(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4A) In this Chapter, references to the supply system of a water undertaker are, in the case of an undertaker whose area is wholly or mainly in England, references to the system comprising the following—
(a) any reservoirs and other places of storage and any treatment works developed or maintained by the water undertaker for the purpose of complying with its duty under section 37, and
(b) any water mains and other pipes which it is the water undertaker's duty to develop and maintain by virtue of section 37.
(5) In this Chapter, references to the supply system of a water undertaker are , in the case of an undertaker whose area is wholly or mainly in Wales, to the system comprising the following—
(a) any water mains and other pipes which it is the water undertaker’s duty to develop and maintain by virtue of section 37 below and which are used for the purpose of conveying water from the undertaker’s treatment works to the premises of customers; and
(b) any water mains and other pipes which—
(i) are used by the undertaker for the purpose of conveying non-domestic water from any of its sources to the premises of customers; and
(ii) are not connected to any water mains or pipes falling within paragraph (a) above or to any water mains or other pipes connected to the treatment works mentioned in that paragraph (whether directly or indirectly),
and in sub-paragraph (i) above the reference to non-domestic water is to water supplied other than for domestic or food production purposes.
(6) In subsection (5)(a) above, the reference to treatment works is a reference to the works designated from time to time by the Secretary of State as treatment works for the purposes of this subsection.
(7) Before designating any works for the purposes of subsection (6) above, the Secretary of State shall consult the Assembly.
(8) A list of any works designated for the purposes of subsection (6) above shall be published from time to time by the Secretary of State in such manner as he considers appropriate for the purpose of bringing the designations to the attention of persons likely to be affected by them.
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) The Authority may grant to a person a licence in respect of the use of the sewerage system of a sewerage undertaker whose area is wholly or mainly in England (a “sewerage licence”).
(2) A sewerage licence may give the holder of the licence one or more of the following—
(a) a retail authorisation;
(b) a wholesale authorisation;
(c) a disposal authorisation.
(3) Schedule 2B makes provision as to the authorisations.
(4) In the case of each of the authorisations, an authorisation to do a thing is an authorisation to do it in accordance with Chapter 2A of Part 4.
(5) The Authority may exercise the power to grant a sewerage licence only in accordance with a general authorisation given by the Secretary of State.
(6) References in this Act to a sewerage licensee are references to a person that is the holder for the time being of a sewerage licence.
(7) References in this Chapter to the sewerage system of a sewerage undertaker are references to the system comprising—
(a) the system of public sewers, the facilities for emptying public sewers and the sewage disposal works and other facilities for dealing effectually with the contents of public sewers that the undertaker is required to provide by section 94, and
(b) the lateral drains that the undertaker is required to maintain by section 94.
(1) The Authority must consult the Secretary of State, the Environment Agency and the NRBW before granting a licence that gives—
(a) a wholesale authorisation, or
(b) a disposal authorisation.
(2) A sewerage licence granted to a sewerage undertaker may not give the holder—
(a) a retail authorisation, or
(b) a wholesale authorisation.
(3) A sewerage licence may not be granted to a person unless that person is a limited company.
(4) The restriction in subsection (3) does not apply if the sewerage licence gives only a retail authorisation.
(1) For the purposes of paragraphs 4 and 7(a) of Schedule 2A and paragraph 2 of Schedule 2B, “household premises” means premises in which, or in any part of which, a person has his home.
(2) The fact that a person has his home in, or in part of, any premises does not mean that the premises are household premises unless the principal use of the premises is as a home.
(3) The Secretary of State may by regulations make provision as to—
(a) the circumstances in which a person is or is not to be treated as having his home in, or in part of, any premises for the purposes of this section; and
(b) the factors which are, or are not, to be taken into account in determining the principal use of any premises for those purposes.
(4) The power to make regulations under subsection (3) above is exercisable by the Assembly (and not by the Secretary of State) in relation to premises supplied with water using the supply system of a water undertaker whose area is wholly or mainly in Wales.
(1) This section applies for the purpose of construing the reference to the threshold requirement in paragraph 7(b) of Schedule 2A in relation to the supply of water to any premises in accordance with a restricted retail authorisation.
(2) The requirement is that, at the time when the water supply licensee first enters into an undertaking with a customer to give the supply, the total quantity of water estimated to be supplied to the premises annually pursuant to the undertaking is not less than—
(a) 5 megalitres, in the case of premises supplied with water using the supply system of a water undertaker whose area is wholly or mainly in England, and
(b) 50 megalitres, in the case of premises supplied with water using the supply system of a water undertaker whose area is wholly or mainly in Wales.
(3) Any estimate of the quantity of water to be supplied to any premises for the purposes of subsection (2) above shall be made in accordance with guidance issued from time to time by the Authority with the approval of the Welsh Ministers.
(4) Any guidance issued under subsection (3) above may, in particular—
(a) specify—
(i) the factors to be, and not to be, taken into account;
(ii) the assumptions to be made; and
(iii) the method of calculation to be employed,
in making estimates; and
(b) make provision as to the commencement of the annual periods by reference to which estimates are to be made.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) The Welsh Ministers may make provision by regulations as to the circumstances in which a water supply licensee is not, for the purposes of subsection (2) above, to be treated as entering into an undertaking with a new customer to give a supply of water to any premises ....
(8) The Welsh Ministers may by regulations amend subsection (2) above by substituting, for the quantity of water for the time being specified there, a different quantity of water ....
(9) Regulations under subsection (8) above—
(a) shall include provision for the amendment made by the regulations not to apply in relation to any undertaking entered into before the date on which the regulations come into force; and
(b) may include provision for that amendment not to apply in relation to any undertaking which is proposed, but not entered into, before that date.
(10) A statutory instrument containing regulations under subsection (8) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the Assembly.
(11) Before making regulations under subsection (8) above, the Welsh Ministers shall consult—
(a) the Authority; and
(b) such other persons (if any) as the Welsh Ministers think it appropriate to consult.
(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Authority must publish guidance issued from time to time under—
(a) section 17D(3),
(b) paragraph 10 of Schedule 2A, or
(c) paragraph 4 of Schedule 2B,
in such manner as the Authority considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.
(1) The Authority may determine, in a case referred to it by—
(a) a water supply licensee or a potential customer of a water supply licensee, or
(b) a sewerage licensee or a potential customer of a sewerage licensee,
whether a proposed supply of water to, or proposed sewerage services for, the customer would be in accordance with what is authorised by the licensee's licence.
(2) The matters which the Authority may determine include the following matters—
(a) the extent of the premises to be supplied for the purposes of paragraph 4 or 7(a) or (b) of Schedule 2A;
(aa) the extent of the premises to be served for the purposes of paragraph 2 of Schedule 2B;
(b) whether the premises to be supplied or served are household premises (as defined in section 17C above); and
(c) whether the threshold requirement is satisfied in relation to the premises to be supplied (construed in accordance with section 17D above),
and also include any other matter the determination of which is relevant to those matters.
17F Procedure for granting water supply and sewerage licences
(1) The Authority must determine for each type of relevant application that may be made—
(a) the form and manner in which an application is to be made;
(b) the information it is to contain;
(c) the documents that are to accompany it;
(d) the fee that is to accompany it.
(1A) The fees may be different in different circumstances.
(1B) The Authority may make a new determination as to a matter referred to in subsection (1).
(1C) The Authority must publish a notice of what it has determined under subsection (1) or (1B) in such manner as it thinks appropriate for bringing the determination to the attention of those affected by the determination.
(1D) For the purposes of subsection (1) a relevant application is an application for—
(a) the grant of a water supply or sewerage licence giving a particular authorisation or combination of authorisations;
(b) the variation of a water supply or sewerage licence so that it gives—
(i) a particular authorisation only, or
(ii) a particular combination of authorisations.
(1E) A person making a relevant application must comply with such provisions of a notice published under subsection (1C) as relate to the application.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If ... the Authority proposes to refuse a relevant application, ... it shall give to the applicant a notice—
(a) stating that ... it proposes to refuse the application;
(b) stating the reasons why ... it proposes to refuse the application; and
(c) specifying the time within which representations or objections with respect to the proposed refusal may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) A licence shall be in writing and, unless revoked or suspended in accordance with any condition contained in it, shall continue in force for such period as may be specified in or determined by or under the licence.
(7) As soon as practicable after granting a licence or variation of a licence, ... the Authority shall serve a copy of the licence or licence as varied—
(a) on the licence holder;
(b) on the Assembly;
(c) on the Chief Inspector of Drinking Water;
(d) on the Environment Agency;
(da) on the NRBW;
(e) on the Council;
(f) on each relevant undertaker;
(g) on each water supply licensee and sewerage licensee (other than the holder of the licence in question);
(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(i) ... on the Secretary of State.
(8) Any sums received ... by the Authority by virtue of this section shall be paid into the Consolidated Fund.
17FA Applications forwarded by the Water Industry Commission for Scotland
(1) The Secretary of State may by regulations make provision about—
(a) treating a 2005 Act application for the grant of a water services licence under section 6 of the 2005 Act as being also an application under section 17F for the grant of a water supply licence giving only a retail authorisation or a restricted retail authorisation or both;
(b) treating a 2005 Act application for the grant of a sewerage services licence under section 6 of the 2005 Act as being also an application under section 17F for the grant of a sewerage licence giving only a retail authorisation.
(2) The regulations may in particular make provision about—
(a) the circumstances in which, and the conditions subject to which, a 2005 Act application is to be treated as an application under section 17F for a water supply or sewerage licence giving a particular authorisation or particular authorisations;
(b) the time at which an application is to be treated as having been made;
(c) the processing of an application by the Authority.
(3) Provision under subsection (2)(a) may require a 2005 Act application that is forwarded to the Authority—
(a) to contain, or to be accompanied by, such information or information of such description as is specified by the regulations;
(b) to be accompanied by such documents or documents of such descriptions as are specified by the regulations;
(c) to be accompanied by a fee, or a fee of a description, specified by the regulations.
