Groceries Code Adjudicator Bill (HC Bill 113)

Introduction

1 The Adjudicator

A Groceries Code Adjudicator is established (see Schedule 1).

How does the Adjudicator arbitrate disputes?

2 5Arbitration

(1) If a supplier refers a dispute to arbitration under the Groceries Supply Order,
the Adjudicator must either—

(a) arbitrate the dispute; or

(b) appoint another person to arbitrate.

(2) 10If a large retailer refers a dispute to arbitration under a supply agreement, the
Adjudicator may accept appointment as the arbitrator.

3 Information about arbitration

(1) If the Adjudicator appoints another person as arbitrator under section 2(1)(b),
the Adjudicator may require the arbitrator, or a party to the dispute, to provide
15information to assist the Adjudicator in carrying out functions under this Act.

(2) The Adjudicator may enforce the requirement to provide information by
bringing civil proceedings to obtain—

(a) in England and Wales or Northern Ireland, an injunction; or

(b) in Scotland, an order for specific performance under section 45 of the
Court of Session Act 1988.

How does the Adjudicator carry out investigations and enforce their findings?

4 5Investigations

(1) The Adjudicator may investigate whether a large retailer has broken the
Groceries Code if the Adjudicator has reasonable grounds to suspect that—

(a) the retailer has broken the Code; or

(b) the retailer has failed to follow a recommendation made under
10section 7.

(2) For powers to require a person to provide information, see Schedule 2.

(3) The Adjudicator may not carry out an investigation until the guidance
required by section 12(1) has been published.

5 Investigation reports

(1) 15Following an investigation the Adjudicator must—

(a) publish a report on the outcome of the investigation; and

(b) consider whether to use any of the enforcement powers mentioned in
section 6.

(2) An investigation report must, in particular, specify—

(a) 20any findings that the Adjudicator has made;

(b) any action that the Adjudicator has taken or proposes to take; and

(c) the reasons for the findings and any action taken or proposed.

(3) It is not necessary for an investigation report to identify the retailer concerned.

(4) If a retailer is identified in a report, the retailer must have been given a
25reasonable opportunity to comment on a draft of the report before publication.

6 Investigations: forms of enforcement

If, as a result of an investigation, the Adjudicator is satisfied that a large retailer
has broken the Groceries Code, the Adjudicator may take one or more of the
following enforcement measures—

(a) 30make recommendations;

(b) require information to be published;

(c) impose financial penalties.

7 Investigations: enforcement using recommendations

(1) If the Adjudicator chooses to enforce through making recommendations, that
35means recommending what the large retailer should do in order to comply
with the Groceries Code.

(2) The Adjudicator must monitor whether a recommendation has been followed.

(3) For powers to require a person to provide information, see Schedule 2.

8 Investigations: enforcement using requirements to publish information

(1) If the Adjudicator chooses to enforce through requiring information to be
published, that means requiring the large retailer to publish information
relating to the investigation.

(2) 5The publication requirement is imposed by giving written notice to the large
retailer specifying—

(a) what information is to be published;

(b) how it must be published; and

(c) the time by which it must be published.

(3) 10The Adjudicator may enforce the requirement to publish information by
bringing civil proceedings to obtain—

(a) in England and Wales or Northern Ireland, an injunction or any other
appropriate remedy or relief; or

(b) in Scotland, an order for specific performance under section 45 of the
15Court of Session Act 1988 or any other appropriate remedy or relief.

9 Investigations: enforcement using financial penalties

(1) If the Adjudicator chooses to enforce through imposing financial penalties, that
means imposing a penalty on the large retailer of an amount not exceeding the
amount of the permitted maximum (see subsection (6)).

(2) 20The financial penalty is imposed by giving the large retailer written notice
specifying—

(a) the grounds for imposing the penalty;

(b) the amount of the penalty;

(c) the period within which it must be paid; and

(d) 25how it must be paid.

(3) The large retailer may appeal against the imposition of a financial penalty or
its amount—

(a) to the High Court, in England and Wales or Northern Ireland; or

(b) to the Court of Session, in Scotland.

(4) 30Financial penalties under this section are recoverable by the Adjudicator as a
debt.

