As regards the key developments in High Court claims, it is possible to identify the end of a "first phase" of cartel claims and the beginning of a new “interim” phase. Although the basic operating model is essentially unchanged - there are still some new eye-catching features that makes this current interim phase of cartel litigation rather like a technology upgrade: “UK cartel litigation 2.0”. Five of the key features of this interim phase are as follows:
- A move beyond the mainly procedural issues to reach the substance of the case more quickly, (which we explain in more detail below).
- Claimants have changed their tactics to attempt to avoid significant delays, such as only suing one or two of the cartelists on the basis that they are jointly and severally liable for all of the loss, rather than proceeding against all of them. This in turn has led to contribution proceedings under Part 20 of the Civil Procedure Rules being a feature of current cases.
- The increase of claims now being brought by indirect as well as direct purchasers.
- That many so-called “follow on” claims are in fact hybrid claims, which include a stand-alone portion to the extent that the claim extends beyond the cartel period as found by the regulator or applies to alternative facts by association with the decision.
- The fact that claims are being brought at an ever earlier stage, and often before an infringement decision has been reached, which is a feature that is only likely to increase as the growing number of claimant law firms based in the UK seek to establish themselves as the lead in any given cartel. This will be even more acute for opt-out claims.
The procedural delays that characterised the first phase of cartel cases
After the test cases of Arkin4, Crehan5 and a few others, there is a distinct phase of claims that started with the Cooper Tire6 case that was issued in December 2007 and ended in the summer of 2014 with the final settlement in that case two weeks into trial in May 2014 (a six and a half year period) and also with the settlement in the National Grid7 case a few days before trial in June 2014 (a case that lasted 5 years).
The reason these cases took so long to get to trial can be explained by the EU appeal process. However, the defendants used this time to raise a number of challenges which took considerable time to resolve. There were challenges to jurisdiction, applications to stay the claim pending the infringement decision appeal process and applications to resist disclosure of the infringement decision, of all of the related material passed to the Commission, and of any documents held in France pursuant to the French Blocking Statute.
What has essentially now changed - and why we are now in a new interim phase - is that a number of these procedural issues have largely been resolved, at least in principle, so that the opportunity for a defendant to delay has been substantially eroded. For example:
In determining jurisdiction, the basic rule is that defendants should be sued in their jurisdiction of domicile. Article 8(1) of the Judgments Regulation 1215/2012 EC is an exception to this rule. Article 8(1) provides that where the jurisdiction of the English courts has been established over one defendant, additional defendants domiciled in other Member States can also be sued in England in the same action, provided the claims are “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separating proceedings.” It has now been established by Provimi8 and Cooper Tire that jurisdiction can be established under Article 8.1 by pleading that an “anchor” defendant that is within the cartelist group but not an addressee of the decision nonetheless implemented the cartel in the relevant forum. In addition, the Court of Justice’s decision in Hydrogen Peroxide9 establishes that even if there is a settlement with the “anchor” defendant, that does not render Article 8(1) inapplicable.
Stay of proceedings
It is now clear from National Grid10 - a claim in respect of the gas insulated switchgear cartel - that while the Masterfoods stay will apply before any trial, the court will allow the case to progress in the interim. Where a claim is brought before an infringement decision has been reached, as in the Secretary of State for Health’s claim against Servier relating to the cardio-vascular medicine perindopril,11 it was held that the case should be stayed until 21 days after the oral hearing before the Commission (which is post-Statement of Objections but pre-Decision) to avoid the burden of the defendant fighting simultaneously on two fronts.
Disclosure of infringement decision
Although it will be important to preserve the confidentiality of the decision and to redact references to any leniency material, National Grid,12 Servier13 and Emerald Supplies14 all confirm that claimants will be allowed access to the infringement decision, within the confines of a confidentiality ring that, in particular, protects third party rights. When the litigation has started pending the outcome of the antitrust investigation, disclosure is likely to be restricted to material already disclosed by the parties to the Commission, at least in the first instance, as established by Infederation v Google15 and Servier.16
The French Blocking statute
In the cases of Servier and National Grid, the English Court of Appeal17 dealt with the effect of the French Blocking Statute on the disclosure of documents by French companies in the context of UK damages proceedings. The French defendants in those cases asked the English High Court to make a “court to court” request to obtain the relevant documents / information pursuant to EU Regulation 1206/2001 providing for the taking of evidence in legal proceedings because in the absence of such a request, the French companies would be put at risk of criminal prosecution. It is now clear from the Court of Appeal’s judgment that the Regulation is not mandatory but discretionary and the judges were allowed to use their discretion not to use it and to instead order compliance with English procedural rules. As a result of these cases, the French Blocking Statute is unlikely to be used as a defence to non-compliance with disclosure orders.
Having resolved these more procedural issues in principle, the types of preliminary application that are now before the courts are addressing more substantive issues. For example, where the defendant perceives the claimants to have potentially overreached by striving to claim the absolute maximum amount, this can set up issues to be challenged at a preliminary stage and which probably need to be determined by the court before any sensible settlement discussion can take place. For example:
- The interchange claims by a variety of retailers against Visa and MasterCard18 claimed in respect of the whole period during which default interchange fees had been set by Visa, dating back to 1977. Visa argued the limitation defence by way of a preliminary issue - that there were sufficient facts in the public domain to plead the claim at an earlier stage - and succeeded in knocking out the portion of the claim other than the six-year period preceding the claim.
- In Newson,19 the defendant, IMI plc, succeeded in dismissing the conspiracy aspect of the claim on the basis that the infringement findings did not support the required “intent to injure”. Similarly, in Emerald Supplies the defendants have sought to dismiss the claims brought by the claimants to recover losses suffered outside the EU by alleging unlawful means conspiracy and unlawful interference.