Developments in the ultra vires doctrine: Public Authorities-a sense of wellbeing or sick at heart? Alison Foster QC

Transcription

1 Developments in the ultra vires doctrine: Public Authorities-a sense of wellbeing or sick at heart? Alison Foster QC A note on the doctrine of ultra vires, its origins and its destination The statutory powers 1. Section 111 of the Local Government Act 1972 (side note: Subsidiary powers of local authorities ) provides as follows: Without prejudice to any powers exercisable apart from this section but subject to the provisions of this Act and any other enactment passed before or after this Act, a local authority shall have power to do anything (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions (3) A local authority shall not by virtue of this section raise money, whether by means of rates, precepts or borrowing, or lend money excepts in accordance with the enactments relating to those matters respectively. 2. The Local Government (contract) Act 1997 provides by section 1: Contracts for provision of assets or services 1. Functions to include power to enter into contracts (1) Every statutory provision conferring or imposing a function on a local authority confers power on the local authority to enter into a contract with another person for the provision or making available of assets or services, or both, whether or not together with goods (for the purposes of or in connection with), the discharge of the functions by the local authority. (2) Where (a) (b) A local authority enters into a contract such as is mentioned in sub-section (1) ( the provision contract ) under any statutory provision, and In connection with the provision contract, a person ( the financier ) makes a loan to, or provides any other form of finance for, a party to the provision contract other than the local authority, the statutory provision also confers 1

2 power on the local authority to enter into a contract with the financier or any insurer of or trustee for the financier, in connection with the provision contract (4) In this Act assets means assets of any description (whether tangible or intangible), including (in particular) land, buildings, roads, works, plant, machinery, vehicles, vessels, apparatus, equipment and computer software 3. The Local Government Act 2000 provides by section 2: 2. Promotion of wellbeing (1) Every local authority are [sic] to have power to do anything which they consider is likely to achieve any one or more of the following objects - (a) The promotion or improvement of the economic well-being of their area; (b) The promotion or improvement of the social well-being of their area, and (c) The promotion or improvement of the environmental well-being of their area. (2) The power under sub-section (1) may be exercised in relation to or for the benefit of - (a) The whole or part of any local authority s area, or (b) All or any person s residence or present in a local authority s area (4) The power under sub-section (1) includes power for a local authority to - (a) Incur expenditure. (b) Give financial assistance to any person. (c) Enter into arrangements or agreements with any person, (d) Co-operate with, or facilitate or co-ordinate the activities, of any person, (e) (f) Exercise on behalf of any person any functions of that person and Provide staff, goods, services or accommodation to any person. (5) The power under sub-section (1) includes power for a local authority to do anything in relation to or for the benefit of any person or area situated outside their area if they consider that it is likely to achieve any one or more of the objects in that subsection. (6) Nothing in sub-section (4) or (5) affects the generality of the power under sub-section (1). 4. Section 3 provides: 2

3 3. Limits on power to promote well-being (1) The power under section 2(1) does not enable a local authority to do anything which they are unable to do by virtue of any prohibition, restriction, or limitation on their powers which is contained in any enactment whenever passed or made. (2) The power under section 2(1) does not enable a local authority to raise money (whether by precept, borrowing or otherwise). (3) The Secretary of State may by order make provision preventing local authorities from doing, by virtue of section 2(1) anything which is specified,or is of a description specified in the order (4) Before making an order under sub-section (3) the Secretary of State must consult such representatives of local government and such other persons if any) as he considers appropriate. (5) Before exercising the power under section 2(1) a local authority must have regard to any guidance for the time being issued by the Secretary of State about the exercise of that power. (6) Before issuing any guidance under sub-section (5) the Secretary of State must consult such representatives of local government and such other persons (if any) as he considers appropriate (8) In this section enactment includes an enactment comprised in subordinate legislation (within the meaning of the Interpretation Act 1978). 5. Section 4 (1) Every local authority must prepare a strategy (referred to in this section as a community strategy) for promoting or improving the economic, social and environment well-being of their area and contributing to the achievement of sustainable development in the United Kingdom. (2) A local authority may from time to time modify their community strategy. (3) In preparing or modifying their community strategy, a local authority (a) Must consult and seek the participation of such persons as they consider appropriate, and (b) Must have regard to any guidance for the time being issued by the Secretary of State. 3

