Mr. Justice William McKechnie

Supreme Court of Ireland

Brussels, 20 January 2017

Scope of Judicial Review of

NRA’s Decisions in Ireland

Seminar for National Judges on the Role of the Judiciary

in the Changing Digital Single Market

Core Legislation

• Communications Regulation Act 2002

• Framework Regulations (2011)

• Access Regulations (2011)

The Framework Regulations 4. Right of appeal against decision of Regulator

- User/undertaking affected by decision of ComReg may appeal to the H. Ct against the decision (28 days)

6. Powers of High Court with respect to appeals

(1) H. Ct to hear + determine appeal; may make such orders as it considers appropriate

(2) Without limiting para. (1), H. Ct may make an order—

(a) affirming or setting aside all/part of the ComReg decision

(b) remitting the case to ComReg to be reconsidered, with or without hearing further evidence, in accordance with the H. Ct’s directions

7. Effect of appeal on operation of Regulator’s decision

(1) Lodging an appeal with the H. Ct does not affect operation/ implementation of the ComReg decision

(2) However, H. Ct may stay operation/implementation if necessary such a stay has effect for period specified or until H. Ct judgment

Statutory Appeals – General [1/2]

• Meaning/Purpose b/y legality / rationality

• Words/Context everything

• Domestic provisions influenced by Union law

• Nature of decision-maker

• Function/power

– Supervisory role

– Monitoring role

– Advisory role

• Curial deference

Statutory Appeals – General [2/2] • H. Ct

– De novo

– On the record

– Against error

– Point of law: certification

• H. Ct – Confirm decision / prohibit issue of licence

– No reassessment of merits / substitution of views

– Serious and significant errors / series of errors

• H. Ct – Confirm; amend; revoke decision

– Significant erroneous inference / root of decision

• H. Ct – Issue of fact / law

– On the record / unless reasonable to so do

– Matters accepted/found by decision maker were correctly so accepted/found

Conclusion

Pulled / multiple directions – sheer variety shifting standards

Scope of Appeal under the

Framework Regulations

• Key case: Vodafone Ireland Limited v.

Commissioner for Communications

Regulation [2013] I.E.H.C. 382 (Cooke J.,

14 August 2013)

Vodafone

Background [1/4]

• Appeal against two decisions of ComReg

(“the SMP decision” and “the price control

decision”) imposing cost recovery and

pricing obligations on Vodafone in respect

of charges to other telecommunications

service providers for MVCT service

• Imposed maximum price for calls made to

a subscriber on its network by a subscriber

to another mobile network

Vodafone Background [2/4] • Could ComReg rely on Recommendation 2009/396/EC

of 7 May 2009 on Regulatory Treatment of Fixed and Mobile Termination Rates in the EU?

• Recommendation stipulates that for the purpose of implementing the price control obligations imposed on an MVCT service, a particular cost recovery methodology called “long-run incremental costs” (“L-RIC cost recovery methodology”) (LRIC) is to be used and applied by the addressee service providers.

• ComReg relied on the Recommendation as basis for the contention that it was entitled to fix the MVCT rates not by reference to the LRIC methodology but on a “benchmarking” of results obtained by the NRAs applying LRIC methodologies in a number of member states.

Vodafone Background [3/4]

Vodafone appealed, arguing that:

1. LRIC methodology is incompatible with the relevant provisions of the Access Regulations authorising the imposition of price control and cost recovery obligations

2. ComReg acted unlawfully by fixing the MTR (mobile termination rates) figures not by reference to any actual costs of service providers in the Irish market, but by “benchmarking”, i.e. by taking an average of the corresponding prices fixed according to the LRIC methodology as notified to the Commission by NRAs in seven other member states.

Vodafone

Background [4/4]:

ComReg responded that:

• The LRIC methodology and its implementation by benchmarking are fully compatible with the requirements of the Regulations and the Directives and ComReg is entitled to adopt both on the basis of the reasons and analysis given in the contested decisions and having regard especially to its obligations to take “utmost account” of the 2009 Recommendation.

Vodafone [1/8] Scope of the Appeal

• Although uniformity in approach of H.Ct to statutory appeals is desirable, the terms and scope of remedies under available various statutory appeals invariably take account of the particular subject matter, circumstances and requirements of the administrative processes concerned especially where statutory remedy lies against an authority charged with making determinations in areas requiring economic, financial, scientific or technological expertise

• Starting point and overriding principle in considering scope of a statutory appeal and approach which Court must take: appeal will be governed by the particular terms in which the statutory right of appeal has been created by the legislator (even more important where appeal process has its origin at EU level)

Vodafone [2/8] • Article 4 FD requires MS to provide users and

undertakings with a “right of appeal” against

decisions of an NRA

does not impose any qualification on

nature/scope of appeal other than requirements

that it be effective and that the “merits of the

case” are taken into account.

