All for one and one for all – Tribunal orders single joint expert for Defendants in stand alone cartel damages claim
The Competition Appeal Tribunal has set new precedent on the ability of defendants to rely on their own experts in the field of competition economics in multi-defendant private actions. In a groundbreaking ruling handed down yesterday, the Tribunal held that there is no presumption that defendants should be able to rely on their own experts. Instead, it required the defendants to share an economist, rejecting their argument that this would be contrary to the rights of defence, disproportionate and lead to a conflict of interests.
The Tribunal’s ruling was issued on 2 November 2023 in PSA Automobiles SA & Others v Autoliv AB & Others [1], a standalone claim for damages alleging that the remaining Defendant groups – Autoliv, ZF/TRW, and Tokai Rika – entered into one or more anti-competitive agreements or concerted practices in relation to the supply of occupant safety system (“OSS”) car parts in the EEA. The claim relies, in part, on two European Commission decisions[2] which identified cartels in relation to OSS components sold to car manufacturers other than the Claimants. Other competition authorities around the world have also investigated, or are continuing to investigate, anticompetitive conduct in the OSS market.
All but one of the Defendants applied to vary a previous case management order directing all Defendants to instruct and rely on a single joint expert in the field of competition economics.
As the Tribunal had not previously heard full argument on this topic before making its prior Order, it considered arguments supporting and objecting to the applications at a case management conference on 20 October 2023.
Parties arguments
The Defendants sought to rely on Article 48 of the Charter of Fundamental Rights of the European Union (“Charter”). According to the Defendants, competition damages claims entail allegations of quasi-criminal conduct. As a result, they argued that Article 48 of the Charter – which requires that national courts’ “respect for the rights of the defence of anyone who has been charged shall be guaranteed” – is engaged and a relevant consideration in determining the right of each Defendant to rely on its own expert.
The Defendants also noted that it was an established practice of the Tribunal to permit defendants to rely on the evidence of their own experts, and that this practice was “underpinned by considerations of justice, fairness and the rights of defence”.
Finally, the key topic the economists would need to assess, namely the existence and extent of any overcharge in the prices of OSS components caused by the Defendants’ conduct, was at the heart of each Defendant’s case. The Defendants argued that there would be a potential conflict of interest in having a single joint expert, for example, if questions of apportionment of damage arise or if it transpired that the cartel was conducted by some but not all Defendants.
In response, the Claimants argued that expert evidence needs to be carefully controlled, as otherwise, the mass of different expert views could become positively detrimental to the fair resolution of the issues. The Claimants’ position was that not only was it feasible for a single joint expert to be instructed to analyse multiple Defendants’ datasets, but it would be much more efficient in terms of time and costs. Having separate economic experts for each Defendant, with each expert likely making different methodological choices, could create difficulties in reconciling the analyses which would, in turn, make it much harder for the Tribunal to understand the differences in approach and reach a just outcome.
Decision
The Tribunal refused the applications to vary its previous Order, limiting the Defendants to a single joint economic expert.
Firstly, the Tribunal expressed doubt at the proposition that a private action for damages falls into the same category as quasi-criminal proceedings brought by competition authorities. Even if Article 48 of the Charter was engaged, the Tribunal considered there was no subsequent presumption that each defendant should be entitled to instruct its own expert.
The Tribunal, whilst giving consideration to the Defendants’ contention that ordering a single joint expert would be contrary to the Tribunal’s standard practice, held that such practice cannot of itself be determinative. It noted that very few cartel cases before the Tribunal had gone to trial, thereby giving less weight to this common practice.
Instead, the Tribunal set out the following factors impacting the approach to follow:
- Just and proportionate: when exercising its powers to limit expert evidence, the overriding consideration for the Tribunal is to ensure that the proceedings are dealt with justly and at proportionate cost.
- Material conflict of interest: To decide what is just, there must be a consideration of whether there is a real – and not merely theoretical – risk of a conflict of interest in relation to the issues for which expert evidence would be adduced.
- Complexity of the case: regard should also be given to the complexity of the proceedings, the potential for multiple and unreconciled expert opinions arising and there is an expectation that better quality justice will be administered where disputes are appropriately focused and streamlined.
Applying these factors to the case before it, the Tribunal concluded that “there are no material conflicts of interest between the Defendant groups in relation to the proposed use of expert evidence in the field of competition economics”[3]. Consequently, the Tribunal considered that justice would be best served by having a single expert shared by the Defendants, as, having an overview of data from each of the Defendant groups, the joint expert would be best placed to assist the Tribunal. The Tribunal noted that the alternative approach, of permitting multiple Defendant experts, was fraught with difficulty and was likely to impact the quality of justice.
Comment
Following several unsuccessful attempts by Claimants in prior cases, this judgment is the first cartel damages claim in which the Tribunal has ordered Defendants to rely on the evidence of a single, joint economic expert. Given the centrality of such evidence in all competition damages claims, the impact of the judgment is far-reaching. Perhaps the biggest impact is in rebutting the previously often repeated notion that the Tribunal’s standard practice is to permit Defendants to rely upon their own experts, at least on the issue of overcharge. The onus has now sensibly shifted to the Defendants, to demonstrate why multiple experts should be permitted, considering the likely impact this would have on the quality of justice and costs.
Note: Hausfeld & Co. LLP is instructed by the Claimants
Footnotes
1 [2023] CAT 66. The Tribunal’s judgment is available here.
2 AT.39881 – Occupant Safety Systems supplied to Japanese Car Manufacturers and AT.40481 – Occupant Safety Systems (II) supplied to the Volkswagen Group and the BMW Group.
3 [2023] CAT 66, paragraph 19(3), paragraph 29.