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Your partners are not your employees: Supreme Court of Canada clarifies the application of the control/dependency test
27 May 2014
At the moment, I'm firmly of the school which says, 'This is all too difficult, we'd better give up'," So said Mr Justice Ferris after hearing econometric evidence in the Reference to the Restrictive Practices Court of the rules for the sale of rights to televise Premier League football. His words were a recognition that the technicality of particular sorts of evidence or argument means that more than just decent submissions may be needed for a court to be able to adjudicate on certain issues.
As a result, specialist courts have been established to hear disputes across various fields of law. They can be of great benefit for all those concerned with the proceedings. Judges who are wise in the ways of a particular field, whether it be family law, employment or intellectual property, can deal with cases more effectively and efficiently than generalist colleagues. Rather than having to learn about the principles and legislation of a whole new area, they can focus immediately upon the particular problem before them. And they are often far better able to evaluate the evidence that is presented to them.
So when the Government came to reform the system of competition law in the UK in 1998, it created the Competition Commission Appeals Tribunal (CCAT). Headed by Sir Christopher Bellamy, fresh from his time dealing with competition matters at the European Court of First Instance in Luxembourg, this body acts as a court of appeal from the decisions of the Director General of Fair Trading (and utilities regulators) enforcing the Competition Act prohibitions.
And now further reforms are before Parliament in the shape of the Enterprise Bill. They are the next step in developing the rules which regulate competition in UK markets. Among other matters, the CCAT is to be renamed the Competition Appeals Tribunal (CAT) and its jurisdiction extended.
The bill recognises that just as it is monetary incentives that drive markets, so it is hard cash that will drive people to bring private actions to enforce competition law. But fines imposed on cartel members mean little to those down the chain who have been suffering due to the collusion. The preferred order of those who lose out will be a large portion of damages, to go.
In many cases, damages claims will be brought after the regulatory authorities have done their work: investigated and fined an offender. The bill sees such cases being dealt with by the specialists at the CAT. But parties may just want to go straight for the jugular and apply to court for damages rather than relying upon the regulators to do the work. Unfortunately, if you want to be so bold then you are going to have to go to the High Court. In what Sir Jeremy Lever QC describes as a "grave disappointment", the present version of the bill fails to get these cases before the specialists.
In other words, if the Office of Fair Trading has carried out an investigation and you bring a damages claim on the back of its findings, you can use the specialist jurisdiction. But if you are starting a private action from scratch, or someone is starting against you, then you do not get the benefit of coming before the tribunal with specialist knowledge of the field.
So for all the talk about how private actions can assist in the policing of UK markets and raise competitiveness, the proposals mean that the potential private prosecutors cannot rely on the custom-made court. Equally, meretricious claims might more easily bamboozle the uninitiated judiciary, where the more experienced would quickly see the flaws. Where complex issues arise as to whether competition is distorted, an agreement should be exempted or a dominant position abused, it will be a high court judge who may have little knowledge of competition law, let alone economics, who will have to grapple with the questions. And for those judges the words of Judge Ferris will, no doubt, resonate.
As the bill is still making its way through Parliament, there is a hope that this unfortunate gap can be filled by way of an amendment, which will be supported by the Bar and Law Society Competition Joint Working Party. Otherwise the old and generally erroneous cliché that going to court can be a lottery, could sadly be reinforced.
Daniel Beard is co-editor of the Competition Law Journal