Dawn raids by UOKiK – A second look

On 16 January 2019, the Polish Constitutional Tribunal ruled that the second sentence of art. 105n.4 of the legislative Act of 16 February 2007 regarding competition and consumer protection violates art. 78 in reference to art. 45.1 of the Polish Constitution.

Searches conducted in competition inhibition cases

Art. 105n.1 of the legislative Act of 16 February 2007 regarding competition and consumer protection vests the president of UOKiK, the Polish competition authority, with the power to order raids in search for evidence in clarificatory proceedings and antitrust proceedings, provided that there are reasonable grounds for believing that such evidence may be found on the premises searched. Any such raid requires prior permission of the Competition and Consumer Protection Court; upon receiving a request from UOKiK for such permission, the Court rules within 48 hours. The second sentence of art. 105n.4 of the Act (to which the present Constitutional Court decision refers) provides that this decision of the Competition and Consumer Protection Court cannot be challenged.

Albeit art. 105p of the Act does entitle the business enterprise to complain, post factum, about a raid by arguing that its specific elements departed beyond the scope of the case or violated other applicable laws, the Polish legislature has excluded the possibility of challenging the actual Competition and Consumer Protection Court decision authorising the raid. This solution has raised doubts as to the statute’s compliance with the basic right to adjudication.

What does the Constitution say ?

Art. 45.1 of the Polish Constitution, put briefly, guarantees that each entity shall be entitled to its day in court; as such, it is fundamental to safeguarding individual rights and to upholding the rule of law. Broken down into its individual components, this constitutional right encompasses:

1. The right to initiate proceedings before an independent and impartial court;
2. The right to due process in accordance with the requirements of equitability and transparency;
3. The right to a court ruling;
4. The right to due form of the constitution and position of the authorities considering the case.

As the Constitutional Tribunal explained in its ruling of 31 March 2009 (case SK 19/2008), “the principle of procedural equitability is based, in particular, on the following requirements:

1. The opportunity to be heard;
2. Disclosure, in prehensible terms, of the motives informing the verdict so as to avoid its peremptoriness and arbitrariness, and
3. Ensuring transparency of the proceedings for the benefit of its participant.”

Art. 78 of the Constitution furthermore guarantees that each party to proceedings may challenge verdicts and decisions handed down at first instance. Logically enough, in order for this principle to be implemented, proceedings must have at least two instances. “Lack of possibility to appeal before a court of higher instance restricts the right to trial of those concerned, running contrary to the principles of democratic rule of law”, ruled the Constitutional Tribunal on 27 June 1995 (K 4/94); this position has since been affirmed, among other rulings, on 10 July 2000 (SK 12/99).

What are the implications of the Constitutional Tribunal’s ruling ?

The most immediate consequence of this ruling is comprised in the necessity to now amend the legislative Act regarding competition and consumer protection so as to provide for the possibility of challenging a Competition and Consumer Protection Court decision authorising a search of an enterprise’s premises. Additional scrutiny by the Court of Appeal may lead to improved quality of UOKiK applications for permission to execute a search and of Competition and Consumer Protection Court decisions handed down in this scope. It remains to be seen whether, in the interim preceding such amendment, the Court of Appeal will opt for direct application of the Constitution and entertain challenges to Competition and Consumer Protection Court authorising searches ?