Examination of Witness (Questions 260-279)
Sir David Edward QC
13 DECEMBER 2006
Q260 Lord Mance: I just want to ask you,
Sir David, about the possible alternative approaches. It seems
to me you really advocated in your paper and orally the freeing
up of existing processes and possibly looking at some reform of
the position of the Commission. The alternative which has been
suggested is the creation of a new court, and it has been put
to us previously that that would be more likely to give, as it
has with the Staff Tribunal, procedural freedom (although I appreciate
your point about that being an internal body). It would provide
specialisation. It would get over the problem of drawing judges
from every country, which I think is the method of appointment
of the CFI in the main court. You would have a procedure rather
similar to the Staff Tribunal procedure for appointment, which
by definition would produce specialists. It might, when you have
got a smaller number of specialists, assist in solving the language
problem. The big disadvantage which I see is that it would be
a lower court if it were to follow the model of the Staff Tribunal.
I think that is inevitable in the present statutory regime, but
really one would wish for a parallel court to the CFI. I just
wondered if you would like to comment on those points?
Sir David Edward: I think if one can overcome
the juge legal problem in the Court of First Instance,
then you could move towards a specialised chamber, or a semi-specialised
chamber, with the possibility of ensuring that the chamber hearing
a case contains at least one, probably more, specialists or people
who are really familiar with the principles of competition law.
As regards specialism, may I just quote something which one member
of one of the courts has written to me about this question. He
says: "As with all specialist tribunals, there is the risk
that, knowing only their own speciality and believing that only
they understand it, they develop that law in total isolation and
invent principles and practices which take on a life of their
own and gradually diverge first from general principles and then
from common sense". I think there is an element in that—this
notion that the world will be better if there are no generalists
and it is all done by specialists—that I am sceptical about
from my own experience, because after all I started in coal mining
and ended up in the Court of Justice.
Chairman: I think many of us share that
view.
Q261 Lord Burnett: We have heard many
complaints about the system and the delay in it and many witnesses
have ascribed that to the need for translation. Is it just a simple
answer to the problem to get more translators?
Sir David Edward: To some extent, yes. The translation
services are under-staffed. There is now a recruitment problem
because in the Court they have to be lawyer-linguists. So they
have to be lawyers as well as linguists, and if somebody is capable
of translating fluently from two other languages into English
and is also a qualified lawyer, they do not necessarily find the
life of a monk in a building in Luxembourg particularly attractive.
So there is a recruitment problem. If I could just give you an
example: at one stage when I was there we asked for one more translator
per language division—there were 11 at that time—and
the Council and the Parliament permitted us five—in other
words we could have one more for five of the divisions but no
more for another six. It is that kind of irrational approach to
funding which does make life extremely difficult. If I could just
touch on this, the Court's proposal was that we should be given
an envelope of funds within which the Court could be run, but
not have a situation in which we had to clear all funding line
by line with three other institutions, because that is what actually
happened. To vire funds from telephones to computers required
it to go through the Commission, the Council and the Parliament.
Q262 Lord Bowness: Sir David, if I could
just go back to the point you made that a specialist court might
not be desirable and just perhaps ask you if you could expand
a little on the paragraphs in your written evidence in which you
make it very clear and you say: "Some discussion of a Competition
Court misunderstands the place of competition law in the context
of EU law as a whole". I do think that some of the witnesses
we have had discussed it in terms of competition law in the UK,
or anti-trust law in the USA, and I think for me personally it
would be helpful if you could expand on those paragraphs, highlighting
perhaps the nature of the difference and why we are wrong to be
seeing it in terms of UK or USA law.
Sir David Edward: In the USA anti-trust law
started with the Sherman Act in the 1890s. It was very specifically
directed against the "trusts" and it has developed in
a way particular to the United States, but anti-trust is not part
of the Constitution. Correspondingly, in Britain competition law,
as you know, has grown up historically relatively recently and
it is only in the last decade that the structure of competition
law has taken the form it has, but it is a statutory system, and
again it is not constitutional. In the EU system competition law
is part of the Treaty, and therefore to that extent part of the
Constitution, and the role of competition law is in relation to
private undertakings what the four freedoms and freedom of movement
are to state actors. Then there is the other aspect of state-related
competition law, which is state aids. It is all closely interlinked
in the weave of the Treaty. The danger is that if you are looking
at competition law in isolation, by which people tend to mean
Articles 81 and 82, the control of private undertakings, you overlook
the wider aspect of competition law, which is intended, apart
from anything else, to avoid partitioning of markets and to contribute
towards the opening of a single market. That is the reason why
I think fundamentally there is a difference.
Q263 Lord Lester of Herne Hill: I think
what you are saying, Sir David, is that there is a danger in compartmentalising
one particular area of law which has to be on good terms with
more general principles than other areas of law?
Sir David Edward: Yes.
Q264 Lord Lester of Herne Hill: In your
written evidence you suggest some limited palliatives which might
help, and I wonder if I could ask you about a couple of them.
One of them is in paragraph 4.7. As you probably know, in the
UK the Government, rightly or wrongly, makes the user pay for
the use of the court system instead of the general body of tax
payers. You are suggesting, I think, in 4.7 and 4.8 that commercial
users in cases involving, for example, mergers and acquisitions,
might be invited or compelled to contribute towards costs. That
seems to me, in that context, attractive. Does that seem to you
to be something which has any future in it?
