Fares fair

A High Court judge has rejected a challenge to hackney carriage fares set by a borough council. Philip Kolvin QC explains why.

In R (Rostron) v Guildford Borough Council [2017] EWHC 3141 (Admin) a challenge to hackney carriage fares set by Guildford Borough Council has been dismissed. In the first ever reported case on the topic, a range of public and European law arguments were mounted. All failed, but the judgment is a mine of stimulating analysis of principles of regulation for licensing and administrative practitioners.

The Council exercised its discretion under section 65 of the Local Government (Miscellaneous Provisions) Act 1976 to set maximum fares for hackney carriages. Its aim was to allow the average cabbie in Guildford to earn the median wage for Guildford residents and cover their costs. Wanting to find out those costs, it consulted the trade who could be expected to have kept records of such costs for tax purposes. The consultation response was negligible.

Therefore, the Council turned to publicly available costs data, eventually using AA figures for motor cars, modified and updated where appropriate, e.g. for fuel, where the latest figures were known. One of the central planks of the challenge was that the Council was irrational to do so, and should have used Transport for London data for black cabs, which the Council had rejected since black cabs are more expensive to run. This argument was dismissed on the evidence. The Council was not bound to use the TfL data on the Claimant's say so.

But a more fundamental point was also run, which was that the exercise of fare setting breached European principles of free movement under the Treaty, since the fares were liable to deter European operators from establishing in Guildford and they could not be justified. In a detailed, intellectually rigorous romp through the field, the judge (John Howell QC), rejected every plank of the challenge.

The first European question essentially related to whether there was the necessary cross-border element. For this, it was not necessary to produce a European person who would be interested in being a taxi driver in Guildford, but who may decide otherwise once the maximum fares were introduced. A likelihood of deterrence would be sufficient to establish the requisite "restriction" of the fundamental freedom. But here, there was simply no evidence that setting fares to enable drivers to recover the median salary for Guildford residents was likely to exert any cross-border effect; so no restriction had been established and the case therefore failed at the first hurdle.

The judge, however, went on to consider what the position would be had a relevant restriction been established. The question then became whether the restriction was justified. This depends on compliance with the test in the case of Gebhard, namely, whether the restriction i) is non-discriminatory, ii) is justified by imperative requirements in the general interest, iii) is suitable for securing the attainment of the objective which they pursue and iv) goes no further than is necessary in order to attain it.

Here, the judge held that the fixing of fares was non-discriminatory, and its purpose was consumer protection, which is a recognised category of European public interest. In asking whether the measure stayed within the band of what was necessary, he gave detailed consideration to the "margin of appreciation", a concept akin to, but not coterminous with, Wednesbury unreasonableness. He concluded, following a review of European case law, that the test is objective reasonableness, namely whether it may reasonably be concluded from the evidence submitted that the relevant condition is satisfied.

On the evidence submitted by the Council, the judge was able to conclude:

In my judgment it may also reasonably be concluded from the evidence submitted by the Borough Council in respect of the particular matters in issue that the maximum fares selected were reasonable and that the table of fares adopted preserves a fair balance between the public interest and the interests of drivers. Having regard to the intention to review the table of fares annually, if not sooner if new information emerges, in my judgment the adoption of the table of fares impugned cannot be said in all the circumstances to have exceeded the extent of the discretion that the Borough Council had. It was not disproportionate.

While all the points of law were resolved in the Council's favour, the case does not necessarily provide an impermeable comfort blanket to authorities. As in all things, they can be held to account by the Court. The real saving grace for the Council here was that it had gone to great lengths to investigate, consult and determine the correct input data for its calculations. It was that, as much as abstruse concepts of European law, which carried it to its destination.

The Council was awarded its full costs in the sum of £17,850, and the Claimant was refused permission to appeal.

Philip Kolvin QC is a barrister at Cornerstone Barristers. He represented Guildford Borough Council, instructed by Bridget Peplow of  its in-house legal team.