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Part II The Member State Reports on Transposition of the Directive, 18 United Kingdom

Barry Rodger

From: The EU Antitrust Damages Directive: Transposition in the Member States

Edited By: Barry Rodger, Miguel Sousa Ferro, Francisco Marcos

From: Oxford Competition Law (http://oxcat.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 27 October 2020

Subject(s):
Basic principles of competition law — Damages — Application of EU competition rules — Jurisdictions — State and competition law

(p. 378) 18  United Kingdom

1.  Transposition Background and Process

1.1  Overview of the UK private enforcement context

It is important to stress at the outset that this chapter focuses on developments in relation to private litigation involving both UK and EU competition law in the courts of the UK. This is important in the context of the transposition of the Antitrust Damages Directive itself, as it is difficult to separate the development of private enforcement of UK competition law from the wider European context, for a number of reasons. First, much of the case-law reflects the potential for parties to bring proceedings, or defend an action, on the basis of domestic and/or EU competition law. Second, the Enterprise Act, discussed further below, made provision for follow-on actions in relation to prior infringements of both the domestic Competition Act prohibitions and Articles 101 and 102 TFEU. Finally, the litigation context in which EU or UK competition law may be applied before the UK courts is to all extents and purposes identical, in terms of substantive law,1 procedural law,2 and more general issues such as collective redress, financing of actions, and cost recovery rules.

Competition law and policy in the UK has undergone a radical transformation— a ‘sea change’—in the last 20 years.3 The Competition Act 1998 marked the start of the transformation4 to a more legalistic, prohibition-based set of provisions with clear sanctions and remedies. This was buttressed by the passing of the Enterprise Act 2002, which provided the Competition Appeal Tribunal with a range of functions,5 (p. 379) in addition to its role in relation to follow-on damages actions.6 Institutional mechanisms and bodies have been introduced—the follow-on damages action, the Competition Appeal Tribunal (‘CAT’) itself, the opt-out collective proceedings mechanism—which have sought to facilitate private enforcement. Slowly, we have witnessed an increase in resort to the legal remedies available, and this has led to a greater number of law firms and practitioners involved in the practice of competition law, including private litigation. This cultural shift has also led to greater awareness of competition law rights and remedies and more case-law, although settlements continue to obscure much of this practice.

It was clearly intended that the prohibitions introduced by the Competition Act 1998 should be enforceable by means of private law actions through normal court processes. The Enterprise Act 2002 made provision for encouraging private actions by introducing section 47A into the 1998 Act,7 which provided for the CAT8 to award damages and other monetary awards where there was a finding by the relevant authorities of an infringement of the Chapters I and II prohibitions, or of Articles 101 or 102 TFEU.9 Section 19 of the 2002 Act added section 47B to the 1998 Act, allowing damages claims to be brought before the CAT by a specified body on behalf of two or more consumers who have claims in respect of the same infringement10—a form of ‘consumer representative action’.

The ability to bring a follow-on claim before the CAT did not affect the right to commence ordinary civil proceedings, as made clear by section 47A(10) of the 1998 Act.11 Accordingly, follow-on actions could, but were not required to, be brought before the CAT.12 Stand-alone actions and non-monetary claims, prior to the Consumer Rights Act reforms in force as of 1 October 2015,13 could not be raised before the CAT.14 Given that claims against multiple parties often combine stand-alone and follow-on elements, such claims were outside the CAT’s jurisdiction and had to be raised before the High Court.15 Another rationale for a claim being raised before the High Court related to the fact that a CAT action could not be raised until all public enforcement appeal processes had been finalised.16 The Consumer Rights (p. 380) Act 2015 made various amendments to the Competition Act regime as of 1 October 2015, to enhance the role of the CAT as the specialist forum for competition law disputes in the UK and to introduce an opt-out collective redress mechanism in relation to competition law infringements.17

It is clear that the UK courts—the High Court and CAT in particular—have developed as a key forum for international competition litigation, despite the relative dearth of final damages awards, and it remains to be seen whether this will be further facilitated by the implementation of the Directive or be discouraged by the imminent departure of the UK from the European Union.

1.2  Transposition process

The relevant government department, the Department for Business Innovation and Skills (‘BIS’), launched a lengthy period of consultation on the implementation of the Directive on 28 January 2016.18 The consultation ran for six weeks and closed on 16 March 2016. It involved meetings with stakeholders and elicited 26 responses, from competition lawyers, regulators, consumer representative bodies, and individuals.19 Its successor, the Department for Business Energy and Industrial Strategy (‘BEIS’), published the outcome of the consultation on 20 December 2016, Implementing the EU Directive on Damages for Breaches of Competition Law: Government Response.20 It was noted that it had decided to adopt a ‘light-touch’ implementation approach, wherever possible relying on ‘existing legislation, case-law or Court Rules. Where necessary we will legislate to ensure that we fully implement the [D]irective’,21 although in reality the implementing Regulations largely follow the Directive on most of the material issues.22 The Decision also confirmed that, despite the UK’s impending exit (p. 381) of the European Union, the UK remains a full EU Member State (‘MS’) until the exit negotiations are completed, and will continue to negotiate, implement, and apply EU legislation.23 The Damages Directive statutory instrument—the Claims in respect of Loss or Damage arising from Competition Infringements (Competition Act 1998 and other Enactments (Amendment)) Regulations 2017, SI 2017/385 (‘the Regulations’)—was laid before Parliament on 20 December, and was subject to parliamentary debate and approval.24 The European Communities Act 1972, section 2(2), provides the power to adopt secondary legislation to implement EU law, and indeed virtually all EU directives are implemented through statutory instruments.25 This is a form of delegated legislation where there is minimal parliamentary time and discussion, as in Ireland, and the statutory process involved very limited debate in the House of Lords about the content of the Directive or the implementing Regulations.26 The Regulations revise the existing provisions for competition law private enforcement in the Competition Act 1998 and are applicable only in the context of competition law damages actions.

As with all legislative proposals, the Government implementation proposal included an impact assessment focusing in particular on the costs to businesses of introducing the measures.27 The process and outcomes in relation to the various issues also demonstrate an underlying tension between access to justice for claimants (in particular consumers) and prejudice to businesses. This is a common theme in relation to the introduction of measures to facilitate private enforcement and is expressly recognised in the post-consultation document, for instance in relation to the application and transitional arrangements of the newly introduced measures. This perennial debate about achieving the appropriate equilibrium between facilitating the effectiveness of competition law rights, on the one hand, and avoiding exorbitant cost and potential liabilities for business as a result of excessive litigation, on the other, underlies each of the key areas revised as a result of the implementation of the Directive.28

(p. 382) 2.  Scope of the Transposition Measure

2.1  Substantive scope

The UK consultation document was concerned about the potential for a two-tiered system if the transposed rules applied only to EU law claims and, given the similarity in the respective EU and domestic regimes, whether this would lead to ‘uncertainty, confusion and higher familiarisation costs for businesses’ and also an increase in satellite litigation. Accordingly, the consultation recommended the implementation of a single regime, irrespective of the legal basis of the original competition law breach. This approach gained unanimous agreement from all consultation respondents. The Regulations therefore apply to any competition damages claim under para 2(1) where there is an infringement of any of the four prohibitions without any requirement for parallel application of EU and national law in the proceedings. However, the Regulations do not apply beyond competition law damages actions or in relation to infringements of other MS competition laws.

2.2  Temporal scope

Article 22(1) of the Directive states that MS shall ensure that the national measures adopted under Article 21 to comply with the substantive provisions of the Directive ‘do not apply retroactively’ and Article 22(2) provides that they ‘shall not apply to actions for damages for which a national court was seised prior to 26 December 2014’.

The former provision is certainly the more important in practice. The difficult balance between consumer access and an approach which would be unfair to business was evidenced as some respondents to the consultation considered that it would be harmful to consumers to limit the new rules to infringements after implementation, whereas others argued that application to behaviour which occurred before implementation would be detrimental to business. The Government’s response to the consultation process, at para 7, noted that it had been decided that the new substantive rules would apply only where behaviour and harm occurred after legislation came into force—this would be the ‘fairest approach’—but procedural provisions would apply even where the harm or infringement took place before implementation. Accordingly, the implementing measures would seek to distinguish between substantive and procedural provisions. The rules are set out in Part 10 of the Regulations. Paragraph 42 provides that the substantive rules apply ‘to loss or damage suffered on or after the relevant day as a result of infringement of competition law that takes place on or after that day’, but notes that, where the infringement takes place over a period, this will be ‘the first of those days’. The relevant day is the (p. 383) date on which the Regulations came into force. This effectively means that, for the majority of the substantive provisions of the Directive, there will be a considerable lag before the implementing measures are effective and the Directive has any impact on competition damages actions before the courts in the UK. The only parts not covered by those restrictions are Parts 6 and 7 relating to disclosure and use of evidence, deemed to be procedural for these purposes, which will be applicable where proceedings begin after the entry into force of the Regulations, i.e. 9 March 2017.

3.  Key Issues

3.1  Limitation periods

In practice, the formulation, interpretation, and application of the limitation periods are of fundamental significance to competition litigation practice—probably the most significant procedural issue in practice, as evidenced by the considerable case-law.29 Until the Consumer Rights Act 2015 reforms, the limitation rules before the CAT were distinctive from the six-year limitation period for High Court claims and dependent on the post-infringement appeal process. There have been various judgments focused directly on time-bar issues by the CAT.30

With the exception of personal injury cases, English law generally allows for a six-year limitation period.31

There is special provision for postponement of the limitation period in cases of fraud, concealment, or mistake under section 32 of the Limitation Act 1980. In relation to secretive cartels in particular, section 32(1)(b) has potential relevance where ‘any fact relevant to the claimant’s right of action has been deliberately concealed from him by the defendant’. In such cases, the time limit will not run until the claimant has discovered the concealment or could have done so with reasonable diligence.32

Of course, for claims arising since 1 October 2015, the Consumer Rights Act revised the limitation regime and section 47E of the Competition Act 1998 effectively applies the same rules in the CAT as before the High Court. However, for claims (p. 384) arising before 1 October 2015, there are transitional provisions in the much-maligned 2015 Tribunal Rules, r 119(2)–(4).33

Although the focus in much of the academic commentary has been on the relationship between discovery and leniency documentation, the application of the limitation rules has been the primary focus of much of the UK case-law to date. Article 10 of the Directive provides for a specialised set of limitation (and prescription) rules. The introduction of a five-year limitation period is relatively insignificant in itself, given the existing limitation periods in the different legal systems of the UK. After consultation on whether the different five- and six-year periods should remain, with a small minority of respondents suggesting a uniform period of five years across the UK, the Government decided that no changes were necessary to meet the requirements of the Directive and therefore the different periods would be maintained as under the current legislation—the Limitation Act 1980, the Limitation (Northern Ireland) Order 1989, and the Prescription and Limitation (Scotland) Act 1973.34 Although the adoption of the chequered flag period of five years in the Directive would suggest minimal upheaval, there are two mechanisms which are fundamental to the operation of the limitation rules in a competition law context and which may result in a significant shift as a result of the implementation of the Directive limitation provisions. The first is the trigger or starter gun provision, i.e. when the limitation period actually starts to run; the second is the yellow flag to suspend the operation of the limitation period. This section will outline the latter briefly before focusing on the fundamental issue of when the limitation period actually starts to run.

