Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Haskel moved Amendment No. 137:


Page 20, line 39, at end insert--
("( ) If a person is charged with an offence under subsection (1) in respect of a requirement--
(a) to provide an explanation of a document, or
(b) to state where a document is to be found,
it is a defence for him to show that he had a reasonable excuse for failing to comply with the requirement.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 138:


Page 20, line 41, leave out from ("if") to end of line 44 and insert ("the person imposing the requirement has failed to act in accordance with that section.").

The noble Lord said: My Lords, we have already spoken to the amendment. I beg to move.

On Question, amendment agreed to.

Clause 44 [The Competition Commission]:

The Deputy Speaker: My Lords, before calling Amendment No. 138A, I should tell your Lordships that if it is agreed to I cannot call Amendment No. 139.

Lord Kingsland moved Amendment No. 138A:


Page 22, line 4, leave out subsections (1) and (2).

The noble Lord said: My Lords, in moving Amendment No. 138A, I wish to speak also to Amendments Nos. 139A, 139B, 139C, 144F, 144G, 149D, 152A, 153A, 153B, 153C, 153D, 154A, 154B, 154C, 154D, 154E and 186B. The centre piece of the amendments is Amendment No. 152A. The pattern involves a substantial movement in the adjudicative furniture of the Bill. Amendment No. 152A seeks to replace the competition tribunal by a competition court. The powers of that court are set out in that amendment.

The idea that a branch of the High Court should deal with competition matters is not a novel one. We have the Restrictive Practices Court established in our system. There are three reasons why I believe that a branch of the High Court is better equipped to deal with the tasks of appeal than the appeal tribunal. The first is the new backcloth that competition rules will face under

19 Feb 1998 : Column 368

the Human Rights Bill, soon to become the Human Rights Act. As I understand it, the fundamental concept that lies behind that legislation is the concept of rights as entitlements. It is the High Court, and not any subsidiary tribunal, which has the right to make declarations of incompatibility where statutes fall short of the standards laid down in the Human Rights Act.

It is highly likely that a substantial number of the issues that will have to be dealt with by the competition tribunal will be procedural issues, and hence issues that will raise questions about individual entitlements--for example, a right to a fair hearing or a right not to have too onerous a penalty imposed on a company. In those circumstances it seems an unnecessary elaboration of the system to have to route matters through the tribunal which will ultimately end up in the appeal courts anyway.

The second reason why I believe it appropriate to establish a competition court to replace the appeals commission is that many of the issues connected with procedure are just as likely to be raised by applications to the High Court for judicial review as under appeal to the competition tribunal. In those circumstances, in my submission it will lead to confusion to have both the appeals tribunal and the High Court potentially capable of hearing procedural matters but leaving it uncertain as to which of the institutions is the more appropriate.

The third reason why I believe it appropriate to have a competition court is that the end of the procedure pursued by the Director General of Fair Trading under the Bill may be the imposition of a fine or penalty. Those are criminal remedies. In those circumstances it is more appropriate for a court of law than for a tribunal to hear matters arising from their wrongful imposition.

Those are the three main reasons for my proposing a competition court. Most of the other amendments in this line of amendments are consequential, save one. In seeking to replace the competition commission, I have chosen not only to seek to replace the appeals tribunal, but also that part of the commission which deals with many matters which are now the responsibility of the Monopolies and Mergers Commission. The reason for that is as follows.

As noble Lords are aware, the Opposition Front Bench has tabled amendments to exclude the responsibility for dealing with scale monopolies and structural monopolies from the Monopolies and Mergers Commission. Consistent with that philosophy, all that would be left to the Monopolies and Mergers Commission would be its merger responsibilities. In our submission it would be more appropriate that those powers, too, should be dealt with by the Director General of Fair Trading. That is the reason why the knock-on effect of having the court is the disappearance of the commission itself. I beg to move.

7 p.m.

Lord Borrie: My Lords, perhaps I might comment on the last remarks of the noble Lord, Lord Kingsland. I am strongly opposed to the substitution of the competition commission by a competition court. Of course it is true to say, as the noble Lord did, that in our

19 Feb 1998 : Column 369

own UK competition law there has been since 1956 a court, part of the High Court, known as the Restrictive Practices Court. That court has had a range of business over the past 40 years, and in the early years a considerable amount of substantive business. I would, however, draw attention to the constitution of that court from 1956 to this very day. While the presiding judge has indeed been a judge of the High Court, he has been supported--and my understanding is that the judges concerned have welcomed this--by lay members, people typically experienced in business and so on, who have been appointed to a panel from which they have been drawn for appropriate cases over the years.