4 6. Further, the Local Government Act 1972 provides by section 151 as follows: Without prejudice to section 111 above, every local authority shall make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has responsibility for the administration of those affairs. 1 General observations about powers 7. The following propositions are not contentious: (i) As a body constituted by statute a local authority has only such powers as may be vested in it by enactment 2. (ii) The word functions in section 111(1) has no statutory definition and is used in a broad sense. It is apt to embrace all the duties and powers of a local authority: the sum total of the activities Parliament has entrusted to it. Those activities are its functions 3. (iii) Subject to any contrary statutory provision a local authority has power to do all the ancillary things requisite for carrying out those activities properly. 4 (iv) The doctrine of ultra vires ought to be reasonably and not unreasonably understood and applied and whatever may fairly be regarded as incidental to or consequential upon those things which the Legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires. 5 Thus, 1 This provision imposes a duty for the purpose of ensuring the financial affairs are properly conducted. It does not confer any powers. See further Local Government Finance Act 1988 section113 requiring the officer appointed under section 151 to be a qualified accountant and by section 114 imposing specific duties to report any unlawful expenditure. See further per Lord Ackner in Hazell v Hammersmith London BC (1991) 89 LGR 271 at 304 Section 151 is concerned with administrative matters I am not persuaded it provides any function within the meaning of section Amalgamated Society of Railway Servants v Osborne [1910] AC87 at 94, likewise the Municipal Corporation of the Borough: Hazell v Hammersmith supra. 3 Hazell v Hammersmith footnote 1 supra at Ibidem. 5 AG v Great Eastern Railway Co [1880] 5App CAS 473 per Lord Selborne LC at p

5 (v) Where there is an Act creating a corporation for a particular purpose and giving it powers for that purpose, what it does not expressly or impliedly authorise must be taken to be prohibited those things which are incidental to and may be reasonably and properly done under the main purpose, though they may not be literally within it, would not be prohibited. 6 (vi) Although nominally liberal the approach to construing section 111 may in truth be somewhat narrow. 7 (vii) Because section 111(1) is expressly made subject to the provisions of this Act context is essential. Thus the reference to expenditure, borrowing or lending do not themselves confer any power to expend borrow or lend money. Before the sub-section can authorise an activity which is not otherwise authorised, there has to be some other underlying function which is authorised to the discharge of which the activity will facilitate or be conducive or incidental. This is what the phrase calculated to facilitate or is conducive or incidental to, the discharge of any other functions means. Those functions are (see above) specific statutory activities an authority is expressly or impliedly under a duty to perform or has power to perform under other provisions of the LGA 1972 or similar. Thus, (viii) First you need a statutory provision vesting a specific function or functions in the council and then an activity that assists in the discharge of that function will be covered by this subsidiary power. 8 (ix) A power is not incidental merely because it is convenient or desirable or profitable. 9 The facts in Brent 6 Ibidem per Lord Blackburn at p 481. See further Akumah v Hackney London BC [2005] UK HL17 [2005] LGR Re Northern Ireland Human Rights Commission [2002] UK HL25 [2002] HRLR Hazell v Hammersmith at p 452 and Credit Suisse v Allerdale BC [1997] QB306 CA 9 Hazell supra per Lord Templeman at page 31 5