(4) In this section and section 17FB—
“the 2005 Act” means the Water Services etc. (Scotland) Act 2005;
“2005 Act application” means an application under paragraph 1 of Schedule 2 to the 2005 Act.
17FB Applications forwarded to the Water Industry Commission for Scotland
(1) If the conditions in subsection (2) are satisfied, the Authority must—
(a) forward to the Commission a copy of an application under section 17F for the grant of a water supply licence or sewerage licence, and
(b) send to the Commission such information and such fee as appear to the Authority to be required in order that the application may be treated by the Commission as a 2005 Act application for the grant of—
(i) a water services licence under section 6 of the 2005 Act, or
(ii) a sewerage services licence under section 6 of the 2005 Act, as the case may be.
(2) The conditions are that—
(a) the Authority is requested to do so by the applicant;
(b) the application under section 17F appears to the Authority to be an application that would be treated by the Commission as a 2005 Act application for the grant of—
(i) a water services licence under section 6 of the 2005 Act, or
(ii) a sewerage services licence under section 6 of the 2005 Act, as the case may be;
(c) the applicant has given the Authority—
(i) such information as is mentioned in subsection (1)(b), and
(ii) a means of sending to the Commission such fee as is mentioned in subsection (1)(b).
(3) The Authority must—
(a) forward a copy of the application, and
(b) send such information and fee as are mentioned in subsection (1)(b),
before the end of the agreed period for an application of that description.
(4) In this section—
“the agreed period”, in relation to an application under section 17F of a particular description, means the period agreed between the Authority and the Commission as the period applying to an application of that description for the purposes of subsection (3);
“the Commission” means the Water Industry Commission for Scotland.
(1) A licence under this Chapter may include—
(a) such conditions as appear to ... the Authority to be requisite or expedient having regard to the duties imposed on ... it by Part 1 of this Act;
(b) conditions requiring the rendering to the Authority of a payment on the grant of a licence under this Chapter, or payments while such a licence is in force, or both, of such amount or amounts as may be determined by or under the conditions.
(2) Conditions may be included by virtue of subsection (1)(a) above in a water supply licence whether or not they are connected with the supply of water or the introduction of water into a water undertaker’s supply system.
(2A) Conditions may be included by virtue of subsection (1)(a) in a sewerage licence whether or not they are connected with—
(a) effectual dealing with the contents of sewers, or
(b) the use of the sewerage system of a sewerage undertaker.
(3) Conditions included in a licence under this Chapter may—
(a) require the holder of the licence to comply with any direction given by a specified relevant person as to specified matters or matters which are of a specified description;
(b) require the holder of the licence to do or not to do specified things or things which are of a specified description, except in so far as a specified relevant person consents to the holder’s not doing or doing them; and
(c) provide for the reference to and determination by a specified relevant person of specified questions, or questions which are of a specified description, which arise under or in connection with the licence.
(4) For the purposes of subsection (3) above—
(a) the following are relevant persons—
(i) the Secretary of State;
(ii) the Authority;
(iii) so far as subsection (3) applies to water supply licences, the Assembly;
(iv) the Environment Agency; ...
(v) the NRBW; and
(b) “specified” means specified in the licence in question.
(5) Conditions included in a licence under this Chapter may contain provision for the conditions to have effect, cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined in accordance with the conditions.
(6) Any such condition as is referred to in subsection (5) above shall have effect in addition to the provision made by this Chapter with respect to the modification of the conditions of a licence.
(7) Any sums received by the Authority by virtue of this section shall be paid into the Consolidated Fund.
(1) The Secretary of State may determine the conditions that are to be the standard conditions of water supply licences granted by the Authority.
(1A) Before determining the standard conditions, the Secretary of State must consult the Welsh Ministers as regards conditions relating to a restricted retail authorisation or a supplementary authorisation.
(1B) The Secretary of State is to publish the standard conditions in such manner as the Secretary of State considers appropriate.
(2) The standard conditions may be different depending on the different authorisations or combinations of authorisations to which the conditions are to relate.
(3) The power to determine standard conditions in relation to water supply licences giving a particular authorisation or a particular combination of authorisations may be exercised only before the grant of the first licence to give that authorisation or that particular combination of authorisations (but this is without prejudice to the power to modify standard conditions in accordance with the provisions of this Chapter).
(4) The standard conditions for the purposes of water supply licences giving any particular authorisation or combination of authorisations may contain provision—
(a) for any standard condition included in a licence of that description not to have effect until brought into operation in such manner and in such circumstances as may be specified in or determined under the standard conditions;
(b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; and
(c) for any standard condition included in such a licence which is for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.
(5) Subject to subsection (6) below, each condition which is a standard condition shall be incorporated by reference in each water supply licence (or in each such licence to which the standard condition applies).
(6) Subject to the following provisions of this section, ... the Authority may, in granting a licence, exclude or modify any of the standard conditions to such extent as ... it considers requisite to meet the circumstances of a particular case.
(7) Before excluding any standard conditions or making any modifications under subsection (6) above, ... the Authority shall give notice—
(a) stating that ... it proposes to exclude the conditions or make the modifications and setting out the effect of so doing;
(b) stating the reasons why ... it proposes to exclude the conditions or make the modifications; and
(c) specifying the time (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed exclusions or modifications may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(8) A notice under subsection (7) above shall be given—
(a) by publishing the notice in such manner as ... the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the exclusions or modifications; and
(b) by serving a copy of the notice—
(i) if the notice relates to a water supply licence giving a restricted retail authorisation or a restricted retail authorisation and a supplementary authorisation, on the Welsh Ministers;
(ii) on the Chief Inspector of Drinking Water;
(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iv) ... on the Secretary of State.
(v) on the Water Industry Commission for Scotland.
(9) If, within the time specified in the notice under subsection (7) above, the Secretary of State (after consulting the Welsh Ministers in a case where notice was served on them under subsection (8)(b)(i)) directs the Authority not to exclude or modify any standard condition, the Authority shall comply with the direction.
(10) The ... Authority shall not exclude any conditions, or make any modifications, under subsection (6) above unless ... it is of the opinion that the exclusions or modifications are such that—
(a) the licence holder would not be unduly disadvantaged in competing with other holders of water supply licences; and
(b) no other holder of a water supply licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence).
(11) The modification under subsection (6) above of part of a standard condition shall not prevent any other part of the condition from continuing to be treated as a standard condition for the purposes of this Chapter.
(1) The Secretary of State may determine the conditions that are to be the standard conditions of sewerage licences granted by the Authority.
(2) The Secretary of State is to publish the standard conditions in such manner as the Secretary of State considers appropriate.
(3) The standard conditions may be different depending on the different authorisations or combinations of authorisations to which the conditions are to relate.
(4) The power to determine standard conditions in relation to sewerage licences giving a particular authorisation or a particular combination of authorisations may be exercised only before the grant of the first licence to give that authorisation or that particular combination of authorisations (but this is without prejudice to the power to modify standard conditions in accordance with the provisions of this Chapter).
(5) The standard conditions for the purposes of sewerage licences giving any particular authorisation or combination of authorisations may contain provision—
(a) for any standard condition included in a licence of that description not to have effect until brought into operation in such manner and in such circumstances as may be specified in or determined under the standard conditions;
(b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; and
(c) for any standard condition included in such a licence which is for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.
(6) Subject to subsection (7), each condition which is a standard condition is to be incorporated by reference in each sewerage licence (or in each such licence to which the standard condition applies).
(7) Subject to the following provisions of this section, the Authority may, in granting a licence, exclude or modify any of the standard conditions to such extent as the Authority considers requisite to meet the circumstances of a particular case.
(8) Before excluding any standard conditions or making any modifications under subsection (7), the Authority must give notice—
(a) stating that the Authority proposes to exclude the conditions or make the modifications and setting out the effect of so doing;
(b) stating the reasons why the Authority proposes to exclude the conditions or make the modifications; and
(c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed exclusions or modifications may be made,
and the Authority must consider any representations or objections which are duly made and not withdrawn.
(9) A notice under subsection (8) must be given—
(a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the exclusions or modifications; and
(b) by serving a copy of the notice—
(i) on the Secretary of State;
(ii) on the Environment Agency;
(iii) on the NRBW;
(iv) on the Water Industry Commission for Scotland.
(10) If, within the time specified in the notice under subsection (8), the Secretary of State directs the Authority not to exclude or modify any standard condition, the Authority must comply with the direction.
(11) The Authority may not exclude any conditions, or make any modifications, under subsection (7) unless the Authority is of the opinion that the exclusions or modifications are such that—
(a) the licence holder would not be unduly disadvantaged in competing with other holders of sewerage licences; and
(b) no other holder of a sewerage licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being granted).
(12) The modification under subsection (7) of part of a standard condition is not to prevent any other part of the condition from continuing to be treated as a standard condition for the purposes of this Chapter.
(1) Subject to the following provisions of this section, the Authority may modify the conditions of—
(a) a particular water supply licence, or
(b) a particular sewerage licence.
(2) The Authority may not make any modifications under this section unless the licence holder has consented to the modifications and, in the case of standard conditions of the licence, the Authority is of the opinion that the modifications—
(a) are requisite to meet the circumstances of the particular case; and
(b) are such that—
(i) the licence holder would not be unduly disadvantaged in competing with other holders of water supply licences or, as the case may be, sewerage licences; and
(ii) no other holder of a water supply licence or, as the case may be, a sewerage licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified).
(3) Before making modifications under this section, the Authority shall give notice—
(a) stating that it proposes to make the modifications and setting out their effect;
(b) stating the reasons why it proposes to make the modifications; and
(c) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(4) A notice under subsection (3) above shall be given—
(a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and
(b) by serving a copy of the notice on—
(i) the licence holder;
(ii) the Council;
(iii) the Secretary of State;
(iv) if the notice relates to a water supply licence, the Assembly; and
(v) the Chief Inspector of Drinking Water.
