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AXA General Insurance Ltd & Ors v Lord Advocate & Ors (Scotland) [2011] UKSC 46

As the prospect of a referendum on Scottish independence draws closer and those concerned with the destiny of British sterling, Scotch whisky and Chinese pandas intensify their discussions, questions have arisen meanwhile as to the legality of such a referendum and the judicial response to it.  The case of AXA is significant – indeed the most significant of all UKSC cases to date – not only for litigants with asbestos-related claims and as a reform of locus standi in Scotland; but also because it moves into ‘unchartered territory’ regarding the reviewability of acts of devolved parliaments, raising independence questions of both judicial and national varieties.  Indeed, while it looks certain that the familiar pound would still jingle in the pocket, the amber liquid would still flow from the bottle, and the bamboo stalks would still be munched in Edinburgh Zoo, as battle lines are drawn up for the independence referendum, the judicial stance remains unclear.  Although it is not an altogether surprising decision, AXA is significant for lending some – albeit not total – clarification here, for providing guidance to courts in devolved nations, and for the UKSC’s reminder of its own independent powers.

The case involved an appeal by certain insurance companies challenging the lawfulness of an Act of the Scottish Parliament; namely, the Damages (Asbestos-related Conditions) (Scotland) Act 2009.  Asymptomatic pleural plaques, pleural thickening and asbestosis were to constitute, and were to be deemed to have always constituted, actionable harm for the purposes of a personal injury claim for damages.  Regardless of the reasoning, the decision in AXA to uphold the Act is clearly of great significance for both insurance companies and those suffering from asbestos-related conditions.  Moreover, it is also worth noting that, as several of the respondents in AXA were individual litigants, the UKSC made important observations regarding locus standi in Scots law.  Indeed, as Lord Reed said: “The time has…come when the courts should cease to use the inappropriate terminology of title and interest . . . [they] should refer instead to standing, based upon a sufficient interest“.  The significance of this relaxation should not be underestimated: it paves the way for a new body of case law as Scottish pressure groups look to establish sufficient standing to challenge certain public decisions.

As Lord Hope said, whether, and on what grounds, Acts of the Scottish Parliament are amenable to judicial review “is a matter of very great constitutional importance” that “goes to the root of the relationship between the democratically-elected legislatures and the judiciary“.  The true significance of AXA lies here.  The appellants proposed that, as a measure of a non-sovereign parliament, the Scottish legislature’s 2009 Act was open to judicial review on common law grounds as an unreasonable, irrational and arbitrary exercise of powers conferred by the Scotland Act 1998.  If an appeal on this basis had been allowed, the consequences would have been momentous for all devolved parliaments.  Moreover, one can imagine how such a decision would have added a new dimension to the Scottish independence debate. Indeed Scottish Cabinet Secretary for Justice, Kenny MacAskill, has already commented that Scottish decisions are “undermined routinely by a court that sits in another country and is presided over by a majority of judges who have no knowledge of Scots law, never mindScotland . . . who may have visited here for the Edinburgh Festival.”  Consequently, whilst Lord Hope (born in Edinburgh) stresses that the Scottish legislature “does not enjoy the sovereignty of the Crown in Parliament”, his assertions that it is a “self-standing democratically elected legislature”; that “its democratic mandate to make laws for the people of Scotland is beyond question”; and that such laws enjoy “the highest legal authority” are of great significance. Lord Reed (also from Edinburgh) emphasises this still further: “grounds of review developed in relation to administrative bodies which have been given limited powers for identifiable purposes,” he said, “and which are designed to prevent such bodies from exceeding their powers or using them for an improper purpose or being influenced by irrelevant considerations, generally have no purchase in such circumstances, and cannot be applied”.

So, as the occupants of a leafy Edinburgh enclosure nibble nervously at their shoots, we ask what this means for a Scottish independence referendum.  Citing AXA, Dr Matt Qvortrup has judged it “unlikely” that the courts “would have anything to do with it“.  In some respects, he does seem correct.  If the UK Parliament gives the Scottish Parliament the requisite statutory powers to hold a referendum, subsequent challenges based on certain common law grounds would be likely to fail.  What AXA does not address directly and what Dr Qvortrup has overlooked is the scenario whereby a referendum is held without the amending of the Scotland Act, leaving matters reserved under Schedule 5, Pt.1(1)(b) and (c) (regarding “the Union of the Kingdoms of Scotland and England” and “the Parliament of the United Kingdom”) still reserved.  In this case a challenge to the legality of the referendum would not be on common law grounds, but on statutory grounds and there was no suggestion in AXA that, had the court not found that the 2009 Act was proportionate and followed a legitimate aim, it would not have denied the measure’s legality for breaching the limits of the Parliament’s legislative competence under 29(2)(d) Scotland Act.  Thus, whilst AXA may have allayed claims under common law, claims based on statutory interpretation may yet be to come.

AXA is, nevertheless, a landmark case for all devolved parliaments in the UK.  Their special status is acknowledged and their reviewability essentially limited to measures which contravene the rule of law or threaten the judicial review process.  Readers will remember that these limits, drawn from Lord Steyn in Jackson, have been mooted to constrain the sovereign Parliament as well.  A battle hinted at by Lord Hope but left for another day.  Of immense significance to all concerned with asbestos-related conditions, with access to the courts in public law, and with judicial and national independence: the AXA judgment lies at the heart of UK administrative and constitutional law.