Autumn statement proposes new measures designed to ‘minimise the burden of economic regulation’ to make challenges to decisions by watchdogs ‘quicker and easier’
The ability of big companies to use armies of lawyers to prevent regulators from introducing consumer-friendly measures will be curbed after the chancellor’s autumn statement promised to make appeals quicker and easier.
Legal action and threats of litigation against the media and telecoms watchdog Ofcom in particular have held up the auction the new 4G mobile spectrum, overthrown a long battle to force BSkyB to share its sports and films programming with other channels, and delayed cuts to the cost of calling a mobile phone.
The government on Wednesday promised three new measures, designed to “minimise the burden of economic regulation”, including reviewing the appeals processes to make challenges to decisions by watchdogs “quicker and easier”.
There will also be incentives to encourage watchdogs to intervene more readily where markets are failing to deliver for consumers, and there will be greater transparency on their fees.
It is understood the government wants the appeals process to change so spurious challenges can be rapidly weeded out and genuine complaints dealt with more quickly.
The changes, which will be set out in detail in spring by the Department for Business, Innovation and Skills, apply to all economic regulators including Ofgem for electricity and gas, Ofwat for water and sewerage, the Civil Aviation Authority and the Office of Rail Regulation.
Ofcom has been particularly vocal about the need for change. Its chief executive Ed Richards said earlier this year that the UK system was “too legalistic and too open to gaming” by companies able to pay for large legal teams, and that “everything we do now is subject to the huge shadow of threat of litigation.”
An Ofcom spokesperson said on Wednesday: “Ofcom welcomes the Government’s plans to reform the appeals process. A quicker and more focused appeal process will help us to regulate the communications market more effectively, to the benefit of UK consumers and businesses.”
The first major auction of UK airwaves since 2000 will take place in January next year, but was originally scheduled for July 2008. A combination of a change of government and legal threats from mobile operators repeatedly delayed the process.
Ofcom’s battle to loosen Sky’s grip on film and sports broadcasting, which had seen the issue pass to the Competition Appeal Tribunal and eventually the Competition Commission, took five years and ended in a defeat for the regulator.
The latest round of cuts to the cost of calling a mobile was blocked for 14 months by legal challenges from network operators before being approved on appeal earlier this year.
And a move to allow consumers to transfer their mobile number from one network to another in a matter of hours rather than days has been held up since 2007, following a 2008 legal challenge by Vodafone.
A spokesman for Three, the UK’s smallest mobile network, said: “We welcome the proposal to focus regulators on promoting competition. Ofcom has a clear duty to promote the interests of consumers through competition, but too often it is frustrated by petty legal challenges.”