Hunt’s handling of the NewsCorp-BSkyB deal was unlawful

by Carl Gardner on April 25, 2012

Yesterday’s big news was the relevation at the Leveson Inquiry of the e-mails from Frédéric Michel to his NewsCorp colleagues about his contact with Jeremy Hunt, or at least with Jeremy Hunt’s special adviser, while Hunt was preparing to decide whether or not to refer NewsCorp’s bid for BSkyB to the Competition Commission.

To recap, the process was initiated by Vince Cable, who issued a European Intervention Notice in November 2010 under the Enterprise Act 2002, citing concerns about media plurality and requiring the OFT and Ofcom to report. The legislation governing the procedure – article 5 of the Enterprise Act 2002 (protection of Legitimate Interests) order 2003 – required the Secretary of State when deciding whether to refer the matter to the Competition Commission to take account only of the public interest consideration mentioned in the original European Intervention Notice – the plurality of media ownership.

Readers will remember that the responsibility was transferred from Vince Cable to Jeremy Hunt just after Christmas 2010, after Cable was revealed to have made remarks privately that appeared to show he was hostile to NewsCorp, and that were very politically embarrassing – though at the time I wrote that I wasn’t sure it meant he had to withdraw from making the decision, in law. Following the Ofcom and OFT advice, Jeremy Hunt announced he was minded to accept NewsCorp’s undertakings in relation to the deal, and not to refer the matter further to the Competition Commission. There was then a drawn-out process of consultation until in July, following relevations about phone hacking, NewsCorp withdrew its bid.

Turning now to the Michel e-mails written during the relevant period, the first few months of 2011, the key quotes in terms of their public law consequences seem to me to be as follows.

The 10 January e-mail is damning: Jeremy Hunt reportedly

made again a plea to try to find as many legal errors as we can in the Ofcom report

which suggests Hunt more than once cooperated with NewsCorp in an attempt to undermine Ofcom.

In a 23 January 2011 e-mail, Michel reports Hunt as apparently sharing his thoughts strategy with NewsCorp:

He said we would get there at the end and he shared our objectives

This again appears to indicate that Hunt was on NewsCorp’s side.

In a 9 February e-mail, Michel says that Hunt

can’t instruct .. officials to get back to Ofcom as he is not supposed to be aware .. we have received the letter

which taken at face value suggests Hunt knew he was acting improperly.

In a 3 March e-mail Michel says

Decision made .. [Hunt] is minded to accept in lieu and will release around 7.30am to the market

which raises questions about the propriety and possibly even legality, in terms of market abuse legislation, of giving NewsCorp such price-sensitive information.

On the 23 March Michel writes that Jeremy Hunt

would welcome our critical views on the slaughter/may submission to help him forge his arguments

Slaughter and May is a major City law firm – again this suggests Hunt was working with NewsCorp in responding to whatever was in that submission.

Finally on 2 June Michel says Hunt

said he has been .. causing a lot of chaos and moaning from people at DCMS on our behalf

On the basis of these e-mails, in my view it’s clear that Jeremy Hunt’s conduct in this process was biased, in the public law sense. The decisions he actually did make were unlawful because of that bias, and it would have been unlawful for him to go on to make the ultimate ruling on the media plurality issue.

The position in law is clearly worse for Hunt than it was for Vince Cable. Cable’s case was one about pre-determination – the question whether he had closed his mind before making the decision. But politicians are expected to have views on the public interest matters, and it was not clear Cable had truly closed his mind. Had that issue gone before a court, a decision by Cable might well have been defensible.

The issue in Hunt’s case is not pre-determination, but bias. His publicly-known favourable attitude to NewsCorp and to the bid was not a legal problem. What is a problem is that during the process he now appears to have been partial to NewsCorp, to secretly have been on their side, and to have shared information with NewsCorp – specifically advanced information about what he’d say to Parliament – that he ought not to have. He appears to have been in the arena with NewsCorp, rather than acting fairly.

