HL Deb 28 October 2002 vol 640 cc12-9

3.9 p.m.

Read a third time.

Lord Kingsland

moved Amendment No. 1: After Clause 16, insert the following new clause— TRIBUNAL: REGULATIONS (1) The Lord Chancellor and the Secretary of State may together make regulations—

  1. (a) empowering the courts to transfer to the Tribunal for determination by it any issue arising in any civil proceedings the determination of which depends on whether provisions of Chapter I or II of the 1998 Act or of Article 81 or 82 of the Treaty have been infringed where, in the opinion of the court making the transfer, the transfer would be conducive to the efficient conduct of the proceedings;
  2. (b) making any rules that the Lord Chancellor and the Secretary of State may deem to be appropriate as ancillary to the power to make such transfers or to be 13 reasonably required in connection therewith and in particular, but without prejudice to the generality of the foregoing, to the effect that—
    1. (i) on making such a transfer, the court making the transfer may state facts that the Tribunal shall then treat as established for the purposes of determining the issues transferred to it;
    2. (ii) after having made its determination, the Tribunal shall remit the matter to the court that made the transfer to it, declaring the determination of that issue by the Tribunal, which, subject to any clarification or amplification by the Tribunal of its determination that may be requested by the court that made the transfer, shall then be treated as a determination of that issue by that court;
    3. (iii) enabling courts that have made, or have in contemplation the making of, such transfers and the Tribunal to co-operate together in any way that they deem to be appropriate to enable issues arising in the proceedings before them to be determined as efficiently as possible.
  3. (2) The Lord Chancellor may appoint as president and as chairman of the Tribunal judges of any of the courts provided that, before appointing a judge of the Court of Session or sheriff courts under this subsection, the Lord Chancellor shall first consult the Lord President of the Court of Session.
  4. (3) In this section references to "the courts" are to the High Court of Justice and the county courts in England and Wales and Northern Ireland and the Court of Session and the sheriff courts in Scotland.
  5. (4) The power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament."
The noble Lord said: My Lords, this amendment was tabled in Committee and on Report, and your Lordships spent a great deal of time debating it on both occasions. I have tabled it at Third Reading to try to extract from the Minister a stronger commitment than he was prepared to give on Report about dealing with the mischief against which the amendment was directed.

In responding to the Minister on Report, I said: I am slightly reassured by his reference to the possibility of using a power that the noble Lord believes he already has to cope with what is likely to happen in the European Community in the next two or three years".—[Official Report, 15/10/02; col. 788.] Will the Minister give your Lordships' House a more powerful commitment? Will he undertake to include in this Bill the power the noble Lord thinks he has, but is not sure, to make delegated legislation under Section 2 of the European Communities Act 1972 in the future? I beg to move.

Lord Borrie

My Lords, despite having missed the opening remarks made by the noble Lord, Lord Kingsland, perhaps I may speak briefly to Amendment No. 1. I apologise to the noble Lord. To coin one of his phrases, he must have been even more telegraphic than usual in his introduction.

When the noble Lord, Lord Sainsbury, dealt with a similar amendment on Report on 15th October, he said: it is realistic and desirable for the courts themselves"— he meant the ordinary courts— to build up a specialist body of law in this area".—[Official Report, 15/10/02; col. 786.] He went on to say that he did not want to see the "fragmentation" that the amendment would cause. I am not sure that those are good arguments.

There are several dozen High Court judges in the Queen's Bench Division alone and it is difficult to imagine how they could all build up expertise on competition law. Even when in future more cases are passed back to the national courts by the European Court of Justice, each High Court judge will sit alone. I cannot see how there could be a sufficient number of cases involving, for example, mergers or Chapters 1 and 2 of the Competition Act 1998 for such expertise to be spread and developed across the High Court in general.

As we all know, in many fields expertise is a matter of degree. However, in the Bill the Competition Appeal Tribunal is bound to build up a considerable amount of expertise. It will have the benefit of economists and others as members of the tribunal, not merely as expert witnesses in particular cases. They will help determine what everyone agreed when we last debated the matter are mixed questions of law, economics and fact and involve determining whether, for example, there is a substantial lessening of competition in a merger case. It is unlikely that a High Court judge, who may deal with a competition law case only once in a blue moon, can match the Competition Appeal Tribunal on that score.

