B e f o r e :
LORD JUSTICE SIMON BROWN
LORD JUSTICE LAWS
LORD JUSTICE JONATHAN PARKER
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International Transport Roth GmbH & Others
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| ||Secretary of State for the Home Department||Appellant|
Lord Lester of Herne Hill QC, Dr Michael Peglow & Tom Weisselberg Esq
(instructed by Messrs Zimmers) for Roth & Others
Richard Gordon Esq QC, Nicholas Bowen Esq
(instructed by Messrs Davies Lavery) for Barsan & Others
Tim Nesbitt Esq (instructed by Messrs Rothera Dawson) for Luttich & Others
Ms Claire Newton (instructed by Messrs Breeze Benton) for Mr Koditz
Gerald Barling Esq, QC, Mark Shaw Esq & Ms Jane Mulcahy
(instructed by Treasury Solicitor) for the Secretary of State
Hearing dates : 15th January 2002 - 22nd January 2002
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Lord Justice Simon Brown:
- The increasing scale of illegal entry into the UK over recent years is well known. It is acknowledged by all to represent a grave social evil. The first attempt to combat it was by penalising those operating ship and aircraft services £1,000 (raised in 1991 to £2,000) for each passenger conveyed to the UK without proper travel documents - see the Immigration (Carriers’ Liability) Act 1987, upheld by the Divisional Court in the face of a European Community Law challenge in R v. Secretary of State for the Home Department, ex parte Hoverspeed  EuLR 595. The resultant difficulty in reaching the UK without legitimate travel documents drove illegal entrants instead to travel clandestinely, usually by concealment in freight vehicles. The rate of clandestine entry increased dramatically. In 1992 less than 500 clandestine entrants were discovered. By 1997 this had increased to over 4,000 and by 1999 to 16,522. No responsible government could have ignored the problem. Firm action was clearly required. Thus it was that Part II of the Immigration and Asylum Act, 1999 was passed and a new penalty regime created to deter those intentionally or negligently allowing clandestine entrants into the UK. The scheme was first introduced at Dover on 3rd April 2000, and then applied to the rest of the UK on 3rd July 2000. It has proved highly effective. The number of clandestine entrants discovered at Dover fell from 1,470 in March 2000 to 588 in April 2001 (despite the increase in detection rates). Indeed, the success of the scheme drove many clandestine entrants onto the railways so that on 1st March 2001 it was extended to cover rail freight arrivals, and on 1st October 2001 Eurotunnel’s freight shuttle.
- By these proceedings four groups of lorry drivers and haulage companies, some 50 in all, challenge the lawfulness of the scheme and the Home Secretary’s decisions that they are liable for penalties under it. On 5th December 2001, following an eight-day hearing of preliminary issues in October, Sullivan J upheld the challenge, declaring the legislation: a) incompatible with Article 6 of the Convention and Article 1 of the First Protocol to the Convention (pursuant to section 4 of the Human Rights Act, 1998); and b) inconsistent with Community law as comprising unjust restrictions on the free movement of goods and the right to provide haulage services contrary, respectively, to Articles 28 and 49 of the EC Treaty. Now before us is the Home Secretary’s appeal against that order, brought by permission of the judge below.
- Sullivan J’s reserved judgment, right or wrong, is a tour de force. It extends to 131 pages of which the first 96 contain a masterly exposition of the relevant facts, law and argument, detailed yet incisive. I cannot improve upon it, and shall instead confine myself to setting out the most essential provisions of the legislation (itself occupying eight pages of the judgment) and the barest outline of the facts before turning to the central issues and the judge’s conclusions upon them.
- The 1999 Act
“32(1) A person is a clandestine entrant if-
(a) he arrives in the United Kingdom concealed in a vehicle, ship or aircraft,
(b) he passes, or attempts to pass, through immigration control concealed in a vehicle, or
(c) he arrives in the United Kingdom on a ship or aircraft, having embarked-
(i) concealed in a vehicle; and
(ii) at a time when the ship or aircraft was outside the United Kingdom,
and claims, or indicates that he intends to seek asylum in the United Kingdom or evades, or attempts to evade, immigration control.”
Section 32(2), (3) and (4) (in combination with the relevant Regulations) provide that the person(s) responsible for a clandestine entrant is (are) liable to a penalty of £2,000 in respect of each such entrant concealed in the transporter, which must be paid to the Home Secretary within 60 days of service of the penalty notice if the liability falls to be discharged. Section 32(5) and (6) identify the person(s) responsible for a clandestine entrant. In the case of a vehicle or trailer this is the owner, hirer, driver or operator.
“32(7) Subject to any defence provided by section 34, it is immaterial whether a responsible person knew or suspected-
(a) that the clandestine entrant was concealed in the transporter; or
(b) that there were one or more other persons concealed with the clandestine entrant in the same transporter.”
- Section 33 provides for a code of practice to be issued by the Home Secretary, after consultation, for approval by both Houses of Parliament. This code is to be followed by anyone operating a system for preventing the carriage of clandestine entrants and is to be taken into account when determining whether such a system is effective in the context of any defence under section 34. The code of practice was brought into force by Order on 3rd April 2000.
“34(1) This section applies if it is alleged that a person (‘the carrier’) is liable to a penalty under section 32.
(2) It is a defence for the carrier to show that he, or an employee of his who was directly responsible for allowing the clandestine entrant to be concealed, was acting under duress.
(3) It is also a defence for the carrier to show that-
(a) he did not know, and had no reasonable grounds for suspecting, that a clandestine entrant was, or might be, concealed in the transporter;
(b) an effective system for preventing the carriage of clandestine entrants was in operation in relation to the transporter; and
(c) that on the occasion in question the person or persons responsible for operating that system did so properly.
(4) In determining, for the purposes of this section, whether a particular system is effective, regard is to be had to the code of practice issued by the Secretary of State under section 33.
(5) If there are two or more persons responsible for a clandestine entrant, the fact that one or more of them has a defence under subsection (3) does not affect the liability of the others.
35(1) If the Secretary of State decides that a person (‘P’) is liable to one or more penalties under section 32, he must notify P of his decision.
(2) A notice under subsection (1) (a ‘penalty notice’) must-
(a) state the Secretary of State’s reasons for deciding P is liable to the penalty (or penalties);
(b) state the amount of the penalty (or penalties) to which P is liable;
(c) specify the date before which, and the manner in which, the penalty (or penalties) must be paid; and
(d) include an explanation of the steps-
(i) that P must take if he objects to the penalty;
(ii) that the Secretary of State may take under this Part to recover any unpaid penalty.
(6) If a person on whom a penalty notice is served, or who is treated as having had a penalty notice served on him, alleges that he is not liable for one or more, or all, of the penalties specified in the penalty notice, he may give written notice of his allegation to the Secretary of State
(7) Notice under subsection (6) (‘a notice of objection’) must-
(a) give reasons for the allegation; and
(b) be given before the end of such period as may be prescribed.
(8) If a notice of objection is given before the end of the prescribed period, the Secretary of State must consider it and determine whether or not any penalty to which it relates is payable.
(10) Any sum payable to the Secretary of State as a penalty under section 32 may be recovered by the Secretary of State as a debt due to him.
36(1) If a penalty notice has been given under section 35, a senior officer may detain any relevant-
(b) small ship, or
(c) small aircraft,
until all penalties to which the notice relates, and any expenses reasonably incurred by the Secretary of State in connection with the detention, have been paid.
(2) That power;
(a) may be exercised only if, in the opinion of the senior officer concerned, there is a significant risk that the penalty (or one or more of the penalties) will not be paid before the end of the prescribed period if the transporter is not detained; and
(b) may not be exercised if alternative security which the Secretary of State considers is satisfactory, has been given.
(4) The detention of a transporter under this section is lawful even though it is subsequently established that the penalty notice upon which the detention was based was ill-founded in respect of all or any of the penalties to which it related.
(5) But subsection (4) does not apply if the Secretary of State was acting unreasonably in issuing the penalty notice.
37(1) This section applies if a transporter is detained under section 36.
(2) The person to whom the penalty notice was addressed, or the owner or any other person claiming an interest in the transporter, may apply to the court for the transporter to be released.
(3) The court may release the transporter if it considers that-
(a) satisfactory security has been tendered in respect of the transporter for the payment of the penalty alleged to be due and connected expenses;
(b) there is no significant risk that the penalty (or one or more of the penalties) and any connected expenses will not be paid; or
(c) there is a significant doubt as to whether the penalty is payable and the applicant has a compelling need to have the transporter released.
(4) If the court has not ordered the release of the transporter, the Secretary of State may sell it if the penalty in question and connected expenses are not paid before the end of the period of 84 days beginning with the date on which the detention began.”
- Paragraph 1 of Schedule 1 to the Act requires the leave of the court to be obtained before a transporter is sold and forbids such leave except on proof that the penalty is due.
The core features of the legislation
- A clandestine entrant is someone who arrives illicitly in the UK by means of concealment in a vehicle, and those responsible, generally the owner, hirer or driver, are liable for each such entrant to a fixed penalty of £2,000 unless they can establish: (i) that they were acting under duress; or (ii) (this, of course, being far more commonly the defence): a) that they had neither actual nor constructive knowledge of the clandestine entrant; and b) that there was an effective system for preventing the carriage of clandestine entrants, which c) was operated properly on the occasion in question. Once the Secretary of State has issued a penalty notice a senior immigration officer may detain the vehicle if he considers there is a serious risk that the penalty will not be paid and no satisfactory alternative security has been given. In that event the owner or driver may apply to the court which has power to release the transporter if: (a) satisfactory security has been tendered; (b) there is no real risk of the penalty not being paid; or (c) there is a real doubt as to whether the penalty is payable and the applicant has a compelling need to have the transporter released. I shall refer to the person(s) responsible as “the carrier(s)” and to the provisions collectively as “the scheme”.
- I next set out Article 6 of the Convention and Article 1 of the First Protocol (hereafter “Article 1”) since it is by reference to these two Articles that the scheme must stand or fall:
1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. ….
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him.
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.
Protection of Property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
- These are before us in intimidating detail. What is presently in issue, however, is the intrinsic legality of the scheme itself rather than the liability of carriers in individual cases. The facts, therefore, at this stage are relevant only: a) to indicate the extent of the problem of illegal entry and the success of the scheme in combating it (sufficiently indicated in paragraph 1 above); and b) to illustrate how ineluctably the scheme in practice works.
- By June 2001, 988 penalty notices had been served in respect of 5,433 clandestine entrants. 249 vehicles had been detained, of which 190 were subsequently released on payment of the penalty or a substantial security. In some 25% of cases where clandestine entrants were discovered, either no penalty notice was served or, following the carrier’s notice of objection, the Secretary of State decided, under section 35(8), that the penalty was not payable. The average penalty payable is some £12,000 (in respect, therefore, of six clandestine entrants). The bulk of the penalties are paid by companies, but some 10% are paid by individuals including occasional car drivers. By October 2001 the value of the penalties paid or agreed to be paid was £2.432 million. In some cases instalment payments have been agreed, in the most extreme case at the rate of £40 per month for 12½ years (£6,000).
- The clandestine entrants were detected sometimes by immigration officers, sometimes by members of the public, and sometimes by the drivers themselves who then co-operated with the police in apprehending the culprits. In three of the cases before us, where the drivers only discovered that clandestine entrants were on board when already travelling up the motorway to London, they would never have been penalised had they not themselves alerted the police.
The judge’s conclusions favourable to the appellants
- Before turning to the particular basis on which the judge struck down the scheme it is helpful first to note certain important conclusions which he reached in favour of the Home Office. One of these concerns what was perhaps the most fundamental of the grounds on which it was sought to impugn the scheme: the carriers’ contention that it makes the Secretary of State the sole arbiter of whether they have a good defence under section 34 and accordingly breaches Article 6(1) irrespective of whether the scheme is properly to be regarded as civil or criminal. Rejecting this contention, the judge concluded, consistently with the Divisional Court’s decision inR (Balbo B & C Autotransporti Internazionale) -v- Secretary of State for the Home Department  1 WLR 1556, that it is open to the carrier, whether upon a civil action by the Secretary of State under section 35(10) to recover the penalty as a debt, or in the carrier’s own proceedings for a declaration of non-liability, to assert his statutory defence. This, moreover, he can do whether or not he has availed himself of the “notice of objection” procedure under section 35 (so that this is to be construed as merely offering the option of an administrative review; the word “must” in section 35(2)(d)(i) being read as “may”). The Divisional Court in Balbo apparently reached this view (and therefore dismissed the judicial review challenge before them on the ground that a more suitable alternative remedy was available) without great difficulty. Sullivan J, clearly after fuller argument on the point, thought it “… strains the language of the Act …” but concluded that such a construction was possible (assuming always that the scheme involves the determination of civil obligations rather than criminal liability) in accordance with section 3 of the 1998 Act so as to avoid making a declaration of incompatibility. Although Mr Gordon QC for some of the respondents returned to the point, I for my part am satisfied that the judge’s conclusion was correct. Put at its simplest, section 35(10) only permits the “debt” to be recovered in respect of “… any sum payable to the Secretary of State as a penalty under section 32 …” and, by virtue of section 32(7), a penalty is not so payable if the carrier can establish a defence under section 34. This, moreover, is how the matter has always been understood and intended by the Home Office: as stated in the Regulatory Impact Assessment which led to the scheme’s enactment:
“… where there is a dispute as to whether the penalty is owed, it is recoverable by court action, in the course of which the defendant will be able to put forward any grounds on which he alleges he is not liable.”
- Other important conclusions of the judge in favour of the Home Office - and these, unlike the Balbo point, are not contested on the appeal - are: a) that there was sufficient consultation and publicity prior to the implementation of the scheme - “It is difficult to see what more could have been done by way of increased publicity.”; b) that,
“For the most part [the code’s] requirements are not unduly demanding, and do not amount to much more than the kind of basic, common-sense measures which would be taken in any event by responsible drivers/hauliers in order to ensure the security of their vehicles and the loads they are transporting” (my emphasis);
and c) that:
“… within the constraints imposed by the Act [the judge’s emphasis], the penalty regime is being operated conscientiously, reasonably, and as fairly as possible.”
The judge’s conclusions unfavourable to the appellants
- The judge declared the scheme incompatible with Articles 6 and 1: Article 6 because it involves the determination of a “criminal charge” and therefore fails to meet the procedural requirements of Article 6(1), (2) and (3); Article 1 because the provisions for the detention of vehicles constitute an unjustifiable infringement of the right to property. In a little more detail his conclusions were these. The scheme involved criminal rather than civil liabilities despite its classification as civil under domestic law, essentially because:
“[it] was introduced, at least in part, because of the difficulties experienced in obtaining proof of facilitation to the requisite criminal standard under section 25(1) of the 1971 Act.”
The Act removed those difficulties by requiring the carrier under section 34(3)(a) to prove that he was not complicit. The Act, in short, is intended to deter both dishonesty and carelessness.
“[T]he penalty is substantial and its purpose is both punitive and deterrent.”
It deters those carriers who “… do not exercise sufficient vigilance … by punishing them with the imposition of a severe penalty”. The penalty “… is greatly in excess of fixed penalties (classified as criminal) in the road traffic sphere”.
- The right to silence (implicit in the requirements of a fair trial) is illusory in practice since its exercise
“… will materially increase the chance of a senior officer concluding that there is a significant risk that the penalty will not be paid (section 36(2)(a)), resulting in the detention of the vehicle that may well be, in addition to his means of livelihood, his ‘mobile home’ whilst he is in a foreign land.”
- The reverse burden of proof imposed by section 34 is impermissible and thus breaches the presumption of innocence required by Article 6(2). As operated here, it fails to strike a fair balance between the demands of the general interest of the community and the protection of the fundamental rights of the individual. “[U]ndue deference is not warranted …” to the state’s assessment of the demands of the general interest of the community because “[T]here was no evaluation of the possibility of creating a new criminal offence based on failure to take due care or failure to take best practicable means” to secure and check vehicles, “… no indication that Parliament was ever invited to consider the implications of the reverse burden of proof …”; “…[no] evidence that the necessary balancing exercise was carried out by the Executive …”, and these very cases “… do not establish the need for a reverse onus of proof … [but rather] confirm … that a new offence based on failure to take due care … would not be unduly difficult to prove to the criminal standard and that UKIS would have no real difficulty in establishing liability to a civil penalty if it had to prove negligence to the civil standard”.
- The judge held Article 6(3) breached because “… an allegation of liability is effectively being made from the moment of discovery …” and it is at that stage that the carrier is entitled to the additional protections conferred by Article 6(3).
- In these few sentences I have endeavoured to summarise what is contained in paragraphs 145-181 of the judgment below, which cover 17 pages. I do not pretend to have done them justice.
- The judge found Article 1 breached in respect of the vehicle detention provisions because of the constraints imposed upon the court’s powers to order release under section 37(3). It is implicit in that provision that the carrier will be unable to obtain “rapid access” to the court for a determination of the general merits of the decision to detain. In particular, section 37(3)(c) requires not merely a realistic prospect of defeating the penalty claim but a “compelling” need for the vehicle’s release and the section as a whole (enabling an interim application for release) clearly does not contemplate a final substantive determination as to whether the penalty is payable with an order for release if it is not.
