First, in the most basic
terms, which are required here, the fundamental issue
with a discretion is how it is exercised. Does the official make the decision one
way or another? In the illustration above, does the Director of Pensions grant
the pension or not grant it?
But, depending on how the discretion is framed, there may be other parts to
this issue. One common additional power in a discretion is power to determine
the nature or quantity of the consequences. For example if a tribunal is
awarding a pension it may also be vested with power to determine the amount
of the pension. Another common additional power consists of power to
impose conditions. For example, a discretion may be written in terms whereby
a person may receive a pilot’s licence on condition that, until the official
otherwise orders, they can fly only in daylight hours.
Second, the option to exercise the power in one way or another is logically
translated into the question as to what is the best or most just way to exercise
it, since there is no other logical basis on which to do so. This leads directly
and neatly to the next step, which is to examine how the issue is resolved,
where the question of the best way in which to exercise the discretion is further
considered.
Resolving the Issue
Introduction
The key to
understanding how an issue of discretion is resolved is to
appreciate a simple fact about the exercise of a discretion that was
propounded above. Rationally, the only proper basis for this decision is to
take the course of action that brings about the most just outcome. In the
example, the Director of Pensions exercises the discretion in favour of an
unemployed applicant for a pension when it is more just if they do so than if
they do not do so.
Net Benefit
In a legal context, a chosen course of action is labelled the most just if it is the
best course of action taking all relevant considerations into account. What
constitutes the best course of action can be explained by reference to the
concept of net benefit. At the basis of net benefit is a simple proposition:
every action potentially causes positive and negative effects, that is, it causes
benefits and costs. In principle the benefits of a decision can be summed, as
can the costs. Then total costs can be subtracted from total benefits to yield a
net benefit. Net benefit, most conveniently, is a single measure of the worth or
value of a course of action.
In the light of this further analysis, the decision making rule can be
reformulated. A decision to exercise the discretion one way or another should
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