Introduction

The case of EnergieKontor UK Limited for Judicial Review ([2020] ScotCS CSOH_107) addresses significant issues surrounding the allocation of noise budgets by the Ministry of Defence (MOD) in relation to wind farm developments near the Eskdalemuir Seismic Array ("the Array"). EnergieKontor UK Limited, a commercial wind farm developer, challenged the legitimacy of the MOD's policy that seemingly favored larger wind farm projects (those exceeding 50 megawatts) over smaller ones in the allocation process. This commentary delves into the background of the case, the court's judgment, the legal reasoning applied, and the broader implications of the decision.

Summary of the Judgment

The Scottish Court of Session's Outer House, presided over by Lord Tyre, delivered a judgment on December 23, 2020, in favor of EnergieKontor UK Limited. The court found the MOD's policy for allocating noise budgets to be irrational and thereby unlawful. Specifically, the policy's differential treatment based on the size of the wind farm (whether it required a section 36 consent under the Electricity Act 1989) constituted an unjustifiable preference for larger developments. This preference resulted in larger projects receiving noise budget allocations earlier in the planning process compared to smaller ones, without a rational basis connected to the primary objective of protecting the Array's operational capabilities. Consequently, the court granted both a declarator declaring the MOD's policy unlawful and a decree of reduction affecting the allocation of noise budget to CWL Energy Limited's proposed Faw Side windfarm development.

Analysis

Precedents Cited

The judgment references several key legal precedents that shaped its outcome:

• Matadeen v Pointu [1999] AC 98: Established that equality of treatment in administrative decisions must be based on rational distinctions, aligning with the Wednesbury unreasonableness standard.
• R (G) v Nottinghamshire Healthcare NHS Trust [2010] PTSR 674 (CA): Reinforced the application of Wednesbury rationality in assessing the lawfulness of administrative policies.
• R (Gallaher Group Ltd) v Competition and Markets Authority [2019] AC 96: Further emphasized that distinctions in policy must be rational and justifiable.
• Anderson Strathern LLP v Scottish Legal Complaints Commission 2017 SC 120: Addressed unlawful categorization by administrative bodies.
• Council of the Law Society of Scotland v Scottish Legal Complaints Commission 2017 SC 718: Highlighted the importance of practical remedies in addressing unlawful administrative actions.

Legal Reasoning

The core legal issue revolved around the principle of Wednesbury unreasonableness, a standard used to assess whether a decision made by a public body is so unreasonable that no reasonable authority would ever consider imposing it. Lord Tyre concluded that the MOD's policy breached this principle for the following reasons:

• Rational Basis: The MOD failed to provide a rational justification for allocating noise budgets based on the date of a scoping request for larger wind farms and the date of a planning application for smaller ones. The distinction did not relate to the protection of the Array but rather introduced an arbitrary preference.
• Equality and Non-Discrimination: The policy did not treat like cases alike nor did it appropriately differentiate unlike cases. The size of the wind farm (over or under 50MW) did not directly impact the noise budget's relevance, which should be solely determined by the potential interference with the Array.
• Lack of Transparency: The MOD did not maintain a record of the reasons behind its policy, making its allocation method opaque and unchallengable to developers until inconsistencies became apparent.

Consequently, the court held that the MOD's policy was irrational and violated the principle of equality before the law, making it justiciable and subject to judicial intervention.

Impact

This judgment has profound implications for administrative law and the renewable energy sector:

• Administrative Accountability: Public bodies must ensure that their policies are grounded in rationality and non-discriminatory practices. Arbitrary or unexplained distinctions can render policies unlawful.
• Wind Farm Development: Developers can expect a more equitable process in noise budget allocations, irrespective of the project's size. This may encourage balanced growth in renewable energy projects and prevent the monopolization of favorable conditions by larger entities.
• Policy Reform: The MOD is compelled to revisit and revise its noise budget allocation methodology, ensuring transparency and rationality. This may lead to standardized procedures that equally accommodate both large and small-scale developments based on their actual impact on the Array.
• Legal Precedent: Future cases involving administrative policies will reference this judgment to assess the reasonableness and equality of governmental decisions.

Complex Concepts Simplified

Wednesbury Unreasonableness

A legal standard used to determine if a decision made by a public authority is so unreasonable that no reasonable authority would ever make it. If a decision fails this test, it can be overturned by the courts.

Noise Budget

A calculated limit on the cumulative seismic vibrations that can be introduced into the ground by wind turbines in a specific area. Exceeding this budget can interfere with sensitive equipment like seismometers.

Scoping Request

A preliminary request by a developer seeking guidance on what should be included in an Environmental Impact Assessment (EIA) for a proposed development. It helps streamline the planning application process.

Section 36 Consent

A legal requirement under the Electricity Act 1989 for large-scale energy projects (exceeding 50MW) to obtain consent from Scottish Ministers, ensuring that such projects meet environmental and planning standards.

Conclusion

The EnergieKontor UK Ltd case serves as a pivotal example of the judiciary's role in ensuring fair and rational administrative practices. By declaring the MOD's noise budget allocation policy unlawful, the court underscored the necessity for public bodies to operate transparently and without arbitrary discrimination. This decision not only rectifies the specific grievances of EnergieKontor but also sets a standard for equitable treatment in environmental and planning matters. Moving forward, policymakers and developers alike must navigate a more balanced and legally compliant landscape, fostering a renewable energy sector that aligns with both environmental safeguards and principles of fairness.