A second and third paper contain a discussion between two scholars – Rennato Nazzini and Despoina Mantzari – on whether an appellant should be able to introduce fresh evidence during a judicial review before a court.
The discussion concerns a decision by the UK’s Competition Appeal Tribunal (CAT) in Ping Europe Ltd v Competition and Markets Authority (CMA) – the CAT’s first decision on the admission of new evidence in appeal proceedings on the basis of rule 21(2) of the CAT Rules 2015. This was a ruling on an application by the CMA to exclude certain evidence adduced by Ping that, in the CMA’s view, Ping could and should have adduced during the administrative proceedings.
The facts were as follow.
The CMA claimed that Ping had infringed the Chapter I prohibition and Article 101 TFEU by prohibiting online sales of its golf equipment. In response to the statement of objections (SO), Ping argued, among other things, that its prohibition on online sales was objectively justified on the basis that it was the only way of ensuring that customers would benefit from Ping’s customized equipment fitting – i.e. that its system was a selective distribution system and that the ban was justified as a result.
At the CMA hearing, Ping was asked about possible alternatives to an outright ban on Internet sales to achieve the benefits of personalized custom fitting. Ping did not provide any details of potential alternatives, beyond alleging that there was none. There ensued correspondence between the CMA and Ping on the matter, in which the CMA put to Ping its case on alternative measures. Ping did not reply on this point, and the CMA eventually adopted an infringement decision, concluding that, while the promotion of custom fitting was a ‘genuine commercial aim’, Ping could have achieved this through less restrictive alternative means.
In its appeal to the CAT, Ping adduced evidence on alternative measures. The CMA applied for such evidence to be excluded, mainly on the ground that Ping could and should have adduced the evidence in question during the administrative phase.
The judgment of the CAT is, in essence, that, while the CMA should generally be prepared to defend the decision on the basis of the material before it when it took the decision, the appellant is, in principle, free to submit fresh evidence, subject to the CAT’s discretion to exclude it and without prejudice to the parties’ liability for cost. This conclusion was reached even though the CAT concluded that Ping had no valid justification for not responding to the CMA’s case on alternative measures during the administrative stage.
The papers can be found in (2018) Journal of Antitrust Enforcement 6(2) 281–293, and here. I will not describe the procedural specificities of English law, but will stick to the discussion regarding the appropriateness of allowing a party to submit fresh evidence in the context of judicial review.
Rennato Nazzini argues, in ‘Fresh evidence on appeal in two-tier administrative enforcement systems’, that the CAT’s approach is correct.
He begins by describing the relevant rule of evidence, which grants discretion to the CAT to determine whether to admit evidence in cases before it. Since the CAT needs to determine the appeal on the merits, it could be argued that it should admit Ping’s evidence in order to fulfil its function to an adequate standard of review. Furthermore, the prejudice that Ping would suffer if the evidence were excluded far outweighed the prejudice to the CMA if the evidence were admitted. In any event, the CMA had already adduced evidence to rebut Ping’s case if the evidence were admitted, which meant that the CMA would be able to respond to the fresh evidence, and hence would not suffer significant prejudice.
However, the relevant rule also sets out some criteria that argue against the admission of fresh evidence during the review stage. This would be the case if: (i) some of the evidence already existed at the time of the administrative procedure and was available to Ping, which had no valid justification for not having submitted it; (ii) the CMA was not aware of the evidence and could not have reasonably have obtained it.
Ultimately, the author argues that, in this case, matters of substance – i.e. whether the evidence is necessary for the appellant to present its case and to the Tribunal to determine the appeal—i.e. prevailed over issues of procedural efficiency – whether evidence could and should have been adduced in CMA proceedings. The question is whether this is an adequate approach.
The author considers that to understand the applicable rule of evidence (CAT Rules 2015), it is important to remember that the overriding objective of English civil procedure rules requires a court to deal with cases justly and at proportionate cost. In pursuing such objectives, the tribunal must consider such matters as ensuring that the parties are on an equal footing; saving expenses; proportionality; expeditiousness; and fairness. This could have swayed courts towards an approach to admitting fresh evidence more akin to that under the CAT Rules 2015. However, admission of new evidence on appeal is the exception, not the rule. The courts have given effect to this policy in a robust way. Whether such an approach would have been desirable in competition appeals against decisions of the CMA or the sector regulators is a matter which was considered when the 2015 CAT Rules were drafted. The Government ultimately took the decision to adopt a more flexible approach because the restriction on adducing fresh evidence on appeal in civil procedures is clearly premised on the party seeking to adduce fresh evidence having had a full opportunity to litigate his case in a court of law.
