MINISTER FOR ECONOMIC DEVELOPMENT
ELECTRONIC COMMUNICATIONS (JERSEY) LAW –
LAW DRAFTING INSTRUCTIONS
1 THE ISSUE
1.1 The Electronic Communications (Jersey) Law (the Law) was introduced in 2000 with a view to encouraging the increased use of electronic communication in place of written communication. It has failed to do so, for reasons explained in section 2 of this paper.
1.2 It is proposed that the Law be amended in accordance with the law drafting instructions annexed to this paper, so as to better achieve its original aims. It is further proposed that the draft Electronic Communications (Amendment) (Jersey) Law that is currently lodged and is awaiting debate by the States in September be withdrawn, as the changes proposed in that amendment will no longer be necessary if the more radical approach set out in the law drafting instructions is followed.
2 BACKGROUND
2.1 Many of the Island’s statutes require that information be provided from one party to another. Such legislation often provides that information must be “in writing”, and so, absent any other legislation, the information cannot be sent electronically. One of the aims of the Law was to facilitate the provision of such information through electronic means by confirming that, where certain conditions are satisfied, information required to be provided in writing may be provided electronically.
2.2 Often, one of the parties to which information must be provided will be a “States entity” (as defined in the Electronic Communications Law). Such parties include departments of the States, but also any body established by statute: for example, the Jersey Financial Services Committee or the Jersey Competition Regulatory Authority. On other occasions, both parties may be non-States entities: for example, in relation to the information that has to be provided by a company to a member under the Companies Law or between secured party and lender under the Security Interests Law.
2.3 The Electronic Communications Law introduced a presumption that information required to be provided under a statute may be provided electronically, provided that private persons consent to that method of communication, or, where one party was a “States entity”, if the information met certain IT requirements as stipulated by the States entity.
2.4 Unfortunately, at the time the Law came into force, a number of States entities realised that they were not currently capable of accepting documents electronically. So an Order was passed which effectively reversed the Law, providing that information can only be passed electronically if it was provided under a statute specified by a further order. As a result, private persons cannot send information between themselves electronically, even when they consent to do so. This is far from ideal.
2.5 There have recently been two orders made which expand the scope of the Law so as to provide that information to be provided to the Commission and to the Comptroller of Income Tax can be sent electronically. However, it is cumbersome to require each stature under which information can be provided electronically to be specified by Order.
2.6 In addition, doubts have been raised as to whether it is appropriate (or indeed vires) to use an Order to effectively reverse the provision of a primary Law. An amendment to the Law addressing this issue has already been lodged and is due for debate by the States in September, though this amendment would not in itself facilitate the increased use of electronic communication.
2.7 It is proposed that the Law be amended very simply to provide that any communication required to be made under a statute may be made electronically to a States entity provided that the entity consents and the information meets the entities IT requirements. The Electronic Communications Order which reversed the original presumption of the Law would then be repealed. The overall effect would be that, instead of a States entity requiring an Order to be made setting out under which statutes it would be acceptable to accept the electronic provision of documents, the department could simply consent to doing so, provided the document met formal IT requirements.
2.8 Such an approach would save a lot of administrative work and reduce the risk of a States entity being found to have acted in a manner that was ultra vires or simply illegal. Even more importantly, it would allow people and businesses in Jersey to maximise the use of electronic communications between them, provided each party consented to do so. It would also have the ancillary benefit of tidying up a law which has become highly complex.
2.9 The proposals have not been the subject of consultation. However, the effect of the proposals will be wholly positive and in no way onerous: they will not compel anyone to use electronic communications, but will simply make it easier for persons (including States entities) to send and accept information electronically, should they consent to doing so.
2.10 It should be noted that it will still be open for the Minister to prescribe by Order specified statutes or circumstances under which information may not be provided electronically.
3 ISSUE AND RECOMMENDATION
3.1 The Minister is requested to:
3.1.1 approve the law drafting instructions attached hereto as annex A;
3.1.2 instruct the Director – Finance Industry Development to
· liaise with the law draftsman with a view to bringing a set of Regulations and an Amendment to the Companies Law before the Minister for approval at the earliest opportunity; and
· request that the Greffe withdraw the previously lodged Electronic Communications (Jersey) Law Amendment 2000-.