Of course, there were already suspensive provisions in relation to proceedings before the CAT under the old CAT rules, but given that the limitation rules generally do not make any provision about infringement proceedings by competition authorities, it was decided that the Directive provision in Article 10(4) would be effectively copied out in para 21 of Part 5 of the Regulations.35

This provision will be significant in practice given its application to investigations by the Competition and Markets Authority (‘CMA’), European Commission, and other MS competition authorities.

(p. 385) Nonetheless, the most significant issue in relation to limitation generally, and specifically in the context of competition litigation, is the date when the limitation period commences—the trigger point. This is particularly contentious in the competition law context36 given the secretive nature of many of the types of anti-competitive behaviour which harm potential claimants, in particular collusive behaviour by cartelists, the core practice area for competition law damages claims. Accordingly, it is crucial to know when the claimant is deemed to be sufficiently aware as to trigger the start of the limitation period. Given the absence of a specific provision in the UK legal systems, the Government has decided to effectively copy out Article 10(2) of the Directive, as set out in Part 5 of the Regulations. Paragraph 19(1) states that the limitation or prescriptive period begins on the later of the day on which the infringement ceases or the claimant’s knowledge. The latter is, according to para 19(2), when the claimant first knows or could reasonably be expected to know:

  1. (a)  of the infringer’s behaviour;

  2. (b)  that the behaviour constitutes an infringement of competition law;

  3. (c)  that the claimant has suffered loss or damage arising from that infringement; and

  4. (d)  the identity of the infringer.

The key question is the extent to which the specific knowledge requirements in a competition law context will change the existing position in domestic law. As already outlined, the period in England and Wales is six years from the date on which the cause of action accrued, i.e. where the infringement occurred and the victim suffered damage. Section 32(1)(b) of the Limitation Act 1980 provides that the limitation period does not begin, where any fact relevant to the claimant’s right to action has been deliberately concealed by the defendant, until the concealment has been discovered, or could be with reasonable diligence. Some uncertainty surrounded the concept of reasonable diligence to discover the concealment. What level of information in the public domain would be sufficient to either constitute knowledge or the absence of reasonable diligence? It has been doubted, given the requirements for success in a damages action in relation, for example, to a secret cartel infringement of Article 101 TFEU, that the limitation period would ever commence and whether the level of information publicised by competition authorities at any stage of their investigations would ever provide sufficient knowledge to potential claimants to trigger it.37

A related issue here is whether claimants would have sufficient information to substantiate their claim in court. Accordingly, the limitation rules generally cannot be viewed in isolation and, in the English litigation process, the question has been effectively whether the claimant can (or should be able to) satisfy the ‘statement of (p. 386) claim’ test such that the claim would not be struck out for a failure to disclose reasonable grounds for bringing the claim.38

The Limitation Act provisions were considered by the English courts in a competition law context in Arcadia v Visa.39 This involved claims brought by retailers against Visa Europe and Visa Inc for breach of EU, UK, and Irish competition law in relation to the inflated price for accepting credit and debit cards as a result of the multilateral interchange fee (‘MIF’) set by Visa. It was held by the High Court that the level of information published by the Commission in 2001 and 2002 in two separate parts of the public enforcement process was sufficient for the claimants to establish the key ingredients of the claim. The Court of Appeal affirmed that none of the concealment issues raised by the appellant were sufficient to postpone the limitation period as the appellant had sufficient facts to satisfy the statement of claim test at that stage. The Court of Appeal stressed that the Directive did not apply and that the application of the limitation rules in this way was not incompatible with the EU effectiveness principle.

Various issues arise for discussion in the wake of Arcadia v Visa and the implementation of the Directive’s provisions. The first is the introduction in the UK context of a general suspensive requirement in relation to public authority competition investigations. The second, and arguably most contentious, is that Article 10(2) of the Directive, as implemented by para 19 of the Regulations prescribes the type of information the claimant must be aware of before the limitation period can commence. These requirements must be met irrespective of minimum statement of claim thresholds. Consequently, the level of required knowledge would certainly seem to be set at a considerably higher threshold than the discussion in Arcadia v Visa would suggest. It is also particularly instructive in this context to look at the position under Scots law of prescription generally. There are no cases in the Scottish courts on the interpretation of the prescriptive provisions in the Prescription and Limitation (Sc) Act 1973 in relation to competition claims. However, in Morrison v ICL,40 a nuisance action, the Supreme Court considered the issue of what is required for constructive knowledge and the prescriptive period of five years to commence.41 However, the Directive provision on the level of knowledge required to trigger the commencement of the period would, in effect, overrule the position as set out in Morrison, and is different from and more onerous from a defendant’s perspective than the position as set out in Arcadia.42 Scots law already makes provision for the prescriptive period not to commence until after the cessation of the illegal behaviour as now required by the Directive provisions. Accordingly despite the five-year headline for the Directive’s limitation provision, it is suggested that its implementation introduces fairly radical reform to the practice of competition litigation involving (p. 387) both EU and UK competition law, and certainly appears to recalibrate the procedural advantage in favour of claimants.

The final significant issue in relation to the implementation of the Directive’s limitation provisions concerned whether they were to be implemented prospectively or retrospectively. Article 22 of the Directive provides that substantive provisions are not to be applied retrospectively. The consultation document proposed that the limitation provisions should be deemed to be substantive law and accordingly applicable only from commencement of the transposition instrument. A majority of respondents supported the latter approach on the basis of concerns that businesses would otherwise take on contingent liabilities for longer than currently.43 The decision was taken that limitation is a substantive issue, that time-barred claims could not be revived as a result of implementation of the Directive,44 and accordingly that the revised limitation provisions will only apply where the elements of the infringement begin and the harm occurs after the commencement of the implementing legislation.45 It is accepted, and in accordance with existing statutory provision and CAT case-law, that limitation periods are substantive legal provisions by nature.46 Nonetheless, it is suggested that the non-application of the new limitation provisions in cases where the infringement has begun before commencement, but is continuing, may be incompatible with the Directive, which specifically provides that the limitation period will not commence until after the cessation of the infringing behaviour.47

This section has discussed the implementation of the Directive in the UK with particular focus on the Article 10 provision for a specialised set of limitation (and prescription) rules. Although, prima facie, the establishment of a minimum five-year limitation period is one of ‘plus ça change’ (with the six- and five-year periods in England and Wales, Northern Ireland, and Scotland, respectively, being retained), it must be stressed that implementation of Article 10 introduces significant change to the determination of the limitation and prescription periods for competition damages actions in relation to infringements of both EU and UK competition law. The most significant reform relates to when the limitation period begins to run—the trigger point. First, the Directive ensures that this will not take place until after the illegal activity has ceased. The second and potentially significant deviation from existing practice concerns the claimant knowledge requirements to trigger the limitation period.48 These would appear to potentially shift the litigation balance in favour of competition law claimants vis-à-vis businesses which (allegedly) infringe (p. 388) competition law. It remains to be seen whether the new constructive knowledge requirements will be retained as part of the competition limitation rules in the legal systems of the UK post-Brexit, when the UK is no longer an EU MS.

3.2  Binding force of competition authority decisions

In the UK, the availability of follow-on actions has traditionally been linked with the scope of jurisdiction of the CAT.49 However, it is clear that follow-on actions may be raised at the High Court and the Consumer Rights Act 2015 has now extended the jurisdiction of the CAT beyond only follow-on actions. For the follow-on provision of the Enterprise Act 2002 to have the greatest success in facilitating litigation, it was considered necessary to include provision regarding the binding nature of prior enforcement authority decisions. The Competition Act 1998 facilitated claims by providing, in section 58, that those findings of fact by the Office of Fair Trading (‘OFT’), which are relevant to an issue arising in a court action, are binding on the parties, if that decision in which the findings of fact were made is no longer subject to appeal.50 Section 20 of the 2002 Act added section 58A to the 1998 Act which provided that, in any action for damages for an infringement of the 1998 Act prohibitions or Articles 101(1) or 102 TFEU, a court will be bound by a decision of the OFT or CAT that any of the prohibitions have been infringed,51 if the requisite appeal process has taken place or the period for appeal has lapsed.52 The reference to the OFT was revised to the CMA as of 1 April 2014, following the adoption of the Enterprise and Regulatory Reform Act 2013.53 Nonetheless, despite this supporting provision, there have been difficulties in determining the scope of the effect of a prior binding infringement decision.54 A problematic issue concerns the precise nature of the competition authority’s findings and the consequences of those findings, and this may involve factually complicated determinations by the CAT, as evidenced by Enron Coal Services Ltd (in liquidation) v EWS Ltd.55 This was a follow-on claim to an Office of Rail Regulation (‘ORR’) decision that EWS had infringed the Chapter II prohibition and Article 102 TFEU. The claimant sought various remedies, including damages and (p. 389) lost profit. It was stressed throughout the proceedings that establishing liability is not an issue for the CAT under section 47A of the 1998 Act.56 In relation to the particular overcharge claim which went to trial,57 on appeal, the Court of Appeal overturned the CAT, illustrating ‘the dangers of not taking a sufficiently strict approach as to what finding of infringement the regulator has in fact made’.58 This case and particular dispute, involving a regulator’s decision over 400 pages long, demonstrates the difficulties in ascertaining exactly what support the enforcement authority decision provides for subsequent claims.59 Furthermore, in Emerson Electric Co v Morgan Crucible Co plc,60 an application to dismiss damages claims was successful where the specific defendant was neither identified in the operative part of the Commission Decision nor an addressee. The CAT stressed that

‘the Tribunal’s jurisdiction in proceedings under section 47A is limited to resolving issues of causation and quantum of loss resulting from an already established infringement. …[and] it is not possible for a party claiming damages in a follow-on claim under the Act to root around in the decision of a competition authority to find stray phrases or sentences and claim that this amounts to an infringement decision’.61

This ruling was subsequently upheld by the Court of Appeal.62

The dangers in seeking to rely on an infringement finding as binding were also demonstrated recently in Gibson v Pride Mobility Products Ltd,63 where, in an opt-out collective redress claim, an application for a collective proceedings order was adjourned for the applicant to return with an amended claim form, but the claim was subsequently withdrawn. The fundamental difficulties here lay in the related issues of the scope of the infringement decision and the requisite boundaries of a follow-on action and the impact of that decision on the various sub-classes of claimant. It was noted that the claimant’s difficulties here stemmed in part from the enforcement approach of the OFT, which had focused on ‘the low lying evidential fruit’64 in its investigation and findings.

The Consumer Rights Act 2015 has revised the scope of current section 58A of the Competition Act 1998, with effect from 1 October 2015 (in relation to decisions made after that date). Subject to this temporal limitation,65 it now provides that prior infringement decisions are binding both in relation to proceedings before the courts and the CAT under either sections 47A or 47B.66 In addition, section 58A (p. 390) explicitly makes final infringement decisions by the European Commission binding on the CAT and courts.67 Arguably, this provision is superfluous as the position is already regulated under EU law under Article 16 pf Regulation 1/2013 and the earlier Masterfoods ruling by the ECJ.68 Section 58A of the 1998 Act already makes provision for Article 9(1) of the Directive and will not require amendment.69 The Directive also has a limited provision, allowing MS courts, in accordance with national law, to refer to final infringement decisions taken in other MS as prima facie evidence that a competition law infringement has occurred.70 In relation to this provision set out in Article 9(2), which provides that similar decisions of an MS competition authority or review court may be presented as prima facie evidence that an infringement has occurred, specific legislative provision was required in para 35 of the Regulations.

