High Court judge, Mr Justice Colton, has ruled that the Department for Regional Development in Northern Ireland breached public contract regulations in rejecting the tender submitted in 2009 as part of a joint venture between FP McCann Limited and Balfour Beatty (“BBMC”).  Recent government information shows that the cost of the project has now reached up to £135 million.  This consortium’s tender was part of a public procurement process run by DRD’s Road Service to appoint contractors to design and build the A8 dual carriageway between Belfast and Larne. The contract was to the most economically advantageous tender. The joint venture did not secure the contract because it was asserted by the Department the bid that been submitted  was an abnormally low tender and that this carried a risk that BBMC and Roads Service would be unable to agree a target price after the contract had been entered into, and that as result the project would stall. Lagan Ferrovial Costan Consortium was appointed as contractor and they have been carrying out works on the A8 over recent years.

Michael Bowsher QC, acting for the construction company FP McCann Limited, claimed that BBMC had been unlawfully denied the work and should be entitled to damages.

The judge found that there were significant flaws in the process of assessing the plaintiff’s tender.  The judge ruled that “there has been a clear breach of duty by the defendant in respect of its consideration of the BBMC bid and specifically a breach of Regulation 30 (of the Public Contracts Regulations 2006).”  The judge adjourned the case for further submissions to assess the scale of the compensation with words: “The defendant’s breach of duty should be marked by a meaningful award to reflect the loss of opportunity to the plaintiff to be awarded a significant and potentially lucrative contract.”

See Court’s summary of judgment.

In a landmark judgment handed down today, the High Court has ruled that it is unlawful for the Secretary of State for the Home Department (“SSHD“) to detain children under her immigration powers for any longer than 24 hours, irrespective of whether the relevant immigration official has reasonable grounds for suspecting the prospective detainee to be an adult: R (AA) v SSHD [2016] EWHC 1453 (Admin). The judgment is significant in that it is the first judicial consideration of the 2014 amendments to the Immigration Act 1971, which (as this case confirms) dramatically alter the previous state of the law on the lawfulness of child immigration detention.

The case was brought on behalf of a Sudanese asylum seeker, AA, who was detained by the SSHD for 13 days under her general powers of detention in paragraph 16 of Schedule 2 to the 1971 Act. The detention was said to be justified in accordance with Chapter 55 of the Enforcement Instructions and Guidance, the well-known Home Office policy which permits the detention of individuals claiming to be children but whose physical appearance / demeanour “very strongly suggests that they are significantly over 18 years of age and no other credible evidence exists to the contrary“. While AA was in detention, a local authority that had conducted a Merton “age assessment” concluded that AA was a child, and AA was eventually released on the basis of that assessment, there no longer being any basis under the SSHD’s policy for maintaining the detention.

AA contended in the proceedings that he had been unlawfully detained, notwithstanding that his detention had been in accordance with the terms of the SSHD’s policy. Notably, the Supreme Court held in 2013 (in R (AA (Afghanistan)) v SSHD [2013] UKSC 49) that the detention of a child in the mistaken but reasonable belief that he was an adult was not contrary to that policy, or to the general duty to safeguard and promote the welfare of children in section 55 of the Borders, Citizenship and Immigration Act 2009. However, after judgment in that case had been handed down, Schedule 2 to the 1971 Act was amended so as to subject the SSHD’s general powers of immigration detention to express statutory restrictions in the case of unaccompanied children: see paragraph 18B of Schedule 2 to the 1971 Act, which provides that unaccompanied children may only be detained in short-term holding facilities, and even then only for a maximum period of 24 hours. The word “child” is defined in paragraph 18B(7)in entirely objective terms as “a person under the age of 18“.

