Scottish Energy Minister Fergus Ewing has called for the UK Government to ensure new appeal cases relating to decisions made by the Oil and Gas Authority (OGA) under the MER rules on Maximising Economy Recovery of N. Sea oil be heard in Scotland.
The new UK Energy Bill creates new appeal rights for oil and gas companies against the regulator’s decisions under S.28 on Collaboration and other licensing and regulatory issues which the OGA will have sole discretion to decide at first instance.
Aberdeen is an important location for the global oil and gas sector, and home to the OGA, and as such it makes logistical and practical sense for any determination in relation to actions and decisions of the OGA be supported by staff and judiciary based in the city, said Ewing.
With the support of the Law Society of Scotland and the Faculty of Advocates, the Scottish Energy Minister has today made public this plea which was originally made to the UK Government in January 2016.
Ewing wrote to Shailesh Vara, Parliamentary Under-Secretary of State for Justice, and David Mundell, Secretary of State for Scotland, to press for urgent assurances on the matter.
Ewing added: “It makes sense from every perspective that powers which exist to adjudicate disputes over decisions taken by the OGA are exercised in Aberdeen.
“Although the Scotland Bill enables the management and operation of reserved tribunals to be transferred to Scotland I have great concern about the timetable for these transfers. I have been told this is unlikely to happen before 2020 at the earliest, by which time opportunity to develop the necessary specialisations will have been lost – not to mention the extra cost and inconvenience of travel and the time expected of individuals, such as witnesses, would be enormous overall.
“I feel it is vitally important that the expertise of Scotland’s legal profession is utilised at the start and that the UK Government give a firm commitment to that now. The Law Society in Scotland, the Faculty of Advocates and the Society of Advocates in Aberdeen have all expressed their support with this.
“It would be sensible to locate the tribunals in Aberdeen because it is the international capital of oil and gas activity and is where most of the business which could lead to disputes will be done – and the legal business should be there too.
“The tribunal exists in order to provide a means of receiving and determining any complaints about decisions taken by the OGA. Complaints are likely to arise and we should be prepared.
Any such complaints are likely to be serious so it is important such proceedings are based where the grievance occurs, where witnesses work, companies operate and the office of the OGA is located. These are all or mostly in Aberdeen.
Christine McLintock, President of the Law Society of Scotland, said: “Aberdeen is central to the oil industry in Scotland, the UK and internationally. We would support the Scottish Government’s efforts to ensure that appeals relating to decisions made by the industry’s regulator, the Oil and Gas Authority, can be heard in the city.
“Given that the Oil and Gas Authority is already based there and the wealth of specialist knowledge and expertise about the sector among the legal profession and judiciary in the North East, it makes sense to also locate the new tribunal and appeals tribunal in Aberdeen.
“There is a fairly short time period of 28 days to lodge notice of an appeal. If the appeal goes ahead, it is highly likely that the majority of potential claimants and witnesses involved in the case, as well as their legal representatives, would be located in and around Aberdeen. Having the tribunal and appeals tribunal in the same part of the country will be more convenient to access, saving time, effort and money for all concerned.
“We have also written directly to the UK Minister for Energy, Amber Rudd MP, to urge her to consider the benefits of locating the tribunal in Aberdeen.”
James Wolffe QC, Dean of the Faculty of Advocates, added: “The Energy Bill establishes a new structure for appeals from the regulator. These appeals should be dealt with, from the outset, in Scotland, where so much work related to the oil and gas industry already takes place.
“As the centre of the oil industry in the UK, Aberdeen would be the natural forum for these disputes.”