3.3  Disclosure and protection of documents/admissability of evidence

There are no specific rules for pleading and proof in competition litigation, and generally, to succeed on the merits at trial (proof in Scots law), the general ‘balance of probabilities’ test prevails. However, in practice in the English courts, a significant number of claims are considered at summary judgment stage,71 and the approach by the courts to defendants’ attempts to strike out claims and have them summarily dismissed under CPR 3.4 even before any evidence is adduced at trial is critical.72 The most significant of these in competition law proceedings is CPR 3.4(2)(a)–(2).73 Essentially,74 the court will not grant an application to strike out a claim generally unless it is bound to fail;75 specifically where the claim is for damages arising out of a clandestine cartel, the court will adopt a more generous approach to pleadings.76

(p. 391) In England and Wales, the Civil Procedure Rules (‘CPR’) mandate that a party must disclose all documents which are relevant to the litigation, including those that harm its own case or support the opposing party’s case.77 Standard disclosure in the High Court takes place when pleadings are well advanced.78 Although it is clear that disclosure is considerably broader than across most legal systems in continental Europe,79 there are limits on pre-trial disclosure.80 In WH Newson Holding Ltd v IMI plc,81 it was held that the claimants in complex litigation arising out of the copper plumbing tubes cartel under section 47A of the 1998 Act (which had been transferred to the High Court) were entitled, when bringing a contribution claim against a third party, to disclosure by the addressees of a Commission infringement decision in order to ascertain if there was evidence of third-party involvement in the cartel.82 There was a ruling on disclosure in 2014, as one of various rulings in the National Grid Electricity Transmission Plc v ABB Ltd83 case following the supply of gas insulated switchgear cartel. The applicant, the owner of the UK electricity system, sought further information under CPR Pt 18 from various companies about how the cartel had operated in the UK market. It was argued that this information went beyond the infringement and ran contrary to the adversarial system at the heart of the English legal system. The application was granted in part where the requests were reasonable and proportionate, and were necessary to understand how the infringement found by the Commission had actually operated in the UK, and where the potentially relevant information was in the knowledge of only one side in the litigation, emphasising the importance of disclosure to equality of arms in the competition litigation context.

There is no broad obligation of disclosure in Scots law; rather, a party seeking documents from the other side in an action must apply to the court for specific documents it wishes to be disclosed. Normally, when the court approves the specification of documents (as the list is called), the other party will disclose the requested documents without further procedure. However, if the documents are not forthcoming, Chapter 35 of the Court of Session Rules allows for an application for commission and diligence for recovery of documents to compel a party to disclose documents which they are withholding.

The EU Antitrust Damages Directive was at least partly introduced with the purpose of facilitating the task of potential claimants in proving their competition law (p. 392) claims. Nonetheless, Article 5 of the Directive was aimed primarily at those MS with limited provision for pre-trial disclosure and is unlikely to have any major impact on the existing provision in the legal systems within the UK.84 The Government’s response to the consultation noted that disclosure was a well-established concept in the UK,85 but noted that the explicit requirement of proportionality, although reflected generally in the CPR, now expressly required consideration of confidentiality, and these would be implemented by changes to court rules only.86

The most controversial proposal and subsequent provision in the Directive concerned the protection of leniency applicants’ documentation from access by claimants through court disclosure processes.87 The limitations on access to leniency documentation had been examined by the ECJ in Pfleiderer,88 and that ruling was subsequently considered and applied in the English courts in 2012 in National Grid Electricity Transmission Plc v ABB Ltd and others.89 The ECJ ruled in Pfleiderer that it is for the national courts to weigh the interests in favour of disclosure of information and in favour of the protection of that information when determining the conditions under which access to documents is permitted or refused.90 In 2013, the ECJ ruled, in Donau Chemie,91 that courts were obliged to balance (‘weigh up’) the interests of immunity applicants with those of prospective damages claimants on a case-by-case basis in situations where the latter request access to the court’s file. In National Grid,92 the English High Court weighed the relevance of the leniency materials against the difficulty the claimant would have in obtaining the materials from other sources.93 The High Court confirmed that there could not be a ‘blanket objection to disclosure’94 and that the courts will assess, on a document-by-document basis, the extent to which the materials sought are necessary for proving the damages claim.95

The Directive goes beyond the ECJ jurisprudence in seeking to protect the leniency process by restricting accessibility in private litigation to leniency documentation.96 Articles 6 and 7 of the Directive introduced a range of restrictions on the obligation to disclose and on the admissibility of evidence in a competition authority’s file, including the blanket ban on access and admissibility of settlement (p. 393) submissions and cartel leniency statements, and these were implemented in full in Part 6 and 7 of the Regulations (paras 27–35).

3.4  The presumption of harm and quantification of damages

The Antitrust Damages Directive contains various provisions in relation to the extent of liability, passing-on, indirect purchasers, and quantification of harm which seek to ensure the general effectiveness of the EU right to full compensation.

Losses suffered as a result of a competition law infringement can arise in a myriad of ways.97 The standard requirements in damages actions to prove causation and quantification of damages can always be problematic,98 but in competition law claims there are additional potential complications: how the calculation of losses suffered by parties at different levels of the supply chain should take into account whether and to what extent overcharges have been passed on by suppliers, or to customers.99

Under the domestic legal systems in the UK, there is no lex specialis for competition litigation in relation to the types of damage recoverable or the methods by which proof of such damage is made. The underlying basis for competition law damages, as with other types of tort or delict claim, is compensation for loss suffered.100 As a matter of EU law, where claims based on EU competition law are concerned, this has been confirmed by the ECJ jurisprudence in Crehan and Manfredi considered in Chapters 1 and 2, and reaffirmed by Article 3 of the Antitrust Damages Directive on the right to full compensation based on the principles of equivalence and effectiveness.101

Under neither principal UK legal system is there a specific and separate requirement of ‘antitrust’ standing. The principal difficulty is establishing that a statutory duty is owed by the defendant/defender to the particular claimant and this effectively operates in the same way as a rule of standing. It must be shown that the claimant/pursuer is one of the class of persons who are intended to benefit from the provision. Much depends on the purpose attributed to the statutory provision by the court.102 Alleged anti-competitive activity could result in a great (p. 394) many individuals suffering some loss because of the actions of the defendant.103 Essentially, on a case-by-case basis, the courts will determine which parties are entitled to seek compensation on the basis of an infringement104—for instance, the Court of Appeal in Crehan considered that the ECJ ruling effectively meant that the particular claimant in that case was entitled to seek damages for its loss.105

The Regulations make specific provision to implement the rebuttable presumption that cartels cause harm under Article 17(2) of the Directive in para 13 of the Regulations, although the presumption is limited to the existence, rather than the extent, of damage. In relation to quantification of harm and Article 16 of the Directive, respondents to the consultation stated that it was an issue for the courts to estimate harm, but guidance should be provided for the courts and CAT. It was decided that no implementing measures would be required here, and that courts would follow normal processes and principles on the quantification of damages; indeed, case-law practice in this area is slowly increasing, as discussed below. It was also decided that Article 17(3) on ensuring that a national competition authority may, upon request, assist a court in relation to the assessment of quantum of damages would not be implemented, as the courts and CAT already have the appropriate rules to allow for assistance from third parties where necessary.

In follow-on actions, given that the parties will seek to rely on a competition authority prior infringement decision, as discussed at sub-section 3.2, parties seeking damages will generally only require to prove causation and quantification of damages. Nonetheless, although potentially complex in terms of proof, there are no specific domestic legal rules in relation to either106 and limited practice in a competition law private enforcement setting. In Crehan, the compensation claim was rejected on the substantive ground that there was no breach of Article 101 TFEU on the facts. The case was appealed to the Court of Appeal, which, in a unanimous single judgment, allowed the appeal and awarded Crehan damages of £131,336.107

Travel Group PLC (in liquidation) v Cardiff City Transport Services Ltd108 was the first successful final award of damages as quantified by the CAT (including an (p. 395) exemplary damages award)109 and was followed in 2013 by a damages award in Albion Water v Dwr Cymru Cyfyngedig.110 In the former, the CAT noted and applied the basic test for causation in English law.111 Generally, in English law, the basic test for causation—the test for ‘factual causation’—is the ‘but for’ test.112 The CAT held that the infringement cost 2 Travel 41,255 passengers in the relevant period and the loss was quantified as £33,818.79, being the lost profits which would have been generated by those passengers. It should be noted that various other claims in the case, for considerably larger sums of money,113 were rejected on the basis of the CAT’s application of counter-factual reasoning that the claimed losses were not caused by the infringement, primarily on the basis that the company would have gone into liquidation at some stage in any event, irrespective of the defendant’s abusive anti-competitive behaviour. Similarly, the second ever award of damages by the CAT in Albion Water v Dwr Cymru Cyfyngedig involved a relatively straightforward application of the causation test to ensure that Dŵr Cymru: (a) was liable to pay Albion £1,694,343.50 in respect of Albion’s claim for loss arising in relation to the supply of water to Shotton Paper; and (b) was liable to pay Albion £160,149.66 in respect of Albion’s claim for loss arising from the lost opportunity to supply water to Corus Shotton.114 On the other hand, in the first follow-on claim for damages to reach trial before the CAT, causation was central to the rejection of the claim for damages brought by Enron Coal Services Ltd (in liquidation) (‘ECSL’) against English Welsh & Scottish Railway Ltd (‘EWS’) under section 47A of the Competition Act 1998.115 The ORR had found that EWS had pursued, without objective justification, selective and discriminatory pricing practices that had placed ECSL at a competitive disadvantage. A key difficulty here was that the claims depended on the hypothetical action of a third party. The CAT concluded116 that the claimant had only a speculative prospect of supplying the third party and had therefore failed to prove that the breach of statutory duty by EWS caused any of the claimed loss.

