Tom Cassels, partner, Baker & McKenzie
Cynical litigation will remain par for the course
17 October 2011
24 September 2013
Dismissals of football club employees shortly before sale of the club by the administrator not automatically unfair
4 December 2013
30 October 2013
16 September 2013
2 October 2013
The decision by the Government and the Mayor of London that the Olympic Stadium should remain in public ownership has put the judicial review process firmly in the spotlight.
Sports minister Hugh Robertson has said the decision was taken to end the “legal paralysis” and uncertainty caused by the applications by Tottenham Hotspur FC and Leyton Orient FC for a judicial review of the Olympic Park Legacy Committee’s decision to award West Ham FC the Olympic Stadium. There is a sense, however, that there is more to the decision than legal process concerns.
For example, it comes nearly seven weeks after the High Court granted Spurs and Leyton Orient permission for their applications to proceed and only a week before they were scheduled to be heard. Additionally, it would seem, from the High Court’s timetable, that it is taking steps to expedite the case, while there does not appear to be any suggestion that Spurs or Leyton Orient were using the judicial review process to disrupt the process.
It is unclear, then, why it has taken so long to come to this decision when it could have been made as soon as permission was granted - if the sole concern was process.
One possible explanation concerns the primary issue that was to be heard: whether the £40m loan Newham Council agreed with West Ham amounted to unauthorised state aid under EU law. It has been reported that this loan was the subject of a complaint to the European Commission - in other words, a ’Brussels torpedo’.
However, judicial reviews involving state aid always carry the possibility of such complaints and the courts routinely manage these. So in process terms, this does not appear to support concerns about delay. And again, if this was the concern the aid issue was clear so why has it taken so long to end negotiations? Perhaps this indicates that there was concern about outcome as opposed to process.
Whatever the reasons, this case highlights the issue of litigation being used cynically in public law cases.
Put starkly, the English system allows claimants to adopt strategies that deliver commercial outcomes via delay and uncertainty that are not available on the merits. A prime example concerns regulated industries where operators use litigation to delay the implementation of less advantageous regulations so they can continue to earn higher profits.
The judicial review process includes checks to combat this, such as the requirement for the High Court to give permission, while the threat of costs orders acts as a deterrent. Some claimants, however, take the view that certain courts and tribunals are less effective at identifying and stopping cynical litigation and so are more willing to use litigation as a delaying tactic.
Without a major rethink of the litigation process it is hard to see how claimants with arguable cases, but whose real intent is delay, can be prevented from adopting such strategies. Cynical litigation will likely continue to be a feature of our system and defence strategies will need to continue anticipating it.
In the present case, despite the ill-feeling, there is nothing to suggest that Spurs and Leyton Orient used litigation cynically. It probably represents a victory for Leyton Orient over West Ham and Spurs - something that does not happen often on the park. Spurs have lost leverage over public funding for their existing ground while West Ham have to go through another bidding process. Leyton Orient can participate in the new bidding process too, on which they may well have something to say following Mayor of London Boris Johnson’s statement that “we will keep [the stadium] in public hands but effectively rent it to a football club - almost certainly West Ham”.
Tom Cassels was assisted with this article by associate Martin Montague