [2010] 1 AC 553 that a violation of a prisoners rights under article 5(4) could result in an award of damages. The present appeals are concerned primarily with the circumstances in which a life or IPP prisoner who has served his tariff period, and whose case has not been considered by the Board within a reasonable period thereafter, should be awarded damages under the 1998 Act, and with the quantum of such awards. They raise a number of questions: in particular, (1) whether an award should be made only in a case where the prisoner would have been released earlier if his case had been considered by the Board without undue delay, or whether an award may also be appropriate even if the prisoner would not have been released earlier; (2) if the latter view is accepted, whether an award should be made whenever undue delay has occurred, or whether delay has to have been of a certain duration before an award is appropriate; and (3) how, on either view, damages should be assessed. A question is also raised as to whether the detention of a prisoner, during a period when he would have been at liberty if his case had been considered by the Board in accordance with article 5(4), constitutes false imprisonment under the common law, or a violation of article 5(1) of the Convention. Summary of conclusions reached. It may be helpful at this point to summarise the conclusions which I have 1. A prisoner whose detention is prolonged as the result of a delay in the consideration of his case by the Board, in violation of article 5(4) of the Convention, is not the victim of false imprisonment. 2. Nor is he ordinarily the victim of a violation of article 5(1) of the Convention: such a violation would require exceptional circumstances warranting the conclusion that the prisoners continued detention had become arbitrary. 3. At the present stage of the development of the remedy of damages under section 8 of the 1998 Act, courts should be guided, following R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673, primarily by any clear and consistent practice of the European court. 4. In particular, the quantum of awards under section 8 should broadly reflect the level of awards made by the European court in comparable cases brought by applicants from the UK or other countries with a similar cost of living. 5. Courts should resolve disputed issues of fact in the usual way even if the European court, in similar circumstances, would not do so. 6. Where it is established on a balance of probabilities that a violation of article 5(4) has resulted in the detention of a prisoner beyond the date when he would otherwise have been released, damages should ordinarily be awarded as compensation for the resultant detention. 7. The appropriate amount to be awarded in such circumstances will be a matter of judgment, reflecting the facts of the individual case and taking into account such guidance as is available from awards made by the European court, or by domestic courts under section 8 of the 1998 Act, in comparable cases. 8. Pecuniary losses proved to have been caused by the prolongation of detention should be compensated in full. 9. It will not be appropriate as a matter of course to take into account, as a factor mitigating the harm suffered, that the claimant was recalled to prison following his eventual release. There may however be circumstances in which the claimants recall to prison is relevant to the assessment of damages. 10. Damages should not be awarded merely for the loss of a chance of earlier release. 11. Nor should damages be adjusted according to the degree of probability of release if the violation of article 5(4) had not occurred. 12. Where it is not established that an earlier hearing would have resulted in earlier release, there is nevertheless a strong, but not irrebuttable, presumption that delay in violation of article 5(4) has caused the prisoner to suffer feelings of frustration and anxiety. 13. Where such feelings can be presumed or are shown to have been suffered, the finding of a violation will not ordinarily constitute sufficient just satisfaction. An award of damages should also be made. Such damages should be on a modest scale. No award should however be made where the delay was such that any resultant frustration and anxiety were insufficiently severe to warrant such an award. That is unlikely to be the position where the delay was of the order of three months or more. In the remainder of this judgment I shall explain the grounds upon which I 14. have reached those conclusions. The lawfulness of detention when there is a violation of article 5(4) 15. Before considering the issue of just satisfaction, it is necessary to consider first whether, as was argued, the detention of a prisoner, during a period when he would have been at liberty if his case had been considered by the Board speedily as required by article 5(4), constitutes false imprisonment at common law, entitling the prisoner to an award of damages in tort. Alternatively, it was argued that the detention of the prisoner in such circumstances constitutes a violation of article 5(1), entitling the prisoner to an award of just satisfaction for unlawful detention. The argument that the detention of a life prisoner constitutes false imprisonment, if it continues beyond the point in time when article 5(4) required a hearing to be held, must be rejected. As was explained in R (James) v Secretary of State for Justice [2010] 1 AC 553, the continued detention is authorised by statute. Under the relevant statutory provisions, which I have summarised at paragraph 3, there is no entitlement to release by the Secretary of State until release has been directed by the Board, and a direction to that effect cannot be given until the Board is satisfied that detention is no longer necessary for the protection of the public. By virtue of the relevant legislation, the prisoners detention is therefore lawful until the Board gives a direction for his release. That conclusion is not affected by section 6(1) of the 1998 Act, which makes an act of a public authority unlawful if it is incompatible with Convention rights. That provision does not apply to an act if, as a result of one or more provisions of primary legislation, the public authority could not have acted differently: see section 6(2)(a). In a case where there has been a failure to review the lawfulness of detention speedily, as required by article 5(4), there may well be some respects in which a public authority could have acted differently; but, as I have explained, the absence of a speedy decision does not affect the question whether the prisoner can be released under the relevant provisions. It has not been suggested that section 3 of the 1998 Act requires those provisions to be read or given effect in a way that differs from their ordinary meaning. The question whether detention may constitute a violation of article 5(1), if it continues beyond the point in time when release would have been ordered if article 5(4) had been complied with, is in my view more difficult. As I have explained, article 5(4) provides a procedural entitlement designed to ensure that persons are not detained in violation of their rights under article 5(1): the notion of lawfulness has the same meaning in both guarantees. A violation of article 5(4) does not however entail eo ipso a violation of article 5(1). In Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, for example, the European court found that there had been a violation of article 5(4) as a result of delay in the holding of a hearing to determine whether the prolongation of detention was necessary, following the expiry of the period initially authorised. The court also held that there had been no violation of article 5(1). That conclusion was reached on the basis that the purpose of article 5(1) was to prevent persons from being deprived of their liberty in an arbitrary fashion, and, on the facts, the detention during the period of the delay could not be regarded as involving an arbitrary deprivation of liberty. The application of article 5(1) was considered by the House of Lords in R (James) v Secretary of State for Justice [2010] 1 AC 553. It is necessary to consider this case in some detail. The principal issue in the case arose from the failure of the Secretary of State to provide courses or treatment which would assist IPP prisoners to address their offending behaviour and enable them to undergo assessments which could demonstrate to the Board their safety for release. The appellant Jamess case was first considered by the Board three months after his tariff had expired, at which point a hearing was deferred, as he had been unable to participate in any relevant courses. A hearing subsequently took place, eight months after his tariff had expired, at which point the Board exceptionally directed his release notwithstanding his failure to undertake the courses. The appellant Wellss case was first considered by the Board nine months after his tariff had expired. The Board declined to direct his release, explaining that since he had been unable to take part in the relevant courses he could not demonstrate that he presented an acceptable level of risk. Wells had to wait until about two years after his tariff had expired before he was able to participate in the courses. A further hearing was held more than three years after the tariff had expired, at which point the Board directed his release. The appellant Lees case was considered by the Board four months after his tariff had expired. No direction was made for his release, since he had been unable to take part in the relevant courses. He had to wait almost three years after his tariff had expired before he could take part in the courses. The Board finally considered his case four years after the tariff had expired, and declined to order his release. The House of Lords held that there had been no violation of article 5(1) in any of the three cases. It was accepted that the causal connection between a prisoners conviction and the deprivation of his liberty, required by article 5(1)(a), might be broken by a prolonged failure to enable the prisoner to demonstrate that he was safe for release. The facts of the cases did not however demonstrate, in the view of the House, a breakdown of the system of such an extreme character as to warrant the conclusion that the prisoners detention following the expiry of their tariffs had been arbitrary. In a passage subsequently cited by the European court, Lord Hope of Craighead observed at para 15: The claimants' cases were referred by [the Secretary of State] to the Parole Board as the statute required. A favourable consideration of them may have been delayed, but performance of its task of monitoring their continued detention was not rendered impossible. Mr Lee and Mr Wells remain in custody because the Board was not yet satisfied that they are no longer a risk to the public. The causal link with the objectives of the sentencing court has not been broken. When the cases proceeded to Strasbourg (James, Wells and Lee v United Kingdom (2012) 56 EHRR 399, the European court agreed with the House of Lords that there was a sufficient causal connection between the applicants convictions and their deprivation of liberty following the expiry of their tariffs. Indeterminate sentences had been imposed on the applicants because they were considered to pose a risk to the public. Their release was contingent on their demonstrating to the Board's satisfaction that they no longer posed such a risk. As Lord Hope had pointed out, this was not a case where the Board was unable to carry out its function: its role was to determine whether the applicants were safe to be released and it had before it a number of documents to allow it to make that assessment. That conclusion was not affected by the fact that, without evidence that the applicants had undertaken treatment to reduce the risks they posed, the Board was unlikely to give an affirmative answer to that question. The European court nevertheless considered that the applicants post tariff detention had been arbitrary, and therefore in violation of article 5(1)(a), during the periods when they had no access to relevant courses to help them address the risks they posed to the public. That conclusion reflected the courts view, influenced by international law in respect of prison regimes, that a real opportunity for rehabilitation was a necessary element of any detention which was to be justified solely by reference to public protection. In other words, since the justification for detention after the expiry of the tariff was the protection of the public, it followed that the conditions of such detention must allow a real opportunity for rehabilitation. In the absence of such an opportunity, the detention must be considered to be arbitrary. The judgment of the European court in that case does not appear to me to be directly relevant to the present appeals. That is, in the first place, because these appeals are not concerned with the lack of access to rehabilitation courses which was in issue in James, Wells and Lee. Secondly, the awards made in James, Wells and Lee were not for loss of liberty but for the feelings of distress and frustration resulting from continued detention without access to the relevant courses: see para 244 of the judgment. That, as I have explained, is not an issue that arises in the present appeals. Just satisfaction and damages Article 41 of the Convention provides: If the court finds that there has been a violation of the Convention or the protocols thereto, and if the internal law of the high contracting party concerned allows only partial reparation to be made, the court shall, if necessary, afford just satisfaction to the injured party. Article 41 is not one of the articles scheduled to the 1998 Act, but it is reflected in section 8 of the Act, which so far as material is to this effect: (1) In relation to any act (or proposed act) of a public authority which the court finds is (or would be) unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate. (2) But damages may be awarded only by a court which has power to award damages, or to order the payment of compensation, in civil proceedings. (3) No award of damages is to be made unless, taking account of all the circumstances of the case, including (a) any other relief or remedy granted, or order made, in relation to the act in question (by that or any other court), and (b) the consequences of any decision (of that or any other court) in respect of that act, the court is satisfied that the award is necessary to afford just satisfaction to the person in whose favour it is made. (4) In determining (a) whether to award damages, or (b) the amount of an award, the court must take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under article 41 of the Convention. (6) In this section court includes a tribunal; damages means damages for an unlawful act of a public authority; and unlawful means unlawful under section 6(1). These provisions were considered by the House of Lords in R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673. In a speech with which the other members of the House agreed, Lord Bingham of Cornhill noted at para 6 that there are four preconditions to an award of damages under section 8: (1) that a finding of unlawfulness or prospective unlawfulness should be made based on breach or prospective breach by a public authority of a Convention right; (2) that the court should have power to award damages, or order the payment of compensation, in civil proceedings; (3) that the court should be satisfied, taking account of all the circumstances of the particular case, that an award of damages is necessary to afford just satisfaction to the person in whose favour it is made; and (4) that the court should consider an award of damages to be just and appropriate. In relation to the third and fourth of these requirements, Lord Bingham observed that it would seem to be clear that a domestic court could not award damages unless satisfied that it was necessary to do so; but, if satisfied that it was necessary to do so, it was hard to see how the court could consider it other than just and appropriate to do so. Lord Bingham also stated (ibid) that in deciding whether to award damages, and if so how much, the court was not strictly bound by the principles applied by the European court in awarding compensation under article 41 of the Convention, but it must take those principles into account. It was therefore to Strasbourg that British courts must look for guidance on the award of damages. A submission that courts in England and Wales should apply domestic scales of damages when exercising their power to award damages under section 8 was rejected. Dicta in earlier cases, suggesting that awards under section 8 should not be on the low side as compared with tortious awards and that English awards should provide the appropriate comparator, were implicitly disapproved (para 19). Lord Bingham gave a number of reasons why the approach adopted in the earlier cases should not be followed. First, the 1998 Act is not a tort statute. Even in a case where a finding of violation is not judged to afford the applicant just satisfaction, such a finding will be an important part of his remedy and an important vindication of the right he has asserted. Secondly, the purpose of incorporating the Convention in domestic law through the 1998 Act was not to give victims better remedies at home than they could recover in Strasbourg but to give them the same remedies without the delay and expense of resort to Strasbourg. Thirdly, section 8(4) requires a domestic court to take into account the principles applied by the European court under article 41 not only in determining whether to award damages but also in determining the amount of an award. Lord Bingham commented that there could be no clearer indication that courts in this country should look to Strasbourg and not to domestic precedents. This approach was not challenged in the present appeals. It differs from the ordinary approach to the relationship between domestic law and the Convention, according to which the courts endeavour to apply (and, if need be, develop) the common law, and interpret and apply statutory provisions, so as to arrive at a result which is in compliance with the UKs international obligations; the starting point being our own legal principles rather than the judgments of an international court. In contrast to that approach, section 8(3) and (4) of the Act have been construed as introducing into our domestic law an entirely novel remedy, the grant of which is discretionary, and which is described as damages but is not tortious in nature, inspired by article 41 of the Convention. Reflecting the international origins of the remedy and its lack of any native roots, the primary source of the principles which are to guide the courts in its application is said to be the practice of the international court that is its native habitat. I would however observe that over time, and as the practice of the European court comes increasingly to be absorbed into our own case law through judgments such as this, the remedy should become naturalised. While it will remain necessary to ensure that our law does not fall short of Convention standards, we should have confidence in our own case law under section 8 once it has developed sufficiently, and not be perpetually looking to the case law of an international court as our primary source. In Greenfield the House of Lords rejected a submission, repeated in the present appeals, that the levels of Strasbourg awards were not principles within the meaning of section 8(4). Lord Bingham stated at para 19: this is a legalistic distinction which is contradicted by the White Paper [Rights Brought Home: The Human Rights Bill (1997) (Cm 3782)] and the language of section 8 and has no place in a decision on the quantum of an award, to which principle has little application. The court routinely describes its awards as equitable, which I take to mean that they are not precisely calculated but are judged by the court to be fair in the individual case. Judges in England and Wales must also make a similar judgment in the case before them. They are not inflexibly bound by Strasbourg awards in what may be different cases. But they should not aim to be significantly more or less generous than the court might be expected to be, in a case where it was willing to make an award at all. The term principles is therefore to be understood in a broad sense. It is not confined to articulated statements of principle: such statements by the European court in relation to just satisfaction are uncommon, and, as will appear, it may be unsafe to take them at face value, without regard to what the court actually does in practice. The focus is rather upon how the court applies article 41: the factors which lead it to make an award of damages or to withhold such an award, and its practice in relation to the level of awards in different circumstances. As Lord Dyson observed in Rabone v Pennine Care NHS Foundation Trust [2012] UKSC 2; [2012] 2 AC 72, para 84, in the absence of a guideline case in which the range of compensation is specified and the relevant considerations are articulated, it is necessary for our courts to do their best in the light of such guidance as can be gleaned from the Strasbourg decisions on the facts of individual cases. The search for principles in this broad sense is by no means alien to British practitioners, at least to those who had experience of practice in the field of personal injury law before the Judicial Studies Board published its guidelines. The conventions underlying the amounts awarded as general damages (or, in Scotland, solatium) for particular forms of harm could only be inferred from an analysis of the awards in different cases and a comparison of their facts. It is an exercise of a similar kind which may be called for when applying section 8 of the 1998 Act in connection with the quantification of awards for non pecuniary damage (or moral damage, as the court sometimes describes it, employing a literal translation of the French expression). As Lord Bingham acknowledged, although the court must take into account the principles applied by the European court, it is not bound by them: the words must take into account are not the same as must follow. In particular, important though the guidance provided by the European court may be, there are differences between an international court and a domestic court which require to be borne in mind. One difference, of degree at least, which I have already mentioned is that the European court does not often articulate clear principles explaining when damages should be awarded or how they should be measured. That reflects a number of factors. One is that the court cannot replicate at an international level any one of the widely divergent approaches to damages adopted in the domestic legal systems from which its judges are drawn: the systems of 47 countries, stretching from the Atlantic to the Caspian, with diverse legal traditions. Nor is there a relevant body of principles of international law which it can apply. The court has therefore had to develop its own practice through its case law. Given the differing traditions from which its judges are drawn, and bearing in mind that the court has not regarded the award of just satisfaction as its principal concern, it is not altogether surprising that it has generally dealt with the subject relatively briefly, and has offered little explanation of its reasons for awarding particular amounts or for declining to make an award. Furthermore, as I shall shortly explain, the court has a more limited role in relation to fact finding than national courts, as is reflected in its procedure and in its treatment of evidence. For all these reasons, the court has treated questions of just satisfaction as requiring what it describes as an equitable approach, as the Grand Chamber explained in Al Jedda v United Kingdom (2011) 53 EHRR 789, para 114: The court recalls that it is not its role under article 41 to function akin to a domestic tort mechanism court in apportioning fault and compensatory damages between civil parties. Its guiding principle is equity, which above all involves flexibility and an objective consideration of what is just, fair and reasonable in all the circumstances of the case, including not only the position of the applicant but the overall context in which the breach occurred. Its non pecuniary awards serve to give recognition to the fact that moral damage occurred as a result of a breach of a fundamental human right and reflect in the broadest of terms the severity of the damage. In consequence of the European courts treatment of the award of damages as a broader and more discretionary exercise than under our domestic law, some commentators have expressed scepticism as to the existence of principles and as to the value of any attempt to identify them. Similar scepticism was expressed at the hearing of these appeals by counsel for the Secretary of State, who submitted that there was an air of unreality about the attempt by counsel for the appellants and the Board to analyse an accumulation of ad hoc decisions by a court which did not have the same regard for precedent as our courts. That view reflects factors which are undeniable. Nevertheless, such scepticism appears to me to be over stated. As Lord Bingham indicated in Greenfield in the passage which I have cited in paragraph 30, and as I have sought to explain in paragraph 31, the statutory expression principles has to be understood in a broad sense. In relation to the quantum of awards in particular, section 8(4) of the 1998 Act merely means that courts should aim to pitch their awards at the general level indicated by Strasbourg awards in comparable cases, so far as that can be estimated. In relation at least to some aspects of the application of article 41, a body of identifiable practices has developed through the case law of the European court. In Greenfield itself, for example, the House of Lords succeeded in identifying through an analysis of numerous judgments of the court, few of which contained any articulated statement of principle, the ordinary practice of the court when applying article 41 in relation to violations of the rights under article 6 to an independent tribunal, and to legal representation, in the determination of a criminal charge. In so far as there are principles in that sense, domestic courts are required by section 8(4) of the 1998 Act to take them into account. That is consistent with the wider approach to the Strasbourg case law described by Lord Slynn of Hadley in R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295, para 26: that, in the absence of some special circumstances, the court should follow any clear and constant jurisprudence of the European court. The over arching duty of the court under section 8(1) is however to grant such relief or remedy as it considers just and appropriate; and that duty exists even where no clear or consistent European practice can be discerned. A second difference between the European court and a national court is that the European court does not normally undertake detailed fact finding in relation to damages in the way which a national court of first instance would do, at least in jurisdictions such as those of the UK. As it observed in Denizci v Cyprus 23 May 2001, Reports of Judgments and Decisions, 2001 V, para 315, the court is acutely aware of its own shortcomings as a first instance tribunal of fact. The court referred in that connection to problems of language, to an inevitable lack of detailed and direct familiarity with the local conditions, and to its inability to compel the attendance of witnesses (or, it might have added, to secure the production of evidence). In consequence, it is often dependent upon the information and arguments put before it by the parties. If they conflict, rather than resolving the conflict it may say that it declines to speculate, or it may award damages for a loss of opportunity rather than undertaking a more definite assessment of the harm suffered. If, on the other hand, the material placed before it by the parties enables it to proceed upon a more detailed basis, it will do so. That will be the case, in particular, where the relevant facts have been found by the national court. To the extent that domestic courts, applying their ordinary rules of evidence and procedure, are able to resolve disputed issues of fact in circumstances in which the European court would not, and are therefore able to proceed upon the basis of proven facts in situations in which the European court could not, their decisions in relation to the award of damages under section 8 of the 1998 Act may consequently have a different factual basis from that which the European court would have adopted. A third difference between the European court and a national court reflects a further practical aspect of awards of damages at an international level: namely, that the awards made by the European court, including those in respect of non pecuniary loss, reflect the relative value of money in the contracting states. If applicants from different contracting states who had suffered identical violations of the Convention and had suffered identical non pecuniary losses were to receive identical awards, those awards would in reality be of much greater value to some applicants than to others. The point can be illustrated by the case of Cesk v Czech Republic (2000) 33 EHRR 181, where the applicant claimed the equivalent of 5660 for four years lost earnings, on the basis of average earnings in the Czech Republic between 1993 and 1997. Awards made by the European court to applicants from countries where the cost of living is relatively low tend to be low by comparison with awards to applicants from countries where the cost of living is much higher. In order to obtain guidance as to the appropriate level of awards under section 8 of the 1998 Act, it is therefore necessary to focus upon awards made to applicants from the UK or from other countries with a comparable cost of living. Three conclusions can be drawn from this discussion. First, at the present stage of the development of the remedy of damages under section 8 of the 1998 Act, courts should be guided, following Greenfield, primarily by any clear and consistent practice of the European court. Secondly, it should be borne in mind that awards by the European court reflect the real value of money in the country in question. The most reliable guidance as to the quantum of awards under section 8 will therefore be awards made by the European court in comparable cases brought by applicants from the UK or other countries with a similar cost of living. Thirdly, courts should resolve disputed issues of fact in the usual way even if the European court, in similar circumstances, would not do so. It is necessary next to turn to some of the authorities which were cited from the case law of the European court. Reflecting the foregoing conclusions, my focus will be primarily upon cases concerned with violations of article 5(4) arising from delay in the holding of a hearing, and in particular upon such of those cases as have concerned delay in the holding of a hearing to determine whether a convicted prisoner should be released. In relation to the quantum of damages, my focus will be upon such of those cases as concerned the UK or other countries in Western Europe. Damages for violations of the requirement that the lawfulness of detention be reviewed speedily In the great majority of cases since the inception of the modern court in November 1998, in which the European court has found a violation of article 5(4) by reason of a failure to decide the lawfulness of detention speedily, it has made an award of compensation in respect of non pecuniary damage. That has been the case, in particular, in every case of this kind concerned with the Board. In all of these cases the award was made to compensate for feelings of frustration, anxiety and the like caused by the violation. In most of the cases the court made no finding that there had been a loss of liberty, or the loss of an opportunity of liberty, as a consequence of the violation. Indeed, in several of the cases it expressly stated that it could not make any such finding. In the small number of cases where the court found that there had been a loss of an opportunity of liberty, this was not critical to the decision to make an award of damages. It appears therefore that in these cases, even in the absence of a real loss of opportunity of earlier release, the court would have regarded an award of damages as appropriate. The loss of opportunity was one aspect of the harm suffered; the feelings of frustration and anxiety were another. Very many examples could be cited, but it is enough to refer to the following cases, which I shall discuss in chronological order. Oldham v United Kingdom (2000) 31 EHRR 813 was a case where, as in the present appeal by Mr Faulkner, the violation of article 5(4) resulted from a delay between reviews by the Board. There had been a period of two years between successive reviews, in circumstances where the applicant had completed all the work required with a view to rehabilitation within the first eight months of that period. The court did not suggest that there had been any loss of liberty, but stated that the applicant must have suffered feelings of frustration, uncertainty and anxiety flowing from the delay in review which cannot be compensated solely by the finding of a violation (para 42). In Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001, a violation was found in similar circumstances, where there had been periods of 21 months and two years between successive reviews. The court repeated the statement it had made in Oldham, and also stated in terms that The court does not find that any loss of liberty may be regarded as flowing from the finding of a breach of article 5(4), which in this case is limited to the delay in between reviews (para 48). In Reid v United Kingdom (2003) 37 EHRR 211 there had been a delay in court proceedings in which the applicant challenged the lawfulness of his detention in a psychiatric hospital. The court stated that it could not speculate as to whether the applicant would have been released if the procedures adopted by the courts had been different (para 85). The court however noted a procedural breach concerning the burden of proof (which had been reversed) and the long period of delay in the proceedings brought by the applicant for his release, and considered that some feelings of frustration and anxiety must have arisen which justify an award of non pecuniary damage (para 86). In Blackstock v United Kingdom (2005) 42 EHRR 55 the circumstances were similar to those in Oldham and Hirst. The period between successive reviews was 22 months. The court again stated that it does not find that any loss of liberty may be regarded as flowing from the finding of a breach of article 5(4), which in this case is limited to the delay in between reviews, but that the applicant must have suffered feelings of frustration, uncertainty and anxiety flowing from the delays in review which cannot be compensated solely by the finding of violation (para 56). In Kolanis v United Kingdom (2005) 42 EHRR 206 there had been a delay of about 12 months in the reconsideration by a mental health tribunal of the case of a patient detained in a psychiatric hospital, following the discovery that practical difficulties prevented the implementation of an earlier decision that she should be conditionally discharged. The re consideration of the case resulted in the applicants discharge. The court stated that It cannot be excluded on the facts of this case that the applicant would have been released earlier if the procedures had conformed with article 5(4) and therefore she may claim to have suffered in that respect a real loss of opportunity (para 92). The court added that Furthermore the applicant must have suffered feelings of frustration, uncertainty and anxiety from the situation which cannot be compensated solely by the finding of violation (ibid). In Mooren v Germany (2009) 50 EHRR 554, a Grand Chamber decision, there had been a delay in the determination of proceedings for judicial review of an order for the applicants detention pending trial. There had also been procedural unfairness. The court found that both the violations of the fairness and of the speed requirements under article 5(4) caused the applicant non pecuniary damage, such as stress and frustration, which cannot be compensated solely by the findings of violations (para 130). In STS v Netherlands (2011) 54 EHRR 1229 there was a delay in determining an appeal by a juvenile offender against a decision to extend a period of custodial treatment previously imposed. Referring to para 76 of its judgment in the case of Nikolova v Bulgaria (1999) 31 EHRR 64, and to its judgments in the cases of HL v United Kingdom (2004) 40 EHRR 761 and Fodale v Italy (2006) 47 EHRR 965, to all of which it will be necessary to return, the court stated expressly that it cannot find it established that the Supreme Court would have ordered the applicant released had its decision been given any more speedily (para 69). Nevertheless, the court stated, under reference to its judgments in the cases of Reid, Kolanis and Mooren, the court considers that the applicant has suffered non pecuniary damage that cannot be made good merely by the finding of a violation of the Convention (para 70). Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013, in which judgment was given subsequent to the hearing of the present appeals, was a case where, as in the present appeal by Mr Sturnham, the violation of article 5(4) resulted from a delay in the holding of a review by the Board following the expiry of an IPP prisoners tariff. The court proceeded on the basis that the Board would not have ordered the applicants release had the review taken place speedily. It nevertheless made an award on the basis that the delay gave rise to feelings of frustration which were not sufficiently compensated by the findings of violations of the Convention (para 69). A number of examples can be found in the case law of the old court of cases in which the European court found a violation of article 5(4) by reason of a failure to decide the lawfulness of detention speedily, but made no award of compensation in respect of non pecuniary damage. They include Bezicheri v Italy (1989) 12 EHRR 210, where the court did not state the extent to which it considered that the proceedings had been unduly prolonged, but focused on the final two months; Koendjbiharie v Netherlands (1990) 13 EHRR 820, where unsuccessful proceedings brought by the applicant to challenge his detention in a state psychiatric clinic had taken four months to be completed, the period allowed under domestic law being three months; and E v Norway (1990) 17 EHRR 30, where the unacceptable delay would appear to have been about three or four weeks, and where the European court observed that, if the applicant had suffered any non pecuniary injury as a result of the undue length of the proceedings, the judgment provided him with sufficient just satisfaction. In the modern case law of the court, cases where no award has been made are unusual. One example is Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, where domestic court proceedings had lasted two and a half months at first instance and a further three months on appeal. The proceedings had been brought by the public prosecutor to obtain an extension of the period during which the applicant, who had been convicted of attempted murder, was confined in a secure institution where he was being treated. The proceedings were based on the institutions assessment that the applicant remained dangerous. The applicant unsuccessfully opposed the proceedings on a technical ground relating to jurisdiction. This was not, therefore, a case of delay affecting proceedings in which a person sought to establish that his continued detention was unjustified. The delayed hearing resulted in a decision that continued detention was justified. The European court found that the length of the proceedings may have engendered in the applicant a certain feeling of frustration, but not to the extent of justifying the award of compensation (para 59). Another example is Pavleti v Slovakia (Application No 39359/98) (unreported) 22 June 2004, where the European court found a violation of article 5(3) in that the applicants detention prior to trial, for a period of two years, had lasted an unreasonably long time. There was also a breach of article 5(4) relating to an application which the applicant had made to the public prosecutor to be released on bail. The prosecutor had transmitted the request to the domestic court, which had failed to deal with it. The European court found however that the applicants detention on remand had been justified. In dealing with the claim under article 41, it noted that the period spent on remand had been deducted from the prison sentence which the applicant was ordered to serve following his conviction; and the court has long accepted that the deduction of a period of detention from the ultimate sentence may remove the need for any further award in respect of non pecuniary loss arising from a violation of article 5(3) (see, for example, Neumeister v Austria (No 2) (1974) 1 EHRR 136, para 40). It decided that In view of the circumstances of the case the finding of a violation was sufficient to afford just satisfaction (para 110). The circumstances of the case included (i) that the detention on remand was justified, and (ii) that the period on remand had been deducted in full from the sentence. Although the court cited its Nikolova judgment, to which I shall return, in connection with an unrelated aspect of the case, it made no reference to it in its discussion of article 41. It is apparent therefore that the general practice of the European court is to apply article 41 on the basis that the failure to decide the lawfulness of detention speedily, as required by article 5(4), causes harm in the form of feelings of frustration and anxiety, for which damages should be awarded. It also appears that the court is prepared to presume such harm without direct proof, consistently with its approach to non pecuniary loss in other contexts. In Scordino v Italy (No 1) (2006) 45 EHRR 207, for example, the Grand Chamber said at para 204, in the context of unreasonable delay in violation of article 6(1), that there was a strong but rebuttable presumption that excessively long proceedings would occasion non pecuniary damage. It is clear from the cases which I have discussed that the court will make an award on that basis even where there has been no deprivation of liberty or loss of an opportunity of earlier release. Where such additional harm is established, however, the court can normally be expected to make an award of damages on that basis, which may be for both pecuniary and non pecuniary losses. The case law of the European court in relation to violations of the requirement to review the lawfulness of detention speedily is, therefore, unequivocally inconsistent with the submission, made on behalf of the Board, that there is a general rule that an award can only be made in respect of a violation of article 5(4) if the violation has resulted in a deprivation of liberty. That submission was based on judgments of the court which concerned violations of the requirement to have such reviews decided in accordance with a fair procedure. As these judgments appear to have been misinterpreted, it is necessary to turn to them next. Violations of the requirement that reviews of the lawfulness of detention follow a fair procedure The case in this category upon which the greatest weight was placed by the Board was Nikolova v Bulgaria (1999) 31 EHRR 64, a decision of the Grand Chamber concerned with the applicants detention in custody prior to trial. Her detention had initially been ordered by prosecutors. Her initial appeals against her detention were also decided by prosecutors. After three weeks she appealed to a court, which refused her appeal about four weeks later. It confined its consideration to the question whether she had been charged with a serious crime and whether her medical condition required that she be released. It did not consider the applicants arguments that she was unlikely to abscond or to interfere with the investigation. The case was examined in camera and without the participation of the parties, and the court considered written comments from the prosecutor to which the applicant had no opportunity to respond. The European court found that there had been a breach of article 5(3), which provides (so far as material): Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. There had also been a breach of article 5(4): the proceedings before the domestic court were not truly adversarial and did not ensure equality of arms, and the court had failed to consider the applicants contentions. The European court decided by a majority to make no award under article 41 in respect of non pecuniary damage, stating (para 76): The court recalls that in certain cases which concerned violations of article 5(3) and (4) it has granted claims for relatively small amounts in respect of non pecuniary damage (see Van Droogenbroeck v Belgium (1983) 13 EHRR 546, para 13, and De Jong, Baljet and Van den Brink v Netherlands (1984) 8 EHRR 20, para 65). However, in more recent cases concerning violations of either or both paragraphs 3 and 4 of article 5, the court has declined to accept such claims (see Pauwels v Belgium (1988) 11 EHRR 238, para 46, Brogan v United Kingdom (1989) 11 EHRR 117, para 9, Huber v Switzerland 23 October 1990, Publications of the European Court of Human Rights, Series A no 188, p 19, para 46, Toth v Austria (1991) 14 EHRR 551, para 91, Kampanis v Greece (1995) 21 EHRR 43, para 66, and Hood v United Kingdom (1999) EHRR 365, paras 84 87). In some of these judgments the court noted that just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of the guarantees of article 5(3) and concluded, according to the circumstances, that the finding of a violation constituted sufficient just satisfaction in respect of any non pecuniary damage suffered. In the present case the court sees no reason to depart from the above case law. The court cannot speculate as to whether or not the applicant would have been detained if there had been no violation of the Convention. As to the alleged frustration suffered by her on account of the absence of adequate procedural guarantees during her detention, the court finds that in the particular circumstances of the case the finding of a violation is sufficient. Counsel for the Board also referred to a number of other judgments of the European court concerned with violations of article 5(4) in which the same approach was followed as in Nikolova, on broadly similar facts. They include Niedbala v Poland (2000) 33 EHRR 1137, Migo v Poland (Application No 24244/94) (unreported) 25 June 2002, HL v United Kingdom (2004) 40 EHRR 761, Fodale v Italy (2006) 47 EHRR 965, Galliani v Romania (Application No 69273/01) (unreported) 10 June 2008 and Mitreski v Former Yugoslav Republic of Macedonia (Application No 11621/09) (unreported) 25 March 2010. A number of judgments concerned with violations of article 5(3), in which the same approach was followed, were also referred to. They included SBC v United Kingdom (2001) 34 EHRR 619. Paragraph 76 of the Nikolova judgment is relied on by the Board as an important statement of a general principle: as counsel put it, just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of article 5(3) and (4) protection. It is however apparent from the subsequent cases which I have discussed in paragraphs 40 to 48 that there is no such general principle: the European court has repeatedly made awards in respect of non pecuniary damage resulting from a violation of article 5(4) consequent upon delay, in the absence of any finding that the applicant had suffered a deprivation of liberty as a result of the violation. Furthermore, in several of those cases the court referred to Nikolova, without any indication that there was perceived to be an inconsistency between the courts award of just satisfaction in the case at hand and the Nikolova judgment. Those cases include Reid, STS v Netherlands and Betteridge, and also the judgment of the Grand Chamber in Mooren. The true scope of the judgment in Nikolova appears to be narrower. It is important to appreciate that the violation of article 5(4) with which the Nikolova judgment was concerned related solely to the procedural fairness of the domestic proceedings: in the courts words, the absence of adequate procedural guarantees. The same is true of the later judgments in which it was followed. Similarly, none of the earlier cases cited in Nikolova, in which the court had declined to make an award, concerned a violation of article 5(4) arising from delay. When the court spoke in Nikolova of procedural guarantees it appears to have had in mind the procedure followed when the lawfulness of the applicants detention was considered, rather than to the time that it took for that exercise to take place. That would be consistent with the courts approach under article 6(1), where awards are regularly made for breaches of the reasonable time guarantee, but where compensation may be denied in cases which have involved only procedural breaches of fair hearing guarantees. The distinction between the European courts approach to just satisfaction in cases where the violation of article 5(4) results from delay, and in cases where it results from some other procedural failure, was explained by the court in HL v United Kingdom (2004) 40 EHRR 761. The court described Nikolova as having endorsed the principle that, where the violation of article 5(3) or (4) was of a procedural nature, just satisfaction could be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not otherwise have suffered (para 148). The court then distinguished cases concerned with violations of article 5(4) arising from delay, stating (para 149): The awards of non pecuniary damages in Reid v United Kingdom (2003) 37 EHRR 211 and in the series of French cases to which the applicant referred [Delbec v France (Application No 43125/98) (unreported) 18 June 2002 and Laidin v France (Application No 43191/98) (unreported) 5 November 2002, both concerned with failures to deal speedily with applications to be discharged from psychiatric hospitals] followed findings of, inter alia, unreasonable delay in the domestic proceedings determining applications for release from detention. This is consistent with the award of non pecuniary damages following a finding of unreasonable delay under article 6(1) of the Convention: despite the procedural nature of such a violation, it is accepted that there can be a causal link between the violation (delay) and the non pecuniary damage claimed (see, more recently, Mitchell and Holloway v United Kingdom (2002) 36 EHRR 951, para 69). Although it is unnecessary to consider Nikolova further for the purpose of the present appeals, it should also be borne in mind that in para 76 of the judgment the court stated that it reached its conclusion in the particular circumstances of the case. Consistently with the courts general approach to article 41, that is not the language of a strict rule. There are numerous cases subsequent to Nikolova, not concerned with delay, in which awards have been made to applicants who had suffered feelings of frustration and anxiety caused by a violation of article 5(4). Examples include Curley v United Kingdom (2000) 31 EHRR 401, Stafford v United Kingdom (2002) 35 EHRR 1121, Waite v United Kingdom (2002) 36 EHRR 1001, Von Bulow v United Kingdom (2003) 39 EHRR 366 and Allen v United Kingdom (Application No 18837/06) (unreported) 30 March 2010 (in which Nikolova was cited, but not in connection with article 41). In its recent judgment in Abdi v United Kingdom (Application No 27770/08) (unreported) 9 April 2013 at para 91 the court cited para 76 of Nikolova and para 149 of HL in support of the proposition that in cases concerning article 5(3) of the Convention it has not made an award of damages unless it could be shown that the applicant would not have suffered if he or she had had the benefit of the guarantees of that article. Is there a de minimis principle? If, then, the failure to decide the lawfulness of detention speedily will normally result in an award of damages as compensation for mental suffering, does the delay have to be of a minimum duration in order to warrant such an award, as counsel for the Board contended? Is it enough that the delay is sufficiently long to constitute a violation of article 5(4), or may a delay which results in a violation of article 5(4) nevertheless not be sufficiently long to warrant an award of damages? The court did not specify in terms of time, in the cases discussed in paragraphs 41 to 49, the extent to which there had been a failure to decide the matter speedily. In the group of UK cases concerned with delays between successive reviews by the Board, the court observed that the question whether the periods between reviews complied with article 5(4) must be determined in the light of the circumstances of each case: it was not for the court to attempt to rule as to the maximum period of time between reviews which should automatically apply to an entire category of prisoners, since there were significant differences between their personal circumstances. The court also observed that in previous cases the Convention organs had accepted periods of less than a year between reviews and had rejected periods of more than a year. It was therefore not the entirety of the period between reviews in these cases which was unacceptable, but the excess beyond what would have been reasonable. The court did not specify what that period was. The cases are therefore of limited assistance in relation to the point now under consideration. Most of them would appear however to have involved an unacceptable delay of nine months or more. In the case of Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013, the hearing before the Board took place 13 months after the expiry of the tariff. In Kolanis v United Kingdom (2005) 42 EHRR 206, the delay was of the order of a year. The cases of Reid v United Kingdom (2003) 37 EHRR 211 and STS v Netherlands (2011) 54 EHRR 1229 appear to have involved delays of several months. There are other cases in which awards were made which involved shorter periods. In Mooren v Germany (2009) 50 EHRR 554, the proceedings for review of the order for the applicants detention on remand took two months and 22 days, which was considered excessive. The Grand Chamber emphasised the right of persons who have instituted proceedings challenging the lawfulness of their deprivation of liberty to a speedy judicial decision, and the strict standards laid down by the court in that respect (paras 106 107). In that regard, the court cited earlier decisions concerned with detention on remand. These included the case of GB v Switzerland (2000) 34 EHRR 265, where the court found that proceedings which had lasted 32 days had violated article 5(4) by reason of the time taken, and awarded compensation. It is however necessary to bear in mind, in considering these decisions, that persons detained on remand are in a particularly sensitive position, and are in consequence particularly liable to experience stress and anxiety if their application for bail is not determined speedily. Such proceedings cannot therefore be assumed to be equivalent, in relation to the award of damages for delay, to applications for release from imprisonment following conviction. Those cases might be contrasted with others in which no award was made. In Rutten v Netherlands (Application No 32605/96) (unreported) 24 July 2001, the unacceptable delay appears to have been of a few months at most, and the applicant sought compensation on the basis that his rights had been violated for a period of at least 17 days. As I have explained in paragraph 50, no compensation was awarded in that case. A similar conclusion was reached in the judgments, now somewhat dated, in Koendjbiharie v Netherlands (1990) 13 EHRR 820 and E v Norway (1990) 17 EHRR 30, which I have discussed in paragraph 49. In the former case, the unacceptable delay would appear to have been of about one month; in the latter, about three or four weeks. The question whether feelings of frustration and anxiety are sufficiently serious to warrant an award of compensation will evidently depend to some extent upon the circumstances of the individual case. Where for example there is a particular reason for anxiety, or where there is mental illness, even a relatively short delay may occasion acute mental suffering. It is impossible therefore to lay down absolute rules. It is on the other hand reasonable to suppose that the presumption that the lack of a speedy decision has occasioned sufficiently serious mental suffering to justify an award of compensation should only apply if the delay has been of a significant duration. In the circumstances of a convicted prisoner awaiting review of his case by the Board, the cases which I have discussed suggest that a delay of three months or more is likely to merit an award, whereas the stress and anxiety which can be inferred from a delay of shorter duration are ordinarily unlikely to be of sufficient severity. The quantum of awards for feelings of frustration and anxiety Awards for frustration and anxiety caused by violations of the article 5(4) guarantee of a speedy decision have invariably been modest. In Oldham v United Kingdom (2000) 31 EHRR 813 the court awarded 1000. In Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001 the award was again 1000. In Reid, where the delay was more substantial and there was also procedural unfairness, the award was 2000. In Blackstock v United Kingdom (2005) 42 EHRR 55 the award was 1460, the equivalent at that time of 1000. In Mooren the Chamber had awarded 1500 for distress resulting from delay alone. The Grand Chamber increased the award to 3000, but that award was for stress and frustration caused by the unfairness of the procedure as well as by delay. In STS the court awarded 2000, but in that case there was a breach of the requirement of effectiveness as well as of the requirement as to speed. In Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013 the court awarded 750, equivalent to 645. It would be a mistake to attempt to analyse these awards too closely: they were considered equitable in their particular circumstances. The cases involving delay in reviews by the Board nevertheless indicate the modest level of awards in the absence of special circumstances. The quantum of awards for loss of liberty No case was cited to this court in which the European court had made an award for a loss of liberty resulting from a violation of the speedy decision guarantee in article 5(4). There are however a number of cases in which awards were made for the loss of an opportunity of earlier release. Reference was also made to a number of cases in which awards were made for a loss of liberty resulting from violations of article 5(1), article 5(3) and article 6. Considering first the loss of opportunity awards under article 5(4), in the case of Kolanis v United Kingdom (2005) 42 EHRR 206, discussed in paragraph 46, the court considered that it could not be excluded that the applicant would have been released earlier from detention in a psychiatric hospital if the procedures had been in conformity with article 5(4). The delay had been of about 12 months. The award was 6000. The earlier case of Weeks v United Kingdom (1987) 10 EHRR 293 (judgment on the merits), (1988) 13 EHRR 435 (article 50 judgment) concerned the recall to prison of a prisoner who had been released on licence. His recall and subsequent detention were considered by the Board, but under the system then in place it could only make a non binding recommendation. Recommendations for release had not been acted upon. When the applicant was subsequently released, some years after his release had first been recommended, he repeatedly reoffended, and his licence was again revoked. The Grand Chamber made an award of 8000, equivalent to about 17600 if adjusted for inflation, for both pecuniary and non pecuniary losses. In relation to the former, the applicant had made a substantial claim which the court considered could not be completely discounted. In relation to non pecuniary loss, the court said that the applicant must have been caused feelings of frustration and helplessness. The court did not explain how it arrived at the global sum which it awarded. The parties also cited a number of cases concerned with violations of article 5(1) which had resulted in a deprivation of liberty. In some of the cases relied upon, awards were made which were either unusually low or unusually high, for particular reasons explained by the European court. In other cases, the low awards reflected the value of money in the countries in question. Awards made in more typical cases involving the UK, or other countries with a comparable cost of living, are potentially of greater assistance. In Johnson v United Kingdom (1997) 27 EHRR 296 the applicant had been detained in a psychiatric hospital in breach of article 5(1) for a period of three and a half years. The court observed that the delay in his release could not be attributed entirely to the authorities: some delay was inevitable, as a suitable hostel placement had to be found, and in addition the applicant had contributed to the delay by his refusal to co operate. Having regard to those factors, the court awarded 10,000. In Beet v United Kingdom (2005) 41 EHRR 441 the court made an award of 5000 as compensation for unlawful detention in prison for a period of two days. In Medvedyev v France (2010) 51 EHRR 899 an award of 5000 was made by the Grand Chamber to applicants who had been unlawfully detained on board a ship for 13 days. The relatively low awards made in such cases as Jecius v Lithuania (2000) 35 EHRR 400, Kucheruk v Ukraine (2007) 52 EHRR 878 and Veniosov v Ukraine (Application No 30634/05) (unreported) 15 December 2011, to which the Board referred, are less relevant for the reasons I have explained in paragraph 38. Reference was also made to a number of cases in which awards were made for violations of article 5(3). These cases do not appear to me to be of assistance. The case of Caballero v United Kingdom (2000) 30 EHRR 643 concerned an applicant who had been detained in custody prior to trial as he fell within a category of accused persons to whom bail could not be granted. The period spent on remand had been deducted from the sentence, so that ordinarily no award would have been made. The court however noted that the applicants state of health was such that any release on bail prior to his trial could have been his last days of liberty. There was also undisputed evidence that the applicant would have had a good chance of being released on bail but for the breach of article 5(3). In these exceptional circumstances, an award of 1000 was made on an equitable basis. The other cases cited concerned countries where the value of money is much lower than in the United Kingdom. Reference was also made to two UK cases where there had been a loss of liberty, or of the opportunity of liberty, as a result of violations of article 6. First, in Perks v United Kingdom (1999) 30 EHRR 33 there had been a finding by the domestic courts that the applicant was unlikely to have been committed to prison, where he spent six days, if he had received competent legal assistance. Proceeding on that basis, the European court awarded 5500. Secondly, in Hooper v United Kingdom (2004) 41 EHRR 1 the applicant had been imprisoned for two weeks in default of finding surety for a binding over order. It had been found by the High Court that, if a fair procedure had been followed, the magistrate might well have been persuaded to a different result. The European court observed that this conclusion was not expressed in such strong terms as in Perks, and awarded 8000. In considering these awards, it is necessary to bear in mind that unlawful detention in violation of article 5(1) is often a particularly serious violation of the Convention, and is of a different nature from a violation of article 5(4). It is also necessary to take into account that the freedom enjoyed by a life prisoner released on licence is more circumscribed in law and more precarious than the freedom enjoyed by the ordinary citizen, as the European court has recognised (Weeks v United Kingdom (1987) 10 EHRR 293, para 40). The risk that a prisoner may be recalled to custody, even where no further offence has been committed, is real, as the facts of Weeks and of Mr Faulkners case, to which I shall return, amply demonstrate. Although the European court does not make precise adjustments to reflect inflation, it is also necessary to bear in mind that some of these awards were made many years ago. For these reasons, none of the awards which I have mentioned offers any clear guidance. That said, the most helpful is perhaps the award in the Kolanis case, since it related to a breach of article 5(4). As I have explained, in that case 6000 was awarded in 2005 as compensation for the loss of a real opportunity of release 12 months earlier from a psychiatric hospital. A higher award would no doubt have been appropriate if there had been a definite loss of liberty for 12 months; but a lower award would have been appropriate if, instead of a patient losing her liberty, the case had concerned a convicted prisoner who had lost an opportunity of earlier release on licence. The award in Weeks, considered in the context of the facts of that case, similarly suggests a level of awards for breaches of article 5(4) in respect of convicted prisoners which is much lower than the level in such cases as Beet or Perks. Allowing for the various factors which I have mentioned, and in particular for the important differences between conditional release and complete freedom, the cases which I have discussed suggest that awards where detention has been prolonged for several months, as the result of a violation of article 5(4), could reasonably be expected to be significantly above awards for frustration and anxiety alone, but well below the level of awards for a loss of unrestricted liberty. It is however impossible to derive any precise guidance from these awards. In accordance with section 8(1) and (4), a judgment has to be made by domestic courts as to what is just and appropriate in the individual case, taking into account such guidance as is available from awards made by the European court, or by domestic courts under section 8 of the 1998 Act, in comparable cases. It remains to apply the general principles which I have explained to the particular cases which are before the court. The case of Daniel Faulkner In 1999 Daniel Faulkner, then aged 16, was sentenced to two years detention for an offence involving grievous bodily harm. In 2001, at the age of 18, he was convicted of a second such offence. He was sentenced to custody for life, in accordance with section 109 of the 2000 Act. The tariff period was set at two years and eight and a half months. That period expired in April 2004. In May 2005 the Board recommended that Mr Faulkner should be transferred to open conditions, but that recommendation was rejected by the Secretary of State. In January 2007 the Board made a similar recommendation, which was again rejected. Mr Faulkners case was next due to be heard by the Parole Board in January 2008. The Secretary of State was informed of that date, but the case was not referred to the Board by a case worker in the Ministry of Justice until 21 December 2007, making it impossible to fix a hearing for January 2008 as intended. The case was however provisionally listed for a hearing in May 2008, pending the receipt of the necessary dossier of reports, known as the rule 6 dossier, from the prison where Mr Faulkner was detained. That dossier should have been provided to the Board in about September 2007. In the event, the dossier was not provided until 6 May 2008. The reasons for that delay are not apparent. Having received the dossier, the Board conducted a case management review on 16 May 2008, at which it decided that the hearing could not now proceed during that month. It also directed the prison to provide further reports which it required and which were missing from the dossier. Those reports were not received until 8 October 2008. The reasons for the time taken to provide those reports are not apparent. The Board then fixed a hearing to be held on 8 January 2009. On 23 January 2009 the Board directed Mr Faulkners release, and he was released four days later. On 22 May 2009 Mr Faulkners licence was revoked. He had been arrested on suspicion of wounding, and had failed to attend a meeting with his offender manager. He remained in hiding until 17 October 2009, when he was returned to prison. He was subsequently acquitted of the charge of wounding. The Board directed his release on 22 April 2010, and he was then released. On 13 June 2011 Mr Faulkners licence was again revoked, following his arrest on suspicion of having committed an offence of grievous bodily harm. He was subsequently acquitted of that charge. He remains in custody. In October 2008 Mr Faulkner was granted permission to apply for judicial review of the failure of the Board and the Secretary of State to conduct a review of his detention, in breach of article 5(4) of the Convention as given effect by the 1998 Act. The application was heard in June 2009, while Mr Faulkner was unlawfully at large, and was dismissed ([2009] EWHC 1507 (Admin)). The judge considered that, even if Mr Faulkner had succeeded on the merits of his application, no award of damages would have been appropriate. An appeal against that decision was allowed by the Court of Appeal ([2010] EWCA Civ 1434; [2011] HRLR 165). In a judgment delivered by Hooper LJ, with whom Sedley and Wilson LJJ agreed, the court held that: (1) Mr Faulkner had suffered a breach of article 5(4) lasting for a period of 10 months, between March 2008 and January 2009, due to unjustified delays on the part of the Ministry of Justice. There had not been any unjustified delay by the Board in setting the hearing date, once all the reports were available. (2) There was no reason in this case to award damages for a breach of article 5(4) on the basis of a loss of a real chance of earlier release. Rather, it was necessary for Mr Faulkner to show that he would have been released earlier if the breach had not occurred. (3) Mr Faulkner had shown on the balance of probabilities that he would have been released if the review had taken place in about March 2008. (4) As a result of the breach of article 5(4), Mr Faulkner had spent some 10 months in prison when he ought not to have done. The court then invited parties to make written submissions on the quantum of damages. Hooper LJs conclusion that Mr Faulkner could only recover for a loss of liberty if he established on a balance of probabilities that he would have been released earlier, and that it was not enough to show that there was a loss of a chance, was in my view correct. As I have explained at paragraph 37, the Strasbourg courts approach to this issue reflects its limited fact finding role: it will make an award for a loss of liberty if that is uncontested, but otherwise it is likely either to decline to speculate, or to make an award for a loss of opportunity. A domestic court is not however restricted in its fact finding capabilities. In those circumstances, it is not in my view required by section 8 of the 1998 Act to apply a self denying ordinance, but should establish the facts of the case in the usual way, and apply the normal domestic principle that the claimant has to establish on a balance of probabilities that he has suffered loss. Hooper LJ also rejected a submission that events following Mr Faulkners release were relevant to the issue of quantum. He observed that it would be speculation to say that, if Mr Faulkner had been released earlier, he might have been back in prison a few months later for breach of his licence; and, furthermore, that taking into account that Mr Faulkner spent a further six months in prison following his recall, for conduct of which he was ultimately acquitted, there was no reason why his damages award should be reduced. I agree. The court cannot reduce the damages it would otherwise have awarded on the basis of speculation. It is possible to conceive of circumstances in which a different conclusion might be appropriate: for example, where the claimant was recalled after committing an offence which he had been planning prior to his release and which would probably have been committed earlier if he had been released earlier. This is not however a case of that kind. On the facts of Mr Faulkners case, including his acquittal of any criminal responsibility in respect of the circumstances leading to his recall, the court is not in a position to say that, if he had been released earlier, he would simply have behaved that much sooner in the manner which led to the revocation of his licence. In its decision on quantum ([2011] EWCA Civ 349; [2011] HRLR 489), the Court of Appeal ordered the Secretary of State to pay Mr Faulkner 10000. The judgment of the court was delivered by Sedley LJ. He correctly proceeded on the basis that the court should not adjust its award according to the degree of probability of release had the violation not occurred. That follows from the general approach which I have discussed in paragraph 37. Once the court has found on a balance of probabilities that the claimant would have been released earlier if there had been no violation, he should ordinarily be fully compensated for the harm which he has suffered. In relation to quantum, the court arrived at the figure of 10000 by making a broad assessment of the award which appeared to it to be appropriate. The Board appealed to this court against that award on the ground that it was excessive. The fact that the appeal was taken by the Board, rather than by the Secretary of State, reflects the fact that the judgment is regarded as having significant consequences for the Board in relation to other cases, although the Secretary of State has agreed to be responsible for the discharge of any award made in the present case. No point was taken on behalf of Mr Faulkner in respect of the identity of the appellant. Mr Faulkner also appealed against the award on the ground that it was inadequate. He was in addition granted permission to argue that his detention, after the date when his case ought to have been heard by the Board, constituted false imprisonment at common law, or a violation of article 5(1) of the Convention. These contentions had not been advanced in the courts below, but no objection was taken on behalf of the Board or the Secretary of State. For the reasons which I have explained at paragraph 16, the submission that Mr Faulkner was the victim of false imprisonment under English law must be rejected. So too, for the reasons explained at paragraph 23, must the submission that he was detained in violation of article 5(1). The problems which resulted in delay in Mr Faulkners case, according to the findings of the Court of Appeal, appear to have been the result of errors by administrative staff, of a kind which occur from time to time in any system which is vulnerable to human error. It was extremely unfortunate that the errors occurred and resulted in the prolongation of Mr Faulkners detention, but they were not of such a character, and the delay was not of such a degree, as in my view to warrant the conclusion that there was a violation of article 5(1). An appellate court will not interfere with an award of damages simply because it would have awarded a different figure if it had tried the case at first instance. In these appeals however this court is being invited to give guidance as to the appropriate level of awards in cases of this character. For that purpose, the court has undertaken a fuller analysis of the Strasbourg authorities than the Court of Appeal, in the course of which it has considered authorities to which that court was not referred. In the light of that analysis, and applying the general approach which I have described in paragraph 75, it appears to me that an award in the region of 6500 would adequately compensate Mr Faulkner for his delayed release, bearing in mind the conditional and precarious nature of the liberty foregone. That amount falls well short of the award of 10,000 made by the Court of Appeal. In the circumstances, it is in my view appropriate for this court to allow the Boards appeal and to reduce the award accordingly. The case of Samuel Sturnham In May 2006 Samuel Sturnham was involved in an altercation outside a public house in the course of which he punched a man, who fell backwards and struck his head on the ground. He died the next day. In January 2007 Mr Sturnham was convicted of manslaughter. He had no previous convictions for offences of violence. An IPP sentence was imposed under section 225 of the 2003 Act, with a tariff period of two years and 108 days. That period expired on 19 May 2009. Mr Sturnhams case was referred to the Board by the Secretary of State on 10 July 2008, in good time for a review to take place around the time when his tariff expired. The Secretary of State however misinformed the prison where Mr Sturnham was detained as to the date when the rule 6 dossier was required, with the result that it was not prepared in time. The prison appears to have disregarded correspondence from the Board informing it of the date when the dossier was required, and subsequent correspondence informing it that the dossier was overdue. The prison then failed to prepare the dossier in accordance with the Secretary of States instructions. The Secretary of State had not followed the normal practice of setting up a mechanism for a reminder to be sent if the dossier was not provided in time. As a result of these various administrative failures, the dossier was not provided to the Board until 30 July 2009. A hearing was not convened until April 2010. The delay in listing the case for hearing was due in part to a request by Mr Sturnham for an extension of time to make representations. That hearing had to be adjourned, as Mr Sturnham was unwell. A review finally took place on 10 May 2010. The Board declined to order Mr Sturnhams release, but recommended his transfer to open conditions. He was transferred to such conditions in August 2010. His case was again reviewed in July and August 2011, when the Board directed that he should be released on licence. He was released in September 2011. Mr Sturnham brought proceedings for judicial review in which he challenged the lawfulness of the decision taken by the Board following the hearing in May 2010, and also the delay in holding that hearing. The application was heard in March 2011 by Mitting J, who rejected the challenge in respect of the lawfulness of the decision. In relation to the issue of delay, he held ([2011] EWHC 938 (Admin)) that: (1) Mr Sturnhams rights under article 5(4) were breached in that the hearing before the Board did not take place until approximately six months had elapsed from the date on which it should have taken place. That delay resulted from the delay in the delivery of the dossier to the Board. (2) There was no prospect that Mr Sturnhams release would have been ordered if the hearing had taken place six months earlier. (3) It was more likely than not that the Board would have directed Mr Sturnhams transfer to open conditions six months earlier than occurred. (4) Such a transfer would not necessarily have resulted in his earlier release. Nor would it have done so to a lower standard of probability. (5) Mr Sturnham had been caused anxiety and distress by the delay. In view of the six month delay, the judge ordered the Secretary of State to pay Mr Sturnham 300 as compensation for the consequent anxiety and distress. He arrived at that figure by taking as a guide the award of 1200 made in R (Guntrip) v Secretary of State for Justice [2010] EWHC 3188 (Admin), where the first hearing before the Board, following the expiry of the tariff, had not taken place until about two years after the latest date by which it ought to have been held. The judge treated the award in Guntrip as amounting to 50 per month, and accordingly awarded 300 for a delay of six months. The Secretary of State appealed against that award on the ground that no award should have been made. Mr Sturnham appealed against the High Courts rejection of his challenge to the lawfulness of the Boards decision. He also sought permission to cross appeal on the ground that the award should have been higher. The Court of Appeal allowed the Secretary of States appeal, dismissed Mr Sturnhams appeal and quashed the award ([2012] EWCA Civ 452; [2012] 3 WLR 476). It refused Mr Sturnham permission to cross appeal on quantum. The judgment of the Court of Appeal was given by Laws LJ, with whom the other members of the court agreed. Laws LJ took as his starting point the different treatment under the common law of wrongs in private law and in public law, and considered that an analogous distinction was reflected in some of the Strasbourg case law: in particular, in the cases of Nikolova v Bulgaria (1999) 31 EHRR 64, Niedbala v Poland (2000) 33 EHRR 1137 and Migo v Poland (Application No 24244/94) (unreported) 25 June 2002, which I have discussed at paragraphs 55 to 61. In the light of those cases, Laws LJ found it difficult to see how cases in which awards had been made for frustration and anxiety, such as Oldham v United Kingdom (2000) 31 EHRR 813, Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001 and Blackstock v United Kingdom (2005) 42 EHRR 55, could be treated as constituting an authoritative body of principle. He concluded that, in an article 5(4) case concerned with delay, just satisfaction would ordinarily be achieved by a declaration of the violation. If however the violation involved an outcome for the claimant in the nature of a trespass to the person, just satisfaction was likely to require an award of damages. The paradigm of such a case arose where the claimant's detention was extended by reason of the delay. Cases where the consequence of the delay was merely stress and anxiety would not generally attract compensation in the absence of some special feature by which the claimant's suffering was materially aggravated. Following that approach, no award was appropriate in Mr Sturnhams case. Mr Sturnham applied to this court for permission to appeal against the Court of Appeals decision to dismiss his appeal and to allow the Secretary of States appeal. The Board and the Secretary of State objected to the grant of permission. The court directed that Mr Sturnhams application for permission should be heard with the appeal in Mr Faulkners case, with the appeal to follow if permission were granted. In the event, the court granted Mr Sturnhams application in relation to the Court of Appeals decision to allow the Secretary of States appeal and quash the award, and heard the appeal on that point together with the appeal and cross appeal in Mr Faulkners case. The court deferred consideration of Mr Sturnhams application in respect of the Court of Appeals decision to dismiss his appeal, since it raised a different issue. At the hearing of the appeal, Mr Sturnham also sought permission to argue for a higher award. He relied upon section 40(5) of the Constitutional Reform Act 2005 (the 2005 Act), which provides: The court has power to determine any question necessary to be determined for the purposes of doing justice in an appeal to it under any enactment. That provision is concerned with questions which it is necessary to determine in order to do justice in an appeal. It does not provide a means of circumventing the need to obtain permission to appeal, where such permission is necessary in order to raise the question in issue. As I have explained, Mr Sturnham was refused permission to appeal in respect of the quantum of the award. It is unnecessary to determine whether the award was too low in order to do justice in his appeal against the quashing of the award. Mr Sturnhams application should therefore be refused. Turning then to Mr Sturnhams appeal against the quashing of his award of damages, his appeal should in my view be allowed. The Court of Appeal was wrong to take as its starting point the treatment of wrongs under the common law. Following R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673, the starting point, at this stage in the development of the remedy of damages under section 8 of the 1998 Act, should be the practice of the European court. The Court of Appeal also erred in its interpretation of the Strasbourg case law. As I have explained at paragraphs 58 to 60, the Nikolova line of authority is not concerned with violations resulting from delay. The Oldham line of authority illustrates how cases of the latter kind are dealt with. It is unfortunate that the case of HL v United Kingdom (2004) 40 EHRR 761, which contains the clearest explanation of the distinction between the two lines of authority, does not appear to have been cited to the Court of Appeal. Approaching Mr Sturnhams case in the light of the authorities from Oldham to Betteridge, it is apparent that an award of damages was appropriate as compensation for the frustration and anxiety which he suffered. The frustration and anxiety occasioned by a delay of six months cannot in my view be regarded as insufficiently severe to warrant such an award. In the light of the awards made in the Strasbourg cases, of which Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013 is the most nearly in point, the award of 300 which was made by the judge was reasonable in the circumstances of this case. Conclusion For the reasons I have explained, I consider that the appeal in the case of Mr Faulkner should be allowed, and that the sum of 10000 awarded as damages by the Court of Appeal should be reduced to 6500. The cross appeal should be dismissed. Mr Sturnhams appeal against the quashing of his award of damages should be allowed. Postscript: submissions on the case law of the European Court of Human Rights In the present appeals, the Strasbourg case law was presented to the court in the usual way. The court was provided with bound volumes of authorities in which the cases appeared in alphabetical order, and counsel referred the court to the authorities in the order in which they featured in their submissions. Around 75 Strasbourg authorities were cited to the court. It was a time consuming process to be taken through each of the cases at least twice, as each counsel in turn presented their analysis of it. Eventually the court requested to be provided with a schedule of the kind I shall shortly explain. The manner in which the authorities were presented also made it difficult for the court to discern how the case law had developed over time, as it was difficult to keep track of how the cases related to one another chronologically. Counsel are not to be criticised for having proceeded in this way, but with the benefit of hindsight it is apparent that it would be possible to present the authorities to the court in a more helpful way. With that aim in mind, the following guidance should be followed in any future cases where it is necessary to cite substantial numbers of Strasbourg decisions on the application of article 41 with a view to identifying the underlying principles. That exercise will not of course be necessary in relation to any future case on article 5(4), which should take the present judgment as its starting point. First, the court should be provided with an agreed Scott schedule, that is to say a table setting out the relevant information about each of the authorities under a series of columns. The information required is as follows: 1. The name and citation of the case, and its location in the bound volumes of authorities. 2. The violations of the Convention which were established, with references to the paragraphs in the judgment where the findings were made. 3. The damages awarded, if any. It is helpful if their sterling equivalent at present values can be agreed. 4. A brief summary of the appellants contentions in relation to the case, with references to the key paragraphs in the judgment. 5. A brief summary of the respondents contentions in relation to the case, again with references to the key paragraphs. Secondly, the court should be provided with a table listing the authorities in chronological order. Thirdly, it has to be borne in mind that extracting principles from a blizzard of authorities requires painstaking effort. The submissions should explain the principles which counsel maintain can be derived from the authorities, and how the authorities support those principles. Otherwise, to adapt Mark Twains remark about life, the citation of authorities is liable to amount to little more than one damn thing after another; or even, to borrow a well known riposte, the same damn thing over and over again. LORD CARNWATH I agree with the disposal of the appeals proposed by Lord Reed, and am content to adopt his reasons. I add a concurring judgment of my own, not by way of disagreement, but merely to suggest an alternative, and perhaps less laborious, route to the same end. It is based on a more selective approach to the Strasbourg jurisprudence, which also accords more closely to that of the Court of Appeal in this case. Given the enormous workload of the Strasbourg court, and the varied composition of the chambers to which cases are allocated, it is unrealistic to treat all decisions as of equal weight, particularly on the issue of damages. The great majority of such awards are made on an equitable basis reflecting particular facts. No doubt the judges attempt to achieve a degree of internal consistency. But most of the decisions are not intended to have any precedential effect, and it is a mistake in my view to treat them as if they were. Principles under the Human Rights Act 1998 The starting point must be section 8 of the Human Rights Act 1998, the relevant parts of which have been set out by Lord Reed. Of particular significance is section 8(4) which requires the court to take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under article 41 of the Convention. The emphasis on principles applied by the Strasbourg court has been seen as problematic. In their review in 2000 (Damages under the Human Rights Act 1998, Law Com No 266; Scot Law Com No 180), the Law Commissioners drew attention to the striking lack of clear principles relating to the award of damages in the Strasbourg case law (para 3.4). They attributed this to a number of factors, including the diverse traditions in the countries within the jurisdiction of that court: On the one hand, the German and Dutch systems have rules as detailed as the English. Their theories of causation are highly developed, and pecuniary and non pecuniary loss are dealt with under clearly separated headings. In contrast, French and Belgian courts proceed empirically in matters of causation, with a minimum of theorising and swayed by considerations of fairness as much as causal potency. Thus, in French private law, for example, the measure of damages is regarded as a matter for the sovereign power of assessment of the judge of first instance. The comparative lack of structure is most evident in relation to the assessment of the relevant damage. This is always treated as a question of fact, thus leaving the judge in the lower court with a degree of unstructured discretion to adjust the award as he or she sees fit. As long as the award is framed properly in law, the appeal courts will not interfere with it. Conventional scales are sometimes used, but must not be treated as rules of law. In particular, French judges do not draw clear distinctions between different heads of loss. The Strasbourg practice appears to be close to the French tradition. (para 3.7 8). They also cited practical factors: At a more practical level, the character and size of the court inevitably affects its ability to deal with detailed issues of damages in a consistent way. It is a large body, sitting in a number of different constitutions. The judges are drawn from different backgrounds and diverse jurisdictions, and will have varied experiences of awarding damages. It is inevitable that their views as to the proper level of compensation, and the basis on which it should be assessed, will differ. (para 3.10) Against that background, there was force in the comments of the academic commentators cited by the Commissions (paras 3.12). Thus Dinah Shelton commented: It is rare to find a reasoned decision articulating principles on which a remedy is afforded. One former judge of the European Court of Human Rights privately states: We have no principles. Another judge responds, We have principles, we just do not apply them. (D Shelton, Remedies in International Human Rights Law (1999) p 1) Similarly, Lester and Pannick saw the courts decisions on just satisfaction as little more than equitable assessments of the facts of the individual case, and urged that there is a danger of spending time attempting to identify principles that do not exist. (Lord Lester of Herne Hill and D Pannick (eds), Human Rights Law and Practice (1999) para 2.8.4, note 3). As will be seen, the court has taken some steps to address these criticisms by choosing particular cases in which to offer more reasoned justifications. Domestic case law Since the Law Commissions report a significant body of domestic case law has developed, the most important authorities being Anufrijeva v Southwark London Borough Council [2004] QB 1124 (article 8), in the Court of Appeal, and R (Greenfield) v Secretary of State for the Home Department [2005] 1 WLR 673 (article 6) in the House of Lords. Neither was directly concerned with a violation of article 5(4), as in this case. In the latter Lord Bingham referred to the risk of error if Strasbourg decisions given in relation to one article of the Convention are read across as applicable to another (para 7). Those words seem to me of general application, even though he was drawing a specific contrast with article 5(5), which (uniquely in the Convention) confirms a specific right to compensation for arrest or detention in breach of that article. It appears from other Strasbourg authority that article 5(5) has limited effect in relation to the procedural rights conferred by articles 5(3) and (4), under which entitlement to compensation depends on the circumstances of each case (Pavletic v Slovakia (Application No 39359/98 (unreported) 22 June 2004, para 95). Lord Binghams speech in Greenfield provides the most recent, authoritative guidance on the correct approach of the domestic courts to the issue of compensation for breaches of the Convention rights. As a general comment on the Strasbourg cases on this issue, Lord Bingham adopted the words of the Court of Appeal in Anufrijeva, paras 52 53: The remedy of damages generally plays a less prominent role in actions based on breaches of the articles of the Convention, than in actions based on breaches of private law obligations where, more often than not, the only remedy claimed is damages. Where an infringement of an individual's human rights has occurred, the concern will usually be to bring the infringement to an end and any question of compensation will be of secondary, if any, importance. As Lord Reed has explained, an important point in the speech is the confirmation that, in accordance with section 8(4) of the 1998 Act, domestic British courts should look to Strasbourg, rather than to common law precedents, for guidance on the award and assessment of damages (paras 6, 19). Lord Bingham rejected as unduly legalistic an argument that the levels of Strasbourg awards were not principles within the meaning of section 8. Greenfield itself related to a disciplinary decision in a prison resulting in additional days of imprisonment. By the time the case reached the House of Lords it had been conceded that there was a violation of article 6, in that the decision had not been made by an independent tribunal, and there had been no right to legal representation; the only issue therefore was damages. It is true, as Lord Reed notes (para 36), that Lord Binghams speech contained analysis of numerous decisions of the European court, few of which contained any articulated statement of principle. However, that exercise does not appear to have been critical to the ultimate decision. He was able to identify a clear and relevant statement of practice in a decision of the Grand Chamber, Kingsley v United Kingdom (2002) 35 EHRR 177, para 43: In all the circumstances, and in accordance with its normal practice, in civil and criminal cases, as regards violations of article 6(1) caused by failures of objective or structural independence and impartiality, the court does not consider it appropriate to award monetary compensation to the applicant in respect of loss of procedural opportunity or any distress, loss or damage allegedly flowing from the outcome of the domestic proceedings. (emphasis added) Lord Bingham commented: Thus, whatever the practice in other classes of case, the ordinary practice is not to make an award in cases of structural bias. (para 16) On the facts of the case before him, he found no special feature which warrants an award of damages (para 29). I agree, respectfully, with Lord Bingham that the extreme view that there are no principles at all is inconsistent with the underlying assumption of section 8(4). However, the specific reference to principles in section 8(4) must be given some effect. Those words may be contrasted with the more general duty imposed on the domestic courts by section 2(1). The duty, when determining any question in connection with a Convention right is to take into account any judgment of the Strasbourg court, so far as considered relevant to the proceedings in which the question arises (section 2(1)). The more specific wording of section 8(4) in my view reflects the reality that not all decisions of the Strasbourg court in relation to damages will be determinative, or even illustrative, of any principle of general application. Accordingly, while Strasbourg case law must be the starting point, the primary search in my view should be for cases, which are not only referable to the particular article and type of case under consideration, but are also identifiable as more than simple, one off decisions on their own facts. This may be, for example, because they are expressed in terms of principle or practice (as in Kingsley), or contain substantive discussion of principle, or can be shown to be part of a recognisable trend applied in a series of cases on the same subject matter. The court should not be subjected to a blizzard of authorities (as Lord Reed describes it). It is incumbent on those arguing for a principle to show why the cases on which they rely meet those requirements. Where the court is faced with an apparent conflict between two different lines of approach, the court may have to choose between them in as principled a way as the context makes possible. Principles under article 5(4) That approach can be illustrated by reference to the cases reviewed by Lord Reed in the present case. In Sturnham in the Court of Appeal, Laws LJ rightly paid tribute to the helpful discussion of the cases under article 5(4) by Stanley Burnton J in R (KB) v South London and South and West Region Mental Health Review Tribunal [2004] QB 936, para 32ff, which had also been cited with approval by Lord Woolf CJ, in Anufrijeva v Southwark London Borough Council [2004] QB 1124, para 63. The principal foundation of the reasoning of both Stanley Burnton J and Laws LJ lay in the judgment in Nikolova v Bulgaria (1999) 31 EHRR 64. The facts and the reasoning of the court are set out by Lord Reed (paras 56 57). It is noteworthy that an award was refused, even though the issue between the parties seems to have been one of quantum only. The claim was for US$15,000, which the respondent government described as excessive, relying on an award of US$3,500. The Commissions Delegate invited the court to award an equitable amount (para 75). However, the court refused to make any award, for the reasons given in the passage quoted by Lord Reed. In my view, the courts below were correct to treat this decision of the Grand Chamber (presided over by the President, Judge Wildhaber) as intended to establish an approach of general application in relation to violations of article 5(3) and (4). It is true, as Lord Reed observes (para 62), that the second paragraph of that passage refers to the particular circumstances of the case. However, it is clear from the terms of the judgment as a whole, and from its treatment in later cases, that it was intended to draw a line under discrepancies in the previous jurisprudence, and to provide more consistent guidance for the future. That it followed a full debate within the court, and was regarded at the time as dealing with a controversial issue of principle, is apparent also from the strength of the dissents, notably that of Judge Bonello (joined by Judge Maruste). Of interest also is the partly dissenting opinion of Judge Fischbach (joined by Judges Kuris and Casadevall), which complained that the principle adopted by the majority was such as to restrict in advance the scope for awarding compensation for non pecuniary damage; whereas in their view that issue was one to be determined in the light of the particular facts of each case (para O II5). Judge Greve, also partly dissenting, thought it would be preferable for the court normally to use its discretion to award some equitable satisfaction, the issue then being in each case to settle the amount (para O III6). It is clear that she understood the majority judgment to reject that approach. That understanding of Nikolova was reinforced by my own experience as a participant shortly afterwards in another Grand Chamber decision on the same issue, Caballero v United Kingdom (2000) 30 EHRR 643, in which many of the same judges took part (see my article, cited before us without objection, ECHR Remedies from a Common Law Perspective [2000] ICLQ 517, in which I related that case to the Law Commissions then current review, in which I was directly involved as Chairman of one of the commissions). The judgment in Caballero repeated (in para 30) the substance of the relevant paragraph in Nikolova, but indicated that because of factors special to the instant case (described in para 31) it felt it right in the particular circumstances to make an equitable award of 1,000. That case was in turn distinguished in SBC v United Kingdom (2001) 34 EHRR 619, para 30, where no award was made, on the grounds that, in Caballero, unlike the instant case, the government had in effect accepted that apart from the breach the claimant would have had a good chance of being released on bail prior to his trial (para 31). Another important decision from that period, also highlighted by Stanley Burnton J, is Migon v Poland (Application No 24244/94) (unreported) 25 June 2002. A breach of article 5(4) had been found, arising from the failure to provide the applicant with the documents necessary to give him an adequate basis on which to address the arguments relied on in support of the decisions to prolong his detention (para 86). The Chamber chaired by Sir Nicholas Bratza rejected the claim for damages, following Nikolova, in which it was said: the court stated that just satisfaction can be awarded only in respect of damage resulting from a deprivation of liberty that the applicant would not have suffered if he or she had had the benefit of the procedural guarantees of article 5 of the Convention and concluded, according to the circumstances, that the finding of a violation constituted sufficient just satisfaction in respect of any non pecuniary damage suffered. (para 91) 92. In the present case, the court cannot speculate as to whether the applicant would have been detained if the procedural guarantees of article 5(4) of the Convention had been respected in his case. Consequently, the court considers that the non pecuniary damage claimed is adequately compensated by the finding of a violation of this provision. Faced with a claim of US$300,000 for pecuniary and non pecuniary loss, alleged to arise from loss of family life, destruction of a business, and pain and distress (para 89), the court made no award, since it was not possible to speculate whether the violation of article 5(4) made any difference to the detention. The continuing relevance of the principle or practice established in Nikolova is apparent from the subsequent cases in which it has been cited (one of the more recent being Mitreski v Former Yugoslav Republic of Macedonia (Application No 11621/09) (unreported) 25 March 2010) and the absence of any case in which it has been directly questioned. Mr Southey has sought to rely on some cases where awards have been made in apparent departure from the Nikolova approach. Some are referred to by Lord Reed (para 61). I find these of no real assistance. As I read them, they were decisions on their own facts, and did not purport to reformulate principle. Mr Southey is, however, on stronger ground, when he argues for an exception to the Nikolova principle, applicable to breaches involving delay in proceedings governing release from detention. In support of that distinction he relies on the decision in HL v United Kingdom (2004) 40 EHRR 761, which again is significant because it contains a reasoned discussion of principle. The case has been referred to by Lord Reed (para 60). The court found breaches of both article 5(1) and (4), arising out of the lack of fixed procedural rules governing the detention of a mental patient. The court declined to make an award for non pecuniary loss. The judgment (by a chamber, which included Judge Bratza and other judges who had been parties to Nikolova) dealt at some length with the issue of non pecuniary loss. The court noted that in Nikolova the court had endorsed the principle that just satisfaction under articles 5(3) and (4) could only be awarded in respect of damage from a deprivation of liberty that the applicant would not have suffered apart from the violation. It saw no reason to depart from the position outlined in the Nikolova judgment concerning just satisfaction as regards distress or frustration suffered on account of the absence of adequate procedural guarantees (paras 148 149). However (in the passage quoted by Lord Reed para 60), it distinguished cases in which awards had been made following findings of unreasonable delay in the domestic proceedings determining applications for release from detention. These were seen as consistent with the award of non pecuniary damages following a finding of unreasonable delay under article 6(1). Despite the procedural nature of such a violation, it was accepted that in such cases there could be a causal link between the violation (delay) and the non pecuniary damage claimed. This is another example of the court specifically addressing the principles to be applied to the award of damages under article 5. It is of importance in considering the three cases on which Mr Southey principally relies, which were all cases relating specifically to delay before the Parole Board: Oldham v United Kingdom (2000) 31 EHRR 813; Hirst v United Kingdom (Application No 40787/98) (unreported) 24 July 2001; Blackstock v United Kingdom (2005) 42 EHRR 55. They have all been described by Lord Reed (paras 42, 43, 45), along with a series of other cases less close on their facts to the present. It is right now to add to them another very similar case: Betteridge v United Kingdom (Application No 1497/10) (unreported) 29 January 2013. Laws LJ commented that, against the background of the cases analysed by Stanley Burnton J in KB, these cases could not be treated as constituting any authoritative body of principle (para 20). Taken on their own, I might have been inclined to agree. However HL, which was not referred to by the Court of Appeal, puts a different perspective on the earlier cases. There are other factors which in my view give support to Mr Southeys submission that these cases do exemplify a principle directly relevant to cases of the kind before us: i) The issue of damages for non pecuniary loss under article 5(3) and (4) seems to have been subject to vigorous debate within the court between 2001 and 2002. ii) The three Parole Board cases demonstrated a consistency of approach, expressed in consistent language, over a period of five years to cases of significant delay before the Parole Board. The court was willing to make an award of 1,000 as equitable compensation for non pecuniary loss, regardless of the prospects of earlier release. iii) That approach was maintained both before and after the Migon decision. Judge Bratza, who led the chamber in Migon and was party to the judgment in HL, was also involved in all three decisions. There is no indication that he or the chamber as a whole saw any conflict between them. The natural explanation is that drawn by the court itself in HL. It is also apparent that not every case of delay attracts an award. In Rutten v The Netherlands (Application No 32605/96) (unreported) 24 July 2001), where the court found a breach of article 5(4) because of delays in access to a court for a detained person, the court found that any feeling of frustration engendered by the length of the proceedings was not to the extent of justifying the award of compensation (para 59). As Mr Grodzinski says, it is not easy to work out how long the breach lasted. The claim was for actual loss of liberty for 17 days (para 57), but it appears that the length of proceedings to which the court was referring was several months. Similarly, in Pavletic v Slovakia (Application No 39359/98) (unreported) 22 June 2004, no award was made in respect of a failure to rule on a petition for release from detention for a period of almost a year, that is, from the date of the petition made on 10 January 1996 (para 89) until the applicants release on 26 January 1997 (para 17). The court noted that the period of detention had been deducted from his subsequent sentence and made no separate award for any prejudice which the applicant may have suffered (para 110). It seems therefore that, where there is no finding of actual or possible loss of liberty, questions of degree are relevant, and that there is a threshold of distress below which no award need be made. For these purposes I would concentrate on the cases which are directly related to the present facts, involving failures in the review of detention following conviction. Although the Strasbourg court has declined to lay down a precise measure of acceptable delay, the three cases relied on by Mr Southey seem, as far as one can judge, to have involved unacceptable delays of around a year or more, justifying awards of 1,000. A national court, paying due regard to Strasbourg principles, but also in the interests of certainty and proportionality, may properly take the view that there should be a threshold, defined by a period of excessive delay, in relation to which a breach of article 5(4) may be established, but no monetary award is necessary. Although I would have regarded a threshold of six months as consistent with the Strasbourg jurisprudence, I do not dissent from the guidance proposed by Lord Reed or from his approval of the award in Mr Sturnhams case.

These appeals concern the circumstances in which a prisoner serving a life sentence or an indeterminate sentence of imprisonment for public protection (IPP), who has served the minimum period specified for the purposes of retribution and deterrence (the tariff), and whose further detention is justified only if it is necessary for the protection of the public, should be awarded damages for delay in reviewing the need for further detention following the expiry of the tariff. They are also concerned with the quantum of such damages. Since 1997, legislation has required judges to impose life sentences on a wider range of offenders than was previously the case. In addition, IPPs were introduced in April 2005. It is for the Parole Board of England and Wales (the Board) to decide whether to direct the release of a life or IPP prisoner whose tariff has expired. The prisoners case must first be referred to the Board by the Secretary of State for Justice (the Secretary of State). The increase in the number of life prisoners and the introduction of IPP sentences resulted in an increase in the Boards workload, but its resources were not increased. This resulted in delay in the consideration of post tariff prisoners cases. That delay has implications under the Human Rights Act 1998 (the 1998 Act), which gives effect to Article 5 of the European Convention on Human Rights (the Convention). Article 5(1) requires that detention must throughout its duration remain causally connected to the objectives of the sentencing court. In relation to post tariff prisoners, that objective is the protection of the public. In order to comply with Article 5(4), the Board has to review the necessity for the continued detention of post tariff prisoners speedily upon the expiry of their tariff and at reasonable intervals thereafter. The 1998 Act also provides that the remedies for a violation of a Convention right include damages. Mr Faulkner was sentenced in 2001 to life imprisonment for a second offence involving grievous bodily harm. Mr Sturnham was convicted of manslaughter in 2007 and given an IPP sentence. In each case, there was a delay in the holding of a hearing before the Board after the tariff had expired, due to administrative errors for which the Secretary of State was responsible. Both men were eventually released following Board hearings, but Mr Faulkner was twice recalled to prison in respect of allegations of which he was acquitted, and remains in custody. Each sought judicial review of the failure by the Board and the Secretary of State to conduct a review of his detention speedily, as required by Article 5(4). Mr Faulkner was unsuccessful in the High Court, but the Court of Appeal held that the Secretary of State had breached Article 5(4), that Mr Faulkner would have been released 10 months earlier than he was but for that breach, and that the Secretary of State should therefore pay him 10,000 in damages. In Mr Sturnhams case, the High Court held that there had been a breach of Article 5(4) due to a delay of 6 months, that he had been caused anxiety and distress by the delay, but that there was no prospect that he would have been released any earlier had the hearing taken place speedily. The Secretary of State was ordered to pay him 300, but that award was quashed by the Court of Appeal. In Mr Faulkners case, the Board appeals to the Supreme Court on the ground that the award of damages was excessive. Mr Faulkner cross appeals on the ground that the award was inadequate and that his imprisonment during the period of delay constituted false imprisonment at common law or a violation of Article 5(1). Mr Sturnham seeks permission to appeal against the Court of Appeals decision to quash the award of damages to him. The Supreme Court allows the Boards appeal in Mr Faulkners case, reduces the damages awarded to him to 6,500, and dismisses his cross appeal. The Court grants Mr Sturnham permission to appeal and allows his appeal. Lord Reed gives the lead judgment, with which Lord Neuberger, Lord Mance and Lord Kerr agree. Lord Carnwath delivers a concurring judgment. Mr Faulkners argument that the detention of a life prisoner constitutes false imprisonment if it continues beyond the point at which the prisoner would have been released if a hearing had been held in accordance with Article 5(4) must be rejected. That detention is still authorised by statute, and is therefore lawful until the Board directs release [16, 86]. Nor was Mr Faulkner the victim of a violation of Article 5(1). Such a violation requires exceptional circumstances warranting the conclusion that continued detention has become arbitrary, which were not present in Mr Faulkners case [17 23, 86]. On the question of the award of damages under the 1998 Act, the courts should be guided primarily by the principles applied by the ECtHR, which may be inferred from any clear and consistent practice of that court. The quantum of such awards should broadly reflect the level of awards made by the ECtHR in comparable cases brought by applicants from the UK or other countries with a similar cost of living [39]. The courts should resolve disputed issues of fact in the usual way even if the ECtHR in similar circumstances, due to the nature of its role, would not do so [39, 82]. Where it is established on the balance of probabilities that a violation of Article 5(4) has prolonged the detention of a prisoner past the point at which he would otherwise have been released, damages should ordinarily be awarded. The amount of such damages will be a matter of judgment, reflecting the facts of the case and having regard to guidance from the ECtHR and the national courts in comparable cases [75]. Pecuniary losses should be compensated in full [53, 70]. Though relevant in some circumstances, it will not ordinarily be appropriate to take into account as a mitigating factor that a claimant was recalled to prison following his eventual release [83]. Nor should damages be awarded merely for the loss of a chance of earlier release [82], or adjusted according to the degree of probability of release if the violation of Article 5(4) had not occurred [84]. Appellate courts do not ordinarily interfere with an award of damages simply because they would have awarded a different figure if they had tried the case. However, as the Court is in this case being asked to give guidance on the appropriate level of awards, and having regard to awards made by the ECtHR in other cases and to the fact that the liberty enjoyed by a person released on licence is precarious and conditional, the Court considers that an award of 6500 would adequately compensate Mr Faulkner [87]. Even where it is not established that an earlier hearing would have resulted in earlier release, there is a strong presumption that delay which violated Article 5(4) has caused the prisoner frustration and anxiety. Where such a presumption is not rebutted, an award of damages should be made, though on a modest scale [53, 67 68]. No such award should be made in cases where the frustration and anxiety were insufficiently severe to warrant an award, although that is unlikely to be the case where the delay was of around three months or more [66]. Following that approach, and having regard to ECtHR authorities, the award of 300 to Mr Sturnham was reasonable in his case [97]. Lord Carnwath concurs with the reasoning and conclusions in Lord Reeds judgment, but suggests a more selective approach to ECtHR authorities. He suggests focusing on those cases which explicitly decide points of principle, and eschewing those which are simply assessments of the facts [104 127].

The liability of employers for deaths caused by mesothelioma has pre occupied courts and legislators over recent years. The present appeals concern claims to pass the burden of this liability on to insurers, made either by employers or in the case of insolvent employers by the personal representatives of former employees using the mechanism of the Third Party (Rights against Insurers) Act 1930. The appeals concern employers liability insurance. This is in contrast with Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 where public liability insurance was in issue. Employers liability focuses necessarily upon the relevant employment relationships and activities. Public liability relates to any of the insureds relationships and to activities affecting the world at large. Another feature of employers liability is that, under the Employers Liability (Compulsory Insurance) Act 1969 (the ELCIA), it has since 1 January 1972 been compulsory for every employer other than local authorities carrying on any business in Great Britain to insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain The appeals arise because the relevant insurers maintain that the employers liability insurances which they issued respond (or, better, could only have responded) to mesothelioma which developed (or, possibly, manifested itself) as a disease during the relevant insurance periods all long past. In contrast, the relevant employers and personal representatives maintain that the insurances respond to mesothelioma which develops and manifests itself later; all that is required, they say, is exposure of the victim during the insurance period to asbestos in circumstances where the law attributes responsibility for the mesothelioma to such exposure. These alternative bases of response (or triggers of liability) have been loosely described as an occurrence (or manifestation) basis and an exposure (or causation) basis. It is in issue whether the ELCIA, after it came into force, mandated any particular basis of response. A secondary issue, arising if the insurances only respond on an occurrence basis, is whether the aetiology of mesothelioma justifies a conclusion that there was during the relevant insurance period an occurrence sufficient to trigger liability under the insurances. Burton J, [2008] EWHC 2692 (QB), concluded that the relevant insurances all responded on an exposure basis. The Court of Appeal, [2010] EWCA Civ 1096, by a majority (Rix and Stanley Burnton LJJ), upheld the judge in relation to some of the insurances (particularly those covering disease contracted during the relevant insurance period); but they concluded that others (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. Smith LJ would have upheld the judges judgment in its entirety. The full judgments in both courts repay study. They have been of great assistance to this court and make it possible to go directly to the heart of the issues. Mesothelioma is a hideous disease that is inevitably fatal. In most cases, indeed possibly in all cases, it is caused by the inhalation of asbestos fibres: Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229, para 1, per Lord Phillips. It is a cancer of the pleura, which are thin linings around the lungs and on the inside of the rib cage. It is usually undetectable until shortly before death. Its unusual features include what Burton J in this case at para 30 described as the unknowability and indescribability of its precise pathogenesis. In particular, it is impossible to know whether any particular inhalation of asbestos (at least any occurring more than ten or so years prior to diagnosability) played any or no part in such development. Because of this unusual feature, the law has developed a special rule. The special rule was the product of judicial innovation in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and in Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572. It was modified by statutory intervention in the form of the Compensation Act 2006, section 3. Leaving aside exposures occurring within the ten or so years prior to diagnosability, the rule can now be stated as being that when a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a "material increase in risk" of the victim contracting the disease will be held to be jointly and severally liable in respect of the disease. Burton Js findings in the present case justify certain further propositions, mostly also corresponding with the summary in Lord Phillips judgment in Sienkiewicz (para 19): (i) A significant proportion of those who contract mesothelioma have no record of occupational exposure to asbestos. The likelihood is that (vi) in their case the disease results from inhalation of asbestos dust that is in the environment. There is, however, a possibility that some cases of mesothelioma are "idiopathic", i.e. attributable to an unknown cause other than asbestos. (ii) The more fibres that are inhaled, the greater the risk of contracting mesothelioma. (iii) There is usually a very long period between the exposure to asbestos and the development of the first malignant cell. Typically this can be at least 30 years. (iv) For a lengthy period (perhaps another five years) after the development of the first malignant cell, there remains a possibility of dormancy and reversal, but at a point (Burton J thought a further five years or so before the disease manifested itself, and was thus diagnosable) a process of angiogenesis will occur. This involves the development by malignant cells of their own independent blood supply, so assuring their continuing growth. (v) The mechanism by which asbestos fibres cause mesothelioma is still not fully understood. It is believed that a cell has to go through 6 or 7 genetic mutations before it becomes malignant, and asbestos fibres may have causative effect on each of these. It is also possible that asbestos fibres have a causative effect by inhibiting the activity of natural killer cells that would otherwise destroy a mutating cell before it reaches the stage of becoming malignant. Mesothelioma currently claims about 3000 lives a year in the United Kingdom. This speaks to the common use of asbestos materials up to the 1960s and 1970s. In Annex I to his judgment Rix LJ set out the insuring clauses of the various forms of policy wording in use from time to time. Subject to re ordering to reflect the development of the language, Annex A to this judgment includes the same and some further wording. It can be seen that the Excess policies and the first two MMI policies promise to indemnify the insured employer against liability if at any time during the period of insurance (or of any renewal) any employee shall sustain under the earlier policies personal injury by accident or disease or under the later policies [any] bodily injury or disease in the case of the first Excess policy while engaged in the service of the Employer or in other cases arising out of and in the course of [his] employment by the insured employer. In the case of the Independent policy, the insurer, under the recital, promised to indemnify the employer during the period of insurance or of any renewal. The insuring clause itself contains no express limitation to any period. It promises indemnity against all sums for which the employer shall be liable for damages for such injury or disease if any employee shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule. The third MMI policy and the BAI policies were in more developed form. The former promises indemnity in respect of legal liability for sums payable as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any employee when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The latter promised indemnity against all sums which the Insured may become liable to pay to any Employee . in respect of any claim for injury sustained or disease contracted by such Employee during the period of insurance or any renewal. The insurers party to the present appeals have at all times represented only a small part of the employers liability insurance market. By far the larger part of the market consists of companies who until the late 1960s (when competition rules intervened) operated a tariff system which bound them to adopt a specified policy form and specified rates. Until 1948 tariff insurance was focused on Workmens Compensation Act claims, but in 1948 legislative changes (in particular the abolition by the Law Reform (Personal Injuries) Act 1948 of the doctrine of common employment) made a common law claim for future accruing causes of action much more attractive. It may well have been in anticipation of these changes that the tariff companies introduced a new form of policy in May 1948, still in widespread use today, providing indemnity if any employee shall sustain any personal injury by accident or disease caused during the period of insurance. Under this tariff wording, sustain looks to the occurrence of an accident or development of a disease at any time, while caused makes clear that the trigger to cover is that the accident or disease has been caused during the insurance period. The present insurers were non tariff companies, and have always been free to set their own wordings. From dates after the insurances the subject of this appeal, three of the insurers in fact ceased to use the wordings set out in Annex A, and themselves moved expressly to causation based wordings Excess in about 1976, Independent in the mid 1980s, and BAI in 1983. As a matter of insurance practice, however, until the decision in Bolton in 2006, all these wordings, whether tariff or non tariff and whether using the language caused, sustain or sustained or contracted, paid out on long tail claims (including the mesothelioma claims which became increasingly frequent in the 1980s) by reference to the date(s) of exposure. Where successive employers with different insurers had exposed a particular employee victim to asbestos, liability was in practice apportioned between the employers, and so insurers, broadly according to the extent of exposure for which each employer was responsible. The rival cases Insurers submit that all the wordings in Annex A require the injury or disease to occur during the period of insurance or of any renewal. In the alternative, if the use of the word contracted in the third MMI policy and the BAI policies or the different formulation of the Independent policy leads to any different conclusion in any of such cases, they submit that this leaves unaffected the clear meaning of the Excess and first two MMI policy wordings. The employers and interested employees contend that all these policies are to be understood as operating on an exposure or causation basis. The implications of these alternative interpretations are clear. On insurers primary contention, the policies set out in Annex A would not respond to current mesothelioma claims. It is unlikely that most of them would have responded to many, if any, mesothelioma claims, since it was only in the 1980s that such claims began to emerge to any great extent. Policies written on a causation basis since the dates indicated in paragraph 10 above would also not respond to current mesothelioma claims. Insurers response is that any insurance must be read according to its terms. Until 1 January 1972, when the ELCIA came into force, it was not obligatory for employers to have any form of employers liability insurance. Further, viewed on an occurrence or manifestation basis, the policies would pick up long tail claims arising from exposure occurring at any time in the past. In this connection, it is to be noted that various long tail diseases were well recognised perils from the era of Workmens Compensation legislation before 1948. Instances were scrotal cancer, pneumoconiosis and more specifically (from the time of Merewether and Prices 1930 Report on Effects of Asbestos Dust on the Lungs and Dust Suppression in the Asbestos Industry) asbestosis. All these would only develop over and could manifest themselves after considerable periods of years. Following upon the 1930 report, The Asbestos Industry Regulations 1931 (SI 1931/1140) were introduced to regulate factories handling and processing raw fibre, and in 1969 The Asbestos Regulations 1969 (SI 1969/690) extended this regulation more widely it appears in the light of an appreciation that mesothelioma could result from exposure to small quantities of asbestos dust (see In re T & N Ltd (No 3) [2006] EWHC 1447 (Ch), [2007] 1 All ER 851, para 118). The Court of Appeals conclusions The force of insurers case rests in the use of the word sustain, whether in connection with the phrase personal injury by accident or disease or bodily injury or disease or in the conjunction injury or disease . sustained or contracted or injury sustained or disease contracted. Rix and Stanley Burnton LJJ concluded that the word sustain looked prima facie at the experience of the suffering employee rather than its cause (paras 232 and 343). Insurances responding to injury or disease sustained during the insurance period would not, on this basis, cover mesothelioma sustained long afterwards. Rix LJ had some compunction about the result because of what he (though not Stanley Burnton LJ) felt was a tension with the commercial purpose of employers liability insurance in the extraordinary context of mesothelioma (para 235). Rix LJ would have liked to hold that mesothelioma sufferers sustained sufficient injury on exposure to asbestos to trigger the insurances in force at the date of such exposure, but felt bound by Bolton to conclude the contrary (paras 277 289). However, Rix LJ, though not Stanley Burnton LJ, considered that the particular wording of the Independent insurances did not explicitly require the injury or disease to be sustained during the insurance period, and could be read as covering the sustaining of injury at any time arising out of and in the course of employment during the insurance period (paras 300 and 350). Rix and Stanley Burnton LJJ differed as to the significance of the ELCIA extension provisions included in the Independent wording, the third MMI wording and the second BAI wording, as quoted in Annex A. Rix LJ thought that the ELCIA required employers to insure on a causation basis (paras 184 and 186) although, since he also expressed the view that an insurance arranged and maintained on a sustained basis could comply with the ELCIA, he may perhaps only have meant required in practice. At all events, he held that the ELCIA extension provisions covered liability incurred to the personal representatives of employees on a causation basis, while enabling insurers to recoup themselves so far as possible from the relevant employers in respect of liability they would not otherwise have had to meet (paras 292, 300 and 302). Stanley Burnton LJ did not agree that the ELCIA required causation wording (para 342), but considered that it required insurance to be taken out and maintained in respect of ex employees, or at least those who were or had been employed at any time after the coming into force of ELCIA (para 342; and see Rix LJs comments at paras 305 307). Rix, Smith and Stanley Burnton LJJ were all agreed that, where provision was made for disease contracted, this could and should be construed as introducing cover on a causation basis, even if or though wording such as injury (or disease) sustained could only respond on an occurrence basis. Analysis Annex A sets out the insuring clauses. Insurers case is, as I have said, rooted most strongly in the word sustain, particularly when it is used by itself, rather than in conjunction with a more ambivalent alternative in the phrase sustained or contracted. The natural meaning of the word sustain, taken in isolation and as defined in the Shorter Oxford English Dictionary from an appropriate date (1965, 3rd ed), is, with respect to injury, undergo, experience, have to submit to, or, possibly, to have inflicted upon one, suffer the infliction of. But the insurance cover granted (and no doubt required) extended expressly beyond injury by accident to embrace disease. This was achieved by less natural conjunctions, such as sustain [any] personal injury by accident or disease or sustain [any] bodily injury or disease. Conscious perhaps that the verb sustain does not fit naturally with the concept of disease, some companies (MMI in its third wording and BAI in its first and second wordings) introduced the different verb contracted in the formulations sustained or contracted or injury sustained or disease contracted. This use of contracted with respect to disease is considerably more natural, but is clearly open to an interpretation that it looks back to the initiating or causative factor of the disease, and (whatever the answer on that point) highlights a question whether any substantial difference exists in this connection between such wordings and other wordings referring more awkwardly to the sustaining of personal injury by disease or the sustaining simply of disease. To resolve these questions it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more broadly. As Lord Mustill observed in Charter Reinsurance Co Ltd v Fagan [1977] AC 313, 384, all such words must be set in the landscape of the instrument as a whole and, at p 381, any instinctive response to their meaning must be verified by studying the other terms of the contract, placed in the context of the factual and commercial background of the transaction. The present case has given rise to considerable argument about what constitutes and is admissible as part of the commercial background to the insurances, which may shape their meaning. But in my opinion, considerable insight into the scope, purpose and proper interpretation of each of these insurances is to be gained from a study of its language, read in its entirety. So, for the moment, I concentrate on the assistance to be gained in that connection. A first point, made very clearly below by Rix LJ (para 263), is that the wordings on their face require the course of employment to be contemporaneous with the sustaining of injury. This leaves open what is meant either by sustaining or by injury. Rix LJ thought that the Independent wording could be understood differently in effect, as if it had expressly read: If any person who is under a contract of service or apprenticeship with the Insured shall at any time sustain bodily injury or disease arising out of and in the course of his employment by the Insured during the policy period in connection with the Contract specified or type of work described in the Schedule . That interpretation assumes that sustain in this context equates with the occurrence, rather than causation, of the injury or disease, and only arises for consideration if that assumption is correct. A second point is that the insurance wordings demonstrate a close link between the actual employment undertaken during each insurance period and the premium agreed to be payable for the risks undertaken by insurers in respect of that period. Premium is linked expressly to actual wages, salaries and earnings during the insurance period under the Excess policies, the first MMI wording and the BAI policies. The second and third MMI wordings contemplate that premium may be linked to wages, salaries and earnings, and, to the extent that any inference regarding the general nature and scope of cover under these standard wordings can be drawn from such a link, it must be capable of being drawn whether or not premium was actually so linked in any particular case. As to the Contractors Combined Policy issued by the Independent, it is a probable inference that the estimates which were provided and were to be updated will have included, in respect of the employers liability cover in section 1, wages, salaries and other earnings paid. Finally, the Independent cover is linked to the actual contract or work which the employer is undertaking during the insurance period. These links are in my view significant. True, premium may sometimes be calculated on a rough and ready basis. Minor discrepancies between the premium calculation and the risk may be understandable: see e.g. Ellerbeck Collieries, Ld v Cornhill Insurance Co [1932] 1 KB 401, 418, per Greer LJ (who pointed out that any such discrepancy there was more apparent than real, since workmen not earning wages because off work would not actually be at risk of any fresh accident, even though they would remain susceptible to certification for disablement). Here the position is quite different. Great care is taken in all the policies to tie premium to the actual employment undertaken during the insurance period, and in the case of the Excess, Independent and MMI policies to tie cover to a business, contract or activities described in the schedule. The natural expectation is that premium is measured by reference to actual employment or work during the insurance period because it is the risks attaching to such employment or work which are being undertaken by insurers. At the very least, the drawing of this link makes improbable the contention advanced by some of the insurers that the present insurances were apt to pick up liabilities emerging during the insurance period which could be attributable to employment and activities undertaken and negligent conduct committed at times long past. The number of employees, their employment activities and the risks involved at those times could be very different. The significance which attaches to the employment current during the insurance period is underlined by legal and practitioner texts. As long ago as 1912, MacGillivray on Insurance (1st ed), pp 966 wrote: The nature and scope of the employers business must be clearly defined in the insurance policy, and workmen employed outside the scope of the assureds business as described in the policy will not be covered In the section on Employers Liability Insurance in Stone & Coxs Accident, Fire and Marine Year Book (1957), pp 688 689, the authors stressed the importance of identifying any special hazards, such as signs of careless management or lack of control or careless workmen, and observed: The surveying of Employers Liability risks has probably become more general than formerly. Apart from the question of the possibilities of accident, there is now the serious question of disability due to disease and in particular the disease known as pneumoconiosis. In 1974 MMI produced a Guide to Insurance Officers in Local Government, which it said that it would like to see on the desk of every insurance officer for ready reference at any time; this, after noting that employers liability was almost invariably dealt with by a separate policy and that its importance had been increased by the ELCIA, went on: "7. Premiums are usually based on wages and salaries this is not only a convenient yardstick but is logical since loss of earnings usually represents a substantial part of claims. Rates of premiums vary according to the nature of the work of the labour force, and the claims experience. 8. A feature of employers liability claims is the length of time which often elapses between the date of the accident and the final settlement, and the cost of servicing claims tends to be high. Injury caused at work during the period of insurance even though it may not be diagnosed till years afterwards can be a liability under the policy." I note in parenthesis that 1974 was the year in which MMI changed from a pure sustain form of wording to a form covering bodily injury or disease suffered, when sustained or contracted during the currency of the policy. Yet there is no suggestion in the Guide of any change in substance. It is in this light improbable that the present insurances can or should be read as offering cover in respect of ancient, as opposed to current, employment and activities. But there is a third point. If insurances in the present form only address risks arising from employment during the insurance period, then, on insurers case, there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to injury or disease in another later period. If the employment relationship spans both insurance periods and the employer remains insured with the same insurers in both periods, there may be no problem. The employee is employed at all relevant times and the insurance may be viewed as a single continuing contract. The policy wordings set out in Annex A, with their references to insurance during the period of insurance or during any subsequent renewal period, would support the latter view. But, even in the days of more stable long term employment and insurance relationships, employees could and would move employment or retire, or employers would cease business, or change insurers. On the basis that the insurances only cover risks arising from employment during the insurance period, there would be no cover unless the liability arose from and in the course of and involved injury or disease during the currency of the same employment and the same insurance (including any renewal). Fourthly, on insurers case, employers would as a result be vulnerable to any decision by insurers not to renew; and such a decision might arise from the simple performance by employers of their common law duty to disclose past negligence to insurers upon any renewal. Employers who discovered or came to appreciate that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease (e.g. by exposing their employees to asbestos) would have such a duty. Insurers could then, on their own case, simply refuse any renewal or further cover. Employers could then have to disclose that refusal also to any further insurers to whom they made a proposal for cover. One response made by insurers to such problems is that they would not arise in the large bulk of cases. That is no doubt true. Most employers liability cases involve short tail claims: typically, an accident involving injury. It is not surprising if the language of the insurances fits more easily with situations in which cause and effect coincide in time. But, by the same token, this does not mean that the underlying risk being assumed was in either partys mind limited to circumstances in which a cause gave rise to an effect during one and the same insurance period. Rix LJ, in accepting that cover depended upon injury being sustained in the sense of experienced during the insurance period, was influenced by the thought that this was not an absurd or meaningless interpretation. The insurance could operate entirely successfully in some 99% of cases (para 235). In the light of this Courts recent decision in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 30, this, in my view, gives too little weight to the implications of the rival interpretations and to the principle that where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense. The 1% of cases in which there might be no cover could not be regarded as insignificant. Well before 1948, there was general awareness of the existence of long tail diseases which would only develop and manifest themselves after considerable periods of years (see para 12 above; and see also Cartledge v E Jopling & Sons Ltd [1963] AC 758). The connection between asbestos exposure and mesothelioma became generally known in the mid 1960s, following the publication in 1965 of Newhouse and Thompsons report on Mesothelioma of pleura and peritoneum following exposure to asbestos in the London area and a Sunday Times article. Yet on insurers case, the present insurances would not cover any situation where, after the termination of employment or the expiry of an insurance, injury or disease developed from an employers breach of duty to a relevant employee during an insurance period. A fifth point concerns the way in which the policies deal with the issue of extra territorial scope. The first Excess wording stands apart from the others in its treatment of that issue. Cover only exists in respect of any employee in the employers service who shall sustain any personal injury by accident or disease while engaged in the service of the employer in Great Britain, Northern Ireland, the Isle of Man or Channel Islands, in work forming part of the process in the employers business. As soon as one postulates a delay in time between the causation and experiencing of a disease, it becomes apparent that this wording could operate to very curious effect if sustain looks to the latter rather than the former. A disease (e.g. a cancer) experienced during employment could be covered although caused by pre employment exposure, while a disease caused by employment would not be covered if only experienced while working abroad. The natural inference to draw from the references to being engaged in the employers service and in work forming part of the employers business process is that it was envisaged that the accident or disease would and should arise out of such service and work, rather than merely occur during it. That points to an underlying focus on causation, even if the assumption was that in the majority of cases causation and experiencing of any injury by accident or disease would coincide. As to the other policies, at the very least, the way they deal with territorial issues throws doubt on any proposition that their wordings are so carefully or well chosen that a court should be careful to stick literally to whatever might be perceived as their natural meaning. They address territorial scope by specific exclusions, but the cover and the exclusions use different language. Thus, although the second and third Excess wordings cover liability to employees who sustain personal injury by accident or disease, the territorial exclusion is in respect only of accidents occurring outside Great Britain, etc, leaving it unclear how disease, whether caused or developing outside Great Britain, should be dealt with. The Independent wording also covers liability to employees who sustain bodily injury or disease, while the territorial exclusion is for injury, illness, loss or damage caused elsewhere than in Great Britain, etc. While the contrast in language is capable of lending some support to a view that sustain looks to experiencing, rather than to causation, an alternative possibility is that the two words were understood as having the same effect and that the cover was understood as focused on causation. The language of this exclusion thus cuts both ways, as Rix LJ recognised (para 297). A similar position applies to the contrast between injury or disease sustained and injury or disease caused outside Great Britain, etc. under the first two MMI wordings. Under the third wording, the language of the cover and the exclusion have been deliberately matched. Under the BAI wordings, however, there is an incongruity between cover for injury sustained or disease contracted and the exclusion in respect of liability for accidents . arising outside the United Kingdom. Again, this leaves the position in respect of disease unclear, and the difference between injury sustained and accidents arising can be read either as deliberate or as suggesting that no significance was attached to the difference or that the real concern was with causation. The history and Workmens Compensation Acts Much attention was, both below and before the Supreme Court, paid to the development of employees rights to compensation in respect of personal injury and disease, at common law and under the scheme of the Workmens Compensation Acts (WCAs). The WCAs were in force from 1897 until replaced in 1948 under the National Insurance (Industrial Injuries) Act 1946. The history and a number of the decisions under the WCAs were examined by Rix LJ in paras 126 to 165 of his judgment. He concluded that such an examination yields in the present context not a lot. To a considerable extent, I agree and I shall not repeat the whole exercise, but identify some potentially relevant aspects. Etymologically, some of the language presently in issue can be traced back to statutory language found in the Employers Liability Act 1880 and the WCA 1897. The 1880 Act modified the common law doctrine of common employment, by entitling employees to recover common law compensation for injury caused by specified matters for which employers were responsible, provided that they gave notice, within six weeks of sustaining the injury of its cause and the date at which it was sustained. The 1897 Act, applying to personal injury by accident arising out of and in the course of employment, also required notice to be given of the accident as soon as it occurred, stating the cause of the injury and the date at which it was sustained. These Acts therefore distinguished the causation and the sustaining of an injury, but not in any presently relevant context. Further, any reference to sustaining disappeared from the Workmens Compensation scheme in the 1906 Act, which amended the scheme to require a notice stating the cause of the injury and the date at which the accident happened. The 1906 WCA also expressly extended the scheme to cover certain diseases specified in section 8. In that context, it provided that, where a workman was certified as disabled or suspended from employment or died due to a disease and the disease is due to the nature of any employment in which the workman was employed at any time within the twelve months previous the date of the disablement or suspension, whether under one or more employers, then he or his dependants shall be entitled to compensation under this Act as if the disease or such suspension . were a personal injury by accident arising out of and in the course of that employment . Section 8(a) provided: The disablement or suspension shall be treated as the happening of the accident. Under section 8(c), the compensation was recoverable from the employer last employing the employee within the previous twelve months, providing the employee furnished that employer with particulars of all his other employers in the employment to the nature of which the disease was due. It was not necessary to prove that the disease actually arose from the last employment, merely to prove that the relevant employment gave rise to a risk of such a disease: Blatchford v Staddon and Founds [1927] AC 461. The 1906 Act may be regarded in this respect as involving an early statutory instance of the kind of liability recognised in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. However, failing such particulars, the last employer could excuse himself upon proving that the disease was not contracted whilst the workman was in his employment (section 8(c)(i)). The last employer might also join any other employer (within the last twelve months) and it was provided that upon proof that the disease was in fact contracted whilst the workman was in the employment of that other employer, that other employer shall be the employer from whom the compensation is to be recoverable (section 8(c)(ii)). Finally, section 8(c)(iii) provided that: if the disease is of such a nature as to be contracted by a gradual process, any other employer within the last twelve months was liable to make such contributions as might be agreed or determined by arbitration under the Act. Under this scheme, therefore, compensation for disease was initially based upon the nature of the employment and its potential for causing, rather than upon proof that it caused, such a disease. The paternal benevolence of the Legislature (as Visc Sumner put it in Blatchford: p 469) is well known, and if the price of that benevolence is paid by the last employer, who thus has to bear others burdens, that is nothing new in this kind of legislation. However, the last relevant employer could seek, in specified circumstances, to avoid or to pass on to another employer responsibility by proof that the disease was not actually contracted in his employment. Alternatively, in the case of a disease of such a nature as to be contracted by a gradual process, all relevant employers within the last twelve months would be liable to contribute. The scheme was, as I see it, concerned with either the risk of or actual causation, and in its use of the word contracted it appears to me to have been directing attention to the causation, rather than the mere experiencing or manifestation, of disease. The WCA scheme was the subject of further amendment by the 1925 Act. Section 43 superseded section 8 of the 1906 Act as regards scheduled diseases, while section 47 made specific provision for the introduction of a parallel scheme covering silicosis. Effect was given to this by inter alia the Metal Grinding Industries (Silicosis) Scheme which came into force in July 1927, making provision for obtaining compensation from the last employer within the previous three years, and giving such employer rights to look to other such employers within the last five years. An insurance covering employers liability in this connection was considered in Smith & Son v Eagle Star (1933) 47 Ll. L.R. 88, (1934) 48 Ll. L.R. 67. Mr Hill had been employed in processes giving rise to silicosis for some 20 years. For the last two of these years, from 31 March 1928 to 16 June 1930, he worked for Smith & Son. From 30 June 1927 to 17 June 1930, Smith & Son had an insurance against WCA liability in respect of any personal injury or disease which at any time during the continuance of this policy shall be sustained or contracted by any workmen . The policy was expressly extended to cover any liability in connection with any claim made by employees in respect of silicosis, and the decision of the Court of Appeal rested on this ground. But Scrutton LJ also examined the main policy language, and in particular what was meant by contracted. He noted that there has been a good deal of discussion in the Courts about a disease which is gradually contracted commencing at some stage and through the process going on increasing the disease until at last it results in total disablement (p 70), and concluded that the word was not to be read as first contracted, but in the sense of influenced or increased until it ultimately comes to total disablement. This, although not directly focusing on the first development of a disease from some earlier cause, suggests a flexible view of the word contracted, directed once again to the employments responsible for causing the disease. Confirmation that this was Scrutton LJs view can be found in the earlier case of Ellerbeck Collieries Ltd v Cornhill Insurance Co [1932] 1 KB 401. Two workmen who had been in the colliery companys service for many years were on respectively 11 and 12 March 1929 (dates they were actually off work) certified as suffering from miners nystagmus. The Cornhill had on 8 March 1929 issued the colliery company with a three month provisional cover note insuring in terms matching the wording of the insuring clause in the first Excess wording (i.e. against liability in respect of any employee who shall sustain any personal injury by accident or disease while engaged in the service of the employer). Failing a satisfactory survey, the cover note actually expired on 18 March 1929. The first point decided was whether the employees had sustained personal injury by accident or disease during the period of validity of the cover note (8 to 18 March 1929). It was held that they did. The judgments in the Court of Appeal are of interest for a number of reasons. First, both Scrutton LJ (p 408) and Greer LJ (p 417) approached the question of construction on the basis that the policy was intended to protect the employers against their liability to their workmen under the WCAs. Scrutton LJ added that it seems to me that the policy was intended to cover the liability of the employers for the results of industrial diseases caused by the employment (p 409). His description of the policy, covering in terms any employee sustaining personal injury by accident or disease in service, as intended to cover liability . for the results of diseases caused by the employment fits precisely with the analysis which I consider correct (paragraphs 18 28 above). Second, Scrutton LJ went on to refer to the difficulties in saying when an industrial disease, such as miners nystagmus or lead poisoning, begins, and in these circumstances the difficulty for an employee to pick the proper employer to sue. He described the way in which Parliament, by what became section 43 of the WCA 1925, had addressed such difficulties by providing a conventional and artificial means for enabling the workman to get compensation, leaving the various employers to fight out their proportion of the liability between themselves (p 409). He said that the last employer, liable under the WCA scheme, then claims on the insurance company on the ground that he is liable to make compensation for an injury by disease, and the date of the injury or disablement is by statute and certificate fixed as happening between the dates for which he is provisionally covered (p 411). On this basis, and in the light of the House of Lords decision in Blatchford, Scrutton LJ concluded that he was bound to hold that an accident has happened within the period of the provisional cover against the consequences of which the insurance company is bound to indemnify the employer (p 413). In short, the conventional and artificial provisions of the WCA defined what constituted an accident and when personal injury by accident or disease was sustained for the purposes of the insurance. Greer LJ, more shortly, adopted the same approach (p 418). Only Slesser LJ (p 421) expressed a reservation about the possibility that the artificial deeming provisions of section 43(a) of the WCA 1925 might only apply as between employee and employer, and that it might have been necessary to consider separately the date of the sustaining of injury as between the employer and the insurer, had there been any admissible evidence that the two employees had actually contracted the scheduled disease before the granting of the statutory medical certificate. Commercial purpose and practice Much general evidence was directed or elicited before Burton J in relation to the commercial purpose of the present insurances, and to practice relating to their operation in the years before the present issue arose. It was argued that there was, prior to the decision in Bolton, a universal usage of the insurance industry to pay out mesothelioma or similar claims under [employers liability] policies by reference to the date of inhalation/exposure whatever the wording, or an estoppel by convention to like effect. Burton J rejected the argument (paras 180 to 201, esp. para 201), for the reasons that, first, there was no evidence relating to years earlier than the 1980s which could be put down to any kind of arguable usage, second, any usage was not certain, not least because of the multiplicity of approaches to or bases for it and, third, it was not binding. It was not incorporated into the insurance contracts. No issue of estoppel by convention was pursued to the Court of Appeal (Rix LJ, para 24, and Stanley Burnton LJ, paras 332 and 335) and the issue of a universal custom was only pursued by Zurich Insurance Company (Rix LJ, para 24). By a multiplicity of approaches to or bases for insurers practice, Burton J was referring to evidence that insurers followed the practice they did in some cases because they believed that their contracts were to be interpreted on a causation/exposure basis, in others because they believed that the aetiology of diseases such as mesothelioma was such that injury was in fact sustained (in the sense of experienced) at the date of inhalation, while yet others may have failed to realise that their historically relevant wordings had been on a different basis to the causation wordings to which they had since switched or may have failed to address their minds to any relevant issue at all in relation to an insured who was usually a longstanding repeat client. Rix LJ (para 228) contented himself with agreeing with Burton Js reasoning on this aspect, while Stanley Burnton LJ noted and agreed in particular with Burton Js second reason, relating to the believed aetiology of mesothelioma (para 335). Smith LJ, on the other hand, treated the commonly held understanding that diseases such as mesothelioma involved injury at the date of inhalation as part of the factual matrix of all the insurance contracts (paras 322 323), and considered against that background that no difference in meaning should be held to exist between policies using sustained and causation wording, until the time when the two sides of the insurance industry should be considered to have appreciated that some diseases, including mesothelioma, do not occur until many years after exposure to the causative agent (para 327). She put that as around the time of the decision in Bolton, after which parties using a sustained wording must be taken to have meant only to cover injuries actually occurring during the policy period (para 327). The argument of a binding usage was not pursued before the Supreme Court, rightly so for the reasons given by the judge and the majority in the Court of Appeal. Equally, there has been no suggestion of estoppel by convention, along the lines recognised as possible in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 47. However, on the issues of policy interpretation, Mr Stuart Smith QC for Zurich Insurance, maintained before the Supreme Court an argument that there was a consensus based on market practice, whereby, for one reason or another, such policies would respond to long tail diseases by reference to the date of exposure, and that this could constitute relevant background to their construction. Assuming that, short of a binding usage or estoppel by convention, a practice, if known to or shared by the relevant parties, could in some circumstances be relevant background (see e.g. Reardon Smith Line Ltd v Yngvar Hansen Tangen [1976] 1 WLR 989), still, in my opinion the argument fails in the present case. It fails in particular in the light of the judges findings, even in relation to policies made in and after the 1980s. A practice based on a mistaken understanding, by only some insurers, that the policies operated on a causation basis cannot be relevant background to the interpretation of every policy; on the judges findings other insurers do not appear to have understood that the policies operated on that basis. A practice based on a mistaken understanding by others in the market as to when long tail diseases could be said to have been experienced or to involve injury is likewise an unpromising start for construing all policies; if the understanding were good, it would mean that such diseases fell within the policies, even though the policy cover was restricted to injury or disease experienced during the policy period. The understanding would not therefore carry any imperative to read a sustained wording as meaning caused. Before the Supreme Court, both employers and employees continued to rely upon the evidence given at trial regarding the general purpose of employers liability insurance as part of the background to the interpretation of the present insurances. Rix LJ (paras 223 to 235) gave it some weight as such, but Stanley Burnton LJ thought that there was little if any assistance to be gained by reference to the commercial purpose of EL insurance, as this was simply to provide the cover defined in the policy (para 333). The Supreme Court was provided with a useful summary of the considerable volume of evidence relied upon in this connection. It consisted in general of answers given by insurers, two at least of them with experience going back to the 1940s. They were asked (frequently in response to leading though not inadmissible on that score questions in cross examination) about their or others views, understandings or perceptions as to the purpose of the policies, and the way in which these would or should respond, in relation to injuries arising from exposure in the course of activities during the policy period. In my judgment, Stanley Burnton LJ was right to reject such evidence as inadmissible. The parties cannot be asked what they meant by their contract, and, failing any binding usage, it is equally inadmissible to ask other persons operating in the market to give general evidence as to what they would have understood the parties to have meant by the words used in the context in which they were used. The evidence does not seem to have amounted to more than that. However, I do not agree with Stanley Burnton LJs suggestion that no useful conclusions can be drawn about the commercial purpose of the policies, save that it was to provide the defined cover. In my opinion, relevant conclusions about the general nature and purpose of the individual policies can be drawn in this case, just as they could in the case of the different (and wordier) instrument in issue in In re Sigma Finance Corporation [2009] UKSC 2, [2012] 1 All ER 571 (see especially paras 10, 12 and 37). They can be drawn from an overall consideration of the individual insurance wordings, and particularly from the features which tie cover to the employees and activities during the relevant policy period and the five points considered in paragraphs 18 to 28 above. Further, if the policies are on any view apt to cover employers liability for long tail diseases which initiate during, but only manifest themselves years after, the original policy period, one may look with scepticism at an interpretation which distinguishes this situation from other situations where a long tail disease is caused but does not strictly begin during the policy period, and only manifests itself years later. This is particularly so if a conclusion that the latter diseases fell outside the policy cover meant that they would or might well not fall within any subsequent employers liability policy. ELCIA 1969 Section 1 of the ELCIA provides: 1. (1) Except as otherwise provided by this Act, every employer carrying on any business in Great Britain shall insure, and maintain insurance, under one or more approved policies with an authorised insurer or insurers against liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment in Great Britain in that business, but except in so far as regulations otherwise provide not including injury or disease suffered or contracted outside Great Britain (3) For the purposes of this Act (a) approved policy means a policy of insurance not subject to any conditions or exceptions prohibited for those purposes by regulations. 4. (1) Provision may be made by regulations for securing that certificates of insurance in such form and containing such particulars as may be prescribed by the regulations, are issued by insurers to employers entering into contracts of insurance in accordance with the requirements of this Act . (2) . the employer shall during the currency of the insurance and such further period (if any) as may be provided by regulations (a) comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees; . The only conditions or exceptions ever prohibited were certain exemptions from liability. Under section 3, the ELCIA did not however apply to local authority employers, such as most of MMIs insureds. Under section 4, provision might be made for certificates of insurance to be issued to employers, and in that event the employer was, obliged during the currency of the insurance and such further period (if any) as may be provided by regulations to comply with any regulations requiring him to display copies of the certificate of insurance for the information of his employees. In reaching his conclusions on the ELCIA (para 16 above), Rix LJ engaged in an impressive analysis, to which I would refer (paras 166 to 186). The only doubt this leaves is how, if the ELCIA requires a causation wording, an employer could properly insure on a wording which only covered injury sustained in the sense of experienced (see para 186 and paragraph 16 above). The scope of the ELCIA is, as Rix LJ indicated, open to three alternative analyses: that it requires cover in respect of (i) all future liability incurred during the insurance period, whenever the negligence or injury, or (ii) liability for all future injury or disease sustained (in the sense of experienced) by employees during the insurance period, whenever the negligence, or (iii) liability for all negligence or breach of statutory duty during the insurance period giving rise to liability as in (ii). The retrospectivity of cover involved in (i) and (ii) is unlikely to have been intended. The only one of the three possibilities not involving a degree of retrospectivity is (iii). A duty on every employer to insure, and maintain, insurance is consistent with a requirement to have the insurance in place during, though to maintain it after, the relevant insurance period. The provision, contemplated by section 4, for copies of insurance certificates to be issued by insurers and to be displayed by any employer for the information of his employees during the currency of the insurance and such further period as may be provided by regulations indicates, first, a desire to assure employees of their insurance protection during the relevant insurance period, and, secondly, an awareness that this assurance might need to remain in place after such insurance period; it is therefore suggestive of (iii), rather than (i) or (ii). As Rix LJ observed, it is only cover in accordance with (iii) that can give an employee the assurance that any injury or disease suffered as an employee and arising out of and in the course of [his] employment will be covered by insurance, the benefit of which would, if necessary, be available to him at the time under the Third Party (Rights against Insurers) Act 1930. An obligation to have a policy in force only at or by the time when injury is actually experienced would leave employees or ex employees at the mercy of compliance with the statute by their employers or ex employers at uncertain future dates. It would also leave such employees or ex employees at the mercy of employers who, for whatever reason, ceased to carry on business either in Great Britain or (for example due to insolvency) at all. Further, if injury or disease suffered or contracted bears the same meaning as insurers suggest that injury or disease sustained or contracted bears, then an employee, who had the misfortune to succumb to a disease abroad caused by his employment or previous employment in Great Britain, would not be covered (unless regulations intervened to ensure that he was). Stanley Burnton LJ thought that any issue as to the nature of the insurance required under ELCIA was resolved by its use of the word sustained, rather than caused. He went on to conclude that the ELCIA covered any injury sustained (in the sense of experienced) during a period of insurance, by anyone who was then or had at any previous time been an employee. However, that latter conclusion introduces a retrospectivity into the scope of the ELCIA, which, as already indicated, I think unlikely to have been intended. The statute could have used the tariff wording of causation instead of sustained. But in the statutory language the word sustained is not coupled with a phrase such as during the period of the insurance. Even if sustained means experienced in the context of the statute, the statute may require insurance on what is effectively a causation basis; the words sustained by his employees may well mean sustained at any future time by his current employees. The key to the meaning of the statutory language seems to me the combination of the phrases arising out of and in the course of their employment in Great Britain and not including injury or disease suffered or contracted outside Great Britain. Together, and for reasons given in the last two paragraphs, they indicate a statutory requirement to insure in respect of activities during the course of employment in Great Britain which may in the future give rise in or out of Great Britain to liability to the employees involved in such activities. In my judgment, therefore, the conclusion which gives proper effect to the protective purpose of the legislation is that the ELCIA requires insurance on a causation basis. The ELCIA extension provision to the Independent and second BAI wordings (see Annex A), as well as a similar extension provision to the MMI policy intended for insureds who were not local authorities, achieved this result expressly in relation to policies written subsequent to the coming into force of the ELCIA, at least for the purpose of ensuring that employees claims were covered by insurance. Any other subsequent insurances not containing that extension provision should, if possible, be read as providing the relevant employers cover required by statute. This is a powerful tool in the interpretation of such insurances. Bolton M.B.C. v Municipal Mutual Insurance Ltd The Court of Appeal in the present case was bound by its previous decision in Bolton MBC v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50, [2006] 1 WLR 1492 on public liability policies. The majority regarded that case as, in effect, determining the meaning which must be put on the word sustained in the present employers liability policies: see paras 284, per Rix LJ, and 339, per Stanley Burnton LJ, who however also found the logic of Longmore LJs judgment convincing in relation to the latter type of policies. Smith LJ on the other hand considered that public liability and employers liability insurances gave rise to different considerations (para 328). In my opinion, that is right. Employers liability policies are subject to particular terms and considerations, analysed above (particularly in paragraphs 18 28 and, in the case of policies effected after the coming into effect of the ELCIA, paragraphs 41 46). These considerations are not or certainly not necessarily applicable to public liability insurances. The present case was concerned with employers liability not public liability insurances, and it may well be that not all the relevant facts relating to the latter are before us. We certainly have not heard full argument on the proper conclusions which may be drawn regarding the basis of liability or trigger generally applicable under the latter. In these circumstances, I would proceed on the basis that we are not bound by Bolton, that this does not involve any view about the correctness or otherwise of Bolton, but only that it is unnecessary to consider what the position generally may be under public liability policies. Assuming that, in relation to public liability insurance, the position generally is as stated in Bolton, that does not alter the conclusions which I reach. It merely means, in their light, that public liability insurance generally and the present employers liability policies operate on different bases, because of their different backgrounds, terms and purposes. Contracted There is no difficulty about treating the word contracted as looking to the causation or initiation of a disease, rather than to its development or manifestation. In relation to the two BAI wordings and the third MMI wording, this interpretation obtains strong support from the general nature and purpose of the relevant policies, derived from their immediate context and terms and analysed in paragraphs 18 to 28 and 41 above. To the limited extent that the WCA background may assist to inform the meaning of later policies, it can be seen overall as a legislative scheme which was concerned with either the risk of or actual causation (para 32 above). Even if, in the phrase sustained or contracted or injury sustained or disease contracted, the word sustained is to be understood as meaning experienced, that would reflect no more than the fact that the cause and effect of an injury commonly coincide; I would still unhesitatingly conclude, as did the Court of Appeal, that the word contracted used in conjunction with disease looks to the initiating or causative factor of the disease. Sustained The majority of the Court of Appeal considered that it was impossible to view policies with pure sustained wordings as operating by reference to the initiating or causative factor of a disease. They did so primarily by reference to the wording of the insuring clauses. In my view, as indicated in paragraphs 18 19 above, a broader approach is necessary. The general nature and purpose of these policies can be derived from their immediate context and terms, analysed in paragraphs 18 to 28 and 41 above. It is true, as Rix LJ said, that phrases such as injury sustained by an employee or an employee who shall sustain injury, in either case by accident or disease, appear to address the impact of the accident or disease on the employee. But the underlying focus of the insurance cover is on the employees and activities current during the insurance period. The cover would be potentially incomplete, and employers would be potentially exposed to uninsured risks, were sustained to be understood as meaning developed or manifested. This is so, even before the ELCIA came into force. Any policies written subsequent to the coming into force of the ELCIA either afford cover consistent with the Acts requirements by virtue of an ELCIA extension provision, or, to the extent that this is not the case, should be construed, if at all possible, as meeting employers obligations under that Act. In my view, such obligations included taking out insurance in respect of negligence during the insurance period affecting an employee in a manner giving rise to bodily injury or disease then or at any subsequent time. On this basis, I consider that, although the word sustained may initially appear to refer to the development or manifestation of such an injury or disease as it impacts employees, the only approach, consistent with the nature and underlying purpose of these insurances both before and after the ELCIA, is one which looks to the initiation or causation of the accident or disease which injured the employee. The disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself subsequently. Disease sustained, read as meaning experienced or incurred Rix LJ was attracted by the submission that, even if sustaining disease meant experiencing or incurring it during the period of the insurance, long tail diseases could be said to have been sustained during the period of insurance in this sense. He asked rhetorically whether an employee who had inhaled asbestos had not sustained an injury in the form of an assault of the fibres, as a result of which he was worse off through having dangerous fibres in his lungs (para 280). He noted that, although there was at most trivial injury or damage, and nothing that could create actionable damage, nevertheless, when mesothelioma develops, it is the risk of mesothelioma created by the exposure which is the damage (see . Barker ) and it is the exposure, and the risk of mesothelioma, that is the damage (para 281). He only felt bound to reject this analysis (para 284) because of the Court of Appeals previous decision in Bolton. It may be that in the case of some long tail diseases, the victim can be said to have incurred or caught them at the same time as the initial ingestion or scratch giving rise to them. But it is clear that this is not the position with inhalation of asbestos in relation to either asbestosis or mesothelioma. No cause of action arises from exposure or inhalation alone: Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281. Further, for reasons which I develop in paragraphs 64 65 below, the exposure and risk are not by themselves damage in any sense known to the law. Damage is only incurred when mesothelioma develops. Only when it develops does the victim incur damage which is legally relevant, and even then this is not because any physical link necessarily exists or can be proved between the mesothelioma and the original exposure. The rule in Fairchild and Barker imposes liability for the mesothelioma upon persons who have exposed the victim to asbestos, and so created a risk of mesothelioma. But it is not a rule which, even as between employers and employees, deems the latter to have suffered injury or disease at the time of any exposure. And, even if it were viewed simply as a rule imposing retrospective liability on employers for exposing their employees to the risk of mesothelioma, the insurance policies do not insure risks of physical injury or disease, but only actual injury or disease. The application of the insurances in respect of mesothelioma At the outset of these appeals, the application of the insurances in respect of mesothelioma suffered by employees exposed to asbestos during their employment by an insured employer did not appear controversial. This changed after a question from Lord Phillips on day 4 of the hearing, followed by a later written note. All the same, the transcript pages containing any argument on the point numbered only 40 out of a total of some 1140. So far as Mr Edelman made any submissions on this point, in his written case or orally, they were to this effect: if the correct analysis of the Houses decision in Fairchild be that an employer who exposes an employee to asbestos is deemed to have caused that employees mesothelioma, then employers liability insurances held by the employer on a causation basis should respond; but, if the policies do not respond on a causation basis, there is no justification for treating the employee as having suffered injury or a disease during their currency, because employers cannot prove that any particular inhalation caused any injury. This led to some discussion, particularly with counsel for employers and employees, of the points which I have already addressed in paragraphs 50 52 above. The point now expressed forcefully by Lord Phillips in his judgment is that exposure to the risk of mesothelioma is the correct analysis of the Fairchild principle, at least as subsequently interpreted, and that such exposure can satisfy neither the concept of injury nor the concept of causation for the purposes of the policies. If that is right, then the present insurance claims must all fail. Indeed, the great bulk of insurance claims settled by other insurers (e.g. former tariff insurers) or by the present insurers under the causation policies they have issued in more recent years (paragraph 10 above) should presumably also have failed. The only exception may be the case of an employee exposed to asbestos in only one employment by an employer holding insurance throughout with only one insurer. In such a case it might (perhaps) be said that, whichever particular inhalation(s) may have been responsible for the employees mesothelioma, it (or they) must have been insured. Even then, the logic of the Supreme Courts reasoning in Fairchild and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10, [2011] 2 AC 229 might lead to the conclusion that causation was still unprovable in the light of the possibilities of environmental or idiopathic causation of mesothelioma. Rules regarding causation are created by the courts for the purpose of determining when liability arises in particular contexts. Normally, they reflect a common sense understanding of what is ordinarily understood when we speak of a cause in a particular context. In their leading work on Causation in the law (Clarendon Press, 2nd ed 1985) Professor H. L. A. Hart and Tony Honor examined both this understanding and its relationship to legal decision making. Generally, but not always, a cause must involve an act or omission that was at least a sine qua non of the injury in respect of which responsibility attaches (the but for test). But sometimes two separate acts or omissions may each independently have been sufficient to give rise to that injury (as when A and B simultaneously, but independently shoot C dead), and then we may as a matter of legal policy accept a weaker causal relationship for the imposition of responsibility: see p lxv in the preface to and p 123 of the 2nd edition. Other cases where causal requirements have been relaxed include Bonnington Castings Ltd v Wardlaw [1956] AC 613; there, materially contributing to part of an accumulation of dust which cumulatively led to pneumoconiosis gave rise to liability for the whole disease (although it has been suggested that some apportionment might now be possible in fact and law). Another relevant authority is McGhee v National Coal Board [1973] 1 WLR 1; there, liability for dermatitis was held to exist because the defendant had materially contributed to part of the claimants exposure to dirt, any part of which might, independently of any other, have given rise to the abrasion leading to the claimants dermatitis. It was recognised that this involved liability based on materially contributing to the risk of the injury. Lord Reid at p.4G H described the result as reached taking a broader view of causation, and Lord Wilberforce at p 5G viewed it as involving a conclusion as to the causal connection that had to exist between the default and the disease complained of. The contrary view (viz, that proof of risk was insufficient without proof that the risk caused or materially contributed to the disease) had a logic which Lord Wilberforce acknowledged, but rejected for policy and evidential reasons set out at p.6C F. In Fairchild, McGhee was seen as a precursor of the decision there reached. Putting aside the possibility of an idiopathic or environmental cause, a Fairchild type situation exists when (a) there are two separate potential causes exposing the claimant to the same risk, one involving an act or omission by the defendant, (b) either one of which causes would have been sufficient to give rise to the injury, and (c) one of which did so, but (d) neither of which can as a matter of probability be shown to have done so. Taking into account the later decisions in Barker v Corus and Sienkiewicz, the Fairchild principle extends to any case where there has been an act or omission exposing a person to asbestos, which exposure may have caused the mesothelioma, but which cannot be shown as a matter of probability to have done so. On that basis, the House held in Barker v Corus that each or any persons liability should only be proportionate to the extent that he had exposed another to the risk of mesothelioma. Parliament by the Compensation Act 2006 reversed that conclusion and made each such person liable in respect of the whole of the damage caused by the mesothelioma. Lord Phillips in his judgment addresses the basis of Fairchild in the light of Barker v Corus, the 2006 Act and Sienkiewicz. He accepts that, if Fairchild is now correctly to be understood as a special rule deeming employers who have exposed an employee to asbestos to have caused any subsequently suffered mesothelioma, then the insurance policies should apply (para 109). But he concludes that Fairchild must be understood as creating liability not for the disease, but for the creation of the risk of causing the disease. It follows in his view that employers and employees gain no assistance from the special rule in asserting that mesothelioma suffered by any person was caused or initiated in any particular policy period. On this basis, even though the insurances respond to injuries caused or initiated during their periods, the employers and employees fail for want of proof. It is not fruitful to repeat the exercise undertaken in Barker v Corus of examining in detail the significance of the speeches in Fairchild. The House was not agreed about this in Barker, but the majority speeches of Lords Hoffmann, Scott and Walker were at pains to reject any analysis of Fairchild as proceeding upon a fiction that each exposure had caused or materially contributed to the disease: see paras 31, 61 and 104; they each also referred to the liability created by Fairchild as being not for causing the disease, but for materially increasing the risk of the mesothelioma which was in fact suffered: paras 31, 36 and 40, 53, 61 and 113. Lord Rodger (dissenting) perceived the majority to be misinterpreting Fairchild by failing to acknowledge that it was based on an equation of materially increasing risk with materially contributing to causation, an equation which he thought had been accepted as sufficient causation in Bonnington Castings Ltd v Wardlaw [1956] AC 613 and McGhee v National Coal Board [1973] 1 WLR 1. It is on the apparently bright line distinction said to have been drawn by the majority in Barker between materially contributing to increasing the risk of, and causing, a disease that Lord Phillips now founds his judgment in these appeals. The Compensation Act 2006 applies where a person who has exposed someone to asbestos is liable in tort in connection with damage caused to the latter by mesothelioma whether by reason of having materially increased a risk or for any other reason (section 3(1)(d)). It makes the former person liable in respect of the whole of the damage (section 3(2)(a)). On its face, the Act assumes rather than creates the liability, and only alters the measure of recovery. That was the view expressed in Sienkiewicz by Lords Phillips, Rodger and Brown (paras 70, 131 and 183). However, on further analysis, the distinction identified in paragraphs 58 59 above proves more elusive. Even in Barker itself, Lord Walker described exposing the employee to the risk of mesothelioma as being equated with causing his injury and the result as an explicit variation of the ordinary requirement as to causation (para 104), and spoke of the rule as one by which exposure to the risk of injury is equated with legal responsibility for that injury (para 109). However, it is conceivable that he meant that the ordinary requirement of causation of the disease was entirely replaced by another liability creating rule. It is in the later authority of Sienkiewicz that the difficulty of drawing any clear cut distinction between creating a risk and causation of the disease becomes most apparent. Lord Phillips there stated that the rule in its current form was that the person responsible for the exposure and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease (para 1). Later, he said that the law was presently contained in Fairchild and Barker which had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances (para 70). That was the analysis of Fairchild advanced by Lord Rodger in Barker v Corus (paras 73 and 83) but rejected there by the majority. Lord Brown in Sienkiewicz spoke of a more relaxed approach to causation (para 178) and flexibility in the approach to causation (para 187). I referred to Fairchild and Barker as involving a special rule of causation (para 188), and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims (para 196) and to adjustments in the burden of proof (paras 198 and 200). Lord Rodger was, on the other hand, loyal to the majority view in Barker by referring to liability as based on materially increas[ing] the risk (para 113), and Lord Dyson was cautious in speaking of materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Lord Phillips has in para 123 set out a passage from an extra judicial commentary written by Lord Hoffmann in Perspectives on Causation (2011), p 8. In it, Lord Hoffmann describes the two ways in which the changes introduced by Fairchild and Barker could be characterised, one as changing the causal requirements for an action for damages for mesothelioma ; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent; the other as creat[ing], exceptionally, a cause of action for the increased risk of mesothelioma, rather than for the disease itself. Lord Hoffmann notes that the House in Barker (Lord Rodger dissenting) adopted the second explanation of what had happened in Fairchild. But in the next sentence, not quoted by Lord Phillips, Lord Hoffmann went on: Parliament almost immediately reversed this decision by a statute giving effect to the first explanation, which had been advocated by Lord Rodger in his dissenting speech. Lord Hoffmanns extra judicial (or judicial) words cannot by themselves alter the true effect of a statute, but his comments do again show that the suggested distinction is more fluid than might at first appear. It is relevant to look more closely at what Barker decides. In Barker, Lord Hoffmann spoke of Fairchild as applying an exceptional and less demanding test for the necessary causal link between the defendants conduct and the damage (para 1) and of the requirement of a sufficient causal link between the defendants conduct and the claimants injury (para 17). In his note in Perspectives on Causation, he picked up this language with references to the causal requirements of the relevant rule and to the issues in cases of mesothelioma and analogous situations as involving the causal requirements for an action for damages for mesothelioma. Lady Hale in Barker also viewed the common law rules governing the measure of recovery as closely linked to the common laws approach to causation, and said that there was no reason in principle why the former rules should not be modified as the latter approach is courageously developed to meet new situations (para 122). In paras 123 and 124, she made clear that in her view the issue in Barker could be seen as arising from the expanded perceptions or developed concept of causation which the law had accepted. These citations all suggest that it is both possible and appropriate to characterise the position achieved by the common law after Barker v Corus as one concerned with the issue of the causal requirements or causal link, as between the defendants conduct and the disease, which the common law requires in order for there to be an action for mesothelioma. But analysis of the rule arrived at after Fairchild and Barker justifies further propositions. Despite the apparent clarity of the suggested distinction between liability for a risk and for a disease, no cause of action at all exists unless and until mesothelioma actually develops. Neither the exposure to asbestos nor the risk that this may one day lead to mesothelioma or some other disease is by itself an injury giving rise to any cause of action: see Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] 1 AC 281; the House there decided that not even the emergence of pleural plaques marking the past exposure to asbestos constituted injury for the purpose of giving a cause of action. In order to fall within the principle in Fairchild and Barker, the development of mesothelioma is a pre condition: see Barker, per Lord Hoffmann (para 48) and Lord Scott (para 53). Lady Hale went further, stressing that she in fact agreed with Lord Rodgers view that the damage which is the gist of these actions is the mesothelioma and its physical and financial consequences. It is not the risk of contracting mesothelioma (para 120). In reality, it is impossible, or at least inaccurate, to speak of the cause of action recognised in Fairchild and Barker as being simply for the risk created by exposing someone to asbestos. If it were simply for that risk, then the risk would be the injury; damages would be recoverable for every exposure, without proof by the claimant of any (other) injury at all. That is emphatically not the law: see Rothwell and the statements in Barker itself, cited above. The cause of action exists because the defendant has previously exposed the victim to asbestos, because that exposure may have led to the mesothelioma, not because it did, and because mesothelioma has been suffered by the victim. As to the exposure, all that can be said (leaving aside the remote possibility that mesothelioma may develop idiopathically) is that some exposure to asbestos by someone, something or some event led to the mesothelioma. In the present state of scientific knowledge and understanding, there is nothing that enables one to know or suggest that the risk to which the defendant exposed the victim actually materialised. What materialised was at most a risk of the same kind to which someone, who may or may not have been the defendant, or something or some event had exposed the victim. The actual development of mesothelioma is an essential element of the cause of action. In ordinary language, the cause of action is for or in respect of the mesothelioma, and in ordinary language a defendant who exposes a victim of mesothelioma to asbestos is, under the rule in Fairchild and Barker, held responsible for and in respect of both that exposure and the mesothelioma. This legal responsibility may be described in various ways. For reasons already indicated, it is over simple to describe it as being for the risk. Another way is to view a defendant responsible under the rule as an insurer, but that too is hardly a natural description of a liability which is firmly based on traditional conceptions of tort liability as rooted in fault. A third way is to view it as responsibility for the mesothelioma, based on a weak or broad view of the causal requirements or causal link appropriate in the particular context to ground liability for the mesothelioma. This third way is entirely natural. It was adopted by Lords Reid and Wilberforce in McGhee, by Lord Hoffmann, Lady Hale and (possibly) Lord Walker in Barker and by Lord Hoffmann in his extra judicial commentary. It seems to have received the perhaps instinctive endorsement of a number of members of this Court, including myself, in Sienkiewicz. Ultimately, there is no magic about concepts such as causation or causal requirements, wherever they appear. They have the meanings assigned to them and understood in ordinary usage in their context. A logician might disagree with a reference to causation or a causal link in a particular context, but that is not the test of meaning: see Lord Wilberforces words in McGhee, p 6C F (cited in para 56 above). The present appeals concern the meanings we assign to the concept of causation, first in the context of considering employers liability to their employees and then in considering the scope of employers insurance cover with respect to such liability. It is instructive in this connection to look more closely at the Compensation Act 2006. Section 3(3) states that section 3(2) does not prevent (a) one responsible person from claiming a contribution from another, or (b) a finding of contributory negligence. Section 3(4) goes on to provide that [I]n determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible . Section 3(3) necessarily relates to the legal bases for claiming contribution or asserting contributory negligence, which are to be found in, respectively, the Civil Liability (Contribution) Act 1978 and the Law Reform (Contributory Negligence) Act 1945. The 1978 Act addresses the situation where two or more persons are liable in respect of the same damage (section 1(1)), while section 2(1) provides for contribution in such situations to be such as may be found by the court to be just and equitable having regard to the extent of that persons responsibility for the damage in question. Although under section 3(4) of the 2006 Act, the court must have regard to the relative lengths of the exposure for which each was responsible, the same damage which is a pre condition to the application of the 1978 Act must be the mesothelioma. It cannot be the risk created by the person by or from whom contribution is sought, because each person and exposure creates a separate risk, and no one person or exposure creates the total risk resulting from all exposures. The 2006 Act, by its reference to the 1978 Act, thus assumes that every person, who has exposed to asbestos a victim who later experiences mesothelioma, incurs responsibility for the mesothelioma. That language again fits an analysis whereby the rule in Fairchild and Barker identifies the appropriate weak or broad causal link between the exposure and the mesothelioma. A similar position applies under the 1945 Act. Under section 1(1), that Act applies [w]here any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons. In that event, the damages recoverable are to be reduced to such extent as the court thinks just and equitable having regard to the claimants share in the responsibility for the damage. The application of this section, as contemplated by the 2006 Act, is only possible on the basis that a mesothelioma sufferer may be said to have suffered the mesothelioma partly as the result . of the fault of anyone who has exposed him to asbestos. In other words, the rule in Fairchild and Barker must have been viewed by the drafters in my opinion entirely understandably as establishing a causal link, between the exposure and the mesothelioma, sufficient for it to be said that the mesothelioma was the result of each (and every) exposure. A similar view is also implicit in the provisions of the Act drafted on the basis that insurers who would commonly of course be employers liability insurers would be among the persons by or for whose benefit or against whom contribution would be sought in cases of multiple responsible persons: see section 3(7)(b) and (10)(a) of the 2006 Act. Those provisions necessarily assume that employers liability insurances, written generally on a causation basis, would respond to Fairchild/Barker type liability incurred by employers. Ultimately, the present appeals raise the questions how the present employers liability insurance policies respond as a matter of construction in circumstances within the rule in Fairchild and Barker. Where two contracts are linked, the law will try to read them consistently with each other. This is so with language in a bill of lading, incorporated from a charterparty: The Njegos [1936] P 90. A similar approach applies to language in a reinsurance incorporated from the insurance: Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 and Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyds Reports 350, even though there is no guarantee that a reinsurance will in every possible circumstance that may develop pick up every liability that may be held to exist under an insurance: see Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHC 40, [2010] 1 AC 180. The intention under the present insurances must be taken to have been that they would respond to whatever liability the insured employers might be held to incur within the scope of the risks insured and within the period in respect of which they were insured. Thus, as Scrutton and Greer LJJ accepted in the Ellerbeck Collieries case (paragraph 34 above), an employers liability insurance could have been expected to respond to the conventional and artificial definition in the WCAs as to what constituted an accident and when personal injury by accident or disease was sustained for the purposes of employers liability to employees. Furthermore, if the common law during or even after the currency of an insurance develops in a manner which increases employers liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyds Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. But it does mean that, when judges state what the law is, their decisions do . have a retrospective effect in the sense that the law as stated will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G H, per Lord Goff. The declaratory theory is a pragmatic tool, essential when cases can only come before the court some time, perhaps some years after the relevant events occurred, and when the law [must] be applied equally to all, and yet be capable of organic change (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild. Concluding, as I have done, that the present insurances covered employers liability for injuries or diseases caused during the relevant insurance periods, the question is whether they cover employers liability for mesothelioma arising under the rule in Fairchild and Barker from having exposed employees to asbestos during such periods. It is not in dispute that, if the rule is characterised as a rule of deemed causation, then the policies must respond. A parallel example, so familiar that it is easy to overlook, is the vicarious liability to an employee, A, which rests on any employer, B, who has not himself been negligent but must answer vicariously for the negligence of another employee, C. We have no hesitation in saying that the employer B has in such a case caused the injury or disease suffered by A. But this is so in reality only because a rule of law requires us to equate the acts or omissions of C with those of B. The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers activities during their insurance periods: see paragraphs 18 28 and 41 above; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers activities will not in practice be covered at all. In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient weak or broad causal link for the disease to be regarded as caused within the insurance period. It would, I think, have been anomalous and unjust if the law by deeming there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma. For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond. Conclusion I would therefore dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. ANNEX A The policy wordings (dates are approximate) (1) Excess First Wording (late 1940s): Whereas . (hereinafter called The Employer) carrying on the business of . has made a proposal . this Policy witnesseth that in consideration of the payment of . as premium to the Company on the estimated total amount, as set forth in the Schedule hereto, of the wages, salaries, and other earnings of Employees, a description of whom is set forth in the said Schedule (which premium is subject to adjustment as hereinafter provided) the Company agrees to indemnify the Employer in the manner following, namely That if at any time during the period commencing on theday of19 , and ending on theday of19 (both days inclusive) and for such further period or periods as may be mutually agreed upon, any employee in the Employer's immediate service shall sustain any personal injury by accident or disease while engaged in the service of the Employer in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands, in work forming part of or process in the business above mentioned, and in case the Employer shall be liable to damages for such injury, either under or by virtue of the Common Law, the Fatal Accidents Acts 1846 to 1908, or the Law Reform (Miscellaneous Provisions) Act 1934, the Company will indemnify the Employer The Schedule required a description of the insured companys employees and their estimated total wages, salary and other earnings. Condition 1 of the policy further provided that: the Employer shall truly record in a wages book the name of every employee and the amount of wages, salary and other earnings paid to him. Second Wording (late 1950s to 1960s): Whereas the Employer . carrying on the business described in the . Schedule has made . a written proposal and declaration, containing particulars and statements which it is hereby agreed are the basis of this Contract . and has paid the premium mentioned in the Schedule, which premium is subject to adjustment as hereinafter provided, this Policy witnesseth that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in work forming part of the process in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease The policy provided that the Company should not be liable under it in respect of accidents occurring elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. The policy provided that premiums were to be regulated by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with a wages book being kept open to inspection for that purpose and the employer supplying the correct amounts within one month of the expiry of each insurance period. Condition 1 and the Schedule were in similar form to those in the first wording. Third Wording (1970 to 1976) After a recital in the same form as the second wording, this wording provided: that if at any time during the period of the indemnity as stated in the Schedule or during any subsequent period for which the Company may accept premium for the renewal of this Policy any person of a description mentioned in the Schedule who is under a contract of service or apprenticeship with the Employer shall sustain personal injury by accident or disease arising out of and in the course of employment by the Employer in the business mentioned in the Schedule, the Company will indemnify the Employer against liability at law for damages in respect of such injury or disease Under the third wording, there was the same territorial limitation as under the second wording in relation to accidents occurring elsewhere than in Great Britain, etc. Premiums were also regulated by reference to wages, salaries, etc. and condition 1 and the Schedule were in the same terms as in the second wording. (2) Independent Sole wording in Issue (1972 to 1987): This was a Contractors Combined Policy, covering Employers Liability (section 1), Public Liability (section 2) and Loss of or Damage to Contract Works (section 3). It provided: NOW THIS POLICY WITNESSETH that during the Period of Insurance or during any subsequent period for which the Company may accept payment for the continuance of this Policy and subject to the terms, exceptions and conditions contained herein and or endorsed hereon, the Company will indemnify the Insured as hereinafter specified. SECTION 1 EMPLOYERS' LIABILITY If any person who is under a contract of service or apprenticeship with the Insured shall sustain bodily injury or disease arising out of and in the course of his employment by the Insured in connection with the Contract specified or type of work described in the Schedule the Company will indemnify the Insured against all sums for which the Insured shall be liable at law for damages for such injury or disease The Policy provided that the Company was not to be liable for injury, illness, loss or damage caused elsewhere than in Great Britain, the Isle of Man or the Channel Islands. As a result of the ELCIA 1969 making insurance in respect of employers liability compulsory, the Independent wording also contained the further provision (the ELCIA extension provision): "AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY The indemnity granted by section 1 of this Policy is deemed to be in accordance with the provisions of any law relating to compulsory insurance of liability to employees in Great Britain. It is agreed the Insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the provisions of such law. " The policy Schedule contains spaces for entry of first, annual and minimum premium, as well as of the name of the Principal for whom the insured is undertaking work, the details of the contract or type of work covered by the policy and its situation. Condition 7 provides that the premium is based on estimates provided by the Insured, for record keeping, for the supply of updated information as required by the Company within one month of the expiry of each insurance period and for adjustment of the premium on that basis. (3) MMI First Wording (1949 to 1958) the Company hereby agrees that if at any time during the period of insurance specified in the schedule or thereafter during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified in the said schedule, or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any personal injury by accident or disease arising out of and in the course of his employment by the Insured in their activities described in the schedule and if the Insured shall be liable to pay damages for such injury or disease then, subject to the terms and conditions contained herein or endorsed hereon, the Company shall indemnify the Insured against all sums for which the Insured shall be so liable The policy was expressed not to apply to or include liability in respect of injury or disease caused elsewhere than in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands. Condition 5 regulated premiums by reference to wages, salaries, etc, and made provision for a wages book and adjustment to like effect to the Excess second wording. The policy Schedule provided for the classification of staff and employees according to departments and job description, with corresponding figures for estimated total remuneration. Second Wording (1958 to 1974) the Company hereby agrees that if at any time during the First Period of Insurance specified in the said Schedule or during any subsequent period for which the Insured shall agree to pay and the Company shall agree to accept a renewal premium of the amount specified as the Renewal Premium in the said Schedule or of such other amount as the Company shall from time to time require, any person under a contract of service with the Insured shall sustain any bodily injury or disease arising out of and in the course of his employment by the Insured in the Insured's activities described in the said Schedule and if the Insured shall be liable to pay damages for such injury or disease or for death resulting from such injury or disease then, subject to the terms, exceptions and conditions contained herein or endorsed hereon or set out in the Schedule to this Policythe Company will indemnity the Insured against all sums for which the Insured shall be so liable. Like the first wording, this wording contained a territorial exclusion of liability in respect of injury or disease caused elsewhere than in Great Britain, etc. The policy Schedule provided for the entry of the Estimates (if any) on which the premium is calculated, including in particular any such estimate of wages, salaries, etc. paid to staff, and cross referred to condition 7, which provided that, if the premium had been based on any estimates, an accurate record should be kept (of actual amounts), the insured should provide insurers with such particulars and information as might be required within one month of the expiry of the policy period and the premium adjusted accordingly. Third Wording (1974 to 1992) The Company agrees to indemnify the Insured in respect of all sums without limit as to amount which the Insured shall be legally liable to pay as compensation for bodily injury or disease (including death resulting from such bodily injury or disease) suffered by any person under a contract of service or apprenticeship with the Insured when such injury or disease arises out of and in the course of employment by the Insured and is sustained or contracted during the currency of this Policy. The policy Schedule contemplated a premium adjustable in accordance with condition 5, which in turn provided (in like manner to condition 7 of the second wording) for the adjustment of any premium so calculated by reference to actual amounts at the end of the policy period. (4) BAI First Wording (1953 to 1974) . the Company willindemnify the Insured against all sums of money which the Insured may become liable to pay to any Employee engaged in the direct service of the insured or any dependent of such Employee in respect of any claim for injury sustained or disease contracted by such Employee betweenandboth inclusive The policy carried the note: This policy does not cover the insureds liability for accidents to workmen arising outside the United Kingdom. Conditions 1 and 2 made elaborate provision for the regulation of premiums by the amount of wages, salaries, or other earnings paid to employees by the employer during each period of insurance, with pay sheets and books of account being kept open to inspection for that purpose and the employer making a return, and the premium being adjusted, subject to a minimum, at the end of each insurance period. Second Wording (1974 to 1983) the Company willindemnify the Insured against all sums of money which the Insured may become legally liable to pay in respect of any claim for injury sustained or disease contracted by any person engaged in and upon the service of the Insured and being in the Insured's direct employment under a Contract of Service or Apprenticeship between theday ofand theday ofboth inclusive This wording also excluded insurers from liability in respect of accidents to employees arising outside the United Kingdom. Like the Independent and third MMI wordings, the BAI second wording also included the ELCIA extension provision. Conditions 1 and 2 provided for the regulation and adjustment of premiums by reference to actual wages, salaries, etc. during each insurance period, in like terms to conditions 1 and 2 in the first wording. (5) Zurich The Municipal First Select wording (1993 to 1998) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury sustained during the Period of Insurance by any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The Municipal Second Select wording (1998 ) The INSURER will indemnify the INSURED in respect of all sums which the INSURED may become legally liable to pay as damages and claimants' costs and expenses in respect of Injury caused during the Period of Insurance to any EMPLOYEE arising out of and in the course of employment by the INSURED in the BUSINESS within the Geographical Limits. The tariff wording (1948 ) if any person under a contract of service or apprenticeship with the Insured shall sustain any personal injury by accident or disease caused during the period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned and if the Insured shall be liable to pay damages for such injury or disease the Association shall indemnify the Insured against all sums for which the Insured shall be so liable. LORD CLARKE Like other members of the Court, I agree with Lord Mance on the construction issue. Thus I agree that, for the purposes of the EL policies, mesothelioma is sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the asbestos fibre or fibres which cause the disease. I do not wish to add to Lord Mances reasoning on the construction issue. I do however wish to add some words of my own on the causation issue which sharply divides Lord Phillips and Lord Mance. I wish to say shortly why I prefer the conclusion of Lord Mance to that of Lord Phillips. As I see it, the effect of Fairchild, Barker and Sienkiewicz may be summarised in this way. An employer who, in breach of duty, has exposed an employee to asbestos is liable in damages if the employee subsequently suffers the disease. The employees cause of action is not that he was exposed to the risk of mesothelioma. He has no claim unless he in fact suffers the disease. It is the disease which represents the damage which completes the cause of action and it is only then that his cause of action accrues and the relevant time limit begins to run. It is axiomatic that, in order to succeed in tort, the employee must show a sufficient causal link between the breach of duty, namely the exposure to asbestos, and the disease which represents the damage, namely mesothelioma. The effect of the majority opinion in Barker is that, where there are two or more employers who have exposed the claimant to the risk of mesothelioma, they are not jointly and severally liable to the claimant for the whole of the consequences of the disease but only severally liable for an aliquot part. That decision was reversed by the Compensation Act 2006, so that such employers are jointly and severally liable for the whole of the consequences. The question in this appeal is whether the employers liability insurers are liable to indemnify the employers in respect of that liability. It would in my opinion be a remarkable result if they were not. Lord Phillips notes at para 109 that Mr Edelman QC accepted that, if the correct analysis of the special rule, which (using Lord Phillips definitions) was the result of the combined effect of the special approach in Fairchild and Barker and the Compensation Act 2006, was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust, the insurers would be liable. Lord Phillips accepts that that concession was correctly made. I agree, for the reasons he gives at paras 109 to 114. The question is therefore whether the correct analysis of the special rule is indeed that the employers were deemed to have caused the mesothelioma. I accept that in such a case the employee cannot show on the balance of probabilities that the employers negligence caused the disease. The effect of Fairchild and Sienkiewicz was however that the employer is liable where the exposure contributed to the risk that the employee would suffer the disease and where the employee in fact suffers the disease. That is not in dispute. Lord Phillips says at para 124 that the majority in Barker drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease. He quotes para 2 of Lord Hoffmanns speech as follows: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Phillips further notes that at para 125 Lord Hoffmann advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. See also the passages to like effect referred to by Lord Mance at para 61. I accept that Lord Hoffmann and others did indeed advance that view of Fairchild but it is I think important to note that it was in the context of the question whether, in a case of two or more employers, each was severally liable for a proportion of the consequences of the mesothelioma or whether each was jointly and severally liable for the whole. Lord Hoffmann cannot have intended to hold, without more, that the basis of liability was the wrongful creation of the risk or chance of causing the disease because there would be no liability at all but for the subsequent existence of the mesothelioma. It seems to me that, whether the majority in Barker were correct or not, there is no escape from the conclusion that, in all these cases, where it is not possible to show that the particular employer caused the claimant to suffer mesothelioma, the underlying question is who should be held responsible for causing the mesothelioma which in fact struck down the employee. None of the cases is authority for the proposition that causation is irrelevant. On the contrary, the quest is for the employer who can fairly be held liable for the consequences of the disease and therefore for the employer who can fairly be said to have caused the disease. The courts have embarked on similar quests over the years. Lord Mance has given a number of examples. As Lord Mance shows at para 56, they include Bonnington and McGhee, where Lord Reid was prepared to take a broad view of causation and Lord Wilberforce rejected a traditional approach for policy or evidential reasons. In my opinion the reasoning in Sienkiewicz is of some significance in this context. Lord Mance has given the relevant references in para 61. Thus, as Lord Mance observes, at para 61 Lord Phillips said that Fairchild and Barker had developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances. Lord Mance further refers to Lord Brown speaking of a more relaxed approach to causation and flexibility in the approach to causation at paras 178 and 187. Lord Mance had himself referred to Fairchild and Barker as involving a special rule of causation at para 188, and Lord Kerr referred to them as involving a modification of the previously applicable legal rules in relation to the causation element in employers liability claims at para 196 and to adjustments in the burden of proof at paras 198 and 200. Again, as Lord Mance observes at para 61 above, Lord Dyson referred (at para 207) to materially increasing the risk of contracting the disease as sufficient to satisfy the causal requirements for liability (para 207). Both Mr Beloff QC and Mr Stuart Smith QC addressed these issues in their oral submissions. They both in effect submitted that the effect of Fairchild, Barker and Sienkiewicz was that the employers were deemed to have caused mesothelioma by exposing the employees to asbestos dust. They both recognised that the ordinary rule of causation could not apply and that some element of policy or doctrine was required in order to explain Fairchild. Mr Stuart Smith submitted that the effect of Fairchild was that each material exposure to asbestos dust is doctrinally held responsible for the mesothelioma. Mr Beloffs submission was to much the same effect. He relied upon a dictum of Lord Walker in Barker at para 109: A rule of law by which exposure to risk of injury is equated with legal responsibility for that injury entails the possibility that an employer may be held liable for an injury which was not in fact caused by that exposure (though in the present state of medical science, that fact can be neither proved nor disproved). The injury is of course the mesothelioma, which is necessary to complete the cause of action. On that basis it seems to me that Lord Walkers statement that the risk of injury is equated with legal responsibility for the injury is in effect to say that, by creating the risk of mesothelioma in the future, the employer is deemed to have caused the mesothelioma, if it should develop in the future. It appears to me that these conclusions are supported by Lord Mances analysis of section 3 of the Compensation 2006 at paras 67 and 68, with which I agree and to which I do not wish to add anything. Given Mr Edelmans concession that, if that is correct, the employers are liable under the policies (and this Courts acceptance of it) I would hold that the causation point does not assist the insurers. I would only add this. It appears to me that, once it is held that, on these facts, the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies. Rather as in AXA, the whole purpose of the policies was to insure the employers against liability to their employees. That purpose would be frustrated if the insurers submissions on this point were accepted. I agree with Lord Mance, for the reasons he gives at paras 69 73 that these policies respond to these claims. For these reasons, I too would dismiss the appeals by insurers so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD DYSON I too agree with Lord Mance on the construction issue. As to the causation issue, I agree with the reasoning of Lord Mance and Lord Clarke. Accordingly, I would dismiss the appeals by insurers in so far as they concern the policies with contracted wordings. I would allow the appeals against insurers, and dismiss the appeal by the Independent, so far as they concern policies with sustained wordings. LORD PHILLIPS Introduction So called long tail industrial diseases have raised peculiar difficulties in the field of tort. These diseases result from the effect on the body of exposure to noxious substances. The effect can be long, drawn out and mysterious, in as much as medical science has not yet identified the precise mechanism, or chain of causation, by which the noxious substance causes the disease. Mesothelioma is a long tail disease in which the problems raised have been particularly acute. The problems arise in the application of principles of law that do not ordinarily give rise to difficulty. An employer will be liable in damages if by an act or omission that is negligent or in breach of statutory duty he causes physical harm to an employee. In the vast majority of cases there will be no difficulty in identifying the moment at which the negligence or breach of duty causes the physical harm, for the harm will take the form of an obvious injury. This is not the position in respect of mesothelioma. Asbestos dust, inhaled into the lungs, is the agency that causes mesothelioma, but as long as forty or fifty years may elapse before the effects on the body of dust inhaled culminate in symptoms of mesothelioma. Once the symptoms are felt, the disease will develop swiftly to bring about an inevitable and extremely unpleasant death. Where a victim of mesothelioma was exposed to asbestos dust over a period of years it is impossible, even with hindsight, to determine on balance of probabilities whether dust inhaled in a particular year caused or contributed to the development of the mesothelioma. It follows that, where the victim worked for a series of employers, each of whom exposed him to asbestos dust, it is impossible to prove on balance of probability that any particular employer caused or contributed to the victims mesothelioma. This means that the normal principles of the law of tort provide no remedy to the employee or his dependants. The manifest injustice of this position led the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22; [2003] 1 AC 32 and Barker v Corus UK Ltd [2006] UKHL 20; [2006] 2 AC 572 to create what I shall describe as a special approach to causation in respect of mesothelioma, whose effect was immediately varied by Parliament by section 3 of the Compensation Act 2006. I shall describe the composite result achieved by the House of Lords and Parliament as the special rule. I shall examine the nature of this special rule in due course. Its effect was, however, to place each employer in the same position as that employer would have been under at common law if it were proved, on balance of probability, that its negligence or breach of duty in exposing the employee to asbestos dust had contributed to causing the employees mesothelioma. These developments of the law of tort have formed the backdrop to the issue that has occupied almost all of the eight days that this Court has devoted to this appeal. I shall call this issue the construction issue. The construction issue relates to the true construction of a number of policies of insurance against employers liabilities (EL policies) with similar, but not identical, provisions as to the cover provided. The EL policies provided cover by reference to specific periods usually of a year. The central issue relates to the event or events that, on true construction of each policy, had to occur within the period of the policy in order to render the insurer liable to indemnify the employer in respect of liability for causing an employees mesothelioma. The policies provided cover in respect of diseases sustained or contracted during the period of the policy. The meaning of each of those words, in its context, lies at the heart of the construction issue. It does not seem that the construction issue initially received a great deal of consideration. Insurers treated the policies as if they covered an employer whose breach of duty within the period of the policy had contributed to causing the disease and regarded this requirement as satisfied if the employer was held liable because he had exposed the employee to asbestos dust during that period. Where more than one insurer was liable on this basis, they apportioned liability according to the period of exposure covered by each. The attitude of four of the five insurers party to this appeal changed as a result of the decision of the Court of Appeal in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd [2006] EWCA Civ 50; [2006] 1 WLR 1492. Those insurers are MMI, Excess, BAI and Independent, each of which is in run off. I shall describe them collectively as the insurers. Their opponents I shall describe collectively as the employers, although they embrace solvent employers, individuals claiming under the Third Party (Rights against Insurers) Act 1930, and Zurich, which has a community of interest with these. Bolton concerned the scope of cover of a public liability policy (PL policy) in relation to liability for causing mesothelioma. The policy provided cover in respect of an injury that occurs during the currency of the policy. The argument proceeded on the premise that the chain of causation of mesothelioma, once it was diagnosed, could be traced back to the initial inhalation of asbestos dust. The issue was whether the mesothelioma could properly be said to have occurred at the time of the initial inhalation. The Court of Appeal held that it could not. The injury only occurred, at earliest, at the stage of development of the disease at which malignancy occurred. This was, on the evidence, ten years, give or take a year, from the date on which it became possible to diagnose the existence of the tumour but very many years after the initial inhalation of asbestos dust. This decision led the insurers to take the point that a similar approach should be taken to the interpretation of the cover afforded by the EL policies. Mesothelioma was not, on true construction of the policies, sustained or contracted at the time of the initial inhalation of asbestos dust. It was only sustained or contracted at the much later stage when, as a consequence of the process initiated by asbestos dust, an actionable injury in the form of malignancy, developed. Before Burton J, the Court of Appeal and this Court the construction issue has been argued at great length and in great detail. I agree, as do the other members of the Court, with the conclusions reached by Lord Mance on the construction issue. These conclusions have application not merely to mesothelioma but to employers liabilities in relation to other long tail industrial diseases such as asbestosis and pneumoconiosis. For the purpose of EL policies, these diseases are sustained or contracted when the process that leads to the disease is initiated as a result of the wrongful exposure of the employee to the noxious substance that causes, or contributes to the cause or the extent of, the disease. Throughout the hearing of this appeal there has lurked a second issue. It has not been the subject of argument below, nor does it feature in the agreed Statement of Facts and Issues. This is, perhaps, because it relates to a point that does not arise out of Bolton. It has always been there for the taking, but insurers have not hitherto chosen to raise it, perhaps because its consequences are unattractive. It arises out of a problem that is similar to that which led the House of Lords to formulate the special approach in Fairchild and Barker. It is not possible for an employer to prove that an employees mesothelioma was, in fact, caused in whole or in part by any particular period of exposure to asbestos dust. Thus the employer cannot prove, on balance of probability, that the mesothelioma for which he has been held liable under the special rule was, in fact, initiated in any particular policy year. How, then, can he prove that his liability falls within the scope of the cover, even if the policy bears the construction contended for by the employers and upheld by this Court? How can he prove that his liability arises out of disease sustained or contracted within the policy period, giving these words the same meaning as initiated? I shall call this issue the causation issue. The causation issue and the judgments below Although the causation issue was not raised in argument below, it was dealt with, at least implicitly, in the judgments of both courts. Burton J at first instance, and Rix and Stanley Burnton LJJ in the Court of Appeal proceeded on the basis that, in the case of a mesothelioma victim, exposing the victim to asbestos dust could be treated as equivalent to causing his disease. This approach was based on the special rule. Thus Burton J at paras 42 to 58 summarised, without significant comment, what he described as the special mesothelioma jurisprudence as it was at the time of his judgment. This included Fairchild, Barker and the 2006 Compensation Act. He thereafter proceeded on the basis that exposing a mesothelioma victim to asbestos dust could be treated as having been equivalent to causing the victim to contract the disease. Thus, when summarising his conclusions at para 243 he said: I conclude, in relation to the policies in issue before me, that they respond, just as would policies with caused wording, to claims against insurers where employers are liable on the basis of inhalation by employees during the policy period. They respond, consistently with other EL policies, in respect of mesothelioma claims, on an exposure basis. For the purposes of these policies, injury is sustained when it is caused and disease is contracted when it is caused, and the policies fall to be so construed. Rix LJ drew a distinction between the meaning of contracted and sustained. Contracted referred to the time of the diseases causal origins para 245. He felt constrained by Bolton, however, to hold that no injury was sustained until the disease reached the malignant stage. Implicit in his judgment was the premise that exposure to asbestos dust during the period of the policy could be treated as the causal origin of the disease see for example his comments at para 244. A difficult passage in his judgment at paras 280 283, when considering the meaning of injury, suggests that this premise was founded on the special rule. Thus he was able to conclude that the disease was contracted at the time that the victim was exposed to asbestos dust albeit that injury was not sustained at that point. In a short judgment Stanley Burnton LJ adopted similar reasoning. He stated, at para 338: We are agreed that in any year in which there was substantial exposure to asbestos, mesothelioma was caused by that exposure during that year. The fact that the disease did not develop for some years does not break the chain of causation. Submissions on the causation issue The causation issue was not raised by the insurers as a discrete issue. It none the less surfaced in a passage of the written case for Excess that was addressing the employers case that personal injury by disease was sustained at the moment of inhalation of asbestos dust that triggered the process of sustaining personal injury by disease. One of the arguments advanced by Excess in answer to this submission read as follows: Medically and empirically, one cannot be said to have suffered an injury on a particular day because it cannot be known in (say) a 10 year occupational exposure period on which of the 3652 days the fatal dose was inhaled (and it may be on more than one). It is likely that any ingestion on a particular day was irrelevant to the development of the final condition. There has been a tendency on the part of the claimants to treat inhalation as a single event from which an unbroken line can be drawn to malignancy. It is not. Inhalation (and hence on this theory) injury may occur over several thousands of days. Each day does not bring injury. Any particular day cannot therefore be selected as injury day. To overcome problems of medical causation in a personal injury action against an employer, the House of Lords extended the McGhee principle to mesothelioma in Fairchild. However this was a rule of causation and not definition. There is no such rule in insurance policies which defines what amounts to an injury. The Supreme Court in Sienkiewicz stressed the limits of the Fairchild exception in no uncertain terms, and it is submitted that it would be quite wrong for it now to invade the law of contract. A liability policy responds only to indemnify against a liability (i.e. actionable injury). There is no such liability on inhalation. Injury occurs when the claimant has a personal injury by disease. Thus Excess took the point that the special rule could not properly be invoked to establish that, on true construction of the contracts of insurance, injury was sustained upon inhalation of asbestos dust. This passage appeared after a submission at para 209 that it was only possible to equate the inhalation of a culpable quantity of asbestos dust with sustaining personal injury by disease by, inter alia, creating a special rule governing the response of EL policies in respect of mesothelioma, and possibly other long tail diseases. This proved to be what counsel for the employers sought to do when invited by the Court to address the causation issue. They did so in short oral submissions that cannot, when taken together, have occupied more than half an hour of the eight day hearing. The relevant submissions made by Mr Beloff QC for Akzo and AMEC and the Local Authorities are reported at pp 120 122 of the transcript for 15 December 2011. He started by observing that we had to cut the Gordian knot. He suggested that we should do so by equating creation of a risk with causing bodily injury. This he submitted was permissible because the object of the policy was to provide cover to an employer who, in breach of duty to employees, caused them compensatable damage. Were this approach not adopted, it would be impossible to show that any of a number of insurers providing cover over a period of years was liable. The law should rebel against such a result. In support of this submission Mr Beloff cited a statement by Lord Walker of Gestingthorpe in Barker at para 109 suggesting that the special approach to mesothelioma equated the exposure to the risk of injury with legal liability for the injury. Mr Stuart Smith QC for Zurich dealt with the causation issue at rather greater length in a passage reported at pp 126 to 131 of the same transcript. He started by accepting that it was impossible to know when the metabolic changes that led to the development of mesothelioma in fact occurred. Fairchild dealt with this problem by creating a doctrinal rule under which each significant exposure to asbestos dust was held to be responsible for the mesothelioma. Thus doctrinally the process of developing mesothelioma started upon inhalation. This doctrinal framework for the application of the law of tort was that within which policies of insurance against tortious liability had to operate. Mr Stuart Smith agreed with this summary of his argument advanced by Lord Mance: If the law of tort treats someone, an employee, as having sustained a personal injury and treats the employer as liable to pay damages for such personal injury, then the policy answers. These submissions on behalf of the employers raise the following questions: i) Will the policies respond to fictional or doctrinal events that are deemed to have occurred under the special rule? If so: ii) Does the special rule deem that events have occurred to which the policies should respond? If not: iii) Can this Court properly reformulate the special rule in such a way as to require the policies to respond? Will the policies respond to fictional or doctrinal events? On the premise that he failed on the construction issue, Mr Edelman accepted that, if the correct analysis of the special rule was that the employers were deemed to have caused the mesothelioma by exposing the victims to asbestos dust, then the policies should properly respond. Because of the view that I take of the next two questions I do not need to decide whether the concession was properly made. I have, however, concluded that it was. The policies exist to provide protection against employers liability in tort. If the law of tort, whether laid down by the courts or by Parliament, resorts to legal or doctrinal fictions, it seems logical that the policies should respond as if the fictions were facts. A purposive approach to construction of the policies would lead to this result. Two examples illustrate this approach. Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 involved a policy of insurance against liability under the Workmens Compensation Act 1925. The terms of the policy entitled the employer to indemnity if at any time during the currency of the insurance any employee sustained any personal injury by accident or disease. The 1925 Act imposed a fictitious test for identifying when an industrial disease was sustained, namely the date on which a certifying surgeon issued a certificate that the employee was suffering from the disease. On the strength of a certificate issued within the currency of a policy of insurance an employer was held liable to two workmen who had, in fact, sustained the relevant disease before the period of the insurance began. The Court of Appeal held that this liability fell within the cover of the policy. The argument for applying the fictional date was a strong one because, as Greer LJ observed at p 417, the policy was intended to cover the employers liability under the Act. The parallel between Ellerbeck and the present case would have been stronger had the relevant policies been taken out after the special rule had been created. In Rothwell v Chemical & Insulating Co Ltd [2007] UKHL 39, [2008] AC 281 the House of Lords held that pleural plaques caused by exposure to asbestos dust did not constitute actionable injury because they produced no adverse physical effects. The Scottish Parliament responded to this decision by introducing the Damages (Asbestos related Conditions) (Scotland) Act 2009 (the Scottish Act). That Act provides by section 1 that asbestos related pleural plaques constitute a personal injury which is not negligible and that accordingly they constitute actionable harm for the purpose of an action for damages for personal injury. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46, [2011] 3 WLR 871 the Supreme Court rejected a challenge by insurers to the lawfulness of this Act. The Scottish Act effected a limited alteration to the common law in decreeing that asymptomatic pleural plaques constituted non negligible personal injury and thus actionable damage. Lord Mance at para 88 suggested that the main target of the legislation was employers insurers. He went on at para 89 to consider whether the Act would, in fact, alter the meaning to be given to bodily injury under a policy of insurance: A Scottish Act will not on the face of it change the legal effect of an English insurance contract, even in Scotland. However, depending upon the particular policy language, the scope of the concept of bodily injury under a worldwide policy may respond to different conceptions of bodily injury in different parts of the world. Here, the question would be whether it would respond to a development or change, such as that introduced retrospectively by the 2009 Act, in the conception of bodily injury. I say no more about the answer, which may be elicited in another context or suit. While Lord Mance left open the effect of the Scottish Act on the construction of policies of liability insurance, Lord Brown was in no doubt that the effect of the Scottish Act was to subject insurers to liabilities to which they would not have been subject prior to that Act. He referred at para 80 to the undoubted, and deliberate, impact of the legislation upon pending claims. Earlier, at para 77, he drew an analogy with the effect of the decision in Fairchild on EL insurers liability: Had the House of Lords in Rothwell decided that asymptomatic pleural plaques of themselves constitute a non negligible personal injury and thus actionable damage decided in other words that in this particular context the common law should develop in this admittedly novel way the appellants would doubtless have deplored the decision but they could certainly not have questioned its legitimacy. No doubt they would have resented the fact that, as a consequence of the decision, they would unexpectedly have had to pay out on claims resulting from the employees exposure to asbestos upwards of 20 years (quite likely up to 40 years) previously. But they could no more have advanced an [article 1, Protocol 1] challenge to this development of the law than they could have challenged the House of Lords decision some four years earlier in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32 to adopt a less stringent than the usual but for test for establishing the necessary causal connection between an employers negligence and a claimants condition in, most notably, mesothelioma cases. Employers (and their liability insurers) necessarily take the risk of the common law developing in ways which may adversely affect them with regard to personal injury claims. In this passage Lord Brown assumed that the effect of Fairchild was to bring employers liabilities in respect of mesothelioma within the scope of the cover afforded by EL policies. I am about to consider whether he was correct in this. I agree, however, with the general principle expressed in the last sentence of the extract from his judgment that I have just cited. It is for this reason that I would give an affirmative answer to the first of the three questions posed at para 108 above. I turn to the second. What is the special rule? The employers submissions on the causation issue proceed on the premise that the special rule deems exposure to asbestos dust of an employee who is subsequently diagnosed with mesothelioma to have been a cause of the mesothelioma. I have reached the conclusion that that premise is unsound. In Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 I summarised the special rule as follows at para 1: When a victim contracts mesothelioma each person who has, in breach of duty, been responsible for exposing the victim to a significant quantity of asbestos dust and thus creating a material increase in risk of the victim contracting the disease will be held to be jointly and severally liable for causing the disease. This is certainly the effect of the special rule, but in order to discover the juridical basis of the rule it is necessary first to identify the basis of the special approach adopted by the House of Lords in Fairchild and Barker and then to consider the effect of section 3 of the Compensation Act, which adapted the special approach into the special rule. The special approach In Sienkiewicz, at para 70, I stated that Fairchild and Barker developed the common law by equating materially increasing the risk with contributing to the cause in specified and limited circumstances, which include ignorance of how causation in fact occurs. As I shall show, this was not an accurate summary of the special approach adopted in those cases. In Fairchild the House of Lords confronted the position where a mesothelioma victim had worked consecutively for a number of employers, each of which had exposed him to asbestos dust. One or more of these had caused his mesothelioma, but because of the limits of medical knowledge it was not possible, on balance of probability, to identify which. In these circumstances their Lordships adopted a special approach that enabled them to find that each of the employers was jointly and severally liable for the mesothelioma. In doing so they purported to be following a similar approach adopted by the House of Lords in McGhee v National Coal Board [1973] 1 WLR 1. They were not, however, all agreed as to the basis of that approach. Lord Hutton, at para 109, held that it was based on the drawing of a factual or legal inference leading to the conclusion that the breach of duty [in exposing the employee to asbestos dust] was a cause of the disease. The majority of the House did not agree. Lord Bingham said, at para 35: I prefer to recognise that the ordinary approach to proof of causation is varied than to resort to the drawing of legal inferences inconsistent with the proven facts. Lord Nicholls of Birkenhead said, at para 42: So long as it was not insignificant, each employer's wrongful exposure of its employee to asbestos dust, and, hence, to the risk of contracting mesothelioma, should be regarded by the law as a sufficient degree of causal connection. This is sufficient to justify requiring the employer to assume responsibility for causing or materially contributing to the onset of the mesothelioma when, in the present state of medical knowledge, no more exact causal connection is ever capable of being established." Lord Hoffmann at para 65 rejected the suggestion that the House in McGhee held that materially increasing the risk of the disease should be treated as equivalent to material contributing to the injury. He concluded: I would respectfully prefer not to resort to legal fictions and to say that the House treated a material increase in risk as sufficient in the circumstances to satisfy the causal requirements for liability. Lord Rodger of Earlsferry did not agree. His reasoning was close to that of Lord Hutton. He held, at para 168: Following the approach in McGhee I accordingly hold that, by proving that the defendants individually materially increased the risk that the men would develop mesothelioma due to inhaling asbestos fibres, the claimants are taken in law to have proved that the defendants materially contributed to their illness. What then happened has been summarised by Lord Hoffmann in Perspectives on Causation (2011) at p 8: There are two ways in which one could characterise this change in the substantive law of negligence. One is to say that the causal requirements for an action for damages for mesothelioma have been changed; all that is necessary is to prove that the risk has been increased and that the specific exposure may have provided the actual agent. The other is to say that the House created, exceptionally, a cause of action for the increased risk of mesothelioma rather than for the disease itself. In the former case, satisfying the new causal requirement would entitle the claimant to sue for the whole injury caused by contracting the disease. In the latter case, he would be able to sue only for the loss caused by the risk of his contracting the disease having been increased. That would be a proportion of the injury caused by the disease, depending on the extent to which the risk had also been created by other causes. In Barker v Corus the House of Lords (Lord Rodger of Earlsferry dissenting) adopted the second explanation of what had happened in Fairchild. I believe that this summary of the position is essentially correct. The majority in Barker were persuaded that justice would best be served if the special approach adopted in Fairchild were applied in such a way as to render each defendant who had wrongfully exposed the claimant to asbestos dust severally liable for that proportion of the mesothelioma that represented the proportion of the wrongful exposure attributable to that defendant. This was achieved by holding that the liability of each defendant resulted from adding to the risk that the employee would contract mesothelioma. It did not result from an implication that each defendant had actually contributed to the cause of the disease. At the start of his speech at para 2 Lord Hoffmann drew the vital distinction between being liable for contributing to the cause of the disease and being liable for the creation of the risk of causing the disease: Is any defendant who is liable under the exception deemed to have caused the disease? On orthodox principles, all defendants who have actually caused the damage are jointly and severally liable. Or is the damage caused by a defendant in a Fairchild case the creation of a risk that the claimant will contract the disease? In that case, each defendant will be liable only for his aliquot contribution to the total risk of the claimant contracting the disease a risk which is known to have materialised. Lord Hoffmann went on to adopt the latter analysis as the basis of liability in Fairchild. At para 31 he held that the majority in Fairchild had not proceeded upon the fiction that a defendant who had created a material risk of mesothelioma was deemed to have caused or materially contributed to the contraction of the disease. The creation of a material risk of mesothelioma was sufficient for liability. At para 35 he advanced the thesis that the basis of liability was the wrongful creation of the risk or chance of causing the disease and that the damage that the defendant should be regarded as having caused was the creation of such risk or chance. Liability for the mesothelioma that developed should be apportioned according to the contribution that each defendant made to the risk that mesothelioma would be contracted. Lord Scott of Foscote and Lord Walker of Gestingthorpe expressly agreed with both Lord Hoffmanns conclusion that liability for the mesothelioma fell to be apportioned and with his reasons for so concluding. Lord Scott held at para 53 that it was essential to keep firmly in mind that liability in Fairchild was not imposed on any of the defendant employers on the ground that the employers breach of contract had caused the mesothelioma. That causative link had not been proved against any of them. It was imposed because each, by its breach of duty, had materially contributed to the risk that the employee would contract mesothelioma. At para 61 he emphasised that the Fairchild principle was not based on the fiction that each defendant had actually caused the eventual outcome. It was based on subjecting the victim to a material risk. Lord Walker, having stated that he was in full agreement with Lord Hoffmanns reasons went on at para 104 to make a statement that was inconsistent with them, this being to the same effect as the statement relied on by Mr Beloff see para 106 above. Lord Walker stated that the decision in Fairchild equated exposing the victim to the risk of injury with causing his injury. This was the same mistake as I made in Sienkiewicz see para 117 above. Had this been the case, each defendant would have been jointly and severally liable for the injury. Lord Walker went on to say, however, that the result in Fairchild was achieved, not by some fiction, but as an explicit variation of the ordinary requirement as to causation. At para 113 he stated that Fairchild was decided by the majority, not on the fictional basis that the defendants should be treated as having caused the victims damage, but on the factual basis that they had wrongfully exposed him to the risk of damage. Lady Hale did not adopt Lord Hoffmanns thesis that the creation of risk constituted the damage for which each defendant was liable. In general, however, she agreed with the majority. She held that in Fairchild, for the first time in our legal history defendants were made liable for damage even though they might not have caused it at all. It was not said that the defendants had caused or materially contributed to the harm. All that could be said was that each had contributed to the risk of harm. In these circumstances it was sensible and fair to apportion liability for the harm in proportion to the contribution that each had made to the risk of harm. Lord Rodger of Earlsferry vigorously dissented from the reasoning of the majority and from the result in so far as it apportioned liability. He observed at para 71 that the majority were not so much reinterpreting as rewriting the key decisions in McGhee and Fairchild. At para 85 he stated that the new analysis that the House was adopting would tend to maximise the inconsistencies in the law. I have some sympathy with the observations of Lord Rodger. It would, I think, have been possible for the House in Barker to have defined the special approach in Fairchild as one that treated contribution to risk as contribution to the causation of damage. The important fact is, however, that the majority did not do so. They were at pains to emphasise that the special approach was not based on the fiction that the defendants had contributed to causing the mesothelioma. Liability for a proportion of the mesothelioma resulted from contribution to the risk that mesothelioma would be caused and reflected the possibility that a defendant might have caused or contributed to the cause of the disease. This was no obiter expression of opinion. It formed the basis of the substantive decision that liability was severable and not joint. The special rule The special approach rendered each employer who had wrongfully exposed a mesothelioma victim to asbestos dust liable for a proportion of the mesothelioma without creating any inference or legal fiction that the employer in question had actually contributed to causing the disease. Section 3 of the Compensation Act altered the position by imposing joint and several liability on those who were only severally liable under the special approach. Did the special rule that resulted involve a different basis of liability to that which formed the basis of the special approach? This question is considered by Jonathan Morgan in his interesting Chapter 4 of Perspectives on Causation headed Causation, Politics and Law: The English and Scottish Asbestos Saga. At p 79 he poses the following question: Has Parliament, by implication, therefore also reversed Lord Hoffmanns principled reinterpretation of Fairchild? Is the nature of Fairchild liability now after all for causing mesothelioma and not increasing risk? Mr Morgan gives a negative answer to this question, expressing the view that Barker has altered the jurisprudential basis of the Fairchild liability irrevocably. I agree that section 3 of the Compensation Act did not alter the jurisprudential basis of the special approach laid down by the House of Lords in Fairchild and Barker. All that it did was to alter the effect of the special approach by making each defendant jointly and severally liable for the whole of the injury sustained. Section 3(1) provides that the section applies where (c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure [for which the defendant was responsible]or another exposure which caused the victim to become ill, and (d) the responsible person is liable in tort(whether by reason of having materially increased a risk or for any other reason). It is not possible to read section 3 as imposing a different basis of liability to that identified by the majority in Barker. The consequence of the special rule Having regard to its jurisprudential basis I cannot see how the employers can found upon the special rule as identifying the policy year or years in which a victims mesothelioma is initiated. The position is that it is impossible to prove on balance of probability when mesothelioma is initiated, or contracted, or sustained, giving each of those words the same meaning. The special rule does not fill the gap for it raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. Should this Court redefine the special rule in order to engage the EL policies? The special approach of the majority in Barker had the object of ensuring that employers who had wrongfully subjected their employees to asbestos dust should bear what the majority considered to be a fair share of responsibility for their wrongdoing. It does not seem likely that the majority gave consideration to the implications for the responsibility of EL insurers of the manner in which this object was achieved. Should this Court now redefine the special rule with the object of enabling claims to be brought under the EL policies? This would, I think, involve holding that the majority in Barker erred in their analysis and that the true basis of the special approach in Fairchild was that contribution to risk should be deemed to be contribution to causation. I would give a firm No to this question. The adoption of the special approach in Fairchild has provoked considerable criticism, both judicial and academic. An example of the former is to be found in the judgment of Lord Brown in Sienkiewicz. An example of the latter is Mr Morgans closely reasoned Chapter 4 of Perspectives on Causation. But the object of the special approach in Fairchild and Barker was at least to ensure that those who had breached the duties that they owed to their employees did not escape liability because of scientific uncertainty. It would be judicial law making of a different dimension to create a legal fiction as to the policy years in which cases of mesothelioma were initiated in order to render liable insurers who could not otherwise be shown to be liable. The Secretary of State has intervened in this appeal and has submitted that, should the claims of employees or their dependants not be met by insurers, they are likely to be a burden on the public purse. It is open to question whether this is a proper consideration, even when considering whether the special rule should be redefined for what are essentially reasons of policy. In any event it seems to me that the position is somewhat more complex than the Secretary of State suggests. The burden of claims in respect of mesothelioma on a scale that was never anticipated is reducing both employers and insurers to insolvency. If this Court were to redefine the special rule so as to impose liability for mesothelioma claims on EL insurers where it could not otherwise be made out, this would in many cases be at the expense of others with claims on the same insurers founded on facts and not legal fictions. The liabilities in respect of mesothelioma will increase the overall shortfall on the part of insurers and this is also likely to have implications for the public purse. So far as I am concerned, however, these considerations have little relevance. Even if there were a compelling case for contending that a means should be found to render EL insurers liable, my reaction would be that this was a matter for Parliament not the courts. It would be wrong in principle for this Court to depart from the reasoning of the majority in Barker for the sole purpose of imposing liability on EL insurers.

