British Medical Association, R (on the application of) v General Medical Council [2008] EWHC 2602 (Admin)

[2008] EWHC 2602 (Admin)

Case No CO/7714/2008

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

THE ADMINISTRATIVE COURT

Venue Royal Courts of Justice

Date Friday, 3 October 2008

Strand

London WC2

B E F O R E:

MR JUSTICE BURNETT

Between

THE QUEEN ON THE APPLICATION OF BRITISH MEDICAL ASSOCIATIONClaimant

-v-

Between

GENERAL MEDICAL COUNCILDefendant

Computer-Aided Transcript of the Stenograph Notes of

Merrill Legal Solutions Limited

190 Fleet Street London EC4A 2AG

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(Official Shorthand Writers to the Court)

Mr T Kerr QC and Ms A Proops appeared for CLAIMANT

Mr R Engleheart QC appeared for DEFENDANT

J U D G M E N T

[1]MR JUSTICE BURNETT: This is an application for permission to apply for judicial review by the British Medical Association of a decision of the General Medical Council of 22 May 2008, to abolish a concession to doctors aged 65 and over that they pay no annual retention fee to remain on the medical register. It comes before me for a rolled-up oral hearing as a matter of urgency, following an order of His Honour Judge Waksman QC who considered the papers on 15 August. He stayed the implementation of the decision, pending the outcome of these proceedings.

[2]The GMC acted to end the concession because they had concluded, on leading counsel's advice, that it was rendered unlawful by the Employment Equality (Age) Regulations 2006 which implemented those aspects of the Equal Treatment Directive 2000/78/EC dealing with age discrimination in the workplace.

[3]Before doing so, they did not consult all or any medical practitioners on the register, neither did they consult the BMA or other medical professional bodies such as the Royal Colleges, although they did give advance notice of their intention to act.

[4]Mr Kerr QC, who appears on behalf of the BMA, submits that in the factual circumstances surrounding the age-related concession, all registered medical practitioners had a legitimate expectation of consultation; the absence of which renders the decision to abolish that concession conspicuously unfair and an abuse of power. Alternatively, he submits that the decision not to consult was perverse. The legislative scheme.

[5]Section 3 of the Medical Act 1983 entitles an appropriately qualified person, whose fitness to practise is not impaired, to be a fully registered medical practitioner. Appropriate provision is made for those with overseas qualifications in the sections which follow. Registration brings with it the privileges, as they are described, set out in Part 6 of the Act. In reality, they comprise prohibitions for all those not registered.

[6]Section 46 prohibits any person from recovering in a court of law any charge rendered for medical advice, attendance or surgery unless he is registered.

[7]Section 47 provides that only those registered can act as physicians, surgeons or medical officers in any NHS hospital, prison, in the armed forces or other public institutions.

[8]Section 48 invalidates certificates, such as sick notes or prescriptions, if signed by someone who is unregistered.

[9]Section 49 imposes penalties via criminal offences for pretending to be a registered medical practitioner.

[10]Section 32 is concerned with registration fees, and as material it provides as follows:

"(1). Subject to the provisions of this Act, the General Council may make regulations with respect to the charging of fees in connection with the making of entries in the register of medical practitioners, and in particular: (a) prescribing a fee to be charged on the entry of a name or qualification in the register or on the restoration of any entry to the register; (b) prescribing a fee to be charged in respect of the retention in the register of the name of the person; (c) authorising the Registrar, notwithstanding anything in this Act, to refuse to make any entry in, or restore any entry to, the register until a fee prescribed by regulations under this section has been paid."

[11]In subsection (7):

"Regulations under this section prescribing fees may provide for the charging of different fees in different cases and may provide that fees shall not be chargeable in cases prescribed by the regulations."

[12]It can thus seen that this provision contemplates three types of fee. First, when a doctor enters the register. Secondly, if after a period of absence his name is restored to the register. Thirdly, a fee for retention on the register. It is the last of these with which this case is concerned.

[13]The retention fee is charged annually and has been so charged since 1970. The power to charge a retention fee was introduced by the Medical Act 1969. Before that time, doctors paid a fee on initial registration and were then never troubled to pay a fee again. The fees regulations referred to are made by the GMC and are a form of delegated legislation.

[14]The fees regulations in place before the changes which are the subject of this challenge were the General Medical Council Registration Fees Regulations 2008 which, by Regulation 8.1, provided:

"Any registered person who has reached the age of 65 years shall, on application to the registrar, be exempt from payment of annual retention fees."

[15]In practice, the GMC did not wait for an application. It holds the dates of birth of most, but not all of those registered on its database. No request for a retention fee was sent to any doctor who was known to have reached his 65th birthday. The Age Regulations.

[16]Age discrimination is defined by Regulation 3 of the Age Regulations which provides:

"(1). For the purposes of these regulations, a person ('A') discriminates against another person ('B') if: (a) on the grounds of B's age, A treats B less favourably than he treats or would treat other persons, or; (b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but: (i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons and; (ii) which puts B at that disadvantage. and A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of meeting a legitimate aim."

[17]By Regulation 3(2), a comparison of B's case with that of another person under Regulation 3(1) must be such that the relevant circumstances in the one case are the same, or not materially different, from the other. In other words, like must be compared with like in order to establish the existence of discrimination.

