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30 Oct 2002 : Column 915—continued

New Clause

Lords amendment: No. 7, after clause 16, to insert the following new clause—Tribunal: regulations—

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Miss Melanie Johnson: I beg to move, That this House disagrees with the Lords in the said amendment.

Madam Deputy Speaker : With this it will be convenient to take Government amendment (a) in lieu, Lords amendments Nos. 8 to 17, 74, 124, 189 to 209 and the Government motion to disagree thereto and Government amendment (a) in lieu, and Lords amendment No. 210.

Miss Johnson: Lords amendment No. 7 would give the Secretary of State and the Lord Chancellor the power to make regulations allowing the courts to transfer to the Competition Appeal Tribunal issues arising in civil proceedings that require a determination of whether there has been an infringement of competition law.

The main argument made for the amendment in another place was that, following the implementation of the so-called modernisation project, which is likely during 2004, the ordinary courts will be given the power to apply article 81 of the EC treaty in full. They may therefore have to deal with significantly more civil cases raising complex competition law issues. The argument was that the courts were not equipped to deal effectively with competition law points, which often involve complex economic evidence.

Article 81(3) issues are thought to be particularly difficult, requiring an assessment of whether countervailing benefits arising from an anti-competitive agreement are sufficient to legitimise it. The Competition Appeal Tribunal, an expert body set up to hear appeals against decisions of the OFT on such matters, was perceived as better qualified to determine these matters.

The Government argued in another place that it was the role of the courts to build up the expertise in competition issues needed to handle competition matters arising in civil proceedings. There are practical ways in which the expertise of judges can be enhanced and, if necessary, certain judges could be nominated as specialists in competition law. The courts will also be assisted when necessary by the Office of Fair Trading and the European Commission. Under the modernisation regulation, the Commission will be empowered to submit written observations to the national courts on issues relating to the application of articles 81 and 82, and, when we implement modernisation, we intend to provide a similar power for

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the OFT. Both bodies, with the permission of the court in question, will also be able to submit oral observations as expert witnesses.

Our current belief, therefore, is that the courts will be able to cope with the consequences of modernisation without the need for powers to transfer issues arising in civil proceedings to the Competition Appeal Tribunal. However, we recognise the strength of feeling in another place that an explicit power should be provided in the Bill to allow regulations to be made allowing the courts to transfer competition law matters to the Competition Appeal Tribunal for determination by that body. If the proponents of the amendment are right, and the courts are not able to handle competition issues effectively, there will be specific powers to allow matters to be transferred. If the Government are right, the powers need never be used. On reflection, we now agree that an amendment along the lines of Lords amendment No. 7 would be a prudent piece of future proofing, and should be made.

However, there are some technical difficulties with Lords amendment No. 7 as it is currently drafted, which is why we propose to replace it and Lords amendment No. 209 with our amendments in lieu. I would like to highlight the main changes. First, the redraft provides that the Lord Chancellor alone, rather than jointly with the Secretary of State, would exercise the power to make regulations. There is no particular significance to that change—it is simply customary for the Lord Chancellor to have sole responsibility for such matters. Secondly, the amendment in lieu not only refers to the regulation-making power but makes it clear that the rules of court may be made in connection with a transfer. Thirdly, the amendment removes the power for the Lord Chancellor to appoint judges directly to the key positions on the Competition Appeal Tribunal. In another place, it was accepted that this power was not needed. The power exists already, but it would cut across the policy of the Lord Chancellor's Department that all appointments to tribunals should be made through open competition.

The second amendment in lieu, to Lords amendment No. 209, makes a corresponding adjustment to the scope of the tribunal rules so that they may make provision in connection with the transfer of proceedings from a court. Lords amendment No. 209, which was a Government amendment, is superseded by the amendment in lieu.

I would now like to turn to the remaining amendments in this group: amendments Nos. 8 to 17, 74, 124, 189 to 208 and 210. That group of Government amendments reflects work that was done in the other place to improve the drafting of part 2 of the Bill and related provisions. Part 2 is concerned with the establishment of the Competition Appeal Tribunal and the allocation to it of new powers such as the ability to hear damages claims arising from infringements of competition law. It also provides for such claims to be brought on behalf of named consumers.

The most important changes here are the technical improvements to clauses 17 and 18 of the Bill. Amendment No. 8, for example, makes it clear that the scope of a damages claim made before the tribunal is to be the same as that made before a court. It also makes it clear that the damages or other sums that may be

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awarded include all monetary awards that could be awarded by a court in respect of the relevant infringement. Amendment No. 9 ensures, among other things, that an infringement of competition law has to be established before a group claim can be brought, and that the right to bring a group claim does not affect the right to bring a claim before the court.

Amendment No. 11, too, is worth highlighting. It enables the Competition Appeals Tribunal to order the defendant to pay any monetary remedies to the body bringing the claim for onward distribution to the relevant individuals, as long as all of them consent. The damages will still be awarded to the individuals rather than the representative body, which will be acting on their behalf in receiving the amounts due.

Clause 19 adds a new section 58A to the Competition Act 1998 to provide that infringement findings—for example an OFT decision that a chapter 1 prohibition has been breached—will be binding in the courts when the courts are considering monetary claims. Amendment No. 17, however, clarifies that the new section does not apply in relation to infringement decisions made before the commencement of the section. It is important, for business certainty reasons, that there should be no retrospective application of the new provisions.

Amendments Nos. 74, 124 and 205 remove the reference to the period for bringing an appeal to the Competition Appeal Tribunal following a decision in a merger or market investigation. It is still our intention to have firm, fixed time limits, but these timings will now be set by the tribunal's rules, on which we are currently consulting. Part of that consultation seeks views on whether those periods should be one month for a merger and six weeks for a market. We have not yet come to a view on the appropriate length of either period. However, as we may end up changing these periods in the tribunal's rules, we decided that it would be better to remove the reference to three months from the Bill.

The remaining amendments in this group are consequential on the changes to clauses 17 or 18 or are minor and technical improvements to this part of the Bill. I do not propose to go through them in detail, but I invite the House to agree that they should be made, and I am happy to address them should hon. Members so wish.

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