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Lord Haskel: This is indeed a very difficult issue. I should have thought that, if a third party were involved in an investigation, they would receive some kind of notice that the information would be disclosed. I understand that the Bill does not provide for that and I think we should reflect on the point about disclosing to third parties if information which they provide is to be disclosed.

Baroness Nicol: I am greatly encouraged by my noble friend's last sentence; before I heard that, I was feeling distinctly uneasy. The point arose because, even under existing legislation, problems have been caused to third parties in this kind of investigation where information has not been treated as confidential by those to whom it was disclosed. I am grateful for the ray of hope contained in my noble friend's final sentence and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 53 agreed to.

Schedule 11 agreed to.

Clauses 54 and 55 agreed to.

Clause 56 [Findings of fact by Director]:

On Question, Whether Clause 56 shall stand part of the Bill?

Lord Graham of Edmonton: Can the Minister confirm that findings of fact made by the director in decisions resulting from complaints would benefit from this clause?

Lord Haskel: I thank my noble friend for raising that point. I confirm that it is the Government's intention that Clause 56 should apply to findings of fact made by the director in all decisions. It should not be limited to decisions resulting from a notification for a decision. The Government intend to bring forward an amendment at Report stage to address this point.

As I explained to the House on 17th November, third parties have a right of private action. Our clear intention in framing this Bill is that third parties may seek injunctions or damages in the courts if they have been adversely affected by the action of undertakings in

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breach of the prohibitions. This is an important element of the regime. There is no need to make explicit provision in the Bill to achieve that result. Third party rights of action under the domestic regime are to be the same as those under Articles 85 and 86.

Clause 56 has been included in the Bill in response to comments made in the consultation process. There were calls for measures to ensure that private actions in the courts should work as far as possible in tandem with the application of the prohibitions by the director.

Therefore, for example, parties who have obtained a decision that their agreement is not restrictive of competition will not have to prove again findings of fact made by the director if there were ever court proceedings attacking the agreement under the prohibition. Such facts could not be contested in such court proceedings. The court does, however, have a discretion to require the facts to be established in the normal way.

In explaining the private right of action under the Bill, I hope now to have answered one of the questions posed by the noble Lord, Lord Lucas, at the end of the second day in Committee. I should also like to take this opportunity to answer his second question, as to whether a minor allegation of error of fact would trigger, in his words, the full "panoply" of a commission investigation. In such a case, it would be the alleged error of fact which would be re-examined. It would not have to involve a re-hearing of the entire case. Paragraph 3(1) of Schedule 8 provides for the appeal to be determined by reference to the grounds of appeal.

More generally, I believe that there are adequate powers in the Bill to safeguard against unmeritorious appeals. As we said last Monday, the competition commission may reject an appeal because there is no valid ground of appeal. In addition, paragraph 7(2) of Schedule 8 would enable vexatious appeals to be dismissed. Paragraph 8 of Schedule 8 is also relevant. It would enable the competition commission to demand "up-front" security before allowing an appeal to proceed. In other words, we intend the tribunal to have the ability to require an appellant to "put his money where his mouth is". That could be very sobering for someone with weak grounds of appeal. I believe that these powers, together, will provide an adequate safeguard against unmeritorious appeals.

9.15 p.m.

Lord Graham of Edmonton: I am grateful to the Minister. I never realised that such a little question would bring such a big answer and, in the same way as I support the Co-operative movement, the dividend is much appreciated.

Lord Lucas: I too thank the Minister for his unexpected answer to a question which, for the moment, I had forgotten I asked.

Clause 56 agreed to.

Clause 57 [Interpretation]:

[Amendments Nos. 249A and 250 not moved.]

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Lord Simon of Highbury moved Amendment No. 251:


Page 28, line 37, at end insert--
(""the EEA Agreement" means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as it has effect for the time being;").

The noble Lord said: This amendment has already been debated. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 252:


Page 29, line 5, leave out from second ("premises") to end of line 10.