- Turning to the Community law challenge under Articles 28 and 49, the judge held that the scheme has the effect, albeit unintended, of restricting the free movement of goods and services and that this is an impermissible restriction where, as here, it involved (as necessarily it did, given the violation of Articles 6 and 1) an unreasonable and disproportionate means of achieving its intended object.
The scope of the appeal
- In the course of six full days of argument on the appeal - not to mention copious written arguments submitted before, during and even after the hearing - a vast range of submissions have been advanced. It is impossible in the course of a judgment of manageable length to refer to more than a fraction of them. Again, I shall not do them justice. The appellants contend: first, that the scheme is properly to be characterised as civil, not criminal, so that the underlying basis for the judge’s holding that it breaches Article 6 falls away; alternatively, secondly, that even if the scheme is criminal, the reverse burden and other suggested breaches of Article 6 are nonetheless permissible; alternatively, thirdly, that any apparent incompatibility with the Convention can and should be avoided by use of the Court’s interpretative obligation under section 3 of the 1998 Act. They dispute too the judge’s conclusions both on Article 1 of the Protocol and Articles 28 and 49 of the EC Treaty.
- The respondents for their part seek to support the judge’s conclusions on all points, and in addition contend: first, that even if the scheme is civil, nevertheless it breaches the procedural protections in any event to be implied under Article 6; second, that the scale and inflexibility of the penalty and the restraints upon the court’s powers to order release themselves constitute breaches of Article 6; and thirdly, that Article 1 is breached not merely by the detention provisions but also by the scale and inflexibility of the penalty.
- In the course of all these arguments, no fewer than 227 authorities were put before us (albeit some were referred to only in the written skeletons). I shall mention very few only, and those for the most part merely to illustrate the central principles running through this area of the law. None of the cases, to my mind, comes near to reproducing the singular features of the present case.
- Let me at this stage seek to identify these features, since it is crucial to keep them well in mind at all times. As for the scheme itself, there are principally three which appear to bear hardest upon carriers. These are: first, that the burden of establishing blamelessness lies on them (it being necessarily implicit in this that sometimes, if only rarely, the blameless will be penalised); second, that the penalty imposed is fixed and cumulative, no flexibility whatever being allowed either for degrees of blameworthiness (or, in the case of owners or hirers, the fact that their liability may be purely vicarious) or mitigating circumstances such as a driver’s co-operative conduct or financial means; third, that even when a carrier is eventually determined not to be liable, whether by the Secretary of State under section 35(8) or by the court, his vehicle may well have been detained meanwhile and for this he will receive no compensation unless only the Secretary of State acted unreasonably in issuing the penalty notice (which, given where the burden of proof lies, will be well-nigh impossible to establish). When hereafter I speak of the harshness of the scheme I shall be referring principally to these three features in combination. It should not be thought, however, that there are not other aspects of the scheme which also give rise to concern.
- Other important and clearly countervailing features of the scheme seem to me: first, the obvious need for firm action of some kind to combat the acute problem of illegal immigration (which hereafter I shall call the social goal); second, that the scheme lacks any criminal sanction and is clearly designed rather to encourage vigilance than to punish the dishonest. Insofar as it achieves the latter, it does so lightly and to avoid the Gilbertian situation of penalising the careless and allowing the dishonest to escape scot-free. Third, the fact (self-evident as it appears to me, although I recognise that in this I am disagreeing with the judge below) that softening the scheme by removing or materially changing any, let alone all, of the above three features would significantly impair its effectiveness in achieving the social goal (although it by no means follows, of course, that the sort of alternative schemes suggested by Sullivan J would not have proved at least reasonably effective). All three features are inter-related. Suppose, by way of example, that vehicles could not be detained (or alternative security obtained) when, ordinarily on the same day the clandestine entrants are discovered, the penalty notice is served. Foreign hauliers especially would be likely simply to return home rather than pay the penalty.
- Those being the most critical features of this case, it seems to me that ultimately one single question arises for determination by the Court: is the scheme not merely harsh but plainly unfair so that, however effectively that unfairness may assist in achieving the social goal, it simply cannot be permitted? In addressing this question I for my part would recognise a wide discretion in the Secretary of State in his task of devising a suitable scheme, and a high degree of deference due by the Court to Parliament when it comes to determining its legality. Our law is now replete with dicta at the very highest level commending the courts to show such deference. I take as a single example what Lord Bingham said in Brown -v- Stott  2 WLR 817, 834-835:
“Judicial recognition and assertion of the human rights defined in the Convention is not a substitute for the processes of democratic government but a complement to them. While a national court does not accord the margin of appreciation recognised by the European Court as a supra-national court, it will give weight to the decisions of a representative legislature and a democratic government within the discretionary area of judgment accorded to those bodies ….”
- That said, the court’s role under the 1998 Act is as the guardian of human rights. It cannot abdicate this responsibility. If ultimately it judges the scheme to be quite simply unfair, then the features that make it so must inevitably breach the Convention. As the ECtHR said twenty years ago in Sporrong and Lonnroth -v- Sweden (1982) 5 EHRR 35, 52:
“… the Court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1.”
- There is an irreducible minimum of Convention rights. Some, of course, are absolute. One of these is “the fundamental and absolute right to a fair trial” (Lord Hope in Brown -v- Stott, (above) at 851).
“The only balancing permitted is in respect of what the concept of a fair trial entails: here account must be taken of the familiar triangulation of interests of the accused, the victim and society.” (Lord Steyn in R -v- A (No 2)  2 WLR 1546, 1560)
- Even rights which are not absolute, moreover, can be interfered with only to an extent which is proportionate. However compelling the social goal, there are limits to how far the individual’s interest can legitimately be sacrificed to achieve it.
- With these thoughts in mind I come to the two Articles on which this case must turn, Articles 6 and 1, observing as I do so that in all the circumstances of the present case they seem to me to raise closely inter-locking considerations. To take an obvious example: to the extent that the carrier’s liability is sought to be justified as not punitive, and therefore civil (because involving no blameworthy conduct) under Article 6, it inevitably becomes the more difficult to justify as proportionate under Article 1.
- Ultimately, therefore, it seems to me altogether less important to arrive at a clear view as to whether the scheme breaches Article 6 or Article 1, or in some respects one and in some the other, than whether, taken as a whole, the scheme is not merely harsh but truly unfair. If it is, assuredly one or other if not both of these Articles are breached. To my mind, indeed, the two most telling paragraphs in the judgment below are those in which the judge expressed the view that: “… the additional protections conferred by Article 6(2) and 6(3), far from being unnecessary, are essential in the interests of elementary fairness.” (paragraph 162), and his overall conclusion that: “the regime is tough, but it is not fair.” (paragraph 212), rejecting the appellant’s contrary contention. Were we to agree with those conclusions, the appeal must necessarily fail.
- All that said one cannot escape the need to consider the scheme in the context of each Article.
- There is a wealth of Strasbourg case-law and a growing body of domestic authority concerning what, for Article 6 purposes, is criminal and what civil - or more particularly what under the autonomous Strasbourg approach must be regarded as criminal despite being categorised as civil under domestic law. Further extensive case-law then establishes that the various procedural safeguards expressly or impliedly provided by Article 6 are not ultimately dependent upon such a classification: the protections are sometimes found unnecessary even though the proceedings are criminal; sometimes essential even though the proceedings are civil. Why, therefore, attempt the classification exercise in the first place? Simpler surely to address the question as to whether the protections are indeed necessary to achieve a fair trial of whatever may be the issue. The contrast, indeed, between the two recent Court of Appeal decisions in Official Receiver -v- Stern  1 WLR 2230 and Han -v- Customs & Excise Commissioners  1 WLR 2253 is striking. In Stern, which concerned the use in directors’ disqualification proceedings of compelled evidence obtained under the Insolvency Act, the Court held, following the judgment of ECtHR in Albert & LeCompte -v- Belgium (1983) 5 EHRR 533, that the issue of fair trial should be considered in the round, having regard to all relevant factors, those factors including, but not being limited to, the facts that disqualification proceedings were not criminal and were primarily for the protection of the public, albeit they involved serious allegations and almost always carried a degree of stigma. In Albert & LeCompte the ECtHR found it unnecessary to decide whether the disciplinary action there involved a “criminal charge”. In Han, on the other hand, this Court by a majority decided as a preliminary issue (Stern not having been cited) that the imposition of civil penalties for dishonest evasion of VAT gave rise to “criminal charges”, leaving over for later decision whether in the result such proceedings would or would not involve a breach of Article 6. Given that not merely Sir Martin Nourse, who dissented, but also the other members of the Court (Potter and Mance LJJ), were clearly reluctant to categorise the proceedings as criminal, plainly not regarding them as unfair, it may be doubted whether the classification process will ultimately prove decisive. In short, the classification of proceedings between criminal and civil is secondary to the more directly relevant question of just what protections are required for a fair trial. I shall, however, address the issue, not least because it covers much of the same ground as must in any event be explored in deciding what protections are required here to achieve a fair trial.
- The first important question to resolve in this connection is as to the true nature of the scheme. What is its essential character? In the course of argument two rival views crystallised. One is that the scheme imposes a fixed penalty on the carrier simply for bringing in the clandestine entrant(s). That is what the scheme is designed to deter. It provides in short for an absolute or strict liability for which a substantial fixed penalty is payable, the severity of this deterrent, however, being tempered by the opportunity afforded to the carrier to escape liability by establishing a section 34 defence. This, assuming he is honest and vigilant, he should be able to do, at any rate when the matter comes before the court. On this view, there being nothing in the way of reprehensible conduct or criminality alleged against the carrier, and accordingly no slur or guilt attaching to liability, the scheme is civil and there is no breach of Article 6. The presumption of innocence simply does not arise: nothing approximating to guilt is being alleged. And the carrier enjoys a fair trial, because the central issue being tried is simply whether he was carrying a clandestine entrant (a fair trial also being accorded to any asserted section 34 defence).
- The alternative view, and, I have to say, to one to which I myself adhere, is that the true nature of the scheme is dictated by the conduct which the legislation is seeking to deter, and that is both dishonesty and carelessness. What the Regulatory Impact Assessment proposed was the introduction of
“… a new civil penalty for allowing (either by some degree of co-operation or by failing to make thorough checks) the transportation of clandestines into the UK.”
I do not see the section 34 defences merely as providing some lessening of an otherwise excessive deterrent for an absolute offence, but rather as part and parcel of a scheme imposing fault liability. The spate of recent decisions which consider the legality of reverse burdens of proof seem to me clearly to support such a view. As Lord Woolf observed in the Privy Council in A-G of Hong Kong -v- Lee Kwong-kut  AC 951, 968:
“… it is the substance rather than the letter of the language of the statute which is important when considering whether there is an exemption or proviso …”
- To similar effect, Lord Steyn in R -v- Lambert  3 WLR 206, 219:
“The distinction between constituent elements of the crime and defensive issues will sometimes be unprincipled and arbitrary. After all, it is sometimes simply a matter of which drafting technique is adopted: a true constituent element can be removed from the definition of the crime and cast as a defensive issue whereas any definition of an offence can be reformulated so as to include all possible defences within it. It is necessary to concentrate not on technicalities and niceties of language but rather on matters of substance.”
- I recognise, of course, that these were cases in the mainstream of the criminal jurisdiction. But surely a state can no more escape criminal classification and thereby the protections of Article 6 by artificially separating out a defence from the substance of the allegation, than by classifying offences as “regulatory” instead of criminal - held ineffective by the ECtHR in Ozturk -v- Turkey (1984) EHRR 409.
- The three criteria long established by the case-law and applied by the judge below for determining whether the scheme is criminal or civil are: first, the domestic classification of the proceedings (effectively determinative if the classification is criminal but no more than a starting point if, as here, it is civil); second, the essential nature of the “offence” (I would prefer the more neutral term “liability”, which can be either criminal or civil); third, the nature and degree of severity of the potential penalty. Rather, however, than follow the conventional route I propose instead to consider classification from a broader standpoint, recognising that the second and third criteria, albeit in theory to be applied alternatively, can apply cumulatively and in any event raise substantially overlapping considerations. Generally under the second criterion one considers whether the liability is punitive and deterrent, whilst under the third regard is had to its nature and severity. All these considerations, however, necessarily raise the question whether liability involves blameworthiness. If it does, then by its very nature it may be thought to include a punitive (in the sense of retributive) element.
- The decided cases state the applicable principles. Few, however, seem to me helpful with regard to their individual facts. Han is perhaps the closest in point, and tends to support the view that the scheme is criminal. There, however, criminality was more obviously involved in that the statutory liability only arose when the “… conduct involves dishonesty …” which, as Potter LJ pointed out “… would otherwise be treated, or generally regarded, as criminal in nature”. And there, indeed, the Commissioners were required to prove the dishonesty, albeit only to a civil standard. The case is thus distinguishable.
- So too, however, is the decision of the Divisional Court (Lord Woolf CJ and Poole J) in Goldsmith -v- Customs & Excise Commissioners  1 WLR 1673 - not referred to either in Han or by Sullivan J below - upon which the appellants seek to rely. There it was decided that condemnation and forfeiture proceedings under section 139 of the Customs & Excise Management Act, 1979, following the applicant’s failure to prove that the 26kg of tobacco he imported were for his personal (rather than commercial) use, were civil. As Lord Woolf CJ stated:
“… none of the usual consequences of a criminal conviction follow from condemnation and forfeiture proceedings. There is no conviction or finding of guilt. Under domestic law the person concerned is not treated as having a conviction. The person concerned is not subject to any other penalty, apart from the consequences of the forfeiture and loss of the goods.”
But it is surely one thing to be unable to justify importing goods which are then confiscated; quite another to be penalised £2,000 for each clandestine entrant dishonestly or negligently brought in.
- The only other authority I should mention in this connection is Air Canada -v- United Kingdom (1995) EHRR 150, again not referred to in Han and again relied upon by the appellants, in which the ECtHR declined to classify, as criminal, proceedings (again under the Customs & Excise Management Act, 1979) by which Air Canada were required to pay a £50,000 penalty to redeem their forfeited aircraft. A number of features of this case, however, distinguish it from the present, essentially: a) the Court’s acceptance that the process was in rem; b) the discretion there as to the amount of the penalty payable in lieu of forfeiture; c) liability was not dependent on culpability although in fact the penalty was imposed for the latest in a long series of security lapses by the airline; and d) the amount was not large in relation to the value of the aircraft or the drugs which had been smuggled in. These considerations apart, the decision was by a majority of 5:4, the dissenting judgments being perhaps the more powerfully reasoned, and the Strasbourg jurisprudence having since then moved yet further towards the respondents’ position - see particularly AP, MP and TP -v- Switzerland (1997) 26 EHRR 541 and Lauko -v- Slovakia (2001) 33 EHRR 40 (both considered in Han).
- Having, as stated, formed the view that liability under this scheme is indeed targeted at those truly regarded as in some degree culpable, it follows that I incline to the judge’s view that, for Article 6 purposes, the scheme is properly to be regarded as criminal. However, on the first of the more directly relevant questions which then follow, questions arising, as I have already explained, irrespective of classification, namely whether the scheme breaches Article 6(2) on the ground that the reverse onus under section 34 violates the presumption of innocence, I take a different view from that reached below.
- This is not an issue I propose to consider at great length. We were shown all the more important recent decisions on reversing the burden of proof - AG of Hong Kong -v- Lee Kwong-kut, Brown -v- Stott (concerning the related question of the privilege against self-incrimination), R -v- DPP ex parte Kebilene  2 AC 326, R -v- A(No 2)  2 WLR 1546, R -v- Lambert  3 WLR 206 (all but the first in the House of Lords) and, most recently, Lynch -v- DPP  EWHC Admin 882, in which the Divisional Court (Pill LJ & Poole J) on 8th November 2001 held that the requirement under section 139 of the Criminal Justice Act 1988 for someone found with a lock-knife in his possession in a public place to establish good reason or lawful authority for that, does not offend Article 6. Pill LJ, having taken as his starting point the ECtHR’s decision in Salabiaku (1988) 13 EHRR 379, which permits a reverse onus provided the relevant presumptions are defined within reasonable limits, said this:
“There is a strong public interest in bladed articles not being carried in public without good reason. I do not find it obviously offensive to the rights of the individual that it is for him to prove a good reason on a balance of probabilities. Respect should be given to the way in which a democratically elected legislature has sought to strike the right balance, as in my view it has. Parliament is entitled, without infringing the ECHR, to deter the carrying of bladed … articles in public to the extent of placing the burden of proving a good reason on the carrier. The defendant is proving something within his own knowledge … In distinguishing Lambert I would give some, although limited, weight in striking the balance to the much more restricted power of sentence for this offence than for an offence under section 8. A section 139 offence is undoubtedly ‘truly criminal’ but at least the aggravating feature of a potential life sentence, to which Lord Steyn attached weight in Lambert, is not present.”
In Lambert, of course, the House of Lords applied section 3 of the 1998 Act to construe section 28 of the Misuse of Drugs Act, 1971 as if it imposed an evidential rather than a persuasive burden on the accused.
