PETITION OF THE SALMON NET FISHING ASSOCIATION OF SCOTLAND AND OTHERS FOR JUDICIAL REVIEW OF A DECISION OF THE SCOTTISH MINISTERS AND MARINE SCOTLAND [2020] ScotCS CSOH

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> PETITION OF THE SALMON NET FISHING ASSOCIATION OF SCOTLAND AND OTHERS FOR JUDICIAL REVIEW OF A DECISION OF THE SCOTTISH MINISTERS AND MARINE SCOTLAND [2020] ScotCS CSOH_11 (24 January 2020) URL: http://www.bailii.org/scot/cases/ScotCS/2020/2020_CSOH_11.html Cite as: 2020 GWD 5-71, [2020] ScotCS CSOH_11, [2020] CSOH 11

Judicial Review of a decision of the Scottish Ministers and Marine Scotland

Respondent: Crawford QC, E Campbell; Scottish Government Legal Directorate

[1] This petition for judicial review came before me for a substantive hearing. The first

petitioners are the Salmon Net Fishing Association of Scotland (“the Association”). The

Association was formed in 1906 to represent the interests of persons holding title, as

heritable proprietors or as tenants under heritable leases, to fish for and take salmon by net.

Such titles are found in coastal areas around Scotland; some of the titles have existed for

hundreds of years. Three office-bearers of the Association, Mr James William MacKay,

Mr Peter Hutchison, and Mr George Keith Allan, represent the Association for the purposes

of the present proceedings. Mr MacKay and Mr Hutchison have direct or indirect interests

in heritable titles permitting net fishing for salmon in coastal waters. The second petitioner

is Mr William Anderson Paterson; his firm, William Paterson & Son, is the owner and lessee

of six such heritable titles. The respondent to the petition is the Lord Advocate, representing

[2] The sole substantive remedy sought in the petition is a declarator that the continued

prohibition on retaining salmon caught in coastal waters in regulation 3 of the Conservation

of Salmon (Scotland) Regulations 2016 (“the 2016 Regulations”), as amended by the

Conservation of Salmon (Scotland) Amendment Regulations 2019 (“the 2019 Regulations”),

taken together with the compensation scheme set out in the Ministers’ letter to the

Association dated 12 April 2019 (“the 2019 compensation scheme”), is outwith the Ministers’

[3] At the outset, it is important to note that the prohibition and the 2019 compensation

scheme are challenged in the petition on the express ground that they are outside legislative

competence. Notwithstanding that, Mr MacColl QC, who appeared for the petitioners,

made clear in his oral submissions that the prohibition itself was not challenged in principle;

the focus of the petitioners’ case was on the alleged unfairness of the 2019 compensation

scheme. Although the terms of the declarator suggest otherwise, the 2019 compensation

[4] The ground of challenge on which the petitioners rely is that the 2019 compensation

scheme does not strike a fair balance between the property rights of the Association’s

members and the general interests of the wider community because it is arbitrary in its

nature and in its effects. The scheme is said to infringe the rights of the members (ie all the

members) of the Association under Article 1 of the First Protocol to the European

Convention on Human Rights (“A1P1”). In the adjusted petition, the Association admits

that it has no rights under A1P1, but explains that it represents the interests of its members

who do have such rights by virtue of their heritable titles. The Ministers, for their part,

accept that any governmental actions having the effect of depriving a person of his property

or preventing a person from exercising peaceful enjoyment of his property must strike a fair

balance; they maintain that the 2019 compensation scheme achieves this. The Ministers also

challenge the petitioners’ case on the basis that they have failed to establish the impact of

the 2019 compensation scheme on any individual title holders. The Ministers argue that, in

the circumstances of the present case, it is not appropriate to take a blanket approach to the

[5] The petitioners aver that many individual netsmen earn their living from the revenue

generated through use of their legal rights to carry out coastal salmon fishing. In some other

cases, the rights to fish for salmon are owned and operated by larger commercial

organisations, which employ a number of workers to run their businesses. For a variety of

reasons, some title holders do not currently exercise their rights to fish, but the petitioners

aver that such titles still have a value to the owners based upon inter alia their potential for

sale, lease, future exploitation, and as a basis for the receipt of payment from conservation

[6] To set the scene for consideration of the parties’ competing positions, it will be

helpful if I set out briefly the main aspects of the background to the making of the 2016

[7] It is well known that Atlantic salmon have cultural and economic importance in

Scotland, as they do elsewhere in Europe. So far as the ownership of salmon fishing rights

under Scots law is concerned, Rankine set out the fundamental principles in this way (The

