APPENDIX
Proposal to allow removal or reduction of burdens
imposed by common law
COMMITTEE REPORT
29. The Committee was concerned that this power might
set an inappropriate constitutional precedent so far as overruling
judicial review proceedings relating to the duties of public bodies
were concerned. It also reflected Professor Miers' concerns that
with no legal text to be definitively amended, the amendment of
common law by order would create more anomalies than it addressed.
The Committee suggested that it might, however, be able to reconsider
this rejection if it could be ensured that the Law Commission
or other equivalent statutory body had approved each proposed
order.
GOVERNMENT RESPONSE
30. Both here and with the proposal to allow the
order-making power to apply to regulations made under section
2(2) of the European Communities Act 1972 (detailed at paragraphs
41- 44 below), the Government expressed its proposals in terms
of the forms of law it would wish to address, rather than in terms
of the goal it sought to achieve. The proposal to create what
appeared a very open-ended power to amend common law aroused a
significant degree of questioning and comment amongst respondents,
some unfavourable (although there was general agreement to the
EU proposal). In the light of these responses, the Government
accepts that it would be better to present its proposals in terms
of its intended objectives. The Government now proposes seeking
a power to allow Ministers to propose orders to amend, extend
or supplement statutory provision so as to further enable or facilitate
things which the provision in question does not prohibit but which
could not otherwise be done.
31. This would not, as it might at first appear,
be out of kilter with the deregulatory direction of the wider
initiative. On the contrary, it would be an enabling power in
that it would remove the burden on business imposed by an inability
to take wider advantage of developments in related areas. The
Government considers this to be the most important of the proposed
amendments in terms of genuine deregulation. It would to some
extent link in with the proposal to allow deregulation orders
to apply to EU regulations. It would also deal with cases where
there is an existing statutory provision which could readily be
extended, but where one cannot say there is a restriction since,
in the absence of the provision in question it would not legally
be possible to do the thing anyway.
32. This clearly covers the open ended investment
companies (OEICs) case, whereby regulations under the European
Communities Act make provision for the establishment of UCITS
(Undertakings for Collective Investments in Transferable Securities)
OEICs. Under this proposed new power the regulations could be
extended to allow non-UCITS OEICs to be set up, but one cannot
say there is a restriction because, in the absence of the regulations,
it would not legally be possible to set up an OEIC at all. (This
case is, of course, being dealt with by the Financial Services
and Markets Bill, but the Government feels it is nevertheless
worth quoting as a straightforward and familiar example.)
33. The power would also cover cases such as the
Charity Commission proposals to create a legislative vehicle for
the incorporation of charities. For a number of reasons, incorporation
is increasingly being seen as the most effective way for many
charities to structure themselves. Many charities have incorporated
under the Companies Act 1985 and its statutory predecessors, others
under industrial and provident society legislation. However these
incorporation régimes were not structured with charities
in mind, as their jurisprudence is more appropriate to commercial
organisations or mutual traders. This can create operational and
regulatory difficulties for charities.
34. Use of the proposed power under the deregulation
order-making procedure would provide a solution to this problem.
Essentially it would allow the Charities Act(s) and/or the Companies
Act(s) to be built on in order to allow a charity to become a
body corporate, which could then be registered with and regulated
by the Charity Commission. This would remove the operational and
regulatory difficulties mentioned above.
35. As the Committee will appreciate, it is not necessary
to pursue the wider power to amend common law in order to achieve
the objective set out in paragraph 28 above, although that would
have provided a tidy and effective vehicle for doing so. Under
this new approach, there is a requirement for deregulation orders
to be anchored in a statutory provision. Orders covering common
law in the abstract would therefore not be possible and there
would be no question of overruling judicial review proceedings.
36. The Government intends carrying forward the amended
proposal, and hopes that it will be more acceptable to the Committee
than the earlier proposal to allow orders to remove burdens in
common law. As elsewhere, Ministers collectively will have to
satisfy themselves (and the Committees) that the change they seek
to effect is an appropriate candidate for the order-making power.
Documentary evidence that the department had conducted a comprehensive
consultation with all parties affected will be especially important.
And where appropriate, the Law Commission would advise on proposals
in draft. Once again, a list of worked-through examples of potential
orders will aid consideration of this proposal, and the Government
will be providing such a list in due course.
37. Given that the new proposed power would not have
the effect of amending pure common law, the Committee's concern
about the absence of a legal text to amend is superseded. However,
it is worth noting that the Government does not consider this
absence need have been a barrier to legislation by order-making;
new statutes introduced to interpret or develop preceding common
law by definition create text which did not previously exist,
and both primary and secondary legislation frequently reverse
case law.
38. The Committee stated that it might be able to
reconsider its rejection of the common law proposal if the Law
Commission were to advise on proposed orders. The Government accepts
that the Law Commission has a potentially very useful role in
the preparation of orders aimed at clarifying the law, and has
discussed with the Commission the benefits and constraints of
giving it a formal role under statute. As detailed in paragraphs
55-57 below, the Commission has agreed to fulfil this role where
appropriate.
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