Thursday, 12 July 2012
EVENTECH LTD (Addison Lee) v THE PARKING ADJUDICATOR
Case No: CO 10424/2011
Neutral Citation Number:  EWHC 1903 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR JUSTICE BURTON
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THE PARKING ADJUDICATOR
(1) LONDON BOROUGH OF CAMDEN
(2) TRANSPORT FOR LONDON
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Ms Marie Demetriou QC and Ms Kelyn Bacon (instructed by Maitland Walker LLP) for the Claimant
Mr Martin Chamberlain and Ms Sarah Love (instructed by Transport for London) for the Second Interested Party
Hearing dates: 19, 20 and 21 June 2012
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Mr Justice Burton :
1. The Claimant company, Eventech Ltd, is an associated company of Addison Lee plc (“Addison Lee”) which operates a fleet of private hire vehicles (“PHVs”) – colloquially known as minicabs – in Greater London, and is the registered keeper of all Addison Lee’s PHVs, which are leased out by Addison Lee to self-employed drivers.
2. Addison Lee is the operator, licensed by Transport for London (“TfL”) pursuant to the Private Hire Vehicles (London) Act 1998 (“the 1998 Act”), of some 2900 minicabs, the largest fleet of PHVs in Greater London.
3. TfL is a statutory body created by the Greater London Authority Act 1999 (“the 1999 Act”). It has the function, by ss141 and 154 of the 1999 Act, of promoting and encouraging safe, integrated, efficient and economic transport facilities and services to, from and within London. Its duties include securing the provision of public passenger transport services (including bus services) to, from or within Greater London. TfL is also by s121A(1A) of the Road Traffic Regulation Act 1984 (“the 1984 Act”) the traffic authority for every Greater London Authority (“GLA”) road and, as such, has responsibility for the designation of bus lanes on those roads. The GLA roads account for 5% of London’s roads, but for 38% of its bus lanes, being situated in those parts of central and inner London where congestion is heaviest and where buses (carrying 5.8 million passengers every weekday) are most likely to be affected by traffic congestion. TfL is also responsible, pursuant to ss253 and 254 (and Schedules 20 and 21) of the 1999 Act, for all licensing and monitoring activities in relation to minicabs and to hackney carriages. The latter is the historical and statutory term (derived, it seems, from the London village of Hackney, famed for its horses and horse-drawn carriages) for what are now commonly known as taxis or ‘black cabs’.
4. The issue in this case arises between the Claimant, for whom Marie Demetriou QC has appeared with Kelyn Bacon, and TfL as Second Interested Party, represented by Martin Chamberlain and Sarah Love. It consists of a challenge by the Claimant to the policy of TfL and London boroughs whereby, whereas black cabs are permitted to drive in most London bus lanes, minicabs are permitted to drive in none during their hours of operation, save to pick up or set down pre-booked passengers (“the Bus Lane Policy”). Such policy is claimed by the Claimant to offend against the European Union (EU) right of freedom to provide services (Article 56 of the Treaty on the Functioning of the European Union as consolidated (“TFEU”)) and of freedom of establishment (Article 49 TFEU) and/or the EU general principle of equal treatment, to be Wednesbury unreasonable at common law and/or to amount to favourable treatment of black cabs as against minicabs, such as to constitute unlawful State Aid, contrary to Article 107 TFEU.
5. The challenge arises out of two penalty charge notices (“PCNs”), issued on 13 and 20 October 2010, against the Claimant, in respect of the use of a PHV owned by the Claimant in the Southampton Row bus lane, issued by the London Borough of Camden, which was taken to appeal by the Claimant before the Parking Adjudicator. Before the Parking Adjudicator, the Claimant challenged the validity (on the above basis) of Article 3 of the Camden Bus Lanes (No 1) Traffic Order 2008 (“the Camden Order”). The Parking Adjudicator concluded that he did not have jurisdiction to disapply Article 3, and was not required to determine a potential conflict of domestic and EU law, but was only permitted to enforce the Order, and handed down his Decision dismissing the appeal on 16 August 2011. This application was issued by the Claimant on 16 December 2011, and permission to apply for judicial review was granted by Mr Michael Kent QC, sitting as a deputy judge, on 2 March 2012.
6. Neither the Parking Adjudicator (joined as Defendant) nor the London Borough of Camden (First Interested Party) has taken any part in these proceedings, which have been defended by TfL as Second Interested Party. It is common ground between the parties before me, and rightly so, that the Parking Adjudicator erred in his approach, and that, as an emanation of the State, such a tribunal should have considered the Claimant’s arguments as to the validity of the Camden Order under both EU and domestic law. Accordingly, to that extent, it is in any event the case that the decision of the Defendant Parking Adjudicator cannot stand, and that this Court is obliged to consider the validity of the Camden Order in these proceedings. The parties have agreed that any submissions on remedy be held over until after the Court has determined the issues as to validity.
7. A traffic authority responsible for a particular road has the power to restrict traffic on that road, or part of it, to certain types of vehicles, and thus to designate bus lanes, under s6 of the 1984 Act, and under that section the Camden Order was adopted, which designated a number of bus lanes, including the Southampton Row bus lane. Article 3(1) of the Camden Order prescribes as follows:
“No person shall cause a vehicle to be in a bus lane in any length of road specified in an item in Column (2) of the table in the schedule to this order during the time specified in that item in Column (3) of that item unless that vehicle was proceeding in the direction specified in Column (4) of that item and is of a type specified in Column (5) of that item.”
The Schedule to the Camden Order specifies that the Southampton Row bus lane is available to a vehicle that is a bus, a Dial-a-Ride bus, a pedal cycle or a “taxi”. Article 2 of the Order specifies that the word taxi has the meaning given in the Traffic Signs Regulations and General Directions 2002 (“the 2002 Regulations”).
8. It is therefore to those Regulations that one must look for a definition of the taxi thus permitted to use the Bus Lane, and that is contained in Regulation 4 of the 2002 Regulations, so far as England and Wales is concerned by subclause (a), as:
“A vehicle licensed under –
(i) s37 of the Town Police Clauses Act 1847; or
(ii) Section 6 of the Metropolitan Public Carriage Act 1869 [“the 1869 Act”]; or under any similar enactment. ”
9. Those sections referred to hackney carriages that are licensed to ply for hire. Black cabs are licensed under the provisions set out in the London Cab Order 1934 (“the London Cab Order”), adopted pursuant to the 1869 Act, which provides, in s8(2), that no hackney carriage “may ply for hire” within the Metropolitan Police District and the City of London unless under the charge of a driver licensed under s8, now by TfL. Thus, only a black cab, licensed under the London Cab Order, is permitted to “ply for hire” in London. There is no statutory definition of those words, but at common law it is interpreted (see Sales v Lakes and others  1 KB 553 at 557-558 per Lord Trevithin CJ), as meaning soliciting or waiting for passengers without a prior booking. Thus, although black cabs can be pre-booked (and according to a 2009 survey 8% of black cab journeys are indeed pre-booked), only black cabs can be hailed from the road or wait in taxi ranks for a pick-up.
10. Minicabs are thus not taxis for the purpose of the 2002 Regulations. They are licensed separately under the 1998 Act, are not permitted to ply for hire in London and may only take passengers who have pre-booked through the operating centre specified in the relevant licence.
