R (Sinclair Collis Ltd) v Secretary of State for Health
| Jurisdiction | England & Wales |
| Judge | Lord Justice Laws,THE JUDGMENT BELOW,Lady Justice Arden |
| Judgment Date | 17 June 2011 |
| Neutral Citation | [2011] EWCA Civ 437 |
| Docket Number | Case No: C1/2011/0123 & C1/2010/2978 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 June 2011 |
[2011] EWCA Civ 437
Master of the Rolls
Lord Justice Laws
and
Lady Justice Arden
Case No: C1/2011/0123 & C1/2010/2978
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF
JUSTICE QUEEN'S BENCH DIVISION
(ADMINISTRATIVE COURT)
(The President of the Queen's Bench Division)
Ms Dinah Rose QC and Mr Brian Kennelly (instructed by Ashurst LLP) for the Claimant/1st Appellant
Mr Nicholas Paines QC and Mr Ian Rogers (instructed by the DWP/DH Legal Services, on behalf of the DWP & The Dept of Health) for the Defendant/Respondent
Mr Thomas De La Mare and Mr Iain Steele (instructed by Davies Arnold Cooper LLP) for the Interested Party (NACMO)/2nd Appellant
Hearing dates : 8 & 9 March 2011
Approved Judgment
Introduction
These are two appeals against the decision of Sir Anthony May PQBD given in the Administrative Court on 1 December 2010 ( [2010] EWHC Admin 3112). The appeals are respectively brought by the claimants in the proceedings, Sinclair Collis Ltd (to whom I will refer as the claimants), and by the National Association of Cigarette Machine Operators, who were joined as an interested party below and to whom I will refer by the acronym NACMO. The claimants and NACMO were both granted permission to appeal by Stanley Burnton LJ on consideration of the papers on 24 January 2011. Stanley Burnton LJ also ordered that the appeals be expedited.
By means of these judicial review proceedings the claimants (with NACMO's support) seek to impugn ss.22 and 23 of the Health Act 2009 ("the 2009 Act") and the Protection from Tobacco (Sales from Vending Machines) Regulations 2010 ("the Regulations") made under it, pursuant to which, if the judicial review does not prevail, the sale of tobacco from automatic vending machines will be altogether prohibited with effect from 1 October 2011. The essence of the challenge to the Act and Regulations is that they violate the principle of proportionality which the law requires to be respected because the measures' subject-matter engages Articles 34 and 36 of the Treaty on the Functioning of the European Union ("TFEU") and Article 1 of the First Protocol ("A1P1") to the European Convention on Human Rights and Fundamental Freedoms ("ECHR").
The President's judgment begins with an acknowledgement that it has been consistent government policy for a considerable number of years to adopt measures aimed at reducing the incidence of tobacco smoking. The detrimental effect of tobacco on health is well known and has been repeatedly stressed. The legislation under assault in these proceedings is in line with and intended to promote this well established policy, though as I shall show its particular focus is the subject of some controversy between the parties.
THE TOBACCO VENDING MACHINE INDUSTRY
At paragraphs 5 – 15 of his judgment the President gave a detailed account of the tobacco vending machine industry in the United Kingdom, taken from the extensive evidence before the court. What follows is a summary only. There are about 50,000 vending machines in the UK, dispensing about 1% of all tobacco sales. Many are in pubs and restaurants and the like. There some 550 people directly employed in the industry. The claimants own about 20,000 of the machines and employ 148 people, some redundancies having already been necessitated. The remaining machines are owned by independent operators, most of whom are represented by NACMO. NACMO is an unincorporated association formed in 1968. Of its 79 members some are very small, having fewer than 20 sites. The largest, Cherwell Tobacco Factors LLP, had machines at 3,481 sites at the time of the hearing before the President, though the number has since dropped to 3,292. It is to be noted that earlier anti-smoking measures have substantially reduced demand for cigarettes from vending machines. Sales have fallen by 80% (as I understand it since 2007, when the ban on smoking in public was introduced). More than 11,000 machines have been removed from sites belonging to the claimants' clients.
