BCL Old Co Limited and others v BASF plc and others [2012] UKSC 45

A recent Supreme Court decision has clarified the operation of the two year limitation period for bringing follow-on damages claims under section 47A of the Competition Act 1998.

Background

Section 47A of the Competition Act 1998 gives a person who has suffered loss or damage by virtue of an infringement of EU or UK competition law (established by a decision of the European Commission or the UK competition regulators) the right to bring a monetary claim before the Competition Appeal Tribunal (CAT).

Rule 31 of The Competition Appeal Tribunal Rules 2003 (SI 2003/1372) (the CAT Rules) establishes a two year deadline for bringing a damages claim, beginning with the "relevant date". The relevant date is the later of the date on which the cause of action accrued, the date on which a right to bring an appeal expires, or the date of the final judgment in an appeal (Rule 31(2)).

In 2001 the European Commission found that BASF had infringed Article 81 EC (now Article 101 TFEU) due to entering into cartel agreements in relation to the sale of vitamins in the European Union. BASF appealed the Commission's decision, but solely against the fine that was imposed, not disputing the fact that the company had been a member of the vitamins cartel and was therefore liable for the infringement. On 15 March 2006, the Court of First Instance (now the "General Court") allowed the appeal and reduced the fine that had been levied.  BASF did not appeal that judgment.

On 12 March 2008 BCL sought to bring a claim for follow-on damages on the basis that they had suffered losses as a result of BASF's infringement of Competition law. The CAT ruled that their claim had been brought within the statutory two year limitation period, as the period had commenced when BASF's deadline for appealing the fine to the ECJ expired on 25 May 2006.

BASF challenged the CAT's ruling, claiming that the limitation period was not affected by appeals against penalty only and that the two years expired following BASF's failure to appeal to the General Court on liability. The Court of Appeal ruled in favour of BASF, and BCL appealed to the Supreme Court. BCL argued that the operation of the relevant limitation period for bringing follow-on damages claims was legally uncertain, and therefore breached the EU principle of effectiveness, which holds that that national courts may not lay down detailed procedural rules that "render practically impossible or excessively difficult" the exercise of EU rights.

Supreme Court Decision

The Supreme Court affirmed the Court of Appeal's judgment.  It held that EU law does not require the interpretation of a statutory limitation period to be clear "beyond doubt" - national law should simply be sufficiently "clear, precise and foreseeable" in order to enable individuals to determine and exercise their rights under national law.

It was held that the Competition Act made it sufficiently clear that only infringement decisions are relevant for determining the limitation period for bringing a follow-on damages claim.  Furthermore, there was no doubt that BASF's appeal had been on the amount of the fine only, and that BCL were under no illusions in this regard.  The Court was also unimpressed that BCL had relied on the fact that they had not commenced proceedings within what was established as the relevant limitation period.  It was held that BCL's conduct, in bringing their claim late, could not serve as the test of the clarity of the statutory provision.

BCL sought to rely on a line of CAT cases, beginning with Emerson Electric, in order to demonstrate how these decisions had rendered the interpretation of limitation periods legally uncertain. In response to this argument, the Court emphasised that, despite the fact that the legal position had taken some time to be clarified through the appeals process, this did not in itself mean that the law lacked certainty. The fact that first instance decisions on the operation of limitation periods have been overturned on appeal in the past has no impact on the certainty of the law. Indeed, there was no indication that BCL had relied on those cases in order to inform their interpretation of the limitation period. It was emphasised that the domestic legal position in this regard is now "unchallenged and unchallengeable".

It was decided that the limitation period for bringing follow-on damages claims had unequivocally started following the expiry of the period for any appeal on liability - this was on 31 January 2002. BCL were therefore found to be time-barred from making their claim.

The Court further held that the CAT did not have the power to extend the time limit for starting damages claims under the CAT Rules.

Comment

This decision makes it clear that any claim for follow-on damages under section 47A of the Competition Act must take place within two years from the expiry of the deadline for appealing an infringement decision. An appeal that solely relates to the quantum of the fine imposed will have no effect on this time limit.

In addition, it is now unequivocal that, once the statutory deadline for bringing a follow-on damages claim has expired, the CAT has no power to extend it.