Merits review (law)

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'Merits review' is when a reviewer re-makes the decision under review.

For example, in Australia, if the Commissioner of Taxation assesses your taxable income at $100,000 and disallows an objection against that assessment, you can apply to the Administrative Appeals Tribunal ('AAT') for merits review. The AAT can decide for itself, based on any evidence before it, what your taxable income should be (whether that it higher or lower): Taxation Administration Act 1953 (Cth), Part IVC.

Merits review is distinguished from 'judicial review', where the reviewer (usually a court) can only overturn the decision under review if it was invalid (not merely wrong). Judicial review checks that the original decision-maker applied the right principles and applied them rationally to the evidence available at the time. The key distinction is that, under judicial review, the reviewer must accept the original decision-maker's conclusions on questions of fact and the original decision-maker's exercise of a discretion.

('Discretion' means that, given a particular set of laws and evidence, a decision-maker could validly make any one of a range of decisions; there is no one right answer. An example of discretion is when a criminal court sentences an offender. The sentence will be upheld on appeal unless it fell outside the range of reasonable answers, even if the appeal court thinks that a different answer within the range would have been more appropriate.)

A reviewer under judicial review may be empowered to, upon finding a relevant error in the decision under review, re-make the decision, or they may only be allowed to remit (send back) the decision to the original decision-maker with instructions about what principles to follow and how to avoid making the same error again.

Back to merits review, depending on the legislation that authorises the review, the reviewer may be able to take into account new evidence, or they may have to confine themselves to the evidence that was before the original decision-maker. The legislation under which the original decision was made may also affect whether facts which arose after the original decision was made are relevant or not.

In summary:

  • under judicial review, the reviewer must uphold the decision under review, even if they think a different decision would have been better, unless there is a flaw in the process by which the original decision-maker made the decision;
  • under merits review, the reviewer can start from scratch and decide what the right decision should be (which may or may not be the same as the original decision-maker's decision); they can form their own view of the facts and exercise their own discretion.