UK: Failure to consult upon a viable alternative option can be procedurally unfair

The High Court in R (on the application of United Company Rusal plc) v. The London Metal Exchange [2014] EWHC 890 (Admin) held that a recent consultation carried out by the London Metal Exchange ("LME") was procedurally unfair, primarily because of the failure to consult upon a viable alternative option.     

Key points

• The general rule is that a decision maker is entitled to narrow the range of options to be consulted upon, prior to the commencement of the consultation process (i.e. the decision maker does not have to consult upon each and every potential option) so long as the proposed course has not been decided upon and can still be influenced by the consultation process.
• However, in exceptional circumstances, procedural fairness may require that the decision maker must consult upon specific options which have been dismissed prior to the commencement of the consultation process.

We review the case in more detail in this briefing by our administrative and public law team.

The LME reportedly intends to seek leave to appeal from the Court of Appeal, having been initially refused leave by the High Court last month.  The other measures which the LME announced on 7 November 2013 continue to be implemented as planned, including warehouse logistical review, the Warehouse Agreement legal review, the LME’s enhanced powers to address artificial queue formation, per-Warehouse data publication, a Commitments of Traders Report, further market engagement on a potential premium hedging contract, the formation of a Physical Markets Committee, a review of the LME’s best-practice information barrier policy, and a separate load-out rate for steel.