Examination of Witnesses (Questions 380-399)
JUDGE BO
VESTERDORF, JUDGE
NICHOLAS FORWOOD,
JUDGE JOHN
COOKE AND
MR EMMANUEL
COULON
17 JANUARY 2007
Q380 Chairman: Realistically, from what
you have said thus far it might be thought unlikely that any problem
that presently exists in your determination of these competition,
and particularly merger, cases is actually going to be solved
by the creation of a new competition court by way of Article 225a
panels. That seems a little politically unreal as we speak. If
that is right what do you see as the way ahead to meet such needs
as the CBI and perhaps others identify in somehow getting, first,
the decision of the Commission and then any challenge to the Court
on these decisions?
Judge Vesterdorf: If you would allow, your Lordship,
I will pass to Judge Forwood, who is one of the judges who has
had to deal with quite a number of what we call the fast-track
procedures and in particular in competition cases, to explain
to you how we try, under the existing rules of procedure, under
the existing working methods, to deal as best we can and as swiftly
as we can with these cases. We have gone to great lengths to do
precisely that.
Q381 Chairman: Of course we are happy
to hear from all or any of you. Judge Forwood.
Judge Forwood: Thank you, my Lord Chairman.
I think it might be helpful in this context if I give an anecdotal
account of the handling of some of these cases, which may give
you a flavour of the effect of the handling, and then if I make
some more general observations. The cases that I have personally
handled as a reporting judge in fast-track cases, the accelerated
procedure cases, vary from a number of merger cases, particularly
the EDP being a case which we dealt with in a period of about
seven months, and a public procurement case, which was in fact
dealt with in a period of ten weeks, moreover the summer vacation—the
pleadings arrived at the end of June and we gave our judgment
towards the end of September. I have been involved, also, in other
compositions. What I have found, certainly in the cases that I
have handled, is that by and large the timeframes have been in
general agreed with the parties at the outset of the cases. The
practice is that the application for an accelerated procedure
is made at the same time as the lodging of the substantive application
itself. There is then in practice, almost immediately, direct
contact between the Commission lawyers and the applicant's lawyers
before the Commission puts in its response to that application.
So, by the time the first, if you like, case handling meeting
takes place with the parties, firstly the parties have already
been able to identify the sort of timeframe within which they
would want a judgment for it to be useful for their purposes;
secondly, to a certain extent they may have already started to
identify the issues that would be dealt with if the case is accepted
on an accelerated procedure basis. So, if the procedure works
well with this element of cooperation there is then sometimes
some case handling to be done, perhaps a bit of judicial arm twisting—is
it really going to be useful to pursue this point, it may make
it difficult for you to meet your time targets, and so on. Thereafter,
the timetable, which in some cases I have indicated may even be
as short as ten weeks—though that is exceptional—is
what we have to work to. If I may then move on to more general
observations. From the point of view of a Judge-Rapporteur, particularly
at a time when the Court is working pretty near its maximum capacity,
the implications of accepting cases for accelerated procedure
are that there is considerable disruption for the other cases
in the pipeline and that is, in a sense, always the trade-off
that has to be made at the moment when the chamber decides whether
to accept a case for accelerated procedure or not. In the context
of the discussions that have taken place already, one of the useful
features of the trademark proposal, if that were to be the eventual
outcome, is that it would create within the Court of First Instance
a degree of flexibility and space that would enable us to handle
more of these cases—perhaps within an even more acceptable
timeframe, which does of course vary from case to case—and
without putting at risk the handling of the 99 or 95 per cent
of other cases that are not being handled according to the accelerated
procedure framework. So, if I may express a personal view, I think
that the trademark proposal could indeed be extremely helpful
if that is actively pursued, and it would enable us, possibly
with other procedural changes that are subject to regular discussions
not only with the institutions but also indeed with the CCBE and
other parties, to ensure that these fast-track cases are properly
dealt with.
