Judging regulators: The political economy of Anglo-American Administrative Law (Edward Elgar Publishing 2020), by Eric C. Ip

We tend to think of administrative law as an external constraint on politics, regulation, and public administration, and forget the fact that administrative law actually rests upon political foundations and is part and parcel of the political system. The overall insight of Judging Regulators is that administrative law is not an exogenous determinant of administrative behaviour. Administrative law, as developed by common law courts, will evolve in response to broader changes in the polity, subject to constraints imposed by political actors and the scarcity of judicial resources. Such changes are not necessarily constitutional shifts, but more subtle changes in the partisan and ideological composition of the legislature in particular, and the electorate in general. 

Judging Regulators derives insights from political science and economics to solve the mystery of why administrative law in the United States and the United Kingdom – the world’s two most influential common law countries – fundamentally diverges from each other on questions of law, fact, and discretion. Divergence was not always the case. From the founding of the American Republic in the eighteenth century to the immediate years after the Second World War, administrative law in these two English-speaking countries showed remarkable similarities. Judicial review of administrative acts grew exponentially in both jurisdictions as their administrative states became larger and more powerful during the second half of the twentieth century. 

A gradual discord in judicial doctrine was underway, culminating into three landmark judgments handed down between 1983 and 1984: the House of Lords decision in Council of Civil Service Unions v Minister for the Civil Services [1985] AC 374 and the American Supreme Court’s decisions in Motor Vehicle Manufacturers Association v State Farm Mutual Automobile Insurance Co 463 US 29 (1983) and Chevron USA Inc v Natural Resources Defense Council Inc 467 US 837 (1984), after which it was beyond doubt that English administrative law jealously defends the supremacy of the courts over administrative authorities on all matters of statutory interpretations, while obligating them to avoid questioning administrators’ substantive policy and factual findings; whereas US administrative law demands the federal courts to defer to agencies’ interpretations of law, including ones that courts may disagree with, as long as they are somehow “reasonable,” while taking an intrusive  “hard look” at administrators’ substantive factual and discretionary determinations, even though judges are rarely regulatory experts. 

What explains this radical divergence? Neither the American presidential system nor the British parliamentary system had undergone fundamental changes in the second half of the twentieth century. If the divergence was rooted in differences between the Anglo-American political systems, then it should have occurred centuries before the 1980s. Legal culture in the UK and the US diverged ever since the latter departed from the British Empire over two centuries ago; if legal culture determined this divergence in administrative law doctrine, then, again, the divergence should have happened long ago. And the divergence cannot be explained, for example, by the Administrative Procedure Act of 1946, which still stands today, and which requires exactly the opposite. 

During the post-Second World War era, the administrative common law of England parted ways with the US after Congressional gridlock and partisan polarization became the norm in US politics in ways unknown in the UK. The decline of the veto powers of the Monarch and the House of Lords enabled House of Commons majorities controlling the Government to delegate the least possible legislative authority to autonomous administrative agencies, and the least possible oversight authority to the courts to second-guess the substantial performance of agencies. This has cushioned the jurisprudence of the Appellate Committee of the House of Lords, and, later, the UK Supreme Court to defer to Parliament’s primacy in controlling administrative policy-making, but not to statutory interpretations by administrative officials, which are inconsequential anyway. 

In America, the Congressional polarisation and gridlock that steadily emerged over the past seven decades have rendered systemic statutory ambiguities and inconsistencies inevitable, since any unambiguous legislation will unlikely gain the agreement of every actor that can veto it during the legislative process, be it the President or a Congressional committee from Senate or the House. As a result, agencies have been given considerable leeway to make substantive policies to fill up gaps in ambiguous law, under the guise of “statutory interpretation.” The US Supreme Court’s doctrinal entrenchment of judicial deference to agency statutory interpretations in cases like Chevron, helped prevent the federal legislative process from grinding to a halt due to judicial overreach. At the same time, the vacuum of Congressional oversight left by gridlock has made aggressive judicial review of administrative discretionary decision-making and findings of fact more plausible and attractive to the courts. 

The number of effective veto-gates in the law-making system is a crucial predictor of the development of judicial doctrines in administrative law. To restate my argument into more technical terms, we can say that, all things being equal, more effective veto-gates will make it less likely for the Supreme Court to deliver aggressive doctrines of judicial review of administrative statutory interpretations, but more likely to deliver aggressive doctrines of judicial review of administrative factfinding and discretionary policymaking. Conversely, all things being equal, the fewer the number of effective veto-gates, the more likely the Supreme Court will fashion aggressive doctrines of judicial review of administrative statutory interpretations, but the less likely it will fashion aggressive doctrines of judicial review of administrative factfinding and discretionary policymaking. 

The Separation of Powers Restoration Act, reintroduced in March 2019 to restore American administrative law doctrine back to its original position, that is, one that is similar to the current English position, has yet to be signed into law. Assuming the Act does become law someday, my book would still predict against the reversal of Chevron deference and State Farm hard look review in actuality, so long as large numbers of effective veto-gates, underpinned by political polarization, persist in the US. Recall that at present the Chevron and State Farm doctrines already flatly contradicted the Administrative Procedure Act. Any unilateral attempt from Congress to roll back four decades of administrative law judicial doctrine, without addressing the political dynamics that gave rise to Chevron deference and State Farm hard look in the first place, is bound to be futile, if not counter-productive. To enact a new statute reinforcing what the Administrative Procedure Act provides would hardly alter the landscape of the administrative law, absent deeper changes in the polity. 

American-style polarization and gridlock never emerged in the UK. For much of the post-War era, the British have not been as deeply divided by ideology as the Americans; previous divisions over privatization and nationalization having been more or less settled. The presence of some big controversies notwithstanding, the main parties had converged ideologically on centrist liberalism over much of the twentieth century. Polarization and gridlock characterised the life of Parliament since 2017, during which no single party held a clear majority. Prime Minister May’s Brexit deal, by March 2019, had been vetoed by the House of Commons no less than three times. Jeremy Corbyn’s Labour had decisively moved to the left. And Conservatives reverted to social conservativism. The UK Supreme Court’s behaviour, in the light of so many new veto-gates in Westminster, seemed to corroborate with this book’s argument: in R (on the application of Miller) v. The Prime Minister [2019] UKSC 41, the Court declared a “reasonable justification test” over against the much narrower traditional Wednesbury doctrine, as the proper standard of review. Lady Hale and Lord Reed argued that the Prime Minister’s advice to the Queen to prorogue Parliament was “unlawful”; “outside the powers of the Prime Minister to give it”; and “null and of no effect”; thus, the “actual prorogation … too was unlawful, null and of no effect,” “as if the [Royal] Commissioners had walked into Parliament with a blank piece of paper.”    

Just as the UK Supreme Court had almost begun to domesticate a version of “hard look” review of substantive administrative decisions, the Conservatives won their most substantial Commons majority in the general election of December 2019 since Thatcher’s in 1987, while Corbyn’s Labour performed its worst since 1935. It is safe to suggest that the political fragmentation of the 2010s has finally ended. Westminster politics has returned to its norm of decisive majorities. The decision in Miller may be a departure from Wednesbury, but it is an exceptional departure nonetheless. The doctrinal antithesis of Anglo-American administrative law studied in my book is set to persist into the foreseeable future. This conclusion has potential to inform or even shape the trajectories of Transatlantic comparative administrative law research for years to come.

Posted by Eric C. Ip, Associate Professor of Law, Faculty of Law, The University of Hong Kong