Examination of Witnesses (Questions 40-54)
Mr Rufus Ogilvie Smals, Mr Alex Nourry, Mr Tim Cowen
and Mr James Flynn QC
22 NOVEMBER 2006
Q40 Chairman: Then subject to a further
appeal on law to the ECJ? You cannot cut that out?
Mr Flynn: You cannot cut it out but, in the
terms of the Treaty, it is exceptional and for matters that go
to the consistency of Community law and in general in the public
interest. Those conditions have not been defined. Clearly, it
would be correct for it to be wholly exceptional.
Q41 Chairman: There is no possibility
of a leap-frog direct from the Competition Court to the ECJ bypassing
the CFI?
Mr Flynn: That would require a Treaty amendment
if it were thought to be a good idea.
Q42 Chairman: It is not available
under 225 at the moment?
Mr Flynn: No.
Q43 Chairman: I think we have covered
this in a way already. What about the possibility that that could,
particularly if you have got those intent on delaying the overall
process, extend the timetable rather than in fact reducing it?
Is that a risk?
Mr Flynn: There must be a degree of risk inherent
in any appeal process but the courts have developed techniques
for getting rid of unmeritorious appeals as either being inadmissible
or manifestly unfounded on which they dispose of by order. The
further level of appeal would clearly be in very restricted circumstances
and whatever decision is taken on the implementation of that part
of 225.
Mr Ogilvie Smals: Just to give some perspective,
and I think it is a question that was raised earlier, we have
spoken to the European Commission about our concerns and proposals
in this area. We were told that the Commission itself has only
ever appealed in one case, and it lost. From the comments we have
received, I do not think that this is something that features
very highly on their agenda as something they would prefer to
do.
Q44 Chairman: They appealed on one
of the 10 cases?
Mr Ogilvie Smals: They appealed on the Schneider
Legrand case.
Q45 Chairman: This was on one of
the four that was appealed. They then in turn appealed.
Mr Ogilvie Smals: Yes, to the European Court
of Justice.
Q46 Chairman: The appeal went ahead
but it failed. Had it already aborted, as a matter of interest,
by then?
Mr Ogilvie Smals: Yes, it had.
Q47 Chairman: Once they have aborted,
what is the point of pursuing the process in Luxembourg?
Mr Flynn: One might be the possibility of bringing
damages actions, as Airtours or My Travel, as they
are now called, have done. Even if the deal is dead, there might
be reasons for pursuing it.
Mr Ogilvie Smals: I believe also that the Commission
sought to argue that the scope of the review undertaken by the
CFI went beyond what the CFI was entitled to do. So I think there
was probably an issue of principle in that particular case.
Q48 Chairman: An issue of principle
would not necessarily be of much interest to the particular parties
to that particular process?
Mr Ogilvie Smals: It would be of interest to
the European Commission for its future handling of cases.
Q49 Chairman: They would want to
carry it further. Why would it be opposed at greater expense still
by the private party whose deal has already gone off?
Mr Ogilvie Smals: I do not know whether it was
very strongly opposed.
Mr Flynn: There was no participation in the
appeal.[4]
Q50Chairman: We have probably covered the next
question. Dr Bishop raised the possibility of appeal direct from
the Competition Court to the ECJ. As I think it has already been
made plain, under the existing Article 225, this is not possible
and it would need Treaty amendment?
Mr Ogilvie Smals: Yes.
Q51Chairman: We turn briefly and finally to
the future role of CFI, assuming it is freed of the burden of
hearing first instance competition cases, should it then be given
jurisdiction to hear preliminary references from national courts
under 225(3)? The suggestion is that the recent decision in Courage
v Crehan in this House might go to CFI rather than the ECJ?
Do you have any views?
Mr Cowen: I think it is certainly a possibility.
I would like to make sure that we have drawn a distinction between
the judicial panel that would hear cases which were essentially
on appeal from Commission decisions in mergers and possibly other
expedited cases. This is really a question of what does the CFI
then do if it is freed up, if you like, and has more capacity.
