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United Kingdom Competition Appeals Tribunal
You are here: BAILII >> Databases >> United Kingdom Competition Appeals Tribunal >> NAPP Pharmaceutical Holdings Ltd v The Director General of Fair Trading [2001] CAT 2 (10 July 2001)
URL: http://www.bailii.org/uk/cases/CAT/2001/2.html
Cite as: [2001] CAT 2
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IN THE COMPETITION APPEALS TRIBUNAL Case No. 1001/1/1/01
New Court,
48 Carey Street,
London WC2
Tuesday, 10th July, 2001
Before:
SIR CHRISTOPHER BELLAMY QC
(The President)
-------------
B E T W E E N:
NAPP PHARMACEUTICAL HOLDINGS LIMITED
AND SUBSIDIARIES
(Applicant)
and
THE DIRECTOR GENERAL OF FAIR TRADING
(Respondent)
-------------
MR NICHOLAS GREEN QC (instructed by Messrs Herbert Smith) appeared for the Appellant.
MR PETER ROTH QC (instructed by the Director General of Fair Trading) appeared for the
Respondent.
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JUDGMENT
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Tuesday, 10th July, 2001
THE PRESIDENT: This is an application by the respondent Director for an extension of time for
serving his defence which is due tomorrow, 11th July, 2001. The extension sought is a short
one (two and a half days) until 1 o'clock on Monday, 16th July, next.
The application is not seriously opposed by the applicant, Napp, although Napp signals
strongly its fears that the basis advanced for the extension sought may, in due course, prejudice
Napp if it results in many new matters having to be canvassed in this appeal.
Leaving that last point aside for the moment, the application does raise a question of
principle about the tribunal-s attitude to requests for extension of time upon which it is useful
to take this opportunity to give some guidance.
Under Rule 2 of the Competition Appeal Tribunal Rules 2000 (-the Rules-) an
applicant to this tribunal has two months in which to challenge a decision taken by the Director
under Section 47 or Section 48 of the Act. Rule 6(3) provides that the time limit of two
months may not be extended unless the circumstances are exceptional. Rule 12(1) provides that
the Respondent Director must serve his defence within six weeks of receiving a copy of the
application or such further time as the tribunal may allow.
The Guide to Appeals under the Competition Act, 1998 (-the Guide-) published by the
Tribunal, and available on the website (www.Competition-Commission.org.uk) sets out five
main principles that the tribunal intends to follow in regulating its procedures.
The third principle, which is at paragraph 2.6 on page 2, reads as follows:
-Strict Timetables. The tribunal will indicate, as early as possible, a target
date by which the tribunal-s decision on the appeal is to be given, together
with the date for the main hearing. The main stages of the case, and the
internal planning of the tribunal's work, will be geared to meeting this
timetable. In general, the tribunal will aim to complete straightforward
cases in less than six months. This target will be reviewed in the light of
experience.-
A major means for ensuring that the timetable for the case is adhered to is the first case
conference which normally takes place within four weeks of the appeal being lodged. As
paragraph 7.5 of the Guide puts it, that first case management conference will normally take
place no later than four weeks after the appeal has been lodged. Indeed a major purpose of the
first case conference is to indicate the timetable for the case including notably the date for
service of the defence, if not already served, the timing of the main hearing and the target date
for the tribunal-s decision (see para.7.6(v) of the Guide).
Paragraph 8 of the Guide deals with service of the defence. Paragraph 8.2 provides:
-The form of the defence will vary with the nature of the case. In general the
Director-s position in fact and law will have already been set out in the
decision and the documents referred to therein, and there may be little need to
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elaborate on that position in the defence. If, for example, the application
consists largely of arguments already dealt with in the decision, it is sufficient
to make brief reference to the passages in the decision which deal with the
arguments advanced rather than rehearsing the contents of the decision all
over again.-
That paragraph explains the slight asymmetry between the time for lodging the
application (2 months) and the time for lodging the defence (6 weeks). In most, if not all,
cases the Director has already -set out his stall- in the challenged decision and should not in
general need a prolonged period to add to the reasons already given in the decision to justify
the action he has taken. It is not normally necessary for the Director to -rehash- in the defence
the decision that he has already taken, or to rebut anew arguments already rebutted in the
decision.