These appeals concern the obligations of insurance companies under various contracts of employers liability (EL) insurance. In particular, the appeals concern the scope of the insurers obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos. Mesothelioma has an unusually long gestation period, which can be in excess of 40 years between exposure to asbestos and manifestation of the disease. The insurers maintain that the EL policies only cover mesothelioma which manifested as a disease at some point during the relevant policy period. In contrast, the employers submit that the insurance policies respond to mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later. The usual rule in negligence cases is that the claimant must establish on the balance of probabilities that the defendants negligence caused his injury or disease. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 and Barker v Corus UK Ltd [2006] UKHL 20 the House of Lords developed an exception to this general principle in cases involving mesothelioma caused by exposure to asbestos. The effect of this special rule is that an employer is liable where exposure to asbestos contributed to the risk that the employee would suffer mesothelioma and where the employee in fact develops the disease. The insurers submit that the special rule in Fairchild/Barker is not applicable when deciding, for the purposes of an EL insurance policy, whether an employees mesothelioma was caused by exposure to asbestos during a particular policy year. At first instance Burton J held that the policies should all be interpreted as having a causation wording. He therefore held that the liability trigger under the EL policy was when the employee inhaled the asbestos and not the date when the malignant lesion developed. A majority of the Court of Appeal (Rix and Stanley Burnton LJJ) upheld the judge in relation to some of the EL insurance policies (particularly those covering disease contracted during the relevant insurance period); however they concluded that other policies (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. These appeals to the Supreme Court raise two issues: (i) On the correct construction of the EL policies, is mesothelioma sustained or contracted at the moment when the employee is wrongfully exposed to asbestos or at the moment when the disease subsequently manifests in the employees body? (ii) Does the special rule in Fairchild/Barker apply when determining whether, for the purposes of the EL policies, an employee sustained or contracted mesothelioma during a particular policy period? The Supreme Court dismisses the insurers appeal by a 4 1 majority; Lord Phillips dissenting on the second issue. Lord Mance gives the main judgment. To resolve the meaning of the EL policies it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more generally [19]. Several features point the way to the correct construction. First, the wordings of the policies on their face require the course of employment to be contemporaneous with the sustaining of the injury [20]. Second, the wordings demonstrate a close link between the actual employment undertaken during each period and the premium agreed by the parties for the risks undertaken by the insurers in respect of that period. Third, on the insurers case there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to disease or injury in another later period [24]. Fourth, on the insurers case employers would be vulnerable to any decision by the insurers not to renew the policy. A decision not to renew might arise from the employers complying with their duty to disclose past negligence upon any renewal. Employers who discovered that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease would have such a duty. The insurers could then simply refuse any renewal or further cover [25]. Fifth, the way most of the policies deal with extra territorial issues throws doubt on any suggestion that the wordings are so carefully chosen that a court should stick literally to whatever might be perceived as their natural meaning [28]. Section 1 of the Employers Liability Compulsory Insurance Act 1969 also points the way to the correct interpretation. This states that every employer shall insure, and maintain insuranceagainst liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment. In order to give proper effect to the protective purpose of that legislation, the Act requires insurance on a causation basis [47]. There is no difficulty in treating the word contracted as looking to the causation of a disease, rather than its development or manifestation. The word contracted used in conjunction with disease looks to the initiating or causative factor of the disease [49]. While the word sustained may initially appear to refer to the manifestation of an injury, the nature and underlying purpose of the EL insurances is one which looks to the initiation or causation of the accident or disease which injured the employee. Accordingly a disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself later [50]. In relation to the second issue, the question is whether the EL policies cover employers liability for mesothelioma arising under the special rule in Fairchild/Barker [71]. Under that rule the law accepts a weak or broad causal link between the employers negligence and the employees mesothelioma. When construing the EL policies the concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the Fairchild/Barker rule [74]. The purpose of the EL policies was to insure the employers against liability to their employees. Once it is held that the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies [88]. Accordingly, for the purposes of the EL policies, the negligent exposure of an employee to asbestos during the policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurers obligation to indemnify the employer [74]. Lord Phillips dissents on the second issue. The special approach developed in Fairchild/Barker raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. This conclusion is not affected by section 3 of the Compensation Act 2009, which did not alter the jurisprudential basis of the Fairchild/Barker approach [132] [133].

This appeal concerns the permissibility and in particular compatibility with European Union law and Human Rights Convention rights, of a procedure (conveniently described as a closed material procedure) whereby an applicant and his representatives may be excluded from certain aspects of employment tribunal proceedings on grounds of national security, and a special advocate may represent his interests so far as possible in relation to the aspects closed to him and his representatives. In the relevant employment tribunal proceedings, the appellant, Mr Kashif Tariq, complains that his security clearance as an immigration officer was withdrawn in circumstances involving direct or indirect discrimination on grounds of race and/or religion, and that this was contrary to the Race Relations Act 1976 and the Employment Equality (Religion or Belief) Regulations 2003 (SI 2003/1660). The Home Offices case is that there was no such discrimination, that the decisions taken in relation to Mr Tariq were taken for the purposes of safeguarding national security, and that the order for a closed material procedure made by the Employment Tribunal (on the Home Offices application) on 15 February 2008 was made justifiably and for the same protective purposes. Mr Tariqs challenge to the Employment Tribunals order for a closed material procedure was dismissed by the Employment Appeal Tribunal on 16 October 2009, UKEAT 168/09, [2010] ICR 223 and the Court of Appeal on 4 May 2010 [2010] EWCA Civ 462, [2010] ICR 1034, but it was declared (by the Employment Appeal Tribunals order dated 24 November 2009, upheld in the Court of Appeal) that article 6 of the European Convention on Human Rights requires [Mr Tariq] to be provided with the allegations being made against him in sufficient detail to enable him to give instructions to his legal team so that those allegations can be challenged effectively (a requirement which can conveniently be described as gisting), even if this put the Home Office in the invidious position of having to make difficult decisions about disclosure and whether or how a claim is to be defended: [2010] ICR 1034, para 50, per Maurice Kay LJ. The Home Office appeals to the Supreme Court against the latter conclusion, while Mr Tariq cross appeals against the conclusion that a closed material procedure was permissible. The factual background in more detail Mr Tariq started employment with the Home Office as an immigration officer on 21 April 2003, having received the necessary security clearance on 18 February 2003. On 19 August 2006 he was suspended from duty on basic pay, while consideration was given to the withdrawal of his security clearance, and on 20 December 2006 his clearance was withdrawn. His internal appeal against this decision was dismissed on 9 August 2007, and his further appeal to the Security Vetting Appeals Panel (SVAP) was unsuccessful in January 2011. The background to the Home Offices decisions to suspend and withdraw Mr Tariqs security clearance consists in the arrest of his brother and cousin on 10 August 2006 during a major counter terrorism investigation into a suspected plot to mount a terrorist attack on transatlantic flights. Mr Tariq's brother was subsequently released without charge. Mr Tariq's cousin, Tanvir Hussain, was convicted on 8 September 2008 of conspiracy to murder, having previously also pleaded guilty to two counts of conspiracy to cause explosions and to commit a public nuisance. He is now serving a sentence of life imprisonment. Inquiries were made at the time of the arrests to establish whether or not Mr Tariq was involved in any way with the plot or could be affected by it. No information suggested that Mr Tariq had himself been involved in any terrorism plot, but the Home Office (in grounds of resistance served in the Employment Tribunal proceedings on 6 August 2007 and amplified on 20 December 2007) states that it was concerned in August 2006 that [Mr Tariq] could be vulnerable to an approach to determine if terrorist suspects had been flagged to the authorities or to smuggle prohibited items airside and that its decision to withdraw security clearance in December 2006 was based on [his] close association with individuals suspected of involvement in plans to mount terrorist attacks and on its view that association with such individuals might make him vulnerable to attempts to exert undue influence on [him] to abuse his position. Mr Tariq commenced the employment tribunal proceedings claiming direct or indirect discrimination on grounds of race and/or religion on 15 March 2007. He stated at the outset that he had been advised that his suspension and the withdrawal of his security clearance were because of his perceived association with certain relatives or associates of relatives suspected of association with terrorist activities and the risk of their attempting to exert influence on him to abuse his position. He denied any such association or risk. On 10 July 2007 he provided what he said were (considering, he said, the extremely limited information as to the grounds for his treatment to that date given) the best further particulars possible to give pending disclosure by the Home Office. These particulars alleged, inter alia, that the Home Office had relied upon stereotypical assumptions about him and/or Muslims and/or individuals of Pakistani origin such as susceptibility to undue influence, coercion or brainwashing and had indirectly discriminatory security policies, procedures and methods of investigation. The Home Office in its grounds of resistance denied this and maintains, as stated, that it acted throughout to protect national security. The legislation The Race Relations Act 1976 provides: 1 Racial discrimination (1) A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if (a) on racial grounds he treats that other less favourably than he treats or would treat other persons; . (lA) A person also discriminates against another if, in any circumstances relevant for the purposes of any provision referred to in subsection (lB), he applies to that other a provision, criterion or practice which he applies or would apply equally to persons not of the same race or ethnic or national origins as that other, but (a) which puts or would put persons of the same race or ethnic or national origins as that other at a particular disadvantage when compared with other persons, (b) which puts or would put that other at that disadvantage, and (c) which he cannot show to be a proportionate means of achieving a legitimate aim. 42 Acts safeguarding national security Nothing in Parts II to IV shall render unlawful an act done for the purpose of safeguarding national security if the doing of the act was justified by that purpose. The Race Relations Act 1976 is the means by which the United Kingdom gives effect to its obligations under Council Directive 2000/43/EC of 29 June 2000 (the Race Directive) implementing the principle of equal treatment between persons irrespective of racial or ethnic origin. On 27 November 2000 Council Directive 2000/78/EC (the Employment Equality Directive) established a general framework for equal treatment in employment and occupation. This led to the making, under section 2 of the European Communities Act 1972, of the Employment Equality (Religion or Belief) Regulations 2003 (the Employment Equality Regulations), prohibiting discrimination on grounds of religion or belief and providing: 3.(1) For the purposes of these Regulations, a person (A) discriminates against another person (B) if (a) on grounds of religion or belief, A treats B less favourably than he treats or would treat other persons; or (b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same religion or belief as B, but (i) which puts or would put persons of the same religion or belief as B at a particular disadvantage when compared with other persons, (ii) which puts B at that disadvantage, and (iii) which A cannot show to be a proportionate means of achieving a legitimate aim. Exception for national security 24. Nothing in Part II or III shall render unlawful an act done for the purpose of safeguarding national security, if the doing of the act was justified by that purpose. The issues regarding closed material procedure in more detail Employment Tribunals are established under the Employment Tribunals Act 1996. Section 7 entitles the Secretary of State to make by regulations (employment tribunal procedure regulations) . such provision as appears to him to be necessary or expedient with respect to proceedings before employment tribunals. Section 10, which I set out in the annex to this judgment, specifically authorises the making in the interests of national security of regulations providing for a closed material procedure, either by direction of a minister or by order of the employment tribunal or judge, and for the appointment by the Attorney General in that context of a special advocate. The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861) contain in Schedules 1 and 2 provisions made under sections 7 and 10 of the Act. Schedule 1, headed the Employment Tribunals Rules of Procedure (the ET Procedure Rules), contains rule 54, set out in the annex, providing specifically for a closed material procedure where a minister so directs (rule 54(1)) or where the tribunal or employment judge concludes that such a procedure is appropriate and so orders (rule 54(2)). Schedule 2, headed the Employment Tribunals (National Security) Rules of Procedure (the ET National Security Rules), contains rules 8 and 10, also set out in the annex, providing for special advocates and reasons in national security proceedings. Regulation 16 provides that the rules in Schedule 1 apply to employment tribunal proceedings generally, but that such rules shall be modified in accordance with Schedule 2 wherever any power conferred on the minister, the tribunal or an employment judge by rule 54 of Schedule 1 is exercised. Regulation 2 of the 2004 Regulations contains definitions, again set out in the annex. Mr Tariqs cross appeal (a) general The power to give directions conferred on the minister by rule 54(1) has not been exercised in this case. The Supreme Court was told that it has never been exercised in any case. The probable reasons are not difficult to discern, bearing in mind the scope for challenge both by judicial review and, more fundamentally, under the Human Rights Act 1998 or, Mr Robin Allen QC also submits for Mr Tariq, European Union law. While the conferral of the power is expressly authorised by the 1996 Act, it is hard to see how it could be compatible with article 6 of the European Convention on Human Rights for a minister to have power to make such a direction to a judicial tribunal. Instead of giving any direction, the minister made an application to the tribunal, asking it to order a closed material procedure with a special advocate under the discretionary power conferred by rule 54(2). On 15 February 2008, the tribunal held that it was expedient in the interest of national security to make orders under rule 54 that the whole of the proceedings be in private, and directed that Mr Tariq and his representative should be excluded from part of the proceedings when closed evidence and/or documents were being considered, that the Tribunal would consider both open and closed documents and that the Home Office would make available the appropriate closed material to any special advocate appointed. It further stated that the terms so ordered would be reviewed at a later case management discussion. At a case management discussion held on 30 May 2008, in the presence of representatives of the parties and of Ms J Farbey of counsel nominated by the Attorney General to act as special advocate, the judge ordered that her role as special advocate should take effect and that she should proceed in discussions with Mr Tariq. Meanwhile, reasons for the tribunals decision on 15 February 2008 were outstanding. The minister, to whom the tribunal was required by rule 10 of the ET National Security Rules to submit such reasons in the first instance, directed that one paragraph be abridged and another omitted. As a result, an edited version, identifying the positions of the amendment and abridgement, was initially issued to Mr Tariq and his representatives on 15 October 2008. However, on 9 December 2008 the full reasons were released. One may speculate that this resulted from submissions made by the special advocate. The paragraphs amended and omitted do not, on their face, seem likely to impact on national security. This course of events offers therefore a cautionary message, but, quite possibly also, an indication of at least one purpose which a special advocate may serve. In the upshot, there is not now any ministerial order in effect under rule 10. Whatever objections may be made to a rule giving the executive power to direct the judiciary with regard to reasons do not therefore arise for consideration on this appeal. This appeal concerns an exercise by the Tribunal of its power under rule 54(2) of the ET Procedure Rules, read with rule 8 of the ET National Security Rules. (b) The European Union Directives On behalf of Mr Tariq, Mr Allen submits that rule 54(2) and rule 8 are contrary to European Union law and/or the European Human Rights Convention. These rules were made pursuant to the express statutory authority to make such rules conferred by section 10 of the Employment Tribunals Act 1996. Mr Allens first submission is that they are, none the less, in conflict with European legal principles governing discrimination, contained in the European Treaties and in the Race and Employment Equality Directives, to which the 1996 Act, the Race Relations Act 1976 and the Employment Equality Regulations must all be read, at least as far as possible, as being subject. Mr Allen notes in this connection a contrast between the two Directives. The Employment Equality Directive makes express reference to national security, providing in article 2(5): 5. This Directive shall be without prejudice to measures laid down by national law which, in a democratic society, are necessary for public security, for the maintenance of public order and the prevention of criminal offences, for the protection of health and for the protection of the rights and freedoms of others. There is no equivalent provision in the Race Directive. Mr Allen suggests that this may be because the Race Directive does not preclude discrimination on grounds of nationality: article 3(2). Mr Allen further notes that neither Directive makes express provision for closed hearings, and that the Court of Justice has on more than one occasion made clear that the European Treaties contain no general power for states to derogate from European law and the rights it confers on grounds of public safety or national defence, outside specific situations identified in Treaty articles, none of which applies here: Case 222/84 Johnston v Chief Constable of the Royal Ulster Constabulary [1987] QB 129; Case C 337/05 Commission of the European Communities v Italian Republic [2008] ECR I 2173. None of these points is, in my view, relevant in the present context. I agree with the reasoning and conclusions of Maurice Kay LJ in paras 12 to 22 of his judgment in the Court of Appeal: [2010] ICR 1034. The authorities cited by Mr Allen deal with derogation from principles of substantive law, here the rights not to be discriminated against conferred by the Directives. The legitimacy of closed hearings and of the use of a special advocate are matters of procedural law. Procedure is primarily a matter for national law. It is, however, a basic principle of European Union law that national law should provide effective legal protection, by establishing a system of legal remedies and procedures which ensure respect for the relevant right: Case C 312/93 Peterbroeck v Belgian State [1995] ECR I 4599; Case C 432/05 Unibet (London) Ltd v Justitie Kanslern [2007] ECR I 2271. In that respect, European Union law directs attention primarily to principles established under articles 5 and 6 of the European Convention on Human Rights as a guide to what constitutes effective legal protection. Mr Allen points out that the Directives both contain provisions (article 7(1) of the Race Directive and article 9 of the Employment Equality Directive), whereby: Member states shall ensure that judicial and/or administrative procedures, including where they deem it appropriate conciliation procedures, for the enforcement of obligations under this Directive are available to all persons who consider themselves wronged by failure to apply the principle of equal treatment to them, even after the relationship in which the discrimination is alleged to have occurred has ended. Further, by articles 8 and 10 respectively of these Directives: Member states shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment. Again, and as this wording contemplates, it is for each national judicial system to ensure an effective system of legal procedures enabling a claimant to establish facts from which it may be presumed that there has been direct or indirect discrimination. In the present case, Mr Allen has not suggested that Mr Tariq has not been able to do this. Mr Allen also submits that Mr Tariq could lose his claim by reason of section 42 of the Race Relations Act 1976 and/or regulation 24 of the Employment Equality Regulations on a basis which, by reason of the closed material procedure, would not be disclosed. Section 42 and regulation 24 are dealing with substantive law. If they were read and applied as excusing what would otherwise be unlawful discrimination, they might therefore be open to challenge under the principle of European Union law identified in para 14 above. But the present case is far from involving any such issue. First, the issue could only arise from a substantive decision, and the Tribunal is a long way from reaching such a decision. Second, it is far from clear that section 42 and regulation 24 are to be read as entitling a tribunal or court to excuse what would otherwise be unjustified discrimination on grounds of national security. The question would arise: if it would involve unjustified discrimination, how could the doing of the act be justified for the purpose of safeguarding national security? Third, the Home Offices dominant aim in the present proceedings is to show that there was no discrimination at all on any prohibited ground, but a rational and proportionate decision taken in the public interest. If the Employment Tribunal were at some future stage to find that there was discrimination on a prohibited ground, but that the effect of section 42 and/or regulation 24 was that such discrimination could none the less be regarded as justified as being for the purpose of safeguarding national security, the Tribunal would be obliged to identify this basis of decision, however generally, in open reasons, to enable its legitimacy under European Union law to be challenged. There is no reason to assume that the Tribunal, assisted as it would also be by a special advocate, would fail to do this. (c) Effective legal protection The question is therefore whether the closed material procedure authorised by United Kingdom law provides effective legal protection, by establishing a system of legal remedies and procedures to ensure respect for the relevant rights conferred by the Race Relations Act and the Employment Equality Regulations in implementation of the United Kingdoms obligations under the two Directives. Mr Allen relies upon the decisions of the Court of Justice in Joined Cases C 402/05 P and C 415/05 P Kadi v Council of the European Union and the General Court in Case T 85/09 Kadi v Commission of the European Union (Council of the European Union intervening). These two cases concerned the validity of the European Unions own measures, and the two European Courts were charged not merely with ascertaining and interpreting the relevant European legal principles applicable under the Treaties, but also with applying these to the particular measures and circumstances before them. In the former case [2009] AC 1225, the Court of Justice addressed Council Regulation 881/2002 which aimed to mirror within Europe a similar asset freezing regime to that mandated by Security Council Resolutions for all member states of the United Nations. The Regulation, in its Annex I, simply listed as persons whose assets were to be frozen persons whose names appeared on a list drawn up by the Security Councils Sanctions Committee, and no opportunity was given before or after its passing to such persons to mount any legal challenge to such listing at either the Security Council or the European level. The Court of Justice accepted that: 342 . with regard to a Community measure intended to give effect to a resolution adopted by the Security Council in connection with the fight against terrorism, overriding considerations to do with safety or the conduct of the international relations of the Community and of its Member States may militate against the communication of certain matters to the persons concerned and, therefore, against their being heard on those matters. It went on: 343 However, that does not mean, with regard to the principle of effective judicial protection, that restrictive measures such as those imposed by the contested regulation escape all review by the Community judicature once it has been claimed that the act laying them down concerns national security and terrorism. 344 In such a case, it is none the less the task of the Community judicature to apply, in the course of the judicial review it carries out, techniques which accommodate, on the one hand, legitimate security concerns about the nature and sources of information taken into account in the adoption of the act concerned and, on the other, the need to accord the individual a sufficient measure of procedural justice (see, to that effect, the judgment of the European Court of Human Rights in Chahal v United Kingdom (1996) 23 EHRR 413, para 131). The Regulation was annulled in respect of Mr Kadi and Al Barakaat (a Swedish foundation) because there had been no procedure for communicating any evidence or for any hearing of persons listed, so that such persons rights of defence and to an effective legal remedy were infringed. But the Court postponed the annulment for up to three months from 3 September 2008. The second Kadi case [2011] 1 CMLR 697 was a sequel. After the first case, the Commission sought and obtained from the Sanctions Committee a summary of its reasons for listing Mr Kadi, communicated that to him and received his comments on it on 10 November 2008. On 28 November 2008 the Commission by Commission Regulation (EC) No 1190/2008, made pursuant to a power in Regulation 881/2002 to amend Annex I to that Regulation, recited this course of events and purported on that basis to amend Annex I to reinsert Mr Kadi and Al Barakaat. Mr Kadi again successfully challenged this. The General Court held that his rights of defence had been observed only in the most formal and superficial sense, as the Commission in actual fact considered itself strictly bound by the Sanctions Committees findings and therefore at no time envisaged calling those findings into question in the light of the applicants observations (para 171). The General Court went on to say that the Commission, notwithstanding recitals in its Regulation, failed to take due account of the applicants comments (para 172) and that the procedure followed by the Commission, in response to the applicant's request, did not grant him even the most minimal access to the evidence against him. In actual fact, the applicant was refused such access despite his express request, whilst no balance was struck between his interests, on the one hand, and the need to protect the confidential nature of the information in question, on the other (see, in that regard, the judgment of the Court of Justice in Kadi, paras 342 to 344) (para 173). The General Court noted that this conclusion was consistent with the reasoning on the European Court of Human Rights in A v United Kingdom [2009] 49 EHRR 625 (para 176). Earlier in its judgment, at paras 146 147, the General Court said this about national security issues, with reference to its previous judgment in Case T 228/02 Organisation des Modjahedines du Peuple d'Iran v Council of the European Union [2006] ECR II 4665 (OMPI): 146 The General Court also noted in that regard, at para 156 of OMPI, that, although the European Court of Human Rights recognises that the use of confidential information may be necessary when national security is at stake, that does not mean, in that court's view, that national authorities are free from any review by the national courts simply because they state that the case concerns national security and terrorism (see the judgment of the European Court of Human Rights in Chahal v United Kingdom, para 131, and case law cited, and its judgment in calan v Turkey (2003) 37 EHRR 238, para 106 and case law cited). 147 The General Court added, at para 158 of OMPI, that it was not necessary for it to rule, in the action before it, on the separate question as to whether the applicant and/or its lawyers could be provided with the evidence and information alleged to be confidential, or whether they had to be provided only to the Court, in accordance with a procedure which remained to be defined so as to safeguard the public interests at issue whilst affording the party concerned a sufficient degree of judicial protection. The question identified by the General Court in para 147 did not arise for decision in either of the two Kadi cases. It is, however, clear from both Kadi cases that the Court of Justice will look for guidance in the jurisprudence of the European Court of Human Rights when deciding whether effective legal protection exists, and how any balance should be struck when a question arises whether civil procedures should be varied to reflect concerns relating to national security. A national court, faced with an issue of effective legal protection or, putting the same point in different terms, access to effective procedural justice, can be confident that both European courts, Luxembourg and Strasbourg, will have the same values and will expect and accept similar procedures. Article 6(2) of the Treaty on the European Union (The Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law) and the Charter of Fundamental Rights already point strongly in this direction. Assuming that the European Union will in due course formally subscribe to the European Convention on Human Rights, as contemplated by the Treaty amendments introduced under the Treaty of Lisbon, the expectation will receive still further reinforcement. In the present case, the Home Office applied for and obtained the Tribunals order for a closed material procedure in order to be able to defend itself against Mr Tariqs claim that the removal of his security clearance involved unlawful discrimination on grounds of race or religion. The case concerns a different subject matter from that of both Kadi cases, where freezing orders were in issue. The effect of freezing orders (made under United Kingdom legislation directly implementing the Security Councils Resolutions) was examined by the Supreme Court in A v HM Treasury (JUSTICE intervening) [2010] UKSC 2; [2010] 2 AC 534. Persons subject to such orders became effectively prisoners of the state and there was a devastating effect on them and their families: para 60. A v United Kingdom, to which the General Court in Kadi referred, also involved a different subject matter to the present, concerning, as it did, the detention of foreign nationals suspected of terrorist involvement. Rights said that: In A v United Kingdom 49 EHRR 695 the European Court of Human 216 The Court takes as its starting point that, as the national courts found and it has accepted, during the period of the applicants detention the activities and aims of the AlQaeda network had given rise to a public emergency threatening the life of the nation. It must therefore be borne in mind that at the relevant time there was considered to be an urgent need to protect the population of the United Kingdom from terrorist attack and, although the United Kingdom did not derogate from article 5(4), a strong public interest in obtaining information about AlQaeda and its associates and in maintaining the secrecy of the sources of such information (see also, right under article 5(4) in this connection, Fox, Campbell and Hartley (1991) 13 EHRR 157, para 39). 217 Balanced against these important public interests, however, was the applicants' to procedural fairness. Although the Court has found that, with the exception of the second and fourth applicants, the applicants detention did not fall within any of the categories listed in sub paragraphs (a) to (f) of article 5(1), it considers that the case law relating to judicial control over detention on remand is relevant, since in such cases also the reasonableness of the suspicion against the detained person is a sine qua non (see para 197 above). Moreover, in the circumstances of the present case, and in view of the dramatic impact of the lengthy and what appeared at that time to be indefinite deprivation of liberty on the applicants' fundamental rights, article 5(4) must import substantially the same fair trial guarantees as article 6(1) in its criminal aspect (Garcia Alva v Germany (2003) 37 EHRR 335, para 39, and see also see Chahal, cited above, paras 130 131). 218 Against this background, it was essential that as much information about the allegations and evidence against each applicant was disclosed as was possible without compromising national security or the safety of others. Where full disclosure was not possible, article 5(4) required that the difficulties this caused were counterbalanced in such a way that each applicant still had the possibility effectively to challenge the allegations against him. 219 The Court considers that SIAC, which was a fully independent court (see para 84 above) and which could examine all the relevant evidence, both closed and open, was best placed to ensure that no material was unnecessarily withheld from the detainee. In this connection, the special advocate could provide an important, additional safeguard through questioning the states witnesses on the need for secrecy and through making submissions to the judge regarding the case for additional disclosure. On the material before it, the Court has no basis to find that excessive and unjustified secrecy was employed in respect of any of the applicants' appeals or that there were not compelling reasons for the lack of disclosure in each case. 220 The Court further considers that the special advocate could perform an important role in counterbalancing the lack of full disclosure and the lack of a full, open, adversarial hearing by testing the evidence and putting arguments on behalf of the detainee during the closed hearings. However, the special advocate could not perform this function in any useful way unless the detainee was provided with sufficient information about the allegations against him to enable him to give effective instructions to the special advocate. While this question must be decided on a case by case basis, the Court observes generally that, where the evidence was to a large extent disclosed and the open material played the predominant role in the determination, it could not be said that the applicant was denied an opportunity effectively to challenge the reasonableness of the Secretary of State's belief and suspicions about him. In other cases, even where all or most of the underlying evidence remained undisclosed, if the allegations contained in the open material were sufficiently specific, it should have been possible for the applicant to provide his representatives and the special advocate with information with which to refute them, if such information existed, without his having to know the detail or sources of the evidence which formed the basis of the allegations. An example would be the allegation made against several of the applicants that they had attended a terrorist training camp at a stated location between stated dates; given the precise nature of the allegation, it would have been possible for the applicant to provide the special advocate with exonerating evidence, for example of an alibi or of an alternative explanation for his presence there, sufficient to permit the advocate effectively to challenge the allegation. Where, however, the open material consisted purely of general assertions and SIAC's decision to uphold the certification and maintain the detention was based solely or to a decisive degree on closed material, the procedural requirements of article 5(4) would not be satisfied. In Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28; [2010] 2 AC 269, the House of Lords applied the reasoning in para 220 of A v United Kingdom when concluding that a closed material procedure involving a special advocate could be legitimate in the context of the imposition of a control order on a suspected terrorist, so long as the case was not based solely or to a decisive extent on closed material. Mr Allen submits that the fundamental nature of equality rights makes it just as critical that Mr Tariq should receive the fullest procedural rights in this case as it was for Mr Kadi or A or AF to have such rights. However, the reasoning in para 217 of the European Court of Human Rights judgment in A v United Kingdom emphasises the context of that decision, the liberty of the individual. Detention, control orders and freezing orders impinge directly on personal freedom and liberty in a way to which Mr Tariq cannot be said to be exposed. In R(AHK) v Secretary of State for the Home Department (Practice Note) [2009] EWCA Civ 287; [2009] 1 WLR 2049, a claim for judicial review of the refusal of an application for British citizenship, the Court of Appeal distinguished A v United Kingdom on the ground that it was focusing on detention. In my opinion, it was justified in making this distinction. An applicant for British citizenship has, of course, an important interest in the appropriate outcome of his or her application. Mr Tariq also has an important interest in not being discriminated against which is entitled to appropriate protection; and this is so although success in establishing discrimination would be measured in damages, rather than by way of restoration of his security clearance (now definitively withdrawn) or of his position as an immigration officer. But the balancing exercise called for in para 217 of the European Courts judgment in A v United Kingdom depends on the nature and weight of the circumstances on each side, and cases where the state is seeking to impose on the individual actual or virtual imprisonment are in a different category to the present, where an individual is seeking to pursue a civil claim for discrimination against the state which is seeking to defend itself. That the outcome of the balancing exercise may differ with the circumstances is confirmed by three decisions of the European Commission and Court of Human Rights: Leander v Sweden (1987) 9 EHRR 433, Esbester v United Kingdom (1993) 18 EHRR CD72 and Kennedy v United Kingdom (Application No 26839/05) (unreported) 18 May 2010. In Leander, the applicant had been refused permanent employment as museum technician with the Naval Museum, which was adjacent to the Karlskrona Naval Base in which the Museum had storage rooms and other objects to which he would need access. The refusal was on account of secret information, contained in an annex compiled by the police, which was alleged to make him a security risk and to which he was refused access. He claimed that there had been breaches of, inter alia, articles 8 and 13 of the Convention. The Court did not accept this. Article 8 provides that everyone has the right to respect for his private life, and that there shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or other specified interests. As to article 8, the Court held that, although there was adverse interference with Mr Leanders private life through the consequences for his access to certain sensitive posts (para 59) and although he was refused any possibility of challenging the correctness of the information concerning him (para 61), the system for collecting and using the secret information contained a number of internal safeguards (para 62) and it could not be concluded that the interference involved in the non communication of the information to Mr Leander was not necessary in a democratic society in the interests of national security, as it is the very absence of such communication which, at least partly, ensures the efficacy of the personnel control procedure (para 66). Article 13 provides that everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority. As to article 13, the Court in Leander held by a majority (4 to 3) that an effective remedy under article 13 must mean a remedy that is as effective as can be, having regard to the restricted scope for recourse inherent in any system of secret surveillance for the protection of national security (para 84), and that, even if the procedure of complaint to the Government (which Mr Leander had followed and which had led to the Cabinet rejecting his complaint) were not considered sufficient, the aggregate of that and the other remedies of complaint to the Swedish Parliamentary Ombudsman and Chancellor of Justice (which he could also have pursued, although their views would only have been advisory) satisfied the conditions of article 13 (para 84). In Esbester 18 EHRR CD72 the Commission was again concerned with a refusal to employ, in this case as an administrative officer with the Central Office of Information (COI). The COI having offered to employ Mr Esbester subject to the satisfactory completion of our inquiries ., gave as its reasons for refusal simply that having completed our inquiries . we are unable to offer you an appointment. Mr Esbester claimed infringement of articles 8 and 13, maintaining that it was likely that the intelligence services had in the course of negative vetting procedures obtained and relied upon information about his private life, which he had had no opportunity to refute. He also alleged that there was inadequate legal regulation regarding the gathering of such information, and that the Security Service Tribunal responsible for investigating complaints gave inadequate protection and was prevented from giving reasons for its decisions. The Commission accepted, following Leander, that security vetting based on information about a persons private life constitutes interference within article 8, and it accepted, following Klass v Federal Republic of Germany (1978) 2 EHRR 214 and Malone v United Kingdom (1985) 7 EHRR 14 that the existence in the United Kingdom of a system for secret surveillance for vetting and the circumstances giving rise to the refusal to employ Mr Esbester gave rise to an inference that such interference had taken place. But it rejected Mr Esbesters complaints as manifestly unfounded. In finding the United Kingdoms system to be in accordance with the law, the Commission noted that the Court had held in Leander that the requirement of foreseeability in the special context of employment vetting in sectors affecting national security cannot be the same as in many other fields. In finding that the system was necessary in a democratic society, the Commission said, again with reference to Leander, that regard must also be had in this context to the margin of appreciation of the respondent state which in the area of assessing the requirements of and means of pursuing interests of national security has been held by the Court to be wide. In considering whether there existed adequate and effective guarantees against abuse, as required by the Courts decision in Klass, the Commission noted that the term national security was not amenable to exhaustive definition, and that, as regards the lack of reasons for the decisions of the Tribunal, the Court in Klass, when considering a similar problem, had found that the state could legitimately fear that the efficacy of surveillance systems might be jeopardised if information is divulged to the person concerned. The Commission concluded its discussion of article 8 by saying that In the absence of any evidence or indication that the system is not functioning as required by domestic law, the Commission finds that the framework of safeguards achieves a compromise between the requirements of defending democratic society and the rights of the individual which is compatible with the provisions of the Convention. Consequently it concludes that the interference in the present case was necessary in a democratic society in the interests of national security. As to article 13, the Commission held that the complaint of lack of an effective remedy failed in the absence of any arguable claim for breach of article 8. In Kennedy v United Kingdom decided by its Fourth Section on 18 May 2010, the Court was concerned with a claim that there had been breaches of articles 6 (the right to a fair trial in the determination of civil rights and obligations), 8 and 13 in circumstances where the claimants requests to MI5 and GCHQ under the Data Protection Act 1998 to discover whether information about him was being processed had been refused on the grounds of national security. Complaints about such refusals to the Investigatory Powers Tribunal (IPT) chaired by Lord Justice Mummery were examined in private. They concluded with the IPT simply notifying Mr Kennedy that no determination had been made in his favour in respect of his complaints. This meant either that there had been no interception or that any interception which took place was lawful (para 20). As to article 8, the Court held that the domestic law, practice and safeguards relating to surveillance satisfied the conditions of that article. It referred to, inter alia, Leander v Sweden as establishing that the requirement that the consequences of the domestic law must be foreseeable, before any interference could be said to be in accordance with the law under article 8(2), cannot be the same in the context of interception of communications as in many other fields (paras 151 152). As to article 6, the Court in Kennedy found it unnecessary to decide whether this article applies to proceedings concerning a decision to put someone under surveillance, because it concluded that, assuming it does, the IPTs rules of procedure complied with the requirements of article 6(1) (para 179). The parties respective cases appear from the following paragraphs of the Courts judgment: 181. The applicant submitted that even where national security was at stake, a domestic court could not infringe the fair hearing principle in a blanket and uncritical manner. He argued that less restrictive measures were available to achieve the aim pursued, including arrangements to protect witnesses' identities, disclosure of documents with redactions approved by the IPT, provision of a summary of particularly sensitive material under the supervision of the IPT and appointment of special advocates to whom disclosure of sensitive material could be made. He referred to a recent report on secret evidence published in June 2009 by the non governmental organisation, JUSTICE, which called for the strengthening of disclosure procedures and increased transparency in court proceedings. 182. The Government emphasised that even where article 6(1) applied to a field falling within the traditional sphere of public law, this did not in itself determine how the various guarantees of article 6 should be applied to such disputes (citing Vilho Eskelinen v Finland (2007) 45 EHRR 993, para 64). The obligation to read the Convention as a whole meant that the scope of the article 6 guarantees in such a case should be in harmony with the Court's approach to judicial control under article 8. The Government argued that the overarching consideration was that an individual could not be notified of interception measures while interception was ongoing or where notification would jeopardise the capabilities or operations of intercepting agencies. They therefore disputed that the less restrictive measures proposed by the applicant were appropriate. They noted that protection of witnesses' identities would not assist in keeping secret whether interception had occurred. Nor would disclosure of redacted documents or summaries of sensitive material. Further, unless they were appointed in every case, the appointment of special advocates would also allow a complainant to draw inferences about whether his communications had been intercepted. 183. The Government argued that the procedure before the IPT offered as fair a procedure as could be achieved in the context of secret surveillance powers. In particular, a complainant did not have to overcome any evidential burden to apply to the IPT and any legal issues could be determined in a public judgment after an inter partes hearing. Further, the IPT had full powers to obtain any material it considered necessary from relevant bodies and could call upon the assistance of the Commissioner. It could appoint an advocate to assist it at closed hearings. Finally, in the event that the complainant was successful, a reasoned decision would be provided. The Court, in holding that there had been no violation of article 6 or 13 in Kennedy, substantially aligned itself with the United Kingdom Governments position particularly in so far as it endorsed in relation to the concept of a fair trial under article 6 the relevance of similar considerations to those taken into account, previously and in Kennedy itself, when applying articles 8 and 13. It held: 184. The Court reiterates that according to the principle of equality of arms, as one of the features of the wider concept of a fair trial, each party must be afforded a reasonable opportunity to present his case under conditions that do not place him at a substantial disadvantage vis a vis his opponent . The Court has held none the less that, even in proceedings under article 6 for the determination of guilt on criminal charges, there may be restrictions on the right to a fully adversarial procedure where strictly necessary in the light of a strong countervailing public interest, such as national security, the need to keep secret certain police methods of investigation or the protection of the fundamental rights of another person. There will not be a fair trial, however, unless any difficulties caused to the defendant by a limitation on his rights are sufficiently counterbalanced by the procedures followed by the judicial authorities (see, for example, Doorson v The Netherlands (1996) 22 EHRR 330, para 70; Jasper v United Kingdom (2000) 30 EHRR 441, paras 51 to 53; and A v United Kingdom (2009) 49 EHRR 625, para 205). A similar approach applies in the context of civil proceedings. 185. The Court notes that the IPT, in its preliminary ruling of 23 January 2003, considered the applicant's complaints regarding the compliance of the Rules with article 6(1). It found that, with the exception of rule 9(6) which required all oral hearings to be held in private, the Rules challenged by the applicant were proportionate and necessary, with special regard to the need to preserve the Government's neither confirm nor deny policy 186. At the outset, the Court emphasises that the proceedings related to secret surveillance measures and that there was therefore a need to keep secret sensitive and confidential information. In the Court's view, this consideration justifies restrictions in the IPT proceedings. The question is whether the restrictions, taken as a whole, were disproportionate or impaired the very essence of the applicant's right to a fair trial. 187. In respect of the rules limiting disclosure, the Court recalls that the entitlement to disclosure of relevant evidence is not an absolute right. The interests of national security or the need to keep secret methods of investigation of crime must be weighed against the general right to adversarial proceedings (see, mutatis mutandis, Edwards and Lewis v United Kingdom (2005) 40 EHRR 593, para 46). The Court notes that the prohibition on disclosure set out in rule 6(2) admits of exceptions, set out in rules 6(3) and (4). Accordingly, the prohibition is not an absolute one. The Court further observes that documents submitted to the IPT in respect of a specific complaint, as well as details of any witnesses who have provided evidence, are likely to be highly sensitive, particularly when viewed in light of the Government's neither confirm nor deny policy. The Court agrees with the Government that, in the circumstances, it was not possible to disclose redacted documents or to appoint special advocates as these measures would not have achieved the aim of preserving the secrecy of whether any interception had taken place. It is also relevant that where the IPT finds in the applicant's favour, it can exercise its discretion to disclose such documents and information under rule 6(4) . 188. As regards limitations on oral and public hearings, the Court recalls, first, that the obligation to hold a hearing is not absolute. There may be proceedings in which an oral hearing is not required and where the courts may fairly and reasonably decide the case on the basis of the parties' submissions and other written materials. The character of the circumstances that may justify dispensing with an oral hearing essentially comes down to the nature of the issues to be decided by the competent national court (see Jussila v Finland (2006) 45 EHRR 900, paras 41 to 42). The Court notes that rule 9(2) provides that oral hearings are within the IPT's discretion and it is clear that there is nothing to prevent the IPT from holding an oral hearing where it considers that such a hearing would assist its examination of the case. 189. Concerning the provision of reasons, the Court emphasises that the extent to which the duty to give reasons applies may vary according to the nature of the decision and must be determined in the light of the circumstances of the case (see Ruiz Torija v Spain (1994) 19 EHRR 553, para 29). In the context of the IPT's proceedings, the Court considers that the "neither confirm nor deny" policy of the Government could be circumvented if an application to the IPT resulted in a complainant being advised whether interception had taken place. In the circumstances, it is sufficient that an applicant be advised that no determination has been in his favour. The Court further notes in this regard that, in the event that a complaint is successful, the complainant is entitled to have information regarding the findings of fact in his case . 190. In light of the above considerations, the Court considers that the restrictions on the procedure before the IPT did not violate the applicant's right to a fair trial. In reaching this conclusion, the Court emphasises the breadth of access to the IPT enjoyed by those complaining about interception within the United Kingdom and the absence of any evidential burden to be overcome in order to lodge an application with the IPT. In order to ensure the efficacy of the secret surveillance regime, and bearing in mind the importance of such measures to the fight against terrorism and serious crime, the Court considers that the restrictions on the applicant's rights in the context of the proceedings before the IPT were both necessary and proportionate and did not impair the very essence of the applicant's article 6 rights. As regards article 13, the Court held that the IPT offered to the applicant an effective remedy insofar as his complaint was directed towards the alleged interception of his communications and, in respect of the applicants general complaint under article 8, it reiterated its case law to the effect that article 13 does not require the law to provide an effective remedy where the alleged violation arises from primary legislation, citing in this respect also Leander v United Kingdom 9 EHRR 433. These three cases Leander, Esbester and Kennedy establish that the demands of national security may necessitate and under European Convention law justify a system for handling and determining complaints under which an applicant is, for reasons of national security, unable to know the secret material by reference to which his or her complaint is determined. The critical questions under the Convention are whether the system is necessary and whether it contains sufficient safeguards. But, subject to satisfactory answers on these questions, national security considerations may justify a closed material procedure, closed evidence (even without use of a special advocate) and, furthermore, (as in Kennedy itself) a blanket decision leaving the precise basis of determination unclear. There is however a further decision, even more recent than Kennedy, on which Mr Allen relies in an opposite sense. That is Uukauskas v Lithuania (Application No 16965/04) decided by the Second Section of the Court on 6 July 2010. The applicant had a licence to keep a pistol and hunting rifle. His request for a licence for another kind of firearm was refused and his existing licence was withdrawn, after his listing by the police in an operational records file maintained by the police to hold data for law enforcement bodies obtained during operational activities. He instituted proceedings challenging his listing, and the court, after examining classified material submitted by the police without disclosure to the applicant, upheld the listing. He complained to the European Court of Human Rights on the basis that there had been a breach of article 6(1). The Court said (para 48): The Court is not insensitive to the goals which the Lithuanian law enforcement authorities pursued through their operational activities. Likewise, the Court shares the Government's view that documents which constitute state secrets may only be disclosed to persons who possess the appropriate authorisation. And yet the Court notes that Lithuanian law and judicial practice provide that such information may not be used as evidence in court against a person unless it has been declassified, and that it may not be the only evidence on which a court bases its decision (see paras 20 22 above). It went on to indicate that the file was the only evidence of the applicants alleged danger to society, that he had repeatedly asked for its disclosure to him, even in part, and that, without it, he had no possibility of being apprised of the evidence against him or of being able to respond to it (paras 50 51). The Court concluded (para 51): In conclusion, therefore, the Court finds that the decision making procedure did not comply with the requirements of adversarial proceedings or equality of arms, and did not incorporate adequate safeguards to protect the interests of the applicant. It follows that there has been a violation of article 6(1) in the present case. The case has the special feature that the procedure adopted was contrary to Lithuanian law. Quite probably for this reason, no reference was made to any of the decisions considered in paras 28 to 36 of this judgment. There was evidently also no procedure under Lithuanian law for the use of a special advocate to consider closed material: the choice lay between declassification and no use of the material at all. The decision is therefore very far from the present, and does not offer assistance on the issues which arise on this appeal. (d) Necessity for a closed material procedure in this case In the present case, Mr Allen submits that no necessity is shown for a closed material procedure. He submits that the rule of law and the maintenance of the modern democratic state [will] not [be] imperilled if the Home Office loses this case for want of advancing a secret case. In other words, the worst that may happen is that the Home Office has to pay an unmeritorious claim. On this basis, Mr Allen distinguishes control order cases such as AF (No 3), in which it could be said that national security would be directly imperilled if secret evidence could not be used to justify imposing a control order. This distinction would positively encourage unmeritorious claims; and it would on any view mean that the government could only operate a security vetting system on pain of having to accept or pay all claims for discrimination which appeared sufficiently arguable to avoid being dismissed as abusive. The only other possibility is that a court might, following the Court of Appeal decision in Carnduff v Rock [2001] EWCA Civ 680, [2001] 1 WLR 1786, determine that, if the national security material could not be deployed in defence, the claim might not be fairly justiciable at all. Laws LJ said of this situation in Carnduff (para 36) that . a case which can only be justly tried if one side holds up its hands cannot, in truth, be justly tried at all. Under that possibility, it would be Mr Tariqs case which would fail in limine. Neither of these possibilities is one which the law should readily contemplate. In the penal context, an accused is presumed innocent until proved guilty; there is a public interest in the trial of suspects before a court, but it is better that the state should forego prosecution than that there should be any risk of an innocent person being found guilty through inability to respond to the full case against them. These imperatives do not operate in quite the same way in a civil context like the present, where the state may not be directly involved as a party at all. The rule of law must, so far as possible, stand for the objective resolution of civil disputes on their merits by a tribunal or court which has before it material enabling it to do this. In considering how this may be achieved, if a defendant can only defend itself by relying on material the disclosure of which would damage national security, a balance may have to be struck between the interests of claimant and defendant in a civil context. Mr Allens submission also involves anomalies. The Leander, Esbester and Kennedy cases demonstrate that, had Mr Tariq been claiming that the decision to suspend or remove security clearance was unjustified on its merits, he could not have complained about the use of a closed material procedure. Yet, on Mr Allens submission, all such a claimant would (presumably) have to do would be to claim damages, rather than any other relief. The Home Office could still only defend the claim by disclosing material contrary to the national interest; but, on Mr Allens case, no problem arises: the Home Office would not have to damage the national interest by making disclosure; instead, it could simply admit liability or defend fruitlessly and lose for want of being able to deploy the material. I cannot think that that is the law, in Strasbourg or domestically. (e) The acceptability of a special advocate procedure I do not therefore consider that a closed material procedure is in principle inconsistent with the right to an effective remedy in respect of alleged discrimination or with the Human Rights Convention. But there are further strings to Mr Allens case, which call for closer examination of the actual procedure, in particular the use of a special advocate. A special advocate procedure has been accepted as potentially useful in both United Kingdom and Strasbourg case law. Thus, in A v United Kingdom, addressing the issue of detention of terrorist suspects without trial, the Court of Human Rights said (para 220): The Court further considers that the special advocate could perform an important role in counterbalancing the lack of full disclosure and the lack of a full, open, adversarial hearing by testing the evidence and putting arguments on behalf of the detainee during the closed hearings. However, the special advocate could not perform this function in any useful way unless the detainee was provided with sufficient information about the allegations against him to enable him to give effective instructions to the special advocate. The Court went on: While this question must be decided on a case by case basis, the Court observes generally that, where the evidence was to a large extent disclosed and the open material played the predominant role in the determination, it could not be said that the applicant was denied an opportunity effectively to challenge the reasonableness of the Secretary of State's belief and suspicions about him. In other cases, even where all or most of the underlying evidence remained undisclosed, if the allegations contained in the open material were sufficiently specific, it should have been possible for the applicant to provide his representatives and the special advocate with information with which to refute them, if such information existed, without his having to know the detail or sources of the evidence which formed the basis of the allegations. It concluded by saying that where the open material consisted of general assertions and the decision to maintain the detention was based solely or to a decisive degree on closed material, the procedural requirements of article 5(4) would not be satisfied. Domestically, the House of Lords in both Secretary of State for the Home Department v MB [2007] UKHL 46; [2008] AC 440 and Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269 accepted a special advocate procedure, while endorsing in AF (No 3) the applicability, in the context of control orders, of the approach taken in A v United Kingdom. Mr Allen draws attention to a report of the Joint Committee on Human Rights of the Houses of Lords and Commons on Counter Terrorism Policy and Human Rights (Session 2006 2007) (HL Paper 157, HC 394), published 30 July 2007, which precedes the cases mentioned in the previous paragraph. The Committee was addressing the use of special advocates in, in particular, control order proceedings, but it also heard evidence from four special advocates (including Ms Farbey who acts in this case), which ranged more widely. It identified a number of concerns. These included, first, the overriding duty to which it saw both SIAC and a court as being subject, to ensure that material was not disclosed contrary to the public interest, in other words its inability to balance the interests of justice to the individual against the public interest in non disclosure (paras 196 and 199). It was also concerned by, secondly, the difficulties presented if closed material was not gisted (paras 195 and 199) and, thirdly, the inflexibility of the prohibition on communication between special advocates and the person concerned or his or her legal representatives, once the special advocate had seen the closed material (paras 203 and 205). The first of these concerns is covered and resolved by case law subsequent to the Joint Committees Report. Under rule 54(2) the employment tribunal or judge has a discretion. This is subject to rule 54(4), according to which a tribunal or judge, when exercising its or his functions, shall ensure that information is not disclosed contrary to the interests of national security. But the tribunal or judge is subject to the overriding objective to deal with cases justly under regulation 3 of the Employment Procedure Regulations, and, most importantly also, obliged under section 3 of the Human Rights Act 1996 to interpret primary and secondary legislation in a way which is compatible with Convention rights. In Secretary of State for the Home Department v MB [2008] AC 440 (decided 31 October 2007), the House of Lords held that paragraph 4(3)(d) of the Prevention of Terrorism Act 2005 (the terms of which parallel those of rule 54(2)) should be read and given effect except where to do so would be incompatible with the right . to a fair trial (para 72, per Lady Hale; and see paras 84 and 92 per Lord Carswell and Lord Brown). The result was that, when and if the court did not consider that material could safely remain closed, the Secretary of State had a choice: either to disclose to the person concerned, or to withdraw reliance on the material. The House followed and applied this reasoning in Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269, when deciding that persons subject to control orders must be told the gist of the case against them. Applying it in the context of the present secondary legislation in rule 54(2), it means that, even if disclosure of material to the person concerned might involve some potential damage to national security, an employment tribunal or court might, weighing the interests of justice, conclude that either the state should make such disclosure, not merely to the special advocate but also to the person concerned, or it should withdraw any reliance on the material. Likewise, in relation to the third concern, it is a matter of discretion how far such contact is permitted, and the tribunal or judge can and should exercise such discretion flexibly and after balancing the competing interests. The second concern involves consideration of the case law and issue discussed in paras 28 to 37 above and 63 to 68 below. Mr Allen submits, first, that, despite the general endorsement of its potential appropriateness in these cases, the special advocate procedure involves flaws undermining its acceptability; and, secondly, that, even if the special advocate procedure is otherwise acceptable, this can only be on the basis of disclosure of the substance of the Home Offices case (gisting) in respect of Mr Tariq. Since the Court of Appeal accepted this second submission, it arises for consideration as a result of the Home Offices cross appeal. The flaws which Mr Allen identifies relate to the special advocates role and powers and the lack of guidance as to their exercise or supervision. These are matters of detail which he submits have gone largely and unjustifiably without scrutiny in previous cases. As to role, Mr Allen takes issue at the outset with the appointment of special advocates by the Attorney General who is the governments principal legal adviser. This is a point which was addressed and is the subject of previous authority in the form of the House of Lords decision in R v H [2004] UKHL 3; [2004] 2 AC 134, where the suitability of the Attorney General to act in this respect had been questioned in the courts below. Lord Bingham giving the unanimous opinion of the House said (para 46): In our opinion such doubt is misplaced. It is very well established that when exercising a range of functions the Attorney General acts not as a minister of the Crown (although he is of course such) and not as the public officer with overall responsibility for the conduct of prosecutions, but as an independent, unpartisan guardian of the public interest in the administration of justice: see Halsbury's Laws of England, 4th ed, vol 44(1) (1995), para 1344; Edwards, The Law Officers of the Crown (1964), pp ix, 286, 301 302. It is in that capacity alone that he approves the list of counsel judged suitable to act as special advocates or, now, special counsel, as when, at the invitation of a court, he appoints an amicus curiae. Counsel roundly acknowledged the complete integrity shown by successive holders of the office in exercising this role, and no plausible alternative procedure was suggested. It would perhaps allay any conceivable ground of doubt, however ill founded, if the Attorney General were to seek external approval of his list of eligible advocates by an appropriate professional body or bodies, but such approval is not in current circumstances essential to the acceptability of the procedure. Special advocates are appointed from the independent bar or solicitor advocates on the basis of open competition, and are selected for inclusion on the panel on the basis of their abilities. Mr Tariq was able to make representations as to the choice of his special advocate, in accordance with para 98 of the Treasury Solicitors Special Advocates Guide, Special Advocates A Guide to the Role of Special Advocates and the Special Advocates Support Office (SASO). His suggested choice was appointed. Para 88 of the Special Advocates Guide further makes clear that: The role of the Attorney General (or Solicitor General, acting in his place by virtue of section 1 Law Officers Act 1997) in appointing a special advocate is purely formal. No 'instructions' (other than in the purely formal sense) will come from the Law Officers to special advocates indicating any particular way that the case in which the special advocate is instructed is to be argued. That is a matter for special advocates and the appellant, to the extent that the appellant engages with the special advocates. Mr Allens first point on role is therefore one I reject. Mr Allen next submits that special advocates are subject to a conflict of interest which would be prohibited in private litigation. This is said to arise from the fact that they are supported by a unit (SASO) which is located within the Treasury Solicitors Department. It is not disputed (or disputable) that legal and administrative support is necessary for a special advocate procedure to work; and it is unclear as to where else such support might or should be located. The submission is simply that there is an impermissible conflict of interest. Reliance is placed on the Solicitors Code of Conduct 2007. Rule 3 precludes a solicitor from acting (without informed consent) where there is a conflict of interests defined as existing where, inter alia, the solicitor or his firm owes separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict. Mr Allen further submits that there is no sufficient Chinese wall between SASO and the remainder of the Treasury Solicitors Office to enable reliance on that possibility, which was discussed in the House of Lords in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222. In my opinion, these objections also fail. As to the former, the Treasury Solicitor does not have two clients and is not in breach of the professional code. The special advocate is an independent (security cleared) member of the bar or solicitor advocate, who is not professionally engaged by or on behalf of Mr Tariq, though he or she is charged to represent Mr Tariqs interests. As the Special Advocates Guide states (para 113): Actual conflicts of interest in the usual sense do not arise, since a special advocate owes no duty to the person whose interests he represents. However, a special advocate should be careful to ensure that no situation arises in which there could be any perception of anything other than absolute independence on his part. The Guide then reminds special advocates of the need for care to avoid any perceived conflict of interest when undertaking the role as well as in the future. SASO, which supports special advocates, operates for all practical purposes as a separate unit, with an established Chinese wall arrangement dividing it from the rest of the Treasury Solicitors Office. Maurice Kay LJ set out the position (para 30): SASO was set up in 2006 in response to the recommendation of the Constitutional Affairs Select Committee in its report on the operation of the Special Immigration Appeals Commission and use of SAs [special advocates] (7th report, session 2004 2005, 3 April 2005). The functions of SASO are described in Special Advocates A Guide to the Role of Special Advocates and the Special Advocates' Support Office, which is published on the Treasury Solicitor's Department's website. It is SASO that provides an SA with formal instructions. It also provides legal and administrative support to SAs and acts as the librarian of closed case law for them. Although formal instructions originate with SASO, it has no input into decisions such as whether to appeal a closed adverse judgment or to open part of a closed judgment. Such matters are for the independent judgment of the SA alone. Although SASO is physically located within the premises of the Treasury Solicitor at One Kemble Street, it has an established Chinese wall arrangement and is for all practical purposes a separate entity. It comprises five lawyers and three administrators. Four lawyers and two administrators form the SASO (closed) team, the remaining lawyer and administrator forming the SASO (open) team. The open team does not have security clearance. It alone communicates with the litigant's open representatives. Although other relevant litigation teams within the office of the Treasury Solicitor are able to share their facilities, this is not so in relation to SASO's resources and facilities. It has completely separate document handling, communication, storage and technology facilities. The four lawyers who carry out casework on cases in which the SAs are instructed do not carry out any work for any other part of the Treasury Solicitor's office. The fifth lawyer is at Grade 6 level. He does not have his own casework in relation to cases involving SAs. His role is more supervisory and he has a wider line management role which extends to the general private law litigation team. He may report to the Attorney General but only in relation to open issues in matters where SAs are instructed. In addition, in order to protect the independence of the SASO team, there are conflict checks to ensure that other members of the private law team do not act in cases which are in any way relevant to SASO. Mr Allen challenges the adequacy of this system. The information about its operation based on the Special Advocates Guide was amplified by a Home Office note produced during the Court of Appeal hearing. Mr Tariq invites scepticism about information provided in the context of litigation in which, he suggests, the Treasury Solicitor has an interest in the status quo. The information that SASO operates on a Chinese wall basis with the Treasury Solicitor teams who represent the Government in cases in which special advocates appear is however contained in the Special Advocates Guide (para 87). The arrangements described in both documents evidence a serious intention to achieve such a separation, and there is no reason to doubt their genuineness or efficacy. Significantly, as Maurice Kay LJ indicated in the passage quoted above, the position is that, although formal instructions originate with SASO, SASO has no input into special advocates decisions, which are taken only by the relevant independent special advocate. One can also be confident that, if any special advocate or court at any point suspected that the separation between SASO and other government legal teams was in any way incomplete, this would at once be brought to light. Maurice Kay LJ, based on his own experience, commented (para 32): If I may be permitted a subjective observation: if such problems were evident they would be expected to provoke adverse judicial comment but, in my experience, the system, although inherently imperfect, enjoys a high degree of confidence among the judges who deal with cases of this kind on a regular basis. In these circumstances, Mr Allen focuses on the fifth of the five SASO lawyers, a grade 6 lawyer who has no case work responsibility at all, but who does have a line management role in relation to both the SASO team and the Treasury Solicitors general private law team. He also chairs the monthly special advocates meetings at which cases and tactics are discussed, the minutes of which are sent to the Attorney Generals office, and he may occasionally brief the Attorney Generals office on open issues only. After pointing out that a person in Mr Tariqs position will instruct the special advocate before any closed material procedure begins, Mr Allen suggests that the description given of the grade 6 lawyers activity means that the content of such instructions could be shared with parts of the Treasury Solicitors office outside the SASO team or even with the Attorney General. I do not regard this as realistic. Substantive legal decisions are, as stated, taken by the special advocate. The grade 6 lawyer has no case work responsibility, and would not on the face of it be likely even to know of any instructions given by Mr Tariq. Even if he did know, disclosure to anyone outside the SASO team would involve a serious breach of his duty. There is no reason to think that minutes of the monthly meeting circulated to the Attorney Generals office would disclose such instructions, and the special advocate would presumably receive them and ensure that they did not. There is also no reason to think any briefing of the Attorney Generals office could or would go into detail about individual cases, still less about instructions given by Mr Tariq. It is clear that the Attorney General has no role and no detailed knowledge in relation to individual cases. In Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 the House was concerned with accountants (KPMG) who were in possession of information confidential to a former client (Prince Jefri) which might be relevant to instructions which they then accepted from the Brunei Investment Agency, of which Prince Jefri had been chairman, to investigate the whereabouts of certain assets suggested to have been used by Prince Jefri for his own benefit. The House granted an injunction restraining KPMG from acting for the Agency. It held that the burden was on KPMG to show that there was no risk of the information coming into the possession of those within KPMG acting for the Agency. KPMG had attempted to erect a Chinese wall, but this was ad hoc and within a single department; further the two teams involved one which had acted for Prince Jefri and the one which was acting for the Agency contained large and rotating memberships of persons accustomed to working with each other. In these circumstances, the House held that, although there was no rule of law that Chinese walls or other similar arrangements were insufficient, nevertheless, to eliminate the risk, an effective Chinese wall needs to be an established part of the organisational structure of the firm, not created ad hoc and dependent on the acceptance of evidence sworn for the purpose by members of staff engaged on the relevant work (per Lord Millett, at p 239D E). The present case falls into an opposite category. SASO has a small team which works separately under arrangements which are not ad hoc, but well established, and it uses the services of independent outside special advocates, who can be relied upon to reinforce the culture and reality of such separation. There is no reason to doubt the genuineness and efficacy of the Chinese wall which has been set up in this way to service special advocates needs, in particular by providing assistance described in para 90 of the Special Advocates Guide. Mr Allen makes other further criticisms of the arrangements for special advocates: he submits that special advocates lack supervision, that there is insufficient guidance as to their role and that they lack any or sufficiently defined powers in respect of matters such as disclosure, the calling and cross examination of witnesses and appeal. I do not regard these criticisms as well founded or as rendering the whole closed material procedure unfair. Special advocates are experienced independent practitioners, accustomed to act of their own initiative and to take difficult decisions, and able to raise points of doubt or difficulty with the tribunal or court before which they appear. The special advocates role is familiar in a variety of contexts. It has been extensively described in the Special Advocates Guide. It divides into two parts, the open and closed. The Guide notes that throughout the open part, where the parties are exchanging open material, the special advocate will have the opportunity to meet the person in whose interests he or she is to act and to obtain as good an understanding as possible of his or her case (paras 99 100). Once the open stages have been completed the Secretary of State will serve his or her closed material upon the special advocate only (paras 101 102). The Guide goes on (para 102): The receipt of closed material marks the end of the period in which the special advocate may communicate directly with the appellant. It should be noted that communication with the appellant is still possible at this point but any communication from the special advocate to the appellant after this time requires the permission of the Court and the proposed format of it must be notified to the Secretary of State who can make objections if he so wishes (see SIAC Rule 36(4) and CPR 76.25(4)). During the closed phase, the special advocates role was summarised by Sedley LJ in Murungaru v Secretary of State for the Home Department [2008] EWCA Civ 1015, [2009] INLR 180 in this way at para 17: The ways in which a special advocate will seek to represent the interests of an appellant are, first, to test by cross examination, evidence and argument the strength of the case for non disclosure. Secondly, to the extent that non disclosure is maintained, the special advocate is to do what he or she can to protect the interests of the appellant, a task which has to be carried out without taking instructions on any aspect of the closed material. In relation to the protection of the interests of the person in Mr Tariqs position in relation to disclosure after the closed phase has begun, the Guide amplifies the special advocates role (in the largely parallel context of his or her role in proceedings before SIAC) as follows (para 103): It is now for the special advocate to take a view himself on the material and to decide whether any of what is contained within the closed material should in fact be made open (and therefore be disclosed to the appellant) because its disclosure would not harm the public interest e.g. the material is already in the public domain or could not be regarded as damaging to national security or other public interests. Sometimes, the special advocate will submit that a summary or gist of the material could be safely disclosed to the appellant. The special advocate has a period after service of the closed material in which to consider and prepare written submissions on what, if any, of the 'closed' material should become open. These are known as rule 38 submissions in SIAC and rule 29 submissions in Control Order proceedings (although they are in fact governed by CPR 76.29). These submissions may also include requests to the Secretary of State for further information or documents to be provided to the special advocate. This period has usually in SIAC been a period of two to three weeks (although no period is specified see SIAC Rules rule 38(3)). In the CPR, similar provisions specify a period of two weeks for the special advocate to indicate whether he challenges the Secretary of state's assessment of what is open and what is closed (see rule 76.29(3)), though the Court may modify it in appropriate circumstances. With regard to the hearing on the merits, the special advocate will be present during the open part, when he or she will have the opportunity to observe how the case is put by counsel both for and against the person whose interests the special advocate will be protecting during the closed phase. The closed hearing will take place, and all but the special advocate and the Secretary of State will withdraw. I see no reason why a special advocate may not, where appropriate, take steps to call factual or expert evidence during the closed phase, if necessary applying for any necessary witness summons. The Guide is in my view correct in contemplating this (para 108): There is also a possibility that the special advocate may call his own witnesses. This latter has never, to date, been undertaken, certainly not in a SIAC context. There appears no reason in principle, however, why this should not be possible, and special advocates in proceedings in the High Court will have the considerable advantage of being able to call on both the remainder of the CPR (insofar as not disapplied) and on the inherent jurisdiction of the Court to achieve such an end. In its June 2005 Response to the Constitutional Affairs Select Committee's Report into the Operation of SIAC and the Use of Special Advocates, the Government acknowledged that it is, in principle, open to special advocates in SIAC appeals to call expert evidence. On any appeal, it is well established that the special advocate is able both to appear and represent an appellants interests in any closed phase of the appeal. Mr Allen suggests that the special advocates role in positively instituting an appeal in relation to events or decisions occurring during the closed phase is insufficiently clear. Again (and consistently with Maurice Kay LJs description in para 30, cited in para 50 above) I see no reason why the special advocates role should not embrace this. The special advocate may, with the courts permission, communicate with Mr Tariq, even after the closed phase has begun (para 50 above); the court would no doubt permit a special advocate to inform a person in Mr Tariqs position that there were closed matters which merited consideration on appeal, even though such matters could not in any way be disclosed. In this way, an appeal could be lodged to enable the special advocate to pursue such matters, although the subject matter and basis of the appeal would remain unknown to the person in Mr Tariqs position. Reference to the Court of Justice Mr Allen submits that the Supreme Court should refer to the Court of Justice points arising in this case on which European Union law is relevant. Article 267 of the Treaty on the European Union provides: The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning: (a) the interpretation of the Treaties; (b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union; Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon. Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court The principles of European Union law which arise for consideration in this case are clear. There must in particular be effective legal protection in respect of the rights not to be discriminated against which Mr Tariq invokes, and, so far as guidance is necessary, it is to be found for the relevant purposes in the European Convention on Human Rights and the case law of the European Court of Human Rights. The principles which the European Court of Human Rights would apply in the area of national security have been confirmed recently by the decision in Kennedy. The questions before the Supreme Court involve the application of such principles to the circumstances of this case, and in particular to the closed material procedure involving a special advocate which the Employment Tribunal has ordered. There is on this basis no question of interpretation of the European Treaties which calls for a reference under article 267 as explained by the Court of Justice in Case 283/81 Srl CILFIT v Ministry of Health [1982] ECR 3415. It is not the role of the Court of Justice to rule on the application of established general criteria to a particular provision or arrangement, which must be considered in the light of the particular circumstances of the case in question: compare Case C 237/02 Freiburger Kommunalbauten GmbH Baugesellschaft & Co KG v Hofstetter [2004] 2 CMLR 291, paras 21 23, explaining and distinguishing Joined Cases C 240/98 to 244/98 Ocano Grupo Editorial SA v Murciano Quintero [2002] 1 CMLR 1226. I add that, if Mr Tariq were to have cause for complaint about the application of the relevant legal principles as established by the European Convention on Human Rights, there will always exist the potential to seek redress in Strasbourg. The European Court of Human Rights is not limited to the examination of questions of interpretation or law arising under the Convention, but will re examine the fairness of their application as a whole in the light of the circumstances of the particular case. It follows that I would hold that the use of a closed material procedure before the Employment Tribunal was and is lawful in the present case, and dismiss Mr Tariqs appeal accordingly. The Home Offices appeal It is as well to bear in mind at the outset that the general nature of the Home Offices case has been communicated to Mr Tariq. It is that the Home Office was concerned in August 2006 that [Mr Tariq] could be vulnerable to an approach to determine if terrorist suspects had been flagged to the authorities or to smuggle prohibited items airside and that its decision to withdraw security clearance in December 2006 was based on [his] close association with individuals suspected of involvement in plans to mount terrorist attacks and on its view that association with such individuals might make him vulnerable to attempts to exert undue influence on [him] to abuse his position: para 5 above; Mr Tariq must be able to meet this case on a general basis, in particular, by disclosing and describing his relationship and the nature and extent of his association with those of his relatives suspected and his cousin who was ultimately convicted of terrorist activity; and he has, further, on the basis of, in particular, his questioning in interview also been able to mount a sufficiently arguable case of discrimination to avoid any application to strike out his claim: para 6 above. What is in issue is the declaration made by the Employment Appeal Tribunal and upheld by the Court of Appeal to the effect that article 6 of the European Convention on Human Rights requires [Mr Tariq] to be provided with the allegations being made against him in sufficient detail to enable him to give instructions to his legal team so that those allegations can be challenged effectively: para 3 above. This is worth repeating, because some language used in the Court of Appeal might suggest that Mr Tariq knew nothing at all of the nature of the case against him, as opposed to particular allegations supporting it. Thus, for example, Maurice Kay LJ said that, although a closed material procedure was in principle justified, it was none the less the right of a litigant to know the essence of the case against him, if necessary by gisting ([2010] ICR 1034, para 43). He went on to acknowledge that, in a particular case, this may put the public authority in the invidious position of having to make difficult decisions about disclosure and whether or how a claim is to be defended, but said that all that is for the future in this litigation. It is the consequence of the requirements of justice. The Home Office by its appeal challenges this conclusion, pointing out that it raises directly the dilemma addressed by the Court of Appeal in the case of Carnduff v Rock [2001] EWCA Civ 680, [2001] 1 WLR 1786. If the disclosure of material would harm national security, but without disclosure the public authority could not defend and would have to capitulate, the claim itself may not be justiciable. The appeal raises the question whether there is an absolute requirement that a claimant should him or herself see and know the allegations forming the basis of the states defence in sufficient detail to give instructions to the defence legal team to enable the allegations to be challenged effectively. One problem about the declaration made by the Employment Appeal Tribunal and upheld by the Court of Appeal is that it is questionable whether or how far it differs in any significant way from the ordinary duty of any party in any litigation to disclose the nature of its factual allegations, where no issue of national security arises at all. A second point is that the declaration made does not correspond with any requirement expressed in section 7 of the Employment Tribunals Act 1996 or in the language of the statutory instruments made under that Act. But the submission is no doubt that, if the Convention requires gisting of the nature declared in every case, even though this could damage national security, then the court should under section 3 of the Human Rights Act 1998 find it possible to read into the Employment Tribunals Act 1996 and the ET Procedure Rules and ET National Security Rules introduced under it, some qualification to enable such gisting to occur. The question is therefore whether there is in the European Convention on Human Rights, as explained by the European Court of Human Rights, any such absolute requirement, where this would involve the disclosure to Mr Tariq of the detail of allegations which would in normal litigation require to be disclosed, but which the interests of national security require to be kept secret. Clearly, it is a very significant inroad into conventional judicial procedure to hold a closed material procedure admissible, if it will lead to a claimant not knowing of such allegations in such detail. As the Home Office acknowledges, it is an inroad which should only ever be contemplated or permitted by a court, if satisfied after inspection and full consideration of the relevant material as well as after hearing the submissions of the special advocate, that it is essential in the particular case; and this should be kept under review throughout the proceedings. However, to say that it is not possible under the Convention as interpreted by the Court in Strasbourg is in my view impossible, in the light of the clear line of jurisprudence culminating in the Courts decision in Kennedy which I have already discussed in paras 27 to 37 above. It is significant that, when the Court of Appeal reached its decision, it did not have the benefit of Kennedy. I would therefore allow the Home Offices appeal, and set aside the declaration made below to the effect that there exists an absolute requirement that Mr Tariq personally or his legal representatives be provided with sufficient detail of the allegations made against him to enable him to give instructions to his legal representatives on them. As I have indicated, both Mr Tariq and his legal representatives already know of the general nature of the Home Offices case. The Employment Tribunal will, with the assistance of the special advocate, keep under review and will be able to determine whether any and what further degree of gisting of the Home Offices case, or of disclosure regarding the detail of allegations made in support of it, is required, having regard to (a) the nature of the relevant allegations and of the national security interest in their non disclosure and in the light of its best judgment as to (b) the significance of such allegations for the Home Offices defence and (c) the significance for Mr Tariqs claim of the disclosure or non disclosure of such allegations to him. Employment Tribunals Act 1996, section 10 ANNEX (judgment, para 9) (5) Employment tribunal procedure regulations may make provision enabling a Minister of the Crown, if he considers it expedient in the interests of national security (a) to direct a tribunal to sit in private for all or part of particular Crown employment proceedings; (b) to direct a tribunal to exclude the applicant from all or part of particular Crown employment proceedings; (c) to direct a tribunal to exclude the applicant's representatives from all or part of particular Crown employment proceedings; (d) to direct a tribunal to take steps to conceal the identity of a particular witness in particular Crown employment proceedings; (e) to direct a tribunal to take steps to keep secret all or part of the reasons for its decision in particular Crown employment proceedings. (6) Employment tribunal procedure regulations may enable a tribunal, if it considers it expedient in the interests of national security, to do in relation to particular proceedings before it anything of a kind which, by virtue of subsection (5), employment tribunal procedure regulations may enable a Minister of the Crown to direct a tribunal to do in relation to particular Crown employment proceedings. (7) In relation to cases where a person has been excluded by virtue of subsection (5)(b) or (c) or (6), employment tribunal procedure regulations may make provision (a) for the appointment by the Attorney General . of a person to represent the interests of the applicant; . The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861) Schedule 1 The Employment Tribunals Rules of Procedure 54(1) A Minister of the Crown (whether or not he is a party to the proceedings) may, if he considers it expedient in the interests of national security, direct a tribunal or Employment Judge by notice to the Secretary to: (a) conduct proceedings in private for all or part of particular Crown employment proceedings; (b) exclude the claimant from all or part of particular Crown employment proceedings; (c) exclude the claimant's representative from all or part of particular Crown employment proceedings; (d) take steps to conceal the identity of a particular witness in particular Crown employment proceedings. (2) A tribunal or Employment Judge may, if it or he considers it expedient in the interests of national security, by order (a) do in relation to particular proceedings before it anything which can be required by direction to be done in relation to particular Crown employment proceedings under paragraph (1); (b) order any person to whom any document (including any judgment or record of the proceedings) has been provided for the purposes of the proceedings not to disclose any such document or the content thereof: (i) to any excluded person; (ii) in any case in which a direction has been given under [sub ]paragraph (l)(a) or an order has been made under [sub ]paragraph (2)(a) read with sub paragraph (1)(a), to any person excluded from all or part of the proceedings by virtue of such direction or order; or (iii) in any case in which a Minister of the Crown has informed the Secretary in accordance with paragraph (3) that he wishes to address the tribunal or Employment Judge with a view to an order being made under sub paragraph (2)(a) read with sub paragraph (l)(b) or (c), to any person who may be excluded from all or part of the proceedings by virtue of such an order, if an order is made, at any time before the tribunal or Employment Judge decides whether or not to make such an order; (c) take steps to keep secret all or part of the reasons for its judgment. The tribunal or Employment Judge (as the case may be) shall keep under review any order it or he has made under this paragraph. (3) In any proceedings in which a Minister of the Crown considers that it would be appropriate for a tribunal or Employment Judge to make an order as referred to in paragraph (2), he shall (whether or not he is a party to the proceedings) be entitled to appear before and to address the tribunal or Employment Judge thereon. The Minister shall inform the Secretary by notice that he wishes to address the tribunal or Employment Judge and the Secretary shall copy the notice to the parties. (4) When exercising its or his functions, a tribunal or Employment Judge shall ensure that information is not disclosed contrary to the interests of national security. The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 Schedule 2 The Employment Tribunals (National Security) Rules of Procedure 8 Special advocate (1) In any proceedings in which there is an excluded person the tribunal or Employment Judge shall inform the Attorney General of the proceedings before it with a view to the Attorney General , if he thinks it fit to do so, appointing a special advocate to represent the interests of the claimant in respect of those parts of the proceedings from which (a) any representative of his is excluded; (b) both he and his representative are excluded; or (c) he is excluded, where he does not have a representative. (2) A special advocate shall have a general qualification for the purposes of section 71 of the Courts and Legal Services Act 1990 or shall be an advocate or a solicitor admitted in Scotland. (3) Where the excluded person is the claimant, he shall be permitted to make a statement to the tribunal or Employment Judge before the commencement of the proceedings, or the part of the proceedings, from which he is excluded. (4) Except in accordance with paragraphs (5) to (7), the special advocate may not communicate directly or indirectly with any person (including an excluded person) (a) (except in the case of the tribunal, Employment Judge and the respondent) on any matter contained in the grounds for the response referred to in rule 3(3); (b) (except in the case of a person who was present) on any matter discussed or referred to during any part of the proceedings in which the tribunal or Employment Judge sat in private in accordance with a direction or an order given or made under rule 54. (5) The special advocate may apply for orders from the tribunal or Employment Judge authorising him to seek instructions from, or otherwise to communicate with, an excluded person (a) on any matter contained in the grounds for the response referred to in rule 3(3); or (b) on any matter discussed or referred to during any part of the proceedings in which the tribunal or Employment Judge sat in private in accordance with a direction or an order given or made under rule 54. (6) An application under paragraph (5) shall be made in writing to the Employment Tribunal Office and shall include the title of the proceedings and the grounds for the application. (7) The Secretary shall notify the Minister of an application under paragraph (5) and the Minister shall be entitled to address the tribunal or Employment Judge on the application. (8) In these rules and those in Schedule I, in any case in which a special advocate has been appointed to represent the interests of the claimant in accordance with paragraph (I), any reference to a party shall (save in those references specified in paragraph (9)) include the special advocate. 10 Reasons in national security proceedings (1) This rule applies to written reasons given under rule 30 of Schedule 1 for a judgment or order made by the tribunal or Employment Judge in national security proceedings. (2) Before the Secretary sends a copy of the written reasons ('the full written reasons') to any party, or enters them in the Register under rule 32 of Schedule I, he shall send a copy of the full written reasons to the Minister. (3) If the Minister considers it expedient in the interests of national security and he has given a direction or the tribunal or an Employment Judge has made an order under rule 54 in those proceedings, the Minister may (a) direct the tribunal or Employment Judge that the full written reasons shall not be disclosed to persons specified in the direction, and to prepare a further document ('the edited reasons') setting out the reasons for the judgment or order, but with the omission of such of the information as is specified in the direction; (b) direct the tribunal or Employment Judge that the full written reasons shall not be disclosed to persons specified in the direction, but that no further document setting out the tribunal or Employment Judge's reasons should be prepared. (4) Where the Minister has directed the tribunal or Employment Judge in accordance with sub paragraph 3(a), the edited reasons shall be signed by the Employment Judge and initialled in each place where an omission has been made. (5) Where a direction has been made under sub paragraph (3)(a), the Secretary shall (a) send a copy of the edited reasons referred to in subparagraph (3)(a) to any person specified in the direction and to the persons listed in paragraph (7); (b) enter the edited reasons in the Register, but omit from the Register the full written reasons; and (c) send a copy of the full written reasons to the persons listed in paragraph (7). (6) Where a direction has been made under sub paragraph (3)(b), the Secretary shall send a copy of the full written reasons to the persons listed in paragraph (7), but he shall not enter the full written reasons in the Register. (7) The persons to whom full written reasons should be sent in accordance with paragraph (5) or (6) are (a) the respondent; (b) the claimant or the claimant's representative if they were not specified in the direction made under paragraph (3); (c) if applicable, the special advocate; (d) where the proceedings were referred to the tribunal by a court, to that court; and (e) where there are proceedings before a superior court (or in Scotland, an appellate court) relating to the decision in question, to that court. The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 Regulation 2 Definitions excluded person means, in relation to any proceedings, a person who has been excluded from all or part of the proceedings by virtue of: (a) a direction of a Minister of the Crown under rule 54(1)(b) or (c) of Schedule 1, or (b) an order of the tribunal under rule 54(2)(a) read with 54(1)(b) or (c) of Schedule 1; national security proceedings means proceedings in relation to which a direction is given under rule 54(1) of Schedule 1, or an order is made under rule 54(2) of that Schedule; special advocate means a person appointed in accordance with rule 8 of Schedule 2 . LORD HOPE I agree that, for the reasons so fully set out by Lord Mance in his judgment and the further reasons given by Lord Brown and Lord Dyson, the appeal by the Home Office should be allowed and that the cross appeal by Mr Tariq should be dismissed. At the heart of both the appeal and the cross appeal are two principles of great importance. They pull in different directions. On the one hand there is the principle of fair and open justice. As OConnor J declared in Hamdi v Rumsfeld 542 US 507 (2004), 533, parties whose rights are to be affected are entitled to be heard and in order that they may enjoy that right they must first be notified. In European Convention terms, this is the principle of equality of arms which is part of the wider concept of a fair trial: Kennedy v United Kingdom (Application No 26839/05) (unreported) 18 May 2010, para 184. On the other there is the principle that gives weight to the interests of national security. This is one of the legitimate aims referred to in articles 8(2), 10(2) and 11(2) of the Convention. The extent of the discretion that must be accorded to the national authorities in this field was recognised in Leander v Sweden (1987) 9 EHHR 433, para 59. National security was described as a strong countervailing public interest in Kennedy, para 184. But it must be weighed against the fundamental right to a fair trial. The context will always be crucial to a resolution of questions as to where and how this balance is to be struck. Mr Tariq was employed by the Home Office in a capacity for which security clearance was required in the interests of national security. To be effective security vetting will usually, if not invariably, require to be carried out in secret. Its methods and the sources of information on which it depends cannot be revealed to the person who is being vetted. Those who supply the information must be able to do so in absolute confidence. In some cases, their personal safety may depend on this. The methods, if revealed to public scrutiny, may become unusable. These are the unusual circumstances in which the claim Mr Tariq seeks to make in this case must be determined. Mr Tariqs complaint against the Home Offices decision to suspend his security clearance is that it was based on grounds that amounted to direct or indirect discrimination against him on grounds of his race and religion. There is no doubt that he is entitled to a fair and public hearing in the relevant tribunal of his claim that the rights conferred on him by the Race Relations Act 1976 and the Employment Equality (Religion or Belief) Regulations 2003 (SI 2003/1660) have been breached. The principle of equal treatment is part of European Union law, but it is for national law to ensure that the right to a fair hearing is respected according to the principles established under the European Convention. By section 10(6) of the Employment Tribunals Act 1996 it is provided that the employment tribunal procedure regulations may enable a tribunal, if it considers it expedient in the interests of national security, to adopt a closed procedure. Section 10(7) of the 1996 Act provides that the procedure regulations may make provision in that event for the appointment by the Attorney General of a special advocate to represent the interests of the applicant. The provisions that were made in the exercise of that power are to be found in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861). Rule 54 of Schedule 1 to the Regulations provides for the use of closed procedure, and rule 8 of Schedule 2 provides for the appointment of special advocates. No one doubts Mr Tariqs right not to be discriminated against on grounds of his race or his religion. But it was his own choice to seek employment in a post for which, in the interests of national security, security clearance was required. He was a volunteer, not a conscript. This is not a case where he is the victim of action taken against him by the state which deprived him of his fundamental rights. Furthermore, as I have already indicated, security vetting is a highly sensitive area. Its intensity will no doubt vary from case to case, but common to them all is the need to preserve the integrity of sources of information and the methods of obtaining it. That must always be the paramount consideration, whatever the nature of the proceedings in which the issue arises. It ensures that the national interest is protected when people are appointed to posts where security clearance is required. Issues of employment and discrimination law raised by people appointed to those posts may require access to the way this process has been carried out. It was no doubt for that reason that the use of the closed procedure and the appointment of special advocates was expressly authorised by the statute. The question then is whether the difficulties that Mr Tariq faces in making good his discrimination claim are sufficiently counterbalanced by the procedures that the Home Office wishes the employment tribunal to adopt. First, there is the use of the closed procedure for the consideration of the material on which the Home Office wishes to rely in its defence. Is the procedure that the Regulations have prescribed for use in national security cases compatible with European Union law? This is the point raised by Mr Tariqs cross appeal. Second, if the use of the closed procedure is lawful, how is it to be applied in this case? Is the Home Office obliged to give sufficient detail of the material on which it relies to enable Mr Tariq to give detailed instructions to his special advocate to enable that material to be challenged effectively? This is the point raised by its appeal. The Court of Appeal held that the principle illustrated by Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28, [2010] 2 AC 269 must apply. This was despite the fact that this would put the Home Office in the invidious position of having to make decisions as to whether, and if so how, the claim was to be defended: [2010] EWCA Civ 462, [2010] ICR 1034, para 50. I have found the second issue more troublesome than the first. As to the first, which is the issue raised in Mr Tariqs cross appeal, the question is whether the use of the closed procedure in cases of this type impairs the very essence of his right to a fair trial. The right to a fair trial itself is an absolute right, but rights that are to be implied from article 6 of the European Convention are not: Brown v Stott [2003] 1 AC 681, 719. Their purpose is to give effect, in a practical way, to the fundamental right. The right to a fair hearing must ordinarily carry with it the right to have proceedings conducted in open court, with full disclosure by both sides. But, for the reasons already mentioned, the use of an open procedure where details of the security vetting process are in issue cannot be resorted to without risk to the integrity of the system which in the national interest must be preserved. The observations of the Court of Justice in Joined Cases C 402/05P and C 415/05P Kadi v Council of the European Union [2009] AC 1225, para 344 indicate that European law is willing to accept a closed material procedure in the interests of national security so long as the individual is accorded a sufficient measure of procedural justice. That this is the position that the Strasbourg court too has adopted is amply demonstrated by its decisions in Kennedy v United Kingdom, paras 184 190. Parliament has expressed a clear democratic judgment that the tribunal may in its discretion make use of the closed procedure with the assistance of a special advocate. As for the procedure that the 2004 Regulations provide for, several features indicate that the balance has been struck in the right place. First, there is the fact that, under the procedure provided for by rule 54(2) of Schedule 1 to the Regulations, the decision as to whether closed procedure should be resorted to rests with the tribunal or the employment judge. The fact that the decision is taken by a judicial officer is important. It ensures that it is taken by someone who is both impartial and independent of the executive. Second, there is the fact that, as this is a judicial decision, it will not be taken without hearing argument in open court from both sides. It will be an informed decision, not one taken without proper regard to the interests of the individual. Third, it opens the door to the use of the special advocate. Fourth, it is a decision that can and should be kept under review as the case proceeds: see the last sentence of rule 54(2). Fifth, the special advocate can and should be heard as the process of keeping it under review proceeds. As against all that, account must be taken of the consequences for national security if this procedure were not to be available to the tribunal. Without it, there would be a stark choice: to conduct the entire defence in open proceedings however damaging that might be to the system of security vetting, and in particular to those who contributed to it in this case; or to concede the case and accept the consequences. They would not only be financial. They would lead to the government being seen as an easy target for unjustified claims. That would be a field day for the unscrupulous. They could lead to tensions if those who were in a position to make discrimination claims were thought to be enjoying an unfair advantage because their claims were not likely to be contested if they were to be pressed to the point of a public hearing. I think that the balance lies firmly in favour of allowing the tribunal, in its discretion, to make use of the closed procedure. I would dismiss the cross appeal. As for the second issue, there is a very real problem. Procedural justice indicates that Mr Tariq should be given sufficient information to enable him to give detailed instructions to his special advocate so that she can challenge the withheld material on his behalf. But Mr Eadie QC for the Home Office insists that the process of gisting as envisaged in Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269 cannot be resorted to in this case without risk to those who were involved in the security vetting process. In the AF (No 3) case I said that what would be needed would vary from case to case, and that the judge would be in the best position to strike the balance between what was needed to enable the special advocate to challenge the case against the individual and what could properly be kept closed: para 86. But I also said that if the concept of an effective challenge was to be applied, where detail matters it must be met by detail: para 87. That is what Mr Eadie objects to in this case. Here again the context for the argument is what matters. This is an entirely different case from Secretary of State for the Home Department v AF (No 3). There the fundamental rights of the individual were being severely restricted by the actions of the executive. Where issues such as that are at stake, the rule of law requires that the individual be given sufficient material to enable him to answer the case that is made against him by the state. In this case the individual is not faced with criminal proceedings against him or with severe restrictions on personal liberty. This is a civil claim and the question is whether Mr Tariq is entitled to damages. He is entitled to a fair hearing of his claim before an independent and impartial tribunal. But the Home Office says that it cannot defend the claim in open proceedings as, for understandable reasons, it cannot reveal how the security vetting was done in his case. That conclusion is unavoidable, given the nature of the work Mr Tariq was employed to do. How then is the balance to be struck here? Mr Tariq will be at a disadvantage if the closed procedure is adopted. But the disadvantage to the Home Office is greater, as unless the closed procedure is adopted it will have to concede the claim. There is no way that the disadvantage to the Home Office can be minimised. It will simply be unable to defend itself. It will be unable to obtain a judicial ruling on the point at all. That would plainly be a denial of justice. The disadvantage to Mr Tariq, on the other hand, is less clear cut. He is not entirely without information, as the general nature of the Home Offices case has been disclosed to him. He will have the services of the special advocate, with all that that involves second best by far, no doubt, but at least the special advocate will be there. His claim will be judicially determined by an independent and impartial tribunal, which can be expected to take full account of the fact that the details of the case for the Home Office have had to be kept closed. If inferences have to be drawn because of the quality or nature of the evidence for the Home Office, they will have to be drawn in Mr Tariqs favour and not against him. And throughout the process the need for the evidence to be kept closed will be kept under review as rule 54 of Schedule 1 to the Regulations requires, with the assistance of the special advocate. There cannot, after all, be an absolute rule that gisting must always be resorted to whatever the circumstances. There are no hard edged rules in this area of the law. As I said at the beginning, the principles that lie at the heart of the case pull in different directions. It must be a question of degree, balancing the considerations on one side against those on the other, as to how much weight is to be given to each of them. I would hold that, given the nature of the case, the fact that the disadvantage to Mr Tariq that the closed procedure will give rise to can to some extent be minimised and the paramount need to protect the integrity of the security vetting process, the balance is in favour of the Home Office. I would allow the appeal. LORD BROWN I have read Lord Mances comprehensive judgment and, like him, would allow the Home Offices appeal and dismiss Mr Tariqs cross appeal. As to the cross appeal the question whether a closed material procedure in the employment tribunal can ever be compatible with the Race Directive and the Equal Treatment Framework Directive there is almost nothing I wish to add to Lord Mances judgment. To my mind plainly it can. The submission that it is never necessary for reasons of national security to deploy secret evidence in employment tribunal discrimination proceedings because instead the government can simply pay up I find not merely unpersuasive but wholly preposterous. Is it seriously to be suggested that, however unmeritorious such claims may be, the complainant should simply be paid off? Taxpayers money aside, consider the appalling consequences for the governments reputation were there to be a succession of findings of unlawful racial or religious discrimination and the insidious effect of all this upon relations between different racial groups. As for the appeal in effect the question whether a complainant in Mr Tariqs position has to be provided with sufficient details of the allegations being made against him (however sensitive the information on which they are based) to enable him to give instructions to his special advocate in order effectively to challenge them I conclude no less clearly that this is not required. On this question, however, I wish to add a few further thoughts of my own. It is, as I understand it, Mr Tariqs case on the appeal apparently supported by Mr John Howell QC for JUSTICE and Liberty that, assuming (contrary to his primary case) that a closed material procedure is available at all in employment tribunal proceedings, the complainant has exactly the same rights to be provided with sufficient information about the allegations against him to enable him to give effective instructions to the special advocate as the Grand Chamber in A v United Kingdom (2009) 49 EHRR 625 (at para 220) decided had to be given to those deprived of their liberty at Belmarsh Prison pursuant to the Anti terrorism, Crime and Security Act 2001. For simplicitys sake I shall call this degree of disclosure A type disclosure. As is well known, the nine Members of the House of Lords sitting in Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28, [2010] 2 AC 269 unanimously held that A type disclosure was similarly required in control order cases under the regime established by the Prevention of Terrorism Act 2005 in place of the detention regime. Substantially relying on A and on AF (No 3), Mr Allen QC submits that in any special advocate context to which article 6 applies, there is required an irreducible minimum standard of fairness which in every case demands A type disclosure. Prominent amongst the passages prayed in aid from the AF (No 3) judgments are, to my considerable surprise, these from my own judgment: . the suspect must always be told sufficient of the case against him to enable him to give effective instructions to the special advocate, notwithstanding that sometimes this will be impossible and national security will thereby be put at risk (para 116). Plainly there now is a rigid principle. Strasbourg has chosen in para 220 of A to stipulate the need in all cases to disclose to the suspect enough about the allegations forming the sole or decisive grounds of suspicion against him to enable him to give effective instructions to the special advocate (para 119). The argument, notwithstanding its apparent acceptance by the Court of Appeal, is to my mind unsustainable. As all the judgments in AF (No 3), my own not least, made plain, the Grand Chambers judgment in A was to be regarded as indistinguishable simply because of the striking similarities between the two situations then under consideration: Belmarsh detention and the control order regime. To suggest that the identical rigid principle will be imported into every situation where article 6 applies notwithstanding that sometimes this [A type disclosure] will be impossible and national security will thereby be put at risk is absurd. It is, indeed, to re assert here the very argument already rejected in relation to the cross appeal: the argument that, if giving effect to A type disclosure will compromise national security, then it is always open to government instead to pay up. True it is that in the control order context, government has on a number of occasions since AF (No 3) chosen to abandon the control order rather than make the necessary degree of disclosure. That, however, is a far cry from recognising that governments should face the same dilemma in the context of a monetary claim for discrimination. Although the Court of Appeal did not regard these cases as being in a different category (para 50 of Maurice Kay LJs judgment below), for my part I strongly disagree. Not merely, moreover, is there no support for Mr Allens argument to be found in our domestic jurisprudence but, as Lord Mance convincingly demonstrates, it is now clearly belied by a series of Strasbourg decisions culminating most recently and most decisively in Kennedy v United Kingdom (Application No 26839/05) (unreported) 18 May 2010. Kennedy concerned a complaint, largely on article 6 grounds, against the ruling of the Investigatory Powers Tribunal (IPT) made on 23 January 2003 as to the legality of various of their rules. A sufficient description of the highly restrictive nature of these rules is to be found at paras 7 and 25 of my judgment in this Court in R (A) v Director of Establishments of the Security Service [2009] UKSC 12, [2010] 2 AC 1 (at paras 8 and 30 of which I noted that the IPTs own decision on these rules was shortly to be considered by the European Court of Human Rights, as now it has been in Kennedy). The Court in Kennedy assumed (at para 179 of its judgment) that article 6 applies to proceedings before the IPT and then, at paras 181 190 of its judgment (cited by Lord Mance at paras 34 and 35 above) comprehensively rejected the claim that it had been violated. There could hardly be a clearer example of a procedure being held compliant with article 6 notwithstanding the conspicuous absence of anything approaching A type disclosure. The final comments I wish to make in the appeal are these. Security vetting by its very nature often involves highly sensitive material. As an immigration officer, Mr Tariq required security clearance to a comparatively high level (above that of a counter terrorist check albeit below that of developed vetting). Immigration officers require long term, frequent and controlled access to secret information and assets. It is surely, therefore, not altogether surprising that, upon his brothers and his cousins arrest and more particularly since his cousins conviction and life sentence for conspiracy to murder arising out of a terrorist plot to attack transatlantic flights from Heathrow he has been suspended from duty (albeit continuing to be paid) and his security clearance withdrawn. No one suggests that Mr Tariq himself was involved in the plot. What is suggested, however, is that he could be vulnerable to pressures from someone in his community to abuse his position as an immigration officer. Mr Tariq submitted an internal appeal against the Departmental Security Officers decision to withdraw his security clearance but this was dismissed by the Permanent Secretary of the Home Office (following his consideration of a full report from the Director of Human Resource Services). Mr Tariq then made a further appeal to the Security Vetting Appeals Panel (SVAP) (presided over by a retired High Court judge) which held both open and closed hearings, with a special advocate appointed for the closed hearings, and which as recently as January 2011 dismissed the appeal. (No objection is taken to the SVAPs use of a closed procedure and special advocate, apparently on the basis that it was bound to use such a procedure and that in any event its decision on the appeal is solely advisory, the department being free to ignore it.) We know nothing of the underlying facts of this case. Assume, however, in a case like the present that someone in the employees community (perhaps a relative or associate) has given information in confidence to those responsible for reviewing the employees security clearance which is detrimental to his case. Perhaps it belies assurances he has given as to the limited nature and extent of his contacts with those suspected of terrorist activity. It surely goes without saying that nothing of this could properly be disclosed to the employee beyond perhaps telling him that the department was not satisfied with the assurances he has given. To give chapter and verse of any inconsistencies between those assurances and the information given to the department would be to betray the information provided and quite likely put its provider at risk. Similar considerations could well apply even in respect of an initial vetting procedure. Is it really sensible, one cannot help wondering, to attempt to force disputes in such cases as these into the comparative straitjacket of employment tribunal proceedings. Even if it is, is it sensible to operate in parallel two sets of proceedings, both with closed procedures and special advocates, one before the SVAP, the other before the Employment Tribunal. Of course I recognise that the issues they are determining are not identical. But there must inevitably be some substantial overlap between them and the effort, time and expense involved in all this hardly bears thinking about. In my judgment in R (A) v Director of Establishments of Security Service (at paras 34 and 35) I expressly contemplated that in certain circumstances the IPTs exclusive jurisdiction might with advantage be widened. True, I was not considering a case like the present. I seriously wonder, however, whether it might not be wise to channel all disputes arising in security vetting cases to a single tribunal if not the IPT itself, then a body sharing some at least of its characteristics. That, however, is a thought for the future perhaps for consideration in relation to a Green Paper we are told will be published later this year with regard to possible ways of resolving, or at least mitigating, the undoubted problems faced by Government in litigation raising sensitive security issues. LORD KERR Introduction On 14 February 2008 the Employment Tribunal dealing with Mr Tariqs case sent to the minister a copy of the reasons it proposed to give for making its order under rule 54 of the First Schedule to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861). It was required to do so by rule 10 of the Employment Tribunals (National Security) Rules 2004 which are contained in Schedule 2 to the 2004 Regulations. The reasons were amended by the minister (or, more probably, by someone acting on his behalf) and were eventually issued to the claimant and his advisers in their amended form on 15 October 2008. The reasons that the tribunal proposed to give Mr Tariq related to the way in which his case would be dealt with. They purported to explain why he and his representatives would be excluded from those parts of the proceedings at which closed evidence was to be given or closed documents were to be considered; why a special advocate was to be appointed to represent his interests in any part of the proceedings from which he and his representatives were to be excluded; and why the proceedings should be held entirely in private. As a means of explaining these matters to Mr Tariq, the reasons given were, to say the least, not informative. Para 10 encapsulated them. It stated: Having read the relevant documents and having heard submissions, I was satisfied that it was expedient in the interest of national security to make an order under rule 54 as set out in the separate document marked as Orders. I was further satisfied that it would be in the interest of the claimant if a special advocate were to be appointed for the matter to be further reviewed, as I am required to do, at the next case management discussion on 1 May 2008 when not only can the issues as to what documents should be in the closed and open bundles and what should be included in the closed and open witness statements be addressed but also any submissions from the special advocate in that regard at that case management discussion in the anticipation that there would have been such an appointment before then. Beyond saying that the decisions as to the way in which his case was to be heard had been taken for reasons of national security, this paragraph conveyed precisely nothing to the claimant. The paragraphs that had preceded it did little more. Apart from rehearsing the submissions that had been made by either party, they said virtually nothing. But that did not make them immune from the ministers blue pen. In para 5 of the reasons the tribunal had set out (in 5.1, 5.2 and 5.3) the Home Office submissions that the entire proceedings should be held in private; that Mr Tariq and his representative should be excluded while closed evidence or documents were being considered; and that the tribunal should consider both the closed evidence and closed documents and that these would be provided to a special advocate, if one was appointed. In its original form, the statement of reasons continued at para 6: The respondents made this application on the basis that given the circumstances and the relationship of the claimant to other parties involved in what was believed to be unlawful activities and the fact that he might have contact with them that there could be inadvertent disclosure by him of information that was either sensitive or classified. Now it should be noted that on 30 August 2006, the departmental security officer, Jacqueline Sharland, had met Mr Tariq and his union representative and she had then explained that the review of Mr Tariq's security clearance had been prompted by national security concerns and that these related to Mr Tariq's vulnerability. At that meeting Mr Tariq indicated that he understood that the withdrawal of his security clearance had occurred because his brother had been arrested. There was no demur from Ms Sharland to this suggestion. Despite this, in October 2008, more than two years later, the minister (or a civil servant acting on his behalf) felt that para 6 of the tribunals reasons required amendment. He directed that it should be changed so as to read as follows: The respondents made the applications at paras 5.1 5.3 above, on the basis that the material in the closed bundle provided to the tribunal was sensitive on grounds of national security and accordingly should not be disclosed to the claimant or his representative. So, although Mr Tariq had been informed by the departmental security officer that his security clearance had been reviewed because he was considered to be vulnerable, and although he had responded that he believed that that had happened because his brother had been arrested, the Home Office view was that it was necessary on national security grounds that he should not be told in October 2008 that others who were believed to be involved in unlawful activities might receive sensitive or classified information that he might inadvertently impart to them. It has never been explained why the view was taken that this information could not be disclosed. Mystifying though this is, the second change to the statement of reasons directed by the minister is even more inexplicable. This required the complete deletion of para 8 of the reasons. This paragraph had done no more than summarise an argument made on the respondents behalf in the presence of Mr Tariqs representative, an argument of which, therefore, it must be assumed, he was fully aware. It had stated: The respondents further maintained that due to the nature of the contact and the place of contact (the claimant's parents home at which he partially resided with his family during most week ends), it was inappropriate for all these matters to be disclosed on a public basis and that there were matters properly to be dealt with on a closed basis and for the hearing generally to be in private. Again no explanation for the decision to withhold this information has been given. It seems likely that its subsequent disclosure and the full revelation of what para 6 contained was brought about by representations made by the special advocate appointed to act on Mr Tariqs behalf. Lord Mance has said that this is an indication of one of the purposes that a special advocate may serve. It may very well amount to such an indication but the fact that the intervention of the special advocate was required to secure the release of material which ought never to have been withheld is, in my opinion, profoundly troubling. Lord Mance has suggested that the course of events about the disclosure of this information offers a cautionary message. It does more than that. It illustrates all too clearly the dangers inherent in a closed material procedure where the party which asks for it is also the repository of information on the impact that an open system will avowedly have on national security. The common law right to know and effectively challenge the opposing case The right to know and effectively challenge the opposing case has long been recognised by the common law as a fundamental feature of the judicial process. In Kanda v Government of Malaya [1962] AC 322, 337 Lord Denning said: If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them. This appears in all the cases from the celebrated judgment of Lord Loreburn LC in Board of Education v Rice down to the decision of their Lordships Board in Ceylon University v Fernando. It follows, of course, that the judge or whoever has to adjudicate must not hear evidence or receive representations from one side made behind the back of the other. The centrality of this right to the fairness of the trial process has been repeatedly emphasised. Thus, in In re K (Infants) [1963] Ch 381 Upjohn LJ at pp 405 406 said: It seems to be fundamental to any judicial inquiry that a person or other properly interested party must have the right to see all the information put before the judge, to comment on it, to challenge it and if needs be to combat it, and to try to establish by contrary evidence that it is wrong. It cannot be withheld from him in whole or in part. If it is so withheld and yet the judge takes such information into account in reaching his conclusion without disclosure to those parties who are properly and naturally vitally concerned, the proceedings cannot be described as judicial. And in Brinkley v Brinkley [1965] P 75, 78 Scarman J said that for a court to take into consideration evidence which a party to the proceedings has had no opportunity during trial to see or hear, and thus to challenge, explain or comment upon, seems to us to strike at the very root of the judicial process. In Pamplin v Express Newspapers Ltd [1985] 1 WLR 689 at 691 Hobhouse J expressed the principle in similarly forthright terms: The first principle is the principle of natural justice which applies wherever legal proceedings involve more than one person and one party is asking the tribunal for an order which will affect and bind another. Natural justice requires that each party should have an equivalent right to be heard. This means that if one party wishes to place evidence or persuasive material before the tribunal, the other party or parties must have an opportunity to see that material and, if they wish, to submit counter material and, in any event, to address the tribunal about the material. One party may not make secret communications to the court. Exceptions to the rule that a party to the proceedings must be informed of every detail of his opponents case have, of course, been recognised. But it is essential to be aware of the starting point from which one must embark on the inquiry whether the principle of equality of arms (which is such a vital hallmark of our adversarial system of the trial of contentious issues) may be compromised. As a general indeed, basic rule, those who are parties to litigation need to know what it is that their opponent alleges against them. They need to have the chance to counter those allegations. If that vital entitlement is to be denied them, weighty factors must be present to displace it. And it is self evident that he who wishes to have it displaced must show that there are sufficiently substantial reasons that this should happen. Put shortly, he who thus avers must establish that nothing less will do. The case made on behalf of the appellant in this appeal has been stigmatised by the suggestion that it amounts to a claim that the state must accept that it should pay compensation even in those instances where the claimant is known to be wholly undeserving but it is impossible to adduce evidence that would establish this because of national security considerations. The respondent claimed and the majority have accepted that the law will not contemplate such a situation. In my view, however, this approach carries the danger of allowing the possible consequences of the implementation of the proper principle to effect a modification of the principle itself. So, because, it is said, the state, faced with the dilemma of having to choose between revealing the information on which it relies to defeat the claim and compromising national security by doing so, would be forced to settle the case, a better solution must be found. That better solution is that the state should be allowed to deploy the information on which the claim can be defeated but be absolved from the need to disclose it to the claimant. This solution, it is clear, is founded not on principle but on pragmatism. Pragmatic considerations, of course, have their part to play in the resolution of difficult legal conundrums but, I suggest, they have no place here. Where, as in this case, the challenged decision is the subject of factual inquiry or dispute and the investigation of the disputed facts centres on an individuals actions or, to bring the matter directly to the circumstances of this case, his supposed vulnerability, that individual is the critical source of information needed to discover the truth; in many cases he may be the only source. If he is denied information as to the nature of the case made either directly against him or, as seems more likely here, against others whose presumed relationship with the claimant renders it unsuitable for him to retain security clearance and if he is thereby forced to speculate on the content of the defendants case, no truly adversarial proceedings are possible. As Upjohn LJ put it in In re K, the proceedings are not judicial. The withholding of information from a claimant which is then deployed to defeat his claim is, in my opinion, a breach of his fundamental common law right to a fair trial. Even if the closed material procedure was compatible with article 6 of the European Convention on Human Rights (and for reasons that I will discuss presently, I do not believe that it is) this has no bearing on the appellants right at common law to be provided with details of the case against him sufficient to enable him to present a reasoned challenge to it. This courts endorsement of a principle of non disclosure whereby a party in civil proceedings may have withheld from him the allegations forming the basis of the opposing case is a landmark decision, marking a departure from the common laws long established commitment to this basic procedural right. In my view, the removal of that right may only be achieved by legislation and only then by unambiguous language that clearly has that effect. In R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115, dealing with Parliaments power to legislate contrary to fundamental human rights, Lord Hoffmann at p 131 said: Parliamentary sovereignty means that Parliament can, if it chooses, legislate contrary to fundamental principles of human rights. The Human Rights Act 1998 will not detract from this power. The constraints upon its exercise by Parliament are ultimately political, not legal. But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. 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. Although that statement of principle was made in the context of legislation overriding human rights, it applies with equal force to legislation affecting other constitutional rights such as arise in this case. In R (Anufrijeva) v Secretary of State for the Home Department [2003] UKHL 36, [2004] 1 AC 604, at para 27 Lord Steyn said of Lord Hoffmanns dictum, this principle may find its primary application in respect of cases under the European Convention on Human Rights. But the Convention is not an exhaustive statement of fundamental rights under our system of law. Lord Hoffmann's dictum applies to fundamental rights beyond the four corners of the Convention. In my view it is engaged in the present case. And it therefore seems to me remarkable that a modification of such a fundamental right can be achieved without the unambiguous legislative provision that would be required to alter a right arising under the Convention. To recognise that this right continues to exist at common law does not mean that every time the state wishes to withhold information from a claimant which, although vital to the defence of the claim, cannot be revealed for reasons of national security, it must submit to settlement of the claim. As the experience in Carnduff v Rock [2001] EWCA Civ 680, [2001] 1 WLR 1786 illustrates, it is perfectly proper and, more importantly, principled to find in such cases that they cannot be regarded as justiciable because no just trial is possible. Where insistence upon a fully fair hearing for a claimant will deny the defendant (or where it is not a party, the state) the protection of its vital interests that the law should recognise, then a truly fair proceeding is not possible and the trial should be halted in limine. Lord Mance has said that this is not an option that the law should readily contemplate. I agree but it seems to me to be a plainly more palatable course than to permit a proceeding in which one party knows nothing of the case made against him and which, by definition, cannot be subject to properly informed challenge. At least in the Carnduff situation both parties are excluded from the judgment seat. In the state of affairs that will result from the decision of the majority in this case, one party has exclusive access to that seat and the system of justice cannot fail to be tainted in consequence. Article 6 Article 6(1) of the European Convention on Human Rights and Fundamental Freedoms provides: In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. It is well established that the overriding right guaranteed by article 6(1), the right to a fair trial, is absolute see Montgomery v HM Advocate [2003] 1 AC 641, 673, Brown v Stott [2003] 1 AC 681, 719 and Dyer v Watson [2002] UKPC D1, [2004] 1 AC 379 at para 73. But the constituent rights comprised, whether expressly or implicitly, within article 6 are not themselves absolute: Brown v Stott at 704 per Lord Steyn. One of the implicit constituent rights of article 6 is that there should be equality of arms between the parties to proceedings. Of this constituent right, Lord Bingham said in Brown v Stott at 695 that it lay at the heart of the right to a fair trial. Equality of arms is the means by which a fair adversarial contest may take place. It requires that there must be an opportunity for all parties to be aware of and to comment on all the evidence adduced or observations submitted, with a view to influencing the courts decision Vanjak v Croatia (Application No 29889/04) (unreported) 14 January 2010, at para 52. Although, as a constituent element of article 6, equality of arms is not an absolute right, restrictions may only be placed upon it where it is strictly necessary and proportionate do so. A strong countervailing public interest is required to satisfy this requirement. Moreover, the restriction must be sufficiently counterbalanced by appropriate procedures allowed by the judicial authorities. And the restrictions must not be such as effectively to extinguish the very essence of the right. These propositions derive from a series of decisions of the European Court of Human Rights (ECtHR) which constitute a clear and constant line of authority emanating from Strasbourg. One may begin with Tinnelly & Sons Ltd v United Kingdom (1998) 27 EHRR 249. At para 72 the court said: 72. The Court recalls that article 6(1) embodies the right to a court, of which the right of access, that is the right to institute proceedings before a court in civil matters, constitutes one aspect. In this respect, the contracting states enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention's requirements rests with the Court. It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with article 6(1) if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. So the very essence of the right must not be impaired and the restriction on the constituent right must be proportionate. In Rowe and Davis v United Kingdom (2000) 30 EHRR 1 at para 61 the court said: . as the applicants recognised, the entitlement to disclosure of relevant evidence is not an absolute right. In any criminal proceedings there may be competing interests, such as national security or the need to protect witnesses at risk of reprisals or keep secret police methods of investigation of crime, which must be weighed against the rights of the accused. In some cases it may be necessary to withhold certain evidence from the defence so as to preserve the fundamental rights of another individual or to safeguard an important public interest. However, only such measures restricting the rights of the defence which are strictly necessary are permissible under article 6(1). Moreover, in order to ensure that the accused receives a fair trial, any difficulties caused to the defence by a limitation on its rights must be sufficiently counterbalanced by the procedures followed by the judicial authorities. A precisely similar formula was employed by the court in para 52 of its judgment in Jasper v United Kingdom (2000) 30 EHRR 441 and in para 52 of Pocius v Lithuania (Application No 35601/04) (unreported) 6 July 2010. Significantly, it was also used by the court at para 184 of its judgment in Kennedy v United Kingdom (Application No 26839/05) (unreported) 18 May 2010 where it was confirmed that these principles apply with equal force to civil proceedings. From these statements it is clear that the balancing exercise between, on the one hand, full access to all the elements of the equality of arms principle and, on the other, the withholding of evidence on the grounds of national security, must be conducted on the basis that only such restriction on full access to relevant material as is absolutely required can be countenanced. And even if that hurdle is surmounted, it must be shown that the limitation on the rights of the party who is denied such access is adequately offset by sufficient counterbalancing measures. It seems to me that measures can only be regarded as sufficient if they either wholly eliminate the disadvantage that would otherwise have accrued or if they diminish the difficulties deriving from the non disclosure of the relevant material to a condition of insignificance. Thus as the interveners, Justice and Liberty, have put it, restrictions on untrammelled access to relevant material can only be justified in a justiciable case where sufficient information about the substantive case which a party has to meet is disclosed so that he may effectively challenge it. Otherwise, the limitation on the right to equality of arms can in no sense be regarded as having been sufficiently counterbalanced. A function of the counterbalancing measures is to ensure that the very essence of the right is not impaired. It is, I believe, important to have a clear understanding of what is meant by the essence of the right. If equality of arms lies at the heart of a fair trial, the essence of the right must surely include the requirement that sufficient information about the case which is to be made against him be given to a party so that he can give meaningful instructions to answer that case. In Secretary of State for the Home Department v MB [2007] UKHL 46, [2008] AC 440, a case involving a challenge to a non derogating control order, Lord Bingham referred to the general acceptance by the House of Lords in R (Roberts) v Parole Board [2005] UKHL 45, [2005] 2 AC 738 that there was a core, irreducible, minimum entitlement for the appellant, as a life sentence prisoner, to be able effectively to test and challenge any evidence which decisively bore on the legality of his detention. That irreducible minimum entitlement also applied in the case of a control order: see para 43 of MB. The opportunity to know and effectively test the case against him (the core irreducible minimum entitlement) surely captures the essence of the right. And it seems to me that the essence of the right cannot change according to the context in which it arises. Whether a hearing should be conducted in private or in open session; whether information about the case against an individual should be provided by way of full disclosure or by redacted statements or in the form of a summary or gist; whether witnesses should be anonymised all of these are variables to which recourse may be had in order to reflect the context in which the requirements of article 6 must be examined. But if the essence of the right is to be regarded (as I believe it must be) as the indispensable and necessary attributes of the right as opposed to those which it may or may not have, its essence cannot alter according to the circumstances in which it falls to be considered. Para 217 of the European Court of Human Rights judgment in A v United Kingdom (2009) 49 EHRR 625 has been cited by Lord Mance as an example of the emphasis given by the court to the context in which the requirements of the right were being considered. That case involved a challenge to the decision of the Home Secretary to certify that each of the applicants should be detained because he reasonably believed that their presence in the United Kingdom posed a threat to national security. As it seems to me the only relevant part of para 217 is contained in the following passage: In view of the dramatic impact of the lengthy and what appeared at that time to be indefinite deprivation of liberty on the applicants fundamental rights, article 5(4) must import substantially the same fair trial guarantees as article 6(1) in its criminal aspect This says nothing about the essence of the right to equality of arms. It merely (but unsurprisingly) confirms that if ones liberty is to be deprived on foot of the order of the Secretary of State, the same guarantees as are available to defendants in a criminal trial should be extended to those who were the subject of detention orders. Lord Mance also expressed agreement with the decision of the Court of Appeal in R(AHK) v Secretary of State for the Home Department (Practice Note) [2009] EWCA Civ 287; [2009] 1 WLR 2049 where, according to Lord Mances analysis, it was held that a claim for judicial review of the refusal of an application for British citizenship could be distinguished from the requirements prescribed by A v United Kingdom on the ground that the latter cases focus was on detention. I do not agree that the AHK case distinguished A v United Kingdom or, at least, that it suggested (contra the decision in A v UK), that abrogation of the right of a claimant to know the essential elements of the case to be made against him was permissible. The AHK case was principally concerned with the question whether a special advocate should be appointed. In the list of principles to be applied in cases where the Secretary of State has decided that the reasons for refusing British citizenship could not be fully disclosed Sir Anthony Clarke MR at para 37 (iv) (d) said: All depends upon the circumstances of the particular case, but it is important to have in mind the importance of the decision from the claimant's point of view, the difficulties facing the claimant in effectively challenging the case against him in open court and whether the assistance of a special advocate will or might assist the claimant in meeting the Secretary of State's case and the court in arriving at a fair conclusion. Underlying this statement is the acknowledgment that the claimant must be assisted in meeting the Secretary of States case. There is no reason to suppose that the Court of Appeal would have endorsed a procedure where the claimant was effectively prevented from knowing and meeting the essential case made against him. At a theoretical level it is possible that advocates retained to consider material that cannot be disclosed to a claimant can supply the vital ingredient of ensuring that the case made against the claimant is effectively met. In such circumstances the essence of the article 6 right is not lost. But AHK is not authority for the proposition that where that indispensable requirement cannot be fulfilled and the claimant is prevented from presenting a fully informed opposition to the case made against him, no violation of article 6 arises because the consequences for the claimant are less serious than the deprivation of his liberty. It is, I believe, crucial to a proper understanding of ECtHR jurisprudence in this area that the essence of the right under article 6 is that a party is entitled to know and effectively challenge the case made against him. Equality of arms, or a properly set adversarial contest, requires that both parties have equal, or at least a sufficient, access to the material that will be deployed against them. The adversarial contest sets the context and the adversarial contest arises in relation to article 6 rights as opposed to other Convention rights. Thus cases such as Leander v Sweden (1987) 9 EHRR 433 (which was concerned with alleged violations of articles 8, 10 and 13) and Esbester v United Kingdom (1998) 18 EHRR CD72 (which dealt with claims under article 8 and 13) are of little assistance in determining the requirements of the equality of arms principle under article 6. Equality of arms did not arise in these cases. No adversarial contest was engaged. Whether it is legitimate to withhold information in an article 8 or an article 10 context has nothing to do with the propriety of its non disclosure where parties are seeking a resolution of competing cases from a properly informed and impartial tribunal. Articles 8 and 10 are qualified rights. Interference with those rights may be justified on grounds specified in the articles. By contrast, article 6 is not subject to exemption from the effect of interference. Kennedy v United Kingdom involved complaints made by the applicant to the Investigatory Powers Tribunal (IPT) that his communications were being intercepted. The applicant had sought specific directions regarding the conduct of the proceedings in order to ensure the protection of his Convention rights under article 6 (1). In particular, he asked that his arguments and evidence be presented at an oral hearing; that all hearings be conducted in public; that there be mutual disclosure and inspection between the parties of all witness statements and evidence upon which parties sought to rely and exchange of skeleton arguments in relation to planned legal submissions; that evidence of each party be heard in the presence of the other party or their legal representatives, with oral evidence being open to cross examination by the other party; that any opinion received from a commissioner be disclosed to the parties; and that, following its final determination, the IPT state its findings and give reasons for its conclusions on each relevant issue. IPT had held that the applicants proceedings before that tribunal engaged article 6. That finding was somewhat diffidently contested before ECtHR, the government contending that there was no civil right involved. It was not contended, as it might well have been, that article 6, according to the courts constant jurisprudence, did not apply to cases of surveillance. ECtHR proceeded on the assumption that article 6 did apply. It is significant that the courts judgment is largely preoccupied with a consideration of the various specific claims made by the applicant about how the proceedings should be conducted. The question of providing him with sufficient information in the form of a gist or summary to meet the case against him did not feature in the list of those claims. The question of supplying redacted documents is discussed, however, and the courts decision seems largely to have been influenced by the argument advanced on behalf of the government that it was simply not possible to produce the information that the applicant sought because national security would inevitably be compromised. That stance is entirely consistent with the view that surveillance cases do not engage article 6. It is surprising that more was not made of this by the government and that the court did not address the issue directly. If it had done and if it had followed its own constant jurisprudence, the anomaly, which I believe the decision in Kennedy represents, would have been avoided. In Klass v Federal Republic of Germany (1978) 2 EHRR 214 at para 75 ECtHR said this about secret surveillance: As long as it remains validly secret, the decision placing someone under surveillance is thereby incapable of judicial control on the initiative of the person concerned, within the meaning of article 6; as a consequence, it of necessity escapes the requirements of that article. The logic of this position is inescapable. The entire point of surveillance is that the person who is subject to it should not be aware of that fact. It is therefore impossible to apply article 6 to any challenge to the decision to place someone under surveillance, at least until notice of termination of the surveillance has been given. This approach has been consistently applied by the court. So for instance in Rotaru v Romania (2000) 8 BHRC 449 at para 69 the court said where secret surveillance is concerned, objective supervisory machinery may be sufficient as long as the measures remain secret. It is only once the measures have been divulged that legal remedies must become available to the individual. It is precisely because the fact of surveillance must remain secret in order to be efficacious that article 6 cannot be engaged. It appears to me, therefore, that the decision in Kennedy ought to have been made on the basis that article 6 was not engaged because the issues that the case raised were simply not justiciable. That the decision is out of line with the established jurisprudence of the court is perhaps best exemplified by contrasting it with the approach of the Grand Chamber in A v United Kingdom as applied by the House of Lords in Secretary of State for the Home Department v AF (No 3) [2010] 2 AC 269. At para 59 Lord Phillips said this about the ratio in A v United Kingdom: I am satisfied that the essence of the Grand Chamber's decision lies in para 220 and, in particular, in the last sentence of that paragraph. This establishes that the controlee must be given sufficient information about the allegations against him to enable him to give effective instructions in relation to those allegations. Provided that this requirement is satisfied there can be a fair trial notwithstanding that the controlee is not provided with the detail or the sources of the evidence forming the basis of the allegations. Where, however, the open material consists purely of general assertions and the case against the controlee is based solely or to a decisive degree on closed materials the requirements of a fair trial will not be satisfied, however cogent the case based on the closed materials may be. Whilst Lord Phillips at para 65 implied that the Grand Chambers decision (that non disclosure cannot deny a party knowledge of the essence of the case against him) might apply only where the consequences for an individual were as severe as those normally imposed under a control order, there are indications in his and other speeches that the principle is of general application. In particular, Lord Phillips rejected the suggestion that there should be a different standard where the control order did not amount to detention para 63 and at para 64 he said this: The best way of producing a fair trial is to ensure that a party to it has the fullest information of both the allegations that are made against him and the evidence relied upon in support of those allegations. Where the evidence is documentary, he should have access to the documents. Where the evidence consists of oral testimony, then he should be entitled to cross examine the witnesses who give that testimony, whose identities should be disclosed. Both our criminal and our civil procedures set out to achieve these aims. In some circumstances, however, they run into conflict with other aspects of the public interest, and this is particularly the case where national security is involved. How that conflict is to be resolved is a matter for Parliament and for government, subject to the law laid down by Parliament. That law now includes the Convention, as applied by the HRA. That Act requires the courts to act compatibly with Convention rights, in so far as Parliament permits, and to take into account the Strasbourg jurisprudence. That is why the clear terms of the judgment in A v United Kingdom resolve the issue raised in these appeals. The views of Lord Hope were equally clear and comprehensive. At para 83 he said: The approach which the Grand Chamber has adopted is not, as it seems to me, at all surprising. The principle that the accused has a right to know what is being alleged against him has a long pedigree. As Lord Scott of Foscote observed in A v Secretary of State for the Home Department [2005] 2 AC 68, para 155, a denunciation on grounds that are not disclosed is the stuff of nightmares. The rule of law in a democratic society does not tolerate such behaviour. The fundamental principle is that everyone is entitled to the disclosure of sufficient material to enable him to answer effectively the case that is made against him. Lady Hale in para 103 said that Strasbourg had now made it entirely clear what the test of a fair hearing is. The test was whether the controlled person had had the possibility to challenge effectively the allegations made against him. He had to have sufficient information about those allegations to be able to give effective instructions to his special advocate. If the majority in this appeal are right, however, the test of a fair hearing in Mr Tariqs case is different. He need not be given sufficient information about the allegations against him to challenge them effectively or to give effective instructions to his special advocate. For my part I cannot understand why this should be so. The result of the decision of the majority is to create a different class of case from that where what Lord Brown has helpfully described as A type disclosure must be given. The eligibility criteria for inclusion in this privileged group are not clear. Certainly, the class is not confined to those whose liberty is at stake, as the speeches in AF (No 3) make clear. And, presumably, it must also include freezing order cases Kadi v Council of the European Union Joined Cases C 402/05 P and C 415/05 P [2009] AC 1225, as applied by the European General Court in Kadi II Case T 85/09 [2011] 1 CMLR 697. If A type disclosure is required in challenges to freezing orders, does it extend to property rights more generally? If it does, why should property rights be distinguished from loss of employment cases? After all, loss of livelihood may be just as devastating as having ones assets frozen. It seems to me that there is no principled basis on which to draw a distinction between the essence of the right to a fair trial based on the nature of the claim that is made. A fair trial in any context demands that certain indispensable features are present to enable a true adversarial contest to take place. That conclusion is reflected in the later decision of ECtHR of Uukauskas v Lithuania (Application No 16965/04) (unreported) 6 July 2010. Lord Mance has sought to distinguish this case on the basis that the procedure adopted was contrary to national law. But that consideration was in no sense central to the courts reasoning. On the contrary, the observation (at para 48) that Lithuanian law and judicial practice provide that such information may not be used as evidence in court against a person unless it has been declassified, and that it may not be the only evidence on which a court bases its decision was made in order to draw a contrast with the view that documents which constitute state secrets may only be disclosed to persons who possess the appropriate authorisation. It is quite clear that the violation of article 6 which the court held to have occurred was based on conventional ECtHR principles. This much is evident from para 51 where the court said; In conclusion, therefore, the Court finds that the decision making procedure did not comply with the requirements of adversarial proceedings or equality of arms, and did not incorporate adequate safeguards to protect the interests of the applicant. It follows that there has been a violation of article 6(1) in the present case. The unavoidable result from this case is that Strasbourg has again made it entirely clear what the test for a fair hearing is where someone seeks to challenge a decision that he should be removed from a firearms register. He is entitled to know the reasons that this has happened in order to be able to effectively challenge them. If that is so, why should someone who has been dismissed from his employment be in a less advantageous position? Conclusions I have concluded that the Court of Appeal was correct in finding that where article 6 is engaged, it is necessary for a party to proceedings to be provided with sufficient information about the allegations against him to allow him to give effective instructions to his legal representatives and, if one has been appointed, the special advocate so that those allegations can be effectively challenged. I would therefore dismiss the appeal by the Home Office. For the reasons given by Lord Mance, with which I agree, I would hold that the closed material procedure provided for in the Employment Tribunal legislative scheme is not in principle incompatible with article 6 and EU law. I would therefore also dismiss the cross appeal. LORD DYSON I agree that for the reasons given by Lord Mance the Court of Appeal was correct to hold that the closed material procedure provided for in the Employment Tribunal legislative scheme, including its provision for the appointment of special advocates is in principle compatible with article 6 of the European Convention on Human Rights (ECHR) and EU law. I also agree that the Court of Appeal was wrong to find that, in all cases in which article 6 (civil) is engaged, it is necessary for an individual to be provided with sufficient information about the allegations against him (the gist) to enable him to give effective instructions to his legal representatives and the special advocate (where one has been appointed) in relation to those allegations. It is on this second question that I wish to add some words of my own. General observations about closed procedures The article 6 right to a fair trial is absolute: see, for example, per Lord Hope in Dyer v Watson [2002] UKPC D1 [2004] 1 AC 379 at para 73. In principle, a fair trial presupposes adversarial proceedings and equality of arms. Thus, for example, in Vanjak v Croatia (Application No 29889/04) (unreported) 14 January 2010, at para 52, the European Court of Human Rights said: . . independently of whether the case is a civil, criminal or disciplinary one, the right to adversarial proceedings has to be complied with. That right means in principle the opportunity for the parties to court proceedings falling within the scope of article 6 to have knowledge of and comment on all evidence adduced or observations submitted, with a view to influencing the courts decision. But the constituent elements of a fair process are not absolute or fixed: see Brown v Stott [2003] 1 AC 681 at 693D E per Lord Bingham; 719G H per Lord Hope; and 727H per Lord Clyde. This was re affirmed by the ECtHR in relation to article 5(4) in A v United Kingdom (2009) 49 EHRR 625 at para 203: The requirement of procedural fairness under article 5(4) does not impose a uniform, unvarying standard to be applied irrespective of the context, facts and circumstances. Moreover, it has been recognised by the ECtHR that there are circumstances where a limitation on what would otherwise be a general rule of fairness is permissible. Thus in Rowe and Davis v United Kingdom (2000) 30 EHRR 1, at para 61, the European Court of Human Rights said: the entitlement to disclosure of relevant evidence is not an absolute right. In any criminal proceedings there may be competing interests, such as national security or the need to protect witnesses at risk of reprisals or keep secret police methods of investigation of crime, which must be weighed against the rights of the accused. In some cases it may be necessary to withhold certain evidence from the defence so as to preserve the fundamental rights of another individual or to safeguard an important public interest. However, only such measures restricting the rights of the defence which are strictly necessary are permissible under article 6(1). Moreover, in order to ensure that the accused receives a fair trial, any difficulties caused to the defence by a limitation on its rights may be sufficiently counterbalanced by the procedures followed by the judicial authorities. Prima facie, a closed material procedure denies the party who is refused access to the closed material the right to full and informed participation in adversarial proceedings and to that extent is inconsistent with the principle of equality of arms. There are two factors which the Secretary of State says are sufficient to counterbalance the effects of the closed material procedure in the present case. The first is that there is scrutiny by an independent court (the Employment Tribunal) fully appraised of all relevant material and experienced in dealing with discrimination cases. The second is the testing by a special advocate of the Home Offices case in closed session. But are these factors sufficient in circumstances where the gist of the Home Office case is not disclosed to the claimant? How can the special advocate represent the claimants interests if the claimant is unable to give full instructions to him? The answer to these questions in the context of proceedings involving the liberty of the subject is clear. If the special advocate is unable to perform his function in any useful way unless the detainee is provided with sufficient information about the allegations to enable him to give effective instructions to the special advocate, then there must be disclosure to the detainee of the gist of that information: see A v United Kingdom at para 220 and, in the context of control orders, Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28, [2010] 2 AC 269. In such a case, there must be disclosure, regardless of how important the competing national interest may be in favour of withholding the information. The consequence of this will inevitably be that in some cases the prosecuting or detaining authorities will be faced with the invidious choice of disclosing sensitive information or risking losing the case. But what is the position in cases which do not involve the liberty of the subject? For the reasons given by Lord Mance and Lord Brown, I agree that neither A v United Kingdom nor AF (No3) decides this question. Mr Allen QC and Mr Howell QC submit that the reasoning in A v United Kingdom is not limited to cases involving the liberty of the subject and should be applied to civil claims too. They submit that, properly understood, the Strasbourg jurisprudence does not support the proposition that a different approach may be adopted to the problem in civil claims. They also say that to distinguish between the requirements of article 6 on the basis of a classification of the type of case involved is unprincipled and will give rise to uncertainty and confusion. But it is clear from para 203 of A v United Kingdom itself that article 6 does not require a uniform approach to be adopted in all classes of case. In Kennedy v United Kingdom (Application No 26839) (unreported) 18 May 2010, the European Court of Human Rights said that the entitlement to disclosure of relevant evidence is not an absolute right (para 187); the character of the proceedings may justify dispensing with an oral hearing (para 188); and the extent to which the duty to give reasons applies may vary according to the nature of the decision and must be determined in the light of the circumstances of the case (para 189). I therefore agree with what Sir Anthony Clarke MR said when giving the judgment of the court in R(AHK) v Secretary of State for the Home Department (Practice Note) [2009] EWCA Civ 287, [2009] 1 WLR 2049 at para 45: The above analysis shows that the European Court of Human Rights considers each class of case separately. The issues in this class of case are a far cry from the issues that arise in the criminal cases discussed by the court in A v United Kingdom 19 February 2009. Moreover, without in any way minimising the effect of being refused British citizenship, the consequences of a deprivation of (or even interference with) liberty are plainly very much more serious. In these circumstances we do not think that the approach of the court in criminal cases or in cases of deprivation or interference with liberty can or should be applied directly to this class of case. That is not to say that, as explained earlier, each individual is not entitled to a fair hearing of his application for judicial review. Nevertheless, I would accept that the general rule is that an applicant should enjoy the full panoply of article 6 rights, including full disclosure of all relevant material and that any limitation on the ordinary incidents of article 6 requires careful justification. In deciding how to strike the balance between the rights of the individual and other competing interests, the court must consider whether scrutiny by an independent court and the use of special advocates are sufficient to counterbalance the limitations on the individuals article 6 rights. In many cases, an individuals case can be effectively prosecuted without his knowing the sensitive information which public interest considerations make it impossible to disclose to him. For example, in a discrimination claim such as that of Mr Tariq, the central issue may well not be whether the underlying security concerns are well founded, but rather whether the decision making process was infected by discrimination. As Mr Eadie QC points out, Mr Tariqs appeal is not against the assessments or conclusions of the Home Office as to the withdrawal of his security clearance. SVAP provides the expert forum for considering such issues. It was not for the Employment Tribunal to determine whether, for example, it believed or did not believe Mr Tariqs assertions about the nature of his relationships with persons involved in or associated with terrorist activities. Thus in the conduct of a discrimination claim, the special advocate and indeed the judge can to a considerable extent test the case of the alleged discriminator without the input of the claimant. The surveillance/security vetting cases Lord Mance has referred at para 68 to what he describes as the clear line of jurisprudence culminating in the Courts decision in Kennedy which demonstrates that, in civil cases, it is not necessary to provide the gist of information which the interests of national security require to be kept secret. I think that it is necessary to examine the authorities with some care to see precisely what these cases do establish. In the absence of special circumstances, our courts should follow any clear and constant jurisprudence of the European Court of Human Rights: see R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23, [2003] 2 AC 295 at para 26. The first case to note is Klass v Federal Republic of Germany (1978) 2 EHRR 214. This involved a challenge to legislation which permitted the authorities to open and inspect mail and listen to telephone conversations in order to protect, inter alia, against imminent dangers threatening the existence or the security of the state. The challenge was based on an alleged breach of articles 6, 8 and 13 of the European Convention on Human Rights. At para 75, the European Court of Human Rights said : As long as it remains validly secret, the decision placing someone under surveillance is thereby incapable of judicial control on the initiative of the person concerned, within the meaning of article 6; as a consequence, it of necessity escapes the requirements of that article. The cases of Leander v Sweden (1987) 9 EHRR 433 and Esbester v United Kingdom (1993) 18 EHRR CD72 are discussed by Lord Mance at paras 28 to 32 above. They can be considered together, although at first sight it may seem odd to refer to them at all since they are not article 6 cases. The claim in Leander was brought under articles 8, 10 and 13 and in Esbester under articles 8 and 13. I accept that what may be a proportionate and justified interference with a persons rights under article 8 may not correspond precisely with what may be a strictly necessary and sufficiently counterbalanced invasion of his right to a fair trial under article 6. Moreover, it is right to point out that Leander and Esbester were referred to by the European Court of Human Rights in Kennedy, but only in its discussion of the claims under articles 8 and 13: see paras 122, 152, 195 and 197. The section in Kennedy which deals with article 6 does not refer to either of these authorities. Mr Eadie accepts that Leander and Esbester did not concern article 6. He relies on them as being directly analogous to the present case, relating to security vetting in an employment context. Issues of fairness were central to the issues arising under articles 8 and 10 and the right to an effective remedy under article 13. The European Court of Human Rights found that the vetting systems in those cases were compatible with article 8 and upheld the right of the state not to disclose the reasons for the rejection of the applicants application for employment as a result of a security vetting process. Whereas Klass is a case where it seems to have been held that article 6 did not apply at all and Leander and Esbester are not article 6 cases, there can be no doubt that Kennedy is an article 6 case. In Kennedy (which was decided after the decision of the Court of Appeal in the present case), the applicant complained about an alleged interception of his communications, claiming that it was a violation of his article 8 rights. He also complained that the hearing before the Investigatory Powers Tribunal (IPT) was not attended by adequate safeguards as required under article 6 and that, as a result, he had been denied an effective remedy under article 13. Lord Mance has set out the relevant passages of the judgment at paras 34 and 35 above. The submissions of the parties summarised at paras 180 to 183 of the judgment were directed to the question of what article 6 required. It is of note that the Government submitted that the scope of the article 6 guarantees in that case should be in harmony with the Courts approach to judicial control under article 8. The courts assessment at paras 184 to 191 was explicitly on the basis of the application of article 6. In contrast with para 75 of Klass, the court did not say that the case escapes the requirements of [article 6]. Thus at para 186, the court emphasised that the proceedings related to secret surveillance measures and that there was therefore a need to keep secret sensitive and confidential information. The court continued: this consideration justifies restrictions in the IPT proceedings. The question is whether the restrictions, taken as a whole, were disproportionate or impaired the very essence of the applicants right to a fair trial. This is the classic approach to article 6. The courts conclusion at para 190 was that the restrictions on the procedure before the IPT did not violate the applicants right to a fair trial. In reaching this conclusion, the court took into account the breadth of access to the IPT (an independent court) enjoyed by those complaining about interception and the absence of any evidential burden to be overcome in order to lodge an application with the IPT. It concluded: In order to ensure the efficacy of the secret surveillance regime, and bearing in mind the importance of such measures to the fight against terrorism and serious crime, the Court considers that the restrictions on the applicants rights in the context of the proceedings before the IPT were both necessary and proportionate and did not impair the very essence of the applicants article 6 rights. Mr Allen and Mr Howell submit that Kennedy should be understood as a decision that, so long as the very subject matter of the dispute must justifiably remain secret, is effectively non justiciable and the substantive protections that article 6 contains cannot be applied in substance to its resolution. In other words, they submit that the decision in Kennedy should be analysed as an application of para 75 of Klass. If, however, the court had intended to adopt this approach, it would have said so. Instead, it clearly purported to apply article 6. Kennedy is a striking decision. But for the security issues raised in the case, it is surely inconceivable that the court would have concluded that the restrictions on the applicants rights before the IPT (a completely closed procedure without even the protection of a special advocate) were necessary and proportionate and did not impair the very essence of the applicants article 6 rights. The crucial reason for this conclusion was that the restrictions on the applicants rights were necessary in order to ensure the efficacy of the secret surveillance regime. Kennedy was a case about a secret surveillance regime by interception of his communications. This same language was used by the court in Klass at para 58 to justify the interference with the applicants article 8 rights in that case (another interception of communications case): the fact of not informing the individual once surveillance has ceased cannot itself be incompatible with this provision, since it is this very fact which ensures the efficacy of the interference. The same reasoning appears in the security vetting cases of Leander and Esbester. Thus, for example, at para 66 of Leander, the court said that the very fact that the information released to the military authorities was not communicated to Mr Leander cannot by itself warrant the conclusion that the interference was not necessary in a democratic society in the interests of national security, as it is the very absence of such communication which, at least partly, ensures the efficacy of the personnel control procedure. In support of this proposition, the court referred to para 58 of Klass. There is similar reasoning in the Commissions decision in Esbester. In my view, the significance of Kennedy is that it is a decision explicitly based on an application of article 6 which adopted the same approach as that which was taken by the court in applying articles 8 and 13 in Leander and by the Commission in Esbester. This provides clear support for the submission of Mr Eadie that, for the purposes of the issues that arise in the present case, there is no material difference between articles 8 and 13 on the one hand and article 6 on the other. I do not consider that, if the complaints in Leander and Esbester had been based on article 6, the outcome in these cases would have been different. The other point to emphasise is that these cases show that there is no material difference between surveillance cases (such as Klass and Kennedy) and security vetting cases (such as Leander and Esbester). In the former, restrictions on an individuals right to disclosure and participation in a hearing will be considered necessary and proportionate if they are required in order to ensure the efficacy of the secret surveillance regime. In the latter, the restrictions will be considered necessary and proportionate if they are required in order to ensure the efficacy of the personnel control procedure. Mr Allen and Mr Howell submit that the limited significance of Leander, Esbester and Kennedy is demonstrated by the decision of the ECtHR in Uukauskas v Lithuania (Application No 16965/04) (unreported) 6 July 2010. Lord Mance has set out the facts at para 37 above. I find this a difficult decision to interpret. On the one hand, the court approached the matter in conventional article 6 terms: see para 46 where it noted that (i) the entitlement to disclosure of relevant evidence is not an absolute right; (ii) it may be necessary to withhold certain evidence to safeguard an important public interest; but (iii) only such measures restricting the rights of the defence which are strictly necessary are permissible and there must be sufficient counterbalancing. At para 48 the court referred to the fact that, according to Lithuanian law and judicial practice, secret information may not be used as evidence in court unless it has been declassified and it may not be the only evidence on which a court bases its decision. It is not clear to me to what extent the court based its conclusion that there had been a breach of article 6 on the fact that use of the secret material against the applicant (which was of decisive importance to his case) was contrary to Lithuanian law. But I accept that on the face of it, this is an article 6 decision which does not sit easily with the surveillance/vetting procedure cases to which I have referred. There is no reference to them. There is no weighing of the national interest in the protection of the community against crime against the general right to adversarial proceedings. For these reasons and because it is unclear to what extent the position under Lithuanian law influenced the decision, I agree with Lord Mance that this decision does not cast doubt on the approach adopted in the surveillance/security vetting cases. Unlike Lord Mance, however, I doubt whether the fact that there is no procedure under Lithuanian law for the use of a special advocate to consider closed material is of significance, since, as was pointed out by the European Court of Human Rights in Kennedy at para 187, the procedure before the IPT did not permit the use of special advocates either. In my judgment, these decisions show that there is a clear line of authority to support the proposition that, in surveillance and security vetting cases, an individual is not entitled to full article 6 rights if to accord him such rights would jeopardise the efficacy of the surveillance or security vetting regime itself. On the material shown to us, the line of authority may not be very long, but in my view it is sufficiently clear that it should be followed by our courts. The cases show, in particular, that there is no right to be given the gist of relevant information if and to the extent that this would jeopardise the efficacy of the surveillance or security vetting regime. The present case I have no doubt that article 6 does not require that Mr Tariq should be given the gist of information which would damage or jeopardise national security. First, and above all, this is a security vetting case and in such a case article 6 does not require gisting if and in so far as it would jeopardise the efficacy of the personnel control procedure. That is a sufficient reason for allowing the Home Office appeal. There is no sensible basis for distinguishing the present case from Leander and Esbester. In those cases (which concerned a complaint about the manner in which security vetting was conducted where the applicant was applying for a sensitive post), article 8 did not require disclosure of the security material. In the present case, the complaint is about the decision not to allow a person to remain in a post where security vetting was employed. There can be no distinction in principle between the two cases. A related point is that in all cases where security clearance is sought, it is because the individual has volunteered to undergo the clearance process for the purpose of doing (or continuing to do) the job that he is employed to do. He must be taken to know that checks will be made that may produce material that cannot be shown to him. As Lord Hope points out, he is a volunteer. I would add the following points which reinforce the Home Office case. First, the subject matter of the claim is a claim for damages for alleged discrimination. I do not wish to underestimate the importance of the right not to be subjected to discrimination. But on any view, discrimination is a less grave invasion of a persons rights than the deprivation of the right to liberty. Secondly, the issues in the present case are such that the presence of an independent court and a special advocate are likely to go a long way to making up for the fact that Mr Tariq will be unable fully to participate in the proceedings. As I have explained at para 147 above, there is likely to be only limited (if any) scope for Mr Tariq to be able to give instructions to the special advocate which are necessary to enable her to test the Home Office case effectively. Conclusion I would, therefore, allow the Home Offices appeal primarily on the ground that this case concerns a decision taken in the context of security vetting. In other classes of civil case which are outside the surveillance/security vetting context, the balance between the individuals article 6 rights and other competing interests may be struck differently. It is said that this gives rise to undesirable uncertainty. But much of the content of the European Convention on Human Rights is about striking balances. This is sometimes very difficult and different opinions can reasonably be held. As a consequence, outcomes are sometimes difficult to predict. This is inevitable. But it is not a reason for striving to devise hard and fast rules and rigid classifications. It is, however, at least possible to say that, in principle, article 6 requires as much disclosure as possible. It is very easy for the state to play the security card. The court should always be astute to examine critically any claim to withhold information on public interest grounds. For the reasons that I have given, I would allow the Home Office appeal. I would also dismiss the appeal of Mr Tariq for the reasons given by Lord Mance. LORD PHILLIPS, LADY HALE AND LORD CLARKE I agree that, for the reasons given by Lord Hope, Lord Brown, Lord Mance and Lord Dyson, the appeal of the Home Office should be allowed and that the cross appeal of Mr Tariq should be dismissed. LORD RODGER Lord Rodger, who died before judgment was given in this case, had indicated that he agreed with the judgments of Lord Mance and Lord Brown.

This appeal concerns the permissibility of a procedure whereby a claimant in employment tribunal proceedings may be excluded along with his representatives from certain aspects of those proceedings on grounds of national security. In particular the question arises as to whether such a procedure, known as a closed material procedure, is compatible with European Union law and the European Convention on Human Rights. Mr Tariq was employed as an immigration officer with the Home Office until 2006 when he was suspended and his security clearance withdrawn. The background for these decisions was the arrest of Mr Tariqs brother and cousin during an investigation into a suspected plot to mount a terrorist attack on transatlantic flights. Mr Tariqs cousin was convicted in 2008 of various offences in relation to that plot. No information suggested that Mr Tariq had himself been involved in any terrorism plot. Mr Tariq commenced proceedings in the Employment Tribunal claiming direct and indirect discrimination on grounds of race and religion. He alleged that the Home Office had relied on stereotypical assumptions about him, Muslims and individuals of Pakistani origin such as susceptibility to undue influence and that the Home Office had indirectly discriminatory policies and procedures. The Home Office denied this and stated that its decisions were based on Mr Tariqs association with individuals suspected of involvement in terrorist activities and the risk of their attempting to exert influence on him to abuse his position. Section 10(6) of the Employment Tribunals Act 1996 provides that the Secretary of State may make regulations that enable a tribunal to adopt a closed material procedure if it considers this expedient in the interests of national security. Rule 54(2) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (the Regulations) provides for the adoption of a closed material procedure if the tribunal so orders. Schedule 2 provides for the use of special advocates, whose role is to represent a claimants interests so far as possible in relation to the aspects closed to him and his representatives. The Employment Tribunal made an order for a closed material procedure, directing that Mr Tariq and his representatives should be excluded from the proceedings when closed evidence or documents were being considered. Mr Tariq appealed the order to the Employment Appeal Tribunal. The appeal was dismissed and a further appeal was dismissed by the Court of Appeal. The Court of Appeal, however, declared that Article 6 of the European Convention on Human Rights required Mr Tariq to be provided with the allegations being made against him in sufficient detail to enable him to give instructions to his legal team so that those allegations can be challenged effectively. This requirement is known as gisting. The Home Office appealed to the Supreme Court against the declaration and Mr Tariq cross appealed against the conclusion that a closed material procedure was permissible. The Supreme Court by a majority of 8 1 allows the Home Offices appeal and sets aside the declaration made by the Court of Appeal requiring the provision of a gist. Lord Kerr dissents. The Supreme Court unanimously dismisses Mr Tariqs cross appeal, holding that a closed material procedure is compatible with Article 6 of the European Convention on Human Rights and EU Law. Mr Tariqs Cross Appeal The issue in the cross appeal was whether the provisions in the Regulations providing for a closed material procedure were contrary to EU law or the European Convention on Human Rights. It is a basic principle of EU law that national law should provide effective legal protection of EU law rights. Those rights include the right not to be discriminated against on grounds of race or religion. As to whether the closed material procedure provided effective legal protection, the case law of the European Court of Justice is clear that EU law will look for guidance on the subject in the case law of the European Court of Human Rights. That Court has established in a line of cases culminating in Kennedy v UK that the demands of national security may necessitate a system for determining complaints under which a claimant is, for reasons of national security, unable to know the secret material by reference to which his complaint is determined. The tests are whether the system is necessary and whether it contains sufficient safeguards. On the facts, both were satisfied. The system was necessary because security vetting is a highly sensitive area in which integrity of sources of information and the means of obtaining it must be protected. The alternatives of the Home Office routinely having to pay unmeritorious claims or the courts refusing to hear claims at all are not possibilities that the law should readily contemplate. The rule of law must, so far as possible, stand for the objective resolution of civil disputes on their merits by a court which has before it material enabling it to do so. The system contained sufficient safeguards in the form of special advocates, who can usefully protect the claimants interests. For these reasons the use of the closed material procedure in this case was lawful and the cross appeal must be dismissed. The Home Offices Appeal The question in the appeal was whether there is an absolute requirement that a claimant should be able to see the allegations against him in sufficient detail to give instructions to his legal team to enable the allegations to be challenged effectively. Mr Tariq argued that the European Convention on Human Rights contained such a principle. The Supreme Court, however, held that the line of cases culminating in Kennedy v UK recognised that there was no absolute requirement. Article 6 of the European Convention on Human Rights provides the right to a fair trial. The European Court of Human Rights has held that where the liberty of the subject is involved, Article 6 requires the provision of a gist as described by the Court of Appeal. In cases such as the present not involving the liberty of the subject, however, the question is whether the use of the closed material procedure will impair the very essence of the right to a fair trial. That cannot be said to be so in this case, as Mr Tariqs claim will be determined by an independent and impartial tribunal and the disadvantages that the procedure gives rise to will as far as possible be minimised. The appeal was therefore allowed. Lord Kerr dissented. He held, first, that the withholding of information from a claimant which is then deployed to defeat his claim is a breach of his fundamental common law right to a fair trial. The removal of that right can only be achieved by legislation framed in unambiguous language. Secondly, such withholding also constitutes a breach of a claimants Article 6 right to a fair trial. Kennedy v UK was an anomaly. Lord Kerr would therefore have dismissed the appeal.

