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Challenges to the exercise of local authority discretion

The Blackpool Council case involved a judicial review brought by a firm of solicitors who occupied a unit at an enterprise centre owned and operated by the Council.

The lease was due for renewal in June 2013. The firm was advised by Blackpool Council that the lease would not be renewed and that the basis of that decision was that the firm had brought a number of successful personal injury actions against the Council. The decision not to renew the lease was taken by a corporate assessment group to whom the Council had delegated the decision. Aggrieved at the decision, the solicitors sought to judicially review the decision of the Authority.

The local authority sought to take a preliminary point that the decision itself was notamenable to a challenge by judicial review, in that it was performing a purely private function in the context of a commercial relationship relating to a commercial premises.

The Court disagreed with the proposition put forward by the Council and allowed the judicial review to quash the decision. It advanced the following propositions on the basis for that decision, establishing that in a case involving a challenge to a decision of a public body it was necessary to consider:

• whether or not and to what extent the public body was exercising a public function
• whether the challenge involved genuinely substantial public law challenges based on fraud, corruption, bad faith and improper motive.

In the Blackpool Council case the authority had published a set of selection criteria for each unit at the enterprise centre, which the firm met. On those facts it was determined that there was a sufficient public law element to render the decision amenable to challenge by judicial review.

The authority was under a duty not to exercise its responsibility for improper or immaterial purposes. There was no evidence before the Court that the authority had considered the firm rationally against the published tenants selection criteria.

As the sole reason for the decision was the intent to punish the tenant as a consequence of it engaging in actions against the Council, the Court found that the decision was susceptible to challenge and should be quashed.

The outcome of the judicial review was predictable; what is of more interest is the range of decisions made by public bodies that may be susceptible to challenge and judicial review.

This clearly prompts the need for decision makers in similar circumstances to make open and transparent decisions based on robust criteria, with the decision making process clearly recorded. Without this audit trail, any decisions will be subject to the risk of judicial review.