Category: Competition law

ESSAY “A decision so unreasonable that no reasonable authority could have come to it”

15th January 2023

This is my essay this week at Substack.

The Wednesbury case of 1948 provides one of the most famous and influential judgments in English legal history.

Because of the case, the phrase “Wednesbury unreasonableness” has become well-known legal shorthand for decisions and rules made by public bodies that are so unreasonable that no reasonable public body could have made them.

Nearly two-and-a-half thousand cases on the BAILII public database use the phrase “Wednesbury unreasonable”.

Indeed, the one thing that many people outside the West Midlands know about Wednesbury is that it associated with this extreme legal standard.

But in the judgment, the town’s corporation was found not to be acting unreasonably – at least in the legal sense.

And the case was not even decided on the basis of reasonableness, but on the basis of normal statutory construction.

So how did the little town of Wednesbury get such legal infamy?

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Law and policy on a day of political chaos

14th October 2022

Well.

The word “chaos” – like “crisis” – can be overused in politics.

But on some days the word is apt.

A Chancellor of the Exchequer flew back after cutting short his meetings with the IMF in Washington only to be summarily sacked, and the government performed yet another U-turn on its “growth” mini-budget with what was a mini-press conference.

So much for policy instability – but it is the politics that has gone beyond mere instability into chaos.

The authority of the current Prime Minister within the governing party has simply collapsed.

They are simply not turning up any more:

The lack of authority is related to humiliation in the markets:

Perhaps this is the reason “Brexit” was named after “Grexit”.

These are not normal times, of course, but it is hard to see how the current Prime Minister can survive much longer in office – and even if she does, her authority is extinguished.

And when the Prime Minister’s power is low – let alone non-existent – then intense political instability will result until and unless another Prime Minister with authority can be put in place.

The centre cannot hold.

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Stepping back, we must remember that the office of Prime Minister has little formal power.

The name of the office barely features in the statute book – and for a good part of its history, the office had no statutory recognition at all.

The power of the office rests on two bases.

The first is the power that derives from the Royal Prerogative and other means of non-legislative power.

The Prime Minister can, in practice, hire and fire ministers, (again) call general elections, confer honours, set the policy agenda and chair the cabinet and cabinet committees.

But this executive power rests on the confidence of the Prime Minister’s politcal allies.

And once that respect is gone, it is gone.

The second power is that which comes from effective control of the legislature, especially in respect of matters on which there is a general election mandate.

Command of the House of Commons means control of the Finance Bills, and thereby mastery of revenue and taxation; and a general election mandate for a policy means that the House of Lords cannot needlessly delay or block the relevant legislation.

A Prime Minister with a substantial majority won at a general election has the greatest prize that the constitution of the United Kingdom can bestow.

And on paper, the current prime Minister has a parliamentary majority of about seventy.

But, as this blog recently averred, we now have, in political reality, a hung parliament.

The Prime Minister cannot even be confident that she could get a Finance Bill through the House of Commons unscathed, let alone any other contentious legislation.

And so, this Prime Minister has no authority in government and no control of Parliament.

It is only because the last few years have seen many other politically odd things that one can think that the current Prime Minister can survive another week.

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The striking thing about this political predicament is that it is entirely self-inflicted.

There was no objective reason – no requirement – for that mini-budget before the conference season.

And there was no good reason for the government to “press on” when it became obvious it had lost the confidence of the markets.

The reason they did so is not ideology – for as this blog contended not long ago, many successful politicians have been guided by ideology.

The problem with current Prime Minister is not that she has an ideology but that she seems to have nothing else.

One suspects that even now she has no sense of what actually she has got wrong: about why reality is not according to her political vision.

And so we have politicians who idolise “free markets” being destroyed one-by-one by the market.

It is quite a spectacle.

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We now get to see how our constitutional arrangements deal with yet another Prime Minister being forced from office between general elections.

It is not, of course, unusual for a Prime Minister to either take office or leave office between general elections.

As this blog has said many times, every Prime Minister since 1974 has either taken office or left office between general elections.

The unusual thing is now it is happening frequently, and we are now on our fourth Prime Minister since 2016.

The cause of this political instability is not that the governing party cannot obtain a majority – it has had a working majority between 2015-2017 and from 2019 onwards.

There is a deeper problem in the politics of the United Kingdom which means that even a governing party with nominal majorities is being relentlessly wrecked.

Brace, brace.

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The Good Law Project has had another bad day in court – but this decision raises serious questions about enforcing the “public” element of “public procurement”

10th October 2022

The Good Law Project (GLP) has had yet another bad day in court.

