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Consultation response

Regulatory Panel Reform: Consultation Response

Regulatory Panel Reform: Consultation Response

Published
21 July 2021

Last updated
21 July 2021 - Changes

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Proposal 1: Use of adjudicators on regulatory panels

Consultation question 4

Do you agree with the proposal to use adjudicators on regulatory panels?

Respondents’ views

The majority of respondents disagreed with the proposal. All the respondents who disagreed with the proposal provided comments to set out their concerns.

Broadly the key concern expressed by respondents was that the independence and impartiality of the Panel would be adversely affected by the proposal to use adjudicators. Respondents were generally of the view that the proposals would introduce inherent bias into the process and would generate conflicts of interest where adjudicators employed by the Commission would be reviewing Commission decisions. Some respondents questioned whether the Commission would be allowed to employ adjudicators as proposed under the current statutory guidance on delegated powers.

Several respondents commented that there was insufficient evidence available to support the proposals, with further details requested on the following points to inform their response:

  • details of the current Panel system, including the number of hearings, outcomes, costs and waiting times
  • job descriptions, selection and qualification criteria and details of management and appraisal processes for adjudicators
  • examples of other regulators using the ‘mixed panel’ model outlined in the proposal
  • an adjudication governance framework.

A number of respondents queried the rationale for the proposals and suggested that the key concern for the Commission was reducing costs. One respondent queried the cost estimates of £1000 per day for adjudicators, noting that this would not be sufficient to attract appropriately qualified and experienced applicants. Several respondents noted that the proposed one day per year of training would not be adequate and would not be comparable to the wide experience of Commissioners.

A number of respondents expressed concerns that moving from a Panel of Commissioners drawn from a broad range of backgrounds to adjudicators coming only from a legal background would not enable Panels to draw on a broad range of experience.

Several respondents raised issues with the proposal that adjudicators would also offer legal advice to the Panel, in place of the current system where the Panel has an independent legal adviser. The following points were noted:

  • the Commission should explain how the adjudicator could provide objective legal advice whilst simultaneously having a decision-making role in the Panel
  • a personal licensee’s Article 6 ECHR right is likely to be infringed because legal advice cannot be given in his/her presence, and the adjudicator will always have the benefit of receiving and knowing the legal advice beforehand
  • if external legal advice were required even with a legally qualified adjudicator, would those increased costs be passed to the operators?

A number of respondents set out grounds on which they felt challenges to decisions made by adjudicators could be made. As a broad point, a number of respondents stated that the proposed changes would result in a) a loss of confidence in the system and process of Panels and therefore b) an increased number of appeals to the First tier Tribunal, leading to higher costs for Licensees, applicants and the Commission.

A minority of respondents agreed with the proposal. The only comment provided by these respondents queried the definition of ‘legally qualified’ in the context of adjudicators, noting that there remained a need for broad operational experience and knowledge in decision making.

Our position

Impartiality

Regarding the concerns raised about the impartiality of Adjudicators, as employees of the Commission rather than Commissioners, it is the Commission’s view that the use of Adjudicators does not affect the impartiality of decision-making.

The Gambling Act 2005 (opens in new tab) specifically allows for any function of the Commission to be delegated to an employee – even the most serious actions, such as the revocation of a licence can be dealt with by members of Commission staff.

We would also note that Commissioners cannot be considered independent from the Commission; by virtue of Schedule 4 to the Gambling Act 2005, the Commissioners are the Commission. Although Commissioners are not employees, they cannot be seen as independent from the body that they govern and represent. As the Adjudicators’ sole engagement with the Commission will be in relation to Panels they will have no vested interest in the outcome of a particular case. Indeed, it may be said that they will have less interest than the Commissioners they are set to supplement, who do have a responsibility for the performance and reputation of the organisation more widely.

The legal background of the Adjudicators is a further mitigating factor; they have the training and professional responsibility to act fairly and discharge their functions properly. It will also be a contractual term that they are required to determine any matter before on the basis of the law and the evidence alone, in accordance with the procedures published by the Commission.

