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Notes From a Small Island: Natural Justice and the Institutional Design and Practice of Competition Authorities and Appellate Courts

By  |  September 10, 2014

Tim Johnston, Robert O’Donoghue, Sep 11, 2014

The relationship between the institutional design, decision-making powers, and policy-making functions of competition authorities raises a diverse range of complex issues. These include how the authority’s independence can be safeguarded, how it is funded, how to optimize resources, how to avoid confirmation bias, how to relate with non-competition authorities (e.g., sectoral regulators with concurrent powers or overlapping jurisdiction), and the relationship with the judiciary. This article starts from the optimistic — not to mention extremely presumptuous — position of trying to use the concepts of natural justice and procedural fairness as developed in the United Kingdom as something of a template for good practice and institutional design in competition law decision-making and appeals generally. Apart from familiarity (from the authors’ perspective), there are some good reasons to do so. First, outside the realms of antiquity, the United Kingdom can lay a fair claim to popularizing the notion of a rule of law. Second, the United Kingdom is one of the oldest and most prominent adopters of a system of adversarial justice where the ability to challenge evidence remains paramount. Third, the common law is characterized as much by pragmatism as strict principle.

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    The common law has developed an adaptable, rather than rules-based, approach to natural justice. As a result we consider that it is a useful resource when considering institutional design and operation of competition authorities. The law develops in real time, and not from the basis of an historic code. Fourth, in respect of competition law specifically, a fairly rich body of case law has developed in the United Kingdom around principles of natural justice, procedural fairness, and the use of evidence. That case law certainly appears richer than the corresponding case law of the EU Courts in Luxembourg. Finally, the United Kingdom has itself undergone major institutional reform of its various competition authorities, most notably by the creation of the Competition and Markets Authority, effective from April 1, 2014. This significant exercise prompted a period of introspection as to whether, for example, the practices applied by the competition authorities for the previous decades could be improved or adapted. The resulting guidance and related documents that emerged might therefore fairly be considered to be the state of the art in these matters.