(5) If, within the period specified in the notice under subsection (3) above, the Secretary of State ... directs the Authority not to make any modification, the Authority shall comply with the direction.
(5A) The Secretary of State is to consult the Welsh Ministers before giving a direction under subsection (5) in relation to a water supply licence.
(6) The modification under this section of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.
(1) Subject to the following provisions of this section, the Authority may modify—
(a) the standard conditions of water supply licences, or
(b) the standard conditions of sewerage licences.
(1A) Modifications may relate to—
(a) standard conditions contained in all water supply licences or sewerage licences, or
(b) standard conditions contained in those water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations.
(2) Where at any time the Authority modifies the standard conditions of water supply licences or sewerage licences under this section the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of any licence so affected.
(3) Before making any modifications under this section, the Authority shall give notice—
(a) stating that it proposes to make the modifications and setting out their effect;
(b) stating the reasons why it proposes to make the modifications; and
(c) specifying the time (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(4) A notice under subsection (3) above shall be given—
(a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and
(b) by serving a copy of the notice on—
(i) each relevant licence holder;
(ii) the Council;
(iii) the Secretary of State;
(iv) if the notice relates to a water supply licence, the Assembly; and
(v) the Chief Inspector of Drinking Water.
(5) If, within the time specified in the notice under subsection (3) above, the Secretary of State ... directs the Authority not to make any modification, the Authority shall comply with the direction.
(5A) The Secretary of State is to consult the Welsh Ministers before giving a direction under subsection (5) in relation to a water supply licence.
(6) The Authority may not under this section make any modifications of the standard conditions of water supply licences or sewerage licences unless—
(a) no notice of objection to those modifications is given by any relevant licence holder to the Authority within the time specified in the notice under subsection (3) above;
(b) if one or more relevant licence holders give notice of objection to the Authority within that time—
(i) the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection is less than such percentage as may be specified in an order made by statutory instrument by the Secretary of State; and
(ii) the percentage given by subsection (7) below is less than such percentage as may be so specified; or
(c) subsection (8) below applies to the case.
(7) The percentage given by this subsection is the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection, weighted according to their market share at such time and in such manner as may be specified in an order under subsection (6) above.
(8) This subsection applies where the Authority is satisfied that—
(a) the effect of the standard conditions is such as to impose a burden affecting relevant licence holders in the carrying on of activities to which the modifications relate;
(b) the modifications would remove or reduce the burden without removing any necessary protection; and
(c) the modifications are such that no holder of a water supply licence or, as the case may be, a sewerage licence would be unduly disadvantaged in competing with other holders of such licences.
(9) An order under subsection (6) above may include such supplemental, consequential and transitional provision as the Secretary of State considers appropriate.
(10) Before making an order under subsection (6) above in relation to the standard conditions of water supply licences, the Secretary of State shall consult the Assembly.
(11) A statutory instrument containing an order under subsection (6) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(12) Where the Authority modifies the standard conditions of water supply licences or sewerage licences, the Authority shall—
(a) also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in water supply licences or, as the case may be, sewerage licences granted after that time; and
(b) publish the modifications in such manner as it considers appropriate.
Where the Authority modifies the standard conditions of water supply licences or sewerage licences that grant particular authorisations or combinations of authorisations, paragraph (a) has effect only as regards licences granting the same authorisations or combinations of authorisations.
(13) In this section “relevant licence holder”, in relation to proposed modifications of standard conditions of water supply licences or sewerage licences or of such of those licences as grant a particular authorisation or combination of authorisations, means the holder of a licence of that description—
(a) which is to be modified under the proposals by the inclusion of any new standard condition; or
(b) which includes any standard conditions to which the proposals relate, other than standard conditions which are not in effect (by virtue of anything done under section 17H(4) above) at the time specified in the notice under subsection (3) above.
17K Modification references to competition authority
(1) The Authority may make to the CMA a reference which is so framed as to require the CMA to investigate and report on the questions—
(a) whether any matters which—
(i) relate to the carrying on of activities authorised or regulated by a particular water supply or sewerage licence; and
(ii) are specified in the reference,
operate, or may be expected to operate, against the public interest; and
(b) if so, whether the effects adverse to the public interest which those matters have, or may be expected to have, could be remedied or prevented by modifications of the conditions of the licence.
(2) The Authority may make to the Commission a reference which is so framed as to require the CMA to investigate and report on the questions—
(a) whether any matters which—
(i) relate to the carrying on of activities authorised or regulated by water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations; and
(ii) are specified in the reference,
operate, or may be expected to operate, against the public interest; and
(b) if so, whether the effects adverse to the public interest which those matters have, or may be expected to have, could be remedied or prevented by modifications of the standard conditions of licences of that description.
(3) The Authority may, at any time, by notice given to the CMA vary a reference under this section by—
(a) adding to the matters specified in the reference; or
(b) excluding from the reference some of the matters so specified,
and on receipt of any such notice the CMA shall give effect to the variation.
(4) The Authority may specify in a reference under this section, or a variation of such a reference, for the purpose of assisting the CMA in carrying out the investigation on the reference—
(a) any effects adverse to the public interest which, in its opinion, the matters specified in the reference or variation have or may be expected to have; and
(b) any modifications of the relevant conditions by which, in its opinion, those effects could be remedied or prevented.
(5) As soon as practicable after making a reference under this section or a variation of such a reference, the Authority shall—
(a) publish particulars of the reference or variation in such manner as it considers appropriate for the purpose of bringing the reference or variation to the attention of persons likely to be affected by it; and
(b) serve a copy of the reference or variation on—
(i) the licence holder or, as the case may be, the relevant licence holders;
(ii) the Council;
(iii) the Secretary of State;
(iv) in a case relating to a water supply licence or licences, the Assembly; and
(v) the Chief Inspector of Drinking Water.
(6) If, before the end of the period of twenty-eight days beginning with the day on which the Secretary of State receives the copy of the reference or variation, the Secretary of State directs the CMA—
(a) not to proceed with the reference; or
(b) not to give effect to the variation,
the CMA shall comply with the direction.
(7) It shall be the duty of the Authority, for the purpose of assisting the CMA in carrying out an investigation on a reference under this section or in carrying out functions under section 17P below, to give to the CMA—
(a) any information in the Authority’s possession which relates to matters falling within the scope of the investigation or the carrying out of those functions and which is either—
(i) requested by the CMA for that purpose; or
(ii) information which, in the Authority’s opinion, it would be appropriate for that purpose to give to the CMA without any such request; and
(b) any other assistance which the CMA may require, and which it is within the Authority’s power to give, in relation to any such matters,
and the CMA, for the purpose of carrying out any such investigation or such functions, shall take account of any information given to it for that purpose under this subsection.
(8) In this section and the following provisions of this Chapter—
“relevant conditions”—
in relation to a reference under subsection (1) above, means the conditions of the licence to which the reference relates; and
in relation to a reference under subsection (2) above, means the standard conditions of the licences to which the reference relates; and
“relevant licence holder” means the holder of a licence to which a reference under subsection (2) above relates.
(9) In determining for the purposes of this section whether any particular matter operates, or may be expected to operate, against the public interest, the CMA shall have regard to the matters as respects which duties are imposed on the Secretary of State and the Authority by Part 1 of this Act.
(10) The functions of the CMA with respect to a reference under this section are to be carried out on behalf of the CMA by a group constituted for the purpose by the chair of the CMA under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (including functions relating to the making of modifications following a report on a reference, and functions under sections 109 to 115 of the Enterprise Act 2002, as applied by sections 17M and 17Q).
(1) Every reference under section 17K above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
(2) A report of the CMA on a reference under section 17K above shall not have effect (and no action shall be taken in relation to it under section 17O below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Authority under subsection (3) below.
(3) The Authority may, if it has received representations on the subject from the CMA and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
(5) The Authority shall, in the case of an extension made by it under subsection (3) above—
(a) publish that extension in such manner as the Authority considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
(b) send a copy of what has been published by it under paragraph (a) above to the holder of the licence or, as the case may be, the relevant licence holders.
17M References under section 17K: powers of investigation
(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, as they had effect immediately before the relevant date and with the modifications mentioned in subsections (1A), (2) and (3) below, for the purposes of references under section 17K above as they applied immediately before that date for the purposes of references under that Part—
(a) section 109 (attendance of witnesses and production of documents etc);
(b) section 110 (enforcement of powers under section 109: general);
(c) section 111 (penalties);
(d) section 112 (penalties: main procedural requirements);
(e) section 113 (payments and interest by instalments);
(f) section 114 (appeals in relation to penalties);
(g) section 115 (recovery of penalties); and
(h) section 116 (statement of policy).
(1A) Section 109 shall, in its application by virtue of subsection (1) above, have effect as if—
(a) for subsection (A1), there were substituted—
(A1) For the purposes of this section, a permitted purpose is assisting the CMA in carrying out any functions exercisable by it in connection with a reference under section 17K of the Water Industry Act 1991.
, and
(b) subsection (8A) were omitted.
(2) Section 110 shall, in its application by virtue of subsection (1) above, have effect as if—
(a) subsection (2) were omitted; ...
(aa) after subsection (3), there were inserted—
(3A) No penalty shall be imposed by virtue of subsection (1) or (3) if more than 4 weeks have passed since the publication of the report of the CMA on the reference concerned; but this subsection shall not apply in relation to any variation or substitution of the penalty which is permitted by virtue of this Part.
; and
(b) in subsection (9) the words from “or section” to “section 65(3))” were omitted.
(3) Section 111(5)(b) shall, in its application by virtue of subsection (1) above, have effect as if for sub-paragraph (ii) there were substituted—
(ii) if earlier, the day on which the report of the CMA on the reference concerned is made or, if no such report is made within the period permitted for that purpose, the latest day on which the report may be made within the permitted period.
.
