Competition (Amendment) Bill, 1994: Report Stage (Resumed) and Final Stage.

Debate resumed on amendment No. 7:
In page 7, between lines 18 and 19, to insert the following:
"3.—Section 14 of the Principal Act is hereby amended by the insertion of the following subsection after subsection (11):
‘(12)(a) The Authority may at any time in the exercise of their functions under this Act make an interim order directing any person or enterprise to suspend any action or proposed action which the Authority believes may be—
(i) an abuse of the rules of competition as set out in section 4 of this Act, or
(ii) abusing a dominant position in contravention of section 5 of this Act, and
(b) the Authority may provide that such an interim order shall be for a period not exceeding four months while the Authority conducts a study of any practice or action or any proposed practice or action against which the Authority issued an interim order under paragraph (a),
(c) the Authority may at any time vary the terms of an interim order issued in accordance with paragraph (a) or as a result of any decision by the Minister in accordance with paragraph (d),
(d) the Minister, having considered an interim order issued by the Authority, may if the common good so warrants by order direct the Authority to modify their interim order as the Minister may direct.'.".
—(Deputy O'Rourke.)

Since I moved the amendment I met someone who has knowledge of competition law in other countries. He was of the opinion that I was correct in saying that we see our competition law as wholly punitive. I would like to see it being more innovative. The proposal in my amendment to provide for the making of an interim order might, in many cases, be proactive.

Amendment put and declared lost.

I move amendment No. 8:

In page 8, to delete lines 9 to 18 and substitute the following:

"(4)(a) Where an offence under section 2 of this Act has been committed by an undertaking and the doing of the acts that constituted the offence has been authorised, or consented to, by a person, being a director, manager, or other similar officer of the undertaking, or a person who purports to act in any such capacity, that person as well as the undertaking shall be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first mentioned offence.

(b) Where a person is proceeded against as aforesaid for such an offence and it is proved that, at the material time, he or she was a director, manager or other similar officer of the undertaking concerned, or a person who purported to act in any such capacity, it shall be presumed, until the contrary is proved, that that person consented to the doing of the acts by the undertaking which constituted the commission by it of the offence concerned under section 2 of this Act.".

This amendment arises directly out of our discussions on Committee Stage when a number of Deputies were concerned that there should be a presumption of guilt in respect of consent given by managers or directors. Otherwise, under this Bill, it would be very easy to escape the implications of wrongdoing.

We have accommodated that in this amendment.

To recapitulate briefly, on amendment No. 5 we agreed that an action by an employee is an action of the undertaking and that, therefore, the undertaking can be held liable. In amendment No. 8 we are saying that an action by the undertaking consented to by directors, managers and those purporting to act in any such capacity implies the guilt of the manager as well as of the undertaking. We are also providing in paragraph (b) a presumption of consent to the doing of acts by the undertaking until the contrary is proven. This directly follows our Committee Stage amendment. It means that where an offence has been authorised or consented to by a person who is a director, manager or other similar officer, or a person who purports to act in any such capacity, that person as well as the undertaking shall be guilty of a criminal offence.

I draw the attention of the House to the phrase "purporting to act in any such capacity". The reason that is introduced is that a person may be acting as a director although not technically appointed as a director in the sense of not complying with all the provisions of company law for the appointment of directors. Therefore, we are providing that a person who purports to act in any such capacity would also be covered by this provision and not simply a director who is appointed under the system for appointing directors.

Obviously we cannot pursue an undertaking in respect of criminal sanctions. An undertaking represents a number of people acting either together or individually who authorise an action. This section provides that the person who authorised the action would be guilty of the offence and, therefore, would be liable, in the case of a criminal trial, to imprisonment if the case is proven against him.

I agree with the thrust of what the Minister is doing, but it seems heavy-handed. I wonder why we have to have so many words to describe a simple procedure with which I agree, that whoever consented will be liable. Did the Minister mean to use the word "connive" here as well?

On a point of information, we defined "consent" at the beginning.

Without making too much of a meal of it, as seems to have been done in the preparation of these amendments, I agree to that amendment.

