GLOBAL COMPETITION LAW
CENTRE
The future role and organisation of
the Court in the competition field
MARK CLOUGH QC, Partner,
Solicitor Advocate
Brussels, 6 December 2005
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Introduction
• Issues
• Options for Reform
• Is it time for a radical solution?
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Issues
1.
Limited role of judicial review in
administrative competition law system
2.
Procedural delays
3.
Language and enlargement
4.
Decentralisation and Modernisation
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Issues
1.
Limited role of judicial review in
administrative competition law system
• Limited nature of judicial review under Article 230
EC: not full appeal on the merits
• The CFI may not substitute its own decision on the
merits but must “remit” the case back to the
Commission to draw the necessary consequences
under Article 233 EC: unsatisfactory for applicant
and the Commission as judicial review not
determinative
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Issues
2. Procedural delays
• Delay: “the main problem with our current system of
judicial review is not its effectiveness in terms of how
closely the Courts scrutinise the Commission’s decision,
but in terms of the speed of that review…” (Bo
Vesterdorf, Judicial review in EC Competition law:
reflections on the role of the Community Courts in the
EC system of competition law enforcement”
(Competition Policy International, Vol.1, No.2 Autumn
2005)
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Issues
• According to President Bo Vesterdorf, average time for an
anti-trust or merger case under the normal procedure of the
CFI is approximately 33 months and approximately 10-12
months under the expedited procedure with shortest
merger case just under seven months
• Delay is a major issue in mergers: six months should be
maximum period for merger appeal to have value for
business
• ECJ Statistics – average time for references for preliminary
rulings 2004: approximately 23 months (2003: 25 months);
direct actions 2004: 20 months (2003: 25 months); appeals
2004: 21 months (2003: 28 months)
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Issues
3. Language and enlargement
• 25 ECJ judges and 25 CFI judges
• 9 new working languages – 20 ECJ working languages and
21 CFI (including Irish)
• 380 possible linguistic combinations
• Article 35 CFI RP language regime may only be changed by
unanimous decision of the Council under Article 64 of the
Statute; all pleadings, including those submitted by a
Member State in its own language still have to be translated
into the language of the case; the working language of the
Court is French, so all documents are translated from the
language of the case into French, the working language of
the Court; main cause of delay; translation main cost of the
Court; politically sensitive question to which there is no
easy solution
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Issues
4. Decentralisation and Modernisation
• Greater powers granted NCAs and National Courts
encourages recourse to National Courts: Regulation 1/2003
• Delay in preliminary ruling proceedings before ECJ (22
months) and annulment actions before CFI (33 months)
encourages recourse to National Courts
• No change to Luxembourg as seat of the European Court:
European Court Judges still claim that centralised European
Court system necessary to ensure uniformity and
consistency
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Issues
• ECJ case law on procedure before National Courts in
absence of harmonisation requires national procedure and
remedies subject to principles of equality and
effectiveness; major differences in national procedures,
e.g. private competition enforcement: burden and
standard of proof, evidence rules (discovery), collective
actions (group litigation orders or class actions),
calculation of damages, costs, standing of claimants,
causation and remoteness of damage
• Does recourse to National Courts driven by
decentralisation necessarily mean less uniformity and
consistency in application of EC Competition law?
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Options
1.
Procedural Improvements: insufficient
2.
Changes to judicial Structure (Nice Treatybased changes): 4 options – A. transfer of
ECJ jurisdiction to CFI; B. non-competition
specialist tribunals; C. competition specialist
tribunals; D. specialist competition chamber
3.
