Typology of referencing in regulations

Referencing in regulation is becoming more common in a globalised and interconnected world. Jurisdictions recognise that other bodies, or organisations both within and outside their jurisdiction, have more expertise in a given sector and so it makes sense to reference such bodies / organisations. In fact such referencing is justified based on efficiency, limited resources and consistency. However, some referencing has not been conceived well and so this howtoregulate article provides a roadmap of considerations that a regulator ought to take into account before making a reference, external to the piece of regulation.

The following typology aims at raising awareness of the different methods and objects of referencing so that referencing can be improved, based on a wider choice.

1. Targets of references

1.1 Other acts of the same jurisdiction.

Regulation mostly refers to acts of the same jurisdiction.

1.2. Acts of other jurisdictions

Exceptionally, it refers to acts of other jurisdictions.

1.3 Documents of international or supranational organisations

Regulation can refer to hard law, soft law or other documents of international or supranational organisations (organisations created by international law that supersedes national law).

1.4 Standards

Regulation can refer to (mostly semi-public) national or international standards of generally recognised standardisation organisations like ISO or IEC. However, regulation can also refer to private standardisation organisations like GS1. There is no strict line to the next case, but rather a continuum.

1.5 Other technical specifications or codes of conduct elaborated by private bodies

Sometimes, business associations or individual companies like insurances or other associations develop technical specifications or codes of conduct that are worthwhile being referred to. In particular in the field of ethics one can even observe codes of conduct that have been elaborated by business and other associations jointly, to ensure plurality and balancing of views.

1.6 Official publications / data

All kinds of notices in official journals, official databases like company registries, public price indices and public publications can be referred to, subject to the practices of the respective jurisdiction.

1.7 Private publications / data

Trust ratings by private rating agencies, private price indices e.g. for the housing market can be referred to.

1.8 Administrative acts

Sometimes, regulation refers to an act that does not fall under the definition of regulation, thus an administrative act.

2. Static and dynamic references

References can be static, meaning referring to a document that cannot change in time. They can also be dynamic, thus referring to a document that evolves in time. The latter are often regarded as legally problematic in so far as the regulator might lose control of the content of the regulation. The issue is absent or less grave if the document referred to is another act adopted by the same regulator or a superior regulator.

If there is a legal issue, an appropriate solution can be found by intermitting an act or at least an administrative act that confirms the shift from the previous to the new version of the document referred to. Such an intermittence can also be used to determine the transition period during which both versions can be applied and other transition issues (for more details see sections 9.1 and 9.2 of Chapter 9 of the Handbook “How to regulate?”).

Dynamic references do not necessarily need to refer just simply to the latest version of a document. They can also permit the use of the two latest versions or make the use of the latest version possible with a lead time (necessary for adaptation of verification mechanisms) and mandatory after further months or years. There is no limit to creativity here, and such creativity is sometimes needed to permit a smooth and effective transition.

Though static references seem to be advantageous in general terms, there are also some pitfalls. This is best illustrated with the example of international standards. The dated versions of the international standards referred to often become superseded in a few months or years. This can have dramatic consequences. They may lose formal validity and might not even be accessible anymore which creates other issues of legal certainty. Moreover, where different normative references interact and international standards normatively referred to contain further normative references, one can easily end up with situations in which different versions of the same standard are normatively referred to – a source of confusion or even contradiction.

3. Starting points for using references

3.1 References within conditions

A reference can be built into the condition of a legal provision.

Example:

Where the rent is more than 20% higher than the average rent as fixed by XYZ index, the property owner shall …”.

3.2 References within consequences

A reference can be built into the consequence part of a provision.

Example:

Where the conformity assessment body ceases to operate under this Regulation, the economic operator shall within six months undergo a new conformity assessment procedure with one of the back-up conformity assessment bodies listed in the latest relevant publication in the Official Journal.”

3.3 References within conditions and consequences combined

The same or another reference can be placed in both parts of a provision.

Example:

Where the rent is more than 10% higher than the average rent as fixed by XYZ index, the property owner shall restitute half of the difference between the rent and the average rent.”

3.4 References within definitions

References can be placed in definitions.

Example:

For the definition of ‘Quality system’, see ISO 9001 in its latest version.”

4. End points for using references

4.1 A reference can be made to an entire provision or text so that also the conditions of that provision or text must be fulfilled to trigger a certain consequence.

Example 1.

Sentence 1: When A is given, then Sentence 2 applies / applies by analogy.

Sentence 2: When B is given, then C.

Result: When A and B are given, C applies. A alone does not trigger the consequence C.

4.2 But a reference can also be limited to the consequence side of a certain provision or text.

Example 2:

“When A is given, than Sentence 2 applies with regard to its legal consequence C.

Result: To trigger the consequence C, B might be given or not. B is not needed to trigger the consequence C. Otherwise said: only the consequence side of Sentence 2 applies.

Unfortunately, references are not always clear as to whether they follow the example 1 or the example 2.

5 Full or partial applicability of the provision or text referred to

5.1 Full applicability means that the provision or text referred to is to be applied without any modification.

5.2 Partial applicability means that the provision or text referred to applies with one or several limitations.

Example:

When A is given, than Article X applies with exception of its last paragraph.”

In conclusion, when making a reference, external to the piece of regulation, the regulator should take into account the following considerations:

  • What kind of reference do you wish to make? Noting the typology of references at Section 1.
  • Is the reference static or dynamic?
  • What are the implications for legal certainty should the reference become dated or change too quickly?
  • If making references to conditions or consequences, is the reference clear in its meaning?

References in regulation are a useful and efficient regulatory technique that defers expertise to the relevant body or organisation or standard, making regulation, if done correctly, more consistent and easier to manage.

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