Look but don't touch: substantive legitimate expectation in the context of "political policy" decisions involving the allocation of resources

"Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract."

In R (on the application of Alansi) v London Borough of Newham [2013] EWHC 3722 (Admin), the Administrative Court has restated a number of key principles relating to legitimate expectation, including the deference that should usually be afforded to public bodies making policy decisions involving the allocation of resources. This judicial review related to a decision by Newham Council to alter the claimant's status under Newham's housing allocation scheme from "Priority Homeseeker" to "Homeseeker".  Although this alteration was the consequence of a number of broad changes to the scheme, the claimant argued that various assurances that she had been given by Newham meant that it amounted to an unlawful breach of her substantive legitimate expectation that she would retain Priority Homeseeker status. The first question that the Court considered was whether a legitimate expectation had arisen at all.  The Court rejected Newham's submission that their assurances to the claimant should be examined using Lord Hoffman's approach to contractual interpretation in ICS v West Bromwich BS [1998] 1 WLR 896, which was as follows: In giving judgment, Stuart-Smith J considered that this approach was not appropriate in public law: although the law of contract generally assumes a measure of equality that makes it appropriate to adopt the objective view of the hypothetical "reasonable person", the same assumption cannot be made where a public body makes statements to an individual.  On this basis, the Court proposed a modified approach to the consideration of the assurances:

"The Court should ascertain the meaning which the authority's statements would reasonably convey to that person in the light of all background knowledge which he or she had in the situation in which he or she was at the time that the statements were made."

Applying this approach to the facts, the Court found that the claimant did have a substantive legitimate expectation that she would retain Priority Homeseeker status. Accepting that this legitimate expectation had been frustrated, the Court then went on to consider whether that frustration was unlawful.  The test to be applied was whether the frustration of the claimant's expectation was so unfair that it amounted to an abuse of power.  When applying this test, the Court should consider whether the public body had struck the correct balance between the public interest and the interests of the person relying on the promise or representation. Drawing on a number of frequently cited legitimate expectation cases, such as Begbie, Bibi and Bhatt Murphy, the Court emphasised that Newham's decision fell into the category of "political policy" decisions that are a primary function of public bodies such as Newham Council.  The Court should be cautious to submit its own judgment for that of a democratically elected public body on what is the fair balance to strike and to what extent it is proportionate to affect individual interests adversely in striking that balance. Stuart-Smith J concluded that no criticism could reasonably be made of Newham in relation to its change of policy, which had been made in the context of – among other things – limited housing supply and heavy demand.  Although it was clear that the claimant's legitimate expectation had been frustrated, that frustration was not unlawful: rather, it was a proportionate response to a pressing and widespread social problem, which struck the proper balance between competing claims of many different interests.

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