- True it is that the carrier of clandestine entrants, unlike the carrier of flick-knives in a public place, does not know of their existence. There are, however, countervailing features of the scheme which make it even less “obviously offensive to the rights of the individual” that he should be required to prove his defence, not least that the financial penalty here is still further from the life sentence available in Lambert than the lesser prison sentence noted by Pill LJ in Lynch. In both cases, moreover, the “defendant” is proving something within his own knowledge. The Crown’s case here that they would be in an impossible position if they had to prove both dishonesty and carelessness seems to me unanswerable. Only the carrier knows whether he knew or suspected that clandestine entrants were concealed in his lorry and similarly he is far better placed than UKIS to know (or certainly to discover) whether there was in place an effective system for securing the vehicle, and whether that system was operated properly.
- Still less persuaded am I that the scheme involves any impermissible invasion of the carrier’s right to silence. The suggestion appears to be that because, if a carrier remains silent, his vehicle is more likely to be detained, he is therefore under pressure to reveal his defence and in doing so may compromise such better defence as he might later choose to advance. I find it an unattractive argument.
- The mere fact, therefore, that the burden of disproving dishonesty and negligence is placed by the scheme upon the carrier does not of itself seem to me to violate of Article 6. The reverse onus, however, cannot be ignored. Rather, in combination with the vehicle detention provisions and the inflexibility of the substantial financial penalties, it places an immense burden on carriers. It is, for example, one thing to put the burden of disproving culpability upon the carrier; quite another to allow his vehicle to be detained until he has discharged that burden. I know of no other such provision in our law. Take an owner/driver of limited means whose lorry has been penetrated by six clandestine entrants (and, as Sullivan J noted, their persistence, skill and ruthlessness in achieving entry can hardly be exaggerated) and who himself discovers and reports that fact on arrival. Assume that despite exercising all proper care in checking his vehicle’s security he has breached the code, perhaps by failing to keep a written record of such checks (it being immaterial under the scheme whether the breach is actually causative of the clandestine entrants’ presence in the vehicle). Or assume merely that the immigration officer refuses to accept that the owner/driver knew nothing of the entry. He may well be unable to put up the required security. If a foreigner, his problems will be compounded. His vehicle is likely to be detained and it may eventually have to be sold to pay the fixed £12,000 penalty. There are many tales of genuine hardship amongst the court’s papers.
- It is when one considers that sort of (all too possible) scenario that the scheme taken as a whole comes to appear, as it seems to me, quite frankly unfair. Insofar as the liability is suggested to be civil and not to involve moral culpability on the driver’s part, the penalty far exceeds what any individual ought reasonably to be required to sacrifice in the interests of achieving improved immigration control (I say “improved” because, of course, the social goal here is relative rather than absolute; it is not as if vigilance were being required of carriers to avoid, say, terrorists bringing in a nuclear weapon). But even assuming, as I do, that the scheme is directed towards punishing carriers for some fault, it cannot to my mind be right to impose so high a fixed penalty without possibility of mitigation. The hallowed principle that the punishment must fit the crime is irreconcilable with the notion of a substantial fixed penalty. It is essentially, therefore, on this account rather than because of the reversed burden of proof that I would regard the scheme as incompatible with Article 6. What in particular it offends is the carrier’s right to have his penalty determined by an independent tribunal. To my mind there surely is such a right. I recognise that at the opposite end of the criminal spectrum Strasbourg case-law presently allows the Secretary of State to fix the tariff part of a mandatory life sentence - on the basis that murder is a uniquely wicked crime for which life imprisonment can be justified as proportionate in all cases - see Wynne -v- United Kingdom  19 EHRR 333. I cannot think, however, that other substantial fixed penalties can properly be put beyond the Court’s purview. Sentencing is, like all aspects of the criminal trial, a function that must be conducted by an independent tribunal. If, as I would hold, the determination of liability under the scheme is properly to be characterised as criminal, then this fixed penalty cannot stand unless it can be adjudged proportionate in all cases having regard to culpability involved. In this regard the appellants rely heavily on Hoverspeed. In my judgment, however, for reasons I shall come to later, it cannot sustain the weight of reliance placed upon it.
- I had wondered in the course of argument whether the penalty could be justified as properly exigible for the carriage of clandestine entrants as an absolute offence - in which case the scheme plainly ought not to be condemned because its effect is tempered by the availability of certain defences. As Lord Woolf pointed out in AG of Hong Kong:
“It would not assist the individuals who are charged with offences if, because of the approach adopted to ‘statutory defences’ by the courts, the legislature, in order to avoid the risk of legislation being successfully challenged, did not include in the legislation a statutory defence to a charge.”
- The only relevant examples of absolute offences shown to us, however, were: a) road haulage offences such as the use of vehicles in a dangerous condition, for which the level of penalty is not merely lower than that prescribed by the scheme, but, no less importantly, is subject to a maximum rather than fixed; and b) the ECJ case of Hansen (1990) ECR I 2911 in which the court upheld the strict criminal liability of an employer under Danish law for tachograph offences committed by his employees on the express basis that the fine imposed (not large and at large) “… is not disproportionate to the objective pursued …”. Mr Barling QC was unable to show us any examples of penalties, let alone fixed penalties, for strict liability offences on the scale here in question. That seems to me hardly surprising.
- I shall not attempt any elaborate analysis of the rival arguments as to the scheme’s compliance with Article 1. Once again, the Strasbourg case-law is extensive. Let me merely quote Lester and Pannick’s well-known publication Human Rights Law and Practice (1999) which states, under the heading Proportionality:
“Whichever of the three rules of Article 1 of the First Protocol applies, an interference with property must not only be in the public or general interest, but must also satisfy the requirement of proportionality, that is, that there is a reasonable relationship of proportionality between the means employed and the aims sought to be realised.” (Sporrong & Lonnroth -v- Sweden is cited)
- As to what proportionality involves, I turn to Lord Steyn’s speech in R (Daly) -v- Secretary of State for the Home Department  2 WLR 1622, 1634:
“The contours of the principle of proportionality are familiar. In DeFreitas -v- Permanent Secretary of Ministry of Agriculture, Fisheries, Lands & Housing  1 AC 69 the Privy Council adopted a three-stage test. Lord Clyde observed, at p80, that in determining whether a limitation (by an act, rule or decision) is arbitrary or excessive the Court should ask itself:
‘Whether: i) the legislative objective is sufficiently important to justify limiting a fundamental right; ii) the measures designed to meet the legislative objective are rationally connected to it; and iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective.’”
- It is further implicit in the concept of proportionality, however, that not merely must the impairment of the individual’s rights be no more than necessary for the attainment of the public policy objective sought, but also that it must not impose an excessive burden on the individual concerned. As the ECtHR stated in James -v- United Kingdom (1986) 8 EHRR 123, 144-145:
“Not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim ‘in the public interest’, but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. This latter requirement was expressed in other terms in the Sporrong & Lonnroth judgment by the notion of the ‘fair balance’ that must be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The requisite balance will not be found if the person concerned has had to bear ‘an individual and excessive burden’.”
That principle seems to me of the first importance here.
- If, therefore, contrary to my belief, the scale and inflexibility of the penalty, taken in conjunction with the other features of this scheme, are not such as to deprive the carriers of a fair trial under Article 6, then I would hold them instead to impose an excessive burden on the carriers such as to violate Article 1. Even acknowledging, as I do, the great importance of the social goal which the scheme seeks to promote, there are nevertheless limits to how far the state is entitled to go in imposing obligations of vigilance on drivers (and vicarious liability on employers and hirers) to achieve it and in penalising any breach. Obviously, were the penalty heavier still and the discouragement of carelessness correspondingly greater, the scheme would be yet more effective and the policy objective fulfilled to an even higher degree. There comes a point, however, when what is achieved is achieved only at the cost of basic fairness. The price in Convention terms becomes just too high. That in my judgment is the position here.
Conclusion on the Convention
- It is suggested that this is a case of high constitutional importance. Perhaps it is. Certainly it raises questions as to the degree of deference owed by the courts to the legislature and executive in the means used to achieve social goals. But judges nowadays have no alternative but to apply the Human Rights Act. Constitutional dangers exist no less in too little judicial activism as in too much. There are limits to the legitimacy of executive or legislative decision-making, just as there are to decision-making by the courts. Difficult and worrying though I have found this case to be, in the last analysis, affording all such deference as I believe I properly can to those responsible for immigration control and for devising and enacting the legislation necessary to achieve it, I have come to regard this scheme as, quite simply, unfair to carriers. Nothing in the Convention itself, nor in the extensive jurisprudence upon it, dictates, or ever could dictate, precisely when a measure such as this is unfair - when, that is, the limits of permissible individual sacrifice have been exceeded. All that the Convention really provides are the central principles and touchstones by which such a judgment can be made. Although, as I recognise, I have travelled through the Convention issues by a rather different route from the judge below, I have felt impelled to the same final conclusion that the scheme is not after all Convention compliant.
- The final important authority I must deal with is Hoverspeed on which the appellants sought to rely on both aspects of this case, ie in resisting the Convention challenge as well as the EC Treaty challenge - although I should make plain that human rights issues as such were not explored in that case.
- So far as the Convention challenge is concerned, the appellants contend that the carriers’ liability scheme found lawful in Hoverspeed is closely analogous to that in issue here. If, submits Mr Barling, it is legitimate to require carriers to check to ensure that correct documentation is produced prior to embarkation, it must be equally legitimate to introduce a penalty regime designed to prevent passengers from circumventing these provisions by travelling clandestinely. As to the level of penalty imposed (and, indeed, its inflexibility) the appellants point to Council Directive 2001/51/EC of 28 June 2001, supplementing the Schengen Agreement which stipulates that the maximum amount of the penalty must be not less than (the equivalent of) £3,100 for each person carried, or the minimum not less than £1,860 per person, or there may be a maximum penalty of £310,000 for each infringement, irrespective of the number of persons.
- Mr Barling points to what I myself said in Hoverspeed (at 614):
“If ever there was scope for a significant margin of appreciation in operating what for present purposes we are assuming to be a restriction, surely it is here.”
And he relies too upon my acceptance of his submission there that none of the provisions of the 1987 Act are “so manifestly unreasonable or disproportionate as intrinsically could constitute it a restrictive measure within [Article 49]” (p611). Dyson J (as he then was) reached the same conclusion:
“The Act is neither unreasonable nor a disproportionate response to the need for effective immigration control.” (p620)
- Persuasive though these arguments at first appear, I cannot regard them as determinative of the legality of the present scheme. It is a striking fact that whereas, consistently with Schengen and the Directive, all other Member States have introduced a carriers’ liability scheme to compel the checking of travel documents, none but the United Kingdom has introduced anything approximating to the scheme for hauliers’ liability for clandestine entrants here under consideration. It is noteworthy too that Article 6 of the Directive provides with regard to carriers’ liability generally:
“Member States shall ensure that their laws, regulations and administrative provisions stipulate that carriers against which proceedings are brought with a view to imposing penalties have effective rights of defence and appeal.”
Whatever view may be taken of the compliance of the 1987 legislation with that provision, it may be doubted whether it is satisfied by this scheme.
- With regard to the general fairness of the two regimes, there are other important contrasts, too, to be made between them: first, under the 1987 legislation there is no provision for detaining the relevant means of transportation before liability is established and if necessary until payment - no doubt those operating ship and aircraft services are thought well able to discharge any ultimate liability and are not, therefore, required to give security. But it is, of course, the very fact that those least able to provide security are the most liable to have their vehicles detained, which makes the new scheme so conspicuously unfair. Secondly, and it is of course a related point, many hauliers are likely to be altogether less well able to bear the penalty than substantial air and sea carriers. Thirdly, the nature of the obligations imposed by the respective schemes upon those affected is very different: whereas the 1987 Act requires only the checking of travel documents on embarkation (difficult though on occasions this may be), the 1999 Act requires owners, hirers and drivers variously to institute and perform extensive checks on vehicles and cargoes throughout the entire journey to the UK.
The EC Treaty challenge
- Hoverspeed is yet more central to the determination of the EU law challenge, and it is convenient to take as one’s starting point, as did Sullivan J below, the Court’s approach in that case. Substantially that approach was to recognise that even where a measure is not intended to restrict Article 49 rights, it may be “… so manifestly unreasonable or disproportionate as intrinsically would constitute it” - see my judgment at 611. As Dyson J put it:
“Even if the object of the measure is not to regulate trade, it may be held to be a restriction if it is an unreasonable and disproportionate means of achieving its intended object.” (620).
- We concluded, however, that the 1987 Act was not such a restriction:
“It is manifestly not a measure aimed at regulating trade between Member States. It does not in any event deny access to the UK market. The Act is neither an unreasonable nor a disproportionate response to the need for effective immigration control. The fact that almost all other Member States have some form of legislation similar to the Act, and that Article 26 of the Schengen Convention is in terms that require parties to it to adopt such legislation, amply supports the conclusion that such legislation is not inherently an unreasonable response to the need for immigration control.” (per Dyson J at 620)
- In reaching a different view with regard to the 1999 Act and holding that this scheme does constitute a restriction under Article 28 and 49, Sullivan J distinguished Hoverspeed on two essential grounds. First, he found on the evidence that the scheme has a restrictive effect in practice:
“Although the additional burden placed upon hauliers, to use security devices, to make checks, to keep records, is not very great … the penalties for failing to discharge that relatively modest burden, even as a result of an isolated act of carelessness, are very severe, and are backed by powers of detention. The evidence shows that some haulage firms have either ceased to carry goods to the United Kingdom, reduced their services to the United Kingdom, or altered their patterns of service by using different ports of embarkation or changing to different ferry lines. A substantial number of vehicles have been detained, delaying and disrupting the delivery of imports to the UK.”
- Secondly, he concluded that, however broad the margin of discretion allowed to the state in the field of immigration control,
“It is difficult to see how a penalty regime which fails to comply with Article 6 and/or Article 1 of the Convention could be described as reasonable or proportionate.”
- The appellants contend that neither of those grounds provides a sufficient basis for holding that this scheme comprises an unjust restriction upon Treaty rights. The scheme’s effect upon the commercial decisions of hauliers to reduce their services to the UK, or to use different ports, or ferry-lines or whatever are, Mr Barling submits, simply too indirect, remote and uncertain to constitute restrictions on the free movement of services within the meaning of Article 49, or measures of equivalent effect to quantitative restrictions on imports within the meaning of Article 28. They are essentially incidental effects of the scheme and not of such a scale or nature as to as transform it into a measure which, given that it is not aimed at the regulation of trade in goods or services and is not discriminatory with regard to such goods or services, is nevertheless so oppressive and onerous that is to be treated as a restriction needing to be justified. In this regard Mr Barling relies upon paragraph 78 of the judgment of ECJ in Germany -v- Council  ECR 1-4973:
“Both the right to property and the freedom to pursue a trade or business form part of the general principles of Community law. However, those principles are not absolute but must be viewed in relation to their social function. Consequently, the exercise of the right to property and the freedom to pursue a trade or profession may be restricted, particularly in the context of a common organisation of a market, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed.”
- On this part of the appeal, I have come to accept Mr Barling’s arguments. Having considered afresh the many authorities we examined in Hoverspeed in determining whether the 1987 Act constituted an Article 49 (then Article 59) restraint - most notably perhaps Alpine Investments BV -v- Minister van Financien  ECR 1-1141 and Peralta  ECR 1-3453 - I simply cannot recognise in the present scheme, inconsistent with the Convention though I regard it to be, a restriction under Community law such as to require justification under the public policy derogation. To characterise the scheme as unjust and unfair is not to say that it therefore “… impair[s] the very substance of the rights guaranteed”, as the court put it in Germany -v- Council. Not every breach of the Convention affecting cross-border trade and services involves an impermissible restriction on Treaty rights. I think the judge below read too much into our statements in Hoverspeed that the use of unreasonable and disproportionate means to achieve an object unrelated to regulating trade between Member states: “…could constitute a restrictive measure within Article  …” (as I put it), or “… may be held to be a restriction …” (as Dyson J put it). Sometimes, in cases which involve an “intolerable interference” with Treaty rights, that will be so. In my judgment, however, not in the present case where the effects upon guaranteed Treaty rights are decidedly tenuous, and where their substance is left unimpaired.
The Court’s interpretative obligation under Section 3 of the Act
- The appellants submit that if and insofar as the scheme would otherwise be found incompatible with Convention rights, we should construe the legislation so as to eliminate any injustice or unfairness. We heard a great deal of argument and were shown a large number of authorities as to the proper application of the section, prominent among them R -v- DPP ex parte Kebilene (above), R -v- A(No 2) (above), R -v- Lambert (above) and Poplar Housing and Regeneration Community Association -v- Donoghue  3 WLR 183. Suffice it to say that, the Balbo point aside, it appears to me quite impossible to recreate this scheme by any interpretative process as one compatible with Convention rights. As I have more than once endeavoured to explain, the troubling features of the scheme are all inter-linked: to achieve fairness would require a radically different approach. Mr Barling, of course, invokes section 3 only as his final fall-back position. But in asking us to apply it he is, in my judgment, necessarily inviting us to turn the scheme inside out, something we cannot do. As the authorities clearly dictate, the Court’s task is to distinguish between legislation and interpretation, and confine itself to the latter. We cannot create a wholly different scheme (perhaps of the sort envisaged by Sullivan J below) so as to provide an acceptable alternative means of immigration control. That must be for Parliament itself. As Lord Lester pointed out, were we ourselves to create a fresh scheme purportedly under section 3, then indeed we should be failing to show the judicial deference owed to Parliament as legislators.