Many are uncritical fans of the the GLP – I am not, but neither am I a committed opponent of it either.

But there is something in the recent defeat which I think should prompt wider discussion.

For not only did the GLP lose the case on the substance, it also lost outright on the question of “standing” – that is whether it was in the legal position to bring the case in the first place.

In essence: the GLP was not an “economic operator” adversely affected by the procurement decisions in question, and so it was not able to bring an application for judicial review.

If you read the court’s reasoning on this – from paragraph 498 onwards – you can see the judge’s points.

But.

The law of public procurement is distinct from the law relating to procurement generally because public authorities have to comply with certain public law principles when making decisions – principles with which a private entity making procurement decisions do not need to comply.

This is because those principles – such as transparency, equal treatment and so on – are for the public benefit, and not just the interests of the (potential) bidders.

And if these principles are to have teeth – that is, if they are to make a difference – then they need to be enforceable.

Else they are polite fictions.

An adversely affected competitor may perhaps have a private commercial interest in challenging a botched public procurement decision.

But that will be on private, selfish grounds – and not out of some sense of altruism.

So how are the unselfish public law principles to be enforced?

Given these principles are there to benefit the public generally, should it only be left to when the breach of principle overlaps with the private interests of a disappointed competitor?

One answer is to give bodies such as GLP standing to bring claims.

But the import of this judgment is that such a wide view is not valid.

And perhaps there are questions to be asked about self-appointed interest groups bring such strategic and tactical litigation.

But if not groups such as GLP, then who?

In the European Union there is an easy answer: the European Commission can bring proceedings for breaches of European Union procurement law.

But there is no such body in domestic law: there is not really a public procurement equivalent to the Office of Fair Trading.

Perhaps there should be.

But, with this decision on standing, it is not obvious what the “public” means in “public procurement”.

Yes, the GLP has many critics – and some of those criticisms are valid – but there is also something not quite right about a system of “public procurement” where the public law principles of transparency, equal treatment, and so on, can only be enforced if they happen to coincide with the private interests of a competing economic operator willing to assume litigation risk against a major customer.

(And few – if any – regular government suppliers want to litigate against their main customers, as it leaves a poor impression for the next tender.)

If the courts are going to take this strict view of standing, then the “public” element now needs to be built into the process some other way.

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The problem with ‘constitutional litigation’ in the United Kingdom

30th June 2021

There has been another ‘constitutional case’ arising out of Brexit – this time from Northern Ireland.

The full judgment is here – and in summary the court holds that the Northern Irish protocol is lawful.

In doing so the court has, among other things, held that even if the protocol was in conflict with the Act of Union, the protocol would prevail.

This required the court to compare and contrast two ‘constitutional’ statutes – the Act of Union and the Brexit withdrawal legislation.

Other ‘constitutional’ cases, such as the two Miller cases, have required the courts to balance examples of the prime ministers discretion (Article 50 notification and prorogation) with the doctrine of parliamentary supremacy.

And indeed every ‘constitutional’ case in the United Kingdom requires the courts to balance different elements of the constitution.

But what no ‘constitutional’ case in the United Kingdom does is to compare and contrast a thing against a codified constitution.

In this way it could be contended that the United Kingdom does not have true constitutional litigation – at least in the way others in the world would understand the term,

A case may have constitutional themes, and engage the elements of the state, but for the court it is just an exercise in constructing powers and rights, and in interpreting legal texts, just as with any other case.

A case may thereby be constitutionally important without being what lawyers in other jurisdictions would regard a ‘constitutional’ case.

And that is why constitutionalism in the United Kingdom is – or should be – about taking checks and balances seriously.

Because ultimately that is the essence of our constitutional arrangements.

Checks and balances are all we have got.

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Five glaring issues about the announcement of the ‘new national flagship’ prestige procurement

2nd June 2021

You may think that after that botched ferry contract that the government would steer clear from further Brext-related maritime procurements.

Then the chair of the public accounts committee said:

‘The Department for Transport waited until September 2018 to start thinking about the risks to freight transport across these important routes and entered into a £13.8m contract with Seaborne Freight despite it being a new operation, owning no ferries, and not having binding contracts to use the specified ports.

‘We will be pressing the Department for answers on how it awarded its three new ferry contracts, what it is doing to manage risks and exactly what it intends to do now it has axed the contract with Seaborne.’

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You would be wrong, for the government has now announced a new procurement exercise, the cost of which is reported to be currently set at £200 million – that is about fifteen times more expensive than those non-existent ferries.

It is a curiously worded announcement – and should be read carefully in full.

