Q&A: referendum law and lessons from Scotland's referendum

This Q&A first appeared on LexisNexis on 17 February 2016.

What is the legal framework surrounding referendum campaigns? (funding, advertising etc.)

The Political Parties, Elections and Referendums Act 2000 (the "2000 Act) governs the conduct of UK-wide referendums and sets out a general procedure for their conduct. The 2000 Act created the Electoral Commission ("the Commission), which is responsible for overseeing that conduct. However, the 2000 Act does not confer any general power to hold referendums so each one still requires its own Act of Parliament. Those Acts can and do amend the basic rules as set out in the 2000 Act. The Act will also specify the question to be asked, on which the Commission will give its opinion. If the Act does not specify the question, leaving it to subordinate legislation, then the government must consult the Commission on the proposed question before making the relevant statutory instrument.

Political parties, individuals or organisations who wish to participate in the referendum may register with the Commission as 'permitted participants'. The Commission will then choose the official organisations for each campaign from amongst the permitted participants seeking the designation, and provide public funding of equal size to each. Official campaign organisations have the right to televised campaign broadcasts, free postage of a referendum mailshot and the use of public property free of charge for public meetings - although this is regulated from referendum to referendum. Broadcasters are not permitted to air any campaign broadcasts from anyone other than the official campaign organisations.

Campaigns can otherwise raise money independently, with no limit on the amount they can raise or that can be donated by any one individual or organisation. There is, however, a limit on the amount the various permitted participants can spend. The European Union Referendum Act 2015 (the "2015 Act) authorises the official campaigns to spend up to £7 million (an increase on the £5 million limit specified in the 2000 Act). The amount political parties will be able to spend will vary depending on their share of the vote at the previous general election, while other permitted participants are limited to spending no more than £700,000 (again an increase on the £500,000 permitted by the 2000 Act). Any person or organisation not registered as a permitted participant may spend only £10,000 at most. Campaign expenditure is audited by the Commission and it is a criminal offence for campaign spending limits to be knowingly breached. It is worth noting that the transmission of a campaign broadcast will not count towards the expenditure limit.

The 2000 Act sets out specific rules for the format of campaigning materials such as leaflets or adverts. Any such material must state, either on the first or last page, the names and addresses of the printer, promoter and the person on behalf of whom the material is being published. If material is published in contravention of the rules in the 2000 Act, then the promoter, publisher and printer will have committed an offence.

There are also restrictions on central and local government bodies publishing promotional material during the referendum campaign. Material which puts forward arguments for one campaign or another, or deals with any of the issues raised by the referendum, cannot be published by public bodies within the 28 days leading up to the referendum.

What will the two campaigns need to be aware of/alert to? / What are the key legal issues facing the two campaigns on the referendum trail?

In advance of the campaign period proper, the key issue will be designation. As noted above, the 2000 Act gives the Commission the power to designate one campaign organisation as the official organisation for each side. However, at present there are three organisations competing for that designation for the 'Leave' campaign - Vote Leave; Leave.eu; and Grassroots Out. There does not appear to be any such jostling on the 'Remain' side, perhaps because almost all of the major political parties seem set to back 'Remain' and so will run their own separate campaigns.

The criteria used by the Commission to designate the official campaign organisations are:

• how the applicant's objectives fit with the referendum outcome it supports;
• the level and type of support for the applicant;
• how the applicant intends to engage with other campaigners;
• the applicant's organisational capacity to represent those campaigning for the outcome; and
• the applicant's capacity to deliver their campaign (including its financial probity).

The financial question is important, as the official campaign organisation will not only receive £600,000 in public funding but will also have a much larger expenditure limit of £7 million. 'Unofficial' campaigns designated as permitted participants can only spend up to £700,000. The Commission will want to avoid a situation in which one side of the argument is hampered because the official campaign organisation does not have enough funds to reach its spending limit, while other groups have more money than they are allowed to spend.

In the unlikely event that the Commission is not satisfied that any of the organisations seeking to be the official campaign fulfils its criteria then it can decline to make a designation, which would obviously have significant adverse implications for that side of the debate.

In addition to the offence of breaching expenditure limits, it is also a criminal offence for a person to knowingly or recklessly make a false declaration of referendum expenditure. In an election, a winning candidate who spent more than the limit could be disqualified, with a by-election resulting. However, an offence committed in the course of a referendum campaign will, of course, not result in the referendum being re-run. If a campaign organisation or permitted participant breaches the expenditure limits, and a criminal offence has been committed, then the responsible person nominated by the organisation or permitted participant (in the case of political parties, the treasurer), or the participant themselves if an individual, will be criminally liable.