(p. 396) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others,117 involved a damages claim in respect of Mastercard’s MIF. The CAT held that there was an infringement of Article 101 TFEU and that Sainsbury’s was entitled to recover nearly £70 million in damages. The CAT basically held that there was an agreement which was a restriction of competition by effect, not object, and that, but for the UK MIF, bilateral interchange fees at a lower level would have been agreed in place of the UK MIF.118 The CAT also considered in detail the issue of quantification of damages, in only the third, and most complicated, case in which it has awarded and assessed damages. The general principles informing the calculation of the overcharge damages award119 are compensation/reparation, the balance of probabilities, and that, ‘when carrying out such an assessment, where there is an element of estimation and assumption—as frequently there will be— restoration by way of compensation is often accomplished by “sound imagination” and a “broad axe” ’.120 There was also a detailed discussion and calculation of the appropriate levels of interest to be added to the damages awards,121 noting that interest was to be compound, followed by a subsequent ruling on the effect of taxation on the damages award and interest to be paid on the damages.122

The view that damages are awarded only for the purpose of compensation in the UK courts has been rejected.123 There appear to be three categories in which exemplary damages are available and only then where compensation is an inadequate remedy to punish the outrageous conduct.124 The most relevant for our purposes is Lord Devlin’s second category—in respect of wrongful conduct calculated to make a profit—in relation to blatant competition law violations, such as price-fixing and abuse of a dominant position.125 Although the Manfredi126 ruling indicated that national legal systems could provide for exemplary damages, the Court of Appeal in Devenish127 emphasised that the English courts should adopt a strictly compensatory approach and that there would be little scope for restitutionary, exemplary, or other forms of multiple damages awards. However, the CAT subsequently awarded, in addition to an award of over £33,000 (plus interest) in lost profit, £60,000 for exemplary damages in 2 Travel Group PLC (in liquidation) v Cardiff City Transport (p. 397) Services Ltd.128 No fines had been imposed on Cardiff Bus by the OFT as a result of the application of the small undertaking immunity under section 40(4) of the 1998 Act and, crucially, the CAT distinguished Devenish on the basis that the defendants in that case had benefited from leniency—immunity from fines by the Commission—as whistleblowers and the court had recognised the importance of not discouraging whistleblowing.129

Nonetheless, section 47C(1) of the Competition Act 1998, introduced by the Consumer Rights Act 2015, prescribed the award of exemplary damages by the CAT in collective proceedings.130 Moreover, Article 3 of the Directive prohibits overcompensation generally.131 As discussed above at sub-section 2.1, the Regulations apply to all competition law damages actions involving either EU or domestic infringements and accordingly para 36 of the Regulations provides that a court or the CAT may not award exemplary damages in competition proceedings, and therefore there is no longer any scope for exemplary damages in any context before the UK courts.

3.5  The passing-on defence and indirect purchasers

Chapter IV of the Directive (Articles 12–14 in particular) tackles the problematic issue of the ‘passing-on’ of overcharges and there has been considerable academic literature in this context over the years,132 though no case-law practice in the UK until Sainsbury’s Supermarkets Ltd v Mastercard Inc and others.133

The Government response noted that, since the consultation, there had been developments in the case-law, notably the CAT ruling in Sainsburys v Mastercard,134 which had clarified the case-law on indirect purchasers and recognition of the passing-on defence. The Government decision noted that legislation was required to ensure the burden of proof was on the defendant, in line with Article 13 of the Directive. It was also noted that the burden of proof in relation to indirect purchasers was a notable shift from general principles and that legislation would be required to show that the indirect purchaser only needs to establish: (1) an infringement by the defender; (2) that it resulted in an overcharge to the direct purchaser; and (3) that the indirect purchaser has purchased goods or services which are the object of the infringement.

In Sainsbury’s Supermarkets Ltd v Mastercard Inc and others, there was considerable reflection by the CAT on the passing-on defence and the underlying focus on compensation and avoiding overcompensation,135 particularly where indirect purchasers (p. 398) are involved. The CAT discussed the Antitrust Damages Directive, noting in passing that two provisions of the Directive136 dealt with ‘the burden of proof and the need to avoid over- or under-compensation between rival claimant levels or groups and potential defendants is a clear demonstration of the difficulties inherent in the pass-on defence’.137 The CAT proceeded to both confirm for the first time the recognition of overcharge claims by indirect purchasers and the existence of a passing-on defence for defendants.138 Mastercard’s passing-on defence failed as the CAT stressed

‘that the pass-on “defence” ought only to succeed where, on the balance of probabilities, the defendant has shown that there exists another class of claimant, downstream of the claimant(s) in the action, to whom the overcharge has been passed on. Unless the defendant (and we stress that the burden is on the defendant) demonstrates the existence of such a class, we consider that a claimant’s recovery of the overcharge incurred by it should not be reduced or defeated on this ground.’139

The implementing Regulations transposing the Directive’s provisions on passing on are set out in Part 2, in relation to both overcharges and underpayments. Paragraph 9 concerns indirect purchasers and effectively implements the key rule in Article 14(2) of the Directive in favour of indirect purchasers, and para 11 clarifies, in line with Article 13 of the Directive, that the burden of proof in a passing-on defence lies with the infringing defendant. There are no specific measures to implement Article 15 on actions for damages by claimants from different levels in the supply chain, in terms of coordination of the different claims.

3.6  Joint and several liability

The principle of joint and several liability, set out in Article 11 of the Directive, is already well established in the legal systems of the UK, as confirmed by respondents to the consultation process, and so in accordance with the ‘light-touch’ approach it was decided that it was not necessary for any implementing legislation to be introduced. It is as yet uncertain how the courts will determine and assess the ‘relative responsibility’ of the co-infringers as required by Article 11(5). Nonetheless, it was recognised that, in this context, the Directive introduced some important differences to the existing regime in relation in particular to immunity recipients and small and medium-sized enterprises (‘SMEs’), and these provisions are set out in paras 14–16 and 12 of the Regulations. Paragraph 14 establishes the exception for immunity recipients subject to the subsidiary liability where full compensation cannot be achieved and para 12 sets out the immunity for SMEs, though a notable difference (p. 399) is the requirement that the SME had a market share of less than 5% throughout the period of infringement rather than at ‘any time’ as provided in Article 11(2)(a) of the Directive.

3.7  Parent company liability

There is nothing specifically in the Directive on the issue of parent company or group liability or the underlying economic entity doctrine. There has been considerable EU case-law and academic discussion on the attribution of liability in terms of public enforcement of EU law and responsibility for fines imposed as a result of infringement of the EU law prohibitions in Articles 101 and 102 TFEU.140 However, as yet, at least in terms of EU law, it remains uncertain whether the economic entity doctrine applies in relation to the civil law consequences, notably liability for damages.141 It is suggested that, on any preliminary reference, the ECJ is likely to apply the case-law in the public enforcement setting to the civil liability context and it appears that this is the assumption on which the UK courts will deal with the matter when faced with the issue of attribution of liability in competition law damages actions.142 For instance, in Sainsbury’s Supermarkets Ltd v Mastercard Inc and others,143 the CAT considered in detail the related question of the attribution of liability and the concept of the undertaking or ‘single economic unit’ for the purposes of EU competition law generally and for the application of the turpitude defence specifically.144 Although the CAT stated that, although ‘[i]t is by no means self-evident that attribution is a question of EU law’, the issue was ‘a difficult and finely balanced one. The parties were unable to point to any authority that was determinative of the point.’145 Ultimately, after reflecting on the range of potentially problematic scenarios and legal issues arising, the CAT concluded on this specific point of determining what is the relevant ‘undertaking’ as follows:

‘Accordingly, it is necessary to consider whether Sainsbury’s and Sainsbury’s Bank are part of the same “undertaking”, and, if so, whether Sainsbury’s participated in any infringement of Article 101 [TFEU] and/or whether the acts, knowledge, and state of mind of Sainsbury’s (p. 400) Bank are attributable to Sainsbury’s as a matter of EU law. We consider that it would be both wrong and unnecessary to apply the English rules of attribution.’146

Nonetheless, the CAT recognised the difficulties and uncertainties under EU law in attributing liability within an undertaking in a range of scenarios.147

3.8  Consensual dispute resolution

It is recognised in the UK that alternative dispute resolution (ADR)—the more common term than consensual dispute resolution (CDR) in the UK—and notably mediation, involving independent expertise, may help in dealing with complexities associated with competition litigation, such as causation, quantum, and distribution issues, in an attempt to reach a negotiated solution between parties.148 Although there is no mention of ADR or settlements in the 2013 Commission Recommendation on collective redress,149 the Consumer Rights Act 2015 contains provision for a collective redress settlement scheme,150 and also for a certified voluntary redress scheme, without adopting any specific measures in relation to ADR. There is anecdotal evidence that more competition claims are being resolved by mediation and this has been supported by recent empirical research.151

Article 18 of the Directive provides for suspensive and other effects of CDR, but the Government decided not to implement Article 18, which provides for the explicit suspension of limitation periods in circumstances where CDR is undertaken and for courts to suspend proceedings for up to two years if parties enter into CDR after a claim has been raised. The UK Government did not agree with the two-year limitation here, which was ‘not in the spirit of the Directive in relation to the problem this provision is trying to address’ as there were already sufficient case management powers to deal with cases involving CDR. Furthermore, there was no need to implement Article 18(3), which provides for a competition authority to consider compensation paid through CDR as a mitigating factor in the assessment (p. 401) of a fine on the basis that the CMA can already take mitigating factors into account. Article 19 required legislative implementation and this was introduced in para 37 in relation to the effect of CDR on the amount of a claim, for the settling infringer, and on contribution between defendants.

3.9  Collective redress

It is generally recognised that effective justice requires appropriate collective redress mechanisms to ensure that ultimate consumers can seek compensation for overcharges as a result of competition law infringements. Although there was no specific debate on collective redress in the UK in implementing the Directive, as will become clear, there has been considerable development in this context in the UK, with domestic reform not fully constrained by the EU Commission scepticism regarding opt-out mechanisms.

Section 47B of the Competition Act 1998 allowed follow-on damages claims to be brought before the CAT by a specified body on behalf of two or more consumers who have claims in respect of the same infringement152—a form of ‘consumer representative action’.153 There was only one, albeit high-profile, section 47B claim: Consumers’ Association v JJB Sports plc,154 in relation to football shirts.155 Ultimately, this action, following a day of mediation, with only 144 consumers becoming party to the action, was settled on the basis of compensation up to a maximum of £20 per individual consumer,156 and the action was withdrawn. The clear limitations of the specialist representative action introduced in 2002 under section 47B, notably the low participation rates in opt-in schemes due to a lack of incentives,157 were widely acknowledged. Subsequently, in 2012, the Department for Business, Innovation and Skills in the UK (‘BIS’) consulted on proposals to reinforce the system of private enforcement in the UK.158 The key proposal by BIS, at least in the context of collective redress, was to recommend the adoption of an opt-out representative collective action for consumers and businesses (in follow-on and stand-alone claims),159 together with mechanisms for CAT-approved collective (p. 402) settlements. These BIS recommendations were included in reforms made to the existing Competition Act regime by the Consumer Rights Act 2015. The Act was given royal assent on 26 March 2015 and the changes to the Competition Act 1998 regime, introduced by section 81 of and Schedule 8 to the 2015 Act, came into effect on 1 October 2015.160 The new section 47B of the Competition Act 1998 provides for both opt-out and opt-in collective proceedings before the CAT, and is no longer limited to opt-in proceedings. However, the UK parliamentary debates concerning these central aspects of an effective opt-out procedure were clearly impacted by concerns about the consequences of potentially introducing an American-style litigation process and culture. Accordingly, it was stressed during the passage of the Bill that ‘safeguards’ would be built into the UK collective action model.161 These safeguards are effectively: a requirement for the CAT to certify that a representative is suitable to bring proceedings;162 a ban on exemplary damages awards; and the prohibition of damages-based agreements.163 Tribunal rules were adopted after a full consultation process164 and the CAT was deemed to be best placed to exercise the discretion which would be inherent in achieving the underlying aims of the legislation in applying those rules.165 The legislation provides for the CAT to make a collective proceedings order (‘CPO’)166 and a key aspect of the CAT’s role is to determine: whether to specify the proceedings as opt-out collective proceedings, involving determination of eligibility as a collective proceeding; whether it should be on an opt-in or opt-out basis; and the appointment of a suitable class representative. These are dealt with in fuller detail in the Competition Appeal Tribunal Rules 2015,167 with the rules on collective actions and settlements set out in Part V. The relevant certification process provision is set out in rules 77–79. Of course, the nature of the representative and whether they will be overly or adequately incentivised to pursue this type of litigation depends greatly on the funding mechanisms available.168

Despite the existence of the new opt-out collective redress scheme, the real difficulties in obtaining successful collective redress for consumers has been exemplified by the first two rulings under the new regime. In Gibson v Pride Mobility Products,169 (p. 403) the application for a CPO was adjourned for the applicant to return with an amended claim form, but the claim was subsequently withdrawn and the applicant held liable for the defendants’ costs of the proceedings. The fundamental difficulties here lay in the related issues of the limited scope of the infringement decision and the requisite boundaries of a follow-on action,170 and the consequent impact of the decision on the various sub-classes of claimant. In order to grant a CPO, the CAT required the applicant to propose revised sub-classes and a methodology which focused on the effects of the agreements that were the subject of the infringement decision. The applicant would also need to consider in more detail both quantification and causation given that much of the losses claimed would be on the basis of the umbrella effects of the infringements on the prices charged by other Pride retailers and for other Pride models in addition to the other requirements for a CPO.

