Fishing association fails in legal challenge over ‘unfair’ compensation scheme for salmon catching ban

A judge in the Court of Session ruled that the compensation scheme struck a “fair balance”, having regard to the fact that the ban had been put in place for “conservation and environmental protection” reasons.

‘Prohibition’

Lord Pentland heard that the petitioners, the Salmon Net Fishing Association of Scotland, raised judicial review proceedings against the Scottish Ministers seeking declarator that the Conservation of Salmon (Scotland) Amendment Regulations 2019, which continued a prohibition introduced in 2016 on retaining salmon caught in coastal waters, was “outwith the Ministers’ legislative competence, ultra vires, and of no effect”.

The 114-year-old body also claimed that the scheme which was introduced in 2019 to compensate affected farmers “infringed” the rights of its members to peaceful enjoyment of their property under Article 1 of the First Protocol to the European Convention on Human Rights (A1P1), on the basis that it did not strike a “fair balance” between the property rights of the members and the general interests of the wider community because it was “arbitrary” in its nature and in its effects. 

The 2016 regulations were made in light of evidence of declining salmon stocks and in response to the commencement by the European Commission of infraction proceedings against the UK, on the ground that Scotland did not have a suitable management system for meeting its obligations under an EU Directive to conserve and protect Atlantic salmon, particularly in regard to coastal netting operations.

A compensation scheme, which was introduced for those whose businesses were adversely affected by the prohibition contained in the 2016 regulations, was based on the cost of “mothballing” of salmon fishing operations for three years, to allow title holders to resume fishing with minimal cost and inconvenience after that three-year period.

‘Unfair compensation scheme’

However, the original three-year prohibition was extended under the new regulations, which came into effect on 1 April 2019, due to the continued downward trend in salmon stocks.

The 2019 compensation scheme which was introduced sought to compensate operators for the assumed loss of net income which could have been generated over a 10-year period between 2019 and 2028.

On behalf of the petitioners it was submitted that the continued prohibition amounted to a deprivation of the title holders’ property for the purposes of A1P1. 

The primary purpose of the heritable titles was to fish for and retain salmon, but the effect of the prohibition was to make the titles “useless” in practical terms. 

It was also argued that the compensation had to be reasonably related to the value of the affected property rights, but the “potentially indefinite” duration of the duration of the ban meant that the offer to compensate for loss of profits over a 10-year period was “arbitrary and irrational”.

The 2019 scheme was “unfair” and “structurally flawed” because it failed to address the specific circumstances of the individual title holders – it was a “one size fits all” model, which infringed the rights of all the association’s members.

‘Fair balance’

Refusing the petition, the judge held that the scheme did strike a “fair balance”.

In a written opinion, Lord Pentland said: “I accept that the affidavit evidence shows that the title holders consider that they will not be fully and fairly compensated. It seems to me, however, that the evidence fails sufficiently to acknowledge that the prohibition is necessary for sound reasons of environmental protection and conservation. In such circumstances, A1P1 does not give rise to any entitlement to receive full compensation for all the financial losses that may possibly flow from the relevant measure. 

“In the affidavits there is no real attempt to explain what the impact on the individual title holders will be in the event that they elect to accept compensation under the 2019 scheme and proceed to dispose of their business interests and diversify their operations over time. No convincing attempt is made to explain in concrete terms why, in those circumstances, the burden imposed on them should be regarded as excessive.

“In my opinion, the petitioners are mistaken to describe the 2019 compensation scheme as one which does not take account of individual circumstances. In fact, the scheme is tailored to the circumstances of individual netsmen by reference to their catch volumes and profit margins.

“Stepping back and trying to take a fair and, I hope, realistic view of matters, it appears to me that a compensation scheme based on loss of net profits for a period of 10 years cannot be said to impose an excessive burden. This is especially so where the prohibition has been put in place for sound reasons of conservation and environmental protection and to ensure that EU law is complied with.”

Lord Pentland concluded: “The Ministers have offered a rationally based compensation scheme that is, I consider, well within their margin of appreciation. I am satisfied that it strikes a fair balance. It is not manifestly arbitrary or unreasonable.”