(5) Financial penalties received by the Adjudicator must be paid into the
Consolidated Fund.

(6) The Secretary of State must make an order—

(a) 35specifying the amount of the permitted maximum, or

(b) specifying how that amount is to be determined.

(7) The Adjudicator must, within 6 months beginning with the day on which
section 1 comes into force, make a recommendation as to the amount that
should be specified in the first order under subsection (6) or the method for
40determining the amount.

(8) Before making a recommendation the Adjudicator must consult any person he
or she thinks appropriate.

(9) The Secretary of State—

(a) must have regard to the Adjudicator’s recommendation when making
the first order under subsection (6);

(b) may amend or replace an order under subsection (6) only if the
Secretary of State has considered whether to do so as part of a review
5under section 15.

(10) The Adjudicator may not impose a financial penalty in respect of a breach of
the Groceries Code that occurs before the first order under subsection (6)
comes into force.

10 Recovery of investigation costs

(1) 10The Adjudicator may require a large retailer to pay some or all of the costs of
an investigation (including any costs incurred in exercising the enforcement
powers) if satisfied that the retailer has broken the Groceries Code.

(2) The Adjudicator may require a person to pay some or all of the costs of an
investigation if the Adjudicator carried out the investigation as a result of a
15complaint by the person which, the Adjudicator is satisfied, was vexatious or
wholly without merit.

(3) A requirement to pay costs is imposed by giving written notice specifying—

(a) the grounds for imposing the requirement to pay costs;

(b) how much is to be paid; and

(c) 20by when the costs are to be paid.

(4) A person required to pay costs under this section may appeal against the
imposition of the requirement or the amount to which it relates—

(a) to the High Court, in England and Wales or Northern Ireland; or

(b) to the Court of Session, in Scotland.

(5) 25Costs required to be paid under this section are recoverable by the Adjudicator
as a debt.

What advice, guidance and recommendations does the Adjudicator give?

11 Advice

The Adjudicator may give advice on any matter relating to the Groceries Code
30to suppliers or large retailers.

12 Guidance

(1) The Adjudicator must publish guidance about—

(a) the criteria that the Adjudicator intends to adopt in deciding whether
to carry out investigations;

(b) 35the practices and procedures that the Adjudicator intends to adopt in
carrying out investigations;

(c) the criteria that the Adjudicator intends to adopt in choosing whether
to use the enforcement powers and which ones; and

(d) the criteria that the Adjudicator intends to adopt in deciding the
40amount of any financial penalty under section 9.

(2) In addition, the Adjudicator may publish guidance about the practices and
procedures that the Adjudicator intends to adopt in carrying out other
functions.

(3) The Adjudicator may publish guidance about—

(a) 5the application of any provision of the Groceries Code;

(b) steps that large retailers need to take in order to comply with the
Groceries Code;

(c) any other matter relating to the Groceries Code.

(4) Before publishing guidance under this section the Adjudicator must consult
10any persons he or she thinks appropriate.

(5) The Adjudicator must publish the first guidance under subsection (1)(a), (b), (c)
and (d) within 6 months beginning with the day on which section 1 comes into
force.

(6) Where there is any guidance in force under this section, the Adjudicator must
15take account of it in carrying out functions.

13 Recommendations to Office of Fair Trading

If the Adjudicator considers it appropriate for any changes to be made to the
Groceries Code, he or she must recommend them to the Office of Fair Trading.

What are the Adjudicator’s reporting requirements?

14 20Annual report

(1) After the end of each reporting period the Adjudicator must prepare and
publish a report describing what the Adjudicator has done during the period.

(2) The report must include a summary of—

(a) disputes referred to arbitration under the Groceries Supply Order;

(b) 25investigations carried out by the Adjudicator; and

(c) cases in which the Adjudicator has used the enforcement measures
mentioned in section 6.

(3) If the Adjudicator has made recommendations under section 7, the report must
include an assessment of whether they have been followed.

(4) 30The report must set out any recommendations that the Adjudicator has made
to the Office of Fair Trading for changes to the Groceries Code.

(5) As well as publishing the report, the Adjudicator must send a copy to—

(a) the Secretary of State; and

(b) the Office of Fair Trading.

(6) 35The Secretary of State must lay a copy of the report before Parliament.

