Supplementary Note: Judicial Review and
Appeal to the Competition Commission
1. I am grateful to the Committee for the
opportunity to clarify my evidence. There is no easily available
source of statistical information relating to judicial review
claims against regulators to the courts; the numbers so far have
been quite small and examples will be given below. However, in
my view there are good grounds to suspect that the number of claims,
and use of appeal mechanisms, will increase and that it is desirable
to anticipate this through the provision of more appropriate appeal
arrangements.
2. When the utility regulators were established,
there was little expectation that judicial review would become
an important means of challenging their decisions; indeed, one
of the objectives of the then Government was to avoid involvement
of the courts so far as possible. In particular, the expectation
was that competition would be relatively limited in the utility
sectors and that each sector would be dominated by a single enterprise
or a very small number of enterprises, for example in telecommunications
the BT/Mercury duopoly. As a result disputes could be resolved
by negotiation between regulator and enterprise. In fact, liberalisation
has resulted in many more firms being subject to regulatory decisions,
and this increases the likelihood of challenge by review or appeal.
A number of quite important judicial review claims have in fact
been brought against utility regulators.[19]
Some have raised issues of general principle; others have rather
been a means of resolving an individual dispute without such broader
implications. Moreover, the threat of judicial review has become
commonplace whenever an unfavourable regulatory decision is made;
for example, over the last three months, there have been such
threats in relation to decisions on mobile phone termination charges
and airport charges. To a large degree such threats are for public
consumption before the taking of legal advice; however they do
reflect a growing realisation that legal remedies may be available.
3. Since the Competition Act 1998 came into
effect in 2000, the role of formal legal rules and of legal challenge
in competition law has increased enormously. Thus the former Monopolies
and Mergers Commission, though occasionally subject to judicial
review claims, had never lost one until the decision in the Interbrew
case in 2001.[20]
By contrast, the Competition Commission Appeal Tribunal set up
under the 1998 Act has so far had a dozen cases registered since
2001 and will no doubt see more applications after the Enterprise
Act has come into effect; in several cases decisions of the Director
General of Fair Trading have been successfully challenged by this
route.[21]
This suggests that legal challenge will become more frequent and
widespread for the utility regulators as well.
4. The Human Rights Act also creates a likelihood
of further litigation. In particular the right to the peaceful
enjoyment of possessions in the first protocol to the Convention
may provide the basis for challenge of regulatory decisions which
impose penalties or which affect the freedom to trade, for example
through the withholding or conditional grant of a licence essential
to an applicant's business.[22]
Similarly, Article 6 of the Convention provides an opportunity
to challenge regulatory decisions affecting civil rights and obligations
(including the right to carry out a business) on procedural grounds.
If experience in other contexts is any guide, the Convention may
provide fertile grounds for legal argument against decisions such
as the imposition of penalties or imposition of licence conditions
by regulators; it certainly considerably extends the range of
legal arguments available for challenge of the regulatory decisions.
5. My view is thus that an increase in legal
challenges to regulatory decisions is inevitable. In my view,
the current rag-bag of different procedures for challenge by appeal
or review is not an appropriate means of providing such challenge.
In particular, judicial review is more appropriately reserved
for important decisions of principle, and whenever possible statutory
rights of appeal should be provided instead for the resolution
of legal disputes. The Competition Appeal Tribunal, which, under
the Enterprise Act 2002 will take over the functions of the Competition
Commission Appeal Tribunal, will be the most appropriate body
to hear such appeals.
I hope that this information is of help to the
Committee.
Professor Tony Prosser, University of Bristol
19 See for example R v Director General
of Gas Supply ex parte Smith, CRO/1398/88, QBD, 31 July 1989;
R v Director General of Telecommunications ex parte British
Telecommunications plc, CO/3596/96 (QBD), noted by C Scott
at (1997) 8 Utilities Law Review 120; R v The Director
General of Electricity Supply, ex parte Scottish Power, noted
at (1997) 8 Utilities Law Review 126; R v Director General
of Electricity supply ex parte Redrow Homes, The Times, 21
February 1995; Re Northern Ireland Electricity plc's Application
for Judicial Review [1998] NI 300; R v Director of Water
Services ex parte Lancashire County Council and Others, The Times
6 March 1998. Back
20
Interbrew SA v Competition Commission [2001] UKCLR 954
(QBD). Back
21
See eg Aberdeen Journals Ltd v Director General of Fair Trading,
Competition Commission Appeal Tribunal, 19 March 2000; Bettercare
Group Ltd v Director General of Fair Trading, Competition
Appeal Tribunal, 1 August 2002, [2002] CAT 7. Back
22
See eg Tre Traktörer Aktiebolag v Sweden (1991) 13 EHRR
309. Back
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