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Competition Law: An Exception to Human Rights?

Regulators and courts in common law jurisdictions around the world are being given significant and increasing powers to impose financial penalties without traditional criminal law safeguards. The most successful assault on the ramparts in recent decades has been in the area of economic crimes. Competition law has been particularly susceptible to arguments that traditional safeguards should be discarded to aid regulators in securing convictions. This article considers the limitations human rights law places on the ability to impose financial penalties. Following Hong Kong's Court of Final Appeal, in the securities and futures context, the Competition Tribunal has held that competition proceedings seeking financial penalties constitute a criminal charge and that human rights law requires the competition regulator to prove its case beyond reasonable doubt. This raises the question whether other jurisdictions might reconsider their approach to cases involving financial penalties, both in competition law and other contexts. At the same time, the Tribunal has rejected other traditional criminal law safeguards and related human rights protections, raising the question whether they are separable when hearing cases involving a criminal charge. This article seeks to address these questions: • firstly, by reviewing the principles established in Koon, the high-water mark in how far common law courts have been prepared to go in articulating the constraints human rights laws place on the power of the state to impose pecuniary penalties; • secondly, the impact the Koon decision had on the structure of Hong Kong's competition law regime; • thirdly, summarising early enforcement under the Hong Kong competition regime, both at the investigation and prosecution phases, contrasting standard criminal investigation processes with those adopted by the Competition Commission (Commission), and the Competition Tribunal decisions to date, which have upheld the principles set out in Koon while pulling back on other traditional criminal law safeguards; • fourthly, revisiting the historical development of traditional criminal law safeguards in the common law - the prosecutorial burden of proof beyond reasonable doubt, the presumption of innocence, privilege against self-incrimination, the right to silence, the prohibitions on hearsay - and why they are critical to our adversarial system and inseparable in cases involving a criminal charge; • fifthly, reviewing how these safeguards have been under attack in common law jurisdictions around the world in recent decades, with competition law being one of the most susceptible targets, giving an overview of relevant case law, legislative materials, law reform reports and other commentary from Canada, the U.K., Australia, New Zealand and the U.S., and contrasting the approach being taken in Hong Kong since Koon; and • finally, looking at the argument frequently made to justify the casting aside of these safeguards, whether competition law is exceptional, such that it justifies a different approach when prosecuting for financial penalties.