Here are five observations about what the announcement says – and does not say – about this prestige project – from my perspective as a former central government public procurement lawyer.

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There is no mention of the royalty in the announcement.

Given previous attempts at such a flagship have said that it would be a new ‘royal yacht’, this must be a deliberate omission.

One would not accidentally fail to mention that the new ship was to be a royal yacht and have royal blessing if such things were true.

Indeed, the glaring omission in the announcement indicates that the announcement is a negotiated document, where the wording has been subject to intense consideration and internal discussions and approvals.

And so, although the Crown is prevalent in the polity of the United Kingdom – from underpinning the executive, the legislature and the judiciary, royal charter bodies, the maintenance of the queen’s peace and the armed services – there appears to be one thing the royalty does not want to be connected with, and that is this ship.

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The second omission is that the announcement does not say – expressly – which government department will be responsible for procuring (and/or commissioning) and – as importantly – maintaining the ship.

The announcement hints that it may be the Ministry of Defence – and there is mention that ‘the ship will be crewed by the Royal Navy’.

And given that the MoD is the one government department with the experience and resources to procure and maintain such a ship then this would be its natural administrative berth.

But the announcement does not say – expressly – that it will be under the MoD, and the purpose of the vessel does not appear to be a military one.

And there is no particular reason why the MoD – with its own budget constraints – would want to be given the costs of procuring and maintaining a ship with no obvious military purpose or value.

If – and it is an ‘if’ – the ship is to be procured and maintained by another government department, but with an agreement with the MoD for the use of the Royal Navy for crewing the ship, then we have the prospect of Whitehall (ahem) surf-wars over which department will be responsible in the event of any problems.

And prestige procurement projects do tend to have problems.

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A third omission from the announcement is about which suppliers will be responsible for the whole-life maintenance of the ship.

The announcement states that a ‘tendering process for the design and construction of the ship will launch shortly’ – but there is no mention of any similar tender exercise for the upkeep and repairs to the ship over its expected thirty-year service.

Given that this ship is (intended to be) a bespoke construction, the question of ensuring that there are sufficient arrangements for its ongoing maintenance is just as important as the initial design and construction.

A plausible scenario is that a bespoke ship is designed and constructed but its service life is severely limited as no thought had been put into what happens next with such a bespoke construction.

Another plausible scenario is that the costs of maintenance and repair over thirty years come to be far higher than the costs of the initial design and construction.

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A fourth omission is any evidence that the practicalities of this procurement exercise have been thought-through.

For instance, there is no explanation as to why it would not be more cost-effective to refit or to purchase an existing off-the-wharf (ahem) ship and to convert that ship for the envisaged purpose.

Indeed, there is no mention of any business case at all for this specially designed and constructed flagship.

There is also no mention of the role, if any, of private finance – and if there is to be a private sector element, who will bear the risk of any commercial problems.

And this, of all projects, will be too big a project to sink.

There is also no mention of what would happen if (which is conceivable) it would be cost-effective for the ship to be designed by a United Kingdom company but (which is also conceivable) it would not be cost-effective for that ship to be constructed in the United Kingdom.

Could we have a repeat of the (for some) embarrassing ‘blue passports’ situation – where a tender for another prestige Brexit project was awarded to a foreign company?

Although the announcement waxes lyrically about the procurement in that the ‘intention is to build the ship in the UK … help drive a renaissance in the UK’s shipbuilding industry and showcase the best of British engineering around the world’ the government does not know – and cannot know – at this stage whether any value for money tender would result in the ship being constructed in the United Kingdom.

(And as this would seem to be a civil rather than a defence procurement, there are also potential issues about excluding external suppliers from this high-value tender exercise.)

The envisaged timings also seem rather ambitious.

Although carefully worded, this announcement is currently more of a press release than any serious public procurement proposal.

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Finally: £200 million pounds is, for this purpose, not that much – even if whole-life costs are excluded.

Indeed, one could imagine a considerable amount of such a budget being taken up by the to-and-fro of getting instructions and approvals for the design of this bespoke vessel.

Imagine: ‘the prime minister’s office thinks the wallpaper for the main conference room looks too cheap’ and so on.

And the recently reported ‘super-yacht’ of Amazon founder Jeff Bezos is estimated to be costing $500 million – which in sterling would be considerably more than the reported £200 million.

This new flagship may end up being the smallest ship in a harbour, with dot-com billionaires, oil-wealthy rulers and assorted oligarchs waving down at it from their super-duper yachts.

It may well be that to really impress the international business community, we are going to need a bigger boat.

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Prestige public procurement projects often fail – because they are commenced for non-commercial purposes and without thinking foreseeable risks through, and when those foreseeable problems do arise, too much political capital has been invested for the project to then be seen to fail.