I know Michel has said he never in fact spoke to Jeremy Hunt, and that in fact he only spoke at the relevant times to Hunt’s special adviser. I know Hunt says he knew nothing of this. But firstly, he was responsible for his office’s conduct – any civil servant acts as the alter ego of the Secretary of State, and in no other capacity whatever. If the DCMS Permanent Secretary really approved the special adviser’s contact with NewsCorp, I must say I find that surprising — in the Whitehall sense.

In any event, the e-mails do on their face refer to Hunt himself. Regardless of the truth (yes, you read those words correctly), it appears Hunt was biased. As Hunt himself said in the Commons this lunchtime,

the perception of impartiality is as important as impartiality itself

Strictly speaking the legal question, according to the leading House of Lords case of Magill v Weeks (often referred to as Porter v Magill) is actually (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.

Even having heard Jeremy Hunt today, I find it difficult to say there was no real possibility that he was biased, and I doubt any fair-minded observer can do so either. It is not sufficient in terms of public law for Hunt to defend himself as though this were a criminal charge, and as though he had to be proved guilty of something. Criminal law works like that, but public law doesn’t.

Jeremy Hunt has argued in the Commons that he followed all the advice given to him by Ofcom. But that isn’t quite the point. His apparent bias means it was unlawful for him to take decisions in this matter whatever he actually decided. In any event, reading the e-mails as a whole raises the question whether Hunt was attempting to distort Ofcom’s advice to suit his aims, and even succeeded in doing so – so tainting even that independent advice with his bias. Saying he followed the advice when it came is not a good answer to that suspicion.

Finally, a lot of talk about this issue has stressed that Hunt’s decision was “quasi-judicial” in nature. I was surprised that even Robert Jay QC used that term at the Leveson Inquiry yesterday in his questioning of James Murdoch. I wrote about this back in December 2010:

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.

In support of my approach, look at Mr Justice Nicol’s judgment in Crosbie v Defence Secretary last year. He said (para. 63):

there is a powerful line of modern authority which has resisted the categorisation of decision-making into judicial or quasi-judicial on the one hand (where the doctrine of apparent bias does apply) from administrative or other public decisions (where it has no application). Ridge v Baldwin [1964] AC 40 gave momentum to this approach. Anderson itself considered it to be too inflexible an approach to seek to characterise the work of the Army Board as ‘judicial’ or ‘administrative’. In R v Secretary of State for the Environment ex parte Kirkstall Valley Campaign Ltd [1996] 3 All ER 304, Sedley J. thought that the principles of apparent bias (at that time expressed by the House of Lords in R v Gough [1993] AC 646) could not be properly confined to judicial or quasi-judicial tribunals but were of general application. His approach appears to have been endorsed by the Court of Appeal in R (Lewis) v Redcar and Cleveland BC [2009] 1 WLR 83 CA.

The point isn’t whether Jeremy Hunt had to act “quasi-judicially”. The point is that he had a duty to act fairly. But he appears to have been very much on NewsCorp’s side, and to have cooperated and colluded with them secretly in steering the decision-making process in NewsCorp’s favour. At the very least he allowed his adviser to do so by a culpable inattention to what was being said and to whom.

There must be, surely, at least a real possibility Jeremy Hunt was biased. That being so, he acted unlawfully in his conduct in this case.

{ 11 comments… read them below or add one }

1 Polonius April 25, 2012 at 15:56

Thanks for your succinct summary, Carl. Given your background, I have more respect for your analysis than for those of many pundits.

2 James Medhurst April 25, 2012 at 17:12

Carl,

What do you think of the fact that Hunt’s special adviser has resigned but Hunt has not. Is individual ministerial responsibilty dead?

3 Charles April 27, 2012 at 17:06

Although you are missing the point that Michel admitted that all the references to JH in his emails were not to Hunt, but to his SpAd, Adam Smith.

It is possible that Adam Smith acted unlawfully, but that is not the same as Hunt behaving unlawfully. He may have political responsbility for the action of his office, but does he have legal responsibility as well?

