The Regulators' Code (the Code) is now live and businesses are being urged to hold regulators who do not meet the required standards to account. We outline in this article the key issues for businesses and the likely impact in practice.
The Code, in summary, sets out a number of principles which regulators have a statutory duty to take into account when undertaking their regulatory activities.
The Code came into force on 6 April 2014 and replaced the Regulators’ Compliance Code which was published in 2007. The Code aims to clarify the existing provisions so that businesses, as well as regulators, have a better understanding of the services that can be expected and will feel able to challenge regulators if these standards are not being met.
Nearly all non-economic regulators (i.e. those who enforce the rules, and provide advice and guidance on how to comply with them) need to have regard to the Code when developing standards, policies or procedures that either guide their regulatory activities with business or apply to other regulators. This includes, for example, local authorities, fire and rescue authorities, the Health and Safety Executive, and Environment Agency.
Principles under the Code
Under the Code regulators should:
- Carry out their activities in a way that supports those they regulate to comply and grow
- Provide simple and straightforward ways to engage with those they regulate and hear their views
- Base their regulatory activities on risk
- Share information about compliance and risk
- Ensure clear information, guidance and advice is available to help those they regulate meet their responsibilities to comply
- Ensure that their approach to their regulatory activities is transparent
Businesses should expect to be treated in accordance with the Code now that it is in force. In particular, the following should be available on the relevant regulator's website regarding their approach to:
- Providing information, guidance and advice
- Checks on compliance (including inspections, audit, monitoring and sampling visits, and test purchases). This includes details of the risk assessment framework used to target those checks as well as protocols for their conduct.
- Fees and charges
- Comments or complaints about the service provided as well as routes to appeal.
Breach of the Code
Regulators do not commit an offence if found to be in breach of the Code. However, a complaint can be made to the Local Government Ombudsman if you feel that the regulator has not acted properly. The Ombudsman is working together with the BRDO in relation to complaints made by business and has confirmed that the Code, and the statutory principles of good regulation, will be used as a framework to assess complaints. A decision taken by a regulator also remains open to challenge by way of Judicial Review.
Many principles of the Code are not new. It was a requirement under the previous code, for example, that regulators should take a risk based and transparent approach. The Code, however, spells out more clearly what is expected of regulators and requires information to be made more accessible which can only be of benefit to businesses. The work the Ombudsmen and BRDO is currently undertaking in relation to complaints also has the potential to assist in resolving any issues without the need for more formal action.
As the Code is still in its infancy, it remains to be seen whether it will create a more open dialogue between regulators and businesses as the Government envisages. The success of the Code will depend upon the awareness of businesses of the Code and their willingness to raise an issue of non-compliance without the fear of potentially damaging ongoing relations. It will also depend upon the attitude taken by regulators: if only lip-service is paid to the Code then it is likely that it will have no greater impact than the last one, which was generally perceived as toothless.