Bloomberg News

EU Court’s Quest for Faster Justice May Deny Companies a Hearing

October 31, 2012

The European Union’s top court will deny countries and companies such as Google Inc. and Telefonica SA (TEF) the automatic right to oral hearings in a drive to speed up rulings at the clogged-up tribunal.

The two companies along with Italy may be among the first affected by the overhaul at the EU Court of Justice -- designed to trim last year’s 15.4 month average delay for decisions. The changes came into force today.

“If there’s no hearing, it’s a lot faster, that is clear,” said Verena von Bomhard, a lawyer at Hogan Lovells LLP, who has represented Anheuser-Busch InBev NV (ABI), the world’s biggest brewer, at the EU courts. Going ahead without a hearing may cut the time from filing a case to a ruling by four to six months, she said.

Decisions at the Court of Justice can be the final word across the EU on the legality of gambling monopolies, the scope of pharmacy ownership laws or cases concerning the euro area’s permanent bailout fund and the European Central Bank. Competition cases remain the dominant subject of appeals.

Telefonica’s appeal against a 152 million-euro ($197 million) antitrust fine could go ahead without an oral hearing as a result of the changes. Others affected may include Spain, in a local court’s request for guidance in a data protection dispute concerning Google (GOOG:US), and Italy, which is clashing with the European Commission over state aid. The ongoing trademark disputes between AB InBev and Budejovicky Budvar NP may also move faster in the absence of hearings.

Going forward, parties will have to give a reason why they’d like a hearing and the court can refuse. Decisions by the court on whether it plans to hold a hearing in a case are not public. Any pending cases will be affected by the new rules.

Oral Hearing

Cases before the EU court normally consist of a written part and an oral part. Under the written process, which isn’t public, parties submit their arguments and the court may ask further questions. The oral hearing is the final step before the court’s decision, which normally follows a few months later. In some cases, an advocate general issues a non-binding opinion before the court’s decision.

The overhaul “will allow the Court to concentrate its resources on those hearings which will bring added value to the handling of a case,” the court said in a statement.

Lawyers say the changes may affect the quality of rulings.

“It’s better to hear the concerns of your judge during a hearing and have an opportunity to explain things than discovering in the judgment that there was a misunderstanding,” said Denis Waelbroeck, a partner specializing in competition and EU law at Ashurst LLP in Brussels.

Brief Remarks

Attorneys have from 15 minutes to 30 minutes to argue their main points in a hearing, followed by the possibility of questions from the bench and an opportunity at the end to make brief concluding remarks.

“Speaking as a common lawyer, a hearing is the most crucial part of the process,” said Robert O’Donoghue at London- based Brick Court Chambers. “Looking at the papers cold only gets one so far.”

As the EU has expanded, the court’s case load has steadily increased, rising to 688 new cases last year from 581 in 2007. Cartel cases can trigger a long series of court hearings for separate companies or subsidiaries, each lasting as long as a day and often leading to repetitions of case details and arguments.

Outside World

Another casualty of the revamped rules of procedure are the court-written summaries of the parties’ main arguments -- documents that often provide the outside world’s only glimpse into cases that may set precedents across the 27-nation EU.

Eliminating the hearing report “will have a positive impact both on the length of proceedings and on the use of the Court’s resources,” the tribunal said.

In cartel disputes involving as many as 15 companies with overlapping arguments, it’s useful to look at the reports for the hearing in the other cases ahead of your own hearing, said Axel Schulz, a competition lawyer at White & Case LLP in Brussels.

“It’s a bit of a double-edged sword,” said Schulz. “Probably the court thought that it takes a lot of resources to produce these reports and nobody is really looking at them. It scrapped them, instead of asking how we can improve them.”

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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