Q382 Chairman: This fast-track applies
mainly in the merger cases, is that right?
Judge Forwood: Yes. The figures that we have
had since the new procedure was introduced: 84 applications for
fast-track procedures.
Q383 Chairman: Since what date?
Judge Forwood: The beginning of 2001, February
2001; 84 of which a total of 28 have been accepted. However, of
those 84 requests 21 have concerned merger cases and of those
21 requests, 17 have been accepted. So what you see there is that
17 out of 21 requests for fast-track in merger cases have been
accepted, whereas a much smaller percentage have been accepted
in other cases.
Q384 Chairman: So it is three or four
applications for fast-track in merger cases a year. Does it work
out about that?
Judge Forwood: Yes, it does. There were two
in 2005, both of which were accepted; two in 2006, one of which
was rejected but the other one was accepted and still pending.
So it is at that level.
Q385 Chairman: How many chambers does
the CFI operate, roughly?
Judge Vesterdorf: We have five chambers of five
judges and all those five chambers can sit with five judges in
more important cases but they normally sit in formations of three
judges, and that means that each five-member chamber can sub-divide
into two chambers headed by the same President. By far the vast
majority of cases are decided by three-man chambers. So we have
five out of which we make, in all, ten three-man chambers in fact.
Q386 Chairman: Roughly at any given time
there would be at most one fast-track case before any particular
chamber?
Judge Vesterdorf: At the present time we have
13 merger cases pending, if I am correct, and only a few of them—one
in fact—is being dealt with under the fast-track procedure.
In the others either there has not been any demand for fast-track
or we have rejected it.
Q387 Chairman: I was wondering whether
this principle of juge le«gal where, as I understand
it, it is just by sheer chance as to which particular chamber
a new competition case and merger challenge goes to, inhibited
the ability to deal with these cases. But on the figures you give
I am not sure.
Judge Vesterdorf: It should be known that this
principle of juge le«gal is a French concept, which,
as far as we see it, stemmed from after the Second World War in
Germany, and has been practised by the court in both the Court
of Justice and our own Court. It has led us to install a rota
system under which the cases are allocated to the chambers, but
with exceptions possible having regard to the actual workload
of the individual chambers, and also with exceptions for cases
in which there is connectivity. So, as the President, when I hand
out the cases to the chambers, in principle I would go one to
one, unless the workload of the particular chamber is such that
that chamber could not take a fast-track procedure in the present
circumstances, and then I would look at the other chambers to
see which of the five chambers is best able to accept, under the
circumstances, to deal with the fast-track case. So there I make
an exception to the juge le«gal. It does not follow
the ordinary system, and allows me as the President, to appreciate
at one and the same time the capability of each individual chamber
and also of the individual Judge-Rapporteur. We have to appoint
the Judge-Rapporteur, and therefore we need to make sure that
the one who is appointed is one who can actually do it, as Judge
Forwood described just a few minutes ago, and therefore can make
a sufficient amount of time available to concentrate on that case
and can have his chamber do the same. That demands that the other
workload allows for it.
Q388 Lord Jay of Ewelme: Following on
the same broad theme of the times of cases, can I follow up one
point that Judge Forwood made? I think you said that when you
were talking to the parties before a case started—and I
must apologise to other members of the Committee if my legal terminology
betrays the fact that I am not a lawyer—that at an early
stage you discuss with the parties, amongst other things, the
time which it would, as it were, suit them that the case should
take? My question is: does that mean in a sense that you are taking
into account the commercial considerations lying behind one of
these cases, and if there was a strong commercial argument for
a quick decision, even though it might be a complicated case,
you would be able to try and solve it within the time that suited
the parties?
