5Transparency and Review
Background
66.In this chapter we consider issues of transparency and review. In particular, we consider whether the Bills provide adequate guarantees of transparency in the TRA and / or Secretary of State’s decision-making processes, and ensure that such decisions can be adequately reviewed on appeal.
Transparency
67.Transparency in public decision-making is a complex issue. Decision-makers must consider “the interests of the people who are often providing very confidential information” and balance those interests “against the interests of the other side in challenging that”.168 With respect to transparency in trade defence, we heard that there has been “real progress at the EU level and for trade unions across Europe”.169 Rosa Crawford, Trades Union Congress, said that the EU’s trade defence system provides “a level of transparency and democratic accountability whereby the European Parliament has a say in those trade remedies that are put forward by the Commission”.170
68.As the UK establishes its own trade defence regime, we heard that the “integrity and credibility” of the regime depends on the openness and transparency with which decisions are made.171 Bernardine Adkins told us that issues relating to what “was or was not in the public interest … are going to be hotly contested”. Ms Adkins added that “[s]unlight is the best disinfectant”, and that it “is really important that these things are aired openly, because someone is going to be disaffected.”172 Which? similarly said that “[t]ransparency is key to ensuring confidence, showing that the body is operating independently and assuring confidence in its decision-making.”173
69.Witnesses identified several areas in the Bills in respect of which transparency could be improved. First, witnesses noted that several key concepts were missing from primary legislation and that including such concepts was “in the interests of transparency” as they “limit the discretion of the authorities”.174 Edwin Vermulst told us that “[s]ales below cost is a type of dumping that occurs very frequently, but in your Bill it is not addressed.”175 Bernard O’Connor similarly told us that the rules which ordinarily govern “a classically administrative law process”, such as the investigation and imposition of TDMs, were missing. Such rules include “[those] to show that there is dumping or that there is injury”. Mr O’Connor said that, “[u]ntil you have [those rules] you cannot have transparency”.176 He also told us that what was “missing is a lot of due process” which is another “classical way in which you ensure that the discretion is exercised in an appropriate manner.”177 Mr Moulis also said that “[a] public record is important”, and that “[i]t should be stated in the law itself” rather than regulations.178
70.Second, Mr Peretz QC told us that it was important to “encourage the TRA from the outset to be careful and evidence-driven in its approach”. One mechanism for doing so is to “ensure that all proposed decisions are subject to thorough review by senior officials not previously involved in the case.” According to Mr Peretz QC, this approach “encourage[s] transparency since, in UK appeals (unlike in the EU) there is a strong general duty on the respondent authority to be candid about the reasons for its decision and to disclose relevant information and documents.”179
71.Third, but related to the issue of due process, Which? told us that the TRA should have “clear procedures for transparency and publication of the assessments that underpin its advice, including how it has balanced consumer [interests]”.180 They suggested such procedures could include a “requirement to report annually on its work and its assessment of the impact on consumers (as in the case of the Competition and Markets Authority for exampe).”181 Which? further said that the “[Customs] Bill should be more explicit that a full and transparent [TRA] assessment needs to be published, so that it is clear how the TRA has reached its decisions”.182
Appeals
72.Under WTO law, Member States must have a system for appeals against decisions to impose TDMs.183 For example, Article 13 of the WTO Anti-Dumping Agreement provides that parties must “maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews of [decisions to impose anti-dumping duty].”184 Neither Bill contains provisions detailing the UK’s future appeals mechanism for TDMs. The Customs Bill merely confers the power to make regulations for, or in connection with, the review or appeal of decisions made by the TRA or the Secretary of State.185
