A recent decision of the High Court has underlined the importance of regulators ensuring that they observe principles of fairness in the conduct of investigations. The case related to a long-running investigation by the OFT into alleged collusion by certain large supermarkets and dairy processors to increase the price of milk and other dairy products in 2002-03. The supermarket chain, Morrisons, which has always refuted the allegations, has now been granted permission to bring judicial review proceedings against the OFT, arising in particular from the manner in which the investigation has been handled, and publicised. Hearing the application, Mr Justice Davis criticised the OFT in particular for publicising its provisional findings prior to the conclusion of its investigation.
A word, firstly, on the background. On 20 September 2007, the OFT published its "provisional findings", to the effect that the companies in question had engaged in collusion through the sharing of commercially sensitive information, in 2002 and, in some cases, 2003. These allegations were summarised by the OFT in a press release, then subsequently clarified in relation to Morrisons in December 2007. It is important to note that, as in other cases, the findings published in the press release, including details of the parties alleged to be involved, were only "provisional", pending the conclusion of the OFT's investigation and issue of its final decision. Morrisons is understood to be suing the OFT for libel arising from the press release. In this latest development it has now also been granted permission to obtain judicial review of the manner in which the matter has been conducted by the OFT.
The case raises important questions in relation to the fair conduct of regulatory investigations. There are clear dangers in regulators choosing to publicise details of ongoing inquiries, prior to their conclusion and in the absence of any final determination. This all the more so in cases of potentially significant public and media interest, where the risks of 'trial by media' are magnified. It is important that the pressure which regulators may feel to demonstrate robustness in safeguarding the public interest does not compromise the essential requirements of fair process. It is after all in the public interest for regulators to observe, and be seen to observe, the principles of fairness and natural justice, as enshrined by both the common law and the Human Rights Act.
The potential risks are at least twofold. Firstly, from the perspective of the party which is the subject of the investigation, there may be a real risk of significant reputational and/or commercial damage arising from the publicity. This in circumstances, it will be recalled, where no breach or unlawfulness has been established.
Secondly, there is a potential risk, from the perspective of the regulator, that it may be seen to have pre-judged the outcome of the investigation. This to the detriment of transparency and objectivity in the decision-making process.
It is trite law, but always worth recalling, that one is innocent until proven guilty. It follows that the burden of proof rests, in this context, with the regulator. Until such time as the requisite proof has been established, regulatory decision-makers would be well advised to consider carefully what the implications of publication may be, from the viewpoint of fairness to the parties involved, as well as from the perspective of the wider public interest. Failure to do so may cause the regulator to find itself subject to legal challenge. In a climate in which the public agenda may be seen to be dictated increasingly by the media, it is worthwhile recalling the requirements of fairness, objectivity and independence in any regulatory process.