Regulatory appeals and the resourcing gap: who can afford to be heard?

Appeal rights mean little if only one side can afford to use them properly. This piece looks at what that gap actually costs, and what could close it.

Our previous piece[1] looked at the Department for Business and Trade's (DBT) proposal[2] to move regulatory appeals from the Competition and Markets Authority (CMA) to the Competition Appeal Tribunal (CAT), and what the harmonised right of appeal would mean across water, energy, aviation and telecoms. That piece focused on process: standard of review, remedies and sector-specific effects.

This one focuses on something the consultation barely mentions: money.

The DBT’s proposal extends a right of appeal not just to regulated companies but, in several sectors, to customers and customer representative bodies too. That sounds like a levelling measure. In practice, a right that only one side can afford to exercise properly is not much of a right at all.

What the consultation does not say

The DBT document runs through eligibility, standard of review and CAT procedure in some detail. On costs, it goes no further than a single, open-ended sentence, seeking views on "cost-recovery mechanisms or other arrangements that could support all eligible parties" in bringing an appeal. It proposes nothing, cites no figures, and does not engage with the scale of the gap between how well-resourced each side typically is.

A water company or energy network preparing a price control appeal will retain leading counsel, junior counsel and several economic experts, often for many months. A consumer body considering the same appeal is working with a fraction of that budget, if it has a litigation budget at all.

The consultation treats the two as equivalent participants in the same process. They are not.

This is not a new problem, and it has not gone unnoticed by consumer bodies themselves. But a consultation explicitly framed around making appeals "swifter and simpler" and improving redress is a natural place to address it, and this one does not.

What the public record shows

Having sat as a CMA panel member on nine energy licence modification appeals and five water redeterminations, I saw at first hand how differently the two sides of these cases are resourced, and the published record for both processes bears this out (and my time on the Consumer Panel at the Civil Aviation Authority has reinforced my view that the consumer voice is less well heard on regulatory matters than it could be).

At PR24, the disputing companies' statements of case were supported by named technical advisers commissioned specifically for the appeal, each producing separate reports running to dozens of pages. Ofwat has itself described the current water redetermination framework, in its submission to the Independent Water Commission, as onerous, costly and lengthy compared with the streamlined appeal model used in energy.[3]

The Consumer Council for Water's (CCW) own submissions on the same reference, by contrast, are policy responses running to a handful of pages, without equivalent commissioned technical annexes. CCW's entire annual budget, covering all its statutory functions across the water sector rather than any single case, was £7 million in 2024-25, [4]funded by a licence fee levied on water companies and passed through to customers.

The scale of the figures involved makes the imbalance concrete:

	Sought	Awarded	External costs	Recovered
PR19	£1.8bn	£400m	£29m	£8m
PR24	£2.7bn	£463m	£32m	£8m

Sources: PR19 figures;[5] PR24 figures.[6]

In both cases, only around a quarter of the disputing companies' external costs was recognised as recoverable through the price control.

On both references, CCW took part as a third party rather than as a party with a right of appeal in its own right.

The same pattern holds in energy: Ofgem's RIIO-2 licence modification appeals in 2021 record submissions from parties and interveners, with consumer representatives again in the intervener category rather than the appellant one, though the equivalent aggregate cost figure was redacted in the published determination.[7]

The deeper asymmetry: who gets to recover the cost

There is a second asymmetry that matters as much as the headline spending gap, and it goes to funding structure rather than conduct. The CMA's own procedural guide for water redeterminations sets out the mechanism. Once a determination is made, a disputing company files a statement of costs, broken down into legal fees and experts' costs. The CMA then decides how much of that is recoverable, largely based on how far its determination ends up supporting the company's case over Ofwat's. Costs assessed as recoverable are then worked into the price control and, ultimately, into customer bills.