I thank the Deputy for her support. The reason the amendment is so lengthy is that in paragraph (a) we are reproducing the offence of the undertaking implying the guilt of directors who authorise decisions. We are applying that not just in respect of corporate bodies, as in the original case, but in respect of any undertaking. That was requested by the Deputies. Paragraph (b) relates to the presumption of guilt. It is complex, and we accommodated the two requests.

Presumably the defence component of the earlier amendment also applies.

The good defence applies.

Amendment agreed to.

I move amendment No. 9:

In page 8, between lines 35 and 36, to insert the following:

"(c) Notwithstanding section 10 (4) of the Petty Sessions (Ireland) Act, 1851, summary proceedings for an offence under section 2 of this Act may be instituted within 2 years from the date of the offence.".

This amendment provides for extra time to put together a case where it is being brought by the Competition Authority for a summary prosecution in the District Court. Under the present provisions of the Petty Sessions (Ireland) Act one would be confined to a six month period to put one's case together. We have been advised that the complexity of competition cases might make the six month rule too short to assemble the necessary evidence and be in a position to bring the case. Consequently, we are specifying a longer period, namely two years, during which a comprehensive case can be built against an alleged offender under competition law.

Two years is not long enough because in business arrangements the facts often do not come to light until considerably later. The facts could have been submerged for a considerable period. Somebody may then come forward with information that has the greatest bearing on the case in hand much later than the two-year period and I would have thought that a longer period would be required. The two-year period is a great improvement on the original proposed period of six months, which would not be tenable, but in the changing business environment two years is brief.

We have considered that point. In respect of indictable offences, in other words serious criminal offences, the limitation does not apply. This will apply simply to summary prosecutions in the District Court.

And it would not apply to criminal offences?

They are both criminal offences. The Competition Authority has two options. In less serious cases it can go to the District Court but in indictable cases it must go via the DPP to court. If it goes the DPP route, there is no time limit. We are extending the time limit from six months to two years in respect of the lesser offences. This is a reasonable balance between the statutes of limitation that apply to District Court cases and achieving something that is workable.

What would happen if something came to light which had a great bearing on the conduct of the matter in lesser offences after the two-year period?

This would come under continuing offences so they could come back and challenge the case in court in that way.

Amendment agreed to.

Amendment No. 10 in the name of the Minister and amendment No. 16 are related and it is suggested therefore that we deal with amendments Nos. 10 and 16 together. Is that agreed? Agreed.

I move amendment No. 10:

In page 8, between lines 38 and 39, to insert the following:

4.—(1) In proceedings for an offence under section 2 of this Act, the opinion of any witness who appears to the court to possess the appropriate qualifications or experience as respects the matter to which his or her evidence relates shall, subject to subsection (2) of this section, be admissible in evidence as regards any matter calling for expertise or special knowledge that is relevant to the proceedings and, in particular and without prejudice to the generality of the foregoing, the following matters namely—

(a) the effects that types of agreements, decisions or concerted practices may have, or that specific agreements, decisions or concerted practices have had, on competition in trade,

(b) an explanation to the court of any relevant economic principles or the application of such principles in practice, where such an explanation would be of assistance to the judge or, as the case may be, the jury.

(2) Notwithstanding anything contained in subsection (1) of this section, a court may, where in its opinion the interests of justice require it to so direct in the proceedings concerned, direct that evidence of a general or specific kind referred to in the said subsection shall not be admissible in proceedings for an offence under section 2 of this Act or shall be admissible in such proceedings for specified purposes only.".

This arises from a debate on Committee Stage. There was considerable doubt expressed that expert opinion evidence would be admitted in a criminal case and the committee was concerned that if expert evidence was not admitted it would be very hard to prosecute the case. As a result we have provided for expert opinion evidence. If the witness appears to the court to possess the appropriate qualifications relating to the matter being discussed and if the court is satisfied that the person to give evidence is expert in such matters, in particular on the effects the types of agreements, decisions or concerted practices have on competition, explanations of relevant economic principles or the application of such practices and if the explanations will be of assistance to the judge or jury, such evidence will be admissible. The court has jurisdiction to rule out the admissibility of such evidence when it considers that the ends of justice could best be served by so doing. The court's discretion is not being circumscribed but it is being clearly indicated that the intention of the Oireachtas is that such expert evidence should be admissible unless the ends of justice are not best served by it. The court will, of course, have to be satisfied that the person giving evidence on the matters in question is expert and a witness does not express an opinion as to the guilt or innocence of the accused.

