The Competition Appeal Tribunal (Peter Freeman QC) has rejected an urgent application by Flynn Pharma for interim relief against the CMA’s decision that Flynn should reduce its prices of Phenytoin capsules with effect from Monday.  The Directions form part of the CMA’s decision of 7 December 2016 in which it found that Flynn’s prices (and those of its supplier Pfizer) were excessive.  Flynn and Pfizer both intend to appeal against the CMA’s Decision.

Flynn brought an application for interim relief to prevent the Directions from taking effect until its appeal had been resolved.   Flynn argued that the Directions would cause it serious and irreparable harm including financial losses, a potentially permanent effect on market prices and changes to the organisation of its business.  Flynn offered a cross undertaking to protect the NHS against financial losses which interim relief would cause.  The CMA opposed the application and the Department of Health intervened in support of the CMA.

The Tribunal found that the grant of interim relief would take funds out of the NHS which would otherwise be used to treat patients in need of care in the period pending the appeal.  This would cause irreversible harm to the patients in question.  The Tribunal found that this non-financial harm was detrimental to the public interest, and was the very harm which the Decision was intended to prevent.  The Tribunal ruled that this outweighed any harm which the Directions would cause to Flynn.  It also identified difficulties in applying the cross undertaking which Flynn had proposed.

The application is the first to be decided under the new rule 24 of the Tribunal’s Rules of 2015 which the Tribunal found establishes a new jurisdictional threshold for interim orders.

The judgment can be found here.

Ronit Kreisberger acted for Flynn Pharma.

Rob Williams acted for the CMA.

Brendan McGurk acted for the Department of Health.

Article 13 of the VAT Directive exempts public bodies from VAT except where this would lead to significant distortions of competition. The decision in Case C-288/07 Commissioners of Her Majesty’s Revenue & Customs –v- Isle of Wight Council (2008) ECR I-7203 appeared to say that if the public body and private operators carry on an activity of the same nature, then fiscal neutrality requires that they both be subject to VAT but where the nature of the economic analysis of the distortion of competition (if any) to be carried out was very unclear. In particular, it remained unclear whether a distortion of competition was to be presumed in such circumstances. In Case 344/15 National Roads Authority v Revenue Commissioners, the Advocate General Spzunar on 8th September 2016 expressed the view that even though there was no evidence of actual competition between the Irish public operator of two toll roads (the NRA) and private toll road operators, fiscal neutrality required that the NRA should be subject to VAT on the tolls it charged in the same way as private operators because the two activities were similar in nature so that a distortion of competition must be presumed.

In a decision handed down on 19th January 2017 the CJEU took a different view. The CJEU stated that while the general principle was that any economic activity was to be subject to VAT, that principle could not be applied in a way which deprived the exemption for public bodies of its effectiveness. Treating a public body as non-taxable requires an assessment of economic circumstances. The exception in relation to significant distortions of competition “[43]….presupposes, first, that the activity in question is carried on in competition, actual or potential, with that carried on by private operators and, secondly, that the different treatment of those activities for VAT purposes leads to significant distortions of competition, which must be assessed having regard to economic circumstances. [44] It follows that the mere presence of private operators on a market, without account being taken of matters of fact, objective evidence or an analysis of the market, cannot demonstrate the existence either of actual or potential competition or of a significant distortion of competition.” Since there was no economic analysis or evidence that the NRA competed (actually or potentially) with the private operators, the Court held that the NRA should not be regarded for the purposes of Article 13 as competing with private operators.

Michael M. Collins SC acted for the National Roads Authority.

Please click here for the full judgment.

The Supreme Court has handed down three important judgments which are expected to have significant impact on the protection of human rights overseas.

Serdar Mohammed v Ministry of Defence & Al Waheed v Ministry of Defence [2017] UKSC 2 (available here) concerned the capture of individuals by UK forces in Afghanistan and Iraq. Following two hearings before a nine-member Supreme Court, the Court held by a majority of 7 to 2 that the UK had authority to detain individuals pursuant to the United Nations Security Council Resolutions authorising the use of all necessary measures if the detention was found to be required for imperative reasons of security – a matter that will be determined by the trial judge in both cases. However, the Court further held by majority of 6 to 3 that the procedural protections afforded to detainees in Afghanistan had in any event been inadequate (there were no findings regarding the procedures in Iraq before the Court).

Belhaj and another v Straw and others & Rahmatullah (No.1) v Ministry of Defence and Foreign and Commonwealth Office [2017] UKSC 3 (available here) concerned the UK’s involvement in the capture and rendition of individuals abroad. A seven-member Supreme Court dismissed the Government’s appeal, holding that the Defendants could not rely on state immunity or foreign act of state and that the cases should proceed to trial.

Rahmatullah (No.2) v Ministry of Defence & Mohammed and others v Ministry of Defence [2017] UKSC 1 (available here) concerned tort cases brought by the Claimants under the law of Iraq and Afghanistan. A seven-member Supreme Court held that the Defendant could rely on the doctrine of Crown Act of State and that insofar as the claimants’ tort claims are based on acts of an inherently governmental nature in the conduct of foreign military operations by the Crown, the Government cannot be liable in tort.

Nikolaus Grubeck is acting for Serdar Mohammed, Al Waheed and Rahmatullah.

Julianne Kerr Morrison is acting for Serdar Mohammed.

The CAA has issued a final infringement decision that East Midlands International Airport Limited (EMIA) and Prestige Parking Limited broke competition law by agreeing to fix prices of car parking services at East Midlands International Airport.  See full CAA press release.

Anneli  Howard , acting as the CAA’s Standing Counsel, advised the CAA from the outset of the investigation, including the transfer of the case from the CMA under the concurrency regime, leniency and settlement process, evidence gathering, witness interviews, assisting with drafting the SO and the final decision.

