The Competition Appeal Tribunal has dismissed an appeal against a cartel penalty imposed under Chapter I of the Competition Act 1998 against Sepia Logistics Ltd, formerly Double Quick Supplyline Limited.

The appellant manufactured components for use in double glazed windows.  It admitted its liability for what the Tribunal described as a “very serious infringement” of the Chapter I prohibition which concerned both price fixing and market sharing.  It challenged the quantum of the penalty imposed on grounds, inter alia, of financial hardship.  The OFT had considered, but rejected those contentions.  During the course of the penalty appeal, the Appellant produced a quantity of additional information on its financial position, but the Tribunal noted there remained “certain grey areas”.

The Tribunal upheld the OFT’s decision on all points.  It rejected a submission by the Appellant it was incumbent on the OFT to carry out additional investigations of its financial position, noting:

“where an undertaking is making a plea for a mitigated penalty to a regulatory (whether under the auspices of a formal leniency policy or otherwise, as was the case here), the onus must be on the applicant to provide the regulator with all information and/or documentation needed to assess its application and not on the regulator to actively seek out or require production of those documents and/or that information.”

The Tribunal’s decision also contains a valuable analysis of the circumstances in which two or more companies in the same group may be considered to be a single undertaking for the purposes of competition law.

Tim Ward represented the OFT.

 

 

 

The High Court (Chancery Division) dismissed (on Friday 2 March 2007) an application for an interim injunction by AAH Pharmaceuticals Limited and 7 other pharmaceutical wholesalers to restrain the implementation of Pfizer Limited’s new distribution arrangements for its prescription drugs in the UK, which include the drugs Lipitor and Viagra. The claimants claim that the arrangements, which were due to come into force today (Monday 5 March 2007), infringe both UK and EC competition law. Unichem Limited, a pharmaceutical wholesaler, which has an agreement to deliver Pfizer’s products to pharmacies and dispensing doctors, was joined as a party to the proceedings. Mr Justice David Richards gave his reasons for his decision to reject the application this morning (5 March 2007).

Peter Roth QC and Ronit Kreisberger were instructed by the claimants while Ben Rayment was instructed as junior counsel for Pfizer.

 

We are pleased to announce that Ronit Kreisberger has been appointed to the Attorney General’s ‘C’ Panel of Junior Counsel to the Crown.

Ronit specialises in European, competition and public law, with a particular focus on EC/UK competition and regulatory work, procurement and general European law.

This appointment consolidates the recent appointments to the A and B Panel. Monckton Chambers now numbers four ‘A’ Panellists, seven ‘B’ Panellists and six ‘C’ Panellists. This is a great honour and a significant acknowledgement of our expertise in all aspects of public administrative and European law.

 

 

 

Commissioners for Her Majesty’s Revenue and Customs v Isle of Wight Council and others [2007] EWHC 219 (Ch)

Under Article 4.5.2 of the Sixth VAT Directive public authorities are required to charge VAT on their supplies, when not to require them to do so “would lead to significant distortions of competition” with private sector operators.  This ‘test’ case concerned the provision of off-street car parking by local authorities.

Following an appeal by HMRC the High Court (Rimer J.) has decided to refer a number of questions to the European Court of Justice in order to clarify the way in which the required competition assessment should be carried out.  The VAT and Duties Tribunal had originally held that there were no issues of Community law that needed to be clarified and had concluded that was no significant distortion of competition in any of the areas of the four local authorities concerned.

The reference to the ECJ will focus broadly on three issues.  First, whether the assessment of competition is to be carried out on a national or local authority-by-local authority basis.  Second, what is the required degree of probability of distortions of competition arising?  Previous ECJ caselaw suggested that “would lead to significant distortions” might be read as “could lead to”. The difference can be important.  As his Lordship noted many people might think England could win the Ashes in 2009, far fewer that they would win them.  Thirdly was the issue of whether in this context “significant” means “exceptional?  References to the ECJ can take up to 18 months.

Christopher Vajda QC, Paul Harris and Ben Rayment were instructed by HMRC.

 

The High Court delivered judgment in Greenpeace v Secretary of State for Trade and Industry on 15th February 2007.  Greenpeace sought to challenge the Government’s decision in the Energy Review Report 2006, The Energy Challenge, published on 11 July 2006, to support nuclear new build as part of the United Kingdom’s future energy-generating mix.

The submissions of Greenpeace centred on the promise by the Government in the 2003 Energy White Paper, “Our energy future – creating a low carbon economy”, to carry out full public consultation on the issue before it decided whether or not to change its declared policy position not to support nuclear new build.