[18]Age discrimination is unlawful in the circumstances defined in the Age Regulations. In particular, by Regulation 19(1)(a), it is unlawful for a qualifications body to discriminate against a person in the terms on which it is prepared to confer a professional or trade qualification on him. Regulation 19(3) provides definitions of the words in Regulation 19(1)(a). The GMC, in its registration activities, is covered by Regulation 19.

[19]Part 4 of the Age Regulations contains general exceptions from the prohibitions in parts 2 and 3. Of note is Regulation 27, which provides that nothing in those parts shall render unlawful any act done:

" ... in order to comply with a requirement of any statutory provision."

[20]"Statutory provision" is itself defined as including an Act or an instrument made under an Act by a Minister of the Crown. It does not cover the fee regulations made by the GMC. It is thus readily apparent that the concession to those 65 and over is caught by the regulations and will be unlawful, unless the concession is a proportionate means of meeting a legitimate aim.

[21]I turn now to the facts. There is a very large body of factual material before the court which was dealt with extensively in written and oral argument by both counsel. That material has been provided overwhelmingly by the GMC. The BMA, through an application for disclosure, seeks to augment that material further. I shall return to that application at the end of this judgment.

[22]The material facts are these. When the annual retention fee was introduced in 1970, a number of exemptions were provided for. Those aged 65 and over were relieved of the burden of paying the fee. Certain overseas practitioners also paid nothing annually, as did doctors who, although under 65, had been forced to retire through ill health. These other two concessions were subsequently abolished without there being any consultation. Additionally, there exists an income-related concession. Doctors whose earnings fall below a particular threshold pay only half of the annual retention fee. That fee is now £390 per annum, having gone up from £290 earlier this year.

[23]Hitherto, the GMC had increased the fee relatively infrequently. In the late 90s until January 2002, it was £170. But the intention of the GMC is now to review the fee annually so that increments will be small and frequent, rather than relatively large and sporadic. There are currently 249,000 doctors on the register, of which about 31,000 benefit from the age exemption. It is not known how many of that number are fully retired and how many are working full-time or part-time, but I note that the compulsory requirement age in the NHS is 70.

[24]It would appear that neither the GMC, nor the BMA, or indeed any of the other professional medical bodies, appreciated that the Age Regulations would or might have an impact on the way these fees were charged. Consideration of the question was sparked by a letter to the GMC from Dr David Farrer-Brown, dated 30 January 2008. He was about to retire, but at the age of 60, rather than 65, and wished to be relieved of the fee. So his complaint was that he was being discriminated against, as compared to those over 65. His letter suggests that he appeared well versed in the detail of the legislation and asked expressly for an explanation of the legitimate aim that the apparent age discrimination was seeking to achieve. In his intervention, we see an application of the law of unintended consequences. Rather than extending the concession to those over 60, the GMC moved to abolish it for all. The explanation of what then followed can be collected from the statement of 5 September 2008 of William Roberts, the GMC's Director of Registration. I quote from paragraphs 20 to 24:

"20. Dr Farrer-Brown's letter prompted the GMC to be concerned that the scheme the ARF [I interpolate to say that that is the acronym for annual retention fee] (incorporating a purely aged-based exemption) might be unlawful. The GMC therefore sought advice from Dinah Rose QC, an acknowledged expert in discrimination law. By April 2008 the GMC had received preliminary advice from Ms Rose that the Age Exemption was likely to be unlawful and for that reason ought to be abolished. "21. At a private GMC Council seminar, held in Edinburgh on 2 April 2008, I informed the Council of that preliminary advice and that in consequence the GMC would probably need to abolish the Age Exemption. I also discussed the preliminary advice with meetings of the Resources, Audit, Registration and Diversity and Equality Committees. In none of those meetings did the members of the Council suggest that the GMC should continue with a scheme which was unlawful. None of the members identified any legitimate aim which the Age Exemption was a proportionate means of achieving. "22. At at least one of the Committee meetings I attended, a suggestion was mooted that a new scheme might be introduced so as to provide an exemption not explicitly on the ground of age, but on the grounds of the number of years of service provided in the UK by the doctor. In response to this suggestion, the GMC considered what would be the likely effect of such an alternative scheme. The GMC concluded that such a scheme would disproportionately favour older British males."

[25]And he then went on to explain why."23. The GMC considered, therefore, that any scheme based on the number of years of service would be likely to be not only indirectly discriminatory on grounds of age, but also risked being held indirectly discriminatory on grounds of race and sex.

"24. Ms Rose's final opinion was received in late April 2008. Ms Rose gave very clear advice that the Age Exemption amounted to unlawful discrimination on the grounds of age. Ms Rose also recommended that any transitional period phasing out the Age Exemption should be as short as possible."

[26]Ms Rose is a silk with deep experience of discrimination law. Her distinction and expertise could not, and has not been doubted. Privilege in her written opinion dated 22 April 2008 has been waived. She set out the nature of her instructions and conclusions in respect of each. So far as the instructions are concerned, she said this:

"I am instructed to advise the GMC on the following issues: "(a) Whether the provision at Regulation 8 of the GMC Registration Fees Regulations 2007, whereby a registered medical practitioner who has reached the age of 65 is exempt from the payment of annual retention fees, is contrary to the prohibition on age discrimination contained in the Employment Equality (Age) Regulations 2006; "(b) If so, whether the GMC would be lawfully entitled to implement compatible arrangements as regards those doctors who currently benefit from Regulation 8 over a transitional period."

