The United Policyholders Group and others v The Attorney General of Trinidad and Tobago

A substantive legitimate expectation does not make a public assurance immutable. The assurance must be clear, unambiguous and devoid of relevant qualification, and its enforcement cannot interfere with a statutory duty. Even where an expectation exists, the public authority may resile if it has rational and sufficiently weighty public-interest reasons, after giving proper consideration to the assurance and its effects.

The court assesses the departure when the authority decides and announces its change of policy, rather than when the replacement policy is finalised. Judicial review is especially restrained where the decision involves national economic policy, public expenditure and competing interests across society.

The appellants were resident holders of Executive Flexible Premium Annuity policies issued by CLICO. Following CLICO's financial collapse, the former government made assurances that policyholders' funds would be protected. A new administration subsequently adopted a restructuring scheme under which larger policyholders would not receive their contractual entitlements immediately and in full.

The High Court upheld the appellants' judicial review claim and ordered arrangements securing recovery of 100% of CLICO's contractual liability. The Court of Appeal allowed the government's appeal. In The United Policyholders Group and others v The Attorney General of Trinidad and Tobago [2016] UKPC 17, the Board considered whether the assurances created a legitimate expectation and, assuming they did, whether the government could lawfully resile from them.

1. Disposition. The Board unanimously dismissed the appeal and upheld the Court of Appeal's judgment. Lord Neuberger delivered the judgment with which Lord Mance, Lord Clarke, Lord Sumption and Lord Carnwath agreed.

2. A legitimate expectation based on a public statement ordinarily requires an assurance which is clear, unambiguous and devoid of relevant qualification, consistently with R v Inland Revenue Comrs, Ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545. It cannot be enforced so as to interfere with the authority's statutory duty. Circumstances may nevertheless justify departure where, after considering the expectation and all relevant matters, the authority could reasonably decide not to comply. The Board assumed without deciding that the assurances created the expectation alleged by the appellants.

3. The departure had to be assessed by September 2010. By then the new government had decided, announced and begun implementing its abandonment of the previous policy. The later finalisation and alteration of the replacement scheme did not allow the appellants to select September 2011 as the relevant date.

4. The Court of Appeal was entitled to reassess the justification. The High Court had failed to give proper weight to the effect of full payment on public services and government borrowing, the serious cash-flow consequences, and difficulties affecting the realisation of major CLICO assets.

5. The decision to depart from the assurances was rational. CLICO's position was reasonably understood to be worse than anticipated. Full compliance would have required very substantial public funding and affected national borrowing, economic recovery, international confidence and expenditure on public services. The government had also considered the assurances and their effect on those who had relied upon them. Courts should be especially diffident about interfering with judgments of national economic policy.

6. The statutory objections did not invalidate the policy. Although failure to make up a deficit in the fund was a breach of duty under section 37 of the Insurance Act, the longstanding breach did not invalidate the restructuring policy. Sections 44D and 44E of the Central Bank Act conferred powers wide enough to cover its implementation.

7. The Court of Appeal's procedural decision allowing withdrawal of the Attorney General's concession was within the bounds of reasonableness. The appellants suffered no relevant prejudice and had a full opportunity to present evidence and argument.

8. In a separate concurrence, Lord Carnwath favoured a narrow interpretation of the principle in R v North and East Devon Health Authority, Ex p Coughlan [2001] QB 213. A clear and unqualified promise to an identified person or group, made for the authority's purposes and acted upon, should be honoured unless proportionate public-interest reasons justify departure. Macro-economic and macro-political considerations are material to that proportionality assessment.

1. Privy Council: In The United Policyholders Group and others v The Attorney General of Trinidad and Tobago [2016] UKPC 17, the Board dismissed the policyholders' appeal and upheld the Court of Appeal's decision.

2. Court of Appeal of the Republic of Trinidad and Tobago: Archie CJ, Narine and Smith JJA allowed the government's appeal in a single judgment delivered by Narine JA on 23 June 2014.

3. High Court of Trinidad and Tobago: Charles J upheld the judicial review claim on 12 March 2013 and ordered arrangements securing recovery of 100% of CLICO's contractual liability to the appellants.