(7) In this section “reporting period” means—

(a) the period beginning with the day on which section 1 comes into force
and ending with the following 31 March; and

(b) each successive period of 12 months.

How is the Adjudicator supervised?

15 Review of Adjudicator and guidance from Secretary of State

(1) The Secretary of State must review the Adjudicator’s performance for each
review period.

(2) 5The first review period is the period ending on the first 31 March that is at
least 2 years after section 1 comes into force.

(3) Subsequent review periods are each successive period of 3 years after the first
review period.

(4) A review must, in particular—

(a) 10consider how much the Adjudicator’s powers have been exercised; and

(b) assess how effective the Adjudicator has been in enforcing the
Groceries Code.

(5) If an order has not yet been made under subsection (11), the review must also
consider whether it would be desirable to make an order under that subsection.

(6) 15A review may consider whether it would be desirable to amend or replace the
order for the time being in force under section 9(6).

(7) As soon as practicable after a review period, the Secretary of State must—

(a) publish a report of the findings of the review for that period; and

(b) lay a copy of the report before Parliament.

(8) 20In carrying out a review, the Secretary of State must consult—

(a) the Adjudicator;

(b) the Competition Commission;

(c) the Office of Fair Trading;

(d) the retailers mentioned in Article 4(1)(a) and (b) of the Groceries
25Supply Order;

(e) one or more persons appearing to the Secretary of State to represent the
interests of suppliers;

(f) one or more persons appearing to the Secretary of State to represent the
interests of consumers; and

(g) 30any other person the Secretary of State thinks appropriate.

(9) As a result of the findings of a review, the Secretary of State may give guidance
to the Adjudicator about any matter relating to the Adjudicator’s functions.

(10) The Adjudicator is to take account of the guidance in carrying out functions.

(11) The Secretary of State may by order provide that the following section is to be
35inserted after section 4 if, as a result of the findings of a review, the Secretary
of State thinks that it would be desirable to do so—

“4A Information that may be considered when deciding whether to
investigate

(1) In deciding whether to carry out an investigation the Adjudicator may
40consider only—

(a) information provided by a supplier;

(b) information that is publicly available;

(c) information provided by a person who obtained the
information at a time when the person was a worker employed
by the retailer in question or a company in the same group;

(d) information provided by the retailer in question about whether
5it has complied with a recommendation made under section 7.

(2) When carrying out an investigation the Adjudicator may consider any
information that it seems appropriate to consider and is not limited to
considering the information mentioned in subsection (1).

(3) In this section—

• 10“group” has the same meaning as in Part 15 of the Companies Act
  2006 (see section 474(1) of that Act);

• “worker” and “employed” have the same meaning as in Part 4A of
  the Employment Rights Act 1996 (see sections 43K and 230 of
  that Act).”

16 15Transfer of Adjudicator functions and abolition etc

(1) The Secretary of State may by order transfer some or all of the Adjudicator’s
functions to a public body and in deciding whether to do so must take account
of the desirability of—

(a) increasing efficiency, effectiveness and economy in the exercise of
20public functions; and

(b) ensuring appropriate accountability to Ministers in the exercise of
public functions.

(2) The Secretary of State may by order abolish the Adjudicator—

(a) if, as a result of the findings of a review, the Secretary of State is
25satisfied that the Adjudicator has not been sufficiently effective in
enforcing the Groceries Code to justify the continued existence of an
Adjudicator;

(b) if, as a result of the findings of a review, the Secretary of State is
satisfied that it is no longer necessary for there to be an Adjudicator to
30enforce the Groceries Code;

(c) if the Secretary of State transfers all of the Adjudicator’s functions
under subsection (1); or

(d) if the Groceries Supply Order is revoked and not replaced.

(3) An order under subsection (2) may include provision transferring the
35Adjudicator’s property, rights and liabilities.

(4) The Secretary of State may by order amend this Act in consequence of any
order amending or replacing the Groceries Supply Order.

(5) For the purpose of giving effect to a transfer of functions or to the abolition of
the Adjudicator an order under this section may amend or repeal this Act or
40any other enactment.

17 Information to Secretary of State

(1) The Secretary of State may require the Adjudicator to provide information to
assist the Secretary of State in carrying out functions under this Act.

