Schedule 13: Modifying water and sewerage undertakers’ appointments: Procedure for appeals
- Schedule 13 inserts new Schedule 2ZA into the Water Industry Act 1991.
New Schedule 2ZA Procedure for appeals under section 12D
- New Schedule 2ZA sets out the details of the Competition and Markets Authority (CMA) process for appeals against licence condition modifications under section 12D of the Water Industry Act 1991.
- Paragraph 1 of new Schedule 2ZA sets out the procedure to make an application for permission to appeal under section 12D. Sub-paragraph (1) sets out the procedure that must be followed to bring an appeal. An appeal must be made by sending a notice to the CMA requesting for permission to appeal.
- Sub-paragraph (2) refers to the persons set out in section 12D as being the only persons that can apply for permission to appeal.
- Sub-paragraph (3) requires an application for permission to be made within 20 working days after the working day on which Ofwat’s decision on the modification is published.
- Sub-paragraph (4) requires specific information to be provided with the application for permission to appeal which will be detailed in rules.
- Sub-paragraph (5) enables provision to be made in the rules requiring the applicant to confirm through a statement of truth that the evidence contained in an application is true.
- Sub-paragraph (6) defines a person applying for permission to bring an appeal as an "appellant".
- Sub-paragraph (7) requires the appellant to send a copy of the application for permission to appeal to Ofwat at the same time as the application is sent to the CMA, along with any other information that may be required by the appeal rules.
- Sub-paragraph (8) requires that the decision about whether to grant permission to appeal be made by a member of the CMA who is duly authorised.
- Sub-paragraph (9) provides that Ofwat must be afforded an opportunity to comment on the application before CMA decides whether to give permission.
- Sub-paragraph (10)(a) requires the CMA to respond to the application for permission to appeal by the end of the 10th working day after the day on which the CMA received any comments from Ofwat.
- Sub-paragraph (10)(b) requires the CMA to respond to the application for permission to appeal by the end of the 14th working day after the day it received the application where there are no comments from Ofwat.
- Sub-paragraph (11) sets out the conditions subject to which permission to appeal can be granted, including provision for joint appeals.
- Sub-paragraph (12) requires notification to the appellant and Ofwat where an appeal is granted or refused, and of the reasons for it.
- Sub-paragraph (13) requires CMA to publish its decision on the application for permission to appeal as soon as reasonably practicable.
- Sub-paragraph (14) provides for section 12I(2), which allows the CMA not to publish any commercial information that could harm the business interests of an undertaking to which it relates or any information that relates to an individual and could harm their interests, to apply to any information to be published under sub-paragraph (13) relating to the CMA decision on an application to bring an appeal against a proposed licence modification decision.
- New paragraph 2 of new Schedule 2ZA sets out the procedure for suspending an Ofwat decision on licence modification.
- Sub-paragraph (1) enables the CMA to prevent the modification from taking effect or limit the extent to which the modification takes effect until after it has taken its decision on the appeal.
- Sub-paragraph (2) provides that, where an appeal is made against a licence condition change that came into effect earlier than 56 working days following publication of the decision, the CMA can suspend the change or limit its effect as it considers necessary pending the determination of the appeal.
- Sub-paragraph (3) provides that the CMA can only suspend the effect of the change where the appellant requested that it be suspended when they made their application for permission to appeal within the specified time limit; where Ofwat has been able to comment on the application; where the change would create significant costs for the appellant or the persons the appellant represents; and where the change is not needed, from the perspective of the balance of convenience, to come into effect until the decision on the appeal is made.
- Sub-paragraph (4) provides that the CMA must make a decision about suspending the early effective date by the end of the 10th working day after the day they received any comments from Ofwat, or by the end of the 14th working day after the day they received the application where there are no comments from Ofwat.
- Sub-paragraph (5) requires the appellant to send an application to suspend the early effective date to Ofwat at the same time as it is sent to the CMA.
- Sub-paragraph (6) provides that the person making the decision on the application for the CMA must be licensed to do so, and that the CMA must publish the decision as soon as it is reasonably practical to do so.
- Sub-paragraph (7) provides for section 12I(2), which allows the CMA not to publish any commercial information that could harm the business interests of an undertaking to which it relates or any information that relates to an individual and could harm their interests, to apply to any information to be published as a result of a direction on an application to bring an appeal against a proposed licence modification decision.
- Paragraph 3 of new Schedule 2ZA sets out the time limit for representations and observations by Ofwat. Under sub-paragraph (1), where Ofwat wishes to comment on an application for permission to bring an appeal or a CMA direction, it must do so within the time limit imposed by sub-paragraph (2). The time limit provided by sub-paragraph (2) is ten working days beginning with the first working day on which Ofwat received a copy of the application for permission to appeal or the application for a direction. Under sub-paragraphs (3) and (4), where the CMA has granted permission to bring an appeal, and Ofwat wishes to make representations on the reasons that it reached the decision that is under appeal or on any grounds on which the appeal has been brought, Ofwat must make any written representations within a specified time limit. That time limit, which is set out in sub-paragraph (4), is by the end of the 15th working day from the date that the permission to appeal was granted.
- Sub-paragraph (5) requires Ofwat to send a copy of its representations made under paragraph 3 to the person bringing the appeal.
- Paragraph 4 of new Schedule 2ZA sets out how the CMA group that considers and determines an appeal must be constituted. Sub-paragraph (2) provides that the decision made by the group is only valid if all members of the group are present at the meeting making the decision and at least 2 members of the group support the decision.
