Sinclair Collis Ltd, R (on the application of) v Secretary of State for Health & Ors

A prohibition restricting free movement of goods must be appropriate and necessary for its legitimate objective, with disadvantages proportionate to that objective. Public health measures attract a broad margin of appreciation. Its breadth depends on the decision-maker, the decision and its consequences.

Proportionality review addresses the substantive justification for the measure. Failure expressly to consider a less onerous alternative does not itself invalidate a measure where the government reasonably considers that alternative less effective. The state bears the burden of justification, but challengers must substantiate an assertion that an alternative would achieve equivalent benefits.

Severe commercial losses and weaknesses in quantitative analysis do not necessarily invalidate a public health measure. A positive monetary cost-benefit calculation is not required.

Sinclair Collis Ltd operated tobacco vending machines. The National Association of Cigarette Machine Operators represented independent operators and supported the company's judicial review claim against the Secretary of State for Health. The challenged legislation authorised, and the Protection from Tobacco (Sales from Vending Machines) Regulations 2010 imposed, a complete prohibition on tobacco sales from vending machines from 1 October 2011.

The government had previously proposed statutory regulation using age restriction mechanisms. Parliament removed the power to regulate sales while retaining a discretionary power to prohibit them. The operators argued that the prohibition would destroy their businesses and restrict imports of machines from other member states. They maintained that a voluntary scheme using age restriction mechanisms would provide a less onerous alternative.

Sir Anthony May PQBD dismissed the claim in the Administrative Court: [2010] EWHC 3112 (Admin). The company and the association appealed separately. The central issues were the scope of the statutory power and whether the prohibition was proportionate under articles 34 and 36 TFEU and article 1 of the First Protocol to the European Convention on Human Rights.

1. The appeals were dismissed by a majority, Arden LJ and the Master of the Rolls, Laws LJ dissenting. The prohibition was lawful.

2. Section 3A of the Children and Young Persons (Protection from Tobacco) Act 1991 conferred a genuine discretion to prohibit tobacco sales from vending machines. It imposed no obligation to introduce a prohibition. It authorised neither a regulatory scheme requiring age restriction mechanisms nor a selective prohibition designed to achieve that scheme indirectly. Section 3A(6)(b) did not restore the regulatory power removed from the Bill. The Secretary of State could nevertheless postpone a prohibition while assessing a voluntary scheme.

3. A restriction engaging article 34 TFEU required justification under article 36. Proportionality required appropriateness, necessity, consideration of less onerous effective measures and a balance between disadvantages and the legitimate objective. Public health carried great weight. The breadth of the margin of appreciation depended on the circumstances, including the decision-maker and the nature, reasons and effects of the decision. Eastside Cheese and FEDESA applied.

   The majority differed over the precise intensity of review. Arden LJ applied the manifestly inappropriate standard to both Parliament and the Secretary of State. The Master of the Rolls regarded the Regulations as essentially executive legislation, attracting a relatively broad margin because of Parliamentary involvement, public health and complex assessments, but a narrower margin than primary or EU legislation.

4. The majority assessed substantive proportionality on the evidence before the court. Failure expressly to consider a voluntary scheme before making the Regulations did not itself establish disproportionality. The Secretary of State bore the burden of justification. Once the prohibition and the rejection of the suggested alternative were reasonably supported, the appellants had to substantiate their claim that the alternative would achieve equivalent benefits.

   The voluntary scheme could reasonably be regarded as less effective. It depended on human compliance, lacked regulatory sanctions, presented enforcement difficulties and would provide fewer benefits for adult smokers. The limited trials did not establish equivalent effectiveness. Rosengren was distinguished because an equally effective, less restrictive alternative had been established there.

5. The destruction of the operators' businesses and weaknesses in the impact assessment were substantial considerations. They did not, on these facts, overcome the broad margin afforded to public health policy. Proportionality required no positive monetary cost-benefit figure. The challenge based on continuing retail sales through shops also failed: prohibiting one form of sale while retaining age restrictions for others was permissible. Separate consideration of the Convention claim was unnecessary in these circumstances.

6. Laws LJ would have allowed the appeals. A broad margin could not dilute the necessity requirement. The Secretary of State had to consider the merits of age restriction mechanisms even though the enabling legislation did not authorise their compulsory introduction. In his view, failure to do so left the prohibition unjustified.

• Court of Appeal (Civil Division): Dismissed both appeals by a majority in [2011] EWCA Civ 437 , upholding the prohibition. Laws LJ dissented.
• High Court, Queen's Bench Division, Administrative Court: Sir Anthony May PQBD dismissed the judicial review claim on 1 December 2010: [2010] EWHC 3112 (Admin) .