Conspiracy in the CAT: the scope of section 47A

What kinds of “follow-on” claims may be brought in the CAT?  ‘[A]ny claim for damages, or any other claim for a sum of money which a person who has suffered loss or damage as a result of the infringement of a relevant prohibition may make in civil proceedings brought in any part of the United Kingdom’, according to section 47A(1) of the Competition Act.  A ‘relevant prohibition’ for this purpose is of course defined as any of the Chapter I and II prohibitions or the prohibitions in Articles 101 and 102 of the Treaty.

The most obvious section 47A claim is a claim in tort for breach of statutory duty.  But what other causes of action fall within the scope of the section?

That question has been considered judicially for the first time in W. H. Newson Holding Ltd & ors. v IMI plc & ors. [2012] EWHC 3680 (Ch), a case arising out of the copper plumbing tubes cartel.  The claimants had in addition to a claim for breach of statutory duty pleaded two claims of unlawful means conspiracy, which the defendants applied to strike out on the basis that they fell outside the scope of section 47A.  (Don’t ask how a CAT follow-on claim under section 47A ended up in the High Court).

Mr Justice Roth rejected the defendants’ submission that section 47A was restricted to claims where the only outstanding issues were causation and quantum (the question of infringement having been determined by the regulator).  However, he held at §29, section 47A would not ‘generally permit claims… for conduct that is distinct from the infringement, even when the infringement is an element that has to be established to complete the cause of action.’  On this basis Roth J refused to strike out one of the conspiracy claims, which essentially relied upon the conduct held to constitute the Article 101 infringement as making out the elements of the tort of unlawful means conspiracy.   The other claim relied upon a prior agreement between certain of the defendants to enter into the cartel, which agreement was not addressed in the regulator’s decision.  The judge struck it out.

Mr Justice Roth’s decision is typical of the Courts’ restrictive approach to section 47A, lamented by James Segan in his recent blog on Emerson.  A rule that section 47A claimants may not rely upon conduct that is distinct from the infringement is tantamount to accepting the submission (which Roth J rejected) that section 47A claims must be restricted to issues of causation and quantum.  The language of section 47A is deliberately broad.   Policy reasons for construing it narrowly, and forcing claimants who wish to rely on conduct extraneous to the infringement out of the specialist Tribunal and into the High Court, are difficult to discern.

Roth J did accept that a contractual claim for breach of warranty or a restitutionary claim for money paid under a void contract might fall within section 47A, ‘since it is the infringement of competition law that constitutes the breach or establishes the entitlement to restitution’ (§29).  But in both cases it would be necessary to plead conduct (e.g. the entry into a contract) distinct from the infringement of competition law.  Indeed the scope for a restitutionary claim is doubtful even on a broad reading of section 47A: how is a claim for the restitution of money concerned with ‘loss or damage as a result of the infringement of a relevant prohibition’?  The claimant had already parted with his cash; the infringement of competition law does not cause him loss or damage, but entitles him to get it back.

The defendants in Newson have been granted permission to appeal, contending that Roth J should have interpreted section 47A more narrowly still and have struck out both conspiracy claims.  When Mummery LJ recently observed that ‘there will be more appeals on other aspects of follow-on proceedings’ (Emerson [2012] EWCA Civ 1559 at §7), he wasn’t wrong.