Examination of Witnesses (Questions 100-119)
Mr Onno Brouwer and Mr Georg Berrisch
29 NOVEMBER 2006
Q100 Lord Jay of Ewelme: If you were
to move to a system such as you are advocating in which you would
have a Court which consisted of chambers which were known for
doing certain specialised activities, then that would in itself
begin to solve this problem, would it not, because if you have
got judges and assistants and so on who know more about and who
have dealt with competition cases in the past, they would be able
to deal with it more quickly? Is that true?
Mr Brouwer: That is certainly a very reasonable
assumption. The future will tell whether it is true.
Q101 Lord Jay of Ewelme: True is
big word.
Mr Berrisch: It should be a logical consequence
that it speeds up the process.
Mr Brouwer: I do think that efficiencies are
also gained with good case management and other measures, irrespective
of whether we are dealing with a specialised judge or a non-specialised
judge. I would put the emphasis on how to manage a case.
Q102 Chairman: What would be the particular
steps you would take to improve the already expedited procedure
in respect of these particular cases? Where is the scope to really
speed up these processes?
Mr Brouwer: We think a lot is to be gained if
the party in the case at an early stage who wants to make an application
requests an accelerated procedure, because the deadline for appeal
now is two months. We have also seen in the observations here
that on the one hand that might seem quite long, we tend to think
that often that time is needed—
Q103 Chairman: Two months from the Commission
to the Court? When the Commission decides, you have got two months
for any interested party?
Mr Brouwer: Two months and 10 days basically
to appeal, but it would probably assist the process if a party
could indicate quite early whether it will appeal and also indicate
that it wishes to have an accelerated procedure. We think that
one could even be very creative and one could have at a very early
stage maybe an exchange with the Court to actually introduce the
Court to the case, and maybe be able to draw up the key documents.
When an appeal is lodged and a request is made to have the very
accelerated procedure, then at a very early stage you could sit
down with the judge rapporteur who will deal with the matter and
see how the case is going to be conducted. To have a swift answer
also from the Court, "Yes, you will be granted an accelerated
procedure," (and for merger cases it is almost self-evident
that there should be an accelerated procedure) those are the steps
where both the Court and the party will gain. I think the Court
will also be quite strict with parties and say that if you want
to have an accelerated procedure your application should be well-drafted
and not contain 10 grounds for annulment, and you should not then
start a discussion on all points and you should restrict yourself
on what is the essence of your objection. In order to have a fast
track it requires organisational measures and case management
from the Court, and it also requires self-restriction from the
parties who want to bring that action to litigate in an efficient
fashion.
Q104 Chairman: Might one party have an
interest in obstructing and delaying the process? Is that generally
the case? Is there generally somebody trying to slow down rather
than expedite the process?
Mr Berrisch: I have not come across cases where
somebody deliberately tried to slow down a process, and I think
there the Courts should be equipped with all means to stop that.
Q105 Chairman: In your experience that
does not happen?
Mr Berrisch: I have not come across a case where
I have experienced that, and in a merger case the only party that
could have an interest to slow down a process is a competitor.
Of course there the Court should have all means, particularly
in the fast-track procedure, and I think they have it, to compel
competitors that intervene to restrict the time during which they
can make submissions, to restrict the length of the submissions,
to ensure that this does not cause any delays. The problem could
arise in a case where a merger is approved and a third party challenges
that merger. There one could think about the possibility of giving
the merging parties as interveners the right to request an accelerated
procedure to make sure that this case is then decided very quickly,
so they do not have a Sword of Damocles of a negative decision
hanging above their transaction. They can pursue their transaction
of course, but if the Court decides against them, the result could
be that they would have to demerge, and of course that is also
not a pleasant idea.
Q106 Chairman: We are talking about 19
blocked cases, are we not? In how many other cases where the merger
has been approved by the Commission has a third party then sought
to challenge that before the Court of First Instance?
Mr Berrisch: I am positively aware of one case
in which I personally was involved and one case that was recently
successful in which I was not involved, and I think that was the
first case, if I am correct, the Impala v BMG and
Sony case where a challenge by a third party was successful.
Q107 Lord Bowness: Forgive me, I may
have misunderstood but you seemed to be saying that the period
of two months and 10 days for an appeal could, if that was shortened,
speed things up, but presumably most of these appeals are by parties
who have had their merger blocked? There is nothing presumably
to stop people appealing two days after the Commission's decision
and applying for a fast-track procedure; is that correct?
