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Civil Aviation Act 2012

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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