Competition Commission v BAA Ltd & Anor

Apparent bias is assessed through the fair-minded and informed observer, who considers all the true circumstances rather than an objector’s assumptions. A professional adviser’s connection with a pension fund did not create apparent bias merely because local authorities connected with the fund owned an interested airport operator.

Where an apparent conflict arose only after provisional conclusions had been reached, it did not automatically contaminate the final decision of the remaining tribunal members. The issue remains fact-sensitive. Waiver requires clear and unequivocal action with knowledge of the essential facts, not every available detail.

The Office of Fair Trading referred the supply of United Kingdom airport services to the Competition Commission under section 131 of the Enterprise Act 2002. The Commission’s panel found adverse effects on competition arising from BAA’s common ownership of specified airports and required divestitures.

BAA appealed to the Competition Appeal Tribunal under section 179 of that Act. It alleged apparent bias because Professor Moizer, a panel member, advised the Greater Manchester Pension Fund, which later contemplated participating with Manchester Airport Group in a bid for Gatwick. The Tribunal quashed the relevant parts of the Commission’s report and remitted the matter. The central issues on appeal were the timing and effect of apparent bias, contamination of the remaining panel members, and waiver.

1. Appeals allowed. The Court restored the Commission’s decision. The Competition Appeal Tribunal had been wrong to find that Professor Moizer was apparently biased before 2 December 2008 and wrong to find that the final Commission decision was contaminated.

2. Applying the test in Porter v Magill, [2002] 2 AC 357, the Court assessed the matter from the standpoint of a fair-minded and informed observer who knew the true legal and factual position. The Tribunal had wrongly assimilated Professor Moizer, the Fund, the local authorities and Manchester Airport Group. His contractual and professional relationship was with the Fund, whose decision-makers owed fiduciary duties to its beneficiaries, not with the airport operator or the authorities. Before 2 December 2008, he had no reason to believe that the Fund might participate in a Gatwick bid. The connection was too remote to create a real possibility of bias.

3. The Tribunal was, however, correct that apparent bias in favour of the Fund arose after Professor Moizer learned of its likely participation in a Gatwick bid. BAA did not have to prove that the apparent bias had an operative effect. That would improperly conflate apparent bias with actual bias.

4. Apparent bias affecting one member does not invariably infect the whole decision-making body. The inquiry is fact-sensitive. Here the provisional findings and remedies pre-dated the conflict, Professor Moizer’s subsequent involvement was limited, he was quarantined and later withdrew, and the final report was signed by the other five members. A fair-minded and informed observer would not see a real possibility that the final decision was tainted.

5. The Court also upheld the Tribunal’s conclusion that BAA had not waived its objection. Waiver required clear and unequivocal action with knowledge of the essential facts. BAA’s evidence of prior ignorance was sufficient. Its request for further information before electing whether to object was legitimate, and the Commission’s delayed response did not provide all essential information.

• Court of Appeal (Civil Division) — allowed the appeals and restored the Competition Commission’s decision: [2010] EWCA Civ 1097 .

• Competition Appeal Tribunal — allowed BAA’s apparent-bias appeal, quashed the relevant findings, decisions and reasoning in the Commission’s report, and remitted the matter to the Commission by an order of 25 February 2010.