[27]She provided a summary of her conclusions and answered each of those questions in the following terms:

"(a) The current exemption under Regulation 8 for those aged 65 and over is almost certainly contrary to the Age Regulations. I am not aware that there is any justification for this age-based difference in treatment, which has the effect that younger doctors are subsidising those aged over 65, regardless of their earnings or the expense to the GMC of regulating them; (b) It will be difficult for the GMC to justify a transitional period for moving to a lawful system. Whether there is any scope in law for such a period may depend on the outcome of an equal pay case, Cleveland and Redcar BC v Bainbridge (No 2), which was heard in January 2008 by the Court of Appeal, in which judgment is awaited."

[28]I should note that the Court of Appeal has since given its judgment in that case.

[29]A third issue, with which it is not necessary to deal in detail in this application, was also canvassed with Ms Rose. Argument about the transitional provisions before me has been peripheral. On the main issue, Ms Rose confirmed that the GMC was a qualification body for the purposes of Regulation 19 and thus subject to the anti-discrimination provisions of the Age Regulations. Her core reasoning is then set out:

"14. There is no doubt that the Fees Regulations treat registered medical practitioners under the age of 65 less favourably, on grounds of age, than registered medical practitioners over the age of 65. Such treatment is unlawful direct age discrimination unless it can be shown to be a proportionate means of meeting a legitimate aim. "15. My instructions do not seek to identify any legitimate aim pursued by the age exemption, or to suggest that the exemption is proportionate to any such aim. It is difficult to see how there could be a proportionate justification for this type of discrimination. Age is a poor proxy for a doctor's means, or the costs incurred by the GMC in regulating him. There does not appear to be any good reason why a doctor aged 64 who has retired from medical practice but wishes to retain his registration should pay a fee, whereas an active doctor with a substantial income aged 65 or over should pay no fee. "16. The Fees Regulations are made under statute, but they were not made by a Minister of the Crown, but by the GMC. The exception at Regulation 27 thus does not apply to them. "17. Accordingly, unless some justification of which I am currently unaware (and the existence of which seems most unlikely) can be identified, the current regime is contrary to the Age Regulations, and involves unlawful discrimination against doctors under the age of 65. "18. That being so, the GMC is under a duty to ensure that the current arrangements are changed as soon as possible, by securing the necessary amendments to the Regulations. A public authority which knowingly acts unlawfully, in the knowledge that its acts will probably cause damage to a third party, risks not only a claim for age discrimination but, potentially, a claim for misfeasance in public office."

[30]On 8 May 2008, Mr Roberts wrote to the BMA, the Chief Medical Officer for England and his counterparts in Scotland, Wales and Northern Ireland, together with the heads of the Royal Colleges, and also the Council for Regulatory Healthcare. His purpose in writing was to alert them to the problem that had been identified in leading counsel's advice. He indicated that there would have to be a change to the fees regulations and that the GMC was considering what to do. His letter invited questions from all recipients. Shortly thereafter, he wrote to all those on the register who were 65 or over and also to those who were due to become 65 in the relatively near future. He notified them of the problem and also indicated that the GMC was considering what it should do.

[31]The GMC met in full Council on 22 May. In advance of that meeting, Mr Roberts produced a paper to assist the Council in its consideration of this item of the agenda. In the light of the discussions that had taken place within the GMC after the receipt of Ms Rose's preliminary advice, and indeed her final advice, Mr Roberts' approach was to accept that the concession gave rise to unlawful discrimination. That was essentially because nobody within the GMC had identified a legitimate aim that the exemption from the fee could be said to justify.

[32]The paper did, however, note a possible justification; namely the retention on the register of a body of medical practitioners who could be pressed into service in the event of a national emergency such as a flu pandemic. But the GMC did not see this as a point of substance. It would not provide any assistance in contacting non-practising doctors over 65, beyond that of keeping a simple list. And in any event, the Medical Act has now been amended with effect from 10 July to allow the temporary registration of doctors in an emergency.

[33]On the central issue, the paper said this:

"16. We have received leading counsel's advice that age exemption from the ARF is almost certainly unlawful, as it is contrary to the provisions of the Age Regulations. "17. This is because age exemption from the ARF is based simply on age and, therefore, discriminates against doctors below 65 who cannot benefit from the exemption. "18. Consequently, continuing with age exemption from the ARF would be lawful only if it met the test in Regulation 27 or Regulation 3. "19. Regulation 27: Although the Fees Regulations are made under statute, the Regulations are made not by a Minister of the Crown but by Council; and thus the Regulation 27 exception does not apply. "20. Regulation 3: We do not believe that age exemption from the ARF could be classed as a proportionate means of meeting an aim of the GMC. We have invited the Department of Health (England) to confirm that they do not regard the age exemption as a proportionate means of meeting a national aim, for example as a way of encouraging doctors over 65 to remain registered and, thus, facilitate contact with those who might provide assistance in the event of a flu pandemic or other national emergency. If DH(E) were to conclude that age exemption from the ARF was a proportionate means of meeting a legitimate aim, we would wish that to be reflected in an amendment to the Medical Act 1983, to place the matter beyond doubt."

