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In the judicial review petition of Imperial Tobacco Ltd v Lord Advocate (Scotland) [2012] UKSC 61, the Supreme Court unamnimously held last month that the Tobacco and Primary Medical Services (Scotland) Act 2010, ss 1 and 9 were not outside the legislative competence of the Scottish Parliament.

Background

This was the latest in a line of cases to challenge the validity of an Act of the Scottish Parliament (“ASP”). However, it was the first challenge to be made on the ground that provisions of the ASP related to matters reserved to the Westminster Parliament under the Scotland Act 1998, s 29.

The provisions in question, ss 1 and 9 of the 2010 Act, prohibit the display of tobacco products in shops and ban vending machines selling tobacco products.

By finding that the Scottish Parliament could competently legislate on such matters, the Supreme Court upheld the decision of the Inner House (appeal court) of the Court of Session and the Lord Ordinary (at first instance). For a summary of the decisions below, click here. The judgment in the Supreme Court was given by Lord Hope, with whom the rest of the Justices (Lords Walker, Kerr and Sumption and Lady Hale) agreed.

The Supreme Court’s decision

GENERAL PRINCIPLES

Lord Hope began by making some general points which should be considered when deciding if an ASP is outside the Scottish Parliament’s competence.

He stated that the task the Court required to perform was essentially one of statutory construction. Arguments had been made by the parties regarding whether the constitutional status of the 1998 Act affected its interpretation. Lord Hope was keen to put an end to such arguments, and set out three principles which he held should be followed when considering if a provision is outside the Scottish Parliament’s competence.

Firstly, the rules in the 1998 Act should be followed, as these had been set down by the legislature for that purpose. Secondly, these rules should be interpreted in the same way as any rules in a UK statute, namely, according to the ordinary meaning of the words used. Thirdly, the fact that the 1998 Act was constitutional was not a guide to interpretation in itself.

Next, he held that the headings and sidenotes in the schedule to the 1998 Act, which contained the list of reserved matters, were part of the context of the Act and accordingly should be taken into account when interpreting the meaning of the reserved matters.

Finally, he found that the Explanatory Notes which were published after the 1998 Act was enacted, in 2004, were useful as guidance only when interpreting its provisions, but had no more weight than any other post-enactment commentary, as they did not form part of the context of the Act. In contrast, he held that the notes which accompanied the Scotland Bill should be considered when interpreting the provisions of the 1998 Act.

THE GROUNDS OF CHALLENGE

Imperial Tobacco Ltd (“Imperial”) had three grounds of challenge, and failed on all three.

First ground of challenge: that the sections in the 2010 Act related to the reserved matter of “the sale and supply of goods to consumers”

Imperial argued for a wide interpretation of this reserved matter, based on the ordinary and natural meaning of the words. They submitted that this meaning should not be trumped by other aids to interpretation, such as the heading to that particular list of reserved matters, which was “consumer protection”. Accordingly, they submitted that the matter reserved to the Westminster Parliament covered regulation, in any way and for any purpose, of the sale and supply of goods to consumers.

Lord Hope held that Imperial’s interpretation was too wide. He found that their argument was at odds with the fact that the Scottish Parliament had responsibility for Scots private law, which included the sale and supply of goods because they form part of the law of contractual obligations.

Instead, he held that the reserved matter encompassed all matters of regulation of the sale and supply of goods and services to consumers within the field of consumer protection, and it could not be said that the purpose of the 2010 Act provisions was consumer protection. The provisions aimed to make tobacco products less visible and to make cigarettes less readily available, with the consequence of a reduction in smoking and improvement of public health, not to regulate the conduct of sales for the protection of consumers where there was unequal bargaining power.

Second ground of challenge: that the sections related to the reserved matter of “product safety”

Lord Hope held that this reserved matter governed matters of concern to the single market in the general area of trade and industry, and the 2010 Act provisions were not concerned with safety standards, but rather with the promotion of public health.

He also stated, obiter, that even if he had found that one of the purposes of the 2010 Act provisions was to prevent trading in a way of concern to the single market, then he would have held that this was ancillary to the main purpose of promoting public health.

Third ground of challenge: that the sections modified Scots criminal law concerning a reserved matter (the sale and supply of goods to consumers) by creating a new offence which could only be committed in the course of sale and supply of goods to consumers

Imperial argued, which was not disputed, that two existing regulations should be treated as part of the law on reserved matters and that they contained rules of Scots criminal law which concerned a reserved matter. Following on from that, they submitted that the 2010 Act provisions modified those rules, outside the Scottish Parliament’s competence.

Lord Hope held that the 2010 Act provisions did not amend or affect the existing regulations, so they did not modify them. Although they did create new offences, they did not affect any provisions of the existing criminal law which were concerned with ensuring that products sold are safe and that appropriate information is provided.

Comment

The 2010 Act has yet to be brought into force. This was deferred by the Scottish government until the final determination of Imperial’s challenge. Equally, draft regulations enforcing the provisions of the Act have yet to be made or laid before the Scottish Parliament.

In light of the Supreme Court decision, the Scottish government have now stated that they will introduce the display ban in April this year. This is already in force inEnglandin respect of large shops and supermarkets.  It remains to be seen what the effect will be, if any, on tobacco sales and whether the intended purpose of the 2010 Act will be realised.

The judiciary have refused this first challenge to an ASP on the basis that it concerns a matter reserved to the Westminster Parliament. Although said to be a matter of statutory interpretation, the fact that Imperial were unsuccessful at every stage of their case could perhaps indicate the unwillingness of the judiciary to interfere on this basis.

In terms of the legal implications of the decision, as this is the first time that an ASP has been challenged on the grounds that it relates to reserved matters, the three principles set out by Lord Hope will be useful guidance for further challenges that might be contemplated. Further, as Lord Hope held that the Court’s task was simply one of statutory interpretation, the reasoning in his decision (such as his finding on the effect of the post-enactment explanatory notes) will be helpful more generally in Scottish cases.

The decision also provides guidance on interpreting ASPs that might impact on reserved matters, and this reasoning should now be read along with the 1998 Act in construing an ASP. As Lord Hope found that the titles to the lists of reserved matters were relevant, this means that those can and should also be considered going forward in the statutory construction of any ASP.