Cost Assessment Guidelines, Decision & Order 2007

• Jurisdiction: Barbados
• Judge: Sir Neville Nicholls,Andrew Downes,Mrs. Tammy Bryan,Gregory Hazzard,Mr. Floyd Phillips
• Judgment Date: 01 January 2007
• Court: Fair Trading Commission (Barbados)

Cost Assessment Guidelines, Decision & Order 2007

Before:

Sir Neville Nicholls

Chairman

Professor Andrew Downes

Deputy Chairman

Mrs. Tammy Bryan

Commissioner

Gregory Hazzard

Commissioner

Mr. Floyd Phillips

Commissioner

FAIR TRADING COMMISSION

INTRODUCTION

1 The Fair Trading Commission (“the Commission”) established by the Fair Trading Commission Act Cap 326B (“FTCA”) is the independent regulator of international and domestic telecommunications services, electricity services and natural gas services.

2 In carrying out its duties as an independent regulator, the Commission must operate in a transparent, accountable and non-discriminatory manner. Consultative documents and the public consultation process are the main ways in which the Commission discharges its responsibilities relating to transparency and accountability.

3 In addition, the Commission is specifically empowered under the FTCA to consult with interested persons when it is discharging certain functions. Section 4(4) thereof states:

“The Commission shall, in performing its functions under subsection 3(a), (b), and (d) and (f) consult with the service providers, representatives of consumer interest groups and other parties that have an interest in the matter before it.”

Consultative Process

4 On important issues that arise in the regulation of the utility industries, the Commission may issue a consultative document.

5 On December 10, 2005 the Commission issued its Consultation Paper entitled “Cost Assessment Guidelines.”

6 The Commission has considered all responses submitted by interested parties and in establishing the Cost Assessment Guidelines, the Commission has incorporated where it deemed appropriate, useful suggestions arising from the consultative process.

7 The Commission wishes to thank all those persons who responded to the consultation paper.

BACKGROUND

8 On August 5, 2003 Cable & Wireless (Barbados) Limited “C&W” submitted an application to the Commission seeking to move from the current flat rate tariff system to a revised usage based system for residential and business users (domestic rate payers) of the domestic service.

9 As a result of the C&W application the Commission convened a rate hearing to deal with the issues. A number of persons called “intervenors” were allowed to participate in the hearing on behalf of Barbadian consumers. Most of the intervenors were not represented by legal counsel during the hearing.

10 At the end of the process, by way of a decision and order dated July 20, 2004, the Applicant's application was denied by the Commission. It was further ordered that the existing rates for the domestic telephone service should prevail and that the Commission (pursuant to an application made by persons who intervened in the rate hearing “the intervenors”) would hear the parties on cost on a date to be determined. The Commission confirmed its decision pursuant to a motion to review, on January 17, 2005.

11 While the Commission has the discretionary authority to award costs of and incidental to any proceeding before it under section 46 of the FTCA there were no regulations or guidelines to aid the Commission in making such an award. Moreover, this was the first occasion on which lay persons intervening in a rate hearing (“intervenors”) had intimated to the Commission that they would be seeking costs.

12 The Commission wished to ensure transparency in the process leading to the award of costs, therefore, a set of guidelines was developed which would assist the Commission and persons appearing before it in relation to awarding costs. It should be noted that no issue of retroactivity exists in relation to the guidelines coming after the rate hearing. The power to award costs already exists in section 46 of the FTCA. The guidelines therefore merely seek to bring transparency to the process.

13 When the drafting of these guidelines commenced it was believed that the statutory discretion to award costs conferred on the Commission, extended to the granting of an honorarium for intervenors that would represent an acknowledgement of the time spent in preparing for the hearing and appearing before the Commission.

14 The Commission subsequently completed and disseminated the Draft Cost Assessment Guidelines in December of 2005 and previously stated embarked on a public consultation process and invited comments on this document. The necessity for a public consultation arose from suggestions made by members of the public and other stake holders in October 2005 and dove tailed well with the Commission's statutory duty to consult with the public as aforementioned.

