The courts have again emphasised that where a regulatory body is established by legislation with powers to regulate (e.g. the Financial Services Board), their decision to make regulations is an administrative decision that can be challenged in court.
Where the regulations are irrational, unconstitutional or contrary to law or made without proper public consultation they may be set aside by a court.
When a regulator makes regulations or imposes directives, rules or other formal requirements for an industry, these are administrative decisions that can be challenged if they are legally flawed.
The Private Security Industry Regulatory Authority, set up in terms of the Private Security Industry Regulation Act 2001, made regulations increasing the fees payable by security service providers. Although they called for comment by members of the industry, they ignored some important comments because they misunderstood their powers under the legislation. Their error of law was material and it affected the submissions they made to the Minister of Police who approved the regulations. They conveyed the wrong legal position to the Minister.
Therefore the court in Security Industry Alliance v Private Security Industry Regulatory Authority said that the Minister’s decision to pass the regulations was contaminated by the incorrect interpretation of the law and the fee increase was set aside.
When any regulator makes regulations or imposes directives, rules or other formal requirements for an industry, these are administrative decisions that can be challenged if they are legally flawed.
