Introduction

Brooke Energy Ltd, R (On the Application Of) v. Secretary of State for Business Energy and Industrial Strategy ([2018] EWHC 2012 (Admin)) is a significant case in the realm of administrative law, particularly concerning the doctrine of procedural legitimate expectation. The claimant, Brooke Energy Ltd, a company engaged in Biomass Combined Heat and Power (CHP) projects, sought judicial review against amendments to the Renewable Heat Incentive (RHI) Scheme Regulations. The central issue revolved around whether the Department had a duty to consult stakeholders before implementing these regulatory changes.

Summary of the Judgment

The High Court dismissed Brooke Energy Ltd's claim, deeming it academic. The court held that the claimant had no vested or accrued rights under the amended regulations, primarily because accreditation by Ofgem was a prerequisite for any entitlement to support payments, and none of the claimant's projects had been accredited at the time of the regulatory changes. Furthermore, the court found that there was no established practice or promise of consultation that would create a legitimate expectation of being consulted before such policy changes. Consequently, the amendments to the RHI Scheme Regulations were upheld as lawful, and the claim for judicial review was dismissed.

Analysis

Precedents Cited

The judgment extensively referenced key precedents in administrative law:

• Bhatt Murphy v. Independent Assessor [2008] EWCA Civ 755: Established the boundaries of procedural legitimate expectation.
• Maguire [1999] 1 WLR 1778: Dealt with acquired rights under changing legislation.
• Friends of the Earth [2012] EWCA Civ 28: Concerned the unlawfulness of altering tariffs post-eligibility.
• Odelola v. Secretary of State for the Home Department [2009] UKHL 25: Highlighted distinctions between policy changes and rights conferred by legislation.
• Wilson v. First County Trust (No. 2) [2003] UKHL 40: Commented on the presumption against retrospectivity.
• R v Inland Revenue Commissioners ex parte Unilever [1996] STC 681: Addressed unfairness in the sudden withdrawal of accepted practices without consultation.
• Luton Borough Council v. Secretary of State for Education [2011] EWHC 217 (Admin): Example where an established partnership created legitimate expectations.

These cases collectively explore the concept of legitimate expectation, particularly the conditions under which procedural duties, such as consultation, are enforceable.

Legal Reasoning

The court's reasoning hinged on two main points:

1. Academic Nature of the Claim: The court found that the claimant's challenge was academic because none of their projects had been accredited, and thus no entitlement to RHI payments had been established under the 2016 or 2017 Regulations.
2. Absence of a Duty to Consult: The court assessed the three-fold test for procedural legitimate expectation:
   • Whether there was a promise to consult.
   • Whether there was an established practice of consultation.
   • Whether failing to consult would result in conspicuous unfairness.
   The court determined that there was no consistent practice of consultation regarding amendments to the RHI Scheme Regulations. Additionally, exceptional circumstances that could justify a duty to consult, such as significant financial commitments by the claimant based on a presumed stable policy environment, were not sufficiently demonstrated.

The court concluded that the Department of Business Energy and Industrial Strategy had not breached any procedural duties owed to the claimant via legitimate expectation. The lack of a uniform consultation practice further negated the possibility of an established or promised process.

Impact

This judgment reinforces the principle that procedural legitimate expectations are not easily established, especially in sectors subject to policy changes and administrative discretion like renewable energy. It underscores the high threshold required to claim a duty of consultation, particularly emphasizing the necessity for clear, settled, and consistent practices or explicit promises from public authorities.

For stakeholders in renewable energy schemes, this case illustrates the importance of not relying solely on potential policy continuities and highlights the need for proactive engagement with regulatory bodies. It also signals to public authorities the boundaries within which they must operate when altering incentive schemes, ensuring that any duties to consult are firmly based in established legal principles and precedents.

Complex Concepts Simplified

Procedural Legitimate Expectation

This legal doctrine arises when a public authority has, through its actions or policies, led an individual or group to believe that certain procedures will be followed before making decisions that affect them. If such expectations are not met, it may constitute a breach of duty, leading to potential judicial review.

Accreditation by Ofgem

Accreditation is a mandatory process by which installations qualify to receive support under the RHI Scheme. Without accreditation, entities like Brooke Energy Ltd. have no entitlement to periodic financial support, making the potential changes to accreditation regulations critically impactful.

Doctrine of Legitimate Expectation

This doctrine protects individuals from sudden changes in policies or practices that they relied upon to their detriment. It can be either substantive, protecting anticipated benefits, or procedural, ensuring a fair consultation process before changes are made.

Conclusion

The judgment in Brooke Energy Ltd v. Secretary of State for Business Energy and Industrial Strategy clarifies the stringent requirements for establishing procedural legitimate expectations in administrative law. By dismissing the claimant's challenge as academic and affirming the absence of a duty to consult, the court underscores the discretionary power of public authorities in policy formulation and amendment. This case serves as a precedent for future challenges related to policy changes, particularly in sectors influenced by regulatory frameworks and incentive schemes.

Stakeholders must recognize that without an established and consistent consultation practice or explicit promises, claims based on legitimate expectations will face significant hurdles. Public authorities, on their part, are reminded of the importance of clear communication and consistent policy application to avoid potential legal challenges.