This case summary is about AXA General Insurance Ltd v HM Advocate [2011] UKSC 46. It is an important case for law students who are studying constitutional and administrative law. The case examines the boundaries of legislative competence of the Scottish Parliament and its impact on judicial review. The focus is on the Act relating to asbestos-related conditions and its challenge on the basis of irrationality and property rights under the European Convention.

  • In the case of AXA General Insurance Ltd v HM Advocate [2011] U.K.S.C. 46, it was held that Acts of the Scottish Parliament are not subject to the ordinary principles of judicial review like irrationality but can be subject for being contrary to the rules of law. The courts will grant the legislator a wide discretionary area of judgment for legislation that deals with social, economic, and political issues.

Facts of the Case AXA General Insurance Ltd

  • C were insurance companies whose business included the writing of employer’s liability insurance policies.
  • The Scottish case Rothwell [2008] A.C. 281 held that asymptomatic pleural plaques arising from asbestos exposure did constitute actionable damage.
  • In response, the Scottish government passed the Damages (Asbestos-related Conditions) Act 2009, giving individuals a right to a cause of action for asbestos-related conditions arising from exposure due to a negligent employer.
  • C challenged the validity of the Act on 2 grounds. First, that this was outside the Scottish government’s legislative competence because it was contrary to the insurers’ right to property under the European Convention.
  • Second, that the Act was an irrational exercise of legislative authority, and thus could be subject to judicial review at common law.

Issues in AXA General Insurance Ltd

  • Was the 2009 Act within the Scottish government’s legislative competence?
  • Was the 2009 Act subject to judicial review for irrationality?

Held by the Supreme Court (Scotland

  • Finding for D, that the Scottish Parliament viewed the non-actionability of asymptomatic pleural plaques as a social injustice which justified their intervention. Such a view could not be dismissed as unreasonable.
  • While Acts of the Scottish Parliament were in principle subject to judicial review, they were not subject on the grounds of unreasonableness, irrationality and arbitrariness. The Scottish Parliament was accountable to exercise its powers within the limitations of the Scotland Act 1998.

Lord Hope

  • The margin of appreciation accorded to national authorities is essential to the supervisory jurisdiction exercised over state conduct by the international court. In the national courts, the Convention is an expression of fundamental principles which will involve questions of balance between competing interests and issues of proportionality.
  • In some circumstances, such as where the issues involve questions of social or economic policy, the area in which these choices may arise is an area of discretionary judgment to respect the considered opinion of the elected body.
  • The judgment of the Scottish Parliament to legislate to correct a social injustice was not unreasonable. The negligence of employers exposed their workforce to a great deal of anxiety in concentrated, socially disadvantaged areas. This anxiety is well-documented to be actionable. No reasonable government could ignore an issue of this scale and the Parliament was entitled to regard this as a social injustice.
  • To establish standing under the Convention, C had to show that they were victims within the Convention. They were shown to be victims in that there would be interference with their ‘possessions’ in the pursuit of a legitimate aim, but the Scottish level of interference fell within the Parliament’s margin of appreciation and was not unreasonable. Therefore, C did not have standing.
  • “The fact that we are dealing here with a legislature that is not sovereign relieves us of that responsibility. It also makes our task that much easier. In our case the rule of law does not have to compete with the principle of sovereignty…. the rule of law enforced by courts is the ultimate controlling factor on which our constitution is based. I would take that to be, for the purposes of this case, the guiding principle…We now have in Scotland a government which enjoys a large majority in the Scottish Parliament… It is not entirely unthinkable that a government which has that power may seek to use it to abolish judicial review or to diminish the role of the courts in protecting the interests of the individual. Whether this is likely to happen is not the point… The rule of law requires that the judges must retain the power to insist that legislation of that extreme kind is not law which the courts will recognise” [51].
  • The Acts of the Scottish Parliament are not subject to judicial review on the grounds of irrationality, unreasonableness, or arbitrariness. This is not needed as there is already a statutory limit on the Parliament’s legislative competence under the 1998 Act.

Significance of the Case on the Development of the Law

AXA General Insurance Ltd v HM Advocate [2011] stands as a landmark decision in UK constitutional law, particularly highlighting the judicial review scope concerning the Acts of the Scottish Parliament. This case is pivotal for several reasons:

  1. Clarification on Legislative Competence: The Supreme Court’s decision provided significant insights into the scope of the Scottish Parliament’s legislative competence under the Scotland Act 1998. It upheld that while the Parliament’s Acts are in principle open to judicial review, challenges based on irrationality or unreasonableness are not permissible unless they contravene specific statutory or constitutional limits.
  2. Implications for Human Rights and Property Rights: The case also explored the intersection of domestic legislation with human rights protected under the European Convention, particularly the right to property. It established that legislative measures, even if potentially affecting economic interests, must be viewed within a broader context of social justice and public interest, thereby supporting the Parliament’s decision to legislate on social health issues like asbestos-related conditions.
  3. Influence on Subsequent Judicial Reviews: The principles articulated in this case have influenced subsequent judicial reviews involving legislative actions. For instance, in R (UNISON) v Lord Chancellor [2017], the Supreme Court applied the reasoning from AXA to assess the proportionality and fairness of employment tribunal fees, emphasizing the importance of access to justice as a fundamental right. Similarly, in R (Miller) v Secretary of State for Exiting the European Union [2017], the court considered the limits of executive power in the context of statutory and constitutional provisions, drawing on the doctrines outlined in AXA regarding legislative competence and judicial oversight.

Exam Questions and Answers

Below you will find answers to questions that are most commonly asked based on this case.

How do the principles established in AXA impact the drafting of future public health legislation by the Scottish Parliament?

The AXA case reinforces that Scottish Parliament must consider the broader implications of public health legislation, ensuring compliance with statutory and constitutional boundaries while balancing individual rights with public interest. This impacts future legislation, necessitating thorough consideration of public health needs against potential economic impacts, as seen in the subsequent careful drafting of health-related measures like the Alcohol (Minimum Pricing) (Scotland) Act 2012.

What are the broader implications of AXA for the division of powers between the UK Parliament and the devolved administrations?

The AXA ruling clarifies the extent of legislative competence of devolved administrations, affirming that while they have broad powers, their actions remain subject to judicial review and must respect constitutional limits. This case serves as a precedent in maintaining a balance of power, ensuring that devolved legislatures do not exceed their powers as delineated under statutes like the Scotland Act 1998.

In what ways does the AXA ruling affect the protection of economic interests against public policy legislation in the UK?

The AXA case illustrates that while economic interests are important, they can be overridden by public interest considerations, especially in matters of public health or safety. This precedent suggests that UK courts may support legislation that adversely affects economic interests if it significantly benefits public welfare, as seen in subsequent challenges to legislation impacting business operations, where public interest has been deemed paramount.