The privilege against self-incrimination in competition investigations

Peter WillisPartner

Competition, EU and Trade Group

27 January 2005

Overview

Context – powers of investigation The Orkem principle Funke Saunders National courts Graphite Electrodes

Commission and OFT powers of investigation

To require the production of documents and information – written power, generally exercised at a distance

To investigate on-site, take copies of documents and request explanation of those documents and relevant facts

Article 6 ECHR

1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law…

2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty.

Orkem (1989) Orkem challenged Commission request for information

Court noted no express right to remain silent

Article 6 ECHR could be relied upon by an undertaking under investigation

No right under Article 6 not to give evidence

What rights under Community law?

Commission is entitled to compel an undertaking to provide all information and documents, even if they may establish the existence of anti-competitive conduct

Commission may not compel an undertaking to provide answers involving admission of an infringement which it is incumbent on the Commission to prove

Orkem questionsQuestion Permitted () or not ()

Dates and places of meetings, names of participants

Copies of documents relating to the meetings

Subject-matter and implementation of measures taken in order to determine and maintain a satisfactory price level

The purpose of the action taken and the objectives pursued

Clarification of steps envisaged or adopted to support price initiatives

Details of system or method making it possible to set targets or quotas

Details of methods facilitating monitoring of compliance

Funke (1993)

French customs officers found documents at F’s house

Requested him to produce further documents

When sentenced to pay penalty for non-production, F argued that Article 6 ECHR applied

ECtHR: “customs secured conviction in order to obtain documents, although not certain of existence. Attempted to compel F to provide evidence of the offence”

Difficult to reconcile this with the fact that customs had identified the documents requested, and F had initially agreed to produce them

Saunders (1997) Secretary of State appointed inspectors into Guinness takeover of

Argyll

Powers to compel production of documents and information

S tried for theft and conspiracy

Prosecution relied on transcripts of interviews with inspectors to refute S’s evidence

S applied to ECtHR

ECtHR held that exercise of inspectors’ powers did not infringe Article 6, because function was investigative rather than adjudicative

ECtHR was concerned with use of statements at S’s trial

Saunders (1997) - continued

The right not to incriminate oneself requires the prosecution to prove the case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused

The right does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers but which has an existence independent of the will of the suspect such as, inter alia, documents acquired pursuant to a warrant, breath, blood and urine samples and bodily samples for the purpose of DNA testing

The right is not confined to statements of admission or wrongdoing, but also to exculpatory remarks and statements of fact

The story so far – what could authorities request/ask?

Incriminating questions

Factual questions

Pre-existing documents

Orkem

Funke 1 1

Saunders

1Note: Funke concerned only the production of documents – so this is assumption.

Subsequent cases muddied the waters still further

Servès (1999) – follows Saunders; the key issue is coercion in defiance of the will of the accused

Heaney and McGuinness (2000) – compulsion to account for movements destroyed the essence of the privilege even where statement could not be used in evidence

JB v. Switzerland (2001) – another case involving a tax authority request for financial records; repeated requests for information were oppressive and violated JB’s right not to incriminate himself

Testimonial self-incrimination

Compare the US position under the Fifth Amendment

Fisher v. US – privilege protects only against incrimination by own compelled testimonial communication

US v. Doe - subpoena may have testimonial effect; compliance tacitly concedes existence of the documents and belief that they are the documents described

Scope for similar arguments under EU law?

Mannesmannröhren-Werke (2001 ) Clarification badly needed after Orkem, Funke, Saunders etc Commission requested information about Mannesmann’s

participation in alleged stainless steel tubes cartel Mannesmann declined to answer certain questions;

Commission imposed penalties; Mannesmann applied to CFI for annulment

Commission argued: ECtHR has never held that privilege applies in competition proceedings ECtHR has never held that privilege benefits legal persons privilege has been upheld only in the context of “classic” criminal cases the Commission is not a tribunal to which Article 6 applies

Mannesmannröhren-Werke (2001) - continued CFI somewhat disingenuously claimed that ECJ in Orkem had merely

considered the possibility of the application of Article 6 ECHR to Commission proceedings

Regulation 17 contained no express right to silence Necessary to consider whether certain limitations on the Commission’s

powers were necessary to preserve the rights of the defence A right to silence would constitute an “unjustified hindrance” to the

Commission’s performance of its tasks Useful clarification of Orkem - privilege applied to requests for:

a description of the subject of meetings and of decisions adopted a description of the relationship between a series of agreements and the

decisions adopted at various meetings

Requests went further than the merely factual and required an analysis of the nature of the agreements

Mannesmannröhren-Werke (2001) - continued CFI then turned to Mannesmann’s argument that Article 6

allowed it not to reply to factual questions (Saunders – although not clear that M cited the case) and to refuse to produce documents (Funke)

CFI held that M could not rely on Article 6 ECHR before the CFI

ECHR rights mean what the CFI says they mean, not what the ECtHR says they mean

CFI moved the goalposts?

What scope for national courts to apply ECHR? National courts applying national rules – relative freedom, although

Regulation 1 limits scope of exclusive application of national law

National courts exercising supervisory jurisdiction in EU investigations are permitted to ensure respect for national procedural guarantees – Hoechst

What does this mean?

Mischo AG in Roquette – merely the national rules designating the relevant court

ECJ in Roquette – case law of the ECtHR, including Funke

Commission in Regulation 1 – purports to codify Hoechst, but omits reference to national procedural safeguards

The UK approach – R v Herts CC, ex parte Green (2000) Herts CC requested information on clinical waste under s71(2) EPA Green argued that as s71(2) EPA implemented EU waste directive, it

should be interpreted in accordance with EU principles, including principles derived from ECHR, particularly Article 6

House of Lords considered that judge in a prosecution under EPA would be required to consider whether to exclude compelled evidence

Purpose of investigative powers was wider than merely securing evidence for prosecution

Rationale of Saunders is fairness of trial Council’s request was not adjudicative, so Saunders did not apply

OFT v. X (2003)

Application for a warrant

Self-incrimination not expressly considered

But Morison J expressed view that privilege did not extend to purely factual information

Lower level of protection for businesses than individuals

Graphite Electrodes – CFI (2004) SGL Carbon argued that it should be given credit for answering

questions that required it to incriminate itself – ie. that the Commission had no power to compel it to answer

CFI noted that ECJ had not modified its position in Orkem following Funke, Saunders and JB

Requirement to provide factual information and pre-existing documents did not infringe Article 6

Requests for object and results of meetings did infringe Article 6 However, requests for protocols, working documents, notes, conclusions

planning and discussion documents and price increase implementation projects did infringe Article 6

Not at all clear how CFI distinguished between the two types of document

Graphite Electrodes – AG’s Opinion (2006)

CFI failed to address distinction in case-law between documents and answers to questions

CFI’s reasoning was inherently contradictory – Strasbourg cases deal with classic criminal proceedings against individuals; rights extended to undertakings are more limited

Request for documents is not inherently self-incriminating – likelihood may still be rebutted by other evidence

A balancing exercise between rights and enforcement

Conclusion

Person under investigation entitled not to answer incriminating questions (Orkem)

Not entitled to refuse to answer factual questions (SGL Carbon, OFT v. X) but this is contrary to Saunders

Not entitled to refuse to produce documents (Saunders, SGL Carbon) but conflicts with Funke and JB

In practice, best course of action is often to co-operate/seek leniency, rather than insist on legal rights