- I have attempted in this judgment to strip down the case to its barest essentials. That has seemed to me important both from the point of view of manageability and so as not to lose sight of the central issues. I am, however, all too aware that in doing so I have left great tracts of submission and citation on the cutting-room floor. In particular I have made no mention of a number of sustained further criticisms of the scheme advanced by the respondents, criticisms based principally on the principles of legal certainty, the rule of law and equality of arms. It should not be thought that I regard these as entirely without merit. On the contrary, a number of the identified uncertainties as to the precise scope and operation of the scheme inevitably add to one’s overall sense of concern about the legality of this legislation. There is, for example, considerable difficulty in understanding just what a driver must prove to establish his section 34(3) defence: Sullivan J may well have been correct to conclude that it makes an employee personally liable for the omissions of his employer. Further criticisms of this sort, however, I would regard as essentially peripheral; the critical flaws in the scheme are, I believe, those earlier identified.
- It follows from all this that I for my part would uphold the judgment below with regard to the Convention challenge, but not in declaring the legislation inconsistent with Community law. To that limited but important extent only would I allow this appeal.
Lord Justice Laws:
- In Vriend  1 SCR 493, in the Supreme Court of Canada, Iacobucci J stated at 563:
“When the Charter [sc. the Canadian Charter of Rights and Freedoms] was introduced, Canada went, in the words of former Chief Justice Brian Dickson, from a system of parliamentary supremacy to constitutional supremacy… Simply put, each Canadian was given individual rights and freedoms which no government or legislature could take away.”
- Not very long ago, the British system was one of Parliamentary supremacy pure and simple. Then, the very assertion of constitutional rights as such would have been something of a misnomer, for there was in general no hierarchy of rights, no distinction between “constitutional” and other rights. Every Act of Parliament had the same standing in law as every other, and so far as rights were given by judge-made law, they could offer no competition to the status of statutes. The courts evolved rules of interpretation which favoured the protection of certain basic freedoms, but in essence Parliament legislated uninhibited by claims of fundamental rights.
- In its present state of evolution, the British system may be said to stand at an intermediate stage between parliamentary supremacy and constitutional supremacy, to use the language of the Canadian case. Parliament remains the sovereign legislature; there is no superior text to which it must defer (I leave aside the refinements flowing from our membership of the European Union); there is no statute which by law it cannot make. But at the same time, the common law has come to recognise and endorse the notion of constitutional, or fundamental rights. These are broadly the rights given expression in the European Convention on Human Rights and Fundamental Freedoms (“ECHR”), but their recognition in the common law is autonomous: see for example Derbyshire County Council v Times Newspapers Ltd.  AC 534, Leech  QB 198, Witham  QB 575, Pierson v Secretary of State  AC 539, Reynolds  3 WLR 1010, and with respect perhaps especially Simms  2 AC 115 per Lord Hoffmann at 131. The Human Rights Act 1998 (“HRA”) now provides a democratic underpinning to the common law’s acceptance of constitutional rights, and important new procedural measures for their protection. Its structure, as has more than once been observed, reveals an elegant balance between respect for Parliament’s legislative supremacy and the legal security of the Convention rights.
- This being our constitution’s present nature, there exists a tension between the maintenance of legislative sovereignty and the vindication of fundamental, constitutional rights. How are their respective claims to be reconciled? Where is the point of escape if the legislature tramples on the territory of rights? This tension is hardly to be found in a system of pure parliamentary supremacy, and is less acute in a system of constitutional supremacy. In the former, fundamental rights are not recognised as such. The majoritarian principle, expressed and made good by a sovereign Parliament, comes first. In the latter, the majoritarian principle gives way to fundamental rights. In practice, the constitutions and jurisprudence of sovereign States in the civilised world show that this distinction is by no means always clear-cut; and to the extent in any concrete instance that it is not clear-cut, the tension to which I refer will arise. Moreover, although it may create difficulties, and its resolution case by case requires firmness of purpose and good judgment, this tension is a welcome inhabitant of a democratic State. Here again is Iacobucci J in Vriend, at 566:
“To my mind, a great value of judicial review and this dialogue among the branches is that each of the branches is made somewhat accountable to the other. The work of the legislature is reviewed by the courts and the work of the court in its decisions can be reacted to by the legislature in the passing of new legislation (or even overarching laws under s.33 of the Charter). This dialogue between and accountability of each of the branches have the effect of enhancing the democratic process, not denying it.”
- In the British State, there are at least two means by which the courts seek to resolve this tension. The first, not directly relevant in the present case, arises where it is suggested that a statute has effected or authorised what would undoubtedly amount to a violation of a fundamental or constitutional right. Here the courts protect the right in question, while acknowledging the legislative supremacy of Parliament, by means of a rule of construction. The rule is that while the legislature possesses the power to override fundamental rights, general words will not suffice. It can only be done by express, or at any rate specific, provision: see for example Witham, Pierson, and Simms to which I have already referred.
- The second means by which constitutional rights are recognised consistently with the sovereignty of Parliament is engaged where a statute admittedly travels in the field of a constitutional right, and the issue is whether the right is violated, or if it is whether the extent of the statute’s intrusion is acceptable or justified. Such questions characteristically arise where the right is one guaranteed by the ECHR, and the court acts pursuant to its duty under the HRA. Where one of the political rights is under consideration (that is, any of those guaranteed by ECHR Articles 9 – 11), the issue most often falling for decision is whether there is shown sufficient justification, under paragraph 2 of the Article in question, for the right’s infringement. But the question may be, whether there has been a violation at all; and that question may of course arise in the context of Convention rights as regards which the ECHR provides no express exceptions or qualifications – no paragraph 2.
- In this second area the court’s task is quite unlike its duty in deciding whether on its true construction a statute allows or perpetrates an undoubted violation of a constitutional right. The rule of construction, that only express or at least specific words will suffice to effect such a result, is a brightline rule whose edge is sharp. In this present context, there is no brightline rule. It is because here, the court has to strike a balance between the claims of the democratic legislature and the claims of the constitutional right. Sometimes, of course, it will be plain and obvious which way the scales fall. In the field of ECHR Article 10, the justification of certain specified restrictions upon the right of free expression may be clear beyond argument in time of war or other national emergency. On the other hand, an attempt to curtail free speech merely to avoid embarrassment to the government would, no less obviously, lack any colour of justification. In the far more frequent case where the answer is by no means so plain, and a balance has to be struck between contradictory interests each possessing some substance of legitimacy, a critical factor in the court’s appreciation of the balance will be the degree or margin of deference it pays to the democratic decision-maker. This deference – and its limits – have to be fashioned in a principled but flexible manner, sensitive to the particular case and its context. In some contexts the deference is nearly absolute. In others it barely exists at all. The development of principle in this field is one of the most important challenges which the common law must meet, in face of the provisions of the HRA and our own domestic acceptance of the idea of constitutional rights. The reach of the deference which the judges will pay to the democratic decision-maker, the giving and withholding of it, is the second means by which the courts resolve the tension between Parliamentary sovereignty and fundamental rights in our intermediate constitution.
- And it is at the very core of the debate in this case. It is said by the respondents that the material provisions of the Immigration and Asylum Act 1999 (“the 1999 Act”), which are set out or summarised in the judgment of my Lord Simon Brown LJ, systematically violate the rights under ECHR Article 6 and Article 1 of the First Protocol enjoyed by drivers, owners, hirers or operators (those defined in s.32(5) and (6) as “responsible persons”) of vehicles found carrying illegal clandestine entrants (I will set out Article 6 at paragraph 88 below). We have to determine what is the quality of any deference owed by the courts to the legislature in deciding whether that is right. The appellant Secretary of State says that the degree of latitude – deference – which the court should pay to the will of Parliament is such that we should hold the scheme of civil penalties in the 1999 Act to lie within the legislature’s power to make law in the public interest unconstrained by the ECHR. It is therefore necessary to appreciate what are the true principles according to which a proper degree of deference to the legislature falls to be measured.
- As I have already indicated, the assessment of due deference to the democratic decision-maker is not to be made in a vacuum. In Daly  2 WLR 1622 Lord Steyn stated at 1636 that “[i]n law context is everything”. So here, the extent of any deference to be paid to the legislature depends in part on the nature and quality of the measure in question: more concretely, whether its content falls within the special responsibility of the executive, which sought and obtained the 1999 Act in Parliament, or the special responsibility of the judiciary. A paradigm of the executive’s special responsibility is the security of the State’s borders. A paradigm of the judiciary’s special responsibility is the doing of criminal justice. There are of course other paradigms of each of these responsibilities. And between the special territory of each there lies, not a no-man’s-land, but a spectrum. The degree of deference owed to the democratic decision-maker must depend upon where the impugned measure lies within this scheme of things. I shall return to these aspects when I come to discuss in fuller detail (paragraphs 80 ff) the principles applicable to the giving and withholding of deference to the democratic powers.
- I therefore find myself in respectful disagreement with my Lord’s view expressed at paragraph 33 of his judgment, that the classification of proceedings between criminal and civil is secondary to the question, what protections are necessary for a fair trial. On the contrary, in my judgment the issue whether this scheme is to be regarded as effectively imposing criminal liability, and so exacting criminal sanctions, is critical to the extent to which the court will defer to the legislative scheme and decline to confine or reduce it on human rights grounds. I shall have more to say about this in paragraphs 85 and 86. Now, it is accepted on all hands that the question whether the scheme is to be treated as criminal in nature does not depend on its classification in domestic law. It depends upon whether it should be so regarded autonomously, applying the three criteria laid out by the Strasbourg court in Engel & Ors v. Netherlands (1976) 1 EHRR 647, paragraphs 82 – 83, applied by the Court of Appeal in Han & Ors v. Commissioners of Customs and Excise  1 WLR 2253.
- This preamble reveals what I regard as the key questions in the case. There are three. (1) What are the principles upon which, in the field of fundamental rights, the courts should decide what deference to pay to the democratic powers of the State? (2) How is the scheme of the 1999 Act to be classified according to the criteria set out in Engel? (3) In light of the answers to (1) and (2), is the scheme repugnant to Convention rights?
(1) Deference to the democratic decision-maker
- I turn then to Question 1. A good deal of recent authority was cited on this subject of deference. I propose to start with what was said by Lord Hope of Craighead in Kebilene  2 AC 326. At 380E-G he refers to the well-known doctrine of the “margin of appreciation” as it has been developed in the European Court of Human Rights. He continues (380G-381D):
“This doctrine is an integral part of the supervisory jurisdiction which is exercised over state conduct by the international court. By conceding a margin of appreciation to each national system, the court has recognised that the Convention, as a living system, does not need to be applied uniformly by all states but may vary in its application according to local needs and conditions. This technique is not available to the national courts when they are considering Convention issues arising within their own countries. But in the hands of the national courts also the Convention should be seen as an expression of fundamental principles rather than as a set of mere rules. The questions which the courts will have to decide in the application of these principles will involve questions of balance between competing interests and issues of proportionality.
In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In some circumstances it will be appropriate for the courts to recognize that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention. This point is well made at p. 74, para. 3.21 of Human Rights Law and Practice (1999), of which Lord Lester of Herne Hill and Mr. Pannick are the general editors, where the area in which these choices may arise is conveniently and appropriately described as the ‘discretionary area of judgment’. It will be easier for such an area of judgment to be recognized where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified. It will be easier for it to be recognized where the issues involve questions of social or economic policy, much less so where the rights are of high constitutional importance or are of a kind where the courts are especially well placed to assess the need for protection.”
My Lord Simon Brown LJ has already cited the observation of Lord Bingham of Cornhill in Brown v Stott  2 WLR 817, 834-835:
“Judicial recognition and assertion of the human rights defined in the Convention is not a substitute for the processes of democratic government but a complement to them. While a national court does not accord the margin of appreciation recognised by the European Court as a supra-national court, it will give weight to the decisions of a representative legislature and a democratic government within the discretionary area of judgment accorded to those bodies…”
In the same case Lord Steyn said this at 842:
“Under the Convention system the primary duty is placed on domestic courts to secure and protect Convention rights. The function of the European Court of Human Rights is essential but supervisory. In that capacity it accords to domestic courts a margin of appreciation, which recognises that national institutions are in principle better placed than an international court to evaluate local needs and conditions. That principle is logically not applicable to domestic courts. On the other hand, national courts may accord to the decisions of national legislatures some deference where the context justifies it: see R v Director of Public Prosecutions, Ex p Kebilene  2 AC 326, 380-381 per Lord Hope of Craighead; see also: Singh, Hunt and Demetriou, "Is there a Role for the 'Margin of Appreciation' in National Law after the Human Rights Act?"  EHRLR 15. This point is well explained in Lester & Pannick, Human Rights Law and Practice (1999), p 74:
‘Just as there are circumstances in which an international court will recognise that national institutions are better placed to assess the needs of society, and to make difficult choices between competing considerations, so national courts will accept that there are some circumstances in which the legislature and the executive are better placed to perform those functions.’”
Lambert  3 WLR 206 was a case in which their Lordships’ House had to consider the imposition of a reverse burden of proof in a criminal statute, the Misuse of Drugs Act 1971. It was much cited to us in the context of the respondents’ complaints concerning the reverse burden in the 1999 Act relating to the “defences” (I use quotation marks only so as to beg no questions upon issues (2) and (3) which I have identified above) created by s.34. For present purposes, however, I draw attention to this passage in the judgment of Lord Woolf CJ in the Court of Appeal Criminal Division ( 2 WLR 211, 219 at paragraph 16):
“If the defendant is being required to prove an essential element of the offence this will be more difficult to justify. If, however, what the defendant is required to do is establish a special defence or exception this will be less objectionable. The extent of the inroad on the general principle is also important. Here it is important to have in mind that article 6(2) is specifically directed to the application of the presumption of innocence of the "criminal offence" charged. It is also important to have in mind that legislation is passed by a democratically elected Parliament and therefore the courts under the Convention are entitled to and should, as a matter of constitutional principle, pay a degree of deference to the view of Parliament as to what is in the interest of the public generally when upholding the rights of the individual under the Convention. The courts are required to balance the competing interests involved.”
In Poplar v Donoghue  3 WLR 183 the Court of Appeal had to consider whether in seeking an order for possession of a dwelling-house under section 21(4) of the Housing Act 1988 Act the claimant housing association was contravening the defendant’s right to respect for her private and family life and her home under ECHR Article 8(1). S.21(4) provided:
“Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling-house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied…” (and then certain procedural requirements are set out).
At paragraph 69 (p. 202) Lord Woolf CJ said this:
“However, in considering whether Poplar can rely on article 8(2), the court has to pay considerable attention to the fact that Parliament intended when enacting section 21(4) of the 1988 Act to give preference to the needs of those dependent on social housing as a whole over those in the position of the defendant. The economic and other implications of any policy in this area are extremely complex and far-reaching. This is an area where, in our judgment, the courts must treat the decisions of Parliament as to what is in the public interest with particular deference. The limited role given to the court under section 21(4) is a legislative policy decision. The correctness of this decision is more appropriate for Parliament than the courts and the Human Rights Act 1998 does not require the courts to disregard the decisions of Parliament in relation to situations of this sort when deciding whether there has been a breach of the Convention.”
Lastly I would with great respect wish to underline the observation of the European Court of Human Rights, cited by my Lord Simon Brown LJ at paragraph 27 of his judgment, in Sporrong (1982) 5 EHRR 35, 52:
“… the Court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The search for this balance is inherent in the whole of the Convention…”
- That is a sufficient citation of authority from which to draw together the principles now being developed by the courts for the ascertainment of the degree of deference which the judges will pay, or the scope of the discretionary area of judgment which they will cede, to the democratic powers of government in fulfilment of the courts’ duty to decide in any given case whether there has been a violation of a Convention right (or, in the case of any of the political rights, whether the interference with the right is justified under paragraph 2 of the relevant Article). First, however, there is a backdrop to what follows. We do not apply the Strasbourg margin of appreciation, because we are a domestic, not an international tribunal: see per Lord Hope in Kebilene and Lord Steyn in Brown v Stott cited above. Being a domestic tribunal, our judgment as to the deference owed to the democratic powers will reflect the culture and conditions of the British State. Such a judgment will itself enjoy (in any future debate at Strasbourg) a margin of appreciation, according to the Strasbourg court’s own case law. The importance of this is to emphasise the fact that our courts’ task is to develop an autonomous, and not merely an adjectival, human rights jurisprudence. In that context I wholly agree with my Lord Simon Brown LJ’s observation, in paragraph 27 of his judgment, that “the court’s role under the [HRA] is as the guardian of human rights. It cannot abdicate this responsibility.”
- In describing the tension created by the co-existence in our intermediate constitution of Parliamentary sovereignty and fundamental or constitutional rights, the antithesis to which I drew particular attention was that between the vindication of such rights and the claims of primary legislation, where the two were in actual or apparent conflict. This present appeal is such a case; for the whole debate is about the effects of the relevant provisions of the 1999 Act properly construed. But there is a commoner antithesis, arising where the seeming conflict is between the protection of a fundamental right and the force of a decision made by the executive (or, it may be, contained in subordinate legislation) rather than by the primary legislature. I have used expressions such as “the democratic powers” to embrace both the legislature and the executive, as being the arms of government whose power depends, the former directly and the latter indirectly, on election by the people.
