Update: local government

The application of the legal principles disqualifying decision-makers on grounds of bias and predetermination has proved to be contentious and problematic in relation to elected members. On the one hand, the democratic process necessarily involves those who stand for election or hold office expressing and holding opinions on questions of policy. On the other hand, the case law in recent years has appeared to be moving to a more rigorous application of apparent bias. Decision-makers have been held to be disqualified not only because of an interest in the matter under consideration, or on grounds of having a 'closed mind' and thus actually predetermining the decision, but also on the grounds of an appearance or real possibility of bias or predetermination arising from prior consideration of the issues.

Island Farm Developments

In R (Island Farm Developments Ltd) v Bridgend CBC [2006] EWHC 2189 (Admin), Collins J confronted the problem head on, taking a robust approach in favour of the democratic reality and challenging the application of principles that seemed to conflict with it.

The case concerned a proposal to sell the authority's land to a developer, which had been progressed under the authority's former administration to a stage just short of exchange of contracts. The development (for which planning permission had been granted by the former administration) had, however, been a contentious local issue, and there was a change of political control in the authority as a result of local elections in which the question of the development was considered to have played a part. The authority's new executive then decided not to proceed with the sale of the land. Some members of the new executive had publicly expressed or allied themselves to opposition towards the development; others had previously voted against the development or been involved in decisions critical of the sale of the authority's land. The developer challenged the involvement of the members on grounds of actual and apparent predetermination
and bias.

Collins J held at [23]:

'

In principle, councillors must in making decisions consider all relevant matters and approach their task with no preconceptions. But they are entitled to have regard to and apply policies in which they believe, particularly if those policies have been part of their manifestos. The present regime believed that the development'¦ in accordance with the planning permission was wrong and they had made it clear that that was their approach. In those circumstances, they were entitled to consider whether the development would lawfully be prevented'¦ It follows that in the context of a case such as this, I do not believe that bias can exist because of a desire to ensure if possible that the development did not take place. If that approach had been taken, it would have been lawful.'

Contrast with previous case law

The legal analysis used by Collins J was significantly different from '“ and directly questioned '“ that which had been used in a number of recent cases, most particularly, the decision of Richards J in R (Georgiou) v Enfield LBC [2004] EWHC 779 (Admin). In Georgiou, it had been held that a grant of planning permission was vitiated by a real possibility of bias arising from prior support for the planning application from some members, regardless of whether there was any actual bias or predetermination. In contrast, Collins J advanced an analysis of realpolitik:

'[30] '¦ Councillors will inevitably be bound to have views on and may well have expressed them about issues of public interest locally. Such may, as here, have been raised as election issues. It would be quite impossible for decisions to be made by the elected members whom the law requires to make them if their observations could disqualify them because it might appear that they had formed a view in advance.

'[31] The reality is that councillors must be trusted to abide by the rules which the law lays down, namely that, whatever their views, they must approach their decision-making with an open mind in the sense that they must have regard to all material considerations and be prepared to change their views if persuaded that they should'¦ [U]nless there is positive evidence to show that there was indeed a closed mind, I do not think that prior observations or apparent favouring of a particular decision will suffice to persuade a court to quash the decision.'

On the facts, Collins J held that the evidence demonstrated that the members of the executive were prepared to and did consider the respective arguments, and were prepared to change their minds if the material persuaded them to do so. He held that weight could be attached to the members' own witness statements in this regard, departing again from the approach of Richards J in Georgiou.

Implications for ethical standards

The decision in Island Farm Developments is a reaffirmation of principles long-recognised in cases such as R v Amber Valley DC ex p Jackson [1985] 1 WLR 298, QBD, and R v Waltham Forest LBC ex p Baxter [1988] 1 QB 419, CA, the effect of which had become diluted in the developing case law on apparent bias. That case law had found expression in guidance issued for English authorities by the Standards Board for England (Lobby Groups, dual-hatted members and the Code of Conduct), which may now accordingly need to be read with some caution.

Contracts and fettering discretion

It is an established principle of administrative law that the exercise of a discretion should not be fettered, as for example by the making and application of wholly inflexible policies. The application of that principle, however, in the context of binding contractual arrangements, entered into by local authorities in the exercise of statutory powers, and having the effect of requiring powers to be exercised in a particular manner in the future, has in the past given rise to difficulty and dispute.

The problem was re-visited in R (Kilby) v Basildon DC [2006] EWHC 1892 (Admin), where the authority had previously issued standard tenancy conditions, which included a provision that they could only be varied if a majority of their tenants' representatives agreed. The authority later issued new conditions, using statutory powers to vary the terms, and omitting the provision requiring agreement to a variation. The authority argued that the provision was an unlawful fetter, or an unlawful delegation to the tenants' representatives, and was therefore entirely void.