11. There are approximately 23,000 black cabs licensed by TfL. The licensing regime, contained primarily in the 1869 Act and the London Cab Order, requires compliance by the registered keeper of a black cab with detailed standards set out in the London Cab Order and prescribed by the Conditions of Fitness 2007 (as amended). There are approximately 50,000 minicabs and 60,000 individual drivers licensed by TfL, primarily pursuant to the 1998 Act.
12. It is important at this stage to set out the material differences between mini-cabs and black cabs. A Law Commission Consultation Paper issued earlier this year (No 203) described the “two-tier licensing system” justified by “the very different characteristics” of the pre-booked market and the market for hailing and picking up at ranks:
i) As set out in paragraph 9 above, only black cabs can ‘ply for hire’ without pre-booking.
ii) Black cabs are subject to “compellability”, dating from the London Hackney Carriage Acts 1831 and 1853, which requires that where a black cab at a rank or in the street accepts a passenger, the taxi must take the passenger anywhere that he wishes to go, within a prescribed distance or up to a prescribed journey time. There is no such ‘cab rank’ obligation on a minicab.
iii) Black cabs are instantly recognised by reason of their shape and size and the illuminated TAXI sign. This is because they must comply with the Conditions of Fitness (“CoF”), which contain a number of standards (including the requirement for the illuminated sign). Currently only two vehicle makes comply with the CoF. Minicabs can be of any colour and any design: there are some 700 different makes and models of vehicles presently licensed.
iv) The fares of black cabs are strictly regulated and can only be charged by reference to a taxi meter. Minicabs are free to charge their own fares and are not metered. According to Mr Griffin, the founder and chairman of Addison Lee, Addison Lee’s fares are on average 35% cheaper than black cabs: the fare to be paid is quoted when the minicab is booked, irrespective of the duration of the journey, while black cab fares will of course vary depending upon the length of time that the journey takes.
v) Black cabs are required to be adapted for wheelchair access. There are no accessibility requirements for minicabs.
vi) Before being licensed, black cab drivers must undertake the “Knowledge of London” examination process, which can take two to four years to prepare for (“the Knowledge”). Minicab drivers must before licensing undertake a topographical test, which generally takes a day. Addison Lee voluntarily imposes more extensive training on their drivers, by a short attendance at their driver training school. Black cab drivers must pass the Driving Standards Agency Advanced Driving Assessment: there is no similar requirement for minicab drivers.
13. It is common ground that bus lanes are of considerable importance. The Claimant accepts, in paragraph 89 of its skeleton argument, that it does not in any way challenge TfL’s claim as to the importance of bus lanes to London’s transport system and the resulting improvement in journey times and reliability of service for bus passengers. TfL’s Bus Lane Policy has been in place since before its own creation in 2000, and the TfL Public Carriage Office Taxi and Bus Lanes Policy (2007) records that the policy is to “allow for taxis in all bus lanes unless their inclusion would cause significant delay to buses or would materially worsen the safety of road users including pedestrians, and taking account of the effects on safety of excluding taxis from the bus lane”. This latter aspect relates to the fact that taxis (black cabs) can be hailed by pedestrians from the pavement – according to the 2009 survey referred to in paragraph 9 above, 52% of taxi journeys result from passengers hailing them in the street.
14. An exception has thus been made to the reservation of bus lanes to buses, to include black cabs. That is where the line has been drawn (in respect of four-wheeled vehicles) by TfL. The Claimant asserts that the exception should be extended to include minicabs, and that a policy which does not do so falls to be challenged on the grounds set out in paragraph 4 above.
15. Evidence has been given by Mr Griffin, on behalf of the Claimant, and by Mr Ben Plowden, the Director of Planning, Surface Transport, employed by TfL. A report, dated 14 May 2012, for the purposes of this hearing, has been prepared for TfL by the Transport Modelling Consultancy SKM Colin Buchanan (“the SKM Report”). Although the Claimant has submitted a review of that report by the Transport Consultancy Waterman Boreham, which makes certain criticisms of the modelling and methodology in the SKM Report, Ms Demetriou has taken the sensible advocate’s course of putting her submissions for the Claimant primarily on the basis of TfL’s own report, i.e. accepting its contents for the purposes of such submissions. Since TfL expressly only relied upon the SKM Report to give a ‘partial insight at best’, the bulk of the Report, and in any event the Claimant’s critique of it and TfL’s response, contained at some length in Counsels’ skeleton arguments, did not, in the event, feature in the hearing.
The Claimant’s Case
16. The case for the Claimant is that the rule that minicabs cannot drive in London bus lanes is a restriction, and one which has the effect that their (fixed fare) journeys are likely to take longer in congested areas than those of black cabs. Such a restriction, imposed by Regulation, cannot be challenged at English common law unless it is Wednesbury unreasonable, but can be challenged if it comes within the ambit, and falls foul, of an applicable European rule or requirement, which will apply – put broadly – if there is a European or intra-Union trade element. Thus if a national of one Member State has restrictions imposed upon him in another Member State – even though they are the same restrictions as are imposed on the national of that other Member State (it is not necessary for the restriction to discriminate on grounds of nationality) – then he can complain of that restriction, even though a national of the home state who is equally restricted cannot complain. Hence a restriction on (for example) a grocery in Shropshire which cannot otherwise be complained of can be challenged where that restriction is alleged to have a relevant impact upon nationals of another Member State. That is the primary nature of the complaint by the Claimant, in respect of the restrictions imposed by TfL and other London boroughs on driving in London bus lanes.
17. The Claimant’s case is put:
i) by reliance upon Article 56 TFEU, which provides:
“Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.”
ii) by reliance upon Article 49 TFEU:
“Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited …
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings … under the conditions laid down for its own nationals by the law of the country where such establishment is effected.”
iii) if necessary – if for example Article 56 does not apply (see paragraphs 25 to 28 below) –by reference to the European law principle of Equal Treatment, whereby, in areas otherwise within the scope of EU law, comparable situations must not be treated differently and different situations must not be treated in the same way, unless such treatment is objectively justified.
In each such case, if it applies, TfL can, the onus being upon it, justify the restriction upon grounds permitted by European law (primarily upon grounds other than economic) taking into account considerations of proportionality.
iv) if necessary, on the basis that the restriction is not Wednesbury reasonable at common law – obviously here the Claimant carries the burden of rebutting justification, in the sense that it must show that no reasonable body could have regarded the justification as sufficient.
v) finally, by reference to Article 107 TFEU which provides:
“1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the internal market.”
It is common ground that the disadvantage to the Claimant of not driving in the bus lane is capable of amounting to an economic advantage to its competitor, granted through State resources and/or imputable to the State. The Claimant will need to show that the measure is liable to distort competition and affect trade between Member States, and that it is favouring certain undertakings in a way that is not justifiable by the nature or the general scheme of the Bus Lane Policy imposed by the Regulations (known as the “Selectivity requirement”). If State Aid is established, then it can only be justified and rendered lawful by notification to, and approval by, the European Commission.
Article 56: The Issues
18. The facts relied upon by the Claimant are contained in the evidence of Mr Griffin. He explains that a substantial part of the Claimant’s business consists of the provision of services to persons established in other Member States. Over 100 companies established in other Member States hold corporate accounts with the Claimant, and many UK corporate account holders use the Claimant for employees or visitors arriving from other Member States, and the Claimant provides services to numerous passengers from other Member States who travel to London for business or pleasure. He says that the Claimant’s ability to expand this part of its business and offer more services to persons established in other Member States is hampered by its inability to use London bus lanes. The Claimant’s case is that the journey times are lengthened by virtue of such inability, thus rendering the service less attractive to customers. Black cabs can travel in bus lanes and, while the majority of black cabs is picked up by hailing on the streets or on ranks, 8% of black cab journeys are pre-booked (see paragraph 9 above). Advertisements for black cabs expressly publicise the fact that (for example) “only licensed London taxicabs can use London’s bus lanes to avoid traffic” and “our fully licensed taxis are the only vehicles that can use the fast bus lanes in London, which help you to get to your destination fast and on time”.
