LPHCA Ltd t/a Licensed Private Car Hire Association v Transport for London
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ouseley |
| Judgment Date | 30 May 2018 |
| Neutral Citation | [2018] EWHC 1274 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 30 May 2018 |
| Docket Number | Case No: CO/5176/2017 |
[2018] EWHC 1274 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Ouseley
Case No: CO/5176/2017
Mr David Matthias QC (instructed by BLUE TRINITY LEGAL) for the Claimant
Mr Timothy Straker QC (instructed by TRANSPORT FOR LONDON) for the Defendant
Hearing date: 25 April 2018
HTML VERSION OF JUDGMENT APPROVED
Transport for London, TfL, is the Greater London licensing authority for hackney carriages, usually called taxis or black cabs, and their drivers, and for private hire cars, licensing their operators, drivers and vehicles. It charges fees for the application and grant of each of those five different forms of licence. TfL decided in August 2016 that it needed to employ 250 compliance officers for its compliance and enforcement work in relation to those licensable activities, making a total of 332 compliance officers, plus the existing 50 support staff. This increase in staff numbers had to be paid for out of the fees charged for the licences. At the same time, the existing fee structure for private hire operators' licences was to be re-examined. In April – June 2017, TfL carried out a consultation on those fee changes so far as they affected private hire operators. This was the only group of licensees significantly affected by the changes.
The Claimant, the Licensed Private Hire Car Association Ltd, is a national association of private hire car operators, with some 200 members. In London there are some 2400 such operators. It responded to the consultation, complaining about the lack of financial information made available, and objecting to the changes. On 18 September 2017, the Finance Committee of TfL decided to make changes to the fee structure for private hire operator licensing, with some amendments to those originally put forward in the consultation. That decision was given effect through the Private Hire Vehicles (London) (Operators' Licences) (Amendment) (No.2) Regulations 2017, the Regulations.
The Claimant challenges the decision and the Regulations on two bases: (1) the consultation process was unlawful because TfL failed to provide adequate information to permit of an informed response on the financial basis for the changes; whether the information was adequate or not rather depends, as the arguments evolved, on what the true scope of the consultation was; (2) the apportionment of additional costs to private hire operators, rather than more to taxis, and to private hire drivers and vehicles, was unlawful because it involved a cross-subsidy from private operators to other licensees; the issue was whether such a cross-subsidy in fact was created. It was not at issue but that a cross-subsidy would have been unlawful.
Permission was granted to argue those two points by Dingemans J at an oral hearing. He refused permission to argue other grounds of challenge to the consultation process such as inadequacy of time and inadequate consideration of the responses, and to the changes to the fee structure, notably bias and irrationality.
Legislative background
The main legislation is the Private Hire Vehicles (London) Act 1988. Ss 1,2 and 3 deal with the requirement to hold an operator's licence, and the application for such a licence. An operator's licence is required for inviting or accepting private hire bookings. An operating centre is required. The licence may be granted subject to prescribed conditions and to others which the licensing authority thinks fit. The operator must be a fit and proper person to hold such a licence; s3( 3). S4 sets out the obligations on a private hire operator; chiefly, any vehicle provided by him for a private hire booking must be a vehicle in respect of which a London PHV licence is in force, and must be driven by someone who holds a London PHV driver's licence, or cab driver's licence. The other obligations, as Mr Matthias QC for the Claimant pointed out, are obligations which are fulfilled at the operating centre, rather than on the street: display of the operator's licence, keeping records of bookings with the required particulars, and records of the vehicles and drivers available to the operator. The drivers are usually self-employed, and are allotted jobs by operators for whom they work. Ss 8, 12 and 13 provide for the licences for private hire vehicles and private hire drivers. Licences can be suspended or revoked if, for example, the authority ceases to be satisfied that the operator is a fit and proper person to hold such a licence; s16.