[34]Mr Roberts explained in his paper that he had been in contact with the Department of Health about the exemption and possible justifications. Mr Kerr subjected the e-mail exchange that Mr Roberts had with Mr Clarke at the department to fine textual analysis. In the course of that exchange, Mr Roberts asked for an amendment to the Medical Act, in the event that there was a legitimate aim to which the exemption was a proportionate response, to put the matter beyond doubt. That reflects what I have read from his paper.

[35]Mr Kerr submits that this shows a confusion in the mind of the GMC. If there were justification that could sustain scrutiny, there would be no need for primary legislation. Analytically, that of course is correct, but Mr Roberts was asking for legislation to put the matter beyond doubt; in other words, to provide the protection contemplated by Rule 27 of the Age Regulations. That, as it seems to me, is the point made by Mr Roberts in paragraph 19 of his paper. If the department were willing to legislate, it would be because it considered that the exemption was justified under the directive. If not, it would provide confirmation that the department took the same view as the GMC; namely that the age exemption was not a proportionate way of achieving a legitimate aim.

[36]In his reply, Mr Clarke confirmed that the department did not intend to legislate. Given the nature of the exchange, unless he was being very obtuse indeed, it is reasonable to infer that the department did not consider that there was a lawful justification for the discrimination. Mr Clarke's response was on 19 May; that is three days before the meeting of the Council. Mr Roberts' view, that the exemption could not be justified, was thus not in any way qualified by anything said by the department. He told the Council on 22 May about the response he had received from the department. He provided draft amendments to the Fees Regulations. He sought agreement to the proposal that the exemption must be ended in order to comply with the Age Regulations. The mechanism of implementation would be that no new exemptions would be granted after 30 June 2008 and that existing exemptions would be withdrawn as from 31 October.

[37]The full Council approved this scheme and made the necessary adjustments to the Fees Regulations. The questions of legitimate aim and proportionality were raised in the paper and were thus before the Council. The minutes of the meeting of 22 May, which cover much else apart from this topic, do not condescend to the detail of the discussion that took place. However, the amendments to the fee Regulations were approved without dissent. The Council was attended by 34 of its members on that day, with apologies from eight others. The Council is made up of distinguished practitioners and others from outside the medical profession. Many of those on the Council are elected to ensure representation across the broad spectrum of the medical profession. As it happens, four members of the Council are also members of the Council of the BMA. It is safe to assume, in my judgment, that the members of the Council on that day were not acting as ciphers, simply nodding through the recommendations of their officials.

[38]The essence of what occurred was simply this. The GMC had been alerted to the possibility that its Fees Regulations unlawfully discriminated on grounds of age. There was no doubt that they were, on their face, discriminatory and would thus be unlawful unless they could be justified in the terms of Regulation 3 of the Age Regulations. Those Regulations implemented and reflected the directive.

[39]The GMC could think of no such justification, and neither could counsel; that is to say Ms Rose. The Department of Health had not suggested that the exemption was a proportionate means of meeting a legitimate aim. The GMC's officials were thus anxious to ensure that the Council took steps to ensure that it acted lawfully, and the Council agreed.

[40]Consultation.

[41]The question of consultation was raised in Mr Clarke's reply of 19 May to Mr Roberts' e-mail, to which I have referred. He said this:

"There is one further matter that I would want to raise with you. Can you confirm that you have considered any legitimate expectations that there may be for you to undertake some form of non-statutory consultation or, at least, for the change you are proposing not to be a surprise for those affected?"

[42]Mr Kerr draws attention to this to show that the department was alive to the possibility of the need for non-statutory consultation in the arena of legitimate expectation, something the GMC did not take up. It is right to note that there was a reference in the paper of 22 May to consultation, but it was to an historical exercise. Some years before, the GMC had been considering introducing a licence to practise, separate from simple registration. As part of the package of changes being considered, there was a proposal to end the age exemption. There was consultation on that, but consideration of those fundamental changes and the overall package had been deferred. As I understand it, it remains deferred.

[43]In paragraph 30 of his witness statement, Mr Roberts explained the view that was taken of the consultation:

"The GMC took the view that consultation about whether or not it should comply with the law was neither mandatory nor appropriate. Moreover, any consultation process would simply serve to delay compliance by the GMC with the law. Also, as set out above, by the time of Mr Clarke's e-mail I had already written to key bodies, including not only the BMA but also the Chief Medical Officers mentioned by Mr Clarke and invited them to contact me if they had any queries. I had also informed all doctors likely to be affected in the next year by the abolition of the Age Exemption that it was under review (i.e. those who were already exempt, and those who would reach the age of 65 in the next year)."

[44]It is common ground between the parties that the Medical Act does not require consultation before Fees Regulations are made. Conversely, it is recognised by the BMA that the Medical Act contain many provisions which impose a duty to consult. I mention four as illustrations. Pursuant to section 10(A)(6) and paragraph 1(A)(4) of Schedule 1, the Privy Council is required to consult the GMC before exercising some of its powers under the Act, the detail of which is immaterial.

[45]Paragraph 8 of Schedule 3B and paragraph 1(4) of Schedule 4 require the GMC to consult professional bodies in connection with rules governing procedure and evidence before the Registration Appeals Panel and the Fitness to Practise Panel.

