Citation and commencement

1.-(1) These Regulations may be cited as the Competition Act 1998 (Redress Scheme) Regulations 2015.

(2) These Regulations come into force on 1st October 2015.

Interpretation

2.-(1) In these Regulations-

"the Act" means the Competition Act 1998; and

"applicant" means a person making an application to the CMA for approval of a redress scheme under section 49C of the Act.

(2) Any reference in these Regulations to the CMA means the CMA or a regulator.

Application for approval of a redress scheme

3.  An application to the CMA for approval of a redress scheme under section 49C of the Act must be made in writing and must contain a summary of the scheme.

Approval of redress scheme

4.-(1) Subject to paragraph (2), the CMA may approve a redress scheme under section 49C of the Act only if it-

(a)has been devised in accordance with the process specified in regulation 5;

(b)contains all of the information required by regulation 6; and

(c)contains all of the terms required by regulation 7.

(2) Paragraph (1) does not apply where the CMA approves a redress scheme at the same time as making the infringement decision to which the scheme relates; but the CMA may only approve a scheme in such cases if-

(a)the applicant has provided information to the CMA about the time when, and how, the scheme will comply with the requirements in paragraphs (1)(a), (b) and (c); and

(b)the CMA is satisfied that any conditions imposed under section 49C(4) or (5)(a) of the Act will ensure that the scheme will comply with those requirements within a period of time specified in those conditions.

Process for devising a redress scheme

5.-(1) For the purposes of regulation 4, the process for devising a redress scheme is as follows.

(2) The scheme must be devised by-

(a)the person appointed by the applicant to be the chairperson of the scheme ("the chairperson"); and

(b)the persons appointed by the chairperson to constitute the board of the scheme ("the board").

(3) A person may only be appointed as the chairperson of the scheme if that person-

(a)satisfies the judicial-appointment eligibility condition on a five-year basis, or is an advocate or solicitor in Scotland of at least five years' standing, or is a member of the Bar of Northern Ireland or solicitor of the Court of Judicature of Northern Ireland of at least five years' standing; and

(b)does not have any interests which conflicts with the interests of the applicant or any person who may seek compensation under the scheme.

(4) A person may only be appointed to the board if that person does not have any interests which conflicts with the interests of the applicant or any person who may seek compensation under the scheme.

(5) The board appointed by the chairperson must comprise-

(a)an economist with appropriate experience and knowledge of competition economics to be able to consider the redress scheme;

(b)a person with experience of the industry of the applicant;

(c)a person who is able to represent the interests of those who may be entitled to compensation under the redress scheme; and

(d)any other person considered suitable by the chairperson.

(6) The scheme must be recommended by the chairperson to the CMA for approval, and the chairperson may only make such a recommendation if-

(a)the chairperson and the board have considered the relevant matters; and

(b)the majority of the persons comprising the chairperson and the board agree that it should be recommended for approval by the CMA.

(7) In this regulation, "the relevant matters" means-

(a)evidence of loss caused to persons entitled to compensation relating to the infringement decision;

(b)who is to be entitled to compensation under the redress scheme;

(c)the process for applying for compensation under the redress scheme, including any requirements to produce evidence in support of an application; and

(d)how those entitled to compensation under the scheme will be notified of their entitlement.

Required information

6.-(1) The information required by this regulation is-

(a)the names of the redress scheme's chairperson and members of the redress scheme's board, and confirmation that none of them had a conflict of interest when they were appointed or when they considered whether to recommend approval of the scheme to the CMA;

(b)details of arrangements to ensure that the chairperson and the board had access to relevant information held by the applicant prior to deciding whether to recommend the redress scheme for approval to the CMA;

(c)details of the process for applying for compensation under the redress scheme, and estimates as to how long it will take to determine such applications for compensation; and

(d)details of an independent complaints process available for those applying for compensation under the redress scheme.

(2) In this regulation, "conflict of interest" has the meaning given by regulations 5(3)(b) and 5(4).

Required terms

7.  The terms required by this regulation are-

(a)that a third party may not submit a claim on behalf of those entitled to compensation under the redress scheme;

(b)that the scheme will operate for a period of at least nine months.

Review

8.-(1) The Secretary of State must from time to time-

(a)carry out a review of these Regulations,

(b)set out the conclusions of the review in a report, and

(c)publish the report.

(2) The report must in particular-

(a)set out the objectives intended to be achieved by the regulatory system established by these Regulations,

(b)assess the extent to which those objectives are achieved, and

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.

(3) The first report under this regulation must be published before 1st October 2020.

(4) Reports under this regulation are afterwards to be published at intervals not exceeding five years.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations set out how the Competition and Markets Authority ("CMA") and sectoral regulators (defined in section 54(1) of the Competition Act 1998) must consider applications for approval of a redress scheme under section 49C of the Competition Act 1998.

An applicant for approval of a redress scheme must apply in writing to the CMA with a summary of the proposed scheme (regulation 3).

Save for where the CMA is approving the scheme at the same time as the related infringement decision, the CMA may approve a redress scheme only if it has been devised in accordance with regulation 5 and contains all the information required by regulation 6 and all the terms required by regulation 7 (regulation 4(1)).

Where the CMA approves the scheme at the same time as it reaches an infringement decision, the applicant must provide information as to when the requirements of regulation 4(1) will be fulfilled and the CMA must be satisfied that any conditions imposed will ensure the requirements of that regulation will be complied with (regulation 4(2)).

Regulation 8 requires the Secretary of State to review the operation and effect of these Regulations and publish a report before 1st October 2020 and every five years after that. Following a review it will fall to the Secretary of State to consider whether the Regulations should remain as they are, or be revoked or amended. A further instrument would be needed to revoke the Regulations or to amend them.

The impact assessment for private actions provisions of the Consumer Rights Bill, contains an assessment of the effect of alternative dispute resolution and can be found at the website: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/69124/13-502-private-actions-in-competition-law-a-consultation-on-options-for-reform-final-impact.pdf. No separate impact assessment has been produced as no significant impact on the private or voluntary sectors is foreseen.