It is a considered mechanism rather than an automatic entitlement: a company that raised new points late, or whose claims were largely rejected, may recover little or nothing. But the route exists, and it exists because a company that succeeds in overturning an unduly restrictive decision should not necessarily be left worse off for having done so.

Consumer organisations have no equivalent recovery route at all. There is nothing resembling the CMA's costs process[8] open to them for participating in a reference. Their day-to-day funding, where it exists, comes from fixed grants, statutory levies set well in advance or general operating budgets, none of which is designed to flex to meet the cost of a specific appeal. Even leaving the funding model to one side, there is no route to recovering appeal-specific costs afterwards, regardless of outcome. How companies fund their side of the process isn't the issue. The gap sits entirely on the other side, and it's one the current consultation does not address.

Mechanisms that already exist elsewhere

Costs protection and intervenor funding are not novel concepts. Judicial review has costs-capping rules for environmental claims, and personal injury litigation has one-way costs shifting, meaning a losing claimant is protected from paying the defendant's costs but the defendant is not protected in reverse; some overseas energy regulators, such as Ontario’s, run standing intervenor funding programmes, which pay consumer and public interest groups for taking part in specific cases.

Why courtroom analogies don’t scale

The court examples are not a direct match for a regulatory appeal. In a judicial review or a personal injury claim, there are two sides: the claimant bringing the challenge, and the defendant resisting it. Cost protection exists there because the claimant is usually the only party putting the other side's conduct under scrutiny at all.

Take away their ability to afford it, and the challenge doesn't happen. A regulatory appeal has three participants, not two. The regulator that made the original decision is itself a party defending it, fully resourced to do so. The consumer body adds a further, much smaller voice alongside the regulator's own case. Even allowing for that difference, all of these precedents still establish the same underlying point: it is already accepted practice to give the less-resourced side some form of costs protection wherever resourcing between the parties is unequal.

None of them, though, is really built for this scale of problem. The environmental costs caps run to a few thousand pounds either side; Ontario's entire annual intervenor budget, across every case it hears, is smaller than what a single water company spent contesting a single PR19 or PR24 reference. They show the principle is already accepted elsewhere. Leaning on their specific figures for comparison risks understating the scale of the problem rather than solving it.

The CAT itself already has some of the tools it would need. Its rules give it wide discretion over costs, rather than a fixed loser-pays position,[9] and its case management powers could, in principle, extend to funding directions or asymmetric costs protection for designated consumer bodies in regulatory appeals, if the underlying legislation gave it a clear basis to do so.

What a levelling mechanism could look like here

The more useful design principle is to size any consumer-side funding mechanism directly against the costs actually being incurred in the same reference, rather than importing a fixed sum from a different context altogether, such as a courtroom costs cap or an overseas energy regulator's annual budget. One option would be to set a consumer body's funding entitlement as a fixed proportion of the disputing companies' own external costs recognised as reasonable in that reference.

On the PR19 and PR24 figures, that would translate into a fund in the low millions of pounds per redetermination, and it would scale automatically with the complexity of the case rather than requiring a fresh political argument about the size of the pot each time. It could be funded through the same statutory mechanism that already funds CCW: a licence fee added to water bills, administered by the CAT or the relevant sector regulator, and released only where the CAT is satisfied the intervention will genuinely help it reach a decision, rather than simply repeating points the regulator has already made.

Even short of a funding mechanism, transparency would help. Requiring both sides to disclose their appeal costs, including whether and how those costs are recovered through the regulatory cost base, would at least make the asymmetry visible. Sunlight will not fix the underlying imbalance, but it would stop it being invisible, which is closer to where the current consultation leaves it.

A gap worth closing

The move to the CAT is, on its own terms, a sensible piece of process reform. But a harmonised right of appeal that assumes both sides can afford to exercise it properly is only half the job. If the DBT wants this reform to deliver genuine redress rather than a formally equal but practically lopsided contest, it needs to engage with the resourcing question directly. Whether the move to the CAT closes that gap, or simply repeats it in a new forum, is the real test of whether this reform delivers redress at all.

