6 Advice and guidance by the Adjudicator
What the draft Bill provides
for
127. Clauses 12 and 13 allow the Adjudicator to give
advice on matters relating to the Code to suppliers or large retailers
and to give guidance on various matters including the criteria
to be used in deciding whether to carry out investigations and
the application of the Code. Clause 14 allows the Adjudicator
to recommend that the Office of Fair Trading consider changes
to the Code.
Advice
128. The Department provided some helpful examples
of the types of advice that the Adjudicator might usefully provide
under Clause 12; for instance on the interpretation of terms such
as "ordinary commercial pressures" and "fair and
lawful dealing". It explained:
We see the power for the Adjudicator to give advice
as helpful to the Government's broad objective of compliance with
the Code. In particular, advice which encourages retailers to
comply may be very cost effective, if it secures that objective
whilst avoiding the much more substantial time and cost involved
in investigations or arbitrations.[102]
129. The Co-op was exercised about the provisions
relating to advice and guidance generally:
The Co-operative Group is unconvinced that it will
be necessary for the Adjudicator to publish further guidance beyond
that which covers the conduct of investigations (Clause 13 (1))
or to give advice on any GSCOP-related matter to suppliers or
large retailers (Article 12). This will only increase costs unnecessarily
given the presumed sophistication of the large retailer population,
and we had not foreseen the Adjudicator constituting a "free
advice" centre for suppliers who will be perfectly able to
take advice on GSCOP from other sources at their own cost.[103]
130. In its response to the 2010 consultation, the
Co-op was similarly concerned about the risk of the more delinquent
retailers free-riding on the back of advice to retailers with
good compliance records.[104]
The Department's examples should go some way to allaying these
concerns. In our opinion—subject to appropriate safeguards—access
to advice from the Adjudicator might be a useful and cost effective
recourse for all parties.
Guidance
131. The British Retail Consortium wanted more immediate
clarity around Clause 13 guidance:
Clause 13 sets out the need for guidance but we believe
it should be more explicit. It should set out the thresholds that
would need to be met before the Adjudicator undertakes an investigation.[105]
132. Sainsbury's set out some possible parameters:
We would want to see any guidance set a high bar
before investigations are initiated, such as evidence of consistent
breaches of the Code or a settled pattern of behaviour contrary
to the Code, and should be clear about what will not be investigated
as well as what will be.[106]
133. Asda went further, arguing that the absence
of greater detail in the Bill would prevent appropriate parliamentary
scrutiny:
The Bill proposes what is in effect a criminal offence
with penalties, yet the draft Bill does not detail the investigatory
framework and this will, therefore, prevent parliament scrutinising
an important element of the legislation. This is not consistent
with the Government's own principles for better regulation, and
increases the prospect of regulatory creep from the original intention
of such a body.[107]
134. One of the main issues on guidance was timing,
because the Adjudicator will have to publish guidance before he
or she can undertake any investigations, and the Government has
taken the view that primarily the Adjudicator should determine
its own guidance. Clause 13(5) sets a maximum timetable for this
of six months from the day on which the Adjudicator's office is
established, but this means that if the Bill is not brought fully
into force until 2013, the first investigations might not begin
until 2014.
135. When the Bill Team was asked whether there was
a way to shorten the process, they responded that the six month
period was a maximum and that an Adjudicator might already be
appointed after Second Reading, commenting, "If we manage
things smartly, it need not be sequential in the way that you
suggest."[108]
They suggested that the OFT and the Competition Commission could
provide precedents. They also referred to the possible early appointment
of an "Adjudicator designate" as a way to expedite matters.[109]
136. The Minister told us at some length why it would
be difficult to shorten the process.[110]
He estimated that as the earliest the Adjudicator could start
on guidance would be within 3 months of formation, the 6 months
maximum period provided for in the draft Bill would represent
only a 3 month additional delay.[111]
137. We are not convinced by the argument put forward
by the Government. To provide the Adjudicator with some preliminary
precedents and parameters for guidance, based on the extensive
views expressed in this inquiry and in the 2010 consultation,
would in our view not be inconsistent with preserving the Adjudicator's
freedom to determine the ultimate content of the guidance. The
Department should manage things as smartly as they suggested they
could.
138. The Adjudicator's guidance will need to take
full account of the views of those who have a stake in making
the office successful, fair and efficient, and reviewing the guidance
will be an important part of the first overall review of the Adjudicator's
efficacy. That should help address the concerns that Parliament
will not have seen the guidance before enactment.
139. Work should commence now on determining suitable
precedents and parameters for guidance, so that once the Adjudicator
is appointed there is minimum delay in finalising the guidance
and opening for business.
102 Ev 90 Back
103
Ev 71 Back
104
Response to consultation, 14.4 Back
105
Ev 63 Back
106
Ev 84 Back
107
Ev 58 Back
108
Q 48 Back
109
Ibid. Back
110
Q 336 Back
111
Ibid. Back
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