- Paragraph 5 of new Schedule 2ZA sets out the matters that can be considered as part of an appeal. Sub-paragraph (1) enables the CMA, in order to reach a determination on the appeal, to disregard any issues that the person making the appeal has raised that were not included in their application to make an appeal, and to disregard any issues that Ofwat raises after the period in which it had the opportunity to comment on the appeal application or on any CMA direction.
- Paragraph 6 of new Schedule 2ZA enables the CMA, to request, via a notice, the production of documents, estimates, forecasts, returns or other specified information relevant to an appeal.
- Sub-paragraph (2) enables the CMA to set out a time for the documents or information requested under subparagraph (1) to be produced, where they need to be sent, and the format in which they are required.
- Sub-paragraph (3) limits the information the CMA is able to request to that which could be required in High Court civil cases.
- Sub-paragraph (4) allows anyone authorised on behalf of the CMA to copy any documents, estimates, forecasts, returns or other information requested by and provided to the CMA.
- Sub-paragraph (5) requires that a notice issued under sub-paragraph (1) must be issued by someone who is authorised on behalf of the CMA to do so, and must include details about possible consequences of the person to whom it is directed not complying with the notice.
- Paragraph 7 of new Schedule 2ZA sets out when an oral hearings may be held and specifies who can be required to present evidence.
- Sub-paragraph (1) allows for evidence to be taken under oath by the person considering an application for permission to bring an appeal, a person considering an application for a direction or by the CMA group determining the appeal.
- Sub-paragraph (2) provides that the CMA may issue a notice to require a person to attend the hearing and give evidence. The CMA must request a person to attend by notice setting out the time and place where the person must attend to give evidence.
- Sub-paragraph (3) allows for the person or group conducting the hearing to require the appellant or Ofwat to give evidence, or someone representing the appellant or Ofwat to make representations or observations.
- Sub-paragraph (4) allows for a person giving evidence at the hearing to be questioned by any party to the appeal. Sub-paragraph (5) provides that if the appellant, Ofwat, or a representative of either of these is not at the hearing the CMA does not have to consider the evidence that would have been provided and can determine the application for permission to appeal or the appeal without the evidence.
- Sub-paragraph (6) limits the type of evidence that a person can be required to give to that which could be required within a High Court civil case.
- Sub-paragraph (7) allows the person providing evidence to claim expenses for their attendance from the CMA if they have to travel more than 10 miles from their home to the hearing.
- Sub-paragraph (8) allows authorised members of the CMA to issue the notice to a person requiring that they give evidence at an oral hearing.
- Paragraph 8 of new Schedule 2ZA provides the CMA with the power to require a person to produce written evidence.
- Sub-paragraph (1) sets out that the CMA can request by notice written evidence from a person requesting a direction from the CMA or from the CMA group determining an appeal.
- Sub-paragraph (2) allows the CMA to specify by when and where the evidence must be provided, and that it must be verified by a statement of truth. If verification is required and not provided, the CMA must disregard the evidence.
- Sub-paragraph (3) limits the type of written evidence that a person can be required to give to that which could be required within a High Court civil case.
- Sub-paragraph (4) allows an authorised member of the CMA to issue the notice to a person requiring that person to provide written evidence.
- Paragraph 9 of new Schedule 2ZA enables the CMA to commission and use evidence from an expert in an appeal. The expert can be asked to provide evidence on any aspect of the appeal.
- Paragraph 10 of new Schedule 2ZA sets out the process that takes effect when a person fails to comply with a CMA notice requesting the production of documents under paragraph 6, or fails to attend oral hearings under paragraph 7, or fails to provide written evidence as required under paragraph 8.
- Sub-paragraph (2) enables the CMA to refer the failure, or the making of false statement or providing of false information, to the High Court.
- Sub-paragraph (3) sets out the process that the High Court can undertake which can ultimately, may enable the person to be punished as if they had been found in contempt of court.
- Sub-paragraph (4) enables the High Court, where the person is a business, to find both the business and any director or senior official of the business in contempt of court.
- Sub-paragraph (5) makes it a criminal offence for anyone to alter, suppress or destroy a document that the CMA requests under paragraph 6. The offence is punishable by a fine on summary conviction or a fine and or imprisonment on indictment.
- Paragraph 11 of new Schedule 2ZA sets out the procedure for making rules about the process for considering appeals under section 12D.
- Under sub-paragraph (2), rules made under sub-paragraph (1) can supplement the provisions of new Schedule 2ZA, and may include rules concerning evidence given at an oral hearing or other representations at a hearing.
- Under sub-paragraph (3), the CMA Board must publicise rules made under paragraph 11 to bring them to the attention of those affected by them.
- Under sub-paragraph (4), the CMA Board must consult those persons affected by the rules before setting them.
- Under sub-paragraph (5), rules made under sub-paragraph (1) may vary in relation to different cases.
- Paragraph 12 of new Schedule 2ZA deals with the position in relation to costs under the appeal procedure.
- Sub-paragraph (1) sets out how the CMA’s costs for dealing with the appeal will be payable.
- Sub-paragraph (2) sets out who is liable to pay the CMA’s costs, depending on the outcome of the appeal.
- Under sub-paragraph (3), the CMA can also order one party to pay the reasonable costs of the other party, depending on the appeal outcome.
- Under sub-paragraph (4), any party required to pay costs to another party must do so within 28 days from the day after the date of the CMA order.
- Under sub-paragraph (5), where the costs are not paid to the other party within the time period, they will accrue interest as set out in the order.
- Under sub-paragraph (6), any unpaid costs may be recovered as a civil debt by the person entitled to the costs.
- Paragraph 13 of new Schedule 2ZA sets out the definitions of terms used.
