Administrative Redress: Public Bodies and the Citizen

lc322_summary.pdf (application/pdf Object).

Administrative Redress: Public Bodies
and the Citizen
Summary
Law Com No 322 (Summary)
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ADMINISTRATIVE REDRESS: PUBLIC BODIES
AND THE CITIZEN
INTRODUCTION
1.1 Our report brings to a close the state liability aspects of the Administrative
Redress project and sets out our reaction to consultation responses to our
consultation paper Administrative Redress: Public Bodies and the Citizen.1
1.2 Fundamental to our approach to this project was an acceptance that we needed
to consider the extent to which any reforms might divert resources originally
allocated for public purposes to individuals as compensation payments. Our
approach sought to achieve the appropriate balance between the interests of
those seeking redress and any effect this process may have on public bodies.
1.3 In seeking to provide an evidence base that our proposals would strike an
appropriate balance, we attempted to construct a dataset of the current liability of
public bodies. Owing to current reporting and accounting practice, we were
unable to do this.
1.4 Our proposals were contested by many parties, most notably the key stakeholder
Government. That opposition and the inability to access appropriate evidence to
counter the opposition mean that we feel that it is impractical to attempt to pursue
the reform of state liability any further at this time.
1.5 This project highlighted an important deficiency in the current practice for
collating and publishing compensation payments made by public bodies, which it
would be in the public interest to resolve. Consequently, we have decided to
make two recommendations in relation to this. These build on our experience in
this project.
1.6 We also state our intention to do more work on ombudsmen.
1.7 The full report is split into six Parts.
(1) Part 1 introduces the project and sets out the key decisions as to the
future of the project.
(2) Part 2 revisits the availability of monetary remedies in judicial review.
(3) Part 3 considers responses made concerning our private law reform
proposals and brings to a close this aspect of our project.
(4) Part 4 considers the effect of liability on public bodies and issues in
relation to data collation and publication.
1 Administrative Redress: Public Bodies and the Citizen (2008) Law Commission
Consultation Paper No 187 (hereafter CP 187).
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(5) Part 5 analyses the responses made to our ombudsmen proposals and
suggests how we will be taking those aspects of the Administrative
Redress project forward.
(6) Part 6 gives a short summary of the conclusions contained in the
preceding Parts.
1.8 In addition to the full report, we are also publishing (in electronic form) a more
detailed Analysis of Consultation Responses.2 This sets out more
comprehensively the responses we received to our provisional proposals.
THE ADMINISTRATIVE REDRESS PROJECT
1.9 This project was commenced as part of our Ninth Programme of law reform. A
scoping paper was published in October 2006. The scoping paper set out the
ambit of the project, which was to address the following question:
When and how should the individual be able to obtain redress against
a public body that has acted wrongfully?
1.10 Building on the scoping paper, our consultation paper Administrative Redress:
Public Bodies and the Citizen was published on 3 July 2008. The consultation
period closed on 7 November 2008.
1.11 In the consultation paper we proposed two main sets of reforms. The core set of
reforms focused on the court-based mechanisms for redress from public bodies.
That is an action for judicial review and private law claims against public bodies.
Our provisional proposals would have led to the creation of a specific regime for
the liability of public bodies, which was to be based around a series of individual
elements.
(1) That the claimant be required to show “serious fault” on the part of the
public body, rather than – in judicial review – public law illegality or – in
tort – negligence.
(2) Damages should be available only if the statutory regime, within which
the public body’s decision was made, was objectively there to confer a
benefit on the relevant class of individuals (the “conferral of benefit” test).
(3) Relating to private law only, that the activity engaged in was one uniquely
public in nature, either because the public body was under a special duty
to perform it or because it utilised a public law power (the “truly public”
test).
1.12 Though the first two elements applied to our proposed reforms in both judicial
review and private law, they generated a markedly different level of consultation
responses in each area. We have chosen to deal with them in the context of the
area where they generated the most commentary. That is judicial review for the
“conferral of benefit” test and private law for “serious fault”.