6 8. In February 2007 Brent invited tenders to be submitted by the 27 th of that month for combined and miscellaneous insurance for cover from 1 April A tender was submitted by an entity known as RMP, it appeared on its face the most financially advantageous of available offers. About a month later RMP were told by Brent that the contract award procedure had been abandoned for 6 out of the 7 available lots because the local authority were going to award the contract to an entity which had played no part in the public procurement exercise, namely London Authorities Mutual Ltd ( LAML ). RMP went to court and asserted that Brent had no powers to participate in LAML, ie it had acted ultra vires LAML was established by a number of London borough councils including Brent because of concerns about amounts paid to commercial insurers as premiums, and the services that the authorities were receiving. Extensive studies were carried out and participation in a guaranteed indemnity mutual insurance company was considered to produce savings in premiums of 15% to 20%. Furthermore, improved risk management would result with the sharing of best practice not a feature of commercial insurers. It was, unsurprisingly, a commercial insurer who had hoped for the tendered business who sued. 10. A capital contribution of 160,000 odd was paid by the members by subscribing to the Memorandum & Articles of Association and undertakings were given to pay sums on demand up to a total of some 600, Premiums were paid 10 In accordance with the Public Contracts Regulations 2006 SI 2006/5. 11 RMP also used for damages saying that the requirements of the 2006 Regulations (see footnote 10) had been breached there were a number of interesting procurement arguments including as the scope and applicability and scope of the Teckal exception not the subject of this Note. 6

7 (approximately half a million pounds) for the relevant year in respect of terrorism liability property and contents insurance. 11. The vires challenge argued that participation in LAML was outwith any of the powers given whether expressly or impliedly by the relevant statutory provisions set out above. 12. When defending the action, particular, reliance was placed upon section 2 of the 2000 Act describing it, not unsurprisingly as a step change in the approach to the powers of local authorities. By reference to the detailed and expansive Explanatory Notes, it was argued that it was only in respect of the expressed restrictions in section 3 of that Act that section 2 powers could be limited. 13. Paragraph 15 of the Explanatory Note said in terms, and in hindsight with geat irony, that the section was drafted to clear up much of the uncertainty about what authorities can do. Indeed, the Government Guidance itself 12 also described the authorities new powers in expansive and generous terms; and they were generally understood to be wide: in considering as a matter of policy the setting up of LAML the wellbeing powers under section 2 were described as having been designed to effectively allow local authorities to work together for any purposes likely to promote benefit, financial or other, in their own area Made pursuant to section 3(5) of the 2000 Act 13 See citation from What was the catalyst for this project in Establishment of the London Authorities Mutual Ltd (LAML): A case study

8 14. Advice of specialist counsel was obtained to the effect that it was within the power of local authorities to participate in mutual insurance and, in particular section 2 was identified. They were advised that the promotion of the economic well-being of the authority was sufficient for the section 2 power to be available evidenced by reducing the cost of the insurance premium, thus freeing up money for other things. Counsel also considered section 111 and believed that that gave power to permit the arrangement of insurance against losses and liabilities arising in the discharge of a local authority function. The problems 15. The Judge 14 indicated that in becoming a member of LAML, Brent had become involved in the provision of insurance - not just the taking of insurance. Although there was clearly power for a local authority to take insurance under section 111 (there were indeed certain specific powers in the relevant Acts), they were nowhere powers to provide insurance, and the Judge referred to the principles set out at (vii) and (viii) above He described the taking of insurance as a paradigm subsidiary power or function. Further a local authority does not exist in order to be insured; it takes insurance in order to assist its fulfilment of its substantive functions: in the words of the statute, because the taking of insurance is calculated to facilitate, or is 14 At [75] 15 Paragraphs [81] and [82]. 8

9 conducive or incidental to, the discharge of one or more of those functions. 16 The payment of a premium is an incident of insuring, however paying paid capital contributions and giving a guarantee of a guaranteed capital contribution is not incidental to the taking of insurance. 17. In rejecting the authority s argument an analogy was drawn with Hazell s case 17 in which a swap transaction was said to be a separate and collateral contract undertaken long after the borrowing had been effected; likewise the Memorandum of Articles of Association of LAML were a separate contract from the contract of insurance. The amounts of contributions and demands for them were independent of any insurance policy or the individual claims experience. The fact of mutuality was held to be irrelevant. 18 The Court of Appeal agreed in rejecting Brent s case. 18. With regard to section 111 it was also held at first instance that it was necessary to have a relationship between the incidental power and an authorised function of a local authority, incidental meaning that which is calculated to facilitate or is conducive or incidental to the discharge of a function. In other words, this does not mean, as was submitted, that the courts may only hold an authority s activities outside section 111 where they are contrary to some statutory provision or designated to circumvent a restriction on powers. Both Credit Suisse 19 and McCarthy & Stone (Developments) Ltd v Richmond-upon-Thames London BC (1991) 90 LGR1 were relied upon for the proposition that that which is incidental to the incidental is not incidental to the discharge of functions and therefore not 16 [83]. 17 Supra 18 [86]. 19 Supra. 9