- Against this background, the first principle which I think emerges from the authorities is that greater deference is to be paid to an Act of Parliament than to a decision of the executive or subordinate measure: see in particular the two citations of Lord Woolf set out above, from Lambert and Poplar. Where the decision-maker is not Parliament, but a minister or other public or governmental authority exercising power conferred by Parliament, a degree of deference will be due on democratic grounds – the decision-maker is Parliament’s delegate - within the principles accorded by the cases. But where the decision-maker is Parliament itself, speaking through main legislation, the tension of which I have spoken is at its most acute. In our intermediate constitution the legislature is not subordinate to a sovereign text, as are the legislatures in “constitutional” systems. Parliament remains the sovereign legislator. It, and not a written constitution, bears the ultimate mantle of democracy in the State.
- The second principle is that there is more scope for deference “where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified” (per Lord Hope in Kebilene, cited above). In the present case we are principally concerned with Article 6, which does not on its face require any balance to be struck: it contains no analogue of paragraph 2 in Articles 9 – 11, dealing with political rights. It is thus a context which militates against deference. But even here, there is no sharp edge. The right to a fair trial under ECHR Article 6(1) is certainly unqualified and cannot be abrogated. So also is the presumption of innocence (in a criminal case) arising under Article 6(2). But what is required for fairness, what is required to satisfy the presumption of innocence, may vary according to context. In relation to Article 6(2), see in particular Salabiaku 13 EHRR 379, in which the European Court of Human Rights held (paragraph 28) that presumptions of fact or law against the defence should be confined “within reasonable limits which take into account the importance of what is at stake and maintain the rights of the defence.” Hence I think it misleading to describe Article 6 rights as “absolute”, an adjective which tends to suggest that the nature of such rights is uniform, the same for every class of case (bar the distinction between civil and criminal). That is not right. The requirements of independence and impartiality are perhaps as close as one can get to uniform requirements. But even there, there may be scope for reasonable differences of view as to the conditions which have to be met. What is the degree of security of tenure that a judge must enjoy if he is to constitute a tribunal compliant with Article 6(1)? At all events, however, Article 6 is an area where the deference due to the democratic powers is limited, since the rights it guarantees are unqualified.
- The third principle is that greater deference will be due to the democratic powers where the subject-matter in hand is peculiarly within their constitutional responsibility, and less when it lies more particularly within the constitutional responsibility of the courts. The first duty of government is the defence of the realm. It is well settled that executive decisions dealing directly with matters of defence, while not immune from judicial review (that would be repugnant to the rule of law), cannot sensibly be scrutinised by the courts on grounds relating to their factual merits: see Chandler v DPP  AC 763 at 790 per Lord Reid and 798 per Lord Radcliffe, and the recent case of Marchiori  EWCA Civ 03 at paragraphs 33 – 38 of the judgment given by myself. The first duty of the courts is the maintenance of the rule of law. That is exemplified in many ways, not least by the extremely restrictive construction always placed on no-certiorari clauses.
- Now this is not a case, of course, in which the courts are intruding in defence policy, or the democratic powers in the rule of law. There are no tanks on the wrong lawns. But as I have said (paragraph 77) the constitutional responsibility of the democratic powers particularly includes the security of the State’s borders, thus including immigration control, and that of the courts particularly includes the doing of criminal justice. If the scheme of the 1999 Act is essentially to be treated as an administrative scheme for the betterment of immigration control in a context – clandestine entrants in vehicles – acknowledged to be especially acute, the courts will accord a much greater deference to Parliament in deciding whether there is any violation of Convention rights than if it is to be regarded as a criminal statute. In the latter case, the courts are of course obliged to apply Article 6(2) and (3) as well as (1). They would do so rigorously, with much less deference to the legislature, not only in fulfilment of their duty under the HRA but also because their own constitutional responsibility makes the task a necessarily congenial one. This is why Question (2) of the three I have set out is so important.
- The fourth and last principle is very closely allied to the third, and indeed may be regarded as little more than an emanation of it; but I think it makes for clarity if it is separately articulated. It is that greater or lesser deference will be due according to whether the subject-matter lies more readily within the actual or potential expertise of the democratic powers or the courts. Thus, quite aside from defence, government decisions in the area of macro-economic policy will be relatively remote from judicial control: see for example Ex p. Nottinghamshire CC  AC 240 and Ex p. Hammersmith and Fulham LBC  1 AC 521. Though these were not, of course, human rights cases, like problems as to the deference due to the democratic decision-maker arise in relation to the proper intensity of judicial review in other contexts, such as were there in play. In the present case, I have no doubt that the social consequences which flow from the entry into the United Kingdom of clandestine illegal immigrants in significant numbers are far-reaching and in some respects complex. While the evidence before us gives more than a flavour of the problems, the assessment of these matters (and therefore of the pressing nature of the need for effective controls) is in my judgment obviously far more within the competence of government than the courts.
(2) The Proper Classification of the 1999 Act Scheme
- I turn next to Question 2: how is the scheme of the 1999 Act to be classified – civil or criminal - according to the criteria set out in the decision of the European Court of Human Rights in Engels? I should at this stage acknowledge, as does my Lord Simon Brown LJ, the clear and comprehensive treatment of all the material background facts set out in the judgment of Sullivan J below. I also adopt with gratitude my Lord’s own summary at paragraphs 10 – 11 of his judgment. By way of further preliminary, it will make for clarity if I here set out the text of Article 6:
“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.”
- I hope I may be forgiven for not citing the text of Engels itself. The criteria there established are summarised by Potter LJ in Han  1 WLR 2253, 2260 at paragraph 26:
“It is not in dispute between the parties that the Strasbourg case law makes clear that the concept of a ‘criminal charge’ under article 6 has an ‘autonomous’ Convention meaning: see Engel v The Netherlands (No 1) (1976) 1 EHRR 647, 678, para 81. There are effectively three criteria applied by the Strasbourg court in order to determine whether a criminal charge has been imposed: see Engel's case and, more recently, AP, MP and TP v Switzerland (1997) 26 EHRR 541, 558, para 39. They are: the classification of the proceedings in domestic law; the nature of the offence; and the nature and degree of severity of the penalty that the person concerned risked incurring. The Strasbourg court does not in practice treat these three requirements as analytically distinct or as a ‘three-stage test’, but as factors together to be weighed in seeking to decide whether, taken cumulatively, the relevant measure should be treated as ‘criminal’. When coming to such decision in the course of the court's ‘autonomous’ approach, factors (b) and (c) carry substantially greater weight than factor (a).”
- It is plain that the scheme of the 1999 Act is not classified as “criminal” as a matter of domestic law – factor (a). But this is of course by no means determinative. It is described in the Strasbourg jurisprudence as “no more than a starting point”: Engels, paragraph 82. The State cannot escape the disciplines of Article 6 applicable to criminal cases merely by adopting a non-criminal definition of the relevant subject-matter: Ozturk v Turkey (1984) 6 EHRR 409. That would undermine the Convention’s force.
- I turn then to the second criterion, “the nature of the offence”. On its own, that expression tells one nothing, save that the use of the term “offence” tends to beg the question in favour of a conclusion that the case is within criminal territory. However it is clear that “the nature of the offence” is to be taken as a shorthand, and also that the second and third criteria are best understood if they are read together. (I have not forgotten the observation made in Lauko (2001) 33 EHRR 40, paragraph 57, that these two criteria are alternative and not cumulative. However, examined as alternatives, they may of course both pull in the same direction.) The Strasbourg court’s judgment in Ozturk, at paragraph 53 cited at paragraph 58 in Han at pp. 704-705, suggests that these following three elements are powerful pointers in the classification of the measure under scrutiny as criminal or civil. (a) Is the conduct against which the measure is directed regarded generally as reprehensible, and thus to be condemned as unlawful? (b) Is the measure directed against conduct of a kind which any member of society might commit, or is it by definition limited to a defined and specific group? (c) Are the sanctions for which the measure provides imposed not only to deter like conduct in the future, but also to punish: that is, to exact retribution for evildoing?
- Of these three elements, (a) and (c) require some further exposition. As for (a), “reprehensible” is the word used by the Strasbourg court. With respect I think that our domestic application of this test should invoke the use of stronger language. I would say that the paradigm of a criminal law is one whose purpose is to condemn conduct perceived by the community at large as inherently wrongful. Crimes of violence or dishonesty are core instances, and fill much of the criminal calendar. They are crimes which potentially may be committed by anyone, so that (b), the second factor, marches with (a). And both march with (c). That is because the significance of this third factor rests in its emphasis on retributive justice. Retribution and deterrence are separated out in the jurisprudence, which plainly intends some distinction between them, though the language used more often has the adjective “punitive” alongside “deterrent”; but “punitive” here means “retributive”, otherwise the contrast makes no sense. See for example Ozturk at paragraph 53, Benendoun (1994) 18 EHRR 54 at paragraph 47, and AP v Switzerland (1997) 26 EHRR 541 at paragraphs 41 – 42. The conception of a retributive sanction, in a rational system, sits with the conception of inherent wrongdoing – conduct judged immoral by society.
- Plainly, however, the State sometimes chooses to apply the rigour of the criminal law to conduct not necessarily perceived as inherently wrongful or immoral. It does so when it creates relatively trivial regulatory offences, sometimes of strict liability. In such cases the courts – including the Strasbourg court – are likely to take a relatively relaxed view of provisions which impose a reverse onus of proof, or which exact fixed penalties. Conversely, there are legal regimes which, though not criminal (by the law of the State or by the autonomous Strasbourg standard), nevertheless penalise perceived wickedness. The principal instance of this is to be found in professional disciplinary codes of conduct. It is no exaggeration to say that such codes, or at least some of their content, may be likened to a private or internal criminal law. It is a grave thing for a man to be condemned for misconduct at the bar of his professional peers; graver, often, than a criminal conviction. In these cases, something not far distant from the full rigour of Article 6(2) and (3) will be applied. A powerful example of this process at work in a discipline case is to be found in the decision of the European Court of Human Rights in Albert & Le Compte v Belgium (1983) 5 EHRR 533. One may compare the decision of this court in Official Receiver v Stern  1 WLR 2230, which was concerned with directors’ disqualification proceedings.
- But these two classes of case, regulatory criminal offences and non-criminal professional disciplinary codes, are in their different ways atypical as instances of the usual incidents of the civil/criminal classification for the purposes of Article 6; and of course in this appeal we are neither dealing with a mere regulatory offence nor with a code of professional discipline. We must start, as my Lord Simon Brown LJ states (paragraph 34), by ascertaining the true nature of the scheme. In particular, we have to consider the vice the scheme is aimed at, or, in the language of the second Engels criterion, what is the essence of the putative “offence”. In doing so, we shall ascertain how far or close it lies to the paradigms of criminal offences.
- Upon that issue I think it is entirely obvious that the Crown’s concern in seeking this legislation from Parliament, and Parliament’s concern in passing it, was to prevent clandestine illegal migrants from entering this country, pure and simple. The purpose of the legislation is to achieve this end so far as possible. Whether such a migrant is let in by the negligence or connivance of a lorry-driver or owner is neither here nor there in terms of the vice the scheme is aimed at. The problems his entry creates are not bigger or smaller according to who let him in, or how, or whether he could have been stopped. The fact that honesty and due care on the part of those who own or drive the transporters will not stop the most determined entrants is neither here nor there to the purpose of the scheme. The deterrence of dishonesty and carelessness is not at the heart of it at all. Statements in Parliament about such matters, inevitably possessing the rancour and asperity of political utterance in a vigorous democracy, do not shift the reality of the Act’s purpose.
- The nature of the scheme as I have described it stands, in my judgment, in stark contrast to the archetypal criminal case, where what is sought to be prohibited is the doing of an act which is made inherently wrongful by its being done with a guilty mind. Take the crimes of theft and robbery. Society has no general interest in prohibiting the taking of one man’s property into the hands of another, for that may be done by a gift, by a contract, by a will. But when it is done dishonestly - theft, or by violence - robbery, society intervenes with all the force of the criminal law. The vice is the dishonesty, the violence. Take next the calendar of sexual crimes. Leaving aside the rights and interests of children it is not society’s business to interfere by the bludgeon of the criminal law with consensual sexual relations. But when one person’s sexual attentions are forced on another, who is to the perpetrator’s knowledge unwilling to receive them, the criminal law is at once and rightly engaged, from the case of a minor indecent assault to the offence of rape. Even the taking of life is not condemned simpliciter by the criminal law. Murder requires an intention to kill or do grievous bodily harm. Manslaughter requires proof of fault, of which various different kinds may qualify.
- All these offences are archetypes of crime – the very idea of crime - in our law. They attract the condemnation of society because they are inherently wrongful. They are therefore rightly dealt with by the imposition of retributive punishment. But ideas of that kind simply have nothing to do with the reasons for putting in place the scheme of the 1999 Act. The statute is not interested in obloquy, shame or guilt. It is not interested in retributive justice. The scheme is put in place, and put in place only, as a means towards the fulfilment of the executive’s particular responsibility to secure the State’s borders by effective immigration control. All this seems to me to be wholly consonant with, and supported by, the learning in such cases as Lee Kwong-kut  AC 951, 938, and Lambert  3 WLR 206, 219, cited by my Lord Simon Brown LJ at paragraphs 35 and 36. And it marches in particular with what was said by Lord Woolf CJ in Goldsmith  1 WLR 1673 in relation to condemnation and forfeiture proceedings under s.139 of the Customs and Excise Management Act 1979 (also cited by my Lord, at paragraph 40):
“… none of the usual consequences of a criminal conviction follow from condemnation and forfeiture proceedings. There is no conviction or finding of guilt. Under domestic law the person concerned is not treated as having a conviction. The person concerned is not subject to any other penalty, apart from the consequences of the forfeiture and loss of the goods.”
- In this context, the nature of the penalty – fixed, cumulative, and non-discretionary - which very understandably is much excoriated by the respondents, seems to me actually to lend some limited support to the appellant’s submission that the scheme is not within the criminal sphere. Of course I accept that the government cannot simply stipulate for an arbitrary penalty and then rely on the penalty as showing that the measure in question is not a criminal one. That would be Kafka, or perhaps Lewis Carroll. The much more limited point to be made is that the nature of the penalty marches with the nature of the vice aimed at by the scheme. Just as the vice aimed at has nothing to do with fault, so the penalty provided has nothing to do with retribution. Much of the sustained assault levelled against the scheme by the respondents proceeds from the premise that it is fault-based, and then castigates it because the penalty is exacted regardless of fault. For reasons I have given, I do not consider it is fault-based. I shall deal with the s.34 defences – as, on my view, they are properly so called – in addressing Question 3.
- I conclude, for the reasons I have given, that on the application of the second and third criteria in Engels, this scheme is civil and not criminal in nature; and in this I am in respectful disagreement with the judge below and my Lord Simon Brown LJ. I cannot think that the terms of the Regulatory Impact Assessment, to which my Lord refers at paragraph 35, can make the least difference to the principle of the thing. I am conscious that in reaching this conclusion I have not deployed any of the reasoning I have elaborated under Question 1, relating to the deference to be paid to the democratic powers in the context of fundamental rights. That is because this issue – civil or criminal – is to be treated as an autonomous question; otherwise criterion (a) would decide every case. But the issue of deference is not wholly irrelevant. If Parliament has chosen to establish a scheme distinctly not categorised as criminal, its choice to that effect is entitled to a degree of respect given the first, third and fourth principles which I have ventured to articulate under Question 1. This is not inconsistent with the proposition that criterion (a) is only a starting-point. But issues of deference are much more closely involved in Question 3, to which I now turn.
(3) Is the scheme repugnant to Convention Rights?
- Given that on my view the scheme is not a criminal measure, Article 6(2) and (3) have no direct application. But the reverse burden created by s.34, the fixed and cumulative penalty which is so conspicuous an element of the scheme, and the power to detain transporters, are nevertheless prayed in aid as particular features which demonstrate that a “responsible person” within s.32 (or alleged responsible person) cannot get a fair trial of “the determination of his civil rights and obligations” within Article 6(1). The Secretary of State does not, I think, suggest that the civil rights and obligations of a person charged with the penalty are not engaged. Article 6 requires at least that there be an independent and impartial tribunal available to try such issues (so far as they might arise in any individual case) as these: (1) whether anyone was found on the vehicle, and if he was whether he was an illegal entrant; (2) whether the person charged with the civil penalty was a responsible person within s.32; (3) if a transporter is detained under s.36, whether it should be released under s.37(3), and (4) whether the s.34 defences are made out. I acknowledge that in the real world it is highly unlikely that there will be any dispute on issue (1) and almost as unlikely that there will be any dispute on issue (2).
- I may deal with this “at least” requirement very shortly indeed. All these issues are subject to adjudication by the county court, assuming only that Balbo  1 WLR 1556 in the Divisional Court was rightly decided. My Lord Simon Brown LJ has dealt with this at paragraph 12 of his judgment. In my view Balbo was plainly rightly decided. If the matter were in doubt HRA s.3(1) would in my judgment require the court to read the statute, in particular s.35(8), as allowing adjudication by the county court on any and all of these issues. There can be no question but that the county court is an independent and impartial tribunal for the purposes of Article 6(1), and the contrary is not suggested.
