---

Lord Fraser of Carmyllie: My Lords, I am grateful to the Minister for spelling out his reasoning for not accepting our additional grounds. It has been helpful to us. As I said in moving the amendment, we do not necessarily attach equal weight to each ground. However, I should like to reflect further on what the Minister has said about dominant position. There seems to be some force in that argument. Clearly, we shall not have an opportunity to return to this in your Lordships' House but if, on reflection, we are not satisfied, the matter can be raised in another place as the Bill continues its parliamentary progress. In the meantime, I beg leave to withdraw Amendment No. 32.

Amendment, by leave, withdrawn.

Clause 49 [Appeal tribunals]:

Lord Kingsland moved Amendment No. 33:

Page 25, line 22, at end insert--
("(1A) The members of the appeal tribunal shall be appointed by the Lord Chancellor in consultation with the Lord Advocate.
(1B) The Lord Chancellor shall not appoint a person as a member of the appeal tribunal unless that person--
(a) holds an appropriate judicial office;
(b) has a ten year general qualification within the meaning of section 71 of the Courts and Legal Services Act 1990;
(c) is an advocate or solicitor in Scotland of at least ten years' standing; or
(d) is--
(i) a member of the Bar of Northern Ireland, or
(ii) a solicitor of the Supreme Court of Northern Ireland,
of at least ten years' standing,
and appears to the Lord Chancellor to have appropriate experience and knowledge of competition law and practice.
(1C) A person holds an appropriate judicial office for the purposes of subsection (1B)(a) if he is--
(a) a puisne judge of the High Court;
(b) a judge of the Court of Session; or
(c) a judge of the Supreme Court of Northern Ireland.
(1D) Before appointing as a member of the appeal tribunal any person who holds the judicial office mentioned in subsection (1C)(b) or (c), the Lord Chancellor shall consult the President of the Court of Session or the Lord Chief Justice of Northern Ireland, as appropriate.
(1E) A person appointed in accordance with this section shall not exercise any functions of the Competition Commission other than in relation to appeals.
(1F) For the hearing of any proceedings the appeal tribunal may consist of a single member.
(1G) The appeal tribunal may, at any stage in any proceedings before it, refer to a person or persons appointed by the tribunal for the purpose of any question arising in the proceedings, other than a question which in the tribunal's opinion is primarily one of law, for inquiry or report; and the report of any such person or persons may be adopted wholly or partly by the tribunal and, if so adopted, may be incorporated in an order of the tribunal.").

The noble Lord said: My Lords, Her Majesty's loyal Opposition place great importance on this amendment. I realise that in moving it I might once again render the

5 Mar 1998 : Column 1350

noble Lord, Lord Borrie, incandescent. The amendment is designed to provide the system with a credible appeal tribunal. In my submission, the appeal tribunal set out in the Bill is not credible. I say that particularly in the light of the Minister's reply to my noble and learned friend Lord Fraser of Carmyllie and myself on the relationship between scale monopolies and the prohibition under Chapter II.

The problem with the competition commission and its component appeals committee, as set out in the Bill, is that there is no clear distinction between those individuals who will be looking at scale monopolies and structural monopolies, and those individuals who will be hearing appeals. Perhaps I may give one example of how a conflict of interest might occur. Let us suppose that a company is under investigation by the Director General of Fair Trading for a Chapter II prohibition infringement and that at the same time the competition commission is considering whether to unleash a scale monopoly investigation. In those circumstances, it would be difficult for the company appealing to the competition appeal tribunal to feel that it was getting a fair hearing; because what the investigatory arm of the competition commission would be doing would be seen to be contaminating what the appeal branch of the competition commission was doing. It is important that in this system justice should be seen to be done.

My recommendation is that the appeal tribunal should be a completely separate institution from that part of the competition commission which still deals with structural and scale monopolies and merger investigations, and that it should have, as its president, a High Court judge or somebody of equivalent status selected by the Lord Chancellor. The tribunal could, if necessary--as can the European Court of Justice--invite experts to produce reports and to submit them to the tribunal as part of the decision-making process. But it would wholly exclude any members from that part of the commission investigating monopolistic practices from sitting on the tribunal.

