The Civil Division of the Court of Appeal handed down judgment in the case of Competition Commission v BAA Limited [2010] EWCA Civ 1097 on the 13th October 2010. The case concerned apparent bias alleged against a member of a panel established by the Competition Commission to investigate airport services and possible adverse effect on competition.

The panel, having found an adverse effect on competition, proposed a package of solutions, including divestiture of some airports operated by the respondent. One member of its panel acted as an external adviser to a fund. Following the announcement of the respondent’s intention to sell one airport, the fund met to consider possible purchase options. The panel member was not involved in these discussions, and the possible conflict was only brought to his attention in a phone call from the fund on 2nd December 2008. Once a formal bid was made for airport by a consortium containing the fund on 20th January 2009, the member had no involvement with sale matters. The respondent requested by letter further information on the position of the panel member on 6th February 2009. The panel member formally stood down on 3rd March 2009. The eventual sale was to a purchaser with no connection to the fund.

The respondent brought the issue before the Competition Appeal Tribunal (CAT), alleging apparent bias. The CAT considered the issue, and also whether the respondent had waived its right to object. Finding that it had not waived its right, the CAT upheld the finding of apparent bias, deciding that in the view of the fair-minded observer, there was a real possibility that the panel member could influence the investigation and the investigation could be affected by bias.

Before the Court of Appeal, the appellant submitted that the connection between the panel member and the fund was too remote. In the alternative, that there was no operative effect/contamination or that the respondent had waived its right to object.

Setting out the law on apparent bias the court referred to legal principles in several cases including Porter v Magill [2002] 2 AC 357 and the difficulties in proving apparent bias set out in Locabail (UK) v Bayfield Properties Ltd [2000] QB 451. Reviewing the facts of the case, particularly that the member’s connection was with the fund and not the other members of the consortium, the court determined that any fair-minded observer would consider his connection too remote and untainted by apparent bias prior to 2 December 2008.

Secondly, the court considered whether any apparent bias from 2nd December onward could have had no operative effect as a decision to sell had been made in September 2008. The court referred to the seven week period between the conflict of interest and panel member being quarantined. Recognising that any involvement was small, the court nonetheless found that it was relevant to the question of operative effect. The court agreed with the submission of the respondents that it would blur the tests for apparent and actual bias to require proof of operative effect.

Considering whether the eventual decision could have been contaminated by any apparent bias of the member, the court agreed with submissions for the appellant that a fair-minded observer would find no contamination occurred as the views of the panel did not change significantly after the publication of provisional findings or the conflict of interest became apparent.

Reviewing whether the respondent had waived its right to object, the court highlighted that its decision would focus on the possibility of waiver only from December 2008. Having heard the evidence of staff of the respondent, the Court of Appeal accepted the finding of the CAT that the evidence was sufficient and no higher standard should be imposed. Considering whether the letter was a legitimate attempt to establish information before taking action, the court determined that the investigation being at an advanced stage, the decision by the respondent to consider its position before taking action did not amount to a waiver.

Allowing the appeal on the finding of apparent bias before 2nd December 2008, and also on the issue of contamination, the appeals relating to operative effect and waiver were rejected.