McLaren RoRo: Distribution focused on Participation

The ruling’s approval of the Distribution Plan, subject to one modification, is a positive development for class members and the collective proceedings regime as a whole. It recognises that maximising take-up requires a distribution process tailored to compensation levels, evidential requirements and communications.

Background

The proceedings concern the cartel in the deep-sea transportation of vehicles (cars and vans) further to a European Commission Decision of 21 February 2018. The class comprises consumers and businesses who purchased or financed new vehicles affected by the cartel in the UK between 18 October 2006 and 6 September 2015. The Class Representative secured settlements with each of the Defendants, resulting in a total of £92.75 million in settlements.

In an approach now familiar to the collective regime, the settlement sums were divided into separate pots. The first, the Guaranteed Damages Sum, was £34 million for distribution to the class (and/or by way of cy-près to the Access to Justice Foundation). There was a further Additional Damages Sum pot of £21.87 million for distribution to class members if take-up exceeds the guaranteed minimum. If not all of the Additional Damages Sum was distributed, the remaining amounts may be used to pay outstanding costs, fees and disbursements, to the Access to Justice Foundation, or revert to or remain with certain Defendants. There were additional amounts for costs, fees and disbursements, and for the costs of distribution itself. The key figure is the £55.87 million available for distribution to the class.

The question before the CAT was whether the Distribution Plan was fair, reasonable and appropriate. The CAT considered that there were several principal questions arising in assessing the Distribution Plan, including relating to the structure of the plan, compensation amounts, verification and administration, and notice and publicity.

The CAT was concerned that, absent a carefully designed distribution process, there were factors which may deter or prevent class members from coming forward to claim compensation, including the length of time since the relevant vehicle purchases and related difficulties in locating historic records, the modest value of many claims, and limited public familiarity with claiming compensation in collective proceedings. 

The Class Representative therefore undertook an extensive exercise to develop the Distribution Plan, including two phases of survey work, focus groups, engagement with representative organisations and direct discussions with major fleet operators. The CAT was satisfied that this was a serious, evidence-based exercise that supported the Class Representative’s assumption on projected participation.

The Plan provides for a six-month claims period and forecasts approximately £53.97 million reaching class members. 

Worthwhile compensation 

A central issue was the payment structure, which was proposed as being £25 for a class member’s first eligible vehicle, £5 per vehicle for second to sixth vehicles, and £2.50 for seventh and subsequent vehicles.

Defendant WWL/EUKOR argued that the £25 first-vehicle payment would overcompensate claimants and proposed reducing that to £15. The CAT rejected those submissions, stating that distribution was not intended precisely to reproduce each class member’s estimated loss, and that the first-vehicle payment also served the purpose of encouraging class members to submit claims, rather than being purely compensatory.

In contrast, the CAT noted that £2.50 per vehicle for seventh and subsequent vehicles risked discouraging participation by class members with larger claims. As corporate claimants are likely to comprise a significant proportion of take-up and their participation may be one of the principal determinants of the overall success of distribution, the ruling seeks a modification to the Distribution Plan such that class members receive an initial payment of £2.50 for seventh and each subsequent eligible vehicle, with the possibility of a top-up payment up to a further £2.50 per vehicle should sufficient funds remain.

Reducing burdens 

To alleviate concerns that a burdensome verification process would prevent participation, claims involving up to six vehicles can be submitted via self-verification supported by a statement of truth. Larger claims face enhanced verification, including structured data templates, risk-based checks, targeted auditing and requests for documents where appropriate. 
Additionally, DVLA data offers a simplified verification route for fleet claimants, reducing the burden of establishing historic acquisitions. 

The CAT nevertheless had concerns about an onerous process for non-fleet businesses with large claims and which cannot use the simplified DVLA route. The ruling states that this issue was raised with the Class Representative, who will need to bear this in mind when reviewing how in practice such evidential requirements may be modified or waived.

Active engagement and continuing oversight
The communications strategy combines media and advertising, as well as engagement with organisations such as the British Vehicle Rental and Leasing Association, local authorities, Which?, MoneySavingExpert and Nectar. Particular consideration was given to Motability customers, who participate in a UK scheme enabling disabled people, their families and carers to lease a car, with a tailored analysis and communications strategy developed for that group.

Approval is also accompanied by ongoing supervision by the CAT to evaluate the effectiveness of the Distribution Plan in practice. The Class Representative will provide monthly progress reports to the CAT, and the CAT will hold a short hearing after the third report. At the end of the distribution process, the Class Representative’s solicitors will provide a report on the practical operation of the distribution scheme and any lessons that can be drawn from it.

A positive result for a maturing regime

The ruling is a welcome endorsement of the Class Representative’s carefully developed efforts to deliver redress.

The Distribution Plan’s strength lies in combining meaningful compensation, proportionate verification and targeted engagement. Equally, the CAT’s scrutiny shows that a claimant-friendly approach should not come at the expense of safeguards or accountability.

The Distribution Plan does not guarantee a successful take-up, and the test will be the level of compensation that reaches class members, but it provides a framework for pursuing it. If the Class Representative can distribute a significant amount of the Damages Pot to the class members, the distribution and therefore the proceedings generally will be considered a resounding success for the collective regime. 

More generally, the ruling highlights that the collective action regime is maturing, grappling with the lessons of cases that have preceded it and paving a path on which other class representatives can model future distribution.