Select Committee on European Union Fifteenth Report

CHAPTER 3: A New Court—The Pros and Cons

The case for a new court

54.  The CBI sets out four main advantages of an EU Competition Court: [35]


55.  At the present time there are no special procedures for merger cases though, as mentioned in Chapter 2, the fast-track procedure was devised with merger cases very much in mind and a substantial number of cases heard under that procedure are merger cases. The CBI argues that the proceedings of the new Court could be tailor-made and cater specially for the need for a speedy review of mergers.


56.  The judges would only hear competition cases, so they would be expert in competition law. We should, however, point out that we received no criticism of quality of CFI decision-making in competition cases. Indeed quite the reverse; Mr Greg McMahon, MyTravel Group plc, spoke highly of the judges (and their grasp of the complex issues) in the Airtours case (Q 435). It should also be noted that under the present arrangements each chamber of the CFI includes a judge with experience of handling competition cases.


57.  A large percentage of merger cases, before the Commission and the CFI, are not brought in French, the Community Courts' working language, but in English.[36] It appears that one of the main reasons for the CBI preferring a new court, rather than a specialist chamber or chambers within the CFI, is the language regime in the CFI. The CBI suggests that the new Court could decide to deal with cases in a language other than French. Because of the importance placed on this issue by the CBI we address this further in paragraphs 59-64 below.


58.  The CFI, as the appeal court from the new Competition Court, could deal with preliminary questions on competition law from national courts which, the CBI envisages, will increase in number following Modernisation (Regulation 1/2003). The CBI argues that "this would ensure that these matters were dealt with effectively by the judges with the most relevant experience, as the ECJ would not have the same involvement with the substance of competition law" (p 2). In Chapter 6 we look in more detail at the question of the CFI dealing with preliminary references under Article 234 TEC, a jurisdiction that is currently exercised exclusively by the ECJ.

The language question revisited

59.  As mentioned, it is necessary to distinguish between the language of the proceedings, which is determined by the applicant, and the court's internal working language. Being able to break away from any need for translation into and out of French is a key feature of the CBI proposal. Witnesses recognised the potential advantages. Sir Christopher Bellamy said: "in a new judicial panel it may be possible to so adapt it that there is less need to translate because there are more judges who are able, or willing, to do the case in the original language". Sir Christopher believed that given the volume of cases in English, being able to work in English would produce substantial savings in time (QQ 194, 205).

60.  Certain practical points should be made straightaway. First, there exists, as a number of witnesses indicated, a measure of flexibility under the present regime. The DTI said: "The court can, on a case-by-case basis, decide to conduct these deliberations in another language. Logically, if the three judges have the capacity to read detailed argument and hear evidence in English, it makes sense that the deliberations are carried out in English because it makes reference to the documentation much easier. This option does not appear to be widely advertised or used" (p 132).

61.  Second, having one working language brings obvious efficiencies. It provides a common language for communication and deliberation between members of the court and reduces the number of translations and, in turn, translators needed. The Community Court system, established over 50 years ago, was and is set up to work in French. Judge Vesterdorf believed that any change would involve "major complications" and would affect not just the language sections but also the entire administration of the Court[37] (Q 395).

62.  From a formal standpoint, it should also be noted that the creation of a new Court is not necessary to effect a change in the working language. The solution is in the hands of the Court. It is not a stipulation of the Treaty, the Statute or of any Rules or other legislative instrument that French is the working language of the Court or that there should only be one working language. A switch from French to English or, as the BDI (Bundesverband der Deutschen Industrie) suggested, to include English and German (p 118), would therefore be possible now. It would, however, raise not only practical (including budgetary) concerns but also political difficulties.

63.  Sir Christopher Bellamy said: "it is extremely difficult for anyone of English mother tongue to suggest that the working language ought to be a language other than French" (Q 194). The DTI underlined the sensitivity of the language question. "The CBI proposal would allow any Judicial Panel from the CFI to set their own language regime and on first sight seems attractive but achieving [Member States'] agreement on this will be extremely difficult" (p 130). "Acceptance of a reduced translation requirement would require Council agreement and this is unlikely in the short or medium term … it seems inconceivable that a language regime can be imposed by the CFI/tribunal which is not acceptable to [Member States]." (p 132). It seems clear from these statements that although, as mentioned, decisions on working language are formally for the Community Courts themselves Member States will expect to be heard and to have their views respected.

64.  We have doubts whether the creation of a new Competition Court would resolve the problem of language because of the political and practical considerations described above. Indeed, as we have said, we are not convinced that in the large majority of competition cases language issues are a cause of significant delay.

Objections to and difficulties of a new Court

65.  A number of witnesses doubted whether a new court would bring benefits other than perhaps in the very short term. The evidence we received identified a number of objections and difficulties with the CBI proposal. Practitioners identified two major drawbacks.

