Introduction
The Human Rights Act 1998 (the "Act"), which incorporates the European Convention on Human Rights (the "Convention"), received royal assent on 9 November 1998 although indications from the Home Secretary are that it will not be enacted for some time yet, (probably January 2000).
It is a popular misconception that this Act will not directly affect businesses. This is a fallacy - the Convention will have a profound impact on the commercial world. It gives important rights to companies, directors and shareholders and also creates new duties for the business community. More generally, it is expected to bring about significant shift in judicial thinking as the effects permeate the UK court system at every level.
Background
The UK ratified the European Convention on Human Rights in 1951 but unlike most European states never incorporated it into UK law. Individuals in the UK could enforce their rights under the Convention only by incurring the cost and delay in taking the case to the European Human Rights Commission in Strasbourg. The Convention is now directly enforceable in the UK courts. The Act also allows applicants to apply directly to the European Court of Human Rights (the "European Court") although it is necessary to exhaust all domestic remedies first. The European Court has been remodelled as a Permanent Court with 40 judges from 1 November 1998 and the two stage procedure, (under which a complaint first had to be accepted by the Commission before being referred to the European Court - a procedure that could take 5 - 6 years) has been abolished.
The Convention Rights
The main rights covered by the Convention and the Protocols ratified by the UK are:
The Protocol ratified by the UK adds the following rights:
These rights can be enforced not just by individuals but also by companies. Anyone can challenge the decision of a public authority which is widely defined to include courts, tribunals, government ministers (but not in connection with parliamentary proceedings), government departments, local authorities, privatised utilities, regulatory bodies and any person whose functions are of a "public nature".
Key Elements of the Act
The Act gives effect to the Convention by making it unlawful for public authorities to act in any way incompatible with the Convention. It enables public authorities to be challenged in any court and at any level. A human rights challenge can be brought by a victim in the course of other legal proceedings and it is also possible to bring a case on Convention grounds alone.
The Act requires public authorities to read and give effect to primary and subordinate legislation in a way which is compatible with the Convention. Similarly, the courts will be required to interpret UK legislation so far as possible to achieve compatibility with Convention rights. This requirement is the same as the requirement under EC law for the courts to interpret legislation implementing EC obligations in accordance with EC law.
All Courts will be required to take account of the relevant case law of the European Commission and the European Court. This, however, is not binding. Although incompatible primary legislation cannot be struck down, specified courts may make a "Declaration of Incompatibility". The Act has set up a fast track procedure for amending incompatible primary legislation. For each new Bill the Government is required to indicate to Parliament whether its provisions are compatible with the Convention rights.
The Impact on Commercial Practice
Commercial practice will be affected, in particular, by the following articles:
This provides a right of access to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. It includes hearings before any tribunal, including disciplinary and other regulatory bodies, (such as the new Financial Services Authority and the Civil Aviation Authority). The right to a fair trial has been interpreted as including both the right to remain silent and the privilege against self incrimination. Shareholders (including minority shareholders) may invoke Article 6 to challenge a breach of the right to a fair and impartial hearing within a reasonable time. Directors may also apply as applicants under Article 6 of the Convention. In a recent case involving Ernest Saunders, the European Court held that, as Mr Saunders had been forced to give statements to DTI inspectors regarding allegations of illegal share dealings, there had been an unjustifiable infringement of his right not to incriminate himself when those statements were later extensively used in criminal proceedings.
The effect of the Convention on the proposed new Ombudsman scheme for banking, insurance and investment business is currently under scrutiny as are the proposed enforcement procedures of the new Financial Services Authority.
The right to respect for private life, home and family might seem at first glance to be irrelevant to commercial matters. However, "home" has been widely interpreted by the European Court to include business premises. In the case in question, documents were seized from the business premises of a lawyer. The European Court found that this had violated the lawyer's right under Article 8. However, the Court held that the state can interfere with such rights only if the interference is proportionate, in accordance with the law and necessary in a democratic society because of pressing social needs.
