Debunking myths about the FTC’s jurisdiction

Beyond an ad hominem title that may not necessarily be attributable to Darron Thomas, his response to my ‘Clarifying the Jurisdiction of the FTC’ bears a staunch resistance to reading primary as opposed to secondary research material.

I have suggested a careful reading of the cases on the matter (the primary research material), but I will go further to illustrate since it appears this will not be done.

In his response to mine Mr. Thomas states the following:

For evidence on entities, sectors or sections of the economy of Jamaica that are not bound by the FCA, see the ruling in the case between the General Legal Council and the FTC. Need more be said about the FTC’s ability to enforce the FCA?

This overbroad statement betrays either a misunderstanding of the case or that the case was not read carefully or at all.

The case of the General Legal Council v. FTC addressed the narrow issue of whether the Legal Profession (Canons of Professional Ethics) Rules made pursuant to the Legal Profession Act are governed by the Fair Competition Act, 1993. The case arose from a suggestion by the FTC that some of the Canons of Professional Ethics, in particular those relating to the setting of fees for legal services, may contravene section 35 of the FCA as  constituting a conspiracy between the Government of Jamaica and the General Legal Council to restrain competition unduly.

At bottom, the case is really about whether the General Legal Council can prescribe fees for lawyers in the provision of their services without being subject to the provisions of the FCA or the jurisdiction of the FTC on this particular issue.

That is where any general statement about the case should end as regards the reference to ‘sectors or sections of the economy’. It is not a decision that can be interpreted as holding that the FCA does not apply to legal services or to the legal profession. Such a broad holding cannot be read anywhere in the decision. One cannot seriously doubt that a claim for misleading advertising could be brought against an attorney; neither could one seriously question the applicability of the FCA in respect of legal firms colluding to set fees, engaging in bid rigging, or cartelization with impunity.

To further clarify the position it is important to set out two of the important holdings. First, the court held that the General Legal Council in performing its statutory duties is not subject to the jurisdiction of the FTC. There are no surprises here if a body is authorized by statute to do something and that statute is not later repealed. It should come as no surprise also if conduct not authorized, permitted or required by the Canons of Ethics prescribed by the General Legal Council is subject to scrutiny under another piece of legislation.

We can agree that encouraging misleading advertising, collusion, bid rigging and cartelization among lawyers is not a part of the statutory duty of the General Legal Council.

Second, the court held that the Legal Profession (Canons of Professional Ethics) Rules, ‘Canons’, are not agreements or arrangements within the meaning to be accorded the term ‘agreements’ in the FCA because the General Legal Council, a statutory body, ‘cannot agree with itself and there is no statutory requirement nor any evidence to support an agreement by the Council with any other person or body…as a prerequisite to prescribing the Canons’.

The case is therefore not saying that agreements between lawyers that could injure competition are excluded from the FCA or the jurisdiction of the FTC. Moreover, it is not saying legal services or the legal profession is not or cannot be governed by the FCA.

Again, on the question of enforcement jurisdiction we suggest a reading of sections 45-47 of the FCA which permit bifurcation of investigative and adjudicative functions within the framework of the FCA. The Court is empowered to provide appropriate relief if it finds a breach of the FCA. To suggest that the court cannot enforce the provisions of the FCA unless there is an amendment is neither accurate nor in accordance with subsequent decisions of the court as I indicated in my earlier response.

A position paper or an opinion is not a sufficient substitute for the actual material to be relied on for an evaluation of a legal issue when that material is available. The question of the FTC’s jurisdiction has drawn comments ad nauseum from within and without the legal community since the decision of the court of appeal in Jamaica Stock Exchange v FTC.

The decision can doubtless be read as recommending structural changes to satisfy natural justice obligations but not that natural justice obligations cannot be met under the FCA, particularly where the court is the body to decide on the issue of a breach of the FCA for which the current framework of the FCA already provides.

On this point we recall pages 40-41 of the decision which refers to the merger of investigative and adjudicative functions in sections 5 and 7 of the FCA and which states:

That problem can however be remedied for the future if the Legislature would place those functions in two separate bodies i.e. the investigative function in the Commission and the adjudicating function in the Courts or in some other appropriate body.’

Therefore, where two separate bodies are to perform the functions of investigation and adjudication respectively, the issue of natural justice is not implicated. The above excerpt, far from barring the jurisdiction of the court until amendment, permits its exercise in giving effect to the provisions of the FCA when, for example, the FTC brings a matter before the court for its determination on the question of a breach of the FCA and for appropriate relief or when a private remedy is sought under section 48 of the FCA whereby a private litigant seeks damages for breaches of the FCA.

Mr. Thomas also states that ‘…since the 2001 court ruling that the FTC was operating in breach of natural justice, the FTC has been travelling with carrots to encourage the ‘right’ behaviour’. Mr. Thomas cites a 2004 FTC document titled ‘Competition Advocacy in Jamaica’ for this proposition. This is old material. Much has happened since then.

We suggest, for example, a reading of FTC v. SBH Holdings and FTC v. Errol Bailey (Trading as Foundation Music Showcase), cases subsequent to Jamaica Stock Exchange v FTC whereby the FTC enforced provisions of the FCA through the courts.

Yet another myth is prominent in the statement ‘As such, until the FCA is amended to change the circumstances, whether it is a ‘case’ or ‘cases’ in which natural justice has been breached, the precedent applies’.

If the statement is meant to say that Jamaica Stock Exchange v FTC applies if natural justice is breached there is no issue of contention. If, on the other hand, it is meant to convey the impression that the precedent applies whether or not natural justice is implicated in any case then that is inaccurate.

It is now trite and settled, such that any clarification on the point invites a charge of condescension, that a judicial precedent is applicable when the material facts and legal issues are similar. That there have been cases subsequent to Jamaica Stock Exchange v FTC whereby the FTC enforced provisions of the FCA through the courts means that it was not a precedent for those cases.

We hope that this further clarification settles the matter but are prepared to clarify even more for the benefit of the public as part of our efforts at public education on the role and functions of the FTC.