Judicial Review

December 1st, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

There is increasing concern about the need for appropriate procedural rigour in judicial review cases. In R (Dolan) v SoS for Health (2020) EWCA Civ 1605 the Court of Appeal says, at para 117 that procedural rigour is important for justice to be done and for fairness to all concerned.

Read more »


S 114 – (3) PWLB terms

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

Unlinked to any particular LA’s situation, the Government consulted earlier this year on revised Public Works Loan Board lending terms and guidance. The background was LAs’ involvement in the commercial property market as a means of increasing income, which had been the subject of much controversy over the years.  The extreme financial pressures now faced by LAs as a result of the pandemic brings this issue into particular focus. Yesterday (25th November 2020) the Treasury published its response to the consultation, and it can be found here.

As the consultation response explains:-

“In recent years a minority of local authorities have borrowed substantial sums from the PWLB to buy investment property with the primary aim of generating yield. The National Audit Office estimates that LAs bought £6.6bn of investment property between 2016-17 and 2018-19. The government is clear that this is not an appropriate use of PWLB loans.”

The response explains that from today, 26th November 2020, the PWLB (i.e. the Treasury) will apply a new approach to deciding whether to lend for a proposed project.  These include the following:-

“b) the PWLB will ask the finance director of the LA to confirm that there is no intention to buy investment assets primarily for yield at any point in the next three years. This assessment is based on the finance director’s professional interpretation of guidance issued alongside these lending terms.

c) It isn’t possible to reliably link particular loans to specific spending, so this restriction applies on a ‘whole plan’ basis – meaning that the PWLB will not lend to an LA that plans to buy investment assets primarily for yield anywhere in their capital plans, regardless of whether the transaction would notionally be financed from a source other than the PWLB.”

The response also announces that, now a workable system is in place to ensure that loans will “not be diverted into debt-for-yield activity”, PWLB lending rates from today for new Standard Rate and Certainty Rate loans will be reduced by 1%.

Peter Oldham QC


S 114 – (2) Croydon

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

On 11th November 2020, Croydon LBC’s s 151 officer wrote a report to the authority under s 114(3) of the LGFA 1988, which can be found here.  For the purposes of this series of posts, the interesting point is that the Council obtained clarification from CIPFA of the meaning of its guidance of June 2020, which I discussed in my earlier post today.

The s 151 officer’s report explains that in early September she issued a draft s 114 report to the Leader and others in the Council, and also sent it to the MHCLG, the LGA and the Council’s external auditors.  She explains that she did not issue a formal s 114 notice “as the conversations with MHCLG were ongoing”.  As we have seen, this was in accordance with the CIPFA guidance of June.

She reports that, on 6th November:-

“the Chief Executive of CIPFA clarified in a letter to Croydon Council that the modified guidance regarding the issue of S114 notices was as a direct result of costs incurred by the Covid19 pandemic. Croydon’s financial pressures are not all related to the pandemic.”

Stopping there, this clarifies the purpose of the CIPFA guidance of June 2020: that it was directed to pressures arising as a result of Covid. It was not meant to apply to situations where the financial crisis arose for other reasons, or other reasons as well.

The S 151 officer went on to explain that the financial pressures in Croydon also arose because of a misidentification of in-year savings as “new” savings; a greater risk of a group company, Brick by Brick, not making interest and dividend payments; a failure to identify medium term budget savings; and the continued incurring of non-essential costs. She also referred to the October report in the public interest under the Local Audit and Accountability Act 2014 from the Council’s auditors (s 24, Sched 7), which had detailed its deteriorating financial resilience.  She said:-

“I am not seeing the necessary level of pace, urgency or radical options to be presented to members to take decisions upon to give me confidence that the Council can make the level of savings required to deliver a balance budget in year, without external support in the form of a capitalisation direction.”

Peter Oldham QC


S 114 – (1) CIPFA’s approach

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

This is the first of a short series of posts about s 114 of the Local Government Finance Act 1988. They look at (1) CIPFA’s approach announced in June 2020, (2) the s 114 notice in Croydon and (3) yesterday’s Treasury response to consultation about PWLB lending terms.

Under s 114(3) of the LGFA 1988:-

114(3)     The chief finance officer of a relevant authority shall make a report under this section if it appears to him that the expenditure of the authority incurred (including expenditure it proposes to incur) in a financial year is likely to exceed the resources (including sums borrowed) available to it to meet that expenditure.

In the light of the pandemic, and its impact on LAs’ finances, CIPFA put out this statement in June 2020 – and note the words “due to COVID-19” which I’ve put in bold, and whose significance I will pick up in my next post:-

“The role of S.114 in the current crisis has been the subject of understandable debate. This statement confirms that the statutory responsibilities of the CFO has not changed. However, CIPFA proposes that there should be a temporary modification to existing guidance in order to create an opportunity, within existing statutory limits, to enable an exploration of what further options and/or financial assistance may be available.

