This is the Justice Secretary, Chris Grayling, explaining what he calls his “Social Action, Responsibility and Heroism Bill”, trailed in the Queen’s Speech this week. It is, he says,

all about tackling the elf ‘n’ safety jobsworth culture in our society that leaves all too many people who want to do the right thing, who want to get involved in the community, who want to help others ,who want to do the right thing by their employees – but feel they can’t do it because somehow, if it goes wrong, they’re the ones who are going to end up getting the blame, they’re the ones who’re going to end up facing possibly a negligence suit in the courts.

He mentions “Good Samaritans” who may (nonetheless) pass by on the other side because of health and safety laws; people afraid of sweeping snow from their pavements; and small employers who have proper health and safety procedures but find that “something untoward goes wrong”. What he’s trying to do is

send a big message from Parliament to the courts to say the law should be on the side of common sense, that if you come across a case where people are trying to do the right thing the law should be on their side.

Mr Grayling may be right about the scourge of unswept snow, Samaritans not being what they were, and so on. He’s certainly right that a lot of people think you can’t do anything these days for fear of a claim, as newspapers have helpfully pointed out (although I’m not sure the courts often “come across” cases like this). Anyway, he’s decided legislation’s needed, since previous legislative change has failed, as yet, to calm the public.

Legal aid’s been unavailable for personal injury claims for some time, of course. Yes, “no win, no fee” agreements mean solicitors can make claims in the hope of a success fee, but since last year, it’s the litigious claimant – not the Samaritan or snow-sweeper – who’ll pay any success fee (see section 44(4) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012). And lawyers can no longer pay referral fees to claims management companies (under section 56 of LASPO). The government perhaps had come to think the litigation culture a thing of the past, since they actually made it a bit easier to make a personal injury claim by bringing in “qualified one-way costs shifting”. But perhaps the claimants they then had in mind were ordinary people who’ve suffered injury, rather than the litigious scroungers who’ve caused the compensation culture. Anyhow, it seems more measures are needed.

That’s in addition to the Enterprise and Regulatory Reform Act 2013, section 69 of which means (as the explanatory notes make clear) that, where “something untoward happens” an employer will already only be held liable for health and safety breaches where they’re proved to be negligent; and in addition to the Compensation Act 2006, section 1 of which already provides that

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might—

(a) prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or
(b) discourage persons from undertaking functions in connection with a desirable activity.

The SARAH bill will no doubt send an even bigger message, though. That’s what’s legislation’s for, after all.

As a victory for common sense this may even equal Chris Grayling’s reform permitting disproportionate force against burglars, a change I wrote about for the Guardian when he first proposed it. The apparently simple old legal principle (that you were entitled to use reasonable force, but no more, to defend yourself) must have caused many well-meaning newspaper readers to fear imprisonment, because an earlier government clarified it in ten subsections (or about 460 words) not changing the law (of course!) but sending the message that a person can rely on self-defence (as the explanatory notes explain)

if he honestly believed it was necessary to use force and if the degree of force used was not disproportionate in the circumstances as he viewed them. The section reaffirms that a person who uses force is to be judged on the basis of the circumstances as he perceived them, that in the heat of the moment he will not be expected to have judged exactly what action was called for, and that a degree of latitude may be given to a person who only did what he honestly and instinctively thought was necessary. A defendant is entitled to have his actions judged on the basis of his view of the facts as he honestly believed them to be, even if that belief was mistaken.

That common sense message was not, however, quite correct or else not fully understood, which is why Mr Grayling inserted a further 7 subsections (or about 370 words) to ensure that

the use of disproportionate force can be regarded as reasonable in the circumstances as the accused believed them to be when householders are acting to protect themselves or others from trespassers in their homes. The use of grossly disproportionate force would still not be permitted. The provisions also extend to people who live and work in the same premises and armed forces personnel who may live and work in buildings such as barracks for periods of time. The provisions will not cover other scenarios where the use of force might be required, for example when people are defending themselves from attack on the street, preventing crime or protecting property, but the current law on the use of reasonable force will continue to apply in these situations.

Of course I’ve only quoted the explanatory notes rather than the full 17 subsection, 800 word plus provision, so I may have failed to convey its full simplicity and clarity. How easy it must be for juries to apply; how reassuring for homeowners.

That the civil law of negligence is to be clarified in a similar way brings a slight tear to my eye. Three cheers for Mr Grayling, and his victory for common sense!

Writing in the Telegraph yesterday, Labour’s shadow Justice Secretary Sadiq Khan said that

when the Labour government in 1998 brought in a British Bill of Rights – the Human Rights Act – we deliberately drafted the wording to protect British courts. It meant they’d be free to disagree with the European Court of Human Rights in Strasbourg, and that the sovereignty of the UK would not be undermined. The wording, contained in Section 2 of the Human Rights Act, very clearly states that our courts only have to take into account Strasbourg judgments, not be bound by them.

He’s right about that. Section 2(1) says

A court or tribunal determining a question which has arisen in connection with a Convention right must take into account any —

(a) judgment, decision, declaration or advisory opinion of the European Court of Human Rights …

whenever made or given, so far as, in the opinion of the court or tribunal, it is relevant to the proceedings in which that question has arisen.

