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Introduction

The Supreme Court has, this week, heard the appeal from the Inner House (of the Court of Session) in the case Imperial Tobacco Ltd, Petitioner [2012] SLT 749. This is the latest in a line of cases challenging the validity of Acts of the Scottish Parliament. The Acts previously challenged have dealt with such areas as fox hunting, pleural plaques and minimum pricing of alcohol.

Background

In this case, Imperial argued that two sections of the Tobacco and Primary Medical Services (Scotland) Act 2010, which restrict the display of tobacco products and ban their sale through vending machines, were outside the legislative competence of the Scottish Parliament and accordingly not law.

The challenge failed before the Lord Ordinary (Lord Bracadale) and the Inner House (Lord President Hamilton and Lords Reed and Brodie) upheld the Lord Ordinary’s decision in February this year.

Legal arguments in the Inner House

There were four grounds to Imperial’s challenge.

1. That the provisions related to reserved matters

Imperial argued that the 2010 Act provisions related to two reserved matters (matters reserved to the Westminster Parliament) under the Scotland Act 1998. These reserved matters were, firstly, the regulation of the sale and supply of goods to customers and, secondly, product standards, safety and liability. In discussing the meaning of “relates to”, the Court held that the 2010 Act would not necessarily be invalid if it had a slight, indirect or remote effect on a reserved matter.

The scope of the reserved matters was found to be narrower than that argued for by Imperial. The Court acknowledged that extrinsic material could be referred to in determining the scope, but the explanatory notes to the 1998 Act were not admissible as an aid to construction. They focused on the words of the reserved matters, although the heading in the enactment was part of its context. In ascertaining whether the 2010 Act provisions fell into the list of reserved matters, it was held that the “pith and substance” rule, developed in Canada, was not overly useful because the Canadian model was different.

The Court found that the 2010 Act provisions did not relate to either of the reserved matters relied upon by Imperial.

It held that regulation of the sale and supply of goods to customers fell within the ambit of consumer protection, and the 2010 Act was not a consumer protection measure. It found that the object of consumer protection is to allow the consumer to participate in the market on nearly equal terms with the trade supplier, whereas the immediate purpose of the 2010 Act provisions was to reduce and eliminate a source of sale, with the underlying purpose of reducing the risk of damage to health. Accordingly, by examining the “true nature and character” of the 2010 Act provisions, the Court held that they were much closer to regulatory provisions than those designed to impact on the common market, which would be reserved to the Westminster Parliament.

Also, the provisions did not relate to product safety, as they were not concerned with the constituents, standards or specifications of tobacco products. There was no more than a loose or consequential connection to product safety, if any at all.

2. That the provisions made modifications to Scots criminal law as it applied to a reserved matter

The Court held that if the sections in the 2010 Act made any modifications at all, they were entirely specific, and accordingly they did not modify the general criminal law, for example the law concerning evidence or procedure. In any case, and fundamentally, it held that the regulation of the sale of goods to customers is a reserved matter only within the overall context of consumer protection, and the Court had already decided that the provisions did not fall within the scope of consumer protection.

3. That the provisions modified the law on a reserved matter, namely the regulation of the sale and supply of goods to customers

This was the main argument for Imperial. However, it was held that the existing enactments founded upon by Imperial were untouched and continued in force.

4. That the provisions modified Article 6 of the Union with England Act 1707 in so far as it related to freedom of trade

Finally, the Court held that the provisions did not do this. Article 6 did not prevent there being separate and different laws on trade in Scotland, as its purpose was to prevent preference in trading conditions for traders from other parts of Great Britain. However, in any case, both provisions of the 2010 Act were similar to those in enactments in England and Wales.

Appeal in the Supreme Court

The appeal was set down for a four day hearing before Lords Hope, Walker, Kerr, Sumption and Lady Hale.