Court of Appeal gives guidance on scope of EU law principle of foreseeability and legitimate expectations

27/10/16

On 21 October 2016, the Court of Appeal gave judgment in Infinis Energy Holdings Limited v HM Treasury and HMRC [2016] EWCA Civ 1030.

Infinis sought judicial review of a decision to remove the Renewable Source Electricity (“RSE”) Exemption to the Climate Change Levy with practical immediacy in July 2015. The decision was expected to save approximately £4 billion over the life of the Parliament. Infinis challenged that decision on the basis that it was contrary to the EU legal principle of foreseeability/legitimate expectation, the EU law principle of proportionality, and Infinis’ Article 1 Protocol 1 ECHR rights. Infinis contended that the removal of the RSE Exemption was unforeseeable, particularly in circumstances where the level of other renewable energy support schemes had been calculated on the assumption that the RSE Exemption would continue to exist.

That claim was rejected by Jay J, who nevertheless considered that there was a divergence in the Luxembourg authorities as to whether an express promise or assurance was required to make out a claim in legitimate expectation in EU law (as it is in domestic law), or whether some broader test of fairness applied.

The Court of Appeal dismissed Infinis’ appeal, but in doing so clarified the scope of the EU law principle of foreseeability/legitimate expectation. It held that the authorities demonstrated a consistent and clear requirement for an express assurance or promise, or something tantamount thereto. This suggests that the approach to determining whether a legitimate expectation is made out in EU law is essentially the same as that for determining whether a legitimate expectation is made out in domestic law.

The judgment appears here.