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Miss Melanie Johnson: The hon. Member for South Cambridgeshire (Mr. Lansley) has already covered the aims of amendments Nos. 147 and 148. On the first point, which is that the amendments would ensure that the Lord Chancellor would make all the appointments, as I explained in Committee, we are happy with the division of responsibilities that we envisage for the Lord Chancellor and the Secretary of State. I thought that the hon. Gentleman shot his own foot somewhat by pointing out that there would be a difference between the role of

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the chairman and president and that of the other appointees to the tribunal, as those on the panel of chairmen would have to understand what was consistent and behave as if the tribunal were a court. The tribunal is indeed a court, and it therefore makes sense that the people who are appointed have explicit qualifications. The Lord Chancellor obviously has an expertise that is at a premium in considering such questions. We believe that his involvement in those cases should ensure that we attract candidates of the highest calibre to be chairmen.

However, we believe that the Secretary of State for Trade and Industry is best placed to identify and select candidates with the necessary blend and breadth of experience and background to constitute ordinary members. They will not have to carry out legal roles, nor will they require legal qualifications. Such members will not necessarily be bringing specific legal expertise, but they will be expected to have expertise relevant to competition. They could be drawn from a wide range of backgrounds. The background could be legal but it could also be in economics, business, accountancy or other areas. For that reason, we believe that the right balance has been struck.

There are already measures in place to ensure that the ordinary members, chairmen and president can carry out their duties without any external influence being brought to bear. We have strengthened these measures. The only grounds for removing any member from office will be incapacity or misbehaviour. The scenario that the hon. Member for South Cambridgeshire entertained briefly of a member being removed is not an issue. Also, members and chairmen will be appointed for one eight-year term with no reappointment. Previously, members were appointed for shorter terms and then reappointed, so the break that the hon. Gentleman referred to did exist.

These safeguards, and others, will ensure the integrity of the tribunal's decisions. The division of responsibilities offers the best prospect of securing the required level of legal and other expertise on the tribunal.

On the second issue, we share the desire of the hon. Gentleman—if we have understood the intention of his amendment correctly; there appears to be a negative too many—to attract ordinary members with relevant expertise. We made a commitment in the White Paper that all members should have expertise relevant to competition. However, we have deliberately not included a specific requirement in the Bill because of the difficulties in formulating such a requirement. That is a very different situation from that for the legally qualified chairmen and president, whom we require to have experience of competition law and practice. That concept is relatively easy to define.

"Expertise relevant to competition" is much broader, and could come from working in business or from having an accountancy background, for example. We need to keep our options open if we are to attract members of the calibre required, and particularly if we want to attract candidates from diverse backgrounds and from all areas of the UK. The problems of definition do not arise here, as they did in the case of those who needed experience of competition law and practice. It is for that reason that we have made the change. I am entirely sympathetic to the points made by the hon. Gentleman.

The amendment represents the sentiment of what we are trying to achieve, but it is not necessary to require it in the Bill. We could risk excluding potentially very good

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candidates if we were to do so. I ask the hon. Gentleman to withdraw the amendment, recognising that the needs are being met.

Amendment No. 315 seeks to give parties a right to review the substance of any decision that is taken. The subject of what could constitute the appropriate grounds for review of a decision following a merger or market investigation was discussed in Committee. As I explained then, the Bill provides for parties who are aggrieved by decisions to have them reviewed by the CAT on the same grounds as would be applied by the courts on the application for judicial review. That is the situation under the Fair Trading Act at present, where decisions of the Secretary of State are open to challenge on judicial review grounds.

We continue to believe that judicial review is the right jurisdiction for appeals against decisions taken in merger investigations. That type of review by the CAT will ensure that the procedures followed by the authorities are fair and that the parties are given the opportunity to put their case. It will allow the CAT to re-examine any decision taken by the authorities to assess whether it is reasonable.

