Guidance on instructing Counsel: common legislative solutions

Designation of Bodies

Description of legislative solution

This legislative solution allows a body to be identified to perform certain, often specialist, functions. For example, a higher education regulator might want the assessment of the standards of higher education providers to be conducted by a specialist assessment body.

In many cases, the body must be either representative of a sector or otherwise suitable to be designated to perform the functions. The terms of the designation need to be considered.

The solution provides some flexibility, can ensure that functions are performed independently and by experts, and can also restrict the kind of bodies that may be designated.

NB: In some statutes, the language of "recognition" is used instead of "designation".

Related legislative solutions

The statutory corporation solution could be used to establish a body or person, which could become designated under this solution.

Elements of the solution

1. Identify functions to be designated

- What are the functions that the designated body will be required to perform?

• Are they functions that the body already exercises?
• Or are they functions that the body will need to exercise in addition to its current functions?
  • If so, will further powers be required?

- In some cases, the designated functions will be existing Ministerial functions ^[6] and the policy is that an external body would be better placed to perform those functions.

- In other cases, the policy will be that new functions should be performed by a body – if so, the new functions will need to be identified.

2. Identify type of body

- Should the designated body be a public body or a private body (perhaps performing public functions)? If it is a private body, there may be implications in terms of how to enforce any duties (such as through the use of injunctions).

- Should the body be a body corporate? This may not be necessary and depending on the designated functions, they could be performed by an individual or an unincorporated association.

- Should the body be based in the UK? It may create inflexibility to specify this.

3. Process of establishing a designation

- The process of establishing which body should be designated, and which functions it should perform, is important. However, the legislation may be more or less detailed depending on the policy and the circumstances.

- A less elaborate way of designating a body is to simply leave it to the discretion of a Minister or whichever relevant authority has the power to designate. Secondary legislation could also be used. However, who does the designation should be identified.

- A more elaborate way of designating a body could be as follows. This assumes that an authority (such as a regulator) has the power to designate.

• Before recommending a designation, the authority conducts a consultation with relevant stakeholders.
• Having consulted, the authority decides whether to recommend the body to perform the functions.
• The authority notifies the body (and Ministers if desired) of its decision.
• The body is then designated (subject to the agreement of Ministers if desired). A parliamentary procedure might be used, such as notifying Parliament or using secondary legislation.

- In each of the powers described in these steps, the powers could be duties.

4. Suitability of the designated body

- It is usual for a body to be designated only if it is suitable. Whether that is defined or implied is a policy question.

- If suitability is defined, the following points could be considered:

• Should there be a requirement for the body to be representative of the sector? If so, what is wanted in this regard?
• Should there be a requirement that the body is capable of performing the designated functions properly? If so, what is wanted in this regard?
• To the extent that the above issues are matters of opinion, who is to judge whether the criteria are met?
• Has the body agreed or applied to perform the designated functions?

5. Effect of designation

- Where there is a designation in place, the following things should be considered:

• If the designated body is performing functions of another body, should that other body be able to continue to exercise those functions?
• Are there any additional duties, such as reporting or information sharing duties, that should apply to the designated body?
• Are there any functions that the designated body should be prevented from performing whilst the designation is in place? This could address conflict of interest points.
• Also, if there is no designated body, who is to exercise the functions?

6. Oversight and withdrawal

- Linked to the effect of the designation, oversight of the designated body needs to be addressed. The following should be considered:

• Should the designated body provide information to the authority which made the designation or anyone else?
• Should the designated body provide an annual report?
  • If so, what associated requirements are there? For example, the timing of the report and how it should be published.
• Should the authority be required to conduct reviews of the designated body every few years?
  • If so, what associated requirements are there? For example, the timing of the review and how it should be published.
• Should the authority be required to inform anyone if it has concerns about the performance of the designated body?
• Should the authority be able to give directions to the designated body?

- This leads to a consideration of the circumstances when the designation should be withdrawn. These circumstances might include:

• Where the designated body is under-performing,
• Where the designated body and the authority agree, or
• When a specified time limit for the designation has run out.

7. Financial matters

- Should it be possible to pay the designated body for performing the designated functions?

- Should the designated body be able to charge fees for its services?

Examples of the legislative solution

Insolvency (Northern Ireland) Order 1989 Articles 350 and 350A (as substituted/inserted by Insolvency (Amendment) Act (Northern Ireland) 2016 section 14)

Communications Act 2003 ss. 368B and 368D (appropriate regulatory authority)

Higher Education Act 2004 ss. 13–18 (operator of student complaints scheme)

Financial Services Act 2012 section 43 (designated consumer bodies to make super-complaints). See section 234C of the Financial Services and Markets Act 2000, inserted by section 43 of the 2012 Act.

Financial Services (Banking Reform) Act 2013 section 68 (designated representative body to make complaints)

Regulatory Reform (Scotland) Act 2014 Part 2

Housing (Wales) Act 2015 section 3 (licensing authority – choice of designating a single authority for Wales, or different authorities for different areas in Wales)

Small Business, Enterprise and Employment Act 2015 sections 144 to 146 (regulator of insolvency practitioners)

Environment (Wales) Act 2016 section 44 (advisory body)

Higher Education and Research Act 2017, ss 27 and 66 (body designated to exercise assessment functions)