Supreme Court BM-UKSC-2013 Primary Settled

Bank Mellat v HM Treasury (No. 2) [2013] UKSC 39

[2013] UKSC 39 2013 England wales scotland ni

What This Authority Covers

The Supreme Court allowed the appeal of an Iranian bank against a Treasury direction under the Counter-Terrorism Act 2008 that singled it out from all other Iranian banks. The Court held the direction was irrational, arbitrary, and disproportionate because the Treasury failed to justify why this bank was selected when the stated risk applied to all Iranian banks equally. The Court also held that procedural fairness required pre-decision notice and an opportunity to make representations, given the measure's serious and immediate effects. Lord Sumption articulated the four-part proportionality test now used across UK public law.

When Relevant

Central to all proportionality reasoning within the toolkit. Directly relevant when: (a) an organisation singles out a named person or narrow group for a restrictive measure (e.g. excluding a trans employee from facilities, imposing bespoke conditions after a complaint); (b) decision rationale is being documented — Bank Mellat requires the recorded reason at time of decision to be the operative reason, not a smarter justification constructed after challenge; (c) high-impact, person-specific decisions are being made without consultation — Bank Mellat requires a fairness checkpoint. Also grounds the proportionality wizard, the Policy Roast, and Quinn's framework analysis.

Key Provisions

§20, §74 (Lord Sumption) Framework
Four-part proportionality test: (i) sufficiently important objective, (ii) rational connection, (iii) no less intrusive measure available, (iv) fair balance between individual rights and community interests
The four-part proportionality test: (i) the objective must be sufficiently important, (ii) the measure must be rationally connected to the objective, (iii) a less intrusive measure could not have been used, (iv) a fair balance must be struck between the rights of the individual and the interests of the community.
§114, §120 Claimant
Anti-arbitrariness: singling out one entity without justifying why comparable entities are treated differently is irrational and disproportionate
Anti-arbitrariness principle: singling out one entity or group without justifying why comparable entities are treated differently is irrational and disproportionate.
§110, §112 Claimant
Reasons and justification: the justification relied upon must be the justification advanced at the point of decision; the Court was troubled that the justification presented to Parliament differed from the justification advanced in litigation
The justification relied upon must be the justification advanced at the point of decision. Courts will scrutinise whether the reasons given are genuine or post-hoc rationalisations.
§124, §126–133 Claimant
Pre-decision consultation: where a targeted measure has serious and immediate effects on an identifiable person or group, fairness requires notice and an opportunity to make representations unless urgency or impracticability is genuinely evidenced
Where a targeted measure has serious and immediate effects on an identifiable person or group, fairness requires notice and an opportunity to make representations unless urgency or impracticability is genuinely evidenced.
§133, §147–148 Claimant
Serious and immediate effects: where a measure causes serious and immediate damage to an identifiable person, stronger procedural safeguards are required
Where a measure causes serious and immediate damage to an identifiable person, stronger procedural safeguards are required. The seriousness of the impact determines the procedural standard.

Current Status & Context

Binding Supreme Court authority on proportionality methodology. Not a trans-specific case — it concerned counter-terrorism financial sanctions — but it is the leading UK authority on the four-part proportionality test, anti-arbitrariness in targeted measures, contemporaneous reasons, and procedural fairness for high-impact decisions. The toolkit already cites it as the source of the proportionality framework. This entry formalises its governance disciplines.