Competition Appeal Tribunal grants CPO in McLaren opt-out collective claim
The Competition Appeal Tribunal’s conditional grant of a Certification Proceeding Order (CPO) in the Ro-Ro collective claim by Mr. McLaren offers important further guidance as to a number of aspects of the test to be applied at the certification stage and further develops the position which the Tribunal has taken in the Merricks, Trains and BT CPO judgments last year.
Significantly, McLaren is the first CPO judgment in which the Tribunal has explicitly considered the position of larger corporates within an opt-out class with the defendant shippers’ having argued that larger businesses should be hived off and dealt with on an opt-in basis. Mrs Justice Falk’s refusal to treat larger businesses in the class differently to smaller corporates and consumers is noteworthy and these aspects of the judgment will no doubt be of interest to those involved in other proposed collective actions which feature businesses, such as FX and Trucks (where CPO judgments are still awaited following hearings last year).
McLaren is also significant in its further exploration of the legal test to be applied to the methodology for the purposes of establishing class-wide loss at the certification stage. The Tribunal rejected the defendants’ strike out application which was based on alleged flaws in the claimant’s methodology designed to ascertain levels of pass-on and in doing so set down important guidance as to how the Microsoft test will be applied in the context of the commonality requirement.
Of particular importance for subsequent cases, the Tribunal found that:
(i) it is not the role of the Tribunal at the certification stage to determine the merits and robustness of the expert methodology, rather the Tribunal will determine whether the methodology offers a “realistic prospect of assessing loss on a class-wide basis”. In doing so, it clarified that this does not, however, mean that the Tribunal must satisfy itself that the methodology is bound to work, or will work on a balance of probabilities, whatever the evidential challenges”;
(ii) the Tribunal’s role at certification is to assess the methodology put forward by the applicant, rather than to determine what the best methodology might be;
(iii) questions of causation are acutely fact-sensitive and are matters for trial;
(iv) at the certification stage a proposed methodology can only be provisional and a chosen methodology may need to be adapted at a later stage in proceedings based on the data available; and
(v) it is not fatal to a claim if some members of the class certified may ultimately not be proved to have suffered loss in a manner that would be quantified by the proposed methodology.
Further guidance is also provided in relation to the cost/benefit assessment of claims pursuant to Rule 79(2)(b), the Tribunal making light work in dismissing the defendant’s attempts to undermine the claim on this basis. In doing so the Tribunal again highlighted the necessary role played by third-party funding in collective proceedings and confirmed that the potential take-up rate by the class is not the only measure of benefit stemming from proceedings - another such benefit being the role collective claims play in deterring wrongful conduct. Notwithstanding an argument that the amounts involved on a per class member basis may be modest, the Tribunal placed importance on the fact that the total claim value is substantial and that most class members would be able to retrieve information about vehicle purchases.
Finally, the Tribunal dealt with two issues which have been aired in prior certification decisions, namely the inclusion of deceased consumers within the class and compound interest. In relation to the former, Mr McLaren was not permitted to amend his claim to include potential class members who had passed away prior to proceedings being issued, due to the expiry of the relevant limitation period. In relation to the latter, by contrast to the Judgment in Merricks last year, the Tribunal was prepared to certify compound interest as a common issue despite the fact that it is common only to a proportion of the class who had purchased vehicles using finance arrangements.
The Tribunal’s grant of a CPO is conditional upon Mr. McLaren making adjustments to his methodology to account of the ruling on these points and any determination as to the need for sub-classes.
For the reasons above, McLaren is yet a further shot in the arm for claimants seeking redress in opt-out collective proceedings. The inclusion of larger business class members in an opt-out class is significant, as is the clear guidance offered as to the legal test for assessing a claimant’s proposed methodology. It is likely that these issues will see further exposure in the forthcoming CPO judgments in FX and Trucks, both of which are hotly anticipated.