The evidence is essentially of a technical nature and this addresses issues raised by Deputies on Committee Stage and outside the House. Deputies will recall that there were discussions as to whether current practice would admit such evidence and we are trying to make clear what our intentions are. In this amendment we are responding to what the Deputy sought.

My amendment No. 16 states:

In page 10, between lines 6 and 7, to insert the following—

(3) The authority shall, at the request of the Courts, provide such advice, including specialist economist advice, as required, during the hearing of a case under the Principal Act.

Obviously I agree with the Minister's amendment because both amendments are making the same point. We discussed this at length on Committee Stage because we were aware there was a range of specialist advice that would be needed at certain points during the hearing of the case and nobody would be able to give it. In criminal cases expert opinions are not uncommon.

I am prepared to withdraw my amendment but perhaps in a fit of generosity which the Minister has not heretofore displayed today he might accept my more simply worded amendment in preference to his own. It is very important that expert advice be on-call. I suggest that a panel of experts with expertise in various areas which would impinge upon the likely cases to be heard should be on-call and ready to give such advice in technical cases.

Deputy O'Rourke is being unduly modest about her amendment because I understand her amendment is in relation to the hearing of cases under the Principal Act.

We were told that was the one way to do it.

They are civil proceedings but the Minister in his amendment deals with offences under this Bill which are criminal proceedings. I agree if we are about to change the law on criminal matters so as to bring in competition offences that it is necessary to have express authority for a judge to admit expert evidence on the economic effects of particular matters. Expert evidence is not covered by any statute but it is debatable that without some express permission people would be allowed to express opinions as to the likely effects of certain economic actions in a market place. It is necessary that expert evidence should be available in those circumstances.

I am slightly worried that the two named categories of evidence that can be given are unduly restrictive. The first one is the effects that agreements, decisions or concerted practices may have or have had on competition and trade. I raise this point for consideration by the Minister. There will undoubtedly be a lengthy debate on the Bill in the Seanad. Does the Minister agree that he may not have covered the whole area of abuse of dominant position in clause (a)? I do not know whether it is sufficient to cover abuse of dominant position charges. The words "agreements, decisions and concerted practices" might not be sufficiently wide to cover expert evidence on what would amount to an abuse of dominant position by a non-concerted practice on the part of a company.

The amendment refers to the explanation being "of assistance to the judge or, as the case may be, the jury". It is one thing if this is designed to reflect summary proceedings as opposed to proceedings on indictment. However, it will be a strange state of affairs if in a District Court, sandwiched between bicycle lamp cases and television cases, an expert clambers into the box to give evidence about cross elasticities of demand arising from a collusive practice between two supermarkets.

This would lighten the day for the judge.

It would lighten his day but make his load heavier.

It would be good for economists.

I query whether this will be the case or whether a more malign interpretation can be put on this that judges, having heard the expert evidence, will make their minds up as to whether something is or is not an unlawful practice, will direct juries to accept their decisions and tell them that it is none of their business to further consider the issue. As a matter of law a judge may be able to direct a jury to regard the agreement in question as one prohibited by section 5. This would mean that the jury would only be given the limited function of determining the facts in the case separate from adjudicating the legality of any particular arrangement.

The Law Reform Commission published a paper on the law relating to dishonesty. It sought submissions from people on this paper. I made a submission arguing that in serious company law prosecutions the law should be changed to allow accountants to summarise and draw conclusions for a jury from facts they find in an investigation of a company to make their expert evidence as to a pattern of behaviour admissible. The point was properly made on Committee Stage that any workable system — I do not concede that such a system is being put in place here — in which any tribunal, whether a jury or a judge only tribunal, had to come to grips with the real issues involved in the Competition Act, 1991, would need a system whereby expert witnesses can give evidence.

Will we have a case where a jury sits and listens to three experts drawn from the department of economics in Trinity College who say that, in their view, the rule of reason justifies a particular restrictive agreement and where the prosecution brings by way of rebuttal two other expert witnesses who say that the expert evidence for the defence is wrong? I do not show disrespect for any jury's verdict. I am firmly of the view that if it cannot be explained to 12 ordinary people drawn at random why somebody should be in jail, that person should not be in jail. If the case for a person being in jail cannot be made out to their clear understanding, nobody should be in jail.

