Supreme Court revises confiscation order via A1P1

_41773060_mtic_carousel416x302R v Ahmad and others [2014] UKSC 36, 18 June 2014 – read judgment

A bit of a familiar refrain in which A1P1, the right to property, comes in and stops an order being made which would otherwise be lawful under statute: see my recent post here on the Eastenders case.

The case concerns confiscation proceedings following the conviction of two sets of defendants for carousel fraud.  A carousel fraud involves setting up a whole series of paper transactions to generate an apparent entitlement to reclaim VAT from the tax man: see the pic for an example. The VAT is repaid, at which point the money, and the fraudsters, disappear into the dust. But in these cases, they were found, prosecuted and confiscation orders made against the individuals to try and get the money back.

In the first case, the Ahmad defendants ran a company MST, and took £12.6m (£16.1m uprated for inflation) off the taxman. In the second, the Fields defendants got £1.6m (including inflation) via their company, MDL.

In each case, the order was made in those sums against each individual defendant. So each Ahmad defendant was ordered to pay £16.1m, even if some of that £16.1m was thereafter repaid by another defendant. It was this element of the order which the Supreme Court revised.

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Seizure of worker’s wages breached Convention right – Strasbourg

proceeds-of-crimePaulet v United Kingdom Paulet (application no. 6219/08) – read judgment

The Strasbourg Court has declared, by five votes to one, that the UK authorities had acted unlawfully by seizing the wages of an Ivorian worker who used a false passport to gain employment. The majority ruled that the UK courts should have balanced individual property rights against interests of the general public.

This case on the confiscation of the proceeds of crime raises many difficult legal questions such as the nature of the link between the crime and the proceeds and the distribution of the burden of proof in establishing this link. Mr Paulet complained that the confiscation order against him had been disproportionate as it amounted to the confiscation of his entire savings over nearly four years of genuine work, without any distinction being made between his case and those involving more serious criminal offences such as drug trafficking or organised crime. The Court found that the UK courts’ scope of review of Mr Paulet’s case had been too narrow. The majority objected to the fact that the domestic courts had simply found that the confiscation order against Mr Paulet had been in the public interest, without balancing that conclusion against his right to peaceful enjoyment of his possessions as required under the European Convention. Continue reading

Eastenders in Supreme Court: A1P1 filling in the gaps


EastEnders_TitleBarnes v. The Eastenders Group [2014] UKSC 26 read judgment

Not Albert Square, but it could be. The Crown Prosecution Service suspect two individuals of a massive duty/VAT fraud in their cash and carry businesses. The CPS go to the Crown Court (in the absence of the individuals) and get an order to appoint a receiver (i.e. a paid manager) to run the affairs of companies (Eastenders) in which the individuals are involved, as well as a restraint order against the individuals. Both receivership and restraint orders are set aside some months later by the Court of Appeal, on the basis that the HMRC investigator’s statements were largely “broad and unsupported assertions”. Problem: by then the receiver had run up £772,547 in fees.

Simple issue. Who bears those fees? The receiver, the CPS or the companies against whom the order was made? And A1P1 (the right to possessions) made the difference.

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Consultation – backing no horses, and the importance of interim relief

_69067404_daycentreprotestLH, R (o.t.a) v. Shropshire Council  [2014] EWCA 404 (Civ), Court of Appeal, 4 April 2014  - read judgment

Good advertisement for the flexibility of the common law, this case. This is because the duty to consult owed by a public body extends into all reaches of public law, from the regulation of a metal trading company (see my recent post here) to care centres and residential homes. Indeed it was in the context of residential home closures that the modern law got worked out. In the 1992 case of  ex parte Baker there had been a draft community care plan which had made no reference to the closure of individual homes, and which was followed up by a bolt from the blue – residents of one home only had 5 days’ notice that their home was to close.  

In none of these cases is there a statutory duty to consult – it is an aspect of common law fairness. 

The LH case concerns the closure of an adult care day centre. The question in LH was how to apply the principles in Baker to a rather more nuanced consultation approach, where closure of day centres in general was raised in consultation, but the closure of the specific day centre (Hartleys) was not.

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Backing just one horse in a consultation process can be unfair


Aluminum-Warehouse21United Company Rusal Plc (R, o.t.a of) v. London Metal Exchange Trust  [2014] EWHC 890 (Admin), Phillips J, 27 March 2014  - read 
judgment

Public law principles allow you to challenge a decision of a public authority if the consultation process preceding it was unfair. Unfairness comes in many shapes and sizes, but the commonest one alleged is that it was not carried out at the formative stage. The authority had already made up enough of its mind so the consultation process ceased to mean anything  - it was just going through the motions.

The law is equally clear that an authority does not have to consult on every conceivable option. Indeed it can just consult on its preferred option. 

But this decision shows that if it does so it has to be wary, because on the particular facts that may be unfair.