The issues in this appeal are (i) whether the Protection from Eviction Act 1977 (PEA 1977) requires a local housing authority to obtain a court order before taking possession of interim accommodation it provided to an apparently homeless person while it investigated whether it owed him or her a duty under Part VII of the Housing Act 1996 (the 1996 Act), and (ii) whether a public authority, which evicts such a person when its statutory duty to provide such interim accommodation ceases without first obtaining a court order for possession, violates that persons rights under article 8 of the European Convention on Human Rights (ECHR). Factual background CN was born on 3 August 1994. His mother (JN) applied to the London Borough of Lewisham (Lewisham) for assistance under Part VII of the 1996 Act in August 2009 and Lewisham arranged for a housing association to grant her an assured shorthold tenancy which commenced in May 2010. JN and her family became homeless in November 2011 after the housing association obtained an order for possession because of arrears of rent. JN again applied to Lewisham for homelessness assistance. On 15 November 2011 Lewisham, fulfilling its duty under section 188 of the 1996 Act, granted JN a licence of a five bedroom house with communal kitchen and bathroom pending its inquiries under section 184 of that Act as to whether she was eligible for assistance and, if so, what duty, if any, was owed to her. The property was privately owned. Its owner licensed it to Lewisham for use as temporary accommodation for homeless persons. On 15 December 2011 Lewisham wrote to JN to intimate its decision under section 184 of the 1996 Act (the section 184 decision). It stated that its duty to house her had come to an end because she had become homeless intentionally from the housing association property. Lewisham informed her that it would terminate the temporary accommodation within 28 days and that she would be served with a notice to vacate shortly. It stated that it was under a duty to provide her with advice and assistance in her efforts to secure accommodation and invited her to contact its housing options centre for that purpose. The letter also informed her of her right to request a review under section 202 of the 1996 Act and enclosed a leaflet explaining the review process. Lewishams Homeless Families Floating Support Service carried out a needs assessment on 12 January 2012 and concluded that the family did not need the support which that service provided. On 5 March 2012 JN requested a review of the section 184 decision and instructed solicitors to represent her. Lewisham extended her interim accommodation pending the outcome of the review. On 27 March 2012 Lewisham wrote to inform her that the review officer had upheld the section 184 decision and had found that she had become homeless intentionally. It intimated that its duty to secure accommodation for her had come to an end and gave her 28 days to leave the property. Lewisham informed her that she was entitled to advice and assistance from its housing options centre and that she could appeal to the county court on a point of law against the outcome of the section 202 review. JN chose not to do so. Thereafter JNs solicitors requested an assessment under the Children Act 1989. On 29 April 2012 the solicitors wrote to challenge Lewishams decision to evict her without a court order and before completing an assessment under the Children Act 1989. Lewisham extended the provision of temporary accommodation until the outcome of that assessment. Lewisham wrote on 30 April 2012 with a copy of the assessment and intimated that the accommodation would cease on 1 May 2012. In response, CN issued the judicial review claim which has given rise to the appeal to this court. ZH was born on 23 March 2012. His mother (FI) was born in 1991 and has a younger sister (MI) who was born in 1994. FI had an assured tenancy of a house in Liverpool. She left Liverpool in October 2011 to live with her aunt in London. In August 2012 her aunt asked FI to leave and on 7 September 2012 FI applied to the London Borough of Newham (Newham) for assistance under Part VII of the 1996 Act. In a letter dated 26 November 2012 Newham, acting under section 188 of the 1996 Act, granted FI a licence to occupy a two bedroom self contained flat on a day to day basis. Newham had licensed the property from a private sector company (RC) which provided spot booked bed and breakfast and nightly let accommodation for homeless and other persons. In a letter dated 19 February 2013 Newham advised FI that it had decided that she was homeless and in priority need but that she had become homeless intentionally by giving up her assured tenancy in Liverpool. Newham stated that it would help her search for alternative accommodation and allow her to stay in her current accommodation until 18 March 2013. Newham also provided her with written advice and informed her of her right to review the decision. On the same day solicitors acting for ZH asked Newham to review the decision and for accommodation pending the review. The solicitors also informed RC of their view that RC could not evict without first obtaining a court order. In a letter dated 14 March 2013 Newham refused to provide accommodation pending a review and told FI that she must leave the property by 21 March 2013. ZH commenced judicial review proceedings on 18 March 2013 in which he challenged the decision to evict without first obtaining a court order. After an assessment under the Children Act 1989 Newham undertook to provide interim accommodation and financial support to assist FI in securing private rented accommodation. Newham also carried out a section 202 review which FI appealed to the county court. That appeal settled after Newham, in September 2013, accepted that it owed FI a full housing duty under section 193(2) of the 1996 Act, namely to secure that accommodation was available for her to occupy (the full housing duty). By that stage ZHs case had been linked to CNs case in the Court of Appeal. The legal proceedings CN was initially refused permission to proceed with the judicial review claim. That decision was appealed and on 23 November 2012 Davis LJ granted permission for the judicial review and ordered the claim to be retained in the Court of Appeal for a hearing. On 9 May 2013 Sales J gave ZH permission for his judicial review and transferred it to the Court of Appeal. The two judicial review claims were heard in June 2013; and on 11 July 2013 the Court of Appeal handed down judgment dismissing the claims. Interim injunctions have protected CNs occupation of accommodation and on 23 November 2012 Davis LJ continued the injunction pending final disposal of the appeal. Although Newham has provided ZH with accommodation in accordance with its full housing duty, the parties agreed that it was appropriate that his case should be considered with that of CN in this appeal. The homelessness legislation For many years Governments in the United Kingdom have sought to alleviate the suffering caused by homelessness. In Part III of the National Assistance Act 1948 local authorities were placed under a duty to provide temporary accommodation to persons who were in urgent need of it. The accommodation was to be provided in premises which the relevant local authority or another local authority managed or in the premises of a voluntary organisation to which the local authority made appropriate payments (sections 21 and 26). The local authority was empowered to make rules for the management of the premises which entitled it to require a person to leave the premises if he was no longer entitled to receive accommodation under that Part of the Act (section 23). The Housing (Homeless Persons) Act 1977 replaced the provisions of the 1948 Act, by which only temporary accommodation was provided, with a statutory regime which also provided longer term accommodation for the homeless. That regime in its essentials survives in the 1996 Act. In particular, the 1977 Act introduced: i) the concept of priority need (section 2), ii) the obligation on the local housing authority to provide temporary accommodation while it investigates whether the applicant is homeless and in priority need and whether he or she is homeless intentionally (section 3), and iii) the duties, arising from the results of that investigation, (a) to provide advice and appropriate assistance, (b) to provide temporary accommodation for a period to give a reasonable opportunity to secure other accommodation, or (c) to secure that accommodation becomes available for occupation (section 4). The 1977 Act was consolidated into wider housing legislation in Part III of the Housing Act 1985. That in turn was repealed by the 1996 Act, which in Part VII provides the current statutory regime for tackling homelessness. I need only summarise the relevant provisions of the 1996 Act. When an applicant applies for accommodation or assistance in obtaining accommodation (section 183), the local housing authority carries out inquiries to satisfy itself whether he or she is eligible for assistance and, if so, what if any duty is owed (section 184). Of central importance in this appeal is the interim duty to accommodate under section 188. Section 188(1) provides: If the local housing authority have reason to believe that an applicant may be homeless, eligible for assistance and have a priority need, they shall secure that accommodation is available for his occupation pending a decision as to the duty (if any) owed to him under the following provisions of this Part. Section 188(3) provides: The duty ceases when the authoritys decision is notified to the applicant, even if the applicant requests a review of the decision (see section 202). The authority may secure that accommodation is available for the applicants occupation pending a decision on a review. The possible results of section 184 investigation, so far as relevant, are as follows. If the local housing authority is satisfied that the applicant is homeless, eligible for assistance but homeless intentionally, its duty, if he or she has a priority need, is (a) to secure that accommodation is available for a period to give a reasonable opportunity of securing accommodation for occupation and (b) to provide advice and assistance in attempts to secure accommodation (section 190(2)). If not satisfied that the applicant has a priority need, the authoritys duty is confined to (b) above (section 190(3)). If the authority is satisfied that the applicant is homeless and eligible for assistance, not satisfied that he or she is intentionally homeless, but also not satisfied that he or she has a priority need, the duty is to provide advice and assistance as in (b) above (section 192). If the authority is satisfied that the applicant is homeless, eligible for assistance and has a priority need and is not satisfied that he or she became homeless intentionally, it is under a duty to secure that accommodation is available for occupation by the applicant (section 193(2)). In this appeal we are concerned only with whether an applicant is entitled to both a set period of notice and a court order before eviction if, on completing the section 188 investigation, a local authority finds him or her to be homeless intentionally or otherwise not entitled to the full housing duty under section 193 of the 1996 Act. The logic of the answer to that question will apply also to other temporary accommodation provided under Part VII of the 1996 Act, namely sections 188(3) (above), 190(2) (above), 200(1) (accommodation pending a possible referral to another authority), and 204(4) (accommodation pending the determination of an appeal). Protection from eviction legislation Abuses by private sector landlords in the 1950s and 1960s led to measures to regulate the eviction of tenants in section 16 of the Rent Act 1957 and Part III of the Rent Act 1965. PEA 1977 consolidated those provisions and related enactments. Section 1 makes the unlawful eviction or harassment of a residential occupier a criminal offence. Section 3 prohibits eviction without due process of law. Of particular relevance are section 3(1) and (2B). Section 3(1), which, subject to an immaterial amendment, is in the same terms as originally enacted, provides: the tenancy (in this section referred to as the former Where any premises have been let as a dwelling under a tenancy which is neither a statutorily protected tenancy nor an excluded tenancy and (a) tenancy) has come to an end, but (b) of them, it shall not be lawful for the owner to enforce against the occupier, otherwise than by proceedings in the court, his right to recover possession of the premises. the occupier continues to reside in the premises or part Section 3(2B), which was inserted by the Housing Act 1988, provides: Subsections (1) and (2) above apply in relation to any premises occupied as a dwelling under a licence, other than an excluded licence, as they apply in relation to premises let as a dwelling under a tenancy, and in those subsections the expressions let and tenancy shall be construed accordingly. Section 3A, which the 1988 Act also introduced, listed excluded tenancies and licences. The listed exclusions now include among others a tenancy or licence granted as a temporary expedient to a trespasser (section 3A(6)), a tenancy or licence to occupy premises for a holiday (i.e. a holiday let) or if granted otherwise than for money or moneys worth (i.e. a bare licence) (section 3A(7)), a tenancy or licence granted to provide accommodation under Part VI of the Immigration and Asylum Act 1999 (i.e. accommodation provided to asylum seekers and their dependants) (section 3A(7A)) or temporary accommodation to displaced persons (section 3A(7C)), and a licence which confers rights of occupation in a hostel provided by specified bodies (section 3A(8)). There is no general exclusion in section 3A of accommodation provided under Part VII of the 1996 Act or in particular under section 188 of that Act. Section 5(1A) of PEA 1977 provides that a notice to determine a periodic licence to occupy premises as a dwelling (other than an excluded licence) is valid only if it is in writing and contains prescribed information and is given not less than 4 weeks before the date on which it is to take effect. Accordingly, where a person grants a licence to which PEA 1977 applies, he must give notice of at least 28 days and also obtain a court order to regain possession of the premises. While counsel could not agree on the likely timescale of average court proceedings, it is likely that, in uncontested proceedings, a local authority might often have to wait several months to recover possession of a property provided as interim accommodation if such accommodation is subject to PEA 1977. In contested proceedings the wait would probably be longer. Lewishams experience is that it can take between 3 and 6 months to recover possession in undefended proceedings in the county court. Newhams experience is that such undefended proceedings take between 3 and 4 months. The first issue: the appellants challenge On the first issue the appellants case was straightforward. Mr Arden submitted (i) that PEA 1977 requires a court order to recover possession of premises occupied as a dwelling under a licence (section 3(2B)) and (ii) that Parliament had set out comprehensively in section 3A of PEA 1977 the tenancies and licences which were to be excluded from the scope of section 3 of that Act. As a result, an owner can take possession of the accommodation provided by a local housing authority under section 188 of the 1996 Act only after he has obtained a court order. The court must give effect to the clear words of Parliament. In support of his submission he also referred, by way of contrast, to other legislation which contained express exclusions and, he submitted, supported the view that Parliament viewed temporary accommodation provided to the homeless as being let as a separate dwelling, a phrase which has long been the key definition of property which was subject to statutory rent restrictions and security of tenure. He submitted that, if premises were let as a separate dwelling, they were necessarily let as a dwelling in section 3 of PEA 1977. He referred to the Housing Act 1985, which in Schedule 1 paragraph 4 expressly excluded all tenancies granted under Part VII of the 1996 Act from the security of tenure which the Housing Act 1980 had introduced for public sector tenants. Similarly, section 209 of the 1996 Act (adapting earlier provision in section 1(6) of the Housing Act 1988) provides that a tenancy granted by a private landlord under arrangements which a local housing authority makes in pursuance of its interim duties under sections 188, 190, 200 or 204(4) cannot be an assured tenancy before the end of 12 months after the date on which the applicant is notified of the relevant decision or outcome of the appeal unless the landlord has given notice to the contrary. In short, he submitted that Parliament had exempted the temporary provision of accommodation to homeless persons from security of tenure but not from PEA 1977. If that was correct, the extension of PEA 1977 to cover licences in 1988 meant that temporary accommodation provided to a homeless person under a licence also fell within the scope of that Act. He also drew attention to section 130 of the Social Security Contributions and Benefits Act 1992, which gives an entitlement to housing benefit when a person is liable to make payments in respect of a dwelling which he occupies as his home. Housing benefit is often paid to people who occupy temporary accommodation under Part VII of the 1996 Act. This supported the view that such accommodation should be treated as a dwelling under PEA 1977. Discussion of the first issue (i) licence to occupy premises as a dwelling The first issue is whether the premises, which the authorities provided to CN and ZH as temporary occupation under section 188 of the 1996 Act, were licensed for occupation as a dwelling. Counsel agreed that the phrases let as a dwelling under a tenancy in section 3(1) and premises occupied as a dwelling under a licence in section 3(2B) of PEA 1977 both addressed the purpose of the tenancy or licence rather than the use of the premises by the occupier. I also agree: section 3(2B) (para 18 above) applies section 3(1) to licensed premises; as section 3(1) looks to the purpose of the lease, so also must section 3(2B) look to the purpose of the licence. Unless that licence is superseded by a later contract, either express or inferred from the parties actions, which provides for a different user, the court looks to the purpose of the original licence. See the judgments of the Court of Appeal on analogous provisions in the Rent Acts in Wolfe v Hogan [1949] 2 KB 194 and Russell v Booker (1982) 5 HLR 10. See also, in the context of accommodation initially provided under section 188 of the 1996 Act, the judgment of Elias J in Rogerson v Wigan Metropolitan Borough Council [2005] HLR 129, at paras 33 and 34. Accordingly, as there is no suggestion that the legal basis of the occupation by CN and ZH changed since the licences were granted, PEA 1977 instructs us in each case to look to the purpose of the licence to see if it is for occupation as a dwelling. The word dwelling is not a technical word with a precise scientific meaning. Nor does it have a fixed meaning. Words such as live at, reside and dwell are ordinary words of the English language, as is home. It is clear, as the respondent local authorities submitted, that the word dwelling in the phrase, let as a dwelling has been used in PEA 1977 in the same sense as that word was used in the phrase let as a separate dwelling in the Rent Acts. Section 3 of PEA 1977 had its origin in section 32 of the Rent Act 1965 and section 5 in section 16 of the Rent Act 1957. There is no reason to think that Parliament intended the word dwelling to have a different meaning in sections on protection from eviction from its meaning in provisions relating to rent restriction and security of tenure. In Skinner v Geary [1931] 2 KB 546, Scrutton LJ (at 564) said that the Rent Acts did not protect a tenant who was not in occupation of a house in the sense that the house was his home. More recently, in Uratemp Ventures Ltd v Collins [2002] 1 AC 301 the speeches in the House of Lords showed that the word dwelling had different shades of meaning. Lord Bingham of Cornhill (at para 10) said that a dwelling house was the place where someone dwells, lives or resides. Lord Steyn (at para 15) suggested that the court should not put restrictive glosses on the word which conveyed the idea of a place where someone lived. Lord Millett said (at para 30): The words dwell and dwelling are not terms of art with a specialised legal meaning. They are ordinary English words, even if they are perhaps no longer in common use. They mean the same as inhabit and habitation or more precisely abide and abode, and refer to the place where one lives and makes ones home. They suggest a greater degree of settled occupation than reside and residence, connoting the place where the occupier habitually sleeps and usually eats, In my view there is no strict hierarchy in terms of settled occupation between the words live at, reside and dwell and much may depend on the context in which the words are used. But there are nuances and as a general rule I agree with Lord Millett that dwelling suggests a greater degree of settled occupation than residence. 28. Under the Rent Acts when the court considers whether a property is let as a separate dwelling it looks to the purpose of the tenancy. That involves a consideration of both the terms of the contract and the factual matrix of the letting. Thus a tenancy at will is the letting of a dwelling, notwithstanding the precariousness of the contractual right to occupy, where it is clear that the indeterminate period of authorised occupation is consistent with an intention that the tenant establishes a home in the property. In ascertaining the nature of the tenancy the court looks at the lease, which is a practical document dealing with a practical situation (Danckwerts J in Levermore v Jobey [1956] 1 WLR 697 CA, 708), and also the surrounding circumstances. It considers the parties contract, the nature of the premises and also the statutory intention. Thus, for example, in Martin Estates Ltd v Watt and Hunter [1925] NI 79 (CA), in which police officers occupying police barracks sought to resist the recovery of possession on the basis that the property was let as a dwelling house, the Northern Irish Court of Appeal rejected the defence. Moore LJ (86 87) held that housing let for the public service and occupied by public servants was not a dwelling for the purposes of the Rent Acts and that policemen in police barracks, patients in hospital and inmates in a gaol could not claim security of tenure. 30. A similar approach is appropriate here. The court, in deciding whether the accommodation involved in these appeals falls within the meaning of dwelling in section 3(1) of PEA 1977, must construe the terms of the relevant licences in the context of the applicable provisions of the 1996 Act. Section 188(1) imposes on the local housing authority a duty with a low threshold. It arises if the authority has reason to believe that the applicant may be homeless, eligible for assistance and have a priority need. The duty is to secure that accommodation is available for his or her occupation pending the authoritys section 184 decision. The authority is not under a duty to provide a particular form of accommodation or to provide the same accommodation for the applicant throughout the period pending its decision. It can require the applicant to transfer from one address to another more than once during that period. The duty to secure short term accommodation under section 190(2), in order to give someone who is found to be homeless intentionally a reasonable opportunity to secure alternative accommodation for occupation, is similarly limited. So too are the powers under sections 188(3) and 204(4) to provide accommodation pending a decision on a review or pending an appeal. In some cases the authority can reach a section 184 decision very quickly. Other cases require more complex inquiries. The Homelessness Code of Guidance for Local Authorities (2006), which the Government issued under section 182 of the 1996 Act, suggested (at para 6.16) that inquiries should whenever possible be concluded within 33 working days. In CNs case Lewisham notified JN of its section 184 decision within one month after it provided the interim accommodation. Newhams inquiries took almost 3 months after it granted FI the licence of the temporary accommodation. 32. The licences granted to the applicants in these cases are consistent with the limited and short term nature of the authoritys duty. Lewishams licence to JN was an offer of interim nightly paid accommodation for about two weeks. It stated: 31. As this is nightly paid temporary accommodation it is likely that you will be moved with short notice. When this occurs you will be expected to move on either the same day or the next working day. Also, if you plan to not stay at your accommodation for more than 1 night you must inform the council. JN also undertook in the licence that only the persons named in her application for assistance would occupy the accommodation. Newhams licence to FI was for interim accommodation on a day to day basis while it decided whether it had a duty to provide her with re housing. Newham explained that it had entered into arrangements with accommodation providers to provide self contained accommodation and hotel accommodation which it let on a day to day basis. It stated: You occupy interim accommodation on a day to day basis. You do not therefore have the rights of security of a tenant. In the event that the proprietor does not want to continue to allow the council to use the property, we shall have to withdraw our permission for you to live there and ask you to move to other accommodation which we shall provide. If there is a need to move you we shall endeavour to tell you that as soon as we can. As you do not enjoy the rights of a tenant, if you are required to leave the interim accommodation and refuse there is no obligation on the proprietor of the premises or the council to obtain a Court Order requiring you to leave the premises. 33. Newham also required FI to sign a daily register and restricted those allowed to reside in the accommodation to three named individuals, namely FI, ZH and MI. In my view there are a number of features that militate against such licences being licences to occupy premises as a dwelling. First, there is the statutory context of the licence in the 1996 Act, namely the provision by the local housing authority to a homeless person of short term accommodation at one or more locations and in one or more forms of accommodation pending the section 184 decision, the outcome of a review or appeal, or the expiry of the reasonable period under section 190(2). The statutory duty in section 188 of the 1996 Act is to secure accommodation for the applicant, not necessarily at one location, for a short and determinate period. Most significantly, a person who is given temporary accommodation under Part VII of the 1996 Act does not cease to be homeless. To hold otherwise would defeat the scheme of the 1996 Act. In Moran v Manchester City Council [2009] 1 WLR 1506, this was a matter of concession (paras 54 and 55) and Lady Hale (at para 65) stated an analogous principle that in most cases a woman who has left her home because of domestic (or other) violence within it remains homeless even if she has found a temporary haven in a womens refuge. Such temporary accommodation is not intended to provide a home. Another way of looking at the matter is that having a roof over your head in such short term accommodation does not give you a fixed abode. 34. Secondly, consistently with that statutory regime, each licence is a day to day or nightly licence which recognises that the authority may require the applicant to transfer to alternative accommodation at short notice. The licence in each case confers private law rights in relation to the property to which it relates, but the licence must be construed and the nature of those rights must be assessed in the context of the authoritys duties under the 1996 Act. 35. Thirdly, the imposition of the requirements of PEA 1977 would significantly hamper the operation by the authorities of the statutory scheme under the 1996 Act and its predecessor Acts. An authority would not be able to transfer an applicant from one location to another without either his or her consent or, alternatively, the obtaining of a court order. The authority, while awaiting the court order for possession, would have to provide accommodation to someone about whom it had made an adverse section 184 decision and to whom it had already given a reasonable opportunity to obtain alternative accommodation, thereby tying up scarce housing resources. In a time of strained public finances this may deprive other applicants who may have priority need of suitable accommodation and also restrict the authoritys ability to provide accommodation where it has a discretion to do so, as under sections 188(3) and 204(4) of the 1996 Act. Further, there seems little purpose in requiring court proceedings to recover possession as it is difficult to see what a homeless person could advance as a defence to the application, particularly as the 1996 Act contains its own provisions for challenging adverse decisions of the local authority by way of review and appeal to the court (para 69 below). In my view the policy considerations of the third point would not by themselves be determinative, but the features in combination, the legislative and factual context of licences, point to the conclusion that the temporary accommodation, which the authority provides in performance of its duties under section 188 of the 1996 Act, is not provided as a dwelling for the purpose of PEA 1977. I turn to the case law on which the respondent authorities relied for the more general proposition that a temporary residence cannot be a dwelling. There 36. 37. are dicta in those cases which support the proposition; but they also must be seen in context. Many of the judicial statements were made in cases in which a person alleged that he or she had two homes and the court had to decide if a second home fell within the scope of the Rent Acts. Walker v Ogilvy (1974) 29 P & CR 288 concerned a tenant of a flat which he used principally at weekends and for short holidays. The tenant had another permanent residence. Ormrod LJ (at p 293) stated that Parliament in passing the Rent Act 1968 never intended to protect people in occupation of what were in effect holiday houses. Regalian Securities Ltd v Scheuer (1982) 5 HLR 48 concerned the right of a protected tenant to become a statutory tenant on the termination of the protected tenancy under section 2(1)(a) of the Rent Act 1977, which required him to occupy the dwelling house as his residence. In that case the tenant occupied the flat as a temporary expedient for part of the time when the house, which his wife had purchased and in which they and their children lived, was let to others during the winter. The Court of Appeal held that his residence in the flat did not have the quality needed to attract the protections of the Rent Acts. Cumming Bruce LJ (at p 56) asked whether the second residence was used as a home rather than a place of convenient resort. Eveleigh LJ (at p 59) and May LJ (at p 62) took a similar approach, the latter asking whether there was occupation as a home. Cumming Bruce LJ (at p 58) stated two principles that were relevant in that context: First, the court enquires what is the extent and what are the characteristics of the user of the residence? When that is ascertained the court also enquires: Is the nature of the residence during the period that it persisted the kind of residence that is within the contemplation of the Rent Act? Is this the kind of residence that Parliament intended should clothe the tenant with the right to claim statutory protection? 38. In Swanbrae Ltd v Elliott (1986) 19 HLR 86 the Court of Appeal considered the quality of residence required where a person claimed to be a statutory tenant in succession to her mother, who had been a protected tenant, because she had resided in the premises with her before she died. The appellant had visited frequently and then had moved in on a part time basis to nurse her sick mother while retaining a home elsewhere. The Court held that residing with meant more than living at; a person claiming a statutory tenancy had to show that she had made her home in the premises. Swinton Thomas J (at p 90) distinguished the earlier case of Collier v Stoneman [1957] 1 WLR 1108 on its facts because Mrs Elliott had a tenancy of her own while in that case the claimant did not. He concluded (at p 95) that Mrs Elliott had not shown that she had made her home at the premises and become part of the household. Kerr LJ (at p 96) agreed and made the same distinction from other cases because Mrs Elliott had a permanent home of her own. 39. Similarly, in Freeman v Islington London Borough Council [2010] HLR 6, another succession to tenancy case in which the focus was on the statutory words resided with, the Court of Appeal adopted a similar approach, looking at the claimants actions and ascertaining whether they exhibited a home making intention rather than merely staying with the tenant for a limited time and a limited purpose: Jacob LJ at paras 28 and 33. In my view the statutory successor cases are of only limited assistance. Because of the different statutory provisions the court in each case looked objectively at the quality of the claimants residence and at her intention when living with the protected tenant. They establish that occupation which has the quality of home building is needed to obtain protection as a successor of a protected tenant. They did not entail an assessment of the purpose of a letting or licence, which the current case involves. 40. 41. MacMillan & Co Ltd v Rees [1946] 1 All ER 675 was not a case which involved an allegation that someone had two homes. It concerned the lease of premises as an office in which the tenant or her business partner were authorised to sleep when required. The Court of Appeal drew a distinction between an authorised user of merely sleeping or eating on premises and use as a dwelling house. Authorised acts, which were residential in character, did not make the business premises a dwelling house: Evershed J, delivering the judgment of the court at pp 677 678. 42. The respondent authorities and the Secretary of State also relied on the two Court of Appeal cases which have directly addressed the question whether PEA 1977 applies to temporary accommodation provided under section 188 of the 1996 Act or its predecessor Act. In Mohamed v Manek and Kensington and Chelsea LBC (1995) 27 HLR 439, the Court of Appeal was concerned with the predecessor provisions in section 63 of the Housing Act 1985 under which the local authority arranged for the provision to the claimant of interim bed and breakfast accommodation in a private hotel. Auld LJ (at p 450) held as a matter of construction that occupied as a dwelling under a licence in section 3(2B) of PEA 1977 did not apply to bed and breakfast accommodation provided as a temporary arrangement pending what is now a section 184 decision. He also stated that it did not accord with the ordinary use of language to describe temporary accommodation in a hotel or hostel for this purpose as premises occupied as a dwelling under a licence. Nourse LJ agreed and stated (at p 451) 43. 44. I rest my decision primarily on the simple proposition, derived from a purposive construction of both statutes, that accommodation made available for an applicant pursuant to section 63(1) of the Housing Act 1985 pending a decision as a result of the local housing authoritys inquiries under section 62 cannot, as a general rule, be premises let as a dwelling under a tenancy of premises occupied as a dwelling under a licence within section 3(1) and (2B) respectively of the Protection from Eviction Act 1977. [I]t cannot be a purpose of the 1977 Act to give protection to persons whose entirely transient needs bring them within section 63(1). Henry LJ agreed with both judgments. In Desnousse v Newham London Borough Council [2006] QB 831, which also concerned the application of PEA 1977 to arrangements entered into under section 188 of the 1996 Act (in that case a self contained flat), the Court of Appeal applied Mohamed v Manek in the face of a sustained challenge by Mr Arden which Lloyd LJ analysed in detail. The court held that the ratio of Mohamed v Manek was not confined to accommodation of the nature of a hotel or hostel but was a general proposition. The court was divided on whether the reading of section 3(2B) of PEA 1977 in Mohamed v Manek was compatible with article 8 of ECHR. Lloyd LJ (at para 143) held that it was not and that section 3 of the Human Rights Act 1998 required the court to apply section 3 of PEA 1977 to the occupation of self contained residential accommodation provided in pursuance of the local authoritys duties under section 188(1) or 190(2)(a) of the 1996 Act. Tuckey LJ and Pill LJ disagreed. I discuss article 8 of ECHR in paras 57 73 below. In Mohamed v Hammersmith and Fulham London Borough Council [2002] 1 AC 547 the House of Lords held that the occupation by a homeless person of interim accommodation provided under section 188 of the 1996 Act could be normal residence for the purpose of establishing a local connection under section 199(1)(a) of that Act. Lord Slynn of Hadley, with whom the other Law Lords agreed, stated (at para 18) that words like ordinary residence and normal residence take their precise meaning from the context of the legislation in which they appear. He suggested that the place that a person voluntarily accepts and in which he eats and sleeps is for the relevant time where he normally resides. The fact that the local authority had given him interim accommodation in performance of its statutory duty under section 188 of the 1996 Act did not prevent that accommodation from being the place where he was for the time normally resident. This is consistent with the view that Lord Millett expressed in Uratemp (para 26 above) that dwelling generally connotes a greater degree of settled occupation than residence. 45. Pulling together the threads of the case law, in my view the following can be stated: (i) the words live at, reside and dwell are ordinary words of the English language and do not have technical meanings, (ii) those words must be interpreted in the statutes in which they appear having regard to the purpose of those enactments, (iii) as a matter of nuance, dwelling as a general rule suggests a more settled occupation than residence and can be equated with ones home, although residence itself can in certain contexts (such as the two home cases) require such an equation, and (iv) under the 1996 Act a person remains homeless while he or she occupies temporary accommodation provided under sections 188(3), 190(2), 200(1) or 204(4) of the 1996 Act so long as the occupation is properly referable to the authoritys performance or exercise of those statutory duties or powers. In my view it is consistent with this approach to conclude in the context of PEA 1977 that an overnight or day to day licence of accommodation pending the making of a decision under section 184 or on review or appeal does not show any intention to allow the homeless applicant to make his or her home in that accommodation. (ii) The exclusions in section 3A of PEA 1977 47. 46. Mr Arden also contended that section 3(1) and (2B) of PEA 1977 covered all residential tenancies or licences unless they were expressly excluded by section 3A of that Act. The exclusions in section 3A included several arrangements which were likely to be temporary in nature. He submitted that by defining the excluded tenancies and licences, Parliament had expressed an intention that all other residential tenancies and licences were subject to the protections in sections 3 and 5 of PEA 1977. I am not persuaded that that submission is correct. If, by providing the exclusions, Parliament meant that otherwise the excluded tenancies or excluded licences would have been within the concepts of let as a dwelling or occupied as a dwelling under a licence (section 3(1) and (2B)), that would have had the effect of altering the meaning of dwelling from that of the Rent Acts, in which the protection against eviction originated. As mentioned above, it is clear from prior case law (Walker v Ogilvy) that holiday lets did not fall within the expression let as a separate dwelling. But such lets are expressly excluded in section 3A(7)(a). Similarly, the Rent Acts treated a tenancy under which the occupier shared accommodation with the landlord and other persons as a restricted contract rather than a protected tenancy: Rent Act 1977 section 21. Yet such was expressly excluded in 48. section 3A(2). In my view Parliament, by providing those exclusions, sought to confirm the scope of the statutory protection which the provisions of the Rent Acts or case law established rather than alter the concept of dwelling. While it is correct that, as Mr Arden submitted, the Housing (Homeless Persons) Act 1977, which was enacted at the same time as PEA 1977, could have excluded its provision of temporary accommodation from the scope of the latter Act, it was not necessary to do so. It may be correct, as both Mr Hutchings for the respondent local authorities and Mr Chamberlain for the Secretary of State contended, that several of the express exclusions of temporary accommodation involve circumstances in which the occupation may continue for significant periods of time. The exclusion in section 3A(6) of a tenancy or licence granted as a temporary expedient to a trespasser is an example of an exclusion of a letting which was intended to be temporary. But such lettings are on occasion intended to last for several years. See, for example, Smart v Lambeth London Borough Council [2014] HLR 7, in which a local authority granted a licence to a housing association which in turn allowed a housing cooperative to provide accommodation to former squatters on a licence which was initially for 5 years but was extended. But for the exclusion, such accommodation by providing settled occupation could readily fall within the scope of section 3 of PEA 1977. Similarly, the tenancy or licence granted to provide accommodation under Part VI of the Immigration and Asylum Act 1999 (section 3A(7A)) or under the Displaced Persons (Temporary Protection) Regulations 2005 (SI 2005 No 1379) (section 3A(7C)) can in some cases involve the provision of accommodation for prolonged periods which might prima facie bring it within section 3 of PEA 1977. The exclusions remove accommodation so provided from the scope of PEA 1977. But I do not rely on distinctions between certain types of temporary accommodation and another type. Rather I base my view on the meaning of dwelling in section 3 and the absence of any evidence of an intention on the part of Parliament to extend that meaning to cover accommodation which would not have been treated as a dwelling under the Rent Acts. 49. Absent an intention to re define the meaning of dwelling, it appears to me that Parliament in enacting and amending section 3A created several of the exclusions for the avoidance of doubt. One must address the prior question as to what is a dwelling. The absence of an exclusion for accommodation provided under section 188 of the 1996 Act does not mean that such accommodation falls within section 3 of PEA. (iii) Inferences from other statutes 50. As set out in para 22 above, Mr Arden also invited the court to draw an inference of parliamentary intention in PEA 1977 from provisions in other statutes. I am not persuaded that such inferences should be drawn. Section 209 of the 1996 Act, adapting the earlier provisions in the Housing Act 1985 (section 79(2) and Schedule 1 paragraph 4), and section 1(6) and (7) of the Housing Act 1988, prevents a tenancy from being an assured tenancy before the end of 12 months after the relevant decision by the local authority. But a tenancy which continued for such a period after a decision under section 184 or on review or appeal would in most cases have ceased to be properly referable to the provision of interim accommodation pending the decision (see para 24 above). 51. Housing benefit under section 130 of the Social Security Contributions and Benefits Act 1992 (the 1992 Act) has been given to people provided with temporary accommodation under the 1996 Act. That section provides: A person is entitled to housing benefit if he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home; It is argued that, if an applicant in temporary accommodation is entitled to housing benefit because she is occupying a dwelling as her home, she is also occupying a dwelling under a licence for the purposes of section 3(2B) of PEA 1977. But there are two answers which to my mind contradict this view. First, the social security legislation is in a different field of human activity from PEA 1977 and looks to the fact of occupation rather than the purpose of the letting. I see no reason why in the context of the 1992 Act temporary occupation of premises should not be treated as occupation as a home while in other legislation, which has different policy objectives, a different conclusion is reached. Secondly, the 1992 Act defines dwelling by reference to the type of building rather than its intended use. The definition of dwelling in section 137 is in these terms: any residential accommodation, whether or not consisting of the whole or part of a building and whether or not comprising separate and self contained premises. (iv) Settled practice and policy considerations 52. Mr Hutchings submitted that it had for years been a widespread practice of local housing authorities in London to arrange for the re possession of temporary accommodation provided under section 188 of the 1996 Act without first obtaining a court order. They had adopted and followed that practice in good faith and might face criminal sanctions if this court were to change the law. Their practice was consistent with the Secretary of States guidance in the Homelessness Code of Guidance for Local Authorities (2006) which (at para 7.11) refers to the general rule that accommodation provided under section 188(1) does not create a tenancy or licence under PEA 1977 but notes that the general rule may be displaced by an agreement between the authority and the applicant or if the accommodation is allowed to continue on more than a transient basis. 53. Mr Chamberlain further argued that Parliament had endorsed the Secretary of States construction of PEA 1977. Parliament, he submitted, should be taken to have been aware of the Court of Appeals judgments in Mohamed v Manek and Desnousse (the former having been decided in 1995 and the latter in 2006) and had not reversed those decisions although there had been opportunities to do so in legislation which amended either PEA 1977 or the 1996 Act. Lord Carnwath has set out this argument in more detail in his concurring judgment. It suffices for me to say that where Parliament re enacts a statutory provision which has been the subject of authoritative judicial interpretation, the court will readily infer that Parliament intended the re enacted provision to bear the meaning that case law had already established: Barras v Aberdeen Sea Trawling and Fishing Co Ltd [1933] AC 402, Viscount Buckmaster at pp 411 412. Applying that in the present case, one can readily conclude, as I have, that the word dwelling in the phrase let as a dwelling in PEA 1977 must bear the same meaning as it had in section 31 of the Rent Act 1965 and in the phrase let as a separate dwelling in the Rent Acts. Inferences from parliamentary inaction are more difficult. In my view, the settled practice principle, of which Lord Carnwath writes, is available where there is ambiguity in a statutory provision. But for the reasons set out above, I detect no ambiguity in section 3 of PEA 1977 in its application to a licence to a person who is and remains homeless throughout the period of interim accommodation: it does not apply. 54. Counsel also referred to considerations of policy. I accept, as Mr Arden submitted, that families with young children and other vulnerable people often invoke the homeless persons provisions of the 1996 Act. They are clearly worthy of protection. But that does not mean that a court order for eviction must be obtained when the authority has reached an adverse section 184 decision and terminates its licence of temporary occupation. As the respondent local authorities argued, private sector providers of accommodation for homeless persons depend on the local authorities for their business, which they would lose if they behaved irresponsibly in re possessing their properties. They are also subject to the Protection from Harassment Act 1997 and section 6 of the Criminal Law Act 1977 which prohibits the use or threats of violence to secure entry to premises. Further, as Mr Chamberlain submitted, good administration requires local housing authorities to use scarce public resources effectively in providing support for homeless persons. He referred to Auld LJ in Mohamed v Manek who stated (at pp 449 450): A councils ability efficiently to perform their public duty as a local housing authority could be seriously affected if the protection of the 1977 Act were automatically to attach to every temporarily housed unsuccessful applicant for housing just because he had been able to satisfy the low threshold under [section 184] for investigation of his application. In my view policy considerations do not point in one direction as a homeless person might prefer a court officer to control his or her eviction, and, in any event, as I have said (para 35 above) the inconvenience to local authorities is not sufficient by itself to determine the outcome this appeal. 55. For reasons which I discuss below, I do not consider that article 8 of ECHR requires a different, broader interpretation of the scope of section 3(1) and (2B) of PEA 1977. (v) Further clarification 56. I recognise that the conclusion which I have reached on this first issue has not found favour with Lord Neuberger or Lady Hale. It may be helpful if I comment briefly on some areas of disagreement. First, the provisions of PEA 1977 in issue in this appeal, which extended section 3 to licences and introduced the exclusions, were enacted in 1988, over a decade after the Housing (Homeless Persons) Act 1977, which created the new homelessness regime, came into operation. Thus while the concept of let as a dwelling predated the new homelessness legislation, its extension to licences and the enactment of the exclusions did not. Secondly, my emphasis on the terms of the licences which should be construed against the background of the interim duties of the 1996 Act (paras 33 and 34 above) entails a recognition that mere precariousness of occupation, as in a tenancy at will, would not exclude the statutory protection of PEA 1977 if one could infer that the property was let as a home; see para 29 above. It is not the mere precariousness of the occupation but the wider statutory context in which the licences were granted that reveals the true nature of the arrangement and supports the exclusion of section 3 of PEA 1977. Accordingly my interpretation does not provide a green light to unscrupulous landlords in other contexts. 57. Thirdly, I accept that, if other things were equal, the fact that a person is homeless for the purposes of the 1996 Act would not mean that as a matter of statutory interpretation he or she did not dwell in the provided accommodation for the purpose of another statute. I adopt a similar approach in my discussion of the 1992 Act in para 51 above. But if, as is my view, the Rent Acts and by extension PEA 1977 require a contract that is intended to give the occupant a degree of settled occupation, in other words a home, the context of the 1996 Act in which the licences were granted points clearly against their being licences of a dwelling for the purpose of PEA 1977. The second issue: Article 8 of ECHR 58. The appellants submission in short was that it is inherent in article 8 of ECHR that a public authority must always use court proceedings before it evicts someone from his or her home. Mr Arden submitted that it did not matter that the owner of the property in each case was a private sector landlord as the authority controlled the whole process. The authority decided whom it placed in accommodation and when the licence ended in each case. 59. Article 8 of ECHR, which section 1 of the Human Rights Act 1998 created as a Convention right in our domestic law, provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. 60. The respondent local authorities and the Secretary of State all conceded that article 8.1 was engaged in these appeals. But they did not accept that article 8 was engaged in all cases of temporary accommodation provided under Part VII of the 1996 Act and questioned whether a public authority was responsible for interference with an article 8 right when it was the private sector landlord who was evicting the homeless persons. I do not think that it is necessary to reach a concluded view on those matters or on the question of horizontal effect in this case. It is better to leave such issues to a case in which they have to be determined. Because of the view that I have reached on the position if article 8.2 were engaged, I am content to proceed on the basis that both article 8.1 and 8.2 are engaged. Discussion of the second issue 61. Article 8 of the ECHR so far as relevant is concerned with a persons right to respect for his or her home and regulates interference by public bodies with that right. In article 8 the concept of home is autonomous and does not depend on classification under domestic law. It is concerned with occupation in fact, and it is not limited to premises which are lawfully occupied or have been lawfully established. It is concerned with the existence of sufficient and continued links with a specific place. See among others Hounslow London Borough Council v Powell [2011] 2 AC 186, Lord Hope para 33; Prokopovich v Russia (2006) 43 EHRR 10, para 36; Kryvitska and Kryvitskyy v Ukraine App No 30856/03, para 40. Thus premises may not be let as a dwelling under PEA 1977 and yet be a home for the purposes of article 8 of the ECHR. 62. As is well known, an interference with an article 8 right must be in accordance with the law, in pursuit of a legitimate aim, and necessary in a democratic society for that aim. The latter notion implies a pressing social need and requires that measure to be proportionate to the legitimate aim pursued: Blei v Croatia (2005) 41 EHRR 13, at paras 55 59. Proportionality involves striking a fair balance between the interests of the individual and those of the community as a whole. The ECHR guarantees rights that are practical and effective. A public authority that interferes with a persons right to respect for his or her home, especially when it intervenes in the most extreme way by removing him or her from that home, must have in place a fair procedure in order to show that respect. This requires the occupier to be involved in the decision making process in order to protect his or her rights. In assessing the effectiveness of the procedure to achieve respect for the safeguarded rights the court looks to the whole proceedings involving the interference with the home. See Tysic v Poland (2007) 45 EHRR 42 paras 113 and 115; Blei v Croatia para 68; Zehentner v Austria (2011) 52 EHRR 22 para 54. 63. A fair procedure requires the occupant to have a right to raise the issue of the proportionality of the interference and to have that issue determined by an independent tribunal: Manchester City Council v Pinnock [2011] 2 AC 104, Lord Neuberger MR para 45; McCann v United Kingdom (2008) 47 EHRR 40, para 50; Kay v United Kingdom (2012) 54 EHRR 30, para 68; Pauli v Croatia [2009] ECHR 1614, para 43; Buckland v United Kingdom (2013) 56 EHRR 16, para 65. The appellants submit that that procedural protection requires the owner to obtain a court order before evicting the occupant, thus enabling the latter to raise the issue of proportionality as a defence. The respondent local authorities and the Secretary of State disagree and submit that it suffices if there are procedures by which the occupant can raise the issue before an independent tribunal. 64. The authoritys assessment of an applicants circumstances as a result of its inquiries under section 184 of the 1996 Act is intimately linked to the decision to end the provision of temporary accommodation. The authority provides the accommodation while undertaking the inquiries and its decision as to its housing duties brings to an end its obligation to provide the interim accommodation. In my view, when one looks at the procedures as a whole, the procedural safeguards contained in the 1996 Act, the procedures available under the Children Act 1989 and the possibility of judicial review of the authoritys section 202 decision by a court with enhanced powers are sufficient to comply with article 8 of ECHR in this context. See paras 70 and 71 below. Article 8s procedural guarantee does not require further involvement of the court in granting an order for possession. The interim accommodation which an authority provides under section 188 of the 1996 Act is but transient accommodation, a stop gap pending the completion of inquiries and a decision on the scope of the authoritys duties towards a homeless person. As I have set out above, domestic law requires less formal procedures at the final stage of the recovery of possession in such circumstances than when the occupier has a more substantial and long term connection with the accommodation. It is only in very exceptional cases that the applicant will succeed in raising an arguable case of a lack of proportionality where an applicant has no right under domestic law to remain in possession of a property: Kay v Lambeth London Borough Council [2006] 2 AC 465, Lord Bingham para 29, Lord Nicholls paras 53 54; McCann v United Kingdom para 54; Kay v United Kingdom, para 73; Manchester City Council v Pinnock, Lord Neuberger MR para 54. In my view this is so particularly where an authority seeks to recover possession of interim accommodation provided under section 188 of the 1996 Act: if court proceedings are necessary, and the day of the court hearing arrives, what would be the homeless persons defence? 65. 66. 67. It is for the occupier to raise the question of proportionality: Pauli v Croatia [2009] ECHR 1614, para 43; Orli v Croatia [2011] ECHR 974, para 66. The court may deal with such an argument summarily unless it is seriously arguable: Manchester City Council v Pinnock, Lord Neuberger MR para 61; Hounslow London Borough Council v Powell [2011] 2 AC 186, Lord Hope paras 35 37, Lord Phillips para 92. In an appropriate case the court, if satisfied that eviction was disproportionate, could prohibit the eviction for as long as that was the case, for example if the local authority did not provide alternative accommodation: Manchester City Council v Pinnock, Lord Neuberger MR paras 45 and 64.; Hounslow London Borough Council v Powell, Lord Hope paras 62 and 63. I turn to the application of an article 8 analysis to the facts of these cases. First, in each case the termination by the authority of the occupiers licence and the private owners actions to recover possession of the property are both in accordance with the law see the discussion of the first issue above and in pursuit of a legitimate aim. The local authority, faced with the pressing social problem of homelessness and charged with duties to provide accommodation for the homeless with priority need, will wish to make the accommodation available to other applicants who are entitled to benefit from the provision of interim accommodation under the 1996 Act. The private owner of the property seeks to recover possession of it in accordance with his or its right of ownership and to put the property to economic use by obtaining income from the local authority for its occupation. These are legitimate aims which fall within the protection of the rights and freedoms of others: Hounslow London Borough Council v Powell, Lord Phillips para 80. 68. Secondly, in my view recovery of possession is proportionate to the aim which is being pursued and is therefore necessary in a democratic society under article 8. It is well known that authorities have limited resources to provide accommodation to individuals who claim to be homeless and in priority need. As a general rule there can be no justification for preferring those whose claims have been investigated and rejected over those whose claims are still the subject of inquiry under section 184 of the 1996 Act and who may be found to be homeless, to have priority need, and to be the objects of the authoritys full housing duty. There are also safeguards in the decision making process that allow the occupant to be involved in the process and, through an appeal to the county court or by judicial review in the Administrative Court, give an opportunity for him or her to raise the question of proportionality before an independent tribunal. There is no need for an additional procedural hurdle which would impose costs on an authority without any significant benefit to the applicant. 69. Those safeguards include the following. First, the authority must give the applicant written notice of the reasons for an adverse section 184 decision, thus enabling the applicant to understand the basis of the decision: section 184(3) and (6). In so doing the authority must inform the applicant of his or her right to request a review of the decision under section 202: section 184(5). Secondly, the Governments Homelessness Code (2006) (at para 7.1.10) requires the authority to give the applicant/occupier a reasonable period of notice to vacate the accommodation. The general practice of authorities is to give 28 days notice. Thirdly, where the individual has become homeless intentionally, the authority is under a duty to give the applicant advice and assistance in his or her attempts to obtain alternative accommodation: section 190(2) and (3). If the applicant, who has become homeless intentionally, has a priority need the authority is under a duty to secure that accommodation is available to give him a reasonable opportunity of securing alternative accommodation. 70. Fourthly, the applicant is entitled to have the adverse decision reviewed: sections 202 and 203. The purpose of the review is, as Lord Hope stated in Hounslow London Borough Council v Powell (at para 42) to correct errors and misunderstandings. The authority is under a duty to inform the applicant of the reasons for the decision on review and inform him of his right to appeal: section 203(4) and (5). Fifthly, that right is a right to appeal the decision on review to the county court on a point of law: section 204. 71. Sixthly, the decisions of this court in 2011, in Manchester City Council v Pinnock and Hounslow London Borough Council v Powell, extended the powers of the county court when hearing applications by a local authority to recover possession of a property in order to comply with article 8 of ECHR. It appears to me that it is necessary for the same reason to interpret section 204 of the 1996 Act as empowering that court to assess the issue of proportionality of a proposed eviction following an adverse section 184 or 202 decision (if the issue is raised) and resolve any relevant dispute of fact in a section 204 appeal. As there is no other domestic provision involving the court in the repossession of the accommodation after an adverse decision, the section 204 appeal, which reviews the authoritys decision on eligibility for assistance, is the obvious place for the occupier of the temporary accommodation to raise the issue of the proportionality of the withdrawal of the accommodation. Alternatively, as Moses LJ stated in this case ([2013] EWCA Civ 804) at para 89, the occupier of the temporary accommodation may raise the issue of proportionality of such an eviction by way of judicial review in the Administrative Court, which similarly could resolve relevant factual disputes. An occupier might have to resort to judicial review if an authority were not willing to continue the provision of interim accommodation pending a review. 72. Finally, where a child forms part of the homeless family, the authority is under a duty in section 213A of the 1996 Act to seek the consent of the applicant to refer the facts of the case to the social services authority or department. That authority or department will carry out an assessment of the childrens needs as part of its general duty under section 17 of the Children Act 1989 to promote the welfare of children in need. Lewisham made such an assessment of CN, which it completed on 27 April 2012. The assessment concluded that if his family did not find private accommodation, the authority would seek to provide him with accommodation as a child in need. Newham completed an assessment of ZH under the Children Act 1989 on 1 May 2013. As a result the authority gave appropriate interim accommodation and financial support to assist FI in securing private rented accommodation, until, in the course of an appeal to the county court against its section 202 decision, Newham accepted that it owed FI a full housing duty. It is correct that the current arrangements involve eviction at the hands of the landlord or his agent, if the occupant does not vacate voluntarily in response to notice, while an enforcement officer would, if necessary, carry out an eviction after a court made an order for possession. But that does not in my opinion alter the balance between the interests of the individual and those of the community so as to render the eviction disproportionate. 73. 74. Having regard to the proceedings as a whole, there are several opportunities for the applicant to involve himself or herself in the decision making process and also procedures by which an independent tribunal can assess the proportionality of the decision to re possess the accommodation and determine relevant factual disputes. In my view there are sufficient procedural safeguards to satisfy the applicants article 8 rights. The article 8 challenge therefore fails. Conclusion 75. I would dismiss both appeals. LORD CARNWATH 76. I agree that the appeals should be dismissed for the reasons given by Lord Hodge. I add some comments on an argument which has been advanced in various forms on behalf of both the local authorities and the Secretary of State: that particular weight should be given to the Court of Appeals interpretation of the relevant statutory words, in effect because it has stood the test of time. 77. This, it is said, is reflected in the facts that the reasoning in Mohammed v Manek has stood without challenge for 20 years and was confirmed by the same court eight years ago in Desnousse v Newham LBC; that since at least 2006 it has been adopted without criticism or comment in the Departments statutory code of guidance; that it has been applied on numerous occasions by local authorities and the lower courts without apparent problems or injustice; and that Parliament has not legislated to reverse its effect despite many opportunities to do so. As Kitchin LJ observed in the Court of Appeal, when refusing permission to appeal in this case: Those opportunities include the Homelessness Act 2002, the Housing and Regeneration Act 2008 and the Localism Act 2011, each of which amended Part VII of the 1996 Act; and the Immigration and Asylum Act 1999, the Nationality, Immigration and Asylum Acts of 2002 and the Immigration, Nationality and Asylum Act 2006, each of which amended the 1977 Act. (para 83) 78. Mr Chamberlain for the Secretary of State goes further, drawing to our attention the committee debates on what became the Housing and Regeneration Act 2008 (HC Deb (2007 08), 24 January 2008 (afternoon), cc 512 516), in which the responsible minister apparently relied on the reasoning of the Court of Appeal in those cases when resisting a proposed amendment to extend the protection available to those in temporary accommodation under this legislation. 79. Appealing as such arguments may be as a matter of common sense, they need to be based on sound legal principle, if they are to be accepted as a ground of decision on an issue of statutory interpretation. Subject to narrowly defined exceptions (such as under Pepper v Hart [1993] AC 593), it is a cardinal constitutional principle that the will of Parliament is expressed in the language used by it in its enactments (Wilson v First County Trust Ltd (No 2) [2003] UKHL40; [2004] 1 AC 816 at [67] per Lord Nicholls). The courts primary task therefore is to ascertain the intention of Parliament from the language it has used. If that does not conform to the way it has been applied in practice, the conventional remedy, pending legislative amendment, is to correct the practice, not rewrite the law. 80. Notwithstanding that general principle, support for the use of subsequent practice as an aid to interpretation may be found in the textbooks and the authorities there cited. Mr Chamberlain groups them under two headings: tacit legislation and customary meaning. Tacit legislation 81. Under this heading, Mr Chamberlain relies on a passage in Bennion on Statutory Interpretation (6th ed.), p.661: Parliament is normally presumed to legislate in the knowledge of, and having regard to, relevant judicial decisions. If therefore Parliament has a subsequent opportunity to alter the effect of a decision on the legal meaning of an enactment, but refrains from doing so, the implication may be that Parliament approves of that decision and adopts it. This is an aspect of what may be called tacit legislation. 83. 82. With respect to that distinguished author, I have difficulty with the phrase tacit legislation, if it is intended to connote some form of silent endorsement by Parliament implied from its failure to act. As Lord Nicholls made clear, Parliament legislates by what it says, or what is said under its authority, not by what it does not say. Anything else can only be justified, if at all, as judge made law, and the criticisms implicit in that expression must be faced. It is true that this passage in Bennion was cited with approval by the Divisional Court in R (Woolas) v The Parliamentary Election Court [2010] EWHC 3169 (Admin), para 86, per Thomas LJ. But the context was quite different from the present. Following judicial interpretation of a particular statutory provision, which Parliament had re enacted in substantially the same form, the court held that the previous interpretation continued to apply. The principal authority relied on, Barras v Aberdeen Sea Trawling Co Ltd [1933] AC 402, was to similar effect. The House of Lords held that the word wreck or loss of a ship as interpreted by the Court of Appeal under the Merchant Shipping Act 1894 must be treated as having the same sense when re enacted in a 1925 statute. The House approved (at p 412 per Viscount Buckmaster) the statement of the rule by James L.J. in Ex parte Campbell: L. R. 5 Ch. 703, 706: Where once certain words in an Act of Parliament have received a judicial construction in one of the Superior Courts, and the Legislature has repeated them without alteration in a subsequent statute, I conceive that the Legislature must be taken to have used them according to the meaning which a Court of competent jurisdiction has given to them. 84. The principle has been often applied (a very recent illustration of the principle and its limits can be found in Manchester Ship Canal Co Ltd v United Utilities Water plc [2014] UKSC 40). However, account also needs to be taken of the comments of members of the House of Lords in the cases referred to by Lord Neuberger. Whatever the true scope of the principle, I do not find the expression tacit legislation a very apt description. In such cases Parliament has not remained silent. Rather, the previous court decision (even at a level below the highest court) is relevant, because it is part of the background against which Parliament has spoken, and by reference to which accordingly its intention can properly be ascertained. In any event, we were referred to no authority which has applied that principle to a case where, as here, the most that can be said is that Parliament has failed to take what might have seemed an obvious opportunity to legislate. Absence of legislation may be governed by many factors which have nothing to do with the perceived merits of a possible change, not least Parliamentary time and other government priorities. 85. 86. Nor, with respect to Mr Chamberlains initial submissions (in fairness, not strongly pressed on this point), can the argument be bolstered by reference to Ministerial statements to Parliament in response to possible amendments which were not in the event carried. The special exception allowed by Pepper v Hart is directed at Ministerial statements in support of legislation, and even then the circumstances in which reference is permissible are closely defined. It provides no support for reference to such a statement in relation to proposed legislation which was not in the event adopted. In the same context Mr Hutchings (for the two local authorities) sought support in words of Lord Neuberger in Williams v Central Bank of Nigeria [2014] 2 WLR 355, concerning the meaning of the word trustee in the Limitation Act 1980. That I read as no more than an application of another familiar principle, that Parliament is taken to use legal words in their ordinary legal sense. As Lord Neuberger said, it would have been surprising if a statute concerned with consolidating the law governing the powers and duties of trustees did not adopt an orthodox definition of trust and trustee (para 69). It provides no assistance in the present case. 87. 88. Other common law countries have also attempted to grapple with this issue but there does not appear to be a settled or uniform approach. The presumption applied in Barras v Aberdeen Steam Trawling has been restated in Australian and Canadian case law on numerous occasions: see e.g. the unanimous High Court bench of seven justices in Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96; 123 ALR 193 and the Supreme Court of Canada in Studer v Cowper [1951] SCR 450. However, the common law position has been modified by statute in both countries: see e.g. section 18 of the Acts Interpretation Act 1915 (South Australia) and section 45(4) of the Interpretation Act (RSC 1985). These provisions expressly remove the presumption that Parliament is taken to have approved or adopted any judicial construction of an enactment when it is re enacted. However, courts may still draw appropriate inferences from the legislative history of a statutory provision even in the absence of any common law presumption. The US Supreme Court has sometimes inferred that inaction on the part of Congress can be taken as approving or acquiescing in a judicial construction of a provision, especially where the construction has been brought to the attention of the public and Congress: see e.g. United States v Rutherford 442 US 544 (1979) and Bob Jones Univ v United States 461 US 574 (1983). Customary meaning 89. In the alternative Mr Chamberlain relies on what he calls the customary meaning of the words of the statute. He refers to the judgment of Lord Phillips in this court, in Bloomsbury International Ltd v Department for Environment, Food and Rural Affairs [2011] 1 WLR 1546, para 57 60. The appeal concerned the meaning of the phrase landed in the United Kingdom in the context of a levy imposed on those engaged in the sea fish industry. Lord Phillips gave a judgment agreeing with the majority but he was on his own on this issue. He drew attention to the the unusual feature that for nearly thirty years everyone concerned had proceeded on the basis of a broad interpretation of the phrase, that the levy had been collected on that basis, and the funds so raised disbursed in payment for schemes intended to benefit the sea fish industry activities which if the decision of the Court of Appeal were correct, must be drastically curtailed. He thought that in such circumstances there must be, at the very least, a powerful presumption that the meaning that has customarily been given to the phrase in issue is the correct one. 90. He quoted from a judgment of my own (Isle of Anglesey County Council v Welsh Ministers [2009] EWCA Civ 94, [2010] QB 163 para 43): Where an Act has been interpreted in a particular way without dissent over a long period, those interested should be able to continue to order their affairs on that basis without the risk of being upset by a novel approach. He commented that this had the air of pragmatism rather than principle, but agreed that courts are understandably reluctant to disturb a settled construction and the practice that has been based on that construction (referring to Bennion on Statutory Interpretation, 5th ed (2008), section 288 at p 913 and the authorities there cited). 91. He thought that a more principled justification for the principle would be that of contemporaneous exposition, citing Clyde Navigation (Trustees of) v Laird & Sons (1883) 8 App Cas 658, where Lord Blackburn had regarded the levying and payment of statutory dues on a particular basis without protest for twenty five years as a strong indication that there must exist some legal ground for exacting the dues. He noted, however, that Lord Watson had not agreed with this approach (except possibly in relation to very old statutes). Lord Phillips commented: An important element in the construction of a provision in a statute is the context in which that provision was enacted. It is plain that those affected by the statute when it comes into force are better placed to appreciate that context than those subject to it thirty years later. (para 61) 92. I doubt if contemporary exposition, in the sense described by Lord Phillips, would have provided a satisfactory answer in the Anglesey case. The issue was not one of linguistic usage, but of application in practice whether fishery rights granted by an 1868 Act should be treated as purely personal, rather than capable of assignment as had been the general understanding (and the basis on which subordinate legislation had been drafted) over the intervening century and a half. 93. The sentence quoted by Lord Phillips from my judgment was part of a longer section (paras 39 44) discussing the question left unresolved by Lord Blackburn and Lord Watson, that is the relevance of subsequent history as an aid to statutory interpretation. I referred to authorities cited in that connection in Halsbury's Laws Vol 44(1) Statutes, paras 1427 1430, which disclosed no consistent or settled view. They ranged from the contrasting views expressed in 1883 in the Clyde Navigation case, to much more recent observations in R (Jackson) v Attorney General [2006] 1 AC 262, by Lord Nicholls (paras 68 9) and by Lord Carswell (para 171), which tended to support Lord Blackburns approach. I concluded: My own respectful view is that Lord Blackburn's more liberal view is supported by considerations of common sense and the principle of legal certainty. Where an Act has been interpreted in a particular way without dissent over a long period, those interested should be able to continue to order their affairs on that basis without risk of it being upset by a novel approach. That applies particularly in a relatively esoteric area of the law such as the present, in relation to which cases may rarely come before the courts, and the established practice is the only guide for operators and their advisers.(para 43) Legal certainty and settled practice 94. Review of these authorities shows how varied are the contexts in which a settled understanding or practice may become relevant to issues of statutory interpretation. Concepts such as tacit legislation or customary meaning provide no more than limited assistance. The settled understanding may emerge from a variety of sources, not necessarily dependent on action or inaction by Parliament, or particular linguistic usage. Nor can the debate, exemplified by the difference 130 years ago between Lord Watson and Lord Blackburn, be reduced to one between principle and pragmatism, as Lord Phillips suggested. Rather it is about two important but sometimes conflicting principles legal correctness and legal certainty. In drawing the balance between them, as in most areas of the law, pragmatism and indeed common sense have a legitimate part to play. In my view this case provides an opportunity for this court to confirm that settled practice may, in appropriate circumstances, be a legitimate aid to statutory interpretation. Where the statute is ambiguous, but it has been the subject of authoritative interpretation in the lower courts, and where businesses or activities, public or private, have reasonably been ordered on that basis for a significant period without serious problems or injustice, there should be a strong presumption against overturning that settled practice in the higher courts. This should not necessarily depend on the degree or frequency of Parliamentary interventions in the field. As in the Anglesey case, the infrequency of Parliamentary intervention in an esoteric area of the law may itself be an added reason for respecting the settled practice. On the other hand it may be relevant to consider whether the accepted interpretation is consistent with the grain of the legislation as it has evolved, and subsequent legislative action or inaction may be relevant to that assessment. 95. 96. This would not be new law, even at this level. The approach receives strong endorsement, in a context close to the present, from the House of Lords decision in Otter v Norman [1989] AC 129. In interpreting the phrase payments in respect of board in the Rent Acts, the House of Lords placed weight on the obiter observations of the Court of Appeal in a case decided more than 60 years before, in the absence of legislative intervention in the ensuing period on this particular point (in spite of the enactment of more precise statutory definitions on related aspects). Lord Bridge (giving the only substantive speech) said: There has been no reported English decision bearing upon the point after Wilkes vs Goodwin [1923] 2 KB 86. But Parliament chose not to interfere in relation to board, and it seems to have been assumed ever since that the majority view in Wilkes vs Goodwin, albeit expressed obiter, correctly stated the law, in the words of Bankes LJ, at p 93, that any amount of board which is more than de minimis will suffice to exclude a tenancy from statutory protection. Thus successive editions of Sir Robert Megarry's standard text book on the Rent Acts (Megarry, The Rent Acts) have stated that: In practice, the dividing line appears to fall between the early morning cup of tea on the one hand and 'bed and breakfast' on the other:" see 10th ed (1967), p 141. The same view has been adopted in Scotland: see Holiday Flat Co. vs Kuczera, 1978 SLT (Sh.Ct.) 47. My Lords, I think we must assume that for many years many landlords and tenants have regulated their relationships on this basis, and even if I thought that a different construction could reasonably be placed on section 7(1) of the Act of 1977 I would not think it right to adopt it now and to upset existing arrangements made on the basis of an understanding of the law which has prevailed for so long. (p 145 6) 97. This provides direct authority for the application of the settled practice principle in a situation closely analogous to the present. That case was concerned with the basis on which private landlords and tenants had regulated their relationships. I see no reason why the same principle should be less relevant to relations between housing authorities and those for whom they are responsible under the homeless persons legislation. Indeed, given the pressures facing authorities in this area, and the financial constraints under which they are acting, it is particularly important that the legal and policy context in which they act should be clear and settled. One of the purposes of the departmental code is to provide such guidance. Although the guidance may not compete in terms of legal scholarship with Sir Robert Megarrys great work on the Rent Acts, it has the underpinning of statute, and the authorities were bound to have regard to it. If that practice is now overturned, they have been responsible, albeit acting in good faith, for many unlawful evictions. It may be that this result would have to be accepted, if the statute properly construed permitted no other reasonable interpretation. But this is not such a case. With respect to Lord Neuberger I do not consider that the authority of Lord Bridges words is undermined by the absence of any reference to Barras or Farrell. As I have explained they were dealing with a different issue, which had nothing directly to do with the issue of settled practice as an aid to interpretation. 98. For these reasons, even if the issues were more finely balanced than indicated by Lord Hodges judgment, the settled practice principle would in my view be an additional reason for dismissing the appeal. LORD NEUBERGER: Introductory 99. The two issues raised by these appeals are identified by Lord Hodge in para 1 of his judgment, and I gratefully adopt his explanation of the factual and legal background as see out in paras 2 19 and 58 60 of his judgment. 100. While I agree with Lord Hodge on the second issue, the first issue gives rise to a difficult point, on which I have reached a different conclusion. 101. The first issue, in a nutshell, is whether accommodation occupied pursuant to a temporary licence granted to a homeless person by a local housing authority under section 188 of Part 7 of the Housing Act 1996 (the 1996 Act), while the authority investigates whether she is eligible for assistance and if so what if any duty is owed to her under Part 7, is occupied by that person as a dwelling under a licence within the meaning of section 3(2B) of the Protection from Eviction Act 1977 (PEA 1977), as amended by the Housing Act 1988. 102. I agree with what Lord Hodge says at para 23, namely that the effect of section 3(2B), when read together with section 3(1) of PEA 1977 and cases such as Wolfe v Hogan [1949] 2 KB 194, is that the issue can, at least normally, be reformulated as being whether, in the light of the terms of the licence and the circumstances in which it was granted, the purpose of the licence, objectively assessed, was to enable the licensee to occupy the accommodation in question as a dwelling ie was the accommodation licensed for occupation as a dwelling? 103. I include the qualification at least normally, because it is possible that, after the grant of the licence, something may have been said or done which justifies the conclusion that the parties agreed or must have intended a change in the purpose of the licence. However, the mere fact that the occupation continues longer than expected, for instance while the investigation or appeal process continues under Part 7 of the 1996 Act, would, on its own, be insufficient to change the objectively assessed intention of the parties. The relevance of court decisions in relation to the Rent Acts 104. The words occupied as a dwelling under a licence have to be interpreted in their context, as is illustrated by the point made in para 102 above. The statutory history may be a legitimate factor to take into account as part of the context, given that PEA 1977 consolidated section 16 of the Rent Act 1957 and Part III of the Rent Act 1965, at the same time as Parliament was consolidating the rest of the Rent Act legislation (with certain amendments) in the Rent Act 1977. Prior to that, almost all of the Rent Act legislation had previously been in the Rent Act 1968, which itself consolidated all the previous Rent Act legislation (with the exception of those provisions which were consolidated in PEA 1977). 105. However, there are many judicial warnings against the use of previous statutory provisions when interpreting the words in a consolidating statute. The law on the topic was authoritatively discussed in R v Environment Secretary Ex p Spath Holme Ltd [2000] UKHL 61, [2001] 2 AC 349. Lord Bingham said at p 388 that it is plain that courts should not routinely investigate the statutory predecessors of provisions in a consolidation statute, particularly where the issue concerns the construction of a single word or expression, although he added that it seems to me legitimate for the court even incumbent on it to consider the earlier, consolidated, provision in its social and factual context for such help as it may give, the assumption, of course, being (in the absence of amendment) that no change in the law was intended. Lord Nicholls, having referred to the legislative history as a potential external aid on the previous page, said at p 398 that the constitutional implications point to a need for courts to be slow to permit external aids to displace meanings which are otherwise clear and unambiguous and not productive of absurdity, Lord Hope said at pp 405 406 that there is no doubt that, as general rule, it is not permissible to construe a consolidating enactment by reference to the repealed statutes which that enactment has consolidated, but added that an exception may be made where words used in the consolidation Act are ambiguous or where the purpose of a statutory word or phrase can only be grasped by an examination of the social context in which it was first used. To the same effect at p 409, Lord Hutton said that the underlying principle which emerges from the cases is that in construing a consolidation Act a court should not have regard to earlier enactments unless the language of the Act is unclear or ambiguous or there is something in the context of the Act or the relevant section which causes the court to consider that it should look for guidance to an earlier enactment or enactments. 106. Accordingly, any reliance in the present appeals on decisions as to the meaning of words such as dwelling and residence in the Rent Act legislation, which stretches back to 1915, may be hard to justify. Nonetheless, the statutory history is at least be worth examining because of the division of opinion in this court as to the meaning of the words, the fact that dwelling and even residence are words not greatly in current use, and also because so much judge made law has been added to, even incorporated in the Rent Act legislation. Quite apart from this, we were referred to many cases concerned with the meaning of dwelling and residing in the Rent Act context, and so it may be helpful to start by considering those cases and the statutory history of PEA 1977. The Rent Act context 107. Since 1968 (reflecting a combination of previous statutory and judge made law), the Rent Acts have provided that (i) a tenancy was protected provided that, inter alia, it was a tenancy of a dwelling house, which could be a house or part of a house, which was let to the tenant as a separate dwelling (section 1 of the Rent Act 1968, now section 1 of the Rent Act 1977), (ii) after such a tenancy expired, the tenant had a statutory tenancy, ie a right to retain possession, so long as he occupie[d] the dwelling house as his residence (section 3(1)(a) of the Rent Act 1968, now section 2(1)(a) of the Rent Act 1977), and (iii) oversimplifying things a little, after a statutory tenant died, a relation who had been residing with him could succeed to the tenancy (Schedule 1 to the 1968 Act, now Schedule 1 to the Rent Act 1977). 108. The expressions dwelling house and let as a separate dwelling were included in the Rent Act legislation from the start, namely in section 2(2)(a) of the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915. However, the requirement that a tenant must occupy the dwelling house as a residence if he was to enjoy a statutory tenancy was developed by the courts, perhaps most significantly in Haskins v Lewis [1931] 2 KB 1 and Skinner v Geary [1931] 2 KB 546. The courts developed the rule that a tenant who was absent from the dwelling house had to establish animus revertendi and corpus possessionis, inward and outward manifestations of residential occupation, before he could be held to be occup[ying] the dwelling house as his residence see eg Brown v Brash [1948] 2 KB 247. Similarly, it was decided that a tenant who had another principal home could occupy a dwelling house as a residence, provided it was a genuine home, and not merely a resort of convenience see Beck v Scholz [1953] 1 QB 570. 109. Residence only became a statutory requirement of a statutory tenancy in section 3 of the Rent Act 1968, subsection (2) of which, somewhat unusually, provided that the expression occupies as his residence was to be construed as it had been by the courts since 1920 (now re enacted in section 2(3) of the Rent Act 1977). The distinction between a dwelling house let as a dwelling and occupie[d] as a residence was thus that a tenancy of a dwelling house let as a separate dwelling remained protected by the Rent Acts until it determined, whereas the question of the tenants residence only arose after the contractual tenancy came to an end. As for the residing with requirement for succession to a statutory tenancy, it was introduced early on see section 12(1)(g) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920. 110. Turning to the cases on the Rent Acts to which we were referred, I do not consider that cases on the residence requirement for statutory tenants, such as Skinner, Walker v Ogilvy (1974) 29 P&CR 288 and Regalian Securities v Scheuer (1982) 5 HLR 48, are helpful in the present context. The primary issue on these appeals is whether premises are let as a dwelling (or licensed for occupation as a dwelling) in circumstances where the occupier has no other home. Those cases were concerned with a different issue, namely whether the tenant was occupying the relevant premises as a residence, which is a different expression, with a different statutory history and a different statutory purpose. But at least as importantly, in each of those cases the tenant had another residence, which was his principal home. 111. The words dwelling and dwelling house in the Rent Acts are used in a phrase dealing with the objective purpose of the letting of the premises in question, whereas the word residence considered in those cases was used in a phrase dealing with the subsequent use of, and attitude of the occupier to, those premises. Further, in all the cases mentioned in para 110, the tenant had another home, and the court was considering whether the tenants intermittent use of, or long absence from, the premises concerned, defeated his contention that he occupie[d] the dwelling house as his residence, given that he undoubtedly had another home, which even on his case was his principal home. These appeals are concerned with individuals for whom the premises in question would be their only home as they would otherwise be homeless, and therefore the quality or intensity of their use of the premises is not in issue. What is in issue on these appeals is the effect of the precarious, provisional, and short term nature of their occupation of what is their only accommodation, which was not a feature of the two homes cases on residence. 112. Even more unhelpful in my view are cases such as Collier v Stoneman [1957] 1 WLR 1108, Swanbrae v Elliott (1986) 19 HLR 86 and Freeman v Islington LBC [2010] HLR 6, which were concerned with the question whether a person was residing with a statutory or assured tenant who has died, and therefore had a right to succeed to a statutorily protected tenancy. Not only do many of the problems described in the immediately preceding two paragraphs apply, but, additionally, there are the consequences of the important word with which has to be taken into account, and which of course plays no part in the instant case. 113. Previous decisions concerned with the question whether premises were a dwelling house which was let as a dwelling under the Rent Acts are potentially more in point. The history of the courts approach to the expressions was discussed illuminatingly by Wilson LJ in Pirabakaran v Patel [2006] EWCA Civ 685, [2006] 1 WLR 3112. As he explained in para 22, dwelling house has been given a broad meaning ever since Epsom Grandstand Association Ltd v Clarke [1919] WN 171. However, as in Wilson LJs discussion in Pirabakaran at paras 24 29, almost all of the cases to which we were referred which addressed the question of whether premises were let as a [separate] dwelling were concerned with premises let for commercial purposes, but with some residential use. In my view, those cases are of no real assistance in the present case as the issue was very different. Although each case involved someone (normally the tenant) sleeping in the premises concerned, the landlords argument in almost all the cases was that the premises had been let for a very different purpose. 114. Thus, cases such as Wolfe or MacMillan & Co Ltd v Rees [1946] 1 All ER 675 involved premises which had been let primarily for commercial use, and the issue was whether the indulgence of the landlord permitting the tenant to sleep on the premises brought the letting within the Rent Acts. The facts did not require the court to consider the quality of the contemplated habitation (to use a neutral word) required for the premises to be let as a dwelling. Having said that, it is perhaps worth noting that Evershed J made the point in MacMillan at 677H that to sleep on particular premises at night, or to have one's meals upon them by day, or both, ought not ipso facto to have the effect in law of making those premises a dwelling house . In Martin Estates Co Ltd v Watt [1925] NI 79, officers who slept in police barracks were held not to be protected by the Rent Acts. However, that was because the barracks had been let for the public service, and the court held that the surrounding circumstances and nature of the demised premises made it clear that the purpose of the letting was not as a dwelling. As was explained in the judgment, premises let for use as a prison, or as a hospital, would not be held to be let as a dwelling simply because prison officers, or doctors and nurses, slept and ate on the premises, even if that was contemplated at the time of the letting. Again, that is very different issue from that raised in these appeals, because it is ultimately concerned with living accommodation, which was very much ancillary to the purpose of the letting. 115. The issue in such cases was explained by Romer LJ in Whiteley v Wilson [1953] 1 QB 77, 85, in these terms: [T]he question in such cases, where the subject matter of the tenancy is one building used partly as a dwelling house and partly as a shop, and no purpose is specified in the tenancy agreement, is whether the building should in a broad sense be regarded as a dwelling house which is partly, or even substantially used for a shop, or on the other hand as a shop which is used in part for residential purposes. It is not without significance that Romer LJ seems to have regarded residential purposes as being effectively synonymous with dwelling house let as a dwelling. In the same case, Sir Raymond Evershed MR similarly treated the letting of a dwelling house as a dwelling as equivalent to the premises concerned being used for residential purposes at p 83. Uratemp Ventures v Collins [2001] UKHL 43, [2002] 1 AC 301 116. Although the issue in the House of Lords case of Uratemp Ventures v Collins [2001] UKHL 43, [2002] 1 AC 301 concerned the question whether certain premises were a dwelling house let as a dwelling, the issue was, again, very different from that in these appeals. It was whether a room was precluded from being within the Housing Act 1988 (section 1(1) of which uses the expression dwelling house let as a separate dwelling, obviously taken from the Rent Acts), because the tenant was forbidden to cook in it. The decision of the House of Lords removed some long standing and artificial distinctions which many people assumed had been built up by the courts over the years (in particular, the quaint notion that a tenancy of a room without washing facilities could be a letting of the room as a separate dwelling, whereas a tenancy of a room without cooking facilities could not). 117. Further, I must confess to a little confusion as to the precise nature of the ratio of the case other than the simple point that the prohibition on cooking did not prevent such a room being a dwelling house let as a separate dwelling. Thus, Lord Irvine LC seems to have addressed the question by reference to the composite expression see para 2. However, Lord Bingham, with whom Lord Irvine and Lord Steyn agreed, approached the issue on the basis that it was whether the room was a dwelling house see paras 9, 10 and 13. So did Lord Steyn (with whom Lord Irvine and Lord Bingham agreed), who apparently thought it plain that the room had been let as a separate dwelling see paras 13 15, especially the third sentence of para 13. Lord Millett, with whom Lord Irvine, Lord Steyn and Lord Hobhouse agreed, considered the issue by reference to the expression let as a separate dwelling see paras 30 and 40ff. Although this can be said to represent a divergence of approach, it is fair to say that all their Lordships were concerned with the meaning of dwelling, whether as part of the composite noun dwelling house, or in the expression let as a separate dwelling or both. 118. However, some general guidance was given in Uratemp. Lord Steyn said at para 15 that dwelling house is a word of wide import used interchangeably with lodging, and conveys the idea of a place where somebody lives. He continued: The setting in which the word appears in the statute is important. It is used in legislation which is intended to afford a measure of protection to tenants under assured tenancies. This context makes it inappropriate for the court to place restrictive glosses on the word dwelling. On the contrary, the courts ought to interpret and apply the word dwelling house in [the Housing Act 1988] in a reasonably generous fashion. This observation is supported by Lord Irvines deprecation in para 2 of a restrictive interpretation given that the statutory purpose was to give some protection to tenants in modest rented accommodation. It is also supported by Lord Bingham in para 10, where he said that a dwelling house describes a place where someone dwells, lives or resides, and stated that the legislation should be interpreted bearing in mind that it was directed to giving a measure of security to those who make their homes in rented accommodation at the lower end of the housing market. 119. Lord Millett took a slightly different approach, saying at para 30 that: The words dwell and dwelling are ordinary English words, even if they are perhaps no longer in common use. They mean the same as inhabit and habitation or more precisely abide and abode, and refer to the place where one lives and makes one's home. They suggest a greater degree of settled occupation than reside and residence, connoting the place where the occupier habitually sleeps and usually eats, but the idea that he must also cook his meals there is found only in the law reports. And in the following paragraph he added this: In both ordinary and residential accommodation is a dwelling if it is the occupier's home (or one of his homes). It is the place where he lives and to which he returns and which forms the centre of his existence. Just what use he makes of it when living there, however, depends on his mode of life. literary usage, 120. Unsurprisingly, on these appeals the respondent Housing Authorities and the Secretary of State relied on Lord Milletts suggestion that dwell and dwelling involve a greater degree of settled occupation than reside and residence. However, at least to me, the two types of word do not have this rather subtle distinction: a temporary dwelling is as natural a concept as a temporary residence, and carries the same meaning. Further, I would have thought that, particularly in the context of the Rent Acts and associated legislation, such a subtle distinction between two words which are effectively synonyms is of questionable value in that it is likely to lead to over subtle distinctions. Indeed, as already mentioned in para 115 above, Evershed MR and Romer LJ seem to have thought that premises were a dwelling house let as a separate dwelling if the principal use was intended to be residential, using the latter word in its normal way. And in Beck at pp 575 576, Evershed MR plainly treated home, a rather more frequently used word, as a synonym for residence. And I note that what many people think of as the bible on the topic, Megarry on The Rent Acts, treats residence as synonymous with dwelling when discussing the meaning of dwelling in the phrase let as a separate dwelling see 11th edition (1988) pp 109 117. 121. In any event, as a matter of statutory interpretation, in the context of the Rent Acts it seems pretty plain to me that Lord Milletts suggested distinction is demonstrably wrong. As explained briefly in paras 107 111 above, the law relating to residence had been conceived and developed up by the courts between 1920 and 1968, so that, as a matter of policy, a degree of intensity of occupation of the premises (in the case of intermittent use), or physical and mental commitment to the premises (in the case of absence), was required on the part of the tenant before the court was prepared to hold a tenant resident in a dwelling house, and the law as thus developed was incorporated into the statutory scheme in 1968. No such requirements as to the quality of the tenants use of the dwelling house were developed in relation to the issue of whether premises were let as a dwelling; on that aspect, issues arose either because of the mixture of residential and commercial uses, or because the demised premises lacked an allegedly essential functionality. 122. Furthermore, given the structure of the opening few sections of the Rent Act 1968 (and the Rent Act 1977), as summarised in para 107 above, the draftsman must, in my view, have assumed that a tenant of a tenancy of a dwelling house let as a separate dwelling could lawfully occup[y] the dwelling house as his residence. That is because it seems unlikely that he would have envisaged that it would be impermissible for a tenant to occup[y] a dwelling house as his residence if it was a dwelling house let as a separate dwelling. This must logically mean that the draftsman considered that dwelling was at least as wide as residence. 123. That point is reinforced when one considers the two homes cases such as those referred to in paras 109 110 above, and more fully discussed by Lord Hodge in paras 36 38 of his judgment. In those cases, the occupier was held to have no statutory tenancy, because his use of the premises concerned was insufficient to enable him to establish that he occupie[d] the dwelling house as his residence. Yet there was no suggestion in any of those cases that the premises were not a dwelling house or had not been let as a separate dwelling. Indeed, in Walker at p 290, Orr LJ specifically referred to the premises in that case as the dwelling house that is the flat. Conclusion on the Rent Act cases 124. In my view, therefore, even in the absence of the concerns expressed in Spath Holme as to the appropriateness of relying on the meaning of words or expressions in predecessor legislation, only limited assistance can be safely gathered from the history of the Rent Act legislation or the decided cases on the meaning of those statutes, as to the meaning in 3 of PEA 1977 of the expression let as a dwelling or licensed for occupation as a dwelling. 125. However, para 15 of Lord Steyns opinion in Uratemp is valuable to the extent that it emphasises that (i) dwelling is an ordinary English word, (ii) it is of wide import, and (iii) in the Rent Act type of context, it is to be interpreted generously. Lord Milletts suggestion in the same case that dwelling implies a more permanent meaning than residence may be said to be inconsistent with the latter two observations, but, for the reasons I have given, it seems to me to be wrong as a matter of ordinary language as well as in the context of the Rent Acts. The Protection from Eviction Act 1977 126. The effect of section 3(1), (2A) and (2B) of PEA 1977 is to render it an offence for the owner of premises, which are let as a dwelling, or occupied as a dwelling under a licence, albeit subject to exclusions identified in section 3A, to take possession of the premises otherwise than by proceedings in court, where the occupier continues to reside in the premises, provided, according to subsection (2), that that occupation is lawful. 127. As mentioned in para 120 above in relation to the wording of the Rent Acts, the wording of section 3(1) of PEA 1977 indicates that the concept of dwelling is at least as wide as residing, as the draftsman appears to have proceeded on the basis that it would be lawful to reside in any premises let as a dwelling. Indeed, I consider that the structure of section 3(1) of PEA 1977 makes the point even more clearly than sections 1 and 3 of the Rent Act 1968 (or sections 1 and 2 of the Rent Act 1977). The words continues to reside in section 1(1)(a) of PEA 1977 seem to me plainly to assume that the premises let as a dwelling house will have been resided in at the inception of the tenancy, and therefore ex hypothesis, that they can lawfully be resided in. Furthermore, PEA 1977 has no equivalent to section 3(2) of the Rent Act 1968 (see para [11] above), so reside must be assumed to have its ordinary meaning, and is not encrusted with the case law to which section 3(2) of the 1968 Act makes reference. Thus, any premises let as a dwelling for the purpose of section 1(1) can be resided in for the purpose of section 1(1), ergo a dwelling has at least as wide a meaning as residence. This is not called into question by section 3(2) of PEA 1977, which appears to me to be included simply to exclude unlawful occupiers from the protection of PEA 1977. 128. This conclusion is also supported by section 5 of PEA 1977, which requires a notice to quit premises let as a dwelling (or a notice to determine a licence to occupy premises as a dwelling) to give at least four weeks notice, but which makes no reference as to how the premises are occupied whether as a residence or otherwise. It would be curious if any premises, other than those subject to an excluded tenancy or excluded licence, which were lawfully occupied as a residence, were not subject to that provision, which again suggests that the meaning of dwelling is at least as broad as residence. Other cases on statutory provisions referring to residence and dwelling 129. As Lord Hodge rightly implies in para 51 in relation to the appellants argument based on the inclusion of the word dwelling in section 130 of the Social Security Contributions and Benefits Act 1992, one has to be careful before taking into account statutes in different fields even where they use the same words. However, although they are of limited value, I consider that observations made in two House of Lords cases, Railway Assessment Authority v Great Western Railway Co [1948] AC 234 and Mohamed v Hammersmith and Fulham LBC [2001] UKHL 57, [2002] AC 547, about the normal meaning of the words residing and dwelling are of some relevance to the present case. As to Railway Assessment, the fact that dwelling and dwelling house are somewhat archaic expressions suggests that real help may be obtained from a highly authoritative source considering their meaning at a time when they were in more current usage. And the fact that Mohamed v Hammersmith is a House of Lords case concerned with accommodation provided under section 188 of the 1996 Act means that it is at least worth considering in another case involving the same provision. 130. Railway Assessment concerned the expression occupied as a dwelling house in the context of a rating statute. The property in question was a hostel in Didcot, which had a canteen and many furnished cubicles, in which railway company employees were permitted to live there while they were temporarily working away from their home stations see at pp 236 237. Although it is a rather different context from the present, Lord Thankerton (who gave the only reasoned opinion) made it clear at p 238, that he thought that the words occupied as a dwelling house must be given their ordinary meaning. He went on to explain that the accommodation in that case had been provided for staff while they were working far from home, because there was insufficient lodging house accommodation at Didcot. He then said that [w]hile they are at their work, these members of the staff may properly be said to dwell or reside in the hostel, or to inhabit the hostel. On three subsequent occasions at pp 238 239, he again used the expression dwell or reside or residence or dwelling, treating the concepts of residing and dwelling as meaning much the same thing. At p 240, Lord Thankerton rejected the view that the occupation by the employees was not as a dwelling because it was too transient and their families lived elsewhere, saying that the fact that the occupants of the cubicles do reside in the hostel through all the periods of their duty, and do not leave the hostel until their employment at Didcot terminates, provides a sufficient element of permanence. He added that he could not think that the presence of families and household goods is an essential element. 131. It appears to me that this decision provides a measure of support for a number of propositions. First, and perhaps least relevantly for present purposes, it shows the width of the term dwelling house, as used in normal parlance. Secondly, it confirms the notion that the normal concept of dwelling includes a relatively temporary residence even where the premises concerned consist of a room in an employees hostel and the occupier has a permanent home where his family remains. Thirdly, the reference to lodging house accommodation strikes the same note as Lord Steyns observation in Uratemp (see para 118 above). Fourthly, the discussion supports the notion that, as a matter of ordinary language, the concepts of dwelling and residing are very similar, and can often be used interchangeably (consistently with the way in which Evershed MR and Romer LJ expressed themselves in Whiteley). 132. In relation to the ordinary meaning of the word residence, I consider that the decision of the House of Lords in Mohamed v Hammersmith is of assistance. That case is also rather more in point on the facts than any of the other cases so far discussed, as the issue was whether a person was normally resident (for the purposes of section 199 of the 1996 Act) in accommodation provided under section 188 of the 1996 Act, the very section under which accommodation was provided to the appellants in the instant appeals. 133. Having said that words like normal residence may take their precise meanings from [their] context, Lord Slynn (who gave the only reasoned judgment) said this in para 18: [T]he prima facie meaning of normal residence is the place where at the relevant time the person in fact resides. So long as that place where he eats and sleeps is voluntarily accepted by him, the reason why he is there rather than somewhere else does not prevent that place from being his normal residence. He may not like it, he may prefer some other place, but that place is for the relevant time the place where he normally resides. If a person, having no other accommodation, takes his few belongings and moves into a barn for a period to work on a farm that is where during that period he is normally resident, however much he might prefer some more permanent or better accommodation. In a sense it is shelter but it is also where he resides. Where he is given interim accommodation by a local housing authority even more clearly is that the place where for the time being he is normally resident. The fact that it is provided subject to statutory duty does not, contrary to the appellant authority's argument, prevent it from being such. 134. As I read those observations, Lord Slynn was saying that a person provided with temporary accommodation under section 188 of the 1996 Act, as a matter of ordinary language normally resides in that accommodation, even though it is provided to her on a temporary basis by a housing authority, because she lives there and because she has no other home. To my mind, it follows that for the same sort of reasons, the person may, as a matter of normal language be said to be dwelling in such accommodation, which would naturally be described as a dwelling house. Conclusions on the first issue 135. The purpose of section 3 of PEA 1977 is to prevent a person who has been lawfully living in premises, which have been let as a dwelling or licensed to be occupied as a dwelling, being evicted without a court order, and the purpose of section 5 is to ensure that, where premises have been let as a dwelling, or licensed to be occupied as a dwelling, on terms which require notice to vacate, the occupier must be given at least 28 days notice. Plainly, it seems to me, these sections should not be accorded an unnaturally narrow effect; indeed, I think one should lean in favour of a wide, rather than a narrow, meaning when it comes to deciding the ambit of these sections. They do not represent a substantial incursion into the property rights of the owners of premises, and they reflect a policy that people who have been lawfully living in premises should not be summarily evicted or locked out. Because of the nature of the rights accorded by these provisions and their aim of protecting people against the inconvenience and humiliation of being deprived of their homes summarily, one would expect the two sections to have a wide, rather than a narrow, meaning, a conclusion supported by the passages which I have referred to in the opinions in Uratemp in para 118 above. 136. I do not consider that it would be appropriate to exclude from the ambit of those sections accommodation, whether a house or flat or room, which has been lawfully occupied by a person (or families) as her (or their) only home, simply because her (or their) occupation is short term, provisional or precarious. It is a perfectly natural use of the word to describe a person as dwelling, or indeed residing, in accommodation provided by a housing authority under section 188 of the 1996 Act, or occupying those premises as a dwelling house, even though she may be there for a short term on a precarious basis. Of course, it would be wrong to say that, simply because she has no other dwelling, the accommodation must be that persons dwelling: a person does not need to have a dwelling. But, equally, as a matter of language, the fact that the person would be otherwise homeless makes it all the more difficult to contend that it is an inappropriate use of language to describe the accommodation provided to her under section 188 as a dwelling, even if it was on a temporary basis, pursuant to a statutory duty. To describe a house flat or room as the occupiers temporary or short term dwelling is a perfectly natural use of language. 137. Accordingly, the fact that the arrangement under which a person is permitted to occupy premises as her only habitation is short term and precarious does not seem to me to prevent them being let as a dwelling house or occupied as a dwelling, as a matter of ordinary language. So long as the arrangement persists, the premises are that persons lodging and the place where [she] lives, to quote Lord Steyn, or the place where [she] lives and to which [she] returns and which forms the centre of [her] existence to quote Lord Millett, in Uratemp. The mere fact that the landlord or licensor has the right to substitute other premises on short notice does not seem to me to alter that conclusion: unless and until that right is exercised, the premises are the occupiers lodging, where she lives and to which she returns. If that were not so, it would have provided a very simple method for private sector landlords to avoid the incidence of the Rent Acts. I draw some support for this conclusion from the observations of Lord Thankerton in Railway Assessment and of Lord Slynn in Mohamed v Hammersmith, in addition to the observations in Uratemp. 138. Of course, the nature of the premises subject to the letting may be such that it might not be natural to refer to them as a dwelling or dwelling house (as illustrated by the cases considered in paras 113 115 above). However, apart from such cases where the nature of the premises precludes them being described as being let or occupied as a dwelling, I find it hard to see why the relatively temporary nature of the occupation, or the fact that the occupier can be required to shift to other premises on a days notice, prevents premises being let or licensed as a dwelling or occupied as a dwelling, or indeed occupied as a residence, particularly where the tenant or licensee has no other home. Indeed, many might think that those who are housed under section 188 of the 1996 Act are the sort of people who particularly need the protection of PEA 1977, given that, whatever the merits of their claims under Part 7 of the 1996 Act, they are likely to come from the more vulnerable sectors of society. 139. In my opinion, the view that people housed under section 188 of the 1996 Act are entitled to the benefit of sections 3 and 5 of PEA 1977 receives considerable support from section 3A of PEA 1977, which identifies the arrangements which are excluded from the ambit of section 3. The exclusions in subsections (6)(8) appear to me to be particularly significant for present purposes. They include a tenancy or licence (i) if it was granted as a temporary expedient to a person who entered the premises as a trespasser, (ii) if it is for a holiday only, (iii) if it is gratuitous (iv) if it is granted in order to provide accommodation for asylum seekers and their families under Part VI of the Immigration and Asylum Act 1999, or (v) if it confers rights of occupation in a hostel, within the meaning of the Housing Act 1985, which is provided by [certain defined authorities]. These are all types of licences which need not have been excluded from the ambit of PEA 1977 if it did not apply to short term, precarious and/or charitable arrangements, and so they strongly support my conclusion. I am unimpressed by the point that some of these licences or tenancies could last a long period. First, that point does not apply to categories (i) and (ii). Secondly, the fact that the arrangement in categories (iv) and (v), or indeed category (iii), may continue for some time in a few cases is not really the point, as one is normally concerned with the purpose of the arrangement in question when it started, and almost all such arrangements would be expected to be short term. Indeed, it may well be that interim accommodation provided under Part 7 of the 1996 Act will occasionally be occupied for a long time eg because the appeal process is protracted. 140. I was initially attracted by the argument developed in para 33 of Lord Hodges judgment, that, because a person who is temporarily housed by a housing authority under Part 7 of the 1996 Act, while inquiries are pending, should be treated as homeless for the purpose of that Act, he can and should be treated as not being provided with a dwelling, or indeed a residence under PEA 1977. However, on reflection, it appears to me that this does not involve a proper approach to statutory interpretation. As already mentioned, the fact that dwelling is given a certain meaning in the 1996 Act (whether in the statute or by the court) does not entitle that meaning to be simply applied to another Act, namely PEA 1977, and it appears to me to be a fortiori that the fact that someone is homeless for the purposes of one Act does not mean that she cannot have a dwelling or indeed a residence for the purpose of PEA 1977. 141. Further, as already mentioned, the House of Lords in Mohamed v Hammersmith accepted that, as a matter of ordinary language, the occupier of accommodation provided under section 188 of the 1996 Act would be normally resident in that accommodation, and therefore was normally resident for the purposes of section 199 of the 1996 Act. It seems to me that, if a person occupying accommodation provided under section 188 of the 1996 Act is normally resident in that accommodation for the purposes of another provision in the same Act, then, to put it at its lowest, it can scarcely be inconsistent with section 188 to say that she continues to reside in the accommodation for the purposes of another Act. And, if she resides for the purposes of section 3 of PEA 1977, as was envisaged when her tenancy or licence was granted, then, for the reasons already given, it would seem to follow that the premises must have been let as a dwelling or licensed for occupation as a dwelling. The effect of previous Court of Appeal decisions on the issue 142. The Court of Appeal in previous decisions on the interrelationship of Part 7 of the 1996 Act and PEA 1977 had come to a different conclusion see Mohammed v Manek and Kensington and Chelsea LBC (1995) 27 HLR 439 and Desnousse v Newham LBC [2006] QB 831. It is argued by the respondent Housing Authorities and the Secretary of State that we should not disturb the effect of those decisions, and therefore dismiss these appeals, even if we would not otherwise have done so, on the ground that Parliament has amended PEA 1977 and re enacted the earlier homelessness legislation in the 1996 Act, on terms which were consistent with those decisions. However, it is accepted that there is no specific statutory provision which demonstrates Parliamentary confirmation or assumption that those decisions were correct. 143. In my view, where, as here, Parliament has not specifically enacted any legislation which shows that it must have assumed or accepted that the law as stated by the Court of Appeal is correct, it is not safe in practice or appropriate in principle to draw the conclusion that the present legislation bindingly assumes sub silentio that the law is as the Court of Appeal had decided. Parliament must be taken to know not only that the Court of Appeal has decided as it has, but also that the House of Lords, or now the Supreme Court, could overrule the Court of Appeal. It would, in my view, be dangerous both in practice and principle, for the courts to start second guessing the legislature. Of course, where it is clear that, in subsequent legislation, Parliament has expressly, or even impliedly, accepted clearly the correctness of the Court of Appeal decision, or adopted the decision, different considerations are very likely to apply. 144. I note what Lord Carnwath says about the principle in Barras v Aberdeen Sea Trawling and Fishing Co Ltd [1933] AC 402 in paras 79 87. If Parliament has re enacted a statutory provision in identical words, after it has been interpreted as having a certain meaning by the courts of record, then there is, I accept, some attraction in the notion that the Parliamentary intention was that the provision should have that meaning particularly if (as here) the interpretation has been confirmed by the Court of Appeal more than once. The issue is similar to that discussed in paras 104 106 above, and I am far from convinced that the principle can be regarded as correct, at least in the absence of some additional factor in favour of maintaining the interpretation previously adopted, in light of observations in Farrell v Alexander [1977] AC 59. In that case, the unsuccessful respondent argued that a particular statutory provision (prohibiting the charging of premiums for the assignment of Rent Act tenancies) had been interpreted by the Court of Appeal in Remmington v Larkin [1921] 3 KB 404, and that, in the light of the Barras doctrine, the fact that the provision had been subsequently re enacted in much the same way more than once, the interpretation in Remmington had been effectively adopted by Parliament. 145. Lord Wilberforce thought that Remmington could be distinguished, but, after referring to Barras, he said at p 74, that he had never been attracted by the doctrine of Parliamentary endorsement of decided cases, which he described as based upon a theory of legislative formation which is possibly fictional. He added that if there are any cases in which this doctrine may be applied any case must be a clear one. Lord Dilhorne (who thought that Remmington could not be distinguished and should be overruled), while not referring expressly to Barras doctrine, said at p 81, that while it may be that the decision in Remington escaped the notice of the draftsman, our task is to give effect to the intention of Parliament which involved considering the words used by Parliament. Lord Simon of Glaisdale also thought that Remmington could not be distinguished and should be overruled, and at pp 90 91 he was critical of the Barras doctrine, saying at p 91: To pre empt a court of construction from performing independently its own constitutional duty of examining the validity of a previous interpretation, the intention of parliament to endorse the previous judicial decision would have to be expressed or clearly implied. Mere repetition of language which has been the subject of previous judicial interpretation is entirely neutral in this respector at most implies merely the truism that the language has been the subject of judicial interpretation for whatever (and it may be much or little) that is worth. Lord Edmund Davies thought that Remington had been rightly decided, but that the statutory language had since significantly altered, and he was accordingly concerned with a different doctrine, namely the assumption that in enacting consolidating legislation Parliament did not intend to change the law see at 94. Only Lord Russell (who dissented) appears at pp 101 103 to have assumed that the Barras doctrine was correct. 146. Since then, in A v Hoare [2008] UKHL 6, [2008] 1 AC 844, para 15, Lord Hoffmann followed an earlier decision of the House of Lords, Lowsley v Forbes [1999] 1 AC 329, which he explained in these terms: In that case, the Court of Appeal in 1948 (W T Lamb and Sons v Rider [1948] 2 KB 331) had given a provision of the Limitation Act 1939 an interpretation which the House thought was probably wrong. But Parliament had then enacted the Limitation Amendment Act 1980 in terms which made sense only on the basis that it was accepting the construction which had been given to the Act by the Court of Appeal. Lord Hoffmann also said that [t]he value of such previous interpretations as a guide to construction will vary with the circumstances. 147. In my opinion, in the light of the views expressed in Farrell and in A v Hoare, before this Court could invoke the Barras principle, it would almost always require something more than the mere re enactment of a previous statutory provision which has been interpreted by the Court of Appeal. Like Lord Simon, I am concerned about the constitutional propriety of this Court simply invoking what it regards as a judicial misreading of an earlier statute to justify a decision that a current statute means something other than this Court thinks it means. However, as it is not necessary to decide the point on these appeals, I would not wish to be taken to be saying that it could never be done. 148. I have even greater reservations about the so called customary meaning rule. As just mentioned, a court should not lightly decide that a statute has a meaning which is different from that which the court believes that it has. Indeed, so to decide could be said to be a breach of the fundamental duty of the court to give effect to the will of parliament as expressed in the statute. Legal certainty and settled practice, referred to by Lord Carnwath in paras 94 97 are, as I see it, an aspect of customary meaning. Although Lord Bridge expressed himself as he did in Otter v Norman [1989] AC 129, 145 6 (as quoted by Lord Carnwath in para 96), neither Barras nor Farrell was cited to him, and he relied on the fact that for many years, many landlords and tenants have regulated their relationships on [the] basis that observations in an earlier decision of the Court of Appeal were right. Even on that basis, I would wish to reserve my position as to the correctness of Lord Bridges obiter observations. 149. Turning to these appeals, there is no question of PEA 1977 having been re enacted since the decisions in Mohammed v Manek or Desnousse, and therefore the Barras principle cannot apply. Even if there is a customary meaning rule and twenty years is a long enough period to justify invoking it, I do not consider that it should apply here. One can see the force of the customary meaning rule where private individuals and companies have made dispositions or entered into agreements in the reasonable belief that the law was as laid down by the Court of Appeal as Lord Bridge said in Otter. However, it is much harder to justify invoking the rule in circumstances where a housing authority may have assumed that the law is as laid down by the Court of Appeal in connection with an arrangement which the authority was in any event required to enter into by statute. A housing authority can hardly claim to have complied with its duty to provide temporary accommodation under section 188 of the 1996 Act, only because it believed that the occupier of the accommodation could not invoke sections 3 or 5 of PEA 1977. I do not suggest that no housing authority could identify any action that it had (or had not) taken in the belief that PEA 1977 did not apply to licences such as those granted to the appellants in these cases, but I do not believe that any such action (or inaction) would be such as to justify invoking the customary meaning rule. Conclusion 150. For these reasons, despite the clear and impressive reasoning in his judgment, I have reached a different conclusion from Lord Hodge. 151. To many people this may appear an unattractive result, as it does not seem obviously sensible for homeless individuals, who are temporarily housed on an interim basis, while the housing authority makes enquiries as to what rights if any they may have, to be afforded protection under PEA 1977. Such a conclusion would inevitably increase the pressure on already hard pressed housing authorities, many of whom are faced with a demand for residential accommodation which substantially exceeds the supply, which places a great administrative burden on them. However, the consequences of my view as to the effect of PEA 1977 would, I suspect, be more of an exacerbating nuisance rather than a far reaching disaster. And, while I see the good sense of PEA 1977 not applying to licensees such as the appellants in these appeals, it does not seem to me obvious that they should not be able to benefit from PEA 1977. 152. Even if that is wrong, having interpreted PEA 1977, and noted Parliaments exercise of its power to identify which short term, precarious and charitable rights of occupation should be excluded from protection, I consider that the correct, if to some people a rather unpalatable, conclusion is that individuals such as the appellants in these appeals are entitled to the benefit of sections 3 and 5 of the Protection from Eviction Act 1977. 153. The contrary view is to some extent based upon policy considerations. I accept that, when considering the proper interpretation of a statute, a court can, and where appropriate should, take into account policy considerations, and I sympathise with the view that policy considerations favour dismissing these appeals, as I have indicated in para 151 above. However, judges have to be very careful before adopting an interpretation of a statute based on policy considerations, and should only to do so where those considerations point clearly in one direction. In this case, it seems to me to be particularly difficult to justify dismissing the appeal on policy grounds, given that (i) it involves departing from the natural meaning of the relevant statutory words, (ii) the policy argument is not overwhelming, (iii) there are policy considerations pointing the other way, and (iv) Parliament has apparently considered the policy in section 3A. 154. Furthermore, when it comes to relying on policy in a case of statutory interpretation, I would respectfully refer to the observations of Lord Simon and Lord Diplock in Maunsell v Olins [1975] AC 373, 393 which, although in a dissenting judgment (as might be appreciated from the way in which they are expressed), were cited with apparent approval (see at p 388) by Lord Bingham in Spath Holme at p 385: For a court of construction to constrain statutory language which has a primary natural meaning appropriate to its context so as to give it an artificial meaning which is appropriate only to remedy the mischief which is conceived to have occasioned the statutory provision is to proceed unsupported by principle, inconsonant with authority and oblivious of the actual practice of parliamentary draftsmen. 155. As to the second issue discussed by Lord Hodge in paras 61 71 of his judgment, it would not, on my view on the first issue, arise. However, on the basis of the view reached by the majority of the Court on the first issue, the second issue does arise. On that basis, I agree with Lord Hodges reasoning and conclusion on the second issue. 156. For my part, therefore, for the above reasons and for those much more economically expressed by Lady Hale, I would have allowed these appeals on the first issue, the appellants reliance on the Protection from Eviction Act 1977, but I would dismiss these appeals on the second issue, namely their reliance on article 8 of the European Convention on Human Rights. LADY HALE 157. The issue in this case is the meaning of the words licensed as a dwelling house in section 3(1) of the Protection from Eviction Act 1977, when read with section 3(2B) of that Act, which provided for the inclusion of licences in the protection given by that section (the relevant provisions are helpfully set out in the judgment of Lord Hodge at para 17). It is agreed that those words refer to the purpose for which the premises in question were licensed to the licensee and not to the purpose for which she actually occupied them (see the judgment of Lord Hodge at para 23). In these cases, however, it is difficult to see a distinction between the two: JN and FI and their children used these premises for the purpose for which they were licensed to occupy them. The question is what that purpose was. 158. There can be little doubt that the premises in each case constituted a dwelling house. As it happens, both were self contained premises, not shared with others when they were licensed. The courts have always taken a broad view of what constitutes a dwelling house. It has long been held that a room without bathroom facilities may be a dwelling house let as a separate dwelling for the purpose of section 1 of the Housing Act 1988 and its predecessors. In Uratemp Ventures v Collins [2001] UKHL 43, [2002] 1 AC 301, the House of Lords held that a room in an hotel where cooking was forbidden nevertheless constituted a dwelling house let as a separate dwelling for the same purpose. There is no requirement in section 3 of the 1977 Act that the premises be let or licensed as a separate dwelling. 159. When a dwelling house is let or licensed to an individual to occupy, albeit for what may turn out to be for a very short time, considerable work has to be done in order to conclude that the purpose of the letting or licence is not to use the premises as a dwelling. Counsel for the local authorities in question, and for the Secretary of State, have put in considerable work in order to persuade us that the words must be read in the light of the construction given to similar (but not identical) wording in other provisions in the Rent Acts. For the reasons given by Lord Neuberger, which I need not repeat, I do not find any of that work persuasive, let alone convincing. I share his view that dwelling is at least as wide as residing and thus must respectfully disagree with the view expressed by Lord Millett (but not by the other members of the appellate committee) in Uratemp that The words dwell and dwelling suggest a greater degree of settled occupation than reside and residing. That is, at it seems to me, to confuse two rather different meanings of the verb to dwell. I dwell on a subject when I fix my attention, write or speak on it length (as we sometimes have to do in our judgments). I dwell in a place when I live there. In my view, residing and dwelling and living somewhere generally mean the same thing, although all may be distinguished from staying. 160. Unlike holiday makers, it is hard to describe these families as simply staying in their accommodation. If, as the House of Lords held in Mohamed v Hammersmith and Fulham LBC [2001] UKHL 57, [2002] AC 547, a person can be normally resident in accommodation provided under section 188 of the 1996 Act, because he lives there for the time being and has nowhere else to go, I find it hard to see how he is not also provided with that accommodation as a dwelling. As Lord Neuberger demonstrates, a person can dwell, reside or live in premises where his occupation is not only temporary but precarious in the extreme. The purpose of the 1977 Act was not to provide security of tenure: that was done in other ways. The purpose was to prevent landlords resorting to such self help as is lawful to rid themselves of tenants (and now licensees) who would not leave voluntarily. 161. Nor, with respect, do I find persuasive any of the three matters relied upon by Lord Hodge in reaching a contrary conclusion. He points, first, to the statutory context of the licence, as a purely temporary measure while the local authority pursue their statutory inquiries. We are, of course, construing section 3 of the 1977 Act and not Part 7 of the 1996 Act. That statutory context cannot, of course, have been in the contemplation of the legislature when the provisions with which we are concerned were first enacted. The Protection from Eviction Act 1977 and the Housing (Homeless Persons) Act 1977 received the Royal Assent on the same day. But the Protection from Eviction Act was a pure consolidation Act, bringing together provisions which had first been enacted, in the case of the requirement of four weeks notice to quit in section 5 of the 1977 Act, in section 16 of the Rent Act 1957, and in the case of section 3 of the 1977 Act with which we are principally concerned, in Part III of the Rent Act 1965. At that time, such duty as there was to provide temporary accommodation for people in urgent need of it was contained in section 21(1)(b) of the National Assistance Act 1948. There was nothing to prevent a local authority separating homeless families by receiving the children into care and leaving the adults to fend for themselves. The Housing (Homeless Persons) Act 1977 was intended to bring in a new regime in which specific and carefully modulated duties were owed to particular classes of homeless persons. 162. People in temporary accommodation are still treated as homeless for the purpose of what is now Part 7 of the 1996 Act while the local authorities enquiries are persisting. (This is despite the fact that they have an express licence to occupy the accommodation with which they are provided, and so would fall outside the definition of homeless in section 175 of the Act unless that definition is directed to the time when they present themselves to the local authority.) That does not mean that they do not live in the accommodation provided for the time being or that they are not provided with that accommodation for that purpose. 163. Many (indeed one suspects the great majority) of those provided with temporary accommodation under Part 7 of the 1996 Act are in receipt of housing benefit. The whole system of funding local authorities duties under the 1996 Act would fall apart if housing benefit were not available to those who cannot afford to pay for the (often expensive) temporary accommodation arranged for them. Section 130 of the Social Security Contributions and Benefits Act 1992 provides that a person is entitled to housing benefit if he is liable to make payments in respect of a dwelling which he occupies as his home. If the temporary and transient nature of his occupation is not sufficient to prevent the dwelling being his home for this purpose, I find it very difficult indeed to see how that same temporary and transient nature is sufficient to prevent the licence under which he is permitted to occupy the dwelling also being for the purpose of his occupying it as his home, that is, dwelling or residing or living rather than merely staying there. 164. Secondly, Lord Hodge relies upon the terms of the licences in question. But these cannot take something which would otherwise fall within the statutory protection outside it. Calling a tenancy a licence does not make it a licence if in fact it is a tenancy: Street v Mountford [1985] AC 809. Reserving the right to change the accommodation provided at little or no notice does not prevent the accommodation being provided as a home if that is what it is. Otherwise, as Lord Neuberger points out, it would have been extremely easy for unscrupulous landlords to avoid the effect of the 1977 Act and its predecessor. 165. In this context, I am puzzled by what appears to be the generally accepted view that the protection of section 3 of the 1977 Act will apply once the local authority have accepted that they owe the family the full housing duty in section 193(2) of the 1996 Act. But the existence of that full housing duty is a quite separate matter from the terms on which the family occupy their accommodation. They may well remain in exactly the same accommodation on exactly the same contractual terms thereafter. There may well be no new letting or no new licensing for some time. Their occupation of those particular premises is just as precarious as before. The full housing duty will come to an end if they refuse an offer of suitable accommodation elsewhere. So can it be said that the purpose for which the premises were let or licensed has changed just because the nature of the local authoritys duty has changed? Even if that could be said, the contractual terms of the tenancy or licence cannot be determinative of its purpose. 166. Thirdly, Lord Hodge relies upon the unfortunate practical consequences if section 3 is held to apply to temporary accommodation provided under Part 7 of the 1996 Act. Counsel before us disagreed about how real the problems would in fact be; but we can, I think, take it for granted that it would indeed make life more difficult for hard pressed housing authorities who are having to cope with increasing numbers of homeless persons and diminishing resources with which to do so. However, as Lord Hodge himself acknowledges, this would not by itself be determinative. The answer to the practical problems is a properly tailored legislative exception, as has already been provided for some other situations in section 3A of the 1977 Act. 167. I fear that I am also unimpressed by the argument that we should not disturb what has been understood to be the law since the decision of the Court of Appeal in Mohammed v Manek and Kensington and Chelsea LBC (1995) 27 HLR 439, followed in Desnousse v Newham LBC [2006] QB 831. There is no question of Parliament having passed legislation on the basis that the law as stated by the Court of Appeal is correct. The 1977 Act has not been repealed and re enacted so as to invoke the principle in Barras v Aberdeen Sea Trawling Co Ltd [1933] AC 402. The most that can be said is that Parliament might have amended the 1977 Act so as to reverse or modify the Court of Appeals decision, if it did not like it, but has not done so. That comes nowhere near an expression of Parliamentary approval of it. Parliament can always legislate to change a decision of the higher courts should it wish to do so, but no conclusions can be drawn from the fact that it has not. There must be many, many decisions which the Parliament of the day finds surprising, inconvenient or downright wrong, but has done nothing to correct. The reasons for inaction may range from ignorance, indifference, lack of Parliamentary time or Whitehall resources, to actual approval. Moreover, Parliaments failure to act tells us nothing about what Parliament intended when the legislation was passed, which is what this court must decide. Parliament must, like everyone else, be taken to understand that a Court of Appeal decision may always be overturned on appeal to this court. (Of course, there are occasions when Parliament has specifically legislated on the basis that a Court of Appeal decision is correct, but the higher court has still been prepared to hold that it was incorrect: see Bakewell Management Ltd v Brandwood [2004] UKHL 14, [2004] 2 AC 519.) 168. I also share Lord Neubergers reservations about the so called customary meaning rule. In In re Spectrum Plus [2005] UKHL 41, [2005] 2 AC 680, the House of Lords was not deterred from over ruling a decision of a highly respected High Court judge as to the effect of the wording of a particular debenture in common use, despite the fact that his decision had stood and been relied upon by the banks for many years. The banks, like anyone else, must be taken to know that the decisions of the lower courts are liable to be over turned on appeal, even years after the event, if they are wrong. They cannot be regarded as definitely settling the law or have, as Lord Nicholls put it, lulled the banks into a false sense of security (para 43). In this case, there can be no question of the local authorities relying upon the Court of Appeals decisions. Their duties towards the homeless remain the same, whether or not the 1977 Act applies to the accommodation arrangements they make. They still have to go on fulfilling those duties. Unlike the banks in In re Spectrum Plus, there is nothing they can do about it, and they have not been lulled into a false sense of security. 169. In agreement with Lord Neuberger therefore, to whose judgment this is merely a footnote, I would therefore allow these appeals on the first issue. That being the case the second issue does not, in my view, arise. Mr Arden did not argue that a dwelling encompassed any residential accommodation provided for occupation, regardless how short was the intended period of occupation. He accepted that an overnight stay in a hotel or hostel would not amount to dwelling in that accommodation. Beyond that he submitted that it was a question of fact in each case. The respondent local authorities submitted, by reference to cases that I consider in paras 37 44 below, that premises must be occupied as a settled home and that lettings for a limited and temporary purpose involving transient occupation did not enjoy the protection of the Rent Acts in the past or of PEA 1977. They also pointed out that breach of section 3(1) of PEA was a criminal offence and submitted that there was a need for certainty as to its scope. I do not find either view wholly persuasive. The former makes insufficient allowance for a degree of settled occupation, the establishment of a home, as a component of dwelling. It also fails to recognise the extent to which the courts in several of the cases which I consider below have included as a component of their interpretation of the word dwelling their understanding of the relevant statutory policy; see in particular the cases in para 37 below. The latter view draws on case law which points to a statutory intention in the Rent Acts, and by extension in PEA 1977, to protect a persons home but not accommodation provided or occupied as a temporary expedient. There is force in the respondents interpretation (see para 45 below) but it risks setting up a generalised proposition that goes beyond that which the case law supports. In my view, in construing words that may have refined distinctions of meaning it is important to have regard to the statutory policy of PEA 1977. In applying the statutory words to a specific contract, the legal and factual context of the contract is particularly important.

Local housing authorities have statutory obligations under Part VII of the Housing Act 1996 (the 1996 Act) to provide assistance to people who are homeless in certain circumstances. When an application for such assistance is received, the authority will carry out investigations under s.184 of the 1996 Act to ascertain whether the applicant qualifies for local authority housing. Under s.188 of the 1996 Act, the authority must provide the applicant with interim accommodation (s.188 accommodation) during the time it takes to carry out these investigations [1]. The two appellants in this case were children of families provided with s.188 accommodation while their housing applications were considered. CNs mother JN was granted a licence to occupy a privately owned property by the London Borough of Lewisham (Lewisham) in November 2011 [2]. From November 2012, ZH and his mother FI occupied s.188 accommodation, in the form of a flat owned by a private company, under a licence granted by the London Borough of Newham (Newham) [6]. Both JN and FIs substantive housing applications were refused, at which point the obligation on Lewisham and Newham (the authorities) to provide s.188 accommodation ended and JN and FI were told to vacate the properties; JN in May 2012 [5] and FI in March 2013 [6]. CN and ZH commenced separate judicial review proceedings challenging these evictions [9]. They argued that even after the s.188 duty ceased, the authorities could not lawfully evict them from their s.188 accommodation without first giving notice and obtaining a court order. They relied on ss.3(1) and 3(2B) of the Protection from Eviction Act 1977 (PEA) which together provide that in relation to any premises occupied as a dwelling under a licence, other than an excluded licence, where the licence has come to an end but the occupier continues to reside in the premises it shall not be lawful for the owner to enforce against the occupier, otherwise than by proceedings in the court, his right to recover possession of the premises. Section 5(1A) PEA further provides that no less than four weeks written notice must be given to end a periodic licence to occupy premises as a dwelling, other than an excluded licence [19]. The excluded licences not protected by ss.3 and 5 are listed at s.3A PEA; the list does not include s.188 accommodation [18]. The two judicial review claims were given permission in the High Court and transferred to the Court of Appeal, where they were heard together [8]. On 11 July 2013 the Court of Appeal dismissed the claims [9]. The Supreme Court dismisses the appeal by a majority of five to two. It holds that Newham and Lewisham are entitled to evict the appellants from s.188 accommodation without first obtaining a court order. Lord Hodge (with whom Lord Wilson, Lord Clarke and Lord Toulson agree) gives the main judgment. Lord Carnwath gives a concurring judgment. Lord Neuberger and Lady Hale give dissenting judgments. Is s.188 accommodation occupied as a dwelling under a licence for the purposes of ss.3 and 5 PEA? Lord Hodge holds that the word dwelling does not have a technical meaning but suggests a greater degree of settled occupation than residence and can be equated with ones home [45]. It bears the same meaning in PEA as in predecessor legislation (the Rent Acts) [26]. On an assessment of the legal and factual context, a licence to occupy s.188 accommodation is not granted for the purpose of using the premises as a dwelling. First, the statutory context is inconsistent with such a purpose; s.188 imposes a low threshold duty on a local housing authority to provide interim accommodation (not a home or fixed abode) for a short and determinate period only [33]. Secondly, such a licence is granted on a day to day basis allowing the authority to transfer the applicant to alternative accommodation at short notice [34]. Thirdly, (although this is not of itself determinative) to hold otherwise would hamper the operation of the 1996 Act by introducing delays for court proceedings to effect evictions from accommodation needed for other homeless applicants [35]. Further, the absence of an express exclusion in s.3A PEA for s.188 accommodation does not mean that such accommodation falls within s.3 PEA [49]. Parliament sought confirm excluded tenancies and licences for the avoidance of doubt but did not intend to thereby extend protection to accommodation that would not have classified as a dwelling under the Rent Acts [47]. Lord Carnwath adds that settled practice may, in appropriate circumstances, be an aid to statutory interpretation [95]; were the issues more finely balanced, the fact that the Court of Appeals statutory interpretation in Mohammed v Manek (1995) 27 HLR 439 has been adopted in departmental guidance would be an additional reason to dismiss the appeal [98]. In dissenting judgments, Lord Neuberger [128] and Lady Hale [158] hold that in the context of PEA 1977 dwelling has at least as broad a meaning as residence. Lord Neuberger considers that Sections 3 and 5 PEA should be accorded a wide rather than a narrow effect as they reflect a policy that people who have been lawfully living in premises should not be summarily evicted [135]. Premises may be occupied as a dwelling notwithstanding said occupation is short term, provisional or precarious [136]. This interpretation is supported by the absence of a specific exclusion in s.3A PEA [139]. Does Article 8 ECHR require the authorities to obtain court orders before carrying out evictions? The parties were in agreement that the appellants Article 8 rights were engaged [60]. Lord Hodge (with whom Lord Neuberger, Lord Wilson, Lord Clarke, Lord Carnwath and Lord Toulson agree) holds that the interference with the appellants Article 8 rights was objectively justified. The termination of an unsuccessful applicants licence to occupy s.188 accommodation is in accordance with the law and pursues the legitimate aim of inter alia accommodating other homeless applicants [67]. Recovery of possession is proportionate to that aim because in the context of limited resources there can generally be no justification for preferring those whose claims have been investigated and rejected [68]. The procedural safeguards contained in the 1996 Act, the Children Act 1989, and by way of judicial review, together afford fair procedure such as to comply with the requirements of Article 8 [64]; there is no need to impose the additional hurdle of obtaining a court order [68]. (As Lady Hale finds for the appellants as a matter of statutory interpretation, in her judgment the Article 8 issue does not arise [168].)

The appellant, Kevin Maguire, was a defendant in criminal proceedings in the Crown Court in Belfast. By the issue of a legal aid certificate dated 7 June 2012, he became entitled to public funding to instruct a solicitor and two counsel to appear on his behalf in those proceedings. The certificate was issued under article 29(2) of the Legal Aid, Advice and Assistance (Northern Ireland) Order 1981 (the 1981 Order). The appellants first trial, before a judge sitting with a jury, began on 28 November 2012 at Belfast Crown Court. He was represented by Mark Barlow of counsel (described in these proceedings as leading junior counsel) and Clive Neville, a solicitor advocate who is a member of the firm of Trevor Smyth & Co, solicitors. They received instructions to appear for Mr Maguire from Chris Mitchell who is a solicitor in the same firm as Mr Neville, Trevor Smyth & Co The jury in the first trial were unable to reach a verdict and they were discharged. The appellant was tried again. That re trial was originally scheduled to begin on 13 November 2013. Mr Maguire again wished to have Mr Barlow as his leading counsel. In the meantime, however, Mr Barlow had appeared before a summary panel of the Bar Council, convened by the professional conduct committee of the council in relation to two other cases in which he had appeared as leading counsel. In both cases a solicitor advocate had acted as Mr Barlows junior. Mr Barlow is not Queens Counsel. He was called to the Bar of England and Wales in 1992 and to the Bar of Northern Ireland in 2006. He is junior counsel in both jurisdictions. His appearance before the committee, therefore, was to answer charges that he had been in breach of rule 20.11 of the code of conduct for the Bar of Northern Ireland. At the material time this rule stated that: In criminal cases where legal aid has been granted for two barristers one should be a senior counsel. Where, exceptionally, a senior counsel is unavailable, it is permissible for a junior to lead. This junior should be experienced and be of not less than 15 years standing. After some discussion before the summary panel as to the extent of the exceptionality provided for by this rule, Mr Barlow admitted that he had been in breach of it. In neither of the two cases had it been established that senior counsel was not available. Following this, Mr Barlow informed the appellant that he could not act as his leading counsel. The appellant, and subsequently his current solicitors, engaged in correspondence with the Bar of Northern Ireland about this. The solicitors asserted that if Mr Barlow was not permitted to appear as the appellants leading counsel, this would constitute a violation of Mr Maguires rights under article 6 of the European Convention on Human Rights and Fundamental Freedoms (ECHR). The respondent rejected this claim. Mr Maguires retrial duly proceeded in January 2015. He was acquitted of seven of the 11 counts on which he had been charged. The jury failed to reach a verdict on the remaining four counts. The prosecution has indicated that it is not intended that the appellant be required to stand trial again on those counts. The judicial review application The appellant applied for leave to issue judicial review proceedings on 9 June 2014. He claimed that the Bar Councils decision to impede his choice of lead advocate violated his rights under article 6.3(c) of ECHR. He asserted that his right to choose counsel was limited only by the interests of justice test articulated in that provision. Leave to apply for judicial review was granted on 6 October 2014. Following a hearing before a Divisional Court (Sir Declan Morgan LCJ, Coghlin and Gillen LJJ), judgment was delivered on 19 January 2015, dismissing the appeal (Neutral Citation No [2015] NIQB 4). All three members of the Divisional Court gave judgments. Morgan LCJ considered that the right to choose ones counsel; was a qualified right para 36; the defendants wish to have particular legal assistance may be overridden where there are sufficient grounds for concluding that this is necessary in the interests of justice. Coghlin LJ considered that rule 20.11 of the code of conduct was fair and proportionate, designed as it was to provide a basic generic safeguard for a defendant, victims and the general public. That safeguard ensured that in cases involving a charge of murder or where there were exceptional difficulties, legal representation should comprise senior and junior counsel. The overall purpose of the code of conduct was to guarantee that the lay client was represented by the most able and experienced counsel available para 5. No breach of article 6.3 had occurred para 12. Gillen LJ held that the code of conduct accorded with the triangulation of interests those of the accused, those of the victim and his or her family and the interests of the public identified by Lord Steyn in Attorney Generals reference (No 3 of 1999) [2001] 2 AC 91, 118. There was therefore no violation of article 6.3(c) para 23. The statutory regime Article 29(1) of the 1981 Order provides that any person returned for trial on certain indictable offences, as specified in the sub article, is entitled to free legal aid in the preparation and conduct of his defence at the trial. For that purpose, he has solicitor and counsel assigned to him according to rules made under article 36, if a criminal aid certificate is granted in accordance with the succeeding provisions of article 29. The relevant rules are the Criminal Aid Certificates Rules (Northern Ireland) 2012 (the 2012 Rules). Rule 4(1) of these provides for the assigning of a solicitor and rule 4(5) makes provision about counsel as follows: A criminal aid certificate granted under article 29 of the Order (a) includes representation by one counsel; and (b) may include representation by two counsel only in the cases specified and in the manner provided for by the following provisions of this rule. Rule 4(6) provides that where the charge is one of murder, or the case presents exceptional difficulties, the certifying authority may certify that in its opinion the interests of justice require that the assisted person shall have the assistance of two counsel. (The certifying authority in this context is a court article 29(2) of the 1981 Order. In this case, the certificate for two counsel was issued by a district judge.) Exceptionality for the purposes of rule 4(6) is defined in rule 4(7) as where the case for or against the assisted person involves substantial novel or complex issues of law or fact, such that it could not be adequately presented by one counsel. Rule 4(11) provides: Without prejudice to paragraphs (6) and (7), where a judge of the court before which the assisted person is to be tried is of the opinion that in the interests of justice a criminal aid certificate in respect of two counsel must be granted in order to protect the assisted persons rights under the Human Rights Act 1998, the judge shall grant such a certificate. The grant of a certificate is therefore mandatory where required for the protection of an accused persons Convention rights and discretionary where the offence is murder or one which comes within the exceptional category. Where, on either account, a certificate under rule 4(5)(b) for two counsel is granted, rule 4(3) becomes relevant: Any member of the Bar who is practising in Northern Ireland and is willing to appear as counsel for legally aided persons in criminal cases may be instructed, on behalf of the assisted person, by the solicitor assigned under paragraph (1), and, in any case in which the certifying authority has granted a certificate as provided for under paragraph (5)(b), one such member of the Bar and a member of the Bar, being one of Her Majestys Counsel who is practising in Northern Ireland or a senior counsel practising outside of Northern Ireland, may be so instructed. The Legal Aid for Crown Court Proceedings (Costs) Rules (Northern Ireland) 2005 (the 2005 Rules) made provision for the payment of costs in legally aided proceedings in the Crown Court. The 2005 Rules were amended by the Legal Aid for Crown Court Proceedings (Costs) (Amendment) Rules (Northern Ireland) 2011 (the 2011 Rules). Rule 2 of the 2005 Rules, as amended by rule 6 of the 2011 Rules, provides that counsel means counsel assigned under a criminal aid certificate granted under article 29 of the [1981] Order, or counsel who undertook the defence of a person at the request of the judge under article 36(2) of the Order. Rule 4A of the 2005 Rules deals with the payment of enhanced costs where a solicitor conducts a trial or hearing in the Crown Court. Paragraphs 1 and 4 are the relevant provisions. They provide: (1) Where a solicitor exercising his right of audience under section 50 of the Judicature (Northern Ireland) Act 1978 conducts a trial or hearing without counsel he shall be entitled to an enhancement of his costs in accordance with this rule. (4) This rule also applies where a criminal aid certificate was granted for two counsel and a solicitor conducts the trial or hearing with or without a second counsel. In the course of the appeal before this court, a question arose concerning the use of the term solicitor advocate in the relevant legislation and rules. In written submissions made by the respondent after the hearing, the following information and explanations were provided. There is no reference to the term in the 1981 Order. Rule 2 of the 2005 Rules (as made) provided that the term advocate included a solicitor exercising a right of audience under section 50 of the Judicature (Northern Ireland) Act 1978 (the 1978 Act) (which gave a general right of audience to solicitors to conduct proceedings in the Crown Court, whether or not he has been certified by the Law Society as an advanced advocate). The term solicitor advocate appeared several times in the 2005 Rules, as they were originally made. The term also appeared in the Legal Aid for Crown Court Proceedings (Costs) (Amendment) Rules (Northern Ireland) 2009 (the 2009 Rules), within a rates for payment table inserted in the 2005 Rules by rule 17 of the 2009 Rules. The 2011 Rules amended the 2005 Rules by substituting counsel for advocate where that term had appeared in the latter rules. It also provided for the omission of the definition of advocate which had been contained in rule 2 of the 2005 Rules. The 2011 Rules also provided that Schedule 1 to the 2005 Rules be amended and that Schedule 2 should be removed. The upshot of all this is that no reference to solicitor advocate remains within the 2005 Rules. The relevant terms are simply counsel or solicitor. As regards the present appeal, therefore, this means that Mr Neville, when appearing for the appellant in the Crown Court, fell to be paid by the legal aid authorities as a solicitor and in no other capacity. A solicitor has rights of audience under section 50 of the 1978 Act but is not included in the expression counsel for the purpose of calculating payment of legal aid, nor for the purpose of the two counsel provision in rule 4(3) of the 2012 Rules. Article 6 of ECHR Article 6.1 of ECHR provides: In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law The context for the more explicit rights contained in the succeeding paragraphs of article 6 is set by this overarching provision. The emphasis is on the need for fairness. Trial by an independent and impartial tribunal is obviously vital to the achievement of the goal of fairness. Likewise, the presumption of innocence provided for in para 6.2 and the requirements stipulated in article 6.3(a) that everyone charged with a criminal offence must be informed promptly and in detail of the nature and cause of the accusation against him. So too, the obligation in article 6.3(b) that a person charged with a criminal offence must have adequate time and facilities for the preparation of his defence and the requirement in article 6.3(d) that an accused person be permitted to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him. These requirements, together with that contained in article 6.3(e) to the effect that, if necessary, the accused person should have the free assistance of an interpreter, were obviously conceived as what is described in the prefatory words of article 6.3 as minimum rights to be essential safeguards for a fair trial. It is against that background that the provision which is critical in this appeal, article 6.3(c) of ECHR, falls to be considered. It provides that every person charged with a criminal offence shall have the right to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require. Sensibly, Mr ONeill QC for the appellant accepts that this does not confer an absolute right on an accused person to insist upon public funding of the services of a lawyer of his choice to defend him. He argues, however, that the right is one which, in common with other qualified rights under the Convention, should only be interfered with in circumstances which can be shown to be justified. Thus, argues Mr ONeill, the appellant is entitled to demand that he be defended by Mr Barlow and Mr Neville, unless it can be shown by the public authority that would seek to refuse that demand, that their refusal was justified. The appellants case is therefore cast as entitlement to a right to choose not only his lawyers but also that they be paid at public expense unless there is a proportionate justification for denying him that entitlement. Moreover, his claim extends to being entitled to allocate the role to be played by Mr Barlow as soi disant leading counsel in his trial. For respondent, Mr Scoffield QC contends the justification/proportionality analysis is inapt. This is not a case, he argues, where an admitted interference with a qualified Convention right calls for justification. Rather, he says, it is one where the rules governing representation of the appellant at his criminal trial (specifically that which requires that, in other than exceptional circumstances, he be represented by senior and junior counsel) be examined in order to ascertain whether they infringe his right to a fair trial. Thus, it is not a case of the appellant having entitlement to the full panoply of the particular type of representation that he wishes to have and that this entitlement can only be denied where justification for interference with it can be shown. The appellants claim fails, Mr Scoffield argues, at the anterior stage of the inquiry, viz whether there is anything that the about the rule embodied in rule 20.11 of the code of conduct which impinges on Mr Maguires right to a fair trial. In order to decide which of these fundamentally different approaches to the application of article 6.3(c) should prevail, it is necessary to examine the jurisprudence of the European Court of Human Rights (ECtHR). The case law of ECtHR In Correia de Matos v Portugal (Application No 48188/99) the applicant had been committed for trial in Portugal for insulting a judge. The judge investigating that charge assigned a lawyer to represent him. Mr de Matos objected. He wanted to represent himself. He relied on article 6.3(c) of the Convention. He appealed against the order of committal. His appeal was declared inadmissible because it had not been lodged by a lawyer and because he was forbidden to defend himself in person. An appeal to the Constitutional Court was dismissed for the same reason. The Strasbourg court observed that the European Commission on Human Rights (ECmHR) had ruled on a number of occasions that article 6.3(c) did not invest an accused person with the right to decide how the fair trial of the charge against him should be secured. In particular, in X v Norway (decision of 30 May 1975, DR 3, p 43) ECmHR had held that although this provision guarantees that proceedings against the accused will not take place without adequate representation for the defence, it does not give the accused the right to decide himself in what manner his defence should be assured. The decision as to whether the applicant will defend himself in person or be represented by a lawyer of his own choosing, or in certain circumstances one appointed by the court, depends upon the applicable legislation or rules of court. The court in Correia de Matos saw no reason to depart from previous case law. It said: in this area it is essential for applicants to be in a position to present their defence appropriately in accordance with the requirements of a fair trial. However, the decision to allow an accused to defend himself or herself in person or to assign him or her a lawyer does still fall within the margin of appreciation of the Contracting States, which are better placed than the Court to choose the appropriate means by which to enable their judicial system to guarantee the rights of the defence. It should be stressed that the reasons relied on for requiring compulsory representation by a lawyer for certain stages of the proceedings are, in the Courts view, sufficient and relevant. It is, in particular, a measure in the interests of the accused designed to ensure the proper defence of his interests. The domestic courts are therefore entitled to consider that the interests of justice require the compulsory appointment of a lawyer. (emphasis supplied) The importance of this decision and the jurisprudence of ECmHR on which it draws lies in the recognition that the test is what the interests of justice require to ensure that an accused person is properly defended, rather than simply what his own particular wishes may be as to the manner of his defence. This points to the need for a wider consideration of the need for fairness of the trial procedure rather than on an emphasis on the predilections of the accused person as to the choice of counsel. This theme can be detected in the case of K v Denmark (Application No 19524/92, 5 May 1993), again a decision of ECmHR. In that case a lawyer, Mr Reindel, was appointed by the High Court to act as defence counsel for the applicant. It was then discovered that Mr Reindel was to be called as a witness and his appointment was rescinded and another lawyer was appointed in his stead. At para 2 ECmHR said this in relation to article 6.3(c): The Commission recalls that the right to legal representation of ones own choosing ensured by this provision is not of an absolute nature (cf for example No 5923/72, Dec 30.5.75, DR 3, p 43) and it does not guarantee the right to choose an official defence counsel who is appointed by the court (cf No 6946/75, Dec 6.7.76, DR 6, p 114). In examining this question under article 6 para 3(c) (article 6 3 c) of the Convention the Commission must take account of the situation of the defence as a whole rather than the position of the accused taken in isolation, having regard in particular to the principle of equality of arms as included in the concept of a fair hearing. Thus article 6 para 3(c) (article 6 3 c) of the Convention guarantees that the proceedings against the accused shall not take place without adequate representation for the defence, but does not give the accused the right to decide himself in what manner his defence should be assured (cf for example No 8295/78, Dec 9.10.78, DR 15 p 242). (emphasis supplied) Here again the emphasis was on the adequacy of the representation rather than on the freedom of choice of the accused person as to the identity of counsel by whom he should be represented. This is because the gravamen of the right guaranteed by article 6.3(c) lies in its conducing to a fair trial, rather than its championing of the freedom of the individual defendant to choose the lawyer by whom he should be represented. The article 6.3(c) right can thus be contrasted with, for instance, the rights under article 8 of ECHR which can be characterised as intensely personal and intimately connected to the wishes of the individual on whose behalf they are asserted. In Mayzit v Russia (2006) 43 EHRR 38 the applicant wished to be represented by his mother and sister. His request that they be permitted to appear for him was refused on the basis that the case required special legal knowledge and professional experience. At paras 65 and 66 the court said: 65. Article 6(3)(c) guarantees that proceedings against the accused will not take place without an adequate representation for the defence, but does not give the accused the right to decide himself in what manner his defence should be assured. The decision as to which of the two alternatives mentioned in the provision should be chosen, namely the applicants right to defend himself in person or to be represented by a lawyer of his own choosing, or in certain circumstances one appointed by the court, depends upon the applicable legislation or rules of court. 66. Notwithstanding the importance of a relationship of confidence between lawyer and client, the right to choose ones own Counsel cannot be considered to be absolute. It is necessarily subject to certain limitations where free legal aid is concerned, and also where it is for the courts to decide whether the interests of justice require that the accused be defended by Counsel appointed by them. When appointing defence Counsel, the national courts must certainly have regard to the defendants wishes. However, they can override those wishes when there are relevant and sufficient grounds for holding that this is necessary in the interests of justice. The most significant observation in these passages is that the accused person does not have the right to decide in what manner his defence should be assured. The right is to be represented by sufficiently experienced counsel of ones choice but the role to be played by that counsel cannot be dictated by the defendant. Thus, in the present case, Mr Maguire was entitled to ask that Mr Barlow represent him but he was not entitled to insist upon the status that should be conferred on Mr Barlow in his conduct of the defence. Dzankovic v Germany (Application No 6190/09, 8 December 2009) was an admissibility decision. The applicant complained that his request for his chosen representative to be designated official defence counsel had been refused. The court held that the interests of justice did not require that the applicants chosen counsel be appointed official defence counsel. The application was declared inadmissible. The applicant was still represented by the same counsel whom he wished to have designated as official defence counsel. The reason behind the request related to the payment of counsels fees from public resources. But that made no difference. What was important was, in the words of the judgment, that he had not put forward any grounds making a different procedural approach necessary to ensure [that his] rights of defence were secured. Likewise, in the present case, the appellant has not advanced any grounds that Mr Barlow should be designated leading counsel so as to ensure that his rights of defence would be assured. As the respondent has pointed out, Mr Barlow could continue to act for Mr Maguire but as junior counsel, either with senior counsel, or, if senior counsel was not available, alone. Mr Maguire was not deprived of the services of Mr Barlow by operation of rule 20.11 of the code of conduct. The deprivation, if there was one, was the denial of an enhanced payment to Mr Barlow acting as leading counsel. There are four applicable designations of counsel for the purposes of determining rates of payment in accordance with the 2005 Rules. These rates of payment relate to the categories of Queens Counsel; leading junior counsel; sole junior counsel; and led junior counsel. All permutations of cases where two counsel have been assigned and permissible under the code of conduct are provided for in terms of legal aid payment. The provision of potential rates of payment for a leading junior counsel is, the respondent accepts, appropriate, since junior counsel may lead in the exceptional circumstances described in rule 20.11 of the code of conduct. It is notable, however, that the designation of leading junior counsel appears in the relevant statutory framework only for the purposes of identifying an appropriate rate of payment in costs rules. If Mr Barlow had been able to act as leading junior counsel, therefore, he would have been entitled to an enhanced fee. But this has nothing whatever to do with the issue of a guarantee of a fair trial for Mr Maguire. The wishes of a defendant as to his choice of counsel must be taken into account but these are properly subordinate to the overall aim of achieving a fair trial. Thus, it is not a question of the defendant enjoying a right to choose his own counsel which is freestanding of the fair trial goal. Rather it is as an element of the objective of a fair trial that the right to have counsel of ones choice arises. For this reason, it is not appropriate to apply the same analysis to the question of infringement of the right as obtains in an examination of an admitted interference with a right such as arises under article 8. This is clear from such seminal cases as Croissant v Germany (1992) 16 EHRR 135, 151, para 29 where ECtHR said: [I]t is for the courts to decide whether the interests of justice require that the accused be defended by counsel appointed by them. When appointing defence counsel the national courts must certainly have regard to the defendants wishes; indeed, German law contemplates such a course. However, they can override those wishes when there are relevant and sufficient grounds for holding that this is necessary in the interests of justice. The exercise involved here is one of the courts deciding what the interests of justice require, not whether an interference with an individuals Convention right has been justified. Of course, the wishes of a defendant may be pertinent to the question of where the interests of justice lie but that is not because they have an intrinsic value. It is because the desire of an accused person to be represented by someone in whom he reposes trust may be directly relevant to the promotion of the interests of justice aim. Essentially the same message is conveyed in Dvorski v Croatia (2016) 63 EHRR 7 where the Grand Chamber said at para 76: As the Court has already held in its previous judgments, the right set out in article 6.3(c) of the Convention is one element, among others, of the concept of a fair trial in criminal proceedings contained in article 6.1 (see Imbrioscia v Switzerland (1994) 17 EHRR 441, 24 November 1993, paras 36 and 37, Series A no 275, and Salduz v Turkey [GC], no 36391/02, para 50, ECHR 2008) (emphasis supplied) It is clear from this review of the relevant authorities that the essence of the right to choose ones counsel lies in the contribution that the exercise of that right makes to the achievement of the ultimate goal of a fair trial. It is not an autonomous right which falls to be considered outside that context. On that account, the circumstances in which and the reasons that Mr Maguire expressed the wish to have Mr Barlow as his leading counsel are of obvious importance and require close examination. Informed choice The reasons that Mr Maguire wished to have Mr Barlow as his leading counsel were expressed pithily in his affidavit. At para 6, he said: Due to the level (sic) of consultations that took place between myself, counsel and solicitors and the work that was undertaken by counsel and solicitor my wish was to instruct Mr Barlow BL as my lead counsel in the retrial. This was due to the fact that I had confidence in Mr Barlow to appear as my lead counsel due to his knowledge of my case. The question of advice to an accused person about his representation at a criminal trial was considered by the High Court of Justiciary in Addison v HM Advocate 2015 JC 105. At paras 25 and 26, the Lord Justice General said: 25. The Law Society of Scotland Practice Rules 2011 provide that if a case requires appearance in a superior court, the solicitor must advise his client that it is for the client to decide whether a solicitor advocate or counsel is instructed (rule B8.4.l(b)). That is a sound rule as far as it goes; but the decision of the client on [whether a solicitor advocate or counsel is instructed] must be an informed decision. To make such a decision the client must be advised of his options for representation. A mere recital of those options is no more than a formality if it is not supplemented by advice, a point on which the Practice Rules are silent. In my view, it is the duty of the accuseds solicitor to take all reasonable steps to ascertain which members of the Bar and solicitor advocates experienced in this area are, or may be, available to conduct the defence. Only then can a worthwhile decision on representation be made. 26. The observance of these duties may present the accuseds solicitor with a conflict of interest, especially if he is a solicitor advocate or if a senior member of his firm is a solicitor advocate. This court has already adverted to the latter problem in Woodside v HM Advocate 2009 SCCR 350 (at paras 71 74). It is a matter for concern that it continues. Even where there is no such obvious conflict of interest, the solicitor may nonetheless find it difficult to give wholly objective advice as to the choice of defender from those who are available. In the event, any advice that he gives may be thought to lack the appearance of objectivity. Although this admonition was based on a rule which has no equivalent in Northern Ireland, it seems to me to contain sound guidance on how solicitors should ensure that accused persons have sufficient information to make a proper choice as to how they should be represented, particularly when a certificate for two counsel has been issued. There is nothing in the evidence as to the circumstances in which Mr Maguire made his choice to indicate that he received advice of the nature outlined by the Lord Justice General. He should have received such advice. Of course, in the particular circumstances of this case, even if Mr Maguire had received that advice, it does not follow that he would have been entitled to insist that Mr Barlow act as his leading counsel. For the reasons given, he was in any event not entitled to insist on that course. The observations in these paragraphs are made to reinforce the message given by the High Court of Justiciary in Addison that it is the professional obligation of solicitors to give clear advice to accused persons of the options available to them when a certificate for two counsel has been granted. Conclusions Rule 20.11 of the code of conduct is obviously designed to ensure that proper representation of accused persons should be guaranteed when a certificate for two counsel has been issued. Imposing a requirement that senior counsel be engaged, unless none is available, is entirely consonant with that aim. There is no question of interference with the appellants right under article 6. To the contrary, the rule is designed to promote and vindicate that right. In light of that conclusion, it is unnecessary to embark on an examination of the interesting issues raised by the respondent about whether the Bar Council is a hybrid public authority and its entitlement to regulate representation of accused persons in the conduct of criminal trials. Article 6 does not invest an accused person with the right to demand that he have counsel of his choice at public expense, independently of the requirements of the interests of justice. If it can be shown that the interests of justice will best be served by having a requirement that, where a certificate for two counsel is issued, it will, in general, be better for an accused to be represented by both senior and junior counsel, a requirement that this be so cannot give rise to any violation of article 6. That the interests of justice will be best served in this way is beyond serious dispute, in my opinion. Senior counsel obtain that rank on the basis of an objective assessment of their professional expertise and experience. Rule 20.11 does no more than give effect to the desirability that defendants be represented at the highest possible standard, just as rule 4(3) of the 2012 Rules does. The circumstance that that aspiration finds expression in a rule contained in the code of conduct of the Bar does not sound on the question of the appellants article 6 rights. So far from impinging on those rights, the rule is plainly designed to uphold and vindicate them. The source of the rule is therefore irrelevant to any possible violation of article 6.3(c). That simply does not arise.

The appellant was a defendant in criminal proceedings in the Crown Court in Belfast. A legal aid certificate entitled him to public funding to instruct a solicitor and two counsel to appear on his behalf in those proceedings. During his first trial, he was represented by a barrister, Mark Barlow (described as leading junior counsel) and a solicitor advocate, Clive Neville. The jury were unable to reach a verdict and they were discharged. The appellant was tried again. He again wished to have Mr Barlow as lead counsel. In the meantime, however, Mr Barlow had been disciplined by the Bar Council of Northern Ireland (the respondent in these proceedings) on the basis that where a certificate had been granted for two counsel, unless there were exceptional circumstances meaning that a senior counsel was not available, he could not act as leading counsel. Mr Barlow therefore informed the appellant that he could not act as leading counsel. The appellant claimed that if Mr Barlow was not permitted to appear as his leading counsel, this would constitute a violation of his rights under article 6 of the European Convention on Human Rights (ECHR). The respondent Bar Council rejected this claim. The appellants re trial proceeded and he was acquitted on seven counts, with the jury failing to reach a verdict on the other four counts. The prosecution indicated that it does not propose that the appellant be tried again on the counts on which the jury failed to agree. The appellant applied for judicial review of the Bar Councils decision on the basis that it impeded his choice of lead counsel and therefore violated his right under article 6 ECHR. He asserted that his right to choose counsel was limited only by the interests of justice test within article 6.3 ECHR. The Divisional Court dismissed his application. The issue was whether, in cases where public funding for two counsel has been granted and where the accused wishes to retain a particular junior counsel, the requirement of the Bar Council that he must instruct an available senior counsel or proceed with junior counsel alone is not compatible with the accuseds right under article 6.3 to defend himself through legal assistance of his own choosing. The Supreme Court dismisses the appeal. Lord Kerr gives the judgment with which all the other Justices agree. Article 6 ECHR provides the right to a fair trial. The relevant provision is article 6.3(c), which states that every person charged with a criminal offence shall have the right to defend himself in person or through legal assistance of his own choosing. The appellant argued that this entitled him to choose which lawyers could defend him, unless the Bar Council could show that the refusal was justified [18 21]. The court examined the relevant case law of the European Court of Human Rights, which emphasises adequacy of representation over freedom of choice as to the identity of counsel. The fundamental basis of the right guaranteed by article 6.3(c) is that the legal representation should be conducive to a fair trial, rather than conferring complete freedom to an individual defendant to choose the lawyer by whom to be represented [28]. A defendant does not have the right to decide in what manner his defence should be assured the right is to be represented by sufficiently experienced counsel of ones choice, but the role to be played by that counsel cannot be dictated by the defendant [30]. In the present case, the appellant has not advanced any grounds why Mr Barlow should be designated as leading counsel so that his rights of defence would be assured. As the respondent has pointed out, Mr Barlow could continue to act for Mr Maguire but as junior counsel, either with senior counsel, or, if senior counsel was not available, alone. Mr Maguire was not deprived of the services of Mr Barlow by operation of the Bar Council code of conduct. The deprivation, if there was one, was the denial of an enhanced payment to Mr Barlow acting as leading counsel [32]. The exercise involved here is one of the courts deciding what the interests of justice require, not whether an interference with an individuals Article 6 right has been justified. Of course, the wishes of a defendant may be pertinent to the question of where the interests of justice lie but that is not because they have an intrinsic value [36]. It is clear from the relevant authorities that the essence of the right to choose ones counsel lies in the contribution that the exercise of that right makes to the achievement of the ultimate goal of a fair trial. It is not an autonomous right which falls to be considered outside that context [38]. Article 6 does not give a defendant the right to demand that he have counsel of his choice at public expense, independently of the requirements of the interests of justice. So far from impinging on the appellants rights under article 6.3(c), the relevant provision in the Bars code of conduct is designed to uphold and vindicate them [44].

Is it lawful for a Christian hotel keeper, who sincerely believes that sexual relations outside marriage are sinful, to refuse a double bedded room to a same sex couple? Does it make any difference that the couple have entered into a civil partnership? These are questions which would have been unthinkable less than two decades ago. That they can now be asked is a measure of how far we have come in the recognition of same sex relationships since the repeal of section 28 of the Local Government Act 1988, in Scotland in 2000 and in England and Wales in 2003. The general rule is that suppliers of goods and services are allowed to pick and choose their customers. They were first prohibited from discriminating against a would be customer on grounds of sex, race or disability, by the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995. Although to some extent inspired by the European Unions principle of equal treatment, some of this legislation went further than was then strictly required by EU law. Then came Council Directive 2000/78/EC of 27 November 2000, establishing a general framework for equal treatment in employment and occupation. Its purpose was to lay down a general framework for combating discrimination on the further grounds of religion or belief, disability, age or sexual orientation, as regards employment and occupation (article 1). The United Kingdom implemented that Directive by amendments to the Disability Discrimination Act and by Regulations dealing with discrimination on grounds of religion or belief, age and sexual orientation in those fields (see the Employment Equality (Religion of Belief) Regulations 2003, the Employment Equality (Sexual Orientation) Regulations 2003 and the Employment Equality (Age) Regulations 2006). That was as far as EU law required, and still requires, it to go. But Parliament then passed the Equality Act 2006. This established the Equality and Human Rights Commission (EHRC) and extended the prohibition of discrimination on grounds of religion or belief into, among other things, the provision of goods, facilities and services. It also permitted the Secretary of State to make regulations similarly extending the scope of the prohibition of discrimination on grounds of sexual orientation. The Equality Act (Sexual Orientation) Regulations 2007, with which this case is concerned, were the result. All of this legislation has since been replaced (for a case such as this) by the Equality Act 2010, but the principles, concepts and provisions with which we are concerned have remained much the same. Thus we have a dispute between two sets of individuals, Christian hotel keepers and same sex civil partners, all of whom have what is now called a protected characteristic, that is a characteristic which protects them against discrimination in a wide variety of areas of activity. It is a curiosity of the case, of which Mr Aidan ONeill QC complains on behalf of Mr and Mrs Bull, that the EHRC has prosecuted this case on behalf of parties with one protected characteristic against parties with another. It is understandable that his clients should feel this way and a more neutral stance of the Commission might have been to seek to intervene in, rather than to prosecute, these proceedings. But it misunderstands the nature of the case. If Mr Preddy and Mr Hall were hotel keepers who had refused a room to Mr and Mrs Bull, because they were Christians (or even because they were an opposite sex couple), no doubt the Commission would have been just as ready to support Mr and Mrs Bull in their claim. Each of these parties has the same right to be protected against discrimination by the other. The issues in discrimination law are difficult enough, but there are also competing human rights in play: on the one hand, the right of Mr and Mrs Bull (under article 9 of the European Convention for the Protection of Human Rights and Fundamental Freedoms) to manifest their religion without unjustified limitation by the state; and on the other hand, the right (under article 14) of Mr Preddy and Mr Hall to enjoy their right (under article 8) to respect for their private lives without unjustified discrimination on grounds of their sexual orientation. But while both parties can assert their rights against the state, Mr Preddy and Mr Hall cannot assert their rights directly against Mr and Mrs Bull, who are private citizens. The Regulations Regulation 3 defines two types of discrimination, direct and indirect. It reads where relevant: 3 Discrimination on grounds of sexual orientation (1) For the purposes of these Regulations, a person (A) discriminates against another (B) if, on grounds of the sexual orientation of B or any other person except A, A treats B less favourably than he treats or would treat others (in cases where there is no material difference in the relevant circumstances). (3) For the purposes of these Regulations, a person (A) discriminates against another (B) if A applies to B a provision, criterion or practice (a) which he applies or would apply equally to persons not of Bs sexual orientation, (b) which puts persons of Bs sexual orientation at a disadvantage compared to some or all others (where there is no material difference in the relevant circumstances), (c) which puts B at a disadvantage compared to some or all persons who are not of his sexual orientation (where there is no material difference in the relevant circumstances), and (d) which A cannot reasonably justify by reference to matters other than Bs sexual orientation. (4) For the purposes of paragraphs (1) and (3), the fact that one of the persons (whether or not B) is a civil partner while the other is married shall not be treated as a material difference in the relevant circumstances. If there was discrimination in this case, it was prohibited by Regulation 4(1), which makes it unlawful for a person (A) concerned with the provision to the public or a section of the public of goods, facilities or services to discriminate against a person (B) who seeks to obtain or to use those goods, facilities or services by . refusing to provide B with goods, facilities or services. By Regulation 4(2) this applies, in particular, to . accommodation in a hotel, boarding house or similar establishment. There are two exceptions in the Regulations which are relevant to the issues in this case, not because they do cover the situation here, but because they do not. Regulation 6(1) provides an exception from regulation 4 for people who take into their own home and treat as members of the family, children, elderly persons or persons requiring a special degree of care and attention. Regulation 14 makes a specific and carefully defined exception from this prohibition (and others) for religious organisations, as opposed to individuals such as Mr and Mrs Bull who hold particular religious beliefs. The History Mr Preddy and Mr Hall are civil partners who live in Bristol. They planned a short break in Cornwall. On 4 September 2008, Mr Preddy made a telephone booking at the Chymorvah Private Hotel in Marazion, of a double bedroom for the nights of 5 and 6 September. Mr and Mrs Bull own the Hotel, and run it together with their cousin, Mr Quinn. They are devout Christians who sincerely believe (as the judge put it) that the only divinely ordained sexual relationship is that between a man and a woman within the bonds of matrimony. In 2008 their on line booking form stated: Here at Chymorvah we have few rules, but please note, that out of a deep regard for marriage we prefer to let double accommodation to heterosexual married couples only thank you. Twin bedded and single rooms, on the other hand, would be let to any person regardless of marital status or sexual orientation. Mr Preddy did not see this clause, because he booked by telephone, and Mrs Bull did not follow her usual practice of asking whether the reservation was for a man and his wife, because she was unwell when she got up to answer the telephone which had been ringing for some time. When Mr Preddy and Mr Hall arrived at the hotel on 5 September, they were met by Mr Quinn, who informed them that the double bedded rooms were for married couples only. Mr Preddy said that they were in a civil partnership. Mr Quinn explained that we were Christians and did not believe in civil partnerships and that marriage is between a man and a woman and therefore we could not honour their booking. It was accepted that this was not done in a demeaning manner, but there were other guests present. The refusal was very hurtful to the couple, who left the hotel and found alternative accommodation at another hotel. The deposit which they had paid was re credited to their account. These proceedings were launched, with the support of the EHRC, in March 2009 after a letter before action in February. In their response to that letter, Mr and Mrs Bull denied that they had unlawfully discriminated against the couple on the basis of their sexual orientation and claimed that the Regulations must be applied in a manner compatible with their Convention rights, in particular the right to manifest their religion. Without prejudice to that, they offered to reimburse the additional expense to which the couple had been put in having to find alternative accommodation, together with a modest sum for the inconvenience. This offer having been rejected, the claim came before His Honour Judge Rutherford in the Bristol County Court. He held that the refusal to allow the couple to occupy the double room they had booked was due to their sexual orientation and was direct discrimination within the meaning of regulation 3(1). He held that the Regulations were a necessary and proportionate intervention by the state to protect the rights of others and thus not incompatible with the Convention rights of Mr and Mrs Bull. Alternatively, if it was not direct discrimination, it was unjustified indirect discrimination within the meaning of regulation 3(3). He awarded each of the claimants 1,800 in damages for injury to feelings, to include the extra cost of their alternative accommodation. The judge himself gave permission to appeal. The Court of Appeal unanimously dismissed the appeal: [2012] EWCA Civ 83; [2012] 1 WLR 2514. They held that this was direct discrimination on grounds of sexual orientation and thus not capable of justification. The hotels policy was a manifestation of the owners religious beliefs within the meaning of article 9. But the limitation imposed upon them by the Regulations was necessary in a democratic society for the protection of the rights of others. A year later, the Court of Appeal decided the case of Black v Wilkinson [2013] EWCA Civ 820, [2013] 1 WLR 2490. The facts were very similar, save that this was a bed and breakfast establishment rather than a private hotel and the same sex couple were not in a civil partnership. Had the court not been bound by Preddy v Bull to hold that this was direct discrimination, they would have held the discrimination to be indirect, but not justified. The interference with the right to respect for the defendants home and the right to manifest her religion was justified as a proportionate means of protecting homosexuals from discrimination on the ground of their sexual orientation. Permission was given to appeal to this court so that the two cases could be heard together, but Mrs Wilkinson decided not to pursue her appeal. This court is therefore solely concerned to decide the issues as they arise in relation to a same sex couple who are civil partners. Those issues (in the order in which I propose to discuss them) are, firstly, whether this was direct or indirect discrimination on the ground of sexual orientation; secondly, if it was indirect discrimination, whether the policy was justified under regulation 3(3)(d); and thirdly, if it would otherwise be unlawful discrimination within the meaning of regulation 3(1) or 3(3), whether the Regulations fall to be read and given effect compatibly with the appellants Convention rights under section 3 of the Human Rights Act 1998. Direct or indirect discrimination? The distinction between direct discrimination, as defined in regulation 3(1), and indirect discrimination, as defined in regulation 3(3), is crucial: not because direct discrimination can never be justified, as Mr Robin Allen QC reminds us, but because the justifications are expressed in the legislation. There is no general defence of justification as there is in regulation 3(3)(d). Yet the distinction is by no means easy to draw, as this case illustrates all too clearly. Put simply, Mr and Mrs Bull state that they did not discriminate against Mr Preddy and Mr Hall on the ground of their sexual orientation but on the ground that they were not married to one another. They have applied exactly the same policy to unmarried opposite sex couples. While discrimination against a person on the ground that she is married was outlawed in the sphere of work by the Sex Discrimination Act 1975, it has never been unlawful to discriminate against the unmarried in any of the other areas covered by the Sex Discrimination Act 1975 and now the Equality Act 2010. They accept that it was indirect discrimination, as opposite sex couples are able to marry while same sex couples currently cannot do so, and so the policy puts the latter at a particular disadvantage. The Court of Appeal (in para 40 of the judgment of Rafferty LJ and para 61 of the judgment of Sir Andrew Morritt) based their finding of direct discrimination on the well known, if controversial, case of James v Eastleigh Borough Council [1990] 2 AC 751. The Council allowed people who had reached state pension age free entry to its swimming pool. All women reached that age at 60 while all men reached it at 65. There was thus an exact correspondence between the criterion and the protected characteristic of sex. Hence their lordships decided, albeit by a majority of three to two, that this was direct discrimination on grounds of sex and could not be justified whatever the laudable motives of the Council in fixing on retirement age as the criterion for free entry. Had it been available to them, their lordships might well have cited the words of Advocate General Sharpston twenty years later, in Bressol v Gouvernement de la Commaunit Franaise (Case C 73/08) [2010] 3 CMLR 559, para 56: I take there to be direct discrimination when the category of those receiving a certain advantage and the category of those suffering a correlative disadvantage coincide exactly with the respective categories of persons distinguished only by applying a prohibited classification. In this she was building on the opinion of Advocate General Jacobs in Schnorbus v Land Hessen (Case C 79/99) [2000] ECR I 10997, para 33: The discrimination is direct where the difference in treatment is based on a criterion which is either explicitly that of sex or necessarily linked to a characteristic indissociable from sex. It is indirect where some other criterion is applied but a substantially higher proportion of one sex than of the other is in fact affected. Applying Advocate General Jacobs test, it can be argued that a marriage criterion is indissociable from sexual orientation, in that at present persons of hetero sexual orientation can marry and persons of homosexual orientation cannot. I leave aside Mr ONeills argument that persons of homosexual orientation are free to marry persons of the opposite sex: examples abound in history of people who have done so (I would instance the long, happy and fruitful marriage of Victoria Sackville West and Harold Nicholson). They are not free to marry a person who shares their own orientation. But applying the test as stated by Advocate General Sharpston, there is not an exact correspondence between those suffering the disadvantage of being denied a double bed, and those enjoying the correlative advantage of being allowed one, with the protected characteristic. While all same sex couples were denied, so too were some opposite sex couples. Furthermore, I note that in Schnorbus, the criterion (of having served in the army) was one which men could meet but woman could not; and in Bressol, the criterion (of having the right to reside in Belgium) was one which all Belgian nationals could meet, but only some foreigner nationals; yet in both cases the Court of Justice held that the discrimination was indirect rather than direct. We do not have to construe these Regulations in accordance with the jurisprudence of the Court of Justice, because they are not implementing a right which is (as yet) recognised in EU law. But as the same concepts and principles are applied in the Equality Act 2010 both to rights which are and rights which are not recognised in EU law, it is highly desirable that they should receive interpretations which are both internally consistent and consistent with EU law. Schnorbus and Bressol (which were applied by this Court in Patmalniece v Secretary of State for Work and Pensions [2011] UKSC 11, [2011] 1 WLR 783) demonstrate that this case is not on all fours with James v Eastleigh Borough Council. There is not an exact correspondence between the disadvantage and the protected characteristic. In Black v Wilkinson [2013] 1 WLR 2490, at para 21, Lord Dyson MR confessed to some difficulty in agreeing with the view that the decision in Jamess case compels the conclusion that there was direct discrimination in Preddy v Bull. In his view, this was not a case of direct discrimination against a homosexual couple on the ground of their sexual orientation, since there were other unmarried couples who would also be denied accommodation on the ground that they too were unmarried. Were this case solely about discrimination against the unmarried, I would agree with him. He found support in the decision of the Judicial Committee of the Privy Council in Rodriguez v Minister of Housing of Government of Gibraltar [2009] UKPC 52, [2010] UKHRR 144. This too was a complaint by a same sex couple against a criterion which restricted the right to succeed to a government tenancy to couples who were married or had children together. It was a human rights case under the Constitution of Gibraltar, where the distinction between direct and indirect discrimination is not as crucial as it is in our domestic anti discrimination law. Nevertheless, in the opinion of the Board, this was not direct discrimination on grounds of sexual orientation, because other unmarried couples suffered the same disadvantage. But it was more severe than most cases of indirect discrimination, because the criterion was one which the couple would never be able to meet: Thus it is a form of indirect discrimination which comes as close as it can to direct discrimination (para 19). Does it make a difference that this couple were in a civil partnership? In my view, it does. The concept of marriage being applied by Mr and Mrs Bull was the Christian concept of the union of one man and one woman. That is clear from the reference to heterosexual married couples in the statement of policy which was current at the time; it is even clearer from the amended policy, which read . out of a deep regard for marriage (being the union of one man to one woman for life to the exclusion of all others) . ; and was made clear to the couple by what Mr Quinn said when Mr Preddy told him that they were civil partners. Civil partnership is not called marriage but in almost every other respect it is indistinguishable from the status of marriage in United Kingdom law. It was introduced so that same sex couples could voluntarily assume towards one another the same legal responsibilities, and enjoy the same legal rights, as married couples assume and enjoy. It is more than a contract. Like marriage, it is a status, in which some of the terms are prescribed by law, and which has consequences for people other than the couple themselves and for the state. Its equivalence to marriage is emphasised by the provision in regulation 3(4) that being married and being a civil partner is not to be treated as a material difference for the purpose of a finding of either direct or indirect discrimination. Regulation 3(4) is by no means easy to construe. It does not state in so many words that it is unlawful to discriminate between married couples and civil partners. It expressly applies equally to direct discrimination under regulation 3(1) and to indirect discrimination under regulation 3(3). For that reason, it is difficult to regard it as turning what would otherwise be indirect discrimination into direct. It is ostensibly about a different aspect of the discrimination inquiry, which is whether the circumstances of the people being compared are the same or not materially different from one another. In other words, it provides that people who are married and people who are civil partners are to be regarded as similarly situated. In Maruko v Versorgungsanstalt der Deutschen Bhnen (Case C 267/06) [2008] 2 CMLR 914, the Grand Chamber of the European Court of Justice held that it was for the national court to decide whether a surviving same sex life partner was in a comparable situation to a surviving spouse (para 73). That decision is made for us by regulation 3(4). But the Grand Chamber went on to hold that, if they were in a comparable situation, then to treat a surviving life partner less favourably than a surviving spouse, by denying him a survivors pension, was direct discrimination within the meaning of the equal treatment directive, 2000/78 (para 72). Interestingly, they so held despite the fact that the survivor and the Commission had argued that this was indirect discrimination (see para 63). As this case is not within the scope of EU law, we are not bound to follow Maruko, but for the sake of consistency and coherence it is highly desirable that we follow the same approach. With or without regulation 3(4), I have the greatest difficulty in seeing how discriminating between a married and a civilly partnered person can be anything other than direct discrimination on grounds of sexual orientation. At present marriage is only available between a man and a woman and civil partnership is only available between two people of the same sex. We can, I think, leave aside that some people of homosexual orientation can and do get married, while it may well be that some people of heterosexual orientation can and do enter civil partnerships. Sexual relations are not a pre condition of the validity of either. The principal purpose of each institution is to provide a legal framework within which loving, stable and committed adult relationships can flourish. I would therefore regard the criterion of marriage or civil partnership as indissociable from the sexual orientation of those who qualify to enter it. More importantly, there is an exact correspondence between the advantage conferred and the disadvantage imposed in allowing a double bed to the one and denying it to the other. With the greatest respect to Lord Neuberger, I cannot accept that this additional reason for the discrimination adds nothing. The important question, as Lord Phillips emphasised in R (E) v Governing Body of JFS [2009] UKSC 15, [2010] 2 AC 728, is what criterion was being employed by the service provider when granting a service to one and denying it to another. The reason for adopting that criterion is irrelevant. When it came to denying a double bed to Mr Preddy and Mr Hall, which they would have given to a heterosexual married couple, Mr and Mrs Bull were not only applying the criterion that they were unmarried. They were applying a criterion that their legal relationship was not that of one man and one woman, in other words a criterion indistinguishable from sexual orientation. They would undoubtedly (as their revised policy makes clear) have denied a double bed to a same sex couple who were married under some foreign law which allows it (and would do once same sex marriage becomes law in the United Kingdom). The matter can be tested by imagining a different additional criterion. What if hoteliers limited their double bedded rooms to married couples over the age of 30? They would not only be discriminating against all unmarried people, which is permitted unless it is indirectly discriminatory against a person with some protected characteristic. They would also be discriminating against a married person who is under the age of 30. That would in my view clearly be direct discrimination on grounds of age. There would be an exact correspondence between the protected characteristic of age and the criterion used for the difference in treatment. Furthermore, although this is a small point, if this is not direct discrimination, it is much harder to bring it within the definition of indirect discrimination in the 2007 Regulations than is a marriage criterion alone. The criterion is not simply that you are unmarried but also you are in a civil partnership. Most people would not regard that as a criterion which would be applied to people irrespective of their sexual orientation: it is specific to those of homosexual orientation. Indirect discrimination It is not disputed that, if this is not direct discrimination, it is indirect discrimination within the meaning of regulation 3(3). The policy of letting double bedded rooms only to married couples, while applied to heterosexual and homosexual people alike, undoubtedly puts homosexual people as a group at a serious disadvantage when compared with heterosexuals, as they cannot enter into a status which Mr and Mrs Bull would regard as marriage. It undoubtedly put both Mr Preddy and Mr Hall at a disadvantage. The question, therefore, is whether it can reasonably be justified by reference to matters other than their sexual orientation. Mr and Mrs Bull argue that they should not be compelled to run their business in a way which conflicts with their deeply held religious beliefs. They should not be obliged to facilitate what they regard as sin by allowing unmarried couples to share a bed. A fair balance should be struck between their right to manifest their faith and the right of Mr Preddy and Mr Bull to obtain goods, facilities and services without discrimination on grounds of their sexual orientation. This question was not addressed in the Court of Appeal, as they had concluded that this was direct discrimination. It was addressed by the judge, who confessed that he did not find regulation 3(3)(d) easy to interpret. Worded as it is, I understand what he means. Mr and Mrs Bull seek to justify their policy by reference to a deeply held belief that sexual intercourse outside marriage is sinful. Can that belief be a matter other than [their] sexual orientation? I am prepared to accept that it can, not least because it covers all kinds of unmarried couple. But it would be hard to find that a belief that sexual intercourse between civil partners was sinful was a matter other than [their] sexual orientation, because by definition such sexual intercourse has to be between persons of the same sex. Thus, even on the wording of the regulation itself, it is difficult to see how discriminating in this way against a same sex couple in a civil partnership could ever be justified. But it goes further than that. Parliament has created the institution of civil partnership in order that same sex partners can enjoy the same legal rights as partners of the opposite sex. They are also worthy of the same respect and esteem. The rights and obligations entailed in both marriage and civil partnership exist both to recognise and to encourage stable, committed, long term relationships. It is very much in the public interest that intimate relationships be conducted in this way. Now that, at long last, same sex couples can enter into a mutual commitment which is the equivalent of marriage, the suppliers of goods, facilities and services should treat them in the same way. Added to these considerations are those which weighed with the judge. To permit someone to discriminate on the ground that he did not believe that persons of homosexual orientation should be treated equally with persons of heterosexual orientation would be to create a class of people who were exempt from the discrimination legislation. We do not normally allow people to behave in a way which the law prohibits because they disagree with the law. But to allow discrimination against persons of homosexual orientation (or indeed of heterosexual orientation) because of a belief, however sincerely held, and however based on the biblical text, would be to do just that. Regard can also be had to the purpose of the Regulations, not as an aid to construction but in order to understand the problems they were meant to solve and how they proposed to solve them. The purpose was to secure that people of homosexual orientation were treated equally with people of heterosexual orientation by those in the business of supplying goods, facilities and services. Parliament was very well aware that there were deeply held religious objections to what was being proposed and careful consideration had been given to how best to accommodate these within the overall purpose. For the reasons explained in the Explanatory Memorandum to the Regulations, Parliament did not insert a conscientious objection clause for the protection of individuals who held such beliefs. Instead, it provided, in regulation 14, a carefully tailored exemption for religious organisations and ministers of religion from the prohibition of both direct and indirect discrimination on grounds of sexual orientation. This strongly suggests that the purpose of the Regulations was to go no further than this in catering for religious objections. Mr and Mrs Bull are, of course, free to manifest their religion in many other ways. They do this by the symbolism of their stationery and various decorative items in the hotel, by the provision of bibles and gospel tracts, and by the use of their premises by local churches. They do not, of course, discriminate against non believers or adherents of other faiths, for that would be just as unlawful under the Equality Act 2006 (and now the Equality Act 2010) as is discriminating against homosexuals under the 2007 Regulations. They are also free to continue to deny double bedded rooms to same sex and unmarried couples, provided that they also deny them to married couples. Before leaving this topic, it is worth noting that the Equality Act 2010 uses a different formulation. A provision, criterion or practice is indirectly discriminatory if the person who applies it cannot show it to be a proportionate means of achieving a legitimate aim. This is now a much more familiar formulation and avoids the linguistic difficulty referred to in paragraph 35 above. But for the reasons given earlier, it is unlikely in this context to lead to a different result. Does the Human Rights Act make a difference? Under article 9 of the European Convention on Human Rights, Mr and Mrs Bull have the right, not only to hold the religious beliefs which they hold, but also to manifest them in worship, teaching, practice and observance. The courts below held that their policy was a manifestation of their religious beliefs, and that has not been challenged in this appeal. The European Court of Human Rights has repeatedly stressed the importance of these rights in a democratic society. For example in Bayatyan v Armenia (2011) 54 EHRR 467, 494, the Grand Chamber said this: The Court reiterates that, as enshrined in article 9, freedom of thought, conscience and religion is one of the foundations of a democratic society within the meaning of the Convention. This freedom is, in its religious dimension, one of the most vital elements that go to make up the identity of believers and their conception of life, but it is also a precious asset for atheists, agnostics, sceptics and the unconcerned. The pluralism indissociable from a democratic society, which has been dearly won over the centuries, depends on it. That freedom entails, inter alia, freedom to hold or not to hold religious beliefs and to practise or not to practise a religion. Under article 9(2), the freedom to manifest their religion can be subject only to such limitations as are prescribed by law and are necessary in a democratic society . for the protection of the rights and freedoms of others. I have held above that to deny Mr Preddy and Mr Hall a double bedded room constituted unlawful discrimination within the meaning of regulations 3(1) and 4 of the Regulations. But if such a finding were to be incompatible with the Convention rights of Mr and Mrs Bull, the court would be obliged by section 3(1) of the Human Rights Act 1998, so far as possible, to read and give effect to the Regulations in a way which is compatible with their rights. Mr ONeill was agnostic as to the solution he preferred. It might be done, for example, by holding that what would otherwise be direct discrimination was indirect discrimination and justified. Or it might be done simply by ignoring the Regulation insofar as it produced an incompatible result (as the judge wrongly thought he was unable to do); but of course this solution would no longer be possible in respect of discrimination taking place after the Equality Act 2010 came into force, because the courts cannot ignore incompatible primary legislation. However, we do not come to remedy until we have decided whether there is an incompatibility. Mr ONeill understandably put the human rights dimension at the forefront of his submissions. He emphasised that it was the state which had placed limitations, in the shape of the Regulations, on the right of Mr and Mrs Bull to manifest their religion by conducting their business in accordance with their religious beliefs; whereas it was Mr and Mrs Bull, private citizens, who had arguably interfered with the right of Mr Preddy and Mr Hall to enjoy respect for their private lives without discrimination on the ground of their sexual orientation. The state had not interfered with that right. In order to engage the states responsibility, it would be necessary to erect a positive obligation to protect them from interferences by private citizens. One answer to that is that the state has already assumed such a responsibility, by enacting the Regulations. Another, and simpler, answer is that the rights of others for the purpose of article 9(2) (and indeed the other qualified rights in the Convention) are not limited to their Convention rights but include their rights under the ordinary law. The ordinary law gives Mr Preddy and Mr Bull the right not to be unlawfully discriminated against. It follows that, for the purpose of article 9(2), the limitation is in accordance with the law and pursues one of the legitimate aims there listed. The question, therefore, is whether it is necessary in a democratic society, in other words whether there is a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (see, for example, Francesco Sessa v Italy, App No 28790/08, Judgment of 3 April 2012, para 38). Mr ONeill makes an eloquent plea for reasonable accommodation between the two competing interests. The mutual duty of reasonable accommodation unless this causes undue hardship originated in the United States and found its way into the Canadian Human Rights Act 1985. It can of course be found in our own disability discrimination law (see E Howard, Reasonable Accommodation of Religion and Other Discrimination Grounds in EU Law (2013) 38 EL Rev 360). In Francesco Sessa v Italy, a Jewish lawyer complained that the refusal to adjourn his case to a date which did not coincide with the Jewish holidays of Yom Kippur and Sukkot was an interference with his right to manifest his religion. His complaint was dismissed by a majority of 4 to 3. A powerful minority pointed out that, for a measure to be proportionate, the authority must choose the means which is least restrictive of rights and freedoms. Thus, seeking a reasonable accommodation may, in some circumstances, constitute a less restrictive means of achieving the aim pursued. Mr Sessa had given the Italian court ample notice of the problem and reorganising the lists to accommodate him would cause minimal disruption to the administration of justice a small price to be paid in order to ensure respect for freedom of religion in a multi cultural society (para 13). I am more than ready to accept that the scope for reasonable accommodation is part of the proportionality assessment, at least in some cases. This is reinforced by the decision in Eweida v United Kingdom (2013) 57 EHRR 213, where the Strasbourg court abandoned its previous stance that there was no interference with an employees right to manifest her religion if it could be avoided by changing jobs. Rather, that possibility was to be taken into account in the overall proportionality assessment, which must therefore consider the extent to which it is reasonable to expect the employer to accommodate the employees right. Our attention has been drawn to two examples of this concept in operation in the British Columbia Human Rights Tribunal. In Smith and Chymyshyn v Knights of Columbus and others 2005 BCHRT 544, a lesbian couple had hired a hall owned by the Roman Catholic Church and let out on its behalf by the Knights in order to hold a reception after their marriage. The hall was available for public hire and they did not know of its connections with the Church. The letting was cancelled when the Knights learned of their purpose. The Tribunal accepted that the Knights could not be compelled to act in a manner contrary to their core belief that same sex marriages were wrong, but they had nevertheless failed in their duty of reasonable accommodation. They did not consider the effect their actions would have on the couple, did not think of meeting them to explain the situation and apologize, or offer to reimburse them for any expenses they had incurred or to help find another solution. In effect, they did not appreciate the affront to the couples human dignity and do their best to soften the blow. In Eadie and Thomas v Riverbend Bed and Breakfast and others (No 2) 2012 BCHRT 247, a gay couple had reserved a room in bed and breakfast accommodation offered by a Christian couple in their own home, but when the husband learned that the couple were gay, the booking was cancelled. Once again, the Tribunal held that there had been a failure in the duty of reasonable accommodation, in the offensive manner of the cancellation and the failure to explore alternatives. Interestingly, the Tribunal considered this a stronger case than Knights, because the Knights were operating a church hall used for church purposes, whereas Riverbend had chosen to operate an ordinary commercial business, albeit from their own home. We cannot place too much weight on these cases, decided upon under different legislation and in a different constitutional context. To the extent that they suggest that both the Knights and Riverbend were entitled to cancel the booking, provided that they did so in a way which respected the fundamental dignity rights of the couples concerned, they provide some comfort to Mr and Mrs Bull. Unlike Riverbend, Mr and Mrs Bull had made no secret of their policy, although Mr Preddy was not aware of it when making the booking. They would have been prepared to let Mr Preddy and Mr Hall have a twin bedded room, but there is no evidence that these alternatives were discussed at the time. The conversation with Mr Quinn was upsetting but not demeaning. The deposit was refunded almost immediately and a without prejudice offer to reimburse the additional expenditure was made later. Nevertheless, Mr and Mrs Bull cannot get round the fact that United Kingdom law prohibits them from doing as they did. I have already held that, if justification is possible, the denial of a double bedded room cannot be justified under regulation 3(3)(d). My reasons for doing so are equally relevant to the Convention question of whether the limitation on the right of Mr and Mrs Bull to manifest their religion was a proportionate means of achieving a legitimate aim. The legitimate aim was the protection of the rights and freedoms of Mr Preddy and Mr Hall. Whether that could have been done at less cost to the religious rights of Mr and Mrs Bull by offering them a twin bedded room simply does not arise in this case. But I would find it very hard to accept that it could. Sexual orientation is a core component of a persons identity which requires fulfilment through relationships with others of the same orientation. As Justice Sachs of the South African Constitutional Court movingly put it in National Coalition for Gay and Lesbian Equality v Minister of Justice, 1999 (1) SA 6, para 117: While recognising the unique worth of each person, the Constitution does not presuppose that a holder of rights is an isolated, lonely and abstract figure possessing a disembodied and socially disconnected self. It acknowledges that people live in their bodies, their communities, their cultures, their places and their times. The expression of sexuality requires a partner, real or imagined. Heterosexuals have known this about themselves and been able to fulfil themselves in this way throughout history. Homosexuals have also known this about themselves but were long denied the possibility of fulfilling themselves through relationships with others. This was an affront to their dignity as human beings which our law has now (some would say belatedly) recognised. Homosexuals can enjoy the same freedom and the same relationships as any others. But we should not underestimate the continuing legacy of those centuries of discrimination, persecution even, which is still going on in many parts of the world. It is no doubt for that reason that Strasbourg requires very weighty reasons to justify discrimination on grounds of sexual orientation. It is for that reason that we should be slow to accept that prohibiting hotel keepers from discriminating against homosexuals is a disproportionate limitation on their right to manifest their religion. There is no question of (as Rafferty LJ put it) replacing legal oppression of one community (homosexual couples) with legal oppression of another (those sharing the defendants beliefs) (para 56). If Mr Preddy and Mr Hall ran a hotel which denied a double room to Mr and Mrs Bull, whether on the ground of their Christian beliefs or on the ground of their sexual orientation, they would find themselves in the same situation that Mr and Mrs Bull find themselves today. For all those reasons, I would dismiss this appeal. I understand that this is the unanimous decision of the Court. However, three of us consider (albeit for rather different reasons) that it was direct discrimination, between persons who are married and persons who are in a civil partnership, and thus on grounds of sexual orientation, whereas two of us consider (again for rather different reasons) that it was indirect discrimination on grounds of sexual orientation. We all agree that, if it was indirect discrimination, it could not be justified. LORD KERR In my view, the material parts of regulation 3 are these: (1) For the purposes of these Regulations, a person (A) discriminates against another (B) if, on grounds of the sexual orientation of B or any other person except A, A treats B less favourably than he treats or would treat others (in cases where there is no material difference in the relevant circumstances) (4) For the purposes of paragraphs (1) and (3), the fact that one of the persons (whether or not B) is a civil partner while the other is married shall not be treated as a material difference in the relevant circumstances. Applied to the circumstances of this case, the question posed by regulation 3(1) is did Mr and Mrs Bull treat Mr Preddy and Mr Hall less favourably, on grounds of their sexual orientation, than they would have treated others when there is no material difference in their respective positions. Mr Preddy and Mr Hall are civil partners. By virtue of regulation 3(4) they are to be treated as being not materially different from a married couple. A married couple would have been permitted by Mr and Mrs Bull to occupy a double bedded room in their hotel. Mr Preddy and Mr Hall (who must for the purposes of regulation 3 be treated as if they were a married couple) were refused such a room. There can be no dispute that they were treated less favourably. Was this on the grounds of their sexual orientation? In my view, it was. This is not a question of regulation 3(4) transforming what was indirect discrimination into direct discrimination. In concrete terms the effect of regulation 3(4) in the present case is that when Mr Preddy and Mr Hall arrived at Mr and Mrs Bulls hotel, their situation was the legal equivalent of that of a married couple. By virtue of that paragraph of the regulation, they could not be distinguished, as a matter of law, from a couple who were married. The fact that this applies both in the direct and indirect discrimination contexts does not derogate from the impact that the provision has on the operation of regulation 3(1). There is no material difference between Mr Preddy and Mr Hall and a married couple. The circumstance that they are not married in fact is to be ignored. It is of no relevance. Mr and Mrs Bull may not, therefore, legally assert that they treated Mr Preddy and Mr Hall differently because they were not married for, in law, they are to be regarded as the same as a married couple. On that account the only remaining basis on which they were treated less favourably was their sexual orientation. As Lord Toulson has said, after regulation 3(4) is applied, the only differential between a married couple and Mr Preddy and Mr Hall is that the latter were of the same gender. And, although no express finding to this effect was made by the trial judge, it seems inevitable that if Mr Preddy and Mr Hall hailed from a jurisdiction where same sex marriage was legally recognised and if they had been legally married, they would have met with the same resistance to their sharing a double bedded room. The refusal by the hotel to allow them to have this accommodation was rooted in religious conviction that marriage was only legitimate if contracted between a man and a woman. This was a state which Mr Preddy and Mr Hall, by reason of their sexual orientation, could not aspire to together. Their sexual orientation may not have been the factor operating in the minds of Mr and Mrs Bull, or even that of Mr Quinn, but that is irrelevant. As Lord Phillips said in R (E) v Governing Body of JFS [2010] 2 AC 728 para 20, whether there has been discrimination on the ground of sex or race depends upon whether sex or race was the criterion applied [in James v Eastleigh Borough Council [1990] 2 AC 751] as the basis for discrimination. The motive for discriminating according to that criterion is not relevant. Mr and Mrs Bull cannot avoid the charge of discrimination on the ground of sexual orientation by saying it was not their intention to treat Mr Preddy and Mr Hall less favourably because they were gay men. It is because they are gay men (and, moreover, gay men who must in law be treated as if they were married but who cannot together enter the married state which Mr and Mrs Bull consider is the only acceptable form of marriage) that they were in fact treated less favourably. When one poses the question, what caused the unfavourable treatment of Mr Hall and Mr Preddy, against the backdrop that they are to be regarded as a married couple, the only answer is that they were discriminated against because they were homosexual. For that reason they were the victims of direct discrimination. Had it not been for regulation 3(4), the discrimination in this case would have been indirect. But for its impact on regulation 3(1) I would have agreed with Lord Neuberger and Lord Hughes that this was a case of indirect discrimination. discrimination. I agree with all that Lady Hale has had to say on the subject of indirect LORD TOULSON The court is divided about whether this is a case of discrimination under regulation 3(1) of the Equality Act (Sexual Orientation) Regulations 2007 (direct discrimination). In my view it is. Mr and Mrs Bull treated Mr Preddy and Mr Hall, who were civil partners, less favourably than [they] would treat others, namely married heterosexuals. This is clear not only from their printed literature, which stated that their policy was to let double accommodation to heterosexual married couples only, but from Mr Quinns response when told by Mr Preddy that he and Mr Hall were civil partners. Lord Neuberger has said that the word heterosexual added nothing as a matter of logic, but it served to emphasise that Mr and Mrs Bull would not let a double room to a married couple if they were homosexual (as might be so in the case of foreign visitors). Same sex couples were therefore explicitly excluded from renting a double bedroom. The disputed question is whether as a matter of causation Mr and Mrs Bulls less favourable treatment of Mr Preddy and Mr Hall was on grounds of their sexual orientation. Mr and Mrs Bull have at all times denied this. They say, firstly, that they did not refuse to let Mr Preddy and Mr Hall have a double room because of their sexual orientation but because they were not married (marriage being restricted to persons of opposite sex according to mainstream Christian teaching and according to English law, as it has been until now, although this is due to change as a result of section 1 of the Marriage (Same Sex Couples) Act 2013). They add, secondly, that they would equally have refused to let a double room to a heterosexual unmarried couple. This, they say, shows that the refusal of a double bedroom to Mr Preddy and Mr Hall had nothing to do with their sexual orientation. The answer to the first point is given by Lady Hale at para 29. To treat civil partners differently from married persons on the ground that they are not married is to discriminate on grounds of their sexual orientation, no less than it would be to treat a same sex married couple differently from an opposite sex married couple, for sexual orientation is the differential factor civil partnership is for homosexual couples what marriage is for heterosexual couples. One cannot separate the sexual orientation of Mr Preddy and Mr Hall from the resulting legal branding of their relationship, and to treat them differently from a married couple amounts to treating them differently because their relationship is homosexual and not heterosexual. As to the second point, it is true that in the case of unmarried heterosexuals it is not their sexual orientation which causes Mr and Mrs Bull to treat them differently from married heterosexuals, but the fact that the couple have not chosen to marry. But it is a non sequitur to reason from this that the differential treatment of persons in a civil partnership from that of married heterosexuals (or, similarly, of same sex married couples from opposite sex married couples) is not due to their sexual orientation, when that is the very factor which separates them. Lord Neuberger considers that on proper analysis the fact that Mr Preddy and Mr Hall were civil partners makes no difference; all that mattered was that they were not married. I am of the opposite opinion that it makes every difference. At the risk of repetition, I go back to my starting point, from which everything else flows. Since Mr Preddy and Mr Hall are civil partners, it is fair and reasonable that they should identify married heterosexuals as the relevant others for the purposes of regulation 3(1). If I am right about that, the question is whether their sexual orientation was the decisive criterion which led to their different treatment. I have explained my reasons for concluding that it was. The correctness of taking that starting point is reinforced by regulation 3(4). In considering whether there has been impermissible discrimination, either direct or indirect, the appropriate comparison is with others whose circumstances are not materially different. In saying this I am restating the point made by Lord Kerr in the second paragraph of his judgment. The decision of the House of Lords in James v Eastleigh Borough Council [1990] 2 AC 751, about gender equality, assists rather than hinders Mr Preddy and Mr Hall. Lord Bridge, with whom Lord Ackner and Lord Goff agreed, emphasised that under the relevant statutory provision the comparison which was required to be made was between persons whose relevant circumstances were the same. That is also a feature of the regulations with which we are concerned, by virtue of the words in cases where there is no material difference in the relevant circumstances. There is no material difference in circumstance between civil partners and married couples because the regulation so provides. Mr and Mrs Bull therefore cannot be heard to assert that it was a material circumstance that Mr Preddy and Mr Hall were unmarried. Lord Bridge also held that the motive of the defendants was irrelevant. The question was objective: would the claimant in that case have received the same treatment as his wife but for his sex? Transposed to this case the question becomes: would the claimants have received the same treatment as married heterosexuals but for their sexual orientation? On the questions about regulation 3(3) and article 9 there is no disagreement among the members of the court and I have nothing to add. LORD NEUBERGER I agree with Lady Hale that this appeal should be dismissed. However, I reach this conclusion on the ground that Mr and Mrs Bull were guilty of unjustified indirect discrimination contrary to regulation 3(3) of the 2007 Regulations, rather than (unjustifiable) direct discrimination contrary to regulation 3(1) of those Regulations. For the reasons that Lady Hale gives in paras 17 24 above, if this case were solely about discrimination against the unmarried, Mr and Mrs Bull would be guilty of indirect, rather than direct, discrimination. As she explains, this is because, in order for discrimination to be direct, there must be an exact correspondence between the criterion and the protected characteristic see James v Eastleigh Borough Council [1990] 2 AC 751, which is consistent with the approach adopted by the CJEU, as well summarised in the passage quoted from the Advocate Generals opinion in Bressol v Gouvernement de la Commaunit Franaise (Case C 73/08) [2010] 3 CMLR 559, para 56. However, I am unable to join Lady Hale in accepting the respondents argument that a different conclusion is warranted simply because Mr Preddy and Mr Hall had entered into a civil partnership. I cannot see why the addition of the fact that there was a civil partnership relationship between the two men alters Lady Hales conclusion in paras 23 24 above that, had Mr Preddy and Mr Hall not been in a civil partnership, the discrimination would have been indirect. Lord Toulson says that to treat Mr Preddy and Mr Hall differently from a married couple amounts to treating them differently because their relationship is homosexual and not heterosexual. That may be true as far as it goes, but (i) it is only a partial description of the discrimination being practised in this case and (ii) the existence of a civil partnership adds nothing. As to (i), one has to take the discrimination as it has been found to be: Mr and Mrs Bull would have treated an unmarried heterosexual couple in precisely the same way that they treated Mr Preddy and Mr Hall. As to (ii), I do not see why, on Lord Toulsons analysis, the fact that Mr Preddy and Mr Hall were in a civil partnership makes any difference. Thus, in my view, there is no getting away from the fact that, on the basis of the well established rule identified by Lady Hale this is a case of indirect discrimination, unless there are any other good reasons to the contrary. For the reasons Lady Hale gives in para 27 above, regulation 3(4) does not assist the respondents argument. It is merely concerned to establish that, for the purpose of establishing whether there has been direct or indirect discrimination, it must be assumed that there is no material difference between a person in a civil partnership and a married person. Not only is that what regulation 3(4) says as a matter of ordinary language, but it is hard to think that it has the effect argued for by the respondents given that it is expressed to apply to both regulation 3(1) and regulation 3(3) ie to both direct and indirect discrimination. The suggestion that this interpretation of rule 3(4) is contrary to the purpose of the Regulations seems to me, with respect, to be circular or self fulfilling: it assumes that the purpose of regulation 3 is to render discrimination in a case such as this direct, when that is the very question at issue. Having considered Lord Hughess analysis of the effect of regulation 3(4), it is right to add that I agree with it. Further, in so far as it is relied on to support the respondents case, I do not see how Mr and Mrs Bulls express restriction to heterosexual married couples referred to in para 9 above helps (except as a possible basis for a cross examination which sought to establish a different reason for the discrimination from that which they alleged). It was entirely consistent with the discrimination which Mr and Mrs Bull accepted that they practised, as explained to Mr Preddy and Mr Hall by Mr Quinn see para 10 above. The word heterosexual added nothing as a matter of logic, and indeed could fairly be said to have been necessary, because there are a number of jurisdictions (which will shortly include the United Kingdom) where marriage is as open to homosexual couples as it is to heterosexual couples. The Bulls were, on the judges finding, simply emphasising that they only permitted couples who were married in the traditional sense. It is true, as Lady Hale says in para 26 above, that Parliaments purpose in introducing civil partnerships was to enable homosexual couples to enjoy the same rights as heterosexual couples. However, that is not, in my view, either as a matter of logic or as a matter of policy, a reason for holding that the discrimination in this case was direct, given that it would have been indirect if Mr Preddy and Mr Hall had not been in a civil partnership. So far as logic is concerned, the existence of a civil partnership does not undermine the points made in paras 17 24 above. As to policy, the laudable aim of treating couples in a civil partnership the same as married couples leaves unanswered the question which type of discrimination is being practised in the present case. If it had been Parliaments intention to change the normal and well established distinction between direct and indirect discrimination where a civil partnership was involved, one would have expected to see the intention spelt out in the Civil Partnership Act. While I see how the decision in Maruko (Case C 267/06) [2008] 2 CMLR 914, para 74, as discussed in paras 28 29 above, can be said to provide some assistance to the respondents case, I do not find it very persuasive. It is true that the Grand Chamber found that there had been direct discrimination in that case, but it is, at best, of very limited assistance for a number of reasons: (i) the finding was an unreasoned assertion, (ii) the Grand Chamber seems simply to have contrasted the survivor of a homosexual partnership with his heterosexual equivalent, and, if that was the correct assessment of the discrimination, it would indeed have been direct, (iii) the Grand Chambers conclusion was inconsistent with the case advanced by the successful claimant and the Commission, (iv) the Advocate General, in a fully reasoned analysis, had held that the discrimination was indirect, (v) the decision of the Grand Chamber on this point is very hard to reconcile with the well established CJEU and domestic jurisprudence see the cases cited in paras 18 24 above, and (vi) we are here concerned with domestic legislation, and not with legislation based on an EU directive or regulation. It is perfectly true that there is an exact correspondence between the advantage conferred and the disadvantage imposed in allowing a double bed to [a married couple] and denying it to [a couple in a civil partnership], as Lady Hale says in para 29 above. However, that does not alter the fact that the well established requirements of direct discrimination as explained in paras 17 24 above are not satisfied in this case. I do not accept that, on the facts as found by the judge, it can be said that Mr and Mrs Bull operated a policy which was specific to those of homosexual orientation. They said that their policy was that only traditionally married couples could share a bed, and that the exclusion of unmarried couples applied equally to homosexuals and heterosexuals. It would have been quite permissible for the judge to have concluded, on the basis of a cross examination to that end, that their policy was, in truth, directly discriminatory against homosexual couples, because, for instance, they did not enforce their alleged rule against unmarried heterosexual couples, but no cross examination or argument was raised to support such a contention. Finally, I consider that it is important to keep the law in this area, as in almost any other area, clear and consistent. However much sympathy one may have with the notion that the discrimination practised by Mr and Mrs Bull ought to be or feels like direct discrimination, it is important for judges, perhaps particularly in this court, to bear in mind that potential and alleged discriminators and victims, as well as their advisers, know where they stand. Our domestic law is currently clear about the difference between direct and indirect discrimination, and it is well summarised by Lady Hale in paras 17 24 above. I believe that we should avoid reaching a decision which risks blurring that clarity. While I differ from Lady Hale on the issue of direct discrimination, I nonetheless agree with her ultimate conclusion that this appeal should be dismissed. That is because, in my view, Mr and Mrs Bull fail in their attempt to justify the indirect discrimination or to rely on the Human Rights Act, for the reasons given by Lady Hale respectively in paras 33 39 and 41 53 above, to which I cannot usefully add anything. LORD HUGHES The regulation makes, as do other statutory provisions in the field of discrimination, a clear distinction between direct discrimination (regulation 3(1) and indirect discrimination (regulation 3(3)). Both are unlawful. Indirect discrimination may often be just as damaging as direct discrimination; indeed it sometimes has the added feature that it is insidious, although not in the present case. Like Lord Neuberger, I entirely agree with Lady Hales very clear judgment except that this was, as it seems to me, a case of indirect discrimination which cannot be justified, rather than of direct discrimination. I agree with Lord Neubergers analysis and add only a few words of my own. As I see it, the argument for saying that the present case is one of direct discrimination runs like this: The defendants treated the claimants less favourably than they would i) have treated a married couple. ii) There is no material difference between civil partners and married people: regulation 3(4). iii) Therefore the only distinction between a married couple and civil partners is sexual orientation. iv) Sexual orientation is therefore the ground for (reason for) the less favourable treatment. v) Thus this is direct discrimination on grounds of sexual orientation. As it seems to me, the flaw in this comes at step (iv). It concentrates on the characteristics of these claimants rather than on the defendants reasons for treating them as they did. The claimants, in a civil partnership, are a subset of the unmarried; let us say subset (a). So also would they have been if they had been members of two other subsets of the unmarried: b) a same sex couple not in a civil partnership; or c) a different sex unmarried couple. The defendants were found to treat all three subsets the same. One cannot say that their less favourable treatment is on different grounds for each subset. It appears to be agreed that the less favourable treatment for subset (c) is on grounds of lack of marriage. So far as I can see, it is further agreed that the less favourable treatment for subset (b) is also on grounds of lack of marriage, and certainly that is how I see it. I am unable to see that one can legitimately say that when it comes to (a) it becomes less favourable treatment on grounds of sexual orientation. The reality is that it is on grounds of being unmarried for all of them. I entirely agree that regulation 3(4) is part of a general legislative scheme to treat civil partnership as the equivalent of marriage for many purposes, and that the public has an interest in stable publicly committed unions of both kinds. But that does not help in answering the question which form of discrimination is under consideration in the present case. It is still necessary to ask whether the claimants were treated less favourably than married people on grounds of sexual orientation. assuming that section 3 of the Human Rights Act 1998 requires us to read regulation 4(1) as subject to the qualification that its prohibition upon discrimination does not, on the facts of any particular case, occasion a disproportionate interference with the Convention rights of the defendants can it be saved by reliance on article 9. Because, however, being married is a condition which same sex couples cannot fulfil, the practice of the defendants amounted, in the case of both subsets (a) and (b), to indirect discrimination on grounds of sexual orientation within regulation 3(3)(b) and (c). For the reasons given by Lady Hale, it cannot be justified under regulation 3(3)(d). Nor, also for the reasons which she gives and

This appeal concerns the law on discrimination. Mr and Mrs Bull, the Appellants, own a private hotel in Cornwall. They are committed Christians, who sincerely believe that sexual intercourse outside traditional marriage is sinful. They operate a policy at their hotel, stated on their on line booking form, that double bedrooms are available only to heterosexual married couples. The Respondents, Mr Hall and Mr Preddy, are a homosexual couple in a civil partnership. On 4 September 2008 Mr Preddy booked, by telephone, a double room at the Appellants hotel for the nights of 5 and 6 September. By an oversight, Mrs Bull did not inform him of the Appellants policy. On arrival at the hotel, Mr Hall and Mr Preddy were informed that they could not stay in a double bedroom. They found this very hurtful, protested, and left to find alternative accommodation. In March 2009 the Respondents, supported by the Equality and Human Rights Commission, brought proceedings against the Appellants under the Equality Act (Sexual Orientation) Regulations 2007 (EASOR). Regulation 4 EASOR makes direct or unjustified indirect discrimination on the grounds of sexual orientation unlawful. Regulation 3 EASOR defines discrimination. Regulation 3(1) states that direct discrimination exists where person A treats person B less favourably then others on the ground of Bs sexual orientation. Regulation 3(3) states that indirect discrimination exists when person A applies a general policy or practice to person B and others not of Bs sexual orientation, which puts B at a particular disadvantage compared to those others, and the policy or practice is not reasonably justified by reference to matters other than Bs sexual orientation. Regulation 3(4) provides that for Regulations 3(1) and 3(3), civil partnership and marriage are not to be treated as materially different. The Respondents argued that the refusal to provide them with a double bedroom was unlawful under Regulation 4 EASOR. The Appellants contended that their actions did not constitute discrimination under either Regulation 3(1) or 3(3) EASOR since they differentiated not on the basis of sexual orientation, but on marital status. They also suggested that EASOR should be applied compatibly with their right to manifest their religious beliefs under Article 9 of the European Convention on Human Rights (ECHR). In the Bristol County Court, the judge held that the Appellants actions directly discriminated against the Respondents under Regulation 3(1). The Court of Appeal unanimously dismissed the appeal against the judges decision. Mr and Mrs Bull appealed to the Supreme Court. They argued that (i) their policy did not constitute direct discrimination under Regulation 3(1) (direct discrimination); (ii) that their policy did constitute indirect discrimination, but that that indirect discrimination was justified (indirect discrimination); and (iii) that if their policy did contravene EASOR, EASOR should be read and given effect compatibly with their Article 9 ECHR right of freedom to manifest their religion (the ECHR issue). The Supreme Court unanimously dismisses the appeal. The leading judgment is given by Lady Hale, with supplementary judgments from all other members of the Court. On point (i) direct discrimination, Lady Hale, Lord Kerr and Lord Toulson hold that the Appellants policy constituted direct discrimination on grounds of sexual orientation. On point (ii) indirect discrimination the Court unanimously holds that if (as Lord Neuberger and Lord Hughes consider) the Appellants policy constitutes indirect discrimination, it is not justified. On point (iii) the ECHR issue, the Court unanimously holds that EASOR engages Article 9 ECHR, but is a justified and proportionate protection of the rights of others. There is therefore no breach of Article 9 ECHR which would require EASOR to be read down in the way the Appellants suggest. (i) Direct discrimination. According to Lady Hale and Lord Toulson: the Appellants concept of marriage was the Christian concept of the union of one man and one woman [25]. Civil partnership is a status akin to marriage, and the criteria of marriage and civil partnership are indissociable from the sexual orientation of those qualifying for the particular statuses [29, 67]. All married couples would be permitted a double bedroom by the Appellants, while no civilly partnered couples would be [29]. Regulation 3(4) reinforces this conclusion [26, 70]. The Courts judgment does not favour sexual orientation over religious belief: had the Respondents refused hotel rooms to the Appellants because of the Appellants Christian beliefs, the Appellants would equally have been protected by the laws prohibition of discrimination [54]. According to Lord Kerr: but for Regulation 3(4), the discrimination would have been indirect. The relevance of Regulation 3(4) is that the Respondents were to be treated as not materially different from a married couple [57 59]. Given that, the only remaining reason for the Respondents treatment by the Appellants was their sexual orientation [60]. Lord Neuberger and Lord Hughes reach a different conclusion. It is correct that, had the case concerned only discrimination against the unmarried, the Appellants would have discriminated only indirectly [74]. However, the Respondents civil partnership does not convert this into direct discrimination [75, 87]. The Appellants would have treated an unmarried heterosexual couple in precisely the same way that they treated the Respondents [77, 90 91]. Regulation 3(4) does not provide the answer to the question whether the Appellants treatment of the Respondents was on grounds of their sexual orientation [78, 92]. (ii) Indirect discrimination. The Appellants accepted that their policy constituted indirect discrimination [33]. The question was whether it was justified. It was difficult to see how As belief that sexual intercourse between civil partners is sinful could be justified by reference to matters other than Bs sexual orientation, since definitionally such intercourse was between those of the same sexual orientation [35]. Moreover, it is in the public interest to encourage stable, committed, long term relationships, whether homosexual or heterosexual [36]. The purpose of EASOR was to secure that those of homosexual orientation were treated equally. There was a carefully tailored exemption for religious organisations in Regulation 14 EASOR, which did not extend to the Appellants [38]. (iii) The ECHR issue. The Appellants rights under Article 9(1), which protects the manifestation of religious belief, are engaged [44]. However, EASORs interference with those rights is justified as a proportional means of achieving a legitimate aim: the protection of the rights and freedoms of people such as the Respondents [51]. There was therefore no need to read down EASOR [42].

