Easyjet Airline Company Ltd v The Civil Aviation Authority

A statutory regulator with an investigative and public-interest role has wide discretion as to how it obtains information and conducts consultation. The procedure must nevertheless be fair to persons materially affected by the decision. Fairness is assessed in the circumstances and does not automatically require disclosure of every representation or a continuing adversarial process.

Where legislation requires a regulator to have regard to recommendations, there is no presumption that they must be followed. The regulator must give sufficient reasons explaining why an alternative is preferred. A procedural irregularity does not invalidate the decision where the statutory saving provision applies, but it cannot cure a final decision reached unfairly and causing prejudice.

easyJet challenged the Civil Aviation Authority’s decision fixing maximum airport charges for Gatwick during the fifth five-year price-control period. The challenge concerned increased security costs, the CAA’s treatment of Competition Commission recommendations on construction-price inflation, business rates and pension costs, and the fairness of obtaining further information from Gatwick Airport Limited after the stated consultation deadline.

The CAA argued that its statutory role was investigative rather than adversarial and that it had received extensive representations before making its decision. The central issues were whether the CAA had acted unfairly, failed to have proper regard to the Competition Commission’s recommendations, or acted unlawfully by relying on post-deadline information.

1. Statutory role and fairness. The CAA’s task under the Airports Act 1986 was to determine the appropriate charge cap in the public interest, having regard to users, efficient operation, investment and minimum restrictions. It was not an adjudicator deciding a dispute between rival parties. It had a wide discretion to investigate and obtain information. That discretion was subject to a duty not to act clearly unfairly toward a person affected by the decision.
2. Nature of the required procedure. Fairness depended on the circumstances. The CAA was not generally required to disclose every representation made by one interested person to another. However, where it adopted a process of constructive engagement on which affected parties relied, it could not simply revert to a less open process without warning. The court nevertheless had to consider whether the process had caused actual prejudice.
3. Competition Commission recommendations. Section 46(4) required the CAA to have regard to the Competition Commission’s recommendations, but created no presumption that they had to be followed. If the CAA chose a different solution, it had to explain why that solution was preferred. Its reasons were lawful if they were adequate and not irrational or otherwise vulnerable on Wednesbury grounds. The reasons given for the decisions on construction-price inflation, business rates and pension costs were adequate.
4. Security costs. The CAA was entitled to obtain further information and models from Gatwick Airport Limited after 31 January 2008 because it considered that it lacked information necessary to determine the public-interest charge cap. The airlines had received substantial opportunities to make representations, had acted collectively through British Airways, and had identified their objections. There was no sufficient evidence that further disclosure would have produced different representations or affected the result.
5. Procedural irregularity. Regulation 18 of the Civil Aviation Authority (Economic Regulation of Airports) Regulations 1986 could cure procedural errors before the final decision, but could not prevent relief where the final decision was tainted by unfairness and prejudice. No such unfairness or prejudice was established here. The claim was dismissed.