IN THE COUNTY COURT AT CENTRAL LONDON Claim No. E40CL216 IN THE MATTER OF THE POLITICAL PARTIES, ELECTIONS AND REFERENDUMS ACT 2000; AND THE POLITICAL PARTIES, ELECTIONS AND REFERENDUMS (CIVIL SANCTIONS) ORDER 2010 BEFORE HHJ DIGHT CBE B E T W E E N: DARREN GRIMES Appellant -and- THE ELECTORAL COMMISSION Respondent _____________________________ NOTICE OF RESPONSE _____________________________ INTRODUCTION 1. The Commission is the independent body which oversees elections and regulates political finance in the UK. It is a body corporate established by statute which consists of nine or ten members, known as Electoral Commissioners and appointed by the Queen, who also appoints one of the Commissioners to be the chairman of the Commission: see ss.1(1)-(5) PPERA. Mr Grimes is an individual who registered as a permitted participant in the 2016 EU referendum. 2. This appeal concerns the decision contained in the Commission’s Statutory Notice dated 16 July 2018 and issued on 17 July 2018 (“the Notice”). In the Notice, the Commission concluded that Mr Grimes had committed offences in connection with four payments made in June 2016 to a Canadian data analytics firm called Aggregate IQ (“AIQ”) for services provided to campaigners in the EU referendum; and had thereby acted in breach of the Political Parties, Elections and Referendums Act 2000 (“PPERA”). The Commission concluded that the offences were serious and imposed civil sanctions accordingly. On the same date, the Commission published a report of its investigation into the Appellant (amongst others) concerning campaign funding and spending for the EU referendum (the “Report”). The Appellant now appeals against the Notice pursuant to §6(6) of Schedule 19C PPERA. 3. The Commission was satisfied beyond reasonable doubt that Mr Grimes had committed an offence under s.117(3) PPERA by incurring referendum spending, in excess of the statutory £10,000 limit applicable, on behalf of an unincorporated association (“BeLeave”) that was not a permitted participant, in circumstances where Mr Grimes 1 knew or ought reasonably to have known that he was doing this. The Commission found that these expenses came to over £675,000 and were incurred by BeLeave in a common plan with Vote Leave Limited (“Vote Leave”). Vote Leave is a limited company established for the purpose of the EU referendum in June 2016. It was the designated lead campaigner for a “leave” outcome in the referendum. 4. The Commission found (amongst other things) as follows: 4.1. Mr Grimes had registered as a permitted participant in his individual capacity, even though from May 2016 BeLeave existed as an unincorporated association and could have so registered. Nevertheless, Mr Grimes chose to campaign using BeLeave as the vehicle for accepting donations and for incurring referendum spending in excess of £10,000, to a total of £675,908.32 (Notice §47); 4.2. BeLeave’s overall spending was “substantially above the threshold of £10,000 at which a campaigner must become a permitted participant”. The Commission concluded that “[t]hat is a very significant failure and warrants a significant sanction” (Notice §48). 4.3. The Commission weighed the mitigating factors raised by Mr Grimes against the aggravating factor of the seriousness of the offence. However, it stressed that “an unprecedented sum of money was involved here and the referendum was a highly significant political event (Notice §88). 4.4. Having considered Mr Grimes’ representations, the Commission was nevertheless satisfied beyond reasonable doubt that he had committed the following offences; under s.122(4)(b) PPERA that Mr Grimes, as a permitted participant without reasonable excuse delivered a return that did not meet the requirements of section 120(2) or (3) PPERA; under s.117(3) PPERA that he incurred referendum spending in excess of £10,000 on behalf of a body that was not a permitted participant (Notice §98). 4.5. In the circumstances of the case, the Commission was satisfied that it was appropriate to impose a sanction in respect only the second of these offences and that it was proportionate and in the public interest to impose the sanction of £20,000 in relation to that offence (Notice §99). 5. Pursuant to §§1 & 7 of the Court’s 2 November 2018 Order, this appeal is being case managed and heard together with a parallel appeal against other financial penalties imposed on Vote Leave arising out of the same investigation. 