Local authority rates are the oldest tax in continuous existence in England, having originally been introduced in the reign of Queen Elizabeth I by the Poor Relief Act 1601 (43 Eliz 1, c 2). Historically, they were payable in respect of the rateable occupation of hereditaments, and that continues to shape the law in this area even though non domestic rates are today imposed on unoccupied hereditaments also. The core concepts underlying the assessment of rates are that they are a tax on property and not on persons or businesses, and that the hereditament is the unit of assessment. Each hereditament is separately identified in the rating list and separately assessed, notwithstanding that the same occupier may have more than one. The question at issue on this appeal is how different storeys under common occupation in the same block are to be entered in the rating list for the purpose of non domestic rating. Tower Bridge House is an eight storey office block in St Katherines Way in the London Borough of Tower Hamlets. In plan it is a U shaped building. The open space between the three wings is filled by a covered atrium, with a central lift shaft containing six high speed lifts serving the first to seventh floors of the building. There is a common reception area on the first floor serving the entire building. Mazars is a firm of chartered accountants which occupies the non common areas of the second and sixth floors under separate leases. The first, third, fourth and fifth floors are occupied by the solicitors Reynolds Porter Chamberlain. The seventh floor is divided between two other occupants. Where different parts of an office building are occupied by the same occupier, the ordinary practice of the valuer, and apparently of valuers generally, is to enter them as a single hereditament if they are contiguous, but as separate hereditaments if they are not. In accordance with this practice, in the 2005 rating list, the non common parts of the two storeys occupied by Mazars were entered as separate hereditaments. The non common parts of the first storey occupied by Reynolds Porter Chamberlain were entered as one hereditament, and the non common parts of the third, fourth and fifth floors occupied by the same firm were together entered as another hereditament. Each of the spaces separately occupied on the seventh floor was also entered as one hereditament. In February 2010, Mazars applied to merge the two entries for the spaces demised to them to form a single hereditament, with an allowance for fragmentation of 10%. They proposed that the merger should take effect from 26 November 2007, when they had begun to occupy the two floors, and contended that although physically separate, they were functionally inter dependent. The Valuation Tribunal for England agreed that the two entries should be merged, and allowed 5% for fragmentation. The Valuation Officer appealed to the Upper Tribunal (Lands Chamber). The case came before the President of the Chamber, who affirmed the Valuation Tribunals decision as to merger, but held that there should be no fragmentation allowance. The Valuation Officer has appealed to this court on the merger issue, but the disallowance of Mazars claim to a fragmentation allowance has left them with no financial interest in the outcome. They have not therefore appeared on the further appeal of the Valuation Officer to this court. We have, however, been assisted by Mr Forsdick QC, who appeared as the Advocate of the Court, and whose submissions have been of great value in elucidating a novel and difficult point. Hereditament is a somewhat archaic conveyancing term which as a matter of ordinary legal terminology refers to any species of real property which would descend upon intestacy to the heirs at law: see section 205(1)(ix) of the Law of Property Act 1925. In a conveyance, there is no problem about its bounds. They will be identified by the deed. But notwithstanding more than four centuries of experience, the question how a hereditament is to be identified for rating purposes remains in important respects unclear. Section 64(1) of the Local Government Finance Act 1988 defines a hereditament as anything which would before the passing of the Act have been a hereditament for the purposes of section 115(1) of the General Rate Act 1967. That means a property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list. The result, in the absence of further statutory definition, is that the meaning of hereditament is left to be elucidated by the courts in accordance with the principles underlying the rating Acts. The question which arises in a case like this is a very simple one. Given that non domestic rates are a tax on individual properties, what is the property in question? In principle, the fact that the same occupier holds two or more properties is irrelevant to the rateable status of any of them. He must pay rates separately on each. If the law is to be rational and consistent, the circumstances in which a continuous territorial block is to be treated as several separate properties or in which geographically separate properties are to be treated as one for rating purposes, must be determined according to some ascertainable and defensible principle. There are two principles on which these questions might be decided. One is geographical and depends simply on whether the premises said to constitute a hereditament constitute a single unit on a plan. The other is functional and depends on the use that is or might be made of it. The distinction was first applied in a series of rating cases in Scotland, where the question was essentially the same as the one which arises on this appeal, namely whether property should be assessed for local rates as a number of distinct heritable subjects or as unum quid (one thing). These cases establish that the primary test is geographical, but that a functional test may in certain cases be relevant either to break up a geographical unit into several subjects for rating purposes or to unite geographically dispersed units in unum quid. By far the commonest application of the functional test is in derating cases. In these cases, the functional test serves to divide a single territorial block into different hereditaments where severable parts of it are used for quite different purposes. Thus a garage used in conjunction with a residence within the same curtilage will readily be treated as part of the same hereditament, whereas a factory within the same curtilage which is operated by the same occupier may not be. There are, however, rare cases in which function may also serve to aggregate geographically distinct subjects. It is with this latter question that the present appeal is concerned. In Bank of Scotland v Assessor for Edinburgh (1890) 17 R 839, the Lands Valuation Appeal Court dealt with a number of rating appeals involving banks with office premises used in conjunction with nearby residential premises occupied by bank employees. There were three categories of residential premises: (i) dwellings which were in buildings separate from the banks offices; (ii) dwellings which were under the same roof as the commercial offices with internal communication between them; and (iii) dwellings which were under the same roof but with no internal communication between them, or none that was in use. Lord Trayner held that in case (i) the dwellings fell to be valued separately while those in cases (ii) and (iii) were unum quid with the commercial offices. Lord Wellwood agreed with him on cases (i) and (ii), but not on case (iii) which he would have directed to be separately valued. However, the underlying principle applied by both judges was the same. They applied the geographical principle, distinguishing cases where the various bank buildings formed a continuous territorial block from cases where they did not. In those cases where the different buildings did not form a continuous territorial block, they could be treated as unum quid only where there was a necessary functional connection between them. Lord Trayner said at p 843: In the case of the Commercial Bank I think the assessor has gone wrong in including the messengers houses as part of the bank. These houses form no part of the bank buildings; they are separate houses in the adjoining street, no doubt sufficiently near to the bank to be convenient and suitable for the bank servants, but still no part of the bank buildings, and therefore no part of the unum quid. The assessor in support of the view he has adopted referred to the case of MJannet, 10 R 32, but I do not think that that case has any application here. It was decided in that case that the conservatory, stables, and outhouses connected with a dwelling house were not to be separately valued, but were to be regarded and valued as a unum quid. I agree entirely with that decision. The different parts of the subject to be valued lay together, and were within the one enclosure; they were the different parts which together went to make up the establishment. But although the stables, for example, were held in that case to be part of the residence and to be so valued, it does not follow that stables are in every case to be valued as part of the residence to which they are an accessory. The stables of a gentleman in town are as much a convenience or accessory to his town residence as they are in the case of a country house. They are not, however, valued along with the town residence, although situated in the adjoining street or mews. They are not so connected as they were in the case of a country mansion or residence as to make it impossible or difficult to let them separately. In the same way the Commercial Bank could not well retain their bank premises, and let the part thereof devoted to official residence, but they could quite well and conveniently let the messengers houses in the street to persons entirely unconnected with the bank. I think these houses therefore should be separately entered and valued in the Valuation roll. Lord Wellwood, at p 844, divided the residential buildings into three categories: First Those which are entirely detached from the bank buildings, as in the case of the messengers houses of the Commercial Bank of Scotland. I agree with Lord Trayner that the yearly value of those houses should be separately entered in the roll. Second The houses which form part of the main building, but have no internal communication with the business premises. I am of opinion that the yearly value of those dwelling houses also should be separately entered. The fact that they form part of the same building with the business premises is not I think in this question material, and was not much relied on by the respondent. Structurally they are self contained premises, and could be let separately if this were desired. The respondent relied mainly upon the consideration that the houses form necessary adjuncts to the bank premises, and together with them fell to be valued as a unum quid. Dwelling houses for bank officials connected with the bank premises are no doubt usual and useful additions to banking premises, but it is not indispensable that they should form part of the bank buildings, as is shewn in the case of the messengers houses of the Commercial Bank of Scotland. If, as is sometimes the case, it did not suit any of the officials to reside in the dwelling houses, they could be let to a tenant with no more danger to the bank than if they were under a different roof. The case seems to me to be precisely the same as that with which we are familiar of the lower flat of a dwelling house being converted into a shop with a separate entrance. The upper flats may or may not be occupied by the shopkeeper himself as a dwelling house, but I take it that in any case the dwelling house and the shop are valued separately. Third Dwelling houses which are connected by internal communication with the business premises. In regard to those I have more doubt. In their actual state they are at present connected with the business premises by an internal door of communication, which is used not merely as a convenient short cut by the occupant of the dwelling house, but also by other bank officials and servants for the purpose of locking the outer door of the bank and other purposes. This means of communication could be easily cut off by building up or even locking the door. But that is not the present state of matters, and the question being doubtful, I am not prepared to differ from the opinion of Lord Trayner and the Valuation Committee as to those dwelling houses. The point on which Lord Traynor and Lord Wellwood differed, concerning premises which were contiguous but did not interconnect arose for decision a year later in Bank of Scotland v Assessor for Edinburgh (1891) 18 R 936. Lord Wellwood, sitting with Lord Kyllachy, repeated his view that they fell to be separately valued. Lord Kyllachy, said, at p 938: The test I think here is whether the houses in question are capable, not merely physically but, all conditions being considered, of being separately let, and having a separate rent or value attached to them. As regards the house occupied by the messenger, and which has no internal communication with the rest of the bank, I agree with the opinion of Lord Wellwood at the last court. I see no reason, at least none appears in the case, why, if the bank chose, this house should not be separately let to a suitable tenant, or assigned by way of pension to an old servant, or otherwise dealt with as a separate and independent dwelling. In University of Glasgow v Assessor for Glasgow 1952 SC 504, the Lands Valuation Appeal Court held that various buildings of the University which were physically separate from the main buildings, capable of being separately let and dispersed among buildings belonging to other proprietors, were properly entered on the valuation roll as separate subjects. Lord Keith, delivering the judgment of the court, treated the first Bank of Scotland case as authority for the geographical principle (p 509). He said at p 510: The common enclosure in many cases supplies a useful basis, or test, for a unum quid entry. It is the reason why a villa with its garden ground, or a mansion house with its policies, and any ancillary buildings are entered as a unum quid. The geographical conception has never been lost sight of in making up entries in the Valuation Roll, and in the case of John Leng & Co v Assessor for Dundee Lord Sands took occasion twice to refer to the ordinary geographical arrangement followed in making up the Valuation Roll. There may be cases where geographical unity has to be departed from, as where premises within what would otherwise be a single entity are separately let, or lands or buildings within a common enclosure are used for separate purposes. It is not perhaps possible to lay down general rules for all cases. Something must depend on particular circumstances. But the broad general principles are as stated. Midlothian Assessor v Buccleuch Estates Ltd [1962] RA 257 concerned geographically separate parcels of woodland and sawmills on separate sites, which were operated as a single business. Lord Kilbrandon, sitting in the Lands Valuation Appeal Court, observed at p 268: It has never yet been admitted that you can have a unit of valuation consisting of widely scattered heritable subjects connected only by some functional or commercial nexus, and I do not see why it should be. I do not think one is being merely old fashioned or obscurantist in insisting, in the conception of unum quid, on a fairly close physical relationship between what might be considered as parts of a commercial unit; one is, after all, attempting to value not a business but heritable subjects, and it may be that the precedents, which all insist on such a physical relationship, indicate a determination to preserve that essential distinction. Not only do I know of no precedent in valuation practice which could justify a functional approach to the problem such as is here sought to be made, but I am still of opinion that no such approach can in this case give a proper content to the whole words of the statute. This statement was cited with approval by Lord Slynn of Hadley, delivering the only reasoned speech in the English valuation case of Hambleton District Council v Buxted Poultry Ltd [1993] AC 369, 378. More recently, in Burn Stewart Distillers plc v Lanarkshire Valuation Joint Board [2001] RA 110, the Lands Tribunal for Scotland held that premises under common occupation but situated on opposite sides of a main road constituted two hereditaments. The tribunal observed, at pp 140 141: We consider that the emphasis on the geographical test is an aspect of recognition that lands and heritages are physical subjects. The underlying purpose is to provide a proper basis for a tax on property, not a tax on persons or businesses. Where the subjects share characteristics of function which, in a robust practical sense, support the use of a single term to describe the physical subjects, they can be treated as one unit. On the other hand, we are satisfied that the fact that certain heritable subjects function together as one business will, by itself, be insufficient to demonstrate that they are to be regarded as a unum quid in any physical sense. A business is not a concept based on physical or heritable factors. Entry in the roll is based on identification of heritable subjects. The fact that one business may need to occupy two separate physical subjects does not change the character of the subjects. It is clear that undue emphasis on a business connection as evidence of functional connection between subjects could lead to a distinction for rating purposes between a business whose operating units were in close proximity and those whose operating units were, perhaps only slightly, more remote. There is no basis in legislation for such a distinction. We see no basis in fairness for it. We are not persuaded that there is a consistent practice which would lead to that result. If there is, we see no need to follow it. In the present case there is a clear physical separation of the two subjects. They each have a clear curtilage and these curtilages are separated by a public road and pavements. Although, in a sense, little different from the interposition of a public road, the fact that the ratepayers do not have exclusive occupation of the land which provides their access to that public road and the intermittent presence at their gate of large, slow moving vehicles belonging to another occupier, tends to enhance the impression of separation of the two subjects. A test based on appearance and impression may properly be treated as part of the geographical test. The two subjects have no unifying visual characteristics. There is nothing to indicate that they are operated together, far less that the physical presence of one is essential to the function of the other. Their physical characteristic as two distinct subjects is supported by the consideration that there is no real doubt that the subjects could be let separately. I derive from these decisions three broad principles relevant to cases like this one where the question is whether distinct spaces under common occupation form a single hereditament. First, the primary test is, as I have said, geographical. It is based on visual or cartographic unity. Contiguous spaces will normally possess this characteristic, but unity is not simply a question of contiguity, as the second Bank of Scotland case illustrates. If adjoining houses in a terrace or vertically contiguous units in an office block do not intercommunicate and can be accessed only via other property (such as a public street or the common parts of the building) of which the common occupier is not in exclusive possession, this will be a strong indication that they are separate hereditaments. If direct communication were to be established, by piercing a door or a staircase, the occupier would usually be said to create a new and larger hereditament in place of the two which previously existed. Secondly, where in accordance with this principle two spaces are geographically distinct, a functional test may nevertheless enable them to be treated as a single hereditament, but only where the use of the one is necessary to the effectual enjoyment of the other. This last point may commonly be tested by asking whether the two sections could reasonably be let separately. Third, the question whether the use of one section is necessary to the effectual enjoyment of the other depends not on the business needs of the ratepayer but on the objectively ascertainable character of the subjects. The application of these principles cannot be a mere mechanical exercise. They will commonly call for a factual judgment on the part of the valuer and the exercise of a large measure of professional common sense. But in my opinion they correctly summarise the relevant law. They are also rationally founded on the nature of a tax on individual properties. If the functional test were to be applied in any other than the limited category of cases envisaged in the second and third principles, a subject (or in English terms a hereditament) would fall to be identified not by reference to the physical characteristics of the property, but by reference to the business needs of a particular occupier and the use which, for his own purposes, he chose to make of it. One would not expect the law to be any different when the identical questions arise for decision in England. However, confusion has been caused by the leading English case, which is the decision of the Court of Appeal in Gilbert v S Hickinbottom and Sons Ltd [1956] 2 QB 40. The facts in this case were very similar to those in Burn Stewart Distillers. A large industrial bakery comprised a number of buildings in two blocks separated by a street. The Lands Tribunal held, overruling the valuation officer, that they constituted a single hereditament, and its decision was affirmed by the Court of Appeal. Denning LJ held that geographically contiguous spaces were normally to be treated as one hereditament and geographically separate spaces as distinct, but that there were exceptional cases where their function required a different treatment. He gave as examples of the treatment of separate premises as one hereditament, the case where a road bisected a noblemans park, or agricultural land (in the days when agricultural land was rateable) or a golf course. The common feature of these cases, he thought (pp 49 50), was that the two properties on either side of the road are so essentially one whole by which I mean, so essential in use the one to another that they should be regarded as one single hereditament. Denning LJ appears to have derived this test from the decision in the University of Glasgow case, which he cited with approval. In my opinion his statement of the law was correct, although I would not necessarily endorse his examples, at any rate without more facts. The reason why Denning LJ nevertheless felt bound to dismiss the appeal was that the application of the test was a question of degree and therefore of fact (p 50), and if the Lands Tribunal thought that it was one hereditament they must have had their reasons. This seems a surprising conclusion on the facts recited in the report, but it has no bearing on the principle. Denning LJ was manifestly not suggesting that the Lands Tribunal was free to apply the test or not as they thought fit. The views of the other two judges are less clear. Morris LJ regarded it as undesirable to lay down general principles to govern what he regarded as a common sense assessment (p 52). The closest that he came to indicating in what circumstances geographically separate spaces might be regarded as a single hereditament was in the following passage, at p 52: buildings which, though not actually enclosed together or actually contiguous, are very near together and are not separated by the presence of other buildings and are being put to one common use may be regarded as comprising one hereditament. There can be no doubt that ordinarily very great weight will be placed upon what may be termed the geographical test. But the question is always one of fact and degree. The case before him he regarded as an exceptional one which depended on its particular facts (p 53), although it is not clear which particular facts made the difference, nor why. The third member of the court, Parker LJ, offered the following guidance, at pp 53 54: Whether or not premises in one occupation fall to be entered in the valuation list as one or more hereditaments depends upon a number of considerations. Without attempting an exhaustive list, the following considerations can be mentioned: (1) Whether the premises are in more than one rating area. If so, they must be divided into at least the same number of hereditaments as the rating areas in which the premises are situated. (2) Whether two or more parts of the premises are capable of being separately let. If not, then the premises must be entered as a single hereditament. (3) Whether the premises form a single geographical unit. (4) Whether though forming a single geographical unit the premises by their structure and layout consist of two or more separate parts. (5) Whether the occupier finds it necessary or convenient to use the premises as a whole for one purpose, or whether he uses different parts of the premises for different purposes. Whereas a consideration of questions (1) and (2) will in certain events conclude the matter one way or the other, the same does not, I think, result from a consideration of any one of the other questions alone. The conclusion, where the considerations of (1) and (2) are not decisive, must depend on the weight to be attached on the facts of each case to the other considerations. No doubt the most important of these other considerations is whether the premises form a geographical unit. Can they be ringed round on a map? Later, after citing the University of Glasgow case, he addressed the geographical and functional tests in the following terms, at pp 54 55: [The geographical test] is so often decisive that it is a convenient starting point to the inquiry, but it is not decisive in all cases. Thus, though the premises may form a geographical unit, the manner in which different parts are used may justify the premises being treated as several hereditaments; cf North Eastern Railway Co v Guardians of York Union [1900] 1 QB 733, 739 per Channell J. The appellants contention, however, is that though the functional test may justify treating a geographical unit as two hereditaments, it is wholly inapplicable where the premises occupied are geographically and structurally separate. There is no doubt, I think, that in the latter case little weight will ordinarily be given to any functional connexion, but it is another thing to say that it is irrelevant. If, as is admitted, a functional connexion is a relevant consideration when considering a geographical and structural unit, I fail to see why as a matter of law it cannot be considered at all when there are separate geographical and structural units. Each case must be considered on its particular facts, due weight being given to the degree and nature of the separation on the one hand and the importance of the functional connexion on the other. In these passages, Parker LJ clearly rejected the submission that function was irrelevant where premises were geographically separate. He was right to do so, because function may be relevant to the question whether separate premises must necessarily be enjoyed together, or are incapable of being reasonably let as separate units: see his proposition (2). Whether Parker LJ would have recognised the relevance of function to a case of geographically separate premises for any wider purpose is not clear. His proposition (5) suggests that he might have done, although he considered that even in such a case function was of little weight. In my opinion, the decision in Gilbert cannot be supported, at any rate on the grounds given, and the reasoning cannot be regarded as authority for very much. The only clear statement of principle is that of Denning LJ, which he does not appear to have applied. Mr Forsdick QC, the Advocate of the Court, submitted that the effect of the judgments of Morris LJ and Parker LJ was that it was for the tribunal of fact to determine not just the functional connection between separate premises, but the relevance of its conclusion on that point. I do not think that that clearly emerges from either judgment, but if it was indeed their view, then I respectfully disagree. Both the geographical and the functional principle require an evaluation of the facts by the tribunal of fact. However, the relationship between them is not itself a question of fact but a question of principle. The relevant principle is in my opinion summed up in the three propositions which I have extracted from the Scottish cases. The geographical test and the functional test are different and in some respects inconsistent. They cannot both operate in parallel unless there is some rational framework of principle for distinguishing their respective spheres. The English and the Scottish cases are agreed that the potential inconsistency is to be resolved by acknowledging the primacy of the geographical test and the subordinate character of the functional test. But what does this mean? The answer to the question must surely be supplied by the tribunal of law which posed it. To treat the relationship between these two incommensurate tests as no more than a question of fact and degree is to leave to the tribunal of fact what amounts to a discretion to give the functional test such weight as they choose as against the geographical one, and to allow the business choices of the occupier to determine the bounds of the hereditament. This would in turn make the basis of assessment more opaque and less consistent as between different occupiers. It would be a poor substitute for clear and principled rules, capable of uniform application. Until the present case came before the Valuation Tribunal and the President of the Lands Chamber, there had been no decision on how these principles were to be applied to cases in which the same occupier occupied different storeys within the same building. The only case which was arguably in point was British Railways Board v Hopkins (Valuation Officer) [1981] RA 328, in which the Lands Tribunal treated different storeys under common occupation as constituting a single hereditament, whether they were contiguous or not. But the decision turned on other issues and there was no discussion of this particular point. On the other hand, valuation officers had for some years adopted the practice of treating contiguous storeys under common occupation as one hereditament, but non contiguous storeys as distinct hereditaments. As far as the case law is concerned, this was therefore an unresolved question when the present case came before the Valuation Tribunal and then the President of the Lands Chamber. The President accepted Denning LJs formulation in Gilbert as applied to premises which were horizontally separated, in the sense that they were in different buildings or different territorial blocks. It will be apparent from what I have already said that I agree with him about this. But he thought that premises which were in the same building but were vertically separated were different. At para 20, he observed: I agree with Mr Woolway, and with the submissions made by Mr Kolinsky on the point, that in identifying hereditaments within a modern office building the concept of the curtilage has no useful part to play, and is far removed from what Denning LJ had in mind when formulating his general rules in Gilbert v Hickinbottom. The Valuation Tribunal, having concluded that the two floors were within the same curtilage, then explored whether there was an essential: functional link between them. In so doing it was clearly misapplying Denning LJs general rules, where the question of the essential functional link only arose in the case of premises that were not within the same curtilage but were separated by a highway, and I do not think that an essential connection should be treated as a criterion in the present case. I agree in any event with the Valuation Officer that a detailed inquiry into the functional relationship between parts of a building in the same occupation is of no assistance in the present case and is positively undesirable. It seems to me inappropriate to explore the degree of functional interaction between two floors in common occupation. Any such process would tend to be detailed and time consuming (as it was in the present case) and always liable to reassessment as the occupier made changes in the way that the space was utilised. The fact that the floors of office premises are in the same occupation for the purposes He concluded, at para 29: of the occupying firm is by itself; in my judgment, a significant pointer. The proper approach in a case such as this, therefore, in my judgment, is to treat the floors occupied within the building by the same occupier as a single hereditament. Since the occupier will be occupying the floors as offices for the purposes of his business, it is not in my view necessary to investigate the functional interrelationship between the floors at any particular time. In the present case, therefore, floors two and six are properly to be entered as a single hereditament, as the Valuation Tribunal determined; and the Valuation Officers appeal on this point fails. In effect, therefore, the President applied neither a geographical test nor a functional one. He declined to ask himself whether the possession of both storeys was necessary to the enjoyment of either, nor whether they could be let separately, nor whether they intercommunicated (the answers would clearly have been No, Yes and No respectively). He quite rightly regarded the way in which a particular occupier chose to use the premises together as irrelevant. Yet at the same time he considered that when separate premises were located in the same building, it was wrong to apply a geographical test either. He therefore declined to ask himself Parker LJs question, whether the alleged single hereditament could be ringed round on a plan (the answer would have been No). The President of the Lands Chamber was labouring under the difficulty that he was bound by Gilbert, and therefore obliged to make more sense of it than the judgments really permit. At any rate, I am unable to accept his reasoning. It introduces an arbitrary distinction between horizontal and vertical separation which responds to no discernible principle. In order to pass from level 2 to level 6, it is necessary to leave the demised premises on level 2, enter the common parts over which Mazars had a licence but no right of possession, and to ascend in a lift to the common parts on level 6 before entering the other premises. This is no different, either geographically or functionally, from leaving a building which is exclusively occupied by the ratepayer, crossing land belonging to someone else and entering another building under the same occupation. The President remarks that the lifts were fast and the move from one level to the other simple, but why should that be any more relevant than the fact that the separate building was only a short distance away or could be reached at high speed by car? In my opinion there is no rational reason to regard Denning LJs test as any less applicable to distinct premises within the same building than it is to different buildings within the same urban park. It is clear that the President was strongly influenced by the Valuation Officers acceptance that vertically or horizontally contiguous spaces in the same building fall to be treated as one hereditament, so that if Mazars had occupied levels 2 and 3, instead of levels 2 and 6, the result would have been different. This concession, as I have pointed out, is not necessarily correct unless the two spaces directly intercommunicate. For present purposes, however, it is enough to note that there is nothing anomalous about the notion that the result is different when the spaces are not contiguous and do not directly intercommunicate. It simply shows that the same occupier has two distinct taxable properties, just as he would have if they were on opposite sides of the street. For these reasons I would allow the Valuation Officers appeal, set aside the orders of the Valuation Tribunal and the Upper Tribunal and declare that the premises demised to Mazars on the second and sixth storeys of Tower Bridge House are to be entered in the rating lists as separate hereditaments. LORD GILL: (who agrees with Lord Sumption) I agree that this appeal should be allowed. It seems that in this case the decision whether the ratepayers premises constitute one hereditament or two does not affect the overall value of them; but in other cases the effect of the decision may be significant (eg Trunkfield (Valuation Officer) v Camden London Borough Council [2011] RA 1). The appeal is important from that practical point of view; but its principal importance is that it requires us to examine, in a modern context, the principles by which the hereditament is to be identified, and to do so in a case that does not involve de rating. The Valuation Tribunal for England (VTE) held that the premises were a single hereditament on the view that the two floors were within a single curtilage and that the integrated use of them was essential to the efficiency of the ratepayers business as a whole. In the Upper Tribunal (Lands Chamber) the President (Mr George Bartlett QC) agreed with the decision of the VTE, subject to a reduction of the valuation; but he took a different approach. He was not persuaded that the essential functional link between the two parts, on which the VTE had relied, should be the criterion. He considered that a detailed inquiry into such a question would be positively undesirable (para 20). He considered it significant that the two floors were in single occupation, and that in the context of a modern office building the concept of the curtilage had no place. His decision turned on the facts relating to the physical nature of the premises and the purposes for which the ratepayer occupied them, there being no significant difference from the occupiers point of view between floors that were adjoining and floors that were separated. The Court of Appeal dismissed an appeal against that decision, essentially for the reasons given by the President of the Tribunal. The decision of the Court of Appeal in Gilbert v S Hickinbottom and Sons Ltd [1956] 2 QB 40 has been central to this case. It has stood for nearly 60 years. The effect of it was that premises of different kinds situated on opposite sides of a highway were to be regarded as one hereditament where the ratepayer had integrated its use of one with its use of the other. It is plainly an unsatisfactory decision. There is no common thread of reasoning in the opinions of the three judges. I cannot understand why Denning LJ (as he then was), who clearly favoured the geographical test and found three cases based on it that commended themselves to his mind, one of them being the Glasgow University case [1952] SC 504, deferred to the conclusion of the Lands Tribunal to the contrary effect, especially when it was not clear to him why the Tribunal had distinguished those cases from the case that was under appeal. In the result, the Gilbert decision has been understood to mean that whether separate premises constitute a single hereditament may depend on the use to which the ratepayer puts them: in short, that geographical separation may in some circumstances be outweighed by functional integration. The Gilbert case was decided on the definition of hereditament in section 68 of the Rating and Valuation Act 1925 (the 1925 Act); namely: any lands, tenements, hereditaments or property which are or may become liable to any rate in respect of which the valuation list is by this Act made conclusive In section 115(1) of the General Rate Act 1967 (the 1967 Act), which now applies, hereditament means property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list. Counsel for the valuation officer suggested that that the Gilbert decision should be distinguished because it was decided on the definition of hereditament in the 1925 Act, which in counsels submission was materially different from the present definition. I do not accept that. The 1967 Act was a consolidating measure. It was reasonable in such a consolidation to recast the former definition, which suffered from circularity. In my view the reference to a unit of property which is, or would fall to be, shown as a separate item in the valuation list simply means a unit of property that would constitute a separate hereditament in accordance with established legal principles. I agree with the Court of Appeal on this point. If I am right in the view that section 115(1) has not changed the law on the point, it follows that the decision in Gilbert cannot be side stepped in this way. The real point on which the Gilbert case should be distinguished is that it concerned industrial de rating. In Gilbert and in the other de rating cases that have been referred to in this appeal, it was to the advantage of the ratepayer if ancillary but separate premises could be said to be part of one hereditament. If they were, the benefit of de rating was applied to the whole. Inevitably in such cases ratepayers emphasised the functional connection. The influence of that consideration is immediately apparent in the Gilbert case and, in similar circumstances, in the Scottish case of John Leng and Co v Assessor for Dundee 1929 SC 315. It can also be seen in the unsuccessful argument for the ratepayer in the Glasgow University case, where the University enjoyed partial exemption from local rates. De rating cases are not concerned with valuation for rating. They are about the remission of a liability for rates based on the use that the ratepayer makes of the property. On the other hand, valuation for rating is concerned with physical premises. It cannot be right that geographically separate premises should be valued as one hereditament simply because the ratepayer chooses to link his use of one with his use of the other. To modify the geographical test with considerations of functionality, in this sense of the word, is to add to a clear and objective test the uncertainty of a test that is dependent on whatever happens to be the ratepayers choice of use. Numerous cases have been referred to by counsel for the appellant and by the amicus that purport to apply the Gilbert decision. It would be an unprofitable exercise to go through them one by one. They merely demonstrate the various approaches that courts and tribunals have taken in the attempt to deduce a coherent principle from the Gilbert case. Notable among these cases is Trunkfield (Valuation Officer) v Camden London Borough Council [2011] RA 1. It concerned two adjoining office buildings. The ratepayers occupied one building in its entirety. In the other, they occupied the third, fifth and sixth floors and part of the fourth. In the valuation list there was a single assessment for the first building and four separate assessments for the floors occupied by the ratepayers in the other building. The Valuation Tribunal determined that the five assessments should be merged. In his appeal to the Upper Tribunal (Lands Chamber) the valuation officer contended that there should be two assessments, one for the first building and one for the four floors occupied in the other. The President allowed the appeal and directed that the list should be amended as the valuation officer proposed. If, as I assume, there were no means of internal communication between any of the four floors in the second building, the question in this appeal would have arisen; but in the event the valuation officers position precluded any discussion of that question. In my view the valuation officers position was unsound. Section 67 of the 1967 Act requires the valuation officer inter alia to maintain a valuation list for each rating area in accordance with the provisions of Part V of the Act. In Scotland, the equivalent obligation of the assessor is to make up a valuation roll listing all of the lands and heritages in his valuation area (Local Government (Scotland) Act 1975, section 1). The expression lands and heritages dates back to the Lands Valuation (Scotland) Act 1854 (17 & 18 Vict c 91). Although the law of valuation for rating is governed in Scotland by different legislation, the essential point is identical in both jurisdictions. It is to identify the unit of valuation. In my view, there is no reason why the two jurisdictions should diverge on the principles of the matter. On the contrary, it is desirable that they should coincide. In the law of Scotland, the identification of the valuation unit, or the unum quid, rests on a geographical test. The history of the matter begins with the decision of the Lands Valuation Appeal Court in Bank of Scotland v Assessor for Edinburgh (1890) 17 R 839. That case concerned a number of bank buildings and the associated dwellinghouses of the staff who worked in them. In some cases, those in the third category referred to by Lord Sumption (para 7) the dwellinghouse was part of the bank building itself, but had no internal means of communication with the bank premises. Lord Trayner thought that in those cases the whole building should be valued as a unum quid. Lord Wellwood thought that the dwellinghouse and the bank premises should be valued as separate lands and heritages. In the following year, the Lands Valuation Appeal Court reconsidered the case. On that occasion the court, consisting of Lord Wellwood and Lord Kyllachy, decided that where the bank premises and the staff dwellinghouse were not internally connected, they should be entered in the roll as separate lands and heritages (Bank of Scotland v Assessor for Edinburgh (1891) 18 R 936). In my view, that was correct. The absence of an internal connection between the residential unit and the bank premises meant that to reach the bank the occupier of the dwellinghouse had to leave the building and go by the street to the public entrance of the bank. The question arose again in Glasgow University v Assessor for Glasgow 1952 SC 504. In that case the ratepayer, in seeking the benefit of partial de rating, argued that there should be a single entry in the roll comprehending the main University buildings as planned and built as such, and with later additions; together with a diverse group of peripheral University buildings dispersed among the buildings of other proprietors. This last group included, for example, a laboratory and a reading room that was on a separate site on the other side of a main road. The Lands Valuation Appeal Court concluded that the main buildings lay within the University enclosure proper, being structurally and geographically part of a common whole, and should be entered in the roll as a unum quid. On the other hand it considered that while the peripheral buildings were functionally part of the University, they were geographically separate and should be entered as separate lands and heritages. That decision reaffirmed the primacy of the geographical test. The geographical test was strictly applied by the Lands Valuation Appeal Court in Edinburgh Merchant Co Education Board v Assessor for Lothian 1982 SC 129 in a case where two schools on opposite sides of a main road had come to be occupied as one. One set of buildings was situated in playing fields. The other was in a set of converted terraced houses. Access from one to the other was by a path over a railway bridge and a lane. Although they were occupied as a functional unit, the court concluded that there was no geographical unum quid. The Glasgow University case and the Gilbert case were considered by the Lands Tribunal for Scotland in Burn Stewart Distillers plc v Lanarkshire Valuation Joint Board [2001] RA 110. In that case the ratepayer contended that there should be a single entry in the roll for premises situated on opposite sides of a main road. On one side the premises consisted of warehousing and the main office accommodation. On the other, there was a whisky bottling complex and distribution plant with ancillary storage space and small proportion of office and cloakroom space. On this side there was a canteen used by staff from both premises. Materials were moved between the two premises by fork lift trucks which traversed the public road. A concrete communications conduit linking the two premises ran under the main road. The main office accommodation constituted the head office of the ratepayer and dealt with many matters unrelated to the bottling and distribution plant, including worldwide marketing. The Tribunal, chaired by Lord McGhie, applied the geographical test and held that it was not satisfied. The Burn Stewart decision was referred to in argument in Trunkfield (Valuation Officer) v Camden London Borough Council (supra); but was not referred to in the judgment. I agree with the three general principles that have been stated by Lord Sumption (at para 12). It is important to emphasise that the reference to functionality in the second and third of these principles is not a reference to the use that the ratepayer chooses to make of the premises. It is a reference to a necessary interdependence of the separate parts that is objectively ascertainable. For example, such an interdependence is to be found between a tourist attraction in a castle and the associated gift shop in the castle grounds (Roxburghe Estates v Assessor for Scottish Borders Council [2004] RA 15). Conversely, functionality in this sense may also be relevant where premises that are apparently geographically linked are wholly dissociated; for example, the hotel and the engine sheds at a railway station (North Eastern Railway Co v Guardians of York Union [1900] 1 QB 733). To the three general principles that Lord Sumption has laid down, I would add only the comment that in the application of them, the concept of fairness, alluded to in this case by the President of the Tribunal, has no place. In my opinion, these general principles provide straightforward and workable guidance that is consistent with the underlying theory of rating law that rates are a tax on a ratepayers property and not on a ratepayers business (Midlothian Assessor v Buccleuch Estates Ltd [1962] RA 257, Lord Kilbrandon at p 268). It was suggested on behalf of the valuation officer that in the application of the geographical test the decisive criterion is contiguity. That is an extreme position that I do not accept. Properties that are discontiguous but nonetheless geographically linked, may constitute one hereditament if the occupation of one part would be pointless without the occupation of the other. The Glasgow University case is an example. In that case it was clearly right that an assemblage of academic buildings constituting the core of the university campus should be valued as a unum quid. Roxburghe Estates v Assessor for Scottish Borders Council (supra) is another example. In that case the lands and heritages consisted of exhibition rooms within a castle with an adjacent gift shop and restaurant, a coffee shop and parts of the gardens and ground. The gift shop and the restaurant owed their existence to the castle; whereas the coffee shop was situated outside the pay wall and had an independent existence that linked it more closely with a nearby garden centre. It was not part of the unum quid. On the facts of the present case, I fail to see why premises on separate floors of a building, where the only access from one to the other is through the common parts, should be regarded as one hereditament. In reaching that view, the President has misdirected himself. He has lost sight of the geographical test. He has been influenced by the use that the present occupier has chosen to make of the premises and has introduced an irrelevant and confusing consideration of fairness. It was suggested in the discussion in this case that if the two parts of the office had been on adjacent floors they could have been treated as one hereditament on the view that they were contiguous in the vertical rather than the horizontal plane. That, in my view, is a contrived argument. The disjunction of the two parts of the ratepayers offices lies in the fact that the only access between them is through the public part of the building. The same disjunction would apply even if they were on adjacent floors. In that event, I would have taken the view that they remained separate hereditaments. LORD NEUBERGER: (who agrees with Lord Sumption and Lord Gill) I add a few words of my own, partly because we are disagreeing with the experienced and respected President of the Lands Chamber, whose decision was unanimously upheld by the Court of Appeal, and partly because I have found this a difficult point in the light of the unsatisfactory state of the English and Welsh case law. This case concerns the issue whether two physically separate pieces of property, namely the second and sixth floors of an office building, can be a single hereditament for rating purposes because they are occupied by, and let to, the same person in connection with the same business. The statutory definition of hereditament in section 115(1) of the General Rate Act 1967 states that it is such a unit of property which is, or would fall to be, shown as a separate item in the valuation list. While, at least to some extent, that is a circular definition, it does contain the expression unit of property, which carries with it the notion of a single piece of property, what in Scots law is called unum quid. And, in that connection, I entirely agree that there should be no difference of approach between Scottish and English law on the issue raised on this appeal. Normally at any rate, both as a matter of ordinary legal language and as a matter of judicial observation, a hereditament is a self contained piece of property (ie property all parts of which are physically accessible from all other parts, without having to go onto other property), and a self contained piece of property is a single hereditament. As the Scottish Lands Tribunal said in Burn Stewart Distillers plc v Lanarkshire Valuation Joint Board [2001] RA 110, 140, the emphasis on the geographical test is an aspect of recognition that lands and heritages are physical subjects. Thus, two separate self contained buildings, even if sharing a common wall, would not be expected to be a single hereditament but two hereditaments. And a building no part of which was self contained would be expected to be a single hereditament. At first sight, it might appear that whether certain premises constitute one hereditament or two hereditaments should not depend on how those premises are occupied. To quote again from Burn Stewart, [a] business is not a concept based on physical or heritable factors (p 141). Of course, occupation is traditionally a central issue in rating law, but at least primarily for the purpose of determining who, if anyone, is in rateable occupation. On the face of it, however, it may be thought that there should be no logical connection between the identification of the boundaries or extent of a hereditament and the identification of the rateable occupier of that hereditament. Nonetheless, on further reflection, it can be seen that the occupation of premises can in some circumstances serve to control their status as one or more hereditaments. An office building let to and occupied by a single occupier would be a single hereditament, but if the freeholder let each floor of the building to a different occupying tenant, retaining the common parts for their common use, then each floor would be a separate hereditament. Furthermore, it is well established that premises are not merely liable to have their rateable value assessed, but also to have their status as a hereditament assessed, by reference to the machinery, plant and other structures which have been placed in or on them, whether by the occupier or someone else, sometimes even if the structure retains its character as a chattel see per Lord Radcliffe in London County Council v Wilkins (Valuation Officer) [1957] AC 362, 378. The problem thrown up by this appeal is how far what I have described as the normal position in para 47 above, ie what Lord Gill has called the geographical test, should be modified by a particular occupational arrangement. In my view, that question should, if possible, be answered in a way which is not only principled, but which is as clear and practical as possible. That is because Valuation Officers and others concerned with rating are entitled to expect to know what approach to adopt when such an issue arises, and the approach should be one which is tolerably easy to apply. However, as is not unusual, clarity and practicality are to some extent in conflict, and, unsurprisingly in the complex and multi faceted world of land and buildings, there cannot be complete certainty. Where premises consist of two self contained pieces of property, it would, in my view, require relatively exceptional facts before they could be treated as a single hereditament. The mere fact that each property may have the same occupier should, at least normally, make no difference. As Lord Keith said in Glasgow University v Assessor for Glasgow 1952 SC 504, 509, [i]n the ordinary case the question whether separate buildings, or parts of buildings, should be entered in the Roll as unum quid falls to be decided primarily from the geographical standpoint. However, it is possible to conceive of facts which would justify a different conclusion. Thus, if one property could not sensibly be occupied or let other than together with the other property, I think that the two properties could, and indeed normally should, be properly treated as a single hereditament. As Lord Keith went on to say in Glasgow University at p 510, quoting Lord Trayner in Bank of Scotland v Assessor for Edinburgh (1890) 17 R 839, 843, for two separate properties to be treated as a single hereditament, it is not enough that one of the properties is a convenience or accessory for the other: it would have to be impossible or difficult to let them separately. Strict necessity is not the test. As Lord Sumption says, his three tests set out in para 12 (with which I agree) have to be applied with professional common sense to the facts of each case. A golf course, a shipyard, a distillery or a factory which is, in each case, divided by a public road could properly be treated as a single hereditament. These are all examples given in the decision of the Lands Tribunal for Scotland in Burn Stewart Distillers plc v Assessors for Lanarkshire Valuation Joint Board [2001] RA 110, where it was rightly said that, while the fact that certain heritable subjects function together as one business will, by itself, be insufficient to demonstrate that they are to be regarded as a unum quid in any physical sense, [i]t is impossible to lay down clear rules which will apply in all cases. The Lands Tribunal also suggested that, while physical separation of subjects would normally prevent them from being a single hereditament (to use the English expression), [w]here the subjects share characteristics of function which, in a robust practical sense, support the use of a single term to describe the physical subjects, they can be treated as one unit (p 141). That is well illustrated by the unreported 1982 Scottish case of Lothian Regional Council v Assessor for Lothian Region whose effect is summarised in these terms in Armour on Valuation for Rating (looseleaf, August 2014 ed), para 10 05: [I]t was held to be competent for the assessor to make a single composite entry in the roll in respect of 923 bus shelters maintained by the appellants throughout the region, where the work involved in making separate entries would have been very onerous and unnecessary, there being no suggestion of any prejudice suffered by the appellants as a result. The cases summarised in the English text book Ryde on Rating and the Council Tax (looseleaf, July 2014 ed), paras C 210 and 211, suggest that the most frequent type of case where the question of whether two separate properties are to be treated as a single hereditament arises in connection with industrial or retail premises. Rydes summary of the effect of those cases also suggests that, on the current understanding of the law, the question is one to which the answer is unpredictable following the unfortunate decision of the Court of Appeal in Gilbert v S Hickinbottom & Sons Ltd [1956] 2 QB 40 (which I shall discuss in more detail below). Indeed, the question is almost treated as an issue of discretion for each first instance tribunal, which is an approach that is both unprincipled and unclear. The Scottish cases cited in Armour demonstrate a far more satisfactory state of affairs. There is a risk, as I have mentioned, of being too prescriptive in generalising about an issue which, as a matter of fact, can apply to cases which are rather different from the present case (which of course concerns floors in an office building). However, it seems to me that a principled approach to all premises, whether used or recorded as office, retail, industrial, warehouse, recreational or any other purpose, which accords with the law as I understand it to have been laid down in Scottish courts, is as follows. In order to decide whether two separate self contained units of property constitute a single hereditament, one does not so much look at the actual occupation or actual use of those properties, although that might provide useful evidence in some marginal cases. Rather one looks at the relationship between the two properties, as discussed in paras 51 53 above. And, when considering the two properties in this connection, one takes into account the plant, machinery, and other fixtures (including some chattels) which form part of the property for all rating purposes see the London County Council case cited above. In my opinion, two separate self contained floors in the same office building, whether or not they are contiguous, cannot be said to satisfy such a test, at least in the absence of very unusual facts. Once they cease to be self contained, because, say, an internal means of access (eg an internal staircase) is constructed, so that each floor is accessible from the other without going onto other property eg the common parts of the building then the two hereditaments will normally be treated as have been converted into one larger hereditament. Unless there is such a means of access, each floor is self contained from the other, and each can be occupied and let independently of the other. Accordingly, I can see no good reason why they should be treated as a single hereditament merely because they happen to be let to and occupied by the same tenant. It is true that they are in the same building, but it is hard to see why a different result should obtain if, for instance, the respondents had occupied the second floor of Tower Bridge House and the sixth floor of an adjoining building. The courts below considered that it was artificial and unfair to treat two self contained floors in common occupation in the same building differently depending on whether or not they were at consecutive levels. There is considerable force in that, but their error was to assume that the two floors should be treated as a single hereditament if they were at consecutive levels. As explained, if they are each self contained from the other, then, absent very unusual facts, they should be separate hereditaments. Furthermore, closer consideration suggests that, particularly in modern buildings, two consecutive floors are not actually contiguous to each other: there will often be a void between them, which contains servicing equipment and is in the possession and occupation of the landlord of the building. Absent a communicating internal staircase or lift, passing through the void, two consecutive floors in the same building would be physically separated in much the same way as two non consecutive floors. I do not doubt that there will be cases where the guidance given on this appeal will be difficult to apply with any confidence. However, it is hard to believe that we will be leaving the law of England and Wales on this topic in a less satisfactory state than it was as a result of Gilbert, although it is only fair to add that the judgments in that case contain some accurate and helpful dicta. At p 50, Denning LJ correctly expressed approval of earlier Lands Tribunal cases where it had been held that properties on different sides of the road in the same occupation should normally be assessed as separate hereditaments. However, he dismissed the appeal against a decision to the opposite effect, on the ground that there must be some distinction because the chairman of the Lands Tribunal had those cases well in mind, and he had the advantage of a view an analysis which it is tempting to describe as an abdication of an appellate judges responsibility. In Gilbert, Denning LJ also stated the correct test, namely where the two properties so essential in use the one to another that they should be regarded as one single hereditament (pp 49 50); however, that test is to be assessed objectively and not by reference to the needs or use of the particular occupier, and it is by no means clear to me that Denning LJ was saying that. Morris LJ at p 52 seems to have thought that the actual use was important, but it is not clear what weight he thought it should be given, although it led him to join in wrongly dismissing the appeal. Parker LJ set out a number of factors at pp 53 54, and (correctly) said that if premises consist of two properties which are not capable of being separately let , then the premises must be entered as a single hereditament. However, he also identified a number of other factors, which may be of more questionable value, as is supported by the fact that he also wrongly joined in dismissing the appeal. While there are therefore undoubtedly dicta in Gilbert which may be right, it is difficult to know precisely what to make of it. At best, it is an unhelpful decision, and the actual result was wrong: the appeal should have been allowed. The Scottish cases, which are more fully considered by Lord Sumption and Lord Gill, are far more satisfactory, and, as Lord Gill says, it is very hard to understand how Denning LJs approval of them can be reconciled with his dismissing the appeal in Gilbert. As it is, for the reasons given by Lord Sumption, and indeed for those given by Lord Gill, I would allow this appeal. LORD CARNWATH: (agrees with Lord Sumption) I agree that the appeal should be allowed for the reasons given by Lord Sumption. The treatment of contiguous floors in single occupation (which is addressed in the judgments of Lord Neuberger and Lord Gill) is not before us for decision, and I would prefer not to express any firm view. The Valuation Officers practice of treating such cases as single hereditaments, even if in part concessionary, seems to me unobjectionable if it avoids narrow factual disputes about degrees of connection. LORD TOULSON: (who agrees with Lord Sumption, Lord Gill and Lord Neuberger) I agree with the judgments of Lord Sumption and Lord Neuberger. I agree also with the judgment of Lord Gill, subject to the qualification that I am not sure about distinguishing Gilbert on the basis that it was a de rating case. But there is no need for me to say any more on that point, since I entirely agree with Lord Gills description of Gilbert as plainly an unsatisfactory decision.

Local authority rates are payable in respect of the rateable occupation of hereditaments. Rates are a tax on property and hereditaments are the units of assessment. The statutory definition of hereditament in section 115(1) of the General Rate Act 1967 states that it is such a unit of property which is, or would fall to be, shown as a separate item in the valuation list. Where different parts of an office building are occupied by the same occupier, the ordinary practice of the valuer is to enter them as a single hereditament if they are contiguous, but as separate hereditaments if they are not. The property in question in this appeal, Tower Bridge House, is an eight storey office block in St Katherines Way, London. Mazars, a firm of chartered accountants, occupies the second and sixth floors of the building under separate leases. These floors are separated by common areas in the building and were entered in the 2005 rating list as separate hereditaments. In February 2010 Mazars applied to the Valuation Tribunal for England (VTE) to merge the two entries to form a single hereditament. The VTE agreed that the two entries should be merged. The Valuation Officer, Mr Woolway, appealed to the Upper Tribunal (Lands Chamber) on the grounds that the properties were two separate hereditaments. The Upper Tribunal confirmed that the premises could be treated as one hereditament. The Court of Appeal dismissed Mr Woolways appeal. Mr Woolway appeals to the Supreme Court. The Supreme Court unanimously allows the appeal. Lord Sumption gives the leading judgment and Lord Neuberger, Lord Carnwath and Lord Gill give separate concurring judgments. The question in this appeal is how different storeys under common occupation in the same block are to be entered in the rating list for the purpose of non domestic rating [1]. Three broad principles apply in answering this question. The primary test is geographical, being based on visual or cartographic unity. Contiguous spaces will normally possess this characteristic, but unity is not simply a question of contiguity. If contiguous units do not intercommunicate and can be accessed via other property of which the common occupier is not in exclusive possession, this will be a strong indication that they are separate hereditaments. Second, where two spaces are geographically distinct, a functional test may nevertheless enable them to be treated as a single hereditament, but only where the use of the one is necessary to the effectual enjoyment of the other. Third, the question whether the use of one section is necessary to the effectual enjoyment of the other depends not on the business needs of the ratepayer but on the objectively ascertainable character of the premises. This calls for a factual judgment on the part of the valuer, exercising professional common sense [12]. In the present case neither a geographical nor a functional test was applied [20]. The appeal is allowed therefore. The orders of the Valuation Tribunal and Upper Tribunal are set aside and the Court makes a declaration that the premises demised to Mazars on the second and sixth storeys of Tower Bridge House are to be entered in the rating lists as separate hereditaments [22]. In his concurring judgment, Lord Gill emphasises that the reference to functionality in the tests articulated by Lord Sumption does not refer to the use which the ratepayer chooses to make of the premises. Rather, it is a reference to the necessary interdependence of the separate parts of the property that is objectively ascertainable [39]. The concept of fairness has no place in the application of the three principles laid down by Lord Sumption, which provide straightforward and workable guidance [40]. Contiguity is not the decisive criterion in the geographical tests. Properties that are discontinguous but geographically linked may constitute one hereditament if the occupation of one part would be pointless without the occupation of the other [41]. The discontiguity between the offices in question lies in the fact that the only access between them is through the public part of the building, not whether they are vertically or horizontally adjacent [43]. Lord Neuberger, concurring with Lord Sumption and Lord Gill, concludes that a hereditament is a self contained piece of property, namely all parts of which are physically accessible from all other parts, without having to go onto other property [47]. Where premises consist of two self contained pieces of property it would require relatively exceptional facts before they could be treated as a single hereditament. The mere fact that each property may have the same occupier should, normally, make no difference [51]. If, however, one property could not be sensible occupied or let other than with the other property, they should normally be treated as single hereditament [52]. In order to decide whether two separate self contained units of property constitute a single hereditament the relationship between the two properties should be considered. The plant, machinery and other fixtures which form part of the property for rating purposes are relevant to this consideration [55]. Two separate self contained floors in the same office building, whether or not they are contiguous, cannot be said to constitute a single hereditament, at least in the absence of very unusual facts. Once they cease to be self contained, so that each floor is accessible from the other without going onto other property, then the two hereditaments will normally be treated as having been converted into one larger hereditament [56]. Lord Carnwath agrees with the judgment of Lord Sumption but does not express a concluded view on the treatment of contiguous floors [62].

In December 2006, Mrs Staveley died. Shortly before her death, she had transferred funds from her existing pension scheme into a personal pension plan (PPP). She did not take any pension benefits at all during her life and, in those circumstances, a death benefit was payable under the PPP. Mrs Staveley nominated her two sons as beneficiaries of the death benefit, subject to the discretion of the pension scheme administrator and, after her death, the death benefit was paid to them. Her Majestys Revenue and Customs (HMRC) determined that inheritance tax (IHT) was due, on the basis that both the transfer of funds into the PPP, and Mrs Staveleys omission to draw any benefits from the plan before her death, were lifetime transfers of value within section 3 of the Inheritance Tax Act 1984 (IHTA). The issue in this appeal is whether they were right to take that view. The appellants are the three executors of Mrs Staveleys estate (her two sons, and a solicitor, Mr Parry). They appealed to the First tier Tribunal (Tax Chamber) (the FTT) against HMRCs determination. The appeal was partially successful in that the FTT held that the transfer of funds into the PPP (the transfer) was prevented from being a transfer of value by section 10(1) IHTA because, putting it shortly, it was not intended to confer any gratuitous benefit on anyone. However, the FTT dismissed the appeal in relation to Mrs Staveleys omission to draw benefits from the PPP (the omission), holding that the sons estates had been increased by the omission, and section 3(3) required that Mrs Staveley be treated as having made a disposition at the latest time when she could have drawn those benefits. Each side appealed to the Upper Tribunal (Tax and Chancery Chamber) (the Upper Tribunal). The FTTs decision that the transfer into the PPP fell within section 10(1) was affirmed. The FTTs decision in relation to the omission to draw benefits was reversed, on the basis that section 3(3) did not apply because it was not the omission that had increased the sons estates, but the discretionary decision of the pension scheme administrator to pay the death benefits to them. Accordingly, no tax was payable on either transaction. On HMRCs appeal to the Court of Appeal, the court held that both the transfer and the omission gave rise to a charge to tax. The executors now appeal against both of those decisions. The issues that require determination concern (1) (in relation to the transfer) the proper operation of section 10 of the IHTA, and its application to the facts of this case and (2) (in relation to the omission) the proper construction of section 3(3) of the IHTA, and whether, on the facts of this case, there was a material break in the chain of causation between Mrs Staveleys omission and the increase in value in her sons estates, by virtue of the fact that the payment to the sons resulted from the exercise of a discretion by the pension scheme administrator. The difficulty of the points at issue is underlined by the chequered fortunes of the parties arguments: the FTT found tax payable on the omission but not the transfer, the Upper Tribunal found no tax payable at all, and the Court of Appeal held that both the transfer and the omission gave rise to a charge to tax. Legislative provisions (section 1 IHTA). A chargeable transfer is a transfer of value made by an individual which is not an exempt transfer (section 2 IHTA). It is not necessary to go into the concept of an exempt transfer, as it has no relevance to the present appeal. Section 3 IHTA deals with transfers of value. It provides: Inheritance tax is charged on the value transferred by a chargeable transfer 3. Transfers of value (1) Subject to the following provisions of this Part of this Act, a transfer of value is a disposition made by a person (the transferor) as a result of which the value of his estate immediately after the disposition is less than it would be but for the disposition; and the amount by which it is less is the value transferred by the transfer. (2) For the purposes of subsection (1) above no account shall be taken of the value of excluded property which ceases to form part of a persons estate as a result of a disposition. (3) Where the value of a persons estate is diminished, and the value (a) of another persons estate, or (b) of any settled property, other than settled property treated by section 49(1) below as property to which a person is beneficially entitled, is increased by the first mentioned persons omission to exercise a right, he shall be treated for the purposes of this section as having made a disposition at the time (or latest time) when he could have exercised the right, unless it is shown that the omission was not deliberate. (4) Except as otherwise provided, references in this Act to a transfer of value made, or made by any person, include references to events on the happening of which tax is chargeable as if a transfer of value had been made, or, as the case may be, had been made by that person; and transferor shall be construed accordingly. It can be seen that the core provision is contained in section 3(1), which fixes upon dispositions which result in a reduction in the value of the transferors estate. Such a disposition constitutes a transfer of value and, by virtue of sections 1 and 2, potentially attracts inheritance tax on the value transferred, which is the amount of the reduction in value. Section 3(1) focuses on a person making a disposition ie on an action rather than an omission. However, section 3(3) extends the reach of section 3(1) to include an omission to exercise a right in certain circumstances. Unless it is shown that the omission was not deliberate, a person who omits to exercise a right is treated by section 3(3) as having made a disposition if (concentrating on the circumstance that is relevant for this case) the value of that persons estate is diminished and the value of another persons estate is increased by the omission. Section 10 IHTA provides that certain dispositions are not a transfer of value: 10. Dispositions not intended to confer gratuitous benefit (1) A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person and either (a) that it was made in a transaction at arms length between persons not connected with each other, or certain sales of (b) that it was such as might be expected to be made in a transaction at arms length between persons not connected with each other. concerns [not (2) relevant; shares/debentures] In this section (3) disposition includes anything treated as a disposition by virtue of section 3(3) above; transaction includes a series of transactions and any associated operations. As appears, the approach of section 10(1) is to stipulate conditions which, if satisfied, result in a disposition not being a transfer of value. By way of shorthand, it is perhaps convenient to speak in terms of whether the subsection applies (that is to say its conditions are satisfied, the disposition is therefore not a transfer of value, and no tax arises) or does not apply (conditions not satisfied and tax is payable). The present appeal requires particular focus on the condition that the disposition was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person. Although section 10(1) is the principal subsection, section 10(3) is important too, because it provides an extended meaning for the concept of a transaction in section 10(1), so that it includes a series of transactions and any associated operations. Section 268 IHTA defines associated operations as follows: 268. Associated operations (1) In this Act associated operations means, subject to subsection (2) below, any two or more operations of any kind, being (a) operations which affect the same property, or one of which affects some property and the other or others of which affect property which represents, whether directly or indirectly, that property, or income arising from that property, or any property representing accumulations of any such income, or (b) any two operations of which one is effected with reference to the other, or with a view to enabling the other to be effected or facilitating its being effected, and any further operation having a like relation to any of those two, and so on. whether those operations are effected by the same person or different persons, and whether or not they are simultaneous; and operation includes an omission. HMRCs Notice of Determination The facts are set out below at para 21 and following. It is helpful to have in mind, when considering them, the terms in which HMRC identified the transfers of value which they said gave rise to charges to IHT. The Notice of Determination, issued in April 2012, recorded that HMRC had determined that there were two transfers of value. The first was the transfer into the PPP. Paragraph 1 of the Notice identified this in the following terms: 1. A Transfer In Application Form for the transfer of pension funds from an AXA Flexible Transfer Plan (a section 32 buyout policy) to an AXA Personal Pension Plan (the new pension scheme) signed by the deceased on 3 November 2006. Referring back to this paragraph, the operative part of the determination then said: A. The transfer at (1) above is a disposition which is a transfer of value having regard to section 3(1) Inheritance Tax Act 1984 (IHTA). The second transfer of value was Mrs Staveleys omission to draw lifetime benefits, which was dealt with as follows in the Notice: C. The deceased omitted to exercise her right to take any benefits from the new pension scheme between the date of commencement of the new pension scheme and the date of her death. The omission at C above is treated as a disposition by the deceased at the latest time when she could have exercised her rights and is a transfer of value having regard to section 3(3) and (1) IHTA. Broad outline of the parties arguments It is also helpful to approach the facts with the broad structure of the parties arguments in mind. It will be necessary to return to the detail of the arguments later, but the essentials are set out in the following four paragraphs. The starting point in relation to the transfer is that it is agreed to constitute a disposition which resulted in a reduction in the value of Mrs Staveleys estate, because she no longer had the right to determine the destination of the death benefits in relation to the pension. The question is whether the disposition is nevertheless not a transfer of value by virtue of section 10. This issue has to be broken down into two parts. First, does the transfer, as a disposition viewed on its own, amount to a transfer of value or does section 10(1) apply? This issue (Transfer Issue 1) turns on whether it has been shown by the appellants that the transfer was not intended to confer any gratuitous benefit on any person. The appellants say that this has been established, and HMRC say not. However, even if the appellants are right and the transfer into the PPP, viewed alone, would escape IHT, it has to be looked at in a wider context, and consideration given to whether section 10(1) still applies (Transfer Issue 2). It is not enough that the disposition itself was not intended to confer any gratuitous benefit; it has to be shown also that it was not made in a transaction intended to confer any gratuitous benefit. In support of their argument that the disposition here was made in such a transaction, HMRC seek to draw in the omission, with its accompanying intention to confer gratuitous benefit on the sons in the form of the resulting death benefit. They point to the definition of transaction in section 10(3) (transaction includes a series of transactions and any associated operations), and the definition in section 268 of associated operations, arguing that the transfer and the omission amount to associated operations, linked by common intent. On this argument, the intention to confer benefit on the sons by not taking lifetime benefits colours the transaction, so that it is not possible to bring the disposition within section 10(1). The appellants resist HMRCs case on Transfer Issue 2 on the basis that there is no relevant series of transactions and any associated operations here, so if the transfer to the PPP is not itself intended to confer gratuitous benefit, section 10(1) applies. On their argument, bundling together the transfer to the PPP and the omission is contrary to the findings of fact made by the FTT, and also a wrong application of the law, including the reasoning of the House of Lords in Inland Revenue Comrs v Macpherson [1989] AC 159 (Macpherson). They rely particularly upon the FTTs findings that the transfer to the PPP was not of itself intended to confer a gratuitous benefit, and that the transfer and the omission were not linked by motive. When it comes to the omission, the sole question is whether, as HMRC say, the terms of section 3(3) are satisfied. If the circumstances fall within the subsection, Mrs Staveley is treated as having made a disposition when she could last have exercised her right to take lifetime benefits under the PPP, and that disposition is conceded to be a transfer of value attracting IHT, the FTT having found that part of Mrs Staveleys motivation in not drawing benefits herself was to confer a benefit on her sons, and there no longer being any argument that section 10(1) applies to the omission. But the appellants say that section 3(3) is not satisfied. Their argument is that (putting it loosely) there is not the necessary connection between Mrs Staveleys omission and an increase in another persons estate, because the payment of the resulting death benefit to her sons depended upon the pension scheme administrator exercising its discretion in their favour, and did not follow the omission sufficiently closely in time. It cannot be said, in the appellants submission, that the value of another persons estate is increased by (my emphasis) the omission to draw lifetime benefits. The facts and the FTT judgment Mrs Staveley was divorced in 2000. The divorce was acrimonious, leaving her feeling bitter towards her ex husband. Whilst together, they had set up a company called Morayford Ltd. She was a director of the company, and employed by it, and she had a large pension fund with its occupational pension scheme. On divorce, her involvement with the company ceased. Putting it in the non technical terms used by the FTT, [t]he ancillary relief order ordered that her share of the company pension scheme be transferred to her. It was put into what was called a section 32 buyout policy (the terminology reflecting that it was a policy to which section 32 of the Finance Act 1981 applied). However, given the level of her salary with the company, the pension was over funded, and, as things stood then, any surplus in the fund on her death would be returned to the company, potentially benefitting her ex husband. This was not acceptable to her at the time of the transfer of her fund into the section 32 policy (FTT judgment, para 12), but she had no alternative option. Thereafter, the FTT found (ibid, para 14), she remained very concerned that her pension fund could in whole or part revert to the benefit of her ex husband and/or his new family. It was a term of the section 32 policy that if Mrs Staveley died without taking lifetime benefits, the trustees of the scheme would pay a lump sum by way of death benefit to her estate. Although she could have chosen to access her pension from its inception, she did not do so at any point during the currency of the policy. In 2004, Mrs Staveley was diagnosed with cancer, which was initially treated successfully. She made a will in 2005, appointing her two sons and Mr Parry as executors and trustees, and leaving her property to the trustees on trust to hold the assets for her sons in equal shares, the income to be paid to each son during his lifetime (and thereafter to his children), but with the trustees having power to advance capital. Mrs Staveleys pension fund was still, at that time, invested in the section 32 policy, and any death benefit payable under it would have gone into her estate and benefitted her sons by virtue of her will, subject to such IHT as would have been chargeable with regard to the sum. In 2006, Mrs Staveleys illness returned and she was treated again, but it became evident that she would not recover. The FTT found that for much of 2006, she refused to accept that her death was inevitable (FTT judgment, para 32). However, by mid October 2006, she had accepted intellectually that she was dying (ibid, para 34). On 30 October 2006, she set in train the transfer of her section 32 policy to the PPP, the new policy commencing on 9 November 2006. A death benefit was payable, under the PPP, to, or for the benefit of, one or more beneficiaries selected, at the discretion of the pension scheme administrator, from a number of specific categories, within which were included persons nominated by the scheme member, and also grandchildren, and legal personal representatives. The scheme member could nominate people for consideration by the pension scheme administrator by completing the Expression of Wish form which formed part of the Transfer in Application Form. Mrs Staveleys application form (dated 3 November 2006) nominated her two sons to be considered as equal recipients of the death benefit. In mid 2007, pursuant to the administrators exercise of discretion, the benefit was paid out in accordance with her wishes. The FTTs critical findings about Mrs Staveleys motivation for the transfer are contained in paras 48 to 55 of the FTT judgment, but para 16 is also important. There, it rejected the view of one of the sons that, although Mrs Staveley wanted the sons to benefit from her pension fund, she would rather they got nothing than that her ex husband benefit from it in any way. It made the general finding that preventing Morayford receiving benefit from her pension fund was very important to her; but it was also very important to her that her sons did benefit from her estate. At paras 48 to 55, the FTT was focusing expressly on whether the transfer from the section 32 policy into the PPP was intended to confer gratuitous benefit within the meaning of section 10(1). The appellants case was that Mrs Staveleys sole intention in transferring the funds was to eliminate any risk that any part of the fund might be returned to Morayford. HMRC put forward a number of arguments against this. They argued that, in the light of changes in the law in April 2006, it should have been obvious that there was no such risk, but that even if she did not know this, Mrs Staveley had at least a dual motive, the second motive being to ensure the death benefits passed to her sons free of IHT. The FTT found that Mrs Staveley was not motivated by IHT considerations and, indeed, that it was more likely than not that she was under the mistaken impression that the transfer would not affect the amount of IHT payable on her death (para 49). It found that her sole motive in making the transfer was to sever all ties with Morayford (para 48). Though the risk that funds would revert to Morayford may by then have been more perceived than real, she had been advised that there was such a risk, and the perceived risk was the reason why she acted as she did. At para 50, the FTT set out a further argument which HMRC advanced as to Mrs Staveleys intention and began to deal with it: 50. HMRC say that, even ignoring the IHT, she clearly had an intent that the death benefits would pass to her sons, and this was an intent to confer a gratuitous benefit. She signed the statement of wishes. However, we do not see how this could be properly described as an intention to confer a gratuitous benefit. Her sons were her beneficiaries named in her will and therefore the persons who had stood to benefit from the death benefits of the section 32 policy (which after April 2006 would have been the whole fund). They were the persons named in her expression of wishes for the PPP. Either way they were the intended beneficiaries so that the transfer did not confer a benefit that was new to them and cannot therefore have been part of the motivation for Mrs Staveley. (Emphasis in the original) As heralded here, and developed in para 52, the FTTs view was that the benefit contemplated by section 10 was a benefit which did not exist before, and was newly conferred. In this case, as the FTT saw it, the only difference between the sons being named in the Expression of Wish form in respect of the PPP, and being Mrs Staveleys residuary legatees in respect of the death benefit arising from the section 32 policy, was that the death benefit could be paid to them directly by the pension administrator under the PPP, rather than coming to them by way of Mrs Staveleys estate (para 53). This did, indeed, produce a very real advantage, in avoiding the IHT which would have been payable had the section 32 policy remained in place, but the FTT recalled that we have already concluded that this IHT advantage was not a benefit which Mrs Staveley intended to confer, even though that was the effect of what she did (para 54, emphasis in the original). It followed (para 55) that the transfer into the PPP was not intended to confer any gratuitous benefit on any person. Turning to what the FTT had to say about Transfer Issue 2 (the transfer taken together with the omission to draw lifetime benefits), it is necessary to look first at the findings that it made about the circumstances of the omission. It examined what Mrs Staveleys thinking was, during 2006, about drawing pension benefits herself. Whilst her funds were still invested in the section 32 policy, she had considered whether to take lifetime benefits. It was not possible to determine the precise date when she decided not to do so, but the Tribunal found that she must have communicated that decision to her financial advisor in about October 2006 (FTT judgment, para 28), having taken it sometime between June and October that year (ibid, para 124). There was no evidence of any change of view up to the date of her death (also para 124). The FTT found (paras 146 to 149) that a number of factors influenced Mrs Staveley in this approach, including that she would confer on her sons a greater financial benefit by not drawing lifetime benefits. That was part of her motivation in June 2006. There being no evidence of any change of mind subsequently (para 143), it must be treated as the position at the moment of her death as well (para 149). It was a continuing decision (para 61), an ongoing choice (para 87). The FTT set out its legal analysis of Transfer Issue 2 between paras 56 and 72 of its judgment, rejecting HMRCs case that the transfer of the funds into the PPP should be taken together with the omission to draw lifetime benefits as a series of transactions and/or associated operations. As it saw it, the transfer and the omission were not linked as a scheme intended to confer gratuitous benefit. It found at para 64 that [w]hatever the intent behind the omission, it was not linked with the transfer to the PPP in Mrs Staveleys mind, her intent with respect to the transfer having been solely to break the connection with Morayford. It reinforced this at para 69 where it said: the transfer to the PPP was not made with the intent of omitting to take lifetime benefits. In so far as Mrs Staveley made any positive decision not to take lifetime benefits, that decision had already been taken and taken independently of the decision to transfer the funds to the PPP. (Emphasis in the original) In relation to the omission to take lifetime benefits, which it found fell within section 3(3) and gave rise to tax, the FTT commented that it would ordinarily regard the voluntary exercise of discretion as breaking the chain of causation from an omission to exercise a right before death to the receipt of the resulting monies, but not so where, as it considered to be the case here, it was virtually inevitable that [the scheme administrator] would honour the deceaseds wishes and pay the money directly to her sons (paras 113 and 114). Section 10 could have no application to the omission because of the FTTs finding that part of Mrs Staveleys motivation was to confer a greater benefit upon her sons. The Upper Tribunal decision The Upper Tribunal agreed with the FTT that the transfer (whether on its own or taken with the omission) was, by virtue of section 10, not a transfer of value for the purposes of section 3 IHTA (para 60 Upper Tribunal judgment). Aspects of its reasoning differed from that of the FTT. In particular, it did not endorse the FTTs interpretation of section 10, agreeing with HMRC that as a matter of law, the mere fact of an existing putative benefit under a will of a person into whose estate certain assets will pass on death cannot prevent a disposition in lifetime from conferring a benefit, even if the benefit is to the same beneficiaries, and is substantially identical to that which would be conferred by the will (para 30 ibid). However, it considered the nature of any benefit and the surrounding circumstances relevant to the question of intention, so saw the fact that the sons would benefit under the will as a relevant factor in assessing Mrs Staveleys true motive in making the transfer (para 31). Normally, by the time an appeal reaches the Supreme Court, the facts are no longer a matter of argument. However, in this case, certain of the facts (particularly concerning Mrs Staveleys intention) have continued to excite debate. It is therefore relevant to note here that HMRC sought to persuade the Upper Tribunal that it had not been open to the FTT, properly interpreting section 10, to find that Mrs Staveleys sole motive in making the transfer was to prevent funds reverting to Morayford and her ex husband, and that it could only have found that Mrs Staveley made the disposition with the intention of doing several things, one of which was to confer a gratuitous benefit on her sons. The Upper Tribunal rejected that challenge. It said (para 32): To the extent that the FTT was in error in deciding that the replacement of the testamentary benefit to the sons by the benefit conferred as beneficial objects of the discretion of the scheme administrator of the AXA PPP could not in law amount to the conferring of a benefit, that was not the basis for the FTTs conclusion as to the sole motive of Mrs Staveley. That was a decision of the FTT on the facts, which properly included the nature of the benefit in question. The FTTs finding that the transfer and the omission were unconnected and not part of any scheme to confer benefit on the sons was also endorsed by the Upper Tribunal (para 55). The Upper Tribunal differed from the FTT on whether the omission was a transfer of value, taking the view that the sons estates were increased not by Mrs Staveleys omission to take lifetime benefits but by the exercise of pension scheme administrators discretion, which, in its view (summarised at paras 86 and 87), broke the chain of causation between the omission and the payment out to the sons. It followed that the omission was not caught by section 3(3) IHTA and did not attract tax. It is material to record that the FTTs finding that it was virtually inevitable that Mrs Staveleys wishes would be honoured by the pension administrator (see para 33 above) came in for criticism. HMRC did not seek to support it and the Upper Tribunal considered (para 72 Upper Tribunal judgment) that the FTT had not been entitled to make it, there being nothing to contradict the evidence that there was a discretion conferred on the administrator. The only finding open to the FTT, the Upper Tribunal said (para 74), was that there was a genuine exercise of discretion and that the most Mrs Staveley could have expected from her completion of the Expression of Wish form was that a diligent administrator would take those wishes into account as a relevant factor in the exercise of its discretion. The Court of Appeal decision: Transfer Issues 1 and 2 By a majority (Newey LJ and Birss J), the Court of Appeal upheld the decision of the lower courts that, standing alone, the transfer from the section 32 policy to the PPP was not a transfer of value, because section 10 applied. In the view of the majority, to ascertain whether the transferor intended to confer a gratuitous benefit, one has to compare the position of the recipient of the benefit before the disposition with his position in light of it, asking whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit (paras 86 and 88 of Newey LJs judgment, with which Birss J agreed at para 114). Drawing assistance from the dictionary definitions of confer and benefit, Newey LJ said in para 88: Confer is defined in the Concise Oxford Dictionary as to grant or bestow, benefit as a favourable or helpful factor or circumstance; advantage, profit. In enacting section 10, parliament will, I think, have been concerned to exclude from the crucial exemption for which it provides a disposition which was itself intended to grant or bestow something advantageous gratuitously. Parliament considered that an arms length transaction should not generally give rise to an IHT charge even if it served to diminish the value of the transferors estate, but did not want the exemption to apply if to put matters broadly the disposition was being used to improve someones position on a gratuitous basis. As a matter of language, I do not think that it is appropriate to speak of a disposition having been intended to confer any gratuitous benefit if the recipient of the benefit was intended to receive no more than he would have had in any event. A disposition designed to give a person only what he was to receive anyway or its equivalent, let alone less, cannot fairly be described, in my view, as intended to confer a benefit. In contrast, Lady Arden considered (para 52) that the conferral of a benefit is to be ascertained by a legal analysis of the transaction whereby the beneficiary acquired his rights and without comparison with a prior gift (my emphasis). As HMRC rely upon her approach, I will need to deal with it in some detail in discussing the parties submissions, so will say no more about it at this stage. Applying the majoritys interpretation of section 10 to the facts, Newey LJ acknowledged that, as a matter of fact, the transfer of the pension fund from one scheme to the other would have been advantageous to Mrs Staveleys sons if it enabled them to receive sums free of IHT. However, as he said (para 83), the mere fact that a transaction confers a gratuitous benefit is not enough to remove the protection of section 10. That occurs only if the transferor intends such benefit to be conferred and, here, the FTTs finding was that IHT did not form part of her motivation (FTT, para 49). In contrast to Lady Arden (see below), he did not consider that it was open to the Court of Appeal to find that, IHT saving apart, the interest of the sons under the nomination was a favourable change from their previous position under Mrs Staveleys will. He observed (para 91): It is not apparent to me that HMRC have ever advanced a case to that effect, let alone that the FTT made findings supporting it, and (aside, again, from IHT) I do not regard it as in the least obvious that the sons were in practice any better placed as a result of the transfer. However, even if it were possible to conclude that there was a favourable change other than the saving of IHT, in his view this still would not oust the protection of section 10, because, on the findings of the FTT, Mrs Staveley did not make the transaction intending to improve the sons position in that way (ibid, at paras 89 and 91 in particular). As Newey LJ put it, [s]he did not see the transfer as giving her sons anything better than they would otherwise have received. As Lady Arden analysed the facts, there was a gift of newly created rights, the sons interest under the PPP being very different in law from their position as residuary beneficiaries under Mrs Staveleys will, and therefore the gift was newly conferred (para 45). In her view (para 46), the interest of the sons under the nomination was undoubtedly a favourable change from their previous position under Mrs Staveleys will if regard is had to the legal analysis. The application of section 10 therefore turned on whether Mrs Staveley intended to confer this benefit. As Lady Arden put it at para 52, in order to obtain the benefit of the purchase exemption, the donor, or his personal representatives, has to show that, although the donor intended to make a gift, he did not intend to make a gift of what was in law a newly created right. Lady Ardens view about Mrs Staveleys intention built on her analysis of the factual findings made by the FTT. Her interpretation of the FTT judgment was that, although the FTT had found that the transfer was not made with the intention to confer gratuitous benefit, the motivation being solely to sever all ties with Morayford, there was no equivalent finding in relation to the Expression of Wish form, as to which, she considered, there was a finding, by implication, that by executing the statement of wishes on the occasion of the transfer of funds Mrs Staveley made a disposition with the intention of giving a gratuitous benefit to her sons (see particularly paras 32, 36 and 40 of Lady Ardens judgment). At para 47, she said: it may be said that there was an absence of intention to confer a new benefit. Mrs Staveley was, after all, (it may be said) only giving her sons what she had previously intended to give them under her will. She was (it may be said) just making the same gift in a new way. But what the FTT found was that there was a gratuitous intention in signing the nomination. So, in my judgment, on the facts of this case, the respondents had to show that, even though it was a gratuitous intention to confer what in law was a newly created right, it was not Mrs Staveleys intention to confer such a benefit: see the words if it is shown that it was not intended appearing in section 10(1). An absence of evidence as to whether she intended to make a newly conferred gift is not enough. The respondents needed to show that she mistakenly thought that she was not conferring a newly created right, and the findings of the FTT do not go that far. It followed that, even standing alone, Lady Arden would have found that the transfer to the PPP was a transfer of value. For the majority, however, that position was only reached by taking the transfer together with Mrs Staveleys omission to draw lifetime benefits under the PPP. It will be recalled that section 10 requires that it be shown not only that the disposition itself was not intended to confer gratuitous benefit, but also that it was not made in a transaction intended to confer gratuitous benefit, and a transaction for this purpose includes a series of transactions and any associated operations. The court held that the transfer was, in fact, made in a transaction intended to confer gratuitous benefit, essentially for the reasons set out by Newey LJ in para 103, which I summarise in the rest of this paragraph. The transfer and the omission were operations affecting the same property, so were associated operations as defined in section 268. Attention therefore turned to the issue of whether this transaction was intended to confer gratuitous benefit. As found by the FTT, one of the factors in Mrs Staveleys decision not to access her pension fund was that it would confer a greater benefit on her sons, this being her intention both at the time of the transfer to the PPP and at the time of her death. The omission was therefore intended to confer any gratuitous benefit. On Newey LJs reading of Macpherson, it was immaterial that the transfer was not made with that intention, because a transaction could be intended to confer gratuitous benefit without each of the associated operations being itself made with that intention or actually conferring such benefit. If a scheme of which an operation forms part is intended to confer the benefit, that is enough. The FTT was mistaken in thinking there was no intent linking [the omission to take pension benefits and the transfer to the PPP]. Both were motivated by a desire on Mrs Staveleys part that her sons should have the death benefits that would be payable if she did not draw a lifetime pension. To that end, she named them in her Expression of Wish form. So, Newey LJ said at para 103(v): While, therefore, Mrs Staveley did not see the transfer to the PPP as improving her sons position and she made the transfer out of a desire to sever ties with Morayford, the only reasonable conclusion, as it seems to me, is that she also intended the PPP to be a means by which the death benefits could be passed to her sons. Thus the failure to take pension benefits and the transfer to the PPP were each properly seen as forming part of and contributing to a scheme intended to confer gratuitous benefits. It followed that the protection of section 10 was not available for the transfer to the PPP. Court of Appeal decision: section 3(3) and the omission The court held unanimously that the sons estates had been increased by Mrs Staveleys omission to draw lifetime benefits, notwithstanding the scheme administrators discretion. On this point, there was general agreement with the reasoning of Newey LJ, the core of which is perhaps best encapsulated in this passage from para 109: The sons estates would not, of course, have been increased but for the omission. Moreover, the exercise of discretion in the sons favour by the scheme administrator did not involve any break in the chain of causation. The administrator was, after all, doing no more than it was obliged and could be expected to do in the period immediately following Mrs Staveleys death. It may be that the increase in the sons estates could also be said to have been brought about by the exercise of the administrators discretion, but that by no means makes it inappropriate to see the estates as having been increased by the omission. The one does not preclude the other. In so finding, the court also rejected the argument that the diminution in value of one persons estate and the increase in value of someone elses must occur at the same time for section 3(3) to apply. Transfer Issue 1 (transfer on its own): discussion The appellants support the conclusion of the majority of the Court of Appeal that, standing alone, the transfer of funds to the PPP did not constitute a transfer of value because section 10 applied, and they rely upon the Court of Appeals reasoning on this issue. HMRC, however, contend that Lady Arden correctly concluded, for the reasons she gave at paras 42 to 54, that section 10 was not applicable. They argue that Mrs Staveleys intention in making the disposition was to exclude her ex husband and to confer a benefit on her sons by way of death benefits. On this analysis, in their submission, her intention was to confer a gratuitous benefit. To make this good, they make submissions both as to what is meant in law by intending to confer [a] gratuitous benefit on any person, and as to the factual findings that were/should have been made by the FTT. Miss Wilson, for HMRC, makes the general point that section 10 only comes into play when there has been a disposition which would normally be a transfer of value. She characterises it as a relatively narrow provision, with the taxpayer bearing the burden of justifying why IHT is not payable as it ordinarily would be. She emphasises that, whilst what someone intends is a question of fact, the treatment of that factual intention for the purposes of section 10 is a question of law. She submits that the proper approach, in a case such as this where there is a change in how a gift is made (or, as she also puts it, where rights have been substituted) is to ask three questions, always bearing in mind, of course, that it is the taxpayer who has to show that the disposition was not intended to confer gratuitous benefit. The three questions are: (1) What rights, if any, were created and extinguished? (2) On a detailed legal analysis, did the new rights confer a benefit within the statutory words? (3) Was that situation something that the disponor intended? Of these three questions, only the last is subjective. In HMRCs submission, the majority in the Court of Appeal was wrong to interpret section 10 as requiring an examination of whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit (see paras 86 and 88 of Newey LJs judgment, referred to/quoted at para 40 above). This would be uncertain and difficult to adjudicate upon, HMRC say, and would give rise to arbitrary results. Lady Ardens formulation of the law is correct, in HMRCs submission, and leads to a section 10 test which is readily justiciable. Lady Ardens para 46 deals with statutory interpretation. There she observed that, in the absence of a relevant statutory definition of the words in question, resort had to be had to their ordinary meaning, and said: On its ordinary meaning, a benefit involves a net gain or favourable change in a persons position, but the comparison to be made is with his position immediately before the putative benefit was conferred. This is the most natural time to determine the question of benefit and in my judgment there would need to be some mandate in the 1984 Act to do what the FTT did, which was to look at the position in substance before the transfer took place and without reference to its legal analysis. I do not consider that there is any such mandate. The interest of the sons under the nomination was undoubtedly a favourable change from their previous position under Mrs Staveleys will if regard is had to the legal analysis. The interpretation of confers any gratuitous benefit which I prefer gives weight and appropriate meaning to the statutory words. At para 50, Lady Arden said that that the correct approach to section 10 was a technical approach, and not a substantive one. She considered it clear from the wording that the subsection is intended to be narrowly construed, and identified a number of features of the provision which she found influential, including that: There is no limitation on the type of benefit and there is no requirement for the gratuitous benefit to be conferred on the recipient of the property transferred by the disposition. It can be conferred on any person. It must be of some value, but that value need not be the same as the value of the property transferred. Summarising her interpretation at para 52, she said that the conferral of a benefit is to be ascertained by a legal analysis of the transaction whereby the beneficiary acquired his rights and without comparison with a prior gift. Even with the benefit of Lady Ardens analysis, I confess to some difficulty in understanding what, precisely, HMRC consider to be the correct interpretation of section 10. They accept that ordinarily an intent to confer benefit involves an element of intention to improve a persons position but, they say, the important question is Improve the recipients position in comparison to what? In identifying this as the important question, HMRC can be seen to acknowledge that a comparison of some sort is required in order to determine whether relevant benefit has been conferred for section 10 purposes (or putting it more exactly, whether the disposition was intended to confer any gratuitous benefit). However, they seek to confine the exercise to a comparison with the recipients position (i) as it is in law, and (ii) immediately before the disposition. A more generalised consideration of whether the overall effect of the disposition was intended to be favourable to, or advantageous to, the recipient of the benefit is not permitted, on their case. They also assert that a comparison with a prior gift is not permissible. In applying this formulation to the present case, HMRC seem to be adopting what I might call a return to zero approach. It is integral to their argument that there is a moment when rights under the section 32 policy have ended, but rights under the PPP have not yet begun. On their argument, at this point, immediately before rights are acquired under the PPP, the sons have nothing, having lost even the hope of benefitting that they had in relation to the section 32/will arrangement, and are totally reliant on Mrs Staveley making new arrangements to enable them to benefit from her pension fund. They necessarily benefit, therefore, from Mrs Staveley taking out the PPP rather than, for instance, simply divesting herself of the section 32 fund completely in some way, so as to ensure that nothing would find its way to Morayford/her ex husband. I am not sure whether HMRC would say that the return to zero approach applies in every case or whether it depends upon the particular facts of this case, for example upon the fact that, at the point of the transfer, the sons had no legally enforceable right to receive any death benefits via Mrs Staveleys will. There were features of Miss Wilsons submissions which suggested to me that the approach was a response to the particular facts of the case. The first of Miss Wilsons three generic questions draws in a consideration of pre existing rights in asking, What rights were created and extinguished? (my emphasis), and there were other elements in her submissions which also suggested that regard might be had to the prior position. For example she particularly noted that the sons were in no position to barter for their nomination in the Expression of Wish form, suggesting that the legal analysis might have been different if they had had pre existing rights, and that what was important was that they had no rights, only a hope of benefitting from the will. None of this is surprising, as it would surely be difficult to decide, in a complete vacuum, whether or not something is a benefit, and well nigh impossible to decide whether it is a gratuitous benefit. As some sort of comparison with a pre existing position is required in order to determine the gratuitous benefit question, even on HMRCs case, and given that HMRC accept that ordinarily an intent to confer benefit involves an element of intention to improve a persons position, the difference between the parties may not in fact be enormous. The most notable difference is that HMRC contend for a much narrower, and more technical, approach in carrying out the inevitable comparison than do the appellants, rejecting an examination of the position in substance. And of course their application of that approach to these facts produces a radically different result. In interpreting section 10, it is important to keep in mind that the question is not simply, Was a gratuitous benefit conferred on any person? The search is for what the disponor intended, and in particular for whether the disponor intended to confer any gratuitous benefit on any person. If, by the three questions that they say must be asked (see para 51 above), HMRC assert that the relevant intention is merely an intention on the part of the disponor to engage in a transaction which, as a matter of legal analysis, creates new rights which confer a benefit on a person, I cannot accept that that would be correct. It would be surprising if it were, as it would potentially prevent the application of section 10 in the sort of commercial arms length transactions where it would normally have a role. For instance, in a bad commercial bargain where the purchaser quite unknowingly pays more than an item is worth, the purchaser intends to make the purchase and, as a matter of legal analysis, the transaction confers on the vendor the right to keep the overpayment, which is a gratuitous benefit, for which he has not given value. Indeed, had this been all the intention required, it might have been argued by HMRC that there was no need to explore Mrs Staveleys thinking about the potential IHT advantages of the PPP, because the mere fact that she intended to make a disposition which, as a matter of law, carried those advantages took matters outside section 10 without more. The disponors actual intention in making the disposition is, therefore, in point. That militates against an over technical interpretation of what is meant by confer any gratuitous benefit. To my mind, the approach taken by the majority in the Court of Appeal is essentially the correct one. The words confer and benefit have to be given their ordinary meaning, and the dictionary definitions (see Newey LJs para 88, quoted at para 40 above) show that they import the idea of granting or bestowing some advantage on the recipient. Like Newey LJ, I do not think it is appropriate to speak of a disposition having been intended to confer any gratuitous benefit if the recipient of the benefit was intended to receive no more than he would have had in any event. It is necessary, therefore, to ask whether the disponor was intending, by the overall effect of the disposition, to put the recipient in a better position, or, to borrow from what Newey LJ said at para 88, putting things broadly, to ask whether the disposition was being used to improve someones position on a gratuitous basis. The exercise is not, however, simply a matter of asking the disponor whether or not he or she intended to confer benefit, as Miss Wilson submits would be all that was required under the appellants test. I go so far with HMRC as to accept that it is not possible to consider whether a disposition was intended to improve someones position without taking into account what rights the recipient had, in law, before and after the disposition. This legal context will permit a more rigorous evaluation of whether the requisite absence of intention has been shown. But this legal analysis of the rights is a factor in the evaluation, not the be all and end all of the consideration. I do not accept, for example, that the mere fact that the rights are to be enjoyed in a different legal form after the disposition means that they are necessarily a gratuitous benefit. Furthermore, I cannot accept the return to zero analysis, whereby the existing set of rights must necessarily be treated as ending immediately prior to the disposition, with a new set commencing which, in comparison to the void left by the ending of the pre existing rights, can then be described as beneficial. There must, as I see it, be more attention paid to the practical reality of the legal situation than that wholly artificial analysis permits. It would probably be unwise to attempt to define further what is meant by intended to confer any gratuitous benefit, particularly as it is unnecessary to do so to resolve the instant case. Instead, I hope that by turning to the facts of the case, I can demonstrate the way in which it seems to me the section should be interpreted. True it is that as a matter of legal analysis, the position of the sons differed as between the section 32/will arrangement and the PPP but, on its own, that takes matters nowhere. Newey LJ did not regard it as in the least obvious that (IHT apart) the sons were in practice any better placed as a result of the transfer than they had been under the section 32/will arrangement. I would endorse that view. I do not see their position as better under the PPP than previously. Just as they had no right to benefits under the section 32/will arrangement, so they had no right to benefits under the PPP. They had a hope of benefitting under the will from any death benefits, but Mrs Staveley could have changed her will at any time and they would have had no remedy if she had decided to bequeath her estate elsewhere. Similarly, if she had chosen to draw her pension during her lifetime with the result that death benefits ceased to be payable at all, they could have done nothing about it. Under the PPP, they were within the class of those in whose favour the scheme administrator could exercise its discretion, but they could not rely upon the death benefits being paid to them. Not only was there a genuine discretion (as the Upper Tribunal found), Mrs Staveley could have notified AXA of a change to her wishes, or even drawn a lifetime pension herself. The most that the sons could have required, assuming that Mrs Staveleys nomination remained as it was in the original Expression of Wish, was that the scheme administrator give proper consideration to paying the benefits to them. As Mr Rees QC for the appellants said in argument, the only material change was in the identity of the person upon whose decision receipt of the benefits depended, from Mrs Staveley in the case of the will, to the scheme administrator under the PPP. As for HMRCs submission that the sons position was improved because they were better off with the funds in the PPP, which gave them a chance of receiving the death benefits, than if Mrs Staveley had disposed of the funds elsewhere, that ignores the reality of the transfer of the pension funds from one provider to another. Mrs Staveley did not have a free hand with regard to this. There was no moment when, having drawn the funds from the section 32 policy, she was free to do what she wished with them. As Mr Rees put it in oral argument, she never had the right to take the money out of the pension wrapper, at least as the law stood at that time. Upon surrender of the section 32 policy, the policy monies were to be paid directly by the company to the receiving scheme. It is wholly artificial to introduce the return to zero approach in these circumstances. The disposition was, as the Notice of Determination identified, the transfer of funds from the section 32 policy to the PPP. What is crucial, of course, is what Mrs Staveley intended. Given that, even factoring in a legal analysis of the sons position at each stage, the disposition cannot be said to have conferred a gratuitous benefit on them, it would be surprising if it could nonetheless be concluded that there had been a failure to show the requisite absence of intention. The finding of the FTT was that Mrs Staveley did not intend to improve the sons position by transferring the funds. I would not criticise the Court of Appeals conclusion that the FTT impliedly found that, when she signed the Expression of Wish form nominating her sons, Mrs Staveley intended to benefit In the light of the above, the transfer of the funds on its own is not a transfer them (see para 44 above, and also para 103(vi) of Newey LJs judgment). However, this is not relevant to Transfer Issue 1, in my view. In the circumstances of this case, making the nomination does not amount to conferring a relevant benefit, and Mrs Staveleys benign intention in this regard cannot amount to an intention to confer gratuitous benefit. of value because section 10 applies. Transfer Issue 2 (transfer and omission as associated operations): discussion The parties rival arguments on this issue are summarised at paras 18 and 19 above. It is accepted that, as the FTT found (see para 31 above) in omitting to draw lifetime benefits under the PPP, part of Mrs Staveleys intention was to benefit her sons. The question is whether this intention colours the transfer with an intention to confer gratuitous benefit which it would not have on its own. The issue requires close consideration of the decision of the House of Lords in Macpherson, and an examination of the facts found by the FTT as to the lack of a relevant link between the transfer and the omission, the appellants arguing that the Court of Appeal went wrong in law and on the facts when holding that the benefit of section 10 was not available because the transfer and the omission formed a series of transactions and associated operations intended to confer a gratuitous benefit on the sons. In Macpherson, the House of Lords was concerned with section 20(4) of the Finance Act 1975 (FA 1975) which was in effectively identical terms to section 10, as was the FA 1975 definition, in section 44, of associated operations. Macpherson concerned property held in a discretionary settlement, the primary objects of the settlement being Mr Robarts and his family. Valuable pictures were included in the settled property. The trustees had an agreement with Mr Robarts, whereby he undertook the custody, care and insurance of the pictures and agreed to pay 100 a year for his enjoyment of them. The agreement was terminable on three months notice by either side. Some years later, in 1977, the agreement was varied, including by the right of termination on notice being removed and replaced with a fixed date in 1991 for the expiry of the agreement (subject only to the trustees being able to terminate sooner in the event of a serious breach of the agreement by Mr Robarts). The next day the trustees executed a deed of appointment appointing the pictures, subject to and with the benefit of the varied agreement, on trusts under which Mr Robarts son took a protected life interest in possession. The issue was whether capital transfer tax was payable in respect of the 1977 variation which, by deferring the date on which the pictures could be delivered to an open market purchaser, had diminished their value. The transaction would attract capital transfer tax unless it was such that, were the trustees beneficially entitled to the settled property, it would not be a transfer of value. That depended on section 20(4). The evidence was that the trustees had concluded that they ought not to exercise the power of appointment in favour of the son unless the original agreement was first varied, since Mr Robarts was not willing to continue to house the pictures on the original terms after such an appointment. Counsel for the trustees accepted that the variation and the appointment were associated operations but contended that the appointment was nevertheless not a relevant associated operation. Counsel for the Revenue contended that as a matter of law the transaction which had to be looked at in section 20(4) was one which included a series of transactions and associated operations and, as a matter of fact, based on the trustees reason for varying the original agreement, the 1977 agreement was made in such a transaction. Lord Jauncey of Tullichettle noted that the definition of associated operations was capable of covering a multitude of events affecting the same property which might have little or no apparent connection between them, but that counsel for the Revenue rightly accepted that some limitation must be imposed. As it is central to the argument before us, it is necessary to set out in full, the following passage in which Lord Jauncey considered the ambit of section 20(4) (p 175G): If the extended [section 44] meaning of transaction is read into the opening words of section 20(4) the wording becomes: A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction including a series of transactions and any associated operations intended, to confer any gratuitous benefit So read it is clear that the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. That is not to say that it must necessarily per se confer a benefit but it must form a part of and contribute to a scheme which does confer such a benefit. In this case it is common ground that the appointment conferred a gratuitous benefit on [the son]. It is clear that the appointment would not have been made if the 1970 agreement had not been varied by that of 1977. It follows that the 1977 agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit on [the son]. So viewed there can be no doubt that the 1977 agreement, being the disposition for the purposes of section 20(4), was made in a transaction, consisting of the agreement and the appointment, intended to confer a gratuitous benefit on [the son]. The trustees had thus failed to satisfy the test in section 20(4) and tax was payable on the variation agreement. It is not suggested that we should do other than adopt Lord Jaunceys interpretation of section 20(4) in our construction of section 10. However, there is a significant difference of opinion between the parties as to what Lord Jaunceys interpretation actually was, and how it should be applied to the present case. For the appellants, Mr Rees accepts that the omission falls within the wide definition of associated operations, but says that it is, nonetheless, not relevant in identifying a transaction in the wider sense for section 10 purposes. To be relevant, in his submission, a step (to adopt an inexact but useful shorthand covering transactions in the narrow sense and associated operations) must not only form part of and contribute to a scheme that confers a gratuitous benefit, but must also, itself, have been intended to confer a gratuitous benefit. That, he submits, is what Lord Jauncey was saying. Miss Wilson, on the other hand, says that there is no need for each individual step to be intended to confer gratuitous benefit. All that is required for a step to be relevant is that it forms part of and contributes to a scheme which confers a gratuitous benefit. Here, in her submission, the scheme is the gift of the death benefits to the sons, to which the investment in the PPP and the omission both contribute. Without the investment of the funds in the PPP, there would have been no death benefit to give to the sons. There might initially appear to be support for the appellants interpretation of Lord Jaunceys speech in the following passage (see para 70 above for the full quotation): the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. (My emphasis) Lord Jauncey might be taken to be saying, here, that each step in any scheme must be intended to confer benefit, otherwise it is irrelevant. However, I do not think that can be what he meant. I agree with Miss Wilson, who submits that to understand Macpherson correctly, one must appreciate that it was there conceded by the Revenue that the variation agreement was not intended to confer gratuitous benefit and was such as might be expected in a commercial transaction (see p 173G). The variation agreement was, of course, the focus of the dispute in that case. Unless it could be linked with the appointment in favour of the son the following day, it would have escaped tax by (putting it loosely) the application of section 20(4). The Revenue, however, satisfied their Lordships that the agreement could be bolted together with the next days appointment, notwithstanding that the variation agreement was not attended by an intention to confer gratuitous benefit. It was held to be part of a scheme which was intended to confer gratuitous benefit, and therefore to be a transfer of value and subject to capital transfer tax. That scheme was made up of one element which was not attended by gratuitous intent (the variation), and one element (the appointment) which was. If Lord Jauncey had intended to say that a scheme can only comprise elements which are, themselves, attended by a gratuitous intent, there would have been no scope for taking the variation and the appointment together in this way. Accordingly, I would reject the argument that a step can only be relevant if it is, itself, taken with an intention to confer gratuitous benefit. Nevertheless, it is clear that Lord Jauncey considered, in line with the Revenues concession, that not everything which could be described as an associated operation would be material for section 20(4) purposes. The fact that the operation did not itself confer a benefit did not rule it out, but, to be relevant, it must form a part of and contribute to a scheme which does confer such a benefit. Lord Jauncey expressed himself here in terms of the scheme conferring a benefit, rather than it also being intended to confer a benefit. However, reading his speech as a whole, I would be inclined to say that he meant that the scheme had to be one actually conferring, and intended to confer, such a benefit. Just before he said this, he had referred to the intention to confer gratuitous benefit qualifying both transactions and associated operations. And though referring here to a scheme which does confer such a benefit, in the next paragraph (quoted at para 70 above), he referred to the conceded fact that the appointment conferred a gratuitous benefit on the son and the fact that that appointment would not have been made without the variation, and then said that it followed that the agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit (my emphasis). In my view, this passage, and in particular the reference to a scheme to confer a benefit shows that Lord Jauncey saw it as a necessary feature that the scheme should be one intended to confer a gratuitous benefit. The alternative scenario with which Lord Jauncey dealt in the following paragraph (p 176D) perhaps provides a little further help as to what he had in mind as to the workings of the requirement that the step be a contributory part of the scheme. In the alternative scenario, the agreement took place after the appointment. On Lord Jaunceys analysis, whilst associated with the appointment in accordance with the definition in section 44, it would not have been a relevant associated operation. What he saw as important, in that situation, was that, as a matter of fact, the agreement would have contributed nothing to the conferment of the gratuitous benefit which had already been effected by the appointment. Alternatively, he would have ruled it out on the basis that the transaction which was intended to confer gratuitous benefit had been completed before the agreement had been entered into, so that although it was an associated operation, it could not be said to have been made in that transaction. What remains is to consider how the requirement that associated operations form a part of and contribute to a scheme applies in the present case. It may help to commence that consideration by recalling that the scheme in the Macpherson case involved the variation agreement, on commercial terms, (which might be likened to the transfer to the PPP in this case), and the appointment, which conferred, and was intended to confer, gratuitous benefit (which might be likened to the omission in this case). As in Macpherson, so in the present case, the two steps are potentially relevant associated operations. In Macpherson, they were linked as part of the scheme to benefit the son and therefore reliance could not be placed on the section 20(4) exemption. But do the two steps here form a part of and contribute to a scheme which is intended to confer gratuitous benefit? Before moving to consider this, it might be helpful to look in a bit more detail at the circumstances of the Macpherson case. Paragraph 17 of the affidavit of the trust solicitor played an important part in the resolution of the dispute. Lord Jauncey quoted from it, at p 170H, as follows: It further appears from paragraph 17 of the affidavit of the trust solicitor that for reasons which it is not necessary to consider, the trustees: came to the conclusion that they ought not to exercise their power of appointment so as to give Mr David Robarts eldest son Timothy an interest in possession in the settled pictures unless the terms of the 1970 custody agreement were first reviewed and varied, since Mr David Robarts was not willing to continue, after such an appointment, to house the pictures on the terms of the 1970 custody agreement in its original form. This evidence from the trust solicitor was an important part of the Revenues case, as can be seen from what Lord Jauncey said at p 175C: Counsel for the Crown contended that as a matter of law the transaction which had to be looked at in section 20(4) was one which included a series of transactions and associated operations and that as matter of fact the disposition, being the 1977 agreement, was made in such a transaction. Counsel accepted that the terms of paragraph 17 of the affidavit of the trust solicitor were essential to the factual part of this proposition. As I see it, the crux of paragraph 17 of the affidavit was that the power of appointment would not have been exercised unless the 1970 agreement was first varied. The Revenues contention, as set out by Lord Jauncey, was that as [a] matter of fact, the 1977 agreement (by which that desired variation was achieved) was made in a transaction of the series of transactions and associated operations variety. And the terms of paragraph 17 of the affidavit were accepted to be essential to a conclusion that there was, indeed, in fact, a series comprising the 1977 agreement and the appointment. On the facts of the Macpherson case, it can be seen that the two steps in the series were clearly linked by a common intention. The present case is not so straightforward. Here, the FTT found that whatever the intent behind the omission, it was not linked with the transfer to the PPP in Mrs Staveleys mind (see para 32 above). In part this was because her intent in making the transfer was solely to break the connection with Morayford, and in part it was because her decision not to take lifetime benefits predated, and was independent of, the decision to transfer. The Court of Appeal considered the FTT to be mistaken in so finding (see para 46 above). Its conclusion was that, although Mrs Staveley made the transfer out of a desire to sever ties with Morayford, the only reasonable conclusion was that she also intended it to be the means by which the death benefits could be passed to her sons. The appellants challenge to the Court of Appeals approach to Transfer Issue 2 is put, in significant part, upon the basis that it is necessary for each transaction/associated operation to be qualified by an intent to confer gratuitous benefit, a proposition which I would reject for the reasons I have given earlier. But it is also submitted that, in order to reach its conclusion, the Court of Appeal interfered impermissibly with the FTTs findings of fact, failing to abide by the limitations imposed by Edwards v Bairstow [1956] AC 14. Furthermore, the Court of Appeals reasoning is, the appellants say, impossible to reconcile with its acceptance that the FTT was entitled to conclude that the transfer to the PPP was not of itself intended to confer a gratuitous benefit. In the appellants submission, the FTTs finding that the omission was not linked with the transfer should be restored, and it follows that the transfer was not part of a relevant scheme. HMRC respond with two alternative arguments concerning the FTTs findings of fact. First, they say that the appellants miscast what the FTT found. They point to the FTTs finding at para 16 (see para 26 above) about the importance Mrs Staveley attached to her sons benefitting from her estate. They also point out that the FTT found that the decision not to take lifetime benefits was a continuing decision, intended to benefit the sons, made in June 2006 and unchanged until her death. Whilst Mrs Staveley chose a different mechanism for her gift of death benefit to the sons, moving the funds to the PPP, the PPP was nevertheless intended to be the mechanism for the intended gift and, in their submission, linked with the omission as part of a scheme intended to confer gratuitous benefit. Secondly, and in the alternative, HMRC submit that in so far as the FTT ruled out any relevant link between the transfer and the omission, its finding was wrong, as the only rational conclusion was that in making the transfer into the PPP, as well as seeking to exclude her husband, Mrs Staveley intended to facilitate the gift to her sons of the death benefits. I have not found it at all easy to determine how the law should be applied to the facts in relation to Transfer Issue 2. In part this is because, quite exceptionally, the matter has reached this court with the factual matrix still the subject of significant debate. However, it is also because both sides arguments have force. The result seems to me to depend upon the degree to which one isolates Mrs Staveleys investment in the PPP from its context. Let us suppose that Mrs Staveley was taking out the PPP as her first investment in a pension. The investment was made at a time when (as the FTT found) she held a settled intention that, in order to confer a greater financial benefit on her sons, she would not draw lifetime benefits. The nomination of her sons in the Expression of Wish form shows that this was actively in her mind at the time of the transfer to the PPP. The PPP was the vehicle which would generate death benefits to pass on. It could properly be described, in my view, as a means by which the death benefits could be passed to them (see Newey LJ para 103(v), quoted at para 46 above). The second element in achieving that objective was that Mrs Staveley would not draw lifetime benefits. So far, the analysis supports a finding that the investment in the PPP and the omission to draw lifetime benefits were part of a scheme to confer benefit. But the PPP was not a first investment in a pension scheme. The funds were already invested in the section 32 policy, and Mrs Staveleys essential scheme, of not drawing a lifetime pension in order to benefit her sons by leaving them her death benefits, could have been achieved without any change of pension policy. Leaving to one side inheritance tax saving, upon which HMRC have not sought to rely at this stage of the analysis, and also the vexed question of Morayford, there was no need to transfer the funds at all and no benefit in doing so. The circumstances differ materially, therefore, from those in Macpherson. In Macpherson, the two elements under consideration were linked in the scheme by a common intention the trustees would not have made the appointment if the variation had not taken place and the scheme was one intended to confer, and actually conferring, gratuitous benefit on the son by the appointment of the pictures. The variation agreement therefore satisfied Lord Jaunceys requirements that it form a part of and contribute to a scheme which does confer a [gratuitous] benefit (my emphasis) and is intended to confer a gratuitous benefit. In the present case, the transfer to the PPP and the omission to take lifetime benefits were not, in fact, relevantly linked in a scheme. The omission had already been decided upon whilst the funds were in the section 32 policy and the sons could have benefitted from it without any move to the PPP. Moving the funds from one policy to the other (the transfer, focused upon by the Notice) was not a contributory part of the scheme to confer gratuitous benefit on the sons; it was a step taken solely to ensure that Morayford could not benefit, as the FTT were entitled to find on the very unusual evidence in this case. The omission and the transfer were not therefore, in my view, relevantly associated. I would therefore allow the appeal in relation to Transfer Issue 2. Section 3(3) and the omission: discussion It is common ground that Mrs Staveleys estate was diminished by her omission to exercise her right to lifetime benefits under her pension and that her sons received the resulting death benefits some months after her death. The dispute is as to whether it can be said that the value of another persons estate is increased by her omission, within the meaning of section 3(3) (as amended by section 156 of, and paragraph 8 of Schedule 20 to, the Finance Act 2006). The appellants say that it cannot because there is not a sufficient connection between the omission and the increase in value in the sons estates. They argue that for matters to come within section 3(3) the omission has to be the immediate cause of the increase in the value of anothers estate, with there being immediacy both in terms of timing and in terms of cause and effect. They point to various linguistic features of the section, notably the words increased by, and the use of the present tense (the value of a persons estate is diminished, and the value of another persons estate is increased). On their submission, the section will only apply where the omission directly causes the increase, not where it is purely something but for which the increase would not have taken place. They bolster their argument by referring to potential practical problems if section 3(3) applies in circumstances such as the present, given that it was not until six months after Mrs Staveleys death that the scheme administrator exercised the discretion in the sons favour. This shows, they say, that those who have to deliver an IHT account will not know for an indefinite period whether or not the deceaseds omission is to be treated as a disposition for IHT purposes. Consideration of this issue must proceed upon the basis that there was a genuine discretion to be exercised by the scheme administrator here. It was, of course, a discretion which need not have been exercised in the sons favour, there being others included in the class provided by the scheme rules. Notwithstanding this, I would conclude that the provisions of section 3(3) are satisfied and the omission is therefore a deemed disposition. I do not consider there is any mandate to import a temporal requirement into the subsection, requiring an immediate temporal link between the reduction in one estate and the increase in the other. There is a correlation of substance between the reduction and the increase, in that one results from the other, but they need not occur at precisely the same time. The use of the present tense upon which the appellants rely, does not dictate such a requirement. The present tense is used to identify two separate states of affairs which have to exist (is diminished and is increased by) but it does not follow that they have to exist at the same time or, putting it more exactly, one immediately following the other. That is not to say that questions of timing will be irrelevant to a determination of whether the subsection is satisfied. I agree with HMRCs submission that, as with all questions of causation, the evaluation of whether another persons estate is increased by the omission to exercise a right requires consideration of all the facts and circumstances. I turn therefore to look at the wider causation argument, bringing in the scheme administrators discretion. In this case, the omission yielded the death benefits that, in fact, increased the sons estates and I do not see the limited discretion of the scheme administrator as breaking the chain connecting the two events. To say that it did would be to adopt a narrow and legalistic approach to section 3(3) which does not seem to me to be appropriate. Putting it another way, the omission was the operative cause of the increase. As Newey LJ observed (para 109, see para 47 above), it may be that the increase in the sons estates could also be said to be brought about by the exercise of the administrators discretion, but that does not preclude a finding that they were increased by the omission. My view is reinforced by the fact that section 3(3) requires only that another persons estate is increased. It is not concerned with the identity of the other person. The benefits that were generated by Mrs Staveleys omission to draw her lifetime pension were undoubtedly going to increase another persons estate, even if the scheme administrator had not exercised its discretion in favour of the sons, but I would therefore dismiss the appeal in relation to the omission. instead chosen others from the list within the scheme rules. To my mind, this adds weight to an interpretation of the subsection which results in the omission in this case being deemed to be a disposition, and it deals also with the practical problem which the appellants suggested arose. The persons liable for tax might not have been identifiable, but it would have been clear from the date of Mrs Staveleys death that a charge to tax would arise by virtue of the omission. Overall conclusion It follows from the above that, in my view, the Court of Appeal properly found that Mrs Staveleys omission to draw lifetime benefits under the PPP should be treated as a disposition by virtue of section 3(3) IHTA, but that the transfer of funds from the section 32 policy to the PPP, whether taken alone or in the context of the omission, was not a transfer of value because section 10 IHTA applies. LORD HODGE: (dissenting in part) (with whom Lord Sales agrees) I am very grateful to Lady Black for her clear judgment. I agree with her on Transfer Issue 1 and on the question of section 3(3) of the Inheritance Tax Act 1984 (IHTA) and the omission. I have come to a different conclusion on Transfer Issue 2 and set out briefly the reasons for my view. The parties agreed and I accept that the law had been correctly stated by the House of Lords in Inland Revenue Comrs v Macpherson [1989] AC 159 (Macpherson). The case involved the interpretation and application of sections 20(4) and 44 of the Finance Act 1975 (FA 1975), which were substantially identical to sections 10 and 268 of the IHTA. Like Lady Black, I consider that the decision of the House of Lords requires close consideration. Macpherson was concerned with a discretionary settlement which had as its primary objects Mr Robarts and his family. The settled property came to include valuable pictures which were kept in houses owned by Mr Robarts and his wife. In 1970 the trustees of the settlement entered into an agreement with Mr Robarts (the 1970 agreement) whereby he undertook the custody, care and insurance of the pictures and to pay 100 per year for the enjoyment of them. Either side could terminate the agreement on three months notice. On 29 March 1977 the trustees and Mr Robarts entered into a further agreement (the 1977 agreement) to vary the 1970 agreement by reducing his annual payment and limiting his liability in respect of the insurance and loss of the pictures. The right to terminate the agreement on three months notice was removed and replaced with a provision continuing the 1970 agreement (as so amended) in force until 1 April 1991, unless Mr Robarts committed a serious breach of the agreement. On the following day, the trustees executed a deed of appointment appointing the pictures, subject to the agreements, on trusts under which Mr Robarts son, Timothy, took a protected life interest in possession. The trust solicitor gave evidence by affidavit that the trustees had concluded that they ought not to exercise their power of appointment to give Mr Robarts son an interest in possession in the pictures unless the 1970 agreement was first varied, because Mr Robarts was not willing to continue to house the pictures after such an appointment on the terms set out in the 1970 agreement. The 1977 agreement diminished the value of the pictures because it deferred the date at which they could be delivered to the open market. The Inland Revenue Commissioners (IRC) therefore sought to charge capital transfer tax in respect of the 1977 agreement. The disputed question was whether the 1977 agreement was not a transfer of value because it was a disposition which was not made in a transaction intended, to confer any gratuitous benefit on any person. Section 20(4) of the FA 1975, now section 10(1) of the IHTA, therefore occupied centre stage. Counsel for the trustees accepted that the 1977 agreement and the appointment were associated operations within the wide definition in section 44 of the FA 1975 (section 268 of the IHTA) but submitted that the only transaction was the 1977 agreement itself. The appointment was therefore not a relevant associated operation. Counsel for the IRC contended that a disposition could be made in a transaction which (under section 44 of the FA 1975) included a series of transactions and associated operations. The 1977 agreement was made in such a transaction because of the intention of the trustees recorded in the affidavit of the trust solicitor. The House of Lords did not accept the trustees submission. Lord Jauncey of Tullichettle, who gave the leading judgment, rejected the narrow interpretation of section 20(4). He held that the 1977 agreement was a disposition for the purposes of section 20(2) (now section 3(1) of the IHTA 1984) and section 20(4). He stated (p 174D E) that section 20(4) envisaged: two types of situation in which a disposition may not be a transfer of value, namely: (1) where the disposition stood alone and was not intended to confer any gratuitous benefit, and (2) where the disposition was not made in a transaction intended to confer any gratuitous benefit. He continued (p 174F G): In the second case the disposition would form one of a number of events of which the sum constituted the transaction which was relevant to intent. There is nothing in section 20(4) to require that the event, to use a neutral word, which results in the devaluation of the settled property must be looked at in isolation from all other events for the purposes of the subsection. If an individual took steps which devalued his property on Monday with a view to making a gift thereof on Tuesday he would fail to satisfy the requirements of section 20(4) because the act of devaluation and the gift would be considered together. If trustees in the circumstances envisaged in paragraph 6(3) took steps which devalued the settled property with the object of making subsequent distributions thereof why should the two events be considered as independent of one another? Neither law nor logic would suggest that they should. Lord Jauncey acknowledged that, in order to determine whether the 1977 agreement was made in a transaction, within the extended meaning of section 20(4) (ie a series of transactions and any associated operations), it was necessary to consider what were associated operations in section 44. He noted that the definition in that section was extremely wide and was capable of covering a multitude of events affecting the same property which might have little or no apparent connection between them (p 175D). He then set out how a limitation should be imposed on the concept of associated operations for the purpose of determining what constituted a transaction for the purposes of section 20(4). He stated (p 175G 176C): If the extended meaning of transaction is read into the opening words of section 20(4) the wording becomes: A disposition is not a transfer of value if it is shown that it was not intended, and was not made in a transaction including a series of transactions and any associated operations intended, to confer any gratuitous benefit So read it is clear that the intention to confer gratuitous benefit qualifies both transactions and associated operations. If an associated operation is not intended to confer such a benefit it is not relevant for the purpose of the subsection. That is not to say that it must necessarily per se confer a benefit but it must form a part of and contribute to a scheme which does confer such a benefit. In this case it is common ground that the appointment conferred a gratuitous benefit on Timothy. It is clear that the appointment would not have been made if the 1970 agreement had not been varied by that of 1977. It follows that the 1977 agreement was not only effected with reference to the appointment but was a contributory part of the scheme to confer a benefit on Timothy. So viewed there can be no doubt that the 1977 agreement, being the disposition for the purposes of section 20(4), was made in a transaction, consisting of the agreement and the appointment, intended to confer a gratuitous benefit on Timothy. (Emphasis added) Lord Jauncey then dealt with a submission by counsel for the trustees that it would be anomalous if the 1977 agreement were a relevant associated operation because double taxation would occur if the appointment had preceded the 1977 agreement. He rejected that submission for two reasons (p 176D E): first because the 1977 agreement would have contributed nothing to the conferment of the gratuitous benefit which had already been effected by the appointment, and alternatively, because the transaction intended to confer the gratuitous benefit had already been completed before the agreement was in place. In my view, Lord Jauncey limited the type of transaction or series of transactions and associated operations which were relevant for the purpose of section 20(4) (now section 10(1) of the IHTA) by requiring that the disposition in question formed part of and contributed to the transaction (or in his words the scheme) which conferred a gratuitous benefit. In Macpherson the transaction intended to confer a gratuitous benefit was put into effect when the appointment was made on the day following the execution of the 1977 agreement. On the facts of that case (viz the evidence of the trust solicitor which IRCs counsel accepted was critical to their case and to which Lady Black refers in paras 80 and 81 above), that appointment would not have been made unless the 1970 agreement had been varied. In other words, the intended result of the scheme to benefit Timothy (which I will call B) was achieved by the appointment itself but that appointment would not have happened without the prior step (which I will call A) which was the 1977 agreement. But Lord Jauncey did not set up a requirement that the disposition (A) had to be a necessary component of the scheme to achieve the result (B) but merely that A was effected with reference to the appointment and was a contributory part of the scheme to achieve the result B. In Mrs Staveleys case, she had formed an intention, some time before she decided to instruct the transfer, to use her pension pot in the section 32 policy to confer a gratuitous benefit on her sons by omitting to take lifetime benefits. If she did not take such benefits, the trustees on her death would have paid a lump sum to her estate by way of death benefit. The holding of the section 32 policy and the continued omission to take lifetime benefits were thus a transaction (or scheme) to confer gratuitous benefit on her sons. That transaction (or scheme) would not have been completed until she died: until then, her sons had no benefit. In this context the result of the scheme to confer benefit on her sons (B) would be achieved if she retained the section 32 policy and took no benefits (A). Because she did not wish her ex husband to benefit from the return of any surplus in her pension fund to Morayford Ltd, she instructed the transfer of her pension fund to the PPP and nominated her two sons to be considered by the pension scheme administrator as equal recipients of the death benefit. Before and after the transfer, the pension fund was earmarked to confer benefit on her sons. By so acting she created an alternative mechanism by which to give effect to her intention to confer that gratuitous benefit. Mrs Staveley could have prevented Morayford Ltd from benefitting from the surplus in her fund by other means. But she did not do so. The transfer and the nomination in favour of her sons were, on the FTTs findings of fact, made when Mrs Staveley had a continuing intention to confer that benefit on her sons. In other words, by replacing step A (the combination of the holding of section 32 policy and the intention not to take life benefits) with step C (the combination of the transfer to the PPP, the nomination and the same intention) she created an alternative means of achieving the result B. These circumstances clearly differ from the factual circumstances in Macpherson, as the transfer to the PPP was not a necessary step to achieve the result B because of the pre existence of the section 32 policy. Where I find myself in respectful disagreement with Lady Black is that (in para 88 above) she sees as a critical distinction from Macpherson the fact that in this case the sons could have benefitted from [the section 32 policy] without any move to the PPP. That distinction rests on Mrs Staveleys ability to achieve the result B before the transfer, with the result that the transfer was not necessary. It excludes the possibility of the transfer to the PPP being part of a scheme to achieve result B because it was not needed to achieve that result. That is to impose a test of necessity in relation to step C, which Macpherson does not support. In my view, on the facts found by the FTT, the transfer itself was not motivated by the wish to give gratuitous benefit to her sons but it and the nomination were nonetheless referable to and a contributory part of a substituted scheme to enable them to receive the death benefit. That fails to meet the requirements of section 10(1) of the IHTA. I therefore agree with the reasoning of Newey LJ in para 103 of his judgment. I conclude that the Court of Appeal were correct to find an error of law in the FTTs determination on Transfer Issue 2. I would hold that the transfer and nomination taken with the omission were a transfer of value because they do not meet the requirements of section 10 of the IHTA. I would have dismissed the appeal on the section 10 ground also.

During her marriage, Mrs Staveley and her husband set up a company. She had a pension fund with the companys occupational scheme, and this fund was transferred to another pension scheme (the pension scheme) for her when she and her husband divorced. In December 2006, Mrs Staveley died. Shortly before her death, she transferred funds from the pension scheme into a personal pension plan (PPP). The transfer was motivated by Mrs Staveleys desire to ensure that her ex husband did not benefit from the return to the company of any surplus in the fund. She did not take any pension benefits during her life and, in those circumstances, death benefit was payable under the PPP. Mrs Staveley nominated her two sons as beneficiaries of the death benefit, subject to the discretion of the pension scheme administrator. After her death, the death benefit was paid to them. Her Majestys Revenue and Customs (HMRC) determined that inheritance tax was due on the death benefit, on the basis that both the transfer of funds from the pension scheme into the PPP, and Mrs Staveleys omission to draw any benefits from the plan before her death, were lifetime transfers of value within section 3 of the Inheritance Tax Act 1984 (IHTA). The issue in this appeal is whether HMRC were right to take that view. The appellants are the three executors of Mrs Staveleys estate (her two sons and a solicitor, Mr Parry). They argue that inheritance tax is not payable, either on the transfer of funds into the PPP (the transfer) or on Mrs Staveleys omission to draw pension benefits from the PPP (the omission). The issue has divided the courts below. The First tier Tribunal (Tax Chamber) held that inheritance tax was due on the omission but not the transfer. The Upper Tribunal (Tax and Chancery Chamber) disagreed, finding that no inheritance tax was payable on either transaction. The Court of Appeal held that both the transfer and the omission gave rise to a charge to inheritance tax. By a majority, the Supreme Court partially allows the appeal, holding that the omission gave rise to a charge to inheritance tax, but the transfer did not. Lady Black gives the lead judgment, with which Lord Reed and Lord Kitchin agree. Lord Hodge gives a separate judgment, dissenting in part, with which Lord Sales agrees. Inheritance tax is chargeable on the value transferred by a disposition which is a transfer of value under the IHTA. Section 3(3) IHTA extends the meaning of disposition to include deliberate omissions by which the disponors estate is diminished and the value of another persons estate is increased. Section 10(1) IHTA provides that a disposition that was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person is not a transfer of value and so does not give rise to a charge to inheritance tax. Section 10(3) IHTA provides that a transaction for section 10(1) purposes includes a series of transactions and any associated operations [6 13]. In the lead judgment, Lady Black sets out the three issues that arise on the appeal: (1) whether section 10 IHTA applies to the transfer as a disposition viewed on its own, i.e. whether the transfer was not intended to confer any gratuitous benefit on any person (Transfer Issue 1); (2) whether section 10 IHTA applies to the transfer looked at in its wider context, i.e. whether the transfer was not made in a transaction intended to confer any gratuitous benefit on any person (Transfer Issue 2); and (3) whether the terms of section 3(3) are satisfied in respect of the omission, i.e. whether, by her omission to draw pension benefits from the PPP, the value of Mrs Staveleys estate was diminished and the values of her sons estates were increased (Omission Issue) [17 20]. Transfer Issue 1 (transfer on its own) Section 10 IHTA applies where the overall effect of the disposition is not intended by the disponor to confer a gratuitous benefit. In the present case, the transfer had not been motivated by any intention to improve the sons position. Mrs Staveleys sole intention in transferring the funds was to eliminate any risk that any part of the funds might be returned to her ex husband. The mere fact that the sons inheritance was intended to be enjoyed in a different legal form after the transfer did not mean that Mrs Staveley intended to confer a gratuitous benefit her sons. When viewed on its own, section 10 IHTA applied to the transfer [65, 66]. Transfer Issue 2 (transfer and omission as associated operations) The parties accepted that, in omitting to draw lifetime benefits under the PPP, part of Mrs Staveleys intention was to benefit her sons. The question for the Supreme Court was whether this intention coloured the transfer with an intention to confer gratuitous benefit which the transfer would not have on its own. The majority of the Supreme Court did not accept, as the Court of Appeal had found, that the omission and the transfer together formed part of a scheme (a series of transactions and any associated operations) intended to confer a gratuitous benefit. The present case could be distinguished from Inland Revenue Comrs v Macpherson [1989] AC 159, where the House of Lords had found that a series of operations formed part of a such a scheme and so gave rise to tax. In Macpherson, the operations under consideration had been clearly linked by a common intention. In contrast, in the present case, Mrs Staveleys essential scheme had been her omission to draw a lifetime pension in order to benefit her sons by leaving them her death benefits. That could have been achieved without the transfer. Accordingly, the transfer and the omission were not linked by a common intention and did not form part of a single scheme intended confer a gratuitous benefit on any person. Section 10 IHTA therefore applied to the transfer, even when viewed in its wider context. It followed that the transfer did not give rise to a charge to inheritance tax [67, 88]. The Omission Issue The limited discretion of the pension scheme administrator did not break the chain connecting the omission and the payment of the death benefit. The omission was the operative cause of the increase in the sons estates and therefore gave rise to a charge to inheritance tax under section 3(3) IHTA [94]. Lord Hodge would have dismissed the appeal in relation to the transfer and the omission. He agrees with Lady Black on Transfer Issue 1 and the Omission Issue but reaches a different conclusion on Transfer Issue 2. The transfer, when taken with the omission and the nomination of the sons as beneficiaries of the death benefit, formed a contributory part of a scheme to confer a gratuitous benefit. Mrs Staveleys intention to benefit her sons pre dated the transfer and was reflected in her nomination in the PPP. Therefore, he concludes, section 10 does not apply and tax ought to be payable [104, 109].

This litigation arises from alleged toxic emissions from the Nchanga Copper Mine in the Chingola District of Zambia. The claimants, who are the respondents to this appeal, are a group currently consisting of some 1,826 Zambian citizens who live in four communities within the Chingola District. They are, by any standards, very poor members of rural farming communities served by watercourses which provide their only source of water for drinking (by themselves and their livestock) and irrigation for their crops. They say that both their health and their farming activities have been damaged by repeated discharges of toxic matter from the Nchanga Copper Mine into those watercourses, from 2005 to date. The Nchanga Copper Mine (the Mine) consists, in part, of an open cast mine, said to be the second largest in the world, and in part of a deep mine. Its immediate owner is the second defendant Konkola Copper Mines plc (KCM), which is a public company incorporated in Zambia. KCM is the largest private employer in Zambia, employing some 16,000 people, mainly at the Mine. The first defendant Vedanta Resources plc (Vedanta) is the ultimate parent company of KCM. It is the parent of a multinational group, listed on the London Stock Exchange, with interests in minerals, power, oil and gas in four continents. Vedanta is incorporated and domiciled in the United Kingdom. Although Vedanta claims only to have 19 employees of its own, eight of whom are its directors, the Vedanta Group employs some 82,000 people worldwide. KCM is not a 100% subsidiary of Vedanta, since the Zambian government has a significant minority stake, but materials published by Vedanta state that its ultimate control of KCM is not thereby to be regarded as any less than it would be if wholly owned. The claims against both defendants are pleaded in common law negligence and breach of statutory duty. Those causes of action are pursued against KCM on the basis that it is the operator of the Mine. As against Vedanta, the same causes of action are said to arise by reason of the very high level of control and direction that the first defendant exercised at all material times over the mining operations of the second defendant and its compliance with applicable health, safety and environmental standards: (Particulars of Claim, para 79). This appeal is all (and only) about jurisdiction; that is, the jurisdiction of the courts of England and Wales to determine those claims against both defendants. As against Vedanta, the claimants rely upon article 4 of the Recast Brussels Regulation (Regulation (EU) 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters). As against KCM the claimants rely upon what may loosely be called the necessary or proper party gateway of the English procedural code for permitting service of proceedings out of the jurisdiction, now to be found mainly in para 3.1 of CPR Practice Direction 6B. The procedural background to this appeal is, in outline, as follows. The claimants issued the Claim Form in July 2015. Vedanta was served within the jurisdiction. Service was effected on KCM out of the jurisdiction pursuant to permission obtained on a without notice application on 19 August 2015. Both Vedanta and KCM applied to challenge jurisdiction, in September and October 2015 respectively. Their applications were heard together, over three days in April 2016, by Coulson J, who delivered a comprehensive reserved judgment dismissing them on 27 May 2016 [2016] EWHC 975 (TCC). The defendants appeals were heard over two days in July 2017 and dismissed, again in a comprehensive reserved judgment, in October 2017 [2018] 1 WLR 3575. The defendants further appeals to this court were heard, again over two full days, in January 2019. Proportionality It is necessary to say something at the outset about the disproportionate way in which these jurisdiction issues have been litigated. In Spiliada Maritime Corpn v Cansulex Ltd (the Spiliada) [1987] AC 460, 465, Lord Templeman said this, about what was, even then, the disproportionate manner in which jurisdiction challenges were litigated: In the result, it seems to me that the solution of disputes about the relative merits of trial in England and trial abroad is pre eminently a matter for the trial judge. Commercial Court judges are very experienced in these matters. In nearly every case evidence is on affidavit by witnesses of acknowledged probity. I hope that in future the judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Chieveley in this case in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days. An appeal should be rare and the appellate court should be slow to interfere. That dictum is, in my mind equally applicable to all the judges in what are now the Business and Property Courts of England and Wales, including, as in this case, the Technology and Construction Court. That requirement for proportionality, and for respect to be given to first instance decisions on jurisdiction, has been repeated, perhaps in less colourful terms, in numerous subsequent cases. In VTB Capital plc v Nutritek International Corpn [2013] 2 AC 337, Lord Neuberger of Abbotsbury said this, at paras 82 to 83: 82. The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights. 83. Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial. At para 84 Lord Neuberger cited dicta to the same effect by Waller LJ in Cherney v Deripaska (No 2) [2010] 2 All ER (Comm) 456, para 7, in which he concluded that it would have been better for both parties and better use of court time if they had expended their money and their energy on fighting the merits of the claim. Jurisdiction challenges frequently raise questions about whether the claim against one or more of the defendants raises a triable issue. As it is now common ground, this broadly replicates the summary judgment test. Issues of this kind are, regardless whether contained within jurisdiction disputes, subject to a similar requirement for proportionality, the avoidance of mini trials and the exercise of judicial restraint, in particular in complex cases, as was emphasised in the following well known passage from the speech of Lord Hope of Craighead in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1: 94. For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is what is to be the scope of that inquiry? I would approach that further question in this way. The 95. method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman [[2001] 1 All ER 91], at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. 96. In Wenlock v Moloney [1965] 1 WLR 1238 the plaintiffs claim of damages for conspiracy was struck out after a four day hearing on affidavits and documents. Danckwerts LJ said of the inherent power of the court to strike out, at p 1244B C: this summary jurisdiction of the court was never intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that power. The extent to which these well known warnings have been ignored in this litigation can be measured by the following statistics about the materials placed before this court. The parties two written cases (ignoring annexes) ran to 294 pages. The electronic bundles included 8,945 pages. No less than 142 authorities were deployed, spread over 13 bundles, in relation to an appeal which, on final analysis, involved only one difficult point of law. A particular reason for the requirement to exercise proportionality in jurisdiction disputes of this kind is that, in most cases, they involve a contest between two competing jurisdictions in either of which the parties could obtain substantial justice. The exception, an issue whether substantial justice is obtainable in one of the competing jurisdictions, may require a deeper level of scrutiny, not least because a conclusion that a foreign jurisdiction would not provide substantial justice risks offending international comity. Such a finding requires cogent evidence, which may properly be subjected to anxious scrutiny. Nonetheless, the fact that such an issue arises in a particular case (as in this appeal) is no excuse for ignoring the requirement for proportionality in relation to all the other issues. Judicial restraint is of particular importance in relation to jurisdiction disputes which, wholly exceptionally, reach this court, in particular in cases such as the present, where the Court of Appeal has already concurred with the fact finding and evaluative analysis of the first instance judge. The essential business of this court is to deal with issues of law, rather than fact finding or the re exercise of discretion. The pursuit of detailed matters of factual (or evaluative) analysis in this court is therefore inappropriate, both because it is likely to involve a needless and useless misapplication of the parties time and resources, and because it distracts this court from its proper focus upon real issues of law. Nor is it permissible to dress up what is in reality a factual dispute as if it were, or involved, a misdirection in law by the first instance judge. As will appear, a telling example in the present case is the appellants assertion that Coulson J applied an insufficiently rigorous or detailed analysis of the claimants pleaded case against Vedanta, for the purpose of deciding whether it disclosed a real issue to be tried. Within every jurisdiction dispute, or embedded question whether there is a triable issue, the first instance judge faces a typical quandary: how to balance the requirement for proportionality against the need to ensure that resources are not wasted on an unnecessary trial. The choice, at how deep a level of detail to conduct that analysis and then in how much detail to express conclusions in a judgment, are matters for the experienced first instance judge, with which an appellate court should be slow to interfere. The fact that it has been necessary, despite frequent judicial pronouncements to the same effect, yet again to emphasise the requirements of proportionality in relation to jurisdiction appeals, suggests that, unless condign costs consequences are made to fall upon litigants, and even their professional advisors, who ignore these requirements, this court will find itself in the unenviable position of beating its head against a brick wall. The issues on this appeal Although technically there are two appeals, one by each of the defendants, they are closely interrelated and the proceedings before this court are best understood as a single appeal. The issues, and the interrelationship between them, can most easily be summarised by reference to the structure applicable to the establishment of jurisdiction in claims against defendants one of which is domiciled within, and the other without, the jurisdiction of the English court. The defendant domiciled here will be referred to as the anchor defendant. The defendant domiciled abroad will be referred to as the foreign defendant. The essential structure is common ground and may therefore be briefly summarised. the Recast Brussels Regulation, which provides that: Jurisdiction against the anchor defendant derives directly from article 4.1 of Subject to this Regulation, persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state. That basic provision is designed not only for the protection of EU domiciliaries, but also to enable a claimant to know, with reasonable certainty, where he may sue. In Owusu v Jackson (Case C 281/02) [2005] QB 801 the Court of Justice held, contrary to earlier English jurisprudence, that this conferred a right on any claimant (regardless of their domicile) to sue an English domiciled defendant in England, free from jurisdictional challenge upon forum non conveniens grounds, even where the competing candidates for jurisdiction were England (part of a member state) and some other non member state such as, here, Zambia. The decision related to article 2 of the earlier Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968, which was in identical terms to the present Recast Brussels Regulation. This does not, of course, prevent any defendant from seeking to have a claim struck out as an abuse of process or as disclosing no reasonable cause of action, or from seeking reverse summary judgment upon the basis that the claim discloses no triable issue against that defendant. Vedanta has not pursued a strike out or summary judgment application of that kind, but both it and KCM assert that the claimants pleaded case and supporting evidence disclose no real triable issue against Vedanta, because Vedanta cannot be shown to have done anything in relation to the operation of the Mine sufficient either to give rise to a common law duty of care in favour of the claimants, or a statutory liability as a participant in breaches of Zambian environmental protection, mining and public health legislation. Vedanta was, it is said, merely an indirect owner of KCM, and no more than that. Secondly, Vedanta maintains that, even if the pleaded claim discloses a triable issue against it, nonetheless the claim should be stayed as an abuse of EU law, because the claimants are using a claim against Vedanta in England purely as a vehicle for attracting English jurisdiction against their real target defendant, KCM, by means of the necessary or proper party gateway. Both these submissions were rejected by the judge, and by the Court of Appeal, but are pursued here, with the requisite permission of this court. Further, the appellants submit that the issue as to abuse of EU law deserves a reference to the Court of Justice. The claimants invocation of English jurisdiction as against KCM depends, as already noted, upon the necessary or proper party gateway. This forms a long established part of English private international law which, pursuant to article 6.1 of the Recast Brussels Regulation, is determinative of the jurisdiction of the English courts against a defendant, like KCM, not domiciled in a member state. The necessary or proper party gateway long ante dates the Civil Procedure Rules but is now enshrined in Part 6 Practice Direction B para 3.1 as follows: The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where (3) A claim is made against a person (the defendant) on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and there is between the claimant and the (a) defendant a real issue which it is reasonable for the court to try; and (b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim. The express terms of the Practice Direction set out only part of what a claimant relying upon the necessary or proper party gateway must show. It is common ground that, by reference to those terms and well settled authority, the claimant must demonstrate as follows: that the claims against the anchor defendant involve a real issue to be if so, that it is reasonable for the court to try that issue; that the foreign defendant is a necessary or proper party to the claims i) tried; ii) iii) against the anchor defendant; iv) success; v) that, either, England is the proper place in which to bring the combined claims or that there is a real risk that the claimants will not obtain substantial justice in the alternative foreign jurisdiction, even if it would otherwise have been the proper place, or the convenient or natural forum. that the claims against the foreign defendant have a real prospect of As already noted, the question whether the claims disclose a real triable issue against Vedanta is a main issue on this appeal. It is however accepted that, if the claimants surmount this hurdle, it would be reasonable for the English court to try that issue, and that KCM would be at least a proper party to the claims against Vedanta. It is also (now) common ground that the claims against KCM have a real prospect of success. Both the judge and the Court of Appeal found in the claimants favour on real issue and proper place. In addition, they both found that, even if Zambia would otherwise have been the proper place in which to bring the claims, there was a real risk that the claimants would not obtain substantial justice in the Zambian jurisdiction. Those questions remain in issue on this appeal. In the remainder of this judgment, the issues will be addressed in the following order: i) Abuse of EU law. ii) Real issue as against Vedanta. iii) Proper place. iv) Substantial justice. Abuse of EU law The essence of the appellants case under this heading may be summarised as follows. First, it is an abuse of EU law to use article 4 of the Recast Brussels Regulation as a means of enabling claimants to establish jurisdiction against an anchor defendant for the collateral purpose of attracting a member states international jurisdiction against foreign defendants, who are the real targets of the claim. It is said that, whereas article 4 is designed to protect defendants domiciled within the EU, this abuse exposes to litigation domiciled parent companies who would not, apart from their status as anchor defendants, otherwise be sued at all. The judges response was to acknowledge that there might be an abuse if the pursuit of the anchor defendant had been for the sole purpose of attracting jurisdiction as against the foreign defendant, but not otherwise. He found, on the facts, that although the prospect of attracting jurisdiction against KCM was a substantial reason why the claimants sued Vedanta in England, it was not their only reason. They had a bona fide claim, disclosing a real issue for trial, against Vedanta and a desire to obtain judgment against Vedanta rather than merely against KCM, because of a perception, supported by some evidence, that KCM might prove to be of doubtful solvency. Faced with those findings of fact as to the claimants motivation, the appellants pursue this ground of appeal upon the basis that the judges application of a sole purpose test for abuse of EU law was too narrow or, at least, not acte clair, thereby necessitating a reference to the Court of Justice. For the purposes of analysis, the abuse of EU law claim needs to be approached upon the assumption, but without at this stage deciding, that the claim discloses a real triable issue as against Vedanta. If it does not, then Vedanta falls away as an anchor defendant, and the necessary or proper party gateway, as against KCM, closes. Furthermore, as will appear, I consider that the judges conclusion that the claim discloses a real triable issue as against Vedanta cannot be overturned in this court. Nor can the judges conclusion that Vedanta was not sued by the claimants in England for the sole purpose of attracting English jurisdiction over KCM be challenged on this appeal. His conclusion that Vedanta was sued in England for the genuine purpose of obtaining damages, albeit that attracting English jurisdiction over KCM was an important contributor to that decision, was a finding of fact. Although arrived at by a necessarily summary process which did not permit cross examination of the claimants witness evidence as to motive, it was well supported by evidence that the claimants risked finding, after obtaining judgment against KCM, that it was unable to pay the judgment debt. The judges findings of fact on this issue were endorsed by the Court of Appeal (at para 38 per Simon LJ). They were final findings, in the sense that those factual issues will not be revisited at any later stage in the proceedings. It is contrary to the practice of this court to re open concurrent factual findings made in both the courts below. To be fair, counsel for each of the appellants made no significant effort to do so. basis that: a) b) Vedanta; but, c) one of the principal reasons (although not the sole reason) why the claimants sued Vedanta in England was so as to be able, by the use of article 4 and the necessary or proper party gateway in conjunction, to sue KCM in England as well. the claimants have pleaded a real triable issue against Vedanta; the claimants genuinely desire to obtain judgment for damages against I therefore approach the legal analysis of this abuse of EU law issue on the On that factual basis, I am satisfied, to the extent that the point is acte clair, that the EU principle of abuse of law does not avail the appellants. The starting point is the need to recognise that, following Owusu v Jackson, what is now article 4.1 lays down the primary rule regulating the jurisdiction of each member state to entertain claims against persons domiciled in that state. The Recast Brussels Regulation itself (like its predecessors) contains a number of express provisions which derogate from that primary rule. As exceptions to it, they are all to be narrowly construed. If, therefore, the Recast Brussels Regulation also contains (as it probably does) an implied exception from the otherwise automatic and mandatory effect of article 4, based upon abuse of EU law, then that is also an exception which is to be narrowly construed. The centrality of article 4, as the basis of member states jurisdiction over their own domiciliaries, is laid down not only in Owusu v Jackson itself, but in a series of later authorities, and fully recognised by academic writers, even those who, prior to Owusu v Jackson, had taken the opposite view where the relevant competition between jurisdictions lay between a member state and a non member state. Decisions of the Court of Justice which have re emphasised the centrality of article 4, and the need to construe any exceptions or derogations from it restrictively, include Melzer v MF Global UK Ltd (Case C 228/11) [2013] QB 1112, at paras 23 to 24 of the judgment. Dicta in the English courts to the same effect include, in this court, A v A (Children: Habitual Residence) [2014] AC 1, per Lady Hale at para 31 and, more recently, AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH [2018] AC 439, per Lord Hodge at para 13. Distinguished academics who are (now) of the same view include Professor Adrian Briggs who in Private International Law in English Courts (2014), at para 4.362, concludes that, since Owusu, the ship has now sailed and in Civil Jurisdiction and Judgments, 6th ed (2015), at para 2.304, that the answer is clear, and debate has moved on. Of the same view are (now) the editors of Dicey, Morris & Collins on Conflict of Laws, 15th ed (2012), at para 12 020. There are a small number of cases in the Court of Justice where either the Court or the Advocate General has addressed specifically the question of abuse of law in the context of the Recast Brussels Regulation and its predecessors. They mainly concern the alleged abusive use of article 8.1 (formerly article 6.1) as a means of circumventing article 4 (formerly article 2). Article 8.1 contains provision (in a much more mechanical form than the English forum conveniens doctrine) for a limited departure from article 4, by providing that: A person domiciled in a member state may also be sued: 1) Where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings; It is therefore a limited form of necessary or proper party gateway out of the strictures of article 4. When read with the enabling words of article 5, it gives the claimant a choice to sue an EU domiciled defendant in a member state other than that of its domicile in order to avoid the risk of irreconcilable judgments. It is of no direct relevance in the present case because there is no co defendant to the claim against Vedanta domiciled in another member state. Since article 8.1 is itself to be restrictively interpreted because it derogates from the primary rule of jurisdiction in article 4, it might be thought that the Court of Justice would liberally apply an abuse of law principle where it perceived that article 8 was being misused as a means of circumventing article 4. Nonetheless the cases show that abuse of EU law has been restrictively interpreted, even in that context. In Freeport plc v Arnoldsson (Case C 98/06) [2008] QB 634 the claimant sought to use article 6.1 of the Judgments Regulation (EC) No 44/2001 (the predecessor of article 8.1) as a means of invoking the jurisdiction of the Swedish courts over a claim against an English company, because a Swedish company was a co defendant. One of the objections raised by the English defendant was that the claimant was making an abusive use of article 6.1, by joining the Swedish company as a vehicle for that purpose, so as to disable the primary rule (then in article 2) requiring the English company to be sued in England. At para 66 of his opinion, Advocate General Mengozzi said that in order to disapply article 6.1 it would be necessary to show not merely that the claimant had joined the Swedish defendant for the sole object of removing one of those defendants from the courts of his own domicile but also that it would be necessary to show, not merely fraudulent or wrongful intent, but that the action bought against the defendant domiciled in the forum member state appears to be unfounded manifestly unfounded in all respects to the point of proving to be contrived or devoid of any real interest for the claimant. Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV (Evonik Degussa GmbH intervening) (Case C 352/13) [2015] QB 906 was another case about an alleged abuse of article 6.1 in an international cartel case against defendants domiciled in a number of member states. It was said that the claimants had deliberately delayed settlement of a claim against a German defendant for the purpose of attracting the jurisdiction of the German courts against co defendants domiciled in other member states, thereby committing an abuse of article 6.1. Advocate General Jskinen advised, at para 84 of his opinion, that: In accordance with the courts consistent case law, the rule [on jurisdiction laid down in article 6(1) of the Brussels I Regulation] cannot be interpreted in such a way as to allow a plaintiff to make a claim against a number of defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the member state in which that defendant is domiciled (my emphasis). In its judgment, the Court of Justice expressly affirmed that opinion in para 27, adding at para 33 that in the context of cartel cases nothing short of collusion between the claimant and the anchor defendant would be sufficient to engage the abuse of law principle. Those decisions of the Court of Justice show that, even before the Freeport case, there was an established line of authority which limited the use of the abuse of EU law principle as a means of circumventing article 6 (now article 8) to cases where the ability to sue a defendant otherwise than in the member state of its domicile was the sole purpose of the joinder of the anchor defendant. Even though there appears to be no authority directly upon abuse of EU law in relation to article 4 itself (or its predecessors), the need to construe any express or implied derogation from article 4 restrictively would appear to make the position a fortiori in relation to article 4, as indeed the judge himself held. But the matter does not stop there. Such jurisprudence as there is about abuse of EU law in relation to jurisdiction suggests that the abuse of law doctrine is limited to the collusive invocation of one EU principle so as improperly to subvert another. In the present case the position is quite different. The complaint is that article 4 is being used as a means of circumventing or misusing the English national regime for the identification of its international jurisdiction over persons not domiciled in any member state: ie the forum conveniens jurisprudence and, specifically, the necessary or proper party gateway. This complaint forms a central theme in the appellants submissions not only about abuse of EU law, but also about the necessary or proper party gateway itself. It is worth close examination at this stage because, to the extent that it is well founded, it raises the question whether the remedy (if any) for its adverse consequences is to be found in EU law or in the English private international law traditionally called the forum conveniens doctrine. Prior to Owusu v Jackson (although, as is now recognised, illegitimately once the UK had become a member state) the English courts took a two handed approach to any attempt to use the ability to serve an anchor defendant (domiciled in England) as of right, coupled with invocation of the necessary or proper party gateway as the basis for obtaining permission to serve a foreign defendant out of the jurisdiction in cases where, leaving aside the risk of irreconcilable judgments, the natural forum was the jurisdiction where the foreign defendant was domiciled. With one hand, the court could refuse (or set aside) permission to serve the foreign defendant out of the jurisdiction. With the other hand the court could stay the proceedings against the anchor defendant, in both cases on the basis that the foreign jurisdiction was the forum conveniens (or using the CPR English equivalent, the proper place) for the conduct of the litigation as a whole. By dealing with the claims against both defendants, the English court thereby neatly avoided the risk of irreconcilable judgments or multiplicity of proceedings. Following Owusu v Jackson the English court has one hand tied behind its back. No more can it stay the proceedings against the anchor defendant on forum conveniens grounds. This is the precise ratio of Owusu v Jackson, and the Court of Justice was fully aware of the difficulties which that conclusion would be likely to cause in the traditional exercise of the English courts forum conveniens jurisprudence in such cases. The result is, in a case (such as the present) where the English court is persuaded that, whatever happens to the claim against the foreign defendant, the claimants will in fact continue in England against the anchor defendant, the risk of irreconcilable judgments becomes a formidable, often insuperable, obstacle to the identification of any jurisdiction other than England as the forum conveniens. Thus not only is one of the courts hands tied behind its back, but the other is, in many cases, effectively paralysed. In the context of group litigation about environmental harm, the appellants say that it has the almost inevitable effect that, providing a minimum level of triable issue can be identified against an English incorporated parent, then litigation about environmental harm all around the world can be carried on in England, wherever the immediate cause of the damage arises from the operations of one of that groups overseas subsidiaries. Two consequences flow from that analysis. The first is that, leaving aside those cases where the claimant has no genuine intention to seek a remedy against the anchor defendant, the fact that article 4 fetters and paralyses the English forum conveniens jurisprudence in this way in a necessary or proper party case cannot itself be said to be an abuse of EU law, in a context where those difficulties were expressly recognised by the Court of Justice when providing that forum conveniens arguments could not be used by way of derogation from what is now article 4. The second is that to allow those very real concerns to serve as the basis for an assertion of abuse of EU law would be to erect a forum conveniens argument as the basis for a derogation from article 4, which is the very thing that the Court of Justice held in Owusu v Jackson to be impermissible. In my view, if there is a remedy for this undoubted problem, it lies in an appropriate adjustment of the English forum conveniens jurisprudence, not so as to permit the English court to stay the proceedings against the anchor defendant, if genuinely pursued for a real remedy, but rather to temper the rigour of the need to avoid irreconcilable judgments which has, thus far, served to disable the English court from concluding that any jurisdiction other than its own is the forum conveniens or proper place for the litigation of the claim against the foreign defendant. As will appear, I consider that there is a solution to this difficulty along those lines, where the anchor defendant is prepared to submit to the jurisdiction of the domicile of the foreign defendant in a case where, as here, the foreign jurisdiction would plainly be the proper place, leaving aside the risk of irreconcilable judgments. For those reasons I would resolve the abuse of EU law issue in favour of the claimants, without any need for a reference to the Court of Justice. Real issue to be tried as against Vedanta The single task of the judge under this heading was to decide whether the claim against Vedanta could be disposed of, and rejected, summarily, without the need for a trial. This is because, although Vedanta made no reverse summary judgment application of its own, the assertion by a foreign defendant seeking to set aside permission to serve outside the jurisdiction under the necessary or proper party gateway that the claim against the anchor defendant discloses no real issue to be tried involves, as is now agreed, a summary judgment test: see Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804, per Lord Collins of Mapesbury at para 82. That was a case about the civil procedure rules of the Isle of Man but the Judicial Committee of the Privy Council treated those provisions as in substance no different in their effect from those in the English Civil Procedure Rules: see para 67. Summary judgment disputes arise typically, and real triable issue jurisdiction disputes arise invariably, at a very early stage in the proceedings. In the context of a jurisdiction challenge the court will, typically, have only the claimants pleadings. Proportionality effectively prohibits cross examination and neither party will have had the benefit of disclosure of the opposing partys documents, albeit that in exceptional circumstances a direction for limited specific disclosure may be given: see Rome v Punjab National Bank (No 1) [1989] 2 All ER 136, per Hirst J, para 141 and Flatela Vava v Anglo American South Africa Ltd [2012] EWHC 1969 (QB). No order for limited disclosure was sought or made in the present case. The extent to which the absence of disclosure of defendants documents may impede claimants in demonstrating a triable issue depends of course upon what are said to be the defects in its case. In the present case the critical question is whether Vedanta sufficiently intervened in the management of the Mine owned by its subsidiary KCM to have incurred, itself (rather than by vicarious liability), a common law duty of care to the claimants or, (on the claimants expert evidence), a fault based liability under the Zambian environmental, mining and public health legislation in connection with the escapes of toxic materials from the Mine alleged to have caused the relevant harm. The level of intervention in the management of the Mine requisite to give rise to a duty of care upon Vedanta to persons living, farming and working in the vicinity is (as is agreed) a matter of Zambian law, but the question whether that level of intervention occurred in the present case is a pure question of fact. I make no apology for having suggested during argument that it is blindingly obvious that the proof of that particular pudding would depend heavily upon the contents of documents internal to each of the defendant companies, and upon correspondence and other documents passing between them, currently unavailable to the claimants, but in due course disclosable. This poses a familiar dilemma for judges dealing with applications for summary judgment. On the one hand, the claimant cannot simply say, like Mr Micawber, that some gaping hole in its case may be remedied by something which may turn up on disclosure. The claimant must demonstrate that it has a case which is unsuitable to be determined adversely to it without a trial. On the other, the court cannot ignore reasonable grounds which may be disclosed at the summary judgment stage for believing that a fuller investigation of the facts may add to or alter the evidence relevant to the issue: see Tesco Stores Ltd v Mastercard Inc [2015] EWHC 1145, per Asplin J at para 73. The main thrust of the appellants case under this heading was that a conclusion that Vedanta had incurred a duty of care to the claimants would involve a novel and controversial extension of the boundaries of the tort of negligence, beyond any established category, calling for a cautious incremental approach by analogy with established categories, which therefore required a detailed investigation of the claimants case, which neither the judge nor the Court of Appeal carried out. It was submitted therefore that this court needed to carry out that detailed analysis. For that purpose Mr Charles Gibson QC for KCM undertook, mainly in writing, a thorough review of the appellants published documents describing their relationship, and Mr Richard Hermer QC for the claimants responded in kind, albeit to some extent under protest that this was not an exercise which this court ought to undertake. It might be thought that an assertion that the claim against Vedanta raised a novel and controversial issue in the common law of negligence made it inherently unsuitable for summary determination. It is well settled that difficult issues of law of that kind are best resolved once all the facts have been ascertained at a trial, rather than upon the necessarily abbreviated and hypothetical basis of pleadings or assumed facts. The appellants submission that this case involves the assertion of a new category of common law negligence liability arises from the fact that, although the claimants chose to plead their case by seeking to fit its alleged facts within a series of four indicia given by the Court of Appeal in Chandler v Cape plc [2012] 1 WLR 3111, it was submitted that this was by no means a Chandler type of case. It may, like the claim in the Chandler case, loosely be categorised as a claim that a parent company has incurred a common law duty of care to persons (in this case neighbours rather than employees) harmed by the activities of one of its subsidiaries. But the liability of parent companies in relation to the activities of their subsidiaries is not, of itself, a distinct category of liability in common law negligence. Direct or indirect ownership by one company of all or a majority of the shares of another company (which is the irreducible essence of a parent/subsidiary relationship) may enable the parent to take control of the management of the operations of the business or of land owned by the subsidiary, but it does not impose any duty upon the parent to do so, whether owed to the subsidiary or, a fortiori, to anyone else. Everything depends on the extent to which, and the way in which, the parent availed itself of the opportunity to take over, intervene in, control, supervise or advise the management of the relevant operations (including land use) of the subsidiary. All that the existence of a parent subsidiary relationship demonstrates is that the parent had such an opportunity. Mr Gibson and Mr Hermer were eventually ad idem in commending to the court the pithy and in my view correct summary of this point by Sales LJ in AAA v Unilever plc [2018] EWCA Civ 1532, para 36: There is no special doctrine in the law of tort of legal responsibility on the part of a parent company in relation to the activities of its subsidiary, vis vis persons affected by those activities. Parent and subsidiary are separate legal persons, each with responsibility for their own separate activities. A parent company will only be found to be subject to a duty of care in relation to an activity of its subsidiary if ordinary, general principles of the law of tort regarding the imposition of a duty of care on the part of the parent in favour of a claimant are satisfied in the particular case. The legal principles are the same as would apply in relation to the question whether any third party (such as a consultant giving advice to the subsidiary) was subject to a duty of care in tort owed to a claimant dealing with the subsidiary. Helpful guidance as to relevant considerations was given in Chandler v Cape plc; but that case did not lay down a separate test, distinct from general principle, for the imposition of a duty of care in relation to a parent company. He continued, at para 37: Although the legal principles are the same, it may be that on the facts of a particular case a parent company, having greater scope to intervene in the affairs of its subsidiary than another third party might have, has taken action of a kind which is capable of meeting the relevant test for imposition of a duty of care in respect of the parent. He proceeded then to provide typical examples, which included this case, which had already by then been decided by the Court of Appeal. Sales LJ thought that cases where the parent might incur a duty of care to third parties harmed by the activities of the subsidiary would usually fall into two basic types: (i) Where the parent has in substance taken over the management of the relevant activity of the subsidiary in place of or jointly with the subsidiarys own management; (ii) Where the parent has given relevant advice to the subsidiary about how it should manage a particular risk. For my part, I would be reluctant to seek to shoehorn all cases of the parents liability into specific categories of that kind, helpful though they will no doubt often be for the purposes of analysis. There is no limit to the models of management and control which may be put in place within a multinational group of companies. At one end, the parent may be no more than a passive investor in separate businesses carried out by its various direct and indirect subsidiaries. At the other extreme, the parent may carry out a thoroughgoing vertical reorganisation of the groups businesses so that they are, in management terms, carried on as if they were a single commercial undertaking, with boundaries of legal personality and ownership within the group becoming irrelevant, until the onset of insolvency, as happened within the Lehman Brothers group. Mr Gibson sought to extract from the Unilever case and from HRH Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2018] EWCA Civ 191; [2018] Bus LR 1022, a general principle that a parent could never incur a duty of care in respect of the activities of a particular subsidiary merely by laying down group wide policies and guidelines, and expecting the management of each subsidiary to comply with them. This is, he submitted, all that the evidence thus far deployed in the present case demonstrated about the Vedanta Group. Again, I am not persuaded that there is any such reliable limiting principle. Group guidelines about minimising the environmental impact of inherently dangerous activities, such as mining, may be shown to contain systemic errors which, when implemented as of course by a particular subsidiary, then cause harm to third parties. In the Chandler case, the subsidiary inherited (by taking over a business formerly carried on by the parent) a system for the manufacture of asbestos which created an inherently unsafe system of work for its employees, because it was carried on in factory buildings with open sides, from which harmful asbestos dust could, and did, escape. As a result, and after a full trial, the parent was found to have incurred a duty of care to the employees of its subsidiary, and the result would surely have been the same if the dust had escaped to neighbouring land where third parties worked, lived or enjoyed recreation. It is difficult to see why the parents responsibility would have been diminished if the unsafe system of work, namely the manufacture of asbestos in open sided factories, had formed part of a group wide policy and had been applied by asbestos manufacturing subsidiaries around the world. Even where group wide policies do not of themselves give rise to such a duty of care to third parties, they may do so if the parent does not merely proclaim them, but takes active steps, by training, supervision and enforcement, to see that they are implemented by relevant subsidiaries. Similarly, it seems to me that the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken. Once it is recognised that, for these purposes, there is nothing special or conclusive about the bare parent/subsidiary relationship, it is apparent that the general principles which determine whether A owes a duty of care to C in respect of the harmful activities of B are not novel at all. They may easily be traced back as far as the decision of the House of Lords in Dorset Yacht Co Ltd v Home Office [1970] AC 1004, in which the negligent discharge by the Home Office of its responsibility to supervise Borstal boys working on Brownsea Island in Poole Harbour led to seven of them escaping and causing serious damage to moored yachts in the vicinity, including one owned by the plaintiff. The essence of the claimants case against Vedanta is that it exercised a sufficiently high level of supervision and control of the activities at the Mine, with sufficient knowledge of the propensity of those activities to cause toxic escapes into surrounding watercourses, as to incur a duty of care to the claimants. In the lengthy Particulars of Claim (in which this allegation of duty of care, together with its particulars, occupied 13 pages) the claimants make copious reference, including quoted highlights, to material published by Vedanta in which it asserted its responsibility for the establishment of appropriate group wide environmental control and sustainability standards, for their implementation throughout the group by training, and for their monitoring and enforcement. The claimants have exhibited the underlying published materials to witness statements, and relied, in addition, upon a management services agreement between Vedanta and KCM and a witness statement of a Mr Kakengela, a middle manager of KCM who gave evidence about changes in the mode of management of the Mine after KCM became part of the Vedanta Group. The judges approach to this issue may be summarised as follows. First, he accepted that it was arguable that the Zambian courts would identify the relevant principles of Zambian common law in accordance with those established in England. It is now common ground that he was entitled on the evidence to do so. Secondly, he accepted the invitation of counsel on both sides to treat Caparo Industries plc v Dickman [1990] 2 AC 605, and its three ingredients of foreseeability, proximity and reasonableness, as the starting point. This assumed, contrary to my view, that he was dealing with a novel category of common law negligence liability, but he can hardly be criticised for having done so in the light of the parties joint invitation. Thirdly he was guided by the claimants own pleaded case to focus upon the question whether the indicia in the Chandler case were satisfied. In my view, and that of the Court of Appeal in this case, the Chandler indicia are no more than particular examples of circumstances in which a duty of care may affect a parent. They were so described by Arden LJ when setting them out in the Chandler case. Although this if anything imposed an unnecessary straitjacket, both upon the claimants and the judge, it did not lead to the identification of a wider basis in law for the recognition of the relevant parental duty of care than that which, in my view, the law actually provides, by reference to basic principle. Next, the judge reminded himself, correctly in my view, that the answer to the question whether Vedanta incurred a duty of care to the claimants was likely to depend upon a careful examination of materials produced only on disclosure, and in particular upon documents held by Vedanta: see para 118. He cautioned himself against embarking on any sort of mini trial. At para 119 he said this: In the light of that view, it is unnecessary for me to identify in any detail the evidence [on] which the claimants rely in support of their case that Vedanta, as the parent company, owed a relevant duty of care. He then identified in four short sub paragraphs the particular material which supported his view that the claimants case was arguable. They included part of the published material, namely a report entitled Embedding Sustainability which, he said, stressed that the oversight of all Vedantas subsidiaries rested with the board of Vedanta itself, made particular reference to problems with discharges into water and to the particular problems arising at the Mine. He relied upon the management services agreement between Vedanta and KCM to which I have referred, upon a decision of the Irish High Court about the group (Elmes v Vedanta Lisheen Mining Ltd [2014] IEHC 73) and upon the witness statement of Mr Kakengela. He concluded by recognising the need for a cautious approach to the relevant evidence filed by KCMs principal witness Mr Ndulo, whose credibility he said had been subject to serious adverse comment (including a finding of dishonesty) by a Commercial Court judge in an earlier case: see U & M Mining Zambia Ltd v Konkola Copper Mines plc (No 3) [2014] EWHC 3250 (Comm). For its part the Court of Appeal followed a broadly similar course, while reminding itself that the Chandler indicia were no more than examples, and making a slightly different selection from the voluminous evidence of those parts of Vedantas published statements indicative at least of an arguable case for having undertaken a sufficiently close intervention into the operation of the Mine to attract the requisite duty of care. In my view the appellants primary submission under this heading, that the judge and the Court of Appeal failed to apply sufficient rigour to their analysis of the claimants pleadings and evidence on this question, fails in limine. This was not a case of the assertion, for the first time, of a novel and controversial new category of case for the recognition of a common law duty of care, and it therefore required no added level of rigorous analysis beyond that appropriate to any summary judgment application in a relatively complex case. Nor does the judges judgment disclose any lack of appropriate rigour. The question as to triable issue as against Vedanta was one of a significantly larger number of contentious issues than those which have survived in this court. The reason which the judge gave for the relative brevity of his analysis of the underlying materials in para 119 of his judgment said nothing about the depth and rigour of his own review of those materials. He was merely seeking to explain why, in what was necessarily a long and detailed judgment, having formed a clear view that the case against Vedanta was arguable, it was unnecessary to burden his judgment with a lengthy and detailed description of his own analysis. For the reasons I have already given, his legal analysis may have departed slightly from the ideal, but only in respects in which either he followed the parties joint invitation, or by imposing a straitjacket derived from the Chandler case which, if anything, increased rather than reduced the claimants burden in demonstrating a triable issue. But in that respect those imperfections were largely cleared up by the Court of Appeal which, rightly in my view, recognised that they did not undermine the judges conclusion. This court has, again, been taken at length through the relevant underlying materials. For my part, if conducting the analysis afresh, I might have been less persuaded than were either the judge or the Court of Appeal by the management services agreement between the appellants, or by the evidence of Mr Kakengela. But I regard the published materials in which Vedanta may fairly be said to have asserted its own assumption of responsibility for the maintenance of proper standards of environmental control over the activities of its subsidiaries, and in particular the operations at the Mine, and not merely to have laid down but also implemented those standards by training, monitoring and enforcement, as sufficient on their own to show that it is well arguable that a sufficient level of intervention by Vedanta in the conduct of operations at the Mine may be demonstrable at trial, after full disclosure of the relevant internal documents of Vedanta and KCM, and of communications passing between them. It matters not whether this court would have reached the same view as did the judge about triable issue. It is sufficient that, for the reasons which I have given, there was material upon which the judge could properly do so, and that his assessment was not vitiated by any error of law. Breach of statutory duty by Vedanta The claimants plead that, regardless whether Vedanta owed any common law duty of care to them, its intervention in the operation of the Mine caused it to commit breaches of duties imposed by Zambian statutes, even though KCM was the sole licensed operator of the Mine. They are the Mines and Minerals Development Act 2008, the Environmental Management Act 2011 and the Environmental Protection and Pollution Control Act 1990. Generally speaking they impose strict liability on KCM but, according to the opinion of the claimants Zambian law expert, they also impose a fault based liability on a wider range of persons. For example, section 4 of the Environmental Management Act 2011 enables the court to compel the person responsible for any environmental degradation to restore the environment to its status quo ante and to provide compensation to any victim for the harm caused. In paras 91 and following of the Particulars of Claim the same facts are repeated as are relied upon for the assertion of a common law duty of care against Vedanta by the repeated use of this rubric: In the light of the matters pleaded above and the First Defendants direction and control over the operations of the Second Defendant I must admit having some difficulty with the concept of a fault based liability which does not depend upon the existence of a prior legal duty to take care. Nonetheless, it is reasonably clear from the claimants Zambian law experts evidence (which for the purposes of testing an arguable case it is agreed must be accepted, although vigorously challenged) that substantially the same inquiry as to the extent of Vedantas intervention in the operation of the Mine is required for the purpose of establishing breach by it of statutory duty, as is required for the identification of a common law duty of care to the claimants. It follows that no useful purpose is served by a minute examination of issues about that statutory duty. Furthermore, once it is concluded that there is no basis for going behind the judges conclusion that the claimants had an arguable case in common law against Vedanta, the question whether or not the claimants have an arguable statutory claim as well can make no difference to the outcome of this appeal. For much the same reasons, both the judge and the Court of Appeal dealt with the statutory basis of claim with commendable brevity. Is England the proper place in which to bring the claim against KCM? important question of law. CPR 6.37(3) provides that: I have found this to be the most difficult issue in this appeal. It does raise an The court will not give permission [to serve the claim form out of the jurisdiction] unless satisfied that England and Wales is the proper place in which to bring the claim. (my emphasis) The italicised phrase is the latest of a series of attempts by English lawyers to label a long standing concept. It has previously been labelled forum conveniens and appropriate forum, but the changes in language have more to do with the Civil Procedure Rules requirement to abjure Latin, and to express procedural rules and concepts in plain English, than with any intention to change the underlying meaning in any way. The best known fleshed out description of the concept is to be found in Lord Goff of Chieveleys famous speech in the Spiliada case, summarised much more recently by Lord Collins in the Altimo case at para 88 as follows: The task of the court is to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice; That concept generally requires a summary examination of connecting factors between the case and one or more jurisdictions in which it could be litigated. Those include matters of practical convenience such as accessibility to courts for parties and witnesses and the availability of a common language so as to minimise the expense and potential for distortion involved in translation of evidence. Although they are important, they are not necessarily conclusive. Connecting factors also include matters such as the system of law which will be applied to decide the issues, the place where the wrongful act or omission occurred and the place where the harm occurred. Thus far, the search for these connecting factors gives rise to no difficult issues of principle, even though they may not all point in the same direction. The problems thrown up by this appeal all arise from the combination of two factors. The first is that the case involves multiple defendants domiciled in different jurisdictions. The second is that, following Owusu v Jackson, the court is disabled from the exercise of its traditional common law power to stay the proceedings against the domiciled anchor defendant by reason of article 4: see paras 23 to 41 above. There can be no doubt that, when Lord Goff originally formulated the concept quoted above, he would have regarded the phrase in which the case can be suitably tried for the interest of all the parties as referring to the case as a whole, and therefore as including the anchor defendant among the parties. Although the persuasive burden was reversed, as between permission to serve out against the foreign defendant and the stay of proceedings against the anchor defendant, the court was addressing a single piece of multi defendant litigation and seeking to decide where it should, as a whole, be tried. The concept behind the phrases the forum and the proper place is that the court is looking for a single jurisdiction in which the claims against all the defendants may most suitably be tried. The Altimo case also involved multiple defendants. Although it was decided after Owusu v Jackson, it concerned the international jurisdiction of the courts of the Isle of Man, so that the particular problems thrown up by this appeal did not arise. An unspoken assumption behind that formulation of the concept of forum conveniens or proper place, may have been (prior to Owusu v Jackson) that a jurisdiction in which the claim simply could not be tried against some of the multiple defendants could not qualify as the proper place, because the consequence of trial there against only some of the defendants would risk multiplicity of proceedings about the same issues, and inconsistent judgments. But the cases in which this risk has been expressly addressed tend to show that it is only one factor, albeit a very important factor indeed, in the evaluative task of identifying the proper place. For example, in Socit Commerciale de Rassurance v Eras International Ltd (The Eras Eil Actions) [1992] 1 Lloyds Rep 570, Mustill LJ said this, at p 591: in practice the factors which make the party served a necessary or proper party will also weigh heavily in favour of granting leave to make the foreigner a party, although they will not be conclusive. In cases where the court has found that, in practice, the claimants will in any event continue against the anchor defendant in England, the avoidance of irreconcilable judgments has frequently been found to be decisive in favour of England as the proper place, even in cases where all the other connecting factors appeared to favour a foreign jurisdiction: see eg OJSC VTB Bank v Parline Ltd [2013] EWHC 3538 (Comm), per Leggatt J at para 16. That is a fair description of the judges reasoning in the present case. Having found that, looking at the matter as between the claimants and KCM, all the connecting factors pointed towards Zambia, the judge concluded that, factoring in the closely related claim against Vedanta, which he found as a matter of fact that the claimants were likely to pursue in England in any event, the risk of irreconcilable judgments arising from separate proceedings in different jurisdictions against each defendant was decisive in identifying England as the proper place: see paras 160 to 168. He said that: The alternative two trials on opposite sides of the world on precisely the same facts and events is unthinkable. It is obvious from his analysis (assuming that substantial justice could be obtained in Zambia) that, had the English court retained its jurisdiction to stay the proceedings as against Vedanta, as it was thought it did prior to Owusu v Jackson, the judge would have done so, and thereby ensured that the case was brought to trial against both defendants in Zambia. The appellants submitted that the judges approach took insufficient account of the fact that the language of CPR 6.37(3) requires the court to be satisfied that England and Wales is the proper place in which to bring the claim, rather than the proper place for trial of the case as a whole. By the claim it was submitted that the rule meant only the claim against the foreign defendant. It is evident that, if the judge had confined himself to that analysis, he would have set aside service against KCM, subject to the substantial justice issue. The appellants contrasted the wording of the predecessor rule, RSC Order 11 rule 4(2) which provided that: No such permission shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of the jurisdiction under this Order. (my emphasis) I have not been persuaded that this change of language from the case to the claim was intended to effect any change in the previously clearly stated requirement for the court to consider the proper place for the case as a whole. In particular, the phrase the claim is used in CPR Practice Direction 6B paragraph 3.1(3) in a way which suggests that the foreign defendant must be a necessary or proper party to that claim, which is the claim which has been or will be served on the anchor defendant. I have however been much more troubled by the absence of any particular focus by the judge upon the fact that, in this case, the anchor defendant, Vedanta, had by the time of the hearing offered to submit to the jurisdiction of the Zambian courts, so that the whole case could be tried there. This did not, of course, prevent the claimants from continuing against Vedanta in England, nor could it give rise to any basis for displacing article 4 as conferring a right to do so upon the claimants. But it does lead to this consequence, namely that the reason why the parallel pursuit of a claim in England against Vedanta and in Zambia against KCM would give rise to a risk of irreconcilable judgments is because the claimants have chosen to exercise that right to continue against Vedanta in England, rather than because Zambia is not an available forum for the pursuit of the claim against both defendants. In this case it is the claimants rather than the defendants who claim that the risk of irreconcilable judgments would be prejudicial to them. Why (it may be asked) should that risk be a decisive factor in the identification of the proper place, when it is a factor which the claimants, having a choice, have brought upon themselves? Although this is not a question which the judge addressed in terms, he plainly regarded the OJSC VTB Bank case as in substance indistinguishable from this case, and there is to be found an analysis of that very question by Leggatt J, at paras 8 to 10: 8. The two other arguments on which Mr Moverley Smith places greater weight are, first, an argument that it is a matter of choice on the claimants part to bring the proceedings against the first and third defendants here. Those defendants, he says, could equally well have been sued in Russia. There is no evidence before the court that that is the case, but I am prepared to assume for the purposes of argument today that it is the case, and in any event Mr Moverley Smith has confirmed, albeit only in the course of his oral submissions, that if necessary the first and third defendants will give undertakings to submit to the jurisdiction of the Russian courts. 9. The argument, therefore, is, in substance, that although the claimant has chosen to sue the first and third defendants in this country, it has an alternative forum available, a forum which is much more convenient when one considers all the connecting factors, and that if the claimant chooses still to pursue claims against the first and third defendants in England even if unsuccessful in joining the second defendant to those claims so that the second defendant can only be pursued in Russia, then that is a choice which it has made, and the fact that it is a matter of choice negates, or substantially diminishes, the weight that would otherwise be given to the importance and desirability of avoiding duplication of proceedings and the risk of inconsistent judgments. 10. I see the force of that point but it does not seem to me to answer the fact that it is a matter of entitlement on the claimants part to sue the first and third defendants in England. There is no reason why the claimant should be expected or required to relinquish that right in order to avoid duplication of proceedings. Rather, it seems to me that the existence of that right and the fact that it is being exercised is the starting point and the background against which I ought to consider the question of whether England is also the appropriate forum for the claim against the second defendant. Coulson J was, in the present case, no doubt aware that Vedanta had made the same offer as had been made by the anchor defendant before Leggatt J to submit to the jurisdiction of the relevant foreign court, but the question is whether Leggatt Js analysis is or is not right in principle. If it is, then I consider that the judges analysis of the proper place question in the present case cannot be faulted. But if it is not, then there is a need to consider whether the force of the risk of irreconcilable judgments ought to be either eliminated or at least reduced in the balancing of all relevant factors, below a level which the judge regarded as decisive. Mr Gibson submitted that, if Leggatt Js analysis is right, then the risk of irreconcilable judgments is likely to be decisive in every case where the claimants have a right to sue the anchor defendant in England under article 4, regardless of the strength of the other connecting factors with the foreign jurisdiction. It would, he said, be hard to imagine stronger connecting factors than those in either the OJSC VTB Bank case or in this case, and I am inclined to agree with him. The result would be, as outlined in paras 38 to 40 above, that the English court would not merely have one hand tied behind its back because of its inability to stay the proceedings against the anchor defendant, but the other hand paralysed by the almost inevitable priority to be given to the risk of irreconcilable judgments, where claimants chose to exercise their right to continue against the anchor defendant in England. After anxious consideration, I have come to the conclusion that Leggatt Js analysis of this point, followed by the judge, is wrong. At the heart of it lies the proposition that, because a claimant has a right to sue the anchor defendant in England, there is no reason why the claimant should be expected or required to relinquish that right in order to avoid duplication of proceedings. In my judgment, there is good reason why the claimants in the present case should have to make that choice, always assuming that substantial justice is available in Zambia (which is a necessary but hypothetical predicate for the whole of the analysis of this issue). There is nothing in article 4 which can be interpreted as being intended to confer upon claimants a right to bring proceedings against an EU domiciliary in the member state of its domicile in such a way that avoids incurring the risk of irreconcilable judgments. On the contrary, article 4 is, as was emphasised in Owusu v Jackson, blind to considerations of that kind. The mitigation of that risk is available in a purely intra EU context under article 8.1 (where that risk is expressly recognised). But it is unavailable where the related defendant is (as here) domiciled outside any of the member states. Looking at the matter from an intra member states perspective, a person wishing to bring related claims against a number of defendants which, if litigated separately, would give rise to a risk of irreconcilable judgments, has a choice. The claimant may bring separate proceedings against each related defendant in the member state of that defendants domicile, thereby incurring a risk of irreconcilable judgments. Or the claimant may bring a single set of proceedings against all the defendants in the member state of the domicile of only one of them, so as to avoid that risk. That choice is what article 8.1 expressly permits. If the risk of irreconcilable judgments is one which, as in the present case, exists to the prejudice only of the claimants, I can see no possible reason why a right to sue in England under article 4 should not give rise to the same choice, where the alternative jurisdiction lies outside that of the member states, in a place where the claimant may sue all the defendants, not because of article 8.1, but because they are all prepared to submit to that jurisdiction. The alternative view (as expressed by Leggatt J) that the right conferred by article 4 should not expose the claimants to the need to make such a choice would appear to convert the right conferred by article 4 to an altogether higher level of priority, where the alternative forum lies outside that of the member states, than it does where the alternative forum lies inside, under article 8. In short, if the article 4 right is not a trump card for the purpose of avoiding irreconcilable judgments within the confines of the member states, why should it become a trump card outside those confines? The recognition that claimants seeking to avail themselves of their article 4 rights to sue an anchor defendant are nonetheless exposed to a choice whether to do so at the risk of irreconcilable judgments, even in cases where article 8 is not available, but another proper, convenient or natural forum is available for the pursuit of the case against all the defendants is, to my mind, the answer to the conundrum posed in para 40 above. It does not in any way bring into play forum conveniens considerations as a reason for denying the claimants access to the jurisdiction of England as a member state, against the anchor defendant. It simply exposes the claimants to the same choice, whether or not to avoid the risk of irreconcilable judgments, as is presented by the combination of article 4 and article 8 in an intra EU context. That analysis does not mean, when the court comes to apply its national rules of private international law to the question whether to permit service out of the jurisdiction upon KCM, that the risk of irreconcilable judgments is thereby altogether removed as a relevant factor. But it does in my view mean that it ceases to be a trump card, and that the basis upon which the judge, following Leggatt J in the OJSC VTB Bank case, regarded it as decisive, involved an error of principle. Since the Court of Appeal appears to have adopted the same approach as the judge on this issue, I would regard it as incumbent upon this court to carry out that balancing of connecting factors and risk of irreconcilable judgments afresh. Like the judge, it seems to me sensible first to do so without regard to any risk that the claimants would not obtain substantial justice if required to proceed, at least against KCM, in Zambia. It is unnecessary to do more than barely summarise the connecting factors with Zambia which led the judge to the conclusion that, putting aside the risk of irreconcilable judgments, Zambia was overwhelmingly the proper place for the claim to be tried. He described those factors as relevant to a trial as between the claimants and KCM, but the only factor to the contrary which he identified for the purposes of a notional trial as between the claimants and Vedanta was the risk of irreconcilable judgments. In fact, almost all the connecting factors with Zambia identified by the judge are equally applicable to the case as a whole (ie as against KCM and Vedanta). In summary: i) The allegedly wrongful acts or omissions occurred primarily in Zambia. This is plainly true of the claim against KCM, but since the liability of Vedanta depends mainly upon the extent to which it intervened in the operation of the Mine, it is likely to be true of Vedanta as well. ii) The causative link between the allegedly negligent operation of the Mine and the damage which ensued is of course the escape of noxious substances into waterways, which also occurred within Zambia. iii) The Mine was operated (whether by KCM alone, or by KCM and Vedanta together, as the claimants allege) pursuant to a Zambian mining licence and subject to Zambian legislation. In any event, it is common ground that all the applicable law is Zambian, even if that country may prove to follow the common law of England and Wales in material respects. iv) The claimants are all poor persons who would have real difficulty travelling to England to give evidence, for example of their injuries, or of the damage to their land and livelihoods. Although English is an official language in Zambia, many of the claimants only speak a local dialect which would require translation in order to be understood by an English judge or advocate, but not by their Zambian equivalents. v) KCMs witnesses of fact are all based in Zambia. They far outnumber the potential witnesses employed by Vedanta, some (but by no means all) of whom may be supposed to be domiciled in England. vi) Although relevant disclosable documents will be likely to be found in England and in Zambia (in the possession or control of Vedanta and KCM respectively), many of KCMs documents would, like the evidence of their witnesses, require translation for use in an English court, but not in a Zambian court, which has the considerable advantage in this context of being effectively bilingual. vii) All the regulatory and testing records and reports relevant to the alleged emissions from the Mine are likely to be based in Zambia, as is the responsible regulator. viii) Against all those factors it may, as already noted, be the case that significant relevant documents are located in England. In an age when documents may be scanned (if not already in electronic form) and then transmitted easily and cheaply round the world, this does not seem to me to be a powerful factor. Some of the relevant conduct which the claimants may allege against Vedanta or upon which Vedanta may wish to rely by way of defence, may well have occurred in England, for example at board meetings of Vedanta. But its relatively small number of employees are likely to find it much easier to travel to Zambia than their counterparts in KCM, let alone the claimants themselves, would find it for the purposes of travel to England, if only because of the enormous disparity in the number who would be required to travel in each case. ix) A judgment of the Zambian court would be recognisable and enforceable in England, against Vedanta. Zambian judgments are enforceable in England under Part II of the Administration of Justice Act 1920. Zambia is specifically listed as a relevant Commonwealth jurisdiction for the purposes of the 1920 Act by the Reciprocal Enforcement of Judgments (Administration of Justice Act 1920, Part II) (Consolidation) Order (SI 1984/129). I would not ignore, or downplay, the mitigation of those factors which good case management of an English claim might be able to achieve. For example, as has happened in the past, the English judge may arrange for sittings in Zambia, for Zambian evidence to be taken by video conference, and for a Zambian court room or building to be continuously available to the claimants and the Zambian public to listen to and to view on screen those parts of the trial being conducted in England. As already noted, even if the volume of documents located in Zambia greatly exceeds those located in England (as is likely), modern facilities for their transmission should, to a considerable extent, reduce the inconvenience which might otherwise arise from their current location. In conclusion, it is sensible to stand back and look at the matter in the round. This case seeks compensation for a large number of extremely poor Zambian residents for negligence or breach of Zambian statutory duty in connection with the escape within Zambia of noxious substances arising in connection with the operation of a Zambian mine. If substantial justice was available to the parties in Zambia as it is in England, it would offend the common sense of all reasonable observers to think that the proper place for this litigation to be conducted was England, if the risk of irreconcilable judgments arose purely from the claimants choice to proceed against one of the defendants in England rather than, as is available to them, against both of them in Zambia. For those reasons I would have concluded that the claimants had failed to demonstrate that England is the proper place for the trial of their claims against these defendants, having regard to the interests of the parties and the ends of justice. Substantial justice Even if the court concludes (as I would have in the present case) that a foreign jurisdiction is the proper place in which the case should be tried, the court may nonetheless permit (or refuse to set aside) service of English proceedings on the foreign defendant if satisfied, by cogent evidence, that there is a real risk that substantial justice will not be obtainable in that foreign jurisdiction. The same test was, prior to Owusu v Jackson, applicable in the context of an application for a stay of English proceedings against a defendant served within the jurisdiction. The question whether there is a real risk that substantial justice will be unobtainable is generally treated as separate and distinct from the balancing of the connecting factors which lies at the heart of the issue as to proper place, but that is more because it calls for a separate and careful analysis of distinctly different evidence than because it is an inherently different question. If there is a real risk of the denial of substantial justice in a particular jurisdiction, then it seems to me obvious that it is unlikely to be a forum in which the case can be tried most suitably for the interests of the parties and the ends of justice. In the present case the judge described this as an access to justice issue. By this he meant that the real risk (in his view a probability) that substantial justice would be unavailable in Zambia had nothing to do with any lack of independence or competence in its judiciary or any lack of a fair civil procedure suitable for handling large group claims. Rather, it derived essentially from two factors: first, the practicable impossibility of funding such group claims where the claimants were all in extreme poverty; and secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable litigation of this size and complexity to be prosecuted effectively, in particular against a defendant (KCM) with a track record which suggested that it would prove an obdurate opponent. The judge acknowledged that in the large amount of evidence and lengthy argument presented on this issue there was material going both ways, giving rise to factual issues some of which he had to resolve, but others of which he could not resolve without a full trial. Nonetheless he concluded not merely that there was a real risk but a probability that the claimants would not obtain access to justice so that, in his view, and notwithstanding the need for caution and cogent evidence, this reason for preferring the English to the Zambian jurisdiction was established by a substantial margin beyond the real risk which the law requires. There is no satisfactory substitute for a full reading of the judges careful analysis of this issue, to which he gave his full and detailed attention notwithstanding the fact that he had already concluded, without regard to the access to justice issue, that he should refuse the defendants applications upon the basis that England was the proper place for the trial of the case. I will confine myself to a bare summary of his reasoning, sufficient to make sense of the analysis which follows. The judge found that the claimants were at the poorer end of the poverty scale in one of the poorest countries of the world, that they had no sufficient resources of their own (even as a large group) with which to fund the litigation themselves, that they would not obtain legal aid for this claim and nor could it be funded by a Conditional Fee Agreement (CFA) because CFAs are unlawful in Zambia. Nonetheless he acknowledged that there was some evidence that lawyers would be prepared to pursue such claims on the basis of the up front payment of a modest deposit to fund disbursements, but otherwise on the basis that the lawyers would recover payment for their work from costs ordered to be paid (without a success fee) from the defendants, if the claim succeeded. He acknowledged also that the evidence did not demonstrate that no lawyers would be prepared to offer to undertake the litigation on that basis, but rather that those who might offer would simply lack the resources, in terms of numbers in the legal team, or experience, with which to be able to conduct complex litigation of this kind with the requisite degree of competence and efficiency. Finally, he acknowledged that there was some evidence of group environmental litigation of a similar kind being conducted before the Zambian courts, but he considered, upon the basis of detailed evidence about those cases that they supported, rather than detracted from, a view that the Zambian legal profession lacked the resources and experience with which to conduct such litigation successfully. As the Court of Appeal observed when affirming the judges decision on this issue, the appellants face formidable difficulties in asking any appellate court to overturn this detailed fact finding exercise, by an experienced judge who stated in terms (and there is no reason to doubt) that he had read all the relevant materials and carefully considered the detailed opposing arguments. Nonetheless, and supported by a written intervention by the Attorney General of Zambia, the appellants mounted a full frontal attack on the judges conclusions which, they submitted, this court ought to entertain because of flaws in the judges application of the relevant law. In outline, these were as follows: The judge failed to heed judicial warnings that funding issues will only i) in exceptional cases justify a finding of lack of substantial justice. ii) The judge failed to acknowledge that substantial justice required the claimants to take their forum as they found it. iii) The judge failed to pay due regard to considerations of comity, and a requirement for cogent evidence. I will take those in turn. There are indeed judicial warnings of undoubted authority that the English court should not in this context conclude, otherwise than in exceptional cases, that the absence of a means of funding litigation in the foreign jurisdiction, where such means are available in England, will lead to a real risk of the non availability of substantial justice: see Connelly v RTZ Corpn plc (No 2) [1998] AC 854, 873 per Lord Goff and Lubbe v Cape plc [2000] 1 WLR 1545, 1555 per Lord Bingham of Cornhill. They were in fact both cases in which that hurdle of exceptionality was surmounted, in the first in relation to exposure to radiation at a uranium mine in Namibia and the second in relation to exposure to asbestos from mining and processing in South Africa. The judge plainly had those considerations well in mind, since he regarded the Lubbe case as one of three authorities which set out the relevant law, and Lord Goffs dicta in the Connelly case are quoted in full by Lord Bingham in the Lubbe case. Of course, a judge may cite all the relevant authorities and yet still misapply the law, but in this case the judge came nowhere near treating the absence of particular forms of litigation funding in Zambia, such as legal aid and CFAs, as conclusive. He conducted a searching analysis of all possible forms of funding, and found that most were unavailable but that the one which was in principle available would not attract a legal team which was both prepared to act, and able to do so with the requisite resources and experience. Although the judge did not refer to it expressly, the evidence included the possibility of funding cases of this kind, or the necessary underlying research, by contribution from locally based NGOs, but the absence of reference to a matter of detail in a judgment about an issue which the judge only dealt with for completeness comes nowhere near to demonstrating that he left this evidence out of account. The gist of the appellants second point is that the judges denigration of the accessibility of substantial justice in Zambia was too heavily based upon a comparison between the relatively rudimentary way in which a case of this kind could be litigated in Zambia, and its likely elaborate treatment by well resourced legal teams (in particular on the claimants side) in England. The judge plainly regarded this litigation as both complex and weighty. As an experienced judge of the Technology and Construction Court his assessment deserves respect. It is also in my view objectively justified. In the absence of any admissions from the appellants which might serve to narrow the issues (and there are none), large aspects of the claimants collective and individual claims will depend upon the presentation of expert evidence. They will include identifying the emissions which actually occurred, and their toxicity, establishing whether the system of operation of the Mine (both in its planning and implementation) fell short of that requisite to satisfy a duty of care, tracing the emissions through to watercourses in the vicinity of the claimants, proving (during a considerable period of time) that these emissions caused damage to particular claimants land, business and health, and quantifying (save perhaps in relation to personal injuries) the diminution in the value of business and property thereby caused. Much of that expert work will, from the perspective of the claimants legal team, have to be paid for as disbursements, but it will still need to be supervised by competent and experienced lawyers. As is evident from the decision of the Supreme Court of Zambia in Nyasulu v Konkola Copper Mines plc [2015] ZMSC 33, it will be necessary for each individual claimant to prove both causation and loss, and to value their loss unless (which did not happen in that case and has not been volunteered here) KCM were to agree that issues of that kind could be determined either on the basis of typical claimants or by means of an out of court claims management process. It is of course possible, indeed likely, that the litigation of all those issues in Zambia would, even if funding and the necessary legal resources were available, be undertaken on a simpler and more economical scale than would be likely if undertaken in the Technology and Construction Court by large, sophisticated legal teams, without necessarily depriving the claimants of substantial justice. But the judge did not address this question by way of a comparison between litigation in England and in Zambia. His enquiry was directed to the question whether the unavoidable scale and complexity of this case (wherever litigated) could be undertaken at all with the limited funding and legal resources which the evidence led him to conclude were available within Zambia. His judgment does not therefore disclose the misdirection about the meaning of substantial justice which is suggested by the appellants. Finally, the judges analysis positively demonstrates that he had due regard to considerations of comity and the requirement for cogent evidence. He referred to the need for cogent evidence in express terms, at para 174. He identified the evidence which he found persuasive and quoted from some of it. Cogent evidence does not mean unchallenged evidence. on grounds of comity. At para 198 he said this: It is also evident that the judge was conscious of the need to exercise restraint I am conscious that some of the foregoing paragraphs could be seen as a criticism of the Zambian legal system. I might even be accused of colonial condescension. But that is not the intention or purpose of this part of the judgment. I am not being asked to review the Zambian legal system. I simply have to reach a conclusion on a specific issue, based on the evidence before me. And it seems to me that, doing my best to assess that evidence, I am bound to conclude that the claimants would almost certainly not get access to justice if these claims were pursued in Zambia. My conclusion that the judge did not misdirect himself in law in any of the respects contended for by the appellants is sufficient to dispose of this issue since, otherwise, the appellants case in relation to it is no more or less than a challenge to judicial fact finding. But for completeness I will say something about what appeared to be the strongest point in the appellants challenge. This was that the judge failed to have sufficient regard to the evidence constituted by a series of Zambian cases, comparable in differing extents to this case, in which groups of claimants had managed to litigate issues about pollution and environmental damage all the way to a fair trial and even to a success on liability in the Nyasulu case referred to above. The judge studied each of those cases (of which the Nyasulu case is the most relevant) in some detail and was presented with significant evidence about the underlying reasons why, save for 12 claimants out of 2,000 in that case, the claimants were almost routinely unsuccessful. There was one case against KCM which settled, but there was an issue, which the judge could not decide, as to whether many of the claimants received their share of the settlement sum. It is a sufficient example of the lack of foundation for this factual challenge on appeal to look at the appellants best two examples. In the Nyasulu case, 2,000 claimants joined in group litigation about a discharge from the Mine in 2006 into the Mushishima stream and thereby into the Kafue river. Medical reports evidencing personal injuries were put in evidence only in relation to 12 claimants. The trial judge found in favour of the claimants on liability, and was content to award general damages to all 2,000 claimants on the base of medical evidence about only 12 of them. In the Supreme Court ([2015] ZMSC 33) the judge was upheld on liability but the claim by the remaining 1,989 claimants was dismissed for want of medical evidence to prove that they had suffered any loss. At first sight this might appear to have been a disaster attributable to a difference of view between the first instance and appellate judges, but Coulson J was provided with evidence about how the case had been prepared, both from one of the claimants and from the lawyer who conducted the claimants defence of KCMs appeal in the Supreme Court. The judge was entitled to conclude from that evidence that the reason why so few of the claimants had medical evidence deployed on their behalf was that this would have required funding from the claimants which they could not afford, for disbursements which the lawyers instructed would not have been able to pay for out of their own resources. In Shamilimo v Nitrogen Chemicals of Zambia Ltd (2007/HP/0725), a case about radiation emissions, there was evidence which entitled Coulson J to find, as he did, that this claim failed on causation because the claimants could not fund the necessary expert evidence to prove it. In conclusion therefore, there was in relation to both those cases evidence from which the judge was entitled to conclude that they supported rather than detracted from his overall finding that funding and local legal resources were insufficient to enable the claimants to obtain substantial justice in Zambia. It is irrelevant whether an appellate court might, upon a review of the same evidence, reach a different conclusion, even with the assistance from the Attorney General of Zambia, for which the court is grateful. The result is that the appellants fail on this issue of substantial justice. Conclusion Having rejected the appellants case on abuse of EU law and real triable issue, but having upheld their case on proper place, I would, but for their failure on the issue as to substantial justice, have been minded to allow their appeal. As it is however I consider that this appeal should be dismissed, on the substantial justice issue.