In other words, the decision to admit evidence is correct because:
(i) the CMA’s investigative procedure, notwithstanding the significant progress made towards ensuring a certain degree of respect for the rights of defence and internal separation between the decision-maker and the prosecutor, are and remain proceedings before an administrative authority and not a court or tribunal;
(ii) the first opportunity for a party to a CMA investigation to have access to a court of full jurisdiction complying with Article 6 of the European Human Rights Convention is on an appeal to the CAT, which means that fresh evidence should be allowed as a rule.
The CAT can then ensure that the parties are truly on an equal footing by giving the CMA an adequate opportunity to respond to any fresh evidence admitted on appeal, while penalizing in costs an appellant who could, with reasonable diligence, have adduced evidence in CMA proceedings but chose not to do so without a valid justification.
This is broadly in line with the situation at EU level. The Commission must defend the decision on the basis of the arguments and evidence on which the decision relies, and it will only exceptionally be allowed to adduce new evidence. The applicant, on the other hand, can raise new arguments and adduce new evidence as long as such arguments and evidence are relevant to establishing the grounds of challenge as pleaded.
Despoina Mantzari argues, in ‘Navigating the admission of evidence on appeal’, that is not for the CAT to usurp the role of the CMA as the primary factfinder.
In particular, she argues that this decision: ‘risks transforming the very nature and structure of the UK competition law regime from an administrative enforcement model to a quasi-prosecutorial one. The ruling may also incentivize other undertakings to refuse to provide evidence to the CMA during the course of the investigation undermining the original legislative purpose behind the revision of the rule, that of the need to avoid any gaming of the system as well as unnecessary costs and delay.’
The paper begins by reviewing the facts of the case, before trying to place the relevant evidence rules in context. In the UK, the CMA is the primary fact-finder and the decision-maker. A right of appeal to the Tribunal then lies on the merits, that is, on defined grounds following a full investigation of facts. In competition law appeals, the CAT is in practice a court of first instance.
One of the reasons for the drafting of the relevant rule of evidence was a concern that litigants may deliberately withhold evidence during the investigative phase, only to produce it at the appeal phase. This is spelt out clearly in Rule 21(2)(c), which identifies among the criteria for deciding whether evidence should be admitted: ‘the question of whether the evidence was available and the reasons why it wasn’t made available’.
Of course, this is but one of the criteria enumerated in the rule; but it is a criterion that seeks to safeguard the very nature of the UK competition law enforcement regime, which is administrative and not prosecutorial in nature. It also means that the appeal against the authority’s decision is meant to be on specified grounds and not a primary inquiry into the facts, which could have been addressed as part of the investigation.
The author considers that the CAT engaged in a literal interpretation of the rules, and refused to seriously engage with the broader aims and objectives the Rule seeks to serve. These aims and objectives do not merely seek to discourage tactical behaviour on the part of the undertakings, but also, and perhaps most crucially, to safeguard the inherent feature of the UK administrative enforcement regime that requires all matters relevant to the CMA’s decisions to be addressed during the administrative phase to the extent possible.
In particular, the decision and its reasoning seem to derive and rely on the somewhat ‘first-order’ finding that, in competition law appeals and in light of the criminal nature of infringement decisions for the purpose of Article 6 ECHR, there is a presumption in favour of admitting new evidence. However, the statutory provision under which the appeal is brought, and the applicable standard of review being applied by the Tribunal, are a relative, but not a determinative consideration. Of course, the criminal nature of the infringement decision is crucial, but this does not confer in itself ‘a right’ to the undertaking to introduce new evidence, as the Court of Appeal has stressed in the past.
The appeal process for competition decisions is not part a prosecutorial system where both sides are approaching the evidence on the same basis. Instead, it is an appeal system, within an administrative model of enforcement, which provides the CMA with a host of powers that cannot be relied upon equally effectively at the appeal stage.
Context is also significant, insofar as the CAT’s ruling allows an undertaking to adduce new evidence in appeal that relates to the objective justification. This is a matter in which the undertaking carries the evidential burden even during the investigation stage. This may open the Pandora’s Box in future CMA investigations by encouraging other undertakings to refuse to provide evidence during the course of the investigation undermining the very rationale of the rule: that of the need to avoid any gaming of the system. Furthermore, the expansive interpretation of Rule 21(2) engaged by the CAT may render the Tribunal a de facto primary fact-finder against the legislative will.
I do not think I can add to the authors’ discussion. I would merely like to say that I really like this article format, where scholars advance opposing views in a clear and structured way. I hope other journals adopt it.