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APPENDIX G
Oral snuff ban was imposed unfairly; Law
report
Queen's Bench Divisional Court
Regina v Secretary of State for Health, Ex
parte United States Tobacco International Inc Before
Lord Justice Taylor and Mr Justice Morland (Judgment December
21) In banning oral snuff, the Secretary of State for
Health acted unlawfully in that he acted unfairly by failing to
consult the applicants who had a particular interest as the sole
manufacturer of oral snuff in the UK and who had set up their
factory with government encouragement and financial assistance.
The Queen's Bench Divisional Court so held in
a reserved judgment in allowing an application for judicial review
by United States Tobacco International Inc against the decision
of the Secretary of State dated December 13, 1989 to make the
Oral Snuff (Safety) Regulations (S.I. 1989 No. 2347) which provided
that no person should supply, offer to supply, agree to supply
or possess for supply any oral snuff.
Mr Michael Beloff QC, Mr Stuart Isaacs and Mr
David Pannick for the applicants; Mr David Latham, QC and Mr
Nigel Pleming for the Secretary of State.
LORD JUSTICE TAYLOR said that in 1984 the applicants,
a company incorporated in the United States, were looking for
a manufacturing and packaging base outside the US. They discussed
with the Department of Trade and Industry and the Industry Department
for Scotland the possibility of setting up a factory to market
their products, Skoal Bandits, in Scotland.
They were encouraged by the government departments
to do so and were offered government grant by way of incentive.
In the result, the applicants built a factory at East Kilbride
near Glasgow which was opened in 1985. They received Pounds 193,357
of government grant.
The government was aware of medical opinion
as to a causal connection between oral snuff and cancer, especially
of the mouth. In 1977, the Committee on Carcinogenicity of Chemicals
in Food, Consumer Products and the Environment (COC) was set
up as a committee of experts to advise the Secretary of State.
When the applicants indicated their intention
to market Skoal Bandits in the UK, the COC was asked to advise
on the health implications of using oral snuff. In January 1984
the COC advised there was a causal link with oral cancer, although
the overall health risk was less than that of smoking.
The government response was to negotiate with
the applicants a voluntary agreement whereby the applicants undertook
not to market oral snuff to persons under the age of 18. That
agreement was made on April 18, 1985. On June 6, 1986 the agreement
was revised to include a requirement for health warnings to be
given.
The revised agreement was to apply until December
1987 but by letter dated February 8, 1988 it was extended to
April 30, 1988. Even after that letter there were further discussions
about possible variations to the agreement.
Meanwhile, however, on June 17, 1986 the COC
advised the government to ban oral snuff. No indication or hint
of that had been given to the applicants.
It therefore came as a bombshell when the
secretary of state announced on 26 February 1988 a proposal to
make regulations banning oral snuff. On the same day the department
wrote to the applicants pursuant to section 11(5)(a) of the Consumer
Protection Act 1987 inviting them to make representations by 26
May 1988.
On 13 December 1989 the regulations were laid
before Parliament. They came into force on 13 March 1990. Meanwhile,
on 13 February 1990 the applicants applied for leave to apply
for judicial review and leave was granted on 23 February 1990.
Ultra Vires
Mr Beloff submitted that the 1987 Act and the
regulations were concerned only with consumer protection and
safety and not with public health. They were aimed at protecting
consumers from defective products not from goods or substances
which were intrinsically unsafe.
His Lordship could not accept that. There was
no basis for confining the objects of the Act so narrowly. In
the context of oral snuff the Act was on any view apt to protect
the consumer whether one called its purpose consumer protection
or public health.
Proportionality
Mr Beloff argued that the banning of oral snuff
was a disproportionate step to guard against the perceived risk.
The secretary of state's avowed object was to
nip in the bud what he was advised was a dangerous habit. To
wait until it was in full flower in the UK before acting would
defeat that object.
