CLARIFIED: ruling sees boundaries defined for applying European Commission decisions



The House of Lords has issued a landmark ruling that imposes a limit on the extent to which domestic courts are bound by EU competition law.



Delivering the lead judgment in Inntrepreneur Pub Company v Crehan (2006) UKHL 38, Lord Hoffman said that domestic courts need only give priority to the decisions of European institutions where the parties before the UK court were addressees of (or specifically named in) the relevant European Commission (EC) decision. However, he added that UK courts would be likely to treat a commission decision as highly persuasive.



The Law Lords' ruling overturned a 2004 Court of Appeal decision to award damages, for the first and only time in the UK, for a breach of Article 81 of the EC treaty, which specifically prohibits anti-competitive agreements.



Their judgment was the culmination of a case that had spanned 14 years, and began when pub tenant Bernie Crehan challenged the beer tie-in system that obliged him to buy stocks exclusively from the landlord brewery (now Inntrepreneur). Mr Crehan argued that this was demonstrably anti-competitive and infringed Article 81.



Anne Molyneux, a partner at City firm Sprecher Grier Halberstam, which advised Inntrepreneur at every stage, said: 'The House of Lords decision... clarifies the circumstances in which national courts must follow commission decisions and when they are required to reach their own conclusions. Whilst commission decisions always have evidential value, they are only binding if they involve the same parties and the same agreement. For the position to be otherwise would deny the right to a fair trial.'



Rupert Croft, a litigation partner at niche competition firm Maitland Walker, which represented Mr Crehan, said the Lords' ruling ran counter to the thrust of current policy.



He said: 'In the UK and elsewhere in Europe, private competition claims are being encouraged as an important means of protecting consumers... The Lords' decision is likely to act as a disincentive to claims for damages for infringement of competition law.'



According to Jeremy Robinson, senior competition associate at City firm Bird & Bird, the case clarifies the relationship between commission decisions and the obligations on national courts. 'If a judge faces neither a binding decision of the commission, nor a risk of conflict with EU law, his courtroom is still his castle,' he said.



Ms Molyneux said Inntrepreneur will now seek to recover its 'very substantial' costs from the Legal Services Commission (LSC), which funded the litigation.



A spokesman for the LSC said: 'Mr Crehan received legal aid to enable him to be represented as the lead case in a multi-party action... There were about 600 other cases involved, the majority of which had been stayed pending the outcome of Mr Crehan's case.



'The legal aid certificate issued to Mr Crehan covered not only the work done on his case, but also the generic work done on those other cases... taking one case forward as the test case has reduced the legal aid costs. We are unable to give any information on the level of legal aid costs until all final bills have been received and paid.'



Jonathan Rayner