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Legal Focus
JANUARY 2013
The Changing Landscape of UK competition Law
Continuing with our feature focusing on the Changing Landscape of Competition Law, Lawyer Monthly speaks to Neil Warwick, Head of EU & Competition at Dickinson Dees. Here he discusses with us his work, the main points of the OFT’s revisions and its effects. Dickinson Dees is a national law firm based in Newcastle upon Tyne. It has five offices across the country in the North East, Leeds and London, in addition to an associated office in Brussels. Neil is well-placed to comment on this practice area, with over 20 years’ experience in the competition field. He is a member of both the Programme Executive Group and the Local Management Committee for the Department for Communities and Local Government which supervises and allocates European Regional Development Funds in the North of England.
What are the main points of the revisions to the office of fair trading decision making process?
The main points of the revisions to the Office of Fair Trading (OFT) include:- • The introduction of a three person “Case Decision Group”
• More checks and balances to guarantee independent decision making and due process
• More transparency in penalty setting
• More “interactive oral hearings” as well as additional “state of play meetings”
• Case specific administrative timetables will now be published.
do you think the revisions go far enough?
Standard commentary and analysis indicates that the rationale for the OFT introducing these revisions is to bring it in line with international best practice whilst improving transparency.
In reality, however, most commentators are now indicating that the changes fall short of introducing an institutional separation between the investigation stage and the decision making stage. This is likely to be further confused when the Competition Commission and the OFT are merged to become the Capital Markets Authority.
What will be the main effects of this on business in the UK?
The revisions are largely for the OFT to try and correct self-made problems following a series of public and embarrassing case failures. The centre point of the revisions, the “Case Decision Group”, will only be involved in cases that are brought to it, will only review the papers that have been
discovered in the investigation and will only actually interact with individuals at the penalty setting stage of the process. This means that there is scope for Case Decision Group to be “steered” by the Investigation Teams.
The likelihood is that these revisions will make the UK system a more administrative, process-driven anti-trust system. Combined with some of the most severe penalties for anti-trust in the world, this could have the unintended effect of making the UK less internationally competitive for investment, particularly foreign direct investors wishing to set up operations in the UK.
Is there anything else you would like to add?
Unfortunately the focus of the revisions issued by the OFT is almost entirely on how to make the bureaucracy more transparent. The motivation appears to be to stop further criticism of investigations and effectively make life easier for those who administer the process.
There is no indication that changing the system and introducing new stages will actually speed up the process and make life easier for those facing investigation. There is also a real danger that the UK is falling out of step with competition/anti-trust enforcement, becoming too process driven and draconian.
Luxembourg University held a major international conference in March 2012 to debate the criminalisation of cartels (published at the New Journal of European Criminal Law Volume 3/2012/03 Special Edition). Leading academics, judges and practitioners debated the efficiency of a form-based criminal process as a deterrent for cartel behaviour and anti-trust breaches.
However, no evidence was put forward to show that criminal form-based processes anywhere in
the world act as a deterrent. Many demonstrated that the tightening up of processes allows defence lawyers to focus on the process and look for procedural defences, thus moving away from the actual anti-trust offence.
This could mean that the revisions will make enforcement less effects-based and more procedural. Rather than streamlining the process this could actually slow down defence of investigations allowing defence lawyers to effectively jam up the system with procedural arguments.
The revisions have been issued in anticipation of changes to the competition law institutions in the UK. When the major changes are implemented, the UK authorities should look at the jurisprudence of enforcement as a form of deterrence and analyse the motivation for anti-trust offences and focus more heavily on the system which not only punishes criminal behaviour but also rewards compliance.
Indications are that, whilst
compliance is unpopular with major corporations, it is the most effective deterrent for carrying out criminal breaches of competition law and anti-trust law. LM
contact details:
neil Warwick dickinson dees St ann's Wharf 112 Quayside newcastle Upon tyne nE1 3dX UK
Website: www.dickinson-dees.com