September 18

Adam Perry: What’s so great about flexible policies?

If there were ever a prize for “least examined ground of judicial review”, I would nominate the flexibility rule. The flexibility rule says that administrative policies must be flexible not rigid. The rule is nearly a century old. It’s part of the law of judicial review in England and Wales, Canada, Australia, New Zealand, and many other common law jurisdictions. It’s invoked in case after case. And yet the rule has received hardly any serious scrutiny. Judges rarely question it. Academics rarely write about it.

This neglect extends to the rule’s justification. Take the case of British Oxygen Co v Minister of Technology. The Board of Trade had a discretionary power to make grants for equipment purchases. To manage all the applications it received, the Board made a policy not to make grants for purchases of less than £25. British Oxygen had purchased a lot of oxygen cylinders for £20. The company didn’t quite fit under the policy, but it applied for a grant anyway. The Board refused, and the company went to court, arguing that the Board hadn’t taken into account the particulars of its case. The House of Lords ultimately sided with the Board. But it did so because it believed that the Board had ‘carefully considered’ the company’s application. Had the Board’s policy been rigid, British Oxygen would have won.

British Oxygen is a famous case. It’s probably the leading case on the flexibility rule. Yet the House of Lords never explains the rationale for the rule. So I wonder: what’s so great about flexibility? What’s so terrible about rigidity? What, if anything, is to be said for the flexibility rule?

Legislative Intent

I say the rule has been neglected, and that’s true, but it hasn’t been entirely ignored. Britain’s top court has discussed the flexibility rule at length twice. The first time was in British Oxygen. The second was in 2015 in R (Sandiford) v Foreign Secretary. There the UK Supreme Court said that the basis for the flexibility rule is legislative intent. When the legislature confers a discretionary power, it wants the power to be able to be used in different ways in different circumstances. A rigid policy would frustrate that intention. So, rigid policies should be banned.

When the legislature confers a discretionary power, it doesn’t usually spell out its intention that the power be kept free to use in different ways in different contexts. So, how do we know the legislature has this intention? Perhaps the the legislature must have this intention, given its intention to confer a discretionary power. If the legislature wanted a power to be used in a certain way, it wouldn’t have made the power discretionary. That’s the thought, I guess.

There’s an obvious mistake though. Here’s one thing we can say about a legislature’s intentions: (1) the legislature does not intend to limit the use of a discretionary power itself. We can infer (1) from the intention to confer a discretionary power. That’s not a problem. But don’t confuse (1) with a very different proposition: (2) the legislature intends the use of a discretionary power not to be limited. We can’t infer (2) from the intention to confer a discretionary power. Only (2) would justify the flexibility rule. So, we can’t get from the intention to confer a discretionary power to the flexibility rule.

Why can’t we get to (2) from the intention to confer a discretionary power? Why would a legislature intend to confer a discretionary power without intending the use of the power not to be limited to one circumstance? For either of two reasons: either the legislature wants someone else to choose whether to limit the use of that power, or it wants someone else to choose how to limit that power. This “someone else” will most likely be the official to whom the power has been given. None of this is hypothetical. Legislatures really do confer discretionary powers, while also intending the power to be limited by an official. (See, for example, R (Nicholds) v Security Industry Authority.)

What’s left of the idea that legislative intent justifies the flexibility rule? Only this I think: a legislature should be presumed to intend that a discretionary power be used flexibly. I don’t have any quarrel with this answer, but it doesn’t really justify the flexibility rule. If we’re entitled to presume that a legislature wants discretionary powers to be used flexibility, it’s because there are good reasons for discretionary powers to be used flexibly, which we expect the legislature to act on. What are these “good reasons”? The answer would be a justification for the flexibility rule. Presumed legislative intent can’t be the justification we’re looking for, because it presupposes the existence of that very justification.

Avoiding Error

Academics have tended to favour a different argument for the flexibility rule. Here it goes: Policies are general. Because they’re general, they’ll sometimes apply when the merits of a case favour a different result. If a policy is rigid, then an official can’t set aside a policy when it’s at odds with the merits of the case. If a policy is flexible, then the official can do exactly that. Call an “error” a decision at odds with the merits of a case. Now we can say that rigid policies lead to more errors than flexible policies. We can all agree that errors are to be avoided. So, rigid policies should be banned.