“Whether on account of the great value of the salmon as an article of food and

commerce, or of its close connection with the sea, which was in a peculiar degree

under the King’s control, or of the ruinous complexity of interests which must

otherwise have arisen, the right of salmon fishing - as distinguished from the

ownership of individual salmon captured - has in Scotland from early times … been

regarded as one of the regalia minora; in other words, a right separate from the

ownership of land, and presumed to be retained by the Crown in granting feus of

[8] Rankine went on to explain (op cit, page 305) that since in point of fact the King was

unable to exercise his prerogative right, and in early times it never occurred to him to lease

out the fishings temporarily, the result was that express rights of salmon fishing became

very usual, either as separate grants or, more commonly, in connection with lands adjoining

the fisheries. As I have mentioned, the Association’s members are owners of rights to fish

for salmon by nets, either as heritable proprietors or as tenants under heritable leases.

[9] Since estimates were first made in about 1971, the number of salmon returning from

their marine migration to Scottish rivers has steadily declined. Salmon is a species listed

and protected under Directive 92/43/EEC on the conservation of natural habitats and of wild

fauna and flora (“the Directive”). In October 2015 the European Commission commenced

infraction proceedings on the ground that Scotland did not have a suitable management

system for meeting the United Kingdom’s obligations under the Directive insofar as it

sought to conserve and protect Atlantic salmon, particularly in regard to coastal netting

[10] The Commission was concerned about the protection of Atlantic salmon populations

in Scottish rivers designated as Special Conservation Areas (“SACs”) under the Directive

and the United Kingdom’s failure to comply with Article 6(1) thereof. In particular, the

Commission considered that the United Kingdom had failed to comply with its obligations

under Article 6(1) of the Directive to establish necessary conservation measures involving, if

need be, appropriate management plans. The Commission’s letter of 22 October 2015 stated

“The UK and in particular Scotland hosts the most significant part of the EU

population of the salmon. Its conservation status in the Atlantic region is

‘unfavourable-bad’; however, its status is ‘unfavourable-inadequate’ in Denmark,

Ireland and the UK. From an EU-perspective, the Scottish salmon population is

therefore a stronghold of highest EU importance and there is in consequence a

particular responsibility for Scotland to ensure all measures needed for the

[11] Guidelines issued by the North Atlantic Salmon Conservation Organisation

(“NASCO”) for the management of salmon fisheries define a mixed stock fishery as one that

exploits a significant number of salmon from two or more river stocks. Fisheries of mixed

stocks, particularly in coastal waters, present particular management and conservation

challenges because they cannot effectively restrict fishing to stocks that are at full

reproductive capacity where there are other stocks that are below conservation limits mixed

in with the stocks being fished. The accepted conservation practice is that management

measures should, in such circumstances, aim to protect the weakest of the contributing

[12] The 2016 Regulations were made, under powers given by the Salmon and

Freshwater Fisheries (Consolidation) (Scotland) Act 2003 (“the 2003 Act”), in response to the

European Commission’s notice of infraction proceedings and in light of evidence of

declining salmon stocks and the poor conservation status of such stocks. Regulation 3(1)

“No person may retain any salmon caught in any coastal waters in a salmon fishery

[13] The term “salmon fishery district”, as defined in section 34 of the 2003 Act, covers

most of Scotland’s coastal waters in which salmon are caught by nets. All the titles held by

the Association’s members and office-bearers are within salmon fishery districts; so too are

[14] There was no time limit imposed on the prohibition introduced by the 2016

Regulations. The Ministers agreed that the prohibition would, however, be reviewed within

a period of 3 years. This would allow for the collection of further data so that the Ministers

through Marine Scotland (a directorate of the Scottish Government) could develop a more

robust understanding of the nature and potential impact of mixed stock fisheries on SACs

and other in-river fisheries. The evidence to be gathered during the 3-year period would

form the basis for a decision as to whether and, if so, where the prohibition should remain in

force, and whether and, if so, where coastal netting of salmon could be resumed.

