I contract, therefore I am: the Third Source Powers of Government Entities: Part Two

In my previous post, I laid out the details of the New London College case and some disagreement amongst the judges of the UK Supreme Court about third source powers. In this post I address the caveat I referred to previously and the possibility that third source powers can be statutory in nature.

Mark Elliott queries whether these powers can properly be described as statutory, as Lord Sumption suggests:

This is very odd, and suggests some muddled thinking about the source—and therefore the nature—of the power being exercised. If the power in question derives from statute, then it is not clear, for example, why it should not be possible to adopt “measures which are coercive”. If the correct construction of the statute were that the adoption of such measures were lawful, then such measures would indeed be lawful. Equally, if the statute, corrected construed, were to authorize the taking of measures that infringed the legal rights of others, then the taking of such measures would be lawful.

Adopting the prevailing view in England and Wales that the "third source" lies in the nature of the Crown as a corporation sole, Mark is right to say that Lord Sumption's thinking is muddled. If third source powers, exercisable by ministers and other government bodies, spring from the general existence of the Crown then the 1971 Act is entirely irrelevant unless proposed exercises of third source powers are inconsistent with it.

An alternative view, however, is that all government entities created by statute enjoy a category of power which is neither express nor implied. Third source powers, on this reading, spring from the creation of an administrative body and the vesting of decision-making authority in it. There are express powers, necessarily implicit powers, and the powers an analogous private body would have to go about its daily affairs. On a generous reading of Lord Sumption's judgment (especially at para. 28), he takes this view. (At this point, the "third source" label becomes inapt, because we are no longer talking about a power distinct from statute and prerogative, but I will persist with it for the sake of convenience; and I suppose I am proposing a tripartite division between the express, the implicit and the inherent.)

One advantage of this view it provides a further limitation on the use of third source powers. If the third source is located in specific statutes, the powers springing from it can only be used to further the objects of those statutes. No such restriction applies to powers exercisable by the Crown as a corporation sole. A contract could be ultra vires a statute, but not the third source. And it would be strange, though presumably theoretically possible if the third source lies in the Crown as a corporation sole, if a minister (or administrative body) responsible for one statutory scheme could lawfully issue a set of guidelines pertaining to a scheme under the jurisdiction of another minister.

Moreover, this view does not depend on the characterization of the Crown as a corporation sole. In England and Wales, several administrative bodies are also corporations sole. From whence do their third source powers spring? Are they limited by reference to their empowering statutes, in a way that third source powers exercisable by other bodies are not? In Ireland, government ministers are corporations sole: are they to be treated differently from other administrative bodies which exercise similar functions? And let us be honest: if the Crown were not seen as a corporation sole, would this make any difference to the analysis? Indeed, when Bruce Harris wrote his seminal article on the third source in 1992 (108 L.Q.R. 626), the prevailing view was that the Crown was not a corporation sole (M. v. Home Office [1992] Q.B. 270 (C.A.)).

On a less generous reading of Lord Sumption's judgment, he is actually offering an example of the dangers of what I previously described as option one by giving the minister a very broad range of implied powers: "ancillary and incidental" though not "spelt out" (see again para. 28). But if so, as Mark points out, there is no reason to limit the use of the powers to non-coercive measures and Lord Sumption ends up in a muddle in para. 29.

In my next post, I will try to give some practical examples which demonstrate the utility of recognizing that third source powers can be located in statute. I do not insist that I am right, but I think the possibility of a statutory third source is worth considering!