But, Khan went on,

at times, our courts haven’t always interpreted section 2 in the way we’d intended. Too often, rather than “taking into account” Strasbourg rulings and by implication, finding their own way, our courts have acted as if these rulings were binding on their decisions … And it’s not just me saying that. Senior judges and former Law Lords have also raised concerns. Former Lord Chief Justice Lord Judge and former Lord Chancellor Lord Irvine both believe there’s a problem with how our courts have interpreted Section 2 of the Human Rights Act.

He gives no examples to demonstrate the problem. But he says Labour intends to solve it:

We will make sure it is clear to the judges what Parliament intended by Section 2 – that they’re free to disagree with Strasbourg, that it’s sometimes healthy to do so, and that they should feel confident in their judgments based on Britain’s expertise and strong human rights standing. We believe we can achieve this shifting of power back to our courts by publishing guidance alone, but I don’t rule out re-legislating to make things doubly clear if matters don’t improve.

The immediately striking thing about Sadiq Khan’s announcement is that he’s proposing to influence what judges do by means of guidance. That, as Mark Elliot, David Mead and Obiter J have all written, is an odd thing to suggest.

Government can’t unilaterally alter the meaning or application of an Act of Parliament by issuing its own guidance – at least unless ministers have been explicitly given such a power by Parliament. A judge’s job is to give effect to Parliament’s intention as expressed in legislation: not to the will of government. So whatever “taking account” of Strasbourg case law means, judges cannot find the answer in guidance from a government minister. Khan’s guidance wouldn’t, and couldn’t, have any effect. What remains of his policy is simply that he doesn’t rule out amending the Human Rights Act at some point.

On human rights, as on the EU “In/Out referendum” question, Labour wants to position itself just inside the Conservatives – offering something to reformers and sceptics, but not as much. Chris Grayling spoke last year of Conservative plans to legislate to “make the Supreme Court supreme”; Khan’s announcement is Labour’s calculatedly more moderate response. It’s not much better, though, as policy, than the incoherent triangulation Labour indulged in before the last election. It’s essentially political. It makes no real commitment, and says nothing really new.

Judges already know they’re not bound by Strasbourg judgments of course, and seem in any event to be developing the more independent line politicians now say they want. Famously in the Ullah case in 2004 Lord Bingham set out what’s come to be called the ‘mirror principle” (para. 20)

The duty of national courts is to keep pace with the Strasbourg jurisprudence as it evolves over time: no more, but certainly no less

which is really just a shorthand way of expressing the position as set out more fully in 2010 by Lord Neuberger in Manchester City Council v Pinnock (see pargaraph 48 of the judgment):

This court is not bound to follow every decision of the European court. Not only would it be impractical to do so: it would sometimes be inappropriate, as it would destroy the ability of the court to engage in the constructive dialogue with the European court which is of value to the development of Convention law: see e g R v Horncastle [2010] 2 AC 373. Of course, we should usually follow a clear and constant line of decisions by the European court: R (Ullah) v Special Adjudicator [2004] 2 AC 323. But we are not actually bound to do so or (in theory, at least) to follow a decision of the Grand Chamber. As Lord Mance pointed out in Doherty v Birmingham City Council [2009] AC 367, para 126, section 2 of the 1998 Act requires our courts to ‘take into account’ European court decisions, not necessarily to follow them. Where, however, there is a clear and constant line of decisions whose effect is not inconsistent with some fundamental substantive or procedural aspect of our law, and whose reasoning does not appear to overlook or misunderstand some argument or point of principle, we consider that it would be wrong for this court not to follow that line.

But Sir John Laws said in a lecture last November (para. 25) that

I have in common with others come to think that this approach represents an important wrong turning in our law

by which he was referring to Lord Neuberger’s approach, not just Lord Bingham’s; and Lord Judge said in a speech in December (paras. 40-41) that

There has been a considerable difference of views between judges in this jurisdiction, both in judgments and in public lectures, about the Human Rights Act and the particular wording of four words in s.2(1) of the Human Rights Act. This provides that our courts “must take into account” the decisions of the court in Strasbourg. The obligation is mandatory. But what does it actually mean? …

The different arguments are superbly addressed by Sir John Laws in his very recent Hamlyn lecture, and indeed when I read it, as I did on Monday, I reduced many of the things I was going to say on this issue. Personally, I have never doubted, and have spoken publicly to the effect that the words mean what they say. To take account of the decisions of the European Court does not mean that you are required to apply or follow them. If that was the statutory intention, that would be the language used in the statute.

Recently the Court of Appeal felt able to disagree with the Grand Chamber of the European Court over whole-life orders; and I think over the next few years, British judges will become more assertive when they think Strasbourg is wrong. Sadiq Khan no doubt expects so too, which is why he thinks he’ll get the result he wants without really doing anything. Any guidance he gives is likely to follow them – not the other way round.

How can you tell whether you’re doing something as of right, or doing it by right? Yesterday the Supreme Court gave judgment addressing that question in a case about Helredale playing field, in Whitby – and has strengthened the hand of councils and developers against local green space campaigners. The question’s a tricky and quite confusing one, and answering it drove the Supreme Court to the fairly uncommon step of disapproving the previous case law of the House of Lords.

The field is owned not by North Yorkshire but by Scarborough Borough Council, which built houses on land around it decades ago. But the field is kept as “recreation grounds” under section 12 of the Housing Act 1985. The council mows the grass occasionally, marks out a football pitch and puts up signs saying dogs should be on leads. Kids play on it and people walk across it. You get the idea. But now the council would like to allow a developer to build on the site.