Article 8 will affect investigations conducted by the Financial Services Authority and Serious Fraud Office Prosecutions which provide for compulsory powers to search offices. Similarly, the seizure of documents under the new Competition Act 1998 is also likely to be an important issue under this Article. Article 8 may also result in stricter privacy laws on newspaper reporting.
This will have an impact on the media and the freedom of the press but the Article ranges beyond this. Advertising also within the scope of the provision as well as challenges to broadcasting monopolies.
The Article expressly provides that it applies to both "natural and legal persons". In the jurisprudence of the European Court the term "possessions" has been very widely interpreted to include:
Some forms of taxation have also been challenged on the basis of the right to peaceful enjoyment of property. Applications under this Article have included unsuccessful challenges to provisions in a Finance Act designed to close off a tax avoidance scheme and to a Swedish law imposing a windfall tax on certain insurance companies. While these challenges were unsuccessful, the European Court does have the authority to examine taxes and consider whether or not the basis upon which they are imposed is compatible with the Convention.
Article 1 also affects on planning and environmental law. Planning decisions have been challenged under this Article as have decisions with an environmental element.
In an application against France, complaining that the construction of a nuclear power station on the banks of the Loire opposite the applicant's 18th century house violated Article 1, the Commission held that, while the Article did not guarantee the right to enjoy possessions in a pleasant environment, noise nuisance of a particular severity could constitute an interference with possessions.
The Human Rights Act 1998 (the "Act"), which incorporates the European Convention on Human Rights (the "Convention"), received royal assent on 9 November 1998 although indications from the Home Secretary are that it will not be enacted for some time yet, (probably January 2000).
It is a popular misconception that this Act will not directly affect businesses. This is a fallacy - the Convention will have a profound impact on the commercial world. It gives important rights to companies, directors and shareholders and also creates new duties for the business community. More generally, it is expected to bring about significant shift in judicial thinking as the effects permeate the UK court system at every level.
Background
The UK ratified the European Convention on Human Rights in 1951 but unlike most European states never incorporated it into UK law. Individuals in the UK could enforce their rights under the Convention only by incurring the cost and delay in taking the case to the European Human Rights Commission in Strasbourg. The Convention is now directly enforceable in the UK courts. The Act also allows applicants to apply directly to the European Court of Human Rights (the "European Court") although it is necessary to exhaust all domestic remedies first. The European Court has been remodelled as a Permanent Court with 40 judges from 1 November 1998 and the two stage procedure, (under which a complaint first had to be accepted by the Commission before being referred to the European Court - a procedure that could take 5 - 6 years) has been abolished.
The Convention Rights
The main rights covered by the Convention and the Protocols ratified by the UK are:
- the right to life, liberty and security of person (Articles 2 & 5)
- the prohibition of torture, inhuman or degrading treatment or punishment(Article 3)
- freedom from slavery, servitude and forced labour (Article 4)
- the right to a fair trial in civil and criminal matters (Article 6)
- prohibition of criminal laws that are retroactive (Article 7)
- respect for private and family life, home and correspondence (Article 8)
- the prohibition of discrimination in the enjoyment of rights and freedoms guaranteed by the Convention (Article 14)
- freedom of thought, conscience and religion (Article 9)
- freedom of expression (Article 10)
- freedom of peaceful assembly and association, including the right to join a trade union (Article 11)
- the right to marry and have a family (Article 12)
The Protocol ratified by the UK adds the following rights:
- the right to peaceful enjoyment of possessions (Article 1 of Protocol 1)
- the right to education (Article 2 of Protocol 1)
- the right to free elections by secret ballot (Article 3 of Protocol 1)
These rights can be enforced not just by individuals but also by companies. Anyone can challenge the decision of a public authority which is widely defined to include courts, tribunals, government ministers (but not in connection with parliamentary proceedings), government departments, local authorities, privatised utilities, regulatory bodies and any person whose functions are of a "public nature".
Key Elements of the Act
The Act gives effect to the Convention by making it unlawful for public authorities to act in any way incompatible with the Convention. It enables public authorities to be challenged in any court and at any level. A human rights challenge can be brought by a victim in the course of other legal proceedings and it is also possible to bring a case on Convention grounds alone.
