The High Court has ordered the Sainsburys v MasterCard case to be transferred from the High Court to the Competition Appeal Tribunal (the “CAT”). This order was made just six weeks before the start of a nine week trial that is due to commence on 11 January 2016.
Sainsburys claim in the High Court
Sainsburys initiated a claim in the High Court for damages against MasterCard, claiming that MasterCard had breached competition law by setting excessive interchange fees for the use of its cards. Sainsbury’s claim can be classed as a “hybrid” damages claim as it includes both “stand alone” and “follow on” elements.
A “stand alone” claim is a claim where the court itself is asked to make a finding of infringement as opposed to a “follow on” claim where the claimant relies solely upon a binding infringement decision issued by a competition authority. A “hybrid” claim is one where the claimant both relies upon a binding infringement decision and also asks the Court to make an additional infringement finding that is wider than or separate to that included in the competition authority decision.
Sainsburys issued its claim in the High Court in December 2012. At this time, the old s47A of the Competition Act 1998 limited the jurisdiction of the CAT and prevented stand alone or hybrid damages claims from being pursued in the CAT. Sainsburys rely upon the European Commission’s decision against MasterCard from December 2007 and also allege that, in any event, MasterCard has acted in breach of Article 101 TFEU. Sainsburys could not, therefore, have issued this case in the CAT at this time.
Between December 2012 and October 2015, the claim progressed in the High Court and a number of applications concerning specific disclosure and preliminary issues were heard by Mr Justice Barling. Directions were set and a nine week trial was listed to start in the High Court January 2016.
The Consumer Rights Act 2015 and The Section 16 Enterprise Act 2002 Regulations 2015
On 1 October 2015, two key pieces of legislation came into force – The Consumer Rights Act 2015 and the Section 16 Enterprise Act 2002 Regulations 2015.
The Consumer Rights Act amended section 47A of the Competition Act 1998 and expanded the jurisdiction of the CAT so that “stand alone” and “hybrid” competition damages cases can now be heard in the CAT.
The Section 16 Enterprise Act Regulations enable the High Court to transfer to the CAT proceedings that relate to stand alone, follow on or hybrid competition damages claims.
The Judge’s Request
In light of these changes to the legislation, Mr Justice Barling wrote to the parties in November 2015 to request their views on whether this case would be an appropriate case to transfer to the CAT for trial.
In his judgment, Mr Justice Barling explained that the CAT’s multi-disciplinary constitution experts “is of considerable assistance in understanding and resolving the difficult issues which are a common feature of competition litigation.” He explained that the CAT has “the best of both worlds” as it is also “able to tap into the expertise of the High Court in this field” by appointing Chancery judges as CAT Chairmen.
MasterCard agreed with the suggestion that the trial should be transferred to the CAT. Whilst Sainsburys were not in principle opposed to a transfer, they sought confirmation from the judge that the transitional limitation provisions in Rule 119 of the CAT Rules would not apply.
Section 119 of the CAT Rules
Section 119 of the CAT Rules provides that where a claim “arose” before 1 October 2015 and where s47A of the Competition Act 1998 applies to the claim, the old CAT 2003 rules on limitation apply.
Mr Justice Barling summarised Sainsbury’s concern to be “if Rule 119 were to be interpreted as applying to the proposed transfer, it could be suggested that the CAT would only have jurisdiction in respect of that portion of the present claim for which the cause of action arose less than two years prior to the commencement of the claim”.
The judge found that Section 119 of the CAT Rules does not apply to cases that have been transferred from the High Court to the CAT. He explained that “[w]hatever the precise ambit of Rule 119…it is in my view clear that Rule 119 is only dealing with claims originating in the CAT”.
The judge added that “regardless of whether Rule 119…applies only to follow-on (and not to stand-alone) claims, which the claimant’s solicitors say is the subject of current debate, it would have no application to the present proceedings if they were transferred in whole or in part to the CAT under section 16”.
After considering the views of the parties and addressing Sainsburys concerns in respect of Section 119 of the CAT Rules, Mr Justice Baring ordered the case to be transferred to the CAT.
This judgment demonstrates the proactive approach that High Court judges are taking to the case management of complex competition damages claims and the eagerness of the Courts to promote and utilise the expertise of the CAT.
The judgment also confirms that section 119 of the CAT Rules do not apply to cases being transferred from the High Court to the CAT. Claimants will not, therefore, be at risk of having part of their claims timed barred by virtue of any such transfer. The thornier question of whether section 119 will apply to stand alone claims has however been left for another day.