I do not see how the amendment would cause "fragmentation". At the Report stage, the noble Lord, Lord Sainsbury, said that there would be fragmentation because, The consideration of civil proceedings would be split between the courts and the CAT".—[Official Report, 15/10/02; col. 787.] But it is not the amendment that does that. The Government, in Clause 17, have given the Competition Appeal Tribunal jurisdiction to hear damages cases for breach of competition law as an alternative to going to a judge of the High Court. The amendment enables that judge, conscious perhaps of his own lack of expertise in the field, to transfer the matter to the Competition Appeal Tribunal. Is not that a useful improvement to the Bill?

3.15 p.m.

Lord McIntosh of Haringey

My Lords, the amendment would give the Secretary of State and the Lord Chancellor a power to make regulations allowing the courts to transfer to the Competition Appeal Tribunal issues arising in civil proceedings that require a determination of whether there has been an infringement of competition law. The tribunal's finding on the competition matter would then be binding on the court.

We certainly do not disagree with the thesis that the devolution of the enforcement of EU competition law to national competition authorities and national courts is likely to increase competition-law-based litigation in the United Kingdom. Exactly what sort of impact it will have is unknowable at this stage, but there will undoubtedly be some. If the increase in litigation materialises, as the Bill stands the court system would have to deal with it. The key question is whether it is realistic and desirable for the courts themselves to build up a specialist body of law in this particular area.

I respect the views of the noble Lords, Lord Kingsland and Lord Borrie, that this is a matter of judgment. However, the present view of the Government is that it is, as my noble friend Lord Sainsbury said, both realistic and desirable for the courts to build up this expertise.

It is already the case that national courts are empowered to take decisions on Article 81(1) and Article 82 and they can apply the equivalent provisions of the Competition Act 1998. It is true that in future Article 81(3) issues will be added to the range of issues that the courts will have to deal with. But judges, particularly those in the High Court where we would expect the vast majority of these cases to be heard, are expected to handle and, if necessary, become expert on a wide range of areas of law as and when these come their way. They often have to weigh technical evidence, including that relating to economic effects, presented by experts in a variety of cases. Indeed, the fact that these judges have a broader rather than a very specialised and narrow expertise may well lead to better justice overall provided they have the necessary basic familiarisation with competition law issues.

There are practical ways in which the expertise of judges in competition matters can be enhanced. The Judicial Studies Board is there to ensure appropriate training on new areas of law. There have, I believe, already been training sessions on competition law for the higher judiciary.

It will also be possible, if the nature and volume of litigation justifies it, for judges to be nominated as specialists in competition law. That does mean that they would be engaged exclusively on competition law, but they would be preferred judges when they are available. We need to see what volume of litigation emerges following modernisation, but this would seem to be an eminently practicable way of addressing any possible knowledge gaps in the justice system without fragmenting—I do not apologise for using the word—the judicial framework.

I want again to mention the point made on Report by my noble friend Lord Sainsbury. The courts will be assisted, where necessary, by the Office of Fair Trading and by the European Commission. Under the modernisation regulation, the Commission will be empowered to submit written observations to the national courts on issues relating to the application of Articles 81 and 82. When we implement modernisation, we intend to provide a similar power for the Office of Fair Trading. Both bodies will also, with the permission of the court in question, be able to submit oral observations as an expert witness. That is an important source of advice for the courts.

The alternative, which the amendment would provide, would be to give the Competition Appeal Tribunal a new role and additional powers and it would have a number of significant disadvantages. It would entail an undesirable fragmentation of the judicial system. The consideration of civil proceedings would be split between the courts and the CAT. The competition issue will often be only one among many in the context of complex litigation such as a contractual dispute.

Therefore, it is possible that referring the competition issue could bring about delay because the court would have to wait for the determination of the CAT. The pressure of other cases will mean that the CAT will not always be able to provide the streamlined service that we expect. We fear, too, that providing judges with a discretion to refer parts of cases to the CAT will introduce inconsistency in the system and uncertainty for parties about the path a case would take. It would all depend on the readiness of the individual judges to refer matters.