The question would then be an appeal from a national court, which
would go to the ECJ. Under the system at the moment, it would
have to go to the ECJ. National court proceedings, as Sir David
Edward has pointed out, can be a much greater mixed question of
issues under the Treaty. The first question would be whether or
not you could specifically identify something that would be a
matter that would be a specific area, I think in the language
of Article 234, laid down in the statute that could then be delegated
from the ECJ to the CFI. That would be a question that would need
to be addressed. It is not really part of our proposal but we
see that there is a possibility there.
Chairman: I have a question on Courage
v Crehan. Lord Mance was in the case, so he would know better
than I. I thought the question was whether by reaching a decision
here, we were at risk of acting inconsistently in the Luxembourg
court.
Lord Mance: The question which went to
Luxembourg I think was the consistency of our rules relating to
the legality with Community principles in relation to contracts
which were contrary to Community law. Could someone who was a
party to an illegal contract claim compensation against the other
party? Domestic law suggested no but Community law said yes. There
was a basic what I think has been described as a constitutional
point in the papers, which, on the face of it, was a very appropriate
point, in my view, for the ECJ as the highest court.
Q52 Chairman: Finally, and in a way
it is a global question, given that the establishment of a new
court, a new judicial panel in the language of Article 225a, would
require unanimity, it would take time to negotiate and setting
it up would also take time. Meantime, what should the priority
be? I appreciate that none of you think that anything short of
that will cure the problem, but, in so far as it is capable of
short-term improvement and amelioration, how best to achieve it?
Mr Ogilvie Smals: We have scratched our heads
to be able to offer some sort of coherent answer to this question
because it is quite difficult to identify any quick fix solutions
here. I did mention earlier the Competition Appeal Tribunal's
five principles and maybe some review of procedures generally
in the context of those five principles might be one thing that
could be done. On a purely practical level, we understand that
it is within the power of the CFI not to require translations
of pleadings and documents in the case, certainly where the language
of the case is one of the main languages. Given that the translation
issue seems to be so problematic, it does seem to me that it would
be a useful step in the right direction if that could be done.
That is really all we can suggest as quick fixes. I have three
sentences by way of a closing statement that I would like to make
before we finish.
Q53 Chairman: Before you get to those,
I want to pick you up on the five principles that the Competition
Commission set out at page 6, paragraph 21, of their evidence.
It seems to me that those are principles obviously appropriate
to the Competition Appeal Tribunal process. When you get to effective
fact-finding procedures and short and structured oral hearings,
are you not miles away from the Luxembourg processes?
Mr Flynn: Yes, that is so, particularly in relation
to evidence, but at least live evidence from economists is not
uncommon in competition cases. My experience is that some advance
notice of the lines of questions that the court would wish to
take would assist in the preparation. Naturally, hearings in Luxembourg
are short, as you are well aware, but again more liaison with
the parties as to what the content of that hearing should be,
what points are of interest to the court and what the court has,
as it were, got under its belt would be of assistance. I do think
these principles, translated as necessary, could be of assistance.
Q54 Chairman: Unless any other member
of the committee has any particular questions, perhaps Mr Ogilvie
Smals could give us his no doubt helpful closing remarks.
Mr Ogilvie Smals: I would like to say straight
away that I think this would make an absolutely excellent European
Competition Court in this room! Just to summarise and try to bring
together what we have been saying, we believe there is not much
doubt about the need for reform but it is clear that any reform
will have consequences for the judicial architecture of the EU.
The CBI does accept that these need to be thought through very
carefully, but we believe that the time to start this process
is now. We feel that this inquiry has a very important role to
play in building a consensus across the EU for early action. We
would ask that in its recommendations the committee does suggest
that the European Commission should be tasked with preparing a
White Paper on reform in this area, preferably before the end
of 2007.
Chairman: It remains for me, on behalf
of the committee, to thank you all for your assistance. As you
probably know, we have six more evidence-gathering sessions here.
This has been an extremely good start from our point of view.
You have set a helpful framework in which we can conduct our inquiry.
Thank you very much indeed.
4 Note by witness: Correction to `They did
participate in the appeal.' on reading the transcript. Back
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