Navigating commercial judicial review: consultation challenges

In this mini-series, Fieldfisher's tier 1 ranked Public law team outline a few hot topics for claimants in commercial judicial review cases.

In this second edition of the mini-series, Partner Martin Smith and Solicitor Charlie Smith provide an overview of the issues that companies should bear in mind when considering whether a public body's consultation process, or failure to consult, can be challenged. 

When will the duty to consult arise?

There are various situations where public bodies are required to consult before making a decision. Failure to do this may leave the ultimate decision vulnerable to challenge.

The duty to consult may be express or implied. Consultation will be required:

• Where a public body has a statutory duty to consult.
• Where a public body has created a legitimate expectation that it will do so (whether by a promise or a sufficiently consistent past practice). When considering whether this may be applicable, companies should review historic public statements and guidance issued by the public body.
• Where it would otherwise be conspicuously unfair not to consult. This will be particularly relevant where the decision will have a significant impact on affected organisations and individuals.

When will a consultation be fair?

Where a public body has a duty to consult and has done so, the consultation exercise should be examined to assess whether a "fair" consultation has been undertaken.

The principles of a fair consultation are contained in case law and are known as the "Gunning principles". A public law consultation must meet these principles even where it is undertaken voluntarily (i.e. in the absence of an express or implied duty).

There are four basic requirements that must be met for a public law consultation to be considered fair:

1. The consultation must be at a time when the proposals are still at a formative stage.
2. The proposer must give sufficient reasons for any proposal to permit intelligent consideration and response ("Sufficient Reasons Requirement").
3. Adequate time must be given for consideration and response ("Adequate Time Requirement").
4. The product of the consultation must be conscientiously taken into account by the public body.

As well as considering whether the consultation exercise complies with the Gunning principles, companies should examine any guidance issued by the public body explaining how it will conduct consultations. Although there is no legally binding duty for public bodies to comply with their own guidance, this should be followed unless there are exceptional reasons to depart from it.

We have seen a recent trend in consultations being successfully challenged due to failures in meeting the Adequate Time Requirement and Sufficient Reasons Requirement, which are considered in further detail below. 

The Adequate Time Requirement

In relation to the Adequate Time Requirement, the reasonableness of the consultation period will be considered on a case-by-case basis, with Government guidance indicating that consultations will typically last for between two and 12 weeks. The time allowed should be proportionate and provide sufficient time for those affected to give a considered response. A longer consultation period may be required where:   

• Consultees are required to provide detailed responses, which may require an extensive analysis of their business / financial operations, or the instruction of expert or legal advice.
• The consultation period extends over a holiday period. This would be most persuasive where the consultation period extends over the Christmas period.
• There is no immediate urgency for the decision to be made.

The Sufficient Reasons Requirement

In relation to the Sufficient Reasons Requirement, public bodies should ensure that they balance including sufficient detail in consultation documents against ensuring that consultation documents are not overwhelmingly detailed.

Consultation documents may be particularly prone to challenge where:

• Additional supporting or underlying documents (such as impact assessments) have not been published with the consultation document.
• The consultation document does not contain the rationale supporting the consulted proposals.
• The consultation document does not contain a clear explanation of the criteria against which responses will be assessed.

Outcomes and remedies

If a court finds that a consultation is unfair, it may ultimately order that that the decision made by the public body following the consultation is unlawful, requiring the consultation exercise and decision-making process to be undertaken again.

However, bringing timely consultation challenges can lead to beneficial results for companies during the consultation period. In our recent experience, this can include the public body agreeing to:

• Extend the consultation period.  
• Publish additional documents, such as impact assessments.
• Re-publish the consultation document, to include additional information for consultees.

Where there has been a failure to consult, bringing a judicial review challenge to the consultation process may elicit promises of future consultation. This may be particularly beneficial where a public body is making a series of related decisions.

When considering the fairness of a consultation, it is important to raise concerns and engage with the public body as soon as possible. Any challenges must be brought promptly and (unless a specific statutory time limit applies) no later than three months after the grounds to make the claim arose.

Our next edition in this mini-series will look at issues for organisations to consider when seeking to challenge primary legislation.

If you would like to discuss any of the issues raised in this blog, please get in touch with our team.

The content of this blog does not constitute legal advice and is provided for general information purposes only. Specific legal advice should be sought before taking any actions based on the content of this blog.