There are other important technical difficulties with the amendment. It would be highly unusual for a tribunal to make decisions on an issue arising in a case before a High Court or Court of Session judge that is then binding on that judge, not least because tribunal decisions are subject to judicial review, with the court exercising the powers of judicial review. It is important not to lose sight of the fact that the CAT is a tribunal, not a court, and set up primarily as an appellate body to deal with appeals by individuals against the decisions of the competition authorities.

I should like to add one final point made by my noble friend Lord Sainsbury on Report, but well worth repeating. Although we do not believe that it would be appropriate to take the power contemplated in the amendment, if such a provision or something like it does prove necessary when we come to examine the implementation of the proposed EU modernisation regulation, we believe that it would be possible to use the powers under Section 2 of the European Communities Act, combined with those in Clause 204 of the Bill, to secure the goals of the amendment. In those circumstances, we believe that we could use those powers to give the CAT the jurisdiction it would need, and the courts the powers needed to enable matters or issues to be transferred for the CAT to determine, or for the CAT to assist the courts in appropriate cases. We do not want to send a signal that this is the direction in which we would have to go by taking a specific power, but an alternative power exists if it proves appropriate to use it to enable us to implement our Community obligations. In a practical sense, therefore, the amendment is unnecessary. That does not mean, however, that I can give the noble Lord, Lord Kingsland, the undertaking that he seeks.

Lord Kingsland

My Lords, I am grateful to the Minister for his full response and to the noble Lord, Lord Borrie, for his apposite intervention on this topic.

Your Lordships' House will agree that legislation made under Section 2 of the European Communities Act 1972 is a much less desirable way of implementing these proposals than legislation under a statute. After all, legislation made under Section 2 of the 1972 Act would be delegated legislation and the House would have no opportunity whatever to amend it. Your Lordships would have to take it or leave it.

I do not understand why the Minister is so opposed to this proposal. After all, the amendment states that the Lord Chancellor and the Secretary of State "may" together make regulations. It is not mandatory, it is permissive; they may or they may not make regulations. So the discretion of the Minister and the Government is in no way constrained by what is proposed.

The Minister raised a number of matters of substance. I have dealt with most of them, both at Committee stage and at Report stage, but perhaps I may prevail on your Lordships' patience a little longer to deal with one or two of the points made by the Minister at this reading.

The first concerns the power of the OFT and the European Commission to make submissions to High Court judges. The Minister is right about that, but what good is it if the High Court judges do not have the experience to assess the merits of submissions put to them by the OFT and the Commission? Without the kind of expertise that judges in the Competition Appeal Tribunal will have, it will be all too easy for the OFT and the European Commission, on occasions to pull the wool over the eyes of the judiciary.

'The Minister referred to delay, but if he looks back at the history of the development of litigation in the High Court he will see that, by a process of evolution, specialisation has proved necessary in a number of areas: most notably in the commercial court, in the administrative court and in the Employment Appeal Tribunal.

Here we are proposing to short-cut that process by providing a ready-made specialised court to deal with the inevitable specialisation that will develop as a result of the rapid advance of competition law. Contrary to the Minister's assertion of slowing things down, having this facility to make references to the Competition Appeal Tribunal will speed things up.

The amendment has the great authority of Sir Jeremy Lever behind it. For that reason as well as the others, I should like to test the opinion of the House.

3.25 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 92; Not-Contents, 86.