In Merricks v Mastercard,171 the claims were held by the CAT not to be certifiable under rule 79 of the 2015 Rules as eligible for inclusion in collective proceedings. Merricks sought to bring proceedings on behalf of a class defined as individuals who, between 22 May 1992 and 21 June 2008, had purchased goods and/or services from businesses selling in the UK that had accepted Mastercard cards, provided that those individuals were (a) resident in the UK at the time and (b) aged 16 or over. The claim was for an aggregate sum of circa £14 billion, including interest, and the class was considered to be around 46.2 million people in a follow-on claim based on Mastercard’s setting of the MIF which applied as a fall-back between banks in the UK. The case failed not because not all the issues in the case were common issues across the claimants, but on the suitability test on the basis that the applicant had failed to put forward (1) a sustainable methodology to be applied in practice to calculate a sum which reflected the aggregate of the individual claims, and (2) a reasonable and practicable means for establishing the individual loss to be used a basis for distribution.172 Accordingly, one may query whether the advanced opt-out collective redress mechanism in the UK might be challenged on EU law ‘effectiveness’ grounds?

3.10  Litigation costs and funding

There is no Directive or transposition consideration of these key issues for competition litigation. The English rules of costs-shifting, the likelihood of paying up-front costs and the other side’s costs if unsuccessful, are potentially major disincentives to raising a competition law damages action, compounded by the complexity and heavy costs involved in competition cases due to the economic and considerable documentary evidence required to advance a claim.173 Presently, CPR 44.3 provides the basic (p. 404) rule in the High Court that the loser pays, although there are limited exceptions and cost control mechanisms: estimates of costs and costs-capping. Moreover, the potential costs of the other party can be insured against using after-the-event (‘ATE’) insurance.174 In comparison, the CAT has a discretionary cost power175 and the CAT’s flexibility in this context was demonstrated in BCL Old Co v Aventis I and Emerson IV, which suggests that cost pressures may be reduced for claimants before the CAT.176

The availability of contingency fees for lawyers in the USA has been central in incentivising the raising of class actions on behalf of consumers. In the legal systems of the UK, particularly England and Wales, there has been a considerable shift towards the use of alternative legal fee arrangements over the last 15 years.177 Conditional fee arrangements, involving a success percentage uplift (of up to 100%) of a standard fee, are common, albeit following the Jackson Report,178 the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) has prohibited the recovery of success fees and ATE insurance premiums from the unsuccessful party.179 Following the introduction of the Damages-Based Agreements Regulations 2013,180 damages-based agreements (DBAs), where a lawyer’s fee is contingent upon the success of the claim and is calculated as a percentage of the compensation received by the claimant, have been permissible generally in civil cases, to incentivise lawyers to pursue more risky and work-intensive cases. In Scots law, the award of costs generally flows from success.181 Most litigation in Scotland is funded by the parties themselves. However, there are various alternate methods of funding litigation. Solicitors may enter into speculative fee agreements with their clients whereby the client is only liable to pay the solicitor’s fees if the litigation is successful.182 Scots law also allows third-party funding of litigation.183 The Taylor Review into the Expenses and Funding of Civil Litigation in Scotland published its report in September 2013 and proposed various reforms, including the introduction of DBAs in relation to monetary claims.184 This recently led to the passing of the Civil Litigation (Expenses and (p. 405) Group Proceedings) (Scotland) Act 2018 which should facilitate the funding of civil litigation in Scotland.

Although the Jackson Report had specifically identified DBAs as a way of funding collective actions,185 the Government decided to prohibit DBAs in collective actions cases in the CAT. Section 47C(8) of the Competition Act 1998, as amended, provides statutory expression to the Government’s intention by providing that ‘a damages-based agreement is unenforceable if it relates to opt-out collective proceedings’.186 The uncertainty suggests a potentially crucial role, particularly in relation to class claimant representative actions, for external investment in the form of third-party funding.187 Third-party funding is certainly key in practice, demonstrated in relation to a dispute about the costs of the defendant in Merricks v Mastercard:188

‘[T]he Government in promoting the legislation therefore clearly envisaged that many collective actions would be dependent on third party funding, and it is self-evident that this could not be achieved unless the class representative incurred a conditional liability for the funder’s costs, which could be discharged through recovery out of the unclaimed damages.’189

Nonetheless, the difficulties encountered in that case and Gibson v Pride Mobility Scooters Ltd may disincentivise third-party funders from involvement, although this may change in the light of practice, damages awards, and settlement approvals by the CAT over a period of time.

3.11  Specialised court structure

Again, there is no specific provision in the Directive nor indeed any discussion in the implementation process about a specialist court because of the existing specialised role of the CAT. Since the Enterprise Act 2002 reforms, the CAT has played a significant role in UK competition law enforcement generally, it has a key specific function in relation to private enforcement, and its role has been significantly enhanced following the introduction of the Consumer Rights Act 2015. The CAT is presided over by a president, who must be a senior legally qualified person with appropriate knowledge and experience.190 Anecdotal evidence from practitioners (p. 406) indicates that there has been a considerable increase in competition claims raised at the High Court in recent years, with a number of disputes related to prior infringement decisions, particularly by the European Commission, much of which is settled.191 However, the role of the CAT has expanded following the introduction of the Consumer Rights Act as of 1 October 2015, and it is more likely now that it will eventually become the focus of private enforcement in the UK. A central aspect of the reform was the extension of the competence of the CAT under section 47A of the Competition Act 2015 to stand-alone actions in addition to follow-on actions where there is a prior infringement decision.192 This will mean that claimants will not have to wait until an infringement decision by the CMA or Commission becomes final before raising an action before the CAT, or alternatively raise an action at the High Court.193 Furthermore, the CAT now has power (at least in proceedings in England and Wales and Northern Ireland) to grant injunctions.194

4.  Concluding Remarks

Over the last 20 years, the courts in the UK have become increasingly attractive as a forum for private litigation involving infringements of domestic and EU competition law rules. This is partly as a result of the introduction of a range of legal, procedural, and institutional mechanisms, including the specialist CAT, the role of which has been enhanced recently, although it is not an exclusive forum for competition law disputes in the UK. The UK’s attractiveness as a forum reflects the experience of the established competition law claimant and defence Bar in London, and the availability of alternative forms of funding and incentives to litigate. It is uncertain to what extent the various provisions in the Directive will further facilitate damages actions, although the greatest threat to the continued significance of the UK courts as an international forum arises from the impending exit of the UK from the European Union, and the consequent concerns regarding reciprocal recognition and enforcement of judgments.

(p. 407) The implementation process was undertaken through BEIS, the government department concerned with competition policy. Although the Government stated that its approach was ‘light-touch’ implementation, the main parts of the Directive, with only a few omissions in relation to areas of law for which implementation was considered unnecessary, were copied out more or less literally. The scope of the implementing Regulations was limited strictly to competition law damages actions, though (as with many MS) extended to include cases involving purely domestic law infringements. There was a lengthy, slow consultation period, which resulted in slightly late implementation, and the main dilemma in the consultation was how to effectively balance consumer and business interests. The process culminated in delegated legislation which revised the existing mechanisms for private enforcement in the UK, primarily in the Competition Act 1998. The implementation process did not consider the important issues of specialist courts, funding mechanisms, or collective redress, although the UK legal systems are already fairly well advanced in relation to each of these issues, despite the difficulties in obtaining successful collective redress to date.

Although the Directive ostensibly sets out to facilitate private enforcement, the rules on disclosure incorporating an explicit proportionality test may indeed be more restrictive, and there are specific restrictions in relation to leniency documentation and settlement submissions. Moreover, there are particular limitations on the potential liability of immunity recipients and SMEs. A key underlying problem is that the Directive did not tackle the issue of attribution of liability and the appropriate concept of an ‘undertaking’ for the purposes of civil liability in relation to parent or group company liability, and there remains uncertainty as to whether EU case-law in the public enforcement context will be followed by the courts, although the CAT ruling in Sainsburys v Mastercard indicates that this is likely. There remain uncertainties in relation to joint and several liability, and in particular how to assess the relative contribution of co-infringers. However, the Directive and implementing Regulations clarify issues such as the burden of proof in relation to the passing-on defence and also make clear that exemplary damages will no longer be recoverable in competition law damages actions. As has been stressed, the most considerable reform instituted by the Directive and implementing Regulations concerns the limitation rules, particularly in relation to the trigger point, although it was suggested that the non-application of the new limitation provisions in cases where the infringement has begun before commencement, but is continuing, may be incompatible with the Directive, which specifically provides that the limitation period will not commence until after the cessation of the infringing behaviour.195 Moreover, more generally, the transitional provisions, as implemented in the UK by the 2017 Regulations, will mean that it is likely to be a considerable period before the Directive’s provisions are applicable and have any impact in relation to competition litigation in the UK courts.(p. 408)

Footnotes:

1  See section 60 of the Competition Act 1998.

2  It should also be noted at this stage that there are differences as between the separate legal systems within the UK.

3  See B Rodger and A MacCulloch (eds), The UK Competition Act: A New Era for UK Competition Law (Oxford: Hart, 2000); and B Rodger (ed), Ten Years of UK Competition Law Reform (Dundee: DUP, 2010).

4  See SRM Wilks, In the Public Interest: Competition Policy and the Monopolies and Mergers Commission (Manchester: MUP, 1999).

5  See D Bailey, ‘The early case-law of the Competition Appeal Tribunal’ in B Rodger (ed), Ten Years of UK Competition Law Reform (Dundee: DUP, 2010), ch 2.

6  See UK National Report, available at http://clcpecreu.co.uk.

7  As introduced by section 18 of the Enterprise Act 2002.

8  For a fuller discussion of the CAT, its role, functions, and caseload, see D Bailey, ‘The early case law of the Competition Appeal Tribunal’ in B Rodger (ed), Ten Years of UK Competition Law Reform (Dundee: DUP, 2010), ch 2.

