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Mr Justice Ouseley has handed down his judgement in the case of Licensed Private Car Hire Association) v Transport for London.  The LPHCA was given permission by Mr Justice Dingemans on 7 February 2018 to challenge the very substantial increases in the licence fees for Private Hire Operators in London, which were imposed by TfL with effect from 3 October 2017.

The LPHCA sought to challenge TfL’s decision on two bases:

(1) the consultation process was unlawful because TfL failed to provide adequate information to permit of an informed response on the financial basis for the changes; whether the information was adequate or not rather depends, as the arguments evolved, on what the true scope of the consultation was;

(2) the apportionment of additional costs to private hire operators, rather than more to taxis, and to private hire drivers and vehicles, was unlawful because it involved a cross-subsidy from private operators to other licensees; the issue was whether such a cross-subsidy in fact was created. It was not at issue but that a cross-subsidy would have been unlawful.

Dingemans J refused permission for the LPHCA to argue other grounds of challenge to the consultation process such as inadequacy of time and inadequate consideration of the responses, and to the changes to the fee structure, notably bias and irrationality.

The determination of the first point of challenge was determined on its facts.  The LPHCA sought to persuade Ouseley J that the TfL consultation was unlawful because it failed to provide sufficient information when requested. This inhibited its ability to submit a thorough consultation response.

Ouseley J, in rejecting the argument advanced by LPHCA, said: “In my judgment, the question of whether sufficient reasons were given for the proposals to permit respondents to give intelligent consideration to them and to respond, depends on what the scope of the consultation was. As the consultation document makes clear, it was not about the hiring of 250 compliance officers nor about the £209m budget for licence and compliance costs over the next five years. It did not directly relate to taxi licence fees, nor to the fees charged to drivers or in respect of vehicles. Although those aspects are referred to in the consultation paper, and are part of the background to the changes, to enable consultees to see the context in which the proposals are being made, they are not themselves the subject of the consultation. No justifiable complaint can be made that no further information was provided about the total £209m or about taxi or driver or vehicle licence fees as such. The Claimant had also sought information in a very general way. Indeed, the Claimant’s information requests seemed to focus on the wider justification for the increases to the budget rather than on the specific issue of the two stages of apportionment, first to private hire, and second to private hire operators.”

The LPHCA also argued that the approach taken by TfL was unlawful because it in essence created a situation where the higher licence fees payable by the licensed operator will cross-subsidise other licensees.

Ouseley J had already spelt out the legal principles that applies to the cross-subsidisation of licence fees earlier in his judgement.

“As I have said, it was not at issue but that the fees charged for operator’s licences could not lawfully include any element of cross-subsidy whether for private hire vehicles or their drivers, or for black cabs or their drivers. The same principle applied across the five strands of fees; it was not peculiar to operators’ licence fees.

“The agreement that fees from one taxi or private hire licensing strand cannot be used to subsidise the level of fees on another of the five strands is reflected in a considered concession by leading counsel, accepted by Hickinbottom J in R (Cummings) v Cardiff City Council [2014] EWHC 2544 (Admin)…”

He said: “That accusation, that TfL have in fact deliberately achieved a cross-subsidy while denying it in its words, is not justified.

“What TfL have done is to produce a reasonable method, with some evidence, to which reasoned judgment has been applied. It has not been shown to be wrong on its face, and on the analysis which I have had, I am not persuaded that there is any unlawful subsidy. If the Mayor did intend to convey that operators would pay a fee for costs which properly belonged to taxis or drivers or vehicles, the TfL officers have not in fact carried through any such intention. It would have been unlawful, had they done so.

“But I see nothing strange let alone sinister in that. Rather I see an intention to produce lawful fee structure in the desire expressed to put forward a methodology which “can be robustly justified if challenged by internal and external stakeholders”.”

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