(4) Provisions of Part 3 of the Enterprise Act 2002 which , immediately before the relevant date, had effect for the purposes of sections 109 to 116 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) above, have effect in relation to those sections as applied by virtue of that subsection as those provisions had effect immediately before that date.
(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.
(6) In this section “the relevant date” means the date on which section 143 of the Digital Markets, Competition and Consumers Act 2024 came into force.
(1) In making a report on a reference under section 17K above, the CMA —
(a) shall include in the report definite conclusions on the questions comprised in the reference together with such an account of its reasons for those conclusions as in its opinion is expedient for facilitating a proper understanding of those questions and of its conclusions;
(b) where it concludes that any of the matters specified in the reference operate, or may be expected to operate, against the public interest, shall specify in the report the effects adverse to the public interest which those matters have or may be expected to have; and
(c) where it concludes that any adverse effects so specified could be remedied or prevented by modifications of the relevant conditions, shall specify in the report modifications by which those effects could be remedied or prevented.
(2) For the purposes of section 17O below, a conclusion contained in a report of the CMA is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted by the chair of the CMA for the purpose of carrying out the functions of the CMA with respect to the reference.
(3) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 17K above as the conclusions of the CMA, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.
(4) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the CMA on a reference under section 17K above.
(5) In making any report on a reference under section 17K above the CMA must have regard to the following considerations before disclosing any information.
(6) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the CMA thinks is contrary to the public interest.
(7) The second consideration is the need to exclude from disclosure (so far as practicable)—
(a) commercial information whose disclosure the CMA thinks might significantly harm the legitimate business interests of the undertaking to which it relates; or
(b) information relating to the private affairs of an individual whose disclosure the CMA thinks might significantly harm the individual’s interests.
(8) The third consideration is the extent to which the disclosure of the information mentioned in subsection (7)(a) or (b) above is necessary for the purposes of the report.
(9) A report of the CMA on a reference under section 17K above shall be made to the Authority.
(10) Subject to subsection (13) below, the Authority shall—
(a) on receiving a report on a reference under section 17K(1) above, serve a copy of it on—
(i) the licence holder;
(ii) the Council;
(iii) the Secretary of State; and
(iv) if the report relates to a water supply licence, the Assembly; and
(b) not earlier than the relevant time, publish another copy of the report in such manner as it considers appropriate for bringing the report to the attention of persons likely to be affected by it.
(11) Subject to subsection (13) below, the Authority shall—
(a) on receiving a report on a reference under section 17K(2) above, serve a copy of it on—
(i) the Secretary of State; and
(ii) if the report relates to water supply licences, the Assembly; and
(b) not earlier than the relevant time—
(i) serve another copy on each relevant licence holder; and
(ii) not less than twenty-four hours after complying with sub-paragraph (i) above, publish another copy of the report in such manner as it considers appropriate for bringing the report to the attention of persons likely to be affected by it.
(12) For the purposes of subsections (10) and (11) above, the “relevant time” means—
(a) fourteen days after the copy of the report in question is received by the Secretary of State and , if the report relates to water supply licences, the Assembly, or
(b) if copies are received by them on different days, fourteen days after the later day.
(13) Subsection (14) below applies if it appears to the Secretary of State that the publication of any matter in a report on a reference under section 17K(1) or (2) above would be against—
(a) the public interest; or
(b) the commercial interests of any person.
(14) The Secretary of State may, not later than the relevant time for the purposes of subsection (10) or (11) above, direct the Authority to exclude that matter from the copy of the report, or (as the case may be) each copy of the report, to be served and published as mentioned in paragraph (b) of that subsection; and the Authority shall comply with any such direction.
(1) Where a report of the CMA on a reference under section 17K above—
(a) includes conclusions to the effect that any of the matters specified in the reference operate, or may be expected to operate, against the public interest;
(b) specifies effects adverse to the public interest which those matters have or may be expected to have;
(c) includes conclusions to the effect that those effects could be remedied or prevented by modifications of the relevant conditions; and
(d) specifies modifications by which those effects could be remedied or prevented,
the Authority shall, subject to the following provisions of this section, make such modifications of the relevant conditions as appear to it requisite for the purpose of remedying or preventing the adverse effects specified in the report.
(2) Where at any time it modifies under subsection (1) above—
(a) the standard conditions of water supply licences or sewerage licences, or
(b) the standard conditions of water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations,
in consequence of a reference under section 17K(2) above, the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of licences of that description.
(3) Before making modifications under this section, the Authority shall have regard to the modifications specified in the report.
(4) Before making modifications under this section, the Authority shall give notice—
(a) stating that it proposes to make the modifications and setting out their effect;
(b) stating the reasons why it proposes to make the modifications; and
(c) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(5) A notice under subsection (4) above shall be given—
(a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by the making of the modifications;
(b) by serving a copy of the notice on the holder of the licence in question or, as the case may be, the relevant licence holders; and
(c) by serving a copy of the notice on—
(i) the Council;
(ii) the Secretary of State;
(iii) in a case relating to a water supply licence or licences, the Assembly; and
(iv) the Chief Inspector of Drinking Water.
(6) After considering any representations or objections made in response to proposals set out in a notice under subsection (4) above, the Authority shall give notice to the CMA—
(a) setting out the modifications it proposes to make to remedy or prevent the adverse effects specified in the report; and
(b) stating the reasons for making the modifications.
(7) The Authority shall include with the notice under subsection (6) above a copy of any representations or objections received in relation to the notice under subsection (4) above.
(8) If the period of four weeks from the date on which the notice under subsection (6) above is given elapses without a direction under section 17P(1)(a) below having been given to it, the Authority shall—
(a) make the modifications set out in the notice; or
(b) if a direction under section 17P(1)(b) below has been given, make the modifications which are not specified in the direction.
(9) The modification under subsection (1) above of part of a standard condition of a particular licence in consequence of a reference under section 17K(1) above shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.
(10) Where at any time it modifies under subsection (1) above the standard conditions of water supply licences or sewerage licences in consequence of a reference under section 17K(2) above, the Authority shall—
(a) also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in water supply licences or, as the case may be, sewerage licences granted after that time; and
(b) publish the modifications made for those purposes in such manner as it considers appropriate.
Where the Authority modifies the standard conditions of water supply licences or sewerage licences that grant particular authorisations or combinations of authorisations, paragraph (a) has effect only as regards licences granting the same authorisations or combinations of authorisations.
(1) The CMA may, within the period of four weeks after the date on which it is given a notice under section 17O(6) above, direct the Authority—
(a) not to make the modifications set out in that notice; or
(b) not to make such of the modifications as may be specified in the direction;
and the Authority shall comply with any such direction.
(2) The Secretary of State may—
(a) within the period of four weeks after the date on which the CMA is given a notice under section 17O(6) above; and
(b) on the application of the CMA ,
direct that the period for giving a direction under subsection (1) above (and, accordingly, the period mentioned in section 17O(8) above) shall be extended by fourteen days.
(3) The power to give a direction under subsection (1) above may only be exercised in respect of such of the modifications set out in the notice under section 17O(6)(a) above as appear to the CMA not to be the modifications which are requisite for the purpose of remedying or preventing all or any of the adverse effects specified in the report as effects which could be remedied or prevented by modifications.
(4) If the CMA gives a direction under subsection (1) above, it shall—
(a) give notice setting out the modifications proposed by the Authority, the terms of the direction and the reasons for giving it; and
(b) make such modifications itself of the relevant conditions as appear to it to be requisite for the purpose of remedying or preventing—
(i) if the direction was given under subsection (1)(a) above, the adverse effects specified in the report as effects which could be remedied or prevented by modifications;
(ii) if the direction was given under subsection (1)(b) above, such of those adverse effects as are not remedied or prevented by the modifications made by the Authority under section 17O(8)(b) above.
(5) In exercising its power under subsection (4)(b) above the CMA shall have regard to the matters as respects which duties are imposed on the Authority by Part 1 of this Act.
(6) Before making modifications under subsection (4)(b) above the CMA shall give notice—
(a) stating that it proposes to make the modifications and setting them out;
(b) stating the reason why it proposes to make them;
(c) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(7) A notice under subsection (4)(a) or (6) above shall be given—
(a) by publishing the notice in such manner as the CMA considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by the making of the modifications;
(b) by serving a copy of the notice on—
(i) the Authority;
(ii) the holder of the licence in question or, as the case may be, the relevant licence holders;
(iii) the Council;
(iv) the Secretary of State;
(v) if the reference relates to water supply licences, the Assembly; and
(vi) the Chief Inspector of Drinking Water.
(8) After making modifications under this section the CMA shall publish a notice stating that the modifications have been made and setting them out, with the reasons for making them.
(9) The modification under this section of part of a standard condition of a particular licence in consequence of a reference under section 17K(1) above shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.
(10) Where, in consequence of a reference under section 17K(2) above, the CMA modifies under subsection (4)(b) above—
(a) the standard conditions of water supply licences or sewerage licences, or
(b) the standard conditions of water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations,
the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of licences of that description.
(11) Where, in consequence of a reference under section 17K(2) above, the CMA modifies under subsection (4)(b) above the standard conditions of water supply licences or sewerage licences, the Authority shall—
(a) make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in water supply licences or, as the case may be, sewerage licences granted after that time, and
(b) publish the modifications made for those purposes in such manner as it considers appropriate.
Where the Authority modifies the standard conditions of water supply licences or sewerage licences that grant particular authorisations or combinations of authorisations, paragraph (a) has effect only as regards licences granting the same authorisations or combinations of authorisations.
(1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under subsection (4)(a), (6) or (8) of section 17P above.
(2) In giving any notice under subsection (4)(a) or (6) of section 17P above, or publishing any notice under subsection (8) of that section, the CMA must have regard to the following considerations before disclosing any information.
(3) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the CMA thinks is contrary to the public interest.
(4) The second consideration is the need to exclude from disclosure (so far as practicable)—
(a) commercial information whose disclosure the CMA thinks might significantly harm the legitimate business interests of the undertaking to which it relates; or
(b) information relating to the private affairs of an individual whose disclosure the CMA thinks might significantly harm the individual’s interests.
