Tuesday, 4 June 2013

Delay in competition cases

It is well known in the competition law community that the General Court of the EU has a significant backlog of cases and that it takes around four years on average for it to hear a competition case. The next question that follows from this is, at what point do such drawn out proceedings constitute undue delay which would breach the requirements of Article 6 ECHR and Article 47 of the Charter of Fundamental Rights? The issue has recently been tackled again by Advocate General Sharpston in her opinion on the appeals in the industrial bags cartel case (Case C-58/12 P Groupe Gascogne SA v Commission, 30 May 2013). The bare facts of the case are that the Commission took its prohibition decision at the end of November 2005. Gascogne lodged its appeal in February 2006 and the written procedure ended in July 2007. In September 2010, the Registry told Gascogne that the case had been allocated to the Fourth Chamber of the GC and the case was heard in February 2011 and judgment was delivered in November 2011. Critically, there seems to have been a period of three years when nothing happened. Gascogne argued that the length of the proceedings was excessive and that the judgment of the GC should be quashed or the fine should be reduced as a consequence of the financial burden imposed on it by the excessive duration of the proceedings.

The first question, therefore, was how to determine whether or not the period was excessive? The starting point was the criteria set down in Case C185/95 P Baustahlgewebe v Commission [1998] ECR I8417 which are: importance of the case to the applicant, the complexity of the case, the applicant's conduct and the conduct of the competent authorities. Rather than focusing on the overall length of time taken, AG Sharpston took the view that she should look at what the GC does, the constraints under which it functions and what periods should be subjected to greater scrutiny. Importantly, she decided that the period from the submission of the application to the end of the written stage of the proceedings should be disregarded because of the problems of translating documents into the working language of the court. Some months should also be added for obtaining a translation of the last pleadings and any time spend by the court in active case management should be ignored. Difficulties caused by case overload, no matter how real, should be ignored. As a general approach she thought that "once more than two years have elapsed since the end of the written procedure, with no active case management and no convocation of the parties to a hearing, I would be minded to regard the delay as excessive and would require persuading otherwise." This is, however, in the context of her having said that there are no magic figures and that matters do have to be decided on a case by case basis. Looking at this particular case, she thought that it had taken about eighteen months too long, largely because of the three year period when nothing seemed to have happened.

If this was the case, then what was the remedy? In some previous cases, for example, Baustahlgewebe, the European courts have taken the view that there should be a reduction of the fine, largely on pragmatic grounds and praying in aid the unlimited jurisdiction to review fines contained in Regulation 1/2003. Advocate General Sharpston was uneasy with this approach, both on conceptual and legal grounds, and proposed an alternative. She recommended taking the approach followed in Case C385/07 Der GrĂ¼ne Punkt [2009] ECR I6155 that a separate action for damages should be lodged before the GC which would examine whether the claimant has suffered injury or loss, whether there is a causal link between the injury and the failure to adjudicate within a reasonable time and to quantify any damage. In her mind, there were two obvious objections to such an approach. First, the extra amount of time such a process would take and, secondly, the fact that the GC would be the party against who the breach was alleged while at the same time deciding upon it. She dismissed the first object easily, simply saying that she was sure that the GC would hear such a case "expeditiously". In response to the second objection, she thought there were five reasons to think that the GC would be sufficiently impartial. First, it was not responsible for paying any monetary penalty, secondly, the damages claim would have to be heard by a different chamber from the one that heard the substantive case, thirdly, the decision that there had been undue delay would have been that of the CJEU, not the GC, which would simply be quantifying the damage, fourthly the Commission would be responsible for defending the EU interest before the GC and, finally, there was always the possibility of appealing the GC decision.

There are a number of aspects to this opinion. There is a clear view that a number of the problems faced by the GC stem from the lack of action by the Member States. An approach which effectively disregards the time spent on the written procedure does seem very generous to the GC. The idea that nothing substantive can be done with the case while the written process is continuing is disturbing. As regards the choice of remedy, which she identifies as a choice between two imperfect options, one obvious response is that the cure makes disease worse. If part of the problem is judicial overload, providing another means of access to the GC, no matter how small the line of cases, is simply going to exacerbate the issue. It would certainly be neater if a way could be found for the damages claim to be assessed by the CJEU, rather than requiring a new process to be started. Furthermore, the arguments about impartiality are not that convincing. To use a less elevated literary reference than AG Sharpston, she seems to be expecting the GC to behave like Dobby the house elf in Harry Potter, who punished himself for disobeying his masters.