9  See M Furse, ‘Follow-on actions in the UK: litigating section 47A of the Competition Act 1998’ (2013) 9(1) European Competition Journal 79–103.

10  Section 47B(1) and (4).

11  See now section 47A(5) of the Act, as amended by the Consumer Rights Act 2015.

12  As subsequently demonstrated, for example, in Devenish Nutrition Ltd v Sanofi-Aventis SA (France) [2007] EWHC 2394 (Ch); [2008] EWCA Civ 1086 (CA).

13  See The Consumer Rights Act 2015 (Commencement No. 3, Transitional Provisions, Savings and Consequential Amendments) Order 2015, SI 2015/1630. See also para 4(2) of Schedule 8 to the Consumer Rights Act 2015 and the discussion at subsection 3.2 in relation to limitation periods.

14  See subsection 3.9 re the reforms introduced by the Consumer Rights Act 2015.

15  See, for instance, Cooper Tire & Rubber Co v Shell Chemicals UK Ltd [2010] EWCA Civ 864. See also Nokia Corporation v AU Optonics Corporation and others [2012] EWHC 732 (Ch) and Toshiba Carrier UK Ltd and others v KME Yorkshire Ltd and others [2011] EWHC 2665 (Ch).

16  Emerson III [2008] CAT 8 involving claims against parties who had appealed to the General Court.

17  See A Andreangeli, ‘The changing structure of competition enforcement in the UK: the Competition Appeal Tribunal between present challenges and an uncertain future’ (2015) 3(1) JAE 1–30; A Robertson, ‘UK competition litigation: from Cinderella to Goldilocks?’ (2010) 9 Competition Law Journal 275. A number of claims have already been raised before the CAT under these new provisions: see http://www.catribunal.org.uk/237/all/2/Cases.html. See B Rodger, ‘The Consumer Rights Act 2015 and collective redress for competition law infringements in the UK: a class Act?’ (2015) 3(2) JAE 258–86 and the discussion at subsection 3.9.

19  Although there is anecdotal evidence of some practitioner criticism that views on particular issues expressed by the CAT User Group were ignored in the final version of the draft Regulations.

21  Ibid, Executive Summary, p 3.

22  See UK Government, Guiding Principles for EU Legislation, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/137696/bis-13-683-gold-plating-review-the-operation-of-the-transposition-principles-in-the-governments-guiding-principles-for-eu-legislation.pdf; V Miller, ‘Making EU law into UK law’, House of Commons Library SN/IA/7002, 22 October 2014, available at http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN07002; and Department for Business, Innovation & Skills, Gold-Plating Review: The Operation of the Transposition Principles in the Government’s Guiding Principles for EU Legislation, March 2013, available at https://www.gov.uk/government/publications/gold-plating-review-operation-of-the-transposition-principles-in-the-government-s-guiding-principles-for-eu-legislation. See also D Greenberg, ‘The “copy-out” debate in the implementation of European Union law in the United Kingdom’ (2012) 6(2) Legisprudence 243–56.

23  This chapter was completed after the UK served notice to leave the EU under Article 50 TEU and after the publication of the European Union (Withdrawal) Bill. The chapter will discuss the potential implications of the implementation of the Directive in the UK, but will not consider in any detail the likely impact of the UK’s exit from the EU on the development of competition litigation in the courts of the UK.

24  Which introduces section 47F and Schedule 8A (‘Further provision about claims in respect of loss or damage before a court or the Tribunal’) to the Competition Act 1998. Other provisions will be implemented through rules made by the Civil Procedure Rules Committee, the Scottish Civil Council Justice Secretariat, and the NI Court of Judicature Rules Committee, respectively, in addition to specific rules for the CAT.

25  See V Miller, ‘Legislating for Brexit: statutory instruments implementing EU law’, House of Commons Library Briefing Paper No. 7867, 16 January 2017, available at http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7867.

27  Although omitting a detailed consideration of the potential impact of the new contribution regime.

28  See J Rathod and S Vaheesan, ‘The arc and architecture of private enforcement regimes in the United States and Europe: a view from across the Atlantic’ (2015) 14 UNHLR 303–75. See also JP Davis and RH Lande, ‘Restoring the legitimacy of private antitrust enforcement’ in American Antitrust Institute, A Report to the 45th President, University of Baltimore School of Law Legal Studies Research Paper No. 2018-02 (2017), ch 6, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2962579.

29  See B Rodger, ‘Implementation of the Antitrust Damages Directive in the UK: limited reform of the limitation rules?’ (2017) 5 ECLR 219–27.

30  See, for example, Deutsche Bahn AG v Morgan Crucible Company Plc and others [2012] EWCA Civ 1055. See the earlier CAT ruling at [2011] CAT 16, 9 April 2014, and the appeal at Deutsche Bahn AG and others v Morgan Advanced Materials Plc (formerly Morgan Crucible Co Plc) [2014] UKSC 24. See also P Akman, ‘Period of limitations in follow-on competition cases: when does a “decision” become final?’ (2014) 2(2) JAE 389–421.

31  Limitation Act 1980, section 2. See, for example, Wm Morrison Supermarkets Plc v Mastercard Inc [2013] EWHC 3271 (Comm).

32  See, for example, Arcadia Group Brands and others v Visa Inc and others [2015] EWCA Civ 883, discussed further below. In Scotland, non-personal injury delictual claims have a prescriptive period of five years (Prescription and Limitation (Scotland) Act 1973, section 6). See D Johnson, Prescription and Limitation, 2nd edn, SULI series (Edinburgh: W. Green, 2012). When the pursuer is unaware of the loss, harm, or damage they have suffered, the prescriptive period runs from the point they did, or reasonably should have, become so aware: section 11(3).

33  See http://competitionbulletin.com/2015/10/01/private-actions-the-cra-2015-giveth-and-the-2015-cat-rules-taketh-away/. See Case 1240/5/7/15 Deutsche Bahn AG and others v Mastercard Inc and others [2016] CAT 13, 27 July 2016. Here, since the CAT claim was commenced after 1 October 2015, but arose well before that date, it was governed by this transitional regime.

34  See Regulations, para 18.

35  This provides:

  1. (1)  Where a competition authority investigates an infringement of competition law, the period of the investigation is not to be counted when calculating whether the limitation or prescriptive period for a competition claim in respect of loss or damage arising from the infringement has expired.

  2. (2)  The period of an investigation by a competition authority begins when the competition authority takes the first formal step in the investigation.

  3. (3)  The period of an investigation by a competition authority ends—

    1. (a)  if the competition authority makes a decision in relation to the infringement as a result of the investigation, at the end of the period of one year beginning with the day on which the decision becomes final, and

    2. (b)  otherwise, at the end of the period of one year beginning with the day on which the competition authority closes the investigation.

36  P Scott, M Simpson, and J Flett, ‘Limitation periods for competition claims: the English patient’ [2011] GCLR 18; V Soyez, ‘The commencement of the subjective limitation periods in private competition litigation’ [2013] GCLR 7.

37  V Soyez, ‘The commencement of the subjective limitation periods in private competition litigation’ [2013] GCLR 7.

38  See Arcadia v Visa [2015] EWCA Civ 883.

39  Ibid.

40  [2014] UKSC 48, [2014] SLT 791, [2014] SCLR 711.

41  Under section 11 of the Prescription and Limitation (Sc) Act 1973.

42  See Case C-406/08 Uniplex (Uk) Ltd v NHS Business Services Authority [2010] 2 CMLR 47 in relation to limitation periods for proceedings relating to public procurement under Directive 89/665.

43  See discussion at subsection 1.2.

44  Implementing the EU Directive on Damages for Breaches of Competition Law: Government Response, December 2016, paras 57–62.

45  This may not be compatible with the Directive, which focuses on when the activity ceases as the limitation period cannot start until that date.

46  In England and Wales, see section 1 of the Foreign Limitation Periods Act 1984; in Scotland, see section 23A of the Prescription and Limitation (Sc) Act 1984; see also Case 1240/5/7/15 Deutsche Bahn AG and others v Mastercard Inc and others [2016] CAT 13, 27 July 2016; Case 1244/5/7/15 Peugeot Citroën Automobiles UK LTD and others v Pilkington Group Ltd and others [2016] CAT 14.

47  Article 10(2).

48  See B Rodger, ‘Implementation of the Antitrust Damages Directive in the UK: limited reform of the limitation rules?’ (2017) 5 ECLR 219–27.

49  For discussion of the difficulties in terms of the scope of the section 47A procedure, see J Dodds and B Rayment, ‘WH Newson Holding Ltd and others v IMI Plc: new developments in the jurisdiction of the UK Competition Appeal Tribunal’ (2013) 25(8) ECLR 395; see also the subsequent ruling by the Court of Appeal in WH Newson Holding ltd and others v IMI Plc [2013] EWCA Civ 1377.

50  See the discussion by the Court of Appeal in Enron Coal Services Ltd (in liquidation) v English, Welsh and Scottish Railway Ltd [2011] EWCA Civ 2.

51  Section 58A(2) of the Competition Act 1998.

52  Section 58A(3) of the Competition Act 1998. See also Article 16 of Regulation 1/2003 in relation to Commission decisions. See the discussion in Enron Coal Services Ltd (in liquidation) v English, Welsh and Scottish Railway Ltd [2011] EWCA Civ 2.

53  See para 37 of Schedule 5(1) to the Enterprise and Regulatory Reform Act 2013 .

54  See Enron Coal Services Ltd (in liquidation) v English, Welsh and Scottish Railway Ltd [2009] CAT 7 and on appeal at [2009] EWCA Civ 647; see also the subsequent Court of Appeal ruling in the same case [2011] EWCA Civ 2. See also Emerson Electric Co v Morgan Crucible Co Plc [2011] CAT 4.

55  Case 1106/5/7/08. See also the earlier Case 1029/5/7/04 Deans Foods Ltd v Roche Products Ltd, available at http://www.catribunal.org.uk/237-593/1029-5-7-04-Deans-Foods-Limited.html, in which one issue was whether the prior decision allowed claims in relation to yellow carophyll in addition to red carophyll.

56  It is concerned with causation and quantum only.

57  The so-called ‘EME’ overcharge in relation to coal hauled to two power stations owned by Edison Mission Energy.

58  EWS Ltd v Enron Coal Services Ltd (in liquidation) [2009] EWCA Civ 647, per Patten LJ, at para 59. He also stressed at para 60 that the CAT ‘should have decided whether it was clear from the Decision that a finding of infringement had been made which covered the pleaded claims’.

59  This was reinforced by the subsequent Court of Appeal decision in the case in relation to the issue of binding questions of fact. See the discussion in Enron Coal Services Ltd (in liquidation) v English, Welsh and Scottish Railway Ltd [2011] EWCA Civ 2; T Woodgate and I Filippi, ‘The decision that binds: follow-on actions for competition damages after Enron’ (2012) 34(3) ECLR 175–8.

60  [2011] CAT 4.

61  Ibid, at para 59.

62  [2012] EWCA Civ 1559.

63  [2017] CAT 9.

64  Ibid, at para 109.

65  Ibid.

66  In relation to the CAT, the revised section 58A effectively replaces the old section 47A(9) of the Competition Act 1998, which provided: ‘In determining a claim to which this section applies the Tribunal is bound by any decision mentioned in subsection (6) which establishes that the prohibition in question has been infringed.’