[46]Additionally, it is not suggested by the BMA that there has been any promise to consult on this or allied matters. Nor has there been a pattern of consultation. Indeed, when the changes were made to other exemptions to which I have earlier referred, there was no consultation. Similarly, when increasing the annual fee, the GMC has never consulted those who have to pay it.

[47]Submissions.

[48]Mr Kerr submitted that the failure to consult doctors paying the annual retention fee amounts to an abuse of power and is an example of conspicuous unfairness. He does not suggest that Ms Rose's analysis of the law is wrong, or even arguably so, and readily accepts that the GMC acted rationally in accepting it. What he suggests is that even if the GMC was unable to identify a legitimate aim achieved proportionately by the exemption, if it had consulted the profession, others might have been able to do so.

[49]Additionally, he submits that the GMC could and should have considered what have been described as "halfway houses"; that is, replacing the exemption with a different scheme, perhaps based on years of service, rather than age, which might provide financial succor to many of those currently benefiting. As part of any consultation, explained Mr Kerr, the BMA would take the mood of its members before responding.

[50]Mr Kerr recognised that the BMA as a trade union would soon find itself on the horns of a dilemma, since the interests of different sections of its membership on this issue would very likely be in conflict. Put crudely, bringing some of the over 65s into the contribution pot would help keep down the fees of all those under 65. Because the BMA has not undertaken this exercise, Mr Kerr was unable to point to any strong factor that the GMC had overlooked. I have touched on the question of utilising the skills of retired doctors in the event of a national emergency, but that has been catered for in a non-discriminatory way by Section 18A of the Medical Act.

[51]Other factors mentioned in correspondence or in argument were:

[52](1) The abolition of the exemption would cost doctors over 65 either £390, if their earnings from practice exceeded £21,390 a year, or half that if not.

[53](2) That would be sufficient to put in doubt for many the utility of staying on the register.

[54](3) If some left the register on that account, that would impact on the ability of that cohort to act, for example, as honorary medical advisers to charities.

[55](4) There would be a similar impact on the ability of such doctors to teach.

[56]Mr Engleheart QC, who appeared on behalf of the GMC, explained that both these last points reflected a misunderstanding of the legislation and the purpose and effect of registration. Mr Kerr reasonably resisted the temptation of trying, either on instructions or without them, to conjure possibly lawful justifications for the exemption from the ether. He recognised that there was no special status afforded to the BMA in the consultation he proposed. All those registered would have an interest in the outcome and so all doctors should have been given an opportunity to comment.

[57]In support of his contention that there was a legal duty to consult all doctors in the circumstances I have outlined, Mr Kerr relied on a short series of propositions.

[58]First, that the exemption had been in place for 38 years. The longevity of the scheme itself suggested that those who currently enjoyed the benefit could expect to continue to do so, unless there first was consultation. That longevity also underpinned the expectations of those who did not yet enjoy the benefit, but would do so in the future. To remove it without consultation would be conspicuously unfair and an abuse of power. He described what the GMC had done as an "expropriation of a benefit".

[59]Secondly, that the scheme had operated for those 38 years on the basis that the under 65s paid a little bit more than would be necessary if the over 65s were also contributing to whatever extent, and so they had in effect paid for their later exemption. He drew an analogy with an insurance scheme which he recognised was far from exact.

[60]Thirdly, that as the under 65s get older, their expectation that they would benefit from the exemption grew stronger, so this was more unfair on those approaching that age than on those far removed from it.

[61]These propositions were all derived from the evidence I have summarised which, as I have already indicated, emanated from the GMC. The BMA adduce no other evidence from its members or officers providing factual support for these propositions.

[62]Mr Engleheart submitted that however expansively the concept of legitimate expectation were read, in the light of the authorities, the facts of this case come nowhere near establishing a legal duty to consult.

[63]Legitimate expectation.

[64]The label of legitimate expectation has been applied to a number of distinct, if overlapping, concepts. It has given rise to analytical difficulty and the boundaries have also been difficult to identify. There have been various judicial attempts over the years to provide a comprehensive statement of principles derived from authorities stretching back at least to the mid 80s.

[65]The most recent excursion into such comprehensive analysis was undertaken by Laws LJ in the Queen (Niazi) and others v the Secretary of State for the Home Department and the Queen (Bhatt Murphy) (a firm) and Ors v The Independent Assessor

[2008] EWCA Civ 755

. In his customary lucid way, Laws LJ has clarified much of the thinking on this topic.

[66]The case arose out of two related decisions taken without consultation in the field of discretionary payments made to victims of miscarriages of justice. The first was to withdraw the discretionary scheme, a decision of the Secretary of State. The second was substantially to reduce the level of legal fees paid to solicitors in connection with applications for compensation. Both decisions were challenged on the grounds that the failure to consult in advance representative groups that would be affected by the changes was unlawful because of conspicuous unfairness.

[67]Laws LJ explored the hallmarks of both procedural and substantive legitimate expectation. Procedural legitimate expectation arises in what he called "the paradigm case" where an unequivocal assurance, either by express promise or established practice, is given that consultation will precede a change in policy. That is not this case because there is simply no evidential foundation for such a legitimate expectation. Similarly, this case is not concerned with substantive legitimate expectation.

[68]Mr Kerr relies upon a subspecies of procedural legitimate expectation that does not arise from an unequivocal assurance or constant practice, but from observations of Lord Diplock in CCSU

[1985] AC 374

at page 408 and Simon Brown LJ in ex parte Baker

[1995] 1 All ER 73

at page 88.

