It is very tempting for policy makers – particularly those who believe they can count upon the cooperation of Parliament – to take practical steps in anticipation of an expected change in the law. But how far can a policy maker (in particular, central government) legally go in preparing the ground with stakeholders ahead of legislative change?
In the case of Shrewsbury & Atcham Borough Council and others v. Secretary of State & Shropshire County Council, the English Court of Appeal has last month considered this question in the context of the reforms instituted under the Local Government and Public Involvement in Health Act 2007.
In October 2006, the Government published a White Paper which concluded that it was likely to be desirable to replace the existing two-tier local government in the affected local government areas with unitary authorities. The Secretary of State invited local authorities to make proposals for future unitary structures.
It was acknowledged in both the White Paper (and the invitations) that no proposals could be implemented unless and until new legislation was passed, since a policy decision had been made not to use the existing mechanism for local government reorganisation under the Local Government Act 1992.
Shropshire County Council, amongst others, put forward a proposal for a single unitary authority. This was strongly opposed by two borough councils which were to be abolished under the county council's proposal. Nonetheless, following consultation on the proposal, the Secretary of State announced in July 2007 that she was 'minded to implement' the proposal if and when the necessary Bill was enacted.
The borough councils applied for judicial review of the process adopted by the Secretary of State and the decisions taken by her in that context. In October 2007, following rejection of the judicial review application by the High Court, but before the case was heard by the Court of Appeal, Parliament passed the Local Government and Public Involvement in Health Act 2007. The Secretary of State then used her powers under that Act to implement the 'minded to' decision which she had previously taken.
The 'residual powers' issue
Among the legal issues for the Court of Appeal to resolve was a key question: assuming there had been no statutory basis for her actions, did the Secretary of State have sufficient residual legal powers to allow her to act?
In order to answer this key question, the Court had to address the scope of the Crown's so-called 'common law' powers. The Crown, and those who exercise their powers in the name of the Crown (such as Scottish Ministers), can be distinguished from other executive agencies in that the latter are creatures of statute and, as a consequence, only have such powers as are conferred upon them by statute. By way of contrast, the extent of the Crown's legal authority is a matter of constitutional tradition.
Whilst, in modern times, the most common source of legal authority for Crown action has been a Parliamentary one (via new statutory regimes), there remain two forms of residual authority. The first is the Crown's historic prerogative powers (for instance, the power to grant pardons or to negotiate treaties with foreign states). The second, more controversially, is the Crown's 'common law' powers (otherwise known as the 'third category' of powers, alongside its statutory and prerogative powers). The precise scope of this third category of powers is a matter of continuing legal debate. Those who favour an expansive approach rely upon a doctrine (the 'Ram' doctrine) according to which the Crown has power to do anything a natural person can do except to the extent prohibited by statute. Others, concerned at the tension which the 'Ram' doctrine creates within a parliamentary democracy, argue that the third category should be strictly confined to only those powers which are ancillary to those conferred by statute or prerogative.
The court's decision
In this case, the Court of Appeal recognised that they were bound by the Court's own 2000 decision in R v. Secretary of State for Health Ex parte C which held that the third category was sufficiently broad to authorise the establishment and maintenance of a list of sex offenders in anticipation of the setting up of a statutory register.
According to Carnwath LJ, the legitimacy of the Secretary of State's actions in undertaking the pre-2007 Act process in this case did not in fact depend upon the scope of the third category, since they were "simply a necessary and incidental part of the ordinary business of central government, part of which is the promotion of new policies through legislation". The issue, as far as he was concerned, was "how far such preparatory steps can properly go before crossing into territory reserved to statute". In his view, because the steps taken by the Secretary of State had not produced legal effects in their own right (nor infringed legally protected rights or required the relevant local authorities to act outside their own powers), there was no ground for the court to intervene. He also suggested, as a gloss on the C decision, that third category powers should only be available to the Crown to the extent they were exercised for the public benefit and for an identifiably 'governmental' purpose.
Disagreeing with this approach, Richards LJ took the view that the actions taken in the course of the 'ordinary business of central government' depended heavily upon the third category of powers for their legitimacy. He also disagreed with Carnwath LJ's suggested limitations on the scope of third category powers, proposing instead that – subject to respecting the rights of others and the public law principles applied in judicial review – the third category was essentially unlimited in scope.
The third member of the Court, Waller LJ, appeared in principle sympathetic to Carnwath LJ's approach to the extent that this imposed a requirement to exercise third category powers for the public benefit. However, in the absence of actual facts on which to test the point fully, he thought it unwise to say more.