The UK High Court has ordered the disclosure of the full un-redacted version of the European Commission (the Commission) air cargo cartel decision to a select group of the claimants’ advisors in follow-on damages proceedings.
This will be a welcome development for claimants who have been frustrated by the delays to follow-on proceedings caused by the time that it takes for the Commission to publish the full non-confidential versions of its decisions. In the air cargo case, four years had elapsed since the Commission had reached its infringement finding. The High Court took the view that this delay was unacceptable and that the Commission’s prolonged ‘molasses like approach’ to confidentiality representations was causing unreasonable delays to the claimants’ claims.
The Commission announced in a press release dated 9 November 2010 that it had fined 11 air cargo carriers a total of EUR 799m for operating a worldwide cartel that affected air cargo services within the EEA.1 The press release was short (three pages) and only contained limited information relating to the cartel.2
In any event, claims were brought by 565 claimants seeking compensation for the loss that they claim to have suffered as a result of this cartel.3 The claimants issued proceedings on the basis of the information contained in the press release with the intention of fleshing out their claims following publication of the decision.
Publication of Commission decisions
The Commission’s practice is not to publish infringement decisions until the parties have had the opportunity to request the redaction of confidential information. In this case, four years after the decision was reached, the Commission had still not published the non-confidential version of its decision.
At the request of one of the parties, the Commission wrote to the judge on 23 April 2014 explaining that it is not able to publish a decision until confidentiality claims have been addressed. To the judge’s apparent displeasure, the Commission gave no indication of when the process would be finished.
In order to progress their claims, in April 2014 the claimants applied to the court for disclosure of the decision redacted to address confidentiality concerns. In the first instance, the judge ordered disclosure of the decision redacted to protect the rights of third parties not addressed by the decision (as described in more detail below). This resulted in disclosure of a decision that was so heavily redacted that it was of no use to the claimants. The claimants then made an application for the court to consider the appropriateness of the redactions that had been made.
The High Court judgment
The judge was highly critical of the Commission’s ‘one speed molasses like approach’ to addressing confidentiality representations and publishing its decisions. He was particularly concerned: (1) that this was delaying follow-on proceedings; and (2) that the Commission was unable to provide any indication of when the decision would be published.
The claimants had requested that the judge read the decision and decide which sections of it should be redacted.4 Although the judge considered that this approach would be within his powers, he took the view that it would be impossible and objectionable for him to carry out the task on the basis that he did not have detailed knowledge of the background and issues which would allow him to appropriately edit the decision.
Instead, the judge took the view that there are well established procedures under English law whereby confidentiality can be protected. On this basis, he ordered disclosure of an un-redacted version of the decision (with the exception of leniency materials and material protected by legal professional privilege) to a tightly prescribed confidentiality ring. He addressed the concern that the decision might identify other potential defendants by issuing an order preventing the claimants from using the decision to commence proceedings against any party anywhere in the world without the permission of the court.
This approach has the advantage of putting all parties in an equal position within the litigation. Otherwise, the claimant and certain Part 20 defendants (who were not addressees of the decision) would be at a disadvantage to those defendants that hold an un-redacted version of the decision.
The judge broadly followed the approach taken by Mr Justice Roth in National Grid v ABB5 who also ordered the disclosure of certain sections of the confidential version of the Commission decision within a confidentiality ring. However, Mr Justice Roth had the benefit of both the confidential and non-confidential versions of the decision and was therefore able to conduct a detailed review of the two documents to determine which sections of the confidential version ought to be disclosed.
The right to confidentiality in decisions
The defendants had argued that to disclose the decision would run contrary to the rights of the non-addressees to confidentiality in the decision. Under Article 339 of the Treaty on the Functioning of the European Union, the EU institutions are under an obligation ‘not to disclose information of the kind covered by the obligation of professional secrecy’.
This obligation was considered in Pergan Hilfsstoffe für Industrielle Prozesse GmbH v Commission6 (in the context of a finding of infringement of competition law) to include the principle of presumption of innocence. In Pergan, the Commission reached an infringement finding against a number of companies active in the organic peroxide market. Its decision included a detailed description of Pergan’s involvement in the cartel even though it had discontinued its investigation of Pergan on limitation grounds. Given that Pergan was not an addressee of the decision it requested that all references to it be removed from the decision. The Court of First Instance concluded that Pergan was entitled to the benefit of the presumption of innocence and had a right for its professional secrets to be protected.
In the air cargo case, some of the Part 20 defendants were not addressees of the decision. Peter Smith J gave these Part 20 defendants the opportunity to prepare a confidential version. However, he was frustrated by the fact that this process resulted in a meaningless version of the decision. He therefore decided to require disclosure of the decision to a limited confidentiality ring. He took the view that this was not contrary to Pergan as it had the result of protecting the presumption of innocence and professional secrets whilst allowing the claimants access to the factual evidence contained in the decision to allow them to proceed with their claim.
Although this will be a welcome development for claimants, the position is not yet final. The judge has granted permission to appeal and we would expect the defendants to take this matter to the Court of Appeal meaning that this will not be the end of the saga.