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Antitrust Litigation: Access to Documents Held by Regulatory Authorities

Tom K. Cassels, Keith R. Jones, Richard Pike, Francesca Richmond, Baker & McKenzie, Client Alert, April 2012.

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The English High Court has confirmed that the principles established by the judgment of the Court of Justice of the European Union (the "ECJ") in Pfleiderer apply to the disclosure of leniency documents submitted to the European Commission as well as to EU national competition authorities. This means that, in principle, EU national courts may order disclosure of leniency documents submitted to the European Commission or national authorities provided that the court weighs the interest in disclosure against the need to protect the effectiveness of the relevant leniency programme and also determines that it is proportionate on the facts of the particular case to order disclosure.

In practice, the English High Court only considered it appropriate to order very limited disclosure of leniency materials in this case and other EU national courts are likely to take an even more restrictive approach given that the scope of disclosure is limited in most EU member states (other than the UK). However, the judgment confirms the potential for claimants to obtain access to such material and increases the likelihood of applications for leniency material being made in future in all EU member states.

Claim HC08C03243, National Grid Electricity Transmission plc v ABB Ltd and others

On 4 April 2012, the English High Court handed down its judgment on an application for disclosure of an unredacted copy of the Commission Decision in Case Comp/F38.899 (Gas Insulated Switchgear) and for documents submitted by Decision addressees as part of the European Commission’s leniency process.

The National Grid claim was brought in November 2008 and will not be determined finally until after appeals against the underlying Commission Decision have been decided. However, the English High Court has allowed for some disclosure to take place prior to determination of those appeals in order that the matter might be progressed to trial relatively quickly once the appeals have been resolved.

On 14 June 2011, ECJ handed down its judgment in Pfleiderer - confirming that EU law does not preclude a damages claimant from access to documents relating to a leniency procedure but that national courts must apply national law and weigh interests protected by EU law in order to determine the conditions under which such access must be permitted or refused. National Grid then submitted an application to the English High Court on 22 June 2011 requesting an order that the defendants to the claim disclose an unredacted copy of the Commission Decision and documents produced in respect of leniency (which had come into the hands of defendants other than individual leniency applicants as a result of participation in the investigation process).

The European Commission submitted a paper to the English High Court, explaining its views as to whether it was appropriate to order disclosure of these documents. The European Commission accepted that the general principles identified in Pfleiderer apply to documents created for the purposes of a Commission investigation in the same way as to documents submitted to national competition authorities, but stated that courts should weigh whether disclosure of the documents is proportionate in view of the likely interference with the effective operation of its leniency programme (and take into account whether the information contained in the leniency statement is likely to be probative and/or can be obtained from another source). It added that the English High Court should consider carefully on the facts whether a leniency applicant would be put in a significantly worse position in respect of follow-on damages claims as compared to other cartel members if documents it had submitted as part of the leniency process were disclosed.

The Commission has made similar submissions to US Courts considering whether to order disclosure of documents held by parties that were obtained by accessing its file during an investigation. The position of the US Courts in those cases was that disclosure is in principle possible, but it will apply a five factor test in order to determine whether this is appropriate on the facts of the case.

The English High Court recognised the importance of not jeopardising the attractiveness of leniency programmes and determined that the substance of the ruling in Pfleiderer, expressing as it did general requirements and principles of EU law, applies with equal force to a national or EU leniency programme. The judgment added that it is not necessary for national courts to make a formal Article 15 request to the European Commission in every case where documents from its file are at issue, provided that those documents are in the hands of parties to an action. It noted that it will be open to the European Commission to make its views on disclosure known to the national court if it considers it appropriate to do so.

The English High Court then explained how the Pfleiderer principles might be applied in order to determine if leniency documents ought to be disclosed. In considering the need to protect effective leniency programmes, the Court rejected the argument that defendants might have a legitimate expectation that documents submitted as part of the leniency process would not be subject to disclosure but did accept that, if disclosure increased liability of a leniency applicant, then this might be a powerful factor against disclosure. However, in this case, the leniency applicant was sued on a joint and several basis with other defendants and it was not considered that disclosure was likely to increase the proportion of damages claimed (even if it might increase the likelihood of the claim succeeding).

The English High Court then considered the claimant’s need for disclosure by determining whether disclosure would be proportionate in view of the availability of material from other sources and relevance of material to the issues at stake. It noted the particular asymmetry of information and difficulties for claimants in bringing this type of case and made clear that, unless relevance is obvious, a court should inspect each document and consider it individually in determining whether it was appropriate to order disclosure. It noted that the claimant was unlikely to obtain witness evidence from the cartellists but, having reviewed the material, determined that only some previously redacted paragraphs of the Commission Decision and limited extracts of leniency documents were of such relevance that they should be disclosed to the claimant.

It may be helpful to note that the bulk of leniency communications in this case had been made orally to the European Commission and so the scope of material subject to review by the English High Court was necessarily limited. However, given the approach taken by the English High Court to disclosure of leniency materials -and the approach of US courts faced with similar applications - it is likely that entities subject to investigation will continue consider the content of written submissions and communications on leniency carefully as there can be little certainty as to whether such information will be deemed disclosable in future as part of any private damages action.

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