Complex nature of the litigation

66.  A number of witnesses believed that the new court would soon face the same problems as the current CFI, especially if its jurisdiction were not limited to merger cases but included appeals against Commission decisions applying Articles 81 and 82. A separate Competition Court would not necessarily reduce the time taken on appeals, given the complex nature of the merger/competition related litigation.

67.  Peter Roth said: "If, on the other hand, the specialist court dealt with all competition appeals, I think it would rapidly encounter the same problems as the CFI: it is the multi-party appeals against the Commission's cartel decisions that are the heaviest, most document-intensive cases before the CFI today" (p 154). The DTI said: "Setting up a specialist tribunal or competition chamber will not change the nature of the case presented for hearing. Documentation will, depending on the case, remain substantial and argument complex" (p 132).

68.  We do not believe that a new Court would have advantages since the number and complexity of issues in the cases it handles will be as great as those currently faced by the CFI. As both the Commission and the CFI, through examples, explained to us, the CFI already has within the existing rules the capability for flexible procedures and innovation. It is clear that if the parties are prepared to restrict their pleadings to a few questions of law, their case can, with the cooperation of the Commission (which appears to be generally forthcoming), be decided more quickly. The question is whether it is possible to improve on that position, an issue which we consider further in Chapter 5.

Another level for appeals

69.  Under Article 225a EC, decisions of judicial panels are appealable to the CFI and decisions of the CFI may be reviewed by the ECJ. The IBA said: "It would be expected that many panel decisions would in fact be appealed (particularly given the Commission's interest in defending its detailed, second phase practice and procedure), which potentially calls for a specialisation within the CFI to hear such appeals. Following such an appeal to the CFI, we would expect that many merger cases would, in fact, meet the criteria of exceptionality and significance for further appeal to the ECJ. It might in any event be considered undesirable to remove the superior court from the review of merger decisions raising important issues. Creating an extra layer of review would fragment the judicial system and risks adding further delay to the overall process, thereby frustrating the core aim of the reform" (p 138).

70.  Temple Lang and O'Donoghue said: "The arguments for not adding a fourth 'layer' (in addition to the Commission, the CFI, and the Court of Justice) seem overwhelming. Creating a new layer would have the effect of prolonging proceedings if appeals were made to the CFI" (p 159). Witnesses feared that even with restricted criteria allowing appeal, as the Office of Fair Trading (OFT) projected, "the sums of money often at stake and the wider legal and policy implications of competition cases might result in the opportunity of a second appeal being taken more frequently than the narrow wording of Art 225(2) might suggest" (p 152).

71.  Peter Roth also doubted whether Article 225(2) would present a serious obstacle to a determined and deep-pocketed third party competitor or complainant: "it is often not difficult in practice to identify a point of law which would found an appeal as of right. That creates the prospect of yet further delay. This factor is of particular relevance when a third party competitor has standing to bring an appeal in the EU jurisdiction against a merger clearance (by contrast with the position in the US), and may pursue an appeal specifically to create such delay as may effectively frustrate the transaction. With the amounts at stake, merger appeals are often 'money no object' cases. Creation of a new court therefore introduces an additional level of potential appeal" (p 154). As mentioned, the merging parties and third parties do not necessarily share the same interest in the speedy resolution of the proceedings. As the DTI observed: "The issue of legal delaying tactics by third parties would not change with the introduction of a new forum" (p 132).

72.  We agree that creating a further level of appeal would not be desirable and might well lead to further delays.

Institutional and competition policy issues

73.  The Government and the competition authorities (the Commission and the OFT) raised further concerns of a more conceptual nature.


74.  The DTI thought that the creation of a new Court or specialist chamber within the CFI to hear competition cases "would be a significant institutional change with potentially far-reaching implications for competition law, both EU and national, and for Community law generally" (p 131). The Commission referred to the importance of competition law and policy in the EC Treaty (reflected in the references to competition in Articles 3g and 4 of the EC Treaty) and of tension between that importance and the creation of a new court. The Commission also spoke of "a wider concern that especially the crucial role of the Court of Justice in our judicial structure would be impaired or diminished, as its supervisory role would be distanced from the experience arising out of competition cases" (p 67).


75.  The OFT referred to "the risk of a perceived lower importance of competition cases in contrast with their constitutional, policy and economic importance". The OFT referred to the importance that the Community Courts had attributed to the Community competition rules in relation to the functioning of the internal market. The OFT said: "In addition to their constitutional status under the Treaty, competition cases often have significant economic and policy implications. In some Member States, there is provision for competition cases to be heard by a higher court than ordinary cases. If competition cases were heard by a lower Court in the EU, this would appear to be at odds with their constitutional, policy, and economic importance" (pp 151-152).


76.  The OFT expressed concern that an EU Competition Court having the sole task of deciding competition cases might be more inclined to exercise an over-intrusive review of the factual and evidential substance of decisions. There was the risk of a shift of focus of the decision- and policy-making functions away from the Commission to the new EU Competition Court. This, the OFT contended, would be at variance with the separation of functions and institutional balance envisaged by the Treaty (p 152).