[15] The Ministers established a compensation scheme (“the 2016 compensation scheme”)

for netsmen whose businesses were adversely affected by the prohibition contained in

the 2016 Regulations. The 2016 compensation scheme was based on the cost of

“mothballing” for 3 years the salmon fishing operations (ie keeping them in good condition

during the limited term of the prohibition so as to allow possible future use). The idea was

to allow title holders to resume fishing with minimal cost and inconvenience in the event

[16] The broad basis of the 2016 compensation scheme was: (1) where there was an

established compensation agreement for conservation reasons (such as an agreement with a

district fishery board), the compensation payable under such an agreement was matched;

(2) larger commercial operators received compensation to reflect their lost income during the

3-year period; and (3) in the case of smaller operators, the level of compensation was based

on the 3 year average reported weight of salmon caught, multiplied by the average price of

[17] In an affidavit prepared for the purpose of the present proceedings, Mr Simon

Rimington Dryden, the former head of the salmon and recreational fisheries team at Marine

Scotland, set out the main findings of the scientific studies commissioned by the Ministers

following the 2016 prohibition. There were two studies carried out: the first, by Downie and

others, reviewed the use of historic tag data to infer the geographic range of salmon river

stocks likely to be taken by a coastal fishery; the second, by Armstrong and others, examined

the application of acoustic tagging, satellite tracking, and genetics to assess the mixed stock

[18] The conclusion of the Downie review was that the evidence showed that coastal net

fisheries exploited salmon which originated from a range of rivers, often some considerable

distance from where the fisheries operated. This finding was supported by the results of the

Armstrong study. There was evidence that coastal net fisheries exploited a mixed stock

resource. In view of these findings, Marine Scotland decided that the appropriate course

was to adopt a precautionary approach by assuming that all Scottish coastal net fisheries

utilised multiple stocks unless it could be shown otherwise. In addition to the specific

netting research, Marine Scotland also took account of the annual International Council for

the Exploration of the Sea Report of the Working Group on North Atlantic Salmon. This

evidence was thought to provide the best estimate of Scotland’s wild salmon population. In

short, it was found that fewer salmon were returning to Scottish waters than in the recent

past; those returning were smaller, in poorer condition, and of lower reproductive capacity.

It was estimated that the downward trend of returning salmon was continuing such that

Scotland’s overall salmon population was considered to be less than half of what it had been

[19] In view of these findings, the Ministers announced in about October 2018 that they

intended to maintain the prohibition on taking and retaining salmon caught in coastal

waters. It was considered that retention of the prohibition was necessary in order to

continue to comply with the Directive and with the NASCO guidelines. The Ministers

undertook that they would review the necessity of the prohibition on an annual basis. If it

was found to be no longer required or justified, it would be removed. The Ministers aver

that the data currently available to them does not permit an accurate prediction to be made

[20] The 2016 Regulations were amended, with effect from 1 April 2019, by the 2019

Regulations. The latter regulations did not specifically provide for a continuation of the

[21] The Ministers took the view that compensation was required in light of the extension

of the prohibition. Mr Dryden explained in his affidavit that a number of options were

considered and discussed with the Association. The first possible option involved

compensation continuing to be paid on the basis of “mothballing” in order to allow further

time for the assessment of Scotland’s wild salmon population. This option was considered

to be inappropriate because the scientific evidence pointed towards the prohibition having

to remain in place for an indeterminate period. The overall trend in the number of adult

salmon returning to Scottish waters continued to be a downwards one and there was no

clear evidence that this trend would be reversed in the foreseeable future. The second

option was based on the idea of buying out the heritable rights of those coastal netting

stations which had been active between 2011 and 2015. The view was taken that there was

no evidential basis on which the value of the heritable rights could be properly valued in

isolation from the assets that generated financial gain to the operator. A further factor

militating against the second option was that a number of the Association’s members

strongly argued that they would not be prepared to sell their heritable rights as these had

been in their families for generations; these members submitted that the value of the

heritable rights was not capable of being assessed in purely monetary terms. Moreover, the

possibility could not be discounted that coastal netting might be permitted to resume at

some future time if justified by the improved health of the salmon population. The third

option (and the one that was selected) was to be a one-off payment intended to allow the

netsmen the opportunity to dispose of and diversify as opposed to mothballing their

operations. If in the future the prohibition is removed, the Ministers have undertaken not to

[22] From about October 2018 meetings were held between Marine Scotland and the

Association. An initial offer of compensation was based on loss of net profits over a 7-year

period. The 7-year period was derived from previous policy work associated with fixed

quota allocations attached to Scottish Government commercial sea fishing licences. Marine

Scotland had considered new policy options for the allocation of these quotas and had

concluded that current holders of the quota allocations would require a minimum of 7 years

[23] The offer included a de minimis net profit margin of 12.6 per cent. This was in

recognition of the fact that 16 of the 18 recipients of compensation under the 2016 scheme

had been unable or unwilling to provide certified accounts to demonstrate the nature and

extent of their commercial activities. Marine Scotland considered that this was a generous

net profit margin which would allow operators to recover the full value of their capital

