DM Digital Television Ltd, R (On the Application Of) v The Office of Communications (Ofcom)

In assessing alleged bias in an administrative sanctions process, the court must consider all the circumstances and any admissible evidence of what occurred during the decision-maker’s deliberations. Actual bias is a question of fact. Apparent bias arises where a fair-minded and informed observer would conclude that there was a real possibility of improper influence. Administrative officers may assist a duly authorised panel, including by preparing materials and answering factual or legal questions, provided the panel makes the effective decision and does not merely rubber-stamp the preparatory work. A financial penalty is not equivalent to revocation merely because it may threaten a regulated business’s survival. The regulator may rely on the regulated party to provide evidence of special financial circumstances, particularly where that evidence is within its exclusive knowledge.

DM Digital Television Ltd challenged two financial penalties imposed by Ofcom for admitted breaches of the Broadcasting Code. The penalties were £85,000 for a programme said to encourage or incite crime or disorder and £20,000 for two programmes lacking due impartiality.

Permission was limited to whether Ofcom’s decision-making process was procedurally unfair and whether the penalties were irrational or disproportionate in light of the claimant’s financial position. The claimant argued that Ofcom executive officers who had assisted with the investigations remained with the panel during its deliberations and that the penalties effectively revoked its licence.

1. The claim was dismissed. The claimant failed to establish procedural unfairness, actual or apparent bias, irrationality or disproportionality.
2. Applying the guidance in Flaherty v National Greyhound Racing Club Ltd [2005] EWCA Civ 1117, the court distinguished actual bias, which is a question of fact, from apparent bias, assessed by asking whether a fair-minded and informed observer would conclude that there was a real possibility of improper influence. The court adopted the formulation in Porter v Magill [2002] 2 AC 357.
3. Ofcom’s executive officers were entitled to assist the panel by preparing material, suggesting questions and answering factual or legal questions. The evidence showed that no new evidence or points were introduced after the claimant left, that the officers were not prosecutors, and that the senior panel members made the decision independently. There was therefore no actual bias and no real possibility of apparent bias.
4. The court emphasised that admissible evidence about what actually occurred during deliberations must be considered when bias is alleged. The thoroughness of Ofcom’s final decisions provided further support for the conclusion that the panel had independently addressed the claimant’s representations.
5. The alternative argument on waiver or acquiescence did not arise. If it had arisen, the claimant’s informed and unequivocal failure to object to the known procedure would have amounted to agreement to that procedure. Such conduct could not, however, constitute acquiescence in actual bias.
6. The claimant accepted that the penalties would otherwise have been rational and proportionate. It was entitled to require the claimant to provide evidence of special financial circumstances relied upon to seek a reduction, especially because the relevant information was principally within the claimant’s knowledge. The evidence was incomplete and unreliable, and did not establish that the penalties would necessarily or probably cause the channel to close.
7. Ofcom had carried out a thorough proportionality assessment and was better placed than the court to evaluate deterrence in the broadcasting market. There was no inconsistency between refusing to revoke the licence and imposing substantial financial penalties: revocation ended the business immediately, whereas a penalty left open the possibility of obtaining finance and continuing operations. Ground 1 and Ground 2 were rejected.

First-instance judicial review claim. The judgment does not state any appeal or earlier judgment on the merits.