Sir David Edward: As I have said in 4.8, I have
two considerations in mind. One is that it would help the Court
to overcome the budgetary constraints so that it would be possible,
perhaps, to direct more funding towards translation, for example,
but it could be a disincentive to unmeritorious appeals. The argument
has been put in the evidence before the Committee that the issues
are so big in cash terms that being found liable in costs would
not be a disincentive. I am not entirely sure that is true as
far as lawyers are concerned. A lawyer does not like to come out
of proceedings, I think, where his client has to pay the costs.
But really this point here is a completely different one. In Germany
the court fees are (or at least used to be) higher than counsel's
fees, so the idea that you should pay for the use of a court is
not foreign to the Member States.
Q265 Lord Lester of Herne Hill: Secondly,
you suggest something like the wasted costs order as a way of
penalising naughty lawyers. Do you think that rather attractive
idea, even to someone like myself who practises law still, has
any confidentiality within the EU?
Sir David Edward: John Temple Lang says probably
not. As I said, I think lawyers on the whole do not terribly like
to have to tell their clients that they have got to pay a wasted
costs order.
Q266 Lord Lester of Herne Hill: For that
very reason, is that not a very good idea?
Sir David Edward: Yes. As I have pointed out
in the paper, the chances for the Court to mulct anybody in costs
are extremely limited, but when I suggested to some of my colleagues,
"How about we try and move this forward and get some power
to mulct people in costs?" they thought this was a very shocking
idea, very Anglo-Saxon.
Q267 Chairman: We had better just clarify.
A wasted costs order here is an order against not the party, who
will be paying anyway if they lose, but the lawyer. Nobody is
contemplating that. You are contemplating ordering it against
a party who takes needless time?
Sir David Edward: Yes.
Lord Burnett: That might be questionable,
my Lord Chairman.
Q268 Chairman: But that is your concept
of wasted costs? We had better clarify it.
Sir David Edward: Yes. It is a form of wasted
costs.
Chairman: Exactly.
Q269 Lord Lester of Herne Hill: But there
is no reason why it could not apply to lawyers as well?
Sir David Edward: Oh, no, although it would
be rather more difficult.
Q270 Chairman: That is just a stage further
and would be even more unpalatable, no doubt, to those there?
Sir David Edward: Yes.
Q271 Chairman: Now that the CFI has offloaded
the Civil Service Tribunal, as I understand it, it is itself exclusively
a competition court in the wider sense?
Sir David Edward: No, because it is dealing
with any attack on any decision of an institution which is not
brought by a Member State.
Q272 Chairman: What proportion of its
work is, in broad terms, competition?
Sir David Edward: The trade mark cases now represent
about 50 per cent of the CFI docket and the point has been made
to me that if that is removed to a Trade Mark Tribunal—and
you would have to consider the Trade Mark Tribunal vis-a"-vis
the Appeals Tribunal in Alicante—but if that were removed,
then you would have very much less case load in the CFI.
Q273 Chairman: It may be in the President's,
Judge Vesterdorf's letter.
Sir David Edward: I do not have that.
Q274 Chairman: The point perhaps is that
there is already, therefore, at least some degree of specialisation.
Most members of the CFI, necessarily by the very nature of their
general workload, have to be in a broad sense competition lawyers,
is that right?
Sir David Edward: That was my experience. Even
when I went there at the very beginning, I suppose the majority
of the Members had not actually done competition cases, but it
was not difficult for them to become aware of the basic principles
of judicial review of competition cases.
Q275 Chairman: What you would quarrel
with is some sub-specialisation in the lower court to create a
judicial panel to do exclusively some aspect of competition law?
That you would think an unhealthy development?
Sir David Edward: I would say that personally
I think there should be some generalists as well. I do not like
pure specialist tribunals, unless they are, for example, like
the Inland Revenue Commissioners (as they used to be)—but
even they were not entirely composed of specialists.
Q276 Chairman: So am I right in thinking
that overall if you are looking to the need for more judge power
you would prefer to find it in additional chambers at the existing
level of the CFI?
Sir David Edward: If you need more judges. Both
Sir Christopher Bellamy and Judge Vesterdorf have pointed out
the extraordinary difficulty there was in persuading the Member
States to appoint less than another total raft of one judge per
Member State if the number of members of the CFI was to be increased,
and there is a tendency for every Member State to say, particularly
since Nice, "We must have our judge, so if you are going
to have more, each of us must have one more". But I think
the Staff Tribunal has broken into that mentality and I think
you could add more judges if necessary.
Q277 Chairman: To the CFI?
Sir David Edward: To the CFI, but the difficulty,
of course, is the nomination procedure to ensure that, if it is
necessary, they should be competition specialists, or some of
them. But it is perhaps also important to remember that coming
up fast on the outside is this problem of state aids and, as one
of the witnesses pointed out, the problem of fast decision of
state aid cases is actually economically extremely important.
Q278 Lord Mance: Do you think, Sir David,
that the time is ripe when one might contemplate different appointment
procedures for the CFI? How would you expand the CFI except on
some sort of national quota basis?
Sir David Edward: What they did for the Staff
Tribunal, for the Civil Service Tribunal, was to put together
a group, I cannot remember of how many—
Q279 Lord Mance: Of experts, yes.
Sir David Edward: The Chairman was Leif Sevon,
who was the Finnish judge in the Court of Justice and became Chief
Justice of Finland; Sir Christopher Bellamy from this country;
and there were others. As Sir Christopher Bellamy explained, they
got a raft of proposals and then were required to suggest 14,
of whom the Council were to select seven, and in fact they chose
the top seven.
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