[24] For its part, the Association sought “as a minimum” a continuation of the status quo

on compensation “with no end date” and with index linking “to counter inflationary

pressures”. In response, the Ministers explained that they were not in a position to offer

index linked compensation or to continue payments in perpetuity. They said that they were

prepared to consider modifications to the offer and invited the Association to discuss how

[25] In the course of discussions with the Association, the Ministers stated that they

would be willing to remove the de minimis provision and to offer compensation based on

each business’s actual profit margin as shown by certified accounts and also to seek to

[26] Following the making of further representations by the Association, the Ministers

agreed to extend the 7-year period to 10 years. They accepted that the 3-year period during

which compensation had previously been paid (ie 2016 to 2019) would not be taken into

account in calculating the loss of profits. This concession recognised that the initial

compensation scheme had been for the distinct purpose of “mothballing” and as such could

be discounted as a period during which operators could be expected to plan for future

diversification. The Ministers also agreed to allow indexation on the price per kilogram of

salmon and grilse of 2.5 per cent per year cumulatively from years 2 to 10; this was later

extended so as to apply to years 1 to 10. They agreed to increase the 5 year average salmon

landings, excluding zero years, by 5 per cent for all operators who were active in the period

between 2011 and 2015; this was to compensate for voluntary delays to the start of the

[27] Discussions continued for several months. The Ministers’ final position on

compensation was set out in a letter from Mr Michael Palmer (a senior official) to the

Association dated 12 April 2019. So far as relevant for present purposes, the letter was in the

“....I consider that we have now reached the end stage of our negotiations and that it

is appropriate to explain the final position which the Scottish Government has

reached in respect of the method by which it intends to calculate compensation

payments to coastal netsmen in light of the decision to retain the prohibition

contained in regulation 3 of the Conservation of Salmon (Scotland) Regulations 2016.

The Scottish Government’s position remains that it is appropriate and reasonable to

move from payment for ‘mothballing’ operations to compensation for cessation of

operations in the foreseeable future. We could not justify otherwise in terms of the

We continue to believe that our offer, based on pure net profit, reasonably

compensates operators for the continuation of the prohibition whilst, crucially, not

extinguishing the heritable rights to fish for salmon in coastal waters should stocks

recover over the long term. We are not able to move on these principles.

Our final offer is therefore a further one-off single compensation payment to

 a 2019 market sale price of £23.58 per kg for wild Scottish salmon and,

 a cumulative 2.5% increase in the market sale prices, year on year;

 a net profit, assessed on a historic case by case basis, but with a de minimis

 a 10 year period with a 3.5% social discount, based on the average annual kg

weight of salmon and grilse landed in the period 2011-2015 inclusive, with zero

 a 5% increase in the average weight of salmon landed to reflect the voluntary

delay to the start of the netting season that many operators observed.

Our calculations based on this framework, and assuming the de minimis net profit

of 12.6% for all operators, show a total, one-off compensation payment of circa

£939,000. This is in addition to the circa £1.7m which has already been paid.

Our offer to remove the 12.6% net profit de minimis provision and alternatively to

calculate each operator’s compensation based on their actual profit margin (as

evidenced through certified accounts) and to seek to resolve recovery of the full

capital value of their assets separately also remains on the table.

I note that your letter explicitly acknowledges that ‘.....it will be for the Scottish

Government to engage with individual members and property owners on a case by

case basis, to determine if any individual agreements can be reached’. I am writing

today to the eighteen coastal operators (to whom we will ultimately make a further

offer of compensation once our discussions with the SNFAS are complete) to update

them on the situation and attach a copy of the text of that letter.”

[28] Following that letter Mr Dryden duly wrote to each of the individual operators on

16 May 2019 informing them that the Ministers had concluded discussions with the

Association without coming to an agreement. The letters offered a single one-off further

payment of compensation for the continuation of the 2016 prohibition. The letters continued

“Previous compensation payments made in 2016 were based on the annual level of

income foregone by no longer taking part in the fishing activity, so that it enabled

operators to mothball their operations during the three-year review period. We are

now faced with a different scenario. The science shows that coastal netting stations

operate in mixed stock fisheries. Marine Scotland (MS) should therefore aim to

protect the weakest of the contributing stocks and, whilst MS will continue to assess

the status of Scotland’s wild salmon populations, we acknowledge that there is a

high risk that this assessment will continue to conclude that a significant number of

rivers have stocks that are below conservation limits for a prolonged period.

We have therefore proposed a further offer of compensation which is designed to

reasonably compensate operators for the loss of net income (profit). It deliberately

moves away from an annual compensation figure for moth-balling operations to a

one-off compensation figure which reflects the fact that operators may need to phase

Your offer has been established by calculating the assumed net income (profit) which

could have been generated over a 10-year period from 2019 to 2028 inclusive...”