PAUL DE GRUCHY
Director, Finance Industry Development
26 July 2006
ANNEX A
Electronic Communications (Jersey) Law (200-)
Drafting Instructions
On Behalf of the Minister for Economic Development
Introduction
This document sets out law drafting instructions in relation to a proposed amendment to the Electronic Communications (Jersey) Law 2000 (the Law).
Background
The Law introduced a presumption that information required to be given under statute could be provided electronically between persons if certain criteria were satisfied. Article 10 of the Law gave the Minister for Economic Development the power to provide, by Order, that that presumption should not apply to certain statutes.
However, due to the inability of a number of “States entities” (as defined in the Law) to accept the electronic filing of certain documents at the time the Law was introduced, the presumption set out in the Law was actually reversed by the Electronic Communications (Jersey) Order 2000 (the Order), which provided that information could only be provided electronically under statutes specified in subsequent orders.
There must be a question over whether it is ultra vires to reverse the approach of a Law by an underlying order in this way.
However, the effect of the Order has been to prevent non-States entities using electronic communication to give information required under statute. Examples of such information include notices that a company might be required to give to its members under the Companies (Jersey) Law or notices that a secured party might be required to give to a borrowed under the Security Interests (Jersey) Law. There are countless other examples where currently, even if both parties consent, it would be illegal for information required under a statute to be sent by electronic, rather than (though not, of course, in addition to) written means.
For the purposes of the economic development department, the Law is currently imposing significant costs and restrictions in relation to the finance industry in particular. The inability of Jersey companies, limited partnerships and collective investment funds (however structured) to communicate solely through electronic means with their members causes such entities problems.
As far as States entities are concerned, the existing approach also raises significant problems. For example, if a States entity and /or a private person are required by statute to provide information in writing to each other, and consensually do so through electronic means, the requirement of the statute will not have been met. Potentially, both parties may have committed an offence and the failure to comply with the processes of statute may have further consequences: for example, a permit that has been issued might be deemed invalid and as a result the person relying on it may have been acting illegally. Clearly this is a far from satisfactory position.
Proposed solution
There are two ways in which the current problem can be addressed. The first is to use the existing mechanism to add, by Order, a number of pieces of legislation to the list of legislation in relation to which electronic communication is permitted. There are a number of drawbacks to this approach: it is cumbersome, in that it relies on providing exceptions to the general rule that electronic communication is not acceptable; it will need frequent updating (and at each stage the risk that something will be overlooked is always present); it leaves open the possibility of persons acting illegally when they consensually agree to accept the communication of information electronically that legally must be provided in writing.
The second approach is simpler and more radical. As currently drafted, Article 11 of the Law provides that:
(1) A person required or permitted by an enactment to give information in writing may give that information by means of an electronic communication –
(a) in every case, if it is reasonable to expect that the information will be readily accessible so as to be useable for subsequent reference;
(b) where the information is required or permitted to be given to a States entity or to a person acting on behalf of a States entity and the entity requires that the information be given in accordance with particular information technology requirements by means of a particular kind of electronic communication, if the entity’s requirement is met; and
(c) where the information is required or permitted to be given to a person who is neither a States entity nor a person acting on behalf of a States entity, if the person to whom the information is required or permitted to be given consents to the information being given by way of an electronic communication.
It is proposed that this paragraph could be simply amended so that States entities are required to consent to the delivery of information by way of electronic communication. In addition, the communication would have to be given in accordance with particular information technology requirements.
The result would be that private persons would be able to use electronic communications by consent in relation to information to be provided under any statute. States entities would be able to receive information required to be given under statute if it met prescribed IT requirements. The only difference is that the current approach of setting out by Order to laws to which the ability to provide information electronically applies would be replaced by States entities simply giving consent to receive information on a law by law, case by case basis.
The benefits of this approach are considerable, but chiefly, the approach would achieve the chief aim of the Law, which is to facilitate the use of electronic communications. It would also allow the various Orders that have been made under the Law to be repealed, which would simplify this area of legislation.
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