10 within section 111(1). An incidental power conferred by section 111 is not itself a function for the purposes of that provision. Note also the comment that Brent could not provide financial assistance to a company for it to do what Brent could not lawfully do, i.e. provide insurance The Judge commented adversely on the speculative aspect of the insurance enterprise. Although it intended the company would be prudently and ably administered and had an appropriate re-insurance programme nonetheless there were significant risks. Brent was therefore speculating on its success as an insurance company. The authorities 21 disapproved of speculative trades or businesses in this context. 20. The court held that a contract of insurance was not a contract for the provision or making available of assets or services, or both under section 1 of the 1997 Act 22. The primary provision of the contract is to provide a financial indemnity or pay an ascertainable sum of money and such activities are incidental to that primary provision. Money for these purposes was not an asset in the sense of that section. Effectively, it was argued that you could describe entering a contract of insurance 20 In the same way in the famous washhouse case of AG Fulham Corporation (1920) 19 LGR441 the council was entitled to establish provision for washing but not for people to bring a bag of clothing to the washhouse and then call for them when they had been washed. It was said that what was proposed was a business of washing up to a certain degree of completion not provision of the facilities for washing. See also Morgan Grenfell & Co v Sutton London BC (1996) 95 LGR574 granting of guarantees and indemnities was not within section 111 where they were indemnities given to banks who had provided finance to a housing association which had entered into an arrangement with the authority to acquire housing and let it to the local authority. This was ancillary to the ancillary power of renting housing for it to be let by the authority. AG v Manchester Corporation [1906] 1 Ch 643, a corporation with power to use tramways for the carriage of parcels could act as a carrier for collecting and delivering those that were to be carried on the tramway but could not carry on a general parcels delivery business using the same transport facilities. This was incidental to the incidental. 21 Hazell s case, supra; Waltham Forest case supra; Morgan Grenfell case supra and Colman v Eastern Counties Railway Company (1846) 10 BAV1. 22 See above. 10

11 under section 1 of the 1997 Act as discharging a function under section 111. That also promoted an incidental power into a function which was unauthorised. 21. The rejection of the argument based on section 2 also meant that the mere fact that Brent expected it to be less costly would not justify the exercise of power under that section. Giving financial assistance to a company so it can carry out activities that benefit the local authority s area would be one thing but where a financial reward would be obtained that could be used to benefit the area that is one step further away without any assurance that would take place. 22. The Court of Appeal in considering the vires issue stated that cases like Hazell make it unlikely that Parliament conferred a carte blanche on local authorities subject only to what is expressly set out in section Further: Powers which have been held not to be incidental to functions of the authority, such as giving guarantees to companies, do not readily obtain sanction by the use of a general expression the wording of which does not easily bear upon such activities. 24 Parliament was therefore not giving a carte blanche to make arrangements subject only to section 3 and an identification of a potential financial advantage to the local authority s financial position Importantly, the Court of Appeal accepted that there was attractive simplicity in Brent s argument and some support for it in the authorities. 26 The Court said 27 that section 2 gave a local authority power to take steps that have as their object 23 [2009] EWCA Civ 490 [113]. 24 [117]. 25 Contrary to the implications in the Explanatory Notes and the Guidance neither of which could, they said, condition the question of construction 26 [178] 27 [180] per Moore-Bick LJ 11

