The appeal in case of A v Her Majesty’s Treasury ( EWCA Civ 1187) will be the first case to be heard by the Supreme Court. The hearing will begin on 5 October 2009 and is listed for three days. The case was specially selected to inaugurate the Court. In an interview in the Independent on 25 September 2009, Lord Phillips said that
“We had discussions about which case we should take as the first case and we wanted to take one that had some general importance,” he said. “It is a case which I think the public will find interesting. It’s one of a number of cases which we have had to deal with where there may be a tension of human rights on the one hand and dealing with the challenge of terrorism on the other.”
At the heart of these cases is the issue of how far the Courts will go in controlling actions of the executive directed at suspect terrorists. In the Court of Appeal Lord Justice Sedley made it clear what he believed to be at stake
This case is not simply about the making of executive orders which freeze individuals’ assets to a point where they are effectively prisoners of the state. It is about the steady encroachment of executive government on liberties which it is its duty to respect and protect. Against such encroachments the only resort of the individual is to the courts.
The appeals are brought by six people who have been designated by the Treasury under the Terrorism (United Nations Measures) Order 2006 (‘the Order’). Once designated under the Order, a person’s assets can be frozen indefinitely, and he or she can be banned from access to any form of property, money or ‘economic resource’, unless the Government allows this by way of a licence. These restrictions were described by the Court of Appeal as ‘swingeing’. The Treasury can ‘designate’ a person without the need for any criminal or civil finding that the person has been involved in terrorism.
The Government made the Order on 10 October 2006, relying on a broadly-worded power under s.1 the United Nations Act 1946. It claimed to be giving effect to UN Security Council Resolution 1373, which calls on member states to freeze the funds of people in their territories who commit acts of terrorism. For the background to the UN Sanctions committee, see this article in the New Law Journal. The ECJ’s decision in Kadi that the EU’s terrorist asset freezing regime was unlawful is discussed in a recent lecture by Lord Clarke of Stone, the then Master of the Rolls.
Designation under the Order clearly has a drastic impact on the designated person’s life. However, because the Order is simply an executive measure, it was made without any Parliamentary scrutiny or debate. The appeal raises important questions about the power of the Government to interfere with rights and freedoms in the fight against terrorism, the proper processes for creating such wide-ranging powers, and the safeguards which should be provided for people whom the Treasury seeks to designate.
In the courts below, Collins J quashed the Order, on the basis that (1) the Order fell outside the power to legislate under the United Nations Act, since it gave the Treasury a power to designate a person who simply ‘may be’ involved in terrorism; (2) because it did not contain adequate procedural safeguards for the designated person, and (3) because the criminal offences created by the Order potentially infringed the principle of legal certainty, and required consideration by Parliament.
The Court of Appeal reversed this decision, by a 2-1 majority. On point (1), Clarke MR, Sedley LJ and Wilson LJ agreed with Collins J that the words ‘or may be’ made the power too broad, but considered that the power could be saved by deleting those words. On (2), Clarke MR and Wilson LJ held that the Court had power to create its own procedural safeguards, despite the fact that these were not provided for in the Order. This included the appointment of special advocates to represent the interests of the designated person at a ‘closed’ hearing (a hearing from which the person and his usual legal advisers are excluded). On (3), they held that the criminal offences were sufficiently clearly defined, and were proportionate to the aims of the scheme. Sedley LJ dissented on these two points. In two paragraphs, Clarke MR rejected the argument that the Order should properly have been made by primary legislation.
The first issue which the Supreme Court will consider is whether the power to make orders under s.1 of the UN Act 1946 extends to provisions which interfere with fundamental rights. The appellants argue that the broad wording of s.1 is constrained by the constitutional principle of legality, which requires that only Parliament can legislate on matters affecting fundamental rights. They argue that such drastic measures cannot be made by executive order, and that Parliament should have been given the chance to consider whether such a far-reaching regime is required to give effect to the UN resolution.
The second issue which the Court will decide relates to the criminal offences created by the Order. It is an offence, carrying up to 7 years in prison, for anyone to use, alter, move, allow access to or transfer the funds of a designated person, or to make funds or economic resources available to such a person. These are strict liability offences, subject only to a very narrow defence. The appellants argue that these offences are too vaguely defined, and that their burdens are disproportionate to the aim of combating terrorist financing. It is a potential criminal offence, for example, to give a designated person a cigarette or a bar of chocolate.
The third issue before the Court concerns the procedures by which a person can challenge their designation. The Order as originally passed allowed a designated person to apply to the High Court to have their designation ‘set aside’, but provided no procedures for this to happen. The Counter Terrorism Act 2008 introduced such procedures, including the use of special advocates. However, two important questions remain to be decided: (1) whether the appellants’ rights were breached during the 2007-2008 period when there was no process for them to challenge their designation; (2) whether the Court of Appeal was right that the court has an inherent power to appoint special advocates to represent the designated person at a ‘closed’ hearing. Parliamentary authority has usually been required to allow the use of special advocates, given the obvious potential for unfairness where any person is excluded from a hearing in their own case.
The importance of these issues is clear. Although none of the Judges who have heard the case so far have accepted the Government’s arguments in full, they have been split 2:2 on the crucial issue of the validity of the orders. A panel of 7 Justices of the Supreme Court – Lords Phillips, Hope, Rodger, Walker, Lady Hale, and Lords Brown and Mance – will consider the case on 5, 6 and 7 October.