Joint Committee on Statutory Instruments Sixteenth Report


SIXTEENTH REPORT


FROM THE JOINT COMMITTEE OF BOTH HOUSES APPOINTED TO SCRUTINISE STATUTORY INSTRUMENTS, ETC.

1. The Committee has considered the instruments set out in the Annex to this Report and has determined that the special attention of both Houses does not require to be drawn to any of them.

MOTOR VEHICLES (COMPULSORY INSURANCE) (INFORMATION CENTRE AND COMPENSATION BODY) REGULATIONS 2003 (S.I. 2003/37)

2. The Committee draws the special attention of both Houses to these Regulations on the ground that there was an unjustified breach of the 21-day rule, that they are defectively drafted in one respect, and that there is doubt as to whether a provision is intra vires.

3. These Regulations were laid before Parliament on 13 January 2003 and came into force on 19 January 2003. They therefore contravened the 21-day rule mentioned in paragraph 5.21 of Statutory Instrument Practice, which requires that instruments subject to annulment should normally not be brought into force until 21 days after laying. In a memorandum submitted with the Regulations (printed in Appendix 1), the Department for Transport explains that "unexpected difficulties and drafting issues [which] arose late in the drafting process" prevented it from ensuring compliance with the 21-day rule. The Committee asked for an explanation as to why drafting work was not started earlier so that the drafting issues could have been resolved in time for the Regulations to have been made and laid without breaching that rule. In its second memorandum (also printed in Appendix 1), the Department states that drafting work began in June 2002, but it later became apparent that this timetable would not ensure compliance with the 21-day rule.

4. The Committee, while recognising the need for the Regulations to come into force on 19 January 2003, does not find the reasons for the breach of the 21-day rule convincing. Given that the Department (as its first memorandum indicates) was well aware of the need to bring the Regulations into force on that date, the Committee considers that it should have been possible to organise the work so as to ensure compliance with that rule. The Committee accordingly reports these Regulations for an unjustified breach of the 21-day rule.

5. Regulation 2(1) contains a definition of "guarantee fund" which (as the Department recognises) is not used elsewhere in the Regulations. The Committee accordingly reports regulation 2(1) for defective drafting, acknowledged by the Department.

6. Regulation 9(7) purports to authorise the Motor Insurers' Information Centre to charge a fee of not more than £10 for providing the requisite information. The Committee asked the Department to explain what authorised this provision, the basis on which the discretion (whether to charge a fee and the amount) would be exercised, and whether it was intended that there should be a standard fee for requests for information or whether the fee would be determined in respect of each particular request. The Department, in its second memorandum, states that the regulation is authorised by section 2(2) of the European Communities Act 1972. It also indicates that it is expected that there will be a standard fee of £10, and that it was felt that the Motor Insurers' Information Centre should have power to charge a lower amount or waive the fee in exceptional circumstances.

7. The Committee asked the Department to elaborate upon the statement that regulation 9(7) is authorised by section 2(2) of the 1972 Act, given that specific provision is made for the charging of fees in section 56 of the Finance Act 1973. The Department, in its third memorandum, explains that regulation 9(2) to (4) implements articles 5.3 and 5.4 of the Fourth Motor Insurance Directive, and that this Directive does not deal with the question of the recovery of costs for providing the information in question. However, the Department explains that Community jurisprudence establishes that costs may be recovered subject to certain rules, including that the Community measure does not prohibit recovery and that the costs charged are not excessive or distort competition. In the light of this, the Department argues that regulation 9(7) is authorised by section 2(2)(b) of the 1972 Act, which authorises regulations to make provision for the purpose of dealing with matters arising out of or related to any Community obligation of the United Kingdom.

8. Section 56(1) of the Finance Act 1973 provides that "Where a Government Department, in pursuance of any Community obligation or any international agreement or arrangement, provides any services or facilities or issues any authorisation, certificate or other document, it may, in connection therewith, require the payment of such fees or other charges as may be prescribed by, or determined under, regulations made by the Minister in charge of the department with the consent of the Treasury". This provision seems to proceed on the basis that section 2(2) of the 1972 Act does not authorise any implementing legislation to require the payment of fees or other charges for the provision of services or facilities in pursuance of a Community obligation. The Department, in its fourth memorandum, disagrees with this view for two reasons. First, it contends that there is nothing in the 1972 Act to suggest that, where a Community instrument imposes an obligation on Member States to provide services or issue documentation but is silent on the matter of charges, section 2(2)(b) confers no power to require the payment of fees or charges. Secondly, section 56(3) of the 1973 Act expressly preserves powers exercisable otherwise than under that section to require the payment of fees and charges; the section does not, in the Department's view, purport to occupy the whole field and it cannot be construed as amending or further restricting the scope of section 2(2) by implication.

