Clause 169 - Review of decisions under Part 4

Enterprise Bill – in a Public Bill Committee am 5:00 pm ar 7 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne 5:00, 7 Mai 2002

I beg to move amendment No. 325, in page 122, line 37, leave out 'not'.

This is a probing amendment, which I hope that the Minister can deal with swiftly.

Subsection (2)(a) deals with exclusion—from a review carried out by the Competition Appeal Tribunal—based on an imposition of

''a penalty under section 106(1) or (3) as applied by section 168''.

We simply wondered why.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The amendment may be based on a misunderstanding of the purpose of clause 169(2)(a). The provisions are not intended to rule out the possibility of an appeal against decisions, but to clarify that such an appeal should be heard under the specific appeal provisions relating to penalties as set out in clause 110. They are applied to market investigation

references by clause 168. If that is not the basis of the hon. Gentleman's misunderstanding, perhaps he will clarify it further, but I believe that I have answered his point.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

I am not sure that the Minister has identified my precise misunderstanding, but what she says sounds convincing enough for me to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

I beg to move amendment No. 326, in page 123, leave out lines 10 and 11 and insert

'be entitled to review the substance of the decision, as well as the procedure by which that decision was reached'.

This deals with an altogether more substantial concern that we have touched on before in a different context. In response to my previous amendment, the Minister confused an appeal with a review, which, however similar they appear to a lay person, are two different things. A review deals only with complaints about points of law or the procedural aspects of a decision. It allows no investigation into the substance of the case. There is no justification—we are emboldened in our view by the support of the CBI—for limiting tribunals to judicial review alone. It must be possible to review the substance of the matter as well as the mere procedure or points of law. That would give greater confidence to all involved in the procedures. It is a simple natural justice that the entire matter—I include procedural issues and points of law, but not only them—be capable of being examined again. Concern by any party that the matter has not been dealt with properly or that an improper conclusion has been reached justifies starting the procedure.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

As I see it—the Minister will tell me if I am wrong—companies are being given the power to take to the CAT what they would previously have taken to judicial review. The clause will not much advance a company's ability to gain an effective appeals process. Stringent new penalties are put in place, but they are not balanced by companies' ability to opt for proper appeals. We do not oppose using the CAT for this purpose—we encourage it—but we want companies to be able to go to the CAT on the basis of a proper appeal rather than merely judicial review.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The Bill provides for parties who are aggrieved by decisions to have them reviewed by the CAT on the same grounds applied by the courts on application for judicial review. That position applies under the Fair Trading Act, whereby the Secretary of State's decisions are open to challenge on judicial review grounds. Judicial review remains the right jurisdiction for appeals against decisions taken in market investigations. Such a CAT review will ensure that the procedures followed by the authorities are fair, and that the parties were given the opportunity to put their case. It will also allow the CAT to examine any decision taken by the authorities to assess whether it was reasonable and proportionate.

I am aware that under the Competition Act 1998 the parties have a full right of appeal against OFT decisions. However, there is an important difference between the two regimes. Under the 1998 Act, companies in breach of dominance prohibition or the restrictive agreements are breaking the law. The chapters 1 and 2 prohibitions are modelled closely on articles 81 and 82 of the EC treaty. Cases can therefore be evaluated against a defined prohibition by reference to a body of competition law and previous jurisprudence in the UK and the EU. It is therefore easier to assess whether the decision taken is objectively right or wrong.

Under the Bill, the decisions will be based on an economic analysis of the facts of each case by the authorities acting in accordance with their statutory duties. They will not be evaluated against the defined prohibition by reference to an existing body of substantive competition law and jurisprudence. That means that the authorities will exercise considerable discretion when taking any decision under the Enterprise Bill. It will be difficult for the CAT to assess whether a decision is objectively right or wrong. Such public law decisions are complex, and a review based on judicial review is appropriate.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

Is the Minister saying that the findings of the investigation cannot be wrong?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

No, I am not saying that. There is a mechanism for challenging decisions taken in relation to market investigation references. We must ensure that the process followed by the authorities in a market investigation was fair, and that the parties were given the opportunity to put their case. If the CAT considers that the challenge to the decision is justified when it applies the principles of judicial review, the original decision taker can be asked to reconsider. That is the most appropriate way to deal with the type of decision that will be taken under the clause. Therefore, I do not support the amendment.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

I want to make three points, which the Minister has not completely addressed. My hon. Friend the Member for Huntingdon made one of them when he intervened, and he is still making it from a sedentary position. As he rightly said, one must accept that in the real world the initial decision may have been completely misjudged, and not for procedural or purely legal reasons.

We are going to all the trouble of setting up a highly specialised tribunal—the Competition Appeal Tribunal—which is unlike any other court or tribunal in the land, as it will have specialist expertise in these matters. The Minister says that the decisions will have been taken on economic and other grounds, and that it is all very difficult. The CAT above all tribunals should be able to judge these issues, especially whether they had been approached in the right way in the first instance. With respect, it does not help the Minister to refer back to the Fair Trading Act under which, as she rightly said, there is a possibility of a judicial review of a decision taken by the Secretary of State. It is difficult

to think of any other mechanism for challenging such a decision. However, we are setting up such a mechanism under the Bill. In the cart-before-the-horse way in which some of the issues are being debated, we will consider later in more detail the constitution and powers of the CAT, and how it will work.

We no longer rely on challenging a decision taken by the Secretary of State, as we are setting up that extra layer. I fail to understand why the Minister ignores that in her response to the amendment. We are not making much progress in changing the Bill in this respect, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 169 ordered to stand part of the Bill.