The noble and learned Lord said: Amendment No. 252 seeks to limit the interpretation or definition of what are "domestic premises". Without unduly repeating what has been previously said as we have gone through the earlier stages of the Bill, our view is that this is an excessive power. It goes too wide. It is not available to EU level and the ECJ has already recognised that fundamental rights exist in respect of the inviolability of the home.

I ask the Minister to reflect on this: at any time while he was a senior executive or indeed the chairman of BP, can he think of any place where he put down his weary head at night which could not have been included within the description of premises also used in connection with the affairs of an undertaking? That description is so wide that, should the noble Lord take home a briefcase full of papers and sit in front of his television set with his briefcase open looking at his papers, it would be permissible to enter those premises.

I suggest that, before we return to this matter on Report, the draftsman should look at it again to see if he can secure a more narrow definition of what are "domestic premises". I understand the circumstance where people have an office attached to their home, in which case it may be desirable to enter it. But it seems to us to be an extraordinarily wide definition and it ought to be restricted in some way. I beg to move.

Lord Borrie: A few weeks ago it was reported that the President of Iraq, Saddam Hussein, was putting into his private palaces a number of weapons of destruction, no doubt with the aim of ensuring that they would not be subject to inspection by United Nations observers and certainly would not be attacked from the air at any time in view of the fact that there were women and children in those palaces.

That may seem a long way from our discussions today but Saddam Hussein is certainly not the only person who would wish to hide in domestic premises or put in domestic premises material which might be important evidence for an inquiry made under the Bill, in accordance with the provisions we discussed earlier, by the Director General of Fair Trading or his officials. It would seem to be quite a crazy hobbling of the powers of the director general if the only premises which could ever be investigated were those 100 per cent. used for trade, industrial or commercial purposes.

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What the clause allows for is an investigation of domestic premises which are in part used for business purposes or where documents relevant to, perhaps, anti-competitive practices or cartel agreements are to be found. To accept the amendment moved by the noble and learned Lord would be to restrict the powers of investigation and simply encourage people not just to leave their briefcase but regularly to leave on a semi-permanent basis any documents of any materiality relating to malpractice in relation to competition.

Lord Lucas: Given the breadth of the way the clause is drawn, I would be intrigued if the Minister could give the Committee an example of a domestic premise which might be excluded. If, as is my understanding, the dog kennel is possibly the only part of a building which is likely to be excluded under the clause, why is the clause here at all?

Lord Simon of Highbury: I have acknowledged before in these debates the concern about the strength of the investigation powers in the Bill. I can only underline again the words carefully used by my noble friend Lord Borrie. The Bill would allow entry to any premises during an investigation. But "premises" does not include domestic premises unless,


    "(a) they are also used in connection with the affairs of an undertaking, or


    (b) documents relating to the affairs of an undertaking are kept there".

It is true that on one's travels one is likely to take a briefcase. I agree with the noble and learned Lord on that. But I do not want to be dragged into this. I would never have taken any documents that would ever have caused me to have a moment's guilt. I want to put that on the record since it was nearly put on the record that I might have done.

Seriously, the Government have considered carefully the case for these powers. They have not been included in the Bill lightly. We are, as my noble friend Lord Borrie reminded us, talking here about the secrecy which is needed to operate cartels or to engage in anti-competitive practices. In particular, individuals may strive to keep relevant documents and information out of the hands of anyone investigating what would normally be considered to be a business site. That is how these things are organised.

In the debates on the Bill I have stressed the need for strong powers to enable the director to get access to information. I think my noble friend Lord Borrie would confirm that one of the key reasons why the current regime is unsatisfactory--I think that that is universally acknowledged--is that the director does not have these powers currently. I fear that in accepting the amendment that would be stepping back into an ineffective regime. It would signal to those concerned who are prepared to go to the limit in order to make these cartels effective that an investigation process was in place which could be easily defeated by the simple expedient of asking someone to take papers home and put them there for a

25 Nov 1997 : Column 959

period of time. On that basis I believe that the power is justified. I urge the noble Lord to reconsider and to withdraw the amendment.


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