It is also important to recall that Panels are the final tier of the Commission’s internal decision-making processes, not an independent judicial process; the fully independent scrutiny of Panel decisions comes from the right of appeal to the First-tier Tribunal.

Role and status of Adjudicators

We note that more information has been requested to assist people in understanding the role and status of Adjudicators. Before these changes come into effect, we will publish the draft role description and AGF. The AGF includes:

  • role and qualifications
  • training plan
  • arrangements for management and appraisal
  • operating framework.

We recognise the particular concerns raised regarding the appraisal of Adjudicators. As a result, the annual appraisal of Adjudicators will be undertaken by a Commissioner. Their performance objectives will, of course, not be linked to agreement with the views of Commission officials. The performance management process for Adjudicators will be outlined further in the AGF.

Taking account of concerns regarding impartiality, we intend to take further steps to maintain a degree of separation between Adjudicators and other Commission employees. The Governance team will manage and co-ordinate the Adjudicators, and facilitate their access to other corporate services (eg IT and People Services). Adjudicators will be home-based, and will not have open access to Commission offices, reducing the possibility of incidental contact with wider Commission staff. These ways of working will also be written into the AGF.

We acknowledge that Commissioners bring a range of skills to the governance of the Commission, however when sitting on a Regulatory Panel they are required to keep their focus narrowly on the issues at hand. We anticipate Adjudicators will have practiced law in a range of settings, and will bring their own range of experience. In order to ensure Adjudicators have an understanding of the wider gambling environment they will receive the same induction training about the operation of licensed operators as Commissioners. This is stipulated in the AGF. The approach to the quorum of a Panel in all matters not involving personal licences means that the Panel will have at least one member who is a Commissioner, such that the Panel’s decision-making remains informed by the range of skills and experience Commissioners bring.

Respondents raised concerns about the procedural fairness of the Adjudicator taking over the legal advisory role in a Panel hearing. We do not agree and note that the proposed model replicates that used by other regulatory bodies; for example, the General Medical Council has in the past five years moved to a model of legally qualified Tribunal chairs and removed the legal advisor role. To ensure fairness, the AGF stipulates that in every matter before a Panel, an explanation of what the Panel/Adjudicator understands the law to be, on which they/he intends to rely, will be set out in a manner which enables the parties to challenge it and make submissions on it if they wish to do so.

The case for change

We were asked to provide further information about the current caseload.

In 2020-21 Panels were convened on four occasions, generating 1,741 pages of submissions for the Panel to consider, with a cost estimate to the Commission of £8,395 (for Panel and Governance time only – no legal costs are reflected). A further four hearings were requested by Licensees and subsequently withdrawn, resulting in the Commission incurring costs in preparation and management of 2,289 pages of submissions.

In 2019-20 Panels were convened eight times, generating 9,422 pages of submissions to the Panel, with a cost estimate to the Commission of £20,170 (for Panel and Governance time only – no legal costs are reflected). Two of the hearings were withdrawn at short notice by the Licensees resulting in the Commission incurring costs in preparation, Panel time and the management of just under 6,000 pages of submissions.

We do not consider that the number of Panels being convened reflects the totality of the burden placed on Commissioners through the work of Panels. In particular, we remain of the view that cases are becoming increasingly complex, with applicants asking the Panel to take decisions on matters of case management and procedure as well as matters of fact. In any event, the use of legally qualified Adjudicators will both better enable the Commission to deal with an increasingly legalised internal process, and will free the time of Commissioners to be spent on leading and overseeing the work of the Commission.

We were asked to provide examples of other regulators using a mixed model of decision-making. There are examples of this in health regulation (the General Medical Council, for instance), and in other regulated areas (Ofqual). However, we do note that there is no common statutory model for regulators, so decision-making processes do vary.

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Proposal 2: Changes to the ‘Scheme of Delegation of licensing and regulatory decisions
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