Mark Simpson: Richard, I’m interested in your thoughts on the implications of Brexit for the competition law regime in the UK. It seems to me that, because the Great Repeal Bill will effectively grandfather EU law, that there is unlikely to be much change to the substantive laws, at least in the short term. But, it does appear that if there is a so-called hard Brexit, that there would be some pretty fundamental changes in terms of the jurisdiction of the CMA, the UK Competition Authority, and its case load.
Richard Whish: Clearly, the day after full Brexit, the Competition Act is still in force anyway and Chapter I and Chapter II Prohibitions track Articles 101 and 102, so all that machinery is in place. However, there will be a lot of technical stuff that needs to be thought through. For example, parallel exemption under the Competition Act which relates to EU block exemption so there are technical things that have to be dealt with, but there will be a basic competition law in place. But in terms of what the CMA has to do, it obviously has enormous consequences. They will be much busier and I think that that’s an issue that needs to be addressed now.
Mark Simpson: So, we are likely to see more investigations that would seem because there will be possibly investigations going on in Brussels and investigations going on in the CMA in London as well. Mergers, possibly may have to be notified under both regimes, I mean, that’s going to have a serious implication in terms of resourcing.
Richard Whish: Well, let’s take them in reverse order: mergers. The first thing that occurred to me is that it would be sensible to sit down and look at the EU merger filings last year and try to hazard a conclusion as to how many of those would have been notifiable under UK merger control. And I heard the other day, that probably something in the region of 50 to 75 of those cases would have had to be filed, and of course, by definition, these involved big undertakings because of the way the thresholds were. So, that seems to me to be an enormous thing for the CMA to have to tool up for. Then, if you think of cartels, I’ve spent quite a lot of time thinking about it in the last couple of weeks, over the years a very large number of UK plc’s have been fined for being in cartels that the Commission looked at, I won’t name names, but I’ll name cartels: zinc phosphate, LIBOR, haberdashery, car glass, many cases. In the future, one assumes that these would be dual investigated and that the DG Comp would look at the EU bit of it and the CMA would look at the UK bit of it. Well, again, resources and if resources are going to be needed it seems to me that today, in October 2016, the government needs to be promising the funding to the CMA to start looking for people that will be in place on, you know, what shall we say, 1 April 2019 might be an appropriate date, because you need to have the people in place with the skills, the training, the knowledge and so on.
Mark Simpson: Assuming they are still going to have limited resources, they are not going to have a blank cheque, and they will probably face some difficulties in recruiting enough bodies in to begin with. Do you think there’s going to be a realignment in priorities in terms of the focus that we have seen in recent years on some very big market investigations, perhaps less focus on cartel investigations on infringements? And you know, the bread and butter of the merger filings which we are expecting to see increasing, I mean do you see a change in balances being likely in terms of prioritisation?
Richard Whish: Well, I mean, I’m not privy to the current thoughts of the CMA on all of this but I know they are thinking it through very carefully and seriously. They have prioritisation criteria, it seems to me to be inconceivable that Brexit wouldn’t have an effect on what is a priority matter. There is an irony, they’ve just started enforcing fairly consistently against SME’s, there being five infringement decisions this year, and frankly, I think it’s a good thing that they are enforcing against SME’s because it is a way of raising awareness. But of course, post Brexit the ‘big cartels’, which are currently investigated in Brussels will need to be investigated in London as well, so by its nature that will have an effect on current enforcement activity.
Mark Simpson: Just turning to mergers, I have a specific question for you about mergers and something that has occurred to me. Following Brexit, it does appear that there is going to be more interest taken and so-called strategic industries, so business acquisitions effects strategic industries in the UK. And the government has said that they actually intend to develop an industrial strategy and, related to this recently, the Prime Minister said that she was very concerned to ensure that acquisitions of strategic businesses or assets by foreign businesses is something she wants to ensure and look at very closely and she has mentioned that the merger control rules, and in particular, the old public interest test is something that she feels could be looked at again and be used to ensure that industrial strategy is supported. I just wondered if you could give us your thoughts on that?
Richard Whish: Well, it certainly feels that that is the direction of travel and I find a great irony in this having been a student of this subject for 35 years or so, the first 20 of which were about shrinking the role of the public interest in merger control, the next 10 years of which saw it more or less disappear and now here we are in 2016 and it seems to me pretty clear that it is going to come back in some form or another. I think that’s inescapable.
Mark Simpson: Finally, Richard, turning to the area of competition litigation, we’ve seen huge growth in this area in the last decade or so. And in particular, the English Courts have become an important forum, if not the most important forum, for litigating these claims in particular in London, we see claimants coming to London relying on European Commission cartel decisions and issuing claims for tens if not hundreds of millions of pounds…
Richard Whish: Billions of pounds…
Mark Simpson: Billions of pounds in some recent cases, so certainly an area which we would hope as practitioners and also users of the Court system for the reasons that they come here, the efficiency of the Courts, the expertise of the judges, the availability of evidence and the way that this active case management, we would hope that remains the case but I mean I have heard it suggested that that may be under threat somewhat. I just wondered have you given any thought to that?
Richard Whish: Well, I think it’s absolutely obviously under threat. There are many things to be said about that. One has competition between the legal system of England and Wales, the Netherlands and Germany and others as well, but those are the most obvious protagonists in this, and the Dutch and the Germans are already tooling up to grab as much of this work as they can and I’ve no doubt that they see this as a great opportunity. I just heard this morning of cases that are being litigated in Germany now in English, precisely for this reason, as a way of attracting business. The Dutch have already changed their law in some respects to try to match our rules on disclosure and I also think there is a different point which is as a matter of attitude or sentiment if I am a what, a Scandinavian claimant with a choice of jurisdiction of England and Wales, the Netherlands and Germany in a post Brexit world, am I going to bring my claim in London when we’re out of the EU and looking further ahead, in circumstances where a European Commission decision may not even have binding effect on an English Court so I can’t see the amount of litigation increasing, I can only see it decreasing.