Memorandum by the Joint Competition Law
Working Party
SUMMARY
1. This paper sets out the views of the
Joint Working Party on Competition Law of the Bars and Law Societies
of the United Kingdom ("JWP") in response to the Sub-Committee's
inquiry into the need for an EU Competition Court, as proposed
by the CBI in its Brief of 15 June 2006.
2. The JWP agrees with the CBI about the
lack of timely and effective judicial remedy in EU merger cases
and that there is a need for swifter judicial review of European
Commission decision making in such cases[62].
Indeed, the President of the Court of First Instance ("CFI"),
has himself recently acknowledged that in some cases judicial
review by the CFI of merger decisions takes too long[63].
3. The JWP also agrees with the CBI that
there is a case for swifter judicial review of European Commission
decision making in all other competition cases, although the need
for it is not as acute as in merger cases.
4. The JWP accepts, therefore, that there
may be a case for establishing an EU Competition Court to review
Commission decisions in merger cases and in other areas of competition
law (such as Articles 81 and 82 and the state aid provisions of
the EC Treaty).
5. In the short to medium term, however,
the JWP considers that it is likely to be more productive to focus
on exploring ways of achieving swifter judicial review through
quicker decision-making in the CFI, rather than by seeking to
establish a new Judicial Panel[64].
The latter objective is unlikely to be achievable in the short
to medium term because the Judicial Panels planned for (i) patent[65]
and (ii) trade mark and design cases[66]
are likely to take precedence over any Competition Panel; and,
if they do so, then as and when those Panels are established,
they can be expected to relieve the CFI of a considerable part
of its current caseload and therefore to reduce (and potentially
even obviate entirely) the need for a Competition Panel. And even
if a Competition Panel were given priority, any such proposal
would still need to be agreed by the Member States and debated/commented
on by Parliament and the ECJ, which is likely to take several
years.
6. To achieve quicker decision-making in
the CFI, the JWP suggests that ways be explored of maximising
the flexibility already provided for within the existing expedited
procedure before the CFI. Any proposals made should take account
of the substantial existing expertise in competition cases already
existing within the CFI. However, a critical aspect will be to
ensure that sufficient additional resources are made available
to enable any proposals that are adopted to be properly and effectively
implemented.
7. The JWP's view is therefore broadly in
accordance with that expressed by the Department of Trade and
Industry in its paper "Judicial Review of EC Competition
Decisions" dated 17 August 2005, ie that in the short to
medium term, the focus should be on making the most of the flexibility
already provided for within the existing expedited procedure before
the CFI.
8. The JWP also wishes to draw to the Sub-Committee's
attention two other important points in relation to the proposal
for a separate EU Competition Court/Judicial Panel:
8.1 Whilst supportive of swifter judicial
review of European Commission decision making, the JWP is concerned
that, unless confined to urgent cases and unless accompanied by
realistic and transparent rules on the costs to be paid by the
losing party, significantly faster procedures could encourage
challenges to competition decisions by well-resourced parties
for strategic or other (unmeritorious) reasons, resulting in diversion
of Commission resources into these challenges and away from other
areas. It would therefore be necessary to "set the bar"
for use of the swifter judicial review procedure at a sufficiently
high level to deter "unmeritorious" actions.
8.2 Some of the advantages in the establishment
of an EU Competition Court do not relate to procedural speed (which
was the main focus of the CBI's Brief) but are more concerned
with trying to ensure consistency of decision-making and a more
uniform application of EU competition law post-modernisation.
The problems with judicial review in merger cases are undoubtedly
important and the JWP fully understands why the CBI chose to make
them the focus of its Brief. Nevertheless, the JWP is concerned
that speed of review should not be the only factor taken into
account when considering the creation of an EU Competition Court;
the implications for other areas of competition law need to given
due weight.
Q1. Need for action at Union level
9. The JWP does not consider that it is
realistic to expect that a separate EU Competition Court/Judicial
Panel is likely to address the lack of timely review procedures
in the short to medium term.
10. Judicial expertise at EU level in competition
matters currently resides in the CFI. The JWP believes that the
objective of swifter review can best be achieved by seeking to
improve the CFI's existing procedures to enable it to operate
in a more timely manner (an objective which the JWP believes to
be achievable—see response to Q2).
11. Even if it were possible to pursue the
CBI's suggestion of a Judicial Panel within a shorter timeframe,
it should be borne in mind that there are a number of objections
to this idea in principle. These include the following:
(i) it is not clear that a Judicial Panel
would be speedier as there would still be appeals on law to the
CFI and the ECJ, whereas with the CFI there is only one further
appeal;
(ii) the composition of a Judicial Panel
raises difficult questions, whereas the CFI acting under the expedited
procedure can draw its three judge Chambers from the full membership
of the CFI; and
(iii) the workload of a Judicial Panel, if
confined to merger cases, would be likely to be sporadic, whereas
the CFI, when not engaged on merger cases, has the remainder of
its case load with which to be occupied.
