Streamlined appeals system to support growth
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Proposals to streamline the processes for businesses appealing a decision by an economic regulator or competition authority are announced
New proposals to streamline the processes for businesses appealing a decision by an economic regulator or competition authority have today been announced by Business Minister Jo Swinson.
There are concerns that the appeals process is too slow and costly in some sectors, with too much paperwork, and not enough opportunity for businesses and regulators to engage before decisions are made, impacting on economic growth. Today’s new proposals include:
- making the standard of review for appeals more consistent between sectors, focusing appeals on identifying whether regulators have made material mistakes
- providing consistency as far as possible between appeal routes in different sectors, to reduce complexity and make sure that the expertise of the main appeal bodies is used most effectively and
- measures to encourage better engagement between regulators and firms before decisions are made through better information sharing.
Business Minister Jo Swinson said:
The UK’s appeal rules work well and we have a world-class framework in place. But we also recognise that there is room for improvement to support growth.
It is only right that firms can hold regulators and competition authorities to account when they think the wrong decision has been reached. But it is in nobody’s interest that appeals end up being unnecessarily lengthy and costly.
A new streamlined system will mean that businesses see their appeals sorted quicker and that they and regulators spend less time and legal resources on disputes. Reduced delays will help build a stronger economy and provide better outcomes for consumers.
Appeals are a key way of making sure that firms have a right of challenge so that regulators and competition bodies are held to account. Over the last five years there have been more than 50 appeals of regulatory and competition decisions. It is estimated that the current appeals system costs around £22 millon per year.
However, as the recent 4G spectrum auction highlighted, appeals and the threat of litigation can delay important decisions preventing the roll out of key infrastructure developments for consumers. Recent appeals have included challenges against decisions of the aviation, water, communications and energy regulators, along with competition bodies the Office of Fair Trading and Competition Commission. The reforms address concerns that:
- appeals are lengthy and expensive for businesses and regulators, slowing down regulatory decisions and hampering growth.
- there are strong incentives for firms to appeal which has led to a significant number of appeals in some sectors such as telecoms.
- engagement between regulators and firms before decisions are made is not as good as it might be, resulting in more appeals.
- the appeal process does not put enough onus on the material errors made by regulators, allowing firms to submit burdensome and unnecessary documents to regulators.
- the appeals process differs in each sector and this can be confusing for firms.
Recent appeals include:
The appeal against Ofcom’s proposals for the award of 2.6GHz spectrum in 2008 took 14 months to resolve. This was a significant contribution to the delay of the auction of the 2.6GHz spectrum which was finally awarded in the 4G spectrum auction in early 2013, together with the 800MHz band.
Albion Water case
An appeal in relation to one of Ofwat’s investigation led to a series of appeals and subsequent decisions by the CAT and Court of Appeal, over a period of five years (2004 – 2009).
BSkyB Pay TV case
In the British Sky Broadcasting Limited (Conditional access modules) case, there were more than 35,000 pages of submissions and evidence, and 41 witnesses (including 14 experts), of whom 25 gave oral evidence. The appeal was brought in 2011 and lasted around two years in total.
Notes to editors:
- The consultation can be found at the GOV.UK website: https://www.gov.uk/government/consultations/regulatory-and-competition-appeals-options-for-reform
- The consultation will run for 12 weeks, until 11 September 2013.
- The Budget committed that “By summer 2013, the government will consult on reforms, including:
- the grounds on which other regulatory appeals and appeals of competition decisions can be brought, to make them clearer and more consistent;
- streamlined processes and strengthened governance arrangements for the Competition Appeal Tribunal (CAT) and Competition Service, and a full review of the CAT’s rules;
- bringing greater consistency across sectors, for instance, on which appeal body hears each type of appeal;
- reducing opportunities to game the system, for instance by presenting new evidence during appeals; and
- introducing fast-track procedures to achieve quicker judgments in simple cases.”
- The regulators and competition authorities include:
- Competition Commission
- Office of the Rail Regulator
- Civil Aviation Authority
- Northern Ireland Utility Regulator
- Impact Assessment estimated the cost of the current appeals system as £21.79m. The breakdown of the estimated costs to the various affected parties are £11.61m for appellants, £3.43m for regulators, £1.50m for courts/tribunals and £5.25m for interveners.
- The appeal bodies include:
- Competition Appeal Tribunal
- Competition Commission
- High Court, Court of Session and High Court of Northern Ireland
- The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.