AIMS celebrates court victory on meat charges

Meat leaders were celebrating today Friday, 28 June, after a judge ruled in favour of their claim that the Food Standards Agency (FSA) had overcharged the industry by a million pounds.

The claim, brought by 38 slaughterhouse operators in the Association of Independent Meat Suppliers (AIMS), was granted by the Honourable Mr Justice Singh in the Royal Courts of Justice.

AIMS had brought the case to challenge the legality of FSA bills, totalling in the region of £1m, for meat industry underpayments based on the EU minima charging levels - the minimum rate per animal that EU member states have to collect to pay for meat inspection at abattoirs.

The ruling means invoices sent out to abattoirs for EU minima payments for 2011/12 were declared unlawful. Outstanding invoices do not now have to be paid and FSA must repay any that have already been paid. In addition the claimants were awarded their costs.  The FSA has until the 12th July to apply to the Judge for permission to appeal.

Prior to 2009 the FSA charged slaughterhouses the EU minima rate but in 2009 it introduced a time-based charging system.  At the same time they were refused permission by Ministers to increase changes and had to discount their bills back down to what they would have been under the old system.  

Currency fluctuations meant that at the end of the year the money collected was less than the EU minima that the FSA was required to collect. However when the FSA changed its charging regulations it remove the power to collect the EU minima.

The judgment found that although EU Regulation 882/2004 was directly applicable and required the FSA to recover the minimum charges it contained no obligation on operators to pay them. The FSA needed to have included a provision in its charging regulations in order to recover the EU minimum charges.

Mr Justice Singh did agree with the FSA that the minimum charges should be collected at operator level rather than national level, but disagreed with FSA’s last minute argument that its Charging Regulations allowed it to change its discount rate at the end of the year to recover the EU minima, saying: “The defendant cannot achieve the same result by the back door by refusing to give the discount which would otherwise be given in order to collect the amounts which it cannot lawfully collect by the front door.”

An attempt to settle out of court failed after claimants rejected a proposal by the FSA for a 50/50 settlement, a move supported by some in the sector, including the British Meat Processors Association which urged members to agree to the deal.
Norman Bagley, Policy Director of AIMS said: “AIMS has come in for considerable criticism for not settling this case on a 50/50 basis, but it is the role of a trade association to look after the interests of its members and that is what we did.  

“We will continue to do all we can to limit meat inspection charges until controls are delivered efficiently when we would accept full cost recovery.

“However, as long as there is a requirement for the permanent presence of an official veterinarian  at slaughterhouses, relief will be needed if certain small businesses are to remain viable.”

Peter Hewson, a former senior veterinarian at the FSA and now a consultant to AIMS, said: “I advised the FSA in 2009 soon after I retired from the agency that its charging regulations were defective, but I was informed its lawyers disagreed. In my view the FSA has got off very lightly because not only does not have the power to collect the EU minima, it only has the power to charge for verifying operators’ controls and that does not include meat inspection.”   

A spokesman for the FSA said: “This outcome helps to clarify the interpretation of the Regulations, and the FSA welcomes that clarification. We will consider the detail of the judgement and will be making our proposed course of action clear as soon as practicable.”


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