This is a procedural appeal about the jurisdiction of the English courts in relation to a group tort claim. It concerns alleged toxic emissions from the Nchanga Copper Mine (the Mine) in Zambia. The claimants (the respondents to this appeal) are approximately 1,826 Zambian citizens who live in the Chingola District. They are very poor members of rural farming communities who are reliant on open bodies of water for drinking and irrigation for their crops. They allege that their health and farming activities have been damaged by the discharge of toxic matter from the Mine into those waterways from 2005 onwards. The owner of the Mine is the second defendant, Konkola Copper Mines plc (KCM). KCM is a Zambian company. The first defendant, Vedanta Resources PLC (Vedanta), is KCMs ultimate parent company. It is incorporated and domiciled in the United Kingdom. The Zambian government has a significant minority stake in KCM, but Vedantas published materials state that, in practice, it has the same ultimate control of KCM as it would if it were a wholly owned subsidiary of Vedanta. The claims against the defendants (the appellants to this appeal) are for the torts of negligence and breach of statutory duty. The claims against KCM, as the foreign defendant, are based on its role as the operator of the Mine. The claims against Vedanta rely on its allegedly high level of control and direction over KCMs mining operations and compliance with applicable health, safety and environmental standards. Against Vedanta, the claimants rely on its domicile in England, pursuant to article 4.1 of Regulation (EU) 1215/2012 (Recast Brussels Regulation). Against KCM, the claimants rely on the necessary or proper party gateway for service out of the jurisdiction in paragraph 3.1 of Practice Direction 6B in the Civil Procedure Rules (CPR). The claimants issued the present proceedings in England in July 2015. Vedanta was served within the jurisdiction, while KCM was served out of the jurisdiction, with permission obtained on a without notice application. Both Vedanta and KCM applied to challenge jurisdiction. Coulson J, in the High Court, dismissed that challenge in May 2016. The Court of Appeal dismissed the defendants appeals in October 2017. The defendants appealed to the Supreme Court and the claimants cross appealed. The main issues are: (1) whether it is an abuse of EU law to rely on article 4 of the Recast Brussels Regulation for jurisdiction over Vedanta as anchor defendant so as to make KCM a necessary or proper party; (2) whether the claimants pleaded case and supporting evidence disclose no real triable issue against Vedanta; (3) whether England is the proper place in which to bring the claims; and (4) even if Zambia would otherwise be the proper place, whether there was a real risk that the claimants would not obtain access to substantial justice in the Zambian jurisdiction. Both in the High Court and in the Court of Appeal, the claimants succeeded on all four issues. The Supreme Court dismisses the appeal. Lord Briggs gives the lead judgment, with which all members of the Court agree. The claimants succeed on issues (1), (2) and (4), though not on issue (3). (1) Abuse of EU law: Article 4.1 of the Recast Brussels Regulation confers a right on any claimant (regardless of their domicile) to sue an English domiciled defendant in England irrespective of connecting factors to other jurisdictions [16]. Issue (1) presupposes that there is a real triable issue against Vedanta [17, 26]. Further, the judges finding that Vedanta was sued in England for the genuine purpose of obtaining damages, even though attracting English jurisdiction over KCM was a key contributing factor, is not open to challenge [27]. Any implied exception to the effect of article 4.1 must be construed narrowly [29 30]. The EU case law on abuse of law under article 8.1 (related defendants) is equally restrictive [31 34]. In that context, the test is whether the sole purpose of joining a defendant is to sue them other than in their Member State of domicile [35]. The EU case law also suggests that the abuse of law doctrine is limited to situations where EU law is invoked collusively to subvert other EU provisions [36]. In light of the decision in Owusu v Jackson (C 281/02) [2005] QB 801 (CJEU), arguments based on forum conveniens cannot justify derogating from the primary rule of jurisdiction in article 4.1 [36 40]. The concern about the wide effect of article 4.1 in this case is best addressed under the domestic law on the necessary or proper party gateway [40]. The claimants thus succeed on issue (1) [41]. (2) Real triable issue as against Vedanta: The summary judgment test applies to issue (2) and it falls to be decided without cross examination or disclosure of the opposing partys documents, given the need for proportionality [42 43]. In this case, the question what level of managerial intervention by Vedanta in KCMs operation of the Mine is sufficient to attract liability in negligence is a question for Zambian law, but the question what that level actually was is a pure question of fact [44]. The assertion that the negligence claim against Vedanta raises a novel and controversial legal issue is misplaced, as the liability of parent companies in relation to the activities of their subsidiaries is not, in itself, a distinct category of negligence unsuited to summary determination [49 51, 54]. On the facts, there was sufficient material identified by the judge in support of the view that the claimants case was arguable and the judge made no error of law in assessing this issue, so his decision on the negligence claim must stand [55 62]. Further, as Zambian law requires substantially the same factual inquiry for the breach of statutory duty claim, the judge properly concluded that this claim was also arguable and, in any event, the point is academic [65]. (3) England as the proper place: The domestic law proper place test requires a summary examination of connecting factors to one or more potential jurisdictions [66]. The search is for a single jurisdiction in which the claims against all defendants may most suitably be tried [68]. Importantly, in cases where it was found that the claim(s) against the anchor defendant will be continued in England, the courts have treated the risk of irreconcilable judgments as a decisive factor in favour of England as the proper place for the claim against the non EU defendant as well [70]. The judge in this case applied that approach [71 72]. That was a legal error in circumstances where Vedanta had by the time of the hearing offered to submit to the Zambian jurisdiction, so that the whole case could be tried there [75, 79]. While an offer to submit does not preclude a claim in England against Vedanta alone, it has the effect that a risk of irreconcilable judgments would be the result of the claimants choice to exercise their article 4 right, rather than because Zambia is not an available forum for all the claims [75]. Leggatt Js judgment in OJSC VTB Bank v Parline Ltd [2013] EWHC 3538 (Comm) is overruled on this point since: (1) article 4 is not designed to avoid the risk of irreconcilable judgments; (2) article 8.1 on joinder is limited to the intra EU context and gives claimants a choice to consolidate proceedings in order to avoid that risk; and (3) there is no reason therefore why claimants should not have to make the same choice, merely because the foreign defendant is domiciled outside the EU [79 83]. It does not follow that the risk of irreconcilable judgments is not a relevant factor in this case, but it is no longer a trump card such that the judge made an error of principle in regarding it as decisive [84]. Looking at the relevant connecting factors in the round, Zambia would plainly have been the proper place for this litigation as a whole, provided substantial justice was available to the parties in Zambia [85 87]. The risk of irreconcilable judgments mainly concerns the claimants, and they have the choice to avoid it by suing all the defendants in Zambia, or to incur it by exercising their right to sue Vedanta in England. (4) Substantial justice in Zambia: Even if the court concludes that a foreign jurisdiction is the apparently the proper place, the court may still permit service of English proceedings on the foreign defendant if cogent evidence shows that there is a real risk that substantial justice would not be obtainable in that foreign jurisdiction [88]. In this case, the judge identified access to justice issues in Zambia [89]. It is not in doubt that Zambia has independent judges, courts and civil procedure which would ensure a just trial of large environmental group claims like this one [89]. The issues are twofold. First, the practicable impossibility of funding such group claims where the claimants are all in extreme poverty, because they could not obtain legal aid and because conditional fee agreements (CFAs) are unlawful in Zambia [89 90]. Secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable effective litigation of this size and complexity, in particular against a well resourced opponent like KCM [89]. The criticisms that the judge failed in his approach to the access to justice issue are not well founded [92 98]. Overall, the defendants fail on issue (4), which means their success on issue (3) is academic [101 102]. Conduct of litigation on jurisdiction: The court takes the opportunity to warn litigants of the need to conduct jurisdiction disputes in an economical and proportionate manner [6 14].

This case concerns the circumstances in which sentences passed on assisting offenders (that is, offenders who have given assistance to prosecuting authorities) should be referred back to the sentencing court under section 74 of the Serious Organised Crime and Police Act 2005. The Divisional Court in Northern Ireland ([2015] NIQB 33, Morgan LCJ, Weir J and Treacy J) concluded that the decision of a member of the Public Prosecution Service (PPS) not to refer to the original sentencing court the sentences passed on Robert and David Stewart should be quashed. PPS appeals that decision. The relevant facts Robert and David Stewart are brothers. They had been, by their own admission, members of a loyalist paramilitary organisation in Northern Ireland for several years. On 4 August 2008, they went to a station of the Police Service of Northern Ireland (PSNI) in Antrim. There they admitted having been involved in the murder of a man called Thomas English. Mr English had been killed on 30 October 2000. After many interviews with police officers, the Stewart brothers entered into agreements with a specified prosecutor, Mr Raymond Kitson. A specified prosecutor is a person nominated in section 71(4) of the 2005 Act or a person designated for the purposes of the section by one of the nominated individuals. Mr Kitson, who was a member of the PPS, was duly designated as a specified prosecutor under this provision. The agreements were made on 15 October 2008. Among other things, they required the Stewarts to assist in the investigation being conducted by the Police Service of Northern Ireland into offences relating to the murder of Thomas English on 31 October 2000 . and into other offences connected and unconnected with [that] incident . The agreements also required that the Stewarts participate in a debriefing process, that they should provide all information available to them and give a truthful account of the activities of all others involved. It was further stipulated that the Stewarts plead guilty to the offences to which they had admitted. It was also required that they maintain continuous and complete co operation throughout the investigation and any consequent court proceedings and that they give truthful evidence in any court proceedings arising from the investigation. The agreements stated that failure to comply with their terms could result in any sentence the Stewarts might receive being referred back to the court for review pursuant to section 74 of the 2005 Act. On 10 February 2010, the Stewarts duly pleaded guilty to various offences, including murder, and on 5 March 2010, they were sentenced to life imprisonment. Hart J, a very experienced criminal judge, stated that, in normal circumstances, the tariff for these offences would be 22 years. He applied a 75% reduction on that notional tariff, taking account of the Stewarts assistance under the 2005 Act. The judge then further reduced the period to be served in light of their guilty pleas and personal circumstances. The final effect was that the Stewarts were required to serve a minimum term of three years before they could be considered for release on licence. Taking into account the period that they had served on remand, they were both released on life licence on 18 August 2011. As a result of the interviews with the Stewarts, a number of persons were charged with various offences. Following a lengthy trial before Gillen J, all but one were acquitted of the charges. The single defendant to be convicted was found guilty on the basis of evidence other than that given by the Stewarts. The respondent, Jason Loughlin, was one of the accused who was acquitted. He applied for judicial review of the decision not to refer the case of the Stewarts back to the sentencing court and it was his application which succeeded before the Divisional Court. A number of observations can be made about the trial: (i) There were 14 defendants and 37 counts on the indictment comprising five episodes or instances of alleged criminal behaviour. By any standards, this was a case of considerable complexity which would have presented substantial challenges to all involved in it, including the principal witnesses; (ii) The Stewarts gave evidence over 26 and 30 days respectively. They were each subject to cross examination by no fewer than 14 sets of counsel for the accused; clearly, the opportunity to exploit even minor differences in evidence and recollection will increase as testimony about a significant number of historical events is repeatedly albeit entirely properly challenged and scrutinised; (iii) An application for a direction of no case to answer on all counts was made to the trial judge at the end of the Crown case. Gillen J held that the proper test to be applied was that outlined in R v Courtney [2007] NICA 6, which had applied the principles set out in R v Galbraith 73 Cr App R 124, R v Shippey (1998) Crim LR 767 and Chief Constable v Lo [2006] NICA 3. The judge therefore held that he must look at all the evidence whether supportive of the Stewart brothers or otherwise and ask myself whether that evidence is not so weak or so discredited that it could not conceivably support a guilty verdict para 15 of the judgment on the application for a direction [2012] NICC 3. He refused an application on all but two counts. (iv) None of the accused gave evidence on their trial; (v) The judge expressed himself as not having the slightest difficulty [in] accepting in general terms the statement by the Stewarts throughout their evidence that a variety of circumstances had contributed to faulty recollections on their part para 252 of his principal judgment [2012] NICC 5; (vi) The judge concluded that the Stewarts had lied to the police and to the court. He conducted a wide ranging, painstaking examination of their evidence. Frequently, in his judgment, he acknowledged the extreme difficulty in reaching conclusions about whether accounts he found to be unreliable were the product of imperfect memory, the ravages that alcohol and drug consumption had wrought on both witnesses, the circumstance that both had been engaged in long careers of criminal offending, a natural inclination to understate their own role and to exaggerate that of others, or plain fabrication. But it is unquestionably true that in a number of instances, the judge found that the Stewarts had not been truthful. The 2005 Act The background to the 2005 Act is well explained in the judgment of the Court of Appeal in R v P and Blackburn [2007] EWCA Crim 2290. At para 22 the court said this: There never has been, and never will be, much enthusiasm about a process by which criminals receive lower sentences than they otherwise deserve because they have informed on or given evidence against those who participated in the same or linked crimes, or in relation to crimes in which they had no personal involvement, but about which they have provided useful information to the investigating authorities. However, like the process which provides for a reduced sentence following a guilty plea, this is a longstanding and entirely pragmatic convention. The stark reality is that without it major criminals who should be convicted and sentenced for offences of the utmost seriousness might, and in many cases, certainly would escape justice. Moreover, the very existence of this process, and the risk that an individual for his own selfish motives may provide incriminating evidence, provides something of a check against the belief, deliberately fostered to increase their power, that gangs of criminals, and in particular the leaders of such gangs, are untouchable and beyond the reach of justice. The greatest disincentive to the provision of assistance to the authorities is an understandable fear of consequent reprisals. Those who do assist the prosecution are liable to violent ill treatment by fellow prisoners generally, but quite apart from the inevitable pressures on them while they are serving their sentences, the stark reality is that those who betray major criminals face torture and execution. The solitary incentive to encourage co operation is provided by a reduced sentence, and the common law, and now statute, have accepted that this is a price worth paying to achieve the overwhelming and recurring public interest that major criminals, in particular, should be caught and prosecuted to conviction. The 2005 Act placed the common law position on a statutory footing. In its material parts, section 73 of the Act, dealing with reductions in sentences which may be passed on assisting offenders provides: 73. Assistance by defendant: reduction in sentence (1) This section applies if a defendant (a) following a plea of guilty is either convicted of an offence in proceedings in the Crown Court or is committed to the Crown Court for sentence, and (b) has, pursuant to a written agreement made with a specified prosecutor, assisted or offered to assist the investigator or prosecutor in relation to that or any other offence. (2) In determining what sentence to pass on the defendant the court may take into account the extent and nature of the assistance given or offered. If the court passes a sentence which is less than it (3) would have passed but for the assistance given or offered, it must state in open court that it has passed a lesser sentence than it (a) would otherwise have passed, and (b) what the greater sentence would have As the facts of this case illustrate, substantial reductions in sentences, even for the most serious crimes, may be achieved under this section. Indeed, as the Divisional Court pointed out, section 73(5) of the 2005 Act permits the sentencing court to decide on a reduction which would have the effect of imposing a sentence of less than the minimum term that is otherwise prescribed by law. Since sentences passed on those who have entered agreements under section 74 will, at least usually, be imposed before any assessment of their adherence to the terms of the agreement can be made, it is unsurprising that the 2005 Act provides for possible review of the sentences passed. The circumstances in which such a review may take place are provided for in section 74 which, so far as is material, provides: 74. Assistance by defendant: review of sentence (1) This section applies if the Crown Court has passed a sentence on (a) a person in respect of an offence, and (b) the person falls within subsection (2). (2) A person falls within this subsection if (a) he receives a discounted sentence in consequence of his having offered in pursuance of a written agreement to give assistance to the prosecutor or investigator of an offence but he knowingly fails to any extent to give assistance in accordance with the agreement (3) A specified prosecutor may at any time refer the case back to the court by which the sentence was passed if the person is still serving his sentence, and the specified prosecutor thinks it is in the (a) (b) interests of justice to do so. (4) A case so referred must, if possible, be heard by the judge who passed the sentence to which the referral relates. (5) If the court is satisfied that a person who falls within subsection (2)(a) knowingly failed to give the assistance it may substitute for the sentence to which the referral relates such greater sentence (not exceeding that which it would have passed but for the agreement to give assistance) as it thinks appropriate Two aspects of this section deserve special mention. First, so far as the Stewarts are concerned, it was a prerequisite of consideration whether to refer their sentences that they knowingly failed to give assistance in accordance with the agreement. (Sub paragraphs (b) and (c) of section 74(2) prescribe other circumstances in which a referral may be made but they are not relevant here.) Unless, therefore, it is concluded that the Stewarts had knowingly failed to comply with the agreements, they do not come within section 74(2) and the section does not apply to them. The second feature of the section which should be noted is that, even when it is concluded that assisting offenders such as the Stewarts have knowingly failed to give the assistance in accordance with the agreement, the specified prosecutor must address the question whether it is in the interests of justice to make the reference. It is only when she or he thinks that it is in the interests of justice that this should happen, that the reference may be made. Before the Divisional Court, some debate was engaged about whether the test was that the interests of justice required that the sentences be referred. For reasons that I will give presently, I do not consider that it is useful to approach the question of what is in the interests of justice as one of necessity. But it is equally undesirable, in my view, to constrain the specified prosecutors consideration of whether the interests of justice indicate one course or the other, by reference to a test which has not been referred to in the statute, such as whether the circumstances have changed from those in which the original sentences were passed. Again, I will give my reasons for that conclusion later in this judgment. The specified prosecutors consideration of whether to refer Pamela Atchison was the deputy Director of Public Prosecutions for Northern Ireland at the time that consideration was undertaken as to whether the sentences passed on the Stewarts should be referred to the original sentencing court. She was designated as the specified prosecutor to consider whether such a reference should be made. Mrs Atchison took the advice of experienced senior counsel on some aspects of her decision but she has stated that the conclusion that she reached was hers alone. The reasons she decided not to refer the Stewarts case were outlined by Mrs Atchison in a lengthy document of some 260 paragraphs. In it, she explained that she had concluded that both Stewarts had knowingly failed on a number of occasions to give the assistance which they had undertaken to provide. Her conclusions broadly reflected those in which Gillen J had decided that the witnesses evidence was deliberately mendacious. The respondent has claimed that this fell impermissibly short of the proper examination of this issue. In effect, the respondent argued that the specified prosecutor was required to examine minutely every conceivable aspect of the Stewarts accounts, both during their evidence in court and in their interviews before the trial. The Divisional Court did not accept that argument. Nor do I. Quite apart from the impossible logistical burden which this would have imposed on the specified prosecutor, the respondents argument rested mainly on the proposition that, because the trial judge had referred in general terms at various points in his judgment to the Stewarts having lied, this should have prompted the specified prosecutor to examine their accounts intensely to decide whether there were instances of a failure to comply with the agreements into which they had entered and which had not been referred to by the judge. The lack of realism of this submission is exposed when one considers that Gillen Js judgment on the application for a direction of no case to answer consisted of 85 paragraphs and his final judgment ran to 556 paragraphs. Both judgments were carefully considered by Mrs Atchison and every specific instance in which the judge found that the Stewarts had lied was analysed by her in detail. It was entirely reasonable for her to conclude that the judge had examined meticulously all the evidence on the question of whether the Stewarts had lied. The specified prosecutor was therefore perfectly entitled to concentrate on those passages of the judgments which dealt directly with that issue. On the question of whether it was in the interests of justice that the case be referred to the sentencing court, the specified prosecutor outlined a number of reasons which led her to the conclusion that it should not be. Of the five breaches by David Stewart of the undertakings that he had given, she said that these either did not attribute criminal conduct to the accused (beyond that which had otherwise been alleged) or were self serving lies which undermined his credibility rather than imputing criminal conduct to an innocent individual. To put the significance of Stewarts lies further in context, Mrs Atchison at para 247 of her decision document said this: the issue of lies was only one of several issues that impacted negatively upon the credibility of [David Stewart]. Further issues, all of which were significant, included his previous bad character, his abuse of alcohol and drugs, the possibility of contamination, his difficulties with memory, and his tendency to confuse incidents and the details of those participating in them. In these circumstances, I do not consider it possible to conclude that the breaches per se were in any way determinative of the outcome of the trial. In other words, even if David Stewart had not told lies about these incidents, the other frailties in his testimony were just as likely to lead to the same result. In a word, it was impossible to conclude that the fact of lying was in any way pivotal. Mrs Atchison identified five factors which, she said, were of primary importance in deciding not to refer David Stewarts case to the court which had sentenced him. These were: a. The nature and extent of the assistance provided. She concluded that David Stewart had given very significant evidence to the police and that this was a factor in his favour. The time which had elapsed since the original sentence had been b. passed. The duration of any return to custody, if ordered, was likely to be short, in her estimation, given the nature and materiality of the breaches and the fact that more than 18 months had elapsed between his release from prison and her consideration of whether to refer the case back to the sentencing court. (Her report was prepared in April 2013.) c. Whether the imposition of a revised sentence might be considered oppressive. In this context, medical evidence suggested that, if he was returned to prison, there was a risk to David Stewarts life. While Mrs Atchison accepted that this consideration was not determinative of whether the case should be referred, it was a factor of some weight against taking that course. The potential damage to public confidence in the justice system if a d. referral was not made. The specified prosecutor accepted that public confidence might be undermined if it was perceived that an assisting offender had failed to comply with undertakings on which a discounted sentence was based. But this was offset by the consideration that the failure to comply did not result per se in the acquittal of the defendants. Moreover, in light of the risk that a referral would not result in an increase in the sentences, there was a chance that, so far from increasing confidence in the 2005 Act regime, it would have the opposite effect. The prospects of a successful application to the reviewing court. e. Mrs Atchison pointed out that, section 74(5) invests the reviewing court with a discretion as to what, if any, sentence it should substitute where there had been a breach of the section 73 agreement. The court was likely to have regard to the same or similar factors which had influenced her decision. The prospects of a referral resulting in a change in sentence were low, therefore, in her view. The specified prosecutor carried out a similar analysis in relation to Robert Stewart. In his case, only two instances of deliberate untruths were identified. For similar reasons to those expressed in relation to his brother, Mrs Atchison decided that his case should not be referred. The Divisional Courts judgment Central to the Divisional Courts decision was its consideration of R v P and Blackburn [2007] EWCA Crim 2290. The court considered that the critical passage from the Court of Appeals judgment was para 33. This is what Morgan LCJ said about it in para 56 of his judgment: At para 33 the court indicated that a review under section 74 is a fresh process which takes place in new circumstances. We consider that this analysis is helpful in understanding how the prosecutor should approach the interests of justice test in section 74(3)(b) of the 2005 Act. If the prosecutor concludes that the failure to give assistance is such that the court could not conclude that the circumstances had altered as a result, the interests of justice would rarely require referral. If, as is generally likely to be the case where there has been a failure or refusal to provide assistance, the court could take the view that the circumstances had changed the interests of justice would point towards a referral unless there were countervailing considerations. It is with those principles in mind that we examine the approach of the prosecutor in this case. This statement suggests that, absent countervailing considerations, where there had been a change in circumstances, a referral to the original sentencing court should occur. That proposition, if correct, would involve a radical circumscription of the specified prosecutors consideration of where the interests of justice lay. A close examination of what the Court of Appeal in fact said in P and Blackburn is therefore necessary. Before conducting that examination, it should be observed that passages from the Divisional Courts judgment put beyond doubt that the critical question for that court was whether circumstances had changed. At paras 63 and 64 of his judgment, the Lord Chief Justice said that the first task of the prosecutor is to determine whether the court [to which the sentence might be referred] could conclude that the circumstances had changed and [t]he prosecutor did not ask whether the court could conclude that the circumstances had changed. These statements suggest (i) that the specified prosecutor, in deciding where the interests of justice lay, must first address the question whether it was possible that the sentencing court might conclude that there had been a change in circumstances from those which obtained when the original discounted sentence had been passed; and (ii) that if she decided that such a possibility existed, unless there were countervailing circumstances, she was bound to conclude that it was in the interests of justice that the cases be referred to the original sentencing court. For reasons that I will give later, I do not consider that either of these propositions is right. R v P and Blackburn In the case of P, he had been charged with offences arising from the importation of controlled drugs. While awaiting trial, he instructed his solicitor to contact police officers investigating a murder, which had occurred some years earlier. A meeting was arranged between the applicant and a senior investigating police officer. During the meeting, P provided information relating to the murder. He also told police about unrelated criminal activity by a major drug dealer. In due course, he pleaded guilty to various charges. All of this took place before the coming into force of the 2005 Act and, although the trial judge was informed of Ps co operation, it was clear that this had not led to any police investigation of the crimes which P had told the police about nor to any particular risk to him. A sentence of 17 years was imposed. After he had been sentenced, P contacted the police again. He provided information relating to a current murder investigation and agreed to give evidence against those persons alleged to be responsible for the murder, as well as detailing the criminal offences which he had personally committed. The led to a document being prepared by a senior police officer for the purposes of Ps appeal against sentence. As a result his sentence was reduced to 15 years imprisonment. Again, this took place before the coming into force of the 2005 Act. After that Act came into force in April 2006, P entered an agreement with a specified prosecutor. This was in similar terms to the agreements made with the Stewart brothers in this case. P not only supplied information about the criminal activity of others, he admitted to a series of offences which had not been involved in his earlier appearances before the courts. He and his family were considered to be at serious risk as a consequence of the information which he supplied about crimes committed by others. P came before the criminal courts again, firstly, to be sentenced in relation to the offences that he had lately admitted but also on a reference back under section 74(3) of SOCPA by the specified prosecutor for a review of the sentence of 15 years imprisonment, as substituted by the Court of Appeal for the original sentence. This, then, was the converse of the situation in which a reference back to the original sentencing court in the case of the Stewarts was considered. As a result of the further co operation given by P, plainly the specified prosecutor considered that a reduction of the sentence of 15 years should be considered. The judge agreed. As well as sentencing P for the newly admitted offences, he reviewed the sentence of 15 years and substituted for this one of five years imprisonment. The Court of Appeal did not disturb this sentence but it reduced the sentence for the offences to which P had been required to admit as a result of his involvement in the agreement made under the 2005 Act. Blackburns case is less directly relevant to the issues which arise in this appeal. He had entered an agreement under the 2005 Act with a specified prosecutor before he appeared before Simon J. He was sentenced to four years imprisonment and his appeal was, essentially, confined to the argument that this did not entirely reflect the appropriate discount for the assistance which he had given and that the overall starting point was too high. The Court of Appeal accepted those arguments and reduced the sentence to two and a half years imprisonment. A clear insight into the circumstances in which the Court of Appeal considered that it should review the substituted sentence is critical to the outcome of this appeal. Did it suggest that a change in circumstances from those which existed at the time that the originally discounted sentence was passed would normally call for a reference back to the sentencing court? The answer to that question must begin with an examination of what the Court of Appeal actually said in para 33: 33. Ps appeal raises a specific question relating to the involvement of this court. The original 17 year sentence was reduced to 15 years when this court exercised its powers under section 9 of the Criminal Appeal Act 1968. The jurisdiction to conduct a review of sentence on the basis of post sentence assistance is vested in the Crown Court. Its decision on the review is subject to appeal to this court. Therefore, the review itself is not an appeal against sentence, whether imposed in the Crown Court or this Court. It is a fresh process which takes place in new circumstances. Accordingly, the process of review is not inhibited by the fact that this court has already heard and decided an appeal against the original sentence, whether the sentence is varied on appeal or not. This Court may be required to address either a sentence imposed in the light of the written section 73 agreement, or a review conducted in accordance with section 74, or, as here in the case of P, where the assistance provided may impinge on both decisions. From this passage, it is clear that the Court of Appeal was referring to the fresh process in order to distinguish it from a conventional appeal against sentence and to make the point that the review could proceed, unconstrained by the fact that an earlier appeal had taken place. The court did not suggest that a change in circumstances should normally precipitate a referral to the sentencing court. In fact, of course, in the case of P there was a change in circumstances in that he had latterly decided to give useful information to the police and had agreed to testify against former colleagues. It was this which had prompted the decision to refer. Clearly, Ps change of heart and his willingness to assist in the police operation against serious criminals was considered to warrant the referral. But it is wrong to extrapolate from this that, where a change in circumstances (such as a failure to comply fully with an agreement made with a specified prosecutor) occurs, this will inevitably, or even usually, lead to a decision to refer. As I have said earlier, Ps case was the obverse of the Stewarts. The enhanced level of his co operation prompted a referral in order to secure a greater discount on his sentence. In the case of the Stewarts, the question was whether their failure to live up to the expectations generated by the agreement required a referral in the interests of justice. In a case such as the Stewarts, it is difficult to think of a situation in which a referral back to the sentencing court would be contemplated unless circumstances had changed. Indeed, from the statements contained in paras 63 and 64 of the Divisional Court (referred to in para 20 above) it is clear that the court considered that, if the specified prosecutor believed that there was a possibility that the sentencing court might consider that the circumstances had changed, it was her duty to refer. In effect, any lapse from the co operation expected of an assisting offender would require the specified prosecutor to refer. How otherwise could she conclude that there was no possibility that the sentencing court would conclude that circumstances had not changed? If the Divisional Courts formulation was correct, the decision of the specified prosecutor as to whether it was in the interests of justice to refer the case back to the sentencing court would have no meaningful content. If there was the merest deviation by the assisting offender from the agreement made with the specified prosecutor, the case would have to be referred. Discussion The Divisional Courts view that the predominant factor in deciding where the interests of justice lay was whether a change in circumstances had occurred between those which obtained at the time that the agreement with the specified prosecutor was made and the time at which consideration of whether to refer the case back to the original sentencing court took place cannot be upheld. Consideration of the interests of justice in this context involves an open ended deliberation. Section 74(3) imposes no explicit constraint on how the specified prosecutor should approach the question and there is no warrant, in my opinion, for implying a fetter on the exercise of the unrestricted discretion for which the statute clearly provides. It is not difficult to envisage a wide range of factors beyond the question of whether circumstances had changed which might be pivotal in deciding if the original sentence should be referred back to the court which imposed it. Reasons for a failure to strictly adhere to the terms of the agreement with the specified prosecutor could range over a broad spectrum of possibilities. If a change of circumstances is considered to occur when the assisting offender gives testimony which is at odds with the account that he originally gave to the police, what if, despite this, a number of the accused were convicted on the basis of his evidence? Could it be said that the interests of justice inevitably require referral back to the sentencing court? Or, if the witness, because of a well established fear of attack on his family, recants on the evidence that he had agreed to give, is that to be left out of account in deciding whether the interests of justice demand that there be a referral to the original sentencing court? It is not suggested that the factors which Mrs Atchison took into account were irrelevant to a consideration of where the interests of justice lay, provided that consideration is untrammelled by the precondition which the Divisional Court believed should apply. Hers was an open examination of that question. In my view, she was not only entitled to approach the issue in that way, she was obliged to do so. I consider that her report demonstrates a careful, perfectly legitimate investigation of the question of the interests of justice in these particular cases and that her conclusions cannot be impeached. Other incidental arguments The appellant submitted that the challenge in this case was to a species of prosecutorial decision, analogous to that as to whether to instigate criminal proceedings. Mr McGleenan QC argued that cases such as R v Director of Public Prosecutions, Ex p Manning [2001] QB 330; Mohit v Director of Public Prosecutions of Mauritius [2006] UKPC 20; [2006] 1 WLR 3343; In re Lawrence Kincaid [2007] NlQB 26; Sharma v Brown Antoine [2007] 1 WLR 870; McCabe [2010] NIQB 58; and In re Mooneys Application [2014] NIQB 48 all impelled reticence on the part of a court in reviewing any prosecutorial decision. I do not feel it necessary to address this argument. The decision under challenge here is certainly one taken by a prosecutor. Whether it is truly analogous with a decision whether to instigate criminal proceedings (as in the cited cases) is significantly less clear. Many considerations which touch on the question of whether proceedings should be instituted are not relevant in the present context. For the respondent, Mr Scoffield QC submitted that the overweening consideration in the interests of justice consideration was that an appropriate sentence be passed on the Stewarts for their admitted egregious crimes and that this should be primarily a matter for a court, rather than the specified prosecutor, to decide. I reject this argument principally because of its implicit premise which replicates the approach of the Divisional Court that the specified prosecutor should defer to the sentencing courts possible view that a different sentence would be appropriate. The specified prosecutor may well have to consider many factors which would not be directly relevant to a conventional sentencing exercise. Factors quite extraneous to the personal circumstances of the individuals who might be subject to a referral might properly influence the specified prosecutors decision. It might well be relevant, for instance, that a decision to refer could affect the possibility of others offering the type of assistance which assisting offenders such as the Stewarts said that they were prepared to provide. It was argued that, at various points in the document in which Mrs Atchison explained why she had decided not to refer the Stewarts case, she had stated that the interests of justice did not require that the cases be referred. It was suggested that this betokened a view that unless the interests of justice positively required a referral, it should not take place. The specified prosecutor repudiated that suggestion. She explained that this was merely a form of words which she customarily used when reaching a decision as to where the interests of justice lay. There is no reason to invest the use of these words with the significance that the respondent has sought to ascribe to them. Conclusion I would allow the appeal and dismiss the respondents application for judicial review.

This case concerned the circumstances in which sentences passed on offenders who have given assistance to prosecuting authorities should be referred back to the sentencing court under section 74 of the Serious Organised Crime and Police Act 2005 (the 2005 Act). In August 2008 Robert and David Stewart, former members of a loyalist paramilitary organisation in Northern Ireland, arrived unexpectedly at a police station in Northern Ireland. They informed police about their involvement in offences including a murder in October 2000. They also supplied police with information concerning the alleged involvement of others in those offences. On foot of the information which they provided, the Stewarts entered into agreements with the prosecuting authorities to provide information and assist with ongoing investigations. They also undertook to provide truthful evidence at trial and to plead guilty to the offences they had committed. These agreements stated that failure to comply with the terms could result in any sentence received being referred back to the sentencing court for review pursuant to section 74 of the 2005 Act. In recognition of their assistance, the tariff for their life sentences was reduced by 75% and they both served 3 years in prison. A number of people were charged with different offences as a result of the information given by the Stewarts. Following a long trial, only one person was convicted but this was not because of evidence given by the Stewarts. Jason Loughlin was one of those acquitted. He applied for a judicial review of the decision of the prosecutor not to refer the case of the Stewarts back to the sentencing court. His application succeeded before the Divisional Court. The prosecutor appealed to this court against the Divisional Court's decision. The Supreme Court allows the appeal and dismisses the application by the Respondent, Mr Loughlin, for judicial review. Lord Kerr gives the judgment with which all other members of the panel agree. Section 74 of the 2005 Act requires that, before deciding to refer a sentence passed on an assisting offender back to the original sentencing court a prosecutor must be satisfied that the assisting offender had knowingly failed to comply with the terms of the agreement made with the prosecuting authorities and that a reference was in the interests of justice [11 12]. The Court rejected the Respondents argument that the prosecutor was required to carefully examine every conceivable aspect of the Stewarts accounts. This would have placed an impossible logistical burden on the prosecutor [15 16]. The prosecutor considered that it would not be in the interests of justice to refer the decision back to the sentencing court. She identified five factors relevant to her decision: (i) the nature and extent of assistance provided; (ii) the time which had elapsed since the original sentence had been passed; (iii) whether the imposition of a revised sentence might be considered oppressive; (iv) the potential damage to public confidence in the justice system if a referral was not made; and (v) the prospects of a successful application to the reviewing court. Having analysed these factors in relation to the Stewarts, the prosecutor concluded that the case should not be referred [17 19]. The Divisional Court had considered the key question to be whether circumstances had changed since the original sentence had been passed, suggesting that (i) the prosecutor must first consider whether there had been a change of circumstances; and (ii) if such a change had occurred, unless there were countervailing circumstances, she was bound to conclude that it was in the interests of justice that the case be referred [21 22]. The Court rejected this conclusion. To require the prosecutor to refer a sentence back where there had been a change of circumstance would entail a reference in any instance of deviation by the assisting offender from the agreement. The requirement that the referral be in the interests of justice would then have no meaningful content. Consideration of the interests of justice involves an open ended deliberation section 74(4) does not impose any constraints on how the prosecutor should approach the question [29 31].

Can a member of a Limited Liability Partnership (LLP) be a worker within the meaning of section 230(3) of the Employment Rights Act 1996 (the 1996 Act)? If she is, she may claim the benefit of the protection given to whistle blowers in sections 43A to 43L of that Act, inserted by the Public Interest Disclosure Act 1998. There are also potentially other rights involved if the member is a worker. Section 230(3) of the 1996 Act defines two sorts of worker for the purpose of that Act. Limb (a) covers an individual who has entered into, works under or has worked under a contract of employment. No one has suggested that the contract between the member and the LLP in this case was a contract of employment. The question is whether the member falls within limb (b) of section 230(3), which covers an individual who has entered into or works under or worked under any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. Section 230(5) is also relevant: In this Act, employment . (b) in relation to a worker, means employment under his contract; and employed shall be construed accordingly. Section 230(4) provides that in the Act, employer means the person by whom the worker is employed. 4. The immediate context is whether the member can claim the benefit of the protection given to whistle blowers by the 1996 Act. But limb (b) workers are also able to claim two other rights under the 1996 Act, the right not to suffer an unauthorised deduction from wages (section 13) and the right not to be subjected to a detriment for exercising rights under the Working Time Regulations (SI 1998/1833) (section 45A). The same definition of worker is also used in some other legislation, most notably the National Minimum Wage Act 1998, the Working Time Regulations 1998 (SI 1998/1833), and the Part time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551). But the rights given to this type of worker are much less extensive than those given to workers under a contract of employment. They do not, for example, include protection against unfair dismissal. The facts 5. The appellant is an English qualified solicitor. In 2005 she was employed by Shadbolt & Co LLP to develop a joint venture with a Tanzanian law firm, with whom she also had an employment contract. In 2009, Shadbolt ended their joint venture with that firm but entered into a joint venture with a different Tanzanian firm. Later in 2009, Clyde & Co LLP were negotiating to take over various parts of Shadbolts business, including the Tanzanian joint venture. On 24 December 2009, they made a formal offer to the appellant, subject to completion of the deal with Shadbolt. Under this, she would become an Equity Partner of the LLP. Her annual share of the LLP profits was fixed at 103,000 (whether or not the LLP actually made a profit). Her existing arrangements with the Tanzanian joint venture would continue. The LLP would look to propose her as a Senior Equity Partner once the results of the joint venture are able to provide a track record showing the sustainability of income and profit to satisfy our partnership process. 6. The deal with Shadbolt was completed in February 2010, when the appellant became a member of Clyde & Co LLP. She signed a Deed of Adherence to the LLPs Members Agreement. The other parties to the Deed were the LLP and each of the Members individually. Under the Members Agreement, there were two levels of membership, Equity Members and Senior Equity Members. Senior Equity Members were placed on the LLPs lockstep, each level of which conferred a certain number of profit sharing units. Equity Members received a fixed annual share of profits and such profit sharing units as the management board might determine. The rights of the Senior Equity Members were more extensive than those of the Equity Members, but they could all vote to elect the Senior Partner and the members of the management board. Members agreed that the objective of each Member shall be to carry on business for the best advantage of the LLP so as to promote the wellbeing and success of the Business for the prosperity and advantage of all Members and to that end each Member shall devote his full time and attention to the Business and that each Member shall be just and faithful to the LLP in all transactions relating to the Business and in relation to the property and other assets of the LLP. Business is defined as the business to be carried on by the LLP as set out in clause 3, which states that [t]he LLP carries on business as solicitors, foreign lawyers and registered European lawyers. 7. In November 2010, the appellant reported to the LLPs money laundering reporting officers that the managing partner of the Tanzanian law firm had admitted paying bribes to secure work and to secure the outcome of cases. She claims that these were protected disclosures within the meaning of section 43A of the 1996 Act. She also claims that she was subject to a number of detriments as a result, including suspending her, making allegations of misconduct against her and ultimately expelling her from the LLP in January 2011. These claims are denied by the LLP and have not yet been tried. 8. In February 2011, the appellant brought claims in the Employment Tribunal against the LLP and one of its Senior Equity Members under the sex discrimination provisions of the Equality Act 2010 and under the whistle blowing provisions of the 1996 Act. The respondents preliminary objection to both claims, that the Tribunal had no jurisdiction because the appellant worked primarily outside the jurisdiction in Tanzania, has been resolved in her favour. The respondents also objected to her whistle blowing claim on the ground that she was not a worker within the meaning of section 230(3) of the 1996 Act. 9. The Employment Tribunal found that she was not a worker, although she worked under a contract to do or perform personally work or services for the LLP, because she was in business in her own right receiving a share of the profits in relation to the work carried out. In the Employment Appeal Tribunal, Judge Peter Clark allowed her appeal and held that she was a worker. She was an integral part of the LLPs business, she could not offer her services to anyone else, she was in a subordinate position and the LLP was not her client. (The Court of Appeal commented that Judge Clark appears to have considered the issue of subordination in the context of determining whether the LLP was a client or customer rather than as an independent requirement in its own right: [2013] ICR 883 para 30). The LLPs appeal to the Court of Appeal was successful, but on a completely different ground from those argued in the Tribunals: [2012] EWCA Civ 1207. The decision of the Court of Appeal 10. The Court of Appeal held that the appellant could not be a worker for the purpose of section 230(3) of the 1996 Act because of section 4(4) of the Limited Liability Partnerships Act 2000. This provides: A member of a limited liability partnership shall not be regarded for any purpose as employed by the limited liability partnership unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership. 11. The LLP argued that employed by should be widely construed to include both types of 1996 Act worker. The appellant claimed that its natural meaning was restricted to contracts of employment. Elias LJ (with whom the other members of the court agreed) accepted that focusing simply on the language, the argument is not clear cut (para 48). But the intention seems to me to be that whatever the employment status of the partners under the 1890 Act, it should not alter as a result of incorporation. If Parliament did not intend to change their status as regards whether they were employees under limb (a), I can see no logical reason why Parliament would have adopted a different position with respect to the questions whether they may be limb (b) workers (para 48). 12. There was no previous case considering whether a partner could be a limb (b) worker. But both Ellis v Joseph Ellis & Co [1905] 1 KB 324 and Cowell v Quilter Goodison Co Ltd [1989] IRLR 392 established that a partner could not be an employee. Essentially this was because the partners were all in a contractual relationship with one another in a joint venture and thus each partner would have to be employed, inter alia, by himself. He would be both workman and employer, which is a legal impossibility (para 63). Further, [t]he very concept of employment presupposes as a matter of sociological fact a hierarchical relationship whereby the worker is to some extent subordinate to the employer . Where the relationship is one of partners in a joint venture, that characteristic is absent (para 64). These reasons applied just as much to limb (b) status as they did to employees. 13. Given that section 4(4) produced this result, Elias LJ did not have to consider whether it was an essential part of the definition of worker that one party was in a subordinate relationship to the other (para 68). He acknowledged that there is a powerful case for saying that, focusing solely on the language of section 230, the terms of the statutory definition of worker were satisfied in this case. He agreed with the EAT that the LLP could in no sensible way be said to be either the client or the customer of the claimant (para 69). But the analysis has to be more subtle than that (para 70). Underlying the statutory definition of worker is the notion that one party has to be in a subordinate relationship to the other. An LLP could not properly be described as a client or a customer but neither could it properly be described as an employer of its members (para 71). Hence he was inclined to the view that the employment judge was correct. He would be minded to hold that the member of an LLP would not by virtue of that status alone constitute either an employee or a worker (para 73). Whether they might enter into some separate employment relationship with the partnership, rather in the manner that a company director can do, would be a different question (para 73). This appeal 14. Mr Thomas Linden QC, on behalf of the appellant claimant, argues that the plain wording of section 230(3)(b) includes his client. It is common ground that she is employed under a contract personally to perform work or services for the LLP; she was an integral part of their business and the LLP was not her client or customer. There is no additional element of subordination involved in the concept of employment; but if there is, the claimant was subordinate for this purpose. Section 4(4) of the 2000 Act does not modify the 1996 Act in respect of worker status, but even if it did, she would have been a worker in a partnership. Finally, he argues that the claimants right to freedom of expression under article 10 of the European Convention on Human Rights requires that we construe the legislation so as to afford her effective protection for her rights. 15. On the statutory construction point, Mr Andrew Stafford QC, for Clyde & Co LLP, argues that the Court of Appeal were right for the reasons they gave. A partner under an ordinary partnership cannot be an employee of a partnership of which she is a member. Section 4(4) of the 2000 Act was plugging into that rule and applies just as much to the wider definition of worker as it does to employees. Under article 10, he argues that our whistle blowing protection is more advanced than that in much of Europe, the Convention right is not as extensive, and so it is not necessary to interpret section 230 of the 1996 Act so as to cover members of an LLP; and in any event it would go against the grain of the legislation as he has identified it, and thus not be within the bounds of possible readings for the purpose of section 3 of the Human Rights Act 1998. Discussion 16. The immediately striking thing about this case is how much hard work has to be done in order to find that a member of an LLP is not a worker within the meaning of section 230(3)(b) of the 1996 Act. It is common ground that the appellant worked under a contract personally to perform any work or services. It is now common ground that she provided those services for the LLP. It is also now common ground that the LLP was not her client or customer. The Court of Appeal accepted (para 69) that there was a powerful case that the definition was satisfied. How then can it be said that she was not a worker for this purpose? 17. The argument which found favour with the Court of Appeal was that section 230(3) had impliedly been modified by section 4(4) of the 2000 Act. It is, of course, the case that when passing the 1996 Act, or when amending it in 1998 to insert the whistle blowing provisions, Parliament could not have had limited liability partnerships in mind, because they did not then exist. It was not then known whether the pressure, mainly from large accountancy firms, to introduce some new form of business structure with limited liability would be heeded, or, if it was, what form such a structure might take. It might have retained the traditional form of partnership in England and Wales, in which the firm is not a separate legal personality but a group of individuals who contract with one another and collectively with others; or it might have been a completely new form, in which, although called a partnership, the entity has a separate legal personality. The latter course was eventually chosen. 18. Meanwhile, in another part of the forest, the Law Commission and Scottish Law Commission were conducting a joint project on partnership law. They published a joint consultation paper in 2000, shortly after the Limited Liability Partnerships Act 2000 received the Royal Assent (Law Commission Consultation Paper No 159, Scottish Law Commission Discussion Paper No 111). In this they pointed out that there was doubt in Scots law, which does accord separate legal personality to a partnership, whether a partnership could enter into an employment contract with one of its partners (para 23.21; referring to Allison v Alisons Trustees (1904) 6 F 496 and Fife County Council v Minister of National Insurance 1947 SC 629). They provisionally recommended that, if a partnership were to have a separate legal personality, it should be able to enter into a contract of employment with one of its partners. It may well be, therefore, that those with an interest in partnership law were already alert to the fact that, if a partnership were to become a separate legal entity, at the very least the arguments about whether partners could also be employees would be different. There is, after all, no problem at all about a majority shareholder also being, not only a Director, but also an employee of a limited company. 19. The Law Commissions published their Report on Partnership Law in 2003 (Law Com No 283, Scot Law Com No 192). This reported that the response of consultees to their suggestion that it should be possible for partners to become employees was divided. The Commissions were persuaded that the status, right and obligations of a partner were wholly different from those of an employee (para 13.52). Hence they recommended that a partnership should not be capable of engaging a partner as an employee. 20. We cannot know what prompted the inclusion of section 4(4) in the 2000 Act (and intriguingly, the Law Commissions do not refer to it either in their Consultation Paper or in their Report). We do know that section 4(4) has caused some bewilderment among English lawyers. In Tiffin v Lester Aldridge LLP [2012] 1 WLR 1887, para 31, Rimer LJ commented that [t]he drafting of section 4(4) raises problems. That is because in law an individual cannot be an employee of himself. Nor can a partner in a partnership be an employee of the partnership, because it is equally not possible for an individual to be an employee of himself and his co partners (see Cowell v Quilter Goodison Co Ltd [1989] IRLR 392). Unfortunately, the authors of section 4(4) were apparently unaware of this. He went on to conclude that what section 4(4) must have been getting at is not what it says that it is getting at, which is whether the member would be regarded as employed by the partnership if the members of the LLP were partners in a partnership; instead, in his view, it must have been getting at whether the LLP member would be regarded as a partner had the LLP been a partnership. 21. But once it is recognised that the 2000 Act is a UK wide statute, and that there is doubt about whether partners in a Scottish partnership can also be employed by the partnership, then there is no need to give such a strained construction to section 4(4). All that it is saying is that, whatever the position would be were the LLP members to be partners in a traditional partnership, then that position is the same in an LLP. I would hold, therefore, that that is how section 4(4) is to be construed. 22. The issue in Tiffin was whether a member of an LLP could make a claim for unfair dismissal against the LLP. That, of course, depends, not upon whether she is a worker in the wider sense used in section 230(3)(b) of the 1996 Act, but upon whether she is an employee under a contract of employment. On any view, employed by in section 4(4) would cover a person employed under a contract of service. 23. The question for us is whether employed by in section 4(4) bears a wider meaning than that and also covers those who undertake to do or perform personally any work or services for another party to the contract . In my view, it does not. 24. First, the natural and ordinary meaning of employed by is employed under a contract of service. Our law draws a clear distinction between those who are so employed and those who are self employed but enter into contracts to perform work or services for others. 25. Second, within the latter class, the law now draws a distinction between two different kinds of self employed people. One kind are people who carry on a profession or a business undertaking on their own account and enter into contracts with clients or customers to provide work or services for them. The arbitrators in Hashwani v Jivraj (London Court of International Arbitration intervening) [2011] UKSC 40, [2011] 1 WLR 1872 were people of that kind. The other kind are self employed people who provide their services as part of a profession or business undertaking carried on by some one else. The general medical practitioner in Hospital Medical Group Ltd v Westwood [2012] EWCA Civ 1005; [2013] ICR 415, who also provided his services as a hair restoration surgeon to a company offering hair restoration services to the public, was a person of that kind and thus a worker within the meaning of section 230(3)(b) of the 1996 Act. Had Parliament wished to include this worker class of self employed people within the meaning of section 4(4), it could have done so expressly but it did not. 26. Thirdly, however, doing so would have raised the question of whether partners in a traditional partnership can also be workers for that partnership in this wider sense. That would be a very different question from whether they can be employees. If Parliament had indeed wished to exclude that possibility, which might have been a change in the law, it could be expected to do so directly and expressly, but it did not. 27. Fourthly, and perhaps most importantly, there are the provisions of section 230 of the 1996 Act itself. Section 230(1) defines an employee as an individual who has entered into, works, or has worked under a contract of employment. Section 230(2) defines a contract employment as a contract of service or apprenticeship. Section 230(5) expressly provides that, in the 1996 Act, employment means both the employment of an employee under a contract of employment and the employment of a worker under his contract. Employed is to be construed accordingly. Thus, in order to be able to use the words employed and employment in a wider sense than they would normally carry, so as to cover the employment of class (b) workers and those for whom they work, Parliament expressly enacted an extension to what would otherwise be the natural and ordinary meaning of those words. Such an extension is conspicuously lacking in the 2000 Act. With the greatest of respect to Lord Clarke, I do not consider it possible to construe the wording of the 2000 Act, the conventional meaning of which is quite clear, by reference to an extended definition in an earlier Act which was restricted to that Act. For all purposes in section 4(4) of the 2000 Act refers to all the purposes for which employment under a contract of service is relevant. 28. For all those reasons, I conclude that section 4(4) of the 2000 Act does not mean that members of an LLP can only be workers within the meaning of section 230(3) of the 1996 Act if they would also have been workers had the members of the LLP been partners in a traditional partnership. 29. This means that there is no need to consider the subsidiary but important questions which would arise had section 4(4) borne the meaning for which Clyde & Co contend: (i) is it indeed the law, as held by the Court of Appeal in Cowell v Quilter & Goodison and Tiffin v Lester Aldridge LLP that a partner can never be an employee of the partnership; and (ii) if so, does the same reasoning which leads to that conclusion also lead to the conclusion that a partner can never be a worker for the partnership? Suffice it to say that Mr John Machell QC, for the interveners, Public Concern at Work, mounted a serious challenge to the rule against dual status. Ellis v Joseph Ellis was decided before section 82 of the Law of Property Act 1925 made it clear that a person could contract with himself and others. There are some contracts which a partner may make with the members of the partnership, such as lending them money or granting them a lease or a tenancy. So why should it be legally impossible to be employed, under either type of contract, by the partnership? This question raises two subsidiary questions: (a) whether such a relationship can arise from the terms of the partnership agreement itself (as apparently suggested by Lord Clarke at para 52 of his judgment), or (b) whether it can only arise by virtue of a separate contract between the partner and the partnership (a possibility kept open by Elias LJ in the Court of Appeal, see para 13 above). As it is not necessary for us to resolve any of these issues in order to decide this case, I express no opinion upon a question which is clearly of some complexity and difficulty. 30. Having reached the conclusion that section 4(4) of the 2000 Act does not operate so as to exclude the appellant from being a worker within the meaning of section 230(3)(b) of the 1996 Act, it is necessary to consider the more subtle analysis addressed in the Court of Appeal, that underlying the statutory definition of worker is the notion that one party has to be in a subordinate relationship to the other (para 71). Elias LJ would have been minded to hold that the member of an LLP would not by virtue of that status alone constitute either an employee or a worker (para 73). If by that he meant only that there are some members of an LLP who are purely investors and do not undertake personally to work for the LLP, then of course I would agree. But if by that he meant that those members who do so undertake (whether by virtue of the membership agreement or otherwise) cannot be workers, then I respectfully disagree. 31. As already seen, employment law distinguishes between three types of people: those employed under a contract of employment; those self employed people who are in business on their own account and undertake work for their clients or customers; and an intermediate class of workers who are self employed but do not fall within the second class. Discrimination law, on the other hand, while it includes a contract personally to do work within its definition of employment (see, now, Equality Act 2010, s 83(2)) does not include an express exception for those in business on their account who work for their clients or customers. But a similar qualification has been introduced by a different route. 32. In Allonby v Accrington and Rossendale College (Case C 256/01) [2004] ICR 1328, the European Court of Justice was concerned with whether a college lecturer who was ostensibly self employed could nevertheless be a worker for the purpose of an equal pay claim. The Court held, following Lawrie Blum v Land Baden Wurttemberg (Case C 66/85) [1987] ICR 483 that there must be considered as a worker a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration (para 67). However, such people were to be distinguished from independent providers of services who are not in a relationship of subordination with the person who receives the services (para 68). The concept of subordination was there introduced in order to distinguish the intermediate category from people who were dealing with clients or customers on their own account. It was used for the same purpose in the discrimination case of Jivraj v Hashwani. 33. We are dealing with the more precise wording of section 230(3)(b). English cases in the EAT have attempted to capture the essential distinction in a variety of ways. Thus in Byrne Bros (Formwork) Ltd v Baird [2002] ICR 667, Mr Recorder Underhill QC suggested, at para 17(4), that [t]he reason why employees are thought to need such protection is that they are in a subordinate and dependent position vis a vis their employers: the purpose of the Regulations is to extend protection to workers who are, substantively and economically, in the same position. Thus the essence of the intended distinction must be between, on the one hand, workers whose degree of dependence is essentially the same as that of employees and, on the other, contractors who have a sufficiently arms length and independent position to be treated as being able to look after themselves in the relevant respects. In Cotswold Developments Construction Ltd v Williams [2006] IRLR 181, 34. Langstaff J suggested, at para 53, that . a focus on whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principals operations, will in most cases demonstrate on which side of the line a given person falls. 35. In James v Redcats (Brands) Ltd [2007] ICR 1006, Elias J agreed that this would often assist in providing the answer but the difficult cases were those where the putative worker did not market her services at all (para 50). He also accepted, at para 48, that . in a general sense the degree of dependence is in large part what one is seeking to identify if employees are integrated into the business, workers may be described as semi detached and those conducting a business undertaking as detached but that must be assessed by a careful analysis of the contract itself. The fact that the individual may be in a subordinate position, both economically and substantively, is of itself of little assistance in defining the relevant boundary because a small business operation may be as economically dependent on the other contracting party, as is the self employed worker, particularly if it is a key or the only customer. 36. After looking at how the distinction had been introduced into the sex discrimination legislation, which contained a similarly wide definition of worker but without the reference to clients and customers, by reference to a dominant purpose test in Mirror Group Newspapers Ltd v Gunning [1986] ICR 145, he concluded, at para 59: . the dominant purpose test is really an attempt to identify the essential nature of the contract. Is it in essence to be located in the field of dependent work relationships, or is it in essence a contract between two independent business undertakings? . Its purpose is to distinguish between the concept of worker and the independent contractor who is on business in his own account, even if only in a small way. 37. The issue came before the Court of Appeal in Hospital Medical Group Ltd v Westwood [2012] EWCA Civ 1005, [2013] ICR 415, a case which was understandably not referred to in the Court of Appeal in this case; it was argued shortly before the hearing in this case, but judgment was delivered a few days afterwards. The Hospital Medical Group argued that Dr Westwood was in business on his own account as a doctor, in which he had three customers, the NHS for his services as a general practitioner, the Albany Clinic for whom he did transgender work, and the Hospital Medical Group for whom he performed hair restoration surgery. The Court of Appeal considered that these were three separate businesses, quite unrelated to one another, and that he was a class (b) worker in relation to the Hospital Medical Group. 38. Maurice Kay LJ pointed out (at para 18) that neither the Cotswold integration test nor the Redcats dominant purpose test purported to lay down a test of general application. In his view they were wise not to lay down a more prescriptive approach which would gloss the words of the statute. Judge Peter Clark in the EAT had taken the view that Dr Westwood was a limb (b) worker because he had agreed to provide his services as a hair restoration surgeon exclusively to HMG, he did not offer that service to the world in general, and he was recruited by HMG to work as an integral part of its operations. That was the right approach. The fact that Dr Westwood was in business on his own account was not conclusive because the definition also required that the other party to the contract was not his client or customer and HMG was neither. Maurice Kay LJ concluded, at para 19, by declining the suggestion that the Court might give some guidance as to a more uniform approach: I do not consider that there is a single key with which to unlock the words of the statute in every case. On the other hand, I agree with Langstaff J that his integration test will often be appropriate as it is here. For what it is worth, the Supreme Court refused permission to appeal in that case. 47. The issues in this appeal depend essentially upon the true construction of section 230(3)(b) of the Employment Rights Act 1996 (the ERA) and section 4(4) of the Limited Liability Partnerships Act 2000 (the LLPA). I agree with Lady Hale that, on the true construction of section 230(3)(b) of the ERA, construed without reference to the LLPA (if that were possible), the appellant could properly be described as a limb (b) worker because she would satisfy the terms of the sub section. In short, for the reasons given by Lady Hale, by the terms of the appellants contract with the respondent LLP (Clyde & Co), she undertook to perform personally certain work or services for it and its status was not by virtue of the contract that of a client or customer. 48. That question could not however have fallen for consideration before the LLPA came into effect because until then there was no such entity as an LLP. The status of a person working for an LLP must now be determined by reference both to the ERA and to the LLPA. As Lady Hale observes at para 10, the Court of Appeal held that the appellant could not be a worker for the purposes of section 230(3) of the ERA because of section 4(4) of the LLPA, which provides: A member of a limited liability partnership shall not be regarded for any purpose as employed by the limited liability partnership unless, if he and other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership. 49. I appreciate that this is a minority view in this Court but it seems to me, as it has seemed to me throughout, that the effect of section 230(3) and (5) of the ERA and section 4(4) of the LLPA, read together, is that a person who is a limb (b) worker within section 230(3) is a person regarded for any purpose as employed by the LLP within section 4(4) of the LLPA. This is in part because of section 230(5) of the ERA, which provides: In this Act, employment (b) in relation to a worker, means employment under his contract; and employed shall be construed accordingly. 50. I entirely understand that at common law employment has traditionally had a narrow meaning and means, in effect employment under a contract of employment. However, under the ERA it has been given a wider meaning and extends to a limb (b) worker, who is by definition working under any other contract, that is any contract other than a contract of employment. There cannot I think be any doubt that the appellant was a member of an LLP. Moreover, for the reasons given by Lady Hale she was a worker within section 230(3)(b). 51. As I see it, the question is whether, on these facts, the appellant is being regarded for any purpose as employed by the limited liability partnership. I would answer that question in the affirmative because she is being so regarded by the express terms of section 230(5) of the ERA. I appreciate that section 230(5) defines the meaning of employment in this Act, that is the ERA but this to my mind a purpose which falls within the expression for any purpose in section 4(4). 52. If that were correct it would follow that, whether the appellant was employed as a worker by the LLP for the purposes of the ERA would depend upon whether if [she] and the other members were partners in a partnership [ie an 1890 Act partnership] [she] would be regarded for that purpose as employed by the partnership. This raises the question which Lady Hale describes at para 29 as of some complexity and difficulty. There is to my mind much to be said for the view that, if the appellant had been a partner in an 1890 Act partnership, she would now be treated as employed by the partnership, especially in the light of section 82 of the Law of Property Act 1925. As Lady Hale asks rhetorically, why should it be legally impossible to be employed, under either type of contract, by the partnership? If the answer to that question is that there is no good reason why the appellant 53. would not be regarded as employed by the partnership within the meaning of the last part of section 4(4) of the LLPA, so that section 4(4) does not prevent the appellant from being regarded for the purpose of the ERA as employed as a worker, the whole provision (as I see it) makes sense because its underlying purpose is, at any rate in this respect, to treat partners in both types of partnership in the same way. 54. Notwithstanding those points, the question remains, as Lady Hale says, of some complexity and difficulty. In these circumstances, it is desirable that it should be determined in a case in which it is necessary for it to be decided. That being the position, at any rate so long as I remain in the minority on the first point, it would be better for me to refrain from expressing an opinion on the second point. LORD CARNWATH 55. I agree that the appeal should be allowed for the reasons given by Lady Hale. I would emphasise that this conclusion turns on the special characteristics of a limited liability partnership, which is something of a hybrid as between a conventional 1890 Act partnership and a limited company. It does not necessarily have any direct relevance to the resolution of equivalent issues in relation to other forms of partnership, under English or Scottish law. 56. I would only add a short comment in relation to the alternative argument of Mr Machell QC, which Lady Hale found it unnecessary to address (para 29). This challenged the traditional view that a partner cannot be an employee of his own firm. That view is put in strong terms in the current (19th) edition of Lindley & Banks on Partnerships (2010). Commenting critically on the second part of section 4(4) of the Limited Liability Partnerships Act 2000, the editors say: Note that the drafting of this sub section is wholly defective Partnership and employment are, of course, mutually exclusive concepts and there are no circumstances under English law where a partner could be regarded as employed by his own firm. (para 2 40 n 145, their emphasis) That comment is cross referenced to a later paragraph headed Partner or Employee? (para 5.55) which discusses the criteria for deciding whether a salaried partner is to be regarded as a partner or an employee, and adds: What is certain is that if the salaried partner is held to be and treated as a partner in law, he cannot also be an employee in the firm. Cases referred to include Ellis v Joseph Ellis & Co [1905] 1 KB 324 and Cowell v Quilter Goodison Co Ltd [1989] IRLR 392, cited by Lady Hale (para 12). 57. As far as concerned English law, that was also the basis on which the Law Commissions proceeded in their recent review of Partnership Law, mentioned by Lady Hale. It does not appear to have been questioned by anyone during the consultation. As she notes (para 18 19), the Commissions recognised possible doubts as to whether that was also the position under Scots law. But they resolved them by recommending that, in both jurisdictions, a partnership should not be capable of engaging a partner as an employee (para 13.43; draft bill cl 7(4)). 58. Mr Machell relies in particular on section 82(1) of the Law of Property Act 1925 which provided: Any covenant, whether express or implied, or agreement entered into by a person with himself and one or more other persons shall be construed and be capable of being enforced in like manner as if the covenant or agreement had been entered into with the other person or persons alone. Of the cases cited by Lindley, he observes that Ellis was decided before the enactment of section 82(1), which as he puts it, abolished the two party rule; Cowell was a decision on its own facts. He offers no academic support for this submission. Nor does he explain how the point has apparently been overlooked for so long by practitioners and academics. By way of analogy, he asserts that a partnership can take a lease of premises owned by one or more of the partners, for which proposition he cites inter alia Rye v Rye [1962] AC 496 and, Lindley & Banks para 10.45. 59. Although I agree with Lady Hale that it is unnecessary for us to decide this issue, for my part I am currently unpersuaded by Mr Machells submissions. Whatever may be the position or legal analysis in respect of leases (on which the authorities to which he refers are not conclusive), section 82 does not assist him in the present context in my view. A contract treated as being between a particular partner and the other members of his firm may be effective in law for many practical purposes. But it cannot be equated with a contract between the partner and the firm as such, since each partner is an essential part of the firm. Furthermore, the reasoning of the Court of Appeal in Ellis v Joseph Ellis does not turn simply on the lack of capacity to contract. As Lord Collins MR said, the particular arrangements made in that case in relation to payment for work did not affect the workers relation to the other partners, which was that of co adventurers and not employees. In my view this was a statement of principle about the fundamental difference between the relationship of partners and that of employer and employee, a difference which is not bridged by section 82. 39. I agree with Maurice Kay LJ that there is not a single key to unlock the words of the statute in every case. There can be no substitute for applying the words of the statute to the facts of the individual case. There will be cases where that is not easy to do. But in my view they are not solved by adding some mystery ingredient of subordination to the concept of employee and worker. The experienced employment judges who have considered this problem have all recognised that there is no magic test other than the words of the statute themselves. As Elias J recognised in Redcats, a small business may be genuinely an independent business but be completely dependent upon and subordinate to the demands of a key customer (the position of those small factories making goods exclusively for the St Michael brand in the past comes to mind). Equally, as Maurice Kay LJ recognised in Westwood, one may be a professional person with a high degree of autonomy as to how the work is performed and more than one string to ones bow, and still be so closely integrated into the other partys operation as to fall within the definition. As the case of the controlling shareholder in a company who is also employed as chief executive shows, one can effectively be ones own boss and still be a worker. While subordination may sometimes be an aid to distinguishing workers from other self employed people, it is not a freestanding and universal characteristic of being a worker. 40. It is accepted that the appellant falls within the express words of section 230(3)(b). Judge Peter Clark held that she was a worker for essentially the same reasons that he held Dr Westwood to be a worker, that she could not market her services as a solicitor to anyone other than the LLP and was an integral part of their business. They were in no sense her client or customer. I agree. Human Rights 41. I have reached that conclusion without the help of the European Convention on Human Rights. But it may be worth noting that that conclusion is entirely consistent with the appellants rights under article 10, whereas a different conclusion would pose more problems. Article 10 provides for a qualified right to freedom of expression. In Heinisch v Germany [2011] IRLR 922, that right was held to extend to a geriatric nurse in a nursing home who reported her employers to the prosecuting authorities because of the understaffing. The European Court of Human Rights held that her dismissal without notice on the ground that she had lodged a whistleblowing complaint against her employer and the failure of the domestic courts to order her reinstatement had violated her rights under article 10. Her right to impart information could be restricted if this was in accordance with the law, pursued a legitimate aim (in this case to protect the rights and reputation of the employer), and was proportionate to that aim. The court considered a number of factors relevant to the proportionality calculation, bearing in mind the duty of loyalty owed by an employee to her employer. It was important to establish whether the employee was acting in good faith and had reasonable grounds for the complaint, whether the information disclosed was in the public interest, and whether there was any more discreet means of remedying the wrongdoing; proportionality also required a careful analysis of the severity of the penalty imposed upon the whistle blower and its consequences (see paras 62 to 70). Hence article 10 operates as a protection for whistle blowers who act responsibly. 42. In Heinisch, the court also recalled, at para 44, that article 10 applies to the workplace in general: Kudeshkina v Russia, Application no 29492/05, judgment of 26 February 2009 shows that a professional person such as a judge is entitled to the freedom to criticise the judicial system. It also applies when relations between employer and employee are governed by private law: the state has a positive obligation to protect it even in the sphere of relationships between private persons: see Fuentes Bobo v Spain (2000) 31 EHRR 1115. 43. Hence it is argued that, if the appellants claims as to the reasons for her dismissal are made good, it would be incompatible with her convention rights for the law to deny her a remedy. If the whistle blowing provisions of the 1996 Act apply to her, she would have such a remedy. Those provisions are consistent with the proportionality calculation carried out in Heinisch. The expectation is that disclosure will first be made to the employer or the person responsible for the wrong doing or to a prescribed regulator (see sections 43C, 43E, 43F). Disclosure may only be made to other persons in more limited circumstances (see sections 43G, 43H), for example where the worker reasonably believes that she will be subject to a detriment if she discloses to her employer, and it must be reasonable in all the circumstances of the case. If those provisions do not apply to the appellant, then it is difficult to see what other protection she would have, given that she is not entitled to protection from unfair dismissal. Hence it is our duty under section 3 of the Human Rights Act 1998 to interpret the 1996 Act so as to give her that protection. 44. This argument raises what might be a difficult question. Under section 3(1) of the Human Rights Act 1998, we have a duty to read and give effect to legislation in a way which is compatible with the convention rights (and this means that it may have a different meaning in this context from the meaning it has in others). While it is comparatively easy to see how this may be done in order to prevent the state from acting incompatibly with a persons convention rights, in other words, to respect the negative obligations of the state, it is a little more difficult to assess whether and when this is necessary in order to give effect to the positive obligations of the state and thus to afford one person a remedy against another person which she would not otherwise have had. It is at this point that the respondents argument that the 1996 Act gives better protection than is required under the Convention might be relevant. 45. Fortunately, however, as the appellant already has that protection under the 1996 Act as interpreted in a completely conventional way, it is not necessary for us to decide whether her convention rights would require and permit us to interpret it compatibly. Conclusion 46. In my view, the appellant clearly is a worker within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and entitled to claim the protection of its whistle blowing provisions. That conclusion is to my mind entirely consistent with the underlying policy of those provisions, which some might think is particularly applicable to businesses and professions operating within the tightly regulated fields of financial and legal services. The appeal must be allowed and the case remitted to the employment tribunal to determine her claim under those provisions along with her sex discrimination claim. LORD CLARKE

The appellant is an English qualified solicitor. In February 2010, she became a member of Clyde & Co Limited Liability Partnership (LLP). She signed a Deed of Adherence to the LLPs Members Agreement. The other parties to the Deed were the LLP and each of the Members individually. In November 2010, the appellant reported to the LLPs money laundering reporting officers that the managing partner of the Tanzanian law firm, with whom the LLP were doing business, had admitted paying bribes to secure work and to secure the outcome of cases. She claims that these were protected disclosures within the meaning of section 43A of the 1996 Employment Rights Act (the 1996 Act). She also claims that she was subject to a number of detriments as a result, including suspending her and ultimately expelling her from the LLP in January 2011. These claims are denied by the LLP and have not yet been tried. In February 2011, the appellant brought claims in the Employment Tribunal against the LLP and one of its Senior Equity Members under the whistle blowing provisions of the 1996 Act. The respondents objected to her whistle blowing claim on the ground that she was not a worker within the meaning of section 230(3) of the 1996 Act and, as such, does not benefit from the protection given to whistle blowers. There are two definitions of worker for the purpose of that Act. Limb (a), not relevant to this case, covers an individual who has entered into, works under, or has worked under a contract of employment and Limb (b) of section 230(3) covers an individual who has entered into or works under or worked under any other contractwhereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer. The main question in this appeal is whether a member of a LLP can be a worker within the meaning of section 230(3)(b) of the Employment Rights Act 1996? The Employment Tribunal found that she was not a worker. The Employment Appeal Tribunal held that she was a worker. The LLPs appeal to the Court of Appeal was successful, but on a completely different ground from those argued in the Tribunals. The Court of Appeal, cited section 4(4) of the Limited Liability Partnership Act 2000 (the 2000 Act), which states that a member of a limited liability partnership shall not be regardedas employed by the [LLP] unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership. The Court of Appeal held that the phrase employed by included limb (b) contracts and, thus, the appellant was not a worker. The Supreme Court unanimously allows the appeal and holds that the appellant is a worker within the meaning of the 1996 Act. As such, she is entitled to claim the protection of its whistle blowing provisions. Lady Hale gives the lead judgment. The Court finds that there is no need to give such a strained construction to section 4(4). It is saying that, whatever the position would be if the LLP members were partners in a traditional partnership, then that position is the same in an LLP. The Court holds that that is how section 4(4) is to be construed [21]. The phrase employed by in section 4(4) covers a person employed under a contract of service [22]. The Court holds, however, that it does not also cover those who undertake to do or perform personally any work or services for another party to the contract. Section 4(4) of the 2000 Act does not mean that members of an LLP can only be workers within the meaning of section 230(3) of the 1996 Act if they would also have been workers had the members of the LLP been partners in a traditional partnership [23 28]. Next the Court considers the analysis of the Court of Appeal that underlying the statutory definition of worker is the notion that one party has to be in a subordinate relationship to the other. The Court of Appeal suggested that a member of a LLP would not by virtue of that status alone constitute either an employee or a worker. If by this, the Court of Appeal meant that those members who undertake personally to work for the LLP cannot be workers, then this Court does not agree. While subordination may sometimes be an aid to distinguishing workers from other self employed people, it is not a freestanding and universal characteristic of being a worker [30 40]. As the appellant has protection under the 1996 Act as interpreted in a conventional way, the Court does not find it necessary to decide whether her convention rights would require and permit it to interpret the Act compatibly [41 45]. In a concurring judgment, Lord Clarke agrees with Lady Hale that by the terms of the appellants contract with the respondent LLP, she undertook to perform personally certain work or services for it and her status was not by virtue of the contract that of a client or customer [47]. Lord Clarke adds that, in his opinion, the effect of the relevant provisions of the 1996 Act and the 2000 Act, read together, is that a person who is a limb (b) worker within section 230(3) is a person regarded for any purpose as employed by the LLP within the 2000 Act [49 54]. In a concurring judgment, Lord Carnwath emphasises that, in his view, the conclusion in this case turns on the special characteristics of a LLP, which is something of a hybrid as between a conventional 1890 Act partnership and a limited company. It does not necessarily have any direct relevance to the resolution of equivalent issues in relation to other forms of partnership, under English or Scottish law [55 59]. The main judgment leaves open the question of what the position would be in a traditional partnership.

Was it unlawful for the Secretary of State for Health, the respondent, who had power to make provisions for the functioning of the National Health Service (the NHS) in England, to have failed to make a provision which would have enabled women who were citizens of the UK, but who were usually resident in Northern Ireland, to undergo a termination of pregnancy under the NHS in England free of charge? No, said the Court of Appeal (Moore Bick LJ, Elias LJ, who gave the substantive judgment, and McCombe LJ) on 22 July 2015, [2015] EWCA Civ 771, [2016] 1 WLR 331, when dismissing an appeal against an order to like effect made by King J on 8 May 2014, [2014] EWHC 1364 (Admin). Under section 1 of the Abortion Act 1967 (the 1967 Act) a medical termination of pregnancy is lawful in four specified circumstances, of which the first is, in essence, that the pregnancy has not exceeded 24 weeks and that its continuation would involve risk, greater than if the pregnancy were terminated, of injury to the physical or mental health of the woman. By section 7(3), the 1967 Act extends to England, Wales and Scotland but not to Northern Ireland. In Northern Ireland a termination of pregnancy is lawful when its continuation would threaten the womans life or when it would probably affect her physical or mental health but only if the effect would be serious and, in particular, permanent or long term: Family Planning Association of Northern Ireland v Minister for Health and Social Services and Public Safety [2004] NICA 37, para 12, Sheil LJ. The consequence of the requirement that the probable adverse effect should at least be long term is that abortion in Northern Ireland is lawful only in far narrower circumstances than in the rest of the UK. A challenge to the failure of the law in Northern Ireland to make abortion lawful even in cases of fatal foetal abnormality and of pregnancies caused by sexual crime has been upheld in the High Court of Northern Ireland and is subject to appeal: In re Northern Ireland Human Rights Commissions Application for Judicial Review [2015] NIQB 96, [2016] 2 FCR 418. But, irrespective of the ultimate outcome of those proceedings, the far narrower availability of lawful abortion in Northern Ireland than elsewhere in the UK seems likely to continue. The criminal law relating to abortion in Northern Ireland is a transferred matter within the meaning of section 4(1) of the Northern Ireland Act 1998 and so, subject to section 6, its amendment or otherwise falls within the legislative competence of the Northern Ireland Assembly rather than of Parliament in Westminster. The result of the narrower availability of abortion in Northern Ireland is a steady stream of women usually resident there who come to England in order to secure an abortion here. The evidence in these proceedings is to the following effect: (a) Unable (unless in an emergency) to obtain an abortion free of charge under the English NHS, these women attend private, fee paying clinics in England approved by the respondent under the 1967 Act. (b) Official statistics, based on records kept by the clinics, suggest that about 1,000 of them secure abortions in England each year. (c) But the statistics are likely to understate their number because some of the women are believed to hide the fact that they are usually resident in Northern Ireland. (d) The clinics charge about 600 for terminating a pregnancy of less than 14 weeks and up to 2,000 in the event that it is further advanced. (e) Additionally the women need to pay for their travel to and from England and, usually, an overnight stay. (f) Vulnerable and frightened, they often ask a friend or family member to accompany them, albeit, of course, at yet further cost. (g) For most of the women, the total cost represents a vast sum of money which they do not have. (h) The charity known as Abortion Support Network, being the fifth intervener in these proceedings, sometimes makes a contribution towards the womens costs. (i) Even if so, the women usually need to borrow the balance. (j) The stigma which in Northern Ireland surrounds unwanted pregnancy and its termination can inhibit the women from explaining the reason for their need to borrow. (k) The effect of any delay in raising the funds is that the pregnancy continues, that its termination usually becomes more complex as well as more costly and that its psychological consequences usually become more profound. (l) If, within the time frame set by the 1967 Act, they cannot raise the funds to secure a lawful abortion in England, the women have to choose either to undergo a self administered or back street abortion in Northern Ireland, by which they endanger their health and expose themselves to criminal prosecution and a likely sentence of imprisonment, or to proceed to give birth to a child for whom they may be ill equipped to care. Although this court must acknowledge respect for the ethical pro life convictions which inform the law in relation to abortions in Northern Ireland (together, of course, with equal respect for the contrary pro choice convictions), it remains easy to understand why the plight of women who find themselves in unwanted pregnancy there is deeply unenviable. The two appellants, A and B, are cases in point. In 2012 A, then aged 15, became pregnant. B is her mother. At all material times they have resided in Northern Ireland. With Bs support A decided to seek the termination of her pregnancy. It was conducted in October 2012 at the Marie Stopes International Clinic in Manchester. B had accompanied A there. The total cost was about 900, of which 400 was contributed by Abortion Support Network and 500 was borrowed from friends. Adding significantly to the emotional strain on both A and B of discovering As pregnancy and of enabling her to decide whether to secure its termination in England were the embarrassment, difficulty and uncertainty attendant on the urgent need to raise the necessary funds. C: LEGISLATIVE STRUCTURE OF THE NHS IN ENGLAND On 1 April 2013 there was a change in the legislative structure of the NHS in England. The present appeal, in which the claim is of a breach in 2012 of a duty owed to the appellants, therefore relates to the previous structure. The respondent makes a helpful concession: it is, as I will explain in para 13, that in 2012 he had a power which, if exercised, would (so the court may assume) have enabled UK citizens usually resident in Northern Ireland to undergo abortions under the NHS in England free of charge. But it is a power which he did not exercise; so the question is whether his failure to do so was unlawful. Section 1(1) of the National Health Service Act 2006 (the 2006 Act) was not materially affected by the change in 2013. In its current version it provides that the respondent must continue to promote in England a comprehensive health service designed to secure improvement (a) in the physical and mental health of the people of England, and (b) in the prevention, diagnosis and treatment of physical and mental illness. In my view correctly, King J described the provision as creating a target duty: the express focus of both parts of it is improvement. It identifies the general objectives by reference to which the respondent must exercise his functions under the Act. Such is made clear in subsection (2) of the same section, when, referring back to subsection (1), it provides that for that purpose he must (in the previous version of subsection (2)) provide services in accordance with the Act and (in the current version of it) exercise his functions so as to secure that they are so provided. Section 1(1) of the 2006 Act refers not to the people in England but to the people of England. In R (A) v Secretary of State for Health [2009] EWCA Civ 225, [2010] 1 WLR 279, Ward LJ suggested at para 55 that the reference is therefore to people who are part and parcel of the fabric of the place. I agree and suggest, more simply, that it is to the people who live in England. Other legislation imposes an analogous target duty on the health authorities in Wales, Scotland and Northern Ireland. Thus section 2(1)(a) of the Health and Social Care (Reform) Act (Northern Ireland) 2009 requires the Department of Health, Social Services and Public Safety in Northern Ireland to promote a system of health care designed to secure improvement in the physical and mental health of people in Northern Ireland. The general scheme is therefore that the health service for the people who live in Northern Ireland is to be provided for them there by the Northern Irish authority. The original version of section 3(1) of the 2006 Act provided: The Secretary of State must provide throughout England, to such extent as he considers necessary to meet all reasonable requirements (c) medical services, (d) such other services for the care of pregnant women as he considers are appropriate as part of the health service The provision of abortion services fell within either (c) or (d), indeed probably within (c). But the respondents duty was to provide them to such extent as he considers necessary to meet all reasonable requirements. When addressing the same words in the predecessor to section 3(1), the Court of Appeal, in R v North and East Devon Health Authority, Ex p Coughlan [2001] QB 213, observed at para 24 that the respondent therefore had no duty to provide services if he does not consider they are reasonably required or necessary to meet a reasonable requirement. Although in my view the appellants are right to question whether the existence of a reasonable requirement was left to the determination of the respondent, his evaluation undoubtedly governed the extent to which it was necessary to meet it; so a broad area of the duty cast upon him by section 3(1) was left to be marked out by the exercise of his own judgement. In 2002, however, the respondents functions under what became section 3(1) of the 2006 Act were made exercisable on his behalf by primary care trusts (the trusts): see regulation 3(2) of the National Health Service (Functions of Strategic Health Authorities and Primary Care Trusts and Administration Arrangements) (England) Regulations (SI 2002/2375), (the Functions Regulations). Regulation 3(7) was important because it defined the categories of persons for whose benefit a trust should exercise the functions. In summary the categories were as follows: (a) persons registered, other than temporarily, with a GP in the area of the trust; (b) persons usually resident in its area; (c) persons resident outside the UK who were present in its area (albeit that other regulations required a trust to charge such persons for services); (d) persons suffering serious mental illness who were resident in other parts of the UK and who were present in its area; and (e) all persons present in its area but only for the provision to them of emergency and analogous services, treatment for certain infectious diseases and any other services which the [respondent] may direct. Although, therefore, a woman present in England but usually resident in Northern Ireland did not, save in the case of an emergency or if suffering serious mental illness, qualify for the provision by the trusts of abortion services in England, it was open to the respondent to make a direction under regulation 3(7) and section 7(1) of the 2006 Act that the function under section 3(1) of providing abortion services should be exercised by the trusts for the benefit of all persons present in their area who were citizens and residents of the UK. As I have already indicated, the case proceeds on the convenient if questionable assumption that, had the respondent done so, then, notwithstanding the broad area of judgement then exercisable by the trusts under section 3(1) and notwithstanding the target set under section 1(1) to secure improvement in the health of the people of England, they would have resolved to provide such services to UK citizens usually resident in Northern Ireland including, therefore, to A. The change on 1 April 2013 in the legislative structure of the NHS in England was wrought by the Health and Social Care Act 2012 (the 2012 Act). One of its purposes was to reduce the respondents role, even when only nominal, in the front line provision of services. It abolished the trusts. It revoked the Functions Regulations. It provided for the establishment of clinical commissioning groups (the groups). And it amended section 3(1) of the 2006 Act so that the provision of the services there identified, including, as before, medical services and services for the care of pregnant women, is now required to be arranged by a group. But the duty, which is qualified in terms much as before, is to make such arrangements only to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility. For whom, then, does a group have responsibility for this purpose? The answer lies in a new subsection, numbered (1A), introduced into section 3 by the 2012 Act: in principle (and apart from provision in emergencies, etc) it has responsibility for persons provided with primary medical services by a member of the group (ie persons registered, whether temporarily or otherwise, with a GP in the group) and for persons usually resident in the groups area if not registered with a GP in another group. At first sight, therefore, the perceived solution for the pregnant woman usually resident in Northern Ireland might be to come to England and to cause herself to be registered temporarily with a GP here. As it happens, that particular solution is precluded by regulation 2(2) of the National Health Service (Clinical Commissioning Groups Disapplication of Responsibility) Regulations 2013 (SI 2013/350), which excludes persons usually resident in Northern Ireland (and in Scotland and Wales) from those to whom a group owes duties under section 3(1) and (1A). In addition to its duties, however, a group also has a power in relation to those for whom, under section 3(1A), it has responsibility. The power is conferred by a new section, numbered 3A, introduced into the 2006 Act by the 2012 Act: it is to arrange for the provision to them of such services as it considers appropriate for securing improvement in their physical and mental health. So the woman usually resident in Northern Ireland but temporarily registered with a GP in England would qualify for any such services; and there is no such exclusion of her from qualification for the exercise of the groups power as precludes her qualification for the discharge of the groups duties. Just as in 2012, in relation to the case before the court, the respondent had power to make a direction which (so we are to assume) would have enabled UK citizens usually resident in Northern Ireland to undergo abortions in England free of charge under the NHS, so today the groups therefore appear also to have power to enable them to do so. Were it to have been unlawful for the respondent in that respect to have failed to exercise the power which he had prior to 1 April 2013, it would seem hard to understand why it has been otherwise than unlawful for the groups in that respect to have failed to exercise the power which they have had since that date. D: TWO GROUNDS OF CHALLENGE The appellants argue that the respondents failure to provide for A, as a UK citizen usually resident in Northern Ireland, to be entitled to undergo an abortion free of charge under the NHS in England was unlawful both in public law and because it was in breach of their human rights. E: PUBLIC LAW It is already apparent that, strictly speaking, the challenge is to a failure on the part of the respondent to have exercised a power, namely the power to make the direction identified in para 13 above. The appellants contend that, when he decided not to exercise the power, he took an irrelevant consideration into account and he accepts that, if he did so, his decision was unlawful. They also argue that his decision was more broadly irrational. But they go further. They submit that, in the light of its context, the respondents power to make the direction became a duty to do so. For, so their argument runs, the context was section 3(1) of the 2006 Act, which imposed on the respondent the duty identified in para 11 above. The respondent does not argue that, just because by 2012 the exercise of his functions under section 3(1) had been delegated to the trusts, the subsection had become irrelevant to the exercise of his power to make the direction. But, in my view correctly, he points to two features which significantly diminish the ability of the appellants to rely on the duty in the subsection: (a) A broad area of the duty was left to be marked out by the exercise of his own judgement: see para 11; and (b) the people who lived in England: see para 10. in discharging the duty, his target had to be to improve the health of The appellants submit that: (a) A was usually resident in part of the UK and thus, in principle, she was a UK tax payer and a contributor to the funding of the UK wide NHS; (b) she was also a UK citizen; (c) all UK citizens usually resident there should, at any rate in this context, be treated alike irrespective of the area within the UK of their usual residence; (d) the respondent chose to provide abortion services in England free of charge under the NHS for women usually resident in England on the basis (which was correct) that they had a reasonable requirement for it; (e) but women usually resident in Northern Ireland were, as he knew, generally unable to access such services there; (f) services for them in England. and so the only decision rationally open to him was to provide such Like the judges in the courts below, I would reject the appellants submissions set out above. Parliaments scheme is that separate authorities in each of the four countries united within the kingdom should provide free health services to those usually resident there. The respondent was entitled to make a decision in line with this scheme for local decision making and in accordance with the target reflective of it which was imposed on him by statute. But the respondent has taken his argument a stage further. In response to the letter before action sent on behalf of the appellants, he stated that it was the policy of the Government that, in general, the NHS should not fund services for residents of Northern Ireland which the Northern Ireland Assembly has deliberately decided not to legislate to provide, and which would be unlawful if provided in Northern Ireland. This is the consideration which the appellants submit to have been irrelevant. It was, so they argue, the assemblys decision which created the need and it could hardly also represent a reason for refusing to meet it. I disagree. The respondent was entitled to afford respect to the democratic decision of the people of Northern Ireland; was entitled to have in mind the undeniable ability of Northern Irish women lawfully to travel to England and to purchase private abortion services there; and was entitled to decide not further to alter the consequences of the democratic decision by making such services available to them free of charge under the public scheme in England for which he was responsible. F: HUMAN RIGHTS The appellants argue that the respondents decision not to exercise the power to make the direction identified in para 13 above was unlawful because it violated article 14 of the European Convention on Human Rights (the Convention) taken in conjunction with article 8 of it. Paragraph 1 of article 8 provides for a right, qualified in para 2, to respect for private and family life. Article 14 provides that the right shall be secured without discrimination on any ground such as national origin or other status. The appellants assert that enjoyment of their right to respect for their private and family life (more particularly perhaps for private life in the case of A and for family life in the case of B) was not secured without discrimination on the ground of status. But Bs asserted right is parasitic on that of A so, in what follows, it will be convenient to refer only to the latter. (i) Scope The respondent now accepts that a decision whether to provide abortion services to a group of women free of charge falls within the scope of their rights under article 8 to respect for their private life. It is indeed a decision which may profoundly erode their autonomy in relation to about the most intimate area of their private life. In A, B and C v Ireland (2011) 53 EHRR 13 the three applicants were residents and citizens of Ireland. The Grand Chamber of the European Court of Human Rights (the ECtHR) rejected the complaints of A and B that the Irish prohibition against their undergoing abortions there, even when in the interests of their health, had infringed their rights under article 8; but it upheld the complaint of C that Ireland had infringed her right under the article by having failed to enable her to ascertain whether, in her particular medical circumstances, she had a right to undergo an abortion there. At an early stage of its judgment, the Grand Chamber had said: 214. While article 8 cannot be interpreted as conferring a right to abortion, the court finds that the prohibition in Ireland of abortion where sought for reasons of health and/or well being about which the first and second applicants complained, and the third applicants alleged inability to establish her qualification for a lawful abortion in Ireland, come within the scope of their right to respect for their private lives and accordingly article 8. (ii) Other Status It is no criticism of the appellants to record that the ground of the alleged discrimination has been formulated in different ways. For the relevant concepts are difficult. It is clear that, at the centre of their argument, is a complaint based on usual residence. As I will try to explain, the complaint is that, by his decision, the respondent has treated women usually resident in Northern Ireland either differently from women usually resident in England or similarly to women usually resident outside the UK; and the context which makes such treatment significant and which allegedly creates indirect discrimination is that women usually resident in Northern Ireland have no general entitlement to undergo abortions there. A persons place of residence is, curiously, not one of the grounds of discrimination specified in article 14. But does it fall within the portmanteau of other status? In Carson v United Kingdom (2010) 51 EHRR 13 the applicants, who were entitled to the UK state retirement pension but resident outside the UK, complained about a rule which precluded index linking of the pension when paid to overseas residents. They claimed that it violated article 14 taken in conjunction with article 1 of Protocol 1 to the Convention. The Grand Chamber concluded at para 71 that place of residence constitutes an aspect of personal status for the purposes of article 14 but, in the event, it proceeded to reject the applications. How, then, can the respondent argue that usual residence in Northern Ireland does not constitute a status which can ground a complaint of discrimination in breach of article 14? He relies on the earlier decision of the ECtHR in Magee v UK (2000) 31 EHRR 35. The applicant, who had been arrested in Northern Ireland and denied access to a solicitor for over 48 hours, complained of a violation by the UK of article 14 taken in conjunction with article 6. He alleged that, had he been arrested in England and Wales, he would have been granted access to a solicitor at once. The court rejected the complaint; it held at para 50 that the basis for the alleged difference of treatment was that, at the time of his arrest, the applicant had been present in Northern Ireland rather than in England and Wales and that, in that such a basis was not related to any personal characteristic, it was not a ground falling within article 14. In the Carson case, at para 70, the court distinguished the Magee case in that same way. The respondent presents the complaint of the appellants as relating to a difference of treatment of women resident in Northern Ireland but only when present in England. But the respondents presentation itself reveals the personal characteristic at the heart of the complaint namely residence in Northern Ireland. The complaint of the appellants is indeed therefore of a difference of treatment on a ground of status within article 14. But, in my view wisely, they now seek to attach a qualification to the status of usual residence in Northern Ireland. Were the complaint to remain broadly that the respondent visited a significant difference of treatment upon women resident not in England but in Northern Ireland in which they have no general entitlement to undergo an abortion, it would logically extend to women resident not in Northern Ireland but in other countries, in particular Ireland, in which they too have no general entitlement to undergo an abortion. Thus, no doubt in order that their claim should not be unnecessarily ambitious, the appellants now seek to qualify the status of those alleged to have been unlawfully disadvantaged by a difference of treatment. The suggested status is therefore defined as women who are UK citizens, present in England and usually resident in Northern Ireland. The above qualification presents no problem for the appellants. Usual residence is recognised as falling within other status for the purpose of article 14. National origin is there specified as also a status for that purpose. A status for the purpose of article 14 can have more than one component; see, for example, the decision of the ECtHR in 2012 in BS v Spain (Application No 47159/08), in which (a) a woman who was (b) black and (c) a prostitute established a ground of discrimination contrary to article 14 by reference to the interaction of all three factors: see paras 52 and 62 of the judgment. What, then, is the group with which the appellants seek to compare the allegedly disadvantaged group as now defined? They give alternative answers. And they give them by reference to alternative presentations of the nature of the respondents decision. The obvious presentation of the nature of the respondents decision is that (save exceptionally) abortion services were to be made available free of charge under the NHS in England only to those usually resident in England. On this basis the comparator group suggested by the appellants is women present in England and usually resident in England. Here the claim is that the allegedly disadvantaged group should have been treated in the same way. The Convention does not require a state to make abortion services generally available, still less to make them free of charge, but, once it decides to make them available, whether free of charge or otherwise, the state must devise a framework for access to them which accords with Convention obligations: RR v Poland (2011) 53 EHRR 31, para 187. But, in the alternative, the appellants turn the nature of the respondents decision inside out. The alternative presentation of it is that (save exceptionally) abortion services were not to be made available under the NHS in England to those not usually resident in England. On this basis the comparator group suggested by the appellants is all other women present in England but not usually resident in England. Here the claim is that the allegedly disadvantaged group should have been treated in a different way from that in which the comparator group was treated. For, so the argument proceeds, the situation of women who are UK citizens, present in England and usually resident in Northern Ireland is significantly different from that of all other women present in England but not usually resident in England, even if the latter are usually resident in countries where abortion services are not generally available. The appellants contend that the legitimacy of this alternative answer is established by the decision of the Grand Chamber in Thlimmenos v Greece (2000) 31 EHRR 15. There the applicant, a Jehovahs Witness, had refused to enlist in the army for religious reasons and had therefore been convicted of a felony. The effect of a Greek decree was that a person convicted of a felony could not be admitted as a chartered accountant. The Grand Chamber upheld his complaint that, in failing to differentiate between felonies committed for religious reasons and felonies committed for other reasons, Greece had violated article 14 taken in conjunction with article 9 (the right to freedom of religion). It observed at para 44 that a violation occurred not only when States treat differently persons in analogous situations without providing an objective and reasonable justification but also when States without an objective and reasonable justification fail to treat differently persons whose situations are significantly different. I do not see how the appellants alternative presentation, based on the Thlimmenos case, adds anything to their first and obvious presentation apart from an extra level of unwelcome complexity. The respondent cannot deny that he treated women usually resident in England differently from women who, although UK citizens, were usually resident in Northern Ireland. But the difference of treatment does not amount to discrimination, and thus is not in breach of article 14, if it was justified. (iii) Justification If he is to establish justification, the respondent has to persuade the court to give an affirmative answer to the four well known questions posed, for example, by Baroness Hale of Richmond in R (Tigere) v Secretary of State for Business, Innovation and Skills [2015] UKSC 57, [2015] 1 WLR 3820, at para 33. In my view an affirmative answer clearly falls to be given to the first three of them: for the aim of the respondents decision in relation to women who were UK citizens but usually resident in Northern Ireland, to which the decision was rationally connected, was to stay loyal to a legitimate scheme for health services to be devolved in the interests of securing local provision to residents in each of our four countries. Nor, with that aim, could he have reached any decision less intrusive upon the rights of such women to respect for their personal life. The issue surrounds the fourth question: did his decision strike a fair balance between their rights and the interests of the UK community as a whole? The respondents own conclusion that his decision struck a fair balance should, so he contends, be adopted unless it was manifestly without reasonable foundation. A central issue, so he says, is economic should the women have to pay for the abortion services which are available to them in England? and, although he does not contend that it would be impossible for the NHS in England to fund the provision to them of such services free of charge, he points out that the funding of other services would in that event be diminished. So, according to him, the central issue raises a second issue which relates to the allocation of resources. He proceeds to cite the decision of the Grand Chamber in Stec v United Kingdom (2006) 43 EHRR 47, at para 52, that, in relation to general measures of economic or social strategy, the Strasbourg court will generally respect the policy choice of national authorities unless it is manifestly without reasonable foundation. But it is now clear that, while this criterion may sometimes be apt to the process of answering the first question, and perhaps also the second and third questions, it is irrelevant to the question of fair balance, which, while free to attach weight to the fact that the measure is the product of legislative choice, the court must answer for itself: see In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, [2015] AC 1016, para 46, Lord Mance. The appellants correctly submit that, in interpreting Convention rights, the ECtHR now frequently refers to the text of international conventions and even to the recommendations of committees set up to oversee observance of them by the parties to them. They and the interveners urge the court to assess the fairness (or, as they submit, the unfairness) of the respondents decision in its application to women who were UK citizens but usually resident in Northern Ireland through the prism of such material. They therefore rely on article 12(2) of the United Nations Convention on the Elimination of All Forms of Discrimination against Women (1979) (CEDAW), which requires the UK, as one of the parties to it, to ensure to women appropriate services in connection with pregnancy , granting free services where necessary They also rely on CEDAW General Recommendation No 24, issued on 5 February 1999 by the committee set up by that Convention, in which, by way of elaboration on article 12, it recommended at para 31(c) that [w]hen possible, legislation criminalizing abortion should be amended, in order to withdraw punitive measures imposed on women who undergo abortion. And they further rely on General Comment No 22 (2016) of the UN Committee on Economic, Social and Cultural Rights, in which at para 28 parties to the International Covenant on Economic, Social and Cultural Rights, including the UK, are required to liberalize restrictive abortion laws and to guarantee women and girls access to safe abortion services. These three quotations represent the high point of the mass of such material now pressed upon the court. The conventions and the covenant to which the UK is a party carefully stop short of calling upon national authorities to make abortion services generally available. Some of the committees go further down that path. But, as a matter of international law, the authority of their recommendations is slight: see Jones v Ministry of Interior of the Kingdom of Saudi Arabia [2006] UKHL 26, [2007] 1 AC 270, para 23, Lord Bingham of Cornhill. At its highest one can say only that there is a trend in some of the international material to which the current law in Northern Ireland runs counter. The trend adds background colour to the inquiry into fair balance under the Convention. In my view, however, the appellants need material of a far more vivid hue to put into the balance against the respondents resolve to stay loyal to the overall scheme for separate provision of free health services within each of our four countries and to the democratic decision reached in Northern Ireland in relation to abortion services. In my view the balance struck by his decision was fair. G: CONCLUSION On any view the dissenting judgments of Lord Kerr and Lady Hale command considerable respect. Lord Kerr concludes that it was the duty of the Secretary of State (and is the duty of the groups) to provide for a UK citizen present but not usually resident in England the same medical services, free of charge, under the NHS as he provided (and as they provide) for those usually resident in England. Lady Hale agrees with him but also stresses that a requirement for abortion services represents a special case. It is, however, easy to think of other people suffering a grave medical condition who could mount an equally convincing special case. Lady Hale also suggests that the duty of the NHS in England to provide abortion services extends even to foreign citizens present in England; but its entitlement to charge such citizens, which Lady Hale recognises, might not negate the effect of the suggested extension on the functioning of the service. Irrespective, however, of its precise extent, the duty proposed to be cast upon the respondent by Lord Kerr and Lady Hale would, in my view, precipitate both a substantial level of health tourism into England from within the UK and from abroad and a near collapse of the edifice of devolved health services. In the end, for the reasons given above, I find myself unable to agree either that sections 1 and 3 of the 2006 Act or that the human rights of UK citizens generate the suggested duty. I would dismiss the appeal. LORD REED: (with whom Lord Hughes agrees) I agree entirely with the reasoning and conclusions of Lord Wilson. I have thought it right to make some additional observations about an aspect of the case which is of wider importance in the context of the devolved constitutional structure of the United Kingdom. That is the question whether laws or administrative practices adopted within one of the constituent parts of the UK, which differentiate between UK citizens according to whether they are or are not residents of that part, fall within the scope of article 14 of the European Convention on Human Rights. There are numerous decisions and judgments of the European Court of Human Rights, and of the former Commission, in which differential treatment based on a persons not having a right of residence in the country concerned, or on his being a resident of a foreign country, has been held to fall within the scope of article 14. The case of Carson v United Kingdom 51 EHRR 13, discussed by Lord Wilson at paras 24 25, was a case of that kind. There have also been cases concerned with situations in which a national law or administrative arrangement resulted in the differential treatment of people in different parts of the country concerned. In some cases of that kind preceding Carson, the Commission proceeded directly to consider whether the differential treatment was justified, without separately addressing the question whether it was based on an other status, within the meaning of article 14, and therefore fell within the scope of that article. Examples include Lindsay v United Kingdom (1979) 15 DR 247, and Gudmundsson v Iceland (Application No 23285/94), given 17 January 1996, unreported. A similar approach was adopted by the Court in later cases such as Orion Beclav SRO v Czech Republic (Application No 43783/98), given 9 July 2002, unreported, Posti v Finland (2003) 37 EHRR 6, and Alatulkkila v Finland (2005) 43 EHRR 34. Cases concerned with legislation or administrative rules introduced at a sub national level, within the context of a federal or devolved constitutional structure, which resulted in different rules applying in different constituent parts of the state in question, have been less common. An early example before the Court was the case of Dudgeon v United Kingdom (1981) 4 EHRR 149, concerned with legislation in Northern Ireland that criminalised homosexual behaviour which was lawful in the rest of the UK. The majority of the Court, having held that there was a violation of article 8, found it unnecessary to determine the complaint under article 14, but Judge Matscher, in a dissenting opinion, considered the complaint. In the course of doing so, he stated: The diversity of internal legislation in a federal state can never, in itself, constitute discrimination, and it is unnecessary to justify it. To claim the contrary would be to mistake totally the very essence of federalism. The Commission adopted a similar approach in a series of cases concerned with other differences between the laws of the different jurisdictions of the UK. An example is the case of P v United Kingdom (Application No 13473/87), given 11 July 1988, unreported, where the Commission stated: . in many, if not all, of the contracting states, different legal jurisdictions exist in different geographical areas within the state (eg cantons, communes, Lnder, etc) . the mere existence of variations between such jurisdictions within a state does not constitute discrimination within the meaning of article 14 of the Convention. Similar observations were made in Times Newspapers Ltd v United Kingdom (Application No 14631/89), given 5 March 1990, unreported. That was not, of course, to say that the laws of a jurisdiction within a state could not violate article 14: for example, the Commission noted in P v United Kingdom that there was no indication that the difference there in question was based on any ground such as association with a national minority. All that was being said was that differences between the laws in different jurisdictions were not in themselves discriminatory. Thus in Nelson v United Kingdom (1986) 49 DR 170, a complaint based on differences between the laws governing remission and parole in Scotland and England was dismissed because the differences were not related in any way to the personal status of the applicant. The Court considered differential treatment arising from differences between the law of Northern Ireland on the one hand, and England and Wales on the other hand, in the case of Magee v United Kingdom 31 EHRR 35, discussed by Lord Wilson at para 25. There, the Court stated (para 50): . in the constituent parts of the United Kingdom there is not always a uniform approach to legislation in particular areas. Whether or not an individual can assert a right derived from legislation may accordingly depend on the geographical reach of the legislation at issue and the individuals location at the time. For the Court, in so far as there exists a difference in treatment of detained suspects under the [Northern Irish legislation] and the legislation of England and Wales on the matters referred to by the applicant, that difference is not to be explained in terms of personal characteristics, such as national origin or association with a national minority, but on the geographical location where the individual is arrested and detained. This permits legislation to take account of regional differences and characteristics of an objective and reasonable nature. In the present case, such a difference does not amount to discriminatory treatment within the meaning of article 14 of the Convention. It is not entirely clear from that passage whether the Court meant that differences in treatment based on the jurisdiction to whose laws a person was subject by reason of his geographical location were not based on the persons status, within the meaning of article 14, or whether it meant that such differences required to be, and were in that case, objectively justified. The former interpretation is in my view to be preferred, for three reasons. First, the Courts general approach at that time to issues of status, within the meaning of article 14, was based on personal characteristics (I say at that time, because in later cases the Court has tended to refer instead to identifiable characteristics, in response to arguments that personal characteristics are necessarily immutable and inherent); and a persons geographical location cannot readily be regarded as a personal characteristic. Secondly, there are strong constitutional arguments against treating differences in the laws of different jurisdictions internal to a state as necessarily requiring justification, as was recognised by Judge Matscher in Dudgeon and by the Commission in the cases mentioned earlier. This has also been accepted by the Court of Justice of the European Union: R (Horvath) v Secretary of State for the Environment, Food and Rural Affairs (Case C 428/07) [2009] ECR I 6355 (where the constitutional system of a member state provides that devolved administrations are to have legislative competence, the mere adoption by those administrations of different . standards . does not constitute discrimination contrary to Community law: para 58). Thirdly, and most importantly, that is how Magee was interpreted by the Grand Chamber in Carson v United Kingdom 51 EHRR 13, para 70, to which I turn next. The case of Carson v United Kingdom was concerned with UK legislation which differentiated between residents of the UK and residents of other countries. One of the issues in the case, as identified in the heading to paras 66 71, was whether country of residence was an other status, within the meaning of article 14. The court held that it was. It stated at paras 70 71: 70. The Grand Chamber . has established in its case law that only differences in treatment based on a personal characteristic (or status) by which persons or groups of persons are distinguishable from each other are capable of amounting to discrimination within the meaning of article 14 . It further recalls that the words other status (and a fortiori the French equivalent toute autre situation) have been given a wide meaning so as to include, in certain circumstances, a distinction drawn on the basis of a place of residence. Thus, in previous cases the Court has examined under article 14 the legitimacy of alleged discrimination based, inter alia, on domicile abroad and registration as a resident. In addition, the Commission examined complaints about discrepancies in the law applying in different areas of a single contracting state (see Lindsay v United Kingdom and Gudmundsson v Iceland). It is true that regional differences of treatment, resulting from the application of different legislation depending on the geographical location of an applicant, have been held not to be explained in terms of personal characteristics (see, for example, Magee v United Kingdom, para 50). However, as also pointed out by Stanley Burnton J [R (Carson) v Secretary of State for Work and Pensions [2002] EWHC 978 (Admin)], these cases are not comparable to the present case, which involves the different application of the same pensions legislation to persons depending on their residence and presence abroad. In conclusion, the Court considers that place of 71. residence constitutes an aspect of personal status for the purposes of article 14. No question arose in Carson as to whether a persons residence or non residence in a constituent part of a country with a federal or devolved constitution was an other status. It is also true that the Grand Chamber, in distinguishing the Magee line of cases, referred to the fact that those cases were concerned with regional differences of treatment, as opposed to residence and presence abroad. On the other hand, the contrast drawn by the Court in the last two sentences of para 70 was between a difference in treatment resulting from the application of different legislation, according to where the person in question was located, and a difference in treatment resulting from the application of a single piece of legislation which differentiated between people according to where they resided. Differential treatment of the latter kind can be equally present whether the legislation in question is national or sub national in origin, and whether the residence test relates to residence within the country in question or within a constituent part of it. A law which treats the residents of a place differently from non residents therefore differentiates on the basis of personal status, within the meaning of article 14, whether the law in question has been passed by the Parliament of the United Kingdom and applies to the whole of the UK, or has been passed by the devolved legislature of one part of the UK and applies only in that part; and whether the differentiation is between residents and non residents of the UK, or between residents and non residents of a part of the UK. The same must be equally true of an administrative arrangement. That interpretation of para 70 is confirmed by the unqualified language of para 71: place of residence constitutes an aspect of personal status for the purposes of article 14: a phrase which has been repeated in later judgments (see, for example, Pichkur v Ukraine (Application No 10441/06), given 7 November 2013, para 47). The fact that the differential treatment of residents and non residents of a particular part of the UK falls within the scope of article 14, whether it arises by virtue of national or devolved legislation or by virtue of administrative arrangements, does not of course by any means entail that such treatment is in violation of the article. But it does mean that the difference in treatment requires to be justified. LORD KERR: (dissenting) A woman from Northern Ireland (NI) visiting England who suffers an acute attack of appendicitis will have, if it proves necessary, her appendix removed in a National Health Service hospital, without charge. The same woman, if she travels to England in order to obtain an abortion, must pay for that procedure. How can this be right? The answer is that it cannot be, and is not, right. It might be suggested that the two situations are not analogous because when the notional woman needs an appendectomy and happens to be in England, she is not exercising a choice in obtaining that treatment, whereas the same woman travelling to England for an abortion does so out of choice. In fact, of course, a woman who travels to England to obtain an abortion has, in the clear majority of cases, no true choice. She must travel away from her home and the support of her family and friends to obtain treatment of the most traumatic type in unfamiliar surroundings. If she wishes to obtain an abortion, she must travel to England. That is because, as Lord Wilson has explained, the circumstances in which that procedure may be carried out in NI are far narrower than in England. It is beyond question that a woman from NI who seeks an abortion in England may travel there lawfully and may lawfully obtain an abortion, provided she fulfils the conditions stipulated by the Abortion Act 1967. But she cannot obtain that treatment on the NHS. England is in practice the only place where a woman from NI can obtain an abortion. But, unlike an Englishwoman who likewise will only seek an abortion in England, the woman from NI must pay. Para 5 of Lord Wilsons judgment provides an admirably comprehensive account of the relevant factual background to this appeal. In that para Lord Wilson described the circumstances in which women from NI come regularly to England to secure abortions. He has recognised the plight into which many of these vulnerable women are cast by the decision of the Secretary of State for Health that treatment for their condition is not to be available on the NHS. The only matters beyond those referred to by Lord Wilson which, I believe, should be taken into account are: (i) it is an accepted fact that 15 16% of abortions carried out in England for non resident women are for women normally resident in NI. Official statistics suggest that around 1,000 abortions are carried out in England on NI women; (ii) even if one accepts the figure of 1,000 per annum, which, for the reasons given by Lord Wilson, is likely to be a significant underestimation, it is a considerable percentage of child bearing women in NI with a population of 1.8m and an annual birth rate there of some 24,000. In England and Wales, the number of abortions was 184,000 for a population of 56.1m. The 2006 Act Three primary issues arise concerning the correct interpretation of the principal provisions relevant to this appeal (sections 1 and 3 of the Act). The first is whether the phrase, the people of England introduces a demographic restriction which applies to section 1(1) of the Act generally. The second issue is, if the phrase in section 1 partakes of such a restriction, does it affect the geographical reach of section 3. The third issue is whether the section 1 duty is properly to be characterised as a target duty, and, if so, what significance should attach to that term. Before turning to the provisions, it is to be noted that the cross headings to Part I of the Act (in which both sections 1 and 3 are contained) are: Promotion and Provision of the Health Service in England and The Secretary of State and the Health Service in England. Of course, the use to which cross headings may be put as an aid to interpretation is limited. But it is of some interest that the opening words describing the nature of the succeeding provisions do not refer to any demographic restriction. It might be considered that confining the Secretary of States duty to one which required him to provide services to the people of England only would not reflect political and practical reality. The people of England is an amorphous phrase, capable, at least theoretically, of many meanings. As Lord Wilson observed, Ward LJ in R (A) v Secretary of State for Health [2010] 1 WLR 279, para 55 suggested that it meant people who are part and parcel of the fabric of the place. With respect, I find that interpretation may pose more questions than it answers, for who are to be regarded as constituting part of the fabric of a place? While not disagreeing with Ward LJs formulation, Lord Wilson suggested what it meant was the people who live in England. But, how is that to be defined? England attracts many people to her shores. Some wish to live here permanently but may have no legal right to do so, or even to have entered the country. Are they people of England while they live here? Others may be short or long term visitors. Imagine the case of a woman from NI who has come to visit relatives in England, intending to stay for six months. Is she a person of England during those months? She is certainly living here. And what if she fell pregnant half way through her stay? Would she have to pay for an abortion because she did not normally live in England? These considerations indicate how difficult it is to fix on a restricted meaning for the phrase, people of England. This difficulty can be avoided, however, by a clear understanding of the separate aims of section 1(1) and of the true nature of the objective to which the phrase people of England has been applied. The people of England and the provision of services in or throughout England Section 1 of the 2006 Act, as originally enacted, provides: 1. Secretary of States duty to promote health service (1) The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement (a) England, and (b) illness. in the prevention, diagnosis and treatment of in the physical and mental health of the people of (2) The Secretary of State must for that purpose provide or secure the provision of services in accordance with this Act. (3) The services so provided must be free of charge except in so far as the making and recovery of charges is expressly provided for by or under any enactment, whenever passed. The primary obligation imposed on the Secretary of State is to continue to promote in England a comprehensive health service. The comprehensive health service was to secure improvement in two separate areas. The first of these was the physical and mental health of the people of England. The second (and distinct from the first) was the prevention, diagnosis and treatment of illness. That second purpose did not have a qualification that it should apply to the people of England only. This is important because it clearly indicates that the Secretary of States duty was not fulfilled merely by bringing about an improvement in the health of the people of England. The duty also included the requirement to promote a comprehensive health service which would not only achieve that objective but would also advance the prevention etc of illness. Where subsection (2) provides that the Secretary of State must for that purpose secure the provision of services in accordance with the Act, this does not refer exclusively to the improvement of the health of the people of England. For that purpose must be taken to refer to all the objectives identified in subsection (1). These were (i) the continued promotion of a comprehensive health service; (ii) the improvement of the health of the people of England; and (iii) the prevention, diagnosis and treatment of illness. The duty under subsection (2) to secure the provision of services in accordance with the Act must reflect these separate objectives. It can be readily understood why the two objectives of the comprehensive health service were identified in separate sub paragraphs of section 1(1). It is understandable that the aspiration that a health service should improve the health of the nation can be expressed as applying to the people of England. After all, the Secretary of State does not have a responsibility to improve the health of other nations. When it comes to providing health services generally, however, a much wider constellation of issues arises. The diagnosis and treatment of illness, although it of course contributes to improving the health of the nation, involves more than fulfilling that objective. The treatment of individual patients, while it may contribute incidentally to an improvement in the health of people generally, requires the provision of adequate medical services, irrespective of the part that they may play in improving overall standards of health. When, therefore, one comes to section 3 of the Act, the Secretary of States duty to provide the services listed there is impelled, at least in part, by considerations other than improving the health of the people of England generally. The principally relevant parts of section 3 of the 2006 Act, as originally enacted, are set out in para 11 of Lord Wilsons judgment and I need not repeat them here. The duty is to provide the listed services throughout England. As Lord Wilson has pointed out, the Secretary of States duty was to provide them to such extent as he considers necessary to meet all reasonable requirements but the critical question was how were those reasonable requirements to be defined. In para 18(b) of his judgment Lord Wilson accepted the respondents argument that in discharging the duty, the Secretary of States target had to be to improve the health of the people who lived in England. For reasons that have been foreshadowed in earlier passages of this judgment and on which I will expand presently, I do not accept that argument. Before doing so, I should say that I agree with Lord Wilsons reservations about the correctness of the opinion expressed by the Court of Appeal, in R v North and East Devon Health Authority, Ex p Coughlan [2001] QB 213, to the effect that the Secretary of State had no duty to provide services if he considered they were not reasonably required or necessary to meet a reasonable requirement. The Secretary of State surely does not enjoy a blanket immunity from challenge to his determination of what were the reasonable requirements in any given situation. True it is that his evaluation of what those requirements demanded will weigh heavily in any challenge to his decision but if that decision can be shown to be legally flawed by reason, for instance, of its irrationality or of the failure of the Secretary of State to take account of a plainly relevant consideration, the mere fact that he is charged with the statutory responsibility of reaching a decision on the question of reasonable requirements, does not render that decision invulnerable to challenge. The outcome of this appeal does not depend on this type of challenge. The primary issue here is whether the Secretary of State properly conceived the nature of his statutory obligation under section 3 of the 2006 Act. In my opinion, the Secretary of State was not obliged to view the discharge of his duty under section 3 through the lens of whether the services provided would improve the health of the people of England. To the contrary, the provision of those services was primarily concerned with the second objective in section 1(1)(b), namely, the prevention, diagnosis and treatment of illness. Implementation of that condition was unconstrained by the need to gear it to improvement of the health of the people of England. The conclusion that the focus was on fulfilling the second objective is reinforced by considering the type of services which the section requires the Secretary of State to provide, as well as the prefatory injunction that he provide the services throughout England as opposed to for the people of England. The services stipulated in sub paras (e) and (f) of section 3(1) plainly relate to the objective of section 1(1)(b). They are (e) such other services or facilities for the prevention of illness, the care of persons suffering from illness and the after care of persons who have suffered from illness as he considers are appropriate as part of the health service, and (f) such other services or facilities as are required for the diagnosis and treatment of illness. The Secretary of States obligation, therefore, was to ask himself what are the reasonable requirements in the provision of those services throughout England; not what are the reasonable requirements of the people of England for these services. The Secretary of State was therefore wrong to conclude that the discharge of his duties under section 3 was dominated by the people of England question. Of course, his primary obligation, so far as concerned the improvement of the health of the nation, was to the people of England, however that phrase is to be construed. But it did not provide a fetter on his consideration of how his statutory duty should be fulfilled. To the contrary, the discharge of his duties under section 3 should have been regarded by him as requiring a far wider consideration. In England, an abortion can only lawfully be provided under section 1 of the Abortion Act 1967 to avert a risk of physical or mental injury to the mother, the unborn child or any existing children in the family. As Laws LJ explained in ProLife Alliance v British Broadcasting Association [2002] 3 WLR 1080; [2002] EWCA Civ 297 at para 6: The great majority [of abortions] are performed on the third of the five permitted grounds under the Abortion Act 1967 as amended: that is that the continuance of the pregnancy would involve risk, greater than if the pregnancy were terminated, of injury to the physical or mental health of the pregnant woman. There is some evidence that many doctors maintain that the continuance of a pregnancy is always more dangerous to the physical welfare of a woman than having an abortion, a state of affairs which is said to allow a situation of de facto abortion on demand to prevail. Thus, while pregnancy is not, of course, itself an illness, allowing an unwanted pregnancy to continue to term carries a risk of physical or mental injury. There can therefore be no question but that Englishwomen who seek an abortion in England are being treated for the prevention of illness under sections 1(1)(b) and 3 of the 2006 Act. Women from NI provided with abortion services in England are likewise being treated under these provisions. The single difference is that women from NI cannot avail of section 1(3), whereas women from England can. It was argued for the respondent that differences in standards in treatment for all manner of illnesses and conditions differed in the different parts of the United Kingdom but that citizens of one part were not entitled to demand provision of what they might regard as superior services in a part of the kingdom in which they did not live. It was suggested that this was in keeping with individual schemes for health services being provided to residents in each of the four countries of the United Kingdom. But abortion services such as A required are not provided at all in Northern Ireland. This is not an instance of her seeking what she regarded as a better level of service in England. It was a case of her being obliged to come to the only medical service of which she could avail. The decision of the Secretary of State to refuse to allow NI women to obtain abortion services on the NHS in England was one taken in the knowledge that she could not obtain those services elsewhere. The power of the Secretary of State to direct that abortion services on the NHS should be available to women from Northern Ireland and his reasons for not exercising it As Lord Wilson has observed (in para 8 of his judgment), it was accepted that the Secretary of State had the power to enable UK citizens usually resident in Northern Ireland to undergo abortions under the NHS in England free of charge. I agree with all that he has said in paras 12 16 of his judgment about the continuing availability of that power. Indeed, all of this was a matter of concession by the Secretary of State. Given that the Secretary of State had that power, one must concentrate on his reasons for deciding not to have recourse to it. His decision not to do so was based on two considerations. The first was that whatever course he took should be consonant with his target to improve the health of the people of England. If that factor loomed over the decision, it seems almost inevitable that his conclusion would have to be not to allow women from NI to have abortions on the NHS. It is difficult to see how a decision to allow them to have abortions in England free of charge could be reconciled with an overriding obligation to promote the health service in order to improve the physical and mental health of the people of England. The very existence of a power to permit NI women to have abortions on the NHS seems inconsistent with such an obligation. Whatever of that, for the reasons that I have given, I believe that the Secretary of State was wrong to consider that his statutory duty was so confined. The second reason proffered by the Secretary of State was that it was the policy of the government that the NHS should not fund services for NI residents which the Northern Ireland Assembly has deliberately decided not to legislate to provide, and which would be unlawful if provided in Northern Ireland see the letter referred to in para 20 of Lord Wilsons judgment. This view was reached against the background that the Secretary of States primary obligation was to provide health services for the people of England. Notwithstanding my conclusion that this should not have been the framework within which the decision was taken, it is right that I should examine it as a possible defence even in what I consider was the correct legal context, namely, that the Secretary of State was under a duty to provide medical services throughout England unconstrained by the requirement that these be devoted to the people of England. Lord Wilson has said that the Secretary of State was entitled to afford respect to the democratic decision of the people of Northern Ireland (para 20). I agree. Indeed I would go further. He was bound to show such respect. But respect for what? The Northern Ireland Assembly had decided that abortion in that jurisdiction should not be provided on the same basis as in England. But it has expressed no view about the ability of women from NI to travel to England to obtain abortions. Assembly members, indeed all informed persons in the entire population of Northern Ireland, are plainly aware of the fact that many women from NI travel every year to England to obtain abortions and have done so for many years. The need for respect on the part of the Secretary of State, on behalf of the British government, did not extend to denying Northern Irish women the means of obtaining abortions in England. It was entirely right that this should be so. Why should affording Northern Irish women abortions on the NHS constitute a lack of respect, when countenancing and permitting such abortions does not? Lord Wilsons answer is that the Secretary of State was entitled to decide not to alter further the consequences of the democratic decision by making such services available to them free of charge. With regret, I cannot agree. If, as must be presumed to be the case, the NI Assembly regarded with equanimity the fact that many women from NI travelled each year to England to obtain abortions, I cannot see how allowing these abortions to take place on the NHS would involve a further alteration to the democratic decision of the Assembly. Indeed, I question whether providing NHS funding for abortions for women from NI involves any alteration to the democratic decision. Both the Assembly and the British government were aware that it was perfectly legal for them to travel to England to obtain abortions. Once in England, provided they satisfied the criteria of the Abortion Act 1967, it was perfectly legal for them to obtain abortions. The NI Assembly had no function or say in the exercise of the womens unalterable legal entitlement to obtain abortions in those circumstances. The democratic decision making in NI simply does not impinge on the exercise by NI women of their rights in England. By making it more difficult for women from NI to obtain abortions in England, the Secretary of State was not affording respect to the wishes of the electorate in Northern Ireland or the decision of NI Assembly. Unless, that is, it is considered that affording respect warrants the creation of problems for vulnerable women to exercise their right in a part of the UK solely because they come from a part of the kingdom where they are unable to exercise the right. That seems to me to partake of double standards. Women throughout the UK, apart from NI, are entitled to abortion services under the Abortion Act 1967 and the British government must be taken to approve of, or at least assent to, that position. On that account, they must be taken to disapprove of, or at least dissent from, the denial of that right to women from another part of the UK. Why then should they feel constrained, under the guise of affording respect to the NI Assemblys wishes, to make it more difficult for NI women to exercise, in England, rights to which they are undeniably entitled? A target duty? The Secretary of State argued that the duties owed under sections 1 and 3 of the 2006 Act were target duties and, on that account, they were unenforceable on the application of an individual. In support of that argument, reliance was placed firstly on the decision in R (Justice for Health Ltd) v Secretary of State for Health [2016] Med LR 599; [2016] EWHC 2338 (Admin), para 89 where Green J said that target duties: (a) . do not specify a particular or precisely defined end result as opposed to a broad aim or object and (b) their mandatory nature is diluted by the fact that they do not compel the achievement of that end result instead requiring the Secretary of State only to factor those objectives into consideration. These observations were made in relation to sections 1A 1G of the 2006 Act, as amended. Those provisions relate to specific duties of the Secretary of State, relevant to: terms and conditions of employment of those working in the NHS; the quality of services of those who avail of it; the planning and delivery of education and training of the professionals employed in the NHS; and reporting to Parliament. These are a quite different series of duties from those involved in the present appeal. In any event, Green J did not suggest that the failure of the Secretary of State to discharge any of the duties could not be the subject of judicial review by someone affected by the failure. The case provides no support for the respondents principal contention that target duties cannot be enforced by an individual. Next Mr Coppel QC for the Secretary of State relied on a passage from the speech of Lord Hope of Craighead in R (G) v Barnet London Borough Council [2003] UKHL 57; [2004] 2 AC 208 at para 91 where, in relation to the target duty the target duty in section 17(1) of the Children Act 1989, he said: I think that the correct analysis of section 17(1) is that it sets out duties of a general character which are intended to be for the benefit of children in need in the local social services authoritys area in general. [In] R v Barnet London Borough Council, Ex p B [1994] ELR 357 . Auld J observed that the duties under Part III of the [Children Act] 1989 fell into two groups, those which are general and those which are particular, and that the general duties are concerned with the provision of services overall and not to be governed by individual circumstances. As Mr Goudie for the defendants accepted, members of that section of the public [affected by the local authoritys decision] have a sufficient interest to enforce those general duties by judicial review. But they are not particular duties owed to each member of that section of the public of the kind described by Lord Clyde in R v Gloucestershire County Council, Ex p Barry [1997] AC 584, 610a which give a correlative right to the individual which he can enforce in the event of a failure in its performance. This citation, so far from supporting the respondents central thesis on the matter of target duties, seems to me to be entirely destructive of it. A and B do not suggest that their individual cases required the attention of the Secretary of State or that they were owed any obligation personal to them. But they were certainly affected by the Secretary of States decision in relation to the availability of abortion services to NI women. And, on that account they were entitled to enforce the Secretary of States general duties by way of judicial review. In relation to the section 3 duty in particular, Mr Coppel relied on the decision in R (Condliff) v North Staffordshire Primary Care Trust [2012] PTSR 460; [2011] EWCA Civ 910. In that case the claimant, a morbidly obese man, made a funding request to the trust for gastric surgery. This was refused because he did not meet the trusts policy of offering funding to people who had a body mass index which exceeded a certain level. The claimant sought judicial review of the trust's decision on the ground, inter alia, that it had breached his right to respect for his private and family life under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). The application was dismissed, the Court of Appeal holding that article 8 of ECHR did not give rise to a positive duty on a statutory health care provider to consider non clinical, social or welfare considerations wider than the comparative medical conditions and medical needs of different patients when deciding on the allocation of funding for medical treatment. At para 4 Toulson LJ said of section 3 of the 2006 Act, this is a public law duty and not a direct duty owed to individual patients. He did not say, however, that an individual, affected by a decision was not entitled to challenge the legal validity of the policy. Mr Condliff had challenged the failure of the trust to depart from its policy because of his individual circumstances. This is not the species of challenge made by A and B. They challenge the policy, not a refusal to make an exception in their case. The Condliff decision is not germane to their circumstances. In my judgment, the arguments of the Secretary of State in relation to target duties must fail. I would therefore allow the appeal. The human rights challenge I fully agree with Lord Wilson, for the reasons that he gives, that the appellants complaint plainly comes within the ambit of article 8 of ECHR. I also agree with his conclusion, stated in para 31 of his judgment, that the respondent cannot deny that he treated women usually resident in England differently from women who, although UK citizens, were usually resident in Northern Ireland. But I cannot agree with his decision that that difference in treatment is justified. Lord Wilson has said (in para 32) that the legitimate aim of the Secretary of State, in deciding not to permit women from NI to have abortions on the NHS in England, was to stay loyal to a legitimate scheme for health services to be devolved in the interests of securing local provision to residents in each of our four countries. For the reasons that I have earlier given, I do not consider that there was any call on his loyalty to apply such an interdiction. Properly understood, section 1 of the 2006 Act imposed twin but distinct duties on the Secretary of State. Simply stated these were (i) to promote a health service that would bring about an improvement in the health of the citizens of the country for which he had responsibility, viz England; and (ii) to provide medical services that would lead to better diagnosis and treatment of illness in England. Permitting women who come from NI to have their abortions on the NHS involves no compromise on the scheme of having each of our four countries being responsible for local provision of medical services. Allowing NI women to have abortions on the NHS in England does not impinge on the NI Assemblys continuing responsibility for the provision of medical services in Northern Ireland. The important point on which to focus is that the responsibility is one which is discharged on a geographical basis. The English Secretary of State is responsible for providing proper medical services in England. The Northern Irish Minister for Health is responsible for providing such services in NI. If an Englishwoman is treated in NI on the NHS for a condition suffered during a visit to that country, no interference with the scheme for the four countries arises. Likewise, no interference would arise if NI women who are in England were permitted to have abortions on the NHS. If the avowed aim is that articulated by Lord Wilson, therefore, I cannot accept that this is legitimate. It cannot feature in any assessment of justification for the differential treatment. Two other conceivable aims should be mentioned as possible candidates for being a legitimate aim. The first is the decision that the NHS should not fund services for NI residents which the Assembly has decided not to legislate to provide, and which would be unlawful if provided in Northern Ireland. For the reasons given earlier, I do not consider that this can possibly qualify as a legitimate aim. The second is cost. This has never been put forward as a legitimate aim, although it did feature as a matter which the Secretary of State claimed should be taken into account as part of the balancing exercise, the fourth in the now well established four stage evaluation of claimed justification for interference with a Convention right see R (Aguilar Quila) v Secretary of State for the Home Department (AIRE Centre intervening) [2012] 1 AC 621, [2011] UKSC 45; Bank Mellat v HM Treasury (No 2) [2014] AC 700, [2013] UKSC 39; and R (Tigere) v Secretary of State for Business, Innovation and Skills [2015] UKSC 57; [2015] 1 WLR 3820. Whatever of its possible relevance to a balancing exercise it simply cannot be considered as a legitimate aim. Indeed, Mr Coppel, during oral argument, said on behalf of the Secretary of State, It has never been our position that the reason abortion [for women from NI] is not provided on the NHS is that it would be too costly. If no legitimate aim exists for the interference with the appellants article 8 rights, when read with article 14, the entire edifice of justification crumbles. It is therefore unnecessary for me to address the other three stages identified in Aguilar Quila and the other cases referred to in the preceding paragraph. I should like to say something about the issue dealt with by Lord Reed in his judgment concurring with Lord Wilson. Although academic in the present case (for reasons that I will give presently) the issue discussed by Lord Reed is an important and difficult one. Lord Reed has formulated the issue in this way: whether laws or administrative practices adopted within one of the constituent parts of the UK, which differentiate between UK citizens according to whether they are or are not residents of that part, fall within the scope of article 14 of the European Convention on Human Rights. As he has pointed out, although the issue was on, at least, the periphery of some cases considered by the European Court of Human Rights or the European Commission on Human Rights in Strasbourg, it has not often been directly dealt with. It was canvassed on the applicants behalf in Dudgeon v United Kingdom (1981) 4 EHRR 149 and raised in Nelson v United Kingdom (1986) 49 DR 170 as Lord Reed has said. The issue occupied centre stage in Magee v United Kingdom (2000) 31 EHRR 35, discussed by Lord Wilson at para 25 and more fully addressed by Lord Reed in paras 43 and 44 of his judgment. Lord Reed has referred to the important statement of principle in the dissenting opinion of Judge Matscher in Dudgeon where he stated in forthright terms that differences in legislation in different states in a federation could never amount to discrimination, and the question of justification for such differences simply did not arise. Judge Matscher did not address the question of whether Mr Dudgeon could have claimed other status, I suspect because he would have regarded the question as otiose. In Magee the principal reason that the applicant failed in his article 14 claim was that he had been arrested and detained under statutory provisions and a regime of detention that was unique to Northern Ireland among the jurisdictions of the United Kingdom and that his claim that he had received differential treatment from that which he would have received had he been arrested in any other part of the UK was not viable. However, the decision was expressed by the court (and I agree with Lord Reed that it is not entirely clear on which precise basis they reached their conclusion), the claim was bound to fail on the fundamental basis articulated by Judge Matscher in Dudgeon. Individual jurisdictions within a federal system are entitled to devise their own laws. They are not required to subscribe to a common model. In effect, Mr Magees claim, in order to succeed, would have had to assert that laws could not be enacted in Northern Ireland which had less favourable effect on those detained than did the relevant laws in other parts of the UK. The appellants case is fundamentally different. They do not assert that the law in Northern Ireland should correspond with that in England. They claim that when women from Northern Ireland are in England, they are entitled to be treated in the same way as Englishwomen in the provision of abortion services. To analogise with the position in Magee, if the applicant in that case had been arrested in England, he would have been entitled to the same detention regime as would have been afforded Englishmen arrested for the same offences. The appellants derive their status as women from NI who have been treated differentially from women in England. I therefore consider that they are entitled to succeed on their human rights claim also. LADY HALE: (dissenting) I too would have allowed this appeal, for the reasons given by Lord Kerr. In particular, I agree with him that the aim in section 1(1)(b) of the National Health Service Act 2006 is not limited to the prevention, diagnosis and treatment of illness in the people of England (whatever that may mean). It is only the aim in section 1(1)(a), the improvement of those peoples physical and mental health, which is so limited. I also agree that the relevant services listed in section 3(1), specifically, (a) hospital accommodation, (b) other accommodation for the purpose of any service provided under this Act, (c) medical, dental, ophthalmic, nursing and ambulance services are designed, or principally designed, to meet the aim of treating illness in section 1(1)(b) rather than health promotion in section 1(1)(a). The question, therefore, is whether a policy of not providing the medical service of terminating pregnancies under the Abortion Act 1967 to women who live in Northern Ireland is consistent with the duty to provide (or secure the provision of) such services as are necessary to meet all reasonable requirements. In considering what is reasonably required, regard must be had to some of the fundamental values underlying our legal system, values which were stressed in the helpful intervention on behalf of the Alliance for Choice, British Pregnancy Advisory Service, Birthrights, Family Planning Association and Abortion Support Network. These include autonomy and equality, both of which are aspects of an even more fundamental value, which is respect for human dignity. The right of pregnant women to exercise autonomy in relation to treatment and care has been hard won but it has been won. In St Georges Healthcare NHS Trust v S [1999] Fam 26, 50 Judge LJ, giving the judgment of the court, said this: In our judgment while pregnancy increases the personal responsibilities of a woman it does not diminish her entitlement to decide whether or not to undergo medical treatment. Although human, and protected by the law in a number of different ways set out in the judgment in In re MB (An Adult: Medical Treatment) [1997] 2 FCR 541, an unborn child is not a separate person from its [sic] mother. Its need for medical assistance does not prevail over her rights. She is entitled not to be forced to submit to an invasion of her body against her will, whether her own life or that of her unborn child depends on it. Her right is not reduced or diminished merely because her decision to exercise it may appear morally repugnant. The declaration in this case involved the removal of the baby from within the body of her mother under physical compulsion. Unless lawfully justified this constituted an infringement of the mothers autonomy. Of themselves the perceived needs of the foetus did not provide the necessary justification. That case was concerned with autonomy in the negative sense, the right to refuse medical treatment, even though it would save the babys life. The more recent case of Montgomery v Lanarkshire Health Board (General Medical Council intervening) [2015] UKSC 11; [2015] AC 1430, is concerned with the positive right to choose what treatment to have. The court emphasised that an adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo (para 87) and therefore to be provided with the information necessary to enable her to make that choice, a choice in which she is entitled to be guided by her own values and preferences (para 115). Of course, there are sometimes countervailing considerations which constrain her choices. Abortion is only available in Great Britain if both the substantive and the procedural requirements of the Abortion Act 1967 are complied with. But if they are, it is the womans choice whether or not to have that abortion. It is a reasonable requirement to provide her with a service, wherever she comes from. The NHS can charge women from abroad to whom they provide abortion services. But they cannot charge women from the United Kingdom, however great their need. This is to deny pregnant women from Northern Ireland the same right to choose what is done with their bodies as is enjoyed by all other pregnant citizens of the United Kingdom. It is inconsistent with the principle of equal treatment which underlies so much of our law. This is not to say that the law in Northern Ireland has to be the same as the law in the rest of the United Kingdom. That is not what this case is about. But it is to say that a woman from Northern Ireland who is in Great Britain ought not to be denied, as a matter of policy, the same rights as other women here enjoy. Nor is it to say that the NHS must always provide exactly the same services throughout the United Kingdom. There are often difficult choices to be made which will depend upon many factors, some of which will be local to the place where the services are provided. But pregnancy is a special case. As Lord Bingham of Cornhill explained in Rees v Darlington Memorial Hospital NHS Trust [2003] UKHL 52; [2004] 1 AC 309, at p 317, having a child that she did not want to have denies a woman the opportunity to live her life in the way that she wished and planned (I tried to explain the full extent of the denial of her autonomy in Parkinson v St James and Seacroft University Hospital NHS Trust [2001] EWCA Civ 530; [2002] QB 266). Many women will nevertheless choose to continue the pregnancy and take care of the child. But a lawful abortion restores her autonomy and respects her dignity. It is for those reasons that I also agree that the policy is incompatible with the Convention rights of women from Northern Ireland. The protection of dignity and autonomy is a core value underlying the rights guaranteed by article 8. The difference in treatment by the NHS in England between women from England and women from Northern Ireland cannot be justified by respect for the democratic decisions made in Northern Ireland as to what will be provided by the NHS there. In fact, the reason why abortion is only available on a very limited basis in Northern Ireland is not that the NHS has chosen to provide different services there. It is that the criminal law of Northern Ireland remains as it was in England before the Abortion Act 1967 was passed. The NHS there could not provide abortion on a wider basis there even if it wanted to do so. There is no question of trying to change the criminal law of Northern Ireland. But that law does not prohibit women from travelling to England to have an abortion which is perfectly lawful here. It cannot constitute a good reason for a policy of denying them health services which are lawful here.

The criminal law relating to abortion in Northern Ireland falls within the legislative competence of the Northern Ireland Assembly by virtue of section 4(1) of the Northern Ireland Act 1998. Abortion is lawful in Northern Ireland only in far narrower circumstances than in the rest of the UK. Consequently, a steady stream of women usually resident in Northern Ireland come to England to secure an abortion. Many of these women attend private clinics which charge a fee for the service, as they are unable to obtain an abortion free of charge under the English NHS unless in an emergency. A, a resident of Northern Ireland, became pregnant in 2012 at the age of 15. With the support of her mother, B, A decided to seek the termination of her pregnancy. B accompanied A to a private clinic in Manchester where A underwent an abortion. The total cost was about 900. The appellants argued that the respondents failure to provide for A, as a UK citizen usually resident in Northern Ireland, to be entitled to undergo an abortion free of charge under the NHS in England was unlawful. Section 1(1) of the National Health Service Act 2006 (the 2006 Act) places a duty on the respondent to continue the promotion in England of a comprehensive health service designed to secure the improvement (a) in the physical and mental health of the people of England, and (b) in the prevention, diagnosis and treatment of illness. The respondent also had a duty under section 3(1) of the 2006 Act to provide throughout England, to such extent as he considers necessary to meet all reasonable requirements [] (c) medical services. The respondent had the power to make a direction under section 7(1) of the 2006 Act and regulation 3(7) of the NHS (Functions of Strategic Health Authorities and Primary Care Trusts and Administration Arrangements) (England) Regulations 2002 providing that the function of providing abortion services should be exercised by primary care trusts (latterly clinical commissioning groups) for the benefit of all persons present in their area who were citizens and residents of the UK rather than only for those usually resident in its area. The appellants contend, firstly, that in failing to make such a direction the respondent acted irrationally and unlawfully took into account the Northern Ireland Assemblys decision not to provide abortion services. Further, they argued section 3(1) required the respondent to make a direction. Secondly, the appellants argued that the respondents failure to make a direction violated article 14 of the European Convention on Human Rights taken in conjunction with article 8 because their right to respect for private and family life was not secured without discrimination on the ground of usual residence. The Supreme Court by a majority of 3 to 2 dismisses the appeal. Lord Wilson gives the lead majority judgment, with which Lord Reed and Lord Hughes agree. Lord Reed gives a concurring judgment, with which Lord Hughes agrees. Lady Hale and Lord Kerr give dissenting judgments. Lord Wilson expresses sympathy with the deeply unenviable position of those in the situation of the appellant, but rejects the public law challenge. Parliaments scheme is that separate authorities in each of the four countries in the United Kingdom should provide free health services to those usually resident there. The respondent was entitled to make a decision in line with this scheme for local decision making. Further, the respondent was entitled to afford respect to the democratic decision of the people of Northern Ireland not to fund abortion services, and to take into account the ability of Northern Irish women to lawfully travel to England and purchase private abortion services there [20]. Lord Wilson concludes that the human rights challenge fails as the difference in treatment was justified [35]. The respondents decision as to whether to provide abortion services to a group of women free of charge falls within the scope of article 8 [22]. The respondent treated women usually resident in England differently from women who, although UK citizens, were usually resident in Northern Ireland [31]. A difference of treatment between UK citizens present in England on the grounds of usual residence falls within the scope of other status for the purposes of article 14 [27]. The respondents aim to stay loyal to the devolved scheme for health services and the democratic decision reached in Northern Ireland in relation to abortion services was rationally connected to his decision not to make the direction sought by the appellants. With that aim in mind he could not have reached any decision less intrusive upon the article 8 rights of the appellants [32]. The respondents decision struck a fair balance between the appellants rights and the interests of the UK community as a whole and, accordingly, was justified. As such, the difference in treatment did not amount to discrimination [35]. In a concurring judgment, Lord Reed reviews decisions and judgments of the European Court of Human Rights and the former European Commission on Human Rights that relate to devolved laws which differentiate between UK citizens according to whether they are residents of that part of the UK [38 48]. Such differential treatment falls within the scope of article 14 and requires to be justified [49]. Lord Kerr would have allowed the appeal. While the aim in section 1(1)(a) of the 2006 Act relating to the improvement of physical and mental health is limited to the people of England, the aim in section 1(1)(b) relating to the prevention, diagnosis and treatment of illness is not so limited [59]. Northern Irish women who seek an abortion in England are being treated for the preventionof illness under section 1(1)(b) as allowing an unwanted pregnancy to continue to term carries a risk of physical or mental injury [69]. In failing to exercise his power, the respondent was wrong to believe that his section 3 duties were confined to the people of England [72] and that affording respect to the Northern Ireland Assembly required denying Northern Irish women the means of obtaining abortions in England. The Northern Ireland Assembly has expressed no view about the ability of Northern Irish women to travel to England to obtain abortions [74]. Allowing these abortions to take place on the NHS would not alter the democratic decision of the Northern Ireland Assembly [75]. In respect of the human rights challenge, Lord Kerr would have held that no legitimate aim exists for the interference with article 8 [87]. Allowing Northern Irish women abortions on the NHS would not compromise the scheme of local provision of medical services [84 85]. Further, neither democratic deference to the Northern Ireland Assembly nor cost can qualify as legitimate aims [86]. Lady Hale agrees with Lord Kerr [92]. Further, if the requirements of the Abortion Act 1967 are complied with then it is a reasonable requirement under section 3 of the 2006 Act that the respondent provide a woman with a service, wherever she comes from. The NHS can charge women from abroad in respect of abortion services. But they cannot charge women from the United Kingdom [94].

What is the impact of fraud upon a financial settlement which is agreed between a divorcing husband and wife, especially where, as will almost always be the case, that agreement is embodied in a court order? Does fraud unravel all, as is normally the case when agreements are embodied in court orders, or is there some special magic about orders made in matrimonial proceedings, which means that they are different? This case happens to concern a husband and wife in divorce proceedings, but the same questions would also arise in judicial separation proceedings, and between same sex partners who are either married or in a civil partnership in divorce, dissolution or separation proceedings. They entail consideration, in particular, of the leading case on non disclosure in matrimonial financial proceedings, Livesey (formerly Jenkins) v Jenkins [1985] AC 424 (Livesey). The facts The husband and wife (who are not yet divorced) were married in 1993 and separated 17 years later, in 2010, having had three children together. When their financial proceedings were heard, in July 2012, the children were aged 17, 15 and 12. The wife has been the childrens primary carer throughout the marriage and she anticipates that she will remain responsible for the care of their elder son, who has severe autism, for the rest of her life. Sadly, the parties also cannot agree about matters relating to the future care of their son and so there are also proceedings in the Court of Protection about him. The husband is a computer software entrepreneur. He has developed a very successful software business, AppSense Holdings Ltd, in which he holds a substantial shareholding. The value and manner of distribution between them of this shareholding was the principal matter in dispute between the parties. It was not in dispute that, in addition to that shareholding, there were liquid assets of some 17m, of which around 13.8m was in cash, 2m in the parties three homes, and the balance in other assets and investments. It is only necessary to give a brief outline of the dispute about the value of AppSense and the husbands shareholding in it. In early 2011, Goldman Sachs had paid US$70m for a 33.5% share in the company. The wife contended that this valued the company as a whole at around US$255m and the husband's remaining shares at around US$132m. The husband contended that the development of the company was not going according to plan and it was worth far less. Each party instructed a valuation expert. Both valuers approached their task on the basis that there were no plans for an Initial Public Offering (IPO). The wifes valuer concluded that the company as a whole was worth 88.3m (making the post tax valuation of the husbands shareholding something between 22.24m and 31.9m). The husbands valuer concluded that the company was worth 60m (valuing the husbands shareholding at something between 6.674m and 8.085m). The case came on for trial before Sir Hugh Bennett in July 2012. The wifes case was that all the assets should be divided equally. She should receive 50% of the liquid assets and 50% of the net proceeds of any sale of the AppSense shares, whenever that took place. The husbands case was that the assets should be divided equally, but that the wife should receive the whole of her share from the liquid assets, leaving him with the unencumbered AppSense shares. He also argued that, if his valuers view of the value of those shares was not accepted, his special contribution would justify a departure from the principle of equality. However, under cross examination, he abandoned this second argument, at least in relation to assets acquired during the marriage. Much of the husbands evidence was about when the value of his shares might be realised. His written evidence was that an exit, although theoretically possible at any time, was unlikely before three, five or seven years after July 2012. He also gave the impression that various exit strategies were being contemplated but only when the time was right. In oral evidence he said that there might be an exit in between three and seven years time, but that [o]ne thing is for sure that theres nothing on the cards today. After the parties had given their evidence, but before the valuers had given theirs, the parties reached an agreement. The wife would receive over 10m in cash and property, and 30% of the net proceeds of sale of the AppSense shares (in the shape of a deferred lump sum), whenever that might take place. They would also set up a trust for their elder son, into which each would pay 1m immediately and the husband would pay 4m from the proceeds of sale of his AppSense shares. The husband would also pay child support for each of the children. On 13 July 2012, this agreement was explained to the judge, who approved it. A draft consent order was drawn up. Before it was sealed, however, reports appeared in the press indicating that AppSense was being actively prepared for an IPO, which was expected to value the company at between US$750m and US$1000m. The wife immediately invited the judge not to seal the order and applied for the hearing to be resumed. The husband argued that the judge was functus officio, but the judge rejected that and ordered the husband to file an affidavit responding to the wifes allegation of material non disclosure. He directed a further hearing, which was listed for 15 April 2013. At that hearing he had before him the wifes application for the hearing to be resumed and the husbands application that the wife show cause why the order reflecting the agreement should not be sealed. He gave judgment on 29 April 2013: [2013] EWHC 991 (Fam), [2013] 2 FLR 1598. The husbands affidavit, filed in January 2013, continued to deny that there was any imminent prospect of an IPO of AppSense or that he had misled the court in his evidence. The press reports were mere public relations fluff put out by one or more investment banks. However, the documents which he exhibited to that affidavit told a very different story. As the judge put it, planning for an IPO in early 2013 had been in full swing from January to August 2012 (para 29); by early July 2012 the company had sent out invitations to various banks inviting them to pitch for the role of bankers to the IPO; and the husband had been due to and did meet potential bankers the week after the hearing. The husband had knowingly misled both of the expert valuers and his evidence at the hearing had been false. It was absolutely plain that the husbands evidence about AppSense had been seriously misleading (para 29). [W]hen placed against the documents which he has now disclosed, his evidence can only be categorised as dishonest. The documents exhibited to his affidavit had not previously been disclosed because he did not want the wife or the court to know the true facts. He thus gave dishonest evidence, no doubt in the hope that this would lessen his exposure to the courts discretionary powers (para 31). Had the judge known the true facts, it was inconceivable that he would not have regarded them as relevant to the exercise of his discretion. This was not some relatively trivial minor matter, in the words of Lord Brandon in Livesey. Why would the husband lay a false trail if what was sought to be suppressed was immaterial (para 33)? The decisions of the High Court and Court of Appeal The judge having reached that conclusion, it might have been expected that he would direct that the draft consent order agreed in July 2012 not be sealed and give directions for the case to be heard again. Instead, however, he acceded to the husbands application that the order be perfected. His grounds for doing so were, in summary, that had he known the truth about the plans for an IPO in 2012, he would have asked himself what is the likelihood of an IPO actually happening? (para 37); he would have progressed the hearing as far as he could and then adjourned to see whether an IPO did take place, on what terms, at what value and at what price (para 38); as in fact no IPO had taken place (para 40) and the husbands evidence that no IPO was now contemplated had not been challenged, he was compelled to accept that none was now in prospect (para 41); under the draft order, the wife had by far the greater share of the liquid assets; she was to make a smaller contribution to the sons trust; and she was to get 30% of the net value of the husbands shares whenever they were realised, although it was strongly arguable that the value of the shares would become less and less of a matrimonial asset in the future; she took the risk that crystallisation of her entitlement might occur sooner than three years by agreeing to a flat rate of 30% (para 42); and so the order he was now being asked by the husband to make was not substantially different from the order which he would have made had there been full disclosure at the outset; hence the non disclosure was not now material (para 43). The Court of Appeal, by a majority, dismissed the wifes appeal: [2014] EWCA Civ 95, [2014] 2 FLR 89. The leading judgment was given by Moore Bick LJ. In summary, it was clear from Livesey v Jenkins and other cases that the authority of an order made in matrimonial financial remedy proceedings derives from the courts own exercise of its statutory powers under the Matrimonial Causes Act 1973 and not from the consent of the parties. Hence misrepresentation that would normally entitle a wife to rescind a contract (and have a consent order in civil proceedings set aside) did not necessarily entitle her to renounce the agreement and resume the proceedings. It was necessary for the wife to satisfy the judge that he should set the order aside (para 18). In Livesey, Lord Brandon had said that it would only be in cases where the absence of full and frank disclosure had led to the court making an order substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside the order could be made good (para 19). So the judge had asked himself the right question (para 21). The sooner the husband was likely to dispose of his shares, the stronger would be the wifes claim to an equal share and the stronger her argument for resuming the hearing. Any challenge to the husbands evidence about his plans for the company ought to have been made at the hearing (para 23). Although Livesey had not been a case of fraud, [i]t would be surprising if Lord Brandon had confined his analysis to the relatively uncommon cases of inadvertent non disclosure (para 20). In her concurring judgment, Macur LJ placed particular emphasis on the wifes failure to cross examine the husband on his affidavit (paras 53, 54). In a vigorous dissenting judgment, Briggs LJ explained that the husbands fraud was material to the agreement and the consent order for two reasons. First, it undermined the basis on which his shareholding had been valued and therefore the ability of the wife to address the proportionality of agreeing a discount below her claimed 50% against the receipt of a larger share of the other family assets. Secondly, it created a false basis for the wife to assume that a delayed realisation of the husbands shareholding might justify a tapered reduction in her share of the proceeds (para 30). Once the judge had decided that the husbands fraud had undermined the parties agreement and the consent order, that should have been the end of the matter. There were three inter related reasons for this (para 34). First, the general principle that fraud unravels all is no less applicable to court orders than to contracts (para 35). Second, Lord Brandons obiter dictum in Livesey had been misinterpreted. He was drawing a distinction between triviality and materiality as at the date of the order, not at some later date (para 40). The husband should not be allowed to hold onto an order tainted by material fraud on his part by rearranging his affairs so as to bring them broadly into line, but after the event, with the false picture originally portrayed by him (para 37). Third, the wife had been deprived of a full hearing of her claim. The purpose of the hearing in April 2013 was not to determine her claim but only to decide whether the order should be set aside and a rehearing ordered. Cross examination of the husband was unnecessary (para 42). The wife should not have to prove at that stage that she would have obtained a substantially different order, merely that the non disclosure had deprived her of a real prospect of doing better at a full hearing (para 46). The wife now appeals to this court. Settling matrimonial claims It is in everyones interests that matrimonial claims should be settled by agreement rather than by an adversarial battle in court. The financial resources of the family are not whittled away by the often substantial legal costs involved. The emotional resources of the family are not concentrated on conflict. The future relationship between the adult parties is not soured, or further soured, by that conflict. This is not only good for them but also for their children, whatever their ages, and for the wider family. It is for these reasons that there are processes, both within the procedures of the family court and independent of them, for helping the parties to reach agreement on the practical consequences of the breakdown of their relationship. It has long been possible for a married couple to make a binding agreement about the financial consequences of their present separation. However, it is not possible for such an agreement to oust the jurisdiction of the court to make orders about their financial arrangements. This was a rule of public policy, because of the public interest in ensuring that proper provision is made for dependent family members: see Hyman v Hyman [1929] AC 601. Any doubt about whether this meant that there was no consideration for the paying partys promise to pay was laid to rest by what is now section 34(1) of the Matrimonial Causes Act 1973. This provides that any provision in a maintenance agreement purporting to restrict any right to apply to a court for an order containing financial arrangements shall be void but that any other financial arrangements contained in the agreement shall not thereby be rendered void or unenforceable and shall, unless they are void or unenforceable for any other reason , be binding on the parties to the agreement. This has since been held to apply to post nuptial agreements for the consequences of a future separation between the parties and (albeit obiter) to ante nuptial agreements: see MacLeod v MacLeod [2008] UKPC 64, [2010] 1 AC 298 and Granatino v Radmacher (formerly Granatino) [2010] UKSC 42, [2011] 1 AC 534. Thus it is impossible for the parties to oust the jurisdiction of the court, but the court also possesses powers to achieve finality (a clean break) in the parties financial arrangements which the parties cannot achieve for themselves. For those reasons, it is now much more common for separating or divorcing spouses to negotiate with a view to embodying their agreed arrangements in a court order than to make a formal separation agreement. If they do this, the fundamental principle is that an agreement to compromise an ancillary relief application does not give rise to a contract enforceable in law. Furthermore, the court does not either automatically or invariably grant the application to give the bargain [the] force of an order. The court conducts an independent assessment to enable it to discharge its statutory function to make such orders as reflect the criteria listed in section 25 of the Matrimonial Causes Act 1973 as amended: see Xydhias v Xydhias [1999] 2 All ER 386, per Thorpe LJ at 394. Although the court still has to exercise its statutory role, it will, of course, be heavily influenced by what the parties themselves have agreed. Section 33A of the Matrimonial Causes Act 1973 as inserted by section 7 of the Matrimonial and Family Proceedings Act 1984 provides that, notwithstanding the preceding provisions of Part II of the Act (which deal with the courts powers and duties in relation to financial provision and property adjustment), on an application for a consent order, the court may, unless it has reason to think that there are other circumstances into which it ought to inquire, make an order in the terms agreed on the basis only of the prescribed information furnished with the application (and see Family Procedure Rules 2010, rule 9.26). This permits the court to make the order in the terms agreed, but does not in any way inhibit its power to make further inquiries or to suggest amendments to the parties. Allied to the courts responsibility to safeguard both the parties and the public interest is the parties duty to make full and frank disclosure of all relevant information to one another and to the court. In Livesey, the House of Lords decided two questions. The first was whether the parties duty of full and frank disclosure continued after they had reached agreement on their financial arrangements. The facts were that on or about 12 August 1982, the parties, who were by then divorced, reached agreement that, in return for the husband transferring to the wife his half share in the jointly owned matrimonial home, the wife would surrender all claims for financial provision for herself. On 18 August, the wife became engaged to marry another man, but did not mention this either to her solicitor or to her former husband. On 19 August, the solicitors issued a joint application for a consent order in the terms agreed and on 2 September the judge made the order. On 22 September, the husband conveyed his half share in the home to the wife. On 24 September, the wife re married. When he learned of this, the husband applied for leave to appeal out of time against the consent order and for the order to be set aside. Lord Brandon of Oakbrook emphasised that unless a court is provided with correct, complete and up to date information on the matters to which, under section 25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that subsection. Hence each party owes a duty to the court to make full and frank disclosure of all material facts to the other party and the court (pp 437 438). This principle applied just as much to the exchanges of information leading up to a consent order as it did to contested hearings. Hence the wife was under a duty to disclose her engagement before the agreement made was put into effect. The second question was whether, in the light of that, the consent order should be set aside. Lord Brandon quoted (at p 442) with approval the judgment of Templeman LJ in Robinson v Robinson (Practice Note) [1982] 1 WLR 786, who said that In the Family Division, as has been said many times, this power to set aside final orders is not limited to cases where fraud or mistake can be alleged. It extends, and has always extended, to cases of material non disclosure. [T]he power to set aside arises when there has been fraud, mistake or material non disclosure as to the facts at the time the order was made (at pp 786 787). Lord Brandon concluded that since the fact which was not disclosed undermined, as it were, the whole basis on which the consent order was agreed, that order should be set aside and the proceedings remitted to the Family Division of the High Court for rehearing (at p 443). Having reached that conclusion, Lord Brandon ended (at pp 445 446) with an emphatic word of warning which has been much quoted in this case: It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases where the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed . Lord Keith and Lord Bridge simply agreed with Lord Brandon. Lord Scarman, however, expressed his firm support for the emphatic word of warning: orders were not to be set aside on the ground of non disclosure if the disclosure would not have made any substantial difference to the order which the court would have made (p 430). Lord Hailsham, too, underscored the warning. Consent orders leading to a clean break were much to be encouraged, and were therefore not lightly to be overthrown (p 430). It must be emphasised, however, that Livesey was not a case of fraud. Lord Brandon rejected the suggestion that the wife had made any misrepresentation to the husband or his solicitors, which had induced him to agree to the order (p 434). Lord Hailsham was also understanding of the wifes position: I do not think she was fully aware (though she should have been) of the vital nature of the information she was withholding (p 430). It is also worth bearing in mind that, until the case reached the House of Lords, there was authority for the proposition that the duty to make full and frank disclosure did not apply where the parties were bargaining at arms length with the help of their solicitors: see Wales v Wadham [1977] 1 WLR 199 and Tommey v Tommey [1983] Fam 15, both disapproved on this point by the House of Lords. This was, therefore, what may now be an unusual case, where there was neither a misrepresentation nor deliberate non disclosure. Family proceedings are different from ordinary civil proceedings in two respects. First, in family proceedings it has been clear, at least since the House of Lords decision in de Lasala v de Lasala [1980] AC 546, that a consent order derives its authority from the court and not from the consent of the parties, whereas in ordinary civil proceedings, a consent order derives its authority from the contract made between the parties: see, eg, Purcell v FC Trigell Ltd [1971] 1 QB 358, CA. Second, in family proceedings there is always a duty of full and frank disclosure, whereas in civil proceedings this is not universal. However, the case of Dietz v Lennig Chemicals Ltd [1969] 1 AC 170 is an interesting example of a civil case which has some of the characteristics of a family case. This was a claim brought against her deceased husbands employers by the widow, on behalf of her husbands estate and on behalf of herself and their child under the Fatal Accidents Acts. It was settled for a global sum of 10,000 but, as the child was an infant, the settlement had to be approved by the court. Between the summons for the courts approval and the courts approval, the widow remarried. Thus she was no longer a widow as she was described in the title to the action and in the trust deed giving effect to the settlement. The House of Lords held that the settlement agreement was not binding without the approval of the court and that the employers were entitled to have the consent order set aside as their consent had been induced by an innocent misrepresentation that the claimant was a widow at the date of the order. Analysis It follows that the majority in the Court of Appeal in this case were correct to say that matrimonial cases were different from ordinary civil cases in that the binding effect of a settlement embodied in a consent order stems from the courts order and not from the prior agreement of the parties. It does not, however, follow that the parties agreement is not a sine qua non of a consent order. Quite the reverse: the court cannot make a consent order without the valid consent of the parties. If there is a reason which vitiates a partys consent, then there may also be good reason to set aside the consent order. The only question is whether the court has any choice in the matter. This may well depend upon the nature of the vitiating factor. We know from Dietz that innocent misrepresentation as to a material fact is a vitiating factor. The court set aside the order because the misrepresentation had induced the defendants to agree to the settlement. We know from Livesey that in matrimonial cases innocent non disclosure of a material fact is a vitiating factor. The court set aside the order because the undisclosed fact undermined the whole basis on which the order was made. Although not strictly applicable in matrimonial cases, the analogy of the remedies for misrepresentation and non disclosure in contract may be instructive. At common law, the general effect of any misrepresentation, whether fraudulent, negligent or innocent, or of non disclosure where there was a duty to disclose, was to render a contract voidable at the instance of a party who had thereby been induced to enter into it. This has now been modified by the Misrepresentation Act 1967, which empowers the court to impose an award of damages in lieu of rescission for negligent or innocent misrepresentation. This does not, however, apply in cases of fraudulent misrepresentation, where there is no power to impose an award of damages in lieu. The victim always has the right to rescind unless one of the general bars to rescission has arisen. There is no need for us to decide in this case whether the greater flexibility which the court now has in cases of innocent or negligent misrepresentation in contract should also apply to innocent or negligent misrepresentation or non disclosure in consent orders whether in civil or in family cases. It is clear from Dietz and Livesey that the misrepresentation or non disclosure must be material to the decision that the court made at the time. But this is a case of fraud. It would be extraordinary if the victim of a fraudulent misrepresentation, which had led her to compromise her claim to financial remedies in a matrimonial case, were in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim. As was held in Smith v Kay (1859) VII HLC 749, a party who has practised deception with a view to a particular end, which has been attained by it, cannot be allowed to deny its materiality. Furthermore, the court is in no position to protect the victim from the deception, or to conduct its statutory duties properly, because the court too has been deceived. In my view, Briggs LJ was correct in the first of the three reasons he gave for setting aside the order. The only exception is where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it known then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it. But in my view, the burden of satisfying the court of that must lie with the perpetrator of the fraud. It was wrong in this case to place upon the victim the burden of showing that it would have made a difference. In my view, the second and third reasons given by Briggs LJ for setting aside the order flowed from the first. Sir Hugh Bennett had been clear that the misrepresentation and non disclosure as to the husbands plans for the company was highly material to the decision made in July 2012. Indeed, it could not have been anything else. It had coloured both valuers approach to the valuation of the husbands shareholding. That in turn had coloured the wifes approach to the proportionality of the balance struck between her present share in the liquid assets and her future share in the value of the husbands shareholding. Sir Hugh may have been right to say, with the benefit of hindsight, that had he known the truth then he would have waited to see what transpired. But in doing so, he would have had to bear in mind the husbands ability to manipulate the timing and manner of any offer to the public in a way which suited him best. Be that as it may, it is enough that Sir Hugh would not have made the order he did when he did had the truth been known. It being clear that the order should have been set aside, it is also clear that Sir Hugh should not have gone on to re make the decision then and there on the basis of the evidence then before him. The wife was entitled to re open the case, when she might seek to negotiate a new settlement or a rehearing of her claims when all the relevant facts were known. Thus, in my view, Briggs LJ was also correct in the third reason that he gave for allowing the appeal. The wife had been deprived of a full and fair hearing of her claims. That matter was not before the judge in April 2013. The application and cross application before him related to whether or not the order made on 19 July 2012 should be perfected. There was no need for the wifes counsel to cross examine the husband, as the documents he had now disclosed revealed that he had deceived the court. It follows that, in my view, this appeal should be allowed; the consent order made on 19 July should not be perfected; and the matter should return to the Family Division of the High Court for further directions. Procedural issues The fact that this order had not yet been perfected makes no difference. The principles applicable in this sort of case are the same whether or not the order agreed upon by the parties and the court has been sealed. However, the fact that the order had not been sealed means that in this particular case the procedural problem about how such challenges to the final order of a court in family proceedings can be brought does not arise. The trial judge was able to revisit his order: see In re L and another (Children) (Preliminary Finding: Power to Reverse) [2013] UKSC 8; [2013] 1 WLR 634. This and other procedural issues do, however, arise in the case of Gohil v Gohil [2015] UKSC 61, which was heard at the same time as this case. In L v L [2006] EWHC 956 (Fam), Munby J described this problem as a procedural quagmire. There are three possible routes: (i) a fresh action to set aside the order; (ii) an appeal against the order; or (iii) an application to a judge at first instance in the matrimonial proceedings. The difference is that permission is required for an appeal, and it may be required long after the time limit for appealing has expired, whereas the other two routes do not require permission. A further difference is that an appeal is not the most suitable vehicle for hearing evidence and resolving the factual issues which will often, although not invariably, arise on an application to set aside. In Livesey, the matter was dealt with by way of permission to appeal out of time. But that was a simple case where the facts were clear. A fresh action would be the normal route in ordinary civil proceedings to challenge a final judgment on account of fraud: see Jonesco v Beard [1930] AC 298. This route is also available in matrimonial proceedings: see de Lasala v de Lasala [1980] AC 546. Indeed, in that case, the Judicial Committee of the Privy Council held that, there being no power to vary the matrimonial financial order which had been made by consent, [w]here a party to an action seeks to challenge, on the ground that it was obtained by fraud or mistake, a judgment or order that finally disposes of the issues raised between the parties, the only ways of doing it that are open to him are by appeal from the judgment or order to a higher court or by bringing a fresh action to set it aside (at 561). However, it has not been clear whether in matrimonial proceedings such a fresh action can be brought by making an application in the matrimonial proceedings themselves or whether an entirely separate application has to be brought. In Gohil v Gohil (No 2) [2014] EWCA Civ 274, [2015] Fam 89, the wife had issued a summons in the matrimonial proceedings rather than a separate application, but the Court of Appeal approached the case as if Moylan J had been hearing a fresh application to set aside for material non disclosure (para 61). In my view there is jurisdiction to entertain such an application within the matrimonial proceedings. Unlike ordinary civil proceedings, it has always been the case that the divorce court retains jurisdiction over a marriage even after it has been dissolved. While it is now possible for the court to achieve a clean break between the parties, the issue raised by an application to set aside for fraud, mistake or material non disclosure is whether it was consistent with the courts statutory duties so to do. The most recent survey of the extensive jurisprudence in this field is by Munby P in CS v ACS and BH [2015] EWHC 1005 (Fam). In that case, the issue was whether an appeal was the only route to set aside a consent order made in matrimonial proceedings. He refers to the recent steps to remedy matters, in section 31F of the Matrimonial and Family Proceedings Act 1984, inserted by the Crime and Courts Act 2013, when setting up the family court. Section 31F(3) provides that Every judgment or order of the family court is, except as provided by this or any other Act or by rules of court, final and conclusive between the parties (this provision is derived from the County Courts Act 1984, section 70). But section 31F(6) gives the family court power to vary, suspend, rescind or revive any order made by it. Rule 4.1(6) of the Family Procedure Rules provides that A power of the court under these rules to make an order includes a power to vary or revoke the order. On the face of it, as the learned editors of The Family Court Practice 2015 point out (p 1299), this is a very wide power which could cut across some other provisions, for example those prohibiting variation of lump sum and property adjustment orders. Clearly, as Munby P observed, the power, although general is not unbounded (para 11). However, it does give the family court power to entertain an application to set aside a final order in financial remedy proceedings on the well established principles with which we are concerned in this case. In CS v ACS and BH, Munby J held that the statement in Practice Direction 30A, which supplements the provisions for appeals in Part 30 the Family Procedure Rules 2010, at para 14.1 that An appeal is the only way in which a consent order can be challenged is ultra vires. The Practice Direction could not purport to forbid a litigant to have recourse to a form of remedy long recognised by the common law, let alone to a remedy expressly conferred by both statute (section 31F(6) of the 1984 Act) and rule (FPR 4.1(6)) (para 36). It is clear, therefore, that an application of this sort can be made either by way of an appeal or by way of an application to a first instance judge. There remain difficult issues as to how such an application should be made, whether within or without the original proceedings, and whether it would be appropriate for the rules or a practice direction to specify criteria for choosing between an appeal and an application at first instance. A Working Party of the Family Procedure Rule Committee is currently considering the whole issue. In that connection I whole heartedly endorse the observations of Lord Wilson in para 18 of his judgment in Gohil v Gohil [2015] UKSC 61. Finally, however, it should be emphasised that the fact that there has been misrepresentation or non disclosure justifying the setting aside of an order does not mean that the renewed financial remedy proceedings must necessarily start from scratch. Much may remain uncontentious. It may be possible to isolate the issues to which the misrepresentation or non disclosure relates and deal only with those. A good example of this is Kingdon v Kingdon [2010] EWCA Civ 1251, [2011] 1 FLR 1409, where all the disclosed assets had been divided equally between the parties but the husband had concealed some shares which he had later sold at a considerable profit. The court left the rest of the order undisturbed but ordered a further lump sum to reflect the extent of the wifes claim to that profit. This court recently emphasised in Vince v Wyatt (Nos 1 and 2) [2015] UKSC 14, [2015] 1 WLR 1228 the need for active case management of financial remedy proceedings, which includes promptly identifying the issues, isolating those which need full investigation and tailoring future procedure accordingly (para 29). In other words, there is enormous flexibility to enable the procedure to fit the case. This applies just as much to cases of this sort as it does to any other. For completeness, I should add that we have heard no argument about the correctness of the judges view that a tapering award might be appropriate where what had been a matrimonial asset remained in the hands of one of the parties where it would become less and less of a matrimonial asset. There is obviously room for more than one view on this and so it would be inappropriate to comment further.

This appeal considers the impact of fraudulent non disclosure on a financial settlement agreed between a husband and wife on divorce, especially one embodied in a court order. The parties were married in 1993 and separated in 2010. They have three children, one of whom has severe autism and will require care from Mrs Sharland throughout his life. Mr Sharland is an entrepreneur who has a substantial shareholding in a software business, AppSense Holdings Ltd, which he developed. In the financial proceedings between the parties the value and manner of distribution of this shareholding was the principal matter in dispute. Both parties instructed valuers, who produced valuations on the basis that there were no plans for an Initial Public Offering (IPO) of the company. In the course of the trial in the High Court in July 2012, after Mr Sharland gave evidence confirming that there was no IPO on the cards today, the parties reached an settlement by which Mrs Sharland agreed to receive 30% of the net proceeds of sale of the AppSense shares whenever that took place, together with other assets. The judge approved the agreement and a draft consent order was drawn up. Before it was sealed, however, Mrs Sharland became aware that AppSense was being actively prepared for an IPO which was expected to value the company at a figure far in excess of the valuations prepared for the hearing. Mrs Sharland immediately invited the judge not to seal the consent order and applied for the hearing to be resumed. At the hearing of her application in April 2013 the judge found that Mr Sharlands earlier evidence had been dishonest and, had he disclosed the IPO plans, the court would have adjourned the financial proceedings to establish whether it was going ahead. However, by the time of the hearing, the IPO had not taken place and an IPO was not now in prospect. The judge declined to set aside the consent order on the ground that he would not have made a substantially different order in the financial proceedings, applying the decision of the House of Lords in Livesey (formerly Jenkins) v Jenkins [1985] AC 424. The Court of Appeal upheld the judges order (Briggs LJ dissenting) and Mrs Sharland appealed to the Supreme Court. The Supreme Court unanimously allows Mrs Sharlands appeal. The consent order will not be sealed and Mrs Sharlands application for financial relief will return to the Family Division of the High Court for further directions. Lady Hale gives the only judgment. It is in the interests of all members of a family that matrimonial claims should be settled by agreement rather than adversarial battles in court [17]. Such an agreement cannot oust the power of the court to make orders for financial arrangements [18] and does not give rise to a contract enforceable in law [19], but the court will make an order in the terms agreed unless it has reason to think there are circumstances into which it ought to inquire [20]. Allied to this responsibility of the court is the parties duty to make full and frank disclosure of all relevant information to one another and to the court [21]. Family proceedings differ from ordinary civil proceedings in two respects: a consent order derives its authority from the court and not from the consent of the parties and the duty of full and frank disclosure always arises [27]. The consent of the parties must be valid. If there is a reason which vitiates a partys consent there may also be good reason for the court to set aside a consent order. Whether the court is bound to do so is the question arising on the appeal [29]. It is not necessary to decide in this case whether the greater flexibility which the court now has in cases of innocent or negligent misrepresentation in contract law, restricting a victims right to rescind the agreement, should also apply to such misrepresentations or non disclosure in consent orders in civil or family cases. The present case is one of fraud. It would be extraordinary if the victim of a fraudulent misrepresentation in a matrimonial case was in a worse position than the victim of a fraudulent misrepresentation in an ordinary contract case, including a contract to settle a civil claim. Briggs LJ in the Court of Appeal was correct to apply the general principle that fraud unravels all and should lead to the setting aside of a consent order procured by fraud [32]. The only exception is where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it know then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it. The burden of establishing this must lie with the perpetrator of the fraud [33]. On the facts of this case it is clear that the judge would not have made the order he did, when he did, in the absence of Mr Sharlands fraud, and the consent order should have been set aside. The judge had misinterpreted Livesey, which had drawn a distinction between triviality and materiality at the date of the order and not at some later date [34]. He had also been wrong to deprive Mrs Sharland of a full and fair hearing of her claims by re making his decision at the hearing of the application on the basis of the evidence then before him [35]. The consent order should not be sealed and the matter should return to the Family Division for further directions [36]. The final part of the judgment discusses the procedure to be followed by parties seeking to challenge the final order of a court in family proceedings. The court retains jurisdiction over a marriage even after it has been dissolved and s 31F(6) Matrimonial and Family Proceedings Act 1984 gives the family court power to vary, suspend, rescind or revive any order by it. It is open to the parties either to make a fresh application or to appeal against the consent order. Lady Hale endorses the observations of Lord Wilson in the judgment in Gohil v Gohil [2015] UKSC 61 on the question of how such applications should be made, while emphasising that the renewed financial remedy proceedings need not start from scratch and the court may be able to isolate the issues to which the misrepresentation or non disclosure relates [37 43].