2 Available at: www.lawcom.gov.uk/remedies.htm.
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1.13 Secondly, we suggested a set of reforms for certain of the public sector
ombudsmen, specifically the Parliamentary Commissioner for Administration, the
Local Government Ombudsman and the Public Services Ombudsman for Wales.
The reforms were aimed at improving access to the ombudsmen and providing
certain additional tools that would aid them in undertaking their role as part of the
redress system for administrative injustice.
JUDICIAL REVIEW
1.14 In judicial review we suggested that an award of damages should serve as an
ancillary remedy, to be claimed alongside the prerogative remedies.
1.15 The purpose of the damages remedy was to fill a gap that we suggested existed
in the current regime, whereby damages can only be claimed where there is an
existing private law right to damages, where there is a breach of EU law or under
the Human Rights Act 1998. In keeping with other remedies available in judicial
review, we suggested that damages should be discretionary.
Consultation responses
1.16 The suggestion that a wider, but still discretionary, monetary remedy should be
available in judicial review was met generally with a mixed response.
1.17 Of those who agreed in principle, some disagreed with the extent of our
provisional proposals or raised concerns as to its possible consequences.
1.18 However, some consultees – including Government – disagreed vigorously with
the provisional proposals. Of these, a number opposed our scheme as it would
allow individuals to claim damages where no private right had been infringed and
in doing so would fundamentally alter the nature of judicial review.
1.19 Certain consultees, most especially Government, were concerned that any
increased availability of monetary remedies would lead automatically to increased
delays in the Administrative Court.
1.20 Several consultees were concerned about the increased financial burden on
public bodies that would result from the imposition of compensation. Government
felt that our proposals risked over-emphasising the rights of individual claimants
to the detriment of society as a whole.
1.21 Whilst agreeing that reform was necessary, some consultees suggested that the
creation of a discretionary remedy, or a remedy with a discretionary power to limit
damages, would be more appropriate than our “serious fault” scheme.
1.22 The “conferral of benefit” test was thought to be unworkable by some consultees,
and scenarios were suggested where it would not function as an appropriate
gatekeeper into our “serious fault” scheme. Others criticised the use of the term
“benefit”.
Our conclusions
1.23 We do not accept that our proposal alters the nature of judicial review as
presently constituted – it merely applies a more coherent approach to the
availability of remedies where administrative illegality is made out.
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1.24 Whilst we accept that our proposals could lead to a slight increase in the length of
some individual cases where further argument on “serious fault” was necessary,
we do not think that this would be a large number of cases.
1.25 We accept that it is important to bear in mind the balance between individual
redress and the consequences that the payment of compensation can have on
public bodies. We attempted to create a dataset on liability in order to assess this
more thoroughly. As we detail in our full report, we encountered significant
difficulties when attempting to do this. On the basis of our experience, we make
recommendations relating to the collation and publication of compensation
figures by public bodies.
1.26 Having analysed the consultation responses, we do not think that the criticisms
made of our proposed reforms are insurmountable. We still consider that there is
a good argument in favour of reforming this area of the law.
1.27 Such reform could either be along the lines we proposed, or by the creation of a
more discretionary power for the courts to award damages than that contained in
section 31(4) of the Senior Courts Act 1981.
1.28 However, given the substantial opposition to our proposals – in particular from
Government but also from others – coupled with the lack of a dataset that would
have assisted in addressing some of these concerns, we accept that we cannot
take this part of the project any further.
PRIVATE LAW
1.29 In private law, we provisionally proposed placing certain activities – those which
can be regarded as “truly public” – within our “serious fault” scheme. Therefore
the claimant would have had to satisfy the same requirements as the public law
scheme in order to establish liability. Cases which did not satisfy the “truly public”
test would have been determined under the normal rules of tort law.
1.30 The other significant reform we provisionally proposed was to modify the normal
operation of the rule on joint and several liability. Presently this can operate in a
particularly unfair way as it applies to public bodies. Our provisional proposal was
to give judges a discretionary power to apportion claims for public body
defendants.
