The relevant law
1.6 We accept that, as a matter of Convention case-law,
future benefits, including income, only constitute a "possession"
within the meaning of Article 1 of Protocol 1 ECHR once those
benefits have been earned, or an enforceable claim to them exists.[6]
Claims for loss of future income, based on a mere expectation
of such income, therefore fall outside the scope of Article 1
of Protocol 1.
1.7 An enforceable contractual right to future income,
on the other hand, does amount to a "possession" within
the meaning of Article 1 of Protocol 1.[7]
Whether, in any particular case, a claim to a loss of future income
is based on a mere expectation of such income or an enforceable
contractual right to such income, will depend on a careful analysis
of the particular circumstances of the case, including the precise
nature and terms of the contract under which the claim to future
income is said to arise. Where, in the circumstances of a particular
case, a contract gives rise to an enforceable claim to future
income, legislation will result in a deprivation of such possessions
if it makes the performance of the contract illegal.
1.8 We do not agree with the Government's position,
set out in the Explanatory Notes to the Bill, that a party will
generally have an enforceable claim under a contract (and therefore
a possession for the purposes of Article 1 of Protocol 1) only
after the contract has been performed, and that where the
Bill prevents the performance of contracts the parties' continuing
obligations to each other will be governed by the general principles
of the law of frustration. This understates the scope of Article
1 of Protocol 1 as it applies to contractual rights. Parties have
enforceable claims under a contract before the contract
has been performed. For example, a contract may give rise to a
claim for damages for non-performance, or even, exceptionally,
in relation to certain types of contract (though not employment
contracts), for an order that the contract be performed.
1.9 We also remain of the view, expressed in our
earlier Report,[8] that
where such enforceable contractual rights exist, they do not fall
outside the scope of Article 1 of Protocol 1 merely because the
possibility of a hunting ban is well known. Once an enforceable
claim under a contract exists, it is a possession within the meaning
of Article 1 of Protocol 1. Its status as such is not in any way
diminished by the prospect of a change in the law rendering the
contract impossible to perform. Such a case is entirely different
from cases in which the issue has been whether a claim which arises
as a result of a court judgment is a "possession" for
the purposes of Article 1 of Protocol 1 where the legislature's
subsequent intervention to prevent the exploitation of a legal
loophole is clearly foreseeable.[9]
1.10 On the other hand, our earlier report should
not be read as saying that all economic benefits arising
under contracts relating to hunting are necessarily possessions
for the purposes of Article 1 of Protocol 1. Some such benefits
will be merely unenforceable expectations of future income under
a contract. Whether a particular benefit arising under a contract
constitutes a possession or not will depend on the circumstances
of the particular case including the terms of the contract in
question.
The effect of the Commons suggested
amendment
1.11 Against this background we consider the proposed
amendment delaying commencement to be significant in human rights
terms. It is clear from the parliamentary debates that the Government's
motivation for proposing deferred commencement is politically
controversial. We are concerned, not with the motive for deferral,
but with its effect in human rights terms. One effect is that,
as the Minister said in the debates, it will allow businesses
that are reliant on hunting to refocus and diversify, and will
allow hunt employees more time to find new jobs.[10]
1.12 Most contracts include a notice period whereby
the contract can be terminated by either party on proper notice
to the other. Where a contract is terminated in accordance with
such a notice clause, no enforceable claim arises under the contract.
A possession, in the form of a right to a contractual benefit,
will therefore only exist for the duration of the notice period.[11]
In addition, even where there is a failure to perform a contract
giving rise to an enforceable claim for damages, the value of
that claim is limited by the duty to mitigate the loss arising
from the breach, for example, in the case of an employment contract,
by finding alternative employment, or, in the case of a contract
for the provision of facilities or services to a hunt, by finding
an alternative use for the facilities or services.
1.13 The delay in the commencement of the Act which
is proposed in the suggested Commons amendment is for a period
(more than 18 months) which is likely to be longer than most contractual
notice periods. Even where it is not, the value of any enforceable
contractual claim in respect of an anticipatory failure to perform
so far in the future would be greatly diminished by the length
of the period in which there is an opportunity to mitigate the
loss which would otherwise arise.
1.14 In our view, the effect of the amendment suggested
by the Commons is that it is highly unlikely in practice that
there will be any interference with enforceable contractual claims
which constitute deprivations of possessions for the purposes
of Article 1 of Protocol 1. We
therefore conclude that, if the Bill were enacted with the suggested
amendment, the lack of a scheme for compensation is unlikely to
give rise to any incompatibility with Article 1 of Protocol 1.
1 HL Bill 112-EN Back
2
Seventeenth Report, Session 2002-03, Scrutiny of Bills: Final
Progress Report, HL Paper 186, HC 1278, at paras 1.1-1.21 Back
3
ibid., at para. 1.16 Back
4
HL Bill 112-EN, para. 69 Back
5
HL Bill 113, proposing the insertion of a new Clause 15 dealing
with commencement. The ban on hare coursing would still commence
three months after Royal Assent. The Government originally proposed
a delay in commencement of 2 years, but accepted an amendment
proposing 31st July 2006 so that the ban would come into force
before the start of a new hunting season: see Alun Michael MP,
HC Deb., 15 September 2004, col. 1362. Back
6
See for example, amongst various statements to this effect in
the Court's case-law, Ian Edgar (Liverpool) Limited , App.
No. 37683/97 (25 January 2000); Andrews v UK, App. No.
37657/97 (26 September 2000); Slough and King v UK, Apps
nos. 37679/97 and 37682/97 (26 September 2000).These cases all
concerned complaints by businesses connected with the firearms
industry about the adequacy of the compensation paid in respect
of the consequences for their business of the legislative ban
on handguns. Back
7
See for example Association of General Practitioners v Denmark,
App. No. 12947/87, (1989) 62 DR 226, in which the Commission "would
not exclude that" a contractual right to fees at a particular
level was a possession within the meaning of Article 1 of Protocol
1 (at least during the contractual period of notice: see further
below). Back
8
Seventeenth Report of Session 2002-03, op cit., at para. 1.15 Back
9
See for example National Provincial Building Society v UK
(1998) 25 EHRR 127 and OGIS-Institut Stanislas v France,
Apps. Nos. 42219/98 and 54563/00 (27 May 2004), in both of which
the Court was concerned with whether a legislature's retroactive
intervention to limit or remove claims arising from a court judgment
were justifiable interferences with possessions under Article
1 of Protocol 1. Back
10
Alun Michael MP, HC Deb., 15 September 2004, cols 1356-7; and
see also, to similar effect, Jean Corston MP, ibid, at cols 1371-1373 Back
11
See for example in Association of General Practitioners v Denmark,
op cit., a contractual right to be remunerated at an agreed level
was treated as a "possession" within Article 1 of Protocol
1, but only for the duration of the contractual notice period. Back
