A Duty to be Consistent? R v Director General of Electricity Supply, ex p ScottishPower plc

Published date01 January 1998
Date01 January 1998
AuthorAileen McHarg
A Duty to be Consistent? RvDirector General of
Electricity Supply, ex p ScottishPower plc
Aileen McHarg*
One notable consequence of privatisation for the major utility industries is not that
their relationship with the state has thereby ceased, but that it has been legalised or
Compared to the situation under nationalisation, the industries are now
subject to far more extensive and detailed statutory and licence obligations and
face a range of new legal sanctions for breach, administered by dedicated
regulatory offices. Perhaps surprisingly, though, disputes between the companies
and their regulators over the proper interpretation of the new regimes have as yet
rarely ended up in the courts. Indeed, RvDirector General of Electricity Supply,
ex p ScottishPower plc
is only the third reported action brought by a utility
company against a regulator,
and the first in the electricity sector.
Part of the explanation for this state of affairs may lie in the largely consensual
relationships between regulators and the industries which have lingered on after
and in the general leniency of the initial regulatory regimes. It is
only as competition has begun to bite and/or regulation has become tougher that
relations have become more adversarial and the companies have felt it necessary
to resort to legal action to defend their position.
No less important, though, is
the fact that juridification of government-utility relations is incomplete. Although
the legal expectations of the companies are now much more precise, the
regulators themselves continue to enjoy very broad discretionary powers, thereby
The Modern Law Review Limited 1998 (MLR 61:1, January). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA. 93
* Department of Law, University of Bristol.
1 See generally C. Scott, ‘The Juridification of Regulatory Relations in the UK Utilities Sectors’ in J.
Black, P. Muchlinski and P. Walker (eds), Commercial Regulation and Judicial Review (Oxford: Hart
Publishing, forthcoming 1998).
2Lexis, 3 February 1997 (CA).
3 Both major telecommunications companies have brought actions against their regulator — Mercury
Communications Ltd vDirector General of Telecommunications [1996] 1 All ER 575 (HL); Rv
Director General of Telecommunications, ex p British Telecommunications plc, Lexis, 20 December
4 Though the electricity regulator has been successfully challenged in the past (on a narrow point of
vires) by a customer — RvDirector General of Electricity Supply, ex p Redrow Homes,The Times,
21 February 1995; the only other attempted challenge of which the author is aware, by a consortium
of trade unions and customer groups (the Coalition for Fair Electricity Regulation), failed at the leave
stage — see OFFER Press Release R31/92, 10 September 1992. Following the decision in
ScottishPower, however, Northern Ireland Electricity has sought leave to apply for judicial review of
the Northern Ireland electricity regulator’s refusal to implement fully the pricing regime
recommended for the company by the Monopolies and Mergers Commission, The Times, 16 August
5 This is the result partly of habit and partly of design, as most of the companies have realised that it is
not in their best interests to antagonise the regulator. The one company which did adopt an adversarial
approach from the outset — British Gas — has lived to regret it.
6 They also appear to be using the threat of legal action more often as part of the regulatory bargaining
process. In the electricity sector, for example, the Public Electricity Suppliers were reported as
threatening to seek judicial review of the obligations that the regulator has proposed they should bear
once the supply market is fully opened to competition in 1998 — see, eg, Financial Times,5
December 1996.

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