The Consumers' Association has lodged a claim for damages with the Competition Appeal Tribunal (CAT) under Section 47B (consumer claims for damages) of the Competition Act 1998. The claim is brought against JJB Sports plc on behalf of some 130 individual consumers and relates to findings by the OFT and the CAT, endorsed by the Court of Appeal, in respect of price fixing arrangements relating to the sale of replica football shirts.
The Consumers' Association is seeking the following relief on behalf of each consumer:
- Compensatory damages in respect of each shirt bought by a consumer from a participant in one of the infringements during the period of the infringement found by the OFT and the CAT;
- Exemplary or restitutionary damages in the sum of 25% of the relevant turnover of JJB, or such sum as the CAT considers appropriate, to be distributed in accordance with the direction of the CAT;
- Alternatively, all necessary accounts and inquiries and an order for payment of all such sums as may be found to be due and payable by the defendant to the claimant upon the taking of such inquiry;
- Further or other relief, interest and the expenses and disbursements incurred by the Consumers' Association in bringing the claim.
In August 2003, the OFT concluded its investigation into the pricing of replica football kits and imposed total fines of £18.6 million on ten companies involved in the cartel. The OFT had found a number of agreements which fixed the resale price of replica football shirts manufactured by Umbro, in breach of Article 81 EC Treaty and the Chapter I prohibition on anti-competitive agreements under the Competition Act.
JJB appealed to the CAT against the finding of liability and the penalty. The CAT largely upheld the OFT's decision but reduced the fine imposed on JJB. JJB subsequently appealed to the Court of Appeal but the appeal was dismissed in its entirety. On 5 February 2007, the House of Lords also refused leave to appeal.
Representative claims of behalf of consumers
The Enterprise Act 2002 introduced new provisions to the Competition Act 1998 which make it possible for representative claims for damages to be brought on behalf of consumers by a 'specified body'.
Section 47A allows for damages claims arising from an infringement of the Chapter I or Chapter II prohibitions or Articles 81 or 82 of the EC Treaty to be brought before the CAT, based on infringement decisions of either the OFT or the EC Commission, once all appeal possibilities relating to the underlying decisions have been exhausted.
Under Section 47B, a 'specified body' may also bring proceedings before the CAT on behalf of a number of complainants where:
- The claim is one to which Section 47A applies;
- Each claim relates to the same infringement; and
- The claims relate to the supply of goods or services to those individuals in their capacity as consumers.
The Consumers' Association was appointed as a 'specified body' entitled to bring such claims by the Secretary of State under the Specified Body (Consumer Claims) Order 2005.
The claim brought by the Consumers' Association is the first consumer damages claim made under Section 47B of the Competition Act 1998. The purpose of such consumer damages claims is to facilitate actions in circumstances where individual actions are unlikely to be brought because the amounts at stake are small, and the replica football kits case would therefore seem an ideal candidate for this procedure.
Any damages awarded in respect of claims brought under this provision are awarded to the individuals but with the consent of the specified body and the individuals, the sum awarded may be paid to the specified body on behalf of the individuals, thereby enabling the representative body to facilitate enforcement of any damages award.
Previous damages claims made by individual companies under Section 47A have settled (BCL Old Co and Deans Food v Aventis, and Healthcare at Home v Genzyme), but it is likely that the Consumers' Association will be less inclined to settle, treating this as a test case to develop the law to facilitate future cases. If so, the case is likely to raise a number of novel and potentially complex issues of practice and procedure