Regulation diet

Posted: 12th August 2010

Regulation dietThe Coalition Government’s Your Freedom campaign to create a more open and less intrusive society will be welcomed by many as a breath of fresh air.

An article published on the DBIS website at the end of last month, following the call for responses and suggestions on business policies, reported that “the largest single issue was what is felt to be an excessive regulatory burden on business.

Pointing to the need for British businesses to be allowed to grow and to be free of “burdensome tick-box regulation and form filling” the Government has said that it is “committed to stopping the endless flow of regulation that can act as a barrier to growth, and instead only plans to regulate as a last resort”.

During the last week Business Secretary, Vince Cable, has announced his “one in, one out” approach to regulation to take effect from 1 September. In short, subject to exceptions for emergencies or to address systemic financial risks, ministers will not be allowed to introduce new regulations that impose costs on business without first identifying current regulations, with an equivalent cost, to be removed.

Most of us can think of example areas where we would like to see fewer rules and less red tape. Surely all of us welcome the idea of restraining further financial costs in the present climate.

It doesn’t mean that life generally gets any easier, in terms of keeping up-to-date with and inside the law. If anything, that task may become more difficult if for every new regulation introduced, an existing one is revoked.

As Michael Williamson observes, “we have seen two particularly significant revocations during the last decade. The Conditional Fee Agreements Regulations 2000 and the Dispute Resolution Regulations 2004 both lasted approximately five years, though at different times, during which each was remarkable for the volume of satellite litigation generated”.

“Even where the effect of revocation is broadly to return to the position that existed before the regulations, the transition is likely to give rise to confusion and cultural problems, “says Michael. “Until only recently, the Employment Tribunals website was still displaying the “old” and the “new” forms for filing and replying to tribunal claims, where the rule changes first took effect in April 2009, and we still have representatives of paying parties, usually in the context of personal injury actions, arguing that costs in relation to claims arising after November 2005 are not recoverable for reasons that derived solely from regulations that were revoked nearly five years ago!”

The lesson is that dismantling old rules, as much as bringing in brand new ones, means change and risk as well as opportunity. The Government’s agenda is likely to generate more of all of them.

Here at Williamsons we will be watching closely and ready to help when people wonder which set of rules they should play by today, tomorrow or the next day!