73.Appeals has been described as an area in respect of which “there is a big hole”.186 George Peretz QC told us that it was “important for anybody taking decisions like these [to] have an adequate and effective appeal mechanism”. He said that the Customs Bill is “a blank sheet of paper”, and there is very little about what an appeals mechanism will look like, or key issues like “who does it” and “the standard of review”.187 We were also told that it was “constitutionally inappropriate for the Secretary of State, by regulation, to be able to decide [these issues]”. Mr Peretz QC said that “questions of who exercises judicial power over the executive and what type of judicial power is exercised are, as a matter of principle, ones for Parliament to decide in primary legislation”.188 Accordingly, he said that paragraph 30(b), Schedule 4 of the Customs Bill should be “replaced by a provision setting out which court or tribunal should hear appeals, and what the standard of review should be in relation to the different types of decision that can be made under Schedule 4”.189
Nature of appeals mechanisms
74.The nature of appeals mechanisms varies as between different trade remedies bodies. In Australia, certain decisions of the Minister and the Anti-Dumping Commissioner are subject to administrative review by the Anti-Dumping Review Panel. Once the Panel has reviewed the Minister’s decision, it provides recommendations to the Minister regarding reconsideration. Decisions of the Minister after considering a report of the Panel are then appealable to the Federal Court of Australia by way of judicial review.190 By contrast, decisions of the European Commission regarding TDMs may be subject to judicial review by the Court of First Instance and the European Court of Justice.191
75.Witnesses told us that the UK effectively has two choices as to the nature of its appeals mechanism: “an administrative court” or “a specialist tribunal”,192 although there is a possibility of different decisions going to an administrative court and others to a tribunal (see below).193 Dr Cohen said that what UK industry wanted was “a low-cost, easy appeal process like the Australian anti-dumping review panel.”194 In a similar vein, two witnesses told us that the UK should use a specialist tribunal rather than the Administrative Court for its appeals mechanism. Ms Adkins said that the Government should “either expand the competence of the Competition Appeals Tribunal or create something akin to the Competition Appeals Tribunal.”195 For her, the Competition Appeals Tribunal was a beneficial model as it “follows European Court style rules, which means it moves very quickly”, is “depoliticised”, and is comprised of cross-disciplinary experts, including “a judge, an economist and an accountant … who have the capability to understand this data and these analyses that go through”.196 By contrast, Ms Adkins told us that the administrative court system provided a “very narrow window to have check and oversight of [relevant] decisions”.197
76.Mr Peretz QC agreed that a specialist tribunal was the preferable model as it “allows the tribunal rapidly to build up expertise in a specialist area”.198 However, instead of establishing a new tribunal, he told us that decisions should be appealable to the “Upper Tribunal [Tax and Chancery Chamber] with some specialist members”.199 For Mr Peretz QC, appealing decisions to the Upper Tribunal, which presently hears appeals in customs duties cases, has “obvious advantages in terms of consistency and the development of expertise [as] … cases [will be] dealt with by the same tribunal”.200 He further added that “British courts … have a lot of experience in dealing with regulatory appeals and have a history of digging and scrutinising them quite carefully.”201 Accordingly, Mr Peretz QC concluded that:
[A] strong system of appeals, culminating in a carefully-reasoned and thorough decision by a senior English or Scottish Judge who has impartially heard and considered all the evidence, is (where a decision to impose ADD is upheld) likely to be of considerable help to the United Kingdom when there is a challenge to that decision in the WTO disputes system. Any WTO Panel is likely to find such a judgment more persuasive than a decision at administrative level: and any decision that has been tested in, and passed, a thorough domestic appellate process is likely to be able withstand scrutiny at WTO level.202
77.While not addressing this issue in detail in oral evidence,203 Greg Hands subsequently wrote to the Committee and told us that the Government intended to have independent review procedures in place for all TDMs (anti-dumping, anti-subsidy and safeguards). He further said that, while the Government was still determining whether TRA decisions would initially be subject to reconsideration (administrative review), the Government’s intention was that “interested parties will ultimately have the right of appeal to the Upper Tribunal, in respect of any decisions made by the TRA.” He further said that “[w]e are clear … that challenges against decisions by the Secretary of State will be directly appealable to the Upper Tribunal.”204
Standard of review
