In what is rapidly turning into an unintended mini-series, the theme of this blog is again subsidy control reviews under s. 70 of the Subsidy Control Act 2022 (SCA) (see previous posts here and here). This post deals with some unusual features of s. 70, which will throw up tricky threshold questions for many appellants, including what to challenge and where to issue.
Section 70(1)-(2) provides:
“(1) An interested party who is aggrieved by the making of a subsidy decision may apply to the Competition Appeal Tribunal for a review of the decision.
(2) Where an application for a review of a subsidy decision relates to a subsidy given under a subsidy scheme, the application must be made for a review of the decision to make the subsidy scheme (and may not be made in respect of a decision to give a subsidy under that scheme).”
A challenge can therefore only be brought against a subsidy decision or, where such a decision is made under a subsidy scheme, to the scheme itself. These provisions give rise to a number of questions.
First, is there any magic in the word “decision”? The President of the CAT thinks that there might be. In the first review under s. 70 to be brought in the CAT – The Durham Company Limited v Durham County Council – Sir Marcus Smith indicated in a CMC that the inclusion of the word might signify that a review under s. 70 can only be of a positive subsidy decision – and that a review might not lie in respect of a public authority’s modus operandi or way of conducting itself which, without any identifiable decision, confers a benefit on a particular party.
This is a live issue in the Durham case and one which the President has already ear-marked for the Court of Appeal. Learned views on this issue from both the CAT and the appellate court are therefore likely to be forthcoming – but, at first glance, a public lawyer might argue that the term “decision” should not bear a narrow meaning. In judicial review proceedings, the concept of a “decision” is a flexible one; omissions and courses of conduct are perfectly proper targets for challenge. The analogy should not be a sterile one: under s. 70(5) of the SCA, the CAT must determine reviews by applying the same principles as would be applied by the High Court in judicial review.
Second, s. 70 is clear that, where a decision is made under a scheme, the challenge must be to the scheme itself and not the decision. Section 70 thereby follows the general logic of the SCA, which sets out the lawful requirements applicable to subsidy decisions and subsidy schemes but not to subsidy decisions made under subsidy schemes (see e.g. ss. 12(2) and 30).
This creates a problem, however. Many subsidies will be granted pursuant to schemes. An appellant is unlikely to want to challenge a scheme until they have suffered an adverse decision under it. But by the time that has happened, the scheme may be months or years old. And s. 71 of the SCA creates a strict limitation period of one month for bringing reviews under s. 70, generally from the date the appellant knew or ought to have known of the scheme, which can only be extended exceptionally. In other words, by the time many appellants have been touched in a real sense by a subsidy scheme, they will be out of time to challenge it.
What is an appellant in this situation to do? Bring a challenge in the CAT anyway and try to argue that time should be extended or that, as a matter of construction, challenges to subsidy schemes can be brought within a month of a decision made under them? Both arguments seem ambitious given the wording of the statute. BEIS (as it was) has issued statutory guidance on the subsidy control regime which suggests that, in such cases, the proper course may be to bring a judicial review of the subsidy decision in the Administrative Court (§13.14). But it seems odd that the UK’s shiny new CAT-led regime should leave the High Court with a potentially very extensive residual jurisdiction over subsidy matters.
The difficulties do not stop there. The statutory guidance also suggests that, where a subsidy does not “genuinely fall within the terms of the scheme”, it should be treated as an independent subsidy decision and challenged in the CAT as such. One can imagine that whether a subsidy genuinely falls within the terms of a scheme will be a disputed issue in many reviews. If the answer is no, the appellant will be in the right venue and have no problem. But if the answer is yes, the respondent will be able to say that the challenge should have been brought against the scheme itself and is now (in the CAT at least) out of time.
Until wiser heads turn themselves to such conundrums, the safest course for some appellants may be to duck them by issuing protectively in both the CAT and the Administrative Court. Appellants may further wish to take the procedurally neat step of proposing that the Tribunal Chair should sit as a judge of the High Court and, together with the ordinary members, as the CAT at the same time (as the President did in Bayerische Motoren Werke AG v CMA [2023] CAT 7). This should allow appellants to get on with the substance and leave jurisdictional headaches to the Court.
