EU From the City -The Application of s.58 of the Competition Act 1998

It has been a long time since I left Luxembourg and the EC. In that time I have moved to Guernsey and worked on the investigation of a major insurance firm by Guernsey’s market regulator (the GFSC), I have moved to Indonesia and qualified as a Dive Master (http://www.trawangandive.com), I have moved to London, started my training contract, completed a beasting in Finance for my first seat and moved back into EU law for my second seat and been asked to move back to Luxembourg for my third seat (in International Funds this time). So now that the loop has come nearly full circle, I feel that I really should stick to at least one new year’s resolution and start re-contributing to this blog…. 

Let’s (re)start in a briefer, more practical tone then we left off. To what extent can parties in a follow on claim for damages utilise the regulator’s finding of fact? 

The first case which considered the application of s58 of the Competition Act 1998 (the “Act”) culminated with the Court of Appeal’s decision in the Enron Coal Services Ltd (In Liquidation) v English Welsh & Scottish Railway Ltd [2011] case in January 2011.  This case has been cited and followed in six subsequent cases, including most recently the Cardiff Bus decision.  Journal articles focusing on s58 have however focused on Enron, as despite the fact that Cardiff Bus thoroughly engaged with and confirmed Enron’s findings, Cardif is focused on for its granting “exemplary damages” in follow-on cases (whose award in Cardiff Bus was a first for English law).

The case law and commentary on s58 of the Act and Enron consistently agree on the following;

(i) that references to “court” in s58 should be read to include the CAT, when acting as a court with Pt I proceedings before it;

(ii) findings of fact are binding if “to challenge them would be tantamount to challenging the finding of infringement” Findings of fact my include those findings; 

(iii) this does not apply to findings that are “peripheral or incidental.” Rather, the Court held that the party seeking to rely on a statement in a regulator’s decision must demonstrate that the regulator has made “a clearly identifiable” finding of fact to a given effect, and that “it is not enough to be able to point to passages in the decision from which a finding of fact might arguably be inferred”;

(iv) as a finding of infringement does not require proof that loss has been caused to another undertaking, the fact that an infringement has been established does not demonstrate that such loss has taken place; and

(v) causation and loss need to be assessed in a follow-on action applying the same standard of proof as in any other civil claim for damages.

That is, the CAT is bound by a finding of OPR/a Regulator as to findings of fact, unless the regulator has directed otherwise. When findings are not directly relevant to the finding of infringement, s.58 gives them binding effect, subject to the power of the court or CAT to disapply that effect. Should such a direction be made, it is open to the parties to prove the fact by evidence in court in the ordinary way.

NOTE: Some commentators have noted that the decision in Enron is anomalous in that it appears to entrust the CAT to decide whether an infringement had been committed when a case is appealed from a regulator, but simultaneously restricts the CAT from making such an assessment when it comes to a claim for damages. As such it has been suggested that the case may prompt further discussions as to whether the inter-relationship between the jurisdiction of the court and that of the CAT in relation to damages may merit reassessment. Nonetheless, the six cases subsequent to Enron have declined to address this issue further, and as such it is probably a moot point of little practical concern to most cases.

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Quick European SoundBites

The 1st of May in Spain is “Work Day” -obviously this is also a public holiday…

A Greek friend thought that the snowy streets of the UK were stalked by a strange animal after she saw tracks of small holes punctured in the snow. It turns out the “strange animal” = UK girls refusing to let a little snow and ice stop them from wearing tiny, opened toed highheals.

In Luxembourg a packet of 4 slices of medium quality ham costs €15
In Luxembourg a second hand M series BMW costs €700
=In Luxembourg you have the choice, 186 packets of ham or a BMW….

On the weekend following Carnival Luxembourg burns allot of large bonfires and crosses -this is scary, but to be fair, thankfully few people wear sheets
In Lithuania they Burn a large bonfire shaped like a witch… -this coincides with a ritual fight between a fat man and a thin man.
=all of this is to burn away/represent the transition of winter to spring

The Foyee Europe (language school in Luxembourg) is the cheapest place to buy beer in the country

I slept in a Buddhist monastery in Brussels on Friday…

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You’re So Welcome!

Lao-tzu told us that the longest journey starts with the first step. Terry Pratchett reminds us that the problem is that most people forget to take the second step and the trillion other steps that follow. So I suppose that to be a “real blogger” I have to get over my apathy and take a second step i.e write some more posts. Unfortunately apathy has won the fight up to this point, and so I have now got too many anecdotes/observations/curious facts/contextual facts/points of advice to cram into one post… and this post is going to contain very few of the entertaining bits!

The first week of “working” for the EC involved a Welcome Meeting held at the JMO building here in Luxembourg. This generally consisted of 50 people introducing themselves to the group, 50 people forgetting the names of 49 other people, 50 people getting bored, 50 people getting a security card, 50 people getting a bank account and 50 people getting more bored. This was a really bad start to an internship. In fact there was a general feeling that perhaps those ultra-nationalist, embittered eurosceptics that write for Mr Murdoch may actually had a point about wasteful EU inefficiencies. It is also worth noting that EC buildings in Luxembourg are not pleasant -Think cheap 1970s made large school buildings, i.e. lots of dirty looking linoleum interspersed with cheap aluminium and concrete. Apparently Brussels is where the life lies!

So bright and early on Wednesday morning we headed to Brussels where we would meet 600 other stagiairs and be properly welcomed to the traineeship programme.