In a careful and detailed judgment, Sir Stephen Silber rejected the SSHD’s submission that the word “child” in paragraph 18B of Schedule 2 to the 1971 Act should be read so as to incorporate reference to the reasonable beliefs of the immigration official. “Child” had to be interpreted objectively, as a matter of “precedent fact” just as it had been in the seminal Supreme Court case of R (A) v Croydon [2009] 1 WLR 2557 in the context of local authorities’ duties to “children in need” under the Children Act 1989. It followed that the Claimant’s detention was unlawful, it being accepted that he was unaccompanied, and under 18 years old, at the time of his detention. It followed that AA’s detention was unlawful from the outset (with damages to be assessed in due course). In addition, the Judge held that even if (contrary to his findings on the main ground of judicial review) the SSHD could lawfully detain AA on the basis of a reasonable belief that he was an adult, AA’s detention was in any event unlawful from the date on which the SSHD received the local authority’s age assessment confirming the Claimant to be a child.

The judgment constitutes an extremely important development with the potential to have far-reaching implications for the detention of asylum-seeking young people. Permission to appeal to the Court of Appeal has already been granted by Sir Stephen Silber and judicial review practitioners will await the outcome of the appeal with interest. For now, however, the law is straightforward: individuals under 18 cannot lawfully be detained under immigration powers (i) for any longer than 24 hours or (ii) in adult immigration removal centres for any length of time. The SSHD’s beliefs about individual’s age are irrelevant.

Michael Armitage, instructed by Stuart Luke of Bhatia Best, appeared as sole counsel for the successful Claimant.

Mr Justice Collins has handed down judgment in R (S) v NHS England, a claim in relation to the refusal by NHS England to fund the narcolepsy drug sodium oxybate (Xyrem) for a 17 year old girl. S was represented by Ian Wise QC and Stephen Broach, instructed by Hodge Jones and Allen.

At the conclusion of the hearing on 4 May 2016 the Judge made an interim order requiring NHS England to fund a three month trial of sodium oxybate. The judgment handed down today gives the Judge’s reasons for overturning the refusal of funding. In essence, the Judge found that NHS England erred in rejecting an ‘Individual Funding Request’ made on the basis that S had an exceptional need for the medication.

The Judge held that ‘a decision to refuse the treatment could not be supportable’ and that ‘this is a very rare case in which the decision making has gone wrong.’ There were failures by the Defendant to have regard to all the matters raised by the Claimant’s treating clinician and an ‘altogether too restrictive application of exceptionality’.

The full judgment is available here.

Please see article here.

 

On Friday 27 May, the Court of Appeal handed down an important judgment on the interplay between competition law and the licensing of essential patents.

This is part of a landmark patent infringement case where Unwired Planet, a “patent assertion entity” that has acquired from Ericsson certain “standard essential patents” (“SEPS”) used in smartphones and network equipment, has sued Samsung, Google and Huawei for infringing the SEPS (Google has largely settled out).

Ericsson continues to derive licensing income from the patent assertion entity, on an ongoing basis.  Among other things, it is contended that Ericsson is seeking to circumvent its own obligations to license its patents on Fair Reasonable and Non Discriminatory (“FRAND”) terms by using a “privateer”.  Ericsson has been joined to the action.  Samsung and Huawei have raised various competition law defences, under Articles 101 and 102 TFEU.

In the High Court, Birss J. struck out one of Samsung’s Article 101 TFEU defences.  This related to the complaint about the effectiveness of the transfer from Ericsson of its obligation to license essential patents on FRAND terms.  Samsung argued, among other things, that the content of Ericsson’s original “non-discrimination” obligation would be circumvented by Ericsson transferring the patents to the patent assertion entity, without the new entity needing to have regard to Ericsson’s duty of non-discrimination.  The High Court ruled that this contention should be struck out: it was enough for Unwired Planet to make a fresh FRAND declaration of its own.

The Court of Appeal has overruled the High Court on this issue.  It has accepted that Samsung has an arguable case that the arrangement whereby Ericsson transferred the SEPs to Unwired Planet is in breach of Article 101 TFEU and void because of the failure to ensure that Unwired Planet would respect the non-discrimination aspect of Ericsson’s FRAND obligation.  It upheld the Judge on another aspect of the complaint, however, which related to whether the transfer of the patents had given prospective licensees the same enforceable rights to insist on FRAND terms as such persons used to have against Ericsson, when Ericsson owned and licensed the patents directly.

