By Nicholas Dobson, Pinsent Masons, Leeds


Pleasing the people: legitimate expectation

When is an expectation created by a public authority legitimate? Sir Robin Auld in the Administrative Court recently turned the spotlight on this area in an action brought by an aggrieved tenant following a large-scale voluntary housing transfer (LSVT). The case was R (Bath) v North Somerset Council [2008] EWHC 630, judgment in which was given on 4 April this year.



In June 2007 the council had resolved to effect an LSVT following consent from the secretary of state and majority approval from the tenants affected. The claimant tenant, Pat Bath, sought judicial review. She complained that the council had breached a legitimate expectation that it would apply the entire net proceeds of the transfer to capital housing projects, in line with consultation documents issued before tenant approval to the transfer had been sought, and on which she had relied in voting for the transfer.



At the time, the council had expected the net proceeds to be between £6-8 million but it had not identified that, or any other estimated ranges of figures, in the document. In the event, the monies received were dramatically higher - more than £22 million. Nevertheless, the council decided to allocate £8 million of the sum received to housing projects and the balance to other areas within its responsibility. Mrs Bath sought (among other things) a declaration that the council was bound to spend all the net capital receipts on housing.





Clear and unqualified representation needed

Auld indicated that the law normally requires a legitimate expectation to be founded on a clear and unqualified representation to the claimant (and/or to those for whom he or she may be taken as speaking), underpinning a contention that departure from the representation by the maker is so unfair as to amount to an abuse of power. Unfortunately for Mrs Bath, there was no such clear and unqualified commitment in the consultation documents or otherwise. There had been no mention of any specific amount estimated or contemplated to become available. Furthermore, it was inherent in the nature of the proposal that the detailed implementation might be subject to change, as in fact happened. The consultation documentation would also 'inevitably be affected by future spending and revenue-raising decisions of the council over the whole range of its activities'.





Legitimate expectation v fettering discretion

But how can the following issue be resolved: what if, in creating a binding legitimate expectation, an authority risks unlawfully fettering its discretion?



Auld pointed out that, following judgments from the Court of Appeal, a consensus seems to have emerged in recent years as to the proper approach in a claim based on legitimate expectation of a substantive benefit. This is:



(1) to consider whether departure from a relevant representation is so unfair to the person(s) to whom it was made as to amount to an abuse of power; and



(2) to weigh the unfairness against any overriding public interest relied upon for departure from the representation (see R v North and East Devon Health Authority, ex parte Coughlan [1999] 2 WLR 622).



Such unfairness is normally (although not inevitably) evidenced in detriment to the holder of the legitimate expectation. However, in this case, the court found no unfairness to Mrs Bath or other tenants affected by the transfer.



But what of the tension between, on the one hand, the principle that where a public authority has, by representations and/or conduct, given rise to a legitimate expectation to a discrete body of persons, it should not be allowed to depart from it lightly (see R v North and East Devon Health Authority, ex parte Coughlan [1999] 2 WLR 622 (CA) and Nadarajah Abdi v Secretary of State for the Home Department [2005] EWCA Civ 1363) and, on the other hand, the need to not fetter discretion and judgement as to what is required in the public interest?



Auld thought it was probably unhelpful to place the persuasive burden on one side or another in coming to a value judgement. In his view (per Lord Justice Peter Gibson in Rowland v. Environment Agency (2005) Ch 1) it is for a court to ask itself whether a change of tack affecting a claimant who has been led to expect something different is 'a just exercise of power'.



Proportionality considerations are relevant in deciding whether the interest of a particular claimant or claimants should override that of the general public and good administration, and whether to give primacy to the public interest would be 'overkill'. In short, said Auld, 'a public body responsible for statements of policy or of proposals or representations as to its future conduct affecting a wide range of interests may change such statements of intent if and when the public interest requires it, if it does so without unfairness to the claimant and does so proportionately'.



But how is proportionality to be determined in these circumstances? Lord Justice Laws had forged a path through the fog in Nadarajah v Secretary of State for the Home Department (2005) EWCA Civ 1363: 'Proportionality will be judged... by the respective force of the competing interests arising in the case. Thus: where the representation relied on amounts to an unambiguous promise; where there is detrimental reliance; where the promise is made to an individual or specific group; these are instances where denial of the expectation is likely to be harder to justify as a proportionate measure... On the other hand, where the government decision-maker is concerned to raise wide-ranging or "macro-political" issues of policy, the expectation's enforcement in the courts will encounter a steeper climb.'



Applying these principles to the present case, if there had been any departure from any legitimate expectation on the part of Mrs Bath, it would not in the circumstances have been an abuse of power or otherwise unfair. And 'it was clearly in the interest of the whole community, of which the affected tenants formed a significant part, and for which the council is responsible, and consistent with central governmental guidance, to have regard, when allocating money for housing, to its spending priorities and resources as a whole'.



The court noted that there were changes of circumstances which entitled the council to conclude that it was in the public interest to limit the sum it should earmark for housing to £8 million (as originally envisaged) to enable it to meet other pressing needs, in particular in relation to highways. There was no suggestion that the council had acted in bad faith, or that it had regard to any matters other than its assessment of spending priorities at the time, these being matters of judgement for the council to identify from time to time according to circumstance. The court also showed its understanding of the local governance responsibilities of councils in highlighting the difficulty that would have been posed in contemplating highly prescriptive mandatory relief of the kind sought '...in the exercise by a local authority of its responsibility for allocation of its resources in the best interests, as it sees it, of the community for which it is responsible'.





Conclusion

The Bath case provides some useful clarification as to how legitimate expectation is to be squared with the wider public interest. Proportionality is a key factor in weighing the 'respective force of the competing interests arising'. And in the local authority context, while councils must always act fairly and properly, they also equally have to take difficult governance decisions affecting a wide body of people in their areas, all with diverse and often conflicting interests. As Abraham Lincoln never said, you can't please all the people, all the time.





Summary: legitimate expectation and local government

Legitimate expectation is normally based on a clear and unqualified representation to the claimant underpinning a contention that to resile from the representation would be so unfair as to constitute an abuse of power.



In claims of legitimate expectation of a substantive benefit the proper approach is:



(1) to consider whether to resile from the representation would be so unfair as to amount to an abuse of power; and

(2) to weigh such unfairness against any overriding public interest relied upon for such resiling.



Unfairness is usually (although not inevitably) evidenced in detriment to the holder of the legitimate expectation.



In deciding where the balance should lie between the principle that a public body should not be allowed to depart lightly from a legitimate expectation it has generated and the need for a public authority not to fetter its discretion and judgment as to what is required in the public interest, the court should ask itself whether a change of tack would be 'a just exercise of power'.



Proportionality considerations are relevant in coming to a view having regard to the respective force of the competing interests arising.