Joint Committee on Statutory Instruments Fourth Report


Memorandum by the Ministry of Agriculture, Fisheries and Food


  1. The Joint Committee considered the above instrument at its meeting on 10 June 1997 and requested a memorandum on the following point:

    Regulation 15 contemplates partial compensation, as well as full compensation, from the national reserve in the case of a mistaken failure to allocate any, or a mistaken under-allocation of, quota. Explain why partial compensation is provided for and in what circumstances this discretion might be exercised (rather than the discretion to pay in full).

  2. Regulation 15 is a permissive provision which gives the Minister a discretion to allocate only milk quota and not financial recompense in order to compensate, in whole or in part, for the failure, by reason of a mistake of the Minister, to allocate quota. The provision does not contemplate reducing a person's entitlement to be compensated in full for the consequences of such a mistake - that is a matter for the general law - but caters for the possibility that there will be certain circumstances in which the extent of the loss incurred as a result of the Minister's mistake can only partially be remedied by an award of quota. An example will serve to illustrate the point.

  3. If the Minister's mistake is not discovered until a number of years after an award of quota would have been made but for that mistake, an allocation of quota under regulation 15 can only partially compensate for this because quota (i.e., the license to produce milk up to a certain amount without incurring superlevy), can only remedy the producer's position prospectively. The losses suffered by him, during the years when he was entitled to produce milk but was unable to do so, are incapable of being compensated by an allocation of quota under regulation 15. In these circumstances, in addition to an award under regulation 15 to cover his future production, the claimant might receive compensation in lieu of quota for the years during which he was deprived of the ability to produce milk. Thus, it is in this sense that an allocation of quota under regulation 15 may sometimes only partially compensate a person for the consequences of a mistaken failure to award any or insufficient quota.

  4. There are other circumstances in which an allocation of quota under regulation 15 may compensate for the mistake of the Minister only in part. In this context, it is to be noted that the amount of surplus quota held in the UK national reserve is not constant throughout the course of any one quota year and that this amount is finite. In the UK, in accordance with Community legislation, recourse is had to the national reserve in order to allocate additional quota to producers who fall within priority categories established on the basis of objective criteria (regulation 14 of The Diary Produce Quotas Regulations 1997).

  5. Thus, the amount of quota for allocation under regulation 15 may depend on the point at which the Minister's mistake is discovered as there may be times during a quota year when there may be insufficient quota in the national reserve to provide for the entire (or any) allocation to which a claimant is entitled. Therefore, in these circumstances also, any amount which it may be possible to allocate under regulation 15 will only partially compensate for the mistake; full recompense, if justified, would have to be achieved by the additional award of compensation in lieu of quota.

13th June 1997

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