Enter our cast, challenger in the form of Rusal (proprietor one Oleg Deripaska), and the defendant, the London Metal Exchange.

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Trains, pains and allegations: fairness in medical misconduct cases – Richard Booth QC

785px-Doctors_stethoscope_1West London Mental Health NHS Trust (Respondent) v Chhabra (Appellant) [2013] UKSC 80 – read judgment

It is not unknown for lawyers or doctors to speak on a mobile phone about confidential details of a case while travelling by train. Some of you may even have left case papers out on your seat or table while you hunt down a bacon baguette from the Travelling Chef (formerly known as “Toastie Geoff” prior to rebranding). If so, read on, for this is a cautionary tale…

This appeal by Dr Chhabra was concerned with the roles of the case investigator and the case manager when handling concerns about a doctor’s performance under the disciplinary procedures introduced over eight years ago for doctors and dentists in the National Health Service. The national policy framework is known as ‘Maintaining High Professional Standards in the Modern NHS’ (MHPS), which the Trust had implemented through its own policies.

The factual summary below is derived from the Supreme Court Press Summary

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CJEU sets itself against secret “nod and a wink” justice

Fulmen & Mahmoudian v. Council of the European Union,28 November 2013,  read judgment

I posted last year on a decision by the General Court in Luxembourg, in which Fulmen successfully challenged sanctions taken against it as part of EU policy to apply pressure on Iran to end nuclear proliferation.

 Fulmen was said to have supplied electrical equipment on the Qom/Fordoo nuclear site and Mr Mahmoudian was said to be a director of Fulmen. Hence all of their assets were frozen by the EU.

The CJEU has now roundly dismissed the appeal by the EU Council from the ruling of the General Court. The sanctions order has been annulled – over 3 years after it was made. The Council has been told that if it wants to uphold such orders, it must adduce evidence to the Court, however sensitive the subject matter, and even if not all of that evidence is passed on to those affected.

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Back to basics: why a public authority can’t be an HRA victim

SLMRightToProtestFrontSmall.previewDavid Mead, in an interesting post – here - about “publicness” in section 6 of the Human Rights Act, looks at a case in which the Olympic Delivery Agency got an injunction against protesters: Olympic Delivery Authority v Persons Unknown . The ODA was a public authority, and the protesters were advancing defences under Articles 10 (freedom of expression) and 11 (freedom of association). Arnold J dismissed the defences on the basis that these rights needed to be balanced against the ODA’s rights to property under A1P1

As Mead points out, the judge was probably wrong to do so. On the face of it, the ODA had no rights under the Convention, under A1P1 or otherwise, because it was a public authority, and was likely to be acting as such in its protester-clearing role. One can perhaps save the judge’s blushes, by a slightly different route. The right of free speech under Article 10(1) has to be balanced against the protection of the rights of others under Article 10(2), and the latter would cover the ODA’s property rights which it was enforcing.

But the more fundamental question is why public authorities (think local authorities or NHS Trusts) cannot complain that they are HRA victims. After all, they can be unfairly dumped on by central government, can be lied about, can have their finances cut, their functions or their premises taken away (hospital unit closures), can receive an unfair trial, and ultimately lose their “life” in some governmental reorganisation.

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Transforming Strasbourg’s A1P1 right to property?

private-property“Transforming the right to property” is the title of an interesting and controversial recent post (17 July 2013) on the Strasbourg Observers blog by Laurens Lavrysen.  He declares his position up front: 

“Reading Strasbourg case-law on a systematic basis, I always feel uncomfortable when I see the Court’s expansive protection in the field of Article 1 Protocol 1. Basically, that is because I don’t really like the idea of a human right to property for a number of reasons.”

These reasons can be summarised as (i) the right assumes the current distribution of wealth, and thus protects that status quo; (ii) the right can amount itself to a violation of other human rights – slavery being the most egregious example, though Lavrysen asserts more controversially the fact that intellectual property rights may restrict access to medicines affecting the right to health (iii) the right does not distinguish between the types of property its protects

thereby principally placing the poor man’s means of subsistence on the same footing as the millionaire’s yacht.

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Sea fishing, quotas and A1P1: “no-one owns the sea”

carouselThe UK Association of Fish Producer Organisations v. Secretary of State for Environment, Food and Rural Affairs, Cranston J,  10 July 2013  read judgment 

Interesting alignment of parties in this challenge to Defra’s new system of allocating fish quota brought by an industry body (UKAFPO), in practice representing the larger fishing fleet – vessels over 10 metres in length –  Defra was supported by Greenpeace (how often does that happen?), and by the New Under Ten Fishermen’s Association. And this was because Defra had transferred some fishing quota from the larger to the smaller fishing fleet, namely those under 10 metres in length who fish inshore waters.

