The English High Court has ordered the disclosure of the full unredacted version of the European Commission air cargo cartel decision to a select group of the claimants' advisers in follow-on damages proceedings.
This is a welcome development for claimants that have been frustrated by the delays to follow-on proceedings caused by the time that it takes for the commission to publish 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 held 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.
In a November 9 2010 press release the commission announced that it had fined 11 air cargo carriers a total of €799,445,000 for operating a worldwide cartel which affected air cargo services within the European Economic Area.(1) The press release was short (three pages) and contained limited information relating to the cartel.(2)
Claims were brought by 565 claimants seeking compensation for losses that they claimed to have suffered as a result of the cartel.(3) The claimants initiated proceedings based on the information contained in the press release, intending to flesh out their claims once the decision was published.
The commission does not 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 still had not published a non-confidential version.
At the request of one of the parties, the commission wrote to the High Court on April 23 2014 explaining that it could not publish the decision until confidentiality claims were addressed. To the court's apparent displeasure, the commission gave no indication of when this process would be finished.
In order to further their claims, in April 2014 the claimants applied to the court for disclosure of the decision redacted to address confidentiality concerns. The court ordered the disclosure of the decision redacted to protect the rights of third parties that were not addressed by the decision. This resulted in the disclosure of a decision that was so heavily redacted that it was of no use to the claimants. The claimants then applied for the court to consider the appropriateness of the redactions that had been made.
The court was highly critical of the commission's "one speed molasses like approach" to addressing confidentiality representations and publishing its decisions. It was particularly concerned that the commission was delaying follow-on proceedings and had provided no indication of when the decision would be published.
The claimants requested that the court read the decision and decide which sections of it should be redacted.(4) Although the court considered that this approach was within its powers, it held that it would be impossible and objectionable for it to carry out the task on the basis that it did not have detailed knowledge of the background and issues which would allow it to edit the decision appropriately.
Instead, the court held that there are well-established procedures under English law whereby confidentiality can be protected. On this basis, it ordered the disclosure of an unredacted version of the decision (with the exception of leniency materials and material protected by legal professional privilege) to a tightly prescribed confidentiality ring. It 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 worldwide without the court's permission.
This approach was advantageous, as it put all parties to the litigation on equal footing. Otherwise, the claimants and certain Part 20 defendants (which were not addressees of the decision) would have been at a disadvantage to those defendants that had an unredacted version of the decision.
The court broadly followed the approach taken in National Grid v ABB,(5) wherein Justice Roth ordered the disclosure of certain sections of a confidential version of the commission's decision to a confidentiality ring. However, Roth had 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 should be disclosed.
The defendants argued that disclosure the decision would run contrary to the non-addressees' right to confidentiality. Under Article 339 of the Treaty on the Functioning of the European Union, EU institutions are obliged "not to disclose information of the kind covered by the obligation of professional secrecy".
This obligation was considered in Pergan Hilfsstoffe Fur Industrielle Prozesse GmbH v Commission(6) (in the context of a competition law infringement) 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 European Court of First Instance concluded that Pergan was entitled to a presumption of innocence and had a right to protect its professional secrets.
In the air cargo case, some of the Part 20 defendants were not addressees of the decision. The court gave these Part 20 defendants the opportunity to prepare a confidential version of the decision. However, it was frustrated by the fact that this process resulted in a meaningless version of the decision. Therefore, it required that the decision be disclosed to a limited confidentiality ring. It took the view that this was not contrary to Pergan, as it protected the presumption of innocence and professional secrets while allowing the claimants access to the evidence contained in the decision so that they could proceed with their claims.
Although this is a welcome development for claimants, the position is not yet final. The court has granted the defendants' permission to appeal and the matter will likely be brought before the Court of Appeal; thus, the saga is not over yet.
For further information on this topic please contact James Flett or Peter Scott at Norton Rose Fulbright by telephone (+44 20 7283 6000), fax (+44 20 7283 6500) or email (firstname.lastname@example.org or email@example.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
(4) This approach would not have been entirely novel, as it was already taken by Justice Roth in another follow-on action – National Grid Electricity Transmission plc v ABB Ltd  EWHC 869 (Ch). Roth ordered the disclosure of certain leniency materials after reviewing each document.