Skip to main content
Insight

Law reform in the time of Covid-19

Edward Bowie
07/04/2020
With the global economy grinding to a near-halt as a result of Covid-19's catastrophic effects, businesses are trying to establish a 'new normal' working pattern. While supply chains, employee availability and substantially reduced demand-side pressures will each necessitate a rethink of business strategy, those operating in regulated sectors should also be keeping an eye on the medium-term landscape in which they operate.  For those businesses, that means understanding what this crisis is likely to do to already-flagged law reform proposals – and to identify where opportunities may lie. 

Many of the UK's regulators have already announced the postponement or cancellation of non-critical regulatory work. So far, this has included:
 
  • the abandonment of the 2020 bank stress tests;
  • the halting of the Bank of England's reviews of the quality of regulatory reporting by banks; 
  • an extension to the deadline for compliance with the NHS' new national data opt-out policy; and
  • the delay of the government's reforms to the off-payroll working rules, IR35.
Other policy reforms at their more embryonic stages are likely to have had their status and priority level quietly pared back in order to give regulators greater breathing space. Amongst other areas of reform, the volume of work associated with the Home Office and Department of Culture, Media and Sport's Online Harms reforms means that the government's ambitious timeframes – and the legislative programme accompanying it – are unlikely to be met. Likewise, the government's announcement at Budget 2020 – just one week before lockdown – that the Competition and Markets Authority would lead a Digital Markets Taskforce has already been scaled back, with a formal consultation process being scrapped in favour of a generic invitation for comment. 

These developments present both risks and opportunities for regulated businesses and regulators alike. The principal risk is of a regulator's failure to commit proper time and resourcing to the consultation processes that are necessarily associated with complex pieces of regulation. A core feature of good public policy – and one that is subject to the supervision of the courts via judicial review – is that consultation is carried out fairly and adequately. There is a real risk that where reforms progress quietly and 'under the radar', the consultation and decision-making processes are insufficient and therefore vulnerable to public law challenges. If a regulator would ordinarily have conducted an extensive piece of consultation for a proposed area of law reform, but due to circumstances is required to scale that back significantly, one can reasonably ask why the formal consultation processes are followed at all in normal times. The answer is that proper consultation allows all relevant voices and issues to be heard and scrutinised, leading to be better public policy outcomes. Curtailed consultation processes can therefore risk failing a regulator's public law obligations.

The opportunity presented to businesses is that the effect of offering targeted and thoughtful policy interventions may now be substantially heightened. While the crisis is affecting every government department and regulator, the bureaucracy is far from sclerotic. Ambitious ministers are eager to make a name for themselves under Downing Street leadership that prizes creativity and policy innovation. While sensitivity needs to be given to the timing and nature of any policy proposition, there has never been a better time to do the heavy lifting for Westminster. Well thought-through policy proposals that cater to the government's complex electoral mandate and take account of the state of the public finances post-crisis will be welcomed by government. 

The crisis therefore demonstrates the value for both businesses and regulators in always keeping an eye on the bigger picture. When the economy and government machinery come out the other side of this, it will be more important than ever that the country's policy settings are right to drive a sustainable economic recovery. The more work that regulated entities do now, the better placed they will be to deliver Whitehall a ready-made set of reforms. The wasted years of Brexit dithering must not be repeated. This time, those who want to survive not just this crisis but the medium and longer term need to ensure now that the regulatory settings in which they operate are fit-for-purpose in a post-crisis landscape. 

 

Sign up to our email digest

Click to subscribe or manage your email preferences.

SUBSCRIBE