The National Pensioners Convention’s general secretary Dorothy Gibson has withdrawn her application to launch an opt-out class action against mobility scooters manufacturer Pride Mobility Products Limited. This is the first class action to be brought following the reforms to the UK’s collective damages regime introduced by the Consumer Rights Act 2015.5
The proposed collective proceedings would have combined follow-on actions for damages based on an infringement decision by the Office of Fair Trading (OFT) (the predecessor of the CMA) in March 2014. The OFT found that Pride had breached the Chapter I prohibition in the Competition Act 1998 by requiring eight retailers not to advertise certain of its products online below its recommended retail prices. The class on behalf of which Ms. Gibson sought to bring the claim was defined as comprising any person who bought a new mobility scooter from Pride in the UK between February 2010 and February 2012.
The action could only proceed after approval by the Competition Appeal Tribunal (CAT) in the form of a collective proceedings order (CPO). The CAT may only make a CPO if (i) it considers that the claims raise common issues and are suitable to be brought in collective proceedings and (ii) it authorises the proposed class representative on the basis that it is just and reasonable for that person to act in the proceedings.6
In its judgment of 31 March 2017 the CAT objected to the proposed class of purchasers, holding that Ms. Gibson could only pursue damages on behalf of customers that purchased Pride scooters from the eight infringing retailers, not from other retailers whose prices were affected by Pride’s restrictive pricing arrangements with those eight companies. The CAT was unable to assume how many other infringements took place as a result of the policy and, moreover, “[t]his would be to allow the Applicant to circumvent the boundaries of a follow-on action, and in effect recover for the represented class by the back door what she could not recover by the front”.7 The CAT adjourned the application for a CPO and invited Ms. Gibson to reformulate her claim and definition of sub-classes and to provide further expert evidence to justify the quantum of loss. The CAT subsequently reported in an order on 11 May 2017 that Ms. Gibson had withdrawn her application for a CPO. Her counsel has said that the costs of proceeding with the litigation would outweigh any potential damages.
This first application for a collective action shows that the CAT is willing to see such claims advance but will be rigorous in demanding sufficient evidence to justify class certification, in particular where it is proposed that stand-alone claims are included in a follow-on class action.
In addition, the CAT noted that the approach to certification of class actions in the UK is intended to be “very different” to the approach in the US, notably because the US regime involves extensive discovery, deposition, cross-examination and long hearings, whereas the UK system should involve no or only very limited disclosure and shorter hearings held soon after the claim form is served. The CAT considered that it could derive more appropriate guidance from the position in Canada.8
A second application to commence a class action was filed in September 2016 seeking damages for losses resulting from Mastercard's multilateral interchange fees.9