R (The Good Law Project) v Electoral Commission
| Jurisdiction | England & Wales |
| Judge | Lord Justice Leggatt,Mr Justice Holgate |
| Judgment Date | 23 March 2018 |
| Neutral Citation | [2018] EWHC 602 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 23 March 2018 |
| Docket Number | Case No: CO/4908/2017 |
[2018] EWHC 602 (Admin)
IN THE HIGH COURT OF JUSTICE
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Leggatt
and
Mr Justice Holgate
Case No: CO/4908/2017
and
Jessica Simor QC and Tom Cleaver (instructed by Deighton Pierce Glynn) for the Claimant
Richard Gordon QC (instructed by the Government Legal Department) for the Defendant
Timothy Straker QC and Mr James Tumbridge (instructed by Venner Shipley) for the First Interested Party
Hearing date: 15 March 2018
Judgment Approved
Lord Justice Leggatt and
The claimant in this case is an interest group which seeks judicial review of alleged failure of the Electoral Commission properly to discharge its responsibility to oversee spending of Vote Leave Limited and certain other campaigners in the period leading up to the referendum held in June 2016 on whether or not the UK should remain a member of the European Union. Permission to proceed with the claim was refused when the claim was considered on the papers but the request for permission has been renewed at an oral hearing. These are our reasons, following that hearing, for granting permission to proceed with part of the claim.
The applicable legislation
The law governing the conduct of the 2016 referendum is contained in the Political Parties, Elections and Referendums Act 2000 (“PPERA”) as modified by the European Union Referendum Act 2015 (“EURA”).
That legislation imposed restrictions on the persons and organisations who were permitted to incur expenses in campaigning for a particular outcome of the referendum and on the level of expenses which they were permitted to incur. In particular, no individual or body was permitted to incur “referendum expenses” of more than £10,000 during the “referendum period”, unless they became a “permitted participant” (section 117(1) of PPERA). We will return later to the definition of “referendum expenses” which is at the heart of the main issue raised by the claim. The “referendum period” ended on the date of the referendum, 23 June 2016 (para 1 of Schedule 1 to EURA). Pursuant to section 108 of PPERA, one organisation campaigning for each outcome of the referendum was designated as the official campaign organisation. In the case of those campaigning in favour of leaving the European Union, that organisation was Vote Leave Limited. The designated organisation received some financial assistance out of public funds and was permitted to incur referendum expenses during the referendum period up to a limit of £7 million; for other permitted participants, the limit was £700,000 (section 118(1) and Schedule 14 of PPERA, as amended by Schedule 1, para 25(2) of EURA). Incurring any referendum expenses during the referendum period in excess of the relevant limit may give rise to a criminal offence (section 118(2) to (3) of PPERA).
The legislation also imposed restrictions on donations to permitted participants (section 119 and Schedule 15 of PPERA).
Where any referendum expenses are incurred by or on behalf of a permitted participant during any referendum period, sections 120 and 122 of PPERA require the “responsible person” to make and deliver to the Commission within six months after the end of the period a return in respect of such referendum expenses. Amongst other matters, this return must contain (i) a statement of all payments made in respect of referendum expenses incurred by or on behalf of the permitted participant during the referendum period and (ii) a statement of relevant donations received in respect of the referendum (section 120(2) and paras 9 to 11 of Schedule 15). Failure to comply with these requirements may give rise to a criminal offence (section 122(4)).
Factual background
The focus of this claim is a series of transactions involving Vote Leave, Mr Darren Grimes (a permitted participant who was also campaigning for a leave outcome), Veterans for Britain (another permitted participant campaigning for a leave outcome) and AggregateIQ Data Services Limited (“AIQ”). AIQ is a firm which specialises in online advertising.
The following brief summary of the transactions is derived from an “Assessment Review” published by the Electoral Commission on 20 November 2017. This summary should not be taken to make any finding about the nature of the relevant transactions.
Vote Leave reported receiving a £1 million donation on 13 June 2016. When calculating its financial position on 9 June 2016, Vote Leave had determined that this donation, when received, could not be spent without taking Vote Leave above its £7 million spending limit for the referendum campaign by more than £500,000.
