The Competition and Markets Authority v Concordia International RX (UK) Ltd

An application to vary or discharge a warrant under section 28 of the Competition Act 1998 is an inter partes rehearing, analogous to the return date for a freezing or search order. The court must decide whether the statutory conditions remain established on the evidence before it.

Material protected by public interest immunity may be disclosed to the judge on the original ex parte application, but it cannot ordinarily be used as a closed evidential basis for maintaining the warrant against the respondent. Without specific legislative authority, a confidentiality ring is not an adequate substitute. The appropriate procedure is to identify and adjudicate public interest immunity claims, exclude protected material from the rehearing, and provide the respondent with any safe gist where possible.

The Competition and Markets Authority obtained, without notice, a warrant under section 28(1)(b) of the Competition Act 1998 against Concordia International RX (UK) Ltd. The warrant was executed and Concordia applied to vary or partially discharge it.

The CMA relied on sensitive material that had been placed before the judge who granted the warrant but withheld from Concordia. The central issue was whether that material could be considered by the court at the inter partes challenge, whether it could be disclosed through a confidentiality ring, or whether it had to be excluded following a public interest immunity determination.

1. Nature of the application. An application to vary or discharge a section 28 warrant is to be treated as a return-date hearing and therefore as a rehearing. The court must determine whether, on the evidence then before it, the statutory conditions for maintaining the warrant are satisfied. The respondent is not required simply to prove that the original warrant was wrongly issued.
2. Disclosure and public interest immunity. The respondent has a prima facie right to see the material relied upon for the warrant. That right is qualified by public interest immunity. Public interest immunity is ordinarily an exclusionary rule: material that is protected is unavailable both to the opposing party and to the court.
3. Closed material. The CMA’s proposed procedure, under which protected material would be considered by the judge but withheld from Concordia, was rejected. That would amount to a closed material process in an inter partes hearing. Following Al Rawi v Security Service [2011] UKSC 34, such a process requires legislative authority. The different factual context in Haralambous v St Albans Crown Court [2016] EWHC 916 (Admin) did not justify applying that approach here.
4. Confidentiality rings. A confidentiality ring was unsuitable. It would prevent external lawyers from obtaining instructions from Concordia and would not provide a fair means of testing the material. The approach was also inconsistent with Somerville v Scottish Ministers [2007] UKHL 44 and the reasoning in AHK v Secretary of State for the Home Department [2013] EWHC 1426 (Admin).
5. Proper procedure. The preferred procedure was the CMA’s full disclosure to the original judge, followed by identification and adjudication of public interest immunity claims. Protected material must then be excluded from the inter partes rehearing. The CMA should identify the proposed redactions at the outset and, where possible, provide a safe gist.
6. The application was therefore to be determined on the basis of material not protected by public interest immunity, subject to the judge being satisfied that the redactions were justified and the CMA being permitted to provide an affidavit explaining any permissible gist. The precise consequential order was adjourned for further argument.

First-instance decision determining the procedure for Concordia’s application to vary or partially discharge the warrant. The judgment records that Haralambous v St Albans Crown Court [2016] EWHC 916 (Admin) was then under appeal, but that appeal was not determined in this judgment.