Salman, R (on the application of) v London Borough of Barking & Dagenham

Where a public authority has made a clear representation about financial support and possesses a lawful power to provide assistance, it must exercise that power fairly and reasonably. The decision-maker must take account of the representation, when it was made, the claimant’s actions in reliance on it, and the realistic alternatives available. A claimant should not be criticised for failing to mitigate the consequences of an official error unless that issue has been raised promptly and the claimant has had a fair opportunity to respond. The same considerations apply where the claim is framed as legitimate expectation: the expectation must be fully considered, and the promise should ordinarily be honoured unless there are good reasons not to do so.

The claimant chose a four-year osteopathy course after an officer of the defendant local authority represented that the authority would fund the fees, subject to a contribution. The officer later acknowledged that the advice was mistaken. The authority offered to pay the first year’s fees and compensation, but reduced the offer by relying on the claimant’s alleged failure to mitigate her loss by seeking alternative admission.

The claimant sought judicial review on legitimate-expectation grounds. By the hearing, the educational institution had become publicly funded and the principal dispute concerned costs. The central issue was whether the authority had acted lawfully in making its offer on the stated mitigation basis.

1. The decision was unlawful. The authority’s decision of 12 February 2004 had to be reconsidered and retaken. The claimant was entitled to bring proceedings while the position concerning future fees remained unresolved.
2. The authority had no power to make the payment under the educational-support regulations, but it had a residual power under section 2 of the Local Governments Act 2000. The existence of that power meant that the case could be analysed either as one concerning legitimate expectation or as one concerning the lawful exercise of the statutory discretion.
3. In exercising the section 2 discretion, the authority had to consider what the claimant had been told, when she had been told it, the action taken in reliance on it, and the possibilities realistically open to her. The decision also had to deal with her fairly and reasonably. The same requirement applied to legitimate expectation: the expectation had to be fully taken into account, and the promise should ordinarily be kept unless there were good reasons not to do so.
4. The authority had relied on the propositions that the claimant could have obtained alternative admission and had a duty to mitigate the financial consequences. Those matters had not been raised with her while the authority’s decision remained pending. Fairness required the authority to put them to her and give her an opportunity to explain the consequences before relying on them.
5. The court did not decide that the offer of £1,000 for inconvenience was inadequate, or that a larger payment necessarily had to be made. The defect lay in the unfair basis on which the decision had been reached. The claimant was awarded her costs, subject to summary assessment if not agreed, with liberty to apply.