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Retention Of Discretion And Abuse I Notes

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Administrative Law: Retention of Discretion, Abuse of Discretionary Power I 1

Scene Setting

Once it is established that the decision-maker has legal power (jurisdiction) and he or she exercises that power fairly, the question arises whether the decision-maker exercised their power reasonably (in the broad sense). And that is what we will be concerned with in these lectures on the control of discretionary power.

1.1 Fundamental point: all power has legal limits

All power has legal limits. This is a requirement of the rule of law; and it is the task of the courts to police those limits. But Parliament constantly confers upon public authorities powers which on their face might seem absolute and arbitrary. The courts have refused to countenance arbitrary power unfettered discretion. The courts have woven a network of restrictive principles that require statutory powers to: a) be exercised reasonably and in good faith; b) for proper purposes only; and c) in accordance with the spirit as well as the letter of the empowering Act.

1.2 The Rule of Reason (see W&F 393ff)

Most of the principles deployed by the courts to control the exercise of discretion are ancient. They can be traced at least to Rooke's Case in the 16th century. The Commissioners of Sewers had levied charges for repairing a riverbank, but they had thrown the whole charge on one adjacent owner instead of apportioning it among all the owners benefited. In law they had power to levy charges in their discretion. But this charge was disallowed. Coke CJ said: ". . and notwithstanding the words of the commission give authority to the commissioners to do according to their discretions, yet their proceedings ought to be limited and bound with the rule of reason and law. For discretion is a science or understanding to discern between falsity and truth, between wrong and right, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their wills and private affections...." Coke LJ: discretion has legal limits. All power is circumscribed by the rule of law. One of the ways in which that idea exemplifies itself is in the idea of the retention of discretion. Elsewhere he distinguishes between "the golden and straight metwand of the law" and the "crooked cord of private opinion that the vulgar call discretion" (4 Inst 41; Co. Litt 227b).


Retention of Discretion

Pursuant to this rule of reason discretionary power must be retained in the hands of those to which it was entrusted by Parliament. Thus the decision-maker must not unlawfully delegate the power; or surrender or abdicate the power to another; or act under another's dictation; or adopt an over rigid policy; or restrict the discretion by contract (or by estoppel). A key principle in Administrative Law is that of retention of discretion - Parliament chooses who should exercise a power and make decisions, and only this person should have that discretion. Areas where this principle of retention may come into play include prohibition, delegation, fettering, over-rigid policy etc. The principle does not deal with the substance of the decision, but with ensuring that the correct person is making it. Elliott perceives that the rules of administrative law that have developed in this context serve two distinct but related objectives. a) They require that decision-making is carried out by the specific agency tow which that discretion was, confided (so the transfer or delegation of discretion is prohibited); and b) ensure that the agency has at its disposal the full discretion which was granted to it (thereby precluding behaviour, such as the adoption of rigid policies or the entry into contracts, which limits that discretion).

2.1 Restriction of discretion by the adoption of an over-rigid policy

An authority can fail to give its mind to a case, and thus fail to exercise its discretion lawfully, by blindly following a policy laid down in advance. The raison d'etre of discretionary power is that it permits decision makers to respond appropriately to the demands of particular situations. It is a fundamental rule that discretion must be brought to bear on every case: each one must be considered on its own merits and decided as the public interest requires at the time. At the same time like cases should be treated alike; and it is right for administrative decision-makers should develop policies in order that their powers be exercised consistently. A tension therefore arises: to what extent may administrators legitimately structure their decision-making in this way, given that the very essence of discretionary power is the individualisation of decision making to circumstances?
Here are some contrasting views: R v Port of London Authority ex parte Kynoch [1919]
KB 176 at 184: "There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the tribunal may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction to be drawn between these two classes." Bankes LJ This analysis is useful to the extent that it draws a distinction between a policy which is flexible, and a rule which is applied so rigidly as to remove any genuine discretion. However, to the extent that it implies two wholly distinct categories of case, Bankes LJ's analysis is too simplistic. Between the two extremes, it is self evident that a there

