CTPS 13.5 Duties of critical third parties

When a critical third party appoints a skilled person, the critical third party must, in a contract with that person:

1. (1)

   require and permit the skilled person during and after the course of their appointment:

   1. (a)

      to cooperate with the regulators in connection with the discharge of their oversight functions; and

   2. (b)

      to communicate to the regulators information on, or the skilled person’s opinion on, matters of which they have, or had, become aware in their capacity as a skilled person reporting on the critical third party in the following circumstances:

      1. (i)

         the skilled person reasonably believes that the information on, or their opinion on, matters for which they were appointed may be of material significance to the regulators in determining whether the critical third party concerned complies with and will continue to comply with the CTP duties; or

      2. (ii)

         the skilled person reasonably believes that the critical third party is not, may not be or may cease to be a going concern;

2. (2)

   require the skilled person to prepare a report or collect or update information, as notified to the critical third party by the regulator that has required such report, collection or updating within the time specified by the regulator; and

3. (3)

   waive any contractual or other duty of confidentiality owed by the skilled person to the critical third party which might limit the provision of information or opinion by that skilled person to the regulators in accordance with (1) or (2).

A critical third party must ensure that the contract it makes with the skilled person under CTPS 13.5.1R requires and permits the skilled person to provide the following to the regulators if requested to do so:

1. (1)

   interim reports;

2. (2)

   source data, documents and working papers;

3. (3)

   copies of any draft reports given to the critical third party; and

4. (4)

   specific information about the planning and progress of the work to be undertaken (which may include project plans, progress reports including percentage of work completed, details of time spent, costs to date, and details of any significant findings and conclusions).

A critical third party must ensure that the contract required by CTPS 13.5.1R is:

1. (1)

   governed by the laws of a part of the UK;

2. (2)

   in writing, and:

   1. (a)

      expressly provides that the regulators have a right to enforce the provisions included in the contract under CTPS 13.5.1R, CTPS 13.5.2R and CTPS 13.5.3R(2)(b) to (d);

   2. (b)

      expressly provides that, in proceedings brought by the regulators for the enforcement of those provisions, the skilled person is not to have available by way of defence, set-off or counterclaim any matter that is not relevant to those provisions;

   3. (c)

      if the contract includes an arbitration agreement, expressly provides that the regulators are not, in exercising the right in (a), to be treated as a party to, or bound by, the arbitration agreement; and

   4. (d)

      expressly provides that the provisions included in the contract under CTPS 13.5.1R, CTPS 13.5.2R and CTPS 13.5.3R(2) are irrevocable and may not be varied or rescinded without the regulators’ consent; and

3. (3)

   not varied or rescinded in such a way as to extinguish or alter the provisions referred to in (2)(d).

If a critical third party appoints a skilled person, that critical third party must give the regulators sufficient and timely information about the cost of the skilled person’s report or collection or updating of information, including both an initial estimate of the cost as well as the cost of the completed report, collection or updating of information.

When a critical third party appoints a skilled person, a critical third party must take reasonable steps to ensure that the skilled person delivers a report or collects or updates information in accordance with the terms of the skilled person’s appointment.

A critical third party must provide all reasonable assistance to a skilled person appointed to provide a report under section 166 (Reports by skilled persons) of the Act or to collect or update information under section 166A (Appointment of skilled person to collect and update information) of the Act (as applied by section 312P of the Act) and take reasonable steps to ensure that its employees and agents also provide all reasonable assistance to that skilled person.