Smoking and tobacco chewing were well established
habits for so long as to be difficult to reverse. But to say
that because a greater risk to health could not readily be eliminated,
effective steps should not be taken to prevent a new, albeit
lesser risk developing was a fallacious argument.
Community Law Mr
Beloff contended that the regulations were in breach of article
30 of the Treaty of Rome which prohibited quantitative restrictions
on imports and all measures having equivalent effect. Further,
he referred to the Labelling Directive adopted by the EC on 13
November 1989 which required by article 4 certain warnings to
be carried by tobacco products.
By going further than the Directive and imposing
a total ban the secretary of state fell foul of the principal
of proportionality, he submitted, since the Council must be deemed
to have regarded the Directive as a sufficient measure.
The answer to those submissions was to be found
in article 36 of the Treaty which provided that article 30 did
not apply for restrictions justified on the ground of health and
in article 8.2 of the Directive which provided that member states
could impose requirements considered necessary to protect public
health.
Legitimate Expectation
The applicants were understandably aggrieved
that after leading them on, the government should then strike
them a mortal blow by totally banning their product.
In the present case, if the secretary of state
concluded on rational grounds that a policy change was required
and oral snuff should be banned in the public interest, his discretion
could not be fettered by moral obligations to the applicants
derived from his earlier favourable treatment of them.
It would be absurd to suggest that some moral
commitment to a single company should prevail over the public
interest.
Accordingly, although it was regrettable that
the applicants were kept in the dark for so long about the recommendation
of a ban, their plea of legitimate expectation could not be upheld.
Fairness
Nevertheless, the special circumstances and
history of the matter were relevant to the secretary of state's
duty under section 11(5)(a) to consult the applicants.
There were three reasons why consultation in
the present case required a high degree of fairness and candour
to be shown by the secretary of state.
First, the history. Although the applicants
could not successfully rely on legitimate expectation, the fact
was that they were led up the garden path. The secretary of state
must have realised once the COC had recommended a ban in 1986
that if he accepted that advice he would be executing a volte
face which would seriously affect the applicants.
Second, although the regulations were of general
importance they impinged almost exclusively on the applicants
as the sole manufacturers and packagers of oral snuff in the UK.
Third, the effect of the regulations was likely
to be catastrophic to the applicants' business in the UK.
It was well established that the claims of natural
justice were particularly strong where a party was being deprived
of a right previously enjoyed, especially if it involved loss
of livelihood.
For those reasons it was important that the
secretary of state, when he eventually decided to propose the
regulations, should have given the applicants a full opportunity
to know and respond to the material and evaluation which led
him to such a striking change of policy.
It might well be that in the end that the decision
reached by the secretary of state might prove to be wise and
in the public interest but such a draconian step should not have
been taken unless procedural propriety had been observed and
those most concerned had been treated fairly.
Mr Justice Morland delivered a concurring judgment.
Solicitors: Taylor Joynson Garrett; Treasury
Solicitor.
Source: The Times 4 January 1991
"The Independent"
Copyright (C) Newspaper Publishing plc
IND 4 January 1991/Law Report: Decision
to ban Skoal Bandits oral snuff was unlawful
By Ying Hui
Tan, Barrister
Regina v Secretary of State for Health, Ex
parte United States Tobacco International Inc.
Queen's Bench Divisional Court (Lord Justice
Taylor and Mr Justice Morland).
21 December 1990 The
Secretary of State for Health had acted unfairly in deciding to
make regulations to ban oral snuff when he refused to disclose
important scientific advice on which his decision was based to
a company which was the sole United Kingdom manufacturer of packaged
oral snuff products. The Divisional Court quashed the Health
Secretary's decision to make the Oral Snuff (Safety) Regulations
1989 (S.I. No. 2347).
The applicant was an American company which
manufactured and marketed Skoal Bandits, a smokeless tobacco
product put directly in the mouth. In 1984 it was encouraged by
government departments to set up a factory near Glasgow and received
a grant. It was the sole manufacturer in the UK of oral snuff
products.