I query whether it is desirable to have a species of offence where it is open to argument by experts whether an offence had been committed. It is one thing to have an expert say that the fingerprint on the revolver was that of Deputy O'Rourke and another say that it was not. It is a very different matter to have experts testifying as to whether the activity she is supposed to have committed with her revolver amounts to a crime. I am deeply suspicious of the philosophy behind this Bill. It proposes to create a species of offence where it is possible to argue to a jury that when all the facts are proven they do not really amount to a crime on one view of the law. It could be established that two supermarkets have come to an agreement on the price of milk or that one large dairy has come to an agreement with four supermarkets on the supply of milk. A troop of economists could disagree with each other in court as to whether such an agreement was anti-competitive. A jury could decide to convict or acquit on the basis that one witness wiped the floor with the other experts. To allow for this possibility is a nonsense.

The fundamental cornerstone of the criminal law is that 12 ordinary people confronted with the facts can say whether something is or is not an offence. To have them listen to a three day debate by experts as to whether something did or did not amount to an offence would introduce an entirely novel concept into our criminal law which would completely depart from the canon of clarity and simplicity. It would be utterly wrong for somebody to be in Mountjoy Jail because two experts who argued his side of the case did not have a good day and lost the argument before a jury on points to three experts who argued the other way. This would be crazy but the Bill is, unfortunately, dragging us into this situation.

It would be far better to state that price fixing, market sharing and one or two other categories are definite offences when they are committed by one or more people in agreement without permission of the Competition Authority. These offences should only apply in cases where more than a certain volume of turnover is involved. It would be clear to a jury whether companies engaged in price fixing had not been licensed by the Authority. It is nonsense to make a jury listen to two subjective arguments among economists on whether the likely anti-competitive effects of an agreement outweighed its pro-competitive effects and whether it was justified by reference to the rule of reason on whatever jurisprudence is handed down by the European Court.

The Deputy should discuss the amendments.

I am talking about expert evidence. Is there any other place in the world where a jury listens to expert economists arguing about whether an agreement is or is not competitive and can send somebody to jail on the basis of the view of one economist compared with that of another? I doubt it. This underlines the nonsensical enterprise which underlies the Bill. We are asking juries to become theorists and arrive at theoretical judgments about facts which are put before them and their likely effects in the future or in the past. That is reprehensible. It is not the function of the criminal law to decide between two theoretical views of a hypothetical situation as to the possible effects of a contract if it is allowed to run for three years. It is even worse to think that somebody could be put in jail because a jury prefers the views of one set of theoretical economists to another as to the likely effects of the decisions, activity or contracts entered into.

To go back to the point I made this morning, people went on television and radio saying that the investment in The Irish Press was perfectly lawful while others at public seminars stated it was manifestly unlawful. I often wonder what would have happened if that debate had taken place before a jury. Would a jury seriously have been asked to decide whether the directors of Independent Newspapers should go to jail or whether Independent Newspapers should be liable to a hefty fine because it agreed with the economists from Trinity rather than from UCD as to the likely effect of the investment in The Irish Press on the newspaper market?

The Minister effectively said that Members should not worry, that this will be introduced only as a last resort in the clearest of cases where the Authority has tried to persuade the people concerned to behave themselves, but that assurance is not provided for in the Bill. It is either the criminal law that certain activities are crimes or it is not. It is a bit like the national emblem being the harp with a few broken strings and " `twill do" written underneath. We are introducing a criminal law and saying that, in the last analysis, only the really bad cases will ever be confronted with this in the most obvious of circumstances. I find that a reprehensible way to legislate for criminal law.

Deputy McDowell more or less answered his own point as to whether paragraph (a) covers expert evidence in respect of the possible abuse of a dominant position. It provides, inter alia, for the giving of information by experts about the effects of certain decisions on competition and trade. This could relate to the abuse of a dominant position. The section also includes the words “without prejudice to the generality of the foregoing”. I see this as an enabling provision which will allow the court to admit such information in evidence.