19. Mr Griffin explains that, in seeking to expand the provision of minicab services to nationals of other Member States, Addison Lee has developed relationships with PHV operators in other Member States. In particular, the Claimant has reciprocal arrangements with two companies in Paris for the supply both of private hire cars and of minicabs to the customers of those companies upon their arrival in London. The CEO of one of those companies, Cardel Limousine SARL (which supplies car hire and taxi services in the Paris region), has supplied a statement to the effect that many of his customers are regular visitors to London and are aware that black cabs are able to get round London more quickly because they are able to use the bus lanes, and that “clients are often unhappy with the prospect of sitting in traffic while black cabs speed past in the bus lanes”. Mr Maachi’s evidence is that he believes that the number of bookings his company makes with the Claimant would “increase threefold” if the Claimant were able to use the bus lanes. There is also a supportive letter from an English company.
20. Thus the Claimant asserts that there is a restriction upon its freedom to supply minicab services to European potential customers or partners, and that there is a restriction on the freedom of those potential customers to use such minicab services in London.
21. TfL is sceptical about the evidence of Mr Maachi, which originally was contained in a letter commencing “I am happy to confirm that we are unable to pass all of our work to Addison Lee in London as many of our customers are unhappy with the prospect of sitting in traffic while taxis speed past in the bus lanes”, and was only produced as a witness statement during the course of the hearing. They also suggest that the evidence of Mr Griffin exaggerates the difficulties, in particular his statement that “a journey from Kings Cross to Paddington can be up to 30 minutes quicker if the bus lanes are used”.
22. So far as the law is concerned, an actionable restriction on the freedom to provide services:
i) does not have to be discriminatory on grounds of nationality.
ii) applies to restrictions on the provision of services by a national of the home State to nationals of another Member State, as well as to restrictions on the receipt of services by the latter.
iii) can be complained of by an undertaking against the Member State in which it is established.
23. As to (i) above, see Kraus v Land Baden-Württemberg  ECR I-1663 at para 32 (“even though [the measure] is applicable without discrimination on grounds of nationality”, Konsumentombudsmannen v Gourmet International Products AB  ECR I-1795 at para 39 (“even if [the measure] is non-discriminatory”) and Commission v Netherlands  ECR I-9761 at para 15 (“even though [the measure] is applicable without discrimination on grounds of nationality”): and as to (ii) and (iii) above see Ciola v Land Vorarlberg  ECR I-2517 at para 11, Gourmet International at para 37 and Carpenter v SSHD  ECR I-6279 at para 30.
24. It is common ground that there is no de minimis exception when a restriction upon one of the protected freedoms is established. However, there has been considerable dispute between the parties as to what it takes to establish such a restriction, and it revolves around the following interlinking areas:
i) TfL submits that the alleged restriction must not be (and is here) too “uncertain and indirect”, a phrase drawn from paragraph 72 of the judgment of the European Court in European Commission v Spain  ECR I-5267, where a link was held to be insufficient between provisions for the cost of hospital treatment in Spain and tourism. This issue – effectively one of remoteness – did not, however, as the Claimant points out, stand in the way of success for Mrs Carpenter in the case cited above, where the European Court concluded that removal by the UK of an overstaying Philippine national married to a UK businessman was a restriction upon his business of supplying advertisements (inter alia) to purchasers in other Member States, because it deprived him of child care. Ms Demetriou submits that here there is a much closer link, on the evidence put forward by the Claimant, between the exclusion of the Claimant from bus lanes and the attractiveness of the Claimant’s services to European customers.
ii) Mr Chamberlain, for TfL, points to the words used by the Court in Ciola at paragraph 11 (“the freedom for recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions”) and in Regione Sardegna  2 CMLR 8 (159) at para 25 (“the freedom of the persons for whom the services are intended, including tourists, to go to another Member State, where the provider is, in order to enjoy the services there”). He submits that the potential customers from Europe do not come to England in order to enjoy or receive the services of a minicab driver. They come to London, and may or may not use the taxis/minicabs while they are here.
iii) The issue is really joined on the definition of “restriction” (an issue which arises with regard to both Article 56 and Article 49). Mr Chamberlain relies upon those words in Ciola (“without being obstructed by restrictions”) and on the words of the Court in HM Customs and Excise v Schindler  ECR I-1039 at para 43 (“legislation … liable to prohibit or otherwise impede the activities of a provider of services”) and in Gourmet at para 39 referring to “a measure [which] had a particular effect on the cross-border supply of advertising space”. Ms Demetriou however submits that these are words simply catering to the particular measures in issue in those cases, and she relies on the much broader formulation of the Court in Kraus at para 32 (“the Kraus rubric”), which has been regularly cited and followed, relating to a measure which “even though it is applicable without discrimination on grounds of nationality, is liable to hamper or to render less attractive the exercise by Community nationals … of fundamental freedoms guaranteed by the Treaty”: in the finding of the Court in Commission v Italy  ECR I-3491 (in paragraphs 60-70) both formulations are expressed, the Kraus rubric but also (at 64) the statement that “the concept of restriction covers measures … which affect access to the market for undertakings from other Member States and thereby hinder intra-Community trade”:
Mr Chamberlain submits that, if it be right that the provisions of Article 56 are engaged, in the light of the evidence of Mr Griffin, then (and I cite his skeleton):
“35. … Article 56 would (presumably) apply to any domestic regulation that impacts on any company, provided that some of its customers are nationals of other Member States who happen to be visiting the UK.
36. This is not the law.”
He refers to the passage in Barnard: The Substantive Law of the EU: The Four Freedoms (3rd Ed) at 357-361 where she sets out what Mr Chamberlain describes as the “three categories of situation” in which Article 56 may apply, and submits that this case falls within none of those categories. Ms Demetriou submits that the categories are not intended to be exhaustive.
25. Mr Chamberlain however made the following further submission, not trailed in his skeleton argument, that Article 56 does not apply at all to the provision of minicab/taxi services. He points to Article 58 which provides, at subparagraph (1), that: “freedom to provide services in the field of transport shall be governed by the provisions of the title relating to transport”.
26. If there were any doubt as to the meaning of Article 58(1), it is removed by the decision of the European Court in Yellow Cab Verkehrsbetrieb GmbH v Landeshauptmann von Wien  2 CMLR 23 (577), which makes clear (at paragraph 29) that “it is to be stressed that free movement of services in the transport sector is not governed by art.56 TFEU, which concerns freedom to provide services in general, but by a specific provision, namely art. 58(1) TFEU”, such that in that case (relating to bus services) no claim could be pursued under Article 56, although the complaint was upheld by reference to Article 49.