By notice dated 3 November 2010 the Secretary of State for Work and Pensions, in accordance with regulations, suspended payment to Cameron Mathieson, then a boy aged three, of Disability Living Allowance (DLA) on the ground that he had by then been an in patient in an NHS hospital for more than 84 days (12 weeks). Did the Secretary of State thereby violate Camerons human rights? Proceedings On 10 January 2012 the First tier Tribunal (Social Security and Child Support) dismissed Camerons appeal against the Secretary of States decision to suspend payment of the DLA. On 15 January 2013 the Upper Tribunal (Administrative Appeals Chamber) determined a further appeal which Cameron had brought and with which, following his sad death on 12 October 2012, his father, Mr Craig Mathieson, had proceeded pursuant to an appointment under regulation 30(1) of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968). The Upper Tribunal set aside the decision of the First tier Tribunal on the ground of an error of law but, in the event, it likewise dismissed the appeal. On 5 February 2014, by a judgment delivered by Laws LJ with which Ryder and Underhill LJJ agreed, the Court of Appeal dismissed Mr Mathiesons further appeal: [2014] EWCA Civ 286. Mr Mathieson now appeals to the Supreme Court. Cameron was born on 19 June 2007. He lived in Warrington with his parents, together with his sister and two brothers who, at the time of his birth, were aged about ten, nine and two. At his birth, part of his bowel had to be removed. Shortly afterwards he was diagnosed with cystic fibrosis and, later, also with Duchenne muscular dystrophy. The conjunction of both conditions in Cameron was one of profound misfortune and grim prognosis which at that time befell only one other child in the UK. The muscular dystrophy precipitated severe developmental delay. One area of it was in Camerons ability to communicate; so Mr Mathieson learnt the signs and symbols of Makaton in order better to communicate with him. Other conditions, including a clotting disorder and deep vein thrombosis in his left leg, made his needs even more complex. Mr and Mrs Mathieson had to learn how to administer chest physiotherapy to him, entailing chest percussion and postural drainage, for 20 minutes twice a day. Thereafter they had to prepare and administer nebulised antibiotics to him through special equipment, as well as a host of other medications and supplements. Mr and Mrs Mathieson found that Camerons need for exceptional and sophisticated care and attention, together with the ordinary care needs of the three older children, required them to relinquish their business and, once they had spent their savings, to fall back on state benefits. The First tier Tribunal described Cameron as having the most severe and profound disabilities likely to come before a tribunal and added that he was blessed with loving and caring parents who were utterly devoted to his care. On 4 July 2010 Cameron, who was showing symptoms of chronic bowel obstruction, was admitted to Ward C2 in the specialist respiratory unit at Alder Hey Hospital, Liverpool. He was to remain there until 4 August 2011. The doctors considered that he had needs for an even more complex package of care, including intravenous feeding, which could not easily be set up for delivery to him by Mr and Mrs Mathieson at home. It is important to note the role played by Mr and Mrs Mathieson at Alder Hey during the 13 months of Camerons treatment there. In this connection Nurse Burrows, an advanced nurse specialist attached to the cystic fibrosis team at the unit, wrote a report dated 28 October 2010, which, as the fact finder, the First tier Tribunal unsurprisingly accepted as accurate. The nurse reported that: (a) Camerons care needs far exceeded those of any other child in the clinic; the clinic relied heavily on Mr and Mrs Mathieson to undertake his daily care in the clinic; (c) one or other of Mr and Mrs Mathieson was resident in the hospital at all times; they remain[ed] his primary caregivers; the clinic relied on them to monitor his condition daily and on several occasions they were the first to notice deterioration in it; they participated in all discussions and decisions about his care; (b) (d) (e) (f) (g) (h) (i) (j) as they had done at home, they administered chest physiotherapy to Cameron at the clinic twice a day and thereafter the nebulised antibiotics; they prepared and administered his feeding by nasogastric tube; they administered warfarin to him in order to combat the clotting; and they changed his stoma bags up to eight times a day. Mr Mathieson supplemented the evidence of the nurse. He said that Ward C2 had 13 beds for children in individual rooms; that most of the children there needed constant care; that the nurses were capable and dedicated but that there were never more than three of them at any one time; that parental care of the children was recognised as essential; that the result of the need for him or Mrs Mathieson to be at the hospital meant that during those 13 months they in effect spent no time together; that each of them had at first made numerous journeys from Warrington to Alder Hey (25 miles) and back in the family car but had been constrained to reduce them because of the cost of petrol; that, until it became too expensive, they had also regularly brought the older children to see Cameron at weekends; that, on days when he was well enough and with the encouragement of the clinic, they had taken Cameron back to his nursery school in Warrington for a short time and had then returned him to Alder Hey (ie another 50 mile journey); that, although he and Mrs Mathieson had been able to sleep free of charge either on camp beds alongside Cameron or in the Ronald McDonald house for parents at Alder Hey, they had incurred further expenditure in respect of food and drink for themselves, of parking and of Camerons laundry; and that in his estimate (which the Upper Tribunal accepted) the extra expense caused by the need for Cameron to be moved to Alder Hey had been about 8,000 over the 13 months. DLA was introduced by the Disability Living Allowance and Disability Working Allowance Act 1991 (the 1991 Act). The favoured mechanism was to insert sections about it into the Social Security Act 1975 (the 1975 Act). One section, namely section 37ZA, provided, at subsection (1), that DLA was to consist of a care component and a mobility component. Prior to 1991 the benefit analogous to the care component had been the attendance allowance, which, by section 2(1) of the 1991 Act, was from then onwards restricted to those aged at least 65; and the benefit analogous to the mobility component had been the mobility allowance, which, by section 2(3) of the 1991 Act, was abolished. In 1992 the 1975 Act was repealed and the provisions for DLA were incorporated into sections 71 to 76 of the Social Security Contributions and Benefits Act 1992 (the Benefits Act). These sections remain in force. Under Part 4 of the Welfare Reform Act 2012 (the 2012 Act), DLA is to be replaced by the personal independence payment; and, once the scheme for making such payments is fully operable, the provision in section 90 of the 2012 Act for the repeal of sections 71 to 76 of the Benefits Act will come into force. To date, however, the personal independence payment has been introduced only for persons aged at least 16: regulation 5 of the Personal Independence Payment (Transitional Provisions) Regulation (SI 2013/387). Section 72 of the Benefits Act governs entitlement to the care component. Camerons entitlement derived from the second and third, labelled (b) and (c), of the three conditions set in subsection (1), which requires the person to be so severely disabled physically or mentally that (b) by day, he requires from another person frequent attention throughout the day in connection with his bodily functions and (c) at night, he requires from another person prolonged or repeated attention in connection with his bodily functions. In Cockburn v Chief Adjudication Officer; Secretary of State for Social Security v Fairey (aka Halliday) [1997] 1 WLR 799 the House of Lords held that the phrase bodily functions relates primarily to activities which the fit person normally performs for himself and which involve a high degree of physical intimacy; and Lord Hope of Craighead, at p 821, offered examples, namely getting into and out of bed, eating, drinking, bathing, washing hair and going to the lavatory. Subsection (1A) of section 72 of the Benefits Act adds that, in relation to a person under the age of 16, the conditions in subsection (1)(b) and (c) are satisfied only if his requirements are substantially in excess of the normal requirements of persons of his age. Section 72(3) and (4) of the Benefits Act specifies three rates of the care component the highest rate, the middle rate, and the lowest rate and provides that a person who satisfies the conditions set in both (b) and (c) of subsection (1) is entitled to the highest rate. Section 73 of the Benefits Act governs entitlement to the mobility component. Camerons entitlement derived from the conditions set in subsection (1)(a), which requires the person to be aged at least three and to be suffering from physical disablement such that he is either unable to walk or virtually unable to do so. Section 73(10) and (11) specifies two rates of the mobility component the higher rate and the lower rate and provides that a person who satisfies the conditions set in subsection (1)(a) is entitled to the higher rate. Section 73 of the Social Security Administration Act 1992 (the Administration Act) is entitled Overlapping benefits general. Section 73(1)(b) states that regulations may provide for adjusting benefit, including DLA, payable to a person who is undergoing medical or other treatment as an in patient in a hospital. The precursor to section 73(1)(b) was section 85(1) of the 1975 Act, which was in similar terms and was entitled Overlapping benefits. The regulations in issue in this appeal are regulations 8, 10, 12A and 12B of the Social Security (Disability Living Allowance) Regulations 1991 (SI 1991/2890) (the 1991 Regulations). They were made pursuant, in particular, to section 85(1) of the 1975 Act and to section 5(1) of the 1991 Act, following Parliaments affirmative resolution pursuant to section 12(1) of the later Act. Regulation 8(1) provides that, subject to regulation 10, a person is not entitled to receive such DLA as is referable to the care component for any period during which he is maintained free of charge while undergoing medical or other treatment as an in patient in an NHS hospital. But para 2 of regulation 10 provides that, in the case of a person aged under 16, regulation 8 shall not apply for the first 84 days of any such period; and para 1 provides that, in the case of any other person, regulation 8 shall not apply for the first 28 days of any such period. Regulations 12A and 12B make provision identical to regulations 8 and 10 in respect of receipt of such DLA as is referable to the mobility component. The regulations in force prior to 1991 in relation to payment of attendance allowance and mobility allowance had also provided for its suspension once the recipient had been in hospital for more than 28 days. But they had made no distinction between adults and children: the extension for children aged under 16 from 28 days to 84 days was therefore introduced in the 1991 Regulations. Camerons DLA It is important to note that, notwithstanding that he was a child, it was Cameron, not either or both of his parents, who was entitled to DLA. There were changes, which it is unnecessary to record, in the rates of his entitlement. By 3 November 2010 the Secretary of State had decided that he was entitled to the highest rate of the care component and to the higher rate of the mobility component. But on 3 November 2010 he also decided to suspend payment of both components with effect from 6 October 2010 on the ground that by then Cameron had been an in patient at Alder Hey for more than 84 days. By 6 October he had in fact been an in patient there for 94 days. The DLA had of course been payable to Mr Mathieson on Camerons behalf. As such, it had no doubt to be deployed for Camerons benefit but otherwise it had been deployable without restriction, whether in facilitating the performance of his bodily functions or otherwise. It had been a valuable component of the familys income. Mr Mathiesons estimate (accepted by the Upper Tribunal) was that its suspension between October 2010 and August 2011 caused the family to suffer a loss of about 7,000. His evidence was that, in order to help meet the shortfall, he had to borrow 4,000 from friends. The Secretary of State is concerned to place the 84 day rule referable to DLA in the context of other state benefits payable to families generally and to the Mathieson family in particular. Prior to Camerons removal to Alder Hey, the family received child benefit for all four children, child tax credit, carers allowance and income support as well, apparently, as housing benefit and council tax benefit. Even after the first 84 days of Camerons stay there, the familys child benefit continued to be payable in full, even the part referable to him, because Mr and Mrs Mathieson were still regularly [incurring] expenditure in respect of him: section 143(4) of the Benefits Act. Their child tax credit included an extra element because Cameron was in receipt of DLA and a further element because its care component was at the highest rate. But neither element fell to be withdrawn when, pursuant to the 84 day rule, DLA was suspended: regulation 8(3)(b) of the Child Tax Credit Regulations 2002 (SI 2002/2007). It was a condition of Mr Mathiesons entitlement to the carers allowance that Cameron should be in receipt of the care component of DLA at either the highest or the middle rate; and the carers allowance, as such, did indeed fall away upon suspension of his DLA. But it made little difference to Mr and Mrs Mathieson because their income support was thereupon increased proportionately. Thus, argues the Secretary of State, considerable benefits continued to be payable to the family, including in respect of Cameron, even after his 84th day at Alder Hey. But, with respect, to where does his argument lead? Prior to Camerons removal to Alder Hey income support, which was means tested, brought the familys economy up to, but not beyond, subsistence level. The Secretary of State concedes that there would have been no surplus available to meet such extra expenditure as the family might incur as a result of Camerons removal. The fact that a number of benefits continued to be paid, even after his 84th day at Alder Hey, does not address the difficulty that, when the family was facing an increase in its expenditure of about 8,000, application of the 84 day rule caused it to suffer a decrease in its income of about 7,000. Article 14 Article 14 of the European Convention on Human Rights (the Convention), entitled Prohibition of discrimination, provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth, or other status. It is enjoyment only of the rights and freedoms set out in the Convention which the article requires to be secured without discrimination on any of the identified grounds. The framers of the article did not wish the prohibition of discrimination to extend beyond the four corners of the other articles. A free standing prohibition of discrimination in the enjoyment of any right set forth by law and indeed generally, on any of the identified grounds, was introduced much later in the Twelfth Protocol; but the UK has not signed it. (a) Scope In his invocation of article 14, Mr Mathieson therefore needs first to establish a link with one or more of the Conventions other articles. He alleges a link with either or both of Camerons rights to the peaceful enjoyment of his possessions under article 1 of Protocol 1 (A1P1) and to respect for his family life under article 8. For the purposes of article 14, Mr Mathieson does not need to establish that the suspension of DLA amounted to a violation of Camerons rights under either of those articles: otherwise article 14 would be redundant. He does not even need to establish that it amounted to an interference with his rights under either of them. He needs to establish only that the suspension is linked to, or (as it is usually described) within the scope or ambit of, one or other of them. How can a public authoritys action be within the scope of an article without amounting to an interference with rights under it? The case of Carson v United Kingdom (2010) 51 EHRR 369 provides an example. There the Grand Chamber of the European Court of Human Rights (the ECtHR) explained at paras 63 65 that A1P1 did not require a contracting state to establish a retirement pension scheme but that, if it did so, the scheme fell within the scope of A1P1 and so had to be administered without discrimination on any of the grounds identified in article 14. The case of Hode and Abdi v United Kingdom (2012) 56 EHRR 960 provides another example. There the ECtHR explained at para 43 that article 8 did not require the state to grant admission to a refugees non national spouse but that, if it introduced a scheme for doing so, it fell within the scope of article 8 and so had to be administered without discrimination on any of the identified grounds. The Secretary of State concedes that the provision of DLA falls within the scope of A1P1 but disputes that it falls within the scope of article 8. So I will proceed at first on the basis of the concession; later, and only if necessary, I will address the dispute. (b) Status On which of the grounds of discrimination prohibited by article 14 does Mr Mathieson rely? He relies on the concluding reference to other status. The premise of his argument is that payment of the care component of DLA is expressly limited, and that the mobility component is in effect limited, to the severely disabled: see sections 72 and 73 of the Benefits Act. Mr Mathieson argues that Camerons status on 6 October 2010 was that of a severely disabled child who was in need of lengthy in patient hospital treatment and that, in comparison with a severely disabled child who was not in need of lengthy in patient hospital treatment, application to Cameron of the 84 day rule discriminated against him contrary to article 14. Any such comparator would need to be a severely disabled child because otherwise he would not be entitled to DLA at all. But disability has degrees of severity and the suggested comparator could presumably be a child with a disability of severity either equal to, or indeed lesser than, that of the child in need of lengthy in patient hospital treatment. At first sight Mr Mathiesons contention appears contrived. Does it pass muster? The Upper Tribunal concluded that it did. Before the Court of Appeal the Secretary of State, without conceding that the Upper Tribunals conclusion was correct, did not actively contest it; and so, not without some misgivings, that court proceeded on the basis that, had there been discrimination, it would have been on the ground of the status identified by Mr Mathieson. In this court, however, the Secretary of State actively contests that Cameron had any status on which the decision to suspend his DLA was based. In AL (Serbia) v Secretary of State for the Home Department [2008] UKHL 42, [2008] 1 WLR 1434, Lady Hale addressed at para 26 the list of prohibited grounds in article 14 and suggested that [i]n general, the list concentrates on personal characteristics which the complainant did not choose and either cannot or should not be expected to change. In R (RJM) v Secretary of State for Work and Pensions [2008] UKHL 63, [2009] AC 311, Lord Neuberger of Abbotsbury expanded at para 45 upon Lady Hales analysis of the nature of the prohibited grounds by suggesting that they generally required concentration on what somebody is, rather than what he is doing or what is being done to him. But, by its very decision in the RJM case, namely that the appellants homelessness conferred on him a status prohibited by article 14, the House of Lords demonstrated that the prohibited grounds extended well beyond innate characteristics. The House held that they included not only the suspect grounds, or, to use a less ambiguous word, the core grounds, which, according to Lord Walker of Gestingthorpe at para 5, included gender, sexual orientation, pigmentation of skin and congenital disabilities. Lord Walker offered the simile of a series of concentric circles and suggested that these core grounds fell within the circle of the narrowest diameter. But then there was a wider circle which included acquired characteristics, such as nationality, language, religion and politics. Indeed, so Lord Walker suggested, there was an even wider circle which included, for example, the homeless appellant then before the House; which also included the complainant in the Carson case, who had chosen a particular country of residence; and which even included the complainant in Sidabras and Dziautas v Lithuania (2004) 42 EHRR 104, who had previously been employed by the KGB. The value of Lord Walkers simile lies in what he then added: The more peripheral or debateable any suggested personal characteristic is, the less likely it is to come within the most sensitive area where discrimination is particularly difficult to justify. The RJM case in the House of Lords was soon followed by the Clift case in the ECtHR. Mr Clift had been sentenced in England to a term of imprisonment of 18 years for crimes including attempted murder. The Parole Board recommended his release on licence once he had served half of his sentence. The Secretary of State rejected its recommendation. Had the recommendation been made in relation to a prisoner serving a sentence of a term of less than 15 years or a life sentence, the Secretary of State would have had no power to reject it. Mr Clift alleged that in such circumstances the Secretary of States rejection of the Boards recommendation discriminated against him, contrary to article 14, in the enjoyment of his right to liberty under article 5 of the Convention. He contended that the discrimination was on the ground of his status as a person sentenced to a term of at least 15 years. In the domestic courts his contention had failed: R (Clift) v Secretary of State for the Home Department [2006] UKHL 54, [2007] 1 AC 484. The House of Lords had articulated an inhibition, less keenly felt by this court nowadays, about extending the meaning of convention terms beyond what the ECtHR had authorised: see Lord Bingham of Cornhill at para 28 and also Lord Hope at para 49. In the ECtHR, however, Mr Clifts claim to have had a status within in the meaning of article 14 (and to have suffered discrimination on that ground) prevailed: Clift v United Kingdom (Application No 7205/07), The Times, 21 July 2010. The court said: 60 The question whether there is a difference of treatment based on a personal or identifiable characteristic is to be assessed taking into consideration all of the circumstances of the case and bearing in mind that the aim of the Convention is to guarantee not rights that are theoretical or illusory but rights that are practical and effective (emphasis supplied). It is clear that, if the alleged discrimination falls within the scope of a Convention right, the ECtHR is reluctant to conclude that nevertheless the applicant has no relevant status, with the result that the inquiry into discrimination cannot proceed. Decisions both in our courts and in the ECtHR therefore combine to lead me to the confident conclusion that, as a severely disabled child in need of lengthy in patient hospital treatment, Cameron had a status falling within the grounds of discrimination prohibited by article 14. Disability is a prohibited ground (Burnip v Birmingham City Council [2012] EWCA Civ 629, [2013] PTSR 117). Why should discrimination (if such it be) between disabled persons with different needs engage article 14 any less than discrimination between a disabled person and an able bodied person? Whether, as in Camerons case, the person is born disabled or whether he becomes disabled, his disability is or becomes innate; and insofar as in the RJM case Lord Walker seems to have had three circles in mind, Camerons case falls either within the narrowest of them or at least within the one in the middle. (c) Justification In Stec v United Kingdom (2006) 43 EHRR 1017 the ECtHR determined challenges to social security provisions which linked compensation for the financial effects of an accident at work to the different state retirement ages for men and women. So the argument was that, taken with A1P1, article 14 had been violated by discrimination on ground of sex. The Grand Chamber observed at para 51 that [a] difference of treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised. It is worthwhile to note, in parenthesis, a terminological difference between the ECtHR and the House of Lords. In the RJM case, cited at para 21 above, Lord Neuberger considered at para 22, as did Lord Walker at para 5 and Lord Mance at para 7, whether the discrimination can be justified. I confess that I prefer the approach of the ECtHR. If justification is established, the result is not justified discrimination. For justification will negative the existence of discrimination at all. In the Stec case the Grand Chamber proceeded at para 52 to address the margin of appreciation which it should afford to the UK in relation to its social security provisions and held that it should generally respect its policy choices in that area unless they were manifestly without reasonable foundation; by application of that principle, it concluded that the challenges failed. Of course it does not necessarily follow that the domestic judiciary should afford a margin of equal generosity to the domestic legislature: In re G (Adoption: Unmarried Couple) [2008] UKHL 38, [2009] AC 173, para 37 (Lord Hoffmann). Indeed this court has at last helpfully recognised that the very concept of a margin of appreciation is inapt to describe the measure of respect which, albeit of differing width, will always be due from the UK judiciary to the UK legislature: In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, [2015] 2 WLR 481, paras 44 and 54 (Lord Mance). Nevertheless, in the RJM case, Lord Neuberger cited para 52 of the judgment in the Stec case and concluded at para 56 that the provision of state benefits to the homeless was an area where the court should be very slow to substitute its view for that of the executive. In Humphreys v Revenue and Customs Comrs [2012] UKSC 18, [2012] 1 WLR 1545, this court went further. There a father in receipt of means tested benefits who cared for his children for three days each week challenged a rule that child tax credit should be paid entirely to their mother because she had the main responsibility for them. He alleged indirect discrimination on grounds of sex because the rule prejudiced more fathers than mothers. Having considered the Stec case and the RJM case, Lady Hale (with whose judgment all other members of the court agreed) held at paras 19 and 20 that the court should determine the fathers challenge by reference to whether the rule was manifestly without reasonable foundation; but she added at para 22 that it did not follow that the rule should escape careful scrutiny. Applying those principles, she rejected his challenge. She considered that the rule makers had been entitled to conclude that some of a childs needs, such as for clothes and shoes, would be more likely to be met if the entire benefit was paid to the primary carer: para 29; and that there were costly administrative complexities in any apportionment of some of the benefit to the secondary carer while he remained in receipt of means tested benefits: para 30. It is noteworthy that, in a table of policy issues which Lady Hale annexed to her judgment, the makers of that rule, when resolving not to amend it so as to permit the benefit to be shared, had carefully set out the rival advantages and disadvantages of so doing. One of the rule makers arguments in the Humphreys case, as in the present case, was that a bright line rule has intrinsic merits in particular in the saving of administrative costs. The courts accept this argument but only within reason. In R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] UKHL 15, [2008] 1 AC 1312, Lord Bingham accepted at para 33 that hard cases which fell on the wrong side of a general rule should not invalidate it provided that it was beneficial overall. And when the Carson case had been considered, with another case, by the House of Lords, in R (Carson) v Secretary of State for Work and Pensions [2005] UKHL 37, [2006] 1 AC 173, Lord Hoffmann had observed at para 41 that a line had to be drawn somewhere. He had added: All that is necessary is that it should reflect a difference between the substantial majority of the people on either side of the line. The Secretary of State has placed in evidence an extract from Hansard (HC Debates), 25 March 2003, col 26WH, in which Ms Maria Eagle, the Parliamentary Under Secretary of State for Work and Pensions, responded to a complaint about the suspension of payment of DLA to an adult in hospital after 28 days. She pointed out that the suspension was pursuant to the rule against overlapping provision. As I have explained, the 1991 Regulations were indeed made pursuant to section 85 of the 1975 Act, entitled Overlapping benefits. Ms Eagle continued as follows, at cols 27WH 28WH: All in patients disability related needs are met by the national health service. That is where the rule against overlapping provision comes in, and that is why DLA [is] withdrawn after a shorter period namely, once an adult has been in hospital for 28 days. For children under 16, the rule is 84 days. Those arrangements are based on the principle that double provision in this case, NHS in patient care and payment of DLA for the same need should not be made from public funds. The difference between the arrangements for adults and for children is recognition of the therapeutic value of visits and treats for a disabled child who is adjusting to life in hospital. But are all the disability related needs of children in hospital met by the NHS? And does Ms Eagles reference to the value for the child that the family should make visits to him and bring him treats bear any relation to the demands, personal and financial, which are made of parents when their severely disabled child is in hospital? The evidence of Mr Mathieson gives a negative answer to both questions. But is the case of Mr and Mrs Mathieson a hard case, unreflective of the position of most parents in their situation? In the only, short, witness statement filed on behalf of the Secretary of State in these proceedings his policy officer referred to an article by Dr Ruth Davies in the Journal of Child Health Care, vol 14(1) (2010) at p 6, entitled Marking the 50th anniversary of the Platt Report: from exclusion, to toleration and parental participation in the care of the hospitalised child. Dr Davies explains that in Victorian times parents were not allowed to visit their children in hospital more than a few hours a week; that with the rise of behaviourism, with its rejection of the importance for a child of a parents emotional support, there was little change in the approach to parental visits during the first half of the 20th century; that in 1959 a committee chaired by Sir Harry Platt wrote a report published by the Ministry of Health, entitled The Welfare of Children in Hospital, in which it recommended that parents be allowed to visit their children whenever they could and to help as much as possible with their care and that consideration be given to the admission of mothers with their children, especially if aged under five; that for the next 20 years the nursing profession largely resisted the recommendation for unrestricted parental visiting; that after about 1980 changes occurred at an accelerated pace; that, in line with studies in the UK and elsewhere, hospitals increasingly recognised that there were both humanitarian and cost saving advantages in encouraging parents to care for their children in hospital and indeed to reside with them there; and that, as the title of the article suggests, parental participation in the care of a child in hospital has ultimately become the norm. The Childrens Trust Tadworth, a charity devoted to the interests of children with multiple disabilities, and Contact a Family, a charity devoted to the support of families with disabled children, have been spear heading a campaign designed to persuade the Secretary of State to abrogate the rule whereby, after 84 days in hospital, a childs DLA is suspended. Their first report, entitled Stop the DLA Takeaway was published in 2010 and was placed in evidence before the Upper Tribunal. Subsequently they sought to strengthen their case by conducting an online survey, which was completed by 104 families across the UK with disabled children who had spent significant periods of time in hospital. This led to the charities second report, entitled Stop the DLA Takeaway Survey Report, which was published in 2013. Mr Mathieson sought to place it in evidence before the Court of Appeal, which put it aside on the basis that it added little to the first report. In their first report the charities asserted: The law as it stands suggests that families are getting some form of respite when their child is in a hospital or other medical setting. It suggests that a parents responsibilities and costs are reduced. This could not be further from the truth. It alleged that the level of care provided by parents either remained the same or increased when their children were in hospital. It asserted: Research shows that there are extra costs for a family when their child is in hospital or another medical setting: loss of earnings travel for family members parking costs meals at hospital childcare for siblings. In their second report the charities were able to strengthen the assertions in their first report by reference to striking results of their survey. The results were as follows: Almost all carers (99%) provide more (68%) or the same (31%) level of care when their child is in hospital compared to when their child is at home. disability when they are staying in hospital. 93% have increased costs relating to their childs The survey confirmed that the families faced the types of increased costs identified in the first report, together with other costs relating to telephones, internet access and toys intended to keep the child occupied. In the second report the charities estimated that each year about 400 to 500 families suffered the suspension of DLA after their childs 84th day in hospital and that the annual costs to the state of abrogating the suspension would be about 2.7m to 3.4m. By consent, this court gave Mr Mathieson leave to place before it a letter from the Citizens Advice Bureau attached to Great Ormond Street Hospital (the CAB). It wrote: It can be devastating for families when payments of Disability Living Allowance stop. The caring responsibilities of parents of child in patients are enormous. It is often not realised that parents are required to attend hospital when their children are in patients and to take an active part in their medical management. If they fail to attend, the hospitals social workers are informed. Many carers live either in make shift beds on the wards or in nearby hospital provided accommodation. The CAB added that the caring responsibilities of parents may increase once their child becomes an in patient; that they need to be trained to administer treatments, such as feeding through a gastrostomy; that the hospital relies on them to communicate with it on behalf of a non verbal child; that their increased costs include costs of travel, of meals at the hospital and of childcare for siblings; and that their financial difficulties can be compounded by loss of earnings. The CAB concluded: Our view is that the 84 day rule unfairly and unjustifiably restricts benefit entitlement. When the 84 day rule was introduced, it may have been the case that families were discouraged or not permitted to stay with their children in hospital. However, it ignores the modern reality of paediatric in patient healthcare and it removes necessary support from under the feet of the countrys most vulnerable people. In that the person centrally affected by the suspension will be (a) a child under 16, (b) who is severely disabled and (c) whose medical problems are so profound as to necessitate his remaining in hospital for more than 84 days, it is hard to disagree with the CABs reference to the countrys most vulnerable people. The Secretary of States policy officer responds that by 1991 parental presence in hospital was no longer discouraged; but she does not adequately grapple with its evidence about an increase in family expenditure. More significantly the Secretary of State has adduced no evidence in response to the charities two reports. The court must bear in mind that, although both charities are highly reputable, they have launched a campaign and that the purpose of the reports is to support it. The court must therefore look critically at the reports but it has nothing to set against them. The surveys conclusion that 99% of parents provide no lesser level of care when their child is in hospital and that 93% of them suffer an increase in costs demonstrates: (a) (b) that the case of Mr and Mrs Mathieson is not a hard case, unreflective of the position of most parents in their situation; that the personal and financial demands made on the substantial majority of parents who help to care for their disabled children in hospital are, to put it at its lowest, no less than when they care for them at home. The conclusion of the survey conducted by the charities also suggests that, with respect to Ms Eagle and always to whatever is said in Parliament, her reference in 2003 to visits and treats for a child in hospital betrayed her departments insufficient understanding of the role of parents with a child in hospital. The Secretary of State responds that any insufficiency in her parenthetical explanation of the reasons for the 84 day rule for children does not betoken his departments inability then to have given (or, more relevantly, now to give) a sufficient explanation of the reasons for it; that the very extension of the benefit for children in hospital from 28 days to 84 days, introduced in 1991, has demonstrated the sensitivity of his department to the different situation of adults and children in hospital; and, above all, that what matters is not how the reasons for a provision may have been presented but whether good reasons for it exist. Nevertheless there is nothing before the court to indicate that, whether in 1991 or at any time thereafter, the Secretary of State has asked himself: are benefits nowadays overlapping to an extent which justifies the suspension of a childs DLA following his 84th day in hospital? In this regard Mr Mathieson invites the court to approach the Secretary of States need to justify the 84 day rule through the prism of international conventions. They are not part of our law so our courts will not ordinarily reach for them. Courts sometimes find, however, that the law which they are required to apply demands reference to them. Article 3.1 of the UN Convention on the Rights of the Child (1989) (Cm 1976), ratified by the UK, provides: In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. The UN Committee on the Rights of the Child, in its General Comment No 14 (2013) on article 3.1, analysed a childs best interests in terms of a three fold concept. In R (SG) v Secretary of State for Work and Pensions [2015] UKSC 16, [2015] 1 WLR 1449, at paras 105 106, Lord Carnwath described the committees analysis as authoritative guidance. The first aspect of the concept is the childs substantive right to have his best interests assessed as a primary consideration whenever a decision is made concerning him. The second is an interpretative principle that, where a legal provision is open to more than one interpretation, that which more effectively serves his best interests should be adopted. The third is a rule of procedure, described as follows: Whenever a decision is to be made that will affect a specific child, an identified group of children or children in general, the decision making process must include an evaluation of the possible impact (positive or negative) of the decision on the child or children concerned Furthermore, the justification of a decision must show that the right has been explicitly taken into account Article 7.2 of the UN Convention on the Rights of Persons with Disabilities, also ratified by the UK, provides: In all actions concerning children with disabilities, the best interests of the child shall be a primary consideration. It is impossible to conceive that the UN Committees analysis of a childs best interests for the purposes of article 3.1 of the Convention on the Rights of the Child does not equally apply to the best interests of a disabled child for the purposes of article 7.2 of the Convention on the Rights of Persons with Disabilities. There can be no doubt that the Secretary of States decision to suspend payment of DLA to children following their 84th day in hospital has been an action concerning children and children with disabilities, undertaken by an administrative authority with delegated legislative powers, within the meaning of both conventions. On the evidence before the court, however, the Secretary of State has never conducted an evaluation of the possible impact of the decision on the children concerned, with the result that he has perpetrated a breach of the procedural rule which constitutes the third aspect of the concept of the best interests of children. Unsurprisingly might one say inevitably? breach of the procedural rule has generated a violation of the substantive right of disabled children to have their best interests assessed as a primary consideration, which constitutes the first aspect of the same concept. So the Secretary of State is in breach of international law. But does this conclusion affect Camerons human rights? In ZH (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4, [2011] 2 AC 166, Lady Hale at para 21 quoted with approval the observation of the Grand Chamber of the ECtHR in Neulinger v Switzerland (2010) 28 BHRC 706, para 131, that the Convention cannot be interpreted in a vacuum but must be interpreted in harmony with the general principles of international law. The Court of Appeal concluded, however, that the circumstances of the present case left no room for either of the international conventions to give a steer to the proper interpretation of Camerons rights. Consistently with that conclusion, the Secretary of State proceeds to submit that it is in principle illegitimate to have regard to the conventions and in this regard he relies upon the recent decision of this court in the SG case cited at para 39 above. It is clear that in the SG case the Secretary of State submitted that, while an international covenant might inform interpretation of a substantive right conferred by the Convention, it had no role in the interpretation of the parasitic right conferred by article 14 and thus, specifically, no role in any inquiry into justification for any difference of treatment in the enjoyment of the substantive rights. But his submission was not upheld. While Lord Reed did not expressly rule upon it, it was rejected by Lord Carnwath (paras 113 119), by Lord Hughes (paras 142 144), by Lady Hale (paras 211 218) and by Lord Kerr (paras 258 262). Lord Carnwath, for example, pointed out at paras 117 119 that the Secretary of States submission ran counter to observations in the Court of Appeal in the Burnip case, cited at para 23 above, and indeed to the decision of the Grand Chamber in X v Austria (2013) 57 EHRR 405. The decision of the majority in the SG case was not that international conventions were irrelevant to the interpretation of article 14 but that the UN Convention on the Rights of the Child was irrelevant to the justification of a difference of treatment visited upon women rather than directly upon children: para 89 (Lord Reed), paras 129 131 (Lord Carnwath) and para 146 (Lord Hughes). The noun adopted by the Grand Chamber in the Neulinger case, cited above, is harmony. A conclusion, reached without reference to international conventions, that the Secretary of State has failed to establish justification for the difference in his treatment of those severely disabled children who are required to remain in hospital for a lengthy period would harmonise with a conclusion that his different treatment of them violates their rights under two international conventions. Were this court to allow Mr Mathiesons appeal, it would, however, be disagreeing with the conclusion not only of the Court of Appeal but also, and in particular, of the Upper Tribunal. There is powerful authority which underlines the hesitation with which appellate courts should interfere with the conclusion of a specialist tribunal within the area of its expertise. In AH (Sudan) v Secretary of State for the Home Department [2007] UKHL 49, [2008] AC 678, the House of Lords restored a conclusion by the Asylum and Immigration Tribunal (the AIT) that it was reasonable to expect Sudanese asylum seekers from Darfur to relocate to Khartoum. Lady Hale at para 30, in a passage with which Lord Hope agreed at para 19, observed that it was probable that, in understanding and applying the law in their specialised field, expert tribunals will have got it right. In MA (Somalia) v Secretary of State for the Home Department [2010] UKSC 49, [2011] 2 All ER 65, this court, adopting Lady Hales observation, restored a conclusion by the AIT that a Somali asylum seeker had failed to establish that, if returned to Mogadishu, he would be at real risk of inhuman or degrading treatment. Furthermore, in R (Jones) v First tier Tribunal (Social Entitlement Chamber) [2013] UKSC 19, [2013] 2 AC 48, this court upheld the validity of a tribunal decision that there had been no crime of violence for the purposes of the Criminal Injuries Compensation Scheme; and Lord Carnwath observed at para 47 that the development of a consistent approach to that expression was primarily a task for the tribunal. In this regard the Secretary of State relies in particular upon the recent decision of the Court of Appeal in Obrey v Secretary of State for Work and Pensions [2013] EWCA Civ 1584, [2014] HLR 133. A superficial reading suggests considerable similarities between the Obrey case and the present case. Under challenge was the rule whereby, after 52 weeks as an in patient in hospital, a person was no longer to be treated as occupying his home for the purposes of entitlement to housing benefit. The claim was that, in breach of article 14 of the Convention when taken with A1P1, the rule indirectly discriminated against mental patients because they were more likely than other patients to remain in hospital for more than 52 weeks. The Court of Appeal dismissed the challenge of three claimants to the Upper Tribunals conclusion that the 52 week rule was justified. Sullivan LJ at paras 17 18, in passages with which Laws LJ specifically agreed at para 30, rejected a submission that the issue of justification under article 14 fell outside the specialist competence of the Upper Tribunal; and Sullivan LJ proceeded at paras 19 to 28 to explain that, in reaching its conclusion, the Upper Tribunal had made no error of law. I agree that, albeit perhaps less obviously than, for example, in relation to circumstances in Khartoum or Mogadishu, the relevant chamber of the Upper Tribunal is likely to have particular insight into the existence or otherwise of justification for a social security provision. That said, I consider that there was an error of law in the tribunals analysis of Mr Mathiesons case. First, it focussed upon the sort of attention which Cameron had received, or might have received, at Alder Hey in connection with bodily functions. His need for attention in connection with bodily functions had indeed been the threshold to his entitlement to the care component of DLA. But, as explained in para 14 above, there is no restriction on how DLA, once awarded, may, on his behalf and for his benefit, be deployed; and so it by no means followed that the inquiry into justification for the suspension should so narrowly be focussed. The focus should be upon whether the disability related needs which Cameron exhibited at home continued to exist throughout his stay at Alder Hey and whether to a substantial extent Mr and Mrs Mathieson continued to attend to them there. In any event, however, the catalogue of care provided by them to Cameron at Alder Hey suggests that they there attended no less to his bodily functions than when he had been at home. Second, it observed that the staff at Alder Hey would if necessary have provided for Cameron the care which Mr and Mrs Mathieson provided for him there. As long, said the tribunal, as the general position is that the NHS will meet all in patients disability related needs (in the sense of those that might otherwise found an entitlement to DLA), the position has a rational foundation. But what nursing staff need to do in the event that parents fail to perform the role expected of them is irrelevant. The tribunal also held: even if there are a small number of children at the extreme end of the spectrum whose needs for attention in connection with their bodily functions cannot fully be met by the NHS and whose families may, as here, incur additional costs as a result, that is merely one facet of how adopting a bright line rule operates in practice. Even if the number of such children has increased since the early 1990s, there is no suggestion that the number represents more than a small minority even now. With respect to the tribunal, and putting to one side its continued focus upon bodily functions, there was a suggestion in the charities first report that the number of families which incurred additional costs as a result of their childs admission to hospital was more than a small minority. But that it is indeed far from being a small minority has now been amply established in their second report, which was not before the tribunal. Answer I conclude therefore that: (a) by his decision dated 3 November 2010 to suspend payment of DLA to Cameron, the Secretary of State violated his human rights under article 14 of the Convention when taken with A1P1; there is therefore no need to consider whether he also violated Camerons human rights under article 14 when taken with article 8; in that the Secretary of State was not obliged by any provision of primary legislation to suspend the payment, he acted unlawfully in making the decision dated 3 November 2010: section 6(1) and (2) of the Human Rights Act 1998 (the 1998 Act); (b) (c) (d) accordingly the First tier Tribunal should have allowed Camerons appeal against that decision; should have set it aside; and, if only for the sake of clarity, should have substituted a decision that Cameron was entitled to continued payment of DLA with effect from 6 October 2010 to the date from which payment of it was reinstated; and this court should allow Camerons appeal and make the orders at (d) which the First tier Tribunal should have made. (e) Mr Mathieson seeks further relief which the Secretary of State energetically opposes. First, he seeks a formal declaration that the Secretary of State violated Camerons human rights. The First tier Tribunal had no power to make a formal declaration and it appears that, by virtue of sections 12(4) and 14(4) of the Tribunals, Courts and Enforcement Act 2007, the jurisdiction of the Upper Tribunal and of the Court of Appeal in relation to Mr Mathiesons successive appeals was no wider than that of the First tier Tribunal. It may well be that this court is not similarly confined but a formal declaration would seem to add nothing to the conclusions articulated in (a) and (c) of para 48 above. Second, more controversially, Mr Mathieson asks this court to discharge its interpretative obligation under section 3 of the 1998 Act by somehow reading the provisions for suspension of payment of DLA in regulations 8(1) and 12A(1) of the 1991 Regulations so as not to apply to children. In my view however it is impossible to read them in that way. Anyway, as the Secretary of State points out, it may not always follow that the suspension of payment of a childs DLA following his 84th day in hospital will violate his human rights. Decisions founded on human rights are essentially individual; and my judgment is an attempted analysis of Camerons rights, undertaken in the light, among other things, of the extent of the care given to him by Mr and Mrs Mathieson at Alder Hey. Although the courts decision will no doubt enable many other disabled children to establish an equal entitlement, the Secretary of State must at any rate be afforded the opportunity to consider whether there are adjustments, otherwise than in the form of abrogation of the provisions for suspension, by which he can avoid violation of the rights of disabled children following their 84th day in hospital. LORD MANCE: (with whom Lord Clarke and Lord Reed agree) I have had the benefit of reading Lord Wilsons judgment. I have found this appeal more finely balanced than he has done, although I have come ultimately to the same conclusion. Courts should not be over ready to criticise legislation in the area of social benefits which depends necessarily upon lines drawn broadly between situations which can be distinguished relatively easily and objectively. I would emphasise this as an important principle in terms rather more forceful than I think para 27 of Lord Wilsons judgment conveys. In R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] UKHL 15, [2008] AC 1312, Lord Binghams speech on this point read more fully at para 33 as follows: Thirdly, legislation cannot be framed so as to address particular cases. It must lay down general rules: James v United Kingdom (1986) 8 EHRR 123, para 68; Mellacher v Austria (1989) 12 EHRR 391, paras 52 53; R (Pretty) v Director of Public Prosecutions (Secretary of State for the Home Department intervening), [2002] 1 AC 800, para 29; Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816, paras 72 74; R (Carson) v Secretary of State for Work and Pensions [2005] UKHL 37, [2006] 1 AC 173, paras 41, 91. A general rule means that a line must be drawn, and it is for Parliament to decide where. The drawing of a line inevitably means that hard cases will arise falling on the wrong side of it, but that should not be held to invalidate the rule if, judged in the round, it is beneficial. In the present case, a line has been drawn in secondary legislation, the Social Security (Disability Living Allowance) Regulations 1991, regulations 8 and 10, according to which the receipt of a disability living allowance attributable to entitlement to the care component (which I shall for simplicity call DLA) is made conditional in any period upon the person not being maintained free of charge while undergoing medical or other treatment as an in patient, except as regards the first 28 days or, in the case of a person under 16, the first 84 days during which he or she is so maintained. That is a bright line, operating by reference to hospitalisation free of charge after defined periods. Inevitably, it is capable of being criticised as arbitrary. The length of the specified periods cannot be expected to correspond precisely with the extent of actual needs. They must have been seen as some form of broad allowance in respect of the initial period of adaptation from normal life to a substantial spell in hospital. There must be patients in hospital for more and less than the specified periods of 28 and 84 days who in practice have precisely the same needs. But the courts cannot expect the legislator to assess the appropriate length of any such period of adaptation on an individual basis or at any more precise level. By the same token, the Secretary of State submits here that the basic criterion of hospitalisation free of charge represents a broad test, which draws a rational and readily applicable line, reflecting a view that in a National Health Service hospital the patients disability related needs will be met by the hospital. The difficulty with that view is that it fails to reflect the modern emphasis on the importance of parents, in particular, continuing to provide assistance in connection with bodily functions while their child is undergoing long term hospitalisation. Lord Wilson has drawn attention to this point in his paras 30 and 35. The Upper Tribunal was, in my view, in error (in para 46) in seeing it as an answer to the point that the National Health Service would itself have had to act, if the parents had not done so. The Upper Tribunal went on to say that: even if there are a small number of children whose needs are at the extreme end of the spectrum whose needs for attention in connection with their bodily functions cannot fully be met by the NHS and whose families may, as here, incur additional costs as a result, that is merely one facet of how adopting a bright line rule operates in practice. Even if the number of such children has increased since the early 1990s, there is no suggestion that the number represents more than a small minority even now. It is not evident from this passage what larger group the Upper Tribunal had in mind when speaking of a small number and a small minority. On the evidence before us, a significant group of children with severe disability needs is adversely affected by the present regulations, and continues to receive in hospital attendance in respect of disability by home carers such as parents no less than when at home. Again, I can refer to Lord Wilsons judgment, paras 31 to 36 and to his conclusion to that effect in para 47. The absence of any restriction on the use of DLA, once awarded, cannot of itself bear on, or support, Mr Mathiesons case that the withdrawal of DLA during any period of hospitalisation extending beyond 84 days was unjustified. The grant of DLA is linked to the existence of disability related needs. It is plainly legitimate to make its continuation or withdrawal conditional upon the continuation of the same needs. Here, however, the evidence indicates that the same needs, in terms of parental attention, existed and were met during Camerons hospitalisation after, as before, the expiry of the 84 day period. But, in order to continue to provide this parental attention, the parents had, necessarily, to incur ancillary expenses and loss, such as extra travel and meal costs and loss of earnings. The Secretary of State points out that other social benefits, in particular child benefit and child tax credit, remained in payment throughout Camerons hospitalisation, and submits that they would not be required in the same way during hospitalisation. In particular, the childs meals would be provided in hospital. The Upper Tribunal made the same point in its para 48. Bearing in mind that this appeal is about disability related needs, and the payments made in respect of them, this argument, essentially one of swings and roundabouts, is not to my mind particularly attractive. Had it been fully developed and been shown to be significant on the facts, I might nevertheless have given it more weight. As it is, I do not consider that it can counterbalance the prima facie conclusion that the withdrawal of DLA after 84 days was not justified in Camerons case by any matching reduction in his needs for disability related attention by his parents. In the light of the above, I turn to consider whether Cameron was discriminated against on grounds of status within the meaning of article 14 of the Convention. To my mind, a child hospitalised free of charge (essentially in a NHS, rather than private, hospital) for a period longer than 84 days can be regarded as having a different status to that of a child not so hospitalised. The focus shifts on that basis to the issue of justification for the difference in treatment, and that I have already effectively covered. The difference in treatment was not justified, because on the evidence Cameron continued to have disability related needs to which his parents were expected to continue to attend, and to meet which substantial expenditure was also necessarily incurred. With regard to the appropriate remedy to give effect to these conclusions, I agree that this should be tailor made and limited to Camerons particular position, by simply deciding that the decision in his case cannot stand and that he was entitled to continued payment of DLA after 84 days. The Secretary of State may be able to refine the criteria for the receipt or cessation of DLA in other cases in a manner which avoids the inequity involved in its withdrawal in respect of those in Camerons position. We cannot address in general declaratory terms the position of children receiving DLA and hospitalised for longer than 84 days, as Mr Mathieson invites us to do.

Cameron Mathieson was born on 19 June 2007 and sadly passed away on 12 October 2012. He was diagnosed with cystic fibrosis and Duchenne muscular dystrophy soon after he was born, and his parents went to great lengths to meet his exceptional and complex care needs during his short life [3]. They received, on his behalf, the state benefit known as Disability Living Allowance (DLA). Camerons disabilities were so severe that he was entitled to the highest rates of the care component and the higher rate of the mobility component of DLA [8 10]. On 4 July 2010 Cameron was admitted to Alder Hey Hospital in Liverpool for symptoms of chronic bowel obstruction. He remained there as an inpatient until 4 August 2011 [4]. During his stay one or other of his parents was present in the hospital at all times. They remained his primary caregivers, including administering twice daily physiotherapy, giving nebulised antibiotics, feeding him via a nasogastric tube, and changing his stoma bag up to eight times a day [5]. The additional costs incurred by the family over the duration of Camerons hospital admission, including the costs of travel from their home in Warrington, amounted to around 8,000 [6]. Regulations 8(1), 10, 12A and 12B of the Social Security (Disability Living Allowance) Regulations 1991 (the 1991 Regulations) together provide that a child under 16 will cease to receive DLA after the 84th day of his or her admission as an inpatient in an NHS hospital [12]. In the case of a person aged 16 or over, DLA is withdrawn after the 28th day. On 3 November 2010 the Secretary of State decided that Camerons DLA should be suspended effective from 6 October 2010 on grounds that he had been an inpatient at Alder Hey for more than 84 days [13]. The Mathieson family continued to receive other state benefits including child benefit, child tax credit, and income support [15]. However, the suspension of DLA from October 2010 to August 2011 amounted to a loss of about 7,000 [14]. Cameron challenged the Secretary of States decision in the First tier Tribunal (Social Security and Child Support), which dismissed his appeal on 10 January 2012. After Cameron died, his father continued the proceedings in his stead [2].The Upper Tribunal (Administrative Appeals Chamber) dismissed Mr Mathiesons further appeal on 15 January 2013, as did the Court of Appeal on 5 February 2014. The Supreme Court unanimously allows the appeal, sets aside the Secretary of States decision and substitutes the decision that Cameron Mathieson was entitled to continued payment of DLA with effect from 6 October 2010 [48]. Lord Wilson (with whom Lady Hale, Lord Clarke and Lord Reed agree) gives the leading judgment. Lord Mance (with whom Lord Clarke and Lord Reed agree) gives a concurring judgment. Camerons father, Mr Mathieson, in taking forward the appeal contended that the 84 day rule breached Article 14 of the European Convention on Human Rights (ECHR), which provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth, or other status [16]. It was conceded by the Secretary of State that the provision of DLA falls within the scope of Article 1 of Protocol 1 ECHR, which protects the peaceful enjoyment of possessions [18]. Therefore, the government is obliged to administer DLA without discrimination on any of the identified grounds [17]. The ground relied upon by Mr Mathieson was other status, namely that of being a severely disabled child in need of lengthy inpatient hospital treatment [19]. Lord Wilson concludes that such status falls within the grounds of discrimination prohibited by Article 14: disability has been found to be a prohibited ground, and discrimination between disabled persons with different needs equally engages Article 14 [23]. Lord Mance, in his concurring judgment, prefers to formulate the relevant status as being that of a child in an NHS hospital for over 84 days, rather than a private hospital [60]. Lord Wilson goes on to consider whether the difference in treatment in withdrawing DLA from children in hospital for longer than 84 days was justified, or whether it amounted to unlawful discrimination. A difference in treatment on a prohibited ground will be justified if it pursues a legitimate aim and there is a reasonable relationship of proportionality between the means employed and the aim sought to be realised [24]. In the area of welfare benefits, a court will not interfere with the governments approach unless the rule applied is manifestly without reasonable foundation [26]. Neither will a bright line rule be invalidated because hard cases fall on the wrong side of it, provided that the rule is beneficial overall [27]. In this case, the governments aim in imposing the 84 day rule was to avoid overlapping provision to meet disability related needs [28]. However, the court was presented with evidence showing that the disability related needs of children in hospital are far from being entirely met by the NHS. Since the 1980s, parental participation in the care of a child in hospital has been increasingly encouraged and ultimately become the norm [30]. An online survey of families with disabled children showed that almost all carers provide the same or a greater level of care when their child is in hospital rather than at home, and bear increased costs [33]. The Citizens Advice Bureau confirmed that parents are positively required to take an active part in their childs medical management in hospital, and that financial difficulties arise due to expenditure on travel, meals and childcare for siblings, together with loss of parental earnings [35]. This evidence (to which the Secretary of State did not adduce any material in response) demonstrated that the Mathiesons situation was not a hard case; rather, the personal and financial demands made on the substantial majority of parents with disabled children in hospital are at least no less than when they care for them at home [36]. Therefore, state provision for disabled children in hospital is not overlapping to an extent which justifies the suspension of DLA after the 84th day. This conclusion is in harmony with the rights afforded to Cameron under international law by the UN Convention on the Rights of the Child and the UN Convention on the Rights of Persons with Disabilities [44]. Although Mr Mathieson invites the court to disapply the provisions for the suspension of DLA under the 1991 Regulations in the case of children, the court declines to do so, leaving it to the Secretary of State to decide what measures should be taken to avoid the violation of the rights of disabled children such as Cameron following their 84th day in hospital [49].

These two appeals raise questions of some significance arising out of the interrelationship of the statutory schemes relating to the protection of employees pensions and to corporate insolvency. The background to the two appeals is, in very summary terms, as follows: i. Many UK registered members of the Lehman group of companies, and all the UK registered members of the Nortel group of companies, have gone into insolvent administration; (a) One of those Lehman group companies entered into service ii. contracts with, and ran a pension scheme for the benefit of, employees who worked for other group members; (b) The Nortel group included a company which had a pension scheme, and which was insufficiently resourced to fund that scheme; iii. The pension scheme (the Scheme) in each case was a final salary scheme, which appears to be, and to have been for some time, in substantial deficit; iv. The Pensions Regulator subsequently initiated machinery under the Pensions Act 2004 to require certain other group members (the Target companies) to provide financial support for the Scheme; vs That machinery has been held up so it can be decided whether the liability under such a requirement would rank (a) as an expense of the Target companies administrations, (b) pari passu with the Target companies other unsecured creditors, or (c) as neither; vi. Under option (a) the liability would rank ahead of the unsecured creditors, and may well be paid in full; under option (b) it would rank equally with those creditors; under option (c) it would rank behind them, and would probably be worthless; vii. Briggs J and the Court of Appeal (in a judgment given by Lloyd LJ) concluded that option (b) was not open to them, and preferred option (a) to option (c); viii. The issue now comes before the Supreme Court. This judgment starts by explaining the relevant statutory provisions relating to pensions, which are mostly in the Pensions Act 2004 (the 2004 Act), in a description largely based on the exposition in the judgment of Briggs J, [2010] EWHC 3010 (Ch), [2011] Bus LR 766, paras 7 41. It then deals with the statutory provisions and rules relating to insolvency, in the Insolvency Act 1986 (the 1986 Act) and the Insolvency Rules 1986 (SI 1986/1925) (the Insolvency Rules), largely drawing on what Lloyd LJ said in the Court of Appeal, [2011] EWCA Civ 1124, [2012] Bus LR 818, paras 20 23 and 39. Next, it will explain the facts, in a summary reflecting what Briggs J said at paras 47 54 of his judgment. After a short discussion, the judgment will then turn to consider whether the liabilities in the present cases would rank pari passu with the unsecured creditors of the Target companies. It will then consider whether those liabilities rank as expenses of the administration. Finally, it will address the power of the court under the 1986 Act and the Insolvency Rules to vary the priority of the liabilities. The relevant statutory provisions relating to pensions In order to protect employees from the adverse consequences of an under funded occupational pension scheme, (i) the Social Security Act 1990 introduced a statutory debt regime by amending the Social Security and Pensions Act 1975, and (ii) the Pensions Act 1995 (the 1995 Act) introduced a minimum funding requirement regime. These were perceived to be inadequate in some respects, and the 2004 Act introduced a financial support direction (FSD) regime. The regimes under these Acts were introduced against the backdrop of European Directives, which require member states to take measures to protect the interests of employees or ex employees in relation to pension rights in the event of their employers insolvency. Section 75 of the 1995 Act Although it is the FSD regime under the 2004 Act which is of central importance on these appeals, section 75 of the 1995 Act is highly relevant. It provides that upon the happening of various events, which include an insolvency event, an amount equivalent to any shortfall in the assets of an occupational pension scheme (a scheme) as against its liabilities, which exists immediately prior to the relevant event, is to be a debt, known as a section 75 debt, due from the employer to the trustees of the scheme (the trustees). Under the section as originally drafted, an insolvency event was limited to the employer going into insolvent liquidation, but the 2004 Act extended the expression to include going into administration. In this judgment I shall similarly use the expression to cover going into administration or going into insolvent liquidation. Section 75(8) provides that a section 75 debt is not to be regarded as a preferential debt for the purposes of the 1986 Act. Section 75(4A) states that a section 75 debt is to be taken, for the purposes of an employers insolvency, to arise immediately before the occurrence of the insolvency event. The 2004 Act: the Regulator and the PPF The 2004 Act introduced both the Pensions Regulator (the Regulator) and the Pension Protection Fund (the PPF). The Regulator is a body corporate established by section 1, and, by section 4, it is given wide regulatory functions. When exercising any of those functions, the Regulator is required by section 100 to have regard to: 2(a) the interests of the generality of the members of the scheme to which the exercise of the function relates, and (b) the interests of such persons as appear to the Regulator to be directly affected by the exercise. Section 5(1) defines the Regulators main objectives, which include protecting the benefits of members of schemes, and reducing the risk of compensation having to be paid by the PPF. The PPF is financed from levies upon schemes. It operates by assuming the assets and liabilities of a deficient scheme, and then paying its members compensation at a prescribed rate (generally less than the full rate promised under the relevant scheme), using the industry wide levies for the purposes of meeting the shortfall between the deficient schemes assets and the prescribed level of compensation. The 2004 Act: the FSD regime and FSDs It was perceived that the creation of the PPF might encourage some employers to arrange their affairs so as to throw the burden of pension scheme deficiencies upon the PPF, which would unfairly burden other schemes by increasing the amount of the levies. An example of such an arrangement is where a group of companies uses a single company (a service company) to employ people who then work for other group companies. In such a case, the employees pension rights could be regarded as unfairly prejudiced if, by comparison with the resources of other group companies, the service company had very limited resources to meet a section 75 debt. The FSD regime was designed to mitigate such problems. In a nutshell, it enables the Regulator in specified circumstances (i) to impose, by the issue of a FSD to some or all of the other group companies (known as targets), an obligation to provide reasonable financial support to the under funded scheme of the service company or insufficiently resourced employer, and (ii) to deal with non compliance with that obligation by imposing, through a Contribution Notice (a CN), a specific monetary liability payable by a target to the trustees. The detailed provisions of the FSD regime are contained in sections 43 to 51 of the 2004 Act, and in the Pensions Regulator (Financial Support Directions etc) Regulations 2005 (SI 2005/2188) (the FSD Regulations). Section 43 is of central importance. Subsection (1) explains that the FSD regime extends to all occupational pension schemes other than money purchase schemes and certain other prescribed schemes. Section 43(2) contains the so called employer condition, and provides as follows: The Regulator may issue a [FSD] in relation to such a scheme if the Regulator is of the opinion that the employer in relation to the scheme (a) is a service company, or (b) is insufficiently resourced, at a time determined by the Regulator which falls within subsection (9) (the relevant time). Section 43(9) and the FSD Regulations define the relevant time as any time within a period of two years before the date of the determination of the Regulator to issue the FSD in question. It is known as the look back date. Service company is defined in section 44(2) as being a company within a group of companies which, by reference to its turnover, can be seen to be principally engaged in providing the services of its employees to other member companies in the group. Section 44(3) to (5) and the FSD Regulations explain that an employer is insufficiently resourced if two tests are satisfied. The first is that the value of its resources is less than 50% of the estimated section 75 debt in relation to a scheme, the amount of the shortfall being the relevant deficit. Secondly (limiting the situation to those involving companies), there must be a company which has (or two or more companies which between them have) resources not less than the relevant deficit, and which is (or are), inter alia, a company which is (or companies which are) connected with, or an associate of the employer (section 43(6)(c)). The 2004 Act and the FSD Regulations contain detailed provisions as to the manner in which a persons resources are to be assessed. Whereas the resources of an employer are incapable of being defined as having a negative value, the resources of persons associated or connected with the employer may be so defined. The formula for determining whether the insufficiently resourced condition is satisfied is known as the rich man/poor man test. The employer condition operates entirely by reference to the look back date chosen by the Regulator, rather than at the time when the FSD is issued (the issue date). Accordingly, the fact that, as at the date the FSD is issued, an employer may have ceased to be a service company, or the rich man/poor man test is not met, would not preclude a FSD. As to the target, section 43(4) provides that a FSD in relation to a scheme may be issued to one or more persons, but subsection (5)(a) limits the issue of a FSD to persons falling within subsection (6) at the relevant time (i.e. the look back date). Section 43(6)(a) and (c) respectively limit that class to the employer itself and, for present purposes, to a person who is connected with or an associate of the employer at the look back date. It is therefore irrelevant that, by the issue date, one or more targets which had the requisite net worth to satisfy the rich man part of the rich man/poor man test as at the look back date may no longer be solvent. Further, section 43(5)(a) does not limit the range of potential targets to those which satisfy the rich man part of the rich man / poor man test at the look back date. Section 43(5)(b) states that a FSD can only be issued to a particular target if the Regulator is of the opinion that it is reasonable to impose the requirements of the direction on that person; this is often called the reasonableness condition. Section 43(3) states that a FSD should: [require] the person or persons to whom it is issued to secure (a) that financial support for the scheme is put in place within the period specified in the direction, (b) that thereafter that financial support or other financial support remains in place while the scheme is in existence, and (c) that the Regulator is notified in writing of prescribed events in respect of the financial support as soon as reasonably practicable after the event occurs. Prescribed events include an insolvency event affecting the employer and any target, and any failure to comply with the requirements of the FSD. Section 45(1) and (2) define financial support as one or more of the following arrangements: (a) an arrangement whereby all the members of the group are jointly and severally liable for the whole or part of the employers pension liabilities in relation to the scheme; (b) [a legally binding] arrangement whereby a company which meets [certain] requirements and is the holding company of the group is liable for the whole or part of the employers pension liabilities in relation to the scheme; (c) an arrangement which meets [certain] requirements and whereby additional financial resources are provided to the scheme ; (d) such other arrangements as may be prescribed. Subsection 45(3) states that the Regulator may only approve any arrangement if satisfied that it is reasonable in the circumstances. Subsection 45(4) explains that the employers pension liabilities include, but are not limited to, the employers section 75 debt. A FSD will not itself either contain or be accompanied by a specification of what would constitute reasonable arrangements. It will simply require that the target secures that financial support for the scheme is put in place. It is for the target (alone or in conjunction with other targets) to propose reasonable arrangements for written approval by the Regulator. What the FSD must specify, pursuant to subsection 43(3)(a), is the period within which financial support for the scheme is to be put in place. By contrast, the period during which that support is to remain in place is, by reference to subsections 43(3)(b) and (10), the whole of the period until the scheme is wound up. Section 43(7) provides that, when deciding whether it is reasonable to impose the requirements of a FSD, the Regulator is to have regard to such matters as the Regulator considers relevant including, where relevant, the following matters: (a) the relationship which the person has or has had with the employer (including whether the person has or has had control of the employer ), (b) in the case of a person falling within [section 43(6)(c)], the value of any benefits received by that person from the employer, (c) any connection or involvement which the person has or has had with the scheme, (d) the financial circumstances of the person, . The FSD regime is capable of applying to almost any company within a group which has a service company, or a potentially insufficiently resourced employing company, with a potentially under funded scheme. Accordingly, the consequential contingent liabilities it creates could undermine the financial stability of potential targets. Section 46(2) attempts to mitigate this problem by providing for applications to the Regulator to determine that: (a) the employer in relation to the scheme would not be a service company for the purposes of section 43, (b) the employer in relation to the scheme would not be insufficiently resourced for the purposes of that section, or (c) it would not be reasonable to impose the requirements of a financial support direction, in relation to the scheme, on the applicant. Once issued, such a clearance statement binds the Regulator in relation to the power to issue a FSD unless there has been a relevant change of circumstances from those described in the application. The 2004 Act: the FSD regime and CNs The Regulator can issue a CN where there has been non compliance with a FSD. Whereas a single FSD can be issued in relation to a scheme (albeit to one or more targets), CNs are only to be issued on a target by target basis. Thus, section 47(4)(d) expressly contemplates that a CN may be issued to one target, where others have proposed arrangements in response to a FSD which have received the Regulator's approval. Section 47(3) imposes a reasonableness condition upon the issue of a CN to a particular target. Potentially relevant considerations are listed in subsection (4). In addition to those listed in section 43(7) in relation to FSDs, there are two further considerations, namely: (a) whether the person has taken reasonable steps to secure compliance with the financial support direction [and] (d) the relationship which the person has or has had with the parties to any arrangements put in place in accordance with the direction (including, where any of those parties is a company within the meaning of subsection (11) of section 435 of the Insolvency Act 1986, whether the person has or has had control of that company within the meaning of subsection (10) of that section). By contrast with a FSD, a CN is required to be specific as to the amount payable by the target. By section 47(2) the notice must state that the target is under a liability to pay the scheme trustees or managers a specified sum. By section 48, that sum is to be either the whole or a specified part of the amount which the Regulator estimates to be the amount of the section 75 debt at the time of non compliance with the FSD section 75 debt (if by then crystallised) or (if not crystallised) the Regulators estimate of what such debt would be if it had crystallised at that date. Section 49(3) provides that [t]he sum specified in the notice is to be treated as a debt due from the person to the trustees or managers of the scheme. Provision is also made for the Regulator (or, in specified circumstances, the Board of the PPF) to exercise any powers of the trustees or managers to recover the debt. CNs can be issued to two or more targets, and to create joint and several liability for a specified amount. Section 50 enables the Regulator to restrain the trustees or managers of the scheme from pursuing recovery of the section 75 debt while, at the same time, a CN is being enforced. Section 50(6) ensures that any payments under a CN are treated as reducing the amount of the section 75 debt. Finally, section 50(9) enables the Regulator to reduce the amount specified in a CN where, for example, there have in the meantime been payments of part of the section 75 debt. The 2004 Act: Procedure The 2004 Act and the FSD Regulations lay down a fairly elaborate procedural code for the implementation of functions of the Regulator, including the FSD regime. The functions of the Regulator are divided between regulatory functions, which are exercisable by its executive arm, and reserved regulatory functions, which must be exercised by its Determinations Panel (the DP). Decisions to issue a FSD and a CN are reserved functions, whereas the decision whether to give written approval to proposed arrangements under section 45 is not. Although the Regulator has a degree of discretion as to its procedure, in relation to the FSD regime it must comply with what is called in section 96 the standard procedure, which involves, as a minimum: 2(a) the giving of notice to such persons as it appears to the Regulator would be directly affected by the regulatory action under consideration (a warning notice), (b) those persons to have an opportunity to make representations, (c) the consideration of any such representations and the determination whether to take the regulatory action under consideration, (d) the giving of notice of the determination to such persons as appear to the Regulator to be directly affected by it (a determination notice), (e) the determination notice to contain details of the right of referral to the Tribunal . The issue of a FSD and a CN must each be subject to this procedure. The Tribunal is now the Upper Tribunal (Tax and Chancery Chamber), from which an appeal lies to the Court of Appeal. By section 103(4) the Tribunal must, on a reference, determine what (if any) is the appropriate action for the Regulator to take in relation to the matter referred to it. The Tribunal must therefore approach the issue before it afresh rather than by way of reviewing the decision of the Regulator or the DP. It is worth briefly summarising the timescale involved in these procedures. Before implementing the standard procedure, the Regulator must identify a pension fund which appears to be at risk, and investigate whether the conditions for the implementation of the FSD regime are satisfied; it must then address all matters relevant to the exercise, including the reasonableness condition for the issue of a FSD to each potential target. The ensuing standard procedure potentially involves six stages at which the target and others can make representations, namely (i) after a warning notice, (ii) following a determination (before the Tribunal), (iii) following a FSD, (iv) after a warning notice that a CN may be issued, (v) upon a determination that it should be issued (before the Tribunal), (vi) even after the issue of a CN, an adjustment may be asked for in the light of payments by others. At every stage, the Regulator or the Tribunal is required to have regard to the interests of the target as a person directly affected. The Insolvency legislation Administration and liquidation For present purposes, there are two relevant types of corporate insolvency procedure, administration and liquidation. Liquidation, or winding up, has always been a feature of company law, and it can be invoked whether or not a company is insolvent, although insolvent liquidations are more common. Administration was first introduced by the 1986 Act. At that time, it did not allow for distributions to creditors of the company within the administration. If the administration did not succeed in rescuing the company, it was expected that a winding up would follow, and the available assets would be distributed to creditors within the liquidation. The Enterprise Act 2002 (the 2002 Act) rendered it possible for assets to be distributed to creditors by administrators, so that a winding up can be avoided. (Conversely, a company which is in liquidation may now come out of it and go into administration.) There may be companies which go into liquidation without having been in administration, but most of those companies with which the present cases are concerned (apart from one which is not insolvent) are in administration, and may or may not eventually go into liquidation (and two of the Lehman group companies are neither in administration nor in liquidation). In general, the unsecured debts of a company after an insolvency event are payable pari passu to the relevant creditors, who claim payment by proving for their debts. There has to be a cut off date to determine the class of creditors who are to participate in the distribution of the company's available net assets. As the law stood as regards the companies with which these appeals are concerned, the cut off date for claims in a liquidation is the date on which the company goes into liquidation, whether or not the liquidation was immediately preceded by an administration. The cut off date for claims in an administration is the date on which the company entered administration. Under this regime, if an administration is followed immediately by a liquidation, the debts provable in the liquidation would include any which arise during the administration, although debts provable in the administration would be limited to those arising before the administration. Before turning to the relevant statutory provisions, two points may be worth noting in passing. First, the position described in para 35 above has now changed. The cut off date for claims in a liquidation, which follows an administration started after 5 April 2010, is the date when the administration began. The same issue as arises in these appeals can still arise. However, there will no longer be an artificial distinction between the positions where the company proceeds from administration to winding up and where it does not. The change will tend to increase the importance of the dispute as to the correct treatment for insolvency purposes of the liabilities arising under a FSD or a CN. Secondly, in relation to the companies in the present cases, it is common ground that if a liability of such a company arises during the administration, and a winding up were to follow later, that liability can be the subject of proof in the liquidation. The relevant provisions of the 1986 Act and the Insolvency Rules In a liquidation of a company and in an administration (where there is no question of trying to save the company or its business), the effect of insolvency legislation (currently the 1986 Act and the Insolvency Rules, and, in particular, sections 107, 115, 143, 175, 176ZA, and 189 of, and paras 65 and 99 of Schedule B1 to, the 1986 Act, and rules 2.67, 2.88, 4.181 and 4.218 of the Insolvency Rules), as interpreted and extended by the courts, is that the order of priority for payment out of the companys assets is, in summary terms, as follows: (1) Fixed charge creditors; (2) Expenses of the insolvency proceedings; (3) Preferential creditors; (4) Floating charge creditors; (5) Unsecured provable debts; (6) Statutory interest; (7) Non provable liabilities; and (8) Shareholders. So far as expenses of an insolvency are concerned, rule 12.2 of the Insolvency Rules (rule 12.2) states that: (1) All fees, costs, charges and other expenses incurred in the course of winding up, administration or bankruptcy proceedings are to be regarded as expenses of the winding up or the administration or, as the case may be, of the bankruptcy. As to expenses in a liquidation, rule 4.218 (rule 4.218) provides: (1) All fees, costs, charges and other expenses incurred in the course of the liquidation are to be regarded as expenses of the liquidation. (3) [T]he expenses are payable in the following order of priority (a) expenses properly chargeable or incurred by the official receiver or the liquidator in preserving, realising or getting in any of the assets of the company or otherwise in the preparation or conduct of any legal proceedings . or in the preparation or conduct of any negotiations; (e) the cost of any security provided by a liquidator; (m) any necessary disbursements by the liquidator in the course of his administration ; (n) the remuneration or emoluments of any person who has been employed by the liquidator to perform any services for the company ; (o) the remuneration of the liquidator ; (p) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the company; (r) any other expenses properly chargeable by the liquidator in carrying out his functions in the liquidation. The equivalent provision in relation to the expenses of an administration is rule 2.67(1) (rule 2.67(1)), which states that The expenses of the administration are payable in the following order of priority, namely, (a) expenses properly incurred by the administrator in performing his functions in the administration of the company; (b) the cost of any security provided by the administrator in accordance with the Act or the Rules; (d) any amount payable to a person employed to assist in the preparation of a statement of affairs .; (f) any necessary disbursements by the administrator in the course of the administration ; (g) the remuneration or emoluments of any person who has been employed by the administrator to perform any services for the company .; (h) the remuneration of the administrator ; (j) the amount of any corporation tax on chargeable gains accruing on the realisation of any asset of the company . Where the assets of the company are insufficient to meet the totality of the expenses, rule 2.67(2) and (3) gives the court power to make an order as to the payment out of the assets of the expenses incurred in the administration in such order of priority as the court thinks just. Turning to unsecured debts and liabilities which are not expenses or preferential debts, rules 4.181 and rule 2.69 of the Insolvency Rules apply to liquidations and administrations respectively, and make it clear that, in so far as they are provable, they rank equally and, if there is insufficient money to meet them all, that they are to be abate[d] in equal proportions among themselves. In relation to what constitutes a provable debt, rule 12.3 of the Insolvency Rules in its form which applies to the instant administrations (rule 12.3) is headed Provable debts, and it provides as follows: (1) Subject as follows, in administration, winding up and bankruptcy, all claims by creditors are provable as debts against the company , whether they are present or future, certain or contingent, ascertained or sounding only in damages. (3) Nothing in this Rule prejudices any enactment or rule of law under which a particular kind of debt is not provable, whether on grounds of public policy or otherwise. Rule 13.12 of the Insolvency Rules (rule 13.12) is of critical importance on these appeals and it states: (1) Debt in relation to the winding up of a company, means. any of the following (a) any debt or liability to which the company is subject at the date on which the company went into liquidation; (b) any debt or liability to which the company may become subject after that date by reason of any obligation incurred before that date; (2) For the purposes of any provision of the Act or the Rules about winding up, any liability in tort is a debt provable in the winding up, if either (a) the cause of action has accrued at the date on which the company went into liquidation; or (b) all the elements necessary to establish the cause of action exist at that date except for actionable damage. (3) For the purposes of references in any provision of the Act or the Rules about winding up to a debt or liability, it is immaterial whether the debt or liability is present or future, whether it is certain or contingent, or whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion . (4) except in so far as the context otherwise requires, liability means (subject to paragraph (3) above) a liability to pay money or money's worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment, and any liability arising out of an obligation to make restitution. (5) This Rule shall apply where a company is in administration and shall be read as if references to winding up were references to administration. The relevant facts The Lehman group The Lehman group was a very substantial international financial concern which notoriously collapsed on 15 September 2008. The main London based group companies in the group were placed into administration that day, and I will refer to the administrators as the Lehman Administrators. The ultimate parent company of the Lehman group is Lehman Brothers Holdings Inc. (LBHI), a company incorporated in Delaware USA, which commenced Chapter 11 bankruptcy proceedings in September 2008, and emerged from them in March 2013. The main UK operating company is Lehman Brothers International (Europe) (LBIE), an unlimited company. The principal Lehman employer company within the UK, providing employees on secondment for most of the group's European activities, based in London, is Lehman Brothers Limited (LBL). When LBL went into administration on 15 September 2008, it crystallised a section 75 debt in relation to the Lehman Brothers Pension Scheme of approximately 120m. LBL is a shareholder in LBIE, and therefore liable without limit for LBIEs liabilities. Both LBIE and Lehman Brothers Europe Limited (LBEL), the other main London operating company, are subsidiaries of Lehman Brothers Holdings plc (LBH), which is itself wholly owned by Lehman Brothers UK Holdings Limited (LBUKH), which is in turn an indirect subsidiary of LBHI. Shortly after the Lehman group crash, the Regulator began investigations, with the consent of the Lehman Administrators, into the Lehman companies pursuant to notices under section 72 of the 2004 Act. Warning notices were issued to a number of Lehman group companies on or after 24 May 2010 on the ground that LBL was a service company, and the other requirements of section 43 of the 2004 Act were satisfied. There was then an oral hearing in September 2010 before the DP (at which the Lehman Administrators solicitors attended to observe, but made no submissions). A determination was then made by the DP on 13 September 2010 that a FSD should be issued against six Target companies, namely LBHI, LBIE, LBEL, LBH, LBUKH and Lehman Brothers Asset Management (Europe) Limited, which is no longer part of the Lehman group and is now called Neuberger Newman Europe Limited. The FSD process in relation to the Lehman companies is now stayed until after the outcome of these applications. The Nortel Group Prior to its collapse in January 2009, the Nortel group carried on a very substantial international telecommunications, computer network and software business. Its ultimate parent company is Nortel Networks Corporation (NNC) based in Canada. Its main Canadian operating company was Nortel Networks Limited (NNL) and its substantial USA business was headed by Nortel Networks Inc. (NNI), a direct subsidiary of NNL. The group's principal operating company in the UK was Nortel Networks UK Limited (NNUK) which is also a direct subsidiary of NNL. Since June 2000 it is principal Nortel employer in relation to the Nortel Networks UK Pension Plan (the Nortel Scheme). NNUK had a number of subsidiaries incorporated in various European countries. In addition, the European business was also carried on by certain European subsidiaries of NNL, including the applicants Nortel Networks SA, Nortel Networks France SAS and Nortel Networks (Ireland) Limited. At the time of the group's collapse in January 2009, NNUKs section 75 debt crystallised in an amount of about 2.1bn. Upon the group's collapse, NNC and NNL sought protection under Canadian bankruptcy law to facilitate the reorganisation of the group for the benefit of its creditors. On the same day NNI was placed into Chapter 11 bankruptcy in the United States, whilst NNUK, fifteen of its subsidiaries and the three European subsidiaries of NNL referred to above were placed into administration in England. The English administrators of the nineteen Nortel companies (the Nortel Administrators) have cooperated with other Nortel group office holders worldwide, in the process of selling the Nortel groups businesses along business rather than corporate demarcation lines and total global realisations of approximately US$7.5bn have been made. The Regulator's investigations into the Nortel Scheme began in early 2009, with the benefit of information provided by the Nortel Administrators. A warning notice was issued on 11 January 2010 to twenty nine Target companies in the Nortel group, on the basis that NNUK was insufficiently resourced and the other requirements of section 43 of the 2004 Act were satisfied. Representatives of the Nortel Administrators were present as observers, but did not make any representations at the oral hearing before the DP on 2 June 2010. After that hearing, the DP issued a determination notice on 25 June 2010 deciding that a FSD should be issued to the applicant Nortel companies, together with certain other Target companies. Following a reference to the Tribunal by the applicant Nortel companies and certain other of the Target companies, the automatic stay of the FSD process means that no FSD has yet been issued to those referring Target companies. The Tribunal proceedings have been informally stayed pending the outcome of these applications. Overview The issue in both appeals is how the administrators of a target should treat the targets potential liability under the FSD regime (and in due course the liability under a CN) in a case where the FSD is not issued until after the target has gone into administration. The courts below both held that the potential liability constituted an expense of the administration, falling within category (2) as described in para 39 above, so that it took priority over the normal run of unsecured creditors and even over the preferential creditors. Four possibilities have been canvassed before us. The first is that the courts below were right. The second is that the potential liability is an ordinary provable unsecured debt, ranking pari passu with other unsecured debts falling within category (5). The third possibility is that it is not a provable debt within rule 13.12, and therefore it falls within category (7). The fourth possibility is that, if the third is correct, then the court could and should direct the administrators to treat the potential FSD liability more favourably. Counsel representing the various parties very sensibly divided up the issues between them, so as to ensure that there was no repetition, and it is right to record the courts gratitude for the way the appeals were argued. Both Briggs J and the Court of Appeal felt constrained by a consistent line of authority, of which the most recent is R (Steele) v Birmingham City Council [2006] 1 WLR 2380, from holding that the potential liability as a result of a FSD issued after the commencement of an insolvent administration or liquidation (which I will refer to as an insolvency event) could constitute a provable debt within rule 12.3, although it appears that they would have so held if they had felt able to do so (see eg Briggs Js reluctance at para 191 of his judgment). They also considered that the effect of the House of Lords decision in In re Toshoku Finance UK plc [2002] 1 WLR 671 was that the potential liability was to be treated as an expense of the administration. Before this court, it was common ground that the potential liability under a FSD could not be both a provable debt and an expense of the administration, but there was discussion as to which should be considered first. In some cases, a liability which would otherwise be a provable debt can be, on special facts, an expense of the administration or liquidation (as in In re ABC Coupler and Engineering Co Ltd (No 3) [1970] 1 WLR 702), which may seem to suggest that the expense issue should be considered first. However, in the light of the common ground in this case, it appears to me that it is appropriate to consider the provable debt issue first, although it would be wrong not to address the expense question as well. Before I turn to examine in detail the arguments on the two issues, it is right to say that, at any rate on the face of it, the sensible and fair answer would appear to be that the potential liability of a target, under a FSD issued after an insolvency event, and in particular the liability under a CN issued thereafter, should be treated as a provable debt. There seems no particular sense in the rights of the pension scheme trustees to receive a sum which the legislature considers they should be entitled to receive having any greater or any lesser priority than the rights of any other unsecured creditor. It is common ground that if a CN had been issued in respect of a company before an insolvency event, it would give rise to a provable debt, and the courts below considered that, if a CN were issued after an insolvency event, it would give rise to a provable debt if it was based on a FSD issued before the insolvency event. It appears somewhat arbitrary that the characterisation and treatment of the liability under the FSD regime should turn on when the FSD or CN happens to have been issued, if it is based on a state of affairs which existed before the insolvency event. The notion that the potential liability under the FSD regime should be a provable debt if the FSD is issued after the administration or liquidation is supported by the fact any section 75 debt would itself be a provable debt, and not a preferential debt, in any insolvent liquidation or administration of an employer. That is clear from the provisions summarised in para 7 above. It would be strange if the employer companys statutory obligation to make good a shortfall in its employees pension scheme ranked lower in its insolvency than the more indirect statutory obligation of a target to make that deficiency good ranked in the targets insolvency. Indeed, it would be somewhat surprising if there was any significant difference in the treatment of the two types of obligation, in the light of the interrelationship between the FSD regime and the section 75 debt as evidenced for instance by section 50(6) of the 2004 Act. If the decisions below were correct, it would also mean that the legislature had given the Regulator a significantly valuable and somewhat arbitrary power, in what may (in the light of what is said in para 63 below) be an admittedly rare case in practice. Where the Regulator is proposing to issue a FSD in respect of a company not yet in administration or liquidation, it would be well advised to wait for the insolvency event, if the decisions below are right, because the amount recoverable under a subsequent CN would inevitably be greater than under a CN issued following a FSD issued before the insolvency event. The liability under the FSD regime could be said to be some sort of indirect liability for past wages of employees, as pensions are often treated as deferred pay. However, quite apart from the fact that that argument involves a considerable stretch (not least because the liability is not that of the employer or former employer), it would prove too much. If the potential liability under consideration in these appeals counted as expenses, they would rank ahead of past wages and holiday pay, which have preferential status ie they would fall within category (3), not (5), in para 39 above. It also seems unlikely that it can have been intended that liability under the FSD regime could rank behind provable debts. One would have expected that FSDs and CNs would normally be issued in respect of insolvent companies (that certainly appears to have been the invariable experience so far); accordingly, it would mean that, save in very unusual cases, nothing would be paid in respect of most FSDs issued after an insolvency event. Further, it would be a relatively unusual case where a FSD, let alone a CN, was issued before an insolvency event. As Briggs J said, the investigations, steps and opportunity for representations, required by the 2004 Act, as summarised in para 34 above, are such that a FSD would rarely be issued for many months after the Regulator is first aware of a possible problem, and the time before a CN could be issued could easily be much more than a year. With those preliminary observations, I turn to consider whether the liability under a FSD issued after a target has gone into administration or liquidation (ie after an insolvency event) is (i) a provable debt, or (ii) an expense of the administration/ liquidation, and (iii) if it is neither, whether the court can require the administrator or liquidator to treat it as if it was. Is the liability under a FSD issued after an administration a provable debt? In the light of the reference in rule 13.12(4) to any liability under an enactment, it appears clear that a liability under a CN, which on any view imposes a duty on the target to pay a sum of money, would be capable of giving rise to a liability. The question, therefore, is whether the potential liability under a FSD which was issued after an insolvency event is capable of being a liability falling within the ambit of rule 13.12(1). The definition of provable debt in rule 12.3 is strikingly wide, particularly when the rule is read together with rule 13.12, which defines debt. It is therefore unsurprisingly not in issue that the consequences for a target of, or at least following, the issuing of a FSD constitute a liability within the meaning of rule 13.12. However, where a FSD is issued after the target goes into administration or liquidation, the argument which has to be addressed is whether any potential liability thereby created falls within rule 13.12(1), because, if it does not, then it cannot constitute a debt for the purposes of the rule, and therefore cannot be a provable debt for the purposes of rule 12.3. The primary argument advanced in support of the contention that the potential liability under a FSD notice issued after the insolvency event gives rise to a provable debt was based on the contention that it would be a liability to which the company may become subject after [the insolvency event] by reason of any obligation incurred before that date within rule 13.12(1)(b). However, it was also argued that, in the light of the very wide ambit of rule 13.12(3) and its reference to future, contingent and matter of opinion, the potential liability would fall within rule 13.12(1)(a), as the potential liability was, as at the date of the insolvency event, a liability to which the company is subject. Does the potential liability fall within rule 13.12(1)(a)? It is convenient first to deal with the argument that potential liability under a FSD issued against a company after the start of its administration or liquidation gives rise to a liability which falls under rule 13.12(1)(a). This argument is based on the simple proposition that the risk of being issued with a FSD is a contingent liability, and is therefore a liability for the purposes of rule 13.12(1)(a) as a result of rule 13.12(3). If this argument was right, it would avoid the possible problem thrown up by the closing ten words of rule 13.12(1)(b). The argument would be easy to understand were it not for rule 13.12(1)(b). Para (b) of rule 13.12(1) contains a limitation, in that it provides that, if a company in liquidation or administration becomes subject to a liability after the date of the insolvency event, then that liability can only be treated as a debt under that paragraph if it arises by reason of any obligation incurred before that date. If para (a) of rule 13.12(1) could apply to a liability which arises after the insolvency event, then it would not only render para (b) otiose, but it would also effectively override this limitation. In other words, the very limitation which rule 13.12(1)(a) is being invoked to avoid represents the reason why rule 13.12(1)(a) cannot be invoked. It is fair to say that it is somewhat ironic to invoke para (b) to limit the ambit of para (a), when it would appear that the purpose of para (b) is to extend the ambit of para (a). However, the provisions of the Insolvency Rules, and of each rule of those Rules, have to be read in a sensible and coherent way, and one has to read paras (a) and (b) so that they work together. I agree with the view expressed by David Richards J in In re T & N Ltd [2006] 1 WLR 1728, para 115, that para (a) is concerned with liabilities to which the company is subject at the date of the insolvency event, whereas para (b) is directed to those liabilities to which it may become subject subsequent to that date, and that there is no overlap between these two categories. Accordingly, if there is a debt or liability in this case, it cannot fall within para (a): the issue is whether it falls within para (b). Does the potential liability fall within Rule 13.12(1)(b)? There is no doubt that the liability which is imposed on a target on the issuing of a FSD after the commencement of its administration or liquidation is a liability for the purposes of rule 13.12(1)(b), as it is a liability under an enactment within rule 13.12(4). The question is, however, whether it can be said to be a liability which arose by reason of any obligation incurred before the insolvency event. In these cases, a Target companys liability under the FSD scheme arises because it was a member of a group of companies, which, to put it very loosely, fell within the scope of the regime (as the group included a company which had a pension scheme, and that company was a service company, or insufficiently resourced). In order for the liability in issue to fall within rule 13.12(1)(b), therefore, the fact that the Target company was a member of such a group must amount to a sufficient obligation incurred within the meaning of that rule, before the target went into administration. Timing is no problem in the present cases, because each of the Target companies in the Lehman and Nortel groups were members of a group which fell within the scope of the regime, as I have used that expression, well before they went into administration. That issue thus centres on the meaning of the word obligation in rule 13.12(1)(b). The meaning of the word obligation will, of course, depend on its context. However, perhaps more than many words, obligation can have a number of different meanings or nuances. In many contexts, it has the same meaning as liability, but it clearly cannot have such a meaning here. Indeed, in the context of rule 13.12, it must imply a more inchoate, or imprecise, meaning than liability, as the liability is what can be proved for, whereas the obligation is the anterior source of that liability. Where a liability arises after the insolvency event as a result of a contract entered into by a company, there is no real problem. The contract, in so far as it imposes any actual or contingent liabilities on the company, can fairly be said to impose the incurred obligation. Accordingly, in such a case the question whether the liability falls within para (b) will depend on whether the contract was entered into before or after the insolvency event. Where the liability arises other than under a contract, the position is not necessarily so straightforward. There can be no doubt but that an arrangement other than a contractual one can give rise to an obligation for the purposes of para (b). That seems to follow from rule 13.12(4). As Lord Hoffmann said, (albeit in a slightly different context) in relation to contingent liabilities arising on a liquidation, in Secretary of State for Trade and Industry v Frid [2004] 2 AC 506, para 19, [h]ow those debts arose whether by contract, statute or tort, voluntarily or by compulsion is not material. However, the mere fact that a company could become under a liability pursuant to a provision in a statute which was in force before the insolvency event, cannot mean that, where the liability arises after the insolvency event, it falls within rule 13.12(1)(b). It would be dangerous to try and suggest a universally applicable formula, given the many different statutory and other liabilities and obligations which could exist. However, I would suggest that, at least normally, in order for a company to have incurred a relevant obligation under rule 13.12(1)(b), it must have taken, or been subjected to, some step or combination of steps which (a) had some legal effect (such as putting it under some legal duty or into some legal relationship), and which (b) resulted in it being vulnerable to the specific liability in question, such that there would be a real prospect of that liability being incurred. If these two requirements are satisfied, it is also, I think, relevant to consider (c) whether it would be consistent with the regime under which the liability is imposed to conclude that the step or combination of steps gave rise to an obligation under rule 13.12(1)(b). When deciding whether a particular state of affairs or relationship is sufficient to amount to the incur[ring] of an obligation, by reason of which the liability arose, considerable assistance can, I think, be gained from the majority decision in Winter v Inland Revenue Commissioners, In re Sutherland (decd) [1963] AC 235. That case was concerned with whether an arrangement was within the expression contingent liabilities in section 50 of the Finance Act 1940. As Lord Reid explained at p 247, at the relevant date, the position of the company was that, by applying for and accepting allowances in respect of these ships, it had become bound by the statute to pay tax under a balancing charge when it ceased to use these ships in its trade, if the moneys which it received for them exceeded any expenditure on them which was still unallowed. contingent liability as at the relevant date. Lord Reid said this at p 248: [I]f an Act says I must pay tax if I trade and make a profit, I am not before I begin trading under a contingent liability to pay tax in the event of my starting trading. In neither case have I committed myself to anything. But if I agree by contract to accept allowances on the footing that I will pay a sum if I later sell something above a certain price I have committed myself and I come under a contingent liability to pay in that event. In those circumstances, the majority concluded that the obligation was a Reference to a passage in Lord Hodsons dissenting speech highlights the effect of this reasoning. At p 257, he said that he thought that the risk of attracting liability is not enough and the argument involves a misconception of what is meant by contingent liabilities in their context, and went on to point out that [t]here may be no day of reckoning; the ships may never be sold; if there is a sale there may be a balancing allowance not a balancing charge. This contrast is also highlighted by what Lord Guest (who agreed with Lord Reid) said at p 264: The claim for initial allowances for what has been described as depreciation is the voluntary choice of the taxpayer, but, once he has obtained such allowances, he is automatically involved by the operation of law in the payment of balancing charges, if the assets are parted with at a price greater than the written down value in the circumstances defined in section 292 of the Income Tax Act, 1952 It is true that in Sutherland, the House of Lords was concerned with the meaning of contingent liabilities in the context of estate duty, whereas these appeals are concerned with the meaning of obligation from which a contingent liability derives in insolvency legislation. It was suggested that the reasoning of Lord Reid should not, therefore, be relied on here. I do not agree. Lord Reid gave a characteristically illuminating and authoritative analysis of an issue of principle. It appears to me that the issue of (i) what is a contingent liability and (ii) what is an obligation by reason of which a contingent liability arises, are closely related. In Sutherland the House had to decide whether what a company had done was sufficient, in Lord Reids words, to have committed [it]self to a contingent liability. As I see it, that is much the same thing as having incurred an obligation from which a contingent liability may arise, for the purposes of rule 13.12(1)(b). I note that the approach to contingent liabilities adopted in Sutherland was considered helpful in two cases concerned with insolvency law decided by judges experienced in the field Pennycuick J In re SBA Properties Ltd [1967] 1 WLR 799, 802D 803E, and David Richards J in In re T & N Ltd, [2006] 1 WLR 1728, paras 48 61. In the latter case, the judge pointed out at para 61 that the case before him was, as these cases are, in one important respect a stronger case than Sutherland, because the majority did not regard as decisive that the liability to pay the balancing charges would arise only as a result of the company's own choice to sell the ships. In this case there is no question of volition. The reasoning of Lord Reid, and of Lord Guest, in Sutherland self evidently supports the argument that the potential FSD regime liabilities in the present cases fall within rule 13.12(1)(b), even where the FSD is not issued until after the relevant insolvency event. More specifically, if one asks whether those potential liabilities of the Target companies in these two appeals satisfy the requirements suggested in para 77 above, it appears to me that the answer is yes. As to the first requirement, on the date they went into administration, each of the Target companies had become a member of a group of companies, and had been such a member for the whole of the preceding two years the crucial look back period under the 2004 Act. Membership of a group of companies is undoubtedly a significant relationship in terms of law: it carries with it many legal rights and obligations in revenue, company and common law. As to the second requirement, by the date they went into administration, the group concerned included either a service company with a pension scheme, or an insufficiently resourced company with a pension scheme, and that had been the position for more than two years. Accordingly, the Target companies were precisely the type of entities who were intended to be rendered liable under the FSD regime. Given that the group in each case was in very serious financial difficulties at the time the Target companies went into administration, this point is particularly telling. In other words, the Target companies were not in the sunlight, free of the FSD regime, but were well inside the penumbra of the regime, even though they were not in the full shadow of the receipt of a FSD, let alone in the darkness of the receipt of a CN. So far as the third requirement is concerned, I would simply refer back to the points made in paras 58 63 above. The earlier authorities I should refer to the authorities which the Court of Appeal and Briggs J understandably held bound them to reach a contrary conclusion. Those authorities were mostly concerned with individual bankruptcy rather than corporate insolvency. However, the meaning of the expression debt in the two regimes is very similar: rule 12.3 applies to both, and section 382 of the 1986 Act has a very similar definition of provable debt for bankruptcies as rule 13.12 has for liquidations. In a number of cases, it has been held that, where an order for costs was made against a person after an insolvency process had been instituted against him, his liability for costs did not arise from an obligation which had arisen before issue of the bankruptcy proceedings, even though the costs order was made in proceedings which had been started before that insolvency process had begun see for instance In re Bluck, Ex p Bluck (1887) 57 LT 419, In re British Gold Fields of West Africa [1899] 2 Ch 7, In re A Debtor (No 68 of 1911) [1911] 2 KB 652, and In re Pitchford [1924] 2 Ch 260. In my view, by becoming a party to legal proceedings in this jurisdiction, a person is brought within a system governed by rules of court, which carry with them the potential for being rendered legally liable for costs, subject of course to the discretion of the court. An order for costs made against a company in liquidation, made in proceedings begun before it went into liquidation, is therefore provable as a contingent liability under rule 13.12(1)(b), as the liability for those costs will have arisen by reason of the obligation which the company incurred when it became party to the proceedings. I have little concern about overruling those earlier decisions, although they are long standing. First, the judgments are very short of any reasoning, and consist of little but assertion. Secondly, they were decided at a time when the legislature and the courts were less anxious than currently for an insolvency to clear all the liabilities of a bankrupt (as they were all concerned with individual insolvencies). Although most of the provisions of rule 13.12 and section 382 can be found in section 30(3), (4) and (8) of the Bankruptcy Act 1914, over the past three hundred years, the legislature has progressively widened the definition of provable debts and narrowed the class of non provable liabilities to quote from the written case of Mr Phillips QC who relied on those cases. Thirdly, those cases are impossible to reconcile logically with the earlier case of In re Smith, Ex p Edwards (1886) 3 Morrell 179, where, on identical facts (save that it was an arbitration rather than litigation) it was held that an order for costs did give rise to a provable debt. Fourthly, the unsatisfactory nature of those decisions can be seen from the way in which the Court of Appeal sought to evade their consequence in Day v Haine [2008] ICR 1102, a case which I consider to have been rightly decided. For the same reasons, I consider that the decisions of the Court of Appeal in Glenister v Rowe [2000] Ch 76 and Steele [2006] 1 WLR 2380 were wrongly decided, although I can see how it might be said that they were justified on the basis of stare decisis. The reasoning of Arden LJ in the latter case at paras 21 23 is instructive, because, as she says, the previous authorities in relation to provable debts suggested a narrower meaning of contingent liability than was adopted by the majority in Sutherland. That observation neatly illustrates why they were wrongly decided. The Report of the Review Committee on Insolvency Law and Practice (the Cork Report, 1982, Cmnd 8558), para 1289, described it as a basic principle of the law of insolvency that every debt or liability capable of being expressed in money terms should be eligible for proof so that the insolvency administration should deal comprehensively with, and in one way or another discharge, all such debts and liabilities. The notion that all possible liabilities within reason should be provable helps achieve equal justice to all creditors and potential creditors in any insolvency, and, in bankruptcy proceedings, helps ensure that the former bankrupt can in due course start afresh. Indeed, that seems to have been the approach of the courts in the 19th century before the somewhat aberrant decisions referred to in para 88 above. Thus, in Ex p Llynvi Coal and Iron Co; In re Hide (1871) LR 7 Ch App 28, 32, James LJ described one of the main aims of the bankruptcy regime as to enable the bankrupt to be a freed man freed not only from debts, but from contracts, liabilities, engagements and contingencies of every kind. If that was true in 1871, it is all the more true following the passing of the 1986 and 2002 Acts, and as illustrated by the amendment to rule 13.12(2) effected following the decision in In re T & N Ltd [2006] 1 WLR 1728, so as to extend the rights of potential tort claimants to prove. It was suggested that para (m) was included in rule 4.218(3) on the assumption that cases such as those mentioned in para 88 above were rightly decided. That may be so. But, even if it is, the fact that a rule has been drafted on the basis that a decision of the Court of Appeal was right does not mean that this court should uphold the decision if satisfied that it was wrong. Conclusion on the provable debt issue I would accordingly dismiss these appeals to the extent of holding that the administrators are bound to meet the liabilities of the Target companies under the FSD regime, but allow the appeals to the extent of holding that these liabilities are to be treated as provable debts. I have had the opportunity of reading in draft the judgment of Lord Sumption on this issue and I agree with it. His reference to Carron Iron Co Proprietors v Maclaren (1855) HL Cas 416 and In re Oriental Inland Steam Co (1873 4) LR 9 Ch App 557 appears to me to be very much in point. I have also found assistance in the careful judgment of Lord Drummond Young in the Outer House in In re Thomas v Burton, liquidator of Ben Line Steamers Ltd [2010] CSOH 174; 2011 SLT 535. Is the liability under a FSD issued after an insolvency event a liquidation expense? Given that the potential FSD liability in each of these cases is a debt falling within rule 13.12(1)(b), and therefore a provable debt within rule 12.3, and the acceptance on all sides that it would not therefore be an expense, it is strictly unnecessary to consider this question. However, it should be addressed as it was fully debated, and the point is of some potential importance, as I do not entirely agree with the courts below as to the effect of the reasoning and decision of the House of Lords in In re Toshoku Finance UK plc [2002] 1 WLR 671. The question which would arise if the potential liability under the FSD regime did not give rise to a provable debt under rule 13.12 where the FSD is issued after the relevant insolvency event, is whether the liability would be within the expression charges and other expenses incurred in the course of the administration within rule 12.2, and, more particularly, within the expression any necessary disbursements by the administrator in the course of the administration, within rule 2.67(1)(f) the equivalent provision in a liquidation being rule 4.218(3)(m). The word necessary in rule 2.67(1)(f) carries with it a legal obligation to pay (or, possibly, in exceptional cases, a moral obligation to pay, as to which see the next section of this judgment). However, that is somewhat circular, as it leaves open the very question which has to be decided, namely whether the liability in question which has been imposed on the company is one which the administrator must pay. Further, a liability may arise during an administration without falling within rule 2.67(1)(f), without being in the course of the administration. In Davidson v Robb [1918] AC 304, 321, Lord Dunedin explained that in the course of his employment had a more limited meaning than during the period of his employment and connoted something which is part of his service namely work or the natural incidents connected with the class of work, a view echoed by Lord Russell in Alderman v Great Western Railway Co [1937] AC 454, 459. While it would be dangerous to treat any formulation as an absolute rule, it seems to me, at any rate subject to closer examination of the authorities and counter arguments, a disbursement falls within rule 2.67(1)(f) if it arises out of something done in the administration (normally by the administrator or on the administrators behalf), or if it is imposed by a statute whose terms render it clear that the liability to make the disbursement falls on an administrator as part of the administration either because of the nature of the liability or because of the terms of the statute. Thus, if an administrator, on behalf of the company, enters into a transaction which gives rise to tax, or starts (or adopts) proceedings which give rise to a liability for costs, that tax or those costs would fall within the rule, as they arise from his actions as administrator during the administration. This conclusion is consistent with the authorities on liquidations see eg In re Beni Felkai Mining Co Ltd [1934] 1 Ch 406, In re Mesco Properties Ltd [1979] 1 WLR 558, affirmed [1980] 1 WLR 96 (tax), In re Trent & Humber Shipbuilding Co; Bailey & Leethams Case (1869) LR 8 Eq 94 and In re Wenborn & Co [1905] 1 Ch 413 (costs). An area in which liquidators have been held liable to meet a statutorily imposed liability is that of property taxes ie business and domestic rates and community charge see, for instance, In re International Marine Hydropathic Co (1884) 28 Ch D 470, In re National Arms & Ammunition Co (1885) 28 Ch D 474, In re Blazer Fire Lighter Ltd [1895] 1 Ch 402, and more recently Exeter City Council v Bairstow [2007] Bus LR 813. The explanations in the judgments in those cases of the basis on which a liquidator has been held liable for rates and (in Kentish Homes) for community charge as an expense of the liquidation, are not entirely consistent. Sometimes it was said to be because the liquidator is retaining the property in question for the benefit of the winding up see eg per Baggallay LJ in Marine Hydropathic at 471 and Fry LJ in National Arms at 481. However, it was also said that the rates should count as an expense on the ground that, because the liquidator remained in rateable occupation of the property in question, the rates for the period should rank as an expense of the liquidation see eg per Bowen LJ in National Arms at 480 and 482, and Vaughan Williams J in Blazer at 406 7. The latter rationale seems to me to represent the current state of the law see per Lord Hoffmann in Toshoku at para 34 and per David Richards J in Exeter at paras 15 19. In my view, therefore, the fact that the liability for rates falling due after an insolvency event on property retained by the liquidator ranks as an expense of the liquidation, is based on the proposition that, as a matter of interpretation, the rating (and community charge) legislation imposes such a liability on the liquidator (and the same logic must apply in an administration). This is consistent with the fact that liability for rates (and community charge), arises from day to day, and the liability is treated as an expense only in respect of the companys occupation of property during the liquidation. This conclusion derives a degree of support from the fact that, in the context of a liquidation, it is always open to a liquidator to disclaim onerous property (under sections 178 182 of the 1986 Act) and, if he chooses not to do so, it would presumably be as a result of a conscious decision to retain the property for the benefit of the creditors. An administrator cannot disclaim property, but there is force in the point that the rating authorities should not be worse off because a company opts for administration rather than liquidation, given that the normal reason for preferring administration to liquidation is to seek a better outcome for creditors and/or shareholders of the company see para 3(1) of Schedule B1 to the 1986 Act. Adopting the approach I have suggested, it appears to me that a potential liability under a FSD or a liability under a CN does not fall within the scope of expenses of an administration within rule 12.2 or rule 2.67(1)(f). First, there is no question of such a liability resulting from any act or decision taken by or on behalf of the administrator or any act or decision taken during the administration. The liability self evidently arises out of events which occurred before the insolvency event. Secondly, I do not consider that the terms of the 2004 Act, properly interpreted, mean that a liability under a CN would be an expense of the administration, if it was not a provable debt under rule 13.12. It is true that the effect of a CN under section 49(3) of the 2004 Act is that it gives rise to a debt payable by the target once it is issued, but it does not seem to me that that can be sufficient to render the payment of the debt a necessary disbursement by the administrator in the course of the administration. The mere fact that an event occurs during the administration of a company which a statute provides gives rise to a debt on the part of the company cannot, of itself, be enough to render payment of the debt an expense of the administration. It would be a debt payable during the period of the administration, but it would not be part of the administration, or a payment which was one of the natural incidents connected with the administration, to use the language of Lord Dunedin in Davidson. In my view, something more would be required, either from the wording of the 2004 Act or from the nature of the liabilities which it imposes, before a CN issued after the targets insolvency event could be held to be an expense of the administration or liquidation. The 2004 Act and the FSD Regulations are silent on the issue of the status of the liability under the FSD regime where the target has suffered or suffers an insolvency event. It is therefore necessary to consider whether there is any indication that can be gathered from the 2004 Act, its aims and procedures, that it was intended that such a liability should rank as an expense of the targets administration or liquidation, if it does not give rise to a provable debt. For the reasons given in paras 59 62 above, it would be remarkable if a liability under a CN issued to a target pursuant to a FSD issued after the target suffered an insolvency event had priority over the targets other unsecured creditors, when a CN, based on precisely the same facts, would not have such priority if it was issued pursuant to a FSD issued notice issued before the insolvency event. I accept that it would be curious if a FSD issued after an insolvency event was significantly less effective than one issued before that event, and indeed that it would be unlikely to result in any sum being paid as explained in para 63 above. However, the notion that liability pursuant to a FSD issued after the target had suffered an insolvency event ranks behind the targets provable debts, is, to my mind, less surprising than the notion that it should rank ahead of them. First, I consider that the balance of anomalies, as discussed in paras 59 63 above, is such that the former appears a much less unlikely outcome. Secondly, as a general proposition, once the facts giving rise to a right to raise a claim (in these cases, by issuing a FSD) exist, it would be very unusual for the beneficiary of the right to be better off as a result of a delay in raising the claim, but it would be far from surprising if the beneficiary were worse off as a result of such a delay. The reason that the courts below reached a different conclusion is best explained by quoting a passage, from the first instance judgment, which the Court of Appeal (in paras 99 101 of Lloyd LJs judgment) expressly approved. At [2011] Bus LR 766, para 146, Briggs J said that Lord Hoffmanns speech in Toshoku established as a general rule that: [W]here by statute Parliament imposes a financial liability which is not a provable debt on a company in an insolvency process then, unless it constitutes an expense under any other sub paragraph in the twin expenses regimes for liquidation and administration, it will constitute a necessary disbursement of the liquidator or administrator. That is the general rule, whether the statute expressly refers to companies in an insolvency process as being subject to the liability, or whether the statute achieves the same result by using a criterion for liability which is insolvency neutral. Any other conclusion would in my judgment attribute an excessive weight to the linguistic method by which different legislation achieved the same result, namely that the statutory obligation in question is a liability of a company in an insolvency process. While it is fair to say that some observations of Lord Hoffmann in Toshoku, if read on their own, may appear to support that general rule, I consider that Briggs Js summary amounts to an incorrect statement of the law. In my view, the general guidance given by Lord Hoffmann in Toshoku is to be found in para 46, where he said that the question of whether [any particular] liabilities should be imposed upon companies in liquidation is a legislative decision which will depend upon the particular liability in question. In a case, such as the present, where (i) the statutory liability is one which could have been imposed before or after liquidation, (ii) the liability does not give rise to a provable debt (as is being assumed for present purposes) and (iii) the statute is completely silent as to how the liability should be treated if it is imposed after an insolvency event, the liability can only be an expense of the liquidation or administration if the nature of the liability is such that it must reasonably have been intended by the legislature that it should rank ahead of provable debts. It would be wrong to suggest that this is a test which may not need to be refined in future cases, but it appears to me to be supported by the facts and arguments raised on these appeals. I do not consider that Toshoku takes matters any further in the present case. Lord Hoffmann explained in para 2 that the liability in Toshoku arose from a statutory provision which stated that: a company is chargeable to corporation tax on profits arising in the winding up of the company. It may be assessed in respect of an accounting period deemed to commence on the liquidation date , and the liquidator is the proper officer liable to pay the tax . [Other relevant statutory requirements were that] profits must be computed on an accruals basis [and] the computation must be made on the assumption that every amount payable under the relationship will be paid in full as it becomes due. In other words, unlike the present cases, Toshoku concerned a tax liability which was imposed on a liquidator, as opposed to the company, and it was a tax which only applied (in specified circumstances) to a company which had gone into liquidation. As Lord Hoffmann said at para 30, [t]here would be little point in a statute which specifically imposed liabilities upon a company in liquidation if they were payable only in the rare case in which it emerged with all other creditors having been paid. Even in such a case, I consider that it would be appropriate for a court to consider whether the legislature intended the liabilities concerned to rank as an expense, but the point made by Lord Hoffmann would clearly be a very powerful factor as to why it should. I therefore would conclude that, if the liability in these cases did not rank as a provable debt, it would not count as an expense of the administration. Does the court have a residual discretion? If I had taken a different view on the provable debt issue, an alternative argument to that just discussed was that the court has the power to direct the administrator of a Target company to accord to the potential liability under the FSD regime a higher ranking than it would be given under the 1986 Act and the Insolvency Rules. In other words, that the court could order the administrator to treat the potential FSD liability as a provable debt (category 5 in para 39 above) even though the effect of the legislation is that it should rank lower (namely category 7). At any rate at first sight, it would be extraordinary if a court, which had decided that a liability did not fall within the definition of provable debts in rule 13.12, could nonetheless go on to decide that it was to be so treated, in the absence of any specific statutory power to do so. Such a course would appear to be wrong in principle, because it would involve a judge effectively overruling the lawful provisions of a statute or statutory instrument. It would also be highly problematic in practice because it would throw many liquidations and administrations into confusion: the law would be uncertain, and many creditors who felt that the statutory ranking caused them unfair prejudice would make applications to the court. If further reasons were required for this conclusion, they may be found in rule 2.67 and in Toshoku. Rule 2.67(2) and (3), referred to in para 42 above, show that, where the Insolvency Rules wish to give the court the ability to change the priority rules, they say so. In the course of his speech in Toshoku at para 38, Lord Hoffmann referred to the proposition whether debts should count as expenses of the liquidation is a matter for the discretion of the court and held that there was no such discretion and disapproved Sir Donald Nicholls V Cs comments in In re Kentish Homes Ltd [1993] BCLC 1375. As Lord Hoffmann made clear in para 41, how a particular liability was to be ranked depended solely on the proper interpretation of the Insolvency Rules. The justification for a contrary view was based on three paragraphs of Schedule B1 to the 1986 Act (Schedule B1), and a number of decisions where the court has ordered a liquidator to take a particular action. Para 13 of Schedule 1 entitles an administrator to make any payment which is necessary or incidental to the performance of his functions. I do not see how that can entitle him, let alone the court to direct him, to treat an unprovable debt as a provable debt (unless, conceivably, there was resulting benefit which would redound for the benefit of the proving creditors, although even then it would be problematic). It can scarcely be said to be incidental or necessary to a persons statutorily prescribed functions to do something inconsistent with those functions. Para 65(3) of Schedule B1 precludes an administrator from paying a creditor who is neither secured nor preferential without the sanction of the court. I cannot see how this provision can be properly interpreted as giving the court a roving commission to change the statutory priorities in a particular case simply because it does not like the consequences of those priorities. It was no doubt intended to apply where the payment in question is necessary or desirable to achieve one of the administrators statutory functions under paragraph 3 of Schedule B1 to the 1986 Act (eg the companys survival or a more advantageous realisation of the companys assets). Para 74 of Schedule B1 entitles a creditor to apply to the court if it considers that the administrator proposes to act in a way which would unfairly prejudice it. This cannot, in my view, apply to a case where the administrator is proposing to do that which the legislation requires him to do. It applies where the administrator is exercising a power, or discretion, most obviously carrying on the companys business in a certain way or selling off an asset of the company, or not performing an obligation, such as paying off creditors in the order mandated by the legislation. Again, it cannot have sensibly been intended to give the court a roving commission to vary the clear statutory ranking of liabilities as summarised in para 39 above. As to the common law, there are a number of cases, starting with In re Condon Ex p James (1874) LR 9 Ch App 609, in which a principle has been developed and applied to the effect that where it would be unfair for a trustee in bankruptcy to take full advantage of his legal rights as such, the court will order him not to do so, to quote Walton J in In re Clark (a bankrupt) [1975] 1 WLR 559, 563. The same point was made by Slade LJ in In re TH Knitwear (Wholesale) Ltd [1988] Ch 275, 287, quoting Slater J in In re Wigzall, Ex p Hart [1921] 2 KB 835, at 845: where a bankrupts estate is being administered under the supervision of a court, that court has a discretionary jurisdiction to disregard legal right, which should be exercised wherever the enforcement of legal right would be contrary to natural justice. The principle obviously applies to administrators and liquidators see In re Lune Metal Products Ltd [2007] 2 Bus LR 589, para 34. However, none of these cases begins to justify the contention that an administrator can be ordered to change the ranking of a particular debt simply because the statutory ranking appears unattractive in this case because it means that a particular debt is ranked lower than other unsecured debts because (as I am assuming) it is not provable according to the statutory formula. Indeed, observations in Lune Metal, paras 35 38, tend to support the notion that the court cannot sanction a course which would be outside an administrators statutory powers. It is right to mention that the court has sanctioned an otherwise unauthorised payment where a company in administration wishes to avoid the cost of going into compulsory liquidation. In such cases, which include In re UCT (UK) Ltd [2001] 1 WLR 436 and Lune Metal, the terms on which the administrators are discharged includes a direction which ensures that the preferential creditors are in no worse a position than if there had been a compulsory liquidation. However, those cases provide no assistance to the argument that the court can direct a FSD regime liability to be promoted ahead of its statutory ranking, as (i) the direction benefits the creditors with provable debts, (ii) the direction is tied to the discharge of the administrators, not the performance of their on going functions, and (iii) the direction does not involve any conflict with statutory ranking of claims, and in particular, it does not harm the interests of the creditors with provable debts: on the contrary, they benefit from the direction. In the present cases, I understand the attraction of the argument that the court should order the administrators of the Target companies to treat the potential FSD liabilities as provable debts (if they are not so provable): otherwise, they may be valueless. However, I come back to the point that, if the effect of the Insolvency Rules is that the liabilities are not provable debts, there is no basis for the court deciding that they are. It would be wrong for the courts to override the statutory ranking, especially given it would cause significant prejudice to others (in this case the creditors with provable debts). That is particularly true as the liabilities are statutory, so that the legislature could have dealt with their status in a liquidation or administration (as indeed it did in relation to a section 75 debt). The argument to the contrary also relied on the fact that the liability of a target under the FSD regime would have been a provable debt if the FSD had been issued before the insolvency event. That is undoubtedly an argument in favour of the liability where the FSD is issued after an insolvency event being a provable debt, as mentioned above. However, if the liability is not a provable debt in such circumstances, the argument does not support the contention that the administrator can be required to treat it as if it were. As already mentioned, the mere fact that the court does not think it fair that a particular statutory liability should not rank as a provable liability under the relevant statutory provisions is not enough to justify a decision to alter the effect of those provisions. The point can be taken a little further. The decision of the courts below, that the liability in these cases was an expense of the administration and not a provable debt, was unattractive for the reasons given in paras 59 62 above. It seems to me that, if, as is suggested by the argument I am considering, the courts had had power to do so, they should have gone on to hold that it would nonetheless direct the administrators to treat the liability as a provable debt. Such a direction would not merely have been a surprising one, but it would have been one which flew in the face of Lord Hoffmanns observations at paras 38 41 in Toshoku, disapproving In re Kentish Homes Ltd [1993] BCLC 1375. Conclusion I would accordingly allow these appeals to the extent of declaring that a Target companys liability under the FSD regime, arising pursuant to a FSD issued after the company has gone into administration, ranks as a provable debt of the company, and does not rank as an expense of the administration. LORD SUMPTION (with whom Lord Mance and Lord Clarke agree) I agree with the order proposed by Lord Neuberger and with his reasons. I add a few observations of my own on a point which might be regarded as a matter of wholly abstract jurisprudence if it were not fundamental to the analysis of the effect of this particular scheme. The critical question is what constitutes an obligation incurred for the purpose of rule 13.12(1)(b) of the Insolvency Rules 1986. The context shows it means a legal rule applying before the date when the company goes into liquidation which may, contingently on some future event, give rise to a debt or liability arising after that date. But it cannot extend to every legal rule which may on any contingency have that effect. Otherwise every debt or liability would be provable irrespective of the date when it accrued, unless the law changed after the company went into liquidation. Since the scheme depends on there being a common date as at which the fund falls to be valued and distributed pari passu, that cannot be right. Some limitation must be read into sub paragraph (b). But what limitation? The paradigm case of an obligation within the sub paragraph is a contract which was already in existence before the company went into liquidation. It is implicit in the argument of those who contend on this appeal that there is no provable debt, in this case that contract is not just the paradigm case but the only one. Yet when one asks what it is about a contract that qualifies it as a relevant source of obligation, the answer must be that where a subsisting contract gives rise to a contingent debt or liability, a legal relationship between the company and the creditor exists from the moment that the contract is made and before the contingency occurs. The judgment of Lord Reid in In re Sutherland (decd) [1963] AC 235 was concerned with a very different statutory scheme, but his analysis is nevertheless illuminating because it makes precisely this point at pp 247 8: It is said that where there is a contract there is an existing obligation even if you must await events to see if anything ever becomes payable, but that there is no comparable obligation in a case like the present. But there appears to me to be a close similarity. To take the first stage, if I see a watch in a shop window and think of buying it, I am not under a contingent liability to pay the price: similarly, if an Act says I must pay tax if I trade and make a profit I am not before I begin trading under a contingent liability to pay tax in the event of my starting trading. In neither case have I committed myself to anything. But if I agree by contract to accept allowances on the footing that I will pay a sum if I later sell something above a certain price I have committed myself and I come under a contingent liability to pay in that event. Contract is not the only legal basis on which a contingent obligation of this kind may arise. A statute may also give rise to one. A good example is the substantive obligation which English law has always held to be owed by a debtor under a foreign judgment. It is the basis of the common law action to enforce it. Another is the obligation of a creditor arising from the statutory scheme of distribution in an English insolvency, not to seek by litigation in a foreign court a priority inconsistent with that scheme: see Carron Iron Co Proprietors v Maclaren (1855) HL Cas 416, 440 per Lord Cranworth LC, In re Oriental Inland Team Co (1873 4) LR 9 Ch App 557, and in the United States Cole v Cunningham (1882) 133 US 107. In both of these examples, a legal relationship is created between the debtor and other persons, albeit without contract. In the first, it is the legal relationship with the judgment creditor arising from the fact that the judgment debtor was subject to the jurisdiction of the foreign court, whether by virtue of residence or submission. In the second, it is the legal relationship of the creditor with the debtor company and with other creditors arising from the statutory scheme of distribution. If the mandatory provisions of a statute may create a legal relationship between the company and a creditor (or potential creditor) giving rise to a provable debt, then there is no reason why it should not do so contingently upon some future event. In In re Sutherland decd [1963] AC 235 the companys liability for balancing charges by way of recoupment of capital allowances, which the majority held should be taken into account when valuing its assets, did not exist at the valuation date because at that date it was still contingent upon a future sale of those assets. It was nevertheless a relevant contingent liability for valuation purposes, because at the valuation date there was a legal relationship between the companies and the Crown arising from the statutory scheme which made capital allowances subject to balancing charges in the contingency of a sale. In Secretary of State for Trade and Industry v Frid [2004] 2 AC 506 the Secretary of State was subrogated by statute to the claims of employees to compensatory notice pay and redundancy payments. The liability of the company to meet those claims did not arise until the employees were dismissed, which was after the company went into liquidation. But the obligation existed before, because the statutory scheme superimposed upon the contract of employment created the legal relationship which made the compensatory notice pay and the redundancy payments due. Lord Hoffmann, with whom the rest of the committee agreed, said at paras 17, 19: if the Secretary of State had agreed by contract before the insolvency date to guarantee any future liability of the company to pay compensatory notice pay or make redundancy payments to employees under the 1996 Act, the contract of guarantee would have created a contingent liability on the part of the company to reimburse the Secretary of State which was a debt at the insolvency date and became capable of set off when the employees were afterwards paid. The next question is whether it makes a difference that the contingent liability existed by virtue of a statute rather than a contract and, not being consensual, that it involved no direct contract or other relationship with the employees or the company. If a statutory origin does not prevent set off in the case of debts due and payable at the insolvency date, I do not see why it should make any difference that the statute creates a contingent liability which exists before the insolvency date but falls due for payment and is paid afterwards. In the Victoria case of Lofthouse v Commissioner of Taxation [2001] 164 FLR 106, the statute conferred upon the Commissioner an indemnity against the directors of a company if tax payments under the Australian equivalent of PAYE were subsequently held repayable as insolvent transactions (in effect, preferences). The indemnity was contingent upon the tax being determined to be repayable after the employer had gone into liquidation, but the statutory scheme created the relevant legal relationship between the directors and the Commissioner as soon as the tax payments were made by the company. They were therefore provable as contingent debts in the insolvency of the directors. Warren J observed at p 118: The potential liability of the third parties in this proceeding is a contingent liability within the meaning of s 82(1) of the Act because the potential liability arose from an obligation pursuant to an indemnity. Furthermore, all the objective circumstances giving rise to the potential for the invocation of the chose in action represented by the right to indemnity had transpired prior to the third parties entering into their composition under Pt X of the Bankruptcy Act. given after the commencement of the insolvency was not provable as a contingent debt, even if the litigation was in progress when the company went into liquidation. The case law begins with In re Bluck Ex p Bluck (1887) 57 LT 419, and continues with In re British Gold Fields of West Africa [1899] 2 Ch 7, In re A Debtor (No 68 of 1911) [1911] 2 KB 652, In re Pitchford [1924] 2 Ch 260, Glenister v Rowe [2000] Ch 76. The reasoning of these cases has recently been applied to other claims said to represent contingent liabilities: see R (Steele) v Birmingham City Council [2006] 1 WLR 2380. There are a number of problems about these cases. One of them, as it seems to me, is the absence of any real attempt to analyse the effect of the statutory scheme in creating an obligation to meet a liability contingently on some specified event. In the earlier cases, this can perhaps be regarded as the legacy of the older principle which admitted only contractual debts to proof. But that consideration cannot explain the more recent decisions. In my view they were wrongly decided. In the costs cases, I consider that those who engage in litigation whether as claimant or defendant, submit themselves to a statutory scheme which gives rise to a relationship between them governed by rules of court. They are liable under those rules to be made to pay costs contingently on the outcome and on the exercise of the courts discretion. An order for costs made in proceedings which were begun before the judgment debtor went into liquidation is in my view provable as a contingent liability, as indeed it has been held to be in the case of arbitration proceedings: In re Smith, Ex p Edwards (1886) 3 Morrell 179. In both cases, the order for costs is made against some one who is subject to a scheme of rules under which that is a contingent outcome. The fact that in one case the submission is contractual while in the other it is not, cannot make any difference under the modern scheme of insolvency law under which all liabilities arising from the state of affairs which obtains at the time when the company went into liquidation are in principle provable. Of course, an order for costs like many other contingencies to which a debt or liability may arise, depends on the exercise of a discretion and may never be made. But that does not make it special. It is not a condition of the right to prove for a debt or liability which is contingent at the date when the company went into liquidation that the contingency should be bound to occur or that its occurrence should be determined by absolute rather than discretionary factors. In the present case, the Court of Appeal considered itself to be bound by a line of cases in which it was held that a liability for costs arising from a judgment

These appeals raise questions of some significance arising out of the interrelationship of the statutory schemes relating to the protection of employees pensions and to corporate insolvency. In order to protect employees from the adverse consequences of an under funded occupational pension scheme, the Pensions Act 2004 (the 2004 Act) introduced a financial support direction (FSD) regime. This enables the Pensions Regulator in specified circumstances (i) to impose, by the issue of an FSD to some or all of the other group companies (known as targets), an obligation to provide reasonable financial support to the under funded scheme of the service company or insufficiently resourced employer, and (ii) to deal with non compliance with that obligation by imposing, through a Contribution Notice (a CN), a specific monetary liability payable by a target to the trustees. Many UK registered members of the Lehman group of companies and of the Nortel group of companies have gone into insolvent administration. One of those Lehman group companies entered into service contracts with, and ran a pension scheme for the benefit of, employees who worked for other group members. The Nortel group included a company which had a pension scheme, and which was insufficiently resourced to fund that scheme. The pension scheme (the Scheme) in each case was a final salary scheme, which appears to be, and to have been for some time, in substantial deficit. The Pensions Regulator subsequently initiated machinery under the 2004 Act to require certain other group members the target companies to provide financial support for the Scheme. That machinery has been held up so it can be decided how the administrators of a target company should treat that companys potential liability under the FSD regime (in due course the liability under a CN) in a case where the FSD is not served until after the company has gone into administration (or into insolvent liquidation). Specifically, would the liability under such a requirement rank (a) as an expense of the targets administration, (b) pari passu (i.e. equally) with the target companies other unsecured creditors, or (c) as neither? Under option (a) the liability would rank ahead of the unsecured creditors, and may well be paid in full; under option (b) it would rank equally with those creditors; under option (c) it would rank behind them, and would probably be worthless. Briggs J and the Court of Appeal concluded that option (b) was not open to them, and preferred option (a) to option (c). The Supreme Court considers option (b) to be correct, and unanimously allows the appeals to the extent of declaring that a targets liability under the FSD regime, arising pursuant to an FSD issued after the company has gone into administration, ranks as a provable debt of the company, and does not rank as an expense of the administration. Lord Neuberger gives the main judgment of the Court, with which Lord Mance, Lord Clarke and Lord Toulson agree. Lord Sumption gives a short concurring judgment, with which Lord Mance and Lord Clarke agree. The potential liability as a result of an FSD issued after the commencement of an administration or an insolvent liquidation (an insolvent event) can constitute a provable debt within rule 13.12 of the Insolvency Rules 1986 (SI 1925/1986) (the Insolvency Rules). Whilst the potential FSD regime liabilities in the present cases do not fall within rule 13.12(1)(a) [68] [71], they fall within rule 13.12(1)(b) [83]. It is common ground that if a CN had been issued in respect of a target before an insolvent event, it would give rise to a provable debt. The courts below considered that, if a CN were issued after an insolvent event, it would give rise to a provable debt if it was based on an FSD issued before the insolvent event. It appears somewhat arbitrary that the characterisation and treatment of the liability under the FSD regime should turn on when the FSD or CN happens to have been issued, if it is based on a state of affairs which existed before the insolvent event [59]. The courts below felt constrained by a consistent line of authority from reaching the conclusion the Supreme Court has reached, although it appears that they would have so held if they had felt able to do so [56]. These earlier authorities can be overruled: the judgments are very short of reasoning, are inconsistent with another line of authority, and were decided at a time when the legislature and the courts were less anxious than currently for an insolvency to clear all the liabilities of a bankrupt (as they were all concerned with individual insolvencies) [87] [94]. There is no doubt that the liability which is imposed on a target on the issuing of an FSD after an insolvent event is a liability for the purposes of rule 13.12(1)(b), as it is a liability under an enactment within rule 13.12(4). The question is, however, whether it can be said to be a liability which arose by reason of any obligation incurred before the insolvent event [72]. That issue centres on the meaning of the word obligation in rule 13.12(1)(b) [74]. At least normally, in order for a company to have incurred a relevant obligation under rule 13.12(1)(b), it must have taken, or been subjected to, some step or combination of steps which (a) had some legal effect (such as putting it under some legal duty or into some legal relationship), and which (b) resulted in it being vulnerable to the specific liability in question, such that there would be a real prospect of that liability being incurred. If these two requirements are satisfied, it is also relevant to consider (c) whether it would be consistent with the regime under which the liability is imposed to conclude that the step or combination of steps gave rise to an obligation under rule 13.12(1)(b) [77]. In these appeals, all these requirements are satisfied, and accordingly the relevant obligation arose before the target companies went into administration. Given that the potential FSD liability in each of these cases is a provable debt within rule 12.3 of the Insolvency Rules, and therefore it would not be an expense, it is strictly unnecessary to consider whether the liability under an FSD served after an insolvent event would be a liquidation expense, if, as the courts below held, it was not a provable debt [97]. However, given that this issue was fully debated before the Court, and is one of some potential importance, the Court concludes that, if the liability did not rank as a provable debt, it would not count as an expense of the administration [98] [114]. The Court also concludes that if it had taken a different view on the provable debt issue, it would not have held that it had a residual discretion to direct the administrator of a target company to accord to the potential liability under the FSD regime a higher ranking than it would be given under the relevant legislation [115] [127]. Lord Sumption adds some observations about the limitations on what constitutes an obligation incurred for the purpose of rule 13.12(1)(b) of the Insolvency Rules [129] [136].

This is another case arising out of the economically controversial but legally well established policy of the EU relating to parallel imports of genuine goods bearing registered trade marks. Broadly stated, the question at issue is whether a person who has imported goods bearing the mark into the EEA and offered them for sale there without the consent of the trade mark proprietor, is entitled to defend an action for infringement on the ground that the proprietor of the mark is engaged in conduct calculated to obstruct the free movement of such goods between member states or to distort competition in the EEA market for them. Ever since the Trade Marks Act 1994 gave effect in the United Kingdom to directive 89/104/EC, the rights of proprietors of registered trade marks have been governed by a uniform scheme of EU law. That directive has now been replaced by the current directive 2008/95/EC, but the two directives are in the same terms in every respect relevant to the present dispute. I shall refer to them indifferently as the Trade Mark Directive or the directive. The fundamental provisions are articles 5 and 7. Article 5 defines the rights of the trade mark proprietor. It provides, so far as relevant: Rights conferred by a trade mark 1. The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; 3. The following, inter alia, may be prohibited under paragraphs 1 and 2: (a) affixing the sign to the goods or to the packaging thereof; (b) offering the goods, or putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder; (c) importing or exporting the goods under the sign; (d) using the sign on business papers and in advertising. Article 5 is subject to article 7, which provides: Exhaustion of the rights conferred by a trade mark 1. The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent. 2. Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market. It has been accepted ever since the decisions of the Court of Justice in Silhouette International Schmied GmbH & Co. KG v Hartlauer Handelsgesellschaft mbH (Case C 355/96) [1999] Ch 77 and Sebago Inc v GB Unic SA (Case C 173/98) [2000] Ch 558, that the combined effect of articles 5 and 7.1 of the directive is to confer on the trade mark proprietor the exclusive right to control the first marketing in the EEA of goods bearing his trade mark, even if they are genuine goods which have previously been put on the market by him or with his consent outside the EEA. This is the only right attaching to the trade marks which is relevant in the present case. The subsequent decision of the Court in Zino Davidoff SA v A&G Imports Ltd (Joined Cases C 414/99 to 416/99) [2002] Ch 109, underlined its absolute nature by establishing that the consent of the trade mark proprietor had to be such as to amount to an unequivocal renunciation of the right. It could therefore rarely be implied, and never from the mere fact of his having placed the goods on the market outside the EEA and/or his silence on the question whether they had been lawfully placed in the market within the EEA: see paras 53 56. These decisions are understandably unpopular with parallel traders not forming part of the authorised distribution network of the trade mark proprietors. But they are securely established as part of the legal order of the EU in the domain of trade mark protection. Proposals to modify their effect or to adopt a rule of international exhaustion have been firmly rejected by the EC Commission and the Economic and Social Committee and no attempt was made to change the position when the new directive was adopted in 2008. There is an interesting account of these debates in Stothers, Parallel Trade in Europe (2007), at pp. 347 354. The Claimants, Oracle America Inc, were at the relevant time called Sun Microsystems and that is how I shall refer to them. They are manufacturers of computer systems, workstations and related goods. They are also the proprietors of five relevant Community trade marks and two relevant United Kingdom trade marks registered for use in connection with computer hardware. M Tech is a supplier of computer hardware in Manchester, which in 2009 fulfilled a trap order from a purchaser called KSS Associates in Epsom for 64 new Sun disk drives. The disk drives had originally been supplied by Sun to purchasers in China, Chile and the United States. M Tech had bought them through a broker in the United States and imported them into the United Kingdom. Although there was at one time a dispute about this, it is now common ground that Sun had not consented to their being put on the market in the EEA. On the face of it, therefore, M Tech infringed the marks contrary to article 5.1(a) by using them in circumstances where Suns exclusive right had not been exhausted under article 7.1. The present appeal arises out of an application initially made by Sun to Kitchin J for summary judgment for (among other things) damages for the infringement, and an injunction restraining any further infringements of the same kind. There is no challenge to the validity of the trade marks, nor to the facts said to constitute the infringement. M Techs defence is set out in a number of witness statements, whose contents are the basis of a draft pleading served shortly after Sun applied for summary judgment. In summary, M Tech say that Suns trade marks are not enforceable because (i) the object and effect of enforcement would be to partition the EEA market in Sun hardware contrary to the treaty provisions relating to the free movement of goods (articles 34 to 36 of the Treaty on the Functioning of the European Union); and (ii) the exercise of Suns trade mark rights is connected with its distribution agreements, which are said to contain restrictive provisions inconsistent with article 101. After the hearing before Kitchin J, M Tech added a third argument, to the effect that enforcement of Suns trade marks would constitute an abuse of rights as that concept is understood in EU law. Euro defences of this kind have been deployed by alleged infringers of intellectual property rights for many years, and the English courts have varied in the robustness with which they approach them. The dilemma is that litigation devalues intellectual property rights, by increasing the cost and delay associated with their enforcement. It may also serve to confer on the alleged infringer a temporary immunity or an improvement of his bargaining power in settlement negotiations, to which he will turn out not to be entitled. The effect can often extend beyond the parties or transactions in issue, to many other cases in which similar questions might be raised. These factors mean that defences like the present one must be scrutinised with some care, even if that requires a certain amount of analysis. On the other hand, a defendant must be allowed to go to trial if it has raised a triable issue of fact which is relevant in point of law. For obvious reasons, this is especially important when the case is founded on fundamental principles of the European Union such as the free movement of goods and undistorted competition. Kitchin J resolved this dilemma in favour of the trade mark proprietor. He gave summary judgment, ordering (among other things) an inquiry as to damages and an injunction. The Court of Appeal (Lord Neuberger of Abbotsbury MR, Arden LJ and Tomlinson LJ) allowed the appeal and set aside the order. This court has been invited to order a reference to the Court of Justice of the European Union. It is I think common ground that if there is an arguable defence in EU law, there will have to be a reference at some stage, either now or after the facts have been found at a trial. But the first question is whether there is. Articles 34 to 36: Free movement of goods Articles 34 and 35 of the treaty prohibit quantitative restrictions on imports and exports between member states and measures having equivalent effect. Both are subject to article 36, which provides that they do not apply to prohibitions or restrictions. justified on grounds of. the protection of industrial and commercial property, provided that these do not constitute a means of arbitrary discrimination or a disguised restriction on trade between member states. The facts on which M Tech relies as engaging these provisions are disputed, at least in part, but must for present purposes be assumed to be true. They can be summarised as follows. There is a large global market for second hand computer hardware, much of which is in the hands of independent resellers who do not belong to the manufacturers authorised distribution networks. In 2007, according to M Tech, the secondary market in the EEA for Sun hardware alone was worth US$1.07 billion, of which US$0.64 billion was sold by independent resellers. Much of the trade which independent resellers handle is entirely lawful because it involves goods which were previously marketed in the EEA by or with the consent of the trade mark proprietors. The allegation is that since 2007 Sun has deliberately set about securing this market for itself and its authorised dealers by declining to supply information which would enable independent resellers to discover whether any particular equipment was first put on the EEA market by or with Suns consent. This information is not available from any other source. It is not apparent from the goods themselves. Nor can it be inferred from the circumstances in which they have been acquired. This is because the same goods may be resold several times in the course of their serviceable life and they are not necessarily located in the same territory as the vendor or broker selling them. The result, they say, is to produce a chilling effect on independent sellers, deterring them from dealing in any Sun hardware, whether it is legitimately present on the EEA market or not, because their inability to distinguish between the two exposes them to the risk of enforcement actions by Sun. This risk is increased by the vigour with which Sun enforces its trade mark rights against independent resellers found dealing in the EEA in hardware which has not been marketed there by them or with their consent. The combination of aggressive enforcement of its trade mark rights and the withholding of information about provenance has, says M Tech, both the object and the effect of eliminating the legitimate as well as the illegitimate parallel trade in the EEA, thus giving Sun effective control of the secondary market in its products there, and enabling them to partition that market through its control of an authorised network of dealers. M Tech say that they have been harmed by Suns practice of withholding information about the provenance of their products, because that practice was among the reasons why they had largely ceased to deal with Sun equipment by about 2007 or 2008. The KSS transaction of 2009 is said to have occurred as a result of a failure of their ordinary procedures. However, it is important to note that the 64 disk drives supplied to KSS were new goods which were imported into the EEA and first marketed there by M Tech themselves, without Suns consent as they now accept. M Tech do not say that this happened as a result of any policy on Suns part of withholding information about the provenance of the goods. The position is exactly the same in relation to transactions affected by the injunction. In the form that Kitchin J granted it, the injunction restrained only the marketing by M Tech within the EEA of Suns trade marked goods which had not previously been marketed there by Sun or with its consent. There is a proviso designed to ensure that Sun does supply information about the provenance of goods potentially affected by the injunction. Its effect is that the injunction is not to apply to goods marketed by M Tech unless Sun have confirmed within ten days of being told the serial and part numbers of the goods in question that their records show that they have not been put on the EEA market by them or with their consent. It will be apparent that it is not good enough for M Techs purposes to establish a breach of the treaty. It has to show that that breach gives them a defence to an action for infringement of the marks. There is a principle of English public policy, which is common to the national legal systems of most member states, that a person may not profit from his own illegal act. The Court of Justice has held that it is open to member states to apply that principle to causes of action arising from directly applicable provisions of EU law, as indeed it has sometimes done itself: see Courage Ltd v Crehan (Case C 453/99) [2002] QB 507, at para 31. However, Mr. Vajda QC (who appeared for M Tech) disclaimed any reliance on the principle. His case is that Sun has no enforceable rights under article 5 of the Trade Mark Directive in the circumstances of this case, because that article is subject to an implied limitation to be derived as a matter of construction from articles 34 to 36 of the EU treaty. The effect of the suggested limitation is to preclude any exercise of trade mark rights which would have the object or effect of partitioning the EU internal market. What this amounts to is a general suspension of a proprietors trade mark rights as against the entire EEA market, and not just in respect of those transactions which are affected by Suns policy of refusing to disclose the provenance of the goods. M Tech must, as it seems to me, put its case in this way because the chilling effect on the secondary market, which is said to result from that policy, has not affected the particular transaction which has given rise to the allegation of infringement in this case and cannot affect any future transactions restrained by the injunction. It follows that the fundamental question on this appeal is whether the implied limitation on the application of article 5 of the directive for which Mr. Vajda contends can be supported as a matter of EU law. The Trade Mark Directive is in most respects substantially based on the case law of the Court of Justice as it had developed over the two previous decades. It is a harmonising measure concerned with (among other things) the achievement of the internal market and the free movement of goods: see recitals (2) and (10). Its efficacy as a harmonising measure uniformly applicable across the whole of the EU depends on treating it as an exhaustive statement of the rights of trade mark proprietors. For that reason, the Court of Justice held in Silhouette International Schmied GmbH & Co. KG v Hartlauer Handelsgesellschaft mbH (Case C 355/96) [1999] Ch 77, at para 25 that articles 5 to 7 of the Trade Mark Directive must be construed as embodying a complete harmonisation of the rules relating to the rights conferred by a trade mark. In Zino Davidoff SA v A&G Imports Ltd (Joined Cases C 414/99 to 416/99) [2002] Ch 109 the Court of Justice reaffirmed the principle, observing that articles 5 to 7 of the Directive accordingly define the rights of proprietors of trade marks in the Community: paras 32, 39. These statements reflect the general rule that where a particular area of commercial activity engaging the principle of the free movement of goods is regulated by harmonising legislation of the EU, then that legislation supersedes the general provisions of articles 34 to 36 of the treaty. The rule, which originates in the decision of the Court of Justice in Tedeschi v Denkavit Commerciale Srl (Case 5/77) [1977] ECR 1555, has been reiterated many times in many contexts, including the EU legislation relating to trade marks: see Bristol Myers Squibb v Paranova A/S (Joined Cases C 427/93, C 429/93, C 436/93) [2003] Ch 75 at paras 25 26; Phytheron International SA v Jean Bourdon SA (Case C 352/95) [1997] ECR I 1729 at para 17. Its rationale is not that the EU legislator is at liberty to override or displace the provisions of the treaty. It is that harmonisation measures are directed to the achievement of the single market. They must therefore be treated, assuming that they are valid, as giving effect in the relevant commercial context both to the principle of the free movement of goods and to the limitations on that principle embodied in article 36. In its Guide to the Application of Treaty Provisions governing the Free Movement of Goods (2010), at para 3.1.1, the European Commission, after stating the Tedeschi principle, puts the point in this way: This is due to the fact that harmonising legislation can be understood as substantiating the free movement of goods principle by establishing actual rights and duties to be observed in the case of specific products. Therefore, any problem that is covered by harmonising legislation would have to be analysed in the light of such concrete terms and not according to the broad principles enshrined in the treaty. Mr. Vajda submits that the treaty remains relevant as the dominant instrument which informs the construction of the directive. For my part, I need no persuasion of this. To say that the directive is the relevant source of law is entirely consistent with resort to the treaty as an aid to discovering what it means. The Trade Mark Directive must be construed on the assumption that it was intended to be consistent with treaty provisions relating to the free movement of goods, and indeed with other relevant treaty provisions. The case law which I shall cite below can be treated as so many variations on that theme. But I do not think that this carries the argument any further, because there is no potential inconsistency between the language of the directive and the provisions of the treaty which calls to be resolved by reference to the latter. This is because the scheme of articles 5 and 7 of the directive already embodies both the primary provisions governing the free movement of goods in articles 34 and 35, and the limited exception in article 36 for the protection of industrial and commercial property. Article 5 of the directive provides that the proprietor of a trade mark shall be entitled to exercise certain rights, including the right to prevent the use by others of his own or an identical trade mark in connection with goods of the class for which the mark is registered. It is not qualified by any proviso relating to the free movement of goods within the EU, because it does not need to be. The reason is that the reconciliation between article 5 of the directive and articles 34 to 36 of the treaty is achieved in the directive by article 7. The rights derived from article 5 of the directive are exhausted under article 7.1 as soon as the goods are first put on the market in the EU by or with the consent of the proprietor of the mark. Thereafter, subject to article 7.2, the proprietor has no subsisting rights capable of engaging the prohibition in articles 34 and 35 of restrictions on trade between member states. As the Court of Justice observed in Bristol Myers Squibb v Paranova A/S (Joined Cases C 427/93, C 429/93, C 436/93) [2003] Ch 75 at para 40: Article 7 of the Directive, like article 36 of the treaty, is intended to reconcile the fundamental interest in protecting trade mark rights with the fundamental interest in the free movement of goods within the common market, so that those two provisions, which pursue the same result, must be interpreted in the same way. The one exception to the EU rule of exhaustion stated in article 7.1 of the directive is the situation envisaged by article 7.2. This deals with the only circumstances in which a proprietor may, by virtue of his trade mark, control the marketing (commercialisation) of the goods after they have been put on the market in the EEA by him or with his consent. It is therefore qualified by the requirement that there should be legitimate reasons for him to exercise that control. Since the exception in article 36 for the protection of industrial or commercial property does not extend to the use of the rights derived from that property as disguised restrictions on trade between member states, it goes without saying that a desire to achieve such restrictions does not constitute legitimate reasons. The case law of the Court of Justice accordingly differentiates between (i) cases where the goods have not previously been marketed in the EEA by the proprietor or with his consent and the proprietor is seeking to exercise his rights under article 5 of the Trade Mark Directive in circumstances where his rights are not yet exhausted under article 7.1, and (ii) cases governed by article 7.2, where the goods are legitimately in circulation within the EEA but the proprietor nevertheless claims to have legitimate reasons to oppose their further commercialisation. Category (i): Enforcement to prevent first marketing in the EEA The law relating to cases in this category was stated in EMI Records Ltd v CBS United Kingdom Ltd (Case 51/75) [1976] ECR 811. This case was decided long before the first Directive was adopted in 1989, and turned on direct application of what are now articles 34 to 36 of the treaty. The main question at issue was whether EMI, which owned the Columbia trademark throughout the European Community, could consistently with those provisions of the treaty prevent CBS from marketing in the Community records bearing the mark that had been imported from third countries. The Court considered that the principle of the free movement of goods was incapable of restricting the right of a trade mark proprietor to prevent the first marketing within the Community of goods imported from outside the Community: 9 Article 36, in particular, after stipulating that Articles [34 and 35] shall not preclude restrictions on imports, exports or goods in transit justified inter alia on grounds of the protection of industrial and commercial property, states that such restrictions shall in no instance constitute a means of arbitrary discrimination or disguised restriction on trade between Member States. 10 Consequently the exercise of a trade mark right in order to prevent the marketing of products coming from a third country under an identical mark, even if this constitutes a measure having an effect equivalent to a quantitative restriction, does not affect the free movement of goods between Member States and thus does not come under the prohibitions set out in Article [34] et seq. of the Treaty. In such circumstances the exercise of a trade mark right does 11 not in fact jeopardize the unity of the common market which Article [34] et seq. are intended to ensure. 21 It follows that neither the rules of the Treaty on the free movement of goods nor those on the putting into free circulation of products coming from third countries nor, finally, the principles governing the common commercial policy, prohibit the proprietor of a mark in all the Member States of the Community from exercising his right in order to prevent the importation of similar products bearing the same mark and coming from a third country. This decision is not an aberration, nor does it depend on any quirk of the facts. It has subsequently been applied in the context of the corresponding rule of exhaustion relating to patent protection: see Generics (UK) Ltd and Harris Pharmaceuticals Ltd v Smith Kline & French Laboratories Ltd. (Case C 191/90) [1992] ECR I 5335, at para. 17. It is regularly cited as authoritative by Advocates General, for example Advocate General Jacobs in his opinions in Criminal proceedings against Aim Richardt and Les Accessoires Scientifiques (Case C 367/89) [1991] ECR I 4621, at para 14, and Silhouette [1999] Ch 77, at para 49. It has continued to be regarded as self evident by text book writers: see, in particular, Kerlys Law of Trade Marks and Trade Names, 15th ed. (2011), para 16.091. In Levi Strauss & Co v Tesco Stores Ltd [2003] RPC 18, Pumfrey J observed at para 51 that it could hardly be clearer. It has formed, with the principle of exhaustion, the basis for the application of the principles of free movement in the context of trade marks and other intellectual property rights. I agree with this observation, and I think that it is worth pausing to note the context in which it was made. The Levi Strauss case was, like the present one, concerned with goods imported into the European Community without the consent of the trade mark proprietor. It had been joined in the same reference to the Court of Justice as Zino Davidoff SA v A&G Imports Ltd (Joined Cases C 414/99 to 416/99) [2002] Ch 109. I have already referred to the Courts decision on this reference as part of a consistent line of authority for the propositions (i) that the Directive must be construed as a definitive statement of the harmonised law concerning the rights of trade mark proprietors, and (ii) that it confers on trade mark proprietors a right to control the first marketing of their goods in the EEA save in cases where that right had been unequivocally renounced. Pumfrey J, after noting these propositions and referring to the statement of principle in EMI Records, proceeded to reject a submission very similar to M Techs in the present case, that the exercise of a right to control the first marketing of the goods in the EEA could be precluded by the treaty provisions relating to the free movement of goods. He gave summary judgment in favour of the proprietor, and declined to refer the question to the Court of Justice: see paras 51 55, 58. Category (ii): Enforcement to prevent further commercialisation The position in relation to the exercise of the proprietors extended right under article 7.2 is different. This is because in cases governed by article 7.2 the goods have by definition been put onto the market in the EEA by or with the consent of the proprietor, who is seeking to prevent their further commercialisation. It follows that the principle of the free movement of goods may be engaged, depending on the facts. The great majority of cases in this category are repackaging cases. Their characteristic feature is that the trade mark proprietor is seeking to prevent a trader who has acquired the proprietors branded goods in one member state from altering them so as to enable them to be sold in another member state, commonly by repackaging them with the same mark so as to comply with different national languages, regulations or marketing practices. The proprietor in these cases is generally attempting to exercise his trade mark rights in a way which directly partitions the internal market by objecting to a repackaging which is necessary to enable the goods to be sold in a particular national market. The case law on what may constitute legitimate reasons really begins with the decision of the Court of Justice in Hoffmann La Roche AG & Co v Centrafarm Vertriebsgesellschaft Pharmazeutischer Erzeugnisse mbH (Case C 102/77) [1978] ECR I 1139, but the leading modern decision is Bristol Myers Squibb v Paranova A/S (Joined Cases C 427/93, C 429/93, C 436/93) [2003] Ch 75. Two arguments were advanced in Bristol Myers Squibb to justify the proprietors position. The first was that article 7.1 provided for the exhaustion of the proprietors trade mark rights only in respect of the goods in the exact form in which they were originally put on the market in the EEA. Therefore, even without article 7.2, the proprietor was said to be entitled to object to their being marketed in their repackaged form. The Court of Justice rejected this contention because one of the objectives of the EU principle of exhaustion was precisely to allow trade in branded goods between member states once they had been put on the market in the EEA by or with the consent of the trade mark proprietor: paras 34 37. The second argument was that article 7.2 justified the proprietors position because there were legitimate reasons for opposing the further commercialisation of the goods in their repackaged form. In addressing this argument, the Court took it for granted that the protection of a national market within the EU was not a legitimate reason. It then proceeded to formulate the conditions on which a trade mark proprietor might oppose repackaging which was necessary for sales to be made in a particular market. Broadly speaking, the least that he would have to show was that his opposition was objectively justified by some adverse effect of the repackaging on the condition or reputation of the goods. The same principles were applied in two cases decided at the same time, Eurim Pharm Arzneimittel GmbH v Beiersdorf AG (Joined Cases C 71 73/94) [1996] ECR I 3603 and MPA Pharma GmbH v Rhone Poulenc Pharma GmbH (Case 232/94) [1996] EC I 3671; and later in Pharmacia & Upjohn SA v Paranova A/S (Case C 379/97) [2000] Ch 571. On the same ground, it has been held that a trade mark proprietor may not object to the removal of identification codes or marks which would reveal the traders sources of supply to the trade mark proprietor and thereby make it impossible for the trader to serve that market at all: Frits Loendersloot (t/a F Loendersloot Internationale Expeditie) v George Ballantine & Sons Ltd. (Case C 349/95) [1997] ECR I 6227, at para 40. The reasoning of these decisions is applicable only in cases where the goods are already lawfully in circulation within the EEA with the consent of the trade mark proprietor, and he is trying to exercise the only right of control which the directive allows him in that situation. It is right to add that even in that context, the Court did not hold that a right expressly conferred by the directive in unqualified terms was unenforceable when the effect of enforcement would be to impede trade between member states. What it held was that the right did not exist at all. That conclusion was possible in the case of rights governed by article 7.2 because it provides that the rights exist only if there are legitimate reasons. A corresponding conclusion would not have been possible in the case of rights governed by article 5 which were not exhausted under article 7.1, because those rights are in every relevant respect unqualified. There was a good deal of debate before us, as there was in the courts below, about the effect of the case law of the Court of Justice concerning the burden of proving whether the trade mark proprietor did or did not consent to the marketing of the goods in the EEA. This question does not arise in the present case, because it is now accepted that the goods were first marketed in the EEA by M Tech and that Sun did not consent. But the case law is said to have a broader relevance, as authority for the general approach of the Court of Justice to the enforcement of trade mark rights in a manner said to be inconsistent with the free movement of goods. In summary, the rule is that while national law may place the burden of proving consent on the alleged infringer who asserts it, nevertheless if the effect would be to enable the trade mark proprietor to partition national markets within the EU, the burden of proof must lie with the proprietor. The authority for this is Van Doren + Q GmbH v Lifestyle sports and sportswear Handelsgesellschaft mbH (Case C 244/00) [2003] ECR I 3051, paras 37 41. It is apparent from the judgment in that case at paras 21 and 40, that the concern of both the referring court and the Court of Justice was that a requirement that the alleged infringer should prove that the goods had been marketed in the EEA with the proprietors consent would in practice require him to identify an authorised distributor in the EEA from whom he had obtained his supplies, thereby enabling the proprietor to use his control over his distribution network to prevent him from obtaining any more. However, the rule does not apply (indeed, the problem does not arise) in a case where it is admitted or clear, as it is in the present case, that the goods in question were imported into to the EEA by third parties without the proprietors consent: Zino Davidoff SA v A&G Imports Ltd (Joined Cases C 414/99 to 416/99) [2002] Ch 109 at para 54; subsequently reaffirmed in Class International BV v Colgate Palmolive Company (Case C 405/03) [2006] Ch 154, at paras 71 74. The difference between the two situations is discussed in the judgment in Van Doren, at paras 28 31. It corresponds to the long standing distinction between trademarked goods which are already legitimately in circulation in the EEA and those which are not. The reason for the difference of treatment is that where it is established that the goods have not previously been on the market in the EEA, the proprietor is only exercising his right to control the first marketing of his branded goods in the EEA. This right is conferred on him by EU law and does not engage the treaty provisions concerning the free movement of goods. Where, on the other hand, it may turn out that the goods were already legitimately circulating in the EEA because the trade mark proprietor had consented to their previous marketing there, the attempted enforcement of the trade mark rights potentially affects trade between member states. Application to the facts alleged by M Tech The real question in the present case is whether, applying those principles, the facts alleged by M Tech would give them a defence if they could be proved. Like Kitchin J, I do not consider that they would. The reason is that, once the scheme of articles 5 and 7 of the directive are correctly understood, it is clear that the unlawful conduct alleged by M Tech is collateral to the particular right which Sun is seeking to enforce. The first and main reason follows directly from the scheme of those articles. On the agreed facts, these goods were never marketed in the EEA until they were imported and marketed there by M Tech without Suns consent. It is therefore not in dispute that the only right derived from its trade marks which Sun is seeking to enforce by these proceedings is its right to control the first marketing of the goods in the EEA. This is an exercise of rights which does not engage the principle of the free movement of goods between member states embodied in articles 34 to 36 of the treaty. It affects only the entry of the goods onto the EEA market, not the movement of the goods within it. It is specifically authorised by articles 5 and 7.1 of the Trade Mark Directive, which are part of an exhaustive code that itself fully reflects the requirements of articles 34 to 36 of the treaty. M Techs argument to the contrary, and the decision of the Court of Appeal accepting it, are both substantially based on decisions of the Court of Justice under article 7.2 concerning the use of trade mark rights to obstruct the trading between member states of goods already legitimately in circulation within the EEA. That is a different, and for present purposes irrelevant situation. Second, what produces the impediment to the free movement of goods is not the enforcement of Suns right to control the first marketing of its products in the EEA. On M Techs account of the facts, the adverse effect on the free movement of goods arises from the partitioning of the market through Suns controlled distribution network. That is made possible by the disappearance of the independent secondary market for its hardware, which removes any alternative source of supply. The disappearance of the independent secondary market is in turn the result of Suns refusal to disclose where any particular goods were first marketed and, if it was in the EEA, whether it happened with its consent. This is said to achieve the chilling effect on both the legitimate and the illegitimate parallel trade, which has served to eliminate independent resellers in both categories. This is the only economically intelligible way in which M Techs case may be understood. It is also the mechanism which is clearly being put forward in the evidence of the two witnesses, Mr. Marion and Mr. Buta, who deal with this matter on their behalf. The difficulty about M Techs argument is that the act of a trade mark proprietor in seeking to control the first marketing of his products in the EEA is in principle an ordinary exercise of the essential right conferred on him by articles 5 and 7.1 of the directive. He may or may not also engage in activities such as withholding information about provenance, which are designed to eliminate the independent parallel trade. But Sun cannot be prevented from doing something which is in itself entirely lawful and consistent with the principle of the free movement of goods, simply because it proposes to do something else as well which is unlawful and inconsistent with that principle. It does not advance the argument to say, as M Tech does, that Suns policy of withholding information about provenance is effective only because it is combined with a policy of vigorously enforcing its trade mark rights. The only conceivable relevance of the fact that Sun seeks to control the first marketing of its trade marked products in the EEA is that if they did not do this, then it would be impossible to eliminate independent resellers by withholding information about provenance, because they could supply themselves with stock from outside the EEA regardless of provenance and market it in the EEA regardless of Suns objection. But that is the very thing that EU law unquestionably says that they cannot do. It cannot therefore follow that because Sun enforces its trade mark rights vigorously it should have no trade mark right to enforce in those circumstances. Nor, in my view, does it advance the argument to refer to the enforcement of Suns trade mark rights as part of a scheme to eliminate the independent resellers from the secondary market. This is simply a pejorative way of making the same unsustainable point. Third, even if (which is not the case) the jurisprudence arising from article 7.2 about the obstruction of trade within the EEA in goods which are already legitimately in circulation there had any application to the particular right which Sun is seeking to enforce, the case law would not justify the conclusion pressed upon us by M Tech. I have already discussed the cases on article 7.2. They are authority for the proposition that a trade mark proprietor cannot claim a right under the directive to oppose the further commercialisation of the goods if the exercise of that right would itself unjustifiably impede the free movement of goods between member states. However, none of the cases go so far as to hold non existent or unenforceable rights whose exercise would in itself have no impact on trade between member states, merely because they are accompanied by other acts which do. The law responds to this situation by restraining the acts which do. It does not pull down the whole temple. Fourth and last, it is a consequence of the collateral character of the unlawful acts alleged against Sun that M Tech have to advance a case which may fairly be characterised as extreme. The argument that article 5 of the directive is impliedly limited in the manner suggested by Mr. Vajda necessarily operates to suspend Suns trade mark rights indiscriminately as against the entire EEA market, including traders who are entirely unaffected by the withholding of information about provenance because, for example, they are knowingly importing Suns goods without their consent. The argument would be exactly the same, and just as sound or unsound whether or not the trader needed to be told the provenance of the goods. Mr. Vajda accepts this. Logically, as he also acknowledged, the effect would be to make the rights unavailable not only as against unauthorised parallel importers like M Tech but as against any other categories of infringer, for example industrial counterfeiters. This is a submission of truly remarkable breadth. In Imperial Chemical Industries Ltd v Berk Pharmaceuticals Ltd [1981] 2 CMLR 91, at [9], Sir Robert Megarry V C characterised a somewhat similar argument as a proposal to treat a person guilty of collateral breaches of the treaty as an outlaw, unable to enforce any of his rights against any one. None of the cases relied upon by M Tech come close to justifying such a proposition, which would be quite unnecessary to vindicate the principles of the treaty and contrary to the object and express terms of the directive. It may well be that M Tech has a perfectly good cause of action against Sun based on articles 34 to 36 of the treaty for damages for preventing them from selling Sun products by their policy of withholding information about the previous history of the goods. I make no comment on that, because it is irrelevant to this appeal. We are not concerned in these proceedings with business that M Tech have been prevented from doing, still less with business that other traders have been prevented from doing. We are concerned with business which M Tech have done in infringement of Suns trade marks. It is not a defence to proceedings brought on that basis that there is other business that M Tech have been prevented from doing by Suns arguably unlawful policy of withholding information. Article 101: anti competitive agreements Article 101 of the treaty prohibits agreements and concerted practices so far as they have as their object or effect the prevention, restriction or distortion of competition within the internal market. An intellectual property right is not itself an agreement or concerted practice capable of contravening article 101 of the treaty. But there are undoubtedly circumstances in which it may be unenforceable because there is a sufficient nexus between the exercise of the right and the agreement or concerted practice in question. The test, which dates back to the venerable but still authoritative decision of the Court of Justice in Sirena Srl v Eda Srl (Case 40/70) [1971] ECR 69, at para 9, is whether it is the subject, the means or the result of a restrictive practice: see also Keurkoop BV v Nancy Kean Gifts BV (Case C 144/81) [1982] ECR 2853, at para 27 (the exercise of that right may be subject to the prohibitions contained in the Treaty when it is the purpose, the means or the result of an agreement or concerted practice. The facts relied upon as engaging article 101 in this case are that Sun distributes its products through a network of authorised dealers. The dealers are said to be bound by distribution agreements which require them to obtain their supplies from Sun or from other authorised Sun dealers, unless the goods in question cannot be supplied from those sources. It is alleged that this is contrary to article 101, and for present purposes Sun is prepared to assume that it is. The question is whether that has any relevant connection with the exercise by Sun of its right to control the first marketing in the EEA of its trade marked goods. The argument seems to have undergone a certain amount of refinement since it was presented to the judge. As presented in M Techs printed case, it was that the restriction in the distribution agreements served to reinforce the chilling effect of withholding information about the provenance of the goods. This is because, so it is said, Suns authorised dealers are able to access the Sun database from which the provenance of the goods can be identified. They are not therefore inhibited from sourcing their supplies from independent resellers by Suns policy of withholding provenance information from the independent market. Therefore, in order to achieve its objective of eliminating the independent secondary market, it is necessary to prevent the authorised dealers contractually from buying from them. In effect, what is being said is that Sun has two tactics for eliminating the independent secondary market, one (withholding information) aimed directly against independent resellers and the other aimed at their own distributors. The two tactics. , say M Tech, work in tandem. There are two insuperable difficulties about this part of M Techs case. The first is that there is no relevant connection between the policy of withholding information about provenance and the prevention, restriction and distortion of competition by means of the distribution agreements. The whole premise of the argument is that the policy of withholding information has no anti competitive effect on the choices of Suns authorised distributors. The second difficulty is that there is no relevant connection between the policy of withholding information about provenance and the enforcement of Suns right to control the first marketing of its trade marked products in the EEA, for the same reasons as there is no such connection in the context of articles 34 to 36. More generally, neither the trade marks nor the rights conferred on their proprietor by the directive can be characterised as the subject, the means or the result of an agreement or concerted practice contravening article 101. Abuse of rights The final point taken by M Tech seems to me to be incapable of succeeding in circumstances where their other points have failed. The leading case on the EU concept of abuse of rights is the decision of the Court of Justice in Halifax Plc v Customs and Excise Comrs (Case C 255/02) [2006] Ch 387, in which a tax saving scheme which formally complied with the requirements of the Sixth VAT Directive was said to be abusive. In his opinion, at paras 62 71, Advocate General Poiares Maduro traced the development of the concept in the jurisprudence of the Court of Justice, before expressing the principle as being that no provision of Community law can be formally relied on to secure advantages manifestly contrary to its purposes and objectives: para. 74. This test was adopted by the Grand Chamber in its judgment. The Court said: 74 it would appear that, in the sphere of VAT, an abusive practice can be found to exist only if, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the Sixth Directive and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions. 75 Secondly, it must also be apparent from a number of objective factors that the essential aim of the transactions concerned is to obtain a tax advantage. As the Advocate General observed in para 89 of his opinion, the prohibition of abuse is not relevant where the economic activity carried out may have some explanation other than the mere attainment of tax advantages. 76. It is for the national court to verify in accordance with the rules of evidence of national law, provided that the effectiveness of Community law is not undermined, whether action constituting such an abusive practice has taken place in the case before it. The rule of EU law which Sun is invoking in the present case is to be found in articles 5 and 7.1 of the Trade Mark Directive. It is beyond argument that the purpose of those provisions was (among other things) to enable the trade mark proprietor to control the first marketing of his trade marked goods in the EEA. The exercise of that right by Sun did not only satisfy the formal requisites of those articles. It was entirely consonant with their purpose. Even if (contrary to my view) M Tech were right to say that by achieving that purpose Sun was enabled to do other things which tended to eliminate independent resellers from the secondary market, that would not make it an abuse of rights. Reference Once the Court of Justice has laid down the relevant principles of law in terms which are clear, consistent, and sufficient for the decision of the case, it is the function of national courts to apply them. That there are obscurities in parts of this area of EU law is beyond question. But the particular legislative provisions and legal principles which make M Techs case impossible are in my judgment entirely clear. A reference is not required to elucidate them. M Techs real problem, under all three heads of their argument, is that they are unable to establish a relevant connection between the exercise of Suns right to control the first marketing of their trade marked goods in the EEA and any breach of the treaty. Conclusion I would allow the appeal and restore the order of Kitchin J.

Oracle America Inc, formerly known as Sun Microsystems, [Sun] are the manufacturers of computer systems, workstations and related goods. Sun is the proprietor of trade marks registered for use in connection with computer hardware [5]. M Tech Data Limited, is a supplier of computer hardware [5]. Articles 5 and 7 of Directive 89/104/EC confer upon a trade mark proprietor the exclusive right to control the first marketing in the European Economic Area [EEA] of goods bearing his trade mark, even if the goods are genuine and have previously been put on the market by him or with his consent outside the EEA [4]. This means that third parties cannot import or sell a product for the first time in the EEA without the trade mark proprietors consent. Sun has the right to first market its hardware in the EEA. In 2009, a trap order was placed by a UK purchaser called KSS Associates for 64 Sun disk drives [5]. A trap order is used in litigation to gather evidence as to what a potential defendant supplies in response to a request for a trade mark proprietors products. M Tech supplied 64 Sun disk drives sourced from a US broker, which had previously been sold in China, Chile and the USA. Sun had never consented to these goods being put on the market in the EEA. Consequently, M Tech infringed Suns trade marks contrary to Article 5.1(a) of the Directive [5]. Sun sought summary judgment for damages for the infringement and an injunction restraining further infringements [6]. In its defence, M Tech alleged that Sun had sought to secure the secondary market for its hardware, worth US$ 1.07 billion, for itself and its authorised dealers by declining to supply information on whether any particular equipment was first put on the EEA market by or with Suns consent [9]. This had a chilling effect on independent resellers, including M Tech, as a result of Suns aggressive enforcement of its trade mark rights and withholding of the requisite information, which was not otherwise available and could not be inferred from circumstances [9]. In fact, the disks had been imported and supplied by M Tech because of internal procedure failures and not due to any alleged policy by Sun to withhold the requisite information [10]. M Techs defence was that Suns trade marks are not enforceable at all because (i) the object and effect of enforcement would be to partition the EEA market contrary to the free movement of goods within the EU enshrined in Articles 34 to 36 of the Treaty on the Functioning of the European Union; (ii) the exercise of Suns trade marks is connected with its distribution agreements that contained restrictive provisions inconsistent with Article 101 and (iii) enforcement of Suns trade marks would constitute an abuse of rights under EU law [6]. Kitchin J granted summary judgment, ordering an inquiry into damages, and an injunction that prevented M Tech marketing goods if Sun has confirmed that those goods have not previously been put on the EEA market by Sun or with Suns consent [7, 10]. The Court of Appeal allowed M Techs appeal and set aside the order [7]. Sun appeals to the Supreme Court, inviting the court to make a reference to the Court of Justice of the European Union [CJEU'] [7]. The issue is whether a person who has imported and sold goods in the EEA without the consent of the trade mark proprietor is entitled to defend an action for infringement on the ground that the proprietor of the trade mark is engaged in conduct calculated to obstruct the free movement of goods or distort competition in the EEA market [1]. If this were an arguable defence in EU law, a reference to the CJEU would be necessary [7]. The Supreme Court unanimously allows the appeal and restores the order of Kitchin J. The Supreme Court declines to make a reference to the CJEU [36]. Lord Sumption delivers the judgment of the Court. The fundamental question is whether, as a matter of construction of Articles 34 to 36 of the EU Treaty, there is an implied limitation on the application of Article 5 of the Directive to preclude any exercise of trade mark rights that would have the object or effect of partitioning the EEA internal market [11]. Such a limitation would effectively suspend Suns trade mark rights as against the entire EEA market [11]. The scheme of Articles 5 and 7 of the Directive embodies both the primary provisions of the Treaty governing free movement of goods and the limited exception in Article 36 of the Treaty for the protection of industrial and commercial property [14]. Reconciliation of the right under Article 5 to prevent the use by others of his own or identical trade mark for the registered class of goods with the Treaty is achieved by Article 7.1, as the right is exhausted as soon as goods are put on the EEA market by or with the consent of the trade mark proprietor [15]. This is subject to Article 7.2, which permits a proprietor to control the marketing of his goods within the EEA market for legitimate reasons, which naturally do no include restricting trade between member states [16]. The principle of the free movement of goods is incapable of restricting the right of a trade mark proprietor to prevent the first marketing within the EEA of goods imported from outside the EEA, per EMI Records Ltd v CBS United Kingdom Ltd 9 (Case 51/75) [1976] ECR 811 [18 20]. The Directive is a definitive statement of the harmonised law concerning the rights of trade mark proprietors that confers on them a right to control the first marketing of their goods in the EEA, save where that right has been unequivocally renounced [20]. The right affects only the entry of goods onto and not the movement of goods within the EEA market [25]. Under Article 7.2, when goods have been put on the EEA market, the free movement of goods may be engaged and control of the marketing can only be exercised for legitimate reasons [21]. Where there are no such legitimate reasons, the right to control the marketing does not exist at all [22]. This reasoning cannot be applied to the right to control the first marking of goods in the EEA as that right is in every relevant respect unqualified [22]. National law may place the burden of proving the consent of the trade mark proprietor to put goods on the EEA market on an alleged infringer who asserts it, unless the effect would be to enable the partitioning of national markets, in which case the burden lies with the proprietor [23]. This rule is of no application in a case where it is admitted or clear that the goods were imported into the EEA without the proprietors consent [23]. It is clear that the unlawful conduct alleged by M Tech does not amount to a defence, even if proved [24]. On the agreed facts, the disk drives were never marketed in the EEA until they were imported by M Tech without Suns consent. The only right that Sun is seeking to enforce is the right to control the first marketing of goods in the EEA and the exercise of these rights affects only the entry of goods onto the EEA market and thus does not engage the principle of the free movement of goods [25]. The control of marketing of goods in circulation within the EEA under Article 7.2 is a different and irrelevant situation [25]. Sun cannot be prevented from enforcing its right to control first marketing, which is entirely lawful and consistent with the principle of the free movement of goods, simply because it is alleged that Sun proposes to withhold information about the provenance of its goods, which is unlawful and inconsistent with that principle [26]. The case law on Article 7.2 only prevents a trade mark proprietor claiming a right to oppose further commercialisation if the exercise of that right itself would unjustifiably impede the free movement of goods. It does not restrain any exercise that does not [27]. The limitation contended for would have the effect of preventing Sun enforcing its trade mark rights against anyone, which is unnecessary to vindicate the Treaty and contrary to the object and terms of the Directive [28]. There is no relevant connection between the alleged policy of withholding information about the provenance of goods and the prevention, restriction or distortion of competition, contrary to Article 101 of the Treaty, by means of distribution agreements with a network of authorised Sun dealers. The policy had no effect on the choices made by the dealers and neither trade marks nor the right to enforce them can be characterised as the subject, means or result of an agreement or concerted practice [32]. The exercise of Suns rights was not an abuse of rights in EU law [35]. A reference to the CJEU is not necessary as the legislative and legal principles that made M Techs case impossible are entirely clear [36].

