Regulatory appeals reform: Ofcom, the FCA and a single appeals system
In short: Regulatory appeals reform is the Department for Business and Trade’s proposal, published on 17 July 2026, to move economic-regulation appeals from the CMA to the Competition Appeal Tribunal and to apply one standard across every sector: judicial review principles taking due account of the merits. That is the standard already used for Ofcom. The consultation closes on 25 September 2026.
If an economic regulator can tell your business what to charge, how to run its network or which licence conditions to meet, the way you challenge that decision is set to change. On 17 July 2026 the Department for Business and Trade opened a consultation that would hand the Competition Appeal Tribunal almost every regulatory appeal the Competition and Markets Authority hears today, and give all of those appeals a single test. The test it has chosen is the one already applied to Ofcom. That makes this, for anyone who follows telecoms, a story about a standard of review that was argued over for a decade being exported to water, energy, air and postal regulation. This backgrounder on the regulatory appeals reform sets out where the appeals system stands, how the standard came to be what it is, what the reform would change sector by sector, where it leaves the FCA, and what a single appeals system would mean. Responses are due by 25 September 2026.
How regulatory appeals work now
Businesses challenge economic regulators’ decisions through several different appeal systems, and the differences are not tidy. Some appeals go to the Competition Appeal Tribunal, some to the ordinary courts, and a large group goes to the CMA. The CMA hears licence, price control and code appeals for water (the Water Services Regulation Authority, Ofwat), energy (the Office of Gas and Electricity Markets, Ofgem, and in Northern Ireland NIAUR), air (the Civil Aviation Authority) and postal services (Ofcom, under section 59 of the Postal Services Act 2011). It also carries out the price control redeterminations and regulatory references that the water and energy regimes send to it. The standard of review, the parties who may appeal and the powers of the decision-maker all vary from sector to sector.
The government’s own evidence is that the system feels opaque to the businesses inside it. Only 15 per cent of respondents to its 2024 Business Perceptions Survey said that appealing a regulator’s decision is easy and transparent. The volume is low: the CMA hears only one or two regulatory appeals in a typical year, and each ties up an enforcement body whose markets work the CMA estimates has delivered more than £1.7 billion a year in consumer benefits. Keeping a bespoke appeals function running for a handful of cases, when the CMA is also being asked to focus on markets, is part of what the reform is trying to solve.
Telecoms already sits apart. Appeals against Ofcom decisions go to the Tribunal under section 192 of the Communications Act 2003, but the Tribunal must refer the price control elements to the CMA under section 193 and then decide those elements in line with the CMA’s determination. Everything else in an Ofcom appeal the Tribunal decides for itself under section 194A, on judicial review principles. That split, and that standard, are the product of a long argument.
Why the standard of review was fought over
The move to judicial review was contested for the best part of a decade, and it is the part of this reform most relevant to the other sectors. Until 2017 the Communications Act 2003 required the Tribunal to decide Ofcom appeals on their merits, reflecting Article 4(1) of the EU Framework Directive, which required an appeal in which the merits of the case were duly taken into account. A full-merits appeal let the Tribunal look again at the economic judgment behind a decision and decide whether it was wrong, not merely whether it was lawfully reached.
From 2013 the government argued that this went too far. Merits appeals, it said, were slow and expensive, and large incumbents used them to delay pro-competition remedies that smaller rivals needed. Not everyone accepted that. Analysis by the economic consultancy Oxera cut the other way (Robin Noble, What are the merits of appeals on the merits?, Oxera Agenda, 2013): of the appeals decided between 2008 and 2012, seven succeeded and 28 did not, and the whole appeals system cost about £21.8 million a year, which Oxera put at under 0.1 per cent of regulated-sector investment. On that reading, merits appeals were neither frequent nor ruinous, and they improved the quality of decisions. The government’s 2016 impact assessment made the delay-and-cost case anyway, and section 194A, enacted through the Digital Economy Act 2017, replaced the merits standard with judicial review.
