"Barrier to justice law" was "simply protection of the States' budget", say judges

Friday 19 April 2024

The main aim of a 2018 law that was recently declared 'incompatible' with human rights was "simply protection of the States' budget", according to a majority of appeal judges.

The International Co-operation (Jersey) Law is intended to encourage tax information exchange, but also contains a provision preventing courts from making costs orders against certain public authorities, even where they might act unlawfully.

While the Attorney General argued the provision existed because public authorities may otherwise be discouraged from co-operation due to the fear of incurring costs from the public purse, a majority of sitting judges in the Court of Appeal instead found the main aim of the legislation was "simply the protection of the States' budget".

The original decision to brand the 2018 law "incompatible" followed a case this year in which Imperium Trustees Ltd successfully appealed against an order to disclose confidential information under a tax information exchange agreement.

However, they were unable to recover their costs because of the 2018 law.

The Court noted that the Law Officers' Department had claimed it raised "no human rights issues" when it was due to come before the States Assembly for approval. A note – which was "curiously" described as not constituting "legal advice" – was provided at the time, but did not address the human rights issue.

Pictured: Law Officers said the legislation raised "no human rights issues" before it went before States Members.

The provision was described as a "barrier to justice" by the Court, as it handed down its landmark human rights ruling. 

Although that declaration has no immediate effect, it creates an expectation that the States will amend or repeal the law.

But the finding of the court has not been accepted by the Attorney General.

Last week, Mark Temple put forward an application to challenge the declaration of incompatibility made under the 24-year-old Human Rights (Jersey) Law, but it was ultimately rejected.

The Attorney General argued that the provision was necessary to avoid the so-called "chilling effect" that could discourage co-operation by public authorities because of the fear of incurring costs from the public purse.

However, the Court of Appeal decided that this went against the principle of "equality of arms", which gives parties in court the same opportunity to present their case without being at a disadvantage, and was not proportionate to the aims of the legislation.

Consequently, it declared the law at odds with the Human Rights Convention.

The Court of Appeal – comprising Sir William Bailhache, the Rt Hon James Wolffe and Paul Matthews – said it was agreed that the court had to address three questions when deciding whether the law was incompatible with the convention: was the rule a restriction on the right of access to a court, did it pursue a legitimate aim and was there a reasonable relationship between the means employed and the aim to be achieved?

Sir William, the panel's president, said that there was no dispute that, in principle, the rule operated as a restriction on the right of access to a court. Two of the three judges did not consider the aim of the legislation to be to avoid the "chilling effect" on the island's international obligations to give assistance in tax matters: it was "simply the protection of the States' budget".

He continued: "However, the court went on to consider whether, if [this] had been the aim of the legislation, the costs rule bore a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. On that issue the court was unanimous that it did not, and hence made the declaration of incompatibility."

Sir William said that it was necessary for the legislature to have considered the various points in question, which "there was little or no evidence [it] had done".

He said: "One would have expected any debate in the legislature to have reflected at least a recognition of different ethical positions which might have been taken on the draft law. In this case there was nothing. It is hard to assert that therefore the margin of appreciation to the legislature carried much weight in this particular case."

A spokesperson for the Law Officers' Department confirmed that Attorney General Mark Temple is now considering an application for special leave to appeal directly to the Privy Council's Judicial Committee.