JR back in vogue? Judicial review under the NSI, SCB and BSF | Hogan Lovells

The National Security and Investments Act 2021 (the “NSI”)

The INS established a new autonomous statutory regime for government review and intervention in acquisitions and investments for the purpose of protecting national security. The NSI grants the Secretary of State a range of powers, including: “requesting” a transaction for further review; require the parties to provide information regarding the transaction; and approve (or failing to approve, block) a transaction in progress.

If a person is aggrieved by a decision of the Secretary of State, for example to approve (or not approve) a transaction, under Section 49 of the NSI, the party may seek judicial review. Judicial review is not primarily about the merits of a decision, but rather about whether it was made lawfully. An application for judicial review may be filed for illegality, procedural unfairness, unreasonableness/irrationality or for breach of the Human Rights Act 1998.

Ordinarily, an application for judicial review must be made “promptly and in any event within three monthsof the contested decision. However, Section 49(4) of the NSI changes this so that a request must be made within 28 days of any decision (extendable in exceptional circumstances).

Additionally, under the NSI, there is a legal avenue of appeal if a person receives a fine or notice of cost recovery. Under NIS Section 50, although a affected person still has only 28 days to contest the imposition of such a penalty or notice, the affected person may request a full review of the decision. on the merits, and is not limited to grounds for judicial review.

Subsidy Control Bill (the “SCB”)

Following the end of the Brexit transition period on December 31, 2020, the UK ceased to be subject to the EU state aid regime.4 The UK’s subsidy regime is now based on a combination of (a) the subsidy control commitments set out in the UK-EU Trade and Cooperation Agreement, (b) the Ireland, (c) international free trade agreements with third countries and (d) WTO subsidy rules. The SCB sets out the framework for implementing the UK’s international commitments on subsidy control and is currently under consideration in Parliament.

Clause 70 of the SCB provides that an interested party (e.g. a company whose interests are affected by the awarding of a subsidy to a competitor and the Secretary of State) may challenge a decision to award a subsidy or creation of a subsidy scheme on the grounds of judicial review (as stated above these are illegality, procedural unfairness, unreasonable/irrational or a breach of the 1998 Act on human rights). This challenge must be addressed to the Competition Appeal Tribunal (the “CAT”) within one month (extendable in exceptional circumstances), from the date relevant to the contested decision.

Section 72 of the SCB empowers the CAT to grant the range of remedies that would be available to a court on an application for judicial review, including an order of rescission (setting aside the decision) or a binding order (requiring the public body to do something). The CAT can also grant a “recovery order” which would allow the public authority that awarded a grant to recover the amount of the grant from the beneficiary.

The Online Safety Bill (the “OSB”)

The OSB establishes a new regulatory regime to combat illegal and harmful content online. It imposes due diligence obligations with respect to illegal content and content harmful to children on Internet service providers that allow users to upload and share user-generated content and on search engine providers that allow users search multiple websites and databases.

The OSB also imposes obligations on these providers to protect users’ rights to freedom of expression and privacy. Providers of user-to-user services that meet specified thresholds (known as Category 1 services) are subject to additional obligations with respect to content harmful to adults, content of democratic importance and journalistic content.

The OSB gives Ofcom the power to oversee and enforce the new regulatory regime. These include the power to issue confirmation orders requiring service providers to take specific measures to comply with the obligations imposed on them and penalty notices imposing a fine on service providers of up to 10% of the turnover. global business. The BSF also requires Ofcom to prepare codes of practice to help providers comply with their due diligence duties. The BSF is to be presented to Parliament this spring.

Sections 104 and 105 of the OSB provide that anyone who “sufficient interestcan challenge a decision by Ofcom as to the categorization of services (e.g. whether a service falls under category 1 and should therefore be subject to other rights), or the issuance of a confirmation decision or of a notice of sanction, for reasons of judicial review. The challenge must be addressed to the Upper Tribunal, which has the power to annul the challenged decision. Clauses 104 and 105 do not shorten the time for such a challenge, so the ordinary rule of judicial review (i.e. a challenge must be brought promptly and in any event within 3 months) will apply.

Anyone other than the recipient of a Confirmation Notice or Penalty Notice must obtain permission from the Upper Tribunal before filing a dispute.

There are, however, a number of other powers granted to Ofcom, for example, to promulgate codes of practice or issue notices of use of technology, where a specific method of challenge is not provided by the ‘OSB. If a provider wishes to challenge these decisions, it would therefore be an “ordinary” judicial remedy before the Administrative Tribunal.

Conclusion

The NSI, SCB and OSB each provide for a modified version of judicial review.

The references

1 Particularly after a few high-profile and successful judicial reviews against the government.

2 In July 2021, the government published the Judicial Review and Courts Bill (the “JRC Bill”). The JRC Bill seeks to address a number of recommendations from the Independent Administrative Law Review. For example, the JRC Bill removes an individual’s ability to challenge, by way of judicial review, the decision of the Upper Tribunal to refuse leave to appeal a decision of the First Tier Tribunal. The JRC bill is currently under consideration in Parliament.

3 Although the Government has sought to modify the application of judicial review in all three contexts (for example by shortening the period within which an appeal can be lodged), the fundamental principles remain the same.

4 The EU state aid regime regulated the granting by member states of advantages to organizations that could distort competition.