The evidence gathered since supports the process case. The CMA’s 2023 evidence to the House of Lords found that judicial review appeals reached a first hearing in about four months against nine for full merits, ran roughly six months end to end against thirteen, took about two hearing days against eleven, and cost around £260,000 against more than £500,000. Speed and cost are only half the argument, though. Julia Black’s account of the regulatory state treats appeal rights as an accountability mechanism rather than a drag on efficiency (Julia Black, ‘Tensions in the Regulatory State’ [2007] Public Law 58), and the case for merits review has always been that the discipline of a searching appeal makes a regulator get the decision right first time. Pablo Ibáñez Colomo’s analysis of European telecoms regulation also records that the UK’s full-merits appeal was unusual: across the EU, regulators’ decisions were generally reviewed on judicial-review-type grounds (Pablo Ibáñez Colomo, Future-Proof Regulation against the Test of Time, 2022).
What emerged for telecoms was not bare judicial review but a middle position. Section 194A enacts judicial review principles; what those principles require in practice, when applied to an expert regulator’s decision, was worked out by the Tribunal. In TalkTalk v Ofcom [2020] CAT 8 it held that it applies those principles while taking due account of the merits, and asks whether the regulator’s decision was materially wrong. It does not remake the decision, but it does more than check the boxes. That case-law formulation is the one the consultation now proposes to write across every economic-regulation appeal.
What the regulatory appeals reform would change
The core of the reform is to transfer to the Competition Appeal Tribunal every regulatory appeal the CMA currently hears, and to let the Tribunal decide the price control matters in telecoms appeals that section 193 now sends to the CMA. The government’s case is that the CMA is primarily an enforcement body, that diverting one or two appeals a year away from its markets work is inefficient, and that the Tribunal is a specialist judicial body which already hears Ofcom, PSR and CAA appeals and can run active case management. One appellate home, the argument runs, brings consistency and lets sectors read across each other’s decisions.
The second change is the standard. For all regulatory appeals the Tribunal would apply judicial review principles while taking due account of the merits, asking whether the regulator’s decision was materially wrong. Appellants would appeal on defined grounds, an error of fact, an error of law, or an error in the exercise of the regulator’s discretion, and new evidence and cross-examination would be handled under the Competition Appeal Tribunal Rules. That telecoms standard, set out above, becomes the template for water, energy, air and postal appeals, several of which currently run on specified statutory grounds or, for water price controls, on a full redetermination in which the CMA takes a fresh look and can substitute its own view.
The remedy narrows accordingly. Across all regulatory appeals the Tribunal could dismiss the appeal or quash the decision, in whole or in part, and remit it to the regulator to decide again in line with the Tribunal’s ruling. It would not substitute its own decision. The government would also turn the water regulatory references and redeterminations into appeals on the same model and remove the energy references to the CMA, so the framework points one way. Eligibility and costs are open too. The consultation asks whether the right to appeal should be harmonised so it runs to licence and appointment holders and to persons materially affected, including consumer bodies, with the Tribunal’s permission required to appeal or intervene, and whether costs should be capped for consumer groups who are otherwise deterred by the risk of paying the regulator’s costs if they lose.
The sectors that change most
The regulatory appeals reform reads very differently depending on where a business sits. For telecoms, it changes the structure, not the standard of review. Ofcom appeals have run on judicial review principles since 2017, so the harmonised standard is already the day-to-day reality; the real gain is ending the section 193 split, so that one body decides an Ofcom price control appeal from start to finish rather than parcelling the price control questions out to the CMA and waiting for them to come back.
