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Subsidy Control Reviews: Proportionality With A Light Touch

 |  May 10, 2023

By: Tom Coates (Competition Bulletin)

Those who have previously worked as State aid lawyers may be aware of the new subsidy control regime in the UK. This regime allows interested parties to challenge subsidy decisions in the Competition Appeal Tribunal (CAT), where the same principles applied by the High Court in a judicial review will be used. However, it remains unclear what standard of review the CAT will adopt when examining a substantive subsidy decision. In the recent Bulb case (https://www.bailii.org/ew/cases/EWHC/Admin/2023/737.html), the Divisional Court’s decision suggests that the CAT will use the proportionality standard of review, rather than rationality. Nevertheless, the proportionality review may be so limited that it does not add much to the traditional grounds of review.

The Bulb case was a combined judicial review of the Secretary of State’s sale of the energy supplier to Octopus, which occurred under well-known circumstances. In 2021, Bulb faced serious financial difficulties and entered a special administration program that was funded by BEIS (as it was known at the time). BEIS quickly took action to sell the business, and it was eventually sold to Octopus in October 2022…