The privilege against self-incrimination in competition investigations

1
The privilege against self-incrimination in
competition investigations

• Peter Willis
• Partner
• Competition, EU and Trade Group

27 January 2005
2
Overview

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

3
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

4
Article 6 ECHR

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

5
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

6
Orkem questions
7
Funke (1993)

• French customs officers found documents at Fs
  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

8
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 Ss 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 Ss
  trial

9
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

10
The story so far what could authorities
request/ask?
Incriminating questions Factual questions Pre-existing documents
Orkem ? ? ?
Funke ?1 ?1 ?
Saunders ? ? ?
1 Note Funke concerned only the production of
documents so this is assumption.
11
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 JBs right not to incriminate himself

12
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?

13
Mannesmannröhren-Werke (2001 )

• Clarification badly needed after Orkem, Funke,
  Saunders etc
• Commission requested information about
  Mannesmanns 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

14
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 Commissions powers were necessary to
  preserve the rights of the defence
• A right to silence would constitute an
  unjustified hindrance to the Commissions
  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

15
Mannesmannröhren-Werke (2001) - continued

• CFI then turned to Mannesmanns 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?

16
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

17
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
• Councils request was not adjudicative, so
  Saunders did not apply

18
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

19
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

20
Graphite Electrodes AGs Opinion (2006)

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

21
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