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Civil Aviation Act 2012

Appeals against licence conditions etc
Section 24: Appeal to Competition Commission: conditions of new licences

110.An appeal against a decision by the CAA under section 15 (granting licence) to include or not to include a licence condition may be brought by either the holder of the licence (the operator of the airport area), or a provider of air transport services (an airline) whose interests are materially affected by the decision. Such an appeal is made to the Competition Commission. “Air transport service” is defined in section 69.

111.The time limit for an application for permission to appeal is set out in paragraph 1(1) of Schedule 2. The application for permission to appeal must be made within six weeks of the CAA publishing the notice under section 15 of the decision to grant the licence.

112.The Competition Commission may refuse permission to appeal under section 24 only on one of two grounds. First, that the appeal is brought for reasons that are trivial or vexatious, or secondly, that the appeal does not have a reasonable prospect of success.

Section 25: Appeal to Competition Commission: modification of licence conditions

113.An appeal against a decision by the CAA to modify a licence condition may be brought by either the holder of the licence (the operator of the airport area), or a provider of air transport services (an airline) whose interests are materially affected by the decision. Such an appeal is made to the Competition Commission. “Air transport service” is defined in section 69.

114.The time limit for an application for permission to appeal is set out in paragraph 1(1) of Schedule 2. The application for permission to appeal must be made within six weeks of the CAA publishing the notice of its decision to modify the licence condition.

115.Permission to appeal may be refused on any of three grounds. First, that the appeal is brought for reasons that are trivial or vexatious reasons. Secondly, that the appeal does not have a reasonable prospect of success. Thirdly, that the appeal is brought against a decision relating entirely to a matter remitted to the CAA under an earlier appeal under section 24 or 25 and that it is brought on grounds that were considered, or could have been raised by the applicant or a relevant connected person, as part of that earlier appeal (see subsections (5) and (6)). “Relevant connected person” is defined in subsection (7).

Section 26: When appeals may be allowed, Section 27: Determination of appeal, Section 28: Determination of appeal: time limits and Section 29: Determination of appeal: publication etc

116.Section 26 states the circumstances in which the Competition Commission may allow an appeal under section 24 and 25. It may only do so to the extent that it is satisfied that the decision appealed against was based on an error of fact and/or that it was wrong in law and/or that an error was made in the exercise of a discretion. These are thus in practice the grounds on which a party could make an appeal.

117.Section 27 states what the Competition Commission must do if it does or does not allow an appeal under section 24 or 25 or allows only part of the appeal. Where the appeal is allowed (in whole or in part), it may quash the decision, remit the matter to the CAA for reconsideration and decision (in accordance with Chapter 1 and any directions it may give) or substitute its own decision for that of the CAA.

118.Section 28 stipulates the time limits within which the Competition Commission must determine an appeal. All of these are taken from the date on which the notice of the decision to grant the licence or the decision to modify the licence condition was published.

119.The standard time limit for determining an appeal is 24 weeks. This may be extended once by up to 8 weeks if the Competition Commission is satisfied that there is good reason to do so.

120.The Competition Commission may also extend the appeal period, by a period it considers appropriate, if there is an ongoing appeal to the Competition Appeal Tribunal which the Competition Commission thinks may be relevant to the appeal that has been made to it.

121.Subsection (9) of section 28 enables the Secretary of State, by regulations made by statutory instrument subject to annulment by either House of Parliament (see section 73(3)), to modify the time periods specified in section 28.

122.Section 29 states the procedures that the Competition Commission must follow after its determination of an appeal, including procedures for publication of the order which contains the determination. Subsection (6) of section 29 states the CAA must take the steps that it considers requisite for it to comply with the order.

Section 30: Procedure on appeals

123.The Competition Commission must have regard to the CAA’s duties as set out at section 1, in deciding an application for permission to appeal under section 24 or 25, in deciding an application for permission to intervene in an appeal and in determining an appeal, including in giving of directions under section 27.

124.The effect of subsection (4) is that Part 2 of Schedule 7 to the Competition Act 1998 does not apply to the Competition Commission when it carries out its functions under Chapter 1 of Part 1 of the Act.

Schedule 2: Appeals under sections 24 and 25

125.This Schedule applies to appeals to the Competition Commission in respect of conditions in new licences (or the absence of a condition in a new licence) and in respect of the modification of licence conditions.

Part 1: Permission to appeal

126.This Part of the Schedule provides the procedures applicable in relation to an application for permission to appeal to the Competition Commission under section 24 (conditions of new licences) or section 25 (modification of licence conditions). Permission may be granted subject to conditions. Permission must exclude consideration of matters considered as part of an earlier appeal or matters that could have been raised by the applicant (or a relevant connected person) in the earlier appeal, unless the Competition Commission thinks that there are compelling reasons not to exclude consideration of such matters (paragraph 2(5) and (6)).