Division No.1
CONTENTS
Aberdare,L. Lawson of Blaby, L.
Addington, L. Luke, L.
Anelay of St Johns, B. Lyell, L.
Astor of Hever, L. McColl of Dulwich,L.
Attlee,E. McNally, L.
Avebury, L. Marlesford, L.
Barker, B. Miller of Hendon, B.
Beaumont of Whitley, L. Monro of Langholm, L.
Biffen, L. Monson, L.
Blatch, B. Mowbray and Stourton, L.
Bledisloe, V. Moynihan, L
Bradshaw, L. Murton of Lindisfarne, L.
Brittan of Spennithrorne, L. Noakes, B.
Brougham and Vaux, L. O' Cathain, B.
Buscombe, B. Oakeshott of Seagrove Bay, L.
Byford, B. Oppenheim-Barnes, B.
Campbell of Alloway, L. Peyton of Yeovil, L.
Carlisle of Bucklow, L. Phillips of Sudbury, L.
Carnegy of Lour, B. Pilkington of Oxenford, L.
Clement-Jones, L. Platt of Writtle, B.
Cope of Berkeley, L. [Teller] Rawlings, L.
Cox, B. Razzall, L.
Cumberlege, B. Redesdale, L.
Dahrendorf, L. Rees-Mogg, L.
Dholakia, L. Rennard, L.
Dixon-Smith, L. Renton, L.
Elles, B. Roper, L.
Elliott of Morpeth, L. Rotherwick, L.
Elton, L. Sanberg, L.
Ezra, L. Scott of Needham market, B.
Fearn, L. Seccombe, B.[Teller]
Fowler, L. Sharples, B.
Garel-Jones, L. Soulsby of Swaffham Prior, L.
Glentoran, L. Strathclyde, L.
Goodhart, L. Swinfen, L.
Hayhoe, L. Thomas of Walliswood, B.
Henley, L. Thomas of Monifieth,L.
Hooper, B. Trefgarne, L.
Howe, E. Trumpington, B.
Howe of Aberavon, L. Wallace of Saltaire, L.
Howell of Guildford, L. Walmsley, B.
Hunt of Wirral, L. Watson of Richmond, L.
Jenkin of Roding, L. Wigoder, L.
Jopling, L. Wilcox, L.
Kingsland, L. Williams of Crosby, B.
Lane of Horsell, L. Williamson of Horton, L.
NOT-CONTENTS
Acton, L. Cobbold, L.
Ahmed, L. Corbett of Castle Vale, L.
Amos, B. Craig of Radley, L.
Andrews, B. Crawley, B.
Ashley of Stoke, L. David, B.
Ashton of Upholland, B. Davies of Oldham, L.
Bassam of Brighton, B. Dean of Thornton-le-Fylde, B.
Bernstein of Craigweil, L. Dormand of Easington, L.
Blease, L. Dubs, L.
Boston of Faversham, L. Elder, L.
Brennan, L. Evans of Temple Guiting, L.
Brett, L. Farrington of Ribbleton, B.
Brooke of Alverthorpe, L. Faulkner of Worcester, L.
Brookman, L. Filkin, L.
Carter, L. Fyfe of Fairfield, L.
Christopher, L. Gavron, L.
Clarke of Hampstead, L. Goldsmith, L.
Clinton-Davis, L. Goudie, B.
Gould of Potternewton, B. Mitchell, L.
Graham of Edmonton, L. L. Morgan, L.
Grenfell, L. Morris of Manchester, L.
Grocott, L. [Teller] Pendry, L.
Haskel, L. Pitkeathley, B.
Hilton of Eggardon, B. Rendell of Babergh, B.
Howells of St. Davids, B. Richard, L.
Hughes of Woodside, L. Rooker, L.
Irvine of Lairg, L. (Lord Chancellor) Sewel, L.
Sheldon, L.
Islwyn, L. Simon, L.
Janner of Braunstone, L. Smith of Gilmorehill, B.
Jay of Paddington, B. Stone of Blackheath, L.
Jeger, B. Strabolgi, L.
Joffe, L. Strange, B.
Jordan, L. Symons of Vernham Dean, B.
King of West Bromwich, L. Taylor of Blackburn, L.
Lipsey, L. Thornton, L.
Macdonald of Tradeston, L. Turnberg, L.
McIntosh of Haringey, L. [Teller] Turner of Camden, B.
Warnock, B.
MacKenzie of Culkein, L. Warwick of Undercliffe, B.
Mason of Barnsley, L. Weatherill, L.
Massey of Darwen, B. Whitaker, B.
Merlyn-Rees, L. Whitty, L.
Milner of Leeds, L. Williams of Mostyn, L. (Lord privy Seal)

Resolved in the affirmative, and amendment agreed to accordingly.