17 March 2006
In this increasingly litigious society, local authorities have become used to being sued for everything from cracked pavements to housing problems. But is there now a new and serious threat to be faced?
News last week that Northamptonshire County Council had been legally challenged by judicial review and served with an injunction over its council tax budget will have sent shock waves around local government.
If this type of action were to become a trend, then it could potentially be very damaging, due to the time and expense involved in such proceedings and their potential for forcing a council to take its eye off the ball of service delivery. So does this present the threat that has been suggested?
The case arose as the council was setting its budget. A group of complainants went to the High Court and challenged the budget, on the grounds that it did not properly provide for their disability needs. They were able to secure an injunction preventing the council from setting the budget until the issues had been examined in a court hearing.
This is a serious step — which came as something of a shock to the council — as each local authority is under a statutory duty to set a budget in accordance with law. It meant that the council was in the invidious position of being unable to set its budget until it had argued its case before the courts.
What has caused greater consternation, however, is that the complainants were using the attack on the budget to influence other decisions, which the council has denied it has yet made. In effect, the reason for the challenge was to persuade the council how to treat facilities for disabled people; but the council has claimed that it has not made any decisions in respect of those facilities and it is therefore inappropriate to challenge by this legal route.
Using a simple analogy, what this seems to suggest is that the council has decided that it has £100 to spend on its shopping and has prepared a list; someone is challenging it on the basis of what is on the list, not on what the council actually buys when it gets to the shops. Of course, the shopping list is not enforceable in that sense and the council could decide to buy something different when it gets to the shops; hence the criticisms of the indirect route of challenge. If there is a right of challenge of the council's decision on how it spends money, it should arise only when it spends or does not spend that money, not when it sets the budget.
This case raises a number of points of interest, the chief one of which is the alarming ease with which the injunction seems to have been granted by the High Court. Generally injunctions are seen as exceptional remedies for which a difficult burden of proof has to be reached. To prevent a local authority performing its express legislative duty seems to us to create a circumstance where the courts would want the strongest grounds, based on detailed evidence.
While legal proceedings to overturn specific decisions of a public body that a complainant considers are unlawful are not unusual, to attack the whole setting of a budget is a worrying trend. This type of general attack, if permitted to flourish by the courts, could become a regular trend.
It should be noted that the case is not over yet. Previous rounds have involved the respondents seeking permission for judicial review and seeking (and getting) their injunction; the county council then applied for the injunction to be set aside, which it was; next there is a hearing on the merits of the permission application. That is a fuller inquiry by the court to determine whether the matter will go to a full hearing in the High Court.
The council might well convince the judge in due course that there is no merit in any of the grounds for judicial review and the case should be thrown out. But the council has still been drawn into a series of legal proceedings that have cost it time and money and disrupted an important part of its work.
Unless the judge hearing the case criticises the granting of the injunction in the earlier circumstances, this might create a trend of similar proceedings as every local authority across the country struggles to set its budget, in the context of a growing and vocal band of community members who might disagree with that individual council's spending priorities.
It is to be hoped that these proceedings can be suitably dispatched, with a judicial message to those who might follow a similar path, although this may be asking too much. The case certainly confirms the point that litigation is becoming an increasing trend in many areas of life. Local authorities will certainly not welcome any extension of this into budget-setting.
Stephen Cirell is head of local government and Professor John Bennett is a consultant solicitor with Eversheds. They are authors of Best Value law and practice
PFmar2006