Local campaigners responded by applying to have the field registered as a town or village green under the Commons Act 2006, the effect of which would have been that, under section 38, nothing could be built on the land without government consent. Section 15 of the Act allows land to be registered if

a significant number of the inhabitants of any locality, or of any neighbourhood within a locality, have indulged as of right in lawful sports and pastimes on the land for a period of at least 20 years

North Yorkshire Council – they’re the ones who had to deal with it – turned the application down on the basis that although people had used the field lawfully for 20 years, they had not done so as of right. Christine Barkas is one of the local campaigners, and the case is her attempt to have that decision quashed on judicial review.

The Supreme Court unanimously agreed with North Yorkshire that people’s use of the field – their “user”, in land law jargon – is not as of right, precisely because they have a right to do so. That will I think seem very strange to most non-lawyers. But as Lord Neuberger, giving the lead judgment, explained (para. 14 of the judgment)

the legal meaning of the expression “as of right” is, somewhat counterintuitively, almost the converse of “of right” or “by right”. Thus, if a person uses privately owned land “of right” or “by right”, the use will have been permitted by the landowner – hence the use is rightful. However, if the use of such land is “as of right”, it is without the permission of the landowner, and therefore is not “of right” or “by right”, but is actually carried on as if it were by right – hence “as of right”. The significance of the little word “as” is therefore crucial, and renders the expression “as of right” effectively the antithesis of “of right” or “by right”.

User as of right must be, as Lord Neuberger explained, nec vi, nec clam, nec precario: without force, stealth or permission. The first two cause no problem, since people openly use the field and can just walk on to it. The council has never objected, or tried to block access to the field. On the contrary, they’ve been happy for it to be used in that way. So does that mean people use it with the council’s permission, or merely its passive acquiescence? If by mere acquiescence, then the field can be register as a “green”. If by permission, then it can’t be.

Lord Neuberger seems to give two answers to this question. At paragraph 21 of the judgment he says

So long as land is held under a provision such as section 12(1) of the 1985 Act, it appears to me that members of the public have a statutory right to use the land for recreational purposes, and therefore they use the land “by right” and not as trespassers, so that no question of user “as of right” can arise … it is, I think, plain that a reasonable local authority in the position of the Council would have regarded the presence of members of the public on the Field, walking with or without dogs, taking part in sports, or letting their children play, as being pursuant to their statutory right to be on the land

That I think must be wrong. He’s surely on firmer ground when he says later (para. 23) that

Where land is held [as recreation grounds under the Housing Act 1985], and members of the public then use the land for that purpose, the obvious and natural conclusion is that they enjoy a public right, or a publicly based licence, to do so. If that were not so, members of the public using for recreation land held by the local authority for the statutory purpose of public recreation would be trespassing on the land, which cannot be correct.

I say his first answer (that people have a statutory right to use the land) must be wrong, because if people did have such a right, it’s hard to see how the council could lawfully cut it down unilaterally by, for instance, requiring dogs to be on leads. Yet Lord Neuberger goes on (para. 23) to say

Of course, a local authority would be entitled to place conditions on such use – such as on the times of day the land could be accessed or used, the type of sports which could be played and when and where, and the terms on which children or dogs could come onto the land. Similarly, the local authority would clearly be entitled to withdraw the licence permanently or temporarily.

None of those things seem to me consistent with the idea of a statutory right. Surely the better view is that people use the field under some sort of implied licence to do so, which is where Lord Neuberger ends up. All the other Justices agree with him.

The other interesting aspect of the case is the Justices’ decision to disapprove the 2003 ruling of the House of Lords in R v Sunderland ex parte Beresford, which had unanimously reached the directly opposite conclusion about a piece of land called the “Sports Arena” in Washington (though Lord Scott, to be fair, was clearly uneasy about it). In that case Lord Rodger (para. 60-62) perhaps best sums up their Lordships’ reasoning:

            .. The mere fact that a landowner encourages an activity on his land does not indicate … that it takes place only by virtue of his revocable permission. In brief, neither cutting the grass nor constructing and leaving the seating in place justifies an inference that the owners of the Sports Arena positively granted a licence to local residents and others, who were then to be regarded as using the land by virtue of that licence, which the owners could withdraw at any time.

61. In these circumstances I would conclude that local people used the land nec precario.

62. After the first hearing of the appeal, however, your Lordships invited further written and oral submissions from counsel on whether any of the statutes that may apply to local authority land had conferred on the local residents and others a right to use the Sports Arena – with the result that their use would be “of right”, as opposed to being “as of right” … Having considered those submissions … I am satisfied that, on the agreed facts, neither the designation of the land as “open space” in the New Town Plan nor any of the statutes conferred any such right in this case.

Beresford is no longer good law, of course – since yesterday. There are a couple of things worth saying about how the Supreme Court has dealt with it, though, and how the two judgments differ.

First, Lord Neuberger says at paragraph 47 that he thinks there’s a key factual difference between the situations in the two cases, since in Beresford the land had apparently not been acquired by the council for any particular purpose, and no decision has been made to keep it as recreational space. That leads Lord Neuberger to say

I am clearly of the view, therefore, that Beresford can, and ought to, be distinguished.