The Director may, of course, need to respond to new arguments or more developed
arguments, or new evidence put forward in the application for the first time. Whether or not
this is the case in the present matter cannot be determined in the context of this particular
application in advance of seeing the defence that the Director proposes to serve.
In the present case the decision under challenge was made against Napp on 30th
March, 2001. It is a fairly fully argued decision, and was followed on 4th May, 2001 by a
further directions- decision. The appeal is against both the decision of 30th March, 2001 and
the directions of 4th May, 2001.
In the meantime, an application for interim relief was made by Napp on 11th May and
disposed of by consent by the tribunal on 25th May. Napp-s appeal was lodged on 30th May,
2001 at the end of the two month period.
The first case conference was held in accordance with paragraph 7 of the Guide on
25th June, 2001. At that conference there was a discussion about service of the defence. The
Director did not then indicate any difficulty in meeting the date of 11th July, 2001, save as
regards the question of some further documents that the Director had requested of Napp. On
that point the tribunal made it abundantly clear at the case conference, that it expected the
defence to be served by 11th July, and that the question of the documents could be dealt with
later if necessary. That approach was reflected in the order that was made by the tribunal
following the conference of 11th July. A further case conference is fixed for 30th July, and the
hearing is fixed to commence on 24th September, 2001.
Yesterday (two days before the deadline for the defence) a letter was received from the
Director dated 9th July, 2001 requesting the short extension of two and a half days for service
of the defence that I indicated. The grounds set out in that letter are that Napp has raised a
large number of important issues; and that the Director-s staff has been working flat out but
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that despite their best endeavours they are unable to meet the deadline of 11th July, as had
previously been expected.
Reference is also made to additional evidence set out at items 105 to 112 in annexe 2,
to what must be a reference to the application, although it is referred to as the defence in this
letter of 9 July.
Today, before me the application has been renewed and Mr Roth QC, on behalf of the
Director, has explained that the scale of the exercise in preparing the defence was not fully
appreciated. In particular matters have been held up by the need to obtain final witness
statements from persons connected with Link and BIL, who are present or past competitors of
Napp, and also work on materials supplied by Napp in its appeal concerning the pricing of
certain comparative products. Mr Roth emphasises the difficulty of getting accurate
information, particularly on that latter point, and makes reference to a number of unforeseen
developments as recently as last week in making contact with the relevant witnesses.
As far as the applicant, Napp, is concerned, Napp takes the opportunity to signal to the
tribunal, as I have already mentioned, its concern that if the hold up is due to the Director-s
need to obtain evidence - or further evidence - the director may be raising new issues which
may in turn require time for Napp to reply to, and may give rise to prejudice to Napp, either in
the timescale of the appeal, or generally in having to meet a new case not properly made in the
decision.
In relation to the application itself for an extension of time for two and a half days,
Napp does not seriously object to that in itself provided that there could be appropriate
adjustments to the timescale to avoid any prejudice to Napp.
As regards those arguments, the question of whether the new evidence that the
Director wishes to adduce is relevant or admissible or helpful to the disposal of the appeal
must await the time when that evidence is available and the tribunal is in a position to evaluate
it. At present the tribunal is dealing only with the application for a short extension of two and
a half working days for filing the defence.
That extension of itself does not appear to prejudice Napp significantly, a least in a
way that cannot be dealt with by adjustment to the timetable for the case. But the point the
tribunal would wish to emphasise is that a delay in complying with a deadline fixed by the
rules, or following a case management conference, even a short delay, is potentially prejudicial
to the case management system set up by the rules, and explained in the Guide.
