A Supreme Court judgment recently held that a digital newspaper isn’t a newspaper. This was the case of News Corp v HMRC, in which the media giant tried to get the court to agree that its digital newspapers fell within the special zero rate of VAT that applies to “newspapers” under section 30(2A) of and Schedule 8 to the VAT Act 1994.
You might think the answer is obvious: a digital newspaper must be a newspaper, just as a brown dog is a dog. That’d be a wholly linguistic approach, which I’m not sure works infallibly on its own non-legal terms (is oat milk milk?). But it’s certainly not good enough when thinking legally about legislation. I’m biased, but I reckon legal thinking about the meaning of legal texts—what in the UK we call statutory interpretation—is miles more interesting, nuanced, important and complicated than philosophical wordgames. This Supreme Court judgment is a bit of a masterclass in statutory interpretation from Lords Hamblen and Burrows, with an interesting separate but concurring judgment from Lord Leggatt.
The starting point of the analysis is the legal presumption that an “updating” construction should be put on legislation—it normally means what its text means now, not, normally, what it meant when it was enacted. It’s immediately obvious that this presumption is the opposite of the “originalism” you often hear talked of by American constitutional lawyers.
Lords Hamblen and Burrows explain this idea that legislation is “always speaking” at para. 29 of their judgment:
What is meant by the always speaking principle is that, as a general rule, a statute should be interpreted taking into account changes that have occurred since the statute was enacted. Those changes may include, for example, technological developments, changes in scientific understanding, changes in social attitudes and changes in the law. Very importantly it does not matter that those changes could not have been reasonably contemplated or foreseen at the time that the provision was enacted.
But the “always speaking” presumption of updating construction is not the only applicable principle in the case. The context of this tax dispute was that the UK was allowed to zero-rate newspapers because of an exception in EU VAT law which allowed this. The dispute relates to a period when the UK was in the EU, which is why EU legal principles and case law are considered throughout the judgment.
In EU law, national exceptions like this to a general principle (here, that the supply of goods and services should attract VAT) are to be interpreted strictly, or narrowly if you like. Lords Hamblen and Burrows derive that principle from a number of European cases, but as they say, it is a well established EU law idea.
In that context, they say at paragraph 48,
the always speaking principle … has to be applied having regard to the EU law constraints imposed by the standstill provision and the principle of strict interpretation of exemptions … Here these constraints mean that the always speaking principle is significantly limited so as to ensure that it does not conflict with the requirement for zero-rating for newspapers to be strictly construed and not extended.
Against that background, the court concludes that there’s just too much difference between hard copy and digital editions to see the digital version as a “newspaper” within the meaning of this particular legal text (paragraphs 57 and 58):
the technological development that has led to digital editions is a radical one which takes one a long way from the physical item and opens up all sorts of possibilities for interactive communication that were not possible with print newspapers. … Although … the content of the digital editions is the same or very similar to physical newspapers, it is clear that digital newspapers are in other respects very different from print newspapers.
In our view, therefore, having regard to the constraints of EU law, the always speaking principle cannot be applied so as to interpret newspapers as covering digital editions.
Lord Leggatt gives a concurring judgment (in other words, he agrees with the result but he thinks his legal reasoning to get there is different enough to be worth drawing attention to) amounting to a historical and legal deconstruction of updating construction. He concludes (para. 90) that no such presumption applies when interpreting laws in the light of technological change:
Whereas there is a presumption, in deciding what rights and obligations a statute creates, that current social values and scientific knowledge should be applied, the advent of new technology seems to me an essentially neutral factor. There is no equivalent justification for any general rule or presumption that a statute is intended to apply to a newly invented object or process.
He discusses the important difference between meaning and application, or sense and reference, with a quote from the famous philosopher Quine, before he concludes (para. 96):
For these reasons, I do not consider that anything which can be described as an “always speaking doctrine” has a role to play in this case. There is no reason why the fact that digital editions did not exist when provision for the zero-rating of “newspapers” in the UK was originally made … should give rise to any presumption that the term should be read as including the digital editions after they were invented. When technological progress occurs, the proper approach is simply to ask in accordance with ordinary principles of interpretation whether the newly invented object falls within the meaning of the statutory language, interpreted in the light of the legislative purpose.
The majority, then, holds that the “always speaking” presumption of updating construction does apply when considering questions like this, but in this EU law context is rebutted or outweighed by a different interpretative principle; while Lord Leggatt thinks no such presumption applies to this sort of thing in the first place.
Large sums of money can turn on the legal application of interpretative rules and presumptions like this, as can the success of public policy, guilt and innocence, and individual freedom: it matters hugely to business, governments and individuals. It’s the worldliness of statutory interpretation that I think makes it so fascinating.
Lord Burrows gave an excellent lecture earlier this year on statutory interpretation, by the way, which I recommend to anyone who’s interested in this subject.