Small solar systems on tenterhooks: Court of Appeal deliberates

17 January 2012 by

R (on the application of (1) Homesun Holdings (2) Solar Century Holdings (3) Friends of the Earth) v Secretary of State for Energy and Climate Change , Mitting J, 21 December 2011, hearing in the CA 13 & 16 January 2012 

Avid readers of this blog (posted unpromisingly between Christmas and New Year) may recall this successful challenge to a proposal to modify solar power subsidies for small photovoltaic proposals (called by the judge, charmingly, “small solar systems”). At that stage, all I had was a short summary of the decision. Now a full transcript is available, albeit from behind a paywall. As importantly, the case has already bounded its way to the Court of Appeal, who have just finished hearing it, and are due to give judgment in February. I shall therefore not deal with the basis upon which the judge ruled that the change of policy was unlawful, but the broader point in my last post –  when can you challenge a proposal?

The judgment is pithy and helpful for those tussling with such a problem. The Minister contended that he could consult on any proposal, and provided he had not made up his mind, he could not be judicially reviewed whilst this process was happening. Yes, said Mitting J, I agree with all that…

But my acceptance is subject to an all-important caveat. The proposal must be to make a lawful decision. In the case of a proposal to enact primary legislation –subject to an exception for overriding EU law — it will by definition be lawful. Parliament can do what it pleases by statute. But in the case of a proposal to which effect may only be given, or is intended to be given, by a purely executive decision; or by an executive decision validated by parliamentary resolution, or the absence of a negative resolution under the Statutory Instruments Act 1946, or by a similar process, the lawfulness of the proposal may properly be the subject of a judicial review claim.

That is especially so where, as here, the making of the proposal inevitably had an immediate and significant impact on the market to which it related.

The evidence was that the proposal, if adopted, would reduce the uptake of “small solar systems” between 12 December 2011 and 1 April 2012 by 70 per cent, because the feed in tariff which was to have been payable over 25 years would be substantially reduced – so much so that one of the claimant operators had made a number of employees redundant with effect from 12 January 2012 unless the proposal were reversed.

The judge then cited a helpful passage from Carnwath LJ in R(Shrewsbury and Atcham Borough Council v Secretary of State for Communities and Local Government:

32. Judicial review, generally, is concerned with actions or other events which have, or will have, substantive legal consequences: for example, by conferring new legal rights or powers, or by restricting existing legal rights or interests. Typically there is a process of initiation, consultation, and review, culminating in the formal action or event (‘the substantive event’) which creates the new legal right or restriction. For example, the substantive event may be the grant of a planning permission, following a formal process of application, consultation and resolution by the determining authority. Although each step in the process may be subject to specific legal requirements, it is only at the stage of the formal grant of planning permission that a new legal right is created.

33. Judicial review proceedings may come after the substantive event, with a view to having it set aside or ‘quashed’; or in advance, when it is threatened or in preparation, with a view to having it stayed or ‘prohibited’. In the latter case, the immediate challenge may be directed at decisions or action which are no more than steps on the way to the substantive event.”

So one can challenge “a step on the way to the substantive event” if that step is itself unlawful (say defective consultation), or if, as in this case, the proposal which is the subject of consultation would be unlawful, if proceeded with.

The Court of Appeal decided to hear the Minister’s application for permission to appeal with the appeal itself – a welcome decision to get on with things, given the importance of the decision to both claimants and Minister alike. Though the generous subsidy for this clean energy is paid out of our taxes, one can’t help having one’s fingers crossed for our claimants and their employees subject to redundancy notices expiring in a chill January.

So watch this space in February.

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