At some time between 7 and 12 June 2016 Vote Leave indicated to Mr Grimes that it might donate funds to him. On 13 June 2016 Mr Grimes responded to the offer of a donation by telling Vote Leave that he would like to work with AIQ and asked for the donation to be paid directly to AIQ.
On 14 June 2016 Vote Leave advised Mr Grimes by email that it had decided to donate £400,000 to him and asked where the funds should go. Mr Grimes provided details of his AIQ reference and account number, to which the funds were remitted by Vote Leave.
Vote Leave offered Mr Grimes another donation on 17 June 2016 and he asked for this to be paid to AIQ. An amount of £40,000 was paid by Vote Leave to AIQ on 20 June 2016.
On 21 June 2016 Vote Leave offered a further donation of £181,000 to Mr Grimes. He responded confirming that he would be able to use the funds and asking for £180,000 to be transferred to AIQ and £1,000 to his account for travel expenses.
Invoices for the work done by AIQ in return for these payments were rendered by AIQ to Mr Grimes. The payments made by Vote Leave to AIQ were included in the return made by Mr Grimes both as donations received by him and as payments made in respect of referendum expenses incurred by him or on his behalf. The payments were not included in the return made by Vote Leave in respect of its referendum expenses.
In February and March 2017 the Electoral Commission conducted assessments of the campaign spending returns of Vote Leave and of Mr Grimes which included consideration of their spending in connection with services provided by AIQ. Those assessments concluded that there were no reasonable grounds to suspect that there had been any incorrect reporting of campaign spending or donations.
The present proceedings
This claim for judicial review was begun on 24 October 2017. Four grounds have been put forward, which we will consider in more detail shortly. In overview, the first two grounds allege that, in assessing the transactions involving Vote Leave, Mr Grimes and AIQ, the Electoral Commission has misinterpreted the relevant statutory provisions and has therefore failed to apply the law correctly. The third ground alleges that the Electoral Commission gave incorrect advice to Vote Leave during the referendum campaign. The fourth ground alleges that it was irrational for the Electoral Commission to conclude when it carried out its assessments that there were no reasonable grounds to suspect any breach of the relevant spending restrictions and on that basis not to open an investigation.
On 20 November 2017 the Electoral Commission filed summary grounds for contesting the claim. In those grounds the Commission submitted that the claim has no legal merit but nevertheless stated that it had now decided to undertake an investigation into whether offences under PPERA were committed. This decision was said to have been prompted by “further information which has come to light” since the original decision was taken.
On the same day the Commission published the Assessment Review already mentioned. This explained that the Commission had undertaken a review of the assessments conducted in February and March 2017 into the potential incorrect reporting of joint referendum spending by Vote Leave and Mr Grimes. The review stated that, since those assessments were undertaken, further information had come to light. This was said to include the fact that Veterans for Britain also reported a donation of £100,000 from Vote Leave which was made on or around 29 June 2016 and paid by Vote Leave directly to AIQ. The review concluded (at para 31):
“The possible inferences set out above raise a reasonable suspicion that a common plan or arrangement may have been in place between Vote Leave and one or both other campaigners, Mr Grimes and Veterans for Britain. If this was the case then the amounts reported as donations should have been reported as spending by Vote Leave, as designated leave campaigner, irrespective of whether they were donated to Mr Grimes and Veterans for Britain. Alternatively, it is possible that some or all of these payments may in fact have amounted to referendum expenses incurred by Vote Leave, and were reportable as such.”
The Commission also stated that it is satisfied that it is in the public interest to investigate these matters and that its Head of Regulation has therefore authorised the opening of an investigation.
On 17 January 2018 Mrs Justice Lang refused permission to proceed with the claim following consideration of the papers. Her principal reasons were:
“The claim has been overtaken by events as the [Commission] decided on 20 November 2017 to undertake an investigation into potential improper referendum spending by Vote Leave. Thus the [Commission]'s original decision, which formed the basis of the claim for judicial review, will be superseded. Although there remains a dispute between the parties as to the operation of the statutory scheme, and the claimant's analysis is arguable, this...
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