England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM RESTRICTIVE PRACTICES COURT

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 26th July 2001

LORD JUSTICE BROOKE: This is the judgment of the court which I have prepared.

1. On 21st December 2000 we allowed an appeal by the Proprietary Association of Great Britain ("PAGB") and the Proprietary Articles Trade Association ("PATA") against an order of the Restrictive Practices Court on 17th November 2000 whereby it had declined to vacate a trial of a contested application which was then proceeding before it. The grounds of the application to vacate the trial were that one member of the court had disclosed apparent bias, and that the whole of the court should recuse itself on the grounds that the other members were infected by her apparent bias.
2. The consequence of our direction was that the proceedings had to begin again before a reconstituted court. The new hearing started before a panel of the court presided over by Buckley J, but it came to a premature end without the need for a judgment of the court when PAGB and PATA withdrew their opposition to the relief being sought by the Director General of Fair Trading following an indication by the court that it was unsympathetic to the points they were making.
3. Although substantial costs savings were achieved in the way the parties presented the case to the second panel, PAGB and PATA estimate that they wasted costs of about £1 million because the proceedings had to begin again.
4. Before the enactment of the Human Rights Act 1998 ("the 1998 Act") the Lord Chancellor on occasion made ex gratia payments out of the funds allocated to his department by Parliament when litigants complained that they had been put to unnecessary expense by reason of some form of maladministration in the operation of the courts. In those days the House of Lords had made it clear in Steele Ford & Newton v Crown Prosecution Service [1994] 1 AC 22 that section 51 of the Supreme Court Act 1981 gave a court no implied power to make an order out of central funds in civil litigation to compensate a litigant for wasted costs. The appellants maintain, however, that the position has been altered since the 1998 Act came into force on 2nd October 2000. They say that their ECHR Article 6(1) right to a trial by an impartial tribunal has been infringed, and that they are entitled to be compensated for the costs they have wasted as a result of the infringement of that right by the Lord Chancellor, being the emanation of the state responsible for providing impartial tribunals to conduct trials of civil litigation.
5. Mr Philip Sales has appeared for the Lord Chancellor to resist this claim. He takes two preliminary points. If they are good points, there will be no need for us to consider any of the other matters that were debated before us. His first point is that PAGB is not a victim within the meaning of section 7(1) of the 1998 Act (see also section 7(7)) so that the court has no jurisdiction to grant them any relief under the Act. This in itself would not be sufficient to bar PATA's claim under that section. Mr Sales's second point is that these proceedings are completely misconceived. This court has corrected the situation that arose at first instance, so that an impartial tribunal was made available for the determination of the civil rights in issue. The appellants are therefore quite unable to claim that any Article 6 rights have been infringed.
6. Mr Sales's first point was developed along the following lines. Article 6(1) provides, so far as is material, that:

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law."

This language has been held to mean that a complainant must be able to show that his own civil rights and obligations have been directly affected by the proceedings and be the subject-matter of the dispute.

7. In this context Mr Sales showed us a number of Strasbourg decisions which declared inadmissible applications made by trade unions or other representative bodies which had an interest on behalf of their members in general or were otherwise interested in the point in issue in the case, but were not themselves directly affected. The reason why they were declared inadmissible was because these applicants did not qualify as "victims" for the purposes of ECHR Article 34, which is given effect under our domestic law by section 7(7) of the Human Rights Act 2000. The cases themselves were primarily concerned with alleged breaches of ECHR Articles 10 and 11, but their effect is equally applicable to the status of a complainant under Article 6.
8. The decisions in Hodgson v United Kingdom (1987) 10 EHRR 503, 506, Ahmed v United Kingdom ( 1995) 20 EHRR CD 72, 77-8, and Bowman and SPUC v United Kingdom (Appln 24839/94, decision of 4 December 1995) are examples of this approach to the interpretation of Article 34. It is sufficient for present purposes to refer only to Ahmed, in which four local government officers and their trade union (UNISON) complained about the effect of statutory regulations which restricted the political activities of the four individual applicants. In declaring the application admissible in relation to the four individuals, but inadmissible in relation to UNISON, the Commission said at p CD 78:

"The Regulations at issue in the present case do not affect any rights which UNISON may have under Article 11 of the Convention, and UNISON's freedom of expression is not limited in any way by the Regulations.