Judge Vesterdorf: Yes, your Lordship, that is
exactly one of the intentions of these informal meetings at a
very early stage for the parties to a case. I myself was dealing
with two of the infamous cases which led to annulment of a merger
decision by the Commission at the end of 2002, the Schneider/Legrand
case and the Tetra Laval case. In both of these cases,
which were prohibition decisions by the Commission, there were
extremely large sums of money at stake and the parties asked for
the application of these fast-track proceedings. We called the
parties in as soon as possible, and sat down and worked out the
timetable with the parties—"Can you agree to that and
that date, on the basis that you concentrate on what are the real
and important issues of the case, and leave aside all the other
stuff that you normally send to the judge?"—and the
parties agreed to it and they respected it and we did what we
could to respect our sole commitment as to when we could hand
down the judgment, and we did just that. So it can be done but
it demands the goodwill of the parties and acceptance from the
lawyers to deal with the substantive issues, and they very often
accept that.
Q389 Lord Clinton-Davis: Do you think
that the situation that you face would be improved by, or do you
reject altogether, the idea of having additional judges?
Judge Vesterdorf: There is no doubt that in
a court which now has seen the number of cases growing continually,
and in particular with the enormous growth and increase that we
have seen last year, and the workload being as it is—I think
Michel Petite and Philip Lowe recognised that the workload is
extremely heavy—that a number of extra judges would of course
be of interest to the Court. Therefore, the idea that you could
put extra judges on the Court is evidently something that would
be useful. But it should be underlined—and I think it has
been said to the Committee—that we have tried it once before,
more exactly at the beginning of 1999, when the workload of the
Court was less than it is now. We asked for an additional six
judges, allowing for two extra chambers to be set up, and the
Council of Ministers agreed very quickly as to the necessity—they
agreed on the principle. But when it came down to deciding which
of the then 15 Member States would have the extra six judges,
the case died an undignified death before the Council.
Q390 Lord Leach of Fairford: I am struggling
a bit with the size of this problem. We have evidence here that
since the fast-track procedures were introduced that in fact there
have only been three negative merger decisions that were put up
for the fast-track procedures, and we have been told that the
CBI has identified negative merger decisions as the main problem.
Three since 2001 does not seem to me quite proportionate to the
discussion we are having, unless I have misunderstood something.
I think one survived, which was Tetra Laval and one
was abandoned, which was Schneider, and one, the Commission's
judgment did not survive, if I am not mistaken. I feel that I
am missing something in proportion here.
Judge Vesterdorf: I think the answer to that
question, your Lordship, is that one of the mistakes that has
been made, or perhaps a wrong assessment has been made in some
of the submissions, is that only negative merger decisions are
something which need a speedy decision of the Court. In my opinion,
that is not correct. Positive decisions being attacked by competitors,
leaving those who have permission from the Commission—the
green light from the Commission—in the uncertainty of whether
the accomplished merger will survive or whether they will have
to dissolve the companies afterwards, are just as important. And
of those, we have had quite a number of cases, and of those we
have also had cases in which we have accepted the fast-track procedure,
simply because it is just as important for the company to know:
can it survive or will it die later on?
Q391 Lord Mance: I was going to follow
up on the same point. We have had a useful list from Peter Roth,
QC—and I do not know if you have seen his submission—and
he records that the period stated by the CBI as being the maximum
duration for effective judicial review is six months or less,
and it is apparent that all the seven cases he gives exceed that,
and I would like you to relate that to what you were saying about
discussions with the parties to achieve an acceptable time limit,
because it does not quite correspond. Your helpful letter gives
some statistics—I am not quite sure how they match—and
you actually refer to another EDP case—I assume it is a
different one, or maybe it is the same one?
Judge Vesterdorf: It is the same one.
Q392 Lord Mance: You refer to the same
cases, probably EDP, IMPALA and I think another
case, which took seven months, possibly Endesa. So there
is a problem to my mind. Those, I assume, are the negative and
positive clearances. The second question I would like to raise
is, it is suggested by the CBI that there is a freezing effect
and also a compromise-inducing effect in the sense that the freezing
effect arises because if you know that you cannot appeal then
you do not bother because it is not going to be done in sufficient
time to make it useful, and the compromise-inducing effect means
that if you know that an appeal will take a very long time so
as to be relatively useless you may be required pragmatically
to arrive at all sorts of compromises and agree conditions that
you would not otherwise agree. Would you like to comment on that
point as well?