What he means here is that Beresford was in any event not a binding precedent that the Supreme Court ought normally to have followed; as a matter of strict legal reasoning its judgment of yesterday did not necessarily involve saying Beresford was wrong. It’s interesting from a technical legal point of view that the Justices have chosen nonetheless to scrub Beresford from the law books – to do it obiter, outwith their core legal reasoning. That suggests the Supreme Court wants its judgments to be practical and useful in the real world to lawyers and the public – not just technically correct. I don’t think the Court has strictly speaking invoked its power to depart from the precedent set by Beresford, although what it’s said undoubtedly has the same effect.

Second, although I’m a great fan of the system whereby our judges can give individual judgments, I must admit that this case shows the value of the Court’s “collegiate” approach, under Lord Neuberger, which means keeping the number of individual judgments down and having Justices agree where possible with one single or lead judgment instead (or in this case, two complementary judgments dealing with separate issues). Yesterday’s judgment is far easier to follow than Beresford, where four Law Lords all set out their own distinct reasoning. The new practice also has weaknesses, but in terms of clear communication with the interested public, this is an improvement.

Finally, the fact that five Law Lords can all have agreed on one solution ten years ago, and that five Supreme Court Justices have all reached the opposite conclusion now, shows how genuinely difficult this issue is. I have to admit to a sneaking suspicion that the Supreme Court may not have done full justice to the Law Lords’ reasoning, and I think the shift in attitude from then to now is linked to our law’s increasing tendency – since the growth of the state last century, the development of judicial review since the 1970s and the advent of EU and human rights law – to see issues like this in terms of public law rather than simply private rights. In Beresford, the Law Lords treated the council as an ordinary landowner acquiescing in use of its land; in Barkas, the Justices have seen it as maintaining land in pursuit of its statutory public functions, so giving the public an implied public licence to use it.

“Public law” was once an alien concept to English lawyers. The great Victorian A.V. Dicey thought it went together with a French view of the rule of law in which your rights are dependent on what the state allows you. Campaigners in Whitby now find that recognition of their special public law right to use a field means that the council can have it built on; so perhaps Dicey had a point.

In front of the Commons Business committee last week, Ian Read, chairman and chief executive of Pfizer, made two points in relation to Pfizer’s commitments, assuming it succeeds in acquiring the Anglo-Swedish drug manufacturer AstraZeneca. It’s pledged, you may remember, over a minimum period of five years, to:

• complete the investment in major new Cambridge R&D centre planned by AstraZeneca;
• keep 20% of its global R&D headcount in the UK;
• base its scientific leadership in the UK;
• locate its HQ in the UK, and
• keep “substantial” manufacturing in Macclesfield.

First, he said, the question of whether any commitments were legally binding was really a side issue, since he intended to keep the commitments regardless; and second, his lawyers would anyway confirm that the commitments were legally binding.

From what he said, and essentially repeated to the Science and Technology Committee, Read’s argument seemed to be that Pfizer’s commitments are binding because of rules in the Takeover Code, and because of the enforcement powers of the Takeover Panel and of the courts in respect of breaches of the Code. Sarah Newton MP said she thought his answer “very reassuring” – but she shouldn’t be reassured.

This is what he said to the science committee (in his answer at 9.49.18 am to Sarah Newton’s question about how the pledges can be enforced):

Our understanding is that having made these pledges, and submitted them as part of our offer – we’ll put them in our offer document, if we go forward with the purchase of AZ – it becomes legally binding under your Takeover Panel for the five year period; and if we were to not respect those promises, it will be the Takeover Panel who would say “You have not met your commitments”, and they would refer it the the High Court, and the High Court would have unlimited powers to readdress the situation …

Pfizer must be relying on rule 19.1 of the Takeover Code, which is in section 1, dealing with “Conduct during the Offer”, and says

19.1 STANDARDS OF CARE

Each document or advertisement published, or statement made, during the course of an offer must be prepared with the highest standards of care and accuracy and the information given must be adequately and fairly presented. This applies whether it is published by the party directly or by an adviser on its behalf.

Note 3 to the rule says:

3. Statements of intention

If a party to an offer makes a statement in any document, announcement or other information published in relation to an offer relating to any particular course of action it intends to take, or not take, after the end of the offer period, that party will be regarded as being committed to that course of action for a period of 12 months from the date on which the offer period ends, or such other period of time as is specified in the statement, unless there has been a material change of circumstances. 

You may have heard mention in the media of new and untested rules in the Code – it’s this “Note 3” that was inserted into the tenth edition of the Code in 2011, and which is untested.

Pfizer’s argument, then, is that its promises are legally binding because to cut R&D at Cambridge or close the Macclesfield factory (for instance) within five years would breach Note 3, a breach which the High Court then has unlimited power to remedy.

I don’t buy it, I’m afraid. It’s a reasonably coherent argument that allows Pfizer to say its commitments are binding in an abstract, technical sense. It doesn’t mean they’re binding in the real-world sense of being enforceable. Here’s why not.

First, while it’s perfectly true that the Takeover Panel does indeed have the ability under section 955 of the Companies Act 2006 to refer a breach of the Code to the High Court, it has never done so before, and would require considerable courage to do so for the first time. Ian Read went far too far when he airily suggested last week that the Panel “would” refer Pfizer to the High Court in the event of a breach.

