UK: Guidance From The Supreme Court On Statutory Construction Emphasises Importance Of Context

In R. (on the application of VIP Communications Ltd (In Liquidation)) v Secretary of State for the Home Department [2023] UKSC 10, the Supreme Court considered issues of statutory construction in the context of conflicting legislative provisions, and confirmed that the Secretary of State did not act ultra vires in directing Ofcom to refrain from carrying out its statutory duty.

Key Points

• This decision provides authoritative guidance on the approach to statutory construction when a public body has apparently conflicting statutory duties.
• The courts should consider the wider context and purpose of a statutory scheme when considering legislation, to ascertain Parliament's intention.
• There is no general principle of statutory construction that, in the absence of clear words, a statutory power to give a direction cannot extend to directing a person not to comply with a statutory duty under the same or another statute.

Background

Section 8(4) of the Wireless Telegraphy Act 2006 ("WTA") places a duty on Ofcom to make exemption regulations relating to licencing requirements if certain conditions are met. However, Ofcom is also subject to a duty under section 5(2) of the Communications Act 2003 ("CA") to act in accordance with any direction it receives from the Secretary of State on limited grounds, including national security. This judgment considered whether Ofcom's duty under section 8(4) of the WTA is overridden by its duty under section 5(2) of the CA. Specifically, the court assessed whether under section 5(2) the Secretary of State could instruct Ofcom not to comply with its duty under section 8(4).

In 2017, Ofcom announced its intention to make regulations under section 8(4) exempting commercial multi-user gateways ("COMUGs") from licencing requirements. COMUGs are gateway devices that allow calls or text messages to be routed from landlines to mobile networks. The Secretary of State subsequently issued a conflicting direction to Ofcom, under section 5(2) of the CA, not to make the regulations. This direction stemmed from national security and public safety concerns since COMUGs can conceal a caller's communications data, such as their location and identity.

The claimant telecommunications company sought judicial review of the Secretary of State's direction. Both the High Court and the Court of Appeal held that the Secretary of State acted ultra vires by directing Ofcom to refrain from making an exemption regulation, as "the court will not construe a statutory power to give a direction as extending to giving a direction not to comply with statutory duties under that or another statute, in the absence of clear words to that effect", and there were no such clear words in section 5 of the CA.

Judgment

The Supreme Court allowed the Secretary of State's appeal and dismissed VIP Communications' application for judicial review. In finding that the Secretary of State did not act ultra vires, the court considered general principles of statutory construction and what Parliament's intention was when enacting section 5 of the CA.

The court did not agree that there was a general principle of statutory construction that, in the absence of clear words, a statutory power to give a direction cannot extend to directing a person not to comply with a statutory duty under the same or another statute. This case was to be distinguished from cases where a legislative provision is said to override fundamental rights or the rule of law. Where fundamental or constitutional rights are not involved, the normal principles of statutory construction apply. It will be relevant to the assessment of rival interpretations of a provision that, on one view, it would permit a direction to be given that has the effect of precluding the performance of what would otherwise be a statutory duty, but that is no more than one of the factors which will need to be considered in arriving at the proper construction of the provision.

The court noted that the correct approach to statutory construction is to look at the wider context of the legislative scheme and the purpose of provisions within that scheme to ascertain Parliament's intention. Although the apparently conflicting provisions here appeared in different statutes, they were described as dealing with a single system of regulation, such that they should be construed as if they were contained in a single statute. It was significant that national security is a core function of government, and therefore, such matters are reserved to the Secretary of State by the legislative scheme in section 5 of the CA with the regulator "in no sense equipped to have responsibility for them". This is reflected in the fact that Ofcom is given no power under the legislation to have regard to national security and cannot refuse to make exemption regulations on that ground itself. Before the CA was enacted, the Secretary of State could refuse exemption regulations based on national security grounds, and the CA subsequently preserved this power by virtue of section 5. Lord Richards observed that the Court of Appeal's approach to section 5(2) would mean that the Secretary of State has power to direct Ofcom to take some positive step, or to take action in a particular way, but does not have power to direct Ofcom to refrain from taking a particular step where, in the reasonable and proportionate judgment of the Secretary of State, that step would prejudice national security interests. Lord Richards described this as an "improbable reading".

Comment

This decision provides useful guidance on statutory construction when a public body has apparently conflicting duties, illustrating that outside the area of fundamental and constitutional rights, clear words are not always required to confer a power to override even primary legislation. The judgment highlights the need to interpret legislation with reference to the wider context and overall purpose of the statutory scheme, rather than take a restrictive approach to construction. However, it is worth bearing in mind that the context here was national security, which is an area accepted as being within the province of central government. The court may take a different approach in another context.

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