The Deputy expressed his unhappiness about the clash of experts as to whether an offence has been committed. This goes back to the debate on Committee Stage on whether certain offences should be specified and whether this should form the basis of the law in this area. It is my understanding that this is not the way the law in the United States, which is, probably, the most developed in this area, has evolved. A list of specific offences was not compiled, rather they have been built up over time by various court precedents.

Specific offences have been included in section 4 against which people can judge what has happened. These include: directly or indirectly, fixing purchasing or selling prices; limiting or controlling production markets, technical development or investment; sharing markets or sources of supply; applying dissimilar conditions to equivalent transactions and so on.

Given the wider scope of sections 4 and 5, there are certain provisions on what would constitute a good defence. We dealt with that matter earlier. A judge cannot direct a jury to find a person guilty.

A jury has to find on the facts of a case, although the judge can give direction. He can say that if it does not believe X, it should find him guilty or, if he believes that insufficient evidence has been presented, he can withdraw the charge. Therefore, a judge does have discretion in assisting a jury to reach decisions on these matters. He has a part to play, it is not, simply, a matter of watching the class of experts.

Is the jury bound by his direction as to whether a contract is unlawful?

A jury has to draw conclusions on the facts presented as to whether an offence has been committed. I cannot comment on the Deputy's point about honesty as I am not sufficiently familiar with what he is referring to.

In relation to amendment No. 16 in the name of Deputy O'Rourke, we are providing for the giving of expert evidence. It is my understanding that in a civil case the court can appoint assessors to assist in judging the issues. The Competition Authority will respond to any requests from the courts to provide evidence. I cannot, therefore, accept the amendment.

In amendment No. 10 we have responded to the points made during the debate. The lacuna was identified that expert evidence was not admissible. We have responded with this amendment.

Amendment agreed to.

I move amendment No.11:

In page 9, between lines 25 and 26, to insert the following:

"6.—Section 7 of the Principal Act is hereby amended by the addition of the following subsection:

‘(7) The Authority shall make its decision granting or refusing to grant a licence under section 4 (2) within two months of a notification made under subsection (3).'.".

The deadline of two months specified for granting or refusing a licence is generous. Decisions should be made speedily. There are, however, enormous delays. In complaining about the lack of resources the director of the Competition Authority made the point that while a considerable portion of the backlog has been cleared it is a constant battle — a King Canute job — to roll back the waves. There should be a deadline for granting or refusing a licence. It is very important that they are made withing two months of a notification made under subsection (3).

I regret that I am unable to agree to the amendment. As the Deputy is probably aware, about 1,200 agreements were notified to the Authority for licensing. These are, essentially, illegal. Despite their illegality they are seeking a licence to permit them to proceed on grounds of wider public interest specified in the Bill concerning special economic advantage. It would be foolish to put a time limit that would give rise to the real danger that anti-competitive agreements could pass by default if the time limits could not be met. While the authority is making good progress, some particularly difficult issues will arise in respect of the remainder.

In other areas I can see the possibility of time limits and we could look at that when considering the possibility of regulations being drawn up under the Act. Time limits may be appropriate in the context of certificates.

This refers to licensing something that is illegal but that should not be done under the pressure of a time limit; at least not now when there are quite a number of difficult cases to be handled.

Yet the competition authority complained bitterly about not being able to deal with cases due to lack of resources. Given the enforcement burden, the authority said in a report that it would have fewer notified agreements. Having received more than 1,300, it has reached the significant landmark of having dealt with 1,000 of them. The authority says that while the backlog is getting smaller it is also getting older and, therefore, it has those cases the Minister mentioned.

The authority goes on to say that it is unacceptable to have such delays in dealing with notification from the point of view of keeping parties waiting for too long, or of consumers who may be suffering from anti-competitive agreements upon which the authority has not yet ruled. It says it has done its best to do the work, but at a high cost, it is limited without proper resources and things will get worse before they improve. The possibility of notifying agreements under the Bill, might increase the authority's problems.

How often does the Minister meet the competition authority? I am perplexed about that. On the one hand it is quite acerbic about being independent of the Department or the Minister, according to a comment in its report. On the other hand, there is a mechanism whereby the Minister can make a decision on an urgent case. We discussed that this morning when we considered an amendment which would have speeded up the operation.

