Raising the Bar™ – Competition Law – 6 Pump Court
Having recently joined 6 Pump Court Chambers in London, this month’s guest barrister is eager to expand his boundaries in the legal sector, and make efforts to raise the bar, both in terms of standards of service, and in the relationships 6 Pump Court and its team cultivates with its clients.
Over the next few pages Lawyer Monthly hears from Gordon Wignall on the current competition law landscape in the UK and throughout the EU, what the potential implications of a Brexit are set to look like, the drive case law has in the sector, and the overall ramifications of the Chamber’s work in this field. Gordon also details his path into the legal world, the personal rewards of being a barrister to such a complex and ever-evolving law book, and the day to day challenges therein.
Why have you chosen to more recently specialise in competition law? What inspired you from the get-go?
Competition is an obvious addition to 6 Pump Court’s, and indeed my own, regulatory practice. Personally, I also have a background in class actions, including their funding, and the impetus in private enforcement caused by the Damages Directive has made competition an area which demanded following up.
I came to competition indirectly via environmental and financial services law. My environmental work focuses on waste/recycling issues and on pollution, and my financial services work has involved UK citizens who have been affected by property promotions in various parts of Europe.
I came to realise that I had to understand relevant EU principles for my wider case load rather than having to get up to speed from time to time as necessary. I enrolled on a detailed practitioner programme run by King’s College London, which looked mainly at the four freedoms. When it became clear that this was only half the story, I embarked on the same programme given over to EU competition law.
My first EU competition case came during this programme, when I was asked by an Australian swimwear manufacturer to assist in setting up a distribution network in Europe. I could achieve this with the help of a lawyer contact in Germany and was hooked.
I was not able to leave study alone. I have just completed a taught Masters with KCL on state interference with private competition, i.e. Art.106 in conjunction with Art.102 and Inno v. ATAB in conjunction with Art.101. This arose from my curiosity about the principles behind C-553/12 P Commission v. DEI, the Greek Lignite case and their possible application for regulated network industries.
It is fair to say that studying through King’s has been a great pleasure and that the connections it has enabled, both in Brussels and elsewhere, have been invaluable.
For many years I have had an acknowledged interest in costs and funding. I was on the editorial panel of the main procedural guide to the law of England and Wales, the White Book. I was also an editor of the Law Society’s guide to litigation funding agreement (CFAs and ATE insurance funding).
I have run or been involved in UK class litigation for many years, including claims involving hundreds of thousands of litigants (mining worker claims). As well as much smaller group litigation claims, in particular pollution claims, I was also involved in product liability and financial services actions.
It was inevitable, especially after the government made claimant funding much more difficult in domestic cases (by revoking the ability to recover the premium of ‘after the event’ insurance policy which would protect clients from the risk of having to pay a successful opponent’s costs), that I would become interested in private enforcement claims.
Answering your question, I have been interested in competition law because of the satisfaction which comes from finding a way through relevant regulatory challenges in the area.
I have found that there is a surprising amount of scope for the art of persuasion in competition cases. This applies both in judicial review or in damages actions, and it is inevitably of interest for an advocate.
I also find the management and progress of class actions compelling. Third party funding developments make cases viable in the competition arena that are no longer practically possible in traditional domestic group litigation. I have recently enjoyed working on the instruction of various litigation funders, which have been devising innovative products for use in competition claims.
Having recently trained in Competition Law, what have you found to be the most challenging considerations of this legal segment?
I am currently reading Adi Ayal’s Fairness in Antitrust: Protecting the Strong from the Weak (Bloomsbury 2016). The current trend has been to look at competition cases on the basis that they are concerned with economic issues. Whilst there has been a debate as to whether the aims of competition should be particular versions of welfare and efficiency, a much more interesting question is the moral and political starting-points for these ostensibly economic issues.
The most challenging consideration for me is how to go about persuading a tribunal that it should adopt the assumptions which are most advantageous to a client’s economic case. This is a particularly complex question since it is not practicably possible to introduce lengthy evidence to support an underlying theoretical position. Clients want to make their case with the minimum of necessary expense, and careful planning is needed to bring this about.