Secondly, it’d be hard to satisfy the High Court that any breach had taken place given the hedged nature of Pfizer’s promises, and the fact the Note 3 itself would let Pfizer off the hook as long as there’s any material change of circumstances. The global business environment changes all the time; I wouldn’t fancy trying to persuade the High Court that nothing commercially material had changed between now and a proposed closure of Macclesfield in, say, three years. Production costs elsewhere could change significantly in that timescale.

Third, there might even be an argument that Note 3 does not have the effect that’s being suggested. The Note says Pfizer would be “regarded as being committed” to its pledges, but the actual rule to which it’s attached, rule 19.1, is only about the accuracy of Pfizer’s statements at the time they’re made. There’s quite a bit of room for the merged firm’s lawyers to argue that a subsequent breach of the expectations expressed in Note 3 would not be a breach of the Code that the High Court could deal with. That point is indeed untested.

But most importantly of all, even if the Takeover Panel did bring a breach of promise to the High Court, and even if it could satisfy the High Court that the Code had been breached – what does anyone think the High Court would actually do about it?

What section 955 says is that if a company has breached a Code requirement

the court may make any order it thinks fit to secure compliance with the requirement.

The emphasis is mine. The High Court would be abe to grant a remedy for one purpose, and one purpose alone: to make Pfizer stick by its pledges. It would have no power to punish Pfizer for going back on them, or to compensate anyone.

You might think it could conceivably fine Pfizer, if it thought a fine would make Pfizer reverse its decision. But how could a fine have that effect? If Pfizer, a company that even without AstraZeneca’s business clears over a billion pounds a year, decides for commercial reasons that it has to move R&D to the US or manufacturing to India, what scale of fine would be required to overcome its business logic? A breathtaking sum would be required, going into many millions – perhaps even billions. It’s hard to imagine the High Court ordering that level of fine.

What’s more, under the Human Rights Act the High Court would need to respect Pfizer’s right to peacefully enjoy its possessions, which a court can only lawfully interfere with to the extent that it strikes a fair balance between the public and private interests involved. Yes, there’s a public interest in keeping production and research jobs in Britain. But to fine a single company a nine or ten figure sum would surely be excessive, even weighed against that public interest.

A fine, then, is hard to imagine being ordered. The smaller it was, the less likely it would be lawful under section 955; the bigger, the less likely it’d be lawful under the Human Rights Act.

So what about an injunction? The High Court could conceivably grant an order preventing the closure of Macclesfield or Cambridge, it might be argued by Pfizer. But even this possibility involves serious, and I think insurmountable, problems.

The High Court would certainly have power under section 37(1) of the Senior Courts Act 1981 to grant an injunction, and section 37(3) mentions an example of the sort of injunction that might be thought relevant here: an order restraining the merged company from removing from England, or otherwise dealing with, assets located here. That’d be similar to what lawyers used to call a Mareva injunction to “freeze” assets, now called a “freezing injunction” under rule 25.1(1)(f) of the Civil Procedure Rules.

But if the merged company did break its promises, would it necessarily do so by disposing of assets? Is it clear whether AstraZeneca actually owns land in Macclesfield, or that it owns its production machinery? Even if it does (and AstraZeneca’s evidence last week suggested it does actually own land at Cambridge), why should the merged company be barred from disposing of those assets? After all, it did not promise to maintain ownership of land in the UK, and neither selling any land it owns, nor giving up a lease of it, would breach the expectation in Note 3. I don’t think even selling (or terminating a leasing agreement on) manufacturing equipment would fall foul of Note 3: Pfizer has not made any pledge to use or maintain any particular type of plant. It’s not easy to think of an order relating to assets that could be an sensible remedy calculated to secure compliance with Pfizer’s pledges.

No. In their true essence, Pfizer’s key pledges are anti-redundancy pledges, and the only sensible way the High Court could secure compliance with them would be to restrain Pfizer from making redundancies in Macclesfield or Cambridge. The trouble with that is that the courts have traditionally set their face against such orders.

In 1975 in the Court of Appeal in Chappell v Times Newspapers (unfortunately not on BAILII) Lord Justice Geoffrey Lane (as he then was) said:

Very rarely indeed will a court enforce, either by specific performance or by injunction, a contract for services, either at the behest of the employers or of the employee.

That principle has a long pedigree, as explained in the 2012 Supreme Court judgment in Société Générale v Geys by Lord Wilson (paragraph 77) –

[T]he courts,” said Sir George Jessel, Master of the Rolls, in Rigby v Connol (1880) … “have never dreamt of enforcing agreements strictly personal in their nature, whether they are agreements of hiring and service, being the common relation of master and servant, or …”

– and Lord Sumption (paragraph 118):

When it comes to enforcing an unwanted relationship of employer and employee, there are altogether more sensitive considerations involved than those governing most other more contractual bargains. As Fry LJ put it in De Francesco v Barnum (1890) … the courts are “very unwilling to extend decisions the effect of which is to compel persons who are not desirous of maintaining continuous personal relations with one another to continue those personal relations.”

