HM Treasury v. Ahmed (2010) – Why such a good example?

The UK Supreme Court was established under the Constitutional Reform Act (2005). It replaced the Appellate Committee of the House of Lords as the highest court in the UK. However, it only began operating in 2009, with its first case adjudicated on in October of that year. In January 2010 the Supreme Court heard a very important case – that of HM Treasury v. Ahmed. This case was significant not just for its ruling, but for the reaction of Parliament following the ruling.

HM Treasury v Ahmed was a major early case for the UKSC

What was the background to the case?

The case concerned three brothers who had been under investigation by the police for suspected links to terrorist organisations. Importantly, none had been charged with any terrorism related offence. However, despite this, on the 2nd of August 2007, they were informed that HM Treasury had reasonable grounds for suspecting that they had links to terrorist organisations. The Treasury informed them that they had been designated under a United Nations Terrorism Order. The Treasury alleged that they had intelligence to suggest that all three had been involved in fund-raising for Al-Qaeda operations in Pakistan.

Al-Qaeda is an Islamist terror organisation that was led by Osama Bin Laden until his death in 2011.

All three denied any associations with Al-Qaeda. However, the Treasury informed the three individuals that they were subject to an ‘asset freeze’, meaning that their monetary assets could not be moved abroad. The reason for doing this was to stop them from continuing, in the Treasury’s view, of their funding of terrorist acts.

An important aspect of the case was regarding one of the fundamental principles of the rule of law – that of innocence until proven guilty. If any of the three complainants had provable grounds that they were funding terrorism, it stands to reason that they would have been charged under Anti-Terrorism legislation, yet not of them had been charged. However, despite not reaching the threshold for taking a charging decision, the Treasury had taken the decision to freeze their assets.

The court therefore had to consider whether the balance between individual rights to privacy and the the presumption of innocence with the collective rights of society to protect against the advancement of terrorism.

What was the judgement of the Supreme Court?

The brothers began a judicial review of the decision to impose a asset-freeze. This was heard by the UK Supreme Court. The Supreme Court Justices in the case ruled that HM Treasury had acted Ultra Vires by imposing the Asset-Freezing order and ruled that it should be overturned by 6-1. In particular, the justices noted that it was unreasonable that the Asset-Freezing order could not be contested in court (as a criminal charge would be). In his judgement Lord Hope said:

” I would hold that, by introducing the reasonable suspicion test as a means of giving effect to SCR 1373(2001), the Treasury exceeded their powers under section 1(1) of the 1946 Act. This is a clear example of an attempt to adversely affect the basic rights of the citizen without the clear authority of Parliament – a process which Lord Browne-Wilkinson condemned in R v Secretary of State for the Home Department, Ex p Pierson [1998] AC 539″

The Court ordered that the freezing-order against the three brothers should be quashed.

What was the reaction of the Government and why was this significant?

The Government of Gordon Brown was frustrated by the decision of the Supreme Court.

The Government was extremely disappointed with the verdict of the Supreme Court which they felt impacted their ability to keep the British pubic safe and to carry out their international obligations to tackle terrorism. As the UK has no codified constitution the Supreme Court cannot rule an action unconstitutional. Instead, they can only rule that it is ultra vires, meaning that the Government has gone beyond the powers provided for it by Parliament. In Britain, parliament is sovereign, meaning it is the supreme legal authority. However, this does not mean that the decision of the court does not carry enormous political weight. It would be extremely difficult politically for the government to ignore a judgement issued by the Supreme Court.

Consequently, the Government, led by Prime Minister Gordon Brown, quickly formulated legislation to deal with this issue in the Terrorist Asset-Freezing (Temporary Provisions) Act (2010). This bill proposed to give the government power to freeze assets of suspected terror suspects. The bill went through all its legislative stages within just four days:

The bill passed the House of Commons by 376-56 votes and without a vote (‘nodded through’) in the Lords, clearly indicating that Parliament disagreed with the verdict by the Supreme Court. Following this, the Government passed the a permanent Terrorist Asset-Freezing etc. Act 2010. This means if the Supreme Court heard a similar case again today, they would be forced to come to a different judgement.

This case remains one of the best examples of judicial review, but, even more importantly, an excellent example of parliamentary sovereignty – with Parliament effectively legislating to overturn a judicial decision with which it disagreed.

Article Summary

In 2009 the Supreme Court ruled that the Government had unlawfully seized the assets of three individuals suspected of, but not charged of, financially supporting terror groups. In a judicial review the Supreme Court ruled that the Government had acted ultra vires. Almost immediately the Government pushed legislation through parliament to remedy this. Parliamentary sovereignty means that the courts cannot overrule an Act passed by Parliament. Therefore, this is an excellent example of both judicial review and parliamentary sovereignty.

Key Terms

Ahmed vs Treasury – A significant early Supreme Court case involving the freezing of suspected terror supporters assets. The judgement was not welcome by the Government and Parliament quickly legislated to make such actions legal. It is therefore an excellent example of both judicial review and parliamentary sovereignty.

UK Supreme Court – Since 2009 the highest court in the UK for both civil and criminal matters. It was created as part of the Constitutional Reform Act (2005).

Constitutional Reform Act (2005) – An act passed by the Labour Government that reformed the judicial system of the UK, including reducing the power of the Lord Chancellor and creating a Supreme Court. It also set up a Judicial Appointment Committee.

Appellate Committee of the House of Lords – The court that functioned within the House of Lords and was the supreme court of the United Kingdom from 1876 to 2009.

Individual Rights – Rights that belong to an individual. This might be, for example, freedom of expression.

Collective Rights – Rights that belong to a section of society or to society as a whole. For example, society has a right to be protected from violence within it.

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