Code of practice for reporting panel members and specialist panel members

Introduction

1. The reporting functions of the Competition Commission ("the Commission") are to carry out investigations and make reports on matters referred to the Commission. The matters which may be referred to the Commission include mergers, monopolies and modifications of licences of regulated utility companies.

2. Part II of Schedule 7 to the Competition Act 1998 makes provision about the performance of the Commission's functions. With limited exceptions these functions of the Commission must be performed through a group of reporting panel members (and where appropriate, specialist panel members) selected by the Chairman of the Commission.

3. This code of practice applies to reporting panel members and specialist panel members ("Members").

Objectives of this Code

4. Commission reports can have considerable financial implications for parties. Moreover, acting on a reference will involve Members having confidential information, and will often involve Members having market sensitive information. It is therefore essential that the Commission maintains its reputation for fairness, independence, complete integrity and rigorous analysis.

General

5. Members must observe the highest standards of impartiality, integrity and objectivity in the performance of their functions.

6. Members must not use information obtained in the course of their functions for personal gain, nor seek to use the opportunity of public service to promote their private interests. They must observe the Commission's guidance on acceptance of gifts and hospitality.

7. The Commission must maintain its independence and impartiality as a matter of law and because its work is in the public eye. The requirements of independence and impartiality are different in principle. The provisions set out in paragraphs 8 to 15 below impose obligations on Members that are intended to assist the Commission to meet the requirements of independence imposed by the law on the Commission. The obligations imposed on Members in relation to impartiality are set out in the Commission's "Guidance on Conflicts of Interest". Members should note that no code or guidance can anticipate or set out all the circumstances in which the independence or impartiality of the Commission can be brought into question. Consequently, if notwithstanding this Code and the Guidance Members are in any doubt as to whether their activities might pose a risk to the Commission they should advise the Chief Executive of their concerns.

Requirements to ensure the independence of the Commission

8. From the end of September 2002, the Commission will maintain and will publish on its website a register of Members' interests. The register will identify each Member, and list each Member's current offices, employment, appointments, consultancies and any other similar outside interests. Shareholdings and similar interests are covered by the Guidance on Conflicts of Interest. The register must be comprehensive and up to date, and it is the responsibility of every Member to ensure that sufficient information is provided to the Chief Executive to enable the register to be maintained. The requisite information should be provided by the Member completing and returning the "New Interest" form whenever a Member pursues a new interest or there is a change in an existing interest. At the start of a reference, the attention of the parties to the reference will be drawn to the register of Members' interests.

9. All Members should ensure that in the pursuit of their outside interests they do not compromise the independence of the Commission. The Chief Executive should be notified if a Member has any concerns.

10. The pursuit by a Member of an outside interest that might compromise the independence of the Commission is a matter that the Chairman is obliged to take into account when considering the composition of any reporting group, and when selecting a Member to chair a group. It is also a matter that the Chairman is obliged to take into account when considering whether it is appropriate for a Member to remain a member of a group. In considering the composition of a group, the Chairman will take account of the sufficiency of the disclosure made by a Member as to the nature of any outside interest, as well as the nature of any undertaking provided by the Member or a third party to the Competition Commission.

11. The Chairman and Chief Executive are of the view that the independence of the Commission would be compromised if a Member were to pursue an interest (whether paid or unpaid) with a regulatory body holding competition powers in the United Kingdom or any part of the United Kingdom (bodies such as the Office of Fair Trading, OFGEM, the Office of the Rail Regulator, OFWAT, the Office of Telecommunications, Postcomm, CAA). Pursuit of such an interest is, therefore, not compatible with membership of the Commission.

12. A risk to the Commission's independence could follow from the pursuit by a Member of an outside interest (whether paid or unpaid) which involves the provision of advice or other services on competition and/or economic regulation issues.

13. In the circumstances outlined in paragraph 12 on receipt of the New Interest form, the Chairman and Chief Executive will assess the risk to the Commission's independence posed by the Member's pursuit of the interest in question. The Chairman and the Chief Executive will then consider whether any such risk can be alleviated by the provision of an undertaking by the Member and/or any third party. Where it is the view of the Chairman and the Chief Executive that the pursuit of an outside interest by a Member may give rise to a risk to the independence of the Commission, the Chairman will normally expect the Member to provide him with an undertaking. An undertaking might include an obligation upon the Member not to discuss a reference with another Member, not to attend certain meetings and social events of the Commission, not to disclose the working methods of the Commission, and a positive obligation to keep the Chairman and the Chief Executive advised of developments in the outside interest relevant to the independence and impartiality of the Commission. In some circumstances an undertaking given by a Member might include an obligation upon the Member to cease to pursue the outside interest if it is related to any reference or other matter before the Commission. Prospective group chairmen may be required to provide undertakings that are more extensive than those provided by other Members. The Chairman and the Chief Executive may also fix a date or event at which time the position of the Member is to be reviewed.

