Those who have studied the new Rules of the Competition Appeal Tribunal will have noticed §119(2) and (3), which state that the old Rules of limitation continue to apply to claims that arose before 1 October 2015, being the date the new Rules came into force.
On first reading, this seems innocuous. However, before 1 October, the CAT only had jurisdiction to hear claims which followed on from an infringement decision by a regulator. Under the new Rules, the CAT can hear standalone claims too; albeit that, if those claims arose before 1 October, the old limitation rules apply. There is a serious question as to whether those rules are fit for purpose when applied to standalone claims.
§31(2) of the old Rules specifies a two year limitation period.
§31(2)(a), in effect, says that the two years commence on:
- the expiration of the deadline to appeal the infringement decision on which the claim is based (if no appeal is made); or else
- the date of determination of the appeal.
Alternative, §31(2)(b) gives a Claimant two years from the date on which the cause of action accrued, if later.
It is fair to say §31(2)(a) was always the more relevant rule. It would be rare for the cause of action to accrue later than the date of the infringement decision, although there was an obvious need for §31(2)(b), to avoid unfairness in case it did.
The earliest limitation date for follow-on claims under the old Rules is therefore two years from the expiration of the deadline to appeal; which is not generous, but in most cases it will be long enough to give Claimants a fair opportunity to consider action, given that they will usually already have known of the possibility of an infringement decision for several years, since the regulator sent its Statement of Objections.
However, for a standalone claim, there is no infringement decision, so §31(2)(b) is the only limitation rule. Two years from the cause of action accruing is an extremely tight timeframe when there is no Statement of Objections or infringement decision to forewarn Claimants of commencement of the clock.
In comparison, limitation periods in the High Court and (under its new Rules) the CAT are in accordance with the Limitation Act 1980, allowing six years either:
- from the accrual of the cause of action; or
if the Defendant deliberately concealed facts relevant to the right of action, as tends to be the case in cartel claims:
- from the date the concealment was discovered, or could have been discovered with reasonable diligence.
Not only do the CAT’s old Rules prescribe a much shorter period, they make no provision to delay commencement of the period in the event of concealment.
It is not clear whether the drafters of §119(2) and §119(3) fully considered the consequences of applying the old Rules to all claims that “arose before” 1 October 2015 given that such claims may now be standalone. The Guide to the new Rules provides no enlightenment where it might have been expected (at §5.13) and, indeed, the choice of language in §119(3) itself is not above criticism, given the ambiguity over when a claim “arises”. Limitation periods tend to be defined by reference to when the cause of action accrued which, in comparison, is far more certain.
How “arose before” will be interpreted remains to be seen, but it could hardly be a reference to the date on which the proceedings commenced, because that is the subject of §119(1), which provides that, where proceedings commence before 1 October, the old Rules apply in their entirety; not just in respect of limitation. It therefore seems clear that §119(2) and (3) apply to proceedings commencedafter 1 October, and therefore potentially to standalone claims.
The upshot is that, whilst the intention behind the new Rules was to turn the CAT into a centre of excellence for all antitrust damages actions, the High Court may for a while yet remain the only venue for many standalone claims, and perhaps even hybrid claims which are part standalone and part follow-on.
The ramifications of this are particularly problematic for collective actions which cannot be brought in the High Court at all.
Indeed, before the CAT obtained the jurisdiction to hear standalone claims, there was a reluctance to bring even pure follow-on actions before it, given the danger that the case would be stymied if it strayed outside the four corners of the infringement decision. The question now is whether, for follow-on claims that arose before 1 October, that risk has become one of limitation instead of jurisdiction.
The answer to that question depends on how the Courts interpret s47A(7) and (8) of the Competition Act 1998 as it used to be before it was changed by the Consumer Rights Act 2015.
s47A(7) and (8) are the subsections mentioned in §31(2)(a) of the old Rules, and they refer to:
“proceedings in respect of a claim made in reliance on a decision”
(of UK or European regulators).
The issue is whether the entirety of a hybrid claim (or follow-on claim that strays into hybridity) is deemed to be proceedings “in reliance on a decision”.
This would seem to be a perfectly tenable construction, and one it might be hoped the Courts would adopt rather than import the problems of §119(2) and (3) into hybrid claims and follow-on claims that may become hybrid. However, there is still a risk there for Claimants proposing to start such claims in the CAT if they “arose before” 1 October.