(5) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4)(a) or (b) above is necessary for the purposes of the notice.
(6) The following sections of Part 3 of the Enterprise Act 2002 shall apply, as they had effect immediately before the relevant date and with the modifications mentioned in subsections (6A), (7) and (8) below, for the purposes of any investigation by the CMA for the purposes of the exercise of its functions under section 17P above, as they applied immediately before that date for the purposes of any investigation on references under that Part—
(a) section 109 (attendance of witnesses and production of documents etc);
(b) section 110 (enforcement of powers under section 109: general);
(c) section 111 (penalties);
(d) section 112 (penalties: main procedural requirements);
(e) section 113 (payments and interest by instalments);
(f) section 114 (appeals in relation to penalties);
(g) section 115 (recovery of penalties); and
(h) section 116 (statement of policy).
(6A) Section 109 shall, in its application by virtue of subsection (6) above, have effect as if—
(a) for subsection (A1), there were substituted—
(A1) For the purposes of this section, a permitted purpose is assisting the CMA in carrying out any functions exercisable by it in connection with an investigation for the purposes of the exercise of its functions under section 17P of the Water Industry Act 1991.
, and
(b) subsection (8A) were omitted.
(7) Section 110 shall, in its application by virtue of subsection (6) above, have effect as if—
(a) subsection (2) were omitted,
(b) after subsection (3), there were inserted—
(3A) No penalty shall be imposed by virtue of subsection (1) or (3) if more than 4 weeks have passed since the publication by the CMA of a notice under section 17P(9) of the Water Industry Act 1991 in connection with the reference concerned or, if no direction has been given by the CMA under section 17P(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period; but this subsection shall not apply in relation to any variation or substitution of the penalty which is permitted by virtue of this Part.
; and
(c) in subsection (9) the words from “or section” to “section 65(3))” were omitted.
(8) Section 111(5)(b) shall, in its application by virtue of subsection (6), have effect as if for sub-paragraph (ii) there were substituted—
(ii) if earlier, the day on which a notice is published by the CMA under section 17P(8) of the Water Industry Act 1991 in connection with the reference concerned or, if no direction is given by the CMA under section 17P(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.
(9) Provisions of Part 3 of the Enterprise Act 2002 which , immediately before the relevant date, had effect for the purposes of sections 109 to 116 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (6) above, have effect in relation to those sections as applied by virtue of that subsection as those provisions had effect immediately before that date.
(10) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.
(11) In this section “the relevant date” means the date on which section 143 of the Digital Markets, Competition and Consumers Act 2024 came into force.
(1) Where the CMA or the Secretary of State (the “relevant authority”) makes a relevant order, the order may also provide for the modification of—
(a) the conditions of a particular water supply or sewerage licence,
(b) the standard conditions of water supply licences or sewerage licences, or
(c) the standard conditions of water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations,
to such extent as may appear to the relevant authority to be requisite or expedient for the purpose of giving effect to, or taking account of, any provision made by the order.
(2) In subsection (1) above “relevant order” means—
(a) an order under section 75, 83 or 84 of, or paragraph 5, 10 or 11 of Schedule 7 to, the Enterprise Act 2002 where—
(i) one or more than one of the enterprises which have, or may have, ceased to be distinct enterprises was engaged in the carrying on of activities authorised or regulated by a water supply licence or sewerage licence; or
(ii) one or more than one of the enterprises which will or may cease to be distinct enterprises is engaged in the carrying on of activities authorised or regulated by a water supply licence or sewerage licence; or
(b) an order under section 160 or 161 of that Act where the feature, or combination of features, of the market or markets in the United Kingdom for goods or services which prevents, restricts or distorts competition relates to activities authorised or regulated by a water supply licence or sewerage licence.
(3) The modification under subsection (1)(a) above of part of a standard condition of a particular licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.
(4) Where at any time the relevant authority modifies under subsection (1)(b) or (c) above the standard conditions of water supply licences or sewerage licences or of water supply licences or sewerage licences that grant a particular authorisation or combination of authorisations, the relevant authority—
(a) shall also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that description granted after that time; and
(b) may, after consultation with the Authority, make such incidental or consequential modifications as the relevant authority considers necessary or expedient of any conditions of licences of that description granted before that time.
(5) Where at any time the relevant authority modifies standard conditions of water supply licences or sewerage licences under subsection (4)(a) above for the purposes of their incorporation in licences, the relevant authority shall publish those modifications in such manner as the relevant authority considers appropriate.
(6) Expressions used in subsection (2) above and in Part 3 or 4 of the Enterprise Act 2002 have the same meaning in that subsection as in that Part.
18 Orders for securing compliance with certain provisions.
(1) Subject to subsection (2) and sections 19 and 20 below, where in the case of any company holding an appointment under Chapter I of this Part or any person holding a licence under Chapter 1A of this Part the Secretary of State or the Authority is satisfied—
(a) that that company or that person is contravening—
(i) any condition of the company’s appointment or the person's licence in relation to which he is the enforcement authority; or
(ii) any statutory or other requirement which is enforceable under this section and in relation to which he is the enforcement authority;
or
(b) that that company or that person is likely to contravene any such condition or requirement,
he shall by a final enforcement order make such provision as is requisite for the purpose of securing compliance with that condition or requirement.
(1A) Subject to subsection (2) and sections 19 and 20 below, where—
(a) in the case of any company holding an appointment under Chapter 1 of this Part, the Secretary of State or the Authority is satisfied that the company—
(i) is causing or contributing to a contravention of a condition or requirement such as is referred to in paragraph (a)(i) or (ii) of subsection (1) above by a person holding a licence under Chapter 1A of this Part; or
(ii) is likely to cause or contribute to any such contravention; or
(b) in the case of any person holding a licence under Chapter 1A of this Part, the Secretary of State or the Authority is satisfied that the person—
(i) is causing or contributing to a contravention of a condition or requirement such as is referred to in paragraph (a)(i) or (ii) of subsection (1) above by a company holding an appointment under Chapter 1 of this Part; or
(ii) is likely to cause or contribute to any such contravention,
he or it shall by a final enforcement order make such provision as is requisite for the purpose of securing compliance with that condition or requirement.
(2) Subject to section 19 below, where in the case of any company holding an appointment under Chapter I of this Part or any person holding a licence under Chapter 1A of this Part—
(a) it appears to the Secretary of State or the Authority as mentioned in paragraph (a) or (b) of subsection (1) or (1A) above; and
(b) it appears to him that it is requisite that a provisional enforcement order be made,
he may (instead of taking steps towards the making of a final order) by a provisional enforcement order make such provision as appears to him requisite for the purpose of securing compliance with the condition or requirement in question.
(3) In determining for the purposes of subsection (2)(b) above whether it is requisite that a provisional enforcement order be made, the Secretary of State or, as the case may be, the Authority shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of any condition or of any statutory or other requirement enforceable under this section, is likely to be done, or omitted to be done, before a final enforcement order may be made.
(4) Subject to sections 19 and 20 below, where the Secretary of State or the Authority has made a provisional enforcement order, he shall confirm it, with or without modifications, if—
(a) he is satisfied that the company to which the order relates—
(i) is contravening any condition or statutory or other requirement in relation to which he is the enforcement authority; or
(ii) is likely to contravene any such condition or requirement;or
(iii) is causing or contributing to a contravention of any such condition or requirement; or
(iv) is likely to cause or contribute to any such contravention;
and
(b) the provision made by the order (with any modifications) is requisite for the purpose of securing compliance with that condition or requirement.
(5) An enforcement order—
(a) shall require the company to which it relates (according to the circumstances of the case) to do, or not to do, such things as are specified in the order or are of a description so specified;
(b) shall take effect at such time, being the earliest practicable time, as is determined by or under the order; and
(c) may be revoked at any time by the enforcement authority who made it.
(6) For the purposes of this section and the following provisions of this Act—
(a) the statutory and other requirements which shall be enforceable under this section in relation to a company holding an appointment under Chapter I of this Part or a person holding a licence under Chapter 1A of this Part shall be such of the requirements of any enactment or of any subordinate legislation as—
(i) are imposed in consequence of that appointment or licence; and
(ii) are made so enforceable by that enactment or subordinate legislation;
(b) the Authority shall be the enforcement authority in relation to the conditions of an appointment under Chapter I of this Part or of a licence under Chapter 1A of this Part; and
(c) the enforcement authority in relation to each of the statutory and other requirements enforceable under this section shall be the Secretary of State, the Authority or either of them, according to whatever provision is made by the enactment or subordinate legislation by which the requirement is made so enforceable.
(7) In this section and the following provisions of this Chapter—
“enforcement order” means a final enforcement order or a provisional enforcement order;
“final enforcement order” means an order under this section other than a provisional enforcement order;
“provisional enforcement order” means an order under this section which, if not previously confirmed in accordance with subsection (4) above, will cease to have effect at the end of such period (not exceeding three months) as is determined by or under the order.
(8) Where any act or omission—
(a) constitutes a contravention of a condition of an appointment under Chapter 1 of this Part or of a condition of a licence under Chapter 1A of this Part or of a statutory or other requirement enforceable under this section; or
(b) causes or contributes to a contravention of any such condition or requirement,
the only remedies for, or for causing or contributing to, that contravention (apart from those available by virtue of this section) shall be those for which express provision is made by or under any enactment and those that are available in respect of that act or omission otherwise than by virtue of its constituting, or causing or contributing to, such a contravention.
(1) Subject to the Drinking Water (Undertakings) (England and Wales) Regulations 2000 neither the Secretary of State nor the Authority shall be required to make an enforcement order in relation to any person, or to confirm a provisional enforcement order so made, if he is satisfied—
(a) that the contraventions were, or the apprehended contraventions are, of a trivial nature;
(aa) that the extent to which the person caused or contributed to, or was likely to cause or contribute to, a contravention was trivial;
(b) that the person has given, and is complying with, an undertaking to take all such steps as it appears to him for the time being to be appropriate for the person to take for the purpose of securing or facilitating compliance with the condition or requirement in question; or
(c) that the duties imposed on him by Part I of this Act preclude the making or, as the case may be, the confirmation of the order.
