Search warrants in the Competition Appeal Tribunal

22/04/24

The Divisional Court (Sir Julian Flaux C and Butcher J) has today handed down a judgment on the jurisdiction of the Competition Appeal Tribunal (“CAT”) to grant warrants to search business and domestic premises under ss.28-28A of the Competition Act 1998 (“CA 1998”).

In allowing a claim by the Competition and Markets Authority (“CMA”) for judicial review, the Divisional Court held that the CAT had erred in law as to one of the threshold conditions for granting a warrant to search domestic premises, namely that there must be reasonable grounds to suspect that there are documents which, if the CMA required to be produced by notice, would not be produced, but would instead be concealed, removed, tampered with or destroyed. The CAT had held that this condition could never be satisfied by inference from the suspected existence of a secret cartel, despite holding that the identically-worded condition in s.28(1)(b)(ii) for business premises could be satisfied by such an inference: [2023] CAT 62 (“the Warrants Judgment”). That was an error of law: the condition in s.28A(1)(b)(ii) could, depending on the facts, be satisfied by inference from suspicion of a secret cartel.

The Divisional Court decided to grant the CMA relief, despite its claim being academic (as the CMA no longer sought the warrant in question). One reason for granting relief was because the CAT had subsequently stated that the Warrants Judgment and an earlier judgment of Marcus Smith J in CMA v Various Unnamed Defendants [2019] EWHC 662 (Ch) were “guideline judgments” that could be cited before any Court: [2023] CAT 68. The Divisional Court held both judgments contained errors of law and should not be treated as “guideline judgments”. It further held the CAT had exceeded its powers by attempting “to dictate the status of those judgments in any Court or Tribunal other than the CAT itself”.

The Divisional Court also declared that the CAT had exceeded its powers in making an order of its own motion after the warrants to search business premises had been executed by the CMA. This order would have required the CMA to disclose the material on which it relied in seeking the warrants to the occupiers of the premises concerned, with the exception of material subject to public interest immunity. The Divisional Court held that in the absence of an application for disclosure or an intimated challenge to the warrants, the Tribunal had no power to make the order. The CAT’s decision reflected “essentially the same approach” as that adopted by Marcus Smith J in CMA v Concordia International at first instance, which had been disapproved by the Court of Appeal: [2019] 1 All ER 699. Although the order had been rescinded by the CAT after the judicial review was issued, it was important to grant declaratory relief as it appeared the CAT might be under a misapprehension as to the scope of its powers.

The Court also found the CMA had appropriately issued the claim in England and Wales, despite the CAT having stated that it appeared “incontrovertible” that the claim should have been brought in the Court of Session in Scotland where certain of the premises concerned were situated.

The judgment of the Divisional Court [2024] EWHC 904 (Admin) is available here.