Leniency applications and the documents attached to such applications have not, to date, been disclosed by the Competition Commission to third parties or respondents on the basis that the application and documents were (in the Commission's view) protected by legal privilege and also contained restricted information in terms of 14(1)(e) of the Commission's rules.
A recent judgment, delivered on 31 May 2013 by the Supreme Court of Appeal (SCA) in Competition Commission v Arcelormittal, significantly impacts this position. In summary, the SCA held that:
- although leniency applications are protected from disclosure by legal privilege (at the instance of the Commission), this may be waived by the Commission by making reference to the leniency application or the documents in a complaint referral affidavit;
- whether the privilege has been waived depends on the facts and a determination of whether the reference in a complaint referral affidavit is a bare or oblique reference, or substantial enough to be considered to waive the protection of legal privilege by implication. Once it is established that the Commission has waived its privilege, the entitlement to claim the information as restricted information is similarly waived; and
- the Competition Tribunal, if required, still determines whether information in the leniency application and the documents attached is confidential. The mere assertion of confidentiality does not make it so and information claimed as confidential should be carefully aligned with the definition of "confidential information" contained in the Competition Act. A respondent's confidentiality claim was criticised for referring to the consequences of disclosure, rather than the nature and economic value of the information over which the confidentiality was claimed.
Webber Wentzel partner Robert Wilson feels that the judgment presents two important challenges for the future:
- first, where the Commission initiates a complaint as a consequence of information disclosed to it in a leniency application, the Commission will need to strike a balance between, on the one hand, averring that the complaint was properly initiated because the Commission had a "reasonable suspicion of the existence of a prohibited practice" (following the SCA's judgment in Woodlands), and on the other hand the Commission should refrain from disclosing too much about the leniency application for fear of impliedly waiving the Commission's privilege to the leniency application. Arguably, bare reference to the fact of a leniency application without referring to the facts in the leniency application will not cross the line; and
- second, to comply with the Corporate Leniency Policy (CLP), a leniency applicant "must honestly provide the Commission with complete and truthful disclosure of all evidence, information and documents in its possession or under its control relating to any cartel activity". However, in the event of the Commission waiving its privilege to the leniency application, a civil damages claimant might more easily be able to obtain information relating to the leniency applicant than it could procure in respect of the other respondents. This would place the leniency applicant in a more disadvantageous position than the other respondents and could have a chilling effect on the CLP.
According to Robert Wilson: "The judgment also highlights the importance of properly claiming information as confidential and not merely relying on standard wording in a confidentiality claim. This means that firms will need to spend more time and resources on what is often viewed as an administrative task and of minor importance if they wish to preserve the confidentiality of their information."