Enterprise Bill

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Mr. Djanogly: I concur with both my hon. Friends. There will clearly be problems in working out the constitution of the appeal court and the court of first instance.

I would like to discuss the question of the length of the appointment. Eight years has been suggested. I am not entirely sure that that is the right period, or that it will encourage the best people for the job to come forward. As my hon. Friend the Member for South Cambridgeshire just mentioned, and bearing in mind his accurate description of how the system will work, those who come forward will mainly be lawyers. To that extent, one wonders how many barristers will want to take eight years out from their more lucrative practice rather than do what they would normally: become a judge and, in effect, have a permanent job. Eight years seems to be an unusual period for which to attract people to leave their professions, if they are then expected to go back to them. If it is expected that they will not go back to their professions, people of an older age, who might, although not inevitably, be the best people for the job, are likely to be attracted. If they are the best people for the job, it is likely that they are judges anyway. I should like to hear the Under-Secretary's comments on that.

Even if an eight-year period were to attract the right sort of person, I am not entirely convinced that, as other areas of law go, such a period would be best practice. Company directors, under the Companies Act, have a maximum fixed tenure of five years, but best practice recommendations are now normally for one year. The question is how to view such appointments. Will people stay for the long term, or come in to give their experience and then leave, as happens with non-executive directors and, to a greater extent, the Takeover Panel, for which the average stay for those coming from the private sector is between one and three years? I should like to hear the Under-Secretary's views on whether the proposal is likely to attract the best people and whether it fits established best practice in other areas.

Miss Johnson: As Opposition Members have recognised, the Competition Appeal Tribunal will be able to hear appeals against decisions made by the Director General of Fair Trading in Competition Act cases. In addition, it will have new functions, and it is probably worth my while running through them.

The Competition Appeal Tribunal will be able to hear claims for damages in competition cases where a breach of competition law has already been established. It will hear applications for the review of decisions taken by the competition authorities in

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market investigations and merger cases. It will hear appeals from parties that have been fined by the OFT or the Competition Commission for late provision or non-provision of information.

It is because of those new duties, which include the scrutiny of decisions made by the Competition Commission, that it is so important for the CAT to be independent of the commission. There must be no question of a lack of impartiality on its part. Opposition Members have recognised that. To achieve that impartiality, the existing membership of the Competition Commission will be divided into two distinct groups—one for appeals and one for all the other activities that I mentioned a moment ago.

Members of the appeal tribunal will no longer be members of the Competition Commission, and will work exclusively on appeals, with no involvement in Competition Commission investigations. That is a change from the current situation, under which it is possible to be a member of a Competition Commission reporting panel and of the appeal panel. The change will provide a considerable degree of separation, which I hope reassures Opposition Members that we have in mind, and have addressed, similar concerns to theirs.

On the point made by the hon. Member for Huntingdon, the CAT appointments will be on a part-time basis. Its members will not sit full-time, so they can continue with their day jobs. His point about what it is possible to get lawyers to do is counterbalanced by the presence of many lawyers in this House, who could probably be earning greater sums of money outside it. [Interruption.] The hon. Member for Eastbourne may deny that, but I think that we are all clear that my suggestion is probably correct.

The damages role is to provide a quicker, more accessible route for damages claims. So far, there have been no successful claims in the courts in 30 years, so it is important to accept, bearing in mind the points made by the hon. Member for Eastbourne, that the courts are not really working in that regard. It would not make sense to have provision on the existing basis because that has not facilitated any damages claims being dealt with.

Mr. Waterson: I nearly missed the Under-Secretary's leap in logic. The fact that claims have not been brought for 30 years does not necessarily mean that that is the courts' fault. Perhaps there was no merit to the claims. The courts' job is to hear, within reason, whatever is put in front of them. Surely the Under-Secretary is not suggesting that the courts have somehow discouraged those claims. Is she suggesting the opposite? Having conceded that these chaps will be divided into two groups—the appeal court and the first instance court—will the first instance court be trying to drum up trade?