[69]The relevant passages are discussed between paragraphs 37 and 39 of Laws LJ's judgment in Niazi:

"37. But there is first a prior question - one of classification. To explain it, I must return to the texts: Lord Diplock in CCSU and Simon Brown LJ in Ex p Baker.

(b) (i) (CCSU at 408F-G): "

'To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons) other than the decision-maker, although it may affect him too. It must affect such other person either: "'(a) ... "'(b) by depriving him of some benefit or advantage which either (i) he has in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational ground for withdrawing it on which he has been given an opportunity to comment ...' "'2. Perhaps more conventionally the concept of legitimate expectation is used to refer to the claimant's interest in some ultimate benefit which he hopes to retain (or, some would argue, attain). Here, therefore, it is the interest itself rather than the benefit that is the substance of the expectation. In other words the expectation arises not because the claimant asserts any specific right to a benefit but rather because his interest in it is one that the law holds protected by the requirements of procedural fairness - the law recognises that the interest cannot properly be withdrawn (or denied) without the claimant being given an opportunity to comment and without the authority communicating rational grounds for any adverse decision...' "38. Each of these passages refers to the same category of legitimate expectation, as Simon Brown LJ recognised in Ex p Baker at 90. But neither passage offers an objective criterion by which to decide whether the class of legitimate expectation in question should be applied to the case in hand (beyond the fact that the claimant has enjoyed the relevant benefit in the past). Neither formulation involves any prior representation, promise or practice. Simon Brown LJ recognised the want of any objective test. He said (Ex p Baker at 90): "'Thus the only touchstone of a category 2 interest emerging from Lord Diplock's speech is that the claimant has in the past been permitted to enjoy some benefit or advantage. Whether or not he can then legitimately expect procedural fairness, and if so to what extent, will depend upon the court's view of what fairness demands in all the circumstances of the case. That, frankly, is as much help as one can get from the authorities.' "39. I shall have to return to 'the court's view of what fairness demands in all the circumstances of the case' in the context of this category of legitimate expectation. But I should first state my view that it is best classified as a form of procedural legitimate expectation: it is the further class of procedural expectation to which I referred, but with no elaboration, at paragraph 32. I shall call it the secondary case of procedural legitimate expectation. It is to be noted that Lord Diplock's reference to the communication of 'some rational ground for withdrawing' [the benefit or advantage in question] gives the appearance of a procedural right: the right actually enjoyed is the right to make representations in response to such a communication. This is identical to the right afforded in the paradigm case of procedural legitimate expectation, where there has been a promise or practice by which just such an opportunity has been provided."

[70]It is precisely these passages from the speech of Lord Diplock and the judgment of Simon Brown LJ that Mr Kerr relies upon to support the argument that the legitimate expectation of consultation of the medical practitioners has been unlawfully frustrated. In respect of a secondary case of procedural expectation, Laws LJ posed a question: "What are the conditions under which a public decision-maker will be required, before effecting a change of policy, to afford potentially affected persons an opportunity to comment on the proposed change and the reasons for it where there has been no previous promise or practice of notice or consultation?" (Paragraph 40).

[71]As he observed, an answer to this question and a similar question concerning substantive legitimate expectation "might give sharper edges to the doctrine of legitimate expectation". By reference to the speech of Lord Templeman in Preston,

[1985] AC 835

and 864, and the judgment of Dyson LJ in ABCIFER

[2003] QB 1397

, at paragraph 78, he noted that this type of procedural legitimate expectation would arise only exceptionally and that a public authority would generally not be required to consult in the absence of a promise to do so.

[72]At paragraph 42, he said this:

"But the court will (subject to the overriding public interest) insist on such a requirement, and enforce such an obligation, where the decision-maker's proposed action would otherwise be so unfair as to amount to an abuse of power, by reason of the way in which it has earlier conducted itself. In the paradigm case of procedural expectations it will generally be unfair and abusive for the decision-maker to break its express promise or established practice of notice or consultation. In such a case the decision-maker's right and duty to formulate and re-formulate policy for itself and by its chosen procedures is not affronted, for it must itself have concluded that that interest is consistent with its proffered promise or practice. In other situations - the two kinds of legitimate expectation we are now considering - something no less concrete must be found. The cases demonstrate as much. What is fair or unfair is of course notoriously sensitive to factual nuance. In applying the discipline of authority, therefore, it is well to bear in mind the observation of Sir Thomas Bingham MR as he then was in Ex p Unilever at 690f, that '[t]he categories of unfairness are not closed, and precedent should act as a guide not a cage'."

[73]So it can be seen that Laws LJ was approaching the principles underlying both substantive legitimate expectation and the secondary procedural legitimate expectation in much the same way.

[74]The Unilever case, that is R v Inland Revenue ex parte Unilever

[1996] STC 681

, was perhaps the most striking example of this type of procedural legitimate expectation in action. The relevant legislation provided for a time limit within which claims for loss relief against corporation tax should be submitted. It was, however, subject to a discretion in the Revenue to accept late claims. On 30 occasions over 20 years Unilever had submitted, and the Revenue had accepted, late claims. Then, without any notice, warning or consultation, the Revenue changed its previous practice and refused to accept a claim because it was outside the statutory time limit. As the Court of Appeal noted, the previous practice had been operated to the benefit of both the taxpayer and the Revenue. The Revenue's approach, as it changed, had the effect of creating an additional tax liability of £17 million which was a pure and unfair windfall for the tax authorities.