The court agreed that the provision was void. It held that, on their face, the authority's statutory powers to vary the tenancy conditions were exhaustive and did not permit variation as provided under the tenancy; but it also agreed on a wider footing that the provision was an illegitimate fetter on the exercise of those powers, which would frustrate the intention and purpose of Parliament. The court additionally held that the provision, if void, could not give rise to a legitimate expectation, because it could not be a proper expectation that the authority should have to undertake an unlawful process.

Legitimate expectation

The court rejected the notion of any enforceable legitimate expectation in R (Lindley) v Tameside MBC [2006] EWHC 2296 (Admin), a case involving a decision to close a care home. That decision had been challenged by residents at the home, including the claimant, though by the time of the hearing all of them, apart from the claimant, had abandoned the challenge. The claimant had originally alleged that his needs had not been properly assessed and that they could not be met at a new facility to which the local authority had previously sought to reassure the residents that they would be able to move. When the claimant's needs were later assessed by the authority, however, they were found to be such that they could not be met at the new facility. The claimant amended his challenge to allege that he had a legitimate expectation that he would after all be moved to the new facility.

The court held that, at the time when he was alleging that the new facility could not provide for his needs, the claimant was accepting that in so far as there was any expectation, it could not legitimately be met. He had accordingly not relied on any commitment that may have been made by the authority. In any event, the court held it would not require the authority to move
the claimant to the new facility, even if there were a legitimate expectation, because to
do so would be contrary to his welfare needs (and accordingly contrary to the public interest).

Private care homes and the Human Rights Act

It was an odd sight, in R (Johnson) v Havering LBC [2006] EWHC 1714 (Admin), to see the government arguing that a private body running a residential care home would be a public authority for the purposes of the Human Rights Act 1998, where it provided accommodation pursuant to arrangements made by a local authority under ss21 and 26 of the National Assistance Act 1948. The context was a decision by the local authority to seek to transfer two homes to a private sector operator and to close two other homes once the residents had been moved. The decision had been arrived at because of improved statutory standards for care homes, requiring the upgrading of facilities. The government and the Disability Rights Commission intervened in the proceedings, and argued that in such a case, the private sector operator would be exercising public functions and accordingly subject to the general duty in s 6 of the 1998 Act, with the effect that the human rights of the residents would not be affected by the transfer and closure.

The court rejected the argument. Forbes J held that he was bound by the contrary decision of the Court of Appeal in R (Heather) v Leonard Cheshire Foundation [2002] 2 All ER 936. That decision was unaffected by the later decision of the House of Lords in Aston Cantlow Parochial Church Council v Wallbank [2004] 1 AC 546, and it had subsequently been held to remain good law by the Court of Appeal in R (Beer) v Hampshire Farmers' Markets Ltd [2004] 1 WLR 233. Nor did recent Strasbourg case law justify any departure from the principles established in Leonard Cheshire. It did not follow from the premise that the local authority were performing a public function by providing accommodation under s 21 of the 1948 Act, or by making arrangements with a private body under s 26, that the act of a private body in providing such accommodation was itself a public function.

Costs

The previous update '“ (2006) 150 SJ 732, 09.06.06 '“ noted the decision in Cambridge City Council v Alex Nesting Ltd [2006] EWHC 1278 (Admin), where the court overturned a costs order made against the local authority by a magistrates' court on a licensing appeal which had been partially successful. It was held, applying Booth v Bradford MDC [2000] 164 JP 485:

'[11]'¦ Although as a matter of strict law the power of the court in such circumstances to award costs is not confined to cases where the local authority acted unreasonably and in bad faith, the fact that the local authority has acted reasonably and in good faith in the discharge of its public function is plainly a most important factor.'

A contrastingly different result was arrived at, however, in Crawley BC v Attenborough [2006] EWHC 1278 (Admin), a decision made shortly before the Cambridge case, but not cited in it, where the local authority's appeal against a costs order was unsuccessful. While the Crawley decision took Booth v Bradford MDC as the starting point, the court considered that there was no obligation on magistrates to go into detail in giving the reasons for their decisions, that it was highly undesirable that the courts should do anything to encourage satellite litigation on questions such as costs, and that magistrates had a very wide discretion in the making of a costs order.

The Crawley decision would, therefore, appear to make it very much more difficult to appeal such a costs order. Nonetheless, it recognised that, before making such an order, magistrates have to consider the need to encourage public authorities to make, and stand by, honest, reasonable and apparently sound administrative decisions made in the public interest, without fear of exposure to undue financial prejudice if the decision is successfully challenged.