On the advice of the Committee of Carcinogenicity
of Chemicals in Food, Consumer Products and the Environment (COC)
given in 1984, the Government negotiated with the applicant a
voluntary agreement whereby the applicant undertook not to market
oral snuff to persons under 18 and to give a health warning.
In 1986 the COC advised the Government to ban
oral snuff. No hint of that advice was given to the applicant.
In February 1988 the Secretary of State for Health announced
a proposal to make regulations banning oral snuff. The applicant
was invited to make representations. It was given some information
of the evidence relied on. In October 1988, after the deadline
for making representations had passed, the applicant was informed
that the Government's proposals were based on, among other things,
the COC's 1986 advice. In December 1989 the regulations were
laid before Parliament and came into force on 13 March 1990.
In February 1990 the applicant was granted leave
to apply for judicial review to challenge the regulations.
Michael Beloff QC and David Pannick (Taylor
Joynson Garrett) for the applicant; David Latham QC and Nigel
Pleming (P K J Thompson) for the Secretary of State.
LORD JUSTICE TAYLOR said that although Parliament
had refrained from applying section 10 of the Consumer Protection
Act 1987 to tobacco, the Secretary of State for Health was empowered
under section 11 to make such provision as he considered appropriate
to prohibit the supply of specific tobacco products either generally
or to a particular class of persons. Section 11(1) (b) and (2)
(j) clearly empowered the Secretary of State to make regulations
such as those challenged here.
The applicant argued that the banning of oral
snuff was a disproportionate step to guard against the perceived
risk of using oral snuff as to be irrational. However, the Secretary
of State's avowed object was to nip in the bud what he was advised
was dangerous habit. Whether steps short of a total ban would
be ineffective to protect the public might be arguable, but it
was not an irrational view.
It was contended that the regulations were in
breach of article 30 of the Treaty of Rome which prohibited quantitative
restrictions on imports or all measures have equivalent effect.
However, provided that the Secretary of State's
decision to make the regulations was otherwise lawful and rational,
article 36 of the Treaty and article 8(2) of the Labelling Directive
of 13 November 1989 defeated the challenge based on Community
law.
The applicant contended that it had a legitimate
expectation, implied by conduct, that its operations would be
permitted to continue. However, a minister could not fetter a
discretion given him under statute. Providing he acted within
his statutory powers, rationally and fairly, he was entitled to
change his policy.
In the present case, if the Secretary of
State concluded on rational grounds that a policy change was required
and oral snuff should be banned in the public interest, his discretion
could not be fettered by moral obligations to the applicant deriving
from his earlier favourable treatment of it.
It would be absurd to suggest that some moral
commitment to a single company should prevail over the public
interest. Accordingly, although it was regrettable that the applicant
was kept in the dark for so long about the recommendation of
a ban, its plea of legitimate expectation could not be upheld.
Nevertheless the special circumstances and history
of this matter were relevant to the Secretary of State's duty
under section 11(5)(a) of the Consumer Protection Act 1987 to
consult the applicant. Consultation under section 11(5)(a) in
the present case required a high degree of fairness and candour
to be shown by the Secretary of State.
Although the applicant could not successfully
rely on the doctrine of legitimate expectation, it was led up
the garden path. The Secretary of State for Health must have
realised once the COC had recommended a ban in 1986, that if
he accepted that advice he would be executing a volte-face which
would seriously affect the applicant. The regulations impinged
almost exclusively on the applicant as the sole manufacturers
and packagers of oral snuff in the UK. The effect of the regulations
was likely to be catastrophic to the applicant's business, a
business in which it had been encouraged by the Government to
invest substantial resources.
The applicant's request to be shown the advice
or reasons of the COC's recommendation to ban oral snuff was
refused. That advice was crucial. Between 1984, when the COC did
not recommend a ban, and 1986, when it did, no significant new
evidence emerged. What had changed was the committee's evaluation
of the existing evidence.