[75]Both Sir Thomas Bingham MR and Simon Brown LJ gave reasoned judgments. At page 691g, the Master of the Rolls concluded:

"On the history here, I consider that to reject Unilever's claims in reliance on the time-limit, without clear and general advance notice, is so unfair as to amount to an abuse of power."

[76]Simon Brown LJ equated unfairness amounting to abuse of power with the concept of conspicuous unfairness. At page 697c, he described the conduct of the Revenue as "So outrageously unfair that it should not be allowed to stand."

[77]Laws LJ's conclusion on these matters is found in Niazi at paragraph 49:

"I apprehend that the secondary case of legitimate expectation will not often be established. Where there has been no assurance either of consultation (the paradigm case of procedural expectation) or as to the continuance of the policy (substantive expectation), there will generally be nothing in the case save a decision by the authority in question to effect a change in its approach to one or more of its functions. And generally, there can be no objection to that, for it involves no abuse of power. Here is Lord Woolf again in Ex p Coughlan (paragraph 66): "

'In the ordinary case there is no space for intervention on grounds of abuse of power once a rational decision directed to a proper purpose has been reached by lawful process.' "Accordingly for this secondary case of procedural expectation to run, the impact of the authority's past conduct on potentially affected persons must, again, be pressing and focussed. One would expect at least to find an individual or group who in reason have substantial grounds to expect that the substance of the relevant policy will continue to enure for their particular benefit: not necessarily for ever, but at least for a reasonable period, to provide a cushion against the change. In such a case the change cannot lawfully be made, certainly not made abruptly, unless the authority notify and consult."

[78]Finally, considering the facts of the case before him, he concluded:

"There is nothing in the facts of this case to bring it within the narrow and specific compass, best exemplified by Ex p Unilever, which is the proper territory of this class of legitimate expectation."

[79]Sedley LJ agreed with Laws LJ, but with a gloss on his analysis of substantive legitimate expectation which did not affect the result in that case, nor would it in this.

[80]The language used in ex parte Unilever and Niazi suggests at the least that unfairness of the sort that may be relied upon to found a plea based on the secondary class of procedural legitimate expectation will be very obvious and striking. There is nothing, in my judgment, in the evidence or arguments before the court to bring it close to such a state of affairs. Indeed, the background and context indicate to my mind that the process followed by the GMC cannot properly be considered unfair at all. Factors which are important in my coming to that conclusion include these.

[81](a). This is not a case in which a public authority has a wide discretion conferred by statute or the prerogative to formulate and implement policy. Here, the GMC concluded reasonably that the fee exemption was unlawful. Any consultation would not have been on the usual basis of considering competing lawful outcomes. The only useful input that might have been available would, as Mr Kerr recognised, have involved legal argument founded on the identification of a hitherto unrecognised legitimate aim, proportionately served by the exemption. That is to be contrasted with the earlier consultation referred to by Mr Roberts in his paper for the Council, which had been part of far-reaching proposals for change where no question of the age exemption being intrinsically unlawful arose. (b). The GMC reasonably felt compelled to act with some speed. As a responsible public body, they wished swiftly to cure any illegality in their operations. That is responsible as a freestanding aim, quite apart from the desire to avoid litigation. (c). They had never consulted before when changing fee exemptions or raising the fees, and they were aware that the General Dental Council had not done so either when it abolished its age exemption, although the circumstances were different. (d). By its conduct, the GMC had done nothing to encourage the belief that all registered medical practitioners should be consulted before the age exemption was abolished. To use the language of Laws LJ, there was nothing in the impact of the GMC's past conduct on registered medical practitioners of any age which was pressing and focused, so that they could expect the policy to continue. (e). There can be no question of any expectation that a policy will be continued once the GMC has reasonably concluded that it was unlawful. Indeed, it might be thought that those paying the retention fee would be taken to assume that the GMC would strive to act lawfully and, what is more, act reasonably upon the advice of leading counsel. (f). The proposed consultation of 231,000 registered medical practitioners would have been cumbersome and time consuming in the face of a firm conclusion that the current practice was illegal. (g). The BMA and all other relevant organisations were notified of the difficulty and the need for action by a letter dated 8 May 2008. It is true that the letter did not purport to amount to consultation, but it did give an opportunity, if those bodies wished, for them to respond in the full knowledge of the legal impediment that had been identified. (h). The limit of the decision has been to abolish the age exemption. The GMC has neither rejected nor fully considered whether alternative restructuring of the retention fee regime is appropriate to provide some relief for those registered for many years, calculated for example by an equivalent to length of service in an employment context. The possibility was averted to by Mr Roberts, as I have recorded. Whether such an arrangement would be appropriate in policy terms, even if it were lawful, is not for me to decide, but that door has not been closed. (i). The impact of this change is not, in truth, profound for those over 65. At most, it will amount to £390 per annum for those earning more than £21,390, and in such cases that sum will be tax deductible. For those earning less, the fee will be halved, but still attract tax relief. Many of those who currently benefit from the exemption are likely to be fully retired, with the consequence that there is no professional need to remain on the register at all. (j). The Medical Act provides for consultation in the specified circumstances I have identified. That, of course, does not exclude the possibility that fairness could require consultation in connection with activities governed by that Act, notwithstanding that Parliament, having applied its collective mind to the issue generally, did not specify consultation. But the fact of those other provisions does support the proposition that in general terms, Parliament did not consider consultation a necessary precursor to changes to the structure of fees.