9. The Committee is not persuaded by these arguments. It seems to the Committee that section 56 of the 1973 Act, to the extent it makes provision for the charging of fees for the provision of services or facilities in pursuance of a Community obligation, would not have been necessary if section 2(2) of the 1972 Act permitted the charging of fees. The Committee notes also that section 56(1) requires the regulations to be made with the consent of the Treasury. On the Department's view, this provision could simply be by-passed through the expedient of making regulations under section 2(2) of the 1972 Act. The Committee doubts whether such a result could have been intended. It may well be that section 56(1), in relation to the charging of fees for services provided in pursuance of a Community obligation, was enacted with a view to resolving two possible problems in the way of relying on section 2(2) in this context. First, the view may have been taken that the charging of fees does not as such arise out of a Community obligation, and that it is not directly related to it. Secondly, there may have been some doubt as to whether the charging of fees could amount to the imposition of taxation (which is prohibited by paragraph 1(1)(a) of Schedule 2 to the 1972 Act). Finally, the Committee notes that regulation 9(7) purports to confer a discretion on the Motor Insurers' Information Centre whether to charge a fee and, if so, the amount, subject to a maximum of £10. It seems to the Committee that this amounts to sub-delegation and, even on the Department's view of section 2(2) of the 1972 Act, that section does not (as the Department, in its fourth memorandum, acknowledges) confer a power of sub-delegation. For these reasons, the Committee considers that there is doubt as to whether regulation 9(7) is intra vires. It reports accordingly.

CROWN COURT (CONFISCATION, RESTRAINT AND RECEIVERSHIP) RULES 2003 (S.I. 2003/421)

10. The Committee draws the special attention of both Houses to these Rules on the ground that they are defectively drafted.

11. In a memorandum printed in Appendix 2, the Home Office accepts that, in rules 12(2)(a) and 15(2)(a), the reference to section 28 of the Proceeds of Crime Act 2002 should (consistently with section 30 of the Act and rule 11(2)(a)) have been a reference to section 6 as applied by section 28 of the Act, and undertakes to make the necessary correction at a suitable opportunity. The Committee accordingly reports rules 12(2)(a) and 15(2)(a) for defective drafting, acknowledged by the Department.

12. The Department also accepts that paragraphs (1) to (3) of rule 17 should not have been included, since they unnecessarily repeat provisions in section 41(3) and (4) of the Act. It undertakes to remove paragraphs (1) to (3) of rule 17 when a suitable opportunity arises. The Committee accordingly reports paragraphs (1) to (3) of rule 17 for defective drafting, acknowledged by the Department.

13. Paragraph (1) of rule 23 states that the rule applies to applications under section 62(3)of the 2002 Act for orders (by persons affected by the action of receivers). Given that section 62(3) provides that an application may be made by (a) any person affected by action taken by the receiver, and (b) any person who may be affected by action the receiver proposes to take, it was not clear to the Committee whether the italicised words were intended (as the underlined words indicate) to refer only to applications under section 62(3)(a). The Department states that the rule is intended to apply to applications under section 62(3)(a) and (b), and accepts that the underlined words do not make this clear. It undertakes to make the necessary correction when a suitable opportunity arises. The Committee accordingly reports rule 23(1) for defective drafting, acknowledged by the Department.

CROSS-BORDER PAYMENTS IN EURO REGULATIONS 2003 (S.I. 2003/488)

14. The Committee draws the special attention of both Houses to these Regulations on the ground that they require elucidation.

15. Regulation 3(1) provides that any contravention by an institution of Article 3 of the Community Regulation (Regulation (EC) No. 2560/2001 on cross-border payments in euro) shall be actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for the breach of statutory duty. The main purpose of Article 3 of the Community Regulation is to prohibit institutions from charging customers more for making cross-border payments in euro than for making corresponding payments in euro within a Member State.

16. The Committee asked the Treasury to explain the nature of the defences and other incidents referred to in regulation 3(1). In a memorandum printed in Appendix 3, the Department sets out the defences that are generally available at common law for claims for damages for breach of statutory duty, and explains that the phrase "other incidents" is intended to reflect the qualifying conditions (specified in the memorandum) that a person must satisfy in order to bring civil proceedings under either regulation 3(1)(a) or (b). The Committee reports regulation 3(1) on the ground that it requires the elucidation provided by the Department's memorandum.


 
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