High Court Rules on Administrative Discretion and Grant Eligibility in Knot Builders v CITB Case

Citation: [2024] EWHC 115 (Admin)
Judgment on

Introduction

The case of Knot Builders Limited, R (on the application of) v Construction Industry Training Board presents a judicious exploration of administrative law and judicial review, specifically in the context of statutory assessments and grant eligibility within the UK’s construction industry. The case scrutinises the statutory body’s actions—Construction Industry Training Board (CITB)—and its decisions regarding levy assessments and grant payments. Through meticulous analysis, the High Court delves into the principles of legitimate expectation, policy adherence, and the exercise of discretion within public bodies.

Key Facts

Knot Builders Limited (formerly Hudson Contract Services Ltd.) contested the CITB’s decisions on grant eligibility for various training categories for the years 2015/16, 2016/17, and 2017/18. Key to the dispute was the CITB’s adherence to its grant scheme terms, which mandated employers to be registered within a specified period to be eligible for grants, also known as the ‘Tripartite Requirement’. The Claimant challenged the CITB’s rigid application of this policy, their exclusion of grants based on overlooked policy terms, and the legality of refusing supplementary payment.

The case centralises on several legal principles:

  1. Fettering of Discretion: The court evaluated whether the CITB unlawfully fettered its discretion by adhering too strictly to its policy without considering a departure due to exceptional circumstances ([R (Lumba) v Secretary of State for the Home Department [2011] UKSC 12]).

  2. Legitimate Expectation: The Claimant contended that statements made by CITB’s counsel in previous proceedings created a legitimate expectation of grant entitlement, which could not be reneged ([R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61]).

  3. Policy Consistency and Publication: It was debated whether CITB maintained consistent policy application and whether an unpublished policy diverged from published policy, thus affecting the Claimant’s right to fair consideration ([Nadarajah v Secretary of State for the Home Department [2005] EWCA Civ 1363]).

  4. Rationality and Equal Treatment: The court examined whether CITB’s decision-making regarding grant eligibility was rational and consistent with the treatment of similar cases ([R (Gallaher Group) v Competition and Markets Authority [2019] AC 96]).

Outcomes

The court’s judgment was multi-fold:

  1. The CITB was found to have lawfully decided on most of the Claimant’s application categories, applying the Tripartite Requirement correctly as it reflected the purpose and intent of the ITA and the Levy Order.

  2. The CITB’s decision to refrain from waiving the registration condition for the Claimant was quashed only in relation to categories (a)(i) (the Claimant’s own company inductions for new starters) and (d) (Claimant site audits) for the year 2015/16, as the court determined that CITB did not properly consider whether a departure from the policy was warranted. This portion of the Claimant’s application was remitted for fresh consideration by CITB.

  3. The Claimant’s legitimate expectation claim was rejected because the representation by CITB’s counsel did not unambiguously assure grant entitlement without considering relevant exclusions.

  4. CITB’s policy was deemed to have been consistently applied throughout relevant periods as clarified by communications to the Claimant, aligning with published policies.

  5. The court found no irrationality or unequal treatment by CITB in refusing a supplementary grant payment to the Claimant compared to other cases.

Conclusion

The High Court provided a granular and nuanced analysis of administrative decisions within the framework of statutory levy and grant schemes. It asserted the importance of transparent, consistent policies and eloquently articulated the circumspection required in cases involving legitimate expectations and the good administration principle. While the CITB was largely vindicated in its application of policy and decision-making, the judgment illuminates the fine balance public authorities must maintain between adhering to established frameworks and exercising discretion in alignment with legal principles and fairness.

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