Miss Johnson: I made no such suggestion. I said that it is important to provide a quicker, more accessible route. It is not the court's or the existing tribunal's problem that no claims for damages were made during the past 30 years. However, there may be aspects of the

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process that make it unattractive to people to bring such claims. We are determined to make it easier for people to bring claims that can be dealt with efficiently through a more accessible system.

The CAT will have a highly qualified president and a legally qualified chairman, and the ordinary members will have competition expertise. There will be detailed rules of procedure, which will be quicker than the courts and more innovative. We hope that a strong track record will be built up in all areas of responsibility. The Lord Chancellor will run a competition for new appointees to serve as chairman with a view to identifying a panel of chairmen in time for commencement of the new regime.

Mr. Lansley: The Under-Secretary seems to have passed over the points that I made. She either did not understand them or, having understood them, has not addressed them. My point was that, in addition, the Competition Appeal Tribunal may hear appeals against decisions made by the Secretary of State, not just by the Competition Commission. Does she agree that in those circumstances logic demands that the panel for such cases should consist of members appointed by the Lord Chancellor and not by the Secretary of State?

Miss Johnson: I was coming to that point and I assure the hon. Gentleman that I shall reflect on it. The fact is that there will be a competition for appointees. It will be open to applications from all suitably qualified individuals, and we hope that it will attract candidates of the highest calibre, perhaps including some members of the judiciary. The CAT is a key pillar of the world-class competition regime that we are creating in the Bill. The CAT's rapid and expert involvement in assessing decisions of the competition authorities will ensure the integrity of the whole system. I urge hon. Members not to support the amendment but to support the clause unamended.

Mr. Waterson: I do not want to take up too much time--[Interruption.] Two important points arose in the Under-Secretary's comments, although with respect to her, it was rather like drawing teeth. First, there will be two types of people on the tribunal: the appeal people and the first instance people. Presumably, they will not mix--or mess together as barristers would say--or have any contact, and there may be Chinese walls to ensure that. Secondly, there is a possibility—even a likelihood—that those on the appeal side will have served as judges. So why not allow the judiciary to deal with the matter in the ordinary way? Those two points are new.

Miss Johnson: I said when commenting on appointments that people could end up sitting on either side of the division that we envisage—and not as the hon. Gentleman said. I can only reiterate that we believe that the process will be shorter and quicker, and meet the requirements for separation and

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independence. The right degree of expertise will be available to the Competition Appeal Tribunal, whether it considers appeals or other matters.

Question put and agreed to.

Clause 12 ordered to stand part of the Bill.

Schedule 2

The Competition Appeal Tribunal

Mr. Waterson: I beg to move amendment No. 48, in page 184, line 29, leave out

    'or any other relevant law and practice'

and insert

    'or commercial competition economics or business experience'.

I am happy to move this amendment in the time available. It is important, and the CBI and others would agree. Given the specialist nature of the tribunal, only those with in-depth knowledge and expertise of competition law or business more generally should be entitled to adjudicate in competition law disputes. That is in line with the Government's commitment to business representation on other recently established bodies such as the Monetary Policy Committee of the Bank of England and the learning and skills councils. I hope that this modest amendment will find favour with the Under-Secretary.

Mr. Lansley: I agree with my hon. Friend, but I would not necessarily delete

    ''other relevant law and practice''.

As he will have deduced from my earlier remarks, I believe that some knowledge of administrative law relating to judicial review could be relevant for the new purposes of the tribunal—

It being Seven o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 June 2001] and the Order of the Committee [16 April 2002], to put forthwith the Question already proposed from the Chair.

Question put and negatived.

The Chairman then proceeded to put forthwith the Questions necessary to dispose of the business to be concluded at that time.

Amendment made: No. 361, in page 185, line 24, leave out:

    'with the approval of the Treasury'.—[Miss Johnson.]

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