12 some reasonably well-defined outcome. However, it could not be right that they could embark on any scheme that is expected to reduce its costs even though, as 2(4) recognised, they could promote well-being indirectly. This complex and somewhat speculative attempt to save money was said to be the mainspring of the arrangement and the power did not extend that far The Judge s conclusions were upheld. Further, as stated, although a local authority could enter into a contract as an act incidental to performing one of its functions, the contract itself was not a function of the authority in the section 111 sense. A contract could not extend the true meaning of function. 25. The rule of thumb expanded in the Court of Appeal 29 is simple: When a local authority enters into arrangements to obtain property, goods or services necessary for or incidental to the performance of its primary functions, the further those arrangements depart from the simple acquisition of the benefits in question the greater the likelihood that they will fall outside its powers. The reason, is perhaps obvious: what is required (in this case insurance) can be obtained by a straightforward contract with a recognised kind of supplier, more elaborate arrangements are likely to involve elements which, although they form an integral part of what may be regarded as a beneficial scheme, are not necessary for the achievement of the objective and can less easily be regarded as incidental to the performance of the authority s function. 26. The Court of Appeal listed the distinct and complex individual functions and arrangements that were necessary to provide the commercial structures and guarantees in this case: it could not all be treated in the round as Brent had argued. The broad brush approach had failed. The Court said that any proposed course of action had to be examined in detail: in certain cases co-operation with a 28 [19]. 29 [169]. 12

13 degree of sharing risks (for example waste disposal with shared lorries) would be acceptable, other cases would not. However, overall improved risk management provided an inadequate justification for this case: that could be achieved without bringing LAML into existence. Accordingly, each individual step requires analysis within the authorised functions and incidentals. Too indirect a link will sever the chain and deny vires to the scheme in question - which may not be approached globally. 27. Under section 2 the mindset of the authority is relevant. Brent lost on proving this at first instance although not on appeal. It was a pure question of evidence as to whether or not it could be established that Brent did consider that participation in LAML was likely to achieve the promotion or improvement of the economic social or environmental well-being of the area. There is a lesson for decisionmaking within authorities here. 28. It was first held there was no appropriate reference to one or more of the preconditions for the section 2 power in the relevant Minutes there was insufficient precision and clarity as to which power was in issue, and certainty of the benefits etc. Although reversed on appeal, (the executive had seen more than one compendious report) care clearly must be taken at the time of voting in any section 2 proposals. 29. In essence: in spite of support for a broad construction of section 2 of the 2000 Act 30, the Court rejected Brent s arguments. Section 3(2) guided it to hold that 30 [178]. 13

14 the fact that the local authority could not use its powers under section 2(1) to raise money suggested that action under 2(1) must be financed out of the authority s existing resources. Further, that taking steps to improve the authority s general financial positions is not to be treated as something that will promote or improve the well-being of its area. 30. The Court of Appeal rejected the Explanatory Notes as helpful guidance save as to the context and identifying the mischief to be remedied. Perhaps ironically, moreover, the Court of Appeal read the best value duty (brought into effect a year before the 2000 Act was passed) as diminishing any argument that section 2(1) was directed to the same end: the indirect economic benefit of the authority. What then does the law require? 31. A local authority is entitled to take steps that have as their object (direct or indirect) some reasonably well-defined outcome which it considers will promote or improve the well-being of its area. In other words [the 2000 Act] gives authorities the power to do things themselves or to procure or enable others to do things that directly affect the well-being of their areas. action to reduce the costs of goods or services purchased by the authority which does not have as its object the use of the money saved for an identified purpose which the authority considers will promote or improve well-being does not, on a natural meaning of the words, fall within the section. 32. In fact the Court of Appeal disagreed with the Judge of first instance as to the sufficiency of the evidence supporting Brent s claim to have formed a view as to the benefits of the proposed course of action. However an authority must be cautious. There must be evidence of proposed use of the money saved for an 14