What relationship is there between the Minister's Department and the competition authority? It is one of reportage or distancing? Clearly, the Minister cannot involve himself in the day to day running of the authority, but does he involve himself in how effective it is in dealing with cases and particularly with consumers who may be suffering because of anti-competitive practices?

It seems to be a hybrid arrangement and the statute establishing it is not clear. It is unhappy with its operations because of the paucity of finance it receives. Is the Minister satisfied this Bill will increase the effectiveness and workmanlike atmosphere needed in a competition authority? I do not think it will.

Does the Minister intend to give the authority the resources to do its work? There are two aspects to this. The amendment seeks to bring speed into the process, but the authority cannot comply due to lack of resources. The other aspect concerns the authority's standing and its relationship both with the Minister's Department and the world outside. Does the Minister see a need for the competition authority and its operations to become more open and transparent? While I am sure the authority is accountable to the Minister, is he satisfied that enough people know the authority is there, as well as what it is doing and who it is meant to serve? I am not.

Is Deputy O'Rourke pressing the amendment?

No, because we will not get through anything else if I do.

Amendment, by leave, withdrawn.

It is prudent to advise Members that we have a time limit. This business is scheduled to conclude at 5 o'clock.

I move amendment No. 12:

In page 9, between lines 25 and 26, to insert the following:

"6.——Section 9 of the Principal Act is hereby amended in subsection (1) by the insertion after `section 4 (2) or 4 (4)' of `or the refusal by the Authority to grant a licence or a certificate'.".

This amendment concerns the repeal of an earlier one.

This amendment seeks the right to appeal the refusal of the authority to grant a licence. I am not in a position to accept the amendment. Parties that are aggrieved by a negative decision have a right of judicial review.

I know they can seek a judicial review, but it is a long process.

They can seek a judicial review of the procedure that has been adopted. A licence is a permit to do something that otherwise would be unlawful and void. The permit is given for specialist reasons set out in section 4 (4) which describe special circumstances that might permit it to give a licence.

It is a specialist area where experts decide whether circumstances are sufficient to permit something that would otherwise be an anti-competitive practice. It is an area where it has the final decision in much the same way as An Bord Pleanála or the Environmental Protection Agency has a final decision on the technical question as to whether a person meets this requirement. There is only an appeal from An Bord Pleanála or the Environmental Protection Agency on a point of law. That provision would apply here.

If a person or an undertaking persisted with the behaviour in respect of which the licence was refused, it would be pursued by the authority and would have the opportunity to defend its position in court on an enforcement action by the authority against it. In that sense, the undertaking has a further stage it can go to.

I am satisfied that, along the same lines as An Bord Pleanála and the Environmental Protection Agency, the present procedure is working satisfactorily. We should not introduce a new round of appeal that would clog the courts.

Should the authority itself be amenable to an explanation of its action? Is there an inquiry desk at the competition authority? Is it staffed by people who can answer the concerns of business people, or is it a mysterious body which is not open to the daily concerns of ordinary people, as distinct from huge investigations into massive corporations? Is it open, can a person go in there?

No, you cannot actually go in.

Can I ask for an explanation?

I cannot allow the Minister to reply, as such, but he may make a brief comment.

The relationship of the authority to the Minister is set out clearly in the law. It is a quasi-judicial body. Its decisions are published at great length. There is a huge amount of transparency whereby one can study the basis of their decisions. It also provides an annual report in which it summarises its work. To a degree the authority is at arm's length from the Department. It is quasi-judicial and it processes licences and certification without reference to the Department. That is its primary function. Under section 11 it can also be asked by the Minister to investigate the conditions in a particular market or, under section 14, it can be asked to determine whether there is potential abuse of a dominant position and report to the Minister, on foot of which I can take action.

I meet members of the authority on a regular basis. A significant increase in resources will be allocated to the authority in accord with its new duties. It will now have the opportunity to take civil as well as criminal actions of enforcement. I realise all agencies would like more resources — that is something we learn to live with — but I have secured agreement from Government that the authority's resources will be substantially enhanced to deal with the obligations under this Bill.

Does the authority have, for want of a better word, a call-in centre?

We cannot revert to Committee Stage now. I have allowed some latitude in facilitating the Minister to give a brief comment by way of clarification.

