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Lord Kingsland: I thank the Minister for his reply and hope that he will not mind if I address one or two further questions to him. He stated in his reply that "reasonable suspicion" only authorised the start of an investigation. But if he addresses himself to Clause 25(2), he will see that that is not so. Subsection (2) states that:
What does the Minister consider reasonable suspicion entails? For example, would it be enough for an innocent bystander to write a letter to the director general alleging that a particular cartel existed with
Our fear is that the expression "reasonable suspicion" would be used to permit officials in the director general's employment to engage in what are often termed "fishing expeditions". We would regard that as highly undesirable and an enormous waste of taxpayers' money as well as not being fair to the companies involved. I hope the Minister will not mind my asking him again to be more specific about where he sees the line being drawn between the kind of situations that I mentioned and "reasonable suspicion".
Lord Simon of Highbury: Let me say, first, that the noble Lord is right in that my remarks related to Clause 25. When we reach Clauses 26 and 27 there will be other debates and they should be sequential.
What is reasonable cause to believe? What is reasonable cause to have suspicion? It is the reasonableness and the nature of the data that are pertinent. In general terms those are matters of judgment for the director. We will never be able to be absolutely certain as to precisely where lines of judgment are drawn. They are lines of judgment. But the following areas have had common currency of sources of reasonable grounds for suspicion: copies of agreements which are usually supplied secretly by people who have been members of cartels who are disaffected and who have grounds for wanting to pass on confidential information; statements from employees or ex-employees, the so-called "whistle blowing test" with which we are all coming to terms in industry; a substantial complaint by a competitor who has been refused entry into a cartel; and perhaps economic evidence of prices moving in a specific way. All those in the past have existed and had judgments taken about them as being reasonable grounds. The one I find least convincing is, "My Lord, I read it in the newspaper".
Lord Campbell of Alloway: Does not the Minister appreciate that "reasonable cause for suspicion" is the most abused bureaucratic concept that we have? For instance, a police officer stops somebody in a car on suspicion of drink driving. When asked what was his reasonable cause, he says, "He was driving too slowly", "He was driving too fast" or some other made-up excuse. The phrase is wide open to abuse by any bureaucrat.
Lord Simon of Highbury: My worry is that the consumer has been even wider open to abuse as a result of the way that some companies have behaved. We have heard from practitioners with 20 years' experience that it has often taken a painfully long time to uncover that sort of concerted practice. The protection should be on the side of the consumer.
The noble Lord's argument in relation to the driver of a car is persuasive in a personal way, should it happen to me; but it is beside the point when we are trying to protect consumers from the sort of extravagances which they have had to endure.
Lord Fraser of Carmyllie: This is the first amendment and it is extremely important that we get it right. Once the director has come to the view that he has "a reasonable suspicion", it is at that point that these draconian powers are triggered. There is no getting away from that. The jurisprudence of the European Union is such that this competition law would be regarded as criminal, but in fact it is not criminal; it is part of an administrative process set out in the Bill.
Powers are given to the director general. As we see in Clause 26, he does not have to obtain a warrant to go into people's houses; he can ask questions without explaining why. If we were dealing with this as a criminal Bill, I have no doubt that there would be keen and anxious scrutiny given to this provision. Why Amendment No. 94 is important and why we are taking time over it is because once the director has no more than "reasonable suspicion", all the other powers flow from it.
I do not know whether my noble friend wishes to pursue the matter further. I intervene at this stage to say how important it is. Until we correctly establish the starting point, there are real dangers that excessive powers might be given to the director. At one point the Minister used the expression, "Where there was firm evidence". But if there was firm evidence then the test of "reasonable grounds for belief" would be met.
What troubles us most is the idea that a trade competitor, who is not in the cartel about which allegation has been made, may make a mischievous or malicious complaint. After that it is difficult for the director to set it aside if the only test he has to meet is one of reasonable suspicion. I do not know if my noble friend wants to intervene again, but we shall certainly want to come back to this point at a later stage.
Lord Peston: Before my noble friend the Minister replies and the noble Lord considers what he wants to do, perhaps as a layman I can ask for some clarification. I assume that "reasonable suspicion" is not to be interpreted as a psychological term; in other words, we would not bring in psychiatrists to discover whether or not the director was correct. I assume that we are discussing a legal concept. I ask therefore whether "reasonable suspicion" is subject to test in the courts. I assume that it is and therefore the problems raised by Members of the Committee opposite simply do not arise reasonably--if I may use that word in this context.
As my noble friend the Minister pointed out, certain evidence, short of conclusive evidence, comes to hand to the director who then considers it and says, "On the basis of what I have been told, I feel that reasonably I ought to mount an investigation". That makes good sense to me. He does not have enough evidence to say, without further analysis, that there is an infringement.
Given that the courts would protect a firm which felt the director was being unreasonable--they would say, "You do not have a reasonable position. Let us argue it through"--and given that we all wish to see competition policy and competition itself strengthened, I cannot see what is currently exercising Members of the Committee opposite.
Lord Fraser of Carmyllie: Perhaps I may intervene again. The noble Lord, Lord Peston, may wish to examine the matter this way. If someone goes to the police and makes an allegation about him, the police may properly, given the allegation made, begin to conduct some investigation of the conduct of the noble Lord. Where there would be a difference if criminal conduct was being alleged is that it would not immediately give the police, without warrant, the right to ask questions; the right to go into premises that were either occupied or unoccupied and ask questions of all manner of people without giving them warning, a caution or anything like that. There would require to be a build-up of the case before much of that could happen. Certainly at one point some judicial intervention would be required.
As I understand it, other than in the rather restricted circumstances to which we shall come in relation to Clause 28, there is virtually no judicial intervention or opportunity for it in this scheme of things. That is why we feel that the issue must be examined very carefully.
Lord Simon of Highbury: I have listened with great care to the arguments. I understand clearly that this is an important opening threshold test for the sequence of the clauses we are debating. I would draw two or three points from the argument. The noble and learned Lord, Lord Fraser, said that much may follow from Clause 25. I did not hear the emphasis on the word "may". It appeared as if everything was sequential.
It is important to stress that the "reasonable suspicion" can affect many different stages of action thereafter on the judgment of the director general. It is the "may" which I believe is important, because the issue is what the director general could do in circumstances where he had a reasonable suspicion. There are then stages of impact from that. Perhaps the test the noble and learned Lord is applying is how far this can be taken; and it can be taken, as he says, a long way. He mentioned entering premises--I would confirm that homes can be entered only if they are business premises--and using force in doing so, both of which arise in later clauses. The point I make is that the reasonable suspicion is the threshold which starts an investigation.
There are many ways in which an investigation may be taken forward. Later clauses show us the outside limits, as it were, as one would have with a contract. We all know that we write contracts. Contracts give us the outside limits at which we negotiate with our partners. That is my experience of business. In the meantime, within the contract, one can do many things
My noble friend Lord Peston asked whether this is a matter of psychology. As he rightly said, we must have a ground which a reasonable man would find suspicious. It may not be absolutely firm evidence in the terms of the letters or the contract, but indications about behaviour that a reasonable man might wish to pursue. If the reasonable man, in terms of the director general, is out of court and has not drawn the right conclusions, there are many ways in which that can be corrected. But, on the whole, we have to make the reasonable presumption that the director general is a reasonable man.
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