On 7 September 2021, the Competition Appeal Tribunal handed down judgment in Forrest Fresh Foods (FFF) v Coca-Cola European Partners Limited (CCEP) [2021] CAT 29, striking out FFF’s claim in its entirety as each allegation was found to be insufficiently particularised and to be without any reasonable basis or real prospect of success. Strike out applications are relatively rare in the Competition Appeal Tribunal, and so this ruling is a useful reminder of the standards to be met when pursuing a competition claim.

Background

FFF is a wholesale supplier of soft drinks and fast food, with an approximate annual turnover of £47 million in the trading year to April 2020. Its website describes it as “one of the largest independent wholesalers in the country”. CCEP is a licensed independent bottler for products of The Coca-Cola Company.

On 31 March 2021, FFF issued a claim against CCEP alleging that CCEP had abused a dominant position in “the market for the wholesale supply of soft drinks within the European Market”. FFF sought damages, including exemplary damages, plus interest. FFF did not attempt to define the market, nor did its pleadings detail how CCEP allegedly abused a dominant position. Both in pre-action correspondence and prior to issuing an application, CCEP pointed to deficiencies in the pleading. On 14 May 2021, CCEP applied to strike out the claim and/or for reverse summary judgment.

Judgment

Rule 41 of the Competition Appeal Tribunal Rules empowers the tribunal to strike out the whole or part of a claim on a number of bases, including if it considers that there are “no reasonable grounds for making the claim”. Rule 43 similarly empowers the tribunal to give summary judgment against either party on the whole of a claim if it considers that such party “has no real prospect of succeeding” and there is no other compelling reason why the case or issue should be disposed of at a substantive hearing.

The tribunal referred to Easyair v Opal Telecom [2009] EWHC 339 (Ch) at [15] (adopted by the CAT in Wolseley v Fiat Chrysler Automobiles [2019] CAT 12), which sets out the well-known principles governing such applications. Among other matters, the court will consider whether the claimant has a “realistic” prospect of success (as opposed to a “fanciful” one). In reaching a decision in a strike out application, the court must not conduct a “mini trial”; it must consider the claim as pleaded. It is not for the court to hypothesise about what the claimant’s case might or could be. The tribunal underlined this point in the judgment and concluded that no viable case had been made out. It was clear that the claimant’s failure to remedy its claim at the pre-action stage (though repeatedly warned of the deficiencies), and its failure to take the opportunity to amend on the invitation of CCEP once the claim was filed, weighed heavily in favour of the tribunal granting judgment for CCEP.

The tribunal underscored the importance of pleading cases properly in competition law litigation, a specialist area of law. The judgment noted that it is “trite law to say that a claim must be properly pleaded” and quoted from Roth J in Sel-Imperial v The British Standards Institution [2010] EWHC 854 (Ch) “it is important that competition law claims are pleaded properly. To contend that a party has infringed competition law involves a serious allegation of a breach of quasi-public law, which can indeed lead to the imposition of financial penalties as well as civil liability. A defendant faced with such a claim is entitled to know what specific conduct or agreement is complained of and how that is alleged to violate the law”.

Counsel for the claimant did not dispute the authorities that emphasised the importance of proper pleadings and the standard which the tribunal should apply. That said, the claimant had not applied to amend its pleading and did not offer any draft amended particulars of claim before or at the hearing. Nor, when invited to do so at the hearing, could the claimant articulate what further particulars it might provide if the case were to proceed to trial. The tribunal described this behaviour as “a deeply unsatisfactory approach to a strike out/summary judgment application”. The panel noted, “The onus is on a claimant advancing a claim of infringement of competition law to identify (i) the relevant primary facts which are the foundation of that claim, (ii) the way in which those facts are said to infringe the relevant competition law provision(s) relied upon, and (iii) the way in which that alleged infringement is said to have resulted in the loss or damage claimed.”

Deficiencies of this nature affected each head of claim that FFF advanced. The tribunal carefully went through each allegation to demonstrate exactly how each head of claim was “hopelessly unparticularised”, and in some cases “unintelligible as to the legal basis for the claimed abuse of dominance,” which led the tribunal to conclude that each head of claim had no reasonable prospect of success.

As to exemplary damages, the tribunal held that the claimant did “not remotely meet” the required pleading standard as set out in 2 Travel Group v Cardiff City Transport Services [2012] CAT 19, being that where exemplary damages are sought, “it will be necessary to plead, and to plead with specificity, facts and matters alleging that the competition law infringement in question was executed either intentionally in breach of the law or recklessly so as to be regarded as sufficiently outrageous so as to fall within Lord Devlin’s second category [in Rookes v Barnard].”

Comment

Strike out applications are relatively rare before the Competition Appeal Tribunal. They are challenging to win, but the benefits can be very significant; early disposal of these types of claims saves significant resources for defendants. Given the risks, defendants should weigh their options carefully before applying for strike out. It is also important to consider the nature of the case being advanced, as the approach to pleading standards varies between different types of competition damages claims. In Nokia Corporation v AU Optronics and others [2012] EWHC 731 (Ch), a strike out application was rejected, and the court ruled that, where considering the adequacy of the pleading, “the balance is to be struck by allowing a measure of generosity in favour of the claimant”. However, that was a secret cartel claim where it was alleged that the defendants had concealed their wrongdoing, which was quite different to FFF’s claim of abuse of a dominant market position.