Compliance, Transposition and Gold-Plating
This note focuses on a couple of issues which might well arise during the policy process.
It is vital that compliance and enforcement issues are considered before any decisions are made about the scope and nature of any regulations. The legislation can be well-meant, but it will quickly fall into disrepute if it has to be policed in an obtrusive way, or if the cost of its enforcement is out of proportion to its benefit. Regulations should always be transparent, targeted, consistent, and in proportion to the risk, and the regulator must be publicly accountable.
Compliance is often best assured by providing incentives to encourage those causing the risk to change their behaviour. Where possible, therefore, the cost or impact of the regulation should fall upon the person causing the risk, not the person suffering it. If that is not possible then any numerical targets (e.g. for local enforcement bodies) should be concerned with reductions in the occurrence in the risk (e.g. fewer outbreaks of food poisoning) rather than increases in enforcement action (e.g. numbers of prosecutions). And don’t make it obligatory for small firms to keep papers for 40 years – and, yes, such a regulation did recently exist.
Watch out, by the way, for the implications for middle class journalists. For instance, when designing policies affecting employees, think carefully about their impact on au pairs. Or when changing education policy, how will it affect Montessori schools? You attack the freedom of the press at your peril!
Finally, make sure that your solution can be implemented by those who have not been immersed in the issue in the way that you have been. Don’t design systems which are subtle, clever or difficult to understand, and don’t plan staff numbers and implementation timetables on the basis that all involved will be geniuses. Also, make sure that your solution is understood by those at whom it is aimed. Research can help, of course. The Business Department, investigating ineffective product warnings, found that many young people could not define the word ‘fatal’. A new warning ‘solvent abuse can kill suddenly’ was substituted.
Transposition and Gold-Plating - Overview
You will also have choices when it comes to transposing European Directives into UK law. The process can be fraught with difficulty. Legal advice should be obtained as soon as you begin to think about transposition, which should in turn be very early in the negotiation process. Advice on lobbying and negotiating etc. in Brussels can be found here. You should also read these two documents: Guiding Principles for EU Legislation and Transposition Guidance.
You need to reconcile a number of possible tensions. One source of tension is the desire of those who are to be regulated for regulatory certainty. Small firms in particular do not want to have to go to court to resolve ambiguities or to find out how the law applies to unusual circumstances. So even if the Directive itself is not very detailed (and they often are) you end up drafting to cope with every eventuality, whereupon everyone complains about the length and complexity of your proposal. It is truly a no-win situation.
Another tension arises when you try to define the businesses, employees and activities that are within the scope of the UK regulation. EU legislators often kindly leave such decisions, within limits, to national governments, but this can be a poisoned chalice. If you spread your net too wide then you will again be accused of over-regulating and ‘gold-plating’ the Directive. But if you exempt things which you could have caught, you are then likely to face a legal challenge from the Commission or from someone who might have benefited from a wider interpretation.
There is therefore often no risk-free route to implementation and you must offer Ministers a range of strategies and help them choose the right one in all the circumstances. You should not necessarily recommend the option which is legally watertight. It can often be wise to take a small risk of legal challenge in return for coming up with a solution which makes sense within our economy and society, even if it is not the route chosen by other member states.
Read on if you would like more detailed advice and information about these subjects ...
Transposition and Gold-Plating - Detail
As noted above, there is understandable concern that the Government should not "gold-plate" - that is add unnecessary additional detail or rules to - European legislation. But this is in tension with the concern, of those who are to be regulated, for regulatory certainty. Those concerned about gold-plating applaud the French and Italian approach. Their legislation often says little more than "This directive shall apply:- You sort out the detail". But many UK citizens are reluctant to accept laws as interpreted by officials, whilst small firms in particular do not want to have to go to court to resolve ambiguities or to find out how the law applies to unusual circumstances. So even if Directives themselves are not very detailed (and they often are), UK Ministers usually ask civil servants to draft to cope with every eventuality, whereupon everyone complains about the length and complexity of your proposal. It is truly a no-win situation.
As an example, I understand that DTI (now BIS) did indeed once merely "copy out" a Directive to do with personal protective clothing - only to be told by the relevant trade body that "copying out" was in fact "copping out"!
