Costs rules stand for Online Safety Act appeals

The Online Safety Act 2023 sets out a process through which regulated service providers can appeal against decisions of Ofcom, the UK’s online safety regulator. Certain decisions under the Act are appealable to the Administrative Appeals Chamber of the Upper Tribunal including categorisation decisions, technology notices requiring services to deploy prescribed measures to detect content such as child sexual abuse material and terrorist content, confirmation decisions and penalty notices. Other decisions may only be challenged through judicial review in the Administrative Court. Appeals heard by the Upper Tribunal are done so in accordance with the Tribunal Procedure (Upper Tribunal) Rules 2008.

Online safety regulation expert Gemma Erskine of Pinsent Masons said: "We are increasingly likely to see parties make use of the Upper Tribunal appeals process under the Online Safety Act now that Ofcom has issued categorisation decisions and enforcement activity is underway. As a result, the way in which this procedure is governed and operates will be of critical importance."

Earlier this year, the Tribunal Procedure Committee (TPC), the independent body responsible for setting tribunal rules with the Ministry of Justice, opened a consultation on possible changes to the 2008 rules in respect of the Online Safety Act 2023. The consultation addressed proposals from Ofcom and the UK government, which included suggested changes to the default position on costs.

Under the default position on costs, the Upper Tribunal can only award costs in cases where there has been unreasonable conduct in proceedings. Ofcom and the government wanted the rules to change so the tribunal could issue an order enabling the successful party in appeals to recover their costs from the other side.

In its recent response to the consultation, the TPC confirmed (5-page / 151KB PDF) that it will not take forward the costs proposals: “The TPC notes that Ofcom has the ability to cover litigation costs by levying fees on the providers of regulated services. Therefore, there is no reason to depart from the usual rule for costs in tribunals, which is that costs should only be awarded where there has been unreasonable conduct.”

The TPC has, however, said it will introduce a new time limit on raising certain appeals under the Online Safety Act. ‘Interested persons’ that are not the service providers that receive an Ofcom decision notice will have three months from the date the decision is published to file applications for permission to appeal, under the changes. Ofcom had lobbied for a one-month time limit to apply to such cases.

Erskine said: "The TPC's response provides important clarity on how Online Safety Act appeals will operate in practice, particularly in relation to third-party appeals and the procedural framework governing challenges to Ofcom's decisions. While the committee largely endorsed its original proposals, the standout development is its decision to reject a broader costs-shifting regime for Online Safety Act appeals. In a significant change from its provisional position, the committee concluded that there is no reason to depart from the Upper Tribunal's established costs rules, particularly given Ofcom's ability to recover litigation costs through industry levies.”

“For regulated services, this preserves a more proportionate appellate framework and avoids the routine exposure to adverse costs that could otherwise have deterred legitimate challenges to regulatory decisions,” she added.