Regulatory Appeals

This note examines the background to a 2013 government review of appeals against regulators' decisions, and summarises subsequent developments.

The review was triggered by criticism, especially from Ofcom, that companies had become adept at using appeals to the Competition Appeal Tribunal (the CAT) to postpone much needed regulatory decisions (e.g. those aimed at promoting the roll-out of 4G mobile telecoms technology) with consequential damage to the UK economy. However, with one exception, there was no further word from the government following publication of the consultation document. The exception is that the 2016 Digital Economy Act provides that future appeals against Ofcom's decisions will be determined 'by applying the same principles as would be applied by a court on an application for judicial review' - in other words there will no longer be a rehearing of the merits of the decision.

The Case for and against Reform

The following notes summarise the case for and against change as made in 2013.. The consultation document is summarised here.

Ofcom was not the only body to have expressed concern or exasperation with the CAT. Critics focused on three main areas:


The first and main concern was that appeals process simply took far too long, and so encouraged appeals mainly aimed at delaying the implementation of unwelcome regulatory decisions. The 10 year Pay TV saga was a nice example - see this detailed note. Critics argued, back in 2012, that the Tribunal sometimes appeared to see itself more as an alternative competition authority/regulator than as a court. It is too ready to see, with the benefit of hindsight, how regulators could have done a better job. There was none of the crisp cut to the chase approach seen in some courts, and especially in the CMA's Code Modification Appeal hearings. The Tribunal, it is said, allows long and detailed arguments, delves into great detail, and produces enormously lengthy judgments, unintelligible to anyone other than real experts.

This was not a new problem. Back in 2008, after the first Albion Water appeal went on to the Court of Appeal, that Court said:

We conclude with a few more general observations on the proceedings before the Tribunal in this case. We recognise that the subject-matter is highly complex and that the merits jurisdiction of the Tribunal may call for extensive factual investigation in the course of appeals before it, all of which may contribute to the length of its proceedings and of its judgments . We are, however, concerned at the number of separate judgments in the case, the length of those judgments, the extent to which the sequential approach gave rise to duplication (which has made it more difficult for us to digest and analyse the Tribunal's reasoning for the purposes of this appeal), and the protracted nature of the proceedings overall. The interim judgment in December 2005 was 428 paragraphs long and, with headnote, takes up 90 pages of the printed law report. The main judgment in October 2006 was 985 paragraphs long and, with headnote and an annex, extends to 241 pages of the printed law report. The further judgment in December 2006 was 360 paragraphs long and, with headnote, takes up 91 pages of the printed report. Astonishingly, the judgment refusing permission to appeal in February 2007 was itself 133 paragraphs long. A yet further judgment on the issue of excessive pricing is still awaited.

We are sure that there must be a more efficient and speedier way of dealing even with complex cases of this kind. In particular, we urge the Tribunal to do its utmost to produce, if at all possible, shorter judgments for the benefit of everyone in the future. We recognise both that this court often produces judgments which are too long and that parties are inclined to take many points in cases of factual and legal complexity, but we cannot believe that it would not be possible to resolve the issues more concisely. We will try to do so ourselves and we urge others to do the same.

The CAT of course believed that this criticism was unfair. It is certainly true that the Tribunal moved a lot faster than the water regulator. The original complaint was made in March 2001 - 10 years before the above-mentioned claim for damages reached the CAT. (The follow-on Albion Water claim for damages was filed in June 2010 but did not receive its (12 day!) hearing until October 2012, and judgment was not handed down until March 2013.) Ofwat had previously carried out a three year investigation but found no infringement. Subsequent appeals were fought by Dwr Cymru and United Utilities all the way through to the Court of Appeal. Huge costs were incurred and the CAT showed itself much more sympathetic than Ofwat to the arguments of tiny Albion Water. Follow this link for the full tortured history of this litigation.

Other Criticisms

Second - this was to some extent losers' sour grapes but - some critics argue that some CAT decisions appear a little odd, betraying a rather less than ideal grasp of competition principles and practice. The initial Sky Pay TV decision may be in this category.

Another slightly strange decision may have been the finding of apparent bias in CC's Stansted Airport decision, but this was fairly quickly overturned in the Court of Appeal - but only after the CAT had refused permission to appeal - in itself a somewhat strange decision, which also had to be overturned by the Court of Appeal. The Stansted appeal process, from the first appeal against a March 2009 CC decision, was nevertheless not finally concluded until February 2013 - almost four years later, only seven months of which had been spent in the Court of Appeal. BAA, the appellant, was no doubt delighted at this delay, even though they finally lost.

Third, it is also alleged, by some, that the CAT has got into the habit of making very broad findings of fact. A higher court then takes these facts as uncontestable so the losing party cannot appeal using them. As a result, it is hard to appeal those decisions, which makes the court look rather good (as the Appeal or Supreme Courts seldom weighs in) but isn't necessarily in the interests of justice. Again, the Sky Pay TV case may be an example of this problem.

The Case for the Defence

The CAT had some decent explanations and points to make in answering the above criticisms. Its detailed response to the consultation was pretty hard hitting, including the comment that 'No case at all is made out in the Consultation for altering or reformulating the standard of review in competition appeals under the Competition Act 1998, whether from decisions of the Office of Fair Trading (“OFT”) / CMA or from regulators with concurrent powers. The Consultation contains little, if any, analysis of the competition system; it appears not to appreciate the significance of current expectations and developments at European level in relation to appeals in competition cases; and it threatens to undermine a key element of the Government‟s current reform of the competition system.' And the CAT was supported by all other respondents except Ofcom and some new entrant telecoms companies.

In particular:-

Later Developments

There were further anti-appeal rumblings in 2019 to which Peter Freeman responded, including - from para 12 - a superb summary of the original reasons - still valid today - for the creation of the modern enforcement system. 

One of the CAT's strongest argument is that appeals in the UK are the fastest in the EU.   But this doesn't alter the fact that appeals take a very long time, and 'justice delayed is justice denied'.  But the CAT argues that it is the regulators who usually ask for a lot more time to put in further evidence, for they hate the thought that they might be overruled. . And cynics note that both side's lawyers get paid much more for lengthy preparation and long trials.

Law professor Richard Whish wrote an interesting blog in 2020 (Do Competition Lawyers Harm Welfare?) in which he criticised some (not all) competition lawyers for being too effective in helping their clients 'play the system', including using excessive delaying tactics.  "A case well managed can last forever"!

Delays from trial to judgment are said to be caused by limited CAT resources.  Writing judgments is hard work, and the judges need considerable support from professional staff.

My own personal view is that the best solution might be to impose strict time limits on the parties to the appeals, either via the CAT's rules or through legislation.  It is far from clear that a decision that has been hard fought and intensely argued between company and regulator should not be capable of rapid review by the appeal tribunal.  Something must have gone badly wrong at the initial stage if there is key evidence that has not been taken into account, or an important legal argument that has not been explored.


Martin Stanley

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