'Goal-based' regulation is sometimes used as a compromise route between gold plating and regulatory certainty. One good example is the HSE's requirement that health and safety should be assured 'so far as is reasonably practical' (SFAIRP). This avoids excessive detail, whilst allowing common sense regulatory decisions to be taken in the light of the circumstances of the individual business. And see further below.
But the Government announced, in December 2010, that 'British businesses will no longer be at a disadvantage compared to their European competitors, with an end to the 'gold-plating' of European legislation when it is made into UK law. The key to the new measures, introduced by Business Secretary Vince Cable, will be the principle of copying out the text of European directives directly into UK law. This direct 'copy out' principle will mean that the way European law is interpreted does not unfairly restrict British companies. The key elements of the principles are:
- Work on the implementation of an EU directive should start immediately after agreement is reached in Brussels. By starting implementation work early, businesses will have more chance to influence the approach, ensuring greater certainty and early warning about its impact.
- Early transposition of EU regulations will be avoided except where there are compelling reasons to do so. British businesses will then not be at a disadvantage to their European competitors.
- European directives will normally be directly copied into UK legislation, except where it would adversely affect UK interests, such as putting UK businesses at a competitive disadvantage.
- Ministers will conduct a review of European legislation every five years. The review process would involve a consultation with businesses and provide a unique opportunity to improve how European legislation is implemented, to ensure that it poses as small a burden as possible on business.'
It remains to be seen whether this brings about a significant change in the UK's approach to the transposition of EU into UK law, or whether the announcement was mere window dressing.
Definitional problems can create another tension, for it is usually necessary to define the businesses, employees and activities that are within the scope of the UK regulation. EU legislators often kindly leave such decisions, within limits, to national governments, but this can be a poisoned chalice. If Ministers spread their net too wide then they will again be accused of over-regulating and “gold-plating” the Directive. But if they err on the side of exempting things which they could have caught, they are then likely to face legal challenge from the Commission or from someone who might have benefited from a wider interpretation.
A third tension is caused by the suspicion of the European Commission and/or other member states that we may be seeking to slide out of our community obligations. There was a particularly worrying example of this in the SFAIRP infraction proceedings that were taken in the European Court of Justice (the ECJ) against the UK Government, represented by the Health and Safety Executive (HSE). The problem, in short, is that European law imposes close to an absolute duty upon employers to safeguard their employees' health and safety whereas, in the UK, the HSE requires employers to safeguard health and safety "so far as is reasonably practical" (SFAIRP). The European Commission believed that we were trying to wriggle out of the responsibilities imposed by the relevant European law, and referred the UK to the European court. The case took years to get to court, but the UK eventually emerged victorious (in June 2007) from what had been a very important piece of litigation - though probably not the last in this area.
Reports, Reviews and Guidance
A very thorough Efficiency Scrutiny Report - a Review of the Implementation and Enforcement of EC Law in the UK - was published in July 1993. Its Executive Summary said that:
We have found little evidence to support the allegation that the UK deliberately adds requirements when transposing EC law. UK implementing legislation does, however, tend to go beyond the requirements of the EC directive for two main reasons. First, ... there is a tendency to carry over existing national provisions, wider scope and tougher penalties than in other Member States ... Second, the UK legal system is based on a tradition of precise drafting which aims to eradicate doubt in contrast with the purposive approach of continental jurisprudence on which EC law and that of other Member States is based.
The review team nevertheless made 102 recommendations aimed mainly at improving the way in which the UK approached the negotiation of Directives, planned and communicated their implementation, and trained enforcers. ("Many of the business concerns ... have arisen from misunderstandings or misleading advice from suppliers and consultants.")
The most recent review of whether the UK has over-implemented European legislation was The Davidson Review carried out by a team led by Lord Davidson QC. They reported in 2006 and they too concluded that "over-implementation may not be as widespread in the UK as is sometimes claimed". But, like the earlier review team, they did find some examples, and made a number of useful proposals.
The 2010 incoming Lib-Dem coalition government committed to 'end the so-called gold-plating of EU rules' and published their Guiding Principles for EU Legislation in December 2010, updated in 2013. The principles, which are supported by detailed Transposition Guidance envisaged much less 'gold-plating' and much greater use of 'copy-out'. I am not aware, however, that the new principles have made much difference in practice.