Subsidy penalty quashed

A company that owns and manages arable and grazing land in Norfolk sought the expertise of HCR Hewitsons in challenging a decision made by the Secretary of State for Environment, Food and Rural Affairs to impose a penalty reduction on the company’s claim for a farm subsidy.

The Single Payment Scheme was part of the EU’s common agricultural policy. Under the scheme, farmers applied for payments which they would receive if they met certain eligibility criteria. One of these criteria was ‘cross compliance’ requirements, including specific requirements relating to the way land was managed to preserve wildlife.

In 2013, an employee of the company had been arrested and subsequently convicted for poisoning wild birds on the estate. This conviction was cited as a reason by the Secretary of State for Environment, Food and Rural Affairs for a penalty reduction on the payment.

The company wanted to challenge this decision on the grounds that it could not be held liable for the employee’s actions and that it had therefore not breached the relevant statutory management requirements. Simon Biggin and Stewart Morrison represented the company in a judicial review of the decision to withdraw the payment.

The matter went to trial before the High Court. The judge held that the Secretary of State was not entitled to treat the acts of the employee as being “directly attributable” to our client. The Secretary of State needed to direct further enquiry as to the level of fault (if any) on the part of our client.

The decision to penalise our client was quashed and no penalty was imposed.