(1A) Before making an enforcement order or confirming a provisional enforcement order, the Authority shall consider whether it would be more appropriate to proceed under the Competition Act 1998.
(1B) The Authority shall not make an enforcement order or confirm a provisional enforcement order if it considers that it would be more appropriate to proceed under the Competition Act 1998.
(2) The requirement to comply with an undertaking given for the purposes of subsection (1)(b) above shall be treated as a statutory requirement enforceable under section 18 above—
(a) by the Secretary of State; or
(b) with the consent of or in accordance with a general authorisation given by the Secretary of State, by the Authority.
(3) Where the Secretary of State or the Authority, having notified a person that he is considering the making in relation to the person of an enforcement order or the confirmation of a provisional enforcement order so made, is satisfied as mentioned in paragraph (a), (aa), (b) or (c) of subsection (1) above or, in the case of the Authority, has decided that it would be more appropriate to proceed under the Competition Act 1998, he shall—
(a) serve notice that he is so satisfied or has so decided on the person;
(b) publish in such manner as the Secretary of State or the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them—
(i) a copy of the notice, and
(ii) where the Secretary of State or the Authority is satisfied as mentioned in paragraph (b) of subsection (1), a summary of the undertaking describing the steps to be taken under it; and
(c) in a case where the Secretary of State is satisfied as mentioned in the said paragraph (b), serve a copy of the notice and of the undertaking given for the purposes of that paragraph on the Authority.
(3A) In a case where notice under subsection (3)(a) falls to be served by the Welsh Ministers, references to the Secretary of State in subsection (3)(b) are to be read as references to the Welsh Ministers.
(4) The requirements of subsection (3) above shall not apply, in the case of any proposed order or confirmation in respect of a direction under section 208 below, to the extent that the Secretary of State directs that they should not be complied with in the interests of national security.
(1) Before making a final enforcement order under section 18(1) above or confirming a provisional enforcement order in a case in which section 18(4)(a)(i) or (ii) above applies, the Secretary of State or the Authority shall give notice—
(a) stating that he proposes to make or confirm the order and setting out the effect of the order;
(b) setting out—
(i) the condition or requirement for the purpose of securing compliance with which the order is to be made or confirmed;
(ii) the acts or omissions which, in his opinion, constitute or would constitute contraventions of that condition or requirement; and
(iii) the other facts which, in his opinion, justify the making or confirmation of the order;
and
(c) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections with respect to the proposed order or proposed confirmation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(1A) Before making a final enforcement order under section 18(1A) above or confirming a provisional enforcement order in a case in which section 18(4)(a)(iii) or (iv) above applies, the Secretary of State or the Authority shall give notice—
(a) stating that he or it proposes to make or confirm the order and setting out the effect of the order;
(b) setting out—
(i) the condition or requirement for the purposes of securing compliance with which the order is to be made or confirmed;
(ii) the acts or omissions which, in his or its opinion, cause or contribute to or would cause or contribute to the contravention of that condition or requirement; and
(iii) the other facts which, in his or its opinion, justify the making or confirmation of the order; and
(c) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections to the proposed order or proposed confirmation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(2) A notice under subsection (1) or (1A) above shall be given—
(a) by publishing the notice in such manner as the Secretary of State or, as the case may be, the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; and
(b) by serving a copy of the notice, and a copy of the proposed order or of the order proposed to be confirmed, on the person to whom the order relates and, where the notice is given by the Secretary of State, on the Authority.
(3) Neither the Secretary of State nor the Authority shall make a final enforcement order with modifications, or confirm a provisional enforcement order with modifications, except—
(a) with the consent to the modifications of the person to whom the order relates; or
(b) after complying with the requirements of subsection (4) below.
(4) The requirements mentioned in subsection (3) above are that the Secretary of State or, as the case may be, the Authority shall—
(a) serve on the person to whom the order relates such notice as appears to him to be requisite of his proposal to make or confirm the order with modifications;
(b) in that notice specify the period (not being less than twenty-one days from the date of the service of the notice) within which representations or objections with respect to the proposed modifications may be made; and
(c) consider any representations or objections which are duly made and not withdrawn.
(5) As soon as practicable after making an enforcement order or confirming a provisional enforcement order, the Secretary of State or, as the case may be, the Authority shall—
(a) serve a copy of the order on the person to whom the order relates and, where this subsection applies in the case of an order made or confirmed by Secretary of State, on the Authority; and
(b) publish such a copy in such manner as he considers appropriate for the purpose of bringing the order to the attention of persons likely to be affected by it.
(6) Before revoking an enforcement order, other than an unconfirmed provisional order, the Secretary of State or the Authority shall give notice—
(a) stating that he proposes to revoke the order and setting out its effect; and
(b) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed revocation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(7) If, after giving a notice under subsection (6) above, the Secretary of State or the Authority decides not to revoke the order to which the notice relates, he shall give notice of that decision.
(8) A notice under subsection (6) or (7) above shall be given—
(a) by publishing the notice in such manner as the Secretary of State or, as the case may be, the Authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; and
(b) by serving a copy of the notice on the person to whom the order relates and, where the notice is given by the Secretary of State, on the Authority.
(9) The requirements of the preceding provisions of this section shall not apply, in the case of any order in respect of a contravention of a direction under section 208 below, to the extent that the Secretary of State directs that they should not be complied with in the interests of national security.
(1) If the person to whom an enforcement order relates is aggrieved by the order and desires to question its validity on the ground—
(a) that its making or confirmation was not within the powers of section 18 above; or
(b) that any of the requirements of section 20 above have not been complied with in relation to it,
the person may, within forty-two days from the date of service on it of a copy of the order, make an application to the High Court under this section.
(2) On any such application the High Court may, if satisfied that the making or confirmation of the order was not within those powers or that the interests of the person have been substantially prejudiced by a failure to comply with those requirements, quash the order or any provision of the order.
(3) Except as provided by this section, the validity of an enforcement order shall not be questioned in any legal proceedings whatsoever.
(1) The obligation to comply with an enforcement order shall be a duty owed to any person who may be affected by a contravention of the order.
(2) Where a duty is owed by virtue of subsection (1) above to any person, any breach of the duty which causes that person to sustain loss or damage shall be actionable at the suit of that person.
(3) In any proceedings brought against any person in pursuance of subsection (2) above, other than proceedings in respect of so much of a contravention of any order as consists in a breach of the duty imposed by virtue of section 68(1)(a) or (1A)(a) below, it shall be a defence for the person to show that the person took all reasonable steps and exercised all due diligence to avoid contravening the order.
(4) Without prejudice to any right which any person may have by virtue of subsection (1) above to bring civil proceedings in respect of any contravention or apprehended contravention of an enforcement order, compliance with any such order shall be enforceable by civil proceedings by the relevant enforcement authority for an injunction or for any other appropriate relief.
(5) In subsection (4) above “the relevant enforcement authority”, in relation to any enforcement order, means the Secretary of State or the Authority or either of them according to who is the enforcement authority in relation to the condition or requirement compliance with which was to be secured by the order.
(1) Where the Authority is satisfied—
(a) in the case of any company holding an appointment under Chapter 1 of this Part, that the company—
(i) has contravened or is contravening any condition of the appointment;
(ii) has caused or contributed to, or is causing or contributing to, a contravention by a person holding a licence under Chapter 1A of this Part of any condition of the licence; or
(iii) has failed or is failing to achieve any standard of performance prescribed under section 38(2) or 95(2) below; or
(b) in the case of any person holding a licence under Chapter 1A of this Part, that the person—
(i) has contravened or is contravening any condition of the licence; ...
(ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding an appointment under Chapter 1 of this Part of any condition of the appointment, or
(iii) has failed or is failing to achieve any standard of performance prescribed under section 38ZA or 95ZA,
the Authority may, subject to section 22C below, impose on that company or that person a penalty of such amount as is reasonable in all the circumstances of the case.
(2) Where the Authority, the Secretary of State or the Assembly is satisfied—
(a) in the case of any company holding an appointment under Chapter 1 of this Part, that the company—
(i) has contravened or is contravening any statutory or other requirement which is enforceable under section 18 above and in relation to which he or it is the enforcement authority; or
(ii) has caused or contributed to, or is causing or contributing to, a contravention by a person holding a licence under Chapter 1A of this Part of any such requirement; or
(b) in the case of any person holding a licence under Chapter 1A of this Part, that the person—
(i) has contravened or is contravening any statutory or other requirement which is enforceable under section 18 above and in relation to which he or it is the enforcement authority; or
(ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding an appointment under Chapter 1 of this Part of any such requirement,
he or it may, subject to section 22C below, impose on that company or that person a penalty of such amount as is reasonable in all the circumstances of the case.
(3) In a case in which—
(a) subsection (1) above applies by virtue of paragraph (a)(ii) or (b)(ii) of that subsection, or
(b) subsection (2) above applies by virtue of paragraph (a)(ii) or (b)(ii) of that subsection,
references in the following provisions of this section and sections 22B and 22C below to a contravention include references to causing or contributing to a contravention.
