FDA, PCSU and Prospect, R (On the Application Of) v HM Treasury

Factual and Procedural Background

Three independent trade unions (together "the Claimants") representing approximately 200,000 civil servants challenged the Civil Service pay remit guidance published by the Defendant on 25 June 2018 (the "2018 Guidance"). The Claimants contended that the Defendant breached an express promise to provide proper consultation (applying Gunning principles) following disclosure of the key pay remit range figure ("X figure") and before publication. The X figure, a percentage range limiting annual departmental average pay awards absent specific authority, was redacted from the draft guidance disclosed to the Claimants and only revealed upon publication as 1-1.5%.

The Claimants sought judicial review to quash the 2018 Guidance on grounds of unlawful action and breach of legitimate expectation of meaningful consultation. Permission for judicial review was granted following a hearing that proceeded as a substantive review. The Defendant had delayed serving detailed grounds and witness statements but was granted relief from sanctions to rely on late evidence due to the complexity and public interest nature of the case.

The case involved extensive witness evidence from both parties, including senior union officials and multiple Defendant officials involved in the pay remit process. The Claimants did not cross-examine the Defendant's witnesses, and the court applied the principle that in evidential disputes absent cross-examination, facts favoring the Defendant are assumed unless contradicted by objective evidence.

The 2018 Guidance was developed in the context of delegated pay responsibilities to departments, statutory management of the Civil Service, and a funding cap of 1% pay increase set in the 2015 Spending Review. The guidance allowed departments to award average pay increases between 1-1.5% without prior approval, with any increase above 1% to be funded internally. The X figure was determined through internal ministerial and departmental processes, with limited involvement or consultation with the Claimants.

Between March and June 2018, several meetings occurred between the Defendant, HM Treasury officials, and the Claimants. The Claimants assert that at the 4 June 2018 meeting, the Defendant promised meaningful consultation on the X figure after its disclosure and before publication. The Defendant denies any such promise, characterizing discussions as information exchange without formal consultation. The 2018 Guidance was approved on 18 June 2018 and published on 25 June 2018, with the X figure revealed at that time.

The Claimants subsequently raised concerns about the absence of consultation, including at a 27 June meeting with Ministers, and sought judicial review on grounds including breach of legitimate expectation and duty of inquiry.

Legal Issues Presented

1. Whether the Defendant made a clear, unambiguous, and unqualified promise to the Claimants to conduct meaningful consultation (in accordance with Gunning principles) on the X figure and the 2018 Guidance following disclosure of the X figure and prior to publication.
2. Whether the Defendant breached a duty of sufficient inquiry by failing to seek or take into account the Claimants' views on the X figure in setting the 2018 Guidance.
3. Whether the voluntary engagement and meetings held between the Defendant and the Claimants constituted proper consultation requiring compliance with the standards established in relevant case law.

Arguments of the Parties

Claimants' Arguments

• The Defendant promised meaningful consultation on the X figure after its disclosure and before publication, particularly at the 4 June 2018 meeting.
• The Defendant's failure to consult breached legitimate expectations arising from this promise and past conduct.
• The Defendant had a duty of sufficient inquiry requiring it to take into account the Claimants' views on the pay remit guidance and the X figure.
• The meetings and engagement between March and June 2018 amounted in substance to consultation, which was not properly conducted.
• The late disclosure of Defendant evidence prejudiced the Claimants, and the Defendant's conduct in the expedited timetable was deficient.

Defendant's Arguments

• No clear, unambiguous promise of meaningful consultation on the X figure or the 2018 Guidance was made at any time, including the 4 June meeting.
• The engagement with the Claimants was limited to information exchange and relationship management, not formal consultation.
• The pay remit guidance and X figure were matters of delegated authority and affordability, not subject to consultation with the Claimants.
• The Defendant complied with procedural requirements and acted rationally in setting the X figure without the Claimants’ input.
• The Defendant sought to comply with court orders and the late service of evidence was due to the complexity and expedited timetable, not bad faith.

Table of Precedents Cited

Court's Reasoning and Analysis

The court conducted a detailed factual and legal analysis focusing on whether the Defendant made a clear and unambiguous promise to consult meaningfully on the X figure and the 2018 Guidance, and whether the Defendant’s conduct met the standards of legitimate expectation and consultation under established case law.

The court found that the Claimants failed to identify any clear, unambiguous, and unqualified promise of meaningful consultation made by the Defendant, particularly at the critical 4 June 2018 meeting. The Claimants’ evidence showed no explicit agreement by the Defendant to consult, only that the Defendant would "reflect" on requests. The absence of dissent by Defendant officials in a fractious meeting was insufficient to establish a promise. The court concluded that the alleged agreement to consult was more accurately a list of demands by the Claimants rather than agreed undertakings by the Defendant.

The court accepted the Defendant’s evidence that the engagement with the Claimants was principally information exchange and relationship management, not formal consultation meeting the Gunning criteria. The timing of meetings, occurring after key ministerial approvals of the X figure, indicated that proposals were no longer at a formative stage, further negating the existence of a duty to consult meaningfully.

Regarding the duty of sufficient inquiry, the court held that the X figure and 2018 Guidance functioned as a cost control mechanism reflecting departmental affordability and delegated authority. The Claimants’ views were not relevant considerations legally required to be taken into account. It was rational for Ministers to decide the figure without consulting the Claimants.

The court also rejected the argument that the voluntary engagement amounted to consultation in the legal sense. Minor textual changes to the draft guidance and use of the term "consultation" in informal contexts did not transform the process into formal consultation. The court emphasized the distinction between positive engagement and legal consultation obligations.

In sum, the court found no breach of legitimate expectation or procedural impropriety in the Defendant’s conduct, and no irrationality in the decision-making process.

Holding and Implications

The judicial review application is DISMISSED.

The court held that the Defendant did not make a clear and unambiguous promise to consult meaningfully on the X figure or the 2018 Guidance, and that no legitimate expectation of consultation arose. The Defendant’s engagement with the Claimants was properly characterized as information exchange rather than formal consultation. The decision-making process was rational and lawful, and no duty of sufficient inquiry requiring consultation was breached.

The direct effect of this decision is to uphold the validity of the 2018 Guidance and reject the Claimants' challenge. The judgment does not establish new legal precedent but applies established principles of legitimate expectation, consultation, and administrative law to the facts of this case.