78.The second issue we heard about regarding an appeals mechanism was the standard of review the relevant body would engage in. Witnesses highlighted two possible standards: judicial review and on-the-merits review. Judicial review enables a court to review the lawfulness of a decision or action of a public body. Judicial review is not concerned with whether the ‘right’ decision was reached but with whether the law has been correctly applied, and the proper procedures have been followed.205 Conversely, merits review involves an examination of “whether a decision is substantively correct, after consideration of all relevant issues of law, fact, policy and discretion”.206 This effectively requires the relevant body to “stand[] in the shoes” of the decision-maker and “come up with a decision that is the correct or preferable decision”.207 We were told that, in some instances, both standards of review can be incorporated as part of the appeals process. For example, in Australia there is “a review system to an anti-dumping review panel, which is a merits review […] [and] [t]here is legal review as an option as well after that […] [which is] a codified system of administrative review in the courts”.208
79.Witnesses primarily advocated the adoption of a merits review process for decisions regarding TDMs. Bernardine Adkins told us that the UK “will end up with a much better product” if a tribunal engages in “a full-blown, on-the-merits inquiry to test the thinking and the analyses that the inquiry does.”209 George Peretz QC agreed that “TRA decisions on the existence and extent of dumping, and the existence and extent of domestic injury, should be subject to merits review.”210 Noting section 195(2) of the Communications Act 2003,211 he argued that merits review was preferable as: (i) significant factual errors and failures of analysis can be corrected more easily; (ii) errors can be corrected and a fresh decision taken without resubmission for reconsideration; (iii) it is appropriate for a court to review technical and regulatory decisions (for example, existence and extent of dumping); and (iv) existing tribunals with similar powers are cautious not to allow merits review to transform into a re-trial of the regulator’s decision but instead focus on specific criticisms of the decision made by the appellant.212 With respect to the issue of reconsideration, Daniel Moulis added that he was “not sure whether reconsideration ever really works [because] [i]t is hard for an institution to say, ‘Oh yes, we got it wrong’.”213
Appealable decisions
80.Finally, we heard evidence regarding which decisions of the TRA and Secretary of State should be appealable. Absent any explicit statutory provision to the contrary, decisions of both the TRA and Secretary of State in exercise of their duties will be challengeable by judicial review in the Administrative Court.214 However, we were told that it some instances decisions of regulatory bodies and Ministers are appealable to a specialist tribunal and other decisions to the Administrative Court. George Peretz QC told us that having different avenues of review in respect of different kinds of decisions “leads only to procedural problems when various appeals are made against different decisions in the same procedure, and ultimately pointless arguments about whether a particular decision falls into one category or another”.215 He told us that the better approach was for “all decisions of the TRA or Secretary of State under Schedule 4 [to be] appealable to whichever court or tribunal is thought to be appropriate to deal with appeals against decisions to impose [TDMs]”.216
81.In addition, Mr Peretz QC told us that, while not required by WTO rules, it seemed “fair that domestic complainants that fail to secure the imposition of TDMs (or wish to argue that it should be higher) should have the same rights of appeal as importers appealing against the imposition of TDMs.”217 As such, on this view, decisions to impose, not impose or decline to investigate TDMs would be appealable to one appellate body.
82.The integrity and credibility of the UK’s future trade regime depends on the quality and fairness of the decisions it makes. Openness and transparency are both important in ensuring confidence in decision making, and to avoid unnecessary dispute settlement proceedings at the World Trade Organization. Failure to reflect this could have international ramifications for the UK, including making it more likely that decisions of the TRA will be subject to dispute settlement proceedings at the World Trade Organization. We have heard about several key areas for improvement in the Trade and Customs Bills with respect to the transparency of decision-making. One critical issue is the lack of clarity around how the TRA is to calculate the existence of both dumping and injury. The Department should accordingly publish detailed guidelines as to how these assessments are to be undertaken to ensure maximum transparency of the UK’s future trade defence regime.
83.Further to this, it is paramount that the TRA is a body of public record. The TRA should publish a written summary of its advice to the Secretary of State outlining its reasons for recommending, or declining to recommend, the imposition of measures. In the event that the TRA is still bound to apply an economic interest test, it should provide additional details outlining its assessment of the economic interest and how it determined whether the imposition of measures served or detracted from the UK’s economic interest.