[91]For all these reasons, the arguments advanced on behalf of the BMA fail.

[92]There are three further matters to be dealt with, albeit shortly. First, the application for disclosure. Second, the question of delay.

[93]On the basis of the principles articulated in the House of Lords in Tweed v Parades Commission for Northern Ireland

[2007] 1 AC 650

, Mr Kerr submits that the GMC should be required to disclose further material. That includes a preliminary written advice from leading counsel, instructions given to her and notes and the like evidencing discussions within the GMC concerning this topic. His target is to explore the depth of discussion within the GMC of the question of justification which Mr Roberts dealt with in the evidence which I have summarised.

[94]Given the nature of the challenge mounted by the BMA and the detailed material put before the court by the GMC in particular, I am quite unpersuaded that the GMC should properly have disclosed more background material.

[95]Secondly, Mr Engleheart submitted that the BMA delayed in bringing these proceedings. The letter before action was written on 8 July 2008 and the proceedings were issued on 14 August, at the outer extremity of the three month limit. The transitional provisions relating to the fee exemption began to operate from 1 June. There has been, he submitted, no proper explanation of why so long was taken, beyond a witness statement explaining the internal processes of the BMA in dealing with the issue. Mr Kerr submits that the claim was brought promptly, but seeks an enlargement of time in the event that he is wrong.

[96]Given the urgency with which this claim has been pressed since it was issued, it is surprising, to say the least, that the BMA took so long to start it. Strictly speaking, I do not consider that the claim was brought promptly, but given the nature of the issues, I am willing to enlarge time. Had I concluded that the claim had merit, I would not have shut it out because it was brought late.

[97]Thirdly, I should mention one further factor. Mr Engleheart pressed a further submission to the effect that even had I concluded that registered medical practitioners were entitled to be consulted, the court should have refused relief because it would have the effect of requiring the GMC to maintain an unlawful practice whilst the consultation was carried out. There is, in my judgment, much force in that argument, but it was not fully explored before me. And in light of my earlier conclusion, it is unnecessary for me to deal with it.

[98]In the event, the order I make is as follows. I grant permission to apply for judicial review. I discharge the interim relief granted by His Honour Judge Waksman QC, but dismiss the application.

[99]MR ENGLEHEART: My Lord, in the light of your Lordship's judgment, I would also ask for the costs, the GMC's costs. My Lord, it is not a case where either party has served a schedule and I would simply ask your Lordship to order costs to be assessed, if not agreed.

MR JUSTICE BURNETT: Yes.

[101]MR KERR: That is not resisted, my Lord.

[102]MR JUSTICE BURNETT: Well, I will make an order that the claimant pay the defendant's costs, to be assessed, if not agreed. Are there any other consequential matters?

[103]MR KERR: I am instructed to make an application for permission to appeal. Very briefly, my Lord, so far as the law is concerned, to use Laws LJ's words, an appeal in this case might give sharper edges to the doctrine. So far as the facts are concerned, my submission is the hopeful one that your Lordship's interpretation of the facts would be -- that there is a reasonable prospect that your Lordship's interpretation of the facts, particularly the matters leading up to 22 May and the e-mail exchange and so forth, could be seen in a very different light by the Court of Appeal.

[104]MR ENGLEHEART: My Lord, as my skeleton argument says, this is a plain case. And it is simply, in my submission, blindingly obvious that it comes nowhere near the kind of Unilever case. My Lord, I leave it at that.

[105]MR JUSTICE BURNETT: I shall refuse permission to appeal. It is my view that this case has involved what has turned out to be a perfectly conventional application of the principles of legitimate expectation, whatever the uncertain boundaries of the doctrine, and this case is not close to them. So far as Mr Kerr's argument on the facts is concerned, that is not independently a matter upon which I should consider granting permission to appeal. It is a matter which, Mr Kerr, you will need to take up with the Court of Appeal if your clients wish you to do so.

[106]MR KERR: We are very grateful for the speed with which your Lordship has given judgment.

[107]MR JUSTICE BURNETT: Yes. I was made conscious that it was needed urgently. It is, as a result, rather rough around the edges, but I hope it is sufficiently clear for all your purposes.

[108]MR ENGLEHEART: Might I just mention one thing, your Lordship. I only referred your Lordship to some of the areas where concentration is required. There are actually others in the Medical Act.

MR JUSTICE BURNETT: Right.

[110]MR ENGLEHEART: So it would not quite be right to say that there were only four instances.

MR JUSTICE BURNETT: When I get the transcript, Mr Engleheart, I will try to remember to insert --

[112]MR ENGLEHEART: Suitable wording to go with that.

MR JUSTICE BURNETT: Suitable wording.

[114]MR ENGLEHEART: I am sorry, my Lord, I should have explained, but --

MR JUSTICE BURNETT: No, no, but these are examples.

[116]MR ENGLEHEART: Exactly.

[117]MR JUSTICE BURNETT: Good. Thank you all very much.