[29] The offer letters continued by setting out the details of the compensation package in

line with the letter of 12 April 2019. Acceptance of the offer was to be in full and final

settlement of any and all claims, arising at the time of acceptance or in the future. In all,

sixteen compensation offers were made, of which two have been accepted. Marine Scotland

is not aware of whether the two operators who have accepted the offers are members of the

[30] Mr MacColl submitted that the continued prohibition amounted to a deprivation of

the title holders’ property for the purposes of A1P1. He stressed that the primary purpose of

the heritable titles was to fish for and retain salmon. The effect of the prohibition was to

make the titles useless in practical terms. If, contrary to the petitioners’ principal contention,

the prohibition did not amount to a deprivation of property, it was at least a material control

of use. Mr MacColl acknowledged that ultimately the exact categorisation of the

interference with property rights was not crucial. Whether there was a deprivation or a

control of use, compensation had to be reasonably related to the value of the affected

property rights, having regard in particular to the potentially indefinite duration of the

prohibition. Since the prohibition was expected to endure for the foreseeable future, the

whole purpose and value of the heritable titles was being stripped away.

[31] Senior counsel submitted that it was important to note that the 2019 compensation

scheme focussed on loss of income for a limited period only; this failed to reflect a fair

valuation of the property rights. In Lithgow v United Kingdom (1986) 8 EHRR 329,

paragraph 121, the European Court of Human Rights had acknowledged that the taking of

property without payment of an amount reasonably related to its value would normally

constitute a disproportionate interference which could not be considered justifiable under

A1P1. Here the overall approach of the 2019 compensation scheme was irrational because it

failed to take account of the effect of the prohibition on the fundamental purpose and value

of the heritable property rights. Reference was made to R (Kelsall) v Secretary of State for the

Environment [2003] EWHC 459, paragraphs 62 and 63, where Stanley Burnton J (as he then

was) held that provisions in the Fur Farming (Compensation Scheme) (England) Order 2002

were unfair and irrational because they operated unfairly as between different farmers and

generally; they discriminated between brown mink farmers and farmers of different breeds

[32] Mr MacColl went on to argue that the 2019 compensation scheme was structurally

flawed because it failed to address the specific circumstances of the individual title holders.

It was, counsel submitted, a one size fits all model. In the case of each and every title holder

the prohibition had the effect of destroying the fundamental purpose of the heritable title.

By allowing compensation based only on loss of income for a limited period of 10 years,

the 2019 compensation scheme failed to recognise the true nature and effect of the

prohibition. Mr MacColl submitted that the 2019 compensation scheme infringed the rights

[33] Mr MacColl made clear that the petitioners did not seek to challenge the existence of

a rational basis for the continued prohibition. Instead, the focus of the challenge was, he

said, on the imposition of a potentially indefinite ban without providing fair and proper

compensation. In support of that broad ground of challenge, the petitioners identified a

number of alleged deficiencies in the 2019 compensation scheme. These may be summarised

[34] First, it was argued that the potentially indefinite duration of the ban meant that the

offer to compensate for loss of net profits over a 10-year period was arbitrary and irrational.

The 2019 compensation scheme had no logical relationship with the property rights affected.

This point was said to be underscored by the fact that there had been an increase in the

compensation period from 7 to 10 years in the course of discussions between the Ministers

and the Association. The possibility that the prohibition might be lifted in the future was a

remote one, which held no value for the holders of the heritable titles. Members of the

Association could not reasonably be expected to maintain infrastructure and assets

indefinitely. In the circumstances, the emphasis put by the Ministers on the possibility of

the prohibition being lifted at some future point was misplaced and did not withstand

[35] Secondly, it was argued that the title holders would continue to incur liabilities and

fixed costs during the period of the prohibition. These costs would extend to mortgage

payments on properties; local authority rates; the costs of maintaining and servicing

equipment; hire purchase costs for plant and equipment; insurance costs; electricity and

fuel charges; storage costs; and staff and directors’ salaries. Reference was made to

information contained in affidavits from some members of the Association. If the decision

was taken to wind down the activities of a fishery, that would itself give rise to significant

costs. If a fishery had to be brought back into production in the future, there would be costs

[36] Thirdly, the petitioners submitted that the compensation scheme ignored the value of

moveable assets owned by the fisheries. It was said that an indefinite ban would render

many of the assets worthless. The Ministers had provided no details on their alternative

proposal to resolve the recovery of capital assets separately. That proposal had not been

[37] Fourthly, Mr MacColl submitted that the compensation scheme was flawed because

it failed to offer any compensation for owners whose fisheries were dormant or were fished

only to a limited extent between 2011 and 2015. For a variety of reasons, such as ill-health or

the effects of pollution, a number of the Association’s members did not actively or fully

exploit their ownership rights between 2011 and 2015; such rights were nonetheless of

[38] Fifthly, the scheme was said to be unbalanced because it made no allowance for the

fact that some title holders had not actively fished between 2011 and 2015 as a result of

voluntary conservation agreements they had entered into with local fishery boards in

exchange for compensation. The 5 per cent fish weight uplift was said to be insufficient.