There are therefore three forms of licence in the private vehicle hire licence system. For each form of licence, by s20, TfL “may by regulations provide for prescribed fees to be payable (a) by an applicant for a licence…;(b) by a person granted a licence….” S32 permits regulations to be made for the purpose of prescribing anything which is to be prescribed, and may make different provision for different cases. This language is different from that to be found in the Town Police Clauses Act 1847, as supplemented by the Local Government (Miscellaneous Provisions) Act 1976, governing licensing for hackney carriages and private hire vehicles outside Greater London. This refers to charging such fees as the licensing authority considers reasonable to recover the costs of issuing and administering the system, which includes the control and supervision of hackney carriages and private hire vehicles. But the Parliamentary intention is the same, neither broader nor narrower.
The main Regulations are the Private Hire Vehicles (London) (Operator's Licences) Regulations 2000, which the 2017 Regulations at issue amended. They give no indication as to the basis upon which fees are to be calculated.
There is no statutory provision for any consultation about fee levels or fee changes, let alone about the budgetary process or financial assessments which may underlie them.
I also need to mention the two other licensing strands, for which fees may also be charged. These are for the licensing of black cab or taxi drivers and of their vehicles, hackney carriages. The relevant powers are in the Metropolitan Public Carriage Act 1869, and its amendments.
Their licensing is relevant because the licensing, compliance and enforcement tasks and costs for black cabs and private hire vehicles overlap to a very large extent, and form part of the argument about cross-subsidy. The Claimant is concerned that, as well as private hire drivers and vehicles, the black cabs and their drivers are being subsidised by the effect of the increases in private hire operator licensing fees.
As I have said, it was not at issue but that the fees charged for operator's licences could not lawfully include any element of cross-subsidy whether for private hire vehicles or their drivers, or for black cabs or their drivers. The same principle applied across the five strands of fees; it was not peculiar to operators' licence fees. I regard that as correct, though the case law is quite thin.
Plain it is that fees can cover more than the costs of the administrative process in considering and issuing licences; see R (Hemming) t/a Simply Pleasure Ltd v Westminster City Council [2015] UKSC 25, in the context of sex shop licensing, where the statute required the applicant for a licence to “pay a reasonable sum determined by the appropriate authority”, which permitted fees to be set at a level to cover the running and enforcement costs of the licensing scheme. The different language in this case plainly still permits fees to be set at a level to cover the running and enforcement costs of the licensing scheme. Equally plain it is that there is no power to prescribe the level of fees in order to exploit the market; see R v Manchester City Council ex parte King (1991) 89 LGR 696 D Ct; the power to charge fees for street trader licences was “such fees as [the district council] consider reasonable for the grant or renewal of a street trading licence.” This covered the total costs of operating the scheme, including enforcement and prosecution. But it did not permit the council to charge fees by reference to what it thought the market would bear.
The agreement that fees from one taxi or private hire licensing strand cannot be used to subsidise the level of fees on another of the five strands is reflected in a considered concession by leading counsel, accepted by Hickinbottom J in R (Cummings) v Cardiff City Council [2014] EWHC 2544 (Admin) at [7].
In my judgment, there is no power to use the fee charging provision in order to act as a market regulator. A cross-subsidy would be a form of market regulation, which the licensing system cannot be used to achieve, in the absence of an express power. There is no power to refuse a licence because an authority might wish to encourage black cabs over private hire or vice versa, or because there were so many drivers and vehicles that fewer made a living than was thought desirable. The fee structure cannot be used to the same end, as between black cabs and private hire.
Nor can the licensing system be used to raise revenue from one strand of private hire licences to favour another strand of private hire licences, say, to favour drivers over operators: it would be unlawful to structure licence fees on the basis that all the costs of enforcement should be borne by operators and not by drivers, for whatever reason, or to appeal to some imagined public sentiment about who should pay. And by the same logic, the simple words of the Act mean that the contribution of the operators of varying sizes must equally avoid cross-subsidy from the larger ones to the smaller ones or vice versa. The fee contribution to the...
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