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Lord Kingsland: I hope that Members of the Committee will forgive me if I have one last crack at the issue because I consider it important. I would not like to abandon it without pursuing it one step further. Why a court? Simply because Article 6 of the European Convention on Human Rights and the jurisprudence under it have made it clear that the process in which the director general is to be involved concludes with criminal penalties. Since that is the case, those who are likely to be on the receiving end of such penalties are entitled to all the requirements of due process. From what I have seen of the proposals for the procedure of the tribunal I am not convinced that they will receive it. Indeed, I do not believe that a tribunal is a suitable institution to guarantee due process. For that reason, I propose that the function should be performed by a division of the High Court. I shall leave that point there.

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The Minister talked about the extremely delicate balance that the procedure for investigating complex and scale monopolies requires and has talked about how successful that balance has been over the past 20 years. Leaving aside that judgment of history, I question whether his view that giving the powers of the Monopolies and Mergers Commission to the Director General of Fair Trading would destroy the separation of powers that has been achieved by the existing procedure.

Under the Bill, the Director General of Fair Trading has powers of investigation, prosecution, conviction and fine. There is hardly a separation of powers there. Therefore, I do not know why the Minister should think that handing the powers of the Monopolies and Mergers Commission to the Director General of Fair Trading would further affect adversely the concept of separation of powers.

Moreover, there seems to be an unacceptable duplication of function in investigating monopolies. Surely the investigation of Chapter II prohibitions and complex and scale monopolies will often require investigation into the same companies in the same industries. How can one justify separate organisations looking at those two issues simultaneously or even sequentially? I find that very difficult. However, I shall not ask the Minister to repeat or even elaborate on what he has already said unless he wishes to do so. I understand the Minister's position. I merely invite him to reflect on what I have said. It is a matter to which we shall probably return on Report.

Lord Simon of Highbury: There is one point that I should like to make and it concerns the issue of the European Convention on Human Rights and the point raised again about the capacity of a court or tribunal to address those facts with due process. I see no reason why a tribunal cannot give the appropriate judgments and protections. A court-like tribunal or a tribunal-like court seems to me, as a layman, to be dancing on a pin head.

If inappropriate judgments are made by a tribunal-like court in terms of the European Convention on Human Rights issues, it will be possible to appeal against those judgments. But I have every confidence that such matters can be addressed by the tribunal in process terms. I am grateful that the noble Lord does not seek to go further into institutional relationships and I ask the noble Lord to withdraw the amendment at this stage.

Amendment, by leave, withdrawn.

[Amendments Nos. 169B to 169D not moved.]

Clause 44 agreed to.

On Question, Whether Schedule 7 shall be the seventh schedule to the Bill?

Lord Kingsland: The notice of my intention to oppose this Question must be seen in the light of the previous debate in relation to the status of the competition commission and all the points which have already been covered. In those circumstances, I shall no longer oppose the Motion that Schedule 7 shall be agreed to.

Schedule 7 agreed to.

Clause 45 [Appealable decisions]:

[Amendments Nos. 169E and 169F not moved.]

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9.30 p.m.

Lord Kingsland moved Amendment No. 170:


Page 22, line 32, at end insert ("or as to whether the Director has complied with the requirements of section 58").

The noble Lord said: The amendment relates to Clause 45(2) which deals with "appealable decisions". The clause concerns the circumstances in which an individual or a company may appeal to the competition commission. The amendment seeks to add a requirement to those circumstances; namely, whether or not the director has complied with the requirements under Clause 58 regarding compliance with the principles of European Community law. I beg to move.

Lord Simon of Highbury: Clause 45 enables appeals to the new competition commission appeal tribunal against a decision taken by the Director General of Fair Trading or by one of the sector regulators under the prohibitions. It is our intention that substantive decisions by the director should be appealable to the competition commission. We believe that the right to appeal against such decisions is an essential part of ensuring a fair and transparent system.

The requirements in Clause 58 are intended to ensure that the new prohibitions are applied consistently with the principles of Articles 85 and 86 except where the Bill specifically provides otherwise. That is the point of connection to which the noble Lord, Lord Kingsland, referred. It is our view that the Bill already provides that these requirements apply to the director in making decisions as to the application of the prohibitions. Therefore, it would be possible to appeal against a decision by the director that a particular course of conduct infringes the Chapter II prohibition on the grounds that the director's decision was not in accordance with the requirements of Clause 58. This is similar to our earlier discussion on whether or not a man is a reasonable man. I ask the Committee: do we have to add it to the Bill to ensure that the Clause 58 provision is seen as fundamental to the whole process; in other words, appealable against if it is not applied?

The view from this side of the Committee is that we do not believe that Amendment No. 170 adds anything to the Bill. As I said, it will be possible to appeal against a decision by the director on the grounds that his decision was not in accordance with the requirements of Clause 58. I am most grateful to the noble Lord, Lord Kingsland, for enabling me to put this on the record. However, I ask him to consider withdrawing his amendment.

Lord Kingsland: I am most grateful for the Minister's response. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 171 not moved.]

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Lord Kingsland moved Amendment No. 172:


Page 23, leave out line 5.

The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 176. Amendment No. 172 seeks to amend Clause 45(3), which contains a list of appealable decisions. The amendment seeks to remove the words, "cancelling an exemption". Amendment No. 176 seeks to insert at page 23, line 11 the words,


    "and any other action of the Director relating to an individual exemption, a block exemption or parallel exemption made under sections 4 to 11".

In other words, it retains the concept of an exemption but expands it to a wider range of matters which in our submission are more appropriate and more comprehensive. I beg to move.

Lord Simon of Highbury: I shall speak to Amendments Nos. 176 and 172. Amendment No. 172 seems to be consequential. There is no need for the deleted reference to exemptions if Amendment No. 176 is accepted.

I have already explained our intention that substantive decisions by the director should be appealable to the competition commission. The list of appealable decisions in Clause 45(3) is intended to specify the various substantive decisions that the director might make, and which may be appealed to the commission.

Many of the decisions contained in this list relate to individual or block exemptions. It is our intention that all substantive decisions relating to exemptions should be capable of being appealed to the competition commission. I do not, therefore, believe that these amendments are necessary. All the matters which should be appealable in relation to exemptions will be appealable.

On the other hand, the very broad formulation in Amendment No. 176 would bring in matters which in our view it would be neither practicable nor necessary nor desirable to make appealable. We do not, for example, intend it to be possible to appeal against a view taken by the director that there had been a material change in circumstances concerning an exempted agreement. This would not be a substantive decision. It is, however, right that, if the director decides in such circumstances that an exemption should be revoked, that decision should be open to appeal. The Bill enables such appeals to be made. Indeed, once such a decision had been made by the director, it might be appealed on the grounds that there had been no material change in circumstances. But we believe that the right stage to make such an appeal is when, and if, the director takes a decision.

I would like to say at this stage that we are currently reflecting on whether the list in Clause 45(3) is precisely right. It has been suggested to us that there may be minor gaps or some scope for clarification. It is important that we should have covered all types of decision that should be appealable. This may therefore be an area which we would wish to return to at Report Stage, without, however, wishing to depart from our intention that only substantive decisions should be

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appealable. With that in mind, I ask the noble Lord, Lord Kingsland, whether he would see fit at this stage to withdraw Amendments Nos. 172 and 176.


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