Czech Republic: Access of third parties to the administrative file under recent case law
→ Jitka Linhartová
The Supreme Administrative Court and Regional Court in Brno released two decisions that are inconsistent with existing practice. The courts held that under certain circumstances third parties may have some rights that according to the Administrative Order belong to the parties only, including access to the administrative file.
Current practice of the Czech Competition Authority
According to Section 38 paragraph 1 of the Czech Administrative Code, parties to proceedings and their representatives have the right to access the administrative file, even after the decision has been issued.
Third parties are allowed to access the file only if they have proven a legal interest or other serious reason. At the same time, any right of the parties to the proceedings, other persons involved or public interest must not be infringed (see Section 38 paragraph 2 of the Administrative Code).
In its earlier practice, the Czech Competition Authority (CCA) did not allow anyone besides the parties to the proceedings to access the administrative file. With its argumentation based on the two above paragraphs, the CCA always turned down any application of the third party asking for access to the administrative file due to lack of serious reason, legal interest or public interest (legitimate interest). The CCA never considered any third-party interests to be legitimate; therefore, it never enabled any third party access to the file. This approach was subsequently confirmed several times by the administrative courts.
With respect to the recently issued judgments relating to the CCA’s procedure, however, the CCA must reconsider its current approach.
New case law
The first to break the CCA’s practice was the Supreme Administrative Court (the SAC) with its judgment 9 Afs 29/2012 – 53, dated 28 March 2013. In this judgment the SAC stated “should a legitimate interest or another serious reason of a third party to gain access to the administrative file be sufficiently proven, the administrative authority shall only assess whether the access might infringe any right of the parties to the administrative proceedings or any other affected parties or public interest.”
This means that a third party is entitled to claim access to the administrative file, as it is based on the general duty of the administrative authority to allow the parties to exercise their rights (see Section 4 paragraph 2 of the Czech Administrative Code). This was approved by the Regional Court in Brno by its judgment 29 Af 92/2012-161, dated 25 June 2013. However, once the third party claims its right of access to the administrative file, it must also prove it has a legitimate interest. The third party bears a burden of proof. The CCA is only entitled to consider whether the legitimate interest of the third party is given and proved.
What should be done in order to prove such a legitimate interest? The Supreme Administrative Court expressly declared in its ruling that one of the general elements of legitimate interest is the active approach of the applicant to access to the administrative file. The active approach shall be understood as conduct initiating appropriate proceedings before the CCA, i.e., filing the complaint to initiate proceedings or revision of the precedent proceedings or submitting objections to the notified transaction. Such an activity by a third party demonstrates its concern about distortion of competition.
The importance of being or not being granted access to the file is increased if the evidence on which a claim for compensation could be based cannot be obtained by any other means. The Court of Justice of the European Union also dealt with this issue in case C-536/11, dated 6 June 2013.
Even if the third party proves its legitimate interest and the CCA approves that any right of the parties to the proceedings or other affected parties (e.g., targeted company in concentration proceedings) cannot be infringed by the access of the third party, the CCA is obliged to grant the third party access to the administrative file. All conditions set by Section 38 paragraph 6 of the Administrative Code must be strictly followed if the administrative file is accessible to the third party. This means that all confidential information, such as business secrets, must not be revealed to the third party. Any party having access to the file can only view the documents without any business secrets or non-confidential versions of the documents that originally contained business secrets. For this reason it is necessary to provide the CCA with a non-confidential version of the filing and its annexes from which all business secrets as well as all otherwise sensitive information shall be properly removed.
This new obligation raises many questions. It definitely creates a lot of work for the CCA, since they will have to (i) assess the legitimate interest of every third party claiming its existence and (ii) ask parties to the proceedings and every person submitting any documents to the CCA for non-confidential versions. Since the CCA will be responsible for any leak of information, the officials will be very cautious. They might allow access to the file, but with as little information as possible. The whole process, however, would cost the CCA time which they could otherwise spend investigating competition cases. It needs to be borne in mind that once there are no competition decisions, there are no third-party claims at all.