The Modernisation Option
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Options
1. Procedural Improvements: insufficient
•
•
•
•
Expedition procedures: priority treatment, the accelerated
or expedited procedure, the simplified procedure and the
possibility of giving judgment without an Opinion of the
Advocate General
2003: CFI reduced from five to three number of judges to
hear competition case
CFI RP Council amendments include expedited procedure
pleading rules under Article 76(a) to allow fallback longer
pleading if shorter version not needed when expedition not
pursued
ECJ new internal deadlines, CFI likely to follow
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Options
• CBI proposed “super-fast track” optional expedited
procedure for mergers so that completed within six months
of Commissions Phase 2 ECMR Decision by abridging
timetable
• The UK DTI has proposed as another informal method of
self-help that the parties limit the length of their pleadings
as requested by the CFI Practice Directions (not to exceed
20 pages if possible), making the most of the flexibility
available within the existing expedited procedure
• The UK DTI has also proposed that applicants who request
the expedited procedure could include in their application
for expedition a request that the language of their case
should be used by the court in its consideration of it
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Options
2. Changes to judicial Structure (Nice Treatybased changes)
•
•
A number of structural reforms are made possible by the
Nice Treaty and have already begun
Option A: transfer of jurisdiction to CFI from ECJ. Article
225 EC, as amended by the Nice Treaty which entered into
force on 1 February 2003, provides that the CFI is to have
jurisdiction to hear and determine at first instance all direct
actions with the exception of those assigned to a judicial
panel and those reserved in the Statute for the ECJ
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Options
• Advantages:
– 5% (25 pending cases) of the ECJ cases moved to the CFI in
2004 mainly concerning state aid and the European Agriculture
Guidance and Guarantee Fund
– potential to reduce ECJ caseload further by transferring Article
234 references to CFI
• Disadvantages:
– decrease in caseload of ECJ results in increase in caseload of
CFI
– Regulation 1/2003 and Decentralisation are expected to
increase private litigation significantly, confronting national
courts with complex competition law questions which they will
feel it necessary to refer to the ECJ for a preliminary ruling
under Article 234 EC
– “it may be more coherent to allow the CFI the power to deal
with such preliminary rulings as it is possible under Article
225(3) EC.
This would, however, inevitably increase the
workload of the CFI even further and would be an additional
factor to be considered in any discussion and changes the aim
of improving speed in the adjudication of competition cases
before the Community Courts.” (Vesterdorf article, page 27)
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Options
•
Option B: non-competition Judicial panels (or specialist
tribunals) under Article 225A:
“The Council, acting unanimously on a proposal from the Commission
and after consulting the European Parliament and the Court of Justice
or at the request of the Court of Justice and after consulting the
European Parliament and the Commission may create judicial panels
to hear and determine at first instance certain classes of action or
proceeding brought in specific areas. The decision establishing a
judicial panel shall lay down the rules on the organisation of the panel
and the extent of the jurisdiction conferred upon it. Decisions given
by judicial panels may be subject to a right of appeal on points of law
only or, when provided for in the decision establishing the panel, a
right of appeal also on matters of fact before the Court of First
Instance.”
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Options
•
•
The first judicial panel was created on 2 November 2004,
when the Council adopted Decision 2004/752/EC, Euratom
establishing the European Union Civil Service Tribunal (OJ
2004 L 333/7). This new specialised Tribunal, consisting of
seven judges, will be called on to hear disputes involving
the European Union Civil Service. Its decisions will be open
to an appeal, limited to points of law, before the CFI and,
exceptionally, subject to review by the ECJ in the
circumstances prescribed by the Protocol on the Statute
CFI lost 25% of its annual caseload (and the ECJ about
10% of its annual caseload accounting for appeals relating
to staff cases)
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Options
•
The CFI president in his recent article has supported the
creation of judicial panels to remove other cases from the
CFI’s workload:
“a more practical and realistic solution would be to
focus the CFI’s resources more on competition cases
by removing from its jurisdiction a number of other
cases in specific areas such as those relating to EC
officials and trademarks.” (Page 26)
•
The president notes that in addition to the 20% [25%] of
the current caseload attributable to civil service cases, a
further 17% could be removed through the creation of a
trademarks tribunal
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Options
• Advantages of non-competition judicial panels under Article
225A:
– removal of approximately 40% of the CFI caseload would leave
CFI free to deal promptly with competition, merger and state
aid cases
• Disadvantages:
– CFI caseload of appeals from specialist panels could be as great
as panel caseload
– volume of new competition cases likely to grow (if CFI has
jurisdiction over competition references)
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Options
•
•
Option C: competition judicial panel (or specialist
competition tribunal) under Article 225A:
Advantages of a specialised Competition Tribunal:
–
–
–
–
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Specialist judges would be better suited to examine closely the
complex economic assessments undertaken by the
Commission
Tailor-made procedures could be optimised for the specific
needs of competition cases
Possibly greater resources to deal more effectively and more
expeditiously with competition cases
Could be a move towards a more coherent system of three
levels of jurisdiction: First instance Tribunals, appeals to the
CFI, and exceptional review by to the ECJ
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Options
–
–
•
Reduce the workload of the ECJ by relieving it of systematic
appeals against the CFI’s competition judgments in areas that do
not always merit adjudication by the highest court (e.g.
