The UK government on Wednesday published a consultation on streamlining regulatory and competition appeals. The press spin was that the proposals are all about preventing “armies of lawyers” from blocking consumer-friendly measures. In reality, although it is true that the proposals are designed in part to put a lid on litigation, the consultation contains a series of thoughtful suggestions – many of which are likely to attract widespread support.
Take, for example, the suggestion that there should be greater consistency in the available appeal routes. Someone at the Department for Business, Innovation and Skills has had fun mapping out the existing appeal routes for different decisions in the regulated sectors. The resulting table speaks for itself (figure 3.5 of the consultation):
The proposals would bring greater order to this framework. In broad terms, the suggestion is that: price controls and licence modifications should all be appealed to the Competition Commission; regulatory enforcement decisions should all go to either the CAT or the High Court (the consultation asks for views on which would be most appropriate); all decisions in the competition context – including those which could only be challenged by judicial review – should go to the CAT; and all dispute resolution decisions should go to either the CAT or the High Court (again, views are sought on the question of which would be most appropriate).
On the other hand, the most contentious proposals are likely to be the suggested changes to the standard of review which should be applied on appeals. Again the starting point is the observation that a degree of consistency should be introduced to tidy up the plethora of different standards which currently apply to regulatory appeals. However, the government also intends – crucially – to lower the applicable standard in many cases. Where decisions are currently reviewable only on judicial review grounds, that will remain the approach. For all other appeals, the proposal is that either (a) the judicial review standard should apply across the board, or (b) there should be a clear statutory statement of the grounds on which appeals can be brought.
The suggestion that all appeals should be subject to the judicial review standard is put forwards rather tentatively, and does not appear to be the government’s favoured option. The consultation does, however, note that the judicial review standard is a flexible standard which would if necessary accommodate itself to the circumstances of a particular case. In practice, this means that if there were particular reasons (most likely EU or human rights law) to depart from the classic Wednesbury grounds of review, that could be accomplished in the context of a flexible judicial review standard. Of course, the dreaded “armies of lawyers” would presumably need to be deployed to argue about the extent of the flexibility.
Government’s preferred option of having a clear statutory statement of the permitted appeal grounds also carries its own problems. The proposed grounds are: material error of law; material error of fact; material procedural irregularity; unreasonable exercise of discretion; or unreasonable judgments or predictions. On paper this may seem like a significantly more restrictive test than an appeal “on the merits”. But the practical reality is that all appeals, even appeals on the merits, raise points which could easily be fitted into one or more of the suggested appeal grounds. The main difference would be seen in appeals which are essentially challenges to a regulator’s judgment, which could only be made if the judgment was unreasonable. But even in that context, one has to ask how much real difference the proposed change would make: even in appeals on the merits, appeal courts are already slow to interfere with regulatory judgment calls.
There is then the question of whether it is actually desirable to tighten the appeal standard in the manner suggested. The consultation lists around 50 appeals in the regulatory and competition sectors over the last four years. It would be an interesting exercise to go through them and work out how many of the appeals on the merits were successful. Indeed, it is difficult to see how the trade-off between justice and certainty, which is at the heart of these proposals, can be considered without at least estimating how many bad decisions would go uncorrected if the proposals were to be implemented.
Perhaps most concerning is the impact of the proposals in the context of infringments of the Competition Act 1998 (or the equivalent EU provisions). Such infringements are seen as particularly serious, and can have uniquely damaging reputational and economic consequences. Regulators also cannot claim to have the best track record when it comes to making such decisions. Nor are such decisions essentially exercises of regulatory judgment: the Competition Act has either been infringed or it has not. Although the government is looking for consistency, there must be at least a decent chance that on reflection it will decide to keep the “on the merits” standard for competition law infringement appeals.
There are then a series of further suggestions to streamline the appeals process, all of which would make life more difficult for appellants. The most important suggestions are:
- Tougher rules on the admissibility of new evidence in appeals.
- Successful appellants should only recover their costs if the administrative body has behaved unfairly or unreasonably.
- It should not be possible to appeal non-infringement decisions under the Competition Act 1998 (although presumably such decisions would still be open to judicial review).
- The CAT should aim to resolve straightforward cases in six months and all other cases in twelve months.
- The CAT should have the power to limit the amount of evidence and expert witnesses.
- There should be a presumption that matters should be resolved on the papers wherever possible, and that oral hearings should be kept to an absolute minimum.