Examination of Witnesses (Questions 60-79)
HIS HONOUR
JUDGE FYSH
QC SC, MR IAN
FLETCHER, MR
EDMUND QUILTY
AND MR
ANDREW LAYTON
28 JANUARY 2008
Q60 Chairman: Would the money buy
Northern Rock?
His Honour Judge Fysh: I can say
this as an ex-lawyer: you often have something like 20 Counsel
and lawyers involved from huge firms of solicitors.
Q61 Mr Boswell: What you are essentially
saying is that there are no quick fixes to this. If we change
the sponsoring department or we change the rules or we provide
you with two more administrative assistants or whatever it is,
because there is a residue of contested cases—the ones that
come before your Tribunal—there will always be this kind
of complication however attentive we are. There is no easy way
of waving a magic wand and making it easy for everyone.
His Honour Judge Fysh: Yes, and
it is because of our common law system. We cannot do without it.
We cross-examine, we have rules of evidence, of disclosure and
all this kind of thing; it takes time. The disclosure documents,
the files, were about two metres high alone.
Q62 Mr Boswell: On cross-examination
you make notes.
His Honour Judge Fysh: Yes, days'
worth.
Q63 Mr Boswell: Rather like our oral
sessions it becomes clearer with all the submissions we have had.
His Honour Judge Fysh: I wish
I could agree with you. Sometimes after cross-examination a situation,
to me as Chairman at any rate, looks infinitely more complex.
Q64 Mr Cawsey: Can we move on to
the subject of lay members on the Tribunal. There have been a
lot of comments about that, about whether we should have them
and, if we do, where should they come from and on what basis should
they be appointed. Currently, how are lay members of the Tribunal
appointed?
His Honour Judge Fysh: I currently
only have two lay members left; there was a time when there were
more. I have a rear-admiral and a colonel from an artillery regiment.
They are what I would call good chaps; they are splendid people,
they say things like "I don't trust that witness". Otherwise
it is all the Chairman.
Q65 Chairman: I am looking at the
man next to you, Ian Fletcher, who does get paid for his job.
Mr Fletcher: Not much!
Q66 Chairman: What is your take on
the lay members?
Mr Fletcher: The current arrangements
for the Tribunal require us to have at least two lay members.
As Judge Fysh has said there are two remaining and their appointment
at the Tribunal comes to an end in September 2009. The current
rules of the Tribunal require us to have lay members so my first
question is that if we are going to have lay members how are we
going to have ones which are going to make a genuine and valid
contribution to the workings of the Tribunal? That in turn leads
us to think along the lines of what kind of background and expertise
and qualifications might be helpful to Judge Fysh and to the deputy
chairman of the Tribunal to discharge the Tribunal's functions
in the most expeditious way. That is how our thinking is going.
The formal appointing authority is the secretary of state for
the lay members just as the Lord Chancellor is the appointing
authority for the chairman and the deputy chairman. We will be
looking at the question as to whether lay members are likely to
continue and, if so, what are we going to do to ensure we have
the ones who make the best kind of contribution?
Q67 Mr Cawsey: In the memorandum
we received we were told that there was a recommendation in 1988
from the Monopolies and Mergers Commission that lay members should
be chosen for expertise that is relevant to the Copyright Tribunal.
Are you saying that that is what you intend to do with future
appointments or do you think you are doing that with the appointments
you have made? Or have they just been ignored and, if so, why?
Mr Fletcher: I cannot comment
on the appointments that have been made and I certainly would
not want anything that I say to cast any aspersions on the contribution
which the existing lay members have made. The 1988 Monopolies
Commission Report was made in the context of foreshadowing the
establishment of the Tribunal and in the context of looking in
particular at the monopoly position of PPL, it talked about the
lay members as kind of industry representatives. That is not what
I was saying. I think it is really a question that if we are going
to have lay members how can they make the best contribution through
having a technical background or qualifications which will assist
the Tribunal in getting through the case work that it has got.
His Honour Judge Fysh: I had this
experience as a barrister both here and in Singapore where I have
appeared before their Copyright Tribunal. The most useful lay
members are accountants. They are not members of the industry
and frankly, as a judge, I would not want members from the industry.
Q68 Chairman: What kind of accountants?
Forensic or non-forensic accountants?
His Honour Judge Fysh: Senior
partners in big firms who are used to commercial work. Also, for
example in Singapore, they had a wonderful lady who was head of
the Singapore National Library and she made a very interesting
contribution. That is the sort of lay member I would like. My
colonel and my admiral are wonderful but as far as I am concerned
they are pretty useless.
Q69 Mr Cawsey: What about the future
of lay members? Would it be abolition or would it be transparent
appointments on the basis of expertise?
His Honour Judge Fysh: The latter
in my view.
Mr Fletcher: I think that is where
I am coming to as well; I have yet to consult ministers on this.
The review that we did last year has opened up a pretty vigorous
debate about this. That is probably the answer I will be coming
too as well and, in terms of the kind of workload that the Tribunal
has at present, that feels about right.
Q70 Mr Boswell: Would it be open
to the Tribunal at an early stage—or you, as the Chairman
of it—to invite somebody to sit as an assessor or advisor
to you or to give expert evidence outside the request of the parties?
His Honour Judge Fysh: That would
be tempting but dangerous. I can see all kinds of problems arising,
for example appeal points. We do have an appeal to the High Court.
Q71 Mr Boswell: It would be possible
to provide an expert input, that is what you are rather anxious
to have.
His Honour Judge Fysh: That is
right.