[39] Sixthly, the petitioners founded on the fact that some netsmen had been offered a

single one-off payment under the new compensation scheme that was lower than the total

annual payments made to them under the 2016 scheme. Some of the affidavits referred to

[40] Seventhly, the use of 2011 to 2015 catch data was argued to be arbitrary. The number

of salmon caught at particular locations had ebbed and flowed materially over the years.

The new compensation scheme employed a period of historically low catch levels.

[41] Finally, it was said that the new compensation scheme was unsound because it failed

to take account of profits made from smoking salmon after it had been caught. The open

market value of smoked salmon could greatly enhance profitability. There were references

[42] For all these reasons, the petitioners submitted that the compensation proposed in

2019 did not strike a fair balance between the rights of individual property owners and the

general interests of the wider community. It was arbitrary and without reasonable

foundation. It breached the rights of the individual property owners, including Mr Mackay,

[43] On behalf of the Lord Advocate, Miss Crawford QC submitted that there was a

fundamental flaw in the petitioners’ approach. It was trite that A1P1 rights were held by

individuals and, as such, any assessment of whether those rights had been breached

required consideration of individual circumstances. It was not permissible to adopt a

blanket approach, as the petitioners sought to do in the present case. Insufficient detail had

been supplied of the burden allegedly imposed on the individual title holders. It was,

therefore, impossible to say whether the burden was excessive notwithstanding the

[44] In any event, the 2019 compensation scheme was a fair and reasonable one. It was

designed to provide a one-off payment to compensate for the prohibition for an

indeterminate period. It was reasonably based upon the net profits of the individual

netsmen for a 10-year period. The netsmen had been notified that they should seek to

diversify their activities. They could take immediate steps to do so, utilising and/or

retaining the benefit of the compensation. In the event that the prohibition was to be lifted

in the future, the netsmen retained their heritable titles and would be able to exploit them.

[45] Miss Crawford submitted that the basis upon which the loss of profit was

determined was reasonable and logical. It was tailored to the circumstances of the

individual netsmen by reference to their catch volumes and profit margins. The Ministers

had properly taken into account the representations made by the Association. The price

per kilogram was based on market data; it incorporated a year by year increase. A

favourable social discount was allowed. An increase in average catch figures was applied in

order to reflect the fact that some (but not all) of the netsmen had previously agreed to delay

the start of their fishing seasons. A generous de minimis net profit margin of 12.6 per cent

was allowed. An offer to explore reimbursement of capital assets had been put forward, but

had not been accepted. The 5-year period upon which catch figures were calculated was

reasonable. There was no basis for assuming that the salmon population and catch figures

would have increased had the prohibition been lifted. The trend in the numbers and size of

salmon caught was a downwards one. That trend was ignored for the purpose of the

[46] In the case of those title holders who had not actively fished between 2011 and 2015

the prohibition could not be said to impose an excessive burden on them. Any interference

with the peaceful enjoyment of dormant fisheries was negligible. It was reasonable for the

Ministers to conclude that no compensation should be given to netsmen who were not

utilising their titles. Title holders who had facilities for smoking salmon were not prohibited

from making use of these; they could smoke wild Atlantic salmon or farmed salmon.

[47] Overall, the 2019 compensation scheme was, Miss Crawford submitted, well within

“(1) Every natural or legal person is entitled to the peaceful enjoyment of his

possessions. No one shall be deprived of his possessions except in the public interest

and subject to the conditions provided for by law and by the general principles of

(2) The preceding provisions shall not, however, in any way impair the right of a

state to enforce such laws as it deems necessary to control the use of property in

accordance with the general interest or to secure the payment of taxes or other

[49] The general principles applying to the interpretation of A1P1 are well-known.

Lord Reed summarised these principles in AXA General Insurance Limited v

[50] A1P1 comprises three distinct rules: The first rule is of a general nature and

expresses the principle of peaceful enjoyment of property; the second rule covers

deprivation of possessions and makes it subject to certain conditions; the third rule concerns

the State’s right to control the use of property in accordance with the general interest. The

three rules are interconnected. The second and third rules are concerned with particular

instances of interference with the right to peaceful enjoyment of property and must,

therefore, be interpreted in accordance with the general principle expressed in the first rule.