Unlike most kinds of litigation, proceedings before this tribunal run so far as possible
to a timetable which is fixed and known in advance. In order to meet that timetable, a
relatively complex internal planning mechanism is necessary which involves fixing sometime
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in advance dates for meetings with appeal panel members - who have other commitments as
well. It also involves allowing sufficient reading time, circulating often voluminous papers to
appeal panel members, allocating time for the tribunal support staff to work on the report for
the hearing, and so forth. All that has to be project managed in an efficient way.
Although at this stage in the tribunal-s development the two main extant appeals do not
pose insuperable organisational difficulties, as the workload builds up the matter is likely to
become much more complex especially when cases fall to be heard in the future outside
London. In these circumstances the tribunal feels it must start as it means to go on by insisting
that case management deadlines are strictly met. The time for raising problems regarding the
timing of the defence (if there are any) is at the first case management conference and not two
days before the defence is due.
If problems are flagged up at the case management conference, appropriate
arrangements can then be made for dealing with them, for example, by providing (as the
present order does) that the defence should be served by the due date, with leave to supplement
it later on various outstanding points that are taking longer to resolve than others.
The tribunal in this case does not doubt that the Director and his staff have, as it is put
in the letter of 9th July, been working -flat out-, nor, having itself some past experience in
matters of this kind, does the tribunal under estimate the task that finalising the defence may
involve. On the other hand, that same experience suggests that most deadlines can be met if an
efficient system of project management is in place, and there is full recognition of the
importance of keeping to deadlines in the new system, and of the discipline that that implies.
That is particularly important from the respondent's point of view where the Director, having
imposed a fine and adopted directions after a two year investigation, must be presumed to
know what his case is and should, in normal circumstances, be in a position to explain it to the
tribunal in his defence well within the six week period allowed by the Rules.
The tribunal is confident that this message will be taken into account by respondents in
the future when setting up arrangements necessary for dealing with appeals. What is
particularly necessary is an early exercise in identifying the points raised in the application that
will require more time to deal with so that the tribunal itself is fully apprised in due time of any
difficulties that may arise.
If various other persons have to be consulted internally in the OFT that should be
organised in good time to enable that to happen efficiently; and if there are difficulties, the
tribunal is always available to have those signalled to it, provided it is done in a timely way.
Now, as regards the present application, the tribunal would accept that to some extent
all parties in these proceedings are still on a learning curve and for that reason the tribunal is
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inclined on this occasion to grant the short extension requested. The tribunal also bears in
mind the difficulties referred to by Mr Roth in that regard.
That said, it has to be emphasised that the tribunal-s grant of the extension on this
particular occasion is in the circumstances of this particular case, and the tribunal expresses the
hope that it will not need to be troubled by such further applications in the future. Since the
rules lay down very strict limits for applicants who have to lodge their appeals within two
months with little or no possibility of extension, it would seem only fair that the tribunal
should in general take a similarly strict line with the Director, notwithstanding the slightly
shorter period that the Director has for serving his defence which exists, of course, for the
reasons I have already explained.
The tribunal will therefore extend the time until 1 o'clock on Monday next, 16th July,
2001 in the hope that this kind of application will not be necessary in the future.
MR GREEN: I do not think there is anything else. We would reserve our position on costs, I think,
until the end of the hearing in so far as it is relevant.
THE PRESIDENT: Are you making an application for costs, Mr Green?
MR GREEN: Well, we will make an application for costs, if it is appropriate to make it now then I
make it now. You may think it is something which should be wrapped up at the end, but if it is
appropriate to make it now we would ask for it. It would normally follow the event in the
courts, that if an application for a boon from the court ---
THE PRESIDENT: I am sorry?
MR GREEN: An application for a boon, a period of grace from the court is asked for and granted,
that the trouble for the other side coming forward is usually compensated for by costs in the
ordinary event. It is deemed to be an unnecessary outing for the other side, so we would ask for
our costs of this afternoon.
THE PRESIDENT: I think the right order is to reserve the costs of this afternoon until a later stage
in the case. You are fully at liberty to reapply at an appropriate time.
Very well, thank you very much.
(The hearing concluded at 2.40 pm)
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