In his judgment, Lord Justice Kitchin (with whom Lord Justice Tomlinson and Sir Timothy Lloyd agreed) recognised that this is a developing area of the law which has received recent attention from the Court of Justice of the EU and the European Commission.  He accepted Samsung’s argument that it has a realistic prospect of persuading the trial judge that it would be anti-competitive for Unwired Planet to be able to charge licence fees which are significantly higher than those which Ericsson itself charged and which would have been discriminatory having regard to Ericsson’s existing licensees had Ericsson sought to charge them directly.  He recognised that these higher licence fees could distort or restrict competition in downstream markets to the detriment of consumers.

Lord Justice Kitchin also accepted the inter-relationship between Samsung’s non-discrimination argument and its other competition law defences, in particular the argument that Ericsson strategically sold part of its portfolio of essential patents to Unwired Planet, while keeping a close ongoing involvement in the monetization of those patents.  He considered that Samsung has an arguable case that Ericsson has sought to circumvent its own FRAND obligation and simultaneously benefit from the increased licence fees.

Samsung’s various competition law arguments will be considered at the 13 week trial, due to commence in October 2016.

Samsung is represented by Jon Turner QC, Meredith Pickford QC, Laura Elizabeth John and James Bourke.

The full judgment is available here.

Iiyama Benelux BV & Ors v Schott AG & Ors

Mr Justice Mann has dismissed claims brought by iiyama in respect of cartels concerning Cathode Ray Tubes (CRTs) and CRT Glass, on the basis that the claims fall outside the territorial scope of EU competition law. The claimants were subsidiaries of iiyama, mostly based in Europe, and alleged that they had purchased completed computer monitors which incorporated CRTs and CRT Glass and which had been subject to cartels. The claims relied on EU competition law, and were initially brought on the basis of two infringement decisions made by the European Commission in relation to CRTs and CRT Glass respectively. However, it later transpired that the CRTs and Glass which were ultimately purchased by the claimants had originally been sold in Asia, and only arrived in Europe through a supply chain with a number of intervening stages.

The Defendants (who were variously parties to the Commission’s decisions relating to CRTs and CRT Glass) applied to have the claims struck out, or for summary judgment, or to have permission to serve out of the jurisdiction set aside, all on the basis that the claim was not properly arguable.

Mann J found that the claim against the Glass Defendants failed because the cartel found by the Commission related only to Europe, and did not cover supplies of CRT Glass in Asia. It was not possible to see how the EU cartel affected sales in Asia, and although the claimant alleged that there might be a worldwide cartel, no such cartel had been found by the Commission, and no such cartel was pleaded.

The Court also found that the claims against both the CRT and Glass defendants fell outside the territorial scope of EU competition law, considering two doctrines of EU law – the implementation doctrine and the qualified effects doctrine. The claimants could not rely on the implementation doctrine, which required that the cartel was implemented in the EU because the relevant sales of Glass and CRTs had been made in Asia. The claimants also could not rely on the qualified effects doctrine – i.e. that the cartel had foreseeable, immediate and substantial effects in the EU – because the supply chain by which they had acquired the products was not immediate.

Tim Ward QC and Rob Williams acted for Schott instructed by Travers Smith LLP. Daniel Beard QC acted for Samsung SDI instructed by Allen & Overy LLP.

The full judgment is available here.

Case C-547/14 R (Philip Morris Ltd and others) v Secretary of State for Health

Case C‑477/14 Pillbox 38 (UK) Ltd v Secretary of State for Health

Case C‑358/14 Poland v Parliament and Council

On 4 May 2016, the Court of Justice of the European Union delivered its judgments in three cases concerning the Tobacco Products Directive (Directive 2014/40/EU). The revised Directive was adopted in April 2014 and provides for a wide range of restrictions concerning tobacco packaging, flavouring and e-cigarettes.

