A wide range of approaches to review and appeal rights of
regulatory decisions exists internationally, an Australian research
paper on regulation has found. The paper's findings are worth
considering after the lengthy and intensive High Court decision on
merits review of input methodologies decided last year.
A major debate in recent years in New Zealand has been over the
need for, and scope of, merits review of regulatory decisions. In
the electricity sector there was a strong push for merits review of
Commerce Commission decisions under the regulatory control
provisions of the Commerce Act, resulting in the merits review
provisions currently in part 4 of the Commerce Act 1986.
The paper, from the Australian Competition and Consumer
Commission and its energy regulator, surveys the regulation of
infrastructure in 17 countries, including New Zealand and the ten
largest economies in the OECD. While the paper does not attempt to
define best practice, it provides a very helpful summary of the
different approaches to regulation across the 17 surveyed
The paper shows that merits review of input methodologies, and
the ways in which it is limited, are not unusual. Equally, it shows
that broader merits review rights exist in some countries. However,
even then, limitations often apply to ensure decisions are made
relatively quickly and regulatory certainly is achieved.
The infrastructure areas covered by the paper are energy,
telecommunications, postal services, water and wastewater, rail,
airport and ports.
Merits review typically involves a review or appeal of not only
the process of a decision (as in a judicial review), but also the
substantive decision itself. It usually enables the review body to
reconsider the entire decision, including whether it was the right
or best decision to make.
The Australian paper found that appeal and/or review rights are
common across the different countries surveyed, but there are a
range of different appeal mechanisms, standards, scope, and other
matters. Looking at some of these more closely, the paper
most countries have at least a base level of judicial review,
examining whether the regulator had acted within its powers, acted
appropriately, and not otherwise violated relevant laws
in many countries, courts will defer on judgment issues to the
mandate and expertise of the regulatory body. This has been
evident, for example, in some New Zealand judicial review decisions
but also occurs overseas
some jurisdictions allow substantive review of decisions, but
the scope is often limited in order to provide regulatory certainty
and timeliness. In New Zealand, for example, merits review of
Commerce Commission decisions in the electricity sector is limited
to reviewing input methodologies and has other constraints. Merits
review is similarly limited in Ireland, but the Netherlands allow
substantive review of most regulatory decisions
it is reasonably common to restrict merits review by limiting
the grounds (this occurs in Canada) or the evidence that can be
considered (this occurs in the US and New Zealand, in different
the body undertaking the review can differ, from internal
reviews within the principal regulatory body, either in full (eg as
in the Netherlands) or for some decisions (eg as in the
telecommunications sector in New Zealand), to specialist tribunals,
to the ordinary courts. In some countries, appeal is to a
government minister or the government itself
the standard of merits review, or level of scrutiny applied can
differ. In New Zealand, input methodologies can only be overturned
in favour of a new methodology that is materially better. In the
UK, while the Competition Appeals Tribunal has a full-merits review
power for some decisions, it tends to defer to the
it is common to set time limits on taking appeals and reviews,
to provide regulatory certainly, and to limit the stages of
in some countries the only option is to appeal or review all of
a decision, with the risk that the decision could be remade in a
way that is even worse for the appellant, while other counties
allow cherry-picking of aspects of a decision
Overall, the paper found that the availability of judicial
review and merits review enhanced the credibility of regulations.
It also noted that decisions on the above matters often had an
affect on the incentives on parties to appeal decisions. For
example, the risk that a decision could be made again entirely (and
thereby become even worse for an appellant) often weighed against
The paper also considered a number of the issues, including the
very interesting issue of whether industry regulators should be
stand-alone or combined within the general competition
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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