Mr Brouwer: That is right and I certainly created
the wrong impression if you thought that I was suggesting that
the outline for appeals should be shortened. The purpose of my
observation was to say that it would help the case management
and the process if a party which is going to appeal and would
like to apply for an accelerated procedure—and this is after
merger has been prohibited so the party then applies to the Court—that
they indicate that to the Court early and there is a discussion
with the Court on how that case is to be dealt with.
Q108 Chairman: A sort of pre-appeal notification
so that they indicate before the necessary formalities, and it
presumably takes a lot of time getting an appeal process before
the Court, but if you tell them in advance that you are going
to be appealing; please we want an expedited process and get this
case into the list before even the appeal documents are ready.
That is basically your suggestion. What other improvements to
the existing super fast-track procedure do you recommend?
Mr Berrisch: I would add one thing to the suggestion
just discussed. Part of the problem with the Community judicial
control system is that when you launch your application you have
to set up all your grounds in your application and you have to
put in all the evidence together with the application because
you have very strict rules of what you can introduce later in
the process. When you want to apply for the fast-track procedure
you have to file your fast-track procedure request together with
your application. Taking into account the now very strict requirements
by the Court on how to present your case, to meet the formalities
in a complex case can take three or four days because there is
a lot of detailed work you have to do. It makes it very difficult
to submit an application in a complex case within a shorter time
than the two months and 10 days you have, particularly if the
parties are not based in the European Community but somewhere
else in the world. What could help is if you have a system like,
for example, in my home country, in Germany, where you can launch
an application to say that you appeal. You may want to set out
briefly the grounds, but you can submit your detailed reasoning
afterwards. That triggers an obligation on the authorities to
send their file to the Court so the Court and judge who deals
with the case can get involved with the case and can really get
up to speed and can use part of the two months to learn about
the case and the issues that are likely to be presented to them.
In general, that is probably less a problem with the current fast-track
procedure because there is more flexibility, but it is a problem
in many other cases because this is not a front-loaded procedure.
However, a lot of things are happening before the judges look
for the first time in detail at the case, so the parties receive
normally very little guidance during the whole procedure as to
what issues the judges consider relevant and what issues the judges
do not consider relevant. It would definitely be helpful if one
had an early meeting with the reporting judge where one could
discuss the case and get at least the views of the reporting judge
as to what is relevant, and then you can focus on or drop certain
arguments or elaborate in more detail the arguments that you feel
have some merit with the Court. That would save an enormous amount
of resources because it would free the judges from having to deal
with all the arguments that are presented because they could focus
on the relevant ones. At the moment, for the practitioner, it
is always a very difficult decision what to present in your application
and what to focus on because you cannot put something in afterwards
if you have a very good idea and bring it forward because if the
judge says you are not allowed any more, this is not good.
Q109 Chairman: I follow all that and
it seems such obvious good sense, so it is difficult to understand
why it has not already been the subject of discussions at one
of your four yearly meetings between the CCBE and the Court and,
if so, what reaction has the Court given you?
Mr Berrisch: I can assure you it has been the
subject of discussions. It has also been the subject of discussion
at a seminar that we conducted two years ago and organised together
with the Court of Justice and the Court of First Instance, where
the same ideas were presented. The reason why it probably has
not been taken up is that it would require a pretty dramatic change
to the way in which the Court currently approaches the cases.
That is my best guess of why the Court has not followed these
suggestions, but I think that is a question you may want to pose
to the judges of the Court.
Mr Brouwer: We both come from jurisdictions
where actually if an administrative authority takes a decision
and the company involved or the person involved goes to court
to challenge that decision the first thing which will happen is
that the authority which took the decision will transfer its entire
file to the Court, so the Court has the entire file. In the Luxembourg
procedures we do not have that. If the Commission takes a decision
imposing fines or if the Commission takes a decision prohibiting
a merger and that decision has been challenged, it is not as a
matter of course that the entire Commission file goes to the Court
so the Court has all the documents, but the parties lodging the
appeal actually have to extract all the evidence out of that file
because if you do not do that then the Court cannot pay attention
to it. I think there are certain improvements one can make. It
is just a question of why could not simply the whole file be transferred
to the Court and then we do not have that issue any more and we
may then be able to file earlier on something.
