Enterprise Bill

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Miss Johnson: On a point of information, Mr. Conway. A letter being circulated to you, to Mr. Beard and to all members of the Committee is now available on the Table. It explains an amendment to part 8 and a consequential amendment and it also provides the lists requested earlier about domestic and community infringements under clause 203. The information is available in good time for future debate.

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To return to matters in hand, I was asked why we were going down this particular route. I hope that I have already explained it to some extent, but I highlight what the hon. Member for Twickenham said about the importance of advocacy generally and its successful use on behalf of consumers.

The actions in the clause are not exactly the same as US class actions. One of the important differences is that class actions are allowed in the US on behalf of an amorphous and unnamed group of individuals, but consumer claims for damages will be allowed here only on behalf of named, identified consumers—a significant difference—and only with their consent. US class actions are brought in the ordinary courts, but here they will be brought before the CAT only following a decision of the OFT or the European Commission that established a breach of competition law.

These are clearly targeted measures, which exist to help the victims of anti-competitive behaviour. As several hon. Members have explained, it can be difficult for victims to bring effective damages action themselves, so we have every reason to put the new measure in place. It will strengthen the hand of consumers who have been damaged in the ways described.

In response to Conservative Members' other comments, I am as puzzled as the hon. Member for Twickenham about the strength of the CBI's feelings. Its concerns are greatly overstated. Damages will be calculated in line with principles used in the courts. The competition and related expertise of members of the CAT will enable them to assess damage caused by anti-competitive activity much more effectively than other courts. Nine members already have significant legal experience and the chairman has already presided over courts at high level. The Bill allows the appointment of members with competition or any other relevant legal expertise, so we expect the tribunals to be appropriately provided for in expertise terms. However, the basis of decisions about the appropriate level of damages will not fall outside the principles used in other courts.

In the light of what I have said about the designation process and my further reassurance that claims cannot be brought by bodies engaged in ambulance chasing or other vexatious activity, but only at the end of process through which damage to consumers will have been confirmed, I hope that Opposition Members will understand why the clause should stand part of the Bill.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.

Clause 18

Findings of infringements

4.15 pm

Mr. Waterson: I beg to move amendment No. 60, in page 9, leave out line 33.

The Chairman: With this it will be convenient to take amendment No. 61, in page 9, leave out line 34.

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Mr. Waterson: As a result of the European Commission's plans to decentralise enforcement of the EU competition rules, the OFT will be entitled to apply articles 81(1) and 82 of the treaty. As a matter of law—I am open to correction by the Minister—that is not currently the case. A similar argument follows for amendment No. 61. The OFT is not currently allowed to apply article 82. That may change in future, but it seems previous to change the position in the clause.

Miss Johnson: The amendments seek to prevent decisions relating to breaches of articles 81(1) and 82 of the EU treaty from being binding on the courts for the purpose of damages claims. However, decisions relating to breaches of the chapter 1 and chapter 2 prohibitions of the Competition Act 1998 would remain binding for the purposes of such claims. The OFT has powers to apply articles 81 and 82 in some areas—for example, aviation and maritime transport—under the EC Competition Law (Articles 84 and 85) Enforcement Regulations 2001.

The amendments would create an unbalanced system in relation to damages claims, whereby some findings of infringements are binding but others are not. The streamlined court procedure created by the clause would not be available to consumers harmed by anti-competitive behaviour where the decision establishing the breach had been taken under EC competition law. That could increase the costs of such consumers bringing a claim for damages compared with the costs of those bringing a similar claim in respect of a breach of UK competition law. Two sets of consumers harmed by similar illegal activity would therefore be subject to different procedures in the courts—one more lengthy and hence more costly than the other. I am sure that that is not what the hon. Member for Eastbourne wants and it is not the fair and transparent system that we would all want. Whatever the thinking of the hon. Member for Eastbourne on the amendments, I hope that I have persuaded him that they should be withdrawn.

Mr. Waterson: I am happy to accept what the Minister says. I will have another look at the matter, but at the moment I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Djanogly: I beg to move amendment No. 62, in page 10, line 20, at end insert—

    '( ) In section 46(3) of the 1998 Act, there is inserted after (h)—

    ''(i) to issue a notice under section 26 requiring the production of specified documents or information,

    (j) to investigate premises without a warrant under section 27,

    (k) to investigate premises with a warrant under section 28,

    (l) not to investigate a complaint under Chapter I or II,

    (m) not to grant interim measures under section 35.''.'.

Our discussions on the amendments this afternoon have related to the role of the Competition Appeal Tribunal. This amendment also does so, as was suggested by the joint working party of the Bar and the Law Society on competition law. The proposal is that the issues that could involve appeals to the CAT should be increased to include those listed in the

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amendment. The items are individually contained in other pieces of legislation and, the Committee will be glad to hear, I do not propose to go through them. However, hon. Members should note that in none of them is currently possible to appeal to what is currently the Competition Commission appeal tribunal—it will become the CAT—and each has a significant impact on the party concerned and can be challenged only by way of judicial review.

The Government seem to be working from the position that competition matters should be dealt with by institutions that are used to dealing with them. Indeed, that is the purpose of the CAT. Therefore, I commend the amendment, with the intention that the listed decisions should go to the CAT rather than the courts.

Miss Johnson: As the hon. Gentleman said, the amendment would add to the list of decisions by the OFT that could involve appeal to the Competition Appeal Tribunal under the Competition Act 1998. Section 46 of that Act lists a number of decisions taken by the OFT that can be the subject of a full appeal to the tribunal. Further decisions of the OFT may be added by order under section 46(3) and, in the case of third-party appeals, under section 47(1). With one exception, we do not propose to add any new category of appealable decision, and I shall explain why.

The exception is the category covered by paragraph (m) of the amendment, which the amendment would add to section 46(3). I agree that decisions not to grant interim measures should be appealable. We stated our intention to implement that change in the July White Paper, and I am happy to confirm that we will introduce the relevant secondary legislation as soon as is practicable. However, it is unnecessary to make the addition in the Bill.

I am not minded to take action on the other proposals in the amendment. The list of appealable decisions in section 46(3) consists of substantive decisions by the OFT, requiring an analysis of the merits of the case and, with only one exception, taken at the conclusion of a procedure or investigation. The sole exception is the current right to appeal against interim measures taken under section 35, which as I said we are prepared to extend by order to include decisions not to grant interim measures. It is neither appropriate nor necessary to provide for a full right of appeal on any intermediate, investigatory step in the OFT's proceedings, and the other four categories include issues that are still in mid-process. I remind the Committee that parties are not without an avenue of judicial redress in any of the circumstances stipulated in the amendment. The option of applying for judicial review in the High Court will always be available, and in that case the court will have full powers to impose remedies such as injunctions.

With that explanation of the element that we are picking up in the amendment and the reasons why we do not want to pick up the other listed items, I hope that the hon. Gentleman will feel able to withdraw his amendment.

Mr. Djanogly: I thank the Under-Secretary for that explanation, although I am not much wiser about why

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the listed examples will not be included at this stage. She mentioned that judicial review is possible, but I thought that the idea was to move towards a speedier and more cost-effective way of appealing decisions. I do not understand why those issues cannot be included for the CAT to review.

Miss Johnson: My understanding is that there is a difference in the four items. There is no completed process, so no decision is taken, as such. The point made under proposed paragraph (m) warrants being regarded as in a different category, which is why I make the distinction. Hon. Members may rest assured that we intend to take up that point and we shall add it to the list.

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