The CAT’s approach to Subsidy Decision Reviews: Fast, cheap and simple?

The Subsidy Control Act 2022 (the “Act”) came into force in January 2023 and replaced the European Union state aid regime. Our previous article provides an overview of the key features of the Act.

An ‘interested party’ can apply to the CAT for a review of a subsidy decision (s. 70(1), the Act). An ‘interested party’ – that is, anybody “whose interests may be affected” by the subsidy (such as a potential competitor of the subsidy beneficiary) – may, therefore, bring a challenge on the basis that a public authority has not complied with the requirements for granting a subsidy as set out in the Act.

The Act’s subsidy review regime is not limited to the review of decisions to grant individual subsidies.

A ‘subsidy decision’ also includes a public authority’s decision to make a subsidy scheme. Therefore, references in this article to the award of a subsidy should be read as also including the making of a subsidy scheme.

To challenge subsidies given under a subsidy scheme, the interested party’s application to the CAT must be for a review of the public authority’s decision to make the subsidy scheme, and not for a review of the decision to give a subsidy under that scheme (s. 70(2), the Act).

The CAT’s procedural approach

An application for a review of a subsidy decision must be made by filing a notice of appeal (s. 70(3), the Act). There are strict time frames for bringing challenges to subsidy decisions.

Under the Act, an interested party must make an application to the CAT within one month from: [1]

1. The date of the details of that subsidy being posted on the subsidy database; or
2. If there is no requirement to enter the subsidy on the subsidy database,[2] the date when the interested party first knew, or should have known, of the making of the subsidy decision.

However, if an interested party submits a pre-action request for information about the subsidy awarded, the public authority must, within 28 days of that request, provide information that would assist the interested party in determining whether the subsidy was awarded in compliance with the Act (s. 76, the Act).

The interested party must then bring its challenge within one month of the date that the authority provides that information. When considering whether to challenge a subsidy decision, potential claimants therefore need to act quickly, and without undue delay (for which, see below).

Where an application is made to the CAT for a review of a subsidy decision, the subsidy remains in effect during the review, unless the CAT directs otherwise (s. 70(6), the Act).

The Standard of Review

When determining subsidy review applications, the CAT must apply the same principles as would be applied by the High Court in judicial review proceedings (s. 70(5), the Act). Conventional judicial review principles are those of lawfulness, rationality and procedural fairness.

There is clear direction from the Court of Appeal[3] that, in respect of subsidy decisions, the court is not to apply a separate proportionality assessment. This is because the court is to refrain from substituting its judgment for that of the decision maker.

Accordingly, the likelihood of a successful legal challenge to a public authority’s assessment of the subsidy control principles under section 12 of the Act is low, with judicial intervention limited to circumstances of clear legal errors.

However, a challenge being brought by Bristol Airport against the Welsh Government’s subsidy to Cardiff International Airport will likely bring the application of the subsidy control principles into question (see our article on this challenge). It will be interesting to see how the CAT approaches this.

The remedies available to a successful applicant in respect of a subsidy control challenge are the same as those available in respect of judicial review proceedings.

These include a mandatory order, a prohibitory order, a quashing order, a declaration, or an injunction (s. 72, the Act). If one of these remedies is granted, the CAT may also make a recovery order (ss. 72 and 74, the Act).

Additionally, if the CAT grants a quashing order to set aside the subsidy decision, it may refer the matter back to the public authority to make a new subsidy decision that is in accordance with the CAT’s ruling.

Like the High Court’s powers in respect of judicial review proceedings, on an application for the review of a subsidy decision, the CAT:

1. May refuse to grant relief if it considers that there was undue delay in making the application, or that granting the relief would be likely to cause substantial hardship or prejudice to someone (s. 72(8), the Act); or
2. Must refuse – except for reasons of exceptional public interest – to grant relief if it appears to it highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred (ss. 31(2A)-(2B) Senior Courts Act 1981; s. 72(9), the Act).

As to (i) above, the Court of Appeal has recently indicated that appellants seeking to quash subsidy decisions (as opposed to challengers seeking softer financial remedies) are likely to face a particularly high bar when it comes to undue delay.[4]

Appeals on a point of law arising from the CAT’s decision are made to the Court of Appeal (s. 75, the Act).