67  Section 58A(4).

68  Case C-344/98 Masterfoods [2000] ECR I-11369.

69  Unlike some other MS, see B Rodger (ed), Competition Law. Comparative Private Enforcement and Collective Redress across the EU (Alphen aan den Rijn: Kluwer Law International, 2014), ch 2.

70  Article 9(2).

71  See B Rodger ‘Competition law litigation in the UK courts: a study of all cases to 2004—part I’ [2006] ECLR 241, ‘Competition law litigation in the UK courts: a study of all cases to 2004—part II’ [2006] ECLR 279, and ‘Competition law litigation in the UK courts: a study of all cases to 2004—part III’ [2006] ECLR 341; B Rodger, ‘Competition law litigation in the UK courts: a study of all cases 2005–2008, part I’ [2009] GCLR 93–114; B Rodger, ‘Competition law litigation in the UK courts: a study of all cases 2005–2008, part II’ [2009] GCLR 136–47; B Rodger, ‘Competition law litigation in the UK courts: a study of all cases 2009–2012’ (2013) 6(2) GCLR 55–67; B Rodger, ‘Competition law private enforcement in the UK courts: case-law developments 2013–2016’ [2017] GCLR 126–41.

72  See fn 73.

73  ‘The court may strike out a statement of case if it appears to the court that the statement of case discloses no reasonable grounds for bringing or defending the claim.’ See, for instance, Humber Oil Terminals v Associated British Ports [2011] EWHC 352 (Ch), at para 15; see also, in particular, Roth J in Sel-Imperial Ltd v the British Standards Institution [2010] EWHC 854 (Ch), at paras 17 and 18.

74  For application of the principles, see Bord Na Mona Horticulture Ltd v British Polythene Industries plc [2012] EWHC 3346 (Comm).

75  Hughes v Colin Richards & Co [2004] EWCA Civ 266.

76  See Cooper Tire & Rubber Co v Shell Chemicals UK Ltd [2010] EWCA Civ 864. See, for instance, Sales J in Nokia Corporation v AU Optonics Corporation [2012] EWHC 731 (Ch), at paras 62–7. See also Flaux J in Bord Na Mona Horticulture Ltd v British Polythene Industries plc [2012] EWHC 3346 (Comm), at para 30. The equivalent provision for the CAT is rule 43 of the Competition Appeal Tribunal Rules 2015.

77  Civil Procedure Rules, Part 31, in particular CPR 31.6(b). See rules 60–5 of the Competition Appeal Tribunal Rules 2015.

78  There is also the possibility of specific disclosure where appropriate. The process is known as ‘recovery’ in Scots law.

79  See, for instance, P Guidici, ‘Private antitrust law enforcement in Italy’ (2004) 1 Competition Law Review 61.

80  See Hutchison 3G UK Ltd v O2 (UK) Ltd [2008] EWHC 50 (Comm). See also CPR 18.

81  4 December 2013, [2013] EWHC 3788 (Ch).

82  The High Court was not limited by section 47A to claims only against the companies that were addressees of the infringement relied upon.

83  6 May 2014, [2014] EWHC 1055 (Ch).

84  B Rodger (ed), Competition Law: Comparative Private Enforcement and Collective Redress across the EU (Alphen aan den Rijn: Kluwer Law International, 2014), ch 2.

85  At para 71.

86  CPR 31C and CAT Practice Direction relating to disclosure and inspection of evidence in claims made pursuant to Parts 4 and 5 of the Competition Appeal Tribunal Rules 2015.

87  See, for example, A Singh, ‘Pfleiderer: assessing its impact on the effectiveness of the European leniency programme’ (2014) 35(3) ECLR 110–23.

88  Case C-360/09 Pfleiderer v AG Bundeskartellamt [2011] ECR I-5161.

89  [2012] EWHC 869 (Ch).

90  Ibid, at paras 30 and 31.

91  Case C-536/11 Donau Chemie et al. [2013] 5 CMLR 19, at para 49.

92  [2012] EWHC 869 (Ch).

93  Ibid, at para 44.

94  Ibid, at para 50.

95  The court ordered limited disclosure of certain redacted paragraphs from the confidential decision and deemed that all other leniency materials were not sufficiently relevant. See NH Enderndorf and N Maierhofer, ‘The road after Pfleiderer: Austrian preliminary reference raises new questions on access to file by third parties in cartel proceedings’ [2013] ECLR 78.

96  See Article 6(6). See C Rey, ‘The interaction between public and private enforcement of competition law, and especially the interaction between the interests of private claimants and those of leniency applicants’ (2015) 8(3) GCLR 109–25.

97  See I Liaonos, P Davis, and P Nebbia, Damages Claims for Infringement of European Competition Law (Oxford: OUP, 2015), in particular ch 6.

98  Despite the publication of the Commission Communication and Practical Guide on Quantifying Harm in Antitrust Damages, 2013, both available at http://ec.europa.eu/competition/antitrust/actionsdamages/quantification_en.html. See N Dunne, ‘The role of private enforcement within EU competition law’ (2014) 16 Cambridge Yearbook of European Legal Studies 143–87, at 165.

99  See, for instance, C Petrucci, ‘The issues of the passing-on defence and indirect purchasers’ standing in European competition law’ [2008] ECLR 33 and note the provision in the Antitrust Damage Directive, discussed below at subsection 3.5.

100  See S Peyer, ‘Compensation and the Damages Directive’ (2016) 12(1) European Competition Journal 87–112. See also for instance, SF Deakin, AC Johnston, and BS Markesinis, Markesinis and Deakin’s Tort Law, 7th edn (Oxford: OUP, 2013).

101  Article 4.

102  For the application of the rules on statutory liability in a competition law context in the UK, see Mid Kent Holdings plc v General Utilities plc [1996] 3 All ER 132. The major problem, as was indicated by Hoskins, lies in the fact that breaches of the competition rules can have large-scale effects on a whole market: Mark Hoskins, ‘Garden Cottage revisited: the availability of damages in the national courts for breaches of the EEC competition rules’ [1992] 6 ECLR 257. See Cardozo CJ in Ultramares Corporation v Touche 255 NY 170 (1931).

If a competition claim is based on the tort/delict of conspiracy to injure, the scope of liability would necessarily be limited by the intention to injure requirement.

103  The main concern is the ‘floodgates’ argument that if everyone who suffered financially could sue, there would be liability in an indeterminate amount for an indeterminate period to an indeterminate class of people. See Cardozo CJ in Ultramares Corporation v Touche 255 NY 170 (1931).

104  For instance, see Safeway Stores Ltd v Twigger [2010] EWCA 1472, where the Court of Appeal rejected a claim for damages by a claimant against an employee who it claimed was personally responsible for a competition law infringement committed by the claimant for which it was sanctioned by the Office of Fair Trading. See also, in a related context, Jetivia SA v Bilta (UK) Ltd (in liquidation) [2015] UKSC 23, [2015] 2 WLR 1168, and A Robertson, ‘Pulling the Twigger: directors and employees back in the firing line for damages after Jetivia in the Supreme Court?’ (2015) 35(8) ECLR 325–6.

105  Crehan v Inntrepreneur Pub Company (CPC) [2004] EWCA Civ 637, [2004] ECC 28.

106  Ibid.

107  Cf the different quantification of damages by Park J at first instance in the same case at Crehan v Inntrepreneur CPC [2003] EWHC 1510 (Ch). The House of Lords did not rule on the key remedy issue or on the appropriate quantification of damages: see Crehan v Inntrepreneur CPC [2007] 1 AC 333, HL.

108  [2012] CAT 19.

109  Discussed further below.

110  [2013] CAT 6.

111  See I Liaonos, P Davis, and P Nebbia, Damages Claims for Infringement of European Competition Law (Oxford: OUP, 2015), ch 4. See also Arkin v Borchard Lines Ltd and others [2003] EWHC 3088 (Comm); M Kolmes and P Lennon, ‘Causation: the route to damages’ [2004] ECLR 475–8.

112  In paragraph 2-09 of M Jones (ed), Clerk & Lindsell on Torts, 22nd edn (London: Sweet & Maxwell, 2017), the test is described in the following way: ‘The “but for” test asks: would the damage of which the claimant complains have occurred “but for” the negligence (or other wrongdoing) of the defendant?’ The Scots law of causation is more or less equivalent: see, for example, B Pillans, ‘Causation’ in J Thomson (ed), Delict, SULI series (Edinburgh: W. Green, 2007), ch 7.

113  For instance, a claim of at least £6.8 million in respect of the loss of a capital asset and a £10 million claim for the lost value of a commercial opportunity.

114  Note that the CAT ordered interest to be payable by Dŵr Cymru on those sums at an annual rate of 2% above the base rate from the date of infringement until payment. An additional claim for exemplary damages was rejected by the Tribunal.

115  Enron Coal Services Ltd (in liquidation) v English, Welsh & Scottish Railway Ltd [2009] CAT 36.

116  There was ample evidence about the unwillingness of EME to enter into a long-term coal supply contract.

117  14 July 2016, Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 11.

118  See paras 267 and 548.

119  See para 423.

120  See para 423(3).

121  At paras 527–47, and note the conclusions in particular at para 546.

122  21 December 2016, Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 26.

123  J Edelman, Gain-Based Damages, Contract, Tort, Equity and Intellectual Property (Oxford: Hart, 2002). See Lord Nicholls of Birkenhead in Att-Gen v Blake [2001] 1 AC 268, at 285. Cf Lord Blackburn in Livingstone v Rawyards Coal Co (1879–80) LR 5 App Cas 25, at 39.

124  See Rookes v Barnard [1964] AC 1129; Broome v Cassell [1972] AC 1027; AB v South West Water Services [1993] QB 507.

125  Kuddus v Chief Constable of Leicestershire Constabulary [2001] 2 WLR 1879, HL. Three Law Lords did not express concluded opinions, but were clearly in favour of the possibility of making such awards.

126  Devenish Nutrition Ltd v Sanofi-Aventis SA [2008] EWCA Civ 1086; see A MacDougall and A Verzariu, ‘Vitamins litigation: unavailability of exemplary damages, restitutionary damages and account of profits in competition law claims’ (2008) 29 ECLR 181–4.

127  See 2 Travel Group plc (in liquidation) v Cardiff City Transport Services [2012] CAT 19.

128  Ibid; C Veljanovski, ‘CAT awards triple damages—well not really: Cardiff Bus and the dislocation between liability and damages for exclusionary abuse’ [2012] ECLR 47–9.

129  Per the CAT at 494 (‘rightly in our view, given the importance of whistleblowing, both from the policy perspective of deterring cartels and from a practical perspective of uncovering cartels’).

130  Discussed at subsection 3.9.

131  See also Recital 13.

132  See F Hoseinian, ‘Passing-on damages and community antitrust policy: an economic background’ (2005) 28(1) World Competition 3–23; C Petrucci, ‘The issues of the passing-on defence and indirect purchasers’ standing in European competition law’ [2008] ECLR 33.

133  14 July 2016, Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 11.

134  Ibid.

135  At paras 479 et seq; see in particular para 480.

136  [2016] CAT 11, paras 13 and 14.

