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'(7) In exercising the powers conferred by subsection (6)(a)(ii) above, the Director shall afford the undertaking under investigation a reasonable opportunity for its legal or other representative to be present when the employee or officer is required to provide an explanation of the document.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 77, in clause 66, page 37, line 10, at end insert--

'(5A) In exercising the powers conferred by subsection (5)(a)(ii) above, the Director shall afford the person notified a reasonable opportunity for his legal or other representative to be present when the employee or officer is required to provide an explanation of the document.'.

Mr. Breed: I do not want to detain the House too long at this late hour. It is widely accepted that the powers proposed in the Bill are extensive. We ought, therefore, to consider for a few moments amendments Nos. 76 and 77, which seek to introduce a couple of safeguards that are vital to the protection of companies that may find themselves under investigation. Although I fully accept that powers currently available to the director general are insufficient and that the Government feel, as I do, that they should be strengthened, it is important to ensure that companies receive fair treatment when they are under investigation and subject to the Bill's extensive powers.

Powers to question employees and officers both past and present of any company are critical to the effective enforcement of action, particularly if a company has been committing an infringement over a long time. Although it is not disputed that it is appropriate that there should be power to seek information from employees and officers who have since left the company, it is surely sensible and in a spirit of natural justice to afford a company at least a brief--I emphasise brief--opportunity to comment on the role of any employee or officer who is to be questioned and on the appropriateness of so doing, and allow a company to have a representative present at any interview.

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The proposed powers are extraordinarily extensive in their force and reach. Before the director or his or her staff exercise any investigatory powers, they should be balanced by some safeguards. Let us consider potential ex-employees or officers who may be interviewed in the process of an investigation. First, an ex-employee or officer may have been made redundant or been dismissed and may have a grudge or be prejudiced against the company personally or through sympathy for a former colleague. Secondly, an ex-employee may be working for a competitor and under contractual agreements that prevent them from disclosing information to anyone. They would find it difficult under such questioning.

Thirdly, an ex-employee or officer may wish not to answer any questions because they feel that it may incriminate them or someone else, or because they are not certain of information. That should not be seen automatically as casting any doubt on the activities or motives of the company under investigation. Finally, an ex-employee or officer may genuinely have forgotten--or at least not remembered well enough--all the facts or information for which they are asked, but may feel obliged to give opinions rather than facts and knowledge.

Those are practical examples. I recognise that the Bill provides a right of challenge, albeit only at the appellant stage, which is rather too late. I also recognise--[Interruption.]

Mr. Deputy Speaker: Order. There is too much background conversation in the House; I cannot hear the debate properly.

Mr. Breed: I recognise that speed is important in such investigations. The Government have made it clear on several occasions that they want the investigations to progress and not be bogged down. In some cases, however, it might be wise to allow a company a brief opportunity to comment and to have a representative present, not to influence, control or make any decision on whether the investigation should go ahead but simply to help avoid the time and expense of future challenges, which can certainly arise on appeal.

If the Government accepted the amendments, they would slightly redress the balance on behalf of companies that find themselves under the significant powers of the investigations, which are heavy and extensive. If the Bill proceeds unamended, companies may well find that those powers are so extensive as to be difficult for them to comply with--even if they want to.

Mr. Nigel Griffiths: I have listened carefully to the speech of the hon. Member for South-East Cornwall (Mr. Breed) on a matter to which we have given considerable thought. I hope that he may consider withdrawing the amendment in the light of assurances that I can give him.

The matter of legal advice being available during an investigation has arisen in various ways and has been debated at length in this House and the other place. In relation to clause 27, the Government gave an assurance in Committee that the right to legal advice was an important matter and would be covered by the director's rules under clause 50. Those rules are subject to the Secretary of State's approval and annulment by vote of either House. The amendment, if I have understood it

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correctly, is rather different. Investigations under clause 26, and under the Fair Trading Act 1973 as strengthened by clause 66, are "off-site" in character--that is to say they will not involve entry to premises.

10.30 pm

The Office of Fair Trading expects generally to exercise those powers by correspondence and therefore will allow time for legal advice to be sought. If the powers are exercised by requiring the production of documents at a specified time and place, the employee or officer concerned could be accompanied by a legal adviser. The right of an employee or officer to be accompanied by a legal adviser should be dealt with in the director's rules, and I am happy to give that assurance.

Mr. Breed: I am happy with what the Minister has said so far, but I ask him to clarify one point. If the matter is conducted in correspondence with an ex-employee, will the company be advised that such correspondence is in operation?

Mr. Griffiths: In terms of the effectiveness of the investigation, it is for the director general to weigh up whether the employee is likely to be the subject of any undue pressure, but being always mindful that, with an established appeals procedure, any actions of the director general that are not considered to be within the competence of the new Act would give people some recourse to justice and review. It is clear that the director's rule will cover the issue of access to legal advice. I hope that, in the light of my explanation, the hon. Gentleman will feel able to withdraw the amendment. I am grateful to him for raising this important issue.

Mr. Breed: The Minister has addressed part of the problem. The amendments seek to ensure that companies have notice that ex-employees are to be approached, thus giving them the opportunity to comment early in the investigation on the appropriateness of the background information concerned with the employee, which would perhaps provide helpful information to the director general and staff anyway. However, I accept the Minister's assurances that the matters will be worked out only in practice as cases happen. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 7

The Competition Commission

Mr. Lansley: I beg to move amendment No. 49, in page 64, line 8, leave out from 'person' to end of line 16 and insert 'is--

(a) a puisne judge of the High Court;
(b) a judge of the Court of Session; or
(c) a judge of the Supreme Court of Northern Ireland,
and before appointing as a member of the appeal tribunal any person who holds the judicial office mentioned in paragraph (a), (b) or (c) he shall consult the Lord Chancellor, the President of the Court of Session or the Lord Chief Justice of Northern Ireland, as he considers appropriate.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 50, in page 64, leave out lines 19 and 20.

Mr. Lansley: The amendments work together in the sense that amendment No. 50 leaves out the requirement

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for consultation with the Lord Chancellor and other Law Officers, since that is incorporated into the proposed structure of amendment No. 49. The purpose of amendment No. 49 is to replace the requirement laid upon the Secretary of State in the existing paragraph 4 of schedule 7 to appoint someone with legal qualifications. It would make explicit that the person to be appointed was a High Court judge. In a similar debate in Committee, it was made clear that the Government intended that the person to be appointed would be not a High Court judge, but equivalent to a High Court judge.

The appeal panel will represent the Competition Commission in considering appeals against the decisions of the director general. It was certainly understood in Committee that the Government intended to be free to appoint to the panel members who had not only suitable legal qualifications, but the ability to assess the economic character of the judgments. Those who bring appeals will believe that it is in their interests regularly to go to the courts rather than to rest on the decisions of the panel if they feel that the panel does not have the necessary legal credibility to give robust judgments that are likely only in the most exceptional cases--such as where high principles are at stake--to be overturned by the courts in a further appeal. We were at pains to make that point in Committee, but I do not feel that it was sufficiently taken on board.

To ensure that the appeal panel functions in the best way, the panel and the president of the appeal tribunals should bring the maximum legal credibility to their judgments, but that will not be achieved if the president is appointed on the ground of his or her economic credibility. The director general and other members of the commission are likely to have economic credibility, but those who appeal against the director general's decisions must have sufficient faith in the legal credibility of the system not to make a further appeal or even to circumvent the procedure.

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