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'(5A) The Competition Appeal Tribunal may confirm or set aside the decision which is the subject of the appeal and may—
(a) remit the matter to the OFT, the Secretary of State or the Competition Commission as the case might be ("the original decision maker");
(b) cancel or vary any conditions or obligations imposed by the original decision maker;
(c) give such directions or take such steps as the original decision maker could have made;
(d) make any other decision which the original decision maker could have made.'.
Government amendments Nos. 256, 257, 296 and 297.
Mr. Lansley: This group of amendments relates to the Competition Appeal Tribunal. There are 29 Government amendments, which I am sure the Minister will tell us about in due course. I want to speak to amendments Nos. 147 and 148, tabled in my name, and I shall also refer to our amendments Nos. 311 to 314 and 315.
The purpose of amendment No. 147 is to change the responsibility for the appointment of ordinary members of the Competition Appeal Tribunal's panel. Hon. Members will recall that the tribunal was established under the Competition Act 1998, and consists of a president, a panel of chairmen and ordinary members. The ordinary members are appointed by the Secretary of State, as distinct from the Lord Chancellor, who is responsible for the appointment of the president and the panel of chairmen; that is carried forward into this Bill. The president and the panel of chairmen have responsibility not only for having competition law expertise but for ensuring that the tribunal behaves in a way that is consistent with the way in which a court would consider similar decisions.
As the Government have constructed the legislation, the Competition Appeal Tribunal indeed has to behave like a court in some respects, in that it applies the principles of judicial review to appeals that are made to it. It is, therefore, necessary for it to have legal expertise. For that reason, if for no other, appointment by the Lord Chancellor is to be sought after.
There is, however, a particular reason why I propose that the Lord Chancellor should also be responsible for appointing the ordinary members. Under the Competition Act, it was correctly felt that the ordinary members could be appointed by the Secretary of State because they would bring the additional expertise necessary to examine appeals on their merits, on issues relating to anti-competitive agreements or abuses of a dominant position. The cases brought before the tribunal demonstrate that experience not only of competition law but of economic analysis of competition is necessary to reach decisions on those issues. I shall come to appropriate expertise when I speak to amendment No. 148.
Other things being equal, the Secretary of State could continue to appoint the ordinary members of the tribunal, in relation to decisions on the Competition Act, without any problems. That is because the decisions that are appealable to the Competition Appeal Tribunal under the Competition Act come from decisions made by the Office of Fair Trading. Under the Bill, however, the decisions will not necessarily be made by the Office of Fair Trading or the Competition Commission. In certain circumstances, they will be made by the Secretary of State. Of course, under the Fair Trading Act 1973, such decisions used to be appealable to the High Court, so a judge would be responsible for assessing judicial review decisions made by the Secretary of State. However, the Government propose in the Bill that decisions made on judicial review grounds be appealed to a body whose members are appointed by the Secretary of State.
My primary contention in speaking to amendment No. 147 is that that is an unacceptable infringement of the proper independence of the tribunal in exercising its function. Indeed, such an independent and impartial tribunal is required by article 6 of the European convention on human rights. However, we could arrive at circumstances in which a decision made by the Secretary of State is appealed on judicial review grounds, but in which one of the members of the body to which it is referred is about to be reappointed—or not—by the Secretary of State. By the simple expedient of making the Lord Chancellor rather than the Secretary of State
responsible for such appointments, we can escape that problem, so I commend the amendment to the Minister's consideration.Amendment No. 148 is designed to extend the description of the experience that ordinary members of the Competition Appeal Tribunal should have. My reason for tabling the amendment is that it is clear that the tribunal will not only be asked to consider judicial review decisions, but be used as a body under sector-specific legislation. For those who care to look, schedule 9 gives a range of examples in which that arrangement will apply. The decisions that will be made by sector regulators, especially in respect of licence conditions, are not simply legal decisions, but relevant to economic analysis and require business experience.
That point was further brought home to me when it became clear that in the draft Communications Bill that is being scrutinised elsewhere—I am a member of its scrutiny committee—the Government intend that the Competition Appeal Tribunal be the body to which decisions made by the Secretary of State or the Office of Communications will be appealed. Those decisions will be substantive and not made simply on a judicial review basis, so general legal expertise and competition law expertise will not be sufficient for the panel in dealing with them.
To make the Bill more effective in terms of the availability of opportunities for appeals to be heard in respect of sector regulators' decisions on licence conditions, my second submission on amendment No. 148 is that the Minister should think seriously about extending the sort of business and economic analysis experience that panel members of the Competition Appeal Tribunal can bring to bear.
I want briefly to refer to amendments Nos. 311 to 314. The amendments deal with clause 17, which amends the Competition Act, and are intended to ensure that the question whether a claim for damages might be brought to the tribunal is determined not by whether the OFT has decided
- "that . . . the prohibition has been infringed",
4.15 pm
As I understand it—I apologise if I have misunderstood the joint working party—the purpose of the provisions as things stand is that a court can entertain an application for damages by a private party in respect of infringements or argued infringements of the anti-competitive agreements or in relation to prohibitions on abuse of a dominant position. The current structure of the Bill would mean that where the OFT has decided that such an infringement existed, an application for an award of damages would go to the Competition Appeal Tribunal. However, the concern is that those who wish to argue that there is an infringement by which harm has arisen and for which damages may be claimed could still go to the court to make a private claim.
For my purposes, I will be made comfortable if the Minister can assure me that it would not be possible for a further claim to be made when the OFT decides that such
an infringement has not been made. If it is possible for the matter to be taken to the court when the OFT has decided that there is no infringement and has not proceeded, that will be an additional jeopardy. It is that jeopardy that the amendments are designed to remove, so that the issue rests with the competition authorities and the Competition Appeal Tribunal, as I think the Government would have intended.Amendment No. 315 is intended to test the issue. Its purpose, which is to make decisions on merger references appealable to the Competition Appeal Tribunal on their merits, seems on the face of it to be a step too far. However, it is important to test the Minister out, especially as I do not think that that happened in quite the same terms in Committee. The question is whether the decision by the OFT on making a merger reference is sufficient for the subsequent investigation by the Competition Commission, which is usually the determining body in this regard, to be regarded as a full appeal by an independent and impartial tribunal. I think that the answer to that question is yes in terms of mergers, but for reasons that I shall come to in speaking to a later group of amendments, I think the answer is no in so far as market investigations are concerned.
If the Minister can further assure us that the Competition Commission is the appeal body for such purposes—the independent and impartial tribunal that is needed for appeal against a substantive decision on a merger reference by the OFT—we will be sure that we have the two-stage process that is necessary to give proper reassurance to those who are affected by competition decisions.
Dr. Vincent Cable (Twickenham): I should like to say a few words in support of proposals that seem sensible and constructive. I am not a lawyer either and I take my cue from the Law Society, but it seems to me that some perfectly justifiable points are being raised. In particular, I refer to amendment No. 315. I think that the question that is being asked—it has been put slightly differently from the way in which the hon. Member for South Cambridgeshire (Mr. Lansley) has put it—is about why there is a difference between the ways in which the Competition Act and the Bill work. As I understand it, the Competition Act allows a full and substantive appeal to be made on the basis of the merits involved, but the judicial review process for which the Bill provides is much more truncated. It is not obvious why the two matters should be dealt with somewhat differently, and the amendment is designed to provide not only a stronger process of appeal, but some consistency between the two measures. It would be useful to hear from the Minister the reasons why that difference is being maintained.
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