- Once it is accepted (a) that the scheme is not autonomously to be classified as criminal and (b) that Balbo was correctly decided, the respondents’ remaining complaints under Article 6 must be to the effect that the scheme’s substantive measures are so weighted against the individual affected, and the sanctions (not only the fixed cumulative penalty: also the power to detain the transporter) are so draconian and arbitrary, that the scheme is rendered inherently unfair; and this unfairness itself constitutes a violation of Article 6(1). And since the county court only has jurisdiction to decide issues arising within the scheme, its place in the picture cannot cure this unfairness, or alleviate the violation which it perpetrates.
- This argument involves the proposition that Article 6(1) itself imports a particular quality into the meaning of the expression “civil rights and obligations”: that is, it requires that national measures should condition and distribute such rights and obligations fairly and reasonably. On this footing Article 6(1) goes much further than a mere insistence upon fair trial of claims and counterclaims as they arise under municipal law. Rather, it imposes a standard or standards which the substantive law must keep. Lord Lester QC for the Roth respondents submitted in terms that the imposition of an excessive fixed penalty breaches the principle of legality, depriving affected persons of their right of access to an independent and impartial court under Article 6(1), because any court dealing with such a regime would have no power to look into the proportionality of the sanction. If the argument’s context were that of a fault-based criminal offence, this submission would possess much force. But if, as I would hold, the vice aimed at by the scheme has nothing to do with fault, then I think it is an altogether different and more far-reaching proposition. In such a context it entails the conclusion that the court must have the jurisdiction (as a condition of Article 6 compliance) to assess fault, or blameworthiness, even though the legislation is not criminal, nor concerned with retribution, and has been advisedly and for good reason so framed by Parliament.
- I accept that there is some authority in Strasbourg which may properly be taken to suggest that Article 6 qualifies the sense to be given to “civil rights and obligations”, and does not treat such rights and obligations as given aliunde, merely imposing requirements as to their fair adjudication whatever their actual content may be. Thus it was said in Salabiaku (1988) 13 EHRR 379, paragraph 28, that the object and purpose of Article 6 is “to enshrine the fundamental principle of the rule of law”. I accept also, as Lord Lester submitted, that the principle of legal certainty is a function of the rule of law. As regards legal certainty, Lord Lester’s skeleton argument refers also to Silver v UK (1983) 5 EHRR 347 and Hashman (2000) 30 EHRR 241.
- But I do not consider there is any want of certainty in what is done here. The provisions could not be plainer. The fixed penalty at least has the virtue of certainty. Lord Lester also submits that there is a want of equality of arms, another condition of the rule of law. He referred to the handicaps suffered by foreign nationals and companies, the pressure to pay security to obtain the vehicle’s release, the reverse burden under s.34, and some other matters. I do not think there is anything in this. If, as in my view is the case, Balbo is correctly decided, an Article 6 compliant court – the county court – has jurisdiction to try all substantive matters arising under the scheme. Some of the pressures to which Lord Lester refers (relating particularly to detention and security) reflect aspects of the scheme which bear severely on the responsible person. But they do not amount to a departure from the rule of law.
- In the end, the real case being made is that in the name of the rule of law Article 6 effectively forbids a legislative scheme so unfair, or draconian, as this. It is difficult to find authority to the effect that the substance of “civil rights and obligations” within Article 6 is subject to qualifications in the name of fairness. There is certainly learning to the effect that systems of strict liability in the criminal sphere are subject to the proportionality discipline: see for example the Advocate General’s opinion (discussing the Strasbourg position) in Hansen  ECR I-2911, 2926-2928. It may be that, criminal law aside, where the substantive law is so harsh as to overstep well understood boundaries of reason and fairness, the Convention may condemn it through other provisions such as Article 1 of Protocol I. However I am prepared to proceed on the footing that it is a premise of Article 6 that the civil rights and obligations provided for in any municipal legal system must fulfil basic standards of fairness and reason. Where a court is required to administer a system which is irretrievably barbarous (to take an extreme case), it makes no sense to speak of due process, nor therefore of the rule of law.
- There is no doubt that the scheme possesses harsh features. My Lord Simon Brown LJ has emphasised them. Equally, there is no doubt but that the aim pursued by the legislation, as I have described it, is not only legitimate but one of very pressing importance. If this scheme has to be softened, it seems to me self-evident that the effectiveness of any replacement will be very much weaker. The fact that putative responsible persons bear the burden of establishing the s.34 defences does not merely reflect the difficulties that a prosecutor might face in establishing connivance or negligence, though these are real enough. Critically it concentrates the minds of those embarking on cross-Channel haulier business. Knowing the legislation, they are bound to make greater efforts to secure their vehicles than if, later, fault had to be proved against them.
- As regards the defences themselves arising under s.34, I have two things to say. First, I think they represent an acknowledgement by the legislature that in a situation where it is agreed on all hands that absolute prevention of the cross-Channel traffic in clandestines is impossible, a balance ought to be struck in the legislation so that a responsible person who can show that he has complied with the code and, in effect, done his best to avoid the carriage of illegal entrants in his vehicle should be excused the penalty. The numbers of those so excused (by the administration: without going to court) demonstrate that this is real, and not window-dressing. Secondly, and this is in a sense a function of the first point, if the case were that this traffic could be prevented altogether if hauliers and others involved took sufficient care, there might well be a case for allowing no exceptions by way of defence: since then every instance of an immigrant’s successful arrival here would also be an instance of want of care by the haulier. Thus, again, the s.34 defences acknowledge the impossibility of absolute prevention.
- Against all this background, it seems to me that the principles which I have ventured to state relating to deference to the democratic powers are in this case particularly important. There is, surely, more than one possible or reasonable view as to the balance to be struck between the efficacy of the policy aim here, and the interests and the fair treatment of potential responsible persons. Given that, and given also that on my view (a) these are not criminal provisions and (b) Balbo was rightly decided, the principles of deference (and its withholding) point to a conclusion in this case whereby the democratic powers’ judgment upon the striking of the balance ought to be accepted. The first, third and fourth principles which I have described tend to yield that result. There is not sufficient substance in the bite of the second principle in the circumstances of the case to produce a contrary result. I should emphasise that if I thought there were no proper judicial controls, and/or that the scheme was criminal in nature, I would have taken a different view.
- This approach effectively disposes also, as it seems to me, of the arguments based on Article 1 of Protocol I. I accept the submission of Mr Barling for the Secretary of State that what is at issue here is the control of the use of property, as regards which it is clear that the signatory States enjoy a wide margin of discretion. Given the approach of the Strasbourg court in Air Canada (1995) 20 EHRR 150, and in light of the overall nature of the scheme, there is in my judgment no transgression of the margin.
- For all these reasons, I conclude that the scheme of the 1999 Act is not repugnant to Convention rights.
- I have not so far dealt with the argument based on Articles 28 and 49 of the EC Treaty. There is a dispute of fact between the parties as to the extent to which the scheme has inhibited the movement of goods and services across borders. I do not think we can arrive at any specific conclusions about that. But I agree with the submission of Mr Barling in reply that such effects on cross-border movement as might be demonstrated cannot in reality be so great as to constitute a “restriction” within the meaning of the Treaty, given that the measure in question is not aimed at the regulation of trade in goods or services and offers no discrimination against imported goods or services: see per Dyson J as he then was in Hoverspeed  EuLR 595, 620A. This case is really about the ECHR.
- I should next refer to the fact that there was some argument, here and below, in the context of the degree of deference owed to the legislature, to the effect that insufficient consideration had been given by ministers in Parliament to the possibility of adopting other means of dealing with the problem. In the court below Sullivan J stated:
“170. … the facts of the present cases lead me to the conclusion that undue deference is not warranted in this instance, for the following reasons.
171. First, although the gravity of the problem of clandestine entry is not in doubt, there is no explanation as to why this particular penalty regime, incorporating a reverse burden of proof, was adopted. It was not foreshadowed in the White Paper… By the time of the Regulatory Impact Assessment only three options had been identified: to leave the legislation as it stood, to enlist the co-operation of the haulage industry and aim for a voluntary agreement, and a penalty scheme.
173. There was no evaluation of the possibility of creating a new criminal offence, based not on knowledge, but on failing to secure and check vehicles with “due care and attention”, or on failure to use “best practicable means” to secure and check…”
- In my judgment, with respect to the learned judge, this approach was misconceived. Pace Lord Lester’s stalwart arguments to the contrary, it involves the court in an exercise of evaluation: the evaluation of the quality of ministerial consideration of the policy options available in the context of the evolution of a particular legislative measure. Such an evaluation entails the possibility of a finding that the minister’s adumbration of the issues was inadequate: or, at least, that its quality should affect the deference to be paid by the courts to the legislation which at length emerges. In my view such a process would contravene Article 9 of the Bill of Rights 1689.
- I am conscious that I have not delved into the facts of individual cases, about which certain submissions were made to us. But these are not the true subject of this appeal. It has been about the extent to which the ECHR, now part of the law of England, cuts across and inhibits the scheme of the 1999 Act in principle.
- For all the reasons I have given I am of opinion that it does not. I would allow the appeal.
Lord Justice Jonathan Parker:
- In Part A of this judgment I shall consider the nature and effect of the penalty scheme contained in Part II of the Immigration and Asylum Act 1999 (“the 1999 Act”), when construed without reference to the interpretation obligation imposed on the courts by section 3 of the Human Rights Act 1998. In Part B I shall address the issue whether the scheme, when construed pursuant to section 3, is compatible with Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”), and/or with Article 1 of the First Protocol to the Convention (“Article 1”). In Part C I shall address the issues which arise under Community law. In Part D I shall state the result which I would reach on this appeal.
A. The Penalty Scheme
- I shall consider the nature and effect of the scheme, when construed without reference to section 3 of the Human Rights Act 1998, under three headings: Liability, Process, and Detention. Unless otherwise indicated, references to sections are to sections in the 1999 Act.
- The starting point in considering liability under the scheme is the definition of “clandestine entrant” in section 32(1). So far as material for present purposes, a clandestine entrant includes a person who arrives in the UK concealed in a vehicle (subparagraph (a) of subsection (1)); or who passes or attempts to pass through UK immigration control concealed in a vehicle (subparagraph (b) of subsection (1)); or who arrives in the UK on a ship having embarked concealed in a vehicle at a time when the ship was outside the UK (subparagraph (c) of subsection (1)). Thus the relevant points of time for the purpose of the definition of “clandestine entrant” are, in relation to the first category of clandestine entrant, when the vehicle arrives in the UK; in the case of the second category, when the vehicle passes, or attempts to pass, through UK immigration; and in the case of the third category, when the vehicle embarks on the ship which brings it to the UK.
- Subsections (5) and (6) of section 32 lay down who is (or are) responsible for a “clandestine entrant”: that is to say, in relation to vehicles, responsible for the presence, at the relevant point of time, of a person concealed in the vehicle. In each case, the responsible persons are “the owner, hirer or driver”. Section 32(2) provides that those persons are “together” liable to the fixed penalty of £2000 plus an additional penalty of £2000 for each additional clandestine entrant who was also concealed in the vehicle at the same point of time. Section 32(3) provides that a penalty must be paid within a prescribed period. Regulations currently prescribe a period of 60 days. Thus far, the effect of section 32 is to impose absolute liability for the penalty on a “responsible person” in every case where a clandestine entrant is found to be concealed in a vehicle, at a relevant point of time. However, section 32(5) provides that, “subject to section 34”, it is immaterial whether a responsible person knew or suspected that the clandestine entrant was concealed in the transporter or (if it be the case) that there were one or more other clandestine entrants concealed in the same transporter. Section 34 enables a responsible person to establish a defence to liability. Section 34(2) provides that it is a defence for a person alleged to be liable to a penalty (defined for this purpose as “the carrier”) to show that either he, or an employee of his who was directly responsible for allowing the clandestine entrant to be concealed, was acting under duress (“the duress defence”). Section 34(3), on which much of the argument on this appeal focused, provides as follows:
“It is also a defence for the carrier to show that -
(a) he did not know, and had no reasonable grounds for suspecting, that a clandestine entrant was, or might be, concealed in the transporter;
(b) an effective system for preventing the carriage of clandestine entrants was in operation in relation to the transporter; and
(c) that on the occasion in question the person or persons responsible for operating that system did so properly”.
I will refer to this defence hereafter as “the subsection (3) defence”.
- Accordingly, section 32(2) has to be read subject to the availability of defences under section 34. Nonetheless, it remains the case that the basis for liability in relation to vehicles is purely and simply the presence of a clandestine entrant on the vehicle at the relevant point of time.
- Where there is more than one “responsible person” in relation to the same clandestine entrant, the position as between them is governed by section 32(4) and section 34(5) and (6). Section 32(4) provides that payment of the full amount of a penalty (i.e. including any additional penalty) by one or more of the responsible persons discharges the other or others. Section 34(5) provides that the fact that one of a number of responsible persons has a subsection (3) defence does not affect the liability of the other or others. In practice, this can only apply in relation to the requirement of showing absence of actual or constructive knowledge (see section 34(3)(a)), since if one of a number of responsible persons establishes the existence of an “effective system”, properly operated on “the occasion in question” (see section 34(3)(b) and (c)), those facts will also avail the other responsible person or persons. Section 34(6) provides that where one of a number of responsible persons has a duress defence, the remainder are discharged from liability.
- The Act prescribes a process for the “determination” of liability under section 32(2), and for the recovery of the prescribed penalty from a person who is liable to pay it. The first stage in the process is for the Secretary of State to decide that a person is liable under section 32(2) (see section 35(1)). The second stage is for the Secretary of State, having reached such a decision, to notify the person concerned by issuing a “penalty notice” (see ibid.). A penalty notice must state the reasons for the Secretary of State’s decision that the person concerned is liable, the amount of the penalty to which he is liable, and the date by which (and the manner in which) the penalty “must be paid” (see section 35(2)(a) and (b)). It must also include an explanation of the steps which the person concerned “must take” if he objects to the penalty, and of the steps which the Secretary of State “may take” to recover the penalty (see section 35(2)(d)). Where more than one “responsible person” is involved, the Secretary of State need only serve a penalty notice on one of them (see section 35(4) and (5)). Section 35(6) provides that if a person on whom a penalty notice is served (or, where more than one responsible person is involved, a person who is to be treated as having been served with a penalty notice pursuant to section 35(5)) “alleges that he is not liable for one or more, or all, of the penalties specified in the penalty notice, he may give written notice of his allegation to the Secretary of State”. This is the third stage in the process. The notice, which is called a “notice of objection”, must give reasons for the allegation of non-liability, and must be given within a prescribed period (see section 35(7)). Regulations currently prescribe a period of 30 days. If a notice of objection is given within the prescribed period, the Secretary of State must consider it “and determine whether or not any penalty to which it relates is payable” (see section 35(8)). That is the fourth stage in the process.
- As the final stage in the process, section 35(10) provides as follows:
“Any sum payable to the Secretary of State as a penalty under section 32 may be recovered by the Secretary of State as a debt due to him.”
- Read in context (and, I emphasise, without at this stage taking account of section 3 of the Human Rights Act 1998) section 35(10) plainly refers, and refers only, to the process of recovering a penalty, the liability for which has earlier been “determined” by the Secretary of State after consideration of any valid notice of objection. Absent section 3 of the Human Rights Act 1998, section 35(10) does not, in my judgment, mean that in the proceedings in which the penalty is sought to be recovered the issue of liability for the penalty remains open. I would for my part regard this as clear beyond any real doubt. As already pointed out, a person who seeks to dispute liability “must” serve a notice of objection (and, what is more, serve it within the prescribed period). It must follow, in my judgment, that if he fails to serve a notice of objection in time, he cannot dispute liability, and that the Secretary of State’s original “decision” that he is liable will stand. On the other hand, if he does serve a notice of objection timeously, the Secretary of State is under a statutory duty to consider it and to “determine” the issue of liability.
- Section 36(1) provides (so far as material) that if a penalty notice has been issued (that is to say, if the Secretary of State has “decided” that a person is liable to a penalty), the relevant authorities may detain “any relevant vehicle” - i.e. the vehicle in which the clandestine entrant or entrants were concealed - “until all penalties to which the notice relate, and any expenses reasonably incurred by the Secretary of State in connection with the detention, have been paid”. Section 36(2) provides that this power of detention “may be exercised only if, in the opinion of the senior officer concerned, there is a significant risk that the penalty (or one or more of the penalties) will not be paid before the end of the prescribed period if the [vehicle] is not detained”; and “may not be exercised if alternative security which the Secretary of State considers is satisfactory, has been given”. Section 36(4) provides as follows:
“The detention of a [vehicle] under this section is lawful even though it is subsequently established that the penalty notice on which the detention was based was ill-founded in respect of all or any of the penalties to which it relates”.
- Section 36(5) provides that subsection (4) does not apply if the Secretary of State acted unreasonably in issuing the penalty notice.
- The reference in section 36(4) to a penalty notice being “ill-founded” must, in context, refer to a subsequent determination by the Secretary of State under section 35(8), having considered a notice of objection, that all or any of the penalties were not payable.
