The Werritty affair threw a spotlight on the lobbying industry, but moves to regulate the sector were already underway before the resignation of Liam Fox. In February 2010 David Cameron warned that under-regulated lobbying was the “next big scandal waiting to happen”. Proposals to introduce a statutory register of lobbying activity were included in the Coalition agreement.
On 6 December 2011 John Cryer MP introduced a Private Members’ Bill on the subject of lobbying. The matter gained further urgency when in the same week a lobbyists’ representative body, the Public Relations Consultants Association (PRCA), withdrew from the UK Public Affairs Counil and backed calls for a statutory register.
Statutory regulation may soon be a reality. With greater transparency in dealings between Whitehall officials and outside interests will come greater compliance obligations. New lobbying legislation will have important implications for law firms and their clients.
Legislation in the UK is likely to be a matter of some controversy. What might we expect? There is already a European voluntary register opened by the European Commission in 2008 and the European Parliament has formal lobbying rules (which it is presently consulting on), but few countries have statutory rules governing lobbying. Those that do include the US, Germany, France, Canada and Poland.
US lobbying law exemplifies some of the issues. Legislation in that country often defines lobbying as any effort to influence government decision-making. As a result, laws typically regulate the activities of in-house public affairs employees as well as dedicated lobbyists and lobbying firms. They sometimes apply to individuals who work in business areas that hold government contracts or otherwise seek to do business with government entities.
US legislation frequently requires relevant individuals and entities to register with the appropriate government regulator before engaging in more than minimal lobbying, and, once registered, require registrants to make regular public disclosures describing their lobbying activities, including details of the public officials with whom they have had contact and the amount they have spent on lobbying activities.
US laws also regularly subject lobbyists to significant activity and compensation restrictions, with many US states and cities prohibiting registered lobbyists from receiving incentive compensation for their lobbying activities and restricting severely the ability of lobbyists and their employers to entertain public officials. Entities with more than minimal interaction with government can require a compliance staff to make several hundred lobbying-related filings a year.
Introducing his bill, Cryer spoke of restricting the “heavy artillery” of big business. While the Government’s proposals will probably take a different tack, law firms that regularly do business with government will need to pay close attention to the impact on both their clients’ and their own dealings with Whitehall that a new lobbying law may entail.
Jonathan Hitchin, litigation partner (London) and Charles Borden, regulatory partner (Washington DC), Allen & Overy