12. However, over the medium to longer term,
the JWP believes that the CBI's suggestion of a Judicial Panel
of the CFI to deal with competition matters would merit further
consideration[67]
(not only because of the possibility of faster procedures and
a different working language regime but because of potential benefits
such as those highlighted in paragraph 8) (See Question 2).
Q2. Reform of the CFI
13. It follows from the JWP's answer to
Q1 that the JWP believes that reform of the CFI is to be preferred
in the short term.
14. The JWP would advocate making the most
of the flexibility already provided for within the existing expedited
procedure before the CFI. This is in line with the course of action
advocated by the Department of Trade and Industry in its paper
"Judicial Review of EC Competition Decisions" dated
17 August 2005.
15. The JWP recognises that the CFI has
itself been active on the issue of procedural improvements and
the views of the CFI should be sought separately on the procedural
innovations/efficiencies introduced within the last five years.
Nevertheless, the JWP considers that further improvements to the
timeliness of review under the current expedited procedure could
be achievable.
16. The JWP would suggest the following
as areas for consideration[68]:
(i) a public commitment from the CFI as to
the time frame for responding to requests to use the expedited
procedure[69];
(ii) strict enforcement of the limits on
the length of pleadings (and possibly the imposition of stricter
limits);
(iii) strict enforcement of the time limits
for the filing of pleadings (and possibly the imposition of stricter
limits) and encouragement of the parties to file more expeditiously[70];
(iv) commitment from the CFI to hand down
judgment within a specific period from the oral hearing; and
(v) applications to be dealt with internally
in the Court (as well as being heard) in the language of the case[71]
to prevent translation delays[72].
17. As a potential longer term solution,
the JWP believes that consideration should be given to the creation
of a specialist Judicial Panel within the CFI to deal with merger
control, competition and state aid cases. This would have the
advantages outlined in the CBI's report and paragraph 8 above
(which include, but are not limited to, speed of review). However,
as will be apparent from our answers to the remaining questions
below, a number of difficult issues would have to be resolved
before such a Panel could be created. (See below—Question
3.)
Q3. Jurisdiction of the Competition Court
19. The JWP's suggested approach avoids
the need to reach any conclusion on these issues at this time.
20. If there were to be a Competition Court/Judicial
Panel, the JWP's view is that its jurisdiction should not be restricted
to merger control cases because (i) specialist judges and tailored
procedures are just as desirable in cases involving Articles 81
or 82 and/or state aid issues; and (ii) the Panel's workload would
probably be too sporadic for it to make efficient use of the judges
at its disposal.
21. That said, the JWP believes that further
discussion of this proposal is needed to determine key issues
such as the extent of the Panel's jurisdiction, including whether
it should be confined to particular types of case or whether it
should have a wider jurisdiction than the CFI at present (eg should
it be able to deal with references from national courts under
Article 234[73]).
As indicated in the introductory remarks, it will be essential
to ensure that an appropriate balance is struck between the interests
of competition authorities, businesses and consumers at large.
Consideration will also need to be given to whether the Judicial
Panel would be likely to result in longer, rather than shorter,
proceedings because of the ability for parties to appeal to the
CFI, followed by the ECJ, on points of law. The answers to these
questions are far from obvious.
Q4. Composition of the Competition Court
22. The JWP's suggested approach avoids
the need to reach any conclusion on these issues at this time.
23. If there were to be a Competition Court,
the JWP would expect it to be staffed by permanent rather than
seconded judges, because it is important that such courts build
up a body of expertise.
24. The JWP would also expect the core of
the Competition Court's judicial personnel to be made up of persons
with relevant legal qualifications and legal experience. However,
the experience of the UK's Competition Appeal Tribunal and, before
that, the Restrictive Practices Court, would seem to indicate
that persons of requisite expertise other than lawyers may possess
"the ability required for appointment to judicial office"
as required by Article 225a, because of the nature of the particular
judicial office under consideration.
Q5. Appeals from the Competition Court
25. Appeals to the CFI from the Competition
Court would have to be governed by Article 225a, with further
appeals governed by Article 225(2).
26. As the CFI is itself effectively a specialist
competition court, there is no reason for appeals to go to a specialised
chamber. If the application to the Judicial Panel has been made
in the language of the case, to avoid translation delays, there
might be very good language reasons for having maximum flexibility
as to the composition of the chamber of the CFI to hear the appeal.