The official campaigns, permitted participants and others taking part in the campaign will all need to be aware of the limitations on co-ordinating their activities with others. Under the 2015 Act, if one organisation is spending money in pursuit of a 'common plan' agreed with another organisation, the expenditure will be counted towards the expenses limit of both parties (unless one of them is a designated campaign, in which case expenditure by a permitted participant, or an 'unofficial' participant who does not exceed their £10,000 limit, will only count towards the campaign's limit). The aim is to prevent campaigns circumventing the expenditure limits by channelling their spending through different groups.

Has there been any recent case law in this area?

As national and UK-wide referendums are comparatively rare in the UK, there is no meaningful case law relating to the conduct of referendums. However, there is some case law relating to other aspects of referendums, or to other issues that may be generally relevant to the EU referendum.

Moohan and Another v Lord Advocate [2014] UKSC 2014/0183 concerned the prohibition on prisoners voting in the Scottish independence referendum. Two Scottish prisoners challenged the Scottish Parliament's refusal to allow prisoners to vote on the grounds that it violated Article 3 of Protocol 1 of the European Convention on Human Rights (ECHR) - the right to free elections. Although the European Court of Human Rights has previously ruled that blanket bans on prisoner voting were contrary to the ECHR, the UK Supreme Court decided that these rulings (and Article 3) applied solely to legislative elections and so did not apply to referendums.

In R. (on the application of Preston) v Wandsworth LBC [2012] EWCA Civ 1378, the appellant had argued that the restriction was contrary to EU law as an impediment to the free movement of people. The Court of Appeal held that the restriction was neither an impediment to free movement nor resulted in such an impediment. It seems likely that the exclusion of EU citizens (other than Irish citizens) from the EU referendum franchise will prompt a challenge of some sort, though the case law in this area suggests the prospects of success may not be good.

R (on the application of Pro-Life Alliance) v BBC [2003] UKHL 23 concerned the BBC's refusal to broadcast an election broadcast by the Pro-Life Alliance featuring images of aborted foetuses and abortion techniques, on the basis that the BBC considered that the broadcast was likely to prove offensive to the public. The House of Lords held that, notwithstanding that the broadcast was an election broadcast by a political party and that the Human Rights Act 1998's protection of freedom of expression was engaged, the BBC was also obliged to refrain from broadcasting offensive material by statute, and had acted proportionately in refusing to broadcast. The right to referendum campaign broadcasts is therefore not unlimited.

There were also a couple of cases arising from Parliament's failure to hold a referendum on the EU Constitution or the subsequent Lisbon Treaty. In R. (on the application of Southall) v Secretary of State for Foreign and Commonwealth Affairs [2003] EWCA Civ 1002, the Court of Appeal held that Parliament's decision not to legislate for a referendum on the EU Constitution was a non-justiciable matter of political judgement. In R. (on the application of Wheeler) v Office of the Prime Minister [2008] EWHC 1409 (Admin), concerning the failure to hold a referendum on the Lisbon Treaty despite the Government's promise to hold a referendum on the EU constitution, the High Court held that the Government's promise did not give rise to a legitimate expectation of a referendum. Any judgement by the Court against the government would in any case interfere in the proceedings of Parliament, contrary to the Bill of Rights and the doctrine of Parliamentary sovereignty. Parliament has, of course, now chosen to legislate for a referendum, but these cases demonstrate the Court's reluctance to interfere with the decisions Parliament makes on such issues.

Are there any lessons that can be learnt from Scotland?

After the Scottish independence referendum, a blogger complained to the Commission that the pro-independence organisation 'Business for Scotland' had worked to an agreed plan with the Scottish National Party.

Like the 2015 Act, the Scottish Independence Referendum Act 2013 regulated organisations' ability to co-ordinate their campaigning through common plans by counting the expenses incurred under the plan towards each organisation's total expenditure.

The complaint was prompted by leaked e-mails from the chief executive of the SNP regarding the structure of Business for Scotland, implying that the SNP had a say in the affairs of the organisation, but the Commission ultimately found that the two organisations had not in fact been working together under an agreed plan. However, this is an issue the various campaign organisations for the EU referendum will have to carefully consider.

There are also lessons from the independence referendum about the need to file accurate expenditure returns with the Commission (and all items of expenditure over £200 must be vouched for).

A failure to do so can lead to the Commission imposing a fine, and organisations on both sides of the independence debate have recently been fined for failing to comply with the rules. In January 2016 the Commission imposed a £2,000 fine on 'Better Together', the official pro-Union campaign, for a failure to supply receipts or vouching in respect of £57,000 worth of expenditure.

The Commission also fined the blogger behind the pro-independence 'Wings Over Scotland' blog £750 for failing to file a fully vouched return, and 'Labour for Independence' £1,500 for failing to lodge any accounts at all. The Communication Workers Union was also fined £500 for incurring expenditure before registering as a permitted participant.

The Better Together and Wings Over Scotland fines came despite the Commission accepting that their omissions were not deliberate, illustrating the degree of risk for campaigners (including but certainly not limited to the official campaigns) that fail to comply with the reporting rules.