UNITED Policyholder Group v Attorney General for Trinidad and Tobago [2016] UKPC 17 provided the Privy Council with its second opportunity in recent years to consider the doctrine of legitimate expectations (the first being Paponette v Attorney General of Trinidad and Tobago [2010] UKPC 32; [2012] 1 A.C. 1). The appellants were a group of individuals who held policies in a company known as the Colonial Life Insurance Company (CLICO). On learning in 2009 that CLICO was in serious financial difficulty, the then Government of Trinidad and Tobago had publicly issued a number of assurances to the effect that it would undertake a vast restructuring programme in order to ensure that CLICO's contractual liabilities to such policyholders were fulfilled. Following its election in 2010, the new Government changed direction; it found that CLICO's financial difficulties were much graver than had been originally anticipated and, accordingly, determined that the Government would take a different course with the consequence that CLICO's liabilities would be fulfilled to a less generous degree than originally represented.

The appellants initiated judicial review proceedings arguing that the Government had acted unjustifiably in breach of their legitimate expectations. The Privy Council unanimously rejected the argument. It was prepared to assume, though it did not decide, that the assurances had given rise to legitimate expectations for the appellants. However, it determined that the Government's decision not to fulfil these expectations in their entirety was justified and lawful.

Lord Neuberger handed down the Privy Council's judgment and Lord Carnwath added a separate judgment in agreement. The most noteworthy aspect of Lord Neuberger's judgment concerns the way the doctrine of legitimate expectations applies in a “macro-economic” context. Where the Government issues an assurance that it will follow some particular economic policy and later retreats from the assurance on the basis that fulfilment is no longer economically viable, how ought the court to respond to an argument based on legitimate expectation? Lord Neuberger identified two main options. First, it could be said that such assurances about economic policy are simply incapable of generating legitimate expectations. Second, it could be said that legitimate expectations may arise, but that the court ought to assess the question of whether the economic arguments justify departure in an appropriately deferential manner. Lord Neuberger tended to the second option.

How, then, ought the court to approach the justification stage in such a case? Lord Neuberger did not provide an explicit answer to this question. Rather than asking whether the economic arguments provided a convincing justification for abandoning the assurances, Lord Neuberger seemed to begin from the position that the Government was best placed to make this assessment. His focus was on ensuring that the reasoning process used by the Government in deciding whether a policy change was justified was thorough, and was focused on the specific problems posed by the assurances. In particular, Lord Neuberger's judgment paid close attention to three issues: first, whether the Government had demonstrated serious consideration of the fact that assurances had been issued; second, whether the Government has shown understanding of, and close engagement with, the various available options open to it; and third, whether any other flaws affected the Government's reasoning.

United Policyholders Group, accordingly, provides a nice illustration of Laws L.J.’s suggestion in R. v Secretary of State for Education, ex parte Begbie [2000] 1 W.L.R. 1115 (CA) that, when assessing the justification of a departure from a past representation, the court should make use of a “sliding scale of review”. The Privy Council did not go as far along that scale as making its own assessment of whether the Government's change of direction was fair or unfair (R. v North and East Devon Health Authority, ex parte Coughlan [2001] Q.B. 213 (CA)). Nor, however, did the Privy Council limit itself to asking whether the Government's decision could be said to be a “manifest absurdity” – the test that has traditionally been deployed in the substantive review of economic decisions (R. v Secretary of State for the Environment, ex parte Hammersmith & Fulham LBC [1991] 1 A.C. 521 (HL)). The Privy Council, rather, made use of a point on the sliding scale somewhere in between, scrutinising the Government's reasoning in order to ensure that it demonstrated close and careful engagement with all aspects of the problem of whether departure was justified.

In his judgment, Lord Neuberger deliberately avoided the difficult task of setting out any sort of grand legal framework for understanding the legitimate expectation case law. Lord Carnwath, however, in a concurring judgment, faced this challenge head on. Put simply, for Lord Carnwath, there were two separate and core legal doctrines at play in this case law. The first was the principle against “inconsistency in the application of policy”. This principle required that “policy must be consistently applied” unless “good reason” could be demonstrated not to (R. (SK) (Zimbabwe) v SSHD [2011] UKSC 23; [2011] 1 W.L.R. 1299). The second was the doctrine of legitimate expectations, construed properly and “narrowly”. Two things are particularly notable about Lord Carnwath's explanation of the doctrine of legitimate expectations. First, the doctrine is held to apply only where a “promise or representation, which is ‘clear, unambiguous and devoid of relevant qualification’ has been given to an identifiable defined person or group”. And, second, the promise must have been given either “in return for action” by the applicant or the applicant must have “acted to [her] detriment” in reliance on the promise.

There is much to be said about Lord Carnwath's judgment and the framework he posited but three main observations may be made about it. First, there is an important sense in which Lord Carnwath's insistence that “policy must be consistently applied” is ambiguous. One possibility is that it could to refer to consistency between persons such that an applicant challenging a decision on this ground would need to show there was disparity between how the policy was applied to her and how it was applied to others. It is, however, difficult to imagine how an applicant in an ordinary case would be able to demonstrate this. The better view, accordingly, is that this principle requires consistency between the language and tenor of the policy and its application to the applicant.

Second, the idea of a “promise … given to an identifiable defined person or group”, which is central within this framework, is extremely ambiguous. Much of Lord Carnwath's judgment tends to suggest that such promises occur only in those “exceptional” cases, such as Coughlan and Paponette, where a public authority directly communicates to some individual or small group that it undertakes to treat them in a particular way. A significant problem in this regard, however, is that Lord Carnwath seemed to assume that United Policyholders Group, a case in which there was no such direct communication of undertaking, was itself a legitimate expectation case. It may be reasoned that United Policyholders concerned an “identifiable defined … group”, namely those persons who held policies with CLICO. However, this gives rise to difficult, and unaddressed, questions about how far the idea of an “identifiable defined group” can be extended. Could it be said, for instance, that solicitors firms specialising in compensation applications relating to miscarriages of justice (R. (Bhatt Murphy) v Independent Assessor [2008] EWCA Civ 755) or that persons interested in adopting a child from abroad (R. v SSHD, ex parte Khan [1984] 1 W.L.R. 1337 (CA)) form an “identifiable defined group”?

Third, Lord Carnwath's framework, if implemented, would often require an individual recipient of a public authority promise to demonstrate detrimental reliance in order to receive the court's protection. This is a change to the law which has been consistently resisted by the Court of Appeal (R. v Secretary of State for Education, ex parte Begbie [2000] 1 W.L.R. 1115 (CA)). There are very good reasons for the current legal position, the most important of which was memorably articulated by Schiemann L.J. in R. (Bibi) v Newham LBC [2001] EWCA Civ 607; [2002] 1 W.L.R. 237 in the following terms:

In other words, it is important to bear in mind that not every recipient of a public authority promise can commit the resources to rely to their detriment but that it may remain important to protect such individuals from the moral detriment which results when a public authority resiles without adequate justification.