27. Article 58(1) refers to Title VI TRANSPORT, of which the first provision is Article 90, stating that “The objective of the Treaties shall, in matters governed by this Title, be pursued within the framework of a common transport policy”. Article 91 provides that “for the purpose of implementing Article 90, and taking in to account the distinctive features of transport, the European Parliament and the Council shall act in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and Committee of the Regions, lay down” (by reference to the subparagraphs (a) to (d) which follow) identified common rules, common conditions, measures and other appropriate provisions. A number of Directives have been brought into force pursuant to Article 91, relating to (for example) heavy goods vehicles, but there is no Directive relating to taxi services, and since Article 100 (the last article in the Title) states that “the provisions of this Title shall apply to transport by rail, road and inland waterways”, Mr Chamberlain submits that the “common transport policy” to be created by Title VI simply does not address private vehicles: in any event, the claim by reference to Article 56 must therefore fail.
28. Ms Demetriou, while accepting that Article 58 has the effect contended for, submits that there cannot have been intended to be a lacuna relating to taxi and other similar services – what, she asks, if there were a Regulation passed in the United Kingdom which, for example, provided that non-nationals were to be charged taxi fares at a higher rate than UK residents? She points out that Regione Sardegna was a case in which the provision of private transportation services was treated as the provision of services - although the Article 58 point was not seemingly taken. She submits that Article 91 imposes a mandatory duty on the European Parliament and the Council to make provisions relating to transport, and if they have failed to do so then, if Article 56 does not apply, at the least the European law principle of Equal Treatment (referred to in paragraph 17(iii) above) applies to fill what would otherwise be a void.
Article 49: The Issues
29. Different facts are relied upon by the Claimant to seek to bring itself within the ambit of Article 49. Its case is that Addison Lee engages self-employed minicab drivers, some of whom come from other Member States. The Claimant does not keep a record of the number of such drivers, but from TfL’s own records of all PHV drivers in London it can be concluded that approximately 9% of them originate from other Member States, and Mr Griffin concludes that that is also the likely proportion of the Claimant’s own such drivers.
30. Thus it is submitted that there are, or may be, other such would-be minicab drivers in other Member States who may wish to come to the UK as self-employed minicab drivers, and who are deterred by, or, at any rate, find unattractive, the fact that they would not be able to drive in bus lanes, the consequence being, as Mr Griffin has stated in his first witness statement, that, if a journey through the congested parts of London is delayed by the minicab driver being unable to use the bus lanes, he is likely to make, and thus earn from, fewer journeys in a day. The Claimant produced, in the course of the hearing, in the light of criticisms by TfL in its skeleton as to the absence of any evidence, statements from three witnesses: two originated from Poland, one coming to the UK in July 1995 and becoming a minicab driver in 2008, and the other coming to the UK in June 2003 and becoming a minicab driver in 2005, and the other from Bulgaria, coming to the UK in 1995 and becoming a minicab driver in 1997 – none of them coming to this country for the purpose of establishing themselves as minicab driver, but all starting work as such once they were already here. They all now work for the Claimant and all of them say: “the fact that I am unable to use the bus lanes makes being a PHV driver less attractive than it otherwise would be”.
31. TfL points out that:
i) none of the three were put off. It should be added that all of them started to be minicab drivers after some years in the UK: the driver from Bulgaria may have started before the Bus Lane Policy was introduced (see paragraph 13 above).
ii) on the basis of the Claimant’s own evidence, 15% of those attending its training sessions in order to become new minicab drivers derive from other Member States (i.e. considerably over the present 9% figure).
32. The hint of a case of indirect discrimination on grounds of nationality is made by the suggestion of the Claimant, although made without any evidence in support, that, because of the need of a would-be black cab driver to take the Knowledge, which is likely to be more difficult for those from other Member States, there is a disincentive from becoming a black cab driver, and hence those from other Member States are driven to be minicab drivers (excluded from the bus lanes). However:
i) This is not pleaded, and hence not evidenced, and no evidence has been adduced on behalf of TfL to counter such a suggestion, as it plainly would have been.
i) The need to take the Knowledge to become a black cab driver does not make it more difficult, or less attractive, to be a minicab driver.
33. The second paragraph of Article 49, as set out in paragraph 17(ii) above, provides that freedom of establishment includes the right to take up and pursue activities as self-employed persons and to set up undertakings under the conditions laid down for its own nationals by the law of the country where such establishment is effected. The Claimant’s case is that there is a restriction on that freedom, albeit one which is equally applicable to those setting up as minicab drivers who are nationals of the home State: being a minicab driver in London is less attractive, as there is competition with that minority of black cab drivers who can be pre-booked and are able to use the bus lanes.
34. There is again a dispute between the parties as to the nature of the restriction which must be established. The Claimant refers to the words of the European Court at paragraph 32 of Kraus (the Kraus rubric) and of the Court in Gebhard v Consiglio dell’ Ordine degli Avvocati e Procuratori di Milano  ECR I-4165 at para 37, referring to “national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty”, and again to Apothekerkammer des Saarlandes  ECR I-4171 at para 22 to the preclusion of “any national measure which, even though it is applicable without discrimination on grounds of nationality, is liable to hinder or render less attractive the exercise by Community nationals of the freedom of establishment that is guaranteed by the Treaty”.
35. Mr. Chamberlain refers, in his skeleton, to Commission v Spain  2 CMLR 50 (1294), where the measures complained of “affect access to the market for undertakings from other Member States, and thereby hinder intra-Community trade” (at para 64); the measures in question affected access to the market in establishing a system under which undertakings had to be obtain a licence to undertake the economic activity in question. In this case, submitted Mr. Chamberlain, although minicab drivers have to have a licence to operate, the Claimant is not complaining about any aspect of the PHV licensing regime, but about a feature of traffic regulations which applies equally to all PHV drivers and which “realistically has no effect whatsoever on the decision whether to establish oneself as a PHV driver in London”. In each of Deutsche Shell v Finanzamt  ECR I-1129 (at paras 28-29) and Commission v Italy  3 CMLR 1(1) (at paras 45-46 and 49-54), after reciting the Kraus rubric, what the Court then, in each case, addresses is undertakings being “deterred” and “access to the market being affected” or “adversely affected”.
36. However, Ms. Demetriou points out that:
ii) as Barnard makes clear, at 301, Article 49 does not only refer to access to self-employment, but also to the exercise of the occupation or profession, and, at 302, she refers to Konstantinidis v Stadt Altensteig  ECR I-1191, where a Greek national, working in Germany as a self-employed masseur, was required to enter his name on the Register with an incorrect transcription of his Greek name into Roman characters, which (at paragraph 15) “causes a Greek national such a degree of inconvenience as in fact to interfere with his freedom to exercise the right of establishment”: although, in that case, it would appear that there was a considerable element of indirect discrimination on the grounds of nationality (see paragraphs 12-13 of the judgment).
iii) Ms Demetriou submits that the emphasis in the decided cases referred to above on limitations on access or deterrence has been because that was the context of the facts upon which the court was deciding the case. Hence, in Commission v Spain, the case to which Mr Chamberlain referred in his skeleton, whereas the impugned measure was found to be one which did “affect access to the market … and thereby hinder intra-Community trade” (para 64), the Court nevertheless reached the conclusion that:
“70.Consequently, the contested legislation, taken as a whole, has the affect of hindering or rendering less attractive the exercise by economic operators from other Member States of their activities on the territory of … Catalonia, through a permanent establishment and thus affecting their establishment in the Spanish market.”
37. There is no dispute that this principle (set out in paragraph 17(iii) above) is one of the general rules of European law, but there is dispute as to its precise ambit.