determination of the correct amount of fine)
Reduce workload of the CFI by removing competition, merger (and
possibly state aid) cases from its first instance jurisdiction
Disadvantages of a specialised competition tribunal:
― Appeals to the CFI could lengthen the proceedings if appeals
became systematic
― The specialisation of judges could also result in the greater
insularity that sometimes characterises the competition law
community
― The judicial panel under Article 225A EC would not alter the limited
nature of the judicial review process as full jurisdiction would not
be granted
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Options
― The process of establishing a panel would take a number of
years as the experience with the proposal for a judicial panel
to deal with Community Patent cases demonstrates
• Option D: specialist CFI competition chamber(s) created
by case management: An alternative solution involving no
change to the existing structure of the CFI would be to
create one or more specialised chambers for competition
cases with three or five judges specialised in and focussing
on competition cases alone
• Advantages of specialised competition chambers:
– improving the speed of treatment of competition case
– easy implementation at an internal level;
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Options
• Disadvantages of specialised competition chambers:
– the risk of overall under-utilisation of the specialist chamber
depending on the workload of competition cases at any
particular time - difficult to resist pressure to allocate noncompetition cases to the specialised chambers in times of
under-utilisation or not to allocate competition cases to other
chambers in times of over-utilisation
– more difficult to establish specific procedures within the existing
structure of the CFI
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Options
• From a historical perspective it is interesting to note the
criticism of the creation of specialised courts/tribunals or
specialised chambers made in a report by the British
Institute of International & Comparative Law into “the role
and future of the European Court of Justice”, presented by
Lord Slynn of Hadleigh in 1996. The report considered
there to be a number of disadvantages including the
difficulty of defining a structured relationship between all
the different tribunals, a concern that specialist tribunals
would proliferate and ultimately jeopardise the uniform
interpretation and application of Community law
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Options
3. The Modernisation Option
• A radical solution: a new CFI competition court architecture
based upon a specialist competition chamber or tribunal
• European Commission Green Paper on the desirability of
encouraging private enforcement actions in the National
Courts will increase need for consistency and uniformity in
application of EC competition law
• Decentralisation of administrative decisions and the enhanced
roll of private enforcement actions highlights the need for a
totally new approach to the organisation of the Community
courts in competition cases: there seems no obvious reason
why the court structure should not match the decentralised
administrative structure of EC competition law
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Options
• On the one hand the European Commission shares the
administrative powers of enforcement of EC competition law
with the National Competition Authorities (NCAs) through the
European Competition Network (ECN) with its system of
allocating cases to the best placed NCA (or the Commission
itself).
• On the other hand, the new system of directly applicable EC
competition law enables the National Courts to exercise
equivalent powers to those of the European Commission
and/or their national competition authority within the scope of
their jurisdiction.
With the new emphasis on private
enforcement and damages claims, the National Courts will
have a parallel if not more important role, to that of the
Community Judicature, in competition enforcement in Europe.
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Options
• The question is: should the National Courts, and in
particular specialist national competition courts, play a
much greater role than they do at present in the system of
judicial control and European competition law enforcement?
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Is it time for a radical solution?
•
•
In the same way as the NCA’s belong to the ECN presided
over by the European Commission, member states could
establish a specialist national competition court which is then
nominated to form part of a chamber of the CFI with the
judges of the National European Competition Court
belonging to the enlarged chamber of the CFI responsible for
all types of competition law case. The CFI competition
chamber could be responsible for allocating cases either to
itself or to the best placed National European Competition
law court in accordance with strict criteria subject to review
by the CFI
A similar structure could form part of a specialist competition
tribunal under Article 225A EC
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Is it time for a radical solution?
• The key features of the new “European Competition
Court Network” could be along the following lines
• The national judges nominated by each Member State
to the CFI Chamber would be members of the CFI
• A Member State would be permitted to nominate more
than one national judge up to a total of three to sit in
their National European Court, provided that two were
nationals from another Member State
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Is it time for a radical solution?
