engagement, rules, news



The decisions of government and regulators can have a major impact on businesses: new rules and regimes create opportunities and close-off others; subsequent interpretations can create liabilities. Nowhere is this more evident than in the current political climate as the potential for Brexit to result in new regulation, hastily produced, looms large.

It is important for regulated businesses to engage early in these processes, to use the law to optimise their commercial position.

The good news, with limits

Public bodies must remain impartial and logically reasoned when creating, interpreting and enforcing rules. Superior law such as the Human Rights Act or EU regulations cannot be overridden by new rules set in place by these organizations; rather they require them to act using only their allotted powers while ensuring decisions are fair, sensible, and justifiable.

Good practice also means that new policy and regulation will usually emerge from discussion and consultation, giving an opportunity for lobbying, debate and input.

Businesses can use specific challenge processes, appeals and judicial review when public bodies have not acted as required and when the outcome has been prejudicial to them.

What are the key points to keep in mind?

What are you trying to achieve as a business? How can the law help?

When regulatory obstacles arise, there is an opportunity to use legal and evidential points strategically. With a creative approach and the right timing, it's possible to find solutions that lead you toward your desired commercial goals — no matter what challenges may stand in your way.

Engage early and do not put off thinking about potential challenges

As soon as proposed rules and regulations appear on the scene, it's time to start looking at potential legal issues. Before implementing them, ask yourself: Is there actual authority? Could they bring about their desired results efficiently? Will existing laws be affected by these measures? Are all of the details in place for smooth operation? And if not - is a lawsuit the best way forward from here?

Early engagement is particularly important because once new rules and regulations are introduced, the scope for subsequent challenge to them is severely reduced:

most statutory challenges, and judicial review options, are subject to strict and short time limits, and limited to narrow legal points. Judicial review applications must be made promptly and in any event within three months;

the courts will not interfere with decisions about political, spending and policy priorities (so you need to argue these before decisions are taken);

the courts are deferential to expert regulators’ decisions.

Some recent examples

Sustainable Development v BEIS - do not delay:

Don't wait too long to dispute an administrative decision – otherwise, you risk losing your chance at judicial review. Even if the court is disinclined to re-open a government judgment, there are still steps that can be taken in order to seek recourse and advocate for justice within established systems.

Ofgem v Npower - making the right challenge at the right time:

Ofgem issued a direction that Npower take part in a switching trial. Npower failed to comply. Ofgem next issued a statutory order that Npower comply with the direction. Npower’s statutory challenge to the order was unsuccessful because its real argument was with the original direction, which it should have separately challenged via judicial review.

Tempus v European Commission - using a legal challenge to achieve (perhaps) a business aim:

Tempus, a Demand Side Response business, recently shook things up within the UK's Capacity Market regime by challenging the European Commission. The EC had not followed its own guidelines with regards to allocating assistance between traditional electricity generators and DSR; Tempus successfully argued for further scrutiny of this discrepancy. While it remains uncertain whether or not these efforts will result in improved conditions for DSR businesses, one thing is certain - they have certainly made their presence felt!

Deferring to regulators on areas of expertise - Heathrow Airport Limited v Office of Rail and Road:

The court declined to interfere with a regulator’s specialist appraisals, but not on legal issues – R (UK Power Networks (Operations) Ltd) v Gas and Electricity Markets Authority: the regulator misinterpreted the statute so its decision was overturned, and Intercontinental Exchange Inc v Competition and Markets Authority – the regulator had to look at a decision again when it failed to give reasons.