Enforcement and Judicial Review of Decisions of National Regulatory Authorities

Abstract

While much attention is given at EU level to the design and operation of National Regulatory Authorities (NRAs), the enforcement and review of NRA decisions has been largely left to the Member States to organize.With this report, CERRE provides a comprehensive examination of Member State law and practice regarding the enforcement and review of NRA decisions. This report is based on a study of energy, electronic communications and rail regulation in Belgium, France, Germany, the Netherlands and the UK. We review EU and Member State legislation, and the case law of national review courts. We make recommendations based on the best practices we identified.In general, we found that that the harmonization of substantive law at EU level seems to exert a greater influence on Member State law and practice than the diversity of national procedural laws. Accordingly, the degree of divergence between the Member States under study is more limited than one might have expected at first sight. Furthermore, it is also apparent that Member States have by and large taken a horizontal approach to the design of enforcement and review regimes, since for any Member State, we observed that the solutions tend to converge as between sectors.We studied a number of key issues, with the following recommendations emerging from our study:- Enforcement of NRA decisions: It is preferable to give NRAs the power to impose penalties directly for failure to comply with their own decisions (as opposed to a power to act against breaches of the regulatory framework, which would comprise their own decisions).- Stay of NRA decisions during appeal proceedings: An appeal against an NRA decision should have no automatic or systematic suspensive effect, with the possible exception of appeals against NRA decisions ordering the payment of fines. - Nature of review court: Member States should allocate the review of NRA decisions to a specialist court (or a specialist body within an existing court). - Standing and third-party intervention: Standing to appeal against an NRA decision should be granted to all parties who are affected by the decision, subject perhaps to a requirement that the party has participated in the proceedings before the NRA. - Length of proceedings: In general, review proceedings take long: in observable cases, the average duration has been close to a year and a half. An EU-level benchmark norm on duration might be envisaged.- Confidential information and business secrets: The best practice is to allow the review court to gain knowledge of the information, which is then shared with a restricted circle of counsel for the parties to the case, without being available to the parties themselves.- Scope of review. Review courts should be entitled to review all factual, legal and policy issues, as long as the parties to the case brought these issues before the court.- Standard for review: All review courts should use the same standard for review, namely a full review of issues of law, a broad review of the errors of fact and a marginal review of the exercise of discretion by the NRA.- EU-level coordination: Cross-fertilisation is lacking. A complete and coherent case-law database on NRA review should be established, and the various Member State courts discharging the review of NRA decisions should be regrouped in a European association.- Retroactive effect of remedies upon review: On balance, leaving aside dogmatic considerations arising from one or the other national legal system, it would be preferable, from a pragmatic perspective, not to give retroactive effect to the remedies granted by the review court (be it quashing of the NRA decision or substitution of a new decision by the review court).It must be underlined that these issues are interrelated. Furthermore, even when the regime of enforcement and review of NRA decisions is optimally designed and operated, this is but one of the elements which contributes to the success of regulation. Other measures can be taken to increase the quality of NRA decisions ex ante, so as to reduce the need for review and thereby procure even greater improvements in the effectiveness of regulation.