Nicholds & Ors v Security Industry Authority

A statutory power to publish licensing criteria may authorise an absolute rule debarring applicants convicted of specified serious offences. The usual principle against fettering a discretion does not require individual exceptions where Parliament has expressly conferred a rule-making power and exceptions would undermine a fundamental legislative aim.

Such criteria remain reviewable for want of statutory authority, irrationality and, where Convention rights are engaged, disproportionality. A specialist regulator receives an appropriate discretionary area of judgment on matters of social policy. Protecting the public and eliminating criminality from positions of trust may justify automatic debarment and the immediate application of higher standards without preserving permissions granted under earlier schemes.

Three experienced door supervisors sought judicial review of licensing criteria published by the Security Industry Authority under section 7 of the Private Security Industry Act 2001. Each had a relevant conviction which automatically prevented him from obtaining a licence for a prescribed period. Their statutory appeals had been dismissed because the magistrates’ court was required to apply the published criteria.

The claimants contended that section 7 did not authorise automatic debarment, that the criteria unlawfully fettered the Authority’s discretion, and that the loss of their permissions under earlier local schemes infringed Article 1 of Protocol 1 to the European Convention on Human Rights. The court therefore considered statutory purpose, the no-fetter principle, whether the former permissions were possessions, and proportionality.

1. The claim for judicial review was dismissed. Section 7 of the Private Security Industry Act 2001 authorised the Authority to make conviction and sentence for specified serious offences an automatic bar to a door-supervisor licence for a significant period. Public protection and the elimination of criminality were fundamental statutory aims. In that context, experience, testimonials and recognition under earlier schemes could not necessarily counterbalance a sufficiently grave conviction. The claimants’ submission that no offence could ever justify automatic debarment was unsustainable.
2. The general principle in British Oxygen Co Ltd v Minister of Technology [1971] AC 610 did not invalidate the criteria. Parliament had expressly conferred a rule-making power on the Authority. The criteria were consequently open to challenge for being outside the statutory purpose, irrational or disproportionate, rather than merely because they admitted no individual exception. An absolute policy may also be lawful in an exceptional statutory context where permitting exceptions would substantially undermine an important legislative objective.
3. The court expressed no concluded view on a narrower challenge directed to the inclusion of a particular offence whose circumstances might not indicate serious criminality. That argument had been expressly disavowed and the hypothetical issue did not arise.
4. For Article 1 of Protocol 1, the court considered that a non-marketable permission, not acquired at a market price and possessing no distinct monetary value, would ordinarily not be a possession. Strasbourg authority protects assets such as business goodwill, but not an uncapitalised expectation of future income. In view of the authorities concerning licences, however, the court assumed without deciding that the claimants’ former permissions were possessions. The criteria interfered with those assumed possessions by destroying their value.
5. The interference was proportionate. The Authority was a specialist regulator entrusted by Parliament with a matter of social policy and was entitled to an appropriate discretionary area of judgment. Automatic debarment for very serious offences rationally advanced public safety and public confidence. The Authority was also entitled to apply the new criminality standards to all applicants without preserving earlier permissions. Uniform application raised standards immediately and ensured equality of treatment.

• High Court (Administrative Court) — The applications for judicial review were dismissed: [2006] EWHC 1792 (Admin).
• Magistrates’ Court — The claimants’ appeals against refusal of their licences had been dismissed because the court was required to determine them in accordance with the Authority’s published criteria.