High Court gives guidance on conduct of non-statutory inquiries

This post was first published on our Public Law Notes blog.

In R (on the application of Clarke and Others) v Holliday [2019] EWHC 3596 (Admin), the High Court dismissed an application for permission to apply for judicial review of decisions taken by the Chairman of an independent, non-statutory inquiry (the “Inquiry”). In doing so the court proceeded on the basis that the Inquiry was amenable to judicial review but did not reach a concluded view on that point given that it had dismissed all of the grounds of challenge.

Key points

• Non-statutory inquiries may be amenable to judicial review and should comply with public law principles (such as procedural fairness).
• The courts will carefully examine whether those tasked with making public law decisions have engaged in unlawful delegation.
• The requirements of “Maxwellisation” (and other elements of procedural fairness) are limited and public bodies should be wary of voluntarily adding other stages to the process.

Background

The Inquiry arose out of the procurement process which the Nuclear Decommissioning Authority (the “NDA”) had conducted in relation to the decommissioning of the twelve Magnox nuclear sites.

That procurement competition had concluded in April 2014, at which time the NDA awarded a contract worth around £6 billion to Cavendish Fluor Partnership (“CFP”). Two members of the runner-up consortium then brought claims challenging the procurement process, which were ultimately settled (following a finding by the High Court that the NDA had made errors in the procurement competition) for a total of just under £100 million. Subsequently the NDA terminated the contract it had awarded to CFP nine years early.

The Terms of Reference of the Inquiry, which was established by the Secretary of State for Business, Energy and Industrial Strategy in the wake of these events, required the Chairman, Mr Steven Holliday, to investigate the procurement process and subsequent events.

The Inquiry established the following four-stage process for providing evidence and including critical comments in the final report:

• document assistance interviews;
• evidence-gathering interviews;
• potential criticism interviews; and
• a representations process.

During stage 3, anyone whom the Inquiry was considering criticising in its final report would receive a letter inviting them to interview and setting out the potential criticisms and relevant documents. The Inquiry would then consider whether to include the criticism in the final report. During stage 4 the Inquiry would then send extracts of the draft report containing the proposed criticisms and the accompanying evidence to the relevant individuals, who could make written representations before the report was finalised. Before sending extracts of the draft report (or accompanying evidence) to individuals the Inquiry required them to sign a confidentiality undertaking which prohibited them from sharing the material with anyone else.

The claim and judgment

The five individual claimants were members of NDA’s senior management team during the procurement process. They were each notified by the Inquiry that they may be subject to criticism in the Inquiry’s final report.

Four of the five claimants participated in stage 3. They were invited to participate in stage 4 however refused to do so pending resolution of their claim (as they refused to sign the confidentiality undertaking). The other claimant did not participate in stage 3 (because at that time the Inquiry had not identified a criticism of him) but was invited to participate in stage 4 and signed a confidentiality undertaking accordingly.

Challenges were brought on a number of grounds, including that: Mr Holliday had unlawfully delegated his decision-making functions to his staff; that the Inquiry had failed in its duty to disclose material to the claimants; and that the Inquiry had unfairly prohibited information-sharing through the use of confidentiality undertakings.

In addition to defending these grounds, the defendant claimed that the Inquiry was not amenable to judicial review.

Unlawful delegation

The claimants alleged that Mr Holliday had unlawfully delegated his decision-making functions by permitting staff members to reach provisional findings during stage 3 (the “potential criticisms” stage), which he had been unduly influenced by. In support of their position, the claimants relied on the Hong Kong Court of Appeal case of Dato Tan Leong Min v Insider Dealing Tribunal [1999] HKC 83 which noted that “Counsel for the Tribunal should never be invited to assist in the writing of the report or to make submission upon the draft report”.

Although the court found this ground to be arguable, and so granted permission to apply for judicial review, it ultimately dismissed the claim. This was because, having examined the evidence, it was clear that no decisions had been made at stage 3 but rather the potential criticisms had been “formulated as a tool for exploring issues”. It was permissible for members of the Inquiry team to compile such potential criticisms; the important point was that “sole responsibility for formulating and adopting final decisions as to the criticisms” remained with Mr Holliday.

While the court did not find that the Inquiry’s conduct was unlawful, it did consider that the manner in which stage 3 had been carried out created “unnecessary anxiety and could have been better handled”. In particular the drafting of the potential criticisms (some of which appeared to be expressed in terms which were conclusive) could have been improved.

Interestingly the court also found that the Inquiry “need not have adopted” the two stage process set out in stages 3 and 4. As a matter of procedural fairness, only the latter stage (often known as “Maxwellisation”, whereby provisional findings which might adversely affect a person are put to them with an opportunity for them to respond) was necessary.

Other grounds

The court refused permission to apply for judicial review in relation to each of the other grounds. It found that the challenge on the basis of the lack of disclosure was premature (as disclosure would occur during stage 4 which had not yet happened) and that the Inquiry’s use of confidentiality undertakings was lawful in the circumstances (noting that the Inquiry had said that it would consider requests to share information on a case-by-case basis).

Amenability

Although (having dismissed all grounds) the court did not make a finding on whether the Inquiry was amenable to judicial review, the judge did indicate his view that the Inquiry was exercising a public function. The judge emphasised that this is a fact specific question and that, in his view, non-statutory inquiries will not always be amenable to judicial review.

Comment

This case illustrates that those tasked (whether by Parliament, Government, or otherwise) with making public law decisions must ensure that they do not unlawfully delegate their functions. In an inquiry context, this is likely to mean that the Chair must retain responsibility for formulating and adopting criticisms and recommendations. In addition, those engaged in preparing reports (or commenting on draft reports) which are subject to a “Maxwellisation” process should be mindful of the court’s comments about the limits to this duty and be cautious of voluntarily adding steps to the process which are not required as a matter of procedural fairness.  Although in this case the flaws with the execution of those additional steps were not sufficient to make the process unlawful, this case shows that the courts will still scrutinise the process (which here resulted in criticism of the Inquiry).