•
The jurisdiction of the National European Competition Law
courts would cover:
 appeals against the administrative decisions of the NCAs as
well as of the European Commission (where the particular
national court had jurisdiction and where the CFI chamber
allocated the appeal to that national court)
 a similar jurisdiction in relation to fines or penalties
 jurisdiction to hear claims for damages or restitution of loss
caused by infringement of national or European competition
law whether on the basis of follow – on actions or not
 the jurisdiction rules applicable under the Brussels
Regulation would apply to determine which national
European competition Court had jurisdiction in private
enforcement cases.
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Is it time for a radical solution?
–
–
•
power to give a preliminary ruling under Article 234 EC on a referenc
from any national court (provided that the CFI competition chamber
had allocated the reference to that national European competition
Court)
and jurisdiction to award damages against the European institutions
on the same grounds as the CFI, (again if that national European
Court is allocated the case in question by the CFI Competition
Chamber)
The language of the case will be the language of the Member
State in which the national European competition Court is situate
and will be a relevant factor in the decision of the CFI Competitio
Chamber making the case allocation decision
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Is it time for a radical solution?
•
•
The CFI Competition Chamber would adopt its own rules of
procedure and those to be applied by the national European
Competition Courts. To the extent that those procedure
rules are not initially comprehensive, and otherwise until
such time as national rules of procedure and remedies are
harmonised at the Community level, national rules on
procedure and remedies will apply subject to the general
principles of equality and effectiveness laid down by the ECJ
case law
An appeal on a point of law may be made from the national
European competition law court to the main competition
chamber of the CFI with a further appeal only possible with
permission of that CFI chamber or the ECJ, to the ECJ
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Is it time for a radical solution?
•
•
•
An appeal on a point of law may be made against a
decision by the CFI competition chamber at first instance to
the ECJ, save on a reference where appeal may only be
brought with permission of the ECJ
The scope of judicial review by the national European
competition law courts (and by the CFI competition
chamber) would be a full re-hearing and appeal on the
merits so that the court could substitute its own decision or
remit the decision for reconsideration
An alternative to the European-wide nominated national
European competition Court system would be to establish
one (or possibly more than one) specialist European
competition law tribunal under Article 225A EC in one of the
Member States. The jurisdiction, scope of review and
procedure would be the same as that above
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Is it time for a radical solution?
• Clearly the area of controversy in creating a national level of
the European court will be the safeguards needed to ensure
consistency and uniform application of community
competition law
• In the light of the modernisation and decentralisation of
European competition law and the policy priority given to
deterrence and consumer welfare (including compensation),
the increased role of national courts in private enforcement
militates in favour of their participation in public enforcement
as appellate or referral courts. This parallel structure to that
of the ECN should not only enhance the competition culture
required to improve the competitiveness of European industry
to meet the goals of the Lisbon Agenda but also over time
guarantee a structural uniformity in the application of
European competition law at the national level
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Is it time for a radical solution?
• These two possible systems of national European
competition law court include the following advantages:
– increased access to justice arising from faster court
proceedings, local culture and language, local judicial
experience
– Enhanced consistency and uniformity of application of European
competition law at the national level through the appointment of
national European Competition Court judges as CFI judges by
the Member States as a whole in accordance with the
established procedure; and through the creation of a court in a
wider network supervised by the CFI in Luxembourg to which
references and/or appeals may be made as appropriate and
subject to the authority of the CFI preserving the coherence and
unity of the Community legal system
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Is it time for a radical solution?
– The removal of certain major obstacles to streamlined procedures
before the CFI and ECJ, including language, workload delays,
budget hurdles, procedural delays, and delays resulting from the
nature of judicial review under Article 230 EC (which will have to
be amended)
• The obvious problem is delay – how long will it take? Will the
Member States ever make the required Treaty amendments, if
they are necessary?
• The Answer is that nothing is going to happen for a long time,
if a radical solution is not adopted. The Member States are
accustomed to IGCs and Treaty amendments – sorting out the
European Constitution could provide the opportunity needed.
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GLOBAL COMPETITION LAW
CENTRE
The future role and organisation of
the Court in the competition field
MARK CLOUGH QC, Partner,
Solicitor Advocate
Brussels, 6 December 2005
BRUSSELS
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MADRID
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3875581
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