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David Thomas is a founding partner of DT Economics LLP, a former panel member at the CMA and advises on regulatory appeals and price control disputes across water, energy, aviation and telecoms.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of DT Economics LLP or its other employees and affiliates.

[1] Thomas, D., “Regulatory appeals are moving from the CMA to the CAT: what it means for regulated sectors”, DT Economics, July 2026 (https://www.dteconomics.com/post/regulatory-appeals-are-moving-from-the-cma-to-the-cat-what-it-means-for-regulated-sectors).

[2] Department for Business and Trade, “Swifter and Simpler Competition Redress, Regulatory Appeals and Competition Enforcement”, July 2026 (https://assets.publishing.service.gov.uk/media/6a58b35031fb6daf31413811/swifter-and-simpler-competition-redress-regulatory-appeals-and-competition-enforcement.pdf).

[3] Independent Water Commission, “Independent Water Commission Final Report”, July 2025, ¶ 412 (https://assets.publishing.service.gov.uk/media/687dfcc4312ee8a5f0806be6/Independent_Water_Commission_-_Final_Report_-_21_July.pdf).

[4] Consumer Council for Water, “Written evidence submitted by Consumer Council for Water (WSR0003)”, May 2025, Section ‘Ofwat’, p. 5 (https://committees.parliament.uk/writtenevidence/142149/pdf/).

[5] The £29m aggregate is calculated from the stated 25%/50% recovery proportions applied to the disclosed allowances, not a directly published total. Please see, Competition and Markets Authority, “Anglian Water Services Limited, Bristol Water plc, Northumbrian Water Limited and Yorkshire Water Services Limited Price Determinations. Summary of Final Determinations”, March 2021, ¶ 107 (https://assets.publishing.service.gov.uk/media/604fa141e90e077fe7a5f45a/-_CMA_water_redeterminations_-_summary_-_online_version_---_-.pdf).

[6] Competition and Markets Authority, “WATER PR24 REFERENCES. Final Determinations Volume 5: Risk and return, Other issues, Company-specific chapters – Chapters 8-14”, March 2026, Section ‘Disputing Company costs’, ¶ 9.31 (https://assets.publishing.service.gov.uk/media/69c512c4b66ff902f4544247/Final_decision_volume_5.pdf).

[7] The CMA's own costs (£1,969,691) are disclosed, but the companies' own external ('inter partes') costs are redacted in the published, non-confidential version of the order. Please see, Competition and Markets Authority, “IN THE MATTER OF APPEALS UNDER SECTION 23B GAS ACT 1986 AND SECTION 11C ELECTRICITY ACT 1989 BETWEEN CADENT GAS LIMITED (“Cadent”) NATIONAL GRID ELECTRICITY TRANSMISSION PLC (“NGET”) NATIONAL GRID GAS PLC (“NGG”) NORTHERN GAS NETWORKS LIMITED (“NGN”) SOUTHERN GAS NETWORK PLC AND SCOTLAND GAS NETWORKS PLC (“SGN”) SCOTTISH HYDRO ELECTRIC TRANSMISSION PLC (“SSEN-T”) SP TRANSMISSION PLC (“SPT”) WALES & WEST UTILITIES LIMITED (“WWU”). COSTS ORDER”, June 2023, pp. 3-4 (https://assets.publishing.service.gov.uk/media/64940a2cde86820013bc8bf2/FD_ORDER_-_FINAL_publication.pdf).

[8] Competition and Markets Authority, “Water References: Competition and Markets Authority Guide CMA205”, December 2024, Section 7 (https://assets.publishing.service.gov.uk/media/67581735f1e6b277c4f79aac/Water_references_guide_3.pdf).

[9] UK Government, “The Competition Appeal Tribunal Rules 2015”, September 2015, Rule 104 (https://www.legislation.gov.uk/uksi/2015/1648).