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This appeal, previewed here, was the first to be heard by the new Supreme Court, and was specially chosen for its constitutional significance.  Judgment was given on  27 January 2010 ([2010] UKSC 2). Lord Phillips observed that ‘It is particularly appropriate that these should be the first appeals to be heard in the Supreme Court of the United Kingdom, for they concern the separation of powers.’ [85] 

The appeal concerned the lawfulness of draconian asset-freezing powers adopted by the government, to be used against those suspected of involvement in terrorism. The powers were adopted in order to implement UN Security Council resolutions on terrorist finance. The government passed them by way of Order in Council, without any Parliamentary scrutiny or debate.

In a series of lengthy judgments, the seven-judge Court held that the Orders made were unlawful, for reasons summarised below. Lord Brown dissented in relation to one of the Orders. The judgments amount to an emphatic reassertion of fundamental rights, and the importance of the parliamentary process, in the face of repressive executive action supposedly required by the international fight against terrorism.

Giving the leading judgment, Lord Hope noted that the Orders at issue

‘lie wholly outside the scope of Parliamentary scrutiny. This raises fundamental questions about the relationship between Parliament and the executive and about judicial control over the power of the executive.’ [5]

Much was at stake in the appeals: recalling Lord Atkin’s famous dissent in Liversidge v Anderson [1942] AC 206 (the now universally condemned case in which the majority of the House of Lords upheld regulations which allowed uncontrolled executive detention), Lord Hope stated that:

‘The consequences of the Orders that were made in this case are so drastic and so oppressive that we must be just as alert to see that the coercive action that the Treasury have taken really is within the powers that the [United Nations Act 1946] has given them. Even in the face of the threat of international terrorism, the safety of the people is not the supreme law. We must be just as careful to guard against unrestrained encroachments on personal liberty.’ [6]

Lord Hope considered that, while it is imperative for the UK to ensure that it fulfils its obligation under the UN Charter to implement Security Council resolutions, ‘these resolutions are the product of a body of which the executive is a member as the United Kingdom’s representative. Conferring an unlimited discretion on the executive as to how those resolutions, which it has a hand in making, are to be implemented seems to me to be wholly unacceptable. It conflicts with the basic rules that lie at the heart of our democracy.’ [45] He noted that other states ‘have not found it necessary in this context to rely exclusively on an unlimited delegation of the power to give effect to Security Council resolutions to the executive.’ [50]

He concluded that, ‘by introducing the reasonable suspicion test as a means of giving effect to [the relevant Security Council resolution], the Treasury exceeded their powers under section 1(1) of the 1946 Act.’ [61] This was because ‘The absence of any indication that Parliament had the imposition of restrictions on the freedom of individuals in mind when the provisions of the 1946 Act were being debated makes it impossible to say that it squarely confronted those effects and was willing to accept the political cost when that measure was enacted.’ [61] The measures were therefore unlawful because they failed to fulfil the principle of legality. In light of that conclusion, Lord Hope did not go on to consider the arguments on the issue of legal certainty.

On the joined appeals of G and HAY, raising the issue of the lawfulness of an Order directed specifically at Al-Quaida, it was argued that the measures violated Articles 6 and 8 of the Convention. This was complicated by the House of Lords decision in R (Al-Jedda) v Secretary of State for Defence [2007] UKHL 58, that where a measure taken by the UK to implement its UN obligations was inconsistent with any other international obligation (including the ECHR), the UN obligation prevailed. Despite the decision of the ECJ in Kadi v Council of the European Union [discussed in the preview piece], and the possibility that Strasbourg may take a different view of Al-Jedda (which is pending before it), Lord Hope considered that the Supreme Court must still follow the principles set out there, and could not therefore consider whether the asset freezing regime breached the ECHR. Lord Phillips reached the same conclusion [106].

However, the common law stepped in to fill the gap. Lord Hope considered that the Order left designated individuals without any effective judicial remedy: ‘There is nothing in the listing or de-listing procedure that recognises the principles of natural justice or that provides for basic procedural fairness.’ [80] This was a fatal flaw, and meant that the relevant provisions of that Order were therefore unlawful. Lord Phillips reached the same conclusion on this point, dismissing as ‘unreal’ the Treasury’s argument that the Order did not affect the appellants’ right of access to a court. [147]

Lord Brown reached the same conclusion on the Terrorism Order, but by a different route, and dissented on the Al-Qaida Order. He considered the idea that ‘Parliament must squarely confront what it is doing and accept the political cost’ – the principle of legality – but concluded that ‘the Security Council by Resolution 1267 unambiguously stated what was required of the UK and the 1946 Act equally unambiguously provided that that measure could be implemented by Order in Council. There could surely be no political cost in doing what, unless we were flagrantly to violate our UN Charter obligations, the UK had no alternative but to do.’ [204] He considered that the UN Resolution which gave rise to the Terrorism Order was insufficiently clear to mandate the measures taken by the UK, but the UN Resolution which gave rise to the Al-Qaida order was. Given that the UK was bound to implement its UN obligations, Lord Brown could ‘see no good reason why that should not have been achieved under the 1946 Act.’ [203] What purpose, he asked, would there be in requiring the measure to be enacted in primary legislation, even if the measure is, as he accepted, ‘contrary to fundamental principles of human rights’? [203]

For Lord Rodger, the answer to that question lay in the separation of powers:

‘I accept that there might be no real political cost in enacting the measure. But the essential point is that the democratically elected Parliament, rather than the executive, should make the final decision that this system, with its inherent problems, should indeed be introduced into our law.’ [186]

In light of the Al-Jedda decision that UN obligations trump even the UK’s human rights obligations, he considered that ‘The need for Parliamentary endorsement is all the more important if the ordinary human rights restraints do not apply.’ [186]

In other words, the fact that Parliament could decide to pass the same draconian measures as those contained in the Orders did not, contrary to Lord Brown’s view, make Parliamentary scrutiny a pointless exercise.

The judgments of the majority in this case amount to an emphatic reminder to the executive that, if it wants to interfere with fundamental rights, it must do so openly and through the Parliamentary process, not through the shadowy route of Orders in Council. This is so even when the interference with fundamental rights is said to be required by the UK’s international obligations. Lord Phillips emphasised that

‘Nobody should conclude that the result of these appeals constitutes judicial interference with the will of Parliament. On the contrary it upholds the supremacy of Parliament in deciding whether or not measures should be imposed that affect the fundamental rights of those in this country.’ [157]

It is fitting that the first case heard in the Supreme Court, newly removed from the legislative branch of government, has resulted in this strong endorsement of the separation of powers.

The question then arises: how is the Government to respond to the ruling? Could it lawfully re-enact the same draconian regime through primary legislation, if Parliament were prepared to pass it? Lord Rodger thought so, considering that the United Nations Act 1946

‘would authorise Her Majesty to make an Order in Council, even with these far-reaching effects, provided that it had only a limited life-span and was replaced, as soon as practically possible, by equivalent legislation passed by Parliament. In this way the United Kingdom could promptly fulfil its obligations under the United Nations Charter.’ [176]

The Treasury has indicated that it intends to legislate to this effect as soon as possible. Whether or not this will be successful depends on two issues: firstly, whether or not Parliament can be persuaded to enact such draconian measures, and secondly, whether or not Al-Jedda survives scrutiny in Strasbourg. If it does not, then the fact that the measures are taken pursuant to UN Security Council resolutions will no longer insulate them from review under the ECHR. It is hard to see how they could survive such review, whether or not they are contained in primary legislation. It will be little comfort to the appellants if they end up subjected to the same regime by a different route, but the principles set out by the Court in their cases are nevertheless of important broader application.