This is a judgment in two appeals that this Court heard together. They raise issues as to the scope of the powers conferred by the Proceeds of Crime Act 2002 (POCA). They arise out of attempts by the respondent (SOCA), acting apparently on its own initiative, to deprive the first appellant (Mr Perry), together with members of his family or entities associated with them, of the fruits of serious criminal fraud for which Mr Perry has been convicted in Israel, wherever in the world those fruits may be found. SOCA intends to achieve this aim by invoking the powers of civil recovery conferred on the High Court by Part 5 of POCA. So far, however, it has not got beyond preliminary steps aimed at ensuring that the substantive relief which it seeks is effective. One of those steps has been obtaining a worldwide property freezing order in respect of property held by the appellants in appeal 0143. I shall call this the PFO appeal. The other step has been to obtain a disclosure order, under which notices have been given to the appellants in appeal 0182. I shall call this the DO appeal. It is logical to consider the PFO appeal first, for the result of this appeal will have some bearing on the DO appeal. THE PFO APPEAL Introduction and factual background Some of this introduction will be relevant to both appeals. The substantive relief that SOCA seeks consists of civil recovery orders in relation to property obtained through Mr Perrys unlawful conduct. In order to prevent the dissipation of that property SOCA has obtained a worldwide property freezing order pursuant to section 245A of POCA (in future all statutory references will be to POCA unless I state otherwise). Section 245A gives SOCA the power to seek a property freezing order where it is empowered to take proceedings for a civil recovery order. It is common ground that a property freezing order can only relate to property that can properly be made the subject of a civil recovery order. The appellants contend that, subject to a limited exception, a civil recovery order can only be made in respect of property that is within the territorial jurisdiction of the court making it. On this ground the appellants attack the validity of the property freezing order in so far as this extends to property outside that jurisdiction. Thus the important issue raised by the PFO appeal is the extent to which a recovery order can be made in respect of property outside the United Kingdom. Lea Perry is Mr Perrys wife and Tamar Greenspoon and Yael Perry are his daughters. Leadenhall Property Ltd is an Isle of Man company alleged to hold assets on behalf of Mr Perry. On 24 October 2007 Mr Perry was convicted in Israel of a number of offences in relation to a pension scheme that he had operated in Israel. On 19 February 2008 he was sentenced to 12 years imprisonment and fined the equivalent of approximately 3m. He has paid that fine. Two subsequent appeals had limited success inasmuch as they resulted in a reduction of his sentence to 10 years imprisonment and a reduction in the finding of the amount that he had stolen. In or about May 2008 Hoares Bank in London disclosed to SOCA that Mr Perry, Tamar and Yael had accounts there. Subsequently SOCA discovered that Mr Perry had accounts in London in the Bank J Safra (Gibraltar) Ltd. The total in these various accounts amounted to approximately 14m. On 8 August 2008 SOCA obtained a disclosure order from HH Judge Kay QC, sitting as a Deputy High Court Judge, on a paper application without notice. Notices under that order addressed to the DO appellants, all of whom were at all material times outside the jurisdiction, were communicated to them by letter addressed to a residence that Mr Perry maintains in Mayfair. On 28 October 2009 SOCA obtained a worldwide property freezing order from Cranston J on an application without notice against eight respondents, including the appellants in the PFO appeal. So far as Mrs Perry was concerned, the order froze certain identified assets, but it froze worldwide all the assets of the other defendants. The order also required all the defendants to disclose all their worldwide assets. The hearings below The PFO appellants sought an order from Mitting J varying the property freezing order so as, inter alia, to exclude from its ambit property that was located outside England and Wales and to limit the disclosure obligations under the order to assets located within England and Wales. In a judgment dated 28 June 2010 [2010] EWHC 1711 (Admin); [2010] 1 WLR 2761 Mitting J varied some of the disclosure obligations but otherwise rejected the application. Mitting Js judgment was admirably clear and concise. He started with a presumption against giving the relevant provisions of POCA extraterritorial effect, but concluded that, with the exception of section 286, which applied only to an order made in Scotland, the language of the relevant provisions so clearly applied to property outside the jurisdiction that it displaced this presumption. The appellants appeal to the Court of Appeal was heard on 8 and 9 December 2010 and judgment was delivered on 18 May 2011 [2011] EWCA Civ 578; [2011] 1 WLR 2817. The lengthy lead judgment of Hooper LJ was a reflection not only of the complexities of POCA but of the very detailed submissions advanced by Mr Philip Jones QC for the appellants, which were summarised at some length by the Lord Justice. Among many other arguments Mr Jones relied on the presumption against extraterritoriality. A civil recovery order vests property in a trustee for civil recovery. Mr Jones submitted that such an order took effect in rem. He submitted that it would be a breach of international law for the English Court to make an order in rem in respect of property in a foreign jurisdiction, the more so if that property was real property. Hooper LJ rejected this argument. He held that a civil recovery order operated in personam against the holder of the property. The effect, if any, of a civil recovery order in relation to property in a foreign jurisdiction would depend upon the law applied in that jurisdiction and, in those circumstances, there was nothing untoward in making such an order. Like Mitting J, Hooper LJ concluded that the clear meaning of the relevant provisions was that a civil recovery order could be made in respect of property wherever in the world the property was located, and there was no reason not to give effect to the natural meaning of the language. Like Mitting J, Hooper LJ concluded that section 286 made an exception in the case of an order made in Scotland. Hooper LJ derived support for his conclusions from analogies with the law of bankruptcy and from the practice of issuing worldwide freezing orders. In a shorter judgment Tomlinson LJ concurred both with the result reached by Hooper LJ and with his reasoning. Maurice Kay LJ agreed with both judgments. It is common ground that, on its face, section 286 makes provision in respect of the scope of a recovery order that distinguishes the position in Scotland from that in the rest of the United Kingdom. There is a dispute as to the nature of that distinction and, whatever its nature, no one has yet been able to suggest an explanation for it. A summary of my conclusions Because of the complexity of the subject matter of this appeal I propose to follow the example of Hooper LJ by summarising my conclusions at the outset. (i) The courts below placed undue weight on the definition of property in POCA. (ii) The appellants have placed undue weight on the presumption that a statute does not have extraterritorial effect. (iii) States have, by agreement, departed from the customary principles of international law in the case of confiscating the proceeds of crime. Of particular relevance is the 1990 Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (the Strasbourg Convention). POCA must be read in the light of that Convention. (iv) The Convention recognises that the courts of state A may make an order purporting to vest in the authorities of state A property that is situated in state B in circumstances where the property is the proceeds of the criminal conduct of a defendant subject to the criminal jurisdiction of state A. (v) The Convention provides that effect should be given to such an order by confiscation proceedings in state B at the request of state A. (vi) The answer to the issue raised by the PFO appeal depends upon an analysis of both the scheme and the language of POCA considered in the light of the Convention. (vii) Parts 2, 3 and 4 of POCA provide for (a) the imposition in personam of obligations in respect of property worldwide; (b) measures in rem to secure and realise property within the United Kingdom; and (c) requests to be made to other states to take such measures in respect of property within their territories. (viii) Part 5 of POCA makes provision for in rem proceedings in respect of property within the United Kingdom but not outside it. (ix) The scheme of POCA, as described above, accords with arrangements made by the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (SI 2005/3181) (the Order) for giving effect to requests from other states in relation to the confiscation of the proceeds of crime. (x) The scheme of POCA as described above also accords with the requirements of a coherent international scheme for confiscation of the proceeds of crime and with principles of public international law. The converse is the case if SOCAs submissions as to the extraterritorial effect of Part 5 are correct. (xi) Section 286 is an anomalous enigma and cannot justify giving the provisions of POCA that relate to the rest of the United Kingdom a meaning different from that which they would bear in the absence of section 286. (xii) For all these reasons the PFO appeal should be allowed. The definition Part 5 of POCA places on the High Court in England and Wales and Northern Ireland and the Court of Session in Scotland the obligation, in prescribed circumstances, to make a civil recovery order in respect of property which is, or represents, property obtained through unlawful conduct. Section 316(4) has a definition of property (the definition) that applies in Part 5: Property is all property wherever situated and includes (i) money, (ii) all forms of property, real or personal, heritable or moveable, (c) incorporeal property. things in action and other intangible or Mitting J and the Court of Appeal were impressed by the natural meaning of the words wherever situated and concluded that these words should be applied, without restriction, to property in respect of which a recovery order could be made. Thus a recovery order could be made in respect of any form of property, whether real, personal or a chose in action, and wherever in the world that property was situated. The words wherever situated do not describe the type of property to which Part 5 applies. Rather they indicate the location of the property to which the provisions of Part 5 can apply. The definition is repeated no less than eight times in POCA sections 84(1), 150(1), 232(1), 316(4), 326(9), 340(9), 414(1) and 447(4). POCA is peppered with references to property. All fall within the definition. But the definition cannot be applied so as to add to the words property, wherever it appears, the words wherever situated. As I shall demonstrate, most of the provisions of POCA apply only to property within England and Wales, Scotland or Northern Ireland. By way simply of example, I can refer to section 45(1) which confers on a constable the power to seize property to prevent its removal from England and Wales. Some provisions refer, however, to property worldwide. Whether or not the location of property to which a provision of POCA refers is subject to a territorial restriction depends upon the context. I so held, when giving the only reasoned speech, in King v Director of the Serious Fraud Office [2008] UKHL 17; [2009] 1 WLR 718, para 37. For these reasons I do not attach to the words in the definition wherever situated the weight that they have carried with the courts below. In order to decide on the scope of the application of Part 5 of POCA it is necessary to consider both the structure and the language of the Act having regard to relevant principles of international law. The presumption against extraterritoriality and the Strasbourg Convention Mr Jones QC for the appellants submitted that it was a breach of international law for a United Kingdom statute even to purport to vest in a United Kingdom authority property situated in the territory of another state. Mitting J began his judgment by reference to the presumption of statutory interpretation that a statute will not have extraterritorial effect and to the statement of Lord Hoffmann in Socit Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260, para 54: it is a general principle of international law that one sovereign state should not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state or compelling its citizens to do acts within its boundaries. Hooper LJ himself cited the statement of Lord Diplock in R v Cuthbertson [1981] AC 470, 485: Under English rules of conflict of laws it is in my view well established that an English court has no jurisdiction either in a criminal or a civil matter to make orders purporting ipso jure to transfer moveable property situate abroad. Confiscation of the proceeds of crime is, however, an activity in respect of which States have departed from these principles. Of particular relevance is the Strasbourg Convention, to which the United Kingdom is a party. The question of whether the exorbitant effect of Part 5 of POCA for which SOCA contends would involve a breach of international law must be considered in the light of the Strasbourg Convention. Hooper LJ set out relevant provisions of the Strasbourg Convention in some detail and I must do the same. The Strasbourg Convention Chapter I contains definitions which include: (b) property includes property of any description, whether corporeal or incorporeal, movable or immovable, and legal documents or instruments evidencing title to, or interest in such property; (c) instrumentalities means any property used or intended to be used, in any manner, wholly or in part, to commit a criminal offence or criminal offences; (d) confiscation means a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property; Chapter II deals with measures to be taken at national level to identify and trace properties subject to confiscation. Chapter III deals with international co operation. Section 1 sets out the relevant principles. Article 7 lays down general principles and measures for international co operation. It provides: 1. The Parties shall co operate with each other to the widest extent possible for the purposes of investigations and proceedings aiming at the confiscation of instrumentalities and proceeds. 2. Each Party shall adopt such legislative or other measures as may be necessary to enable it to comply, under the conditions provided for in this chapter, with requests: a. for confiscation of specific items of property representing proceeds or instrumentalities, as well as for confiscation of proceeds consisting in a requirement to pay a sum of money corresponding to the value of proceeds; b. for investigative assistance and provisional measures with a view to either form of confiscation referred to under a. above. The Explanatory Report submitted to the Committee of Ministers of the Council of Europe by the committee of experts who drew up the Convention, illuminates article 7: 10. Where the law enforcement agencies and judicial authorities have gathered information through investigations, there should also be efficient means available to ensure that the offender does not remove the instruments and proceeds of his criminal activities. Freezing of bank accounts, seizure of property or other measures of conservancy need to be taken to ensure this. Section 3 of Chapter III provides for international co operation in respect of provisional measures. In order to secure the confiscation of the instruments and proceeds from crime, the Convention provides in section 4 of Chapter III principally two forms of international co operation, namely the execution by the requested State of a confiscation order made abroad and, secondly, the institution, under its own law, of national proceedings leading to a confiscation by the requested State at the request of another State. In respect of the first alternative, the Convention follows the pattern of the European Convention on the International Validity of Criminal Judgments. The second method of international co operation could be compared to the one which is provided for in the European Convention on the Transfer of Proceedings in Criminal Matters. Section 2 deals with mutual assistance in identifying and tracing property liable to confiscation and requires a party to comply with a request for assistance from another party to the extent compatible with the law of the former. Section 3 deals with provisional measures. Where a party has instituted criminal proceedings or proceedings for the purpose of confiscation and so requests, another party must take provisional measures such as freezing or seizing to secure property which may become subject to confiscation, in so far as permitted by its domestic legislation. The same applies where a party receives a request for confiscation. Section 4 deals with confiscation. It provides: Article 13 Obligation to confiscate 1. A Party, which has received a request made by another Party for confiscation concerning instrumentalities or proceeds, situated in its territory, shall: a. enforce a confiscation order made by a court of a requesting Party in relation to such instrumentalities or proceeds; or b. submit the request to its competent authorities for the purpose of obtaining an order of confiscation and, if such order is granted, enforce it. 2. For the purposes of applying paragraph 1.b of this article, any Party shall whenever necessary have competence to institute confiscation proceedings under its own law. 3. The provisions of paragraph 1 of this article shall also apply to confiscation consisting in a requirement to pay a sum of money corresponding to the value of proceeds, if property on which the confiscation can be enforced is located in the requested Party. In such cases, when enforcing confiscation pursuant to paragraph 1, the requested Party shall, if payment is not obtained, realise the claim on any property available for that purpose. 4. If a request for confiscation concerns a specific item of property, the Parties may agree that the requested Party may enforce the confiscation in the form of a requirement to pay a sum of money corresponding to the value of the property. Article 14 Execution of confiscation 1. The procedures for obtaining and enforcing the confiscation under article 13 shall be governed by the law of the requested Party. 2. The requested Party shall be bound by the findings as to the facts in so far as they are stated in a conviction or judicial decision of the requesting Party or in so far as such conviction or judicial decision is implicitly based on them. 3. Each Party may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, by a declaration addressed to the Secretary General of the Council of Europe, declare that paragraph 2 of this article applies only subject to its constitutional principles and the basic concepts of its legal system. There was an issue in the Court of Appeal as to whether the Strasbourg Convention applied to Part 5 proceedings. Hooper LJ held at para 72 that it did. I agree with him. The Explanatory Report makes the following comment at para 15: The experts were also able to identify considerable differences in respect of the procedural organisation of the taking of decisions to confiscate (decisions taken by criminal courts, administrative courts, separate judicial authorities, in civil or criminal proceedings totally separate from those in which the guilt of the offender is determined (these proceedings are referred to in the text of the Convention as proceedings for the purpose of confiscation and in the explanatory report sometimes as in rem proceedings), etc). It was also possible to distinguish differences in respect of the procedural framework of such decisions (presumptions of licitly/illicitly acquired property, time limits, etc). The experts agreed that it would be impossible to devise an efficient instrument of international co operation without taking into account these basic differences in national legislation. On the other hand, effective co operation must recognise that the systems may not be alike but that they aim to achieve the same goals. This is why the committee agreed to put the two systems (value and property confiscation) of confiscation on an equal footing and to make the text unambiguous on this point. The Explanatory Report adds at para 43 in relation to article 13: Any type of proceedings, independently of their relationship with criminal proceedings and of applicable procedural rules, might qualify in so far as they may result in a confiscation order, provided that they are carried out by judicial authorities and that they are criminal in nature, that is, that they concern instrumentalities or proceeds. Such types of proceedings (which include, for instance, the so called in rem proceedings) are, as indicated under General considerations above, referred to in the text of the Convention as proceedings for the purpose of confiscation. The Explanatory Report adds this further comment at para 48: [According to para 3 of article 13], parties must, for purposes of international co operation in the confiscation of proceeds, be able to apply both the system of property confiscation and the system of value confiscation. This is made clear by article 7, paragraph 2.a. It may imply that Parties which have only a system of property confiscation in domestic cases have to introduce legislation providing for a system of value confiscation of proceeds, including the taking of provisional measures on any realisable property, in order to be able to comply with requests to that effect from value confiscation countries. On the other hand, Parties which have only a system of value confiscation of proceeds in domestic cases must introduce legislation providing for a system of property confiscation of proceeds in order to be able to comply with requests to that effect from property confiscation countries. Confiscation under the Strasbourg Convention has to be ordered by a court following proceedings in relation to a criminal offence or criminal offences see article 1(d). Thus it would seem that the Convention applies to (i) a confiscation order in rem made by party A after conviction of a defendant within its territory in respect of property owned by the defendant situated within the territory of party B; (ii) a confiscation order in rem made by party A in respect of property situated within its territory after conviction of the owner of that property in the territory of party B. One thing is plain beyond doubt. The Strasbourg Convention envisages the courts in one state making an order confiscating property situated in another state. There would thus appear to be established, in respect of the proceeds of crime, an exception to the principle stated by Lord Diplock in Cuthbertson to which I have referred at para 17 above. I believe, however, that the exorbitant in rem confiscation order that the Strasbourg Convention envisages is one where the jurisdiction to make the order is an in personam jurisdiction founded on the conviction of the owner of the property by the court of the state making the order. The much wider exorbitant jurisdiction that SOCA contends is conferred by Part 5 is, so far as I am aware, without precedent anywhere in the world. I can summarise the position as follows. The Strasbourg Convention envisages two types of confiscation proceedings: (i) value confiscation and (ii) confiscation of specific property. It requires parties to give effect, by proceedings within their own jurisdictions and in accordance with their own laws, to requests for assistance in respect of both types of confiscation proceedings that are taking place or have taken place in the jurisdictions of other parties. The scheme of confiscation under POCA Confiscation Parts 2, 3 and 4 of POCA make provision for value confiscation by the criminal court, by means of what is described as a confiscation order. Confiscation is a misnomer. The scheme of these Parts involves the imposition of the obligation to make a money payment, which is enforced in the same way as a fine, on a person who has been convicted in the relevant jurisdiction. Thus the order is in personam and it is made as part of the criminal process. The amount of the confiscation order is the amount of benefit that the defendant has obtained from his criminal conduct, calculated in accordance with complex provisions of POCA and subject to an upper limit, which is the amount of the defendants available assets. The provisions in Part 2 relate to England and Wales. Similar provision in relation to Scotland are set out in Part 3 and in relation to Northern Ireland in Part 4. I shall describe the effect of the provisions in Part 2. The confiscation order is made by the Crown Court after a defendant has been convicted by the court or committed to the court for sentencing or for the imposition of a confiscation order. Thus the order is in personam on a defendant who is within the jurisdiction of the Crown Court. To calculate the amount of the confiscation order, the court must (i) identify the property that the defendant initially obtained as a result of or in connection with his criminal conduct and value this; (ii) decide whether the defendant still holds that property, or property that represents it and value this; and (iii) identify all the realisable property that the defendant owns and value this. The confiscation order is made in the higher of the values arrived at under process (i) and process (ii) subject to an upper limit in the amount of the value arrived at under process (iii). Where POCA speaks of property in the context of these processes, the property is worldwide. It matters not where in the world the defendant obtained property through his criminal conduct or where in the world he owns property when his realisable assets fall to be assessed. Thus where property is referred to in sections 76 to 83, which deal with these matters, the property referred to is property wherever situated in the world. Many of the provisions in Parts 2, 3 and 4 are concerned with identifying and securing property in each of the three jurisdictions, either in anticipation of the possibility of the making of a confiscation order or by way of enforcing a confiscation order. The relevant powers are conferred on the Crown Court in England and Wales and in Northern Ireland and on the Court of Session or the sheriff in Scotland. The provisions of the three Parts begin to apply as soon as a criminal investigation has been started in circumstances where there is reasonable cause to believe that the alleged offender has benefited from his criminal conduct. Although the terminology and the precise nature of the measures that can be ordered by the court differ in the case of Scotland from those in the other two jurisdictions, their effect is in substance the same. I shall refer to some of the more material provisions that relate to England and Wales. Section 41 permits the Crown Court to make a restraint order prohibiting any specified person from dealing with any realisable property held by him. The property need not be described in the order. Section 45 permits a constable, inter alios, to seize realisable property to which a restraint order relates to prevent it being taken out of England and Wales. Section 48 permits the Crown Court to appoint a receiver, described as a management receiver in respect of realisable property to which the restraint order applies. Section 50 permits the Crown Court to appoint a receiver, described as an enforcement receiver in relation to realisable property for the purpose of the enforcement of a confiscation order that has been made. While the restraint order takes effect in personam and is of worldwide effect, the provisions that relate to securing and realising property apply to such activities within England and Wales, for each of Parts 2, 3 and 4 deals with activities in the jurisdiction to which it relates. This is made plain by section 443 which provides, inter alia, for the making of Orders in Council (i) for an order made under Part 2 to be enforced in Scotland or Northern Ireland, for an order made under Part 3 to be enforced in England and Wales or Northern Ireland and for an order made under Part 4 to be enforced in England and Wales or Scotland; (ii) for a function of a receiver appointed pursuant to Part 2 to be exercisable in Scotland or Northern Ireland, for a function of an administrator appointed pursuant to Part 3 to be exercisable in England and Wales or Northern Ireland and for a function of a receiver appointed pursuant to Part 4 to be exercisable in England and Wales or Scotland. These provisions would seem to indicate, a fortiori, that the powers or functions conferred by Parts 2, 3 or 4 cannot be exercised outside the United Kingdom. Orders in Council pursuant to the above provisions have been made. The effect of these provisions is as I have summarised them at para 12(vii) above. Value confiscation is ordered in personam having regard to property worldwide, but no power is granted to authorities within the United Kingdom to secure or realise property that is situated outside the jurisdiction. This situation is dealt with by section 74. Section 74 relates to confiscation under Part 2 (sections 141 and 222 are analogous provisions in Parts 3 and 4). Section 74 deals with securing property abroad in anticipation of making a confiscation order and realising property in satisfaction of a confiscation order that has been made. It provides: Enforcement abroad (1) This section applies if (a) any of the conditions in section 40 is satisfied, (b) the prosecutor believes that realisable property is situated in a country or territory outside the United Kingdom (the receiving country), and (c) the prosecutor sends a request for assistance to the Secretary of State with a view to it being forwarded under this section. (2) In a case where no confiscation order has been made, a request for assistance is a request to the government of the receiving country to secure that any person is prohibited from dealing with realisable property. (3) In a case where a confiscation order has been made and has not been satisfied, discharged or quashed, a request for assistance is a request to the government of the receiving country to secure that (a) any person is prohibited from dealing with realisable property; (b) realisable property is realised and the proceeds are applied in accordance with the law of the receiving country. (4) No request for assistance may be made for the purposes of this section in a case where a confiscation order has been made and has been satisfied, discharged or quashed. (5) If the Secretary of State believes it is appropriate to do so he may forward the request for assistance to the government of the receiving country. (6) If property is realised in pursuance of a request under subsection (3) the amount ordered to be paid under the confiscation order must be taken to be reduced by an amount equal to the proceeds of realisation. These provisions are in accord with the scheme of the Strasbourg Convention. Civil Recovery As section 240, which introduces Part 5, explains, the purpose of that Part is to enable recovery in civil proceedings before the High Court or Court of Session of property which is, or represents, property obtained through unlawful conduct. Parts 2, 3 and 4 impose personal liability on defendants convicted of criminal conduct in each of the three jurisdictions. Part 5 is of very different effect. The focus is not on a particular defendant but upon property that is the product of criminal conduct, wherever in the world this is committed, as section 241 makes plain. It is not necessary that the person who holds or owns the property should be the person guilty of the criminal conduct. The claim form in the relevant proceedings has to be served on the holder of the property, wherever that person is domiciled, resident or present: see sections 243 and 244. Sections 245A to 255 provide for the measures that a court in England and Wales or Northern Ireland can take to preserve property in respect of which a recovery order may be sought. Sections 255A to 265 make similar provisions in respect of Scotland. Section 245A provides for a property freezing order. As this is the order under attack in this appeal I shall set out the material part of its provisions in full: (1) Where the enforcement authority may take proceedings for a recovery order in the High Court, the authority may apply to the court for a property freezing order (whether before or after starting the proceedings). (2) A property freezing order is an order that (a) specifies or describes the property to which it applies, and (b) subject to any exclusions (see section 245C(1)(b) and (2)), prohibits any person to whose property the order applies from in any way dealing with the property. (3) An application for a property freezing order may be made without notice if the circumstances are such that notice of the application would prejudice any right of the enforcement authority to obtain a recovery order in respect of any property. (4) The court may make a property freezing order on an application if it is satisfied that the condition in subsection (5) is met and, where applicable, that the condition in subsection (6) is met. (5) The first condition is that there is a good arguable case (a) that the property to which the application for the order relates is or includes recoverable property . Sections 245E to 245G make provision for the appointment by the High Court of a receiver in respect of property to which a property freezing order relates. Sections 246 to 247 make similar provision in relation to property that is not subject to such an order. In each case the order may require any person to whose property the order applies to bring the property to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place it in the custody of the receiver (if, in either case, he is able to do so). Section 255A provides (1) Where the enforcement authority may take proceedings for a recovery order in the Court of Session, the authority may apply to the court for a prohibitory property order Section 266 sets out the circumstances in which the court must make a recovery order: (1) If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order. (2) The recovery order must vest the recoverable property in the trustee for civil recovery. (3) But the court may not make in a recovery order (a) any provision in respect of any recoverable property if each of the conditions in subsection (4) or (as the case may be) (5) is met and it would not be just and equitable to do so, or (b) any provision which is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998 (c 42)). (4) In relation to a court in England and Wales or Northern Ireland, the conditions referred to in subsection (3)(a) are that (a) the respondent obtained the recoverable property in good faith, (b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it, (c) when he took the steps, he had no notice that the property was recoverable, (d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him. The provisions in (4) are repeated virtually verbatim in (5) in relation to a court in Scotland. The very fact that separate provision is made for making property recovery orders in England and Wales, Scotland and Northern Ireland indicates that these, and the ancillary steps in relation to securing and realising property, were, at least primarily, designed to apply to property within one of the three jurisdictions of the United Kingdom. Some of the provisions plainly relate exclusively to property within the United Kingdom, such as those in section 248, which deal with registration of property freezing orders and interim receiving orders in relation to land. The question raised by the PFO appeal is whether the totality of Part 5 relates exclusively to property within the United Kingdom. Provisions of Part 5 that relate to the recovery order itself Mr Jones drew attention to a number of provisions in relation to the recovery order itself, which he submitted could only apply in respect of property within the three jurisdictions of the United Kingdom. He relied upon the absence of any similar provisions that would apply in relation to property situated outside the United Kingdom as indicating that Part 5 did not apply to property outside the United Kingdom. Mr Eadie QC on behalf of SOCA did not accept that the provisions in question carried that significance. I shall refer to two exceptions. Section 269(1) provides that a recovery order is to have effect in relation to any property despite any provision (of whatever nature) which would otherwise prevent, penalise or restrict the vesting of the property. Section 269(2) then specifies a number of rights that are to be overridden by a recovery order. These include a right of return or other similar right, a right of return being defined as any right under a provision for the return or reversion of property in specified circumstances. Mr Eadie submitted that these provisions applied implicitly only to property within the jurisdiction. Mr Jones agreed with this submission, and argued that this was a further indication that recovery orders could only be made in respect of property within the jurisdiction. Hooper LJ dealt with section 269 in a different way. He held at para 155 that section 269(1) should be interpreted as applying only to provisions of English law as it could never have been intended to apply to provisions of the law of a foreign country in relation to property situated in that country. Mr Jones accepted the last part of this proposition, but on the basis that Part 5 as a whole did not apply to property situated in a foreign country. He did not, however, accept that section 269(1) only applied to provisions of English law. He pointed out that under the English rules of conflict of laws foreign law is sometimes determinative of title to property situated in this country. On the premise that Part 5 applies only to property within this jurisdiction there is no basis for restricting the ambit of section 269(1) to rules of English law. I found Mr Jones submissions compelling. Section 269 makes sense if Part 5 is concerned only with property within the United Kingdom. It does not make sense if the property is worldwide. Section 269 deals with provisions that are overridden by a recovery order. Sections 281 and 282 deal with exemptions from the effect of a recovery order. The first of these, under section 281, arises where the victim of the offence to which the recovery order relates demonstrates to the court that the property belongs to him. The implications of this I shall consider when I come, at paras 65 and 66, to deal with the coherence of the scheme laid down by POCA. Section 282 sets out a number of other exemptions, including property held by the Financial Services Authority, property held by a person in his capacity as an insolvency practitioner and property subject to any of a number of charges under United Kingdom statutes. Mr Jones submitted that if property subject to a recovery order were worldwide property, there would have to be equivalent provisions, even if only in general terms, to acknowledge exceptions that would be required in order to accommodate the laws of the countries in which the property was situated. Mr Eadies answer to this was that this was unnecessary as those laws would apply to defeat any claim based on the recovery order in any event. This is a fair response to Mr Jones point. None the less, these domestic provisions in relation to the reach of a recovery order add force to the submission that Part 5 is concerned only with property within the United Kingdom. In summary, apart from the definition of property in section 316(4), and the enigmatic section 286, there is nothing in Part 5, from first to last, that suggests that its application extends to property outside England and Wales, Scotland and Northern Ireland. Many of its provisions clearly relate to property within those jurisdictions. What then of the definition? If a recovery order can only be made in respect of property within England and Wales, Scotland and Northern Ireland, can the words in the definition wherever situated, which appear in the definition of property in Part 5, have any application in Part 5 at all? The answer to that question is that there are places in Part 5 where property means property wherever situated, even if a recovery order can only be made in respect of property within the United Kingdom. Section 240 provides in relation to Part 5: (1) This Part has effect for the purposes of (a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct, Even if property when first used means property within the United Kingdom Courts, the second time that the word is used it unquestionably means property wherever situated. Property within the United Kingdom that represents property obtained by criminal conduct, wherever the property was when obtained, is on any view, covered by Part 5. The same point can be made in relation to property in section 242, which deals with the initial obtaining of property through unlawful conduct, and to the original property in section 305, which deals with tracing property that represents the original property. Thus it is not right to postulate that the words wherever situated in the definition of property in section 316 make no sense if Part 5 does not permit the making of a recovery order in respect of property abroad. For these reasons, giving the words of Part 5 their natural meaning, and ignoring section 286, I would conclude that the provisions that they make in relation to an order for civil recovery apply only within the United Kingdom. Thus far I have been considering the provisions that appear in Part 5. Of perhaps greater significance are the provisions that do not appear in that Part. There are no provisions in relation to enforcement abroad to mirror those that appear at sections 74, 141 and 222 in relation to Parts 2, 3 and 4. Mr Jones submitted to the Court of Appeal that this indicated that Parliament did not intend that civil recovery orders could be made in respect of property situated abroad. Hooper LJ dismissed this submission out of hand at para 113 of his judgment. He held that, having taken the view that the Strasbourg Convention applied to enforcement orders made in civil proceedings, SOCA was entitled to seek to enforce both interim and final Part 5 orders abroad in those countries in which the Convention was in force or in which provisions similar to the Convention had been implemented. I find Hooper LJs conclusions surprising. They are at odds with the scheme of the Strasbourg Convention: see para 30 above. I do not understand how SOCA could seek to enforce abroad interim or final orders under Part 5. Part 5 makes no provisions for SOCA to take steps to secure property or enforce confiscation abroad. The relevant provisions in Part 5 in relation to securing property apply within the United Kingdom: see para 44 above. Realisation of confiscated property is exclusively a matter for the trustee for civil recovery in whom property vests under a recovery order. The suggestion that he would be able to recover property situated abroad is unrealistic: see para 71 below. Had Parliament, or those responsible for drafting POCA, intended Part 5 confiscation to extend to property outside the United Kingdom they would surely have included provisions parallel to section 74. The fact that they did not do so strongly suggests that there was no intention that Part 5 should have extraterritorial effect. Reciprocity I now turn to demonstrate that provisions for giving effect to requests for assistance from other states accord with an interpretation of Part 5 that restricts its application to property within the United Kingdom. One obvious explanation for the provisions of Part 5 is that they were intended to comply with the obligations of the United Kingdom in respect of incoming requests under the Strasbourg Convention, and to afford similar assistance to states not party to that convention. Section 444(1) provides for the making of an Order in Council to make provision for a prohibition on dealing with property which is the subject of an external request and for the realisation of property for the purpose of giving effect to an external order. Section 444(2) provides that such an Order may include provision which (subject to any specified modification) corresponds to any provision of Part 2, 3, 4 or 5, excluding Chapter 3, which deals with cash seizure. Section 447 defines an external request and an external order as follows: (1) An external request is a request by an overseas authority to prohibit dealing with relevant property which is identified in the request. (2) An external order is an order which (a) is made by an overseas court where property is found or believed to have been obtained as a result of or in connection with criminal conduct, and (b) is for the recovery of specified property or a specified sum of money. Thus, where a foreign court makes a finding that property has been, or is believed to have been, obtained as a result of or in connection with criminal conduct and orders the recovery of specified property or a specified sum of money, section 444 provides for an Order in Council that permits realisation of property to give effect to the order of the foreign court. Section 444 addresses both forms of confiscation order referred to in the Explanatory Report to the Strasbourg Convention: see para 28 above. Section 444 does not provide in terms that the property to be realised should be within the United Kingdom. The power conferred by section 444 was exercised by the making of the Order. The Order enables the powers conferred by Parts 2, 3, 4 and 5 of POCA to be exercised for the purpose of giving effect to external requests and external orders, so that the provisions of the Order mirror the provisions of POCA. Part 2 of the Order provides for the Secretary of State to refer an external request in connection with criminal investigation or proceedings, or an external order arising from a criminal conviction, to, among others in England and Wales, the Director of Public Prosecutions. He will then apply to the Crown Court for the exercise of the powers conferred by Part 2. Parts 3 and 4 of the Order make equivalent provisions in respect of Scotland and Northern Ireland. Parts 2, 3 and 4 provide for measures to secure and realise relevant property. Section 447(7) of POCA states that property is relevant property if there are reasonable grounds to believe that it may be needed to satisfy an external order which has been or may be made. Part 2 of the Order is headed Giving Effect in England and Wales to External Requests in Connection with Criminal Investigations or Proceedings and to External Orders Arising from Such Proceedings. Parts 3 and 4 have equivalent headings. Parts 2, 3 and 4 of the Order expressly provide that the external request or order must relate to property in, respectively, England and Wales, Scotland and Northern Ireland. In King v Director of the Serious Fraud Office [2009] UKHL 17; [2009] 1 WLR 718 the House of Lords held that the provisions of Part 2 of the Order only permitted a restraint order to be made in respect of property within England and Wales and that the same territorial restriction applied in respect of seizure and enforcement provisions. Why do Parts 2, 3 and 4 of the Order expressly limit the assistance that can be sought by the foreign state to assistance in respect of property within England and Wales, Scotland and Northern Ireland? The answer must be that which I gave in King v Director of the Serious Fraud Office at para 31: If a country wishes assistance from other countries in preserving or recovering property that is related to criminal activity, it makes sense for its request to each of those other countries to be restricted to the provision of assistance in relation to property located within its own jurisdiction. If each country were requested to take steps to procure the preservation or recovery of property on a worldwide basis, this would lead to a confusing, and possibly conflicting, overlap of international requests for assistance. Not only would such multiplication of activity be confusing, it would involve significant and unnecessary multiplication of effort and expense. This reasoning underlies the scheme for assistance laid down in the Strasbourg Convention. Part 5 of the Order provides for the Secretary of State to forward an external order to the enforcement authority in the United Kingdom for the purpose of enabling the enforcement authority to realise recoverable property in civil proceedings for the purpose of giving effect to the external order. The procedure for a civil recovery order in response to the external order is thus put in train. Part 5 of the Order is headed: Giving Effect in the United Kingdom to External Orders by Means of Civil Recovery (my emphasis). In contrast to Parts 2, 3 and 4, however, the body of Part 5 contains no express territorial limitation in relation to the property to which the Order relates. There would seem to be two possible explanations for this. One is that SOCA is correct in contending that Part 5 of POCA has extraterritorial effect and Part 5 of the Order is similarly intended to apply without territorial limitation. The other is that Part 5 of POCA applies only to property within the United Kingdom, so that there was no need to insert a territorial restriction in Part 5 of the Order. I believe that the latter is the correct explanation. In the first place that accords with the heading of Part 5 of the Order. In the second place, if Part 5 of POCA had extraterritorial effect, there would seem no reason to restrict Parts 2, 3 and 4 of the Order to property within the United Kingdom but to impose no such restriction in relation to Part 5. In summary, the terms of the Order accord with an interpretation of POCA that restricts the making of recovery orders under Part 5 to property that is situated within the United Kingdom. A coherent scheme that accords with international law The provisions of Part 5 of POCA comply with the requirements of reciprocity contained in the Strasbourg Convention. If a foreign court makes an order by way of value confiscation, the property of the defendant in England and Wales, Scotland or Northern Ireland can be seized and realised in satisfaction, or part satisfaction, of the order. If, after conviction, a foreign court makes an order for the confiscation of specific proceeds of crime which are in one of the three United Kingdom jurisdictions, they can be seized and realised. However Part 5 of POCA goes further than is necessary to meet the requirements of the Strasbourg Convention. Section 241 requires the court or sheriff to decide on a balance of probabilities whether the property is or represents property obtained through unlawful conduct, irrespective of whether such conduct occurred in the United Kingdom or abroad. If it is, or does, the Court must, subject to the provisions of Part 5, make a recovery order in respect of the property, whether or not any proceedings have been brought for an offence in connection with the property: see section 240(2). The claim form has to be served on the person holding the property and on any person holding associated property which the authority wishes to be subject to a recovery order, wherever domiciled, resident or present (section 243(2)). Part 5 makes complex provision for the protection of the rights of holders of associated property and of third parties who claim ownership of property that is subject to Part 5 proceedings. Those provisions require those persons to make their claims before the court in England and Wales, Scotland or Northern Ireland seised of the Part 5 proceedings. If the jurisdiction described above is founded on the presence of the property in question within the jurisdiction of the Court making the order, the action permitted by Part 5 is neither unreasonable nor contrary to international law. It is perfectly understandable that Parliament should wish to make provision for the confiscation of proceeds of crime held in the United Kingdom by someone outside the jurisdiction and proper that anyone holding that property, or associated property, should be served with the claim to confiscate it and that anyone claiming ownership of it or an interest in it should be expected to assert that claim before the court conducting the confiscation proceedings. Part 5 proceedings brought in respect of property held within the jurisdiction are also likely to be effective, thanks to the provisions in Part 5 for securing and realising the property in question. Thus the scheme of Part 5 is simple and rational. If property is identified in England and Wales, Scotland or Northern Ireland that is believed to be or to represent the proceeds of a crime committed outside the United Kingdom, recovery proceedings can be begun in the jurisdiction concerned. Steps can be taken to secure the property in question and subsequently to realise it within the jurisdiction in question. The proceeds of realisation of the property will be available to defray the cost of the proceedings. The holder of the property, and any holder of associated property or person claiming to own the property can reasonably be expected to take part in the proceedings to assert his right or otherwise to challenge the making of the recovery order. The picture is very different if SOCAs submissions as to the scope of Part 5 proceedings are correct. Part 5 proceedings in respect of property outside the jurisdiction would involve the assertion of an exorbitant jurisdiction in personam without any basis in international law. They would also be likely to prove ineffective. At para 14 of his judgment Hooper LJ cited the following description by the appellants of the effect of SOCAs submissions: Parliament has conferred authority on the enforcement authorities to bring proceedings to vest in a trustee for civil recovery property situated abroad which derives entirely from unlawful conduct abroad where neither the holder of the property, nor any intermediate holders of the property, or property from which the holder's property is derived, have ever been domiciled, resident or present within the jurisdiction; in other words, where there is no connection with the jurisdiction whatsoever. Hooper LJ accepted that this result was startling. He was right to do so. Asserting in personam jurisdiction over the holder of such property, or of associated property, has, as I have said, no precedent in international law. It would not be reasonable to expect the holder of the property, or any person holding associated property or claiming to own the property, to submit to the jurisdiction of a United Kingdom court when neither they nor the property had any connection with that jurisdiction. Any order made would be likely to be made unopposed. In these circumstances the exorbitant confiscation proceedings that had resulted in an unopposed recovery order would be unlikely to bear fruit. Hooper LJ stated on a number of occasions that the recovery order would operate in personam so as to give the trustee for civil recovery a right against the holder of the property. Such a right would, however, be likely to be nugatory, for there would be no basis upon which the trustee for civil recovery could found jurisdiction in the United Kingdom over the holder of the property or any associated property so long as they remained outside the jurisdiction. The fact that they had been served in the Part 5 proceedings would not confer jurisdiction in relation to a claim by the trustee. It was common ground that if in such circumstances the trustee sought to bring a civil claim in respect of the property in the state where it was located, his title would not be likely to be recognised. Hooper LJ advanced the following practical justification for according Part 5 extraterritorial effect. He held, at para 15, that if the appellants were correct: a court in this jurisdiction would be unable to make a civil recovery order in respect of land or other property in Spain bought with the proceeds of crimes committed here by a person resident here. Unable to obtain a civil recovery order, the enforcement authority could not take any steps here to require the person to hand over the property in Spain. Nor (so it appears) could the United Kingdom take enforcement action in Spain pursuant to [the Strasbourg Convention] (to which I return below) because there would be no order of the court to enforce: see paragraph 81 below. This reasoning is not compelling. The appropriate course in the circumstances envisaged by Hooper LJ would be to obtain a confiscation order under Part 2, 3 or 4 and to make a request for assistance via the Secretary of State in accordance with section 74. I can see no compelling reason why Parliament should have wished to confer on SOCA a right to seek a civil recovery order in respect of the proceeds of a crime that was not committed within the United Kingdom where those proceeds are not within the United Kingdom. There will, of course, be the possibility that SOCA will become aware of the existence of property in another jurisdiction that it has reason to believe is, or may be, the proceeds of crime. The natural course in those circumstances will be to pass on such information as it has about the property to the appropriate authorities in the country where the property is situated. For all these reasons, but for the effect of section 286, I would have reached the firm conclusion that the jurisdiction to make a civil recovery order conferred by Part 5 of POCA applied only in respect of property that is situated in England and Wales, Scotland or Northern Ireland. What is the effect of section 286? The enigma Section 286 provides: (1) Orders under this Chapter may be made by the Court of Session in respect of a person wherever domiciled, resident or present. (2) Such an order may be made by the Court of Session in respect of moveable property wherever situated. (3) But such an order in respect of a persons moveable property may not be made by the Court of Session where (a) the person is not domiciled, resident or present in Scotland, and (b) the property is not situated in Scotland, unless the unlawful conduct took place in Scotland. It is implicit in this provision that, if POCA did not include it, the jurisdiction that it confers would not exist. Thus section 286(2) purports to confer on the Court of Session the jurisdiction to make an order in respect of moveable property outside Scotland provided either that the holder is domiciled, resident or present in Scotland or the unlawful conduct through which the property was obtained took place in Scotland. The only thing that is agreed about this provision is that it purports to create for Scotland a position that differs from that which the Act provides in relation to the rest of the United Kingdom. This is puzzling as, when moving the amendment that introduced it in the House of Lords, Lord Goldsmith stated on 25 June 2002 that the intention was to achieve the same effect in all the jurisdictions of the United Kingdom: see Hansard (HL Debates), 25 June 2002, vol 636, col 1291. Equally puzzling is section 399 in the Explanatory Notes to the Act, the second sentence of which echoes a comment that Lord Goldsmith made on the same occasion: 399. The section provides that the Court of Session may make an order in respect of a person whether or not he is domiciled, present or resident in the United Kingdom. No similar provision is required in respect of England, Wales and Northern Ireland, due to the jurisdiction of the civil courts and the general provisions on property in section 316. In relation to this note Hooper LJ understandably remarked at para 128 that he could not understand the reference to section 316 of the Act as this applied to all three jurisdictions. No one has been able to proffer a satisfactory explanation for section 286(2). Part 3 of POCA would be the normal and appropriate route for confiscation in relation to property outside Scotland that was or represented proceeds of unlawful conduct that had taken place in Scotland. Why, in the case of Scotland, should special provision be made to bring such property within the scope of Part 5? Section 286(2) remains an enigma. It does not lead me to alter the conclusion that I have expressed in para 74 above, at least in so far as it relates to the position in England and Wales and Northern Ireland. Conclusion The High Court of England and Wales has no jurisdiction under Part 5 to make a recovery order in relation to property outside England and Wales. It follows that the court had no jurisdiction to make the worldwide property freezing order that was made in this case. The PFO appeal should be allowed and the property freezing order redrawn so that it applies only to property within the jurisdiction of the Court. It may be necessary for the Court to hear further argument as to how this should be done, for a question remains, that has not yet been addressed, as to whether the form of the order made in this case is appropriate even if its ambit is restricted to property within the jurisdiction. The foundation of the jurisdiction conferred under Part 5 of POCA is the existence of property believed to be the proceeds of crime. The existence of such property enables SOCA, as the enforcement authority, to serve a claim form on the holder of the property and on any other person who SOCA thinks holds associated property, even if that person is outside the jurisdiction, if SOCA wishes the property to be the subject of a civil recovery order see section 243. Section 243(3) requires the property either to be specified or described in the form in general terms. Section 245A, which I have set out at para 40 above, sets out the requirements of a property freezing order. Subsection (2)(a) states that a property freezing order is one that specifies or describes the property to which it applies. The property freezing order obtained in this case set out schedules of property to which the order applied. But the order was not restricted to specific property. It provided that the prohibition on disposal of assets applies, but is not limited to, the following categories of assets: (1) all real property, including, but not limited to the properties listed at Schedule 1 to this Order; (2) the balances standing to the credit of any bank and/or building society accounts, including, but not limited to the accounts listed at Schedule 2 to this Order; (3) any Personal Equity Plan (PEP); (4) any endowment policy; (5) any securities, including any debentures or shares in any company (wheresoever incorporated); and (6) any chattels, motor vehicles, or other personal property valued in excess of 2000, including, but not limited to the property listed at Schedule 3 to this Order. wheresoever located (whether within England and Wales or otherwise). It is questionable whether these general descriptions specify or describe property as required by section 245A. The property freezing order also required all the PFO appellants, together with the other respondents to the property freezing order, to disclose all their worldwide assets. It is not clear to me how the court had jurisdiction to make such an order. Part 8 of POCA expressly deals with disclosure, which is the subject of the DO appeal. If this Court is invited to make a revised property freezing order in which property is described in terms as general and speculative as have been adopted in this case it will require to be satisfied that they fall within the scope of section 245A. If the Court is invited to include in the revised freezing order an order for disclosure of assets it will require to be satisfied that it has jurisdiction to do so. The DO appeal This appeal challenges the validity of information notices addressed to Mr Perry and his daughters by SOCA pursuant to the disclosure order issued by Judge Kay QC on 8 August 2008: see para 6 above. The disclosure order was issued under Part 8 of POCA, which deals with Investigations. Part 8 applies to both confiscation proceedings under Parts 2, 3 and 4 of POCA and civil recovery proceedings under Part 5. In relation to Part 5 a disclosure order can be made only if property specified in the application for the order is subject to a civil recovery investigation and the order is sought for the purposes of the investigation: see section 357(3)(b). A civil recovery investigation is defined by section 341(2): For the purposes of this Part a civil recovery investigation is an investigation into (a) whether property is recoverable property or associated property, (b) who holds the property, or (c) its extent or whereabouts. Section 357 defines a disclosure order as follows: (4) A disclosure order is an order authorising an appropriate officer to give to any person the appropriate officer considers has relevant information notice in writing requiring him to do, with respect to any matter relevant to the investigation for the purposes of which the order is sought, any or all of the following (a) answer questions, either at a time specified in the notice or at once, at a place so specified; (b) provide information specified in the notice, by a time and in a manner so specified; (c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified. (5) Relevant information is information (whether or not contained in a document) which the appropriate officer concerned considers to be relevant to the investigation. Section 358 sets out the requirements for making a "disclosure order": (1) These are the requirements for the making of a disclosure order. (2) There must be reasonable grounds for suspecting that (b) in the case of a civil recovery investigation, the property specified in the application for the order is recoverable property or associated property. (3) There must be reasonable grounds for believing that information which may be provided in compliance with a requirement imposed under the order is likely to be of substantial value (whether or not by itself) to the investigation for the purposes of which the order is sought. (4) There must be reasonable grounds for believing that it is in the public interest for the information to be provided, having regard to the benefit likely to accrue to the investigation if the information is obtained. Section 359(1) provides that a person commits an offence if without reasonable excuse he fails to comply with a requirement imposed on him under a disclosure order. The offence carries a maximum sentence on summary conviction of imprisonment for six months. Section 359(3) provides for the more serious offence of knowingly or recklessly making a false statement in purported compliance with a requirement imposed under a disclosure order. This carries a maximum sentence of two years imprisonment in respect of a conviction after a trial on indictment. SOCAs application for a disclosure order was supported by a witness statement of Vanessa Ewing, a Financial Investigator on SOCAs staff. The application notice named as respondents Mr Perry, Mrs Lea Perry, Mrs Greenspoon, Miss Yael Perry and any other individual or entity specifically associated to the named respondents and property identified as relevant to the civil recovery investigation conducted by the Director General. In para 5.7 Miss Ewing described the property that was subject to the civil recovery investigation as any property held by or on behalf of Perry including, but not limited to, the following: (i) monies which have been credited to or have passed through the following: (a) accounts held by or on behalf of Israel Perry, including accounts held by his wife, Mrs Lea Lili Perry, and/or his two adult daughters, Mrs Tamar Greenspoon and Miss Yael Perry. In explaining why the order was sought in relation to Mr Perrys wife and daughters, Miss Ewing explained: I believe that it is common practice for criminals to use the proceeds of crime to acquire property held in the names of other family members or trusted associates. Persons involved in criminal activity often seek to reduce the amount of money and other property held in their own names in an attempt to minimise their exposure to the risk of confiscation or to avoid paying tax. It is therefore reasonable for the investigation to include property owned by Mrs Lea Lili Perry, Miss Yael Perry and Mrs Tamar Greenspoon in order to ascertain whether such property has a legitimate origin or whether it represents the proceeds of criminal conduct. The Order made by Judge Kay was addressed to all those named in the application notice, included, inappropriately, a penal notice, and conferred authority on SOCA in the general terms of section 357(4). The property referred to by Miss Ewing in her application was described in the most general terms. The purpose of the application, as explained by her, appears to have been to enable SOCA to carry out a roving commission aimed at identifying any property that might be the proceeds of Mr Perrys criminal conduct. A number of notices were issued by Miss Ewing pursuant to the disclosure order. Some sought information of funds in specific accounts. Some sought information in the following terms: (1) Provide the following information under section 357(4)(b) of the Act: (i) A statement of assets held by, or on behalf of, Israel PERRY in the United Kingdom including Crown Dependencies and British Overseas Territories; (ii) A statement of assets held by, or on behalf of, Israel PERRY in any other country other than the United Kingdom. The information sought includes, but is not limited to, the following: (a) Any assets held by a legal entity of which Mr PERRY is the beneficiary including worldwide companies, trusts and corporations; (b) Any precious metals and gems held by, or on behalf of, Israel PERRY; (c) Any valuable art, antiques and the like held by, or on behalf of, Israel PERRY; (d) Any loans made by, or on behalf of, Israel PERRY; (e) Any real estate held by, or on behalf of, Israel PERRY; (f) Any vehicles, pleasure craft etc held by, or on behalf of, Israel PERRY; (g) Any stocks, bonds, shares, bearer bonds, negotiable instruments, investment funds etc held by, or on behalf of, Israel PERRY; (h) Any bank accounts, in any currency, held by, or on behalf of, Israel PERRY; The exercise carried out by Miss Ewing seems to go beyond the purpose of a civil recovery investigation as defined in section 341(2). That investigation, as I understand the relevant provisions, relates to property whose existence has already been identified. Similar questions arise in relation to the scope of the disclosure order and some of the notices served under it as to those that I have raised in paras 79 to 83 above in relation to the scope of the property freezing order. Under section 357(4) the authority conferred by a disclosure order is restricted to enquiries with respect to any matter relevant to the investigation for the purposes of which the order is sought. It is questionable whether this authority extends beyond seeking information about property whose existence has already been identified. Mr Jones has not, however, sought to challenge the scope of the order or of the notices issued under it. He has made a more fundamental attack on SOCAs authority to issue the notices. Those notices were given to persons who were, and were known by SOCA to be, outside the jurisdiction of the United Kingdom. It was Mr Jones submission, advanced before the Court of Appeal, that the authority given by a disclosure order to give disclosure notices only applies to notices given to persons within the jurisdiction. In making this submission Mr Jones relied particularly on the presumption that, unless it clearly provides to the contrary, a statute will not have extraterritorial effect. The majority of the Court of Appeal, Ward and Carnwath LJJ, rejected the appellants attack on the validity of the notices; Richards LJ dissented [2010] EWCA Civ 907; [2011] 1 WLR 542. The gist of the reasoning of Carnwath LJ appears in the following short passage of his judgment: 50. is there any reason why persons who are reasonably considered to have an interest in property validly subject to a disclosure order, and who have a sufficient presence within the jurisdiction for a notice to be effectively given to them, should be treated as outside the legislative grasp of the statutory scheme? 51. As a matter of common sense, it is difficult to see why mere presence in or absence from the country at the time of sending or delivery of the notice is the critical factor. For example, a person normally resident at an address in this country could not sensibly seek to deny that the notice had been given to him at that address, merely because he happened to be out of the country at the time (for example, on a business or holiday trip). Ward LJ proceeded on the premise that a recovery order could be made in respect of property outside the jurisdiction. He commented at para 77 that the extraterritorial effect of Part 5 could not be denied and that he could not see why Part 8 should not act in the same way. For the reasons that I have given I consider that he proceeded on a false premise. The point is a very short one. No authority is required under English law for a person to request information from another person anywhere in the world. But section 357 authorises orders for requests for information with which the recipient is obliged to comply, subject to penal sanction. Subject to limited exceptions, it is contrary to international law for country A to purport to make criminal conduct in country B committed by persons who are not citizens of country A. Section 357, read with section 359, does not simply make proscribed conduct a criminal offence. It confers on a United Kingdom public authority the power to impose on persons positive obligations to provide information subject to criminal sanction in the event of non compliance. To confer such authority in respect of persons outside the jurisdiction would be a particularly startling breach of international law. For this reason alone I consider it implicit that the authority given under section 357 can only be exercised in respect of persons who are within the jurisdiction. Mr Jones referred to a number of other provisions of POCA which, so he submitted, indicated that notices under a disclosure order could only be given to persons within the jurisdiction. He pointed out that Part 8 applies to confiscation as well as to civil recovery. Section 376 as originally drafted included provision for the issue by the judge of a letter of request for the purpose of obtaining information relevant to a confiscation order. He submitted that this provision would have been superfluous if the authority conferred by section 357 extended to persons beyond the United Kingdom. Part 8 gives other investigatory powers, including the power to make a production order in relation to specified material, the power to issue search and seizure warrants and the power to make a customer information order. Mr Jones submitted that the provisions conferring these powers, either as a matter of language or because of the presumption against extraterritoriality, could only be exercised within the United Kingdom. These submissions have some merit and reinforce my view of the limited ambit of section 357. For these reasons I would also allow the DO appeal. I agree with Mr Jones suggestion that the appropriate relief is a declaration that the Disclosure Order made by Judge Kay does not authorise sending information notices to persons who are outside the United Kingdom. LORD REED I agree with Lord Phillips, for all the reasons that he gives, that these appeals must be allowed. In relation to the appeal concerning the property freezing order, however, I wish to consider further section 286 of POCA, in view of the extent to which the submissions of the parties, and the division of opinion in the court, have focused upon that provision. In expressing views about it, I am conscious that the provision is concerned with the jurisdiction of the Court of Session, that these are not Scottish appeals, and that this court has not had the benefit of consideration of the provision by the Scottish courts. In those circumstances, it would be undesirable to express any definite view about the effect of section 286 unless it is necessary to do so in order to determine the present appeal; and, in my view, it is not. Nevertheless, since the provision appears in a United Kingdom statute which must be read and understood as a whole, it is potentially relevant to the construction of the provisions with which the appeal is directly concerned. It was also the subject of much of the argument in the present appeal. Some consideration of its effect is therefore unavoidable. In recognition of that, both parties adduced expert evidence from Scottish counsel before the Court of Appeal. This court, on the other hand, as the final court of appeal in civil matters from all parts of the United Kingdom, has judicial knowledge of Scots, English and Northern Irish law, and may take cognisance of the law of one jurisdiction in an appeal originating in another (Elliot v Joicey [1935] AC 209; 1935 SC (HL) 57; Bank of East Asia Ltd v Scottish Enterprise 1997 SLT 1213). Both the appellants and the respondent were therefore represented by Scottish as well as English counsel. The international background In order to understand the relevant provisions of POCA, including section 286, it is necessary to begin by considering an important aspect of the background to the legislation. As Lord Phillips has explained, POCA is intended to fulfil certain international obligations of the United Kingdom. These include, in particular, the obligations arising under the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna, 20 December 1988), the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (Strasbourg, 8 November 1990), and the Council Framework Decision of 26 June 2001 on Money Laundering, the Identification, Tracing, Freezing, Seizing and Confiscation of Instrumentalities and the Proceeds of Crime (OJ 5.7.2001, L182/1). The legislation must therefore be considered in the light of those instruments. For present purposes, the most significant of them are the Vienna Convention and the Strasbourg Convention. The Vienna Convention The Vienna Convention is concerned with drugs offences. Article 5 relates to confiscation, defined by article 1 as meaning the permanent deprivation of property by order of a court or other competent authority. Article 5(1) requires each party to adopt such measures as may be necessary to enable confiscation of proceeds derived from relevant offences. Proceeds are defined in article 1 as meaning any property derived from or obtained, directly or indirectly, through the commission of a relevant offence. Article 5(2) requires each party also to adopt such measures as may be necessary to enable its authorities to identify, trace, and freeze or seize proceeds for the purpose of eventual confiscation. Article 5(4) relates to international co operation. Put shortly, article 5(4)(a) envisages that a request may be made by a party having jurisdiction over an offence to another party in whose territory proceeds referred to in article 5(1) that is to say, proceeds derived from offences are situated. On receipt of such a request, the party requested must either submit the request to its competent authorities for the purpose of obtaining an order of confiscation and, if such order is granted, give effect to it, or it must submit to its competent authorities an order of confiscation issued by the requesting party, with a view to giving effect to it in so far as it relates to proceeds situated in its territory. Article 5(4)(b) in addition provides for effect to be given to requests for the taking of provisional measures for the purpose of eventual confiscation. In terms of article 5(5)(a), proceeds confiscated by a party pursuant to article 5(4) are to be disposed of by that party according to its domestic law. The Strasbourg Convention The Strasbourg Convention is wider in its subject matter than the Vienna Convention, in that it applies to criminal offences generally, but narrower in its geographical scope, in so far as it was made under the auspices of the Council of Europe rather than the United Nations, and fewer states are party to it. Chapter III is concerned with international co operation in relation to confiscation of the proceeds of crime. The relevant provisions have been set out by Lord Phillips. Confiscation is defined by article 1(d) as meaning a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property. It is to be noted that, as in the Vienna Convention, the term confiscation has a wider scope than a confiscation order within the meaning of Parts 2, 3 and 4 of POCA, and is apt to include recovery orders of the kind for which Part 5 makes provision. Section 1 of Chapter III of the Convention, comprising article 7, sets out the general principles in relation to international co operation. In particular, article 7(2) imposes an obligation upon each party to the Convention to adopt such legislative and other measures as may be necessary to enable it to comply, under the conditions provided for in that chapter, with requests for confiscation, and with requests for investigative assistance and provisional measures with a view to confiscation. Section 2, comprising articles 8 to 10, is concerned with investigative assistance. In terms of article 8, in particular, parties undertake to afford each other, upon request, the widest possible measure of assistance in the identification and tracing of proceeds and other property liable to confiscation. Such assistance is to include any measure providing and securing evidence as to, amongst other matters, the existence and location of such property. Section 3, comprising articles 11 and 12, is concerned with provisional measures. In terms of article 11(1), in particular, parties are obliged, at the request of another party which has instituted criminal proceedings or proceedings for the purpose of confiscation, to take the necessary provisional measures, such as freezing or seizing, to prevent any dealing in, transfer or disposal of property which, at a later stage, may be the subject of a request for confiscation or which might be such as to satisfy the request. Section 4, comprising articles 13 to 17, is concerned with confiscation. Article 13, in particular, is concerned with the obligation to confiscate. Following the dual scheme created by article 5(4) of the Vienna Convention, article 13(1) of the Strasbourg Convention envisages alternative means by which a party may respond to a request made by another party for the confiscation of proceeds of crime which are situated in its territory. The first alternative, set out in article 13(1)(a), is that the requested party may enforce a confiscation order made by a court of the requesting party. The second alternative, set out in article 13(1)(b), is that the requesting party may submit a request to the competent authorities of the requested party so that the latter may obtain and enforce a confiscation order. Finally, in relation to the Strasbourg Convention, article 15 follows article 5(5)(a) of the Vienna Convention in providing that any property confiscated by the requested party shall be disposed of by that party in accordance with its domestic law, unless otherwise agreed by the parties concerned. As I shall explain, that provision is not reflected in the effect of a recovery order made under Part 5 of POCA. The contrast is relevant to the question whether such orders can be of the kind contemplated by article 13(1)(a) of the Convention, and therefore to the question whether such orders may fall within the scope of that exception to the ordinary principles of international law. The Framework Decision The Framework Decision seeks to ensure the effective implementation of the Strasbourg Convention within the EU. It does not however add anything of significance in relation to the issues with which the appeal is concerned. Parts 2, 3 and 4 of POCA Parts 2, 3 and 4 of POCA are concerned primarily with confiscation orders: orders, that is to say, made against a person convicted in criminal proceedings, for the payment of a sum of money equivalent to the value of any property or pecuniary advantage obtained as a result of or in connection with his criminal conduct (or such lesser amount as may be available). Such orders can be made in criminal proceedings in England and Wales, Scotland or Northern Ireland: see section 6 in relation to England and Wales, section 92 in relation to Scotland, and section 156 in relation to Northern Ireland. The order operates in personam, and the person against whom it is made is necessarily subject to the criminal jurisdiction of the court which makes the order. The courts are also empowered to order provisional measures. In particular, a restraint order can be made if, put shortly, a criminal investigation or criminal proceedings have been started in England and Wales, Scotland or Northern Ireland, and there is reasonable cause to believe that the alleged offender or defendant has benefited from his criminal conduct: see sections 41, 120 and 190. Such orders again operate in personam. The courts can also order enforcement measures, including measures authorising the securing and realisation of property. Such orders operate in rem. Parts 2, 3 and 4 each contain a provision concerned with overseas jurisdictions. If the conditions for the making of a restraint order are met, and the prosecutor believes that realisable property that is to say, property held by the defendant or by the recipient of a tainted gift is situated in a country outside the United Kingdom, then the prosecutor can send a request to the Secretary of State, with a view to its being forwarded to the government of the country where the property is situated: see sections 74, 141 and 222. In a case where no confiscation order has been made, the request is to secure that any person is prohibited from dealing with the property. If a confiscation order has been made and has not been satisfied, the request is also to secure that the property is realised and the proceeds are applied in accordance with the law of the requested country. These provisions fall within the ambit of articles 5(4) and (5) of the Vienna Convention and 11 and 13(3) of the Strasbourg Convention. It appears, therefore, that although property is defined by section 84(1), and by the corresponding provisions for Scotland and Northern Ireland, as all property wherever situated, and the powers to make restraint orders under sections 41, 120 and 190 can therefore be exercised in relation to property situated overseas, it is envisaged that the securing and realisation of such property will be dealt with by means of requests to foreign governments for assistance. That is as one would expect, since it is only the authorities of the jurisdiction where the property is situated which have the power to make effective orders of that nature in respect of such property. The wide definition of property is nevertheless essential in the context of Parts 2, 3 and 4, not only for the purposes of sections 74, 141 and 222 but more generally. In particular, as I have explained, a confiscation order is an order for the payment of a sum of money equal to the value of any property or pecuniary advantage obtained by the defendant from his criminal conduct. Although the court must have jurisdiction over the defendant in the criminal proceedings, there is no reason why the property obtained as a result of or in connection with the offence need also be situated within the United Kingdom, or within the part of the United Kingdom where the court is located. Part 5 of POCA As section 240(1) of POCA states, Part 5 has two purposes. The first, with which the present case is concerned, is to enable the enforcement authority to recover, in civil proceedings before the High Court or the Court of Session, property which is or represents property obtained through unlawful conduct. The Act thus creates an entirely new form of remedy. Section 240(2) makes it clear that such proceedings may be brought whether or not any criminal proceedings have been brought for an offence in connection with the property. Section 241 explains what is meant by unlawful conduct, and in particular that such conduct may occur in the United Kingdom or elsewhere. Accordingly, in distinction to Parts 2, 3 and 4, proceedings can be brought under Part 5 in circumstances where the court has no jurisdiction in respect of the offence in question. Chapter 2 of Part 5 is concerned with civil recovery. In particular, sections 243 and 244 are concerned with proceedings for recovery orders in England and Wales or Northern Ireland, and in Scotland, respectively. Each provision permits proceedings for a recovery order to be taken against any person who the enforcement authority thinks holds recoverable property, and requires the enforcement authority to serve the claim form or application upon the respondent wherever domiciled, resident or present. Accordingly, proceedings for a recovery order can be brought in circumstances where not only the court has no jurisdiction in respect of the offence in question, but the defendant is not domiciled, resident or present within the jurisdiction of the court. Having read only this far into the legislation, if one were to ask what connecting factor is required in order for the Court of Session to have jurisdiction in proceedings under Part 5, if the respondent is not domiciled, resident or present in Scotland, and if the Scottish courts do not have criminal jurisdiction over him, the answer which one would naturally expect is that the necessary connecting factor is the situation within Scotland of the property which is sought to be recovered. It is difficult to see what else it might be. It is however necessary to read further to find out whether that expectation is well founded. This is perhaps an appropriate point at which to note SOCAs submission that there need not be any connecting factor: POCA, it is argued, enables the enforcement authorities to bring proceedings in the High Court or the Court of Session to vest property situated abroad in a trustee for civil recovery, even where there is no connection with the United Kingdom whatsoever. As it is put in SOCAs written case, Parliament has decided that a Chinese thief, living in China, who has stolen property in China from a Chinese citizen may be the subject of civil recovery action. It is however inherently unlikely that such a result could have been intended by Parliament: in such circumstances, there would be no reason for the holder of the property to submit to the jurisdiction of the courts of this country, and no likelihood that any order granted by those courts without appearance would be given effect overseas. Again, however, it is necessary to examine the legislation further in order to determine what Parliament has done. A recovery order must vest the recoverable property in the trustee for civil recovery: section 266(2). The order may sever any property: section 266(7). Furthermore, the order may impose conditions as to the manner in which the trustee for civil recovery may deal with any property vested by the order for the purpose of realising it: section 266(8). The trustee for civil recovery is a person appointed by the court to give effect to a recovery order: section 267(1). His functions include securing the detention, custody or preservation of any property vested in him by the recovery order and realising the value of the property, other than money: section 267(3). By virtue of section 267(6), he has the powers mentioned in Schedule 7. The first of these is power to sell the property: paragraph 1. There is no equivalent of these provisions in Parts 2, 3 or 4. These provisions suggest strongly, if not conclusively, that a recovery order operates in rem to transfer title to the property to the trustee. That is the usual, although not invariable, sense in which the concept of vesting is employed, and that sense is consistent with the power to sever the property, and with the power of the trustee to sell the property and his function of realising its value. This interpretation of section 266 derives further support from section 269, which is concerned with rights, such as rights of pre emption or irritancy, which might otherwise be triggered by the vesting of the property in the trustee. Section 269 provides, so far as material: (1) A recovery order is to have effect in relation to any property despite any provision (of whatever nature) which would otherwise prevent, penalise or restrict the vesting of the property. (2) A right of pre emption, right of irritancy, right of return or other similar right does not operate or become exercisable as a result of the vesting of any property under a recovery order. A right of return means any right under a provision for the return or reversion of property in specified circumstances. (3) Where property is vested under a recovery order, any such right is to have effect as if the person in whom the property is vested were the same person in law as the person who held the property and as if no transfer of the property had taken place. The most significant of these provisions for present purposes is section 269(3), since that provision implies that the vesting of property under a recovery order involves the transfer of the property, so that it is held by the trustee rather than by the person who formerly held it. It was also accepted on behalf of SOCA that section 269(2) is one of a number of provisions in Part 5 which can only apply to property if POCA forms part of the lex situs: in other words, if the property is situated in one of the parts of the United Kingdom. One would ordinarily expect an order having the effect of transferring a real right of ownership to apply only in relation to property situated in the territory of the state where the order is made. As Lord Mance, delivering the judgment of the Board, said in Pattni v Ali [2006] UKPC 51; [2007] 2 AC 85 (para 24): Their Lordships also note the existence of a more general principle. The actual transfer or disposition of property is, in principle, a matter for the legislature and courts of the jurisdiction where the property is situate (state A), and will be recognised accordingly by courts in any other state (state B) It follows from it, conversely, that in the unlikely event that the courts of state A were to purport actually to transfer or dispose of property in state B, the purported transfer or disposal should not be recognised as effective in courts outside state A. That principle would apply with particular force if the order were made for the purpose of seizure or confiscation: Socit Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260, para 54 per Lord Hoffmann; Government of the Republic of Spain v National Bank of Scotland 1939 SC 413. Lord Justice Clerk Aitchison said in the latter case (at pp 433 434): such decrees of a foreign country as purport to have extra territorial effect, and to attach property in a subject situated, and at a time when it is situated, within this country or its territorial waters, will not be recognised by our laws and courts. As I have previously explained, however, article 5(4) of the Vienna Convention and article 13(1)(a) of the Strasbourg Convention allow for the possibility that a party may make an order confiscating property situated in the territory of another party, to which the latter party may choose to give effect, but is not obliged to do so. It therefore cannot be taken for granted that POCA does not allow for that possibility. It is necessary to examine the legislation further in order to decide whether POCA does so or not. Other provisions in Chapter 2 concern provisional measures. The available measures in England and Wales, and in Northern Ireland, are property freezing orders and interim receiving orders. The corresponding measures in Scotland are prohibitory property orders and interim administration orders. A property freezing order and a prohibitory property order are orders that prohibit any person to whose property the order applies from dealing with the property: sections 245A(2)(b) and 255A(2)(b). The court can make such an order only if it is satisfied that there is a good arguable case that the property to which the application for the order relates is or includes recoverable property, and that, if any of it is not recoverable property, it is associated property: sections 245A(4) and (5), and 255A(4) and (5). One consequence of that requirement is that such orders can be made only in respect of property which is, in principle, capable of being made the subject of a recovery order, or is mixed with such property in such a way as to be associated property as defined in section 245. If a recovery order operates in rem, as one might infer for the reasons I have explained at paragraphs 123 to 125, it follows that the scope of property freezing orders and prohibitory property orders is more limited than the nature of the orders themselves might otherwise have led one to expect. Part 5 contains no provision concerned with overseas jurisdictions. There is, in particular, no equivalent of sections 74, 141 and 222. This contrast with Parts 2, 3 and 4 (and also with Part 8, as originally enacted: see section 376) provides further support for the view that recovery orders are concerned solely with property situated within the part of the United Kingdom where the order was made. If such orders had extraterritorial scope, the absence of any provision corresponding to sections 74, 141 and 222 would be difficult to understand. In that connection, it is also relevant to note that Part 5 requires that the realised proceeds of property vested in the trustee must be applied in accordance with section 280. That section requires that the net proceeds, after payment of the remuneration and expenses of the trustee, must be paid to the enforcement authority. No provision is made for the possibility that the proceeds of realization of property situated in another jurisdiction might be applied in accordance with the law of that jurisdiction, as envisaged by article 5(5)(a) of the Vienna Convention and article 15 of the Strasbourg Convention. In that respect, recovery orders again differ from confiscation orders made under Parts 2, 3 and 4: in the case of those orders, sections 74(3), 141(3) and 222(3) provide, in relation to enforcement abroad, that the request is to be that realisable property is realised and the proceeds are applied in accordance with the law of the receiving country. I shall return to section 286, which is concerned with the power of the Court of Session to make orders under Chapter 2 of Part 5, and to section 316(4), which defines property for the purposes of Part 5. Part 11 of POCA It is also relevant to note one of the provisions in Part 11 of POCA, which is concerned with co operation. Section 444 deals with external requests and orders. It allows provision to be made by Order in Council for a prohibition on dealing with property which is the subject of an external request, or for the realisation of property for the purpose of giving effect to an external order. An external request is a request by an overseas authority to prohibit dealing with property which may be needed to satisfy an external order which has been or may be made: section 447(1) and (7). An external order is an order made by an overseas court where property is found or believed to have been obtained as a result of or in connection with criminal conduct, and is for the recovery of specified property or a specified sum of money. Such an Order in Council may include provision which (subject to any specified modifications) corresponds to any provision of Part 2, 3 or 4 or Part 5, except Chapter 3, which concerns the recovery of cash in summary proceedings. Section 444 thus enables articles 11 and 13(1) of the Strasbourg Convention, and the corresponding provisions of the Vienna Convention, to be implemented by the United Kingdom. The Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005 (SI 2005/3181) was made under sections 444 and 459(2) of POCA. Part 5 of the Order concerns recovery orders, and contains articles corresponding to sections 286 and 316(4) of POCA: see articles 197 and 213(4) respectively. The Order was construed by the House of Lords in King v Director of the Serious Fraud Office [2009] UKHL 17; [2009] 1 WLR 718 as conferring jurisdiction upon the Crown Court to make a restraint order in response to an external request only where the request concerned property in England and Wales. The same territorial requirement was also held to apply to the seizure and enforcement provisions of Part 2 of the Order. Although the terms of the Order differ in some significant respects from the terms of POCA, the speech of Lord Phillips, with which the other members of the committee agreed, contains observations which are equally germane to the present case. In particular, Lord Phillips rejected the contention that an Order made under section 444 might have been intended to enable foreign countries to obtain worldwide orders from the British courts (para 37). His Lordship also observed that, although property was defined by section 447(4) of POCA as meaning property wherever situated, whether the word bore that meaning depended on the context in which the word was used. Thus, where the Order expressly or by implication referred to property in England and Wales, it necessarily referred only to property there situated (para 37). Section 316(4) It is necessary next to consider section 316(4), which defines property for the purposes of Part 5 as all property wherever situated. At first sight, that might be thought to entail that the power to make a recovery order extended to property anywhere in the world, provided that it had been obtained through unlawful conduct occurring anywhere in the world and was therefore recoverable property as defined in section 304(1). As I have explained, however, there are a number of factors which point away from that conclusion. To recap: (1) Part 5, unlike Parts 2, 3 and 4, makes no provision in respect of overseas jurisdictions; (2) Part 5, unlike Parts 2, 3 and 4, makes no provision for the proceeds of realisation of recoverable property to be applied in accordance with foreign law, as contemplated by article 5(5)(a) of the Vienna Convention and article 15 of the Strasbourg Convention; (3) recovery orders under Part 5, unlike confiscation and restraint orders under Parts 2, 3 and 4, appear on the face of the provisions (notably sections 266, 267, 269 and Schedule 7) to operate in rem; (4) orders taking effect in rem ordinarily apply only to property situated within the territorial jurisdiction of the court; (5) there is a presumption that Parliament does not intend to legislate in respect of property outside the United Kingdom, and in particular that legislation is not intended to authorise the seizure or confiscation of property situated outside the United Kingdom; (6) courts in the United Kingdom have no power to make effective orders purporting to transfer real rights of ownership of property situated outside the jurisdiction of the court; and (7) it is accepted that references to property in a number of other provisions of POCA, including provisions of Part 5, can refer only to property situated in the United Kingdom. Some of these points have greater force than others. Cumulatively, however, they provide compelling support for the conclusion that the ambit of recovery orders is intended to be confined to property located within the part of the United Kingdom where the court in question exercises jurisdiction. Subject to section 286, it appears therefore that, although property is defined so widely by section 316(4) that the power to make recovery orders under section 266 might be understood as extending to property located overseas, such an interpretation of section 266 would be mistaken: in the context of the section, the word property has to be understood as referring only to property situated within the territorial jurisdiction of the High Court or the Court of Session, as the case may be. The wide definition of property is nevertheless essential in the context of other provisions of Part 5. In particular, the tracing provisions in Part 5 have the consequence that a recovery order may be appropriate in respect of property located within the jurisdiction of the court which represents property unlawfully obtained elsewhere: see, for example, section 305. Civil jurisdiction in the Scottish courts Before coming finally to section 286, it is necessary to explain in outline the relevant aspects of Scots law in relation to jurisdiction, apart from POCA. I should emphasise that my purpose here is merely to explain matters in the most general terms, so as to provide some background against which to attempt to understand the effect of section 286. In most ordinary civil proceedings before the Scottish courts, jurisdiction is regulated by the rules contained in Schedule 8 to the Civil Jurisdiction and Judgments Act 1982, as amended. In the present context, it is convenient to begin with rule 5(1)(a), which confers upon the courts for the place where immovable property is situated exclusive jurisdiction in proceedings which have as their object rights in rem in immovable property (sic: the terms movable and immovable are derived from the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters rather than the Scots law of property, which distinguishes between heritable and moveable property. It is the latter terminology which is employed in section 316(4) of POCA). The exclusive jurisdiction of the forum rei is reinforced by rule 5(2), which precludes a Scottish court from exercising jurisdiction in a case where immovable property is situated outside Scotland and the court would have exclusive jurisdiction if the property were situated in Scotland. A similar rule applies to the allocation of jurisdiction within the United Kingdom: Schedule 4, rule 11(a)(i). Even before the enactment of the 1982 Act, that approach had long been established under the common law. For example, in Cathcart v Cathcart (1902) 12 SLT 182 Lord Low declined to grant a declarator that the pursuer was entitled to a liferent of land situated in England. He observed, at p 185: Real estate in England is beyond the jurisdiction of the Scotch courts Further, if decree of declarator in terms of the second conclusion was pronounced, this court would have no power to give practical effect to the right thereby declared. The pursuer would require to go to England to obtain his remedy. Would the English courts, according to the principles of international law, be bound to recognise and act upon the declarator of this court? I am of opinion that they would not I think that the answer would be that it was for the court of the country where the real estate was situated to say what was the result, as regards the rights of the parties [of the relevant events]. I am therefore of opinion that the question is one with which this court is not competent to deal. In relation to proceedings concerned with moveable property, Schedule 8 contains a number of relevant rules. Under rule 1, the general rule is that persons can be sued in Scotland if they are domiciled there. The concept of domicile is defined for this purpose on the basis of residence: section 41. Under rule 2, there are also a number of special grounds on which the Scottish courts may have jurisdiction. In particular, under rule 2(i) a person may be sued in Scotland in proceedings which are brought to assert, declare or determine proprietary or possessory interests, or rights of security, in or over movable property, or to obtain authority to dispose of movable property, if the property is situated in Scotland. There are in addition other rules which may be relevant to confer jurisdiction in particular circumstances. Broadly similar rules apply to the allocation of jurisdiction within the United Kingdom, under Schedule 4, rules 1 and 3(h)(ii). The Scottish courts may therefore have jurisdiction in proceedings concerned with the ownership of moveable property situated outside Scotland. In practice, however, as I have explained, the courts in Scotland, as in the other parts of the United Kingdom, would be unlikely to make an order in rem purporting to transfer or dispose of property in another state. Accordingly, summarising the matter broadly, proceedings concerned with rights in rem can ordinarily be brought in the Scottish courts in relation to heritable property only if the property is situated in Scotland. They can ordinarily be brought in relation to moveable property if the property is situated in Scotland or if the defender is domiciled in Scotland. They cannot otherwise ordinarily be brought, in the absence of particular circumstances in which other grounds of jurisdiction may arise (for example, under rule 2(h) of Schedule 8). There are a number of circumstances where jurisdiction is not governed by Schedules 4 or 8. In particular, those schedules do not affect the operation of any enactment which confers jurisdiction on a Scottish court in respect of a specific subject matter on specific grounds: sections 17(1) and 21(1)(a) of the 1982 Act. Section 286 of POCA is an example of such an enactment. Section 286 I can now turn at last to section 286 itself. It is headed Scope of powers (Scotland), and provides: (1) Orders under this Chapter may be made by the Court of Session in respect of a person wherever domiciled, resident or present. (2) Such an order may be made by the Court of Session in respect of moveable property wherever situated. (3) But such an order in respect of a person's moveable property may not be made by the Court of Session where (a) the person is not domiciled, resident or present in Scotland, and (b) the property is not situated in Scotland, unless the unlawful conduct took place in Scotland. The words this Chapter refer to Chapter 2 of Part 5 of POCA, which as I have explained is concerned with civil recovery. The orders which may be made by the Court of Session under Chapter 2 are recovery orders, prohibitory property orders, interim administration orders and consent orders (made under section 276). Since these orders can only be made in respect of property which is at least arguably recoverable (or associated property), it is the extent of the courts jurisdiction in relation to the power to make recovery orders which is of critical importance. Section 286 provides further support for the conclusion that the definition of property in section 316(4) does not have the effect of enabling a recovery order to be made under section 266 in respect of property anywhere in the world. If section 266, read with section 316(4), had that effect, the provision made by section 286(2) in respect of moveable property would be redundant, and the distinction implicitly drawn between heritable and moveable property would be inexplicable. Section 286(3) is also difficult to reconcile with such an interpretation, since it qualifies the jurisdiction conferred by section 286(2) in relation to moveable property. This supports the view that section 266 does not itself define the courts jurisdiction to make a recovery order, but confers a power which can be exercised in circumstances in which the court possesses jurisdiction, based upon some independent foundation. A distinction has to be drawn, that is to say, between the nature of the power conferred by section 266, on the one hand, and the jurisdiction of the court: a jurisdiction arising, in relation to the Court of Session, from section 286 and from the background rules of civil jurisdiction, so far as they are not implicitly displaced. If recovery orders operate in rem, and the jurisdiction of the Scottish courts to make orders of that character is not ordinarily conditional upon the holder of the property being domiciled, resident or present in Scotland, section 286(1) is as one would expect. It also enables the jurisdiction of the court to meet the requirements of article 5(4) of the Vienna Convention and article 13 of the Strasbourg Convention. The absence from section 286 of any provision in respect of heritable property is also as one would expect. As I have explained, one would not expect the court to have jurisdiction to make orders in rem in respect of heritable property outside Scotland. Since the court would not possess such a jurisdiction under the 1982 Act or under the common law, there is no necessity for POCA to alter that position. In relation to moveable property, on the other hand, the position is different. As I have explained, the ordinary rules of civil jurisdiction in Scotland enable the courts to exercise jurisdiction in relation to moveable property outside Scotland (including questions concerning proprietary rights in respect of such property), provided the defender is domiciled in Scotland or other requirements specified in the 1982 Act are met. At the same time, one would not expect the court to exercise a power to transfer or dispose of moveable property situated outside Scotland, in accordance with the principle explained in Pattni v Ali [2006] UKPC 51; [2007] 2 AC 85, or to purport to confiscate moveable property situated in another sovereign state, in accordance with the principles discussed in Socit Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260 and in Government of the Republic of Spain v National Bank of Scotland 1939 SC 413. The width of the courts formal jurisdiction does not therefore entail that the court will exercise its powers to the limits of its jurisdiction, where for example such an exercise would be ineffective or would contravene recognized principles of international law. The jurisdiction conferred by section 286(2) and (3) in relation to moveable property differs in a number of respects from the courts ordinary jurisdiction: instead of the possible grounds of jurisdiction set out, in particular, in rules 1 and 2 of Schedule 8 to the 1982 Act, the apparent effect of section 286(2) and (3) is to confer jurisdiction upon the court, for the purposes of chapter 2 of Part 5 of POCA, where moveable property is situated in Scotland, and also where it is situated elsewhere and either (a) the holder of the property is domiciled, resident or present in Scotland, or (b) the unlawful conduct took place in Scotland. The rationale of such a wide jurisdiction is not obvious, given that the power conferred by section 266 to make a recovery order (and therefore the powers to make other orders in respect of property which is at least arguably recoverable) is more limited in scope, as I have explained. In the circumstances, counsel referred the court to the legislative history of the provision, and in particular to statements made in Parliament during the passage of the Bill. These statements, even if admissible as an aid to interpretation, do not however provide any clear explanation of the intention of section 286(2) and (3). They confirm that section 286 was intended to regulate the question of jurisdiction, and indicate that its effect was intended to be the same as was achieved for England and Wales and Northern Ireland by a combination of the provisions on property in section 316 and the general rules on the jurisdiction of the civil courts. One matter on which all parties to these proceedings are agreed, however, is that that is not the case: on any view, the position in England and Wales and Northern Ireland is not the same as that set out in section 286(2) and (3). It appears therefore to be possible that the drafting of section 286(2) and (3) may have reflected a misunderstanding. Since POCA deals with matters falling partly within the competence of the Scottish Parliament, proceedings also took place in that Parliament in accordance with the arrangements known colloquially as the Sewel convention: see Hansard (HL Debates), 21 July 1998, col 791. Section 286 was not however specifically considered, and neither the discussion in the Parliament nor the Sewel memorandum prepared by the Scottish Executive appears to shed any light on its intended effect. As Sir Winston Churchill once said in another context, it is a riddle, wrapped in a mystery, inside an enigma. The effect of section 286 is however not of critical importance in the present context. If section 266 is to be understood as referring to property within the territorial jurisdiction of the relevant court, for the reasons I have explained, then it follows that the power conferred by section 266 is consequently restricted to such property. The fact that the jurisdiction of the Court of Session, as regulated by section 286 for the purposes of chapter 2 of Part 5, may be wider than that of the High Court does not alter the meaning and effect of section 266 in relation to the High Court, which is the issue at the heart of the present appeal. If section 266 confers the same power upon courts in all parts of the United Kingdom, as it appears to do, then it may be that section 286 has equally little practical effect upon the ambit of recovery orders made by the Court of Session. That is not however an issue which need be, or ought to be, decided in the present case. SIR ANTHONY HUGHES I respectfully agree with Lord Phillips that both appeals must be allowed, and for the reasons which he gives. I add only some very brief words about the PFO appeal. For my part, if it were possible to construe the complex provisions of POCA in such a way as to admit of limited extraterritorial effect for Part 5, but only where there is a sufficient jurisdictional connection between a part of the UK and the criminal proceeds, I should have wished to do so. I am, however, reluctantly persuaded that this cannot be achieved by construction and would involve illegitimately re writing the statute. For the reasons explained by Hooper LJ, cited by Lord Phillips at para 72 above, it would make excellent sense for the English court to have jurisdiction to make a civil recovery order in relation to real or personal property in Spain bought with the profits of crime by an English criminal, or by someone who committed his offence in England and Wales. It will not always be possible to achieve removal of such proceeds by means of a post conviction confiscation order under Part 2; there may, for a number of reasons, be no conviction for example the criminal may be dead, or untriable because resident in a country from which no extradition is possible. It seems to me that the kind of jurisdictional links contemplated by section 286 for the limited case of moveable property in the case of Scottish courts could sensibly serve as a model for all property and for all UK courts: that is to say links (1) because the crime was committed here, (2) because the offender or holder of the property is domiciled, resident or present here, or (3) because the relevant property is here. Such jurisdiction would not, as it seems to me at least, be exorbitant, nor would it offend the sovereignty of other States. That, however, is not what the statute can be made to say. What cannot, as it seems to me, be the correct construction is that, as SOCA was obliged to submit, it has jurisdiction to seek a (mandatory) civil recovery order over property in China which is the product of a crime committed in China by an offender who has never left that country. LORD JUDGE AND LORD CLARKE We will explain briefly why we are unable to agree with the conclusions of the majority of the Court that the appeal in relation to the worldwide property freezing order (PFO) should be allowed. We agree that the Proceeds of Crime Act 2002 (the Act) is poorly drafted. Nevertheless its objective is clear and can be explained in uncomplicated terms. Those who engage in criminal or unlawful conduct, whether here or abroad, should be deprived of the property which is or which represents the proceeds of their crimes or unlawful conduct. Part 2 of the Act addresses confiscation orders which may be made following convictions recorded in England and Wales. For these purposes section 84(1) provides: Property is all property wherever situated and includes (a) money; (b) all forms of real or personal property; (c) things in action and other intangible or incorporeal property. For present purposes, there are two crucial features. First, the property extends to all property including all forms of real or personal property and it applies to all such property wherever in the world it is situated. It was not suggested in the course of argument that, where these words appear in Part 2, they should be given a limited meaning. They mean what they say, that is, wherever in the world the property (whatever form it may take) is situated. Given the ease with which professional criminals in particular can move their assets around the world, by section 74 the Act unsurprisingly makes provision for the enforcement of confiscation orders abroad. It is an elementary principle of statutory construction that legislation in this country which purports to have effect abroad requires to be expressed in unequivocal language. Sovereign states are sovereign. We do not interfere in the affairs of a sovereign country in order to enforce orders made here which impact on people living and property located abroad. Accordingly, the provisions relating to the enforcement abroad of a confiscation order made here are structured so as to give full recognition to these principles, and the structures created for these purposes have not been called into question. Part 5 of the Act is concerned with the recovery of the proceeds of unlawful conduct when there is no criminal conviction in this jurisdiction. It applies to conduct which is unlawful within the United Kingdom or conduct which would be criminal abroad and which would be recognised as criminal here. Among its other wide ranging effects, it provides the statutory process by which those convicted of crimes abroad (including citizens of the relevant country) may be deprived of the proceeds or profits which have found their way into this country. Where the statutory conditions are satisfied the court is required to make a civil recovery order: by contrast, the effect of the order is that the enforcement authority is enabled to take the appropriate steps to enforce it. For the purposes of a civil recovery order under Part 5, property is identified in identical terms to the property which may be made the subject of the confiscation processes in Part 2 of the Act. An almost identical definition of property to that in section 84(1) is contained in Parts 3, 4, 5, 6, 7, 8 and 11 of the Act. Section 316 is the general interpretation section for the purposes of Part 5. Section 316(2) provides that the following provisions apply for the purposes of Part 5. Those provisions include section 316(4), which provides: Property is all property wherever situated and includes (a) money, (b) all forms of property, real or personal, heritable or moveable, (c) things in action and other intangible or incorporeal property. It can be seen that the language is the same as that in section 84, save that it expressly includes language referable to Scottish property. In our judgment the expression all property wherever situated must have the same meaning in each of the sections in which it appears, including section 316(4). With respect to those who take a contrary view, it seems to us that the language unequivocally describes not only the whereabouts of the property encompassed within Part 5, but also the nature and type of property covered by it. This does not mean that absolutely every provision in the Act which refers to property must be taken as a reference to property wherever situated because it might be clear from the particular provision that it must be more limited. A good example is section 45(1) which is referred to in paras 14 and 35 above. It confers on a constable the power to seize property to prevent its removal from England and Wales. Since the power only arises in the case of property in England and Wales, it cannot refer to property wherever situated. Subject to such cases, the definition sections are of general effect. Until Mr James Eadie QC addressed the problems to which this appeal has given rise, we suspect that the extent of the control mechanisms built into the statutory processes had not been fully appreciated. However, as it seems to us, a civil recovery order in relation to property situated outside the jurisdiction of the United Kingdom is not designed to have extra territorial effect in the sense that it should operate so as to oblige a court or authority in a foreign country, or for that matter anyone living in that country, to obey the order. That would contravene the sovereignty principle. Indeed, if the enforcement authorities or the trustee for civil recovery were to barge into a foreign country demanding the return of property situated there on the basis of a civil recovery order made here, the response would almost certainly be decidedly cold, and ultimately ineffective. On the other hand, when properly informed that a court in this jurisdiction has made such an order, the authorities abroad would be likely to appreciate that there is or may be property within its jurisdiction which represents the proceeds of unlawful conduct and that, in accordance with their own procedures, this might, with advantage, be removed from the criminal, and dealt with in accordance with domestic principles within its own jurisdiction. In this way the criminal would be deprived of the proceeds and profits of crime or unlawful conduct. Notwithstanding the requirement on the court here to make a recovery order if satisfied that the necessary conditions are satisfied, we believe that control mechanisms have been created within Part 5 to ensure that the order may be made subject to appropriate conditions which would avoid any improper extra territorial effect or infringement of the principle of sovereignty. In the language of section 266(8) the order may address the manner in which the trustee for civil recovery may deal with any property vested by the order for the purpose of realising it. Section 267(5) acknowledges that the obligation on the trustee to maximise the amount payable to the enforcement authority must be realised only so far as practicable. The powers of the trustee under Schedule 7 extend to starting or continuing legal proceedings in relation to property, that is, property wherever situated. In our judgment this provides the trustee with the power to do so where the property is situated abroad. If so, any such proceedings would be governed by the legal structures which obtain in the relevant foreign country. Mr Eadie accepted in argument that the exercise of the functions of the trustee for civil recovery specified in section 267 of and Schedule 7 to the Act are subject to the powers of our court to impose conditions in relation to the recovery process which acknowledge the sovereignty principle and give effect to it. We agree. Some reliance was placed on section 269. However, in our opinion section 269 is directed only to the courts of England and Wales, Scotland or Northern Ireland as the case might be. It tells those courts which legal rights must take priority over a recovery order. These may include rights under provisions of foreign law, where those provisions of foreign law are applicable under English conflicts rules. However section 269 does not purport to tell foreign courts what rules they may or may not apply. It therefore respects the principle of sovereignty. Section 243 provides that the enforcement authority must serve the claim form on the respondent wherever domiciled, resident or present. The parties agreed that it was not necessary to obtain permission to serve the claim form out of the jurisdiction on the basis that this is a claim which the court has power to determine within CPR 6.33(3). We assume for present purposes (without deciding) that that is correct. The claim form must then be served in accordance with CPR 6.40, which includes safeguards and, at any rate in many cases, requires service in accordance with the local law. In short, in relation to property situated abroad, to which Part 5 applies, we believe that it is open to the court making a civil recovery order to direct that any attempt to enforce the order abroad should not be made, save and except through the legal processes which obtain in the country where the property is situated, or in accordance with the procedures which apply to the enforcement of a confiscation order abroad, or subject to any other appropriate conditions. Viewed in this way, Part 5 of the Act is not inconsistent with and does not contravene the sovereignty principle. We recognise that the Strasbourg Convention does not expressly authorise proceedings of this kind but there is nothing in it which prohibits them. There is in our opinion nothing in the scheme or language of the Act which supports the conclusion that Part 5 is limited to property within the jurisdiction. Indeed section 286 shows that it was not so restricted. Section 286 is part of a series of sections entitled Miscellaneous and is itself entitled Scope of powers (Scotland). It provides: (1) Orders under this Chapter may be made by the Court of Session in respect of a person wherever domiciled, resident or present. (2) Such an order may be made by the Court of Session in respect of moveable property wherever situated. (3) But such an order in respect of a persons moveable property may not be made by the Court of Session where (a) the person is not domiciled, resident or present in Scotland, and (b) the property is not situated in Scotland, unless the unlawful conduct took place in Scotland. The section thus provides for the making of a recovery order where the relevant person is not domiciled, resident or present in Scotland and where the property is not situated in Scotland. The view expressed by the majority is inconsistent with that section, which (whether or not it is an enigma) is part of the Act. It is true that the section does require that in such circumstances a recovery order can only be made where the unlawful conduct took place in Scotland but that is not relevant to the question which divides the court, which is whether Part 5 applies to property outside the jurisdiction. Section 286 also provides assistance on the true construction of section 316(4). The expression wherever domiciled, resident or present in section 286(1) plainly means wherever situated in the world and the expression in respect of moveable property wherever situated in section 286(2) equally plainly means wherever the moveable property is situated in the world. The contrary is not suggested. In our judgment, there is no escape from the conclusion that wherever situated in section 316(4) means the same. It follows that, if, as the majority say at para 44, the question raised by the PFO appeal is whether the totality of Part 5 relates exclusively to property within the United Kingdom, the question must be answered in the negative. That conclusion seems to us to be supported by the scheme of Part 5. The general purpose of Part 5 is set out in section 240, which is defined in section 240(1) as for the purposes of enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct. The majority recognise that the second reference to property in that subsection must be to property wherever situated because section 241(2) makes it clear that unlawful conduct includes conduct which takes place outside the United Kingdom provided that it is unlawful in the place where it occurs and would be unlawful if it took place in the United Kingdom. There is nothing in section 240(1) which supports the conclusion that property where it is first used is to have a different meaning from property in the same section. Indeed, read naturally, it has the same meaning. The section provides for a recovery order to recover property which is property obtained through unlawful conduct. Given that it is agreed that property obtained through unlawful conduct can be property outside the jurisdiction, it must follow that property which is such property can be property outside the jurisdiction. The plain effect of section 240(1) read together with the definition section in section 316(4), which by section 316(2) applies for the purposes of Part 5, is that both references to property are references to property wherever situated. So too, as is accepted, are the references to obtaining property by unlawful conduct in section 242. This conclusion does not depend upon section 286 but is supported by it because it provides a particular example of a case where a recovery order may be made in respect of property outside the jurisdiction. So far as moveable property is concerned, the position in Scotland is clear. Section 286 shows that it includes moveable property anywhere in the world. It does not however apply in England. The provisions which apply in England are not limited in any relevant respect. As already stated, the definitions of property as being wherever situated in sections 84(1) in Part 2 and section 316(4) in Part 5 are part of the central provisions of those Parts. Moreover, section 240(2) provides that the powers conferred by Part 5 are exercisable in relation to any property regardless of whether any proceedings have been brought for an offence in connection with the property. Section 266(1) provides that If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order. By section 304(1) property obtained through unlawful conduct is recoverable property. It follows that (subject to the exceptions in section 308), recoverable property is a very wide term. It thus appears to us that property in section 266(1) is the property defined in section 316(4), which is all property wherever situated in the world. It was submitted that, by reason of the principles of international sovereignty, property situated abroad must be excluded because of section 266(2), which provides that the recovery order must vest the recoverable property in the trustee for civil recovery. We have already expressed our view that those principles are not infringed merely by including foreign property in the order because the order would be subject to the local law or lex situs. The problem is said to arise from the use of the word vest in section 266(2). There are two reasons why in our view there is no such problem. The first is that the majority accept that the expression moveable property wherever situated in section 286(2) means wherever situated in the world. In cases falling outside the restriction imposed by section 286(3), the majority therefore accept that moveable property situated anywhere in the world may be made the subject of a recovery order. Indeed, it must be made the subject of a recovery order under section 266(1) if the other criteria are satisfied. It follows that the majority see no problem with the making of an order in Scottish proceedings which vests moveable property which is outside the jurisdiction in the trustee for civil recovery. This is no doubt because, as explained above, any such order must be subject to the provisions of the local law and may be subject to appropriate conditions under section 266(8). Moreover, under section 267(5) the trustees obligation to sell the property is expressly limited by what is practicable. If there are no problems with applying section 266(1) and (2) to moveable property in the case of orders made by the Scottish courts, it follows that there are no problems in applying them to moveable property in the case of orders made by the English courts. The only difference between the jurisdiction of the two courts, so far as moveable property is concerned, is that the Scottish courts cannot make an order if the restriction imposed by section 286(3) is satisfied, whereas the jurisdiction of the English courts is not limited in the same way. The second reason why the use of the word vest does not gives rise to a difficulty is that it is capable of operating in personam. Mr Eadie relies upon the similar use of the verb vests in section 306(1) of the Insolvency Act 1986, which provides that a bankrupts estate shall vest in the trustee immediately upon his appointment taking effect. He relies upon the decision of the Court of Appeal in Ashurst v Pollard [2001] Ch 595, which related to real property in Portugal which was owned by the bankrupt and his wife. Jonathan Parker LJ (with whom Kennedy and Potter LJJ agreed) said at para 11 that the vesting provisions of section 306 cannot effect a change in the Portuguese register of title, which continues to record Mr and Mrs Pollard as the joint owners of the property. Thus in those circumstances, as here, the mere making of a vesting order does not have the inevitable consequence of transferring the legal interest in (or legal title to) real property to the trustee in bankruptcy or (here) the trustee for civil recovery. We would accept Mr Eadies submission that the consequences of a vesting order in relation to property situate abroad depend upon the local law or lex situs. We recognise that there are differences between the Insolvency Act and the Act but in our opinion the Insolvency Act provides a valuable pointer to the correct conclusion under Part 5 of the Act, namely that, as Tomlinson LJ concisely put it in the Court of Appeal at para 168, vest is simply an ordinary English word which takes its meaning from its context and is not here used as a term of art which carries with it inevitable consequences as to the effective transfer of title. In these circumstances, given the fact that section 266 must be construed so that it does not offend against the principles of sovereignty in international law, we see no difficulty in applying it to orders relating to moveable property made by the English courts. What then of immoveable property? Again, we see no reason in either the language of the Act or the principles of international law to prohibit a recovery order in such a case. The effectiveness of such an order would simply be subject to the rules of the lex situs. The definition of property in sections 84(1) and 316(4) expressly applies to all forms of property including real property wherever situated. It thus applies on its face to real property outside the United Kingdom and, whatever the position in Scotland in the light of section 286(2), the Act gives the English courts jurisdiction to make a recovery order in respect of such real property. The provisions of Part 5 of the Act, at any rate in relation to proceedings in England and Wales, are in our view unequivocal. They plainly apply to all property, whether real or personal and wherever situated in the world. Moreover they reflect the purpose behind the Act, namely to deprive criminals of their ill gotten gains. We recognise that how effective the approach we favour will be depends upon the co operation of courts elsewhere. However, for the reasons we have given, we are firmly of the view that nothing we have said infringes or would infringe the sovereignty of other states or the principles of international law. We prefer the views of Mitting J at first instance and of Maurice Kay, Hooper and Tomlinson LJJ in the Court of Appeal to those of the majority. For these reasons we would dismiss the PFO appeal. As to the disclosure order (DO) appeal, we agree that the appeal should be allowed for the reasons given by Lord Phillips in para 94 above. There is nothing in section 357 or 358 to indicate that it was intended that a notice under a disclosure order could be given to a person outside the jurisdiction. The position under section 357 is not inconsistent with our analysis of Part 5. A core feature of our analysis of Part 5 is that recovery orders take effect in personam subject to the local law, or lex situs. In other words, they have no legal consequences outside the United Kingdom except those positively prescribed by local law. For this reason, recovery orders do not impinge upon the sovereignty of foreign states. By contrast, an information notice given to someone outside the United Kingdom has the potential to criminalise acts and omissions committed abroad by foreign citizens who are outside the jurisdiction of the United Kingdom courts. There is no scope for reading the relevant provisions of Part 8 as taking effect subject to the local law or lex situs. The statutory language is clear and unequivocal unless the recipient of an information notice has a reasonable excuse he is guilty of an offence if he fails to comply with an information notice. Further, Part 5 clearly contemplates service on persons anywhere in the world. Section 243(2) states that the claim form must be served on the respondent wherever domiciled, resident or present. If Parliament intended SOCA to have authority to give information notices anywhere in the world, one would expect to see an equivalent provision in Part 8. However Part 8 contains no such provision. Section 357(4) defines a disclosure order as an order authorising SOCA to give information notices to any person the appropriate officer considers has relevant information. There is nothing in this language to suggest that SOCAs power may be exercised extra territorially. In addition, paragraph 15 of Practice Direction Civil Recovery Proceedings states: Disclosure order 15.1 The application notice should normally name as respondents the persons on whom the appropriate officer intends to serve notices under the disclosure order sought. 15.2 A disclosure order must (1) give an indication of the nature of the investigation for the purposes of which the order is made; (2) set out the action which the order authorises the appropriate officer to take in accordance with section 357(4) of the Act; (3) contain a statement of (a) the offences relating to disclosure orders under section 359 of the Act; and (b) the right of any person affected by the order to apply to discharge or vary the order. 15.3 Where, pursuant to a disclosure order, the appropriate officer gives to any person a notice under section 357(4) of the Act, he must also at the same time serve on that person a copy of the disclosure order. Paragraph 15.3 suggests that the recipient of an information notice is not obliged to comply with the notice unless and until SOCA serves a copy of the disclosure order on him. Presumably, that service must take place in accordance with the CPR. However it is not at all clear by what mechanism under the CPR SOCA could serve a copy of a disclosure order on a person outside the United Kingdom. This reinforces the view that information notices can only be served on persons who are physically present within the United Kingdom. We agree that the appropriate relief is a declaration that the DO does not authorise sending information notices to persons who are outside the United Kingdom.

On 24 October 2007 Mr Perry, was convicted in Israel of a number of fraud offences in relation to a pension scheme that he had operated in Israel. He was given a substantial prison sentence and paid a fine of approximately 3m. The Serious Organised Crime Agency (SOCA) is now seeking to deprive Mr Perry, together with members of his family and entities associated with them, of assets obtained in connection with his criminal conduct, wherever in the world those assets may be situated. None of these persons resides in the United Kingdom. As a preliminary step, aimed at ensuring that its action to recover assets is effective, SOCA obtained a worldwide property freezing order (PFO) against Mr Perry, his wife and Leadenhall Property Limited (the PFO appellants). Before that, it had obtained a disclosure order (DO) under which notices requesting information were given to Mr Perry and his daughters (the DO appellants) by letter addressed to Mr Perrys house in London. The PFO appellants challenged the PFO on the basis that a civil recovery order could only be made in respect of property that was within the territorial jurisdiction of the court making it. The DO appellants contended that notices under the DO could not be addressed to persons who were not within the UK. In the PFO matter, the High Court ruled that the provisions of the Proceeds of Crime Act 2002 (POCA) relied on by SOCA did apply, save as to orders made in Scotland, to property outside the jurisdiction and upheld the scope of the PFO. An appeal from this decision was dismissed by the Court of Appeal on 18 May 2011. Earlier, the Court of Appeal had also upheld the validity of the notices requesting information given to the DO appellants under the DO. Appeals against the PFO and the DO notices were brought to the Supreme Court and were heard together. The Supreme Court allows both appeals: the PFO appeal by a majority (Lord Judge and Lord Clarke dissenting) and the DO appeal unanimously. Lord Phillips (with whom Lady Hale, Lord Brown, Lord Kerr and Lord Wilson agree) gives the main judgment. Lord Reed and Sir Anthony Hughes give shorter concurring judgments. Lord Judge and Lord Clarke give a joint dissenting judgment on the PFO appeal. SOCAs application was pursuant to the powers in Part 5 of POCA for the court to make a civil recovery order in respect of property which is, or represents, property obtained through criminal conduct. The applicable definition of the term property is in section 316(4) which provides that property is all property wherever situated. However, many of the provisions referring to property in POCA plainly apply only to property within the UK and the scope of the term depends on its context. Thus the definition should not have been given the weight it had carried in the courts below [14]. Although there was a presumption under principles of international law that a statute does not have extraterritorial effect, states have departed from this by agreement in the case of confiscating the proceeds of crime. POCA must be read in the light of the Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, which recognises that the courts of state A may seek to seize property in state B which is the proceeds of the criminal conduct of a defendant subject to the criminal jurisdiction of state A [18 29]. Parts 2, 3 and 4 of POCA provide for (a) the imposition of personal obligations in respect of property worldwide; (b) proprietary measures to secure and realise property within the UK and (c) requests to be made to other states to take such measures in respect of property within their territories. This represents a coherent international scheme which accords with the Strasbourg Convention and with principles of international law [31 38]. The purpose of Part 5 of POCA is to enable recovery in civil proceedings in each part of the UK of property which is or represents property obtained through unlawful conduct. The focus is on the property rather than a particular defendant. In their natural meaning, and in the absence of provisions corresponding to those for enforcement abroad in Parts 2, 3 and 4, the provisions of Part 5 apply only to property within the UK [53 56, 136]. The only anomaly with this analysis was the presence of section 286(2) POCA which purported to create a different position in Scotland from that in the rest of the UK. There was no satisfactory explanation for this and it remained an enigma [75 77] (Lord Reed thought it may have reflected a misunderstanding [152]), but it did not alter the overall conclusion that the High Court of England and Wales had no jurisdiction under Part 5 to make a recovery order in relation to property outside England and Wales. Thus the property covered by the PFO must be limited to such property, and the appellants could not be required under it to disclose all their worldwide assets [78 82]. The notices under the DO were given to persons who were, and were known by SOCA to be, outside the jurisdiction of the UK. Compliance with such orders was subject to penal sanction. It was generally contrary to international law for country A to purport to make criminal conduct in country B committed by persons who are not citizens of country A. It was therefore implicit that the power to impose positive obligations to provide information could only be exercised in respect of persons who were within the UK and the DO did not authorise the sending of notices to persons outside the UK [94, 98]. Lord Judge and Lord Clarke, dissenting on the PFO appeal, agreed that POCA was poorly drafted but held that the objective was clearly to deprive criminals of the proceeds of their crimes, whether here or abroad [160]. The expression all property wherever situated should have the same meaning in all sections in which it appeared [164]. Control mechanisms had been created in Part 5 to ensure that orders made could avoid any improper extra territorial effect or infringement of the principle of sovereignty. Recovery orders took personal effect and, in respect of foreign property, were subject to the local law [167].

This appeal is about equitable relief from forfeiture. Specifically, the question is whether the court has jurisdiction to grant such relief from the loss (to use a neutral word) of rights to make specified use of neighbouring land granted in a perpetual licence, where that loss of use is occasioned by the exercise of a right of termination for breach of an obligation to pay a sum due under the licence. In the present case the sum due was 50, whereas the annual value of the rights which would be lost upon termination is agreed to be in excess of 300,000. Relief from forfeiture is one of those equitable remedies which plays a valuable role in preventing the unconscionable abuse of strict legal rights for purposes other than those for which they were conferred. But it needs to be constrained with principled boundaries, so that the admirable certainty of English law in the fields of business and property is not undermined by an uncontrolled intervention of equity in any situation regarded by a judge as unconscionable. As will appear, the delineation of these principled boundaries has undergone significant development by the appellate courts during the last 45 years, but mainly in relation to relief from the forfeiture of rights in relation to chattels and other forms of personalty. This case has provided the courts with the opportunity to re examine those boundaries in relation to the forfeiture of rights in relation to land and in particular to consider the extent to which, if at all, those recent developments in relation to relief from forfeiture of rights over personalty have consequences for the boundaries of that jurisdiction in relation to rights over land. It has always been a condition for equitable relief from forfeiture that the forfeiture provision in question should have been conferred by way of security for the enforcement of some lesser primary obligation such as, but not limited to, the payment of money. It is common ground, at least in this court, that this requirement is satisfied on the facts of the case. The issues on this appeal relate to the second main condition going to jurisdiction to relieve from forfeiture which may loosely be described as turning upon the nature of the subject matter of the forfeiture, that is the rights which will be lost if the forfeiture is not relieved. The appellants say that, in relation to rights over land, nothing less than a proprietary interest will be sufficient to engage the jurisdiction to grant relief. The respondents say that the authorities establish that possessory rights, falling short of a proprietary interest in the land, are sufficient. But they invite this court to go one step further and declare that any right to use property (whether real or personal) sufficiently engages the jurisdiction to grant equitable relief from its forfeiture, if the first condition, described above, is satisfied. The trial judge, HHJ Behrens QC decided that the rights conferred by the licence in this case were, if not strictly possessory, sufficiently analogous to possessory rights to engage the jurisdiction, and he granted relief. The Court of Appeal decided that this went too far, but that the relevant rights were in any event possessory, so that they engaged the jurisdiction. Although the question whether, assuming jurisdiction, the court ought to have granted relief in its discretion was contested both before the judge and the Court of Appeal, it is only the threshold question of jurisdiction which remains live in this court. The Facts The appellant Manchester Ship Canal Co Ltd (MSCC) is the owner of the Manchester Ship Canal (the Canal) and adjacent riparian land, in particular on the south west side of it, in the vicinity of Ellesmere Port. To the south west of MSCCs riparian land there was a substantial block of land, formerly in mainly military use, including an airfield, which was acquired in July 1961 by the respondent Vauxhall Motors Ltd (formerly General Motors UK Ltd) (Vauxhall) for the purpose of being developed as a substantial vehicle manufacturing plant, now generally well known as Vauxhalls Ellesmere Port factory. Recognising that the construction of large buildings and hard surfaces on the newly acquired site would reduce its capacity for the absorption of surface water, Vauxhall sought to make arrangements with MSCC sufficient to enable it to discharge surface water and treated industrial effluent from the planned manufacturing complex into the Canal. For this purpose, Vauxhall acquired from MSCC a small rectangular part of MSCCs riparian land between the factory site and the Canal, for the construction of a water collection and effluent treatment plant, by a land exchange dated 12 October 1962. But this still left a small strip of riparian land owned by MSCC between the treatment plant and the Canal, across which Vauxhall needed to acquire a right to discharge surface water and treated effluent from the treatment plant into the Canal. Vauxhall acquired these rights by means of a licence (the Licence) made on the same date as the land exchange. Subject to the provision for early termination referred to below, the rights were granted in perpetuity, in exchange for payment of the rent or annual sum of 50 per annum and the performance of certain covenants and conditions undertaken by Vauxhall. The rights granted were set out in three parts, within clause 1 of the Licence. The first was a right to discharge surface water and suitably treated trade effluent from Vauxhalls treatment plant into the Canal, across a specified part of MSCCs land identified on plans annexed to the Licence. The second was a right to construct, maintain, alter and renew under and upon the same parts of MSCCs land pipes and other works (called the Spillway) sufficient to effect and control the discharge of surface water and treated effluent into the Canal, subject to plans and specifications to be approved by MSCCs Engineer. The third was a right of access to the Spillway along specified parts of MSCCs land for the purpose of exercising the infrastructure rights, along a specified route or other route as prescribed by the Engineer. Clause 2 of the Licence provided for payment of the annual rent of 50 as already described. Clause 3 contained covenants by Vauxhall relating, among other things, to the construction and maintenance of the Spillway, providing for it to be rerouted in the event (which did not occur) that MSCC wished to construct a wharf at the point of its discharge into the Canal. Clause 3(k) required Vauxhall to remove the Spillway and reinstate the locus in quo upon determination of the Licence. Clause 3(l) prohibited the assignment, transfer, underletting or other alienation of the benefit of the Licence by Vauxhall other than to a connected company. Clause 3(m) limited the use of the Spillway to the discharge of surface water and treated trade effluent from Vauxhalls factory site. Clause 3 also contained miscellaneous indemnities and an obligation on Vauxhall to pay for any dredging of the Canal necessitated by the construction and use of the Spillway. Clause 4 of the Licence reserved rights to MSCC to construct and use over, under, along or across the Spillway pipes, railway lines, cables, roads, tramways, bridges, subways and wharves, but not so as materially to interfere with the discharge through the Spillway of surface water and treated trade effluent without providing Vauxhall alternative means of effecting and controlling discharge. Clause 5 provided as follows: If the said yearly rent or sum or any part thereof shall at any time be in arrear for the space of 21 days after the same shall have accrued due (whether legally demanded or not) or if and whenever Vauxhalls shall make default in the performance and observance of any of the covenants conditions and provisions herein contained and on their part to be performed and observed the Canal Company may (but without prejudice to any right of action available to them by way of injunction or otherwise) by notice in writing require Vauxhalls to pay the rent in arrear within 28 days or (as the case may be) to pay reasonable compensation for the said default and remedy the same (if capable of being remedied) within a reasonable time and if Vauxhalls shall fail to comply with such notice the Canal Company may thereupon by notice in writing determine this Licence forthwith and in such event this Licence and every clause matter and thing herein contained shall forthwith absolutely cease and determine but without prejudice to any claim by either party against the other in respect of any antecedent breach of any covenant condition or provision herein contained. The Spillway was duly constructed by Vauxhall following the grant of the Licence. The infrastructure erected on MSCCs land consists of an underground pipe of about approximately 2,100mm diameter feeding into a partly underground hexagonal distribution centre, before splitting into two 1,675mm underground pipes leading to an outfall on the bank of the Canal. Following construction, the Spillway was brought into use for discharge of surface water and treated effluent, and has performed that function ever since. By a deed of variation dated 25 July 1997 the Licence was varied in the following material respects. First, clause 3(1), restricting assignment and alienation, was deleted and replaced by a provision for the avoidance of doubt whereby MSCC acknowledged that the rights granted to Vauxhall by the Licence were to be exercisable in perpetuity by all or any of Vauxhall, its successors in title, the owners, tenants and occupiers from time to time of any part of Vauxhalls factory site. Secondly, by clause 4, Vauxhall granted MSCC a right to connect into Vauxhalls treatment plant a pipe discharging surface water from neighbouring land of MSCC, for the duration of the Licence. In the meantime Vauxhall transferred part of its factory site to the Urban Regeneration Agency, upon terms that the land transferred would continue to have the benefit of the drainage system constituted by the Spillway and confirmed by the Licence. The Licence was terminated in the following circumstances. Vauxhall failed to pay its annual rent of 50 due on 12 October 2013. MSCC served notice pursuant to clause 5 of the Licence on 6 February 2014. Vauxhall continued in its failure to pay the 50 due and, on 10 March 2014, MSCC served notice to terminate the Licence under clause 5. After inconclusive negotiations for a new licence at market rates, Vauxhall claimed relief from forfeiture, initially by correspondence and then by these proceedings which were issued on 6 March 2015. As already noted the judge granted relief from forfeiture and the Court of Appeal affirmed his decision, albeit on slightly narrower grounds. The Law Equitable relief from forfeiture is a remedy of ancient origin. Prior to the conveyancing and property legislation consolidated in 1925, its main spheres of activity lay in relation to leases and mortgages of land, but those are now statutory. For present purposes, it is unnecessary to trace its antecedents back before 1972, when the rationale for and main principles regulating the remedy were restated in this well known passage in the speech of Lord Wilberforce in Shiloh Spinners Ltd v Harding [1973] AC 691, at 723 724: it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word appropriate involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach. That passage contains a trenchant restatement of the central rationale and condition for the exercise of the remedy, namely that the primary object of the bargain should be the securing of a stated result, for which the forfeiture provision is added by way of security. Lord Wilberforce did not however state any second condition for the exercise of the jurisdiction to grant relief, relating to the nature of the rights liable to be forfeited. Earlier, at p 722 he said: There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re entry clauses; but other instances are found in relation to copy holds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self limitation to be imposed or accepted on this power. The property liable to forfeiture in that case was a lease but, since the right of re entry was reserved by an assignee of the lease rather than by the lessor upon its grant, the statutory regime for relief from forfeiture did not apply. Nonetheless, since the proprietary interest in land constituted by a lease had always been fairly and squarely within the types of property liable to forfeiture within the reach of equitys remedy of relief, the issue as to the nature of the property to which the remedy might extend simply did not arise. That question did arise for decision in Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scaptrade) [1983] 2 AC 694. The rights in issue consisted of the charterers rights under a time charter of a ship, which entitled the owners to withdraw the vessel from the service of the charterers if specified monthly payments due in advance were not made on time. Having failed to make timely payment and received a telex from the owners withdrawing the vessel, the charterers claimed that withdrawal amounted to a forfeiture and sought equitable relief, including an injunction restraining the owners from withdrawing the vessel from service. Affirming the Court of Appeal, the House of Lords held that the court had no jurisdiction to grant relief in such a case. Giving the leading judgment, Lord Diplock identified two reasons for that conclusion, in relation to time charters. The first was that a time charter conferred upon the charterer no interest in or right to possession of the vessel. He said, at pp 700 701: A time charter, unless it is a charter by demise, with which your Lordships are not here concerned, transfers to the charterer no interest in or right to possession of the vessel; it is a contract for services to be rendered to the charterer by the shipowner through the use of the vessel by the shipowners own servants, the master and the crew, acting in accordance with such directions as to the cargoes to be loaded and the voyages to be undertaken as by the terms of the charterparty the charterer is entitled to give to them. Being a contract for services it is thus the very prototype of a contract of which before the fusion of law and equity a court would never grant specific performance: Clarke v Price (1819) 2 Wils 157; Lumley v Wagner (1852) 1 De G M & G 604. To grant an injunction restraining the shipowner from exercising his right of withdrawal of the vessel from the service of the charterer, though negative in form, is pregnant with an affirmative order to the shipowner to perform the contract; juristically it is indistinguishable from a decree for specific performance of a contract to render services; and in respect of that category of contracts, even in the event of breach, this is a remedy that English courts have always disclaimed any jurisdiction to grant. This is, in my view, sufficient reason in itself to compel rejection of the suggestion that the equitable principle of relief from forfeiture is juristically capable of extension so as to grant to the court a discretion to prevent a shipowner from exercising his strict contractual rights under a withdrawal clause in a time charter which is not a charter by demise. At p 702, referring to the dicta of Lord Wilberforce in the Shiloh Spinners case, he said: That this mainly historical statement was never meant to apply generally to contracts not involving any transfer of proprietary or possessory rights, but providing for a right to determine the contract in default of punctual payment of a sum of money payable under it, is clear enough from Lord Wilberforces speech in The Laconia [1977] AC 850. Speaking of a time charter he said, at p 870: It must be obvious that this is a very different type of creature from a lease of land. Lord Diplocks second reason was that, in any event, the provision that the owner could withdraw the vessel upon failure by the charterer to make payment in advance was not a mere security, since timely payment was needed to fund the wages and victualling of the master and crew together with the insurance and maintenance of the vessel sufficient to enable her to perform the contracted services. For present purposes, the key phrases which stand out from Lord Diplocks speech are, no interest in or right to possession of the vessel, on p 700 and proprietary or possessory rights on p 702. He used the concepts of proprietary and possessory rights as a sine qua non in relation to the rights liable to be forfeited, in the absence of which equity could not intervene. The sharp distinction in his mind between a time charter, which did not confer those rights, and a charter by demise, which did, may be illuminated by the following explanation from Evans LJ in Bridge Oil Ltd v Owners and/or demise charterers of the ship The Guiseppe di Vittorio [1998] 1 Lloyds Rep 136, at 156: What then is a demise charter? Its hallmarks, as it seems to me, are that the legal owner gives the charterer sufficient of the rights of possession and control which enable the transaction to be regarded as a letting a lease, or demise, in real property terms of the ship. Closely allied to this is the fact that the charterer becomes the employer of the master and crew. The condition for jurisdiction to grant equitable relief from forfeiture, that the rights subject to forfeiture should be proprietary or possessory in nature first enunciated, in a negative sense, in The Scaptrade, have been followed in a series of later cases, mainly about chattels and other forms of personal property, rather than rights in relation to land. Sport International Bussum BV v Inter Footwear Ltd [1984] 1 WLR 776 was a case about an exclusive right to purchase sports shoes and resell them in specified territories contained in an agreement settling litigation which included a provision for termination upon (inter alia) the buyers failure to provide a security guarantee on time. Giving the judgment of the Court of Appeal, after a review of the Shiloh Spinners case and The Scaptrade, Oliver LJ said, at p 787B that: historically, the availability of equitable relief from forfeiture has been confined to cases where the subject matter of the forfeiture is an interest in land. At p 788C he continued: The fact remains that the jurisdiction never was, and never has been up to now, extended to ordinary commercial contracts unconnected with interests in land and, though it may be that there is no logical reason why, by analogy with contracts creating interests in land, the jurisdiction should not be extended to contracts creating interests in other property, corporeal or incorporeal, there is, at the same time, no compelling reason of policy that we can see why it should be. And the fact is that the defendant in this case is seeking an extension by analogy, and an extension not based on any pressing consideration of legal policy but simply on an appeal to sympathy for what is considered to be a hardship arising from strict adherence to a bargain which is concluded with its eyes open. In the House of Lords, Lord Templeman noted at p 794 that Lord Diplock had, in The Scaptrade, confined the power to relieve from forfeiture to contracts concerning the transfer of proprietary or possessory rights. He continued: I do not believe that the present is a suitable case in which to define the boundaries of the equitable doctrine of relief against forfeiture. It is sufficient that the appellants cannot bring themselves within the recognised boundaries and cannot establish an arguable case for the intervention of equity. The recognised boundaries do not include mere contractual licences and I can see no reason for the intervention of equity. Your Lordships are concerned with an unusual contract bringing hostile litigation to an end and including a number of provisions which cannot be dissected so as to attribute different degrees of importance to different rights and obligations. Ms Katharine Holland QC for MSCC drew attention, correctly, to the fact that Oliver LJ referred only to proprietary, rather than possessory, rights as sufficient to attract equitable relief from forfeiture. This was part of his description of the history of the remedy. It was not endorsed by the House of Lords, although other parts of Oliver LJs analysis were. Nor has it stood the test of time, as appears below. BICC plc v Burndy Corpn [1985] Ch 232 was about the forfeiture of patent rights conferred under a commercial agreement. Dillon LJ (with whom Kerr and Ackner LJJ agreed) said this, at p 252: There is no clear authority, but for my part I find it difficult to see why the jurisdiction of equity to grant relief against forfeiture should only be available where what is liable to forfeiture is an interest in land and not an interest in personal property. Relief is only available where what is in question is forfeiture of proprietary or possessory rights, but I see no reason in principle for drawing a distinction as to the type of property in which the rights subsist. The fact that the right to forfeiture arises under a commercial agreement is highly relevant to the question whether relief against forfeiture should be granted, but I do not see that it can preclude the existence of the jurisdiction to grant relief, if forfeiture of proprietary or possessory rights, as opposed to merely contractual rights, is in question. Ms Holland QC drew the courts attention to Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514, a vendor and purchaser case in which the purchaser was ten minutes late in tendering the purchase price under a contract which made time for completion of the essence. Giving the judgment of the Privy Council on an appeal from Hong Kong, Lord Hoffmann rejected a claim for relief from forfeiture, concluding at p 523 as follows: In his dissenting judgment, Godfrey JA said that the case cries out for the intervention of equity. Their Lordships think that, on the contrary, it shows the need for a firm restatement of the principle that in cases of rescission of an ordinary contract of sale of land for failure to comply with an essential condition as to time, equity will not intervene. This decision is not of significant assistance for present purposes. It was a case in which a contract for the purchase of legal title to land was found to have been repudiated by the failure by the purchaser to comply with a time of the essence provision. Thus the property the subject matter of the contract never became subject to the vendors obligation to convey. While it may be said that the purchaser had a species of equitable interest pending completion, the facts were far removed from cases such as the present, where the rights subject to forfeiture are perpetual in nature and have already been conferred and enjoyed for many years prior to the event giving rise to termination. Most of the cases about relief from the forfeiture of possessory (rather than proprietary) rights concern personalty. Nonetheless, some slight indication that possessory rights in relation to land may also qualify for relief from forfeiture is to be found in the judgment of Nourse LJ in Bland v Ingrams Estates Ltd [2001] Ch 767. The plaintiff had a charging order (creating an equitable charge) over a lease of land. The landlord forfeited the lease and the lessees did not apply for relief. On application for relief from forfeiture under the courts inherent jurisdiction, the Court of Appeal held that, in an area so heavily regulated by statute, equity ought not to intervene. Nonetheless the plaintiff was able to stand in the shoes of the lessees so as to assert their statutory right to relief, as if he was a beneficiary under a trust. In reviewing the inherent equitable jurisdiction Nourse LJ said this, at p 780 (para 31): A jurisdiction does not become discretionary just because it is both inherent and equitable. The authorities show that the cases in which the inherent jurisdiction to grant relief against forfeiture for non payment of rent has been exercised have been restricted to those in which the person claiming relief is entitled to possession of the land or at any rate, which is not necessarily the same thing, has a legal estate or equitable interest in it. Now that so much of the jurisdiction has been overtaken by statute, any legitimate basis for its extension has disappeared. Admittedly and notoriously, there are gaps and anomalies in the statutory framework. But it is not for the courts to fill the gaps and cure the anomalies in purported reliance on a jurisdiction which has never existed. Nourse LJ appears to have regarded a right to possession of land as having qualified, historically, for equitable relief from forfeiture. Nonetheless it is slender authority for the resolution of the present issue. It deserves mention only because all of the other relevant cases are about rights in relation to chattels or other personalty, rather than land. On Demand Information plc v Michael Gerson (Finance) plc [2003] 1 AC 368 was about forfeiture of rights in relation to video and editing equipment granted under finance leases. The leases provided a three year period for use by the lessee at a substantial rent, provision for yearly extensions for modest payments and provision that, upon termination (if they had performed their obligations) the lessees could sell the equipment and retain 95% of the proceeds. For present purposes the relevant issue was whether the equitable jurisdiction was restricted to cases of forfeiture of proprietary rights. At p 379 (para 29) Lord Millett said this: The Court of Appeal (Pill and Robert Walker LJJ, Sir Murray Stuart Smith dissenting) [2001] 1 WLR 155 dismissed the lessees appeal. The court unanimously upheld the deputy judges ruling that the criteria for the exercise of the equitable jurisdiction were present at the date of the application. They rejected the lessors objection that the leases were purely contractual in nature, and that the jurisdiction to grant relief from forfeiture was restricted to cases where the forfeiture of proprietary rights strictly so called was in question. As Robert Walker LJ put it, contractual rights which entitle the hirer to indefinite possession of chattels so long as the hire payments are duly made, and which qualify and limit the owners general property in the chattels, cannot aptly be described as purely contractual rights. For my own part, I regard this conclusion as in accordance with principle; any other would restrict the exercise of a beneficent jurisdiction without any rational justification. This is the first occasion upon which a perception that possessory rights of an indefinite duration could qualify for equitable relief from forfeiture was enunciated. Although not apparent from The Scaptrade, the relevance of the indefinite duration of the possessory right was reinforced by Hamblen J in Celestial Aviation Trading 71 Ltd v Paramount Airways Private Ltd [2011] 1 All ER (Comm) 259, a case about rights of limited duration under operating leases of aircraft. By contrast with the typical finance lease considered in the On Demand case, the operating leases for eight years conferred no rights upon the lessee to extend or to acquire the aircraft on termination. The aircraft had a substantial expected operational life after termination so that the interest of the lessor was not merely financial or economic. Hamblen J held that there was no jurisdiction to grant relief from the forfeiture of an operating lease of this kind. At para 57 he said: In summary, whilst I accept that the ASLAs transfer possessory rights to Paramount, for the relief jurisdiction to apply to contracts transferring a bare possessory right for only a proportion of the economic life of the chattel would represent a major extension of existing authority. He also concluded that the forfeiture provision was not merely by way of security, and that there were strong policy reasons why relief should not be available for operating leases of this type. Finally, the extent of the equitable jurisdiction was thoroughly reviewed by the Privy Council in ukurova Finance International Ltd v Alpha Telecom Turkey Ltd (Nos 3 5) [2016] AC 923, a case about a contractual power to appropriate shares, charged by way of equitable mortgage to secure repayment of a loan. For present purposes the importance of the decision lies in the Boards treatment of the submission that equitable relief from forfeiture was limited, in the context of mortgages, to mortgages of real property rather than personalty. After citing the passage from the judgment of Dillon LJ in the BICC case (quoted above) the Board continued, at para 94: That reasoning, with which the Board agrees, supports the conclusion that relief from forfeiture is available in principle where what is in question is forfeiture of proprietary or possessory rights, as opposed to merely contractual rights, regardless of the type of property concerned. Analysis The issues as to the extent of the jurisdiction to grant equitable relief from forfeiture have, if anything, widened since the hearing in the Court of Appeal. At that stage it appears to have been common ground that the jurisdiction did extend to relief against the forfeiture of possessory rights in relation to land. MSCC did not submit that the jurisdiction was limited to proprietary rights (as it does before this court) and Vauxhall did not submit that the jurisdiction extended to any rights to use property, regardless whether they were strictly possessory, as it now does before this court. Rather the issue was whether the rights granted by the Licence were truly possessory in the relevant sense. There were also issues about whether the termination right in clause 5 was by way of security, and issues about discretion, but they have fallen by the wayside. It is convenient to begin by addressing MSCCs main submission that the jurisdiction to grant equitable relief from the forfeiture of rights relating to the land is limited to rights which, on settled principles, amount to a proprietary interest, so that merely possessory rights, and therefore all rights conferred by licences, are insufficient. Ms Holland advanced a series of interconnected arguments about why this should be so. Her main point was that there had always existed a fundamental, well settled and clearly understood distinction between proprietary interests in land and other rights relating to land, encapsulated in the distinction between a lease, which did confer a proprietary interest and a licence, which did not. Thus the boundary between a lease and a licence has traditionally been assumed also to be a boundary for the jurisdiction from relief from forfeiture, as is apparent from para 4.1.69 of Gray and Grays Elements of Land Law, 5th ed (2008): Only a tenant and not licensee may ask for relief against forfeiture. Any other boundary for the intervention of equity into contractual arrangements conferring rights over land, and in particular which admitted possessory rights in addition to proprietary interests, would be causative of damaging uncertainty in an area of the law in which certainty commands a premium. Secondly, she submitted that although the concept of a possessory right appeared to have become entrenched in defining the boundary of equitable relief from the forfeiture of rights in relation to chattels and other personalty, this should not be transplanted so as to move the boundary line in connection with rights over land. This was first because the concept of possession as used in the authorities about chattels was different from the concept of possession in relation to land, and more akin to a form of ownership. Thirdly, because possession in the context of land had no single clear or settled meaning, its use for the identification of the boundary of equitys intervention would be a recipe for confusion and uncertainty. These are formidable submissions. It is undoubtedly true that certainty is, or should be, an important element of land law. As Fox LJ said in Ashburn Anstalt v Arnold [1989] Ch 1, at p 26: In matters relating to the title to land, certainty is of prime importance. But certainty is equally important in the law of commerce, and one of the reasons why English commercial law is chosen around the world by commercial counterparties to govern their contracts, even when neither they nor the subject matter have any connection with England. The authorities summarised above, beginning with The Scaptrade, demonstrate that English commercial law has accommodated the concept of possessory rights in relation to personalty as sufficiently defining the boundary of equitys intervention by way of relief from forfeiture, over a wide range of different types of subject matter, including ships and (potentially) aircraft, trademarks and patents, video equipment and shares. If the concept of possessory rights as part of the relevant boundary causes no damaging uncertainty in those widely varied commercial contexts, there is no immediately obvious reason why it should do so in relation to rights over land. The Court of Appeal had no difficulty in identifying a sufficiently certain concept behind the phrase possessory rights in relation to land. Basing himself on JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, Lewison LJ said, at para 59: There are two elements to the concept of possession: (1) a sufficient degree of physical custody and control (factual possession); (2) an intention to exercise such custody and control on ones own behalf and for ones own benefit (intention to possess). What amounts to a sufficient degree of physical custody and control will depend on the nature of the relevant subject matter and the manner in which that subject matter is commonly enjoyed. The existence of the intention to possess is to be objectively ascertained and will usually be deduced from the acts carried out by the putative possessor While that concept is drawn from a case about adverse possession, it is a practical and workable concept which, although necessarily fact based, involves no inherent uncertainty. I do not accept Ms Hollands submission that the use of the concept of possessory rights in relation to chattels and other personalty in the decided cases equates to something more akin to ownership, and therefore a proprietary interest, in relation to land. As is apparent from the citation from The Scaptrade and Guiseppe di Vittorio cases, the essence of a demise charter which sets it apart from a pure time charter is that it gives the charterer not ownership of the vessel, but possession and control of it. I consider that the frequent use in the decided cases of the words proprietary or possessory as alternatives in relation to rights over personalty clearly points to a recognition that a purely possessory right is something falling short of ownership, or of a proprietary interest. There are to be weighed against MSCCs submission powerful reasons why, now that it is settled that equitable relief may apply to forfeiture of possessory rights in relation to a wide range of chattels and other personalty, it should also do so in relation to possessory rights over land. First, the original proving ground for equitable relief from forfeiture consisted of rights in relation to land, originally, but not only, leases and mortgages. It would be strange indeed if equitys reach was wider in relation to rights over chattels and other forms of personalty than over rights in relation to land. Secondly, as was noted by Robert Walker LJ and Lord Millett in the On Demand case, and by Dillon LJ in BICC plc v Burndy Corpn, there is simply no logic or reason in principle for drawing a distinction as to the type of property in which the rights subsist, when considering the extent of equitys jurisdiction to relieve from forfeiture. If therefore it is the nature of the right rather than the identity of the property over which it may be exercised that matters, then there must be every good reason to apply a jurisdiction applicable to possessory rights as much to rights over land as to rights over other forms of property. I would acknowledge that a recognition that equity may relieve against the forfeiture of possessory rights over real property, falling short of a proprietary interest, means that the simple assumption of the editors of Gray and Gray that relief may never be granted from the forfeiture of a licence calls for re examination. There will be many licences which only grant rights falling short of possession, for which that simple proposition will still hold good. As will appear, the Licence granted in the present case was a very unusual one, both because it granted an element of virtually exclusive possession, coupled with a high degree of control over the locus in quo, and because it was granted in perpetuity. It by no means follows from a conclusion that the rights conferred by this Licence are within equitys jurisdiction to relieve from forfeiture, that licences in relation to land will fall generally within that same boundary. Finally in relation to this issue, while it is essential for the certainty of the law that the scope for equitable intervention on grounds of unconscionability should be delimited by reference to reasonably clear boundaries, they should be identified by reference to a principled understanding of the nature and purpose of the relevant equity, rather than be merely arbitrary. The careful examination and development of the reasons why that boundary should accommodate relief from the forfeiture of possessory rights in the authorities cited above seems to me to be clearly in accordance with that principled approach. By contrast, the slavish adoption of a rule that nothing other than a proprietary interest will do, in relation to land, does nothing of the kind. This may be illustrated in this case by the fact that the Licence granted rights over MSCCs land very similar to, and indeed more extensive than, rights in the nature of an easement. It is common ground that an easement creates an interest in land, so that its forfeiture may be relieved against. There is no principled reason why the perpetual rights granted by the Licence should not do. It is necessary next to address Vauxhalls submission that a better boundary than one which merely accommodated possessory rights would be one which extended the equitable jurisdiction in relation to all forms of right to use property, provided only that the right of termination is intended to secure the payment of money for the performance of other obligations. I would reject this submission as well. It was heavily based upon an over literal reading of Lord Wilberforces speech in Shiloh Spinners Ltd v Harding which, as noted above, did not include as a condition of the existence of the jurisdiction any requirement as to the nature or quality of the rights liable to forfeiture. But he had no reason to do so, since the rights liable to forfeiture in that case amounted to a proprietary interest in land, and the question whether the jurisdiction might extend to any right to the use of property never arose for argument, let alone decision. To expand the ambit of the equitable jurisdiction in that way, leaving all control upon its use as a matter of discretion, would offend against the well recognised need to ensure that equity does not undermine the certainty of the law. Furthermore it would set at nought the careful development of the principled limitation of the jurisdiction to the forfeiture of proprietary or possessory rights, worked out over many years in a succession of broadly coherent authorities. I would however wish to sound one note of caution against the slavish application of the whole of that jurisprudence to land. The requirement, developed in the On Demand and Celestial cases that the possessory right should be one which is indefinite, rather than time limited to a period shorter than the full economic life of the chattel or other species of personal property, may have unintended consequences in relation to land. Chattels by their nature are of limited economic life, and most intellectual property rights, and patents in particular, have their own inherent time limitations. By contrast, land is a form of perpetual property, and I can well conceive of forms of possessory rights in relation to land which are not perpetual, but which might nonetheless qualify for equitable relief from forfeiture. The point need not be decided in this case since, most unusually, this Licence was indeed granted in perpetuity. It is to be noted that the acknowledgment in The Scaptrade that equity might relieve from the forfeiture of a demise charter (which is typically for much less than the economic life of the ship) suggests that even in relation to chattels a rule that the possessory right should be indefinite may go too far. It remains to consider whether the Court of Appeal was right to conclude that the rights granted by the Licence fell within that possessory class to which the jurisdiction to grant relief from forfeiture extends. It is common ground that they conferred no proprietary interest in favour of Vauxhall over MSCCs adjacent land. Ms Holland submitted that the rights also fell short of granting the requisite degree of possession and control over MSCCs land, lying between Vauxhalls treatment works and the Canal itself, to be regarded as possessory in the relevant sense. She emphasised, with force, that this question depended upon the nature of the rights granted, rather than merely upon the extent to which, following the grant of the Licence, Vauxhall rather than MSCC occupied or controlled the Spillway for the purpose of its construction, maintenance and operation. Her main point was that the essence of the right granted by the Licence was that of discharge of surface water and treated effluent, and that the rights to construct, maintain and operate the Spillway were strictly ancillary. The mere right of discharge did not involve possession, let alone exclusive possession, and in any event the terms of the Licence reserved to MSCC a substantial degree of control, over both the construction and maintenance of the Spillway, including a right to have the infrastructure enlarged or rerouted in stated circumstances. Finally, even if the court were to find that Vauxhall had possessory rights in relation to the infrastructure constituting the Spillway, Ms Holland submitted that there was no forfeiture of that right, because Vauxhall was both entitled and indeed obliged to remove and recover the infrastructure on termination of the Licence. These submissions were advanced with equal force before the Court of Appeal, where they constituted the central part of MSCCs case. Giving the leading judgment, Lewison LJ dealt with them with conspicuous care and detail before concluding that the Licence did indeed confer the requisite possessory rights. I have already concluded that the Court of Appeal applied the correct legal test to this question. Beyond that the issue turned on the application of that test to detailed facts, from which this court would be slow to depart from the Court of Appeal unless it was clearly wrong. It is sufficient for the disposal of this last issue for me to say that nothing in Ms Hollands submissions on this point came near to persuading me that Lewison LJs analysis was wrong. On the contrary, if it were necessary to conduct that analysis afresh, I would find it difficult to improve upon his, in particular at paras 66 69 of the judgment. Nonetheless out of respect for Ms Hollands careful submissions, I will provide the following summary of my own reasoning. The starting point is that, as is common ground, the infrastructure works carried out entirely by Vauxhall for the purpose of creating the Spillway became, upon their completion, part of MSCCs land, because they were fixtures. The question therefore is whether Vauxhall had the requisite degree of possession and control of the Spillway itself. In my view it clearly did. The infrastructure consisted largely of underground pipes and chambers which were, in practice, only or at least mainly accessible from Vauxhalls treatment plant. The practical reality was that the Spillway formed an integral part of the infrastructure for the transmission of surface water and treated effluent from Vauxhalls factory site, the remainder of which, including further retaining structures, pipes and a substantial ravine all lay on Vauxhalls land. Although MSCC had certain default rights to intervene if Vauxhall failed adequately to maintain and operate the Spillway, and a right to re route it if it caused difficulties at its point of discharge into the Canal, none of these significantly impacted upon the reality that Vauxhall would be the dominant player in the maintenance and operation of the Spillway once constructed. Of course, the whole of the construction itself was Vauxhalls undertaking. Using the chartering analogy derived from The Scaptrade, far from MSCC providing a service to Vauxhall for the discharge of its surface water and treated effluent, Vauxhall built, operated and maintained that infrastructure, and had exclusive perpetual use of it, subject only to MSCCs right of termination for breach of covenant in clause 5. It is in that context nothing to the point that, by later transactions, Vauxhall permitted MSCC to discharge water from its own land into Vauxhalls treatment works for onward transmission along the Spillway into the Canal. That additional flow became Vauxhalls discharge once it left the treatment works, and in no way detracted from Vauxhall having exclusive use of the Spillway. Finally, there is nothing in Ms Hollands point that, upon termination, Vauxhall was obliged to remove and recover the infrastructure which constituted the Spillway, so that there was no forfeiture. All Vauxhall would recover by the performance of that expensive obligation would be a collection of useless debris. The notion that nothing was thereby forfeited has no foundation in reality. Conclusion For those reasons, I would dismiss this appeal. LADY ARDEN: Issues covered by this judgment I agree with Lord Briggs that relief from forfeiture can be given where the rights in land are possessory only, which was a new point taken in this Court, and that the conclusion of the Court of Appeal that the rights were possessory is unassailable. This judgment considers whether to hold that there is jurisdiction to grant relief from forfeiture in the case of a licence of land where the rights are possessory only introduces an unacceptable element of uncertainty into the law. As to the question of certainty in the law, the present case is relatively unusual because it involves relief from forfeiture in relation to a licence over land, and not a lease where the lessee will have a proprietary interest in the land. However, this licence was not a lease by reason only that it operates in perpetuity and not for a certain time as required at common law. Where in any case relief from forfeiture is given, the party seeking forfeiture will not be able to use the property in the way in which he expected to do in the event of breach, and this may reduce the value and marketability of his asset. The operation of the agreement according to its express terms will be rendered uncertain if the licensee can apply for relief. Thus, it might be said that by allowing relief from forfeiture in respect of rights acquired under a mere licence, which moreover applies a test of possession for that purpose which depends on the successful party establishing a particular state of fact (involving no doubt the consideration of the totality of the relevant facts), the court has produced a situation in which an unacceptable element of certainty has been introduced. In my judgment, this is an important issue with which the court must grapple. It can only be resolved by looking at the loss of certainty resulting from this decision in the wider context of the operation of the doctrine. Standpoint for analysing the relief from forfeiture and the role of equity The doctrine of relief from forfeiture is an equitable doctrine. I would approach it from the standpoint of equity rather than through the prism of property law. Equity is a body of principles which alleviates the strict application of rules of law in appropriate cases. In this case, the relevant rule of law is that the court will enforce the terms of the parties agreement because there is no reason in law why it should not be enforced. Equity serves to finesse rules of law in deserving cases. It thus makes the system of law in England and Wales one which is more likely to produce a fair result than would be possible if equity did not exist. This must surely be one of the reasons why the law of England and Wales is held in high regard in the world. Some uncertainty is inevitable Some element of uncertainty in the application of the doctrine of relief from forfeiture is inevitable. Equity in general operates by principles rather than by rules. That means that relief from forfeiture is not an automatic consequence if particular conditions are fulfilled but instead is given in appropriate cases. It is not a foregone conclusion that once the conditions for relief are shown relief will necessarily be granted and that inevitably means an element of uncertainty about its availability. Another element of inherent uncertainty arises from the fact that the doctrine of relief from forfeiture is a general doctrine and will apply to new circumstances, such as where the court has to deal with a particular form of property, or (as here) interest in or in relation to property, for the first time. The most obvious new circumstances are the creation of new forms of property or interest in property, such as shares in a registered company or aircraft. Thinking ahead, it may be applied in the future to forms of property which only exist in the cybersphere, or to rights which are treated as to all intents and purposes as rights to property (see eg M Solinas Bitcoiners in Wonderland: Lessons from the Cheshire Cat (2019) LMCLQ 433). I note that the view that the law of forfeiture may yet expand in this general area is supported by Professor Ben McFarlane in Snells Equity, 33rd ed (2015), para 13 023, cited by Lewison LJ in his judgment in this case ([2018] EWCA Civ 1100; [2019] Ch 331, paras 50 51). It inevitably follows that there will be respects in which the equitable doctrine of relief from forfeiture will be unfenced. So, while I agree with Lord Briggs that there is a need for there to be certainty in this area of the law, especially in the commercial field, I would go further and conclude that certainty for the purposes of a general doctrine of equity differs from that which results from a hard edged rule of law. As Sir Richard Arden MR explained in Eaton v Lyon (1798) 3 Ves 689, 693, 30 ER 1223: At Law a covenant must be strictly and literally performed: in Equity it must be really and substantially performed according to the true intent and meaning of the parties, so far as circumstances will admit. Types of rights or types of cases? Lord Briggs points out that a mere contractual licence alone would not be enough to give rise to relief from forfeiture. There would typically be an exclusive licence (above, para 46). I agree that it is likely to be necessary to establish possessory rights, but I would go further and hold that the law recognises that there are cases in which equitable relief will not be given even if there is an interest in property of a proprietary or possessory kind. But before I reach that stage, I must retrace my steps and travel over a little of the history of relief from forfeiture. As Lord Briggs explains, equitable relief from forfeiture is a remedy of ancient origin. It is inevitably difficult, given the long history of equity, to say that the doctrine was ever finally constituted in a particular form. Rather it kept evolving as the social and economic life of the nation changed: the law of equity developed and keeps on developing. Questions such as this case raises as to whether particular forms of property interest are or are not within the reach of the doctrine would have no meaning in a society which did not discover the utility of them until later in its history. As time went on, the doctrine applied to both real and personal property and to intangible as well as tangible property, as need arose. I would prefer to express no view on the wider definition of an interest in property involved in the respondents alternative argument since it does not need to be decided on this appeal and has not been fully argued. There is a degree of uncertainty in the concept of possessory rights in relation to land, and it may be that an extension to rights to use property may not involve any significant further degree of uncertainty. The fundamental principle giving rise to relief from forfeiture What then is the principle on which equity acts when it grants relief from forfeiture? The fundamental principle was, as Lord Briggs has said, that equity intervenes to restrain forfeiture where (1) the right had been conferred to secure the performance of some other covenant and (2) although the covenantor had breached his covenant, he was now in a position to perform it and to pay any compensation that might be appropriate: see Peachy v Duke of Somerset (1721) Prec Ch 568; 24 ER 255. These are the preconditions to relief from forfeiture in the sense that they must be present, but they are not necessarily sufficient of themselves to justify the intervention of equity, even putting on one side the exercise of the judges discretion. In the striking phrase of Dr P G Turner in his valuable case note on the decision of the Court of Appeal in this case (entitled What delimits equitable relief from forfeiture?): Equity will only relieve where the security purpose stands ahead of any other. ((2019) 78(2) CLJ 276, 279) Moreover, this was a statement of general principle, not limited to any particular sort of property. Forfeiture and penalties Forfeiture and penalties are often coupled together, and forfeiture and penalties often operated within the same legal and factual space. In Sloman v Walter (1784) 1 Bro Ch C 418, the parties were partners in a coffee house. The plaintiff conducted the business of the coffee house but he agreed with the defendant that the defendant should have the use of a particular room in the coffee house when he required it. This promise was secured by a bond for 500. On one occasion he asked to use it and was refused. The defendant then sued to enforce the bond. Lord Thurlow LC held: the only question was, whether this was to be considered as a penalty, or as assessed damages. The rule, that where a penalty is inserted merely to secure the enjoyment of a collateral object, the enjoyment of the object is considered as the principal intent of the deed, and the penalty only as accessional, and, therefore, only to secure the damage really incurred, is too strongly established in equity to be shaken. This case is to be considered in that light There is no reason to think that the kindred doctrine of forfeiture was restricted to covenants to secure the payment of money any more than penalties. Fluctuations in the doctrine of relief from forfeiture Sometimes the law has developed, and then retraced its steps. Thus, in several cases, the courts decided in favour of granting relief to a tenant who had committed a breach of covenant which did not involve the payment of money, such as cutting timber when he should not have done so. The courts were prepared to grant relief against these breaches just as they did against the payment of rent. But then Lord Eldon LC in Hill v Barclay (1811) 18 Ves Jun 56, 64; 34 ER 238 firmly held that the breach had to be of a covenant to pay money. He held that: The distinction has been taken, that relief may be had against the breach of a covenant to pay money at a given day; but, not, where any thing else is to be done. In all these cases the law having ascertained the contract, and the rights of the contracting parties, a Court of Equity ought not to interfere. This meant that Parliament had in due course to provide by statute for relief against forfeiture for lessees of land, including those who were in breach of a covenant other than a covenant to pay rent, where the lessor was seeking to exercise a right of re entry or forfeiture: see now section 146 of the Law of Property Act 1925. The legislature intervened in relation to leases but its intervention did not mean that relief from forfeiture was not capable of being invoked in cases not covered by legislation, as Lord Wilberforce (with whom the other members of the House agreed) explained in Shiloh Spinners Ltd v Harding [1973] AC 691 at 725. There was an inconclusive discussion at the hearing of this appeal as to whether parties could contract out of forfeiture relief under the general law. In this connection, I note that section 146(12) expressly rules this out in relation to relief under that section. Issue is whether the circumstances satisfy the doctrine not the type of interest Where the conditions described by Lord Briggs (above, para 17) were fulfilled, and assuming that the complainant had some relevant form of entitlement to property which would be affected by the forfeiture, the doctrine of forfeiture applied unless there was some good reason why it should not do so, such as where relief from forfeiture was inconsistent with some statutory right, or the case fell within a class of case where relief was not given. Equity did not, therefore, ask whether the forfeiture would be of a particular type of interest in property. Nor, as far as I can see from the case law, did equity, in the case of tangible movable property, draw arbitrary distinctions between movable and immovable property such as whether the period for which the applicant had any right in the property was for the whole or substantially the whole of its economic life: there can be no doubt that in theory a lease of land in respect of which forfeiture might be given may be for a short period, say a month. No relief from forfeiture for termination under ordinary and lawful commercial bargain So, as it seems to me, the primary question that has to be resolved in relation to the doctrine of relief from forfeiture outside leases of land and mortgages is not what relationships to property it covers but whether the circumstances in which it is sought to be invoked are those in which equity would grant relief. There is no exhaustive list of those cases, but one of them is where the bargain giving rise to the forfeiture is an ordinary and lawful commercial bargain inconsistent with equity granting such relief from forfeiture (unless of course the right involved a penalty). Lord Briggs has already given an example of this namely The Scaptrade. On my approach this does not critically turn on the difference between charters by demise and time charters. The commercial bargain in that case required the time charterer to make his payments timeously and it was well understood between commercial people that the ship would be withdrawn if that did not happen because the shipowner needed the payments to be made timeously in order to provide a fully equipped ship. An earlier case in this field is Sparks v The Company of Proprietors of Liverpool Water works (1807) 13 Ves Jun 428; 33 ER 354, which concerns intangible property, namely the rights conferred by a share. In this case, the plaintiff was a shareholder in a statutory company formed to supply water to Liverpool. The company had issued shares, which were partly paid. Under its articles, calls could be made by notice which was to be a maximum of 21 days. The plaintiff was absent from his address and did not receive notice of the call in question. As he had failed to pay the call, the company could and did exercise an express power in its constitution to forfeit his shares, which was undoubtedly given to secure members obligation to pay calls. The plaintiff brought proceedings claiming that his failure to pay the call had been accidental due to his absence from his home. Sir William Grant MR refused to give relief from forfeiture. He held that if relief from forfeiture was given in such a situation, the company could not carry on its business. He held, at p 434: It is essential, that the money should be paid, and that they should know, what is their situation. Interest is not an adequate compensation, even among individuals; much less in these undertakings. If the company could not forfeit the shares, it would not know whether it could cause the shares to be transferred to anyone else and make calls on them, and it would not have the capital the call was supposed to raise. Sparks v Liverpool Waterworks may also be compared with Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514, which Lord Briggs summarises at para 29 of his judgment. Lord Hoffmann summed up the point in that case in the final sentence of the advice of the Privy Council by saying that the case showed: the need for a firm restatement of the principle that in cases of rescission of an ordinary contract of sale of land for failure to comply with an essential condition as to time, equity will not intervene. I would put Celestial Aviation Trading 71 Ltd v Paramount Airways Private Ltd [2011] 1 All ER (Comm) 259 (discussed by Lord Briggs at paras 33 and 51 above) into this category. Hamblen J there held that the grant of relief from forfeiture of a lease of a chattel which would have significant economic life after the expiry of the lease was outside existing authorities dealing with chattels. He did not consider whether to extend authority because he went on to hold that there was no jurisdiction to grant relief anyway because the termination provision sought to be relieved was not for the purposes of security for non payment of rent and because time for payment was of the essence of the agreement and the owner of the aircraft, which in that case had a residual economic life, had a considerable interest in the timeous performance of obligations and because the grant of relief would cause considerable uncertainty generally (see judgment of Hamblen J at paras 72 to 80). Hamblen J distinguished the earlier case of On Demand Information plc v Michael Gerson (Finance) plc [2003] 1 AC 368 (discussed by Lord Briggs at para 32 above) on the basis that the lessee would retain the goods indefinitely. The point in the On Demand case was that the lessees had sold without giving the requisite notice and in those circumstances they were required to pay to the hirer some 95% of the proceeds of sale which they had obtained for the hired goods on a sale for which they had been unable to complete the approval processes required under the contract. That was clearly a situation in which equity had to intervene. Approach is consistent with Shiloh Spinners The approach explained above is consistent with the law as authoritatively laid down in the Shiloh Spinners case [1973] AC 691 by Lord Wilberforce, with whom the other members of the House agreed. The particular facts are not important. In a magisterial analysis, Lord Wilberforce saw the doctrine as a principle of general application. He held, at p 722: There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re entry clauses; but other instances are found in relation to copy holds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self limitation to be imposed or accepted on this power. Lord Wilberforces speech went on to describe the debates that had taken place in the early 19th century on different issues. These differences of view as to when equity should or should not grant relief show that the doctrine of relief from forfeiture was not based on some generalised concept of unconscionability but on a detailed and, as Lord Briggs describes it, principled distinction between the different situations which might bring it into contention: Yet even this head of relief has not been uncontested: Lord Eldon LC in his well known judgment in Hill v Barclay (1811) 18 Ves Jun 56 expressed his suspicion of it as a valid principle, pointing out, in an argument which surely has much force, that there may be cases where to oblige acceptance of a stipulated sum of money even with interest, at a date when receipt had lost its usefulness, might represent an unjust variation of what had been contracted for: see also Reynolds v Pitt (1812) 19 Ves Jun 140. Secondly, there were the heads of fraud, accident, mistake or surprise, always a ground for equitys intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults. Outside of these there remained a debatable area in which were included obligations in leases such as to repair and analogous obligations concerning the condition of property, and covenants to insure or not to assign. As to covenants to repair and cases of waste, cases can be quoted before the 19th century in which relief was granted: see Webber v Smith (1689) 2 Vern 103 and Nash v Earl of Derby (1705) 2 Vern 537. There were hostile pronouncements. In Wadman v Calcroft (1804) 10 Ves Jun 67 both Sir William Grant MR and Lord Eldon LC are found stating it to be clear that relief cannot be given against the breach of other covenants ie than covenants to pay rent. It was soon after that the critical divide or supposed divide occurred, between the liberal view of Lord Erskine LC in Sanders v Pope (1806) 12 Ves Jun 282 and the strict view of Lord Eldon LC in Hill v Barclay. The latter case came to be followed as the true canon; the former was poorly regarded in Lincolns Inn, but it is important to observe where the difference lay. This was not, as I understand it, in any disagreement as to the field in which relief might be granted, for both cases seem to have accepted that, in principle, relief from forfeiture might be granted when the covenant was to lay out a sum of money on property: but rather on whether equity would relieve against a wilful breach. Lord Wilberforce continued, at pp 723 724: [N]o decision in the present case involves the establishment or recognition directly or by implication of any general power that is to say, apart from the special heads of fraud, accident, mistake or surprise in courts exercising equitable jurisdiction to relieve against mens bargains. Lord Eldon LCs firm denial of any such power in Hill v Barclay does not call for any revision or review in this case. Equally there is no need to qualify Kay LJs proposition in Barrow v Isaacs & Son [[1891] 1 QB 417]. I would fully endorse this: it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word appropriate involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach. (Emphasis added) So, significantly, equity did not mend or relieve against peoples bargains, and there were categories of cases in which equity did not grant relief, not just individual cases where the discretion was exercised against the grant of relief. As I have explained, those appropriate and limited cases do not include cases such as The Scaptrade [1983] 2 AC 694, Union Eagle and Sparks where (outside leases of land and mortgages) it was inconsistent with the terms of the parties bargain that there should be any relief from strict performance of the contract if the other party chose to enforce his rights (always provided that those terms were not unlawful, or for example unenforceable as penalties). This is a basic principle of equity for several reasons, and a key element of equitys role in economically significant cases. No unacceptable loss of certainty I have raised the question whether there is an unacceptable loss of certainty involved in applying the doctrine of relief from forfeiture where rights were the subject of a licence. I answer that concern as follows. This case does not alter the underlying approach of equity to claims for relief from forfeiture. Even where the preconditions for forfeiture have been met, relief will not be given if the case falls within one of the categories of case in which equity does not intervene. The inappropriateness of relief from forfeiture is most likely in inconsistent with ordinary and lawful commercial bargain cases, in which the approach of the courts is clear. It is, furthermore, not every type of licence which will be productive of rights in respect of property, as in this case. Further, in this case, the licence was prevented from being a lease only because it was perpetual and if it had been a lease there is no doubt that there would have been jurisdiction to grant relief from forfeiture. Moreover, the extension of the law in this case is a logical development conducive of a coherent legal principle on the basis that the gap between relief in relation to realty and relief in relation to personalty should, as Lord Briggs has explained, be closed so far as possible. In summary, the application of the doctrine to a right arising under a licence is a small step, and it is, as I see it, unlikely to be the case that this development of the law will turn out to involve any significant loss of certainty in what the principle of relief from forfeiture stands for. The circumstances of the present case Passing to the present case, the right given by clause 5 of the licence, which appears to be an adaptation of the right of re entry in a lease, was intended to be a security for the payment of an annual sum of 50. Like Lord Briggs, I consider that the judgment of Lewison LJ contained a most careful analysis of the question whether the licence conferred a possessory right and that there is no basis on which this court should interfere with that conclusion. There is no appeal in this case against the exercise by HHJ Behrens of his discretion to grant relief from forfeiture. Accordingly, on this appeal we have not been concerned with the additional range of factors which the court considers when exercising its discretion to grant relief from forfeiture. This is a large subject and it should not be thought that, since these judgments do not deal with it, it is not also an area of law in which there is a body of authority. I would therefore also dismiss this appeal.

Vauxhall Motors Ltd has a large manufacturing plant at Ellesmere Port in Cheshire on the banks of the Manchester Ship Canal. When the plant was built in the early 1960s, Vauxhall entered into a contract (the Licence) with the Manchester Ship Canal Company (MSCC) allowing Vauxhall to construct a system of pipes and chambers across MSCCs land (the Spillway) and to drain surface water and treated industrial effluent into the Canal. Vauxhall agreed to pay 50 per year to MSCC in exchange for these rights. Clause 5 of the Licence allowed MSCC to terminate the Licence if (among other things) Vauxhall did not pay its annual rent within 28 days of a demand. Vauxhall duly built the Spillway and has used it for drainage from its Ellesmere Port factory ever since. Its right to use the Spillway is worth several hundreds of thousands of pounds per year. In early 2014, by administrative oversight, Vauxhall failed to pay its rent within 28 days of a demand. On 10 March 2014, MSCC served notice terminating the Licence under clause 5. This meant that Vauxhall faced having to negotiate a new licence at a cost of hundreds of thousands per year for its failure to pay 50. Vauxhall asked the High Court to grant equitable relief from forfeiture. This doctrine allows the court to relieve parties from terms which forfeit their rights in order to secure some lesser primary obligation if they operate harshly. In this case, MSCCs right to terminate under clause 5 was a forfeiture clause which secured Vauxhalls obligation to make an annual payment of 50. HHJ Behrens QC granted relief from forfeiture, effectively reinstating the Licence on condition that Vauxhall paid its arrears and certain other costs. The Court of Appeal upheld his decision. MSCCs appeal to the Supreme Court concerns whether the court had jurisdiction to grant relief on the facts of this case. MSCC argues that in relation to land the courts can only relieve parties from the forfeiture of proprietary rights which would exclude Vauxhalls contractual rights under the Licence. Vauxhall argues the doctrine is broad enough to protect any right to use land. The Supreme Court unanimously dismisses the appeal. Lord Briggs gives the main judgment with which Lord Carnwath, Lady Black and Lord Kitchin agree. Lady Arden gives a concurring judgment. The Court rejects MSCCs argument that, in the context of land, equitable relief is only available for forfeiture of property rights, as opposed to a right to possession under a contract. In the context of personal property (property which is not land), the decided cases suggest that equitable relief is available for forfeiture of proprietary or possessory rights [24]; [28]; [32] [34]. On a proper analysis, possessory rights means something falling short of ownership, or of a proprietary interest [43]. Now that it is settled that equitable relief may apply to forfeiture of possessory rights in the context of personal property, there are powerful reasons why it should also do so in the context of land. First, the doctrine of relief from forfeiture historically developed in the context of land [44]. Secondly, there is no logical or principled reason for distinguishing between rights over land and rights over other forms of property [45]; [76]. Thirdly, MSCCs distinction would lead to arbitrary results. The courts should identify the scope for equitable intervention by taking a principled approach and consider the nature and purpose of its power to grant relief [47]. The concept of possessory rights does not lead to significant uncertainty in the law. It is frequently used in the context of commercial law and there is no immediately obvious reason why it should not be used in relation to rights over land [41] [42]. Therefore, the Court concludes that the courts may relieve against the forfeiture of possessory rights over land. However, the majority rejects Vauxhalls wider argument that relief from forfeiture should extend to all rights to use land [50]. Lady Arden expresses no view on this point because it was not fully argued and is not essential to the appeal [69]. On the facts, this Licence did grant possessory rights to Vauxhall. As the Court of Appeal explained, Vauxhall gained virtually exclusive possession of the Spillway and a high degree of control over it in perpetuity. As a result, Vauxhall was entitled to ask the court for relief from forfeiture of those rights [46]; [48]; [56] [57]; [89] [90]. In her concurring judgment, Lady Arden sets out the underlying principles in detail [60] [91]. On her approach, the key question is not what category of rights are at stake, but whether the circumstances in which relief from forfeiture is sought to be invoked are those in which equity would grant relief [76] [77]. She holds that the extension of relief from forfeiture to possessory rights does not create an unacceptable loss of certainty [88].

This is the first case under the Mental Capacity Act 2005 to come before this Court. That Act provides for decisions to be made on behalf of people who are unable to make decisions for themselves. Everyone who makes a decision under the Act must do so in the best interests of the person concerned. The decision in this case could not be more important: the hospital where a gravely ill man was being treated asked for a declaration that it would be in his best interests to withhold certain life sustaining treatments from him. When can it be in the best interests of a living patient to withhold from him treatment which will keep him alive? On the other hand, when can it be in his best interests to inflict severely invasive treatment upon him which will bring him next to no positive benefit? The facts The patient, David James, was admitted to hospital in May 2012 aged around 68 because of a problem with a stoma he had had fitted in 2001 during successful treatment for cancer of the colon. The problem was soon solved but he acquired an infection which was complicated by the development of chronic obstructive pulmonary disease, an acute kidney injury and persistent low blood pressure. He was admitted to the critical care unit and placed on a ventilator. He remained in the critical care unit and dependent on ventilator support until the hearing before Peter Jackson J on 5 and 6 December 2012: [2012] EWHC 3524 (COP). His condition between May and December fluctuated. There were some severe setbacks, including a stroke, which left him with right sided weakness and contracture of his legs, and a cardiac arrest which required six minutes of advanced cardio pulmonary resuscitation (CPR) to save him. He had recurring infections, leading to septic shock and multiple organ failure. In between, there were efforts to liberate him from the ventilator and onto a lesser form of supported breathing (CPAP). A tracheostomy was performed for this purpose. At the time of the hearing, he was not on antibiotics or other medication and able to tolerate at least 12 hours of CPAP a day. He received clinically assisted nutrition and hydration through a nasogastric tube. The judge accepted the evidence of Dr Grant, a consultant in critical care medicine, on behalf of the ten consultants and senior nursing staff who had been responsible for Mr James care, as to the diagnosis and prognosis. The patient suffered from gross muscle wasting, owing to his prolonged period of near immobility, so could not sit or stand for himself. He also suffered from contractures, similar to very severe cramps, causing grimacing, raised pulse, breathing and blood pressure, indicating distress and pain. He had suffered a stroke, with severe neurological damage. He was completely dependent on artificial ventilation and required regular tube suction. His kidney function was extremely fragile, with a maximum function of 20% or so, although he had not so far required renal therapy. It was almost inevitable that he would face further infections leading to lowered blood pressure and the prospect of further multi organ failure. Daily care tasks could cause discomfort, pain and suffering. Overall, his prospects of leaving the critical care unit, let alone the hospital, were extremely low. The Official Solicitor, acting on Mr James behalf, had instructed an independent specialist, Dr Danbury, to investigate. His diagnosis and prognosis were consistent with that of the other doctors. As to Mr James mental faculties, he suffered a marked deterioration in his neurological state in July, after which he was considered to lack the capacity to make decisions about his medical treatment. A Wessex Head Injury Matrix assessment in November indicated severe neurological impairment. Nevertheless, the judge recorded the observations in November of Dr Danbury, of Ms Baker, the Official Solicitors case manager, and of the medical and nursing staff. These indicated, positively, that he recognised and was pleased to see his wife and his son when they visited; kissed his wife when she leaned into him; looked at her when she moved round the bed; mouthed what appeared to be words in answer to his wife, Ms Baker and nursing staff; turned the pages of a newspaper, smiling while he did so, although it was not clear to the doctor whether he was actually reading any of the articles or looking at the pictures; put on and took off his glasses while doing so; and appeared to enjoy watching videos on his sons phone. The judge accepted that he qualified for a diagnosis of being in a minimally conscious state. But, as Baker J had pointed out in W v M [2011] EWHC 2443, [2012] 1 WLR 1653, there is a spectrum of minimal consciousness extending from patients who are only just above the vegetative state to those who are bordering on full consciousness. Peter Jackson J added that to that extent the word minimal in the diagnostic label may mislead. Mr James current level of awareness when not in a medical crisis might more accurately be described [as] very limited rather than minimal (para 38). Mr James had been a talented professional musician, spending over 50 years in the music business. He was also a devoted family man. He and his wife had celebrated their golden wedding anniversary in September when their daughter said that he had been very alert. They have three children, three grandchildren and many friends. Family and friends visited him regularly in hospital and his daughter felt that he got a lot of enjoyment from seeing them. She herself visited for four hours every day. The proceedings In September 2012, the hospital trust issued proceedings in the Court of Protection, seeking declarations (1) that Mr James lacked capacity to consent to or refuse treatment of any kind (this was uncontentious); and (2) that it would be in his best interests for four specified treatments to be withheld in the event of a clinical deterioration. Originally, those four treatments included intravenous antibiotics for further infectious complications but the trust did not pursue that. Nor was there any suggestion that the current treatment, ventilation and clinically assisted nutrition and hydration, should be withheld. The three treatments in question, as described by the judge (para 8), were as follows: (1) Invasive support for circulatory problems. This meant the administration of strong inotropic or vasopressor drugs in order to correct episodes of dangerously low blood pressure. The process is painful, involving needles and usually the insertion of a central line. The drugs have significant side effects and can cause a heart attack. They had previously been used to treat Mr James. (2) Renal replacement therapy. This meant haemofiltration, filtering the blood through a machine to make up for the lack of kidney function. It too requires a large line to be inserted and an anti coagulant drug which brings the risk of bleeding or a stroke. It can be very unpleasant for the patient and may cause intense feelings of cold. Mr James had not so far required this treatment. (3) Cardiopulmonary resuscitation (CPR). This aims to make a heart which has stopped beating start beating again. So the decision has to be taken at once. It can take various forms, including the administration of drugs, electric shock therapy and physical compression of the chest and inflation of the lungs. To be effective, it is deeply physical and can involve significant rib fractures. CPR had successfully been given to Mr James when his heart had stopped beating in August. The unanimous view of the clinical team was that it would not be in Mr James best interests to receive these treatments, should his condition deteriorate to the extent that he needed them (that was what was meant by a clinical deterioration). The judge commented that these views were the result of careful thought and bound to carry considerable weight. Dr Danbury took the same view. But the judge did not attach additional weight to his assessment, because in his first report he had said that it was not appropriate to continue even with the current treatment, because there was no prospect of Mr James being able to function again as a musician. He later withdrew this, but the judge did not feel able to rely upon his later assessment, given what the judge regarded as this false start. The family took a different view from the clinicians. They felt that every time Mr James had had an infection he had pulled through. The gaps between episodes of infection had become wider. While he would never recover his previous quality of life, he got a lot of enjoyment from seeing his family and close friends. He had been determined to beat his cancer and the family believed that he would feel the same about his current predicament. Counsel agreed the following list of considerations both for and against treatment in the event of a deterioration (para 79). In favour were: Life itself is of value and treatment may lengthen Mr James life. He currently has a measurable quality of life from which he gains pleasure. Although his condition fluctuates, there have been improvements as well as deteriorations. It is likely that Mr James would want treatment up to the point where it became hopeless. His family strongly believes that this point has not been reached. It would not be right for him to die against a background of bitterness and grievance. Against treatment were: The unchallenged diagnosis is that Mr James has sustained severe physical and neurological damage and the prognosis is gloomy, to the extent that it is regarded as highly unlikely that he will achieve independence again; his current treatment is invasive and every setback places him at a further disadvantage. The treatment may not work. The treatment would be extremely burdensome to endure. It is not in his interests to face a prolonged, excruciating and undignified death. Despite the unanimous medical views, backed by the Official Solicitor, the judge concluded that it would not be appropriate to make the declarations sought (para 84). He was not persuaded that treatment would be futile or overly burdensome or that there was no prospect of recovery (it will be necessary later to consider the meaning he gave to these terms). The arguments in favour undervalued the non medical aspects of Mr James situation: his family life was of the closest and most meaningful kind. Care had to be taken when making declarations in circumstances which were not fully predictable or fluctuating. He recognised that leaving things as they were, for discussion and decision should the need arise, did not sit easily with an emergency decision about CPR, and for what it is worth I think it unlikely that further CPR would be in Mr James best interests. But the case for making that an absolute decision at that time did not exist (para 86). The trust appealed and the hearing took place only 15 days later, on 21 December. The trust were given permission to put in further evidence, in the shape of a letter dated 19 December from Dr Cope on behalf of the clinical team. This showed that Mr James had suffered a significant deterioration on 5 December and since 14 December had been completely dependent on mechanical ventilation. On 18 December he suffered a further dramatic deterioration such that it was difficult to achieve adequate mechanical ventilation. This was accompanied by a fall in blood pressure which required intravenous vasopressors. His renal function had deteriorated further. In this setting of progressive deterioration, attempting CPR was highly unlikely to be successful, and in that unlikely event it was likely to leave him with greater brain damage in addition to other organ damage. He was comatose, or semi comatose, but efforts to support his breathing and blood pressure on 18 December had clearly caused him great distress and discomfort. He was extremely weak and unable to move. The clinical team remained convinced that it would not be in his interests to provide the listed treatments and would cause him greater suffering whilst conveying extremely limited benefit. The Court of Appeal allowed the appeal and made a declaration in similar terms to that sought by the trust. In the early hours of 31 December 2012, Mr James suffered a cardiac arrest and he died. The Court of Appeal handed down their written reasons on 1 March 2013: [2013] EWCA Civ 65, [2013] Med LR 110. Although Mr James has died, this Court gave his widow permission to appeal, in view of the importance of the issues and the different approaches taken by the trial judge and the Court of Appeal to the assessment of the patients best interests in these sensitive and difficult cases. The law This application was made for a declaration under section 15 of the 2005 Act. Section 15(1) provides that the court may make declarations as to whether a person has or lacks capacity, either in relation to a specified decision or in relation specified matters, and as to the lawfulness or otherwise of any act done, or yet to be done, in relation to that person. Section 15(2) expressly provides that act includes an omission and a course of conduct. The application was for a declaration that it would be lawful to withhold the three specified treatments should Mr James condition deteriorate to the extent that he needed them. It is tempting therefore to approach the case as if the question is whether it would be in Mr James best interests to withhold those treatments should they become necessary in order to sustain his life. But is that in fact the right question? Whatever may be the position in relation to declarations about matters other than medical treatment, there are some basic principles relating to medical treatment which may help us to identify how these cases ought to be approached. The judge began in the right place. He was careful to stress that the case was not about a general power to order how the doctors should treat their patient. This Act is concerned with enabling the court to do for the patient what he could do for himself if of full capacity, but it goes no further. On an application under this Act, therefore, the court has no greater powers than the patient would have if he were of full capacity. The judge said: A patient cannot order a doctor to give a particular form of treatment, although he may refuse it. The courts position is no different (para 14). In Re J (A Minor) (Child in Care: Medical Treatment) [1991] Fam 33, at 48, Lord Donaldson MR held that the court could not require the [health] authority to follow a particular course of treatment. What the court can do is to withhold consent to treatment of which it disapproves and it can express its approval of other treatment proposed by the authority and its doctors. He repeated that view in Re J (A Minor)(Child in Care: Medical Treatment) [1993] Fam 15, at 26 27, when it was clearly the ratio decidendi of the case. To similar effect is R v Cambridge District Health Authority, ex p B [1995] 1 WLR 898, where the court would not interfere with the health authoritys decision to refuse to fund further treatment of a child with leukaemia. More recently, in R (Burke) v General Medical Council [2005] EWCA Civ 1003, [2006] QB 273, Lord Phillips MR accepted the proposition of the General Medical Council that if a doctor concludes that the treatment which a patient wants is not clinically indicated he is not required (ie he is under no legal obligation) to provide it (para 50), and Ultimately, however, a patient cannot demand that a doctor administer a treatment which the doctor considers is adverse to the patients clinical needs (para 55). Of course, there are circumstances in which a doctors common law duty of care towards his patient requires him to administer a particular treatment, but it is not the role of the Court of Protection to decide that. Nor is that Court concerned with the legality of NHS policy or guidelines for the provision of particular treatments. Its role is to decide whether a particular treatment is in the best interests of a patient who is incapable of making the decision for himself. However, any treatment which the doctors do decide to give must be lawful. As Lord Browne Wilkinson put it in Airedale NHS Trust v Bland [1993] AC 789, which concerned the withdrawal of artificial hydration and nutrition from a man in a persistent vegetative state, . the correct answer to the present case depends upon the extent of the right to continue lawfully to invade the bodily integrity of Anthony Bland without his consent. If in the circumstances they have no right to continue artificial feeding, they cannot be in breach of any duty by ceasing to provide such feeding (p 883). Generally it is the patients consent which makes invasive medical treatment lawful. It is not lawful to treat a patient who has capacity and refuses that treatment. Nor is it lawful to treat a patient who lacks capacity if he has made a valid and applicable advance decision to refuse it: see 2005 Act, sections 24 to 26. Nor is it lawful to treat such a patient if he has granted a lasting power of attorney (under section 10) or the court has appointed a deputy (under section 16) with the power to give or withhold consent to that treatment and that consent is withheld; but an attorney only has power to give or withhold consent to the carrying out or continuation of life sustaining treatment if the instrument expressly so provides (section 11(8)) and a deputy cannot refuse consent to such treatment (section 20(5)). Those cases aside, it was recognised by the House of Lords in Re F (Mental Patient: Sterilisation) [1990] 2 AC 1 that where a patient is unable to consent to treatment it is lawful to give her treatment which is necessary in her best interests. Section 5 of the Mental Capacity Act 2005 now provides a general defence for acts done in connection with the care or treatment of a person, provided that the actor has first taken reasonable steps to establish whether the person concerned lacks capacity in relation to the matter in question and reasonably believes both that the person lacks capacity and that it will be in his best interests for the act to be done. However, section 5 does not expressly refer both to acts and to omissions, the giving or withholding of treatment. The reason for this, in my view, is that the fundamental question is whether it is lawful to give the treatment, not whether it is lawful to withhold it. In Bland, Lord Goff (with whose judgment Lord Keith and Lord Lowry expressly agreed) pointed out that the question is not whether it is in the best interests of the patient that he should die. The question is whether it is in the best interests of the patient that his life should be prolonged by the continuance of this form of treatment (p 868). To the same effect was Lord Browne Wilkinson, at p 884: . the critical decision to be made is whether it is in the best interests of Anthony Bland to continue the invasive medical care involved in artificial feeding. That question is not the same as, Is it in Anthony Blands best interests that he should die? The latter question assumes that it is lawful to perpetuate life: but such perpetuation of life can only be achieved if it is lawful to continue to invade the bodily integrity of the patient by invasive medical care. Hence the focus is on whether it is in the patients best interests to give the treatment, rather than on whether it is in his best interests to withhold or withdraw it. If the treatment is not in his best interests, the court will not be able to give its consent on his behalf and it will follow that it will be lawful to withhold or withdraw it. Indeed, it will follow that it will not be lawful to give it. It also follows that (provided of course that they have acted reasonably and without negligence) the clinical team will not be in breach of any duty towards the patient if they withhold or withdraw it. Deciding upon best interests A person who has the capacity to decide for himself can of course make decisions which are not in his own best interests and no doubt frequently does so. Indeed, the Act provides that a person is not to be treated as unable to make a decision simply because he makes an unwise one: section 1(4). But both at common law and under the Act, those who act or make decisions on behalf of a person who lacks capacity must do so in his best interests: section 1(5). How then is it to be determined whether a particular treatment is in the best interests of the patient? The Act gives some limited guidance. Section 4 relevantly provides: (2) The person making the determination [for the purposes of this Act what is in a persons best interests] must consider all the relevant circumstances and, in particular, take the following steps. (3) He must consider(a) whether it is likely that the person will at some time have capacity in relation to the matter in question, and (b) if it appears likely that he will, when that is likely to be. (4) He must, so far as reasonably practicable, permit and encourage the person to participate, or to improve his ability to participate, as fully as possible in any act done for him and any decision affecting him. (5) Where the determination relates to life sustaining treatment he must not, in considering whether the treatment is in the best interests of the person concerned, be motivated by a desire to bring about his death. (6) He must consider, so far as is reasonably ascertainable(a) the person's past and present wishes and feelings (and, in particular, any relevant written statement made by him when he had capacity), (b) the beliefs and values that would be likely to influence his decision if he had capacity, and (c) the other factors that he would be likely to consider if he were able to do so. (7) He must take into account, if it is practicable and appropriate to consult them, the views of . (b) anyone engaged in caring for the person or interested in his welfare, . as to what would be in the person's best interests and, in particular, as to the matters mentioned in subsection (6). (8) The duties imposed by subsections (1) to (7) also apply in relation to the exercise of any powers which. (b) are exercisable by a person under this Act where he reasonably believes that another person lacks capacity. (9) In the case of an act done, or a decision made, by a person other than the court, there is sufficient compliance with this section if (having complied with the requirements of subsections (1) to (7)) he reasonably believes that what he does or decides is in the best interests of the person concerned. (10) "Life sustaining treatment" means treatment which in the view of a person providing health care for the person concerned is necessary to sustain life. (11) "Relevant circumstances" are those(a) of which the person making the determination is aware, and (b) which it would be reasonable to regard as relevant. This approach follows very closely the recommendations of the Law Commission in their Report on Mental Incapacity (1995, Law Com No 231) on which the 2005 Act is based. It had been suggested in Re F that it might be enough if the doctor had acted in accordance with an accepted body of medical opinion (the Bolam test for medical negligence). However, as the Court of Appeal later recognised in Re S (Adult Patient: Sterilisation) [2001] Fam 15, there can only logically be one best option. The advantage of a best interests test was that it focused upon the patient as an individual, rather than the conduct of the doctor, and took all the circumstances, both medical and non medical, into account (paras 3.26, 3.27). But the best interests test should also contain a strong element of substituted judgment (para 3.25), taking into account both the past and present wishes and feelings of patient as an individual, and also the factors which he would consider if able to do so (para 3.28). This might include altruistic sentiments and concern for others (para 3.31). The Act has helpfully added a reference to the beliefs and values which would be likely to influence his decision if he had capacity. Both provide for consultation with carers and others interested in the patients welfare as to what would be in his best interests and in particular what his own views would have been. This is, as the Explanatory Notes to the Bill made clear, still a best interests rather than a substituted judgment test, but one which accepts that the preferences of the person concerned are an important component in deciding where his best interests lie. To take a simple example, it cannot be in the best interests to give the patient food which he does not like when other equally nutritious food is available. Section 4(5) and (10) was an addition while the Bill was passing through Parliament: in considering whether treatment which is necessary to sustain life is in the patients best interests, the decision maker must not be motivated by a desire to bring about the patients death. Like much else in the Act, this reflects the existing law. Beyond this emphasis on the need to see the patient as an individual, with his own values, likes and dislikes, and to consider his best interests in a holistic way, the Act gives no further guidance. But section 42 requires the Lord Chancellor to prepare a code or codes of practice for those making decisions under the Act. Any person acting in a professional capacity or for remuneration is obliged to have regard to the code (section 42(4)) and a court must take account of any provision in or failure to comply with the code which is relevant to a question arising in any civil or criminal proceedings (section 42(5)). The Mental Capacity Act Code of Practice was published in 2007. Lord Pannick QC, on behalf of the trust, accepts that if there is any conflict between what it says and what is said in the guidance given by the General Medical Council under section 35 of the Medical Act 1983 (Treatment and care towards the end of life: good practice in decision making, 2010) or by the British Medical Association (Withholding and Withdrawing Life prolonging Medical Treatment: Guidance for decision making, 3rd edition 2007), then the Mental Capacity Act Code must prevail. The Mental Capacity Act Code deals with decisions about life sustaining treatment in this way: 5.31 All reasonable steps which are in the person's best interests should be taken to prolong their life. There will be a limited number of cases where treatment is futile, overly burdensome to the patient or where there is no prospect of recovery. In circumstances such as these, it may be that an assessment of best interests leads to the conclusion that it would be in the best interests of the patient to withdraw or withhold life sustaining treatment, even if this may result in the person's death. The decision maker must make a decision based on the best interests of the person who lacks capacity. They must not be motivated by a desire to bring about the person's death for whatever reason, even if this is from a sense of compassion. Healthcare and social care staff should also refer to relevant professional guidance when making decisions regarding life sustaining treatment. 5.32 As with all decisions, before deciding to withdraw or withhold life sustaining treatment, the decision maker must consider the range of treatment options available to work out what would be in the person's best interests. All the factors in the best interests checklist should be considered, and in particular, the decision maker should consider any statements that the person has previously made about their wishes and feelings about life sustaining treatment. 5.33 Importantly, section 4(5) cannot be interpreted to mean that doctors are under an obligation to provide, or to continue to provide, life sustaining treatment where that treatment is not in the best interests of the person, even where the person's death is foreseen. Doctors must apply the best interests' checklist and use their professional skills to decide whether life sustaining treatment is in the person's best interests. If the doctor's assessment is disputed, and there is no other way of resolving the dispute, ultimately the Court of Protection may be asked to decide what is in the person's best interests. (Emphasis supplied.) It is important to read these paragraphs as a whole. As paragraph 5.33 makes clear, doctors have to decide whether the life sustaining treatment is in the best interests of the patient. Section 4(5) does not mean that they have to provide treatment which is not in the patients best interests. Paragraph 5.31 gives useful guidance, derived from previous case law, as to when life sustaining treatment may not be in the patients best interests. Both the judge and the Court of Appeal accepted them as an accurate statement of the law and so would I. However, they differed as to the meaning of the words in italics. The Code is not a statute and should not be construed as one but it is necessary for us to consider which of them was closer to the correct approach. How the judge and the Court of Appeal interpreted the patients best interests In concluding that he was not persuaded that treatment would be futile or overly burdensome or that there was no prospect of recovery, Peter Jackson J said this: (a) In Mr James case, the treatments in question cannot be said to be futile, based on the evidence of their effect so far. (b) Nor can they be said to be futile in the sense that they could only return Mr James to a quality of life which is not worth living. (c) Although the burdens of treatment are very great indeed, they have to be weighed against the benefits of a continued existence. (d) Nor can it be said that there is no prospect of recovery: recovery does not mean a return to full health, but the resumption of a quality of life that Mr James would regard as worthwhile. The references, noted above, to a cure or a return to the former pleasures of life set the standard unduly high. In the Court of Appeal, Sir Alan Ward regarded the real question as whether the judge correctly applied the guidance and in particular whether he was right to find that the treatments could not be said to be futile. He considered that futility had to be judged against the goal which was sought to be achieved. He listed six possible goals, ending with this: The goal may be to secure therapeutic benefit for the patient, that is to say the treatment must, standing alone or with other medical care, have the real prospect of curing or at least palliating the life threatening disease or illness from which the patient is suffering. (para 35) In his view, this was the goal against which futility should be judged (para 37). The judge had adopted too narrow a view of the futility of treatment. He should have had regard, not just to its effectiveness in coping with the current crisis, but to the improvement or lack of improvement which the treatment would bring to the general health of the patient (para 38). He also took the view that the judge was wrong to conclude that the three treatments in question were not overly burdensome (para 40). Moreover, the judge had applied the wrong test of a recovery. In his view, the focus was on the medical interests of the patient. In a case where life was ebbing away, no prospect of recovery means no prospect of recovering such a state of good health as will avert the looming prospect of death if the life sustaining treatment is given (para 44). Having held that the judge had applied the wrong test, the Court of Appeal went on to reach its own decision. Sir Alan accepted that his conclusion that the treatment would be futile, overly burdensome and that there was no prospect of recovery was only one pointer. The term best interests encompassed more than merely medical issues. It included the patients welfare in the widest sense as well as his wishes and feelings. But his wishes, if they were to be the product of fully informed thought, would have to recognise the futility of treatment, its burdensome nature and the fact that he would never go home. In the overall assessment, therefore, his wishes must give way to what is best in his medical interests (para 47). Laws LJ agreed with Sir Alan Ward. Arden LJ reached the same result but by a different route. She thought that the starting point was the patients wishes. But if the court had any doubt as to an individuals wishes or as to whether treatment should be given, it should proceed on the basis that the individual would act as a reasonable person would act (para 50). Agreeing with Sir Alan Ward that the treatment would be unduly burdensome, she considered that a reasonable individual would reject it. Hence it was not in his best interests. Discussion The authorities are all agreed that the starting point is a strong presumption that it is in a persons best interests to stay alive. As Sir Thomas Bingham MR said in the Court of Appeal in Bland, at p 808, A profound respect for the sanctity of human life is embedded in our law and our moral philosophy. Nevertheless, they are also all agreed that this is not an absolute. There are cases where it will not be in a patients best interests to receive life sustaining treatment. The courts have been most reluctant to lay down general principles which might guide the decision. Every patient, and every case, is different and must be decided on its own facts. As Hedley J wisely put it at first instance in Portsmouth Hospitals NHS Trust v Wyatt [2005] 1 FLR 21, The infinite variety of the human condition never ceases to surprise and it is that fact that defeats any attempt to be more precise in a definition of best interests (para 23). There are cases, such as Bland, where there is no balancing exercise to be conducted. There are cases, where death is in any event imminent, where the factors weighing in the balance will be different from those where life may continue for some time. Nevertheless, there has been some support for a touchstone of intolerability in those cases where a balancing exercise is to be carried out. In Re B (A Minor) (Wardship: Medical Treatment) [1981] 1 WLR 1421, authorising an operation which was necessary to save the life of a baby with Downs syndrome, Templeman LJ said that the question was whether the life of this child is demonstrably going to be so awful that in effect the child must be condemned to die, and Dunn LJ said that there was no evidence that this childs short life is likely to be an intolerable one. Taylor LJ, in Re J (Wardship: Medical Treatment) [1991] Fam 33, also adopted a test of whether life would be intolerable to the child. However, Lord Donaldson and Balcombe LJ did not see demonstrably so awful or intolerable as laying down a quasi statutory test which would apply in all circumstances. And in Portsmouth Hospitals NHS Trust v Wyatt [2005] EWCA Civ 1181, [2005] 1 WLR 3995, the Court of Appeal considered that observations on intolerability in W Healthcare NHS Trust v H [2005] 1 WLR 834 were obiter, given that the judge had correctly decided the case by a careful balance of all the factors in the welfare equation (para 84). In Re J, Lord Donaldson stated that account had to be taken of the pain and suffering and quality of life which the child would experience if life were prolonged and also of the pain and suffering involved in the proposed treatment. Here we can see a possible genesis for the references in the Code of Practice to the prospect of recovery and the overly burdensome nature of the treatment. Similarly in Bland, Lord Goff referred to the class of case where having regard to all the circumstances (including the intrusive nature of the treatment, the hazards involved in it, and the very poor quality of life which may be prolonged) it may be judged not in the best interests of the patient to initiate or continue life prolonging treatment (p 868). But he expressed no view as to the precise principles applicable to such cases, because Anthony Blands case was in a different category, where the treatment was of no benefit to him at all. Here there was no weighing operation to be performed because treatment was useless: I cannot see that medical treatment is appropriate or requisite simply to prolong a patients life when such treatment has no therapeutic purpose of any kind, as where it is futile because the patient is unconscious and there is no prospect of any improvement in his condition (p 869). Here we can see a possible genesis of the word futile in the Code of Practice and in that case it referred to treatment which was of no benefit at all to the patient. The most that can be said, therefore, is that in considering the best interests of this particular patient at this particular time, decision makers must look at his welfare in the widest sense, not just medical but social and psychological; they must consider the nature of the medical treatment in question, what it involves and its prospects of success; they must consider what the outcome of that treatment for the patient is likely to be; they must try and put themselves in the place of the individual patient and ask what his attitude to the treatment is or would be likely to be; and they must consult others who are looking after him or interested in his welfare, in particular for their view of what his attitude would be. In my view, therefore, Peter Jackson J was correct in his approach. the genesis of the concepts used in the Code of Practice, he was correct to consider whether the proposed treatments would be futile in the sense of being ineffective or being of no benefit to the patient. Two of the treatments had been tried before and had worked. He was also correct to say that recovery does not mean a return to full health, but the resumption of a quality of life which Mr James would regard as worthwhile. He clearly did consider that the treatments in question were very burdensome. But he considered that those burdens had to be weighed against the benefits of a continued existence. He was also correct to see the assessment of the medical effects of the treatment as only part of the equation. Regard had to be had to the patients welfare in the widest sense, and great weight to be given to Mr James family life which was of the closest and most meaningful kind. Perhaps above all, he was right to be cautious about making declarations in circumstances which were not fully predictable or fluctuating. The judge was invited to address the question whether it would be lawful to withhold any or all of these treatments. But if he had been asked the right question, whether it would be in the patients best interests to give any or all of them should the occasion arise, his answer would clearly have been to the same effect. He would have said, as he was entitled to say that, on the evidence before him, it was too soon to say that it was not. That conclusion is quite consistent with his statement that for what it is worth he thought it unlikely that further CPR would be in the patients best interests. That is not to say that I would have reached the same conclusion as the judge in relation to each of these treatments. There was no question of withdrawing clinically supported nutrition and hydration or ventilation or other supported breathing or, by the time of the hearing, intravenous antibiotics. The treatments in question were all highly invasive. I might have drawn a distinction between them. Invasive support for circulatory problems had been used successfully in the past and the patient had rallied. Renal replacement therapy had not so far been needed and so it might be difficult to predict both its effectiveness and its impact upon the patients overall wellbeing. Cardiopulmonary resuscitation, on the other hand, although it had been used successfully in the past, is designed to restart a heart which has stopped beating or lungs which have stopped breathing, in effect to bring the patient back to life. I can understand why the judge thought it premature to say that it should not be attempted. But given the particular nature of this treatment, given its prospects of success, and particularly given the risk that, if revived, the patient would be even more seriously disabled than before, I would probably have declared that it would not be in the patients best interests to attempt it. But if the judge has correctly directed himself as to the law, as in my view this judge did, an appellate court can only interfere with his decision if satisfied that it was wrong: Re B (A Child) (Care Proceedings: Appeal) [2013] UKSC 33, [2013] 1 WLR 1911. In a case as sensitive and difficult as this, whichever way the judges decision goes, an appellate court should be very slow to conclude that he was wrong. It follows that I respectfully disagree with the statements of principle in the Court of Appeal where they differ from those of the judge. Thus it is setting the goal too high to say that treatment is futile unless it has a real prospect of curing or at least palliating the life threatening disease or illness from which the patient is suffering. This phrase may be a partial quotation from Grubb, Laing and McHale, Principles of Medical Law (3rd edition 2010), para 10.214, where the authors suggest that Treatment can properly be categorised as futile if it cannot cure or palliate the disease or illness from which the patient is suffering and thus serves no therapeutic purpose of any kind. Earlier, they had used the words useless or pointless. Given its genesis in Bland, this seems the more likely meaning to be attributed to the word as used in the Code of Practice. A treatment may bring some benefit to the patient even though it has no effect upon the underlying disease or disability. The Intensive Care Society and the Faculty of Intensive Medicine, who have helpfully intervened in this appeal, supported the test proposed by Sir Alan Ward. But this was because they believed that it reflected clinical practice in which futility would normally be understood as meaning that the patient cannot benefit from a medical intervention because he or she will not survive with treatment. That is much closer to the definition adopted by the judge than by Sir Alan. I also respectfully disagree with the statement that no prospect of recovery means no prospect of recovering such a state of good health as will avert the looming prospect of death if the life sustaining treatment is given. At least on the evidence before the judge, this was not, as Sir Alan Ward put it, a situation in which the patient was actively dying. It was accepted in Burke (as it had been earlier) that where the patient is close to death, the object may properly be to make his dying as comfortable and as dignified as possible, rather than to take invasive steps to prolong his life for a short while (see paras 62 63). But where a patient is suffering from an incurable illness, disease or disability, it is not very helpful to talk of recovering a state of good health. The patients life may still be very well worth living. Resuming a quality of life which the patient would regard as worthwhile is more readily applicable, particularly in the case of a patient with permanent disabilities. As was emphasised in Re J (1991), it is not for others to say that a life which the patient would regard as worthwhile is not worth living. Finally, insofar as Sir Alan Ward and Arden LJ were suggesting that the test of the patients wishes and feelings was an objective one, what the reasonable patient would think, again I respectfully disagree. The purpose of the best interests test is to consider matters from the patients point of view. That is not to say that his wishes must prevail, any more than those of a fully capable patient must prevail. We cannot always have what we want. Nor will it always be possible to ascertain what an incapable patients wishes are. Even if it is possible to determine what his views were in the past, they might well have changed in the light of the stresses and strains of his current predicament. In this case, the highest it could be put was, as counsel had agreed, that It was likely that Mr James would want treatment up to the point where it became hopeless. But insofar as it is possible to ascertain the patients wishes and feelings, his beliefs and values or the things which were important to him, it is those which should be taken into account because they are a component in making the choice which is right for him as an individual human being. However, in my view, on the basis of the fresh evidence which was before them, the Court of Appeal were correct to allow the appeal and make the declarations they did (which were in the present tense). There had been such a significant deterioration in Mr James condition that the prospect of his regaining even his previous quality of life appeared very slim. The risk that cardiovascular resuscitation would make matters even worse appeared great. The time had indeed come when it was no longer premature to say that it would not be in his best interests to attempt to restart his heart should it stop beating. Indeed, had the judge been asked to reach a decision on the basis of the evidence then available, it seems clear on the basis of his reasoning that he would have done the same. Conclusions There are some additional comments to be made. First, the interveners have argued that to allow this appeal would be to change the law as previously understood. As I have endeavoured to show, upholding the judges view of the law does not in any way change the law as previously understood. If anything, it was the Court of Appeal which did that. Second, there is nothing in this judgment which is inconsistent with the sensible advice given by the General Medical Council in their guidance on Treatment and care towards the end of life: good practice in decision making. Third, if the clinical team are unable to reach agreement with the family or others about whether particular treatments will be in the best interests of the patient, they may of course bring the question to court in advance of those treatments being needed. But they may find that, as here, the court is unable to say that when they are needed, they will not be in the patients best interests. Fourth, it is important to be precise in framing the terms of the declarations sought. In this case, in the event of a clinical deterioration in fact meant should his condition deteriorate to the extent that they become necessary and it would have been helpful to say so. It follows that I would dismiss this appeal on the ground that the Court of Appeal reached the right result but for the wrong reasons, while the trial judge had reached a result which was open to him having correctly directed himself as to the law.