38. It applies when a national authority seeks to derogate from one of the freedom of movement provisions (ERT  ECR 1-2925 esp. at 41-43), but that would in any event be the case where the freedom of movement provisions themselves are (as they were in that case) engaged. It is also common ground that, even if no specific Treaty provision is engaged, the principle can apply to a national measure where it falls within the scope of EU law. Thus, in Phil Collins  ECR I-5147, the Court held that German rules on the protection of copyright were within the scope of Community law, such rights having been long regarded (paragraphs 22-27) as, by their nature, such as to affect trade in goods and services, and thus to fall within the scope of application of the Treaty. The suggestion by Laws J (as he then was) in First City Trading Ltd  1 CMLR 250, that there might be a difference in the application of the principle dependent upon whether there was or was not an applicable provision of the Treaty was doubted by Richards J (as he then was) in British Pig Industry Support Group (27 July 2000, QB at paras 63-65), and is certainly not embraced by Lawrence Collins LJ in Partridge Farms Ltd v Secretary of State for the Environment  EWCA (Civ) 284 at para 61. Ms Demetriou relied upon the fact that in Herbert Karner Industrie Auktionen GmbH v Troostwijk GmbH  ECR I-3025 the Court concluded that the particular freedom of movement provision did not apply because of a specific exception (para 43 of the judgment), but nevertheless concluded (at paragraph 48) that “according to settled case law, fundamental rights form an integral part of the general principles of law, the observance of which the Court ensures”.
39. I have little doubt in the circumstances that, if Article 56 does not apply, but only because of the effect of Article 58, then the ‘void’ would be filled by reference to the principle of Equal Treatment: it is odd that this was not stated in Yellow Cab (referred to in paragraph 25 above), but that is no doubt because it did not need to be argued, since Article 49 was available.
40. Mr. Chamberlain submits that, if the Equal Treatment principle is engaged, the test for justification is clearly spelt out in the authorities. In Société Arcelor Atlantique et Lorraine  ECR 1-9895 at paras 46-47, the Court concluded that the principle of Equal Treatment would not be infringed if the different treatment were justified and “a difference in treatment is justified if it is based on an objective and reasonable criterion … if the difference relates to a legally permitted aim pursued by the legislation and it is proportionate to the aim pursued by the treatment”. In First City Trading, Laws J, in drawing the distinction with Wednesbury unreasonableness, stated at para 68 that:
“Within the diverse contexts in which the principle of equality may be called in question, there will no doubt always be a range of options factually open to the decision-maker. It is not the court’s task to decide what it would have done had it been the decision-maker … In the nature of things it is highly unlikely that only one of the choices available to him will pass the test of objective justification: and the Court has no business to give effect to any preference for one possible measure over another when both lie within proper legal limits. In this sense, it may be said that the decision-maker indeed enjoys a margin of appreciation.”
41. I turn to justification, and to the parties’ respective cases. The seminal passage, in the context of the freedom of movement provisions, is contained in Gebhard at para 37. Four conditions must be fulfilled:
“They must be applied in a non-discriminatory manner;
they must be justified by imperative requirements in the general interest;
they must be suitable for securing the attainment of the objective which they pursue;
and they must not go beyond what is necessary in order to attain it.” [The last condition effectively enshrining the principle of proportionality.]
It is clear that the categories of justification are not closed (see Alpine Investments BV v Minister van Financiën  ECR I-1141 at para 44 and Analir v Administración General del Estado  ECR I-1271 at para 27).
43. The issue between the parties, however, has been as to the ‘intensity’ or the ‘strictness’ with which the test of justification, in respect of which it is common ground the onus lies in this case upon TfL if there is found to be a restriction which otherwise infringes, must be applied.
44. The same test must in my judgment apply in respect of the freedom of movement provisions as by reference to the Equal Treatment principle: it would be odd to have differing ‘levels of intensity’ and Ms Demetriou did not argue for them.
45. In R (Countryside Alliance and Others) v Attorney-General  1 AC 719 at para 49, Lord Bingham set out paragraphs 28 to 31 of the judgment of the European Court in Omega Spielhallen-und-Automatenaufstellungs GmbH v Oberbürgersmeisterin der Bundesstadt Bonn  ECR I-9609 prefacing his quotation by the words “The test of justification under Community law is a strict one and is subject to the overall control of the ECJ”:
“30. … The concept of ‘public policy’ in the Community context, particularly as justification for a derogation from the fundamental principle of the freedom to provide services, must be interpreted strictly, so that its scope cannot be determined unilaterally by each member state without any control by the Community institutions … Thus, public policy may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society …
31. The fact remains, however, that the specific circumstances which may justify recourse to the concept of public policy may vary from one country to another and from one era to another. The competent national authorities must therefore be allowed a margin of discretion within the limits imposed by the treaty.”
46. Mr Chamberlain submits that the justification he is here putting forward is not one of public policy, and does not therefore qualify for the strictness (though still subject to the margin of discretion) there referred to. He relies on the words of the Court of Appeal in Mabanaft Ltd v Secretary of State for Energy  EWCA (Civ) 224, per Arden LJ, dealing with a requirement under a 2006 Directive that Member States must ensure that fair and non-discriminatory conditions apply in relation to stock-holdings of crude oil and other products:
“32. However, in my judgment, the obligation imposed by the first sentence of art 3(2) confers freedom on the member states to choose the method by which they will comply with their obligations under the 2006 directive. It follows under Community law that the court must allow the Secretary of State a large measure of discretion in choosing an appropriate method. In reviewing the legality of the exercise of such discretion, the court must limit itself to examining whether the decision of the Secretary of State discloses a manifest error or constitutes the misuse of powers or there has been a clear disregard of the limits of his discretion. This is because under community law, where the decision maker in the member state is required to evaluate a complex economic situation – and the same would apply to a complex technical situation as here – the intensity of the review is low. The decision-maker will enjoy a large measure of discretion and the court will limit itself to asking [whether] the assessment is manifestly unreasonable. The court will not substitute its judgment for that of the decision-maker.
48. In any assessment of proportionality in a technical field, the court must allow a proper margin of discretion to the decision-maker, because of the complexity of the assessment he is called upon to make in this field.”
47. Ms Demetriou, for her part, submits that this weighing up in relation to traffic conditions, if that is what is here involved, is not a complex economic or technical decision.
48. In Partridge Farms, Lawrence Collins LJ recorded, at paragraph 89, that “it was held by the judge, and is common ground on this appeal, that, like Community institutions, Member States have a broad margin of appreciation in terms of objective justification”. Mr Chamberlain refers to two judgments of the Court, both since Omega:
iv) Commission v Italy  ECR I-519 (“Italian Trailers”), where the issue related to provisions with regard to pulling of trailers by certain vehicles including motorcycles:
“66.In the present case, the Italian Republic contends … that the circulation of a combination composed of a motorcycle and a trailer is a danger to road safety. Whilst it is true that it is for a Member State which invokes an imperative requirement as justification for the hindrance to the free movement of goods to demonstrate that its rules are appropriate and necessary to attain the legitimate objective being pursued, that burden of proof cannot be so extensive as to require the Member State to prove, positively, that no other conceivable measure could enable that objective to be attained under the same conditions.