- Section 37 deals with the effect of detention. Section 37(2) provides that the person against whom the penalty notice was issued or any other person claiming an interest in the vehicle may apply to the court for it to be released. Section 37(3) empowers the court to release it if one or more of three requirements are met, that is to say (a) that satisfactory security has been tendered; (b) that “there is no significant risk that the penalty .... and any connected expenses will not be paid”; or (c) “that there is a significant doubt as to whether the penalty is payable and the applicant has a compelling need to have the [vehicle] released” (emphasis supplied). This last provision is wholly consistent with section 35, and in particular with the Secretary of State having the exclusive function of determining liability for the penalty (see above).
- Lastly, for present purposes, section 37(4) gives the Secretary of State power to sell the vehicle if the penalty and connected expenses are not paid within 84 days from the commencement of the detention.
An overall view of the scheme (when construed without reference to section 3 of the Human Rights Act 1998)
- To my mind it is clear from the terms of the scheme itself, when so construed, that one of Parliament’s aims in structuring the scheme was to minimise the role of the courts in relation to it. Thus, the determination of liability to a penalty is a matter for the Secretary of State, the role of the courts being limited to the provision of the mechanism for recovery (see section 35(10)) and to the exercise of a limited power to order the release of a vehicle which has been detained - a power which does not extend to determining liability but merely to determining whether there is a “significant doubt as to whether the penalty is payable” (see section 37(3)).
- I cannot emphasise too strongly that Parliament’s aim (as I perceive it) of minimising the role of the courts in relation to the scheme is, in my judgment, an entirely legitimate aim - many would no doubt consider it a justifiable aim in the present context - provided always that the means which Parliament employs to achieve that aim do not breach the Convention. The duty of resolving the issue whether the scheme breaches the Convention is one which Parliament itself, in enacting the Human Rights Act 1998, has placed on the courts. I address that issue in Part B of this judgment.
B. The Convention
- Article 6 is in the following terms (so far as material):
“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. ....
2) Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3.) Everyone charged with a criminal offence has the following minimum rights:
a. to be informed promptly, in a language he understands and in detail, of the nature and cause of the accusation against him;
b. to have adequate time and facilities for the preparation of his defence;
c. to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
d. to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
e. to have the free assistance of an interpreter if he cannot understand or speak the language used in court.”
- It might be thought that the concept of fairness in the context of Article 6 is an absolute standard, in the sense that anything less than a fair hearing must be an unfair hearing. The true position, however, is not as simple (or, for that matter, as simplistic) as that. As Lord Steyn said in R v. A (No 2)  2 WLR 1546 at 1560 para 38:
“It is well established that the guarantee of a fair trial under Article 6 is absolute: a conviction obtained in breach of it cannot stand. .... The only balancing permitted is in respect of what the concept of a fair trial entails: here account may be taken of the familiar triangulation of interests of the accused, the victim and society.”
- Earlier in the same speech (at para 36) Lord Steyn said this:
“... when the question arises whether in the criminal statute in question Parliament adopted a legislative scheme which makes an excessive inroad into the right to a fair trial the court is qualified to make its own judgment and must do so.” (Emphasis supplied)
- These dicta of Lord Steyn reflect the oft-quoted dictum of the European Court of Human Rights in Sporrong (1982) 5 EHRR 35, 52 that:
“.... the court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights”.
- Lord Steyn’s dicta also reflect an additional, and highly important, factor which is in play whenever the court has to determine whether a “fair balance” has been struck, and that is what my Lords have described as “deference”: that is to say, the extent to which the courts should defer to the democratically accountable legislature in relation to matters falling within what Lord Bingham described as its “discretionary area of judgment” (see Brown v. Stott  2 WLR 817, 835).
- In R v. Director of Public Prosecutions, ex parte Kebilene  AC 326, at pp.380E-381D, in a passage headed ‘Discretionary area of judgment’, Lord Hope of Craighead said this:
“This brings me to another matter on which there was a consensus between counsel and which, I believe, needs now to be judicially recognised. The doctrine of “margin of appreciation” is a familiar part of the jurisprudence of the European Court of Human Rights. The European Court has acknowledged that, by reason their direct and continuous contact with the vital forces of their countries, the national authorities are in principle better placed to evaluate local needs and conditions than an international court ...
This doctrine is an integral part of the supervisory jurisdiction which is exercised over state conduct by the international court. By conceding a margin of appreciation to each national system, the court has recognised that the Convention, as a living system, does not need to be applied uniformly by all states but may vary in its application according to local needs and conditions. This technique is not available to the national courts when they are considering Convention issues arising within their own countries. But in the hands of the national courts also the Convention should be seen as an expression of fundamental principles rather than as a set of mere rules. The question which the courts will have to decide in the application of these principles will involve questions of balance between competing interests and issues of proportionality.
In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In some circumstances it will be appropriate for the courts to recognise that this is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention. .... It will be easier for such an area of judgment to be recognised where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified. It will be easier for it to be recognised where the issues involve questions of social or economic policy, much less so where the rights are of high constitutional importance or are of a kind where the courts are especially well placed to assess the need for protection.”
- Applying those principles to the instant case, it can be seen that the instant case raises “issues involving questions of social and economic policy” (issues as to immigration policy) and issues “of a kind where the courts are especially well placed to assess the need for protection” (issues as to fair trial). So how far does the discretionary area of judgment extend in such a case? Given the “familiar triangulation” to which Lord Steyn referred in R v. A (above), and given that the importance of the social issues raised in the instant case is recognised and acknowledged on all sides, Parliament’s discretionary area of judgment in the instant case should, in my judgment, be regarded as being as wide as possible. By that I mean that the courts should not intervene in the operation of the scheme save in circumstances where the bedrock of the Article 6 right to a fair trial begins to be eroded. At that point, intervention by the courts becomes unavoidable, if the courts are properly to discharge the duty which Parliament has placed upon them by enacting the Human Rights Act 1998.
- I turn next to the obligation placed on the courts by section 3 of the Human Rights Act 1998. That section provides:
“(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.
(2) This section -
(a) applies to primary legislation and subordinate legislation whenever enacted;
(b) does not affect the validity, continuing operation or enforcement of any incompatible primary legislation; and
(c) does not affect the validity, continuing operation or enforcement of any incompatible subordinate legislation if (disregarding any possibility of revocation) primary legislation prevents removal of the incompatibility.”
- In R v. A Lord Steyn said (at p.1563):
“In accordance with the will of Parliament as reflected in section 3 it will sometimes be necessary to adopt an interpretation which linguistically may appear strained. The techniques to be used will not only involve the reading down of express language in a statute but also the implication of provisions. A declaration of incompatibility is a measure of last resort. It must be avoided unless it is plainly impossible to do so. If a clear limitation on Convention rights is stated in terms, such an impossibility will arise...”
- As Lord Steyn expressly recognises, there are, inevitably, limits on the extent to which a potential incompatibility can be avoided by the application of a process of construing the relevant statutory provisions. As Lord Woolf CJ said in Poplar Housing and Regeneration Community Association Ltd v. Donoghue  3 WLR 183, at para 75:
“.... section 3 does not entitle the court to legislate (its task is still one of interpretation) but interpretation in accordance with the direction contained in section 3.”
- And at para 76 of the same judgment, Lord Woolf CJ said:
“The most difficult task which courts face is distinguishing between legislation and interpretation. Here practical experience of seeking to apply section 3 will provide the best guide. However, if it is necessary to obtain compliance to radically alter the effect of the legislation this will be an indication that more than interpretation is involved.”
- In one sense the interpretative obligation in section 3 is the corollary of ‘deference’, in that the point at which interpretation shades into legislation will inevitably be affected by the degree of ‘deference’ which the courts should accord to the legislative body in recognising its discretionary area of judgment. As Lord Lester of Herne Hill QC (for the Roth respondents) pointed out, there is to this extent a degree of tension between the scope of the interpretative obligation placed on the courts by section 3 on the one hand, and the extent of the legislature’s discretionary area of judgment on the other.
- Returning to the terms of Article 6 itself, there are two general points to be noted at the outset. The first is that the Article is directed essentially at procedural fairness (“a fair … hearing”). The second is that whereas paragraph (1) is directed to both civil and criminal proceedings, paragraphs (2) and (3) are expressed to apply only to criminal proceedings (“Everyone charged with a criminal offence ...”). This has given rise to the civil/criminal distinction, on which so much of the argument (both before the judge and in this court) has been focused.
- Before addressing those arguments, however, it is worth considering the nature of the distinction which appears on the face of Article 6. Mr Gerald Barling QC (for the Secretary of State) contends that the distinction is an absolute one, in the sense that if on a true analysis the scheme is to be treated as part of the civil law then paragraphs (2) and (3) of Article 6 fall away completely, and the court is not in any way concerned with them. On the other hand, Mr Richard Gordon QC (for the Barsan respondents) contends that there is in substance no distinction, in that paragraphs (2) and (3) must be taken to apply mutatis mutandis to civil proceedings. For this proposition he relies on Albert & Le Compte v. Belgium (1983) 5 EHRR 533 (a case involving disciplinary proceedings against two medical practitioners). In the European Court of Human Rights the applicants contended that they were faced with a “criminal charge” within the meaning of Article 6(1). The Belgian government submitted that Article 6(1), if it applied at all, could not have effect at one and the same time in relation to both civil and criminal proceedings. The court rejected this submission, saying this (in para 30):
“For its part, the Court does not believe that the two aspects, civil and criminal, of Article 6(1) are necessarily mutually exclusive. Nonetheless, the Court does not consider it necessary to decide whether, in the specific circumstances, there was a “criminal charge”. In point of fact, paragraph (1) of Article 6, violation of which was alleged by the two applicants, applies in civil matters as well as in the criminal sphere. Dr Albert relied in addition on paragraph (2) and on subparagraphs (a), (b), and (d) of paragraph (3), but, in the opinion of the court, the principles enshrined therein are, for present purposes, already contained in the notion of a fair trial as embodied in paragraph (1); the Court will therefore take these principles into account in the context of paragraph (1) ...”
- At para 39 of its judgment, the Court said this:
“For its part, the Court considered it unnecessary to give a ruling on the applicability of paragraph 1 of Article 6 under the criminal head, but decided to examine in the context of the interpretation of the notion of ‘fair trial’ in paragraph (1) the substance of the complaints made by the applicant under paragraphs (2) and (3). .... In the opinion of the Court, the principles of paragraph (3) invoked by Dr Albert (that is to say, only subparagraphs (a), (b) and (d)) are applicable, mutatis mutandis, to disciplinary proceedings subject to paragraph (1) in the same way as in the case of a person charged with a criminal offence.”
- These passages, as I read them, emphasise the importance of giving Article 6 a flexible interpretation, and of not using the process of construction to place concepts of essential fairness in a verbal straitjacket. In my judgment, for the purposes of Article 6 there is no such clear-cut dividing line as Mr Barling submits, but neither can the distinction between civil and criminal proceedings so clearly made in the language of the Article be ignored for all purposes. As I see it, there must be something in the nature of a sliding scale, at the bottom of which are civil wrongs of a relatively trivial nature, and at the top of which are serious crimes meriting substantial punishment. Broadly speaking, the more serious the allegation or charge, the more astute should the courts be to ensure that the trial process is a fair one. This is consistent with the court’s approach to the standard of proof in civil proceedings: the more serious the allegation, the more cogent the evidence which will be needed to prove it to the requisite standard. In the case of disciplinary proceedings, as in Albert & Le Compte, one can readily see why the distinction between civil and criminal proceedings was not considered to be helpful.
- With that preamble I turn to the central question whether, when construed in accordance with section 3 of the Human Rights Act 1998, the scheme is compatible with Article 6.
- I turn first to the decision of the Divisional Court in R v. Secretary of State for the Home Department, ex parte Balbo B & C Auto Transporti Internazionali  1WLR 1556. In that case transporters who had been served with a penalty notice under the scheme applied for judicial review of the Secretary of State’s determination under section 35(8) that the penalty was payable. The Secretary of State contended, as a preliminary issue, that there was a more suitable alternative remedy available to the applicants in the form of their right to defend proceedings brought against them by the Secretary of State. The Divisional Court (Brooke LJ and Potts J) accepted the Secretary of State’s contention, holding that in any proceedings brought against them by the Secretary of State it would be open to the applicants to assert a subsection (3) defence, and that it was also open to them to commence proceedings themselves for a declaration that they were not liable to a penalty.
- In para 9 of its judgment the Divisional Court, referring to section 34, said this:
“The normal meaning of such a provision, coupled with the liability-creating provisions of section 32, is that section 32 creates an absolute legal liability in the sense that no mens rea has to be proved. This legal liability will, however, be negated if the responsible person in question can prove on the balance of probabilities one of the matters set out in section 34(2) or (3).”
(In fact, to succeed in a subsection (3) defence the person concerned has to prove all three of the matters there set out.)
- In paragraph 13 of its judgment the Divisional Court commented that:
“... if the Secretary of State were to be the sole arbiter of the question whether a person served with a penalty notice had a viable defence under section 34 he would be acting as judge in his own cause”;
“such an interpretation of the provisions would immediately fall foul of the ‘fair trial’ requirement of article 6(1) ...”
- The court went on to conclude that the 1999 Act should not be interpreted in that way, saying (in para 14):
“If the owners consider they have a valid defence to the penalty notice, notwithstanding the Secretary of State’s rejection of their objection, they should wait until the Secretary of State sues them ... and the owners will be able, if so advised, to assert in those proceedings any of the defences available to them under section 34.”
- In para 16 of its judgment, the Divisional Court said this:
“[Counsel for the applicants] suggested that if an owner tendered satisfactory security to obtain the release of a transporter detained under section 36 of the  Act .... he would have to wait, perhaps indefinitely, for the Secretary of State to initiate proceedings in order to obtain the release of his security. We do not understand why this necessarily follows, because it would always be open to the owner in such circumstances to seek a declaration that he was not a person liable to a penalty under section 32 and an order restoring to him, or cancelling, the security he tendered.”
- In the instant case, Sullivan J concluded (just) that the scheme could be so construed, so as to avoid what would otherwise be an obvious incompatibility. In paragraphs 183 and 184 of his judgment he said this:
“Although the Divisional Court’s approach to section 34(1) strains the language of the Act, I do not accept the claimants’ submission that such an interpretation is impossible, or that it “turns the statutory language inside out”.... I do not consider that it stretches the language of the  Act to breaking point to hold that such defences could be raised, in addition to the section 34 defences, when the Secretary of State attempts to recover the debt in court. Once it is accepted that, albeit on a strained interpretation, the notice of objection procedure merely offers the “option” of an administrative review of the decision to serve a penalty notice, and does not operate as a preclusive provision, it would be possible for a person to dispute the underlying basis of liability in proceedings for a declaration in any event.”
- I have to disagree with the judge on this point. I think it does stretch the language of the 1999 Act well beyond breaking point to interpret the relevant provisions in that way. To impose such an interpretation on what I would regard as the plain natural meaning of the provisions in question would, in my judgment, be “to radically alter the effect of the legislation” (to use Lord Woolf CJ’s expression in the Poplar Housing case, quoted earlier). The exclusive role of the Secretary of State in determining liability (see Part A of this judgment), and the correspondingly subordinate role of the courts, seem to me to be central and essential features of the scheme. To reverse those roles would involve much more than linguistic changes to the statutory provisions: to my mind, it would produce a fundamental change in the nature and character of the scheme, such that the rewritten scheme would not be recognisable as the scheme which Parliament intended. Thus the adoption of such an interpretation would, in my judgment, involve rewriting the legislation in a way and to an extent which would trespass on the wide discretionary area of judgment to which, for reasons given earlier, Parliament is entitled in the instant case. If such a fundamental alteration to the scheme is to be made, it is for Parliament, not for the courts, to make it.
- Accordingly, for the simple yet fundamental reason that the scheme makes the Secretary of State judge in his own cause, the scheme is in my judgment plainly incompatible with Article 6. This conclusion is not affected by whether the scheme is to be regarded as civil or criminal in nature.
- Lest I be wrong in reaching that conclusion, however, I must go on to consider the other respects in which the scheme is alleged to be incompatible with Article 6, and whether, if and to the extent that there is a potential incompatibility with the Convention, such potential incompatibility can be remedied by the application of a process of interpretation pursuant to section 3 of the Human Rights Act 1998.
- In this context, three particular features of the scheme fall to be considered: the reverse burden of proof in relation to the subsection (3) defence; the nature of the penalty; and the detention provisions.
- As a preliminary to a detailed consideration of these aspects of the scheme, I must first address the question whether, for the purposes of Article 6, the scheme is to be regarded as criminal or civil in nature. This question is to be answered by reference to the substance, rather than the form, of the scheme, in the sense that an assessment has to be made as to its true nature (see Ozturk v. Germany (1984) 6 EHRR 409).
- The decision of the European Court of Human Rights in Engel v. Netherlands (1976) 1 EHRR 647 and the decision of this court in Han and Yau & Ors v. HM Customs & Excise  4 All ER 687 establish that the three criteria by which to judge whether the scheme is a civil or a criminal process are:
i) the classification of the scheme under UK law;
ii) the essential nature of the “offence”; and
iii) the nature and degree of severity of the penalty.
