Down the rabbit-hole: costs, the Comms Act and the Competition Commission

‘“But I don’t want to go among mad people,” Alice remarked.

“Oh, you can’t help that,” said the Cat:  “we’re all mad here”.’

Where an appeal to the Tribunal under section 192 of the Communications Act 2003 gives rise to specified ‘price control matters’, the CAT must hive them off for determination by the Competition Commission: see section 193(1) and SI 2004/2068.  The CAT is then bound by section 193(6) to follow the Commission’s determination, except ‘to the extent that the Tribunal decides, applying the principles applicable on an application for judicial review, that the determination of the Competition Commission is a determination that would fall to be set aside on such an application’: section 193(7).

This “quasi-judicial review within an appeal” jurisdiction under section 193(7) is tribute in itself to the complexity of the legal imagination.  In British Telecommunications Plc v Office of Communications [2012] CAT 30 the Tribunal takes us deeper still into wonderland with this question: can the Competition Commission, when it participates in a section 193(7) review before the Tribunal, recover its costs of so doing?

The case concerned the price controls which Ofcom had imposed upon the mobile operators for the period 1 April 2011 to 31 March 2015.  Three of the mobile operators and BT appealed on various grounds, and the Tribunal referred the issues (which were in their entirety ‘price control matters’) to the Competition Commission.  The Commission duly determined those issues and, when its Determination was challenged by Vodafone and Everything Everywhere under section 193(7), successfully defended it before the CAT: see the Tribunal’s substantive judgment of 3 May 2012 [2012] CAT 11.

The Commission then applied for its costs from Vodafone and Everything Everywhere.  They however resisted the application, on the ingenious ground that rule 55(2) of the CAT Rules empowers the CAT only to make ‘any order it thinks fit in relation to the payment of costs by one party to another in respect of the whole or part of the proceedings’: the Commission, they submitted, was not party to the proceedings.

The CAT accepted that submission.  It reasoned that: (i) it is essential that the Commission should be entitled to appear before the Tribunal in a section 193(7) challenge (§23); (ii) the Commission participates as ‘one of the appeal bodies’ in the appellate process rather than as a party (§26); (iii) it is beneficial for the Commission to ‘assist the Tribunal in an active but neutral capacity, and this, we hold is what section 193 requires of the Commission’  (§27).

This is strange stuff.  Only parties have a right to representation under rule 7 of the CAT Rules: does the Tribunal’s view that the Commission must be entitled to participate not suggest that it is a party to the proceedings?   Of course the Commission is acting as ‘one of the appeal bodies’ when it makes its Determination, but how can it be said to be exercising an appellate function when it seeks to defend it? The Commission may have acted in a ‘neutral capacity’ in the particular case before the Tribunal, but what if its behavior had been partisan?  It is not difficult to imagine a case where the nature of the challenge to the Commission’s Determination – bias, perhaps – might lead the Commission to respond with injudicious hostility.

In judicial review the principles upon which the Court will order costs for or against an inferior court or tribunal are well-established: see R (Davies) v Birmingham Deputy Coroner [2004] EWCA Civ 207, [2004] 1 WLR 2739 at §47.  If a tribunal whose decision is under challenge seeks neutrally to assist the Court, generally no order will be made for or against it; but if the tribunal actively resists the judicial review challenge, costs typically follow the event.

The flexibility of the Davies approach has much to commend it; the CAT could perfectly sensibly have recognised the Commission as a party but have declined to award costs on a Davies basis.  The CAT’s preferred solution seems, by contrast, highly technical and extremely rigid.  In a quasi-judicial review under section 193(7) of the Communications Act, reality – and realism – are several removes away.