67.Although it is possible, in the present case, to envisage that measures other than the prohibition laid down in … the Highway Code could guarantee a certain level of road safety … the fact remains that Member States cannot be denied the possibility of attaining an objective such as road safety by the introduction of general and simple rules which will be easily understood and applied by drivers and easily managed and supervised by the competent authorities.”
v) In Commission v Spain, referred to in paragraphs 35 and 36(ii) above, the Court stated, at paragraph 75, that:
“It should be recalled that, although it is for the Member State relying on an overriding reason in the public interest as justification for a restriction on freedom of movement to demonstrate that its legislation is appropriate and necessary to attain the legitimate objective pursued, that burden of proof cannot be so extensive as to require the Member State to prove, positively, that no other conceivable measure could enable that objective to be attained under the same conditions.”
49. There was some discussion before me as to whether the party with the obligation to justify the restriction can rely on what is called “ex post facto justification”, ie reasoning that was not put forward, or even considered, when the restriction was imposed. I do not consider that in fact this issue arises here, given what is said about the purpose of the Bus Lane Policy, but, even if it did, it is now clear that the test for the Court is objective justification, and that, particularly where the alleged restriction is ongoing and must be justified for the future as well as for the past, the Court has an obligation to consider all matters, even if it might place less weight upon an argument if it appeared to have been put forward belatedly, not for that reason, but because it might not carry the same credibility as if it had always been in mind. Such issues are canvassed in Belfast City Council v Misbehavin’ Ltd  1 WLR 1420, per Lord Mance at 44-48, and in Seldon v Clarkson Wright & Jakes  ICR 716 at paras 59-60, in particular at 59, where Baroness Hale expressly said: “the aim need not have been articulated or even realised at the time when the measure was first adopted: it can be an ex post facto rationalisation”. Inevitably, more evidence, often including factual analyses and surveys, is put forward to seek to justify a provision once it is challenged. In this case, some evidence has been put forward by TfL as referred to in paragraph 15 above, but it is not relied on by them as anything other than very broad-brush, supportive of the case set out by Mr Plowden, and, as is clear from the Italian Trailers case (at paras 63 to 67), where there was no survey evidence at all, such is not necessary if the justification can speak for itself. In any event, insofar as the SKM Report is relied upon, and insofar as it sets out a new or supplementary case, in addition to the English authorities referred to there are the clear words of the European Court in Schönheit v Stadt Frankfurt am Main  ECR I-12575 “a difference in treatment … may be justified, depending on the circumstances, by reasons other than those put forward when the measure introducing the differential treatment was adopted.”
50. TfL makes the following case in justification of its Bus Lane Policy:
vi) Congestion. The 5.8 million bus passengers every weekday amount to 2.3 billion a year: according to a 2011 study, the majority of visitors to London town centres on shopping trips use the bus. TfL seeks to balance the needs of all the different road users, and so far as bus passengers are concerned they measure, and seek to reduce, “Excess Wait Time”. Mr Plowden states as follows in his first witness statement:
“41. TfL locates bus lanes where congestion would otherwise increase bus journey times and/or reduce reliability. This applies both to the overall decision where to concentrate bus lanes (in central and inner London, where congestion is most acute) and to the decision where to locate individual lanes (e.g. at particular junctions).
42. Bus lanes are also particularly useful because they offer protection to vulnerable road users, i.e. cyclists and motorcyclists … These categories of user are permitted to use the bus lanes during the hours of operation of the restrictions, offering them protected road space during the busiest and most congested times of the day.
43. Finally, bus lanes are widely supported in London. TfL’s customer research report on bus priority from 2009, ‘Attitudes to Bus Priority Schemes’ … indicated that 83% of the public support bus priority schemes.”
There is then an exception whereby black cabs are permitted to use the bus lanes, the rationale being explained in the TfL Public Carriage Office Taxis and Bus Lanes Policy Guidance:
“2. The Mayor has stated that TfL’s general policy should be to allow taxis in all bus lanes except where specific safety or bus operational issues made this impractical.
3. This policy applies for the purposes of taxis driving in bus lanes as through-routes and entering bus lanes to pick up and set down. ‘Pick up’ and ‘set down’ mean that there is an intended passenger waiting at the kerbside or that an existing passenger wishes to be set down.”
The 2009 survey of taxi cabs referred to in paragraphs 9 and 13 above records that 52% of journeys are picked up by being hailed in the street, 34% picked up from ranks and 8% are pre-booked.
According to the SKM Report, travel time increases for bus passengers during the morning peak hour (8.00-9.00 am) by a total of 266 person hours as a result of allowing taxis in the bus lanes, but by 431 person hours if minicabs are also included. The Report then uses a method conventional in transport planning, to attribute monetised values to journey times, and to calculate, by reference to estimated busloads and a standard calculation of loss per bus passenger per hour of £9.92, a lost benefit (disadvantage) to passengers of £671,000 in the Congestion Charging Zone and Inner Ring Road areas resulting from the use of bus lanes by black cabs, but a substantially increased loss of £1,140,000 if black cabs and minicabs are so permitted. Quite apart from these statistics, TfL submit that it is obvious that the disadvantage to bus passengers if both black cabs and minicabs are allowed in the bus lanes (73,000 additional vehicles) will amount to a “markedly greater disbenefit to bus passengers” than that caused by 23,000 black cabs alone. In any event, the SKM figures are, as Mr Plowden points out, average figures, and delays will be greater in some locations, certainly those most congested.
vii) The distinction between black cabs and minicabs. TfL emphasised the real difference between them. Black cabs alone can be hailed for pick-up on the streets. Thus there is the need for them to be more easily visible, in the lane nearest the pavement, and for there to be ease of access from the pavement when they are flagged down. Minicabs are not permitted to be hailed off the street. This, TfL submit, is not simply a question of safety of access, but of having the would-be passengers on the pavement and the taxis adjacent to pavements. TfL’s policy documents make clear that the disabled are a priority for TfL, not just in relation to the fact that the black cabs are (while the minicabs are not) required to be adjusted for wheelchairs, but also in respect of accessibility from the pavement to a cruising black cab. TfL submits that, whereas there is thus a specific distinction to be made between black cabs and minicabs, if minicabs were allowed into bus lanes, there would then be no apparent or justifiable distinction between minicabs and other vehicles – chauffeured cars (in which the Claimant also deals), hire cars, Car Club vehicles, delivery vehicles, heavy goods vehicles and all private cars.
viii) Enforcement. TfL relies on the difficulty of enforcement if the less identifiable minicabs are allowed in the bus lanes. Whereas there are some identifying factors on a minicab sufficient for the police or cameras to pick them up, there is always the risk that other drivers will not be able to identify a minicab in a bus lane, and will assume that it is a private vehicle and – for example in areas where bus lanes have variable hours and not always sufficient notices identifying the hours – that the bus lane does not apply and they are free to follow the minicab into the bus lane.
ix) Compellability and maximum fares. TfL points out that black cabs, unlike minicabs, are subject to compellability (explained in paragraph 12(ii) above) and are limited by maximum fares. Minicabs do not have that disadvantage. Although they have fixed fares rather than metered fares, they can estimate those fares so as to make allowance for anticipated delays through congestion.
x) Environment. There was I think a misunderstanding about this. The reliance by TfL upon the environment was, it made clear, by reference to the existence and desirability of bus lanes themselves rather than to any suggestion, by reference to emissions or otherwise, that black cabs were in some way more favourable to the environment than minicabs.