Judge Vesterdorf: I think it should be said
that those are among the worries that led our courts to propose,
and get acceptance, for the introduction of fast-track procedure,
because before that we had no way of giving special priority to
that type of case. I see, and I think my colleagues see, that
the main problem raised by the CBI is the problem of whether or
not one could achieve such a shortening of the time it takes to
deal with a case that you get down to these five or six months.
You have heard that our Court in the EDP case managed to do it
in slightly less than seven months—a couple of days less
than seven months—and the other main cases have been around
nine to ten months, and then there is one particular case which
took far more time. We would, of course, very much like to be
able to meet that worry to the extent that, if we can in any possible
way reduce the time further, we would be perfectly willing to
do that. But it must be said that, under the existing set-up of
the Treaty and the Statute of the Court of Justice, there are
rules of procedures that make it, in practical terms, very unlikely
that we can get much below the figure of seven months. As you
know, the applicants have two months and ten days in principle
to introduce a case. If they want to do it fast-track then they
should introduce it immediately after the decision of the Commission
and not wait until the very last minute and then ask the Court
to cut away those two months. I recognise that the lawyers cannot
normally do that because they need to have some time to study
the decision of the Commission. But we do in practical terms try
to achieve that purpose, but it is not always possible. You should
also know that there are rights of intervention that the Court
must respect. If there is an intervention, there will be confidentiality
issues very often in those cases where there is a green light,
and the competitors want to go ahead and stop the merger, and
they have all the interest in the world in stopping or slowing
down the procedures by creating unnecessary procedural problems
regarding confidentiality and other matters. So it is not that
simple. But this is once again why we try, as soon as possible,
to sit down with the parties and the intervening parties (if we
get an indication early on that there will be intervening parties)
and try to impose on the intervening parties that they do not
submit written observations, but that they limit themselves to
giving the oral presentation at the hearing instead of taking
time by presenting written pleadings which then might have to
be translated into our working language.
Q393 Lord Mance: If you could be freed
of some part of the straightjacket, which part would you focus
on?
Judge Vesterdorf: I am not sure that I have
any real choice because the present set-up under the rules that
we have do not leave us much opportunity in that regard.
Q394 Lord Mance: Is it procedural freedom
which would assist?
Judge Vesterdorf: No. I have seen a number of
submissions regarding our lack of procedural freedom. I think
that our rules of procedure, to a very large extent, with the
ten modifications that the Court has introduced over the 17 years
of its existence, have precisely been aimed at getting more flexibility
and less straightjacket, and we have by and large got an agreement
in Council on the proposals that we have made. So I do not think
there is a real problem there. It does not prevent us from continuing—and
we do that—to look at whether there is an obstacle that
is not really necessary. If there is, we will do what we feel
is necessary to get rid of the obstacle.
Q395 Lord Bowness: President, previous
witnesses here and in writing have referred to the language regime
as being a problem, and we had evidence from representatives of
the Commission who explained to us the difference between the
language of procedure and the internal working language, and the
Commission in their written evidence said that, "It appears
therefore that any delays due to translation are rather due to
the internal working methods of the Court of First Instance. If
translation is a real problem it can be tackled by the CFI already,"
and they went on to say that the CFI and the ECJ need to have
an internal working language, which so far has been French, but
the choice of internal working language can of course change by
a decision of the courts. Firstly, do you accept that the language
regime is a problem, or do you agree with the Commission's view?
Can you tell us whether you are actually free to make those kinds
of procedural changes yourselves without going to the Council,
because it has been suggested that some of the Articles relating
to the Court and the Treaties require you to do that?
