Taxi-drivers lose High Court case over deregulation of industry

The High Court has dismissed a challenge by three taxi-drivers who claimed the value of their taxi plates was wiped out when the sector was deregulated in 2000.

Alphonsus Muldoon and Vincent Malone sued the Minister for Environment and Local Government and Dublin City Council while Thomas Kelly sued the Minister and Ennis Town Council. Theirs were test cases for more than 1,100 similar claims by taxi drivers.

Mr Justice Michael Peart said the claims made by all three men must be dismissed. A large number of people were in court for his judgment.

The three sought damages and declaratory orders claiming that because the Minister and/or the local authorities permitted a licensing regime to operate as it did over so many years, they suffered immediate and significant losses as a result of overnight deregulation and liberalisation of the market.

Mr Muldoon and Mr Kelly claimed the Minister and the State acted beyond his powers by delegating the role of deciding on the number of licences to the local authorities and in breach of their right to earn a livelihood and their constitutional rights.

Mr Muldoon also sought declarations including that the council acted contrary to competition law and that the defendants, or some of them, had been unjustly enriched as a result of the regulatory regime operated and/or approved by them.

Mr Justice Peart was completely satisfied it was within the Minister’s powers to delegate regulatory powers to local authorities.

He also found the regulations did not interfere “much less unjustly attack” the taxi-men’s right to earn a livelihood. “They could continue to earn their livelihood”, he said. It was therefore not necessary for him to address the issue of whether they were entitled to recover damages for breach of a constitutional right.

The judge said in his view they were also not in a position to bring a claim for breach of statutory duty by the defendants. Each of them entered the market voluntarily, in the knowledge, to be implied to them if necessary, that the regulatory regime could change and that there was a risk involved that in buying their licences they would not hold their value, he said.

He rejected the claim the Minister was in breach of his duties to them when he introduced the 2000 regulations (liberalising the market). The Minister’s duty was to regulate public service vehicles in the public interest. There was nothing in the original 1961 regulations to indicate there was the imposition of a duty to regulate in a way that does not interfere with the interests of individual licence holders, he said.

In relation to competition law, he said they had sought to establish that licensing by the councils met the criteria for an economic activity, at least in principle, but were “overlooking or ignoring, as they must for their argument, the non-commercial reality of that activity”.

There was no market participation when the councils performed a purely regulatory function or a public interest activity, he said. Another factor which militated against the economic activity claim was that it was up to elected councillors to determine the number of licences and not officials, he said.

The fact that a secondary market had evolved (in the sale of licences for large sums) as an incidental consequence of the regulations in operation at the time was in the judge’s view irrelevant to the court’s considerations.

The non-economic activity engaged in by the councils means that when performing this regulatory function they were not undertakings for the purpose of competition law and this activity therefore “fell at all times outside the competition rules”.

The case comes back before Mr Justice Peart next month to deal with the question of costs.