Sporting Options Plc, R (on the application of) v Horserace Betting Levy Board.

Fairness required a statutory body imposing a levy to consult persons liable to be adversely affected. A statutory committee may provide that consultation for groups it represents, but not for affected businesses which it does not represent. Consultation must occur while proposals remain formative, disclose sufficient reasons, allow adequate time for an intelligent response, and ensure that the response is conscientiously considered. Those requirements were not met where revised levy proposals were withheld, relevant submissions were incompletely communicated, material issues were not analysed, and the decision was taken at the last moment. The court declared the levy decision unlawful and unfair.

Sporting Options plc, a betting exchange, sought judicial review of the Levy Board’s decision of 31 October 2002 adopting the 42nd levy scheme. The scheme required betting exchanges to account for levy assessed by reference to the gross profits of successful layers, rather than continuing with the commission-based basis used under the 41st scheme.

The claimant alleged inadequate consultation, procedural unfairness and irrationality. Permission had been limited to declaratory relief, with an undertaking that sums due under the previous basis would be paid pending the outcome. The central issue was whether the Board had lawfully and fairly determined the levy without giving affected betting exchanges a proper opportunity to respond.

1. Outcome. The court declared that the claimant had no liability to pay sums under the 42nd scheme which would have been due under its provisions. The Board’s decision to adopt the scheme was made unlawfully and unfairly. The claimant’s undertaking to pay sums calculated under the 41st scheme remained binding. The claimant was awarded its costs on the standard basis. Permission to appeal was refused, with time extended to 15 October.
2. Duty to consult. Applying the contextual approach in R v Secretary of State for the Home Department, ex parte Doody [1994] 1 AC 531, fairness required consultation with persons liable to be adversely affected by a levy imposed by a statutory body. The Bookmakers’ Committee could perform that function for groups it represented, but neither the Committee nor the Board treated it as representing betting exchanges. The Board therefore had to consult them itself.
3. Requirements of consultation. The guidance in R v North and East Devon Health Authority, Ex p Coughlan [2000] 2 WLR 622 was not followed. The proposals were not supplied in their revised form, sufficient time was not given, the reasons and financial consequences were not adequately disclosed, and the claimant’s distinct position as a new entrant was not properly considered.
4. The Board’s minutes showed no adequate analysis of the statutory basis for charging successful layers, the difference between the aggregated profitable layers basis and the Customs and Excise basis, volatility, sabotage, competition, double counting, or the effect on viability. The Board was also given materially inaccurate information about the exchanges’ positions. The defects were not cured by the limited consultation that occurred.
5. The court rejected the separate allegation that the Committee’s motive was an improper attempt to alter the competitive balance. It did not determine the remaining substantive irrationality or EC Treaty issues, because the procedural unfairness was sufficient to dispose of the claim.