The better way, of course, for the United Kingdom to ‘showcase’ here its post-Brexit seriousness about trade and business would be to have a sensible and realistic procurement exercise – including showing that the government is unafraid to pull a project if it does not make commercial sense.

A project that instead ‘showcases’ the commercial ineptitude of the United Kingdom will not help but will hinder our post-Brexit trading future.

But this sort of constructive criticism will be dismissed as doomstering and gloomstering and that voters do not want such negativity.

So those of us who want a more sensible and realistic approach from the United Kingdom to its post-Brexit future are going to need a bigger vote.

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Why ‘how to regulate’ guides are invariably nice and colourful but impractical

25th May 2021

It would be unfair to name the particular public body responsible but a new guide to regulation has just been published.

The guide is lovely to look at.

Pages and pages of colourful graphics, with boxes and arrows.

A well-meaning sequence of platitudinous or vague statements are made which together are to be taken as a guide to good regulation.

The guide is pretty and clever and earnest.

And the guide seems completely useless.

One suspects no better regulation will be made because of it, nor any better regulatory decision.

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The problem is not that, on its own terms, it is wrong.

On its own terms, the guide is quite wonderful.

Like a self-contained and lovingly illustrated code in some invented language like Dwarvish or Klingon or Dothraki.

The obscure illuminated manuscripts of our public policy age.

But the guide – and many guides like it – may not correspond to reality.

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The essence of regulation is practical, not theoretical.

The basic question is: what behaviour or outcome would happen (or not happen) but for the regulatory measure?

How will things actually be different (or the same) because of the intervention (or lack of intervention)?

And will those things really be more desirable than otherwise would be the case?

If the regulatory measure – either a rule or a decision – does not in practice affect behaviours or outcomes as desired, then it may be many things but it fails as a regulatory measure.

So: the best guide to regulation is work backwards from what is happening (or otherwise would happen) and see how that behaviour or outcome can be made to be different (or forced to stay the same) in a way desired.

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The problem with flowchart-based – and also with checklist-based – regulation is that it makes the regulator feel that something is being done.

Like the old joke about the driver who always looks in the rear-view mirror before pulling out – it does not matter what is coming, as long as they have looked in the rear-view mirror they can proceed to pull out.

In so many fields of human activity – from drug-taking to sex work to public health rules for coronavirus and electronic surveillance and public procurement (just to take a few public policy bug bears) – there is a belief that there must be regulations, as something must be done.

The problem with colourful guides on ‘how to regulate’ the process takes priority over practical effect and implementation.

There should perhaps be a new regulator to prevent flowchart-based regulation.

Perhaps it can be called OffChart.

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The European Super League and law and policy

20th April 2021

The proposal of a supposed European Super League is daft and dreadful.

Only the most partisan supporters of the clubs involved and those who will be making money out of the proposal are able to make a positive case for the idea.

Many supporters of the clubs involved, as well as the other football supporters, just see it as a cynical attempt to to exploit and develop cash revenues at the expense of the wider interests of the sport.

But.

An idea being daft and dreadful does not make it also illegal.

The law is not magic and there is no wand for any politician to say ‘I prohibit you thus’.

In particular, what is called ‘competition law’ – which prevents abuse by monopolies and the forming of cartels – is not likely to be of any use in preventing the initiative.

Indeed, competition law may help more than hinder the establishment of a rival international international football league.

Only a handful of clubs are involved, and there is no inherent reason why UEFA should have a monopoly on European club competition.

The fact that it is an artificial pop-up international league, where many of the participating clubs have not even won a European club competition before, is neither here nor there.

Nor is the fact that many clubs (such as my own, Aston Villa) that have won such competitions are excluded relevant (and I hope my view would be the same even if Aston Villa had been part of this misconceived project).

It is a new league that will be in competition to the existing arrangements, and the starting point of the relevant law is that competition is a good thing – rather than monopolies.

The European Super League may well rob the clubs, the players and the supporters involved of something valuable – genuine European football – and replace it with an artificial contest with regular matches against Tottenham Hotspur.

But that does not create a legal remedy.

If anything, competition law may undermine the attempts of the status quo to quash the innovation and provide a defence to threatened retaliatory or punitive measures.

If the proposal is to be defeated – it should be by means of politics and commercial realities, not litigation.

Perhaps this exercise in misplaced exceptionalism and a false sense of the international importance of those supporting the measure will collapse under the strain of its contradictions and impartibility before it gets going.

But then again, that is also what said would happen with Brexit, and it did not.

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