Q110 Chairman: There must be a downside
because you do not have to translate the whole file.
Mr Brouwer: No because you could still determine
before the Court this document is important and you can translate
it. You can have a discussion with the Court on what you think
the key documents are. In a case management meeting with the Courts
you could discuss those issues, but you would still have (like
we have now) upon application and later upon reply and rejoinder
the possibility to submit documents.
Lord Lester of Herne Hill: I am not sure
whether I am the only person on the Committee who has had the
experience of arguing in front of the two European Courts—
Chairman: I certainly have had it.
Q111 Lord Lester of Herne Hill: I must
choose my words very carefully in what I am about to say as a
question, but it is my experience that European lawyers, including
UK lawyers, arguing cases in front of especially the Luxembourg
Court have little sense of the need to be concise and focused
and to focus on only the really important issues. Sir David Edward
in his evidence touches on this as one of the main problems and
I find that the judges in Luxembourg do not exercise the kind
of disciplinary control that someone like our Lord Chairman would
exercise over me if I were in front of him wasting court time
or dealing with issues that were subsidiary, and indeed I think
I can say that he is a past master at disciplining people like
me! My question is what on earth can be done because one of the
points Sir David Edward used to make to us in training in my chambers
was do it in 30 pages, remember that the annexes are a complete
waste of time because they are never read and they go straight
into the waste paper basket, so do it in less than 30 pages. Is
there some way in which you as a great association can train European
lawyers to do a better job and in which one can as a user of the
Court get these kinds of points across to the judges? It seems
to me that it is the cultural problem that is the fundamental
problem rather than the judicial architecture of the procedural
rules.
Mr Brouwer: My Lord Chairman, I have to say
that we have done a lot to improve this because in the delegation
of the CCBE we have been very conscious of the fact that applications
and pleadings had to be more concise. We have had very fruitful
discussions with the Courts on that point and that has also resulted
in the Court of First Instance and also the Court of Justice actually
adopting practice directions because it was felt that was the
best way to communicate to the Bar. You will see in those practice
directions it says an application, in principle, should not be
longer than 50 pages, unless you have very good reasons, and you
should not repeat your arguments during the hearing. All that
is being set out in the practice directions and you will see in
the practice directions that those have been discussed with the
CCBE, so the practice directions have been adopted after consultation
with the CCBE on those points. We think it is good to have practice
directions and we are playing that role of telling the Bar to
be more concise and are in favour of such practice directions.
At the same time we still have issues we need to discuss with
the Courts and which we will be doing, like how oral hearings
are conducted. Oral hearings before the Court of First Instance
are excellent but we have just adopted a paper which will also
be published to say that oral hearings before the Court of Justice
would be greatly helped if they could be conducted in a way that
one can focus on the real points, that we know in advance have
the interest of the judges. Those are all points where improvement
can be made but a lot has been done with practice directions.
Lord Bowness: Gentlemen, my experience
of court proceedings is probably both out-of-date and certainly
not at the elevated level of my distinguished colleagues. The
thing that worries me about your description of having the file
transferred and going through it at an earlier stage is where
do the other parties feature in this? Are you not going to have
an extraordinarily complex set of procedures for that aspect alone?
It is not just for one party to decide which documents are relevant;
surely somebody else is going to have to be involved in this.
One party's view of what is relevant is rather different from
the other party's view. Are we not going to build quite a complex
structure to deal with that, as it were, preliminary element?
I may be wrong but it is a question that occurs to me.
Q112 Chairman: Satellite disputes about
documents.
Mr Berrisch: You could certainly take guidance
from looking at Continental courts' procedures as to how that
works in practice. You will, of course too, in your application
to the Court have to identify the documents you want to rely on
in support of your case. You will just be relieved from the burden
of having to send all of these documents to the Court and the
Court will also have the benefit of looking at other documents
that the Court might find helpful. Third parties intervening could
then say that you are only presenting part of the picture and
the Court should also look at other documents that are in front
it. Maybe as a clarification of what has been discussed a while
ago, currently the annexes to an application are never translated
into the Court's internal working language. It is only the application
itself that is translated.
Q113 Chairman: Can we turn to the question
of composition and location of any new panels or chambers. What
qualifications do you think that the competition judges should
have and need they be lawyers? Is that an anachronism? Dr Bishop,
as I think you know, suggests there should be economists, as apparently
France now has, with the vice president of the French competition
court being an economist?