Moreover, the Regulations were not addressed to trade unions but to local authority employees, and they do not refer to limitations on individuals' union activity. To the extent that an individual may be affected by the Regulations in the exercise of the Convention rights, for example in his freedom of expression by speaking in public in a union context, he is the person affected and not the union.

Accordingly the Commission finds that UNISON is not directly affected by the provisions of the Regulations within the meaning of the Convention organs. It may not therefore claim to be a victim of a violation of the Convention within the meaning of the Article 25."

9. After this point was first raised in relation to both appellants, PATA adduced evidence which showed that the proceedings in the Restrictive Practices Court were indeed determinative of PATA's own civil rights and obligations because the outcome sought by the Director General rendered illegal an activity which constituted one of PATA's constitutional objects and its primary practical objective. It is not necessary to say any more about this, because Mr Sales accepted that this evidence rebutted his challenge to that association's standing. He stood his ground, however, in relation to PAGB. It is therefore necessary to consider its position in rather more detail. We gave all parties the opportunity to provide us with further evidence and/or submissions on the point. As a result the position, though not agreed, is now a good deal clearer than it was at the time of the hearing.
10. The material application to the Restrictive Practices Court was made by the Director General pursuant to section 17 of the Resale Prices Act 1976. This Act, among other things, consolidated with other related enactments those provisions of the Resale Prices Act 1964 which still had effect, and section 17 created a power in the court to discharge any direction it had previously made to the effect that goods of any class should be exempted goods for the purposes of this legislation. In our judgment dated 21st December 2000, which is now reported under the title In re Medicaments and Related Classes of Goods [2001] 1 WLR 700, we set out in paragraphs 8-10 the history leading up to the application made by the Director General to discharge the earlier exemption order made in respect of "OTCs" (medicines etc sold over the counter) in 1970. For present purposes it is sufficient to quote only part of paragraph 8:

"PAGB is an association of manufacturers, importers and suppliers of branded 'pharmacy only' and 'general sales list' medicines, vitamins and mineral supplements sold over the counter (without the need for a prescription) in the United Kingdom. The majority of PAGB members have established and maintain a system of resale price maintenance in relation to the sale of such branded goods in the United Kingdom."

11. The parties who represented the various industry interests in the 1970 application were PAGB, PATA and an association called ABPI. ABPI were concerned only with prescription medicines, in respect of which resale price maintenance had withered away before 1998. Boots Pure Drugs Company Ltd formally entered an appearance in the 1970 proceedings, but was not represented at the final hearing. Apart from that company, no individual undertaking was at any time a party to those proceedings, and the judgment in 1970 identified only the three industry bodies we have mentioned above and the Registrar of Restrictive Practices (now the Director General) as parties to the proceedings. No formal order was made to the effect that those bodies should represent their members.
12. Rules 19-21 of the Restrictive Practices Court (Resale Prices) Rules 1976 prescribe the procedure to be followed in relation to an application under section 17 of the 1976 Act to discharge an order previously made by the court. In particular, rule 20(2) provides in effect that a copy of the notice of application for leave to apply for such an order must generally be served on every party who appeared on the hearing of the previous proceedings, and rule 21 provides for the directions which may be made if leave is granted. For this purpose the provisions of the rules relating to an application under section 16 of the Act apply with any necessary modifications. These include rule 9(b), which provides that on the hearing of the preliminary application for directions the court may order that "some or all of the suppliers, retailers or trade associations who are before the court be represented by such representative respondent as the court might direct".
13. The Director General's application for leave was opposed by PATA and PAGB, and when leave was granted by the court in March 1999 he undertook to the court that he would advertise the existence of the proceedings, so that other interested parties would have an opportunity to take part, if so advised. In the event, only two persons responded to the advertisement, and both ultimately decided not to become parties.
14. The court at no time made any representative order pursuant to rule 9(b). The two associations' solicitors always accepted that in a formal sense they acted only for those two clients, for whom they were the solicitors on the record. When the Treasury Solicitor invited them in September 1999 to confirm that this was the case, the solicitors replied:

"In a formal sense and for the purposes of the record given the nature of the proceedings, we act for the respondent association as parties in this litigation. Whilst clearly we could not and cannot take our instructions from each of the members of the association individually, the associations are the sum of their membership from time to time and we do consider the members as our clients in this sense."

