This is the second in our new series of Good Decision-Making Guides for Public Bodies. These Guides highlight what is best practice in decision-making and offer simple and practical tips to reduce the risk of challenge to your decisions.
THREE FUNDAMENTAL PRINCIPLES
There are three fundamental principles of good decision-making that decision-makers in public bodies must always have in mind when making decisions.
The decision-making body must:
i. have the legal power to make the decision.
ii. have regard to any relevant factors and exclude any irrelevant considerations.
iii. make a rational decision.
In this Guide we look at each of these principles.
1. HAVE THE LEGAL POWER TO MAKE THE DECISION
The decision-making body must have the legal power to make the decision. If it does not, it will be acting beyond its powers (or ultra vires) and the decision will be invalid.
The power to make a decision may be:
- Express: set out in primary legislation
(statutes) or secondary legislation (orders, rules, regulations,
For example, the Central Bank (Supervision and Enforcement) Act 2013 gives the Central Bank an express power to "give a direction in writing to [a] regulated financial service provider... to take [specified] actions."
- Implied: a power will generally only be implied where (i) it is justified by the statutory context; (ii) it is not of such a nature that you would expect to see it set out specifically; and (iii) it is consistent with the statutory scheme (see example below).
- Incidental: a power to do whatever is
incidental to or consequential upon specific statutory powers. The
extent of these powers will depend on the general policy underlying
the legislation in question.
For example, the Personal Injuries Board Assessment Act 2003 gives the Injuries Board "all such powers as are necessary or expedient for, or incidental to, the performance of its functions under this Act."
The power to make a decision must be exercised properly. In some cases, the purposes for which a power may be exercised will be set out in the relevant legislation. Where the purpose of the power is not set out explicitly, it must be determined by implication from the subject-matter, scope and purpose of the legislation as a whole.
2. CONSIDER ALL RELEVANT FACTORS, EXCLUDE IRRELEVANT FACTORS
The decision-maker must have regard to all relevant factors which are before it and must disregard any irrelevant factors.
Relevant factors: In some cases, legislation will set out the factors which the decision-making body should or must take into account. Always check whether the list of factors is intended to be exhaustive. Look out for words such as "in particular" or "including" (e.g. the decision-making body shall have regard "in particular to..."). This suggests that the factors listed are not exhaustive and there may be other relevant factors arising from the circumstances of the case.
It is important to identify which factors are mandatory (i.e. must be taken into account), and which factors are discretionary (i.e. can be taken into account).
Irrelevant factors: Taking account of an irrelevant consideration may also provide grounds for judicial review.
Decision-making bodies may sometimes be required to "have regard to" a particular opinion, report, guideline, recommendation etc. This requires the decision-making body to give reasonable consideration to the particular matter, but not to follow it without question.
3. MAKE A RATIONAL DECISION
Your decision must be reasonable. This does not mean that your decision must be absolutely correct or that a court or other body faced with the same facts would have reached the same decision. It means that in making the decision, you must have applied logical and rational principles.
The courts recognise that decision-making bodies have specialist expertise and knowledge in their given areas and that they should be free to make decisions without undue interference from the courts. The courts will generally only quash a decision on the ground of unreasonableness where:
- it plainly and unambiguously flies in the face of fundamental reason and common sense (the Keegan test); or
- there was no relevant material before the decision-making body to support the decision (the O'Keeffe test).
If the court finds that a decision is unreasonable, it will not remake the decision; it will usually quash it and send it back to the original decision-making body for a fresh consideration.
- Before you make a decision, carefully examine the source of your decision-making power and ascertain what you can and cannot do.
- Make sure you have all the information you need. If you do not, get it.
- Check that the facts on which you propose to base your decision are accurate and up to date.
- Keep a written record of the factors that influenced your decision and that factors you considered irrelevant.
- Apply logical and rational principles when making your decision.
In addition to complying with each of the above principles, decision-makers must apply fair procedures. We will discuss this in Guide 3.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.