Consultation responses
1.31 The response to our provisional proposals was overwhelmingly negative.
1.32 Some consultees thought that there was no basic case for reform, maintaining
that there are no problems with the current law. Other consultees suggested that,
even if our analysis did disclose problems, these did not warrant the wholesale
reform we provisionally proposed. Consultees subscribing to this view suggested
that it was better to adhere to the normal, incremental, process by which the
common law has traditionally developed in this area.
1.33 Many consultees suggested that the individual elements of our proposed regime
were unsuited to this area and would be unworkable. The majority of criticisms
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focused on the “serious fault” test, though a significant number also thought that
our “truly public” test was flawed.
1.34 Finally, where addressed, some consultees were in favour of reform to the rule
on joint and several liability. However, a significant number opposed it.
Our conclusions
1.35 Our private law proposals were subject to a high degree of criticism. However,
not all such criticism was equally valid and many consultees were also in
complete opposition with each other as to the state of the law and the necessity
for reform.
1.36 We still maintain that the current law is inappropriate and unclear in its approach
to public bodies. We suggest that there would be merit in the systematic reform of
the area, rather than relying on the incremental approach inherent in the common
law process.
1.37 That said, we accept that we failed to convince many consultees of the need for
reform. We also accept that we have not convinced consultees or Government
that our proposed changes would be preferable to the current incremental
approach of the law in this area. We do not, therefore, think that there is value in
pursuing reform further.
1.38 As with judicial review, we would have benefited from a dataset to more fully
assess the impact of our proposals.
REPORTING
1.39 Within this project we encountered significant problems in seeking to create a
dataset covering the current compensation liability of public bodies. Though the
data does seem to be generated, it is not collated or published in an accessible
manner. Without this dataset, we were unable to estimate the costs of the current
redress system, or prove that our proposed changes would be beneficial.
1.40 We suggest that the lack of collated and clearly accessible data means that the
current regime fails to fulfil the requirements of accountability and transparency
that are key to our system of governance. The lack of data is also a problem for
practitioners, judges and policy-makers in this area. Fears of defensive
administration cannot be confirmed or refuted, and administrators are unable to
assess policy on the basis of properly formulated impact assessments.
Our conclusions
1.41 Clear and open governance is the cornerstone of any democratic system. This
includes the requirement that the way in which public money is spent should be
outlined openly and clearly. In the UK, this is the bedrock of parliamentary power
and the reason for the creation of many of its enduring institutions.
1.42 We do not challenge Government’s commitment to this basic principle. We are
proposing a minor change that would allow citizens to assess the way in which
public monies are spent on this important issue. Given the purported
development of a “compensation culture” we believe that both citizens’ and
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Government’s interests would be best served by more statistical information on
this topic.
Recommendations
1.43 We recommend, subject to the successful completion of any pilot study,
that HM Treasury ensure the costs of compensation to central government
bodies are regularly collated and published.
1.44 In doing this, we suggest that it would be beneficial for public bodies to report the
costs of the following:
(1) all compensation payments made after the commencement of legal
proceedings but before judgment (therefore, all settlements);
(2) all compensation payments made after judgment;
(3) legal costs (for instance, costs of solicitors/counsel/court fees/other
disbursements) of cases terminating in (1); and
(4) legal costs of cases terminating in (2).
1.45 In addition, these should all be broken down into a finite list of subject areas or
causes of action. For instance: employment disputes, personal injury claims,
other negligence, breach of statutory duty, misfeasance in public office, and
“other”.
1.46 We also recommend that the Department for Communities and Local
Government and the Welsh Assembly Government should similarly
consider the most appropriate way for local government to collate and
publish this information. As with the recommendation above, this is made
subject to the successful completion of a pilot study.
1.47 These are the only recommendations made in this report.
OMBUDSMEN
1.48 In our consultation paper we proposed a series of potential reforms to certain
public sector ombudsmen: the Parliamentary Commissioner for Administration;
the Local Government Ombudsman; and, the Public Services Ombudsman for
Wales. The four main reforms proposed were:
(1) the creation of a specific power to stay an application for judicial review;
(2) that access to the ombudsman could be improved by modifying the
statutory bar;
(3) a power for the ombudsmen to refer a point of law to the courts; and
(4) removing the MP filter in relation to the Parliamentary Commissioner for
Administration.
