Letter from Mr Rufus Ogilvie Smals, Chairman,
CBI Competition Panel
Now that the Committee has completed its last
hearing, we thought it might be of assistance to the Committee
for the CBI to make some closing remarks based on the evidence
submitted.
Firstly, we have been struck by the impressive
quality and number of submissions made, which we feel have fully
justified the Committee's decision to hold its enquiry. The CCBE
commented that it was an excellent idea and it will certainly
contribute to the reform that is manifestly needed.
The special characteristics of mergers have
been recognised and the Committee has commented that if they are
not decided quite rapidly and finally, the passage of time destroys
the subject matter. We have stated that the period for an appeal
on a merger decision should not exceed six months and this has
not been controverted by any of the other evidence. It is notable
that the European Commission has referred to the legitimate objective
of aiming to reduce the review of merger cases to six months.
The need for a tight timetable for reviewing
mergers is recognised in the administrative procedure of the EU
Merger Regulation. But as Sir Christoper Bellamy put it, at the
end of the administrative stage, the procedure then drops off
a cliff and disappears into a judicial void, from which it may
not emerge for a considerable time. His view was that the present
situation is not acceptable and we can only agree.
The Committee focused its enquiry on three possible
routes for reform, which we summarise as follows:
1. IMPROVEMENTS
TO THE
PRESENT PROCEDURES
OF THE
CFI
A number of suggestions were made by Sir David
Edward, the CCBE and others to improve case management, the rules
of procedure and the translation of documents. However Judge Vesterdorf
indicated most specifically that the reviews of merger cases are
already being handled in the shortest time practically possible
under existing structures.
He publicly stated at a conference last October
that he did not expect the record time for reviewing the EDP case,
of seven months (or nine months including the two months for lodging
an appeal), to be bettered in future merger cases and that this
was very much a "one off".
Consequently, it does not appear to us that
the objective of a judicial review period of not more than six
months will be achieved by this route.
2. A SPECIALISED
COMPETITION CHAMBER
OF THE
CFI
This was advocated in several written submissions.
However Judge Vesterdorf concluded that this idea is not realistic
and is a non-starter. Sir Christopher Bellamy also said that at
least two specialised Chambes would be needed and had similar
misgivings.
3. A JUDICIAL
PANEL OF
THE CFI—AN
EU COMPETITION COURT
In its preliminary views, the European Commission
stated that it did not believe the potential advantages of a judicial
panel justified such an important change in the present judicial
structure of the EU. The Committee has also been concerned to
explore whether or not this would be a sledgehammer to crack a
nut.
The CBI was also sceptical initially but has
come round to the view that this approach, based on the opportunity
to start again with a clean sheet of paper, offers the best way
forward. This is not only for the relatively small volume of merger
cases, however important they may be, but because timely judicial
review is essential in any administrative system of competition
law.
This is currently wanting and results in a chilling
effect on parties, who do not accept the Commission's position.
The present system potentially fails to adequately restrain the
administrative discretion of the Commission in such cases.
We suggest the CFI's evidence about its rapidly
increasing workload serves to underline the need for further reforms
and for the need to plan ahead. A judicial panel was foreshadowed
in the Report of the Working Party on the future of the EC court
system as long ago as January 2000.
As was succinctly put by the Committee, the
Competition Court might not necessarily be the best way to do
it, but it is probably the most practical if you are going to
do it at all. Having reviewed the submissions and the evidence,
the CBI firmly believes that this is the best way forward and
the only secure means of achieving what is needed within a reasonable
time frame.
An enquiry of this nature is bound to raise
a number of wider questions about the structure and role of the
various EC courts and institutions. However we have been concerned,
as has the Committee, to focus on one key proposal for reform.
Given the strength of feeling across EU business that the present
position is untenable we feel this reform is overdue and urgently
required.
25 January 2007
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