Part 2: Intervention in appeal

127.This Part of the Schedule provides that any person with standing to appeal is eligible to seek permission to intervene in an appeal in support of the appellant(s) or the respondent. It sets out the procedures that apply. Permission to intervene is to be granted only where the Competition Commission is satisfied that allowing the intervention is necessary or desirable for the proper resolution of the appeal.

Part 3: Automatic suspension of condition of new licence or modification

128.This Part of the Schedule provides for the automatic suspension of relevant financial arrangements conditions when they are appealed under section 24 (conditions of new licences) or section 25 (modification of licence conditions). “Modification” includes adding a relevant financial arrangements condition to an existing licence as well as altering an existing financial arrangements condition. A “relevant financial arrangements condition” is one that is subject to an exception relating to financial arrangements entered into by the licence holder (or a connected person) pre-dating the coming into force of section 3. It also includes financial arrangements effected after section 3 came into force where they are made pursuant to other financial arrangements affected before that date. The purpose of this provision is to ensure that a relevant financial arrangements condition included in a new licence does not have effect until the appeal against the decision is determined or withdrawn, or to preserve the current position where the removal or restriction of an exception to such a condition in an existing licence is proposed. The underlying reason is that without such a provision an appeal may prove nugatory where it cuts across existing financial arrangements.

Part 4: Application for suspension of condition of new licence or modification

129.This Part of the Schedule provides the procedures in relation to applications for a direction suspending the effect of a decision under section 15 to include a licence condition and for applications for a direction suspending the effect of a decision under section 22 modifying a licence condition. It also sets out the test which must be met before a direction may be given (see paragraphs 11(2) and 14(2)).

Part 5: Appeals

130.This Part of the Schedule provides the procedures applicable to the Competition Commission in relation to appeals under section 24 (relating to conditions of new licences) and section 25 (relating to modification of licence conditions).

131.Paragraph 21 of Schedule 2 provides the CAA with limited additional powers when a licence condition or modification is remitted back to the CAA (see section 27(2)(b)). In particular, paragraph 21(2) provides that the CAA may make a licence modification on reconsidering the matter effective on or after the date on which the original decision took effect or would have taken effect but for its suspension, provided the licence holder agrees. This will allow the CAA to address any injustice that may have arisen through licence enforcement measures taken in respect of an obligation which in the light of the Competition Commission’s decision should never have been imposed on the licence holder.

132.Paragraph 21(3) to (5) empowers the CAA to make adjustments to any new or altered price cap imposed in consequence of the Competition Commission’s determination where it transpires that the charges made by the licence holder during the appeal period were higher than the maximum that would have been allowed if the CAA’s original decision had accorded with that of the Competition Commission’s determination. In such a case, the CAA in determining the new price cap is empowered to put the licence holder in the position it would have been in if, during the appeal period, it had in fact charged at the revised (lower) price cap. There is flexibility to allow the CAA to set an adjusted price cap so the licence holder cannot retain the benefit of the excess charge.

133.For example, the licence holder charged airlines £10 per passenger during the appeal period. The Competition Commission’s decision leads the CAA to conclude that a price cap of £7.50 per passenger is appropriate for the entire period of the appeal and subsequently. The new price cap could be set below £7.50 per passenger to the extent necessary so the licence holder does not retain all or some of the £2.50 excess charge per passenger during the appeal period.

134.Paragraph 21(3), (6) and (7) provides the CAA with similar powers to make appropriate adjustments where the Competition Commission’s decision on appeal leads to a higher price cap than the charges made during the course of the appeal.

135.Paragraph 22 provides the Competition Commission with similar powers to those applicable to the CAA under paragraph 21 of Schedule 2, where the Competition Commission substitutes its decision for that of the CAA (see section 27(2)(c)).

Part 6: General

136.This Part of the Schedule sets out general procedures applicable to the Competition Commission in carrying out its functions under Chapter 1 (including Schedule 2). It makes provision for the receipt of new evidence in certain circumstances. It provides that an application for permission to appeal or an appeal, or permission to intervene or an intervention, may only be withdrawn with the Competition Commission’s consent (at paragraph 30). It includes provisions requiring the Competition Commission to make a costs order to recover its own costs and empowers it to make costs orders between the parties and former parties to an appeal (at paragraph 32). Paragraph 33 enables the Secretary of State, by regulations, to modify the time periods in Schedule 2.

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