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Consultation responses
1.49 Government suggested that “there may be some merit in exploring further the
statutory frameworks governing the ombudsmen”.
1.50 In relation to the creation of a specific power to stay an application for judicial
review, Government thought that “it may be worth looking further at whether there
are cases before the courts which would benefit from being stayed and referred
to the ombudsmen for possible investigation”. Other consultees also thought
there was merit to the proposal. Government was worried about the potential cost
of any reform.
1.51 The majority of consultation responses on the subject favoured our proposed
reform to the statutory bar. However, Government expressed concerns that the
proposal would create additional delays and costs.
1.52 The vast majority of consultees who commented on the provisional proposal
supported the creation of a power for an ombudsman to make a reference to a
court on a point of law. Several consultees did, however, suggest that further
work needs to be done on the details of how such a mechanism would operate in
practice.
Wider issues
1.53 Outside our specific proposals, there were other issues that consultation showed
were particularly important for consultees. These included developments that
occurred after the publication of the consultation paper and the end of the
consultation period on 7 November 2008. Primarily we think that the following
need further consideration:
(1) the nature of the ombudsman process;
(2) relationship of ombudsmen with Parliament; and
(3) the nature of findings and recommendations.
The nature of the ombudsman process
1.54 During consultation it was highlighted to us that an investigation by an
ombudsman is very different in its nature to the adversarial processes of a court.
Ombudsmen were designed primarily as inquisitorial fact finding institutions able
to sort through the minutiae of administrative decision making. We think that it
would be useful to examine this issue further and consider whether any reforms
would aid this process.
1.55 In consultation, the possibility of self-generated investigations – such that an
ombudsman does not require a complaint before opening an investigation – and
the development of an ombudsman equivalent of class actions were mentioned.
The first would change fundamentally the nature of an ombudsman as a
complaints investigator. We think that thorough consideration and consultation is
necessary before any recommendations could be made.
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The relationship of ombudsmen with Parliament
1.56 The renewal of Parliament and remedying a perceived breakdown in the
relationship between Parliament and citizens came to prominence after the
consultation paper had been published.3 In the context of ombudsmen, there are
two important subjects which we consider as requiring further, more detailed
consideration.
1.57 The first is the developing practice of holding pre-appointment hearings for
certain public posts. This happened recently with the appointment of Jane Martin
as Local Government Ombudsman.
1.58 The second concerns relationships between ombudsmen and committees of
either the UK Parliament or the National Assembly for Wales. This would include
the relationship between the Parliamentary Commissioner for Administration and
the House of Commons Select Committee on Public Administration. It would also
include the developing relationship between the Public Services Ombudsman for
Wales and the National Assembly for Wales.
The nature of findings and recommendations
1.59 The final topic to be considered is the relationship between the different
ombudsmen and those whom they investigate. Essentially, this turns on the effect
of an ombudsman’s findings.
1.60 There is currently a fundamental difference between the effect of findings of the
Local Government Ombudsman and those of the Parliamentary Commissioner
for Administration. This is due to two judgments. That of ex parte Eastleigh BC4
concerning the Local Government Ombudsman and that of Bradley5 in relation to
the Parliamentary Commissioner for Administration. The effect of these
judgments is that it is far easier in legal terms for a public body to reject the
findings of the Parliamentary Commissioner for Administration than it is to reject
the findings of the Local Government Ombudsman.
1.61 We make no comment as to the correct approach that should be taken but we
point out that there is a difference and that this merits further consideration.
Our conclusions
1.62 Given the consultation responses, the importance of the area and recent
constitutional developments, we think that further consideration of the public
sector ombudsmen is merited.
1.63 We therefore intend to publish a consultation paper focusing solely on the public
sector ombudsmen later in 2010. We would expect this to be followed by a final
report in 2011.
3 See Rebuilding the House, Report of the House of Commons Reform Committee (2008-
09) HC 1117.
4 R v Local Commissioner for Administration ex parte Eastleigh Borough Council [1988] QB
855.
5 R (Bradley) v Secretary of State for Work and Pensions [2008] EWCA Civ 36, [2009] QB
114.