(2) The requirement to provide information to the Secretary of State does not
45override section 18.

How does the Adjudicator handle information?

18 Confidentiality

(1) The Adjudicator may not make an unauthorised disclosure of information
relating to an arbitration under the Groceries Supply Order or under a supply
5agreement if—

(a) the information identifies a party to the arbitration; or

(b) the Adjudicator thinks that the identity of a party to the arbitration
could be deduced from it.

(2) The Adjudicator may not make an unauthorised disclosure of information that
10the Adjudicator thinks might cause someone to think that a particular person
has complained about a large retailer failing to comply with the Groceries
Code.

(3) For the purposes of this section a disclosure of information is unauthorised
unless—

(a) 15the Adjudicator has obtained the required consent;

(b) the disclosure is required for the purpose of an EU obligation; or

(c) the disclosure is required, under rules of court or a court order, for the
purposes of legal proceedings of any description.

(4) The required consent is—

(a) 20in the case of information to which subsection (1) applies, the consent
of the parties to the arbitration;

(b) in the case of information to which subsection (2) applies, the consent
of the person.

(5) The prohibitions contained in this section are in addition to any that apply by
25virtue of Part 9 of the Enterprise Act 2002.

How may the Adjudicator be funded?

19 Levy funding

(1) The Adjudicator may require the specified retailers to pay a levy towards the
Adjudicator’s expenses.

(2) 30Before imposing a levy the Adjudicator must obtain the Secretary of State’s
consent.

(3) In deciding the amount of a levy the Adjudicator must take into account any
sums received or expected to be received from other sources.

(4) The Adjudicator may take into account estimated as well as actual expenses.

(5) 35The Adjudicator may require different specified retailers to pay different
amounts of levy but any differences must be based on criteria broadly intended
to reflect the expense and time that the Adjudicator expects (in the light of
previous experience) to spend in dealing with matters relating to different
specified retailers and any subsidiaries.

(6) 40The Adjudicator must inform each specified retailer of —

(a) the amount of any levy payable by the retailer; and

(b) when payments are due.

(7) A levy required to be paid under this section is recoverable by the Adjudicator
as a debt.

(8) The Adjudicator must publish details of levies and an explanation of how the
amounts have been decided (including any criteria under subsection (5)).

(9) 5If the Adjudicator has a surplus, the Adjudicator may repay some or all of it to
the specified retailers.

(10) In this section—

• “specified retailer” means a retailer mentioned in Article 4(1)(a) or (b) of
  the Groceries Supply Order;

• 10“surplus” means money held by the Adjudicator at the end of a financial
  year less—

  (a)

  liabilities shown in the Adjudicator’s statement of accounts for
  that financial year; and

  (b)

  the total amount of any grants made by the Secretary of State
  15under section 20 during that financial year or earlier ones.

20 Payments by Secretary of State

(1) The Secretary of State may make grants or loans to the Adjudicator.

(2) The grants or loans may be subject to conditions (including conditions as to
repayment with or without interest).

20Amendments and transition

21 Amendments and transition

(1) Parliamentary Commissioner Act 1967 (c. 13)1967 (c. 13)
In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments etc
subject to investigation) at the appropriate place insert—

• 25“Groceries Code Adjudicator.”

(2) House of Commons Disqualification Act 1975 (c. 24)1975 (c. 24)
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(other disqualifying offices) at the appropriate place insert—

• “Groceries Code Adjudicator or Deputy Groceries Code
  30Adjudicator.”

(3) Freedom of Information Act 2000 (c. 36)2000 (c. 36)
In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (public
authorities) at the appropriate place insert—

• “Groceries Code Adjudicator.”

(4) 35Enterprise Act 2002 (c. 40)Enterprise Act 2002 (c. 40)
In each of Schedules 14 and 15 to the Enterprise Act 2002 (provisions about
disclosure of information) at the appropriate place insert—

“Groceries Code Adjudicator Act 2012.”

(5)
Section 161(5) of the Enterprise Act 2002 (limitation on variation or revocation
40of orders) does not apply to a variation of the Groceries Supply Order made in
consequence of the Arbitration (Scotland) Act 2010 or this Act.