Nuclear power – Nuclear processing plant – Justification – Application for approval of nuclear plant made when construction almost completed – Defendants ignoring costs already incurred in construction when assessing economic benefits of plant – Defendants concluding plant justified – Whether defendants obliged to take into account costs already incurred – Article 6.1 of EU Council Directive 96/29/EURATOM – Claim dismissed
The claimants, both environmental protection charities, were opposed to proposals by a nuclear power company, BNFL, to construct a plant at Sellafield to recycle used plutonium into a fuel known as MOX. The defendant Secretaries of State were responsible for determining whether such proposals were justified by the advantages that they would produce, as required by EU Council Directive 96/29/EURATOM. BNFL had submitted its proposals for the defendants’ approval at a late stage, when construction of the plant was almost completed.
By recital 9 to the directive, member states were required to implement a system of prior authorisation for practices involving a hazard from ionising radiation. Article 6.1 also required that such practices had to be “justified in advance of being first adopted or first approved by their economic, social or other benefits in relation to the health detriment they may cause”. The European Commission’s comments on the directive stated, in relation to Article 6, that a determination of justification should take place “as early as possible to reduce the influence of the already incurred costs in balancing economic and social factors against health detriment”.
The defendants approved the plant proposals after finding that the detriment caused by the plant would be very small and that the economic benefits were sufficient to justify it. In assessing those benefits, they did not take into account the construction costs incurred prior to the application for approval, with the result that they disregarded the greater part of the capital costs of the venture.
The claimants applied for judicial review of that decision on the ground that the justification assessment had not satisfied the requirements of the directive. They submitted that the costs of bringing a new type of practice, such as MOX manufacturing, into being had to be taken into account when considering its economic benefits, and that it could not be right that the timing of an application for authorisation should determine that cost.
Held: The claim was dismissed.
The comments in the directive showed that the European Commission recognised member states would apply a fundamental principle of economics when determining justification, namely the principle that costs that had already been incurred would be left out of account when assessing the economic benefits of a proposed course of action. It was difficult to see any other way that such costs could influence the balancing exercise. If the claimants’ submission were correct, those costs could not have any influence. The defendants had had no discretion as to whether to include those costs in the balancing exercise, but had been required to ignore them in accordance with standard economic practice and the Treasury guidelines. Even if they had had such a discretion, their decision to follow a classic economic approach to costs that had already been incurred could not be characterised as irrational. Moreover, there was nothing in Article 6.1 or in any domestic legislation that imposed a requirement as to when an application for approval of a proposal had to be made, other than the obvious requirement that it had to be in advance of the adoption or approval of the type of practice in question. Since no bad faith had been established on the part of BNFL, the time at which its application had been made could not be held against it. Accordingly, there had been no error in the approach taken by the defendants.
Lord Lester of Herne Hill QC, Michael Fordham and Ben Jaffey (instructed by Friends of the Earth and Greenpeace) appeared for the claimants; Philip Sales and Paul Nicholls (instructed by the solicitor to the Department for Environment, Food and Rural Affairs and the solicitor to the Department of Health) appeared for the defendants; David Pannick QC, Alan Griffiths and Dinah Rose (instructed by Freshfields Bruckhaus Deringer) appeared for the interested party, BNFL.
Sally Dobson, barrister
