Taking Vince Cable off the BSkyB case

by Carl Gardner on December 21, 2010

Vince Cable has not resigned over his reported remark that he’d “declared war on Rupert Murdoch” – but the Culture Secretary Jeremy Hunt will make any further decision on the proposed News Corporation takeover of BSkyB instead of him. There are a number of legal points to be made about this.

First, there’s no constitutional problem about transferring the decision to Jeremy Hunt. As the recently published draft Cabinet manual says (para. 100), powers legally vested in “the Secretary of State” can be exercised by any Secretary of State. That’s partly because the Secretary of State is a single office in law, which a number of people happen to be appointed to at any time, and partly because of the definition of “Secretary of State” in the Interpretation Act 1978.

But did Cable have to be taken off the case? I don’t think so, legally. Obviously for Cable to have been recorded making these remarks is embarrassing, and it would have meant News Corp. could have argued Cable’s decision was unlawful because of bias, if he had gone on to block its bid. It’s difficult to imagine there wouldn’t have been a judicial review claim based on what he said. But there might have been a judicial review anyway; and even with these remarks I think a decision by Vince Cable could successfully have been defended.

The legal question, according to the leading House of Lords case of Magill v Weeks (often referred to as Porter v Magill) is (see Lord Hope’s speech at paras. 99-103)

whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the [decision maker] was biased.

At first blush you might think it obvious there’s bias applying these words. I’m not so sure. First, in that case the House of Lords in fact found no bias even though before the district auditor had made a final decision on Dame Shirley Porter (see Lord Hope’s speech, para. 96)

A televised announcement was arranged at which the auditor himself appeared and, although he said that his views were provisional, he expressed them in florid language and supported them by reference to the thoroughness of the investigation which he claimed to have carried out.

Second, I agree with James Maurici‘s critical comment on the case in this excellent 2007 paper for the Constitutional and Administrative Law Bar Association in which he argues that Porter v Magill has confused what was previously a clear distinction in case law between predetermination cases like Vince Cable’s, in which the alleged bias arise from views expressed in advance, and other types of bias, and suggests the House of Lords (now the Supreme Court of course) needs to revisit the issue. He summarises his view of the law as follows (page 8):

Non-judicial decision-makers are entitled to have predispositions – they are entitled to express them – and in strong terms. So long as they don’t come to a decision with an entirely closed mind there is no objection to this.

I agree, and I think Vince Cable fell squarely within this.

I also agree with Karen Steyn‘s admirably clear analysis in her more recent paper discussing the law of bias and predetermination as it applies to councillors. She, like James Maurici, stresses the pragmatic approach taken by the courts to predetermination cases since 2005, and says (para. 19)

Elected members are entitled to have, and to have expressed, views on controversial local matters. They are entitled to be pre-disposed to certain views: the requirement is to have an open mind – not an empty one.

In her view the key is whether the decision-maker has closed his mind during the decision-making process itself, and she sees this as a hard test to satisfy. She concludes (para. 33)

A decision will only be vitiated if one or more members refused – or there is positive evidence establishing a real possibility that they refused – to even to consider a relevant new argument.

I’m far from sure Vince Cable’s remarks, which can be understood as a joking reference to horrified reactions to his intervention, meet that test. I think a subsequent decision made by him could be successfully defended in law, and that taking him off the case reflects political embarrassment more than it does legal necessity.

By the way, I don’t think a higher standard applies to Vince Cable because his decision is “quasi-judicial”. Many public lawyers think it’s unhelpful to talk as though there is such a separate broad category of decision short of truly judicial ones, and I agree. The real question is what fairness requires in the context of a particular decision-making process.

But anyway, if there is a such a thing as a quasi-judicial decision, this ain’t it. It doesn’t involve determining a dispute between competing claims, or making findings of fact, or deciding whether to impose sanctions on anyone. It’s more like a classic policy judgment about what the public interest requires in the context of media ownership, of the sort we elect politicians to take precisely because they have views.

We will live in a less democratic world if judges or (more likely) politicians and the media decide it’s “inappropriate” for people with opinions to take decisions in policy fields they’re interested in. That approach is anti-political; it would prevent any idealist from improving the world. I’m sad to hear Ed Miliband say Cable breached the Ministerial Code; I don’t think he did.

Finally, let’s get clear about what decision we’re dealing with. Cable issued a European intervention notice, which initiated procedures under the Enterprise Act 2001 (Protection of Legitimate Interests) Order 2003. So the next decision required, now from Jeremy Hunt, is whether to refer News Corporation’s proposed takeover of BSkyB to the Competition Commission, under article 5 of the 2003 Order, following OFCOM’s report on the public interest; and if he does that, whether following the Competition Commission’s report, whether to take enforcement action under article 12. That can include blocking the takeover completely.

The legislation is complex, but for the few who want more chapter and verse,  the European intervention notice was issued under section 67 of the Enterprise Act 2002; Vince Cable was entitled to do this to protect a legitimate public interest under article 21.4 of the EU Merger Regulation – the public interest consideration being the need for there to be a “sufficient plurality” of persons with control of media enterprises in accordance with section 58(2C)(a) of the Enterprise Act.

Section 11 of this guidance explains further.

The pure competition aspects of the deal have already been dealt with by the European Commission – which has cleared it.

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