15. Two days later, at an interlocutory hearing before Lightman J, the fact that the individual manufacturers were not formally parties to the proceedings surfaced again in the following dialogue between Mr Turner (who appeared for the Director General) and the judge:

"The Judge: I understand Mr Cran accepts that all the members of the Association are his clients and effectively parties to the proceedings.

Mr Turner: My Lord, for the record the Director General's understanding is that they are not parties to the proceedings. There is a procedure by which they may be made parties to the proceedings, which has not been engaged in. They are simply member companies of the trade association which is the respondent in this …[interruption]

The Judge: This again is a far reaching question which if it is going to be live I will deal with at an appropriate stage with skeleton arguments."

16. That was how the matter was left. Rule 15(1) of the 1976 rules makes special provision for orders for disclosure of documents against individual suppliers or retailers who are members of a trade association which is a party to proceedings, and this rule enabled the Director General to make applications for such orders even though no representative order had been made under rule 9(2). We have been told by the Director General that a different procedure was adopted in proceedings affecting the Premier League, because in those proceedings the league was formally made a representative respondent for all the football clubs which had been members of it at one time or another since its inception. In those circumstances disclosure from the members was given as a matter of course, as if they were individually parties to the proceedings, without the need to have recourse to rule 15(1).
17. We have been told that counsel for the associations remembers a conversation with her opposite number in which both sides agreed that they did not want the manufacturers to appear individually, because of the huge additional administrative burden and additional cost which would be entailed. However that may be, the Director General seems to have been content with a situation in which the rules enabled him to obtain the disclosure he sought from individual members of PAGB. Rule 15(1), in conjunction with rule 29 of the Restrictive Practices Court Rules, also enabled a joint accountants' investigation to be ordered. For their part, the associations seem to have been content to spare their members the expense and nuisance of individual representation. In those days when the Human Rights Act 1998 was on the statute-book but had not yet come into force, nobody seems to have turned their attention to the question whether the absence of a representative order would disentitle both PAGB and, of necessity, its non-party members, from making any complaint about a breach of their Article 6(1) rights during the course of the proceedings.
18. Miss Otton-Goulder QC made brief submissions to the effect that the cases of Ahmed, Hodgson and Bowman, on which Mr Sales relied, produced results which were not at all surprising on the facts, but that the present situation was different. She referred us to the views expressed by John Wadham and Helen Mountfield in a passage in their book Blackstone's Guide to the Human Rights Act 1998 (at pp 39-41) in which they discuss problems of standing in judicial review proceedings. In that context they differentiated between public interest groups which are really an association of interested individuals who may be regarded as a group of persons each of whom may be regarded as a victim, and representative groups such as Amnesty or the Joint Council for the Welfare of Immigrants who may have special expertise but who cannot be classified in the first category.
19. On this occasion we do not have to go into those deep waters. Each case has to be decided in its own context, and in the present context the rules provided a route by which the individual parties could have been formally represented by PAGB, but they chose not to follow that route. In those circumstances PAGB cannot be properly regarded as a victim for the purposes of making a claim under section 7(1) of the 1998 Act.
20. Anticipating that the court might reach this conclusion, the appellants in the alternative sought an order pursuant to CPR Part 19 whereby PATA and PAGB might be made representatives of all persons who had the same right (in other words, all those who contributed to the costs and whose rights were affected by the main proceedings). Alternatively they invited us to adjourn so as to permit the joinder of all the affected parties. In our judgment it is far too late to grant them relief in either form, so as to enable the manufacturers retrospectively to become victims of the alleged breach of the Convention.
21. For these reasons, in our judgment, PAGB cannot be heard to say that the proceedings in the Restrictive Practices Court violated any of its Convention Rights, because they were not determinative of PAGB's civil rights and obligations within the meaning of Article 6(1).
22. Mr Sales's second preliminary point was that in the events that had occurred there had been no violation of anyone's Article 6 rights. He said that this point could be put in a number of ways. It might be said that this court did not find a breach of Article 6: it merely averted a breach which might have occurred in the future. Alternatively, he said that there was no breach of Article 6, since the Appellants did obtain a fair hearing before the reconstituted first instance court which represented an independent and impartial tribunal. His third way of putting the matter was that any breach of Article 6 was remedied by this court and/or by the retrial before the Restrictive Practices Court.
23. It is trite Convention law that an appeal court can remedy defects in first instance decisions where the appeal is in the nature of a full rehearing or otherwise involves a careful review of the merits (see, for example Edwards v United Kingdom (1992) 15 EHRR 417 and Twalib v Greece (Appln 41/1997/826/1032, judgment of 9 June 1998). In giving the judgment of the Divisional Court in R (on the application of Shields) v The Crown Court at Liverpool (at para 34) Brooke LJ said of two cases (De Cubber v Belgium (1985) 7 EHRR 236 paras 32-33 and Findlay v United Kingdom (1997) 24 EHRR 221) which had been cited to contrary effect:

"These cases do not establish that an appeal court cannot remedy defects in first instance decisions by holding those decisions to be invalid. Indeed that is one way in which an effective remedy for breaches of Convention rights can be secured, as required by Article 13 of the Convention. In such cases the appeal court is not saving the decision notwithstanding the blemishes at first instance, rather it is invalidating the decision because of the blemishes at first instance. The court is then ruling on a criminal case that the original verdict cannot be allowed to stand, and that if there is to be a conviction, it can only be after a fresh trial in which the Convention rights are respected. It is simply upholding Convention rights."

If that court had had the benefit of Mr Sales's argument in the present case, the second sentence of this passage might well have been phrased in a different way.

24. The case of Kingsley v UK (Appln No 35605/97, judgment of 17 November 2000) provides a good illustration of the point Mr Sales was making to us. The European Court of Human Rights ("ECtHR") held (at para 50) that a panel of the Gaming Board had not presented the necessary appearance of impartiality to constitute a tribunal which complied with Article 6(1). It went on to say, however, in para 52:

"However, even where an adjudicatory body determining disputes over 'civil rights and obligations' does not comply with Article 6(1), there is no breach of the Article if the proceedings before that body are 'subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of Article 6(1)'. The issue in the present case is whether the High Court and the Court of Appeal satisfied the requirements of Article 6(1) as far as the scope of jurisdiction of those courts was concerned."