15 Many of the intervenors who responded to the public consultation interpreted section 46 aforesaid to mean that the law mandates that intervenors be paid costs. Further, the substratum of arguments advanced by the intervenors was to the effect that they wanted to be paid for appearing before the Commission and for preparing and presenting arguments in much the same way that an Attorney-at-Law before the High Court would be paid on a party and party basis. This position on the part of intervenors was made clear in their contributions to the public consultation exercise.

16 Two of the parties who responded to the said exercise objected to the insertion of the honorarium clause as stated in the guidelines. Additionally, various legal arguments were raised which suggested that the Commission may be acting ultra vires the FTCA in granting the said honorarium or any sums other than out of pocket expenses to intervenors as costs. In the circumstances, the possibility of an application for judicial review being made against the Commission was also raised. It was also suggested by one of the aforementioned parties that the Commission should proceed by way of case stated to obtain an opinion from the High Court.

SYNOPSIS OF COMMENTS

Barbados Consumer Research Organisation Inc. “BARCRO”

17 BARCRO stated that while they agreed to the implementation of the Cost Assessment Guidelines, these guidelines should only apply to future hearings. Furthermore, that the Cost Assessment Guidelines should not be retroactive in their effect as the guidelines superseded the rate hearing. Additionally, they stated that the only source from which guidance can be taken for awarding costs would be the Fair Trading Commission Act Cap. 326B.

18 Additionally, they also suggested that an Act be put in place to assist the operation of the intervener fund.

19 BARCRO further stated that, the basis under which intervener funding is usually granted, is an Act of parliament or by the regulation of a board or commission. The funding of interveners is necessary so that there will be balance between the consumers and the other party who have ample resources to represent their interest.

Public Counsel

20 The Public Counsel indicated that the importance of the role of the Public Counsel ought not to be overlooked, in formulating guidelines to award costs to interveners in utility matters. He stated that in the Public Counsel Government has provided an Attorney-at-Law with a budget for professional services and access to training in the relevant areas, to represent the interest of consumers in these matters.

21 When assessing the Cost Assessment Guidelines, Public Counsel examined the basis on which costs were awarded and cited section 46 of the FCTA and section 2 of the Supreme Court of Judicature Act, CAP.117A. Furthermore, he examined the basis under which an award of costs was traditionally made stating that it was made only to a litigant represented by an attorney.

22 The Public Counsel submitted that since there was uncertainty the Commission could consider stating a case in writing for the opinion of a judge, to determine whether or not the law permits the award for costs and or an honorarium to interveners who are lay persons.

23 Additionally, Public Counsel noted that care must be taken when dealing with the question of an award of costs.

David Comissiong on Behalf of Alvin Thorpe

24 Mr. Comissiong stated that he award of Costs to interveners should not be delayed until the guidelines are settled. To do so, would be unjust because of the length of time that the matter has been ongoing. Furthermore, it would conflict with the established legal proscription against retroactive legislation.

25 The guidelines were not in place at the time of the hearing. The only piece of legislation that was in place was section 46 of the FCTA. Furthermore, according to Mr. Commissiong the court of appeal has already pronounced on the matter of costs and has thereby provided the Fair Trading Commission with a precedent that can be used to guide the Commission on making an award of costs. The Commission is therefore urged to use the precedent and award costs to the interveners.

Barbados Light & Power Company Limited

26 The Barbados Light & Power Co. Ltd. “BL&P” believed that each individual or organisation (a participant) who intends to apply for a costs award should be required prior to the commencement of proceedings to submit a document:

• a. Setting out the grounds on the basis of which the claim for a costs award will be made by the participant; (see guideline 3.3)

• b. Identifying the key issues that the participant will examine;

• c. Indicating whether the participant expects to lead evidence and include an estimate of preparation days.

27 BL&P was also of the view that participants who represent an association or corporate entity or coalition of associations should provide evidence in writing from each particular coalition or group, identifying their general interest in the specific proceeding and authorizing representatives to act on their behalf.

Alvin Cummins

28 Mr. Cummins claimed that in as much as the Commission accepted the intervenor's letters of intervention that they are eligible for costs.

29 He suggested that...