Mr Berrisch: Our view is that we believe they
should be lawyers because it is still a legal proceeding and a
legal process, a judicial review of the case, and that the Court
should have other means given to it to obtain, where necessary,
expertise in non-legal areas—technical areas or economic
questions—by appointing experts or by other means.
Q114 Lord Jay of Ewelme: How would you
do that because the nature of the cases you are looking at here
are ones which are going to have huge impacts on companies and
there are considerations other than the purely legal which may
need to be brought to bear? So how would you get the economists,
the accountants and those who have got a first-hand view of the
commercial aspects sufficiently associated with the case so that
their expertise can be brought to bear?
Mr Berrisch: Currently you have a legal judicial
administrative review process so the Court would not (at least
not openly) take political decisions to say something should go
ahead for that and that reason. The Court would only look at whether
the Commission correctly evaluated the evidence that was before
the Commission and provided a coherent reasoning for its decision.
If the Commission does that and if that decision is not against
the law, the Court should approve the decision but not take a
different decision on economic considerations. The Court could
of course appoint economic experts to help it to understand the
evidence that was put before it and whether the Commission has
correctly evaluated the economic evidence of the case.
Q115 Chairman: Has it ever done that?
Mr Berrisch: I think it has done that.
Mr Brouwer: I think it is also important in
the administrative process before the Commission that parties
of course have economists—
Q116 Chairman: As experts?
Mr Berrisch: So the parties dealing with the
Commission have economists on their team, arguing why the merger
should be allowed, and interveners why it should not be allowed.
Thus, there is a lot of economic evidence already at that level
in the debate and then DG Competition has a chief economist and
also has its own team of economists looking at it. Before a decision
is taken, there has been an extensive debate also on those economic
theories and application thereof by the Commission. It then goes
to the Court and those experts will be involved at the parties'
side in the procedure and, as has been indicated, the Court can
also, if it wishes to, nominate its own experts. It has been suggested
maybe you could have a system of rapporteurs so you could appoint
an economist as an assistant rapporteur and that might be a good
idea to explore. We think these are ways to deal with expert evidence.
Q117 Lord Lester of Herne Hill: Could
you help me by explaining what kind of questions the Court has
to decide on? What is called a review? Are they legal questions
in a formal sense or are they not questions about whether a merger
or acquisition is in the public interest—a question which
involves issues of economic policy which are not just for lawyers
to decide but for which, for example, economists are also well-qualified.
I ask the question because I remember when we first set up our
restrictive trade practices court, in those days people like Sir
Basil Yamey were full members of the Court sitting as a high court
judge dealing of course with the public interest in that context.
My question really is going back to Lord Jay's question; what
exactly is the Court doing when it reviews? Is it looking at narrow
legal questions or broader public interest questions?
Mr Brouwer: The criterion on which the Commission
takes a decision is to see if the merger or the transaction leads
to a substantial lessening of competition in that market, so you
look at the transaction you have in front of you and what the
consequences are of that transaction for competition in the market.
So it is not really a question as to whether this would be in
the public interest or not. It is a very clean and clear test
of competition; is competition affected. That being said, I think
we see that often in these appeals the grounds for annulment have
to do typically with legal process. Was the Commission right in
ignoring or accepting certain arguments? Is the reasoning which
has been given sufficient to actually support the decision or
not? In other words even if you may have very economic questions
in a case you often have in appeals very legal questions as to
whether the process has been right and whether the Commission
has investigated properly and whether it has discharged its burden
of proof, and points like that.
Q118 Lord Lester of Herne Hill: But the
competition question is not just a narrow economic question, is
it? It can raise very wide, broader interests.
Mr Brouwer: That is just what we see in the
cases which have been conducted. The competition debate is whether
there is indeed a substantial lessening of competition as the
Commission has argued or was the Commission right in clearing
this transaction.
Q119 Chairman: Staying with this group
of questions do you see a case for national competition judges
being seconded on an ad hoc basis?
Mr Berrisch: We debated that, my Lord Chairman,
and we concluded that this would not solve the problem because
I think you also need time when you arrive at the Court in Luxembourg
to get started and to get working and we do not think this would
really be a solution in getting ad hoc secondments.
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