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.

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 million per year.

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.

One recent appeal involved Albion Water, which launched a claim for damages against Welsh Water after it was priced out of supplying water to a paper mill in Shotton, Flintshire. In 2004 the regulator Ofwat decided there had been no infringement of the Competition Act and therefore Albion went to the Competition Appeal Tribunal.

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.”

The consultation runs for 12 weeks until 11 September 2013 – see it here