What it the most interesting work you have done so far throughout 2016 in the realm of EU competition law?
I have been advising and representing a regulator in a network industry as to its defence of a claim for injunctive relief and damages. The case is an extension of the normal use of private litigation. The primary allegation is that in suspending a participant from an accreditation scheme the regulator is in breach of its dominant position (on the basis of a refusal to supply). The case could have real consequences for accreditation bodies, especially in the case of network industries.
It is true that claims in respect of accreditation and assurance have been made before, notably against private car manufacturers who have found reasons not to supply certificates of conformity for approved car types (see 26/75 General Motors v. Commission and 226/84 British Leyland v. Commission). More recently, claims have been made against professional regulators, including the regulator of chartered accountants in Spain (C-1/12 OTOC v. AdC) and the Law Society in the CAT (Socrates Training Limited v. The Law Society of England and Wales). These are both claims in which the respondent body competes on the same market as private training providers.
The claim in which I am involved suggests that a training provider has a claim against a regulator in the context of disciplinary proceedings simply where the accreditation has been suspended. It is possible that similar claims might be made in future against other regulators in the competition arena, whereas formerly claimants might have been expected to make their claims in the Administrative Court or in an ordinary civil court. Whatever the outcome of this case, regulators will feel themselves under increasing pressure from regulated entities.
What developments do you see have been the most recent changes to competition law in the UK and EU?
Current procedural developments are at least as significant as substantive legal and legislative decisions, both in the EU and in the UK.
In the EU, the Commission’s leniency programme has seen increasing use. Statistics about 20 years of leniency compiled by Wouter Wils were presented in his personal capacity at a seminar in Brussels on the 20th September 2016 (a seminar organised by KCL). He showed that between 2011 and 2015 immunity was granted to the first undertaking cooperating in an investigation in some 91% of Commission Decisions, as opposed to 10% in the period 1996-2000. On the other hand, there has been a more recent reduction in the number of cartels ongoing at the time of a first leniency application. There are concerns that the benefits of leniency give rise to negative effects, such as recidivist behaviour on the part of undertakings, especially those with large turnovers.
In the UK, the CAT is exercising its case management functions robustly. It is doing so in such a way as to make access to the Tribunal easier and fairer.
This year the CAT has made use of its powers under the Consumer Rights Act 2015 to apply its fast track procedure on a number of occasions (see for instance Latif & Waheed v. Tesco and also Socrates v. The Law Society).
The fast track procedure is set out in r.58 of the CAT Rules and ensures that a hearing is fixed so that it takes place within six months. Parties are expected to proceed expeditiously.
It also results in a cost capping order, so that in Socrates Training Limited Roth J. applied the procedure of the High Court and asked: ‘What is the lowest amount which a party could reasonably be expected to spend in order to have its case conducted and presented expeditiously?’ The CAT capped the claimant’s costs at £200,000 and the defendant’s at £350,000, down from budgets of £220,000 and £637,000 respectively.
There is a further reasoned order in the same case made on the 5th October 2016 (i.e. without the expense of a hearing) in which Roth J. dismissed the Defendant’s application to adduce late expert evidence, since this would be prejudicial to the Claimant.
The CAT appears to be making real efforts by its case management decisions to make the Tribunal available to SMEs.
In other claims too, the Tribunal is applying case management powers with vigour and in accordance with High Court practice aimed at keeping costs down.
See for instance the Costs Management decision (III) dated 21st October 2016 in Agents’ Mutual Ltd v. Gascoigne Halman Ltd. The CAT applied a new test of proportionality which requires there to be a “reasonable relationship” between the costs sought to be recovered and various prescribed factors including the sums claimed, complexity and the conduct of the other party. This new approach acts as a global check, so that even where costs have been reasonably or necessarily incurred they may be disproportionate.
Civil litigation in England and Wales has generally been heading towards a system of restricted costs recovery and this process is being applied in the CAT. Early costs management has the great advantage of telling the parties what its maximum exposure is to the other side’s costs, and this encourages access to the courts.