-Now I should make a point: The first draft of this post turned out to be huge. So I propose that this post will include points about the EU that I learnt during the conference. So this will be boring, but informative. Everything else, including the champagne, 2000+ beers, crazy contract law, the Spanish and my new nickname etc, will appear in the next post. So turn off now if you do not want to learn about the EU, if you do continue read I assume that you will turn off in the near future 😉

The conference essentially consisted of presentations from the major EU institutions, such as the Commission, Parliament, Council, careers service, environmental director general and the Hungarian presidency. This meant a broad spectrum of interest; some presentations were catatonic, some lacked style but contained useful info, some being exhilarating.

3 major issues/changes arose about the direction of the EC in the medium term future. 1) Economic Regulation –following the “orgy of state debt” and unregulated market expansion it appears as though the reality of integrated EU economic governance is will shortly come into existence. Philip Brunei [ ] was keen to stress that Germany was not about to leave the EU and that the “EU project was not an option or even a choice amongst alternative, it was a necessity.”

2) The Arabic revolutions signalled the point that the time of real-politick justifications has passed. The EU’s position is that the revolutions are fighting for ideals that also form the core of EU political philosophy and so the EU will actively support them.

3) A huge change was about to happen to the EU budget. Specifically, the mechanism for budget allocation within the EU institutions was to change. Whilst technical details were not explained in great detail, it appears as though the era of EU budget expansion has come to an end. As I understand it each DG (=”Directorate General” =working department within the Commission) will be required to apply for a now limited budget through a more objective, transparent and ultimately competitive application process.

Other salient points to note:

The Council “provide the Union with the necessary impetus for the development and definition of the EU’s political direction and priorities there of.” The role and identity of Council is evolving and developing. There appears to be a real tension between the different EU institutions, in particular, who has responsibility for the creation and determination of legislation. –watch this space

EU bureaucracy is actually surprisingly efficient, and getting more so! In terms of its legislative capacity the key indicator of efficiency appears to be the percentage of legislation that is passed on first hearing. In 1999 this stood at 21% in 2009 it was 71%. The cost per person represented of the European Council is, apparently, a fraction of your average town council.

The “EU is the subject of one of the most widespread miscommunication of any political institution in the world.” –This is perhaps not surprising when one considers that the presentation given by the EU Spokesperson Service was by far the worst presentation given during the conference! =the EU is a victim of often malicious national press, but it should also really consider hiring a new PR team.

An EU country is not a full member until after its first presidency.

There is a real problem with EU careers. The process to become a stagiaire, is competitive, fair, open and well explained. Going from being a stagiaire to being a full member of staff is erratic, mainly based on luck and generally not possible. When I say “luck” I do not mean in the sense that bad people are hired, everybody hired is incredibly talented. Rather I mean “luck” in the sense that there is no systematic that ensure that the most talented stagiaires are actually given a job. This is mainly because there is an extremely low turn over of staff at the EU + as a civil service the EU has limited capacity to expand =a lot of frustrated stagiaires and a lot of missed talent.

Alex Albaue is an EU parliamentarian and vice-president of the Budget Committee. He is a politician. I have rarely seen someone squeeze so many words into so few ideas.

The EU’s environmental policy and plan to actually implement ideas that may actually save the world is exceptional. I was genuinely very impressed by a great combination of scientific and economic analysis and understanding, innovative ideas, commitment and capacity to actually do something. It looks like the EU may well drag the world into the future of resource management. This should be more widely recognised and appreciated.

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The How To, Top 10 and Sex of Luxembourg!!

Well perhaps not quite, and perhaps a bit of false advertising is not the most conspicuous start to a blog ostensibly about law. However, Marshmallow Sensai, i.e my guide to this new and curious world of “blogging,” tells me that using these words is the only way to generate significant numbers of readers and well needs must… 😉

Oscar Wilde tells us that in science one tries to tell people, in such a way as to be understood by everyone, something that no one ever knew before. But that the objective of poetry, it’s the exact opposite. Wilde went on to lament that it was a very sad thing that nowadays there is so little useless information. When setting out the stall of this blog I think I will dabble in all three corners of Wilde’s quote. I.e. I would genuinely like to explain and discuss practical and technical details of the Law and Legal Industry that I encounter during my time in Luxembourg, the City of London and wherever else it raises its ugly head. But this is also a travel blog of sorts, and I would like draw out and bring to life some the latent mystery, entertaining frivolity and enjoyable exoticism of the places I visit this year.

So, in order to avoid the charges of fraud that may stem from a blog that fails to live up to its title, let’s talk about the How To, Top Ten and Sex of Luxembourg.

How To: not be put off by Luxembourg within 48hours of arrival -Get a cool Bulgarian friend to get you invited to A Small World networking event. Marcus and Adil put on such a party at the Place d’Armes Hotel the day after I arrived. Frankly meeting such a brilliant group of interesting eccentrics and long term residents did much to bring this odd city quirkily to life. Luxembourg is strange and odd and ostensibly boring, but it becomes strangely appealing when you are told that; “This place is alive with interesting things, but unlike London, these things are not offered on a plate so one has to dig for them!” , “If the evening arrives and you start feeling comfortable that you know all there is to do in Luxembourg that night, start feeling paranoid as more interesting people are probably having more fun than you somewhere!”

My second tip is to arrive wearing orange sunglasses. The weather so far has been a uniform overcast grey. I’m sure bright sunglasses would go along way to making you better about life.

Top Ten Bars of Luxembourg: should include The Tube, The Liquid Cafe and possibly Le Palaise -I will put together a real hierarchy once I’ve been to more than ten bars in Luxembourg!

Sex in Luxembourg: well I’m sorry to say that there has not been any yet. But I have been told about some very interesting parties that happen in a castle….

A’ la prochaine!

LegalBrock

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