Fast, cheap and simple

The intention is that the CAT will deal with subsidy control challenges in a swift and efficient manner. This was demonstrated by the first legal challenge under the Act – The Durham Company Ltd v Durham County Council [2023] CAT 50 – whereby judgment was handed down less than six months after the application was filed (see our article on the Durham case).

Sir Marcus Smith (the former President of the CAT) made clear his expectation that the CAT jurisdiction is to be “fast, cheap and simple”.[5] The rationale for this is that the legal costs of challenges should not negate the financial advantages of subsidies.

The CAT is, therefore, expected to case manage proceedings in line with this approach, with careful cost management to keep disclosure, witness and expert evidence to the minimum, and the issues for review narrow in scope.

Although Sir Marcus Smith’s decision to impose cost capping in the Durham case was overturned on appeal – with the Court of Appeal finding that the CAT had no jurisdiction to impose a cost-capping order – his aim of seeking to ensure that the costs of subsidy control challenges do not become excessive was accepted by the Court of Appeal.[6]

While there is a clear desire for the CAT to operate efficiently – and aside from the strict time limits for challenging subsidy decisions – the Act does not require the CAT to review subsidy decisions in this streamlined, low-cost way.

Looking ahead, it remains to be seen whether the CAT consistently adheres to this “fast, cheap and simple” approach, or whether it might deviate from this approach depending on the complexity of the case at hand.

As an additional reference point, in the second subsidy challenge brought before the CAT, Weis v Greater Manchester Combined Authority¸ the CAT has moved less expeditiously. We are still awaiting judgment 13 months on from registration of the notice of appeal.

Future developments

We are still in the early days of the Act, which makes it hard to predict future trends. To date, only three challenges have been brought under section 70 of the Act: Durham; Weis v GMCA; The New Lottery Company Ltd and Others v The Gambling Commission (notice of appeal filed on 8 May 2025; case management conference listed for 11 July 2025).

Additionally, on 9 July 2025, the press reported that a fourth subsidy control challenge is being brought by Bristol Airport against the Welsh Government’s subsidy to Cardiff International Airport, although the CAT has not yet published details of this appeal.

Future subsidy control challenges may arise in connection with public procurement decisions. Provided a public authority awards a contract to the winning bidder in accordance with the relevant public procurement rules (i.e. ensuring fairness, transparency and value for money), it is unlikely that a subsidy would arise.

However, in the wider procurement context, the allocation of public resources by a public authority to the recipient could raise subsidy control issues.

For example, in certain circumstances, the direct award of a contract could give rise to a subsidy where the contract is awarded on non-market terms. In such instances, a subsidy control challenge could potentially arise as an ancillary ground to a procurement challenge.

As an example, although the claim failed, in R (on the application of Good Law Project Ltd) v Secretary of State for Health and Social Care [2022] EWHC 2468 (TCC), the claimant sought to allege – as one of a variety of grounds of challenge – that the award of three public procurement contracts amounted to state aid under the EU state aid rules (the precursor to the Act). Similarly, The Gambling Commission case follows extensive procurement litigation between the parties.

At this early stage of the new subsidy control regime, it remains to be seen whether a general trend emerges of subsidy control challenges being used as ancillary grounds to wider procurement challenges. Further challenges are required to develop the case law in this area.

Sharpe Pritchard’s subsidy control team is experienced in advising on the interpretation and application of subsidy control legislation. Our experienced dispute resolution team advises both public authorities and challengers on a range of public law matters.

[1] Rule 98A, The Competition Appeal Tribunal Rules 2015.

[2] Under section 33(2) of the Act, there is no requirement to enter a subsidy on the subsidy database if: (i) the subsidy is given under a subsidy scheme; (ii) that scheme has been entered on the subsidy database; and (iii) the subsidy is not more than £100,000.

[3] R (British Gas Trading and E.ON) v Secretary of State for Energy Security and Net Zero [2025] EWCA Civ 209 at [89]-[90]

[4] R (British Gas Trading and E.ON) v Secretary of State for Energy Security and Net Zero [2025] EWCA Civ 209 at [44]-[47].

[5] Sir Marcus Smith’s speech “Subsidy Control: a view from the Competition Appeal Tribunal” dated 19 April 2023; The Durham Company Limited v Durham County Council, transcript of case management conference, 17 February 2023, page 3.

[6] Durham County Council v The Durham Company Limited [2023] EWCA Civ 729