77.  The OFT also spoke of a "risk that competition law could develop in a world of its own detached from the general substantive and procedural framework of EU law". OFT noted that much competition law had been developed by the ECJ in parallel with the case law on free movement (p 151). The DTI was concerned that there should be no loss of competition experience to judges in the CFI faced, for example, with State aid cases. Similarly the specialist competition judges would lack exposure to other key areas of Community law. The DTI said: "From a DTI perspective the most fundamental of the issues is the potential detachment of competition law from wider EU law" (p 131).

78.  We acknowledge the important role competition policy has to play in the maintenance of an effective internal market within the Union and note the concerns raised by the DTI and OFT. However, we do not believe that the establishment of a new Competition Court would prejudice the balance between the Commission and the Community Courts though, as Mr Philip Lowe, EC Commission Competition Directorate-General, said, there would be implications for the relative competencies of the Court of First Instance, the new Court, and the Court of Justice (Q 343).

79.  It is highly unlikely that the Commission, which has to date been so instrumental in the application of the competition rules and the development of competition policy (including the prosecution of state aids and initiation of internal market legislation opening up market access in key areas such as telecommunications and energy) would allow any devaluation of competition policy to happen. Nor do we believe the Member States, and especially the UK, would stand idly by. But there is a risk that referring merger and other competition cases to a lower court may give rise to a perception of a devaluation of aspects of competition policy.

Future prospect of a new court


80.  Finally, we would draw attention to the formal position under the Treaty. Our inquiry was triggered by a CBI proposal and not, as is usually the case, one from the Commission. Formally, under Article 225a TEC any decision of the Council to create a judicial panel can only be made "on a proposal from the Commission … or at the request of the Court of Justice".[38] No such proposal or request is on the table and it seems unlikely, absent strong encouragement from Member States or the European Parliament, that one will be forthcoming in the near future. Both the Commission and the Court, or at least the CFI, appear to be against the idea.

81.  The Commission, in both its written and oral evidence, made clear to us that they did not believe the CBI had made out a sufficient case for a new Court. The Commission had itself examined this idea back in 2003 when it had conducted its review of the Merger Regulation. They had considered the CBI's proposal and concluded that "the available evidence as regards the CFI's caseload does not show the existence of an urgent need to create a new judicial panel for competition cases" (p 66).

82.  As to the position of the CFI, Judge Vesterdorf said: "it transpired very clearly from the discussions between the members of the Court a couple of days ago that it is not the feeling that there is any immediate need for setting up a new judicial panel to deal with competition law and, in particular, with merger cases; at least, not for the time being and perhaps not for some years yet. The Court indeed finds that it is up to the task before it; also as regards merger cases. The so-called fast-track procedure, the accelerated procedure, which you have heard mentioned, has proven in our experience to be a very useful instrument for the Court, and it has, particularly as regards merger cases, allowed the Court to deal with and decide these merger cases much more rapidly than is normally the case for other cases heard by the Court, and I would tend to say—and my colleagues would probably agree with me—probably as rapidly as you could reasonably expect a court to deal with cases of such complex character" (Q 362).


83.  The CFI was set up in 1989 as a response to the problems facing the ECJ inter alia with appeals against Commission decisions in competition cases (being fact intensive) and the volume of staff cases. The Civil Service Tribunal has now been established. Competition cases, though not large in number, take up a substantial proportion of the time of the CFI because they are fact intensive and complicated. Sir Christopher Bellamy said: "If you take a very broad five-to-ten-year view, it seems to me that something like a judicial panel is inevitable in the next period and one might as well get on with starting to think about it now" (Q 172). It may be significant that Judge Vesterdorf (quoted above) did not rule out the need for the establishment of an EU Competition Court sometime in the future.

84.  We do not believe it necessary to start work now on a new Competition Court. The information and suggestions put forward in our inquiry (and discussed in Chapter 5) offer other, far more quickly and easily achievable, ways forward and we invite the Court and the Commission to consider those suggestions and the recommendations set out in this Report.

35   These potential advantages broadly mirror those identified by Judge Vesterdorf in a paper (the "2005 paper") given at the UCL Annual Antitrust Forum Conference in London in May 2005. See Judicial review in EC Competition Law: Reflections on the Role of the Community Courts in the EC System of Competition Law Enforcement, published in Competition Policy International, Autumn 2005, Vol 1, No 2. Back

36   Since the CFI was established in 1989 49.3 per cent of merger cases were introduced in English, 22.5 per cent in French and about 10 per cent each in German and Spanish (Q 429). Back

37   The Statute of the Court of Justice, the Rules of Procedure of the CFI, and the draft Rules of Procedure of the EU Civil Service Tribunal envisage that in matters of administration and financial management the three courts work closely together (see Article 6 of the Annex, Article 30 and draft Article 22 respectively). Back

38   In both cases after consulting the European Parliament. Back

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