Shvidler and the rise of unqualified deference

Roger Gherson asks whether a recent Supreme Court judgment risks undermining judicial oversight.

When the UK’s Supreme Court delivered its judgment in Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs; Dalston Projects Ltd v Secretary of State for Transport [2025] UKSC 30 (29 July 2025), it addressed more than two individual challenges. These appeals were expressly treated by government as ‘test cases’ for the UK’s autonomous sanctions regime, and the Court acknowledged it was giving guidance of general application. The importance of the decision therefore lies not only in the outcomes for Mr Shvidler and Dalston Projects, but in the template it sets for future challenges under section 38 of the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), particularly around proportionality, evidential burden, and the degree of deference afforded to ministerial assessments in the sanctions context.

The Appellants in this matter were:

• Mr Eugene Shvidler who challenged his personal designation, arguing that it unjustifiably interfered with his rights under Article 8 and Article 1 of Protocol No. 1 (A1P1) of the European Convention on Human Rights (ECHR),and imposed severe, open-ended restrictions on his everyday life. Soon after the invasion of Russia, Mr Shvidler – a British national – was designated on the basis that his relationship with Roman Abramovich and connections with Evraz plc made him an ‘involved person’ under Regulation 6 of the Russia (Sanctions) (EU Exit) Regulations 2019 (the ‘2019 Russia Regulations’). As part of his UK designation, Mr Shvidler was made subject to a world-wide asset freeze.
• Dalston Projects Ltd (M/Y Phi), the legal owner of the superyacht Phi, beneficially owned by Sergei Naumenko, challenged a ministerial direction. Neither Dalston nor Phi are designated under any sanctions regulations. Instead, the Transport Secretary issued the ‘Phi Direction’, prohibiting the yacht from departing, moving, or operating in UK waters. That distinction matters: the test case bundle examined both a designation decision and the proportionality of a transport direction issued in parallel.

Legal framework: section 38 SAMLA and proportionality

Section 38 SAMLA provides the statutory route to challenge a designation following a ministerial review under section 23 of the same Act. In practice, the sanctions review takes the form of a challenge on judicial review grounds, including requiring the court to decide proportionality, i.e. whether interferences with ECHR rights (commonly Article 8 and A1P1) are justified.

The Supreme Court applied the familiar four-limb proportionality test. This article does not rehearse each limb. Instead, it focuses on the constitutionally significant features of the majority’s approach: cumulative-effect reasoning and the breadth of deference afforded to the executive (including the statement that courts are ‘wholly unqualified’ to second-guess efficacy assessments), contrasting them with Lord Leggatt’s dissenting judgment.

Cumulative-effect reasoning

The majority of the Supreme Court justices accepted that sanctions work through the aggregate weight of measures, rather than the provable effect of any single designation. In practical terms, a designation can be upheld if it plausibly contributes to a wider strategy, even where individualised impact evidence is thin. The Supreme Court endorsed the proposition that the effectiveness of a sanctions regime depends on its cumulative effect, and noted the Government’s description of sanctions as one element of a broader foreign policy strategy.

The relevant statutory framework, the Russia (Sanctions) (EU Exit) Regulations 2019, requires ‘reasonable grounds to suspect that [a] person is an involved person,’ creating an individualised evidential threshold at the designation criteria stage. The cumulative effect approach endorsed by the majority operates at the discretionary stage, where the decision-maker considers whether the designation is appropriate, having regard to the broader foreign policy strategy and the overall effectiveness of the regime. This allows the effectiveness of the regime to be assessed by reference to its cumulative operation, rather than the measurable effect of any single designation (‘[T]he effectiveness of a sanctions regime depends on the cumulative effect of the measures imposed under that regime’, Shvidler, para 197).

In practical terms, once the Secretary of State has reasonable grounds to suspect that Mr Shvidler meets the statutory criteria (i.e. is an ‘involved person’), the Government need not prove that his individual designation will itself produce a discrete, measurable effect. It is sufficient that he falls within a category whose designation is rationally connected to the aims of the regime, because the aggregate imposition of measures on that category is assessed to increase pressure on the Russian state. Direct, case-specific proof that his designation alone would further the aim is not required.

Adapting those observations to the present case, we recognise that it is difficult both for the Government and for the court to understand what factors may or may not exert influence on President Putin and his government as regards the prosecution of the war. It is also difficult to assess whether any particular sanctions measure, or indeed any of the other measures put in place by the UK and its international partners, has had or may in future have an influence or effect. (Shvidler, para 179).

The Court’s acceptance of this rationale sits in tension with the logic in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39. In Bank Mellat, the Supreme Court struck down targeted sanctions against an Iranian bank precisely because the connection to the policy aim was tenuous. There, the justices demanded evidence of a demonstrable link between the specific target and the mischief to be addressed.

By contrast, Shvidler leans heavily on the ‘cumulative effect’ doctrine, the idea that sanctions operate through the aggregate weight of multiple designations. This argument is not without intuitive appeal, because foreign policy measures often work through symbolic – as well as direct – channels as noted in the judgement, para 179: the Government’s report to Parliament on the 2019 Regulations described the sanctions regime as ‘one element of a broader strategy to achieve the UK’s foreign policy goals’.

