UK: The Westminster District Audit Case: Generally Applicable Legal Principles

Last Updated: 21 December 2001
Article by Andrew Lidbetter

The Westminster City Council district audit case, Porter v Magill [2001] UKHL 67 with its twists and turns has made the headlines on a number of occasions. Most recently the House of Lords has given judgment in favour of the auditor against Dame Shirley Porter and Mr Weeks and certified that a sum of approximately £20 million be paid by them to the Council. The policy of targeting marginal wards for the sale of council housing stock was held by the House of Lords to be unlawful. Lord Bingham stated it was "a deliberate, blatant and dishonest misuse of public power" (para 48). The purpose of this update is to highlight the points of general application for all regulators which emerge from the various judgments.

The relevant administrative law principles

Lord Bingham stated substantive principles which, although set in a local government context, are of application to all regulatory authorities (para 19):-

(1) Powers conferred on a local authority may be exercised for the public purpose for which the powers were conferred and not otherwise; and

(2) Such power are exercised by or on the delegation of councillors. It is misconduct in a councillor to exercise or be party to the exercise of such powers otherwise than for the public purpose for which the powers were conferred.

Looking specifically at the local government audit regime Lord Bingham added that if councillors misconduct themselves knowingly or recklessly it is regarded by the law as wilful misconduct and if this is found to have caused loss to a local authority the councillor is liable to make good such loss to the council. These principles are not new but their application to the facts led to judgment being given against the two councillors.

One particular practical point emerges from the application of the principles in the present case. Lord Bingham referred to the debate about whether the councillors were able to rely on legal advice. He noted that the lawyer concerned had not been given access to all relevant information. He had "received no written instructions and gave no written advice" (para 39). Also, the lawyer had not been asked all the questions which should have been put to him. In this instance he had not been asked whether, if the policy of designating council properties for sale in marginal wards for the purpose of securing electoral advantage was unlawful, would the policy have become lawful if, with the same objective, and in order to conceal the targeting of sales in marginal wards, the designated sales policy was extended across the City of Westminster. Lord Bingham added that no one could have had any doubt what the answer would have been if it had been asked. The message is simple: in order to be able to justify actions by reference to legal advice all the relevant information must be given to the lawyer, it is desirable to have advice in writing and the right questions should be asked.

European Convention on Human Rights: Civil or Criminal?

The Court was faced with an argument that the proceedings were criminal for the purpose of Article 6 of the Convention. However, Lord Hope noted that the court should look at substance rather than form, look behind appearances and investigate the realities of the procedure. He said the nature of the offence and nature and degree of the severity of the sanction must also be taken into account (para 84) (and see Engel v Netherlands (No 1) (1976)1 EHRR 647). In the present case the object of the procedure was to compensate the body concerned and the measure of the compensation was the amount of the loss suffered. There could be no fine or imprisonment although someone could be disqualified from being a member of a local authority (para 85). Lord Hope therefore concluded that the measures available in the present case were "compensatory and regulatory rather than penal in character". Thus it can be seen that where a regime is aimed at restitutionary compensation rather than punishment it should be regarded as civil rather than criminal for the purpose of Article 6 of the Convention. This does not, however, mean that Article 6 will not apply because part of Article 6 (Article 6(1)) also applies to determinations of civil rights.

Independence and Impartiality

Article 6 requires determination by an "independent and impartial tribunal". It was pointed out that the local government audit regime effectively imposes on the auditor the role of "investigator, prosecutor and judge". However, Lord Hope said the auditor's conduct must be looked at as a whole and in the context of the procedure which is laid down in the statute. The Strasbourg approach is that even if an adjudicatory body does not comply with Article 6(1) there is no breach of the article if the proceedings before that body are subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of Article 6(1) (para 93) (Bryan v United Kingdom (1995) 21 EHRR 342, Kingsley v United Kingdom App no 35605/97, 7 November 2000). Lord Hope noted that in the present case the Court has not only the power to quash the auditor's decision but it also has power to re-hear the case and to take a fresh decision itself in the exercise of the powers given to the auditor. Crucially, therefore where it is sought to argue that a regulatory regime is compliant with the requirement of independence because of an appellate or review mechanism, whether or not it is compliant will depend (amongst other matters such as the underlying fairness of the administrative decision making stage) on the extent of the appellate or reviewing function see, for example, Preiss v General Dental Council [2001] All ER (D) 239 (considered in our update no. 1).

Apparent Bias

The auditor at one stage gave a press conference at which he referred to his provisional findings. Lord Hope referred to this as an "error of judgment" but said that it did not amount to apparent bias (para 105). In his discussion of this episode Lord Hope reviewed the law relating to the test for apparent bias. This is an important part of the judgment. The House of Lords in R v Gough [1993] AC 646 had formulated a test whereby "the Court should ask itself whether, having regard to those [relevant] circumstances, there was a real danger of bias on the part of the relevant member of the tribunal in question". This test had been criticised on the ground that it could tend to emphasis the court's view of the facts and to place inadequate emphasise on the public perception of the irregular incident. The Gough test was reviewed by the Court of Appeal in Re Medicaments and Related Classes of Goods (No. 2) [2001] 1 WLR 700 in the light of Strasbourg jurisprudence. Lord Phillips stated:-

"The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased".

In Magill v Porter Lord Hope said that the House of Lords would approve the "modest adjustment" of the test in Gough and would adopt Lord Phillips' text but would delete the reference to "a real danger". Lord Hope said (para 103) "the question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal were biased". Although this adjustment to the test is indeed modest it is very important that when regulatory authorities consider who can take part in the decision making process they address themselves correctly to what is now the current test. A failure to do so could lead to a decision being struck down for apparent bias.

Unreasonable Delay

Article 6 requires that a determination of civil rights or of a criminal charge be within "a reasonable time". Someone complaining under this head does not need to show prejudice. (There is also a similar common law right although there is debate as to whether it is necessary to show prejudice in relation to this right.) The reasonableness of the duration of proceedings must be assessed according to its circumstances and includes the complexity of the case, the applicant's conduct and the manner in which the case was dealt with by the administrative and judicial authorities (Konig v Germany (1978) 2 EHRR 170). Lord Hope noted that the Divisional Court had referred to the investigation as "vast" and its "mammoth nature". The auditor had not caused delay by inaction (para 113). In the circumstances there had not been unreasonable delay.

That the House of Lords carefully considered delay in the context of Article 6 serves as a reminder to regulators that inactivity in dealing with a matter could cause them difficulties. Finally, on this point Lord Hope noted the debate as to whether, had there been unreasonable delay, the correct approach would have been to quash the auditor's certificate or to award damages (para 115).


Although Magill v Porter has caught the attention because of its high profile nature, the case has lessons for regulatory authorities more generally. In the main these emerge from the procedural points which were argued and, in particular, the House of Lords has taken the opportunity to modify the test applicable to the law of apparent bias.

© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.