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Clause 27, page 13, line 41, leave out ("signed by the Director").
Lord Simon of Highbury: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10, with which is grouped Amendments Nos. 16 to 20 and 40 and 41.
Amendments Nos. 10, 40 and 41 are concerned with an important element of the Bill; namely, that the director should be able to delegate the exercise of his functions under the Bill. It would be wrong and, indeed, impractical to require him to exercise them in person.
It might possibly be argued that the director cannot delegate his powers under Clause 27 in this way to require the production of documents because the power to do so is subject to the issuing of a
We do not want there to be any risk that this argument could be successfully advanced. It is our clear intention that this power should be capable of delegation. Accordingly, to put the matter beyond doubt, Amendment No. 10 deletes the reference to the notice being "signed by the Director".
I turn to Amendments Nos. 40 and 41. The Bill was earlier amended in this House to ensure that the director's general power to delegate, under Schedule 1 to the Fair Trading Act 1973, also applied to the domestic investigation function. We need to make the equivalent amendments to the EC investigation provisions so that they operate in precisely the same way. Amendments Nos. 40 and 41 do so by deleting unnecessary references in Clauses 62 and 63 to persons acting on behalf of the director.
Amendments Nos. 16 and 20 are amendments to the power, when the premises of an undertaking are entered during the course of an investigation, to require a person to state the whereabouts of a document. In an "off-site" investigation under Clause 27, where a specified document is not produced, the investigating officer is empowered to require a person to state the whereabouts of that document,
In Clauses 28 and 29 the equivalent power omits that qualification. We consider it desirable to remove that discrepancy and include these additional words, so that if a person is not certain of the exact location of a document but believes it is in a particular place, then he must give that information rather than simply stating that he does not know its whereabouts.
Amendments Nos. 17 to 19 are minor, technical amendments intended to clarify exactly what documents a warrant under Clause 29 of the Bill will authorise an investigating officer to search for, or take possession of or about which an explanation may be required to be given where premises have been entered under the warrant.
Clause 29 sets out three separate circumstances where a warrant may be obtained from a High Court judge enabling an investigating officer to enter premises in this way. As at present drafted, the Bill is unclear whether, when the warrant is issued, the investigating officer is then able to exercise his powers in subsection 29(2)(b),
Moved, That the House do agree with the Commons in their Amendment No. 10.--(Lord Simon of Highbury.)
On Question, Motion agreed to.
"notice signed by the Director".
It could be argued that this expressly required him to act personally and sign the notices.
"to the best of his knowledge and belief".
7 p.m.
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Clause 27, page 14, line 2, leave out (""specified document" means any document which") and insert (""specified" means--").
Page 14, line 3, leave out ("is").
Page 14, line 4, leave out ("falls within a category of document") and insert ("falling within a category").
Page 14, line 7, after ("produced") insert ("or any information is to be provided").
Page 14, line 8, at end insert ("or provided").
Clause 28, page 15, line 6, after ("state") insert (", to the best of his knowledge and belief,").
Clause 29, page 15, line 39, leave out ("mentioned in subsection (1)") and insert ("in respect of which the application under subsection (1) was granted ("the relevant kind");").
Page 15, line 40, leave out ("that") and insert ("the relevant").
Page 16, line 2, leave out ("a kind mentioned in subsection (1)") and insert ("the relevant kind").
Page 16, line 2, after ("state") insert (", to the best of his knowledge and belief,").
Clause 37, page 19, line 1, leave out ("infringes") and insert ("has infringed").
Page 19, line 4, leave out ("infringes") and insert ("has infringed").
Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 11 to 22. These amendments have been spoken to with Amendments Nos. 6, 9 and 10.
Moved, That the House do agree with the Commons in their Amendments Nos. 11 to 22.--(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
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Clause 37, page 19, line 6, at end insert--
Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 23. I shall speak also to Amendments Nos. 24 and 25. This amendment responds to an amendment to Clause 37 tabled by the noble and learned Lord, Lord Fraser of Carmyllie, which would
However, the concern which the noble and learned Lord expressed is entirely proper and the Government indicated that an amendment might need to be made in another place. We had thought that this matter might well be covered by guidance under Clause 39, but on reflection it seems to us that the better course is to make it clear on the face of the Bill that penalties cannot be imposed unless the undertaking has committed the infringement intentionally or through negligence. This is what Amendment No. 23 achieves. I hope that it will be welcome to the House.
Turning to Amendments Nos. 24 and 25, Clause 39 of the Bill requires the director to prepare and publish guidance as to the appropriate level of a penalty which an undertaking may be required to pay where an agreement or conduct infringes either of the prohibitions. We have given the commitment that the ceiling of 10 per cent. of turnover will be limited to UK turnover. The purpose of Amendment No. 24 is to inform and guide business on the circumstances in which penalties are likely to be imposed and the magnitude of such penalties. Clause 39(8) underpins this by requiring the director to have regard to this guidance when setting the amount of a penalty. As at present drafted, the subsection also requires an appeal tribunal or court also to have regard to the director's guidance.
We believe that this latter provision could be argued to have limited the independence of the appeal process from the director. To put the matter beyond doubt, this amendment removes the obligation on a tribunal and the court to have regard to such guidance.
Amendment No. 25 is necessary as a consequential amendment to delete the cross-reference, in Clause 39(10) to subsection (8) of Clause 39, because this subsection will no longer refer to "the appropriate court".
Moved, That the House do agree with the Commons in their Amendment No. 23.--(Lord McIntosh of Haringey.)
Lord Borrie: My Lords, I wish to comment on Amendment No. 23, which may reduce the important deterrent effect of the penalties which the Government have much lauded as being among the purposes of the Competition Bill. As we have heard, it requires that the director may impose a penalty only if he is satisfied that the infringement of a prohibition has been committed intentionally or negligently by the undertaking. I stress the words "by the undertaking" because my concern is that that may mean only the directing mind of the company. I am concerned about what may happen if, for example, the management of an undertaking issues express instructions to employees not to put into effect a price-fixing agreement. Then let us suppose that a middle rank employee, if you like, acts against those instructions
I have not invented these facts out of thin air. I refer to an actual case that occurred in the earlier part of this decade when the House of Lords in its judicial capacity dealt with ready-mixed concrete companies which had been subjected to a court order many years before that they must not make price-fixing agreements. The court orders were, of course, directed at the companies concerned. The directors of a company issued instructions seeking to put into effect the court order and to try to ensure that everyone in the company obeyed it. Unfortunately the instructions were disobeyed and people of a certain rank within the company liaised with other people in other companies and made price-fixing contracts exactly of the kind that the Restrictive Practices Court had been concerned about.
The House of Lords overruled the Court of Appeal on this matter. The House of Lords said that even though the employees had acted outside their authority and contrary to instructions, as they acted in the course of their employment the contracts they had made were attributable to the companies and the companies were liable in contempt for breaching the court orders. In the judgments much was made of the fact that the companies were liable in contempt because the law of contempt does not require intention on the part of the employer. If the employer is supposed to be the one who has the intention or is negligent, would the director be able to impose penalties under the new wording in Amendment No. 23, which the House of Commons has passed and which we are now considering?
("(2A) The Director may impose a penalty on an undertaking under subsection (1) or (2) only if he is satisfied that the infringement has been committed intentionally or negligently by the undertaking.").
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