Q72 Mr Boswell: I just want to touch
on orphan works. I would like to get a handle on how big a problem
this actually is in your experience. Who is really suffering from
this? Is it really frustrating what is presumably the idea of
copyright which is to provide a fair exchange and get material
out for use? Given that this is obviously a matter under debate
within government, when are we going to know which way it is going
to go?
Mr Quilty: On the first question,
is it frustrating the use of this, the representations we have
had certainly suggest that it is. Putting an economic figure on
that could be quite tricky I suspect. Clearly I think our view
is that there is a problem there to be addressed.
Q73 Mr Boswell: Where are those broadly
coming from?
Mr Quilty: You heard about them
in the earlier session.
Q74 Mr Boswell: That is consistent
with your experience.
Mr Quilty: Yes. As to the way
forward, this is an area where we have to work within the context
of the European perspective as well; the EU has an interest in
it. There is a lot of activity at the EU level at the moment;
there are working groups who are looking into this and looking
into how it might apply to different forms of copyright work.
I think our general feeling is that we should not jump on that
until we know with a bit more clarity which way the EU process
is going. My best guess perhaps is later this year, towards the
end of the year, we might have some feeling on that and decide
which way in the UK context we ought to move.
Q75 Mr Boswell: There is no directive
at the moment that directly bears on this, but there might be.
Mr Quilty: There might be action
at that level but exactly what that might be it is difficult to
say right now. I think in about a year or so it might be a good
time to be looking at it.
Mr Fletcher: It is worth saying
that copyright is in principle a matter of community competence
so we are looking at a community framework. If we did anything
nationally we would run the risk of it being overridden by later
community law so that is part of the thinking. To add colour to
what Mr Quilty has said, we are pretty aware that the French Government—who
have the Presidency in the second half of this year—want
to make intellectual property one of the things they make a bit
of a push on so that may help to get the orphan works question
further up the European agenda than might otherwise have been
the case.
Q76 Mr Boswell: Is it your impression
that there is a wide divergence in practice at the moment within
European Member States?
Mr Quilty: I am not sure actually.
I am two weeks into the job so I have to be a bit careful. I think
that is something that will come out of discussions and we may
be able to see what other Member States are doing.
Mr Fletcher: I think there is
either divergence or complete absence.
Q77 Chairman: One of the recommendations
is the 2007 Review is that licences and tariffs will have to be
supported with hard facts and figures and methodologies which
are available to licensees. The British Music Rights have argued
that its methodology for setting these tariffs is reliant on licensees
providing realistic estimates and projections about their new
businesses and a high degree of cooperation from them. It goes
on to talk about revenue projections and so on. Are the recommendations
in this area sound, do you think?
Mr Layton: I think the recommendation
in the Review stems from a reasonable view from one of the reviewers
that most issues brought before the Tribunal relate to the tariff
charge for a licence, that the parties before the Tribunal ought
to come with a great deal of evidence to back up their claims
or views. It was calling for more use of actuarial evidence, sampling
results. Having conducted the Review we put out the recommendations
for public consultation, as you are aware, to see what other people
thought of them and I think that is one of the recommendations
where there is a huge amount of mixed opinion as the value of
taking a more structured and disciplined approach. As we have
heard, insisting that more evidence is brought to a tribunal might
not in all cases be the way to swifter justice in this. It might
give rise to more expert opinions from forensic accountants and
so on; it might just give the lawyers more things to argue about.
I think what this recommendation has resulted in is a very clear
understanding that a one size fits all approach does not necessarily
work.
Q78 Chairman: You have heard the
Judge talking about how difficult it is to make decisions, how
expensive it is; what do you think, Judge, about methodologies
and evidence based policy rather than policy based evidence?
His Honour Judge Fysh: I think
at the moment that the Tribunal and the UK IPO should not really
get involved in this part of the business at all; let the protagonists
do this and we judge.
Mr Fletcher: There is a kind of
issue that lies behind this. One of the things that is a truism
that bears repeating is that intellectual property is an economic
question carried on by legal and technical means. It is easy to
get lost in the legal and technical stuff and forget that what
we are talking about is an economic question. In economics, as
in so many walks of life, there is often no right answer. The
adversarial system gives you a way of getting to some balance
but one of the dangers of approaching it from the other angle
is that you end up with people thinking that they know what the
right answer is. In any market it is very difficult for the expert
or the bureaucrat to know what the price ought to be. Often what
tribunals are being asked to do is adjudicate on where the balance
of pricing ought to lay between two parties of quite different
economic size. This is where economics meets law and that is quite
difficult.
His Honour Judge Fysh: It helps
us in this to look at what are called `comparables', in other
words what men of business have come to agree in a free dealing
basis, arms length negotiation. We spend a lot of time looking
at agreements between different parties and arguing as to whether
it is a true comparable or not, but it does help the Tribunal
to get a ball park figure.
Q79 Chairman: In drawing up these
licensing schemes you have these two supporters or helpers; when
do they get involved and when should they? After the scheme or
before the drawing up of the scheme? Where should they come in,
do you think?
His Honour Judge Fysh: The scheme
is promulgated before I ever get to see it by some of the gentlemen
you have seen before us. They devise it; they have a large in-house
legal department; they have precedence and some of these proposed
licences run to 30 or 40 pages detailing the most amazingly complex
deals, for example how far away from a bar you can hear music
at 20 decibels normal volume and that kind of thing—and
that is a certain tariff. All this is negotiated before we see
it. We see it when a party says "no". In other words,
we have no part in the drafting of the liscence although if a
particular clause is particularly objectionable that comes under
focus, I can say, "I think that clause is unreasonable for
the following reasons".
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