If the ban for which the Regulations provide comes into effect, all turnover arising from tobacco vending machines will be abruptly and entirely eliminated. The President (paragraph 15) dismissed the suggestion advanced by the Secretary of State that the machine operators might diversify their businesses. He also noted that in a Final Impact Assessment dated 27 January 2010, which was considered by the responsible Minister (the Minister for Public Health) before she made the Regulations and to which I shall have to return, there appeared a cost/benefit analysis which referred to an immediate one-off cost of £22m as being "the total value of UK cigarette vending machines". However, Miss Rose QC for the claimants submits that if the President considered that this reference indicated that in making the Regulations the Minister appreciated that the businesses could not diversify, he was in error: the contemporary documents tend to show that she believed diversification would be possible.
In the result, then, the ban will wipe out the tobacco vending machine industry. There will also be effects upon suppliers to the industry, including suppliers located in other Member States of the European Union, from which most, if not, all of the machines have been imported.
HISTORY OF THE LEGISLATION
On 31 May 2008 the then Secretary of State published a consultation paper entitled "Consultation on the Future of Tobacco Control". On 11 December 2008, after the end of the consultation period, the Minister signed an Impact Assessment whose focus was the use of cigarette vending machines by young people under 18. It stated that under-18s were uniquely vulnerable to the risks of tobacco smoking and that government intervention was necessary to prevent them buying tobacco products. As the President indicated (paragraph 22) three options were considered: (1) retaining the status quo, (2) introducing age restriction mechanisms onto all tobacco vending machines, or (3) prohibiting the sale of tobacco from vending machines. Three possible types of age restriction mechanism (to which for convenience I will refer hereafter as ARM) were examined: (a) electronic ID card age verification; (b) ID coin mechanisms, by which the purchaser would have to obtain an ID coin or token from a member of staff who would be required to verify the purchaser's age; and (c) remote radio control by which a member of staff would open the vending machine by remote control having verified the purchaser's age. As the President stated (paragraph 22):
"The preferred option was to introduce age restriction mechanisms. If, after this had been implemented for two years, clear and strong evidence showed that children were still buying cigarettes from vending machines, then there might be a prohibition. There followed a detailed cost/benefit analysis for each of the second and third options."
The President considered that there was a degree of artificiality (my words) in the cost/benefit analysis, expressed as it was in monetary terms, which was provided in the Assessment. At paragraph 23 he stated that "ascribing a money value to some of the benefits at least is a difficult concept". At paragraph 24 he describes in detail the monetary calculation of benefits ascribed to the second option, that is the adoption of ARM. At paragraph 25 he expresses his scepticism at this enterprise and gives forceful reasons for it. At paragraph 27 he observed that it was noted in the December 2008 Impact Assessment that option 3 – the outright ban – might reduce adult cigarette smoking as well as child consumption "because it would make cigarettes slightly more difficult to acquire".
The claimants and NACMO supported option 2: ARM. The industry expended considerable resources on the development of radio frequency control mechanisms as a means of putting ARM into effect. The technology was tested by means of trial purchases conducted by a company recommended to NACMO by the Secretary of State, and a success rate of 80% (therefore, of course, a failure rate of 20%) was recorded. It is in use at over 600 sites in the United Kingdom.
That is the background against which clause 20 of the Health Bill 2009 ("the Bill") was introduced in the House of Lords on 16 January 2009. The clause would have amended the Children and Young Persons (Protection from Tobacco) Act 1991 ("the 1991 Act") by inserting a new section 3A which would provide in part as follows:
"(1) The appropriate national authority may by regulations make provision prohibiting or imposing requirements in relation to the sale of tobacco from an automatic machine in England and Wales."
Clause 21 of the Bill made like provision for Northern Ireland.
Plainly the terms of s.3A(1) would allow the appropriate national authority (the Secretary of State) to impose the ban – option 3 ("prohibiting") or to require ARM – option 2 ("imposing requirements"); or to do nothing (option 1). In October 2009 the Secretary of State issued draft regulations, prospectively to be made under the new s.3A, together with a Consultation Paper, to which responses were invited by 4 January 2010. A further Impact Assessment was published at the same time. It recorded the Minister's view that, at least for an initial two-year period, the...
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