I thank the Chair for that.

Amendment, by leave, withdrawn.

Recommittal is necessary in respect of amendments Nos. 13, 14 and 15 as they do not arise out of Committee proceedings. Bill recommitted in respect of amendments Nos. 13 to 15, inclusive.

I move amendments No. 13:

In page 9, between lines 26 and 27, to insert the following:

"(a) by the substitution of the following subsection for subsection (1):

‘(1) Any person who is aggrieved in consequence of any agreement, decision, concerted practice or abuse which is prohibited under section 4 or 5 shall have a right of action for relief under this section against either or both of the following, namely—

(a) any undertaking which is or has at any material time been a party to such an agreement, decision or concerted practice or has been guilty of such an abuse,

(b) any director, manager or other officer of such an undertaking, or a person who purported to act in any such capacity, who authorised or consented to, as the case may be, the entry by the undertaking into, or the implementation by it of, the agreement or decision, the engaging by it in the concerted practice or the doing by it of the act that constituted the abuse.'.".

The amendment widens the application of section 6 of the Principal Act to ensure aggrieved persons have the right of civil action against either the undertaking, a director, manager, etc. of such an undertaking or both. In view of the fact that undertakings or directors can commit offences, it made directors potentially personally liable for civil damages. The effect of this amendment is that the aggrieved person can seek damages against a director. As I explained earlier, the phrase "purported to act in any such capacity" covers a case where a director may not have been properly appointed or where it is difficult to prove the person was a director. To ensure compliance it is important that people who authorise actions that damage another person can be pursued and that there can be findings against them. Corporations are not nameless entities; they are controlled by individuals and we do not want individuals to be in a position where they can set up legal vehicles to avoid pursuit under this clause. They can rebut their involvement under legislation but this amendment permits the taking of a case for damages against the undertaking, the directors, managers, etc. or both.

I should like to point out the implications of this amendment. Many bodies have been charged civilly with breaching the law, one of which is the Voluntary Health Insurance Board. Proceedings have been taken against many other large companies, some of which were owned by the State. Going back to this morning's dictionary debate on the connivance issue, this measure will impose civil liability on any board member who passively acquiesces in behaviour later found to be anti-competitive and exposes them to subsequent bankruptcy.

It is a little bit like the surcharge element on a subcommittee.

A board director of a large company, a person of limited economic capacity or even someone appointed by a Minister, could have acquiesced in regard to many items and be found, under this definition of "connivance", to be personally liable for huge sums of money. This measure completely rips apart the veil of incorporation on civil liability and it does not seem, on the face of it, to distinguish between those who are seriously guilty and gain from it and the managers and directors who gain nothing from it. The Minister seems to be making them all civilly liable to other people for the activities of companies on whose board they may have represented a minority. The Minister is galloping in here at the eleventh hour to radically change our law in relation to directors' liability. He is making a whole class of people, including those who passively acquiesce, to use the Minister's own pharase, in certain behaviour civilly liable and liable to be bankrupted in their retirement from companies. Where did the Minister get the mandate for this amendment?

Competition law is an important element of law. Decisions taken can destroy people's livelihoods and be extremely damaging and people should have the right of action. It was argued cogently on Committee Stage that that right of action should not be capable of being thwarted by claims that responsibility lay with the undertaking or those behind the undertaking on whose direction the undertaking was accustomed to act.

The Minister could have extended it to include those who passively acquiesce in the decision.

The opportunity to pursue an undertaking or the directors should not be allowed to be thwarted in that way. We are saying clearly in this amendment that people who commit offences under competition law which inflict serious damages on another party, and perhaps destroy their livelihoods, should be capable of being pursued as well as the undertaking. That principle was debated on Committee Stage. People have the right to defend their position in the courts——

Not on passive acquiescence.

The passive acquiescence aspect is the difficulty.

Under amendment No. 15 those people have the opportunity to establish their non-involvement. Where they establish that the contrary is the case and that they did not authorise or consent to the action, they are not——

Passive acquiescence is now deemed to constitute consent.

Yes, if they acquiesce in a decision that inflicts damage they can be pursued. That is what we are providing for in the amendment. If they establish under the Act that they did not consent or authorise the actions, they will not be guilty under the Act.