A good example of  the application of the principle is Alexander v Standard Telephones in the Chancery Division of the High Court in 1989, in which Mr Justice Aldous refused an injunction to prevent an employer from making redundancies. On page 304 at C, Aldous J explained:

as a matter of principle the courts have refused to grant injunctions to restrain a breach of contract for personal service which would compel an employer to provide work for an employee he does not wish to employ … This attitude is no doubt based on the fact that it is not practicable to make an employer and an employee work together in circumstances where
 one of the parties is not prepared to continue the relationship

If you need any further persuasion, looking at the question more broadly than simply redundancy, it’s clear from the unanimous judgment of House of Lords in Co-op Insurance v. Argyll Stores that the courts will very rarely order a company to continue doing business anywhere in particular. The case involved a supermarket in Sheffield, and Lord Hoffmann (giving the lead judgment) quoted and ultimately approved what he said was the courts’ “settled practice”:

There is no dispute about the existence of the settled practice to which the judge referred. It sufficient for this purpose to refer to Braddon Towers Ltd. v. International Stores Ltd. [1987] … where Slade J. said:

“Whether or not this may be properly described as a rule of law, I do not doubt that for many years practitioners have advised their clients that it is the settled and invariable practice of this court never to grant mandatory injunctions requiring persons to carry on business.”

His speech sets out the many good reasons that lie behind the courts’ practice, and is worth reading in full if you want to understand why this sort of order, which would require the High Court’s constant supervision, is unlikely to be granted. One of the most telling points Lord Hoffmann makes of relevance to the Pfizer case is that the court would have to enforce such an order by the “unsuitable instrument” of punishment for contempt of court:

The heavy-handed nature of the enforcement mechanism is a consideration which may go to the exercise of the court’s discretion in other cases as well, but its use to compel the running of a business is perhaps the paradigm case of its disadvantages …

… the defendant, who ex hypothesi did not think that it was in his economic interest to run the business at all, now has to make decisions under a sword of Damocles which may descend if the way the business is run does not conform to the terms of the order. This is, as one might say, no way to run a business.

So: even if the Takeover Panel were brave enough to go to the High Court, and even if it could persuade the Court that reneging on Pfizer’s flexible pledges amounted to a breach of the Takeover Code – no material change having occurred in the meantime – there’s nothing the High Court could realistically do to secure compliance with the pledges. It could not properly impose a fine; and long-established principle and practice is against the grant of an injunction.

Ian Read agreed either to provide the committees with his legal advice, or with a document expressing his lawyers’ confirmation of the claim that his promises had legally binding effects. I wasn’t quite sure which. They should expect to be provided with full legal advice from a barrister instructed by Pfizer’s solicitors, which deals with the sort of detailed enforcement issues I’ve raised here. If they allow themselves to be fobbed off with a laconic and essentially presentational “confirmation” of Pfizer’s position from City solicitors alone, containing little in the way of serious legal argument, then they’ll have been naive in the extreme.

Pfizer’s claim that its pledges are legally binding may seem reassuring on the surface – but I’m afraid it’s only a sugar coating. Like a placebo, it may fool the patient into feeling better. But I doubt there’s any real effect.

If you were given leave to do something, but then an order was made which invalidated it, and now that order itself has been revoked – is the result that you’ve automatically got leave again? Is your original leave “revived” in other words, by the revocation of the order invalidating it? This was the sort of question the Supreme Court decided in its judgment today. You don’t get your leave back, it said – at least not in an immigration case after a deportation order has been revoked.

Fitzroy George was given indefinite leave to remain in the UK, but then was imprisoned more than once for drugs offences. The Home Secretary issued a deportation order, which had the effect set out in section 5(1) of the Immigration Act 1971:

a deportation order against a person shall invalidate any leave to enter or remain in the United Kingdom given him before the order is made

Mr George eventually won his appeal against deportation, though, which in effect revoked the deportation order because it breached his right to family life. He could not, then, be deported, for legal reasons.

The Court of Appeal had decided (by a majority of two to one, Lord Justice Maurice Kay agreeing with Sir Stephen Sedley, against Lord Justice Stanley Burton) that the indefinite leave to remain was revived by that court decision. The main plank of its reasoning was the existence of a power under section 76(1) of the Nationality, Immigration and Asylum Act 2002 to revoke leave:

(1) The Secretary of State may revoke a person’s indefinite leave to enter or remain in the United Kingdom if the person—
(a) is liable to deportation, but
(b) cannot be deported for legal reasons.

That power would never have been necessary, the Court of Appeal said, had leave remained “invalidated” anyway, after a deportation order was revoked. And seeing leave to remain as having been revived resulted in a straightforward and fair situation, whereby the Home Secretary could still revoke leave, subject to an appeal.

The Supreme Court unanimously disagrees, in a single judgment given by Lord Hughes. It’s clear from every version of the Immigration Rules since 1971, he says, that Parliament has assumed leave is invalidated once and for all by a deportation order – so that must have been Parliament’s intention all along. Section 76 of the still makes sense even if leave is extinguished for ever, he says, since it covers the different situation of a person liable to deportation but who’s never been subject to a deportation order. And there’s no need for any further appeal about the invalidation of indefinite leave to remain, since Mr George has already has ample rights of appeal.

Lord Hughes puts a great deal of emphasis on the Immigration Rules as an extrinsic aid to interpretation, but really the essence of his reasoning is a paragraph 29:

The terms of section 5 of the 1971 Act are, as words, capable either of importing revival of leave or of not doing so. Revival is not their natural meaning, because the natural meaning is that revocation takes effect when it happens and does not undo events occurring during the lifetime of the deportation order. Revival is a significant and far-reaching legal concept, and it is much more likely that it would have been specifically provided for if it had been intended.

