BALANCING A RESPONDENT’S FAIR TRIAL RIGHTS WITH PRESERVING THE INTEGRITY OF THE COMPETITION COMMISSION’S INVESTIGATIVE PROCESS

In specific circumstances the Competition Commission (“the Commission”) restricts access to its full record by claiming litigation privilege over certain documents. Without access to the complete Commission investigation record, would respondents’ fair hearing rights be compromised, and if so, would this constitute undue encroachment on the respondents’ ability to meet a case made against them. In contrast, would unrestricted access to the Commission’s investigation notes have a chilling effect on the investigative process?
Litigation privilege can be claimed firstly, when the document is prepared for submission to a legal advisor, whether there are other purposes or not, and secondly, litigation must have been pending or contemplated. In Pioneer Foods (Proprietary) Limited v The Competition Commission 15/CR/Feb07 and 50/CR/May08 Pioneer argued that the Competition Tribunal could not claim litigation privilege as it is not an ordinary court and its proceedings were not adversarial in nature. The Tribunal did not rule on whether its proceedings were purely adversarial or purely inquisitorial or a hybrid of both. It held that it functioned as a court in certain contexts but not in others; that it had previously held that whether it has certain powers that attach to a court is a matter to be answered by reference to context.
In the Pioneer case the Tribunal held that certain features in its proceedings were adversarial in nature because it went through a process of pleadings, discovery, witness statements and oral testimony with rights of cross examination, to establish whether a case had been made against the respondent. Throughout, parties enjoyed procedural rights of fairness which it had to safeguard. The Tribunal held that the entire system is held to be suffused with attributes of an adversarial system - the very system in which litigation privilege has long been recognized.
The Tribunal cited commentary from an English case Re L [1997] A.C.16 where it was stated that the rationale for legal privilege was that a party should be free to seek evidence without being obliged to disclose the result of his researches to the other side. Interestingly, the Tribunal held that the logic of the submission by Pioneer would have been exposed had the Tribunal considered whether Pioneer could be forced to hand over its witness statements to the Tribunal. Doubtless, the Tribunal stated, Pioneer would be horrified by such a suggestion and with good reason. If the respondent could claim litigation privilege then, no doubt, if a private complainant was the referrer of the complaint, so could it. We are of the view that Tribunal proceedings are a hybrid of both - features that are adversarial and inquisitorial.
Pioneer argued that there is already in existence a regime to protect confidential information set up by the Act that by implication excluded any notion of the Commission’s ability to rely on litigation privilege. The Tribunal held that the Act regulated the use of what it terms confidential information, essentially business secrets, and the Rules then classify certain classes of information as being restricted, but only for a period of time. The object of this regime was to deal with a special need to control information in competition proceedings. Their expression in the Act and Rules did not seek to make them exhaustive on all topics pertaining to the public disclosure of information in the Commission’s possession. Litigation privilege had a separate origin and rationale for its existence that neither the Act nor the Rules sought to modify or negate.
Pioneer further argued that even if litigation privilege was applicable in Tribunal proceedings, the documents in respect of which the Commission claimed litigation privilege were obtained in pursuance of the Commission’s Corporate Leniency Policy (“the CLP”), and not litigation. Therefore the documents were not susceptible to litigation privilege. An applicant for immunity under the CLP would qualify for leniency when the applicant had:

provided the Commission with complete and truthful disclosure of all information relating to the cartel activity,
offered full and expeditious co-operation to the Commission concerning the reported cartel activity, with such co-operation should being continuously offered until the Commission had finalized its investigations,
immediately ceased the cartel activity,
not destroyed, falsified or concealed relevant information, evidence and documents relating to the cartel activity,
not alerted other cartel members or any other third party that it had applied for immunity,
not misrepresented material facts of any cartel activity, and
been the first to provide the Commission with information, evidence and documents sufficient to allow the Commission in its view, to institute proceedings in relation to the cartel activity.

The Tribunal held that relying on Pioneer’s line of argument this suggested that the CLP was a proceeding, independent of and external to litigation in the Tribunal. This was held to be incorrect; that the information obtained from immunity applicants under the CLP was intended for the purpose of litigation against the remaining firms alleged to be part of the cartel. There was accordingly no basis for refusing litigation privilege because the statements in question had been generated through the CLP process.
In Astral Operations Limited v The Competition Commission 74/CR/Jun08, the Commission permitted sight of certain documents but declined to provide others in accordance with Rule 14(1)(d) of the ‘Rules for the conduct of proceedings in the Competition Commission’. These documents constituted restricted information which the Commission was not obliged to disclose. Astral contended that without access to the complete Commission investigation record, a respondent’s fair hearing rights would be compromised. And that in fact, the Commission’s role in prohibited practice cases was analogous to the role of the prosecutor in a criminal case. The Tribunal held that because the Commission’s role in specific contexts might have been likened to that of a “prosecutor”, did not, for that reason alone, make it a prosecutor in a criminal law sense, nor entitle one to use that analogy to imbue respondents with the fair trial rights of an accused. The Tribunal maintained that an accused’s rights to a fair trial did not apply to a respondent in competition proceedings. A respondent had the right to a fair process. Furthermore, complaint proceedings were not criminal and did not carry the same consequences for individual liberty. There was less concern that fairness would be compromised if docket access rights were interpreted more restrictively for a respondent than for an accused.
The Tribunal held that as it noted in Netcare Hospital Group (Pty) Ltd and Community Hospital Group (Pty) Ltd 68/LM/Aug06 that if the Commission were to grant unrestricted access to its investigation notes to merging parties this would have a chilling effect on investigations. The policy rationale for requiring heightened access in criminal proceedings, do not therefore apply to complaint proceedings under the Act. The Tribunal further held that the documents sought by Astral reflected the opinion of the Commission and its staff on their case - matters that would never be relevant or admissible in the Tribunal’s proceedings. On the question whether Rule 14(1)(d) was a fair restriction on access to documents in complaint proceedings, the Tribunal held that to the extent that this Rule restricts a respondent from access to certain classes of documents in the Commission’s possession that restriction was not unfair being informed by a rational need to preserve the integrity and effectiveness of the investigative process.
The Tribunal held that respondents’ claim that restricted access to the Commission’s complete record would prejudice their fair hearing rights had to be balanced with the need to protect the integrity of the investigative process by allowing full and honest disclosure of cartel conduct without the risk of chilling the investigative process. The Tribunal further held that prohibited practice cases were about how respondent firms behaved in a market – how they supplied or refused to supply or imposed terms on customers or reacted to competitors, with two consequences: firstly, firms knew or have the ability to know who could provide information about a particular case and secondly, the type of evidence required differed from that in a criminal case.
In light of the above it could be argued that respondent firms cannot make the assertion that they are prejudiced in knowing which case to meet. The respondent firms’ need to access the Commission’s full record must be balanced with the Commission’s need to protect the integrity of the investigative process by allowing full and honest disclosure of cartel conduct without the risk of chilling the investigative process. This balancing act should not result in undue encroachment on respondent firms’ ability to meet a case made out against them.
Nombulelo Beauchamp is an Associate in the Competition and Trade Law Department at Bowman Gilfillan.