The UK’s Competition Appeal Tribunal (“CAT”) has recently ruled that it is bound to apply relevant foreign laws on limitation to claims brought before it. This decision aligns the treatment of foreign limitation periods under the CAT’s jurisdiction with that of the High Court. However, as the President of the CAT Mr Justice Roth noted, the impact of this decision is of considerable significance beyond the present two actions; in particular it deals a blow to Deutsche Bahn and Peugeot, whose own claims against MasterCard and Pilkington now look set to be time barred.
The CAT was asked to consider the issue of foreign limitation periods as a preliminary issue in two separate claims: Deutsche Bahn (and others) v MasterCard, and PSA Peugeot Citroen (and others) v Pilkington. Both proceedings are ‘follow-on’ claims (i.e. claims that rely upon a competition authority’s decision to establish liability) and were already the subject of parallel litigation in the High Court. The hearing was to establish whether foreign laws on limitation can be used to establish how much time a claimant has to lodge its claim in the CAT.
Each claim was governed by foreign law. In the High Court, it is well established that this means that any relevant foreign limitation periods will apply. Concerned that this may cause their claims to be out of time in the High Court, the claimants issued parallel claims in the CAT once the relevant infringement decisions had become final, in an attempt to protect their claims from the impact of foreign limitation periods.
The laws on limitation that apply to proceedings brought in the CAT are complicated by recent changes which have been made to the legislative framework. Before the introduction of the UK Consumer Rights Act on 1 October 2015, claims had to be filed at the CAT within two years of an infringement decision becoming final. It was not possible (absent special permission) to bring a follow-on claim until all appeals to the relevant decision had been exhausted (the “Old CAT Rules”). This allowed follow-on claims to be held in abeyance until a decision became binding. In contrast, the standard limitation period in the High Court is six years.
The Consumer Rights Act sought to align the two regimes and, as a consequence, any claims brought in the CAT for which the New CAT Rules apply, will be subject to the same limitation rules as in the High Court, including the application of any applicable foreign limitation rules.
However, as the claims arose before 1 October 2015, the Old CAT Rules applied. MasterCard and Pilkington argued that the Old CAT Rules act as a comprehensive code and that the CAT regime was a special one, to which foreign limitation rules did not apply.
The Tribunal disagreed, finding that if foreign substantive law governed the two claims, then foreign limitation periods would apply.
The Tribunal noted that to find in favour of the claimants, it essentially needed to give the UK limitation rules extraterritorial effect. The CAT was not convinced that there were any overriding policy reasons which required this and justified the displacement of the foreign limitation rules that would otherwise govern.
In coming to this conclusion, the CAT also noted that the proposed interpretation of the Old CAT Rules was at odds with the approach of the High Court and with the treatment of limitation periods under the New CAT Rules.
The CAT’s judgment sets a clear precedent that foreign limitation periods in claims brought under the Old CAT Rules are to be treated no differently than a claim brought in the High Court or under the New CAT Rules. This approach ensures consistency across England and Wales, but, as the Tribunal acknowledged, the decision is “of considerable significance beyond the present two actions”.
Many prospective follow-on damages actions, relying on infringement decisions that pre-date 1 October 2015, still fall to be determined under the Old CAT Rules. For cases to which a foreign limitation period applies, there is a risk that by the time a final infringement decision has been reached (and proceedings can be brought in the CAT), the foreign limitation period will mean that the claim is time barred.
The effect this has on follow-on damages claims could be significant, although in reality, as the Tribunal itself noted, it is always open to claimants to issue early and in different courts in order to ensure their position on limitation is fully protected.