The High Court gave Greenpeace declaratory relief that their legitimate expectation had been frustrated and that the procedure followed was unfair, such that the decision to support nuclear new build was unlawful.

Sullivan J held that the consultation exercise had been very seriously flawed.  The consultation document: “Our Energy Challenge. Securing clean, affordable energy for the long-term”, gave every impression of being an issues paper, rather than a consultation paper on the substantive issue, as to whether the Government should support nuclear new build in the future.  As a consultation paper, it was inadequate since it offered no proposals and there was insufficient information given to consultees to enable them to make an intelligent response.

With regard to the issue of nuclear waste arising from new build, Sullivan J found that the consultation had not merely been inadequate but had been misleading in relation to the position of the Committee on Radioactive Waste Management (CORWM). CORWM’s draft report was only published two weeks after the consultation period had closed.  Sullivan J held that fairness, in this situation, required consultees to be able to respond to this new material.

Kassie Smith was acting for Greenpeace as a junior barrister in this high profile case.

 

 

 

We extend our warmest congratulations to Paul Harris and Tim Ward who have been elevated to the A Panel of Junior Counsel to the Crown and to Ian Hutton and Meredith Pickford for their elevation to the B Panel. Similarly, we are also very pleased to announce that Ian Rogers’ application to the B Panel was successful.

 

The Court of Appeal has handed down its keenly anticipated judgment in Attheraces Limited v. The British Horseracing Board Limited [2007] EWCA Civ 38 (judgment of 2 February 2007) which raised an important question which has long been a source of considerable difficulty for competition lawyers: at what point do prices charged by a dominant undertaking cross the threshold of being so excessive as to constitute an abuse?

The question arose in a dispute between the British Horseracing Board Ltd (“the BHB”) (the administrator and governing body of British horseracing) and Attheraces Ltd (“ATR”) (a broadcaster whose output largely consisted of information concerning British races). The BHB had engaged a third party to compile and distribute certain pre-race data on the BHB’s behalf. ATR sought to negotiate with the BHB to be supplied with that data for the purposes of two relatively new broadcasted services which ATR was supplying to bookmakers outside of the UK and Republic of Ireland. The BHB refused to supply the data except in return for a 50 percent share of ATR’s profits from the two services.

ATR then commenced proceedings in the Chancery Division, alleging that the BHB had abused its dominant position in the market for supply of pre-race data in respect of British races by, inter alia, charging excessive prices. The High Court agreed, holding that the prices demanded by BHB for supplying the data to broadcasters were abusive, essentially because they yielded profits for BHB which significantly exceeded the “cost+ formula” (i.e. the BHB’s costs of compiling and distributing the pre-race data, together with a reasonable return on those costs). The BHB appealed.

The Court of Appeal has allowed BHB’s appeal, holding that the High Court had been wrong to regard the “economic value” of the pre-race data as limited to the product of the cost + formula. In a judgment which was firmly rooted in the purposes of competition law (namely, to protect competition and consumers), the CA stated that the High Court should not have found BHB’s prices to have been “excessive” despite there being no evidence that those prices were undermining competition in downstream markets. Further, even if the BHB’s prices had been “excessive”, they were arguably not “unfair”, and therefore arguably not abusive, having regard to the activities undertaken by BHB in administering and funding aspects of British racing, which activities produced benefits to ATR which were not reflected in the costs of compiling and distributing the pre-race data.

Peter Roth QC acted for the successful appellant.

On 8th January 2007, The Lawyer published The Hot 100 which identified members of the legal profession who have excelled in their chosen fields during the past year. The edition features a section for Competition law in which Ronit Kreisberger was highlighted.

“This time last year Ronit Kreisberger was a senior associate and qualified solicitor advocate at Herbert Smith. She made waves last March when she decided to make the switch to the bar and, as a competition expert, found a natural home at Monckton Chambers. Kreisberger is now one of the set’s rising stars.

Kreisberger hit the ground running in her new role by acting for the OFT when it intervened in House of Lords proceedings in Inntrepreneur Pub Company v Crehan, the first case in which a UK court awarded damages for harm suffered as a result of a competition law infringement. This brought an end to a case that had been rumbling on for 15 years.

More importantly, this case may have proved Kreisberger’s intellectual credentials with Monckton, but her ‘seven years at the coalface’ at Herbert Smith have afforded her commercial nous and an understanding of what clients and solicitors want from their barrister – a rare combination”