2 THE APPEAL JURISDICTION Statutory framework 6. The County Court’s appeal jurisdiction is defined by §6(6) of Schedule 19C PPERA: “(6) A person on whom a discretionary requirement is imposed may appeal against the decision to impose the requirement on the ground— (a) that the decision was based on an error of fact, (b) that the decision was wrong in law, (c) in the case of a variable monetary penalty, that the amount of the penalty is unreasonable, (d) in the case of a non-monetary discretionary requirement, that the nature of the requirement is unreasonable, or (e) that the decision is unreasonable for any other reason, or on such other grounds as may be prescribed.” (emphasis added) 7. Schedule 19C PPERA is supplemented by the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010/2860 (the “2010 Order”). Art. 8 of the 2010 Order relevantly provides as follows: “(2) On an appeal under paragraph […] 6(6) […] of Schedule 19C the county court […] may— (a) withdraw, confirm or vary the requirement or notice; (b) take such steps as the Commission could take in relation to the act or omission giving rise to the requirement or notice; (c) remit the decision whether to confirm the requirement or notice, or any matter relating to that decision, to the Commission.” 8. Two particular matters are to be noted regarding the appeal jurisdiction: 8.1. First, the Appellant bears the legal burden of establishing one of the grounds of appeal specified in §6(6) of Schedule 19C. Insofar as the Appellant seeks to make a factual challenge, it is incumbent upon him to identify an “error” of fact upon which the Commission’s decision was based: see §6(6)(a) of Schedule 19C. Accordingly, the Court is not tasked with a de novo rehearing of the facts and matters upon which the Commission’s decision is based. As Mr Grimes accepts, the Court’s jurisdiction is to “review ... the factual and legal basis on which [the] decision is made” and this amounts to “jurisdiction only to review a discretionary decision” (Grounds §20, emphasis added). 8.2. Secondly, the error of fact or law must be material. Thus, as set out in art. 8(2)(a) of the 2010 Order, the powers of the Court on appeal include (amongst other things) to “withdraw, confirm or vary the requirement or notice” (emphasis added). Immaterial matters provide no basis for varying or withdrawing the requirement imposed by the Commission. If the Court is not satisfied as to materiality, the appropriate course is to confirm the requirement. This follows the well-established principle in civil appeals that “(e)rrors of law of which it can be 3 said that they would have made no difference to the outcome do not matter” and an appeal against a finding of fact must identify a “material matter”: see R. (Iran) v Secretary of State for the Home Department [2005] EWCA Civ 982 at §§9-11 per Brooke LJ. 9. Mr Grimes has pleaded a number of grounds which (even on his own case) would make no difference to the correct outcome. To give one example, he advances a ground of appeal based on the statutory eligibility requirement for an unincorporated association to have its “main office” in the UK. He contends that “(t)he Commission made no finding… that BeLeave did or did not have an office in the [UK]”: Grounds §111-112. Yet he does not contend that BeLeave had any office outside the UK. Indeed, his pleaded case as to his own whereabouts is that “(h)e was based in and almost exclusively worked from his home in Brighton” and “(h)is activities were carried out wholly in the [UK]”: Grounds at §114(4)-(5). Accordingly, even if there were anything missing from the Commission’s findings on this point (which there is not), this is not a matter which provides any basis for disturbing the Commission’s decision. The statutory scheme does not require the Court to vary or withdraw a decision based on unmeritorious and immaterial grounds such as this. Article 6 ECHR 10. Mr Grimes contends that the civil sanction imposed on him involves a “criminal charge” for the purposes of Article 6 ECHR: Grounds §§59-60. The Commission submits that: 10.1. A variable monetary penalty imposed as a discretionary requirement under Schedule 19C PPERA is a civil matter for the purposes of Article 6; 10.2. In any event, even if such a monetary penalty were properly to be characterised as a “criminal charge”, the statutory scheme under Schedule 19C for the imposition of such penalties by the Commission and appeal to the County Court is compatible with Article 6. 11. The established case-law of the ECtHR sets out three criteria to be considered in the assessment of the applicability of the criminal aspect of Article 6. These criteria are sometimes referred to as the “Engel criteria” following the decision of the ECtHR in Engel and others v The Netherlands (No 1) (1976) 1 E.H.R.R. 647. The Engel criteria, in summary, require the following to taken into account in considering characterisation: (a) the classification of the penalty in domestic law; (b) the nature of the offence; and (c) the nature and degree of severity of the penalty that the person concerned had risked incurring.