On 30 November 2016 the Court of Appeal (Lewison LJ, Beatson LJ, Sir Stephen Richards) handed down judgment in R (British American Tobacco and others) v Secretary of State for Health [2016] EWCA Civ 1182. The Court rejected all of the tobacco companies’ grounds of appeal and confirmed the earlier conclusion of the High Court that the Standardised Packaging of Tobacco Products Regulations 2015 are lawful.

Ian Rogers QC, Julianne Kerr Morrison and Nikolaus Grubeck acted for the Secretary of State for Health on appeal and in the High Court before Mr Justice Green.

The judgment is available here.

The United Nations Human Rights Committee has ruled in Saxena v. Canada (Communication no. 2118/2011, 3 November 2016) that the consent by Canada to the prosecution of Mr Rakesh Saxena for two offences after his extradition to Thailand to face criminal charges for conspiracy to embezzle money from the Bangkok Bank of Commerce had resulted in a violation of Article 13 of the International Covenant on Civil and Political Rights. Article 13 requires that any alien lawfully present in a State Party’s territory be allowed to submit the reasons against his expulsion and to have his case reviewed by, and be represented for the purpose before, the competent authority or a person or persons especially designated by the competent authority.

Mr Saxena had been extradited to face criminal charges for conspiracy to embezzle money from the Bangkok Bank of Commerce but the two offences to which Canada subsequently gave its consent to his prosecution had not been listed in the original extradition request and surrender order.

The finding of a violation of Article 13 arose from the fact that Mr Saxena had been deprived of the possibility to comment on the request to waive the specialty rule and that the possibility for him to seek a review of such request by the courts had been foreclosed.In reaching this conclusion the Committee noted that:

• during the extradition proceedings, Mr Saxena had raised concerns that he could be charged, prosecuted and tried for offences other than those for which he was surrendered;
• Canada had not denied that it would not have granted the waiver of specialty had it known that he would be charged for other offences committed prior to issuing the extradition order which had not been covered by the surrender order;
• the waiver was granted notwithstanding the repeated and emphatic assurances by Canada’s judicial and administrative authorities that there would be no breach of the specialty rule, i.e. that Mr Saxena would not be tried in Thailand for offences other than those for which he was extradited;
• Mr Saxena had not been given the opportunity to challenge the decision on granting consent to the waiver of specialty, thereby depriving him of the due process guarantees he was entitled to in compliance with Article 13 of the Covenant, and that, as a consequence of the procedure, he might have been exposed to a much longer detention and imprisonment; and
• during the proceedings related to the request by Thailand for granting consent to a waiver of specialty Mr Saxena had remained within the jurisdiction of Canada.

In the view of the Committee, Canada was now obliged, inter alia, to revise and amend its extradition legislation by including a procedure for consent to a waiver of specialty, in full compliance with its obligations under the Covenant and the finding in this case.

Mr Saxena was represented before the Committee by Jeremy McBride.

To view the Committee’s Views, please click here.

The Court of Justice of the EU today ruled (here) that fees charged by Westminster City Council to an applicant for a licence to operate as a sex shop were unlawful.

Mr Hemming, trading as “Simply Pleasure Ltd”, challenged the application fees he had to pay to Westminster for a licence to operate a sex shop.  Those fees amounted to over £29,000.  The fees broke down into two parts: about £2,500 covered the cost of processing the application, while the remaining £26,500 odd covered Westminster’s costs of policing compliance with licensing requirements and tackling unlicensed operators.  That latter amount was refundable if the licence was refused.

Mr Hemming relied on Article 13(2) of the Services Directive (Parliament and Council Directive 2006/123/EC), implemented into UK law by regulation 18(4) of the Provision of Services Regulations 2009.  That provision requires that charges which an applicant may incur from its application shall not exceed the cost of the procedures (and must also be proportionate and reasonable).

In a judgment given in May 2015 ([2015] UKSC 25), the Supreme Court agreed that Article 13(2) excluded costs of enforcement, such as tackling unlicensed operators, from the scope of costs for which an application charge could be made.  But it held that Article 13(2) did not prevent a body which was successful in its application from then being charged a further fee to cover enforcement costs: such a fee was not a charged incurred from the application but, rather, a fee incurred for the possession of a licence.  However, the Supreme Court considered that there was doubt as to whether a fee charged at the time of application but which was refundable if the application was unsuccessful – which was the position in the case before it – amounted to a charge, and referred that question to the Court of Justice.

The Court of Justice has today ruled that an application fee payable at the time of submitting an application is a “charge” under Article 13(2) even if it is refundable if the application fails.  It remained a “financial obligation” that must be discharged before an application could be considered.

The Supreme Court judgment sharply distinguished between an application fee and a fee payable once the application is successful.  The Court of Justice did not deal with that distinction.  However, it may be noted that in his Opinion (here), Advocate General Wathelet stated that if, having succeeded in its application, the successful applicant’s permission to operate was then made conditional on payment of a fee designed to cover enforcement costs, then in reality that further fee should be regarded as a charge falling under Article 13(2).  He also expressed doubts that a fee designed to cover enforcement costs – which he described as a “fee enabling members to benefit from the certainty that membership of the ‘club’ will remain restricted” – could ever be reasonable or proportionate.  The Court of Justice, however, did not express a view on those points.

The case has implications going beyond the sex shop industry: indeed, a number of professional bodies that charge fees for authorisation to practise (including the Law Society and the Bar Council) intervened before the Supreme Court, as did HM Treasury.

George Peretz QC appeared in the Supreme Court for HM Treasury.