The proposed modifications are as follows:

  • At the earliest possible stage a CFO should make informal confidential contact with MHCLG to advise of financial concerns and a possible forthcoming S.114 requirement
  • The CFO should communicate the potential unbalanced budget position due to COVID-19 to MHCLG at the same time as providing a potential s 114 scenario report to the council executive (Cabinet) and the external auditor

In practice this means it should not normally be necessary for a s.114 report to be issued while discussions with the government that would address the issue are in progress.

It is important to note that this modification does not change the statutory responsibilities of S.151 officers.

Where there is any doubt the CFO should of course revert to the statutory requirements of S.114.”

Rob Whiteman, Chief Executive of CIPFA, was quoted on Room 151 as follows on 23rd June 2020:-

“These temporary changes are designed to facilitate dialogue between local and central government. Prior to these changes, difficult conversations remained both internal and informal, and councils were able to issue notices without involving central government beforehand. Due to current pressures, this can no longer be the case.

The additional breathing room created by these amendments should ensure that more finance directors are able to meet their statutory responsibilities, while avoiding a premature S.114 notice, and the resulting freeze on local spending that inevitably follows.

The modifications do not change the statutory duty of the Section 151 officer. Our hope is that they support local authorities to impress upon government both the urgency of the need for additional funding to deal with the current crisis, as well as the thorny issue of local government funding in its entirety.”

Private Eye ran the following story in early summer 2020:-

“According to a senior figure in local authority finances, the local government ministry feared that if one council issued a S114 notice, many others would swiftly follow. They said that Robert Jenrick’s Ministry of Housing, Communities and Local Government, “…could cope with one or two S114 notices, but they wouldn’t be able to deal with 20 or 30”.”

CIPFA’s guidance was aimed at putting a buffer between LAs and the need to issue a s 114 notice, by strongly encouraging LAs to talk to the MHCLG “at the earliest possible stage”, as those discussions might “address the issue”.  But it made clear that – as was of course the case – this approach did not, and could not, alter the s 151 officer’s duties under s 114.

Peter Oldham QC



November 23rd, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

In Test Claimants in Franked Investment Group Litigation v HMRC (2020) UKSC 47 the Supreme Court hols that (1) by a 4-3 majority, Section 32(1)(c) of the Limitation Act 1980 applies to mistakes of law, following Kleinwort Benson v Lincoln City Council (1999) 2 AC 349, and (2) time begins to run when the claimant discovers, or could with reasonable diligence discover, his mistake, in the sense of recognizing that a worthwhile claim arises, departing from Deutsche Morgan v IRC (2006) UKHL 49. The case is also of interest with respect to both cause of action and issue estoppel.



October 12th, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

Where the overall winner has failed on a number of issues, Judges should consider the extra costs associated with the failed issues, be explicit about the proportions of time spent on the successful and failed points respectively, and attempt to quantify that, as a starting point. However, the Judge still had to stand back, look at the matter globally, and consider the extent to which it was just to deprive the successful party of costs. That involves a discretionary judgment. It is not a mechanical exercise. See Terracorp v Mistry (2020) EWHC 2623 (Ch).



Judicial Review: Refusal of Relief

September 10th, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

In Gathercole v Suffolk County Council (2020) EWCA Civ 1179 relief was refused where planning permission, for a new village primary school near an airfield, had been granted without compliance with the public sector equality duty, in respect of the effect of aircraft noise on children with protected characteristics, but it was highly likely that the planning decision would have been the same if there had been compliance. The environmental statement in respect of alternative sites, was adequate, but even if it had not been that would not have had any substantive effect on the planning decision.



September 8th, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

In TBD v Simons (2020) EWCA Civ 1182 the appeals raised important issues as to (1) the interpretation of search orders, (2) the granting of permission to bring committal proceedings, and (3) litigation privilege. On search orders, see paras 127-175, imaging orders, paras 176-193, applications for permission to bring committal proceedings, paras 230-234, and litigation privilege, including waiver and the iniquity exception, from para 254.
Read more »


Standing for Judicial Review

September 4th, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

In R ( McCourt) v Parole Board (2020) EWHC 2320 a Divisional Court approve, at para 31, as an accurate high-level summary of the law a passage in Auburn, Moffett & Sharland on Judicial Review, including that the Courts have adopted an increasIngly liberal approach to both individuals and groups bringing judicial review claims. The applicant does not have to claim to be more affected by the decision than anyone else : para 32. Whether an applicant has a sufficient interest to provide standing to bring judicial review proceedings depends on what the rule of law requires in the particular context of the decision under challenge: paras 41-43. A suitably expert organisation may be better placed to present arguments about the impact of policy on an affected class as a whole, rather than an individual in particular: para 43.


Similar Fact Evidence

August 19th, 2020 by James Goudie QC in Judicial Control, Liability and Litigation

In R v P (2020) ECCA 1088 the Court of Appeal considered similar fact evidence in family cases and held that : –

Read more »