That would reflect the change in culture that the Bill is bringing to competition matters in this country. The old system was 90 per cent. discretion and 10 per cent. law. We are now on the threshold of a system which is 90 per cent. law and 10 per cent. discretion; and that must be reflected in the institutional way in which it is treated all the way up the ladder.

The European Community has precisely such an institution interposed between the Commission, which is the equivalent of the Director General of Fair Trading, and the European Court of Justice. That is the court of first instance whose task it is to deal with fact and law. In a very short time that institution has acquired great prestige and the commercial world has much confidence in its jurisprudence. I should like to see the same kind of institution built up between the Director General of Fair Trading and the High Court and the Court of Appeal. The issues with which this tribunal must deal will be extremely complex. If it is successful companies that wish to appeal from decisions of the Director General of Fair Trading will have confidence in it and therefore will not seek to go for the alternative remedy

5 Mar 1998 : Column 1351

of judicial review or an appeal to the Court of Appeal. I believe that the Minister has a great interest in making this tribunal as credible as possible.

At Report stage I cast these ideas in the form of a competition court. I sensed that the Minister was not prepared to accept a competition court as a branch of the High Court. I am now more flexible in the institution that I propose, but the principle underlying my amendment is exactly the same. I beg to move.

7 p.m.

Lord Borrie: My Lords, the noble Lord expected me to make a comment, and indeed I do. I share his admiration for all senior lawyers and judges--the kind of people he wants exclusively to man the appeal tribunal to deal with appeals from the Director General of Fair Trading. He made a comparison with the court of first instance and said how well regarded it was. I am a member of the sub-committee of the European Communities Select Committee of this House that is about to conduct an inquiry into that tribunal because of the great dissatisfaction on the part of lawyers throughout the Community with the way it is proceeding, in particular the delays and the proposal by the Commission whereby the court of first instance will no longer be constituted by a panel of judges but decisions will be made by only one person in order to speed up the process. That situation worries a large number of lawyers who practise before that court.

I draw an analogy, not with the court of first instance, on some of whose current difficulties I have pronounced, but our own Restrictive Practices Court which has existed for 40 years. In relation to an earlier amendment I suggested that because we were embarking on a new Bill which largely followed European jurisprudence the noble Lord and his noble and learned friend Lord Fraser of Carmyllie should not ignore experience within the United Kingdom. The constitution of the Restrictive Practices Court combines legal talent in its chairman, who is a High Court judge, with the experience of others who are able to bring to bear their knowledge of business and commercial life. The Bill as it stands at the moment--the detail is largely in the appropriate schedule--combines the president of the tribunal who is to be of High Court calibre and no doubt other senior lawyers who will preside over particular panels hearing particular cases. They will do so in combination with others of relevant experience. That is of great value as the Restrictive Practices Court and the membership of the Monopolies and Mergers Commission over the years demonstrated. The kinds of cases that will fall within function of that commission will in large part involve matters of commercial and economic concern from which lawyers may learn something but for which they are not normally trained. Therefore, while lawyers have a valuable part to play--certainly in terms of the chairman of any particular panel--to suggest that the tribunal should be constituted wholly of senior lawyers is unfortunate. I believe that the present suggested composition is a good one.

I completely turn around the argument advanced by the noble Lord at an earlier stage. He referred to the reporting and appeal function. The membership of the

5 Mar 1998 : Column 1352

commission will include people who will perhaps deal frequently with merger and complex monopoly references--hardly, if at all, with scale monopoly references--and there will be a very useful cross-fertilisation if the experience of those people is also available in the new role of an appeal tribunal with a senior lawyer as its chairman. Their experience of dealing with other matters of competition policy should not be cast aside or regarded as negative rather than positive. I hope that my noble friend will resist as strongly as he has on previous occasions the amendment that has been moved by a member of Her Majesty's loyal Opposition. I noted that phrase. I remind the noble Lord that only a few years ago his party when in government made proposals for membership of a very similar kind to those contained in the present Bill.

---