Transparency in Regulation

Good administrative practice, backed up by the Freedom of Information Act, encourages considerable openness in policy making.   The need for transparency is even stronger if we are working on inquiries that have a judicial character.  Parties to our inquiries will expect to see consultation and decision documents which demonstrate that we have reached a sensible decision having taken careful note of all relevant submissions and evidence. The courts will if necessary quash our decisions if they are not satisfied with the fairness and thoroughness of our processes.   Click here for more information about judicial review.  

Some regulators are noticeably good at admitting when they could have done better. The Pensions Regulator, for instance, published an admirable Regulatory Intervention Report which acknowledged that it could have intervened more robustly when BHS collapsed. This openness helped reinstate the reputation of that regulator.

Decision Document Detail

Many modern regulators produce very detailed and very lengthy decision documents, fearing that they will be challenged if they fail to address ever last detail of the equally lengthy submissions of those affected by their decisions. So there is a sort of arms race in which ever longer submissions is met ever longer decision documents with the result that no-one except their authors can understand any of it.

This may be inevitable, but I am not convinced. I suspect that the regulators - and particularly their lawyers - are being over-nervous - and perhaps a bit lazy. As Winston Churchill pointed out, it is much quicker and easier to write a long document than a short one.

And I have seen no sign that the courts will criticise good, short documents. One rather fun judgement was McClelland v. Elvin & others). Although it was a legal, not regulatory, judgment, I think it nicely describes most judges' attitude to excessive detail. The judgment begins with a reference to Boudicca and includes these observations:

Freedom of Information Exemption

Section 32 of the Freedom of Information Act does exempts regulators and similar bodies from any duty to disclose any document placed in its custody or created by it for the purposes of one of its inquiries.  The Supreme Court has however decided that there is a common law presumption in favour of openness on the part of regulators and others who carry out such investigations.  (Kennedy v. The Charity Commission, March 2014.)  This appears to have severely weakened the effect of S.32.

The dispute in the landmark Kennedy case arose because Mr Kennedy, a Times journalist, wanted to understand a Charity Commission decision concerning George Galloway, a controversial member of Parliament.  Refusing Mr Kennedy’s request to see only a selection of documents, the Charity Commission relied upon the absolute exemption contained in Section 32 of the FoI Act.  The court was clearly highly sympathetic to Mr Kennedy and troubled by the very brief nature of the Charity Commission’s decision document, which contrasted with the lengthy decision documents published, for instance, by both the economic regulators and the courts.  It may also have been relevant that the decision was being taken at a time when senior politicians were expressing grave concern at what they saw as the intrusion of European Human Rights jurisprudence into the UK’s domestic law.

The court itself noted that: In the present case the inquiries which the Charity Commission conducted, under section 8 of the Charities Act 1993, into the operations of a charity formed by Mr George Galloway MP were of significant public interest. At the end of the inquiries the Commission published its conclusions, but the information provided as to its reasons for the findings which it made and, more particularly, did not make, was sparse. As a journalist, Mr Kennedy had good cause to want to probe further. It is possible that the Charity Commission may have had reasons for not wishing to divulge any further information, but such is the course which the proceedings have taken that it is impossible to tell at this stage.

The Supreme Court was clearly very reluctant to find that the Human Rights Convention overrode the very clear words on the S.32 absolute exemption, but they found a solution by finding that there has in fact been no need for Mr Kennedy to have relied upon that Act.  He could instead have relied upon his common law rights and sought judicial review of any decision not to give him access to the information.

Here are some extracts from the judgment:

In some areas, the common law may go further than the Convention [on Human Rights]

‘It has long been recognised that judicial processes should be open to public scrutiny unless and to the extent that there are valid countervailing reasons. This is the open justice principle. …  Letting in the light is the best way of keeping those responsible for exercising the judicial power of the state up to the mark and for maintaining public confidence: Scott v Scott [1913] AC 417’
The Charities Act says that “in performing its functions, [the Charity Commission] must, so far as relevant, have regard to the principles of best regulatory practice  (including the principles under which regulatory activities should be .... accountable, .... [and] transparent ....)”.

The present request for further disclosure is made by a journalist in the light of the powerful public interest in the subject matter to enable there to be appropriate public scrutiny and awareness of the adequacy of the functioning and regulation of a particular charity. It is in these circumstances a request to which the Charity Commission should in my opinion accede in the public interest, except so far as the public interest in disclosure is demonstrably outweighed by any countervailing arguments that may be advanced.