On April 28, Pfizer announced a possible offer to buy AstraZeneca, presumably having thought an announcement was required by rule 2.2 of the Takeover Code. The result is that, under the relatively new “put up or shut up” rule now embodied in rule 2.5 of the Code, Pfizer has until 5 o’clock on May 26 – the 28th day after its announcement – in which to make a firm offer.

It’s not done that yet, although as has been widely publicised, it has put to AstraZeneca’s board a proposal to buy the Anglo-Swedish firm for £50 a share, in a mix of cash and shares.  The proposal has triggered a wave of concern here in Britain about the potential loss (assuming Pfizer acts as it has done in the past, and makes post-merger economies of scale by cutting research and development somewhere in the new merged firm’s global empire) of a new R&D centre AstraZeneca plans to build in Cambridge; and about possible loss of jobs in Macclesfield.

According to the FT, Pfizer’s boss has assured the government that, under Pfizer’s plans, the new merged company would –

• complete the Cambridge investment;
• keep 20% of its global R&D spending in the UK;
• base its scientific leadership in the UK;
• locate its HQ in the UK, and
• keep “substantial” manufacturing in Macclesfield.

But these promises only last for five years, they’re explicitly subject to any significant change in the commercial environment – and in any event they have no binding force. So: does the government have any way of forcing Pfizer to make more significant, binding commitments? Can it somehow step in to prevent the deal if it’s not satisfied?

Since competition law clearance of this merger would be a matter for the European Commission (the global revenues of each company being so huge), the only public law power British ministers could exercise here would to issue a European Intervention Notice under section 67 of the Enterprise Act 2002. A recent high-profile example of the exercise of that power was the European Intervention Notice issued in 2010 by Vince Cable in relation to the News Corporation’s proposed takeover of BSkyB. The effect of such a notice would be to enable ministers to block to merger, unless their public interest concerns were satisfied.

But there’s a problem. Under section 58 of the Act, a European Intervention Notice can only be issued on the basis of a limited number of public interest considerations: national security, accuracy and feee expression in newspapers, considerations relating to broadcasting, and since 2008 (the amendment is not yet reflected on the legislation.gov.uk website) maintaining the stability of the UK financial system. So as the law stands, a European Intervention Notice cannot be issued.

A further consideration could be added to section 58: subsection (4) gives ministers a power to so so by order. This is what Ed Miliband means when he says he wants to “widen” the public interest test so as to enable some kind of intervention on this occasion. It’s what writers like Stefan Stern mean when they say a public interest test is needed:

@carlgardner No. But a 5 year “guarantee” (subject to unforeseen changes in circumstances) is meaningless. Public interest test needed. — stefanstern (@stefanstern) May 7, 2014

and it’s what the FT was calling for when it suggested an independent body should be set up to assess the danger mergers pose the UK science base:

This should have the power to seek structural remedies if necessary. In extremis it should be able to block deals outright. These powers must be tightly defined and used sparingly.

You may remember ministers had these powers in the NewsCorp-BSkyB case, acting in that case on the advice of Ofcom.

But for any new public interest consideration to be permissible, the government would have to seek the approval of the European Commission under article 21.4 of the EU Merger Regulation for “recognition” in principle of the new “public interest”. But that would mean giving the European Commission the final word over whether the government could intervene again; not an attractive approach for any British government, especially during a European Parliament elections campaign. These are at least some of the

serious European legal constraints

Vince Cable recently told the House of Commons he was operating under. He says he’s “open minded” and considering all options, but I doubt he’ll want to take this one just now. I suppose the option might be less politically toxic after May 26, when we’ll know whether Pfizer is bidding, and when the Euroelections are over. The Commission might – just might – recognise a public interest compatible with EU law in maintaining scientific research capability in Europe. I don’t think there’s any chance of the Commission’s accepting anything that would protect the Macclesfield factory. But I doubt Cable will go down this route at all.

The next two or three weeks will also however give Cable, his civil servants and lawyers, a chance to work out if there’s some other way Pfizer’s assurances can be made legally binding. Could that possibly be done? I doubt it. I’m no mergers and acquisitions wizard; I like to think I’d have made a terrific partner at Slaughter and May, Clifford Chance or Allen & Overy, but I’m afraid none of those firms wanted me as a trainee. But the sort of possibility that might occur to those involved might be for Pfizer to agree to spin off AstraZeneca’s UK-based research and development functions into a separate company, servicing the new merged parent. The merger deal could include a covenant by the merged firm to maintain the R&D subsidiary in the UK for a certain period, and to spend at least 20% of its global R&D spending on the services of the spin-off operation. Its board could be required to be the same as that of the merged firm, and one of its objects could be to maintain a high level of scientific research capability in the UK.

Theoretically, then, the company’s directors would have a duty to act in good faith so as to achieve that purpose, under section 170 of the Companies Act 2006 (look carefully at the way subsection (2) would colour the subsection (1) duty with the “public” science duty I’ve proposed). A shareholder could go to court to pursue a derivative action in the name of the company against any director breaching that duty, for instance by agreeing, or proposing to agree, to closure of the firm or its sale – and perhaps obtain a remedy, such as an injunction, preventing the breach.

What sort of shareholder might take such action? Well, the government might, if it was given or sold a share as part of the merger deal. Alternatively, it might be some arms-length or independent body, like a company established specially for the purpose – or even an existing body with an in interest in this area, like the Wellcome Trust.

