Supreme Court: unfairness/equal treatment only an aspect of irrationality
16 May 2018
R (o.t.a. Gallaher et al) v. Competition and Markets Authority  UKSC 25, 16 May 2018, read judgment
UK public law is very curious. You could probably write much of its substantive law on a couple of postcards, and yet it continues to raise problems of analysis and application which tax the system’s finest legal brains.
This much is clear from today’s Supreme Court’s decision that notions of public law unfairness and equal treatment are no more than aspects of irrationality.
The CMA (then the OFT) were investigating tobacco price-fixing. Gallaher et al reached an early settlement with the OFT, at a discount of their fines. Another price-fixer, TMR, did likewise, but extracted an assurance from the OFT that, if there were a successful appeal by others against the OFT decision, the OFT would apply the outcome of any appeal to TMR, and accordingly withdraw or vary its decision against TMR.
6 other parties then appealed successfully. TMR asked and got its money back from the OFT relying on the assurance.
Gallaher et al tried to appeal out of time, and were not allowed to. They then turned round to the OFT and said, by reference to TMR: why can’t we have our money back?
As Lord Briggs points out, the OFT had three choices when the 6 other parties had successfully appealed:
(a) go back on the assurance to TMR;
(b) extend that assurance to Gallaher at al;
(c) honour the assurance to TMR, but not extend it to others.
This judicial review, which had succeeded in the Court of Appeal, was about whether the OFT was wrong in law to choose (c) over (b).
Note that the OFT had not given any assurance to Gallaher, and Gallaher was unaware of the assurance to TMR when Gallaher agreed to settle.
The case came before the Supreme Court asking whether the OFT was in breach of its duty of fairness and of equal treatment, these duties to be drawn from domestic and EU law public law principles.
The unanimous answer was no.
Lord Carnwath, supported in particular by Lord Sumption, pointed out that there is no distinct principle of equal treatment in domestic law. Relying particularly on Lord Hoffmann in Matadeen, he pointed out that equal treatment may be an important democratic principle, and a general principle of rational behaviour, but this did not make it, without more, a justiciable principle – it should not always be the judges who had the last word on whether the principle had been observed.
Similar points arose in the supposed legal principle of fairness. Unfairness by itself was not a ground for judicial review, and much-quoted dicta in cases such as Preston or Unilever did not establish such a duty.
Instead, these notions were aspects of the legal principle of irrationality. It was, generally speaking, irrational to treat like parties in an unlike fashion. Similarly, the principle of legitimate expectation of equal treatment was simply an aspect of rational behaviour by a public authority. But, as Lord Carnwath pointed out at , identifying a legitimate expectation does not tell you anything about whether that expectation confers rights and remedies in public law.
Hence, the Court said, language in the authorities like “conspicuous” unfairness, or unfairness amounting to an “abuse of power”,
adds nothing to the ordinary principles of judicial review, notably in the present context irrationality and legitimate expectation. It is by reference to those principles that cases such as the present must be judged. 
As Lord Sumption pithily summarised his views on equal treatment and unfairness at 
In public law, as in most other areas of law, it is important not unnecessarily to multiply categories. It tends to undermine the coherence of the law by generating a mass of disparate special rules distinct from those applying in public law generally or those which apply to neighbouring categories. To say that a decision-maker must treat persons equally unless there is a reason for treating them differently begs the question what counts as a valid reason for treating them differently.
Likewise, to say that the result of the decision must be substantively fair, or at least not “conspicuously” unfair, begs the question by what legal standard the fairness of the decision is to be assessed. Absent a legitimate expectation of a different result arising from the decision-maker’s statements or conduct, a decision which is rationally based on relevant considerations is most unlikely to be unfair in any legally cognisable sense
Disagreeing with the Court of Appeal, the Supreme Court had no difficulty in allowing the OFT’s appeal.
Per Lord Sumption, a price-fixer being investigated by the OFT was entitled either to the discount for an early settlement or to the benefit of further investigation and/or an appeal, not both: . The oral assurance “unwisely” given to TMR disturbed this “careful drawn balance”; such an assurance was mistakenly given: .
Given those findings, it was hardly surprising that the Court concluded that it was not irrational not to repay Gallaher, even though TMR had been repaid. Yes,the treatment was different but that difference was objectively justifiable.
Some legal text-book writers may be looking to prune their next editions in the light of this. The slimming down of legal principle may be thought to be desirable, and some of the 1980s pronouncements about what is or is not an abuse of power worthy of judicial intervention look a bit dated and question-begging.
But given that irrationality is somewhat more expansive than it was in years past, it may be that this result may make no difference to the outcome of most, if not all, judicial reviews.
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