Against the above background, there seem to me to be two interesting things to be said about the 2014 Kennedy decision.

First, from the regulators’ point of view, this decision severely weakens the apparently cast-iron nature of the S.32 exemption and forces them to consider whether to release documents and information which had previously been regarded as absolutely private – particularly in the eyes of those providing it to them. 

This transparency could unfortunately deter some of those who might wish to give valuable evidence to such inquiries.  I suspect that every regulator has, from time to time, wanted to take evidence from someone who was very worried that their evidence might be published to their detriment.  It is not that they wanted to tell lies or be malicious, but they don’t want to end up in a dispute with a huge corporation or an obsessive litigant.  It is generally very helpful to be able to tell such a reluctant witness that their evidence has cast iron protection under S.32.  This can no longer be done. 

Second, even if one welcomes the Supreme Court’s weakening of regulators’ secrecy, they may have created a lot of problems for those seeking information, and for the courts.  The Supreme Court’s decision was not unanimous and the dissenting judges pointed out that a combination of common and administrative law might be much less effective than the FoI Act.  The dissenting judges would rather have overridden the S.32 exemption. 

Here are some extracts from the dissenting judgments which add some detail to this argument.

As has often been said, judges are not ‘equipped by training or experience or furnished with the requisite knowledge or advice’ to decide issues depending on administrative or political judgment

In my view the scheme identified by the majority for disclosure by the commission outside the FoI Act is profoundly unsatisfactory. With respect, it can scarcely be described as a scheme at all and there is certainly no example of its prior operation or other recognition of its existence. Compare it with the scheme under the FoI Act which, apart from the apparent prohibition for 30 years, identifies an elaborate raft of prescribed situations in which the Commission is entitled, or subject to the weighing of rival interests may be entitled, to refuse disclosure; and under which a refusal can be countered by application to an expert, namely the Information Commissioner, who takes the decision for himself.   

It seems to me clear that the scheme established by FoI Act was intended to be a comprehensive, albeit not necessarily exhaustive, legislative code governing duties of disclosure by the public authorities to which it applied. It is entitled: “An Act to make provision for the disclosure of information held by public authorities...”

Further it was designed to create “rights” for the public, enforceable by a simple, specialist and generally cost-free procedure, rather than simply discretionary powers enforceable by the ordinary courts only on conventional public law principles. In considering whether the “legislation” is compatible with the [Human Rights] Convention rights for the purpose of section 3, we should direct attention to the legislative code as so established by the Act, rather than to powers or remedies which may be available from other legal sources. Furthermore, I agree with Mr Clayton that recourse to the courts remains more cumbersome (and more costly) than the specialised procedures provided by the Act.

In so far as it is permissible to take policy considerations into account, I see advantage in an interpretation which allows such cases to be dealt with through the specialist bodies established by the Act, rather than the ordinary courts. … The foundation of the Guardian News decision lies in the strong constitutional principle that courts sit in public. It is no surprise that the starting point of Toulson LJ’s judgment is a quotation from the great case of Scott v Scott [1913] AC 417, in which that principle was set in stone. It is not a large step from that principle to hold that papers supplied to the judge for the purpose of an open hearing should in principle be made available to the public, absent good reasons to the contrary. For statutory inquiries, such as those conducted by the Charity Commission, there is no such underlying principle that they should sit in public. The essential foundation that is needed for application of the Guardian News approach is wholly absent.

By contrast, under the alternative “common law” approach, which eschews reliance on article 10, the applicant would be entitled only to judicial review on conventional administrative law principles, subject to the ordinary incidents as respects fees and costs. As Lord Mance points out, there is authority for a closer or more “intense” form of review (or “anxious scrutiny”) in some contexts, particularly where fundamental human rights (such as the right to life) or constitutional principles are at stake. However, even in cases to which it applies, as appears from the words of Lord Phillips MR, (R (Q) v Secretary of State for the Home Department), the role of the courts is often more about process than merits.

For the moment, and pending more detailed argument in a case where the issue arises directly for decision, I remain unpersuaded that domestic judicial review, even adopting the most flexible view of the developing jurisprudence, can achieve the same practical effect in a case such as the present as full merits review under FOIA or the HRA.

Martin Stanley

Spotted something wrong?
Please do drop me an email if you spot anything that is out-of-date, or any other errors, typos or faulty links.