Taxi drivers challenge 'overnight' deregulation

Tuesday 29 October 2013 22.46
The drivers taking the case say the move interfered with their constitutional property rights
The drivers taking the case say the move interfered with their constitutional property rights

The liberalisation of the taxi market 13 years ago had "devastating consequences and caused enormous hardship" for some drivers, the High Court has heard.

Three taxi drivers, who are taking a test case which may affect hundreds more, say the State acted unreasonably and unfairly by liberalising the market "overnight" and wiping out the value of taxi licences.

The court was told many paid up to £100,000 for licences because the State had presided over a restrictive regime for years which created a value for taxi licences.

Many borrowed and invested huge sums in taxi licences and the value was wiped out and reduced to £5,000 overnight when the market was liberalised in 2000, the court was told.

While the State was entitled to improve the market for consumers, overnight deregulation was grossly unfair, counsel for the men told the High Court.

Thomas Kelly, Alphonsus Muldoon and Vincent Malone claim the move interfered with their constitutional property rights.

They also claim the minister for the environment was in breach of statutory duty and competition law in presiding over the regime for taxi licences from 1978 to 2000.

They also claim the minister for the environment had no power to delegate the function of issuing taxi licences to local authorities.

They are seeking declarations from the court that the system for licences prior to deregulation was unlawful and void and are seeking damages for breach of their constitutional property rights, breach of duty and breach of legitimate expectation.

Counsel for the men Michael Collins said they were not arguing the minister was not entitled to liberalise the market, the question was the manner in which it was done.

Almost every report at the time on the taxi market warned against a sudden deregulation and instead recommended a phased approach, he said.

All the reports said it would be unfair to liberalise the market overnight yet that is what was done, he said.

Mr Collins said at least three leading cases on taxi licences established they were property attracting constitutional protection.

Mr Collins said prior to deregulation local authorities had created a barrier to entry and people had to pay significant sums to buy taxi licences.

Political and social forces prompted a change in the regulations and there was huge controversy about taxi licences.

He said existing holders were defending the system as they had spent a lot of money on licences but consumers wanted a better service.

New regulations were introduced to allow more licences to be issued to existing licence holders but these were struck down by the courts.

As a consequence the State introduced a new regime which "liberalised almost overnight" the whole regime, Mr Collins said.

He said it was referred to as deregulation but this was not entirely correct as the taxi market was still regulated but the quantitative restriction was effectively swept away.

While it was a laudable aim to increase the number of taxis as restriction was damaging to consumer welfare, it had to be done in a fair manner, he said.

Overnight deregulation without a phasing mechanism was unreasonable and disproportionate way to go about liberalisation, he said.

The case continues before Mr Justice Michael Peart.