JC & Ors v R.

A State aid challenge fails where the alleged beneficiaries and comparators are not in comparable factual and legal positions. Separate regulatory regimes may lawfully apply to distinct categories of fishing vessel, particularly where European Union legislation contemplates those differences and the national authority has discretion over quota allocation.

State aid also requires a sufficiently direct connection between the alleged advantage and a reduction in State resources, or a sufficiently concrete economic risk to the State budget. A regulatory scheme does not create such aid merely because one class has greater flexibility to comply with quota limits while prosecution remains available for deliberate overfishing.

The appellants owned fishing vessels of 10 metres or less. They were prosecuted for landing fish in excess of monthly limits imposed as conditions of licences granted under the Sea Fish (Conservation) Act 1967.

At a preparatory hearing, His Honour Judge David Turner QC in the Crown Court at Chelmsford rejected their contention that the quota conditions were unlawful under EU law and declined to stay the prosecutions. The appellants appealed.

Although the proceedings below had also raised unequal treatment, that ground was not pursued. The appeal concerned whether quota arrangements for over-10-metre producer-organisation vessels conferred unlawful State aid when compared with the centrally managed quota regime for under-10-metre vessels.

1. The appeals were dismissed. The Court also declined to refer questions to the Court of Justice.
2. The appellants were bound by the concession made below and by the case there advanced. They could not recast the appeal, without proper notice, as a distinct contention that the free historic allocation of tradable fixed quota allocations itself constituted State aid.
3. For State aid, every required element must be established, including a selective advantage. Selectivity requires a measure to favour some undertakings over others in a comparable factual and legal position. The unchallenged finding that producer-organisation vessels over 10 metres and under-10-metre vessels were not comparable was therefore fatal to the appeal. The categories operated under materially different regimes, some differences being contemplated by EU legislation, and the national allocation decision lay within the discretion recognised by Council Regulation 2371/2002/EC, Article 20.3.
4. The Court also upheld the judge’s conclusion that there was no sufficiently direct connection between the quota arrangements and a loss of State resources. Producer organisations could impose internal penalties, but State prosecution remained available for deliberate overfishing. A member could not simply purchase quota at the end of a period to extinguish a liability to a fine. The emissions-allowance authority relied on by the appellants was materially different.
5. These further observations were not necessary to the dispositive conclusion on selectivity, but confirmed that the State-aid argument faced substantial additional obstacles.

• Court of Appeal (Criminal Division). The appeals against the refusal of a stay were dismissed and a reference to the Court of Justice was declined: [2015] EWCA Crim 210.
• Crown Court at Chelmsford. At a preparatory hearing, His Honour Judge David Turner QC ruled on 20 March 2014 that the quota conditions were not unlawful under EU law and declined to stay the prosecutions.