In Philip Morris, a preliminary reference from the Administrative Court, the Court held that the Article 24(2) of the Directive permitted Member States to maintain or introduce further requirements in relation to aspects of the packaging of tobacco products which were not harmonised by the Directive and that was consistent with Article 114 TFEU, which was to be regarded as the correct legal base for the Directive.  The Court rejected arguments by the tobacco companies that the Directive was a disguised public health measure.  It held that the EU Legislator was permitted to use the internal market approximation base under Article 114 TFEU whilst, at the same time, ensuring a high level of human health protection.

The Court also considered the legality and proportionality of several packaging restrictions imposed by the Directive. It upheld Article 13(1), which prohibits the display of any element or feature which might promote, or give a misleading impression with regard to, the product, including factual information about the product, its elements or characteristics, whether or not the information concerned is factually accurate. For example, the tobacco manufacturers had complained that this would prevent them referring to taste, smell, any flavourings or the fact that their product had improved biodegradability, organic or low tar or nicotine contents.  The Court held that a high level of health protection requires that consumers should not be encouraged to consume tobacco products by means of information which, although factually accurate, they may interpret as meaning that the risks associated with their habits are reduced or that the products have certain benefits.

The Court also assessed the proportionality of other packaging requirements, including the ban on flavoured tobacco and the requirement that new combined visual and pictorial health warnings should cover at least 65% of the front and back of the packet.  The Court rejected arguments that those requirements were manifestly inappropriate or went go beyond what was necessary to attain the objective of improving the internal market for tobacco and related products, taking as a base a high level of protection of human health, especially for young people. The Court also found that the other questions referred by the Administrative Court had disclosed no factors affecting the validity of certain other parts of the Directive.

In Pillbox 38, another preliminary reference from the Administrative Court, the Court considered whether the various requirements and restrictions imposed by Article 20 of the Directive on the construction, marketing and advertising of e-cigarettes were compatible with EU law. The Court again concluded that the question referred to it by the Administrative Court disclosed no factors affecting the validity of Article 20.

In Poland v Parliament and Council, the Polish government had brought an action to annul the provisions of the Directive which prohibited the use of flavouring in cigarettes, including menthol. The Court dismissed the application.

The judgment in Philip Morris is available here, the judgment in Pillbox 38 is available here, and the judgment in Poland v Parliament and Council is available here.

Ian Rogers QC and Eric Metcalfe appeared on behalf of the United Kingdom in all three cases. Anneli Howard appeared for Joh. Wilh. von Eicken GmbH, one of the tobacco manufacturers joined as an interested party in the Philip Morris case.

The cases have been widely reported in the national and international press, including the Times, the New York Times and the BBC.

The action brought by British American Tobacco UK Ltd and others v Secretary of State for Health for the annulment of the Standardised Packaging of Tobacco Products Regulations 2015 was dismissed by Mr Justice Green in the High Court on 19 May.

One of the main purposes of standardised packaging is to render cigarette and hand rolling tobacco packaging and presentation less attractive to the eye and to the touch, especially to young people, and thus to reduce the number of young people starting to smoke and to make it easier for existing smokers to quit.  A key central argument by the tobacco companies in the case was that the Regulations, which will come into force on 20 May, are said to deprive the manufacturers of their trade marks on cigarette and hand rolling tobacco packaging.

The main complainants were the four tobacco multinationals. They claimed that the Regulations infringed a large number of provisions of EU and international law, including Article 1 of the First Protocol to the ECHR (on the right to property), the provisions on the free movement of goods within the EU, the Community Trade Mark Regulation and TRIPS. A range of arguments concerning the interpretation of the Revised Tobacco Products Directive and proportionality were also pursued by various manufacturers of tipping paper (the part of the paper which encloses the cigarette filter).

Mr Justice Green rejected each argument advanced by the claimants in a judgment of nearly 400 pages.  This judgment, which is one of the first in the world on standardised packaging measures, is likely to be highly influential in many jurisdictions. A number of countries have stated their intention to adopt standardised packaging measures similar to those in the UK.

