## Facts

- The Local Government Finance Act 1982 introduced a system of rate capping, granting the Secretary of State authority to limit the amount of rates (local taxes) a local authority could charge.
- The Secretary of State was given broad discretionary power to determine rate caps for local authorities.
- Hammersmith London Borough Council, along with other councils, challenged the Secretary of State's decision to impose rate caps, arguing that the caps did not reflect the distinct needs or circumstances of individual authorities.
- The councils alleged that the Secretary of State's decision was based on generalized assumptions and political considerations, rather than specific, relevant factors.

## Issues

1. Whether the Secretary of State's exercise of discretionary power to impose rate caps under the Local Government Finance Act 1982 was so unreasonable as to be unlawful under the Wednesbury unreasonableness principle.
2. Whether the decision-making process failed to take account of relevant considerations or improperly relied on irrelevant ones, in a manner justiciable on judicial review.
3. Whether the scope of judicial review permitted the courts to substitute their own view for that of the Secretary of State when policy choices were involved.

## Decision

- The House of Lords upheld the Wednesbury unreasonableness principle and found in favour of the Secretary of State.
- The court determined that the threshold for Wednesbury unreasonableness requires a decision to be “so outrageous in its defiance of logic or of accepted moral standards that no sensible person could have arrived at it.”
- It was held that, despite concerns raised by the local authorities, the Secretary of State's decision did not meet this high threshold.
- The House of Lords affirmed that policy choices are primarily the responsibility of the executive, and courts will not interfere with them simply because they might disagree on the merits.

## Legal Principles

- Judicial review is concerned with the legality of decision-making processes, not the merits of the decisions made.
- Wednesbury unreasonableness requires demonstrable irrationality or perversity; it sets a high bar for judicial intervention.
- The distinction between Wednesbury unreasonableness, illegality, and procedural impropriety is important: the former addresses rationality, while the latter cover scope of powers and proper procedures, respectively.
- This case affirms the separation of powers and judicial restraint in reviewing policy-laden executive decisions.

## Conclusion

R v Secretary of State for the Environment, ex parte Hammersmith LBC confirms the strict limits of judicial intervention under the Wednesbury principle, emphasizing that only decisions exhibiting clear irrationality or perversity warrant the courts’ interference with executive discretion in matters of policy.

R v Secretary of State for the Environment, ex parte Hammersmith and Fulham London Borough Council [1991] 1 AC 521 (HL)