For water and energy the change is larger. Energy licence and code appeals currently run on specified statutory grounds under the Gas Act 1986 and the Electricity Act 1989, with the CMA as the decision-maker; water price controls can be referred to the CMA for a redetermination in which it takes a fresh look at the numbers and can substitute its own. Both would become appeals to the Tribunal on the harmonised standard, decided on whether the regulator was materially wrong and remitted rather than remade. Air traffic and airport appeals under the Civil Aviation Act 2012 and the Transport Act 2000, and Ofcom’s postal price control appeals, would move across on the same basis. The table below sets the current position against the proposal.
| Feature | Now | Proposed |
|---|---|---|
| Appellate body | CMA, CAT or courts, depending on sector | Competition Appeal Tribunal for all regulatory appeals |
| Appeal standard | Specified grounds, full merits or redetermination, varying by sector | Judicial review principles taking due account of the merits |
| Telecoms price control | Referred by the CAT to the CMA under section 193 CA 2003 | Decided by the CAT as part of the whole appeal |
| Water price control | Redetermination by the CMA, which can substitute its own view | Appeal to the CAT, materially-wrong standard, remit only |
| Remedies | Dismiss, quash, remit or, in some sectors, substitute the decision | Dismiss, or quash and remit to the regulator |
| Costs | Appellants often pay the CMA’s review costs | CAT discretion; possible cost-capping for consumer bodies |
Where the reform leaves the FCA and payments
The FCA does not appear in the appeals table, and that absence is itself the point. Appeals against Payment Systems Regulator decisions are carved out of this consultation because HM Treasury is preparing separate legislation to abolish the PSR and transfer its functions to the FCA, including the payment systems sector’s appeal routes. Payments firms’ sector-specific challenge rights therefore turn on the PSR-into-FCA workstream, not on this consultation. That consolidation is set out in our post on the Financial Services and Markets Bill 2026.
The consultation’s third chapter, on Competition Act 1998 enforcement, reaches the FCA instead. Those reforms are framed to apply to the CMA and to the concurrent regulators, a group that includes both Ofcom and the FCA and that we set out in our explainer on concurrent competition powers. The proposals would let the CMA set its own CA98 decision-making model in guidance rather than in the rules, put confidentiality rings on a prescribed footing backed by civil sanctions, make a no-appeal undertaking a condition of settlement, streamline access to the investigation file, and confirm that competition disqualification orders can catch former directors and overseas conduct. They would also add a fixed penalty cap of up to £300,000 for undertakings with no representative turnover, mirroring the consumer-enforcement cap in the Digital Markets, Competition and Consumers Act 2024.
The concurrency framework is what makes this matter for the FCA. When the FCA exercises its Competition Act powers in financial services, it works within the same procedural architecture as the CMA, so a change to the CMA’s rules and decision-making model does not stay with the CMA. It sets the pattern the concurrent regulators follow. For a firm on the receiving end of a CA98 investigation by the FCA, or by Ofcom in communications, the practical effect of these reforms is faster and more streamlined procedure, with the trade-off that some of the procedural steps a respondent could previously rely on move from hard rules into regulator guidance.
What a single appeals system would mean
The deeper significance of the regulatory appeals reform is that it settles, for the whole of economic regulation, a question that has only ever been resolved sector by sector. By choosing judicial review with due account of the merits, the government is not picking bare judicial review; it is picking the telecoms compromise reached in TalkTalk, and treating a decade of telecoms experience as proof that the compromise works. For water and energy, where the current standards are more intrusive, that is a reduction in the intensity of review. The CMA’s evidence supports the claim that appeals will be faster and cheaper; the corollary, that it becomes harder to overturn a regulator’s economic judgment, is the analytical implication of a materially-wrong standard rather than a finding the CMA made.
A single appellate body applying a single standard also changes how the law will develop. Once the Tribunal decides water, energy, air and postal appeals on the same test it applies to Ofcom, its telecoms case law, TalkTalk included, is likely over time to influence how appeals in those sectors are decided. Cross-sector precedent is not a side effect of the reform; it is one of its stated aims. That is an advantage for predictability, because a licence holder or investor can look across sectors to see how the standard is applied, and a risk for sector nuance, because a price control in water is not built like a price control in telecoms and the same review test may fit them unevenly. Whether a water or energy determination resembles a telecoms price control closely enough for the same standard to sit comfortably over both is untested.