Judge Vesterdorf: We have to distinguish what
we are talking about. If we talk about the language of the procedure,
then those rules follow from the Statute of the Court and from
our Rules of Procedure, and any change of the rules concerning
language requires unanimity within the Council, and that is very
hard to get. That is a fact; we cannot change that and, in any
event, I would not want to change that because it should be a
right of the citizens to introduce a case in their national language
before the Court, any court. We are now not talking just about
big companies but all sorts of applicants, who should be entitled
to introduce their case in one of the official languages. A second
question, a quite different question, is the question of our internal
working language. That internal working language for historical
reasons is, and has always been, French and you should know that
the Court of Justice, which is now somewhat more than 53 years
of age—if that is the correct figure—has, for all
of these 53 years, itself in its internal administration built
up the administration on the basis that French is, and has always
been, the working language. This means that, if you were to change
that working language you would have to change considerably, as
regards the overall administration of the Court, all the various
language sections, and that would mean major complications. But
formally there is nothing preventing the Court from deciding either
generally to have another working language, or in a specific case
to have another working language. As to the first part of your
question, whether this is a real problem, of course one cannot
deny that if you get pleadings introduced in a language other
than the working language—German, Danish or Finnish, anything—it
has to be translated into our working language and it takes some
time. That is inevitable, particularly so since the linguistic
divisions of the Court for years have been suffering from under-staffing.
But the budgeting authorities have over the last years given us
extra manpower in those divisions. It obviously takes some time.
If we talk more precisely about these cases, the cases that are
the precise worry of the CBI, that is the merger cases, and in
particular those which are the fast-track cases, it should be
known that, once there is a decision for a fast-track procedure,
all of the services in the Court have to give complete priority
to those cases. That means that all delays are shortened to the
strict minimum all the way over the board, but still there is
some time swallowed up by translation. Of course, towards the
end, once the chamber has decided on the outcome of the case,
it has a draft judgment which has to be sent off for translation
if it is in another language. But also that part is given the
highest priority in the services. I saw a submission in the paper,
I think by the CCBE, Mr Berrisch, or Mr Brouwer, who made a reference
to somebody telling him that it quite often took six months after
the judges had agreed on the result before the judgments were
out of the door. That would be an exception; that would probably
be one of the cases where we have 300, 400, 500 pages that need
to be translated into another language. That is not a normal case
and certainly not normal in the fast-track cases. I will give
you an example, Tetra Laval was introduced in English and
at almost exactly the same time as the case Schneider/Legrand,
which was introduced in our working language, as it happened.
Those two cases, which were similar in importance and complexity,
were resolved and decided almost at exactly the same time, one
being in the working language, the other being in the language
of the case, English. It did not really take much longer. If one
were to ask the question, what about the case in which we had
decided the merger case in seven, eight months, how much would
be saved if we were not to have translation of the judgment at
the end of the day? You might in the best circumstances, unless
it is a very long or voluminous judgment, shave off two to three
weeks or something like that. That is what we are talking about
in those types of cases.
Q396 Chairman: But that is at the final
stage, that is the publication of the judgment?
Judge Vesterdorf: Yes.
Q397 Chairman: I understood Sir David
Edward to tell us that judgments of the Court can be issued in
the language of the case but they almost always have to be translated
into at least English and French before being published. Can they
not be issued unpublished to start with?
Judge Vesterdorf: It is certainly not our practice
and we have not at any point in time had to decide whether the
Court could pronounce the positive part of the judgment—the
end result—and then send out the motivation later on. I
think it would be quite inconceivable to my colleagues. It would
create questions as to when would be the delay for introducing
an appeal, when would it start to run. It would probably run from
the moment you get the motivation or the reasoning.
Q398 Chairman: Without the reasoning
you cannot sensibly decide whether to appeal?
Judge Vesterdorf: No.
