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The privilege against self-incrimination in competition investigations 
 

Peter Willis

Partner

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 questions


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? 

  

  

  

Saunders 

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1 

1  

Funke 

  

  

  

Orkem 

Pre-existing documents 

Factual questions 

Incriminating questions 

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


Subsequent cases muddied the waters still further 

  • Serv�s (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?

Mannesmannr�hren-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

Mannesmannr�hren-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

Mannesmannr�hren-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
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