Local Government Lawyer - BAA Humbug...

BAA Humbug...

Tuesday, 02 February 2010

The question of bias reared its head again before Christmas when the Competiiton Commission was forced to backtrack on its demand that BAA sell a number of its airports. Nicholas Dobson considers the implications for tribunals of all kinds.

What was revving on the runway ready to take-off but was turned back by apparent bias? Answer, the 19 March 2009 report of the Competition Commission. This had concluded (amongst other things) that the British Airports Authority (BAA) should dispose of both Stansted and Gatwick airports to different purchasers and similarly dispose of either Glasgow or Edinburgh Airport. But it was the ubiquitous ‘fair minded and informed observer’ who was to cry havoc and let slip the dogs of apparent bias. For such was the decision of the Competition Appeal Tribunal (Barling J (President); Lord Carlile of Berriew QC and Sheila Hewitt) in a judgment delivered just before Christmas on 21 December 2009.

The problem was the participation of Professor Peter Moizer as a member of the group that conducted the Competition Commission investigation in question (the Investigation). This was into the supply of UK airport services and in particular to the effects of features of the market(s) for such services existing in connection with the services supplied by BAA.

BAA argued that Professor Moizer’s participation fell foul of the principle of apparent bias. This was because Professor Moizer had been a long-standing adviser to the Greater Manchester Pension Fund (the Fund) which was operated by the ten constituent Great Manchester local authorities that own 100% of the shares in Manchester Airport Group plc (MAG). MAG (which owns Manchester and other UK airports) had played an active role in the Investigation, providing evidence and submissions to the Competition Commission and (as the judgment indicated) ‘identified itself in the early stages of the process as a potential acquirer of further airports which might come onto the market, including BAA airports’. And when, in the later stages of the Investigation, BAA put Gatwick Airport up for sale MAG and the Fund had formed part of a consortium bidding for it.

Principles from Caselaw

In determining the issue of apparent bias the Tribunal rehearsed the principles underpinning questions of apparent bias which it described as now being ‘reasonably settled’. Some key strands from these include:

In R v. Sussex Justices, Ex parte McCarthy [1924] 1 KB 256, Lord Hewart CJ had enunciated one of the best known principles of English law: ‘. . .it is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done’.

The accepted test is that prescribed in Porter v. Magill [2001] UKHL 67 i.e.: ‘whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased’.

There is, as Lord Steyn on behalf of the House of Lords had ruled in Lawal v. Northern Spirit Ltd [2003] UKHL 35, now no difference between the common law test of bias and the requirement under article 6 of the European Convention of an independent and impartial tribunal.

Lord Goff of Chieveley, in R v. Gough [1993] AC 646, referred to '. . .the simple fact that bias is such an insidious thing that, even though a person may in good faith believe that he was acting impartially, his mind may unconsciously be affected by bias . . .'.

As the House or Lords pointed out in Lawal v. Northern Spirit Ltd., 'Public perception of the possibility of unconscious bias is the key'.

The characteristics of the fair-minded and informed observer are now well understood: he must adopt a balanced approach and will be taken to be a reasonable member of the public, neither unduly complacent or naïve nor unduly cynical or suspicious (see Lawal v. Northern Spirit amongst other authorities).

The European Court of Human Rights has not regarded perceptions of bias as decisive, but has required that suspicions of bias be objectively justified. By this is meant that there must be some demonstrable and rational basis for what is suspected (see, for example, Hauschildt v. Denmark (1989) 12 EHRR 266).

Consequently:
1.apparent bias is to be distinguished from actual bias: a decision may be affected by apparent bias without the decision-maker being actually biased;
2.in relation to apparent bias, not only are outward appearances and public perceptions important, but it is also to be borne in mind that a person who in good faith believes that he or she is impartial or is capable of acting impartially, may nevertheless be subconsciously affected by bias;
3.the test to be applied is an objective one: 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;
4.the fair-minded and informed observer, who is not to be equated with the complainant, must adopt a balanced approach and will be taken to be a reasonable member of the public, neither unduly complacent or naïve nor unduly cynical or suspicious
5.this test is consistent with the requirement under article 6 of the European Convention on Human Rights of an independent and impartial tribunal.

But what sort of person is this famous ‘fair-minded and informed observer’? Lord Hope in Helow v. Secretary of State for the Home Department [2008] UKHL 62 described as follows the personal attributes of one who happened to be female:

'The observer who is fair-minded is the sort of person who always reserves judgment on every point until she has seen and fully understood both sides of the argument. She is not unduly sensitive or suspicious. . .. Her approach must not be confused with that of the person who has brought the complaint. The 'real possibility' test ensures that there is this measure of detachment. The assumptions that the complainer makes are not to be attributed to the observer unless they can be justified objectively. But she is not complacent either. She knows that fairness requires that a judge must be, and must be seen to be, unbiased. She knows that judges, like anybody else, have their weaknesses. She will not shrink from the conclusion, if it can be justified objectively, that things that they have said or done or associations that they have formed may make it difficult for them to judge the case before them impartially.'

In the instant case the Tribunal noted its duty firstly to ascertain all the circumstances which have a bearing on the suggestion of bias and it regarded the term ‘real possibility’ as ‘a possibility which is not without substance, not fanciful, more than merely minimal but less than a probability’. And to be biased is to be prejudiced against or pre-disposed in favour of a person for reasons unconnected with the merits.

In the circumstances and in the light of the factual material before the Tribunal it concluded that there was apparent bias but made clear that there was ‘no finding, express or implied, that Professor Moizer was actually biased’.

Comment

Local and other public authorities take many decisions that may adversely affect particular interests. But whilst the rules regulating councillor interests are mature and generally well understood, the potentially fatal nature of bias to public authority decisions is often less so. And, like the vehicle in the blind spot, the person potentially affected by apparent bias can often be unaware of it. As Devlin LJ pointed out back in 1960 in R v .Barnsley Licensing Justices, Ex p Barnsley and District Licensed Victuallers' Association [1960] 2 QB 16: ‘Bias is or may be an unconscious thing and a man may honestly say that he was not actually biased and did not allow his interest to affect his mind, although, nevertheless, he may have allowed it unconsciously to do so’. Or as the House of Lords was to point out some 43 years later 'Public perception of the possibility of unconscious bias is the key'.

So whilst the Competition Commission might well have found the decision of the Tribunal to have been something of a ‘BAA Humbug’ on its Christmas, the case does provide all public authorities with a useful and up to date summary of the key principles surrounding apparent bias.

Dr. Nicholas Dobson is a lawyer specialising in local and public law and is also communications officer for the Association of Council Secretaries and Solicitors. © Nicholas Dobson.

This article was first published on Lawtel.

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