2018 has not only been a year of several competition law firsts, but it has also produced a number of helpful precedents for claimants bringing competition damages actions in the English courts. So, what were the key cases of 2018?
EU competition law has a wide territorial scope
In February, conflicting lower-court decisions concerning the territorial scope of EU competition law were resolved by the Court of Appeal in iiyama. Persuaded by the Intel judgment, it was held that indirect purchases made outside of the EEA may, in fact, fall within scope of EU competition law. This judgment represented a significant victory for claimants in resisting interlocutory challenges to jurisdiction – although the precise effects remain to be tested at trial. The Supreme Court denied the defendants’ application to appeal. We wrote an in-depth review for European Competition Law Review.
Disclosure in the context of settlement decisions
In March, the Competition Appeal Tribunal (“CAT”) granted an application for further specific disclosure in order to clarify the scope of follow-on claims in the context of a settlement decision in PSA v NSK & Others (the ball-bearings cartel). The CAT sided with the claimants in deciding that, even if not expressly identified in the settlement decision, the disclosure sought formed a part of the cartel’s actual workings and that the evidence sought was likely to be directly relevant to quantum. The CAT helpfully noted that settlement decisions (such as the one in issue in these proceedings) focus upon fines and not upon facts, in contrast with full infringement decisions which “span many hundreds of paragraphs and recite voluminous documentary evidence to support the finding of liability”.
Insight into determining applicable law
Also in March, and following the first trial in a competition damages claim to determine applicable law, it was decided in Deutsche Bahn v MasterCard that the applicable law in claims concerning unlawful interchange fees ought to be the law of the country where the transaction took place. This involved an analysis of three different regimes under English law governing the determination of applicable law across the claim period (spanning back to 1992). The Court’s finding provides an indication as to how the Court may roll-back the analysis to determine applicable law through the lens of the Rome II regulation – although the application of the relevant legal tests will turn on particular facts. Our article on ‘the Battle for Waterloo’ expands on the decision.
Establishing English jurisdiction
In June, the Court in Vattenfall confirmed that the English Courts observe a low threshold in accepting jurisdiction for cartel damages claims in the context of summary judgment and strike-out. The Court found that the claimants need not demonstrate that the non-addressee UK subsidiaries had actual knowledge of the cartel. Furthermore, the judgment in this case sets out a non-exhaustive list of activities that constitute cartel implementation by such subsidiaries. These findings greatly assist claimants in establishing English jurisdiction. More recently, the defendants’ application for permission to appeal was denied. We expanded on these judgements in an article for ICLG.
Confirming the high-threshold for establishing pass-on
In July, the Court of Appeal handed down a much-awaited judgment in Interchange, holding that MasterCard/VISA’s interchange fees constituted a restriction on competition, although the issue on exemption was remitted to the CAT. However, as to the judgment’s wider significance, the Court confirmed that it is for the defendant relying upon a pass-on defence to show – as a matter of law – a direct causal link between the overcharge and any consequential increase in the claimant’s price. A clear distinction must be drawn between this and the finding of compound interest, where economic assumptions may be made. As a result, the CAT’s judgment in Sainsburys v MasterCard (one of the three judgments under appeal) was held not to be inconsistent in finding that MasterCard had failed to establish pass-on, despite Sainsbury’s being entitled to compound interest on only 50% of the damages. You can read more about the judgment here.
The first follow-on case to reach judgment
The first judgment handed down by an English court in a cartel damages claim in October is of interest to many who are involved in, or contemplating, bringing or defending them. Overall, the judgment in BritNed v ABB provides welcome guidance as to how the courts will approach cartel damages claims, although it is important to remember that the judgment is based on an assessment of the specific facts of the BritNed project, and of the witness and documentary evidence that was available to the court. It remains to be seen how the principles and approach in the BritNed judgment – including the approach taken to economic models used to quantify overcharge – would be applied to other cartel damages claims.
We looked at the arguments and the judgment’s key conclusions, and what it says about the key issues arising in such claims.
Collective proceedings in the CAT
December bore witness to the joint case management conference (“CMC”) of two proposed collective action claims in the CAT concerning follow-on damages arising from the Trucks Cartel. The CAT is considering whether to certify either or both collective proceedings (one opt-in and one out-out). In the CMC, Roth indicated that there was no reason why opt-in proceedings could not co-exist alongside opt-out proceedings. The CAT’s decisions on the case-management of these claims are ones to watch for 2019, and a hearing of the two collective proceedings applications has been set for early June at which these issues should be decided.
Appealing a collective proceedings order (“CPO”)
Earlier this month, Walter Merricks – in his attempted opt-out claim on behalf of consumers for £14bn of damages arising from unlawful interchange fees against MasterCard – was granted a hearing to argue why the Court of Appeal or Administrative Court had jurisdiction to hear an appeal of the CAT’s decision not to certify the opt-out claim. The panel was persuaded that the Court of Appeal has jurisdiction – contrary to the CAT’s view – to hear a substantive appeal. The application for permission to appeal (and any substantive appeal) will be heard in February 2019.
At the start of January, we will look forward to what 2019 might bring us when it comes to competition litigation in the UK.