Soft Law and Public Authorities

Remedies and Reform

Greg Weeks

• Publisher: Hart Publishing
• Year: 2016
• ISBN:
  9781782256892
• Edition: 1
• Topic: Law
• Subtopic: Public Law
• Index: Law

This book considers the phenomenon of soft law employed by domestic public authorities. Lawyers have long understood that public authorities are able to issue certain communications in a way that causes them to be treated like law, even though these are neither legislation nor subordinate legislation. Importantly for soft law as a regulatory tool, people tend to treat soft law as binding even though public authorities know that it is not. It follows that soft law's 'binding' effects do not apply equally between the public authority and those to whom it is directed. Consequently, soft law is both highly effective as a means of regulation, and inherently risky for those who are regulated by it. Rather than considering soft law as a form of regulation, this book examines the possible remedies when a public authority breaches its own soft law upon which people have relied, thereby suffering loss. It considers judicial review remedies, modes of compensation which are not based upon a finding of invalidity, namely tort and equity, and 'soft' challenges outside the scope of the courts, such as through the Ombudsman or by seeking an ex gratia payment.

1

Introduction

The expression ‘soft law’ is, at first sight, a non sequitur. Law is either ‘hard’—that is, enforceable, ultimately by the state—or it is not law. A norm that lacks formal consequences is foreign to the lexicon applied to describe a domestic legal system. Nonetheless … it may be the paucity of our legal lexicon, rather than the expression itself, which is deficient.¹

Catch-22 did not exist, he was positive of that, but it made no difference. What did matter was that everyone thought it existed, and that was much worse, for there was no object or text to ridicule or refute, to accuse, criticize, attack, amend, hate, revile, spit at, rip to shreds, trample upon or burn up.²

SOME NORMS HAVE consequences which are not formal but nonetheless remain powerful. Consider an agency’s formal statement of how it will interpret certain legislation, such as precedential views provided by the Australian Taxation Office (ATO) which represent the ATO’s interpretation of any laws administered by the Commissioner of Taxation.³ Alternatively, consider a Department’s guidelines as to how it will interpret certain ordinary English words, such as those which appear in legislative instruments in relation to a reference to the annual ‘turnover’ of a business, which are not defined in legislation.⁴ Consider further a revenue authority, which implemented guidelines contrary to legislation setting limits to the authority’s powers designed to collect tax in excess of that presently owed, in order to prevent the taxpayer (a building society) from receiving a windfall.⁵ For a variety of reasons, instruments like those described above effectively compel compliance, not only from the legally naïve or unwary, but also from relatively sophisticated parties.⁶ There can be little doubt that soft law has consequences and that they are significant.

Are these consequences formal? In one sense, they are not: soft law is not directly enforceable in court proceedings. This is the orthodox understanding of the effect of soft law. However, there are two ways in which soft law has effects which cannot be dismissed as merely informal. The first is that courts take notice of soft law. It is over 20 years since the Full Federal Court noted that ‘the proposition that government policy cannot bind [a public authority] does not imply that the policy can be ignored’.⁷ Soft law, particularly in the form of policy, can be effective in delivering the connected benefits of predictability and consistency. These are issues closely connected to the operation of the rule of law. The operation of the law should be understood prior to decisions, either administrative or judicial, being made. Likewise, arbitrary decision-making is opposed to the rule of law. Soft law is a recognised way of ensuring consistency between decisions on like sets of facts.⁸ Australian courts do not defer to administrative decision-makers on any legal issue, and specifically rejected the US Supreme Court’s Chevron doctrine.⁹ However, the Administrative Appeals Tribunal (AAT) has recognised since the earliest days of its existence that, in the exercise of its de novo merits review jurisdiction, it is generally better to apply a lawful administrative policy in reaching a decision on review than to risk the ‘inelegance’ of inconsistency.¹⁰

The second ‘formal’ effect of soft law is connected to the first: people will be subjected to real and legally effective consequences as a result of the operation of soft law. This may be, as discussed above, because soft law is given something close to normative operation by tribunals and courts. It may also be because people structure their dealings in reliance upon soft law which either undergoes a change or is subsequently interpreted in an unexpected way.¹¹ Consequences which materially affect individuals are in no way reduced or removed because they are not characterised as legally ‘formal’.

Soft law can also have effects which are harder to trace to precise outcomes but which are nevertheless significant. For example, soft law is frequently used as a method of confining the discretion of administrative decision-makers. In part, this is designed to bring consistency to those decisions, but soft law is also used as a method of ensuring that discretionary power is exercised accountably. Part I of this volume attempts to deal with these issues by looking at what soft law is and how it is used within domestic legal settings. It is already well understood in international legal scholarship, at least in part because the comparatively limited scope of primary legislation in international law has caused soft law to be an important and effective method of regulation.¹²

This book does not, however, have the definition and categorisation of soft law as its only—or even its main—concern. Rather, it seeks to explore the possibility that people who have been exposed to soft law regulation, and particularly those who have relied on soft law only to suffer detriment when it is breached, altered or removed, might be able to obtain legal redress for their losses. This possibility is dealt with in Parts II and III.