137  At para 481.

138  At para 484: ‘We agree with the submissions of MasterCard, that the pass-on “defence” is no more than an aspect of the process of the assessment of damage. The pass-on “defence” is in reality not a defence at all: it simply reflects the need to ensure that a claimant is sufficiently compensated, and not over-compensated, by a defendant. The corollary is that the defendant is not forced to pay more than compensatory damages, when considering all of the potential claimants.’

139  [2016] CAT 11, at para 484. The Court of Appeal subsequently held that the CAT had been right not to reduce Sainsbury’s damages on this basis: Sainsbury’s Supermarkets Ltd v Mastercard Inc [2018] EWCA Civ 1536, at paras 316–17 and 352.

140  See, for instance, recent discussion by B Wardhaugh, ‘Punishing parents for the sins of their child: extending EU competition liability in groups and to subcontractors’ (2017) 5 JAE 22–48.

141  Although it should be noted that, in Provimi Ltd v Aventis Animal Nutrition SA [2003] EWHC 961 (Comm), at paras 25–34, particularly 33, it was considered that a subsidiary may be liable, in accordance with EU law, where it ‘implemented’ and ‘gave effect’ to the agreements entered into by the undertaking identified in the infringement decision. Cf Cooper Tire v Dow Deutschland [2010] EWCA Civ 864.

142  See, for instance, Tesco Stores Ltd v Mastercard Inc [2015] EWHC 1145 (Ch). See also Unlockd Ltd v Google Ireland Ltd [2018] EWHC 1363 (Ch).

143  14 July 2016, Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 11.

144  See Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 11, at paras 344 et seq; see also B Wardhaugh, ‘Punishing parents for the sins of their child: extending EU competition liability in groups and to subcontractors’ (2017) 5 JAE 22–48.

145  Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [2016] CAT 11, at para 344.

146  Ibid, at para 364.

147  At para 363: ‘[I]n our view a person is not ipso facto liable for an infringement of Article 101 by reason only of the fact that he, she or it is a member of an undertaking responsible as a matter of EU law for the infringement, in circumstances where the person in question neither participated in the infringement nor had decisive influence over the conduct in the relevant market of other member(s) of the undertaking who did participate. We appreciate that in such circumstances it may well be unlikely that the person in question would in fact be held to be part of that “undertaking”.’

148  See KJ Hopt and F Steffek (eds), Mediation: Principles and Regulation in Comparative Perspective (Oxford: OUP, 2012). See C Hodges, ‘Fast, effective and low-cost redress: how do public and private enforcement and ADR compare?’, in B Rodger (ed), Competition Law: Comparative Private Enforcement and Collective Redress (Alphen aan den Rijn: Kluwer Law International, 2014), ch 8, at p 263. See also C Hodges, I Benöhr, and N Creutzfeldt-Banda, Consumer ADR in Europe (Oxford: Hart, 2012).

149  Although note the provisions in Chapter VI on CDR, discussed in I Liaonos, P Davis, and P Nebbia, Damages Claims for Infringement of European Competition Law (Oxford: OUP, 2015), at 3.100–7.

150  Sections 49A and 49B of the revised Competition Act 1998; C Hodges, The Reform of Class and Representative Actions in European Legal Systems: A New Framework for Collective Redress in Europe (Oxford: Hart, 2008), pp. 70f f ; F Weber and WH van Boom, ‘Dutch treat: the Dutch Collective Settlement of Mass Damage Act (WCAM 2005)’ (2011) 1 Contratto e Impresa/Europa 69–79.

151  See B Rodger, ‘Private enforcement of competition law: the hidden story, part II—competition litigation settlements in the UK 2008–2012’ [2015] GCLR 89–108.

152  Section 47B(1) and (4). Subsections 9–10 make provision regarding the specification of a body by the Secretary of State.

153  See, for instance, Case 1078/7/9/07 The Consumers’ Association v JJB Sports plc, a follow-on consumer representative action under these provisions before the CAT in relation to replica kits.

154  Case 1078/7/9/07.

155  As ‘replica football kit’ had become known in the CAT follow-on case. See discussion of the case and its background in B Rodger (ed), Landmark Cases in Competition Law: Around the World in Fourteen Stories (Alphen aan den Rijn: Kluwer Law International, 2012), ch 13.

157  See M Hviid and J Peysner, ‘Comparing economic incentives across EU Member States’ in B Rodger (ed), Competition Law: Comparative Private Enforcement and Collective Redress across the EU (Alphen aan den Rijn: Kluwer Law International, 2014), ch 6.

158  See BIS 12/742, Private Actions in Competition Law: A Consultation on Options for Reform, April 2012, and BIS 14/556, Consumer Rights Bill: Statement on Policy Reform and Responses to Pre-Legislative Scrutiny, January 2014.

159  See Private Actions in Competition Law: A Consultation on Options for Reform—Government Response, January 2013, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/70185/13-501-private-actions-in-competition-law-a-consultation-on-options-for-reform-government-response1.pdf, at paras 5.11–23.

160  The Competition Appeal Tribunal Rules 2015, SI 2015/1648. However, it should be noted that, as a result of rule 119 of the revised CAT rules, the old Competition Act provisions and Tribunal rules on limitation of actions (and the suspensive effect of appeal proceedings) will continue to apply to all claims (including in collective proceedings) to which section 47A applies where the claim arises before 1 October 2015. See Gibson v Pride Mobility Products Ltd [2017] CAT 9.

161  See, for instance, Baroness Hayter of Kentish Town, Grand Committee, House of Lords, 3 November 2014, col 579. See C Hodges and R Money-Kyrle, ‘Safeguards in collective actions’ (2012) 19(4) Maastricht Journal of International and Comparative Law 477–504.

162  Baroness Neville-Rolfe, Grand Committee, House of Lords, 3 November 2014, cols 570–81.

163  More accurately, a provision that declares them to be unenforceable.

165  Baroness Neville-Rolfe, Grand Committee, House of Lords, 3 November 2014, col 582. See also Baroness Neville-Rolfe, Grand Committee, House of Lords, Report, 2nd Sitting, 24 November 2014, cols 743–6.

166  As required under section 47B(4) of the 1998 Act. See section 47B(5)(a) and (6) in particular.

168  See Merricks v Mastercard [2017] CAT 16.

169  [2017] CAT 9.

170  It should be noted that, as a result of the Act’s transitional provisions, the applicant was required to bring this action as a follow-on action, and the distinction between the impact of sections 58 and 58A was also discussed.

171  [2017] CAT 16.

173  See A Riley and J Peysner, ‘Damages in EC antitrust actions: who pays the piper?’ (2006) 31 European Law Review 748.

174  Claimant lawyers are usually paid nothing if they lose, but if they win, they get a base fee (number of hours multiplied by a reasonable rate), plus a success fee, which is a percentage of that, underpinned by after-the-event (ATE) insurance which covers the risk of paying opponents’ costs should they lose.

175  See rule 104 of the Competition Appeal Tribunal Rules 2015, particularly rule 104(2).

176  J Peysner ‘ Costs and financing in private third-party competiton damages claims’ [2006] Comp L Rev 97. See also EU White Paper, at para 2.9, indicating that it would be useful for MS to reflect on their cost rules and to examine the practices existing across the EU.

177  See generally C Hodges, J Peysner, and A Nurse, Litigation Funding: Status and Issues, Joint Report of University of Oxford (Centre for Socio-Legal Studies) and University of Lincoln (sponsored by Swiss Re) (2012); J. Peysner, Access to Justice: A Critical Analysis of Recoverable Conditional Fees and No Win No Fee Funding (London: Palgrave MacMillan, 2014).

178  Review of Civil Litigation Costs: Final Report, December 2009, available at https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-report-140110.pdf.

179  See Coventry and others v Lawrence and another [2015] UKSC 50.

180  SI 2013/609.

181  JA MacLaren, Expenses in the Supreme and Sheriff Courts (Edinburgh: W Green & Son, 1912), 21.

182  Allowed for by section 61A of the Solicitors (Scotland) Act 1980.

183  Quantum Claims Compensation Specialists Ltd v Powell [1998] SC 316.

184  See Sheriff Principal Taylor’s Review of Expenses and Funding of Civil Litigation in Scotland: Report, September 2013, available at http://scotland.gov.uk/About/Review/taylor-review/Report, particularly ch 9 in relation to damages-based agreements.

185  Review of Civil Litigation Costs: Final Report, December 2009, available at https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-report-140110.pdf.

186  Amending section 58AA of the Courts and Legal Services Act 1990. See rule 113 of the Competition Appeal Tribunal Rules 2015. See R Mulheron, ‘The Damages-Based Agreements Regulations 2013: some conundrums in the “brave new world” of funding’ (2013) 32 Civil Justice Quarterly 241–55.

187  See Arkin v Borchard Lines [2005] EWCA Civ 655. See J Peysner, ‘After sub-prime’ [2008] Civil Justice Quarterly 407. For a broader discussion of third-party funding, see R Mulheron, ‘Third-party funding of litigation: a changing landscape’ (2008) 27 Civil Justice Quarterly 312–41; R Mulheron, ‘England’s unique approach to the self-regulation of third-party funding: a critical analysis of recent developments’ (2014) 73(3) Cambridge Law Journal 570–97.

Note, though, Hodges’ scepticism regarding whether such claims would be attractive to litigation funders: C Hodges, ‘Fast, effective and low-cost redress: how do public and private enforcement and ADR compare?’ in B Rodger (ed), Competition Law: Comparative Private Enforcement and Collective Redress across the EU (Alphen aan den Rijn: Kluwer Law International, 2014), ch 8.

188  [2017] CAT 16.

189  Ibid, at para 127.

190  See Schedule 2, para 1(1), to the Enterprise Act 2002. Ordinary members of the CAT are not necessarily lawyers and are generally from a variety of backgrounds, as noted by Buxton LJ in Napp Pharmaceutical Holdings Ltd v DGFT [2002] EWCA Civ 796, para 34. See also House of Lords Select Committee Report, An EU Competition Court, HL Paper 75, 23 April 2007, para 113.

191  See B Rodger, ‘Private enforcement of competition law: the hidden story, part II—competition litigation settlements in the UK 2008–2012’ [2015] GCLR 89–108.

192  Section 47A(2) extends the competence of the CAT to deal with claims involving ‘alleged infringements’. See Flaux J in Bord Na Mona Horticulture Ltd v British Polythene Industries plc [2012] EWHC 3346 (Comm), at paras 39–41.

193  See P Akman, ‘Period of limitations in follow-on competition cases: when does a “decision” become final?’ (2014) 2(2) JAE 389–421. Moreover, it should be noted that, as a result of rule 119 of the revised CAT rules (The Competition Appeal Tribunal Rules 2015, SI 2015/1648), the old Competition Act provisions and Tribunal rules on limitation of actions (and the suspensive effect of appeal proceedings) will continue to apply to all claims (including in collective proceedings) to which section 47A applies where the claim arises before 1 October 2015: see http://competitionbulletin.com/2015/10/01/private-actions-the-cra-2015-giveth-and-the-2015-cat-rules-taketh-away/. See also Gibson v Mobility Pride Scooters Ltd [2017] CAT 9.

194  Section 47A(3). There is also provision for a fast-track procedure in para 31 of Schedule 8 to the 2015 Act.

195  Article 10(2).