Brooke Energy Ltd, R (On the Application Of) v Secretary of State for Business, Energy And Industrial Strategy

A duty to consult may arise from legitimate expectation where there has been a promise, an established practice, or, exceptionally, a failure to consult would cause conspicuous unfairness amounting to an abuse of power.

The exceptional category requires past conduct whose impact is pressing and focused on an identifiable person or group, giving substantial grounds to expect that the relevant policy will continue for a reasonable period. Establishing a voluntary government scheme, engaging with an affected business, or possessing information supplied by that business is insufficient. A judicial review challenge may also be academic where later legislation governs the claimant’s position and the claimant has no accrued entitlement.

The claimant operated biomass combined heat and power projects intended to qualify for support under the non-domestic Renewable Heat Incentive scheme. Regulations introduced a power-efficiency threshold for access to the higher biomass CHP tariff, first at 20 per cent, then temporarily at 10 per cent, before the relevant provisions were repealed and replaced by the Renewable Heat Incentive Scheme Regulations 2018.

The claimant challenged the 2017 Regulations, principally alleging procedural unfairness because the Secretary of State had failed to consult before making them. It relied on an alleged established practice of consultation and on the exceptional category of procedural legitimate expectation identified in R (Bhatt Murphy) v Independent Assessor [2008] EWCA Civ 755. The central issues were whether the challenge remained live, whether a duty to consult arose, and whether relief should be refused under section 31(2A) of the Senior Courts Act 1981.

1. The claim was dismissed. The challenge was academic. Until accreditation by Ofgem, the claimant had no entitlement to periodic support payments or to a particular tariff. The claimant’s plants had not been accredited when the Renewable Heat Incentive Scheme Regulations 2018 came into force. Regulation 68(1)(a) therefore governed any future entitlement and applied the 10 per cent threshold. Even if an accrued right existed, regulation 68(1)(a) clearly applied to installations whose tariff start dates preceded the 2018 Regulations.

2. The alleged established practice of consultation was not sufficiently clear, unequivocal, unconditional, settled or uniform. The Government had consulted on some changes to the scheme but not on others. No legitimate expectation arose on that basis.

3. The exceptional secondary category of procedural legitimate expectation requires conduct by the public authority having a pressing and focused impact on an identifiable person or group, ordinarily giving substantial grounds to expect that a policy will continue for a reasonable period. An abrupt change without consultation must otherwise be so unfair as to amount to an abuse of power. Central government ordinarily retains wide discretion to formulate and reformulate policy and to determine its procedures.

4. The claimant’s circumstances did not satisfy that test. The establishment of the voluntary RHI scheme was not sufficiently focused past conduct. Before accreditation there was no relevant relationship between the Department and a particular investor. Limited engagement with the claimant and use of information supplied by it did not create a duty to consult. The Department also had its own expertise, access to expert advisers, and responsibility to balance the interests of the industry as a whole.

5. In any event, under section 31(2A) of the Senior Courts Act 1981, relief would have been refused because it was highly likely that consultation would not have substantially altered the outcome. The later consultation considered lower thresholds, but the 10 per cent threshold was enacted regardless.

Lord Justice Flaux gave the substantive judgment. Mr Justice Holgate agreed.

The claim was brought directly for judicial review in the Administrative Court. Collins J initially stayed the claim pending a later consultation. Ouseley J subsequently lifted the stay, granted permission and gave directions for the substantive hearing.