The change in the COC's evaluation of the evidence
and its consequent recommendations were a very important, if
not the most important factor, in persuading the Secretary of
State to ban oral snuff. The applicant wanted to see what reasons
had led the committee to change its view.
One could understand the need for ministers
to preserve confidentiality as to the in-house advice they received
on administrative and political issues from their civil service
staff. But here, the advice was from a body of independent experts.
There was no ground in logic or reason for declining
to show the applicant the text of the advice. In view of the
total change of policy the regulations would bring about and its
unique impact on the applicant, fairness demanded that it should
be treated with candour. To conceal from it the scientific advice
which directly led to the ban was unfair and unlawful. It might
well be that the Secretary of State's decision might prove to
be wise and in the public interest, but such a Draconian step
should not be taken unless those most concerned had been treated
fairly.
Although the regulations were subject to annulment
by negative resolution of the House of Commons and were not so
annulled, Parliament would be concerned only with the objects
of the regulations and would be unaware of any procedural impropriety.
It was therefore to the courts, by way of judicial review, that
recourse must be had to seek a remedy. The applicant was entitled
to an order of certiorari to quash the regulations.
Mr JUSTICE MORLAND gave a concurring judgment.
4 January 1991
The Guardian on
CD-ROM
FEA PAGE 35
Law Report Minister wrong to withhold cause
of snuff ban from firm Shiranikha Herbert
Queen's Bench Divisional Court
Regina v Secretary of State for Health,
ex parte United States Tobacco International Inc
Before Lord Justice Taylor and Mr Justice Morland
21 December 1990 The
Health Secretary acted unfairly and unlawfully when he decided
to impose a total ban on the supply of oral snuff but refused
to disclose to the sole manufacturers of oral snuff in the UK
the scientific advice on which his decision was based.
The Facts
The company manufactured oral snuff, a smokeless
tobacco product put directly into the mouth. In 1984 it was encouraged
by the Government to set up a factory in Scotland and received
a grant for that purpose. The company increased its UK investment
and built a factory in East Kilbride. In January 1984 the Committee
on Carcinogenicity of Chemicals in Food, Consumer Products and
the Environment (COC) advised that there was a causal link between
oral snuff and mouth cancer. The company voluntarily agreed not
to market oral snuff to persons under 18 and to give health warnings.
In 1986 the COC advised the Government to ban oral snuff. No
hint of that advice was given to the company until 1988 when the
Government announced a proposal to ban oral snuff. The company
sought judicial review to challenge the Health Secretary's decision
to make the Oral Snuff (Safety) Regulations 1989 (S.I. 2347)
which ban the supply of oral snuff.
The Decision
LORD JUSTICE TAYLOR said that the Consumer Protection
Act 1987 clearly empowered the Health Secretary to make the Regulations
and he had not acted irrationally or in breach of the Treaty of
Rome in making them. If the Health Secretary concluded on rational
grounds that a policy change was required and oral snuff should
be banned in the public interest, his statutory discretion could
not be fettered by moral obligations to the company deriving
from his earlier favourable treatment of it. It would be absurd
to suggest that some moral commitment to a single company should
prevail over the public interest. Although it was regrettable
that the company was kept in the dark for so long about the COC's
recommendation the plea of legitimate expectation could not be
upheld.
Nevertheless, the special circumstances and
history of this matter were very relevant to the Health Secretary's
duty under section 11(5)(a) of the 1987 Act to consult the company.
That states: "Where the Secretary of State proposes to make
safety regulations it shall be his duty before he makes them to
consult such organisations as appear to him to be representative
of interests substantially affected by the proposal." Consultation
required a high degree of fairness and candour by the Health
Secretary. The company had been led up the garden path. The Regulations
impinged almost exclusively on it as the sole manufacturers and
packagers.
Source: The Guardian
22 January 1991
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