Judicial review is considered in Chapters five, six and seven as a potential source of remedies for people adversely affected by relying on soft law. In the Australian context, it is an ill fit for two main reasons. The first is that judicial review’s remedies attach to invalidity and soft law does not give them any purchase because it operates outside the valid/invalid dichotomy. The second is that judicial review’s remedies, as they apply in Australia, are procedural in nature and tend to provide no greater benefit to an applicant than the opportunity to have the decision-maker remake the decision according to law.

One of the key battlegrounds in common law judicial review over the last two decades—whether or not courts can or should give substantive remedies to otherwise successful claimants in judicial review matters—can be located within the broader debate as to whether every problem must have a court-centred solution. The affirmative response to this proposition is typified by Lord Bingham’s dictum that ‘the rule of public policy which has first claim on the loyalty of the law [is] that wrongs should be remedied’.¹³ Lord Bingham’s approach has not been followed uncritically.¹⁴ However, it is undoubtedly the case that England has embraced a broad judicial capacity to grant remedies for conspicuous unfairness amounting to an abuse of power.¹⁵ This is a path down which England has been followed by various common law countries, with the notable exception of Australia.¹⁶

The Australian reluctance to accept the proposition that every wrong must have a (legal) remedy can, as usual, be traced to the Constitution, but to a certain extent this feels like more than just a formalist excuse to stop an unwelcome debate before it starts.¹⁷ It is disingenuous to contend that the Australian judiciary as a whole (or at least a majority of the High Court) does not have a genuine concern about courts being invited to remedy unfairness which is ‘conspicuous’ (to whom?); or to intervene in matters featuring a ‘potentially unjust decision’ (by what standard?).¹⁸ The orthodox judicial view in Australia is that such broad judicial discretion is apt to be misused, taking individual judges genuinely motivated to prevent injustice outside the limits of the acceptable judicial role. There is no compelling evidence that this is part of a political agenda.¹⁹ But does it amount to sacrificing justice on the altar of consistency? Not at all, once we are prepared to accept that sometimes serious issues will be exposed in legal proceedings which are then remedied outside those proceedings.

Compensation generally has nothing to do with proving invalidity in either tort or equity, and Chapters eight, nine and ten examine whether remedies in these disciplines have the capacity to assist people who have suffered loss as a result of having relied on soft law. Chapter eight deals with important threshold questions regarding whether public authorities can ever be liable in tort; whether they can be liable where private individuals would not be liable; the particular difficulties in proposing public authority liability for pure omissions; and whether public authorities can be liable in equity where an estoppel is raised.

Chapters nine and ten use hypothetical scenarios to cover two main issues. The first of these is whether and how soft law might create a common law duty of care, how it would be used to do so, and how knowledge of the terms of the soft law might affect the previous answers. The second examines the importance of a plaintiff’s subjective reliance on a soft law instrument, both as a matter of tort and of equity. A public authority will be held liable in negligence for loss caused by the failure to apply a soft law instrument if the soft law in question includes a misrepresentation that the authority will act in accordance with it and an individual has relied reasonably on that representation to his or her detriment. However, this ground of claim is difficult to make out, reflecting the traditional reluctance of the common law to attach a duty of care to words rather than acts. At first blush, equity is even less promising, since the usual remedy where a person has relied to his or her detriment on a non-contractual statement or instrument is promissory estoppel. England allowed the creation of a doctrine of public law estoppel, later absorbed into the public law doctrine of substantive enforcement of legitimate expectations.²⁰ By contrast, Australia has been at best lukewarm on the issue and there has been no judicial consideration of the subject since 1990.²¹ It is generally held that an estoppel will not be enforced where it would cause a public authority either to act ultra vires or to fetter its statutory discretion.²² However, I suggest in Chapter ten that it is possible to harness the ‘remedial flexibility [which] is a characteristic of equity jurisprudence’ to fashion another response.²³ This is possible in as much as an estoppel is not a remedy but a circumstance which allows equity to be granted, usually in the form of an order to hold the representor to the substance of his or her representation.²⁴ It could also be an order for equitable compensation, which is a remedy that has fallen into disuse, but need not have done. Nonetheless, these chapters’ conclusion, which is inescapable, is that, although private law remedies are in some circumstances ...

Table of contents

• Cover
• Title Page
• Foreword
• Acknowledgements
• Contents
• Table of Cases
• Table of Legislation
• 1. Introduction
• PART I: THE RISE OF SOFT LAW: DEFINITIONS AND ISSUES
• INTRODUCTION
• PART II: COURT-BASED REMEDIES
• INTRODUCTION
• PART III: NON-JUDICIAL REMEDIES
• INTRODUCTION
• Index
• Copyright Page