Enterprise Bill

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Mr. Lansley: Before the Minister leaves the point about the explanatory notes, I refer to the right of review. It is a right of judicial review alone, to investigate whether an error in law or procedural mistake has been made, or a breach of the proportionality or unreasonableness test. The review does not ask whether the merits of the remedies sought are in line with best practice under competition law, as with the Competition Act 1998. Will he comment on the scope of the review?

Mr. Alexander: If the hon. Gentleman will indulge me, I will indeed go on to discuss the scope of the review. His point on that is mirrored in the clause.

The CAT offers a faster and less expensive route to justice than would be possible through the courts via a body expert in competition law and practice. The grounds of appeal will clearly mirror judicial review. The current case law suggests that those grounds may include errors of law or material or procedural error, such as the failure of an inquiry panel to comply with the chairman's procedural rules, and material errors as to fact and other material illegalities, such as unreasonableness or lack of proportionality.

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The scope of judicial review in the courts has evolved over time and continues to do so following individual pieces of case law. We want the CAT's approach to reviews to mirror the principles applied to judicial review by the courts over time. That is why we have not opted to list the grounds for review in the Bill and chose instead the approach described in subsection (6), whereby the CAT will apply

    ''the same principles as would be applied by a court on an application for judicial review.''

A judicial review type appeal is appropriate for assessing decisions of the sort made under part 3. The CAT review will ensure that the procedures followed by the authorities were fair and that the parties were given the opportunity to put their case, and will further allow the CAT to assess whether a decision was reasonable and proportionate. That relates to the point about available remedies. I hope that I have covered the points made by the hon. Gentleman with regard to those remedies. The jurisdiction would allow scope in some circumstances for the CAT to consider whether a decision was based on a material error of fact.

Mr. Waterson: Can we be clear about what the Minister is saying? If the CAT is able to consider matters of material fact, could there be a re-hearing of the original evidence to establish that in some circumstances? My understanding is that because it is a review and not an appeal it would not be open to the tribunal to do that.

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Mr. Alexander: My understanding is that the operation of the CAT would mirror the judicial review process that is under way in the courts at the moment. We would not seek to extend the CAT's remit beyond the terms of judicial review, but we are conscious of the fact that case law dictates the specific circumstances in which judges find a case appealable for judicial review. The Wednesbury ruling clearly set out the grounds for unreasonableness and in that regard a number of specific criteria have emerged in case law that allows for consideration.

For the sake of clarity, I affirm that the jurisdiction, which will mirror judicial review in the courts, will allow scope in some circumstances for the CAT to consider whether a decision was based on a material error of fact. That distinction between a material error of fact and a general review of the merits of the decision per se is important

On the substantive point about timing, subsection (3) requires applications to be brought without unreasonable delay and in any event within three months, as with judicial review in the courts. It is important that reviews are heard promptly and, if decisions are to be reassessed by the original decision-maker, that must be done quickly before the circumstances in which they were originally made change too much. The hon. Member for Eastbourne asked whether it would be possible within the three-month period for it to be deemed an unreasonable delay. I understand that that could be the case. For example, if within the three-month period a target was due to stop trading within a month, the time scale even

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within that three-month interval could be deemed to be unreasonable. I hope that that answers the hon. Gentleman's question.

Mr. Waterson: The Minister has confirmed my worst fears. We all agree that when there is a review or appeal procedure of any sort, whether it concerns an industrial tribunal, competition law or whatever, there should be absolute clarity about the period within which the appeal—in this case the review application—should be lodged. It is axiomatic that in English law reasonable notice and a reasonable period are often thought to be three months, which is neatly mirrored by the clause, except in its earlier part where it suggests that an application could be made within three months and still be held to be out of time. That is dangerous and worrying and I hope that the Minister will agree at least to reconsider it with his departmental lawyers to find out if there is a way of clarifying that position. If the circumstances are as urgent and pressing as they might be in the sort of case he described, would there be some obligation on the OFT, the Secretary of State or the commission to state that they determine that the period should be a month, two weeks, six weeks or whatever so that people know exactly where they stand? Otherwise, people will get into a terrible fix, believing that they have a three-month time limit when in fact they are working to another time limit of which they were unaware.