4 David April 27, 2012 at 17:18

Michel said, Michel said, Michel said…

5 Carl Gardner April 27, 2012 at 18:10

James,

I’m afraid it may be. I wouldn’t take a fundamentalist position on ministerial responsibility for civil servants – I do think it’s possible for civil servants to be guilty of personal failures that ministers should not be held responsible for. And of course most failures aren’t resigning matters anyway. But I do think there’s been an erosion of the important idea that ministers are accountable for their departments. Even quite a few civil servants when I was in government seemed to accept the idea that civil servants ought to “fall on their swords” for ministers if need be, which I found worrying.

Of course Adam Smith wasn’t a traditional civil servant but a special adviser, which was clearly part of the problem here. I can’t imagine any normal civil servant would have dreamt of acting as he did. It’s elementary.

6 Carl Gardner April 27, 2012 at 18:21

Charles,

I don’t think I’ve missed the point at all. A paragraph in my post begins:

I know Michel has said he never in fact spoke to Jeremy Hunt …

The answer to your question about legal responsibility is “Yes”. In terms of public law, a civil servant is his or her minister’s right hand. Legally, it’s not a great defence to say you don’t know what your right hand was doing. It’s not just about Hunt’s personal conduct.

So actually I do think Smith’s “acting unlawfully” means Hunt acted unlawfully. That’s exactly how being a civil servant works. Indeed I’ve put “acted unlawfully” in inverted commas there in relation to Smith because in a sense, the idea that Adam Smith acted unlawfully in this case is meaningless. It may be Adam Smith’s actions that have caused the problem, but the legal consequence is that it’s the Secretary of State who’s acted unlawfully.

It has to be like that if you think about it. If all that was required, for government to comply with the rule of law, was that ministers themselves personally show no bias, then civil servants could give utterly unfair and biased advice to ministers, which it would then be lawful for ministers to follow.

7 Carl Gardner April 27, 2012 at 18:35

David,

Yes, Michel said these things, or wrote them. I know what else he’s said, and what Smith and Hunt have said too.

I’m not accusing Hunt of a criminal offence. The presumption of innocence does not apply, and it’s not right to think government action is by default lawful unless proved unlawful beyond reasonable doubt. If that were the case, the rule of law in Britain would be much weaker than it actually is.

To argue that Hunt acted lawfully here, you have to conclude there is no real possibility that his decision-making was biased, bearing in mind that it’s not only his personal conduct that’s relevant, but that of his officials too.

I don’t really see how anyone can draw that conclusion. Once a minister has allowed his adviser to resign for going too far, and is trying publicly to prove his own personal lack of bias by publishing normally confidential e-mails, I think it’s pretty clear the “real possibility of bias” test has already been passed.

8 Diogenes April 29, 2012 at 17:18

Carl, lovely clear summary. I wondered whether there are grounds for a judicial review. I know the bid was abandoned but surely the coalition (Guardian, Telegraph etc) against the bid incurred costs and hence some financial harm. The remedies might well be non-existent if a JR is granted but at least the truth would come out in court.

9 Homemade April 30, 2012 at 12:54

“If all that was required, for government to comply with the rule of law, was that ministers themselves personally show no bias, then civil servants could give utterly unfair and biased advice to ministers, which it would then be lawful for ministers to follow.”

Sounds a bit like the previous government’s successful defence of their actions in Iraq to me and they got away with that.

10 Veronique April 30, 2012 at 22:35

Carl, as you worked in Government you will be aware that the scenario of a civil servant or SpAd going on a frolic of his own in the manner suggested is so unlikely as to be laughable. It is vanishingly small and, frankly, insulting that we are asked to believe it.

Good article, sets it all out in very clear terms.

11 David Allen Green (Jack of Kent) May 1, 2012 at 02:25

This post is compelling and must be right.

Once it was confirmed that the emails were genuine, there can be no serious doubt that any decision by the Culture Secretary to allow the full take-over would have been quashed for apparent bias. The mere existence of the contacts would have been enough. The Culture Secretary’s office was acting unlawfully.

What makes it worse is that the contacts were also not disclosed to parliament, contrary to the Culture Secretary’s express assurance.

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