Rostron v Guildford Borough Council

A local authority fixing maximum hackney-carriage fares may pursue consumer protection while allowing drivers to cover reasonable operating costs and earn a reasonable wage. Where EU freedom of establishment is arguably engaged, the court must assess whether the measure has a real cross-border restrictive effect and, if so, whether it is proportionate.

The authority bears the evidential burden of justification. The court asks whether it may reasonably conclude from the evidence that the measure is suitable, necessary and preserves a fair balance. It does not improve the decision-making process by imposing an abstract level of “intense scrutiny” or “robust justification”. A reasonable methodology may use general cost data as a starting point, provided appropriate adjustments are considered.

The claimant, a hackney-carriage driver and secretary of the Guildford Hackney Association, challenged Guildford Borough Council’s 2016–2017 table of maximum fares. The new table reduced the fares previously chargeable.

The claim alleged improper purpose, material factual error, irrationality, disproportionality and failure to promote the purpose of section 65(1) of the Local Government (Miscellaneous Provisions) Act 1976. The claimant also argued that the fares constituted an unjustified restriction on freedom of establishment under article 49 TFEU. The central issues were the Council’s statutory purpose, the appropriate intensity and substance of review, the relevance of EU law, and whether the data used in the fare calculation were legally adequate.

1. Claim dismissed. The Council’s purpose was consumer protection: to ensure that fares were reasonable for the public while enabling drivers to cover operating costs and earn a wage. That was a purpose within section 65(1) of the Local Government (Miscellaneous Provisions) Act 1976.
2. Article 49 TFEU was considered. A maximum tariff may constitute a restriction if it makes access to the market by nationals of other member states less attractive. The assessment must be made without taking the alleged restriction itself into account. It was unnecessary to identify a particular EU national who wished to provide taxi services. Nevertheless, the claimant produced no evidence that the fares would have the required deterrent effect. The court therefore found no established restriction.
3. Assuming article 49 applied, consumer protection was a legitimate public-interest aim. The fare table was suitable for that aim. The relevant question was whether the selected fares went beyond what was necessary. Where an authority must select an amount, limit or threshold, the choice need not be shown to be the only conceivable option. It must be reasonable and preserve a fair balance between the public interest and the interests restricted.
4. The applicable evidential review was whether it might reasonably be concluded from the evidence submitted that the measure was appropriate and that its objective could not be attained by less restrictive means. That approach applied equally to consumer protection. The authority bore the burden, but did not have to prove positively that every alternative measure was unavailable.
5. On ordinary irrationality review, the court may examine the decision, the enquiries made, relevant considerations, factual inferences and reasons. The usefulness of describing review as “intense” or requiring “robust justification” depends on the statutory context, the nature of the alleged error, the evidence and the court’s competence. Such labels do not determine the result.
6. The Council reasonably used Automobile Association data as a starting point, with adjustments where appropriate. The error concerning the date of the AA data was immaterial. The treatment of depreciation, insurance and dead mileage was not irrational. The evidence did not show that the resulting fares were outside the range open to a reasonable authority or disproportionate.
7. The claimant had sufficient interest to challenge the validity of the fare decision generally. The court did not decide the separate standing and relief questions that would have arisen had the article 49 challenge succeeded.