Q399 Baroness Kingsmill: I want to ask
a very simple question, and that is: is there anything you could
suggest that might meet some of the concerns of the CBI, which
is principally delay? Is there anything you could suggest that
falls short of creating a new court but which would address some
of their concerns?
Judge Vesterdorf: I think I should answer this
way: you have read all the submissions that have been presented
and much has been made of the possibility of creating specialised
chambers and specialised chambers being able to some extent, at
least, to get the same efficiency and gain experience and repetition
of certain types of cases. That might be done. There are, however,
practical problems of a considerable character, and Judge Bellamy
mentioned some of those practical problems in his submission to
this Committee. One of the problems is, as we know, that competition
cases and in particular merger cases represent a very, very small
part numerically of the cases that we have to deal with. Setting
aside a specialised chamber to deal specifically only with merger
cases would be a non-starter because one year they might have
nothing to do and another year they might have 15 cases arriving
at the same time and in that case they would not be able to cope.
Setting up more specialised chambers to deal with more general
competition cases we would be unable, in practical terms, to do
with the number of judges that we have and the number of chambers
that we have. All of the judges at the Court at the present time
have several competition cases, big cases in which they have 19
to 20 companies going before the Court. Imagine that all those
cases would be sifted down to only six judges in two chambers,
and hoping that these judges would be able to get the case out
more swiftly than we can do now—it is not really realistic.
That brings in again the question of whether we should then have
extra judges? If we get extra judges that problem would be less
of a problem.
Judge Cooke: If I could add there a related
observation? If the concern is about the average time it takes
to deal with cases, it is very difficult to identify any one factor
because there are a number of factors, whether it is translation
or other factors. In my experience, one of the elements which
contributes most to productivity is the stability of composition.
I have been 11 years in the Court and I have had the privilege
of sitting for a good number of years with the same two judges
in the three judge formation, and one of the things I have noted
is that within a year or two of sitting with the same two judges,
a mutual confidence builds up in the working methods of the judges.
You get the reporting judge's analysis of the problem: if a judge
you know and trust tells you that there are 17 grounds of appeal
in this case but only numbers five, seven and nine are of any
real importance, it saves you a huge amount of work. So if you
have stability of composition in the chambers, three judges working
together produce more over the years they sit together. To be
perfectly frank, one of the factors that militates against this
is the six-year mandate of the judges. Every three years, half
of the composition of the Court is subject to a renewal and that
has a practical consequence. We are now 27, this year 13 judges
are up for renewal. So that really in the last six months leading
up to September, an uncertainty hangs over those formations in
which judges up for renewal are sitting, and the practical consequence
of it is this. By and large, for most cases other than cases that
are being heard in French, from the moment that the reporting
judge is ready to go to the chamber conference with his preliminary
report and fix a date for the hearing, you really have to allow
something between four and six months between that point and the
delivery of the judgment because you have to give six weeks' notice
to the parties of the hearing and you have the drafting of the
judgment and the internal proof reading of the judgment and you
inevitably have translation of all the non-French cases. So that
really, from six months prior to the three-year renewal, you have
this element of uncertainty. At the moment we have 13 judges up
for renewal in September and we know already that two judges will
not be resuming—one is going back to his own country and
the other one is retiring. Those two happen to be Presidents of
chambers and, as Judge Vesterdorf was saying, in the present working
arrangement, we have five chambers and five judges, four judges
plus a President. The President sits with judges one and two in
formation A and three and four in formation B. As a result of
the non-renewal of two Presidents, you effectively have the work
of ten reporting judges in suspension from roughly February/March
onwards, because you cannot fix a date for a hearing in the case
in confidence that you will agree a judgment, get it translated
and deliver it before they depart in September. So this is one
of those practical considerations which is operating in the way
in which the Court is structured. I know it is outside your concerns
but if you ask me, from my internal knowledge and experience,
what are the sort of factors that affect the time it takes to
get through a case, that is one, and I do not think it has been
mentioned in the submissions you have.
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