Q6. Future role of the CFI
27. It follows from the JWP's evidence that
the CFI need not to be freed from the burden of hearing competition
cases at first instance, at least in the short to medium term.
28. However, if the other Judicial Panels
(patents, trade marks and designs) are set up, the CFI will be
freed from the burden of those cases, and might then be in a position
to hear references under Article 234 EC in competition cases (pursuant
to Article 225(3) EC). While this would seem to be a logical extension
of the Court's jurisdiction, given its expertise in competition
matters, there would be problems in identifying such cases as
those referred to the ECJ are not always exclusively limited to
competition law points and guidance may be sought by a referring
court on a number of separate issues of EU law, of which competition
forms only part.
CONCLUSION
29. The JWP agrees that there is a need
for a more timely judicial remedy in EU competition cases (particularly
merger cases). Its view is that in the short to medium term, the
focus should be on seeking to improve and accelerate the decision-making
process in the CFI but that in the medium to long term, the establishment
of a Judicial Panel of the CFI to deal with competition matters
may merit further consideration.
9 November 2006
62 However, the JWP does not consider that the time
taken on appeals to the CAT in merger cases provides a meaningful
benchmark for appeals to the CFI in merger cases, not least because
none of the appeals to the CAT has involved a "substantive"
review equivalent to that undertaken by the CFI. Back
63
In a speech at The Jevons Institute for Competition Law and Economics,
University College London, on 21 October 2006. Back
64
Under Article 225a of the EC Treaty (inserted by the Treaty of
Nice). Back
65
Although there is a proposal for a Judicial Panel to deal with
Community Patent cases, the proposed Community Patent is currently
stalled so this proposal is also on hold. One of the main reasons
for this is that the Member States have been unable to agree on
restricting the number of languages for translation purposes.
It should be noted that the JWP's proposal in Question 2 regarding
translations does not involve restrictions on the number of languages
used for applications and judgments-it concerns only the working
language of the Court. Back
66
A proposal for a Trade Marks Panel has not yet been tabled by
the Commission-although such a Panel has been the subject of some
public debate (including by the current President of the CFI,
Bo Vesterdorf). However, there are about twice as many trade marks
cases as competition cases-so in terms of reducing the load on
the CFI, it may be more administratively efficient to hive off
the former. A trade marks Panel could help to create the conditions
for faster review of competition cases because the caseload of
the CFI generally would be lighter (see Question 6), although
we understand that the current President of the CFI does not consider
this to be the solution to the problem of delay in merger cases
requiring urgent review. If it were to be relieved of trade mark
cases, the CFI might then be able to focus more on competition
cases and, in that sense, become a specialised competition Court. Back
67
This is believed to be the view of the current President of the
Court of First Instance. Back
68
The JWP has focussed on measures which could be achieved without
allocation of very significant additional resources, but one option
for increasing the speed of review would obviously be to provide
the CFI with greater resources in terms of numbers of both judges
and support staff (particularly translators, given the delays
attributable to translation-see paragraph 16, point (v)). Back
69
The JWP does not wish to suggest that the CFI has failed to respond
sufficiently promptly in practice. However, a public statement
on the matter would provide a clear yardstick for Court personnel
to work towards when handling requests for expedition. Back
70
For example, the period prescribed in the CFI's Rules of Procedure
for service of the defence under the expedited procedure is one
month (Article 76a). If the Rules were to be amended so as to
allow the CFI to reduce this period, it might be able to cut the
total time taken for review in merger cases by an amount similar
to that achieved by the UK's Competition Appeal Tribunal in similar
cases (eg in Unichem v OFT [2005] CAT 8, time for service
of the defence was reduced from four weeks to two). That said,
changes to the Rules of Procedure would take time to implement
as the agreement of Member States would be required. Back
71
The language of the case can be selected by the applicant, whereas
the Court's internal deliberations are conducted in its working
language (French). As a result, translations need to be made whenever
the language of the case is not French, which gives rise to delays. Back
72
The JWP would suggest that the extent of any alternative working
language capability be confined to one or two major languages
of the Community other than French, (to be determined primarily
by demand from users of the Court). Given that the number of merger
cases needing to be dealt with under the expedited procedure is
likely to be relatively low, the JWP believes that only a limited
number of personnel would need to be capable of using an alternative
working language; such an approach should not therefore present
insurmountable problems in terms of recruitment or resources.
As regards judges, it could probably be achieved by nominating
certain chambers of the CFI to deal with merger appeal cases on
the basis (among other factors) of the language capabilities of
the judges involved. Back
73
As provided for in Article 225(3) of the EC Treaty but not yet
in the Statute of the Court of Justice. See also paragraph 28. Back
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