Regulators' complaints procedures should allow challenges to substantive conclusions

In R (on the application of Durand Academy Trust) v OFSTED [2017] EWHC 2097 (Admin), the High Court quashed a report of the education regulator (the "Report") on the basis that its complaints procedures were not fair as they did not permit the claimant school ("the School") to substantively challenge the conclusions of the Report.

Key Points

• It is unlikely to be fair and rational for a regulator to argue that its processes are so effective that there is no need to provide the opportunity for substantive regulatory conclusions to be challenged.
• It will be difficult to persuade a court that external factors have influenced the independence of a regulator without strong evidence.

Background

The School was subject to an inspection by OFSTED in late 2016, following which OFSTED judged the School to be inadequate and recommended that it be placed into special measures in the Report dated 8 February 2017. The Report was first sent to the School in draft on 6 January with five working days given for the School to comment. The School provided comments on factual accuracy on 13 January.

OFSTED's complaints procedures provide for three steps. Step one allows informal resolution, step two is the formal complaints procedure and step three provides for a review of the complaint handling process (i.e. whether the complaint was investigated fairly and properly in line with the published policy). However, where the complaint relates to a judgment that the school has serious weaknesses or requires special measures, the procedures provide that those judgments will not be reconsidered under step 2, because those judgments are already subject to extended quality assurance procedures. Instead step 2 can only involve complaints about inspector conduct or the inspection process.

The School submitted a formal stage two complaint on 20 January. OFSTED's judgment was confirmed and a response was sent to the School on 31 January with only minor amendments being made to the Report.

The challenge

The School brought judicial review proceedings on two grounds:

1. that the complaints procedures were unfair. If there is an internal appeals process it should be fair and robust, and should permit a substantive challenge which could lead to the decision being changed; and
2. that OFSTED's assessment of it as inadequate was so "vitiated by unfair and arbitrary evaluations, factual errors and…a relentless accentuation of the negative and elimination of the positive as to be Wednesbury unreasonable".

An interim injunction was also sought and granted by the court restraining publication of the Report pending determination of the claim, although the Report had already by then briefly and erroneously appeared on the OFSTED website before being taken down.

In the background there was an ongoing and protracted dispute between the School and the Education Funding Agency, part of the Department for Education, concerning the School's academy funding agreement. The School alleged that OFSTED had allowed its independent and professional judgment to be clouded by the dispute, pointing to the unusually high degree of scrutiny of the School over recent years, but the judge entirely rejected this suggestion.

The judgment

In respect of ground one concerning the complaints procedures, the judge noted that in effect the more serious and negative OFSTED's criticisms of a school were, the less chance it had to challenge the analysis because of the limits placed on step two in cases where the school is judged to have serious weaknesses or needing special measures. He pointed to examples where OFSTED inspectors have been found to have reached irrational conclusions. His conclusion was that "a complaints process which effectively says there is no need to permit an aggrieved party to pursue a substantive challenge to the conclusions of a report it considers to be defective because the decision maker's processes are so effective that the decision will always in effect be unimpeachable is not a rational or fair process." This absence of the ability effectively to challenge the Reports rendered the complaints procedures unfair and vitiated the Report, meaning ultimately that the Report should be quashed.

In the light of this conclusion on ground one, the judge did not go on to consider the second ground in any detail, but commented that he had significant concerns as to whether a fair analysis of the evidence really did lead to the conclusions reached by OFSTED. That said, he did not express a concluded view on the rationality of the Report.

Comment

This case illustrates the willingness of the courts to engage in detail on the fairness of regulator's processes and the need to allow those affected an adequate opportunity to challenge substantive conclusions from a regulator. By contrast, even though the judge obviously had doubts about the rationality of the conclusions, he was reluctant to make any findings about the substantive merits of the Report. Similarly, he dismissed straight away any allegations of a lack of independence or objectivity on the part of the regulator, which is unsurprising without strong and cogent evidence to support such allegations.

Although regulators enjoy a high threshold before their substantive conclusions are overturned by a court on judicial review, this judgment illustrates the importance of having some opportunity for substantive challenge before the matter reaches judicial review and provides encouragement to regulated entities who do not consider those opportunities to have been adequate.

Andrew Lidbetter Partner +44 20 7466 2066 Email	Nusrat Zar Partner +44 20 7466 2465 Email	Jasveer Randhawa Of Counsel +44 20 7466 2998 Email