HL Deb 19 February 1998 vol 586 cc364-5

(" . In any civil proceedings brought under or in connection with this Part, including any Part I proceedings, it shall he a defence for a person to show that, having regard to all the circumstances, he could not reasonably have foreseen that the agreement or conduct to which those proceedings relate would constitute an infringement of the Chapter I or the Chapter II prohibition (as the case may be).").

The noble and learned Lord said: My Lords, this amendment deals with the problem, as we see it, that might result where someone, or an undertaking. has in fact been found to have acted in such a way that an infringement of the prohibitions has taken place. The amendment takes account of the fact that the actual effect of behaviour may not be known in advance and that a defence based on intent will, therefore, be unworkable.

As the Minister acknowledged during the first day of the Report stage: An abuse may be the effect of conduct on the part of a dominant company without being the intended result".—[Official Report. 2/9/98; col. 911]

Our amendment would not provide a defence on the basis of knowledge but on whether the eventual outcome was a reasonably foreseeable consequence of the course of action taken by the defendant. I beg to move.

Lord Haskel

My Lords, the purpose of the new prohibitions is to catch agreements and behaviour with anti-competitive effects. It is for the courts to determine whether an agreement or conduct breaches the prohibitions with all the consequences that that may have in civil law. It should not be a matter that depends on the parties foreseeing such an infringement. It cannot be a matter dependent on the parties' perceptions as to whether an agreement is void; or as to whether conduct that injures a third party is abusive.

Nevertheless, the notion of what could reasonably have been foreseen to be an infringement of the prohibition will of course be highly relevant in the new prohibition regime. It will no doubt feature in the director's guidance on the appropriate amount of any penalty. We are seeking to provide as much certainty as possible for businesses assessing the application of the new prohibitions. Those taking reasonable precautions will be able to stay the right side of the new regime. The prohibitions are not new concepts. They are modelled on Articles 85 and 86 which British business has lived with for over 20 years. Firms can look to existing Community jurisprudence as a guide. In addition, the director will be issuing guidance on how the prohibition system will operate.

Furthermore, if firms are in any doubt about the application of the prohibitions, they can seek guidance from the director or seek a formal decision. If the director grants an exemption in respect of an agreement, the agreement will be enforceable in the courts assuming the exemption was validly granted. Otherwise, the director's decisions will no doubt be of highly persuasive authority in the courts. Clause 56 also provides as a general rule that director's findings of fact are to be binding in court proceedings.

In view of those arguments, I urge the noble and learned Lord, Lord Fraser, to withdraw the amendment.

Lord Fraser of Carmyllie

My Lords, I am grateful to the Minister for that explanation. I shall read it carefully in Hansard. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 136B: After Clause 40, insert the following new clause