Each of the two types of interference defined must comply with the principle of lawfulness

and pursue a legitimate aim by means which are reasonably proportionate to the aim sought

[51] In Hutten-Czapska v Poland (2007) 45 EHRR 4, paragraph 167, the Grand Chamber of

the European Court of Human Rights provided an authoritative summary of the principles

“Not only must an interference with the right of property pursue, on the facts as well

as in principle, a ‘legitimate aim’ in the ‘general interest’, but there must also be a

reasonable relation of proportionality between the means employed and the aim

sought to be realised by any measures applied by the state, including measures

designed to control the use of the individual’s property. That requirement is

expressed by the notion of a ‘fair balance’ that must be struck between the demands

of the general interest of the community and the requirements of the protection of

The concern to achieve this balance is reflected in the structure of Article 1 of

Protocol No 1 as a whole. In each case involving an alleged violation of that Article

the Court must therefore ascertain whether by reason of the state’s interference the

person concerned had to bear a disproportionate and excessive burden.”

[52] The categorisation of the interference as either expropriation or control is not critical.

The correct focus is on whether the interference imposes a disproportionate and excessive

burden on the person affected. Thus, in R(Mott) v Environment Agency [2018] 1 WLR 1022

the Supreme Court held that the severity and disproportion (as compared to others) of the

impact of a restriction of fishing rights on the claimant were such that there had been a

breach of his rights under A1P1. In that case no compensation had been offered. At

paragraph 32 Lord Carnwath explained that it was necessary to consider whether the effect

on the particular claimant was excessive and disproportionate. His Lordship went on to

observe, at paragraph 37, that the case was an exceptional one on the facts. He added that

the Strasbourg cases showed that the national authorities enjoyed a wide margin of

discretion in the imposition of necessary environmental controls, and that A1P1 gave no

general expectation of compensation for adverse effects. Furthermore, where the authorities

had given proper consideration to the issues of fair balance, the courts should give weight to

[53] In Alatulkkila v Finland (2006) 43 EHRR 34, at paragraph 67, the European Court of

Human Rights recalled that it had previously stated that the national authorities must enjoy

a wide margin of appreciation in determining not only the necessity of the measure of

control concerned but also the types of loss resulting from the measure for which

compensation will be made; the legislature’s judgment in that connection would in

principle be respected unless it was manifestly arbitrary or unreasonable.

[54] More recently, in O’Sullivan McCarthy Mussel Development v Ireland (2018) EU:

44460/16 the Strasbourg Court reiterated, at paragraph 109, that it had often stated that the

protection of the environment was an increasingly important consideration in today’s

society, having become a cause whose defence aroused the constant and sustained interest

of the public, and consequently the public authorities. The Court noted that in the instant

case the impugned measures taken were adopted to ensure the respondent State’s

compliance with its obligations under EU law, which the Court had recognised as a

legitimate general interest of considerable weight. At paragraph 124 the Court recalled that

it had often stated in its case law that environmental protection policies, where the

community’s general interest is pre-eminent, confer on the State a margin of appreciation

[55] In evaluating the petitioners’ grounds of challenge in the light of these principles, the

question to be addressed is, therefore, whether the interference with the petitioners’ peaceful

enjoyment of their possessions constituted by the prohibition contained in the 2016

Regulations strikes a fair balance between the demands of the general interest of the

community and the requirement of the protection of the individual’s fundamental rights.

The question is not, as the petitioners’ submissions and the affidavit evidence tended to

stress, whether the 2019 compensation scheme itself struck a fair balance. Nor is the

question whether in some general sense the compensation scheme is a fair and reasonable

one - again, that tended to be the petitioners’ approach, as is clear from the affidavits.

[56] A further difficulty arises because the petitioners’ approach to the effect of the

prohibition on the title holders has been presented to the Court at a high level of generality

without any real focus on the nature and extent of the burden that will be imposed on them

individually. In the adjusted petition the petitioners encapsulate their approach in the

“Explained and averred that the compensation offer made on 12th April 2019 applies

equally (and in an equally arbitrary fashion) to all heritable title holders in terms of

the applicable formula. Standing the nature of the compensation offer made by the

Respondent (sic), the issue of whether the A1P1 rights of title holders have been

breached is capable of being determined without the necessity of considering the

[57] The petitioners attempt to justify this approach by averring that negotiations

between the Ministers and the Association proceeded on a general basis and did not have

regard to the circumstances of individual title holders. The petitioners then add that insofar

as it may be of any assistance to the Court to consider the individual circumstances of title

holders, reference is made to affidavits to be lodged by the petitioners (the terms of which