The Act requires public authorities to read and give effect to primary and subordinate legislation in a way which is compatible with the Convention. Similarly, the courts will be required to interpret UK legislation so far as possible to achieve compatibility with Convention rights. This requirement is the same as the requirement under EC law for the courts to interpret legislation implementing EC obligations in accordance with EC law.
All Courts will be required to take account of the relevant case law of the European Commission and the European Court. This, however, is not binding. Although incompatible primary legislation cannot be struck down, specified courts may make a "Declaration of Incompatibility". The Act has set up a fast track procedure for amending incompatible primary legislation. For each new Bill the Government is required to indicate to Parliament whether its provisions are compatible with the Convention rights.
The Impact on Commercial Practice
Commercial practice will be affected, in particular, by the following articles:
- Article 6 - the right to a fair hearing.
This provides a right of access to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. It includes hearings before any tribunal, including disciplinary and other regulatory bodies, (such as the new Financial Services Authority and the Civil Aviation Authority). The right to a fair trial has been interpreted as including both the right to remain silent and the privilege against self incrimination. Shareholders (including minority shareholders) may invoke Article 6 to challenge a breach of the right to a fair and impartial hearing within a reasonable time. Directors may also apply as applicants under Article 6 of the Convention. In a recent case involving Ernest Saunders, the European Court held that, as Mr Saunders had been forced to give statements to DTI inspectors regarding allegations of illegal share dealings, there had been an unjustifiable infringement of his right not to incriminate himself when those statements were later extensively used in criminal proceedings.
The effect of the Convention on the proposed new Ombudsman scheme for banking, insurance and investment business is currently under scrutiny as are the proposed enforcement procedures of the new Financial Services Authority.
- Article 8 - the right to respect for private and family life, home and correspondence.
The right to respect for private life, home and family might seem at first glance to be irrelevant to commercial matters. However, "home" has been widely interpreted by the European Court to include business premises. In the case in question, documents were seized from the business premises of a lawyer. The European Court found that this had violated the lawyer's right under Article 8. However, the Court held that the state can interfere with such rights only if the interference is proportionate, in accordance with the law and necessary in a democratic society because of pressing social needs.
Article 8 will affect investigations conducted by the Financial Services Authority and Serious Fraud Office Prosecutions which provide for compulsory powers to search offices. Similarly, the seizure of documents under the new Competition Act 1998 is also likely to be an important issue under this Article. Article 8 may also result in stricter privacy laws on newspaper reporting.
- Article 10 - the right to freedom of expression.
This will have an impact on the media and the freedom of the press but the Article ranges beyond this. Advertising also within the scope of the provision as well as challenges to broadcasting monopolies.
- Article 1 of the Protocol - the right to peaceful enjoyment of possessions.
The Article expressly provides that it applies to both "natural and legal persons". In the jurisprudence of the European Court the term "possessions" has been very widely interpreted to include:
- company shares
- patents
- goodwill in a business
- licences to sell alcoholic beverages if vital to an applicant's business
- arbitration awards
Some forms of taxation have also been challenged on the basis of the right to peaceful enjoyment of property. Applications under this Article have included unsuccessful challenges to provisions in a Finance Act designed to close off a tax avoidance scheme and to a Swedish law imposing a windfall tax on certain insurance companies. While these challenges were unsuccessful, the European Court does have the authority to examine taxes and consider whether or not the basis upon which they are imposed is compatible with the Convention.
Article 1 also affects on planning and environmental law. Planning decisions have been challenged under this Article as have decisions with an environmental element.
In an application against France, complaining that the construction of a nuclear power station on the banks of the Loire opposite the applicant's 18th century house violated Article 1, the Commission held that, while the Article did not guarantee the right to enjoy possessions in a pleasant environment, noise nuisance of a particular severity could constitute an interference with possessions.
This note is intended to provide general information about some recent and anticipated developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained.