Shvidler leans heavily on the 'cumulative effect' doctrine, the idea that sanctions operate through the aggregate weight of multiple designations.

Although the majority distinguished Bank Mellat on the basis that the present regime is category-wide rather than singling out one actor, when cumulative logic is transplanted into the legal proportionality test, it risks replacing evidence-based analysis with speculation and conjecture. Evidence about the individual is displaced by assumptions about the aggregate.

Lord Leggatt’s dissent from the majority decision was particularly forceful on this point, describing the Government’s case as ‘no more than armchair theories’. Without individualised proof, Lord Leggatt found, cumulative logic becomes a self-justifying loop: the regime works because we say it works, and it works better if we add more names to it.

When cumulative logic is transplanted into the legal proportionality test, it risks replacing evidence-based analysis with speculation and conjecture.

An ‘unqualified’ deference

Paragraph 193 of Shvidler crystallises the Supreme Court’s stance. It treated the Transport Secretary’s ‘informed assessment’ (carried out on his behalf by ‘experienced officials’) that the Phi Direction will contribute to pressure on the Russian regime, ‘even if that pressure is exerted in subtle and invisible ways’ as ‘plausible’. The Supreme Court added that this is precisely the kind of judgement ‘for which a court is wholly unqualified in constitutional terms and on grounds of relative expertise to substitute its own view’.

This is more than a nod to expertise; on the central question of efficacy, it represents a conscious-ring-fencing of judicial competence. The Supreme Court did not merely apply a rationality standard to the Secretary’s conclusion; it emphasised that this framing and implementation of foreign measures fall within the exclusive domain of the executive.

That stance risks stretching judicial restraint to the point of risking abdication in practice. By framing foreign policy determinations as laying beyond judicial competence, the Supreme Court insulates executive reasoning from meaningful scrutiny. Where a ministerial policy is rational, coherent and goal orientated, the court may well justifiably feel that the framing and implementation of that policy lies within the competence of a democratically elected Government. No argument there. But where there are grounds to challenge the rationality of a policy or its supposed connection to the aims pursued, we are in a very different place indeed, if the highest court in the land decides that it is ‘wholly unqualified’ to review and, where necessary, remedy the Executive’s transgression.

The ‘subtle and invisible’ effects of a sanctioned person’s presumed ability to exert pressure on a foreign regime may be real, but those very same qualities make them resistant to evidence-based challenge, and therefore easy to assert, hard to disprove, and potentially impossible to review.

The danger here is structural: if a court characterises itself as ‘wholly unqualified’ to question the UK Government’s sanctions policy, any proportionality review attaching to a specific target risks becoming a ceremonial nod rather than a substantive safeguard: a rubber-stamping exercise. What remains, in these circumstances, is a model in which presumed ministerial expertise – rather than evidence-led justification – becomes the operative threshold for upholding designation decisions. It is precisely at this point that judicial oversight was always meant to bite.

Lord Leggatt’s dissenting judgment: a constitutional alarm bell

Lord Leggatt’s dissenting judgment stands as a formidable addition to the British tradition of judicial warnings against executive overreach. He emphasised the real-world severity of the regime: it is a criminal offence for a designated person to use their own funds, ‘including even to buy food’, without a licence (paras 261–262). In the Shvidler case, he concluded that ‘the restrictions are unjust and disproportionate’ (para 324). (He nevertheless accepted the lawfulness of the Phi direction on its facts, underscoring that his objection was as to approach, not outcome.)

Lord Leggatt was left unconvinced that the Government had demonstrated any rational connection between Mr Shvidler’s designation and the stated purpose of the sanctions regime. He likened the reasoning to little more than assertion, noting the absence of concrete evidence of Mr Shvidler’s ability to influence Russian decision-making.

This dissent recalls Lord Atkin’s famous words in Liversidge v Anderson [1942] AC 206: ‘In this country, amid the clash of arms, the laws are not silent… They speak the same language in war as in peace’.

Both dissenting opinions reject the idea that emergencies, whether brought about by war, terrorism, or geopolitical crisis, allow the courts to step back from their role as guardians of legality. Lord Atkin’s and Lord Leggatt’s dissents highlight the danger that deference in hard cases becomes habit, and habit becomes doctrine.

Why section 38 now under-protects rights

Section 38 SAMLA sanctions review ought to operate as a safeguard. In practice, after Shvidler, the effectiveness of that safeguard is in serious doubt. The statutory gateway still bites – there must be reasonable grounds to suspect that the designated person is an ‘involved person’ – but the discretionary determination (including on proportionality grounds) which follows is so protected by Shvidler as to be virtually beyond challenge.

The war will end; the jurisprudence will not. The Shvidler template brings in cumulative-effect reasoning and virtually unqualified deference to ministerial expertise. In a polarised political climate, it is all the more important that the judiciary is able to exercise robust supervision over the executive, especially in matters touching national security and foreign policy. Shortcuts taken in emergencies have a habit of outlasting the emergency.

By framing foreign policy determinations as laying beyond the judicial competence, the Supreme Court insulates executive reasoning from meaningful scrutiny.