This isn’t a terrible argument, but it’s not good either. For one thing, flexible policies will reduce errors only if officials can tell when a policy is at odds with the merits of a case, and are able to come up with a better alternative. But this is pretty dubious as a general claim. Officials are sometimes unskilled, careless, prejudiced, forgetful, distracted, or overworked. A policy, meanwhile, may have been designed over time, when deliberative resources were abundant. It might have been designed in isolation from the temptations of individual cases. Perhaps it was drafted in a large organisation, where responsibility for policy-creation was given to those best able to do the job. It is possible – even plausible – that officials will commit fewer errors if they stick to their policies instead of trusting their own judgment.

There’s a second objection. Think of the familiar advantages of rigid policies. They save officials time and energy. Those saved resources can be used for other things. Decisions in particular cases can be made quickly, which applicants will appreciate. Applicants will know the likely outcome of their applications, which helps them plan their lives. They’ll know what information and arguments are relevant when they make their submissions, which speeds up decision-making even more. In short, rigid policies increase efficiency and predictability. Efficiency and predictability are important. They might even be more important than reducing error. So, even if rigid policies lead to more errors, they might still be preferable to flexible policies.

Neither of these objections is meant to show that rigid policies are generally better than flexible policies. I don’t know which sort of policy is generally better, relative to error, efficiency, and predictability. But I doubt that courts do either. Normally, when a court isn’t sure what an official should do, it doesn’t lay down a general rule one way or the other. It lets the official decide. That’s exactly what a court does when it comes to the choice whether to have a policy simpliciter: it leaves that choice to the official. The most sensible approach would seem to be for courts to treat the choice between a flexible and rigid policy the same way: leave the choice to officials. By now we’re very far from a justification for the flexibility rule.

Participation

I think we can do better. Judges and academics have looked outside judicial review to find the rule’s justification. They’ve looked to legislative intent, and to the general normative consideration of error-avoidance. I think we should look inward, to the doctrinal context of the rule, and especially to the requirement of a fair hearing.

When British Oxygen applied for its grant, the Board gave the company a hearing. Imagine the following scenario:

Scenario 1. The Board’s policy is rigid. The Board is determined to refuse grants for purchases under £25, no matter what. It has effectively decided all such applications in advance.  Nothing that British Oxygen could say in the hearing would convince the Board to make an exception. Anything it did say would fall on deaf ears.

In this scenario, a hearing takes place, but it is a sham or pretence. It provides the appearance of participation in the decision-making process, but not the reality.

Compare a second scenario:

Scenario 2. The Board’s policy is flexible. The Board uses its policy to resolve impasses in deliberation, and perhaps to override doubts about an application. But the Board is open to persuasion. What British Oxygen says in the hearing can make all the difference. If the company convinces the Board that the merits are on its side, then it will influence the Board’s decision, and win its grant.

In this second scenario, the hearing is no sham. British Oxygen might fail to convince the Board to set aside its policy. But, if the company fails, it will be because the merits were not clearly on its side, not because it was ignored.

If there is to be a hearing, then it should be meaningful, not for show. That’s true even if a hearing shouldn’t have been held in the first place. In a perfect world, maybe the Board wouldn’t have granted British Oxygen a hearing. But it did. At that point, the Board became obligated to make the hearing a genuine opportunity for participation. To do otherwise – to go through the motions of hearing from an applicant even though the decision had already been made – would be disingenuous, bordering on duplicitous. It would be wasteful. And it would be disrespectful.

This argument says that policies should be flexible when there’s a right to a fair hearing. But there’s almost always a right to a fair hearing in the bare sense of a right to make representations. And so the argument applies generally.

What’s so great about flexibility? It allows applicants to participate more fully in the decision-making process. What’s so terrible about rigidity? It treats applicants as if they had nothing to say about a decision that affects them On reflection I think there’s a lot to be said for the flexibility rule.

I discuss the justification for the flexibility rule in more detail in an article recently published in the Cambridge Law Journal. The article also covers the scope and content of the rule. The published version is here; a pre-publication version is available for free here.