The noble Lord is suggesting that, first, the appeal tribunal structure should disappear. There are certain amendments to which we have not yet come in which the noble Lord's unfortunate logic leads him to say that the Lord Chancellor should make the appointments, or the Lord Advocate in the case of appropriate Scottish judges. The amendments would do away with the present, very satisfactory constitution of the Monopolies and Mergers Commission, which is now to be transmuted into the competition commission, whereby appointments are made by the Secretary of State for Trade and Industry. Those are appointments of a mixed range of people working together from a great variety of backgrounds: business, academia, the trade unions, law, accountancy and so on. They are put on panels and appointed to appropriate cases. That is transmuted under this Bill; the competition commission is designed to ensure such an adequate mix and the Bill makes provision for the two functions of the competition commission in future.

The reporting function will apply when there are either scale monopoly or complex monopoly references--as the Minister pointed out several times, such instances will be rare. There will also be merger references under a continuation of the present procedure. The panels will be chosen from an appropriate mix of people and it is appropriate that they are all appointed by the Secretary of State for Trade.

Then there will be the so-called appeal function to constitute the appeal tribunals. It seems to me appropriate that the members should be appointed by the Secretary of State for Trade but, as provided for under the Bill, for the chairman of the appeal tribunal, as one might expect, to be a suitably qualified lawyer. The qualifications are set out in paragraph 26 of Schedule 7, which we shall debate. The appointments, also made by the Secretary of State for Trade, will be made in consultation with the Lord Chancellor or the Lord Advocate, as appropriate.

That scheme--the competition commission, with the reporting function and the tribunal function, which appoints, and so on--seems to me to be excellent. One bears in mind in the background that, if there is a point of law on which someone wishes to appeal later, the Bill provides for the Court of Appeal to deal with the matter.

However, I would emphasise that in both the appeal function and the reporting function of the competition commission it is immensely desirable to continue what has been a very useful experience in the Monopolies and

19 Feb 1998 : Column 370

Mergers Commission; namely, the mix of background that I have described. Certainly I believe it would be most undesirable if decisions about matters affecting industry, business and economics, where very often matters of law are relatively minor, were made solely by the people listed in Amendment No. 152A; namely, High Court judges. That seems to me singularly inappropriate, and I trust that the House will not agree to the amendments.

Lord Haskel: My Lords, I am most grateful to my noble friend Lord Borrie for his intervention, as he has far more experience of these matters than I. As he said, the Fair Trading Act carefully balances the respective roles of the director, the MMC and the Secretary of State. The approach to dealing with competition issues under the Act is very different to that introduced by the Bill in relation to the prohibitions.

We debated these points at some length in Committee. On that occasion the noble Lord, Lord Kingsland, eloquently set out his thesis that the MMC should be abolished and that there should be no new tribunal, and he has repeated that again today. I agree with my noble friend Lord Borrie. We are not seeking, with this Bill, to change substantively the way in which existing functions of the MMC are performed. Under the Bill these functions will transfer to the new competition commission, where they will be performed by the reporting arm of the commission. The purpose of the Bill is to introduce new legislation based on a prohibition approach.

The approach we have chosen also means that cases will be heard by both legal and lay members. My noble friend Lord Borrie explained most eloquently why this is desirable. We believe it is essential that the tribunal panel contains the necessary breadth of experience and expertise to be able to deal effectively and efficiently with the complex commercial, economic and legal issues involved in competition cases. Our approach also means that we can draw on a much wider range of people to chair tribunals, while, of course, recognising that tribunal chairmen will need to be properly legally qualified. Schedule 7 to the Bill sets out the necessary legal qualifications.

The noble Lord, Lord Kingsland, mentioned a number of procedural points. Most of those points will arise from the directors' rules and such points can equally well be raised in a tribunal as in a court.

The basis of our approach is that it is essential for the credibility of the new regime, and in the interests of fairness and transparency, that there are effective and efficient appeal arrangements. We believe that our proposals will achieve that and mesh sensibly and productively with the institutions already in place under the current regime. In view of these arguments, I invite the noble Lord to withdraw his amendment.


Next Section Back to Table of Contents Lords Hansard Home Page