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Lord Kingsland: My Lords, I hope that the Minister will forgive two speakers rising from the Front Bench. The main reason that I do so is to apologise to him for tabling two manuscript amendments: Amendments Nos. 27A and 158A. I take full responsibility for the fact that they are late. I do not know whether the Minister is in a position to respond to them. I see that the noble Lord is nodding. I thank him for preparing himself so swiftly for the coming ordeal.
I spoke to Amendment No. 27A during the Committee stage. In reply, the noble Lord, Lord McIntosh of Haringey, stated that the Government did not propose to add any new category of appealable decisions, save category (m), which concerned decisions not to grant interim measures under Section 35.
The noble Lord continued that the other proposed additions were not appropriate as they would extend the category of appealable decisions to intermediate or investigatory steps taken by the OFT. The noble Lord further added that parties at the stage of intermediary investigatory steps could still use judicial review, which, I entirely accept, carries with it the possibility of quashing interim measures.
In the course of my speech supporting this amendment in Committee, I relied heavily on a recent case of the Competition Appeal Tribunal called Bettercare. The Minister will be relieved to know that I do not intend to take your Lordships through the details of that case again. I shall make only one additional observation.
If one takes, for example, our proposed paragraph (l)a category which refers to a decision by the OFT not to investigate a complaint under Chapters I or IIand compares it with an investigation started by the OFT but terminated because, for one reason or another, there are no good grounds to continue it, then that comparison, in my submission, is a distinction without a difference. In both cases, the OFT is deciding not to continue to investigate a matter. The only difference is that one decision is made in the course of an investigation and the other is made not to make the investigation at all. I believe it is difficult to see why, in making those decisions, the criteria of the OFT should differ. If my analysis about that is correct, it seems to me curious that in one case a person has a right to a full appeal to the Competition Appeal Tribunal but, in the other, only to judicial review in the High Court.
I would add that it was my impression that, under this legislation, the Government were striving to find some unifying judicial themes in dealing with competition law. That, in turn, suggests to me that the Government should, so far as possible, concentrate litigation in one place rather than two.
There is a second manuscript amendment in this groupAmendment No. 158Awhich concerns delay by the Office of Fair Trading. If there is delay by the OFT in any investigation that it undertakes from time to time under Chapters I or II, the only way that a person under investigation can respond to that situation is to make an application to the High Court. This amendment seeks to enable an approach to be made to the Competition Appeal Tribunal in order both that the OFT can be reminded that it has been considering a matter for some while and that the Competition Appeal Tribunal can be empowered to give directions to the Office of Fair Trading to expedite the investigation.
Again, I recognise that the Minister has had very little time to consider this matter, and I shall understand if he wants to defer a response until Third Reading. However, if he has something to say on it, I shall of course be very grateful to hear him.
Lord Borrie: My Lords, I am among those who have only just seen these manuscript amendments. It may be due to my own inadequacy that I cannot understand why they are coupled with Amendment No. 24, which relates to Clause 11. They seem to deal with entirely different matters. Perhaps there has been a slip-up somewhere. I do not know whether I am the only person who has had that difficulty.
However, I want to speak to Amendment No. 24. It is somewhat similar to amendments that we discussed in Committee and, indeed, is somewhat less extreme than one proposed by the noble Lord, Lord Sharman, at that stage. But there was an interesting division on the Liberal Democrat Benches. For some reason, several noble Lords on those Benches have deserted us
To my mind, that is an appropriate phrase because, if this amendment were carried, it would seriously inhibit the work of consumer bodies, which are meant to promote super-complaints and which must be designatedno doubt after careful consideration by the Secretary of State. According to my knowledge of consumer bodies, it is very unlikely that they are rolling in money and are able easily to manage to pay the type of costs that might be envisaged by the amendment.
Surely the whole point of Clause 11 is that such bodies have special expertise. They are given a remit in Clause 11 to assist the public interest in bringing forward complaints that deserve closer investigation. It would seem a great pity to hobble that work by the proposed costs deterrent provided by the amendment.
I remind your Lordships that the guidance that will come from the Office of Fair Trading will ensureindeed, it will insistthat super-complainants present a reasoned case. That, surely, is sufficient to dispel any notion that vexatious complaints will arise which would be a thorough nuisance and cause a cost problem to the businesses or undertakings concerned.
Lord Sainsbury of Turville: My Lords, I shall speak to Amendment No. 25, which is also in this group. This amendment would make it a requirement for the Secretary of State to publish criteria which bodies would have to meet in order to be designated as super-complainants. It has always been the Government's intention to publish those criteria, and the amendment responds to a similar one tabled by the noble Lords, Lord Razzall and Lord Sharman, in Committee, which I agreed to consider.
We shall consult fully on the criteria after the Bill has received Royal Assent. I have written to the noble Lord, Lord Kingsland, and others with copies of the latest draft of the criteria, which I hope they have found helpful.