[58] I have considered the terms of the affidavits. They rehearse a number of complaints

about what is alleged to be the overall unfairness of the 2019 compensation scheme. They

claim that the title holders will not be fully compensated for all their losses. The approach

taken is that the compensation will not be sufficient to enable them to continue with their

fishing businesses. This misunderstands the basis and purpose of the prohibition and of the

2019 compensation scheme. The scientific evidence shows that the prohibition will probably

have to remain in force for the foreseeable future. Compensation is accordingly intended to

allow the title holders to dispose of their interests and to diversify their operations over a

[59] The generality of the approach taken by the title holders can be seen, for example, in

Mr Mackay’s affidavit where he states that the 2019 compensation scheme is flawed because

he will not be compensated at a level or in a manner “to ensure my business survives”

(paragraph 31). Later in his affidavit Mr Mackay criticises the 2019 compensation scheme on

the ground that it does not allow him to “dispose of significant assets, key to my business,

[60] Mr Hutchison states in his affidavit that the owners of the fishery in which he has an

interest estimate that to recommission operational status in the future would cost

approximately £50,000 for replacement and renewal of necessary plant, materials and

equipment (paragraph 14). He then provides a series of round figures as a “first level

estimate” of such costs. In paragraph 23 Mr Hutchison refers to “the significant economic

growth potential” of the fishery; he contends that this should be recognised and

[61] In his affidavit Mr Paterson complains that “the Scottish government want to stop us

fishing with no reassurance that the fishing will ever start again” (paragraph 14). His

evidence is presented at a high level of generality. For example, in paragraph 22 he says that

the value of a heritable title was not based on recent catch figures (which may be currently

low) but on its potential as evidenced by the much larger catch figures of the past.

[62] Messrs David Thomson Pullar and George Stewart Pullar provide a list of assets

used in their business; “their conservative replacement cost/values” are then set out in a

series of round figures, including the amount of £1,000,000 for an operating base with

outbuildings and land (paragraph 32). It seems obvious that many of the fixed costs to

which they refer would not have to be incurred if the business was wound up, for example

accountancy fees and mortgage payments. In paragraph 40 of the affidavit the assumption

is made that the assets of the business will have to be retained “to support any future

[63] Mr Gary Stephen Fraser explains in his affidavit that his fishings have been dormant

since 2009/10 due to oil pollution. Compensation has been paid by those responsible for

[64] Mr Joseph Buchan Yule claims that the true cost of decommissioning is in the value

of the heritable titles; he claims that the three fisheries with which he is concerned would

[65] 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

[66] 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

[67] 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. Both the Supreme Court and the

Strasbourg Court have emphasised the importance of these considerations. The period for

which compensation is to be paid is a substantial one. The compensation is to be calculated

by the net profits generated over a representative period. It is important to recall also that

the netsmen will retain their heritable titles and will be able to exploit them in the event that

the prohibition is lifted in the future. This points towards the interference being more in the

nature of a control of use than an expropriation. The case law makes clear that a wide

margin of deference should be extended to the national authorities in circumstances such as

the present, particularly where, as here, they have consulted those affected and given careful

[68] I take account also of the fact that the Ministers were willing to consider

compensation based on recovery of the full capital value of assets, but for reasons that were

not explained the Association has chosen not to explore this option.

[69] In my view, the 5-year period (2011 to 2015) adopted for catch figures reflected a

reasonable and balanced approach. There is no reason to think that catch figures would

have increased had the prohibition been removed after it was first introduced in 2016. In the

case of title holders who did not fish during that 5-year period, any interference with the

peaceful enjoyment of their possessions appears to me to be negligible. It was, in my

judgment, reasonable for the Ministers to conclude that no compensation was required for

[70] The comparison with the 2016 compensation scheme is irrelevant in my view. It was

[71] I consider that it was reasonable for the Ministers to take the view that no specific

element of compensation was necessary to reflect the fact that the businesses run by some

title holders extended to the smoking of fish. They may be able to continue with these or

similar activities in the future notwithstanding the prohibition.

[72] In conclusion, I find myself in agreement with Miss Crawford’s submission that none

of the exceptional circumstances identified in Mr Mott’s case exists in the present case (Mott

v Environment Agency supra). 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. I shall for these reasons

sustain the respondent’s pleas-in-law, repel the petitioners’ pleas, and refuse the petition. I

shall reserve all questions as to expenses.

Scottish Court of Session Decisions