On 29 July 2025 the Supreme Court delivered judgment in Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs [2025] UKSC 30. The judgment concerned two combined appeals by Dalston Projects Ltd and Mr Shvidler in connection with decisions made under the Sanctions and Anti-Money Laundering Act 2018(SAMLA) and the Russia (Sanctions) (EU Exit) Regulations 2019(2019 Regulations). The Supreme Court upheld the Court of Appeal's orders (see our blog on the Court of Appeal's decision) but for different reasons, and in the Shvidler appeal Lord Leggatt issued a forceful dissent.
The Supreme Court's decision provides greater clarity on the approach to be taken to proportionality assessment by first instance courts but leaves significant discretion for appellate courts going forwards.
Key points
- When a primary decision-maker's decision is challenged on the basis that it interferes with a right under the European Convention of Human Rights (ECHR), the court must assess for itself whether the interference is proportionate rather than restricting itself to a conventional review of the decision.
- However, when making its own assessment, the court must afford a degree of respect to the primary decision-maker's decision, particularly in situations involving special institutional competence.
- At the appellate level, the Court of Appeal (or Supreme Court) has the option of conducting its own fresh assessment of proportionality or considering only whether the lower court erred, depending on a non-exhaustive list of factors such as whether the appeal raises an issue of general application for the first time.
Background
As covered in our previous blog on the Court of Appeal's decision, Dalston Projects Ltd challenged a decision of the Secretary of State for Transport to detain a luxury yacht on several grounds including that the decision was an unlawful interference with its right to peaceful enjoyment of its property under Article 1 of the First Protocol (A1P1) of the ECHR. A British citizen named Mr Shvidler challenged a decision by the Secretary of State for Foreign, Commonwealth and Development Affairs not to revoke his designation as a sanctioned inpidual on grounds including that this decision was an unlawful interference with his rights under Article 8 and A1P1 of the ECHR. Both decisions were made pursuant to powers conferred by the 2019 Regulations, and both decisions were challenged under a route provided by section 38 of SAMLA, which emulates a challenge by way of judicial review.
The Administrative Court upheld both decisions, and then the Court of Appeal upheld the decisions of the Administrative Court. The main focus in the Supreme Court was the approach to determining whether the decisions were proportionate interferences with ECHR rights, both by first instance and appellate courts.
The Supreme Court's judgment
The standard of review in the Administrative Court
The Supreme Court confirmed that when assessing whether an interference with an ECHR right is proportionate, the first instance court must make its own assessment: "the court's function is not merely a secondary, reviewing, function dependent on establishing that the primary decision-maker misdirected itself or acted irrationally or was guilty of procedural impropriety."This is to be contrasted with judicial review in circumstances where there is no allegation of interference with an ECHR right, which will typically involve the conventional less exacting standard of rationality.
The manner of the proportionality review
Even when conducting its own assessment in an ECHR case, the court is not the primary decision-maker and cannot usurp the decision-maker's functions. Therefore, although the first instance court is to decide for itself whether an interference with ECHR rights is or is not proportionate, it "is required" to attach special weight to the judgments and assessments of a primary decision-maker with special institutional competence. The judgment described a spectrum between elements of substantive decision-making and elements of review on the part of the courts, with issues such as the importance of the right, the degree of interference and the extent to which the courts are more or less well placed to adjudicate on grounds of relative institutional expertise and democratic accountability affecting how much respect or deference should be accorded to the primary decision-maker. Such deference, especially but not only in matters of national security, has been a common theme in many judgments of late.
Lord Leggatt expressed "profound"disagreement on this point, on the grounds that courts are independent of and impartial to the dispute between the parties, that their core function is to apply reason to make decisions in an open forum where they are subject to public scrutiny and that historically courts, not the executive, have played the constitutional role of ensuring any interference with rights is just. Strikingly, he went so far as to suggest that "judges are abdicating their responsibility if in making these judgments they defer to the executive's own view that it has struck a "fair balance"".
