Judge slams "act of retaliation" by council against claimant law firm

January 24, 2014

A local authority carried out “an act of retaliation” and was “vindictive” or irrational when it refused to offer a new lease of office space to a claimant law firm, a High Court judge has ruled.

North Solicitors, which specialises in human rights and personal injury claims, had rented premises at the Enterprise Centre from Blackpool Borough Council since 2008.

However, in 2013 the council refused to offer the firm, which was founded by Joanna Trafford, a new lease on her office space.

Trafford was aggrieved by the stated reason for the council’s refusal of a new lease, namely that she had brought claims against it on behalf of clients seeking compensation for injuries. The claims were predominantly highways ‘tripping’ type claims.

The claimant was supported by the Law Society, which wrote to the court to express serious concern about Blackpool’s conduct.

The local authority argued that: Trafford had brought her claim out of time; its refusal was not amenable to challenge by judicial review; and – as to the substance of the decision – it was perfectly entitled to refuse to offer the claimant a new lease and there was no valid public law challenge to the decision.

Five grounds of challenge were advanced:

Improper/unauthorised purpose;
Wednesbury illegality;
Procedural fairness;
Public sector equality duty. (This ground was not included in the claim form and was the subject of an opposed application for permission to amend to argue it);
Unpublished policy.

In Trafford v Blackpool Borough Council [2014] EWHC 85, His Honour Judge Stephen Davies said it seemed to him that the Blackpool’s Corporate Asset Management Group (CAMG) had been aware of a recent upsurge in claims brought against the council by North Solicitors on behalf of its clients.

The CAMG, the judge said, had decided that the claimant had been targeting such claims and took the view that “such claims were adverse to the defendant's financial interests, in that dealing with them cost the defendant time and money which, like any other council in the current economic condition, it could ill afford, and decided as a result that it did not want to have any continuing commercial relationship with the claimant, so that it would terminate the lease as soon as possible”.

HHJ Stephen Davies said he did not consider that he could properly conclude that the CAMG’s intention, purpose or motive was to cause serious damage do the firm, by forcing it to relocate to unsuitable premises or to premises out of the Blackpool area, “let alone to cause it to close down”.

There was absolutely no evidence that its intention was to seek to pressure the firm to stop taking on tripping claims against the council, nor was there any basis to conclude that that CAMG was trying to prevent or dissuade individual personal injury claimants from taking or pursuing claims against it.

However, the judge added: “The conclusion I reach is that the CAMG was so aggrieved by what it regarded as the claimant's unacceptable conduct, as a tenant of the Enterprise Centre, in actively farming for tripping claims to bring against the defendant that it decided to retaliate by seeking to terminate that tenancy as soon as it could.

“It was determined to send a message to the claimant that the defendant was not prepared to sit back and do nothing in the face of such conduct. I suspect that it was also wishing to send out a similar message to the local legal sector as a whole.”

HHJ Stephen Davies said the CAMG was prepared to take this action even though it was aware that the loss of the claimant as a tenant would adversely impact the financial position of the Enterprise Centre.

“It was, in short, I find, an an act of retaliation, pure and simple, to ‘punish’ the claimant’s firm by causing it some difficulty and inconvenience….,” he added.

The judge found that:

In all of the circumstances of the case he should exercise his discretion to extend the time for the claim to be brought;
He was satisfied that the decision was in principle amenable to judicial review;
The council had a wide discretion under s. 123 of the Local Government Act 1972 but it was under a duty not to exercise this discretion for improper or immaterial purposes. There was no evidence that the defendant conducted a rational assessment of all relevant considerations;
The only consideration which the council had regard to when deciding whether or not even to consider a request by the claimant for a new tenancy was “its desire to punish the claimant for engaging in that activity [alleged ‘claims farming’] by subjecting her firm to some difficulty and inconvenience, without having any regard to whether or not that would achieve any benefit for the wider community interest or indeed the defendant's own financial interests”;
Blackpool had failed to exercise its power to promote the purpose for which it was conferred, “having regard not just to the wide power conferred by s. 123 itself but the circumstances in which the Enterprise Centre was constructed and operated at public expense and for public good and in which the defendant promulgated and implemented a policy as to the selection of tenants”;
The exercise of a power with the sole or the dominant intention of punishing the claimant and subjecting her firm to a detriment, in circumstances where there was no evidence that the claimant was actually doing anything at all unlawful or improper, was the intentionally improper exercise of the power conferred on the defendant and the exercise of that power for unauthorised purposes;
The CAMG was motivated by an illegitimate consideration, “namely its desire to punish the claimant”, and had failed to consider all relevant considerations;
He was satisfied that the decision was fundamentally tainted by illegality and for that reason should be quashed.

In relation to the second ground, HHJ Davies concluded that the decision by the council could be categorised as either “vindictive” or “irrational”.

He was also satisfied that the decision should be quashed on the procedural unfairness ground as well. If the CAMG was going to make a decision on the basis that the claimant should be equated with ‘claims farming’, then she should have been allowed the opportunity to make representations.

HHJ Stephen Davies did not, however, allow the application to amend the claim form to include the PSED. He also rejected the argument that a secret policy had been applied to blacklist the claimant and others like her.

Jonathan Auburn, a barrister at 39 Essex Street who appeared for Trafford and led Ian Skeate of Clerksroom Barristers, said: “The Administrative Court has held that this local authority acted vindictively and with the intention of punishing someone who had done nothing wrong.

“Local and central government do not often act in such a shocking manner but, when they do, they should be held to account by means of judicial review. It is all the more important now, when judicial review is so under threat from central government reforms, that we remember the vital role which it plays in protecting individuals from abuses of government power.”

The Law Society claimed that Blackpool’s actions were “inimical to the rule of law”.

Local Government Lawyer has requested a comment from the council.