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Lord Razzall: My Lords, I support the comments of the noble Lord, Lord Kingsland. I believe that the amendment he is moving is the same as that which I moved in Committee. We clearly are both in thrall to Sir Jeremy Lever QC who is, of course, the author of the amendment.

I do not want to repeat the remarks made by the noble Lord, Lord Kingsland, with all of which I agree. However, the fundamental issue on which he perhaps did not touch is that in producing the amendment we look forward to a Competition Act regime under which significant powers that are currently vested in Brussels are devolved to the United Kingdom. I believe that it is common ground on all sides of the House, first, that that is a likely outcome—namely, that many competition decisions that are currently determined in Brussels will be devolved to the United Kingdom authorities—and, secondly, that that is a desirable outcome. I believe that noble Lords on all sides of the House share that view. The concern that is reflected in the amendment is that when that happens—all the indications are that it will happen soon—and if the Minister is not prepared to move on this issue, in due course either his noble and learned friend the Lord Chancellor will be forced to alter the pattern of appointment of judges or he will have to produce primary legislation to deal with this point.

Judges are in danger of being asked to determine issues they are not really equipped to deal with as they do not have expertise in competition law. They will be asked to deal with issues that they are not competent to deal with. The tribunal will be asked to deal with issues with which it is not competent to deal; that is, the whole damages issue. There is no one better than any High Court judge to determine a damages issue but there is no one less equipped than a High Court judge to determine the complex issues of economics, law and fact which are bread and butter to the experts on competition law.

I have no pride of authorship of the amendment, as I have indicated. The amendment was drafted by Sir Jeremy Lever QC. He lobbied the noble Lord, Lord

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Kingsland, myself and, no doubt, the Minister heavily on the amendment about which he feels strongly. Sir Jeremy predicts that if this amendment or something like it is not enshrined in the legislation, either the Minister in due course will have to introduce further primary legislation or his noble and learned friend the Lord Chancellor will have to alter the pattern of recruitment of High Court judges. For that reason I support the amendment.

Lord Borrie: My Lords, I have no doubt at all that in the enforcement of competition law private actions for damages have a useful role to play in the public interest alongside the enforcement role of the Office of Fair Trading and the European Commission. The OFT and the European Commission simply do not have limitless resources and are bound to have to prioritise as regards which cases they take up. I believe that that point is probably generally agreed.

The important question raised by the amendment, as by that proposed in Committee, is what is the best body to determine, when an action for damages is brought, first, whether there has been an infringement of competition law, UK or EU, and, secondly, if there has been such a breach, who should determine and quantify the amount of damages? The question of whether there has been a breach of competition law is generally a mixed issue of law, economics and fact, as the noble Lord, Lord Razzall, explained, which the mixed membership of the Competition Appeal Tribunal is most appropriate to determine. However, as regards the question of who is most appropriate to determine damages, that is a typical issue for a High Court judge sitting alone; hence the proposals for the possibility of transfer—I interpret part of the amendment as a provision for retransfer as well—between the High Court judge and the Competition Appeal Tribunal.

At first sight—I believe that my noble friend Lord McIntosh made a similar comment in Committee—it is odd that a body entitled the Competition Appeal Tribunal should have the role of deciding at first instance, without anyone else having decided the matter before, whether there has been a breach of competition law. But the role of the Competition Appeal Tribunal under the Government's own Clause 17 is not an appeal role. Clause 17 as it stands gives the Competition Appeal Tribunal jurisdiction to handle at first instance private claims for damages provided that there has already been a public law determination of a relevant infringement. That is not an appeal; it is intended to be a decision—if Clause 17 comes into effect—of a court of first instance.

I have a great deal of sympathy with the amendment proposed by the party opposite which emanates, as has been said, from Sir Jeremy Lever, a fellow of All Souls, whom I have known for at least 30 years as being pre-eminent in UK and EU competition law and who has obviously given a great deal of thought to this matter. I submit that the proposed subsection (2) of the amendment on appointments is probably not needed as my noble friend Lord McIntosh clarified in

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Committee that the appointment of High Court judges to the Competition Appeal Tribunal can be made under the present legislation and the Bill as it stands. If there were a vote, I would not enter the Lobby with the opposition parties on this matter. However, I hope that between now and Third Reading the Minister will give the amendment close consideration with a view to positively bringing forward a measure on similar lines.

