Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Kingsland: I support the amendment. It is primarily due to the work of the distinguished competition lawyer Sir Jeremy Lever that the matter is before us today.

As the noble Lord, Lord Razzall, explained, for a variety of reasons, mainly connected with the content of the Bill and the likely move of the European Commission to delegate much of its competition decision-making to national authorities, the volume of competition cases in national courts will grow substantially. Essentially, the amendment implies that the Government have got matters the wrong way round in the Bill. The Government seek to concentrate responsibility in the new competition appeal tribunal for determining damages following decisions by the responsible competition authorities.

The philosophy behind the amendment is that measuring damages in competition cases is not an especially complicated matter for Queen's Bench judges. Given the huge volume of work that the competition appeal tribunal is about to undertake, why not relieve it of the task—or at least of the exclusive task—of doing something that can just as well be done by other courts?

On the other hand, the Bill as drafted will, in private actions, require ordinary High Court judges to deal with the most sophisticated and complex competition matters—those under Article 82(3), for example—which the CAT is uniquely qualified to consider and undertake.

The amendment is intended to provide a transfer mechanism in the opposite direction to that of the Bill. It is intended to provide the power to take cases that arise in the ordinary courts and transfer them to the competition appeal tribunal. In a sense, we are trying to change the flow. The Bill will send damages matters to the competition appeal tribunal; it should send competition matters to it.

The amendment has no political content. It is an attempt to assess where the burdens will lie on the judicial system when the Bill is enacted. It is in everyone's interest to get that right. The Government have taken a certain view in the Bill. I hope that they

18 Jul 2002 : Column 1433

will give the amendment serious consideration, if they have not already done so, so that we can develop the idea during our proceedings.

Lord Razzall: For the record, I think that the noble Lord meant Article 81(3), not Article 82.

Lord Kingsland: Yes. I have got off to a bad start with my statutory designations; I apologise.

Lord McIntosh of Haringey: I do not think that we are worried about damn dots!

I listened carefully to what the noble Lords, Lord Razzall and Lord Kingsland, said. I certainly recognise that they feel strongly about this issue. I should like to consider their remarks between now and Report, but I must address myself to the amendment before us and point out the difficulties with it.

The amendment would achieve two things. It would enable the Lord Chancellor and the Secretary of State to make regulations enabling courts to transfer certain competition issues to be determined by the competition appeal tribunal. It would also, although this has not been spoken to, allow the Lord Chancellor to appoint judges directly to the positions of president and chairman of the tribunal.

Under the amendment, we should have the strange position whereby a tribunal made a decision on an issue arising in a case before a High Court judge that was then binding on that judge. It is true that, as a result of Clause 19, findings of infringements of competition law will be binding on the courts, but that will be only when the full appeal route has been exhausted and only in relation to claims for damages. So that is narrowly circumscribed.

Introducing such rules could lead to inconsistency in the way in which cases are dealt with. That could depend on the working practices of a particular judge. Some judges might refer some parts of a case to the CAT; but a different judge might decide to keep the whole case. That would be unsatisfactory for the parties involved because they would not have a clear idea of the path that their case would take.

The point was not spoken to, but the amendment would also involve a substantial enlargement of the powers of the CAT as currently proposed. It appears to allow the CAT to take initial decisions on competition law breaches that are currently taken by the Office of Fair Trading. As the noble Lord, Lord Razzall, is nodding, perhaps that is what he meant to achieve. The CAT has the power to make decisions relating to breaches of competition law, but only those that have been the subject of an OFT decision and are subsequently appealed to the CAT. That is why it is called an appeal tribunal.

Shall I speak to the issue of the direct appointment of judges by my noble and learned friend the Lord Chancellor?

Lord Kingsland: Please do.

Lord McIntosh of Haringey: The proposal that my noble and learned friend the Lord Chancellor should

18 Jul 2002 : Column 1434

be able to appoint judges directly cuts across the policy of the Lord Chancellor's Department that all appointments to the tribunal should be by way of open competition. Open competition does not rule out the possibility that some judges will be appointed chairmen, but they will have to apply for the posts when they are advertised. We would be delighted if some judges were to apply; they have valuable expertise to offer the tribunal, not least in the two new areas of damages and judicial review. However, we see no need to make express provision to allow for the direct appointment of judges. The policy favoured by my noble and learned friend of running a competition, which will have a set of chairmen in place by the time that the provisions of the Bill commence, is the right one.