The remedy design carries its own consequence. Because the Tribunal would remit rather than substitute, a successful appellant does not walk away with a better number; it wins the right to a fresh regulatory decision, which the regulator then makes again within the Tribunal’s ruling. For a five-year price control that can mean real time passing between a successful appeal and a settled outcome, which matters more in capital-intensive regulated infrastructure than the headline speed of the appeal itself. The direction of travel is wider still. The same merits-against-judicial-review argument ran during the passage of the Digital Markets, Competition and Consumers Act 2024, which set judicial review principles as the standard for challenging its digital-markets conduct decisions. Read alongside that, this consultation would fix judicial review with due account of the merits as the UK’s default for challenging economic regulators across the board, and leave full-merits review as the exception rather than the rule.
Viewpoint
For telecoms, the reform is about structure. Ofcom appeals have run on judicial review principles since 2017, and TalkTalk settled how the Tribunal weighs the merits within them; ending the section 193 split so one body decides a price control appeal from start to finish is a sensible tidy-up that should shorten the appeals that matter most to network economics. The larger question sits with the sectors that never had this standard. Exporting the telecoms compromise to water and energy trades a fuller examination of the regulator’s economic judgment for speed and consistency, and reasonable people read that trade differently, as the decade of argument behind section 194A shows. The responses worth watching are the ones on eligibility and costs for consumer bodies, which decide whether harmonisation widens access or narrows it, and the ones on whether a remit-only remedy leaves regulated companies waiting through a second regulatory decision after they have won. My own view is that the regulatory appeals reform is right to consolidate the forum, and that harmonising the standard is defensible, but that the government should not assume the telecoms settlement transfers cleanly to price controls built on very different foundations.
Frequently asked questions
Which regulators’ appeals would move to the CAT?
The regulatory appeals the CMA currently hears for water (Ofwat), energy (Ofgem and NIAUR), air (the Civil Aviation Authority) and postal services (Ofcom) would transfer to the Competition Appeal Tribunal, together with the water and energy redeterminations and references. The Tribunal would also take over the telecoms price control matters that section 193 of the Communications Act 2003 now refers to the CMA.
What is the proposed appeal standard?
A single harmonised standard: the Tribunal would apply the same principles a court applies on judicial review, while taking due account of the merits, and ask whether the regulator’s decision was materially wrong. This is the standard already applied to Ofcom under section 194A of the Communications Act 2003, following the Digital Economy Act 2017 and TalkTalk v Ofcom [2020] CAT 8, rather than the fuller merits review or redeterminations used in some other sectors.
Why was the change from merits appeals to judicial review controversial?
The government argued merits appeals were slow, costly and used by incumbents to delay pro-competition remedies, and the CMA’s evidence shows judicial review appeals are faster and cheaper. The counter-argument is that a fuller appeal improves decision quality and protects regulated companies against poor economic judgments, and that the UK’s cost of appeals was small against the investment at stake.
Does the regulatory appeals reform change anything for the FCA?
Not directly on appeals. Payment Systems Regulator appeals are excluded because HM Treasury is separately abolishing the PSR and moving its functions to the FCA. The FCA is affected instead through the consultation’s Competition Act 1998 reforms, which apply to the CMA and the concurrent regulators, a group that includes the FCA and Ofcom.
When would the changes take effect?
There is no fixed date. The consultation closes on 25 September 2026, and the government proposes to legislate through sector-specific legislation when Parliamentary time allows, seeking legislative consent from the devolved governments where appropriate.
If you are weighing how the regulatory appeals reform would affect a decision you may need to challenge, or an enforcement matter under the Competition Act 1998, contact Rob Bratby at Bratby Law.
