The delicate balance of maintaining confidentiality, witness anonymity and disclosure in competition trials
Introduction
In the case of Competition Commission
v Atal Building Services Engineering Ltd and Others [2022] HKCU 4231, the Competition
Tribunal (the “Tribunal”) considered
the legal principles of treatment of confidential information under the
Competition Ordinance (the “Ordinance”),
inclusion or exclusion of a party in a confidentiality ring and witness anonymity
etc. The court opines that obtaining confidentiality orders is not to be
mistaken as routine and easy.
Background
The Competition Commission (“Commission”)
commenced proceedings against the Respondents by an Originating Notice on 16
June 2022 (the “Originating Notice”).
In issue was the orders dealing with redaction of information in the
Originating Notice and the terms of an order to establish a confidentiality
ring to which limited circulation of disclosed documents will be produced.
Statutory regime
in the Ordinance
At the outset, the Court stated that the Ordinance established the Commission to
investigate possible breaches of the First and Second Conduct Rules and gives
the Commission powers to require persons to provide it with information. Such
information, however, may legitimately be considered confidential (e.g. business or trade secrets) by the
provider or the Commission itself. The Ordinance contains in Part 8 a regime for the Commission or other person to seek
an order from the Tribunal which restricts distribution of information to the public
or to respondents to proceedings:
1.
Section 123 of the Ordinance defines what constitutes “confidential
information”;
2.
Section 124 imposes on the Commission a duty to
establish procedural safeguards to prevent unauthorised disclosure of
information;
3.
Section 143(1) provides that the Tribunal has all the powers, rights and
privileges of the Court of First Instance with respect to the production and
inspection of documents;
4.
Section 151 empowers the Tribunal to order a person
not to publish or otherwise disclose any material the Tribunal receives.
Consistently, rule 37(1) of the Competition
Tribunal Rules (Cap 619D) allows the Commission to make an
application to the Tribunal, as it has done in this case, for an originating
notice, or part of it, to be redacted on grounds of confidentiality if it is “intended to be filed, served or otherwise
disclosed…..”.
Redaction of
confidential information and confidentiality circles
The Tribunal
visited the extensive decision of Taching
Petroleum Company Ltd v Meyer Aluminium Ltd and Shell Hong Kong Ltd v Meyer
Aluminium Ltd [2019]
HKCT 1 which guides the Tribunal in making confidentiality
orders. The principles in relation to ordering a confidentiality ring include, inter
alia, the followings:
1.
The starting point in any civil proceedings is that it is the party who
will be affected by a decision, not their advisers to decide how to advance or
respond to a case. Discovery is made to a party not their solicitors. This
allows the parties to litigate on equal footing and is a principle of natural
justice;
2.
It would be exceptional to prevent a party from having access to
information, which would play a substantial part in a case. A balance needs to
be struck between the need to preserve confidentiality and the principle of
natural justice;
3.
Cases involving private litigants and those involving a regulator such
as the Commission should be distinguished. The question is how much
confidential information provided to the regulator by third party for the
purpose of the regulatory function should be disclosed to the applicant;
4.
Mere confidentiality is not enough to justify restricting its
inspection. Confidentiality and sensitivity of information is to be proved by
evidence; and
5.
A staged approach to the use of confidentiality rings is necessary. As
issues crystallise and lawyers are able to make more informed decisions about
the relevance of documents, they can form a view on whether individuals from
clients not in the confidentiality ring need to see documents.
Ruling
(i)
Confidentiality ring
In the present case, the 5th, 6th
and 7th Respondents of this case are individuals and the Commission
seeks against each of them pecuniary penalties. It was explained in Competition Commission v Nutanix Hong
Kong Limited & others [2019] HKCT 2 that as the Tribunal was
invited to impose penalties, the proceedings involve the determination of a
criminal charge.
The Tribunal held
that the individual respondents need to know the contents of documentary
evidence before they can give instructions and they clearly need such
information to defend themselves against serious allegations of misconduct,
which is characterised as a criminal charge. The Commission has not
demonstrated a legitimate reason for preventing the 5th, 6th
and 7th Respondents to have access to such information
and therefore its suggestion that the individual respondents should be excluded
from the confidentiality ring is unsustainable. The Tribunal therefore included
the 5th, 6th and 7th Respondents in the confidentiality ring.
The Tribunal further
held that the same also applies to the boards of directors of the
corporate respondents. A company makes important decisions about its affairs by
resolutions passed by its board and it cannot do so if some directors are
deprived of relevant information. If the Commission wishes to argue that
limitations should be imposed on the information available to some of the
directors, it must adduce credible evidence to support whatever concerns it has
over making all information available to all board members. Nonetheless, no
evidence has been filed directed specifically to the scope of the proposed
confidentiality ring by the Commission.
(ii)
Witness anonymity
In this case, the Commission proposes that the names of all individual
mentioned in the Originating Notice other than the Respondents should be
redacted. Citing the case of R v Davis [2008] 1 AC 1128 which considers the practice of a court
authorising witness anonymity, the Tribunal outlined the preconditions which
must be satisfied before a witness anonymity order may be made:
1.
The measures to be specified in the order are necessary—(a) in order to
protect the safety of the witness or another person or to prevent any serious
damage to property, or (b) in order to prevent real harm to the public
interest;
2.
Having regard to all the circumstances, the taking of those measures
would be consistent with the defendant receiving a fair trial; and
3.
It is necessary to make the order in the interests of justice by reason
of the fact that it appears to the court that—(a) it is important that the
witness should testify, and (b) the witness would not testify if the order were
not made.
As for the burden of proof, it was held in R
v Davis that the use of the word “necessary” requires that the court
must be satisfied to the highest standard. ‘Probably’ necessary will not do.
The Tribunal therefore summarized the
principles from the case authorities that:
1.
there is the strong presumption that all evidence should be available to
a person, who has to defend a criminal charge;
2.
rendering evidence anonymous whether by hiding the identity of a witness
from a defendant (or in the present case a respondent) is exceptional; and
3.
a party seeking anonymity must adduce evidence that establishes that it
is necessary, not that it is probably necessary.
In this case, the Tribunal held that applications
to keep information confidential must be supported by evidence capable of
demonstrating that the restrictions sought are necessary but the Commission’s
evidence fell far short of satisfying this criterion. The Tribunal has the
impression that the Commission has erroneously assumed that obtaining
confidentiality orders is routine and easy. In particular, the Commission
proposes that the names of all the individuals mentioned in the Originating
Notice other than the Respondents are redacted with no attempt to distinguish
between them. This approach is held to be wrong and needs to be reconsidered.
Takeaway
This case shed light
on the factors that the Tribunal would take into account in ordering a
confidentiality ring in the context of an action by a regulatory body against
respondents involving a criminal charge. Credible evidence must be adduced to
justify inclusion/exclusion in a confidentiality ring. The Tribunal also
clarified that seeking confidentiality orders is not routine and easy as in particular,
a party seeking redaction of information has to satisfy the Tribunal to the
high standard of necessity.
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Important: The law and procedure on
this subject are very specialised and
complicated. This article is just a very general outline for reference and
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Published by ONC Lawyers © 2022 |