Commentary on Sections Schedule 7: Enforcement of regulatory requirements
458.This Schedule provides for the enforcement of regulatory requirements imposed on postal operators (or those party to an arrangement through which access is required as a result of paragraph 6 of Schedule 3) by OFCOM. A regulatory requirement means any regulatory conditions imposed under Part 3 of the Act, as well as directions in relation to schemes about the terms and conditions for the provision of postal services (section 89A of the Postal Services Act 2000), directions in relation to the Postcode Address File (under section 116(2A) of the Postal Services Act 2000) and in relation to the enforcement of requirements to give information to the National Consumer Council (section 25(5) of the Consumers, Estate Agents and Redress Act 2007).
459.Paragraphs 2 to 4 provide for contravention notifications. OFCOM may give a notification that they have reasonable grounds to believe a person is contravening or has contravened a regulatory requirement. A notification must specify a period giving the person notified the opportunity to make representations, comply and remedy the consequences. That period must be one month, or less than a month by agreement, because of repeated contravention, or because the case is urgent, and OFCOM may also specify a longer period. OFCOM may give a further notification for the same contravention only if certain conditions are met. OFCOM may not give a notification if they decide that the more appropriate way of proceeding would be under the Competition Act 1998.
460.The Schedule provides for various sanctions for contraventions and a power to deal with urgent cases in case of contravention.
461.Paragraph 5 provide for enforcement notifications, where a contravention notification has been given, OFCOM have allowed an opportunity for representations, and the period for representations has ended. OFCOM may give an enforcement notification if they are satisfied that the person is in contravention and steps have not been taken for complying with the requirement and remedying the consequences of the contravention. This requires the person notified to comply with requirements and/or take remedial steps. There is a duty to comply with the notification, which is enforceable in civil proceedings.
462.As set out in paragraphs 6 and 7, OFCOM may impose, in addition to an enforcement notification, a penalty on a person who has been given a contravention notification, when OFCOM have allowed an opportunity for representations, and the period for representations has ended. Penalties must be appropriate, proportionate and not more than 10% of turnover of the person’s postal services business for the relevant period, calculated in accordance with rules made in order by the Secretary of State. Such an order is subject to affirmative resolution procedure. OFCOM must have regard to representations made by that person and any steps taken to comply or remedy the consequences of the contravention.
463.Paragraphs 8 to 10 relate to the power to deal with urgent cases. A case is urgent if the contravention results in or creates a serious threat to the safety of the public, to public health or to national security, or serious economic or operational problems for other postal operators or users. OFCOM can give a direction suspending or restricting the entitlement of the contravening person to provide postal services. In doing so, OFCOM may also impose conditions appropriate to protect users of the contravening person, including making payments for compensation. If there is a direction in an urgent case, an opportunity for making representations and for proposing remedial steps must be given as soon as reasonably practicable after making the direction. At the end of that period, OFCOM must determine whether there was a contravention and whether treating the case as urgent was justified. If so, then OFCOM may then confirm the direction. If not OFCOM must modify or revoke the direction.
464.Under paragraphs 11 to 14, OFCOM may give a direction to suspend or restrict the entitlement of a contravening person to provide postal services. OFCOM may give a direction under these paragraphs only if: (a) the contravening person has been or is in serious or repeated breach, (b) a previous attempt (through an enforcement notification or penalty) to secure compliance has failed and (c) it is appropriate and proportionate. A direction may impose conditions, including payments for compensation. Before giving a direction OFCOM must notify the contravening person, give an opportunity to make representations and propose remedying the situation, and must consider every representation. OFCOM must give one month’s minimum notice, except in urgent cases.
465.In relation to urgent cases or suspension or restriction of the entitlement of providing postal services, a person is guilty of an offence if it provides any service while it is suspended or in contravention of the restrictions imposed.
466.The duty to comply with regulatory requirements or requirements imposed by an enforcement notification, a suspension direction or a direction for urgent cases is owed to every person who may be affected by a contravention of it. A breach of that duty that causes loss or damage, or an act which intentionally causes the breach of that duty and results in loss and damages, is actionable. It is a defence for the contravening persons to show they took all reasonable steps and exercised all due diligence. Bringing proceedings for contravening the underlying regulatory obligation requires the consent of OFCOM.