(4) Before imposing a penalty on a person under subsection (1) or (2) above the Authority, the Secretary of State or the Assembly (the “enforcement authority”) shall give notice—
(a) stating that it proposes to impose a penalty and the amount of the penalty proposed to be imposed;
(b) setting out the condition, requirement or standard of performance in question;
(c) specifying the acts or omissions which, in the opinion of the enforcement authority, constitute the contravention or failure in question and the other facts which, in the opinion of the enforcement authority, justify the imposition of a penalty and the amount of the penalty proposed; and
(d) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections with respect to the proposed penalty may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(5) Before varying any proposal stated in a notice under subsection (4)(a) above the enforcement authority shall give notice—
(a) setting out the proposed variation and the reasons for it; and
(b) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections with respect to the proposed variation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(6) As soon as practicable after imposing a penalty on a person, the enforcement authority shall give notice—
(a) stating that he or it has imposed a penalty on the person and its amount;
(b) setting out the condition, requirement or standard of performance in question;
(c) specifying the acts or omissions which, in the opinion of the enforcement authority, constitute the contravention or failure in question and the other facts which, in the opinion of the enforcement authority, justify the imposition of the penalty and its amount; and
(d) specifying a date, no earlier than the end of the period of forty-two days from the date of service of the notice on the person, by which the penalty is required to be paid.
(7) The person on whom the penalty has been imposed may, within twenty-one days of the date of service ... of a notice under subsection (6) above, make an application to the enforcement authority for him or it to specify different dates by which different portions of the penalty are to be paid.
(8) Any notice required to be given under this section shall be given—
(a) by publishing the notice in such manner as the enforcement authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them;
(b) by serving a copy of the notice on the person on whom the penalty is to be or has been imposed;
(c) by serving a copy of the notice on the Council; and
(d) where the notice is given by the Secretary of State or the Assembly, by serving a copy of the notice on the Authority.
(9) Any sums received by the enforcement authority by way of penalty under this section shall be paid into the Consolidated Fund.
(10) The power of the enforcement authority to impose a penalty under this section is not exercisable in respect of any contravention or failure before the commencement of this section.
(11) No penalty imposed by an enforcement authority under this section may exceed—
(a) 10% of the turnover of the company, or
(b) in a case where the person on whom the penalty is imposed is not a company, 10% of the turnover of the business of the person,
(determined in accordance with provisions specified in an order made, after consulting the Assembly, by the Secretary of State).
(12) The power of the Secretary of State to make an order under subsection (11) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(13) Before imposing a penalty under this section, the Authority shall consider whether it would be more appropriate to proceed under the Competition Act 1998.
(14) The Authority shall not impose a penalty under this section if it considers that it would be more appropriate to proceed under the Competition Act 1998.
(1) Each enforcement authority shall prepare and publish a statement of policy with respect to the imposition of penalties and the determination of their amount.
(2) In deciding whether to impose a penalty, and in determining the amount of any penalty, in respect of a contravention or failure an enforcement authority shall have regard to his or its statement of policy most recently published at the time when the contravention or failure occurred.
(3) An enforcement authority may revise his or its statement of policy and where he or it does so shall publish the revised statement.
(4) Publication under this section shall be in such manner as the enforcement authority considers appropriate for the purpose of bringing the matters contained in the statement of policy to the attention of persons likely to be affected by them.
(5) An enforcement authority shall undertake such consultation as he or it considers appropriate when preparing or revising his or its statement of policy.
22C Time limits on the imposition of financial penalties
(1) Where no final or provisional order has been made in relation to a contravention or failure, an enforcement authority may not impose a penalty on a person in respect of the contravention or failure later than the end of the period of five years from the time of the contravention or failure, unless before the end of that period—
(a) the notice under section 22A(4) above relating to the penalty is served on the person under section 22A(8) above; or
(b) a notice relating to the contravention or failure is served on the person under section 203(2) below.
(2) Where a final or provisional order has been made in relation to a contravention or failure, an enforcement authority may not impose a penalty on a person in respect of the contravention or failure unless the notice relating to the penalty under section 22A(4) above was served on the person under section 22A(8) above—
(a) within three months from the confirmation of the provisional order or the making of the final order; or
(b) where the provisional order is not confirmed, within six months from the making of the provisional order.
(1) If the whole or any part of a penalty is not paid by the date by which it is required to be paid, the unpaid balance from time to time shall carry interest at the rate for the time being specified in section 17 of the Judgments Act 1838.
(2) If an application is made under subsection (7) of section 22A above in relation to a penalty, the penalty is not required to be paid until the application has been determined.
(3) If the enforcement authority grants an application under that subsection in relation to a penalty but any portion of the penalty is not paid by the date specified in relation to it by the enforcement authority under that subsection, the enforcement authority may where he or it considers it appropriate require so much of the penalty as has not already been paid to be paid immediately.
(1) If the person on whom a penalty is imposed is aggrieved by—
(a) the imposition of the penalty;
(b) the amount of the penalty; or
(c) the date by which the penalty is required to be paid, or the different dates by which different portions of the penalty are required to be paid,
the company may make an application to the court under this section.
(2) An application under subsection (1) above must be made—
(a) within forty-two days from the date of service on the person of a notice under section 22A(6) above; or
(b) where the application relates to a decision of an enforcement authority on an application by the person under section 22A(7) above, within forty-two days from the date the person is notified of the decision.
(3) On any such application, where the court considers it appropriate to do so in all the circumstances of the case and is satisfied of one or more of the grounds falling within subsection (4) below, the court—
(a) may quash the penalty;
(b) may substitute a penalty of such lesser amount as the court considers appropriate in all the circumstances of the case; or
(c) in the case of an application under subsection (1)(c) above, may substitute for the date or dates imposed by the enforcement authority an alternative date or dates.
(4) The grounds falling within this subsection are—
(a) that the imposition of the penalty was not within the power of the enforcement authority under section 22A above;
(b) that any of the requirements of subsections (4) to (6) or (8) of section 22A above have not been complied with in relation to the imposition of the penalty and the interests of the person have been substantially prejudiced by the non-compliance; or
(c) that it was unreasonable of the enforcement authority to require the penalty imposed, or any portion of it, to be paid by the date or dates by which it was required to be paid.
(5) If an application is made under this section in relation to a penalty, the penalty is not required to be paid until the application has been determined.
(6) Where the court substitutes a penalty of a lesser amount it may require the payment of interest on the substituted penalty at such rate, and from such date, as it considers just and equitable.
(7) Where the court specifies as a date by which the penalty, or a portion of the penalty, is to be paid a date before the determination of the application under this section it may require the payment of interest on the penalty, or portion, from that date at such rate as it considers just and equitable.
(8) Except as provided by this section, the validity of a penalty shall not be questioned by any legal proceedings whatever.
(9) In this section “the court” means the High Court.
Where a penalty imposed under section 22A(1) or (2) above, or any portion of it, has not been paid by the date on which it is required to be paid and—
(a) no application relating to the penalty has been made under section 22E above during the period within which such an application can be made; or
(b) an application has been made under that section and determined,
the enforcement authority may recover from the person, as a civil debt due to him or it, any of the penalty and any interest which has not been paid.
23 Meaning and effect of special administration order.
(1) A special administration order is an order of the High Court made in accordance with section 24 or 25 below in relation to a company holding an appointment under Chapter I of this Part or which is a qualifying water supply licensee or a qualifying sewerage licensee and directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed, by a person appointed by the High Court—
(a) for the achievement of the purposes of such an order; and
(b) in a manner which protects the respective interests of the members and creditors of the company.
(2) The purposes of a special administration order made in relation to any company holding an appointment under Chapter 1 of this Part shall be-
(a) the transfer to another company, or (as respects different parts of the area to which the company’s appointment relates, or different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that the functions which have been vested in the company by virtue of its appointment may be properly carried out; and
(b) the carrying out of those functions pending the making of the transfer and the vesting of those functions in the other company or companies (whether by virtue of the transfer or of an appointment or variation which replaces the former company as a relevant undertaker).
(2A) The purposes of a special administration order made in relation to any company which is a qualifying water supply licensee shall be—
(a) the transfer to another company or companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that activities relating to the introduction or introductions of water mentioned in subsection (7) below may be properly carried on; and
(b) the carrying on of those activities pending the making of the transfer.
(2B) Where a company is in special administration as a result of an order made on the grounds that the company is or is likely to be unable to pay its debts—
(a) a purpose of the special administration order is to rescue the company as a going concern, and
(b) the transfer purpose under subsection (2)(a) or (2A)(a) applies only if the special administrator thinks that—
(i) it is not likely to be possible to rescue the company as a going concern, or
(ii) transfer is likely to secure more effective performance of the functions or activities mentioned in subsection (2)(a) or (2A)(a).
(2C) Where subsection (2B) applies, subsections (2)(b) and (2A)(b) have effect as if they referred to carrying out functions, or carrying on activities, pending rescue or transfer.
(2D) For the purpose of rescuing the company as a going concern a special administrator may propose—
(a) a company voluntary arrangement under Part 1 of the Insolvency Act 1986, or
(b) a compromise or arrangement in accordance with Part 26 or 26A of the Companies Act 2006.
(2E) The Secretary of State may by regulations made by statutory instrument—
(a) modify a provision of the Insolvency Act 1986 or the Companies Act 2006 in respect of the arrangements and compromises mentioned in subsection (2D) in so far as they apply to a company which is or has been in special administration;
(b) make other supplemental provision about those arrangements and compromises (which may, in particular, apply or modify the effect of an enactment about insolvency or companies).
(2F) Provision under subsection (2E)(a) or (b) may, in particular, confer a function on—
(a) the Secretary of State,
(b) the Welsh Ministers, or
(c) the Authority.
(2G) Regulations under subsection (2E) may not be made unless—
(a) the Welsh Ministers have consented to the making of the regulations, and
(b) a draft has been laid before and approved by resolution of each House of Parliament (and section 213(1) shall not apply).
(2H) A transfer under subsection (2) or (2A) may be effected by—
(a) transferring all or part of the company's undertaking to a wholly-owned subsidiary of the company, and
(b) then transferring securities in the subsidiary to another company.
(3) Schedule B1 to the Insolvency Act 1986 (administration) applies to special administration (subject to regulations under subsection (3A)).
(3A) The Secretary of State may make regulations about special administration which—
(a) apply (with or without modification) an insolvency provision;
(b) disapply an insolvency provision;
(c) modify the effect of an insolvency provision;
(d) make provision similar to, and in place of, an insolvency provision.