The first claim was that UKAFPO had a substantive legitimate expectation in their favour which was unlawfully frustrated by Defra’s change of policy. The second was that there was a breach of Article 1 of Protocol 1 (A1P1) of ECHR, or its EU analogue, Article 17 of the Charter. The third was that UKAFPO was being discriminated against unlawfully – comparable situations must not be treated differently under EU law, and only English fishermen who were members of English fish producers organisations were affected.

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Guerilla gardening in unlawfully occupied property did not give rise to Article 8 rights

GrowHeathrowMalik v Fassenfelt and others [2013] EWCA Civ 798 – read judgment

A common law rule that the court had no jurisdiction to extend time to a trespasser could no longer stand against the Article 8 requirement that a trespasser be given some time before being required to vacate:

The idea that an Englishman’s home is his castle is firmly embedded in English folklore and it finds its counterpart in the common law of the realm which provides a remedy to enable the owner of the castle to secure the eviction of trespassers from it. But what if the invaders occupy for long enough to establish their home within the keep? Whose castle is it now? Whose home must the law now protect?

This was the question before the Court of Appeal in a challenge to a possession order requiring the removal of squatters from private land.

Although there is now some doubt as to whether the leading authority on landowners’ rights against squatters is still good law, Article 8 still does not entitle a trespasser to stay on the land for ever. At its highest it does no more than give the trespasser an entitlement to more time to arrange his affairs and move out.

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Sparks fly in the Ukraine

electrical-discharge-in-multiple-sparks-from-prongs-pins-of-uk-electric-mains-plug-3-prong-fuse-carrier-in-base-rescan-rescan-rescan-ajhdKirovogradoblenergo, Pat v Ukraine (Application no. 35088/07) 27 June 2013 – read judgment 

Shortly after the break up of the Soviet Union, the Ukraine introduced an interesting piece of legislation called the Status of Judges Act.

Being a judge behind the Iron Curtain couldn’t have been much fun, and rendering the profession more attractive once society had opened up somewhat was probably one of the more pressing challenges facing the new regime. One of the chief provisions in the SoJA was to spare members of the judiciary from paying half their electricity bills. What this tells us about the status of judges before and shortly after the dissolution of communism is itself an interesting subject, but outside the scope of this post. Continue reading

A1P1 and property rights in the Supreme Court again

shapeimage_1-1Cusack v. London Borough of Harrow  [2013] UKSC, 19 June 2013 read judgment 

This is the tale of how a solicitor from Harrow ended up litigating about his off-street parking in the Supreme Court – and reached for Article 1 of Protocol 1 (A1P1) of ECHR, by way of a second string to his bow. Not his choice, as he had won in the Court of Appeal on other grounds. But his failure on the point reminds us that in the majority of cases A1P1 is a difficult argument to bring home.

Mr Cusack had been parking his car in front of his premises since the late 1960s. He got temporary planning permission for his offices in 1973, but hung on when this expired and got established planning rights in 1976.

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An ABC on proportionality – with Bank Mellat as our primer

seo-marketing-320x200Bank Mellat v HM Treasury [2013] UKSC 39 (see judgment)

My post of earlier this week explained why the majority of the Supreme Court struck down a direction telling all financial institutions not to deal with this Iranian Bank. The legal ground (involving, as Lord Sumption described it, “an exacting analysis of the factual evidence in defence of the measure” [20]) was that the direction was “disproportionate”. The judgments (particularly the dissenting one of Lord Reed) tell us a lot about the scope of proportionality. And there is a good deal more to it than there might at first sight appear.

So it may be worth doing a bit of a bluffers guide, hand in hand with Lord Reed.

The concept arises in human rights law and in EU law. Its ECHR and EU incarnations derive from German administrative law, but its development in English law shows strong common-law influences. It applies in many different contexts, and the intensity of the review required critically depends on that context as well as the right being interfered with. So it is no simple thing to explain, but Lord Reed at [68] – [76] distils the main elements.

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Supreme Court – Measures against Iranian bank unlawful, and the secret hearing ruling

mellatBank Mellat v HM Treasury [2013] UKSC 38 (CMP: see judgment) and 39 (main: see judgment)

Two sets of judgments today from a 9-judge Supreme Court in the Bank Mellat case. The first explains why the Court adopted a secret procedure in the absence of the Bank (i.e. a Closed Material Procedure) but added that the whole palaver in fact added nothing to their knowledge. The second concludes that financial restrictions imposed in 2009 on an Iranian Bank which effectively excluded it from the UK financial market were arbitrary and irrational and were also procedurally unfair. 

The saga started when on 9 October 2009 the Treasury made a direction under Schedule 7 of the Counter-Terrorism Act 2008 requiring all persons operating in the financial sector not to have any commercial dealings with Bank Mellat. The Treasury said that the Bank had connections with Iran’s nuclear and ballistic missile programme. Continue reading