Digital Economy Bill - Committee (4th Day)

Part of the debate – in the House of Lords at 4:15 pm on 8th February 2017.

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Photo of Lord Keen of Elie Lord Keen of Elie The Advocate-General for Scotland, Lords Spokesperson (Ministry of Justice) 4:15 pm, 8th February 2017

My Lords, I am obliged to the noble Lord, Lord Clement-Jones, for raising this matter because it has generated a great deal of heat and debate in the context of the Bill. I appreciate the point made by the noble Lord, Lord Stevenson, with respect to the number of responses there have been. I just emphasise that judicial review is a form of judicial oversight, and a very effective one, but I will elaborate on that in a moment.

We are aware that the major telecoms operators in particular, and their agents, have lobbied vigorously and in detail on this point. Indeed, the noble Lord, Lord Clement-Jones, brought out many of the points that have been made by their agents in the course of that vigorous and detailed lobbying. I shall not go into the detail of Ofcom’s position on this. It has expressed its position very clearly and we understand it. What I would say is that there is no single position for all utility sectors, and both judicial review and appeals on the merits may be used in the same sector for different kinds of appeals. It is not a black and white situation.

The Government’s case is not that this change is needed to ensure consistency with other utility sectors but that the public interest will be best served in the communications sector by an appeals regime that focuses on errors which Ofcom is alleged to have made, rather than asking the court to reach a different conclusion. Let us remember that Ofcom is a qualified regulator and its decisions are entitled to respect. They are informed decisions and they are not irrational. They are not determined on the toss of a coin. That is why judicial review is an appropriate approach.

The noble Lord, Lord Clement-Jones, also talked about consumers. I find that interesting. Perhaps I may refer briefly to the Which? response to Clause 75. It sees this measure as one of the most important currently contained in the Digital Economy Bill, saying that it will give the regulator the power and confidence to take the necessary actions to protect consumer interests without fear of costly and lengthy litigation procedures. Introducing a judicial review standard for appeals in telecoms will mean that decisions made by Ofcom in the interest of consumers should be easier to implement and quicker to take effect. That is a reflection of Ofcom’s own view of the matter. This is not necessarily about coming to the aid of Ofcom but about recognising these matters from the perspective of the consumer. That is extremely important.

Currently, appeals brought under Sections 192 to 196 of the Communications Act against Ofcom’s regulatory decisions are decided “on the merits” by the Competition Appeal Tribunal. That exceeds and, as the noble Lord, Lord Clement-Jones, acknowledged, effectively gold-plates Article 4 of the EU framework directive, which requires that the merits of the case are duly taken into account in any appeal. That is not quite the wording of the proposed amendment.

The result of this over-implementation is an unnecessarily intensive and burdensome standard of review that can result in very lengthy and costly appeals litigation, which in turn can hinder timely and effective regulation. Some of the appeals that have taken place have done so over extraordinarily lengthy periods. Of course, the very large communications operators are in a position to fund that sort of appeal process. Clause 75 will change the standard of review so that the Competition Appeal Tribunal will decide appeals against Ofcom’s decisions by applying the same principles as would be applied by a court on an application for judicial review and, in particular, judicial review of other administrative actions. This will focus appeals on the key questions of the legality and reasonableness of Ofcom’s decision-making.

The noble Lord, Lord Stevenson, suggested that there might be cases in which there was simply no merit in a decision. If that was so, and if Ofcom proceeded without reliance on the facts of a particular case, that would be amenable to review under a judicial review standard.