14. Members are advised that work of a competition or economic regulation nature will, where its subject matter falls or may fall under the legislation which governs the Commission's activities (primarily the Fair Trading Act 1973, the Competition Act 1998, the legislation governing the regulated utilities and, from 2003, the Enterprise Act), is normally considered to create a risk to the independence of the Commission.

15. Members are expected to act in a way which will not give rise to a risk that the appropriateness of their continued participation in any reporting group will be called into question.

Insider dealing etc.

16. During its investigations the Commission receives considerable quantities of information. The legislation under which the Commission acts, and the provisions of the Criminal Justice Act 1993 relating to insider dealing, impose duties not to disclose information obtained except in specified circumstances or for specified purposes. Members must comply with these rules.

17. The Criminal Justice Act 1993 also lays down rules about dealing in securities, and encouraging others to deal, when in possession of market sensitive information about those securities. Members must comply with these rules.

Travel and subsistence claims

18. Members must comply with the Commission's rules on claiming travel and subsistence expenses.

Acting on any reference

19. When approached by the Secretariat about working on any reference, a Member must disclose any potential conflict of interest in accordance with the Commission's "Guidance on Conflicts of Interest". Prior to appointment to reporting group, a Member will be asked to complete and return a "Conflicts of Interest" form to the Chief Executive .

20. The legislation under which any reference is made specifies the functions of the Commission under that reference. Members of the group acting on the reference are responsible for the conduct of the investigation and the conclusions set out in the report. In particular they are responsible for ensuring that:

i. they operate within the powers conferred by the relevant legislation;
ii. they perform the duties imposed on the Commission by that legislation; and
iii. they act in accordance with all applicable laws, including administrative law.

The staff of the Commission, which includes its legal advisers, provide assistance to the group.

21. The group may, subject to any special or general directions by the Secretary of State, determine its own procedures. The group must, however, have regard to the guidance issued by the Chairman. (NB. Under the Enterprise Act, the Chairman will be given power to make procedural rules for merger and market groups).

22. Members must perform their statutory duties with all due diligence.

23. Members acting on a reference must ensure that the group:
i. makes thorough, soundly based and fair assessments;
ii. produces a clear and well-argued report.

24. In order to minimise the burdens on parties, and to ensure that any adverse effects identified may be remedied as quickly as possible, Members must use their best endeavours to meet the timetable set for the investigation.

25. The Competition Act 1998 provides that a group, and any Member of a group, may consult any other Member of the Commission about any matter arising under a reference. However no such consultation should take place without the member concerned first checking with the Chief Executive that there is no conflict of interest, or any interest which might lead to a risk to the independence of the Commission. Other Members of the group can be informed of the outcome. Members should not discuss matters arising under a reference with other Members in other circumstances. (It is envisaged that the Chairman's procedural rules to be made under the Enterprise Act will make provision for related matters).

26. For Members to be able to perform their functions effectively, they have to be able to discuss issues arising under a reference freely, take initial positions and where appropriate change their minds. They must therefore be able to express views within the group openly, without fear that those views will be disclosed to the public, otherwise than in the report. Members must not refer to discussions which have taken place between members of the group outside the Commission.

27. If any Member has concerns about the propriety of any proposed action he/she should initially raise the matter with the chairman of the group. If the Member remains concerned he/she should raise the matter with the Chief Executive (who has joint responsibility for this Code of Practice with the Chairman).

28. Any contact with the media about any investigation should be conducted by the Chairman of the Commission, the chairman of the relevant group (or other Member of the group nominated by the group for that purpose) or through the Commission's press office. Members should not therefore in other circumstances discuss with the media any investigation or any matter arising from an investigation, or disclose to the media any information material to any investigation. They should inform the press office of any approach by the media about any investigation.

29. Members should not discuss on-going investigations or matters arising from them, with any person outside the Commission, other than in the course of a Commission hearing or meeting.

30. The function of the Commission is to reach conclusions on the matters referred to it. Once the report has been submitted the group has no further role. Save at the invitation of or with the permission of the Chairman, Members should state their conclusions in the report, and should not, whether before or after publication, comment on the conclusions, or on matters arising from them.

31. Members must have due regard for efficiency, effectiveness and economy, in relation to the investigation.

32. Members should exercise all due care in protecting information and papers obtained in the course of the investigation.

33. Once an investigation is complete no Member of the group which dealt with it should accept an assignment involving any of the parties in the UK, or join a team seeking business with them, for at least twelve months. If the possibility of such an assignment arises the Member concerned should consult the Chief Executive with a view to ensuring that a sufficient period has expired to avoid the Member appearing to be gaining a private advantage from Commission membership. This restriction does not extend to others in a Member's firm or company.

31 July 2002