UK: Does the Human Rights Act Have Retrospective Effect?

Last Updated: 19 February 2004


Can the Human Rights Act 1998 (the HRA) be relied upon in respect of events or transactions which took place before it came into force? The recent judgment of the House of Lords in Wilson and Others v Secretary of State for Trade and Industry [2003] UKHL 40 clarifies the test by which primary legislation, in this case the HRA, impacts upon rights and obligations arising from transactions entered into before the statute came into effect i.e. 1 October 2000.

The HRA effectively incorporates the majority of rights in the European Convention on Human Rights (ECHR) into UK law. Included amongst those rights are Article 6(1) of the ECHR which guarantees a fair, expeditious and public trial of criminal charges and disputes about a person's civil rights and obligations, and Article 1 of the First Protocol of the ECHR which guarantees the right to peaceful enjoyment of possessions. The case also demonstrates the House of Lords' approach to these Articles in a contractual setting.


The facts of the case related to an agreement between a lender and borrower which was a regulated agreement for the purposes of the Consumer Credit Act 1974 (the Act). A regulated agreement is deemed not to be properly executed unless it contains all of the prescribed terms set out in the Act. The consequence of failure to include all the prescribed terms in a regulated agreement is that the courts are precluded from enforcing the agreement by section 127(3) of the Act.

The borrower commenced proceedings in the County Court, claiming that the agreement was unenforceable because it did not contain all of the prescribed terms stipulated in the Act. The County Court held that the agreement was enforceable, but the Court of Appeal allowed the borrower's appeal in circumstances where one of the prescribed terms was not correctly stated.

The Court of Appeal was mindful that section 6(1) of the HRA makes it unlawful for a public authority to contravene an ECHR Article, and section 6(3) of the HRA defines public authorities to include courts. The Court of Appeal was therefore concerned not to infringe ECHR rights. It went on to hold that the exclusion of a judicial remedy under section 127(3) was disproportionate to the legitimate policy objective of ensuring that particular attention was paid to the inclusion of certain terms in a credit agreement. The Court of Appeal accordingly made a declaration pursuant to section 4 of the HRA that section 127(3) was incompatible with Article 6(1) and Article 1 of the First Protocol of the ECHR.

The House of Lords unanimously took a different view to the Court of Appeal.

Retrospective application of the HRA?

Their Lordships held that the Court of Appeal had erred in making a declaration of incompatibility. The court considered section 3 of the HRA which provides that, so far as possible, primary and subordinate legislation must be read and given effect in a way which is compatible with ECHR rights.

Lord Nicholls said that the Act was to be interpreted without reference to section 3 of the HRA, because Parliament could not have intended that section 3 should have the effect of altering parties' existing rights and obligations under the Act. This would offend against the common law presumption that legislation does not have retrospective effect. Accordingly, no question arose of the court making a declaration of incompatibility under section 4 of the HRA. It was only when a court was called upon to interpret legislation in accordance with section 3 that it could proceed to make such a declaration.

In Lord Hope's view the purpose of section 3 was to ensure that legislation was read and given effect in a way that was compatible with ECHR rights, so far as it was possible to do so, whenever the legislation was enacted. To restrict the application of section 3 to events or transactions after 2 October 2000 would be contrary to the intention of the legislation and incapable of being read into it by necessary implication. Accordingly there would be cases where a more relaxed approach would be appropriate (but this was not one of them). Lord Scott also stated that the presumption that a statute is not intended to have retrospective effect can be rebutted if it appears to be sufficiently clear that it was the intention of Parliament to produce the result in question.

The court as a public authority

The House of Lords disagreed with the Court of Appeal's reasoning that, as courts are required by section 6(1) of the HRA to act in a way which is compatible with ECHR rights, it must have regard to the facts as they were at the time it made its order on the basis that its order was an "act" for the purposes of section 6(1).

Lord Nicholls said that there was no question of the court acting unlawfully because its decision in these proceedings gave effect to the mandatory provisions of the Act, and an order giving effect to provisions of primary legislation is excluded from the scope of section 6(1) by section 6(2)(a). Lord Scott noted that the function of the court in civil litigation between private citizens was to adjudicate on their rights and obligations in issue and it had a duty to grant the requisite relief to reflect those rights and obligations. For the court to do so was not an unlawful act under section 6(1).

No breach of the HRA

Although it was strictly unnecessary to consider the further issues arising out of the Court of Appeal's judgment, having regard to the importance of the issues, their Lordships proceeded to consider what the position would have been had the HRA applied.

It was argued that section 127(3) of the Act breached Article 6(1) of the ECHR, which guarantees a right of access to a court, in that the lender was denied recourse to the court for the determination of whether the loan agreement should be enforced. The House of Lords unanimously disagreed with this contention. Lord Nicholls said that Article 6(1) of the ECHR did not apply in the present case because although section 127(3) restricted the rights acquired by a lender under a regulated agreement, it did not bar access to the courts to decide whether the case was caught by the restriction. He concluded that, in barring a court from exercising any discretion over whether to make an enforcement order, Parliament did not encroach on territory which ought properly to be the province of the courts in a democratic society. Lord Scott held that Article 6 provided a procedural guarantee of the right to have issues judicially determined and was not concerned with substantive law such as section 127(3) of the Act.

In respect of Article 1 of the First Protocol, Lord Nicholls held that the ban on enforcement of security and contractual rights prescribed by section 127(3) amounted to a deprivation of possessions within the meaning of Article 1. However, he accepted that section 127(3) pursued a legitimate aim in that the fairness of a system of law governing the contractual or property rights of private persons was a matter of public concern. Holding that a lender's restitutionary remedy (if he had one) was a matter to be taken into account when considering whether section 127(3) was compatible with Article 1 of the First Protocol, he concluded that it was proportionate for Parliament to properly make compliance with the formalities required by the Act an essential prerequisite to enforcement. On this basis, section 127(3) was compatible with Article 1 of the First Protocol.

Lords Hope, Scott and Rodger did not find Article 1 of the First Protocol engaged on the basis that: the loan agreement was an improperly executed agreement and was therefore always subject to the restriction on its execution under section 127(3) (Lord Hope); Article 1 was directed to interference with existing possessions or property rights whereas the lender in this case never had a pre-existing right to enforce repayment against the borrower (Lord Scott); and because Parliament did not intend Article 1 to apply in relation to vested rights or pending proceedings (Lord Rodger).

Recourse to Hansard in compatibility cases

Their Lordships recognised the new role imposed upon the courts by the HRA, namely the evaluation of the effect of domestic legislation in terms of ECHR rights. They considered that the courts would be failing in this role if they excluded from consideration relevant background information such as ministerial statements. To that limited extent there might be rare occasions for the courts when conducting the compatibility exercise under section 3 of the HRA to have regard to matters stated in Parliament, although such an occasion did not arise in this case.


The House of Lords' judgment in Wilson and Others v Secretary of State for Trade and Industry confirms the importance of the presumption against retrospective effect in the interpretation of primary legislation, including the HRA. However, the judgment does not mean that section 3 of the HRA will never apply to pre-HRA events. Whether it does so or not will depend on the application of the presumption against retrospective effect in the context of the particular issue before the court.

One important aspect of this case is that the HRA point was raised by the Court of Appeal of its own motion and then also considered by the House of Lords. The decision demonstrates the potentially far-reaching implications of the HRA in circumstances where the court has an obligation under the HRA to detect potential breaches of the ECHR and deal with them, proactively if necessary.

Article by Andrew Lidbetter and Nusrat Zar

© Herbert Smith 2003

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.

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