General introduction to the legislative framework for private antitrust enforcement
It has long been accepted that those who have suffered loss as a result of competition law infringements are entitled to claim damages. The House of Lords acknowledged the possibility of damages for breaches of competition law in 1984 in Garden Cottage Foods v. Milk Marketing Board. In 2002, the Enterprise Act 2002 inserted Section 47A into the Competition Act 1998, giving the CAT (a specialist competition tribunal that already heard appeals against decisions of the competition authorities) the power to hear follow-on damages claims based on infringement decisions of the European Commission and the UK competition authorities. Section 47B of the Competition Act 1998 also provided for limited opt-in collective claims brought by certain designated representative bodies on behalf of consumers. A number of claims under Section 47A followed. However, this procedure had a relatively low level of uptake because of deficiencies in the drafting of the legislation and rules that limited the scope of Section 47A to strict follow-on claims, and that created very restrictive limitation rules. Claims were constrained by the 'clearly identifiable findings of infringement' in the underlying decision of the competition authority and could not be based on any sort of inference from a decision.
As claimants often wish to claim that an infringement went on for longer, or was wider in scope, than expressly found in an infringement decision, this was a significant restriction of the usefulness of the CAT. The Court of Appeal also held that claimants could not bring proceedings against defendants that were not specifically named as addressees of a decision, which presented a further obstacle to claims as it is often useful to be able to claim against other members of corporate groups in order to anchor jurisdiction in the UK. Claimants had a period of two years after the end of appeal proceedings in respect of the underlying decision, or after the date on which the cause of action accrued, if later, in which to bring their claims.
Meanwhile, the High Court had become one of the most popular forums in Europe for competition damages claims following cartel decisions of the European Commission. Claims in the High Court are brought under the common law jurisdiction of the Court, generally as claims for breach of statutory duty. They were subject to the standard six-year limitation period under the Limitation Act 1980. However, the Claims in respect of Loss or Damage arising from Competition Infringements (Competition Act 1998 and Other Enactments (Amendment)) Regulations 2017 have now implemented the relevant provisions of the Competition Damages Directive. They inserted Section 47F into the Competition Act 1998, which in turn introduced a new Schedule 8A to the Act. Paragraphs 17 to 26 of Schedule 8A set out the new rules on limitation periods. They differ in a number of important respects from the general rule in England and Wales, set out in the Limitation Act 1980. The general rule under the Limitation Act 1980 is that the limitation period starts when the cause of action accrued. However, where the defendant deliberately concealed from the claimant any fact relevant to the claimant's right of action, the limitation period does not start to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it. For competition claims, while Paragraph 19 introduces rules that are very similar to those set out in the Directive (under which time does not start to run until the claimant first knew or could have known of certain specified facts relating to the infringement), it also introduces the other key requirement of the Directive: namely, that the limitation period does not start until the infringement has ceased. In its judgment in Arcadia v. Visa in 2015, the Court of Appeal held that a claim by retailers in respect of losses resulting from credit card interchange fees was out of time in respect of losses suffered before 2007 (six years before the date of the claim) because sufficient facts to allow the claimants to plead their claim were available to them before that date. The Court of Appeal concluded that the Directive did not have retrospective effect, but it appears that had it done so, the entirety of the claim might still have been in time (because the infringement continued until less than six years before the date on which the proceedings were started). As such, Paragraph 19(1)(a) has potentially far-reaching effects. Paragraphs 20 to 25 set out a number of situations in which the limitation period is suspended, including while an investigation by a competition authority is ongoing, while a consensual dispute resolution process is in progress and while collective proceedings are pending.
In 2015, the provisions of Chapter 2 of Part 3 of the Consumer Rights Act 2015 entered into force. They amended Sections 47A and 47B, and introduced Sections 47C to 47E and 49A to 49E, of the Competition Act 1998. They introduced a number of refinements to proceedings before the CAT. First, Section 47A extended the jurisdiction of the CAT to permit stand-alone as well as follow-on claims, addressing one of the key concerns about the previous arrangements. However, Section 47A provided only a partial fix, because there remains some doubt as to whether it provides for stand-alone claims for infringements occurring before 1 October 2015. Secondly, Section 47E aligned limitation periods in the CAT with those in the High Court. Thirdly, Section 15A of the Enterprise Act 2002 provided for fast-track competition claims where one of the parties is a small or medium-sized business and the claim is relatively straightforward. Fourthly, Section 47B introduced collective competition damages claims. These were intended to resolve the obstacles faced by small claimants bringing claims individually. Section 47B introduced the possibility of both opt-out and opt-in collective proceedings (where all those falling within an identified class of potential claimants are included in the claim unless they opt out, or where the claim is brought on behalf only of those claimants who have expressly chosen to participate, respectively). In both cases, the claim is brought on behalf of the claimants by a representative.
The CAT must certify a claim before it proceeds. The certification process considers the suitability of the class representative who brings the claim on behalf of the class. The CAT Rules set out a number of factors that the CAT must take into account in assessing the suitability of the representative, including whether he or she will act adequately and fairly in the interests of the class, and whether there is a conflict of interest. In practice, the CAT has also considered the level of remuneration of the representative, and the arrangements with the funders.
The CAT must also consider whether the claims 'raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings' (Section 47B(6) Competition Act 1998). This is the central issue in the ongoing Merricks v. Mastercard proceedings, now on appeal following the refusal by the CAT to issue a collective proceedings order.