How will the courts deal with conflicting statutory duties in judicial review claims?
One of the most important functions of judicial review claims is to hold public bodies to account and ensure they carry out their statutory duties within the boundaries of their power. In R (VIP Communications Ltd (In Liquidation)) v Secretary of State for the Home Department [2023] UKSC 10 the Supreme Court considered how the courts should approach instances where there appears to be a conflict between the statutory duties of a regulator and the Secretary of State (i.e. central government) in circumstances where the Secretary of State directed the regulator not to exercise its statutory powers. The Supreme Court upheld the Secretary of State’s direction and rejected the Court of Appeal’s approach to statutory construction which had concluded that the direction was ultra vires.
Background
This case concerns the regulation of telecommunications equipment. Under s.8(4) Wireless Telegraphy Act 2006 (WTA), the Office of Communications (Ofcom) has a duty to make regulations exempting the installation and use of certain wireless telegraphy equipment from the requirement for a licence if satisfied certain conditions are met. However, under s.5(2) Communications Act 2003 (CA 2003), Ofcom is under a duty to carry out its functions in accordance with directions given by the Secretary of State. Pursuant to s.5(3), the Secretary of State’s powers to give such directions are confined to limited purposes, which include the interests of national security and public safety.
The Secretary of State identified a national security concern arising in relation to commercial multi-user gateways (COMUGs) which were exempt from licencing requirements. These gateways allow calls and text messages to be routed from landlines to mobile networks, but the gateways conceal a caller’s communication data, such as their location and identity. The Secretary of State issued a direction to Ofcom under s.5(2) CA 2003 that COMUGs should not be exempted from the requirement for a licence. The Secretary of State accepted that this direction instructed Ofcom not to comply with its duty under s.8(4) WTA.
The claimant (VIP Communications Ltd) challenged that direction, arguing that it was ultra vires (i.e., outside of the Secretary of State’s powers under s.5 CA 2003) and should be quashed. Both the court of first instance and the Court of Appeal upheld the challenge. They found that the Secretary of State had no power under s.5 CA 2003 to direct Ofcom not to carry out its statutory duty under s.8(4) WTA where Ofcom was satisfied that the conditions (set out in s.8(5) WTA) were met.
Decision
The Supreme Court had to consider the relationship between the duty of Ofcom to comply with directions given by the Secretary of State and the duty of Ofcom, if satisfied of the specified matters, to make exemption regulations. Did the Government give Ofcom complete control over the power to exempt those who met the relevant criteria from having to meet licencing requirements? Or did the Secretary of State retain overall power by being able to implement directions as to how Ofcom should carry out their duty?
The Supreme Court allowed the appeal and dismissed the claimant’s application for judicial review.
The Supreme Court considered the purpose and the context of the legislation governing wireless telegraphy. It reviewed the legislation governing this area before the CA 2003 and WTA came into force, noting that previously the Government had sole responsibility for regulation. The CA 2003 conferred responsibility for most of the functions carried out by the Secretary of State on Ofcom. However, the Government continued to be responsible for national security which is a core function of government, and Ofcom has no power to have regard to national security issues.
The Supreme Court noted that the courts below had accepted that s.5 CA 2003 gave the Secretary of State wide powers to intervene for the limited purposes set out in s.5(3) in many aspects of Ofcom's functions. For example, the Secretary of State could direct Ofcom to make a licence exemption subject to conditions designed to address issues of national security. However, those courts had identified a limit to those powers where Ofcom was under a duty to make exemption regulations under s.8 WTA. The Court of Appeal had accepted that there could be circumstances where the making of such regulations would prejudice national security but where the Secretary of State would be powerless to prevent the making of such regulations. The Court of Appeal had suggested that the answer to that lacuna would be to enact amending legislation.
The Supreme Court rejected that approach and reasoned that, “in circumstances where the legislation has carefully divided responsibility between the Government and the regulator, reserving to the former powers only in respect of matters of vital national interests… , it would be very surprising if those powers did not apply so as to prevent the making of an exemption regulation where, in the reasonable and proportionate judgment of the Government, the regulation would prejudice those interests”.
The Supreme Court also rejected a principle of construction adopted by the Court of Appeal. The Court of Appeal had accepted that there was a general principle of statutory construction that, in the absence of clear words, a statutory power to give a direction cannot extend to directing a person not to comply with a statutory duty under the same or another statute, and s.5 CA 2003 contained no such clear words. The Supreme Court held there was no such general principle of statutory construction. It was not a principle or presumption of the sort which applies when a court is asked to determine whether a statutory provision overrides fundamental rights or the rule of law. It would be relevant to the assessment of rival interpretations of a provision that, on one view, it would permit a direction to be given that would preclude the performance of what would otherwise be a statutory duty, but that was no more than one of the factors which would need to be considered in arriving at the proper construction of the provision.
Key takeaways
This is an important case in relation to the courts’ approach to resolving conflicts between the statutory duties of a regulator and of central government. There are likely to be further disputes in this area generated by conflicts between high level policy making / interventions by central government and the regulators’ exercise of their statutory duties in the ordinary course. In this case, the Supreme Court favoured a more expansive approach to the limits of the statutory powers of central government, which appears to have been influenced by the national security context (i.e., an area of policy generally considered to be reserved to central government). In terms of the detail of the Supreme Court’s legal analysis, it is notable that the Supreme Court rejected that there was a general principle of statutory construction to resolving conflicts between statutory duties. The Court considered both the existing legislation and what came before it, to identify the purpose behind the legislation in question and the powers it conferred.
With thanks to Aimee Hardham for her assistance in preparing this briefing.