84.The appeals process is an aspect of trade defence in respect of which legislation is both required, as a matter of law, and comparatively simple. In these circumstances, it is troubling and perplexing that the Government included nothing of substance in either the Trade or Customs Bills about the future appeals mechanism for decisions of the TRA and / or Secretary of State. We appreciate the indication we received from the Minister that there will be some form of appeal from decisions of both the TRA and Secretary of State to the Upper Tribunal. However, it is constitutionally inappropriate for Ministers to determine such a mechanism in regulations without parliamentary scrutiny; questions of who exercises judicial power over the executive and what type of judicial power is exercised are ones for Parliament to decide in primary legislation.
85.In these circumstances, the Government should amend the Trade and / or Customs Bills to provide a right of appeal from decisions of the TRA and Secretary of State to a specialist tribunal, such as the Upper Tribunal sitting with some specialist members. Appeals should be determined ‘on the merits’, with all decisions being appealable, including decisions not to investigate or impose trade defence measures. The Government should have regard to comparable legislative provisions on appeals, such as sections 192 and 195 of the Communications Act 2003, in legislating for an appellate mechanism.
168 Q 80 [George Peretz QC]
169 Q 98 [Rosa Crawford]
170 Q 98 [Rosa Crawford]
171 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 50 [Bernardine Adkins]
172 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 50 [Bernardine Adkins]
174 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 55 [Edwin Vermulst]
175 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 32 [Edwin Vermulst]
176 Q 82
177 Q 82
178 Q 84
185 Taxation (Cross-border Trade) Bill, Schedule 4, clause 30 [Bill 128 (2017–19)]
186 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 38 [Bernardine Adkins]
187 Q 80
190 Anti-Dumping Commission, Australia’s Anti-Dumping and Countervailing (anti-subsidy) System, 18 August 2014; Anti-Dumping Commission, Understanding the Anti-Dumping Review Panel Process, June 2013.
191 Mayer, Brown, Rowe & Maw LLP, Evaluation of EC Trade Defence Instruments: Final Report, December 2005, Annex 1, pp 5, 40
192 See, for example, Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 38 [Bernardine Adkins]
193 George Peretz QC, Briefing Paper: The Government’s proposed legislation for trade remedies, UK Trade Forum, 22 January 2018
194 Q 104
195 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 38 [Bernardine Adkins]. See also UK Steel, UK Implementation of Post-Brexit WTO-Compliant Trade Defence Remedies: a Steel Sector View report, April 2017, p 7 (“The WTO agreements stipulate that AD and CVD decisions can be appealable. The US has a specialist Court of International Trade for this purpose. We do not suggest this degree of specialism is necessary for the UK. The number of cases is likely to be far lower, so the costs of establishing a specialist court are unlikely to be justified. Instead it is suggested that an existing tribunal could perhaps be used, such as the Competition Appeals Tribunal – subject of course to subsequent appeal to higher courts.”)
196 Qq 38–9
197 Q 38
198 George Peretz QC, Briefing Paper: The Government’s proposed legislation for trade remedies, UK Trade Forum, 22 January 2018
199 Q 80
201 Q 80
203 See Qq 39–41
205 See Public Law Project, An Introduction to Judicial Review, 26 June 2013, p 1; Ian David Turner, “Judicial Review, Irrationality and the Review of Merits”, The Nottingham Law Journal, vol 15(2) (2006), p 37; House of Commons Library, “Judicial Review: A short guide to claims in the Administrative Court”, Research Paper 06/44, 28 September 2006, pp 7–8.
206 See Michael Asimow and Jeffrey S Lubbers, “The Merits of “Merits Review”: a comparative look at the Australian Administrative Appeals Tribunal”, AIAL Forum, vol 67 (2011), p 59
207 Q 45 [Daniel Moulis]
208 Q 45 [Daniel Moulis]
209 Oral evidence taken before the International Trade Committee on 29 November 2017, HC (2017–19) 603i, Q 38 [Bernardine Adkins]
211 This provision provides: “The Tribunal shall decide the appeal on the merits and by reference to the grounds of appeal set out in the notice of appeal”.
213 Q 84 [Daniel Moulis]
Published: 10 May 2018