(3B) In subsection (3A) “insolvency provision” means a provision of the Insolvency Act 1986 or another enactment about insolvency (including (i) a provision about administration, (ii) a provision about consequences of insolvency, and (iii) a provision conferring power to make rules).
(3C) A reference in an enactment to Part II of the Insolvency Act 1986 includes a reference to that Part as applied by or under this section (subject to regulations under subsection (3A)).
(3D) Regulations under subsection (3A) shall be made by statutory instrument and may not be made unless—
(a) the Welsh Ministers have consented to the making of the regulations, and
(b) a draft has been laid before and approved by resolution of each House of Parliament (and section 213(1) shall not apply).
(4) Schedule 2 to this Act shall have effect for enabling provision to be made with respect to cases in which
(a) a company is replaced by another as a relevant undertaker without an appointment or variation under Chapter 1 of this Part; or
(b) a company carries on activities relating to—
(i) the introduction or introductions of water mentioned in subsection (7) formerly carried on by another company; or
(ii) the removal or removals of matter mentioned in subsection (9) formerly carried on by another company,
in pursuance of a special administration order.
(5) In this section “business” and “property” have the same meanings as in the Insolvency Act 1986.
(6) For the purposes of this section, sections 24 to 26 below and Schedule 2 to this Act, a water supply licensee is a qualifying water supply licensee if—
(a) it is the holder of a water supply licence giving it a wholesale or supplementary authorisation (within the meaning of Chapter 1A of this Part), and
(b) the condition in subsection (7) is satisfied in relation to it.
(7) The condition in this subsection is that—
(a) the introduction of water by the licence holder which is permitted under section 66B or 66C is designated as a strategic supply under section 66G, or
(b) the introductions of water by the licence holder which are permitted under section 66B or 66C are designated as a collective strategic supply under section 66H.
24 Special administration orders made on special petitions.
(1) If, on an application made to the High Court by petition presented—
(a) by the Secretary of State; or
(b) with the consent of the Secretary of State, by the Authority,
that Court is satisfied in relation to any company which holds an appointment under Chapter I of this Part that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.
(1A) If on an application made to the High Court by petition presented—
(a) by the Secretary of State (after consulting the Assembly); or
(b) with the consent of the Secretary of State (after consulting the Assembly), the Authority,
the Court is satisfied in relation to any company which is a qualifying water supply licensee or qualifying sewerage licensee that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.
(1B) Before presenting a petition under subsection (1A) in relation to a qualifying water supply licensee whose licence gives it a supplementary authorisation, the Secretary of State or the Authority (as the case may be) must consult the Welsh Ministers.
(2) The grounds mentioned in subsections (1) and (1A) above are, in relation to any company—
(a) that there has been, is or is likely to be such a contravention by the company of any principal duty, not being a contravention in respect of which a notice has been served under subsection (3) of section 19 above, as is serious enough to make it inappropriate for the company to continue to hold its appointment or licence;
(b) that there has been, is or is likely to be such a contravention by the company of the provisions of any enforcement order which—
(i) is not for the time being the subject-matter of proceedings brought by virtue of section 21(1) above; and
(ii) if it is a provisional enforcement order, has been confirmed,
as is serious enough to make it inappropriate for the company to continue to hold its appointment or licence;
(bb) in the case of a company which is a qualifying water supply licensee, that—
(i) action taken by the company has caused a contravention by a water undertaker of any principal duty; and
(ii) that action is serious enough to make it inappropriate for the company to continue to hold its licence;
(bc) in the case of a company which is a qualifying sewerage licensee, that—
(i) action taken by the company has caused a contravention by a sewerage undertaker of any principal duty; and
(ii) that action is serious enough to make it inappropriate for the company to continue to hold its licence;
(c) that the company is or is likely to be unable to pay its debts;
(d) that, in a case in which the Secretary of State has certified that it would be appropriate, but for section 25 below, for him to petition for the winding up of the company under section 124A of the Insolvency Act 1986 (petition by the Secretary of State following inspectors’ report etc.), it would be just and equitable, as mentioned in that section, for the company to be wound up if it did not hold an appointment under Chapter I of this Part or was not a qualifying water supply licensee or a qualifying sewerage licensee; or
(e) in the case of a company holding an appointment under Chapter 1 of this Part, that the company is unable or unwilling adequately to participate in arrangements certified by the Secretary of State or the Authority to be necessary by reason of, or in connection with, a proposal for the making by virtue of section 7(4)(c) above of any appointment or variation replacing a company as a relevant undertaker.
(3) Notice of any petition under this section for a special administration order shall be given forthwith to such persons and in such manner as may be prescribed by rules made under section 411 of the Insolvency Act 1986 (“the 1986 Act”); and no such petition shall be withdrawn except with the leave of the High Court.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) For the purposes of this section a company is unable to pay its debts if—
(a) it is a limited company which is deemed to be so unable under section 123 of the 1986 Act (definition of inability to pay debts); or
(b) it is an unregistered company which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding up of unregistered companies).
(7) In this section “principal duty” means—
(a) in relation to a company holding an appointment under Chapter 1 of this Part, a requirement imposed on the company by section 37 or 94 below;
(b) in relation to a company which is a qualifying water supply licensee or a qualifying sewerage licensee, any condition of its licence or any statutory requirement imposed on it in consequence of its licence.
25 Power to make special administration order on winding-up petition.
(1) On a petition made to any court for the winding up of a company which holds an appointment under Chapter I of this Part or is a qualifying licensed water supplier qualifying water supply licensee or a qualifying sewerage licensee—
(a) the court shall not make a winding-up order in relation to the company; but
(b) if the court is satisfied that it would be appropriate to make such an order if the company were not a company holding such an appointment or a qualifying licensed water supplier qualifying water supply licensee or a qualifying sewerage licensee, it shall, instead, make a special administration order in relation to the company.
(2) But the court may not exercise its powers on the petition unless—
(a) notice of the petition has been served on the relevant persons, and
(b) a period of at least 14 days has passed starting with the day on which those notices were served (or, if served on different days, the later of those days).
(3) The relevant persons are entitled to be heard—
(a) at the hearing of the petition, and
(b) at any other hearing of the court in relation to the company under or by virtue of Part 4 of the Insolvency Act 1986.
(4) In this section “relevant person” means the Authority and—
(a) in the case of a petition that relates to a relevant undertaker whose area is wholly or mainly in Wales, the Welsh Ministers;
(b) in any other case, the Secretary of State.
26 Restrictions on voluntary winding up and insolvency proceedings.
(1) Where a company holds an appointment under Chapter I of this Part or is a qualifying water supply licensee or a qualifying sewerage licensee—
(a) the company shall not be wound up voluntarily;
(b) an administrator may not be appointed in relation to the company, whether by court order or otherwise, under Schedule B1 to the Insolvency Act 1986;
(ba) any step taken by any person for the purported purpose of appointing an administrator of the company under Schedule B1 to the Insolvency Act 1986 has no legal effect;
(c) no step shall be taken by any person to enforce any security over the company’s property except where that person has served fourteen days’ notice of his intention to take that step on the Secretary of State and on the Authority.
(2) In this section “security” and “property” have the same meanings as in Parts I to VII of the Insolvency Act 1986.
27 General duty of Authority to keep matters under review.
(1) It shall be the duty of the Authority, so far as it appears to it practicable from time to time to do so, to keep under review the carrying on both in England and Wales and elsewhere of activities connected with the matters in relation to which—
(a) water undertakers or sewerage undertakers carry out functions; and
(b) water supply licensees or sewerage licensees carry on activities authorised by their licences.
(2) It shall also be the duty of the Authority, so far as it appears to it practicable from time to time to do so, to collect information with respect to—
(a) the carrying out by companies appointed under Chapter I of this Part of the functions of relevant undertakers; or
(aa) the carrying on by persons holding licences under Chapter 1A of this Part of the activities authorised by their licences; or
(b) any company mentioned in paragraph (a) or (aa) above ,
with a view to its becoming aware of, and ascertaining the circumstances relating to, matters with respect to which any power or duty is conferred or imposed on it by or under any enactment.
(3) The Secretary of State may give general directions indicating—
(a) considerations to which the Authority should have particular regard in determining the order of priority in which matters are to be brought under review in performing its duty under subsection (1) or (2) above; and
(b) considerations to which, in cases where it appears to the Authority that any of its powers under Parts II to V and VII of this Act are exercisable, it should have particular regard in determining whether to exercise those powers;
and it shall be the duty of the Authority to comply with any such directions.
(4) It shall be the duty of the Authority, where either it considers it expedient or it is requested by the Secretary of State or the CMA to do so, to give information, advice and assistance to the Secretary of State or that Authority with respect to any matter relating to—
(a) the functions of either description of relevant undertaker; or
(b) the carrying out of any such functions by a company holding an appointment under Chapter I of this Part; or
(c) the activities authorised by the authorisations or combinations of authorisations given by licences under Chapter 1A of this Part (see sections 17A and 17BA); or
(d) the carrying on of any such activities by a person holding any such licence.
27ZA Power to require information for purpose of monitoring
(1) The Authority may, for the purpose of performing its duty under section 27(1) or (2), serve a notice under subsection (2) on—
(a) a water undertaker or sewerage undertaker;
(b) a water supply licensee or sewerage licensee.
(2) A notice under this subsection is a notice which requires the person on whom it is served—
(a) to produce to the Authority, at a time and place specified in the notice (which must be reasonable), any documents specified or described in the notice which are in that person’s custody or under that person’s control, or
(b) to provide to the Authority, at a time and place and in the form and manner specified in the notice (which must be reasonable), information specified or described in the notice.
(3) The requirements imposed by a notice under subsection (2) are enforceable by the Authority under section 18.
(4) Nothing in this section requires a disclosure of information that would contravene the data protection legislation (but in determining whether a disclosure would do so, take into account the duty imposed by this section).
(5) In subsection (4) “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3(9) of that Act).