51. The Claimant meets this case, upon which the onus lies on TfL, as follows:
x) Congestion. As set out in paragraph 15 above, little or no time was spent orally on any critique of the SKM Report. Rather Ms Demetriou’s case was that the SKM figures do not show that there is any material addition by way of delay or expense to bus passengers by adding the 50,000 extra PHVs to the bus lanes. The increase in disadvantage to bus passengers is in percentage terms not much higher than 2% and on some calculations less than 1%. The Claimant submits that there should have been more persuasive statistics, whose absence was recognised in Familiapress v Heinrich Bauer Verlag  ECR I-3689, although I refer to what I have said in paragraph 48 above and to Italian Trailers there referred to.
x) Competition. The Claimant relies on the competition between minicabs and those (8% or so) black cabs who also pre-book.
x) Disability. The Claimant points out that according to a 2002 report (Attitudes of Disabled People to Public Transport), 79% of wheelchair users “plan their journey in advance”, which Mr Griffin interprets as pre-booking either a minicab or a black cab. He states that the number of wheelchair users seeking to hail a cab from a road which has a bus lane is likely to be very low, and comments accordingly that the relevance of the issue of disability for TfL’s Bus Lane Policy is “vanishingly small”.
x) Distinction between black cabs and minicabs. Ms Demetriou, in her skeleton argument in paragraph 89, states as follows:
“It is important to note, at the outset, that the Claimant does not in any way challenge TfL’s claims as to the importance of buses generally, and bus lanes specifically, to London’s transport system. The improvement in journey time for bus passengers is the reason why bus lanes are there in the first place, and the reason why certain classes of vehicles are excluded from those lanes during certain hours of the day. The proposition that allowing more vehicles into bus lanes will to some extent slow down the traffic in those lanes (at least at certain times of the day) is an obvious one. What is far from obvious is why that proposition should justify an arbitrary selection of permitted vehicles by TfL, with the effect of causing blatant (and undisputed) discrimination between the two categories of transport operators that are (again it is not disputed) in direct competition.”
x) Enforcement. Mr Griffin points out that, in addition to the rear sticker, which must be fixed on the outside of the glass on the bottom right-hand side of the rear windscreen, minicabs also have a sticker on the outside of the glass on the right-hand side of the front windscreen, and that this enables minicabs to be clearly distinguishable from private cars, certainly on police or traffic enforcement photographs.
x) Compellability and maximum fares. Ms Demetriou points out that there is no evidence as to the burden caused to taxicabs by these obligations, nor any reason why providing black cabs with access to bus lanes is a necessary and proportionate response to any such burden.
52. So far as proportionality is concerned, the Claimant suggests other alternative courses which TfL could take:
x) If it is considered vital not to prejudice bus lanes, then that policy could lead to neither black cabs nor minicabs being permitted into the bus lanes, and thus the competitive advantage of those black cabs who are pre-booked would be eliminated.
x) Black cabs could be permitted to enter bus lanes on the same basis as minicabs, i.e. to pick up and set down only.
x) Bus lanes could be reserved for buses only during peak travel hours, permitting both black cabs and minicabs to use the bus lane at other times.
x) Black cabs and minicabs could use bus lanes only when carrying passengers.
53. As to these, TfL answers as follows:
x) This would not have the public benefit of visibility of and access to black cabs, which is not necessary for minicabs.
x) This suggestion, like the first, does not address the need for visibility of, and access to, cruising taxis.
x) TfL responds that bus lanes are intended only to be operational during the hours when affording priority to buses is considered necessary.
x) This suggestion is actually the reverse of the real purpose of allowing black cabs in the bus lanes, i.e. that the benefit for the public, and the advantage to their safety, is to have empty cabs, i.e. cabs for hire, in the bus lanes, and the suggestion would again not meet the visibility and access requirements referred to above.
Conclusions with regard to Articles 49, 56 and Equal Treatment
54. With regard to Article 56, I am satisfied that, for the reasons set out in paragraphs 25 to 27 above, Article 58 has the effect that Article 56 does not apply, and that the complaint relating to restriction on the freedom to provide services does not arise. I am however satisfied, given that this is a case in which, but for the provisions of Article 58, Article 56 would have applied, that, in accordance with what is set out in paragraph 28 above, the principle of Equal Treatment does apply, and I shall return to this below.
55. As to Article 49, the case must be looked at with common sense. I have noted the three belated statements from existing minicab drivers in the Claimant’s fleet. None of them say that they were in any way affected, either in relation to coming to the UK to set up as minicab drivers (because none of them did), or in relation to their wanting to become minicab drivers, which they did some time after coming to the UK and which all have continued to be (in the case of one of them for the last 15 years). Notwithstanding those statements, I am satisfied that there is nothing which suggests that the fact that all minicab drivers (including those 91% who do not come from other Member States) have any difficulty with exercising their profession, or regard their occupation as rendered unattractive. There is no limitation upon their licence, no limitation upon their right to charge what fares they wish (taking into account travelling through congested areas otherwise than in bus lanes). I am wholly unpersuaded that this traffic restriction has any relevance at all to freedom of establishment. I conclude that this has simply been the attempt to mount a challenge to a London traffic regulation by turning it into a “Euro-point”, and I am wholly unpersuaded by it.
56. I turn to Equal Treatment. The complaint is that in an area where a national rule falls within the scope of EU law, even if no specific Treaty rule has been engaged, comparable situations have been treated differently, i.e. minicabs have been treated differently from black cabs. In this regard I must turn to consider my conclusions as to justification – which in any event I would do, in case I have erred in my approach to the case under Article 49 (or indeed 56).
57. I am not considering the justification for the bus lanes themselves, or their environmental advantages, or the convenience of bus passengers, but the justification for the Bus Lane Policy, including the exception which includes within bus lanes black cabs and excludes minicabs.
58. I do not consider that such distinction is justified because – or as some kind of quid pro quo for the fact that – black cabs bear some public service obligations in relation to compellability etc.
59. Although there is some force in the point made by TfL with regard to enforcement or copycat following of minicabs into the bus lane, I conclude that that is a problem which could be resolved, if necessary by a new and stricter requirement for clearer identification of minicabs, so that they can be more easily differentiated by the public from private vehicles.
60. As to the statistics provided by the SKM Report, issues as to materiality can cut both ways – materiality as to the asserted additional disadvantage to bus passengers of additional vehicles in the bus lane, and materiality as to the asserted disadvantage to minicabs by their not being permitted into the bus lanes. But I do not decide the case by reference to any conclusion drawn, partial or rough and ready though they may be, from those statistics, or to the materiality of the disadvantage suffered by bus passengers, although I can see the force of TfL’s point that there is bound to be additional disadvantage if 50,000 extra vehicles are allowed into the bus lane. I do, however, note particularly what Ms Demetriou herself says, in paragraph 89 of her skeleton, which I have set out in full at paragraph 51(iv) above, and the conclusion she invites the reader to draw is based upon the suggestion that what is sought to be justified is an “arbitrary selection of permitted vehicles by TfL”. I am entirely satisfied that it is not arbitrary:
x) There is to my mind a clear distinction between the need of black cabs (and their passengers and the public) for them to be in the bus lanes, by way of visibility and availability of, and access to, black cabs for those hailing a cruising taxi. I do not reach this conclusion simply or mainly by reference to the disabled – though there are many people who are disabled, but are not in wheelchairs, and, even on the identification of disabled with wheelchair users and accepting Mr Griffin’s premise set out in paragraph 51(iii) above, there would still be 21% of wheelchair users who may not pre-book. I am certainly not persuaded that the problem for the disabled of hailing a taxi which is not in a lane adjacent to the pavement is “vanishingly small”. In any event, from the point of view of the public generally, I consider it makes entire good sense for black cabs to be travelling in bus lanes. Minicabs just do not have the need to use the bus lane, and black cabs do.
i) The fact that 8% of black cab journeys are pre-booked and therefore in competition with minicabs does not seem to me to affect that conclusion. It would clearly not be possible to legislate that those black cabs could not use the bus lane when carrying a pre-booked passenger.
ii) It seems to me entirely clear that there is an objectively justifiable ground for distinction between black cabs and minicabs in relation to the use of the bus lane. If however the exception were to be extended to include minicabs, which do not have that same justification, then I cannot see any further stopping point, any further rational distinction between them and the other vehicles progressively listed in paragraph 50(ii) above. It would be the ‘thin end of the wedge’, but one of some importance because it would immediately jeopardise the priority for buses in the bus lanes.