Mr. Alexander: I defer to the hon. Gentleman's knowledge of English law. I shall start from my understanding of and education in Scottish jurisprudence. We sought to reflect as closely and accurately as possible the terms of judicial review as presently justiciable before the courts. In that regard we had to strike an appropriate balance between what I concede would be the admirable clarity of a fixed date with the reality that in present case law under judicial review there is scope for it to be deemed unreasonable even within that timetable. Our endeavour has been to strike that balance and to reflect the circumstances outlined, but to make it clear that there is certainly a long-stop bar of three months. I have heard the point raised and, given its seriousness, I shall speak to my ministerial colleagues and lawyers.

Mr. Lansley: Like my hon. Friend the Member for Eastbourne, I am not entirely comforted by the Minister's response. Ministers seem to have decided that the appeal process should be conducted by the Competition Appeal Tribunal and I recall that the Government's response to consultation was that the justification was that such decisions could be assessed not only more speedily—that is all to the good—but by those who are expert in competition law.

As we discussed earlier, the CAT for those purposes will consist of a senior lawyer, but the panel may consist of ordinary members whose expertise is essentially economic rather than legal. Yet the judgment that the tribunal is asked to make, which the Minister says that the Government have expressly tried to mirror, is not an economic, but a legal decision. Instead of asking the tribunal to focus on remedies, on whether they are genuinely proportionate as regards competition law, and on whether the remedy matches the problem economically, it is

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asked to consider things in administrative law terms. I am not a lawyer, so there may be a point at which I stray beyond my competence.

If the Government want a tribunal that is expert in administrative law, they should set one up; it would certainly be subject to application for judicial review in the High Court. However, the Government are setting up a tribunal that is intended to be expert in competition law. At the same time, they are saying that experts in competition law, who understand the economic rationale of decisions by the Competition Commission, will not be able to examine the economic merits of the decisions. They must examine them in terms of administrative law and precedents in judicial review, where issues such as proportionality have a different meaning than they would have if one considered the remedies under review in relation to competition law—one would then consider the remedies' appropriateness and proportionality. There is a big difference.

It is good if the Government want to have a review of remedies, but that should be conducted in line with competition law on its merits rather than as an aspect of trying to mirror judicial review through the courts as part of administrative law.

Mr. Alexander: The hon. Gentleman poses a fair question.

We face a fundamental challenge. We must harness the economic expertise of the CAT, which is consistent with the hon. Gentleman's points and our thinking on what is the appropriate body for the highly complex financial and economic challenges that are often brought before the tribunal. However, we must also recognise that were there no provision for issues to be ventilated in a judicial review appeal, there would not only be a forum in which decisions could be reached on an economic basis, but there would be an entirely separate structure that would have to deal with questions of administrative law.

The balance has been more appropriately struck by ensuring that the membership of the body to which those appeals come—the Competition Appeal Tribunal—combines people of outstanding economic expertise, who are able to deliberate on highly complex matters, with someone who is legally qualified. At present, membership includes a High Court judge to ensure that expertise is brought to bear on deliberations. To be consistent with the Bill, we wanted to avoid unnecessary levels of appeal and costs for business, which I fear might be the outcome were the logic of the hon. Gentleman's position pursued. He wanted to have the CAT deliberate on competition law and the specifics of complex financial matters, and to have separate forums to deal exclusively with administrative law on the basis of judicial review.

The Government's approach is to recognise legitimate concerns about the areas of law covered by judicial review and to see that the appropriate forum in which those issues are determined is the CAT. The personnel of the tribunal will reflect the balance of its work, and it will have the capacity to deal with issues of administrative law and a significant

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capacity to deal with issues of great financial complexity.

Question put and agreed to.

Clause 114 ordered to stand part of the Bill.

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