This appeal is concerned with how doctors and courts should decide when it is in the best interests of a patient, who lacks the capacity to decide for himself, for him to be given, or not to be given, treatments necessary to sustain life. The respondent hospital trust (Aintree) sought a declaration under the Mental Capacity Act 2005 in respect of the appellant, Mr James, who was admitted to hospital in May 2012. Mr James acquired an infection which was complicated by the development of chronic pulmonary disease, an acute kidney injury and persistent low blood pressure. He was admitted to the critical care unit and placed on a ventilator. In the ensuing months he suffered some severe setbacks, including a stroke and recurrent infections, and his condition fluctuated. After July 2012, deterioration in his neurological state meant he was considered to lack capacity to make decisions about his medical treatment. However, he appeared to recognise and take pleasure in visits from his wife and family and his friends. In September 2012 Aintree issued proceedings in the Court of Protection seeking declarations that it would be in the best interests of Mr James for specified treatments to be withheld from him in the event of a clinical deterioration. These were painful and/or deeply physical treatments such as cardiopulmonary resuscitation (CPR). Mr James family took a different view from the clinicians, believing that, while he would never recover his previous quality of life, he gained pleasure from his present quality of life and would wish it to continue. The Mental Capacity Act Code of Practice provides that it may be in the best interests of a patient in a limited number of cases not to give life sustaining treatment where treatment is futile, overly burdensome to the patient or where there is no prospect of recovery, even if this may result in the persons death. The trial judge interpreted these words as inapplicable to treatments which would enable Mr James to resume a quality of life which he would regard as worthwhile: they did not have to return him to full health. He held that it would not be appropriate to make the declarations sought. The Court of Appeal reversed his decision on 21 December 2012, by which time Mr James condition had deteriorated further. It held that futility was to be judged by the improvement or lack of improvement which the treatment would bring to the general health of the patient, and recovery meant recovery of a state of health which would avert the looming prospect of death. Mr James suffered a cardiac arrest and died on 31 December 2012. The Supreme Court gave his widow permission to appeal notwithstanding this, in view of the importance of the issues and the different approaches taken in the courts below to the assessment of the patients best interests. The Supreme Court unanimously holds that the trial judge applied the right principles and reached a conclusion which he was entitled to reach on the evidence before him. But the Court of Appeal were right to reach the conclusion they did on the basis of the fresh evidence before them. Technically, therefore, the appeal is dismissed. Lady Hale gives the sole judgment, with which Lord Neuberger, Lord Clarke, Lord Carnwath and Lord Hughes agree. S 15 of the Mental Capacity Act 2005 provides that the court may make declarations as to whether a person has or lacks capacity, and as to the lawfulness of any act done or yet to be done in relation to that person. The Act is concerned with enabling the court to do for a patient what he could do for himself if of full capacity, but goes no further. A patient cannot order a doctor to give a particular form of treatment (although he may refuse it) and the courts position is no different [18]. However, any treatment which doctors do decide to give must be lawful. Generally it is the patients consent which makes invasive medical treatment lawful [19]. If a patient is unable to consent it is lawful to give treatment which is in his best interests [20]. The fundamental question is whether it is in the patients best interests, and therefore lawful, to give the treatment, not whether it is lawful to withhold it [21]. The starting point is the strong presumption that it is in a persons best interests to stay alive [35]. In considering the best interests of a particular patient at a particular time, decision makers must look at his welfare in the widest sense, not just medical but social and psychological; they must consider the nature of the medical treatment in question, what it involves and its prospects of success; they must consider what the outcome of that treatment for the patient is likely to be; they must try and put themselves in the place of the individual patient and ask what his attitude is or would be likely to be; and they must consult others who are looking after him or interested in his welfare [39]. The judge was right to consider whether the proposed treatments would be futile in the sense of being ineffective or being of no benefit to the patient. He was right to weigh the burdens of treatment against the benefits of a continued existence, and give great weight to Mr James family life, which was of the closest and most meaningful kind [40]. He was right to be cautious in circumstances which were fluctuating [41]. A treatment may bring some benefit to a patient even if it has no effect upon the underlying disease or disability [43]. It was not futile if it enabled a patient to resume a quality of life which the patient would regard as worthwhile [44]. The Court of Appeal had been wrong to reject the judges approach. It had also been wrong to suggest that the test of the patients wishes and feelings was an objective one, namely what the reasonable patient would think. Insofar as it was possible to ascertain the patients wishes and feelings, his beliefs and values or the things which were important to him, these should be taken into account because they were a component in making the choice which was right for him as an individual human being [45]. However, by the time of the appeal there had been such a significant deterioration in Mr James condition that the time had indeed come when it was no longer in his best interests to provide the treatments. The prospect of his regaining even his previous quality of life was by then very slim. The Court of Appeal had therefore been correct to allow Aintrees appeal [46].

The various appellants in each of two appeals, which have been heard together, challenge the lawfulness of provisions relating to what is known as the revised benefit cap. The original benefit cap was introduced by section 96(1) of the Welfare Reform Act 2012 (the 2012 Act). Pursuant to it, the Housing Benefit Regulations 2006, SI 2006/213, (the 2006 Regulations) were amended so as to provide, in regulation 75A, that, if a households total entitlement to specified welfare benefits were otherwise to exceed an annual limit, its entitlement should be capped at that limit. The original cap came into force on 15 April 2013. In R (SG) v Secretary of State for Work and Pensions [2015] UKSC 16, [2015] 1 WLR 1449, this court, by a majority of three to two, dismissed an appeal by three lone mothers and three of their children against a decision that provisions relating to the original cap did not discriminate against women in the enjoyment of their possession of welfare benefits and so were not unlawful. I will refer to the SG case as the first benefit cap case. In its manifesto for the general election which took place on 7 May 2015 the Conservative Party proposed that any Conservative government would introduce legislation for a revised benefit cap which would cap specified benefits at a lower level. Following the partys victory in that election the government introduced, and Parliament enacted, the Welfare Reform and Work Act 2016 (the 2016 Act). By making amendments to the 2012 Act, the 2016 Act introduced the revised cap, which came into force on 7 November 2016. In making provision for the original cap, the earlier version of the 2012 Act had, in section 96(5) to (7), provided for the annual limit, at which the welfare benefits were to be capped, to be specified in regulations and to be determined by reference to the estimated average net earnings of a working household in Britain; and the amended 2006 Regulations had specified that, for couples and lone parents, the annual limit was 26,000, being a figure apparently determined in that way. But the amendments wrought by the 2016 Act have replaced those provisions; and, for the purposes of the revised cap, they identify the annual limits in the 2012 Act itself, namely in a new section 96(5A). The effect of the subsection, when read with a new regulation 75CA inserted into the 2006 Regulations by regulation 2(3) of the Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations 2016 (SI 2016/909) (the 2016 Regulations) is that, for couples and lone parents, the annual limits are reduced to 23,000 if they reside in Greater London and to 20,000 if they reside elsewhere. How were these reduced figures calculated? Clearly the yardstick of average net earnings of a working household was abandoned otherwise the figures would not have come down. The governments Impact Assessment dated August 2016 relating to the 2016 Act (the IA) suggested that the reduced figures were calculated by reference to the fact that 40% of households earn less than them. But, say the appellants, the only arguably relevant figures would relate to the total income of those households, inclusive in particular of benefits. The amendments made in 2016 provide no automatic adjustment of the limits for inflation; and the reduced figures have already lost 5% of their real value. But a new section 96A of the 2012 Act requires the Secretary of State to review them at least once during each Parliament. The welfare benefits subject to the cap, which prior to the amendments to the 2012 Act were left to be specified in regulations, are also now specified in the Act itself, namely in section 96(10). Among others, the benefits there specified include child benefit, child tax credit, housing benefit and income support. Various features of the scheme which applied to the original cap have been retained for application to the revised cap. By regulation 75D of the 2006 Regulations, it is for the local authority to implement the cap by reducing payment of housing benefit accordingly. By regulation 75F, those in receipt of certain benefits (now including, pursuant to amendment by the 2016 Regulations, a carers allowance and a guardians allowance) are exempt from the cap even if they also receive benefits which are specified in section 96(10) as being subject to it. And, most importantly, by regulation 75E(2), those entitled to working tax credit are exempt from the cap. Under regulation 4(1) of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (SI 2002/2005) a single person (which here includes a lone parent) is entitled to working tax credit if, among other things, she or he undertakes work for at least 16 hours each week. A couple, on the other hand, is entitled to it if, among other things, they undertake work for at least 24 hours each week, provided that one of them does so for at least 16 of those hours. three aims: (a) to improve the fairness of the social security system and to increase public confidence in its fairness, particularly in relation to the governments objective not to reward a non working family with an income in the form of welfare benefits which exceeded that of an average working family; In the IA the government stated that its introduction of the revised cap had to make fiscal savings which would enable the government to redirect (b) its limited resources for better deployment elsewhere; and (c) to incentivise the parents or parent in a non working family to obtain work on the basis in particular that an ethic of work within a family inculcated better outcomes for its children. The IA identified the incentivisation of work as the main aim. The ability of parents to escape the cap by undertaking work for not less than the specified number of hours is described by the government as a key exemption and is therefore central to the design of the scheme. The basic argument on behalf of the appellants is that, in introducing the revised cap, the government, through Parliament, has unlawfully discriminated both against the lone parents of young children, whose ability to work is severely curtailed by their childcare obligations, and against the young children of lone parents. In the DA case there are five appellants. Three of them are lone parent mothers. They all care for children of various ages. At the outset of the proceedings the children of two of the mothers included a child aged under two. Those two children then aged under two are the other appellants. Those two mothers had each suffered a reduction in benefits as a result of the revised cap. At the outset of the proceedings the third mother was pregnant. In the DS case there are eleven appellants. Two of them are lone parent mothers. They both care for children of various ages. The first mother cares for five children, each of whom is an appellant. The second cares for four children, each of whom is also an appellant. At the outset of the proceedings none of these nine children was aged under two but three of them were aged under five. Both of the mothers had suffered a reduction in benefits as a result of the revised cap. Both sets of appellants primarily cast their claim of unlawful discrimination under the Human Rights Act 1998 (the 1998 Act). Their secondary challenge to the scheme for the revised cap is that, in its application to them, it is irrational at common law; but, if the primary claim fails, the application of the scheme to them will not be irrational so the secondary challenge will not further be addressed. In the DA case the appellant mothers contend (a) that their entitlement to welfare benefits falls within the ambit of their rights both under article 1 of protocol 1 (article 1 p 1) of the European Convention on Human Rights (the Convention) and under article 8 of the Convention; (b) that, in that they have the status of lone parents of children aged under two, they have the right under article 14 of the Convention to claim that their rights under article 1 p 1 and article 8 have not been secured without discrimination; that under the scheme they are subject to the same treatment as other (c) adults who are in a relevantly different situation from them and that, unless the same treatment of them is justified, the law requires them to have different treatment; and (d) that the government has failed to justify their subjection to the same treatment as those other adults and that therefore it has unlawfully discriminated against them. In the DA case the appellant children contend (a) within the ambit of the childrens own rights under article 8; (b) that, in that they have the status of children aged under two of lone parents, they have the right under article 14 to claim that their rights under article 8 have not been secured without discrimination; (c) that under the scheme they are subject to the same treatment as other children who are in a relevantly different situation from them and that, unless the same treatment of them is justified, the law requires them to have different treatment; and (d) that, in particular in the light of an alleged breach on its part of article 3 of the UN Convention on the Rights of the Child 1989 (Cm 1976) (the UNCRC), the government has failed to justify their subjection to the same treatment as those other children and that therefore it has unlawfully discriminated against them. that their mothers have an entitlement to welfare benefits which falls that their entitlement to welfare benefits falls within the ambit of their In the DS case the appellant mothers contend (a) rights both under article 1 p 1 and under article 8; (b) that, in that they have the status either of lone parents or, as a fall back, of lone parents of children aged under five, they have the right under article 14 to claim that their rights under article 1 p 1 and article 8 have not been secured without discrimination; (c) that under the scheme they are subject to such different treatment in comparison with other adults, particularly with dual care parents or with lone parents all of whose children are aged at least five, that, unless the different treatment of them is justified, the law requires them to have the same treatment; and (d) that the government has failed to justify their subjection to such different treatment and that therefore it has unlawfully discriminated against them, whether directly or indirectly. In the DS case the appellant children contend (a) that they have an interest in the welfare benefits to which their mothers are entitled and that it falls within the ambit of their own rights under article 8 or, if not, under article 1 p 1; (b) that, in that they have the status of children of lone parents or, in the case of three of them and as a fall back, that they have the status of children aged under five of lone parents, they have the right under article 14 to claim that their rights under article 8 or, if not, under article 1 p 1 have not been secured without discrimination; (c) that under the scheme they are subject to such different treatment in comparison with other children, particularly children of dual care parents or children aged at least five of lone parents, that, unless the different treatment of them is justified, the law requires them to have the same treatment; and (d) that, in particular in the light of an alleged breach on its part of article 3 of the UNCRC, the government has failed to justify their subjection to such different treatment and that therefore it has unlawfully discriminated against them, whether directly or indirectly. In response to the above contentions the government concedes only that the entitlement of the two sets of appellant mothers to welfare benefits falls within the ambit of their rights under article 1 p 1. It disputes every other contention. Unlike the DS case, the DA case has been the subject of adjudication on the merits in the lower courts. By an order dated 22 June 2017, [2017] EWHC 1446 (Admin), [2017] PTSR 1266, Collins J upheld the claims of the DA claimants by declaring that the 2006 Regulations, as amended by the 2016 Regulations, unlawfully discriminated against lone parents of children aged under two and against children aged under two of lone parents. But, by an order dated 15 March 2018, [2018] EWCA Civ 504, [2018] PTSR 1606, the Court of Appeal (Sir Patrick Elias who gave the main judgment and Sir Brian Leveson, President of the Queens Bench Division, who gave a short concurring judgment; McCombe LJ dissenting) set aside the order of Collins J. In effect the court dismissed the claims and granted permission to appeal to the Supreme Court. On 26 March 2018, thus 11 days after the order of the Court of Appeal in the DA case, Lang J heard the DS case. Mr Drabble QC, on behalf of the DS claimants, submitted to her that the dismissal of their claims was not strictly mandated by the Court of Appeals decision in the DA case but he conceded that it placed significant hurdles in their way. In light of the fact that the decision in the DA case was to be reviewed in the Supreme Court, he persuaded the judge to dismiss their claims without inquiry into their merits and to grant a leap frog certificate under section 12 of the Administration of Justice Act 1969 to the effect that an application on their part to the Supreme Court for leave to appeal directly to it would be justified. In due course such an application was made to this court and granted. The consequence is that there has been no lower court review of the evidence filed in the DS case. Although the law of discrimination is inherently difficult, it is impossible to avoid the conclusion that, for various reasons, the courts examination of the issues raised in these appeals has been unnecessarily cumbersome and complicated. (a) The judgments of each of the five members of the court in the first benefit cap case, all of alleged relevance, proceed in all for 269 paragraphs and their combined effect has been a matter of acute and protracted debate in this court and elsewhere. (b) The three judgments of the Court of Appeal in the DA case, now before this court, proceed for 184 paragraphs. (c) The written cases presented to this court in the two appeals by the three principal parties and the three interveners, all of high legal quality, proceed across 357 pages. (d) The evidence filed in both appeals proceeds across more than 3,000 pages. (e) 119 authorities are presented to the court for consideration. (f) The oral argument has continued for two and a half days. In the above circumstances the compilation of this judgment has had to be surgical. Reference to all the arguably relevant evidence and submissions would have submerged it. As it is, I am disappointed with myself in having failed to contain it within fewer than 91 paragraphs. Evidence The impact of the revised cap has been broadly as follows: (a) As at August 2017, the benefits of 68,000 households had been reduced by reference to the revised cap. (b) 52,000 (ie 77%) of those households would not have suffered reduction by reference to the original cap; so the revision of the cap has had a substantial effect. (c) Of the 68,000 households which suffered the revised cap, 49,000 (ie 72%) were lone parent households. (d) Since 90% of lone parents are women, 44,000 (ie 65%) of the households which suffered the revised cap were lone female parent households. (e) Of the 68,000 households which suffered the revised cap, 37,000 (ie 54%) were lone parent households with a child aged under five and, of those, 17,000 (ie 25% of the total) were lone parent households with a child aged under two. The cap has therefore had a major impact on the former group, of which the latter are a significant subgroup. (f) Families with multiple children, thus in receipt of higher amounts of child benefit and child tax credits, are more likely to be capped. As at February 2018, 74% of capped households (not here differentiated between dual care and lone parent households) had at least three children. Has the revised cap incentivised those on benefits to work? The government accepts that the statistical evidence is sparse; and it is inappropriate to address it in detail. It suffices to say: (a) In putting forward its expectations for the revised cap in the IA, the government suggested that 41% of those potentially subject to it would be more likely to work in order to escape it than those not potentially subject to it. (b) But the statistic turns out to mean that the number of those more likely to work in order to escape the cap is 41% larger than the already small group, namely only 11% of all capped households, who would have moved into work in any event. Translated into numbers, it means that only about one capped household out of 20 such households (ie 5%) was considered likely to move into work in order to escape it. In relation, however, to that one capped household out of 20, the appeals require the court to consider whether it was more likely to be a dual care household than a lone parent household, in particular a lone parent household with a child aged under five or indeed aged under two. So, in relation to incentivisation, the government relies less on statistics and more on what are said to be the obvious financial advantages of working. These advantages are scarcely in dispute. Evidence on behalf of the appellants in the DS case suggests, by way of example in relation to one of the mothers, that, when capped, her annual household benefits were 20,000 but that, were she to have worked for 16 hours each week earning 17,000 net, her net annual income would have risen to 32,000 because her benefits would have been reduced by only 5,000. Irrespective, however, of the financial advantages for a parent who works hours sufficient to claim working tax credit and thus to escape the cap, how practicable is it for a lone parent, in particular a lone parent of a child aged under five or indeed aged under two, to do so? Is it reasonable to divert the lone parent from caring for such Is it reasonable to take her out of the home if she is a nursing mother? In any event can she find local part time work with set hours at a (a) children? (b) (c) reasonable time during the day? (d) Can she find a carer in a practicable location who can offer care at the necessary times and, if she has to pay the carer, can she afford to do so? (e) As state regulations about minimum staff ratios appear to recognise, do children aged under two need more intensive and therefore more expensive care than older children? (f) less practicable for her to work? If the lone parent also has a number of other, older children, is it even Central to the governments response to these questions is its provision, on certain conditions, of free childcare for 30 hours per week during term time under the Childcare (Early Years Provision Free of Charge) (Extended Entitlement) Regulations 2016 (S1 2016/1257). The IA stressed its availability and estimated it to be worth about 5,000 pa per child. The trouble is that the provision extends to free care only for three and four year olds and also, albeit limited to 15 hours per week, for certain two year olds in families in receipt of specified benefits. This, no doubt, explains why in the DA case the appellants are members of families which include a child aged under two. Mr Wise QC on their behalf therefore points to the grave difficulty which confronts lone parents in that group in accessing care so that they can work. To this the government responds that the financial advantages of escaping the cap by work are so substantial, as explained above, that these lone parents, if in work, can afford to pay for childcare out of their overall income inclusive of benefits and that they are substantially assisted in doing so in the computation of their working tax credit. But Mr Wise draws a wider point from the limited extent of the provision for free childcare: it betokens (he says) a considered governmental conclusion that it is not in the interests of lone parents of children aged under two, nor in particular in the interests of those children, that their parents should be diverted from caring for them. Here Mr Wise and Mr Drabble join in making an allied point. It relates to the conditions attached to the receipt of income support, which is likely to be a major constituent of the welfare benefits paid to a lone parent. The aim of the conditions is to make it easier for her to find work when (but only when) her youngest child has attained the age of five. One condition relates to the period when she has a child aged one or two and it requires her to attend work focussed interviews about every six months. Another relates to the period when she has a child aged three or four and it requires her to engage in some training or other work related activity in preparation for future work. The sanction for failing to comply with a condition is a reduction in income support. Once all her children have attained the age of five, in other words are of school age, the lone parent not in work must claim jobseekers allowance instead of income support and, to that end, must demonstrate that she is available to do a limited amount of work and that she is actively seeking it. The point made on behalf of all the appellants is that at the heart of the carefully calibrated regime of attaching conditions to the receipt by lone parents of income support is a recognition by the government that it is wrong to expect them actually to work until all their children have attained school age; and that to cap their benefits for failure to work before all their children have attained school age flies in the face of that policy decision. The governments defence of its application of the revised cap to lone parents in the circumstances identified in these appeals relates in significant part to the provision for the possible making to them of a Discretionary Housing Payment (a DHP). Provision for DHPs is made in section 69 of the Child Support, Pensions and Social Security Act 2000 and in regulations made under it. A power to make a DHP is conferred on local authorities and, as the title implies, it must relate to housing costs. So, when a cap requires a local authority to reduce housing benefit below, or further below, the level of the recipients rent, there is the facility for it to make a DHP to cover the balance. Central government provides local authorities both with an annual fund out of which to make DHPs and with a guidance manual in relation to their distribution of them. A broad discretion is conferred upon the local authorities. There is no appeal against a refusal to make a DHP but there is, with whatever degree of difficulty, an opportunity to challenge it by way of judicial review. DHPs are intended to cover many more situations of hardship than those created by the cap, including in particular hardship created by the provisions addressed by this court in R (MA) v Secretary of State for Work and Pensions [2016] UKSC 58, [2016] 1 WLR 4550 (the bedroom tax case); and it is clear that they are mainly intended to alleviate temporary hardship and, for those subject to the cap, are intended, in the words of the IA, to manage the transition for various customers whilst they make the necessary changes to adapt to the application of the benefit cap. The manual however now includes within a list of possible recipients a household which contains a child under two years of age where childcare is a barrier to getting work. In the light in particular of the provision within the scheme for the exercise of discretion on the part of local authorities in the making of DHPs, how far should this court rely on them for alleviation of the worst effects of the cap on lone parents within the appellant groups? The government refers powerfully to the fact that five out of the six appellant mothers in these appeals have at one stage been in receipt of DHPs. The problem is that, as the government accepts, there is limited data about the extent to which capped households are rescued by DHPs. Both the appellants in the DA case and Shelter, as an Intervener in the appeals, present evidence of divergence in (a) authorities surround the making of an application for a DHP; (b) the time which they take to process it; (c) the period for which, subject only to some further award, they agree to make a DHP in order to alleviate a cap, awards of indefinite duration being unknown and most being subject to a maximum of 12 weeks; and (d) shortfall in housing benefit imposed by the cap. the degree of complexity, sometimes bewildering, with which local the extent to which any award of a DHP is large enough to cover the Similar concerns led Henderson J in Burnip v Birmingham City Council [2012] EWCA Civ 629, [2013] PTSR 117, at paras 46 and 47, to reject the attempt by local authorities to rely on DHPs as justifying less favourable treatment of the disabled in the computation of housing benefit. Of the other two aims of government in introducing the revised cap, that of making fiscal savings has scarcely been pressed. The IA forecast that in the year just past (2018 19) the revised cap would save the state 110m. But the figure did not include the operational cost of implementing the cap nor the cost of the support, in particular through DHPs, otherwise provided to capped claimants, all now estimated at 68m this year. In context the net figure appears to be 0.03% of the states overall annual expenditure on welfare benefits for those of working age. Does the revised cap inflict poverty on those subject to it? The answer is hotly contested. But since the government cannot sensibly argue that the computation of welfare benefits is intended to provide a family with more than it needs, it follows that a reduction of those benefits will provide it with less than it needs. Of course the concept of needs is to some extent elastic: they can be assessed with somewhat greater or lesser stringency. But the government does not seek to argue that the lower figures set for the revised cap have been reached by reference to any scale of needs. Equally, in a speech in 2016 relied on by the government, Mr Cameron, then the Prime Minister, acknowledged that the effect of welfare benefits was to push peoples incomes just above the poverty line. It follows that a substantial reduction in them pulls their incomes well down below the poverty line. In my view there are sound reasons for accepting the evidence given by the Child Poverty Action Group in the DS case that the effect of the cap is to reduce a family well below the poverty line, judged by the generally accepted measure of less than 60% of median UK income equivalent to the size of the household. There ensues striking evidence adduced on behalf of the DA appellants about the effect on children of an early life of poverty. Professor Atkinson, the former Childrens Commissioner for England, echoing evidence from Jonathan Bradshaw, Professor of Social Policy at York University, offers this summary: Living in poverty has a serious impact on childrens lives, negatively affecting their educational attainment, health, and happiness as well as having long term adverse consequences into adulthood Even a few years of poverty can have negative consequences for a childs development and is especially harmful from the ages of birth to five. Issue 1: The ambit of article 8 AC 91, Lord Nicholls observed in para 14 that In M v Secretary of State for Work and Pensions [2006] UKHL 11, [2006] 2 the more seriously and directly the discriminatory provision or conduct impinges upon the values underlying the particular substantive article, the more readily will it be regarded as within the ambit of that article It cannot seriously be disputed that the values underlying the right of all the appellants to respect for their family life include those of a home life underpinned by a degree of stability, practical as well as emotional, and thus by financial resources adequate to meet basic needs, in particular for accommodation, warmth, food and clothing. In Petrovic v Austria (2001) 33 EHRR 14 the European Court of Human Rights (the ECtHR) held that a refusal to pay a father, as opposed to a mother, a parental leave allowance fell within the ambit of his rights under article 8 because, as explained in para 27, the allowance enabled a parent to stay at home to look after the children and so affected the way in which family life was organised. In Okpisz v Germany (2006) 42 EHRR 32 it held that a decision no longer to pay child benefits to certain aliens fell within the same ambit. In the bedroom tax case, cited at para 30 above, this court held at para 49 and unanimously, that the so called bedroom tax, by which housing benefit was capped by reference to rules about the number of bedrooms which a family needed, fell within the same ambit. Earlier, in the first benefit cap case, the court had no need to consider whether the original cap fell within the ambit of article 8. Nevertheless the government relies on doubts about it which Lord Reed expressed in para 79. The difficulty is that, as the Intervener, Just Fair, suggests, Lord Reed there seems to have equated the ambit of article 8 with interference with rights under it, which, with respect, may not be the usual analysis. In the DA case Collins J and the Court of Appeal both held that the revised cap fell within the ambit of the rights under article 8 of the claimant mothers and children. I have no doubt that they were correct and of course the same applies to the claimants in the DS case. The effect of the provisions for the cap may be that the mother goes to work and escapes it; if so, her children below school age have to be cared for in some other way. Or the effect may be that the cap is imposed, with a variety of possible results: that, as expressly suggested by the government to be an option, the family, no doubt with great difficulty, has to move to cheaper accommodation; or that the mother builds up rent arrears and so risks eviction or otherwise falls into debt; or that, like one of the DA mothers, she has to cease buying meat for the children; or, as in cases recorded by Shelter, that she has to go without food herself in order to feed the children or has to turn off the heating. Whatever their individual effect, provisions for a reduction of benefits to well below the poverty line will strike at family life. Issue 2: Status The government argues, if faintly, that in the DA case the Court of Appeal was wrong to conclude that the claimants, in other words both the lone parents and the children, had a status on the ground of which they might seek to complain under article 14 of discrimination in the enjoyment of their substantive Convention rights. The government submits, for example, that the parents are women, who admittedly enjoy a status under article 14, and that it is therefore inappropriate for them to seek to shoehorn themselves into some other status. The submission is difficult to understand: it is of the essence of the parents case in the DA appeal and of what I regard as a significant part of their case in the DS appeal that they are lone parents of children aged under two or under five, and that the discrimination lies in the difference between their situation and that of others subject to the cap. The government proceeds to submit that the situation of the appellants can be transitory in that a parent may not be a lone parent for ever and that a child will not remain aged under two (or under five) for long. But there is no ground for concluding that a status for the purpose of article 14 has to be permanent. Some of the examples of status given in article 14 itself can change religion, political opinion, even sex. In Mathieson v Secretary of State for Work and Pensions [2015] UKSC 47, [2015] 1 WLR 3250, this court referred in para 21 to previous authority that the concept of status generally comprised personal characteristics and that inquiry into it should concentrate on what somebody is, rather than what he is doing or what is being done to him; it observed in para 22 that, if the complaint of discrimination fell within the ambit of a Convention right, the ECtHR was reluctant to conclude that the complainant had no relevant status; and it held in para 23 that, as a severely disabled child in need of lengthy in patient hospital treatment, the appellants deceased son had had a status within the meaning of article 14. In R (Stott) v Secretary of State for Justice [2018] UKSC 59, [2018] 3 WLR 1831, this court recently conducted a detailed examination of the meaning of other status in article 14. In the event all members of the court other than Lord Carnwath confirmed that its meaning was broad; and they proceeded to hold that a prisoner subject to a particular type of sentence thereby had the status which under article 14 enabled him to allege that its effect had been to discriminate against him in the enjoyment of his rights under article 5 of the Convention. The present appellants assert statuses more obviously composed of personal characteristics than were those recognised in the cases of Mathieson and Stott; and I have no doubt that all of them have the requisite status in the terms set out in paras 13(b), 14(b), 15(b) and 16(b) above. Issue 3: Formulation of the complaints In R (A) v Secretary of State for Health [2017] UKSC 41, [2017] 1 WLR 2492, I noted in para 29 that the claimants complained that they should have been treated in the same way as a specified group but in para 30 that they had turned their argument inside out in complaining alternatively that they should have been treated in a different way from another specified group. I added in para 31 that in that case the alternative presentation added only an extra level of unwelcome complexity. Nevertheless the concept of discrimination is, as Sir Patrick said in para 17 of his judgment in the DA case, underpinned by the fundamental principle not only that like cases should be treated alike but also that different cases should be treated differently. And in some cases, unlike the A case but exemplified by that in the ECtHR of Thlimmenos v Greece (2000) 31 EHRR 12, the natural formulation of the complaint is indeed that the complainants have been treated similarly to those whose situation is relevantly different, with the result that they should have been treated differently. I have sought to describe in paras 13(c), 14(c), 15(c) and 16(c) above the way in which the various appellants before the court formulate their complaints of discrimination. The DA appellants primarily complain that, in applying the revised cap (a) to lone parents of children aged under two and (b) to children aged under two of lone parents (together, the DA cohorts), the government has treated them similarly to others to whom it has applied the cap but whose situation is relevantly different from theirs. So the DA appellants say that, unless the similar treatment can be justified, the government should have treated them differently by exempting them from the cap. But, like the appellants in the A case, the DA appellants can also turn their complaint inside out. They can point to the exemption from the cap granted to those in receipt of a carers allowance (paid to those who for at least 35 hours a week care for an adult on specified benefits) and of a guardians allowance (paid to those who bring up a child of deceased parents). So in the alternative the DA appellants can complain that, in applying the cap to themselves, the government has treated them differently from carers and guardians to whom it has not applied the cap but whose situation is relevantly similar to theirs. So, the DA appellants can say that, unless the different treatment can be justified, the government should have treated them similarly by exempting them from it. Although the alternative formulation of the complaint of the DA appellants has arguable merit, I have no doubt that the natural way of analysing their complaint accords with their primary formulation of it: it is of discrimination of the type explained in the Thlimmenos case, namely that, by subjecting them to the revised cap, the government has treated the DA cohorts similarly to a specified group whose situation is relevantly different from theirs and thus that, subject to justification, it should have treated them differently from it. I confess that I have found it less easy to understand the way in which the DS appellants formulate their complaint. They contend that the revised cap represents discrimination, both direct and indirect, which violates the Convention rights of all lone parents (and/or women because 90% of lone parents are women) and of all children of lone parents. A group of all lone parents would of course include lone parents with children all aged between five and 18, ie all of school age; and so too a group of all children of lone parents would include children of school age. But the evidence of the DS appellants has scarcely been directed to the effect of the cap on households with children all of school age. Mr Drabble is no doubt entitled, by reference to the statistics set out in para 22 above, to complain of the particular effect of the cap on all lone parents and thus on women; but, insofar as they are lone parents of children all of school age, it is already obvious that the government can justify it. In my view the complaint of the DS appellants which the court should proceed to address is their fall back complaint, namely that the cap violates the Convention rights (a) of all lone parents with a child aged under five and (b) of all children aged under five of lone parents (together, the DS cohorts). Although, for reasons unclear, the DS appellants formulate their fall back complaint only reluctantly in accordance with the Thlimmenos case, such seems to me to be, as in the DA case, its natural formulation, namely that, by subjecting them to the revised cap, the government has treated the DS cohorts similarly to a specified group whose situation is relevantly different from theirs and thus that, subject to justification, it should have treated them differently from it. Issue 4: Comparators The question then arises: what is the specified group which the government is said to have treated similarly to the DA and the DS cohorts? As here, the identification of a comparator group can be difficult. In the present case is the proper comparator (a) dual care parents with a child aged under two or under five; or (b) lone parents without a child aged under two or under five; or (c) all others subjected to the revised cap? All three answers are tenable. Collins J favoured comparison with the group at (c); and McCombe LJ found no reason to disagree with him see paras 155, 156 and 173 of his judgment. Sir Patrick and Sir Brian favoured comparison with the group at (b) see paras 115 and 183 of their judgments. Mr Drabble commends comparison with the group at (a). This courts experience is that, of the various tenable comparators in any particular case, adroit advocates will commend the one which would best serve their purpose in relation to the issues which follow. In AL (Serbia) v Secretary of State for the Home Department [2008] UKHL 42, [2008] 1 WLR 1434, Lady Hale said at para 28: so much argument has been devoted in this case, and in too many others, to identifying the precise characteristics of the persons with whom these two young men should be compared. This is an arid exercise. Blessed is simplicity. The complaint made by the appellants is that their cohorts should not have been subjected to the revised cap. The natural corollary is, as Mr Wise contends, that they are comparing their cohorts with all others subjected to the cap: so the natural comparator is the group at (c). Nevertheless, in arguing that there has been an objectionable similarity of treatment between the DA and the DS cohorts, on the one hand, and all others subjected to the cap, on the other, the appellants may seek to highlight their objection by reference to subgroups, such as those at (a) and (b), whose situations are alleged to be relevantly different. Issue 5: Different situations In DH v Czech Republic (2008) 47 EHRR 3 the Grand Chamber of the ECtHR said in para 175 that discrimination means treating differently, without an objective and reasonable justification, persons in relevantly similar situations. Re cast to cover the type of discrimination recognised in the Thlimmenos case, the proposition is that it means treating similarly, without an objective and reasonable justification, persons in relevantly different situations. In Carson v United Kingdom (2010) 51 EHRR 13 the Grand Chamber explained in para 61 what was meant by the absence of objective and reasonable justification: in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised. Clarity of language aids clarity of thought. It is worthwhile to stress, as the court did in the Mathieson case in para 24, that the frequent reference to justified discrimination in the domestic discussion of the concept is, as a matter of law, the expression of a contradiction in terms. As the terminology long favoured by the Grand Chamber shows, justification negatives the very existence of discrimination. In the DH case the Grand Chamber proceeded to explain in para 177 that, once the applicant had shown a difference in treatment of persons in relevantly similar situations, the burden of proof lay on the state to establish that it was justified; and in para 178 that what shifted the burden on to the state was prima facie evidence. There is clear prima facie evidence that in the terms of the re cast proposition the DA and the DS cohorts are in a relevantly different situation from those others who have been treated similarly to them by their common subjection to the revised cap. For it appears (a) that, in the case of a lone parent of a child below school age, in particular of a child below the age of two, it is contrary to the interests both of herself, of her child and of the family as a whole that she should in effect be constrained to work also outside the home; (b) that, by the conditions which it has attached to the receipt of income support, the government has itself decided that it is contrary to their interests; (c) that, irrespective of whether it is contrary to their interests for her to be so constrained, the extra difficulty, beyond that faced by others subjected to the cap, which confronts such parents in finding not only suitable work but also suitable childcare is plain; (d) childcare further increases that difficulty; (e) that the incidence of failure of those represented by the DA and the DS cohorts to escape the cap, namely in the case of the wider DS cohort 54%, and in the case of the narrower DA cohort 25%, of all those who suffer it, demonstrates its disproportionate impact upon them; and (f) that, while the effect of the cap on all households who suffer it is to reduce their income below the poverty line, poverty has a disproportionate effect on the young children within these cohorts, stunting major aspects of their development in the long term as well as in the short term. that, in the case of a child aged under two, the absence of any free Issue 6: Focus of justification In the first benefit cap case Lord Reed said in para 14: the cap affects a higher number of women than men because of differences in the extent to which the sexes take responsibility for the care of children following the break up of relationships. Whether that differential effect has an objective and reasonable justification depends on whether the legislation governing the cap, which brings about that differential effect, has a legitimate aim and is a proportionate means of realising that aim. May I suggest, with respect, that Lord Reed may there have identified the focus of the justification too widely? He described it as the legislation governing the cap. In A v Secretary of State for the Home Department [2004] UKHL 56, [2005] 2 AC 68, Lord Bingham of Cornhill stated in para 68: What has to be justified is not the measure in issue but the difference in treatment between one person or group and another. In the first benefit cap case Lady Hale in para 188 of her dissenting judgment cited Lord Binghams statement and concluded: It is not enough for the Government to explain why they brought in a benefit cap scheme. That can readily be understood. They have to explain why they brought in the scheme in a way which has disproportionately adverse effects on women. I conclude that what the government has to justify in the present case is its failure to amend the 2006 Regulations so as to provide for exemption of the DA and DS cohorts from the revised cap. The Secretary of State does not appear to challenge this conclusion. Issue 7: Test of justification This court has been proceeding down two different paths in its search for the proper test by which to assess the justification under article 14 for an economic measure introduced by the democratically empowered arms of the state. In retrospect this duality has been unhelpful. I regret having contributed to it. The considerations which have informed the mapping of both paths is best explained by two citations. First, from the judgment of Lord Hope of Craighead in In re G (Adoption: Unmarried Couple) [2008] UKHL 38, [2009] AC 173, para 48: Cases about discrimination in an area of social policy will always be appropriate for judicial scrutiny. The constitutional responsibility in this area of our law resides with the courts. The more contentious the issue is, the greater the risk that some people will be discriminated against in ways that engage their Convention rights. It is for the courts to see that this does not happen. It is with them that the ultimate safeguard against discrimination rests. Second, from the judgment of Lord Reed in the first benefit cap case: 92. Finally, it has been explained many times that the Human Rights Act 1998 entails some adjustment of the respective constitutional roles of the courts, the executive and the legislature, but does not eliminate the differences between them: differences, for example, in relation to their composition, their expertise, their accountability and their legitimacy. It therefore does not alter the fact that certain matters are by their nature more suitable for determination by Government or Parliament than by the courts. In so far as matters of that nature have to be considered by the courts when deciding whether executive action or legislation is compatible with Convention rights, that is something which the courts can and do properly take into account, by giving weight to the determination of those matters by the primary decision maker. 93. That consideration is relevant to these appeals, since the question of proportionality involves controversial issues of social and economic policy, with major implications for public expenditure. The determination of those issues is pre eminently the function of democratically elected institutions. It is therefore necessary for the court to give due weight to the considered assessment made by those institutions . Lord Reed then completed para 93 by adding Unless manifestly without reasonable foundation, their assessment should be respected. The appropriateness of an inquiry into whether the adverse effects of certain measures are manifestly without reasonable foundation is firmly rooted in the jurisprudence of the ECtHR. In James v United Kingdom (1986) 8 EHRR 123, in which it rejected the challenge to the legislation in England and Wales for leasehold enfranchisement, that court, in plenary session, held at para 46 that it should respect the judgment of the national legislature as to what was in the public interest unless it was manifestly without reasonable foundation. And in Stec v United Kingdom (2006) 43 EHRR 47, para 52, which it repeated word for word in Carson v United Kingdom (2010) 51 EHRR 13, para 61, the Grand Chamber, addressing complaints of discrimination arising out of the rules for entitlement to social security benefits, held that it should respect the national legislatures determination of where the public interest lay when devising economic or social measures unless it was manifestly without reasonable foundation. It explained that this more benign approach to the establishment of justification for the adverse effects of a rule flowed from the margin of appreciation which was wide in this area of decision making. I now accept that the weight of authority in our court mandates inquiry into the justification of the adverse effects of rules for entitlement to welfare benefits by reference to whether they are manifestly without reasonable foundation. In Humphreys v Revenue and Customs Comrs [2012] UKSC 18, [2012] 1 WLR 1545, the court rejected a complaint that a rule for entitlement to child tax credit discriminated against men on the basis that the different treatment of men which resulted from the rule was not manifestly without reasonable foundation. In her judgment, with which the other members of the court agreed, Lady Hale said in para 19 that in the context of state benefits the normally strict test for justification of the effect of a rule alleged to be discriminatory on grounds of sex gives way; but she added in para 22 that it did not follow that such a rule should escape careful scrutiny. The possible mapping of a different path emerged in the judgment of Lord Mance in In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3, [2015] AC 1016. But the subject matter was not the entitlement to welfare benefits. It was a proposed bill in the National Assembly of Wales for costs incurred by NHS Wales to be cast upon identified groups. The courts decision was that the bill fell outside the assemblys legislative competence. But Lord Mance proceeded to consider, in passing, whether the bill would have infringed the rights of the groups under article 1 p 1. This required him to consider how the court should assess whether a deprivation of property was justified. In this regard he referred in para 45 to the four stages of a conventional inquiry into justification. In para 52 he held that the first three stages (which require the establishment of a legitimate aim of the measure, of a rational connection of the measure to the aim and of an inability to achieve it less intrusively) could be addressed by whether the contentions in support of the measure were manifestly without reasonable foundation; but that the fourth stage (which requires the establishment of a fair balance between all the interests in play) fell for decision by the court, although it might pay significant respect to the balance favoured by those responsible for the measure. A month after delivery of its judgments in the Wales case the court delivered its judgments in the first benefit cap case. It proceeded on the agreed basis that, if the analysis reached the stage at which the effect of the impugned provisions fell to be justified, the appellants had to establish that it was manifestly without reasonable foundation; and, by a majority, the court held that they had failed to satisfy this agreed criterion. In their dissenting judgments Lady Hale and Lord Kerr duly applied the agreed criterion, albeit with opposite results. But in para 209 of her judgment Lady Hale referred to para 52 of Lord Mances judgment in the Wales case and observed that a benefit cap closely resembled a deprivation of property; and in para 210 she floated the idea that, in the absence of agreement upon the criterion, it might have been possible to limit its application to the stages of the conventional inquiry referable to the aim of the provisions and to exclude its application to the final stage referable to its fair balance and overall proportionality. Almost two years later the court delivered its judgments in the bedroom tax case, cited in para 30 above. Two of the three conjoined appeals concerned claims that the effect of rules for the computation of housing benefit was to discriminate against disabled people in the enjoyment of their rights under article 8 and/or article 1 p 1. Giving the main judgment, Lord Toulson recorded in para 28 the primary contention of the claimants in the first appeal as having been that the Court of Appeal had erred in asking whether the treatment of which they complained was manifestly without reasonable foundation. In paras 29 to 38 he then at length set out reasons in support of his conclusion, in which all the other members of the court concurred, that the Court of Appeal had not erred when, in assessing justification for the effect of the rules on the claimants, it had asked itself that single question. Several months after delivery of the judgments in the bedroom tax case, the court delivered its judgments in the A case cited in para 40 above. The case concerned not welfare benefits but the governments refusal, partly on grounds of cost, to exercise its power to require the NHS in England to provide free abortion services to women usually resident in Northern Ireland. One of the arguments on behalf of the women was that the effect of its refusal was to discriminate against them in the enjoyment of their rights under article 8 of the Convention. I gave a judgment, with which Lord Reed and Lord Hughes agreed, in which I rejected the argument. Lady Hale and Lord Kerr gave judgments in which they upheld it. It was in the course of my judgment, in para 33, that I cited the judgment of Lord Mance in the Wales case and asserted it to have become clear that, of the four aspects of an inquiry into justification under the Convention of the effect of a measure of economic or social policy, the fourth, relating to a fair balance, fell to be answered by the court for itself and not by reference to whether it was manifestly without reasonable foundation. We may put aside consideration of whether the government decision impugned in the A case was of a character, unlike its rules of entitlement to welfare benefits, which made my suggested approach to its justification sound in law. For, even if so, I expressed myself too widely. Even though none of the other members of the court, including those in dissent, took issue with what I said, I take sole responsibility for it. Probably also emboldened by Lady Hales observations in the first benefit cap case, I reached too quickly for the observations of Lord Mance in the Wales case. For by then there was and there still remains clear authority both in the Humphreys case and in the bedroom tax case for the proposition that, at any rate in relation to the governments need to justify what would otherwise be a discriminatory effect of a rule governing entitlement to welfare benefits, the sole question is whether it is manifestly without reasonable foundation. Let there be no future doubt about it. How does the criterion of whether the adverse treatment was manifestly without reasonable foundation fit together with the burden on the state to establish justification, explained in para 50 above? For the phraseology of the criterion demonstrates that it is something for the complainant, rather than for the state, to establish. The rationalisation has to be that, when the state puts forward its reasons for having countenanced the adverse treatment, it establishes justification for it unless the complainant demonstrates that it was manifestly without reasonable foundation. But reference in this context to any burden, in particular to a burden of proof, is more theoretical than real. The court will proactively examine whether the foundation is reasonable; and it is fanciful to contemplate its concluding that, although the state had failed to persuade the court that it was reasonable, the claim failed because the complainant had failed to persuade the court that it was manifestly unreasonable. Issue 8: Content of UNCRC rights Article 3 of the UNCRC provides: 1. In all actions concerning children, whether undertaken by courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. A move is afoot, exemplified by Lord Kerrs judgment in the first benefit cap case at paras 247 to 257, for UK courts to treat the UNCRC, which the UK has ratified, as being, exceptionally, part of our domestic law. At present, however, it forms no part of it. What does the concept of the best interests of the child in article 3.1 encompass? In the Mathieson case, at para 39, this court approved a suggestion which Lord Carnwath had made in para 105 of the first benefit cap case to the effect that authoritative guidance was to be found in para 6 of General Comment No 14 (2013) of the UN Committee on the Rights of the Child. There the committee had suggested that the concept had three dimensions: (a) a substantive right of the child to have his or her best interests assessed as a primary consideration when different interests are being considered in order to reach a decision on the issue at stake; (b) an interpretative principle, irrelevant to the present appeals; and importantly; (c) a rule of procedure that, whenever a decision is to be made that will affect an identified group of children, the decision making process must include an evaluation of the possible impact of the decision on them. In the light in particular of the Mathieson case, the government cannot deny that the committees analysis is authoritative guidance in relation to the dimensions of the concept in article 3.1. It can submit only, and correctly, that the guidance is not binding even on the international plane and that, while it may influence, it should, as mere guidance, never drive a conclusion that the article has been breached. The UNCRC also provides: (a) under article 26(1) that States Parties shall recognize for every child the right to benefit from social security and shall take the necessary measures to achieve the full realization of this right in accordance with their national law; (b) under article 27(1) that States Parties recognize the right of every child to a standard of living adequate for the childs physical, mental, spiritual, moral and social development; and (c) under article 27(3), having at (2) cast upon parents the primary responsibility for securing living conditions necessary for their childs development, that States Parties, in accordance with national conditions and within their means, shall take appropriate measures to assist parents to implement this right and shall in case of need provide material assistance particularly with regard to nutrition, clothing and housing. Issue 9: Relevance of UNCRC rights The ECtHR has made it clear that, where relevant, the content of another international convention, in particular one relating to human rights such as the UNCRC, should inform interpretation of the Convention: Neulinger v Switzerland (2010) 54 EHRR 1087, paras 131 and 132. It follows that, when relevant, the content of the UNCRC can inform inquiry into the alleged violation of article 14 of the Convention, when taken with one of its substantive rights. But in what circumstances is any breach of article 3.1 of the UNCRC relevant to an alleged violation of article 14? The question was addressed by each of the five members of this court in the first benefit cap case, in which the suggested violation of article 14 lay in the caps alleged discrimination against women in the enjoyment of their right to possession of welfare benefits under article 1 p 1. The answers were as follows: (a) Lord Reed assumed, rather than held, in para 88 that the cap breached article 3.1 of the UNCRC but held at para 89 that such breach was irrelevant to the alleged discrimination against women. (b) Lord Carnwath held in paras 122 to 128 that the cap did breach the article but held in paras 125 to 131 that such breach was irrelevant to the alleged discrimination. (c) Lord Hughes held in para 146 that any such breach was irrelevant to the alleged discrimination and in paras 148 to 155 that in any event the cap did not breach the article. (d) Lady Hale held in para 224 that any breach of the article was relevant to the alleged discrimination and in paras 226 to 229 that the cap did breach it. (e) Lord Kerr, like Lady Hale, held in para 262 that the cap did breach the article and in paras 263 to 268 that the breach was relevant to the alleged discrimination. In the present case the complaint of discrimination differs from the complaint in the first benefit cap case. The adult victims of the alleged discrimination are now cast not merely as women but as lone parents of children below school age. Moreover these children are now cast as further victims of it in their own right. And, although the lone parents repeat their complaint of discrimination in the enjoyment of their rights under article 1 p 1 of the Convention, both they and their children now complain of it in relation to the enjoyment of their respective rights to respect for their family life under article 8. In explaining in the first benefit cap case that a breach, if any, of article 3.1 was irrelevant to the alleged discrimination, Lord Reed, Lord Carnwath and Lord Hughes each stressed in the paragraphs cited above that in their view the alleged discrimination could not be said to be directed against children. It is clear that the government cannot import their reasoning into the present proceedings. Equally it undertakes a mammoth task in maintaining the argument that, in setting the terms of the revised cap, it was not taking an action concerning children within the meaning of article 3.1. If valid in relation to the revised cap, the argument would have been valid in relation to the original cap. But it was rejected by Lord Carnwath, Lady Hale and Lord Kerr; and it was specifically upheld neither by Lord Reed nor by Lord Hughes. In para 107 Lord Carnwath referred further to General Comment No 14, namely to para 19 in which the committee explained that the duty under article 3.1 applies to all decisions on the part of public authorities which directly or indirectly affect children. Insofar as in the present appeals the children themselves claim a violation of rights of their own under article 14, taken with article 8, their rights should be construed in the light of the UNCRC as an international convention which identifies the level of consideration which should have been given to their interests before subjecting their households to the revised cap. But can the lone parents themselves also claim that their own rights under article 14, taken with article 8, must be construed in the light of the provision in the UNCRC for consideration of their childrens interests? The interests of the lone parents in play in the present appeals are indistinguishable from the interests of their children below school age. Their claim is as parents: so, without their children, it would not exist. Indeed their claim is as lone parents: so responsibility for their children in effect rests solely upon them. And their claim is to defend furtherance of their family life from the effects of a cap on benefits specifically computed by reference to the needs of their children and themselves taken together. Never more apt than to the present appeals is the observation of Lady Hale in Beoku Betts v Secretary of State for the Home Department [2008] UKHL 39, [2009] AC 115, in para 4 that: The right to respect for the family life of one necessarily encompasses the right to respect for the family life of others, normally a spouse or minor children, with whom the family life is enjoyed. The claims of all the appellant cohorts under article 14, taken with article 8, therefore require the court to proceed to assess whether, in setting the terms of the revised cap, the government breached article 3.1 of the UNCRC. Were the court to hold that it had done so, what would the effect of it be? The overarching inquiry is whether its decision not to exempt the appellant cohorts from the cap was manifestly without reasonable foundation. As McCombe LJ observed, albeit more forcefully, in para 178 of his dissenting judgment in the DA case, a foundation for the decision not made in substantial compliance with article 3.1 might well be manifestly unreasonable. Issue 10: Breach of UNCRC rights In deciding upon the terms of the revised cap, did the government have regard, as a primary consideration, to the best interests of children below school age of lone parents and did it evaluate the possible impact of its decision upon them? In answering this question within its overarching inquiry into the alleged violation of Convention rights, the court can, without constitutional impropriety, have regard to Parliamentary materials which explain the background to the governments decision and in particular its policy objectives: Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, [2004] 1 AC 816, paras 61 to 66. It is worthwhile to preface an attempted answer to the question by adverting to two features of the Parliamentary discussion of the Bill which introduced the original cap, both briefly noted by Lord Reed in his judgment in the first benefit cap case at paras 29 and 40. (a) In May 2011 Ms Buck MP tabled an amendment before the Public Bill Committee of the House of Commons to the effect that households should be exempt from the cap if childcare costs outweighed earnings. She referred in particular to lone parents with four or five children, of whom one was aged under five. The government opposed the amendment, which Ms Buck withdrew. (b) In November 2011 the Lord Bishop of Ripon tabled an amendment before the Lords Grand Committee that lone parents of children aged under five should be exempt from the cap. He said: The exemption of lone parents with children under five is particularly important. The current system recognise[s] that those additional commitments make it hard for them to move into work and, indeed, recognise[s] that they are not expected to seek work it seems unreasonable to place a cap on the benefits that they should receive when we acknowledge that they should not be put under pressure to seek work. The government opposed the amendment on the basis that encouragement to work did not equate to a requirement to work and that there had to be a limit to the amount of a households benefits. In the end the bishop did not press his amendment. On 8 September 2015, following presentation to Parliament of the Bill which included provision for the revised cap, the government published its Memorandum to the Joint Committee on Human Rights, in which, pursuant to its duty under section 19 of the 1998 Act, it stated that in its view the provision was compatible with Convention rights. In the memorandum the government accepted in para 18 that the provision fell within the ambit of article 1 (a) p 1 and arguably of article 8; (b) noted in para 19 the decision of this court in the first benefit cap case; (c) accepted in para 19 that 60% of those capped under the original scheme had been lone parents; (d) contended in para 21 that, to the extent that the revised cap impacted upon them disproportionately to its impact on others, its impact was justified in the interest of the economic well being of the UK and of incentivising people to work; and (e) claimed in para 77 that, in the light of this courts decision in the first benefit cap case, it had, in relation to the proposed revision of the cap, fully considered what it described as its obligations under the UNCRC because the best interests of children overall were promoted when their parents were in work and because work remained the surest route out of poverty. On 10 September 2015 Gingerbread made representations to the Public Bill Committee of the House of Commons in respect of the proposed revision of the cap. Its policy director said: Over 60% of people capped so far have been single parents; 70% of them have children under five and 34% have children under two the younger the child is when the parent is capped, the harder it is for them to get into work we really also need to be looking at the contradiction between the benefit cap and the conditionality policy that exists. If you are capping up to 20,000 single parents who have children under two, there is no childcare support available for that group at present. There is also a real shortage of childcare available, so there are really clear reasons why that group of single parents will not be able to go into work. [The governments] research, again, has shown that where those people who are capped do not find work, it is likely that 40,000 more children would be pushed into poverty. When we are looking at the benefit cap we need to look at the circumstances of the family and the age of the child. On 17 September 2015 Ms Thornberry MP, then the shadow minister of state for employment, tabled before the same committee an amendment to the Bill to the effect that the revised cap should not apply to persons responsible for the care of a child aged below two. The group proposed to be exempted was therefore close to the DA cohorts. But it was not identical in that Ms Thornberrys amendment appeared to exempt dual care parents as well as lone parents, although at one point in the discussion she seemed to suggest otherwise. In arguing for her amendment Ms Thornberry suggested that the original cap had overwhelmingly applied to people who were recognised within the benefits system itself as being unable to work. She referred to the evidence which the committee had heard a week earlier, including no doubt that of Gingerbread, and she explained that the narrow exemption which she proposed was for a group that was perhaps the most acutely vulnerable and the least able to change its circumstances. But the committee rejected the amendment by ten votes to five. Between November 2015 and February 2016 the House of Lords in debates and in committee considered in detail the provision for the revised cap. In summary (a) Baroness Lister suggested that it was not reasonable to expect a lone parent with a child aged under one to work. She suggested that the government had not properly assessed the best interests of different groups of children pursuant to its obligation under article 3.1 of the UNCRC. that (b) Baroness Manzoor suggested disproportionately affect single parents with a child aged under five. (c) Baroness Hollis suggested that lone parents with children aged under three were effectively out of the labour market. She tabled an amendment to exempt carers of children aged under nine months from the cap. lower cap would the But the amendment proposed by Baroness Hollis failed; and the government did not act on the various suggestions. Lord Freud on its behalf stressed the importance of the message that work pays and that households on benefits should not receive more than working households; and he declared that the way to address hard cases was by DHPs, to which the government would allocate 870m over the following five years. The governments Equality Analysis dated September 2016 in relation to the 2016 Regulations, like its IA dated August 2016, claimed that the government had taken the UNCRC into account. It stated that it was not in the best interests of children to live in workless households and referred to studies which concluded that children in such households exhibited greater behavioural problems from the age of seven and poorer academic attainment. It recognised that lone parents might find it hard to work as a result of childcare responsibilities but pointed out that measures of mitigation, in particular free childcare and DHPs, had been put in place. By a narrow margin I am driven to conclude that, in relation to its refusal to amend the 2006 Regulations so as to exempt the appellant cohorts from the revised cap, the government did not breach article 3.1 of the UNCRC in either of the relevant dimensions of its concept of the best interests of a child. The Parliamentary and other materials to which I have referred demonstrate that it did evaluate the likely impact of the revised cap on lone parents with young children; and that it did assess their best interests at a primary level of its overall consideration. This court must impose on itself the discipline not, from its limited perspective, to address whether the governments evaluation of its impact was questionable; nor whether its assessment of the best interests of young children was unbalanced in favour of perceived long term advantages for them at the expense of obvious short term privation. Issue 11: Conclusion on justification I am also driven to conclude that the governments decision to treat the appellant cohorts similarly to all others subjected to the revised cap was not manifestly without reasonable foundation. In this regard, for reasons which I will not rehearse, the DA cohorts have a stronger case than have the DS cohorts; but, again by a narrow margin, even the stronger case fails. The appellants have not entered any substantial challenge to the governments belief that there are better long term outcomes for children who live in households in which an adult works. The belief may not represent the surest foundation for the similarity of treatment in relation to the cap; but it is a reasonable foundation, in particular when accompanied by provision for DHPs which are intended on a bespoke basis to address, and which on the evidence are just about adequate in addressing, particular hardship which the similarity of treatment may cause. Disposal There has been no Convention related discrimination. The appeals must be dismissed. Had discrimination existed, the court would have proceeded to consider whether to make a declaration that the failure to include the appellant cohorts in the list of exemptions in the 2006 Regulations was incompatible with their Convention rights. A declaration is a discretionary remedy; and to decide whether to exercise the discretion would have precipitated substantial inquiry into the institutional propriety for this court to make a declaration in relation to decisions about entitlement to welfare benefits made by the government in Parliament following protracted debate. But it is this same crucial, if sometimes problematic, concept of institutional propriety which informs the test of justification, generous to the government, of a measure such as that of the revised cap; and it is therefore at that stage that, in relation to such a measure, the concept will usually play its part. Postscript These appeals were rightly brought. The arguments raised in them have been of such weight as to attract this courts most careful and sympathetic consideration; and they have led two members of the court to enter a powerful dissent from the majoritys dismissal of the appeals. On 12 March 2019, shortly prior to the delivery today of these judgments and long after our hearing of the appeals, the Work and Pensions Committee of the House of Commons published its report on The Benefit Cap, 24th Report of Session 2017 19, HC 1477. Although in form a study of the effect of the original as well as of the revised cap, the report inevitably focusses on the current, more severe, effects of the revised cap. It addresses, although in far greater detail, all the factors to which I have referred in paras 22 to 34 above under the heading Evidence; as well, of course, as many more relevant factors. In the report the committee calls on the government urgently to conduct a full audit of the policy behind the benefit cap; to reconsider the limits at which benefits are capped; and in particular to disapply the cap to those who, by reference to the conditions attached to the receipt of income support, are not yet expected to look for work. The fact that a committee of the House of Commons is at this present time calling for urgent review of the provisions of the revised cap would in my view have fortified a decision, had the need to make it been reached, that institutional propriety militated against the grant of a declaration of incompatibility at this stage: R (Nicklinson) v Ministry of Justice [2014] UKSC 38, [2015] AC 657, paras 113 118 (Lord Neuberger of Abbotsbury PSC). LORD CARNWATH: (with whom Lord Reed and Lord Hughes agree) I agree with Lord Wilson that the appeal should be dismissed, for the reason that the approach adopted by the government, even if in other respects meeting the tests for discrimination under article 14, was not, as he says, manifestly without reasonable foundation. However, having been a member of the majority in the related case of SG, I add some comments on the relationship between the two cases, and some remaining points of difference (or difference of emphasis). The benefit cap imposes a cap on the total amount of annual welfare benefits that a given household can receive. The legality of the previous scheme under the Welfare Reform Act 2012 was upheld by this court (by a majority) in R (SG) v Secretary of State for Work and Pensions [2015] 1 WLR 1449. Although the scheme was agreed to be discriminatory against women for the purposes of articles 14 and A1P1, it was held to be justified because (in the words of the headnote): the legislatures policy choice in relation to general measures of economic or social strategy, including welfare benefits, would be respected unless it was manifestly without reasonable foundation; that the view of the Government, endorsed by Parliament, that achieving the legitimate aims of fiscal savings, incentivising work and imposing a reasonable limit on the amount of benefits which a household could receive was sufficiently important to justify making the Regulations despite their differential impact on men and women, had not been manifestly without reasonable foundation. That to my mind is an accurate summary of the leading judgment of Lord Reed, agreed in terms by Lord Hughes, and implicitly by myself. Furthermore the majority held that the case was not strengthened by reference to article 3.1 of the UNCRC. It is convenient again to refer to the summary in the headnote: even on an assumption (per Lord Reed and Lord Hughes JJSC) or an acceptance (per Lord Carnwath JSC) that the Secretary of State had failed to show how the Housing Benefit Regulations 2006 were compatible with the article 3.1 obligation to treat the best interests of children as a primary consideration, such failure did not have any bearing on whether the legislation unjustifiably discriminated between men and women in relation to their enjoyment of A1P1 property rights In this respect also, there was full agreement between the members of the majority on the legal principles to be applied, articulated most fully by Lord Reed (at paras 78 91). In short, while article 3.1 is not a source of substantive rights or duties under the European Convention, it may where appropriate be taken into account as an aid to interpretation of those rights or duties. Although we differed as to whether article 3.1 had been in fact been complied with, we were agreed that it had no relevance to the issue then before us of discrimination under article 14 in relation to the A1/P1 property rights of women. The benefit cap legislation was politically controversial and subject to vigorous debate in Parliament, directed to both the principle and the detail. The difficulty posed by the legal issues in that appeal is apparent from the division of opinion within the court, and from the time taken to reach a decision (almost 11 months). However, it must be taken as settling the issues of principle, absent a challenge to the reasoning of the majority, some material change in the relevant legislation or the circumstances of the individual cases, or some new argument of substance which was not addressed. The present challenge is to the amended scheme under the Welfare Reform and Work Act 2016. By section 8 of the 2016 Act, the applicable cap was reduced from 26,000 per annum for all families to 23,000 for families living in Greater London, and 20,000 for families living outside London (the Revised Benefit Cap). A significant change is that the amount of the cap is embodied in primary legislation, rather than regulations, as is the list of benefits to which it applies, including child benefits and child tax credit (section 96(10)). It is rightly not suggested that these aspects of scheme, as now incorporated in primary legislation, are in themselves open to review or incompatible with the Convention. To that extent the scope for challenge has been reduced. The 2012 Act gave the Secretary of State the power to make detailed provision for the implementation of a benefit cap by way of regulations. Under section 96(4)(c) of the 2012 Act, this includes a discretion to make exceptions to the application of the cap. The Benefit Cap (Housing Benefit) Regulations 2012 (SI 2012/2994) provide, inter alia, that adults who are entitled to working tax credit are not subject to the benefit cap. In the case of a lone parent, receipt of working tax credit requires that he or she engages in work for at least 16 hours per week. It is the regulations which are the focus of the present attack. In summary the appellants argue that their parental responsibilities, combined with the lack of adequate care support, make it in effect impracticable for them to achieve the 16 hours of work necessary to qualify for exemption. It is argued that failure to make an appropriate exception for them under the regulations involved unjustified discrimination contrary to article 14 of the ECHR. Apart from the change in legislation, there appear to be three main differences from the arguments as presented in the earlier cases: i) Article 8 Particular emphasis has been placed on article 8 of the Convention (rather than article 1 of Protocol 1 (A1P1) which was the main focus of attention in SG), and its relevance to the best interests test under the UNCRC; ii) Status The focus has shifted to the so called Thlimmenos principle, and the groups allegedly discriminated against have been recalibrated and re defined in various ways: (DS appellants) (i) lone parents, (ii) lone parents with children under the age of five (iii) children of parents in groups (i) or (ii); (DA appellants) (iv) lone parents with children under two (v) children of such parents. iii) Test for justification It is argued that in the light of more recent Supreme Court authority, the manifestly without reasonable foundation criterion applied in SG, has been superseded by a broader fair balance test. I will consider each of these points in turn before explaining my conclusions in the present appeals. (i) Article 8 As I noted in SG (para 99) article 8 had been mentioned by Mr Wise in his printed case, not as a free standing claim, but as an alternative route into article 14, or as supporting his best interests claim in respect of the children under article 3.1 of the UNCRC. I noted that article 8 was not relied on by Mr Drabble QC, then appearing for the Child Poverty Action Group. I was not at that time persuaded that either of Mr Wises formulations adds anything of substance to the claim based on A1P1. It may be in retrospect that we should have given more attention to this aspect of Mr Wises submissions. In any event, there is no doubt that the main weight of the argument at that time, and the reasoning of the majority, were directed to A1P1 rather than article 8. Lord Hughes in particular drew a clear distinction between the two in the particular context of the best interests principle under article 3.1 of the UNCRC: 146. If the rights in question are the A1P1 property rights of women, and their associated derivative right not to be discriminated against in relation to those rights, it is an impermissible step further to say that there is any interpretation of those rights which article 3 of the UNCRC can inform. In the case of article 8, the childrens interests are part of the substantive right of the parent which is protected, namely respect for her family life. In the case of A1P1 coupled with article 14, the childrens interests may well be affected (as here), but they are not part of the womans substantive right which is protected, namely the right to be free from discrimination in relation to her property. There is no question of interpreting that article 14 right by reference to the childrens interests This approach is also consistent with established authority on the application of the best interest principle in the context of article 8. As Lord Hodge said for the court in Zoumbas v Secretary of State for the Home Department [2013] UKSC 74; [2013] 1 WLR 3690, para 10: The best interests of a child are an integral part of the proportionality assessment under article 8 of the Convention. Accordingly the present appeal has required us to look in more detail at the application of article 8. As to the application of article 14 in connection with article 8, it is unnecessary to repeat Lord Wilsons review of the relevant Strasbourg authorities under his issue 1. In agreement with him I am satisfied that the present claims fall within the ambit of article 8 so as to engage the issue of discrimination under article 14. I also agree with him that in that context the best interests principle under article 3.1 is potentially relevant. I have more difficulty with the issue of status to which I now turn. Identifying the relevant group or status (ii) Although the Thlimmenos principle is now well established, it does not in my view materially change the nature of the inquiry from that undertaken in SG. In particular it does not diminish the need under article 14 to show that the alleged discrimination arose from a relevant status, and to identify a relevant comparator with whose treatment that of the claimant group can be compared (Lord Wilsons issues 2 and 4). In Thlimmenos v Greece the applicant was a Jehovahs Witness who had been convicted of insubordination under the Military Criminal Code for refusing to wear a military uniform at a time of general mobilisation. He was subsequently refused appointment as a Chartered Accountant under rules which excluded those convicted of serious crimes. He argued that the lack of an appropriate exception for those whose conviction was due to religious considerations constituted unlawful discrimination under article 14 taken with article 9 of the Convention. The argument was accepted by the Grand Chamber. Having noted that article 14 had hitherto been applied to differential treatment of persons in analogous situations without objective and reasonable justification, the court continued: However, the court considers that this is not the only facet of the prohibition of discrimination in article 14. The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different. (para 44) Although the courts formulation of the principle does not refer to status as a criterion, it is apparent from the preceding discussion that this point was not in issue. In that respect the applicants argument as recorded by the court relied on his position as a Jehovahs Witness: The class of persons to which the applicant belonged, namely male Jehovahs Witnesses whose religion involved compelling reasons for refusing to serve in the armed forces, was different from the class of most other criminal offenders. The Governments failure to take account of this difference amounted to discrimination not tolerated by article 14 of the Convention taken in conjunction with article 9. (para 34) That aspect of his case was not challenged. It is also clear that an important feature of the case was the close link between the alleged discrimination and the protected religious rights under article 9. The Thlimmenos formulation has been often repeated and is not in doubt. However, there are few illustrations of its practical scope and application. An example is EB v Austria (Application No 31913/07, judgment of November 7, 2013), in which the First Section found that the principle required an exception to the general rule that convictions remained on the persons record even if the offence in question had since been abolished. In that case, there was a violation of article 14 taken with article 8 as convictions for homosexual acts, later found to be incompatible with the ECHR, remained on the applicants criminal records. We were referred to no Strasbourg case in which the principle has been applied in the context of social welfare legislation such as is in issue in this case. Although there is no reason to exclude its operation in this context, the absence of successful cases in Strasbourg may reflect the courts recognition in this context of the need for national rules to be framed in broad terms (SG para 15 per Lord Reed citing Carson v United Kingdom (2010) 51 EHRR 13 para 62), and the consequent difficulty of challenging the treatment of particular groups. I must accept (as Lord Wilson says: para 39) that in R (Stott) v Secretary of State for Justice the majority of this court adopted a relatively broad view of the concept of status. On that basis I would agree that lone parents can properly be regarded as having a status within the Thlimmenos principle. In agreement with Lord Hodge, I am much more doubtful as to the appropriateness of the other narrower forms of status relied on in this case. In particular I find it hard to see any basis for defining the parents and the children as distinct groups; the adverse effects are on the families, in which the interests of parents and children are jointly affected. However, in the absence of any directly relevant Strasbourg authority on these points, it is difficult to reach a concluded view. Like Lord Hodge I am content to assume for present purposes that the status requirement is satisfied in respect of each such group. The relevant issues therefore are whether those groups or sub groups are sufficiently different from other comparable groups to have required separate treatment under the Thlimmenos principle to avoid interference with their article 8 rights, and whether a failure in that regard can be justified. (iii) Test for Justification The argument that a less demanding test should be applied than manifestly without reasonable foundation (or its hard to escape acronym MWRF) was most fully articulated by Mr Wise QC for DA. For the reasons given by Lord Wilson (issue 7) I agree with him that this argument must be rejected, and that the application of the MWRF should be regarded as beyond future doubt. However, since this view is not accepted by all the members of the court, I feel it necessary to add some comments of my own on Mr Wises arguments. He started from the four stage approach as summarised by Lady Hale in R (Tigere) v Secretary of State for Business, Innovation and Skills [2015] UKSC 57; [2015] 1 WLR 3820, para 33: (i) does the measure have an legitimate aim sufficient to justify the limitation of a fundamental right; (ii) is the measure rationally connected to that aim; (iii) could a less intrusive measure have been used; and (iv) bearing in mind the severity of the consequences, the importance of the aim and the extent to which the measure will contribute to that aim, has a fair balance been struck between the rights of the individual and the interests of the community? He accepted that the MWRF test was adopted by this court in Humphreys v Her Majestys Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545 (alleged discrimination in respect of state benefits), following the ECHR decision in Stec v United Kingdom (2006) 43 EHRR 1017, and in other more recent cases. However, in those cases, as he submitted (in his written case) the Supreme Court did not distinguish between the different elements of the justification analysis and, in particular, did not distinguish between the questions whether a discriminatory measure (i) pursued a legitimate aim or aims and (ii) was proportionate in the sense of striking the requisite fair balance. At the latter stage, he argued, MWRF has no application. For this he relied on what was said by Lord Mance, with the agreement of the majority of the court in the Welsh Asbestos case, and repeated in R (A) v Secretary of State for Health (as Lord Wilson has explained: paras 61, 64). With respect to those members of the court who think otherwise, it is clear in my view that the MWRF test remains the appropriate test in the present context. There is nothing in the later cases to support a departure from the position, as accepted by all parties, and adopted by the court in the SG case. It is useful to begin by reference to what was said by Lady Hale (with the agreement of the rest of the court) in the Humphreys case itself: 17. The phrase manifestly without reasonable foundation dates back to James v United Kingdom (1986) 8 EHRR 123, para 46, which concerned the compatibility of leasehold enfranchisement with article 1 of the First Protocol. In the Stec case 43 EHRR 1017, the court clearly applied this test to the states decisions as to when and how to correct the inequality in the state pension ages, which had originally been introduced to correct the disadvantaged position of women. Similarly, the decision to link eligibility for the reduced earnings allowance to the pension system was reasonably and objectively justified, given that this benefit is intended to compensate for reduced earning capacity during a persons working life (para 66). The Grand Chamber applied the Stec test again to social security benefits in Carson v United Kingdom (2010) 51 EHRR 369, para 61, albeit in the context of discrimination on grounds of country of residence and age rather than sex. 18. The same test was applied by Lord Neuberger of Abbotsbury (with whom Lord Hope of Craighead, Lord Walker of Gestingthorpe and Lord Rodger of Earlsferry agreed) in R (RJM) v Secretary of State for Work and Pensions [2009] 1 AC 311, which concerned the denial of income support disability premium to rough sleepers. Having quoted para 52 of the Stec case he observed, at para 56, that this was an area where the court should be very slow to substitute its view for that of the executive, especially as the discrimination is not on one of the express, or primary grounds. He went on to say that it was not possible to characterise the views taken by the executive as unreasonable. He concluded at para 57: The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable. 19. Their Lordships all stressed that this was not a case of discrimination on one of the core or listed grounds and that this might make a difference. In R (Carson) v Secretary of State for Work and Pensions; [2006] 1 AC 173, both Lord Hoffmann and Lord Walker drew a distinction between discrimination on grounds such as race and sex (sometimes referred to as suspect) and discrimination on grounds such as place of residence and age, with which that case was concerned. But that was before the Grand Chambers decision in the Stec case . It seems clear from Stec, however, that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the manifestly without reasonable foundation test in the context of state benefits. The same principles were applied to the sex discrimination involved in denying widows pensions to men in Runkee v United Kingdom [2007] 2 FCR 178, para 36. If they apply to the direct sex discrimination involved in the Stec and Runkee cases, they must, as the Court of Appeal observed at para 50, apply a fortiori to the indirect sex discrimination with which we are concerned As that passage shows, authority at the highest level in this country for the application of the MWRF test goes back at least to the House of Lords in RJM. Also noteworthy is her reference to the distinction drawn by the House of Lords between the core grounds such as race and sex, and other grounds; and her acceptance that, even in the core context of sex discrimination, the normally strict test for justification gives way to the MWRF test in the context of state benefits. In the SG case itself the discrimination was said to be against women, and thus within one of the core grounds. As one moves further away from those concepts to the more distant groups identified in the present case, there is still less reason to depart from the MWRF approach. SG was argued in April 2014 but not decided until March 2015. As already noted, there was no disagreement between the parties as to the application of the MWRF test. By that time the decision in the Welsh Asbestos case had been given (and was mentioned by Lady Hale: para 209); but it was not treated by the majority, or indeed the parties, as requiring any qualification of the MWRF test. Nor was there any such departure or qualification in the Tigere case itself (decided in July 2015). The case concerned discrimination in relation to eligibility for student loans. There was a disagreement between the members of the court over the appropriate test on the facts of that case, but not on the correctness of the MWRF as applied in the cases of Humphreys or SG. Lords Sumption and Reed would have applied the MWRF test. Lord Hughes concluded that the appeal should be allowed whatever the test. Lady Hale (paras 27 29, with the agreement of Lord Kerr) referred to those judgments without adverse comment, saying education is rather different. She went on to cite the Strasbourg decision in Ponomaryov v Bulgaria (2011) 59 EHRR 799, including in particular to observation of the court that unlike some other public services, education is a right that enjoys direct protection under the Convention . As Lord Wilson says (para 63), the issue was in any event put beyond reasonable argument by the seven justice court (including Lady Hale and Lord Mance) in the bedroom tax case (R (MA) v Secretary of State for Work and Pensions). Giving the leading judgment (with the agreement on this point of all members of the court), Lord Toulson noted the submission that, because in Humphreys the unsuccessful appellant had not argued for anything other than the Stec test, it was appropriate to ask whether there was good reason to depart from what Lady Hale had said (para 31). As he then pointed out (para 32): The fundamental reason for applying the manifestly without reasonable foundation test in cases about inequality in welfare systems was given by the Grand Chamber of the European Court of Human Rights in Stec, para 52. Choices about welfare systems involve policy decisions on economic and social matters which are pre eminently matters for national authorities. He quoted the relevant passage from Lady Hales judgment in Humphreys and noted her comment that the less stringent test did not mean that the justifications put forward should escape careful scrutiny. Having commented in detail on the parties submissions, and the more recent Strasbourg authorities, he concluded by simply affirming what had been said in that passage (para 38). In her judgment in the present case, as I understand it, Lady Hale does not seek to question the application of the MWRF principle in these appeals, but suggests that the court may need to return to it in the future. I cannot with respect agree. She accepts that the decision in MA was reached following a wholesale attack on the MWRF principle, but observes that there was no discussion of a more nuanced approach along the lines suggested by Lord Mance in the Welsh Asbestos case. I do not see that this in any way diminishes the authority of the decision. It is to be noted that, in spite of the presence of Lord Mance, and although the Welsh Asbestos case was included in the list of authorities cited, neither he nor anyone else seems to have regarded it as relevant in that context. That may well have been because the context in which the issue was considered was quite different from MA (and from the present case): not social security benefits, but compensation for asbestos related disease; and not article 14 discrimination, but interference with property rights under A1P1. Indeed in Welsh Asbestos there had been no reference to Stec or Humphreys in either the judgment or in the submissions. Lord Kerr goes further and would hold, in agreement with Mr Wises submission, that the MWRF test should not be applied to the final stage of the proportionality analysis. Although he does not in terms explain how he feels able to disregard the authority of MA, he emphasises that the technique applied to that question by the national court is to be distinguished from that applied in Strasbourg at the supra national level. However, the fact that the Strasbourg court uses the MWRF test when applying the margin of appreciation and that the same margin of appreciation does not necessarily apply at the national level does not entail that domestic courts cannot also use the MWRF test. It is being used as a means of allowing the political branches of the constitution an appropriately generous measure of leeway when assessing the proportionality of measures concerning economic and social policy. The seven justice decision in MA surely settled the point for the foreseeable future. Conclusion In conclusion I adopt with respect what was said by Sir Patrick Elias in the Court of Appeal in DA (which related solely to the group said to be constituted by lone parents with children aged under two): No one should underestimate the very real hardships caused by the imposition of the cap, and the particular circumstances of the individual claimants in this case bear witness to the harsh circumstances in which they and those similarly placed live, as does detailed evidence from Shelter. But they are difficulties which have to be borne by all non working households to a greater or lesser extent; they are not unique to this cohort, nor does the cap necessarily bear more harshly on them. There is no linear relationship between the financial impact on families caused by the cap and the age of the children. Indeed, it is obvious that households with a greater number of children will typically suffer more, whatever the age of their children, simply because the parent or parents have more mouths to feed and are likely to need larger accommodation . It follows that the proper focus in this case must be whether the problems faced by the particular cohort of parents in securing effective and affordable child care are sufficiently different from problems facing other lone parents to entitle the court to conclude that it is manifestly without reasonable foundation to fail to exempt them from the operation of the cap (paras 105 106) Although the number of possible groups has been extended in the appeals as they have come to this court, the thrust of that passage remains valid. It is necessary to distinguish between the general impact of the cap, which is undoubtedly harsh, but is inherent in the scheme as approved by Parliament, and particular effects on an identifiable group which can properly be the subject of a distinct claim under article 14. Applying that approach, I ask whether there are factors in the present cases which require the court to reach a different overall conclusion from that reached in SG. I have noted that in some respects the task facing the appellants is more difficult. The amount of the cap, and the benefits to which it applies (including child benefit) are enshrined in primary legislation, which is admittedly not open to challenge. Although I have accepted that the various groups identified by the claimants can be regarded as meeting the status requirement for the purposes of article 14, they are far from the core grounds to which special protection is given under that article, and in relation to which the court should be especially slow to substitute its view for that of the executive (see para 113 above, citing RJM para 57). On the other side, I have accepted that, in contrast to the position in SG, the claimants are able to pray in aid the best interests principle under article 3.1 of the UNCRC. However, in that respect the extracts from the Parliamentary debates quoted by Lord Wilson show that careful consideration was given, not only by the executive, but also by Parliament, to the extent to which further exceptions should be enacted, and in particular to the interests of the children potentially affected. I agree with him that it has not been shown that the failure to enact further exemptions involved any breach of that principle. My contrary conclusion on that issue in SG was narrowly based on the deficiencies in the Secretary of States evidence on this aspect (paras 110 112, 127 128), and has no relevance to the present appeals. Overall I agree with Lord Wilson that the approach ultimately adopted by the executive, with the support of Parliament, was not manifestly without reasonable foundation, and that the appeals must accordingly be dismissed. As a final comment, and without disrespect for the care and skill with which the cases have been presented to the court, I observe that the dangers of departing from the restrictive approach laid down by Lord Toulson in MA are amply demonstrated by the experience of this appeal. We have been faced with detailed submissions based on conflicting factual and statistical evidence, much of it produced for the first time in this court. Some of this evidence has come in support of submissions from interveners. Their experience of the practical implications of the legal issues can be of great value, but the court must be careful to ensure that such interventions do not lead to the introduction of new evidence which has not been fully tested, and which cannot be properly tested within the limitations of this courts proper function. At times it has seemed as though the court were being invited to take on the task of a Parliamentary Select Committee, undertaking a review of the policy and factual basis of the legislation. That is not our role. LORD HODGE: (with whom Lord Hughes agrees) I agree with Lord Wilson that the appeals should be dismissed for the reasons which he gives. I wish to add only one qualification to my agreement and that relates to the question of status. In this regard I share the doubts which Lord Carnwath expresses on this issue in para 108 of his judgment. I also agree with Lord Carnwaths view on justification (the MWRF test) in paras 110 118 of his judgment, which tallies with that of Lord Wilson. As Lord Kerr states, the precise reason why the ECtHR adopted the MWRF test does not apply to the domestic court. But it is open to a domestic court to adopt that test in relation to socio economic policy decisions of the executive in recognition of the institutional constraints on and the constitutional role of the judiciary. That is what both the House of Lords and the Supreme Court have done in the cases of R (RJM), Humphreys, SG and MA, as Lord Carnwath demonstrates in his judgment. For the purposes of these appeals I am content to assume that each of the claimants has the required status to mount a challenge under article 14 of ECHR. But this appeal, like the appeal which this court heard in R (Stott) v Secretary of State for Justice [2018] UKSC 59; [2018] 3 WLR 1831, raises questions on the boundaries of other status in article 14, a subject on which there is, as yet, little clarity. Some may argue that the requirement of status is not an important hurdle for a claimant to overcome and that the Convention requires the state to justify any failure to treat differently people whose situation is relevantly different. But as national rules on social security benefits are required to be expressed in broad terms which will affect different people differently, the lack of clarity as to the entitlement of groups and sub groups to challenge is a mischief. I do not therefore wish to endorse the view that each of the cohorts of claimants has the necessary status. In these appeals, the DA appellants assert a status as lone parents of children aged under two and as children aged under two of lone parents. The adult DS appellants assert a status as either lone parents or, as a fall back, as lone parents with children aged under five. The children who are DS appellants assert a status as children of lone parents or, as a fall back, as children aged under five of lone parents. Thus, the court faces the question whether lone parents of children of any age, lone parents of children aged under five, lone parents with children aged under two, and their respective children each enjoy a separate status under article 14. When one considers an arrangement which requires someone in a household to work for a minimum number of hours per week in order to escape the benefit cap, it is not difficult to see that a lone parent household is in a different situation from a two parent household. Indeed, the government recognizes that difference by setting a lower minimum number of hours of work per week for the lone parent household. But, as Lord Wilson points out, there will be many within this cohort of lone parents whose children are all of school age. It is, as he states (para 45), a simpler task for the government to justify the requirement that a lone parent with children all of school age should work at least 16 hours per week to escape the benefit cap than it is to justify that requirement for lone parents with children under school age. When children are under school age, a lone parents ability to work at least 16 hours per week is dependent on the availability of the support of others in child care. Lone parents with babies and toddlers can be expected to have greater difficulty in working those hours without such childcare support. But where does one draw the line or lines? Is there not a sliding scale? The governments rules on the availability of financial support for childcare supports the view of the policy director of Gingerbread: the younger the child is when the parent is capped, the harder it is for them to get into work (see Lord Wilsons judgment para 83 above). But the age of the youngest child is not the only variable which influences how hard it is for a lone parent to obtain work. The availability of part time work, the proximity of family or friends who can provide child care, and the availability and funding of childcare facilities are equally important variables. Ill health and other adverse circumstances of the parent or children in a large family may militate against a lone parents ability to work, regardless of the age of the youngest child. Looking more broadly, the difficulty in escaping from the benefit cap is only one feature of the cap. Other circumstances are also relevant to the burden which the cap imposes on parents. As Sir Patrick Elias stated in his leading judgment in the Court of Appeal (para 105), there is no linear relationship between the age of the children and the financial impact on families caused by the cap. The greater the number of dependent children of whatever age there is within a household, the more mouths there are to feed and larger is the accommodation that the family needs. I am left with some doubt as to whether the age of a lone parents youngest child is the basis for giving the parent and child a status for the purpose of article 14 in the circumstances of this challenge. The people with the strongest case for having their circumstances recognised as giving rise to a status, it seems to me, are the DA cohort of lone parents with children aged under two and those children, having regard both to the degree of dependence of the child and the manner in which the government recognises that dependence both in the non provision of free child care to most two year olds (para 28 above) and in the conditions set for the receipt of income support which are graduated by reference to the age of the child (para 30 above). But I am content to leave the question of status to future dialogue with the ECtHR. LADY HALE: (dissenting) It is indeed regrettable that there is a variety of opinions among the judges who have considered these cases and accordingly that it has taken this court so long to produce its judgment: regrettable but not at all surprising. These are cases about equality and equality is the most complicated and difficult of all the fundamental rights, even without the delicate context of entitlement to welfare benefits. A professional lifetime of struggling with equality issues has persuaded me that some degree of complexity is inevitable and we should not apologise for it. The law may be complicated and sometimes difficult to apply but for the most part it does not lack clarity. There is no difference of opinion between Lord Wilson and me as to the legal principles applicable: we disagree only on the application of the principle of justification to the facts of these cases. The delicacy arises because these are cases about equality in an area, not principally of social policy, but of economic policy. Constitutionally, economic policies are decided by those organs of government which are directly accountable to the people. The courts cannot make those decisions for them. But that does not mean that the courts have no role to play. In a constitution which respects and protects fundamental rights, it is the role of the courts to protect individuals from unjustified discrimination in the enjoyment of those fundamental rights. There are no no go areas. The courts might very well have declared that denying certain widows benefits to widowers was incompatible with the Convention rights, had the Strasbourg court not got there first: see Willis v United Kingdom (2002) 35 EHRR 547. More recently, this court has declared the denial of widowed parents allowance to a surviving parent who was not married to the deceased parent of their children incompatible with the Convention rights: see In re McLaughlin [2018] 1 WLR 4250. But those examples are more clear cut than these. Nor do they mean that the courts will not recognise that the government is both constitutionally and institutionally more competent than the courts to make the delicate judgments involved: see, for example, R (Hooper) v Secretary of State for Work and Pensions [2005] 1 WLR 1681. The argument before us now is very different from the argument which was before us in R (SG) v Secretary of State for Work and Pensions [2016] 1 WLR 1449, although that too concerned the benefit cap, albeit in its original and less draconian version. In SG the complaint was of indirect discrimination against lone parent women. It was indirect because the benefit cap applied equally to all lone parents, men and women. But the government acknowledged that it had a disproportionate impact upon women because the overwhelming majority of lone parents are women. The debate was about whether it could be justified and about the relevance of the United Kingdoms international obligations under the United Nations Convention on the Rights of the Child (UNCRC) to that question. A majority of this court concluded that the government had not complied with its obligation, under article 3.1 of UNCRC, to treat the best interests of the children concerned as a primary consideration. But a majority also concluded that this was not relevant to whether the indirect discrimination against women was justified. Although I disagreed with that conclusion, I found it completely understandable. The children of lone parents were hit equally hard by the benefit cap whether their parents were men or women. The relevance of their interests to the alleged sex discrimination was therefore questionable. Indeed, as I had said in Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545, a case alleging indirect sex discrimination in the rules governing entitlement to child benefit, which did not allow the benefit to be split between shared carers (para 20): The reality is that the complaint would be exactly the same if it did not discriminate between the sexes. Mothers who share the care of their children for a shorter period each week while living on subsistence level benefits have exactly the same problem. The real object of the complaint is the discrimination between majority and minority shared carers. The reason why I disagreed with the majority in SG was that, in indirect discrimination, it is the measure itself, rather than its discriminatory impact, which has to be justified. (This is the case in domestic law and I see no reason why it should not also be the case in Convention law. If the discrimination is direct, of course, it is the discriminatory impact which has to be justified.) The best interests of the children affected were, in my view, undoubtedly relevant to the justification for the measure itself. But I agree with McCombe LJ, in the DA case, that SG does not give us the answer to the very different cases we now have to consider. In these cases, the basic complaints are of discrimination between, on the one hand, lone parents and their children and, on the other hand, dual parents and their children. In DA, it is narrowed down to a complaint of discrimination against lone parents with a child or children under the age of two and their children, whether compared with dual parents with children under two or other lone parents. Both complaints are easier to grasp than the complaints in SG. Article 14 of the European Convention on Human Rights (ECHR), as is well known, provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. In deciding complaints under article 14, four questions arise: (i) Does the subject matter of the complaint fall within the ambit of one of the substantive Convention rights? (ii) Does the ground upon which the complainants have been treated differently from others constitute a status? (iii) Have they been treated differently from other people not sharing that status who are similarly situated or, alternatively, have they been treated in the same way as other people not sharing that status whose situation is relevantly different from theirs? (iv) Does that difference or similarity in treatment have an objective and reasonable justification, in other words, does it pursue a legitimate aim and do the means employed bear a reasonable relationship of proportionality to the aims sought to be realised (see Stec v United Kingdom (2006) 43 EHRR 1017, para 51)? There is nowadays no doubt that entitlement to state benefits, even non contributory means tested benefits, is property for the purpose of article 1 of the First Protocol (A1P1), which protects property rights. Indeed, the benefit cap can be seen as a species of deprivation of property, as it takes away rights which the claimants would otherwise have. But, as Lord Wilson explains (para 36), benefits which enable a family to enjoy a home life underpinned by a degree of stability, practical as well as emotional, and thus the financial resources adequate to meet basic needs, in particular for accommodation, warmth, food and clothing are clearly one of the ways (modalities) whereby the state manifests its respect for family life and therefore fall within the ambit of article 8 (see Petrovic v Austria (2001) 33 EHRR 14 and Okpisz v Germany (2006) 42 EHRR 32). That we are concerned here, not only with the right to property, but also with the right to respect for family life is clearly relevant to the issue of justification. Status The governments argument that, because the claimants are women, who already have a status under article 14, they should not seek to shoehorn themselves into some other status (see para 39 above) is clearly unsustainable. Men also have a status under article 14, but they often qualify for some other status, such as being married or unmarried (In re G (Adoption: Unmarried Couple [2009] 1 AC 173), disabled or not disabled (R (RJM) v Secretary of State for Work and Pensions [2009] 1 AC 311) or serving an extended sentence of imprisonment or some other sentence (R (Stott) v Secretary of State for Justice [2018] 3 WLR 1831). In any event, the DA claimants are not complaining of discrimination because they are women. A male lone parent could have brought exactly the same complaint. And that also applies to the DS claimants (although they also revive the indirect sex discrimination claim in SG). Lone parent is clearly a status within the meaning of article 14. And I agree with Lord Wilson and Lord Kerr that it can be sub divided according to the ages of the children, and in particular that having a child or children under compulsory school age is obviously a status for this purpose, just as being a disabled child who needed more than 84 days hospital in patient care was a status in Mathieson v Secretary of State for Work and Pensions [2015] 1 WLR 3250 and indeed being a particular type of prisoner was a status in R (Stott) v Secretary of State for Justice, above. Differences or similarities in treatment I agree with Lord Wilson and Lord Kerr that the natural way to formulate the DA complaint is that these lone parents, and their children, should have been treated differently from other lone parents, and from dual parent families, because their situation is relevantly different from the situation of other families who are subject to the benefit cap: that is, discrimination within the meaning of Thlimmenos v Greece (2000) 31 EHRR 12. I also agree that the natural way to formulate the DS complaint is of Thlimmenos type discrimination, whether it extends to lone parents of children of up to school leaving age or only to lone parents of children under compulsory school age. As already explained, I think that any attempt to formulate the DS complaint as one of indirect discrimination against women would run into the same difficulties as were encountered in SG. In both cases, the natural comparator is a dual parent family with children of the same age. But this is complicated because dual parent families are, in at least two respects, less favourably treated than lone parent families: they are subject to the same cap on their benefits although they have one more adult mouth to feed; and they can only escape if between them they work outside the home for a total of 24 hours a week. Although this does not necessarily present insuperable problems, these do not arise if the DS complaints are limited to those with a child or children under five. Then both the DA and the DS claimants can compare themselves with lone parents who only have older children. It can immediately be seen that the situation of these claimants is relevantly very different from the situation of lone parents with children of school age. Lord Wilson has summarised this with great clarity in para 51 above. I would lay particular stress in what he says at para 51(a), which is worth repeating: that, in the case of a lone parent of a child below school age, in particular of a child below the age of two, it is contrary to the interests both of herself, of her child and of the family as a whole that she should in effect be constrained to work also outside the home. (My emphasis) It is dangerous for a judge to indulge in moral indignation but few mothers (and indeed few lone fathers) who have chosen to work also outside the home while their children are very young can have escaped being made to feel guilty that they may have been harming their childrens healthy development by doing so. We were brought up on John Bowlbys classic work, Child Care and the Growth of Love, the foundation of modern attachment theory. Children need to form stable and healthy attachments early in life in order to be able to lead healthy lives and form stable attachments of their own in the future. The foundation for this is stable, consistent and loving care from a parent or parents (or parent substitutes) who have bonded early with the child. No one who has sat as a judge in the family courts can have escaped hearing constant evidence about the risks of significant harm to children who are denied such healthy attachments. This is not to say that children cannot also thrive if their parents do go out to work. Such work may bring psychological as well as financial benefits to their parents, as well as to society, and this may also benefit their children. But for this the children need good, stable and consistent alternative care arrangements, preferably in familiar surroundings: children develop attachments to places as well as people. Such arrangements are in short supply and very expensive. The availability of help towards the cost of up to 15 hours child care for some of these children does not necessarily fit this bill. The government itself has recognised that parents of very young children should not be obliged to seek work outside the home, both by the conditions they have set for eligibility for state benefits and by the limits they have set for free child care. The psychological risks to children whose lone parents are obliged to work outside the home in order that their children may have enough to live on, whether or not this is in their childrens best interests, have to be set against the psychological risks to children who grow up in benefit claiming families, risks to which the government has attached so much importance. Of course, those risks will be less if the parent can find suitable work as well as suitable child care. She may be lucky enough, for example, to find some evening shifts in a very local supermarket and have a willing grandparent or neighbour to look after the children while she does so. But any lone parent who has small children will face considerable difficulties in finding suitable work which will fit in with her child care arrangements and also, in many cases, with her commitments to her other children. Justification The one matter on which the law may be open to debate relates to the standard by which the governments justification for discriminatory measures such as this is to be judged. In Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545, this court, in a judgment of mine with which the other Justices agreed, adopted the manifestly without reasonable foundation standard derived from the Strasbourg Grand Chamber decision in Stec v United Kingdom (2006) 43 EHRR 47, albeit with the qualification that this did not mean that the justification advanced should escape careful scrutiny (para 22). But that test was not disputed in Humphreys, any more than it had been in R (RJM) v Secretary of State for Work and Pensions [2009] 1 AC 311. However, Lord Kerr is surely right to question whether the test which the Strasbourg court will apply in matters of socio economic policy should also be applied by a domestic court. The Strasbourg court applies that test, not because it is necessarily the proper test of proportionality in this area, but because it will accord a wide margin of appreciation to the national authorities in deciding what is in the public interest on social or economic grounds. The national authorities are better able to judge this because of their direct knowledge of their society and its needs (see Stec, para 52). It does not follow that national courts should accord a similarly wide discretion to national governments (or even Parliaments). The margin of appreciation is a concept applied by the Strasbourg court as part of the doctrine of subsidiarity. The standard by which national courts should judge the measures taken by national governments is a matter for their own constitutional arrangements. Not only that, it has been noted that, in Stec, the Grand Chamber cited James v United Kingdom (1986) 8 EHRR 123 as authority for its manifestly without reasonable foundation standard. But in James, it is fairly clear that the Strasbourg court drew a distinction between two questions: first, was the measure in the public interest for the purpose of A1P1 (or, in article 8 terms, does it pursue a legitimate aim); and second, was there a reasonable relationship of proportionality between the means employed and the aim sought to be realised. This latter requirement had been expressed in Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35, at para 69, as whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individuals fundamental rights (see James, para 50). The manifestly without reasonable foundation standard was applied to the first but not the second question. When discussing (albeit strictly obiter) whether the imposition of charges for NHS treatment for asbestos related diseases caused by employers breach of duty was compatible with the A1P1 rights of employers and their insurers, in In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] AC 1016, para 51, Lord Mance noted that our domestic law had also drawn a distinction between whether the aims are legitimate and whether a fair balance had been struck. Both Lord Hope and Lord Reed had adopted this approach in AXA General Insurance Ltd v HM Advocate [2012] 1 AC 868. Even in relation to the fair balance question, of course, domestic courts cannot act as primary decision makers and principles of institutional competence and respect indicate that they must attach appropriate weight to the informed legislative choices at each stage of the Convention analysis: see the AXA case, para 131 (Asbestos, para 54). I pause only to note that if Lord Hope, Lord Mance and Lord Reed were correct in separating the issues of legitimate aim and fair balance in A1P1 cases, and applying a different standard to each, it would be wrong to apply a different approach to those same questions when they come up in the context of discrimination in the enjoyment of the right to respect for family life. The principles applicable when, say, insurance companies challenge interferences with their property rights should not be more favourable to them than the principles applicable when children challenge discrimination in their right to respect for their family lives. In R (MA) v Secretary of State for Work and Pensions [2016] 1 WLR 4550, the so called bedroom tax case, a wholesale attack was mounted upon the manifestly without reasonable foundation test. The attack was rejected in favour of the continued application of the Humphreys approach (para 38). There was no discussion of a more nuanced approach along the lines suggested by Lord Mance in Asbestos. Even applying Humphreys the removal of the spare room subsidy was found to be without justification in two respects. I agreed with that judgment (para 81). It seems to me that the court may well have to return to this difficult question in another context at some point in the future. But this is neither the case nor the context to do so. Nor is it necessary. The government has put forward three aims for the revised benefit cap: (i) fairness as between those in work and those on benefits, in that those in work should always be better off than those who are not, and with it the maintenance of public confidence in the benefits system; (ii) fiscal savings; and (iii) incentivising work outside the home. These are indeed legitimate aims, whatever the standard by which they are judged. However, it is also an essential element in justification that the measures adopted should be rationally related to their legitimate aims (see, among many, Lord Reed in Bank Mellat v HM Treasury (No 2) [2014] AC 700, para 76). This is another way of putting the requirement in European Union law that a measure be suitable to achieving its aims. It seems to me that it has been comprehensively demonstrated by the mass of evidence before the trial judge in DA, Collins J, and summarised by Lord Wilson and Lord Kerr, that the revised benefit cap is not suitable to achieving any of its declared aims. It does not achieve fairness as between those in work and those on benefits, because those in work will always be better off than those who are not. The fiscal savings are very small and liable to be offset by increased costs in other budgets. These include discretionary housing payments and the cost of housing and rehousing families made homeless as a result of the cap, as well as the costs resulting from the harm done to children by the disruption to their lives and education, as well as by living in poverty, in their early years: the fact that these costs will mainly fall upon local authorities rather than central government makes no difference in principle. There will be other costs if the lone parent is driven to take work outside the home, but it has not been shown that the benefit cap has this effect on this particular group of lone parents. But even if it could be shown that the benefit cap does have some effect in fiscal savings overall and inducing lone parents of young children to work outside the home, the question of a fair balance between the benefits to the community and the detriment to the children and their parents would still arise. The government is under an obligation in international law to treat the best interests of the children concerned as a first priority. It has been held on several occasions that whether it has fulfilled that obligation is relevant to whether it has acted compatibly with the Convention rights of the children concerned: see ZH (Tanzania) v Secretary of State for the Home Department [2011] 2 AC 166, H (H) v Deputy Prosecutor of the Italian Republic, Genoa [2013] 1 AC 338, Zoumbas v Secretary of State for the Home Department [2013] 1 WLR 3690. In showing that a fair balance has been struck, it is not enough for the government to show that it was aware of the concerns raised by many in and outside Parliament about the effect of the revised benefit cap on the welfare of children in lone parent families. Awareness is not the same as taking the best interests of those children seriously into account. Even taking them into account is not the same as giving them first priority which is an intrinsic part of striking a fair balance where childrens rights are concerned. Striking a fair balance would have set the very limited benefits to the public interest against the damage done to the family lives of young children and their lone parents if either their parents are forced to work outside the home in order to have enough for themselves and their children to live on or they are unable or unwilling to work outside the home and are thus forced to attempt to live on less than the state has decided that they need. In particular, there is little or no evidence that proper account has been taken of the risks of psychological harm to very young children if they are separated from their primary carers, or the multiple risks to the health, development and life chances of children living in poverty in their early years. There is little or no evidence that these very real and well documented risks have been fairly balanced against the much more speculative risks of spending those very early years in a household dependent on welfare benefits we are talking here of children who are below compulsory school age, whose understanding of where the money to live on comes from will be limited, although of course there may be older children in the same household. Once all the children are of school age, there will be ample incentive for their parents to try and find work outside the home if they can. Therefore, with the greatest respect for the institutional competence of the government as primary decision maker in these matters, this seems to me a clear case where the weight of the evidence shows that a fair balance has not been struck between the interests of the community and the interests of the children concerned and their parents. I would therefore allow the appeals and make the declaration made by Collins J in DA, amended to include families with children under compulsory school age in DS, as follows: The Housing Benefit Regulations 2006, as amended by the Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations 2016, are unlawful insofar as they apply to lone parents with a child or children under the age of five, in that: a. They involve unjustified discrimination against lone parents of children under the age of five, contrary to article 14 of the ECHR read with (i) article 1 of the First Protocol and (ii) article 8 of the ECHR; b. They involve unjustified discrimination against children under the age of five with lone parents, contrary to article 14 of the ECHR read with article 8 of the ECHR in the light of article 3 of the United Nations Convention on the Rights of the Child. LORD KERR: (dissenting) There is much in the judgment of Lord Wilson with which I completely agree. Indeed, the areas of disagreement between us, although important, are relatively few. It is right that I should express my admiration for his judgment and my indebtedness to Lord Wilson for his distillation of the many complex issues that arise in this difficult appeal. In particular, I agree with Lord Wilson, for the reasons which he gives in paras 35 and 36 of his judgment, that the appellants claims fall within the ambit of article 8 of ECHR; that all the appellants have the requisite status to advance claims under article 14 paras 38 and 39; and that the natural way to analyse the complaints of the DA appellants is as discrimination of the type explained in the Thlimmenos case para 40. I also agree that, in relation to the DS appellants, the court should address the fall back complaint (ie that relating to lone parents of children under five) and should again do so as a Thlimmenos complaint paras 44 and 45. In paras 46 and 47 of his judgment, Lord Wilson explains why he considers that the natural comparators to the cohorts whom the appellants represent are all others subject to the revised benefit cap. I agree with his analysis, and I also agree with his conclusion that it is open to the appellants, in advancing the argument that there has been an objectionable similarity of treatment of the DA and DS cohorts and all who have been subject to the cap, to draw particular attention to the marked difference between their situation and those in sub groups (a) and (b), namely dual care parents with a child under two or under five, and lone parents without a child under two or under five. Treating the DA and DS cohorts in precisely the same way as the members of those groups when there are significant differences in their respective circumstances sounds directly on the issue of justification. It follows from what I have said in the previous paragraph that I agree with Lord Wilson that there is clear prima facie evidence that the appellants are in a relevantly different situation from others who are subject to the revised benefit cap para 51 of his judgment. The factors identified in sub paras (e) and (f) of para 51 are of especial significance. Justification As Lord Wilson has pointed out in para 53 of his judgment, the authoritative statement on what requires to be justified is found in the speech of Lord Bingham in A v Secretary of State for the Home Department [2004] UKHL 56; [2005] 2 AC 68, para 68. What requires to be justified is the difference in treatment between one group and another. That requirement translates in the present case to justification of the same treatment to two disparate groups where their circumstances differ to the extent that they plainly call for differential treatment. Specifically, what must be justified here is the decision not to make provision for exemption of the DA and DS cohorts by amending the 2006 Regulations. In para 55, Lord Wilson adverts to two different paths which this court has followed in its pursuit of the proper test against which justification is to be measured where what is involved is an economic measure introduced by the democratically empowered arms of the state. Lord Wilson considers that this duality has been unhelpful and expresses regret for having contributed to it. In my view, there is no reason for regret and, while the divergence of opinion on this issue might be considered unfortunate, it is, I am afraid, unavoidable and cannot be swept away. The divergence centres on the question of the use of the formula commonly known as manifestly without reasonable foundation, when examining the proportionality of measures devised by government or the legislature in the fields of economic or social policy. This principle, if it is appropriate to describe it as such, is the creature of the European Court of Human Rights (ECtHR). Its provenance is the margin of appreciation which ECtHR accords to decisions of national authorities in the fields of economic and social policy particularly. Thus, as Lord Wilson observed in para 58, in the cases of James and Carson the Strasbourg court held that respect should be shown to the national legislatures decision on matters of public interest when devising economic or social measures unless it was manifestly without reasonable foundation. It is significant that, as Lord Wilson explained, what he described as this more benign approach flowed from the margin of appreciation. The manifestly without reasonable foundation formula should be recognised as a fundamental element of the margin of appreciation doctrine, therefore. This much is clear from the decision of the Grand Chamber in Stec v United Kingdom (2006) 43 EHRR 47. In that case ECtHR endorsed the manifestly without reasonable foundation approach in assessing whether a measure of economic policy, said to offend article 14 of the Convention, was justified. But this was expressly linked to the application of the margin of appreciation principle. At para 52 the court explained the reason for its reluctance to interfere in this way: Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds . The interconnectedness between the manifestly without reasonable foundation rubric and the margin of appreciation doctrine is therefore clear. On that account, a failure to acknowledge that rubric as an element or sub set of the margin of appreciation principle can lead to an unwitting importation of a quasi margin of appreciation approach into the national courts consideration of the proportionality of a measure. This is impermissible even in the fields of economic or social policy. There may have been a tendency to do precisely that, however, in some earlier decisions of this court. Thus, for instance, in MA [2016] UKSC 58; [2016] 1 WLR 4550, para 32, Lord Toulson adopted for the purposes of national courts review the standard prescribed by Strasbourg when he said: The fundamental reason for applying the manifestly without reasonable foundation test in cases about inequality in welfare systems was given by the Grand Chamber of the European Court of Human Rights in Stec, para 52. Choices about welfare systems involve policy decisions on economic and social matters which are pre eminently matters for national authorities. But there is plenty of authority which acknowledges that measures falling within the United Kingdoms margin of appreciation, when viewed from the supra national perspective of ECtHR, will not necessarily survive judicial scrutiny on the national stage. In In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] UKSC 3; [2015] AC 1016, para 54 Lord Mance said: At the domestic level, the margin of appreciation is not applicable, and the domestic court is not under the same disadvantages of physical and cultural distance as an international court. The fact that a measure is within a national legislatures margin of appreciation is not conclusive of proportionality when a national court is examining a measure at the national level: In re G (Adoption: Unmarried Couple) [2009] AC 173; R (Nicklinson) v Ministry of Justice (CNK Alliance Ltd intervening) [2015] AC 675, per Lord Neuberger PSC at p 781, para 71, Lord Mance JSC at p 805, para 163 and Lord Sumption JSC at pp 833 834, para 230. However, domestic courts cannot act as primary decision makers, and principles of institutional competence and respect indicate that they must attach appropriate weight to informed legislative choices at each stage in the Convention analysis: see the AXA case, para 131, per Lord Reed JSC, and R (Huitson) v Revenue and Customs Comrs [2012] QB 489, para 85. But again, and in particular at the fourth stage, when all relevant interests fall to be evaluated, the domestic court may have an especially significant role. Lord Neuberger picked up this theme in Nicklinson [2014] UKSC 38; [2015] AC 657 where, at para 74, he said: In an interesting passage in para 229 below, Lord Sumption suggests that, where an issue has been held by the Strasbourg court to be within the margin of appreciation, the extent to which it is appropriate for a UK court to consider for itself whether the Convention is infringed by the domestic law may depend on the reason why the Strasbourg court has concluded that the issue is within the margin. I agree that the reasoning of the Strasbourg court must be taken into account and accorded respect by a national court when considering whether the national law infringes the Convention domestically, in a case which is within the margin of appreciation just as in any other case as section 2(1)(a) of the 1998 Act recognises. However, both the terms of the 1998 Act (in particular sections 2(1) and 4) and the principle of subsidiarity (as expounded for instance in Greens and MT v United Kingdom [2010] ECHR 710, para 113) require United Kingdom judges ultimately to form their own view as to whether or not there is an infringement of Convention right for domestic purposes. (Emphasis added) The importation of the test manifestly without reasonable foundation to all aspects of the national courts consideration of proportionality imperils the proper discharge of its duty. This was a technique devised by the Strasbourg court in order to promote the proper application of the margin of appreciation. In my view, it has no place in the national courts consideration of whether a measure which interferes with a Convention right is proportionate, since, as Lord Mance observed in the In re Recovery of Medical Costs case, at the domestic level, the margin of appreciation is not applicable. Indeed, in the national setting, this court, in a number of cases, has articulated an approach to examination of the proportionality of the interference where consideration of the question whether it was manifestly without reasonable foundation is conspicuously absent. As Lord Reed said in Bank Mellat (No 1) [2013] UKSC 39; [2014] AC 700, pp 789 790, para 71: One important factor in relation to the Convention is that the Strasbourg court recognises that it may be less well placed than a national court to decide whether an appropriate balance has been struck in the particular national context. For that reason, in the Convention case law the principle of proportionality is indissolubly linked to the concept of the margin of appreciation. That concept does not apply in the same way at the national level, where the degree of restraint practised by courts in applying the principle of proportionality, and the extent to which they will respect the judgment of the primary decision maker, will depend upon the context, and will in part reflect national traditions and institutional culture. For these reasons, the approach adopted to proportionality at the national level cannot simply mirror that of the Strasbourg court. (Emphasis added) This is an important statement. It emphasises that not only is the technique adopted by the national court to the question of the proportionality of a measure different from that of the Strasbourg court but the basis on which there should be reticence on the part of a national court to interfere is also different. In Strasbourg it is recognised that the court may be less well placed than a national court to decide whether an appropriate balance has been struck. By contrast, the national court may consider itself constrained by national traditions and institutional culture. One can quite see how the concept of manifestly without reasonable foundation assists in the examination by the Strasbourg court of the proportionality of a measure. Very different considerations arise when the national court examines proportionality. The steps in the proportionality analysis at the national level are well settled. When considering whether legislative measures which interfere with a Convention right satisfy the requirements of proportionality, four questions generally arise, as Lord Wilson explained in R (Aguilar Quila) v Secretary of State for the Home Department [2012] 1 AC 621, para 45. These were discussed by Lord Reed in Bank Mellat at paras 20ff: (a) is the legislative objective sufficiently important to justify limiting a fundamental right?; (b) are the measures which have been designed to meet it rationally connected to it?; (c) are they no more than are necessary to accomplish it?; and (d) do they strike a fair balance between the rights of the individual and the interests of the community? Has the manifestly without reasonable foundation formula any part to play in the answer to be given to any of these questions? In R (SG (previously JS)) v Secretary of State for Work and Pensions [2015] UKSC 16; [2015] 1 WLR 1449, paras 209 and 210, Lady Hale addressed this issue: 209. The references cited for the manifestly without reasonable foundation test were James v United Kingdom (1986) 8 EHRR 123, para 46, and National & Provincial Building Society v United Kingdom (1997) 25 EHRR 127, para 80, both cases complaining of a violation of article 1 of the First Protocol. In AXA General Insurance Ltd v HM Advocate [2011] UKSC 46; [2012] 1 AC 868, both Lord Hope of Craighead DPSC at para 31, and Lord Reed JSC at para 124, treated this test as directed towards whether the measure is in the public interest, in other words to whether it has a legitimate aim. They dealt separately with whether the interference with property rights was proportionate. They relied upon cases such as Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301, para 38, where the Strasbourg court appears to have regarded this as a separate question: An interference with the peaceful enjoyment of possessions must strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individuals fundamental rights. In particular, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions. (p 75) (See also In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] 2 WLR 481, para 52). In this case, the complaint is of discrimination in interfering with the peaceful enjoyment of possessions rather than of deprivation of possessions as such. Nevertheless, the benefit cap does come close to a deprivation of possessions, given that it removes, by reference to a fixed limit, benefit to which the claimants would otherwise be entitled by virtue of their needs and, more importantly, the needs of their children. 210. When it comes to justifying the discriminatory impact of an interference with property rights, a distinction might similarly be drawn between the aims of the interference and the proportionality of the discriminatory means employed. However, it has been accepted throughout this case that the manifestly without reasonable foundation test applies to both parts of the analysis; but that, as this court said in Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545, para 22, the fact that the test is less stringent than the weighty reasons normally required to justify sex discrimination does not mean that the justifications put forward for the rule should escape careful scrutiny. I was one of those who accepted in the SG case that the manifestly without reasonable foundation test applied to all of the stages in the proportionality analysis. I was wrong to have done so. In the In re Recovery of Medical Costs case Lord Mance in para 46 had drawn a distinction between the first three stages of the proportionality assessment and the final stage: Initially, in Handyside v United Kingdom (1976) 1 EHRR 737, para 62, followed in Marckx v Belgium (1979) 2 EHRR 330, para 63, the court said that the state was the sole judge of necessity for the purposes of deciding whether a deprivation of property was in the public interest. That no longer represents the position on any view. But the Counsel General for Wales and Mr Fordham disagree as to the current position. The Counsel General submits that the court will at each of the four stages of the analysis respect the legislatures judgment as to what is in the public interest unless that judgment be manifestly without reasonable foundation: James v United Kingdom (1986) 8 EHRR 123, para 46. Mr Fordham on the other hand submits that this passage was or, at least in subsequent authority, has been restricted in application to the first or at all events the first to third stages. In my opinion, Mr Fordham is basically correct on this issue, at least as regards the fourth stage which presently matters, although that does not mean that significant weight may not or should not be given to the particular legislative choice even at the fourth stage. At para 51 Lord Mance referred to the Axa case and pointed out that both Lord Hope and Lord Reed had treated the questions of legitimate aim and whether the measure was proportionate separately. The question of whether the measure pursued a legitimate aim was to be determined on the basis that it should be considered to have done so unless the claim that it did was manifestly unreasonable. But in relation to proportionality, as Lord Mance observed, Lord Hope applied the fair balance test, citing Sporrong and Lnnroth v Sweden (1982) 5 EHRR 35 and Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301. It is clear from this that, even in the supra national context of Strasbourg review, a distinction is to be drawn between, on the one hand, the pursuit of a legitimate aim for the measure and, on the other, the balancing of the interests of the state against the impact which a measure interfering with a Convention right has on those affected by it. The inaptness of applying the manifestly without reasonable foundation standard when the matter of where the balance lies is being considered by a national court is all the more obvious. I have concluded, therefore, that, certainly so far as concerns the final stage in the proportionality analysis, the manifestly without reasonable foundation standard should not be applied. Quite apart from the imperative provided by the authorities, I consider that to impose on the appellants the obligation of showing that a measure is manifestly without reasonable foundation is objectionable for two reasons: firstly, it requires proof of a negative; secondly, and more importantly, much, if not all, of the material on which a judgment as to whether there is a reasonable foundation for the measure will customarily be in the hands of the decision maker and not readily accessible to the person who seeks to challenge the proportionality of the measure which interferes with their Convention rights. The proper test to apply in relation to the final stage of the proportionality assessment is whether the government has established that there is a reasonable foundation for its conclusion that a fair balance has been struck. In para 67 of his judgment, Lord Wilson says that a move is afoot, as exemplified by observations made by me in the SG case, for UK courts to treat the UNCRC as part of our domestic law. So far as I am aware, the statements that I made there have not been taken up by any court and I make clear that, for the purposes of this case, I do not rely on the view that I there expressed, nor do I wish to reopen a debate on that issue. I am content to adopt Lord Wilsons approach to the significance of UNCRC in the resolution of this case. In particular, I agree with his description (in para 68) of the elements of the concept of the best interests of the child in article 3.1. As Lord Wilson says, authoritative guidance is to be found in para 6 of General Comment No 14 (2013) of the UN Committee on the Rights of the Child. This was recognised by Lord Carnwath in the SG case and endorsed by this court in the Mathieson case. Lord Wilson has suggested, and I agree, that the concept has three dimensions. The most important of these, so far as concerns the present case, is the third, namely, that, whenever a decision is to be made that will affect an identified group of children, the decision making process must include an evaluation of the possible impact of the decision on them. That obligation, when allied to the duty of the government to reach a decision which is proportionate, according to the principles earlier discussed, means that the respondent must assess the impact on the children in a way that balances their interests against the interests of the community. It must, moreover, be satisfied that the decision strikes a fair balance and must be in a position, when challenged, to establish that it has a reasonable foundation. The provisions in articles 26 and 27 of UNCRC, set out by Lord Wilson in para 70 of his judgment, provide an essential backdrop to that exercise. Thus, the states duty is to take necessary measures to ensure that childrens right to social security benefits is fully realised; to recognise childrens entitlement to an adequate standard of living; and to take measures to assist parents to implement the right to a proper standard of living, particularly with regard to nutrition, clothing and housing. Even if these provisions are not directly binding on the government (which is the premise on which I am prepared to proceed in the present case), they are central to the judgment which the state must make in introducing social security measures which will affect the living conditions of children. Moreover, they provide an indispensable yardstick against which the proportionality of the measures under attack in this appeal falls to be examined. For the reasons given by Lord Wilson in paras 75 and 76, the government cannot assert that the measures under attack are not directed at children. And I agree with his conclusion in para 78 that the interests of the lone parents in the present appeals are indistinguishable from the interests of their children below school age. The issue which is then starkly exposed as critical to the outcome of this appeal is the effect of article 3.1 on the proportionality of the governments decision not to exempt from the revised benefit cap the cohorts whom the appellants represent. I say the effect of article 3.1 on proportionality advisedly. Lord Wilson has carried out (in paras 81 86) a comprehensive review of the Parliamentary materials and other policy documents which disclose the background to the governments decision and its objectives. I have nothing to add to that review. Where I part company with Lord Wilson, however, is in his concentration on the question whether the government has acted in breach of article 3 of UNCRC. Lord Wilson concludes by a narrow margin that the government did not breach article 3.1 by its refusal to amend the 2006 Regulations so as to exempt the appellant cohorts from the revised cap. As I understand his judgment, largely on that account, he considers that the appeal must be dismissed. In a telling sentence in para 87 he says: This court must impose on itself the discipline not, from its limited perspective, to address whether the governments evaluation of its impact was questionable; nor whether its assessment of the best interests of young children was unbalanced in favour of perceived long term advantages for them at the expense of obvious short term privation. I do not agree that the questionability of the governments decision or its avowed lack of balance should not be addressed by this court. Conclusions on those matters will not at least, not necessarily be determinative of the appeal. But, inasmuch as they sound on the question of the proportionality of the governments decision, they are matters to be taken into account. I will return to this theme in paras 188 190 of this judgment. In the meantime, it is important to deal with the significance to be attached to a finding that the government has not acted in breach of article 3 of UNCRC. One may begin by recognising that, of course, if the government was found to have acted in breach of that provision, this would go a long way towards showing that the decision not to exempt the appellant cohorts from the revised cap was disproportionate, if indeed it would not be conclusive on that issue. But a finding that no breach of article 3 arose does not establish the converse. But I query the premise (which I believe to be implicit in Lord Wilsons judgment) that the question of whether the government was in breach of the article is pivotal to the issue of proportionality. UNCRC contains a number of enjoinders to those countries which subscribe to it. Some of these are expressed in imperative terms. The duty of the state is to keep faith with the spirit of the Convention. Whether it has discharged that duty is not to be answered solely on whether it can be said to be in technical breach of its terms. The proportionality of a government measure which has an impact on the best interests of children is not to be judged by a mechanistic approach to the question whether there has been technical compliance with article 3. It must be assessed on the basis of whether, given the injunctions in UNCRC, the governments decision, taking into account where the best interests of children lie, represents a balanced reaction to those interests and the aims which a particular measure seeks to achieve. I should say, however, if the proportionality of the governments decision not to exempt the appellants from the benefit cap depended on whether there was a failure to comply with it, I would have held that the government was in breach of article 3. I will discuss the reasons for that conclusion later in this judgment. Article 3 (and articles 26 and 27) provide a context as well as a backdrop to the governments decision as to those who should be covered by the cap. That decision is not insulated from challenge on proportionality grounds by the governments claim that it took representations into account, nor even that it carried out an evaluation of their weight and persuasiveness. The government must show that it reached a balanced conclusion, taking into account the impact which the refusal to exempt the cohorts whom DA and DS represent has had upon them, when weighed against the interests of society which the conclusion is said to protect. The impact of the decision not to exempt the DA and DS groups is well described in the submissions of Gingerbread made to the Public Bill Committee of the House of Commons in September 2015, referred to in para 83 of Lord Wilsons judgment. No real answer to the criticisms of the scheme has been provided by the government. Its principal defence is its reliance on the DHP scheme. The shortcomings of that scheme have been vividly described in paras 30 and 31 of Lord Wilsons judgment. Quite apart from the myriad of difficulties to which he there refers, the fundamental point to be made is that DHPs are not tailored to deal with the spectrum of difficulties which the appellants face, merely one aspect of them: housing costs. They do nothing to alleviate problems with childcare costs and complications in obtaining childcare, even if it could be afforded. And, of course, there is, as Lord Wilson pointed out in para 31, scant, indeed, virtually no, information as to the extent by which the difficulties encountered by the DA and DS cohorts are mitigated by DHPs. There is simply no warrant for the claim that refusal to extend exemption from the cap to the DA and DS cohorts will improve the fairness of the social security system or increase public confidence in its fairness. That sweeping statement partakes of a declamation for which no tangible evidence is proffered. To the contrary, a proper understanding of the impact on those whom the appellants represent, so far from increasing public confidence in the social security system, is likely to lead any right thinking person to the opposite conclusion. The other two professed aims of government, to incentivise parents in a non working family to obtain work and to achieve fiscal savings have been decisively refuted by the evidence. One can only incentivise parents to obtain work if that is a viable option. The evidence in this case overwhelmingly shows that in most cases in the DA and DS cohorts, this is simply not feasible. In particular, lone parents are placed in an impossible dilemma. If they go out to work, they must find the resources for childcare. Those in the DA and DS groups will routinely find it impossible to obtain employment which will remunerate them sufficiently to make this a sensible choice. They also face the difficulty of obtaining suitable childcare, irrespective of whether they can afford it. As to the fiscal savings that might be achieved, Lord Wilson has dealt summarily and conclusively with that argument in para 32 of his judgment. I agree entirely with what he has had to say there and need not repeat it. The application of the proportionality test to this case The enjoinder in article 3.1 of UNCRC that, in all actions concerning children undertaken by administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration sets the scene for an examination of whether the failure to exempt the DA and DS cohorts from the cap is a proportionate interference with their ECHR rights. It is to be noted that the best interests of the child must be a primary consideration. Where those interests conflict with other considerations, although they will not inevitably prevail, their primary status must be respected. Ephemeral aspirations, however high sounding or apparently noble, will not suffice to displace them. The entitlement of children, enshrined in articles 26 and 27 of UNCRC, to have the state take necessary measures to ensure that their right to social security benefits is fully realised; and that this comprises an adequate standard of living; and that measures must be taken to assist parents to implement that right all contribute to the importance that UNCRC places on the welfare of children. Where measures are adopted by a state which have a demonstrable adverse effect on children, the hurdle faced by government in showing that these factors have been properly taken into account is correspondingly heightened. Government, if it is to adhere to its obligations under UNCRC, must have a clear sighted understanding of the impact on children that a proposed measure curtailing their entitlement to social security benefits will have. It must also carry out a defensible weighing of their interests against the objectives which it proposes will be achieved by a curtailment of the rights. The preponderance of evidence in this case strongly supports the conclusion that this is not the way in which the respondent approached the decision under challenge in this appeal. True it is that it considered the representations made. But I do not conclude that a proper weighing of the particular interests of the DA and DS cohorts against what was likely to be achieved in their case was carried out. It is not enough that notice was taken of the various submissions made, or that the amendments proposed to the scheme came to the attention of the government. There must be a frank and objective assessment of whether depriving these particular individuals of the benefit of exemption from the cap would conduce in a material way to the realisation of the avowed aims of the scheme. For the reasons that I have given, I do not consider that such an exercise was undertaken. Further, I believe that, if it had been, the case for the inclusion of the DA and DS cohorts in the exemption should have been found to be irresistible. As I have said, I do not consider that breach of article 3 of UNCRC is an essential prerequisite to a finding that there has been a disproportionate interference with the appellants ECHR rights. But, if such a breach required to be found, I would have concluded that it was present. The evidence in this case unmistakably points to the inference that, while the impact on childrens rights was considered, it was not given a primacy of importance which article 3 requires. Had it been, the conclusion that the exemption should not be extended to the DA and DS cohorts would not have been reached. Lord Wilson has amply demonstrated that government and Parliament were alive to the states obligation under article 3 of UNCRC. Where, regretfully, I must disagree with him is on his conclusion that taking into account the representations made amounted to a discharge of that obligation. Conclusion I would allow the appeal and make a declaration that the regulations represent an unjustifiable interference with the appellants article 1, Protocol 1 and article 8 rights, taken in combination with article 14 of ECHR.

These appeals are brought on behalf of various lone parent mothers and their young children to challenge the legislative provisions known as the benefit cap. These provisions originally capped specified welfare benefits at a total of 26,000 per household. But by the Welfare Reform and Work Act 2016 the government and Parliament reduced the cap to 23,000 for a household in London, 20,000 elsewhere. Single people (including lone parents) are exempt from the revised cap (the cap) if they work for 16 hours each week. The aim of the cap is to incentivise work. The appellants argue that in introducing the cap, the government, through Parliament, has discriminated against lone parents of young children, whose childcare obligations severely curtail their ability to work, and against the children themselves. In the DA case the appellants are three lone parent mothers two of whom had a child under two at the outset of proceedings, and those two children themselves. In DS, the appellants are two lone parent mothers with nine children, three of whom were under five, and those nine children themselves. On 22 June 2017 the High Court held in the DA case that the benefit cap unlawfully discriminated against the children under two and their mothers, but on 15 March 2018 the Court of Appeal set aside the High Courts order. On 26 March 2018 Lang J formally dismissed the DS claimants claims but granted a leap frog certificate so that they could apply to appeal directly to the Supreme Court. The Supreme Court dismisses the appeal by a majority of 5 2. Lord Wilson (with whom Lord Hodge agrees) gives the main judgment. Lord Carnwath (with whom Lord Reed and Lord Hughes agree) and Lord Hodge (with whom Lord Hughes agrees) give concurring judgments. Lady Hale agrees with Lord Wilson on the principles, but not the outcome. Lord Kerr disagrees with him about both. Lord Wilson acknowledges that the cap has had a major impact on lone parent households with a child aged under five and in particular under two [22]. It does incentivise them to try to find work for at least 16 hours per week, but this was argued to fly in the face of the governments own policy of providing no free childcare for children under two and of replacing income support with job seekers allowance only after a lone parents youngest child has reached school age. The governments funding of Discretionary Housing Payments (DHPs) may alleviate the impact of the cap on such lone parent households but the evidence on this could be stronger. The cap saves little public money, but it can take the families it affects well below the poverty line. Living in poverty has a particularly adverse impact on the development of children under five [23] [34]. The caps reduction of benefits to well below the poverty line engages the claimant mothers and childrens right under Article 8 of the European Convention on Human Rights (ECHR) to respect for their family life [35] [37]. Each of the four classes of claimants has a separate status under Article 14 (for example, lone parents of children under two) on grounds of which status, they might complain they face discrimination in the enjoyment of that right [38] [39]. Their complaint, for which there is prima facie evidence, would be that despite being in a relevantly different situation from others subjected to the cap, they are treated the same way see Thlimmenos v Greece (2000) 31 EHRR 12 [40] [51]. The government must objectively justify this discrimination in this case, its failure to exempt the DA and DS cohorts from the cap [52] [54]. The test for whether the government can justify a discriminatory rule governing the distribution of welfare benefits is whether the rule is manifestly without reasonable foundation (MWRF). Once the government has put forward a foundation, the court will proactively examine whether it is reasonable [55] [66]. The United Nations Convention on the Rights of the Child (UNCRC) requires the public authorities to treat the childs best interests as a primary consideration. It forms no part of our domestic law, but aids interpretation of the ECHR, as to whether the government unjustifiably discriminated against the children and their parents in their enjoyment of their right under Article 8. The evidence shows that the government did, as a primary consideration, evaluate the likely impact of the cap on lone parents with young children [67] [87]. Furthermore, the governments belief that there are better long term outcomes for children in households where an adult works is a reasonable foundation for treating the DA and DS cohorts similarly to all others subjected to the cap [88]. Lord Carnwath and Lord Hodge both express reservations on the issue of status, but agree with Lord Wilson on the relevance of the UNCRC and also on the application of the MWRF test. They agree with him that the executive and Parliament both gave proper consideration to the interests of the children affected [89] [123], [124] [131]. Lady Hale agrees with Lord Wilson on the legal principles but not their application. She holds that the government failed to strike a fair balance between the very limited public benefits of the cap and the severe damage done to the family lives of young children and their lone parents if the parents must choose between working outside the home and not having enough for the family to live on [132] [157]. Lord Kerr considers the MWRF test to have derived from the margin of appreciation which is afforded to decisions of national authorities in the European Court of Human Rights. He would not import this approach into the national courts consideration of a measures proportionality. The steps in the proportionality analysis at the national level are well settled in the case law [164] [172]. The MWRF standard should not be applied as part of this analysis instead, the question should be whether the government has established that there is a reasonable foundation for its conclusion that a fair balance has been struck [173] [177]. In relation to the UNCRC, Lord Kerr does not agree with Lord Wilson that the key question is whether the government has acted in breach of Article 3 of the UNCRC [183]. A finding that Article 3 has not been breached does not establish the proportionality of the measure [186]. The evidence in this case shows that, while the impact on childrens rights was considered, it was not given a primacy of importance which Article 3 requires [196].

On 10 June 2010 the appellants, William Hugh Lauchlan and Charles Bernard ONeill, were found guilty in the High Court of Justiciary at Glasgow of the murder of Mrs Allison McGarrigle between 21 June and 1 September 1997, and of a subsequent attempt to defeat the ends of justice by disposing of her body at sea. The charges of which they were convicted in that trial had been separated from a number of charges on the same indictment of or relating to sexual offences against children. Their trial on the sexual offence charges took place before Lord Pentland between 26 April and 12 May 2010. Their trial on the murder charges, which is the trial to which this appeal relates, took place (between 17 May and 10 June 2010) before the same judge but with a different jury. The appellants were sentenced to life imprisonment for the murder, with punishment parts of 26 and 30 years respectively, and to concurrent sentences of eight years imprisonment for attempting to defeat the ends of justice. The appellants both appealed against their convictions at the second trial and against their sentences. Lauchlan was granted leave to appeal against his conviction for murder by the sifting judges, but this was restricted to two grounds alleging errors by the trial judge. He was also given leave to appeal against sentence. ONeill too was granted leave to appeal against sentence, but the sifting judges refused him leave to appeal against his conviction for murder. The appellants applied under section 107(8) of the Criminal Procedure (Scotland) Act 1995 (the 1995 Act) for leave to appeal against their convictions for murder on certain grounds which the sifting judges had held were unarguable. On 8 February 2012 Lauchlan was refused leave to appeal on those grounds by the Appeal Court. ONeill was given leave to appeal on one ground only which alleged an error by the trial judge: [2012] HCJAC 20. The appellants then applied for leave to appeal to this court under paragraph 13 of Schedule 6 to the Scotland Act 1998 on some of the grounds on which they were refused leave on 8 February 2012. On 19 April 2012 the Appeal Court (Lord Justice Clerk Gill, Lord Hodge and Lord McEwan) gave both appellants leave to appeal on a ground alleging undue delay. It gave ONeill leave on another ground alleging apparent bias on the part of the trial judge arising out of things that had happened in the presence of the jury at the end of the first trial: [2012] HCJAC 51. The trial judge had been shown a list of the appellants previous convictions after they had been found guilty of the sexual offence charges, and he then made a comment about their character, having regard to their records and the nature of the offences of which they had been convicted. Jurisdiction This court has jurisdiction to hear appeals in relation to criminal proceedings in the High Court of Justiciary under Part II of Schedule 6 to the Scotland Act 1998 (the 1998 Act). The opening paragraph of Part II is in these terms: 3. This Part of this Schedule applies in relation to devolution issues in proceedings in Scotland. The expression devolution issue is defined in paragraph 1 of Schedule 6, which provides: 1. In this Schedule devolution issue means (a) a question whether an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament 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 Government 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 Government is, or would be, incompatible with any of the Convention rights or with EU law, (e) a question whether a failure to act by a member of the Scottish Government is incompatible with any of the Convention rights or with EU law, (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 Scotland Act 2012 (the 2012 Act) made a number of important changes to this courts jurisdiction to deal with devolution issues under Schedule 6 to the 1998 Act. They came into effect on 22 April 2013: The Scotland Act 2012 (Commencement No 3) Order 2013 (2013/6 (C1). This is also the relevant date for the purposes of The Scotland Act 2012 (Transitional and Consequential Provisions) Order 2013 (2013/7 (S1)) (the 2013 Order): see article 1(2) of that Order. This appeal was heard one week later on 29 and 30 April 2013. Section 36(4) of the 2012 Act provides: In paragraph 1 of Schedule 6 (devolution issues), after sub paragraph (f) insert But a question arising in criminal proceedings in Scotland that would, apart from this paragraph, be a devolution issue is not a devolution issue if (however formulated) it relates to the compatibility with any of the Convention rights or with EU law of (a) an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament, (b) a function, (c) the purported or proposed exercise of a function, (d) a failure to act. The effect of the exclusion of questions of the kind referred in section 36(4) of the 2012 Act from the list of devolution issues in paragraph 1 of Schedule 6 to the 1998 Act is that these questions must now be dealt with as compatibility issues under the 1995 Act. Section 288ZA(2), which was inserted into the 1995 Act by section 34(3) of the 2012 Act, provides that compatibility issue means a question, arising in criminal proceedings, as to (a) whether a public authority has acted (or proposes to act) (i) in a way which is made unlawful by section 6(1) of the Human Rights Act 1998, or (ii) in a way which is incompatible with EU law, or (b) whether an Act of the Scottish Parliament or any provision of an Act of the Scottish Parliament is incompatible with any of the Convention rights or with EU law. Section 288ZB(4), which was inserted into the 1995 Act by section 35 of the 2012 Act, provides for references of compatibility issues to the Supreme Court by a court consisting of two or more judges of the High Court of Justiciary. Subsection (6) of that section provides that, on a reference to it under that section, the powers of the Supreme Court are exercisable only for the purpose of determining the compatibility issue. Subsection (7) provides that, when it has determined a compatibility issue on a reference under that section, the Supreme Court must remit the proceedings to the High Court. Section 288AA, which was inserted into the 1995 Act by section 36(6) of the 2012 Act, provides for appeals to the Supreme Court. It contains the same directions in subsections (2) and (3) as to the way this courts powers are to be exercised in the case of appeals as those in subsections (6) and (7) of section 288ZB which relate to references. Article 2 of the 2013 Order provides: (1) A convertible devolution issue is a question arising in criminal proceedings before the relevant date which (a) is a devolution issue; (b) would have been a compatibility issue had it arisen on or after that date; and (c) has not been finally determined before the relevant date. (2) But a devolution issue arising in criminal proceedings before the relevant date is not a convertible devolution issue if (a) the issue has been referred, or a determination of the issue has been appealed, to the Supreme Court under Schedule 6 to the 1998 Act; and (b) the hearing of the reference or appeal commences before the relevant date. Article 3(1) provides that, subject to qualifications which do not apply in this case, a convertible devolution issue becomes a compatibility issue for all purposes on the relevant date. The allegation of undue delay raised a devolution issue within the meaning of paragraph 1(d) of Schedule 6 to the 1998 Act. It arose in criminal proceedings before 22 April 2013, it satisfied the other tests set out in article 2(1) of the 2013 Order and the hearing of the appeal did not commence before 22 April 2013. So it was a convertible devolution issue, and it has now become a compatibility issue by virtue of article 3(1). As it has come before the Supreme Court as an appeal against the determination of that issue by the Appeal Court, it is to be treated as an appeal under section 288AA(1) of the 1995 Act: 2013 Order, articles 4(2) and 7(2). So the powers of this court must be exercised in the manner provided for by section 288AA(2) and (3) of the 1995 Act. The allegation of apparent bias was the subject of an amended note of appeal which had been lodged on ONeills behalf before the hearing before the Appeal Court of his application under section 107(8) of the 1995 Act. It made no mention of any act on the part of the Lord Advocate, so it does not appear to have raised a devolution issue at that stage. But it was submitted on ONeills behalf by his solicitor advocate when he was applying for leave to appeal to this court that this allegation did raise a devolution issue: [2012] HCJAC 51. Lord Hodge explained the position in paras 6 and 7 of the Appeal Courts opinion: 6. In additional ground 15 of his grounds of appeal Mr ONeill complained about the comments of the trial judge, Lord Pentland, at the end of the first phase of the trial. We expressed our views on this ground in paragraphs 81 to 88 of this courts opinions. Mr Carroll submitted that the challenge raised a devolution issue as the Lord Advocate had persevered with the prosecution in the face of what was evidence of an unfair trial. 7. For the reasons which we stated in those paragraphs we did not think that the points which Mr Carroll raised were arguable. We adhere to that view. But we recognise that the splitting of the trial into two phases before two juries and the resulting presentation of previous convictions and the judges remarks at the end of the first phase were very unusual circumstances. We are satisfied that it is appropriate to give leave to appeal on this ground. The way the argument on this ground of appeal proceeded in the Appeal Court suggests that, as it was not presented as a devolution issue at the stage of the application under section 107(8) of the 1995 Act, there has been no determination of that issue by that court against which there could have been an appeal under paragraph 13 of Schedule 6 to the Scotland Act 1998. But the Appeal Court had power under paragraph 11 of the Schedule to refer any devolution issue which arose in proceedings before it to this court, and that is what seems to have happened in this case. By the same process of reasoning as applies to the allegation of undue delay, this issue was a convertible devolution issue and is now a compatibility issue. This means that this court has jurisdiction to consider it, and that its powers must be exercised in the manner provided for by section 288ZB(6) and (7) of the 1998 Act. Undue delay (a) the issue The period of time relied on in this case extends from 17 September 1998, when the appellants were detained under section 14 of the 1995 Act on suspicion of conspiracy to murder, to 10 June 2010 when they were convicted. It was not until 5 April 2005 that the appellants appeared on petition at Kilmarnock Sheriff Court on charges which ultimately formed the basis for the charges in the indictment of which they were convicted. There was a further period until 10 September 2008 when the indictment was served on them, but the focus of attention at this stage is on that which occurred between 17 September 1998 and 5 April 2005. The question which this court has been asked to decide requires it to identify the right starting point for the purposes of the reasonable time guarantee in article 6(1) of the European Convention on Human Rights. The issue was focussed by Lord Hodge in the Appeal Courts opinion of 19 April 2012 in this way: 2. Mr McVicar on behalf of Mr Lauchlan sought leave to argue before the Supreme Court that the decision of that court in Ambrose v Harris (2011 SLT 1005) had the result that the starting point in the assessment of reasonable time under article 6 of the European Convention on Human Rights (ECHR) was not, as the Appeal Court had held in ONeill v HM Advocate (2010 SCCR 357), the stage when an accused person appeared on petition but the earlier stage when the accused was interviewed by the police under caution in the exercise of their powers under section 14 of the 1995 Act. Mr Carroll on behalf of Mr ONeill adopted Mr McVicars submissions. 3. We have decided to grant leave to appeal on this ground. We set out our reasoning in paragraphs 25 29 of this courts opinions but recognise that the issue raised is one which arises from statements in a decision of the Supreme Court on which that court may wish to provide further guidance. The parties agree that the issue can be formulated in this way: whether for the purposes of their right to a trial within a reasonable time in terms of article 6(1) of the European Convention on Human Rights the appellants were charged on 17 September 1998. That, say the appellants, is the date that should be taken to be the starting point. The Crown contends, on the other hand, that the correct starting point is 5 April 2005. It was suggested by the appellants in the statement of facts and issues that this court should also say whether or not the period between 17 September 1998 and 10 June 2010 when the appellants were convicted constituted an unreasonable delay in the process of determination of the charges against them. But it was accepted during the hearing of the oral argument that this issue would raise questions of fact which are best left for determination by the Appeal Court. (b) the facts The deceased, Mrs Allison McGarrigle, had a son named Robert who was subject to a residential supervision requirement under the Social Work (Scotland) Act 1968. It required him to live during the week with his father in Kilmacolm but he was permitted to visit his mother, who was divorced from his father, during the day on Saturdays. On Saturday 14 June 1997 Robert did not return to his fathers address after visiting his mother. Instead he and his mother went to Largs, where they met the appellants and went to live with them in a property which they were then occupying in that town. On or about 20 June 1997 a drinking session took place there at which a number of people including the appellants, Mrs McGarrigle and Robert were present. Mrs McGarrigle was no longer there the following morning, and she was never seen by Robert again. On 16 February 1998 she was reported to the police as a missing person by her ex husband. The exact date when she was last seen was marked as unknown, but it was noted that she had cashed a benefit cheque in Rothesay on 12 June 1997. By September 1998 the police enquiry into Mrs McGarrigles disappearance was being referred to by the Procurator Fiscal at Kilmarnock as a disappearance in suspicious circumstances, and by the Head of the Crown Office Appeals Unit and Crown Counsel as a murder enquiry. In the meantime, on 17 June 1998, the appellants were convicted of a number of sexual offences including offences against Robert McGarrigle. These offences had been committed between March 1993 and 27 July 1996 when Robert and his mother were living close to where the appellants were then living in Rothesay. On 18 August 1998 the appellants were sentenced in respect of these convictions to periods of 6 years and 8 years imprisonment respectively and became subject to notification requirements under the Sex Offenders Act 1997. They were taken to Peterhead Prison to serve their sentences. On 14 September 1998 the Procurator Fiscal at Kilmarnock wrote to the Governor of Peterhead Prison requesting that the appellants be released into the custody of the police for questioning. On 17 September 1998 they were taken from custody and detained by officers of Grampian Police under section 14 of the 1995 Act on suspicion, as that section requires, of having committed an offence punishable by imprisonment. The offence which they were suspected of having committed was conspiracy to murder. They were taken to a police station in Aberdeen where they were each questioned separately by two police officers. Lauchlan was questioned from 11.14 to 16.45 hours, with breaks between 11.51 and 12.25 hours and 15.18 and 16.01 hours. He was cautioned at the start of his interview. He made it clear when it began that, on the advice of his solicitor, he would not be answering any questions that were put to him, and he maintained that attitude throughout what was a long and unproductive interview. One or two passages are, however, of interest. During the early stages of the interview the police restricted themselves to asking a series of questions. Lauchlan remained silent in response to all of them. He was then told (Appendix 1, p 492, MS p 820): What youve got to realize here is this is not going to go away we are not going to go away. Shortly afterwards Lauchlan broke his silence and this conversation took place (Appendix 1, p 497, MS p 825): WL Look if youre going to charge me with something charge me Ive had enough. DC2 I didnt mention, I have not mentioned charging you with anything. WL If not give this up. DC2 No Im interviewing you William okay. I intend to carry out the interview with or without your co operation I intend to carry out the interview. As the interview went on the questioning became more direct. Lauchlan was asked (Appendix p 512, MS p 840): Did you murder Allison McGarrigle? He did not respond. This question was then put to him (Appendix p 515, MS p 843): DC2 I will ask you for a final time with the weight of the evidence against you and your friend knowing something about the disappearance of Allison McGarrigle will you help us to find her remains? There was no response, so the question was put to him again: DC2 Im not asking you at this stage if you killed her. Im not asking you at this stage if you know who killed her. Im asking you at this stage whether or not you would consider helping us to find her remains. Its a separate question. Are you? .Are you prepared to help us to find Allison McGarrigle yes or no? Answer that one question Ill put to you . Ill finish the interview and put the tape off. So you dont, youre not interested in helping us. Canny go any further than that Wullie As the interview drew to a close one further attempt was made to elicit a response (Appendix p 526, MS p 854): DC1 . If you did not have anything to do with Allison McGarrigles death you have no reason not to speak to us, would you agree wi that? Youre not, your refusal to speak to us. The only reason I can think of is that you have something to do with her death. or that someone very close to you had something to do with her death and that out of loyalty you will not tell us. Which is it? Which is it William? Unless you can come up with another reason why you should refuse to speak to us about it. Its got to be one of those two. So which is it? Convince me otherwise. As the interview was about to end these final questions were put (Appendix p 528, MS p 856): DC2 Did you murder Allison McGarrigle? Did you? DC1 Did you kill Allison McGarrigle? Were you present when someone else did? Lauchlan did not answer them. He remained silent. ONeill was questioned from 10.53 to 16.31 hours, with a break from 13.02 to 14.19 hours. He was cautioned at the start of the interview. He gave his name and age and said that he was unemployed. But he refused to answer any further questions, most of which were met by the words No comment. Several minutes after the opening stage of the questioning there was this exchange (Appendix p 534, MS p 862): charging me and taking me to court. O/N Youre going to charge me int you? Youd be as well just DC1 Charlie, Charlie, were here, weve explained to you what were doing and were speaking to you right. Its as simple as that. I am hoping that you might find it within yourself to give us some assistance, right. Were no up here to crucify Charlie ONeill. As the questioning went on there was no change in ONeills attitude. In the course of a long narrative of the information that was in the hands of the police he was told (Appendix p 578, MS p 906): Im asking you quite bluntly Allison McGarrigles dead, youre involved in her death, youre the only person that can say how much or how little involvement you have but from the information that we have here there is no doubt whatsoever that you are involved in her death. Im giving you the opportunity sitting here in this room the noo tae say tae me, this is what happened, this is how it happened, it may even be why it happened ah dont know and here is what you need to know. Because its no going away Charlie, itll never go away. Itll never go away. Sometime later he was asked (Appendix p 597, MS p 925): Did you kill her Charlie? Was she just too much bother for you? He made no comment in reply. In the course of the next question he was told directly that the reason why he would not answer questions was quite simple: Because you killed her. At the end of the interview one of the interviewing officers said (Appendix p 602, MS p 930): Right what well do at the minute Charlie is well stop the interview. Well need to go and seek some advice. The appellants were not arrested or charged at the conclusion of their interviews, but were returned to Peterhead Prison to continue serving their sentences. Lauchlan was released on licence on 18 January 2002. In March of the following year, in breach of the notification requirements, he travelled to Spain. ONeill was released on licence on 22 May 2003. He too travelled to Spain shortly afterwards in breach of those requirements and met Lauchlan. On 22 April 2004 they were arrested in connection with the apparent abduction of a fourteen year old boy. Steps were then taken for them to return to the United Kingdom to face charges that they were in breach of the notification requirements under the Sex Offenders Act. On 15 March 2005 they pled guilty to these charges, and on 4 April 2005 they were each sentenced to three years imprisonment. On 5 April 2005 they were charged with the murder of Allison McGarrigle and with concealing and disposing of her body in an attempt to pervert the course of justice. They appeared on petition at Kilmarnock Sheriff Court where they were committed for further examination and remanded in custody. (c) articles 6(1) and (3)(c) Article 6(1) of the Convention states that in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. In Attorney Generals Reference (No 2 of 2001) [2003] UKHL 68, [2004] 2 AC 72, para 20, Lord Bingham of Cornhill analysed the article in this way: First, the right of a criminal defendant is to a hearing. The article requires that hearing to have certain characteristics. If the hearing is shown not to have been fair, a conviction can be quashed and a retrial ordered if a fair trial can still be held. If the hearing is shown to have been by a tribunal lacking independence or impartiality or legal authority, a conviction can be quashed and a retrial ordered if a fair trial can still be held. If judgment was not given publicly, judgment can be given publicly. But time, once spent, cannot be recovered. If a breach of the reasonable time requirement is shown to have occurred, it cannot be cured. In Dyer v Watson [2002] UKPC D1, [2004] 1 AC 379, 2002 SC (PC) 89, para 73, I said that these four rights can and should be considered separately, and that a complaint that one of them has been breached cannot be answered by showing that the other rights were not breached: see also Darmalingum v The State [2000] 1 WLR 2303, 2307 2308, per Lord Steyn. Delay is therefore to be seen as affording an independent ground of relief, whether or not there was prejudice or any threat to the fairness of the trial. The fact that an accused person has been convicted after a fair hearing by a proper court cannot justify or excuse a breach of his guarantee of a disposal of the charge against him within a reasonable time: Dyer v Watson, para 94. As Lord Bingham observed in Attorney Generals Reference (No 2 of 2001), para 26, the requirement that a criminal charge be heard within a reasonable time poses the inevitable questions: when, for the purposes of article 6(1), does a person become subject to a criminal charge? When, in other words, does the reasonable time begin? That is the question to which this issue is directed. But it is necessary also to notice article 6(3), which states that everyone charged with a criminal offence has certain minimum rights, including (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require. This is because it has been recognised that a person has a Convention right of access to a lawyer under that article, read in conjunction with article 6(1), before answering any questions put to him by the police in circumstances where the questioning might affect his right to a fair trial: Salduz v Turkey (2008) 49 EHRR 421; Cadder v HM Advocate [2010] UKSC 43, 2011 SC (UKSC) 13, [2010] 1 WLR 2601. The question posed by article 6(1) read together with article 6(3) is a different question from that posed by the reasonable time guarantee, although both questions require a date to be identified. That it should be within a reasonable time is one of the characteristics required of a hearing by article 6(1): see para 25, above. So too is the requirement that the hearing is fair. But the answer to the question whether the hearing is fair may depend on things that happened before it is known when the hearing will take place, or whether there will be a hearing at all. So the question can be put this way: when does the person become entitled to that protection to preserve his right to a fair trial? When, in other words, is he to be taken to have been charged for the purposes of those articles? In Ambrose v Harris [2011] UKSC 43, [2011] 1 WLR 2435, 2012 SC (UKSC) 53, the questions were raised as to the correct starting point for the purposes of the right to legal advice under article 6 in accordance with the principle in Salduz. In para 62 I said: The correct starting point, when one is considering whether the persons Convention rights have been breached, is to identify the moment as from which he was charged for the purposes of article 6.1. The guidance as to when this occurs is well known. The test is whether the situation of the individual was substantially affected: Deweer v Belgium [1980] 2 EHRR 439, para 46; Eckle v Germany [1982] 5 EHRR 1, para 73. His position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled: Shabelnik v Ukraine (Application No 16404/03) (unreported) given 19 February 2009, para 57. In Corigliano v Italy [1982] 5 EHRR 334, para 34 the court said that, whilst charge for the purposes of article 6.1 might in general be defined as the official notification given to the individual by the competent authority of an allegation that he has committed a criminal offence, as it was put in Eckles case 5 EHRR 1, para 73, it may in some instances take the form of other measures which carry the implication of such an allegation. As the Appeal Court indicated when it gave leave to appeal on this ground, it is with reference to this passage that further guidance is needed, as the appellants argument is that the date of their police interviews should be taken as being the date when the reasonable time begins: [2012] HCJAC 51, paras 2 and 3. Of the four cases decided by the Strasbourg court to which I referred in para 62 of Ambrose, however, only Shabelnik v Ukraine was concerned with the protection that is afforded by article 6(3)(c). Corigliano and Eckle were concerned with the reasonable time guarantee, and Deweer was concerned with the question whether the proceedings were within the scope of the article. The discussion in Shabelnik, para 52, of the manner in which articles 6(1) and (3)(c) are to be applied makes the point that article 6 may be relevant before a case is sent for trial, if and so far as the fairness of the trial is likely to be seriously prejudiced by an initial failure to comply with its provisions: see also Imbroscia v Switzerland (1993) 17 EHRR 441, para 36. In Ambrose v Harris, para 63 I said that the Lord Advocates submission that the protection of article 6(3)(c) was not engaged until the individual was taken into custody could not withstand the emphasis that the Strasbourg court puts on the consequences of an initial failure to comply with its provisions, as in Salduzs case, para 50 and Zaichenko v Russia (Application No 39660/02) (unreported) given 18 February 2010, para 35. These remarks were directed to the first of the three characteristics of a hearing required by article 6(1) that the hearing is fair not to the reasonable time guarantee. Yet the court went on in Shabelnik v Ukraine, para 52, to say this: The manner in which article 6(1) and (3)(c) is to be applied during the preliminary investigation depends on the special features of the proceedings involved and on the circumstances of the case. The moment from which article 6 applies in criminal matters also depends on the circumstances of the case, as the prominent place held in a democratic society by the right to a fair trial prompts the Court to prefer a substantive, rather than a formal, conception of the charge contemplated by article 6(1). This passage suggests, as does the first sentence of para 62 in Ambrose, that the date when a person becomes subject to a criminal charge and the reasonable time begins is the same as that when the person is charged for the purposes of article 6(3)(c): see also Yankov and Manchev v Bulgaria (Applications Nos 27207/04 and 15614/05) (unreported) given 22 October 2009, para 18, where the starting point was taken to be the date when the police took a statement from the applicant in which he confessed to taking part in the commission of the offence and not the date when a formal charge was directed against him. In some cases the same date may be equally appropriate for each of these two purposes. But they are separate guarantees, and it is not obvious that the relevant date for each of them must be the same. In Salduz v Turkey, para 50 the Grand Chamber pointed out that the right in article 6(3)(c) is one element, among others, of the concept of a fair trial in criminal proceedings in article 6(1). In para 55 it said that, in order for the right to a fair trial to remain sufficiently practical and effective, article 6(1) required that, as a rule, access to a lawyer should be provided as from the first interrogation of a suspect by the police unless there were compelling reasons to restrict that right. In Eckle v Germany, on the other hand, the court said in para 73 that in criminal matters the reasonable time referred to in article 6(1) begins to run as soon as a person is charged, and that this may occur on a date prior to the case coming before the trial court, such as the date of arrest, the date when the person was officially notified that he would be prosecuted or the date when the preliminary investigations were opened. In Attorney Generals Reference (No 2 of 2001), para 27 Lord Bingham said that as a general rule the relevant period for this purpose will begin at the earliest time at which a person is officially alerted to the likelihood of criminal proceedings against him a formulation which he hoped might be easier to apply in this country. The reasoning in paras 50 55 of Salduz v Turkey at no point examines the meaning of the word charged but concentrates instead on the requirements of a fair trial. This suggests that different approaches can be applied to the two guarantees as to what is the relevant date. Article 6(3)(c), which applies where a person is charged with a criminal offence, must now be read in a way that makes the guarantee of a fair trial practical and effective. The first interrogation of a suspect may take place, and often does, before the person is officially alerted to the likelihood of criminal proceedings against him. To wait until the stage is reached when there is sufficient evidence to bring a charge before the suspect has the right of access to a lawyer could seriously prejudice his right to a fair trial. So the focus, for the purposes of this part of article 6, is on the state of affairs when the suspect is first interrogated. Contrast that with the focus of the reasonable time guarantee in article 6(1). It is on the running of time, not on what is needed to preserve the right to a fair trial. Its rationale is that a person charged should not remain too long in a state of uncertainty about his fate: Wemhoff v Federal Republic of Germany (1968) 1 EHRR 55, para 18; Stgmuller v Austria (1969) 1 EHRR 155, para 5. As Lord Bingham said in Attorney Generals Reference (No 2 of 2001), para 16, a person who is facing conviction and punishment should not have to undergo the additional punishment of protracted delay, with all the implications that it may have for his health and family life. So the date as from which time runs is taken to be the date as from which his position has been substantially affected by the official notification. Practice as to how these matters are handled varies from state to state, but in the United Kingdom this could well be some time after the date when he was first subjected to police questioning. (d) discussion It is, of course, plain that the appellants were entitled to the protection of article 6(1) read together with article 6(3)(c) on 17 September 1998 when they were interviewed. Salduz v Turkey had not yet been decided, nor had Cadder v HM Advocate. So they were not offered the protection of having a lawyer present during the police questioning. In the event the absence of a lawyer made no difference, because the appellants knew perfectly well that they were entitled to remain silent and were able steadfastly to resist all attempts to persuade them to provide the police with answers that might incriminate them. Their position was, however, indistinguishable from that of the appellant in Cadder. Like him, they were being questioned as detainees under section 14 of the 1995 Act. They were also being questioned as suspects. In Ambrose v Harris, para 63, I said that the moment at which the individual is no longer a potential witness but has become a suspect provides as good a guide as any as to when he should be taken to have been charged for the purposes of article 6(1). For completeness I should have said for the purposes of article 6(1) read in conjunction with article 6(3)(c), as it is the guarantee of a fair trial that the Salduz protection seeks to serve. I would hold therefore that the date as from which reasonable time begins to run is the subject of a separate guarantee from the guarantee that the trial will be fair, and that it requires to be approached separately. It is not enough that the appellants were being subjected to questioning in circumstances that might have affected their right to a fair trial. The question is whether they were charged on that date, in the sense indicated by Eckle v Germany, para 73, as explained by Lord Bingham in Attorney Generals Reference (No 2 of 2001), para 27. Were they officially notified that they would be prosecuted as it was put in Eckle, or officially alerted to the likelihood of criminal proceedings against them as it was put by Lord Bingham, when they were being interviewed? The appellants were certainly not at any stage of their interviews charged in the formal sense. They both asked the police whether they were going to be charged, and they both received indications to the contrary: see paras 19 and 22, above. Lauchlan was told that he was being interviewed. In ONeills case the interviewer avoided the question. But the fact that the question was asked at all is quite revealing. The appellants had been through this process before. They knew what to expect. It must have been obvious to them that the reason why they were not being charged was that the police did not yet have enough evidence to do so. They were both asked directly whether they had killed Mrs McGarrigle. But, in the context in which these questions were being put, it cannot be said that that this amounted to an official notification that they were likely to be prosecuted. All the indications during the prolonged questioning to which they were subjected were that the police were not in a position to report the proceedings with a view to prosecution without having obtained more evidence. The attitude of the police at this stage was entirely understandable. They had not yet established that Mrs McGarrigle was dead. Her body had not been found. In the absence of any evidence to show where, when and how she had died, they were in no position to initiate criminal proceedings against the appellants for her murder. All they had were suspicions based on a volume of circumstantial evidence. That was why so much of the appellants questioning was directed to trying to establish where her body was. It was not until 5 November 1998 that the missing person investigation was scaled down due to lack of progress. The police were still seeking additional evidence by means of press releases, including publications in the Big Issue magazine in June 2002. In August 2003 they received hearsay information to the effect that the appellants had killed Mrs McGarrigle and disposed of her remains in a wheelie bin which was thrown off the back of a boat in Largs. That led to the further inquiries that resulted in their being in a position to charge the appellants on 5 April 2005. That was not the state of affairs when they were being interviewed. I would therefore hold that the date when the reasonable time began was 5 April 2005, and not 17 September 1998 when the appellants were detained and interviewed under section 14 of the 1995 Act. Apparent bias (a) the facts The indictment which was served on the appellants on 10 September 2008 contained eighteen charges, of which the first three concerned the murder of Mrs McGarrigle. The remaining charges were of, or were related to, sexual offences against children. On 17 July 2009, after a preliminary hearing, Lord Kinclaven ordered that the murder charges were to be separated from the sexual offences charges. The consequence of his determination was that the appellants were tried in 2010 in a sequence of two trials before the same judge, Lord Pentland, but before different juries and with a different Advocate Depute. The trial of the sexual offences charges took place between 26 April and 12 May 2010. The Crown accepted pleas of not guilty to some of those charges before the trial began. It withdrew the libel on a number of others at the close of the Crown case, and a submission of no case to answer was sustained with regard to one more. In the result three charges went to the jury, all of which related to sexual offences against boys who were aged 14 and 6 years old at the time of the offences. ONeill was found guilty on all three, and Lauchlan was found guilty on two of them. When the verdicts had been returned and recorded the Advocate Depute moved for sentence. He tendered a schedule of previous convictions in respect of each appellant. He drew attention to the fact that Lauchlan had been convicted in 1998 of two charges of sodomy and four charges of shameless indecency and that in 2005 he had been convicted of offences under sections 2 and 3 of the Sex Offenders Act 1997. He also drew attention to similar convictions in 1998 and 2005 in the case of ONeill. He then mentioned that the Crown had lodged an application for a lifelong restriction order, for which a risk assessment under section 210B of the 1995 Act (as inserted by section 1 of the Criminal Justice (Scotland) Act 2003) would be required, to be made in both cases. He asked that consideration of this matter be continued until the conclusion of the trial on the murder charges. He explained, for the benefit of the jury who had not been made aware of the fact that there was to be another trial, that for this reason there had been an embargo on public reporting of the trial on the sexual offence charges. He said that, as there would be a prejudice to the next trial if the judge were to do any public act at that stage, the matter should be continued. Having ascertained that the solicitor advocates for the defence had no objection to the continuation, the trial judge addressed the appellants. The judge told them first that, as he intended to make the appropriate order under the Sexual Offences Act 2003, he was required by the legislation to state to them both that they had again been convicted of sexual offences to which Part 2 of that Act applied and that they were subject to the notification requirements contained in that Act. He told them that the court had certified those facts, and that the clerk of court would give them a copy of the relevant certificate together with a notice which gave further details of the notification requirements with which they must comply. Then, while the jury were still present, he said this: Having regard to your very serious records, and to the nature of the offence of which you stand convicted on the present indictment, it is clear that you are both evil, determined, manipulative and predatory paedophiles of the worst sort. Beyond that I intend to reserve any observations which I may have to make until the outcome of the next stage of the proceedings is known; that is after you have been tried on the remaining charges to which the advocate depute has made reference. I shall therefore adjourn all questions of sentence until Friday of next week, and I shall continue consideration of the Crowns motion made under section 210B of the 1995 Act for an assessment order. No objection was made at the start of the murder trial on 17 May 2010 to the fact that Lord Pentland was to preside over that trial too, nor was any motion made that he should recuse himself. Two events occurred in the course of that trial which were later commented on. The first occurred on 27 May 2010 when an adjournment of the trial was sought on behalf of ONeill by his solicitor advocate, Mr Carroll. He was said to be suffering from a severe headache and unable to follow what was going on. This was said to be a chronic problem for which he had a prescribed medication which he required to take. The trial judge did not accede to this request immediately but closely questioned Mr Carroll and invited the Advocate Depute to make enquiries with the prison authorities. During a brief adjournment ONeill was given paracetamol and then indicated that he was fit to continue. The second event occurred when a Crown witness, DC Wilkie, became incoherent and obviously unwell while being cross examined by Mr Carroll. The judge adjourned the proceedings immediately to allow the witness to receive medical treatment. He was fit to continue and complete his evidence the next day. (b) the issue This issue was raised on behalf of ONeill only in the Appeal Court. As has already been explained in para 10 above, it was the subject of an amended note of appeal which was lodged shortly before the hearing before the Appeal Court of his application under section 107(8) of the 1995 Act. Mr McVicar did not seek to adopt it on behalf of his client Lauchlan, although he pointed out that if the argument was sound its effect would be to his clients benefit. The devolution issue seems only to have emerged in the course of oral argument in the Appeal Court when it was considering the applications for leave to appeal to this court. It decided to give leave on this issue because it was recognised that the splitting of the trial into two phases before two juries and the resulting presentation of previous convictions and the judges remarks at the end of the first phase were very unusual circumstances. Mr Carroll said that the fact that the trial judge was shown his clients previous convictions was not important to his argument, as it was not unusual for a judge to see the accuseds previous convictions before the start of or during a trial: OHara v HM Advocate 1948 JC 90; Leggate v HM Advocate 1988 JC 127; 1995 Act, section 275A (as inserted by section 10(4) of the Sexual Offences (Procedure and Evidence) (Scotland) Act 2002). But they were the trigger, as he put it, for the comments by the trial judge on his clients character. It was to those comments that he directed his argument. The issue has been focussed in the sixth issue in the statement of facts and issues on the appellants behalf in these terms: Whether (i) the conduct of the trial judge can be said to have given rise to a legitimate concern as to the appearance of an absence of impartiality in the context of the appellants right to a fair trial by an impartial tribunal in terms of article 6(1) of the European Convention on Human Rights; and (ii) if the answer to issue 6(i) is affirmative, whether the act of the Lord Advocate in persevering with the trial was incompatible with the appellants rights under article 6(1). (c) the authorities The test for apparent bias which was laid down in Porter v Magill [2001] UKHL 67; [2002] 2 AC 357 was designed to express in clear and simple language a test which was in harmony with the objective test which had been applied by the Strasbourg court. It is set out in para 103 of the judgment in that case in these terms: The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. In Lawal v Northern Spirit Ltd [2004] 1 All ER 187, [2003] ICR 856, para 14 Lord Steyn said that the purpose and effect of the modification which it made to the common law were to bring the common law rule into line with the Strasbourg jurisprudence. Lord Bingham of Cornhill made the same observation in R v Abdroikov [2007] UKHL 37, [2007] 1 WLR 2679, para 14 when he said that there is now no difference between the common law test of bias and the requirement under article 6 of an independent and impartial tribunal. In Szypusz v United Kingdom (Application No 8400/07) (unreported) given 21 September 2010, para 39 the Strasbourg court acknowledged that its jurisprudence had been taken into account in Porter v Magill, and set out that test. It also acknowledged, in para 40, the further guidance in Helow v Secretary of State for the Home Department [2008] UKHL 62, 2009 SC (HL) 1, [2008] 1 WLR 2416 with regard to the attributes of the fair minded observer as background to the issue that it had to decide. The court is invited in this case to examine the allegation of apparent bias after the proceedings that are said to have been affected by it have taken place. But the principles to be applied are the same as those which determine the question whether, because of things he has said or done previously, the judge should recuse himself. So it may be helpful to look at cases in which it was the judges decision not to recuse himself that was in issue. In President of the Republic of South Africa v South African Rugby Football Union, 1999 (4) SA 147, 177 the Constitutional Court of South Africa made these comments on the position of judges (in that case, members of the Constitutional Court itself) who, it was said, ought to have recused themselves: The question is whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the adjudication of the case, that is a mind open to persuasion by the evidence and the submissions of counsel. The reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to administer justice without fear or favour; and their ability to carry out that oath by reason of their training and experience. It must be assumed that they can disabuse their minds of any irrelevant personal beliefs or predispositions. They must take into account the fact that they have a duty to sit in any case in which they are not obliged to recuse themselves. At the same time it must never be forgotten that an impartial judge is a fundamental prerequisite for a fair trial and a judicial officer should not hesitate to recuse herself or himself if there are reasonable grounds on the part of a litigant for apprehending that the judicial officer, for whatever reasons, was not or will not be impartial. That passage was quoted with approval by the Court of Appeal in Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451, para 21. It referred also in paras 22 24 to three extracts from Australian authorities about the duty of the judge to hear and determine the cases allocated to him which it found to be persuasive: In re JRL, EX arte CJL (1986) 161 CLR 342, 352; In re Ebner (1999) 161 ALR 557, para 37; Clenae Pty Ltd v Australia and New Zealand Banking Group Ltd [1999] VSCA 35. In para 25 of Locabail there is an extensive discussion of the grounds on which objection to a judge could or could not reasonably be taken. While it was emphasised that every application for recusal must be decided on the facts and circumstances of the individual case, the court noted that a real danger of bias might well be thought to arise if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such persons evidence with an open mind on any later occasion. In JSC BTA Bank v Mukhtar Ablyazov (Recusal) [2012] EWCA Civ 1551, the question was whether a judge had been right not to recuse himself as the nominated judge of trial, in circumstances where he had had to hear, prior to trial, an application to commit one of the parties for contempt of court and had found a number of contempts proven, by reason of the doctrine of apparent bias in Magill v Porter. Rix LJ, delivering a judgment with which Toulson and Maurice Kay LJJ agreed, pointed out in para 65 that, although the principles of apparent bias are now well established and were not in dispute in that case, the application of them is wholly fact sensitive. In para 70 he said that it seemed to him that the critical consideration is that what the first judge does, he does as part and parcel of his judicial assessment of the litigation before him: He is judging the matter before him, as he is required by his office to do. If he does so fairly and judicially, I do not see that the fair minded and informed observer would consider that there was any possibility of bias. That was a case of civil litigation, but I do not think that there is any difference in principle between the position of a judge in a case of that type and the situation where it is said that there is apparent bias on the part of a judge in a criminal trial. In Helow v Secretary of State for the Home Department, the question was whether there was a real possibility that Lady Cosgrove was biased by reason of her membership of an association and her receipt of its quarterly publication which contained some articles which were fervently pro Israeli and antipathetic to the PLO, of which the appellant was a member. Among the reasons that were given for holding that there was not any real possibility of bias in her case were that the context is crucially important: para 4, by myself; that Lady Cosgrove was a professional judge with years of relevant training and experience: para 23, per Lord Rodger of Earlsferry; and the taking of the judicial oath, albeit as more of a symbol than of itself a guarantee of the impartiality which any professional judge is by training and experience expected to practise and display: para 57, per Lord Mance. (d) discussion What then of this case? The obvious starting point is the context. When he made his remarks, Lord Pentland was addressing the appellants in the performance of his judicial function. The fair minded and informed observer would appreciate that he was a professional judge who had taken the judicial oath and had years of relevant training and experience. He would hear and understand the context in which the remarks were made. They were made in open court from the bench while he was performing his duty as a judge at the trial. He would appreciate too, that when the judge was presiding over the next trial, he would be doing so in the performance of his duty to preside over that case. He would understand, of course, that while the facts were a matter for the jury, the judge too had functions to perform which required him to be impartial. But it would only be if the judge expressed outspoken opinions about the appellants character that were entirely gratuitous, and only if the occasion for making them was plainly outside the scope of the proper performance of his duties in conducting the trial, that he would doubt the professional judges ability to perform those duties with an objective judicial mind. The context indicates that nothing like that occurred here. The judge had just told the appellants, as he was required to do, that they were subject to the notification requirements. He had been told by the Advocate Depute that an application was to be made for a risk assessment order. He had been asked to defer consideration of it until after the conclusion of the murder trial, but the appellants were entitled to be given some indication as to what they might expect. His comments on the appellants character were directly relevant to that issue. For reasons that would have been obvious in the light of the Advocate Deputes submissions, the judge had to restrict himself to those few comments. He told them that he intended to reserve any further observations until the outcome of the next stage of proceedings was known. The observer would also understand that, if the judge had been passing sentence on the appellants, the remarks he made would have been entirely appropriate as background to the sentences which he would have been obliged to pass. There is one other circumstance which, in this case, can properly be taken into account. The appellants and their solicitor advocates were all present when the remarks were made, and they were all there again at the commencement of the murder trial. Yet no objection was made by any of them either at the end of the sexual offences trial or at the start of the murder trial to the fact that Lord Pentland was to preside over the murder trial. The fair minded and informed observer would not have overlooked this fact. It might well have seemed to him to be odd, if there was any real basis for an objection, that those with the most immediate interest did not take the opportunity of raising the point at that stage. Mr Carrolls explanation was that a challenge at that stage would not have been likely to succeed, as the judge would almost certainly have rejected it. He also said that his objection would have fallen away if the murder trial had been conducted fairly. He pointed to the contrast between the judges handling of the incident when he told the judge that his client was unwell and his handling of the incident when DC Wilkie became ill in the witness box. I am not persuaded by Mr Carrolls explanation. The point which he had to answer is not, I would stress, one of waiver. It is simply that the fair minded and informed observer would take account of the fact that it did not seem to occur to those with the most obvious interest to do so, or their advisors, that the judge had trespassed beyond the proper performance of his duties when he commented on the appellants character. As for his conduct of the trial, the judges concern that no proper reason had been given for interrupting the proceedings when he was told that the appellant was not well and his reaction to the sudden illness of DC Wilkie in the witness box were both readily understandable. I do not find here any grounds for doubting his impartiality. But the only relevant question is whether he should, or should not, have been conducting the trial at all in view of the comments he made at the end of the previous trial about the appellants character. For these reasons I cannot find any basis for the suggestion that the judge was apparently biased, and I would reject it. It follows that the Lord Advocate did not act incompatibly with the appellants article 6(1) right to a fair trial by proceeding with the appellants trial on the murder charges before Lord Pentland. We were addressed on the question whether the appellants waived their right to found on their Convention right, but I do not need to examine that issue as I do not accept that their right was breached. Conclusion (1) that the date when the reasonable time began for the purposes of the appellants article 6(1) Convention right was 5 April 2005; and (2) that the Lord Advocates act in proceeding with the trial on the murder charges was not incompatible with the appellants article 6(1) right to a trial before a tribunal that was independent and impartial. The proceedings must now be remitted to the High Court of Justiciary. I would determine the two compatibility issues that are before us by holding

The issues in these appeals relate to the right to a fair trial. Alison McGarrigle had a son, Robert, by her former husband. Robert was subject to a residential supervision order requiring him to live with his father during the week but permitted him to visit his mother on Saturdays. On 14 June 1997 Robert did not return to his fathers address and instead he and his mother went to live with the appellants in a house in Largs. A drinking session took place there on or about the 20 June 1997 at which a number of people including the appellants, Robert and Mrs McGarrigle were present. The next morning she was gone and was never seen by Robert again. She was reported to police as missing on 16 February 1998. The investigation continued but in the meantime, on 17 June 1998, the appellants were convicted of sexual offences including offences against Robert McGarrigle and were sentenced to 6 and 8 years imprisonment respectively. Whilst serving their sentences the appellants were taken by police for questioning on suspicion of conspiracy to murder Alison McGarrigle. They were asked by the officers whether they were involved in her murder, but they both remained silent. Owing to a lack of evidence at that time, proceedings were not commenced against the pair. The appellants were eventually charged in 2005 for the murder of Mrs McGarrigle and remanded in custody. On 10 June 2010 the appellants were found guilty in the High Court of Justiciary at Glasgow of the murder of Mrs Allison McGarrigle between 21 June and 1 September 1997 and of a subsequent attempt to defeat the ends of justice by disposing of her body in the sea. In a separate trial held immediately before, the appellants were found guilty of a series of sexual offences relating to children. Both trials took place in front of the same judge, Lord Pentland, but with different juries. After the verdict in the first trial the Advocate Depute moved for sentence and handed the judge a list of the appellants previous convictions. The judge reserved sentencing for the sexual offences until after the trial for murder was complete. At the time of informing the appellants of this, the judge referred to their records and made comments to them that they were evil, determined, manipulative and predatory paedophiles of the worst sort. The two issues for the Supreme Court were: (1) when the appellants were charged for the purposes of their right to a trial within a reasonable time in terms of article 6(1) of the Convention (the appellants argued that time started to run when they were first questioned in 1998 and therefore there had been a breach of their right); and (2) whether the comments and conduct of the trial judge were such as to breach the appellants right to a fair trial by an impartial tribunal in terms of article 6(1) of the Convention and, if so, whether the act of the Lord Advocate in persevering with the trial was incompatible with the appellants rights under article 6(1). Both issues arose from the refusal of the Appeal Court to grant leave for the relevant grounds of appeal to be argued in the appeal in Scotland. The Appeal Court did however grant permission to appeal its refusal to the Supreme Court. The Supreme Court held that it had jurisdiction to consider the issues on the basis that they were compatibility issues in terms of the Criminal Procedure (Scotland) Act 1995 (as amended by the Scotland Act 2012), issue (1) being an appeal against a decision of the Appeal Court and issue (2) being a reference from the Appeal Court. The court determines the two compatibility issues as follows: (1) that the date when the reasonable time began for the purposes of the appellants article 6(1) Convention right was 5 April 2005; and (2) that the Lord Advocates act in proceeding with the trial on the murder charges was not incompatible with the appellants article 6(1) right to a trial before a tribunal that was independent and impartial. The proceedings will be remitted to the High Court of Justiciary [58]. Lord Hope gives the judgment of the court. The meaning of the word charged has been considered in a number of cases regarding article 6(1), which provides that in the determination of any criminal charge against him a person has the right to a fair trial within a reasonable time and article 6(3)(c) which provides a right to legal assistance for anyone charged with a criminal offence [25 32]. The focus of article 6(3)(c) is on the state of affairs when the suspect is first interrogated, as to wait until the stage is reached when there is sufficient evidence to charge before the suspect has the right of access to a lawyer could seriously prejudice his right to a fair trial. This is in contrast with the reasonable time guarantee of article 6(1): it relates to the running of time, not on what is needed to preserve the right to a fair trial. The rationale is the person should not remain too long in a state of uncertainty. Time runs from the date which the suspects position is substantially affected by the official notification. In the United Kingdom this could be some time after he is first questioned [33 34]. The date from which reasonable time begins is the subject of a separate guarantee from the guarantee that the trial will be fair and falls to be approached independently [36]. The appellants were certainly not at any stage of their interviews charged in the formal sense. They were both asked directly whether they killed Mrs McGarrigle. But, in the context in which these questions were being put, it cannot be said that this amounted to an official notification that they were likely to be prosecuted [37]. In the absence of any evidence to show where, when and how she had died, the police were in no position to initiate criminal proceedings. In August 2003 they received information that led to further enquiries and resulted in the appellants being charged with murder in 2005 [38]. On the issue of apparent bias, the test is contained in Porter v Magill [2001] UKHL 67 and considered in a number of authorities [47 52]. It would only be if the judge expressed outspoken opinions about the appellants character that were entirely gratuitous, and only if the occasion for making them was plainly outside the scope of the proper performance of his duties, that the fair minded and informed observer would doubt the judges ability to perform those duties with an objective judicial mind. The context indicates that nothing of the kind happened in this instance [53 54]. Furthermore, no objection was made by the defence at any point to the fact that Lord Pentland was to preside over the murder trial as well and there are no grounds for doubting his impartiality [55 56].