Lord Sainsbury of Turville: My Lords, as we have heard, the amendment would give Ministers a power to make regulations allowing the courts to transfer to the Competition Appeal Tribunal issues arising in civil proceedings that require the determination of whether there has been an infringement of competition law. The tribunal's determination of that competition matter would then be binding on the court.

I listened carefully to the arguments. We certainly do not dispute that once the jurisdiction to handle civil proceedings involving breaches of both Articles 81 and 82 is devolved to national courts and national authorities, this may well become an increasingly important area of work. The fundamental issue in this regard is whether it is realistic and desirable for the courts themselves to build up a specialist body of law in this area. In our view, it is both realistic and desirable and we do not want to see the fragmentation that the amendment would cause. We are confident that where such cases arise, the courts will be able to deal efficiently with them. It is already the case that national courts are empowered to take decisions on Articles 81(1) and 82 and they can apply the equivalent provisions of the Competition Act 1998. It is true that few such cases have been dealt with by the courts hitherto. It is also true that in future Article 81(3) issues will be added to the mix of matters with which the courts will have to deal.

However, judges at all levels and in particular those in the High Court, where we would expect the vast majority of these cases to be heard, are expected to handle—and, if necessary, become expert in—a wide range of areas of law as and when they come their way. They already have to weigh technical evidence, including that relating to economic effects presented by experts in a variety of cases. The Judicial Studies Board is there to ensure appropriate training in new areas of law.

I should add the important point that the EU regulations being developed as part of the EU competition law modernisation project cater for the fact that national courts may need access to expert advice. Regulations will enable the competition authorities of the member states—in our case, primarily the Office of Fair Trading—to submit written observations to the national courts on issues relating to the application of Articles 81 and 82. Further, with the permission of the court in question, they will also be able to submit oral observation to the courts as an expert witness.

The OFT will not act in that expert capacity on every occasion but it is likely to want to offer views where a case is particularly important or is likely to set

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important precedents. That will represent an important source of advice for the courts when the occasion demands.

The alternative envisaged by the amendment to give the Competition Appeal Tribunal a new role and additional powers would have a number of important disadvantages. It would entail an unnecessary degree of fragmentation in the judicial system. The consideration of civil proceedings would be split between the courts and the CAT. There would be increased uncertainty for parties about the path that their case would take because that would depend on the readiness of individual judges to refer matters to the CAT. We believe that it would also be a significant obstacle to the development of relevant expertise by the High Court for any cases to be transferred to the CAT.

There are other more technical difficulties. It would, for example, be highly unusual for a tribunal to make decisions on an issue arising in a case before the High Court or Court of Sessions judge that is binding on that judge, not least because tribunal decisions are subject to judicial review, with the court exercising the power of judicial review.

I shall add one final but important point. This whole area is obviously a matter of judgment. Although we currently do not believe that it would be appropriate to take the power contemplated in this amendment, if such provision proves necessary when we come to examine the implementation of the proposed EU modernisation regulation, we believe that it will be possible to use the powers under Section 2 of the European Communities Act, combined with those in Clause 204, to secure the goals of the amendment. We believe that we could use those powers to give the CAT the jurisdiction that it would need and the courts the powers needed to enable matters and issues to be transferred to the CAT to determine or for the CAT to assist the courts in appropriate cases.

As I said, we do not want to send the signal that that is the direction in which we expect to have to go by taking a specific power. However, an alternative power exists. I do not wish to rule out the possibility of using it if it proves appropriate to enable us to implement our Community obligations. The amendment is therefore unnecessary. For those reasons, I ask the noble Lord to withdraw the amendment.

8.30 p.m.

Lord Kingsland: My Lords, I thank the Minister for his very full reply in which he sought to contradict all of the points made by myself and the noble Lord, Lord Razzall. I was much encouraged by the speech of the noble Lord, Lord Borrie, who rightly referred to Sir Jeremy Lever—who is really the author of this amendment—as the outstanding competition lawyer of his generation.

No one knows the field of competition law and courts like Sir Jeremy. He has no self-interest whatever in promoting one particular pattern of jurisprudence rather than another. His proposal is the result of deep

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reflection on the current system and fears about how we might be inadequately resourced to face the challenges ahead.

I shall reflect between now and Third Reading on what the noble Lord the Minister said. I am slightly reassured by his reference to the possibility of using a power that the noble Lord believes he already has to cope with what is likely to happen in the European Community in the next two or three years. I should have preferred the noble Lord to have taken that power now in the Bill.

I shall reflect on the Minister's response and I thank him for his full reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21 [Duty to make references in relation to completed mergers]:

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