25. The unusual feature of that case was that the courts on judicial review had no power to remit the case to any tribunal other than the one whose impartiality had been successfully impugned. This was the reason why the applicant was successful on the facts of that case (see para 59). More importantly, however, in the present context, the ECtHR made it quite clear (at para 58) that if the reviewing court had had the power to quash the impugned decision and either to make the relevant decision afresh or to remit the case for a new decision by an impartial body, then there would have been no breach of Article 6(1).
26. Despite this powerful recent authority to contrary effect, Miss Otton-Goulder maintained that the hearing before the re-constituted Restrictive Practices Court was not in itself sufficient to give effect to the requirements of Article 6, and that her clients must have compensation for their wasted costs as well. Unless they were granted this relief, she argued that there would be no restitutio in integrum and the breach of Article 6 would remain uncured.
27. In this context she referred us to the decision of ECtHR in Barbera, Messegue and Jabardo v Spain (1994) Series A, No 285-C. In that case, she said, the ECtHR had awarded the applicants compensation in respect of a period of time they spent in prison, holding that their subsequent release and acquittal could not in themselves afford complete reparation for the damage derived from their detention (see para 16). What she overlooked was that in that case the ECtHR in December 1988 had found that there had been a violation of Article 6(1). It was only in the course of the events which followed that judgment that the applicants were released and acquitted. They recovered compensation for the damage they suffered as a direct consequence of the trial found by the court to be in violation of the Convention, at a time when there had been no question of any appellate proceedings nullifying the breach.
28. Miss Otton-Goulder also relied on Strasbourg cases in which, she said, the court awarded wasted legal costs as part of the applicants' compensation where the violation of their legal rights related to the conduct of legal proceedings. In this context she cited the awards in De Haes and Gijsels v Belgium RJD 1997-I no 30, paras 67-69 and Oberschlick v Austria (No 2) RJD 1997-IV no 42, paras 40-42.
29. In each of these cases the ECtHR had held that the applicants' ECHR rights had been violated in the national courts, and awarded them their legal expenses and costs in those courts as part of the just satisfaction to which they were entitled under ECHR Article 50. If, however, there has been no breach of Article 6(1) at national level, these decisions do not take the matter any further.
30. Miss Otton-Goulder argued that the ECtHR decision in Riepan v Austria (Appln No 35115/97, judgment of 14 November 2000) also advanced her cause. In that case the court held that the criminal trial of a prisoner in a small room in the closed area of a prison did not comply with the requirement of publicity laid down in Article 6(1) of the Convention. The question therefore arose whether the absence of publicity at the trial court could be remedied by anything other than a complete rehearing before the appeal court, and the ECtHR held, on the facts, that the public hearing before the Linz Court of Appeal did not remedy the matter (see para 41). Apart from questioning the applicant, the appellate court did not take any evidence and in particular did not rehear the witnesses. This is, therefore, merely an example of the application of the principles set out in Kingsley v United Kingdom (see para 24 above). It is clear that the ECtHR considered that the matter could have been effectively remedied if the Court of Appeal had heard all the relevant evidence itself in public.
31. Miss Otton-Goulder conceded, on the authority of De Cubber v Belgium (1985) 7 EHRR 236, para 33, that a higher court might in some circumstances make reparation for an initial violation of one of the Convention's provisions, but she said that while certain of the consequences of the violation comprised by the lack of impartiality at first instance remained unremedied, it could not be said that full reparation had been made, still less that the violation had ceased to exist.
32. She relied in this context on the very recent ECtHR decision in TP and KM v the United Kingdom (Application No 28945/95, judgment of 10 May 2001). In that case a child aged four years and nine months was interviewed on video, and a place of safety order was made the same day in the belief that the child was saying her mother's boyfriend had sexually abused her (see paras 13-17). A transcript of the video interview was not disclosed to the mother or her solicitors for nearly 12 months, and they then pointed out that the girl had shaken her head when asked whether the abuser was living at home, and that she had identified her abuser as having been thrown out of the house by her mother. The muddle had occurred because her mother's boyfriend and the abuser shared the same first name. The child was reunited with her mother very soon after the muddle had been rectified (see paras 27-29). The ECtHR held (at para 83) that the question whether to disclose the video of the interview and its transcript should have been determined promptly to allow the mother an effective opportunity to deal with the allegations that her daughter could not be returned safely to her care, and that there had therefore been a breach of ECHR Article 8.
33. It is hardly surprising in those circumstances that the court ordered compensation to reflect the damage caused by the removal of this girl from her mother for a year (see paras 112-113 and 116). This was not an Article 6 case, and mother and child were entitled to restitutio in integrum in relation to the violation of their Article 8 rights. The mere fact that they were reunited after a year pursuant to a consent order made by a High Court judge was insufficient to remedy the wrong they had been done.
34. Miss Otton-Goulder was unable to show us any authority which justified her contention that notwithstanding the fact that this court remedied the situation so that no violation of Article 6(1) occurred, her clients were nevertheless entitled to recover wasted legal costs as compensation for an Article 6(1) breach. Indeed, Strasbourg authority is to contrary effect. In Kingsley v United Kingdom where the ECtHR did hold that there had been an Article 6(1) breach, it nevertheless did not allow Mr Kingsley his costs incurred in the domestic proceedings as costs (still less as pecuniary damages). It appeared to accede to the submission made on behalf of the UK Government (at para 65) to the effect that the court's normal practice was to disallow costs incurred in the domestic proceedings.
35. For these reasons we are satisfied that Mr Sales's second preliminary objection is also well-founded. In these circumstances it is unnecessary to consider any of the other issues raised on this application.
36. All that remains, therefore, is the question whether the appellants can recover from the Director General any of the costs of the issue on which they succeeded in this court. Since the hearing we have received written submissions from the Director General on this question, but we do not know whether this is a course which the appellants still seek to pursue. If they do, a further hearing would have to be arranged for this purpose unless the parties are willing to permit the court to determine that issue on the basis of written submissions.
38. ORDER:
39. Appeal dismissed.
40. Application for costs against LCD refused.
41. LCD to have to have costs of this appeal.
42. Appellant has 28 days to file submissions in support of application for costs against respondent and respondent has 28 days to reply.
43. Leave to appeal to the House of Lords refused.
46. (Order does not form part of approved Judgment)