I don’t think even any of this stands legal scrutiny, though, at least not if brokered by the government.

The new merged firm, if based in the UK, would be treated as a “national of a Member State” for the purposes of EU law and so would enjoy freedom of establishment under article 49 of the Treaty on the Functioning of the EU. Any requirement that the spin-off company remain based in the UK would probably be an unjustifiable interference with free movement (and breach article 14 of the Services Directive, for what it’s worth), as would any requirement for the merged parent to maintain a subsidiary in Cambridge. EU law would require the merged company to be free to move its R&D to Bulgaria, if it wants to.

Nor is it obvious that a softer restriction would pass muster. Limiting a firm’s ability to take its direct investment out of Europe would, it seems to me, restrict the free movement of capital under article 63 TFEU – again, probably without any sustainable legal justification. Crucially, restrictions on the free movement of capital are not only prohibited between Member states, but between Member States and “third countries” – like the USA. So even a requirement for the merged firm to keep its R&D base in Europe would be hard to square with EU law.  I doubt, then, that Vince Cable can come up with any legal means of holding Pfizer to its word. I think he must hope its promises satisfy opinion, and that it doesn’t embarrass him by reneging on them at speed.

Interestingly, as this debate has been going on in the UK, French ministers have been resisting GE’s bid for Alstom, which may also be the result of an American firm wanting to invest its cash in Europe rather than repatriate it to be taxed more heavily. The economics minister Arnaud Montebourg has expressed his concerns in far more nationalistic and nostalgic terms than any British MP has in relation to AstraZeneca. Some French commentators have said France should handle this sort of deal more like the British (at least on this podcast they do; if your French is up to it, it’s worth listening to Le Monde’s Sylvie Kauffmann explaining the AstraZeneca debate in French) just as British commentators seem to want us to do things more like the French.

French politics on this sort of issue is conducted in a different style, and the French government does have some legal blocking power. But it’s not as broad a power as is often assumed: it’s limited to sectors closely involved with state functions, to security, defence and the arms industry. In fact in some ways, the legal power available to French ministers is narrower than that available in the UK. Neither is wide enough for present purposes. And ultimately, France is subject to the same “serious European legal constraints” as Britain.

Politicians can exert pressure to get a better deal for their countries either by means of assurances or (in the case of Alstom) from a European “white knight” like Siemens. A bidder might be deterred by political, commercial and media hostility. But I doubt these deals can lawfully be blocked, or even that bidders can be legally bound to nationally preferential promises. I don’t think government can do much.

The secretary of the Lawyers’ Secular Society, solicitor Charlie Klendjian, spelled out on Monday what the protest was about:

We know the Law Society practice notes don’t change the law. We know that sharia law hasn’t been “enshrined” into English law. Well not yet, anyway.

… we know and we accept that people can be as nasty, racist, homophobic, sectarian, bigoted and sexist as they want in their wills, as long as they provide for their dependants, because it’s their money and they can do what they want with it. This is what we call in English law “testamentary freedom”. It’s an established and reasonably uncontroversial feature of our legal system. We’re not here today campaigning against testamentary freedom, or to legally force people to give money to people that they don’t like.

So when the Law Society president calls critics of its sharia guidance “ill informed” – in typical sneering lawyerly fashion, I might add – I respond that no, Mr. President, we are not “ill informed”. It is you, Mr. President, that is ill informed: you are ill informed about the harm sharia law manages to do even though it is not part of our formal legal system, and it is you, Mr. President, that is ill informed about the threat sharia law poses to everyone’s fundamental civil liberties.

The Law Society, of which he is a member, should be leading the criticism of encroaching sharia norms, he argued. But failing that

is it really too much to ask that they just keep their mouth shut and not actively give sharia law credibility and respectability? Is that really too much to ask of the representative body for my profession? Is that really too much to ask of a secular Law Society within a secular democracy which has a secular legal system?

I enjoyed his channelling of Ronald Reagan at the end of his speech. That must have been fun to write and to say.

Where did the practice note on sharia succession rules come from, Yasmin Rehman of the Centre for Secular Space (and a fellow of the Muslim Institute) asked protesters outside the Law Society yesterday.

What possessed the Law Society to issue this guidance?

Muslim women hadn’t asked for it, she told us. And in an interesting passage on the messages bodies like the Law Society can send to British Muslims, she said

on one level we’re told to integrate, we’re told to be part of British society, and on the other hand we’ve got the apparatus of the state saying if you’ve got a family dispute, go to a sharia council, if you want to educate your children, send them to a faith school … and now, if you’ve got issues around inheritance, another cleric will tell you what to do; the ideology of divide and rule appears to have returned, but it’s only returned for Muslims, and we have to out a stop to it.

Diana Nammi, executive director of the Iranian and Kurdish Women’s Rights Organisation, told yesterday’s protest in Chancery Lane that she lived in Iran when its revolution was “hijacked by fundamentalists”:

As a woman, my testimony became worth half that of a man; as a woman, if I were to remarry I would lose my custody of the children, and as a woman under sharia inheritance law I was entitled to half that of my brothers.

She demanded

that the Law Society withdraw is guidance on sharia inheritance law because, although this guidance does not change the law, it legitimises discrimination against women and children.

She went on,

I am deeply concerned that this move has come from the professional body for lawyers of England and Wales. Lawyers should be leaders in defending human rights.