61. I reach this conclusion by way of objective consideration. If I needed to consider the ‘margin of appreciation’ of TfL I would conclude that their Bus Lane Policy fell within it. For the avoidance of doubt:
i) I am content to adopt the same test as if I were addressing a restriction on freedom of movement, though I do not conclude that there is a difference between that and the test applicable in consideration of the general principle of equal treatment in EU Law (see paragraphs 40 to 48 above).
ii) I do not consider that there is either a question of public policy or a complex economic or technical question. The reasoning for the Bus Lane Policy, including its exception, is obvious and compelling.
62. As to the suggestion of other courses that could have been taken, I do not conclude (see paragraphs 40 and 48 above) that the availability of other solutions renders unjustifiable the conclusion to which TfL has come. But, in any event, I agree with the criticisms made by Mr Chamberlain, set out in paragraph 53 above: none of them are viable.
63. Therefore, addressing the requirements for justification, the four conditions in Gebhard, set out in paragraph 41 above, are plainly satisfied. Insofar as minicabs and black cabs have been treated differently, their situations are not comparable and, in any event, such treatment is objectively justified. Insofar as, contrary to my conclusions, there is a restriction falling within Articles 56 or 49, the restriction would be similarly justified.
64. I was referred to the words of Stanley Burnton J (as he then was) in Middlebrook Mushrooms Ltd v The Agricultural Wages Board of England and Wales  EWHC 1447 (Admin) which was an example of the application of the test of Wednesbury reasonableness to a case of alleged unreasonable treatment (of mushroom pickers). For the reasons set out above, I am entirely satisfied that the inclusion of black cabs but exclusion of minicabs was not Wednesbury unreasonable.
State Aid/Article 107: The Issues
65. The facts on which the claim under Article 107 is based are those set out in paragraphs 18 and 19 above, in respect of which, because of the clear effect of Article 58, I have not had to make any findings with regard to Article 56. By reference to them, Ms Demetriou submits that there is an effect on trade between Member States, because would-be European customers, who are coming to London, are, as Mr Maachi asserts, reluctant to take minicabs because of the fact that they cannot drive in bus lanes, such that they prefer to use the services of black cabs.
66. Derived from Article 107, set out in paragraph 17(v) above, there are the following requirements for State Aid in this context:
i) It confers an economic advantage.
ii) It must be granted by a Member State or through state resources.
iii) It must distort or threaten to distort competition by favouring certain undertakings.
iv) It must affect trade between Member States.
The live issues have revolved around (iii) and (iv).
67. The Claimant contends that there is favouring of black cabs, and that it distorts competition between minicabs and those black cabs who can pre-book (Radio Taxis) and that this affects trade between Member States.
68. With regard to (iv), TfL points to the words of Advocate-General Jacobs in GEMO SA  ECR I-13769 at para 145 of his Opinion, where he referred to taxi services as being one of those economic sectors where aid might not affect trade between Member States; but Ms Demetriou understandably submits that such dictum cannot possibly be material where I actually have to decide that issue, and she differentiates two Commission decisions, that in case No. 543/2001, Ireland: Allowances for Hospitals and Case No. 377/2007, Bataviawerf as relating to obviously local matters (local hospitals and a local museum respectively). With regard to effect on trade between Member States, Mr Chamberlain relies on Remia BV v EC Commission  1 CMLR 1 (a case concerning what is now Article 101 TFEU) at 22, where the Court stated:
“… the Court would point out that, as it has consistently held, in order that an agreement between undertakings may affect trade between Member States it must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law or fact, that it may have an influence, direct or indirect … between Member States, such as might prejudice the realisation of the aim of a single market in all the Member States.”
69. Mr Chamberlain submits that the European customers, to which Mr Griffin refers, travel to London in any event (it is not suggested they are deterred from coming) and what is suggested is that they may, once they have come, use different transport in London. Intra-state trade is unaffected.
70. With regard to (iii), this depends upon resolution of the dispute as to the “Selectivity requirement”, referred to in paragraph 17(v) above, namely whether the measure is favouring black cabs in a way that is not justifiable by the nature or the general scheme of the Bus Lane Policy imposed pursuant to the Regulations.
71. Ms Demetriou relies upon paragraph 40 of the judgment of the Court in Heiser v Finanzamt Innsbruck  ECR I-1627:
“[Article 107] requires it to be determined whether, under a particular statutory scheme, a State measure is such as to favour ‘certain undertakings or the production of certain goods’ in comparison with others which, in the light of the objective pursued by the system in question, are in a comparable legal and factual situation.”
72. The Claimant contends that minicabs and black cabs are in a comparable legal and factual situation. As recited in Commission v Netherlands Case C-279/08 (8 September 2011) “it is for the Member State which has introduced such a differentiation … to show that it is actually justified by the nature and general scheme of the system in question.” In that case, and in Portugal v Commission  ECR I-7115, the onus was not satisfied.
73. Both parties rely on the recent decision of the European Court in British Aggregates Association v Commission Case T-210/02 RENV (7 March 2012), in which, at para 47, the Court addresses the need to consider whether a state measure is such as to favour certain undertakings “in comparison with other undertakings in a comparable legal and factual situation in the light of the objective pursued by the measure concerned”. This effectively approves and repeats the simple statement of the Court in Adria-Wien Pipeline v Wieterstorfer & Pettauer Zementwerke  ECR I-8365:
“According to the case-law of the Court, a measure which, although conferring an advantage on its recipient, is justified by the nature or general scheme of the system of which it is part does not fulfil that condition of selectivity.”
In the event, the tax advantages given to the relevant producers were not held to be justified by the relevant statutory scheme.
74. Mr Chamberlain submits that the favouring of the black cabs, which alone are permitted to ply for hire, over the minicabs, which are not, is plainly justified as an important part of TfL’s Bus Lane Policy and within its statutory function, referred to in paragraph 3 above, of “promoting and encouraging safe, integrated, efficient and economic transport facilities and services to, from and within London.”
Conclusion as to Article 107
75. I am not satisfied that the Bus Lane Policy which permits black cabs and excludes minicabs within TfL’s bus lanes, even though it may have an impact on competition between minicabs and those black cabs who can be pre-booked, affects trade between Member States. However, if I were wrong in that regard, I am satisfied that such measure does not offend against the Selectivity principle. It is exactly in accordance with the nature and general scheme of the Bus Lane Policy imposed pursuant to the Regulations to allow into the bus lanes those vehicles which can ply for hire and exclude those who cannot. I am satisfied that minicabs and black cabs are not in a comparable legal and factual situation in the light of the objective pursued by the measure concerned.
76. For all these reasons the Claimant’s application is dismissed.
Posted by Editorial at 06:42