will exist a spectrum of policies of differing degrees of rigidity. It is the court's function to determine - taking account of contextual factors such as the nature of the decision making function in question - whether a given policy is sufficiently flexible to be legitimate. British Oxygen Co Ltd v. Minister of Technology [1971] AC 610 The minister, having been given a discretionary power to provide business with grants to assist the purchase of industrial machinery and having resolved to adopt a policy to make no grants in respect of machinery costing less than PS25, refused assistance to the claimant company, who had spent some PS4 million on numerous items of equipment costing PS20 each. Held, the minister had acted lawfully - it was inevitable that large departments called upon to decide cases would 'evolve a policy so precise that it could well be called a rule'. "But the circumstances in which discretions are exercised vary enormously and that passage cannot be applied literally in every case. The general rule is that anyone who has to exercise a statutory discretion must not "shut his ears to an application" (Bankes LJ [see [1919] 1 KB 176 at 183]). I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and then they will almost certainly have evolved a policy so precise that it could well be called a rule . There can be no objection to that, provided the authority is always willing to listen to anyone with something new to say - of course I do not mean to say that there need be an oral hearing. In the present case the respondent's officers have carefully considered all that the appellants have had to say and I have no doubt that they will continue to do so." Lord Reid Bankes LJ suggests that a policy admits of an exception, but a rule does not. Nevertheless Lord Reid in British Oxygen says that 'I do not think there is any great difference between a policy and a rule. (p3) One can see how a decision making process wanting to decide fairly would have a measure of consistency/precedent, so that like cases are decided alike. But it does mean that the rule begins to be applied with more rigidity. The British Oxygen approach demonstrates a rather more indulgent, less restrictive attitude towards policy-oriented decision-making. It ascribes a generous role to policy, allowing it to become the norm on which decision-making is founded, provided of course that the decision maker is willing to make exceptions in appropriately unusual cases. In seeking to determine whether this residual flexibility is present, and thus capable of legitimising the decision maker's policy-based approach, the courts are unsurprisingly more interested in substance rather than form. Consequently, even where the decision maker claims to depart from policy in particular circumstances, the court may require evidence that this is actually happening (and in the absence of such evidence may conclude that the policy is being applied over-rigidly). Can these dicta be reconciled? Context is, as so often, important. More rigid policies will be justified were the decision-making process requires consistency. Where there are many essentially similar cases to be cases must be treated alike. Ultimately it is a question of the close construction of the relevant statutes. Elliott suggests that there may be situations in which it is lawful to operate a policy which does not yield even in the face of exceptional circumstances. For instance, in:

R (Nicholls) v Security Industry Authority [2006] EWHC 1792 Defendant statutory body was empowered to grant licences to door supervisors. They adopted a policy that where a prospective bouncer had a criminal conviction of a certain type, he wouldn't be given a license - he would be 'automatically disbarred'. It was not an unlawful fetter because Parliament's purpose in enacting the Private Security Industry Act 2001 was to drive criminality out of door supervision and that purpose would be frustrated if the rule was not upheld. "It seems to me that there are certain exceptional statutory contexts where a policy may lawfully exclude exceptions to the rule because to allow exceptions would substantially undermine an important legislative aim which underpins the grant of discretionary power to the authority". There are two factors that lead the judge to this conclusion: a) Parliament had deliberately conferred a rule-making power on the authority by requiring it to formulate and publish the 'criteria which it proposes to apply' when deciding whether to grant a licence. b) The Act was intended to see that 'criminality would be driven out of door supervision'. Taken together, this meant that ruling that the automatic barring criminals convicted of serious offences from door supervision to be unlawful would 'make a mockery of one of the aims of the 2001 Act. W&F say: "We have already seen that the context in which a policy is applied may affect its rigidity. Where, for instance, the applications are numerous and very similar the policy may almost harden into a rule. On the other hand, where the applications are few in number and the circumstances are very different, greater flexibility will be required." Human Rights Act and policy The engagement of fundamental rights may require policy to be more flexibly applied. Such a development is inherent in the idea that the courts will often by, applying a proportionality test, be assessing whether a limitation on a right is justified. R. (P & Q) v. Home Secretary [2001] WLR 2002 (CA). It is undesirable for babies to grow up in prison, but also not great for them to be separated from their mothers in the early stages after birth. There was therefore a policy to remove children at age 18 months. This case arose where a mother was due to leave prison when the child was 21 months. She therefore challenged the policy on Human Rights grounds - they should not be split up for three months on the grounds of Art. 8. The court said that though it was a reasonable, sensible and lawful policy; it should be applied more flexibly where HRs are at stake. In each case he interference in the child's family life would have to be proportionate to the legitimate aims of the policy. The decision [not] to follow the policy will need to be properly made - in doing so the decision maker will need to show that any interference with human rights was proportionate to legitimate aims justifying their restriction. Common law powers and over-rigid policy Questions about the fettering of discretion normally arise in relation to statutory powers
- do the same principles apply in relation to other powers? See: Secretary of State for Defence v Elias [2006] EWCA Civ 1293 The claimant wished to be considered under and ex gratia (for free) compensation scheme for British Civilians interned in Japan during WWII. The government had not used any statutory powers in setting up the scheme. C argued that despite falling outside of the formal requirements for the scheme, she should nevertheless be considered for compensation because the

