Readers will be aware that there have been two subsidy control cases before the Courts this year. The Divisional Court gave judgment in the Bulb litigation (R (British Gas Trading Ltd and others) v Secretary of State for Energy Security and Net Zero [2023] EWHC 737 (Admin)) on 31 March 2023. My analysis of that decision, and its implications for the Subsidy Control Act regime, is found here.
On 27 July 2023, the Competition Appeal Tribunal (the CAT) gave judgment in The Durham Company Limited v Durham County Council [2023] CAT 50. A discussion of this decision can be seen in the previous edition of this newsletter, here.
Is this litigation now at an end? The answer: not quite.
The Divisional Court refused permission to appeal in Bulb, and the Court of Appeal has taken a long time to consider the further application for permission to appeal to that Court. On 12 October 2023, the Court of Appeal adjourned the application for permission to an oral hearing, which has been listed on 19 December 2023. Whipple LJ directed a hearing to focus on the issue of delay, noting that if permission is refused on that ground, the remaining grounds of challenge must fall away. The Applicants have also been asked to explain the remedy that they seek, given that Bulb’s customers have already transferred to Octopus.
However, The Durham Company litigation has now come to an end. The Applicant applied for permission to appeal from the CAT. The CAT refused that application on 11 October 2023, and its reasons are found here.
The CAT concluded that an appeal had no real prospect of success. Ground 1 sought to challenge the CAT’s conclusion that a person that is a public authority cannot grant itself a subsidy. As this was not a case where the CAT was in any doubt about this interpretation of the Subsidy Control Act, it refused permission. In any event, the CAT concluded any appeal on this ground would have failed given the CAT’s alternative findings as to why there was no subsidy. The CAT characterised the grounds of appeal challenging those alternative findings as impermissible challenges to the CAT’s factual findings, noting that on a judicial review basis, the answer to the question as to whether a subsidy arose was clear. Finally, the CAT concluded that there was no other compelling reason why permission to appeal should be granted, noting that there will be other subsidy control cases raising the point in ground 1 more cleanly, and there may be a compelling reason to give permission to appeal in relation to the issues raised by that ground in another case.
The Applicant has not renewed the application for permission before the Court of Appeal, and so that is now the end of the matter. So, aside from its judgment on the costs-capping issue, the Court of Appeal will not get the opportunity to weigh in on the first case under the Subsidy Control Act. In my view, the decision as to whether there was a subsidy in this case was plainly right, and the judgment gives helpful guidance to parties to work with in future cases. However, there are some doubts about the CAT’s approach to subsidy schemes, and so it remains to be seen whether this point will be revisited in future cases.