We were told earlier that passive acquiescence is equal to connivance.

And is equal to consent. I realise we are bound by the Order of the House and that I have approximately 47 seconds in which to make my point. Legislation to implement a fundamental change in directors' liability to make them liable to be bankrupted if they passively acquiesce in the activities of a board of which they are a member which later turn out to be actionable under the Competition Act should not be rushed through the House in these circumstances. It is shameful that this House has allowed a serious change in the law to be rushed through in this manner without having regard for its implications.

I agree. The original Competition Act was flawed because of a lack of expertise among those who compiled it and advised the relevant Minister. This is equally flawed for the same reasons. We have gone further into the legal area without proper legal advice. We protest but our protests have not been heard.

As it is now 5 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for Enterprise and Employment and not disposed of are hereby made to the Bill, that Fourth Stage is hereby completed and that the Bill is hereby passed.

Question put.
The Dáil divided: Tá, 69; Níl, 55.

  • Ahearn, Theresa.
  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Peter.
  • Bell, Michael.
  • Bhamjee, Moosajee.
  • Boylan, Andrew.
  • Bradford, Paul.
  • Bhreathnach, Niamh.
  • Bree, Declan.
  • Broughan, Tommy.
  • Bruton, Richard.
  • Byrne, Eric.
  • Connaughton, Paul.
  • Connor, John.
  • Costello, Joe.
  • Coveney, Hugh.
  • Crawford, Seymour.
  • Creed, Michael.
  • Crowley, Frank.
  • Currie, Austin.
  • Deenihan, Jimmy.
  • De Rossa, Proinsias.
  • Doyle, Avril
  • Dukes, Alan M.
  • Durkan, Bernard J.
  • Finucane, Michael.
  • Fitzgerald, Brian.
  • Fitzgerald, Frances.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Gallagher, Pat (Laoighis-Offaly).
  • Gilmore, Eamon.
  • Higgins, Jim.
  • Higgins, Michael D.
  • Hogan, Philip.
  • Howlin, Brendan.
  • Kavanagh, Liam.
  • Kemmy, Jim.
  • Kenny, Enda.
  • Kenny, Seán.
  • Lowry, Michael.
  • Lynch, Kathleen.
  • McCormach, Pádraic.
  • McDowell, Derek.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McGrath, Paul.
  • McManus, Liz.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Nealon, Ted.
  • O'Keeffe, Jim.
  • O'Shea, Brian.
  • O'Sullivan, Toddy.
  • Pattison, Séamus.
  • Penrose, William.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, John.
  • Ryan, Seán.
  • Shatter, Alan.
  • Sheehan, P. J.
  • Shortfall, Róisín.
  • Stagg, Emmet.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Walsh, Eamon.


  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, David.
  • Brennan, Matt.
  • Brennan, Séamus.
  • Browne, John (Wexford).
  • Byrne, Hugh.
  • Callely, Ivor.
  • Clohessy, Peadar.
  • Cowen, Brian.
  • Davern, Noel.
  • Dempsey, Noel.
  • de Valera, Síle.
  • Doherty, Seán.
  • Ellis, John.
  • Fitzgerald, Liam.
  • Flood, Chris.
  • Foley, Denis.
  • Geoghegan-Quinn, Máire.
  • Haughey, Seán.
  • Hughes, Séamus.
  • Jacob, Joe.
  • Keaveney, Cecilia.
  • Smith, Michael.
  • Wallace, Dan.
  • Wallace, Mary.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Martin, Micheál.
  • McCreevy, Charlie.
  • McDaid, James.
  • McDowell, Michael.
  • Moffatt, Tom.
  • Molloy, Robert.
  • Morley, P. J.
  • Moynihan, Donal.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • O'Dea, Willie.
  • O'Hanlon, Rory.
  • O'Keeffe, Ned.
  • O'Leary, John.
  • O'Rourke, Mary.
  • Power, Seán.
  • Quill, Máirín.
  • Smith, Brendan.
  • Walsh, Joe.
  • Woods, Michael.
Tellers: Tá, Deputies J. Higgins and B. Fitzgerald; Níl, Deputies D. Ahern and Callely.
Question declared carried.