Victory for AIMS against FSA in High Court

Victory for AIMS against FSA in High Court

The Association of Independent Meat Suppliers is celebrating after its claim that the Food Standards Agency (FSA) had overcharged the meat industry by a million pounds was granted.

In the Royal Courts of Justice, the Honourable Mr Justice Singh granted the claim brought by 38 slaughterhouse operators in a Judicial Review, organised by AIMS, to challenge the legality of FSA bills totalling in the region of £1 million for meat inspection “underpayments.”

Invoices the FSA sent out to abattoirs for EU minima payments for 2011/12 were declared unlawful. Outstanding invoices do not now have to be paid and FSA must repay any that have already been paid. In addition, the claimants were awarded their costs. The FSA has until the 12th July to apply to the Judge for permission to appeal.

The EU Minima is the minimum rate per animal that EU member states should collect to pay for meat inspection at abattoirs. Prior to 2009 the FSA charged slaughterhouses this minimum rate but in 2009 the Agency introduced a time-based charging system. At the same time they were refused permission by Ministers to increase changes and had to discount their bills back down to what they would have been under the old system. With a weaker pound these bills in some cases were found at the end of the year to be less than the EU minima that the FSA was required to collect. Unfortunately for the FSA when it changed its Charging Regulations it removed the power to collect the EU minima.

The judgment found that although EU Regulation 882/2004 was directly applicable and required the FSA to recover the minimum charges it contained no obligation on operators to pay them. The FSA needed to have included a provision in its Charging Regulations in order to recover the EU minimum charges.

Mr Justice Singh did agree with the FSA that the minimum charges should be collected at operator level rather than national level, but disagreed with FSA’s last minute argument that its Charging Regulations allowed it to change its discount rate at the end of the year to recover the EU minima, saying: “The defendant cannot achieve the same result by the back door by refusing to give the discount which would otherwise be given in order to collect the amounts which it cannot lawfully collect by the front door.”

The judge saw no need to refer the matter to the European Court of Justice saying: “I do not have any real doubt about the interpretation of the EU Regulation and believe that I can with complete confidence resolve the issue myself.”

The case followed a previous Judicial Review organised by AIMS last year in which the main arguments were not determined as the industry agreed to settle for a change in the pound/euro conversion rate that meant FSA refunding over £1 million to industry.

The sides had discussed settling on this more recent occasion, but the FSA would go no further than a 50/50 settlement proposed by the British Meat Processors Association, which, to the overwhelming majority of the operators involved in the action, did not reflect the strength of their case. This decision has been vindicated in view of the clarity of the Judge’s decision.

Norman Bagley, policy director of AIMS said: “We were amazed after the comments made by the Judge at the previous Judicial Review that the FSA did not amend its Charging Regulations to provide a legal basis to charge the EU minima.

“AIMS has come in for considerable criticism for not settling this case on a 50/50 basis, but it is the role of a trade association to look after the interests of its members and that is what we did.

“We will continue to do all we can to limit meat inspection charges until controls are delivered efficiently when we would accept full cost recovery.

“However, as long as there is a requirement for the permanent presence of an official veterinarian at slaughterhouses, relief will be needed if certain small businesses are to remain viable.”

Peter Hewson, a former senior veterinarian at the FSA and now a consultant to AIMS, said: “I advised the FSA in 2009 soon after I retired from the agency that its Charging Regulations were defective, but I was informed its lawyers disagreed. In my view the FSA has got off very lightly because not only does not have the power to collect the EU minima, it only has the power to charge for verifying operators’ controls and that does not include meat inspection!”

Commenting on the High Court decision Stephen Rossides said: “This episode underlines, yet again, the need for clear, transparent, fair and agreed rules and procedures for meat charges and charging. We must get away from legal confrontations between the FSA and industry, and move on to more positive partnership working and cooperation on more strategic issues, including modernisation of meat inspection and delivery, facilitating exports to lucrative markets, improving industry standards, reducing unnecessary TSE controls and better regulation generally.”

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