No merger is prohibited by law from the outset. It is for the authorities to decide case by case whether any merger will lead to a substantial lessening of competition and what steps should be taken to remedy that in each case. That could mean outright prohibition, or imposing conditions as the price of clearance.

Decisions will be based on an analysis of individual cases on their specific facts and an economic analysis of those facts by the authorities, acting in accordance with their statutory duties. They will not be evaluated against a defined prohibition by reference to an existing body of substantive competition law and jurisprudence, as would be the case with decisions under the Competition Act 1998.

A considerable amount of discretion needs to be exercised. It would be difficult for the CAT to assess whether the decision that has been made is right or wrong in objective terms. In this context, we clearly need to ensure that the process followed by the authorities was fair and that the parties were given the opportunity to put their case. A judicial review type of appeal is therefore appropriate.

Such a review by the CAT will also allow decisions to be assessed more quickly than would a full appeal on its merits. We consider that resolving these disputes quickly is particularly important in a merger situation where the market environment may be changing rapidly. The mechanism for challenging decisions made in relation to merger investigation references needs to ensure that the process followed by the authorities in a merger investigation is fair and that the parties are given the opportunity to put their case.

If, applying the principles of judicial review, the CAT considers the challenge to the decision is justified, the original decision maker can be asked to look at the decision again. We think that this is the most appropriate way to deal with the type of decision that will be made under these parts of the Bill.

The hon. Member for South Cambridgeshire asked about the Competition Commission, which is not an appeal body in the way that he envisages. The two bodies separately consider the issues involved in a case, but they

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do not formally consider an appeal. For both markets and mergers, we are happy that we have an overall structure that offers sufficient right of appeal. The combination of the Competition Commission and the CAT offers an opportunity for consideration of all the issues.

In relation to damages, one could in principle go to court in a case where there was no infringement found, but the court would have to have regard to the result of the OFT's decision.

Amendments Nos. 311 to 314 widen the basis on which claims for damages can be brought to the CAT by enabling claims to be brought where the OFT has found that there has not been an infringement of competition law. It is hard to envisage what basis there could possibly be for bringing a damages claim with respect to anti-competitive activity where it has been established that no infringement has occurred. As it stands, amendment No. 311 will not help those who have been harmed by anti-competitive activity to bring claims for damages, which is what I think the hon. Gentleman had in mind.

With that, I hope that I can persuade the hon. Gentleman to withdraw the amendment.

Mr. Lansley: I am comforted by what the Minister said about the measures for trying to secure the independence of the CAT, and about amendment No. 147. On amendment No. 148, I agree that we are looking for the same kind of objective. Looking back at the Competition Act 1998, which is amended here, I should be interested in whether there was some way of reflecting more substantively the range of experience that is required by the CAT as it accumulates these additional responsibilities. I understand that one would not want to do so in a way that frustrated the ability to appoint people who appear to have different but highly desirable experience, but it seems to me not to be beyond the wit of Government to achieve that. I must confess that, previously, it seemed to me that the reference to experience of competition law and practice seemed rather narrow and that it would be better to try to widen it, if that could be done.

4.30 pm

I entirely understand the Minister's point about amendments Nos. 311 to 314. They could allow individuals to come to the tribunal in circumstances where the OFT decided that no infringement had occurred, but as she says, I doubt whether they would get very far. The question is, does that also mean that they would not get very far if they went to a court in such circumstances? She said that it is open to people to go to a court for a private action, but that the court would have to have regard to the OFT's decisions. Would it not be better to construct matters in such a way that people could not go to a separate court, but had instead to go to the tribunal? Given that the Government have created the tribunal as the appropriate body for hearing awards for damages, should it not also hear cases that could conceivably be brought in circumstances where an infringement had not been proved?

If I may, I shall leave the issue of appeals to be judged on its merits. I intimated my view that the two-stage merger process—involving the OFT, the Competition Commission and judicial review through the Competition Appeal Tribunal—is sufficient. However, for reasons that

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I shall explain later, that is not necessarily true in respect of market investigations. With those points in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14


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