Action on Smoking and Health (ASH), the tobacco control NGO, intervened in support of the Secretary of State for Health.

The judgment may be found here.

Ian Rogers QC, Julianne Kerr Morrison and Nikolaus Grubeck appeared on behalf of the Secretary of State for Health.

Peter Oliver and Ligia Osepciu appeared on behalf of ASH.

The CMA today announced that it has taken a decision finding an infringement of Chapter I of the Competition Act 1998 by Ultra Finishing Limited, a leading supplier of bathroom fittings.  A penalty of £786,668 has been imposed (reduced from £1,032,502 to reflect the compliance programme and early settlement).  The infringement concerned the advertising and setting of prices for online sales.  The CMA had earlier announced the settlement agreement in this case.

In its press release the CMA explains that it has awarded a further 5% discount to Ultra for setting up a compliance programme.  The programme “includes a clear commitment to competition law compliance by the Ultra Board, including an external statement to that effect, which has been published on Ultra’s website. The company will also roll out tailored compliance training for all employees, and has put in place a detailed procedure to identify, assess and mitigate competition law risks. Ultra will review the compliance programme on an annual basis and submit a report on its compliance activities to the CMA each year for the next three years.”  This is a useful indication of the type of compliance programme that the CMA is likely to regard as appropriate in other cases where a discount is sought for setting up such a programme.

The CMA also states that it has issued warnings to other suppliers in the sector for similar practices, and warns that it is prepared to issue further infringement decisions and warnings in future.  In particular, it warns retailers (who were not subjected to any finding of infringement in this case) that they, too, may be fined in future cases of resale price maintenance, and draws attention to its leniency programme.  The CMA’s message is clear: if you are a retailer who pressurises your supplier to “crack down” on online discounting by your competitors, or if you are yourself subjected to such a crackdown, you should go to the CMA – or else you are at risk of being fined.

George Peretz QC advised Ultra Finishing Limited throughout the CMA’s investigation.

 

On 26 April, the Competition and Markets Authority (“CMA”) announced that Ultra Finishing Limited (“UFL”), a leading manufacturer of bathroom fittings, had agreed to pay a fine of £826,000 under the CMA’s settlement procedures (including a discount conditional on implementing a satisfactory compliance system).  The CMA’s press release is here.

The infringement of the competition rules at issue concerned measures taken by UFL in relation to the pricing of its products on the websites of its online distributors.

The CMA’s press release makes it clear that the CMA is currently focusing on restrictions, such as resale price maintenance and restrictions on advertising discounted prices, that limit the extent of online competition, particularly in consumer products.

George Peretz QC has been advising UFL throughout the investigation.

Monckton barristers Jon Turner QC, Ben Rayment and Julian Gregory have provided an Opinion for Greenpeace and Ecotricity which could have implications for the Government’s plan to build a new nuclear power plant at Hinkley Point.

Hinkley Point C is the first of a new generation of nuclear reactors intended to be built by EDF in the UK.  The UK government has already agreed to provide significant state support for the project by, among other things, guaranteeing a strike price for the electricity produced for a period of 35 years.  That support was classified as state aid and was only authorised by the EU Commission following an investigation after being scaled back (a decision which is in any event under challenge before the European Courts).

The 85% French state-owned EDF has now said that without further state support from the French Government it will not participate in the project.   In their Opinion, the Monckton barristers consider the various packages of financial support reportedly under consideration.  They have advised that any further French state support for Hinkley would likely constitute state aid and would therefore need to be notified to and investigated by the EU Commission.  The Commission would need to take into account its likely impact of the state support on competition in the energy market and other forms of generation, including renewables.

The Opinion, published today, has been covered in the media on both sides of the Channel, including
Sky News
Reuters
Financial Times
The Guardian
Les Echoes

Jon Turner QC, Ben Rayment and Julian Gregory were instructed by Harrison Grant on behalf of Greenpeace and Ecotricity.