• Appeal body is to have the appropriate expertise

available to it – thus clearly expected to fully

examine all technical, economic, financial or

other factors

Vodafone [3/8] • Detailed transposition of Article 4 in Framework Regulations

does not curtail broad scope of the appeal

• Wide scope of the appeal, as compared with many other statutory appeals, is evident from a number of points in the Framework Regulations:-

- The H. Ct is to hear and determine the appeal and make “such orders as it considers appropriate”;

- These may include setting aside a decision in whole or in part;

- H. Ct is entitled (but not obliged) to remit a decision to ComReg for reconsideration with or without directions as to how that reconsideration is to be conducted; and

- Pending determination of the appeal, the Court may stay the operation / implementation of a decision either in whole or in part

Vodafone [4/8] • No express mention of Art. 4 requirement to take

account of merits of the case, but clear from Framework Regulations that an examination of the substantive merits may be undertaken by the Court when material factors of that kind are put in issue on the appeal

• Thus “a relatively straightforward matter to so define the scope and nature of the appeal and the remedies available to be applied by the Court”

• Further issue: how badly “wrong” must appellant demonstrate the decision to be in order to require the Court to set it aside what degree of gravity of error on the part of ComReg must be established if the appeal is to succeed?

• No definition of that standard in the legislative provisions

Vodafone [5/8]

• Ct considered that the nuances of different standards to be applied for distinct statutory appeal procedures had no material bearing on the approach to this case.

• First principle: nature/scope of each appeal is governed by the particular terms of the legislation

• Standard to be applied is dictated by: subject matter of decision under appeal; the type of expertise deployed by the relevant decision maker; the extent/quality of any consultation process; and the degree of scrutiny expected of the H. Ct having regard to the powers of annulment, alteration or reformulation conferred

• Art. 4 and Reg. 4 embody an expectation that H. Ct will, if necessary, exercise a more extensive degree of scrutiny of substantive aspects, including the merits, of a ComReg decision, this because of the requirement that the Court have appropriate expertise available to it for the purpose

• This contrasts with assumption made by Keane C.J. Orange Limited that the relevant areas of expertise would not be available to the High Court

Vodafone: [6/8]

Vodafone [7/8] Conclusion:

• Approach to appeal under Regulation 4 should be as follows:

– If established that decision under appeal is vitiated by a material error of law, inc. a significant failure to comply with a mandatory requirement of the Regs or a misinterpretation / misapplication of the Regs, H. Ct should intervene to make an order appropriate to the effect of that deficiency

– Should also intervene where decision is vitiated by a serious and significant error or series of errors

– Having regard to apparent purpose of appeal in requiring the merits to be taken into account, Ct is also obliged to consider whether the decision is “wrong” in the sense contended for by an appellant …

– However, to be wrong in that sense the Ct must find a serious, significant and material mistake such that the operation / implementation of the decision as it stands would be manifestly unreasonable, disproportionate or incompatible with the outcome sought to be achieved through the regulatory remedies which ComReg is entitled to impose.

– Distinction must be made in respect of technical and policy decisions by the Regulator in choosing a solution to the problem sought to be addressed. If analysis conducted and expertise relied upon are free from serious defect, and reasons for choosing the particular solution are adequately explained, a decision ought not be set aside upon the sole ground that the appellant and its experts contend that a better / different solution was available

Vodafone [8/8]

Subsequent Developments

• Vodafone: appeal to Sup. Ct –

discontinued

• Eircom Ltd. v. ComReg [2015] IEHC 51-

settled

• No legislative measures pending

• Any further questions?

Framework Directive

Article 4

Right of appeal

1. Member States shall ensure that effective mechanisms exist at national level under which any user or undertaking providing electronic communications networks and/or services who is affected by a decision of a national regulatory authority has the right of appeal against the decision to an appeal body that is independent of the parties involved. This body, which may be a court, shall have the appropriate expertise available to it to enable it to carry out its functions. Member States shall ensure that the merits of the case are duly taken into account and that there is an effective appeal mechanism. Pending the outcome of any such appeal, the decision of the national regulatory authority shall stand, unless the appeal body decides otherwise.

Eircom Ltd. v. ComReg [2015] IEHC 51

Submissions: Appellant (Eircom)

• Scope of right of appeal must reflect Art. 4(1) FD – means appeal on any/every aspect of merits

• Expected to examine fully technical / financial / other matters factors raised by appellant & necessary to determine appeal

• Standard of review not only greater than in judicial review, but also than standard in Orange (statutory appeal of reg. body)

• “Extensive degree of scrutiny” expected

• Thus question is two-fold: a) did ComReg exercise its discretion reasonably; b) are the reasons justifying the Decision relevant and sufficient

Respondent (ComReg) • Says Eircom failed to identify applicable standard and

scope of review – asking only “is it right or wrong” obscures scope of an appeal on the merits under Art.4 FD

• Says Eircom quotes from Vodafone case but not from Cooke J’s conclusions (para. 32)

• A statutory appeal in which the merits must duly be taken into account cannot be equated with a full appeal on the merits and certainly not a de novo or fresh hearing

• Not required to have “fully equipped duplicate regulatory body waiting in the wings just for appeals” (Jacob LJ, T-Mobile v. Ofcom)

• Vodafone case represents applicable approach; no basis to depart from it; Eircom comes nowhere near satisfying the test laid down therein

Notice Party (Vodafone) • If decision vitiated by material error of law (inc.

significant failure to comply w/ a mandatory requirement of Regs, or misinterpretation/misapplication of Regs), H. Ct can and should intervene

• Ct should also intervene if it is establish that decision is vitiated by a serious and significant error or series of errors

• Also obliged to consider whether decision is “wrong” – should be satisfied there is serious, significant and material mistake such that implementation of decision would be unreasonable, disproportionate or incompatible with outcome intended to be achieved by a remedy

• However, if decision is free of serious defect and cogently reasoned, should not be set aside on sole ground that Appellant contends better solution was available