What difference is Brexit about to make in the EU’s competition landscape?
It has been said by some Brexiteers that they want to regain “control” of their national powers. Let us hope that they understand what they expect from this.
The UK has not been subject to the same scrutiny as other states for its promotion, in breach of competition rules, either of state monopolies or of the private sector. Once the UK is no longer subject to Commission decisions or judgments of the ECJ, there is the risk that the state may at some point become more powerful and less attractive to international investors. Those in favour of leaving the EU may not have anticipated this.
At the same time, the UK Courts have gradually been losing sight of the principle that the question of form and constitution is irrelevant in assessing whether an entity is an undertaking for the purposes of competition law (see C-343/95 Cali & Figli v. SEPG ). Privatisation has rendered institutions which are typically those of the state subject to competition, and this principle has become marked in the health and other regulated sectors. The Courts themselves may become more interventionist and more active after Brexit.
Whilst composing the answers to the questions put by Lawyer Monthly, I received a copy of the Brexit Competition Law Working Group (BCLWG) Issues Paper (October 2016). This has been compiled by a series of competition luminaries including Sir John Vickers, Ali Nikpay and Richard Whish QC (Hons and emeritus professor at KCL). It suggests areas in which some positive proposals need to be supplied quickly to the Government’s stated intention to employ Art.50 by the end of March 2017 (even post the High Court’s decision in Miller).
A Great Repeal Bill, assuming it brings the application of EU to an end, would have some dramatic effects in both ex ante and ex post controls, although the extent of those effects is at the least uncertain.
In the world of antitrust, Regulation 1/2008 and Block Exemption Regulations would come to an end. On the other hand, s.60, Competition Act 1998 provides that “so far as is possible,” questions arising in relation to UK competition are to be dealt with in a manner consistent with corresponding questions considered according to Community law.
In private litigation, UK practitioners will be worried that issues of jurisdiction, forum and the enforcement of judgments will make international claims much more complicated than they are at present.
Recent years have thrown up a thriving competitive market between European member states in accommodating investor disputes within the EU and elsewhere following Morrison in the US. Holland in particular has set up attractive group litigation procedures. Without new legislative measures to keep as much as possible of the status quo in place, the UK may fall behind in the international market for dispute resolution.
The BCLWG paper can be downloaded from the www.bclwg website. The authors invite comments to be submitted on any of the topics raised.
What do you like about your new Chambers at 6 Pump Court which might raise the bar in standards of competition law?
Compared with my previous very large Chambers, 6 Pump Court is a modestly sized set. It is a very pleasant place in which to work. It still retains a somewhat scholarly atmosphere to it, which is perhaps surprising given its recent accolades.
6 Pump Court is forward-thinking. It is only one of two Chambers which has multi-party entity status with our regulator. This means that we can act as a corporate entity with clients when appropriate without having to refer them on to other lawyers. It is authorised to conduct litigation, although we prefer the self-employed model.
Our understanding of different regulators and of the need to keep costs down, especially through careful case management, should make us a useful additional option in the legal services market. Our regulatory experience means that we are able to spot patterns in the way in which legislation is drafted and applied.
Recent developments of interest to us are the high levels of fines, not just in competition cases, but also for breaches of waste and other domestic regulations. The assessment of harm is common in both, and we find the underlying reasoning difficult to justify. So too the principle of piercing the corporate veil and the relevance of associated companies within one group has been the subject of recent inter-disciplinary discussion within Chambers.
6 Pump Court has some very experienced senior clerks, a great asset to both clients and barristers. Chambers can still offer close relationships with either barristers or clerks as clients prefer, a system which I suspect that many Chambers are finding difficult to replicate. Our Clerks represent a useful first point of contact. They tend to know the interests and experience of both barristers and of long-term clients.
Clients are welcome to contact us direct as a first port of call either for the purposes of litigation or in helping to find ways to introduce products via the regulators into the UK market.
All of these factors I am convinced will help us to raise the bar with clients, professional or industrial. Cost is a significant factor, and our understanding of regulators and of the practicalities of case and costs management, should make our services attractive to anyone interested in instructing us.