Amendment No. 24 seeks to make consumer bodies contribute towards the costs incurred by the business where the OFT has decided that there is no case to answer following its consideration of a super-complaint. I am afraid I believe that the amendment is based on a false premise. It treats the super-complaints process as if it were a litigious one. Super-complaints are not about taking businesses to court; they are about providing designated consumer groups with a quick and effective route into the OFT system for complaints about market features that are harming consumers. If a super-complaint is submitted with inadequate evidence or which is clearly without foundation, it will not take the OFT long to announce that it intends taking no further action. I cannot imagine that it would require much work either, if any, by the companies in the affected market.
We have already put in place checks to prevent against frivolous or vexatious super-complaints being submitted in the first place. Consumer bodies, to be designated to bring super-complaints, will have to meet criteria drawn up by my department. A body will have to produce evidence of experience and acting responsiblyand of the ability to put together reasoned super-complaints.
The cost of putting together a reasoned super-complaint is likely to be considerable. Taking that into account, together with the damage to a body's reputation if the OFT publicly dismissed a super-complaint as frivolous, it is unlikely that the making of a super-complaint will be entered into lightly. The OFT has begun consultation on draft guidance on the making of super-complaints and I wrote to noble Lords about that in September.
We expect that there will be informal consultation between the body bringing the super-complaint and the Office of Fair Trading before the OFT accepts the complaint. It is highly unlikely that a frivolous super-complaint will be submitted but if that does happen, the OFT will not take further action beyond the initial consideration. I do not think that should take long or require much from the companies concerned.
In all super-complaint cases, the OFT will publish the reasons for what action, if any, it proposes to takewhich will ensure that consumer groups submit decent super-complaints. They will not want the bad publicity and subsequent damage to their reputation from the OFT discarding one of their super-complaints as wasteful.
The super-complaint process does not impose new burdens on companies. It will only consider whether action is justifiedjust as with any other complaint. The process involves no sanctions or judgments of its own. Super-complaints are simply a new route into the OFT systeman initial "fast tracking" to ensure that complaints about market failure that harm consumers are given consideration within a fixed period. The options that the OFT has for follow-up action to super-complaints are the same as for any other complaint.
It is therefore right that all parties should follow the same procedure in terms of costs. Parties do not get their costs back when other complaints are submitted to the OFT and investigations are carried out that result in no action being taken. It would be an unnecessary additional burden and unfair to have that condition attached to complaints made via the super-complaints procedure. It would almost certainly discourage designated bodies from bringing super-complaints and make the new procedure meaningless. The bodies would surely opt instead for submitting a normal complaint, where the threat of costs does not exist. I am confident that the checks that we have already put in place will be sufficient to guard against frivolous super-complaints.
I have been briefed efficiently and quickly by DTI civil servants on Amendments Nos. 27A and 158A. My comments this morning on the movers of this amendment and on the procedures of the House of Lords will, I hope, remain confidential to myself and the civil servants.
Amendment No. 27A would add to the list of decisions by the OFT that could be appealed to the Competition Appeal Tribunal under the Competition Act 1998. Section 46(3) lists a number of decisions of the OFT that can be subject to a full appeal to the tribunal and further decisions may be added by regulation. In our earlier debate, I accepted an amendment in the category covered by Section 46(3)(m) and we are working to bring forward secondary legislation as soon as practicable to add that new right to Section 46(3) and Section 47.
I am convinced that the remaining proposals that form Amendment No. 27A should not be taken forward. Paragraphs (i) to (k) relate to intermediate steps in the OFT's investigative procedures and are not substantive decisions of the OFT. Granting a right of appeal on interim investigatory steps would be highly unusual, significantly increase the length of OFT investigations and reduce the office's discretion to deploy resources to areas where it can be most effective. There would be a concurrent deleterious effect on the operation of the competition regime as a whole.
Subsection (l) concerns OFT decisions not to investigate complaints. It is essential that a right of appeal to the CAT is only granted against substantive decisions of the OFT, as was always the clear intention during the passage of the Competition Bill.
Amendment No. 158A would provide for persons who had submitted material to the Office of Fair Trading alleging infringement of Chapters I and II prohibitions of the Competition Act 1998 to seek a direction from the Competition Appeal Tribunal that the OFT's investigation of the alleged infringement is determined without any unnecessary further delay, where the court is satisfied that there has been undue delay on the part of the OFT.
The investigation of complaints alleging infringement of Chapters I and II prohibitions of the Competition Act 1998 is the responsibility of the Office of Fair Trading. Some of the allegations that the OFT will receive will be dismissed at an early stage, whereas some will lead to findings of a serious breach under the Act.
To ensure that the most serious and harmful cases are dealt with effectively, the OFT needs the discretion to deploy its resources accordingly. The amendment would restrict the OFT's ability to prioritise its caseload and would hamper the investigation of serious breaches of the Act. Furthermore, many
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