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New guidance for public body decision-makers: JT (Jersey) Limited v Jersey Competition Regulatory Authority [2013]JRC238

29 November 2013

Public body decision-makers are often concerned to ensure that decisions they take will not be susceptible to challenge, for instance by making sure they comply with a fair and proper process and taking into account all relevant factors. The judgment of the court in JT (Jersey) Limited v Jersey Competition Regulatory Authority [2013] JRC238, in which Bedell Cristin's David Cadin acted for the successful appellant, provides useful guidance for public bodies as to the steps they should take to reduce the likelihood of a challenge by those affected by their decision.

This case involved a successful challenge by JT (Jersey) Limited ("JT") against a decision of the Jersey Competition Regulatory Authority ("JCRA") which aimed to introduce a new system of line rental, namely wholesale line rental ('WLR') via a modification to JT's licence.  In quashing the decision of the JCRA, the case brings to the fore the importance of making (and being seen to make) a reasoned and justifiable decision that complies with a fair and proper process.

The duty to consult
Under the Telecommunications (Jersey) Law 2002 ('the Law'), the JCRA are obliged to follow a strict process when exercising a regulatory function (in this case the regulatory function was the modification to JT's licence). They are required to issue an initial notice setting out their proposed course of action, affected parties must then be consulted and given the opportunity to make representations or objections which must be duly considered, following which the JCRA may issue a final notice either confirming the proposed course of action (or if substantial changes are to be made, issuing a revised initial notice and then re-consulting).

In Article 11(4) of the Law it is specifically stated that representations and objections of affected parties shall be considered by the JCRA. In failing to do so in this case, the JCRA were in breach of their statutory duty and also more generally were not following a fair process. Their decision to implement WLR was therefore quashed.

Where did the JCRA go wrong?
In response to the JCRA's initial notice, JT provided a lengthy response that raised concerns, for example, in relation to timescale for implementation of WLR, JT's internal resourcing commitments and its views on the merits of WLR. They had also made observations to the JCRA prior to the issuing of the initial notice. However, JT's representations were condensed by certain members of the JCRA executive into a short (four paragraph) summary of JT's objections and representations. It was this summary, and not JT's full response, that was placed before and considered by the board of the JCRA when deciding whether to issue the final notice which would require the implementation of WLR. The earlier observations made by JT were also only provided to the board in summary. The JCRA's approach to the consultation process was found to be flawed on two bases. Firstly, it was held that as JT had provided a significant, lengthy response and stood to be appreciably affected by the JCRA's decision (in fact being the entity actually most affected by the decision), their response should have been made available to the board in full before a decision was made. Although it would not always be necessary for responses to be provided in full, it would be the short and non-contentious responses that lend themselves to being summarised. Secondly, even if a summary were to be appropriate, 'that summary must be sufficiently complete to give a fair and accurate portrayal of the response'. In this case, it was held that the summary provided by the JCRA 'failed by quite a substantial margin to reach that requirement'.

The court decided therefore that JT's objections and representations had not been adequately considered at board level. The board had made its decision 'in ignorance of the points made by JT save to the limited extent that they were found in the Board paper' (i.e. on the basis of four paragraphs describing JT's response).

Interestingly, the court noted that even without the express statutory duty upon a decision maker to consult, the requirement for a fair and proper consideration of representations and objections could be inferred; in this case from the existence of a process whereby an initial notice was issued for consultation followed by a final notice. Therefore, decision-makers should be alive to the fact that even where there is no mandatory statutory duty to consider representations or objections, in order to comply with a fair procedure generally, care should still be taken to ensure that affected parties are consulted and their representations are thoroughly and properly considered.

Delegation of decision making
Where a decision is to be taken at board level, it is common for boards to delegate certain functions to specific individuals or committees. In this case, JT alleged that the JCRA decision was ultra vires (i.e. outside their power) because certain members of the executive carried out specific functions, such as finalising the terms of the final notice, that it was argued were not validly delegated to them. However, the Bailiff found that the function of finalising and issuing the final notice had in fact been validly delegated. The case highlights the various important considerations for a decision maker when they wish to delegate certain responsibilities. They should consider whether they have authority to delegate (for instance this may be prohibited or limited by statute), define the parameters of the delegation i.e. who is taking on the role and what are they being asked to do, comply with any specific formal requirements, and keep an adequate record of the delegation (e.g. through board minutes).

It was found in JT v JCRA that although the function of finalising the final notice was validly delegated, the board did not validly delegate to its executive the authority to determine the date for implementation of WLR, and thus that part of the decision was made ultra vires. Whilst nothing turned on it in this case (as the timescale for implementation had separately been held to be unreasonable) this serves as a warning to decision-makers to ensure that any delegation of responsibility is done so carefully, precisely and validly.

Practical considerations for decision-makers
It is critical to follow proper process when making decisions. If the process is flawed, this raises the potential for the decision to be quashed. Public bodies should not confine themselves to a consideration of statutory requirements, but should also think about general principles of fairness. Clearly, what is 'fair' is difficult to define precisely and it is often easier to determine what is 'unfair'. This case however serves as a useful starting point, particularly with regard to undertaking a proper consultation process.

Public body decision-makers should ensure that affected parties are consulted throughout the decision making process, and that any lengthy or significant representations/objections received (and not necessarily just those received as part of the formal consultation process) are fully considered at board level. If the representation is short and not contentious a summary may be appropriate but care should be taken to ensure that this is a fair and accurate depiction of that representation.

Care should also be taken when delegating functions to others. Decision-makers need to ensure they have the requisite authority to do this, that the limits of the delegation are clear and adhered to, and that an accurate record of the delegation is maintained.

As this case has demonstrated, a failure to consider these important points can leave a public body decision maker wide open to a successful challenge.

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