- The first criterion is in effect no more than a starting point, in the sense that if the scheme is classified as criminal under UK law, then it must be regarded as criminal for the purposes of Article 6, and there is no need to go on to consider the remaining two criteria. As to the second and third criteria, the European Court of Human Rights tends to treat them as alternatives, but a cumulative approach may nevertheless be adopted (see Han para 65).
- I consider first, therefore, how the scheme is classified under UK law. Although there is no express classification of the scheme as either civil or criminal, it seems to me to follow from its reference to “liability” being “determined”, and to the penalty being recoverable “as a debt” that in so far as it is classified at all it is classified as civil. It follows that the second and third criteria come into play.
- I turn, then, to consider “the essential nature of the offence”. The Regulatory Impact Statement identifies the “offence” as “allowing (either by some degree of co-operation or by failing to make thorough checks) the transportation of clandestines into the UK”. That statement cannot come as very much of a surprise to anyone who has considered the terms of the scheme itself. In particular, the terms of the subsection (3) defence make clear that the scheme is aimed not merely at the negligent but also at the dishonest. Indeed, it would be surprising if it were otherwise. But the fact that it applies to the dishonest is, in my view, a significant factor in considering the nature of the “offence”. Also significant in this context is section 25(1) of the Immigration Act 1971 (“the 1971 Act”) , which makes it a criminal offence for anyone to be “knowingly concerned” in facilitating illegal entry into the UK. The Secretary of State’s evidence before the judge was that this provision was “not nearly sufficient to deal with the problem”, one reason for that being the difficulty of proving knowledge on the part of the driver or owner of the vehicle in which a clandestine entrant is found to be hiding. In this context, the reverse burden imposed by section 34(3) can be seen as providing a much-needed alternative to a criminal charge under section 25(1) of the 1971 Act.
- The Secretary of State does not accept that the scheme is to be regarded as providing an alternative to a criminal charge under the section. He contends, through Mr Barling, that the aim of the scheme is to promote the exercise of reasonable care by hauliers to prevent clandestine entrants from gaining access to their vehicles and to detect those who have done so. No doubt that is one of the aims of the scheme, but in focusing only on the negligent the Secretary of State leaves out of account the fact that the scheme is also aimed at the dishonest.
- It is also relevant in this connection that the scheme is not limited in its application to goods vehicles; it is general in its application, applying also to domestic vehicles. In this respect the scheme is to be contrasted with disciplinary regimes applying only to defined groups in controlled environments (e.g. members of the armed forces or members of a profession subject to a code of conduct).
- To my mind, the application of the second criterion leads to the conclusion that the essential nature of the scheme is criminal, rather than a civil.
- This conclusion is confirmed, in my judgment, when one considers the third criterion: the nature and degree of severity of the penalty.
- It is common ground that the fact the only penalty is a financial one, and that a defendant is not at risk of imprisonment, does not prevent the scheme being essentially criminal in nature (see Han at para 60 and AP v. Switzerland (1997) 26 EHRR 541).
- The penalty itself is plainly punitive in nature, and intended to deter culpable conduct. In no sense is it compensatory. In so far as it applies to hauliers, it is to be viewed against a background of a number of statutes and regulations governing various areas of the haulage industry’s activities in which the proscribed conduct is classified as criminal and where the fixed penalty is less than the penalty under the scheme. Indeed, the penalty under the scheme is extremely high. The evidence is that the average penalty taking all the cases involving the Luttich respondents is £12,000. The only limit on the penalty is the practical limit on the number of clandestine entrants who can conceal themselves in a single vehicle. The scheme itself imposes no limit on the amount of the penalty save that it is fixed at £2,000 per clandestine entrant.
- In my judgment, a consideration of the nature and severity of the penalty leads ineluctably to the conclusion that the scheme is essentially criminal in nature.
- The Secretary of State submits that this issue is covered by the decision of the European Court of Human Rights in Air Canada v. United Kingdom (1995) 20 EHRR 150. In my judgment, however, the judge was right to distinguish that case for the reasons he gave (see para 158 of his judgment). Of particular significance in this respect, in my judgment, is the fact that whereas the penalty in Air Canada was discretionary, the penalty in the instant case is fixed.
- I proceed, therefore, on the footing that for the purposes of Article 6 the scheme is to be regarded as criminal in nature. On that footing, I return to the three features of the scheme to which I referred earlier, namely the reverse burden of proof, the nature of the penalty, and the detention provisions.
- The reverse burden of proof is of particular relevance in relation to the presumption of innocence which is guaranteed by Article 6(2), in that it impacts directly upon an accused’s right of silence, which is in turn closely linked to the presumption of innocence. The respondents’ contention, which succeeded before the judge, is that this reverse burden renders an accused’s right of silence illusory, since if he says nothing he will inevitably fail to make out a subsection (3) defence. The Secretary of State contends that the reverse burden is justified as being proportionate and within the limits of reasonableness.
- In Kebilene Lord Hope identified three categories of statutory presumptions which transfer what he termed the “persuasive burden” (as opposed to merely the “evidential burden”) on an accused (see ibid. at p. 379D-G). The relevant category for present purposes is that which is comprised of “provisions which relate to an exemption or proviso which the accused must establish if he wishes to avoid conviction but is not an essential element of the offence” (my emphasis).
- In A-G of Hong Kong v. Lee Kwong-kut  AC 951 Lord Woolf said (at p.968):
“... it is the substance rather than the letter of the language of the statute which is important when considering whether there is an exemption or proviso.”
- In my judgment it is plain that the three elements of the subsection (3) defence are the essential elements of the offence itself: indeed they effectively define the offence (cf. the description of the offence in the Regulatory Impact Assessment, quoted earlier). I find it impossible, in context, to treat them as (in effect) exemptions or provisos.
- Looking at the matter more broadly, it seems to me that two questions arise: first, whether the reverse burden has an adverse impact on the right to silence, and if so, whether the degree of interference with that right is proportionate to the legitimate aim of the scheme in the sense that the means used go no further than is necessary to achieve that aim. As Lord Steyn said in R v. Lambert  3 WLR 206 (a drugs case) at paras 37 and 38:
“The burden is on the state to show that the legislative means adopted were not greater than necessary. Where there is objective justification for some inroad on the presumption of innocence the legislature has a choice. The first is to impose a legal burden of proof on the accused. If such a burden is created the matter in question must be taken as proved against the accused unless he satisfies a jury on the balance of probabilities to the contrary ... The second is to impose an evidential burden only on the accused. If this technique is adopted the matter must be taken as proved against the accused unless there is sufficient evidence to raise an issue on the matter but, if there is sufficient evidence, then the prosecution have the burden of satisfying the jury as to the matter beyond reasonable doubt in the ordinary way... It is important to bear in mind that it is not enough for the defence merely to allege the fact in question; the court decides whether there is a real issue on the matter.... A transfer of a legal burden amounts to a far more drastic interference with the presumption of innocence than the creation of an evidential burden on the accused. The former requires the accused to establish his innocence. It necessarily involves the risk that, if the jury are faithful to the judge’s direction, they may convict where the accused has not discharged the legal burden resting on him but left them unsure on the point. This risk is not present if only an evidential burden is created. The principle of proportionality requires the House to consider whether there was a pressing necessity to impose a legal rather than evidential burden on the accused.”
- In the instant case, once the presence of one or more clandestine entrants in a vehicle has been discovered, the entire burden of disproving liability for penalty is thrown onto the carrier. The Secretary of State has nothing to prove beyond the presence of the alleged number of clandestine entrants in the vehicle at the relevant point of time.
- Nor, in my judgment, can the reverse burden be effectively written out of the scheme by a remedial interpretation pursuant to section 3 of the Human Rights Act 1998. As with the role of the Secretary of State, to rewrite the scheme without the reverse burden would, in my judgment, be to trespass beyond the boundary of interpretation into the realm of legislation.
- The underlying question, as in every case where a Convention right is engaged, is whether the interference with the right is proportionate. In R v. Secretary of State for the Home Department, ex parte Daly  2 WLR 1622, Lord Steyn said (at para 27):
“The contours of the principle of proportionality are familiar. In de Freitas v. Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing  1 AC 69 the Privy Council adopted a three-stage test. Lord Clyde observed, at p.80, that in determining whether a limitation (by an act, rule or decision) is arbitrary or excessive, the court should ask itself:
‘whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective.’”
- In my judgment the reverse burden imposed by section 34(3) constitutes a disproportionate and unjustifiable inroad into the carrier’s right of silence and hence into the presumption of innocence which is expressly safeguarded by Article 6(2).
- I turn next to the penalty. I have already referred to its nature and its severity, in the context of the question whether the essential nature of the scheme is civil or criminal. In considering the penalty in the context of Article 6, it seems to me that the degree of severity of the penalty must be a matter which falls within Parliament’s ‘discretionary area of judgment’: in other words, it is matter for Parliament and not for the courts. The courts are, however, concerned to ensure that the nature of the penalty is not such as to breach Article 6. In this context, the fact that the penalty is not merely severe but fixed seems to me to be of the highest importance. The fact that it is fixed means, by definition, that in imposing the penalty where liability has been determined no account can be taken of the facts of particular cases, or of the circumstances of a particular defendant. Nor is there any scope for mitigation. In particular, and most importantly (as it seems to me), there is no scope for recognising co-operation by a defendant in reporting the presence of clandestine entrants on his vehicle. In a number of the cases involved in this appeal drivers who, having entered the UK, discovered the presence of clandestine entrants in their vehicles, and who reported this fact to the police, found themselves facing substantial penalties. That seems to me not only absurd but wholly unfair. Moreover, the unfairness derives from the scheme itself, not from the way it is administered.
- Nor, in my judgment, is it possible to wash this element of unfairness out of the scheme by a remedial interpretation pursuant to section 3 of the Human Rights Act 1998. As with the role of the Secretary of State and the reverse burden of proof, the substitution of a maximum penalty for a fixed penalty, thereby allowing a proper degree of flexibility to the sentencer, would be too radical an alteration to the scheme to be regarded as interpretation: in my judgment it would involve rewriting the scheme to an unacceptable extent, given the high degree of ‘deference’ which ought to be accorded to Parliament.
- Lastly, so far as Article 6 is concerned, I turn to the detention provisions. I have already referred, in Part A of this judgment, to the limited power of the courts under section 37(3). In the present context it is also to be noted that even where, under subparagraph (c), the court finds that “there is a significant doubt as to whether the penalty is payable”, it must couple that finding with a further finding that “the applicant has a compelling need for the tranporter to be released”. In seeking to establish such a “compelling need”, a foreign “responsible person” - and in the nature of things foreign vehicles are more likely to be detained, on the basis that their foreign ownership presents a greater risk of a penalty not being paid - will be faced with having to commence proceedings in an unfamiliar court, incurring the expense of retaining lawyers to represent them, in a complicated area of the law. Nor is it clear to me that legal aid would necessarily be available. The Secretary of State, on the other hand, is not required to commence proceedings. Subject to the limited power of the court to order the release of the vehicle, the Secretary of State may detain it indefinitely pending payment of the penalty.
- Even if the expression “compelling need” is read down, pursuant to section 3 of the Human Rights Act 1998, the requirement that the requisite need be established still represents a significant hurdle for the owner to overcome.
- Moreover, as the judge correctly pointed out, the detention regime lacks an effective and speedy system for determining whether a vehicle should continue to be detained. This omission could be crucial in cases where the detention of a vehicle deprives an owner/driver of his means of livelihood (and possibly also his temporary living accommodation). The Secretary of State contends that it would be open to the owner or driver to apply for a declaration that the penalty notice on which the detention is based should not have been issued. However, as pointed out earlier, there is no provision for that in the scheme, and it must be highly doubtful whether the court would be persuaded to make such a declaration, at least until the prescribed period of 60 days under section 32(3) has expired; and by that time, serious losses may have been sustained by the owner/driver.
- In my judgment the detention regime is disproportionate in the de Freitas sense (see above) and constitutes a further element of unfairness for the purposes of Article 6. Nor, for the reasons I have already given in relation to the role of the Secretary of State, the reverse burden of proof and the fixed nature of the penalty, is it possible, in my judgment, to remedy this unfairness by a process of interpretation pursuant to section 3 of the Human Rights Act 1998.
- For the reasons I have given, I conclude that the scheme is unfair, and that the extent of the unfairness is such as to constitute a breach of Article 6.
- Article 1 is in the following terms:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use or property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
- As in the case of Article 6, I have no doubt that the highest degree of ‘deference’ must be accorded to Parliament in the devising of methods of tackling what is acknowledged on all sides to be an extremely serious social problem.
- As the European Court of Human Right said in James v. United Kingdom (1986) 8 EHRR 123, at 144:
“Not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim ‘in the public interest’, but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised.”
- There is no dispute as to the ‘legitimate aim’. The question is whether the detention regime is disproportionate in the de Freitas sense (see above). I have already concluded that it is, and that no remedial interpretation is available to save it. Accordingly, in my judgment the scheme falls foul of Article 1.
C. Community Law: Articles 28 and 49 of the EC Treaty
- Article 28 of the EC Treaty prevents quantitative restrictions on imports and all measures having equivalent effect; Article 49 of the EC Treaty prohibits restrictions on freedom to provide services.
- I turn first to Article 49.
- In R v. Secretary of State for the Home Department, ex parte Hoverspeed  EuLR 595, the issue was whether section 1 of the Immigration (Carriers’ Liability) Act 1987 was contrary to Article 59 (now 49) of the EC Treaty. The section provides that where a person requiring leave to enter the UK arrives in the United Kingdom by ship or by aircraft and fails to produce a valid passport or other identity documentation, the owners or agents of the ship or aircraft are liable to a penalty of £2,000, unless the owners or agents can show that on embarkation the passenger produced what purported to be the specified document, in which case it is for the Secretary of State to prove that the falsity of the document was reasonably apparent. The applicants contended that the section constituted a restriction on their freedom to provide services. The Divisional Court (Simon Brown LJ and Dyson J) rejected that contention, concluding that there was no discrimination and that the demands made on carriers under the 1987 Act could not properly be characterised as a burdensome measure constituting a restriction on their right to provide services.
- Simon Brown LJ, although “strongly inclined” to hold that section 1 was, in itself, not a restriction for the purposes of the Article, went on to consider whether (assuming it to be a restriction) it was justified on public policy grounds. He concluded (at p.615C) that it was “plainly justifiable on public policy grounds”.
- Dyson J observed (at p.620A) that:
“Even if the object of the measure is not to regulate trade, it may be held to be a restriction if it is an unreasonable and disproportionate means of achieving its intended object.”
- Dyson J concluded (at p.620C-D):
“Applying this approach, I am of the opinion that [the 1987 Act] is not a restriction. It is manifestly not a measure aimed at regulating trade between member states. It does not in any event deny access to the UK market. The Act is neither an unreasonable nor a disproportionate response to the need for effective immigration control.”
- In the instant case Sullivan J distinguished Hoverspeed, on the basis that in the instant case the evidence establishes that the scheme has had a restrictive effect on the haulage trade. He also relied, as a further distinguishing feature, on the fact the scheme is disproportionate in its effect on Convention rights.
- Mr Barling submits that there are no good grounds for distinguishing Hoverspeed, that to the extent that Article 49 is applicable in the instant case, there is here no more convincing a case for a restriction on freedom to provide services than there was in Hoverspeed. He submits, correctly in my judgment, that the scheme does not discriminate on the basis of nationality. I also agree with him that the fact that the scheme impacts on vehicles entering the UK from abroad is not discrimination: it is simply a feature which is inherent in the social problem at which the scheme is directed.
- Mr Barling further submits that any restrictive effects which the scheme is shown to have are “far too uncertain, insignificant and remote to be regarded as hindering services between Member States within the meaning of the Treaty” (see para 69.3 of his written argument). Again, I agree. As Leggatt LJ observed in R v. Secretary of State for the Home Department, ex parte Flynn  Imm AR 594, frontier controls have “nothing to do with Article ”.
- I accordingly conclude that Article 49 is not engaged in the instant case.
- I turn finally to Article 28. For Article 28 to apply, the scheme must be a measure having “equivalent effect” to a quantitative restriction on imports. In my judgment, the scheme is not such a measure. I reach that conclusion for essentially the same reasons as have led me to the conclusion that the scheme does not fall foul of Article 49. In the case of Article 28, however, there is the additional factor that any effect on imports (i.e. imported goods) is indirect, in that the scheme is directed at the vehicles themselves, not at what they are carrying. As in Peralta  ECR I - 3453 (a case involving a restriction on Italian flagged vessels discharging waste into international waters), the scheme:
“... makes no distinction according to the origin of the substances transported, its purpose is not to regulate trade in goods with other Member States and the restrictive effects which it might have on the free movement of goods are too uncertain and indirect for the obligation ... to be regarded as being of a nature to hinder trade between Member States”
(see Societe Civile Agricole du Centre d’Insemination de la Crespelle  I - 5077 at para 36).
- I accordingly conclude that the Secretary of State succeeds on the issues arising under Community law.
D. The Result
- For the reasons I have given, I agree with Simon Brown LJ that the appeal should be allowed in part, and the Order of Sullivan J varied by setting aside the relief granted on the Community law issues; but that in relation to the substantial issues which arise under the Convention the appeal should be dismissed.