The majority also built upon the judgement of Lord Sumption in R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2014] UKSC 60, not only for their reasons in relation to deference, but also as to the requisite degree of connection between a policy aim and a given measure. They held that "an aim which is of vital importance to the UK's national interest" may justify measures which advance those aims less directly, whilst a more direct connection might be required for less vital aims.
These points came to a head in the Shvidler appeal. The majority considered that, having regard to the vital importance of the policy aims in question and what they accepted as the rational connection between the designation and those aims, even severe interferences with Mr Shvidler's rights were proportionate. However, Lord Leggatt considered that the executive had advanced nothing more than implausible "armchair theories"about the connection between the designation of Mr Shvidler and the legitimate aims pursued by the sanctions regime.
The approach of appellate courts
The Supreme Court also considered at length what approach an appellate court called upon to consider the decision of a lower court ought to take to proportionality assessment. Should the appellate court conduct its own, fresh assessment of the proportionality of the relevant measure once more, or should it confine itself to reviewing the first instance court's assessment to see if it erred in law? Unfortunately, no clear answer was provided. Instead, the Supreme Court held that it was the task of the appellate court to determine whether the first instance court was "wrong", but this standard could be applied flexibly depending on the necessities of each case, meaning both approaches could be justified.
In terms of which approach should be applied in any given situation, the Supreme Court acknowledged that it would be desirable for the parties to have a reasonable idea of the approach to be applied in any particular case, but considered that it would be misleading to set out rigid categories of appeals (as the Court of Appeal had done). Rather, it provided a list of six "main factors"which might justify a fresh assessment, such as whether it is the first opportunity the appellate court has had to speak on a matter of general principle which might be common to numerous cases, and the nature of the measure in question.
Comment
The Supreme Court has sought to clearly explain the principles that first instance courts must follow when faced with a challenge to a proportionality assessment in an ECHR context. In relation to the role of appellate courts, however, the judgment is less clear, with much still left to the discretion and judgment of the appellate court in any given appeal. Whilst this does not provide certainty, it ought to be relatively clear in some appeals which approach is appropriate, based on the non-exhaustive factors listed by the Supreme Court. It will be the cases that do not obviously fall into either category that may be difficult to predict.
As to Lord Leggatt's dissent in the Shvidler appeal, it is notable that despite the strong differences of opinion expressed on the level of principle, his Lordship still agreed with the outcome in the Dalston appeal, and with the general concept of deference in appropriate cases, opining that "[a] court will be less equipped to assess the cogency of the reasons [for a decision] if or in so far as they are based on experience or special sources of knowledge or expertise which, as lawyers, judges do not have."Against this, however, he emphasised that judges are well able to assess the rationality of arguments and expressed strident views on the proper constitutional role of judges and the need to ensure limits on executive power. The disagreement does not appear to be on the concept of deference or respect for decision-makers as a matter of principle, but on how far that should go in cases where there is extreme impact on fundamental rights. It remains to be seen whether this notable, and perhaps surprising, dissent influences other judges' approach to deference.
From a sanctions perspective, those involved in challenging future designations will likely have particular regard to the Supreme Court's commentary on the rational connection between Mr Shvidler's designation and the aims of the Russia sanctions regime. The majority concluded that it is difficult to understand what factors may or may not exert influence on Russia in relation to the war and whether any sanctions measures have had, or may in future have, an influence or effect, but that the designation of Mr Shvidler contributed to the cumulative effect of the various sanctions measures imposed. However, Lord Leggatt emphasised that it is essential to scrutinise closely the reasons relied upon by the Government to support the claim that freezing an inpidual's assets is likely to make a material contribution to achieving the purposes of the sanctions regime and concluded that, in Mr Shvidler's cases, most of the reasons advanced by government witnesses were not even plausible. Whilst the effectiveness of sanctions depends on their cumulative effect, unless a measure is rationally connected to the desired objective, it cannot add or contribute anything to such cumulative impact. It is anticipated that arguments such as these will be deployed in future designation challenges, although it remains to be seen whether they will also impact the Government's approach to future designations.
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