5.30 p.m.

Lord Borrie: Does my noble friend the Minister agree that, in any case, judges are already eligible, under Schedule 2, for the appointments to which the amendment applies? All judges have the 7-year or 10-year qualification referred to in the schedule.

Lord McIntosh of Haringey: I hoped that I had said that. That is the Government's position.

Lord Kingsland: The amendment would have covered that issue as well. However, I understood that the view of the Lord Chancellor's Department was that the noble and learned Lord had the power to appoint judges in the way suggested by the Minister. That is why it was thought unnecessary to cover the matter in the amendment.

Lord McIntosh of Haringey: My noble and learned friend does, of course, have that power, but he has made it clear that he intends to open up the system for the appointment of judges to competition. I would have hoped that that would be generally welcomed.

Lord Kingsland: The noble and learned Lord the Lord Chancellor may well wish to open the system up to competition, but he can still assign the winners of that competition in any way he likes.

I shall deal with the principal objections that the Minister raised, although I am sure that the noble Lord, Lord Razzall, will deal with them too. The Minister said that it would be inappropriate for a second court to accept a determination of issues that had been raised in the first court. Essentially, he asked why the second court should accept the findings of the first court, if the case were transferred to it.

Lord McIntosh of Haringey: I am sorry to keep bobbing up and down. The issue is not whether the second court should accept the decisions of the first court; it is whether those decisions are binding.

Lord Kingsland: There is nothing exceptional about the situation. Even before the enactment of this Bill, that will often be the position. Findings of fact will have been made in public law proceedings under

18 Jul 2002 : Column 1435

Chapter 1 or Chapter 2 of the Competition Act 1998 or under Articles 81 or 82 of the EC treaty. Subject to certain conditions, such findings of fact will be treated as determinative in subsequent actions. That has always been the case.

The Minister's second objection was that the amendment would, in some way, expropriate the Office of Fair Trading or the competition authorities of the European Community of their powers. That is not so. We are discussing the transfer of matters that are the subject of private actions in the High Court—that have been brought either under Articles 81 or 82 of the EC treaty or under the corresponding provisions of Chapter 1 and Chapter 2 of the Competition Act 1998. The intervention of the competition authorities is not an issue.

Lord Razzall: I welcome the fact that the Minister said that he would consider the matter. Some important points have been raised. As the noble Lord, Lord Kingsland, said, it is not a party political matter. There is no politics in it; we are just trying to get the Bill right.

One point to which the Minister did not refer is that the amendment looks ahead to what we believe will be the structure of competition law in a year or two. Perhaps I did not emphasise that enough in my opening remarks. The noble Lord, Lord Kingsland, and I made the point that most practitioners anticipate that the powers devolved by the European Commission will come back to the structure in the UK. In other words, many decisions currently taken in Brussels will be taken in the UK.

It is likely that those decisions will, initially, be made by the OFT and that appeals will go from the OFT to the competition appeal tribunal. We are unlikely to have further legislation in place when that happens, but the amendment would create a structure so that the right bodies—the courts or the competition appeal tribunal—will be ready to hear the appeals. The courts will determine the damages and the competition appeals tribunal will determine cases relating to the complex inter-relationship between law, fact and economics, of which the classic example is appeals about the exemptions in Article 81(3). If the Government accept that that is what will happen, we must then ask what the composition of the CAT should be.

In the history of English law—I say, "English law", although we should bear in mind that it is an issue for the whole of the UK—when a raft of particular cases comes to the judiciary, people with expertise in that area are appointed to the High Court Bench. There is, in effect, a commercial court: judges are appointed to the High Court to deal with complicated commercial cases. I presume that, when the noble and learned Lord the Lord Chancellor introduces his new policy of advertisement for the judiciary, knockabout criminal lawyers from the Old Bailey will not apply for a job in the commercial court. Presumably, the noble and learned Lord will advertise for commercial court judges.

18 Jul 2002 : Column 1436

We would not want to create a situation in which, because of the number of cases that come to the High Court, we would appoint to the High Court Bench only people with experience of competition law. We would want to build up a corpus of judges with competition law experience in the same way as the commercial court has developed. Those people should apply for appointment to the competition appeal tribunal because that is where they could best apply their judicial skills and their economic experience.


Next Section Back to Table of Contents Lords Hansard Home Page