level of suffering she had endured constituted exceptional circumstances. The agency which operated the scheme was working with criteria laid down by a minister, and regarded itself as wholly bound by the minister's rule. Held, this was not an unlawful fettering of discretion, as the non-fettering principle does not apply to the exercise of common law powers. Mummery LJ: "The analogy with statutory discretion, as in British Oxygen, is a false one. It is lawful to formulate a policy for the exercise of a discretionary power conferred by statute, but the person who falls within the statute cannot be completely debarred, as he continues to have a statutory right to be considered by the person entrusted with the discretion. No such consideration arises in the case of an ordinary common law power, as it is within the power of the decision maker to decide on the extent to which the power is to be exercised in, for example, in setting up a scheme. He can decide on broad and clear criteria and either that there are no exceptions to the criteria in the scheme or, if there are exceptions in the scheme, what they should be. If there are no exceptions the decision maker is under no duty to make payments outside the parameters of the scheme. ....The Secretary of State has not unlawfully fettered an existing relevant ordinary common law power (or prerogative power) nor has he acted arbitrarily nor under a mistake as to the nature and scope of his powers by rejecting or refusing to consider or reconsider Mrs Elias' application as exceptional on the basis of the circumstances of her internment or of the appalling consequences of it for her or of her very strong close links with the UK. " Elias J explained the rationale here at first instance - saying that the Minister here was not setting out guidance on how a discretionary power to award compensation should be exercised, but was himself defining the scheme, in a manner which left no room for the exercise of discretion. This doesn't mean though that the gvt. has an entirely free hand in such circumstances - if the gvt. forms its policy or rules unlawfully or otherwise arbitrarily, JR will lie on that ground. Indeed that was what happened on the facts - there was no fettering of discretion, but the court held that the eligibility criteria applying to the compensation scheme were radically discriminatory. Discretion and Policy: the underlying issues The above demonstrates the different positions that the courts have adopted to the extent to which discretion may be legitimately overlaid with policy. To an extent much of these differences can be explained on the basis of context in individual cases - though perhaps the decisions betray an 'underlying disagreement as to the relative merits of, on the one hand, a flexible, highly individualised model of decision making, and on the other hand, a more structured, policy-based approach' (Elliott). Hilson, "Judicial Review, Policies and the Fettering of Discretion" [2002]Advantages of rule based decision making: o Promotes fairness and consistency between applicants - like cases are treated alike. o Promotes efficiency of administration - decision makers will likely be able to dispose of cases more quickly if they are following a rule. o Having a rule rather than discretion may be the only way to achieve officially determined aims (e.g. in Nicholls). Allowing discretionary exceptions would compromise the aim. o If rules are made open:
? Individuals can avoid making fruitless applications.
? They will be open to public scrutiny.

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