15 identified purpose. Moore-Bick LJ said that it might well be necessary for a body governed by statute to identify the power under which it purports to act if more than one is available certainly where different criteria exist under them and there may be doubt as to the basis of the decision. On the facts of the Brent case there was only one acceptable basis for decision, section 2, and that it would lead to a saving of money that would release resources for the benefit of the area and its inhabitants. Nonetheless clear identification of the power under which action is to be taken must be an absolute minimum requirement for safety s sake. 33. Clear explanation of outcomes is required: precise, not speculative, direct, if possible, rather than indirect general improvements to the economic position are not sufficient of themselves to constitute promotion of improvement of in the well-being of an area. As to underlying analysis, this must be precise, accessible, understood and relied upon in decision-making. In the Brent case sufficient reports had been seen by the Committee in order to inform a lawful view (had vires existed) so in that case there was sufficient awareness for passing the relevant motion. The future 34. There has been considerable discussion and concern about the effect of the decision in Brent. 31 However, the suggestion in materials available before the last election of an expansion in local authorities powers has produced considerable 31 The matter is due to be heard in the Supreme Court in December

16 activity. 32 In particular the specific absence of a power to enter into mutual insurance arrangements has been remedied by statute. 35. The Local Democracy, Economic Development and Construction Act 2009 provides by Part 2 Chapter 2 express powers for a qualifying authority to become a member of a body corporate under certain conditions to provide insurance and to enter into arrangements under which insurance is provided, to pay premiums and so forth and assume financial obligations in respect of such arrangements. Qualifying authorities include county councils, district councils and so forth. 36. Further, the Local Government (Power of General Competence) Bill now exists introducing a general power of competence for local authorities. Originating in political discussions and policy statements, these developments are aimed directly at the ultra vires doctrine and the current requirements for what is called specific statutory power 33 in order lawfully to undertake the relevant action. The policy at that stage described the scope of the power under section 2 as not clear and sought to bring clarity by the new draft Bill. It has been stated that the General Power of Competence would allow a local authority to: Carry out any lawful activity. Undertake any lawful works. Operate any lawful business. Enter into any lawful transaction. 32 Control shift: Returning Power to Local Communities Conservative Party February Perhaps an inaccurate description legally, but the sense is there 16

17 The implications were frankly accepted to be vast. 37. The decision in the Brent case on appeal served only to highlight the difficulties previously canvassed at Parliamentary level and elsewhere. The Local Government Association said that the Judgment seriously undermined council confidence in the well-being power as a wide general power of first resort. As stated, there was a specific, targeted statutory response to this case regarding mutual insurance arrangements and precise powers have now been set to make such steps lawful. The proposed Bill goes much, much further. Indeed appears to present in effect a presumption of vires: in other words an entire reversal of the framework set out at the start of this paper. 38. The new draft Bill has the following introduction, referring directly to the chilling effect of the Brent case: In the LAML judgment, Lord Justice Moore-Bick argued [sic! he decided!] that section two of the well being power cannot be used to empower any scheme expected to reduce an authority s costs (paras ) taking steps to improve the authority s general financial position is not to be treated as something that will of itself promote or improve the well-being of its area. The argument was put by Lord Justice Pill that Promotion of wellbeing is not an expression one would normally associate with a somewhat complex arrangement to save money... rather than with action directly to promote or improve a healthy or prosperous condition. It is vital that councils are given renewed confidence in their powers to continue this work to improve efficiency, for example through joint arrangements, in particular to provide back office and support services which may be defined as incidental in law to their primary functions. Challenges such as climate change and energy security, changes in the make up of the population, economic change, and technological developments, make it vital councils can take reasonable risks, and provide new services. Legislating to create a power of general competence for local government would contribute to councils confidence in their powers to tackle in new ways the challenges their communities face. 34 The drafting of Clause 1 is different from that used for the well-being powers in sections 2 and 3 of the Local Government Act 2000; the proposed effect of the draft is designed to be as follows:

18 Clause 1 seeks to tackle the perceived problems in the Local Government Act 2000 highlighted by the LAML judgement by providing for a power of general competence which allows a local authority to do anything it considers is likely to be of benefit to its area, or to persons resident or present in its area. The power of general competence does not allow a local authority to do anything which it is unable to do by virtue of any express statutory prohibition, restriction or limitation and it does not include a power to make laws or to raise money by taxation or precepts. The power of general competence also allows a local authority to do anything in relation to, or for the benefit of, any person or area situated outside its area if it considers that it is likely that doing so will benefit its area or the people in its area.. Clause 2 enables the appropriate national authority (the Secretary of State, in relation to England, and the Welsh ministers, in relation to Wales) to limit the scope of section 1 by making an order preventing authorities from doing anything specified in the order. Before making an order, the appropriate national authority would have to consult representative bodies of local government. The drafting of clause 2 is based on section 3 of the Local Government Act 2000 which provides a similar ability to restrict well being powers. Clause 3 requires legislation to be interpreted as far as possible in a way which is compatible with the power of general competence. This applies to all legislation, whenever enacted. Clause 3 does not affect the validity, operation or enforcement of any incompatible primary legislation or of any incompatible subordinate legislation, if primary legislation prevents removal of its incompatibility. The drafting of clause 3 is based on section 3 of the Human Rights Act 1998 Clause 4 allows the courts to make a declaration of incompatibility where they find that primary legislation is incompatible with the power of general competence. The continuing validity and enforcement of the legislation is not affected by such a declaration, and a declaration is not binding on the parties in the proceedings in which it is made. The drafting of clause 4 is based on section 4 of the Human Rights Act1998. Clause 5 provides that when a court is considering making a declaration of incompatibility, the Crown is entitled to notice and to be joined as party to the proceedings. This would enable a Minister (or his nominee) to provide the court with information which may be relevant to the issue in question. These powers are set out in subsections (1) to (3) of clause 5 and the drafting is based on section 5 of the Human Rights Act

19 Clause 6 provides that the appropriate national authority may, by order, amend legislation which has been declared incompatible with the power of general competence if they are satisfied that there is a compelling reason to do so. The drafting of clause 6 is based on section 10 of the Human Rights Act Clause 7 provides the appropriate national authority with further more general powers to remedy existing legislation. It enables the appropriate national authority to make orders for the purpose of removing from any legislation any incompatibility with the power of general competence or repealing, revoking or amending legislation that is unnecessary as a result of the Bill. The Schedule makes detailed provision about orders made under clauses 6 and 7, which are described as remedial orders. The Schedule provides that, amongst other things, a remedial order may contain such incidental, supplemental, consequential or transitional provisions as the appropriate national authority considers appropriate. This includes a power to amend primary legislation and a power to amend or revoke subordinate legislation. The Schedule also provides that a remedial order may be made so as to have effect from a date earlier than that on which it was made, and it may make provision for the delegation of specific functions. It provides that no person will be guilty of an offence solely as a result of the retrospective effect of a remedial order, and it sets out the procedure for making a remedial order, which is based closely on the procedure for making remedial orders under the Human Rights Act Clause 8 provides that the appropriate national authority must conduct a review of legislation with a view to removing any provision which is incompatible with the power of general competence, or which, as a result of the Bill, is unnecessary. The review must be completed by the end of By the end of 2016, any prohibition, restriction or limitation of a local authority in any legislation and which is incompatible with the power of general competence will cease to have effect. The appropriate national authorities would be able, by order, to exempt any legislation from that provision. Clause 9 makes further detailed provisions about orders, including parliamentary scrutiny (except in relation to remedial orders, which are dealt with in the Schedule). 39. It is difficult to over-state the change in direction this draft marks, and the departure from the traditional approach to public authority power such provisions could have. It is also difficult to see how the applicable canons of statutory 19

20 construction together with the force of the common law could preserve the breadth of the powers these provisions are designed to promote. 40. However, ultra vires means of course beyond the powers and, regrettably, it is beyond the powers of this paper to take that matter further. However, the future is clearly interesting: Brent in the Supreme Court in December 2010 may be the next exciting episode in this long-running story. Alison Foster QC 39 Essex Street Chambers LONDON WC2R 3AT 1 st October